Document:

Exhibit 10.14

 

Execution Version

 

SIRIUS INTERNATIONAL GROUP, LTD.

 

as the Issuer

 

THE BANK OF NEW YORK MELLON

 

as Trustee, Registrar and Transfer Agent

 

and

 

THE BANK OF NEW YORK MELLON ACTING THROUGH ITS LONDON BRANCH

 

as Paying Agent and Calculation Agent

 

 

SUBORDINATED INDENTURE

 

Dated as of September 22, 2017

 

 

Floating Rate Callable Subordinated Notes Due 2047

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE 1
    
	
DEFINITIONS AND   INCORPORATION BY REFERENCE
    
	
 
    	
 
    	
 
    
	
Section 1.01.
    	
Definitions
    	
1
    
	
Section 1.02.
    	
Rules of   Construction
    	
14
    
	
 
    	
 
    	
 
    
	
ARTICLE 2
    
	
THE SUBORDINATED   NOTES
    
	
 
    
	
Section 2.01.
    	
Form and Dating
    	
15
    
	
Section 2.02.
    	
Payment of Interest
    	
16
    
	
Section 2.03.
    	
Arrears of Interest
    	
18
    
	
Section 2.04.
    	
Initial Amount of   Subordinated Notes
    	
18
    
	
Section 2.05.
    	
No Sinking Fund
    	
19
    
	
Section 2.06.
    	
Execution and   Authentication
    	
19
    
	
Section 2.07.
    	
Registrar, Transfer   Agent and Paying Agent
    	
20
    
	
Section 2.08.
    	
Holder Lists
    	
26
    
	
Section 2.09.
    	
Transfer and Exchange
    	
26
    
	
Section 2.10.
    	
Replacement   Subordinated Notes
    	
30
    
	
Section 2.11.
    	
Outstanding   Subordinated Notes
    	
30
    
	
Section 2.12.
    	
Treasury Subordinated   Notes
    	
31
    
	
Section 2.13.
    	
Temporary Subordinated   Notes
    	
31
    
	
Section 2.14.
    	
Cancellation; Purchases
    	
31
    
	
Section 2.15.
    	
No Rights of Set-off
    	
31
    
	
Section 2.16.
    	
ISIN or Common Code   Number
    	
32
    
	
Section 2.17.
    	
Agents
    	
32
    
	
 
    	
 
    	
 
    
	
ARTICLE 3
    
	
REDEMPTION AND   PREPAYMENT
    
	
 
    	
 
    	
 
    
	
Section 3.01.
    	
Final Redemption
    	
32
    
	
Section 3.02.
    	
Optional Redemption
    	
33
    
	
Section 3.03.
    	
Specified Event   Redemption of Subordinated Notes
    	
34
    
	
Section 3.04.
    	
Variation and   Substitution of the Subordinated Notes
    	
35
    
	
Section 3.05.
    	
Conditions to   Redemption
    	
36
    
	
Section 3.06.
    	
Election to Redeem;   Notices to Trustee
    	
37
    
	
Section 3.07.
    	
Selection of   Subordinated Notes to Be Redeemed
    	
37
    
	
Section 3.08.
    	
Notice of Redemption
    	
38
    
	
Section 3.09.
    	
Effect of Notice of   Redemption
    	
39
    
	
Section 3.10.
    	
Deposit of Redemption
    	
39
    
	
Section 3.11.
    	
Notes Payable on   Redemption Date
    	
39
    

 

 

TABLE OF CONTENTS (cont’d)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE 4
    
	
COVENANTS
    
	
 
    	
 
    	
 
    
	
Section 4.01.
    	
Payment of Subordinated   Notes
    	
40
    
	
Section 4.02.
    	
Additional Amounts   Applicable to the Subordinated Notes
    	
40
    
	
Section 4.03.
    	
Maintenance of Office   or Agency
    	
42
    
	
Section 4.04.
    	
Money for Subordinated   Notes; Payments to be Held in Trust
    	
42
    
	
Section 4.05.
    	
Deferral of   Distributions in the Event of Regulatory Breach
    	
43
    
	
Section 4.06.
    	
Reports
    	
44
    
	
Section 4.07.
    	
Compliance Certificates
    	
45
    
	
Section 4.08.
    	
Taxes
    	
45
    
	
Section 4.09.
    	
Tax Treatment of Subordinated   Notes
    	
46
    
	
Section 4.10.
    	
Stay, Extension and   Usury Laws
    	
46
    
	
Section 4.11.
    	
Corporate Existence
    	
46
    
	
 
    	
 
    	
 
    
	
ARTICLE 5
    
	
SUCCESSORS
    
	
 
    	
 
    	
 
    
	
Section 5.01.
    	
Consolidation,   Amalgamation, Merger or Sale of Assets
    	
46
    
	
Section 5.02.
    	
Successor Corporation Substituted
    	
47
    
	
 
    	
 
    	
 
    
	
ARTICLE 6
    
	
DEFAULTS AND   REMEDIES
    
	
 
    	
 
    	
 
    
	
Section 6.01.
    	
No Events of Default
    	
47
    
	
Section 6.02.
    	
Acceleration
    	
47
    
	
Section 6.03.
    	
Notice of Defaults
    	
48
    
	
Section 6.04.
    	
Other Remedies
    	
48
    
	
Section 6.05.
    	
Control by Majority
    	
49
    
	
Section 6.06.
    	
Limitation on Suits
    	
49
    
	
Section 6.07.
    	
Rights of Holders to   Receive Payment
    	
50
    
	
Section 6.08.
    	
Collection Suit by   Trustee
    	
50
    
	
Section 6.09.
    	
Trustee May File   Proofs of Claim
    	
50
    
	
Section 6.10.
    	
Undertaking for Costs
    	
51
    
	
Section 6.11.
    	
Restoration of Rights   and Remedies
    	
51
    
	
Section 6.12.
    	
Rights and Remedies   Cumulative
    	
51
    
	
Section 6.13.
    	
Delay or Omission Not   Waiver
    	
51
    
	
Section 6.14.
    	
Priorities
    	
51
    
	
 
    	
 
    	
 
    
	
ARTICLE 7
    
	
TRUSTEE
    
	
 
    	
 
    	
 
    
	
Section 7.01.
    	
Duties of Trustee
    	
52
    
	
Section 7.02.
    	
Rights of Trustee
    	
53
    
	
Section 7.03.
    	
Individual Rights of   Trustee
    	
56
    

 

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TABLE OF CONTENTS (cont’d)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Section 7.04.
    	
Trustee Not Responsible   for Recitals, Disposition of Subordinated Notes or Application of Proceeds   Thereof
    	
56
    
	
Section 7.05.
    	
Compensation and   Indemnity
    	
56
    
	
Section 7.06.
    	
Resignation and Removal   of Trustee; Replacement of Trustee
    	
57
    
	
Section 7.07.
    	
Successor Trustee by   Merger, etc.
    	
58
    
	
Section 7.08.
    	
Eligibility;   Disqualification
    	
58
    
	
Section 7.09.
    	
Rights of Trustee and   Agents to Receive Fees, Expenses and Indemnities
    	
58
    
	
 
    	
 
    	
 
    
	
ARTICLE 8
    
	
MODIFICATION AND   WAIVER
    
	
 
    	
 
    	
 
    
	
Section 8.01.
    	
Amendment and   Modification with Consent of Applicable Supervisor
    	
59
    
	
Section 8.02.
    	
With Consent of Holders
    	
59
    
	
Section 8.03.
    	
Without Consent of   Holders
    	
60
    
	
Section 8.04.
    	
Revocation and Effect   of Consents
    	
61
    
	
Section 8.05.
    	
Notation on or Exchange   of Subordinated Notes
    	
61
    
	
Section 8.06.
    	
Trustee to Sign   Amendments, etc.
    	
61
    
	
 
    	
 
    	
 
    
	
ARTICLE 9
    
	
SATISFACTION AND   DISCHARGE
    
	
 
    	
 
    	
 
    
	
Section 9.01.
    	
Satisfaction and   Discharge
    	
62
    
	
Section 9.02.
    	
Application of Trust   Money
    	
63
    
	
 
    	
 
    	
 
    
	
ARTICLE 10
    
	
SUBORDINATION
    
	
 
    	
 
    	
 
    
	
Section 10.01.
    	
Agreement to   Subordinate
    	
63
    
	
Section 10.02.
    	
Default on Senior   Indebtedness
    	
64
    
	
Section 10.03.
    	
Liquidation; Dissolution;   Bankruptcy
    	
65
    
	
Section 10.04.
    	
Subrogation
    	
66
    
	
Section 10.05.
    	
Trustee to Effectuate   Subordination
    	
67
    
	
Section 10.06.
    	
Notice by the Issuer
    	
67
    
	
Section 10.07.
    	
Rights of the Trustee;   Holders of Senior Indebtedness
    	
68
    
	
Section 10.08.
    	
Subordination May Not   be Impaired
    	
68
    
	
Section 10.09.
    	
Article Applicable   to Paying Agents
    	
68
    
	
Section 10.10.
    	
Defeasance of This   Article
    	
69
    
	
Section 10.11.
    	
Subordination Language   to be Included in Subordinated Notes
    	
69
    
	
Section 10.12.
    	
Trustee Not Fiduciary   for Holders of Senior Indebtedness
    	
69
    
	
 
    	
 
    	
 
    
	
ARTICLE 11
    
	
ADDITIONAL   SUBORDINATION UNDER APPLICABLE SUPERVISORY REGULATIONS
    
	
 
    	
 
    	
 
    
	
Section 11.01.
    	
Subordination of the   Subordinated Notes
    	
69
    
	
Section 11.02.
    	
No Encumbrances
    	
70
    

 

iii

 

TABLE OF CONTENTS (cont’d)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE 12
    
	
MISCELLANEOUS
    
	
 
    	
 
    	
 
    
	
Section 12.01.
    	
Notices
    	
70
    
	
Section 12.02.
    	
Certificate and Opinion   as to Conditions Precedent
    	
72
    
	
Section 12.03.
    	
Statements Required in   Certificate or Opinion
    	
72
    
	
Section 12.04.
    	
Rules by Trustee   and Agents
    	
73
    
	
Section 12.05.
    	
Agent for Service;   Submission to Jurisdiction; Waiver of Immunities
    	
73
    
	
Section 12.06.
    	
No Personal Liability   of Directors, Officers, Authorized Signatories, Employees and Shareholders
    	
73
    
	
Section 12.07.
    	
Governing Law
    	
74
    
	
Section 12.08.
    	
Waiver of Jury Trial
    	
74
    
	
Section 12.09.
    	
No Adverse   Interpretation of Other Agreements
    	
74
    
	
Section 12.10.
    	
Successors
    	
74
    
	
Section 12.11.
    	
Severability
    	
75
    
	
Section 12.12.
    	
Counterpart Originals
    	
75
    
	
Section 12.13.
    	
Table of Contents,   Headings, etc.
    	
75
    
	
Section 12.14.
    	
Indemnification of   Judgment Currency
    	
75
    
	
Section 12.15.
    	
Prescription
    	
75
    
	
Section 12.16.
    	
No Security Interest   Created
    	
75
    
	
Section 12.17.
    	
U.S.A. Patriot Act
    	
76
    
	
Section 12.18.
    	
FATCA
    	
76
    
	
Section 12.19.
    	
Prior Agreements
    	
76
    

 

iv

 

SUBORDINATED INDENTURE dated as of September 22, 2017 (the “Indenture”) among Sirius International Group, Ltd., a company organized and existing under the laws of Bermuda, as issuer (the “Issuer”), having its principal executive office at 14 Wesley Street, Hamilton HM 11, Bermuda, The Bank of New York Mellon, as Trustee (the “Trustee”), Registrar and Transfer Agent and The Bank of New York Mellon acting through its London Branch, as Paying Agent and Calculation Agent.

 

W I T N E S E T H:

 

WHEREAS, for its lawful corporate purposes, the Issuer has duly authorized the issue of SEK 2,750,000,000 aggregate principal amount of Floating Rate Callable Subordinated Notes (the “Subordinated Notes”) and in order to provide the terms and conditions upon which the Subordinated Notes are to be authenticated, issued and delivered, the Issuer has duly authorized the execution and delivery of this Indenture;

 

WHEREAS, the form of the Subordinated Notes and the certificate of authentication to be borne by the Subordinated Notes are to be substantially in the forms hereinafter provided for; and

 

WHEREAS, all acts and things necessary to make the Subordinated Notes, when executed by the Issuer and authenticated and delivered by the Trustee or a duly authorized Authenticating Agent, the valid, binding and legal obligations of the Issuer, and to constitute a valid agreement according to its terms, have been done and performed, and the execution of this Indenture and the issue hereunder of the Subordinated Notes have in all respects been duly authorized.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

That in order to declare the terms and conditions upon which the Subordinated Notes are, and are to be, authenticated, issued and delivered, and in consideration of the premises and of the purchase and acceptance of the Subordinated Notes by the Holders thereof, each party agrees for the benefit of the other parties and the Issuer and Trustee agree for the equal and proportionate benefit of the respective Holders from time to time of the Subordinated Notes (except as otherwise provided below), as follows:

 

ARTICLE 1
 DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01.  Definitions.

 

“Additional Amounts” has the meaning specified under Section 4.02.

 

“Additional Amounts Event” means, with respect to the Subordinated Notes, if an opinion of a recognized independent tax counsel has been delivered to the Trustee stating that the Issuer has or will become obligated to pay Additional Amounts on the Subordinated Notes as a result of any change in or amendment to the laws (or any rules or regulations thereunder) of any Taxing Jurisdiction, or as a result of any change in or amendment to an official interpretation or application of any such laws, rules or regulations by any legislative body, court, governmental agency or regulatory authority (including the enactment of any legislation and the publication of any judicial decisions or regulatory determination), which change or amendment becomes

 

 

effective on or after the Issue Date, and that obligation cannot be avoided by the Issuer taking such reasonable measures it (acting in good faith) deems appropriate.

 

“Additional Notes” means additional Subordinated Notes (other than the Initial Notes) issued from time to time under this Indenture in accordance with Section 2.04 and Section 2.06.

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Agent” means any Registrar, co-registrar, Transfer Agent, Authenticating Agent, Paying Agent, additional Paying Agent or Calculation Agent.

 

“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of Euroclear and Clearstream that apply to such transfer or exchange.

 

“Applicable STIBOR Rate” means the interest rate determined as follows:

 

(i)                                     On the Interest Determination Date, the Calculation Agent will determine the Applicable STIBOR Rate which shall be the rate for deposits in Swedish krona having a maturity of three months commencing on the Interest Determination Date that appears on the Reuters Screen STIBOR Page as of 11:00 a.m., Stockholm time, on such Interest Determination Date.

 

“Reuters Screen STIBOR Page” means the display designated under the heading “FIXINGS” on the “SIDE” page on Reuters (or such other page of Reuters as may replace such page or of equivalent service or any successor service for the purpose of displaying Stockholm interbank offered rates for krona-denominated deposits of major banks). If the Applicable STIBOR on such Interest Determination Date does not appear on the Reuters Screen STIBOR Page, the Applicable STIBOR Rate will be determined as set forth in (ii) below.

 

(ii)                                  With respect to an Interest Determination Date for which the Applicable STIBOR Rate does not appear on the Reuters Screen STIBOR Page as set forth in (i) above, the Applicable STIBOR Rate will be determined on the basis of the rates at which deposits in Swedish krona are offered by four major banks in the Stockholm interbank market selected by the Issuer on the advice of an investment bank of international repute (the “Reference Banks”) at approximately 11:00 a.m., Stockholm time, on such Interest Determination Date to prime banks in the Stockholm interbank market having a maturity of three months, and in a principal amount equal to an amount that is representative for a single transaction in such market at such time. The Issuer will request the principal Stockholm office of each of such Reference Banks to provide a quotation of its rate. If at least two such quotations are provided, the Applicable STIBOR Rate on such Interest Determination Date will be the arithmetic mean (rounded upwards) of such quotations. If

 

2

 

fewer than two quotations are provided, the Applicable STIBOR on such Interest Determination Date will be determined as at the preceding Interest Determination Date (save in respect of the first Interest Period following the Issue Date, in which case the Interest Rate shall be equal to 3.582%).

 

“Applicable Supervisor” means the BMA or, should the BMA no longer have primary supervisory authority with respect to prudential matters in relation to the Regulatory Group, the regulatory authority that has such primary supervisory authority.

 

“Applicable Supervisory Regulations” means any of the Bermuda Group Rules, Solvency II or such other insurance supervisory laws, rules and regulations relating to group supervision or the supervision of single insurance entities, as in each case are then being applied to the Regulatory Group by the Applicable Supervisor, and which, for the avoidance of doubt, shall initially mean the Bermuda Group Rules until such time when the BMA ceases to be the Applicable Supervisor.

 

“Arrears of Interest” has the meaning specified under Section 2.03(a).

 

“Assets” means the Issuer’s total assets as of the date of the latest published audited financial statements of the Issuer as would appear on an unconsolidated balance sheet of the Issuer prepared in accordance with GAAP (as defined in Section 4.06(b)) (including, but for the avoidance of doubt, shares or other investments in subsidiaries howsoever termed under GAAP), but adjusted for subsequent events in such manner as the person or persons giving the Officer’s Certificate as to the Solvency of the Issuer contemplated by the definition of “Insolvency Event” or, if the Issuer is in a winding-up, its liquidator may determine.

 

“Authorized Signatory” means, with respect to any Person, any person that the board of directors of such Person shall designate for purposes of fulfilling the role of officer under this Indenture.

 

“Bankruptcy Law” means Title 11, United States Bankruptcy Code of 1978, as now and hereafter in effect, or any successor statute, or the laws of any other jurisdiction or any political subdivision thereof relating to bankruptcy, insolvency, receivership, winding up, liquidation, reorganization or relief of debtors, or any similar foreign law (including, without limitation the United Kingdom) relating to bankruptcy, insolvency, receivership, winding up, liquidation, reorganization or relief of debtors or any amendments to, succession to or change in any such law.

 

“Bermuda Group Rules” means the Bermuda Group Solvency Standards, together with the Bermuda Group Supervision Rules, as those rules and regulations may be amended or replaced from time to time.

 

“Bermuda Group Solvency Standards” means the Bermuda Insurance (Prudential Standards) (Insurance Group Solvency Requirement) Rules 2011, as those rules and regulations may be amended or replaced from time to time.

 

“Bermuda Group Supervision Rules” means the Bermuda Insurance (Group Supervision) Rules 2011, as those rules and regulations may be amended or replaced from time to time.

 

3

 

“Blockage Period” has the meaning specified under Section 10.02.

 

“BMA” means the Bermuda Monetary Authority (or any successor regulatory authority).

 

“Board of Directors” when used with reference to the Issuer means either the board of directors of the Issuer or any duly authorized committee of such board duly authorized to act hereunder.

 

“Board Resolution” means a copy of a resolution, certified by the secretary or an assistant secretary of the Issuer to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, delivered to the Trustee.

 

“Book-Entry Interest” means a beneficial interest in a Global Note held by or through a Participant.

 

“Business Day” means each Monday, Tuesday, Wednesday, Thursday or Friday (i) that is not a day on which banking institutions in New York, Stockholm or London are authorized or obligated by law, regulation or executive order to close and (ii) on which the Trans-European Automated Realtime Gross Settlement Express Transfer system, or the TARGET2 system, or any successor thereto, operates.

 

“Calculation Agent” means The Bank of New York Mellon acting through its London Branch.

 

“Capital Contribution Securities” means any subordinated and undated debt instruments of the Issuer which are recognized as “Tier 1 Capital” of the Issuer or the Regulatory Group (whether on a solo, group or consolidated basis) by the Applicable Supervisor under the Applicable Supervisory Rules (or, if the Applicable Supervisory Rules are amended so as to no longer refer to Tier 1 Capital in this respect, the nearest corresponding concept).

 

“Clearstream” means Clearstream Banking, société anonyme (or any successor securities clearing agency).

 

“Code” shall mean the US internal Revenue Code of 1986, as amended.

 

“Company Request” or “Company Order” means a written request or order signed in the name of the Issuer by any two Officers and delivered to the Trustee.

 

“Compulsory Interest Payment Date” means each Interest Payment Date other than during a Mandatory Deferral Period during the six months immediately prior to which:

 

(i)                                     a declaration or payment of any distribution or dividend or other payment (including payment in relation to redemption or repurchase) on or in respect of any Junior Obligations or Parity Obligations has been made by the Issuer or any other Person; or

 

(ii)                                  the Issuer, directly or indirectly, redeemed, repurchased or acquired any Junior Obligations or Parity Obligations (with the exception of any repurchases in

 

4

 

connection with stock options or ownership programs for management or employees that are made in the normal course of business),

 

provided that, it shall not be a Compulsory Interest Payment Date solely by virtue of any payment on any Parity Obligations the terms of which do not allow the issuer of the relevant securities to defer, pass on or eliminate the relevant payment.

 

“Conditions to Redemption” has the meaning specified under Section 3.05.

 

“continuing” means, with respect to an Issuer Winding-Up Event, that the Issuer Winding-Up Order has not been rescinded.

 

“Default Notice” has the meaning specified under Section 10.02.

 

“Definitive Registered Note” means a certificated Subordinated Note registered in the name of the Holder thereof and issued in accordance with Section 2.01(d), substantially in the form of Exhibit A hereto except that such Subordinated Note shall not bear the Global Note Legend and shall not have the “Schedule of Increases and Decreases in Global Note” attached thereto.

 

“Depositary” has the meaning specified under Section 2.01(c).

 

“ECR” means the enhanced capital and surplus requirement applicable to the Regulatory Group and as defined in the Insurance Act (or any successor or equivalent solvency capital requirement applicable to the Regulatory Group under the Bermuda Group Rules).

 

“Euroclear” shall mean Euroclear Bank S.A./N.V. (or any successor securities clearing agency), as operator of the Euroclear system.

 

“FATCA Withholding Tax” shall mean any withholding or deduction pursuant to an agreement described in Section 1471(b) of the Code or otherwise imposed pursuant to Sections 1471 through 1474 of the Code (or any regulations or agreements thereunder or official interpretations thereof) or any intergovernmental agreement between the United States and another jurisdiction facilitating the implementation thereof (or any law implementing such an intergovernmental agreement).

 

“Final Maturity Date” with respect to the Subordinated Notes means:

 

(i)                                     if, on the applicable Scheduled Maturity Date, the applicable Conditions to Redemption are satisfied and would continue to be satisfied if such final redemption payment were made or no such Conditions to Redemption apply, the applicable Scheduled Maturity Date; or

 

(ii)                                  otherwise, following the applicable Scheduled Maturity Date, on the earlier of (a) the date falling 10 Business Days after the applicable Conditions to Redemption are satisfied and would continue to be satisfied if the final redemption payment were made (so long as such conditions continue to be so satisfied on such 10th Business Day) and (b) any Issuer Winding-Up Order.

 

5

 

“GAAP” has the meaning specified under Section 4.06(b).

 

“Global Note” means the global note certificate which will represent the Subordinated Notes.

 

“Global Note Legend” means the legend set forth in Section 2.09(f), which is required to be placed on all Global Notes issued under this Indenture.

 

“guarantee” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise).

 

“Holder” means a Person in whose name a Subordinated Note is registered.

 

“IFRS” has the meaning specified under Section 4.06(b).

 

“IFRS Election” has the meaning specified under Section 4.06(b).

 

“Indirect Participant” means a Person who holds a Book-Entry Interest in a Global Note through a Participant.

 

“Initial Notes” means the SEK 2,750,000,000 aggregate principal amount of Subordinated Notes issued under this Indenture on the Issue Date.

 

“Insolvency Event” means, with respect to the Subordinated Notes, if, as of the Relevant Date, the Issuer, as applicable, is not, or after making an applicable payment on the Subordinated Notes would not be, Solvent. For this purpose, the Issuer will be “Solvent” if (i) it is able to pay its debts to all its creditors (other than those whose claims rank, or are expressed to rank, junior to, the claims of the Holders of the Subordinated Notes) as they fall due and (ii) its Assets exceed its Liabilities (or exceed its Liabilities by any minimum margin or percentage in respect of solvency required under Applicable Supervisory Regulations). An Officer’s Certificate relating to the Subordinated Notes as to the Solvency of the Issuer shall, in the absence of manifest error, be treated and accepted by the Trustee, the Holders of the Subordinated Notes and all other interested parties as correct and sufficient evidence thereof, shall be final and binding on such parties, and the Trustee shall be entitled to rely on such Officer’s Certificate with respect to the Subordinated Notes without any liability to any Person.

 

“Insolvent Insurer Winding-Up” means, if the Applicable Supervisory Regulations are Solvency II: the winding-up of any regulated insurance or reinsurance company in the Regulatory Group; or the appointment of an administrator of any regulated insurance or reinsurance company in the Regulatory Group, in each case where the Issuer has determined, acting reasonably, that all Policyholder Claims of the policyholders of that regulated insurance or reinsurance company may or will not be met.

 

6

 

“Interest Determination Date” means, with respect to any Interest Period, the second Business Day prior to the relevant Interest Period.

 

“Interest Payment Date” means March 22, June 22, September 22 and December 22 of each year from December 22, 2017, to (and including) the Final Maturity Date, provided that if any Interest Payment Date would otherwise fall on a day that is not a Business Day, it shall be postponed to the next succeeding Business Day unless the next succeeding Business Day is in the next succeeding calendar month, in which case such Interest Payment Date shall be the immediately preceding Business Day.

 

“Interest Payment Record Date” means with respect to any Interest Payment Date, the date that is 15 days prior to such Interest Payment Date.

 

“Interest Period” means the period from (and including) the Issue Date to (but excluding) the first Interest Payment Date and each period thereafter from (and including) each Interest Payment Date to (but excluding) the next following Interest Payment Date.

 

“Interest Rate” means the sum of (i) the Applicable STIBOR Rate for the relevant Interest Period, plus (ii) the applicable Margin.

 

“Irish Stock Exchange” means Irish Stock Exchange plc.

 

“Issue Date” means September 22, 2017.

 

“Issuer Winding-Up Event” with respect to the Subordinated Notes will occur only upon the occurrence of an Issuer Winding-Up Order.

 

“Issuer Winding-Up Order” will occur if:

 

(i)                                     at any time an order is made, or an effective resolution is passed, for the winding-up of the Issuer (except, in any such case, a solvent winding-up solely for the purpose of a reconstruction, merger or amalgamation or the substitution in place of the Issuer of a successor in business of the Issuer, the terms of which reconstruction, merger amalgamation or substitution (A) have previously been approved in writing by the Trustee or by Holders of a majority in aggregate principal amount of the outstanding Subordinated Notes and (B) do not provide that the Subordinated Notes or any amount in respect thereof shall thereby become payable); or

 

(ii)                                  an administrator of the Issuer is appointed and such administrator gives notice that it intends to declare and distribute a dividend.

 

“Judgment Currency” has the meaning specified under Section 12.14.

 

“Junior Obligations” means:

 

(i)                                     all classes of share capital, preference share capital and Capital Contribution Securities of the Issuer; and

 

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(ii)                                  subordinated obligations of the Issuer ranking or expressed to rank junior to the Subordinated Notes.

 

“Liabilities” means the Issuer’s total liabilities as of the date of the latest published audited financial statements of the Issuer as would appear on an unconsolidated balance sheet of the Issuer prepared in accordance with GAAP (as defined in Section 4.06(b), but adjusted for subsequent events in such manner as the person or persons giving the Officer’s Certificate as to the Solvency of the Issuer contemplated by the definition of “Insolvency Event” or, if the Issuer is in a winding-up, its liquidator may determine.

 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

 

“Main Securities Market” means the main securities market of the Irish Stock Exchange.

 

“Mandatory Deferral Event” shall occur upon the occurrence of a Solvency Capital Event or an Insolvency Event, or any other event the occurrence of which would require the Issuer to defer payment of interest on the Subordinated Notes under Applicable Supervisory Regulations on the basis that the Subordinated Notes are intended to qualify as Tier 2 Capital (including, for the avoidance of doubt, if the Applicable Supervisory Regulations are Solvency II, the Issuer or the Regulatory Group, as applicable, not meeting the Solvency II Minimum Capital Requirement) unless otherwise permitted by the Applicable Supervisor. (For the avoidance of doubt, it shall not be a Mandatory Deferral Event if, in view of other facts and circumstances then subsisting, the payment of interest need not be deferred under Applicable Supervisory Regulations in order that the Subordinated Notes qualify as Tier 2 Capital, including, if the Applicable Supervisory Regulations are Solvency II, in circumstances where: (i) the Applicable Supervisor has exceptionally waived the deferral of interest payments, (ii) such interest payments do not further weaken the solvency position of the Issuer and (iii) the Solvency II Minimum Capital Requirement is complied with immediately after such interest payments are made.)

 

“Mandatory Deferral Period” has the meaning specified under Section 2.02(d).

 

“Margin” means for the Subordinated Notes (x) 4.00 per cent. per annum for each Interest Period to (but excluding) September 22, 2027; and (y) 4.25 per cent. per annum thereafter (from and including September 22, 2027).

 

“Notes Documents” means the Subordinated Notes and this Indenture.

 

“Officer” means the chairman of the Board of Directors, the vice chairman of the Board of Directors, the president, any vice president, the treasurer, any assistant treasurer, the controller, the secretary, any assistant controller, any assistant secretary, the principal executive officer, the principal financial officer, the principal accounting officer or the chief operating officer of the Issuer.

 

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“Officer’s Certificate” means a certificate signed on behalf of the Issuer by one Officer of the Issuer that meets the requirements of Section 12.03 and delivered to the Trustee.

 

“Official List” means the official list of the Irish Stock Exchange.

 

“Opinion of Counsel” means a written opinion from legal counsel who may (except as otherwise provided herein) be counsel to the Issuer and who shall be reasonably satisfactory to the Trustee. The opinion must contain the statements required by Section 12.03.

 

“Optional Deferral Period” has the meaning specified under Section 2.02(c).

 

“Parity Obligations” means subordinated obligations of the Issuer which constitute, or would but for any applicable limitation on the amount of such capital, constitute Tier 2 Capital and any other obligations ranking or expressed to rank pari passu with the Subordinated Notes.

 

“Participant” means, with respect to the Depositary, a Person who has an account with the Depositary.

 

“Person” means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, limited liability company or government or other entity.

 

“Policyholder Claims” means claims of policyholders or beneficiaries under policies of insurance (including policies issued by the Issuer (if any)) in a winding-up, liquidation or administration of the Regulatory Group to the extent that those claims relate to any amounts to which the Regulatory Group is, or may become, liable to a policyholder pursuant to a contract of insurance, including all amounts to which policyholders are entitled under applicable legislation or rules relating to the winding-up or administration of insurance companies to reflect any right to receive, or expectation of receiving, benefits which such policyholders may have.

 

“Prospectus” means the prospectus dated September 19, 2017, relating to the listing of the Subordinated Notes.

 

“Qualifying Equivalent Securities” has the meaning specified under Section 3.04(d).

 

“Rating Methodology Event” will occur with respect to the Subordinated Notes, if, as a consequence of a change in, or clarification to, the rating methodology (or the interpretation thereof) of Standard & Poor’s Rating Services or Fitch Ratings Inc. or any respective successor, which change or clarification becomes effective on or after the Issue Date, the capital treatment of the Subordinated Notes for the Issuer or its subsidiaries or the Regulatory Group is amended in a way that is reasonably determined by the Issuer to be materially unfavorable to the Issuer or its subsidiaries or the Regulatory Group.

 

“Redemption Price” when used with respect to the Subordinated Notes to be redeemed, means the price at which such Subordinated Notes are to be redeemed pursuant to this Indenture.

 

“Regulation S” means Regulation S promulgated under the U.S. Securities Act.

 

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“Regulation S Legend” means the legend set forth in Section 2.09(f) to be placed on all Subordinated Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture.

 

“Regulatory Event” will occur with respect to the Subordinated Notes, if, as a consequence of a change in, or clarification to, the Applicable Supervisory Regulations by the Applicable Supervisor, the Subordinated Notes (in whole or in part) will not or will no longer qualify as Tier 2 Capital, as reasonably determined by the Issuer.

 

“Regulatory Group” means all subsidiaries of the Issuer from time to time that are regulated insurance or reinsurance companies (or part of such regulatory group) pursuant to the Applicable Supervisory Regulations, and such other entities (including, if applicable, the Issuer and any direct or indirect parent company of the Issuer) that may be construed as part of such regulatory group by the Applicable Supervisor under the Applicable Supervisory Regulations, taken as a whole (and, for the avoidance of doubt, shall initially be construed as including the Issuer and Sirius International Insurance Group, Ltd.).

 

“Relevant Date” means, in respect of any payment of Additional Amounts, the date on which such payment first becomes due and payable, but if the full amount of the moneys payable has not been received by the Paying Agent on or prior to such due date, it means the first date on which, the full amount of such moneys having been so received and being available for payment to Holders of the Subordinated Notes, notice to that effect shall have been duly given to the Holders of the Subordinated Notes.

 

“Responsible Officer” when used with respect to the Trustee, means any officer assigned to the Corporate Trust Division — Corporate Finance Unit (or any successor division or unit) of the Trustee located at the Trust Office of the Trustee, who shall have direct responsibility for the administration of this Indenture, and for the purposes of Section 6.03 and Section 7.01(c)(2) shall also include any other officer of the Trustee to whom any corporate trust matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

 

“SEC” means the Securities and Exchange Commission.

 

“Senior Creditors” means any creditors of the Issuer who are unsubordinated creditors of the Issuer and preferred claimants of the Regulatory Group (including all Policyholder Claims), as well as any other creditors to whose claims the Subordinated Notes must be subordinated under Applicable Supervisory Regulations so as to permit the Subordinated Notes to qualify as Tier 2 Capital.

 

“Senior Indebtedness” means, with respect to the Issuer,

 

(i)                                     the principal (including redemption payments), premium, if any, interest and other payment obligations in respect of (A) the Issuer’s indebtedness for money borrowed and (B) the Issuer’s indebtedness evidenced by securities, debentures, bonds, notes or other similar instruments issued by the Issuer, including any such securities issued under any deed, indenture or other instrument to which the Issuer is a party (including, for the avoidance of doubt, deeds, indentures or other instruments pursuant to which senior debt securities have been or may be issued);

 

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(ii)                                  all of the Issuer’s capital lease obligations;

 

(iii)                               all of the Issuer’s obligations issued or assumed as the deferred purchase price of property, all of the Issuer’s conditional sale obligations, all of the Issuer’s hedging agreements and agreements of a similar nature thereto and all of the Issuer’s agreements relating to any such agreements, and all obligations of the Issuer under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business);

 

(iv)                              all of the Issuer’s obligations for reimbursement on any letter of credit, banker’s acceptance, security purchase facility or similar credit transaction;

 

(v)                                 all obligations of the type referred to in clauses (i) through (iv) above of other Persons for the payment of which the Issuer is responsible or liable as obligor, guarantor or otherwise;

 

(vi)                              all obligations of the type referred to in clauses (i) through (v) above of other Persons secured by any Lien on any of the Issuer’s property or asset (whether or not such obligation is assumed by the Issuer); and

 

(vii)                           any deferrals, amendments, renewals, extensions, modifications and refundings of all obligations of the type referred to in clauses (i) through (vi) above, in each case whether or not contingent and whether outstanding at the date hereof or thereafter incurred;

 

except, in each case, for the Subordinated Notes and any such other indebtedness or deferral, amendment, renewal, extension, modification or refunding that contains express terms, or is issued under a deed, indenture or other instrument that contains express terms, providing that it is subordinate to or ranks equal with the Subordinated Notes.

 

Such Senior Indebtedness shall continue to be Senior Indebtedness and be entitled to the benefits of the subordination provisions of this Indenture irrespective of any amendment, modification or waiver of any term of such Senior Indebtedness and notwithstanding that no express written subordination agreement may have been entered into between the holders of such Senior Indebtedness and the Trustee or any of the Holders.

 

“Solvency Capital Event” means the Issuer or the Regulatory Group, as applicable, not meeting the Solvency Capital Requirement.

 

“Solvency Capital Requirement” means: if the Applicable Supervisory Regulations are the Bermuda Group Rules, the ECR; if the Applicable Supervisory Regulations are Solvency II, the Solvency Capital Requirement of the Issuer or the Solvency Capital Requirement of the Regulatory Group referred to in Solvency II; or any other requirement to maintain assets applicable to the Issuer or in respect of the Regulatory Group, as applicable, pursuant to the Applicable Supervisory Regulations.

 

“Solvency II” means the Solvency II Directive and any implementing measures adopted pursuant to the Solvency II Directive including, without limitation, the Solvency II Regulation (for

 

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the avoidance of doubt, whether implemented by way of regulation or by further directives or otherwise).

 

“Solvency II Directive” means Directive 2009/138/EC of the European Union (as amended) on the taking-up and pursuit of the business of insurance and reinsurance (Solvency II) and transposed by member states of the European Economic Area pursuant to Article 309 of Directive 2009/138/EC.

 

“Solvency II Minimum Capital Requirement” means, if the Applicable Supervisory Regulations are Solvency II (or the Applicable Supervisory Regulations otherwise establish a minimum capital requirement that differs from the Solvency Capital Requirement), the Minimum Capital Requirement of the Issuer, the Minimum Capital Requirement of the Insurer Group or the group Minimum Solvency Capital Requirement referred to in, or any other minimum capital requirement howsoever described in, Solvency II (or, as applicable, in such other Applicable Supervisory Regulations).

 

“Solvency II Regulation” means Commission Delegated Regulation (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II);

 

“Specified Event” means, with respect to the Subordinated Notes, the occurrence of any of an Additional Amounts Event, a Tax Event, a Rating Methodology Event or a Regulatory Event.

 

“Specified Event Redemption” has the meaning specified under Section 3.03.

 

“Stated Maturity” means, with respect to any installment of principal on the Subordinated Notes, the date on which the payment of principal was scheduled to be paid in the Notes Documents as of the Issue Date or as of the date of incurrence thereof, and will not include any contingent obligations to repay, redeem or repurchase any such principal prior to the date originally scheduled for the payment thereof.

 

“Subordinated Notes” has the meaning given to it in the preamble to this Indenture. The Initial Notes and the Additional Notes shall be treated as a single class for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase, except as otherwise provided in this Indenture, and unless the context otherwise requires, all references to the Subordinated Notes shall include the Initial Notes and any Additional Notes.

 

“Subsidiary” means, in respect of any Person, any corporation, limited or general partnership or other business entity of which at the time of determination more than 50% of the voting power of the shares of its capital stock or other interests (including partnership and limited liability company interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is owned or controlled, directly or indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such Person.

 

“Swedish Government Obligations” means any security that is a direct obligation of, or obligation guaranteed by, the Kingdom of Sweden, and the payment for which the Kingdom of Sweden pledges its full faith and credit.

 

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“Tax” means any tax, duty, levy, impost, assessment or other governmental charge (including penalties and interest related thereto and any other additions thereto, and, for the avoidance of doubt, including any withholding or deduction for or on account of Tax (and “Taxes” and “Taxation” shall be construed to have corresponding meanings)).

 

“Tax Event” will occur with respect to the Subordinated Notes if an opinion of a recognized independent tax counsel has been delivered to the Trustee stating that, as a result of any change in or amendment to the laws (or any rules or regulations thereunder) of any Taxing Jurisdiction, or as a result of any change in or amendment to an official interpretation or application of any such laws, rules or regulations by any legislative body, court, governmental agency or regulatory authority (including the enactment of any legislation and the publication of any judicial decisions or regulatory determination), which change or amendment becomes effective on or after the Issue Date of the Subordinated Notes, interest payable by the Issuer in respect of the Subordinated Notes is no longer, or within 90 days of the date of the opinion will no longer be, fully deductible by the Issuer for income tax purposes in the applicable jurisdiction (to the extent that such interest was so deductible as of the time of such Tax Event), and that non-deductibility cannot be avoided by the Issuer, as applicable, taking such reasonable measures it (acting in good faith) deems appropriate.

 

“Taxing Jurisdiction” means Bermuda, or any political subdivision thereof, or any authority or agency therein having the power to tax, or any other jurisdiction from or through which the Issuer makes a payment on the Subordinated Notes or in which the Issuer generally becomes subject to taxation, or any jurisdiction in which a successor of the Issuer is incorporated.

 

“Tier 2 Capital” means (i) if the Applicable Supervisory Regulations are the Bermuda Group Rules, “Tier 2 Ancillary Capital” as set out in the Bermuda Group Supervision Rules of the Issuer or the Regulatory Group (whether on a solo, group or consolidated basis) (or, if the Bermuda Group Supervision Rules are amended so as to no longer refer to Tier 2 Ancillary Capital in this respect, the nearest corresponding concept (if any) under the Bermuda Group Supervision Rules, as amended); (ii) if the Applicable Supervisory Regulations are Solvency II, capital which is treated as “Tier 2 Capital” of the Issuer or the Regulatory Group (whether on a solo, group or consolidated basis) by the Applicable Supervisor under Solvency II; and otherwise, capital which is treated as the nearest corresponding concept to “Tier 2 Ancillary Capital” under the Bermuda Group Supervision Rules and “Tier 2 Capital” under Solvency II of the Issuer or the Regulatory Group (whether on a solo, group or consolidated basis) by the Applicable Supervisor under the Applicable Supervisory Regulations.

 

“Trustee” means The Bank of New York Mellon in its capacity as trustee under this Indenture until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

 

“Trust Office of the Trustee” means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which office at the date of the execution of this Indenture is the address specified in Section 12.01 or such other address as to which the Trustee may designate from time to time by notice to the Issuer, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Issuer).

 

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“U.S. Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

 

“U.S. GAAP” has the meaning specified under Section 4.06(b).

 

“U.S. Securities Act” means the U.S. Securities Act of 1933, as amended.

 

Section 1.02.  Rules of Construction.

 

Unless the context otherwise requires:

 

(1)                                 a term has the meaning assigned to it;

 

(2)                                 an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(3)                                 “or” is not exclusive;

 

(4)                                 words in the singular include the plural, and in the plural include the singular;

 

(5)                                 “will” shall be interpreted to express a command;

 

(6)                                 provisions apply to successive events and transactions;

 

(7)                                 references to sections of or rules under applicable laws or regulations will be deemed to include substitute, replacement of successor sections or rules as may be adopted from time to time;

 

(8)                                 unless the context otherwise requires, any reference to an “Article,” a “Section” or an “Exhibit” refers to an Article, a Section or an Exhibit, as the case may be, of this Indenture;

 

(9)                                 the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision;

 

(10)                          words importing any gender include all genders;

 

(11)                          references to “writing” include printing, typing, lithography and other means of reproducing words in a visible form; and

 

(12)                          the words “including,” “includes” and “include” shall be deemed to be followed by the words “without limitation.”

 

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ARTICLE 2
 THE SUBORDINATED NOTES

 

Section 2.01.  Form and Dating.

 

(a)           General.  The Subordinated Notes and the Trustee’s certificate of authentication will be substantially in the form of Exhibit A hereto. The Subordinated Notes may have notations, legends or endorsements required by law, stock exchange rule or usage and as provided herein. The Issuer shall approve the form of the Subordinated Notes and any notation, legend or endorsement thereon. Each Subordinated Note will be dated the date of its authentication. The terms and provisions contained in the Subordinated Notes will constitute, and are hereby expressly made, a part of this Indenture, and the Issuer and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision in the Subordinated Notes conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

 

(b)           Global Notes.  Subordinated Notes issued in global form will be substantially in the form of Exhibit A hereto (including the Global Note Legend thereon and the “Schedule of Increases and Decreases in Global Note” attached thereto). Each Global Note will represent such of the outstanding Subordinated Notes as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Subordinated Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Subordinated Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions and purchases and cancellations. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Subordinated Notes represented thereby will be made by the Trustee, the Depositary or the Paying Agent, in accordance with instructions given by the Holder thereof as required by Section 2.09.

 

(c)           The Subordinated Notes, on original issuance, shall be issued in the form of one or more fully registered Global Notes and deposited with The Bank of New York Mellon, London Branch, as common depository for of Clearstream and Euroclear (the “Depositary”). The Global Notes will be registered in the name of the Depositary or its nominee until a successor Depositary, if any, becomes the Depositary pursuant to this Indenture and thereafter Depositary shall mean or include each Person who is then a Depositary hereunder. The interest in the Global Notes held through the Depositary shall be delivered by the Trustee to the Depositary or a custodian appointed by the Depositary and the Depositary shall credit the accounts of Euroclear and Clearstream.

 

(d)           If (1) the Depositary or any successor to the Depositary is at any time unwilling or unable to continue as a Depositary and a successor depositary is not appointed by the Issuer within 90 days, or (2) either Euroclear or Clearstream, or a successor clearing system is closed for business for a continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or announces an intention to permanently cease business or does in fact do so, the Issuer will issue individual definitive notes in registered form in exchange for the Global Notes. Upon receipt of such notice from the Depositary or a Holder, as the case may be, the Issuer will use its best efforts to make arrangements with the Depositary for the exchange of interests in the Global Notes for individual Definitive Registered Notes and cause the requested individual Definitive Registered Notes to be executed and delivered to the Registrar in sufficient quantities and

 

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authenticated by or on behalf of the Registrar for delivery to Holders. Persons exchanging interests in a Global Note for individual Definitive Registered Notes will be required to provide the Registrar, through the relevant clearing system, with written instruction and other information required by the Issuer and the Registrar to complete, execute and deliver such individual Definitive Registered Notes. In all cases, individual Definitive Registered Notes delivered in exchange for any Global Note or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by the relevant clearing system. Individual Definitive Registered Notes will not be eligible for clearing and settlement through Euroclear or Clearstream.

 

(e)           Book-Entry Provisions.  The Applicable Procedures shall be applicable to Book-Entry Interests in the Global Note that are held by Participants through the Depositary, Euroclear or Clearstream.

 

(f)            Denomination.  The Subordinated Notes initially will be limited to SEK 2,750,000,000 aggregate principal amount. The Subordinated Notes will be issued in fully registered form, without coupons, in minimum denominations of SEK 2,000,000 and integral multiples of SEK 1,000,000 in excess thereof.

 

Section 2.02.  Payment of Interest.

 

(a)           The Subordinated Notes will bear interest from (and including) the Issue Date to, but excluding, the Final Maturity Date or earlier redemption of the Subordinated Notes as provided in this Indenture, as the case may be, at the Interest Rate, payable quarterly in arrears on each Interest Payment Date to the Persons in whose name the Subordinated Notes were registered at the close of business on the applicable Interest Payment Record Date, subject to deferral in accordance with Section 2.02(c) and Section 2.02(d). On the Final Maturity Date or earlier date of redemption, the Issuer will pay accrued and unpaid interest from the most recent date to which interest has been paid or provided for. If the Final Maturity Date falls on a day that is not a Business Day, the payment of interest and principal will be made on the next succeeding Business Day, and no interest will accrue for the period from and after the Final Maturity Date.

 

(b)           Principal and interest will be payable, and the Subordinated Notes will be transferable or exchangeable, at the office or offices or agency maintained by the Issuer for this purpose. All payment obligations under the Subordinated Notes will be payable in Swedish krona.

 

(c)           So long as no Mandatory Deferral Event has occurred and is continuing and the relevant Interest Payment Date is not a Compulsory Interest Payment Date, the Issuer may defer interest payments on the Subordinated Notes, from time to time, for one or more periods (each, an “Optional Deferral Period”). Any such accrued interest, the payment of which is so deferred, so long as such interest remains unpaid, will constitute Arrears of Interest on the Subordinated Notes and will be subject to Section 2.03. Prior to an Optional Deferral Period, the Issuer will be required to provide to the Trustee an Officer’s Certificate identifying the beginning of the Optional Deferral Period and shall notify the Holders of the Subordinated Notes at least five Business Days before the first Interest Payment Date during the Optional Deferral Period. The Issuer may pay at any time all or any portion of the interest accrued to that point during an Optional Deferral Period and upon payment by the Issuer in full of all interest accrued during an Optional Deferral Period, the

 

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Optional Deferral Period shall be deemed to terminate. Any Optional Deferral Period shall also be deemed terminated on any Interest Payment Date that is a Compulsory Interest Payment Date.

 

(d)           If, as of any Interest Payment Date, a Mandatory Deferral Event has occurred and is continuing or would occur if payment of interest accrued on the Subordinated Notes were made on such Interest Payment Date, the Issuer shall be required to defer payment of all (and not less than all) of the interest accrued on the Subordinated Notes as of such Interest Payment Date (a “Mandatory Deferral Period”). Any such accrued interest, the payment of which is so deferred, so long as such interest remains unpaid, will constitute Arrears of Interest on the Subordinated Notes and will be subject to Section 2.03. Prior to a Mandatory Deferral Period, the Issuer shall provide to the Trustee an Officer’s Certificate identifying the beginning of the Mandatory Deferral Period and shall notify the Holders of the Subordinated Notes at least five Business Days before the first Interest Payment Date during the Mandatory Deferral Period unless the Mandatory Deferral Event occurs within such five Business Day period, in which case the Issuer shall so notify the Holders promptly following the occurrence of such Mandatory Deferral Event.

 

(e)           Notwithstanding any other provision in the Subordinated Notes or this Indenture, the deferral of any payment of interest on the Subordinated Notes on any Interest Payment Date in accordance with this section will not constitute an Issuer Winding-Up Event under this Indenture or the Subordinated Notes and will not give Holders of the Subordinated Notes or the Trustee any right to accelerate repayment of the Subordinated Notes.

 

(f)            Interest on the Subordinated Notes will be calculable on the basis of a day count fraction equal to the actual number of days elapsed in the relevant Interest Period divided by 360.

 

(g)           The amount of interest for each day that the Subordinated Notes are outstanding (the “Daily Interest Amount”) will be calculated by dividing the Interest Rate in effect for such day by 360 and multiplying the result by the principal amount of the Subordinated Notes. The amount of interest to be paid on the Subordinated Notes for any Interest Period will be calculated by adding the Daily Interest Amounts for each day in such Interest Period.

 

(h)           The Interest Rate and amount of interest to be paid on the Subordinated Notes for each Interest Period will be determined by the Calculation Agent. The Calculation Agent will, upon the request of any Holder of the Subordinated Notes, provide the interest rate then in effect during any Interest Period with respect to the Subordinated Notes, and shall notify the Issuer of the Interest Rate for each such Interest Period on the relevant Interest Determination Date. All calculations made by the Calculation Agent shall in the absence of manifest error be conclusive for all purposes and binding on the Issuer and the Holders of the Subordinated Notes. So long as the Applicable STIBOR Rate is required to be determined with respect to the Subordinated Notes, there will at all times be a Calculation Agent. In the event that any then acting Calculation Agent shall be unable or unwilling to act, or that such Calculation Agent shall fail to duly establish the Applicable STIBOR Rate for any Interest Period, or that the Issuer proposes to remove such Calculation Agent, the Issuer shall appoint itself or another Person which is a bank, trust company, investment banking firm or other financial institution to act as the Calculation Agent.

 

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Section 2.03.  Arrears of Interest.

 

(a)           Any interest in respect of the Subordinated Notes not paid on an Interest Payment Date, together with any interest in respect of the Subordinated Notes not paid on an earlier Interest Payment Date will, so long as the same remains unpaid, constitute “Arrears of Interest” in respect of the Subordinated Notes. Arrears of Interest shall not themselves bear interest. Arrears of Interest on the Subordinated Notes will remain payable for so long as it remains unpaid. Any reference in this Indenture or the Subordinated Notes to principal, premium or interest in respect of the Subordinated Notes, any redemption amount and any other amounts in the nature of principal shall be deemed also to refer to any Arrears of Interest applicable to the Subordinated Notes that may be payable under this Indenture, and the express mention of the payment of Arrears of Interest applicable to the Subordinated Notes (if applicable) in any provision hereof shall not be construed as excluding Arrears of Interest applicable to the Subordinated Notes in those provisions hereof where such express mention is not made.

 

(b)           So long as no Mandatory Deferral Event has occurred and is continuing (or unless otherwise permitted by the Applicable Supervisor), at the Issuer’s option, Arrears of Interest on the Subordinated Notes may be paid in whole or in part to the Persons in whose names the Subordinated Notes are registered as of the close of business on the 15th calendar day (whether or not such date is a Business Day) immediately preceding the date on which payment of such Arrears of Interest is to be made, at any time upon the expiration of not more than 15 nor less than five Business Days’ written notice to the Trustee, the Paying Agent and the Holders of the Subordinated Notes to such effect (which written notice shall specify the amount of such Arrears of Interest).

 

(c)           If not previously paid, Arrears of Interest with respect to the Subordinated Notes shall become due and payable, and shall be paid in whole (and not in part), on the earliest of:

 

(1)           so long as no Mandatory Deferral Event has occurred and is continuing, the next Interest Payment Date for the Subordinated Notes that does not occur during an Optional Deferral Period or that is a Compulsory Interest Payment Date; or

 

(2)           the redemption date of the Subordinated Notes in accordance with Article 3; or

 

(3)           the date on which an Issuer Winding-Up Order occurs; or

 

(4)           the Final Maturity Date for the Subordinated Notes;

 

provided, that in the event of there being Arrears of Interest on the Final Maturity Date, such Arrears of Interest shall be paid before any repayment of principal.

 

Section 2.04.  Initial Amount of Subordinated Notes.

 

(a)           The Subordinated Notes will initially be issued in the aggregate principal amount of SEK 2,750,000,000. The Subordinated Notes, may upon execution of this Indenture, be executed by the Issuer and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Subordinated Notes in accordance with a Company Order.

 

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(b)           The Issuer may issue from time to time, without giving notice to or seeking the consent of the Holders of the Subordinated Notes, issue additional notes (“Additional Notes”) having the same ranking and the same interest rate, maturity and other terms as the Subordinated Notes (except for the initial public offering price, first Interest Payment Date (if applicable) and the Issue Date). Any such Additional Notes having such similar terms, together with the Subordinated Notes, will constitute a single class for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase with the Initial Notes; provided that if such Additional Notes are not (i) issued pursuant to a “qualified reopening” of the original series, (ii) treated as part of the same “issue” of debt instruments as the original series or (iii) issued with no more than a de minimis amount of original discount, in each case for U.S. federal income tax purposes, such Additional Notes will have a separate ISIN number or other identifier.

 

(c)           Whenever it is proposed to create and issue any Additional Notes, the Issuer shall give to the Trustee not less than five Business Days’ notice in writing of its intention so to do stating the amount of Additional Notes (including a range of amounts if the transaction has not yet priced) proposed to be created and issued.

 

Section 2.05.  No Sinking Fund.

 

The Subordinated Notes do not have the benefit of any mandatory redemption or sinking fund obligation and are not redeemable at the option of the Holders.

 

Section 2.06.  Execution and Authentication.

 

The Subordinated Notes shall be executed on behalf of the Issuer by any two Officers. The signature of any of these individuals on the Subordinated Notes may be manual, facsimile or electronic (including “.pdf” format).

 

Subordinated Notes bearing the manual, facsimile or electronic (including “.pdf” format) signatures of individuals who were at any time the proper officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Subordinated Notes or did not hold such offices at the date of such Subordinated Notes.

 

A Subordinated Note will not be valid until authenticated by the manual, facsimile or electronic (including “.pdf” format) signature of the Trustee. The signature will be conclusive evidence that the Subordinated Note has been authenticated under this Indenture. Notwithstanding the foregoing, if any Subordinated Note shall have been authenticated and delivered hereunder but never issued and sold by the Issuer, the Issuer shall deliver such Subordinated Note to the Registrar for cancellation pursuant to Section 2.14, and for all purposes of this Indenture such Subordinated Note shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.

 

The Trustee will, upon receipt of a written order of the Issuer signed by an authorized representative (an “Authentication Order”), authenticate Subordinated Notes for original issue that may be validly issued under this Indenture, including any Additional Notes as provided in Section 2.04.

 

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The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Subordinated Notes (the “Authenticating Agent”). Each such appointment shall be evidenced by an instrument signed by a Responsible Officer, a copy of which shall be furnished to the Issuer. Unless limited by the terms of such appointment, the Authenticating Agent may authenticate Subordinated Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. The Authenticating Agent has the same rights as an Agent to deal with Holders or an Affiliate of the Issuer.

 

Section 2.07.  Registrar, Transfer Agent and Paying Agent.

 

(a)           The Issuer will maintain one or more paying agents (each, a “Paying Agent”) for the Subordinated Notes. The initial Paying Agent will be The Bank of New York Mellon acting through its London Branch (the “Paying Agent”) and The Bank of New York Mellon acting through its London Branch hereby accepts such appointment.

 

(b)           The Issuer will also maintain one or more registrars (each, a “Registrar”) for the registration of the Subordinated Notes and of their transfer or exchange for so long as the Subordinated Notes are listed on the Official List and its rules so require.

 

(c)           The Issuer will maintain a transfer agent (each, a “Transfer Agent”). The Issuer hereby appoints the Trustee as the initial Registrar and the Trustee hereby accepts such appointment. The Issuer hereby appoints the Trustee as the initial Transfer Agent and the Trustee hereby accepts such appointment. Each Transfer Agent shall perform the functions of a transfer

 

(d)           Upon notice to the Trustee, the Issuer may change the Paying Agents, the Registrars or the Transfer Agents without prior notice to the Holders. For so long as the Subordinated Notes are listed on the Official List of the Irish Stock Exchange and admitted to trading on the Main Securities Market and the rules and regulations of the Irish Stock Exchange so require, the Issuer will publish a notice of any change of Paying Agent, Registrar or Transfer Agent in the manner permitted by such rules and regulations, on the official website of the Irish Stock Exchange (www.ise.ie) in accordance with Section 12.01.

 

(e)           None of the Trustee or any Agent shall have any responsibility or obligation to any beneficial owner in a Global Note, a Participant or other Person with respect to the accuracy of the records of the Depositary or its nominee or of any Participant, with respect to any ownership interest in the Subordinated Notes or with respect to the delivery to any Participant, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Subordinated Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Subordinated Notes and this Indenture shall be given or made only to or upon the order of the registered Holders (which shall be the Depositary or its nominee in the case of the Global Note). The rights of beneficial owners in the Global Note shall be exercised only through the Depositary subject to the applicable procedures. The Trustee and each Agent shall be entitled to rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners. The Trustee and each Agent shall be entitled to deal with the Depositary and any nominee thereof, that is the registered holder of any Global Note for all purposes of this Indenture relating to such Global Note (including the

 

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payment of principal, premium, if any, and interest and additional amounts, if any, and the giving of instructions or directions by or to the owner or holder of a beneficial ownership interest in such Subordinated Notes) as the sole holder of such Global Note and shall have no obligations to the beneficial owners thereof. None of the Trustee or any Agent shall have any responsibility or liability for any acts or omissions of the Depositary with respect to such Global Note, for the records of any such depositary, including records in respect of beneficial ownership interests in respect of any such Global Note, for any transactions between the Depositary and any Participant or between or among the Depositary, any such Participant and/or holder or owner of a beneficial interest in such Global Note, or for any transfers of beneficial interests in any such Global Note.

 

Notwithstanding the foregoing, with respect to any Global Note, nothing herein shall prevent the Issuer, the Trustee, any Agent or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by any Depositary (or its nominee), as a Holder with respect to such Global Note or shall impair, as between such Depositary and owners of beneficial interests in such Global Note, the operation of customary practices governing the exercise of the rights of such Depositary (or its nominee) as Holder of such Global Note.

 

(f)            Pursuant to and in accordance with Section 7.02(i), in connection with acting hereunder, the Paying Agent shall be entitled to the rights, privileges, protections, immunities and benefits given to the Trustee in this Indenture and otherwise. For the avoidance of doubt, the provisions of Section 7.05 shall apply to the Paying Agent mutatis mutandis. The following terms and conditions in this Section 2.07(f) shall apply to the Paying Agent in connection with its acting hereunder. In the event of a conflict between the terms and conditions of this Section 2.07(f) and the terms and conditions in the indenture, including the rights, privileges, protections, immunities and benefits given to the Paying Agent by virtue of Section 7.02(i), the provisions of this Section 2.07(f) shall control.

 

In order to provide for all payments due on the Subordinated Notes as the same shall become due, the Issuer shall cause to be paid to the Paying Agent, no later than 10:00 a.m. London time one Business Day prior to the due date for the payment of each Subordinated Note, at such bank as the Paying Agent shall previously have notified to the Issuer, immediately available funds sufficient to meet all payments due on such Subordinated Notes.

 

The Issuer hereby authorizes and directs the Paying Agent, from the amounts paid to it pursuant to this Section 2.07(f), to make or cause to be made all payments on the Subordinated Notes in accordance with the terms thereof. Such payments shall be made to the Holder or Holders of Subordinated Notes in accordance with the terms of the Subordinated Notes, the provisions contained in this Indenture, and the procedures of Euroclear and Clearstream. All interest payments in respect of the Subordinated Notes will be made by the Paying Agent on the relevant interest payment date (as set forth in the Subordinated Note) to the Holders in whose names the Subordinated Notes are registered at the close of business (in New York City) on the record date specified in the Subordinated Notes next preceding the interest payment date or such other date as is provided in the Subordinated Notes. So long as the Subordinated Notes are represented by a single global certificate and registered in the name of the Depositary or another common depository for Euroclear and Clearstream, or a nominee of the Depositary or such other common

 

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depository all interest payments on the Subordinated Notes shall be made by the Paying Agent by wire transfer of immediately available funds in SEK to such Holder.

 

The Paying Agent will pay the principal amount of each Subordinated Note and premium, if any, on the applicable maturity date or upon any redemption date with respect thereto, together with accrued and unpaid interest due at maturity or such redemption date, if any, upon presentation and surrender of such Subordinated Note on or after the maturity date or redemption date thereof to the Paying Agent, or as specified in the Subordinated Notes.

 

If for any reason the amounts received by the Paying Agent are insufficient to satisfy all claims in respect of all payments then due on the Subordinated Notes, the Paying Agent shall forthwith notify the Issuer, and the Paying Agent shall not be obligated to pay any such claims until the Paying Agent has received the full amount of the monies then due and payable in respect of such Subordinated Notes. If, however, the Paying Agent in its sole discretion shall make payment on the Subordinated Notes on their maturity or redemption, or payments of interest or such other payments when otherwise due (it being understood that the Paying Agent shall have no obligation whatsoever to make any such payment) and the amount which should have been received is not received on such date, the Issuer agrees forthwith on demand to pay, or procure the payment of, to the Paying Agent, in addition to the amount which should have been paid hereunder, interest thereon from the day following the date when the amount unpaid should have been received under this Indenture to the date when such amount is actually received (inclusive) at a rate equal to the cost of the Paying Agent of funding such amount, as certified by the Paying Agent and expressed as a rate per annum.

 

The Paying Agent hereby agrees that:

 

(1)           it will hold all sums held by it as Paying Agent for the payment of the principal of or premium, if any, or interest on the Subordinated Notes in trust for the benefit of the Holders of the Subordinated Notes entitled thereto, or for the benefit of the Trustee, as the case may be, until such sums shall be paid out to such Holders or otherwise as provided below and in this Indenture;

 

(2)           it will promptly give the Trustee notice of: (x) an Issuer deposit for the payment of principal of or premium, if any, or interest on the Subordinated Notes, (y) any failure by the Issuer in the making of any deposit for the payment of principal of or premium, if any, or interest on the Subordinated Notes that shall have become payable, and (z) any default by the Issuer in making any payment of the principal of or premium, if any, or interest on the Subordinated Notes where the same shall be due and payable as provided in the Subordinated Notes; and

 

(3)           at any time after an Issuer Winding-Up Event shall have occurred, the Paying Agent shall, if so required by notice in writing given by the Trustee to the Paying Agent: (y) thereafter, until otherwise instructed by the Trustee, act as agent of the Trustee under the terms of the Indenture; and/or (z) deliver all Subordinated Notes and all sums, documents and records held by the Paying Agent in respect of the Subordinated Notes to the Trustee or as the Trustee shall direct in such notice; provided that such notice shall be

 

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deemed not to apply to any document or record which the Paying Agent is obligated not to release by any applicable law or regulation.

 

Notwithstanding the foregoing:

 

(4)           if any Subordinated Note is presented or surrendered for payment to the Paying Agent and the Paying Agent has delivered a replacement therefor or has been notified that the same has been replaced, the Paying Agent shall as soon as is reasonably practicable notify the Issuer in writing of such presentation or surrender and shall not make payment against the same until it is so instructed by the Issuer and has received the amount to be so paid; and

 

(5)           the Paying Agent shall cancel each Subordinated Note against surrender of which it has made full payment and shall deliver each Subordinated Note so cancelled by it to the Trustee.

 

In no event, shall the Paying Agent be obligated to make any payments hereunder if it has not received the full amount of any payment.

 

General

 

In acting under this Indenture, the Paying Agent shall not (a) be under any fiduciary duty towards any Person, (b) be responsible for or liable in respect of the authorization, validity or legality of any Subordinated Note amount paid by it hereunder (except to the extent that any such liability is determined by a court of competent jurisdiction to have been resulted from the Paying Agent’s negligence or wilful misconduct), (c) be under any obligation towards any Person other than the Trustee and Issuer or (d) assume any relationship of agency or trust for or with any Holder.

 

The Paying Agent shall be entitled to treat the registered Holder of any Subordinated Note as the absolute owner of such Subordinated Note for all purposes and make payments thereon accordingly.

 

The Paying Agent may exercise any of its rights or duties hereunder by or through agents or attorneys, and shall not be responsible for any misconduct thereof, provided such agent or attorney has been appointed with due care. Each such agent making any payment on the Subordinated Notes shall be a United States person (as defined in Section 7701(a)(30) of the Code) that is a “financial institution” within the meaning of Treasury Regulation Section 1.1441-1(c)(5) and a U.S. financial institution within the meaning of Treasury Regulation Section 1.1471-1(b)(136).

 

The Paying Agent shall not exercise any lien, right of set-off or similar claim against any Holder of a Subordinated Note in respect of moneys payable by it under this Indenture; however, should the Paying Agent elect to make a payment pursuant to this Section 2.07(f), it shall be entitled to appropriate for its own account out of the funds received by it under this Section 2.07(f) an amount equal to the amount so paid by it.

 

The Paying Agent may (at the expense of the Issuer) consult, on any matter concerning its duties hereunder, any legal adviser or other expert selected by it, and the Paying Agent shall not

 

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be liable in respect of anything done, or omitted to be done in good faith in accordance with that adviser’s opinion. At any time, the Paying Agent may apply to any duly authorized representative of the Issuer for a written instruction, and shall not be liable for an action lawfully taken or omitted to be taken in accordance with such instruction. Notwithstanding anything to the contrary herein, in no event shall the Paying Agent be entitled to reimbursement of the expenses of such legal adviser or expert with respect to any matter arising from the Paying Agent’s negligence or wilful misconduct. The Paying Agent shall promptly notify the Issuer of any action taken or omitted by the Paying Agent in reliance upon such advice.

 

The Paying Agent shall be entitled to rely, and shall not be liable in respect of anything done or suffered by it in reliance, on any notice, document, communication or information reasonably believed in good faith by it to be genuine and given by the proper parties.

 

The Paying Agent shall be obligated to perform only such duties as are specifically set forth herein and in the Subordinated Notes, and no implied duties or obligations shall be read into this Indenture or the Subordinated Notes against the Paying Agent.

 

The Paying Agent shall not be liable to account to the Issuer for any interest or other amounts in respect of funds received by it from the Issuer. Money held by the Paying Agent need not be segregated except as required by law.

 

No provision of this Indenture or the Subordinated Notes shall require the Paying Agent to risk or expend its own funds, or to take any action which in its reasonable judgment would result in any expense or liability accruing to it.

 

In no event will the Paying Agent be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, severe loss or severe malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Paying Agent will use best reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

The Paying Agent shall have no duty to inquire as to the performance of the covenants of the Issuer, nor shall it be charged with knowledge of any default under the Indenture.

 

In no event shall the Paying Agent be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to loss of business, goodwill, opportunity or profit of any kind) of the Issuer or any other Person (or, in each case, any successor thereto), even if the Paying Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

The Paying Agent, its officers, directors, employees and shareholders may become the owners of, or acquire any interest in, the Subordinated Notes, with the same rights that it or they would have if it were not the Paying Agent, and may engage or be interested in any financial or other transaction with the Issuer as freely as if it were not the Paying Agent.

 

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The Paying Agent shall retain the right not to act and shall not be held liable for refusing to act unless it has received clear and reasonable documentation which complies with the terms of this Indenture.

 

The Issuer will supply the Paying Agent with the names and specimen signatures of its authorized persons as soon as practicable after the date hereof.

 

The Paying Agent shall be entitled to take any action or to refuse to take any action which the Paying Agent regards as necessary for the Paying Agent to comply with any applicable law, regulation, fiscal requirement, court order, or the rules, operating procedures or market practice of any relevant stock exchange or other market or clearing system.

 

Change of Paying Agent

 

Resignation or Removal of Paying Agent. Any time, other than on a day during the thirty (30) day period preceding any payment date for Issuer’s Subordinated Notes, the Paying Agent may resign by giving at least thirty (30) days’ prior written notice to Issuer; and the Paying Agent’s agency shall be terminated and its duties shall cease upon expiration of such thirty (30) days or such lesser period of time as shall be mutually agreeable to Paying Agent and Issuer. At any time, following at least thirty (30) days’ prior written notice (or such lesser period of time as shall be mutually agreeable to the Paying Agent and the Issuer) from the Issuer, the Paying Agent may be removed from its agency. Such removal shall become effective upon the expiration of the thirty (30) day or agreed lesser time period (provided that any such removal shall be immediate in case the Paying Agent shall be adjudicated bankrupt or insolvent), and upon payment to the Paying Agent of all amounts payable to it in connection with its agency. In such event, following payment of its fees and expenses, the Paying Agent shall deliver to the Issuer, or to the Issuer’s designated representative, all Subordinated Notes (if any) and cash (if any) belonging to the Issuer and, at the Issuer’s expense, shall furnish to the Issuer, or to the Issuer’s designated representative, such information regarding the status of the Issuer’s outstanding Subordinated Notes reasonably requested by the Issuer.

 

Any Person into which a Paying Agent may be merged or consolidated or any Person resulting from any merger or consolidation to which such Paying Agent is a party or any Person to which such Paying Agent shall sell or otherwise transfer all or substantially all of its corporate trust or agency assets or business shall on the date on which such merger, consolidation or transfer becomes effective become the successor to such Paying Agent under this Indenture without the execution or filing of any paper or any further act on the part of the parties hereto.

 

U.S. Tax Forms

 

The Paying Agent shall deliver to the Issuer two properly completed and executed originals of IRS Form W-9 (or appropriate successor form) upon entering into this Indenture (and from time to time thereafter upon reasonable request of the Issuer). The Paying Agent agrees that if any form or certification that it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification promptly or promptly notify the Issuer in writing of its legal inability to do so.

 

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Any agent appointed pursuant to this Section 2.07(f) hereof making any payment on the Subordinated Notes shall deliver to the Issuer two properly completed and executed originals of IRS Form W-9 (or appropriate successor form) upon such appointment (and from time to time thereafter upon reasonable request of the Issuer).

 

The terms of this caption “U.S. Tax Forms” shall survive the termination of this Indenture.

 

FATCA

 

Notwithstanding any other provision of this Indenture or the Subordinated Notes, the Paying Agent shall be entitled to make a deduction or withholding (including the deduction of FATCA Withholding Tax) from any payment which it makes under this Indenture for or on account of any present or future taxes, duties or charges if and to the extent so required by any applicable law and any current or future regulations or agreements thereunder or official interpretations thereof or any law implementing an intergovernmental approach thereto or by virtue of the relevant holder failing to satisfy any certification or other requirements in respect of the Subordinated Notes, in which event the Paying Agent shall make such payment after such withholding or deduction has been made and shall account to the relevant authorities for the amount so withheld or deducted, and the Paying Agent shall have no obligation to gross up any payment hereunder or pay any additional amount as a result of such withholding tax. In addition, the Issuer agrees to provide the Paying Agent tax-information about holders or the transactions contemplated hereby (including any modification to the terms of such transactions), to the extent such information is directly available to the Company, so that the Paying Agent can determine whether it has tax-related obligations under applicable law.

 

Section 2.08.  Holder Lists.

 

The Registrar will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders. If the Trustee or the Paying Agent is not the Registrar, the Issuer will or cause the Registrar to furnish to the Trustee (but only if the Trustee so requires) and each Paying Agent at least seven Business Days before each interest payment date and at such other times as the Trustee or the Paying Agent may request in writing, a list of the names and addresses of the Holders in such form and as of such date as the Trustee or the Paying Agent may reasonably require.

 

Section 2.09.  Transfer and Exchange.

 

(a)           The Subordinated Notes may be surrendered for registration, transfer or exchange at the office of the Registrar. Also, all notices or demands to or upon the Issuer in respect to the Subordinated Notes and this Indenture may be served on the issuer at the office of the Registrar.

 

(b)           Upon surrender for registration of transfer of any Subordinated Note to the Registrar, and satisfaction of the requirements for such transfer set forth in this Section 2.09, the Issuer shall execute, and the Trustee or an Authenticating Agent shall, upon receipt of a written order from the Issuer, authenticate and deliver, in the name of the designated transferee or transferees, one or more new Subordinated Notes of any authorized denominations and of a like aggregate principal amount and bearing such restrictive legends as may be required by this Indenture. Subordinated Notes may be exchanged for other Subordinated Notes of any authorized

 

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denominations and of a like aggregate principal amount, upon surrender of the Subordinated Notes to be exchanged at any such office or agency maintained by the Issuer pursuant to Section 2.07. Whenever any Subordinated Notes are so surrendered for exchange, the Issuer shall execute, and the Trustee or an Authenticating Agent shall, upon receipt of a written order from the Issuer, authenticate and deliver, the Subordinated Notes that the Holder making the exchange is entitled to receive, bearing registration numbers not contemporaneously outstanding.

 

All Subordinated Notes presented or surrendered for registration of transfer or for exchange, repurchase or redemption shall (if so required by the Issuer, the Trustee or the Registrar) be duly endorsed, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Issuer and duly executed by the Holder thereof or its attorney-in-fact duly authorized in writing.

 

No service charge will be made by the Issuer or the Registrar to a Holder of a Book-Entry Interest in a Global Note, a Holder of a Global Note for any registration, transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any stamp duty, stamp duty reserve, documentary or other similar tax or governmental charge that may be imposed in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Section 2.13, Section 3.07 and Section 4.02).

 

The Issuer and the Registrar shall not be required (A) to register the transfer of or to exchange any Subordinated Note subject to redemption, (B) to register the transfer of a Subordinated Note other than in amounts of SEK 2,000,000 or an integral multiple of SEK 1,000,000 in excess thereof or (C) All Subordinated Notes issued upon any registration of transfer or exchange of Subordinated Notes in accordance with this Indenture shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture as the Subordinated Notes surrendered upon such registration of transfer or exchange.

 

(c)           The transfer and exchange of Book-Entry Interests shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures.

 

In connection with all transfers and exchanges of Book-Entry Interests (other than transfers of Book-Entry Interests in connection with which the transferor takes delivery thereof in the form of a Book-Entry Interest in the same Global Note), the Transfer Agent (copied to the Trustee and Registrar) must receive: (i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to debit from the transferor a Book-Entry Interest in an amount equal to the Book-Entry Interest to be transferred or exchanged; (ii) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a Book-Entry Interest in another Global Note in an amount equal to the Book-Entry Interest to be transferred or exchanged; and (iii) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited or debited with such increase or decrease, if applicable.

 

(d)           A Global Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee

 

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of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.

 

(e)           Certificated Notes. Notwithstanding Section 2.01(d), upon the issuance of certificated notes substantially in the form of Exhibit A hereto, Holders will be able to transfer certificated notes substantially in the form of Exhibit A hereto at the specified office of the Registrar or any Paying Agent or Transfer Agent upon the surrender of such certificated notes, together with the form of transfer endorsed thereon duly completed and executed, and otherwise in accordance with the provisions of this Indenture. In the case of a transfer of only a part of a certificated note, a new certificated note substantially in the form of Exhibit A hereto will be issued to the transferee at such specified office in respect of the part transferred and a further new certificated note in respect of the balance of the holding not transferred will be issued to the transferor.

 

(f)            Every Subordinated Note (including the Book-Entry Interests in Global Notes) shall be subject to the restrictions on transfer in the Regulation S Legend set forth below, and the Holder of each such Subordinated Note, by such Holder’s acceptance thereof, agrees to be bound by all such restrictions on transfer.

 

Each Subordinated Note (including each Global Note) shall bear a legend in substantially the following form on the face thereof (the “Regulation S Legend”):

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR PARTICIPATION THEREIN, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS 40 DAYS AFTER THE LATER OF THE ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) PURSUANT TO AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE RIGHT OF EACH OF THE ISSUER, THE REGISTRAR AND THE TRUSTEE, PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C) OR (D), TO REQUIRE DELIVERY OF A CERTIFICATE, OPINION OF COUNSEL OR OTHER INFORMATION SATISFACTORY TO IT. BY ITS ACCEPTANCE HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON

 

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AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.

 

AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “U.S. PERSON” AND “UNITED STATES” HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE REGISTRAR TO REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING.

 

THE RIGHTS ATTACHING TO THIS SECURITY ARE AS SPECIFIED IN THE INDENTURE.

 

Each Global Note shall bear a legend in substantially the following form on the face thereof (the “Global Note Legend”):

 

THIS SECURITY IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY NAMED BELOW OR A NOMINEE OF THE DEPOSITORY. THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED HEREIN AND IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THIS SECURITY AND THE INDENTURE. THE REGISTERED HOLDER HEREOF MAY BE TREATED BY THE ISSUER, THE TRUSTEE, THE AGENTS AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL PURPOSES.

 

(g)           All Global Notes may be exchanged or replaced, in whole or in part, as provided in Section 2.09(d), Section 2.10 and Section 2.13. A Global Note may not be exchanged for another Subordinated Note other than as provided in this Section 2.09. Book-Entry Interests in a Global Note may be transferred and exchanged as provided in Section 2.09(c) or Section 2.09(d).

 

(h)           The Trustee, any Agent and the Issuer may deem and treat the Person in whose name any Subordinated Note is registered as the absolute owner of such Subordinated Note for the purpose of receiving payment of principal of and interest on the Subordinated Notes and for all other purposes, and none of the Trustee, any Agent or the Issuer shall be affected by notice to the contrary.

 

(i)            All certifications, certificates and Opinions of Counsel required to be submitted to the Issuer, the Trustee or the Registrar pursuant to this Section 2.09 to effect a registration of transfer or exchange may be submitted by facsimile (to be followed by an original (or originals) to the Trustee upon its reasonable request).

 

(j)            None of the Trustee, any Agent or the Issuer shall have any obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under

 

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this Indenture or under applicable law with respect to any transfer of any interest in any Subordinated Note (including any transfers between or among Participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

 

Section 2.10.  Replacement Subordinated Notes.

 

(a)           If any mutilated Subordinated Note is surrendered to the Registrar, the Trustee or the Issuer and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Subordinated Note, the Issuer will issue and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Subordinated Note if the Trustee’s requirements are met. If required by the Trustee or the Issuer, an indemnity and/or security must be supplied by the Holder that is sufficient and satisfactory in the judgment of the Trustee and the Issuers to protect the Issuer, the Trustee, any Agent and any Authenticating Agent from any loss that any of them may suffer if a Subordinated Note is replaced. The Issuer and the Trustee may charge for its expenses in replacing a Subordinated Note, including properly incurred fees and expenses of counsel.

 

(b)           Every replacement Subordinated Note is an additional obligation of the Issuer and will be entitled to all of the benefits of this Indenture equally and proportionately with all other Subordinated Notes duly issued hereunder.

 

(c)           The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Subordinated Notes.

 

Section 2.11.  Outstanding Subordinated Notes.

 

(a)           The Subordinated Notes outstanding at any time are all the Subordinated Notes authenticated by the Trustee except for those canceled by the Registrar, those delivered to the Registrar for cancellation, those reductions in the interest in a Global Note effected by the Trustee, Depositary or Paying Agent in accordance with the provisions hereof, and those described in this Section 2.11 as not outstanding. Except as set forth in Section 2.12, a Subordinated Note does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds the Subordinated Note; however, Subordinated Notes held by the Issuer or a Subsidiary of the Issuer shall not be deemed to be outstanding for purposes of Section 3.02.

 

(b)           If a Subordinated Note is replaced pursuant to Section 2.10, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Subordinated Note is held by a protected purchaser.

 

(c)           If the principal amount of any Subordinated Note is considered paid under Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.

 

(d)           If a Paying Agent (other than the Issuer, a Subsidiary of the Issuer or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay

 

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Subordinated Notes payable on that date, then on and after that date such Subordinated Notes will be deemed to be no longer outstanding and will cease to accrue interest.

 

Section 2.12.  Treasury Subordinated Notes.

 

In determining whether the Holders of the required principal amount of Subordinated Notes have concurred in any direction, waiver or consent, Subordinated Notes owned by the Issuer or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer, will be considered as though not outstanding, except that for the purposes of determining whether the Trustee will be protected in relying on any such direction, waiver or consent, only Subordinated Notes that the Trustee knows are so owned will be so disregarded.

 

Section 2.13.  Temporary Subordinated Notes.

 

(a)           Until certificates representing Subordinated Notes are ready for delivery, the Issuer may prepare and the Trustee, upon receipt of an Authentication Order, will authenticate temporary Subordinated Notes. Temporary Subordinated Notes will be substantially in the form of certificated notes, which are substantially in the form of Exhibit A hereto, but may have variations that the Issuer considers appropriate for temporary Subordinated Notes and as may be reasonably acceptable to the Trustee.

 

(b)           Holders of temporary Subordinated Notes will be entitled to all of the benefits of this Indenture.

 

Section 2.14.  Cancellation; Purchases.

 

(a)           The Issuer at any time may deliver Subordinated Notes to the Registrar for cancellation. The Trustee, each Paying Agent and any Transfer Agent will forward to the Registrar any Subordinated Notes surrendered to them for registration of transfer, exchange or payment. The Registrar and no one else will cancel all Subordinated Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and will dispose of canceled Subordinated Notes (subject to the record retention requirement of the U.S. Exchange Act). Certification of the disposal of all canceled Subordinated Notes will be delivered to the Issuer by the Registrar following a written request from the Issuer. The Issuer may not issue new Subordinated Notes to replace Subordinated Notes that it has paid or that have been delivered to the Registrar for cancellation.

 

(b)           The Issuer may, in its sole discretion, at any time, subject to compliance with the Applicable Supervisory Regulations, purchase the Subordinated Notes for cancellation in the open market or otherwise at any price; provided that such purchase is permitted only if the applicable Conditions to Redemption in Section 3.05 and the limitations relating to optional deferral of interest in Section 2.02(c) have been satisfied with respect to such purchase.

 

Section 2.15.  No Rights of Set-off.

 

The Subordinated Notes will not in any way give rise to any rights of set-off, recoupments or counterclaims against any claims and obligations of the Issuer or any of its subsidiaries in the

 

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Regulatory Group or to any Person in whose names the Subordinated Notes are registered or any creditor of the Issuer or any of its subsidiaries in the Regulatory Group.

 

Section 2.16.  ISIN or Common Code Number.

 

The Issuer in issuing the Subordinated Notes may use an “ISIN” or “Common Code” number and, if so, such ISIN or Common Code number shall be included in notices of redemption or exchange as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness or accuracy of the ISIN or Common Code number printed in the notice or on the Subordinated Notes, and that reliance may be placed only on the other identification numbers printed on the Subordinated Notes, and any such redemption or exchange shall not be affected by any defect in or omission of such numbers.

 

The Issuer will promptly notify the Trustee and the Paying Agent in writing of any change in the ISIN or Common Code number.

 

Section 2.17.  Agents.

 

(a)           Actions of Agents.  The rights, powers, duties and obligations and actions of each Agent under this Indenture are several and not joint or joint and several.

 

(b)           Agents of Trustee.  The Issuer and the Agents acknowledge and agree that in the case of an Issuer Winding-Up Event or the failure of the Issuer to comply with any term or condition under the Subordinated Notes or this Indenture, the Trustee may, by notice in writing to the Issuer and the Agents, require that the Agents act as agents of, and take instructions exclusively from, the Trustee.

 

(c)           The Agents shall hold all funds as bankers subject to the terms of this Indenture and as a result, such money need not be held in accordance with the rules established by the Financial Conduct Authority in its Handbook of rules and guidance from time to time in relation to client money.

 

(d)           The Agents shall be entitled to make payments net of any taxes or other sums required by any applicable law to be withheld or deducted.

 

(e)           Except as expressly provided in this Section 2.17, the Agents shall not have any relationship of agency or trust with any party other than the Issuer.

 

ARTICLE 3
 REDEMPTION AND PREPAYMENT

 

Section 3.01.  Final Redemption.

 

(a)           Unless previously redeemed or purchased and canceled, the Subordinated Notes will become finally due and payable, and will be redeemed, on the Final Maturity Date for the Subordinated Notes at a Redemption Price equal to the principal amount thereof, together with accrued and unpaid interest (including Arrears of Interest) on the Subordinated Notes to, but excluding, the Final Maturity Date, and any Additional Amounts thereon.

 

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(b)           The Issuer shall notify the Trustee and the Holders of the Subordinated Notes in writing not less than 10 Business Days prior to the applicable Scheduled Maturity Date (or as soon as reasonably practicable if the applicable Conditions to Redemption are no longer satisfied as of a date less than 10 Business Days prior to the applicable Scheduled Maturity Date) if the applicable Conditions to Redemption will not be satisfied on the applicable Scheduled Maturity Date, which written notice shall state the cause of the failure to satisfy such conditions, and the redemption of the Subordinated Notes shall be deferred until such time as the applicable Conditions to Redemption are satisfied. In such event, the Issuer shall further notify the Trustee and the Holders of the Subordinated Notes in writing not more than 5 Business Days following the satisfaction of the applicable Conditions to Redemption that such conditions have been satisfied and stating the date that final payment on the Subordinated Notes will occur, which shall be the 10th Business Day following the date such conditions were satisfied. If at any time following the date of such written notice and prior to the stated redemption date the applicable Conditions to Redemption are no longer satisfied, the above notice provisions shall again apply.

 

Section 3.02.  Optional Redemption.

 

(a)           Beginning on September 22, 2022 and provided that the applicable Conditions to Redemption have been satisfied and will continue to be satisfied if the optional redemption payment were made on the Subordinated Notes, the Subordinated Notes may be redeemed, in whole at any time or in part from time to time, at the Issuer’s option, at a Redemption Price equal to accrued and unpaid interest (including Arrears of Interest) on the principal amount of Subordinated Notes being redeemed to, but excluding, the redemption date, and any Additional Amounts thereon, plus 100% of the principal amount of the Subordinated Notes to be redeemed.

 

(b)           Notice of any optional redemption will be mailed at least 30 days but not more than 60 days before the date of redemption to each Holder of the Subordinated Notes to be redeemed. The Issuer shall notify the Trustee and the Holders of the Subordinated Notes in writing not less than 10 Business Days prior to the applicable redemption date (or as soon as reasonably practicable if the applicable Conditions to Redemption are no longer satisfied as of a date less than 10 Business Days prior to the applicable redemption date) if the applicable Conditions to Redemption will not be satisfied on the applicable redemption date, which written notice shall state the cause of the failure to satisfy such conditions, and the redemption shall be deferred until such time as the applicable Conditions to Redemption are satisfied. In such event, the Issuer shall further notify the Trustee and the Holders of the Subordinated Notes in writing not more than 5 Business Days following the satisfaction of the applicable Conditions to Redemption that such conditions have been satisfied and stating the new redemption date for the Subordinated Notes, which shall be the 10th Business Day following the date such conditions were satisfied. If at any time following the date of such written notice and prior to the new redemption date the applicable Conditions to Redemption are no longer satisfied, the above notice provisions shall again apply.

 

(c)           Unless the Issuer defaults in payment of the Redemption Price (including, for this purpose, a non-payment in the event the applicable Conditions to Redemption have not been satisfied), on and after the redemption date, interest will cease to accrue on the Subordinated Notes or portions thereof called for redemption. In the event the Subordinated Notes are called for redemption, neither the Issuer nor the Trustee will be required to register the transfer of or exchange the Subordinated Notes to be redeemed during a period beginning at the opening of

 

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business 15 days before the day of the mailing of a notice of redemption and ending at the close of business on the day of such mailing.

 

Section 3.03.  Specified Event Redemption of Subordinated Notes.

 

(a)           The Subordinated Notes may be redeemed at the Issuer’s option and sole discretion, in whole, but not in part, within 90 days following the occurrence of a Specified Event (a “Specified Event Redemption”); provided that, at the time of such Specified Event Redemption, the applicable Conditions to Redemption are satisfied and will continue to be satisfied after the redemption payment is made and, if not so satisfied, such Specified Event Redemption will be deferred until such time as the Conditions to Redemption are satisfied. The Subordinated Notes will be redeemed at a Redemption Price equal to the principal amount thereof, together with accrued and unpaid interest (including Arrears of Interest) on the Subordinated Notes being redeemed to, but excluding, the redemption date, and any Additional Amounts thereon.

 

(b)           Notice of any Specified Event Redemption will be mailed at least 30 days but not more than 60 days before the redemption date to the Trustee and each Holder of Subordinated Notes to be redeemed at its registered address (which notice will be irrevocable). The Issuer shall notify the Trustee and the Holders of the Subordinated Notes in writing not less than 10 Business Days prior to the applicable redemption date (or as soon as reasonably practicable if the applicable Conditions to Redemption are no longer satisfied as of a date less than 10 Business Days prior to the applicable redemption date) if the applicable Conditions to Redemption will not be satisfied on the applicable redemption date, which written notice shall state the cause of the failure to satisfy such conditions, and the Specified Event Redemption shall be deferred until such time as the applicable Conditions to Redemption are satisfied. In such event, the Issuer shall further notify the Trustee and the Holders of the Subordinated Notes in writing not more than 5 Business Days following the satisfaction of the applicable Conditions to Redemption that such conditions have been satisfied and stating the new redemption date for the Subordinated Notes, which shall be the 10th Business Day following the date such conditions were satisfied. If at any time following the date of such written notice and prior to the new redemption date the applicable Conditions to Redemption are no longer satisfied, the above notice provisions shall again apply.

 

(c)           Such notice shall state the specified redemption date, the facts establishing the right of the Issuer to redeem the Subordinated Notes, and that all outstanding Subordinated Notes shall be redeemed at the applicable Redemption Price on the redemption date automatically and without any further action by the Holders of the Subordinated Notes.

 

(d)           Unless the Issuer defaults in the payment of the Redemption Price (including, for this purpose, a non-payment in the event the applicable Conditions to Redemption have not been satisfied), on and after the redemption date, interest will cease to accrue on the Subordinated Notes to be redeemed. In the event the Subordinated Notes are called for redemption, neither the Issuer nor the Trustee will be required to register the transfer of or exchange the Subordinated Notes to be redeemed during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption and ending at the close of business on the day of such mailing.

 

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Section 3.04.  Variation and Substitution of the Subordinated Notes.

 

(a)           If a Specified Event occurs, the Issuer may, as an alternative to redemption of the Subordinated Notes, at any time, without the consent of any Holder, by means of a supplemental indenture, vary any term or condition of the Subordinated Notes or substitute all (but not less than all) of the Subordinated Notes for other Subordinated Notes, so that the varied Subordinated Notes or the substituted Subordinated Notes, as the case may be, become Qualifying Equivalent Securities.

 

(b)           The principal amount of the Qualifying Equivalent Securities to be received by Holders in substitution shall be equal to the principal amount of the Subordinated Notes.

 

(c)           Any variation or substitution of the Subordinated Notes is subject to the Issuer’s prior notification to the Holders by no more than 60 nor less than 30 calendar days’ prior notice (which notice shall be irrevocable and shall specify the date fixed for such variation or substitution) in accordance with the notice provisions in Section 3.08 and to:

 

(1)           the Issuer being in compliance with the Applicable Supervisory Regulations on the date of such variation or substitution, and such variation or substitution not resulting directly or indirectly in a breach of such Applicable Supervisory Regulations; and

 

(2)           the Issuer complying with the rules of any stock exchange (or any other relevant authority) on which the Subordinated Notes are listed or admitted to trading.

 

(d)           “Qualifying Equivalent Securities” means securities which have terms not materially less favorable to the Holders than the Subordinated Notes, as reasonably determined by the Issuer, and which:

 

(1)           contain terms which comply with then current requirements in relation to Tier 2 Capital under the Applicable Supervisory Regulations;

 

(2)           contain terms providing for the same interest rate and Interest Payment Dates from time to time applying to the Subordinated Notes;

 

(3)           contain new terms providing for mandatory deferral of payments of interest and/or principal only if such terms are not materially less favorable to the Holders than the mandatory deferral provisions contained in Section 2.02(d);

 

(4)           rank senior to or have the same ranking as the Subordinated Notes;

 

(5)           preserve the obligations (including the obligations arising from the exercise of any right) of the Issuer as to redemption of the Subordinated Notes, including (without limitation) as to timing of, and amounts payable upon such redemption;

 

(6)           do not contain terms providing for loss absorption through principal write-down or conversion to ordinary shares; and

 

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(7)           preserve any rights under the Conditions to Redemption to any accrued interest and Arrears of Interest, and any existing rights to other amounts payable under the Subordinated Notes which has accrued to Holders and not been paid.

 

Section 3.05.  Conditions to Redemption.

 

(a)           The “Conditions to Redemption” are satisfied on any day with respect to a scheduled redemption (including the applicable Scheduled Maturity Date and the applicable Final Maturity Date) or a planned purchase of the Subordinated Notes, if:

 

(1)           the redemption or purchase of the Subordinated Notes would not result in, or accelerate the occurrence of, an Insolvency Event;

 

(2)           the Solvency Capital Requirement is complied with after the redemption or purchase of the Subordinated Notes;

 

(3)           prior to September 22, 2022 (as well as any subsequent date where such consent is required), the Applicable Supervisor has given, and not withdrawn by such date, its prior consent to the redemption of the Subordinated Notes and the payment of accrued and unpaid interest and Arrears of Interest (if any) and any Additional Amounts thereon or to the purchase of the Subordinated Notes; and

 

(4)           any further conditions to such redemption or purchase under Applicable Supervisory Regulations on the basis that the Subordinated Notes are intended to qualify as Tier 2 Capital (including, for the avoidance of doubt, if the Applicable Supervisory Regulations are Solvency II, that no Insolvent Insurer Winding-Up has occurred and is continuing and that the Solvency II Minimum Capital Requirement is complied with after the redemption or purchase of the Subordinated Notes), or as have otherwise been imposed by the Applicable Supervisor, have, in each case, been complied with.,

 

but only, in the case of (1) through (3) above, to the extent the satisfaction of such condition(s) is required under Applicable Supervisory Regulations so as to permit the Subordinated Notes to qualify as Tier 2 Capital, and, in all cases, unless otherwise permitted by the Applicable Supervisor.

 

(b)           In the event that the Subordinated Notes are not redeemed as a result of a failure to satisfy the Conditions to Redemption, interest on the Subordinated Notes will continue to accrue and be paid on each Interest Payment Date (subject to Section 2.03) until the first date on which final payment on the Subordinated Notes may be made as described above under Section 3.01, at which time the Subordinated Notes will become due and payable, and will be finally redeemed at the principal amount of the Subordinated Notes, together with accrued and unpaid interest (including any Arrears of Interest) and any Additional Amounts thereon in the manner and subject to the conditions stated above.

 

(c)           Notwithstanding any other provision in the Subordinated Notes or this Indenture, in the event of non-payment on a scheduled redemption date resulting from a failure to satisfy the applicable Conditions to Redemption in accordance with this Section 3.05, the Subordinated Notes to be redeemed will not become due and payable on such date, and such non-payment will not

 

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constitute an Issuer Winding-Up Event under this Indenture or the Subordinated Notes and will not give Holders of the Subordinated Notes or the Trustee any right to accelerate repayment of the Subordinated Notes.

 

(d)           An Officer’s Certificate relating to the Subordinated Notes in connection with any redemption under this Article 3 certifying that (i) the applicable Conditions to Redemption have not been met or would not be met if the final redemption payment for the Subordinated Notes were made, or (ii) the applicable Conditions to Redemption have been met and would continue to be met if the final redemption payment for the Subordinated Notes were made or no such Conditions to Redemption apply shall, in the absence of manifest error, be treated and accepted by the Issuer, the Trustee, the Holders of the Subordinated Notes and all other interested parties as correct and sufficient evidence thereof, shall be final and binding on such parties, and the Trustee shall be entitled to rely on such Officer’s Certificate without liability to any Person.

 

Section 3.06.  Election to Redeem; Notices to Trustee.

 

The election of the Issuer to redeem any Subordinated Notes shall be evidenced by a Board Resolution. In case of any redemption at the election of the Issuer of less than all the Subordinated Notes pursuant to Section 3.02, the Issuer shall, not less than 10 days prior to the redemption date fixed by the Issuer (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee in writing of such redemption date and of the principal amount of Subordinated Notes to be redeemed, such notice to be accompanied by a written statement signed by an authorized officer of the Issuer stating that no defaults in the payment of interest or Issuer Winding-Up Event with respect to Subordinated Notes has occurred (which have not been waived or cured). In the case of any redemption of Subordinated Notes prior to the expiration of any restriction on such redemption provided in the terms of the Subordinated Notes or elsewhere in this Indenture, the Issuer shall furnish the Trustee an Officer’s Certificate setting forth:

 

(1)           the clause of this Indenture pursuant to which the redemption shall occur;

 

(2)           the redemption date and the record date;

 

(3)           the principal amount of Subordinated Notes to be redeemed;

 

(4)           the Redemption Price; and

 

(5)           the ISIN and Common Code numbers.

 

Section 3.07.  Selection of Subordinated Notes to Be Redeemed.

 

If less than all of the Subordinated Notes are to be redeemed, such Subordinated Notes to be redeemed shall be selected by the Trustee, by a method the Trustee deems fair and appropriate subject to the customary procedures of Clearstream and Euroclear. Neither the Paying Agent nor the Registrar shall be liable for selections made in accordance with this Section 3.07.

 

Notices of purchase or redemption will be given to each Holder pursuant to Section 3.08 and Section 12.01.

 

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No Subordinated Notes of SEK 2,000,000 or less will be purchased or redeemed in part.

 

Section 3.08.  Notice of Redemption.

 

(a)           At least 30 days but not more than 60 days before a redemption date, the Issuer will mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Subordinated Notes are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a satisfaction and discharge of this Indenture pursuant to Article 9. If the Subordinated Notes are at such time listed on the Official List of the Irish Stock Exchange, the Issuer shall inform the Irish Stock Exchange of the principal amount of the Subordinated Notes that have not been redeemed in connection with any optional redemption.

 

(b)           The notice will identify the Subordinated Notes to be redeemed and will state:

 

(1)           the redemption date and the record date;

 

(2)           the Redemption Price and accrued and unpaid interest (including Arrears of Interest), if any, and Additional Amounts, if any, to be paid;

 

(3)           if any Global Note is being redeemed in part, the portion of the principal amount of such Global Note to be redeemed and that, after the redemption date upon surrender of such Global Note, the principal amount thereof will be decreased by the portion thereof redeemed pursuant thereto;

 

(4)           if any Definitive Registered Note is being redeemed in part, the portion of the principal amount of such Subordinated Note to be redeemed, and that, after the redemption date, upon surrender of such Subordinated Note, a new Definitive Registered Note or Definitive Registered Notes in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Definitive Registered Note;

 

(5)           the name and address of the Paying Agent(s) to which the Subordinated Notes are to be surrendered for redemption;

 

(6)           that Subordinated Notes called for redemption must be surrendered to the relevant Paying Agent to collect the Redemption Price, accrued and unpaid interest (including Arrears of Interest), if any, and Additional Amounts, if any;

 

(7)           that, unless the Issuer defaults in making such redemption payment, accrued and unpaid interest (including Arrears of Interest) and Additional Amounts, if any, on Subordinated Notes called for redemption ceases to accrue on and after the redemption date;

 

(8)           the paragraph of the Subordinated Notes and/or section of this Indenture pursuant to which the Subordinated Notes called for redemption are being redeemed; and

 

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(9)           that no representation is made as to the correctness or accuracy of the ISIN and Common Code numbers listed in such notice or printed on the Subordinated Notes.

 

At the Issuer’s request, the Paying Agent will give the notice of redemption in the Issuer’s name and at its expense; provided, however, that the Issuer has delivered to the Paying Agent, at least 45 days prior to the redemption date (unless a shorter notice shall be satisfactory to the Trustee), an Officer’s Certificate requesting that the Paying Agent give such notice and setting forth the information to be stated in such notice as provided in Section 3.06.

 

(c)           For Subordinated Notes that are represented by Global Note held on behalf of the Depositary any notice to be given to Holders under this Indenture may be given by delivery of the relevant notices to the Depositary for communication to entitled account holders in substitution for the aforesaid mailing. So long as any Subordinated Notes are listed on the Official List of the Irish Stock Exchange and admitted for trading on the Main Securities Market and the rules and regulations of the Irish Stock Exchange so require, any such notice to the Holders shall also be published by the Issuer in the manner permitted by such rules on the official website of the Irish Stock Exchange (www.ise.ie), and, in connection with any redemption, the Issuer will notify the Irish Stock Exchange of any change in the principal amount of Subordinated Notes outstanding.

 

Section 3.09.  Effect of Notice of Redemption.

 

A redemption and notice may, at the Issuer’s discretion, be subject to the satisfaction of one or more conditions precedent.

 

Section 3.10.  Deposit of Redemption.

 

On or prior to 10:00 a.m. London time one Business Day prior to any redemption date, the Issuer will deposit with the Paying Agent money an amount of money, in funds immediately available on the due date, sufficient to pay the Redemption Price, and (except if the redemption date shall be an Interest Payment Date) accrued and unpaid interest (including Arrears of Interest) and Additional Amounts, if any, on all Subordinated Notes to be redeemed or purchased on that date. The Paying Agent will promptly return to the Issuer any money deposited with the Paying Agent by the Issuer in excess of the amounts necessary to pay the redemption or purchase price of, accrued and unpaid interest (including Arrears of Interest) and Additional Amounts, if any, on all Subordinated Notes to be redeemed or purchased.

 

Section 3.11.  Notes Payable on Redemption Date.

 

If the Issuer complies with Section 3.10, notice of redemption having been given as aforesaid, the Subordinated Notes so to be redeemed shall, on the redemption date, become due and payable at the Redemption Price therein specified together with accrued interest thereon, if any, and from and after such date (unless the Issuer shall default in the payment of the Redemption Price and accrued interest) such Subordinated Notes shall cease to bear interest. If a Subordinated Note is redeemed on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Subordinated Note was registered at the close of business on such record date. If any Subordinated Note called for redemption is not so paid upon surrender for redemption because of the failure of the Issuer to comply with Section 3.10, interest shall be paid on the unpaid principal, from the

 

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redemption date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Subordinated Notes and in Section 4.01.

 

ARTICLE 4
 COVENANTS

 

Section 4.01.  Payment of Subordinated Notes.

 

The Issuer will pay or cause to be paid the principal of, premium on, if any, accrued and unpaid interest (including Arrears of Interest) and Additional Amounts, if any, on, the Subordinated Notes on the dates and in the manner provided in the Subordinated Notes and this Indenture. Principal, premium, if any, accrued and unpaid interest (including Arrears of Interest) and Additional Amounts, if any, will be considered paid on the date due if the Paying Agent, if other than the Issuer or a Subsidiary of the Issuer, holds as of 10:00 a.m. (London time) one Business Day prior to the due date money deposited by the Issuer in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and accrued and unpaid interest (including Arrears of Interest) and Additional Amounts, if any, then due. If the Issuer or any of the Issuer’s Subsidiaries acts as Paying Agent, principal, premium, if any, accrued and unpaid interest (including Arrears of Interest) and Additional Amounts, if any, shall be considered paid on the due date if the entity acting as Paying Agent complies with Section 4.04. Subject to actual receipt of such funds as provided by this Section 4.01 by the designated Paying Agent, such Paying Agent shall make payments on the Subordinated Notes in accordance with the provisions of this Indenture.

 

Section 4.02.  Additional Amounts Applicable to the Subordinated Notes.

 

(a)           All amounts payable (whether in respect of principal, interest or otherwise) in respect of the Subordinated Notes will be made free and clear of and without withholding or deduction for or on account of any present or future taxes, duties, levies, assessments or governmental charges (including interest, penalties and any liabilities with respect thereto) of whatever nature imposed or levied by or on behalf of any Taxing Jurisdiction, unless the withholding or deduction of such taxes, duties, levies, assessments or governmental charges is required by law. In that event, the Issuer will pay, or cause to be paid, such additional amounts on the Subordinated Notes as may be necessary in order that the net amounts receivable by a Holder of the Subordinated Notes after such withholding or deduction (including any withholding or deduction from such payment of additional amounts) shall equal the respective amounts that would have been receivable by such Holder of the Subordinated Notes had no such withholding or deduction been required (“Additional Amounts”), except that no such Additional Amounts shall be payable on the Subordinated Notes in relation to any payment (including a payment made in connection with a redemption) in respect of any of the Subordinated Notes:

 

(1)           to a Holder or a beneficial owner that would be able to avoid such withholding or deduction by complying with such Holder or beneficial owner’s statutory requirements or by making a declaration of non-residence or similar claim for exemption (including a claim under an applicable double taxation treaty) but, in either case, fails to do so, or is liable for such taxes, duties, levies, assessments or governmental charges in

 

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respect of such Subordinated Note by reason of such Holder or beneficial owner having some connection with (including, without limitation, being a citizen of, being incorporated or engaged in a trade or business in, or having a residence or principal place of business in) the Taxing Jurisdiction, other than (A) the mere holding of such Subordinated Notes; (B) the receipt of principal, interest or other amount in respect of such Subordinated Notes; or (C) the mere enforcement of rights with respect to such Subordinated Notes;

 

(2)           presented for payment more than 30 days after the Relevant Date, except to the extent that the relevant Holder would have been entitled to such Additional Amounts on presenting the same for payment on or before the expiration of such period of 30 days;

 

(3)           to a fiduciary, a partnership or Person who is not the beneficial owner of the Subordinated Note, if and to the extent that, as a result of an applicable tax treaty, no Additional Amounts would have been payable had the beneficiary, partner or beneficial owner owned the Subordinated Note directly;

 

(4)           on account of any inheritance, gift, estate, personal property, stamp, sales or transfer or similar taxes, duties, levies, assessments or similar governmental charges;

 

(5)           on account of any taxes, duties, levies, assessments or governmental charges that are payable otherwise than by withholding from payments in respect of such Subordinated Notes;

 

(6)           any taxes that are withheld or deducted pursuant to sections 1471 through 1474 of the Code, any current or future regulations thereunder, official interpretations thereof, or agreements (including any intergovernmental agreement or any laws, rules or practices implementing such intergovernmental agreement) entered into in connection therewith; or

 

(7)           any combination of items (1) through (6) above.

 

(b)           In the event that payments in respect of the Subordinated Notes are subject to withholding or deduction for or on account of any taxes, the Issuer will (i) make any required withholding or deduction and (ii) remit the full amount deducted or withheld to the relevant Taxing Jurisdiction in accordance with applicable law. The Issuer will use commercially reasonable efforts to obtain certified copies of tax receipts evidencing the payment of any taxes so deducted or withheld from each relevant Taxing Jurisdiction imposing such taxes and will use commercially reasonable efforts to provide or make available such certified copies (or other documentary evidence establishing the payment of such taxes) to each Holder.

 

(c)           Any reference in this Indenture or the Subordinated Notes to principal, premium or interest in respect of the Subordinated Notes, any redemption amount and any other amounts in the nature of principal shall be deemed also to refer to any Additional Amounts applicable to the Subordinated Notes that may be payable under this Indenture, and the express mention of the payment of Additional Amounts applicable to the Subordinated Notes (if applicable) in any provision hereof shall not be construed as excluding Additional Amounts applicable to the Subordinated Notes in those provisions hereof where such express mention is not made.

 

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(d)           Except as otherwise provided in or pursuant to this Indenture, if the Subordinated Notes require the payment of Additional Amounts, at least 30 days prior to each date on which any payments under or with respect to the Subordinated Notes are due and payable (unless such obligation to pay Additional Amounts arises shortly before or after the 30th day prior to such date, in which case it shall be promptly thereafter) the Issuer or its designee shall furnish to the Trustee, the Registrar and the Paying Agent an Officer’s Certificate stating the fact that such Additional Amounts will be payable, the amounts so payable, and any other information to enable the Trustee or such Paying Agent to pay such Additional Amounts to Holders on the payment date.

 

(e)           The Issuer will pay any present or future stamp, court or documentary taxes or any other excise or property taxes, charges or similar levies that arise in any jurisdiction from the execution, delivery or registration of the Subordinated Notes or any other document or instrument referred to therein (other than a transfer of the Subordinated Notes) or the receipt of any payments with respect to the Subordinated Notes, excluding any such taxes, charges or similar levies imposed by any jurisdiction outside the Taxing Jurisdictions in which a Paying Agent is located, other than those resulting from, or required to be paid in connection with, the enforcement of the Subordinated Notes, this Indenture or any other such document or instrument following the occurrence of any Issuer Winding-Up Event with respect to the Subordinated Notes, as applicable.

 

Section 4.03.  Maintenance of Office or Agency.

 

(a)           The Issuer will maintain the offices and agencies specified in Section 2.07. The Issuer shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer fails to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Trust Office of the Trustee.

 

(b)           The Issuer may also from time to time designate one or more other offices or agencies where the Subordinated Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission will in any manner relieve the Issuer of its obligation to maintain an office or agency in the City of London for such purposes. The Issuer will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

 

(c)           The Issuer hereby designates the Trust Office of the Trustee (the address of which is specified in Section 12.01) as one such office or agency of the Issuer in accordance with Section 2.07.

 

Section 4.04.  Money for Subordinated Notes; Payments to be Held in Trust.

 

(a)           If the Issuer shall at any time act as its own Paying Agent with respect to the Subordinated Notes, it will, on or before each due date of the principal of (and premium, if any) or interest on the Subordinated Notes, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.

 

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(b)           The Issuer will cause each Paying Agent for the Subordinated Notes other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section 4.04, that such Paying Agent will:

 

(1)           hold all sums held by it for the payment on the principal of (and premium, if any) or interest on the Subordinated Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;

 

(2)           give the Trustee notice of any default by the Issuer in the making of any payment of principal (and premium, if any) or interest on the Subordinated Notes; and

 

(3)           at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

 

(c)           The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Issuer or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Issuer or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

 

(d)           Any money deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of (and premium, if any) or interest on any the Subordinated Notes and remaining unclaimed for two years after such principal (and premium, if any) or interest has become due and payable shall be paid to the Issuer on Company Request, or (if then held by the Issuer) shall be discharged from such trust; and the Holder of the Subordinated Notes shall thereafter, as an unsecured general creditor, look, only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, shall at the expense of the Issuer cause to be mailed or published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the City, County and State of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such mailing or publication, any unclaimed balance of such money then remaining will be repaid to the Issuer.

 

(e)           The Issuer shall have no obligation to make payment of principal of (or premium, if any) or interest on the Subordinated Notes in immediately available funds, except that if the Issuer shall have received original payment for Subordinated Notes in immediately available funds it shall make available immediately available funds for payment of the principal of the Subordinated Notes.

 

Section 4.05.  Deferral of Distributions in the Event of Regulatory Breach.

 

For so long as the Regulatory Group is in breach of any applicable Solvency Capital Requirement or Minimum Capital Requirement, there will be no distributions nor payments made

 

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pursuant to the Subordinated Notes, and such payments will be deferred until such time as the applicable breach is rectified.

 

Section 4.06.  Reports.

 

(a)           For so long as any Subordinated Notes are outstanding, unless (i) the Issuer becomes subject to the reporting requirements of Section 13 or 15(d) of the U.S. Exchange Act (as amended), or (ii) the Issuer’s common shares are admitted to trading on a regulated market within the meaning of Article 4(1) of the European Markets in Financial Instruments Directive, it will, at its expense:

 

(1)           furnish to the Trustee, within 60 days after the last day of each fiscal quarter of each fiscal year (other than the fourth such fiscal quarter in any fiscal year), unaudited financial statements (which shall be as of and for the portion of the fiscal year then ended and prepared in accordance with GAAP; such financial statements are to include the Issuer’s consolidated balance sheet as of the end of such fiscal quarter and its consolidated statement of income, changes in shareholders equity and cash flows for the portion of the fiscal year then ended (or such other types of financial information or financial statements as at the time are specified by GAAP), setting forth in comparative form the corresponding figures as of the end of, and for the corresponding portion of, the preceding fiscal year, all prepared in accordance with GAAP; and such financials may be subject to customary year-end adjustments, with footnote and schedule disclosure abbreviated or omitted;

 

(2)           furnish to the trustee, within 120 days after the last day of each fiscal year, the Issuer’s consolidated balance sheet as of the end of such fiscal year and its consolidated statement of income, changes in shareholders equity and cash flows for such fiscal year (or such other types of financial statements as at the time are specified by GAAP), setting forth in comparative form the corresponding figures as of the end of and for the preceding fiscal year, all prepared in accordance with GAAP and accompanied by an audit report of a firm of independent public accountants of recognized international standing selected by the Issuer; and

 

(3)           upon written certification from any Person that is a Holder of Subordinated Notes or any beneficial owner of an interest in a global note certificate (which request must be provided as set forth in this Indenture and must indicate whether the Person making such request is a Holder or beneficial owner of Subordinated Notes), promptly deliver to such Holder or beneficial owner, as the case may be, by mailing or otherwise providing electronically to such Holder or beneficial owner or by posting on a website or by any online data system a copy of the financial information or financial statements then most recently provided to the Trustee pursuant to subparagraph (1) or (2) above, as the case may be, and thereafter, unless otherwise expressly stated in such request, deliver to such Holder or beneficial owner, as the case may be, a copy of all subsequent financial information and financial statements provided to the Trustee pursuant to subparagraphs (1) and (2) above (such financial information and financial statements to be delivered to such Holder or beneficial owner as promptly as practicable following the delivery thereof to the Trustee) unless such request is revoked by such Holder or beneficial owner by notice to the Issuer delivered as provided in this Indenture or until such time as the Issuer shall have reasonably

 

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determined that such Person is no longer a Holder or beneficial owner of Subordinated Notes.

 

(b)           For purposes of (1), (2) and (3) above, the term “GAAP” means (i) the generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (“U.S. GAAP”), and as are applicable to the financial statements of the Issuer as of the date of any computation required hereunder or (ii) if elected by the Issuer by written notice (the “IFRS Election”) to the Trustee, the International Financial Reporting Standards issued by the International Accounting Standards Board (“IFRS”), and as are applicable to the financial statements of the Issuer as of the date of any computation required hereunder. Upon such IFRS Election, references to GAAP shall thereafter be constructed to mean (a) for prior periods, U.S. GAAP and (b) periods beginning on and after the date specified in such notice, IFRS.

 

Section 4.07.  Compliance Certificates.

 

(a)           The Issuer will deliver to the Trustee, within 120 days after the end of each fiscal year, commencing September 22, 2017, an Officer’s Certificate from an Officer who shall be the principal executive officer, principal financial officer or principal accounting officer of the Issuer as to his knowledge of the Issuer’s compliance with all conditions and covenants under this Indenture and, in the event of any noncompliance, specifying such noncompliance and the nature and status thereof and stating that to such signing Officer’s knowledge no default, Issuer Winding-Up Event or any failure by the Issuer to comply with any term or condition under the Subordinated Notes has occurred and is continuing (or, if a default or any Issuer Winding-Up Event has occurred and is continuing, describing all such defaults or any Issuer Winding-Up Event of which he has knowledge and what action the Issuer is taking or proposes to take with respect thereto). For the purposes of this Section 4.07, such compliance shall be determined without regard to any period of grace or requirement of notice under this Indenture.

 

(b)           The Issuer will deliver to the Trustee, promptly upon becoming aware of (i) any default in the performance or observance of any covenant, agreement or condition contained in this Indenture, or (ii) any default or any Issuer Winding-Up Event, an Officer’s Certificate specifying with particularity such default or Issuer Winding-Up Event and further stating what action the Issuer has taken, is taking or proposes to take with respect thereto.

 

(c)           Any notice required to be given under this Section 4.07 shall be delivered to a Responsible Officer of the Trustee at the Trust Office of the Trustee.

 

Section 4.08.  Taxes.

 

The Issuer will pay, and will cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders; provided, in each case, that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor.

 

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Section 4.09.  Tax Treatment of Subordinated Notes.

 

The Issuer and each Holder, by purchasing the Subordinated Notes, agrees to treat the Subordinated Notes as indebtedness for U.S. federal income tax purposes, except as otherwise required by applicable law.

 

Section 4.10.  Stay, Extension and Usury Laws.

 

The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted.

 

Section 4.11.  Corporate Existence.

 

Subject to Article 5, the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights (charter and statutory) and franchises; provided, however, that the Issuer shall not be required to preserve any such right or franchise if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuer and that the loss thereof is not disadvantageous in any material respect to the Holders.

 

ARTICLE 5
 SUCCESSORS

 

Section 5.01.  Consolidation, Amalgamation, Merger or Sale of Assets.

 

As long as the Subordinated Notes are outstanding, the Issuer may not (1) consolidate or amalgamate with or merge into any Person, or convey, transfer, sell, assign, lease or otherwise dispose of all or substantially all of the Issuer’s properties and assets as an entirety, in one or more related transactions, to any Person or (2) permit any Person to consolidate with or amalgamate or merge into the Issuer or convey, transfer, sell, assign, lease or otherwise dispose of its properties and assets substantially as an entirety to the Issuer, in each case in one or more related transactions, unless:

 

(a)           (1) the Issuer is the surviving entity; or (2) the Person formed by the consolidation or amalgamation or into which the Issuer is merged or the Person to which the Issuer’s properties and assets are so conveyed, transferred, sold, assigned, leased or disposed of, (i) is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state of the United States, the District of Columbia, Bermuda, Sweden, the United Kingdom, Singapore or any country that is, as of the date of this Indenture, a member of the Organisation for Economic Cooperation and Development or the European Union and (ii) expressly assumed by supplemental indenture the payment of all amounts due on the Subordinated Notes and the

 

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performance of every obligation in this Indenture and the Subordinated Notes to be performed or observed;

 

(b)           immediately after giving effect to the transaction, no Issuer Winding-Up Event, and no event that, after notice or lapse of time or both, would become an Issuer Winding-Up Event, will have occurred and be continuing; and

 

(c)           the Issuer has delivered an Officer’s Certificate and an Opinion of Counsel to the Trustee stating that such transaction and any supplemental indenture required in connection with such transaction complies with the applicable provisions of this Indenture.

 

Section 5.02.  Successor Corporation Substituted.

 

Upon any consolidation or amalgamation by the Issuer with or merger of the Issuer into any Person, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties or assets of the Issuer in accordance with Section 5.01 the successor Person formed by such consolidation or amalgamation or into or with which the Issuer is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, amalgamation, merger, sale, assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture referring to the “Issuer” shall refer instead to the successor Person and not to the Issuer or the Issuer), and may exercise every right and power of the Issuer or the Issuer, as applicable, under this Indenture with the same effect as if such successor Person had been named as the Issuer or the Issuer herein.

 

ARTICLE 6
 DEFAULTS AND REMEDIES

 

Section 6.01.  No Events of Default.

 

There are no events of default under this Indenture with respect to the Subordinated Notes and no breach of this Indenture or the Subordinated Notes shall constitute an event of default.

 

Section 6.02.  Acceleration.

 

If an Issuer Winding-Up Event occurs, the entire principal amount of the Subordinated Notes, together with accrued and unpaid interest (including Arrears of Interest) and any Additional Amounts thereon, will automatically become due and payable without any declaration or other action on the part of the Trustee or any Holder of the Subordinated Notes; provided, however, that the Holders of a majority in aggregate principal amount of the then outstanding Subordinated Notes may rescind an acceleration and its consequences. The right of acceleration only applies upon the occurrence of an Issuer Winding-Up Event. Any failure to pay interest on the Subordinated Notes when due as a result of a Mandatory Deferral Event or to pay principal of the Subordinated Notes when due as a result of any of the applicable Conditions to Redemption not being satisfied shall not constitute an Issuer Winding-Up Event under this Indenture or the Subordinated Notes.

 

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Section 6.03.  Notice of Defaults.

 

The Trustee shall give Holders notice of an Issuer Winding-Up Event or of any failure of the Issuer to comply with any term or condition under the Subordinated Notes or this Indenture within 90 days after it becomes actually known to a Responsible Officer of the Trustee; provided, however, that the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Holders.

 

Section 6.04.  Other Remedies.

 

(a)           The Trustee may, at its discretion and without further notice, institute such proceedings or take such steps or actions against the Issuer as it may think fit to enforce any term or condition binding on the Issuer under the Subordinated Notes or this Indenture (other than any payment obligation of the Issuer under or arising from the Subordinated Notes or this Indenture, including any payment of damages awarded for breach of any obligations thereunder) but in no event shall the Issuer, by virtue of the institution of any such proceedings or the taking of such steps or actions be obliged to pay any sum or sums, in cash or otherwise, sooner than the same would otherwise have been payable by it under the terms of the Subordinated Notes. Nothing in this paragraph shall, however, (i) prevent the Trustee from proving in any winding-up or administration of the Issuer and/or claiming in any liquidation of the Issuer in respect of any payment obligation of the Issuer, in each case where such payment obligation arises from the Subordinated Notes or this Indenture (including, without limitation, payment of any principal, interest (including Arrears of Interest) and any Additional Amounts in respect of the Subordinated Notes or any payment of damages awarded for breach of any obligations under the Subordinated Notes or this Indenture), or (ii) impair the right of any Holder to receive payment of principal of, or interest (including Arrears of Interest) and any Additional Amounts on such Holder’s Subordinated Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Subordinated Notes. For the avoidance of doubt, the Trustee will in no circumstances be required to take any such action prior to an Issuer Winding-Up Event unless directed by a majority of holders pursuant to Section 6.05.

 

(b)           The Trustee may maintain a proceeding even if it does not possess any of the Subordinated Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Issuer Winding-Up Event shall not impair the right or remedy or constitute a waiver of or acquiescence in the Issuer Winding-Up Event. Subject to the provisions of this Indenture relating to the duties of the Trustee, in the case of an Issuer Winding-Up Event or any failure of the Issuer to comply with any term or condition under the Subordinated Notes or this Indenture occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of any Holders unless such Holders have offered to the Trustee, and the Trustee has received, indemnity and/or security (including by way of pre-funding) satisfactory to it against any loss, liability, cost or expense. All remedies are cumulative to the extent permitted by law.

 

(c)           Notwithstanding anything to the contrary contained in this Indenture, upon the occurrence and continuation any Specified Event or Mandatory Deferral Event, the Holders of the

 

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Subordinated Notes shall have no right to direct or instruct the Trustee to take any action against the Issuer with respect to or as a result of such event, and the Trustee shall have no duties, obligations or responsibilities under this Indenture or under the Subordinated Notes, and shall not be required to take any directions or instructions from Holders of the Subordinated Notes, with respect to or as a result of such event and shall incur no liability for any action it takes or abstains from taking with respect thereto.

 

Section 6.05.  Control by Majority.

 

Holders of a majority in aggregate principal amount of the then outstanding Subordinated Notes may direct the time, method and place of conducting any proceeding for exercising any remedy or power available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee, in its sole discretion determines may be unduly prejudicial to the rights of other Holders of Subordinated Notes or that may involve the Trustee in personal liability.

 

Section 6.06.  Limitation on Suits.

 

Except (subject to Article 8) to enforce the right to receive payment of principal, premium, if any, or interest or Additional Amounts when due, no Holder may pursue any remedy with respect to this Indenture or the Subordinated Notes unless:

 

(1)           such Holder has previously given the Trustee notice that an Issuer Winding-Up Event is continuing;

 

(2)           Holders of at least 25% in aggregate principal amount of the then outstanding Subordinated Notes make a written request to the Trustee to pursue the remedy;

 

(3)           such Holders have offered the Trustee, and the Trustee has received, security (including by way of pre-funding) and/or indemnity satisfactory to it against any loss, liability or expense;

 

(4)           the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security (including by way of pre-funding) and/or indemnity by way of pre-funding; and

 

(5)           Holders of a majority in aggregate principal amount of the then outstanding Subordinated Notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

 

A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder, and the Trustee shall not have an obligation to ascertain whether Holders’ actions are unduly prejudicial to other Holders.

 

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Section 6.07.  Rights of Holders to Receive Payment.

 

Except as otherwise expressly set forth in this Indenture, the right of any Holder to receive payment of principal of, premium on, if any, accrued and unpaid interest (including Arrears of Interest) or Additional Amounts, if any, on the Subordinated Notes, on or after the respective due dates expressed in the Subordinated Notes (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder other than as provided for in Section 8.03.

 

Section 6.08.  Collection Suit by Trustee.

 

If an Issuer Winding-Up Event occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount of principal of, premium on, if any, accrued and unpaid interest (including Arrears of Interest) and Additional Amounts, if any, remaining unpaid on, the Subordinated Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any amounts due to the Trustee under Section 7.05.

 

Section 6.09.  Trustee May File Proofs of Claim.

 

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the properly incurred compensation, costs, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the Subordinated Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the compensation, costs, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.05. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amount due the Trustee under Section 7.05 out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Subordinated Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

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Section 6.10.  Undertaking for Costs.

 

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.10 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Subordinated Notes.

 

Section 6.11.  Restoration of Rights and Remedies.

 

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Issuer, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Issuer, the Trustee and the Holders shall continue as though no such proceeding had been instituted.

 

Section 6.12.  Rights and Remedies Cumulative.

 

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Subordinated Notes in Section 2.10, no right or remedy herein conferred upon or to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

Section 6.13.  Delay or Omission Not Waiver.

 

No delay or omission of the Trustee or any Holder to exercise any right or remedy accruing upon any Issuer Winding-Up Event or any failure of the Issuer to comply with any term or condition under the Subordinated Notes or this Indenture shall impair any such right or remedy or constitute a waiver of any such Issuer Winding-Up Event or any such failure of the Issuer to comply with any term or condition under the Subordinated Notes or this Indenture or an acquiescence therein. Every right and remedy given by this Article 6 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

 

Section 6.14.  Priorities.

 

If the Trustee collects any money pursuant to this Article 6 or, if after an Issuer Winding-Up Event, any money or other property is distributable in respect of the Issuer’s obligations under this Indenture, the Trustee shall pay out the money or distribute the money or other property in the following order:

 

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First: to the Trustee and each of the Agents (including any predecessor trustee or agent), their agents and attorneys for amounts due under Section 7.05 hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

 

Second: to Holders for amounts due and unpaid on the Subordinated Notes for principal, premium and Additional Amounts, if any, and accrued and unpaid interest (including Arrears of Interest), ratably, without preference or priority of any kind, according to the amounts due and payable on the Subordinated Notes for principal, premium and Additional Amounts, if any, and accrued and unpaid interest (including Arrears of Interest), respectively; and

 

Third: to the Issuer or to such party as a court of competent jurisdiction shall direct.

 

The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.14.

 

ARTICLE 7
 TRUSTEE

 

Section 7.01.  Duties of Trustee.

 

(a)           If an Issuer Winding-Up Event under Article 6 shall occur (and shall not be cured) under this Indenture and is actually known to a Responsible Officer of the Trustee, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in such exercise as a prudent person would exercise or use under the circumstances in the conduct of his own affairs.

 

(b)           Except during the continuance of an Issuer Winding-Up Event:

 

(1)           the duties of the Trustee will be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

(2)           in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee will examine such certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts, statements, opinions or conclusions stated therein) and shall be entitled to seek advice from legal counsel in relation thereto.

 

(c)           The Trustee may not be relieved from liabilities for its own grossly negligent action, its own grossly negligent failure to act, or its own willful misconduct, except that:

 

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(1)           this Section 7.01(c) does not limit the effect of Section 7.01(b) or Section 7.01(e);

 

(2)           the Trustee will not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

 

(3)           the Trustee will not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.02 or Section 6.05.

 

(d)           Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to this Section 7.01.

 

(e)           No provision of this Indenture will require the Trustee to expend or risk its own funds or otherwise incur any liability. The Trustee will be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holder, unless such Holder has offered to the Trustee, and the Trustee has received, security and/or indemnity (including by way of pre-funding) satisfactory to it against any loss, liability, cost or expense.

 

(f)            The Trustee will not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

(g)           The Trustee shall not be deemed to have notice or any knowledge of any matter (including without limitation any default, any Insolvency Event, Specified Event, Mandatory Deferral Event or any Issuer Winding-Up Event) unless written notice thereof is received by a Responsible Officer of the Trustee at the Trust Office of the Trustee and such notice clearly references the Subordinated Notes, the Issuer and this Indenture.

 

Section 7.02.  Rights of Trustee.

 

(a)           The Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate or verify any fact or matter stated in the document.

 

(b)           Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel or other professional advisors and the written advice of such counsel, professional advisor or any Opinion of Counsel will be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

 

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(c)           The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.

 

(d)           The Trustee will not be liable for any action it takes, suffers or omits to take in good faith that it believes to be authorized or within the discretion, rights or powers conferred upon it by this Indenture.

 

(e)           Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer will be sufficient if signed by an Officer of the Issuer.

 

(f)            The Trustee will not be under any obligation to exercise any of its rights or powers under this Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee indemnity and/or security satisfactory to it against the losses, liabilities, costs and expenses that might be incurred by it in compliance with such request or direction.

 

(g)           The Trustee shall have no duty to monitor or inquire as to the performance of the covenants of the Issuer. Delivery of reports, information and documents to the Trustee under Section 4.06 is for informational purposes only and the Trustee’s receipt of the foregoing shall not constitute actual or constructive knowledge or notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of their covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates). The Trustee shall have no duty to examine any such reports, information and documents and its sole duty shall be to maintain them in its files and to make them available to Holders during business hours upon reasonable advance request.

 

(h)           The Trustee shall not have any obligation or duty to monitor, determine or inquire as to compliance, and shall not be responsible or liable for compliance with restrictions on transfer, exchange, redemption, purchase or repurchase, as applicable, of minimum denominations imposed under this Indenture or under applicable law or regulation with respect to any transfer, exchange, redemption, purchase or repurchase, as applicable, of any interest in any Subordinated Notes.

 

(i)            The rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified and/or secured to its satisfaction, are extended to, and shall be enforceable by the Trustee in each of its capacities hereunder and by each agent (including the Agents), custodian and other Person employed to act hereunder. Absent willful misconduct or negligence, no Agent shall be liable for acting in good faith on instructions believed by it to be genuine and from the proper party.

 

(j)            In the event the Trustee receives inconsistent or conflicting requests and indemnity or security from two or more groups of Holders, each representing less than a majority in aggregate principal amount of the Subordinated Notes then outstanding, pursuant to the provisions of this Indenture, the Trustee, in its sole discretion, may determine what action, if any, will be taken and shall not incur any liability for its failure to act until such inconsistency or conflict is, in its opinion, resolved.

 

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(k)           In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused, directly or indirectly, by circumstances beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

(l)            The Trustee is not required to give any bond or surety with respect to the performance or its duties or the exercise of its powers under this Indenture or the Subordinated Notes.

 

(m)          The permissive right of the Trustee to take the actions permitted by this Indenture shall not be construed as an obligation or duty to do so.

 

(n)           The Trustee will not be liable to any Person if prevented or delayed in performing any of its obligations or discretionary functions under this Indenture by reason of any present or future law applicable to it, by any governmental or regulatory authority or by any circumstances beyond its control.

 

(o)           The Trustee shall not be liable for any special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to loss of business, goodwill, opportunity or profit of any kind) of the Issuer or any other Person (or, in each case, any successor thereto), even if advised of it in advance and even if foreseeable.

 

(p)           The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit at the sole cost of the Issuer, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer personally or by agent or attorney.

 

(q)           The Trustee may request that the Issuer deliver an Officer’s Certificate setting forth the names of the individuals and/or titles of officers, directors, managers, and Authorized Signatories authorized at such time to take specified actions pursuant to this Indenture, which Officer’s Certificate may be signed by any person authorized to sign an Officer’s Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded.

 

(r)            No provision of this Indenture shall require the Trustee to do anything which, in its opinion, may be illegal or contrary to applicable law or regulation.

 

(s)            The Trustee may refrain from taking any action in any jurisdiction if the taking of such action in that jurisdiction would, in its opinion, based upon legal advice in the relevant jurisdiction, be contrary to any law of that jurisdiction or, to the extent applicable, the State of New York.

 

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(t)            The Trustee may retain professional advisors to assist it in performing its duties under this Indenture. The Trustee may consult with such professional advisors or with counsel, and the advice or opinion of such professional advisors or counsel with respect to legal or other matters relating to this Indenture and the Subordinated Notes shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

 

(u)           The Trustee may assume without inquiry in the absence of actual knowledge and written notification or information that the Issuer is duly complying with their obligations contained in this Indenture required to be performed and observed by them.

 

Section 7.03.  Individual Rights of Trustee.

 

The Trustee in its individual or any other capacity may become the owner or pledgee of Subordinated Notes and may otherwise deal with the Issuer or any Affiliate of the Issuer with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Section 7.08.

 

Section 7.04.  Trustee Not Responsible for Recitals, Disposition of Subordinated Notes or Application of Proceeds Thereof.

 

The recitals contained herein and in the Subordinated Notes, except the certificates of authentication, shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for the correctness of the same, except that the Trustee represents that it is duly authorized to execute and deliver this indenture, authenticate the Subordinated Notes and perform its obligations hereunder. The Trustee makes no representation as to the validity or sufficiency of this Indenture or of the Subordinated Notes and shall not be responsible for any statement in any document in connection with the sale or distribution of the Subordinated Notes. The Trustee shall not be accountable for the use or application by the Issuer of any of the Subordinated Notes or of the proceeds thereof or funds received and disbursed in accordance with this Indenture.

 

Section 7.05.  Compensation and Indemnity.

 

The Issuer covenants and agrees to pay the Trustee from time to time and the Trustee shall be entitled to, such compensation as the Issuer and the Trustee may from time to time agree in writing for all services rendered by the Trustee hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) and the Issuer covenants and agrees to pay or reimburse the Trustee and each predecessor trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by or on behalf of it in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all agents and other persons not regularly in its employ) except any such expense, disbursement or advance as shall be attributable to its negligence or willful misconduct. The Issuer also covenants to indemnify the Trustee and its officers, directors, employees and agents and each predecessor trustee for, and hold it harmless against, any loss, liability, damage, claim (whether asserted by the Issuer or any Holder or any other Person) or expense, including taxes (other than taxes measured by the income of the

 

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Trustee or otherwise applicable to the Trustee for operations outside the scope of this Indenture) incurred without negligence or willful misconduct on its part, arising out of or in connection with the acceptance or administration of this Indenture or the trusts hereunder and the performance of its duties hereunder, including the costs and expenses of defending itself against or investigating any claim of liability in connection with the exercise or performance of any of its powers or duties hereunder except to the extent that any such loss, liability, damage, claim or expense shall be attributable to the Trustee’s negligence or willful misconduct. The obligations of the Issuer under this Section 7.05 to compensate and indemnify the Trustee and each predecessor trustee and to pay or reimburse the Trustee and each predecessor trustee for expenses, disbursements and advances shall survive the satisfaction and discharge of this Indenture and resignation or removal of the Trustee. To secure the Issuer’s payment obligations in this Section 7.05, the Trustee will have a Lien prior to the Subordinated Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal of, premium on, if any, accrued and unpaid interest (including Arrears of Interest) or Additional Amounts, if any, on, particular Subordinated Notes. Such Lien will survive the satisfaction and discharge of this Indenture and resignation or removal of the Trustee. When the Trustee incurs expenses after the occurrence of an Issuer Winding-Up Event, the expenses are intended to constitute expenses of administration under Bankruptcy Law. “Trustee” for the purposes of this Section 7.05 shall include any predecessor Trustee and the Trustee in each of its capacities hereunder and each Agent; provided, however, that the negligence or willful misconduct of any Trustee hereunder shall not affect the rights of any other Trustee hereunder.

 

Section 7.06.  Resignation and Removal of Trustee; Replacement of Trustee.

 

(a)           The Trustee may resign at any time without cause and be discharged from the trust hereby created by so notifying the Issuer in writing.

 

(b)           The Holders of a majority in aggregate principal amount of the then outstanding Subordinated Notes may remove the Trustee upon 30 days’ notice to the Trustee and the Issuer in writing and may appoint a successor Trustee.

 

(c)           The Issuer may remove the Trustee with or without cause if the Issuer so notifies the Trustee 30 days in advance and if no default occurs or is continuing during the 30 day period. The Issuer may also remove the Trustee if:

 

(1)           the Trustee fails to comply with Section 7.08;

 

(2)           the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

 

(3)           a custodian or public officer takes charge of the Trustee or its property; or

 

(4)           the Trustee becomes incapable of acting.

 

(d)           If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuer will promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in aggregate principal amount of the then

 

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outstanding Subordinated Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer.

 

(e)           If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, (i) the retiring Trustee, the Issuer, or the Holders of at least 10% in aggregate principal amount of the then outstanding Subordinated Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee or (ii) the retiring Trustee may appoint a successor Trustee at any time prior to the date on which a successor Trustee takes office; provided that such appointment shall be reasonably satisfactory to the Issuer.

 

(f)            If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.08, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

(g)           A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.06.

 

(h)           A successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon, the resignation or removal of the retiring Trustee will become effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee will mail a notice of its succession to Holders. The retiring Trustee will promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.05. Notwithstanding replacement of the Trustee pursuant to this Section 7.06, the Issuer’s obligations under Section 7.05 will continue for the benefit of the retiring Trustee.

 

Section 7.07.  Successor Trustee by Merger, etc.

 

If the Trustee consolidates, amalgamates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another Person, the successor Person without any further act will be the successor Trustee.

 

Section 7.08.  Eligibility; Disqualification.

 

There will at all times be a Trustee hereunder that is a Person organized and doing business under the laws of the United States, or any state thereof, or England and Wales that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by U.K. or U.S. federal or state authorities and which is generally recognized as a Person which customarily performs such corporate trustee roles and provides such corporate trustee services in transactions similar in nature to the offering of the Subordinated Notes as described in the Prospectus.

 

Section 7.09.  Rights of Trustee and Agents to Receive Fees, Expenses and Indemnities.

 

Notwithstanding anything to the contrary in this Indenture, the rights of the Trustee and any Agent to receive payment of its fees and expenses pursuant to Section 7.05, its right to

 

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indemnification pursuant to Section 7.05 and Section 12.14, its lien provided for in Section 7.05 and its rights to have money or other property applied to it pursuant to Section 6.14 on the respective due dates therefor, or to bring suit for enforcement of any such payments or lien on or after such respective dates shall not be impaired by the occurrence of any event under this Indenture, including but not limited to any Mandatory Deferral Event, Issuer Winding-Up Event or Specified Event, and all such rights shall survive any Issuer Winding-Up Event and are not subject to the subordination provisions applicable to the Subordinated Notes pursuant to Article 10 or Section 11.01.

 

ARTICLE 8
 MODIFICATION AND WAIVER

 

Section 8.01.  Amendment and Modification with Consent of Applicable Supervisor.

 

Any amendment or modification to this Indenture or the Subordinated Notes shall require the prior consent of the Applicable Supervisor, if such consent is then required, and any amendment or modification made or purported to be made without such consent shall be void. Further, the Issuer, when authorized by Board Resolutions, and the Trustee, at any time and from time to time, may amend or supplement the provisions of Article 11 without the consent of any Holder to the extent determined reasonably necessary to comply with, or satisfy, regulations or requirements of the Applicable Supervisor relating to the Subordinated Notes, as determined by the senior management of the Issuer in good faith.

 

Section 8.02.  With Consent of Holders.

 

(a)           Subject to Section 8.03, the Issuer, when authorized by a Board Resolution, and the Trustee may modify, amend and/or supplement this Indenture and the Subordinated Notes with the consent of the Holders of not less than a majority in principal amount of the outstanding Subordinated Notes (voting as a single class); provided, however, that such modification, amendment or supplement may not, without the consent of each Holder of the Subordinated Notes:

 

(1)           change the Stated Maturity of the principal of or any premium or any installment of interest with respect to the Subordinated Notes;

 

(2)           reduce the principal amount of, or the rate of interest on or any premium payable upon the redemption of, the Subordinated Notes, or change the Issuer’s obligation to pay Additional Amounts;

 

(3)           change the currency of payment of principal of or interest on the Subordinated Notes;

 

(4)           change the redemption provisions, if any, of any Subordinated Notes in any manner adverse to the Holders of such Subordinated Notes;

 

(5)           impair the right to institute suit for the enforcement of any payment on or with respect to the Subordinated Notes;

 

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(6)           reduce the above-stated percentage of Holders of the Subordinated Notes necessary to modify or amend this Indenture;

 

(7)           modify the subordination provisions of this Indenture in a manner adverse to the Holders of such Subordinated Notes then outstanding; or

 

(8)           modify the foregoing requirements or reduce the percentage of outstanding Subordinated Notes necessary to waive any covenant or past default.

 

(b)           Holders of not less than a majority in principal amount of the outstanding Subordinated Notes (voting as a single class) may waive certain past defaults and may waive compliance by the Issuer with any provision of this Indenture relating to such Subordinated Notes (subject to the immediately preceding sentence); provided, however, that:

 

(1)           without the consent of each Holder of Subordinated Notes, no waiver may be made of a default in the payment of the principal of or interest on any Subordinated Note or in respect of a covenant or provision of this Indenture that expressly states that it cannot be modified or amended without the consent of each Holder; and

 

(2)           only the Holders of a majority in principal amount of Subordinated Notes may waive compliance with a provision of this Indenture.

 

(c)           The consent of the Holders under this Section 8.03Section 8.02 is not necessary to approve the particular form of any proposed amendment, supplement or waiver, but it is sufficient if such consent approves the substance of the proposed amendment, supplement or waiver.

 

Section 8.03.  Without Consent of Holders.

 

(a)           The Issuer, when authorized by a Board Resolution, and the Trustee may amend or supplement this Indenture or waive any provision of the same and the Subordinated Notes without the consent of any Holders of Subordinated Notes for one or more of the following purposes:

 

(1)           to cure any ambiguity, mistake or omission, or to correct or supplement any provision contained herein or in any supplemental indenture which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture;

 

(2)           to make any change that does not, in the good faith opinion of the Board of Directors, as evidenced by an Officer’s Certificate and an Opinion of Counsel to that effect, adversely affect the interests of Holders of such Subordinated Notes in any material respect, provided that any amendment or supplement conforming this Indenture to the terms described in the Prospectus (including any supplement thereto) pursuant to which they were initially sold shall be deemed not to adversely affect the interests of Holders of such Subordinated Notes;

 

(3)           to evidence the succession of another Person to the Issuer, or successive successions, and the assumption by the successor Person of the covenants, agreements and obligations of the Issuer, as the case may be, under this Indenture and the Subordinated Notes, in each case in compliance with this Indenture;

 

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(4)           to add covenants that would benefit the Holders of such Subordinated Notes or to surrender any rights or powers the Issuer has under this Indenture;

 

(5)           to provide any security for or guarantees of such Subordinated Notes;

 

(6)           to add events of default with respect to such Subordinated Notes; or

 

(7)           to evidence and provide for the acceptance of appointment by a successor trustee with respect to the Subordinated Notes and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts under this Indenture by more than one trustee, pursuant to the requirements of this Indenture;

 

(8)           to evidence any variation or substitution of the Subordinated Notes in accordance with Section 3.04(a) of this Indenture in a supplemental indenture.

 

Section 8.04.  Revocation and Effect of Consents.

 

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Subordinated Note or portion of a Subordinated Note that evidences the same debt as the consenting Holder’s Subordinated Note, even if notation of the consent is not made on any Subordinated Note. However, any such Holder or subsequent Holder may revoke the consent as to its Subordinated Note if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

 

Section 8.05.  Notation on or Exchange of Subordinated Notes.

 

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Subordinated Note thereafter authenticated. The Issuer in exchange for all Subordinated Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Subordinated Notes that reflect the amendment, supplement or waiver.

 

Failure to make the appropriate notation or issue a new Subordinated Note will not affect the validity and effect of such amendment, supplement or waiver.

 

Section 8.06.  Trustee to Sign Amendments, etc.

 

The Trustee will sign any amended or supplemental indenture authorized pursuant to this Article 8 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Issuer may not sign an amended or supplemental indenture until the Board of Directors of the Issuer approves it. In executing any amended or supplemental indenture, the Trustee will be entitled to receive and (subject to Section 7.01) will be fully protected in relying upon, in addition to the documents required by Section 12.03, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture and that such amended or supplemental indenture is

 

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the legal, valid and binding obligation of the Issuer, enforceable against the Issuer in accordance with its terms, subject to customary exceptions.

 

ARTICLE 9
 SATISFACTION AND DISCHARGE

 

Section 9.01.  Satisfaction and Discharge.

 

This Indenture shall cease to be of further effect with respect to the Subordinated Notes (except as to (i) any surviving rights of registration of transfer or exchange of Subordinated Notes herein expressly provided for, (ii) rights hereunder of Holders to receive payments of principal of, and premium, if any, and interest on, Subordinated Notes, and other rights, duties and obligations of the Holders as beneficiaries hereof with respect to the amounts, if any, so deposited with the Trustee and (iii) the rights, obligations and immunities of the Trustee hereunder), and the Trustee, upon Company Request and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect the Subordinated Notes, when:

 

(1)           all Subordinated Notes that have not been delivered to the Registrar for cancellation (i) have become due and payable, (ii) will become due and payable at their Stated Maturity within one year or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, in the case of (i), (ii) or (iii) has irrevocably deposited or caused to be deposited with the Trustee, or such other entity designated by the Trustee for this purpose, as trust funds in trust solely for the benefit of the Holders, (x) money in cash in Swedish krona in an amount, (y) Swedish Government Obligations which through the payment of interest and principal in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment referred to in this subparagraph, money in an amount, or (iii) a combination thereof, sufficient, without reinvestment, in the opinion of a nationally recognized investment banking firm or firm of independent certified public accountants expressed in a written certification thereof delivered to the Trustee (which shall not be subject to the requirements of Section 12.03), to pay and discharge the entire indebtedness on such Subordinated Notes not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any), accrued and unpaid interest (including Arrears of Interest) and Additional Amounts, if any, to the date of such deposit (in the case of Subordinated Notes which have become due and payable) or to the Stated Maturity or redemption date, as the case may be;

 

(2)           the Issuer has paid or caused to be paid all sums payable by it under this Indenture; and

 

(3)           the Issuer has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

 

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Notwithstanding the satisfaction and discharge of this Indenture, if money has been deposited with the Trustee pursuant this Section 9.01, Section 9.02 will survive. In addition, nothing in this Section 9.01 will be deemed to discharge those provisions of Section 7.05 that, by their terms, survive the satisfaction and discharge of this Indenture.

 

Section 9.02.  Application of Trust Money.

 

(a)           All money deposited and Swedish Government Obligations with the Trustee or such other entity designated by the Trustee for this purpose pursuant to Section 9.01 shall be held in trust and applied by it, in accordance with the provisions of the Subordinated Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal of, premium on, if any, accrued and unpaid interest (including Arrears of Interest) and Additional Amounts, if any, for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

 

(b)           If the Trustee or Paying Agent is unable to apply any money or Swedish Government Obligations, as applicable, in accordance with Section 9.01 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuer’s obligations under this Indenture and the Subordinated Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 9.01; provided that if the Issuer has made any payment of principal of, premium on, if any, accrued and unpaid interest (including Arrears of Interest) and Additional Amounts, if any, on, the Subordinated Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of the Subordinated Notes to receive such payment from the money or Swedish Government Obligations by the Trustee or Paying Agent.

 

ARTICLE 10
 SUBORDINATION

 

Section 10.01.  Agreement to Subordinate.

 

(a)           The Issuer covenants and agrees, and each Holder of Subordinated Notes issued hereunder by such Holder’s acceptance thereof (and each beneficial owner by accepting a Book-Entry Interest) likewise covenants and agrees, that all Subordinated Notes shall be issued subject to the provisions of this Article 10; and each Holder of Subordinated Notes, whether upon original issue or upon transfer or assignment thereof, accepts and agrees to be bound by such provisions.

 

(b)           The payment by the Issuer of the principal of, and interest on, the Subordinated Notes issued hereunder shall, to the extent and in the manner hereinafter set forth, be subordinated and junior in right of payment to the prior payment in full of all Senior Indebtedness of the Issuer, whether outstanding at the date of this Indenture or thereafter incurred, and pari passu with all of the Issuer’s future debt that by its terms ranks equally in right of payment with the Subordinated Notes upon a winding up of the Issuer.

 

(c)           No provision of this Article 10 shall prevent the occurrence of any default hereunder.

 

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Section 10.02.  Default on Senior Indebtedness.

 

(a)           If any default occurs and is continuing in the payment when due, whether at maturity, upon any redemption, by declaration or otherwise, of any principal of, interest on, unpaid drawings for letters of credit issued in respect of, or regularly accruing fees with respect to, any Senior Indebtedness, no payment of any kind or character shall be made by the Issuer or any other Person on the Issuer’s behalf with respect to any principal of, interest on or other amounts owing in respect of the Subordinated Notes or to acquire any of the Subordinated Notes for cash, property or otherwise.

 

(b)           If any other event of default occurs and is continuing with respect to any Senior Indebtedness, as such event of default is defined in the instrument creating or evidencing such Senior Indebtedness, permitting the holders of such Senior Indebtedness then outstanding to accelerate the maturity thereof and if the representative (as defined in the applicable instrument creating or evidencing such Senior Indebtedness) for the respective issue of Senior Indebtedness gives written notice of the event of default to the Trustee (a “Default Notice”), then, unless and until all events of default have been cured or waived or have ceased to exist or the Trustee receives notice from the representative for the respective issue of Senior Indebtedness terminating the Blockage Period (as defined below), during the 179 days after the delivery of such Default Notice (the “Blockage Period”), neither the Issuer nor any other Person on the Issuer’s behalf shall:

 

(1)           make any payment of any kind or character with respect to any principal of, interest on or other amounts owing in respect of the Subordinated Notes; or

 

(2)           acquire any of the Subordinated Notes for cash, property or otherwise.

 

(c)           Notwithstanding anything herein to the contrary, in no event will a Blockage Period extend beyond 179 days from the date the payment on the Subordinated Notes was due and only one such Blockage Period may be commenced within any 360 consecutive days. No event of default which existed or was continuing on the date of the commencement of any Blockage Period with respect to the Senior Indebtedness shall be, or be made, the basis for commencement of a second Blockage Period by the representative of such Senior Indebtedness whether or not within a period of 360 consecutive days unless such event of default shall have been cured or waived for a period of not less than 90 consecutive days (it being acknowledged that any subsequent action, or any breach of any financial covenants for a period commencing after the date of commencement of such Blockage Period that, in either case, would give rise to an event of default pursuant to any provisions under which an event of default previously existed or was continuing shall constitute a new event of default for this purpose).

 

(d)           In the event that, notwithstanding the foregoing, any payment shall be received by the Trustee when such payment is prohibited by the preceding paragraph of this Section 10.02, such payment shall be held in trust for the benefit of, and shall be paid over or delivered to, the holders of Senior Indebtedness or their respective representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing such Senior Indebtedness may have been issued, as their respective interests may appear, as calculated by the Issuer, to the extent necessary to pay such Senior Indebtedness in full, in cash, after giving effect to any concurrent

 

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payment or distribution to or for the benefit of the holders of such Senior Indebtedness, before any payment or distribution is made to the Holders or to the Trustee.

 

(e)           This Indenture does not restrict the amount of the Issuer’s or the applicable Issuer’s Subsidiaries’ Senior Indebtedness or other indebtedness. As a result of the foregoing provisions, in the event of the Issuer’s insolvency, Holders of the Subordinated Notes may recover ratably less than the Issuer’s general creditors.

 

Section 10.03.  Liquidation; Dissolution; Bankruptcy.

 

(a)           Upon any payment or distribution of assets of any kind or character, whether in cash, property or securities, to creditors upon any total or partial liquidation, dissolution, winding-up, reorganization, assignment for the benefit of creditors or marshaling of assets or in a bankruptcy, reorganization, insolvency, receivership or other similar proceeding relating to the Issuer or its property, whether voluntary or involuntary, all principal of, interest on and all other amounts due or to become due shall be paid, first, to all Senior Indebtedness in full in cash, or such payment duly provided for to the satisfaction of the holders of Senior Indebtedness, before any payment or distribution of any kind or character is made on account of any principal of, interest on or other amounts owing in respect of the Subordinated Notes, or for the acquisition of any of the Subordinated Notes for cash, property or otherwise, before any payment or distribution is made to the Holders or to the Trustee.

 

(b)           In the event that, notwithstanding the foregoing, any payment or distribution of assets of the Issuer of any kind or character, whether in cash, property or securities, prohibited by the foregoing, shall be received by the Trustee before all Senior Indebtedness of the Issuer is paid in full, or provision is made for such payment in money in accordance with its terms, such payment or distribution shall be held in trust for the benefit of, and shall be paid over or delivered to, the holders of such Senior Indebtedness or their respective representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing such Senior Indebtedness may have been issued, as their respective interests may appear, as calculated by the Issuer, to the extent necessary to pay such Senior Indebtedness in full, in cash, after giving effect to any concurrent payment or distribution to or for the benefit of the holders of such Senior Indebtedness, before any payment or distribution is made to the Holders or to the Trustee.

 

(c)           For purposes of this Article 10, the words “cash, property or securities” shall not be deemed to include shares of stock of the Issuer as reorganized or readjusted, or securities of the Issuer or any other corporation provided for by a plan of reorganization or readjustment, the payment of which is subordinated at least to the extent provided in this Article 10 with respect to the Subordinated Notes to the payment of all Senior Indebtedness of the Issuer that may at the time be outstanding; provided, however, that (i) such Senior Indebtedness is assumed by the new corporation, if any, resulting from any such reorganization or readjustment, and (ii) the rights of the holders of such Senior Indebtedness are not, without the consent of such holders, altered by such reorganization or readjustment. The amalgamation or consolidation of the Issuer with, or the merger of the Issuer into, another Person or the liquidation or dissolution of the Issuer following the conveyance or transfer of its properties or assets substantially as an entirety, to another Person upon the terms and conditions provided for in Article 5 of this Indenture shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 10.03 if such

 

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other Person shall, as part of such amalgamation, consolidation, merger, conveyance or transfer, comply with the conditions stated in Article 5 of this Indenture. Nothing in Section 10.01, Section 10.02 or in this Section 10.03 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.14 or Section 7.05 of this Indenture.

 

(d)           If the Trustee or any Holder of Subordinated Notes does not file a proper claim or proof of debt in the form required in any proceeding referred to above prior to 30 days before the expiration of the time to file such claim in such proceeding, then the holder of any Senior Indebtedness is hereby authorized, and has the right, to file an appropriate claim or claims for or on behalf of such Holder of Subordinated Notes.

 

Section 10.04.  Subrogation.

 

(a)           Subject to the payment in full of all Senior Indebtedness of the Issuer then outstanding, the rights of the Holders shall be subrogated to the rights of the holders of such Senior Indebtedness to receive payments or distributions of cash, property or securities of the Issuer applicable to such Senior Indebtedness until the principal of and interest on the Subordinated Notes shall be paid in full; and, for the purposes of such subrogation, no payments or distributions to the holders of such Senior Indebtedness of any cash, property or securities to which the Holders or the Trustee would be entitled except for the provisions of this Article 10, and no payment over pursuant to the provisions of this Article 10 to or for the benefit of the holders of such Senior Indebtedness by Holders or the Trustee, shall, as between the Issuer, its creditors other than holders of Senior Indebtedness of the Issuer, and the Holders, be deemed to be a payment by the Issuer to or on account of such Senior Indebtedness. It is understood that the provisions of this Article 10 are and are intended solely for the purposes of defining the relative rights of the Holders, on the one hand, and the holders of such Senior Indebtedness, on the other hand.

 

(b)           Nothing contained in this Article 10 or elsewhere in this Indenture or in the Subordinated Notes is intended to or shall impair, as between the Issuer, its creditors other than the holders of Senior Indebtedness of the Issuer, and the Holders, the obligation of the Issuer, which is absolute and unconditional, to pay to the Holders the principal of and interest on the Subordinated Notes as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders and creditors of the Issuer other than the holders of Senior Indebtedness of the Issuer nor shall anything herein or therein prevent the Trustee or any Holder of Subordinated Notes from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article 10 of the holders of such Senior Indebtedness in respect of cash, property or securities of the Issuer received upon the exercise of any such remedy.

 

(c)           Upon any payment or distribution of assets of the Issuer referred to in this Article 10, the Trustee of this Indenture, and the Holders shall be entitled to rely conclusively upon any order or decree made by any court of competent jurisdiction in which such dissolution, winding-up, liquidation or reorganization proceedings are pending, or a certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent or other Person making such payment or distribution, delivered to the Trustee or the Holders, for the purposes of ascertaining the Persons entitled to participate in such distribution, the holders of Senior Indebtedness and other indebtedness of the

 

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Issuer the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 10.

 

Section 10.05.  Trustee to Effectuate Subordination.

 

Each Holder of Subordinated Notes by such Holder’s acceptance thereof authorizes and directs the Trustee on such Holder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article 10 and appoints the Trustee such Holder’s attorney-in-fact for any and all such purposes.

 

Section 10.06.  Notice by the Issuer.

 

(a)           The Issuer shall give prompt written notice to a Responsible Officer of the Trustee of any fact known to the Issuer that would prohibit the making of any payment of monies to or by the Trustee in respect of the Subordinated Notes pursuant to the provisions of this Article 10. Notwithstanding the provisions of this Article 10 or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment of monies to or by the Trustee in respect of the Subordinated Notes pursuant to the provisions of this Article 10, or the taking of any other action by the Trustee, unless and until a Responsible Officer of the Trustee shall have received at the Trust Office of the Trustee written notice thereof from the Issuer or a Holder or Holders of Senior Indebtedness or from any representative or trustee therefor; and before the receipt of any such written notice, the Trustee, subject to the provisions of Section 7.01 of this Indenture, shall be entitled in all respects to assume that no such facts exist; provided, however, that if the Trustee shall not have received the notice provided for in this Section 10.06 at least three Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of or interest on any Subordinated Notes), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purposes for which such money was received, and shall not be affected by any notice to the contrary that may be received by it within three Business Days prior to such date.

 

(b)           The Trustee, subject to the provisions of Section 7.01 of this Indenture, shall be entitled to conclusively rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness of the Issuer (or a trustee or representative on behalf of such holder), to establish that such notice has been given by a holder of such Senior Indebtedness or a trustee or representative on behalf of any such holder or holders. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of such Senior Indebtedness to participate in any payment or distribution pursuant to this Article 10, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article 10 and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.

 

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Section 10.07.  Rights of the Trustee; Holders of Senior Indebtedness.

 

(a)           The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article 10 in respect of any Senior Indebtedness at any time held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder.

 

(b)           With respect to the holders of Senior Indebtedness of the Issuer, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article 10 and no implied covenants or obligations with respect to the holders of such Senior Indebtedness shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and the Trustee shall not be liable to any holder of such Senior Indebtedness if it shall pay over or deliver to Holders, the Issuer or any other Person money or assets to which any holder of such Senior Indebtedness shall be entitled by virtue of this Article 10 or otherwise.

 

Section 10.08.  Subordination May Not be Impaired.

 

(a)           No right of any present or future holder of any Senior Indebtedness of the Issuer to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Issuer or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Issuer with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof that any such holder may have or otherwise be charged with.

 

(b)           Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness of the Issuer may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders, without incurring responsibility to the Holders and without impairing or releasing the subordination provided in this Article 10 or the obligations hereunder of the Holders to the holders of such Senior Indebtedness, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, such Senior Indebtedness, or otherwise amend or supplement in any manner such Senior Indebtedness or any instrument evidencing the same or any agreement under which such Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing such Senior Indebtedness; (iii) release any Person liable in any manner for the collection of such Senior Indebtedness; and (iv) exercise or refrain from exercising or waive any rights against the Issuer and any other Person.

 

(c)           Each present and future holder of Senior Indebtedness shall be entitled to the benefit of the provisions of this Article 10 notwithstanding that such holder is not a party to this Indenture.

 

Section 10.09.  Article Applicable to Paying Agents.

 

In case at any time any Paying Agent other than the Trustee shall have been appointed by the Issuer and be then acting hereunder, the term “Trustee” as used in this Article 10 shall in such case (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article 10 in addition to or in place of the Trustee; provided, however, that this

 

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Section 10.09 shall not apply to the Issuer or any Affiliate of the Issuer if it or such Affiliate acts as Paying Agent.

 

Section 10.10.  Defeasance of This Article.

 

Notwithstanding anything contained herein to the contrary, payments from cash or the proceeds of Swedish Government Obligations held in trust under Article 9 hereof by the Trustee (or other qualifying trustee) and which were deposited in accordance with the terms of Article 9 hereof and not in violation of Section 10.02 hereof for the payment of principal of and interest on the Subordinated Notes shall not be subordinated to the prior payment of any Senior Indebtedness or subject to the restrictions set forth in this Article 10, and none of the Trustee or any Holders shall be obligated to pay over any such amount to the Issuer or any holder of Senior Indebtedness or any other creditor of the Issuer.

 

Section 10.11.  Subordination Language to be Included in Subordinated Notes.

 

Each Subordinated Note shall contain a subordination provision which will be substantially in the following form:

 

“The Subordinated Notes are subordinated in right of payment, in the manner and to the extent set forth in the Indenture, to the prior payment in full of all Senior Indebtedness (as defined in the Indenture). Each Holder by accepting a Subordinated Note agrees to such subordination and authorizes the Trustee to give it affect.”

 

Section 10.12.  Trustee Not Fiduciary for Holders of Senior Indebtedness.

 

The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be liable to any such holders if the Trustee shall mistakenly pay over or distribute to Holders of Subordinated Notes or to the Issuer or to any other Person cash, property, securities, or other assets to which any holders of Senior Indebtedness shall be entitled by virtue of this Article 10 or otherwise. With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article 10 and no implied covenants or obligations with respect to holders of Senior Indebtedness shall be read into this Indenture against the Trustee.

 

ARTICLE 11
 ADDITIONAL SUBORDINATION UNDER APPLICABLE SUPERVISORY
 REGULATIONS

 

The following provisions have been included to reflect requirements set by the BMA relating to the issuance and terms of the Subordinated Notes and are subject in all respects to the provisions under Section 12.07.

 

Section 11.01.  Subordination of the Subordinated Notes.

 

The Issuer covenants and agrees, and each Holder of Subordinated Notes issued hereunder by such Holder’s acceptance thereof (and each beneficial owner by accepting a Book-Entry Interest) likewise covenants and agrees that the Subordinated Notes shall be subordinated to the

 

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claims of all Senior Creditors on the terms and to the minimum extent necessary under the Applicable Supervisory Regulations (whether they be the Bermuda Group Rules, Solvency II or otherwise) as in effect from time to time so as to permit the Subordinated Notes to qualify as Tier 2 Capital. The subordination provisions of this Section 11.01 shall be given effect prior to the application of the subordination provisions of Article 10 set forth above.

 

Section 11.02.  No Encumbrances.

 

By purchasing the Subordinated Notes, each Holder of such Subordinated Notes shall also be deemed to agree and acknowledge that no security of any kind is, or will at any time be, provided by the Issuer or any of its respective affiliates to secure the rights of Holders of the Subordinated Notes.

 

ARTICLE 12
 MISCELLANEOUS

 

Section 12.01.  Notices.

 

Any notice or communication by the Issuer, the Trustee, the Registrar, the Transfer Agent, the Calculation Agent or the Paying Agent to the others is duly given if in writing and delivered in Person or by first class mail (registered or certified, return receipt requested), email, facsimile transmission or overnight air courier guaranteeing next day delivery, to the others’ address:

 

If to the Issuer:

 

Sirius International Group, Ltd.
 c/p Sirius Global Services, LLC 
 140 Broadway
 32nd Floor
 New York, New York 10005 
 Fax: 001 (212) 312-2526 
 Attention: General Counsel

 

With a copy to (which copy shall be delivered as an accommodation and shall not be required to be delivered in satisfaction of any requirement hereof):

 

Willkie Farr & Gallagher LLP
 787 Seventh Avenue
 New York, NY 10019
 Fax: 212-728-8111
 Attention:  Gregory B. Astrachan and Matthew B. Stern

 

If to the Trustee, Registrar or Transfer Agent:

 

The Bank of New York Mellon
 101 Barclay Street, 7W
 New York, NY 10286

 

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Fax: 212-815-5704
 Attention:  Corporate Trust Division — Corporate Finance Unit

 

If to the Paying Agent or Calculation Agent:

 

The Bank of New York Mellon acting through its London Branch
 One Canada Square
 London E14 5AL
 Fax: 00-44-1202 689601
 Attention: Corporate Trust Administration

 

The Issuer, the Trustee, the Paying Agent, the Registrar, the Transfer Agent or the Calculation Agent, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

 

All notices and communications (other than those sent to Holders) will be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if transmitted by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery; except in the case of notices or communications given to the Trustee or any Agent, which shall be effective only upon receipt at the Trust Office of the Trustee or its address listed in this Section 12.01, as applicable.

 

In no event shall the Trustee, the Paying Agent, the Transfer Agent, the Registrar, or the Calculation Agent be liable for any losses arising out of receiving or transmitting any data from the Issuer or any party via any non-secured method of transmission or communication, such as, but without limitation, by facsimile. The parties hereto accept that some methods of communication are not secure and the Trustee, the Paying Agent, the Transfer Agent, the Registrar and the Calculation Agent shall incur no liability for receiving instructions via any such non-secured method. The Issuer shall use all reasonable endeavors to ensure that instructions transmitted to the Trustee, the Paying Agent, the Transfer Agent, the Registrar or the Calculation Agent pursuant to this Indenture are complete and correct. Any instructions shall be conclusively deemed to be valid instructions from the Issuer or proper Person of the Issuer to the Trustee, the Paying Agent, the Transfer Agent, the Registrar or the Calculation Agent for the purposes of this Indenture.

 

All notices to the Holders (while any Subordinated Notes are represented by one or more Global Note) shall be delivered to the Depositary as applicable for communication to entitled account holders. So long as the Subordinated Notes are listed on the Official List of the Irish Stock Exchange and admitted to trading on the Main Securities Market and the rules and regulations of the Irish Stock Exchange so require, all notices to Holders will also be published by the Issuer on the website of the Irish Stock Exchange (www.ise.ie).

 

Notices given by publication will be deemed given on the first date on which publication is made. Notices delivered to the Depositary will be deemed given on the date when delivered. Notices given by first class mail, postage paid, will be deemed given five calendar days after mailing whether or not the addressee receives it.

 

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Other than with respect to the Trustee and the Agents, if a notice or communication is mailed or published in the manner provided in this Section 12.01 within the time prescribed, it is duly given, whether or not the addressee receives it.

 

If the Issuer mails a notice or communication to Holders, it will mail a copy to the Trustee and each Agent at the same time.

 

Section 12.02.  Certificate and Opinion as to Conditions Precedent.

 

Upon any request or application by the Issuer to the Trustee to take any action under this Indenture, the Issuer shall furnish to the Trustee:

 

(1)           an Officer’s Certificate (which must include the statements set forth in Section 12.03) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; provided, however, that no such Officer’s Certificate shall be delivered with respect to the authentication and delivery of any Subordinated Notes on the date hereof; and

 

(2)           an Opinion of Counsel (which must include the statements set forth in Section 12.03) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with; provided, however, that no such Opinion of Counsel shall be delivered with respect to the authentication and delivery of any Subordinated Notes on the date hereof.

 

Section 12.03.  Statements Required in Certificate or Opinion.

 

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

 

(1)           a statement that the Person making such certificate or opinion has read such covenant or condition;

 

(2)           a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(3)           a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable such Person to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(4)           a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.

 

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Section 12.04.  Rules by Trustee and Agents.

 

The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

 

Section 12.05.  Agent for Service; Submission to Jurisdiction; Waiver of Immunities.

 

The Issuer and the Trustee each agree that any legal suit, action or proceeding instituted against the Issuer in relation to any matter arising under this Indenture or the Subordinated Notes may be brought in any United States Federal or New York State court sitting in the Borough of Manhattan, The City of New York, New York to the extent that such court has subject matter jurisdiction over the controversy, and, by execution and delivery of this Indenture, the Issuer hereby irrevocably submits to, generally and unconditionally, the personal jurisdiction of the aforesaid courts, acknowledges their competence and irrevocably agrees to be bound by any judgment rendered in such proceeding. The Issuer also irrevocably and unconditionally waives for the benefit of the Trustee and the Holders of the Subordinated Notes any objection to the venue of a proceeding in any such court and any immunity from legal process (whether through service or notice, attachment prior to judgment, attachment in the aid of execution, execution or otherwise) in respect of this Indenture. The Issuer hereby irrevocably designates and appoints for the benefit of the Trustee and the Holders of the Subordinated Notes for the term of this Indenture Sirius America Insurance Company, 140 Broadway, 32nd Floor, New York, New York 10005, (fax: (212) 312-2512); Attention: General Counsel, and a copy to Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, NY, 10019; Attention: Gregory B. Astrachan and Matthew B. Stern as its agent to receive on its behalf service of all process, brought against it with respect to any such proceeding in any such court in The City of New York, such service being hereby acknowledged by the Issuer to be effective and binding service on it in every respect whether or not the Issuer shall then be doing or shall have at any time done business in New York. The Issuer further agrees that such appointment of Sirius America shall be irrevocable and that Sirius America shall maintain an office in New York City so long as any of the Subordinated Notes or the obligations of the Issuer hereunder remain outstanding or until the appointment of a successor by the Issuer and such successor’s acceptance of such appointment. Upon such acceptance, the Issuer shall notify the Trustee in writing of the name and address of such successor. The Issuer further agrees for the benefit of the Trustee and the Holders of the Subordinated Notes to take any and all action, including the execution and filing of any and all such documents and instruments as may be necessary to continue the designation and appointment of such agent in full force and effect, so long as any of the Subordinated Notes or the obligations of the Issuer hereunder shall be outstanding. The Trustee shall not be obligated and shall have no responsibility with respect to any failure of the Issuer to take any such action. Nothing herein shall affect the right to serve process in any other manner permitted by any law or limit the right of the Trustee or any Holder to institute proceedings against the Issuer in the courts of any other jurisdiction or jurisdictions.

 

Section 12.06.  No Personal Liability of Directors, Officers, Authorized Signatories, Employees and Shareholders.

 

No director, officer, employee, Authorized Signatory, incorporator or shareholder of the Issuer, as such, will have any liability for any obligations of the Issuer under the Subordinated

 

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Notes, this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Subordinated Notes by accepting a Subordinated Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Subordinated Notes. The waiver may not be effective to waive liabilities under applicable securities laws.

 

Section 12.07.  Governing Law.

 

THIS INDENTURE AND EACH SUBORDINATED NOTE SHALL (OTHER THAN SECTION 4.05 AND ARTICLE 11 OF THIS INDENTURE) BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW OR ANY SUCCESSOR TO SUCH STATUTE) WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS OF SUCH STATE. SECTION 4.05 AND ARTICLE 11 OF THIS INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF BERMUDA (OR IN THE EVENT THAT THE APPLICABLE SUPERVISOR IS BASED IN A JURISDICTION OTHER THAN BERMUDA, UNDER THE LAWS OF THAT JURISDICTION). EXCEPT THAT THE RIGHT OF THE TRUSTEE TO RECEIVE ITS FEES, EXPENSES AND INDEMNIFICATION PURSUANT TO Section 7.05, AND ITS LIEN PROVIDED FOR IN SUCH SECTION, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

Section 12.08.  Waiver of Jury Trial.

 

To the fullest extent permitted by applicable law, each of the Issuer, the Trustee and each Holder of a Subordinated Note by its acceptance thereof waives any and all right to trial by jury in any legal proceeding arising out of or relating to this Indenture, the Subordinated Notes or the transactions contemplated thereby.

 

Section 12.09.  No Adverse Interpretation of Other Agreements.

 

Nothing in this Indenture or in the Subordinated Notes, expressed or implied, shall give or be construed to give to any Person, other than the parties hereto and their successors and the Holders of the Subordinated Notes, any legal or equitable right, remedy or claim under this Indenture or under any covenant or provision herein contained, all such covenants and provisions being for the sole benefit of the parties hereto and their successors and the Holders of the Subordinated Notes.

 

Without limiting the generality of the foregoing, this Indenture may not be used to interpret any other indenture, loan or debt agreement of the Issuer, the Issuer or its subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

Section 12.10.  Successors.

 

All agreements of the Issuer in this Indenture and the Subordinated Notes will bind its successors and assigns, whether so expressed or not. All agreements of the Trustee in this Indenture will bind its successors and assigns, whether so expressed or not.

 

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Section 12.11.  Severability.

 

In case any provision in this Indenture or in the Subordinated Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.

 

Section 12.12.  Counterpart Originals.

 

The parties may sign any number of copies of this Indenture. Each signed copy will be an original, but all of them together represent the same agreement. The exchange of copies of this Indenture and of signature pages by facsimile or electronic (i.e., “.pdf” or “.tif”) transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or electronic (i.e., “.pdf” or “.tif”) transmission shall be deemed to be their original signatures for all purposes.

 

Section 12.13.  Table of Contents, Headings, etc.

 

The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and will in no way modify or restrict any of the terms or provisions hereof.

 

Section 12.14.  Indemnification of Judgment Currency.

 

The Issuer will indemnify the Trustee and each Holder of the Subordinated Notes to the fullest extent permitted by applicable law against any loss incurred by the Trustee or any such Holder, as applicable, as a result of any judgment or order being given or made for any amount due under such Subordinated Notes and the judgment or order being expressed and paid in a currency (the “Judgment Currency”) other than Swedish krona and as a result of any variation as between (i) the rate of exchange at which the Swedish krona is converted into the Judgment Currency for the purpose of the judgment or order and (ii) the spot rate of exchange in The City of New York at which the Trustee or such Holder, as applicable, on the date that payment is made pursuant to the judgment or order is able to purchase Swedish krona in the amount of the Judgment Currency actually received by the Trustee or such Holder.

 

Section 12.15.  Prescription.

 

Claims against the Issuer for the payment of principal or Additional Amounts, if any, on the Subordinated Notes will be prescribed ten years after the applicable due date for payment thereof. Claims against the Issuer for the payment of interest on the Subordinated Notes will be prescribed five years after the applicable due date for payment of interest.

 

Section 12.16.  No Security Interest Created.

 

Nothing in this Indenture or in any Subordinated Notes, express or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect in any jurisdiction where property of the Issuer or its respective Subsidiaries is or may be located.

 

75

 

Section 12.17.  U.S.A. Patriot Act.

 

The Issuer acknowledges that in accordance with Section 326 of the U.S.A. PATRIOT Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each Person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. PATRIOT Act.

 

Section 12.18.  FATCA.

 

The Issuer agrees (i) to provide the Trustee with such reasonable information as it has in its possession to enable the Trustee to determine whether any payments pursuant to this Indenture are subject to the withholding requirements described in Section 1471(b) of the Code, or otherwise imposed pursuant to Sections 1471 through 1474 of the Code and any regulations, or agreements thereunder or official interpretations thereof (“Applicable Law”), and (ii) that the Trustee shall be entitled to make any withholding or deduction from payments under this Indenture to the extent necessary to comply with Applicable Law, for which the Trustee shall not have any liability.

 

Section 12.19.  Prior Agreements.

 

This Indenture supersedes all prior agreements and understandings (whether written or oral) between the parties with respect to the subject matter hereof.

 

[Signatures on following page]

 

76

 

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the date first written above.

 

	
 
    	
SIRIUS INTERNATIONAL GROUP, LTD.,
    
	
 
    	
as Issuer
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/ Kernan V. Oberting
    
	
 
    	
Name:
    	
Kernan V. Oberting
    
	
 
    	
Title:
    	
Chief Financial Officer
    

 

[Signature Page to the Floating Rate Notes Indenture]

 

 

THE BANK OF NEW YORK MELLON, as Trustee, Registrar and Transfer Agent

 

 

	
 
    	
By
    	
/s/ Laurence J. O’Brien
    
	
 
    	
Name:
    	
Laurence J. O’Brien
    
	
 
    	
Title:
    	
Vice President
    

 

[Signature Page to the Floating Rate Notes Indenture]

 

 

THE BANK OF NEW YORK MELLON ACTING THROUGH ITS LONDON BRANCH, as Paying Agent and Calculation Agent

 

 

	
 
    	
By
    	
/s/ Thomas Vanson
    
	
 
    	
Name:
    	
Thomas Vanson
    
	
 
    	
Title:
    	
Authorised Signatory
    

 

[Signature Page to the Floating Rate Notes Indenture]

 

 

EXHIBIT A

 

[FORM OF FACE OF SUBORDINATED NOTE]

 

[THIS SECURITY IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY NAMED BELOW OR A NOMINEE OF THE DEPOSITORY. THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED HEREIN AND IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THIS SECURITY AND THE INDENTURE. THE REGISTERED HOLDER HEREOF MAY BE TREATED BY THE ISSUER, THE TRUSTEE, THE AGENTS AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL PURPOSES.](1)

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR PARTICIPATION THEREIN, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS 40 DAYS AFTER THE LATER OF THE ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) PURSUANT TO AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE RIGHT OF EACH OF THE ISSUER, THE REGISTRAR AND THE TRUSTEE, PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C) OR (D), TO REQUIRE DELIVERY OF A CERTIFICATE, OPINION OF COUNSEL OR OTHER INFORMATION SATISFACTORY TO IT. BY ITS ACCEPTANCE HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S.

 

(1)  Global Note legend.  Include bracketed language in Global Note only.

 

A-1

 

PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.

 

AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “U.S. PERSON” AND “UNITED STATES” HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE REGISTRAR TO REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING.

 

THE RIGHTS ATTACHING TO THIS SECURITY ARE AS SPECIFIED IN THE INDENTURE.

 

A-2

 

SIRIUS INTERNATIONAL GROUP, LTD. 
 Floating Rate Callable Subordinated Notes Due 2047

 

	
No. [        ]
    	
$[               ]
    
	
 
    
	
[Common Code:                   ]
    
	
 
    
	
ISIN:                   
    

 

SIRIUS INTERNATIONAL GROUP, LTD., a company organized under the laws of Bermuda (herein called the “Issuer,” which term includes any successor corporation or other entity under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to [           ], as common depositary for Clearstream Banking société anonyme and Euroclear Bank SA/NV, or its registered assigns, or its registered assigns, the principal sum of [           ] Swedish krona, [as revised by the Schedule of Increases and Decreases in Global Note attached hereto,](2) on [           ], 2047 (the “Scheduled Maturity Date”) and interest thereon as set forth below.

 

Terms used but not defined in this Subordinated Note shall have the meanings assigned to them in the subordinated indenture dated September 22, 2017 (as such may be amended from time to time, the “Indenture”).

 

The Subordinated Notes will bear interest from (and including the Issue Date) to, but excluding, the Final Maturity Date or earlier redemption of the Subordinated Notes as provided in the Indenture, as the case may be, at the Interest Rate, payable quarterly in arrears on each Interest Payment Date to the Persons in whose name the Subordinated Notes were registered at the close of business on the applicable Interest Payment Record Date. On the Final Maturity Date or earlier date of redemption, the Issuer will pay accrued and unpaid interest from the most recent date to which interest has been paid or provided for. If the Final Maturity Date falls on a day that is not a Business Day, the payment of interest and principal will be made on the next succeeding Business Day, and no interest will accrue for the period from and after the Final Maturity Date.

 

The payment of interest on this Subordinated Note is subject to deferral in accordance with Sections 2.02(c) and 2.02(d) of the Indenture. If, as of the Scheduled Maturity Date, the Conditions to Redemption have not been satisfied, final redemption of this Subordinated Note shall be deferred until the Final Maturity Date, pursuant to the redemption provisions of the Indenture.

 

Principal and interest will be payable, and the Subordinated Notes will be transferable or exchangeable, at the office or offices or agency maintained by the Issuer for this purpose, provided, however, that any payment to the Depositary or its nominee shall be paid by wire transfer in immediately available funds in accordance with the wire transfer instruction supplied by the Depositary or its nominee from time to time to the Paying Agent. All payment obligations under the Subordinated Notes will be payable in Swedish krona. Interest on the

 

(2)  Include bracketed language in a Global Note only.

 

A-3

 

Subordinated Notes will be calculable on the basis of a day-count fraction equal to the actual number of days elapsed in the relevant Interest Period divided by 360.

 

Reference is made to the further provisions of this Subordinated Note set forth on the reverse hereof. Such further provisions shall for all purposes have the same effect as though fully set forth at this place.

 

This Subordinated Note shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be construed in accordance with and governed by the laws of said State applicable to contracts entered into and to be performed in such State.

 

This Subordinated Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by the Trustee or a duly authorized Authenticating Agent under the Indenture.

 

[Remainder of page intentionally left blank]

 

A-4

 

IN WITNESS WHEREOF, the Issuer has caused this Subordinated Note to be duly executed.

 

	
 
    	
 
    	
SIRIUS INTERNATIONAL GROUP, LTD.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    

 

	
Dated:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
CERTIFICATE OF AUTHENTICATION:
    	
 
    	
 
    
	
THE BANK OF NEW YORK MELLON, certifies that this is one of the   Subordinated Notes described in the within-named Indenture.
    
	
 
    	
 
    	
 
    

 

	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Authorized Officer
    	
 
    	
 
    

 

A-5

 

[FORM OF REVERSE OF SUBORDINATED NOTE]

 

SIRIUS INTERNATIONAL GROUP, LTD. 
 Floating Rate Callable Subordinated Notes Due 2047

 

This Subordinated Note is one of a duly authorized issue of Subordinated Notes of the Issuer, designated as its Floating Rate Callable Subordinated Notes Due 2047 (the “Subordinated Notes”), initially issued in the aggregate principal amount of SEK 2,750,000,000, all issued or to be issued under and pursuant to the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Issuer and the Holders of the Subordinated Notes, and of the terms upon which the Subordinated Notes are, and are to be, authenticated and delivered. In the event of a conflict between the terms of this Subordinated Note and the terms of the Indenture, the terms of the Indenture shall control. Additional Notes may be issued in an unlimited aggregate principal amount, subject to certain conditions specified in the Indenture.

 

The Subordinated Notes are issuable only in registered form without coupons, in denominations of SEK 2,000,000 and any integral multiples of SEK 1,000,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Subordinated Notes so issued are exchangeable for a like aggregate principal amount of Subordinated Notes of a different authorized denomination, as requested by the Holder surrendering the same.

 

Beginning on September 22, 2022, and provided that the applicable Conditions to Redemption have been satisfied and would continue to be satisfied if the optional redemption payment were made on the Subordinated Notes, the Subordinated Notes may be redeemed, in whole at any time or in part from time to time, at the Issuer’s option, at a Redemption Price equal to accrued and unpaid interest (including Arrears of Interest) on the principal amount of Subordinated Notes being redeemed to, but excluding, the redemption date, and any Additional Amounts thereon, plus 100% of the principal amount of the Subordinated Notes to be redeemed.

 

The Subordinated Notes may be redeemed at the Issuer’s option and sole discretion, in whole but not in part, within 90 days following the occurrence of a Specified Event; provided that, at the time of such Specified Event Redemption, the applicable Conditions to Redemption are satisfied and would continue to be satisfied after the redemption payment is made and, if not so satisfied, such Specified Event Redemption will be deferred until such time as the Conditions to Redemption are satisfied. The Subordinated Notes will be redeemed at a Redemption Price equal to the principal amount thereof, together with accrued and unpaid interest (including Arrears of Interest) on the Subordinated Notes being redeemed to, but excluding, the Redemption Date, and any Additional Amounts thereon.

 

If a Specified Event occurs, the Issuer may, as an alternative to redemption of the Subordinated Notes, at any time, without the consent of any Holder, vary any term or condition of the Subordinated Notes or substitute all (but not less than all) of the Subordinated Notes for other Subordinated Notes, so that the varied Subordinated Notes or the substituted Subordinated Notes, as the case may be, become Qualifying Equivalent Securities.

 

A-6

 

For so long as the Regulatory Group is in breach of any applicable Solvency Capital Requirement or Minimum Capital Requirement, there will be no distributions nor payments made pursuant to the Subordinated Notes, and such payments will be deferred until such time as the applicable breach is rectified.

 

The Subordinated Notes do not have the benefit of any mandatory redemption or sinking fund obligation and are not redeemable at the option of the Holders.

 

The Subordinated Notes are subordinated in right of payment, in the manner and to the extent set forth in the Indenture, to the prior payment in full of all Senior Indebtedness. Each Holder by accepting a Subordinated Note agrees to such subordination and authorizes the Trustee to give it effect.

 

By purchasing the Subordinated Notes, each Holder is deemed to agree and acknowledge that the Subordinated Notes shall be subordinated to the claims of all Senior Creditors on the terms and to the minimum extent necessary under the Applicable Supervisory Regulations (whether they be the Bermuda Group Rules, Solvency II or otherwise) as in effect from time to time so as to permit the Subordinated Notes to qualify as Tier 2 Capital. The subordination provisions above shall be given effect prior to the application of the subordination provisions of Article 10 of the Indenture.

 

If an Issuer Winding-Up Event occurs, the entire principal amount of the Subordinated Notes, together with accrued and unpaid interest (including Arrears of Interest) and any Additional Amounts thereon, will automatically become due and payable without any declaration or other action on the part of the Trustee or any Holder of the Subordinated Notes; provided, however, that the Holders of a majority in aggregate principal amount of the then outstanding Subordinated Notes may rescind an acceleration and its consequences. The right of acceleration only applies upon the occurrence of an Issuer Winding-Up Event. Any failure to pay interest on the Subordinated Notes when due as a result of a Mandatory Deferral Event or to pay principal of the Subordinated Notes when due as a result of any of the applicable Conditions to Redemption not being satisfied shall not constitute an Issuer Winding-Up Event under the Indenture or the Subordinated Notes.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Subordinated Notes at any time by the Issuer and the Trustee with the written consent of the Holders of not less than a majority in principal amount of the Subordinated Notes at the time outstanding. The Indenture also contains, with certain exceptions as therein provided, provisions permitting Holders of not less than a majority in principal amount of the Subordinated Notes at the time outstanding, on behalf of the Holders of all the Subordinated Notes, to waive compliance by the Issuer with certain provisions of the Indenture. Any such consent or waiver by the Holder of this Subordinated Note shall be conclusive and binding upon such Holder and upon all future Holders of this Subordinated Note and of any Subordinated Note issued in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Subordinated Note or such other Subordinated Note. Any amendment or modification to the Indenture or the Subordinated Notes shall require the prior consent of the Applicable Supervisor, if such consent is then required under the Applicable Supervisory Regulations and any amendment or modification

 

A-7

 

made or purported to be made without such consent shall be void. The Issuer, when authorized by Board Resolutions, and the Trustee, at any time and from time to time, may amend or supplement certain provisions relating to the Applicable Supervisor, without the consent of any Holder to the extent determined reasonably necessary to comply with, or satisfy, regulations or requirements of the Applicable Supervisor relating to the Subordinated Notes, as determined by the senior management of the Issuer in good faith.

 

As provided in and subject to the provisions of the Indenture, the Holder of this Subordinated Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless (i) such Holder shall have previously given the Trustee written notice of a continuing Issuer Winding-Up Event, (ii) the Holders of not less than 25% in principal amount of the Subordinated Notes that are outstanding shall have made a written request to the Trustee to institute proceedings in respect of such Issuer Winding-Up Event as Trustee and offered the Trustee indemnity satisfactory to it, (iii) the Trustee shall have failed to institute any such proceeding for 60 days after receipt of such notice, request and offer of indemnity, and (iv) the Trustee shall not have received from the Holders of a majority in principal amount of the Subordinated Notes that are outstanding a direction inconsistent with such written request during such 60-day period. The foregoing shall not apply to any suit instituted by any Holder of this Subordinated Note for the enforcement of any payment of principal hereof or any premium or interest hereon, or any Additional Amounts, on or after the respective due dates expressed herein.

 

Subject to the express terms of the Indenture, no reference herein to the Indenture and no provision of this Subordinated Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Subordinated Note at the times, places and rate, and in the coin or currency, herein prescribed.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Subordinated Note is registrable upon surrender of this Subordinated Note for registration of transfer at the office of the Registrar, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer duly executed by, the Holder thereof or his attorney duly authorized in writing, and thereupon one or more new Subordinated Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to recover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentation of this Subordinated Note for registration of transfer, the Issuer, the Trustee and any Agent of the Issuer or the Trustee may treat the Person in whose name this Subordinated Note is registered as the owner thereof for all purposes, whether or not such Subordinated Note be overdue, and neither the Issuer nor the Trustee or any such agent shall be affected by notice to the contrary.

 

No recourse for the payment of the principal of (and premium, if any on) or interest (including Arrears of Interest) on this Subordinated Note and no recourse under or upon any obligation, covenant or agreement of the Issuer in the Indenture or any indenture supplemental

 

A-8

 

thereto or in any Subordinated Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, officer or director or subsidiary, as such, past, present or future, of the Issuer or any successor entity thereof, either directly or through the Issuer or any successor entity, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of consideration for the issue hereof, expressly waived and released.

 

[This Subordinated Note is a Global Note and is subject to the provisions of the Indenture relating to Global Notes.](3)

 

THE INDENTURE (OTHER THAN Section 4.05 AND Article 11 OF THE INDENTURE) AND EACH SUBORDINATED NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW OR ANY SUCCESSOR TO SUCH STATUTE) WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS OF SUCH STATE. Section 4.05 AND Article 11 OF THE INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF BERMUDA (OR IN THE EVENT THAT THE APPLICABLE SUPERVISOR IS BASED IN A JURISDICTION OTHER THAN BERMUDA, UNDER THE LAWS OF THAT JURISDICTION). EXCEPT THAT THE RIGHT OF THE TRUSTEE TO RECEIVE ITS FEES, EXPENSES AND INDEMNIFICATION PURSUANT TO Section 7.05, AND ITS LIEN PROVIDED FOR IN SUCH SECTION, SHALL BE GOVERNED BY THELAWS OF THE STATE OF NEW YORK.

 

(3)  For global notes only.

 

A-9

 

ABBREVIATIONS

 

The following abbreviations, when used in the inscription of the face of this Subordinated Note, shall be construed as though they were written out in full according to applicable laws or regulations:

 

	
TEN COM -as tenants in common
    	
UNIF GIFT MIN ACT
    	
 
    
	
 
    	
 
    	
Custodian
    
	
 
    	
(Cust)
    	
 
    
	
TEN ENT -as tenants by the entireties
    	
 
    	
 
    
	
 
    	
(Minor)
    	
 
    
	
 
    	
 
    	
 
    
	
JT TEN —as joint tenants with right of survivorship and not as   tenants in common
    	
Uniform Gifts to Minors Act
    	
 
    
	
 
    	
 
    	
(State)
    

 

Additional abbreviations may also be used 
 though not in the above list.

 

A-10

 

SCHEDULE OF INCREASES AND DECREASES IN GLOBAL NOTE(4)

 

SIRIUS INTERNATIONAL GROUP, LTD. 
 Floating Rate Callable Subordinated Notes Due 2047

 

The initial principal amount of this Global Note is SEK [        ]. The following increases or decreases in this Global Note have been made:

 

	
Date
    	
 
    	
Amount of decrease
   in principal amount
   of this Global Note
    	
 
    	
Amount of increase
   in principal amount
   of this Global Note
    	
 
    	
Principal amount of
   this Global Note
   following such
   decrease or increase
    	
 
    	
Signature of
   authorized
   signatory of
   Registrar
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

(4)  For Global Notes only.

 

A-11Exhibit 10.15

 

EXECUTION VERSION

 

	
 
    	
Published CUSIP Number:
    	
G8200KAA7
    
	
 
    	
Revolving Credit CUSIP Number:
    	
G8200KAB5
    

 

$300,000,000

 

CREDIT AGREEMENT

 

dated as of February 8, 2018,

 

by and among

 

SIRIUS INTERNATIONAL INSURANCE GROUP, LTD.

as Parent,

 

SIRIUS INTERNATIONAL GROUP, LTD.

as Borrower,

 

THE OTHER SUBSIDIARIES OF BORROWER FROM TIME TO TIME PARTY HERETO,

as Account Parties,

 

THE LENDERS FROM TIME TO TIME PARTY HERETO,

as Lenders

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

as Administrative Agent,

L/C Agent

and Fronting Bank

 

WELLS FARGO SECURITIES, LLC

and

JPMORGAN CHASE BANK, N.A.

as Joint Lead Arrangers and Joint Bookrunners

 

and

 

JPMORGAN CHASE BANK, N.A.

as Syndication Agent

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I.
    	
DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
SECTION 1.1.
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
SECTION 1.2.
    	
Other Definitions and   Provisions
    	
28
    
	
 
    	
 
    	
 
    
	
SECTION 1.3.
    	
Accounting Terms
    	
28
    
	
 
    	
 
    	
 
    
	
SECTION 1.4.
    	
Rounding
    	
29
    
	
 
    	
 
    	
 
    
	
SECTION 1.5.
    	
References to Agreement   and Laws
    	
29
    
	
 
    	
 
    	
 
    
	
SECTION 1.6.
    	
Times of Day
    	
29
    
	
 
    	
 
    	
 
    
	
SECTION 1.7.
    	
Letter of Credit   Amounts
    	
30
    
	
 
    	
 
    	
 
    
	
SECTION 1.8.
    	
Exchange Rate   Fluctuations
    	
30
    
	
 
    	
 
    	
 
    
	
ARTICLE II.
    	
REVOLVING CREDIT   FACILITY
    	
30
    
	
 
    	
 
    	
 
    
	
SECTION 2.1.
    	
Revolving Credit Loans
    	
30
    
	
 
    	
 
    	
 
    
	
SECTION 2.2.
    	
Swingline Loans
    	
30
    
	
 
    	
 
    	
 
    
	
SECTION 2.3.
    	
Procedure for Advances   of Revolving Credit Loans and Swingline Loans
    	
32
    
	
 
    	
 
    	
 
    
	
SECTION 2.4.
    	
Repayment and   Prepayment of Loans
    	
34
    
	
 
    	
 
    	
 
    
	
SECTION 2.5.
    	
Voluntary Reduction of   the Commitments
    	
35
    
	
 
    	
 
    	
 
    
	
SECTION 2.6.
    	
Termination of   Revolving Credit Facility
    	
35
    
	
 
    	
 
    	
 
    
	
ARTICLE III.
    	
LETTER OF CREDIT   FACILITY
    	
35
    
	
 
    	
 
    	
 
    
	
SECTION 3.1.
    	
Syndicated Letters of   Credit
    	
35
    
	
 
    	
 
    	
 
    
	
SECTION 3.2.
    	
Participated Letters of   Credit
    	
38
    
	
 
    	
 
    	
 
    
	
SECTION 3.3.
    	
Expiry Date of Letters   of Credit
    	
40
    
	
 
    	
 
    	
 
    
	
SECTION 3.4.
    	
Obligations Absolute
    	
41
    
	
 
    	
 
    	
 
    
	
SECTION 3.5.
    	
Interest
    	
42
    
	
 
    	
 
    	
 
    
	
SECTION 3.6.
    	
Cash Collateralization   of Letters of Credit
    	
43
    
	
 
    	
 
    	
 
    
	
SECTION 3.7.
    	
Use of Letters of   Credit
    	
44
    
	
 
    	
 
    	
 
    
	
SECTION 3.8.
    	
The Fronting Bank and   L/C Agent
    	
44
    
	
 
    	
 
    	
 
    
	
SECTION 3.9.
    	
Letter of Credit Fees   and Other Charges
    	
44
    
	
 
    	
 
    	
 
    
	
SECTION 3.10.
    	
Designation of   Additional Account Parties
    	
45
    
	
 
    	
 
    	
 
    
	
ARTICLE IV.
    	
GENERAL LOAN PROVISIONS
    	
46
    
	
 
    	
 
    	
 
    
	
SECTION 4.1.
    	
Interest
    	
46
    
	
 
    	
 
    	
 
    
	
SECTION 4.2.
    	
Notice and Manner of   Conversion or Continuation of Loans
    	
47
    
				

 

i

 

	
SECTION 4.3.
    	
Fees
    	
48
    
	
 
    	
 
    	
 
    
	
SECTION 4.4.
    	
Manner of Payment
    	
48
    
	
 
    	
 
    	
 
    
	
SECTION 4.5.
    	
Evidence of   Indebtedness
    	
49
    
	
 
    	
 
    	
 
    
	
SECTION 4.6.
    	
Sharing of Payments by   Lenders
    	
49
    
	
 
    	
 
    	
 
    
	
SECTION 4.7.
    	
Administrative Agent’s   Clawback
    	
50
    
	
 
    	
 
    	
 
    
	
SECTION 4.8.
    	
Changed Circumstances
    	
51
    
	
 
    	
 
    	
 
    
	
SECTION 4.9.
    	
Indemnity
    	
52
    
	
 
    	
 
    	
 
    
	
SECTION 4.10.
    	
Increased Costs
    	
52
    
	
 
    	
 
    	
 
    
	
SECTION 4.11.
    	
Taxes
    	
54
    
	
 
    	
 
    	
 
    
	
SECTION 4.12.
    	
Mitigation Obligations;   Replacement of Lenders
    	
58
    
	
 
    	
 
    	
 
    
	
SECTION 4.13.
    	
Increase in Commitments
    	
59
    
	
 
    	
 
    	
 
    
	
SECTION 4.14.
    	
Cash Collateral
    	
61
    
	
 
    	
 
    	
 
    
	
SECTION 4.15.
    	
Defaulting Lenders
    	
61
    
	
 
    	
 
    	
 
    
	
SECTION 4.16.
    	
Provisions Relating to   NAIC Qualified Lenders
    	
64
    
	
 
    	
 
    	
 
    
	
ARTICLE V.
    	
CONDITIONS OF CLOSING   AND ISSUANCE
    	
65
    
	
 
    	
 
    	
 
    
	
SECTION 5.1.
    	
Conditions to Closing   and Initial Credit Extensions
    	
65
    
	
 
    	
 
    	
 
    
	
SECTION 5.2.
    	
Conditions Precedent to   all Credit Extensions
    	
67
    
	
 
    	
 
    	
 
    
	
ARTICLE VI.
    	
REPRESENTATIONS AND   WARRANTIES OF THE CREDIT PARTIES
    	
69
    
	
 
    	
 
    	
 
    
	
SECTION 6.1.
    	
Organization; Power; Qualification
    	
69
    
	
 
    	
 
    	
 
    
	
SECTION 6.2.
    	
Ownership
    	
69
    
	
 
    	
 
    	
 
    
	
SECTION 6.3.
    	
Authorization;   Enforceability
    	
69
    
	
 
    	
 
    	
 
    
	
SECTION 6.4.
    	
Compliance of   Agreement, Loan Documents and Credit Extensions with Laws, Etc.
    	
70
    
	
 
    	
 
    	
 
    
	
SECTION 6.5.
    	
Compliance with Law;   Governmental Approvals
    	
70
    
	
 
    	
 
    	
 
    
	
SECTION 6.6.
    	
Tax Returns and   Payments
    	
70
    
	
 
    	
 
    	
 
    
	
SECTION 6.7.
    	
Intellectual Property   Matters
    	
70
    
	
 
    	
 
    	
 
    
	
SECTION 6.8.
    	
Environmental Matters
    	
71
    
	
 
    	
 
    	
 
    
	
SECTION 6.9.
    	
Employee Benefit   Matters
    	
71
    
	
 
    	
 
    	
 
    
	
SECTION 6.10.
    	
Margin Stock
    	
71
    
	
 
    	
 
    	
 
    
	
SECTION 6.11.
    	
Government Regulation
    	
72
    
	
 
    	
 
    	
 
    
	
SECTION 6.12.
    	
Financial Statements
    	
72
    
	
 
    	
 
    	
 
    
	
SECTION 6.13.
    	
No Material Adverse   Change
    	
72
    
	
 
    	
 
    	
 
    
	
SECTION 6.14.
    	
Solvency
    	
72
    
	
 
    	
 
    	
 
    
	
SECTION 6.15.
    	
Ownership of Properties
    	
72
    
	
 
    	
 
    	
 
    
	
SECTION 6.16.
    	
Insurance Licenses
    	
72
    
				

 

ii

 

	
SECTION 6.17.
    	
Litigation
    	
73
    
	
 
    	
 
    	
 
    
	
SECTION 6.18.
    	
Anti-Corruption Laws;   Anti-Money Laundering Laws and Sanctions
    	
73
    
	
 
    	
 
    	
 
    
	
SECTION 6.19.
    	
Disclosure
    	
73
    
	
 
    	
 
    	
 
    
	
ARTICLE VII.
    	
AFFIRMATIVE COVENANTS
    	
74
    
	
 
    	
 
    	
 
    
	
SECTION 7.1.
    	
Financial Statements
    	
74
    
	
 
    	
 
    	
 
    
	
SECTION 7.2.
    	
Certificates; Other   Reports
    	
75
    
	
 
    	
 
    	
 
    
	
SECTION 7.3.
    	
Notice of Litigation   and Other Matters
    	
76
    
	
 
    	
 
    	
 
    
	
SECTION 7.4.
    	
Preservation of   Corporate Existence and Related Matters
    	
77
    
	
 
    	
 
    	
 
    
	
SECTION 7.5.
    	
Maintenance of Property   and Licenses
    	
77
    
	
 
    	
 
    	
 
    
	
SECTION 7.6.
    	
Insurance
    	
77
    
	
 
    	
 
    	
 
    
	
SECTION 7.7.
    	
Payment of Taxes and   Other Obligations
    	
77
    
	
 
    	
 
    	
 
    
	
SECTION 7.8.
    	
Compliance with Laws   and Approvals
    	
78
    
	
 
    	
 
    	
 
    
	
SECTION 7.9.
    	
Environmental Laws
    	
78
    
	
 
    	
 
    	
 
    
	
SECTION 7.10.
    	
Compliance with ERISA
    	
78
    
	
 
    	
 
    	
 
    
	
SECTION 7.11.
    	
Maintenance of Books   and Records; Inspection
    	
78
    
	
 
    	
 
    	
 
    
	
SECTION 7.12.
    	
Use of Proceeds
    	
79
    
	
 
    	
 
    	
 
    
	
SECTION 7.13.
    	
Compliance with   Anti-Corruption Laws; Anti-Money Laundering Laws and Sanctions
    	
79
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII.
    	
NEGATIVE COVENANTS
    	
79
    
	
 
    	
 
    	
 
    
	
SECTION 8.1.
    	
Indebtedness
    	
79
    
	
 
    	
 
    	
 
    
	
SECTION 8.2.
    	
Liens
    	
81
    
	
 
    	
 
    	
 
    
	
SECTION 8.3.
    	
Investments
    	
83
    
	
 
    	
 
    	
 
    
	
SECTION 8.4.
    	
Fundamental Changes
    	
84
    
	
 
    	
 
    	
 
    
	
SECTION 8.5.
    	
Asset Dispositions
    	
84
    
	
 
    	
 
    	
 
    
	
SECTION 8.6.
    	
Restricted Payments
    	
85
    
	
 
    	
 
    	
 
    
	
SECTION 8.7.
    	
Transactions with   Affiliates
    	
85
    
	
 
    	
 
    	
 
    
	
SECTION 8.8.
    	
Accounting Changes;   Organizational Documents
    	
86
    
	
 
    	
 
    	
 
    
	
SECTION 8.9.
    	
No Further Negative   Pledges; Restrictive Agreements
    	
86
    
	
 
    	
 
    	
 
    
	
SECTION 8.10.
    	
Nature of Business
    	
87
    
	
 
    	
 
    	
 
    
	
SECTION 8.11.
    	
Financial Strength   Rating
    	
87
    
	
 
    	
 
    	
 
    
	
SECTION 8.12.
    	
Financial Covenants
    	
87
    
	
 
    	
 
    	
 
    
	
ARTICLE IX.
    	
DEFAULT AND REMEDIES
    	
89
    
	
 
    	
 
    	
 
    
	
SECTION 9.1.
    	
Events of Default
    	
89
    
	
 
    	
 
    	
 
    
	
SECTION 9.2.
    	
Remedies
    	
91
    
	
 
    	
 
    	
 
    
	
SECTION 9.3.
    	
Rights and Remedies   Cumulative; Non-Waiver; etc.
    	
92
    
				

 

iii

 

	
SECTION 9.4.
    	
Crediting of Payments   and Proceeds
    	
92
    
	
 
    	
 
    	
 
    
	
SECTION 9.5.
    	
Administrative Agent   May File Proofs of Claim
    	
93
    
	
 
    	
 
    	
 
    
	
ARTICLE X.
    	
THE ADMINISTRATIVE   AGENT
    	
94
    
	
 
    	
 
    	
 
    
	
SECTION 10.1.
    	
Appointment and   Authority
    	
94
    
	
 
    	
 
    	
 
    
	
SECTION 10.2.
    	
Rights as a Lender
    	
94
    
	
 
    	
 
    	
 
    
	
SECTION 10.3.
    	
Exculpatory Provisions
    	
94
    
	
 
    	
 
    	
 
    
	
SECTION 10.4.
    	
Reliance by the   Administrative Agent
    	
95
    
	
 
    	
 
    	
 
    
	
SECTION 10.5.
    	
Delegation of Duties
    	
96
    
	
 
    	
 
    	
 
    
	
SECTION 10.6.
    	
Resignation of Administrative   Agent
    	
96
    
	
 
    	
 
    	
 
    
	
SECTION 10.7.
    	
Non-Reliance on   Administrative Agent and Other Lenders
    	
98
    
	
 
    	
 
    	
 
    
	
SECTION 10.8.
    	
No Other Duties, Etc.
    	
98
    
	
 
    	
 
    	
 
    
	
SECTION 10.9.
    	
Lender ERISA   Representations
    	
98
    
	
 
    	
 
    	
 
    
	
ARTICLE XI.
    	
MISCELLANEOUS
    	
100
    
	
 
    	
 
    	
 
    
	
SECTION 11.1.
    	
Notices
    	
100
    
	
 
    	
 
    	
 
    
	
SECTION 11.2.
    	
Amendments, Waivers and   Consents
    	
103
    
	
 
    	
 
    	
 
    
	
SECTION 11.3.
    	
Expenses; Indemnity
    	
104
    
	
 
    	
 
    	
 
    
	
SECTION 11.4.
    	
Right of Setoff
    	
107
    
	
 
    	
 
    	
 
    
	
SECTION 11.5.
    	
Governing Law;   Jurisdiction, Etc.
    	
107
    
	
 
    	
 
    	
 
    
	
SECTION 11.6.
    	
Waiver of Jury Trial
    	
108
    
	
 
    	
 
    	
 
    
	
SECTION 11.7.
    	
Reversal of Payments
    	
109
    
	
 
    	
 
    	
 
    
	
SECTION 11.8.
    	
[Reserved]
    	
109
    
	
 
    	
 
    	
 
    
	
SECTION 11.9.
    	
Successors and Assigns;   Participations
    	
109
    
	
 
    	
 
    	
 
    
	
SECTION 11.10.
    	
Treatment of Certain   Information; Confidentiality
    	
113
    
	
 
    	
 
    	
 
    
	
SECTION 11.11.
    	
Performance of Duties
    	
114
    
	
 
    	
 
    	
 
    
	
SECTION 11.12.
    	
All Powers Coupled with   Interest
    	
114
    
	
 
    	
 
    	
 
    
	
SECTION 11.13.
    	
Survival
    	
115
    
	
 
    	
 
    	
 
    
	
SECTION 11.14.
    	
Titles and Captions
    	
115
    
	
 
    	
 
    	
 
    
	
SECTION 11.15.
    	
Severability of   Provisions
    	
115
    
	
 
    	
 
    	
 
    
	
SECTION 11.16.
    	
Counterparts;   Integration; Effectiveness; Electronic Execution
    	
115
    
	
 
    	
 
    	
 
    
	
SECTION 11.17.
    	
Term of Agreement
    	
116
    
	
 
    	
 
    	
 
    
	
SECTION 11.18.
    	
USA PATRIOT Act;   Anti-Money Laundering Laws
    	
116
    
	
 
    	
 
    	
 
    
	
SECTION 11.19.
    	
Independent Effect of   Covenants
    	
116
    
	
 
    	
 
    	
 
    
	
SECTION 11.20.
    	
No Advisory or   Fiduciary Responsibility
    	
116
    
	
 
    	
 
    	
 
    
	
SECTION 11.21.
    	
Inconsistencies with   Other Documents
    	
117
    
				

 

iv

 

	
SECTION 11.22.
    	
Acknowledgement and   Consent to Bail-In of EEA Financial Institutions
    	
117
    
	
 
    	
 
    	
 
    
	
SECTION 11.23.
    	
Judgment Currency
    	
118
    
	
 
    	
 
    	
 
    
	
ARTICLE XII.
    	
GUARANTY
    	
118
    
	
 
    	
 
    	
 
    
	
SECTION 12.1.
    	
The Guaranty
    	
118
    
	
 
    	
 
    	
 
    
	
SECTION 12.2.
    	
Guaranty Unconditional
    	
119
    
	
 
    	
 
    	
 
    
	
SECTION 12.3.
    	
Discharge Only upon   Payment in Full; Reinstatement in Certain Circumstances
    	
120
    
	
 
    	
 
    	
 
    
	
SECTION 12.4.
    	
Waiver by the Guarantor
    	
120
    
	
 
    	
 
    	
 
    
	
SECTION 12.5.
    	
Subrogation
    	
120
    
	
 
    	
 
    	
 
    
	
SECTION 12.6.
    	
Stay of Acceleration
    	
121
    
	
 
    	
 
    	
 
    
	
SECTION 12.7.
    	
Continuing Guaranty;   Assignments
    	
121
    
	
 
    	
 
    	
 
    
	
SECTION 12.8.
    	
Subordination of Other   Obligations
    	
121
    
				

 

v

 

	
EXHIBITS
    	
 
    
	
Exhibit A-1
    	
- Form of Revolving Credit Note
    
	
Exhibit A-2
    	
- Form of Swingline Note
    
	
Exhibit B
    	
- Form of Notice of Borrowing
    
	
Exhibit C
    	
- Form of Notice of Account Designation
    
	
Exhibit D
    	
- Form of Syndicated Letter of Credit
    
	
Exhibit E
    	
- Form of Notice of Conversion/Continuation
    
	
Exhibit F
    	
- Form of Officer’s Compliance Certificate
    
	
Exhibit G
    	
- Form of Assignment and Assumption
    
	
Exhibit H-1
    	
- Form of U.S. Tax Compliance Certificate (Non-Partnership   Foreign Lenders)
    
	
Exhibit H-2
    	
- Form of U.S. Tax Compliance Certificate (Non-Partnership   Foreign Participants)
    
	
Exhibit H-3
    	
- Form of U.S. Tax Compliance Certificate (Foreign   Participant Partnerships)
    
	
Exhibit H-4
    	
- Form of U.S. Tax Compliance Certificate (Foreign Lender   Partnerships)
    
	
Exhibit I
    	
- Form of Fronting Agreement
    
	
 
    	
 
    
	
SCHEDULES
    	
 
    
	
Schedule 1.1
    	
- Commitments and Commitment Percentages
    
	
Schedule 6.2
    	
- Subsidiaries and Capitalization
    
	
Schedule 8.1
    	
- Existing Indebtedness
    
	
Schedule 8.2
    	
- Existing Liens
    
	
Schedule 8.3
    	
- Existing Investments
    
	
Schedule 8.5
    	
- Asset Dispositions
    

 

vi

 

CREDIT AGREEMENT, dated as of February 8, 2018, by and among SIRIUS INTERNATIONAL INSURANCE GROUP, LTD., an exempted company organized under the laws of Bermuda, SIRIUS INTERNATIONAL HOLDINGS LTD., an exempted company organized under the laws of Bermuda, SIRIUS INTERNATIONAL GROUP, LTD., an exempted company organized under the laws of Bermuda, the Subsidiaries of the Borrower from time to time party hereto as Account Parties, the lenders who are party to this Agreement and the lenders who may become a party to this Agreement pursuant to the terms hereof, as Lenders, and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as Administrative Agent for the Lenders.

 

STATEMENT OF PURPOSE

 

The Borrower has requested, and subject to the terms and conditions set forth in this Agreement, the Administrative Agent and the Lenders have agreed to extend, certain credit facilities to the Credit Parties.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, such parties hereby agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

SECTION 1.1.                                          Definitions.  The following terms when used in this Agreement shall have the meanings assigned to them below:

 

“Account Party” means any of the Borrower, Sirius Bermuda Insurance Company Ltd., a company organized under the laws of Bermuda, Sirius International Insurance Corp., a company organized under the laws of Sweden, Sirius America Insurance Company, a New York corporation, Sirius Re Holdings, Inc., a Delaware corporation, and any other Wholly-Owned Subsidiary of the Borrower designated to be an Account Party pursuant to Section 3.10, in each case, with respect to Letters of Credit issued on its account.

 

“Account Party Joinder Agreement” means a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent delivered in connection with Section 3.10.

 

“Accounting Principles Election” has the meaning assigned thereto in Section 1.3(a).

 

“Acquisition” means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which any Credit Party or any of its Subsidiaries (a) acquires any business or all or substantially all of the assets of any Person, or division thereof, whether through purchase of assets, merger, amalgamation or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the Equity Interests of any Person which have ordinary voting power for the election of members of the board of directors or the equivalent governing body (other than Equity Interests having such power only by reason of the happening of a contingency).

 

 

“Administrative Agent” means Wells Fargo, in its capacity as Administrative Agent hereunder, and any successor thereto appointed pursuant to Section 10.6.

 

“Administrative Agent’s Office” means the office of the Administrative Agent specified in or determined in accordance with the provisions of Section 11.1(c).

 

“Administrative Questionnaire” means an administrative questionnaire in a form supplied by the Administrative Agent.

 

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

“Agent Parties” has the meaning assigned thereto in Section 11.1(e)(ii).

 

“Agreement” means this Credit Agreement.

 

“A.M. Best” means A.M. Best Company, Inc.

 

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Parent or any of its Subsidiaries from time to time concerning or relating to bribery or corruption, including, to the extent applicable, the United States Foreign Corrupt Practices Act of 1977 and the rules and regulations thereunder and the U.K. Bribery Act 2010 and the rules and regulations thereunder.

 

“Anti-Money Laundering Laws” means any and all laws, rules and regulations applicable to the Parent or any of its Subsidiaries from time to time concerning or relating to terrorism financing or money laundering, including any applicable provision of the PATRIOT Act and The Currency and Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§ 5311-5330 and 12U.S.C. §§ 1818(s), 1820(b) and 1951-1959).

 

“Applicable Law” means all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses, approvals, interpretations and orders of Governmental Authorities and all orders and decrees of all courts and arbitrators.

 

“Applicable Rate” means, for any day, as to the Commitment Fees and L/C Fees payable hereunder or as to the interest rate margin on any LIBOR Rate Loan or Base Rate Loan, as the case may be, the applicable percentages per annum determined by reference to the Debt Ratings as set forth below:

 

	
Applicable Rate
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Pricing
   Level
    	
 
    	
Debt Ratings
    	
 
    	
Commitment
   Fee
    	
 
    	
LIBOR Rate Loans
   and L/C Fees
    	
 
    	
Base Rate
   Loans
    	
 
    
	
I
    	
 
    	
A-/A- or better
    	
 
    	
0.15
    	
%
    	
1.25
    	
%
    	
0.25
    	
%
    
	
II
    	
 
    	
BBB+/ BBB+
    	
 
    	
0.175
    	
%
    	
1.375
    	
%
    	
0.375
    	
%
    
	
III
    	
 
    	
BBB/ BBB
    	
 
    	
0.225
    	
%
    	
1.50
    	
%
    	
0.50
    	
%
    
	
IV
    	
 
    	
BBB-/ BBB-
    	
 
    	
0.275
    	
%
    	
1.75
    	
%
    	
0.75
    	
%
    
	
V
    	
 
    	
BB+/BB+ or lower
    	
 
    	
0.325
    	
%
    	
2.00
    	
%
    	
1.00
    	
%
    

 

2

 

Initially, commencing on the Closing Date the Applicable Rate shall be determined based upon Pricing Level III.  Notwithstanding anything herein to the contrary:

 

(a)                                 if the Debt Ratings issued by S&P and Fitch differ by one level, then the Pricing Level corresponding to the higher of such Debt Ratings shall apply (with pricing tier I being the highest and pricing tier V being the lowest);

 

(b)                                 if the Debt Ratings issued by S&P and Fitch differ by more than one level, then the Pricing Level corresponding to one level below the higher of the two Debt Ratings shall apply;

 

(c)                                  if only one of S&P or Fitch shall have in effect a Debt Rating, then the Pricing Level shall be determined by reference to the available Debt Rating; and

 

(d)                                 if the Borrower does not have any Debt Rating, pricing tier V shall apply.

 

Each change in the Applicable Rate resulting from a publicly announced change in any Debt Rating after the Closing Date shall be effective during the period commencing on the date of the public announcement thereof and ending on the date immediately preceding the effective date of the next such change.

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

“Arrangers” means, collectively, Wells Fargo Securities and JPMorgan Chase Bank, N.A., in their capacities as the joint lead arrangers and joint bookrunners.

 

“Asset Disposition” means the sale, transfer, license, lease or other disposition of any Property (including any disposition of Equity Interests) by any Credit Party or any Restricted Subsidiary thereof, any merger, amalgamation, consolidation or similar combination of any Credit Party or any Restricted Subsidiary thereof with any Person that is not a Credit Party or a Restricted Subsidiary thereof and any issuance of Equity Interests by any Restricted Subsidiary of the Parent to any Person that is not a Credit Party or any Restricted Subsidiary thereof.

 

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.9), and accepted by the Administrative Agent, in substantially the form attached as Exhibit G or any other form reasonably approved by the Administrative Agent.

 

“Availability Period” means the period from and including the Closing Date to, but not including, the Commitment Termination Date.

 

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

3

 

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

“Bankruptcy Code” means 11 U.S.C. §§ 101 et seq.

 

“Base Rate” means, for any day, the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) on each date of determination, LIBOR for an Interest Period of one month plus 1.00%; each change in the Base Rate shall take effect simultaneously with the corresponding change or changes in the Prime Rate, the Federal Funds Rate or LIBOR (provided that clause (c) shall not be applicable during any period in which LIBOR is unavailable or unascertainable).

 

“Base Rate Loan” means any Loan bearing interest at a rate based upon the Base Rate as provided in Section 4.1(a).

 

“Benefit Plan” means any employee benefit plan, within the meaning of Section 3(3) of ERISA, other than a Multiemployer Plan, which is maintained, funded or administered for the employees of any Credit Party or any ERISA Affiliate.

 

“Borrower” means Sirius International Group, Ltd., a Bermuda exempted company.

 

“Borrowing” means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type and, in the case of LIBOR Rate Loans, having the same Interest Period made by the Lenders or Swingline Loans, as the context may require.

 

“Business Day” means (a) for all purposes other than as set forth in clause (b) below, any day other than a Saturday, Sunday or legal holiday on which banks in Charlotte, North Carolina, Hamilton, Bermuda, Stockholm, Sweden and New York, New York, are open for the conduct of their commercial banking business and (b) with respect to all notices and determinations in connection with, and payments of principal and interest on, any LIBOR Rate Loan, or any Base Rate Loan as to which the interest rate is determined by reference to LIBOR, any day that is a Business Day described in clause (a) and that is also a London Banking Day.

 

“Cash Collateral Account” has the meaning assigned thereto in Section 3.6(a).

 

“Cash Collateralize” means, to pledge and deposit with, or deliver to, the Administrative Agent, for the benefit of the Lenders as collateral for Letter of Credit Exposure or obligations of the Lenders to fund participations in respect of Participated Letters of Credit, cash, deposit account balances or Cash Equivalents pursuant to Section 3.6.  “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

 

“Cash Equivalents” means, collectively:

 

(a)                                 marketable direct obligations issued or unconditionally guaranteed by the United States or any agency thereof maturing within one hundred eighty (180) days from the date of acquisition thereof,

 

4

 

(b)                                 marketable direct obligations issued by United States government sponsored enterprise or any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one hundred eighty (180) days from the date of acquisition thereof and currently having, as of the date of acquisition thereof, one of the two highest ratings obtainable from either S&P or Moody’s Investors Service, Inc.,

 

(c)                                  certificates of deposit maturing no more than one hundred eighty (180) days from the date of acquisition thereof issued by commercial banks incorporated under the laws of the United States, each having combined capital, surplus and undivided profits of not less than $500,000,000 and having a rating of “A” or better by a nationally recognized rating agency,

 

(d)                                 time deposits maturing no more than thirty (30) days from the date of creation thereof with commercial banks or savings banks or savings and loan associations each having membership either in the FDIC or the deposits of which are insured by the FDIC and in amounts not exceeding the maximum amounts of insurance thereunder,

 

(e)                                  shares of any money market mutual fund that has substantially all of its assets invested continuously in the types of investments referred to in clauses (a) through (d) above, or

 

(f)                                   in the case of any Credit Party or any Subsidiary that is organized, incorporated or conducts any material business operations in any jurisdiction other than the United States of America, other short-term investments similar to those listed in clauses (a) through (e) above, of a type, tenor and quality analogous to the foregoing with banks and funds organized in such other jurisdictions.

 

“Change in Control” means an event or series of events by which:

 

(a)                                 prior to an IPO, and after an IPO if the IPO Entity is the Parent, the Parent shall fail to beneficially own, directly or indirectly, more than fifty percent (50%) of (i) the economic interest of the Borrower or (ii) the voting power of Borrower entitled to vote in the election of members of the board of directors (or equivalent governing body) of the Borrower; or

 

(b)                                 prior to an IPO, the Permitted Investors shall collectively fail to beneficially own, directly or indirectly, more than fifty percent (50%) of (i) the economic interest of the Parent or (ii) the voting power of the Parent entitled to vote in the election of members of the board of directors (or equivalent governing body) of the Parent; or

 

(c)                                  after an IPO, (i) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person or its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) other than the Permitted Investors becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a “person” or “group” shall be deemed to have “beneficial ownership” of all Equity Interests that such “person” or “group” has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of more than thirty five percent (35%) of the Equity Interests of the IPO Entity entitled to vote in the election of members of the board of directors (or equivalent governing body) of the IPO Entity or (ii) a majority of the

 

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members of the board of directors (or other equivalent governing body) of the IPO Entity shall not constitute Continuing Directors; or

 

(d)                                 there shall have occurred under any indenture or other instrument evidencing any Indebtedness in excess of $50,000,000 any “change in control” or similar provision (as set forth in the indenture, agreement or other evidence of such Indebtedness) obligating the Parent or any of its Subsidiaries to repurchase, redeem or repay all or any part of the Indebtedness or Equity Interests provided for therein.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following:  (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, implemented or issued.

 

“Closing Date” means the date of this Agreement.

 

“Code” means the Internal Revenue Code of 1986, and the rules and regulations promulgated thereunder.

 

“Commitment” means, as to any Lender, the obligation of such Lender to make Revolving Credit Loans, to issue Syndicated Letters of Credit and to purchase participations in Participated Letters of Credit and Swingline Loans for the account of the applicable Credit Party hereunder in an aggregate principal amount at any time outstanding not to exceed the amount set forth opposite such Lender’s name on the Register, as such amount may be modified at any time or from time to time pursuant to the terms hereof.  The initial Commitment of each Lender is set forth opposite the name of such Lender on Schedule 1.1.

 

“Commitment Fee” has the meaning assigned thereto in Section 4.3(i).

 

“Commitment Percentage” means, with respect to any Lender at any time, the percentage of the total Commitments of all the Lenders represented by such Lender’s Commitment, but subject to the provisions of Section 4.15.  If the Commitments have terminated or expired, the Commitment Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments.  The Commitment Percentage of each Lender on the Closing Date is set forth opposite the name of such Lender on Schedule 1.1.

 

“Commitment Termination Date” means the earliest to occur of (a) February 8, 2021, (b) the date of termination of the entire Commitments by the Credit Parties pursuant to Section 2.5, and (c) the date of termination of the Commitments pursuant to Section 9.2(a).

 

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“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).

 

“Conditional Common Equity” means convertible preferred equity issued by the Borrower or any of its Subsidiaries which will convert to common equity of the Borrower or any of its Subsidiaries upon shareholder approval (provided that such shareholder approval is obtained within the period required by the terms thereof).

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

 

“Consolidated Net Worth” means, at any time, the sum of all amounts that would be included on a consolidated balance sheet of the Borrower and its Restricted Subsidiaries under shareholders’ equity at such date, plus Deferred Tax Liability on Safety Reserve, but excluding:

 

(a)                                 the accumulated net unrealized investment gain (or loss) on investments, including net unrealized foreign currency gain (or loss) on investment, less applicable related income tax provisions (or plus applicable related income tax benefits), in each case, as of September 30, 2017;

 

(b)                                 the net unrealized investment gain (or loss), including net unrealized foreign currency gain (or loss) on investment, less applicable related income tax provisions (or plus applicable related income tax benefits), in each case, included in the consolidated comprehensive income (or loss) subsequent to September 30, 2017;

 

(c)                                  the equity in the net unrealized investment gain (or loss), less applicable related income tax provisions (or plus applicable related income tax benefits), in each case, from investments in unconsolidated Affiliates; and

 

(d)                                 any non-controlling interest.

 

“Consolidated Tangible Net Worth” has the meaning assigned thereto in Section 8.12(b).

 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

 

“Credit Exposure” means, with respect to any Lender at any time, the sum of (i) the aggregate principal amount of all Revolving Loans made by such Lender that are outstanding at such time, (ii) such Lender’s Letter of Credit Exposure at such time and (iii) such Lender’s Swingline Exposure at such time.

 

“Credit Extension” means (a) a Borrowing or (b) an issuance of a Letter of Credit.

 

“Credit Facility” means, collectively, the Revolving Credit Facility, the Swingline Facility and the L/C Facility.

 

“Credit Parties” means, collectively, the Borrower, the Guarantors and the Account Parties.

 

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“Debt Rating” means a rating as determined by S&P and Fitch of the Borrower’s non-credit-enhanced, senior unsecured long-term indebtedness.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.

 

“Default” means any event which with the passage of time, the giving of notice or any other condition, would constitute an Event of Default.

 

“Defaulting Lender” means, subject to Section 4.15(c), any Lender that (a) has failed to (i) fund all or any portion of the Revolving Credit Loans required to be funded by it hereunder within two Business Days of the date such Loans or participations were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s good faith determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, the L/C Agent, the Fronting Bank, the Swingline Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swingline Loans) within two Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent, the L/C Agent, the Fronting Bank, or the Swingline Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan or issue a Letter of Credit hereunder and states that such position is based on such Lender’s good faith determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the FDIC or any other state or federal regulatory authority acting in such a capacity or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject

 

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to Section 4.15(c)) upon delivery of written notice of such determination to the Borrower, the Fronting Bank, the L/C Agent, the Swingline Lender and each Lender.

 

“Deferred Tax Liability on Safety Reserve” means the amount included in solvency capital under Swedish statutory requirements equal to the deferred tax liability on the safety reserve of any Subsidiary of the Borrower formed under the laws of Sweden, which is the untaxed reserve into which, subject to certain limitations under Swedish law, such Subsidiary is permitted to transfer pre-tax income.

 

“Dollars” or “$” means, unless otherwise qualified, dollars in lawful currency of the United States.

 

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

 

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 11.9 (subject to such consents, if any, as may be required under Section 11.9).  Notwithstanding the foregoing, unless otherwise agreed by the Parent, a Person must be a NAIC Qualified Lender to qualify as an Eligible Assignee.

 

“Employee Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

 

“Environmental Claims” means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, accusations, allegations, notices of noncompliance or violation, investigations (other than internal reports prepared by any Person in the ordinary course of business and not in response to any third party action or request of any kind) or proceedings relating in any way to any actual or alleged violation of or liability under any Environmental Law or relating to any permit issued, or any approval given, under any such Environmental Law, including, without limitation, any and all claims by Governmental Authorities for enforcement, cleanup, removal, response, remedial or other actions or damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Materials or arising from alleged injury or threat of injury to public health or the environment.

 

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“Environmental Laws” means any and all federal, foreign, state, provincial and local laws, statutes, ordinances, codes, rules, standards and regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities, relating to the protection of public health or the environment, including, but not limited to, requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of hazardous materials.

 

“Equity Interests” means (a) in the case of a corporation, capital stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (c) in the case of a partnership, partnership interests (whether general or limited), (d) in the case of a limited liability company, membership interests, (e) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person and (f) any and all warrants, rights or options to purchase any of the foregoing.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, and the rules and regulations thereunder.

 

“ERISA Affiliate” means any Person who together with any Credit Party or any of its Subsidiaries is treated as a single employer within the meaning of Section 414(b) or (c) of the Code or Section 4001(b) of ERISA or, solely for purposes of Section 412 of the Code, Section 414(m) or (o) of the Code.

 

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor thereto), as in effect from time to time.

 

“Eurodollar Reserve Percentage” means, for any day, the percentage which is in effect for such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any basic, supplemental or emergency reserves) in respect of eurocurrency liabilities (as defined in Regulation D) or any similar category of liabilities for a member bank of the Federal Reserve System in New York City.

 

“Event of Default” means any of the events specified in Section 9.1; provided that any requirement for passage of time, giving of notice, or any other condition, has been satisfied.

 

“Evergreen Letter of Credit” has the meaning assigned thereto in Section 3.3.

 

“Exchange Act” means the Securities Exchange Act of 1934.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having an office or fixed place of business or, in the case of any Lender, its applicable Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, United States federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable

 

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interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in a Loan or Commitment (other than pursuant to an assignment request by the Parent under Section 4.12(b)) or (ii) such Lender changes its Lending Office, except in each case to the extent that, pursuant to Section 4.11, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such Recipient’s failure to comply with Section 4.11(g) and (d) any United States federal withholding Taxes imposed under FATCA.

 

“FATCA” means (a) Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, and any agreements entered into pursuant to Section 1471(b)(1) of the Code, (b) any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the United States and any other jurisdiction with the purpose (in either case) of facilitating the implementation of (a) above, or (c) any agreement pursuant to the implementation of paragraphs (a) or (b) above with the IRS, the United States government or any governmental or taxation authority in the United States.

 

“FDIC” means the Federal Deposit Insurance Corporation.

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that if such rate is not so published for any day which is a Business Day, the Federal Funds Rate for such day shall be the average of the quotation for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by the Administrative Agent.  Notwithstanding the foregoing, if the Federal Funds Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“Fee Letters” means (a) the Wells Fargo Fee Letter and (b) the separate fee letter agreement dated January 12, 2018 among the Parent and JPMorgan Chase Bank, N.A.

 

“Final Expiry Date” means the date when the Final Maturity Date has occurred, all Letters of Credit have expired or terminated and all Obligations owing hereunder and in the other Loan Documents have been paid in full.

 

“Final Maturity Date” means the first anniversary of the Commitment Termination Date.

 

“Financial Strength Rating” means, as to any Person, the rating that has been most recently announced by A.M. Best as the “financial strength rating” of such Person.

 

“Fiscal Year” means the fiscal year of the Parent and its Subsidiaries.

 

“Fitch” means Fitch Ratings Ltd. and any successor or successors thereto.

 

“Foreign Lender” means a Lender that is resident or organized under the laws of a jurisdiction other than the United States, each State thereof or the District of Columbia.

 

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“Foreign Pension Plan” means any plan, fund (including any superannuation fund) or other similar program established or maintained outside the United States of America by the Parent or any one or more of its Subsidiaries primarily for the benefit of employees of the Parent or such Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code.

 

“Fronting Agreement” means an agreement between any Non-NAIC Qualified Lender and any Non-NAIC Fronting Bank that such Non-NAIC Fronting Bank will itself honor the obligations of such Non-NAIC Bank in respect of a draft complying with terms of a Syndicated Letter of Credit as if, and to the extent, such Non-NAIC Fronting Bank were the Issuing Lender originally named on such Syndicated Letter of Credit in substantially the form of Exhibit I.

 

“Fronting Bank” means, as applicable, (i) with respect to Participated Letters of Credit, Wells Fargo and (ii) with respect to Syndicated Letters of Credit, any Non-NAIC Fronting Bank.

 

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to any Issuing Lender, such Defaulting Lender’s Commitment Percentage of the outstanding L/C Obligations with respect to Letters of Credit issued by such Issuing Lender, other than such L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof and (b) with respect to the Swingline Lender, such Defaulting Lender’s Commitment Percentage of outstanding Swingline Loans other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

 

“Fronting Obligations” means, at any time with respect to Wells Fargo, the sum of (a) the aggregate Participated Letter of Credit Exposure of the Lenders plus (b) the Syndicated Letter of Credit Exposure attributable to any Non-NAIC Qualified Lender for which Wells Fargo acts as Fronting Bank pursuant to Section 4.16(b).

 

“Fronting Sublimit” means the lesser of (a) $62,500,000 and (b) the aggregate Commitments as such amount may be reduced pursuant to the terms hereof, it being understood that the Fronting Sublimit is part of, and not in addition to, the aggregate Commitments.

 

“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course of its activities.

 

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied; provided that at any time after the Accounting Principles Election, all references to GAAP hereunder shall be deemed to be references to IFRS or UK

 

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GAAP, as applicable, mutatis mutandis, except to the extent such terms and data relate to periods prior to the effectiveness of the Accounting Principles Election.

 

“Governmental Approvals” means all authorizations, consents, approvals, permits, licenses and exemptions of, and all registrations and filings with or issued by, any Governmental Authorities.

 

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supranational bodies such as the European Union or the European Central Bank).

 

“Group” means the Borrower and its Subsidiaries.

 

“Guarantee Obligations” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part) or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (limited, in the case of this clause (b), to the lesser of (i) the principal amount of the obligations secured by such Lien and (ii) the fair market value (as determined by such Person in good faith) of the assets subject to such Lien); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business.  The amount of any Guarantee Obligation shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.  The term “Guarantee” as a verb has a corresponding meaning.

 

“Guarantor” means the Parent, the Borrower (with respect to the Obligations of the other Account Parties) and Sirius International Holdings Ltd.

 

“Guaranty” means the undertakings by the Guarantors under Article XII.

 

“Hedge Agreement” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward

 

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commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement.

 

“Hedge Termination Value” means, in respect of any one or more Hedge Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Hedge Agreements, (a) for any date on or after the date such Hedge Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedge Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedge Agreements (which may include a Lender or any Affiliate of a Lender).

 

“IFRS” means the International Financial Reporting Standards as issued by the International Accounting Standards Board, which are in effect from time to time.

 

“Increase Effective Date” has the meaning assigned thereto in Section 4.13(d).

 

“Indebtedness” means, with respect to any Person at any date and without duplication, the sum of the following:

 

(a)                                 all obligations of such Person for borrowed money;

 

(b)                                 all obligations of such Person for the deferred purchase price of Property or services (other than trade and similar payables incurred or accrued in the ordinary course of such Person’s business and contingent acquisition consideration that is not yet overdue for more than 30 days after the date fixed for payment thereof);

 

(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 (limited, to the extent 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, to the fair market value (as determined by such Person in good faith) 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, bank guarantees, surety bonds or similar facilities,

 

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provided that indebtedness arising pursuant to any standby or documentary letter of credit (whether issued pursuant to this agreement or otherwise) shall not be included as Indebtedness unless and until such letter of credit is drawn by its beneficiary;

 

(g)                                  all obligations of such Person, contingent or otherwise, to purchase, redeem, retire, defease or otherwise acquire for value any Equity Interests of such person;

 

(h)                                 all Guarantee Obligations of such person in respect of any of the foregoing;

 

(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)                                    all obligations of such person in respect of Hedge Agreements.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Credit Party under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.

 

“Indemnitee” has the meaning assigned thereto in Section 11.3(b).

 

“Information” has the meaning assigned thereto in Section 11.10.

 

“Information Materials” means any information memoranda or other marketing materials provided to the Lenders generally in connection with the primary syndication of the Credit Facilities hereunder, including, for the avoidance of doubt, the Confidential Information Memorandum with respect to the Credit Facilities dated as of January 2018.

 

“Insurance Regulatory Authority” means, with respect to any Subsidiary of the Parent, the insurance department or similar Governmental Authority charged with regulating insurance companies or insurance holding companies, in its jurisdiction of domicile and, to the extent that it has regulatory authority over such Insurance Subsidiary, in each other jurisdiction in which such Insurance Subsidiary conducts business or is licensed to conduct business.

 

“Insurance Subsidiary” means any Subsidiary of the Parent the ability of which to pay dividends is regulated by an Insurance Regulatory Authority or that is otherwise required to be regulated thereby in accordance with the applicable law of its jurisdiction of domicile.

 

“Interest Period” means, as to each LIBOR Rate Loan, the period commencing on the date such LIBOR Rate Loan is disbursed or converted to or continued as a LIBOR Rate Loan and ending on the date one (1), two (2), three (3), or six (6) months or, if agreed by all of the Lenders twelve (12) months thereafter, in each case as selected by the Borrower in its Notice of Borrowing or Notice of Conversion/Continuation and subject to availability; provided that:

 

(i)                                     the Interest Period shall commence on the date of advance of or conversion to any LIBOR Rate Loan and, in the case of immediately successive Interest Periods, each successive

 

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Interest Period shall commence on the date on which the immediately preceding Interest Period expires;

 

(ii)                                  if any Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided that if any Interest Period with respect to a LIBOR Rate Loan would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the immediately preceding Business Day;

 

(iii)                               any Interest Period with respect to a LIBOR Rate Loan 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 relevant calendar month at the end of such Interest Period;

 

(iv)                              no Interest Period shall extend beyond the Maturity Date; and

 

(v)                                 there shall be no more than ten (10) Interest Periods in effect at any time.

 

“Investment” means, with respect to any Person, that such Person (a) purchases, owns, invests in or otherwise acquires (in one transaction or a series of transactions), directly or indirectly, any Equity Interests, interests in any partnership or joint venture (including, without limitation, the creation or capitalization of any Subsidiary), evidence of Indebtedness or other obligation or security, substantially all or a portion of the business or assets of any other Person or any other investment or interest whatsoever in any other Person, (b) makes any Acquisition or (c) makes or permits to exist, directly or indirectly, any loans, advances or extensions of credit to, or any investment in cash or by delivery of Property in, any Person.

 

“Investment Company Act” means the Investment Company Act of 1940 (15 U.S.C. § 80(a)(1), et seq.).

 

“IPO” means an initial public offering of Equity Interests by the Borrower or any direct or indirect parent of the Borrower, including the Parent (such Person subject to such IPO, the “IPO Entity”), registered with the Securities Exchange Commission under the Securities Act of 1933.

 

“IRS” means the United States Internal Revenue Service.

 

“ISP” means the International Standby Practices, International Chamber of Commerce Publication No. 590 (or such later version thereof as may be in effect at the applicable time).

 

“issue” means, with respect to any Letter of Credit, to issue, to amend or to extend the expiry of, or to renew or increase the Stated Amount of, such Letter of Credit; and the terms “issued”, “issuing” and “issuance” have correlative meanings.

 

“Issuing Lender” means (i) with respect to any Participated Letter of Credit, the Fronting Bank and (ii) with respect to any Syndicated Letter of Credit, the Lenders who have issued such Syndicated Letter of Credit, which may include any Affiliate of any Lender, provided that such Affiliate is a NAIC Qualified Lender.

 

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“L/C Advance” has the meaning assigned thereto in Section 3.2(d)(i).

 

“L/C Agent” means Wells Fargo, in such capacity.

 

“L/C Disbursement” means (i) with respect to any Participated Letter of Credit, any payment made by the Fronting Bank pursuant thereto and (ii) with respect to any Syndicated Letter of Credit, any payment made by an Issuing Lender pursuant thereto.

 

“L/C Facility” means the letter of credit facility established pursuant to Article III.

 

“L/C Fee” has the meaning assigned thereto in Section 3.9(i).

 

“L/C Obligations” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time, including any automatic or scheduled increases provided for by the terms of such Letters of Credit, determined without regard to whether any conditions to drawing could be met at that time, plus (b) the aggregate amount of all L/C Disbursements that have not yet been reimbursed by or on behalf of the applicable Account Party at such time.

 

“Lender” means the Persons listed on Schedule 1.1 and any other Person that shall have become a party to this Agreement as a Lender pursuant to an Assignment and Assumption, other than any Person that ceases to be a party hereto as a Lender pursuant to an Assignment and Assumption.

 

“Lending Office” means, with respect to any Lender, the office of such Lender maintaining such Lender’s extensions of credit made hereunder.

 

“Letter of Credit Documents” means, with respect to any Letter of Credit, collectively, any Letter of Credit Notice therefor and any other applications, agreements, instruments, guarantees or other documents (whether general in application to all Letters of Credit issued by the applicable Issuing Lender or applicable only to such Letter of Credit) governing or providing for the rights and obligations of the parties concerned or at risk with respect to such Letter of Credit.

 

“Letter of Credit Exposure” means, at any time for each Lender, the sum of such Lender’s Participated Letter of Credit Exposure and Syndicated Letter of Credit Exposure.

 

“Letter of Credit Notice” means a Syndicated Letter of Credit Notice or a Participated Letter of Credit Notice, as the context requires.

 

“Letters of Credit” means the collective reference to letters of credit issued pursuant to Article III.

 

“LIBOR” means,

 

(i)                                     for any interest rate calculation with respect to a LIBOR Rate Loan, the rate of interest per annum determined on the basis of the rate for deposits in Dollars for a period equal to the applicable Interest Period which appears on Reuters Screen LIBOR01 Page (or any applicable successor page) at approximately 11:00 a.m. (London time) two

 

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(2) London Banking Days prior to the first day of the applicable Interest Period.  If, for any reason, such rate does not appear on Reuters Screen LIBOR01 Page (or any applicable successor page), then “LIBOR” shall be determined by the Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars would be offered by first class banks in the London interbank market to the Administrative Agent at approximately 11:00 a.m. (London time) two (2) London Banking Days prior to the first day of the applicable Interest Period for a period equal to such Interest Period, and

 

(ii)                                  for any interest rate calculation with respect to a Base Rate Loan, the rate of interest per annum determined on the basis of the rate for deposits in Dollars for an Interest Period equal to one month (commencing on the date of determination of such interest rate) which appears on the Reuters Screen LIBOR01 Page (or any applicable successor page) at approximately 11:00 a.m. (London time) on such date of determination, or, if such date is not a Business Day, then the immediately preceding Business Day.  If, for any reason, such rate does not appear on Reuters Screen LIBOR01 Page (or any applicable successor page) then “LIBOR” for such Base Rate Loan shall be determined by the Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars would be offered by first class banks in the London interbank market to the Administrative Agent at approximately 11:00 a.m. (London time) on such date of determination for a period equal to one month commencing on such date of determination.

 

If at any time the Administrative Agent determines (which determination shall be conclusive absent manifest error) that the supervisor for the administrator of the LIBOR or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which LIBOR shall no longer be used for determining interest rates for loans, then the Administrative Agent and the Borrower shall endeavor to establish an alternate rate of interest to LIBOR that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time, and shall enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be applicable, including adjustments to the Applicable Rate as may be necessary to maintain the relative margin on the applicable Obligations as in effect prior to the implementation of such alternate rate of interest and such other related changes after giving effect thereto.  Notwithstanding anything to the contrary in Section 11.2, such amendment shall become effective without any further action or consent of any other party to this Agreement so long as the Administrative Agent shall not have received, within five Business Days of the date notice of such alternate rate of interest (including any adjustments to the marginal rates) is provided to the Lenders, a written notice from the Required Lenders stating that such Required Lenders object to such amendment.  Until an alternate rate of interest (including any adjustments to the Applicable Rate) shall be determined in accordance with this paragraph (but only to the extent LIBOR for such Interest Period is not available or published at such time on a current basis), (x) any Notice of Conversion/Continuation that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a LIBOR Rate Loan shall be ineffective and any such LIBOR Rate Loan shall be repaid on the last day of the then current Interest Period applicable thereto and (y) if any Notice of Borrowing requests a LIBOR Rate Loan, such Borrowing shall be made as a Base Rate Loan.

 

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Each calculation by the Administrative Agent of LIBOR shall be conclusive and binding for all purposes, absent manifest error.  To the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied to the then applicable Interest Period in a manner consistent with market practice as reasonably determined by the Administrative Agent; provided that if such market practice is reasonably determined by the Administrative Agent to not be administratively feasible, such approved rate shall be applied in a manner reasonably determined by the Administrative Agent.

 

Notwithstanding the foregoing, in no event shall LIBOR be less than 0%.

 

“LIBOR Rate” means a rate per annum determined by the Administrative Agent pursuant to the following formula:

 

	
LIBOR Rate =
    	
LIBOR
    
	
1.00-Eurodollar Reserve Percentage
    

 

“LIBOR Rate Loan” means any Loan bearing interest at a rate based upon the LIBOR Rate as provided in Section 4.1(a).

 

“Lien” means, with respect to any asset, any mortgage, leasehold mortgage, lien, pledge, charge, security interest, hypothecation or encumbrance of any kind in respect of such asset.  For the purposes of this Agreement, a Person shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease obligation or other title retention agreement relating to such asset.

 

“Loan Documents” means, collectively, this Agreement, each Note, the Letter of Credit Documents, the Wells Fargo Fee Letter (solely with respect to the annual administrative agent fee and the fronting fee described therein), and each other document, instrument, certificate and agreement executed and delivered by the Credit Parties or any of their respective Subsidiaries in favor of or provided to the Administrative Agent in connection with this Agreement or otherwise referred to herein or contemplated hereby.

 

“Loans” means the collective reference to the Revolving Credit Loans and the Swingline Loans, and “Loan” means any of such Loans.

 

“London Banking Day” means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank Eurodollar market.

 

“Material Adverse Effect” means, with respect to the Parent and its Subsidiaries, (a) a material adverse effect on the operations, business, properties or financial condition of such Persons, taken as a whole, (b) a material impairment of the ability of any such Person to perform its payment obligations under the Loan Documents to which it is a party, (c) a material impairment of the rights and remedies of the Administrative Agent, on behalf of the Lenders, under any Loan Document or (d) a material impairment of the legality, validity, binding effect or enforceability against the Credit Parties, taken as a whole, of the Loan Documents.

 

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“Material Insurance Subsidiaries” means, collectively, each Insurance Subsidiary of the Parent that is a Material Subsidiary.

 

“Material Subsidiaries” means, collectively, each Subsidiary that is a Credit Party and each other Restricted Subsidiary that is a “significant subsidiary” as such term is defined in Regulation S-X.

 

“Maturity Date” means February 8, 2021.

 

“Minimum Collateral Amount” means, at any time, (i) with respect to Cash Collateral provided to reduce or eliminate Fronting Exposure during the existence of a Defaulting Lender, an amount equal to the Fronting Exposure of the Fronting Bank at such time, (ii) with respect to Cash Collateral provided in accordance with Section 2.4(c), the amount required by such Section, and (iii) with respect to Cash Collateral provided in accordance with Section 4.14(i) or Section 9.2(b), an amount equal to 103% of the aggregate L/C Obligations.

 

“Minimum Consolidated Tangible Net Worth” has the meaning assigned thereto in Section 8.12(b).

 

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA that is subject to Title IV of ERISA and to which any Credit Party or any ERISA Affiliate is making, or is accruing an obligation to make, or has accrued an obligation to make contributions within the preceding five (5) years.

 

“NAIC” means the National Association of Insurance Commissioners and any successor thereto.

 

“NAIC Qualified Institution List” has the meaning assigned thereto in the definition of “NAIC Qualified Lender.”

 

“NAIC Qualified Lender” means, at any time, any Lender listed on the “NAIC List of Qualified U.S. Financial Institutions” maintained by the securities valuation office of the NAIC as issuers of letters of credit for which reinsurance reserve credit can be given (the “NAIC Qualified Institution List”) at such time and acting through the legal entity so listed.

 

“Non-Consenting Lender” means any Lender that does not approve any consent, waiver, amendment, modification or termination that (a) requires the approval of all Lenders or all affected Lenders in accordance with the terms of Section 11.2 and (b) has been approved by the Required Lenders.

 

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

 

“Non-Extension Notice Date” has the meaning assigned thereto in Section 3.3.

 

“Non-NAIC Fronting Bank” means any Lender or other Person (which is a NAIC Qualified Lender) reasonably acceptable to the Administrative Agent which is requested by the Borrower,

 

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and which agrees in its sole discretion in writing, to be a fronting bank on behalf of a Non-NAIC Qualified Lender.

 

“Non-NAIC Qualified Lender” means, at any time, any Lender that is not a NAIC Qualified Lender at such time.

 

“Notice of Borrowing” has the meaning assigned thereto in Section 2.3(a).

 

“Notice of Conversion/Continuation” has the meaning assigned thereto in Section 4.2.

 

“Notice of Non-Extension” has the meaning assigned thereto in Section 3.3.

 

“Obligations” means all principal of and interest (including interest and fees accruing after the filing of a petition or commencement of a case by or with respect to any Credit Party seeking relief under any applicable Debtor Relief Laws, whether or not the claim for such interest and fees is allowed in such proceeding) on the Loans, Reimbursement Obligations and all fees, expenses, indemnities, liabilities, financial accommodations and other monetary obligations owing, due or payable at any time by any Credit Party to the Administrative Agent, the L/C Agent, any Issuing Lender, any Lender or any other Person entitled thereto, under this Agreement or any of the other Loan Documents, in each case whether direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured.

 

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

 

“Officer’s Compliance Certificate” means a certificate of the chief financial officer or the treasurer of the Parent substantially in the form attached as Exhibit F.

 

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“Other Taxes” means all present or future stamp, court, documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 4.12).

 

“Parent” means Sirius International Insurance Group, Ltd., an exempted company organized under the laws of Bermuda.

 

“Parent Materials” has the meaning assigned thereto in Section 11.1(e)(i).

 

“Participant” has the meaning assigned thereto in Section 11.9(d).

 

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“Participant Register” has the meaning assigned thereto in Section 11.9(d).

 

“Participated Letter of Credit Exposure” means, at any time for each Lender, such Lender’s Commitment Percentage of the sum of (i) the aggregate Stated Amount of all outstanding Participated Letters of Credit and (ii) the aggregate amount of all outstanding Reimbursement Obligations with respect to Participated Letters of Credit at such time.

 

“Participated Letters of Credit” means Letters of Credit issued by the Fronting Bank under Section 3.2.

 

“PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor agency.

 

“Pension Plan” means any Benefit Plan, other than a Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of the Code and which (a) is maintained, funded or administered for the employees of any Credit Party or any ERISA Affiliate or (b) has at any time within the preceding five (5) years been maintained, funded or administered for the employees of any Credit Party or any current or former ERISA Affiliates.

 

“Permitted Investors” means, collectively, (a) any Person who holds the Equity Interests of the Parent on the Closing Date, including, for the avoidance of doubt, China Minsheng Investment Group Corp. Ltd., and its Affiliates, (b) any Person that is a parent company of any Person referred to in clause (a) and (c) any controlled investment Affiliate of any such Person referred to in clause (a) or (b).

 

“Permitted Liens” means the Liens permitted pursuant to Section 8.2.

 

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

“Platform” means Debt Domain, Intralinks, SyndTrak or a substantially similar electronic transmission system.

 

“Prime Rate” means, at any time, the rate of interest per annum publicly announced from time to time by the Administrative Agent as its prime rate.  Each change in the Prime Rate shall be effective as of the opening of business on the day such change in such prime rate occurs.  The parties hereto acknowledge that the rate announced publicly by the Administrative Agent as its prime rate is an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks.

 

“Property” means 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, Equity Interests.

 

“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

 

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“Qualified Securities” means any other debt or equity securities issued by the Borrower or any of its Subsidiaries whose proceeds are accorded equity treatment by S&P (or any successor thereto).

 

“Ratable Share” of any amount means, at any time for each Lender, a percentage obtained by dividing such Lender’s Commitment at such time by the aggregate Commitments then in effect or, if the Commitment Termination Date has occurred, the Ratable Share of each Lender shall be determined by dividing such Lender’s outstanding Credit Exposure by the aggregate of all outstanding Credit Exposure as of any date of determination.

 

“Recipient” means (a) the Administrative Agent, (b) any Lender or Issuing Lender and (c) the Fronting Bank, as applicable.

 

“Register” has the meaning assigned thereto in Section 11.9(c).

 

“Reimbursement Obligation” means the obligation of any Account Party to reimburse the applicable Issuing Lenders for any payment made by such Issuing Lenders under, or in respect of, any Letter of Credit issued for its account, together with interest thereon payable as provided herein.

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

 

“Removal Effective Date” has the meaning assigned thereto in Section 10.6(b).

 

“Required Lenders” means, at any time, Lenders having Credit Exposures representing more than fifty percent (50%) of the aggregate Exposures of all Lenders.  The Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time, provided that, the amount of any participation in any Swingline Loan and Participated Letter of Credit that such Defaulting Lender has failed to fund that has not been reallocated to and funded by another Lender shall be deemed to be held by the Swingline Lender or Fronting Bank, as the case may be, in making such determination.

 

“Resignation Effective Date” has the meaning assigned thereto in Section 10.6(a).

 

“Responsible Officer” means, as to any Person, the chief executive officer, president, chief financial officer, controller, treasurer or assistant treasurer of such Person or any other officer of such Person designated in writing by the Credit Parties and reasonably acceptable to the Administrative Agent; provided that, to the extent requested thereby, the Administrative Agent shall have received a certificate of such Person certifying as to the incumbency and genuineness of the signature of each such officer.  Any document delivered hereunder or under any other Loan Document that is signed by a Responsible Officer of a Person shall be conclusively presumed to have been authorized by all necessary corporate, limited liability company, partnership and/or other action on the part of such Person and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Person.

 

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“Restricted Payment” means any dividend on, or the making of any payment or other distribution on account of, or the purchase, redemption, retirement or other acquisition (directly or indirectly) of, or the setting apart assets for a sinking or other analogous fund for the purchase, redemption, retirement or other acquisition of, any class of Equity Interests of any Credit Party or any Subsidiary thereof, or the making of any distribution of cash, property or assets to the holders of any Equity Interests of any Credit Party or any Subsidiary thereof on account of such Equity Interests.

 

“Restricted Subsidiary” means any Subsidiary of the Parent other than the Unrestricted Subsidiary.

 

“Revolving Credit Facility” means the revolving credit facility established pursuant to Article II.

 

“Revolving Credit Loan” means any revolving loan made to the Borrower pursuant to Section 2.1, and all such revolving loans collectively as the context requires.

 

“Revolving Credit Note” means a promissory note made by the Borrower in favor of a Lender evidencing the Revolving Loans made by such Lender, substantially in the form attached as Exhibit A-1, and any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

 

“Revolving Credit Outstandings” means the sum of (a) with respect to Revolving Credit Loans and Swingline Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Revolving Credit Loans and Swingline Loans, as the case may be, occurring on such date; plus (b) with respect to any L/C Obligations on any date, the aggregate outstanding amount thereof on such date after giving effect to any Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date.

 

“S&P” means Standard & Poor’s Financial Services LLC, a part of McGraw-Hill Financial and any successor thereto.

 

“Sanctions” means any and all economic or financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes and anti-terrorism laws, including but not limited to those imposed, administered or enforced from time to time by the U.S. government (including those administered by OFAC or the U.S. Department of State), the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority.

 

“Sanctioned Country” means at any time, a country, territory or region which is itself the subject or target of any Sanctions (including, as of the Closing Date, Cuba, Iran, North Korea, Syria and Crimea).

 

“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC (including, without limitation, OFAC’s Specially Designated Nationals and Blocked Persons List and OFAC’s Consolidated Non-SDN List), the

 

24

 

U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority, (b) any Person located, operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in clauses (a) and (b), including a Person that is deemed by OFAC to be a Sanctions target based on the ownership of such legal entity by Sanctioned Peron(s).

 

“Securities Act” means the Securities Act of 1933 (15 U.S.C. § 77 et seq.).

 

“Solvent” and “Solvency” mean, with respect to any Person and its subsidiaries on a consolidated basis, on any date of determination, that on such date, (a) the fair value of the property of such Person and its subsidiaries, on a consolidated basis, is greater than the total amount of liabilities, including contingent liabilities, of such Person and its subsidiaries, on a consolidated basis, (b) the present fair salable value of the assets of such Person and its subsidiaries, on a consolidated basis, is not less than the amount that will be required to pay the probable liability of such Person and its subsidiaries, on a consolidated basis, on its debts as they become absolute and matured in the ordinary course of business, (c) such Person and its subsidiaries, on a consolidated basis, do not intend to, and do not believe that it will, incur debts or liabilities beyond the ability of such Person and its subsidiaries, on a consolidated basis, to pay such debts and liabilities as they mature in the ordinary course of business and (d) such Person and its subsidiaries, on a consolidated basis, is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which the property of such Person and its subsidiaries, on a consolidated basis, would constitute unreasonably small capital.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“Spot Rate” means, on any day, with respect to any currency other than Dollars, the rate at which such currency may be exchanged into Dollars based on the exchange rate on the immediately prior Business Day as determined by Thompson Reuters and publicly reports on its free website at https://www.reuters.com/finance/currencies or any successor thereto.

 

“Stated Amount” means, with respect to any Letter of Credit at any time, the aggregate amount available to be drawn thereunder at such time (regardless of whether any conditions for drawing could then be met).

 

“Subsidiary” means as to any Person, any corporation, partnership, limited liability company or other entity of which more than fifty percent (50%) of the outstanding Equity Interests having ordinary voting power to elect a majority of the board of directors (or equivalent governing body) or other managers of such corporation, partnership, limited liability company or other entity is at the time owned by (directly or indirectly) such Person (irrespective of whether, at the time, Equity Interests of any other class or classes of such corporation, partnership, limited liability company or other entity shall have or might have voting power by reason of the happening of any contingency).  Unless otherwise qualified, references to “Subsidiary” or “Subsidiaries” herein shall refer to those of the Parent.

 

“Syndicated Letter of Credit” means Letters of Credit issued severally by the Lenders under Section 3.1.

 

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“Syndicated Letter of Credit Exposure” means, at any time for each Lender, such Lender’s Commitment Percentage of the sum of (i) the aggregate Stated Amount of all outstanding Syndicated Letters of Credit and (ii) the aggregate amount of all outstanding Reimbursement Obligations in respect of Syndicated Letters of Credit at such time.

 

“Syndicated Letter of Credit Notice” has the meaning assigned thereto in Section 3.1(b).

 

“Swap Obligation” means, with respect to any Credit Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

 

“Swingline Commitment” means the lesser of (a) $50,000,000 and (b) the Commitment.

 

“Swingline Facility” means the swingline facility established pursuant to Section 2.1.

 

“Swingline Lender” means Wells Fargo in its capacity as swingline lender hereunder or any successor thereto.

 

“Swingline Loan” means any swingline loan made by the Swingline Lender to the Borrower pursuant to Section 2.1, and all such swingline loans collectively as the context requires.

 

“Swingline Note” means a promissory note made by the Borrower in favor of the Swingline Lender evidencing the Swingline Loans made by the Swingline Lender, substantially in the form attached as Exhibit A-2, and any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

 

“Swingline Participation Amount” has the meaning assigned thereto in Section 2.2(b)(iii).

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, fines, additions to tax or penalties applicable thereto.

 

“Termination Event” means the occurrence of any of the following which, individually or in the aggregate, has resulted or would reasonably be expected to result in liability of any Credit Party:  (a) a “reportable event” described in Section 4043 of ERISA for which the thirty (30) day notice requirement has not been waived by the PBGC, or (b) the withdrawal of any Credit Party or any ERISA Affiliate from a Pension Plan during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA, or (c) the termination of a Pension Plan, the filing of a notice of intent to terminate a Pension Plan or the treatment of a Pension Plan amendment as a termination, under Section 4041 of ERISA, if the plan assets are not sufficient to pay all plan liabilities, or (d) the institution of proceedings to terminate, or the appointment of a trustee with respect to, any Pension Plan by the PBGC, or (e) any other event or condition which would constitute grounds under Section 4042(a) of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan, or (f) the imposition of a Lien with respect to any Pension Plan pursuant to Section 430(k) of the Code or Section 303(k) of ERISA, or (g) the determination that any Pension Plan is considered an “at-risk” plan within the meaning of Section 430 of the Code or Section 303 of ERISA or the determination that any Multiemployer

 

26

 

Plan is in “endangered” or “critical” status within the meaning of Section 432 of the Code or Section 305 of ERISA, or (h) the partial or complete withdrawal of any Credit Party or any ERISA Affiliate from a Multiemployer Plan if withdrawal liability is asserted by such plan, or (i) any event or condition which results in the insolvency of a Multiemployer Plan under Section 4245 of ERISA, or (j) any event or condition which results in the termination of a Multiemployer Plan under Section 4041A of ERISA or the institution by the PBGC of proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA, or (k) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Credit Party or any ERISA Affiliate, or (l) the failure to satisfy the minimum funding standard of Section 412 or 430 of the Code or Section 302 or 303 of ERISA, whether or not waived, with respect to any Pension Plan, or (m) the occurrence of a non-exempt prohibited transaction within the meaning of Section 4975 of the Code or Section 406 of ERISA with respect to any Benefit Plan, or (n) the failure of any Benefit Plan intended to be qualified under Section 401(a) of the Code to so qualify, or the failure of any trust forming part of any such plan to qualify for exemption from taxation under Section 501(a) of the Code, or (o) the failure to make by its due date a required installment under Section 430(j) of the Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan.

 

“Threshold Amount” means $50,000,000.

 

“Total Consolidated Capitalization” has the meaning assigned thereto in Section 8.12(a).

 

“Total Consolidated Debt” has the meaning assigned thereto in Section 8.12(a).

 

“UCP” means the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce Publication No. 600 (or such later version thereof as may be in effect at the applicable time).

 

“UK GAAP” means generally accepted accounting principles in the United Kingdom.

 

“United States” and “U.S.” means the United States of America.

 

“Unrestricted Subsidiary” means The Phoenix Holdings Ltd. (“The Phoenix”), provided that The Phoenix will be re-designated a Restricted Subsidiary upon the earlier of (a) the Parent, at any time, owning in the aggregate, directly or indirectly, beneficially, at least 66.67% of the aggregate Equity Interests of The Phoenix or (b) the Borrower re-designating The Phoenix as a Restricted Subsidiary by written notice to the Administrative Agent; provided, however, that once The Phoenix has been designated as a Restricted Subsidiary, it cannot be re-designated as an Unrestricted Subsidiary.

 

“U.S. Person” means any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.

 

“U.S. Tax Compliance Certificate” has the meaning assigned thereto in Section 4.11(g).

 

“Wells Fargo” means Wells Fargo Bank, National Association, a national banking association.

 

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“Wells Fargo Fee Letter” means the separate fee letter agreement dated January 12, 2018 among the Borrower, Wells Fargo and Wells Fargo Securities, LLC.

 

“Wholly-Owned” means, with respect to a Subsidiary, that all of the Equity Interests of such Subsidiary are, directly or indirectly, owned or controlled by the Parent and/or one or more of its Wholly-Owned Subsidiaries (except for directors’ qualifying shares or other shares required by Applicable Law to be owned by a Person other than the Parent and/or one or more of its Wholly-Owned Subsidiaries).

 

“Withholding Agent” means any Credit Party and the Administrative Agent.

 

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

SECTION 1.2.                                          Other Definitions and Provisions.  With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:  (a) the definitions of terms herein shall apply equally to the singular and plural forms of the terms defined, (b) whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms, (c) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (d) the word “will” shall be construed to have the same meaning and effect as the word “shall”, (e) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (f) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (g) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (h) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, (i) the term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form, (j) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time and (k) in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including”.

 

SECTION 1.3.                                          Accounting Terms.

 

(a)                                 All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP applied on a consistent basis, as in effect from time to time, except as otherwise specifically prescribed herein; provided that by written notice after the Closing Date delivered from the Borrower to the Administrative Agent (the “Accounting Principles Election”), the

 

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Borrower may elect to prepare and deliver financial statements in conformity with IFRS or UK GAAP, as applicable, and in such case, all accounting terms shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with IFRS or UK GAAP, as applicable, mutatis mutandis, applied on a consistent basis, and in effect from time to time, except to the extent such terms and data relate to periods prior to the effectiveness of the Accounting Principles Election.  Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Parent and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.

 

(b)                                 If at any time, any change in GAAP, any Accounting Principles Election or any change in IFRS or UK GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP, IFRS or UK GAAP, as applicable, prior to such change and (ii) the Credit Parties shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change.

 

SECTION 1.4.                                          Rounding.  Any financial ratios required to be maintained pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio or percentage is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

 

SECTION 1.5.                                          References to Agreement and Laws.  Unless otherwise expressly provided herein, (a) any definition or reference to formation documents, governing documents, agreements (including the Loan Documents) and other contractual documents or instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) any definition or reference to any Applicable Law, including, without limitation, Anti-Corruption Laws, Anti-Money Laundering Laws, the Bankruptcy Code, the Code, the Commodity Exchange Act, ERISA, the Exchange Act, the PATRIOT Act, the Securities Act, the UCC, the Investment Company Act, the Trading with the Enemy Act of the United States or any of the foreign assets control regulations of the United States Treasury Department, shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Applicable Law.

 

SECTION 1.6.                                          Times of Day.  Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).  Unless otherwise specified, to the extent any obligation is required to be paid or performed hereunder on a date that

 

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is not a Business Day, the date for payment or performance shall be construed to be required on the immediately succeeding Business Day.

 

SECTION 1.7.                                          Letter of Credit Amounts.  For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Article 29(a) of the UCP or Rule 3.13 or Rule 3.14 of the ISP or similar terms of the Letter of Credit itself, or if compliant documents have been presented but not yet honored, such Letter of Credit shall be deemed to be “outstanding” and “undrawn” in the amount so remaining available to be paid, and the obligations of the applicable Credit Parties and each Lender shall remain in full force and effect until the Fronting Bank and the Lenders shall have no further obligations to make any payments or disbursements under any circumstances with respect to any Letter of Credit.

 

SECTION 1.8.                                          Exchange Rate Fluctuations.  When applying any monetary limits, thresholds and other exceptions to the representations and warranties, undertakings and Events of Default under the Loan Documents, the equivalent to an amount in the relevant currency shall be calculated at the Spot Rate or, to the extent such Spot Rate is not available, such other publicly available conversion rate agreed to by the Borrower and the Administrative Agent acting reasonably in each case, as at the date of the incurring or making the relevant disposal, acquisition, investment, lease, loan, debt or guarantee or taking any other relevant action.

 

ARTICLE II.

 

REVOLVING CREDIT FACILITY

 

SECTION 2.1.                                          Revolving Credit Loans.  Subject to the terms and conditions of this Agreement and the other Loan Documents, and in reliance upon the representations and warranties set forth in this Agreement and the other Loan Documents, each Lender severally agrees to make Revolving Credit Loans in Dollars to the Borrower from time to time during the Availability Period as requested by the Borrower in accordance with the terms of Section 2.3; provided, that (a) the aggregate Credit Exposures shall not exceed the aggregate Commitments and (b) the Credit Exposure of any Lender (after giving effect to any amount requested) shall not at any time exceed such Lender’s Commitment.  Each Revolving Credit Loan by a Lender shall be in a principal amount equal to such Lender’s Commitment Percentage of the aggregate principal amount of Revolving Credit Loans requested on such occasion.  Subject to the terms and conditions hereof, the Borrower may borrow, repay and reborrow Revolving Credit Loans.

 

SECTION 2.2.                                          Swingline Loans.

 

(a)                                 Availability.  Subject to the terms and conditions of this Agreement and the other Loan Documents, and in reliance upon the representations and warranties set forth in this Agreement and the other Loan Documents, the Swingline Lender agrees to make Swingline Loans in Dollars to the Borrower from time to time during the Availability Period; provided, that (i) after giving effect to any amount requested, the sum of the aggregate Credit Exposures shall not exceed the aggregate Commitments and (ii) the aggregate principal amount of all outstanding Swingline Loans (after giving effect to any amount requested) shall not exceed the Swingline Commitment; provided, further, that the Swingline Lender shall not be required to make a Swingline Loan to

 

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refinance an outstanding Swingline Loan.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.

 

(b)                                 Refunding.

 

(i)                                     The Swingline 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 Swingline Lender to act on its behalf), by written notice given no later than 11:00 a.m. on any Business Day request each Lender to make, and each Lender hereby agrees to make, a Revolving Credit Loan as a Base Rate Loan in an amount equal to such Lender’s Commitment Percentage of the aggregate amount of the Swingline Loans outstanding on the date of such notice, to repay the Swingline Lender.  Each Lender shall make the amount of such Revolving Credit Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office within one Business Day of notice from the Administrative Agent.  The proceeds of such Revolving Credit Loans shall be immediately made available by the Administrative Agent to the Swingline Lender for application by the Swingline Lender to the repayment of the Swingline Loans.  No Lender’s obligation to fund its respective Commitment Percentage of a Swingline Loan shall be affected by any other Lender’s failure to fund its Commitment Percentage of a Swingline Loan, nor shall any Lender’s Commitment Percentage be increased as a result of any such failure of any other Lender to fund its Commitment Percentage of a Swingline Loan.

 

(ii)                                  The Borrower shall pay to the Swingline Lender, within one Business Day of demand, and in any event as set forth in Section 2.4, in immediately available funds the amount of such Swingline Loans to the extent amounts received from the Revolving Credit Lenders are not sufficient to repay in full the outstanding Swingline Loans requested or required to be refunded.  If any portion of any such amount paid to the Swingline Lender shall be recovered by or on behalf of the Borrower from the Swingline Lender in bankruptcy or otherwise, the loss of the amount so recovered shall be ratably shared among all the Lenders in accordance with their respective Commitment Percentages.

 

(iii)                               Immediately upon the making of a Swingline Loan, and without any further action on the part of the Swingline Lender or the Lenders, the Swingline Lender hereby grants to each Lender, and each Lender hereby acquires from such Swingline Lender, a participation in such Swingline Loan equal to such Lender’s Commitment Percentage of the amount of such Swingline Loan.  If for any reason any Swingline Loan cannot be refinanced with a Revolving Credit Loan pursuant to Section 2.2(b)(i), each Lender shall, on the date such Revolving Credit Loan was to have been made pursuant to the notice referred to in Section 2.2(b)(i), purchase for cash an undivided participating interest in the then outstanding Swingline Loans by paying to the Swingline Lender an amount (the “Swingline Participation Amount”) equal to such Lender’s Commitment Percentage of the aggregate principal amount of Swingline Loans then outstanding.  Each Lender will immediately transfer to the Swingline Lender, in immediately available funds, the amount of its Swingline Participation Amount.  Whenever, at any time after the Swingline Lender has received from any Lender such Lender’s Swingline Participation Amount, the Swingline Lender receives any payment on account of the Swingline Loans, the Swingline Lender will distribute to such Lender its Swingline Participation Amount (appropriately

 

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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 Swingline Loans then due); provided that in the event that such payment received by the Swingline Lender is required to be returned, such Lender will return to the Swingline Lender any portion thereof previously distributed to it by the Swingline Lender.

 

(iv)                              Each Lender’s obligation to make the Revolving Credit Loans referred to in Section 2.2(b)(i) and to purchase participating interests pursuant to Section 2.2(b)(iii) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right that such Lender or the Borrower may have against the Swingline Lender, the Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Article V, (C) any adverse change in the condition (financial or otherwise) of the Borrower, (D) any breach of this Agreement or any other Loan Document by the Borrower, any other Credit Party or any other Lender or (E) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

 

(v)                                 If any Lender fails to make available to the Administrative Agent, for the account of the Swingline Lender, any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.2(b) by the time specified in Section 2.2(b)(i) or 2.2(b)(iii), as applicable, the Swingline Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swingline Lender at a rate per annum equal to the applicable Federal Funds Rate, plus any administrative, processing or similar fees customarily charged by the Swingline Lender in connection with the foregoing.  If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Revolving Credit Loan or Swingline Participation Amount, as the case may be.  A certificate of the Swingline Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

 

(c)                                  Defaulting Lenders.                                      Notwithstanding anything to the contrary contained in this Agreement, this Section 2.1 shall be subject to the terms and conditions of Section 4.14 and Section 4.15.

 

SECTION 2.3.                                          Procedure for Advances of Revolving Credit Loans and Swingline Loans.

 

(a)                                 Requests for Borrowing.  The Borrower shall give the Administrative Agent irrevocable prior written notice substantially in the form of Exhibit B (a “Notice of Borrowing”) not later than 12:00 noon (or, in the case of any Swingline Loan, not later than 2:00 p.m.) (i) at least one (1) Business Day before each Base Rate Loan, (ii) on the same Business Day as each Swingline Loan and (iii) at least three (3) Business Days before each LIBOR Rate Loan, of its

 

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intention to borrow, specifying (A) the date of such borrowing, which shall be a Business Day, (B) the amount of such Borrowing, which shall be, (x) with respect to Base Rate Loans (other than Swingline Loans) in an aggregate principal amount of $3,000,000 or a whole multiple of $1,000,000 in excess thereof, (y) with respect to LIBOR Rate Loans in an aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof and (z) with respect to Swingline Loans in an aggregate principal amount of $500,000 or a whole multiple of $100,000 in excess thereof, (C) whether such Loan is to be a Revolving Credit Loan or Swingline Loan, (D) in the case of a Revolving Credit Loan whether the Loans are to be LIBOR Rate Loans or Base Rate Loans, and (E) in the case of a LIBOR Rate Loan, the duration of the Interest Period applicable thereto; provided that if the Borrower wishes to request LIBOR Rate Loans having an Interest Period of twelve months in duration, such notice must be received by the Administrative Agent not later than 12:00 noon four (4) Business Days prior to the requested date of such borrowing, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them.  If the Borrower fails to specify a type of Loan in a Notice of Borrowing, then the applicable Loans shall be made as Base Rate Loans.  If the Borrower requests a borrowing of LIBOR Rate Loans in any such Notice of Borrowing, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.  A Notice of Borrowing received after 12:00 noon (or 2:00 p.m., in the case of any Swingline Loan) shall be deemed received on the next Business Day unless otherwise agreed by the Administrative Agent (and, in the case of any Swingline Loan, the Swingline Lender).  The Administrative Agent shall promptly notify the Lenders of each Notice of Borrowing.

 

(b)                                 Disbursement of Revolving Credit and Swingline Loans.  Not later than 2:00 p.m. (or 3:00 p.m., in the case of any Swingline Loan) on the proposed borrowing date, (i) each Revolving Credit Lender will make available to the Administrative Agent, for the account of the Borrower, at the office of the Administrative Agent in funds immediately available to the Administrative Agent, such Revolving Credit Lender’s Revolving Credit Commitment Percentage of the Revolving Credit Loans to be made on such borrowing date and (ii) the Swingline Lender will make available to the Administrative Agent, for the account of the Borrower, at the office of the Administrative Agent in funds immediately available to the Administrative Agent, the Swingline Loans to be made on such borrowing date.  The Borrower hereby irrevocably authorizes the Administrative Agent to disburse the proceeds of each borrowing requested pursuant to this Section in immediately available funds by crediting or wiring such proceeds in accordance with any wiring instructions set forth in the applicable Notice of Borrowing, or if no such wiring instructions are set forth, the deposit account of the Borrower identified in the most recent notice substantially in the form attached as Exhibit C (a “Notice of Account Designation”) delivered by the Borrower to the Administrative Agent or as may be otherwise agreed upon by the Borrower and the Administrative Agent from time to time.  Subject to Section 4.7 hereof, the Administrative Agent shall not be obligated to disburse the portion of the proceeds of any Revolving Credit Loan requested pursuant to this Section to the extent that any Revolving Credit Lender has not made available to the Administrative Agent its Revolving Credit Commitment Percentage of such Loan.  Revolving Credit Loans to be made for the purpose of refunding Swingline Loans shall be made by the Revolving Credit Lenders as provided in Section 2.2(b).

 

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SECTION 2.4.                                          Repayment and Prepayment of Loans.

 

(a)                                 Revolving Credit Loans.  The Borrower shall repay to the Administrative Agent for the ratable account of the Lenders on the Commitment Termination Date the aggregate principal amount of all Revolving Loans outstanding on such date.

 

(b)                                 Swingline Loans.  The Borrower shall repay each Swingline Loan on the earlier to occur of (i) the date ten (10) Business Days after such Swingline Loan is made and (ii) the Commitment Termination Date; provided that on each date that a Borrowing of Revolving Credit Loans is made, the Borrower shall repay all Swingline Loans then outstanding and the proceeds of any such Borrowing shall be applied by the Administrative Agent to repay any Swingline Loans outstanding.  At any time that there shall exist a Defaulting Lender, immediately upon the request of the Swingline Lender, the Borrower shall repay the outstanding Swingline Loans made by such Swingline Lender in an amount sufficient to eliminate any Fronting Exposure in respect of such Swingline Loans.

 

(c)                                  Mandatory Prepayments.  If at any time the aggregate Credit Exposures exceed the Commitment, the Borrower agrees to repay within one Business Day of notice from the Administrative Agent, by payment to the Administrative Agent for the account of the Lenders, Credit Extensions in an amount equal to such excess with each such repayment applied first, to the principal amount of outstanding Swingline Loans, second to the principal amount of outstanding Revolving Credit Loans and third, with respect to any Letters of Credit then outstanding, a payment of Cash Collateral into a Cash Collateral Account opened by the Administrative Agent, for the benefit of the Lenders, in an amount equal to such excess (such Cash Collateral to be applied in accordance with Section 9.2(b)).

 

(d)                                 Optional Prepayments.  The Borrower may at any time and from time to time prepay Revolving Credit Loans and Swingline Loans, in whole or in part, without premium or penalty, with irrevocable prior written notice to the Administrative Agent given not later than 12:00 noon (i) on the same Business Day as each Base Rate Loan and each Swingline Loan and (ii) at least three (3) Business Days before each LIBOR Rate Loan, specifying the date and amount of prepayment and whether the prepayment is of LIBOR Rate Loans, Base Rate Loans, Swingline Loans or a combination thereof, and, if of a combination thereof, the amount allocable to each.  Upon receipt of such notice, the Administrative Agent shall promptly notify each Revolving Credit Lender.  If any such notice is given, the amount specified in such notice shall be due and payable on the date set forth in such notice.  Partial prepayments shall be in an aggregate amount of $3,000,000 or a whole multiple of $1,000,000 in excess thereof with respect to Base Rate Loans (other than Swingline Loans), $5,000,000 or a whole multiple of $1,000,000 in excess thereof with respect to LIBOR Rate Loans and $500,000 or a whole multiple of $100,000 in excess thereof with respect to Swingline Loans.  A Notice of Prepayment received after 12:00 noon shall be deemed received on the next Business Day unless otherwise agreed by the Administrative Agent (and, in the case of any Swingline Loan, the Swingline Lender).  Each such repayment shall be accompanied by any amount required to be paid pursuant to Section 4.9 hereof.

 

(e)                                  Limitation on Prepayment of LIBOR Rate Loans.  The Borrower may not prepay any LIBOR Rate Loan on any day other than on the last day of the Interest Period applicable

 

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thereto unless such prepayment is accompanied by any amount required to be paid pursuant to Section 4.9 hereof.

 

SECTION 2.5.                                          Voluntary Reduction of the Commitments.  The Borrower shall have the right at any time and from time to time, upon at least three (3) Business Days prior written notice to the Administrative Agent, to permanently reduce, without premium or penalty, (i) the entire Revolving Credit Commitment at any time or (ii) portions of the Revolving Credit Commitment, from time to time, in an aggregate principal amount not less than $3,000,000 or any whole multiple of $1,000,000 in excess thereof.  Any reduction of the Revolving Credit Commitment shall be applied to the Revolving Credit Commitment of each Revolving Credit Lender according to its Revolving Credit Commitment Percentage.  All Commitment Fees accrued until the effective date of any termination of the Revolving Credit Commitment shall be paid on the effective date of such termination.  Any such written notice may be conditioned upon the effectiveness of any other credit facilities or the receipt of proceeds from, or consummation of, any other event, but shall otherwise be irrevocable.

 

SECTION 2.6.                                          Termination of Revolving Credit Facility.  The Revolving Credit Facility and the Commitments shall terminate on the Commitment Termination Date.

 

ARTICLE III.

 

LETTER OF CREDIT FACILITY

 

SECTION 3.1.                                          Syndicated Letters of Credit.

 

(a)                                 General.  At the request of any Account Party, each Lender agrees, on and subject to the terms and conditions of this Agreement, to issue Letters of Credit as Syndicated Letters of Credit for the account of such Account Party in U.S. Dollars from time to time during the Availability Period.  Each Syndicated Letter of Credit shall be issued severally by all of the Lenders acting through the L/C Agent, at the time of issuance as a single multi-bank letter of credit, and shall be substantially in the form of Exhibit D with such changes therein as the L/C Agent (in consultation with the applicable Account Party) determines are acceptable to it and not adverse to the interests of the Lenders.

 

(b)                                 Notice of Issuance.  To request the issuance of a Syndicated Letter of Credit, the applicable Account Party shall hand deliver or transmit by facsimile (or transmit by electronic communication, if arrangements for doing so have been approved by the L/C Agent; provided that the L/C Agent hereby approves such electronic communication delivered by email) to the L/C Agent and the Administrative Agent (which shall promptly notify the Lenders) not later than 12:00 noon three Business Days in advance of the requested date of issuance (or such shorter period as is acceptable to the L/C Agent, including any request for the issuance of a Syndicated Letter of Credit on the Closing Date, subject to approval by the L/C Agent) a letter of credit notice on the L/C Agent’s standard form (with such changes as the L/C Agent shall reasonably deem appropriate) or other electronic notice acceptable to the L/C Agent (a “Syndicated Letter of Credit Notice”) requesting the issuance of a Syndicated Letter of Credit, or identifying the Syndicated Letter of Credit to be amended, renewed, extended or increased, as the case may be, and specifying:  (A) the date of issuance (which shall be a Business Day), (B) the date on which such Syndicated

 

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Letter of Credit is to expire (which shall comply with Section 3.3), (C) the Stated Amount of such Syndicated Letter of Credit (it being agreed that all Letters of Credit shall be issued in U.S. Dollars), (D) the name and address of the beneficiary thereof, and (E) such other customary information as shall be necessary to prepare, amend, renew, extend or increase, as the case may be, such Syndicated Letter of Credit, it being understood and agreed that Syndicated Letters of Credit may be extended and renewed in accordance with Section 3.3.  It is the intention of the parties to this Agreement that Syndicated Letters of Credit issued to support reinsurance-related obligations shall have terms and conditions necessary to qualify such Syndicated Letters of Credit as permissible collateral under applicable law and, subject to the terms and conditions of this Agreement, the Issuing Lenders agree to issue such Syndicated Letters of Credit.  In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any Syndicated Letter of Credit Notice or other Letter of Credit Document submitted by the applicable Account Party to, or entered into by the applicable Account Party with, the L/C Agent relating to any Syndicated Letter of Credit issued for its account, the terms and conditions of this Agreement shall control.

 

(c)                                  Obligation of Lenders.  The obligation of any Issuing Lender under any Syndicated Letter of Credit shall be several and not joint and shall be in an amount equal to such Issuing Lender’s Commitment Percentage of the aggregate Stated Amount of such Syndicated Letter of Credit at the time such Syndicated Letter of Credit is issued (subject to any amendments to such Syndicated Letter of Credit expressly permitted hereunder) and each Syndicated Letter of Credit shall expressly so provide.  Absent the prior written consent of each Issuing Lender, no Syndicated Letter of Credit may be issued that would vary the several and not joint nature of the obligations of the Issuing Lenders thereunder as provided in this Section 3.1(c).  The failure of any Issuing Lender to make any L/C Disbursement in respect of any Syndicated Letter of Credit on any date shall not relieve any other Issuing Lender of its corresponding obligation, if any, hereunder to do so on such date, but no Issuing Lender shall be responsible for the failure of any other Issuing Lender to make its L/C Disbursement in respect of any Syndicated Letter of Credit.  Concurrently with or promptly following any change in Commitments pursuant to Section 11.9 (to the extent agreed to between the assigning Lender and the assignee) or any other event or circumstance resulting in a change in the Commitment Percentages of the Lenders, the L/C Agent shall amend or replace each outstanding Syndicated Letter of Credit to reflect the new Commitment Percentages of the Lenders.  Until a Syndicated Letter of Credit has been so amended or replaced, the Lenders (both before and after giving effect to the change in Commitment Percentages) shall be deemed to have irrevocably and unconditionally sold and purchased participations in such Syndicated Letter of Credit (including each drawing made thereunder and the obligations of the applicable Account Party under this Agreement with respect thereto and any Cash Collateral or other security therefor or guaranty pertaining thereto) as necessary to give effect to the change in Commitment Percentages.

 

(d)                                 Issuance Administration.  Each Syndicated Letter of Credit shall be executed and delivered by the L/C Agent in the name and on behalf of, and as attorney-in-fact for, each Issuing Lender, and the L/C Agent shall act under each Syndicated Letter of Credit, and each Syndicated Letter of Credit shall expressly provide that the L/C Agent shall act, as the agent of each such Issuing Lender to (i) execute and deliver such Syndicated Letter of Credit, (ii) receive drafts, other demands for payment and other documents presented by the beneficiary under such Syndicated Letter of Credit, (iii) determine whether such drafts, demands and documents are in compliance

 

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with the terms and conditions of such Syndicated Letter of Credit, (iv) notify such Issuing Lender and the applicable Account Party that a valid drawing has been made and the date that the related L/C Disbursement is to be made and (v) exercise all rights held by the issuer of a letter of credit under the documents for which such Syndicated Letter of Credit shall provide credit enhancement (or designate any Person as its representative for all such purposes under such documents); provided that the L/C Agent shall have no obligation or liability for any L/C Disbursement under such Syndicated Letter of Credit (other than in its capacity as an Issuing Lender), and each Syndicated Letter of Credit shall expressly so provide.  Each Issuing Lender hereby irrevocably appoints and designates the L/C Agent as its attorney-in-fact, acting through any duly authorized officer, to execute and deliver in the name and on behalf of such Issuing Lender each Syndicated Letter of Credit to be issued by such Issuing Lender hereunder and to take such other actions contemplated by this Section 3.1(d).  Promptly upon the request of the L/C Agent, each Issuing Lender will furnish to the L/C Agent such additional powers of attorney or other evidence as any beneficiary of any Syndicated Letter of Credit may reasonably request in order to demonstrate that the L/C Agent has the power to act as attorney-in-fact for such Issuing Lender to execute and deliver such Syndicated Letter of Credit.

 

(e)                                  Disbursement Procedures.  The L/C Agent shall, promptly following its receipt thereof (and, in any event, within any time specified in the text of the relevant Syndicated Letter of Credit), examine all documents purporting to represent a demand for payment under a Syndicated Letter of Credit.  The L/C Agent shall promptly after such examination and before such L/C Disbursement notify each applicable Issuing Lender and the applicable Account Party by telephone (confirmed by facsimile or email) of such demand for payment.  With respect to any demand for payment made under a Syndicated Letter of Credit which the L/C Agent has informed the applicable Issuing Lenders is valid, each such Issuing Lender will promptly make a L/C Disbursement in respect of such Syndicated Letter of Credit in accordance with the amount of its liability under such Syndicated Letter of Credit and this Agreement, and such L/C Disbursement is to be made to the account of the L/C Agent most recently designated by it for such purpose by notice to the Issuing Lenders.  The L/C Agent will make such L/C Disbursement available to the beneficiary of such Syndicated Letter of Credit by promptly crediting the amounts so received, in the funds so received, to the account identified by such beneficiary in connection with such demand for such L/C Disbursement.  Promptly following any L/C Disbursement by any Issuing Lender in respect of any Syndicated Letter of Credit, the L/C Agent will notify the applicable Account Party of such L/C Disbursement.

 

(f)                                   Reimbursement.  Each Account Party agrees that it shall reimburse the applicable Issuing Lenders in respect of any L/C Disbursement made under such Account Party’s Syndicated Letters of Credit by paying to the Administrative Agent an amount in U.S. Dollars equal to the amount of such L/C Disbursement, with interest payable thereon as provided in Section 3.5, no later than 3:00 p.m., Charlotte time, on the first Business Day after the date of the L/C Disbursement.  Each Account Party’s obligation to reimburse the Issuing Lenders with respect to such Account Party’s Reimbursement Obligations shall be absolute and unconditional and subject to the provisions of Section 4.1.

 

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SECTION 3.2.                                          Participated Letters of Credit.

 

(a)                                 General.  At the request of any Account Party, the Fronting Bank agrees, on and subject to the terms and conditions of this Agreement and in reliance upon the agreements of the Lenders set forth in this Section 3.2, to issue Letters of Credit as Participated Letters of Credit for the account of such Account Party in U.S. Dollars from time to time during the Availability Period.  Each Participated Letter of Credit shall be in a form customarily used or otherwise approved by the Fronting Bank (in consultation with the applicable Account Party).

 

(b)                                 Notice of Issuance.  To request the Issuance of a Participated Letter of Credit, the applicable Account Party shall hand deliver or transmit by facsimile (or transmit by electronic communication, if arrangements for doing so have been approved by the Fronting Bank; provided that the Fronting Bank hereby approves such electronic communication delivered by email) to the Fronting Bank and the Administrative Agent (which shall promptly notify the Lenders) at least three Business Days in advance of the requested date of issuance (or such shorter period as is acceptable to the Administrative Agent and the Fronting Bank, including any request for the issuance of a Participated Letter of Credit on the Closing Date, subject to approval by the Administrative Agent and the Fronting Bank) a letter of credit notice on the Fronting Bank’s standard form (with such changes as the Fronting Bank shall reasonably deem appropriate) or other electronic notice acceptable to the Fronting Bank (a “Participated Letter of Credit Notice”) requesting the issuance of a Participated Letter of Credit, or identifying the Participated Letter of Credit to be amended, renewed, extended or increased, as the case may be, and specifying:  (A) the date of issuance (which shall be a Business Day), (B) the date on which such Participated Letter of Credit is to expire (which shall comply with Section 3.3), (C) the Stated Amount of such Participated Letter of Credit (it being agreed that all Letters of Credit shall be issued in U.S. Dollars), (D) the name and address of the beneficiary thereof, and (E) such other customary information as shall be necessary to prepare, amend, renew, extend or increase, as the case may be, such Participated Letter of Credit, it being understood and agreed that Participated Letters of Credit may be extended and renewed in accordance with Section 3.3.  It is the intention of the parties to this Agreement that Participated Letters of Credit issued to support reinsurance-related obligations shall have terms and conditions necessary to qualify such Participated Letters of Credit as permissible collateral under applicable law and, subject to the terms and conditions of this Agreement, the Fronting Bank agrees to issue such Participated Letters of Credit.  In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any Participated Letter of Credit Notice or other Letter of Credit Document submitted by the applicable Account Party to, or entered into by the applicable Account Party with, the Fronting Bank relating to any Participated Letter of Credit issued for its account, the terms and conditions of this Agreement shall control.

 

(c)                                  Participations.  By the Issuance of a Participated Letter of Credit by the Fronting Bank and without any further action on the part of the Fronting Bank or the Lenders, the Fronting Bank shall be deemed to have sold and transferred to each Lender, and each Lender shall be deemed irrevocably and unconditionally to have purchased and received from the Fronting Bank, without recourse or warranty, an undivided interest and participation in such Participated Letter of Credit in an amount equal to such Lender’s Commitment Percentage of the Stated Amount of such Participated Letter of Credit and the applicable Account Party’s reimbursement obligations with respect thereto.  Each Lender acknowledges and agrees that its obligation to acquire participations

 

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pursuant to this paragraph in respect of Participated Letters of Credit is absolute, irrevocable and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any such Participated Letter of Credit or the occurrence and continuance of a Default or Event of Default or reduction or termination of the aggregate Commitments.  In consideration and in furtherance of the foregoing, as set forth in Section 3.2(d)(i) each Lender hereby absolutely and unconditionally agrees to pay in U.S. Dollars to the Administrative Agent, for account of the Fronting Bank, such Lender’s Commitment Percentage of each L/C Disbursement made by the Fronting Bank in respect of any Participated Letter of Credit or at any time after any reimbursement payment is required to be disgorged or refunded to the applicable Account Party for any reason.  Such payment shall be made without any offset, abatement, withholding or reduction whatsoever.  Promptly following receipt by the Administrative Agent of any payment from the applicable Account Party pursuant to Section 3.2(e), the Administrative Agent shall distribute such payment to the Fronting Bank or, to the extent that any Lenders have made payments pursuant to this paragraph to reimburse the Fronting Bank, then to such Lenders and the Fronting Bank as their interests may appear.  Any payment made by a Lender pursuant to this paragraph to reimburse the Fronting Bank for any L/C Disbursement shall not relieve the applicable Account Party of its obligation to reimburse such L/C Disbursement.

 

(d)                                 Disbursement Procedures; Funding of Participations.

 

(i)                                     The Fronting Bank shall, promptly following its receipt thereof (and, in any event, within any time specified in the text of the relevant Participated Letters of Credit), examine all documents purporting to represent a demand for payment under a Participated Letter of Credit.  The Fronting Bank shall promptly after such examination notify the Administrative Agent and the applicable Account Party by telephone (confirmed by facsimile or email) of such demand for payment and whether the Fronting Bank has made or will make a L/C Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the applicable Account Party of its obligation to reimburse the Fronting Bank and the Lenders with respect to any such L/C Disbursement.  If the applicable Account Party shall fail to reimburse the Fronting Bank for such L/C Disbursement on the date and time specified in Section 3.2(e), the Administrative Agent shall notify each Lender of the applicable L/C Disbursement, the payment then due from the applicable Account Party in respect thereof and such Lender’s Commitment Percentage thereof.  Each Lender (including the Lender acting as Fronting Bank) shall upon such notice make funds available in U.S. Dollars to the Administrative Agent for the account of the Fronting Bank at the Payment Office in an amount equal to its Commitment Percentage of the unpaid L/C Disbursement (such amount, its “L/C Advance”) not later than 2:00 p.m. on the Business Day specified in such notice by the Administrative Agent.  No such making of a L/C Advance shall relieve or otherwise impair the obligation of the applicable Account Party to reimburse the Fronting Bank for the amount of any payment made by the Fronting Bank under such Letter of Credit, together with interest as provided herein.

 

(ii)                                  If any Lender fails to make available to the Administrative Agent for the account of the Fronting Bank any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 3.2(d) by the time specified therein, the Fronting Bank shall be entitled to recover from such Lender (acting through the Administrative

 

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Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Fronting Bank at a rate per annum equal to the Federal Funds Rate from time to time in effect.  A certificate of the Fronting Bank submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (ii) shall be conclusive absent manifest error.  Until a Lender funds its L/C Advance pursuant to this Section 3.2(d) to reimburse the Fronting Bank for any L/C Disbursement, interest in respect of such Lender’s L/C Advance shall be solely for the account of the Fronting Bank.

 

(e)                                  Reimbursement.  Each Account Party agrees that it shall reimburse the Fronting Bank in respect of any L/C Disbursement made under such Account Party’s Participated Letters of Credit by paying to the Administrative Agent an amount in U.S. Dollars equal to the amount of such L/C Disbursement, with interest payable thereon as provided in Section 3.5, no later than 3:00 p.m., Charlotte time, on the first Business Day after the date of the L/C Disbursement.  Each Account Party’s obligation to reimburse the Fronting Bank with respect to its Reimbursement Obligations shall be absolute and unconditional and subject to the provisions of Section 4.1.

 

(f)                                   Repayment of Participations.

 

(i)                                     At any time after the Fronting Bank has made a payment under any Participated Letter of Credit and has received from any Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 3.2(d)(i), if the Administrative Agent receives for the account of the Fronting Bank any payment in respect of the related unpaid L/C Disbursement or interest thereon (whether directly from the applicable Account Party or otherwise, including proceeds of cash collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Commitment Percentage thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s L/C Advance was outstanding) in the same funds as those received by the Administrative Agent.

 

(ii)                                  If any payment received by the Administrative Agent for the account of the Fronting Bank pursuant to Section 3.2(d) is required to be returned under any of the circumstances described in Section 4.1 (including pursuant to any settlement entered into by the Fronting Bank in its discretion), each Lender shall pay to the Administrative Agent for the account of the Fronting Bank its Ratable Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect.

 

SECTION 3.3.                                          Expiry Date of Letters of Credit.  Each Letter of Credit shall expire at or prior to the earlier of (a) the close of business on the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension), or (b) the Final Maturity Date; provided, however, if any Account Party so requests in any applicable Letter of Credit Notice, the L/C Agent or the Fronting Bank, as applicable, agrees to issue a Letter of Credit that provides for the automatic renewal for successive periods of one year or less (but not beyond the Final Maturity Date) (each, an “Evergreen Letter of Credit”) unless and until the L/C Agent or Fronting Bank, as applicable, shall have delivered

 

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prior written notice of nonrenewal to the beneficiary of such Letter of Credit (a “Notice of Non-Extension”) no later than 60 days prior to the expiry date specified in such Letter of Credit (such time, the “Non-Extension Notice Date”).  Once an Evergreen Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the L/C Agent or Fronting Bank, as applicable, to permit the extension of such Letter of Credit at any time to an expiry date not later than the Final Maturity Date; provided, however, that the L/C Agent or Fronting Bank, as applicable, shall not permit any such extension, nor shall it be required to extend such Letter of Credit, if (x) the L/C Agent or Fronting Bank, as applicable, has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit (as extended) under the terms hereof (by reason of the provisions of Section 5.2), (y) it has received notice (which may be by telephone or in writing) on or before the day that is five Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, the Required Lenders or the applicable Account Party that one or more of the applicable conditions specified in Section 5.2 is not then satisfied or (z) the Commitment Termination Date has occurred.

 

SECTION 3.4.                                          Obligations Absolute.

 

(a)                                 The Reimbursement Obligations of each Account Party with respect to a L/C Disbursement under any Letter of Credit issued for the account of such Account Party and the obligation of any Lender to make its L/C Advance to the Fronting Bank with respect to any L/C Disbursement under any Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement and any Letter of Credit Document under all circumstances, including the following circumstances:

 

(i)                                     any lack of validity or enforceability of this Agreement, any other Loan Document, any Letter of Credit Document or any other agreement or instrument relating thereto;

 

(ii)                                  any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of such Account Party in respect of any Letter of Credit Document or any other amendment or waiver of or any consent to departure from all or any of the Letter of Loan Documents;

 

(iii)                               the existence of any claim, set-off, defense or other right that such Account Party may have at any time against any beneficiary or any transferee of a Letter of Credit (or any Persons for which any such beneficiary or any such transferee may be acting), any Issuing Lender, the Administrative Agent, the L/C Agent, any Lender or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any other Letter of Credit Document or any unrelated transaction;

 

(iv)                              any statement or any other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

 

(v)                                 payment by any Issuing Lender under a Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit;

 

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(vi)                              any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any guarantee, for all or any of the Obligations of such Account Party; or

 

(vii)                           any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, such Account Party, any other Credit Party or any other guarantor, other than as may be expressly set forth in this Agreement.

 

(b)                                 None of the Administrative Agent, the L/C Agent, any Issuing Lender or any Lender, or any of their Related Parties, shall have any liability or responsibility to any Account Party by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder, or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond their control; provided that the foregoing shall not be construed to excuse the Fronting Bank or the L/C Agent from liability to the applicable Account Party to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by each Account Party to the extent permitted by applicable law) suffered by such Account Party that are caused by the gross negligence or willful misconduct of the Fronting Bank or the L/C Agent (as determined by a court of competent jurisdiction by a final and nonappealable judgment) when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.  It is expressly understood and agreed that (i) the acceptance by the Fronting Bank or the L/C Agent, as the case may be, of documents that appear on their face to comply with the terms of a Letter of Credit, without responsibility for further investigation, (ii) the exclusive reliance by the Fronting Bank or the L/C Agent, as the case may be, on the documents presented to it under a Letter of Credit as to any and all matters set forth therein, including the amount of any draft presented under such Letter of Credit, whether or not the amount due to the beneficiary thereunder equals the amount of such draft and whether or not any document presented pursuant to such Letter of Credit proves to be insufficient in any respect (so long as such document appears on its face to comply with the terms of such Letter of Credit), and whether or not any other statement or any other document presented pursuant to such Letter of Credit proves to be forged or invalid or any statement therein proves to be inaccurate or untrue in any respect whatsoever, and (iii) any noncompliance in any immaterial respect of the documents presented under such Letter of Credit with the terms thereof shall, in each case, be deemed not to constitute gross negligence or willful misconduct of the Fronting Bank or the L/C Agent.

 

SECTION 3.5.                                          Interest.  Unless the applicable Account Party reimburses each L/C Disbursement made in respect of Letters of Credit issued for its account in full on the date such L/C Disbursement is made, the unpaid amount of the Reimbursement Obligation thereof shall bear interest from the date of each L/C Disbursement until such amount shall be paid in full as follows:  (i) from and including the date such L/C Disbursement is made to and including the 3rd Business Day following such date, at the Base Rate plus the Applicable Rate at such time applicable to Base Rate Loans, and (ii) thereafter, at the Base Rate plus the Applicable Rate at such time applicable to Base Rate Loans plus 2%.  Such interest shall be payable on demand.

 

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SECTION 3.6.                                          Cash Collateralization of Letters of Credit.

 

(a)                                 If (A) as of the Commitment Termination Date, any Letter of Credit may for any reason remain outstanding, (B) any Event of Default occurs and is continuing and the Administrative Agent or the Required Lenders, as applicable, require each Account Party to Cash Collateralize the aggregate Letter of Credit Exposure issued for its account pursuant to Section 9.2(b), (C) the aggregate L/C Obligations in respect of Participated Letters of Credit and Syndicated Letters of Credit for which Wells Fargo has agreed to serve as a Fronting Bank at any time exceeds the Fronting Sublimit, or (D) the aggregate Credit Exposure for all Lenders at any time exceeds the aggregate Commitments, then in each case, each Account Party shall deliver to the Administrative Agent an amount of Cash Collateral in U.S. Dollars equal to 103% of the aggregate Stated Amount of all Letters of Credit issued for its account outstanding at such time (whether or not any beneficiary under any Letter of Credit shall have drawn or be entitled at such time to draw thereunder); provided that in the case of clauses (C) and (D) above, the Account Parties shall only be required to deliver an amount of Cash Collateral equal to the amount of the applicable excess.  The Administrative Agent shall deposit such Cash Collateral in a special collateral account of each Account Party pursuant to arrangements reasonably satisfactory to the Administrative Agent (such account, the “Cash Collateral Account”) for the benefit of the Administrative Agent, the Issuing Lenders and the Lenders.

 

(b)                                 Each Account Party hereby grants to the Administrative Agent, for the benefit of the Fronting Bank and the other Issuing Lenders, a Lien upon and security interest in its Cash Collateral Account and all amounts held therein from time to time as security for the Letter of Credit Exposure of such Account Party, and for application to its aggregate Obligations, as and when the same shall arise.  The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account for the benefit of the Fronting Bank and the other Issuing Lenders and the Account Parties shall have no interest therein except as set forth in Section 3.6(c).  Other than any interest on the investment of such amounts in Cash Equivalents, which investments shall be made at the direction of the applicable Account Party (unless an Event of Default shall have occurred and be continuing, in which case the determination as to investments shall be made at the option and in the discretion of the Administrative Agent), amounts in the Cash Collateral Account shall not bear interest.  Interest and profits, if any, on such investments shall accumulate in such account.

 

(c)                                  In the event of a drawing, and subsequent payment by any Issuing Lender, under any Letter of Credit at any time during which any amounts are held in the applicable Cash Collateral Account, the Administrative Agent will deliver to such Issuing Lender an amount equal to the Reimbursement Obligation created as a result of such payment (or, if the amounts so held are less than such Reimbursement Obligation, all of such amounts) to reimburse the Issuing Lender therefor.  Any amounts remaining in any Cash Collateral Account (including interest and profits) after the expiration of the Letters of Credit of the applicable Account Party and the reimbursement in full of the Issuing Lenders for all of their respective obligations thereunder shall be held by the Administrative Agent, for the benefit of such Account Party, to be applied against the then due Obligations of such Account Party in such order and manner as the Administrative Agent may direct.  If any Account Party is required to provide cash collateral pursuant hereto, such amount (including interest and profits), to the extent not applied as aforesaid, shall be returned to such Account Party, provided that after giving effect to such return (i) the aggregate Credit Exposure

 

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would not exceed the aggregate Commitments at such time and (ii) no Event of Default shall have occurred and be continuing at such time.  If any Account Party is required to provide Cash Collateral as a result of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to such Account Party within three Business Days after all Events of Default have been cured or waived.

 

SECTION 3.7.                                          Use of Letters of Credit.  The Letters of Credit shall be available for, and each Account Party agrees that it shall use its Letters of Credit to support, its own insurance obligations, obligations under reinsurance agreements and retrocession agreements to which it is a party and similar risk obligations and for general corporate purposes.

 

SECTION 3.8.                                          The Fronting Bank and L/C Agent.  The Fronting Bank and the L/C Agent shall act on behalf of the Lenders with respect to any Letters of Credit issued or administered by it and the documents associated therewith, and such Fronting Bank and L/C Agent shall have all of the rights, benefits and immunities (i) provided to the Administrative Agent in Article X with respect to any acts taken or omissions suffered in connection with Letters of Credit issued or proposed to be issued by it or administered by it and any documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article X included such Fronting Bank or L/C Agent with respect to such acts or omissions, and (ii) as additionally provided herein with respect to the Fronting Bank or the L/C Agent, as applicable

 

SECTION 3.9.                                          Letter of Credit Fees and Other Charges.  The Borrower agrees to pay the following amounts:

 

(i)                                     to the Administrative Agent, for the account of each Lender, a letter of credit fee (the “Letter of Credit Fee”) for each calendar quarter (or portion thereof) in respect of all Letters of Credit issued for the account of the Account Parties and outstanding during such quarter, at a per annum rate equal to Applicable Rate in effect for such fee from time to time on such Lender’s Commitment Percentage of the average daily aggregate Stated Amount of such Letters of Credit.  The Letter of Credit Fee shall be due and payable quarterly in arrears (i) on the last Business Day of each calendar quarter, commencing March 31, 2018 through the Final Maturity Date, (ii) on the Final Maturity Date and (iii) on the Final Expiry Date.  Notwithstanding anything to the contrary contained herein, during any period in which Wells Fargo acts as a Fronting Bank for any Non-NAIC Qualified Lender pursuant to Section 4.16(b), the Letter of Credit Fee payable to such Non-NAIC Qualified Lender shall be reduced by 0.25% per annum, and Wells Fargo shall receive the amount of such reduction from the Borrower for its own account as a fronting fee; and

 

(ii)                                  (A) to the Fronting Bank, for its own account, with respect to each Participated Letter of Credit issued by the Fronting Bank hereunder, a fronting fee as described in the Wells Fargo Fee Letter, on the terms, in the amount and at the times set forth therein, (B) to each Non-NAIC Fronting Bank, a fronting fee as mutually agreed upon between the Borrower, such Non-NAIC Qualified Lender and such Non-NAIC Fronting Bank with respect to each Syndicated Letter of Credit issued for the account of any Account Party (it being understood that unless otherwise agreed between the applicable Non-NAIC Qualified Lender, such Non-NAIC Fronting Bank, the Administrative Agent and the Borrower, such fronting fee shall be paid by reducing the applicable Letter of Credit Fee

 

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otherwise payable to such Non-NAIC Qualified Lender by an amount equal to such fronting fee and paying the same to such Non-NAIC Fronting Bank) and (B) to the Fronting Bank and the L/C Agent, such reasonable fees and expenses as the Fronting Bank or the L/C Agent customarily require in connection with the issuance, amendment, transfer, negotiation, processing and/or administration of letters of credit.

 

SECTION 3.10.                                   Designation of Additional Account Parties.

 

(a)                                 After the Closing Date, the Borrower may at any time and from time to time designate any Wholly-Owned Restricted Subsidiary as an Account Party by delivery to the Administrative Agent of an Account Party Joinder Agreement executed by such Account Party and the Borrower and the satisfaction of the other conditions precedent set forth in Section 3.10(b), and upon such delivery and satisfaction such Subsidiary shall for all purposes of this Agreement be an Account Party and a party to this Agreement until the Borrower shall have executed and delivered to the Administrative Agent an Account Party Termination with respect to such Subsidiary (or any other Account Party as of the Closing Date), whereupon such Subsidiary (or such other Account Party as of the Closing Date) shall cease to be an Account Party and a party to this Agreement.  Notwithstanding the preceding sentence, no Account Party Termination will become effective as to any Account Party at a time when any Letter of Credit issued for the account of such Account Party shall be outstanding hereunder, provided that such Account Party Termination shall be effective to terminate the right of such Account to request further Letters of Credit under this Agreement.  Notwithstanding the foregoing, in the event any Account Party (other than the Borrower) shall cease to be a Wholly-Owned Subsidiary of Borrower, it shall automatically cease to be an Account Party hereunder, other than with respect to Letters of Credit previously issued on its account.

 

(b)                                 The designation of an Account Party pursuant to Section 3.10(a) is subject to the conditions precedent that:

 

(i)                                     An Account Party Joinder Agreement shall have been duly authorized, executed and delivered to the Administrative Agent by the proposed Account Party;

 

(ii)                                  Each of the Administrative Agent, the Lenders, and the Fronting Bank have approved in writing the designation of such proposed Account Party;

 

(iii)                               The Borrower or such proposed Account Party shall have furnished or caused to be furnished to the Administrative Agent the documents required under clauses (ii), (iii) and (iv) of Section 5.1(b) with respect to such proposed Account Party; and

 

(iv)                              The proposed Account Party shall have provided to the Administrative Agent and the Lenders the documentation and other information requested by the Administrative Agent and the Lenders in order to comply with requirements of any Anti-Money Laundering Laws, including, without limitation, the PATRIOT Act and any applicable “know your customer” rules and regulations.

 

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ARTICLE IV.

 

GENERAL LOAN PROVISIONS

 

SECTION 4.1.                                          Interest.

 

(a)                                 Interest Rate Options.  Subject to the provisions of this Section, at the election of the Borrower, (i) Revolving Credit Loans shall bear interest at (A) the Base Rate plus the Applicable Rate or (B) the LIBOR Rate plus the Applicable Rate (provided that the LIBOR Rate shall not be available until three (3) Business Days (or four (4) Business Days with respect to a LIBOR Rate based on a twelve month Interest Period) after the Closing Date unless the Borrower has delivered to the Administrative Agent a written agreement in form and substance reasonably satisfactory to the Administrative Agent indemnifying the Lenders in the manner set forth in Section 4.9 of this Agreement) and (ii) any Swingline Loan shall bear interest at the Base Rate plus the Applicable Rate.  The Borrower shall select the rate of interest and Interest Period, if any, applicable to any Loan at the time a Notice of Borrowing is given or at the time a Notice of Conversion/Continuation is given pursuant to Section 4.2.

 

(b)                                 Default Rate.  Subject to Section 9.3, (i) immediately upon the occurrence and during the continuance of an Event of Default under Section 9.1(a), Section 9.1(b), Section 9.1(h) or Section 9.1(i), or (ii) at the election of the Required Lenders (or the Administrative Agent at the direction of the Required Lenders), upon the occurrence and during the continuance of any other Event of Default, (A) the Borrower shall no longer have the option to request LIBOR Rate Loans, Swingline Loans or Letters of Credit, (B) all outstanding LIBOR Rate Loans shall bear interest at a rate per annum of two percent (2%) in excess of the rate (including the Applicable Rate) then applicable to LIBOR Rate Loans until the end of the applicable Interest Period and thereafter at a rate equal to two percent (2%) in excess of the rate (including the Applicable Rate) then applicable to Base Rate Loans, (C) all outstanding Base Rate Loans and other Obligations arising hereunder or under any other Loan Document shall bear interest at a rate per annum equal to two percent (2%) in excess of the rate (including the Applicable Rate) then applicable to Base Rate Loans or such other Obligations arising hereunder or under any other Loan Document and (D) all accrued and unpaid interest shall be due and payable on demand of the Administrative Agent.  Interest shall continue to accrue on the Obligations after the filing by or against the Borrower of any petition seeking any relief in bankruptcy or under any Debtor Relief Law.

 

(c)                                  Interest Payment and Computation.  Interest on each Base Rate Loan shall be due and payable in arrears on the last Business Day of each calendar quarter commencing March 31, 2018; and interest on each LIBOR Rate Loan shall be due and payable on the last day of each Interest Period applicable thereto, and if such Interest Period extends over three (3) months, at the end of each three (3) month interval during such Interest Period.  All computations of interest for Base Rate Loans when the Base Rate is determined by the Prime Rate shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of fees and interest provided hereunder shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365/366-day year).

 

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(d)                                 Maximum Rate.  In no contingency or event whatsoever shall the aggregate of all amounts deemed interest under this Agreement charged or collected pursuant to the terms of this Agreement exceed the highest rate permissible under any Applicable Law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto.  In the event that such a court determines that the Lenders have charged or received interest hereunder in excess of the highest applicable rate, the rate in effect hereunder shall automatically be reduced to the maximum rate permitted by Applicable Law and the Lenders shall at the Administrative Agent’s option (i) promptly refund to the Borrower any interest received by the Lenders in excess of the maximum lawful rate or (ii) apply such excess to the principal balance of the Obligations.  It is the intent hereof that the Borrower not pay or contract to pay, and that neither the Administrative Agent nor any Lender receive or contract to receive, directly or indirectly in any manner whatsoever, interest in excess of that which may be paid by the Borrower under Applicable Law.

 

SECTION 4.2.                                          Notice and Manner of Conversion or Continuation of Loans.  Provided that no Event of Default has occurred and is then continuing, the Borrower shall have the option to (a) convert at any time following the third Business Day after the Closing Date all or any portion of any outstanding Base Rate Loans (other than Swingline Loans) in a principal amount equal to $5,000,000 or any whole multiple of $1,000,000 in excess thereof into one or more LIBOR Rate Loans and (b) upon the expiration of any Interest Period, (i) convert all or any part of its outstanding LIBOR Rate Loans in a principal amount equal to $3,000,000 or a whole multiple of $1,000,000 in excess thereof into Base Rate Loans (other than Swingline Loans) or (ii) continue such LIBOR Rate Loans as LIBOR Rate Loans.  Whenever the Borrower desires to convert or continue Loans as provided above, the Borrower shall give the Administrative Agent irrevocable prior written notice in the form attached as Exhibit E (a “Notice of Conversion/Continuation”) not later than 12:00 noon three (3) Business Days before the day on which a proposed conversion or continuation of such Loan is to be effective specifying (A) the Loans to be converted or continued, and, in the case of any LIBOR Rate Loan to be converted or continued, the last day of the Interest Period therefor, (B) the effective date of such conversion or continuation (which shall be a Business Day), (C) the principal amount of such Loans to be converted or continued, and (D) the Interest Period to be applicable to such converted or continued LIBOR Rate Loan; provided that if the Borrower wishes to request LIBOR Rate Loans having an Interest Period of twelve months in duration, such notice must be received by the Administrative Agent not later than 12:00 noon four (4) Business Days prior to the requested date of such conversion or continuation, whereupon the Administrative Agent shall give prompt notice to the applicable Lenders of such request and determine whether the requested Interest Period is acceptable to all of them.  If the Borrower fails to give a timely Notice of Conversion/Continuation prior to the end of the Interest Period for any LIBOR Rate Loan, then the applicable LIBOR Rate Loan shall be converted to a Base Rate Loan.  Any such automatic conversion to a Base Rate Loan shall be effective as of the last day of the Interest Period then in effect with respect to the applicable LIBOR Rate Loan.  If the Borrower requests a conversion to, or continuation of, LIBOR Rate Loans, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.  Notwithstanding anything to the contrary herein, a Swingline Loan may not be converted to a LIBOR Rate Loan.  The Administrative Agent shall promptly notify the affected Lenders of such Notice of Conversion/Continuation.

 

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SECTION 4.3.                                          Fees.

 

(i)                                     Commitment Fee.  Commencing on the Closing Date, subject to Section 4.15(a)(iii), the Borrower shall pay to the Administrative Agent, for the account of the Lenders, a non-refundable commitment fee (the “Commitment Fee”) at a rate per annum equal to the Applicable Rate on the average daily unused portion of the Commitment of the Lenders (other than the Defaulting Lenders, if any); provided, that the amount of outstanding Swingline Loans shall not be considered usage of the Commitment for the purpose of calculating the Commitment Fee.  The Commitment Fee shall be payable in arrears on the last Business Day of each calendar quarter during the term of this Agreement commencing March 31, 2018 and ending on the date upon which all Obligations (other than contingent indemnification obligations not then due) arising under the Revolving Credit Facility shall have been indefeasibly and irrevocably paid and satisfied in full, all Letters of Credit have been terminated or expired (or been Cash Collateralized) and the Commitment has been terminated.  The Commitment Fee shall be distributed by the Administrative Agent to the Lenders (other than any Defaulting Lender) pro rata in accordance with such Revolving Credit Lenders’ respective Commitment Percentages.

 

(ii)                                  Other Fees.  The Borrower shall pay to the Arrangers and the Administrative Agent for their own respective accounts fees in the amounts and at the times specified in their Fee Letters.  The Borrower shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified.

 

SECTION 4.4.                                          Manner of Payment.  Each payment by the applicable Credit Party on account of the principal of or interest on the Loans or of any fee, commission or other amounts (including the Reimbursement Obligation) payable to the Lenders under this Agreement shall be made not later than 3:00 p.m. on the date specified for payment under this Agreement to the Administrative Agent at the Administrative Agent’s Office for the account of the Lenders entitled to such payment in Dollars, in immediately available funds and shall be made without any setoff, counterclaim or deduction whatsoever.  Any payment received after 3:00 p.m. shall be deemed to have been made on the next succeeding Business Day for all purposes.  Upon receipt by the Administrative Agent of each such payment, the Administrative Agent shall distribute to each such Lender at its address for notices set forth herein its Commitment Percentage in respect of the relevant Credit Facility (or other applicable share as provided herein) of such payment and shall wire advice of the amount of such credit to each Lender.  Each payment to the Administrative Agent on account of the principal of or interest on the Swingline Loans or of any fee, commission or other amounts payable to the Swingline Lender shall be made in like manner, but for the account of the Swingline Lender.  Each payment to the Administrative Agent of any Issuing Lender’s fees or L/C Participants’ commissions shall be made in like manner, but for the account of such Issuing Lender or the L/C Participants, as the case may be.  Each payment to the Administrative Agent of Administrative Agent’s fees or expenses shall be made for the account of the Administrative Agent and any amount payable to any Lender under Sections 4.9, Section 4.10, Section 4.11 or Section 11.3 shall be paid to the Administrative Agent for the account of the applicable Lender.  Subject to the definition of Interest Period, if any payment under this Agreement shall be specified to be made upon a day which is not a Business Day, it shall be made on the next succeeding day which is a Business Day and such extension of time shall in such case be included in computing

 

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any interest if payable along with such payment.  Notwithstanding the foregoing, if there exists a Defaulting Lender each payment by the Borrower to such Defaulting Lender hereunder shall be applied in accordance with Section 4.15(a)(ii).

 

SECTION 4.5.                                          Evidence of Indebtedness.

 

(a)                                 Extensions of Credit.  The Credit Extensions made by each Lender and each Issuing Lender shall be evidenced by one or more accounts or records maintained by such Lender or such Issuing Lender and by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the Administrative Agent and each Lender or the applicable Issuing Lender shall be conclusive absent manifest error of the amount of the Credit Extension made by the Lenders or such Issuing Lender to the Credit Parties and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Credit Parties hereunder to pay any amount owing with respect to the Obligations.  In the event of any conflict between the accounts and records maintained by any Lender or any Issuing Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.  Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Revolving Credit Note and/or Swingline Note, as applicable, which shall evidence such Lender’s Revolving Credit Loans and/or Swingline Loans, as applicable, in addition to such accounts or records.  Each Lender may attach schedules to its Notes and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.

 

(b)                                 Participations.  In addition to the accounts and records referred to in subsection (a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swingline Loans.  In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

 

SECTION 4.6.                                          Sharing of Payments by Lenders.  If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender’s receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations (other than pursuant to Section 4.8(c), Section 4.9, Section 4.10, Section 4.11 or Section 11.3) greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them; provided that:

 

(a)                                 if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and

 

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(b)                                 the provisions of this paragraph shall not be construed to apply to (A) any payment made by the Credit Parties pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (B) the application of Cash Collateral provided for in Section 4.14 or (C) any payment obtained by a Lender as consideration for the assignment of, or sale of, a participation in any of its Loans or participations in Swingline Loans and Letters of Credit to any assignee or participant, other than to any Credit Party or any of their Subsidiaries or Affiliates (as to which the provisions of this paragraph shall apply).

 

Each Credit Party consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against each Credit Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of each Credit Party in the amount of such participation.

 

SECTION 4.7.                                          Administrative Agent’s Clawback.

 

(a)                                 Funding by Lenders; Presumption by Administrative Agent.  Unless the Administrative Agent shall have received notice from a Lender (i) in the case of Base Rate Loans, not later than 12:00 noon on the date of any proposed borrowing and (ii) otherwise, prior to the proposed date of any borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Sections 2.3(b) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the daily average Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans.  If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period.  If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such borrowing.  Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

 

(b)                                 Payments by the Borrower; Presumptions by Administrative Agent.  Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders, the Issuing Lenders or the Swingline Lender hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders, the Issuing Lenders or the Swingline Lender, as the case may be, the amount due.  In such event, if the Borrower has not in

 

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fact made such payment, then each of the Lenders, the Issuing Lenders or the Swingline Lender, as the case maybe, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, such Issuing Lender or the Swingline Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

 

(c)                                  Nature of Obligations of Lenders.  The obligations of the Lenders under this Agreement to make the Loans, to issue or participate in Letters of Credit and to make payments under this Section, Section 4.11(e), Section 11.3(c) or Section 11.7, as applicable, are several and are not joint or joint and several.  The failure of any Lender to make available its Commitment Percentage of any Loan requested by the Borrower shall not relieve it or any other Lender of its obligation, if any, hereunder to make its Commitment Percentage of such Loan available on the borrowing date, but no Lender shall be responsible for the failure of any other Lender to make its Commitment Percentage of such Loan available on the borrowing date.

 

SECTION 4.8.                                          Changed Circumstances.

 

(a)                                 Circumstances Affecting LIBOR Rate Availability.  In connection with any request for a LIBOR Rate Loan or a conversion to or continuation thereof, if for any reason (i) the Administrative Agent shall determine (which determination shall be conclusive and binding absent manifest error) that Dollar deposits are not being offered to banks in the London interbank Eurodollar market for the applicable amount and Interest Period of such Loan, (ii) the Administrative Agent shall determine (which determination shall be conclusive and binding absent manifest error) that reasonable and adequate means do not exist for the ascertaining the LIBOR Rate for such Interest Period with respect to a proposed LIBOR Rate Loan or (iii) the Required Lenders shall determine (which determination shall be conclusive and binding absent manifest error) that the LIBOR Rate does not adequately and fairly reflect the cost to such Lenders of making or maintaining such Loans during such Interest Period, then the Administrative Agent shall promptly give notice thereof to the Borrower.  Thereafter, until the Administrative Agent notifies the Borrower that such circumstances no longer exist, the obligation of the Lenders to make LIBOR Rate Loans and the right of the Borrower to convert any Loan to or continue any Loan as a LIBOR Rate Loan shall be suspended, and the Borrower shall either (A) repay in full (or cause to be repaid in full) the then outstanding principal amount of each such LIBOR Rate Loan together with accrued interest thereon (subject to Section 4.1(d)), on the last day of the then current Interest Period applicable to such LIBOR Rate Loan; or (B) convert the then outstanding principal amount of each such LIBOR Rate Loan to a Base Rate Loan as of the last day of such Interest Period.

 

(b)                                 Laws Affecting LIBOR Rate Availability.  If, after the date hereof, the introduction of, or any change in, any Applicable Law or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any of the Lenders (or any of their respective Lending Offices) with any request or directive (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, shall make it unlawful or impossible for any of the Lenders (or any of their respective Lending Offices) to honor its obligations hereunder to make or maintain any LIBOR Rate Loan, such Lender shall promptly

 

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give notice thereof to the Administrative Agent and the Administrative Agent shall promptly give notice to the Borrower and the other Lenders.  Thereafter, until the Administrative Agent notifies the Borrower that such circumstances no longer exist, (i) the obligations of the Lenders to make LIBOR Rate Loans, and the right of the Borrower to convert any Loan to a LIBOR Rate Loan or continue any Loan as a LIBOR Rate Loan shall be suspended and thereafter the Borrower may select only Base Rate Loans and (ii) if any of the Lenders may not lawfully continue to maintain a LIBOR Rate Loan to the end of the then current Interest Period applicable thereto, the applicable Loan shall immediately be converted to a Base Rate Loan for the remainder of such Interest Period.

 

(c)                                  Illegality.  If, after the date hereof (or, in the case of any Lender, such later date as such Lender becomes a Lender hereunder) in any applicable jurisdiction, any Issuing Lender or any Lender determines that the introduction of, or any changes in, any Applicable Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Issuing Lender or any Lender to (i) perform any of its obligations hereunder or under any other Loan Document or (ii) to fund or maintain its participation in any Loan or Letter of Credit, such Person shall promptly notify the Administrative Agent, then, upon the Administrative Agent notifying the applicable Credit Party, and until such notice by such Person is revoked, any obligation of such Person to issue, make fund or maintain any such Credit Extension shall be suspended.  Upon receipt of such notice, the Credit Parties shall, unless such Issuing Lender or Lender has been replaced in accordance with Section 4.12, (A) repay that Person’s participation in the Loans or other applicable Obligations on the last day of the Interest Period for each Loan or other Obligation occurring after the Administrative Agent has notified the Borrower or, if earlier, the date specified by such Person in the notice delivered to the Administrative Agent (being no earlier than the last day of any applicable grace period permitted by Applicable Law) and (B) take all reasonable actions requested by such Person to mitigate or avoid such illegality.

 

SECTION 4.9.                                          Indemnity.  The Borrower hereby indemnifies each of the Lenders against any actual loss or expense (including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain a LIBOR Rate Loan or from fees payable to terminate the deposits from which such funds were obtained) which may arise or be attributable to each Lender’s obtaining, liquidating or employing deposits or other funds acquired to effect, fund or maintain any Loan (a) as a consequence of any failure by the Borrower to make any payment when due of any amount due hereunder in connection with a LIBOR Rate Loan, (b) due to any failure of the Borrower to borrow or continue a LIBOR Rate Loan or convert to a LIBOR Rate Loan on a date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation or (c) due to any payment, prepayment or conversion of any LIBOR Rate Loan on a date other than the last day of the Interest Period therefor.  A certificate of such Lender setting forth the basis for determining such amount or amounts necessary to compensate such Lender shall be forwarded to the Borrower through the Administrative Agent and shall be conclusively presumed to be correct save for manifest error.

 

SECTION 4.10.                                   Increased Costs.

 

(a)                                 Increased Costs Generally.  If any Change in Law shall:

 

(i)                                     impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with

 

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or for the account of, or advances, loans or other credit extended or participated in by, any Lender (except any reserve requirement reflected in the LIBOR Rate) or any Issuing Lender;

 

(ii)                                  subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

 

(iii)                               impose on any Lender or any Issuing Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or LIBOR Rate Loans made by such Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such Lender, the Issuing Lender or such other Recipient of making, converting to, continuing or maintaining any Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender, such Issuing Lender or such other Recipient of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender, such Issuing Lender or such other Recipient hereunder (whether of principal, interest or any other amount) then, upon written request of such Lender, such Issuing Lender or other Recipient, the Borrower shall promptly pay to any such Lender, such Issuing Lender or other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, such Issuing Lender or other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

 

(b)                                 Capital Requirements.  If any Lender or any Issuing Lender determines that any Change in Law affecting such Lender or such Issuing Lender or any Lending Office of such Lender or such Lender’s or such Issuing Lender’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender’s or such Issuing Lender’s capital or on the capital of such Lender’s or such Issuing Lender’s holding company, if any, as a consequence of this Agreement, the Commitment of such Lender or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by such Issuing Lender, to a level below that which such Lender or such Issuing Lender or such Lender’s or such Issuing Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or such Issuing Lender’s policies and the policies of such Lender’s or such Issuing Lender’s holding company with respect to capital adequacy and liquidity), then from time to time upon written request of such Lender or such Issuing Lender the Borrower shall promptly pay to such Lender or such Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Lender or such Lender’s or such Issuing Lender’s holding company for any such reduction suffered.  It is acknowledged that this Agreement is being entered into by the Lenders on the understanding that the Lenders will not be required to maintain capital against their Commitment or Swingline Commitment, as applicable, under current Applicable Laws, regulations and regulatory guidelines.  In the event the Lenders shall be advised by any Governmental Authority or shall otherwise determine on the basis of pronouncements of any Governmental Authority that such understanding is incorrect, it is agreed that the Lenders will be

 

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entitled to make claims under this Section (each such claim to be made within a reasonable period of time after the period to which it relates) based upon market requirements prevailing on the date hereof for commitments under comparable credit facilities against which capital is required to be maintained.

 

(c)                                  Certificates for Reimbursement.  A certificate of a Lender, or an Issuing Lender or such other Recipient setting forth the amount or amounts necessary to compensate such Lender or such Issuing Lender, such other Recipient or any of their respective holding companies, as the case may be, as specified in paragraph (a) or (b) of this Section and delivered to the Borrower, shall be conclusive absent manifest error.  The Borrower shall pay such Lender or such Issuing Lender or such other Recipient, as the case may be, the amount shown as due on any such certificate within ten (10) Business Days after receipt thereof.  Notwithstanding the foregoing, the Borrower shall be not required to pay such amounts to any Lender, Issuing Lender or other Recipient unless such Lender, Issuing Lender or other Recipient certifies that it is the general practice of such Lender, Issuing Lender or Recipient at such time to request compensation for such matters from similarly situated borrowers.

 

(d)                                 Delay in Requests.  Failure or delay on the part of any Lender or any Issuing Lender or such other Recipient to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or such Issuing Lender’s or such other Recipient’s right to demand such compensation; provided that the Borrower shall not be required to compensate any Lender or any Issuing Lender or any other Recipient pursuant to this Section for any increased costs incurred or reductions suffered more than six (6) months prior to the date that such Lender or such Issuing Lender or such other Recipient, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions, and of such Lender’s or such Issuing Lender’s or such other Recipient’s intention to claim compensation therefor (except that if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect thereof).

 

SECTION 4.11.                                   Taxes.

 

(a)                                 Defined Terms.  For purposes of this Section 4.11, the term “Lender” includes any Issuing Lender and the term “Applicable Law” includes FATCA.

 

(b)                                 Payments Free of Taxes.  Any and all payments by or on account of any obligation of any Credit Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by Applicable Law.  If any Applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with Applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Credit Party shall be increased as necessary so that, after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section), the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.  Upon becoming aware that it must make a deduction or withholding of any Tax pursuant to this Section 4.11(b) that requires an increased sum payable by

 

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a Credit Party or is otherwise an Indemnified Tax, the applicable Withholding Agent shall promptly notify the Credit Parties and the Administrative Agent.

 

(c)                                  Payment of Other Taxes by the Credit Parties.  The Credit Parties shall timely pay to the relevant Governmental Authority in accordance with Applicable Law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

 

(d)                                 Indemnification by the Credit Parties.  The Credit Parties shall jointly and severally indemnify each Recipient, within ten (10) Business Days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the applicable Credit Party by a Recipient (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Recipient, shall be conclusive absent manifest error.

 

(e)                                  Indemnification by the Lenders.  Each Lender shall severally indemnify the Administrative Agent, within ten (10) Business Days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Credit Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Credit Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.9(d) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative Agent to setoff and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (e).

 

(f)                                   Evidence of Payments.  As soon as practicable after any payment of Taxes by any Credit Party to a Governmental Authority pursuant to this Section 4.11, such Credit Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

(g)                                  Status of Lenders.

 

(i)                                     Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will

 

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permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 4.11(g)(ii)(A), (ii)(B), and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission (A) would subject such Lender to any material unreimbursed cost or expense or (B) would materially prejudice the legal or commercial position of such Lender.

 

(ii)                                  Without limiting the generality of the foregoing:

 

(A)                               Any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from United States federal backup withholding tax;

 

(B)                               any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

 

(1)                                 in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN-E establishing an exemption from, or reduction of, United States feder6al withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN-E establishing an exemption from, or reduction of, United States federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

 

(2)                                 executed copies of IRS Form W-8ECI;

 

(3)                                 in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit H-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”

 

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described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN-E; or

 

(4)                                 to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit H-2 or Exhibit H-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit H-4 on behalf of each such direct and indirect partner;

 

(C)                               any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in United States federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by Applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

 

(D)                               if a payment made to a Lender under any Loan Document would be subject to United States federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

 

(h)                                 Treatment of Certain Refunds.  If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been

 

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indemnified pursuant to this Section 4.11 (including by the payment of additional amounts pursuant to this Section 4.11), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (h), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (h) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.  This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

 

(i)                                     Survival.  Each party’s obligations under this Section 4.11 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.

 

SECTION 4.12.                                   Mitigation Obligations; Replacement of Lenders.

 

(a)                                 Designation of a Different Lending Office.  If any Lender asserts that it has become illegal for it to issue, make fund or maintain any such Credit Extension under Section 4.8(c), requests compensation under Section 4.9, or requires any Credit Party to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.11, then such Lender shall, at the request of the Borrower, use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would avoid any illegality described in Section 4.8(c) or eliminate or reduce amounts payable pursuant to Section 4.9 or Section 4.11, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

 

(b)                                 Replacement of Lenders.  If any Lender asserts that it has become illegal for it to issue, make fund or maintain any such Credit Extension under Section 4.8(c), requests compensation under Section 4.9, or if any Credit Party is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.11, and, in each case, such Lender has declined or is unable to designate a different Lending Office in accordance with Section 4.12(a), or if any Lender is a Defaulting Lender or a Non-Consenting Lender or ceases to be a NAIC Qualified Lender (unless such Lender

 

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has in effect a Fronting Agreement with a Person which is listed on the NAIC Qualified Institution List to act as a Fronting Bank in accordance with Section 4.16), then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.9), all of its interests, rights (other than its existing rights to payments pursuant to Section 4.9 or Section 4.11) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:

 

(i)                                     the Borrower shall have paid or cause to be paid to the Administrative Agent the assignment fee (if any) specified in Section 11.9;

 

(ii)                                  such Lender shall have received payment of an amount equal to the outstanding principal of any of its Loans and L/C Advances, its funded participations in Letters of Credit and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 4.9 from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

 

(iii)                               in the case of any such assignment resulting from a claim for compensation under Section 4.9 or payments required to be made pursuant to Section 4.11, such assignment will result in a reduction in such compensation or payments thereafter;

 

(iv)                              such assignment does not conflict with Applicable Law; and

 

(v)                                 in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

 

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply and, in the case of any request for compensation or Indemnified Taxes or additional amounts, such requests have been rescinded.

 

(c)                                  Selection of Lending Office.  Subject to Section 4.12(a), each Lender may make any Loans to the Borrower through any Lending Office, provided that the exercise of this option shall not affect the obligations of the Borrower to repay the Loan in accordance with the terms of this Agreement or otherwise alter the rights of the parties hereto.

 

SECTION 4.13.                                   Increase in Commitments.

 

(a)                                 Request for Increase.  Provided there exists no Default or Event of Default, upon notice to the Administrative Agent (which shall promptly notify the Lenders), the Borrower may from time to time, request an increase in the aggregate Commitments by an aggregate amount (for all such requests) not exceeding $100,000,000; provided that any such request for an increase shall be in a minimum amount of $5,000,000.  At the time of sending such notice, the Borrower (in consultation with the Administrative Agent) shall specify the time period within which each

 

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Lender is requested to respond (which shall in no event be less than ten (10) Business Days from the date of delivery of such notice to the Lenders).

 

(b)                                 Lender Elections to Increase.  Each Lender shall notify the Administrative Agent within such time period whether or not it agrees to increase its Commitment and, if so, whether by an amount equal to, greater than, or less than its Commitment Percentage of such requested increase.  Any Lender not responding within such time period shall be deemed to have declined to increase its Commitment.

 

(c)                                  Notification by Administrative Agent; Additional Lenders.  The Administrative Agent shall notify the Borrower and each Lender of the Lenders’ responses to each request made hereunder.  To achieve the full amount of a requested increase and subject to the approval of the Administrative Agent, the Fronting Bank and the Swingline Lender, the Borrower may also invite one or more Eligible Assignees to become Lenders pursuant to a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent and the Borrower.

 

(d)                                 Effective Date and Allocations.  If the aggregate Commitments are increased in accordance with this Section, the Administrative Agent and the Borrower shall determine the effective date (the “Increase Effective Date”) and the final allocation of such increase.  The Administrative Agent shall promptly notify the Borrower and the Lenders of the final allocation of such increase and the Increase Effective Date.

 

(e)                                  Conditions to Effectiveness of Increase.  As a condition precedent to such increase, the Borrower shall deliver to the Administrative Agent a certificate dated as of the Increase Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of the Borrower (x) certifying and attaching the resolutions adopted by the board of directors of the Borrower approving or consenting to such increase, and (y) certifying that, before and after giving effect to such increase, (A) the representations and warranties contained in Article VI and the other Loan Documents are true and correct in all material respects on and as of the Increase Effective Date (except to the extent any such representation and warranty is qualified by materiality or reference to Material Adverse Effect, in which case, such representation and warranty shall be true and correct in all respects), except to the extent that such representations and warranties specifically refer to an earlier date, in which case such representations and warranties are true and correct in all material respects as of such earlier date (except to the extent any such representation and warranty is qualified by materiality or reference to Material Adverse Effect, in which case, such representation and warranty shall be true and correct in all respects), and (B) no Default or Event of Default exists.  The Borrower shall prepay any Revolving Credit Loans outstanding on the Increase Effective Date (and pay any additional amounts required pursuant to Section 4.9) to the extent necessary to keep the outstanding Revolving Credit Loans ratable with any revised Commitment Percentages arising from any nonratable increase in the Commitments under this Section, after giving effect to any assignments or reallocations of Revolving Credit Loans entered into among the Lenders substantially concurrently with the effectiveness of such increase.

 

(f)                                   Conflicting Provisions.  This Section shall supersede any provisions in Section 4.6 or Section 11.2 to the contrary.

 

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SECTION 4.14.                                   Cash Collateral.  If there shall exist a Defaulting Lender, within one Business Day following the written request of the Administrative Agent, the Fronting Bank (with a copy to the Administrative Agent) or the Swingline Lender (with a copy to the Administrative Agent), the Borrower shall provide Cash Collateral in an amount not less than the applicable Minimum Collateral Amount (determined after giving effect to Section 4.15(a)(v) and any Cash Collateral provided by such Defaulting Lender).

 

(a)                                 Grant of Security Interest.  Each Account Party, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Administrative Agent, for the benefit of the Fronting Bank and the Lenders, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the obligations to which such Cash Collateral may be applied pursuant to subsection (b) below.  If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent, the Fronting Bank and the Lenders as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Account Parties will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).

 

(b)                                 Application.  Notwithstanding anything to the contrary contained in this Agreement or any other Loan Document, Cash Collateral provided under Section 4.14(a) or Section 4.15 in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of its Participated Letter of Credit Exposure (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

 

(c)                                  Termination of Requirement.  Cash Collateral (or the appropriate portion thereof) provided to reduce the Fronting Exposure of the Fronting Bank shall no longer be required to be held as Cash Collateral pursuant to this Section 4.14 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the Administrative Agent that there exists excess Cash Collateral; provided that, subject to Section 4.14, the Person providing Cash Collateral and the Fronting Bank may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations.

 

SECTION 4.15.                                   Defaulting Lenders.

 

(a)                                 Defaulting Lender Adjustments.  Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law:

 

(i)                                     Waivers and Amendments.  Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders and Section 11.2.

 

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(ii)                                  Defaulting Lender Waterfall.  Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article IX or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 11.4 shall be applied at such time or times as may be determined by the Administrative Agent as follows:  first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the Issuing Lenders or the Swingline Lender hereunder; third, to Cash Collateralize the Fronting Exposure of the Fronting Bank with respect to such Defaulting Lender in accordance with Section 4.14; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan or funded participation in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (A) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans and funded participations under this Agreement and (B) Cash Collateralize the Issuing Lenders’ future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 4.14; sixth, to the payment of any amounts owing to the Lenders, the Issuing Lenders or the Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, any Issuing Lender or the Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (1) such payment is a payment of the principal amount of any Loans or funded participations in Letters of Credit or Swingline Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (2) such Loans were made or the related Letters of Credit or Swingline Loans were issued at a time when the conditions set forth in Section 5.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and funded participations in Letters of Credit or Swingline Loans owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or funded participations in Letters of Credit or Swingline Loans owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swingline Loans are held by the Lenders pro rata in accordance with their respective Commitment Percentages without giving effect to Section 4.15(a)(iv).  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 4.15(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

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(iii)                               Certain Fees.

 

(A)                               No Defaulting Lender shall be entitled to receive any Commitment Fee for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

 

(B)                               A Defaulting Lender shall be entitled to receive Letter of Credit Fees pursuant to Section 3.9 for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Commitment Percentage of the Stated Amount of Letters of Credit for which such Defaulting Lender has provided Cash Collateral required pursuant to Section 4.14.

 

(C)                               With respect to any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to clause (B) above, the Borrower shall pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s Participated Letter of Credit Exposure that has been reallocated to such Non-Defaulting Lender pursuant to Section 4.15(a)(iv).

 

(D)                               Notwithstanding the foregoing, if any Defaulting Lender’s Participated Letter of Credit Exposure is not Cash Collateralized or reallocated pursuant to Section 4.15(a)(iv), then, without prejudice to any rights or remedies of the Fronting Bank or any Lender hereunder, all Letter of Credit Fees that otherwise would have been payable to such Defaulting Lender with respect to such Defaulting Lender’s Participated Letter of Credit Exposure shall be payable to the Fronting Bank until such Defaulting Lender’s Participated Letter of Credit Exposure is Cash Collateralized.

 

(iv)                              Reallocation of Participations.  All or any part of such Defaulting Lender’s Participated Letter of Credit Exposure shall be automatically reallocated (effective on the day such Lender becomes a Defaulting Lender) among the Non-Defaulting Lenders in accordance with their respective Commitment Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that such reallocation does not cause the Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Commitment.  Subject to Section 11.22, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

 

(v)                                 Cash Collateral, Repayment of Swingline Loans.  If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under law, (x) first, repay all Swingline Loans and (y) second, Cash Collateralize the Issuing Lenders’ Fronting Exposure in accordance with the procedures set forth in Section 4.14.

 

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(b)                                 Fronting Bank; Swingline Lender.  So long as any Lender is a Defaulting Lender, (i) the Fronting Bank shall not be required to issue any Participated Letter of Credit unless the Commitments of the Non-Defaulting Lenders and/or Cash Collateral provided by the Account Parties or the Defaulting Lender are at least equal to the Stated Amount of such Participated Letter of Credit, and participating interests in any such newly issued Participated Letter of Credit shall be allocated among non-Defaulting Lenders (and Defaulting Lenders shall not participate therein) and (ii) the Swingline Lender shall not be under any obligation to make any Swingline Loan if it shall determine (which determination shall be conclusive and binding absent manifest error) that it has, or by such Credit Extension may have, Fronting Exposure.

 

(c)                                  Defaulting Lender Cure.  If the Borrower, the Administrative Agent, the L/C Agent, the Swingline Lender and the Fronting Bank agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), such Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swingline Loans to be held pro rata by the Lenders in accordance with the Commitments without giving effect to Section 4.15(a)(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Credit Parties while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

SECTION 4.16.                                   Provisions Relating to NAIC Qualified Lenders.

 

(a)                                 Each Lender represents that on the date of this Agreement (or, if later, the date such Lender becomes a party to this Agreement), it is a NAIC Qualified Lender or has entered into a Fronting Agreement with a NAIC Qualified Lender in accordance with the requirements of this Section 4.16.  Each Lender agrees to use commercially reasonable efforts in order to, at all times, (i) be listed on the NAIC Qualified Institution List or (ii) if such Lender is not listed on the NAIC Qualified Institution List, maintain in effect a Fronting Agreement with a Person which a NAIC Qualified Lender to act as a Fronting Bank for such Lender in respect of its obligations under the Syndicated Letters of Credit (which Person, prior to entering in such Fronting Agreement, shall be subject to the prior written consent of each of the Borrower and the Administrative Agent, such consent, in each case, shall not be unreasonably withheld).  If any Lender shall enter into a Fronting Agreement hereunder at any time, it shall promptly furnish a copy thereof to the Borrower and the Administrative Agent.  In connection with the execution or termination of any Fronting Agreement, the L/C Agent is authorized to amend or replace each outstanding Syndicated Letter of Credit to add or remove the applicable Lender and Fronting Bank, as the case may be.  Each Lender shall promptly provide evidence to the Administrative Agent or the Borrower of such Lender’s compliance with the requirements of this Section 4.16 upon request by the Administrative Agent or the Borrower.

 

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(b)                                 If at any time any Lender shall cease to be a NAIC Qualified Lender and does not have a Fronting Agreement in effect with a Fronting Bank, such Lender shall promptly notify the Borrower and the Administrative Agent and forthwith comply with its obligations under this Section 4.16.  Upon receipt of such notice, the Borrower may request to have another Lender or another Person that is a NAIC Qualified Lender (which Person shall be subject to the prior written consent of each of the Borrower and the Administrative Agent, such consent, in each case, shall not be unreasonably withheld) act as Fronting Bank for such Non-NAIC Qualified Lender with respect to any Syndicated Letter of Credit Exposure attributable to such Non-NAIC Qualified Lender.  Any such Lender or other Person may, in its sole discretion, agree to act as a Fronting Bank with respect to such Syndicated Letter of Credit Exposure, but has no obligation to do so.  After giving effect to the issuance of any such Syndicated Letter of Credit for which Wells Fargo has so agreed to act as Fronting Bank, the Fronting Obligations shall not exceed the Fronting Sublimit.

 

(c)                                  In the event any Lender or other Person agrees to act as a Fronting Bank pursuant to Section 4.16(b), the L/C Agent is authorized, upon the Borrower’s request, to amend or replace each outstanding Syndicated Letter of Credit to remove the applicable Non-NAIC Qualified Lender and add such Person to reflect the application of this Section 4.16 and to issue new Syndicated Letters of Credit reflecting the application of this Section 4.16.  With respect to any Syndicated Letter of Credit as to which any Lender or other Person acts as a Fronting Bank for a Non-NAIC Qualified Lender, such Fronting Bank shall be deemed to have sold and transferred to such Non-NAIC Qualified Lender, and such Non-NAIC Qualified Lender shall be deemed irrevocably and unconditionally to have purchased and received from such Fronting Bank, without recourse or warranty, an undivided interest and participation in such Non-NAIC Qualified Syndicated Letter of Credit Exposure.  The purchase and funding of such participation shall be governed by the provisions of Section 3.2(c), Section 3.2(d) and Section 3.2(f), mutatis mutandis.

 

ARTICLE V.

 

CONDITIONS OF CLOSING AND ISSUANCE

 

SECTION 5.1.                                          Conditions to Closing and Initial Credit Extensions.  The obligation of the Lenders to close this Agreement and to make the initial Credit Extensions, if any, on the Closing Date is subject to the satisfaction of each of the following conditions:

 

(a)                                 Executed Loan Documents.  This Agreement and a Revolving Credit Note in favor of each Lender requesting a Revolving Credit Note at least two Business Days prior to the Closing Date, shall have been duly authorized, executed and delivered to the Administrative Agent by the parties thereto.

 

(b)                                 Closing Certificates; Etc. The Administrative Agent shall have received each of the following in form and substance reasonably satisfactory to the Administrative Agent:

 

(i)                                     Officer’s Certificate.  A certificate from a Responsible Officer of the Borrower to the effect that (A) all representations and warranties of the Credit Parties contained in this Agreement and the other Loan Documents are true, correct and complete in all material respects (except to the extent any such representation and warranty is

 

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qualified by materiality or reference to Material Adverse Effect, in which case, such representation and warranty shall be true, correct and complete in all respects); (B) as of the Closing Date, no Default or Event of Default has occurred and is continuing; and (C) since December 31, 2016, except as disclosed in any Information Materials, no event has occurred or condition arisen, either individually or in the aggregate, that has had, or would reasonably be expected to have a Material Adverse Effect.

 

(ii)                                  Certificate of Secretary of each Credit Party.  A certificate of a Responsible Officer of each Credit Party certifying as to the incumbency and genuineness of the signature of each officer of such Credit Party executing Loan Documents to which it is a party and certifying that attached thereto is (A) a true, correct and complete copy of the articles or certificate of incorporation or formation (or equivalent), as applicable, of such Credit Party and all amendments thereto, certified as of a recent date by the appropriate Governmental Authority in its jurisdiction of incorporation, organization or formation (or equivalent), as applicable, (B) a true, correct and complete copy of the bylaws or other governing document of such Credit Party as in effect on the Closing Date, (C) a true, correct and complete copy of resolutions duly adopted by the board of directors (or other governing body) of such Credit Party authorizing and approving the transactions contemplated hereunder and the execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party, and (D) a copy of any applicable certificate required to be delivered pursuant to Section 5.1(b)(iii) required to be satisfied as of the Closing Date.

 

(iii)                               Certificates of Good Standing.  Certificates as of a recent date of the good standing of each Credit Party under the laws of its jurisdiction of incorporation, organization or formation (or equivalent), as applicable, to the extent available in such jurisdiction.

 

(iv)                              Opinions of Counsel.  Opinions of counsel to the Credit Parties addressed to the Administrative Agent and the Lenders with respect to the Credit Parties, the Loan Documents and such other matters as the Administrative Agent shall request (which such opinions shall expressly permit reliance by permitted successors and assigns of the Administrative Agent and the Lenders).

 

(c)                                  Lien Search.  The Administrative Agent shall have received the results of a Lien search, in form and substance reasonably satisfactory to the Administrative Agent, indicating among other things that the assets of each such Credit Party are free and clear of any Lien (except for Permitted Liens).

 

(d)                                 No Injunction, Etc.  No action, proceeding or investigation shall have been instituted, threatened in writing or proposed in writing against any Credit Party before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain substantial damages in respect of, or which is related to or arises out of this Agreement or the other Loan Documents or the consummation of the transactions contemplated hereby or thereby.

 

(e)                                  Payment at Closing.  The Borrower shall have paid (i) to the Arrangers and the Administrative Agent, the fees required under the Fee Letters to be paid on the Closing Date, in

 

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the amounts due and payable on the Closing Date as required by the terms thereof, (ii) to the Administrative Agent, the initial payment of the annual administrative fee described in the Wells Fargo Fee Letter, and (iii) all other fees and reasonable expenses of the Arrangers, the Administrative Agent, the L/C Agent, the Issuing Lenders and the Lenders required hereunder to be paid on or prior to the Closing Date (including reasonable fees and expenses of counsel, subject to any limitations set forth herein) in connection with this Agreement, the other Loan Documents and the transactions contemplated hereby.

 

(f)                                   PATRIOT Act, etc.  The Credit Parties shall have provided to the Administrative Agent and the Lenders the documentation and other information requested by the Administrative Agent and the Lenders in order to comply with requirements of any Anti-Money Laundering Laws, including, without limitation, the PATRIOT Act and any applicable “know your customer” rules and regulations.

 

Without limiting the generality of the provisions of Section 10.3, for purposes of determining compliance with the conditions specified in this Section 5.1, the Administrative Agent and each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

 

SECTION 5.2.                                          Conditions Precedent to all Credit Extensions.  The obligations of the Lenders to make or participate in any Credit Extensions (including the initial Credit Extensions) and/or any Issuing Lender to issue or extend any Letter of Credit are subject to the satisfaction of the following conditions precedent on the relevant borrowing, issuance or extension date:

 

(a)                                 Continuation of Representations and Warranties.  The representations and warranties contained in this Agreement and the other Loan Documents shall be true and correct in all material respects, except for any representation and warranty that is qualified by materiality or reference to Material Adverse Effect, which such representation and warranty shall be true and correct in all respects, on and as of such borrowing, issuance or extension date with the same effect as if made on and as of such date (except for any such representation and warranty that by its terms is made only as of an earlier date, which representation and warranty shall remain true and correct in all material respects as of such earlier date, except for any representation and warranty that is qualified by materiality or reference to Material Adverse Effect, which such representation and warranty shall be true and correct in all respects as of such earlier date).

 

(b)                                 No Existing Default.  No Default or Event of Default shall have occurred and be continuing (i) on the borrowing date with respect to such Loan or after giving effect to the Loans to be made on such date or (ii) on the issuance or extension date with respect to such Letter of Credit or after giving effect to the issuance or extension of such Letter of Credit on such date.

 

(c)                                  Notice.  The Administrative Agent shall have received a Notice of Borrowing or Letter of Credit Application, as applicable, from the Borrower as required hereunder.

 

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(d)                                 Miscellaneous.  In addition to the foregoing, each Issuing Lender shall be under no obligation to issue any Letter of Credit (and, with respect to Syndicated Letters of Credit, the L/C Agent shall not Issue any Syndicated Letter of Credit on behalf of the Issuing Lenders) if:

 

(i)                                     any order, judgment or decree of any Governmental Authority or arbitrator having jurisdiction over such Issuing Lender shall by its terms enjoin or restrain the issuance of such Letter of Credit or any law applicable to such Issuing Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over it shall prohibit, or request that it refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon it with respect to such Letter of Credit any restriction or reserve or capital requirement (for which such issuing Lender is not otherwise compensated) not in effect on the Closing Date, or any unreimbursed loss, cost or expense which was not applicable or in effect as of the Closing Date and which such Issuing Lender in good faith deems material to it;

 

(ii)                                  the L/C Agent or the Fronting Bank, as applicable, shall have delivered a Notice of Non-Extension with respect to such Letter of Credit;

 

(iii)                               the Administrative Agent has received written notice from the Fronting Bank, the L/C Agent or the Required Lenders, as the case may be, or from the applicable Account Party, on or prior to the Business Day prior to the requested date of the issuance of such Letter of Credit, that one or more of the applicable conditions under this Section 5.2 is not then satisfied;

 

(iv)                              the expiry date of such Letter of Credit would occur more than thirteen months after the date of issuance or last extension unless the Required Lenders have approved such expiry date;

 

(v)                                 the expiry date of such Letter of Credit occurs after the Final Maturity Date, unless all of the Lenders have approved such expiry date in writing;

 

(vi)                              such Letter of Credit is not substantially in form and substance reasonably acceptable to the Fronting Bank or the L/C Agent (acting on behalf of the Issuing Lenders);

 

(vii)                           such Letter of Credit is denominated in a currency other than U.S. Dollars;

 

(viii)                        immediately after giving effect thereto, either (A) any Lender’s Credit Exposure would exceed such Lender’s Commitment at such time, or (B) the aggregate Credit Exposure of the Lenders would exceed the aggregate Commitments at such time;

 

(ix)                              with respect to the issuance of any Participated Letter of Credit or Syndicated Letter of Credit for which Wells Fargo has agreed to serve as a Fronting Bank, immediately after giving effect thereto, the aggregate L/C Obligations outstanding in respect of all Participated Letters of Credit and such Syndicated Letters of Credit would exceed the Fronting Sublimit at such time; or

 

(x)                                 in the case of a Syndicated Letter of Credit, any Lender is a Non-NAIC Qualified Lender at such time (unless such Lender has in effect a Fronting Agreement with

 

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a Person which is listed on the NAIC Qualified Institution List to act as a Fronting Bank in accordance with Section 4.16 or Wells Fargo acts as a Fronting Bank for such Non-NAIC Qualified Lender in accordance with Section 4.16(b)).

 

ARTICLE VI.

 

REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES

 

To induce the Administrative Agent and Lenders to enter into this Agreement and to induce the Lenders to make Credit Extensions, the Credit Parties hereby represent and warrant to the Administrative Agent, the Issuing Lenders and the Lenders both immediately before and immediately after giving effect to the transactions contemplated hereunder, which representations and warranties shall be deemed made on the Closing Date and as otherwise set forth in Section 5.2, that:

 

SECTION 6.1.                                          Organization; Power; Qualification.  Each Credit Party and each Material Subsidiary thereof (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, (b) has the power and authority to own its Properties and to carry on its business as now being and hereafter proposed to be conducted and (c) is duly qualified and authorized to do business in each jurisdiction in which the character of its Properties or the nature of its business requires such qualification and authorization except in jurisdictions where the failure to be so qualified or in good standing would not reasonably be expected to result in a Material Adverse Effect.  No Credit Party is an EEA Financial Institution.

 

SECTION 6.2.                                          Ownership.  Each Restricted Subsidiary of each Credit Party as of the Closing Date, and the percentage ownership of each owner in such Restricted Subsidiary as of the Closing Date, is listed on Schedule 6.2.  All outstanding shares of the Parent and each of its applicable Restricted Subsidiaries have been duly authorized and validly issued and are fully paid and nonassessable (to the extent such concept is applicable) and not subject to any preemptive or similar rights, except as described in Schedule 6.2.  Each direct or indirect owner of the Parent that beneficially owns 10% or more of the aggregate Equity Interests of the Parent, together with such owner’s percentage ownership, is described on Schedule 6.2.  As of the Closing Date, there are no outstanding stock purchase warrants, subscriptions, options, securities, instruments or other rights of any type or nature whatsoever, which are convertible into, exchangeable for or otherwise provide for or require the issuance of Equity Interests of any Credit Party or any Restricted Subsidiary thereof, except as described on Schedule 6.2.

 

SECTION 6.3.                                          Authorization; Enforceability.  Each Credit Party has the right, power and authority and has taken all necessary corporate and other action to authorize the execution, delivery and performance of this Agreement and each of the other Loan Documents to which it is a party in accordance with their respective terms.  This Agreement and each of the other Loan Documents have been duly executed and delivered by the duly authorized officers of each Credit Party that is a party thereto, and each such document constitutes the legal, valid and binding obligation of each Credit Party, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal Debtor Relief Laws from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies.

 

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SECTION 6.4.                                          Compliance of Agreement, Loan Documents and Credit Extensions with Laws, Etc.  The execution, delivery and performance by each Credit Party of the Loan Documents to which each such Person is a party, in accordance with their respective terms, the Credit Extensions hereunder and the transactions contemplated hereby or thereby do not and will not, by the passage of time, the giving of notice or otherwise, (a) require any Governmental Approval or violate any Applicable Law relating to any Credit Party where the failure to obtain such Governmental Approval or such violation would reasonably be expected to have a Material Adverse Effect, (b) conflict with, result in a breach of or constitute a default under the articles of incorporation, bylaws or other organizational documents of any Credit Party, (c) conflict with, result in a breach of or constitute a default under any indenture, agreement or other instrument to which such Person is a party or by which any of its properties may be bound or any Governmental Approval relating to such Person, which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (d) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by such Person other than Permitted Liens or (e) require any consent or authorization of, filing with, or other act in respect of, an arbitrator or Governmental Authority and no consent of any other Person is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement other than consents, authorizations, filings or other acts or consents for which the failure to obtain or make would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.5.                                          Compliance with Law; Governmental Approvals.  Each Credit Party and each Material Subsidiary thereof (a) has all Governmental Approvals required by any Applicable Law for it to conduct its business, each of which is in full force and effect, (b) is in compliance with each Governmental Approval applicable to it and in compliance with all other Applicable Laws relating to it or any of its respective properties and (c) has timely filed all material reports, documents and other materials required to be filed by it under all Applicable Laws with any Governmental Authority, except in each case of clauses (a), (b) or (c) where the failure to have, comply or file would not reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.6.                                          Tax Returns and Payments.  Each Credit Party and each Material Subsidiary thereof has timely filed all material federal, state, provincial, local and foreign tax returns and reports required to be filed by it and has paid all Taxes, assessments, fees and other charges levied upon it or upon its properties that are shown thereon as due and payable, other than (i) those Taxes, assessments, fees and other charges that are being contested in good faith and by proper proceedings and for which adequate reserves have been established in accordance with GAAP or (ii) where the failure to file such returns and reports or the failure to pay such Taxes, assessments, fees and other charges would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  To the knowledge of the Credit Parties, there is no ongoing audit or examination or other investigation by any Governmental Authority of the tax liability of any Credit Party or any Restricted Subsidiary thereof the outcome of which would reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.7.                                          Intellectual Property Matters.  Each Credit Party and each Material Subsidiary thereof owns or possesses legal rights to use all material franchises, licenses, copyrights, copyright applications, patents, patent rights or licenses, patent applications, trademarks, trademark rights, service mark, service mark rights, trade names, trade name rights,

 

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copyrights and other rights with respect to the foregoing which taken as a whole are reasonably necessary to conduct its business where the failure to own or possess such legal rights would not reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.8.                                          Environmental Matters.  Each of the Credit Parties and each Material Subsidiary thereof is in compliance with existing Environmental Laws and there are no written pending environmental claims alleging potential liability or responsibility for any violation of any Environmental Law on their respective businesses, operations and properties, in each case are reasonably likely to be adversely determined and with respect to which, if adversely determined, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.9.                                          Employee Benefit Matters.

 

(a)                                 Each Credit Party and each ERISA Affiliate is in compliance with all applicable provisions of ERISA, the Code and the regulations and published interpretations thereunder with respect to all Benefit Plans except for any required amendments for which the remedial amendment period as defined in Section 401(b) of the Code has not yet expired and except where a failure to so comply would not reasonably be expected to have a Material Adverse Effect.

 

(b)                                 No Termination Event has occurred or is reasonably expected to occur except for such events that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

 

(c)                                  Each Foreign Pension Plan has been maintained in compliance with its terms and with the requirements of any and all Applicable Law and has been maintained, where required, in good standing with applicable regulatory authorities, except where the failure to do any of the foregoing has not had, or would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.  All contributions required to be made with respect to a Foreign Pension Plan have been timely made, except where the failure to do any of the foregoing has not had, or would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.  No Credit Party or any of its Subsidiaries has incurred any obligation in connection with the termination of, or withdrawal from, any Foreign Pension Plan, except for any obligations which have not had, or would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.  The present value of the accrued benefit liabilities (whether or not vested) under each Foreign Pension Plan, determined as of the end of the most recently ended fiscal year of the Borrower on the basis of actuarial assumptions, each of which is reasonable, did not exceed the current value of the assets of such Foreign Pension Plan allocable to such benefit liabilities (any such excess a “value shortfall”), except for any such value shortfalls which have not had, or would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

 

SECTION 6.10.                                   Margin Stock.  No Credit Party nor any Restricted Subsidiary thereof is engaged principally or as one of its activities in the business of extending credit for the purpose of “purchasing” or “carrying” any “margin stock” (as each such term is defined or used, directly or indirectly, in Regulation U of the Board of Governors of the Federal Reserve System).  No part of the proceeds of any of the Loans or Letters of Credit will be used for purchasing or carrying margin

 

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stock or for any purpose which violates, or which would be inconsistent with, the provisions of Regulation T, U or X of such Board of Governors.

 

SECTION 6.11.                                   Government Regulation.  No Credit Party nor any Material Subsidiary thereof is an “investment company” or a company “controlled” by an “investment company” (as each such term is defined or used in the Investment Company Act).

 

SECTION 6.12.                                   Financial Statements.  The Borrower has heretofore furnished to the Administrative Agent and Lenders copies of (i) the audited consolidated balance sheets of both the Borrower and its Restricted Subsidiaries and the Parent and its Restricted Subsidiaries for the fiscal years ending December 31, 2015 and 2016 and the related statements of income, shareholders’ equity and cash flows for the fiscal years then ended, together with the opinion of PricewaterhouseCoopers LLP thereon, prepared in accordance with GAAP and (ii) the unaudited consolidated balance sheet of both the Borrower and its Restricted Subsidiaries and the Parent and its Restricted Subsidiaries as of the last day of the fiscal quarter ending September 30, 2017, and the related statements of income, shareholders’ equity and cash flows for the partial period then ended, prepared in accordance with GAAP, subject to the absence of notes required by GAAP and normal year-end and other audit adjustments.  Such financial statements present fairly in all material respects the consolidated financial condition of the Credit Parties and their respective Restricted Subsidiaries, and the consolidated results of their operations and their consolidated cash flows, as of the dates and for the periods indicated.

 

SECTION 6.13.                                   No Material Adverse Change.  Since December 31, 2016, except as disclosed in any Information Materials, no event has occurred or condition arisen, either individually or in the aggregate, that has had, or would reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.14.                                   Solvency.  As of the Closing Date, the Credit Parties taken together on a consolidated basis are Solvent.

 

SECTION 6.15.                                   Ownership of Properties.  Each Credit Party and each Material Subsidiary thereof (i) has good and marketable title to all real property owned by it, (ii) holds interests as lessee under valid leases in full force and effect with respect to all material leased real and personal property used in connection with its business, and (iii) has good title to all of its other material properties and assets necessary or used in the ordinary course of its business, in each case of clauses (i), (ii) and (iii), except for such defects in title as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.16.                                   Insurance Licenses.  Each Material Insurance Subsidiary holds licenses (including licenses or certificates of authority from relevant Insurance Regulatory Authorities), permits or authorizations in all jurisdictions necessary to transact its insurance and reinsurance business (collectively, the “Licenses”), except where the failure to hold such License would not reasonably be expected to have a Material Adverse Effect.  (i) No such License is the subject of a proceeding for suspension, revocation or limitation or any similar proceedings, and (ii) no such suspension, revocation or limitation is threatened in writing by any relevant Insurance Regulatory Authority, that, in each instance under (i) and (ii) above, would individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

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SECTION 6.17.                                   Litigation.  There are no actions, suits or proceedings pending nor, to its knowledge, threatened in writing against any Credit Party or any Restricted Subsidiary thereof, or any of their respective properties in any court or before any arbitrator of any kind or before or by any Governmental Authority that is reasonably likely to be adversely determined and with respect to which, if adversely determined, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.18.                                   Anti-Corruption Laws; Anti-Money Laundering Laws and Sanctions.

 

(a)                                 None of (i) the Parent or any of its Restricted Subsidiaries, or, to the knowledge of the Borrower or any such Restricted Subsidiary, any of their respective directors, officers, or employees, or (ii) any agent or representative of the Parent or any of its Restricted Subsidiaries that will act in any capacity in connection with the Credit Facility, (A) is a Sanctioned Person or currently the subject or target of any Sanctions, (B) is controlled by or is acting on behalf of a Sanctioned Person or (C) is located, organized or resident in a country or territory that is, or whose government is, the subject of Sanctions, in a manner that would result in the violation of applicable Sanctions by any party hereto.

 

(b)                                 Each of the Parent and its Restricted Subsidiaries has implemented and maintains in effect policies and procedures designed to ensure compliance by the Parent and its Restricted Subsidiaries and their respective directors, officers and employees with all applicable Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions.

 

(c)                                  Each of the Parent and its Restricted Subsidiaries, and, to the knowledge of the Borrower, each director, officer, employee and agent of the Parent and each such Restricted Subsidiary, is in compliance with all applicable Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions in all material respects.

 

(d)                                 No proceeds of any Credit Extension have been used, directly or indirectly, by the Parent or any of its Restricted Subsidiaries or, to the knowledge of the Borrower, any of its or their respective directors, officers, employees and agents in violation of Section 7.12(c).

 

SECTION 6.19.                                   Disclosure.  No financial statement, material report, material certificate or other material factual information furnished in writing by or on behalf of any Credit Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished), taken together as a whole, contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein (taken as a whole), in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, pro forma financial information, estimated financial information and other projected or estimated information, such information was prepared in good faith based upon assumptions believed to be reasonable at the time prepared (it being recognized by the Lenders that projections are not to be viewed as facts and that the actual results during the period or periods covered by such projections may materially vary from such projections).

 

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ARTICLE VII.

 

AFFIRMATIVE COVENANTS

 

Until all of the Obligations (other than contingent indemnification obligations not then due) have been paid and satisfied in full in cash, all Letters of Credit have been terminated or expired and the Commitments terminated, each Credit Party will, and will cause each of its Restricted Subsidiaries to:

 

SECTION 7.1.                                          Financial Statements.  Deliver to the Administrative Agent, in form and detail satisfactory to the Administrative Agent (which shall promptly make such information available to the Lenders in accordance with its customary practice):

 

(a)                                 Annual Financial Statements of the Parent.  Within 120 days (or, with respect to the first fiscal year with respect to which an Accounting Principles Election is made, within 150 days) (or, if earlier, the date that is five Business Days following the date of any required public filing thereof) after the end of each Fiscal Year (commencing with the Fiscal Year ended December 31, 2017), an audited consolidated balance sheet of the Parent and its Subsidiaries as of the close of such Fiscal Year and audited consolidated statements of income, retained earnings and cash flows including the notes thereto, all in reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the preceding Fiscal Year and prepared in accordance with GAAP and, if applicable, containing disclosure of the effect on the financial position or results of operations of any change in the application of accounting principles and practices during the year.  Such annual financial statements shall be audited by an independent certified public accounting firm of recognized national standing acceptable to the Administrative Agent, and accompanied by a report and opinion thereon by such certified public accountants prepared in accordance with generally accepted auditing standards that is not subject to any “going concern” or similar qualification or exception or any qualification as to the scope of such audit or with respect to accounting principles followed by the Parent or any of its Subsidiaries not in accordance with GAAP.

 

(b)                                 Annual Financial Statements of the Borrower.  Within 120 days (or, with respect to the first fiscal year with respect to which an Accounting Principles Election is made, within 150 days) (or, if earlier, the date that is five Business Days following the date of any required public filing thereof) after the end of each Fiscal Year (commencing with the Fiscal Year ended December 31, 2017), an audited consolidated balance sheet of the Borrower and its Subsidiaries as of the close of such Fiscal Year and audited consolidated statements of income, retained earnings and cash flows including the notes thereto, all in reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the preceding Fiscal Year and prepared in accordance with GAAP and, if applicable, containing disclosure of the effect on the financial position or results of operations of any change in the application of accounting principles and practices during the year.  Such annual financial statements shall be audited by an independent certified public accounting firm of recognized national standing acceptable to the Administrative Agent, and accompanied by a report and opinion thereon by such certified public accountants prepared in accordance with generally accepted auditing standards that is not subject to any “going concern” or similar qualification or exception or any qualification as to the scope of such audit or

 

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with respect to accounting principles followed by the Borrower or any of its Subsidiaries not in accordance with GAAP.

 

(c)                                  Quarterly Financial Statements of the Parent.  Within 60 days (or, with respect to the first three fiscal quarters for which financial statements are required hereunder with respect to which an Accounting Principles Election is made, within 75 days) (or, if earlier, the date that is five Business Days following the date of any required public filing thereof) after the end of the first three fiscal quarters of each Fiscal Year (commencing with the fiscal quarter ended March 31, 2018), an unaudited consolidated balance sheet of the Parent and its Subsidiaries as of the close of such fiscal quarter and unaudited consolidated statements of income, retained earnings and cash flows and a report containing management’s discussion and analysis of such financial statements for the fiscal quarter then ended and that portion of the Fiscal Year then ended, including the notes thereto, all in reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the corresponding period in the preceding Fiscal Year and prepared by the Parent in accordance with GAAP and, if applicable, containing disclosure of the effect on the financial position or results of operations of any change in the application of accounting principles and practices during the period, and certified by the chief financial officer of the Parent to present fairly in all material respects the financial condition of the Parent and its Subsidiaries on a consolidated basis as of their respective dates and the results of operations of the Parent and its Subsidiaries for the respective periods then ended, subject to normal year-end adjustments and the absence of footnotes.

 

(d)                                 Quarterly Financial Statements of the Borrower.  Within 60 days (or, with respect to the first three fiscal quarters for which financial statements are required hereunder with respect to which an Accounting Principles Election is made, within 75 days) (or, if earlier, the date that is five Business Days following the date of any required public filing thereof) after the end of the first three fiscal quarters of each Fiscal Year (commencing with the fiscal quarter ended March 31, 2018), an unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of the close of such fiscal quarter and unaudited consolidated statements of income, retained earnings and cash flows and a report containing management’s discussion and analysis of such financial statements for the fiscal quarter then ended and that portion of the Fiscal Year then ended, including the notes thereto, all in reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the corresponding period in the preceding Fiscal Year and prepared by the Borrower in accordance with GAAP and, if applicable, containing disclosure of the effect on the financial position or results of operations of any change in the application of accounting principles and practices during the period, and certified by the chief financial officer of the Borrower to present fairly in all material respects the financial condition of the Borrower and its Subsidiaries on a consolidated basis as of their respective dates and the results of operations of the Borrower and its Subsidiaries for the respective periods then ended, subject to normal year-end adjustments and the absence of footnotes.

 

SECTION 7.2.                                          Certificates; Other Reports.  Deliver to the Administrative Agent (which shall promptly make such information available to the Lenders in accordance with its customary practice):

 

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(a)                                 (a)at each time financial statements are delivered pursuant to Section 7.1(b) or Section 7.1(d), a duly completed Officer’s Compliance Certificate signed by the chief executive officer, chief financial officer, treasurer or controller of the Borrower;

 

(b)                                 promptly upon receipt thereof, copies of all reports, if any, submitted to the Parent or the Borrower, or any of their respective boards of directors by their respective independent public accountants in connection with their auditing function, including, without limitation, any management report and any management responses thereto;

 

(c)                                  promptly upon the request thereof, such other information and documentation required by bank regulatory authorities under applicable Anti-Money Laundering Laws (including, without limitation, any applicable “know your customer” rules and regulations and the PATRIOT Act), as from time to time reasonably requested by the Administrative Agent or any Lender; and

 

(d)                                 such other information regarding the operations, business affairs and financial condition of any Credit Party or any Subsidiary thereof as the Administrative Agent, on its behalf or on behalf of any Lender, may reasonably request.

 

SECTION 7.3.                                          Notice of Litigation and Other Matters.  Promptly (but in no event later than ten (10) days after any Responsible Officer of any Credit Party obtains knowledge thereof) notify the Administrative Agent in writing of (which shall promptly make such information available to the Lenders in accordance with its customary practice):

 

(a)                                 the occurrence of any Default or Event of Default;

 

(b)                                 the commencement of all proceedings and investigations by or before any Governmental Authority and all actions and proceedings in any court or before any arbitrator against or involving any Credit Party or any Material Subsidiary thereof or any of their respective properties, assets or businesses in each case that if adversely determined would reasonably be expected to result in a Material Adverse Effect;

 

(c)                                  any attachment, judgment, lien, levy or order exceeding the Threshold Amount (other than Permitted Liens) that has been assessed against any Credit Party or any Subsidiary thereof;

 

(d)                                 (i) any unfavorable determination letter from the IRS regarding the qualification of an Benefit Plan under Section 401(a) of the Code (along with a copy thereof), (ii) all notices received by any Credit Party or any ERISA Affiliate of the PBGC’s intent to terminate any Pension Plan or to have a trustee appointed to administer any Pension Plan, (iii) all notices received by any Credit Party or any ERISA Affiliate from a Multiemployer Plan sponsor concerning the imposition or amount of withdrawal liability pursuant to Section 4202 of ERISA and (iv) the Parent obtaining knowledge or reason to know that any Credit Party or any ERISA Affiliate has filed or intends to file a notice of intent to terminate any Pension Plan under a distress termination within the meaning of Section 4041(c) of ERISA, in each case, that would reasonably be expected to result in a Material Adverse Effect;

 

(e)                                  that any contribution required to be made with respect to a Foreign Pension Plan has not been timely made, except such contributions that would not reasonably be expected to have

 

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a Material Adverse Effect, or that the Parent or any Subsidiary of the Parent may incur any liability pursuant to any Foreign Pension Plan as to which there is a reasonable possibility of liability which could reasonably be expected to have Material Adverse Effect; and

 

(f)                                   any announcement by A.M. Best of any change in the Financial Strength Rating of any Material Insurance Subsidiary.

 

Each notice pursuant to Section 7.3(a) shall be accompanied by a statement of a Responsible Officer of the Parent or the Borrower setting forth details of the occurrence referred to therein and stating what action the Credit Parties have taken and proposes to take with respect thereto and shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

 

SECTION 7.4.                                          Preservation of Corporate Existence and Related Matters.  Except as permitted by Section 8.5, preserve and maintain its separate corporate existence or equivalent form and all rights, franchises, licenses and privileges necessary to the conduct of its business, and qualify and remain qualified as a foreign corporation or other entity and authorized to do business in each relevant jurisdiction, in each case, except where the failure to so exist, maintain such rights, franchises, licenses and privileges or qualify would not reasonably be expected to have a Material Adverse Effect.

 

SECTION 7.5.                                          Maintenance of Property and Licenses.

 

(a)                                 Protect and preserve all Properties necessary in and material to its business, including copyrights, patents, trade names, service marks and trademarks; maintain in good working order and condition, ordinary wear and tear excepted, all buildings, equipment and other tangible real and personal property; and from time to time make or cause to be made all repairs, renewals and replacements thereof and additions to such Property necessary for the conduct of its business, so that the business carried on in connection therewith may be conducted in a commercially reasonable manner, in each case except as would not reasonably be expected to result in a Material Adverse Effect.

 

(b)                                 Maintain, in full force and effect in all material respects, each and every material license, permit, certification, qualification, approval or franchise issued by any Governmental Authority required for each of them to conduct their respective businesses as presently conducted, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect.

 

SECTION 7.6.                                          Insurance.  Maintain insurance with financially sound and reputable insurance companies against at least such risks and in at least such amounts as are customarily maintained in the same general area by companies of established repute engaged in similar businesses, as reasonably determined by such Person in good faith, and as may be required by Applicable Law.

 

SECTION 7.7.                                          Payment of Taxes and Other Obligations.  Except where the failure to pay or perform such items described in this Section would not reasonably be expected to have a Material Adverse Effect, pay and perform all taxes, assessments and other governmental charges that may be levied or assessed upon it or any of its Property; provided, that the Parent or such

 

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Subsidiary may contest any item described in this Section in good faith so long as adequate reserves are maintained with respect thereto in accordance with GAAP.

 

SECTION 7.8.                                          Compliance with Laws and Approvals.  Observe and remain in compliance in all material respects with all Applicable Laws and maintain in full force and effect all Governmental Approvals, in each case applicable to the conduct of its business except where the failure to do so would not reasonably be expected to have a Material Adverse Effect.

 

SECTION 7.9.                                          Environmental Laws.  In addition to and without limiting the generality of Section 7.8, (a) comply with, and ensure such compliance by all tenants and subtenants with all applicable Environmental Laws and obtain and comply with and maintain, and ensure that all tenants and subtenants, if any, obtain and comply with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws and (b) conduct and complete all investigations and all remedial, removal and other actions required under Environmental Laws, and promptly comply with all lawful orders and directives of any Governmental Authority regarding Environmental Laws, in each case, except where such failure to do so would not reasonably be expected to result in a Material Adverse Effect.

 

SECTION 7.10.                                   Compliance with ERISA.  In addition to and without limiting the generality of Section 7.8, except where the failure to so comply would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) comply with applicable provisions of ERISA, the Code and the regulations and published interpretations thereunder with respect to all Benefit Plans, (ii) not take any action or fail to take action the result of which would reasonably be expected to result in a liability to the PBGC or to a Multiemployer Plan, (iii) not participate in any prohibited transaction that would result in any civil penalty under ERISA or tax under the Code and (iv) operate each Benefit Plan in such a manner that will not incur any tax liability under Section 4980B of the Code or any liability to any qualified beneficiary as defined in Section 4980B of the Code.

 

SECTION 7.11.                                   Maintenance of Books and Records; Inspection.  Each Credit Party shall, and shall cause each of their respective Material Subsidiaries to, (i) maintain adequate books, accounts and records, in which full, true and correct entries shall be made of all financial transactions in relation to its business and properties, and prepare all financial statements required under this Agreement, in each case in accordance with GAAP and in compliance with the requirements of any Governmental Authority having jurisdiction over it, and (ii) permit employees or agents of the Administrative Agent, and after the occurrence and during the continuance of an Event of Default, any Lender, to visit and inspect its properties and examine or audit its books, records, working papers and accounts and make copies and memoranda of them, and at its own cost and expense (other than after the occurrence of an Event of Default), and to discuss its affairs, finances and accounts with its officers and employees and, upon notice to the Parent, the independent public accountants of the Credit Parties and their Material Subsidiaries (and by this provision the Credit Parties authorize such accountants to discuss the finances and affairs of the Credit Parties and their Material Subsidiaries), all at such times and from time to time, upon reasonable notice and during business hours, as may be reasonably requested; provided that except during the continuance of an Event of Default the Administrative Agent shall not exercise such rights described in clause (ii) of this Section more than once per calendar year.

 

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SECTION 7.12.                                   Use of Proceeds.

 

(a)                                 The Borrower shall use the proceeds of the Loans for working capital and general corporate purposes of the Borrower and its Subsidiaries.

 

(b)                                 Each Account Party shall use the Letter of Credit Facility to support insurance obligations, obligations under reinsurance agreements and retrocession agreements and similar risk obligations and for general corporate purposes.

 

(c)                                  No Credit Party will request or use any Credit Extension, (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, except to the extent permitted for a Person required to comply with Sanctions or (iii) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

 

SECTION 7.13.                                   Compliance with Anti-Corruption Laws; Anti-Money Laundering Laws and Sanctions.  The Credit Parties will maintain in effect and enforce policies and procedures designed to ensure compliance by the Credit Parties, their Subsidiaries and their respective directors, officers, employees and agents with all applicable Anti-Corruption Laws, Anti-Money Laundering Laws, and Sanctions.

 

ARTICLE VIII.

 

NEGATIVE COVENANTS

 

Until all of the Obligations (other than contingent, indemnification obligations not then due) have been paid and satisfied in full in cash, all Letters of Credit have been terminated or expired, the Commitments terminated, the Credit Parties will not, and will not permit any of their respective Restricted Subsidiaries to:

 

SECTION 8.1.                                          Indebtedness.  Create, incur, assume or suffer to exist any Indebtedness except:

 

(a)                                 the Obligations;

 

(b)                                 guaranties of the Obligations as provided herein or any other Loan Document;

 

(c)                                  Indebtedness existing on the Closing Date and, to the extent the principal amount of any such Indebtedness is in excess of $5,000,000, set forth on Schedule 8.1, as well as any refinancings, refunds, renewals or extensions of such Indebtedness (without increase in the principal amount thereof other than by the amount of any necessary pre-payment premiums, unpaid accrued interest and other costs of refinancing);

 

(d)                                 short-term Indebtedness (i.e. with a maturity of less than one year when issued) provided by one or more of the Permitted Investors to any Insurance Subsidiary incurred or issued to provide short-term liquidity to facilitate claims payment in the event of catastrophe; provided

 

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that such Indebtedness shall be subordinated to the Obligations in a manner reasonably satisfactory to the Administrative Agent;

 

(e)                                  Indebtedness of any Insurance Subsidiary incurred or issued 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, bank guarantees, surety bonds or similar instruments 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;

 

(f)                                   Indebtedness in respect of letters of credit, bank guarantees, bids, leases, statutory obligations, surety and appeal bonds, or performance bonds or other obligations of a like nature arising in the ordinary course of business and not for capital raising purposes and issued for the account of any non-Insurance Subsidiary;

 

(g)                                  Indebtedness of a Subsidiary acquired after the date of this Agreement or a Person merged into or consolidated with a Subsidiary after the date of this Agreement and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness, in each case, exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event, as well as any refinancings, refunds, renewals or extensions of such Indebtedness (without increase in the principal amount thereof other than by the amount of any necessary pre-payment premiums, unpaid accrued interest and other costs of refinancing);

 

(h)                                 Indebtedness owing or issued by a member of the Group to any other member of the Group (other than the Unrestricted Subsidiary) or to any Affiliate (not being a member of the Group) of the Borrower, provided that if such Indebtedness is owing or issued by any Credit Party to any Affiliate (not being a member of the Group) of the Borrower, such Indebtedness shall be subordinated to the Obligations in a manner reasonably satisfactory to the Administrative Agent;

 

(i)                                     Obligations in respect of Guarantees made by a member of the Group (i) to any other member of the Group (other than the Unrestricted Subsidiary), (ii) as an Investment permitted pursuant to Section 8.3, provided that the Guarantee of any Indebtedness owed by the Unrestricted Subsidiary must comply with the limitations set forth in Section 8.3(j), (iii) of Indebtedness of any other member of the Group that is permitted under this Section 8.1 and (iv) of obligations of any other member of the Group in respect of leases and similar liabilities;

 

(j)                                    to the extent constituting Indebtedness, liabilities representing collateral held with respect to securities lending activities and not exceeding ten percent (10%) of the Borrower’s consolidated investment assets as of the end of the most recent Financial Quarter for which consolidated financial statements have been furnished pursuant to Section 7.1(a) and Section 7.1(c);

 

(k)                                 Hedge Agreements entered into by a member of the Group in the ordinary course of business for non-speculative purposes;

 

(l)                                     Indebtedness secured by Liens permitted pursuant to Section 8.2(n); provided, that the aggregate amount of all such Indebtedness at any one time outstanding shall not exceed $100,000,000; and

 

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(m)                             other Indebtedness of members of the Group, provided that, in the case of any Indebtedness of any Restricted Subsidiary of the Borrower, at the time such Indebtedness is incurred or issued, the aggregate principal amount of such Indebtedness when added to all other Indebtedness of Restricted Subsidiaries of the Borrower incurred or issued pursuant to this paragraph (m) and then outstanding, does not exceed 10 percent (10%) of the Consolidated Net Worth of the Borrower (determined as of the end of the most recent fiscal quarter for which financial statements are available), as well as any refinancings, refunds, renewals or extensions of such Indebtedness (without increase in the principal amount thereof other than by the amount of any necessary pre-payment premiums, unpaid accrued interest and other costs of refinancing).

 

SECTION 8.2.                                          Liens.  Create, incur, assume or suffer to exist, any Lien on or with respect to any of its Property (other than “margin stock” which if covered hereby would cause the Lenders to be in violation of Regulation U), whether now owned or hereafter acquired, except:

 

(a)                                 Liens on Cash Collateral granted pursuant to the Loan Documents;

 

(b)                                 Liens for taxes, assessments and other governmental charges or levies (i) not yet due or as to which the period of grace, if any, related thereto has not expired or (ii) which are being contested in good faith and by appropriate proceedings if adequate reserves are maintained to the extent required by GAAP;

 

(c)                                  Liens in existence on the Closing Date and, to the extent securing Indebtedness in a principal amount in excess of $5,000,000, described on Schedule 8.2, and the replacement, renewal or extension thereof; provided that the scope of any such Lien shall not be increased, or otherwise expanded, to cover any additional property or type of asset, other than accessions to, and products and proceeds of, the foregoing;

 

(d)                                 the claims of materialmen, mechanics, carriers, warehousemen, processors or landlords for labor, materials, supplies or rentals incurred in the ordinary course of business, which (i) Liens are being contested in good faith and by appropriate proceedings if adequate reserves are maintained to the extent required by GAAP or (ii) do not, individually or in the aggregate, materially impair the use thereof in the operation of the business of the Group;

 

(e)                                  deposits or pledges made in the ordinary course of business in connection with, or to secure payment of, obligations under workers’ compensation, unemployment insurance and other types of social security or similar legislation, or to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds, letters of credit, bank guarantees and other obligations of a like nature incurred in the ordinary course of business;

 

(f)                                   survey exceptions or encumbrances in the nature of zoning restrictions, easements and rights or restrictions of record on the use of real property, which in the aggregate are not substantial in amount and which do not, in any case, materially impair the use thereof in the ordinary conduct of business;

 

(g)                                  Liens arising from the filing of precautionary UCC financing statements relating solely to personal property leased pursuant to operating leases entered into in the ordinary course of business of the Group;

 

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(h)                                 Liens (i) arising in connection with any legal proceeding which is being contested in good faith or (ii) securing judgments for the payment of money not constituting an Event of Default under Section 9.1(l) or securing appeal or other surety bonds relating to such judgments;

 

(i)                                     (i) Liens on Property (i) of any Subsidiary that becomes a member of the Group which are in existence at the time that such Subsidiary is acquired and (ii) existing at the time such tangible property or tangible assets are purchased or otherwise acquired by any member of the Group pursuant to a transaction permitted pursuant to this Agreement; provided that, with respect to each of the foregoing clauses (i) and (ii), (A) such Liens are not incurred in connection with, or in anticipation of, such purchase or other acquisition, (B) such Liens do not attach to any other Property of any member of the Group and (C) the Indebtedness secured by such Liens is permitted under Section 8.1(g) of this Agreement);

 

(j)                                    (i) Liens of a collecting bank arising in the ordinary course of business under Section 4210 of the Uniform Commercial Code in effect in the relevant jurisdiction and (ii) Liens of any depositary bank in connection with statutory, common law and contractual rights of setoff and recoupment with respect to any deposit account of any member of the Group;

 

(k)                                 (i) contractual or statutory Liens of landlords to the extent relating to the property and assets relating to any lease agreements with such landlord, and (ii) contractual Liens of suppliers (including sellers of goods) or customers granted in the ordinary course of business to the extent limited to the property or assets relating to such contract;

 

(l)                                     any interest or title of a licensor, sublicensor, lessor or sublessor with respect to any assets under any license or lease agreement entered into in the ordinary course of business which do not (i) interfere in any material respect with the business of the Group or (ii) secure any Indebtedness;

 

(m)                             Liens on Investments and cash balances of the Borrower or any Insurance Subsidiary (other than capital stock of any Subsidiary) securing obligations of the Borrower or any Insurance Subsidiary in respect of (i) letters of credit obtained in the ordinary course of business; and/or (ii) trust arrangements formed in the ordinary course of business, or other security arrangements with any Insurance Subsidiary, in each case for the benefit of cedents to secure reinsurance recoverables owed to them by the Borrower or any Insurance Subsidiary;

 

(n)                                 Liens consisting of capital lease obligations or otherwise upon Property to secure any part of the cost of development, construction, alteration, repair or improvement of such Property, or Indebtedness incurred to finance such cost, and the replacement, renewal or extension thereof; provided that the scope of any such Lien shall not be increased, or otherwise expanded, to cover any additional property or type of asset, other than accessions to, and products and proceeds of, the foregoing;

 

(o)                                 Liens upon Property subject to any sale and leaseback transaction not prohibited hereunder;

 

(p)                                 Liens upon Property in favor of any member of the Group granted by another member of the Group (i) securing Indebtedness permitted under Section 8.1(g) or (ii) for purposes of satisfying any requirements of Applicable Law or any regulatory authority having jurisdiction

 

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over the members of the Group that require any intercompany transactions to be on an arms’ length basis;

 

(q)                                 any interest or title of a lessor under any lease entered into in the ordinary course of business;

 

(r)                                    Liens over securities that are lent pursuant to securities lending activities;

 

(s)                                   Liens to secure obligations under Hedge Agreements that are permitted by Section 8.1(k); and

 

(t)                                    Liens not otherwise permitted hereunder securing Indebtedness or other obligations in the aggregate principal amount not to exceed ten percent (10%) of the Consolidated Net Worth of the Borrower (determined as of the end of the most recent fiscal quarter for which financial statements are available).

 

SECTION 8.3.                                          Investments.  Make any Investment, except:

 

(a)                                 Investments (other than Acquisitions) made in accordance with the investment policy approved by the board of directors of the Parent from time to time;

 

(b)                                 Investments in existence on the Closing Date set forth on Schedule 8.3 and the replacement, renewal or extension thereof;

 

(c)                                  Investments by any member of the Group in any Credit Party (other than the Parent) or Restricted Subsidiary;

 

(d)                                 Investments by any Restricted Subsidiary that is not a Credit Party in any Credit Party (other than the Parent) or any other Restricted Subsidiary that is not a Credit Party;

 

(e)                                  Investments in cash and Cash Equivalents;

 

(f)                                   Investments by the Parent or any of its Restricted Subsidiaries consisting of capital expenditures;

 

(g)                                  deposits made in the ordinary course of business to secure the performance of leases or other obligations as permitted by Section 8.2;

 

(h)                                 Hedge Agreements permitted pursuant to Section 8.1;

 

(i)                                     purchases of assets in the ordinary course of business;

 

(j)                                    so long as the Unrestricted Subsidiary remains an Unrestricted Subsidiary, Investments by any member of the Group in the form of loans, advances or extensions of credit to the Unrestricted Subsidiary in the aggregate principal amount not to exceed $100,000,000 at any time outstanding;

 

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(k)                                 other Investments (other than the type of Investments in the Unrestricted Subsidiary referred to in Section 8.3(j)) so long as at the time of the relevant Investment, no Event of Default shall have occurred and be continuing or would immediately result therefrom; and

 

(l)                                     Investments in the form of Restricted Payments permitted pursuant to Section 8.6.

 

SECTION 8.4.                                          Fundamental Changes.  Except to effect a merger, amalgamation, consolidation or similar combination constituting an Asset Disposition permitted by Section 8.5, merge, amalgamate consolidate or enter into any similar combination (whether in a single transaction or a series of transactions) with, any other Person or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution), except that (a) any Credit Party or any Restricted Subsidiary may merge into or consolidate with any other Person so long as (i) the surviving entity is a Credit Party or a Restricted Subsidiary of a Credit Party (and in any event, if a Credit Party is a party to such merger, amalgamation or consolidation, the surviving entity shall be such Credit Party, it being understood and agreed that in the case of a merger, amalgamation or consolidation between the Borrower and any other Credit Party, the survivor entity of such merger, amalgamation or consolidation shall be the Borrower), and (ii) immediately before and after giving effect thereto, no Event of Default would occur or exist and (b) any Restricted Subsidiary may liquidate, wind up or dissolve if (i) such Subsidiary owns no more than a nominal amount of assets, has no more than a nominal amount of liabilities and does not actively conduct, transact or otherwise engage in any business or operations or (ii) such liquidation, winding up or dissolution is not materially disadvantageous to the Lenders, as determined in the reasonable discretion of the Lenders.

 

SECTION 8.5.                                          Asset Dispositions.  Make any Asset Disposition except:

 

(a)                                 any Asset Disposition in the ordinary course of business;

 

(b)                                 the transfer to any Credit Party or any Restricted Subsidiary pursuant to any transaction permitted pursuant to Section 8.3 or Section 8.4;

 

(c)                                  the write-off, discount, sale or other disposition of defaulted or past-due receivables and similar obligations in the ordinary course of business and not undertaken as part of an accounts receivable financing transaction;

 

(d)                                 dispositions of Investments in cash and Cash Equivalents;

 

(e)                                  the transfer by any member of the Group that is not a Credit Party of its assets to any Credit Party (provided that in connection with any new transfer, such Credit Party shall not pay more than an amount equal to the fair market value of such assets as determined in good faith at the time of such transfer);

 

(f)                                   the transfer by any member of the Group of Property to any Credit Party (other than the Parent) or Restricted Subsidiary;

 

(g)                                  the sale of (i) obsolete, worn-out or surplus assets no longer used or usable in the business of the Group and (ii) non-core assets acquired in any Investment permitted by Section 8.3;

 

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(h)                                 any Asset Disposition described on Schedule 8.5; and

 

(i)                                     Asset Dispositions not otherwise permitted pursuant to this Section; provided that (i) at the time of such Asset Disposition, no Event of Default shall exist or would result from such Asset Disposition, (ii) such Asset Disposition is made for fair market value, (iii) the Borrower is in pro forma compliance with the financial covenants set forth in Section 8.12, recalculated after giving effect to such Asset Disposition and any other related transactions, (iv) such Asset Disposition does not constitute a disposition of all or substantially all of the assets of the Borrower and its Subsidiaries on a consolidated basis and (v) if such Asset Disposition consists of a merger, amalgamation, consolidation or similar combination of which any Account Party (other than the Borrower) is a party, prior to the consummation of such merger, amalgamation, consolidation or combination, all Letters of Credit issued for the account of such Account Party, if any, shall have been cancelled and surrendered to the Administrative Agent (or arrangements shall have been made for such cancellation and/or surrender satisfactory to the Administrative Agent).

 

SECTION 8.6.                                          Restricted Payments.  Declare or pay any Restricted Payments; provided that:

 

(a)                                 so long as no Default or Event of Default has occurred and is continuing or would result therefrom, the Borrower may declare and pay cash dividends (for further distribution to its direct and indirect parent companies, including the Parent) to the holders of its Equity Interests;

 

(b)                                 so long as no Default or Event of Default has occurred and is continuing or would result therefrom, the Parent may in the ordinary course of business redeem, retire or otherwise acquire shares of its Equity Interests or options or other equity or phantom equity in respect of its Equity Interests from present or former officers, employees, directors or consultants (or their family members or trusts or other entities for the benefit of any of the foregoing) of any Credit Party or any Restricted Subsidiary thereof or make severance payments to such Persons in connection with the death, disability or termination of employment or consultancy of any such officer, employee, director or consultant; and

 

(c)                                  any member of the Group may (i) declare and pay dividends to any Credit Party or to a Wholly-Owned Subsidiary and (ii) declare and pay pro rata dividends to such Subsidiary’s equity holders.

 

SECTION 8.7.                                          Transactions with Affiliates.  Directly or indirectly 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, in each case involving aggregate payments in excess of $5,000,000, other than:

 

(i)                                     transactions permitted by Section 8.1, 8.3, 8.4, 8.5, and 8.6;

 

(ii)                                  transactions among Credit Parties and their Restricted Subsidiaries not prohibited hereunder;

 

(iii)                               other transactions on terms not materially less favorable as would be obtained by it on a comparable arm’s-length transaction with an independent, unrelated

 

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third party as determined in good faith by the board of directors (or equivalent governing body) of the Borrower;

 

(iv)                              employment and severance arrangements (including equity incentive plans and employee benefit plans and arrangements) with their respective officers and employees in the ordinary course of business; and

 

(v)                                 payment of customary fees and reasonable out-of-pocket costs to, and indemnities for the benefit of, directors, officers and employees of the Parent, the Borrower and their Subsidiaries in the ordinary course of business to the extent attributable to the ownership or operation of the Parent and its Subsidiaries.

 

SECTION 8.8.                                          Accounting Changes; Organizational Documents.

 

(a)                                 Change its Fiscal Year end, or make (without the consent of the Administrative Agent) any material change in its accounting treatment and reporting practices except as required by GAAP or in connection with an Accounting Principles Election.

 

(b)                                 Amend, modify or change its articles of incorporation (or corporate charter or other similar organizational documents) or amend, modify or change its bylaws (or other similar documents) in any manner materially adverse to the rights or interests of the Lenders under the Loan Documents.

 

SECTION 8.9.                                          No Further Negative Pledges; Restrictive Agreements.

 

(a)                                 Enter into, assume or be subject to any agreement prohibiting or otherwise restricting the creation or assumption of any Lien upon its properties or assets (other than “margin stock” which if covered thereby would cause the applicable counterparty to such agreement to be in violation of Regulation U), whether now owned or hereafter acquired, or requiring the grant of any security for such obligation if security is given for some other obligation, except (i) pursuant to this Agreement and the other Loan Documents, (ii) pursuant to any document or instrument governing Indebtedness incurred pursuant to Section 8.1, (iii) customary restrictions contained in the organizational documents of any member of the Group as of the Closing Date, (iv) customary restrictions in connection with any Permitted Lien or any document or instrument governing any Permitted Lien (provided that any such restriction contained therein relates only to the asset or assets subject to such Permitted Lien), (v) obligations that are binding on a Subsidiary at the time such Subsidiary first becomes a member of the Group, so long as such obligations are not entered into in contemplation of such Person becoming a member of the Group, (vi) customary restrictions contained in an agreement related to the sale of Property (to the extent such sale is permitted pursuant to Section 8.5) that limit the transfer of such Property pending the consummation of such sale, (vii) customary restrictions in leases, subleases, licenses and sublicenses or asset sale agreements otherwise permitted by this Agreement so long as such restrictions relate only to the assets subject thereto, (viii) customary provisions restricting assignment of any agreement entered into in the ordinary course of business, and (ix) other prohibitions or restrictions in agreements not prohibited hereunder and not materially more onerous, taken as a whole, than the restrictions included in this Agreement and the other Loan Documents.

 

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(b)                                 Create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Credit Party that is a member of the Group or any Material Subsidiary thereof to (i) pay dividends or make any other distributions to any Credit Party or any Subsidiary on its Equity Interests or with respect to any other interest or participation in, or measured by, its profits, (ii) pay any Indebtedness or other obligation owed to any Credit Party or (iii) make loans or advances to any Credit Party, except in each case for such encumbrances or restrictions existing under or by reason of (A) this Agreement and the other Loan Documents, (B) any document or instrument governing Indebtedness incurred pursuant to Section 8.1, (C) customary restrictions contained in the organizational documents of any member of the Group as of the Closing Date, (D) other prohibitions or restrictions in agreements not prohibited hereunder and not materially more onerous, taken as a whole, than the restrictions included in this Agreement and the other Loan Documents and (E) Applicable Law.

 

(c)                                  Create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Credit Party that is a member of the Group or any Material Subsidiary thereof to (i) sell, lease or transfer any of its properties or assets to any Credit Party or (ii) act as a Credit Party pursuant to the Loan Documents or any renewals, refinancings, exchanges, refundings or extension thereof, except in each case for such encumbrances or restrictions existing under or by reason of (A) this Agreement and the other Loan Documents, (B) Applicable Law, (C) pursuant to any document or instrument governing Indebtedness incurred pursuant to Section 8.1, (D) any Permitted Lien or any document or instrument governing any Permitted Lien (provided that any such restriction contained therein relates only to the asset or assets subject to such Permitted Lien), (E) obligations that are binding on a Subsidiary at the time such Subsidiary first becomes a member of the Group, so long as such obligations are not entered into in contemplation of such Person becoming a member of the Group, (F) customary restrictions contained in an agreement related to the sale of Property (to the extent such sale is permitted pursuant to Section 8.5) that limit the transfer of such Property pending the consummation of such sale, (G) customary restrictions in leases, subleases, licenses and sublicenses or asset sale agreements otherwise permitted by this Agreement so long as such restrictions relate only to the assets subject thereto, (H) customary provisions restricting assignment of any agreement entered into in the ordinary course of business and (I) other prohibitions or restrictions in agreements not prohibited hereunder and not materially more onerous, taken as a whole, than the restrictions included in this Agreement and the other Loan Documents.

 

SECTION 8.10.                                   Nature of Business.  Engage in any business other than the business conducted by the Parent and its Subsidiaries as of the Closing Date and any business or business activities incidental or reasonably related or ancillary thereto or that are reasonable extensions, developments, and expansions thereof.

 

SECTION 8.11.                                   Financial Strength Rating.  At any time, permit the Financial Strength Rating of any Material Insurance Subsidiary to fall below B++.

 

SECTION 8.12.                                   Financial Covenants.

 

(a)                                 Maximum Consolidated Indebtedness to Total Consolidated Capitalization Ratio.  As of the last day of any fiscal quarter, permit the ratio of Total Consolidated Debt to Total Consolidated Capitalization to be greater than 35%.

 

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For purposes of this Section 8.12(a), the following definitions will apply:

 

“Total Consolidated Debt” means, at any date, the sum, without duplication, of all amounts that would be reflected and classified as debt on a consolidated balance sheet of the Borrower and its Restricted Subsidiaries prepared as of such date, provided that Total Consolidated Debt shall, in any event, not include:

 

(i)                                     Indebtedness of the type described in clauses (d), (e), (f), (h), (i), (j) and (k) in Section 8.1;

 

(ii)                                  Conditional Common Equity;

 

(iii)                               indebtedness arising pursuant to any standby or documentary letter of credit (whether issued pursuant to this agreement or otherwise) unless and until such letter of credit is drawn by its beneficiary;

 

(iv)                              any other amounts in respect of Qualified Securities, other than such Qualified Securities that mature or are mandatorily redeemable pursuant to a sinking fund obligation or otherwise or are redeemable at the option of the holder thereof, in each case, prior to the date that is 91 days after the Maturity Date; or

 

(v)                                 any amounts resulting from any entity consolidated as a Variable Interest Entity in “ASC Topic 810 — Consolidations”.

 

“Total Consolidated Capitalization” means, as at any date, the sum, without duplication, of

 

(i)                                     Consolidated Net Worth of the Borrower and its Restricted Subsidiaries; plus

 

(ii)                                  Total Consolidated Debt of the Borrower and its Restricted Subsidiaries; plus

 

(iii)                               the amounts in respect of Qualified Securities, Conditional Common Equity and any other preferred equity that would be reflected on a consolidated balance sheet of the Borrower and its Restricted Subsidiaries prepared as of such date and which are not already included in clauses (a) or (b) above.

 

(b)                                 Minimum Consolidated Tangible Net Worth.  As of the last day of any fiscal quarter, permit Consolidated Tangible Net Worth of the Borrower and its Restricted Subsidiaries to be less than an amount equal to the Minimum Consolidated Tangible Net Worth.

 

For purposes of this Section 8.12(b), the following definitions will apply:

 

“Consolidated Tangible Net Worth” means, at any time, Consolidated Net Worth excluding any amount set forth on a consolidated balance sheet of the Borrower and its Restricted Subsidiaries in respect of intangible assets including goodwill.

 

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“Minimum Consolidated Tangible Net Worth” means, as of the Closing Date, $1,335,757,500 and shall be reset as of the last day of each Fiscal Year ending after the Closing Date to an amount equal to the greater of (x) 67.5% of Consolidated Tangible Net Worth reflected in the audited financial statements delivered pursuant to Section 7.1(a) as of such date and (y) the Minimum Consolidated Tangible Net Worth in effect prior to the last day of the immediately preceding Fiscal Year.

 

ARTICLE IX.

 

DEFAULT AND REMEDIES

 

SECTION 9.1.                                          Events of Default.  Each of the following shall constitute an Event of Default:

 

(a)                                 Default in Payment of Principal of Loans and Reimbursement Obligations.  Any Credit Party shall default in any payment of principal of any Loan or Reimbursement Obligation when and as due (whether at maturity, by reason of acceleration or otherwise) and such default, in the case of any Reimbursement Obligation, shall continue for a period of two (2) Business Days.

 

(b)                                 Other Payment Default.  Any Credit Party shall default in the payment when and as due (whether at maturity, by reason of acceleration or otherwise) of interest on any Loan or Reimbursement Obligation or the payment of any other Obligation, and such default shall continue for a period of five (5) Business Days.

 

(c)                                  Misrepresentation.  Any representation, warranty, or written certification made or deemed made by or on behalf of any Credit Party in this Agreement, in any other Loan Document, or in any document delivered in connection herewith or therewith that is subject to materiality or Material Adverse Effect qualifications, shall be incorrect or misleading in any respect when made or deemed made or any representation, warranty or written certification made or deemed made by or on behalf of any Credit Party in this Agreement, any other Loan Document, or in any document delivered in connection herewith or therewith that is not subject to materiality or Material Adverse Effect qualifications, shall be incorrect or misleading in any material respect when made or deemed made.

 

(d)                                 Default in Performance of Certain Covenants.  Any Credit Party or any Subsidiary thereof shall default in the performance or observance of any covenant or agreement contained in 7.3(a), 7.4 (as to existence of the Credit Parties only), 7.12, or Article VIII.

 

(e)                                  Default in Performance of Other Covenants and Conditions.  Any Credit Party or any Subsidiary thereof shall default in the performance or observance of any term, covenant, condition or agreement contained in this Agreement (other than as specifically provided for in this Section) or any other Loan Document and such default shall continue for a period of thirty (30) days after the Administrative Agent’s delivery of written notice thereof to the Borrower.

 

(f)                                   Indebtedness Cross-Default.  Any Credit Party or any Subsidiary thereof shall (i) default in the payment of any Indebtedness (other than any Loan or any Reimbursement Obligation) the aggregate principal amount of which is in excess of the Threshold Amount, or with

 

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respect to any Hedge Agreement, the Hedge Termination Value of which is in excess of the Threshold Amount, in each case beyond the period of grace if any, provided in the instrument or agreement under which such Indebtedness was created, or (ii) default in the observance or performance of any other agreement or condition relating to any Indebtedness (other than any Loan or any Reimbursement Obligation) the aggregate principal amount, or with respect to any Hedge Agreement, the Hedge Termination Value, of which is in excess of the Threshold Amount 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 holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, with the giving of notice and/or lapse of time, if required, any such Indebtedness to become due, or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity (any applicable grace period having expired).

 

(g)                                  Change in Control.  Any Change in Control shall occur.

 

(h)                                 Voluntary Bankruptcy Proceeding.  Any Credit Party or any Material Subsidiary thereof shall (i) commence a voluntary case under any Debtor Relief Laws, (ii) file a petition seeking to take advantage of any Debtor Relief Laws, (iii) consent to or fail to contest in a timely and appropriate manner any petition filed against it in an involuntary case under any Debtor Relief Laws, (iv) apply for or consent to, or fail to contest in a timely and appropriate manner, the appointment of, or the taking of possession by, a receiver, custodian, trustee, or liquidator of itself or of a substantial part of its property, domestic or foreign, (v) admit in writing its inability to pay its debts as they become due, (vi) make a general assignment for the benefit of creditors, or (vii) take any corporate action for the purpose of authorizing any of the foregoing.

 

(i)                                     Involuntary Bankruptcy Proceeding.  A case or other proceeding shall be commenced against any Credit Party or any Material Subsidiary thereof in any court of competent jurisdiction seeking (i) relief under any Debtor Relief Laws, or (ii) the appointment of a trustee, receiver, custodian, liquidator or the like for any Credit Party or any Material Subsidiary thereof or for all or any substantial part of their respective assets, domestic or foreign, and such case or proceeding shall continue without dismissal or stay for a period of sixty (60) consecutive days, or an order granting the relief requested in such case or proceeding (including, but not limited to, an order for relief under such federal bankruptcy laws) shall be entered; provided that the foregoing shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within twenty (20) Business Days of commencement.

 

(j)                                    Failure of Agreements.  Any provision of this Agreement or any provision of any other Loan Document shall for any reason cease to be in full force and effect (other than in accordance with its terms or by reason of the release of a Credit Party or its assets in accordance with the terms of the Loan Documents or the satisfaction in full of the Obligations in accordance with the terms hereof) or any Credit Party or any Subsidiary thereof party to any Loan Document shall contest the validity or enforceability of the Loan Documents in writing.

 

(k)                                 Employee Benefit Matters.  (i) The occurrence of any Termination Event that has, individually or in the aggregate with all other Termination Events that have occurred, had a Material Adverse Effect or (ii) a Foreign Pension Plan termination resulting in a required

 

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contribution by any Credit Party or any of its respective Restricted Subsidiaries or other liability or obligation to such Foreign Pension Plan that has had Material Adverse Effect or (iii) a contribution failure with respect to any Foreign Pension Plan sufficient to give rise to a Lien under Applicable Law that has had a Material Adverse Effect.

 

(l)                                     Judgment.  One or more judgments, orders or decrees shall be entered against any Credit Party or any Subsidiary thereof by any court and continues without having been satisfied, discharged, vacated or stayed for a period of sixty (60) consecutive days after the entry thereof and such judgments, orders or decrees are for the payment of money, individually or in the aggregate (not paid or fully covered by insurance as to which the relevant insurance company has not denied coverage) equal to or in excess of the Threshold Amount.

 

SECTION 9.2.                                          Remedies.  Upon the occurrence and during the continuance of an Event of Default, 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:

 

(a)                                 Acceleration; Termination of Credit Facility.  Terminate the Commitments and declare the principal of and interest on the Loans and the Reimbursement Obligations at the time outstanding, and all other amounts owed to the Lenders and to the Administrative Agent under this Agreement or any of the other Loan Documents and all other Obligations, to be forthwith due and payable, whereupon the same shall promptly become due and payable without presentment, demand, protest or other notice of any kind, all of which are expressly waived by each Credit Party, anything in this Agreement or the other Loan Documents to the contrary notwithstanding, and terminate the Credit Facility and any right of any Credit Party to request Credit Extensions; provided, that upon the occurrence of an Event of Default specified in Section 9.1(h) or Section 9.1(i), the Credit Facility shall be automatically terminated and all Obligations shall automatically become due and payable without presentment, demand, protest or other notice of any kind, all of which are expressly waived by each Credit Party, anything in this Agreement or in any other Loan Document to the contrary notwithstanding.

 

(b)                                 Letters of Credit.  With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred upon the occurrence of the Event of Default, (i) demand that each Account Party (and each Account Party hereby agrees to) deposit in a Cash Collateral Account opened by the Administrative Agent an amount of cash equal to 103% of the aggregate then undrawn and unexpired amount of such Letters of Credit issued for its account to be held and applied in accordance with Section 3.6 and/or (ii) terminate or cause the L/C Agent or Fronting Bank, as applicable, to terminate any or all of the Letters of Credit or give Notices of Non-Extension in respect thereof if permitted in accordance with its terms.  Such Cash Collateral 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 the other Obligations.  After all such Letters of Credit shall have expired or been fully drawn upon, the Reimbursement Obligation shall have been satisfied and all other Obligations shall have been paid in full, the balance, if any, in such Cash Collateral account shall be returned to the applicable Account Party.

 

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(c)                                  General Remedies.  Exercise on behalf of the Issuing Lenders and the Lenders all of its other rights and remedies under this Agreement, the other Loans Documents and Applicable Law, in order to satisfy all of the Obligations.

 

SECTION 9.3.                                          Rights and Remedies Cumulative; Non-Waiver; etc.

 

(a)                                 The enumeration of the rights and remedies of the Administrative Agent and the Lenders set forth in this Agreement is not intended to be exhaustive and the exercise by the Administrative Agent and the Lenders of any right or remedy shall not preclude the exercise of any other rights or remedies, all of which shall be cumulative, and shall be in addition to any other right or remedy given hereunder or under the other Loan Documents or that may now or hereafter exist at law or in equity or by suit or otherwise.  No delay or failure to take action on the part of the Administrative Agent or any Lender in exercising any right, power or privilege shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege or shall be construed to be a waiver of any Event of Default.  No course of dealing between any Credit Party, the Administrative Agent and the Lenders or their respective agents or employees shall be effective to change, modify or discharge any provision of this Agreement or any of the other Loan Documents or to constitute a waiver of any Event of Default.

 

(b)                                 Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Credit Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 9.2 for the benefit of all the Lenders and the Issuing Lenders; provided that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) any Issuing Lender or the Swingline Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as an Issuing Lender or Swingline Lender, as the case may be) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 11.4 (subject to the terms of Section 4.6), or

 

(d)                                 any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Credit Party under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 9.2 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 4.6, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

 

SECTION 9.4.                                          Crediting of Payments and Proceeds.  In the event that the Obligations have been accelerated pursuant to Section 9.2 or the Administrative Agent or any Lender has exercised any remedy set forth in this Agreement or any other Loan Document, all payments received on account of the Obligations and all net proceeds from the enforcement of the

 

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Obligations shall, subject to the provisions of Sections 4.14 and 4.15, be applied by the Administrative Agent as follows:

 

(a)                                 First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts, including attorney fees, payable to the Administrative Agent in its capacity as such;

 

(b)                                 Second, to payment of that portion of the Obligations constituting fees (other than Commitment Fees and Letter of Credit fees), indemnities and other amounts (other than principal and interest) payable to the Lenders, the Issuing Lenders and the Swingline Lender under the Loan Documents, including attorney fees, ratably among the Lenders, the Issuing Lenders and the Swingline Lender in proportion to the respective amounts described in this clause Second payable to them;

 

(c)                                  Third, to payment of that portion of the Obligations constituting accrued and unpaid Commitment Fees, Letter of Credit fees and interest on the Loans and Reimbursement Obligations, ratably among the Lenders, the Issuing Lenders and the Swingline Lender in proportion to the respective amounts described in this clause Third payable to them;

 

(d)                                 Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans and Reimbursement Obligations, ratably among the Lenders and the Issuing Lenders in proportion to the respective amounts described in this clause Fourth payable to them;

 

(e)                                  Fifth, to the Administrative Agent for the account of the Issuing Lenders, to Cash Collateralize any L/C Obligations then outstanding; and

 

(f)                                   Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Applicable Law.

 

SECTION 9.5.                                          Administrative Agent May File Proofs of Claim.  In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Credit Party, the Administrative Agent (irrespective of whether any Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Credit Parties) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

 

(a)                                 to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuing Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Issuing Lenders and the Administrative Agent under Section 3.9 and Section 11.3) allowed in such judicial proceeding; and

 

(b)                                 to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

 

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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and each Issuing Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 3.9 and Section 11.3.  Nothing contained herein shall be deemed to authorize the Administrative Agent to consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment, or composition affecting the obligations of any Credit Party hereunder or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

 

ARTICLE X.

 

THE ADMINISTRATIVE AGENT

 

SECTION 10.1.                                   Appointment and Authority.

 

(a)                                 Each of the Lenders and each Issuing Lender hereby irrevocably appoints Wells Fargo to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.  The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Lenders, and no Credit Party nor any of their respective Subsidiaries shall have rights as a third-party beneficiary of any of such provisions.  It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any Applicable Law.  Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

 

SECTION 10.2.                                   Rights as a Lender.  The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Parent or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

 

SECTION 10.3.                                   Exculpatory Provisions.

 

(a)                                 The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder and thereunder

 

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shall be administrative in nature.  Without limiting the generality of the foregoing, the Administrative Agent:

 

(i)                                     shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default has occurred and is continuing;

 

(ii)                                  shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or Applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

 

(iii)                               shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Parent, any Credit Party or any of their respective Subsidiaries or Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

 

(b)                                 The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 9.2 and Section 11.2) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final nonappealable judgment.  The Administrative Agent shall be deemed not to have knowledge of any Default or Event of Default unless and until notice describing such Default or Event of Default is given to the Administrative Agent by the Parent, a Lender or an Issuing Lender.

 

(c)                                  The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article V or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

 

SECTION 10.4.                                   Reliance by the Administrative Agent.  The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request,

 

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certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender or such Lender or such Issuing Lender unless the Administrative Agent shall have received notice to the contrary from such Lender or such Issuing Lender prior to the making of such Loan or the issuance of such Letter of Credit.  The Administrative Agent may consult with legal counsel (who may be counsel for the Credit Parties), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

SECTION 10.5.                                   Delegation of Duties.  The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the Credit Facility as well as activities as Administrative Agent.  The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

 

SECTION 10.6.                                   Resignation of Administrative Agent.

 

(a)                                 The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Lenders and the Borrower.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower and subject to the consent (not to be unreasonably withheld or delayed) of the Borrower (provided no Event of Default has occurred and is continuing at the time of such resignation), to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to), in consultation with the Borrower and subject to the consent (not to be unreasonably withheld or delayed) of the Borrower (provided no Event of Default has occurred and is continuing at such time), on behalf of the Lenders and the Issuing Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that in no event shall any such successor Administrative Agent be a Defaulting Lender.  Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

 

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(b)                                 If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Required Lenders may, to the extent permitted by Applicable Law, by notice in writing to the Borrower and such Person, remove such Person as Administrative Agent and, in consultation with the Borrower appoint a successor.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.

 

(c)                                  With effect from the Resignation Effective Date or the Removal Effective Date (as applicable), (i) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the Issuing Lenders under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (ii) except for any indemnity payments owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and each Issuing Lender directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above.  Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed Administrative Agent (other than any rights to indemnity payments owed to the retiring or removed Administrative Agent), and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents.  The fees payable by the Credit Parties to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Credit Parties and such successor.  After the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 11.3 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.

 

(d)                                 Any resignation by, or removal of, Wells Fargo as Administrative Agent pursuant to this Section shall also constitute its resignation as Fronting Bank and L/C Agent.  Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Fronting Bank and L/C Agent, if in its sole discretion it elects to, and Swingline Lender, (ii) each of the retiring Fronting Bank, L/C Agent and Swingline Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (iii) the successor Fronting Bank and L/C Agent, if in its sole discretion it elects to and in consultation with the Borrower, shall issue Letters of Credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring Fronting Bank and L/C Agent to effectively assume the obligations of the retiring Fronting Bank and L/C Agent with respect to such Letters of Credit.

 

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SECTION 10.7.                                   Non-Reliance on Administrative Agent and Other Lenders.  Each Lender and each Issuing Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender and each Issuing Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

 

SECTION 10.8.                                   No Other Duties, Etc.  Anything herein to the contrary notwithstanding, none of the syndication agents, documentation agents, co-agents, arrangers or bookrunners listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or an Issuing Lender hereunder.

 

SECTION 10.9.                                   Lender ERISA Representations.

 

(a)                                 Each Lender (x) represents and warrants, as of the date such Person became a Lender part hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, the Arrangers and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Credit Parties, that at least one of the following is and will be true:

 

(i)                                     Such Lender is not using “plan assets” (within the meaning of 29 CFR § 2510.3101, as modified by Section 3(42) of ERISA) of one or more Employee Benefit Plans in connection with the Loans, the Letters of Credit or the Commitment;

 

(ii)                                  The transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of an performance of the Loans, the Letters of Credit, the Commitment and this Agreement;

 

(iii)                               (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitment and this Agreement (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitment and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I

 

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of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitment and this Agreement; or

 

(iv)                              Such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

 

(b)                                 In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has not provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, the Arrangers and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Credit Parties, that:

 

(i)                                     none of the Administrative Agent, the Arrangers or any of their respective Affiliates is a fiduciary with respect to the assets of such Lender (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related to hereto or thereto);

 

(ii)                                  the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitment and this Agreement is independent (within the meaning of 29 CFR § 2510.3-21) and is a bank, an insurance carrier, an investment adviser, a broker-dealer or other person that holds, or has under management or control, total assets of at least $50,000,000, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E);

 

(iii)                               the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitment and this Agreement is capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies (including in respect of the Obligations);

 

(iv)                              the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitment and this Agreement is a fiduciary under ERISA or the Code, or both, with respect to the Loans, the Letters of Credit, the Commitment and this Agreement and is responsible for exercising independent judgment in evaluating the transactions hereunder; and

 

(v)                                 no fee or other compensation is being paid directly to the Administrative Agent, any Arranger or any their respective Affiliates for investment advice (as opposed to other services) in connection with the Loans, the Letters of Credit, the Commitment or this Agreement.

 

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(c)                                  The Administrative Agent and the Arrangers hereby inform the Lenders that each such Person is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Letters of Credit, the Commitment and this Agreement, (ii) may recognize a gain if it extended the Loans, the Letters of Credit or the Commitment for an amount less than the amount being paid for an interest in the Loans, the Letters of Credit or the Commitment by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing.

 

ARTICLE XI.

 

MISCELLANEOUS

 

SECTION 11.1.                                   Notices.

 

(a)                                 Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows:

 

	
 
    	
If to any Credit Party:

 

Sirius International   Group, Ltd.
   140 Broadway, 32nd Floor
   New York, New York 10005
   Attention of:  Gene Boxer, General   Counsel
   Telephone No.:  (212) 312-2512
   Facsimile No.:  (212) 312-2526
   E-mail:  Gene.Boxer@siruisgroup.com

 

With copies to:

 

Willkie Farr & Gallagher LLP
   787 Seventh Avenue
   New York, New York 10019
    
	
 
    	
Attention of:
    	
Gregory   Astrachan, Esq.
    
	
 
    	
 
    	
Viktor   Okasmaa, Esq.
    
	
 
    	
Telephone No.:
    	
(212) 728-8608
    
	
 
    	
 
    	
(212) 728-8270
    

 

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Facsimile No.:
    	
(212) 728-9608
    
	
 
    	
 
    	
(212) 728-9270
    
	
 
    	
 
    	
 
    
	
 
    	
E-mail:
    	
gastrachan@willkie.com
    
	
 
    	
 
    	
vokasmaa@willkie.com
    
	
 
    	
 
    	
 
    
	
 
    	
If to Wells Fargo as
   Administrative
   Agent, Fronting Bank, L/C Agent or:
   Swingline Lender

 

Wells Fargo Bank,   National Association
   MAC D1109-019
   1525 West W.T. Harris Blvd.
   Charlotte, NC 28262
   Attention of:  Syndication Agency   Services
   Telephone No.:  (704) 590-2703
   Facsimile No.:  (704) 715-0092

 

With copies to:

 

Wells Fargo Bank,   National Association
   One Wells Fargo Center, 11th Floor
   301 South College Street
   Charlotte, North Carolina 28202
   Attention of:  Will Goley
   Telephone No.:  (704) 410-0854
   Facsimile No.:  (704) 410-0331
   E-mail:  will.goley@wellsfargo.com
    
	
 
    	
 
    
	
 
    	
If to any Lender:

 

To the address of such   Lender set forth on the Register with respect to deliveries of notices and   other documentation that may contain material non-public information.
    

 

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient).  Notices delivered through electronic communications to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).

 

(b)                                 Electronic Communications.  Notices and other communications to the Lenders and the Issuing Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or any

 

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Issuing Lender pursuant to Article III or IV (other than notices and other communications sent by email) if such Lender or such Issuing Lender, as applicable, has notified the Administrative Agent that is incapable of receiving notices under such Article by electronic communication.  The Administrative Agent or any Credit Party may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications (other than notices and other communications sent by email).  Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice, email or other communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

 

(c)                                  Administrative Agent’s Office.  The Administrative Agent hereby designates its office located at the address set forth above, or any subsequent office which shall have been specified for such purpose by written notice to the Credit Parties and the Lenders, as the Administrative Agent’s Office referred to herein, to which payments due are to be made and at which Loans will be disbursed and Letters of Credit are to be requested.

 

(d)                                 Change of Address, Etc.  Each Credit Party, the Administrative Agent, the L/C Agent and any Issuing Lender may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.  Any Lender may change its address or facsimile number for notices and other communications hereunder by notice to the Credit Parties, the Administrative Agent, and each Issuing Lender.

 

(e)                                  Platform.

 

(i)                                     Each Credit Party agrees that the Administrative Agent may, but shall not be obligated to, make available materials and/or information provided by or on behalf of the Credit Parties hereunder (collectively, “Parent Materials”) to the Issuing Lenders and the other Lenders by posting the Parent Materials on the Platform.

 

(ii)                                  The Platform is provided “as is” and “as available.”  The Agent Parties (as defined below) do not warrant the accuracy or completeness of the Parent Materials or the adequacy of the Platform, and expressly disclaim liability for errors or omissions in the Parent Materials.  No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Parent Materials or the Platform.  In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to any Credit Party, any Lender or any other Person or entity for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or

 

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otherwise) arising out of any Credit Party’s or the Administrative Agent’s transmission of communications through the Internet (including, without limitation, the Platform), except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided that in no event shall any Agent Party have any liability to any Credit Party, any Lender, the Issuing Lender or any other Person for indirect, special, incidental, consequential or punitive damages, losses or expenses (as opposed to actual damages, losses or expenses).

 

SECTION 11.2.                                   Amendments, Waivers and Consents.  Except as set forth below or as specifically provided in any Loan Document, any term, covenant, agreement or condition of this Agreement or any of the other Loan Documents may be amended or waived by the Lenders, and any consent given by the Lenders, if, but only if, such amendment, waiver or consent is in writing signed by the Required Lenders (or by the Administrative Agent with the consent of the Required Lenders) and delivered to the Administrative Agent and, in the case of an amendment, signed by Borrower; provided, that no amendment, waiver or consent shall:

 

(a)                                 increase or extend the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 9.2) or increase the amount of Loans of any Lender, in any case, without the written consent of such Lender;

 

(b)                                 waive, extend or postpone any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly and adversely affected thereby;

 

(c)                                  reduce the principal of, or the rate of interest specified herein on, any Loan or Reimbursement Obligation, or (subject to clause (iii) of the proviso set forth in the paragraph below) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender directly and adversely affected thereby; provided that only the consent of the Required Lenders shall be necessary (i) to waive any obligation of any Credit Party to pay interest at the rate set forth in Section 4.1(b) during the continuance of an Event of Default or (ii) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or L/C Obligation or to reduce any fee payable hereunder;

 

(d)                                 change Section 4.6 in a manner that would alter the pro rata sharing of payments or order of application required thereby without the written consent of each Lender directly and adversely affected thereby;

 

(e)                                  change any provision of this Section or reduce the percentages specified in the definitions of “Required Lenders,” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender directly and adversely affected thereby;

 

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(f)                                   consent to the assignment or transfer by any Credit Party of such Credit Party’s rights and obligations under any Loan Document to which it is a party (except as permitted pursuant to Section 8.4), in each case, without the written consent of each Lender;

 

(g)                                  release any Guarantor from the Guaranty set forth in Article XII, without the written consent of each Lender; or

 

(h)                                 change this Section 11.2, without the written consent of each Lender; provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the Fronting Bank or the L/C Agent in addition to the Lenders required above, affect the rights or duties of the Fronting Bank or the L/C Agent, as applicable, under this Agreement, (ii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document, (iii) the Fee Letters may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto, (iv) no amendment, waiver or consent shall, unless in writing and signed by the Swingline Lender in addition to the Lender required above, affect the rights or duties of the Swingline Lender under this Agreement, and (v) the Administrative Agent and the Borrower shall be permitted to amend any provision of the Loan Documents (and such amendment shall become effective without any further action or consent of any other party to any Loan Document) if the Administrative Agent and the Borrower shall have jointly identified an obvious error or any error, ambiguity, defect or inconsistency or omission of a technical or immaterial nature in any such provision.  Notwithstanding anything to the contrary herein, no Defaulting Lender or Lender that ceases to be a NAIC Qualified Lender (unless such Lender has in effect a Fronting Agreement with a Person which is listed on the NAIC Qualified Institution List to act as a Fronting Bank in accordance with Section 4.16) shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that (A) the Commitment of such Lender may not be increased or extended without the consent of such Lender, and (B) any amendment, waiver, or consent hereunder which requires the consent of all Lenders or each affected Lender that by its terms disproportionately and adversely affects any such Defaulting Lender or Non-NAIC Qualified Lender relative to other affected Lenders shall require the consent of such Defaulting Lender or Non-NAIC Qualified Lender.

 

SECTION 11.3.                                   Expenses; Indemnity.

 

(a)                                 Costs and Expenses.  Promptly following written demand therefor, the Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable documented fees, charges and disbursements of counsel for the Administrative Agent, but limited to the reasonable and documented out-of-pocket fees, disbursements and other charges of one counsel to the Arrangers, and, if reasonably necessary, a single local counsel and regulatory counsel for the Arrangers, in each relevant jurisdiction and with respect to each relevant specialty, and in the case of an actual or perceived conflict of interest, one additional counsel in each relevant jurisdiction to the affected Arrangers similarly situated and taken as a whole), in connection with the syndication of the Credit Facility, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all

 

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reasonable out-of-pocket expenses incurred by the Administrative Agent, the L/C Agent or any Issuing Lender in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable out-of-pocket expenses incurred by the Administrative Agent, the L/C Agent, any Lender or any Issuing Lender (including the reasonable documented fees, charges and disbursements of any counsel for the Administrative Agent, the L/C Agent, any Lender or any Issuing Lender), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such reasonable out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

 

(b)                                 Indemnification by the Borrower.  The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), the L/C Agent, each Lender and each Issuing Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims (including, without limitation, any Environmental Claims), penalties, damages, liabilities and related expenses (including the reasonable documented fees, charges and disbursements of any counsel for any Indemnitee, but limited, in the case of legal fees and expenses, to the reasonable and documented out-of-pocket fees, disbursements and other charges of one counsel to all Indemnitees (taken as a whole) and, if reasonably necessary, a single local counsel for all Indemnitees (taken as a whole) in each relevant jurisdiction and with respect to each relevant specialty, and in the case of an actual or perceived conflict of interest, one additional counsel in each relevant jurisdiction to the affected Indemnitees similarly situated and taken as a whole), incurred by any Indemnitee or asserted against any Indemnitee by any Person (including the Borrower or any other Credit Party), arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the L/C Agent or any Issuing Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of hazardous materials on or from any property owned or operated by any Credit Party or any Subsidiary thereof, or any Environmental Claim related in any way to any Credit Party or any Subsidiary, (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by any Credit Party or any Subsidiary thereof, and regardless of whether any Indemnitee is a party thereto, or (v) any claim (including, without limitation, any Environmental Claims), investigation, litigation or other proceeding (whether or not the Administrative Agent or any Lender is a party thereto) and the prosecution and defense thereof, arising out of or in any way connected with the Loans, this Agreement, any other Loan Document, or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby, including without limitation, reasonable attorneys and consultant’s fees, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (A) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or the gross negligence or willful misconduct of any Related Party controlled

 

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by such Indemnitee who is directly involved with the transactions contemplated hereby, (B) result from a claim brought by any Credit Party or any Subsidiary thereof against an Indemnitee (or any Related Party controlled by such Indemnitee who is directly involved with the transactions contemplated hereby) for a material breach of such Indemnitee’s obligations hereunder or under any other Loan Document, if such Credit Party or such Subsidiary has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction or (C) arise from any dispute solely between the Indemnitees and not involving any act or omission by any Credit Party or any of its Affiliates, other than any claims against the Administrative Agent or any Arranger in their respective capacity or in fulfilling their role as an Administrative Agent or Arranger or any similar role hereunder or under any Loan Document.  This Section 11.3(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

 

(c)                                  Reimbursement by Lenders.  To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under clause (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the L/C Agent, the Fronting Bank, or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the L/C Agent, the Fronting Bank, or such Related Party, as the case may be, such Lender’s Ratable Share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender); provided, that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or the L/C Agent or the Fronting Bank in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or the L/C Agent or the Fronting Bank in connection with such capacity.  The obligations of the Lenders under this clause (c) are subject to the provisions of Section 4.7(c).

 

(d)                                 Waiver of Consequential Damages, Etc.  To the fullest extent permitted by Applicable Law, the Borrower and each other Credit Party shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof.  No Indemnitee referred to in clause (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

 

(e)                                  Payments.  All amounts due under this Section shall be payable promptly after demand therefor.

 

(f)                                   Survival.  Each party’s obligations under this Section shall survive the termination of the Loan Documents and payment of the obligations hereunder.

 

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SECTION 11.4.                                   Right of Setoff.  If an Event of Default shall have occurred and be continuing, each Lender, each Issuing Lender, the Swingline Lender and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Applicable Law, to setoff and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, such Issuing Lender, the Swingline Lender or any such Affiliate to or for the credit or the account of the Borrower or any other Credit Party against any and all of the obligations of the Borrower or such Credit Party now or hereafter existing under this Agreement or any other Loan Document to such Lender, such Issuing Lender, the Swingline Lender or any of their respective Affiliates, irrespective of whether or not such Lender, such Issuing Lender, the Swingline Lender or any such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower or such Credit Party may be contingent or unmatured or are owed to a branch or office of such Lender, such Issuing Lender, the Swingline Lender or such Affiliate different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender or any Affiliate thereof shall exercise any such right of setoff, (x) all amounts so setoff shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 4.6 and, pending such payment, shall be segregated by such Defaulting Lender or Affiliate of a Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Lenders, and the Lenders, and (y) the Defaulting Lender or its Affiliate shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender or any of its Affiliates as to which such right of setoff was exercised.  The rights of each Lender, each Issuing Lender, the Swingline Lender and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, such Issuing Lender, the Swingline Lender or their respective Affiliates may have.  Each Lender, and such Issuing Lender and the Swingline Lender agree to notify the Borrower and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.

 

SECTION 11.5.                                   Governing Law; Jurisdiction, Etc.

 

(a)                                 Governing Law.  This Agreement and the other Loan Documents and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the law of the State of New York.

 

(b)                                 Submission to Jurisdiction.  Each party hereto irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the Administrative Agent, the L/C Agent, any Lender, any Issuing Lender, the Swingline Lender, or any Related Party of the foregoing in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or thereto, in any forum other than the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the exclusive jurisdiction of such courts and agrees that all claims

 

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in respect of any such action, litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by Applicable Law, in such federal court.  Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement or in any other Loan Document shall affect any right that the Administrative Agent, any Lender, any Issuing Lender or the Swingline Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or any other Credit Party or its properties in the courts of any jurisdiction.

 

(c)                                  Waiver of Venue.  Each party hereto irrevocably and unconditionally waives, to the fullest extent permitted by Applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

(d)                                 SERVICE OF PROCESS.  EACH CREDIT PARTY IRREVOCABLY CONSENTS THAT SERVICE OF PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL DIRECTED TO IT AT THE ADDRESS OF ITS AGENT FOR SERVICE OF PROCESS, SIRIUS AMERICA INSURANCE COMPANY, WITH OFFICES AT 140 BROADWAY, 32ND FLOOR, NEW YORK, NEW YORK 10005, AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID AND PROPERLY ADDRESSED.  IN ADDITION, EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.1.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

SECTION 11.6.                                   Waiver of Jury Trial.

 

(a)                                 EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

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SECTION 11.7.                                   Reversal of Payments.  To the extent any Credit Party makes a payment or payments to the Administrative Agent for the ratable benefit of any of the Credit Parties or to any Credit Party directly or the Administrative Agent or any Lender exercises its right of setoff, which payments or proceeds (including any proceeds of such setoff) or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any Debtor Relief Law, other Applicable Law or equitable cause, then, to the extent of such payment or proceeds repaid, the Obligations or part thereof intended to be satisfied shall be revived and continued in full force and effect as if such payment or proceeds had not been received by the Administrative Agent, and each Lender and each Issuing Lender severally agrees to pay to the Administrative Agent upon demand its applicable Ratable Share (without duplication) of any amount so recovered from or repaid by the Administrative Agent plus interest thereon at a per annum rate equal to the Federal Funds Rate from the date of such demand to the date such payment is made to the Administrative Agent.

 

SECTION 11.8.                                   [Reserved]

 

SECTION 11.9.                                   Successors and Assigns; Participations.

 

(a)                                 Successors and Assigns Generally.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Borrower nor any other Credit Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of paragraph (b) of this Section, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (e) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)                                 Assignments by Lenders.  Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that, any such assignment shall be subject to the following conditions:

 

(i)                                     Minimum Amounts.

 

(A)                               in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and/or the Loans at the time owing to it or contemporaneous assignments to related Approved Funds (determined after giving effect to such assignments) that equal at least the amount specified in paragraph (b)(i)(B) of this Section in the aggregate or in the case of an assignment

 

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to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

 

(B)                               in any case not described in paragraph (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) assigned shall not be less than $5,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided that the Borrower shall be deemed to have given its consent five (5) Business Days after the date written notice thereof has been delivered by the assigning Lender (through the Administrative Agent) unless such consent is expressly refused by the Borrower prior to such fifth (5th) Business Day;

 

(ii)                                  Proportionate Amounts.  Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Commitment assigned;

 

(iii)                               Required Consents.  No consent shall be required for any assignment except to the extent required by paragraph (b)(i)(B) of this Section and, in addition:

 

(A)                               the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (x) an Event of Default has occurred and is continuing at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided, that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within 10 Business Days after having received notice thereof;

 

(B)                               the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments if such assignment is to a Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender; and

 

(C)                               the consents of the Fronting Bank and the Swingline Lender shall be required for any assignment, unless such assignment is to an Affiliate of a Lender, provided that such Affiliate, at the time of any such assignment, (1) is a NAIC Qualified Lender and (2) has senior unsecured debt ratings that are either (x) at least A- from S&P and A3 from Moody’s Investors Service, Inc. or (y) the same or better than such ratings of the assigning Lender.

 

(iv)                              Assignment and Assumption.  The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500 for each assignment; provided that (A) only one

 

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such fee will be payable in connection with simultaneous assignments to two or more related Approved Funds by a Lender and (B) the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

 

(v)                                 No Assignment to Certain Persons.  No such assignment shall be made to (A) the Parent or any of its Subsidiaries or Affiliates, (B) any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B) or (C) a Person that is a Non-NAIC Qualified Lender.

 

(vi)                              No Assignment to Natural Persons.  No such assignment shall be made to a natural Person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person).

 

(vii)                           Certain Additional Payments.  In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the Commitment Percentage of Loans previously requested, but not funded by, the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (A) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, the Issuing Lenders, the Swingline Lender and each other Lender hereunder (and interest accrued thereon), and (B) acquire (and fund as appropriate) its Commitment Percentage of all participations in Participated Letters of Credit and drawn Syndicated Letters of Credit.  Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under Applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of, Section 4.8, Section 4.9, Section 4.10, Section 4.11 and Section 11.3 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party

 

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hereunder arising from that Lender’s having been a Defaulting Lender.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section (other than a purported assignment to a natural Person or any Credit Party or any Credit Party’s Subsidiaries or Affiliates, which shall be null and void).

 

(c)                                  Register.  The Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices in Charlotte, North Carolina, a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amounts of (and stated interest on) the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Borrower and any Lender (but only to the extent of entries in the Register that are applicable to such Lender), at any reasonable time and from time to time upon reasonable prior notice.

 

(d)                                 Participations.  Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural Person, (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person, or the Parent or any of the Parent’s Subsidiaries or Affiliates) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the Issuing Lender, the Swingline Lender and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 11.3(c) with respect to any payments made by such Lender to its Participant(s).

 

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in Section 11.2(a), Section 11.2(b), Section 11.2(c), Section 11.2(d) that directly and adversely affects such Participant.  The Credit Parties agree that each Participant shall be entitled to the benefits of Section 4.9, Section 4.10 and Section 4.11 (subject to the requirements and limitations therein (it being understood that the documentation required under Section 4.11(g) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Section 4.12 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Section 4.10 or Section 4.11, with respect to any participation, than its participating Lender would have been 

 

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entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.  Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 4.12(b) with respect to any Participant.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.4 as though it were a Lender; provided that such Participant agrees to be subject to Section 4.6 and Section 11.4 as though it were a Lender.

 

Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts of (and stated interest on) each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

(e)                                  Certain Pledges.  Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank or other central bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

SECTION 11.10.                            Treatment of Certain Information; Confidentiality.  Each of the Administrative Agent, the Lenders and the Issuing Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective Related Parties in connection with the Credit Facility, this Agreement, the transactions contemplated hereby or in connection with marketing of services by such Affiliate or Related Party to the Parent or any of its Subsidiaries (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent required or requested by, or required to be disclosed to, any regulatory or similar authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners) or in accordance with the Administrative Agent’s, such Issuing Lender’s or any Lender’s regulatory compliance policy if the Administrative Agent, such Issuing Lender or such Lender, as applicable, deems such disclosure to be necessary for the mitigation of claims by those authorities against the Administrative Agent, such Issuing Lender or such Lender, as applicable, or any of its Related Parties (in which case, the Administrative Agent, such Issuing Lender or such Lender, as applicable, shall use commercially reasonable efforts to, except with respect to any audit or examination conducted by bank

 

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accountants or any governmental bank regulatory authority exercising examination or regulatory authority, promptly notify the Borrower, in advance, to the extent practicable and otherwise permitted by Applicable Law), (c) as to the extent required by Applicable Laws or regulations or in any legal, judicial, administrative proceeding or other compulsory process, (d) to any other party hereto, (e) in connection with the exercise of any remedies under this Agreement or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document, or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement, or (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Parent and its obligations, this Agreement or payments hereunder, (g) on a confidential basis to (i) any rating agency in connection with rating the Borrower or its Subsidiaries or the Credit Facility or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Credit Facility, (h) with the consent of the Borrower, (i) deal terms and other information customarily reported to Thomson Reuters, other bank market data collectors and similar service providers to the lending industry and service providers to the Administrative Agent and the Lenders in connection with the administration of the Loan Documents, (j) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, any Lender, any Issuing Lender or any of their respective Affiliates from a third party that is not, to such Person’s knowledge, subject to confidentiality obligations to the Borrower or any other Credit Party, (k) to the extent that such information is independently developed by such Person, or (l) for purposes of establishing a “due diligence” defense.  For purposes of this Section, “Information” means all information received from any Credit Party or any Subsidiary thereof relating to any Credit Party or any Subsidiary thereof or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or any Issuing Lender on a nonconfidential basis prior to disclosure by any Credit Party or any Subsidiary thereof; provided that, in the case of information received from a Credit Party or any Subsidiary thereof after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

 

SECTION 11.11.                            Performance of Duties.  Each of the Credit Party’s obligations under this Agreement and each of the other Loan Documents shall be performed by such Credit Party at its sole cost and expense.

 

SECTION 11.12.                            All Powers Coupled with Interest.  All powers of attorney and other authorizations granted to the Lenders, the Administrative Agent and any Persons designated by the Administrative Agent or any Lender pursuant to any provisions of this Agreement or any of the other Loan Documents shall be deemed coupled with an interest and shall be irrevocable so long as any of the Obligations remain unpaid or unsatisfied, any of the Commitments remain in effect or the Credit Facility has not been terminated.

 

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SECTION 11.13.                            Survival.

 

(a)                                 All representations and warranties set forth in Article VIII and all representations and warranties contained in any certificate, or any of the Loan Documents (including, but not limited to, any such representation or warranty made in or in connection with any amendment thereto) shall constitute representations and warranties made under this Agreement.  All representations and warranties made under this Agreement shall be made or deemed to be made at and as of the Closing Date (except those that are expressly made as of a specific date), shall survive the Closing Date and shall not be waived by the execution and delivery of this Agreement, any investigation made by or on behalf of the Lenders or any Credit Extension.

 

(b)                                 Notwithstanding any termination of this Agreement, the express indemnities to which the Administrative Agent and the Lenders are entitled under the provisions of this Article XI and any other provision of this Agreement and the other Loan Documents shall continue in full force and effect and shall protect the Administrative Agent and the Lenders against events arising after such termination as well as before.

 

SECTION 11.14.                            Titles and Captions.  Titles and captions of Articles, Sections and subsections in, and the table of contents of, this Agreement are for convenience only, and neither limit nor amplify the provisions of this Agreement.

 

SECTION 11.15.                            Severability of Provisions.  Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating the remainder of such provision or the remaining provisions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction.  In the event that any provision is held to be so prohibited or unenforceable in any jurisdiction, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such provision to preserve the original intent thereof in such jurisdiction (subject to the approval of the Required Lenders).

 

SECTION 11.16.                            Counterparts; Integration; Effectiveness; Electronic Execution.

 

(a)                                 Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement and the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent, the Issuing Lenders, the Swingline Lender and/or the Arrangers, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 7.1, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.

 

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(b)                                 Electronic Execution of Assignments.  The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

 

SECTION 11.17.                            Term of Agreement.  This Agreement shall remain in effect from the Closing Date through and including the date upon which all Obligations (other than contingent indemnification obligations not then due) arising hereunder or under any other Loan Document shall have been indefeasibly and irrevocably paid and satisfied in full, all Letters of Credit have been terminated or expired and the Commitments have been terminated.  No termination of this Agreement shall affect the rights and obligations of the parties hereto arising prior to such termination or in respect of any provision of this Agreement which survives such termination.

 

SECTION 11.18.                            USA PATRIOT Act; Anti-Money Laundering Laws.  The Administrative Agent and each Lender hereby notifies each Credit Party that pursuant to the requirements of the PATRIOT Act or any other Anti-Money Laundering Laws, each of them is required to obtain, verify and record information that identifies each Credit Party, which information includes the name and address of each Credit Party and other information that will allow such Lender to identify each Credit Party in accordance with the PATRIOT Act or such Anti-Money Laundering Laws.

 

SECTION 11.19.                            Independent Effect of Covenants.  Each Credit Party expressly acknowledges and agrees that each covenant contained in Article VII and Article VIII hereof shall be given independent effect.  Accordingly, no Credit Party shall engage in any transaction or other act otherwise permitted under any covenant contained in Article VII or Article VIII, if before or after giving effect to such transaction or act, such Credit Party shall or would be in breach of any other covenant contained in Article VII or Article VIII.

 

SECTION 11.20.                            No Advisory or Fiduciary Responsibility.

 

(a)                                 In connection with all aspects of each transaction contemplated hereby, each Credit Party acknowledges and agrees, and acknowledges its Affiliates’ understanding, that (i) the facilities provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm’s-length commercial transaction between the Borrower and its Affiliates, on the one hand, and the Administrative Agent, the Arrangers and the Lenders, on the other hand, and the Borrower is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof), (ii) in connection with the process leading to such transaction, each of the Administrative Agent, the Arrangers and the Lenders is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for the Borrower or any of its Affiliates, stockholders, creditors or employees or any other Person, (iii) none of the Administrative Agent, the Arrangers or the

 

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Lenders has assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Borrower or any of its Affiliates with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether any Arranger or Lender has advised or is currently advising the Borrower or any of its Affiliates on other matters) and none of the Administrative Agent, the Arrangers or the Lenders has any obligation to the Borrower or any of its Affiliates with respect to the financing transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents, (iv) the Arrangers and the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from, and may conflict with, those of the Borrower and its Affiliates, and none of the Administrative Agent, the Arrangers or the Lenders has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship and (v) the Administrative Agent, the Arrangers and the Lenders have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and the Credit Parties have consulted their own legal, accounting, regulatory and tax advisors to the extent they have deemed appropriate.

 

(b)                                 Each Credit Party acknowledges and agrees that each Lender, the Arrangers and any Affiliate thereof may lend money to, invest in, and generally engage in any kind of business with, any of the Parent, the Borrower, any Affiliate thereof or any other person or entity that may do business with or own securities of any of the foregoing, all as if such Lender, Arranger or Affiliate thereof were not a Lender or Arranger or an Affiliate thereof (or an agent or any other person with any similar role under the Credit Facilities) and without any duty to account therefor to any other Lender, the Arrangers, the Parent, the Borrower, or any Affiliate of the foregoing.  Each Lender, the Arrangers and any Affiliate thereof may accept fees and other consideration from the Parent, the Borrower, or any Affiliate thereof for services in connection with this Agreement, the Credit Facilities or otherwise without having to account for the same to any other Lender, the Arrangers, the Borrower or any Affiliate of the foregoing.

 

SECTION 11.21.                            Inconsistencies with Other Documents.  In the event there is a conflict or inconsistency between this Agreement and any other Loan Document, the terms of this Agreement shall control.

 

SECTION 11.22.                            Acknowledgement and Consent to Bail-In of EEA Financial Institutions.  Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

 

(a)                                 the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

 

(b)                                 the effects of any Bail-In Action on any such liability, including, if applicable:

 

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(i)                                     a reduction in full or in part or cancellation of any such liability;

 

(ii)                                  a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

 

(iii)                               the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.

 

SECTION 11.23.                            Judgment Currency.  If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Loan Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given.  The obligation of the applicable Credit Party in respect of any such sum due from it to the Administrative Agent or any Lender or Issuing Lender hereunder or under the other Loan Documents shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by the Administrative Agent or such Lender, as the case may be, of any sum adjudged to be so due in the Judgment Currency, the Administrative Agent or such Lender or Issuing Lender, as the case may be, may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency.  If the amount of the Agreement Currency so purchased is less than the sum originally due to the Administrative Agent or any Lender or Issuing Lender from the applicable Credit Party in the Agreement Currency, such Credit Party agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Administrative Agent or such Lender or Issuing Lender, as the case may be, against such loss.  If the amount of the Agreement Currency so purchased is greater than the sum originally due to the Administrative Agent or any Lender or Issuing Lender in such currency, the Administrative Agent or such Lender or Issuing Lender, as the case may be, agrees to return the amount of any excess to the applicable Credit Party (or to any other Person who may be entitled thereto under applicable Law).

 

ARTICLE XII.

 

GUARANTY

 

SECTION 12.1.                                   The Guaranty.

 

(a)                                 In order to induce the Lenders to enter into this Agreement and to make Credit Extensions hereunder and in recognition of the direct benefits to be received by the Guarantors from the Credit Extensions hereunder, each Guarantor hereby unconditionally, absolutely and irrevocably, guarantees, as a primary obligor and not merely as surety, the full and punctual payment of all Obligations of the Borrower and the Account Parties under the Loan Documents (or, in the case of the Borrower in its capacity as a Guarantor, the full and punctual payment of all Obligations of the other Account Parties under the Loan Documents).  This Guaranty is a guaranty

 

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of payment and not of collection.  Upon failure by the Borrower or any Account Party to pay punctually any such amount owing by it (or, in the case of the Borrower in its capacity as a Guarantor, upon the failure by any other Account Party to pay punctually any such amount owing by it), each Guarantor agrees to pay forthwith on demand the amount not so paid at the place and in the manner specified in this Agreement.

 

SECTION 12.2.                                   Guaranty Unconditional.  The obligations of each Guarantor under this Article XII shall be unconditional, absolute and irrevocable, and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by:

 

(i)                                     any extension, renewal, settlement, compromise, waiver or release (including with respect to any Cash Collateral) in respect of any obligation of any other obligor under any of the Loan Documents, by operation of law or otherwise;

 

(ii)                                  any modification or amendment of or supplement to any of the Loan Documents in accordance with the terms thereof;

 

(iii)                               any release, non-perfection or invalidity of any direct or indirect security for any obligation of any other obligor under any of the Loan Documents;

 

(iv)                              any change in the corporate existence, structure or ownership of any obligor, or any filing by or against any Credit Party of any petition seeking any relief in bankruptcy or under any Debtor Relief Law or other similar proceeding affecting any other obligor or its assets or any resulting release or discharge of any obligation of any other obligor contained in any of the Loan Documents;

 

(v)                                 the existence of any claim, set-off or other rights which any obligor may have at any time against any other obligor, the Administrative Agent, the L/C Agent, the Swingline Lender, any Issuing Lender, any Lender or any other corporation or person, whether in connection with any of the Loan Documents or any unrelated transactions, provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;

 

(vi)                              any invalidity or unenforceability relating to or against any other obligor for any reason of any of the Loan Documents, or any provision of applicable law or regulation purporting to prohibit the payment by any other obligor of principal, interest or any other amount payable under any of the Loan Documents;

 

(vii)                           any law, regulation or order of any jurisdiction, or any other event, affecting any term of any obligation or the Lenders’ rights with respect thereto;

 

(viii)                        the addition or release of any Guarantor hereunder or the taking, acceptance or release of other guarantees of the Obligations; or

 

(ix)                              any other act or omission to act or delay of any kind by any obligor, the Administrative Agent, the L/C Agent, any Issuing Lender, the Swingline Lender, any Lender or any other corporation or person or any other circumstance whatsoever (other than the defense of payment) which might, but for the provisions of this paragraph,

 

119

 

constitute a legal or equitable discharge of or defense to such Guarantor’s obligations under this Article XII.

 

SECTION 12.3.                                   Discharge Only upon Payment in Full; Reinstatement in Certain Circumstances.  Each Guarantor’s obligations under this Article XII shall remain in full force and effect until the Commitments of the Lenders hereunder shall have terminated, no Credit Extension shall be outstanding and all Obligations payable by the Credit Parties under the Loan Documents shall have been paid in full, or until such earlier date terminated in accordance with Section 12.7.  If at any time any payment of any Obligation payable by a Credit Party under the Loan Documents is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of such Credit Party or otherwise, each Guarantor’s obligations under this Article XII with respect to such payment shall be reinstated as though such payment had been due but not made at such time.

 

SECTION 12.4.                                   Waiver by the Guarantor.  Each Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any corporation or person against any other obligor or any other corporation or person.  Each Guarantor warrants and agrees that each waiver set forth in this Section 12.4 is made with full knowledge of its significance and consequences, and such waivers shall be effective to the maximum extent permitted by law.

 

SECTION 12.5.                                   Subrogation.  Each Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against the Borrower or any Account Party, or any other insider guarantor that arises from the existence, payment, performance or enforcement of such Guarantor’s obligations under or in respect of this Guaranty or any other Loan Document, including any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of any Lender, any Issuing Lender, the Swingline Lender, the L/C Agent or the Administrative Agent against any Credit Party or any other insider guarantor or any Cash Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including the right to take or receive from any other Credit Party or any other insider guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all Obligations payable under this Agreement shall have been paid in full in cash, no Loans or Letters of Credit shall be outstanding and the Commitments of the Lenders hereunder shall have expired or been terminated.  If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence at any time prior to the later of (a) the payment in full in cash of all amounts payable under this Guaranty, the termination of the Commitments and expiry or cancellation of all Letters of Credit and (b) the Final Maturity Date, such amount shall be received and held in trust for the benefit of the Lenders, shall be segregated from other property and funds of such Guarantor and shall forthwith be paid or delivered to the Administrative Agent in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to all amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of the Loan Documents, or to be held as collateral for any amounts payable under this Guaranty thereafter arising.  If (i) any Guarantor shall make payment to the Lenders, the Issuing Lenders, the Swingline Lender and the Administrative Agent of all or any amounts payable under this Guaranty, (ii) all amounts payable under this Guaranty shall have been paid in full in cash, and (iii) the Final Maturity Date shall have

 

120

 

occurred, the Lenders, the Issuing Lenders, the Swingline Lender and the Administrative Agent will, at such Guarantor’s request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the obligations resulting from such payment made by such Guarantor pursuant to this Guaranty.

 

SECTION 12.6.                                   Stay of Acceleration.  If acceleration of the time for payment of any amount payable by any Credit Party under any of the Loan Documents is stayed upon the occurrence of any filing by or against any Credit Party of any petition seeking any relief in bankruptcy or under any Debtor Relief Law, all such amounts otherwise subject to acceleration under the terms of this Agreement shall nonetheless be payable by the Guarantors under this Article XII forthwith on demand by the Administrative Agent made at the request, or with the consent, of the Required Lenders.

 

SECTION 12.7.                                   Continuing Guaranty; Assignments.  This Guaranty is a continuing guaranty and shall (a) remain in full force and effect until the later of (i) the payment in full in cash of all Obligations payable under this Agreement, the termination of the Commitments and expiry or cancellation of all Letters of Credit and (ii) the Final Maturity Date or, in each case, such earlier date on which such Guarantor ceases to be a Guarantor under the Loan Documents in accordance with the terms of the Loan Documents, (b) be binding upon each Guarantor, its successors and assigns and (c) inure to the benefit of and be enforceable by the Lenders, the Issuing Lenders, the Swingline Lender and the Administrative Agent and their successors, transferees and assigns.  Without limiting the generality of clause (c) of the immediately preceding sentence, any Lender may assign or otherwise transfer all or any portion of its rights and obligations under this Agreement to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Lender herein or otherwise, in each case as and to the extent provided in Section 11.9.

 

SECTION 12.8.                                   Subordination of Other Obligations.  Any Indebtedness of any Credit Party now or hereafter held by any Guarantor is hereby subordinated in right of payment to the Obligations of such Credit Party, and any such Indebtedness collected or received by any Guarantor after receipt of notice of an Event of Default (which has occurred and is continuing) by Administrative Agent shall be held in trust for Administrative Agent on behalf of the Lenders and shall forthwith be paid over to Administrative Agent for the benefit of Lenders to be credited and applied against such Obligations but without affecting, impairing or limiting in any manner the liability of such Guarantor under any other provision hereof.

 

[Signature pages to follow]

 

121

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed under seal by their duly authorized officers, all as of the day and year first written above.

 

	
 
    	
SIRIUS INTERNATIONAL   GROUP, LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Warren J. Trace
    
	
 
    	
Name:  Warren J. Trace
    
	
 
    	
Title:  Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SIRIUS BERMUDA INSURANCE   COMPANY LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Warren J. Trace
    
	
 
    	
Name:  Warren J. Trace
    
	
 
    	
Title:  Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SIRIUS INTERNATIONAL INSURANCE   GROUP LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Warren J. Trace
    
	
 
    	
Name:  Warren J. Trace
    
	
 
    	
Title:  Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SIRIUS INTERNATIONAL HOLDINGS   LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Warren J. Trace
    
	
 
    	
Name:  Warren J. Trace
    
	
 
    	
Title:  Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SIRIUS INTERNATIONAL
    
	
 
    	
FÖRSÄKRINGSAKTIEBOLAG (PUBL)
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Lars Ek
    
	
 
    	
Name:  Lars Ek
    
	
 
    	
Title:  Authorized Signatory
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SIRIUS INTERNATIONAL
    
	
 
    	
FÖRSÄKRINGSAKTIEBOLAG (PUBL)
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Lars Andersson
    
	
 
    	
Name: Lars Andersson
    
	
 
    	
Title: Authorized Signatory
    

 

Sirius International Group, Ltd.

2018 Credit Agreement

 

 

	
 
    	
SIRIUS AMERICA INSURANCE   COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Robert P. Kuehn
    
	
 
    	
Name:  Robert P. Kuehn
    
	
 
    	
Title:  Vice President, General Counsel &   Corporate Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SIRIUS RE HOLDINGS
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Robert P. Kuehn
    
	
 
    	
Name:  Robert P. Kuehn
    
	
 
    	
Title:  Senior Vice President & Corporate   Secretary
    

 

Sirius International Group, Ltd.

2018 Credit Agreement

 

 

	
 
    	
LENDERS:
    
	
 
    	
 
    
	
 
    	
WELLS FARGO BANK, NATIONAL ASSOCIATION,   as Administrative Agent, L/C Agent, Fronting Bank, Issuing Lender   and Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ William R. Goley
    
	
 
    	
Name:
    	
William R. Goley
    
	
 
    	
Title:
    	
Managing Director
    

 

Sirius International Group, Ltd.

2018 Credit Agreement

 

 

	
 
    	
JPMORGAN CHASE BANK, NA.,   as Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James S. Mintzer
    
	
 
    	
Name:
    	
James S. Mintzer
    
	
 
    	
Title:
    	
Executive Director
    

 

Sirius International Group, Ltd.

2018 Credit Agreement

 

 

	
 
    	
BMO HARRIS BANK N.A.,   as Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Joan Murphy
    
	
 
    	
Name:
    	
Joan Murphy
    
	
 
    	
Title:
    	
Managing Director
    

 

Sirius International Group, Ltd.

2018 Credit Agreement

 

 

	
 
    	
DNB SWEDEN AB,   as Lender By:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mats Hӓvermark
    
	
 
    	
Name:
    	
Mats Hӓvermark
    
	
 
    	
Title:
    	
Legal Counsel
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mikael Widercrantz
    
	
 
    	
Name:
    	
Mikael Widercrantz
    
	
 
    	
Title:
    	
Client Advisor
    

 

Sirius International Group, Ltd.

2018 Credit Agreement

 

 

	
 
    	
HSBC BANK USA, NA.,   as Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Richard Herder
    
	
 
    	
Name:
    	
Richard Herder
    
	
 
    	
Title:
    	
Managing Director,   North America FIG Insurance
    

 

Sirius International Group, Ltd.

2018 Credit Agreement

 

 

	
 
    	
LLOYDS BANK PLC,   as Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Kamala Basdeo
    
	
 
    	
Name:
    	
Kamala Basdeo
    
	
 
    	
Title:
    	
Assistant Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jennifer Larrow
    
	
 
    	
Name:
    	
Jennifer Larrow
    
	
 
    	
Title:
    	
Assistant Manager
    

 

Sirius International Group, Ltd.

2018 Credit Agreement

 

 

	
 
    	
Barclays Bank PLC,   as Lender
    
	
 
    	
 
    	
 
    
	
 
    	
Executed in London
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Krishna Maneic
    
	
 
    	
Name:
    	
Krishna Maneic
    
	
 
    	
Title:
    	
Director
    

 

Sirius International Group, Ltd.

2018 Credit Agreement

 

 

	
 
    	
CITIBANK, N.A.,   as Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Justine O’Connor
    
	
 
    	
Name:
    	
Justine O’Connor
    
	
 
    	
Title:
    	
Vice President and   Director
    

 

Sirius International Group, Ltd.

2018 Credit Agreement

 

 

EXHIBIT A-1

 

FORM OF REVOLVING CREDIT NOTE

 

A-1-1

 

REVOLVING CREDIT NOTE

 

	
$              
    	
                ,   2018
    

 

FOR VALUE RECEIVED, the undersigned, SIRIUS INTERNATIONAL GROUP, LTD., an exempted company organized under the laws of Bermuda (the “Borrower”), promises to pay to                 (the “Lender”), at the place and times provided in the Credit Agreement referred to below, the principal sum of [          ] DOLLARS ($[          ]) or, if less, the unpaid principal amount of all Revolving Credit Loans made by the Lender from time to time pursuant to that certain Credit Agreement, dated as of February 8, 2018 (as amended, restated, extended or otherwise modified from time to time, the “Credit Agreement”) by and among the Borrower, Sirius International Insurance Group, Ltd., Sirius International Holdings Ltd., the other subsidiaries of the Borrower party thereto, the lenders party thereto and Wells Fargo Bank, National Association, as Administrative Agent.  Capitalized terms used herein and not defined herein shall have the meanings assigned thereto in the Credit Agreement.

 

The unpaid principal amount of this Revolving Credit Note from time to time outstanding is payable as provided in the Credit Agreement and shall bear interest as provided in Section 4.1 of the Credit Agreement.  All payments of principal and interest on this Revolving Credit Note shall be payable in Dollars in immediately available funds as provided in the Credit Agreement.

 

This Revolving Credit Note is entitled to the benefits of, and evidences Obligations incurred under, the Credit Agreement, to which reference is made for a statement of the terms and conditions on which the Borrower is permitted and required to make prepayments and repayments of principal of the Obligations evidenced by this Revolving Credit Note and on which such Obligations may be declared to be immediately due and payable.

 

THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

Except as required by the Credit Agreement, the Borrower hereby waives all requirements as to diligence, presentment, demand of payment, protest and notice of any kind with respect to this Revolving Credit Note.

 

[Signature Page Follows]

 

A-1-2

 

IN WITNESS WHEREOF, the undersigned has executed this Revolving Credit Note as of the day and year first above written.

 

	
 
    	
SIRIUS INTERNATIONAL   GROUP, LTD.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

A-1-3

 

EXHIBIT A-2

 

FORM OF SWINGLINE NOTE

 

A-2-1

 

SWINGLINE NOTE

 

	
$            
    	
             ,   2018
    

 

FOR VALUE RECEIVED, the undersigned, SIRIUS INTERNATIONAL GROUP, LTD., an exempted company organized under the laws of Bermuda (the “Borrower”), promises to pay to WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Lender”), at the place and times provided in the Credit Agreement referred to below, the principal sum of FIFTY MILLION DOLLARS ($50,000,000.00) or, if less, the unpaid principal amount of all Swingline Loans made by the Lender from time to time pursuant to that certain Credit Agreement, dated as of February 8, 2018 (as amended, restated, extended or otherwise modified from time to time, the “Credit Agreement”) by and among the Borrower, Sirius International Insurance Group, Ltd., Sirius International Holdings Ltd., the other subsidiaries of the Borrower party thereto, the lenders party thereto and Wells Fargo Bank, National Association, as Administrative Agent.  Capitalized terms used herein and not defined herein shall have the meanings assigned thereto in the Credit Agreement.

 

The unpaid principal amount of this Swingline Note from time to time outstanding is payable as provided in the Credit Agreement and shall bear interest as provided in Section 4.1 of the Credit Agreement.  Swingline Loans refunded as Revolving Credit Loans in accordance with Section 2.2(b) of the Credit Agreement shall be payable by the Borrower as Revolving Credit Loans, and shall not be payable under this Swingline Note as Swingline Loans.  All payments of principal and interest on this Swingline Note shall be payable in Dollars in immediately available funds as provided in the Credit Agreement.

 

This Swingline Note is entitled to the benefits of, and evidences Obligations incurred under, the Credit Agreement, to which reference is made for a statement of the terms and conditions on which the Borrower is permitted and required to make prepayments and repayments of principal of the Obligations evidenced by this Swingline Note and on which such Obligations may be declared to be immediately due and payable.

 

THIS SWINGLINE NOTE SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

Except as required by the Credit Agreement, the Borrower hereby waives all requirements as to diligence, presentment, demand of payment, protest and notice of any kind with respect to this Swingline Note.

 

[Signature Page Follows]

 

A-2-2

 

IN WITNESS WHEREOF, the undersigned has executed this Swingline Note under seal as of the day and year first above written.

 

	
 
    	
SIRIUS INTERNATIONAL   GROUP, LTD.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

A-2-3

 

EXHIBIT B

 

FORM OF NOTICE OF BORROWING

 

B-1

 

NOTICE OF BORROWING

 

Dated as of:                           

 

Wells Fargo Bank, National Association,

as Administrative Agent

MAC D 1109-019

1525 West W.T. Harris Blvd.

Charlotte, North Carolina 28262

Attention:  Syndication Agency Services

 

Ladies and Gentlemen:

 

This irrevocable Notice of Borrowing is delivered to you pursuant to Section 2.3 of the Credit Agreement dated as of February 8, 2018 (as amended, restated, extended or otherwise modified from time to time, the “Credit Agreement”), by and among Sirius International Insurance Group, Ltd., Sirius International Holdings Ltd., Sirius International Group, Ltd. (the “Borrower”), the other subsidiaries of the Borrower party thereto, the lenders party thereto, and Wells Fargo Bank, National Association, as Administrative Agent for the Lenders, as L/C Agent and as the Fronting Bank.  Capitalized terms used herein and not defined herein shall have the meanings assigned thereto in the Credit Agreement.

 

1.                                      The Borrower hereby requests that the Lenders make [a Revolving Credit Loan][a Swingline Loan] to the Borrower in the aggregate principal amount of $          .  (Complete with an amount in accordance with Section 2.3 of the Credit Agreement.)

 

2.                                      The Borrower hereby requests that such Loan(s) be made on the following Business Day:                 .  (Complete with a Business Day in accordance with Section 2.3 of the Credit Agreement).

 

3.                                      The Borrower hereby requests that such Loan(s) bear interest at the following interest rate, plus the Applicable Margin, as set forth below:

 

	
 
    	
 
    	
 
    	
 
    	
Interest Period
    
	
Component
    	
 
    	
 
    	
 
    	
(LIBOR
    
	
of Loan(1)
    	
 
    	
Interest Rate
    	
 
    	
Rate only)
    
	
 
    	
 
    	
[Base Rate or LIBOR Rate](2)
    	
 
    	
 
    

 

(1)  Complete with the Dollar amount of that portion of the overall Loan requested that is to bear interest at the selected interest rate and/or Interest Period (e.g., for a $20,000,000 loan, $5,000,000 may be requested at Base Rate, $8,000,000 may be requested at LIBOR with an interest period of three months and $7,000,000 may be requested at LIBOR with an interest period of one month).

 

(2)  Complete with (i) the Base Rate or the LIBOR Rate for Revolving Credit Loans or (ii) the Base Rate for Swingline Loans.

 

B-2

 

4.                                      All of the conditions applicable to the Loan(s) requested herein as set forth in the Credit Agreement have been satisfied as of the date hereof or will be satisfied as of the date of the requested Loan(s).

 

[Signature Page Follows]

 

B-3

 

IN WITNESS WHEREOF, the undersigned has executed this Notice of Borrowing as of the day and year first written above.

 

	
 
    	
SIRIUS INTERNATIONAL   GROUP, LTD.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

B-4

 

EXHIBIT C

 

FORM OF ACCOUNT DESIGNATION

 

C-1

 

NOTICE OF ACCOUNT DESIGNATION

 

Dated as of:                         

 

Wells Fargo Bank, National Association,

as Administrative Agent

MAC D 1109-019

1525 West W.T. Harris Blvd.

Charlotte, North Carolina 28262

Attention:  Syndication Agency Services

 

Ladies and Gentlemen:

 

This Notice of Account Designation is delivered to you pursuant to Section 2.3(b) of the Credit Agreement dated as of February 8, 2018 (as amended, restated, extended or otherwise modified from time to time, the “Credit Agreement”), by and among Sirius International Insurance Group, Ltd., Sirius International Group, Ltd. (the “Borrower”), the other subsidiaries of the Borrower party thereto, the lenders party thereto, and Wells Fargo Bank, National Association, as Administrative Agent for the Lenders, as L/C Agent and as the Fronting Bank.  Capitalized terms used herein and not defined herein shall have the meanings assigned thereto in the Credit Agreement.

 

1.                                      The Administrative Agent is hereby authorized to disburse all Loan proceeds into the following account(s):

 

	
 
    	
Bank Name:
    
	
 
    	
ABA Routing Number:
    
	
 
    	
Account Number:
    

 

2.                                      This authorization shall remain in effect until revoked or until a subsequent Notice of Account Designation is provided to the Administrative Agent.

 

[Signature Page Follows]

 

C-2

 

IN WITNESS WHEREOF, the undersigned has executed this Notice of Account Designation as of the day and year first written above.

 

	
 
    	
SIRIUS INTERNATIONAL   GROUP, LTD.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

C-3

 

EXHIBIT D

 

FORM OF SYNDICATED LETTER OF CREDIT

 

D-1

 

SYNDICATED LETTER OF CREDIT

 

	
 
    	
For Internal Identification Purposes Only
    
	
Issue Date
    	
 
    
	
 
    	
   Applicant:    (Name)
    
	
Clean, Irrevocable Stand By Letter of Credit No.:
    	
 
    
	
 
    	
 
    
	
To Beneficiary:  (Name)
    	
 
    
	
 
    	
(Address)
    
	
(Address)
    	
 
    

 

Dear Sir or Madam:

 

The banks and financial institutions set forth in Schedule 1 hereto (the “Lenders”) hereby open this clean, unconditional and irrevocable for the term hereof Syndicated Letter of Credit in your favor as beneficiary (the “Beneficiary”) through Wells Fargo Bank, National Association, acting as administrative agent (in such capacity, the “Administrative Agent” and attorney-in-fact for the Lenders) (this “Letter of Credit”) in the aggregate amount of U.S. [$             ], effective immediately and remaining in full force and effect, and expiring at the Administrative Agent’s address at 401 N. Research Parkway, First Floor, Winston-Salem, North Carolina, 27101, Attention International Operations, Standby Letters of Credit, D4004-017 no later than 5:00 p.m., Charlotte, North Carolina time, on                  (the “Expiration Date”, as such date may be extended as set forth below).

 

The term “Beneficiary” includes any successor by operation of law of the named Beneficiary including, without limitation, any liquidator, rehabilitator, receiver or conservator.  The term “Business Day” means a day which is not a Saturday, Sunday, legal holiday or any other day on which banking institutions in Charlotte, North Carolina or the city in which the payment office of the Administrative Agent is located are required by law to be closed.

 

The Lenders hereby severally undertake to promptly honor your sight draft(s) drawn on us, duly endorsed by the Beneficiary expressly specifying the Letter of Credit No.            for all or any part of this credit if presented at the Administrative Agent’s office specified in the first paragraph hereof on a Business Day on or prior to the Expiration Date, as such date may be extended.

 

Each of the Lenders agrees, for itself alone and not jointly with any other Lender, to promptly honor a draft drawn by you and presented to the Administrative Agent in an amount not to exceed the aggregate amount available to be drawn hereunder multiplied by such Lender’s percentage obligation as set forth on Schedule 1 to this Syndicated Letter of Credit (the “Percentage Obligations”) and in accordance with the terms and conditions hereinafter set forth.  The obligations of the Lenders hereunder shall be several and not joint, and multiple draws shall be available under this Letter of Credit.  Upon the transfer by a Lender to the Administrative Agent for your account of the amount specified in a draft drawn on such Lender hereunder, such Lender shall be fully discharged of its obligations under this Letter of Credit with respect to such draft, such Lender shall not be obligated thereafter to make any further payments under this Letter of Credit with respect to such draft, and the amount available to be drawn thereafter under this Letter

 

D-2

 

of Credit shall be automatically and permanently reduced by an amount equal to the amount of such draft.  The failure of any Lender to make funds available to the Administrative Agent for payment under this Letter of Credit shall not relieve any other Lender of its obligation hereunder to make funds available to the Administrative Agent.  Neither the Administrative Agent nor any Lender shall be responsible for the failure of any other Lender to honor its share of any drawings hereunder or to make funds available to the Administrative Agent.

 

Except to the extent the amount of this Letter of Credit may be increased, this Letter of Credit cannot be modified or revoked without your written consent; provided that this Letter of Credit may be amended to delete a Lender or add a Lender or change Percentage Obligations so long as such amendment does not decrease the amount of this Letter of Credit, and need only be signed by the Administrative Agent so long as any Lender added shall be listed on the “NAIC List of Qualified U.S. Financial Institutions” maintained by the securities valuation office of the National Association of Insurance Commissioners as issuers of letters of credit for which reinsurance reserve credit can be given.

 

Wells Fargo Bank, National Association has been appointed by the Lenders to act as, has been granted the authority by the Lenders to act as, and has been irrevocably granted a power of attorney by the Lenders to act as Administrative Agent for the Lenders obligated under this Letter of Credit.  As Administrative Agent, Wells Fargo Bank, National Association has full power of attorney from such Lenders to act on their behalf hereunder to (i) execute and deliver this Letter of Credit, (ii) receive drafts, other demands for payment and other documents presented by you hereunder, (iii) determine whether such drafts, demands and documents are in compliance with the terms of this Letter of Credit, and (iv) notify the Lenders that a valid drawing has been made and the date that the related payment under this Letter of Credit is to be made; provided, however, that the Administrative Agent shall have no obligation or liability for any payment under this Letter of Credit (other than payment to you of such funds as have been made available to it by the Lenders pursuant to your draw).

 

This Letter of Credit will be automatically extended without amendment for a one year period upon the Expiration Date and upon each anniversary of such date, unless at least sixty (60) days prior to such Expiration Date, or prior to any anniversary of such date, we notify you in writing by registered mail or courier that we elect not to so extend this Letter of Credit.

 

Upon receipt by you of our notice of election not to extend this Letter of Credit, you may draw hereunder by your sight draft(s) drawn on us and bearing the clause “Drawn under Credit No.           .”

 

This Letter of Credit sets forth in full the terms of the Administrative Agent’s undertaking and of each Lender’s undertaking.  Such undertaking shall not in any way be modified, amended or amplified by reference to any document or instrument referred to herein or in which this Letter of Credit is referred to or to which this Letter of Credit relates and any such reference shall not be deemed to incorporate herein by reference any document or instrument.

 

All bank charges and commissions incurred in this transaction are for the applicant’s account.

 

D-3

 

We hereby agree with you that drafts drawn under and in compliance with the terms of this Letter of Credit will be duly honored upon presentation to the drawee.  The obligation of the Administrative Agent and of each Lender under this Letter of Credit is the individual obligation of the Administrative Agent and each Lender, respectively, and is in no way contingent upon reimbursement with respect thereto.

 

Except as otherwise expressly stated herein, this Letter of Credit is subject to and governed by the Laws of the State of New York and the 2007 revision of the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce (Publication 600) and, in the event of any conflict, the Laws of the State of New York will control.  If this Letter of Credit expires during an interruption of business as described in Article 36 of said I.C.C. publication, we agree to effect payment if this Letter of Credit is drawn against within 30 days after the resumption of business.

 

	
Signature
    	
Title
    
	
 
    	
 
    
	
Wells Fargo Bank,   National Association
    	
 
    
	
as Administrative Agent   and attorney-in fact for
    	
 
    
	
the Lenders set forth   in Schedule 1
    	
 
    
	
to this Syndicated   Letter of Credit
    	
 
    

 

D-4

 

SCHEDULE 1

 

	
LENDER
    	
 
    	
PERCENTAGE OBLIGATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

D-5

 

EXHIBIT E

 

FORM OF NOTICE OF CONVERSION/CONTINUATION

 

E-1

 

NOTICE OF CONVERSION/CONTINUATION

 

Dated as of:                           

 

Wells Fargo Bank, National Association,

as Administrative Agent

MAC D 1109-019

1525 West W.T. Harris Blvd.

Charlotte, North Carolina 28262

Attention:  Syndication Agency Services

 

Ladies and Gentlemen:

 

This irrevocable Notice of Conversion/Continuation (this “Notice”) is delivered to you pursuant to Section 4.2 of the Credit Agreement dated as of February 8, 2018 (as amended, restated, extended or otherwise modified from time to time, the “Credit Agreement”), by and among Sirius International Insurance Group, Ltd., Sirius International Holdings Ltd., Sirius International Group, Ltd. (the “Borrower”), the other subsidiaries of the Borrower party thereto, the lenders party thereto, and Wells Fargo Bank, National Association (“Wells Fargo”), as Administrative Agent for the Lenders, as L/C Agent and as the Fronting Bank.  Capitalized terms used herein and not defined herein shall have the meanings assigned thereto in the Credit Agreement.

 

1.                                      The Loan to which this Notice relates is a Revolving Credit Loan.

 

2.                                      This Notice is submitted for the purpose of:  (Check one and complete applicable information in accordance with the Credit Agreement.)

 

o                                    Converting all or a portion of a Base Rate Loan into a LIBOR Rate Loan

 

	
Outstanding principal   balance:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
Principal amount to be   converted:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
Requested effective   date of conversion:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Requested new Interest   Period:
    	
 
    	
 
    

 

o                                    Converting all or a portion of a LIBOR Rate Loan into a Base Rate Loan

 

	
Outstanding principal balance:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
Principal amount to be   converted:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
Last day of the current   Interest Period:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Requested effective   date of conversion:
    	
 
    	
 
    

 

E-2

 

o                                    Continuing all or a portion of a LIBOR Rate Loan as a LIBOR Rate Loan

 

	
Outstanding principal   balance:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
Principal amount to be   continued:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
Last day of the current   Interest Period:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Requested effective   date of continuation:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Requested new Interest   Period:
    	
 
    	
 
    

 

[Signature Page Follows]

 

E-3

 

IN WITNESS WHEREOF, the undersigned has executed this Notice of Conversion/Continuation as of the day and year first written above.

 

	
 
    	
SIRIUS INTERNATIONAL GROUP, LTD.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

E-4

 

EXHIBIT F

 

FORM OF OFFICER’S COMPLIANCE CERTIFICATE

 

F-1

 

OFFICER’S COMPLIANCE CERTIFICATE

 

Dated as of:                        

 

THIS CERTIFICATE is delivered pursuant to the Credit Agreement dated as of February 8, 2018 (as amended, restated, supplemented and otherwise modified from time to time and in effect on the date hereof, the “Credit Agreement”), by and among Sirius International Insurance Group, Ltd., Sirius International Group, Ltd. (the “Borrower”), the other subsidiaries of the Borrower party thereto, the lenders party thereto, and Wells Fargo Bank, National Association (“Wells Fargo”), as Administrative Agent for the Lenders, as L/C Agent and as the Fronting Bank.  Capitalized terms used herein without definition shall have the meanings given to such terms in the Credit Agreement.

 

The undersigned hereby certifies that:

 

1.                                      [He][She] is a duly elected                 of the Borrower.(3)

 

2.                                      Accompanying this Certificate are copies of the financial statements as of             , and for the [quarter] [year] then ended, required to be delivered under Section[7.1(b)][7.1(d)] of the Credit Agreement.  Such financial statements have been prepared in accordance with the requirements of Section [7.1(b)][7.1(d)].

 

3.                                      The undersigned has reviewed the terms of the Credit Agreement and has made, or caused to be made under the supervision of the undersigned, a review in reasonable detail of the transactions and condition of the Parent and its Subsidiaries during the accounting period covered by such financial statements.

 

4.                                      The examination described in paragraph 3 above did not disclose, and the undersigned has no knowledge of the existence of, any Default or Event of Default as of the date of this Certificate[, except as set forth below]

 

[Describe here or in a separate attachment any exceptions to paragraph 4 above by listing, in reasonable detail, the nature of the Default or Event of Default and the action that the Credit Parties have taken or propose to take with respect thereto.]

 

5.                                      Attached to this Certificate as Attachment A is a covenant compliance worksheet reflecting the computation of the financial covenants set forth in Section 8.12 of the Credit Agreement as of the last day of and for the period covered by the financial statements enclosed herewith.

 

(3)  NTD:  Credit Agreement requires signature of the chief executive officer, chief financial officer, treasurer or controller of the Borrower.

 

F-2

 

IN WITNESS WHEREOF, the undersigned has executed and delivered this Certificate as of the     day of                , 20  .

 

	
 
    	
SIRIUS INTERNATIONAL   GROUP, LTD.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

F-3

 

ATTACHMENT A

 

COVENANT COMPLIANCE WORKSHEET

 

A.                                    Total Consolidated Debt to Total Consolidated Capitalization (Section 8.12(a) of the Credit Agreement)

 

Total Consolidated Debt of the Borrower and its Restricted Subsidiaries, as at any date:

 

	
(1)
    	
 
    	
All amounts that would be reflected and classified   as debt on a consolidated balance sheet of the Borrower and its Restricted   Subsidiaries prepared as of such date
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(2)
    	
 
    	
Less: Indebtedness of the type   described in clauses (d), (e), (f), (h), (i),   (j) and (k) in Section 8.1 of the Credit   Agreement (to the extent included in Line 1(a))
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(3)
    	
 
    	
Less: Conditional Common Equity
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(4)
    	
 
    	
Less: indebtedness arising   pursuant to any standby or documentary letter of credit (whether issued   pursuant to the Credit Agreement or otherwise) unless and until such letter   of credit is drawn by its beneficiary
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(5)
    	
 
    	
Less: any other amounts in respect   of Qualified Securities, other than such Qualified Securities that mature or   are mandatorily redeemable pursuant to a sinking fund obligation or otherwise   or are redeemable at the option of the holder thereof, in each case, prior to   the date that is 91 days after the Maturity Date
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(6)
    	
 
    	
Less: any amounts resulting from   any entity consolidated as a Variable Interest Entity in “ASC Topic 810 —   Consolidations”
    	
 
    	
$
    

 

	
Total Consolidated Debt   = Line (1) minus Line (2) minus Line (3) minus   Line (4) minus Line (5) minus Line (6)
    	
 
    	
$
    

 

F-4

 

Total Consolidated Capitalization of the Borrower and is Restricted Subsidiaries, as at any date:

 

	
(1)
    	
 
    	
Consolidated Net Worth of the   Borrower and its Restricted Subsidiaries, as of any date:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a)                                 All   amounts that would be included on a consolidated balance sheet of the   Borrower and its Restricted Subsidiaries under shareholders’ equity at such   date
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)                                 Plus:   Deferred Tax Liability on Safety Reserve
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(c)                                  Less:   the accumulated net unrealized investment gain (or loss) on investments,   including net unrealized foreign currency gain (or loss) on investment, less   applicable related income tax provisions (or plus applicable related income   tax benefits), in each case, as of September 30, 2017
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(d)                                 Less:   the net unrealized investment gain (or loss), including net unrealized   foreign currency gain (or loss) on investment, less applicable related income   tax provisions (or plus applicable related income tax benefit), in each case,   included in the consolidated comprehensive income (or loss) subsequent to September 30,   2017
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(e)                                  Less:   the equity in the net unrealized investment gain (or loss), less applicable   related income tax provisions (or plus applicable related income tax   benefits), in each case, from investments in unconsolidated Affiliates
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(f)                                   Less: any   non-controlling interest
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Consolidated Net Worth = Line   (a) plus Line (b) minus Line (c) minus   Line (d) minus Line (e) minus Line (f)
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(2)
    	
 
    	
Plus: Total Consolidated Debt of   the Borrower and its $Restricted Subsidiaries [calculated above]
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(3)
    	
 
    	
Plus: the amounts in respect of   Qualified Securities, Conditional Common Equity and any other
    	
 
    	
 
    

 

F-5

 

	
 
    	
 
    	
preferred equity that would be reflected on a   consolidated balance sheet of the Borrower and its Restricted Subsidiaries   prepared as of $such date (to the extent not already included in Line   (1) or Line (2))
    	
 
    	
$
    

 

	
Total   Consolidated Capitalization = Line (1) plus Line   (2) plus Line (3)
    	
 
    	
 
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total   Consolidated Debt to Total Consolidated Capitalization   = Total Consolidated Debt divided by Total Consolidated Capitalization
    	
 
    	
 
    	
 
    	
 
    	
:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Maximum Permitted Total   Consolidated Debt to Total Consolidated Capitalization
    	
 
    	
 
    	
 
    	
0.35
    	
:
    	
1.0
    

 

B.                                    Minimum Consolidated Tangible Net Worth
 (Section 8.12(b) of the Credit Agreement)

 

	
(1)
    	
 
    	
Consolidated Tangible Net Worth   of the Borrower and its Restricted Subsidiaries, as at any date:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a)
    	
Consolidated Net Worth [calculated above]
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)
    	
Less: any amount set forth on a   consolidated balance sheet of the Borrower and its Restricted Subsidiaries in   respect of intangible assets including goodwill
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Consolidated   Tangible Net Worth = Line 1(a) minus   Line 1(b)
    	
 
    	
 
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(2) Minimum   Required Consolidated Tangible Net Worth(4)
    	
 
    	
$
    	
 
    	
 
    

 

(4)  The Minimum Consolidated Tangible Net Worth shall be reset as of the last day of each Fiscal Year ending after the Closing Date to an amount equal to the greater of (x) 67.5% of Consolidated Tangible Net Worth reflected in the audited financial statements delivered pursuant to Section 7.1(a) as of such date and (y) the Minimum Consolidated Tangible Net Worth in effect prior to the last day of the immediately preceding Fiscal Year.

 

F-6

 

EXHIBIT G

 

FORM OF ASSIGNMENT AND ASSUMPTION

 

THIS ASSIGNMENT AND ASSUMPTION (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”).  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below, receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto (the “Standard Terms and Conditions”) are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any guarantees included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”).  Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

 

	
1.
    	
 
    	
Assignor:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.
    	
 
    	
Assignee:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
[and is an Affiliate/Approved Fund of [identify Lender](5)]
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
3.
    	
 
    	
Borrower:
    	
 
    	
Sirius International Group, Ltd.
    

 

4.                                      Administrative Agent:  Wells Fargo Bank, National Association, as the Administrative Agent under the Credit Agreement.

 

5.                                      Credit Agreement:  Credit Agreement, dated as of February 8, 2018, by and among the Borrower, Sirius International Insurance Group, Ltd., Sirius International Holdings Ltd., the

 

(5)  Select as applicable.

 

G-1

 

other subsidiaries of the Borrower party thereto, the lenders party thereto (the “Lenders”), and Wells Fargo Bank, National Association, as Administrative Agent, L/C Agent and Fronting Bank.

 

6.                                      Assigned Interest:

 

	
Aggregate Amount of
   Commitment/Letter
   of Credit Exposure
   for all Lenders(6)
    	
 
    	
Amount of
   Commitment/Letter of
   Credit Exposure
   Assigned(7)
    	
 
    	
Percentage Assigned
   of Commitment/
   Letter of Credit
   Exposure(8)
    	
 
    	
CUSIP
   Number(9)
    	
 
    
	
$
    	
 
    	
$
    	
 
    	
 
    	
%
    	
 
    	
 
    
	
$
    	
 
    	
$
    	
 
    	
 
    	
%
    	
 
    	
 
    
	
$
    	
 
    	
$
    	
 
    	
 
    	
%
    	
 
    	
 
    

 

[7.                                  Trade Date:                                             ](10)

 

8.                                      Effective Date:             [TO BE INSERTED BY THE ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

 

(6)  Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.

 

(7)  Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.

 

(8)  Set forth, to at least 9 decimals, as a percentage of the Commitment/Letter of Credit Exposure of all Lenders thereunder.

 

(9)  Insert if applicable.

 

(10)  To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date.

 

G-2

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

	
 
    	
ASSIGNOR:
    
	
 
    	
 
    
	
 
    	
[NAME OF ASSIGNOR]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ASSIGNEE:
    
	
 
    	
 
    
	
 
    	
[NAME OF ASSIGNEE]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

Consented to and Accepted:

 

	
WELLS FARGO BANK, NATIONAL   ASSOCIATION,
    	
 
    
	
as Administrative   Agent, Fronting Bank and Swingline Lender
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    
	
[Consented to:
    	
 
    
	
 
    	
 
    
	
SIRIUS INTERNATIONAL   GROUP, LTD.
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
](11)
    	
 
    
				

 

(11)  To be added only if the consent of the Borrower is required by the terms of the Credit Agreement.

 

G-3

 

ANNEX 1 to Assignment and Assumption

 

Credit Agreement, dated as of February 8, 2018, by and among the Borrower, Sirius International Insurance Group, Ltd., Sirius International Holdings Ltd., the other subsidiaries of the Borrower party thereto, the lenders party thereto, and Wells Fargo Bank, National Association, as Administrative Agent, L/C Agent and Fronting Bank.

 

STANDARD TERMS AND CONDITIONS FOR
 ASSIGNMENT AND ASSUMPTION

 

1.                                      Representations and Warranties.

 

1.1                               Assignor.  The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and (iv) it is not a Defaulting Lender; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Credit Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Documents or any collateral thereunder, (iii) the financial condition of the Company, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Credit Document or (iv) the performance or observance by the Company, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Credit Document.

 

1.2.                            Assignee.  The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement (subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 7.1 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Documents, and (ii) it will perform in accordance with their terms all of the obligations that by the terms of the Credit Documents are required to be performed by it as a Lender.

 

G-4

 

2.                                      Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts that have accrued to but excluding the Effective Date and to the Assignee for amounts that have accrued from and after the Effective Date.

 

3.                                      General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the laws of the State of New York.

 

G-5

 

EXHIBIT H-1

 

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement dated as of February 8, 2018 (as amended, restated, extended or otherwise modified from time to time, the “Credit Agreement”), by and among Sirius International Insurance Group, Ltd. (the “Parent”), Sirius International Group, Ltd. (the “Borrower”), Sirius International Holdings Ltd., the other subsidiaries of the Borrower party thereto (the “Account Parties,” and together with the Parent and the Borrower, the “Credit Parties”), the lenders party thereto (the “Lenders”) and Wells Fargo Bank, National Association, as agent (the “Agent”).

 

Pursuant to the provisions of Section 4.11 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Commitment in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of any Credit Party within the meaning of Section 881(c)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Credit Parties as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Agent and the Credit Parties with a certificate of its non-U.S. Person status on IRS Form W-8BEN-E.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Credit Parties and the Agent, and (2) the undersigned shall have at all times furnished the Credit Parties and the Agent, to the extent it is legally able to do so, with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	
 
    	
[NAME OF LENDER]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
Date:              , 20  
    

 

H-1-1

 

EXHIBIT H-2

 

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement dated as of February 8, 2018 (as amended, restated, extended or otherwise modified from time to time, the “Credit Agreement”), by and among Sirius International Insurance Group, Ltd. (the “Parent”), Sirius International Group, Ltd. (the “Borrower”), Sirius International Holdings Ltd., the other subsidiaries of the Borrower party thereto (the “Account Parties,” and together with the Parent and the Borrower, the “Credit Parties”), the lenders party thereto (the “Lenders”) and Wells Fargo Bank, National Association, as agent (the “Agent”).

 

Pursuant to the provisions of Section 4.11 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of any Credit Party within the meaning of Section 881(c)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Credit Parties as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN-E.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	
 
    	
[NAME OF PARTICIPANT]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
Date:              , 20  
    

 

H-2-1

 

EXHIBIT H-3

 

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement dated as of February 8, 2018 (as amended, restated, extended or otherwise modified from time to time, the “Credit Agreement”), by and among Sirius International Insurance Group, Ltd. (the “Parent”), Sirius International Group, Ltd. (the “Borrower”), Sirius International Holdings Ltd., the other subsidiaries of the Borrower party thereto (the “Account Parties,” and together with the Parent and the Borrower, the “Credit Parties”), the lenders party thereto (the “Lenders”) and Wells Fargo Bank, National Association, as agent (the “Agent”).

 

Pursuant to the provisions of Section 4.11 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of any Credit Party within the meaning of Section 881(c)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Credit Parties as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption:  (i) an IRS Form W-8BEN or IRS Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	
 
    	
[NAME OF PARTICIPANT]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
Date:              , 20  
    

 

H-3-1

 

EXHIBIT H-4

 

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement dated as of February 8, 2018 (as amended, restated, extended or otherwise modified from time to time, the “Credit Agreement”), by and among Sirius International Insurance Group, Ltd. (the “Parent”), Sirius International Group, Ltd. (the “Borrower”), Sirius International Holdings Ltd., the other subsidiaries of the Borrower party thereto (the “Account Parties,” and together with the Parent and the Borrower, the “Credit Parties”), the lenders party thereto (the “Lenders”) and Wells Fargo Bank, National Association, as agent (the “Agent”).

 

Pursuant to the provisions of Section 4.11 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Commitment in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Commitment, (iii) with respect to the extension of credit pursuant to the Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of any Credit Party within the meaning of Section 881(c)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Credit Parties as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Agent and the Account Party with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption:  (i) an IRS Form W-8BEN or IRS Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Credit Parties and the Agent, and (2) the undersigned shall have at all times furnished the Credit Parties and the Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	
 
    	
[NAME OF LENDER]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
Date:              , 20  
    

 

H-4-1

 

EXHIBIT I

 

FORM OF FRONTING AGREEMENT

 

                    , 20          

 

[Name of Fronting Lender]

[Address]

 

Ladies and Gentlemen:

 

Reference is made to the Credit Agreement dated as of February 8, 2018 (as amended, restated, extended or otherwise modified from time to time, the “Credit Agreement”), by and among Sirius International Insurance Group, Ltd., Sirius International Holdings Ltd., Sirius International Group, Ltd. (the “Borrower”), the other subsidiaries of the Borrower party thereto, the lenders party thereto, and Wells Fargo Bank, National Association (“Wells Fargo”), as Administrative Agent for the Lenders, as L/C Agent and as the Fronting Bank.  Capitalized terms used but not otherwise defined herein have the same meaning as in the Credit Agreement.

 

The undersigned (the “Non-NAIC Qualified Lender”) is an Issuing Lender under the Credit Agreement in respect of Syndicated Letters of Credit but is not on the date hereof a bank listed on the “NAIC List of Qualified U.S. Financial Institutions” maintained by the securities valuation office of the NAIC as issuers of letters of credit for which reinsurance reserve credit can be given.  Accordingly, the Non-NAIC Qualified Lender hereby requests that you be a Non-NAIC Fronting Bank with respect to the Non-NAIC Qualified Lender for the purposes of the Credit Agreement and each Syndicated Letter of Credit that is issued thereunder.

 

The Non-NAIC Fronting Bank hereby undertakes that it will from time to time on any Business Day during the Availability Period issue the Non-NAIC Qualified Lender’s Commitment Percentage of any Syndicated Letter of Credit, and the Non-NAIC Qualified Lender hereby agrees to purchase participations in the obligations of the Non-NAIC Fronting Bank in such capacity in the amount of Non-NAIC Qualified Lender’s Commitment Percentage of each such Syndicated Letter of Credit on the terms and conditions set forth in the Credit Agreement which are incorporated by reference herein.  Notwithstanding the foregoing, the Non-NAIC Fronting Bank’s aggregate liability under all Syndicated Letters of Credit issued for the Non-NAIC Qualified Lender pursuant to this Agreement at any one time shall be limited to an amount equal to the Non-NAIC Qualified Lender’s Commitment under the Credit Agreement in effect on the date hereof (an amount equal to $       ), as such amount may be increased after the date hereof with your prior written consent.

 

In consideration of the foregoing, the Non-NAIC Qualified Lender agrees that if the Non-NAIC Fronting Bank makes any L/C Disbursement in respect of the Non-NAIC Qualified Lender’s Commitment Percentage of any Syndicated

 

Letter of Credit and the applicable Account Party fails to reimburse the Non-NAIC Fronting Bank for such L/C Disbursement as required by the Credit Agreement, the Non-NAIC Qualified Lender shall reimburse the Non-NAIC Fronting Bank pursuant to Section 3.2(d) of the Credit Agreement by paying to the Non-NAIC Fronting Bank an amount equal to the amount of

 

I-1

 

such L/C Disbursement made by the Non-NAIC Fronting Bank, such payment to be made not later than 2:00 p.m., Charlotte, North Carolina time, on (i) the Business Day that the Non-NAIC Qualified Lender receives notice of such L/C Disbursement, if such notice is received prior to 12:00 Noon, Charlotte, North Carolina time, or (ii) the Business Day immediately following the day that the Non-NAIC Qualified Lender receives such notice, if such notice is not received prior to such time.  The Non-NAIC Qualified Lender’s obligation to reimburse the Non-NAIC Fronting Bank as provided in the foregoing sentence shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this letter agreement under any and all circumstances whatsoever, and irrespective of any event or circumstance of the type described in Section 3.4 of the Credit Agreement (or of any analogous event or circumstance).  All payments made by the Non-NAIC Qualified Lender hereunder shall be made without setoff, counterclaim or other defense, in Dollars and in immediately available funds to the Administrative Agent, for the account of the Non-NAIC Fronting Bank.

 

If any L/C Disbursement is made by you, then, unless the Non-NAIC Qualified Lender shall reimburse the amount of such L/C Disbursement to you in full on the date such L/C Disbursement is made by you, the unpaid amount thereof shall bear interest, for each day from and including the date such L/C Disbursement is made to but excluding the date of reimbursement, at the rate per annum equal to (i) the Federal Funds Rate to but excluding the date three Business Days after such L/C Disbursement and (ii) from and including the date three Business Days after such L/C Disbursement, 2% plus the Federal Funds Rate.

 

As consideration for the agreement of the Non-NAIC Fronting Bank hereunder, the Non-NAIC Qualified Lender and the Borrower hereby authorizes the Administrative Agent to (i) prior to the distribution by the Administrative Agent of the Letter of Credit Fees otherwise payable to the Non-NAIC Qualified Lender pursuant to Section 3.9 of the Credit Agreement, deduct from such Letter of Credit Fees an amount equal to       (such amount, the “Fronting Fee”), and (ii) pay such Fronting Fee (by deducting such Fronting Fee from the Letter of Credit Fees otherwise payable to the Non-NAIC Qualified Lender under the Credit Agreement) to the Non-NAIC Fronting Bank quarterly in arrears on the last Business Day of each calendar quarter until all Syndicated Letters of Credit of which the Non-NAIC Fronting Bank has fronted for the Non-NAIC Qualified Lender have been returned, canceled or terminated.  All payments made by the Non-NAIC Qualified Lender hereunder shall be made without setoff, counterclaim or other defense, in Dollars and in immediately available funds to the Administrative Agent, for the account of the Non-NAIC Fronting Bank.

 

This letter agreement shall be governed by and construed in accordance with the law of the State of New York.

 

[Signatures are on the next page.]

 

I-2

 

Please indicate your acceptance of the foregoing terms and conditions by signing the three enclosed copies of this letter agreement and returning (a) one such signed copy to the Non-NAIC Qualified Lender at the address indicated below, (b) one such signed copy to the Administrative Agent at Wells Fargo Bank, National Association, 1525 West W.T. Harris Blvd., Mailcode D1109-019, Charlotte, North Carolina 28262, Attention:  Syndication Agency Services, Telephone:  (704) 590 2706, Facsimile:  (704) 590 2790, and (c) one such signed copy to the Borrower.

 

	
[NAME OF NON-NAIC   QUALIFIED LENDER]
    	
 
    
	
 
    	
 
    
	
By
    	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
Address:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
AGREED AS AFORESAID:
    	
 
    
	
[NAME OF NON-NAIC   FRONTING LENDER]
    	
 
    
	
 
    	
 
    
	
By
    	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

I-3

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