[Conformed Copy]
$800,000,000
AMENDED AND RESTATED 364-DAY
CREDIT AGREEMENT
Dated as of May 8, 2000
Among
ACE LIMITED
ACE BERMUDA INSURANCE LTD.
TEMPEST REINSURANCE COMPANY LIMITED
ACE INA HOLDINGS INC.
ACE GUARANTY RE INC.
as Borrowers
and
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders
and
BANK OF AMERICA, N.A.
THE CHASE MANHATTAN BANK
Co-Syndication Agents
and
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK
as Administrative Agent
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
Lead Arranger
ii
T A B L E O F C O N T E N T S
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms..........................................i
SECTION 1.02. Computation of Time Periods; Other Definitional Provisions....18
SECTION 1.03. Accounting Terms and Determinations...........................18
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Committed Advances........................................19
SECTION 2.02. Making the Committed Advances.................................19
SECTION 2.03. The Competitive Bid Advances..................................21
SECTION 2.04. Repayment of Committed Advances...............................25
SECTION 2.05. Termination or Reduction of the WC Commitments................25
SECTION 2.06. Prepayments...................................................25
SECTION 2.07. Interest......................................................25
SECTION 2.08. Fees..........................................................27
SECTION 2.09. Conversion of Advances........................................27
SECTION 2.10. Increased Costs, Etc..........................................28
SECTION 2.11. Payments and Computations.....................................30
SECTION 2.12. Taxes.........................................................31
SECTION 2.13. Sharing of Payments, Etc......................................33
SECTION 2.14. Use of Proceeds...............................................34
SECTION 2.15. Defaulting Lenders............................................34
SECTION 2.16. Replacement of Affected Lender................................36
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effectiveness.........................36
SECTION 3.02. Conditions Precedent to Each Committed Borrowing..............39
SECTION 3.03. Conditions Precedent to Each Competitive Bid Borrowing........39
SECTION 3.04. Conditions Precedent for ACE Guaranty.........................40
iii
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrowers...............40
ARTICLE V
COVENANTS OF THE BORROWERS
SECTION 5.01. Affirmative Covenants.........................................45
SECTION 5.02. Negative Covenants............................................46
SECTION 5.03. Reporting Requirements........................................50
SECTION 5.04. Financial Covenants...........................................52
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default.............................................53
ARTICLE VII
THE GUARANTY
SECTION 7.01. The Guaranty..................................................56
SECTION 7.02. Guaranty Unconditional........................................56
SECTION 7.03. Discharge Only upon Payment in Full; Reinstatement in Certain
Circumstances..............................................57
SECTION 7.04. Waiver by the Guarantors......................................57
SECTION 7.05. Subrogation...................................................57
SECTION 7.06. Stay of Acceleration..........................................58
SECTION 7.07. Continuing Guaranty; Assignments..............................58
ARTICLE VIII
THE AGENTS
SECTION 8.01. Authorization and Action......................................59
SECTION 8.02. Agents' Reliance, Etc.........................................59
iv
Page
SECTION 8.03. MGT and Affiliates............................................59
SECTION 8.04. Lender Credit Decision........................................60
SECTION 8.05. Indemnification...............................................60
SECTION 8.06. Successor Agents..............................................60
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc...............................................61
SECTION 9.02. Notices, Etc..................................................62
SECTION 9.03. No Waiver; Remedies...........................................62
SECTION 9.04. Costs and Expenses............................................62
SECTION 9.05. Right of Set-off..............................................64
SECTION 9.06. Successors; Participations and Assignments....................64
SECTION 9.07. Designated Lenders............................................66
SECTION 9.08. Execution in Counterparts.....................................67
SECTION 9.09. Confidentiality...............................................67
SECTION 9.10. Jurisdiction, Etc.............................................67
SECTION 9.11. Governing Law.................................................67
SECTION 9.12. Waiver of Jury Trial..........................................67
SECTION 9.13. Nature of Borrowers' Obligations..............................68
SCHEDULES
Pricing Schedule
Commitment Schedule
Schedule 4.01(b) - Subsidiaries
Schedule 5.02(a) - Liens
EXHIBITS
Exhibit A-1 - Form of Committed Note
Exhibit A-2 - Form of Competitive Bid Note
Exhibit B-1 - Form of Notice of Committed Borrowing
Exhibit B-2 - Form of Notice of Competitive Bid Borrowing
Exhibit C - Form of Assignment and Assumption Agreement
Exhibit D-1 - Form of Opinion of Cayman Islands Counsel to the Parent
Exhibit D-2 - Form of Opinion of New York Counsel to the Loan Parties
Exhibit D-3 - Form of Opinion of Bermuda Counsel to the Ace Bermuda
and Tempest
Exhibit D-4 - Form of Opinion of Maryland Counsel to ACE Guaranty Re Inc.
Exhibit E - Form of Designation Agreement
Exhibit F - Form of Extension Agreement
i
AMENDED AND RESTATED 364-DAY
CREDIT AGREEMENT
AMENDED AND RESTATED 364-DAY AGREEMENT dated as of May 8,
2000 among ACE Limited, a Cayman Islands company (the "Parent"), ACE
Bermuda Insurance Ltd. ("ACE Bermuda"), Tempest Reinsurance Company Limited
("Tempest"), ACE INA Holdings Inc. ("ACE INA") and ACE Guaranty Re Inc.
("ACE Guaranty") (Ace Bermuda, Tempest, ACE INA and ACE Guaranty, together
with the Parent, the "Borrowers"), the banks, financial institutions and
other institutional lenders listed on the signature pages hereof as the
Initial Lenders (the "Initial Lenders"), Bank of America, N.A. and The
Chase Manhattan Bank, as co-syndication agents (together with any successor
co-syndication agents appointed pursuant to Article VIII, the
"Co-Syndication Agents"), and ▇▇▇▇▇▇ Guaranty Trust Company of New York
("MGT"), as administrative agent (together with any successor
administrative agent appointed pursuant to Article VIII, the
"Administrative Agent" and, together with the Co-Syndication Agents, the
"Agents") for the Lenders (as hereinafter defined).
PRELIMINARY STATEMENTS:
Certain of the parties hereto have heretofore entered
into a Credit Agreement dated as of June 11, 1999 pursuant to which the
Lenders (as defined therein) have made available to the Borrowers (as
defined therein) a credit facility in an amount up to $750,000,000 (as
heretofore amended, the "Existing Agreement"). The parties hereto desire to
extend such credit facility for an additional period of less than one year,
to make the other changes reflected in this Amended Agreement and to amend
and restate the Existing Agreement to read in its entirety as set forth in
this Amended Agreement.
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants and agreements contained herein, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"ACE Bermuda" has the meaning specified in the recital of
parties to this Amended Agreement.
"ACE Guaranty" has the meaning specified in the recital
of parties to this Amended Agreement.
2
"ACE INA" has the meaning specified in the recital of
parties to this Amended Agreement.
"Adjusted Consolidated Debt" means, at any time, an
amount equal to (i) the then outstanding Consolidated Debt of the
Parent and its Subsidiaries plus (ii) to the extent exceeding an
amount equal to 15% of Total Capitalization, the then issued and
outstanding amount of Preferred Securities (other than any
Mandatorily Convertible Securities).
"Administrative Agent" has the meaning specified in the
recital of parties to this Amended Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with
▇▇▇▇▇▇ Guaranty Trust Company of New York, at its office at ▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Account No. 999 99 090,
Attention: ▇▇▇▇ ▇▇▇▇, or such other account as the Administrative
Agent shall specify in writing to the Lenders.
"Administrative Questionnaire" means, with respect to
each Lender, an administrative questionnaire in the form prepared
by the Administrative Agent, completed by such Lender and returned
to the Administrative Agent (with a copy to the Borrowers).
"Advance" means a Committed Advance or a Competitive Bid
Advance.
"Affected Lender" means any Lender that (i) has made, or
notified any Borrower that an event or circumstance has occurred
which may give rise to, a demand for compensation under Section
2.10(a) or (b) or Section 2.12 (but only so long as the event or
circumstance giving rise to such demand or notice is continuing),
or (ii) has notified any Borrower (which notice has not been
withdrawn) of any event or circumstance of a type described in
Section 2.10(c) or (d).
"Affiliate" means, as to any Person, any other Person
that, directly or indirectly, controls, is controlled by or is
under common control with such Person or is a director or officer
of such Person. For purposes of this definition, the term
"control" (including the terms "controlling", "controlled by" and
"under common control with") of a Person means the possession,
direct or indirect, of the power to vote 5% or more of the Voting
Interests of such Person or to direct or cause the direction of
the management and policies of such Person, whether through the
ownership of Voting Interests, by contract or otherwise.
"Agents" has the meaning specified in the recital of
parties to this Amended Agreement.
"Agreement" means the Existing Agreement, as amended by
this Amended Agreement and as the same may be further amended from
time to time.
3
"Amended Agreement" means this Amended and Restated
364-Day Credit Agreement dated as of May 8, 2000.
"Applicable Facility Fee Percentage" means, as of any
date, a percentage per annum determined by reference to the
Pricing Schedule.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance and such Lender's Eurodollar Lending Office in
the case of a Eurodollar Rate Advance and, in the case of a
Competitive Bid Advance, the office of such Lender notified by
such Lender to the Administrative Agent as its Applicable Lending
Office with respect to such Competitive Bid Advance.
"Applicable Margin" means, as of any date, a percentage
per annum determined by reference to the Pricing Schedule.
"Approved Investment" means any Investment that was made
by the Parent or any of its Subsidiaries pursuant to investment
guidelines set forth by the board of directors of the Parent which
are consistent with past practices.
"Assignee" has the meaning specified in Section 9.06(c).
"Bankruptcy Law" means any proceeding of the type
referred to in Section 6.01(f) or Title 11, U.S. Code, or any
similar foreign, federal or state law for the relief of debtors.
"Base Rate" means a fluctuating interest rate per annum
in effect from time to time, which rate per annum shall at all
times be equal to the higher of:
(a) the rate of interest announced publicly by MGT
in New York, New York, from time to time, as MGT's prime
rate; and
(b) 1/2 of 1% per annum above the Federal Funds
Rate.
"Base Rate Advance" means an Advance that bears interest
as provided in Section 2.07(a)(i).
"Borrowers" has the meaning specified in the recital of
parties to this Amended Agreement.
"Borrowers' Account" means the account of one or more
Borrowers maintained by such Borrower(s) with The Bank of Bermuda
Limited at its office at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇
Account No.▇▇▇▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, or such other
account as the Parent shall specify in writing to the
Administrative Agent or such other account as the Borrowers (or
any one of them) shall specify in writing to the Administrative
Agent.
4
"Borrowing" means a Committed Borrowing or a Competitive Bid
Borrowing.
"Business Day" means a day of the year on which banks are
not required or authorized by law to close in New York City and,
if the applicable Business Day relates to any Eurodollar Rate
Advances or LIBO Rate Advances, on which dealings are carried on
in the London interbank market.
"Capitalized Leases" means all leases that have been or
should be, in accordance with GAAP, recorded as capitalized
leases.
"Change of Control" means the occurrence of any of the
following: (a) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934), directly or indirectly, of
Voting Interests of the Parent (or other securities convertible
into such Voting Interests) representing 30% or more of the
combined voting power of all Voting Interests of the Parent; or
(b) a majority of the board of directors of the Parent shall not
be Continuing Members; or (c) any Person or two or more Persons
acting in concert shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that results in
its or their acquisition of the power to exercise, directly or
indirectly, a controlling influence over the management or
policies of the Parent.
"Commitment" means a WC Commitment.
"Commitment Schedule" means the Schedule hereto
denominated as such.
"Committed Advance" has the meaning specified in Section
2.01(a).
"Committed Borrowing" means a borrowing consisting of
simultaneous Committed Advances of the same Type made by the
Lenders to the same Borrower.
"Committed Facility" means, at any time, the aggregate
amount of the Lenders' WC Commitments at such time.
"Committed Note" means a promissory note of any Borrower
payable to the order of any Lender, in substantially the form of
Exhibit A-1 hereto, evidencing the aggregate indebtedness of such
Borrower to such Lender resulting from the Committed Advances made
by such Lender, as amended.
"Competitive Bid Advance" means an advance by a Lender to
any Borrower as part of a Competitive Bid Borrowing resulting from
the competitive bidding procedure described in Section 2.03 and
refers to a Fixed Rate Advance or a LIBO Rate Advance.
"Competitive Bid Borrowing" means a borrowing consisting
of simultaneous Competitive Bid Advances from each of the Lenders
whose offer to make one or more Competitive Bid Advances as part
of such borrowing has been accepted under the competitive bidding
procedure described in Section 2.03.
5
"Competitive Bid Note" means a promissory note of any
Borrower payable to the order of any Lender, in substantially the
form of Exhibit A-2 hereto, evidencing the indebtedness of such
Borrower to such Lender resulting from Competitive Bid Advances
made by such Lender.
"Confidential Information" means information that any
Loan Party furnishes to any Agent or any Lender, but does not
include any such information that is or becomes generally
available to the public other than as a result of a breach by such
Agent or any Lender of its obligations hereunder or that is or
becomes available to such Agent or such Lender from a source other
than the Loan Parties that is not, to the best of such Agent's or
such Lender's knowledge, acting in violation of a confidentiality
agreement with a Loan Party.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Consolidated Net Income" means, for any period, the net
income of the Parent and its Consolidated Subsidiaries, determined
on a Consolidated basis for such period.
"Consolidated Net Worth" means at any date the
Consolidated stockholders' equity of the Parent and its
Consolidated Subsidiaries determined as of such date, provided
that such determination for purposes of Section 5.04 shall be made
without giving effect to adjustments pursuant to Statement No. 115
of the Financial Accounting Standards Board of the United States
of America.
"Contingent Obligation" means, with respect to any
Person, any obligation or arrangement of such Person to guarantee
or intended to guarantee any Debt, leases, dividends or other
payment obligations ("primary obligations") of any other Person
(the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, (a) the direct or
indirect guarantee, endorsement (other than for collection or
deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of
the obligation of a primary obligor, (b) the obligation to make
take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement or
(c) any obligation of such Person, whether or not contingent, (i)
to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance
or supply funds (A) for the purchase or payment of any such
primary obligation or (B) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor, (iii) to purchase
property, assets, securities or services primarily for the purpose
of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof;
provided, however, that Contingent Obligations shall not include
any obligations of any such Person arising under insurance
contracts entered into in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made
(or, if less, the maximum amount of such primary obligation for
which such Person may be liable pursuant to the terms of the
instrument
6
evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform
thereunder), as determined by such Person in good faith.
"Continuing Member" means a member of the Board of
Directors of the Parent who either (i) was a member of the
Parent's Board of Directors on the date of execution and delivery
of this Agreement by the Parent and has been such continuously
thereafter or (ii) became a member of such Board of Directors
after such date and whose election or nomination for election was
approved by a vote of the majority of the Continuing Members then
members of the Parent's Board of Directors.
"Conversion", "Convert" and "Converted" each refer to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.09 or 2.10.
"Co-Syndication Agents" has the meaning specified in the
recital of parties to this Amended Agreement.
"Debenture" means debt securities issued by ACE INA or
the Parent to a Special Purpose Trust in exchange for proceeds of
Preferred Securities and common securities of such Special Purpose
Trust.
"Debt" of any Person means, without duplication for
purposes of calculating financial ratios, (a) all indebtedness of
such Person for borrowed money, (b) all obligations of such Person
for the deferred purchase price of property or services (other
than trade payables incurred in the ordinary course of such
Person's business), (c) all obligations of such Person evidenced
by notes, bonds, debentures or other similar instruments, (d) all
obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect
to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such property),
(e) all obligations of such Person as lessee under Capitalized
Leases (excluding imputed interest), (f) all obligations of such
Person under acceptance, letter of credit or similar facilities,
(g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any Equity
Interests (except for obligations to pay for Equity Interests
within customary settlement periods) in such Person or any other
Person or any warrants, rights or options to acquire such capital
stock (excluding payments under a contract for the forward sale of
ordinary shares of such Person issued in a public offering),
valued, in the case of Redeemable Preferred Interests, at the
greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends, (h) all Contingent Obligations
of such Person in respect of Debt (of the types described above)
of any other Person and (i) all indebtedness and other payment
obligations referred to in clauses (a) through (h) above of
another Person secured by (or for which the holder of such Debt
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, even though such Person has
not assumed or become liable for the payment of such indebtedness
or other payment obligations; provided, however, that the amount
of Debt of such Person under clause (i) above shall, if such
Person has not assumed or
7
otherwise become liable for any such Debt, be limited to the
lesser of the principal amount of such Debt or the fair market
value of all property of such Person securing such Debt; provided
further that "Debt" shall not include obligations in respect of
insurance or reinsurance contracts entered into in the ordinary
course of business; provided further that, solely for purposes of
Section 5.04 and the definitions of "Adjusted Consolidated Debt"
and "Total Capitalization", "Debt" shall not include (x) any
contingent obligations of any Person under or in connection with
acceptance, letter of credit or similar facilities or (y)
obligations of the Parent or ACE INA under any Debentures or under
any subordinated guaranty of any Preferred Securities or
obligations of a Special Purpose Trust under any Preferred
Securities.
"Default" means any Event of Default or any event that
would constitute an Event of Default but for the requirement that
notice be given or time elapse or both.
"Defaulted Advance" means, with respect to any Lender at
any time, the portion of any Advance required to be made by such
Lender to any Borrower pursuant to Section 2.01 or 2.02 at or
prior to such time that has not been made by such Lender or by the
Administrative Agent for the account of such Lender pursuant to
Section 2.02(d) as of such time.
"Defaulted Amount" means, with respect to any Lender at
any time, any amount required to be paid by such Lender to any
Agent or any other Lender hereunder or under any other Loan
Document at or prior to such time that has not been so paid as of
such time, including, without limitation, any amount required to
be paid by such Lender to (a) the Administrative Agent pursuant to
Section 2.02(d) to reimburse the Administrative Agent for the
amount of any Committed Advance made by the Administrative Agent
for the account of such Lender, (b) any other Lender pursuant to
Section 2.13 to purchase any participation in Committed Advances
owing to such other Lender and (c) any Agent pursuant to Section
8.05 to reimburse such Agent for such Lender's ratable share of
any amount required to be paid by the Lenders to such Agent as
provided therein.
"Defaulting Lender" means, at any time, any Lender that,
at such time, (a) owes a Defaulted Advance or a Defaulted Amount
or (b) shall take any action or be the subject of any action or
proceeding of a type described in Section 6.01(f).
"Designated Lender" means, with respect to any
Designating Lender, an Eligible Designee designated by it pursuant
to Section 9.07(a) as a Designated Lender for purposes of this
Agreement.
"Designating Lender" means, with respect to each
Designated Lender, the Lender that designated such Designated
Lender pursuant to Section 9.07(a).
"Domestic Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Domestic
Lending Office" in its Administrative Questionnaire or such other
office of such Lender as such Lender may from time to time specify
to any Borrower and the Administrative Agent.
8
"Effective Date" means the first date on which the
conditions set forth in Article III shall have been satisfied.
"Eligible Designee" means a special purpose entity that
(i) is organized under the laws of the United States or any state
thereof, (ii) is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its
business and (iii) issues (or the parent of which issues)
commercial paper rated at least A-1 or the equivalent thereof by
S&P or at least P-1 or the equivalent thereof by ▇▇▇▇▇'▇.
"Environmental Action" means any action, suit, demand,
demand letter, claim, notice of non-compliance or violation,
notice of liability or potential liability, investigation,
proceeding, consent order or consent agreement relating in any way
to any Environmental Law, any Environmental Permit or Hazardous
Material or arising from alleged injury or threat to health,
safety or the environment, including, without limitation, (a) by
any governmental or regulatory authority for enforcement, cleanup,
removal, response, remedial or other actions or damages and (b) by
any governmental or regulatory authority or third party for
damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"Environmental Law" means any Federal, state, local or
foreign statute, law, ordinance, rule, regulation, code, order,
writ, judgment, injunction, decree or judicial or agency
interpretation, policy or guidance relating to pollution or
protection of the environment, health, safety or natural
resources, including, without limitation, those relating to the
use, handling, transportation, treatment, storage, disposal,
release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required
under any Environmental Law.
"Equity Interests" means, with respect to any Person,
shares of capital stock of (or other ownership or profit interests
in) such Person, warrants, options or other rights for the
purchase or other acquisition from such Person of shares of
capital stock of (or other ownership or profit interests in) such
Person, securities convertible into or exchangeable for shares of
capital stock of (or other ownership or profit interests in) such
Person or warrants, rights or options for the purchase or other
acquisition from such Person of such shares (or such other
interests), and other ownership or profit interests in such Person
(including, without limitation, partnership, member or trust
interests therein), whether voting or nonvoting, and whether or
not such shares, warrants, options, rights or other interests are
authorized or otherwise existing on any date of determination.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"ERISA Affiliate" means any Person that for purposes of
Title IV of ERISA is a member of the controlled group of any Loan
Party, or under common control with any
9
Loan Party, within the meaning of Section 414 of the Internal
Revenue Code or Section 4001 of ERISA.
"Eurocurrency Liabilities" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Eurodollar
Lending Office" in its Administrative Questionnaire (or, if no
such office is specified, its Domestic Lending Office), or such
other office of such Lender as such Lender may from time to time
specify to the Parent and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Committed
Borrowing, an interest rate per annum equal to the rate per annum
(rounded upwards, if not an integral multiple of 1/32 or 1/100 of
1%, to the nearest 1/100 of 1%) appearing on Dow ▇▇▇▇▇ Markets
(Telerate) Page 3750 (or any successor page) as the London
interbank offered rate for deposits in U.S. dollars at 11:00 A.M.
(London time) two Business Days before the first day of such
Interest Period for a period equal to such Interest Period
(provided that, if for any reason such rate is not available, the
term "Eurodollar Rate" shall mean, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Committed
Borrowing, the rate per annum (rounded upwards, if not an integral
multiple of 1/32 or 1/100 of 1% to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters
Screen LIBO Page, the applicable rate shall be the arithmetic mean
of all such rates).
"Eurodollar Rate Advance" means an Advance that bears
interest as provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest
Period for all Eurodollar Rate Advances comprising part of the
same Committed Borrowing means the reserve percentage applicable
two Business Days before the first day of such Interest Period
under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of
or including Eurocurrency Liabilities (or with respect to any
other category of liabilities that includes deposits by reference
to which the interest rate on Eurodollar Rate Advances is
determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section
6.01.
"Existing Agreement" has the meaning specified in the
preliminary statements to this Amended Agreement.
10
"Existing 2,050 Million Credit Facility" means the
364-Day Credit Agreement dated as of June 11, 1999 among ACE INA,
as borrower, Parent, ACE Bermuda and Tempest, the financial
institutions listed therein, ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, as syndication agent and lead arranger, ▇▇▇▇▇▇
Guaranty Trust Company of New York, as administrative agent, and
▇.▇. ▇▇▇▇▇▇ Securities Inc., as co-arranger, as amended.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the
quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
"Fee Letter" means the fee letter dated April 12, 2000
among the Parent, the Lead Arranger and the Administrative Agent.
"Fiscal Year" means a fiscal year of the Parent and its
Consolidated Subsidiaries ending on December 31 in any calendar
year.
"Five-Year Credit Facility" means the Amended and
Restated Five-Year Credit Agreement dated as of the date of this
Amended Agreement among the Parent, ACE Bermuda, Tempest, ACE INA
and ACE Financial Services, Inc., the lenders party thereto, Bank
of America, N.A. and The Chase Manhattan Bank, as co-syndication
agents, and MGT as administrative agent, as the same may be
amended, modified or otherwise supplemented from time to time.
"Fixed Rate Advances" has the meaning specified in
Section 2.03(a)(i).
"Foreign Government Scheme or Arrangement" has the
meaning specified in Section 4.01(m)(iv).
"Foreign Plan" has the meaning specified in Section
4.01(m)(iv).
"GAAP" has the meaning specified in Section 1.03.
"Guarantor" means each of the Borrowers other than ACE
Guaranty.
"Guaranty" means the undertaking by each of the
Guarantors under Article VII.
"Hazardous Materials" means (a) petroleum or petroleum
products, by-products or breakdown products, radioactive
materials, asbestos-containing materials, polychlorinated
biphenyls and radon gas and (b) any other chemicals, materials or
11
substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental
Law.
"Hedge Agreements" means interest rate swap, cap or
collar agreements, interest rate future or option contracts,
currency swap agreements, currency future or option contracts and
other hedging agreements.
"Indemnified Party" has the meaning specified in Section
9.04(b).
"Initial Extension of Credit" means the initial Borrowing
hereunder.
"Initial Lenders" has the meaning specified in the
recital of parties to this Amended Agreement.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Committed Borrowing and each LIBO Rate
Advance comprising part of the same Competitive Bid Borrowing, the
period commencing on the date of such Eurodollar Rate Advance or
LIBO Rate Advance or the date of the Conversion of any Base Rate
Advance into such Eurodollar Rate Advance, and ending on the last
day of the period selected by the Borrower requesting such
Borrowing or Conversion pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of
the immediately preceding Interest Period and ending on the last
day of the period selected by the applicable Borrower pursuant to
the provisions below. The duration of each such Interest Period
shall be one or two weeks or one, two, three or six months, as the
Borrower requesting such Borrowing or Conversion may, upon notice
received by the Administrative Agent not later than 11:00 A.M.
(New York City time) on the third Business Day prior to the first
day of such Interest Period, select; provided, however, that:
(a) such Borrower may not select any Interest Period
with respect to any Eurodollar Rate Advance that ends after
the Termination Date;
(b) Interest Periods commencing on the same date
for Eurodollar Rate Advances comprising part of the same
Committed Borrowing or for LIBO Rate Advances comprising
part of the same Competitive Bid Borrowing shall be of
the same duration;
(c) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day,
the last day of such Interest Period shall be extended to
occur on the next succeeding Business Day, provided,
however, that, if such extension would cause the last day
of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and
(d) whenever the first day of any Interest
Period (other than a one or two week Interest Period)
occurs on a day of an initial calendar month for which
there is no numerically corresponding day in the calendar
month that succeeds
12
such initial calendar month by the number of months equal
to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of
such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code
of 1986, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"Investment" in any Person means any loan or advance to
such Person, any purchase or other acquisition of any Equity
Interests or Debt or the assets comprising a division or business
unit or a substantial part or all of the business of such Person,
any capital contribution to such Person or any other direct or
indirect investment in such Person, including, without limitation,
any acquisition by way of a merger or consolidation and any
arrangement pursuant to which the investor incurs Debt of the
types referred to in clause (h) or (i) of the definition of "Debt"
in respect of such Person; provided, however, that any purchase by
any Loan Party or any Subsidiary of any catastrophe-linked
instruments which are (x) issued for the purpose of transferring
traditional reinsurance risk to the capital markets and (y)
purchased by such Loan Party or Subsidiary in accordance with its
customary reinsurance underwriting procedures, or the entry by any
Loan Party or any Subsidiary into swap instruments relating to
such instruments in accordance with such procedures, shall be
deemed to be the entry by such Person into a reinsurance contract
and shall not be deemed to be an Investment by such Person.
"Lead Arranger" means ▇.▇. ▇▇▇▇▇▇ Securities Inc. in its
capacity as lead arranger and book runner in respect of this Amended
Agreement.
"Lender" means (i) each bank or other institution listed
on the Commitment Schedule, (ii) each Assignee which becomes a
Lender pursuant to Section 9.06(c) and (iii) their respective
successors.
"LIBO Rate" means, for any Interest Period for all LIBO
Rate Advances comprising part of the same Competitive Bid
Borrowing, an interest rate per annum equal to the rate per annum
(rounded upwards, if not an integral multiple of 1/32 or 1/100 of
1%, to the nearest 1/100 of 1%) appearing on Dow ▇▇▇▇▇ Markets
(Telerate) Page 3750 (or any successor page) as the London
interbank offered rate for deposits in U.S. dollars at 11:00 A.M.
(London time) two Business Days before the first day of such
Interest Period for a period equal to such Interest Period
(provided that, if for any reason such rate is not available, the
term "LIBO Rate" shall mean for any Interest Period for all LIBO
Rate Advances comprising part of the same Competitive Bid
Borrowing, the rate per annum (rounded upwards, if not an integral
multiple of 1/32 or 1/100 of 1%, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters
Screen LIBO Page, the applicable rate shall be the arithmetic mean
of all such rates).
"LIBO Rate Advances" has the meaning specified in Section
2.03(a)(i).
13
"Lien" means any lien, security interest or other charge
or encumbrance of any kind, or any other type of preferential
arrangement, including, without limitation, the lien or retained
security title of a conditional vendor and any easement, right of
way or other encumbrance on title to real property.
"Loan Documents" means (i) this Agreement, (ii) the Notes
and (iii) the Fee Letter, in each case as amended.
"Loan Parties" means the Borrowers.
"Mandatorily Convertible Preferred Securities" means
units comprised of (i) Preferred Securities or preferred shares of
Parent and (ii) a contract for the sale of ordinary shares of the
Parent (including "Feline Prides(TM)", "Rhinos(TM)" or any
substantially similar securities).
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse
change in the business, financial condition, operations or
properties of the Parent and its Subsidiaries, taken as a whole.
"Material Adverse Effect" means a material adverse effect
on (a) the business, condition, operations or properties of the
Parent and its Subsidiaries, taken as a whole, (b) the rights and
remedies of any Agent or any Lender under any Loan Document or (c)
the ability of the Loan Parties, taken as a whole, to perform
their obligations under the Loan Documents.
"Material Financial Obligation" means a principal amount
of Debt and/or payment obligations in respect of any Hedge
Agreement of the Parent and/or one or more of its Subsidiaries
arising in one or more related or unrelated transactions exceeding
in the aggregate $25,000,000.
"MGT" has the meaning specified in the recital of
parties to this Amended Agreement.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, to which any Loan Party or
any ERISA Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years
made or accrued an obligation to make contributions.
"Note" means a Committed Note or a Competitive Bid Note.
"Notice of Committed Borrowing" has the meaning specified
in Section 2.02(a).
14
"Notice of Competitive Bid Borrowing" has the meaning
specified in Section 2.03(a).
"OECD" means the Organization for Economic Cooperation
and Development.
"Other Taxes" has the meaning specified in Section 2.12(b).
"Parent" has the meaning specified in the recital of
parties to this Amended Agreement.
"Participant" has the meaning specified in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation (or
any successor).
"Pension Plan" means a "pension plan", as such term is
defined in Section 3(2) of ERISA, which is subject to title IV of
ERISA (other than any "multiemployer plan" as such term is defined
in section 4001(a)(3) of ERISA), and to which any Loan Party or
any ERISA Affiliate may have any liability, including any
liability by reason of having been a substantial employer within
the meaning of section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a
contributing sponsor under section 4069 of ERISA.
"Permitted Liens" means such of the following as to which
no enforcement, collection, execution, levy or foreclosure
proceeding shall have been commenced or which are being contested
in good faith by appropriate proceedings: (a) Liens for taxes,
assessments and governmental charges or levies not yet due and
payable; (b) Liens imposed by law, such as materialmen's,
mechanics', carriers', workmen's and repairmen's Liens and other
similar Liens arising in the ordinary course of business securing
obligations that are not overdue for a period of more than 90
days; (c) pledges or deposits to secure obligations under workers'
compensation laws or similar legislation or to secure public or
statutory obligations; and (d) easements, rights of way and other
encumbrances on title to real property that do not render title to
the property encumbered thereby unmarketable or materially
adversely affect the use of such property for its present
purposes.
"Person" means an individual, partnership, corporation
(including a business trust), limited liability company, joint
stock company, trust, unincorporated association, joint venture or
other entity, or a government or any political subdivision or
agency thereof.
"Preferred Interests" means, with respect to any Person,
Equity Interests issued by such Person that are entitled to a
preference or priority over any other Equity Interests issued by
such Person upon any distribution of such Person's property and
assets, whether by dividend or upon liquidation.
"Preferred Securities" means (i) preferred securities
issued by a Special Purpose Trust which shall provide, among other
things, that dividends shall be payable only out of
15
proceeds of interest payments on the Debentures, or (ii) other
instruments that may be treated in whole or in part as equity for
rating agency purposes while being treated as debt for tax
purposes.
"Pricing Schedule" means the Schedule hereto denominated
as such.
"Pro Rata Share" of any amount means, with respect to any
Lender at any time, the product of such amount times a fraction
the numerator of which is the amount of such Lender's WC
Commitment at such time (or, if the WC Commitments shall have been
terminated pursuant to Section 2.05 or 6.01, such Lender's WC
Commitment as in effect immediately prior to such termination) and
the denominator of which is the Committed Facility at such time
(or, if the WC Commitments shall have been terminated pursuant to
Section 2.04 or 6.01, the Committed Facility as in effect
immediately prior to such termination).
"Redeemable" means, with respect to any Equity Interest,
any Debt or any other right or obligation, any such Equity
Interest, Debt, right or obligation that (a) the issuer has
undertaken to redeem at a fixed or determinable date or dates,
whether by operation of a sinking fund or otherwise, or upon the
occurrence of a condition not solely within the control of the
issuer or (b) is redeemable at the option of the holder.
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from time to
time.
"Required Lenders" means, at any time, Lenders owed or
holding at least a majority in interest of aggregate principal
amount of the Committed Advances outstanding at such time, or, if
no such principal amount is outstanding at such time, Lenders
holding at least a majority in interest of the aggregate of the WC
Commitments; provided, however, that if any Lender shall be a
Defaulting Lender at such time, there shall be excluded from the
determination of Required Lenders at such time (A) the aggregate
principal amount of the Committed Advances owing to such Lender
(in its capacity as a Lender) and outstanding at such time and (B)
the Unused WC Commitment of such Lender at such time.
"Responsible Officer" means the Chairman, Chief Executive
Officer, President, Chief Financial Officer, Treasurer, Chief
Accounting Officer or Chief Investment Officer of the Parent.
"S&P" means Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Securitization Transaction" means any sale, assignment
or other transfer by Parent or any Subsidiary of any accounts
receivable, premium finance loan receivables, lease receivables or
other payment obligations owing to Parent or such Subsidiary or
any interest in any of the foregoing, together in each case with
any collections and other proceeds thereof, any collection or
deposit accounts related thereto, and any collateral,
16
guaranties or other property or claims in favor of Parent or such
Subsidiary supporting or securing payment by the obligor thereon
of, or otherwise related to, any such receivables.
"Significant Subsidiary" means a Subsidiary of Parent
that is a "significant subsidiary" of the Parent under Regulation
S-X promulgated by the Securities and Exchange Commission.
"Solvent" and "Solvency" mean, with respect to any Person
on a particular date, that on such date (a) the fair value of the
property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair salable value of
the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts
as they become absolute and matured, (c) such Person does not
intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay such debts and
liabilities as they mature and (d) such Person is not engaged in
business or a transaction, and is not about to engage in business
or a transaction, for which such Person's property would
constitute an 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.
"Special Purpose Trust" means a special purpose business
trust established by the Parent or ACE INA of which the Parent or
ACE INA will hold all the common securities, which will be the
issuer of Preferred Securities, and which will loan to the Parent
or ACE INA (such loan being evidenced by the Debentures) the net
proceeds of the issuance and sale of the Preferred Securities and
common securities of such Special Purchase Trust.
"Subsidiary" of any Person means any corporation,
partnership, joint venture, limited liability company, trust or
estate of which (or in which) more than 50% of (a) the issued and
outstanding capital stock having ordinary voting power to elect a
majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency), (b) the interest in
the capital or profits of such partnership, joint venture or
limited liability company or (c) the beneficial interest in such
trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its
other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Taxes" has the meaning specified in Section 2.12(a).
"Tempest" has the meaning specified in the recital of
parties to this Amended Agreement.
"Termination Date" means the earlier of May 7, 2001 and
the date of termination in whole of the WC Commitments or such
later date to which the Termination Date shall
17
have been extended pursuant to Section 2.01(b) or, if such day is
not a Business Day, the next preceding Business Day.
"Total Capitalization" means, at any time, an amount
(without duplication) equal to (i) the then outstanding
Consolidated Debt of the Parent and its Subsidiaries plus (ii)
Consolidated stockholders equity of the Parent and its
Subsidiaries plus (without duplication) (iii) the then issued and
outstanding amount of Preferred Securities (including Mandatorily
Convertible Preferred Securities) and (without duplication)
Debentures.
"Type" refers to the distinction between Advances bearing
interest at the Base Rate and Advances bearing interest at the
Eurodollar Rate.
"Unused WC Commitment" means, with respect to any Lender
at any time, (a) such Lender's WC Commitment at such time minus
(b) the sum of (i) the aggregate principal amount of all Committed
Advances made by such Lender hereunder plus (ii) such Lender's Pro
Rata Share of the aggregate principal amount of all Competitive
Bid Advances hereunder.
"Voting Interests" means shares of capital stock issued
by a corporation, or equivalent Equity Interests in any other
Person, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even if the
right so to vote has been suspended by the happening of such a
contingency.
"WC Commitment" means (i) with respect to each Lender
listed on the Commitment Schedule, the amount set forth opposite
such Lender's name on the Commitment Schedule and (ii) with
respect to any Assignee which becomes a Lender pursuant to Section
9.06(c), the amount of the transferor Lender's Commitment assigned
to it pursuant to Section 9.06(c), in each case as such amount may
be changed from time to time pursuant to Section 2.05 or 9.06(c);
provided that, if the context so requires, the term "WC
Commitment" means the obligation of a Lender to extend credit up
to such amount to the Borrowers hereunder.
"Welfare Plan" means a welfare plan, as defined in
Section 3(1) of ERISA, that is maintained for employees of any
Loan Party or in respect of which any Loan Party could have
liability.
"Withdrawal Liability" has the meaning specified in Part
I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods; Other
Definitional Provisions. In this Agreement and the other Loan Documents in
the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding". References in the Loan
Documents to any agreement or contract "as amended" shall mean and be a
reference to such agreement or contract
18
as amended, amended and restated, supplemented or otherwise modified from
time to time in accordance with its terms.
SECTION 1.03. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared
in accordance with generally accepted accounting principles as in effect
from time to time ("GAAP"), applied on a basis consistent (except for
changes concurred in by the Parent's independent public accountants) with
the most recent audited consolidated financial statements of the Parent and
its Subsidiaries delivered to the Lenders; provided that, if the Parent
notifies the Administrative Agent that the Parent wishes to amend any
covenant in Article V to eliminate the effect of any change in generally
accepted accounting principles on the operation of such covenant (or if the
Administrative Agent notifies the Parent that the Required Lenders wish to
amend Article V for such purpose), then the Parent's compliance with such
covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective (and, concurrently with the
delivery of any financial statements required to be delivered hereunder,
the Parent shall provide a statement of reconciliation conforming such
financial information to such generally accepted accounting principles as
previously in effect), until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to the Parent and the Required
Lenders.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Committed Advances. (a) Each Lender
severally agrees, on the terms and conditions hereinafter set forth, to
make advances (each a "Committed Advance") to any Borrower from time to
time on any Business Day during the period from the date hereof until the
Termination Date in an amount for each such Committed Advance not to exceed
such Lender's Unused WC Commitment at such time. Each Committed Borrowing
shall be in an aggregate amount of $10,000,000 or an integral multiple of
$1,000,000 in excess thereof and shall consist of Committed Advances made
simultaneously by the Lenders ratably according to their WC Commitments.
Within the limits of each Lender's Unused WC Commitment in effect from time
to time, each Borrower may borrow under this Section 2.01, prepay pursuant
to Section 2.06 and reborrow under this Section 2.01.
(b) The Termination Date may be extended in the manner
set forth in this subsection (b) for a period of 364 days from the
Termination Date then in effect. If the Borrowers wish to request an
extension of the Termination Date, Parent shall give written notice to that
effect to the Administrative Agent not less than 40 nor more than 55 days
prior to the Termination Date then in effect, whereupon the Administrative
Agent shall promptly notify each of the Lenders of such request. Each
Lender will use its best efforts to respond to such request, whether
affirmatively or negatively, as it may elect in its sole discretion, within
20 days of such notice to the Administrative Agent; provided that no Lender
will be required to respond more
19
than 30 days prior to the Termination Date then in effect. If less than all
Lenders respond affirmatively to such request within such period, then the
Parent may request the Lenders that do not elect to extend the Termination
Date to assign their WC Commitments in their entirety, no later than 5 days
prior to the Termination Date then in effect, to one or more Assignees
pursuant to Section 9.06 which Assignees will agree to extend the
Termination Date. If all Lenders (including such Assignees and excluding
their respective transferor Lenders) respond affirmatively, then, subject
to receipt by the Administrative Agent of counterparts of an Extension
Agreement in substantially the form of Exhibit E hereto duly completed and
signed by all of the parties thereto, the Termination Date shall be
extended to the date specified above.
SECTION 2.02. Making the Committed Advances. (a) Except
as otherwise provided in Section 2.03, each Committed Borrowing shall be
made on notice, given not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the date of the proposed Committed Borrowing in
the case of a Committed Borrowing consisting of Eurodollar Rate Advances,
or not later than 10:30 A.M. (New York City time) on the date of the
proposed Committed Borrowing in the case of a Committed Borrowing
consisting of Base Rate Advances, by any Borrower to the Administrative
Agent, which shall give to each Lender prompt notice thereof by telecopier.
Each such notice of a Committed Borrowing (a "Notice of Committed
Borrowing") shall be by telephone, confirmed immediately in writing, or
telecopier, in substantially the form of Exhibit B-1 hereto, specifying
therein the requested (i) date of such Committed Borrowing, (ii) Type of
Advances comprising such Committed Borrowing, (iii) aggregate amount of
such Committed Borrowing and (iv) in the case of a Committed Borrowing
consisting of Eurodollar Rate Advances, initial Interest Period for such
Committed Advances. Each Lender shall, before 12:00 noon (New York City
time) on the date of such Committed Borrowing, make available for the
account of its Applicable Lending Office to the Administrative Agent at the
Administrative Agent's Account, in same day funds, such Lender's ratable
portion of such Committed Borrowing in accordance with the respective WC
Commitments of such Lender and the other Lenders. After the Administrative
Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article III, the Administrative Agent will make
such funds available to the Borrower requesting such Committed Borrowing by
crediting the applicable Borrower's Account.
(b) Anything in subsection (a) above to the contrary
notwithstanding, (i) no Borrower may select Eurodollar Rate Advances if the
obligation of the Lenders to make Eurodollar Rate Advances shall then be
suspended pursuant to Section 2.09 or 2.10 and (ii) the Committed Advances
may not be outstanding as part of more than ten (10) separate Committed
Borrowings.
(c) Each Notice of Committed Borrowing shall be
irrevocable and binding on the Borrower that requested such Committed
Borrowing. In the case of any Committed Borrowing that the related Notice
of Committed Borrowing specifies is to be comprised of Eurodollar Rate
Advances, the Borrower that requested such Committed Borrowing shall
indemnify each Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date
specified in such Notice of Committed Borrowing for such Committed
Borrowing the applicable conditions set forth in Article III, including,
without limitation, any loss (excluding loss of anticipated profits), cost
or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the
20
Committed Advance to be made by such Lender as part of such Committed
Borrowing when such Committed Advance, as a result of such failure, is not
made on such date.
(d) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Committed Borrowing that such
Lender will not make available to the Administrative Agent such Lender's
ratable portion of such Committed Borrowing, the Administrative Agent may
assume that such Lender has made such portion available to the
Administrative Agent on the date of such Committed Borrowing in accordance
with subsection (a) of this Section 2.02 and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower requesting
such Committed Borrowing on such date a corresponding amount. If and to the
extent that such Lender shall not have so made such ratable portion
available to the Administrative Agent, such Lender and such Borrower
severally agree to repay or pay to the Administrative Agent forthwith on
demand such corresponding amount and to pay interest thereon, for each day
from the date such amount is made available to such Borrower until the date
such amount is repaid or paid to the Administrative Agent, at (i) in the
case of such Borrower, the interest rate applicable at such time under
Section 2.07 to Advances comprising such Committed Borrowing and (ii) in
the case of such Lender, the Federal Funds Rate. If such Lender shall pay
to the Administrative Agent such corresponding amount, such amount so paid
shall constitute such Lender's Committed Advance as part of such Borrowing
for all purposes.
(e) The failure of any Lender to make the Committed
Advance to be made by it as part of any Committed Borrowing shall not
relieve any other Lender of its obligation, if any, hereunder to make its
Committed Advance on the date of such Committed Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the
Committed Advance to be made by such other Lender on the date of any
Committed Borrowing.
SECTION 2.03. The Competitive Bid Advances. (a) Each
Lender severally agrees that any Borrower may make Competitive Bid
Borrowings under this Section 2.03 from time to time on any Business Day
during the period from the date hereof until the date occurring 7 days
prior to the Termination Date in the manner set forth below; provided that,
following the making of each Competitive Bid Borrowing, the aggregate
amount of the Advances then outstanding shall not exceed the aggregate
amount of the WC Commitments of the Lenders.
(i) Any Borrower may request a Competitive Bid Borrowing
under this Section 2.03 by delivering to the Administrative Agent,
by telecopier, a notice of a Competitive Bid Borrowing (a "Notice
of Competitive Bid Borrowing"), in substantially the form of
Exhibit B-2 hereto, specifying therein the requested (v) date of
such proposed Competitive Bid Borrowing, (w) aggregate amount of
such proposed Competitive Bid Borrowing, (x) in the case of a
Competitive Bid Borrowing consisting of LIBO Rate Advances,
Interest Period, or in the case of a Competitive Bid Borrowing
consisting of Fixed Rate Advances, maturity date for repayment of
each Fixed Rate Advance to be made as part of such Competitive Bid
Borrowing (which maturity date may not be earlier than the date
occurring 7 days after the date of such Competitive Bid Borrowing
or later than the earlier of (I) 180 days after the date of such
Competitive Bid Borrowing and (II) the Termination Date), (y)
interest payment date or dates relating thereto, and (z) other
terms (if any) to be applicable to such Competitive Bid Borrowing,
not later
21
than 10:30 A.M. (New York City time) (A) at least one Business Day
prior to the date of the proposed Competitive Bid Borrowing, if
such Borrower shall specify in the Notice of Competitive Bid
Borrowing that the rates of interest to be offered by the Lenders
shall be fixed rates per annum (the Advances comprising any such
Competitive Bid Borrowing being referred to herein as "Fixed Rate
Advances") and (B) at least four Business Days prior to the date
of the proposed Competitive Bid Borrowing, if such Borrower shall
instead specify in the Notice of Competitive Bid Borrowing that
the rates of interest to be offered by the Lenders are to be based
on a margin above or below the LIBO Rate (the Advances comprising
such Competitive Bid Borrowing being referred to herein as "LIBO
Rate Advances"). Each Notice of Competitive Bid Borrowing shall be
irrevocable and binding on such Borrower. The Administrative Agent
shall in turn promptly notify each Lender of each request for a
Competitive Bid Borrowing received by it from such Borrower by
sending such Lender a copy of the related Notice of Competitive
Bid Borrowing.
(ii) Each Lender may, if, in its sole discretion, it
elects to do so, irrevocably offer to make one or more Competitive
Bid Advances to the Borrower requesting the Competitive Bid
Advances as part of such proposed Competitive Bid Borrowing at a
rate or rates of interest specified by such Lender in its sole
discretion, by notifying the Administrative Agent (which shall
give prompt notice thereof to the Borrower requesting the
Competitive Bid Borrowing), before 9:30 A.M. (New York City time)
on the date of such proposed Competitive Bid Borrowing, in the
case of a Competitive Bid Borrowing consisting of Fixed Rate
Advances and before 10:00 A.M. (New York City time) three Business
Days before the date of such proposed Competitive Bid Borrowing,
in the case of a Competitive Bid Borrowing consisting of LIBO Rate
Advances, of the minimum amount and maximum amount of each
Competitive Bid Advance which such Lender would be willing to make
as part of such proposed Competitive Bid Borrowing (which amounts
may, subject to the proviso to the first sentence of this Section
2.03(a), exceed such Lender's WC Commitment, if any), the rate or
rates of interest therefor and such Lender's Applicable Lending
Office with respect to such Competitive Bid Advance; provided that
if the Administrative Agent in its capacity as a Lender shall, in
its sole discretion, elect to make any such offer, it shall notify
the Borrower requesting such Competitive Bid Borrowing of such
offer at least 30 minutes before the time and on the date on which
notice of such election is to be given to the Administrative Agent
by the other Lenders. If any Lender shall elect not to make such
an offer, such Lender shall so notify the Administrative Agent,
before 10:00 A.M. (New York City time) on the date on which notice
of such election is to be given to the Administrative Agent by the
other Lenders, and such Lender shall not be obligated to, and
shall not, make any Competitive Bid Advance as part of such
Competitive Bid Borrowing; provided that the failure by any Lender
to give such notice shall not cause such Lender to be obligated to
make any Competitive Bid Advance as part of such proposed
Competitive Bid Borrowing.
(iii) The Borrower requesting any particular Competitive
Bid Borrowing shall, in turn, before 10:30 A.M. (New York City
time) on the date of such proposed Competitive Bid Borrowing, in
the case of a Competitive Bid Borrowing consisting of Fixed Rate
Advances and before 11:00 A.M. (New York City time) three Business
Days
22
before the date of such proposed Competitive Bid Borrowing, in the
case of a Competitive Bid Borrowing consisting of LIBO Rate
Advances, either:
(x) cancel such Competitive Bid Borrowing by giving
the Administrative Agent notice to that effect, or
(y) accept one or more of the offers made by any
Lender or Lenders pursuant to paragraph (ii) above, in
its sole discretion, by giving notice to the
Administrative Agent of the amount of each Competitive
Bid Advance (which amount shall be equal to or greater
than the minimum amount, and equal to or less than the
maximum amount, notified to such Borrower by the
Administrative Agent on behalf of such Lender for such
Competitive Bid Advance pursuant to paragraph (ii) above)
to be made by each such Lender as part of such
Competitive Bid Borrowing, and reject any remaining
offers made by Lenders pursuant to paragraph (ii) above
by giving the Administrative Agent notice to that effect.
The Borrower that requested such Competitive Bid
Borrowing shall accept the offers made by any Lender or
Lenders to make Competitive Bid Advances in order of the
lowest to the highest rates of interest offered by such
Lenders. If two or more Lenders have offered the same
interest rate, the amount to be borrowed at such interest
rate will be allocated among such Lenders in proportion
to the amount that each such Lender offered at such
interest rate.
(iv) If the Borrower that requested any particular
Competitive Bid Borrowing notifies the Administrative Agent that
such Competitive Bid Borrowing is canceled pursuant to paragraph
(iii)(x) above, the Administrative Agent shall give prompt notice
thereof to the Lenders and such Competitive Bid Borrowing shall
not be made.
(v) If the Borrower that requested any particular
Competitive Bid Borrowing accepts one or more of the offers made
by any Lender or Lenders pursuant to paragraph (iii)(y) above, the
Administrative Agent shall in turn promptly notify (A) each Lender
that has made an offer as described in paragraph (ii) above, of
the date and aggregate amount of such Competitive Bid Borrowing
and whether or not any offer or offers made by such Lender
pursuant to paragraph (ii) above have been accepted by such
Borrower, (B) each Lender that is to make a Competitive Bid
Advance as part of such Competitive Bid Borrowing, of the amount
of each Competitive Bid Advance to be made by such Lender as part
of such Competitive Bid Borrowing, and (C) each Lender that is to
make a Competitive Bid Advance as part of such Competitive Bid
Borrowing, upon receipt, that the Administrative Agent has
received forms of documents appearing to fulfill the applicable
conditions set forth in Article III. Each Lender that is to make a
Competitive Bid Advance as part of such Competitive Bid Borrowing
shall, before 12:00 noon (New York City time) on the date of such
Competitive Bid Borrowing specified in the notice received from
the Administrative Agent pursuant to clause (A) of the preceding
sentence or any later time when such Lender shall have received
notice from the Administrative Agent pursuant to clause (C) of the
preceding sentence, make available for the account of its
Applicable Lending Office to the Administrative Agent at the
Administrative Agent's Account, in same day funds, such Lender's
portion of such Competitive Bid Borrowing. Upon fulfillment of the
applicable conditions set forth in
23
Article III and after receipt by the Administrative Agent of such
funds, the Administrative Agent will make such funds available to
the Borrower that requested such Borrowing at the Administrative
Agent's address referred to in Section 8.02. Promptly after each
Competitive Bid Borrowing the Administrative Agent will notify
each Lender of the amount of the Competitive Bid Borrowing.
(vi) If the Borrower that requested any particular
Competitive Bid Borrowing notifies the Administrative Agent that
it accepts one or more of the offers made by any Lender or Lenders
pursuant to paragraph (iii)(y) above, such notice of acceptance
shall be irrevocable and binding on such Borrower. Such Borrower
shall indemnify each Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to fulfill on
or before the date specified in the related Notice of Competitive
Bid Borrowing for such Competitive Bid Borrowing the applicable
conditions set forth in Article III, including, without
limitation, any loss (excluding loss of anticipated profits), cost
or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Lender to fund the
Competitive Bid Advance to be made by such Lender as part of such
Competitive Bid Borrowing when such Competitive Bid Advance, as a
result of such failure, is not made on such date.
(b) Each Competitive Bid Borrowing shall be in an
aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in
excess thereof and, following the making of each Competitive Bid Borrowing,
the Borrowers shall be in compliance with the limitations set forth in the
proviso to the first sentence of subsection (a) above.
(c) Within the limits and on the conditions set forth in
this Section 2.03, any Borrower may from time to time borrow under this
Section 2.03, repay or prepay pursuant to subsection (d) below, and
reborrow under this Section 2.03, provided that a Competitive Bid Borrowing
shall not be made within three Business Days of the date of any other
Competitive Bid Borrowing.
(d) The Borrower to which any particular Competitive Bid
Borrowing is made shall repay to the Administrative Agent for the account
of each Lender that has made a Competitive Bid Advance, on the maturity
date of each Competitive Bid Advance (such maturity date being that
specified by such Borrower as the last day of the Interest Period or the
maturity date of such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above),
the then unpaid principal amount of such Competitive Bid Advance. No
Borrower shall have any right to prepay any principal amount of any
Competitive Bid Advance unless, and then only on the terms, specified by
such Borrower for such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above.
(e) The Borrower to which any particular Competitive Bid
Borrowing is made shall pay interest on the unpaid principal amount of each
Competitive Bid Advance from the date of such Competitive Bid Advance to
the date the principal amount of such Competitive Bid Advance is repaid in
full, at the rate of interest for such Competitive Bid Advance specified by
the Lender making such Competitive Bid Advance in its notice with respect
thereto delivered pursuant to subsection (a)(ii) above, payable on the
interest payment date or dates specified by
24
such Borrower for such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above.
Upon the occurrence and during the continuance of an Event of Default under
Section 6.01(a) or 6.01(f) or at the request of the Required Lenders during
the existence of any other Event of Default, such Borrower shall pay
interest on the amount of unpaid principal of and interest on each
Competitive Bid Advance owing to a Lender, payable in arrears on the date
or dates interest is payable thereon, at a rate per annum equal at all
times to 2% per annum above the rate per annum otherwise required to be
paid on such Competitive Bid Advance.
(f) The indebtedness of any Borrower resulting from any
Competitive Bid Advance made to such Borrower as part of a Competitive Bid
Borrowing shall be evidenced by the Competitive Bid Note of such Borrower
payable to the order of the Lender making such Competitive Bid Advance.
(g) Upon delivery of each Notice of Competitive Bid
Borrowing, the Borrower that requested the applicable Competitive Bid
Borrowing shall pay a non-refundable fee of $1,500 to the Administrative
Agent for its own account.
SECTION 2.04. Repayment of Committed Advances. Each
Borrower shall repay to the Administrative Agent for the ratable account of
the Lenders on the Termination Date the aggregate outstanding principal
amount of the Committed Advances then outstanding.
SECTION 2.05. Termination or Reduction of the WC
Commitments. The Parent may, upon at least three Business Days' notice to
the Administrative Agent, terminate in whole or reduce in part the unused
portion of the WC Commitments; provided, however, that each partial
reduction (i) shall be in an aggregate amount of $10,000,000 or an integral
multiple of $1,000,000 in excess thereof and (ii) shall be made ratably
among the Lenders in accordance with their WC Commitments.
SECTION 2.06. Prepayments. Each Borrower may, upon notice
given not later than 11:00 A.M. (New York City Time) on the Business Day on
which such prepayment is to be made, in the case of Base Rate Advances, or
on the third Business Day prior to the date on which such prepayment is to
be made, in the case of Eurodollar Rate Advances, in each case to the
Administrative Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given such Borrower shall,
prepay the outstanding aggregate principal amount of the Committed Advances
comprising part of the same Committed Borrowing in whole or ratably in
part, together with accrued interest to the date of such prepayment on the
aggregate principal amount prepaid; provided, however, that (x) each
partial prepayment shall be in an aggregate principal amount of $10,000,000
or an integral multiple of $1,000,000 in excess thereof and (y) if any
prepayment of a Eurodollar Rate Advance is made on a date other than the
last day of an Interest Period for such Committed Advance, such Borrower
shall also pay any amounts owing pursuant to Section 9.04(c). All
prepayments in respect of Eurodollar Rate Advances shall be made together
with accrued interest to the date of such prepayment on the principal
amount prepaid.
25
SECTION 2.07. Interest. (a) Scheduled Interest. Each
Borrower shall pay interest on the unpaid principal amount of each Advance
owing to each Lender from the date of such Advance until such principal amount
shall be paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such
Advance is a Base Rate Advance, a rate per annum equal at all
times to the Base Rate in effect from time to time, payable in
arrears quarterly on the last day of each March, June, September
and December during such periods and on the Termination Date.
(ii) Eurodollar Rate Advances. During such periods as
such Advance is a Eurodollar Rate Advance, a rate per annum equal
at all times during each Interest Period for such Advance to the
sum of (A) the Eurodollar Rate for such Interest Period for such
Advance plus (B) the Applicable Margin in effect from time to
time, payable in arrears on the last day of such Interest Period
and, if such Interest Period has a duration of more than three
months, on each day that occurs during such Interest Period every
three months from the first day of such Interest Period and on the
date such Eurodollar Rate Advance shall be Converted or paid in
full.
(iii) Regulation D Compensation. Each Lender that is
subject to reserve requirements of the Board of Governors of the
Federal Reserve System (or any successor) may require the
applicable Borrower to pay, contemporaneously with each payment of
interest on Eurodollar Rate Advances, additional interest on the
related Eurodollar Rate Advances of such Lender at the rate per
annum equal to the excess of (i)(A) the applicable Eurodollar
Rate, divided by (B) one minus the Eurodollar Rate Reserve
Requirement over (ii) the rate specified in clause (i)(A). Any
Lender wishing to require payment of such additional interest
shall so notify such Borrower directly, in which case such
additional interest on the Eurodollar Rate Advances of such Lender
shall be payable to such Lender at the place indicated in such
notice with respect to each Interest Period commencing after the
giving of such notice.
(b) Default Interest. Upon the occurrence and during the
existence of an Event of Default under Section 6.01(a) or 6.01(f) or at the
request of the Required Lenders during the existence of any other Event of
Default, each Borrower shall pay interest on (i) the unpaid principal
amount of each Advance owing to each Lender, payable in arrears on the
dates referred to in clause (a)(i) or (a)(ii) above and at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be
paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to
the fullest extent permitted by law, the amount of any interest, fee or
other amount payable under the Loan Documents that is not paid when due,
from the date such amount shall be due until such amount shall be paid in
full, payable in arrears on the date such amount shall be paid in full and
on demand, at a rate per annum equal at all times to 2% per annum above the
rate per annum required to be paid, in the case of interest, on the Type of
Advance on which such interest has accrued pursuant to clause (a)(i) or
(a)(ii) above and, in all other cases, on Base Rate Advances pursuant to
clause (a)(i) above.
(c) Notice of Interest Period and Interest Rate.
Promptly after receipt of a Notice of Borrowing pursuant to Section 2.02(a),
a notice of Conversion pursuant to Section 2.09 or a notice of selection of an
Interest Period pursuant to the terms of the definition
26
of "Interest Period", the Administrative Agent shall give notice to the
Borrowers and each Lender of the applicable Interest Period and the
applicable interest rate determined by the Administrative Agent for
purposes of clause (a)(i) or (a)(ii) above.
SECTION 2.08. Fees. (a) Facility Fee. The Borrowers agree
to pay to the Administrative Agent for the account of the Lenders a facility
fee, from the Effective Date until the Termination Date, payable in arrears
quarterly on the last day of each March, June, September and December,
commencing on June 30, 2000, and on the Termination Date, at the rate of the
Applicable Facility Fee Percentage on the average daily WC Commitment of each
Lender during such quarter (whether used or unused); provided, however, that no
facility fee shall accrue on the Unused WC Commitment of a Defaulting Lender so
long as such Lender shall be a Defaulting Lender.
(b) Agents' Fees. Each Borrower agrees that it shall
pay to each Agent for its own account such fees as may from time to time be
agreed between such Borrower and such Agent.
SECTION 2.09. Conversion of Advances. (a) Optional. Each
Borrower may on any Business Day, upon notice given to the Administrative
Agent not later than 11:00 A.M. (New York City time) on the third Business
Day prior to the date of the proposed Conversion and subject to the
provisions of Section 2.10, Convert all or any portion of the Committed
Advances of one Type comprising the same Committed Borrowing into Committed
Advances of the other Type; provided, however, that any Conversion of Base
Rate Advances into Eurodollar Rate Advances shall be in an amount not less
than the minimum amount specified in Section 2.01 for a Committed
Borrowing, no Conversion of any Committed Advances shall result in more
separate Committed Borrowings than permitted under Section 2.02(b) and each
Conversion of Committed Advances comprising part of the same Committed
Borrowing shall be made ratably among the Lenders in accordance with their
respective WC Commitments. Each such notice of Conversion shall, within the
restrictions specified above, specify (i) the date of such Conversion, (ii)
the Committed Advances to be Converted and (iii) if such Conversion is into
Eurodollar Rate Advances, the duration of the initial Interest Period for
such Committed Advances. Each notice of Conversion shall be irrevocable and
binding on such Borrower.
(b) Mandatory. (i) On the date on which the aggregate
unpaid principal amount of Eurodollar Rate Advances comprising any
Committed Borrowing shall be reduced, by payment or prepayment or
otherwise, to less than $10,000,000, such Committed Advances shall
automatically Convert into Base Rate Advances at the end of the applicable
Interest Period.
(ii) If the Borrowers shall fail to select the duration
of any Interest Period for any Eurodollar Rate Advances in accordance with
the provisions contained in the definition of "Interest Period" in Section
1.01, the Administrative Agent will forthwith so notify the Borrowers and
the Lenders, whereupon each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance.
(iii) Upon the occurrence and during the existence of an
Event of Default under Section 6.01(a) or 6.01(f) or at the request of the
Required Lenders during the existence of any other Event of Default, (x)
each Eurodollar Rate Advance will automatically, on the last day
27
of the then existing Interest Period therefor, Convert into a Base Rate
Advance and (y) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.10. Increased Costs, Etc. (a) If, due to either
(i) the introduction of or any change in or in the interpretation of, in
each case after the date hereof, any law or regulation or (ii) the
compliance with any guideline or request issued after the date hereof from
any central bank or other governmental authority (whether or not having the
force of law), there shall be any increase in the cost to any Lender of
agreeing to make or of making, funding or maintaining Eurodollar Rate
Advances or LIBO Rate Advances (excluding, for purposes of this Section
2.10, any such increased costs resulting from (x) Taxes or Other Taxes (as
to which Section 2.12 shall govern) and (y) changes in the basis of
taxation of overall net income or overall gross income by the United States
or by the foreign jurisdiction or state under the laws of which such Lender
is organized or has its Applicable Lending Office or any political
subdivision thereof), then the Borrowers agree to pay, from time to time,
within five days after demand by such Lender (with a copy of such demand to
the Administrative Agent), which demand shall include a statement of the
basis for such demand and a calculation in reasonable detail of the amount
demanded, to the Administrative Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such increased
cost. A certificate as to the amount of such increased cost, submitted to
the Borrowers by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any
change in or in the interpretation of any law or regulation, in each case
after the date hereof, or (ii) the compliance with any guideline or request
issued after the date hereof from any central bank or other governmental
authority (whether or not having the force of law), there shall be any
increase in the amount of capital required or expected to be maintained by
any Lender or any corporation controlling such Lender as a result of or
based upon the existence of such Lender's commitment to lend hereunder and
other commitments of such type, then, within five days after demand by such
Lender or such corporation (with a copy of such demand to the
Administrative Agent), which demand shall include a statement of the basis
for such demand and a calculation in reasonable detail of the amount
demanded, the Borrowers agree to pay to the Administrative Agent for the
account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender in the light of
such circumstances, to the extent that such Lender reasonably determines
such increase in capital to be allocable to the existence of such Lender's
commitment to lend. A certificate as to such amounts submitted to the
Borrowers by such Lender shall be conclusive and binding for all purposes,
absent manifest error.
(c) If, prior to the first day of any Interest Period
with respect to any Eurodollar Rate Advances, the Required Lenders notify
the Administrative Agent that the Eurodollar Rate for such Interest Period
for such Committed Advances will not adequately reflect the cost to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances
for such Interest Period, the Administrative Agent shall forthwith so
notify the Borrower and the Lenders, whereupon each such Eurodollar Rate
Advance will (i) in the case of requested new Eurodollar Rate Advances, be
made as or remain Base Rate Advances or as a Eurodollar Rate Advance with a
different Interest Period as to which the Required Lenders have
28
not given such a notice and (ii) in the case of existing Eurodollar Rate
Advances, automatically, on the last day of the then existing Interest
Period therefor, Convert into Base Rate Advances or be continued as a
Eurodollar Rate Advance with a different Interest Period as to which the
Required Lenders have not given such notice.
(d) Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation
of any law or regulation, in each case after the date hereof, shall make it
unlawful, or any central bank or other governmental authority shall assert
that it is unlawful, for any Lender or its Eurodollar Lending Office to
perform its obligations hereunder to make Eurodollar Rate Advances or LIBO
Rate Advances or to continue to fund or maintain Eurodollar Rate Advances
or LIBO Rate Advances hereunder, then, on notice thereof and demand
therefor by such Lender to the Borrowers through the Administrative Agent,
(i) each Eurodollar Rate Advance or LIBO Rate Advance, as the case may be,
of such Lender will automatically, upon such demand, Convert into a Base
Rate Advance or an Advance that bears interest at the rate set forth in
Section 2.07(a)(i), as the case may be, and (ii) the obligation of such
Lender to make Eurodollar Rate Advances or LIBO Rate Advances or to Convert
Committed Advances into Eurodollar Rate Advances shall be suspended until
the Administrative Agent shall notify the Borrowers that such Lender has
determined that the circumstances causing such suspension no longer exist
(it being understood that such Lender shall make and maintain Base Rate
Advances in the amount that would otherwise be made and maintained by such
Lender as Eurodollar Advances absent the circumstances described above).
(e) Each Lender shall promptly notify the Borrowers and
the Administrative Agent of any event of which it has actual knowledge
which will result in, and will use reasonable commercial efforts available
to it (and not, in such Lender's good faith judgment, otherwise
disadvantageous to such Lender) to mitigate or avoid, (i) any obligation by
the Borrowers to pay any amount pursuant to subsection (a) or (b) above or
pursuant to Section 2.12 or (ii) the occurrence of any circumstances of the
nature described in subsection (c) or (d) above (and, if any Lender has
given notice of any event described in clause (i) or (ii) above and
thereafter such event ceases to exist, such Lender shall promptly so notify
the Borrowers and the Administrative Agent). Without limiting the
foregoing, each Lender will designate a different Applicable Lending Office
if such designation will avoid (or reduce the cost to the Borrowers of) any
event described in clause (i) or (ii) of the preceding sentence and such
designation will not, in such Lender's good faith judgment, be otherwise
disadvantageous to such Lender.
(f) Notwithstanding the provisions of subsections (a) and
(b) above or Section 2.12 (and without limiting subsection (e) above), if
any Lender fails to notify the Borrowers of any event or circumstance that
will entitle such Lender to compensation pursuant subsection (a) or (b)
above or Section 2.12 within 120 days after such Lender obtains actual
knowledge of such event or circumstance, then such Lender shall not be
entitled to compensation, from the Borrowers for any amount arising prior
to the date which is 120 days before the date on which such Lender notifies
the Borrowers of such event or circumstance.
SECTION 2.11. Payments and Computations. (a) The
applicable Borrower shall make each payment hereunder and under the applicable
Notes, irrespective of any right of counterclaim or set-off (except as
otherwise provided in Section 2.15), not later than 12:00 noon (New York City
time) on the day when due in U.S. dollars to the Administrative Agent at the
29
Administrative Agent's Account in same day funds, with payments being
received by the Administrative Agent after such time being deemed to have
been received on the next succeeding Business Day. The Administrative Agent
will promptly thereafter cause like funds to be distributed (i) if such
payment by such Borrower is in respect of principal, interest, facility
fees or any other amount then payable hereunder and under the Notes to more
than one Lender, to such Lenders for the account of their respective
Applicable Lending Offices ratably in accordance with the amounts of such
respective amount then payable to such Lenders and (ii) if such payment by
such Borrower is in respect of any amount then payable hereunder to one
Lender, to such Lender for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement.
(b) Each Borrower hereby authorizes each Lender, if an
Event of Default under Section 6.01(a) has occurred and is continuing, to
charge from time to time against any or all of such Borrower's accounts
with such Lender any amount owing under this Agreement that resulted in
such Event of Default.
(c) All computations of interest on Base Rate Advances
(and any other amount payable by reference to the Base Rate) when the Base
Rate is determined by reference to MGT's prime rate shall be made by the
Administrative Agent on the basis of a year of 365 or, if applicable, 366
days; all other computations of interest and fees shall be made by the
Administrative Agent on the basis of a year of 360 days. All such
computations shall be made for the actual number of days (including the
first day but excluding the last day) occurring in the period for which
such interest or fees are payable. Each determination by the Administrative
Agent of an interest rate or fee hereunder shall be conclusive and binding
for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes
shall be stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of
interest or fee, as the case may be; provided, however, that, if such
extension would cause payment of interest on or principal of Eurodollar
Rate Advances or LIBO Rate Advances to be made in the next following
calendar month, such payment shall be made on the next preceding Business
Day.
(e) Unless the Administrative Agent shall have received
notice from any Borrower required to make any payment prior to the date on
which any payment is due to any Lender hereunder that such Borrower will
not make such payment in full, the Administrative Agent may assume that
such Borrower has made such payment in full to the Administrative Agent on
such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each such Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent such
Borrower shall not have so made such payment in full to the Administrative
Agent, each such Lender shall repay to the Administrative Agent forthwith
on demand such amount distributed to such Lender together with interest
thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.
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SECTION 2.12. Taxes. (a) Any and all payments by any Loan
Party hereunder or under the Notes shall be made, in accordance with
Section 2.11, free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the
case of each Lender and each Agent, taxes that are imposed on its overall
net income by the United States and taxes that are imposed on its overall
net income (and franchise taxes imposed in lieu thereof) by the state or
foreign jurisdiction under the laws of which such Lender or such Agent, as
the case may be, is organized or any political subdivision thereof and, in
the case of each Lender, taxes that are imposed on its overall net income
(and franchise taxes imposed in lieu thereof) by the state or foreign
jurisdiction of such Lender's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities in respect of payments
hereunder or under the Notes being herein referred to as "Taxes"). If any
Loan Party shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note to any Lender or any Agent,
(i) the sum payable by such Loan Party shall be increased as may be
necessary so that after such Loan Party and the Administrative Agent have
made all required deductions (including deductions applicable to additional
sums payable under this Section 2.12) such Lender or such Agent, as the
case may be, receives an amount equal to the sum it would have received had
no such deductions been made, (ii) such Loan Party shall make all such
deductions and (iii) such Loan Party shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law.
(b) In addition, each Loan Party shall pay any present or
future stamp, documentary, excise, property or similar taxes, charges or
levies that arise from any payment made hereunder or under the Notes or
from the execution, delivery or registration of, performance under, or
otherwise with respect to, this Agreement or the Notes (herein referred to
as "Other Taxes").
(c) Each Loan Party shall indemnify each Lender and each
Agent for and hold them harmless against the full amount of Taxes and Other
Taxes, and for the full amount of taxes of any kind imposed by any
jurisdiction on amounts payable under this Section 2.12, imposed on or paid
by such Lender or such Agent (as the case may be) and any liability
(including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto. This indemnification payment shall be
made within 30 days from the date such Lender or such Agent (as the case
may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of
Taxes, each Loan Party shall furnish to the Administrative Agent, at its
address referred to in Section 9.02, the original or a certified copy of a
receipt evidencing such payment. In the case of any payment hereunder or
under the Notes by or on behalf of a Loan Party through an account or
branch outside the United States or by or on behalf of a Loan Party by a
payor that is not a United States person, if such Loan Party determines
that no Taxes are payable in respect thereof, such Loan Party shall
furnish, or shall cause such payor to furnish, to the Administrative Agent,
at such address, an opinion of counsel acceptable to the Administrative
Agent stating that such payment is exempt from Taxes. For purposes of
subsections (d) and (e) of this Section 2.12, the terms "United States" and
"United States person" shall have the meanings specified in Section
7701(a)(9) and 7701(a)(10) of the Internal Revenue Code, respectively.
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(e) Each Lender organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of
its execution and delivery of this Agreement in the case of each Initial
Lender, and on the date on which it becomes a Lender in the case of each
other Lender, and from time to time thereafter as requested in writing by
the Parent (but only so long thereafter as such Lender remains lawfully
able to do so), provide each of the Administrative Agent and the Parent
with two original Internal Revenue Service forms W-8BEN or W-8ECI or (in
the case of a Lender that has certified in writing to the Administrative
Agent that it is not a "bank" as defined in Section 881(c)(3)(A) of the
Internal Revenue Code) form W-8 (and, if such Lender delivers a form W-8,
a certificate representing that such Lender is not a "bank" for purposes of
Section 881(c)(3)(A) of the Internal Revenue Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Internal
Revenue Code) of the Parent and is not a controlled foreign corporation
related to the Parent (within the meaning of Section 864(d)(4) of the
Internal Revenue Code)), as appropriate, or any successor or other form
prescribed by the Internal Revenue Service, certifying that such Lender is
exempt from or entitled to a reduced rate of United States withholding tax
on payments pursuant to this Agreement or the Notes or, in the case of a
Lender providing a form W-8, certifying that such Lender is a foreign
corporation, partnership, estate or trust. If the forms provided by a
Lender at the time such Lender first becomes a party to this Agreement
indicate a United States interest withholding tax rate in excess of zero,
withholding tax at such rate shall be considered excluded from Taxes unless
and until such Lender provides the appropriate forms certifying that a
lesser rate applies, whereupon withholding tax at such lesser rate only
shall be considered excluded from Taxes for periods governed by such forms;
provided, however, that if, at the effective date of the Assignment and
Acceptance pursuant to which a Lender becomes a party to this Agreement,
the Lender assignor was entitled to payments under subsection (a) of this
Section 2.12 in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall
include (in addition to withholding taxes that may be imposed in the future
or other amounts otherwise includible in Taxes) United States withholding
tax, if any, applicable with respect to the Lender assignee on such date.
If any form or document referred to in this subsection (e) requires the
disclosure of information, other than information necessary to compute the
tax payable and information required on the date hereof by Internal Revenue
Service form W-8BEN,W-8ECI or W-8 (and the related certificate described
above), that the Lender reasonably considers to be confidential, the Lender
shall give notice thereof to the Parent and shall not be obligated to
include in such form or document such confidential information.
(f) For any period with respect to which a Lender which
may lawfully do so has failed to provide the Parent with the appropriate
form described in subsection (e) above (other than if such failure is due
to a change in law occurring after the date on which a form originally was
required to be provided or if such form otherwise is not required under
subsection (e) above), such Lender shall not be entitled to indemnification
under subsection (a) or (c) of this Section 2.12 with respect to Taxes
imposed by the United States by reason of such failure; provided, however,
that should a Lender become subject to Taxes because of its failure to
deliver a form required hereunder, the Parent shall take such steps as such
Lender shall reasonably request to assist such Lender to recover such
Taxes.
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(g) Each Lender represents and warrants to the Borrowers
that, as of the date such Lender becomes a party to this Agreement, such
Lender is entitled to receive payments hereunder from the Borrowers without
deduction or withholding for or on account of any Taxes.
SECTION 2.13. Sharing of Payments, Etc. If any Lender
shall obtain at any time any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise, other than as a
result of an assignment pursuant to Section 9.07) (a) on account of
obligations due and payable to such Lender hereunder and under the Notes at
such time in excess of its ratable share (according to the proportion of
(i) the amount of such obligations due and payable to such Lender at such
time to (ii) the aggregate amount of the obligations due and payable to all
Lenders hereunder and under the Notes at such time) of payments on account
of the obligations due and payable to all Lenders hereunder and under the
Notes at such time obtained by all the Lenders at such time or (b) on
account of obligations owing (but not due and payable) to such Lender
hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such obligations owing to
such Lender at such time to (ii) the aggregate amount of the obligations
owing (but not due and payable) to all Lenders hereunder and under the
Notes at such time) of payments on account of the obligations owing (but
not due and payable) to all Lenders hereunder and under the Notes at such
time obtained by all of the Lenders at such time, such Lender shall
forthwith purchase from the other Lenders such interests or participating
interests in the obligations due and payable or owing to them, as the case
may be, as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each other Lender shall be rescinded
and such other Lender shall repay to the purchasing Lender the purchase
price to the extent of such Lender's ratable share (according to the
proportion of (i) the purchase price paid to such Lender to (ii) the
aggregate purchase price paid to all Lenders) of such recovery together
with an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such other Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. Each Borrower agrees that any
Lender so purchasing an interest or participating interest from another
Lender pursuant to this Section 2.13 may, to the fullest extent permitted
by law, exercise all its rights of payment (including the right of set-off)
with respect to such interest or participating interest, as the case may
be, as fully as if such Lender were the direct creditor of such Borrower in
the amount of such interest or participating interest, as the case may be.
SECTION 2.14. Use of Proceeds. The proceeds of the
Advances shall be available (and each Borrower agrees that it shall use
such proceeds) to provide working capital, and for other general corporate
purposes of the Borrowers and their respective Subsidiaries.
SECTION 2.15. Defaulting Lenders. (a) In the event that,
at any one time, (i) any Lender shall be a Defaulting Lender, (ii) such
Defaulting Lender shall owe a Defaulted Advance to any Borrower and (iii)
such Borrower shall be required to make any payment hereunder or under any
other Loan Document to or for the account of such Defaulting Lender, then
such Borrower may, to the fullest extent permitted by applicable law, set
off and otherwise apply the obligation of such Borrower to make such
payment to or for the account of such Defaulting Lender against the
obligation of such Defaulting Lender to make such Defaulted
33
Advance. In the event that, on any date, any Borrower shall so set off and
otherwise apply its obligation to make any such payment against the
obligation of such Defaulting Lender to make any such Defaulted Advance on
or prior to such date, the amount so set off and otherwise applied by such
Borrower shall constitute for all purposes of this Agreement and the other
Loan Documents a Committed Advance by such Defaulting Lender made on the
date of such setoff. Such Committed Advance shall be considered, for all
purposes of this Agreement, to comprise part of the Committed Borrowing in
connection with which such Defaulted Advance was originally required to
have been made pursuant to Section 2.01, even if the other Committed
Advances comprising such Committed Borrowing shall be Eurodollar Rate
Advances on the date such Committed Advance is deemed to be made pursuant
to this subsection (a). Each Borrower shall notify the Administrative Agent
at any time such Borrower exercises its right of set-off pursuant to this
subsection (a) and shall set forth in such notice (A) the name of the
Defaulting Lender and the Defaulted Advance required to be made by such
Defaulting Lender and (B) the amount set off and otherwise applied in
respect of such Defaulted Advance pursuant to this subsection (a). Any
portion of such payment otherwise required to be made by such Borrower to
or for the account of such Defaulting Lender which is paid by such
Borrower, after giving effect to the amount set off and otherwise applied
by such Borrower pursuant to this subsection (a), shall be applied by the
Administrative Agent as specified in subsection (b) or (c) of this Section
2.15.
(b) In the event that, at any one time, (i) any Lender
shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a
Defaulted Amount to any Agent or any of the other Lenders and (iii) any
Borrower shall make any payment hereunder or under any other Loan Document
to the Administrative Agent for the account of such Defaulting Lender, then
the Administrative Agent may, on its behalf or on behalf of such other
Agents or such other Lenders and to the fullest extent permitted by
applicable law, apply at such time the amount so paid by such Borrower to
or for the account of such Defaulting Lender to the payment of each such
Defaulted Amount to the extent required to pay such Defaulted Amount. In
the event that the Administrative Agent shall so apply any such amount to
the payment of any such Defaulted Amount on any date, the amount so applied
by the Administrative Agent shall constitute for all purposes of this
Agreement and the other Loan Documents payment, to such extent, of such
Defaulted Amount on such date. Any such amount so applied by the
Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Agents or such other
Lenders, ratably in accordance with the respective portions of such
Defaulted Amounts payable at such time to the Administrative Agent, such
other Agents and such other Lenders and, if the amount of such payment made
by such Borrower shall at such time be insufficient to pay all Defaulted
Amounts owing at such time to the Administrative Agent, such other Agents
and such other Lenders, in the following order of priority:
(i) first, to the Agents for any Defaulted Amounts then
owing to the Agents, ratably in accordance with such respective
Defaulted Amounts then owing to the Agents; and
(ii) second, to any other Lenders for any Defaulted
Amounts then owing to such other Lenders, ratably in accordance
with such respective Defaulted Amounts then owing to such other
Lenders.
34
Any portion of such amount paid by such Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by
the Administrative Agent pursuant to this subsection (b), shall be applied
by the Administrative Agent as specified in subsection (c) of this Section
2.15.
(c) In the event that, at any one time, (i) any Lender
shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a
Defaulted Advance or a Defaulted Amount and (iii) any Borrower, any Agent
or any other Lender shall be required to pay or distribute any amount
hereunder or under any other Loan Document to or for the account of such
Defaulting Lender, then such Borrower or such Agent or such other Lender
shall pay such amount to the Administrative Agent to be held by the
Administrative Agent, to the fullest extent permitted by applicable law, in
escrow or the Administrative Agent shall, to the fullest extent permitted
by applicable law, hold in escrow such amount otherwise held by it. Any
funds held by the Administrative Agent in escrow under this subsection (c)
shall be deposited by the Administrative Agent in an account with MGT, in
the name and under the control of the Administrative Agent, but subject to
the provisions of this subsection (c). The terms applicable to such
account, including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be MGT's standard terms
applicable to escrow accounts maintained with it. Any interest credited to
such account from time to time shall be held by the Administrative Agent in
escrow under, and applied by the Administrative Agent from time to time in
accordance with the provisions of, this subsection (c). The Administrative
Agent shall, to the fullest extent permitted by applicable law, apply all
funds so held in escrow from time to time to the extent necessary to make
any Advances required to be made by such Defaulting Lender and to pay any
amount payable by such Defaulting Lender hereunder and under the other Loan
Documents to the Administrative Agent or any other Lender, as and when such
Advances or amounts are required to be made or paid and, if the amount so
held in escrow shall at any time be insufficient to make and pay all such
Advances and amounts required to be made or paid at such time, in the
following order of priority:
(i) first, to the Agents for any amounts then due and
payable by such Defaulting Lender to the Agents hereunder, ratably
in accordance with such amounts then due and payable to the
Agents;
(ii) second, to any other Lenders for any amount then due
and payable by such Defaulting Lender to such other Lenders
hereunder, ratably in accordance with such respective amounts then
due and payable to such other Lenders; and
(iii) third, to such Borrower for any Advance then
required to be made by such Defaulting Lender pursuant to the
Commitment of such Defaulting Lender.
In the event that any Lender that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender shall be
distributed by the Administrative Agent to such Lender and applied by such
Lender to the obligations owing to such Lender at such time under this
Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such obligations outstanding at such time.
35
(d) The rights and remedies against a Defaulting Lender
under this Section 2.15 are in addition to other rights and remedies that
such Borrower may have against such Defaulting Lender with respect to any
Defaulted Advance and that any Agent or any Lender may have against such
Defaulting Lender with respect to any Defaulted Amount.
SECTION 2.16. Replacement of Affected Lender. At any time
any Lender is an Affected Lender, the Borrowers may replace such Affected
Lender as a party to this Agreement with one or more other Lenders and/or
Assignees, and upon notice from the Borrowers such Affected Lender shall
assign, and without recourse or warranty, its WC Commitment, its Committed
Advances, its Committed Note and all of its other rights and obligations
hereunder to such other Lenders and/or Assignees for a purchase price equal
to the sum of the principal amount of the Committed Advances so assigned,
all accrued and unpaid interest thereon, such Affected Lender's ratable
share of all accrued and unpaid fees payable pursuant to Section 2.08, any
amounts payable pursuant to Section 9.04(c) as a result of such Affected
Lender receiving payment of any Eurodollar Rate Advance prior to the end of
an Interest Period therefor (assuming for such purpose that receipt of
payment pursuant to such Assignment and Acceptance constitutes payment of
such Eurodollar Rate Advances) and all other obligations owed to such
Affected Lender hereunder.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effectiveness. This
Amended Agreement shall not become effective, and no Lender shall be
obligated to make any Advance, until each of the following conditions
precedent is satisfied:
(i) The Administrative Agent shall have received
counterparts of this Amended Agreement duly executed by each of
the parties listed on the signature pages hereof (or in the case
of any party as to which such an executed counterpart shall not
have been received, the Administrative Agent shall have received
evidence satisfactory to it of the execution and delivery of a
counterpart hereof by such party).
(ii) The Administrative Agent shall have received the
following in form and substance reasonably satisfactory to the
Administrative Agent (unless otherwise specified) and (except for
the Committed Notes) in sufficient copies for each Lender:
(A) The Committed Notes payable to the order of
the Lenders.
(B) Certified copies of the resolutions of the
Board of Directors of each Loan Party approving the
transactions contemplated by the Loan Documents and each
Loan Document to which it is or is to be a party, and of
all documents evidencing other necessary corporate action
and governmental and other third party approvals and
consents, if any, with transactions contemplated by the
Loan Documents and each Loan Document to which it is or
is to be a party.
36
(C) A copy of a certificate of the Secretary of
State or other appropriate official of the jurisdiction
of incorporation of (x) each of ACE INA and ACE Guaranty,
dated reasonably near the date of the Initial Extension
of Credit, certifying (A) as to a true and correct copy
of its charter and each amendment thereto on file in such
Secretary's office and (B) that (1) such amendments are
the only amendments to its charter on file in such
Secretary's office, (2) it has paid all franchise taxes
to the date of such certificate and (C) it is duly
incorporated and in good standing or presently subsisting
under the laws of the State of the jurisdiction of its
incorporation and (y) each other Loan Party, dated
reasonably near the Initial Extension of Credit,
certifying as to the good standing (or existence) of such
Loan Party.
(D) A certificate of each Loan Party, signed on
behalf of such Loan Party by its President or a Vice
President and its Secretary or any Assistant Secretary,
dated the date of the Initial Extension of Credit (the
statements made in which certificate shall be true on and
as of the date of the Initial Extension of Credit),
certifying as to (1) in the case of each of ACE INA and
ACE Guaranty, the absence of any amendments to the
charter of such Loan Party since the date of the
Secretary of State's certificate referred to in Section
3.01(ii)(C), (2) a true and correct copy of the bylaws
(in the case of ACE INA and ACE Guaranty) or the
constitutional documents (in the case of each other Loan
Party) of such Loan Party as in effect on the date on
which the resolutions referred to in Section 3.01(ii)(B)
were adopted and on the date of the Initial Extension of
Credit, (3) the due incorporation and good standing or
valid existence of such Loan Party as a corporation
organized under the laws of the jurisdiction of its
incorporation, and the absence of any proceeding for the
dissolution or liquidation of such Loan Party, (4) the
truth of the representations and warranties contained in
the Loan Documents as though made on and as of the date
of the Initial Extension of Credit and (5) the absence of
any event occurring and continuing, or resulting from the
Initial Extension of Credit, that constitutes a Default.
(E) A certificate of the Secretary or an
Assistant Secretary of each Loan Party certifying the
names and true signatures of the officers of such Loan
Party authorized to sign each Loan Document to which it
is or is to be a party and the other documents to be
delivered hereunder and thereunder.
(F) A favorable opinion of (1) ▇▇▇▇▇▇ and
Calder, Cayman Islands counsel for the Parent, in
substantially the form of Exhibit D-1 hereto and as to
such other matters as any Lender through the
Administrative Agent may reasonably request, (2) ▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇, New York counsel for the Loan Parties, in
substantially the form of Exhibit D-2 hereto and as to
such other matters as any Lender through the
Administrative Agent may reasonably request, (3) ▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇, Bermuda counsel for ACE Bermuda and
Tempest, in substantially the form of Exhibit D-3 hereto
and as to such other matters as any Lender through the
Administrative Agent may reasonably request and (4) ▇▇▇▇▇
& ▇▇▇▇▇▇▇, Maryland counsel for ACE Guaranty, in
substantially the form of
37
Exhibit D-4 hereto and as to such other matters as any
Lender through the Administrative Agent may reasonably
request.
(iii) There shall have occurred no material adverse
change since December 31, 1999 in the business, financial
condition, operations or properties of the Parent and its
Subsidiaries, taken as a whole.
(iv) There shall exist no action, suit, investigation,
litigation or proceeding affecting any Loan Party or any of its
Subsidiaries pending or threatened before any court, governmental
agency or arbitrator that (x) could be reasonably expected to have
a Material Adverse Effect or (y) would reasonably be expected to
materially adversely affect the legality, validity or
enforceability of any Loan Document or the other transactions
contemplated by the Loan Documents.
(v) The Borrowers shall have paid all accrued fees of the
Agents and the Lenders and all accrued expenses of the Agents
(including the accrued fees and expenses of counsel to the
Administrative Agent and local counsel on behalf of all of the
Lenders), in each case to the extent then due and payable.
On the Effective Date the Existing Agreement will be
automatically amended and restated in its entirety to read as set forth in
this Amended Agreement. On and after the Effective Date the rights and
obligations of the parties hereto shall be governed by this Amended
Agreement; provided the rights and obligations of the parties hereto with
respect to the period prior to the Effective Date shall continue to be
governed by the provisions of the Existing Agreement. On the Effective
Date, any Lender whose WC Commitment is changed to zero shall cease to be a
Lender party to this Agreement and all accrued fees and other amounts
payable under this Agreement for the account of such Lender shall be due
and payable on such date; provided that the provisions of Section 2.10,
2.12 and 9.04 of this Agreement shall continue to inure to the benefit of
each such Lender. The Notes delivered to each Lender under the Existing
Agreement shall be canceled and Notes under this Amended Agreement shall be
given in substitution therefor. Each Lender shall promptly after the
Effective Date deliver to the Borrowers for cancellation the Notes
delivered to such Lender under the Existing Agreement. The Agent shall
promptly notify the Borrowers and each Lender of the effectiveness of the
Amended Agreement, and such notice shall be conclusive and binding on all
parties hereto.
The Banks that are parties to the Existing 2,050 Million
Credit Facility, comprising the "Required Banks" as defined therein, and
ACE INA (the "Borrower" as defined under the Existing 2,050 Million Credit
Facility), Parent, ACE Bermuda and Tempest (Parent, ACE Bermuda and
Tempest, the "Guarantors" as defined under the Existing 2,050 Million
Credit Facility, and along with ACE INA, the "2,050 Million Obligors")
agree that the commitments under the Existing 2,050 Million Credit Facility
shall terminate in their entirety simultaneously with and subject to the
effectiveness of this Agreement and that the 2,050 Million Obligors shall
be obligated to pay on the Effective Date all principal amounts outstanding
thereunder, together with all accrued interest and fees and all other
amounts then payable thereunder to but excluding the Effective Date.
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SECTION 3.02. Conditions Precedent to Each Committed
Borrowing. The obligation of each Lender to make a Committed Advance on the
occasion of each Committed Borrowing (including the initial Committed
Borrowing) shall be subject to the further conditions precedent that on the
date of such Committed Borrowing (a) the following statements shall be true
(and each of the giving of the applicable Notice of Committed Borrowing,
and the acceptance by the Borrower that requested such Committed Borrowing
of the proceeds of such Committed Borrowing shall constitute a
representation and warranty by such Borrower that both on the date of such
notice and on the date of such Committed Borrowing such statements are
true):
(i) the representations and warranties contained in each
Loan Document are correct in all material respects on and as of
such date, before and after giving effect to such Committed
Borrowing and to the application of the proceeds therefrom, as
though made on and as of such date, other than any such
representations or warranties that, by their terms, refer to a
specific date other than the date of such Committed Borrowing, in
which case as of such specific date; and
(ii) no Default has occurred and is continuing, or would
result from such Committed Borrowing or the application of the
proceeds therefrom;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Lender through the Administrative Agent may
reasonably request.
SECTION 3.03. Conditions Precedent to Each Competitive
Bid Borrowing. The obligation of each Lender that is to make a Competitive
Bid Advance on the occasion of a Competitive Bid Borrowing (including the
initial Competitive Bid Borrowing) to make such Competitive Bid Advance as
part of such Competitive Bid Borrowing is subject to the conditions
precedent that (i) the Administrative Agent shall have received the written
confirmatory Notice of Competitive Bid Borrowing with respect thereto, and
(ii) on the date of such Competitive Bid Borrowing the following statements
shall be true (and each of the giving of the applicable Notice of
Competitive Bid Borrowing and the acceptance by the Borrower that requested
such Competitive Bid Borrowing of the proceeds of such Competitive Bid
Borrowing shall constitute a representation and warranty by such Borrower
that on the date of such Competitive Bid Borrowing such statements are
true):
(a) the representations and warranties contained in
Section 4.01 are correct in all material respects on and as of the
date of such Competitive Bid Borrowing, before and after giving
effect to such Competitive Bid Borrowing and to the application of
the proceeds therefrom, as though made on and as of such date,
other than any such representations or warranties that, by their
terms, refer to a specific date other than the date of such
Competitive Bid Borrowing, in which case as of such specific date,
and
(b) no Default has occurred and is continuing, or would
result from such Competitive Bid Borrowing or from the application
of the proceeds therefrom.
SECTION 3.04. Conditions Precedent for ACE Guaranty. The
obligation of each Lender to make any Committed Advance or Competitive Bid
Advance to ACE Guaranty shall be
39
subject to the further condition precedent that on the date of such
Advance, and after giving effect thereto, the sum of the aggregate
principal amount of all Advances outstanding to ACE Guaranty hereunder
shall not exceed $50,000,000.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrowers. Each Borrower represents and warrants as follows (except that
ACE Guaranty represents and warrants only as to itself):
(a) Each Loan Party and each of its Subsidiaries (i) is
duly organized or formed, validly existing and, to the extent such
concept applies, in good standing under the laws of the
jurisdiction of its incorporation or formation, (ii) is duly
qualified and in good standing as a foreign corporation or other
entity in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so
qualify or be licensed except where the failure to so qualify or
be licensed would not be reasonably likely to have a Material
Adverse Effect and (iii) has all requisite power and authority
(including, without limitation, all governmental licenses, permits
and other approvals) to own or lease and operate its properties
and to carry on its business as now conducted and as proposed to
be conducted, except where the failure to have any license, permit
or other approval would not be reasonably likely to have a
Material Adverse Effect. All of the outstanding Equity Interests
in each Borrower (other than the Parent) have been validly issued,
are fully paid and non-assessable and (except for any Preferred
Securities issued after the date of this Agreement) are owned,
directly or indirectly, by the Parent free and clear of all Liens.
(b) Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of all Subsidiaries of each Loan Party.
(c) The execution, delivery and performance by each Loan
Party of each Loan Document to which it is or is to be a party and
the consummation of the transactions contemplated by the Loan
Documents, are within such Loan Party's corporate powers, have
been duly authorized by all necessary corporate action, and do not
(i) contravene such Loan Party's constitutional documents, (ii)
violate any law, rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve
System), order, writ, judgment, injunction, decree, determination
or award, (iii) conflict with or result in the breach of, or
constitute a default under, any contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument
binding on or affecting any Loan Party, any of its Subsidiaries or
any of their properties or (iv) except for the Liens created under
the Loan Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the
properties of any Loan Party or any of its Subsidiaries. No Loan
Party or any of its Subsidiaries is in violation of any such law,
rule, regulation, order, writ, judgment, injunction, decree,
40
determination or award or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which could be reasonably
likely to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or
regulatory body or any other third party is required for (i) the
due execution, delivery, recordation, filing or performance by any
Loan Party of any Loan Document to which it is or is to be a party
or the other transactions contemplated by the Loan Documents, or
(ii) the exercise by any Agent or any Lender of its rights under
the Loan Documents, except for the authorizations, approvals,
actions, notices and filings which have been duly obtained, taken,
given or made and are in full force and effect.
(e) This Agreement has been, and each other Loan Document
when delivered hereunder will have been, duly executed and
delivered by each Loan Party party thereto. This Agreement is, and
each other Loan Document when delivered hereunder will be, the
legal, valid and binding obligation of each Loan Party party
thereto, enforceable against such Loan Party in accordance with
its terms.
(f) There is no action, suit, investigation, litigation
or proceeding affecting any Loan Party or any of its Subsidiaries,
including any Environmental Action, pending or threatened before
any court, governmental agency or arbitrator that (i) could be
reasonably likely to have a Material Adverse Effect or (ii) would
reasonably be expected to affect the legality, validity or
enforceability of any Loan Document or the transactions
contemplated by the Loan Documents.
(g) The Consolidated balance sheets of the Parent and its
Subsidiaries as at December 31, 1999, and the related Consolidated
statements of income and of cash flows of the Parent and its
Subsidiaries for the Fiscal Year then ended, accompanied by an
unqualified opinion of PricewaterhouseCoopers LLP, independent
public accountants, copies of which have been furnished to each
Lender, fairly present the Consolidated financial condition of the
Parent and its Subsidiaries as at such date and the Consolidated
results of operations of the Parent and its Subsidiaries for the
Fiscal Year ended on such date, all in accordance with generally
accepted accounting principles applied on a consistent basis, and,
as of the Effective Date and the date of the Initial Extension of
Credit, since December 31, 1999, there has been no Material
Adverse Change.
(h) No information, exhibit or report furnished by or on
behalf of any Loan Party to any Agent or any Lender in connection
with the negotiation and syndication of the Loan Documents or
pursuant to the terms of the Loan Documents contained any untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements made therein not misleading as at
the date it was dated (or if not dated, so delivered).
(i) Following application of the proceeds of each Advance
hereunder, Margin Stock will constitute less than 25% of the value
of those assets of any Borrower which are subject to any
limitation on sale, pledge or other disposition hereunder.
41
(j) Neither any Loan Party nor any of its Subsidiaries is
an "investment company", or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment
company", as such terms are defined in the Investment Company Act
of 1940, as amended. Neither the making of any Advances nor the
application of the proceeds or repayment thereof by any Borrower,
nor the consummation of the other transactions contemplated by the
Loan Documents, will violate any provision of such Act or any
rule, regulation or order of the Securities and Exchange
Commission thereunder.
(k) Neither any Loan Party nor any of its Subsidiaries is
a party to any indenture, loan or credit agreement or any lease or
other agreement or instrument or subject to any charter or
corporate restriction that is reasonably likely to have a Material
Adverse Effect.
(l) Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
(m) Except to the extent that any and all events and
conditions under clauses (i) through (vi) below of this paragraph
(m) in the aggregate are not reasonably expected to have a
Material Adverse Effect,
(i) Schedule B (Actuarial Information) to the most
recent annual report (Form 5500 Series) for each Pension
Plan, copies of which have been filed with the Internal
Revenue Service, is complete and accurate and fairly
presents the funding status of such Pension Plan, and
since the date of such Schedule B there has been no
material adverse change in such funding status.
(ii) Neither any Loan Party nor any ERISA Affiliate
has incurred or is reasonably expected to incur any
Withdrawal Liability to any Multiemployer Plan.
(iii) Neither any Loan Party nor any ERISA Affiliate
has been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is in reorganization or has
been terminated, within the meaning of Title IV of ERISA,
and no such Multiemployer Plan is reasonably expected to
be in reorganization or to be terminated, within the
meaning of Title IV of ERISA.
(iv) With respect to each scheme or arrangement
mandated by a government other than the United States (a
"Foreign Government Scheme or Arrangement") and with
respect to each employee benefit plan that is not subject
to United States law maintained or contributed to by any
Loan Party or with respect to which any Subsidiary of any
Loan Party may have liability under applicable local law
(a "Foreign Plan"):
(x) Any employer and employee
contributions required by law or by the terms of
any Foreign Government Scheme or Arrangement or
any Foreign Plan have been made, or, if
applicable, accrued, in accordance with normal
accounting practices.
42
(y) The fair market value of the assets of
each funded Foreign Plan, the liability of each
insurer for any Foreign Plan funded through
insurance or the book reserve established for
any Foreign Plan, together with any accrued
contributions, is sufficient to procure or
provide for the accrued benefit obligations, as
of the date hereof, with respect to all current
and former participants in such Foreign Plan
according to the actuarial assumptions and
valuations most recently used to account for
such obligations in accordance with applicable
generally accepted accounting principles.
(z) Each Foreign Plan required to be
registered has been registered and has been
maintained in good standing with applicable
regulatory authorities.
(v) To the extent the assets of any Loan Party are
or are deemed under applicable law to be "plan assets"
within the meaning of Department of Labor Regulation ss.
2510.3-101, the execution, delivery and performance of
the Loan Documents and the consummation of the
transactions contemplated therein will not result in a
non-exempt prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Internal
Revenue Code.
(vi) During the twelve-consecutive-month period to
the date of the execution and delivery of this Agreement
and prior to any Borrowing hereunder, no steps have been
taken to terminate any Pension Plan, no contribution
failure has occurred with respect to any Pension Plan
sufficient to give rise to a lien under section 302(f) of
ERISA and no minimum funding waiver has been applied for
or is in effect with respect to any Pension Plan. No
condition exists or event or transaction has occurred or
is reasonably expected to occur with respect to any
Pension Plan which could result in any Loan Party or any
ERISA Affiliate incurring any material liability, fine or
penalty.
(n) (i) In the ordinary course of its business, each
Borrower reviews the effect of Environmental Laws on the
operations and properties of such Borrower and its Subsidiaries,
in the course of which it identifies and evaluates associated
liabilities and costs (including, without limitation, any capital
or operating expenditures required for clean-up or closure of
properties presently or previously owned, any capital or operating
expenditures required to achieve or maintain compliance with
environmental protection standards imposed by law or as a
condition of any license, permit or contract, any related
constraints on operating activities, including any periodic or
permanent shutdown of any facility or reduction in the level of or
change in the nature of operations conducted thereat, and any
actual or potential liabilities to third parties and any related
costs and expenses). On the basis of this review, each Borrower
has reasonably concluded that such associated liabilities and
costs, including the costs of compliance with Environmental Laws,
are unlikely to have a Material Adverse Effect.
43
(ii) The operations and properties of each Loan
Party and each of its Subsidiaries comply in all material
respects with all applicable Environmental Laws and
Environmental Permits, except for non-compliances which
would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect; Hazardous
Materials have not been released, discharged or disposed
of on any property currently or formerly owned or
operated by any Loan Party or any of its Subsidiaries
that would reasonably be expected to have a Material
Adverse Effect; and there are no Environmental Actions
pending or threatened against any Loan Party or its
Subsidiaries, and no circumstances exist that could be
reasonably likely to form the basis of any such
Environmental Action, which (in either case),
individually or in the aggregate with all other such
pending or threatened actions and circumstances would
reasonably be expected to have a Material Adverse Effect.
(o) Each Loan Party and each of its Subsidiaries has
filed, has caused to be filed or has been included in all material
federal tax returns and all other material tax returns required to
be filed and has paid all taxes shown thereon to be due, together
with applicable interest and penalties, except to the extent
contested in good faith and by appropriate proceedings (in which
case adequate reserves have been established therefor in
accordance with GAAP).
ARTICLE V
COVENANTS OF THE BORROWERS
SECTION 5.01. Affirmative Covenants. So long as any
Advance or any other obligation of any Loan Party under any Loan Document
shall remain unpaid, or any Lender shall have any Commitment hereunder,
each Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of
its Subsidiaries to comply, in all material respects, with all
applicable laws, rules, regulations and orders, such compliance to
include, without limitation, compliance with Environmental Laws,
Environmental Permits, ERISA and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act
of 1970.
(b) Payment of Taxes, Etc. Pay and discharge, and cause
each of its Subsidiaries to pay and discharge, before the same
shall become delinquent, (i) all material taxes, assessments and
governmental charges or levies imposed upon it or upon its
property and (ii) all lawful material claims that, if unpaid,
might by law become a Lien upon its property; provided, however,
that neither any Borrower nor any of its Subsidiaries shall be
required to pay or discharge any such tax, assessment, charge or
claim that is being contested in good faith and by proper
proceedings and as to which appropriate reserves are being
maintained.
44
(c) Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and
covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same
general areas in which the Parent or such Subsidiary operates (it
being understood that the foregoing shall not apply to maintenance
of reinsurance or similar matters which shall be solely within the
reasonable business judgment of the Parent and its Subsidiaries).
(d) Preservation of Corporate Existence, Etc. Preserve
and maintain, and cause each of its Subsidiaries to preserve and
maintain, its existence, legal structure, legal name, rights
(charter and statutory), permits, licenses, approvals, privileges
and franchises; provided, however, that the Parent and its
Subsidiaries may consummate any merger or consolidation permitted
under Section 5.02(c) and provided further that neither the Parent
nor any of its Subsidiaries shall be required to preserve any
right, permit, license, approval, privilege or franchise if the
Board of Directors of the Parent or such Subsidiary shall
determine that the preservation thereof is no longer desirable in
the conduct of the business of the Parent or such Subsidiary, as
the case may be, and that the loss thereof is not disadvantageous
in any material respect to the Parent, such Subsidiary or the
Lenders.
(e) Visitation Rights. At any reasonable time and from
time to time upon prior notice, permit the Agents (upon request
made by any Agent or any Lender), or any agents or representatives
thereof, at the expense (so long as no Default has occurred and is
continuing) of such Agents (or such Lender, as the case may be),
to examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, the Parent and
any of its Subsidiaries, and to discuss the affairs, finances and
accounts of the Parent and any of its Subsidiaries with any of
their officers or directors and with, so long as a representative
of the Parent is present, their independent certified public
accountants.
(f) Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, in which
full and correct entries shall be made of all financial
transactions and the assets and business of the Parent and each
such Subsidiary sufficient to permit the preparation of financial
statements in accordance with GAAP.
(g) Maintenance of Properties, Etc. Maintain and
preserve, and cause each of its Subsidiaries to maintain and
preserve, all of its properties that are used or useful in the
conduct of its business in good working order and condition,
ordinary wear and tear excepted.
(h) Transactions with Affiliates. Conduct, and cause each
of its Subsidiaries to conduct, all transactions otherwise
permitted under the Loan Documents with any of their Affiliates
(other than any such transactions between Loan Parties or
wholly-owned Subsidiaries of Loan Parties) on terms that are fair
and reasonable and no less favorable than it would obtain in a
comparable arm's-length transaction with a Person not an
Affiliate.
45
(i) Pari Passu ranking. Each Borrower shall procure that
its obligations under the Loan Documents will rank at least pari
passu with all its other present and future unsecured and
unsubordinated obligations, except for obligations which are
mandatorily preferred by law applying to insurance companies
generally.
SECTION 5.02. Negative Covenants. So long as any Advance
or any other obligation of any Loan Party under any Loan Document shall
remain unpaid, or any Lender shall have any Commitment hereunder, Parent
will not, at any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any Lien on or with respect to any of its
properties of any character (including, without limitation,
accounts) whether now owned or hereafter acquired, or assign or
permit any of its Subsidiaries to assign, any accounts or other
right to receive income, except:
(i) Liens created under the Loan Documents or in
respect of the Five-Year Credit Facility (provided that
all obligations of the Loan Parties under all of the
foregoing shall be ratably secured);
(ii) Permitted Liens;
(iii) Liens described on Schedule 5.02(a) hereto;
(iv) purchase money Liens upon or in real
property or equipment acquired or held by the Parent or
any of its Subsidiaries in the ordinary course of
business to secure the purchase price of such property or
equipment or to secure Debt incurred solely for the
purpose of financing the acquisition, construction or
improvement of any such property or equipment to be
subject to such Liens, or Liens existing on any such
property or equipment at the time of acquisition or
within 180 days following such acquisition (other than
any such Liens created in contemplation of such
acquisition that do not secure the purchase price), or
extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount; provided,
however, that no such Lien shall extend to or cover any
property other than the property or equipment being
acquired, constructed or improved, and no such extension,
renewal or replacement shall extend to or cover any
property not theretofore subject to the Lien being
extended, renewed or replaced;
(v) Liens arising in connection with Capitalized
Leases; provided that no such Lien shall extend to or
cover any assets other than the assets subject to such
Capitalized Leases;
(vi) (A) any Lien existing on any asset of any
Person at the time such Person becomes a Subsidiary and
not created in contemplation of such event, (B) any Lien
on any asset of any Person existing at the time such
Person is merged or consolidated with or into the Parent
or any of it Subsidiaries in accordance with Section
5.02(c) and not created in contemplation of such event
46
and (C) any Lien existing on any asset prior to the
acquisition thereof by the Parent or any of its Subsidiaries
and not created in contemplation of such acquisition;
(vii) Liens securing obligations under credit
default swap transactions determined by reference to, or
Contingent Obligations in respect of, Debt issued by the
Parent or one of its Subsidiaries; such Debt not to
exceed an aggregate principal amount of $550,000,000;
(viii) Liens arising in the ordinary course of
its business which (A) do not secure Debt and (B) do not
in the aggregate materially detract from the value of its
assets or materially impair the use thereof in the
operation of its business;
(ix) Liens on cash and Approved Investments
securing Hedge Agreements arising in the ordinary course of
business;
(x) other Liens securing Debt or other
obligations outstanding in an aggregate principal or face
amount not to exceed at any time 5% of Consolidated Net
Worth;
(xi) Liens consisting of deposits made by the
Parent or any insurance Subsidiary with any insurance
regulatory authority or other statutory Liens or Liens or
claims imposed or required by applicable insurance law or
regulation against the assets of the Parent or any
insurance Subsidiary, in each case in favor of
policyholders of the Parent or such insurance Subsidiary
or an insurance regulatory authority and in the ordinary
course of the Parent's or such insurance Subsidiary's
business;
(xii) Liens on Investments and cash balances of
the Parent or any insurance Subsidiary (other than
capital stock of any Subsidiary) securing obligations of
the Parent 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 for the benefit of cedents to
secure reinsurance recoverables owed to them by the
Parent or any insurance Subsidiary;
(xiii) the replacement, extension or renewal of
any Lien permitted by clause (iii) or (vi) above upon or
in the same property theretofore subject thereto or the
replacement, extension or renewal (without increase in
the amount (other than in respect of fees, expenses and
premiums, if any) or change in any direct or contingent
obligor) of the Debt secured thereby;
(xiv) Liens securing obligations owed by any
Loan Party to any other Loan Party or owed by any
Subsidiary of the Parent (other than a Loan Party) to the
Parent or any other Subsidiary;
(xv) Liens incurred in the ordinary course of
business in favor of financial intermediaries and clearing
agents pending clearance of payments for
47
investment or in the nature of set-off, banker's lien or
similar rights as to deposit accounts or other funds;
(xvi) judgment or judicial attachment Liens,
provided that the enforcement of such Liens is effectively
stayed; and
(xvii) Liens arising in connection with
Securitization Transactions; provided that the aggregate
principal amount of the investment or claim held at any
time by all purchasers, assignees or other transferees of
(or of interests in) receivables and other rights to
payment in all Securitization Transactions shall not
exceed U.S.$250,000,000.
(b) Change in Nature of Business. Make any material
change in the nature of the business of the Parent and its
Subsidiaries, taken as a whole, as carried on at the date hereof.
(c) Mergers, Etc. Merge into or consolidate with any
Person or permit any Person to merge into it, or permit any of its
Subsidiaries to do so, except that:
(i) any Subsidiary of the Parent may merge into
or consolidate with any other Subsidiary of the Parent,
provided that, in the case of any such merger or
consolidation, the Person formed by such merger or
consolidation shall be a wholly owned Subsidiary of the
Parent, provided further that, in the case of any such
merger or consolidation to which a Borrower is a party,
the Person formed by such merger or consolidation shall
be such Borrower;
(ii) any Subsidiary of any Borrower may merge
into or consolidate with any other Person or permit any
other Person to merge into or consolidate with it;
provided that the Person surviving such merger shall be a
wholly owned Subsidiary of such Borrower;
(iii) in connection with any sale or other
disposition permitted under Section 5.02(d), any
Subsidiary of the Parent may merge into or consolidate
with any other Person or permit any other Person to merge
into or consolidate with it; and
(iv) the Parent or any other Borrower may merge
into or consolidate with any other Person; provided that,
in the case of any such merger or consolidation, the
Person formed by such merger or consolidation shall be
the Parent or such Borrower, as the case may be;
provided, however, that in each case, immediately after giving
effect thereto, no event shall occur and be continuing that
constitutes a Default.
(d) Sales, Etc., of Assets. Sell, lease, transfer or
otherwise dispose of or permit any other Borrower to sell, lease,
transfer or otherwise dispose of, all or
48
substantially all of its assets (excluding sales of investment
securities in the ordinary course of business).
(e) Restricted Payments. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for value
any of its Equity Interests now or hereafter outstanding, return
any capital to its stockholders, partners or members (or the
equivalent Persons thereof) as such, make any distribution of
assets, Equity Interests, obligations or securities to its
stockholders, partners or members (or the equivalent Persons
thereof) as such or issue or sell any Equity Interests or accept
any capital contributions, or permit any of its Subsidiaries to do
any of the foregoing, or permit any of its Subsidiaries to
purchase, redeem, retire, defease or otherwise acquire for value
any Equity Interests in the Parent or to issue or sell any Equity
Interests therein, if in any case referred to above, a Default
shall have occurred and be continuing at the time of such action
or would result therefrom.
(f) Accounting Changes. Make or permit, or permit any
of its Subsidiaries to make or permit, any change in accounting
policies or reporting practices, except as permitted by GAAP.
SECTION 5.03. Reporting Requirements. So long as any
Advance or any other obligation of any Loan Party under any Loan Document
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Parent will furnish to the Agents and the Lenders:
(a) Default Notice. As soon as possible and in any event
within two days after the occurrence of each Default or any event,
development or occurrence reasonably likely to have a Material
Adverse Effect continuing on the date of such statement, a
statement of the chief financial officer of the Parent setting
forth details of such Default, event, development or occurrence
and the action that the Parent or the applicable Subsidiary has
taken and proposes to take with respect thereto.
(b) Annual Financials. (i) As soon as available and in
any event within 90 days after the end of each Fiscal Year, a copy
of the annual Consolidated audit report for such year for the
Parent and its Subsidiaries, including therein a Consolidated
balance sheet of the Parent and its Subsidiaries as of the end of
such Fiscal Year and Consolidated statements of income and cash
flows of the Parent and its Subsidiaries for such Fiscal Year, all
reported on in a manner reasonably acceptable to the Securities
and Exchange Commission in each case and accompanied by an opinion
of PricewaterhouseCoopers LLP or other independent public
accountants of recognized standing reasonably acceptable to the
Required Lenders, together with (i) a certificate of the Chief
Financial Officer or Chief Accounting Officer of the Parent
stating that no Default has occurred and is continuing, or if a
Default has occurred and is continuing, a statement as to the
nature thereof and the action that the Parent has taken a proposes
to take with respect thereto, and (ii) a schedule in form
reasonably satisfactory to the Administrative Agent of the
computations used by the Parent in determining, as of the end of
such Fiscal Year, compliance with the covenants contained in
Section 5.04.
49
(ii) As soon as available and in any event within 120
days after the end of each Fiscal Year, a copy of the annual
Consolidated audit report for such year for each Subsidiary
Guarantor and its Subsidiaries, including therein a Consolidated
balance sheet of such Subsidiary Guarantor and its Subsidiaries as
of the end of such Fiscal Year and a Consolidated statement of
income and a Consolidated statement of cash flows of such
Subsidiary Guarantor and its Subsidiaries for such Fiscal Year, in
each case accompanied by an opinion acceptable to the Required
Lenders of PricewaterhouseCoopers LLP or other independent public
accountants of recognized standing acceptable to the Required
Lenders.
(c) Quarterly Financials. As soon as available and in any
event within 45 days after the end of each of the first three
quarters of each Fiscal Year, Consolidated balance sheets of the
Parent and its Subsidiaries as of the end of such quarter and
Consolidated statements of income and a Consolidated statement of
cash flows of the Parent and its Subsidiaries for the period
commencing at the end of the previous fiscal quarter and ending
with the end of such fiscal quarter and Consolidated statements of
income and a Consolidated statement of cash flows of the Parent
and its Subsidiaries for the period commencing at the end of the
previous Fiscal Year and ending with the end of such quarter,
setting forth in each case in comparative form the corresponding
figures for the corresponding date or period of the preceding
Fiscal Year, all in reasonable detail and duly certified (subject
to the absence of footnotes and normal year-end audit adjustments)
by the Chief Financial Officer or Chief Accounting Officer of the
Parent as having been prepared in accordance with GAAP, together
with (i) a certificate of said officer stating that no Default has
occurred and is continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and the action
that the Parent has taken and proposes to take with respect
thereto and (ii) a schedule in form reasonably satisfactory to the
Administrative Agent of the computations used by the Parent in
determining compliance with the covenants contained in Section
5.04.
(d) Litigation. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and
proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting any Loan Party or any of its Subsidiaries of
the type described in Section 4.01(f).
(e) Securities Reports. Promptly after the sending or
filing thereof, copies of all proxy statements, financial
statements and reports that the Parent sends to its stockholders
generally, and copies of all regular, periodic and special
reports, and all registration statements, that any Loan Party or
any of its Subsidiaries files with the Securities and Exchange
Commission or any governmental authority that may be substituted
therefor, or with any national securities exchange.
(f) ERISA. (i) ERISA Events. Promptly and in any event
within 10 days after any Loan Party or any ERISA Affiliate
institutes any steps to terminate any Pension Plan or becomes
aware of the institution of any steps or any threat by the PBGC to
terminate any Pension Plan, or the failure to make a required
contribution to any Pension Plan if such failure is sufficient to
give rise to a lien under section 302(f) of ERISA, or
50
the taking of any action with respect to a Pension Plan which
could result in the requirement that any Loan Party or any ERISA
Affiliate furnish a bond or other security to the PBGC or such
Pension Plan, or the occurrence of any event with respect to any
Pension Plan which could result in any Loan Party or any ERISA
Affiliate incurring any material liability, fine or penalty, or
any material increase in the contingent liability of any Loan
Party or any ERISA Affiliate with respect to any post-retirement
Welfare Plan benefit, notice thereof and copies of all
documentation relating thereto.
(ii) Plan Annual Reports. Promptly upon request of any
Agent or any Lender, copies of each Schedule B (Actuarial Information)
to the annual report (Form 5500 Series) with respect to each Pension
Plan.
(iii) Multiemployer Plan Notices. Promptly and in any
event within 15 Business Days after receipt thereof by any Loan
Party or any ERISA Affiliate from the sponsor of a Multiemployer
Plan, copies of each notice concerning (A) the imposition of
Withdrawal Liability by any such Multiemployer Plan, (B) the
reorganization or termination, within the meaning of Title IV of
ERISA, of any such Multiemployer Plan or (C) the amount of
liability incurred, or that may be incurred, by such Loan Party or
any ERISA Affiliate in connection with any event described in
clause (A) or (B); provided, however, that such notice and
documentation shall not be required to be provided (except at the
specific request of any Agent or Lender, in which case such notice
and documentation shall be promptly provided following such
request) if such condition or event is not reasonably expected to
result in any Loan Party or any ERISA Affiliate incurring any
material liability, fine, or penalty.
(g) Statutory Statements. As soon as available and in any
event within 20 days after submission, each statutory statement of
the Loan Parties (or any of them) in the form submitted to The
Insurance Division of the Office of Registrar of Companies of
Bermuda.
(h) Regulatory Notices, Etc. Promptly after any
Responsible Officer of the Parent obtains knowledge thereof, (i) a
copy of any notice from the Bermuda Minister of Finance or the
Registrar of Companies or any other person of the revocation, the
suspension or the placing of any restriction or condition on the
registration as an insurer of any Borrower under the Bermuda
Insurance Act 1978 (and related regulations) or of the institution
of any proceeding or investigation which could result in any such
revocation, suspension or placing of such a restriction or
condition, (ii) copies of any correspondence by, to or concerning
any Loan Party relating to an investigation conducted by the
Bermuda Minister of Finance, whether pursuant to Section 132 of
the Bermuda Companies Act 1981 (and related regulations) or
otherwise and (iii) a copy of any notice of or requesting or
otherwise relating to the winding-up or any similar proceeding of
or with respect to any Loan Party.
(i) Other Information. Such other information respecting
the business, condition (financial or otherwise), operations,
performance, properties or prospects of any Loan Party or any of
its Subsidiaries as any Agent, or any Lender through the
Administrative Agent, may from time to time reasonably request.
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SECTION 5.04. Financial Covenants. So long as any Advance
or any other obligation of any Loan Party under any Loan Document shall
remain unpaid or any Lender shall have any Commitment hereunder, the Parent
will:
(a) Adjusted Consolidated Debt to Total Capitalization
Ratio. Maintain at all times a ratio of Adjusted Consolidated Debt to
Total Capitalization of not more than 0.35 to 1.
(b) Consolidated Net Worth. Maintain at all times
Consolidated Net Worth in an amount equal to the sum of (i)
$3,600,000,000 plus (ii) 25% of Consolidated Net Income for each
fiscal quarter of the Parent ending on and after March 31, 2000
for which such Consolidated Net Income is positive.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) (i) any Borrower shall fail to pay any principal of
any Advance when the same shall become due and payable or (ii) any
Borrower shall fail to pay any interest on any Advance, or any
Loan Party shall fail to make any other payment under any Loan
Document, in each case under this clause (ii) within five Business
Days after the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party
(or any of its officers) under or in connection with any Loan
Document shall prove to have been incorrect in any material
respect when made; or
(c) any Borrower shall fail to perform or observe any
term, covenant or agreement contained in Section 2.14, 5.01(d)
(with respect to the Parent) or (e), 5.02 or 5.04; or
(d) any Loan Party shall fail to perform or observe any
other term, covenant or agreement contained in any Loan Document
on its part to be performed or observed if such failure shall
remain unremedied for 30 days after the earlier of the date on
which (i) a Responsible Officer becomes aware of such failure or
(ii) written notice thereof shall have been given to such Loan
Party by any Agent or any Lender; or
(e) the Parent or any of its Subsidiaries shall fail to
pay any Material Financial Obligation (but excluding Debt
outstanding hereunder) of the Parent or such Subsidiary (as the
case may be), when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable
grace period, if any, specified in the agreement or instrument
relating to such Material Financial Obligation; or any other event
shall
52
occur or condition shall exist under any agreement or instrument
relating to any such Material Financial Obligation and shall
continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the
maturity of such Material Financial Obligation or otherwise to
cause, or to permit the holder thereof to cause, such Material
Financial Obligation to mature; or any such Material Financial
Obligation shall be declared to be due and payable or required to
be prepaid or redeemed (other than by a regularly scheduled
required prepayment or redemption), purchased or defeased, or an
offer to prepay, redeem, purchase or defease such Material
Financial Obligation shall be required to be made, in each case
prior to the stated maturity thereof; or
(f) any Loan Party or any Significant Subsidiary shall
generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against any Loan Party or
any Significant Subsidiary seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted
against it (but not instituted by it) that is being diligently
contested by it in good faith, either such proceeding shall remain
undismissed or unstayed for a period of 30 days or any of the
actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or
any substantial part of its property) shall occur; or any Loan
Party or any Significant Subsidiary shall take any corporate
action to authorize any of the actions set forth above in this
subsection (f); or
(g) any final judgment or order for the payment of money
in excess of $100,000,000 shall be rendered against any Loan Party
or any of its Subsidiaries and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect;
or
(h) any non-monetary judgment or order shall be rendered
against any Loan Party or any of its Subsidiaries that could be
reasonably likely to have a Material Adverse Effect, and there
shall be any period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
(i) any provision of any Loan Document after delivery
thereof pursuant to Section 3.01 shall for any reason cease to be
valid and binding on or enforceable against any Loan Party party
to it (other than as a result of a transaction permitted
hereunder), or any such Loan Party shall so state in writing; or
(j) a Change of Control shall occur; or
53
(k) Any Loan Party or any ERISA Affiliate shall incur or
shall be reasonably expected to incur liability in excess of
$25,000,000 in the aggregate with respect to any Pension Plan or
any Multiemployer Plan in connection with the occurrence of any of
the following events or existence of any of the following
conditions:
(i) Institution of any steps by any Loan Party,
any ERISA Affiliate or any other Person, including,
without limitation, the PBGC to terminate a Pension Plan
if as a result of such termination a Loan Party or any
ERISA Affiliate could be required to make a contribution
to such Pension Plan, or could incur a liability or
obligation;
(ii) A contribution failure occurs with respect
to any Pension Plan sufficient to give rise to a lien
under section 302(f) of ERISA; or
(iii) Any condition shall exist or event shall
occur with respect to a Pension Plan that is reasonably
expected to result in any Loan Party or any ERISA
Affiliate being required to furnish a bond or security to
the PBGC or such Pension Plan, or incurring a liability
or obligation.
(l) Any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has
incurred Withdrawal Liability to such Multiemployer Plan; or
(m) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, and as a result of such reorganization or termination
the aggregate annual contributions of the Loan Parties and the ERISA
Affiliates to all Multiemployer Plans that are then in reorganization or
being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs;
then, and in any such event, the Administrative Agent (i) shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrowers, declare the Commitments of each Lender and the obligation of
each Lender to make Advances to be terminated, whereupon the same shall
forthwith terminate, and/or (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrowers, declare the
Notes, all interest thereon and all other amounts payable under this
Agreement and the other Loan Documents to be forthwith due and payable,
whereupon the Notes, all such interest and all such amounts shall become
and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrowers; provided, however, that in the event of an actual or deemed
entry of an order for relief with respect to any Borrower under the Federal
Bankruptcy Code, (x) the Commitments of each Lender and the obligation of
each Lender to make Advances shall automatically be terminated and (y) the
Notes, all such interest and all such amounts shall automatically become
and be due and payable, without presentment, demand, protest or any notice
of any kind, all of which are hereby expressly waived by the Borrowers.
54
ARTICLE VII
THE GUARANTY
SECTION 7.01. The Guaranty. (a) Each Guarantor hereby
jointly and severally, unconditionally, absolutely and irrevocably
guarantees the full and punctual payment (whether at stated maturity, upon
acceleration or otherwise) of all amounts payable by each of the other
Borrowers under the Loan Documents including, without limitation, the
principal of and interest on each Note issued by such other Borrowers
pursuant to this Agreement. Upon failure by a Borrower to pay punctually
any such amount, each other Guarantor agrees to pay forthwith on demand the
amount not so paid at the place and in the manner specified in this
Agreement.
(b) Each Guarantor (other than the Parent), and by its
acceptance of this Guaranty, the Administrative Agent and each other
Lender, hereby confirms that it is the intention of all such Persons that
this Guaranty and the obligations of each Guarantor hereunder not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer
Act or any similar foreign, federal or state law to the extent applicable
to this Guaranty and the obligations of each Guarantor (other than the
Parent) hereunder. To effectuate the foregoing intention, the
Administrative Agent, the other Lenders and the Guarantors hereby
irrevocably agree that the obligations of each Guarantor (other than the
Parent) under this Article VII at any time shall be limited to the maximum
amount as will result in the obligations of such Guarantor under this
Guaranty not constituting a fraudulent transfer or conveyance.
SECTION 7.02. Guaranty Unconditional. The obligations of
each Guarantor under this Article VII 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 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;
(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 insolvency, bankruptcy,
reorganization 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, any Lender or any
55
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 the
principal of or interest on any Note or any other amount payable
under any of the Loan Documents; or
(vii) any other act or omission to act or delay of any
kind by any obligor, the Administrative Agent, any Lender or any
other corporation or person or any other circumstance whatsoever
which might, but for the provisions of this paragraph, constitute
a legal or equitable discharge of or defense to a Guarantor's
obligations under this Article VII.
SECTION 7.03. Discharge Only upon Payment in Full;
Reinstatement in Certain Circumstances. Each Guarantor's obligations under
this Article VII shall remain in full force and effect until the
Commitments shall have terminated and the principal of and interest on the
Notes and all other amounts payable by the other Borrowers under the Loan
Documents shall have been paid in full. If at any time any payment of the
principal of or interest on any Note or any other amount payable by a
Borrower under the Loan Documents is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of
such Borrower or otherwise, each Guarantor's obligations under this Article
VII with respect to such payment shall be reinstated as though such payment
had been due but not made at such time.
SECTION 7.04. Waiver by the Guarantors. 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.
SECTION 7.05. Subrogation. Each Guarantor hereby
unconditionally and irrevocably agrees not to exercise any rights that it
may now have or hereafter acquire against any other Borrower, any other
Loan Party or any other insider guarantor that arise 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,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim
or remedy of any Lender against any other Borrower, any other Loan Party or
any other insider guarantor or any collateral, whether or not such claim,
remedy or right arises in equity or under contract, statute or common law,
including, without limitation, the right to take or receive from any other
Borrower, any other Loan 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 amounts payable under this Guaranty shall have been paid in full
in cash, and the Commitments 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 latest of (a) the payment in
full in cash of all amounts payable under this Guaranty, and (b) the
Termination 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
56
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 any Lender 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 Termination Date shall have
occurred, the Lenders 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 7.06. Stay of Acceleration. If acceleration of
the time for payment of any amount payable by any Borrower under any of the
Loan Documents is stayed upon the insolvency, bankruptcy or reorganization
of such Borrower, all such amounts otherwise subject to acceleration under
the terms of this Agreement shall nonetheless by payable by the Guarantors
under this Article VII forthwith on demand by the Administrative Agent made
at the request of the requisite proportion of the Lenders.
SECTION 7.07. Continuing Guaranty; Assignments. This
Guaranty is a continuing guaranty and shall (a) remain in full force and
effect until the latest of (i) the payment in full in cash of all amounts
payable under this Guaranty and (ii) the Termination Date, (b) be binding
upon each Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Lenders 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 (including, without limitation, all or any portion of its
Commitments, the Advances owing to it and the Note or Notes held by it) 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 9.07.
ARTICLE VIII
THE AGENTS
SECTION 8.01. Authorization and Action. Each Lender (in
its capacity as a Lender) hereby appoints and authorizes each Agent to take
such action as agent on its behalf and to exercise such powers and
discretion under this Agreement and the other Loan Documents as are
delegated to such Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto. As to any
matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Notes), no Agent shall
be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in
so acting or refraining from acting) upon the instructions of the Required
Lenders or all the Lenders where unanimity is required, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that
57
no Agent shall be required to take any action that exposes such Agent to
personal liability or that is contrary to this Agreement or applicable law.
Each Agent agrees to give to each Lender prompt notice of each notice given
to it by any Borrower pursuant to the terms of this Agreement.
SECTION 8.02. Agents' Reliance, Etc. Neither any Agent
nor any of their respective directors, officers, agents or employees shall
be liable for any action taken or omitted to be taken by it or them under
or in connection with the Loan Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of
the foregoing, each Agent: (a) may consult with legal counsel (including
counsel for any Loan Party), independent public accountants and other
experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of
such counsel, accountants or experts; (b) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for
any statements, warranties or representations (whether written or oral)
made in or in connection with the Loan Documents; (c) shall not have any
duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of any Loan Document on the part of
any Loan Party or to inspect the property (including the books and records)
of any Loan Party; (d) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, any Loan
Document or any other instrument or document furnished pursuant thereto;
and (e) shall incur no liability under or in respect of any Loan Document
by acting upon any notice, consent, certificate or other instrument or
writing (which may be by telegram or telecopy) reasonably believed by it to
be genuine and signed or sent by the proper party or parties.
SECTION 8.03. MGT and Affiliates. With respect to its WC
Commitments, the Committed Advances made by it and the Committed Notes
issued to it, MGT shall have the same rights and powers under the Loan
Documents as any other Lender and may exercise the same as though it were
not an Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include MGT in its individual capacity. MGT and its
affiliates may accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from and generally
engage in any kind of business with, any Loan Party, any of its
Subsidiaries and any Person that may do business with or own securities of
any Loan Party or any such Subsidiary, all as if MGT were not Agent and
without any duty to account therefor to the Lenders.
SECTION 8.04. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon any Agent
or any other Lender and based on the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon any Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement.
58
SECTION 8.05. Indemnification. (a) Each Lender severally
agrees to indemnify each Agent (to the extent not promptly reimbursed by
the Borrowers) from and against such Lender's ratable share (determined as
provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against such Agent in any way relating to or arising out of the
Loan Documents or any action taken or omitted by such Agent under the Loan
Documents; provided, however, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
such Agent's gross negligence or willful misconduct. Without limitation of
the foregoing, each Lender agrees to reimburse each Agent promptly upon
demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrowers under
Section 9.04, to the extent that such Agent is not promptly reimbursed for
such costs and expenses by the Borrowers.
(b) For purposes of this Section 8.05, the Lenders'
respective ratable shares of any amount shall be determined, at any time,
according to the sum of (i) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lenders and (ii) their
respective Unused WC Commitments at such time. The failure of any Lender to
reimburse any Agent promptly upon demand for its ratable share of any
amount required to be paid by the Lenders to such Agent as provided herein
shall not relieve any other Lender of its obligation hereunder to reimburse
such Agent for its ratable share of such amount, but no Lender shall be
responsible for the failure of any other Lender to reimburse such Agent for
such other Lender's ratable share of such amount. Without prejudice to the
survival of any other agreement of any Lender hereunder, the agreement and
obligations of each Lender contained in this Section 8.05 shall survive the
payment in full of principal, interest and all other amounts payable
hereunder and under the other Loan Documents.
SECTION 8.06. Successor Agents. Any Agent may resign at
any time by giving written notice thereof to the Lenders and the Parent and
may be removed at any time with or without cause by the Required Lenders.
Upon any such resignation or removal, the Required Lenders shall have the
right to appoint a successor Agent, subject (so long as no Event of Default
exists) to the consent of the Parent (which consent shall not be
unreasonably withheld). If no successor Agent shall have been so appointed
by the Required Lenders, and shall have accepted such appointment, within
30 days after the retiring Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Agent, then the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent, which shall be a
commercial bank organized under the laws of the United States or of any
State thereof and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent such successor Agent shall succeed to and become vested
with all the rights, powers, discretion, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations under the Loan Documents. If within 45 days after written
notice is given of the retiring Agent's resignation or removal under this
Section 8.06 no successor Agent shall have been appointed and shall have
accepted such appointment, then on such 45th day (i) the retiring Agent's
resignation or removal shall become effective, (ii) the retiring Agent
shall thereupon be discharged from its duties and obligations under the
Loan Documents and (iii) the Required Lenders shall thereafter perform all
duties of the retiring Agent under the Loan Documents until such time, if
any, as the Required Lenders appoint a successor Agent as
59
provided above. After any retiring Agent's resignation or removal hereunder
as Agent shall have become effective, the provisions of this Article VIII
shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of
any provision of this Agreement or the Notes or any other Loan Document,
nor consent to any departure by any Loan Party therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Required Lenders (and, in the case of an amendment, the Parent), and then
any such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no
amendment, waiver or consent shall, unless in writing and signed by all of
the Lenders (other than any Lender that is, at such time, a Defaulting
Lender), do any of the following at any time: (i) waive any of the
conditions specified in Section 3.01 or, in the case of the Initial
Extension of Credit, Section 3.02 or 3.03, as applicable, (ii) change the
number of Lenders or the percentage of (x) the WC Commitments or (y) the
aggregate unpaid principal amount of the Advances that, in each case, shall
be required for the Lenders or any of them to take any action hereunder,
(iii) reduce or limit the obligations of any Guarantor under Article VII or
release such Guarantor or otherwise limit such Guarantor's liability with
respect to the obligations owing to the Agents and the Lenders, (iv) amend
this Section 9.01 or any of the definitions herein that would have such
effect, (v) increase the WC Commitments of the Lenders or subject the
Lenders to any additional obligations, (vi) reduce the principal of, or
interest on, the Notes or any fees or other amounts payable hereunder,
(vii) postpone any date fixed for any payment of principal of, or interest
on, the Notes or any fees or other amounts payable hereunder, (viii) extend
the Termination Date (it being understood that an extension of the
Termination Date pursuant to Section 2.01(b) is not an amendment subject to
this Section 9.01) or (ix) limit the liability of any Loan Party under any
of the Loan Documents; provided further that no amendment, waiver or
consent shall, unless in writing and signed by an Agent in addition to the
Lenders required above to take such action, affect the rights or duties of
such Agent under this Agreement or the other Loan Documents.
SECTION 9.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic or telecopy communication) and mailed, telegraphed, telecopied
or delivered, if to any Borrower, at its address set forth below on the
signature pages hereof; if to any Lender, the address for notices specified
in its Administrative Questionnaire; and if to the Administrative Agent, at
its address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇; or, as to any party, at such other address as shall
be designated by such party in a written notice to the other parties. All
such notices and communications shall, when mailed, telegraphed or
telecopied, be effective when deposited in the mails, delivered to the
telegraph company or transmitted by telecopier, respectively, except that
notices and communications to any Agent pursuant to Article II, III or VIII
shall not be effective until received by such Agent. Manual delivery by
telecopier of an executed counterpart of any amendment or waiver of any
provision of this Agreement or the Notes or of any Exhibit
60
hereto to be executed and delivered hereunder shall be effective as
delivery of an original executed counterpart thereof.
SECTION 9.03. No Waiver; Remedies. No failure on the part
of any Lender or any Agent to exercise, and no delay in exercising, any
right hereunder or under any Note shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other
or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 9.04. Costs and Expenses. (a) The Borrowers agree
to pay on demand (i) all reasonable costs and expenses of the Agents in
connection with the preparation, execution, delivery, administration,
modification and amendment of the Loan Documents (including, without
limitation, (A) all due diligence, collateral review, syndication,
transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses and (B) the
reasonable fees and expenses of a single counsel for the Agents with
respect thereto, with respect to advising the Agents as to its rights and
responsibilities, or the perfection, protection or preservation of rights
or interests, under the Loan Documents, with respect to negotiations with
any Loan Party or with other creditors of any Loan Party or any of its
Subsidiaries arising out of any Default or any events or circumstances that
may give rise to a Default and with respect to presenting claims in or
otherwise participating in or monitoring any bankruptcy, insolvency or
other similar proceeding involving creditors' rights generally and any
proceeding ancillary thereto) and (ii) all reasonable costs and expenses of
each Agent and each Lender in connection with the enforcement of the Loan
Documents, whether in any action, suit or litigation, or any bankruptcy,
insolvency or other similar proceeding affecting creditors' rights
generally (including, without limitation, the reasonable fees and expenses
of counsel for the Administrative Agent and each Lender with respect
thereto).
(b) The Borrowers agree to indemnify and hold harmless
each Agent, each Lender and each of their Affiliates and their respective
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses, liabilities
and expenses (including, without limitation, reasonable fees and expenses
of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any
investigation, litigation or proceeding or preparation of a defense in
connection therewith) this Agreement, the actual or proposed use of the
proceeds of the Advances, the Loan Documents or any of the transactions
contemplated thereby, including, without limitation, any acquisition or
proposed acquisition by any Borrower or any of its Subsidiaries or
Affiliates, except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section
9.04(b) applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnified Party or any
Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated by the Loan Documents are consummated. Each of
the Borrowers also agrees not to assert any claim against any Agent, any
Lender or any of their Affiliates, or any of their respective officers,
directors, employees, attorneys and agents, on any theory of liability, for
special, indirect, consequential or
61
punitive damages arising out of or otherwise relating to the credit
facilities provided hereunder, the actual or proposed use of the proceeds
of the Advances or the Letters of Credit, the Loan Documents or any of the
transactions contemplated by the Loan Documents.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance or LIBO Rate Advance is made by any Borrower to or
for the account of a Lender other than on the last day of the Interest
Period for such Advance, as a result of a payment or Conversion pursuant to
Section 2.06, 2.09(b)(i) or 2.10(d), acceleration of the maturity of the
Notes pursuant to Section 6.01 or for any other reason, or if any Borrower
fails to make any payment or prepayment of an Advance for which a notice of
prepayment has been given or that is otherwise required to be made, whether
pursuant to Section 2.04, 2.06 or 6.01 or otherwise, the Borrowers agree,
within 10 days after demand by such Lender (with a copy of such demand to
the Administrative Agent), which demand shall include a calculation in
reasonable detail of the amount demanded, to pay to the Administrative
Agent for the account of such Lender any amounts required to compensate
such Lender for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment or Conversion or such failure
to pay or prepay, as the case may be, including, without limitation, any
loss (excluding loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance.
(d) Without prejudice to the survival of any other
agreement of any Loan Party hereunder or under any other Loan Document, the
agreements and obligations of the Borrowers contained in Sections 2.10 and
2.12 and this Section 9.04 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under any of the other
Loan Documents.
SECTION 9.05. Right of Set-off. Upon (a) the occurrence
and during the continuance of any Event of Default and (b) the making of
the request or the granting of the consent specified by Section 6.01 to
authorize the Administrative Agent to declare the Notes due and payable
pursuant to the provisions of Section 6.01, each Agent and each Lender and
each of their respective Affiliates is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and
otherwise apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time
owing by such Agent, such Lender or such Affiliate to or for the credit or
the account of any Borrower against any and all of the obligations of such
Borrower now or hereafter existing under the Loan Documents, irrespective
of whether such Agent or such Lender shall have made any demand under this
Agreement or such Note or Notes and although such obligations may be
unmatured. Each Agent and each Lender agrees promptly to notify each
Borrower after any such set-off and application; provided, however, that
the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Agent and each Lender and their
respective Affiliates under this Section are in addition to other rights
and remedies (including, without limitation, other rights of set-off) that
such Agent, such Lender and their respective Affiliates may have.
SECTION 9.06. Successors; Participations and Assignments.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that no Borrower may assign or otherwise transfer any
62
of its rights or obligations under this Agreement without the prior written
consent of all the Lenders.
(b) Any Lender may at any time grant to one or more banks
or other institutions (each a "Participant") participating interests in its
WC Commitment or any or all of its Advances. If a Lender grants any such
participating interest to a Participant, whether or not upon notice to the
Borrowers and the Administrative Agent, such Lender shall remain
responsible for the performance of its obligations hereunder, and the
Borrowers and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement pursuant to which any
Lender may grant such a participating interest shall provide that such
Lender shall retain the sole right and responsibility to enforce the
obligations of the Borrowers hereunder including, without limitation, the
right to approve any amendment, modification or waiver of any provision of
this Agreement; provided that such participation agreement may provide that
such Lender will not agree to any modification, amendment or waiver of this
Agreement described in clauses (i)-(ix) of Section 9.01 without the consent
of the Participant. The Borrower agrees that each Participant shall, to the
extent provided in its participation agreement, be entitled to the benefits
of Section's 2.10, 2.12 and 9.04(c) and with respect to its participating
interest. An assignment or other transfer which is not permitted by Section
9.06(c) or 9.06(d) shall be given effect for purposes of this Agreement
only to the extent of a participating interest granted in accordance with
this subsection.
(c) Any Lender may at any time assign to one or more
banks or other institutions (each an "Assignee") all, or a proportionate
part (equivalent to an initial Commitment of not less than $10,000,000) of
all, of its rights and obligations under this Agreement and its Note, and
such Assignee shall assume such rights and obligations, pursuant to an
Assignment and Assumption Agreement substantially in the form of Exhibit C
hereto signed by such Assignee and such transferor Lender, with (and
subject to) the subscribed consent of the Parent and the Administrative
Agent (which shall not be unreasonably withheld or delayed); provided that
(i) if an Assignee is an affiliate of such transferor Lender or was a
Lender immediately before such assignment, no such consent shall be
required, (ii) such assignment may, but need not, include rights of the
transferor Lender in respect of outstanding Competitive Bid Advances, (iii)
no such consent of the Parent shall be required if at the time an Event of
Default exists, (iv) such consent shall be deemed to have been given by the
Parent or the Administrative Agent, as the case may be, if it shall not
have responded to a written request for consent within five Business Days
of its receipt thereof, (v) neither the Parent nor any of its Subsidiaries
or Affiliates may be an Assignee and (vi) such assignment shall be
accompanied by a ratably equivalent assignment of the rights and
obligations of the transferor Lender (and its affiliates) under the
Five-Year Credit Facility. When such instrument has been signed and
delivered by the parties thereto and such Assignee has paid to such
transferor Lender the purchase price agreed between them, such Assignee
shall be a Lender party to this Agreement and shall have all the rights and
obligations of a Lender with a WC Commitment as set forth in such
instrument of assumption, and the transferor Lender shall be released from
its obligations hereunder to a corresponding extent, and no further consent
or action by any party shall be required. Upon the consummation of any
assignment pursuant to this subsection, the transferor Lender, the
Administrative Agent and the Borrowers shall make appropriate arrangements
so that, if required, new Notes are issued to the Assignee. In connection
with any such assignment,
63
the transferor Lender shall pay to the Administrative Agent an
administrative fee for processing such assignment in the amount of $2,500.
If the Assignee is not incorporated under the laws of the United States or
a State thereof, it shall deliver to the Borrowers and the Administrative
Agent certification as to exemption from deduction or withholding of United
States federal income taxes in accordance with Section 2.12(e).
(d) Any Lender may at any time assign all or any portion
of its rights under this Agreement and its Notes to a Federal Reserve Bank.
No such assignment shall release the transferor Lender from its obligations
hereunder.
(e) No Assignee, Participant or other transferee of any
Lender's rights shall be entitled to receive any greater payment under
Section 2.10 or 2.12 than such Lender would have been entitled to receive
with respect to the rights transferred, unless such transfer is made with
the Borrower's prior written consent or by reason of the provisions of
Section 2.10 requiring such Lender to designate a different Applicable
Lending Office under certain circumstances or at a time when the
circumstances giving rise to such greater payment did not exist.
SECTION 9.07. Designated Lenders. (a) Subject to the
provisions of this subsection (a), any Lender may at any time designate an
Eligible Designee to provide all or a portion of the Committed Advances and
Competitive Bid Advances to be made by such Lender pursuant to this
Agreement; provided that such designation shall not be effective unless the
Parent and the Administrative Agent consent thereto (which consents shall
not be unreasonably withheld). When a Lender and its Eligible Designee
shall have signed an agreement substantially in the form of Exhibit E
hereto (a "Designation Agreement") and the Parent and the Administrative
Agent shall have signed their respective consents thereto, such Eligible
Designee shall become a Designated Lender for purposes of this Agreement.
The Designating Lender shall thereafter have the right to permit such
Designated Lender to provide all or a portion of the Committed Advances and
Competitive Bid Advances to be made by such Designating Lender pursuant to
Section 2.01 or 2.03, and the making of such Advances or portion thereof
shall satisfy the obligation of the Designating Lender to the same extent,
and as if, such Advances or portion thereof were made by the Designating
Lender. As to any Advances or portion thereof made by it, each Designated
Lender shall have all the rights that a Lender making such Advances or
portion thereof would have had under this Agreement and otherwise; provided
that (x) its voting rights under this Agreement shall be exercised solely
by its Designating Lender and (y) its Designating Lender shall remain
solely responsible to the other parties hereto for the performance of such
Designated Lender's obligations under this Agreement, including its
obligations in respect of the Advances or portion thereof made by it. No
additional Note shall be required to evidence the Advances or portion
thereof made by a Designated Lender; and the Designating Lender shall be
deemed to hold its Notes as agent for its Designated Lender to the extent
of the Advances or portion thereof funded by such Designated Lender. Each
Designating Lender shall act as administrative agent for its Designated
Lender and give and receive notices and other communications on its behalf.
Any payments for the account of any Designated Lender shall be paid to its
Designating Lender as administrative agent for such Designated Lender and
neither the Borrower nor the Administrative Agent shall be responsible for
any Designating Lender's application of such payments. In addition, any
Designated Lender may, with notice to (but without the prior written
consent of) the Parent and
64
the Administrative Agent, (i) assign all or portions of its interest in any
Advances to its Designating Lender or to any financial institutions
consented to by the Parent and the Administrative Agent that provide
liquidity and/or credit facilities to or for the account of such Designated
Lender to support the funding of Advances or portions thereof made by it
and (ii) disclose on a confidential basis any non-public information
relating to its Advances or portions thereof to any rating agency,
commercial paper dealer or provider of any guarantee, surety, credit or
liquidity enhancement to such Designated Lender.
(b) Each party to this Agreement agrees that it will not
institute against, or join any other person in instituting against, any
Designated Lender any bankruptcy, insolvency, reorganization or other
similar proceeding under any federal or state bankruptcy or similar law,
for one year and a day after all outstanding senior indebtedness of such
Designated Lender is paid in full. The Designating Lender for each
Designated Lender agrees to indemnify, save, and hold harmless each other
party hereto for any loss, cost, damage and expense arising out of its
inability to institute any such proceeding against such Designated Lender.
This subsection (b) shall survive the termination of this Agreement.
SECTION 9.08. Execution in Counterparts. This Agreement
may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute
one and the same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be effective as
delivery of an original executed counterpart of this Agreement.
SECTION 9.09. Confidentiality. Neither any Agent nor any
Lender shall disclose any Confidential Information to any Person without
the consent of the Parent, other than (a) to such Agent's or such Lender's
Affiliates and their officers, directors, employees, agents and advisors
and to actual or prospective Assignees and Participants, and then only on a
confidential basis, (b) as required by any law, rule or regulation or
judicial process, (c) as requested or required by any state, Federal or
foreign authority or examiner regulating such Lender and (d) to any rating
agency when required by it, provided that, prior to any such disclosure,
such rating agency shall undertake to preserve the confidentiality of any
Confidential Information relating to the Loan Parties received by it from
such Lender.
SECTION 9.10. Jurisdiction, Etc. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or any of the other Loan Documents to
which it is a party, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard
and determined in any such New York State court or, to the extent permitted
by law, in such Federal court. Each of the parties hereto agrees that a
final judgment in any such action 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 shall affect any right
that any party may otherwise have to bring any action or proceeding
relating to this Agreement or any of the other Loan Documents in the courts
of any jurisdiction.
65
(b) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it
is a party in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
SECTION 9.11. Governing Law. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State
of New York.
SECTION 9.12. Waiver of Jury Trial. Each of the
Borrowers, the Agents and the Lenders irrevocably waives all right to trial
by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to any of the Loan
Documents, the Advances or the actions of any Agent or any Lender in the
negotiation, administration, performance or enforcement thereof.
SECTION 9.13. Nature of Borrowers' Obligations. Any
payment obligation of the Borrowers or the Loan Parties under Section 2.08,
2.10, 2.12 or 9.04 shall be the joint and several obligation of each
Borrower or Loan Party, as the case may be; provided that ACE Guaranty
shall be liable only for its appropriately allocable share of any such
obligation.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
ACE LIMITED
The Common Seal of ACE Limited was
hereunto affixed in the presence of:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------------
Director
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
Chief Financial Officer
ACE BERMUDA INSURANCE LTD.
The Common Seal of ACE Bermuda
Insurance Ltd. was hereunto affixed
in the presence of:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------------
Director
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
Director
TEMPEST REINSURANCE COMPANY
LIMITED
The Common Seal of Tempest Reinsurance
Company Limited was hereunto affixed
in the presence of:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------------
Director
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
Director
ACE INA HOLDINGS INC.
By:/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Title: Director
ACE GUARANTY RE INC.
By:/s/ ▇.▇. ▇▇▇▇▇
----------------------------------------
Title: President
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK,
as Administrative Agent and as Lender
By:/s/ ▇▇▇▇▇ ▇. Dell'Aquila
----------------------------------------
Title: Vice President
BANK OF AMERICA, N.A.,
as Co-Syndication Agent and as Lender
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Title: Vice President
THE CHASE MANHATTAN BANK,
as Co-Syndication Agent and as Lender
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Title: Vice President
ABN AMRO BANK N.V.
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Title: Authorized Signatory
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Title: Authorized Signatory
THE BANK OF NEW YORK
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Title: Assistant Vice President
BANK ONE, NA
By:/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Title: Commercial Banking Officer
BARCLAYS BANK PLC
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Title: Insurance Banking Director
CITIBANK, N.A.
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Title: Vice President
DEUTSCHE BANK AG NEW YORK
AND/OR CAYMAN ISLANDS
BRANCHES
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Title: Managing Director
By:/s/ ▇▇▇▇ ▇▇▇▇
--------------------------------------
Title: Director
FIRST UNION NATIONAL BANK
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Title: Vice President
FLEET NATIONAL BANK
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Title: Director
MELLON BANK, N.A.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Title: Vice President
ROYAL BANK OF CANADA
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Title: Senior Manager
THE BANK OF TOKYO-MITSUBISHI,
LIMITED
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Title: Attorney-In-Fact
BANQUE NATIONALE DE PARIS
By:/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Title: Vice President
By:/s/ Laurent Vanderzyppe
--------------------------------------
Title: Vice President
CREDIT LYONNAIS NEW YORK
BRANCH
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
Title: Vice President
LLOYDS TSB BANK PLC
By:/s/ Windsor ▇. ▇▇▇▇▇▇
--------------------------------------
Title: Director, Corporate Banking USA
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Title: Assistant Director
STATE STREET BANK AND TRUST
COMPANY
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Title: Vice President
PRICING SCHEDULE
Each of "Applicable Facility Fee Percentage" and
"Applicable Margin" means, for any day, the rate per annum set forth below
in the row opposite such term and in the column corresponding to the
Pricing Level and Usage that apply on such day:
Pricing Level Level I Level II Level III Level IV Level V Level VI
----------------------- ------- -------- --------- -------- ------- --------
Applicable Facility Fee 0.060% 0.070% 0.080% 0.110% 0.135% 0.185%
Percentage
Applicable Margin
Usage < 33% 0.140% 0.230% 0.270% 0.390% 0.615% 0.815%
Usage > 33% 0.190% 0.280% 0.370% 0.515% 0.740% 1.065%
-
For purposes of this Schedule, the following terms have the
following meanings, subject to the concluding paragraph of this Schedule:
"Level I Pricing" applies on any day on which the Borrower's
long-term debt is rated A+ or higher by S&P or A1 or higher by Moody's.
"Level II Pricing" applies on any day on which (i) the Borrower's
long-term debt is rated A or higher by S&P or A2 or higher by Moody's and
(ii) Level I Pricing does not apply.
"Level III Pricing" applies on any day on which (i) the Borrower's
long-term debt is rated A- or higher by S&P or A3 or higher by Moody's and
(ii) neither Level I Pricing nor Level II Pricing applies.
"Level IV Pricing" applies on any day on which (i) the Borrower's
long-term debt is rated BBB+ or higher by S&P and/or Baa1 or higher by
Moody's and (ii) none of Level I Pricing, Level II Pricing and Level III
Pricing applies.
"Level V Pricing" applies on any day on which (i) the Borrower's
long-term debt is rated BBB or higher by S&P or Baa2 or higher by Moody's
and (ii) none of Level I Pricing, Level II Pricing, Level III Pricing and
Level IV Pricing applies.
"Level VI Pricing" applies on any day if no other Pricing Level
applies on such day.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Pricing Level" refers to the determination of which of Level I,
Level II, Level III, Level IV, Level V or Level VI Pricing applies on any
day.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
The "Usage" applicable to any date is the percentage equivalent of
a fraction the numerator of which is the sum of the aggregate outstanding
principal amount of the Advances at such date and the denominator of which
is the aggregate amount of the WC Commitments at such date. If for any
reason any Advances remain outstanding following the termination of the WC
Commitments, Usage will be deemed to be more than 33%.
The credit ratings to be utilized for purposes of this Schedule
are those assigned to the senior unsecured long-term debt securities of the
Parent without third-party credit enhancement, and any rating assigned to
any other debt security of the Parent shall be disregarded. The ratings in
effect for any day are those in effect at the close of business on such
day.
In the case of split ratings from S&P and Moody's, the rating to
be used to determine the applicable Pricing Level is the higher of the two
(e.g., A+/A2 results in Level I Pricing); provided that if the split is
more than one full rating category, the intermediate (or higher of the two
intermediate ratings) will be used (e.g. A+/A3 results in Level II Pricing
and AA-/A3 results in Level I Pricing); and provided further that unless
the Parent's credit ratings qualify for at least Level V Pricing, no better
Pricing Level will be applicable.
Commitment Schedule
===========================================================================
Lender Commitment
===========================================================================
▇▇▇▇▇▇ Guaranty Trust Company of New York $57,142,858
Bank of America, N.A. $57,142,856
The Chase Manhattan Bank $57,142,856
ABN AMRO Bank N.V. $45,714,286
The Bank of New York $45,714,286
Bank One, NA $45,714,286
Barclays Bank Plc $45,714,286
Citibank, N.A. $45,714,286
Deutsche Bank AG New York and/or Cayman Islands $45,714,286
Branches
First Union National Bank $45,714,286
Fleet National Bank $45,714,286
Mellon Bank, N.A. $45,714,286
Royal Bank of Canada $45,714,286
The Bank of Tokyo-Mitsubishi, Limited $34,285,714
Banque Nationale de Paris $34,285,714
Credit Lyonnais New York Branch $34,285,714
Lloyds TSB Bank Plc $34,285,714
State Street Bank and Trust Company $34,285,714
Total $800,000,000
===========================================================================
Exhibit 4.01(b)
ACE Limited Group of Companies
as of March 1, 2000
Jurisdictions in which
Jurisdiction of Percentage Authorized and Type of
Name Organization Ownership Business
ACE Limited Cayman Islands publicly held Bermuda, holding company
ACE ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇% ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, insurance
Paget Reinsurance International Ltd Bermuda 100% Bermuda, reinsurance
ACE Capital Re International Ltd. Bermuda 100% Bermuda, insurance/reinsurance
ACE KRE Holdings Limited Barbados 100% Barbados, investment holding
ACE Capital Re USA Holdings Incorporated Delaware 100% Delaware, investment holding
ACE Capital Re Overseas Ltd. Bermuda 100% Bermuda, insurance/reinsurance
Lenders Residential Asset Company LLC Delaware 50% Del/MD/VA mtg. Originator
ACE Capital Mortgage Reinsurance New York 100% New York, mtg. guaranty
Company reinsurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC# 10021, NY)
ACE Capital Title Reinsurance Company New York 100% New York, title guaranty
(EI# 06-143264, NAIC# 50028, NY) reinsurance
ACE Capital Re Inc. New York 100% New York, reinsurance
intermediary
Oasis Investments Limited Bermuda 67% Bermuda, Investment Holding
ACE Capital Re Managers Ltd Bermuda 50% Bermuda, insurance management
ACE Insurance Management Limited Bermuda 100% Bermuda, general services
ACE European Markets Reinsurance Limited Ireland 100% Ireland, reinsurance
ACE European Markets Insurance Limited Ireland 100% Ireland, insurance
Corporate Officers & Directors Assurance Ltd. Bermuda 100% Bermuda, insurance
Tripar Partnership Bermuda 2% Bermuda, investment holding
Oasis Real Estate Company Ltd Bermuda 100% Bermuda, investment holding
Scarborough Property Holdings Ltd Bermuda 40% Bermuda, investment holding
Sovereign Risk Insurance Limited Bermuda 40.5% Bermuda, insurance agent
Tripar Partnership Bermuda 98% Bermuda, investment holding
ACE Realty Holdings Ltd Bermuda 100% Bermuda, investment holding
Oasis Personnel Limited Cayman Islands 100% Cayman Islands, general services
Jurisdictions in which
Jurisdiction of Percentage Authorized and Type of
Name Organization Ownership Business
Shipowners Insurance and Guaranty Co. Limited Bermuda 10% Series A Bermuda, insurance
8% Series B
Intrepid Re Holdings Limited Bermuda 100% Bermuda, holding
Intrepid Re Limited Bermuda 100% Bermuda, Reinsurance
ACE Global Markets Limited United Kingdom 100% UK, investment holding
ACE Group Holdings Limited United Kingdom 100% UK, investment holding
ACE Tarquin (Unlimited) United Kingdom 100% UK, investment holding
ACE Capital V Limited United Kingdom 100% UK, Lloyd's corporate member
ACE (CG) Limited United Kingdom 100% UK, investment holding
ACE Underwriting Agencies Limited United Kingdom 100% UK, Lloyd's managing agent
ACE Trustees Limited United Kingdom 100% UK, investment holding
ACE London Group Limited United Kingdom 100% UK, investment holding
ACE Capital Limited United Kingdom 100% UK, Lloyd's corporate member
ACE Capital III Limited United Kingdom 100% UK, Lloyd's corporate member
ACE Capital IV Limited United Kingdom 100% UK, Lloyd's corporate member
ACE London Holdings Limited United Kingdom 100% UK, investment holding
ACE Capital II Limited United Kingdom 100% UK, Lloyd's corporate member
ACE London Investments Limited United Kingdom 100% UK, investment holding
ACE London Aviation Limited United Kingdom 100% UK, Lloyd's managing agent
ACE London Underwriting Limited United Kingdom 100% UK, Lloyd's managing agent
ACE Underwriting Services Limited United Kingdom 100% UK, Lloyd's service company
AGM Underwriting Limited United Kingdom 100% __________________________
ACE London Services Limited United Kingdom 100% UK, service company
ACE Capital VI Limited United Kingdom 100% UK, Lloyd's corporate member
ACE UK Limited United Kingdom 77% UK, investment holding
ACE UK Holdings Limited United Kingdom 100% UK, investment holding
ACE (M) Limited United Kingdom 100% UK, dormant
ACE (ME) Limited United Kingdom 100% UK, dormant
ACE (MI) Limited United Kingdom 100% UK, dormant
ACE (MS) Limited United Kingdom 100% UK, dormant
ACESYS Limited United Kingdom 100% UK, dormant
ACE UK Underwriting Limited United Kingdom 100% Lloyd's managing agent
Underwriting Systems Limited United Kingdom 100% UK, dormant
ACE (PM) Limited United Kingdom 100% UK, investment holding
ACE UK Limited United Kingdom 23% UK, investment holding
ACE Services Ltd. Cayman Islands 100% Cayman Islands, general services
ACE US Holdings, Inc. USA (Delaware) 100% USA, consulting services
ACE Strategic Advisors Inc. USA (Delaware) 100% USA, investment holding
Jurisdictions in which
Jurisdiction of Percentage Authorized and Type of
Name Organization Ownership Business
ACE USA Inc. USA (Delaware) 100% USA, investment holding
CRC Creditor Resources Canada Limited Canada (British 60% Canada, warranties business
Columbia)
Industrial Excess & Surplus Insurance Brokers USA (California) 100% USA, dormant
Industrial Underwriters Insurance Co. USA (Texas) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC# 21075, TX)
▇▇▇▇ International Marketing (L), Inc. Malaysia 60% Malaysia, general services
Westchester Fire Insurance Company USA (New York) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC# 21121, NY)
Westchester Surplus Lines Insurance Co. USA (Georgia) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC# 10173, GA)
Westchester Specialty Services, Inc. USA (Florida) 100% USA, warranties
Westchester Specialty Insurance Services Inc. USA (Nevada) 100% USA, insurance services,
brokering, warranties
SCS Net LLC USA (Delaware) 60% USA, software development
Ameriguard Corporation USA (Ohio) 80% USA, insurance services
WDH Corporation USA (Ohio) 80% USA, insurance services
Dimension Services Corporation USA (Ohio) 80% USA, warranties
Dimension Holdings Inc. USA (Ohio) 80% USA, insurance services
CGA Group Limited Bermuda 10.71% Bermuda, investment holding
CGA Investment Management, Inc. USA (Delaware) 100% USA, investment
Commercial Guaranty Assurance Ltd. Bermuda 100% Bermuda, insurance
Oasis Insurance Services Ltd Bermuda 100% Bermuda, general services
Tempest Reinsurance Company Limited Bermuda 100% Bermuda, Puerto Rico,
reinsurance
▇▇▇▇▇▇▇▇ Services Limited Bermuda 100% Bermuda, general services
Oasis Investments Limited Bermuda 33% Bermuda, investment holding
Oasis US Inc. Delaware 100% USA, general services
St. ▇▇▇▇▇▇ Holdings Ltd Cayman Islands 10.71% Cayman Islands, investment
holding
St. ▇▇▇▇▇▇ Investments Ltd. Cayman Islands 100% Cayman Islands, investment
holding
ACE INA Holdings, Inc. USA (Delaware) 20% USA, investment holding
ACE Prime Holdings, Inc. USA (Delaware) 100% USA, investment holding
ACE INA Holdings, Inc. USA (Delaware) 80% USA, investment holding
ACE Seguros S.A. (Argentina) Argentina 99.9% Argentina, Insurance
INA Corporation USA (Pennsylvania) 100% USA, investment holding
Tempest Re USA, Inc. USA (Connecticut) 100% Connecticut, underwriting
manager
Jurisdictions in which
Name Jurisdiction of Percentage Authorized and Type of
Organization Ownership Business
ACE INA Properties Inc. USA (Delaware) 100% USA, holding company
Conference Facilities, Inc. USA (Pennsylvania) 100% USA, owns & operates corporate
facilities
INA Tax Benefits Reporting, Inc. USA (Delaware) 100% USA, tax info & 3d party
reporting
INA Financial Corporation USA (Delaware) 100% USA, investment holding
Brandywine Holdings Corporation USA (Delaware) 100% USA, holding company
Brandywine Run-Off Services, Inc. USA (Delaware) 100% USA, management company for
1792 company
ASSUREX Development Corporation USA (Ohio) 11.011% USA, provides loans to insurance
agents
International Surplus Adjusting USA (California) 100% USA, claims adjusting services
Services
Western Agency Management, Inc. USA (California) 100% USA, fire & casualty agent
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Company Pacific USA (Delaware) 100% USA, managing general agency
Coast
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Company Pacific USA (Illinois) 100% USA, managing general agency
Coast of Illinois
Century Indemnity Company USA (Pennsylvania) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #20710, PA)
Century Reinsurance Company USA (Pennsylvania) 100% USA, reinsurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #35130, PA)
ACE American Reinsurance Company USA (Pennsylvania) 100% USA, reinsurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC# 22705, PA)
Brandywine Reinsurance Company Belgium 100% Belgium, reinsurance
S.A.-N.V.
The 1792 Company USA (Delaware) 100% USA, (former underwriting
member of New York Insurance
Exchange)
Century International Reinsurance Bermuda 100% Bermuda, insurance &
Company Ltd. reinsurance
Brandywine International Brokers Bermuda 100% Bermuda, insurance broker
Ltd.
INA Holdings Corporation USA (Delaware) 100% USA, holding company
PDCN Legal Management Company, Inc. USA (Delaware) 100% USA, in-house law firm
Administrator
INA Reinsurance Company, Ltd. Bermuda 100% Bermuda, reinsurance
Jurisdictions in which
Jurisdiction of Percentage Authorized and Type of
Name Organization Ownership Business
ACE INA Financial Institution Solutions, USA (Delaware) 100% USA, flood plain determination
Inc. & other services to financial
institutions
ESIS, Inc. USA (California) 100% USA, markets risk management
programs
ACE INA Excess and Surplus Insurance USA (Georgia) 100% USA, excess & surplus lines
Services, Inc. (GA) broker
ACE INA Excess and Surplus Insurance USA (Pennsylvania) 100% USA, excess & surplus lines
Services, Inc. (PA) broker
NewMarkets Insurance Agency, Inc. USA (Delaware) 100% USA, managing general agency
ACE INA Excess and Surplus Insurance USA (California) 100% USA, excess & surplus lines
Services, Inc. (CA) broker
ACE INA Excess and Surplus Insurance USA (Illinois) 100% USA, excess & surplus lines
Services, Inc. (IL) broker
Excess and Surplus Insurance Services, Inc. USA (Texas) 100% USA, managing general agency
INAC Corp. USA (Delaware) 100% USA, premium finance company
INAC Corp. of California USA (California) 100% USA, premium finance company
Global Surety Network, Inc. USA (Delaware) 100% USA, management company &
underwriting services
Marketdyne International, Inc. USA (Delaware) 100% USA, marketing insurance
products
ACE INA Railroad Insurance Brokers, Inc. USA (California) 100% USA, reinsurance
Recovery Services International, Inc. USA (Delaware) 100% USA, subrogation, collection &
recovery services
RSI Health Care Recovery Inc. USA (Delaware) 100% USA, subrogation, collection &
recovery services
Jurisdictions in which
Jurisdiction of Percentage Authorized and Type of
Name Organization Ownership Business
Indemnity Insurance Company of North USA (Pennsylvania) 100% USA, Puerto Rico, USVI,
America insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC# 43575, PA)
ACE Indemnity Insurance Company USA (Pennsylvania) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #10030, PA)
Allied Insurance Company USA (California) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #36528,
CA)
ACE American Insurance Company USA (Pennsylvania) 100% USA, Korea, Puerto Rico, USVI,
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC# 22667, PA) Guam, insurance
Pacific Employers Insurance USA (Pennsylvania) 100% USA, USVI, insurance
Company
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC# 22748, PA)
ACE Insurance Company of USA (Texas) 100% USA, insurance
Texas
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #22721,
22920, TX)
Illinois Union Insurance USA (Illinois) 100% USA, surplus lines insurer
Company
(EI#▇▇-▇▇▇▇▇▇▇, NAIC #27960,
IL)
INAMAR Insurance Underwriting Agency, USA (New Jersey) 100% USA, insurance agency
Inc.
INAMAR Insurance Underwriting USA (Massachusetts) 100% USA, general agency
Agency of Massachusetts
INAMAR Insurance Underwriting USA (Texas) 100% USA, general agency
Agency of Texas
INAMAR Insurance Underwriting USA (Ohio) 100% USA, general agency
Agency, Inc. of Ohio
Insurance Company of North America USA (Pennsylvania) 100% USA, Guam, Northern Mariana
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #22713, PA) Islands, Philippines, Puerto Rico,
Taiwan, insurance
Bankers Standard Insurance Company USA (Pennsylvania) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #18279, PA)
Bankers Standard Fire and Marine USA (Pennsylvania) 100% USA, insurance
Company
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #20591, PA)
ACE Property and Casualty Insurance USA (Connecticut) 100% USA, Puerto Rico, insurance
Company
Jurisdictions in which
Jurisdiction of Percentage Authorized and Type of
Name Organization Ownership Business
(EI# 060237820, NAIC #20699, CT)
ACE Employers Insurance Company USA (Pennsylvania) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #38741, PA)
ACE Insurance Company of Ohio USA (Ohio) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #22764,
OH)
INA Surplus Insurance Company USA (Pennsylvania) 100% USA, reinsurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #42072, PA)
ACE Fire Underwriters Insurance USA (Pennsylvania) 100% USA, insurance
Company
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #20702, PA)
Atlantic Employers Insurance USA (New Jersey) 100% USA, insurance
Company
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #38938, NJ)
Cover-All Technologies, Inc. USA (Delaware) 7.41% USA, develop software products
for insurance industry
▇▇▇▇, Incorporated USA (Texas) 100% USA, general agency & attorney-
in-fact for CIGNA Lloyds
ACE American Lloyds Insurance USA (Texas) 100% USA, Lloyds Association
Company (Sponsored Lloyds
Association)
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #18511, TX)
ACE Insurance Company of Illinois USA (Illinois) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #22691, IL)
Jurisdictions in which
Jurisdiction of Percentage Authorized and Type of
Name Organization Ownership Business
ACE Insurance Company of the USA (Indiana) 100% USA, insurance
Midwest
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #26417, IN)
INAPRO, Inc. USA (Delaware) 100% USA, insurance management
services & underwriting
Reinsurance Solutions International, USA (Delaware) 50% USA, reinsurance intermediary
LLC
American Adjustment Company, Inc. USA (Delaware) 100% USA, run-off of automobile
guaranty loans
American Lenders Facilities, Inc. USA (California) 100% USA, collection & loan servicing
for third parties
ACE INA International Holdings, Ltd. USA (Delaware) 100% USA, international insurance &
financial holding company
ACE Synergy Insurance Berhad Malaysia 51% Malaysia, insurance
ACE Seguradora S.A. Macau 100% Macau, insurance
Chilena Consolidata Seguros Chile .65% Chile, insurance
Generales, S.A.
INACAN Holdings, Ltd. Canada 100% Canada, insurance holding
ACE INA Insurance (Canada) Canada 100% Canada, insurance & reinsurance
ACE Insurance Limited (S. Africa) South Africa 100% South Africa, insurance
Seguros CIGNA, S.A. Mexico 99.9% Mexico, insurance
ACE Insurance Limited (New New Zealand 100% New Zealand, insurance &
Zealand) reinsurance
Cover Direct, Inc. USA (Delaware) 100% Japan, direct marketing service
company
▇▇▇▇▇▇▇▇ ▇▇▇▇ Company Ltd. Bermuda 20% Bermuda, investment holding
ACE INA G.B. Holdings, Ltd. USA (Delaware) 100% Delaware, UK, insurance holding
Brandywine Reinsurance Co. (UK) United Kingdom 100% UK, reinsurance
Ltd
ACE INA Services U. K. Limited United Kingdom 100% UK, computer services for
affiliates
ACE INA UK Retirement Savings United Kingdom 100% UK, investment holding
Plan
Insurance Company of North United Kingdom 100% UK, Greece, insurance
America (U.K.) Ltd
INACAP Sociedad Anonima ▇▇▇▇▇▇▇▇▇ ▇▇▇% ▇▇▇▇▇▇▇▇▇, corporation
INACAP Reaseguros, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇% ▇▇▇▇▇▇▇▇▇, corporation
Anonima
Jurisdictions in which
Jurisdiction of Percentage Authorized and Type of
Name Organization Ownership Business
Century Inversiones, S.A. Panama 100% Panama, reinsurance
administrator
ACE INA de Venezuela Venezuela 100% Venezuela, reinsurance
Intermediaros de Reaseguros S A intermediary
ARABIA ACE Insurance Co. Limited E C Bahrain 25% Saudi Arabia, insurance
&reinsurance
ACE Insurance Limited (Australia) Australia 100% Australia, Pakistan, Thailand,
Solomon Islands, Vanuatu,
insurance & reinsurance
ACE Insurance Limited (Singapore) Singapore 100% Singapore, insurance
ACE INA Superannuation Pty. Australia 100% Australia, corporate trustee for
Limited CIGNA Australia superannuation
plan
ACE Seguros S.A. (Chile) Chile 99.13% Chile, insurance
ACE INA Overseas Insurance Co Ltd Bermuda 100% Bermuda, insurance &
reinsurance
ACE Insurance (Japan) Japan 100% Japan, insurance & reinsurance
ACE INA Marketing Group C.A. Venezuela 100% Venezuela, services & direct
marketing
ACE INA Overseas Holdings Inc. USA (Delaware) 100% Delaware, holding company
ACE Insurance S.A.-N.V. Belgium 100% Europe, insurance
ACE Insurance Company (Puerto Rico) Puerto Rico 100% Puerto Rico, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #30953, PR)
ACE Insurance Limited (Hong Kong) Hong Kong 100% Hong Kong, insurance
ACE INA Bermuda Ins Managers Ltd. Bermuda 100% Bermuda, management services
for non-affiliates
DELPANAMA S.A. Panama 100% Panama, holding company
INAMEX S.A. Mexico 100% Mexico, reinsurance broker
Maritime General Ins Company Ltd. Trinidad 8.06% Trinidad, insurance
AFIA Finance Corporation USA (Delaware) 100% Delaware, insurance holding
AFIA Sociedad Anonima Mexico 100% Mexico, service company
Jurisdictions in which
Jurisdiction of Percentage Authorized and Type of
Name Organization Ownership Business
AFIA Venezolana C.A. Venezuela 100% Venezuela, inactive claims &
settling agent
ACE ICNA - Italy Societa a Italy 100% Italy, legal representative for
Responsabilita Limitata CIGNA
Insurance Company of Europe,
S.A.-N.V.
ACE INA Thai Company Limited Thailand 55% Thailand, broker, surveyor &
claims settling agency
ACE Servicios, S.A. (Argentina) Argentina 100% Argentina, insurance holding
ESIS International Asesorias Chile 100% Chile, claims & settling agent
Limitada
Fire, Equity & General Ins Co. Ltd. Nigeria 6.25% Nigeria, insurance
INDI Servicios C. Ltda. Ecuador 100% Ecuador, claims & settling agent
Inversiones Continental S.A. de C.V. Honduras 1.29% Honduras, insurance holding
P.T. ACE INA Insurance (Indonesia) Indonesia 53.51% Indonesia, insurance
RIYAD Insurance Co. Ltd. Bermuda 80% Bermuda, insurance
▇▇▇▇▇▇ Private Ltd. Singapore 100% Singapore, management &
computer service bureau
AFIA (INA) Corporation Limited USA (Delaware) 100% Delaware, holding company
AFIA Unincorporated 60% Association for international
association insurance
AFIA (ACE) Corporation Limited USA (Delaware) 100% Delaware, holding company
AFIA Unincorporated 40% Association for international
association insurance
Compania Anonima de Seguros "▇▇▇▇▇" Venezuela 5.6% Venezuela, insurance
ACE Seguros S.A. (Colombia) Colombia 85.763% Colombia, insurance
INAVEN, C.A. "Venezuela" Venezuela 100% Venezuela, corporation
La Positiva Co Nacional de Seguros Peru 10.79% Peru, insurance
Sociedad Anonima
Seguros Azteca, S.A. Mexico 1.36% Mexico, insurance & reinsurance
Seguros Comercial America, S.A. de C.V. Mexico .031% Mexico, insurance
Reaseguradora Nuevo Mundo S A Panama 3.7246% Panama, reinsurance
Amazonas Co Anonima de Seguros Ecuador 1.423% Ecuador, insurance
Jurisdictions in which
Jurisdiction of Percentage Authorized and Type of
Name Organization Ownership Business
ACE (Barbados) Holdings Limited Barbados 100% Barbados, holding company
ACE Financial Services, Inc. Delaware 100% Delaware, insurance holding co
Capital Re Financial Products Corporation Delaware 100% Del, financial products
Capital RE LLC Turks & Caicos 100% Turks & Caicos, holding co
Capital RE (UK) Holdings/ACE (CR) Holdings United Kingdom 100% UK & holding co
CRC Capital, Ltd./ACE Capital VII Limited United Kingdom 100% UK, Lloyd's capital vehicle
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇./▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 100% UK, holding company
C.I. de Rougemont & Co. Ltd./ACE (CIDR) United Kingdom 100% UK, Lloyd's agency
Limited
RGB Underwriting Services, Ltd./ACE Agencies United Kingdom 100% UK, Lloyd's agency
Limited
RGB Underwriting Agencies, Ltd./Global Life United Kingdom 100% UK, Lloyd's agency
Services Limited
ACE Guaranty Re Inc. Maryland 100% USA, Reinsurer
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC # 30180, MD)
ACE Risk Assurance Company Maryland 100% Maryland, reinsurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC # 10943, MD)
ACE Financial Solutions, Inc. Delaware 100% Delaware, corporation
Schedule 5.02(a)
1. Liens securing letters of credit issued by Citibank for the
account of Cigna Europe in an aggregate stated amount not
exceeding $16,000,000 (subject to currency fluctuations).
2. Liens securing letters of credit issued by Citibank for the account
of INA(UK) in an aggregate stated amount not exceeding $8,000,000.
3. $70,000,000 of Cigna Overseas Insurance Company investments are
pledged to Domestic Pool companies under a Regulation 114 trust.
4. Lien arising under a Subordination Agreement dated as of October
27, 1998 among ACE US Holdings, Inc., ACE Limited and The Chase
Manhattan Bank encumbering ACE US Holdings, Inc.'s rights under
the Subordinated Loan Agreement dated as of October 27, 1998 among
ACE US Holdings, Inc., ACE Bermuda Insurance Ltd. and United
States Trust Company of New York, as trustee under the Indenture
dated October 27, 1998 of ACE US Holdings, Inc.
5. Liens securing Letter of Credit Facility Agreements dated
November 24, 1998 among ACE Limited, ACE Bermuda Insurance, Ltd.,
certain other financial institutions and Citibank International plc,
as Agent and Security Trustee.
EXHIBIT A-1
FORM OF
COMMITTED NOTE
$______________ Dated: _____________ __, 2000
FOR VALUE RECEIVED, the undersigned, __________________, a
__________ corporation (the "Obligor"), HEREBY PROMISES TO PAY to the order
of ________________ (the "Lender") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referred to below) the
aggregate principal amount of the Committed Advances (as defined below)
owing to the Lender by the Obligor pursuant to the Amended and Restated
364-Day Credit Agreement dated as of May 8, 2000 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"; terms defined therein, unless otherwise defined herein, being
used herein as therein defined) among ACE Limited, ACE Bermuda Insurance
Ltd., Tempest Reinsurance Company Limited, ACE INA Holdings Inc. and ACE
Guaranty Re Inc., as Borrowers, the Initial Lenders, Bank of America, N.A.
and The Chase Manhattan Bank, as Co-Syndication Agents, and ▇▇▇▇▇▇ Guaranty
Trust Company of New York, as Administrative Agent, payable at such times
as are specified in the Credit Agreement.
The Obligor promises to pay interest on the unpaid principal
amount of each Committed Advance from the date of such Committed Advance
until such principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
Administrative Agent, at such location as shall be designated by the
Administrative Agent in a written notice to the Obligor in same day funds.
Each Committed Advance owing to the Lender by the Obligor and the maturity
thereof, and all payments made on account of principal thereof, shall be
recorded by the Lender and, prior to any transfer hereof, endorsed on the
grid attached hereto, which is part of this Promissory Note; provided,
however, that the failure of the Lender to make any such recordation or
endorsement shall not affect the obligations of the Obligor under this
Promissory Note.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, (i) provides for the making of advances (the "Committed
Advances") by the Lender to the Obligor from time to time in an aggregate
amount not to exceed
at any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Obligor resulting from each such Committed Advance
being evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified. The
obligations of the Obligor under this Promissory Note and the other Loan
Documents, and the obligations of the other Loan Parties under the Loan
Documents, are unconditionally guaranteed by the Guarantors referred to in
the Credit Agreement.
The Obligor hereby waives presentment, demand, protest and notice
of any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York.
[NAME OF OBLIGOR]
By
------------------------------------------
Title:
A-1-2
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of Unpaid
Amount of Principal Paid or Principal Notation
Date Advance Prepaid Balance Made By
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▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF COMPETITIVE BID NOTE
$______________ Dated: _____________ __, ____
FOR VALUE RECEIVED, the undersigned, __________________, a
__________ corporation (the "Obligor"), HEREBY PROMISES TO PAY
_____________ (the "Lender") for the account of its Applicable Lending
Office (as defined in the Credit Agreement referred to below) the aggregate
principal amount of the Competitive Bid Advances (as defined below) owing
to the Lender by the Obligor pursuant to the Amended and Restated 364-Day
Credit Agreement dated as of May 8, 2000 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Credit
Agreement"; terms defined therein, unless otherwise defined herein, being
used herein as therein defined) among ACE Limited, ACE Bermuda Insurance
Ltd., Tempest Reinsurance Company Limited, ACE INA Holdings Inc. and ACE
Guaranty Re Inc., the Initial Lenders, Bank of America, N.A. and The Chase
Manhattan Bank as Co-Syndication Agents, and ▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Administrative Agent, payable at such times as are
specified in the Credit Agreement.
The Obligor promises to pay interest on the unpaid principal
amount of each Competitive Bid Advance from the date of such Competitive
Bid Advance until such principal amount is paid in full, at such interest
rates, and payable at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
Administrative Agent, at such location as shall be designated by the
Administrative Agent in a written notice to the Obligor in same day funds.
Each Competitive Bid Advance owing to the Lender by the Obligor and the
maturity thereof, and all payments made on account of principal thereof,
shall be recorded by the Lender and, prior to any transfer hereof, endorsed
on the grid attached hereto, which is part of this Promissory Note;
provided, however, that the failure of the Lender to make any such
recordation or endorsement shall not affect the obligations of the Obligor
under this Promissory Note.
This Promissory Note is one of the Competitive Bid Notes referred
to in, and is entitled to the benefits of, the Credit Agreement. The Credit
Agreement, among other things, (i) provides for the making of advances (the
"Competitive Bid Advances") by the Lender to the Obligor in an amount not
to exceed the U.S. dollar amount first above mentioned, the indebtedness of
the Obligor resulting
A-2-1
from such Competitive Bid Advances being evidenced by this Promissory Note,
and (ii) contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events and also for prepayments on account
of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified. The obligations of the Obligor under this
Promissory Note and the other Loan Documents, are unconditionally
guaranteed by the Guarantors referred to in the Credit Agreement.
The Obligor hereby waives presentment, demand, protest and notice
of any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York.
[NAME OF OBLIGOR]
By------------------------------------------------
Title:
A-2-2
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of Unpaid
Amount of Principal Paid or Principal Notation
Date Advance Prepaid Balance Made By
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▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF
NOTICE OF COMMITTED BORROWING
▇▇▇▇▇▇ Guaranty Trust Company of New York,
as Administrative Agent
under the Credit Agreement
referred to below
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[Date]
Attention: [ ▇▇▇▇ ▇▇▇▇]
Ladies and Gentlemen:
The undersigned, [Name of Borrower], refers to the Amended and
Restated 364-Day Credit Agreement dated as of May 8, 2000 (as amended,
amended and restated, supplemented or otherwise modified from time to time,
the "Credit Agreement"; the terms defined therein being used herein as
therein defined), among ACE Limited, ACE Bermuda Insurance Ltd., Tempest
Reinsurance Company Limited, ACE INA Holdings Inc. and ACE Guaranty Re
Inc., the Initial Lenders, Bank of America, N.A. and The Chase Manhattan
Bank, as Co-Syndication Agents, and ▇▇▇▇▇▇ Guaranty Trust Company of New
York, as Administrative Agent, and hereby gives you notice, irrevocably,
pursuant to Section 2.02 of the Credit Agreement that the undersigned
hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by Section 2.02(a) of the Credit
Agreement:
(i) The Business Day of the Proposed Borrowing is ______ __, ____.
(ii) The Proposed Borrowing is to be comprised of [Base Rate
Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is $________.
[(iv) The initial Interest Period for each Eurodollar Rate
Advance made as part of the Proposed Borrowing is _______
week[s]/month[s].]
B-1-1
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed
Borrowing:
(A) The representations and warranties contained in each Loan
Document are correct in all material respects on and as of
the date of the Proposed Borrowing, before and after giving
effect to the Proposed Borrowing and to the application of
the proceeds therefrom, as though made on and as of such date,
other than any such representations or warranties that, by
their terms, refer to a specific date other than the date of
the Proposed Borrowing, in which case, as of such specific
date.
(B) No Default has occurred and is continuing, or would
result from such Proposed Borrowing or from the
application of the proceeds therefrom.
Delivery of an executed counterpart of this Notice of Borrowing by
telecopier shall be effective as of an original executed counterpart of
this Notice of Borrowing.
Very truly yours,
[NAME OF BORROWER]
By--------------------------------
Title:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF NOTICE
OF COMPETITIVE
BID BORROWING
▇▇▇▇▇▇ Guaranty Trust Company of New York,
as Administrative Agent
under the Credit Agreement
referred to below
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[Date]
Attention: [▇▇▇▇ ▇▇▇▇]
Ladies and Gentlemen:
The undersigned, [Name of Borrower], refers to the Amended and
Restated 364-Day Credit Agreement dated as of May 8, 2000 (as amended,
amended and restated, supplemented or otherwise modified from time to time,
the "Credit Agreement"; the terms defined therein being used herein as
therein defined), among ACE Limited, ACE Bermuda Insurance Ltd., Tempest
Reinsurance Company Limited, ACE INA Holdings Inc. and ACE Guaranty Re
Inc., the Initial Lenders, Bank of America, N.A. and The Chase Manhattan
Bank, as Co-Syndication Agents, and ▇▇▇▇▇▇ Guaranty Trust Company of New
York, as Administrative Agent, and hereby gives you notice, irrevocably,
pursuant to Section 2.03 of the Credit Agreement that the undersigned
hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"Proposed Competitive Bid Borrowing") as required by Section 2.03(a) of the
Credit Agreement:
(A) Date of the Proposed
Competitive Bid Borrowing ___________________
(B) Amount of the Proposed
Competitive Bid Borrowing ___________________
(C) Type of Advances comprising the ___________________
Proposed Competitive Bid
Borrowing [Fixed Rate Advances]
[LIBO Rate Advances]
(D) [LIBO Interest Period for the LIBO Rate
Advances] [Maturity Date for Fixed
Rate Advances] made as part of the
Proposed Competitive Bid Borrowing ___________________
(E) Interest Payment Date(s) of Proposed
Competitive Bid Borrowing ___________________
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the proposed
Competitive Bid Borrowing:
(A) The representations and warranties contained in each Loan
Document are correct in all material respects on and as of the date of the
Proposed Competitive Bid Borrowing before and after giving effect to the
Proposed Competitive Bid Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, other than any such
representations or warranties that, by their terms, refer to a specific
date other than the date of the Proposed Competitive Bid Borrowing, in
which case, as of such specific date.
(B) No Default has occurred and is continuing, or would result
from such Proposed Competitive Bid Borrowing or from the application of the
proceeds therefrom.
Delivery of an executed counterpart of this Notice of Competitive
Bid Borrowing by telecopier shall be effective as delivery of an original
executed counterpart of this Notice of Competitive Bid Borrowing.
Very truly yours,
[NAME OF BORROWER]
By ____________________________
Title
B-2-2
EXHIBIT C
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 20__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), ACE LIMITED (the "Parent") and
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, this Assignment and Assumption Agreement (the
"Agreement") relates to the Amended and Restated 364-Day Credit Agreement
dated as of May 8, 2000 among the Parent and other Borrowers party thereto,
the Assignor and the other Lenders party thereto, as Lenders, the
Co-Syndication Agents and the Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has
a WC Commitment to make Committed Advances and Competitive Bid Advances to
the Borrowers in an aggregate principal amount at any time outstanding not
to exceed $___,000,000;
WHEREAS, Committed Advances and Competitive Bid Advances made to
the Borrowers by the Assignor under the Credit Agreement in the aggregate
principal amount of $__________ are outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of
the rights of the Assignor under the Credit Agreement and the other Loan
Documents in respect of a portion of its WC Commitment thereunder in an
amount equal to $__________ (the "Assigned Amount"), together with a
corresponding portion of its outstanding Committed Advances and Competitive
Bid Advances, and the Assignee proposes to accept assignment of such rights
and assume the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement and the
other Loan Documents to the extent of the Assigned Amount, and the Assignee
C-1
hereby accepts such assignment from the Assignor and assumes all of the
obligations of the Assignor under the Credit Agreement to the extent of the
Assigned Amount, including the purchase from the Assignor of the
corresponding portion of the principal amount of the Committed Advances and
Competitive Bid Advances made by the Assignor outstanding at the date
hereof. Upon the execution and delivery hereof by the Assignor, the
Assignee, the Parent and the Agent and the payment of the amounts specified
in Section 3 required to be paid on the date hereof (i) the Assignee shall,
as of the date hereof, succeed to the rights and be obligated to perform
the obligations of a Lender under the Credit Agreement with a WC Commitment
in an amount equal to the Assigned Amount, and (ii) the WC Commitment of
the Assignor shall, as of the date hereof, be reduced by a like amount and
the Assignor released from its obligations under the Credit Agreement to
the extent such obligations have been assumed by the Assignee. The
assignment provided for herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on
the date hereof in Federal funds the amount heretofore agreed between
them./1/ It is understood that facility fees accrued to the date hereof in
respect of the Assigned Amount are for the account of the Assignor and such
fees accruing from and including the date hereof are for the account of the
Assignee. Each of the Assignor and the Assignee hereby agrees that if it
receives any amount under the Credit Agreement which is for the account of
the other party hereto, it shall receive the same for the account of such
other party to the extent of such other party's interest therein and shall
promptly pay the same to such other party.
[SECTION 4. Consent of the Parent and the Agent. This Agreement is
conditioned upon the consent of the Parent and the Agent pursuant to
Section 9.06(c) of the Credit Agreement. The execution of this Agreement by
the Parent and the Agent is evidence of this consent.]
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency, financial condition or
statements of the Borrowers or any of their respective Subsidiaries, or the
validity and enforceability of the obligations of the Borrowers or any of
their respective Subsidiaries in respect of any Loan Document. The Assignee
acknowledges that it has, independently and without reliance on the
Assignor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter
--------
/1/ Amount should combine principal together with accrued interest
and breakage compensation, if any, to be paid by the Assignee, net of any
portion of any upfront fee to be paid by the Assignor to the Assignee. It
may be preferable in an appropriate case to specify these amounts
generically or by formula rather than as a fixed sum.
C-2
into this Agreement and will continue to be responsible for making its own
independent appraisal of the business, affairs and financial condition of
the Borrowers and their respective Subsidiaries.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date
first above written.
[ASSIGNOR]
By_________________________
Title:
[ASSIGNEE]
By__________________________
Title:
ACE LIMITED
By__________________________
Title:
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK
By__________________________
Title:
▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF CAYMAN ISLANDS COUNSEL
TO THE PARENT
Effective Date:
May 8, 2000
To the parties listed in
Schedule A attached hereto
Dear Sirs,
Re: ACE Limited
We have acted as Cayman Islands counsel for ACE Limited (the
"Company") in connection with its entry into the Credit Agreement referred
to below. This opinion is being rendered to you at the request of our
client pursuant to Section 3.01 of the Credit Agreement. Unless the context
otherwise requires, terms defined in the Credit Agreement are used herein
as therein defined.
We have reviewed, inter alia, originals, drafts or copies of the
following documents:
(a) the Articles of Association of the Company;
(b) the corporate records of the Company maintained at its
registered office in the Cayman Islands;
(c) a Certificate of the Secretary of the Company (the
"Secretary's Certificate") in the form attached
certifying, inter alia, that certain resolutions (the
"Resolutions") were passed by the Board of Directors of
the Company on______________, 2000;
(d) a Certificate of Good Standing issued by the Registrar of
Companies of the Cayman Islands dated _______________, 2000;
(e) an amended and restated 364-day credit agreement for
$800,000,000 between the Company, ACE Bermuda, Tempest,
ACE INA Holdings Inc. and ACE Guaranty Re, Inc. as Borrowers,
the Initial Lenders named therein, Bank of America, N.A. and
▇-▇-▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Bank as Co-Syndication Agents and ▇▇▇▇▇▇
Guaranty Trust Company of New York as Administrative
Agent dated 8 May, 2000 (the "Credit Agreement").
The following opinion is given only as to circumstances existing
on the date hereof and known to us and as to the laws of the Cayman Islands
as the same are in force at the date hereof. The following Opinion is given
in reliance upon factual matters as described in the Secretary's
Certificate and on the basis of the other documents referred to in
paragraphs (a)-(d) above. Further, we have based our opinion upon the
following assumptions, which we have not independently verified:
(a) the due authorization, execution and delivery of the Credit
Agreement by the other parties thereto;
(b) the Credit Agreement constitutes or will constitute at
all relevant times the legal, valid, binding and
enforceable obligations of the parties thereto under the
laws of New York and all other relevant laws (other than
the laws of the Cayman Islands);
(c) the choice of laws of New York as the governing law of
the Credit Agreement has been made in good faith and
would be regarded as a valid and binding selection which
will be upheld in the courts of New York as a matter of
New York law and all other relevant laws (other than the
laws of the Cayman Islands);
(d) the genuineness of all documents, the authenticity of the
signatures and seals thereon and the conformity of all copies
with the originals thereof;
(e) the power, authority and legal right of the parties under
all relevant laws and regulations (other than the laws of
the Cayman Islands) to enter into, execute and perform
their respective obligations under the Credit Agreement;
and
(f) there is nothing under any law (other than the laws of
the Cayman Islands) which would or might affect the
opinions hereinafter appearing. Specifically, we have
made no independent investigation of the laws of New York
or Bermuda.
Upon the basis of the foregoing, we are of the opinion that:
1. The Company is a company limited by shares duly incorporated,
validly existing and in good standing under the laws of the Cayman Islands, and
has all corporate powers required to carry on its business as a holding company
D-1-2
in accordance with its Memorandum and Articles of Association. The Company is
not required to obtain any license, authorization, consent or approval in
the Cayman Islands in order to carry on such business.
2. The execution, delivery and performance by the Company of the
Credit Agreement and when executed and delivered by the Company thereunder,
the Notes are within the Company's corporate powers and have been duly
authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any Cayman Islands governmental body, agency or
official and do not contravene, or constitute a default under, any
provision of Cayman Islands law or regulation or of the Memorandum and
Articles of Association of the Company or, so far as we are aware, of any
judgment, injunction, order or decree of the Cayman Islands authorities
binding upon the Company.
3. The Credit Agreement and each Note of the Company (assuming it
has been or will be duly executed and delivered on behalf of the Company by
an Authorised Officer of the Company referred to in the Resolutions)
constitutes a valid and binding agreement or obligation of the Company
enforceable in accordance with its terms. The expression "enforceable" as
used above means that the obligations of the Company under the Credit
Agreement are of a type which the courts of the Cayman Islands will
enforce. It does not necessarily mean that those obligations will be
enforced in all circumstances in accordance with their terms, in
particular:
(i) enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganization or other laws of general
application relating to or affecting the rights of
creditors generally;
(ii) enforcement may be limited by general principles
of equity; discretionary equitable remedies such
as specific performance and injunction may not,
for example, be available where damages are
considered to be an adequate remedy;
(iii) claims may become barred under statutes of limitation
or may be or become subject to defenses of set-off
or counterclaim;
(iv) where obligations are to be performed in a
jurisdiction outside of the Cayman Islands they
may not be enforceable in the Cayman Islands to
the extent that performance would be illegal
under the laws of the jurisdiction in question;
D-1-3
(v) a certificate, determination, calculation or
designation by any party to the Credit Agreement
as to any matter provided therein might be held
by a Cayman Islands court not to be conclusive,
final and binding in the event of manifest
error;
(vi) obligations to make payments that are registered by a
Cayman Islands court as a penalty will not be
enforceable;
(vii) an award of a court of the Cayman Islands may be
required to be made in Cayman Islands dollars
although the courts of the Cayman Islands as a
matter of practice make awards in United States
dollars where that is the designated currency of
the obligation in question; currency indemnity
provisions have not been tested, so far as we
are aware, in the courts of the Cayman Islands;
(viii) Cayman Islands stamp duty will be payable if the
Credit Agreement or any Note of the Company is
executed in, brought to or produced before a
court of the Cayman Islands;
(ix) a Cayman Islands court will not necessarily award
costs and disbursements in litigation in accordance
with contractual provisions in this regard; and
(x) we reserve our opinion as to the enforcement of
provisions such as Section 9.04 of the Credit
Agreement by persons who are not parties to the
document in favour of such persons.
4. There is no action, suit or proceeding pending against the
Company in the Grand Court of the Cayman Islands.
5. The submission to jurisdiction and waiver of objection to venue
and forum set forth in the Credit Agreement are valid and effective
assuming this to be so as a matter of New York law.
6. No taxes, levies, imposts, duties, charges or withholding
(other than stamp duty in the circumstances specified in paragraph 3(viii)
above) of any nature will be imposed by the Cayman Islands Government or
any taxing authority thereof or therein upon or with respect to (i) the
execution, delivery or performance of the Credit Agreement or any Note or
(ii) the payment of the principal of or interest on the Notes or on any
other amounts payable under the Credit Agreement.
D-1-4
7. There is no requirement of Cayman Islands law which would
require any Lender to be a resident, citizen or corporation of the Cayman
Islands or to maintain a permanent establishment in the Cayman Islands as a
pre-condition to bringing an action in the Grand Court of the Cayman
Islands and the Lenders are not subject to any condition in bringing or
continuing any such action in the Grand Court of the Cayman Islands to
which any such resident, citizen or corporation or person maintaining a
permanent establishment in the Cayman Islands is not subject except to the
extent that the lack of a presence in the Cayman Islands may influence the
court in any direction as to security for costs. The courts of the Cayman
Islands have jurisdiction in any suit against the Company relating to or
arising out of the Credit Agreement or any Note.
8. Although there is no statutory enforcement in the Cayman
Islands of judgments obtained in any New York State or federal court of the
United States of America sitting in New York City, as a matter of comity
the courts of the Cayman Islands will recognize and enforce a foreign
judgment without a review of the merits thereof (not being in respect of
taxes or like charges or in respect of a fine or penalty) which is final,
was for a liquidated sum, and was not obtained in a manner which would be,
and is not of a kind the enforcement of which is, contrary to the public
policy of the Cayman Islands.
9. The courts of the Cayman Islands will observe and give effect
to the choices of New York law as the governing law of the Credit Agreement
and the Notes assuming such choices are bona fide and legal and assuming
that such choices are valid and binding as a matter of New York law and all
other relevant laws (other than the laws of the Cayman Islands). On the
basis of the facts known to us, we are not aware of any reason why such a
choice would not be upheld.
10. The Company is permitted to hold assets, transfer funds and
conduct its business (including, without limitation, the payment of the
principal of, and interest on the Notes) in any currency, without any
prohibition or limitation of any type whatsoever. There are no exchange
controls imposed under Cayman Islands laws.
Except as specifically stated herein, we make no comment with
regard to any representation which may be made by the Company in the Credit
Agreement or otherwise.
This opinion, although addressed to you, may be relied upon by
your legal advisers (but in that capacity only). It may not be relied upon
by any other person(s) without our prior written consent.
Yours faithfully,
D-1-5
SCHEDULE A
Initial Lenders
▇▇▇▇▇▇ Guaranty Trust Company of New York
Bank of America, N.A.
The Chase Manhattan Bank
ABN AMRO Bank N.V.
The Bank of New York
Bank One, NA
Barclays Bank plc
Citibank, N.A.
Deutsche Bank AG New York and/or Cayman Islands Branches
First Union National Bank
Fleet National Bank
Mellon Bank, N.A.
Royal Bank of Canada
The Bank of Tokyo-Mitsubishi, Limited
Banque Nationale de Paris
Credit Lyonnais New York Branch
Lloyds TSB Bank plc
State Street Bank and Trust Company
D-1-6
ACE LIMITED
P.O. Box 309
▇▇▇▇▇▇ House
South Church Street
▇▇▇▇▇▇ Town
Grand Cayman
Cayman Islands
British West Indies
___ May, 2000
To: Cayman Islands Counsel to the Parent
Dear Sirs,
Re: ACE Limited
In connection with certain opinions you have been requested to
render in respect of the aforesaid, I would hereby certify as follows:
1. The Company's Memorandum and Articles of Association as
adopted by Special Resolution of the Company on 14th
January, 1993 remain in full force and effect unamended
save by Special Resolution passed on 6th February, 1998.
2. No resolutions of the shareholders have been passed to
restrict the authority of the Directors as set forth in
the Memorandum and Articles of Association of the Company
adopted on 14th January, 1993.
3. No petition has been filed in the Cayman Islands or any
jurisdiction for the winding up of the Company and no
resolution has been passed by the shareholders of the Company
to wind it up.
4. The Resolutions of the Board of Directors passed on
December 29, 1998, certified extracts of which are
annexed to this Certificate, remain in full force and
effect.
5. The Company's authorised share capital includes
[300,000,000 Ordinary Shares of US $0.041666667] each and
[10,000,000 "Other Shares" of US $1.00 each].
D-1-1
6. The number of Ordinary Shares currently in issue and
outstanding is [193,914,702].
7. The execution by an Authorised Officer of the Company of
the Guaranty in favour of Bank of America National Trust
and Savings Association referred to in your opinion of
today's date was deemed by that Authorised Officer
necessary, advisable or proper in connection with the
execution of the Credit Agreement, referred to in your
opinions of today's date.
------------------------------------
[▇▇▇▇▇ ▇. ▇▇▇▇]
General Counsel and Secretary
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF NEW YORK COUNSEL
TO THE LOAN PARTIES
May 8, 2000
▇▇▇▇▇▇ Guaranty Trust Company of New York
and each of the other financial institutions
which is a party to the Credit Agreement
referred to below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Administrative Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
We have acted as special New York counsel for ACE Limited, ACE
Bermuda Insurance Ltd., Tempest Reinsurance Company Limited, ACE INA
Holdings Inc. ("ACE INA"), and ACE Guaranty Re, Inc. ( collectively the
"Borrowers") in connection with the $800,000,000 Amended and Restated
364-Day Credit Agreement (the "Credit Agreement") dated as of May 8, 2000
among the Borrowers, various financial institutions, Bank of America, N.A.
and The Chase Manhattan Bank as Co-Syndication Agents and ▇▇▇▇▇▇ Guaranty
Trust Company of New York, as Administrative Agent. Terms defined in the
Credit Agreement are used herein as therein defined. This opinion letter is
being rendered to you at the request of our clients pursuant to Section
3.01(ii)(F)(2) of the Credit Agreement.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of (i) the Credit Agreement, (ii) the Notes
issued by the Borrowers on the date hereof and (iii) such documents,
corporate records, certificates of public officials and of officers and
representatives of the Borrowers and other instruments, and have conducted
such other investigations of fact and law, as we have deemed necessary or
advisable for purposes of this opinion letter. Except as described in the
foregoing sentence, we have not undertaken any independent investigation of
any factual matters which might be relevant to this opinion letter and we
have made no independent investigation of the records of, or other matters
relating to, any Borrower or any other Person.
Whenever our opinion with respect to the existence or absence of
facts is indicated to be based on our knowledge, we are referring solely to
the actual
D-2-1
knowledge of the particular attorneys who have represented the Borrowers in
connection with the Credit Agreement. Except as expressly set forth herein,
we have not undertaken any independent investigation to determine the
existence or absence of such facts and no inference as to our knowledge
concerning such facts should be drawn from the fact that such
representation has been undertaken by us.
For the purposes of this opinion letter, we have assumed that all
items submitted to us as originals are complete and authentic and all
signatures thereon are genuine, and all items submitted to us as copies are
complete and conform to the originals. We have also assumed, with your
permission and without independent investigation of any kind, the
following: (i) each of the Parent, ACE Bermuda and Tempest has been duly
incorporated or organized and is validly existing under the laws of the
Cayman Islands (in the case of the Parent) or of Bermuda (in the case of
ACE Bermuda and Tempest); (ii) the Credit Agreement and the Notes have been
duly authorized, executed and delivered by each party thereto (other than
ACE INA, as to which we express an opinion below); (iii) the Credit
Agreement is the legal, valid and binding obligation of each party thereto
(other than the Borrowers, as to which we express an opinion below)
enforceable against each such party in accordance with its terms; (iv) as
to each of the Borrowers (other than, in the case of clauses (a) and (b)
below, ACE INA, as to which we express an opinion below), the execution,
delivery and performance of the Credit Agreement and the Notes by such
Borrower (a) are in accordance with (and do not conflict with) the laws of
the jurisdiction in which such Borrower is incorporated or organized, as
the case may be, (b) do not violate or contravene such Borrower's
organizational documents or by-laws; and (c) do not violate or contravene
any provision of any agreement or contract applicable to or binding upon
such Borrower; and (v) there are no agreements or understandings among the
parties, written or oral, and no usage of trade or course of prior dealing
among the parties which would, in either case, define, supplement or
qualify the terms of the Credit Agreement or any Note.
Upon the basis of the foregoing and the other assumptions and
qualifications set forth herein, we are of the opinion that:
1. ACE INA has been duly incorporated, is validly existing and is in
good standing under the laws of the State of Delaware.
2. ACE INA has the corporate power and authority to execute,
deliver and perform its obligations under the Credit Agreement and the
Notes issued by it on the date hereof (the "ACE INA Notes"). ACE INA has
taken all corporate action required to duly authorize the execution,
delivery and performance by it of the Credit Agreement and the ACE INA
Notes. Each of the Credit Agreement and each ACE INA Note has been duly
authorized, executed and delivered by ACE INA.
D-2-2
3. Based upon our review of those statutes, rules, regulations and
judicial decisions which in our experience are normally applicable to or
normally relevant in connection with transactions of the type provided for
in the Credit Agreement, the execution and delivery by the Borrowers of the
Credit Agreement and the Notes and the performance by the Borrowers of
their respective obligations thereunder do not and will not violate,
contravene or constitute a default under any provision of any United States
Federal or New York State law or regulation or, to our knowledge, any
order, writ, injunction or decree applicable to or binding on any Borrower
or its properties. The execution and delivery by ACE INA of the Credit
Agreement and the ACE INA Notes and the performance by ACE INA of its
obligations thereunder in accordance with their respective terms will not
violate the certificate of incorporation or by-laws of ACE INA.
4. No order, consent, approval, license, authorization or
validation of or exemption by any government or public body or authority of
the State of New York is required to authorize or is required in connection
with the execution, delivery and performance by any Borrower of the Credit
Agreement or any Note.
5. Each of the Credit Agreement and each Note constitutes a valid
and binding agreement of each Borrower which is a party thereto, in each
case enforceable in accordance with its terms.
6. None of the Borrowers is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
Our opinions set forth above are subject to the following
qualifications:
(a) We express no opinion as to any law, rule, regulation, ordinance,
code or similar provision of law of any county, municipality, or
similar political subdivision of the State of New York or any
agency or instrumentality thereof, and we express no opinion as to
any law to which any Borrower may be subject solely as a result of
your legal or regulatory status or as to any insurance law or
(except as expressly set forth in paragraph 6) any federal or
state securities or "blue sky" law. Members of our Firm are
admitted to practice law in the State of New York and we express
no opinion on any law other than the laws of the State of New
York, the General Corporation Law of the State of Delaware
("Delaware Corporation Law"), and the Federal law of the United
States to the extent specifically set forth herein. With respect
to any matters concerning Delaware Corporation Law involved in
the opinions set forth above, we draw your attention to the fact
that we are not admitted to practice law in the State of Delaware
and are not experts in the law of such jurisdiction, and that any
such opinions
D-2-3
concerning Delaware Corporation Law are based upon our
reasonable familiarity with Delaware Corporation Law and
as a result of our prior involvement in transactions
concerning such laws.
(b) Our opinions are subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws affecting creditors' rights generally
and to the effect of general principles of equity (regardless of
whether considered in a proceeding in equity or at law), including
(without limitation) concepts of materiality, reasonableness, good
faith and fair dealing and by limitations on the availability of
specific performance, injunctive relief or other equitable
remedies
(c) We express no opinion as to:
(i) obligations relating to indemnification, contribution or
exculpation of costs, expenses or liabilities which contravene public
policy;
(ii) the enforceability, under certain circumstances, of
provisions imposing penalties or forfeitures, late payment charges
or an increase in interest rate upon delinquency in payment or the
occurrence of a default;
(iii) any agreement by any Borrower to the subject matter
jurisdiction of a United States federal court, to the waiver of
the right to jury trial or to be served with process by service
upon a designated third party;
(iv) any agreement by any Borrower purporting to waive
any objection to the laying of venue or any claim that an action
or proceeding has been brought in an inconvenient forum;
(v) the effect of the law of any jurisdiction other than
the State of New York wherein any Lender may be located or wherein
the enforcement of the Credit Agreement or any Note may be sought
that limits the rates of interest, fees or other charges legally
chargeable or collectible;
(vi) any provision of the Credit Agreement (A)
restricting access to legal or equitable remedies, (B) relating to
severability or similar clauses, (C) providing that the Credit
Agreement may only be amended, modified or waived in writing, (D)
stating that all rights or remedies of any party are cumulative
and may be enforced in addition to any other
D-2-4
right or remedy and that the election of a particular remedy does
not preclude recourse to one or more remedies, (E) purporting to
establish an evidentiary standard for determinations by the
Lenders or the Administrative Agent or (F) purporting to convey
rights to Persons other than parties to the Credit Agreement;
(vii) whether any court outside the State of New York
would honor the choice of New York law as the governing law of the
Credit Agreement and the Notes; or
(viii) Section 9.05 of the Credit Agreement.
The opinions expressed herein are effective only as to the date of
this opinion letter. We do not assume responsibility for updating this
opinion letter as of any date subsequent to the date of this opinion
letter, and we assume no responsibility for advising you of (i) any changes
with respect to any matters described in this opinion letter or (ii) the
discovery subsequent to the date of this opinion letter of factual
information not previously known to us pertaining to the events occurring
prior to the date of this opinion letter.
This opinion letter is rendered solely to you in connection with
the above-described transactions. This opinion letter may not be relied
upon by you for any other purpose, or relied upon by any other Person
without our prior written consent.
Very truly yours,
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF BERMUDA COUNSEL
TO ACE BERMUDA AND TEMPEST
May 8, 2000
The parties listed in Schedule A
attached hereto (together the "Initial Lenders")
Dear Sirs
ACE Bermuda Insurance Ltd ("SCE Bermuda")
Tempest Reinsurance Company Limited ("Tempest")
We have acted as special legal counsel in Bermuda to ACE Bermuda
and Tempest (together the "Companies") in connection with an amended and
restated 364-day credit agreement for $800,000,000 between ACE Limited, ACE
Bermuda, Tempest, ACE INA Holdings Inc. and ACE Guaranty Re, Inc. as
borrowers, the Initial Lenders named therein, Bank of America, N.A. and The
Chase Manhattan Bank, as Co-Syndication Agents, and ▇▇▇▇▇▇ Guaranty Trust
Company of New York as Administrative Agent, dated as of May 8, 2000 (the
"ACE Limited 364-Day Credit Agreement").
For the purposes of giving this opinion, we have examined an
electronic copy and facsimile executed signature pages of the ACE Credit
Agreement.
We have also reviewed the memorandum of association and the
bye-laws of each of the Companies, a certified copy of an extract from the
minutes of a meeting of each of ACE Bermuda and Tempest's directors held on
[26 May, 1999] as certified by the Assistant Secretary of ACE Bermuda and
Tempest on [30 June, 1999] (the "Minutes"), and such other documents and
made such enquiries as to questions of law as we have deemed necessary in
order to render the opinion set forth below.
We have also reviewed and relied upon:
(i) Certificates of Registration of ACE Bermuda and Tempest as
insurers under the Insurance ▇▇▇ ▇▇▇▇ (the "Certificates of
Registration");
(ii) Certificates of Compliance under the Companies ▇▇▇ ▇▇▇▇ and
The Insurance ▇▇▇ ▇▇▇▇ issued by the Assistant Registrar of
D-3-1
Companies on 25 May, 1999 in respect of ACE Bermuda and
Tempest (the "Compliance Certificates");
(iii) the Direction issued under section 56 of the Insurance
▇▇▇ ▇▇▇▇ on behalf of the Minister of Finance dated 9
December, 1998 in respect of ACE Bermuda giving
guarantees;
(iv) the Direction issued under section 56 of the Insurance
▇▇▇ ▇▇▇▇ Act on behalf of the Minister of Finance dated
17 March, 1999 in respect of Tempest giving guarantees;
(v) our searches of documents of public record in respect of
each of ACE Bermuda and Tempest maintained at the
Registrar of Companies in Bermuda and the Cause Book of
the Supreme Court of Bermuda as at [__________, 2000]
(the "Searches").
We have assumed (a) the genuineness and authenticity of all
signatures and the conformity to the originals of all copies (whether or
not certified) examined by us and the authenticity and completeness of the
originals from which such copies were taken, (b) that where a document has
been examined by us in draft or electronic form, it will be or has been
executed in the form of that draft or electronic form, and where a number
of drafts of a document have been examined by us all changes thereto have
been marked or otherwise drawn to our attention, (c) the capacity, power
and authority of each of the parties to the ACE Limited 364-Day Credit
Agreement, other than the Companies, to enter into and perform its
respective obligations under the ACE Limited 364-Day Credit Agreement, (d)
the due execution of the ACE Limited 364-Day Credit Agreement by each of
the parties thereto, other than the Companies, and the delivery thereof by
each of the parties thereto, (e) the accuracy and completeness of all
factual representations made in the ACE Limited 364-Day Credit Agreement
and other documents reviewed by us, (f) that the resolutions contained in
the Minutes remain in full force and effect and have not been rescinded or
amended, (g) that the Companies are entering into the ACE Limited 364-Day
Credit Agreement pursuant to their business of insurance, (h) that the
information disclosed by the Searches has not been materially altered and
that the Searches did not fail to disclose any material information which
had been delivered for filing or registration, but was not disclosed or did
not appear on the said public record at the time of the Searches, (i) that
there is no provision of the law of any jurisdiction, other than Bermuda,
which would have any implication in relation to the opinions expressed
herein, (j) that the entering into of the ACE Limited 364-Day Credit
Agreement by the Companies will not result in a breach of the conditions
attached to their respective Certificates of Registration issued pursuant
to the Insurance ▇▇▇ ▇▇▇▇; (k) the validity and binding effect under the
laws of the State of New York (the "Foreign Laws") of the ACE Limited
364-Day Credit Agreement which are expressed to be governed by such Foreign
Laws in accordance with their respective terms, (l)
D-3-2
the validity and binding effect under the Foreign Laws of the submission by
the Company pursuant to the ACE Limited 364-Day Credit Agreement to the
non-exclusive jurisdiction of the courts of any New York State Court or
Federal court of the United States of America sitting in New York City (the
"Foreign Courts").
The obligations of the Companies under the ACE Limited 364-Day
Credit Agreement (a) will be subject to the laws from time to time in
effect relating to bankruptcy, insolvency, liquidation, possessory liens,
rights of set off, reorganization, amalgamation, moratorium or any other
laws or legal procedures, whether of a similar nature or otherwise,
generally affecting the rights of creditors, (b) will be subject to
statutory limitation of the time within which proceedings may be brought,
(c) will be subject to general principles of equity and, as such, specific
performance and injunctive relief, being equitable remedies, may not be
available, (d) may not be given effect to by a Bermuda court, whether or
not it was applying the Foreign Laws, if and to the extent they constitute
the payment of an amount which is in the nature of a penalty and not in the
nature of liquidated damages and (e) as a person registered as an insurer
(the "insurer") under the Insurance ▇▇▇ ▇▇▇▇ and the regulations
promulgated thereunder (the "Act"), will be subject to directions which may
be issued by the Bermuda Minister of Finance (the "Minister") under Section
32 of the Act ("Section 32") if it appears to the Minister that the
business of the insurer is being so conducted that there is a significant
risk of the insurer becoming insolvent or the insurer is in breach of a
provision of the Act or of the regulations promulgated thereunder or any
condition imposed on its registration (for example the requirement to
maintain a certain minimum amount of statutory capital and surplus). In
these circumstances, the Minister may direct the insurer to take or refrain
from taking any of the steps listed in Section 32, including, inter alia,
that the insurer cease or limit its underwriting or that there be a
prohibition or restriction on the payment of dividends or other
distributions. Further, under Section 32, if it appears to the Minister
that the business of the insurer is being so conducted that there is a
significant risk of the insurer becoming insolvent, he may direct the
insurer to maintain in, or transfer to and keep in the custody of, a
specified bank, assets of the insurer of such value and description as are
specified in the direction. ACE Bermuda and/or Tempest, under applicable
requirements of the Act, may be required to record a liability against or
to deduct from its statutory capital and surplus (as determined under the
Act) amounts payable or paid pursuant to its obligations under the ACE
Limited 364-Day Credit Agreement. The Companies may be considered to be
insolvent if they fail to meet and maintain the required minimum amount of
statutory capital and surplus and in such circumstances the ability of the
Companies to carry out the said obligations will be affected.
We express no opinion as to the enforceability of any provision of
the ACE Limited 364-Day Credit Agreement which provides for the payment of
a specified rate of interest on the amount of a judgment after the date of
judgment or which purports to ▇▇▇▇▇▇ the statutory powers of either of the
Companies.
D-3-3
With respect to the opinion expressed in paragraph 4 below, it
should be noted that the documents of public record maintained by the
Registrar of Companies do not reveal (i) whether a winding-up petition or
application to a Bermuda court for the appointment of a receiver has been
presented, (ii) details of matters which have been lodged for registration
but have not actually been registered at the date the file was made
available to us, (iii) whether a direction under Section 32 has been issued
or (iv) whether the Companies are in compliance with conditions attached to
their registration as a Class 4 insurer and a long-term insurer under the
Act and the provisions of the Act.
We have made no investigation of and express no opinion in
relation to the laws of any jurisdiction other than Bermuda. This opinion
is to be governed by and construed in accordance with the laws of Bermuda
and is limited to and is given on the basis of the current law and practice
in Bermuda. This opinion is issued solely for your benefit and is not to be
relied upon by any other person, firm or entity or in respect of any other
matter.
On the basis of and subject to the foregoing, we are of the
opinion that:
1. Tempest is duly incorporated and existing under the laws of
Bermuda. ACE Bermuda is the result of a due continuation into
Bermuda and a subsequent due amalgamation under the laws of
Bermuda. Both Companies are in good standing (meaning solely
that each has not failed to make any filing with any Bermuda
governmental authority or to pay any Bermuda government fee or
tax which would make it liable to be struck off the Register of
Companies and thereby cease to exist under the laws of Bermuda).
Based purely on the Certificates of Registration and the
Compliance Certificates, each of Tempest and ACE Bermuda is
registered under the Insurance ▇▇▇ ▇▇▇▇ as a Class 4 Insurer.
2. Each of the Companies has the necessary corporate power and
authority to enter into and perform its obligations under the ACE
Limited 364-Day Credit Agreement. The execution and delivery of
the ACE Limited 364-Day Credit Agreement by each of the
Companies and the respective performance by each of the
Companies of its obligations thereunder will not violate the
respective memorandum of association or bye-laws of the
Companies nor any applicable law, regulation, order or decree in
Bermuda.
3. Each of the Companies has taken all corporate action required to
authorise its execution, delivery and performance of the ACE
Limited 364-Day Credit Agreement and the Notes thereunder. The
ACE Limited 364-Day Credit Agreement has been duly executed
D-3-4
and delivered by or on behalf of the Companies, and
constitutes the valid and binding obligations of the
Companies in accordance with the terms thereof.
4. No order, consent, approval, licence, authorisation or
validation of or exemption by any government or public
body or authority of Bermuda or any sub-division thereof
is required to authorise or is required in connection
with the execution, delivery, performance and enforcement
of the ACE Limited 364-Day Credit Agreement and the Notes
thereunder.
5. It is not necessary or desirable to ensure the enforceability in
Bermuda of the ACE Limited 364-Day Credit Agreement and the
Notes thereunder that they be registered in any register kept by,
or filed with, any governmental authority or regulatory body in
Bermuda. However, to the extent that the ACE Limited 364-Day
Credit Agreement and the Notes thereunder create a charge over
assets of one or both of the Companies, it may be desirable to
ensure the priority in Bermuda of the charge that they be
registered in the Register of Charges in accordance with Section 55
of the Companies ▇▇▇ ▇▇▇▇. On registration, to the extent that
Bermuda law governs the priority of a charge, such charge will
have priority in Bermuda over any unregistered charges, and over
any subsequently registered charges, in respect of the assets
which are the subject of the charge. A registration fee of $425
will be payable in respect of the registration.
While there is no exhaustive definition of a charge under
Bermuda law, a charge normally has the following
characteristics:
(i) it is a proprietary interest granted by way of
security which entitles the chargee to resort to
the charged property only for the purposes of
satisfying some liability due to the chargee
(whether from the chargor or a third party); and
(ii) the chargor retains an equity of redemption to have the
property restored to him when the liability has been
discharged.
However, as the ACE Limited 364-Day Credit Agreement is
governed by the Foreign Laws, the question of whether it
would possess these particular characteristics would be
determined under the Foreign Laws.
D-3-5
6. The ACE Limited 364-Day Credit Agreement and the Notes
thereunder will not be subject to ad valorem stamp duty in
Bermuda.
7. The choice of the Foreign Laws as the governing law of the ACE
Limited 364-Day Credit Agreement and the Notes thereunder is a
valid choice of law and would be recognised and given effect to
in any action brought before a court of competent jurisdiction in
Bermuda, except for those laws (i) which such court considers to
be procedural in nature, (ii) which are revenue or penal laws or
(iii) the application of which would be inconsistent with public
policy, as such term is interpreted under the laws of Bermuda. The
submission in the ACE Limited 364-Day Credit Agreement to the
non-exclusive jurisdiction of the Foreign Courts is valid and
binding upon the Companies.
8. The courts of Bermuda would recognise as a valid judgment, a
final and conclusive judgment in personam obtained in the Foreign
Courts against the Companies based upon the ACE Limited 364-
Day Credit Agreement or the Notes thereunder under which a sum
of money is payable (other than a sum of money payable in respect
of multiple damages, taxes or other charges of a like nature or in
respect of a fine or other penalty) and would give a judgment
based thereon provided that (a) such courts had proper
jurisdiction over the parties subject to such judgment, (b) such
courts did not contravene the rules of natural justice of Bermuda,
(c) such judgment was not obtained by fraud, (d) the enforcement
of the judgment would not be contrary to the public policy of
Bermuda, (e) no new admissible evidence relevant to the action is
submitted prior to the rendering of the judgment by the courts of
Bermuda and (f) the due compliance with the correct procedures
under the laws of Bermuda.
Yours faithfully,
D-3-6
SCHEDULE A
----------
Initial Lenders
▇▇▇▇▇▇ Guaranty Trust Company of New York
Bank of America, N.A.
The Chase Manhattan Bank
ABN AMRO Bank N.V.
The Bank of New York
Bank One, NA
Barclays Bank plc
Citibank, N.A.
Deutsche Bank AG New York and/or Cayman Islands Branches
First Union National Bank
Fleet National Bank
Mellon Bank, N.A.
Royal Bank of Canada
The Bank of Tokyo-Mitsubishi, Limited
Banque Nationale de Paris
Credit Lyonnais New York Branch
Lloyds TSB Bank plc
State Street Bank and Trust Company
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF MARYLAND COUNSEL
TO ACE GUARANTY RE INC.
▇▇▇-▇▇▇-▇▇▇▇
May 8, 2000
▇▇▇▇▇▇ Guaranty Trust Company of New York
and each of the other financial institutions
which is a party to the Credit Agreement
referred to below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Administrative Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: $800,000,000 Credit Agreement
Ladies and Gentlemen:
This firm has acted as special Maryland counsel to ACE
Guaranty Re Inc., a Maryland corporation (the "Company"), in connection
with the $800,000,000 Credit Agreement dated as of May 8, 2000 (the
"Agreement"), among ACE Limited, ACE Bermuda Insurance Ltd., Tempest
Reinsurance Company Limited, ACE INA Holdings Inc. and the Company, various
financial institutions and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
Administrative Agent. This opinion letter is furnished to you pursuant to
the requirements set forth in Section 3.01(ii)(F)(4) of the Agreement in
connection with the Closing thereunder on the date hereof. Capitalized
terms used herein which are defined in the Agreement shall have the
meanings set forth in the Agreement, unless otherwise defined herein.
For purposes of this opinion letter, we have examined
copies of the following documents:
1. Executed copy of the Agreement.
D-4-1
▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Administrative Agent
May 8, 2000 Page 2
2. Executed copies of the Notes issued by the Company.
3. The Articles of Incorporation of the Company with
amendments thereto (the "Charter"), as certified
by the State Department of Assessments and
Taxation of the State of Maryland on May 4, 2000
and as certified by the Secretary of the Company
on the date hereof as being complete, accurate
and in effect.
4. The by-laws of the Company, as certified by the Secretary
of the Company on the date hereof as being complete,
accurate and in effect.
5. A certificate of good standing of the Company issued by
the State Department of Assessments and Taxation of the
State of Maryland dated May __,2000.
6. Certain resolutions of the Board of Directors of
the Company adopted by unanimous written consent
dated May 5, 2000, as certified by the Secretary
of the Company on the date hereof as being
complete, accurate and in effect, relating to
authorization of the Agreement, the Notes, and
arrangements in connection therewith.
7. A certificate of certain officers of the Company, dated
May 8, 2000, as to certain facts relating to the Company.
8. A certificate of the Secretary of the Company, dated May
8, 2000, as to the incumbency and signatures of certain
officers of the Company.
We have not, except as specifically identified above,
made any independent review or investigation of factual or other matters,
including the organization, existence, good standing, assets, business or
affairs of the Company. In our examination of the Agreement and the
aforesaid certificates, records, documents and agreements, we have assumed
the genuineness of all signatures (other than those on behalf of the
Company on the Agreement), the legal capacity of all natural persons, the
accuracy and completeness of all documents submitted to us, the
authenticity of all original documents and the conformity to authentic
original documents of all documents submitted to us as copies (including
telecopies). We also have assumed the accuracy, completeness and
authenticity
D-4-2
▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Administrative Agent
May 8, 2000 Page 3
of the foregoing certifications (of public officials, governmental agencies
and departments, corporate officers and individuals) and statements of
fact, on which we are relying, and have made no independent investigations
thereof. In rendering the following opinions we have relied as to factual
matters, without independent investigation, upon the representations,
warranties and certifications made by the Company in or pursuant to the
Agreement and upon the officers' certificate identified in Paragraph 7
above. This opinion letter is given, and all statements herein are made, in
the context of the foregoing.
As used in this opinion letter, the phrase "to our
knowledge" or concerning matters of which we are aware means the actual
knowledge (that is, the conscious awareness of facts or other information)
of lawyers in the firm who have given substantive legal attention to
representation of the Company in connection with the Agreement.
For purposes of this opinion letter, we have assumed that
(i) each other party to the Agreement (other than the Company) has all
requisite power and authority under all applicable laws, regulations and
governing documents to execute, deliver and perform its obligations under
the Agreement, (ii) each of such other parties has duly authorized,
executed and delivered the Agreement, (iii) each of such other parties is
validly existing and in good standing in all necessary jurisdictions, (iv)
the Agreement constitutes a valid and binding obligation, enforceable
against each of such other parties in accordance with its terms and (v)
there has been no material mutual mistake of fact or misunderstanding or
fraud, duress or undue influence, in connection with the negotiation,
execution or delivery of the Agreement.
This opinion letter is based as to matters of law solely
on applicable provisions of (i) the General Corporation Law of the State of
Maryland, as amended (the "Maryland Corporation Law") and (ii) Maryland law
customarily applicable between borrowers and creditors in transactions of
the type contemplated by the Agreement and the Notes (but not including any
statutes, ordinances, administrative decisions, rules or regulations of any
political subdivision of the State of Maryland)(hereinafter, "Maryland
Law"), and we express no opinion as to any other laws, statutes,
ordinances, rules or regulations (such as federal or state securities laws
or regulations, antitrust or unfair competition laws or regulations or tax
laws or regulations).
For purposes of the opinions set forth in Paragraphs
(d)(ii) and (e), we have inquired of the Company whether the Company
receives licenses or
D-4-3
▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Administrative Agent
May 8, 2000 Page 4
other authorizations or makes filings or registrations with regulatory
authorities in the State of Maryland other than tax filings, securities
filings, corporate filings or insurance filings, and we have received an
officers' certificate from the Company to the effect that it does not. In
addition, based upon our understanding of the business of the Company as
described in the most recent Form 10-K filed by Capital Re Corporation, we
are not aware that the business of the Company requires it to receive or
make any such licenses, authorizations, filings or registrations. On the
basis of this inquiry and response, the opinions expressed in Paragraphs
(d)(ii) and (e) are limited to Maryland Law.
Based upon, subject to and limited by the foregoing, we
are of the opinion that:
(a) The Company was incorporated, and is validly existing
and in good standing as of the date of the certificate specified in
Paragraph 5 above, under the laws of the State of Maryland.
(b) The Company has the corporate power and corporate
authority under its Charter and the Maryland Corporation Law to execute and
deliver the Agreement and the Notes and to perform its obligations
thereunder. The execution, delivery and performance as of the date hereof
by the Company of the Agreement and the Notes have been duly authorized by
all necessary corporate action of the Company.
(c) Each of the Agreement and each Note has been duly
executed and delivered on behalf of the Company.
(d) The execution, delivery and performance as of the
date hereof by the Company of the Agreement and the Notes do not (i)
violate the Maryland Corporation Law or the Charter or bylaws of the
Company, or (ii) to our knowledge, violate any applicable law, rule,
regulation, order, judgment or decree of the State of Maryland.
(e) No approval or consent of, or registration or filing
with, any State of Maryland governmental agency is required to be obtained
or made by the Company in connection with the execution, delivery and
performance as of the date hereof by the Company of the Agreement and the
Notes.
We assume no obligation to advise you of any changes in
the foregoing subsequent to the delivery of this opinion letter. This
opinion letter has been prepared solely for your use in connection with the
closing under the
D-4-4
▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Administrative Agent
May 8, 2000 Page 5
Agreement on the date hereof, and should not be quoted in whole or in part
or otherwise be referred to, nor be filed with or furnished to any
governmental agency or other person or entity, without the prior written
consent of this firm.
Very truly yours,
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
D-4-5
EXHIBIT E
FORM OF DESIGNATION AGREEMENT
dated as of ________________, 2000
Reference is made to the Amended and Restated 364-Day Credit
Agreement dated as of May 8, 2000 (as amended from time to time, the
"Credit Agreement") among ACE Limited (the "Parent") and the other
Borrowers party thereto, the Initial Lenders party thereto, the
Co-Syndication Agents, and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
Administration Agent (the "Administrative Agent"). Terms defined in the
Credit Agreement are used herein with the same meaning.
_________________ (the "Designator") and ________________ (the
"Designee") agree as follows:
1. The Designator designates the Designee as its Designated
Lender under the Credit Agreement and the Designee accepts such
designation.
2. The Designator makes no representations or warranties and
assumes no responsibility with respect to the financial condition of the
Borrowers or the performance or observance by the Borrowers of any of its
obligations under the Credit Agreement or any other instrument or document
furnished pursuant thereto.
3. The Designee (i) confirms that it is an Eligible Designee; (ii)
appoints and authorizes the Designator as its administrative agent and
attorney-in-fact and grants the Designator an irrevocable power of attorney
to receive payments made for the benefit of the Designee under the Credit
Agreement and to deliver and receive all communications and notices under
the Credit Agreement, if any, that the Designee is obligated to deliver or
has the right to receive thereunder; (iii) acknowledges that the Designator
retains the sole right and responsibility to vote under the Credit
Agreement, including, without limitation, the right to approve any
amendment or waiver of any provision of the Credit Agreement, and (iv)
agrees that the Designee shall be bound by all such votes, approvals,
amendments and waivers and all other agreements of the Designator pursuant
to or in connection with the Credit Agreement.
4. The Designee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the most recent financial
statements referred to in Article 4 or delivered pursuant to Article 5
thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Designation Agreement and (ii) agrees that it will, independently and
without reliance upon the Administrative Agent, the
E-1
Designator 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 any action it may be permitted to take
under the Credit Agreement. The Designee acknowledges that it is subject to
and bound by the confidentiality provisions of the Credit Agreement (except
as provided in Section 9.07(a) thereof).
5. Following the execution of this Designation Agreement by the
Designator and the Designee and the consent hereto by the Parent, it will
be delivered to the Administrative Agent for its consent. This Designation
Agreement shall become effective when the Administrative Agent consents
hereto or on any later date specified on the signature page hereof.
6. Upon the effectiveness hereof, the Designee shall have the
right to make Loans or portions thereof as a Lender pursuant to Section
2.01 or 2.03 of the Credit Agreement and the rights of a Lender related
thereto. The making of any such Loans or portions thereof by the Designee
shall satisfy the obligations of the Designator under the Credit Agreement
to the same extent, and as if, such Loans or portions thereof were made by
the Designator.
7. This Designation Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties have caused this Designation
Agreement to be executed by their respective officers hereunto duly
authorized, as of the date first above written.
Effective Date:______ , ____
[NAME OF DESIGNATOR]
By:______________________________
Name:
Title:
[NAME OF DESIGNEE]
By:______________________________
Name:
Title:
The undersigned consent to the foregoing designation.
E-2
ACE LIMITED
By:______________________________
Name:
Title:
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK,
as Administrative Agent
By:______________________________
Name:
Title:
E-3
EXHIBIT F
FORM OF EXTENSION AGREEMENT
The Borrowers
(as defined in the Credit
Agreement referred to below)
▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Administrative Agent
under the Credit Agreement
referred to below
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Effective as of [effective date], the undersigned hereby agree to
extend the Termination Date as now in effect under the Amended and Restated
364-Day Credit Agreement dated as of May 8, 2000 among the Borrowers listed
therein, the Initial Lenders listed therein, the Co-Syndication Agents
referred to therein and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
Administrative Agent (as amended from time to time, the "Credit Agreement")
to [date]. Terms defined in the Credit Agreement are used herein as therein
defined.
This Extension Agreement shall be construed in accordance with and
governed by the law of the State of New York.
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent
By---------------------------------------
Title:
[NAME OF BANK]
By--------------------------------------
Title:
Agreed and accepted:
F-1
ACE LIMITED
The Common Seal of ACE Limited was
hereunto affixed in the presence of:
------------------------------
Director
------------------------------
Secretary
ACE BERMUDA INSURANCE LTD.
The Common Seal of ACE Bermuda
Insurance Ltd. was hereunto affixed
in the presence of:
------------------------------
Director
------------------------------
Secretary
TEMPEST REINSURANCE COMPANY
LIMITED
The Common Seal of Tempest Reinsurance
Company Limited was hereunto affixed
in the presence of:
------------------------------
Director
------------------------------
Secretary
F-2
ACE INA HOLDINGS INC.
By:_______________________________
Title:
ACE GUARANTY RE INC.
By:______________________________
Title:
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK,
as Administrative Agent
By:_______________________________
Title:
BANK OF AMERICA, N.A.,
as Co-Syndication Agent
By:_______________________________
Title:
THE CHASE MANHATTAN BANK,
as Co-Syndication Agent
By:_______________________________
Title:
F-3