UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): July 6, 2006 -------------------------------- QUANTA CAPITAL HOLDINGS LTD. (Exact name of registrant as specified in its charter) -------------------------------- Commission File Number: 000-50885 BERMUDA N/A (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1 Victoria Street, Fourth Floor Hamilton HM11 Bermuda (Address of principal executive offices and zip code) 441-294-6350 (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. On July 6, 2006, Quanta Capital Holdings Ltd. (the "Company") and certain designated subsidiaries of the Company entered into a First Amendment and Waiver to Credit Agreement (the "First Amendment") with a syndicate of lenders and JPMorgan Chase Bank, N.A., as the Administrative Agent, and the lenders named therein (the "Lenders"), providing for certain amendments and waivers with respect to the Company's Credit Agreement dated as of July 13, 2004 and amended and restated as of July 11, 2005 (the "Credit Agreement"). The First Amendment allows the Company and the designated subsidiaries of the Company, from the date of execution until August 11, 2006 (the "Waiver Period"), to issue new letters of credit and increase the face amount of existing letters of credit up to an aggregate amount of $7,500,000 upon the delivery of additional collateral having a borrowing base value equal to the amount of each such increase or new letter of credit. During the Waiver Period, the Lenders have also waived the requirement that the Company maintain a credit rating from A.M. Best and any default or event of default arising therefrom. During the Waiver Period, the First Amendment also prohibits any release of any collateral without the prior written consent of the Lenders. In addition, the First Amendment reduces the total commitment under the credit facility from $250,000,000 to $225,000,000 and removes Quanta Specialty Lines Insurance Company as a designated subsidiary borrower. Quanta Specialty Lines Insurance Company did not have any outstanding letters of credit under the Credit Agreement. At the end of the Waiver Period, unless the Company enters into another waiver or amendment with the Lenders, the Company will be in default under the Credit Agreement. During the continuance of such default, the Company will be, among other things, prohibited from paying any dividends to its shareholders, including the holders of its series A preferred shares. The Lenders may require the Company to cash collateralize a portion or all of the outstanding letters of credit issued under the Credit Facility, which may be accomplished through the substitution or liquidation of collateral. Additionally, the Lenders will also have the right, among other things, to cancel outstanding letters of credit issued under the Credit Agreement, and the Company will likely continue to be limited in releasing collateral without the Lenders' consent. The Company will continue to work diligently with the Lenders with respect to the Credit Agreement and First Amendment. A copy of the First Amendment is attached to this Current Report on Form 8-K as Exhibit 1.1 and is incorporated herein by reference. The foregoing description of the First Amendment is a summary description and does not purport to be a complete statement of the parties' rights and obligations under the First Amendment and the transactions contemplated therein, and is qualified in its entirety by reference to the attached copy of the agreement. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (d) Exhibits Exhibit Number Description ------- ----------- 1.1 First Amendment and Waiver to Credit Agreement, dated as of June 27, 2006, between Quanta Capital Holdings Ltd., various designated subsidiary borrowers, the lenders party thereto, BNP Paribas, Calyon, New York Branch, Comerica Bank, and Deutsche Bank AG New York Branch, as Co-Documentation Agents, and JPMorgan Chase Bank, N.A., as Administrative Agent. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. QUANTA CAPITAL HOLDINGS LTD. Date: July 6, 2006 /s/ Robert Lippincott III ----------------------------------- Robert Lippincott III Interim Chief Executive Officer INDEX TO EXHIBITS Exhibit Number Description ------ ----------- 1.1 First Amendment and Waiver to Credit Agreement, dated as of June 27, 2006, between Quanta Capital Holdings Ltd., various designated subsidiary borrowers, the lenders party thereto, BNP Paribas, Calyon, New York Branch, Comerica Bank, and Deutsche Bank AG New York Branch, as Co-Documentation Agents, and JPMorgan Chase Bank, N.A., as Administrative Agent.