[EXECUTION COPY]
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$140,000,000
364-DAY REVOLVING CREDIT FACILITY
CREDIT AGREEMENT
Among
ACE GUARANTY CORP.,
ACE GUARANTY (UK) LTD.
and
THE BANKS PARTY HERETO
and
ABN AMRO BANK N.V.,
As Administrative Agent
Dated as of May 22, 2003
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ABN AMRO INCORPORATED
As Syndication Agent,
Lead Arranger, and Bookrunner
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TABLE OF CONTENTS
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ARTICLE I CERTAIN DEFINITIONS...........................................1
Section 1.01 Certain Definitions ..........................................1
Section 1.02 Construction ................................................17
(a) Number; Inclusion ......................................17
(b) Determination ..........................................17
(c) Agent's Discretion and Consent .........................17
(d) Documents Taken as a Whole .............................18
(e) Headings ...............................................18
(f) Implied References to this Agreement ...................18
(g) Persons ................................................18
(h) Modifications to Documents .............................18
(i) From, To and Through ...................................18
(j) Shall; Will ............................................18
Section 1.03 Accounting Principles; Computations .........................18
ARTICLE II REVOLVING CREDIT AND TERM LOAN FACILITY......................19
Section 2.01 Revolving Credit Commitments; Term Loans ....................19
Section 2.02 Nature of Banks' Obligations with Respect to Revolving
Credit Loans.................................................20
Section 2.03 Facility Fees; Term Loan Fee ................................20
Section 2.04 Utilization Fee .............................................20
Section 2.05 Revolving Credit Loan Requests ..............................20
Section 2.06 Making Revolving Credit Loans ...............................21
Section 2.07 Use of Proceeds .............................................21
Section 2.08 Bid Loan Facility ...........................................21
(a) Bid Loan Requests ......................................21
(b) Bidding ................................................22
(c) Accepting Bids .........................................23
(d) Funding Bid Loans ......................................23
(e) Several Obligations ....................................23
(f) Bid Notes ..............................................24
Section 2.09 Extension by Banks of the Expiration Date ...................24
(a) Requests; Approval by All Banks ........................24
(b) Approval by Required Banks .............................24
Section 2.10 UK Borrower Loans ...........................................24
ARTICLE III INTEREST RATES...............................................25
Section 3.01 Interest Rate Options .......................................25
(a) Revolving Credit Interest Rate Options .................26
(b) Rate Quotations ........................................26
(c) Change in Fees or Interest Rates .......................26
Section 3.02 Committed Loans Interest Periods ............................27
(ii)
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(a) Amount of Borrowing Tranche ............................27
(b) Renewals ...............................................27
Section 3.03 Interest After Default ......................................27
(a) Interest Rate ..........................................27
(b) Other Obligations ......................................27
(c) Acknowledgment .........................................27
Section 3.04 LIBOR Unascertainable; Illegality; Increased Costs;
Deposits Not Available.......................................27
(a) Unascertainable ........................................27
(b) Illegality; Increased Costs; Deposits Not
Available...............................................28
(c) Agent's and Bank's Rights ..............................28
Section 3.05 Selection of Interest Rate Options ..........................29
ARTICLE IV PAYMENTS.....................................................29
Section 4.01 Payments ....................................................29
Section 4.02 Pro Rata Treatment of Banks .................................29
Section 4.03 Interest Payment Dates ......................................30
Section 4.04 Voluntary Prepayments .......................................30
(a) Right to Prepay ........................................30
(b) Replacement of a Bank ..................................31
(c) Change of Lending Office ...............................31
Section 4.05 Reduction or Termination of Commitments .....................32
Section 4.06 Additional Compensation in Certain Circumstances ............32
(a) Increased Costs or Reduced Return Resulting From
Taxes, Reserves, Capital Adequacy Requirements,
Expenses, Etc ..........................................32
(b) Indemnity ..............................................33
Section 4.07 Taxes .......................................................33
(a) No Deductions ..........................................33
(b) Stamp Taxes ............................................34
(c) Indemnification for Taxes Paid by a Bank ...............34
(d) Certificate ............................................34
(e) Survival ...............................................34
Section 4.08 Judgment Currency ...........................................34
(a) Currency Conversion Procedures for Judgments ...........34
(b) Indemnity in Certain Events ............................34
Section 4.09 Notes, Maturity .............................................35
Section 4.10 Mandatory Prepayments .......................................35
ARTICLE V REPRESENTATIONS AND WARRANTIES...............................35
Section 5.01 Representations and Warranties ..............................35
(a) Organization and Qualification .........................35
(b) Capitalization and Subsidiaries ........................36
(c) Power and Authority ....................................36
(d) Validity and Binding Effect ............................36
(e) No Conflict ............................................36
(f) Litigation .............................................36
(iii)
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(g) Title to Properties ....................................37
(h) Financial Statements, Reinsurance Coverage .............37
(i) Use of Proceeds; Margin Stock ..........................37
(j) Full Disclosure ........................................38
(k) Taxes ..................................................38
(l) Consents and Approvals .................................38
(m) No Event of Default; Compliance With Instruments .......38
(n) Licenses, Etc ..........................................38
(o) Insurance ..............................................39
(p) Compliance With Laws ...................................39
(q) Material Contracts; Burdensome Restrictions ............39
(r) Investment Companies; Regulated Entities ...............39
(s) Plans and Benefit Arrangements .........................39
(t) Senior Debt Status .....................................40
Section 5.02 Continuation of Representations .............................41
ARTICLE VI CONDITIONS OF LENDING........................................41
Section 6.01 First Loans .................................................41
(a) Representations and Warranties True and Complete,
No Defaults.............................................41
(b) Secretary's Certificate ................................41
(c) Delivery of Notes, Guaranty Agreements, and Loan
Request.................................................42
(d) Opinion of Counsel .....................................42
(e) Legal Details ..........................................42
(f) Payment of Fees ........................................42
(g) No Material Adverse Change .............................42
(h) Existing Credit Agreement ..............................42
(i) Liens ..................................................42
Section 6.02 Each Additional Loan ........................................42
ARTICLE VII COVENANTS....................................................43
Section 7.01 Affirmative Covenants .......................................43
(a) Preservation of Existence, Etc .........................43
(b) Payment of Liabilities, Including Taxes, Etc ...........43
(c) Maintenance of Insurance ...............................43
(d) Maintenance of Properties and Leases ...................44
(e) Maintenance of Licenses, Etc ...........................44
(f) Visitation Rights ......................................44
(g) Keeping of Records and Books of Account ................44
(h) Plans and Benefit Arrangements .........................44
(i) Compliance With Laws ...................................45
(j) Use of Proceeds ........................................45
(k) Senior Debt Status .....................................45
Section 7.02 Negative Covenants ..........................................45
(a) Indebtedness ...........................................45
(b) Liens ..................................................46
(c) Guaranties .............................................46
(iv)
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(d) Loans and Investments ..................................46
(e) Dividends and Related Distributions ....................47
(f) Liquidations, Mergers, Consolidations,
Acquisitions............................................47
(g) Dispositions of Assets or Subsidiaries .................48
(h) Affiliate Transactions .................................49
(i) Subsidiaries, Partnerships and Joint Ventures ..........49
(j) Continuation of or Change in Business ..................49
(k) Plans and Benefit Arrangements .........................50
(l) Fiscal Year ............................................50
(m) Minimum Statutory Capital ..............................50
(n) Maximum Exposure Ratio .................................50
(o) Maximum Debt to Total Capitalization Ratio .............50
(p) Maximum Collateralized Credit Derivative
Guaranties..............................................50
Section 7.03 Reporting Requirements ......................................51
(a) Quarterly Financial Statements .........................51
(b) Annual Financial Statements ............................51
(c) Certificate of the Company .............................51
(d) Notice of Default ......................................52
(e) Off-Balance Sheet Financing ............................52
(f) Notice of Litigation ...................................52
(g) Notice of Change in Insurer Financial Strength
Rating..................................................52
(h) Sale of Assets .........................................53
(i) Budgets, Other Reports and Information .................53
ARTICLE VIII DEFAULT......................................................53
Section 8.01 Events of Default ...........................................53
(a) Payments Under Loan Documents ..........................53
(b) Breach of Warranty .....................................53
(c) Breach of Negative Covenants or Visitation Rights ......53
(d) Breach of Other Covenants ..............................53
(e) Defaults in Other Agreements or Indebtedness ...........53
(f) Final Judgments or Orders ..............................54
(g) Loan Document Unenforceable ............................54
(h) Losses; Proceedings Against Assets .....................54
(i) Notice of Lien or Assessment ...........................54
(j) Insolvency .............................................54
(k) Events Relating to Plans and Benefit Arrangements ......55
(l) Change of Control ......................................55
(m) Involuntary Proceedings ................................55
(n) Voluntary Proceedings ..................................56
Section 8.02 Consequences of Event of Default ............................56
(a) Events of Default Other Than Bankruptcy,
Insolvency or Reorganization Proceedings ...............56
(b) Bankruptcy, Insolvency or Reorganization
Proceedings.............................................56
(c) Set-off ................................................56
(d) Suits, Actions, Proceedings ............................57
(v)
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(e) Application of Proceeds ................................57
(f) Other Rights and Remedies ..............................57
Section 8.03 Right of Competitive Bid Loan Banks .........................57
ARTICLE IX THE AGENT....................................................58
Section 9.01 Appointment .................................................58
Section 9.02 Delegation of Duties ........................................58
Section 9.03 Nature of Duties; Independent Credit Investigation ..........58
Section 9.04 Actions in Discretion of Agent; Instructions From
the Banks....................................................59
Section 9.05 Reimbursement and Indemnification of Agent by the
Borrowers....................................................59
Section 9.06 Exculpatory Provisions; Limitation of Liability .............59
Section 9.07 Reimbursement and Indemnification of Agent by Banks .........60
Section 9.08 Reliance by Agent ...........................................61
Section 9.09 Notice of Default ...........................................61
Section 9.10 Notices .....................................................61
Section 9.11 Banks in Their Individual Capacities; Agents in Its
Individual Capacity..........................................61
Section 9.12 Holders of Notes ............................................62
Section 9.13 Equalization of Banks .......................................62
Section 9.14 Successor Agent .............................................62
Section 9.15 Agent's Fee .................................................62
Section 9.16 Availability of Funds .......................................63
Section 9.17 Calculations ................................................63
Section 9.18 Beneficiaries ...............................................63
ARTICLE X MISCELLANEOUS................................................63
Section 10.01 Modifications, Amendments, or Waivers .......................63
(a) Increase of Commitment; Extension of Expiration
Date....................................................64
(b) Extension of Payment; Reduction of Principal
Interest or Fees; Modification of Terms of Payment .....64
(c) Release of Collateral or Guarantor .....................64
(d) Miscellaneous ..........................................64
Section 10.02 No Implied Waivers; Cumulative Remedies; Writing
Required.....................................................64
Section 10.03 Reimbursement and Indemnification of Banks by the
Borrower; Taxes..............................................65
Section 10.04 Holidays ....................................................65
Section 10.05 Funding by Branch, Subsidiary, or Affiliate .................66
(a) Notional Funding .......................................66
(b) Actual Funding .........................................66
Section 10.06 Notices .....................................................66
Section 10.07 Severability ................................................67
Section 10.08 Governing Law ...............................................67
Section 10.09 Prior Understanding .........................................67
Section 10.10 Duration; Survival ..........................................67
Section 10.11 Successors and Assigns ......................................68
Section 10.12 Confidentiality .............................................69
(a) General ................................................69
(b) Sharing Information With Affiliates of the Banks .......69
(vi)
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(c) Disclosures of Tax Treatment ...........................70
Section 10.13 Counterparts ................................................70
Section 10.14 Agent's or Bank's Consent ...................................70
Section 10.15 Exceptions ..................................................70
Section 10.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL ......................70
Section 10.17 Tax Withholding Clause ......................................71
Section 10.18 Joinder of Guarantors .......................................72
LIST OF SCHEDULES AND EXHIBITS
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SCHEDULES
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SCHEDULE 1.01(A) - PRICING GRID
SCHEDULE 1.01(B) - COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
SCHEDULE 1.01(P) - EXISTING LIENS
SCHEDULE 5.01(h) - REINSURANCE COVERAGE
SCHEDULE 7.02(a) - EXISTING INDEBTEDNESS
EXHIBITS
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EXHIBIT 1.01(A) - ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.01(B) - BID NOTE
EXHIBIT 1.01(G)(1) - GUARANTOR JOINDER
EXHIBIT 1.01(G)(2)-1 - GUARANTY AGREEMENT OF ACE LIMITED
EXHIBIT 1.01(G)(2)-2 - GUARANTY AGREEMENT OF MATERIAL SUBSIDIARIES
EXHIBIT 1.01(G)(2)-3 - GUARANTY AGREEMENT OF ACE GUARANTY CORP.
EXHIBIT 1.01(R) - REVOLVING CREDIT/TERM LOAN NOTE
EXHIBIT 2.05 - COMMITTED LOAN REQUEST
EXHIBIT 2.08(a) - BID LOAN REQUEST
EXHIBIT 6.01(d) - OPINION(S) OF COUNSEL
EXHIBIT 7.03(c) - QUARTERLY COMPLIANCE CERTIFICATE
(vii)
CREDIT AGREEMENT
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THIS CREDIT AGREEMENT is dated as of May 22, 2003, and is made by and
among ACE GUARANTY CORP., a Maryland corporation (the "Company"), ACE GUARANTY
(UK) LTD., a company organized under the laws of England and Wales (the "UK
Borrower"), the BANKS (as hereinafter defined), and ABN AMRO BANK N.V., in its
capacity as administrative agent for the Banks under this Agreement (hereinafter
referred to in such capacity as the "Agent") and sole bookrunner.
WITNESSETH:
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WHEREAS, the Borrowers have requested the Banks to provide a 364-day
revolving credit facility to the Borrowers in an aggregate principal amount not
to exceed the Commitments of the Banks; and
WHEREAS, such revolving credit facility shall be used for the general
corporate purposes of the Borrowers; and
WHEREAS, the Banks are willing to provide such credit upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth, hereby covenant and agree as
follows:
ARTICLE I
CERTAIN DEFINITIONS
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Section 1.01 Certain Definitions. In addition to words and terms
defined elsewhere in this Agreement, the following words and terms shall have
the following meanings, respectively, unless the context hereof clearly requires
otherwise:
ABN AMRO Bank or ABN AMRO shall mean ABN AMRO Bank N.V., its
successors and assigns.
ACE shall mean ACE Limited, a Cayman Islands company.
Affiliate as to any Person shall mean any other Person (i) which
directly or indirectly controls, is controlled by, or is under common control
with, such Person, (ii) which beneficially owns or holds 5% or more of any class
of the voting or other equity interests of such Person, or (iii) 5% or more of
any class of voting interests or other equity interests of which is beneficially
owned or held, directly or indirectly, by such Person. Control, as used in this
definition, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting
securities, by contract or otherwise, including the power to elect a majority of
the directors or trustees of a corporation or trust, as the case may be.
Agent shall mean ABN AMRO Bank N.V., and its successors and assigns,
in its capacity as administrative agent for the Banks under this Agreement.
Agent's Fee shall have the meaning assigned to that term in Section
9.15.
Agent's Letter shall have the meaning assigned to that term in Section
9.15.
Aggregate Loan Outstandings shall have the meaning assigned to that
term in Section 4.10(a).
Agreement shall mean this Credit Agreement, as the same may be
supplemented or amended from time to time, including all schedules and exhibits.
Alternate Currency shall mean each of Euros and Pounds Sterling.
Alternate Currency Loan shall mean any Loan denominated in an
Alternate Currency.
Approved Currency shall mean each of Dollars and each Alternate
Currency.
Applicable Facility Fee Rate shall mean the percentage rate per annum
corresponding to the indicated level of Insurer Financial Strength Rating in the
pricing grid on Schedule 1.01(A) below the heading "Facility Fee." The
Applicable Facility Fee Rate shall be computed in accordance with the parameters
set forth on Schedule 1.01(A).
Applicable Margin shall mean, as applicable:
(A) the percentage spread to be added to Base Rate under the Revolving
Credit Base Rate Option or the Term Loan Base Rate Option corresponding to
the indicated level of Insurer Financial Strength Rating in the pricing
grid on Schedule 1.01(A) below the heading "Revolving Credit Base Rate
Spread," or
(B) the percentage spread to be added to LIBOR under the Revolving
Credit LIBOR Option or the Term Loan LIBOR Option corresponding to the
indicated level of Insurer Financial Strength Rating in the pricing grid on
Schedule 1.01(A) below the heading "Revolving Credit LIBOR Spread."
The Applicable Margin shall be computed in accordance with the
parameters set forth on Schedule 1.01(A).
Applicable Usage Premium shall mean the percentage rate per annum
corresponding to the indicated level of Insurer Financial Strength Rating in the
pricing grid on Schedule 1.01(A) below the heading "Usage Premium." The
Applicable Usage Premium shall be computed in accordance with the parameters set
forth on Schedule 1.01(A).
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Assignee Bank shall have the meaning assigned to such term in Section
2.09(b).
Assignment and Assumption Agreement shall mean an Assignment and
Assumption Agreement by and among a Purchasing Bank, a Transferor Bank and the
Agent, as Agent and on behalf of the remaining Banks, substantially in the form
of Exhibit 1.01(A).
Associated Cost Rate shall mean, with respect to any Interest Period
for Pounds Sterling denominated Loans, the amount (expressed as a percentage
rate per annum, rounded up to the nearest four decimal places, as determined by
the Agent on the first day of such Interest Period) required to compensate the
Banks lending from facility offices in the United Kingdom for the portion of the
cost of each such Bank of complying with the cash ratio and special deposit
requirements of the Bank of England and/or capital adequacy requirements and
banking supervision or other fees imposed by the United Kingdom Financial
Services Authority, which, in the reasonable determination of such Bank, is
attributable to the Loans made by such Bank from its facility office in the
United Kingdom and outstanding during such Interest Period.
Authorized Officer shall mean those individuals, designated by written
notice to the Agent from each Borrower, authorized to execute notices, reports
and other documents on behalf of such Borrower required hereunder. Each Borrower
may amend such list of individuals from time to time by giving written notice of
such amendment to the Agent.
Bank to be Terminated shall have the meaning assigned to such term in
Section 2.09(b).
Banks shall mean the financial institutions named on Schedule 1.01(B)
and their respective successors and assigns as permitted hereunder, each of
which is referred to herein as a Bank.
Base Rate shall mean the greater of (i) the interest rate per annum
announced from time to time by the Agent at its Principal Office as its then
prime rate, which rate may not be the lowest rate then being charged commercial
borrowers by the Agent, or (ii) the Federal Funds Effective Rate plus 0.5% per
annum.
Base Rate Option shall mean the Revolving Credit Base Rate Option or
the Term Loan Base Rate Option, as the case may be.
Benefit Arrangement shall mean at any time an "employee benefit plan,"
within the meaning of Section 3(3) of ERISA, which is neither a Plan nor a
Multiemployer Plan and which is maintained, sponsored or otherwise contributed
to by any member of the ERISA Group.
Bid shall have the meaning assigned to such term in Section 2.08(b).
Bid Deadline shall have the meaning assigned to such term in Section
2.08(b).
Bid Loan Borrowing Date shall mean, with respect to any Bid Loan, the
date for the making thereof which shall be a Business Day.
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Bid Loan LIBOR Rate Option shall mean the option of each Borrower to
request that the Banks submit Bids to make Bid Loans bearing interest at a rate
per annum quoted by such Banks at the LIBOR in effect two Business Days before
the Borrowing Date of such Bid Loan plus a LIBOR Bid Loan Spread.
Bid Loan Fixed Rate Option shall mean the option of each Borrower to
request that the Banks submit Bids to make Bid Loans bearing interest at a fixed
rate per annum quoted by such Banks as a numerical percentage (and not as a
spread over another rate such as the LIBOR).
Bid Loan Interest Period shall have the meaning assigned to such term
in Section 2.08(a).
Bid Loan Request shall have the meaning assigned to such term in
Section 2.08(b).
Bid Loans shall mean collectively all of the Bid Loans and Bid Loan
shall mean separately any Bid Loan, made by any of the Banks to either Borrower
pursuant to Section 2.08.
Bid Notes shall mean collectively all of the Bid Notes and Bid Note
shall mean separately any Bid Note, of each Borrower in the form of Exhibit
1.01(B) evidencing the Bid Loans made to such Borrower together with all
amendments, extensions, renewals, replacements, refinancings or refunds thereof
in whole or in part.
Borrower shall mean each of the Company and the UK Borrower.
Borrowing Date shall mean, with respect to any Loan, the date for the
making thereof or the renewal or conversion thereof at or to the same or a
different Interest Rate Option, which shall be a Business Day.
Borrowing Tranche shall mean specified portions of Loans outstanding
as follows: (i) any Loans to which a LIBOR Option or a Bid Loan Fixed Rate
Option applies which become subject to the same Interest Rate Option under the
same Loan Request by a Borrower and which have the same Interest Period shall
constitute one Borrowing Tranche, and (ii) all Loans to which a Base Rate Option
applies shall constitute one Borrowing Tranche.
Business Day shall mean any day other than a Saturday or Sunday or a
legal holiday on which commercial banks are authorized or required to be closed
for business in New York, New York and, if the applicable Business Day relates
to any Loan to which the LIBOR Option applies, such day must also be a day on
which dealings are carried on in the London interbank market and, with respect
to any payments due under the Guaranty given by ACE Limited, such day must also
be a day which is not a national holiday in Bermuda.
Closing Date shall mean May 22, 2003.
Commitment shall mean as to any Bank its Revolving Credit Commitment,
and Commitments shall mean the aggregate of the Revolving Credit Commitments of
all of the Banks.
-4-
Committed Loan shall mean a Revolving Credit Loan or a Term Loan, as
the case may be.
Committed Loan Interest Period shall mean the period of time selected
by the respective Borrower in connection with (and to apply to) any election
permitted hereunder by such Borrower to have Revolving Credit Loans or Term
Loans bear interest under the LIBOR Option. Subject to the last sentence of this
definition, such period shall be one, two, three or six Months. Such Interest
Period shall commence on the effective date of borrowing of any Loan bearing
interest at a rate determined with reference to such Interest Rate Option, which
shall be (i) the Borrowing Date if the respective Borrower is requesting new
Loans, or (ii) the date of renewal of or conversion to the LIBOR Option if the
Borrower is renewing or converting to the LIBOR Option applicable to outstanding
Loans. Notwithstanding the second sentence hereof: (A) any Interest Period which
would otherwise end on a date which is not a Business Day shall be extended to
the next succeeding Business Day unless such Business Day falls in the next
calendar month, in which case such Interest Period shall end on the directly
preceding Business Day, and (B) such Borrower shall not select, convert to or
renew an Interest Period for any portion of the Loans that would end after the
Term Loan Maturity Date.
Committed Loan LIBOR Option shall mean a Revolving Credit Loan LIBOR
Option and a Term Loan LIBOR Option.
Committed Loan Request shall mean a request for a Revolving Credit
Loan or a request to select, convert to or renew a Base Rate Option or LIBOR
Option with respect to an outstanding Revolving Credit Loan or Term Loan in
accordance with Section 2.05, Section 3.01 and Section 3.02.
Company shall mean ACE Guaranty Corp., a Maryland corporation.
Compliance Certificate shall have the meaning assigned to such term in
Section 7.03(c).
Consideration shall mean a greater than de minimis monetary return for
the sale or provision of a service or product or for the undertaking of an
obligation or liability, except that with respect to a Permitted Acquisition,
Consideration shall mean the aggregate of (i) the cash paid by any of the
Company or any Material Subsidiary, directly or indirectly, to the seller in
connection with such Permitted Acquisition, (ii) the Indebtedness incurred or
assumed by the Company or any of the Material Subsidiaries with respect to such
Permitted Acquisition, whether in favor of the seller or otherwise and whether
fixed or contingent, (iii) any Guaranty given or incurred by the Company or any
Material Subsidiary in connection therewith, and (iv) any other consideration
given or obligation incurred by the Company or any of the Material Subsidiaries
in connection with such Permitted Acquisition.
Consolidated Debt shall mean, at any time, an amount equal to the sum
(without duplication) of the then outstanding Indebtedness of the Company and of
each Subsidiary of the Company (excluding, however, the amount of all
Insurance-Related Guaranties and excluding all Soft Capital), determined and
consolidated in accordance with GAAP.
-5-
Credit Derivative Guaranties shall have the meaning assigned to such
term in Section 7.02(c).
Dollar, Dollars, U.S. Dollars and the symbol $ shall mean lawful money
of the United States of America.
Dollar Equivalent shall mean, at any time for the determination
thereof, the amount of Dollars which could be purchased with the amount of the
relevant Alternate Currency involved in such computation at the spot exchange
rate therefor as quoted by the Administrative Agent as of 11:00 A.M., London
time, on the date two Business Days prior to the date of any determination
thereof for purchase on such date.
ERISA shall mean the Employee Retirement Income Security Act of 1974,
as the same may be amended or supplemented from time to time, and any successor
statute of similar import, and the rules and regulations thereunder, as from
time to time in effect.
ERISA Group shall mean, at any time, the Company and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control and all other entities which, together with
the Company, are treated as a single employer under Section 414 of the Internal
Revenue Code.
Euro shall mean the single currency of participating member states of
the European Union.
Euro-LIBOR shall mean, with respect to the Loans comprising any
Borrowing Tranche denominated in Euros to which the LIBOR Option applies for any
Interest Period, an interest rate per annum determined on the basis of the rate
for deposits in Euros for a period comparable to such Interest Period commencing
on the first day of such Interest Period appearing on Page 3750 of the Telerate
screen as of 11:00 A.M., London time, two Business Days prior to the beginning
of such Interest Period. In the event that such rate does not appear on Page
3750 of the Telerate screen (or otherwise on such screen), Euro LIBOR shall be
determined by reference to such other publicly available service for displaying
Euro-denominated rates as may be agreed upon by the Agent and the Borrowers or,
in the absence of such agreement, the Euro LIBOR shall be the rate of interest
per annum determined by the Agent in accordance with its usual procedures (which
determination shall be conclusive absent manifest error) equal to the rate per
annum at which Euro deposits approximately equal in principal amount to such
Borrowing Tranche for a period and with a maturity comparable to such Interest
Period are offered to the principal London office of Agent in immediately
available funds in the London interbank market at approximately 11:00 A.M.,
London time, two Business Days prior to the commencement of such Interest
Period. The Agent shall give prompt notice to the Borrowers of the Euro LIBOR as
determined or adjusted in accordance herewith, which determination shall be
conclusive absent manifest error.
Eurodollar Rate shall mean, with respect to the Loans comprising any
Borrowing Tranche denominated in Dollars to which the LIBOR Option applies for
any Interest Period, an interest rate per annum determined on the basis of the
rate for deposits in Dollars for a period comparable to such Interest Period
commencing on the first day of such Interest Period
-6-
appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London time, two
Business Days prior to the beginning of such Interest Period. In the event that
such rate does not appear on Page 3750 of the Telerate screen (or otherwise on
such screen), the Eurodollar Rate shall be determined by reference to such other
publicly available service for displaying eurodollar rates as may be agreed upon
by the Agent and the Borrowers or, in the absence of such agreement, the
Eurodollar Rate shall be the rate of interest per annum determined by the Agent
in accordance with its usual procedures (which determination shall be conclusive
absent manifest error) equal to the rate per annum at which Dollar deposits
approximately equal in principal amount to such Borrowing Tranche for a period
and with a maturity comparable to such Interest Period are offered to the
principal London office of Agent in immediately available funds in the London
interbank market at approximately 11:00 A.M., London time, two Business Days
prior to the commencement of such Interest Period. The Agent shall give prompt
notice to the Borrowers of the Eurodollar Rate as determined or adjusted in
accordance herewith, which determination shall be conclusive absent manifest
error.
Eurodollar Reserve Percentage shall mean as of any day and with
respect to any Bank or the Agent the maximum percentage in effect on such day
for such Bank or the Agent, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the reserve
requirements as it affects such Bank or the Agent (including supplemental,
marginal and emergency reserve requirements) with respect to eurocurrency
funding (currently referred to as "Eurocurrency Liabilities").
Event of Default shall mean any of the events described in Section
8.01 and referred to therein as an "Event of Default."
Existing Credit Agreement shall mean the Credit Agreement, dated as of
May 30, 2002, among the Company (formerly known as Ace Guaranty Re Inc.), the
banks party thereto, ABN AMRO Bank N.V., as administrative agent, and ABN AMRO
Incorporated, as syndication agent, lead arranger and bookrunner.
Existing Reinsurance Coverage shall have the meaning assigned to such
term in Section 5.01(h)(C).
Expiration Date shall mean, with respect to the Revolving Credit
Commitments, May 20, 2004, or such later date as determined pursuant to Section
2.09.
Extending Bank shall have the meaning assigned to such term in Section
2.09(b).
Facility Fee shall have the meaning assigned to that term in Section
2.03.
Facility Usage shall mean at any time the sum of the principal amount
of the Revolving Credit Loans or Term Loans, as the case may be, outstanding
and, solely for purposes of Section 2.04, the principal amount of the Bid Loans
outstanding.
Federal Funds Effective Rate for any day shall mean the rate per annum
(based on a year of 360 days and actual days elapsed and rounded upward to the
nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates on overnight
federal funds transactions arranged by federal
-7-
funds brokers on the previous trading day, as computed and announced by such
Federal Reserve Bank (or any successor) in substantially the same manner as such
Federal Reserve Bank computes and announces the weighted average it refers to as
the "Federal Funds Effective Rate" as of the date of this Agreement; provided,
if such Federal Reserve Bank (or its successor) does not announce such rate on
any day, the "Federal Funds Effective Rate" for such day shall be the Federal
Funds Effective Rate for the last day on which such rate was announced.
Fixed Rate shall mean a fixed interest rate quoted by a Bank in its
Bid to apply to such Bank's Bid Loan over the term of such Bid Loan if such
Bank's Bid is accepted.
Fixed Rate Bid Loan shall mean a Bid Loan that bears interest under
the Bid Loan Fixed Rate Option.
GAAP shall mean generally accepted accounting principles as in effect
from time to time in the United States, subject to the provisions of Section
1.03, applied on a consistent basis both as to classification of items and
amounts.
Guarantor shall mean ACE, the Company and each Material Subsidiary
which hereafter joins this Agreement as a Guarantor after the date hereof
pursuant to Section 10.18.
Guarantor Joinder shall mean a joinder by a Person as a Guarantor
under this Agreement, the Guaranty Agreement and the other Loan Documents in the
form of Exhibit 1.01(G)(1).
Guaranty of any Person shall mean any obligation of such Person
guarantying or in effect guarantying any liability or obligation of any other
Person in any manner, whether directly or indirectly, including any agreement to
indemnify or hold harmless any other Person (other than as an incidental part of
another transaction), any performance bond or other suretyship arrangement and
any other form of assurance against loss, except endorsement of negotiable or
other instruments for deposit or collection in the ordinary course of business.
Guaranty Agreement shall mean one or more Guaranty Agreements in
substantially the form of Exhibit 1.01(G)(2)-1, Exhibit 1.01(G)(2)-2 or Exhibit
1.01(G)(2)-3 executed and delivered by each of the Guarantors to the Agent for
the benefit of the Banks.
Historical Statements shall have the meaning assigned to that term in
Section 5.01(h)(A).
Indebtedness shall mean, as to any Person at any time, any and all
indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such Person for or in respect of: (i) borrowed money, (ii)
amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) payment obligations (contingent or otherwise)
under any letter of credit, currency swap agreement, interest rate swap, cap,
collar or floor agreement or other interest rate management device, (iv) any
other transaction (including forward sale or purchase agreements, capitalized
leases and conditional sales agreements) having the commercial effect of a
borrowing of money entered into by such Person to finance its operations or
capital requirements (but not including trade payables and accrued expenses
incurred in the ordinary
-8-
course of business which are not represented by a promissory note or other
evidence of indebtedness and which are not more than ninety (90) days past due),
or (v) any Guaranty of Indebtedness. For the avoidance of doubt, Indebtedness
does not include the mere commitment (whether or not set forth in a credit
agreement or otherwise), in favor of a Person, to advance funds or provide other
financial accommodations to the extent that no such funds or financial
accommodations are advanced or provided.
Insolvency Proceeding shall mean, with respect to any Person, (a) a
case, action or proceeding with respect to such Person (i) before any court or
any other Official Body under any bankruptcy, insolvency, reorganization or
other similar Law now or hereafter in effect, or (ii) for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of the Company or any Material Subsidiary or otherwise
relating to the liquidation, dissolution, winding-up or relief of such Person,
or (b) any general assignment for the benefit of creditors, composition,
marshaling of assets for creditors, or other similar arrangement in respect of
such Person's creditors generally or any substantial portion of its creditors,
undertaken under any Law.
Insurance-Related Guaranties shall have the meaning assigned to that
term in Section 7.02(c).
Insurer Financial Strength Rating shall mean the insurer financial
strength rating of the Company as determined by each of Standard & Poor's and
Moody's.
Interest Period shall mean either a Committed Loan Interest Period or
a Bid Loan Interest Period.
Interest Rate Hedge shall mean an interest rate exchange, collar, cap,
swap, adjustable strike cap, adjustable strike corridor, or similar agreements
entered into by the Company or any Material Subsidiary in order to provide
protection to, or minimize the impact upon, the Company or any Material
Subsidiary of increasing floating rates of interest applicable to Indebtedness.
Interest Rate Option shall mean any Committed Loan LIBOR Option, Bid
Loan LIBOR Option, Bid Loan Fixed Rate Option, or Base Rate Option.
Internal Revenue Code shall mean the Internal Revenue Code of 1986, as
the same may be amended or supplemented from time to time, and any successor
statute of similar import, and the rules and regulations thereunder, as from
time to time in effect.
Law shall mean any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree, bond, judgment, authorization, or approval, lien or
award of or settlement agreement with any Official Body.
LIBOR shall mean, with respect to any Borrowing Tranche of Loans, the
relevant interest rate, i.e., Eurodollar Rate, Euro LIBOR or Sterling LIBOR.
-9-
LIBOR Bid Loan shall mean any Bid Loan that bears interest under the
Bid Loan LIBOR Option.
LIBOR Bid Loan Spread shall mean the spread quoted by a Bank in its
Bid to apply to such Bank's Bid Loan if such Bank's Bid is accepted. The LIBOR
Bid Loan Spread shall be quoted as a percentage rate per annum and expressed in
multiples of 1/1000th of one percentage point to be either added to (if it is
positive) or subtracted from (if it is negative) the LIBOR in effect two (2)
Business Days before the Borrowing Date with respect to such Bid Loan. Interest
on LIBOR Bid Loans shall be computed based on a year of 360 days for the actual
days elapsed.
LIBOR Interest Period shall mean the Interest Period applicable to a
LIBOR Bid Loan, a Revolving Credit Loan that is subject to the Revolving Credit
LIBOR Option or a Term Loan that is subject to the Term Loan LIBOR Option.
LIBOR Option shall mean either the Revolving Credit LIBOR Option, the
Term Loan LIBOR Option or the Bid Loan Euro-Rate Option.
Lien shall mean any mortgage, deed of trust, pledge, lien, security
interest, charge, or other encumbrance or security arrangement of any nature
whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement, or lease intended as, or having the effect of, security and any
filed financing statement or other notice of any of the foregoing (whether or
not a lien or other encumbrance is created or exists at the time of the filing).
Loan Documents shall mean this Agreement, the Agent's Letter, the
Guaranty Agreement, and any other instruments, certificates, or documents
delivered or contemplated to be delivered hereunder or thereunder or in
connection herewith or therewith, as the same may be supplemented or amended
from time to time in accordance herewith or therewith, and Loan Document shall
mean any of the Loan Documents.
Loan Request shall mean either a Bid Loan Request or a Committed Loan
Request.
Loans shall mean collectively all Revolving Credit Loans, Term Loans
and Bid Loans and Loan shall mean separately any Revolving Credit Loan, Term
Loan or Bid Loan.
Material Adverse Change shall mean any set of circumstances or events
which (a) has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of this Agreement or any
other Loan Document, (b) is or could reasonably be expected to be material and
adverse to the business, properties, assets, financial condition, results of
operations or prospects of the Company and the Material Subsidiaries taken as a
whole, (c) impairs materially or could reasonably be expected to impair
materially the ability of the Company and the Material Subsidiaries taken as a
whole to duly and punctually pay or perform its obligations under the Loan
Documents, or (d) impairs materially or could reasonably be expected to impair
materially the ability of the Agent or any of the Banks, to the extent
permitted, to enforce their legal remedies pursuant to this Agreement or any
other Loan Document.
-10-
Material Subsidiary shall mean (i) any Subsidiary of the Company which
has at any time, or which will have after giving effect to any contemplated
transaction, acquisition, loan or investment, a net worth equal to or greater
than an amount which is the greater of five percent (5%) of the consolidated
tangible net worth of the Company and its Subsidiaries or $25,000,000, (ii) any
Subsidiary of the Company as to which the Company requests in writing that it be
a Material Subsidiary, and (iii) any Subsidiary or Subsidiaries of the Company
which own(s) in the aggregate 30% or more of any Material Subsidiary; and
Material Subsidiaries shall mean all such Subsidiaries. Notwithstanding the
foregoing, the UK Borrower shall be deemed to be a Material Subsidiary for all
purposes in this Agreement and the other Loan Documents; provided, however that
the UK Borrower shall not be required to be a Guarantor.
Month, with respect to an Interest Period under the LIBOR Option,
shall mean the interval between the days in consecutive calendar months
numerically corresponding to the first day of such Interest Period. If any LIBOR
Interest Period begins on a day of a calendar month for which there is no
numerically corresponding day in the month in which such Interest Period is to
end, the final month of such Interest Period shall be deemed to end on the last
Business Day of such final month.
Moody's shall mean ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
Multiemployer Plan shall mean any employee benefit plan which is a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which the Company or any member of the ERISA Group is then making or accruing an
obligation to make contributions or, within the preceding five Plan years, has
made or had an obligation to make such contributions.
Multiple Employer Plan shall mean a Plan which has two or more
contributing sponsors (including the Company or any member of the ERISA Group)
at least two of whom are not under common control, as such a plan is described
in Sections 4063 and 4064 of ERISA.
Net Par shall mean the aggregate maximum par amount of insurance and
reinsurance coverage under all obligations of insurance or reinsurance (or
similar arrangements) provided by a Person minus the aggregate maximum par
amount of reinsurance (or similar arrangements including hedging arrangements)
coverage in favor of such Person with respect to its insurance or reinsurance
obligations.
Notes shall mean the Revolving Credit/Term Loan Notes and Bid Notes.
Notices shall have the meaning assigned to that term in Section 10.06.
Obligation shall mean any obligation or liability of either Borrower,
any Material Subsidiary, or ACE to the Agent or any of the Banks, howsoever
created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, under or in
connection with this Agreement, any Notes, the Agent's Letter or any other Loan
Document.
Off-Balance Sheet Transactions shall have the meaning assigned to that
term in Section 7.03(e).
-11-
Offered Amount shall have the meaning assigned to such term in Section
2.08(b).
Official Body shall mean any national, federal, state, local, or other
government or political subdivision or any agency, authority, board, bureau,
central bank, commission, department, or instrumentality of either, or any
court, tribunal, grand jury, or arbitrator, in each case whether foreign or
domestic.
PBGC shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor.
Permitted Acquisitions shall have the meaning assigned to such term in
Section 7.02(f).
Permitted Investments shall mean:
(i) direct obligations of the United States of America or the
United Kingdom or any agency or instrumentality thereof or obligations
backed by the full faith and credit of the United States of America or the
United Kingdom maturing in twelve (12) months or less from the date of
acquisition;
(ii) commercial paper maturing in 180 days or less rated not lower
than A-1, by Standard & Poor's or P-1 by Moody's on the date of
acquisition;
(iii) demand deposits, time deposits or certificates of deposit
maturing within one year in commercial banks whose obligations are rated
A-1, A or the equivalent or better by Standard & Poor's on the date of
acquisition; and
(iv) fixed income securities with a weighted average credit quality
of A by Standard & Poor's or A2 by Moody's on the date of acquisition; and
(v) investments of the types specified in Section 1402(b) and
1404(a)(1), (2), (3), (8), and (10) of the New York Insurance Law.
Permitted Liens shall mean:
(i) Liens for taxes, assessments, or similar charges, incurred in
the ordinary course of business and which are not yet due and payable;
(ii) Pledges or deposits made in the ordinary course of business of
the Company or any Material Subsidiary to secure payment of workmen's
compensation, or to participate in any fund in connection with workmen's
compensation, unemployment insurance, old-age pensions or other social
security programs with respect to such Person's officers or employees;
(iii) Liens of mechanics, materialmen, warehousemen, carriers, or
other like Liens, securing obligations incurred in the ordinary course of
business that are not yet due and payable and Liens of landlords securing
obligations to pay lease payments that are not yet due and payable or in
default;
-12-
(iv) Good-faith pledges or deposits made in the ordinary course of
business of the Company or any Material Subsidiary to secure statutory or
regulatory obligations of the Company or any Material Subsidiary;
(v) Encumbrances consisting of zoning restrictions, easements or
other restrictions on the use of real property, none of which materially
impairs the use of such property or the value thereof, and none of which is
violated in any material respect by existing or proposed structures or land
use;
(vi) Liens, security interests and mortgages in favor of the Agent
for the benefit of the Banks securing the Obligations;
(vii) Liens on property leased by the Company or any Material
Subsidiary under capital and operating leases;
(viii) Any Lien existing on the date of this Agreement securing
payment of non-recourse Indebtedness and described on Schedule 1.01(P),
provided that the principal amount secured thereby is not hereafter
increased;
(ix) Purchase Money Security Interests;
(x) Liens on assets received by any Borrower from a third Person
and held in trust by any Borrower in respect of liabilities assumed by any
Borrower in the course of the reinsurance business of such Borrower;
(xi) Liens securing Credit Derivative Guaranties, subject, however,
to the terms of Section 7.02(p); and
(xii) The following, (A) if the validity or amount thereof is being
contested in good faith by appropriate and lawful proceedings diligently
conducted so long as levy and execution thereon have been stayed and
continue to be stayed or (B) if a final judgment is entered and such
judgment is discharged within thirty (30) days of entry, and they do not in
the aggregate materially impair the ability of any Borrower or any Material
Subsidiary to perform its Obligations hereunder or under the other Loan
Documents:
(1) Claims or Liens for taxes, assessments or charges due and
payable and subject to interest or penalty, provided that the
applicable Borrower or applicable Material Subsidiary maintains such
reserves or other appropriate provisions as shall be required by GAAP
and pays all such taxes, assessments or charges forthwith upon the
commencement of proceedings to foreclose any such Lien;
(2) Claims, Liens, or encumbrances upon, and defects of title
to, real or personal property, including any attachment of personal or
real property or other legal process prior to adjudication of a
dispute on the merits;
(3) Claims or Liens of mechanics, materialmen, warehousemen,
carriers, or other statutory nonconsensual Liens; or
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(4) Liens resulting from final judgments or orders described
in Section 8.01(f).
Person shall mean any individual, corporation, partnership, limited
liability company, association, joint-stock company, trust, unincorporated
organization, joint venture, government or political subdivision or agency
thereof, or any other entity.
Plan shall mean at any time an employee pension benefit plan
(including a Multiple Employer Plan, but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Internal Revenue Code and either (i) is maintained by
any member of the ERISA Group for employees of any member of the ERISA Group or
(ii) has at any time within the preceding five years been maintained by any
entity which was at such time a member of the ERISA Group for employees of any
entity which was at such time a member of the ERISA Group.
Potential Default shall mean any event or condition which with notice,
passage of time or a determination by the Agent or the Required Banks, or any
combination of the foregoing, would constitute an Event of Default.
Pounds Sterling shall mean freely transferable lawful money of the
United Kingdom.
Principal Amount shall mean (i) the stated principal amount of each
Loan denominated in Dollars, and/or (ii) the Dollar Equivalent of the stated
principal amount of each Alternate Currency Loan, as the context may require.
Principal Office shall mean the main banking office of the Agent in
New York, New York.
Prohibited Transaction shall mean any prohibited transaction as
defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA for
which neither an individual nor a class exemption has been issued by the United
States Department of Labor.
Property shall mean all real property, both owned and leased, of the
Company or any Material Subsidiary.
Purchase Money Security Interest shall mean Liens upon tangible
personal property securing loans to the Company or any Material Subsidiary, or
deferred payments by such Person, in either case for the purchase of such
tangible personal property.
Purchasing Bank shall mean a Bank which becomes a party to this
Agreement by executing an Assignment and Assumption Agreement.
Ratable Share shall mean the proportion that a Bank's Commitment bears
to the Commitments.
Regulation U shall mean any of Regulations T, U, or X as promulgated
by the Board of Governors of the Federal Reserve System, as amended from time to
time.
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Reportable Event shall mean a reportable event described in Section
4043 of ERISA and regulations thereunder with respect to a Plan or Multiemployer
Plan.
Requested Amount shall have the meaning assigned to such term in
Section 2.08(a).
Required Banks shall mean
(A) if there are no Loans, Required Banks shall mean Banks whose
Commitments aggregate greater than 50% of the Commitments of all of the
Banks, or
(B) if there are Loans, Required Banks shall mean:
(i) prior to a termination of the Commitments hereunder
pursuant to Section 8.02(a) or Section 8.02(b), any Bank or group of
Banks if the sum of the principal amount of the Committed Loans of
such Banks then outstanding aggregates greater than 50% of the total
principal amount of all of the Committed Loans then outstanding; and
(ii) after a termination of the Commitments hereunder pursuant
to Section 8.02(a) or Section 8.02(b), any Bank or group of Banks if
the sum of the principal amount of the Loans of such Banks then
outstanding aggregates greater than 50% of the total principal amount
of all of the Loans then outstanding.
Revolving Credit Base Rate Option shall mean the option of the
Borrowers to have Revolving Credit Loans bear interest at the rate and under the
terms and conditions set forth in Section 3.01(a)(i).
Revolving Credit Commitment shall mean, as to any Bank at any time,
the amount initially set forth opposite its name on Schedule 1.01(B) in the
column labeled "Amount of Commitment for Revolving Credit Loans," and thereafter
on Schedule I to the most recent Assignment and Assumption Agreement, and
Revolving Credit Commitments shall mean the aggregate Revolving Credit
Commitments of all of the Banks.
Revolving Credit LIBOR Option shall mean the option of the Borrowers
to have Revolving Credit Loans bear interest at the rate and under the terms and
conditions set forth in Section 3.01(a)(ii).
Revolving Credit Loans shall mean collectively all Revolving Credit
Loans made by the Banks to the Borrowers and Revolving Credit Loan shall mean
separately any Revolving Credit Loan, made by one of the Banks to a Borrower,
pursuant to Section 2.01(a). A Bid Loan is not a Revolving Credit Loan, except
that it will be treated as a Revolving Credit Loan following a termination of
the Commitments hereunder pursuant to Section 8.02(a) or Section 8.02(b) as
provided in Section 8.03.
Revolving Credit/Term Loan Note shall mean any Revolving Credit/Term
Loan Note of a Borrower in the form of Exhibit 1.01(R) issued by such Borrower
to a Bank evidencing the Revolving Credit Loans or Term Loans, as the case may
be, of such Bank to such Borrower,
-15-
together with all amendments, extensions, renewals, replacements, refinancings
or refundings thereof in whole or in part.
SEC shall mean the Securities and Exchange Commission or any
governmental agencies substituted therefor.
Soft Capital shall have the meaning assigned to that term in Section
7.02(a).
Standard & Poor's shall mean Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors.
Statutory Capital shall mean the aggregate of policyholders' surplus
of the Company and the contingency reserve of the Company, each determined in a
manner consistent with that used in preparing the Historical Statements referred
to in Section 5.01(h)(A) [Historical Statements].
Sterling LIBOR shall mean, with respect to the Loans comprising any
Borrowing Tranche denominated in Pounds Sterling to which the LIBOR Option
applies for any Interest Period, (A) an interest rate per annum determined on
the basis of the rate for deposits in Pounds Sterling for a period comparable to
such Interest Period commencing on the first day of such Interest Period
appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London time, two
Business Days prior to the beginning of such Interest Period plus (B) the
Associated Cost Rate for such Loans for such Interest Period. In the event that
such rate does not appear on Page 3750 of the Telerate screen (or otherwise on
such screen), Sterling LIBOR shall be determined by reference to such other
publicly available service for displaying Pounds Sterling-denominated rates as
may be agreed upon by the Agent and the Borrowers or, in the absence of such
agreement, Sterling LIBOR shall be the rate of interest per annum determined by
the Agent in accordance with its usual procedures (which determination shall be
conclusive absent manifest error) equal to the rate per annum at which Pounds
Sterling deposits approximately equal in principal amount to such Borrowing
Tranche for a period and with a maturity comparable to such Interest Period are
offered to the principal London office of Agent in immediately available funds
in the London interbank market at approximately 11:00 A.M., London time, two
Business Days prior to the commencement of such Interest Period. The Agent shall
give prompt notice to the Borrowers of the Sterling LIBOR as determined or
adjusted in accordance herewith, which determination shall be conclusive absent
manifest error.
Subsidiary of any Person at any time shall mean (i) any corporation or
trust of which 50% or more (by number of shares or number of votes) of the
outstanding capital stock or shares of beneficial interest normally entitled to
vote for the election of one or more directors or trustees (regardless of any
contingency which does or may suspend or dilute the voting rights) is at such
time owned directly or indirectly by such Person or one or more of such Person's
Subsidiaries, (ii) any partnership of which such Person is a general partner or
of which 50% or more of the partnership interests is at the time directly or
indirectly owned by such Person or one or more of such Person's Subsidiaries,
(iii) any limited liability company of which such Person is a member or of which
50% or more of the limited liability company interests is at the time directly
or indirectly owned by such Person or one or more of such Person's Subsidiaries
or (iv) any corporation, trust, partnership, limited liability company or other
entity which is
-16-
controlled or capable of being controlled by such Person or one or more of such
Person's Subsidiaries. Notwithstanding the foregoing, the UK Borrower shall be
deemed to be a Subsidiary for all purposes in this Agreement and the other Loan
Documents; provided, however, that the UK Borrower shall not be required to be a
Guarantor.
Term Loan Base Rate Option shall mean the option of the Borrowers to
have Term Loans bear interest at the rate and under the terms and conditions set
forth in Section 3.01(a)(i).
Term Loan Fee shall have the meaning assigned to that term in Section
2.03(b).
Term Loan LIBOR Option shall mean the option of the Borrowers to have
Term Loans bear interest at the rate and under the terms and conditions set
forth in Section 3.01(a)(ii).
Term Loan Maturity Date shall mean the first anniversary of the
Expiration Date or, if such day is not a Business Day, the next preceding
Business Day.
Term Loans shall mean each Revolving Credit Loan that is converted
into a term loan on the Expiration Date pursuant to Section 2.01(b).
Total Capitalization shall mean, at any time, an amount (without
duplication) equal to (i) the then outstanding Consolidated Debt of the Company
and its Subsidiaries, plus (ii) consolidated stockholders equity of the Company
and its Subsidiaries.
Transferor Bank shall mean the selling Bank pursuant to an Assignment
and Assumption Agreement.
UK Borrower shall mean ACE Guaranty (UK) Ltd., a company organized
under the laws of England and Wales.
Section 1.02 Construction. Unless the context of this Agreement
otherwise clearly requires, the following rules of construction shall apply to
this Agreement and each of the other Loan Documents:
(a) Number; Inclusion. References to the plural include the singular,
the plural, the part and the whole;"or" has the inclusive meaning
represented by the phrase "and/or," and "including" is not a term of
limitation and has the meaning represented by the phrase "including without
limitation";
(b) Determination. References to "determination" of or by the Agent
or the Banks shall be deemed to include good-faith estimates by the Agent
or the Banks (in the case of quantitative determinations) and good-faith
beliefs by the Agent or the Banks (in the case of qualitative
determinations) and such determination shall be conclusive absent manifest
error;
(c) Agent's Discretion and Consent. Whenever the Agent or the Banks
are granted the right herein to act in its or their sole discretion or to
grant or withhold consent such right shall be exercised in good faith;
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(d) Documents Taken as a Whole. The words "hereof," "herein,"
"hereunder," "hereto" and similar terms in this Agreement or any other Loan
Document refer to this Agreement or such other Loan Document as a whole and
not to any particular provision of this Agreement or such other Loan
Document;
(e) Headings. The section and other headings contained in this
Agreement or such other Loan Document and the Table of Contents (if any),
preceding this Agreement or such other Loan Document are for reference
purposes only and shall not control or affect the construction of this
Agreement or such other Loan Document or the interpretation thereof in any
respect;
(f) Implied References to this Agreement. Article, section,
subsection, clause, schedule and exhibit references are to this Agreement
or other Loan Document, as the case may be, unless otherwise specified;
(g) Persons. Reference to any Person includes such Person's
successors and assigns but, if applicable, only if such successors and
assigns are permitted by this Agreement or such other Loan Document, as the
case may be, and reference to a Person in a particular capacity excludes
such Person in any other capacity;
(h) Modifications to Documents. Reference to any agreement (including
this Agreement and any other Loan Document together with the schedules and
exhibits hereto or thereto), document or instrument means such agreement,
document or instrument as amended, modified, replaced, substituted for,
superseded or restated;
(i) From, To and Through. Relative to the determination of any period
of time, "from" means "from and including," "to" means "to but excluding,"
and "through" means "through and including"; and
(j) Shall; Will. References to "shall" and "will" are intended to
have the same meaning.
Section 1.03 Accounting Principles; Computations. (a) Except as
otherwise provided in this Agreement (as, for example, where reference is
made to statutory or regulatory financial matters), all computations and
determinations as to accounting or financial matters and all financial
statements to be delivered pursuant to this Agreement shall be made and
prepared in accordance with GAAP (including principles of consolidation
where appropriate), and all accounting or financial terms shall have the
meanings ascribed to such terms by GAAP as in effect on the date hereof
applied on a basis consistent with that used in preparing the Historical
Statements referred to in Section 5.01(h)(A) [Historical Statements]. In
the event of any change after the date hereof in GAAP, and if such change
would result in the inability to determine compliance with the financial
covenants set forth in Section 7.02 based upon the Company's regularly
prepared financial statements by reason of the preceding sentence, then the
parties hereto agree to endeavor, in good faith, to agree upon an amendment
to this Agreement that would adjust such financial covenants in a manner
that would not affect
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the substance thereof, but would allow compliance therewith to be
determined in accordance with the Company's financial statements at that
time.
(b) For purposes of this Agreement, the Dollar Equivalent of each
Loan that is an Alternate Currency Loan shall be calculated on the date
when any such Loan is made, on the second Business Day of each month, or
such date as a Borrower may request and at such other times as designated
by the Agent at any time when a Potential Default or an Event of Default
exists. Such Dollar Equivalent shall remain in effect until the same is
recalculated by the Agent as provided above and notice of such
recalculation is received by the Borrowers, it being understood that until
such notice is received, the Dollar Equivalent shall be that Dollar
Equivalent as last reported to the Borrowers by the Administrative Agent.
The Agent shall promptly notify the Borrowers and the Banks of each such
determination of the Dollar Equivalent.
ARTICLE II
REVOLVING CREDIT AND TERM LOAN FACILITY
---------------------------------------
Section 2.01 Revolving Credit Commitments; Term Loans. (a) Subject to
the terms and conditions hereof and relying upon the representations and
warranties herein set forth, each Bank severally agrees to make Revolving Credit
Loans to either Borrower (on a several basis) at any time or from time to time
on or after the date hereof to the Expiration Date, which Revolving Credit Loans
(i) may be made and maintained in such Approved Currency as is requested by the
applicable Borrower (provided that the aggregate Principal Amount of Revolving
Credit Loans denominated in Alternate Currencies shall not exceed $12,500,000
and only the UK Borrower may incur Alternate Currency Loans) and (ii) shall not,
in the case of Revolving Credit Loans incurred by the UK Borrower, when added to
the outstanding Principal Amount of all Bid Loans incurred by the UK Borrower,
exceed $12,500,000 in aggregate Principal Amount outstanding at any time for all
such Revolving Credit Loans and Bid Loans; provided that, after giving effect to
each such Loan, the aggregate amount of Loans from such Bank shall not exceed
such Bank's Revolving Credit Commitment. Within such limits of time and amount
and subject to the other provisions of this Agreement, the Borrowers may borrow,
repay, and reborrow Revolving Credit Loans pursuant to this Section 2.01(a).
(b) Subject to and upon the terms and conditions set forth herein,
each Borrower and each Bank which has Dollar-denominated Revolving Credit Loans
outstanding at such time agree that at 9:00 A.M., New York time, on the
Expiration Date, the aggregate principal amount of Dollar-denominated Revolving
Credit Loans owing to such Bank and outstanding at such time shall (unless such
Revolving Credit Loans have been declared (or have become) due and payable
pursuant to this Agreement), upon written notice (or telephonic notice promptly
confirmed in writing) by the respective Borrower to the Agent requesting such
conversion, automatically convert to and thereafter constitute Term Loans owing
to such Bank hereunder. The Term Loans of each Bank (i) shall be made and
thereafter maintained in Dollars; (ii) shall, at the option of the applicable
Borrower, be Base Rate Loans or LIBOR Loans, provided that all Term Loans
comprising the same Borrowing Tranche shall, unless otherwise specifically
provided herein, consist of Term Loans of the same type; and (iii) shall not
exceed in initial
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Principal Amount for such Bank an amount which equals the total principal amount
of Dollar-denominated Revolving Credit Loans owed to such Bank and outstanding
at 9:00 A.M., New York time, on the Expiration Date. Once repaid, Term Loans may
not be reborrowed.
Section 2.02 Nature of Banks' Obligations with Respect to Revolving
Credit Loans. Each Bank shall be obligated to participate in each request for
Revolving Credit Loans pursuant to Section 2.05 [Revolving Credit Loan Requests]
in accordance with its Ratable Share. The aggregate Principal Amount of each
Bank's Revolving Credit Loans outstanding hereunder to the Borrowers at any time
shall never exceed its Revolving Credit Commitment. The obligations of each Bank
hereunder are several and not joint. The failure of any Bank to perform its
obligations hereunder shall not affect the Obligations of the Borrowers to any
other party nor shall any other party be liable for the failure of such Bank to
perform its obligations hereunder. The Banks shall have no obligation to make
Revolving Credit Loans hereunder on or after the Expiration Date.
Section 2.03 Facility Fees; Term Loan Fee. (a) Accruing from the date
hereof until but not including the Expiration Date, the Company agrees to pay to
the Agent for the account of each Bank, as consideration for such Bank's
Revolving Credit Commitment hereunder, a non-refundable facility fee (the
"Facility Fee") equal to the Applicable Facility Fee Rate (computed on the basis
of a year of 360 days for the actual days elapsed) on the average daily amount
of such Bank's Revolving Credit Commitment as the same may be constituted from
time to time, regardless of usage. All Facility Fees shall be payable in arrears
on the first Business Day of each June, September, December, and March after the
date hereof and on the Expiration Date or upon acceleration of the Loans.
(b) Accruing on the Expiration Date to but not including the Term
Loan Maturity Date, the Company agrees to pay to the Agent for the pro rata
account of each Bank, a non-refundable fee (the "Term Loan Fee"), equal to
0.125% of the average daily aggregate outstanding Principal Amount of the Term
Loans. The Term Loan Fee shall be payable in arrears on the first Business Day
of each March, June, September, and December after the Expiration Date and on
the date the Term Loans are repaid in their entirety.
Section 2.04 Utilization Fee. On each day on which the Facility Usage
exceeds 33.3% of the amount of the Commitments (or, after the Expiration Date,
the Commitments as in effect immediately prior to the Expiration Date), the
Applicable Margin shall be increased for such day by the Applicable Usage
Premium.
Section 2.05 Revolving Credit Loan Requests. Except as otherwise
provided herein, a Borrower may from time to time prior to the Expiration Date
request the Banks to make Revolving Credit Loans in Dollars, or renew or convert
the Interest Rate Option applicable to existing Revolving Credit Loans or Term
Loans pursuant to Section 3.01(c) [Interest Periods], by delivering to the
Agent, not later than 10:00 a.m., New York time, (i) three (3) Business Days
prior to the proposed Borrowing Date with respect to the making of Revolving
Credit Loans to which the LIBOR Option applies, or with respect to the
conversion to or the renewal of the LIBOR Option for any Loans; and (ii) one (1)
Business Day prior to either the proposed Borrowing Date with respect to the
making of a Revolving Credit Loan to which the Base Rate Option applies or the
last day of the preceding Committed Loan Interest Period with respect to
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the conversion to the Base Rate Option for any Loan, of a duly completed
Committed Loan Request therefor substantially in the form of Exhibit 2.05 or a
Committed Loan Request by telephone immediately confirmed in writing by letter,
facsimile, email, or telex in the form of such Exhibit. In addition, the UK
Borrower may from time to time prior to the Expiration Date request to make
Revolving Credit Loans in Alternate Currencies by delivering to the Agent, not
later than 1:00 P.M., New York time, at least four Business Days prior to the
Borrowing Date a duly completed Committed Loan Request substantially in the form
of Exhibit 2.05 or a Committed Loan Request by telephone immediately confirmed
in writing by letter, facsimile, email or telex in the form of such Exhibit.
Each Loan Request shall be irrevocable and shall specify (i) the identity of the
applicable Borrower; (ii) the respective Approved Currency for such Loan; (iii)
the proposed Borrowing Date; (iv) the aggregate amount of the proposed Loans
comprising each Borrowing Tranche (stated in the applicable Approved Currency),
which shall be in integral multiples of $1,000,000 and not less than $5,000,000
for each Borrowing Tranche to which the LIBOR Option applies and not less than
the lesser of $500,000 or the maximum amount available for Borrowing Tranches to
which the Base Rate Option applies; (v) whether Committed Loan LIBOR Option or
Base Rate Option shall apply to the proposed Loans comprising the applicable
Borrowing Tranche; and (vi) in the case of a Borrowing Tranche to which the
Committed Loan LIBOR Option applies, an appropriate Committed Loan Interest
Period for the Loans comprising such Borrowing Tranche.
Section 2.06 Making Revolving Credit Loans. The Agent shall, promptly
after receipt by it of a Loan Request pursuant to Section 2.05 [Revolving Credit
Loan Requests], notify the Banks of its receipt of such Loan Request specifying:
(i) the applicable Borrower making the Loan Request; (ii) the proposed Borrowing
Date and the time and method of disbursement of the Revolving Credit Loans
requested thereby; (iii) the amount and type of each such Revolving Credit Loan
(stated in the applicable Approved Currency) and the applicable Interest Period
(if any); and (iv) the apportionment among the Banks of such Revolving Credit
Loans as determined by the Agent in accordance with Section 2.02 [Nature of
Banks' Obligations]. Each Bank shall remit the principal amount of each
Revolving Credit Loan to the Agent such that the Agent is able to, and the Agent
shall, to the extent the Banks have made funds available to it for such purpose
and subject to Section 6.02 [Each Additional Loan], fund such Revolving Credit
Loans to the applicable Borrower in the applicable Approved Currency and
immediately available funds at the Principal Office prior to 2:00 p.m., New York
time, on the applicable Borrowing Date, provided that if any Bank fails to remit
such funds to the Agent in a timely manner, the Agent may elect in its sole
discretion to fund with its own funds the Revolving Credit Loans of such Bank on
such Borrowing Date, and such Bank shall be subject to the repayment obligation
in Section 9.16 [Availability of Funds].
Section 2.07 Use of Proceeds. The proceeds of the Revolving Credit
Loans shall be used for the working capital and other general corporate purposes
of the Borrowers and in accordance with Section 7.01(j) [Use of Proceeds].
Section 2.08 Bid Loan Facility. (a) Bid Loan Requests. Except as
otherwise provided herein, any Borrower may from time to time prior to the
Expiration Date request that the Banks make Bid Loans by delivery to the Agent
not later than 10:00 A.M. New York time of a duly completed request therefor
substantially in the form of Exhibit 2.08(a) hereto or a request by telephone
immediately confirmed in writing by letter, facsimile, email, or telex (each, a
"Bid
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Loan Request") at least three (3) Business Days prior to the proposed Bid Loan
Borrowing Date if the applicable Borrower is requesting Fixed Rate Bid Loans and
four (4) Business Days prior to the proposed Bid Loan Borrowing Date if the
applicable Borrower is requesting Euro-Rate Bid Loans of one, two, three, or six
months' duration. Each Bid Loan Request shall be irrevocable and shall specify
(i) the identity of the applicable Borrower; (ii) the respective Approved
Currency for such Loan; (iii) the proposed Bid Loan Borrowing Date; (iv) whether
the applicable Borrower is electing the Bid Loan Fixed Rate Option or the Bid
Loan LIBOR Option; (v) the term of the proposed Bid Loan (the "Bid Loan Interest
Period"), which may be no less than seven (7) day(s) and no longer than one
hundred eighty (180) days if the applicable Borrower is requesting a Fixed Rate
Bid Loan and one, two, three, or six months if the applicable Borrower is
requesting a LIBOR Bid Loan; and (vi) the maximum principal amount (the
"Requested Amount") of such Bid Loan, which shall be not less than $10,000,000
and shall be an integral multiple of $1,000,000. After giving effect to such Bid
Loan and any other Loan made on or before the Bid Loan Borrowing Date, the
aggregate Principal Amount of all Revolving Credit Loans and Bid Loans
outstanding shall not exceed the aggregate amount of the Revolving Credit
Commitments of the Banks. In addition, after giving effect to any such Bid Loan
incurred by the UK Borrower and any other Loan made on or before the Bid Loan
Borrowing Date, the aggregate Principal Amount of all Bid Loans and Revolving
Credit Loans incurred by the UK Borrower shall not exceed $12,500,000 in
Principal Amount outstanding. Notwithstanding any provision hereof to the
contrary, no Bid Loan may be requested for a period that would end beyond the
Expiration Date.
(b) Bidding. The Agent shall promptly after receipt by it of a Bid
Loan Request pursuant to Section 2.08(a) notify the Banks of its receipt of such
Bid Loan Request specifying (i) the identity of the applicable Borrower, (ii)
the proposed Bid Loan Borrowing Date, (iii) whether the proposed Bid Loan shall
be a Fixed Rate Bid Loan or a LIBOR Bid Loan, (iv) the Bid Loan Interest Period,
(v) the principal amount of the proposed Bid Loan and (vi) in the case of an
Alternate Currency Loan to be incurred by the UK Borrower, the Alternate
Currency for such Bid Loan. Each Bank may submit a bid (a "Bid") to the Agent by
telephone (immediately confirmed in writing by letter, facsimile, email, or
telex) not later than the following (each, as applicable, a "Bid Deadline"):
10:00 A.M. New York time two (2) Business Day before the proposed Bid Loan
Borrowing Date if the applicable Borrower is requesting a Fixed Rate Bid Loan or
10:00 A.M. New York time three (3) Business Days before the proposed Bid Loan
Borrowing Date if the applicable Borrower is requesting a LIBOR Bid Loan of one,
two, three, or six months' duration. Each Bid shall specify: (A) the principal
amount of proposed Bid Loans offered by such Bank (the "Offered Amount") which
(i) may be less than, but shall not exceed, the Requested Amount, (ii) shall be
at least $2,000,000 and shall be an integral multiple of $1,000,000 and (iii)
may exceed such Bank's Revolving Credit Commitment; and (B) the Fixed Rate which
shall apply to such proposed Bid Loan if the applicable Borrower has requested a
Fixed Rate Bid Loan or the LIBOR Bid Loan Spread which shall apply to such
proposed Bid Loan if Borrower has requested a LIBOR Bid Loan and which may be a
positive or negative number. If any Bid omits information required hereunder,
the Agent may in its sole discretion attempt to notify the Bank submitting such
Bid. If the Agent so notifies a Bank, such Bank may resubmit its Bid provided
that it does so prior to the applicable Bid Deadline. The Agent shall promptly
notify the applicable Borrower of the Bids which it timely received from the
Banks. If the Agent in its capacity as a Bank shall, in its sole discretion,
make a Bid, it shall notify the Borrower of such Bid at least one-half hour
before the
-22-
applicable Bid Deadline.
(c) Accepting Bids. The applicable Borrower, at its option, shall
irrevocably accept or reject Bids by notifying the Agent of such acceptance or
rejection by telephone (immediately confirmed in writing by letter, facsimile,
email, or telex) not later than one hour after the applicable Bid Deadline. If
the applicable Borrower elects to accept any Bids, its acceptance must meet the
following conditions: (1) the total amount which the applicable Borrower accepts
from all Banks must not be less than $10,000,000 and shall be in integral
multiples of $1,000,000 and may not exceed the Requested Amount; (2) the
applicable Borrower must accept Bids based solely on the amount of the Fixed
Rates or LIBOR Bid Loan Spreads, as the case may be, which each of the Banks
quoted in their Bids in ascending order of the amount of Fixed Rates or LIBOR
Bid Loan Spreads; (3) the applicable Borrower may not borrow Bid Loans from any
Bank on the Bid Loan Borrowing Date in an amount exceeding such Bank's Offered
Amount; (4) if two or more Banks make Bids at the same Fixed Rate (if the
applicable Borrower Requested a Fixed Rate Bid Loan) or LIBOR Bid Loan Spread
(if the applicable Borrower Requested a LIBOR Bid Loan) and the applicable
Borrower desires to accept a portion but not all of the Bids at such Fixed Rate
or LIBOR Bid Loan Spread, as the case may be, the applicable Borrower shall
accept a portion of each Bid equal to the product of the Offered Amount of such
Bid times the fraction obtained by dividing the total amount of Bids which the
applicable Borrower desires to accept at such Fixed Rate or LIBOR Bid Loan
Spread, as the case may be, by the sum of the Offered Amounts of the Bids at
such Fixed Rate or LIBOR Bid Loan Spread, provided that the applicable Borrower
shall round the Bid Loans allocated to each such Bank upward or downward as the
applicable Borrower may select to integral multiples of $1,000,000. The Agent
shall (i) promptly notify a Bank that has made a Bid of the amount of its Bid
that was accepted or rejected by the applicable Borrower and (ii) as promptly as
practical notify all of the Banks of all Bids submitted and those which have
been accepted.
(d) Funding Bid Loans. Each Bank whose Bid or portion thereof is
accepted shall remit the principal amount of its Bid Loan to the Agent by 12:00
Noon on the Bid Loan Borrowing Date. The Agent shall make such funds available
to the applicable Borrower on or before 1:00 P.M. on the Borrowing Date provided
that the conditions precedent to the making of such Bid Loan set forth in
Section 6.02 have been satisfied not later than 10:00 A.M. New York time on the
proposed Bid Loan Borrowing Date. If such conditions precedent have not been
satisfied prior to such time, then (i) the Agent shall not make such funds
available to the applicable Borrower, (ii) the Bid Loan Request shall be deemed
to be canceled, (iii) the Agent shall return the amount previously funded to the
Agent by each applicable Bank no later than the next following Business Day, and
(iv) the applicable Borrower shall be obligated to each such Bank for any loss,
costs, and expenses applicable pursuant to Section 4.06(b) [Indemnity]. The
applicable Borrower shall immediately notify the Agent of any failure to satisfy
the conditions precedent to the making of Bid Loans under Section 6.02. The
Agent may assume that the applicable Borrower has satisfied such conditions
precedent if the applicable Borrower (i) has delivered to the Agent any
documents required to be delivered under Section 6.02, (ii) the applicable
Borrower has not notified the Agent that any other conditions precedent have not
been satisfied, and (iii) the Agent has no actual notice of such a failure.
(e) Several Obligations. The obligations of the Banks to make Bid
Loans after their Bids have been accepted are several. No Bank shall be
responsible for the failure of
-23-
any other Bank to make any Bid Loan which another Bank has agreed to make.
(f) Bid Notes. The obligation of the applicable Borrower to repay the
aggregate unpaid principal amount of the Bid Loans made to it by each Bank,
together with interest thereon, shall be evidenced by a Bid Note dated as of the
Closing Date payable to the order of such Bank in a face amount equal to the
aggregate Revolving Credit Commitments of all of the Banks.
Section 2.09 Extension by Banks of the Expiration Date. (a) Requests;
Approval by All Banks. No earlier than forty-five (45) days prior to the
Expiration Date, the Company may request an extension of the Expiration Date for
another 364 days by written notice to the Banks, and the Banks agree to respond
to the Company's request for an extension no earlier than thirty (30) and no
later than twenty (20) days prior to the then applicable Expiration Date;
provided, however, that the failure of any Bank to respond within such time
period shall not in any manner constitute an agreement by such Bank to extend
the Expiration Date. If all Banks elect to extend, the Expiration Date shall be
extended for a period of 364 days. If one or more Banks decline to extend or do
not respond to the Company's request, the provisions of Section 2.09 shall
apply.
(b) Approval by Required Banks. In the event that one or more Banks
do not agree to extend the Expiration Date or do not respond to the Company's
request for an extension within the time required under Section 2.09 (each a
"Bank to be Terminated"), but the Required Banks agree to such extension within
such time: then, on or before the then applicable Expiration Date, the Company
may, with the prior written approval of the Agent (which approval shall not be
unreasonably withheld), arrange to have one or more other banks reasonably
acceptable to the Agent (each an "Assignee Bank") purchase all of the
outstanding Loans, if any, of the Bank to be Terminated and succeed to and
assume all of the Commitments and all other rights, interests, and obligations
of the Bank to be Terminated under this Agreement and the other Loan Documents.
Any such purchase and assumption shall be (1) pursuant to an Assignment and
Assumption Agreement, (2) subject to and in accordance with Section 10.11
[Successors and Assigns], and (3) if any Committed Loans are outstanding under
the Committed Loan LIBOR Option or if any Bid Loans are outstanding to such Bank
to be Terminated, the Borrowers shall pay all such outstanding amounts, together
with all interest, fees and all other amounts of any nature owing to the Bank to
be Terminated on the effective date of such Assignment and Assumption Agreement
(including any amounts owing under Section 4.06(b) [Indemnity]. In the event
that the Agent shall become a Bank to be Terminated, the provisions of this
Section 2.09 shall be subject to Section 9.14 [Successor Agent]. In the event
that the Loans and Commitments of a Bank to be Terminated are not fully assigned
and assumed pursuant to this Section 2.09(b) on or before the then applicable
Expiration Date, then the Expiration Date shall not be extended for any Bank.
Section 2.10 UK Borrower Loans. (a) Notwithstanding anything to the
contrary in this Agreement, the UK Borrower shall not be permitted to incur any
Loans hereunder unless and until the following conditions precedent have been
satisfied:
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(i) Secretary's Certificate. There shall be delivered to the Agent
for the benefit of each Bank a certificate signed by the Secretary or an
Assistant Secretary of the UK Borrower, certifying as appropriate as to:
(A) all action taken by the UK Borrower in connection with this
Agreement and the other Loan Documents;
(B) the names of the officer or officers authorized to sign
this Agreement and the other Loan Documents and the true signatures of
such officer or officers and specifying the Authorized Officers
permitted to act on behalf of the UK Borrower for purposes of this
Agreement and the true signatures of such officers, on which the Agent
and each Bank may conclusively rely; and
(C) copies of its organizational documents, including its
certificate or articles of incorporation and bylaws as in effect on
the date such Secretary's Certificate is executed and if applicable,
certified by the appropriate official where such documents are filed
in an office.
(ii) Opinion of Counsel. There shall be delivered to the Agent for
the benefit of each Bank one or more written opinions of counsel for the UK
Borrower in form and substance satisfactory to the Agent and its counsel:
(A) as to the matters set forth in Exhibit 6.01(d); and
(B) as to such other matters incident to the transactions
contemplated herein as the Agent may reasonably request.
(iii) The UK Borrower shall have received permission from the United
Kingdom Financial Services Authority under Part IV of the Financial
Services and Markets ▇▇▇ ▇▇▇▇ to effect and carry out contracts of
insurance.
(b) Notwithstanding anything to the contrary in this Agreement,
the UK Borrower will not be permitted to borrow or incur any new Loans hereunder
at any time after the UK Borrower ceases to be a wholly-owned Subsidiary of the
Company.
ARTICLE III
INTEREST RATES
--------------
Section 3.01 Interest Rate Options. Each Borrower shall pay interest
in respect of the outstanding unpaid principal amount of the Committed Loans as
selected by it from the Base Rate Option or Revolving Credit LIBOR Option set
forth below applicable to the Committed Loans, it being understood that, subject
to the provisions of this Agreement, the Borrowers may select different Interest
Rate Options and different Interest Periods to apply to different Borrowing
Tranches of the Committed Loans and may convert to or renew one or more Interest
Rate Options with respect to all or any portion of the Committed Loans
comprising any Borrowing Tranche, provided that there shall not be at any one
time outstanding more than eight
-25-
(8) Borrowing Tranches in the aggregate among all of the Committed Loans. If at
any time the designated rate applicable to any Committed Loan made by any Bank
exceeds such Bank's highest lawful rate, the rate of interest on such Bank's
Committed Loan shall be limited to such Bank's highest lawful rate.
(a) Revolving Credit Interest Rate Options. Each Borrower shall have
the right to select from the following Interest Rate Options applicable to
the Revolving Credit Loans and Term Loans incurred by it:
(i) Revolving Credit Base Rate Option: A fluctuating rate per
annum (computed on the basis of a year of 365 or 366 days, as the case
may be, for the actual days elapsed) equal to the Base Rate plus the
Applicable Margin, such interest rate to change automatically from
time to time effective as of the effective date of each change in the
Base Rate; or
(ii) Revolving Credit LIBOR Option: A rate per annum (computed
on the basis of a year of 360 days for the actual days elapsed) equal
to the applicable LIBOR plus the Applicable Margin.
(b) Rate Quotations. The Borrowers may call the Agent on or before
the date on which a Committed Loan Request is to be delivered to receive an
indication of the rates then in effect, but it is acknowledged that such
projection shall not be binding on the Agent or the Banks nor affect the
rate of interest which thereafter is actually in effect when the election
is otherwise made in accordance with the terms of this Agreement.
(c) Change in Fees or Interest Rates. If the Applicable Margin or
Applicable Fee Amount is increased or reduced with respect to any period
for which any Borrower has already paid interest or Facility Fees, the
Agent shall recalculate the additional interest or Facility Fees due from
or the amount of the refund of interest or Facility Fees due to such
Borrower and shall, within fifteen (15) Business Days after the Agent
received the information which gave rise to such increase or decrease, give
the applicable Borrower and the Banks notice of such recalculation.
(i) Any additional interest or Facility Fee due from any
Borrower shall be paid to the Agent for the account of the Banks on
the next date on which an interest or fee payment is due; provided,
however, that if there are no Loans outstanding or if the Loans are
due and payable, such additional interest or Facility Fee shall be
paid promptly after receipt of written request for payment from the
Agent.
(ii) Any interest or Facility Fee refund due to any Borrower
shall be credited against payments otherwise due from such Borrower on
the next interest or fee payment date or, if the Loans have been
repaid and the Banks are no longer committed to lend under this
Agreement, the Banks shall pay the Agent for the account of such
Borrower such interest or Facility Fee refund not later than five
Business Days after written notice from the Agent to the Banks.
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Section 3.02 Committed Loans Interest Periods. At any time when any
Borrower shall select, convert to, or renew a Committed Loan LIBOR Option, the
applicable Borrower shall notify the Agent thereof at least three (3) Business
Days prior to the effective date of such LIBOR Option by delivering a Loan
Request. The notice shall specify a Committed Loan Interest Period during which
such Interest Rate Option shall apply. Notwithstanding the preceding sentence,
the following provisions shall apply to any selection of, renewal of, or
conversion to a Committed Loan LIBOR Option:
(a) Amount of Borrowing Tranche. Each Borrowing Tranche of Committed
Loan LIBOR Loans shall be in integral multiples of $1,000,000 and not less
than $5,000,000;
(b) Renewals. In the case of the renewal of a Committed Loan LIBOR
Option at the end of an Interest Period, the first day of the new Interest
Period shall be the last day of the preceding Interest Period, without
duplication in payment of interest for such day.
Section 3.03 Interest After Default. To the extent permitted by Law,
upon the occurrence of an Event of Default and until such time such Event of
Default shall have been cured or waived:
(a) Interest Rate. The rate of interest otherwise applicable for each
Loan pursuant to Section 3.01 [Interest Rate Options] shall be increased by
2.0% per annum; and
(b) Other Obligations. Each other Obligation hereunder if not paid
when due shall bear interest at a rate per annum equal to the sum of the
rate of interest applicable under the Revolving Credit Base Rate Option
plus an additional 2.0% per annum from the time such Obligation becomes due
and payable and until it is paid in full.
(c) Acknowledgment. The Borrowers acknowledge that the increase in
rates referred to in this Section 3.03 reflects, among other things, the
fact that such Loans or other amounts have become a substantially greater
risk given their default status and that the Banks are entitled to
additional compensation for such risk; and all such interest referred to in
this Section 3.03 shall be payable by the Borrowers upon demand by the
Agent.
Section 3.04 LIBOR Unascertainable; Illegality; Increased Costs;
Deposits Not Available. (a) Unascertainable. If on any date on which LIBOR would
otherwise be determined with respect to Committed Loans or Bid Loans, the Agent
shall have determined that:
(i) adequate and fair means do not exist for ascertaining such
LIBOR, or
(ii) a contingency has occurred which materially and adversely
affects the respective London interbank market relating to LIBOR, the
Agent shall have the rights specified in Section 3.04.
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(b) Illegality; Increased Costs; Deposits Not Available. If at any
time any Bank shall have determined that:
(i) the making, maintenance or funding of any Loan to which a
LIBOR Option applies has been made unlawful by compliance by such Bank
in good faith with any Law or any interpretation or application
thereof by any Official Body or with any request or directive of any
such Official Body (whether or not having the force of Law), or
(ii) such LIBOR Option will not adequately and fairly reflect
the cost to such Bank of the establishment or maintenance of any such
Loan, or
(iii) after making all reasonable efforts, deposits of the
relevant amount in the relevant Approved Currency for the relevant
Interest Period for a Loan to which a LIBOR Option applies are not
available to such Bank with respect to such Loan in the respective
London interbank market,
then the Agent shall have the rights specified in Section 3.04(c).
(c) Agent's and Bank's Rights. In the case of any event specified in
Section 3.04(a) above, the Agent shall promptly so notify the Banks and the
Borrowers thereof, and in the case of an event specified in Section 3.04(b)
above, such Bank shall promptly so notify the Agent and endorse a certificate to
such notice as to the specific circumstances of such notice, and the Agent shall
promptly send copies of such notice and certificate to the other Banks and the
Borrowers. Upon such date as shall be specified in such notice (which shall not
be earlier than the date such notice is given), the obligation of (A) the Banks,
in the case of such notice given by the Agent, or (B) such Bank, in the case of
such notice given by such Bank, to allow the Borrowers to select, convert to or
renew a LIBOR Option shall be suspended until the Agent shall have later
notified the Borrowers, or such Bank shall have later notified the Agent, of the
Agent's or such Bank's, as the case may be, determination that the circumstances
giving rise to such previous determination no longer exist. If at any time the
Agent makes a determination under Section 3.04(a) and any Borrower has
previously notified the Agent of its selection of, conversion to or renewal of a
LIBOR Option and such Interest Rate Option has not yet gone into effect, such
notification shall be deemed to provide for the termination of the applicable
Borrower's Bid Loan request (without penalty) for such Loans if the applicable
Borrower has requested Bid Loans under the Bid Loan LIBOR Option and for the
selection of, conversion to or renewal of the Base Rate Option otherwise
available with respect to such Loans if the applicable Borrower has requested
the Committed Loan LIBOR Option. If any Bank notifies the Agent of a
determination under Section 3.04(b), the Borrowers shall, subject to the
Borrowers' indemnification Obligations under Section 4.06(b) [Indemnity], as to
any Loan of the Bank to which a LIBOR Option applies, on the date specified in
such notice either convert such Loan to the Base Rate Option otherwise available
with respect to such Loan (in the case of Dollar-denominated Loans) or prepay
such Loan in accordance with Section 4.04 [Voluntary Prepayments]. Absent due
notice from the Borrowers of conversion or prepayment, such Loan shall
automatically be converted to the Base Rate Option otherwise available with
respect to such Loan upon such specified date in the case of Dollar-denominated
Loans, or prepaid on such date in the case of all other Loans.
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Section 3.05 Selection of Interest Rate Options. If any Borrower fails
to select a new Interest Period to apply to any Borrowing Tranche of Committed
Loans under the Committed LIBOR Option at the expiration of an existing Interest
Period applicable to such Borrowing Tranche in accordance with the provisions of
Section 3.01(c) [Interest Periods], the applicable Borrower shall be deemed to
have (i) in the case of Dollar-denominated Loans, converted such Borrowing
Tranche to the Revolving Credit Base Rate Option commencing upon the last day of
the existing Interest Period and (ii) in the case of Alternate Currency Loans,
selected a one-month Interest Period commencing upon the last day of the
existing Interest Period.
ARTICLE IV
PAYMENTS
--------
Section 4.01 Payments. All payments and prepayments to be made in
respect of principal, interest, Facility Fees, Term Loan Fees, Bid Loan
Processing Fees, Agent's Fee, or other fees or amounts due from the Borrowers
hereunder shall be payable prior to 11:00 A.M., New York time, on the date when
due without presentment, demand, protest, or notice of any kind, all of which
are hereby expressly waived by the Borrowers, and without set-off, counterclaim,
or other deduction of any nature, and an action therefor shall immediately
accrue. Such payments shall be made to the Agent at the Principal Office for the
ratable accounts of the Banks with respect to the Loans and for the account of
the lending Bank with respect to the Bid Loans, in the applicable Approved
Currency and in immediately available funds, and the Agent shall promptly
distribute such amounts to the Banks in immediately available funds, provided
that in the event payments are received by 11:00 A.M., New York time, by the
Agent with respect to the Loans and such payments are not distributed to the
Banks on the same day received by the Agent, the Agent shall pay the Banks the
Federal Funds Effective Rate with respect to the amount of such payments for
each day held by the Agent and not distributed to the Banks. The Agent's and
each Bank's statement of account, ledger, or other relevant record shall, in the
absence of manifest error, be conclusive as the statement of the amount of
principal of and interest on the Loans and other amounts owing under this
Agreement.
Section 4.02 Pro Rata Treatment of Banks. (a) Each borrowing of
Revolving Credit Loans shall be allocated to each Bank according to its Ratable
Share (irrespective of the amount of Bid Loans outstanding), and each selection
of, conversion to or renewal of any Interest Rate Option applicable to Revolving
Credit Loans and each payment or prepayment by the Borrowers with respect to
principal or interest on the Revolving Credit Loans, Term Loans, Facility Fees
or Term Loan Fees or other fees (except for the Agent's Fee and the Bid Loan
Processing Fee) or amounts due from the Borrowers hereunder to the Banks with
respect to the Revolving Credit Loans or Term Loans, shall (except as provided
in Section 3.04(c) [Agent's and Bank's Rights] in the case of an event specified
in Section 3.04 [Euro-Rate Unascertainable; Etc.], Section 4.04 [Replacement of
a Bank] or Section 4.06 [Additional Compensation in Certain Circumstances]) be
made in proportion to the applicable Revolving Credit Loans or Term Loans, as
the case may be, outstanding from each Bank and, if no such Loans are then
outstanding, in proportion to the Ratable Share of each Bank. Each borrowing of
a Bid Loan shall be made according to the provisions in Section 2.08 hereof and
each payment or
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prepayment by the Borrowers of principal, interest, fees, or other amounts from
the Borrowers with respect to Bid Loans shall be made to the Banks in proportion
to the amounts due to such Banks with respect to Bid Loans then outstanding.
(b) All Borrowings of Term Loans under this Agreement shall be
incurred by the Borrowers from the Banks pro rata on the basis of such Banks'
Commitments as in effect immediately prior to the Expiration Date.
Section 4.03 Interest Payment Dates. Interest on Committed Loans to
which the Base Rate Option applies shall be due and payable in arrears on the
first Business Day of each June, September, December, and March after the date
hereof and on the Expiration Date or upon acceleration of the Loan. Interest on
Committed Loans and Bid Loans to which the LIBOR Option applies and Bid Loans to
which the Bid Loan Fixed Rate Option applies shall be due and payable on the
last day of each Interest Period for those Loans and, if such Interest Period is
longer than three (3) Months, also at the end of the third Month of such
Interest Period. Interest on payments of principal and other monetary
Obligations shall be due on the date such payment is due (whether on the stated
maturity date, upon acceleration, or otherwise) or if principal or such other
Obligation is paid earlier than the date when due, then on the date when paid.
Section 4.04 Voluntary Prepayments. (a) Right to Prepay. Each Borrower
shall have the right at its option from time to time to prepay the Committed
Loans incurred by it in whole or part without premium or penalty (except as
provided in Section 4.04(b) below or in Section 4.06 [Additional Compensation in
Certain Circumstances]):
(i) at any time with respect to any Committed Loan to which the
Base Rate Option applies,
(ii) on the last day of the applicable Interest Period with respect
to Committed Loans to which a LIBOR Option applies,
(iii) on the date specified in a notice by any Bank pursuant to
Section 3.04 [LIBOR Unascertainable, Etc.] with respect to any Committed
Loan to which a LIBOR Option applies.
Whenever any Borrower desires to prepay any part of the Committed
Loans, it shall provide a prepayment notice to the Agent by 12:00 Noon, New York
time, at least one (1) Business Day prior to the date of prepayment of Revolving
Credit Loans or Term Loans to which a Base Rate Option applies and at least
three (3) Business Days prior to the date of prepayment of Revolving Credit
Loans or Term Loans to which a LIBOR Option applies setting forth the following
information:
(x) the date, which shall be a Business Day, on which the proposed
prepayment is to be made;
(y) a statement indicating the application of the prepayment among
the Borrowing Tranches of such Loans; and
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(z) the total principal amount of such prepayment, which shall not
be less than $1,000,000 or such lesser amount as may be outstanding under
the Borrowing Tranche to be prepaid.
The principal amount of the Committed Loans for which a prepayment
notice is given, together with interest and fees as have accrued on such
principal amount, shall be due and payable on the date specified in such
prepayment notice as the date on which the proposed prepayment is to be made;
provided, however, that failure of any Borrower to make payment in accordance
with a prepayment notice given by it shall not be an Event of Default in and of
itself. Except as provided in Section 3.04(c) [Agent's and Bank's rights], if
any Borrower prepays a Committed Loan, but fails to specify the applicable
Borrowing Tranche which the applicable Borrower is prepaying, the prepayment
shall be applied first to Committed Loans to which the Base Rate Option applies,
then to Loans to which the Committed Loan LIBOR Option applies. Any prepayment
hereunder and any failure of the applicable Borrower to make payment in
accordance with a prepayment notice provided by it shall be subject to the
applicable Borrower's Obligation to indemnify the Banks under Section 4.06(b)
[Indemnity].
(b) Replacement of a Bank. In the event any Bank (i) gives notice
under Section 3.04 [LIBOR Unascertainable, Etc.] or Section 3.04 [Increased
Costs, Etc.], (ii) does not fund Revolving Credit Loans or Bid Loans because the
making of such Loans would contravene any Law applicable to such Bank, or (iii)
becomes subject to the control of an Official Body (other than normal and
customary supervision), then the Company shall have the right at its option,
with the consent of the Agent, which shall not be unreasonably withheld, to
prepay the Loans of such Bank in whole, together with all interest accrued
thereon, and terminate such Bank's Commitment at any time after (x) receipt of
such Bank's notice under Section 3.04 [LIBOR Unascertainable, Etc.] or Section
4.06(a) [Increased Costs, Etc.], (y) the date such Bank has failed to fund
Revolving Credit Loans or Bid Loans because the making of such Loans would
contravene Law applicable to such Bank, or (z) the date such Bank became subject
to the control of an Official Body, as applicable; provided that the applicable
Borrower shall also pay to such Bank at the time of such prepayment any amounts
required under Section 4.06 [Additional Compensation in Certain Circumstances]
and any accrued interest due on such amount and any related fees; provided,
however, that the Commitment and any Bid Loan of such Bank shall be provided by
one or more of the remaining Banks or a replacement bank acceptable to the
Agent; provided, further, the remaining Banks shall have no obligation hereunder
to increase their Commitments or provide the Bid Loan of such Bank.
Notwithstanding the foregoing, the Agent may only be replaced subject to the
requirements of Section 9.14 [Successor Agent].
(c) Change of Lending Office. Each Bank agrees that, upon the
occurrence of any event giving rise to increased costs or other special payments
under Section 3.04(b) [Illegality, Etc.] or Section 4.06(a) [Increased Costs,
Etc.] with respect to such Bank, it will if requested by the Company, use
reasonable efforts (subject to overall policy considerations of such Bank) to
designate another lending office for any Loans affected by such event, provided
that such designation is made on terms that such Bank and its lending office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of such
Section. Nothing in this Section 4.04(c) shall affect or postpone any of the
Obligations or the rights of the Agent or any Bank provided in this
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Agreement.
Section 4.05 Reduction or Termination of Commitments. The aggregate
amount of the Commitments shall be automatically reduced to zero on the
Expiration Date. In addition, the Borrower shall have the right to terminate or
reduce the then unused portion of Commitments at any time or from time to time;
provided that (a) each partial reduction shall be in an aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof; (b) at no
time shall the total amount of the Commitments be less than current Loans
outstanding; and (c) any Borrower shall provide at least five (5) Business Days
prior written notice of each such termination or reduction to the Agent
specifying the amount of the Commitments to be reduced or terminated. Each such
notice shall be irrevocable, and Commitments once terminated or reduced may not
be reinstated.
Section 4.06 Additional Compensation in Certain Circumstances. (a)
Increased Costs or Reduced Return Resulting From Taxes, Reserves, Capital
Adequacy Requirements, Expenses, Etc. If any Law, guideline or interpretation or
any change in any Law, guideline or interpretation or application thereof by any
Official Body charged with the interpretation or administration thereof or
compliance with any request or directive (whether or not having the force of
Law) of any central bank or other Official Body:
(i) subjects any Bank to any tax or changes the basis of taxation
with respect to this Agreement, the Committed Loans or the Bid Loans or
payments by any Borrower of principal, interest, Facility Fees, Term Loan
Fees or other amounts due from the Borrowers hereunder (except for taxes on
the overall net income of such Bank),
(ii) imposes, modifies or deems applicable any reserve (including the
Eurodollar Reserve Percentage), special deposit or similar requirement
against credits or commitments to extend credit extended by, or assets
(funded or contingent) of, deposits with or for the account of, or other
acquisitions of funds by, any Bank, or
(iii) imposes, modifies or deems applicable any capital adequacy or
similar requirement (A) against assets (funded or contingent) of, or
letters of credit, other credits or commitments to extend credit extended
by, any Bank, or (B) otherwise applicable to the obligations of any Bank
under this Agreement,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Bank with respect to this Agreement, or the making, maintenance or funding of
any part of the Committed Loans or the Bid Loans (or, in the case of any capital
adequacy or similar requirement, to have the effect of reducing the rate of
return on any Bank's capital, taking into consideration such Bank's customary
policies with respect to capital adequacy) by an amount which such Bank in its
sole discretion deems to be material, such Bank shall from time to time notify
the Borrowers and the Agent of the amount determined in good faith (using any
averaging and attribution methods employed in good faith) by such Bank to be
necessary to compensate such Bank for such increase in cost, reduction of
income, additional expense or reduced rate of return. Such notice shall set
forth in reasonable detail the basis for such determination. Such amount shall
be due
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and payable by the applicable Borrower to such Bank ten (10) Business
Days after such notice is given.
(b) Indemnity. In addition to the compensation required by Section
4.06 [Increased Costs, Etc.], the each Borrower shall indemnify each Bank
against all liabilities, losses, or expenses (including loss of margin, any loss
or expense incurred in liquidating or employing deposits from third parties and
any loss or expense incurred in connection with funds acquired by a Bank to fund
or maintain Loans subject to a LIBOR Option or the Bid Loan Fixed Rate Option)
which such Bank sustains or incurs as a consequence of any
(i) payment, prepayment, conversion, or renewal of any Loan to which
a LIBOR Option or the Bid Loan Fixed Rate Option applies on a day other
than the last day of the corresponding Interest Period (whether or not such
payment or prepayment is mandatory, voluntary, or automatic and whether or
not such payment or prepayment is then due),
(ii) attempt by such Borrower to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any Loan Requests under
Section 2.05 [Revolving Credit Loan Requests], Section 2.08 [Bid Loan
Facility] or Section 3.02 [Interest Periods] or notice relating to
prepayments under Section 4.04 [Voluntary Prepayments], or
(iii) default by such Borrower in the performance or observance of any
covenant or condition contained in this Agreement or any other Loan
Document, including any failure of such Borrower to pay when due (by
acceleration or otherwise) any principal of or interest on the Committed
Loans or the Bid Loans, Facility Fee, Term Loan Fee or any other amount due
hereunder; or
(iv) payment or prepayment of any Bid Loan on a day other than the
maturity date thereof (whether or not such payment or prepayment is
mandatory or voluntary).
If any Bank sustains or incurs any such loss or expense, it shall from
time to time notify the respective Borrower of the amount determined in good
faith by such Bank (which determination may include such assumptions,
allocations of costs and expenses, and averaging or attribution methods as such
Bank shall deem reasonable) to be necessary to indemnify such Bank for such loss
or expense. Such notice shall set forth in reasonable detail the basis for such
determination. Such amount shall be due and payable by the respective Borrower
to such Bank ten (10) Business Days after such notice is given.
Section 4.07 Taxes. (a) No Deductions. All payments made by each
Borrower hereunder and under each Note shall be made free and clear of and
without deduction for any present or future taxes, levies, imposts, deductions,
charges, or withholdings, and all liabilities with respect thereto, excluding
taxes imposed on the net income of any Bank and all income and franchise taxes
applicable to any Bank of the United States (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings, and liabilities being
hereinafter referred to as "Taxes"). If any Borrower shall be required by Law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note, (i) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to
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additional sums payable under this Section 4.07(a)) each Bank receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the applicable Borrower shall make such deductions, and (iii) the applicable
Borrower shall timely pay the full amount deducted to the relevant tax authority
or other authority in accordance with applicable Law.
(b) Stamp Taxes. In addition, each Borrower agrees to pay any
present or future stamp or documentary taxes or any other excise or property
taxes, charges, or similar levies which arise from any payment made hereunder or
from the execution, delivery, or registration of, or otherwise with respect to,
this Agreement or any Note (hereinafter referred to as "Other Taxes").
(c) Indemnification for Taxes Paid by a Bank. Each Borrower shall
indemnify each Bank for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 4.07(c)) paid by any Bank and any liability
(including penalties, interest, and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. This indemnification shall be made within 30 days from the date a Bank
makes written demand therefor.
(d) Certificate. Within 30 days after the date of any payment of any
Taxes by any Borrower, the applicable Borrower shall furnish to each Bank, at
its address referred to herein, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Survival. Without prejudice to the survival of any other
agreement of the Borrowers hereunder, the agreements and obligations of the
Borrowers contained in this Section 4.07 shall survive the payment in full of
principal and interest hereunder and under any instrument delivered hereunder.
Section 4.08 Judgment Currency. (a) Currency Conversion Procedures for
Judgments. If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder or under a Note in any currency (the
"Original Currency") into another currency (the "Other Currency"), the parties
hereby agree, to the fullest extent permitted by Law, that the rate of exchange
used shall be that at which in accordance with normal banking procedures each
Bank could purchase the Original Currency with the Other Currency after any
premium and costs of exchange on the Business Day preceding that on which final
judgment is given.
(b) Indemnity in Certain Events. The obligation of each Borrower in
respect of any sum due from such Borrower to any Bank hereunder shall,
notwithstanding any judgment in an Other Currency, whether pursuant to a
judgment or otherwise, be discharged only to the extent that, on the Business
Day following receipt by any Bank of any sum adjudged to be so due in such Other
Currency, such Bank may in accordance with normal banking procedures purchase
the Original Currency with such Other Currency. If the amount of the Original
Currency so purchased is less than the sum originally due to such Bank in the
Original Currency, each Borrower agrees, as a separate obligation and
notwithstanding any such judgment or payment, to indemnify such Bank against
such loss.
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Section 4.09 Notes, Maturity. The Revolving Credit Loans and Term
Loans made by each Bank shall be evidenced by a Revolving Credit/Term Loan Note
in the form of Exhibit 1.01(R). Notwithstanding anything to the contrary
contained elsewhere in this Agreement, (x) all outstanding Revolving Credit
Loans not converted to Term Loans pursuant to Section 2.01(b) shall be repaid in
full on the Expiration Date and (y) all outstanding Term Loans shall be repaid
on the Term Loan Maturity Date.
Section 4.10 Mandatory Prepayments. (a) If on any date the sum of the
aggregate outstanding Principal Amount of Revolving Credit Loans and Bid Loans
(all the foregoing, collectively, the "Aggregate Loan Outstandings") exceeds the
Commitments as then in effect, the Borrowers shall repay no later than the next
following Business Day the principal amount of Revolving Credit Loans in an
aggregate Principal Amount equal to such excess. If, after giving effect to the
prepayment of all outstanding Revolving Credit Loans as set forth above, the
remaining Aggregate Loan Outstandings exceed the Commitments, the Borrowers
shall repay on such date the principal of Bid Loans in an aggregate amount equal
to such excess.
(b) If on any date on which Dollar Equivalents are determined,
pursuant to Section 1.03(b), the sum of the aggregate outstanding Principal
Amount of Revolving Credit Loans and Bid Loans constituting Alternate Currency
Loans exceeds $12,500,000, the UK Borrower shall repay no later than the next
following Business Day the principal amount of Revolving Credit Loans
constituting Alternate Currency Loans in an aggregate Principal Amount equal to
such excess. If, after giving effect to the prepayment of all outstanding
Revolving Credit Loans constituting Alternate Currency Loans as set forth above,
the aggregate outstanding Principal Amount of Bid Loans constituting Alternate
Currency Loans exceeds $12,500,000, the UK Borrower shall repay on such date Bid
Loans constituting Alternate Currency Loans in an aggregate Principal Amount
equal to such excess.
(c) If on any date the aggregate Principal Amount of Revolving Credit
Loans and Bid Loans incurred by the UK Borrower exceeds $12,500,000, the UK
Borrower shall repay no later than the next following Business Day the principal
amount of Revolving Credit loans in an aggregate Principal Amount equal to such
excess. If, after giving effect to the repayment of all outstanding Revolving
Credit Loans incurred by the UK Borrower as set forth above, the outstanding Bid
Loans incurred by the UK Borrower exceeds $12,500,000, the UK Borrower shall
repay on such date the principal of Bid Loans in an aggregate amount equal to
such excess.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
Section 5.01 Representations and Warranties. Each Borrower represents
and warrants to the Agent and each of the Banks as follows:
(a) Organization and Qualification. Such Borrower is a corporation
duly organized, validly existing, and in good standing under the laws of
its jurisdiction of organization. Such Borrower has the lawful power to own
or lease its properties and to engage in the business it presently
conducts. Such Borrower is duly licensed or qualified and in good standing
in each jurisdiction where the property owned or leased by it or the
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nature of the business transacted by it or both makes such licensing or
qualification necessary.
(b) Capitalization and Subsidiaries. As of the Closing Date, the UK
Borrower and ACE Risk Assurance Company, a Maryland corporation, are the
sole Subsidiaries of the Company. ACE Risk Assurance Company is an inactive
corporation having no material liabilities or Indebtedness. The authorized
capital stock of the Company is owned by ACE Financial Services, Inc., a
Delaware corporation, and all such shares of stock have been validly issued
and are fully paid and nonassessable.
(c) Power and Authority. Such Borrower has full power to enter into,
execute, deliver, and carry out this Agreement and the other Loan Documents
to which it is a party, to incur the Indebtedness contemplated by the Loan
Documents, and to perform its Obligations under the Loan Documents to which
it is a party, and all such actions have been duly authorized by all
necessary proceedings on its part.
(d) Validity and Binding Effect. This Agreement has been duly and
validly executed and delivered by such Borrower, and each other Loan
Document which such Borrower is required to execute and deliver as of the
date hereof has been duly executed and delivered by such Borrower. Assuming
the due execution and delivery by Agent and the Banks of those Loan
Documents to which they are a party, this Agreement and each other Loan
Document to which such Borrower is a party constitute the legal, valid and
binding obligations of such Borrower on and after its date of delivery
thereof, enforceable against such Borrower in accordance with its terms,
except to the extent that enforceability of any of such Loan Document may
be limited by bankruptcy, insolvency, reorganization, moratorium, or other
similar laws affecting the enforceability of creditors' rights generally or
limiting the right of specific performance.
(e) No Conflict. Neither the execution and delivery of this Agreement
or the other Loan Documents by such Borrower nor the consummation of the
transactions herein or therein contemplated or compliance with the terms
and provisions hereof or thereof will conflict with, constitute a default
under or result in any breach of (i) the terms and conditions of the
certificate or articles of incorporation, bylaws, or other organizational
documents of such Borrower, or (ii) any Law or any material agreement or
instrument or order, writ, judgment, injunction, or decree to which such
Borrower is a party or by which it is bound or to which it is subject, or
result in the creation or enforcement of any Lien, charge or encumbrance
whatsoever upon any property (now or hereafter acquired) of such Borrower
(other than Permitted Liens).
(f) Litigation. There are no actions, suits, proceedings, or
investigations pending or, to the knowledge of such Borrower, threatened
against such Borrower at law or in equity before any Official Body which
individually or in the aggregate may result in any Material Adverse Change.
Such Borrower is not in violation of any order, writ, injunction, or any
decree of any Official Body which may result in any Material Adverse
Change.
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(g) Title to Properties. Such Borrower has good and marketable title
to or valid leasehold interests in all properties, assets, and other rights
which it purports to own or lease or which are reflected as owned or leased
on its books and records, free and clear of all Liens and encumbrances
except Permitted Liens. All leases of property are in full force and effect
and are subject only to the terms and conditions of the applicable leases.
(h) Financial Statements, Reinsurance Coverage.
(A) Historical Statements. The Company has delivered to the
Agent copies of its audited consolidated year-end financial statements
for and as of the end of the three (3) fiscal years ended December 31,
2000, 2001 and 2002 (the "Historical Statements"). The Historical
Statements were compiled from the books and records maintained by the
Company's management, are correct and complete and fairly represent
the consolidated financial condition of the Company and its
Subsidiaries as of their dates and the results of operations for the
fiscal periods then ended and have been prepared in accordance with
GAAP and statutory requirements consistently applied.
(B) Accuracy of Financial Statements. As of the Closing Date,
neither the Company nor any Subsidiary of the Company has any
liabilities, contingent or otherwise, or forward or long-term
commitments or Off-Balance Sheet Transactions that are not disclosed
in the Historical Statements or in the notes thereto, and except as
disclosed therein there are no unrealized or anticipated losses from
any commitments of the Company or any Subsidiary of the Company which
may cause a Material Adverse Change. Since December 31, 2002, no
Material Adverse Change has occurred.
(C) Reinsurance Coverage. The Company has delivered Schedule
5.01(h) to the Agent setting forth the amount, terms, and provider(s)
to the Company of reinsurance and the extent of the Company's
insurance or reinsurance exposure covered thereby; as of December 31,
2002, Schedule 5.01(h) is correct and complete and fairly represents
the reinsurance coverage pertaining to the business of the Company and
its Subsidiaries ("Existing Reinsurance Coverage").
(i) Use of Proceeds; Margin Stock. Such Borrower intends to use the
proceeds of the Loans in accordance with Section 2.07 and Section 7.01(j).
Such Borrower does not engage or intend to engage principally, or as one of
its important activities, in the business of extending credit for the
purpose, immediately, incidentally or ultimately, of purchasing or carrying
margin stock (such term used herein within the meaning of Regulation U). No
part of the proceeds of any Loan has been or will be used, immediately,
incidentally or ultimately, to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any
margin stock or to refund Indebtedness originally incurred for such
purpose, or for any purpose which entails a violation of or which is
inconsistent with the provisions of the regulations of the Board of
Governors of the Federal Reserve System. Such Borrower does not hold or
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intend to hold margin stock in such amounts that more than 25% of the
reasonable value of its assets are or will be represented by margin stock.
(j) Full Disclosure. Neither this Agreement nor any other Loan
Document, nor any certificate, statement, agreement, or other document
furnished to the Agent or any Bank by such Borrower in connection herewith
or therewith, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
herein and therein, in light of the circumstances under which they were
made, not misleading. There is no fact known to such Borrower which
materially adversely affects the business, property, assets, financial
condition, results of operations, or prospects of such Borrower which has
not been set forth in this Agreement or in the certificates, statements,
agreements, or other documents furnished in writing to the Agent and the
Banks by the Borrowers prior to or at the date hereof in connection with
the transactions contemplated hereby.
(k) Taxes. All federal, state, local, and other tax returns required
to have been filed with respect to such Borrower have been filed, and
payment or adequate provision has been made for the payment of all taxes,
fees, assessments, and other governmental charges which have or may become
due pursuant to said returns or to assessments received, except to the
extent that such taxes, fees, assessments, and other charges are being
contested in good faith by appropriate proceedings diligently conducted and
for which such reserves or other appropriate provisions, if any, as shall
be required by GAAP shall have been made. There are no agreements or
waivers extending the statutory period of limitations applicable to any
federal income tax return of such Borrower for any period.
(l) Consents and Approvals. No consent, approval, exemption, order,
or authorization of, or a registration or filing with, any Official Body or
any other Person is required by any Law or any agreement in connection with
the execution, delivery, or carrying out of this Agreement or any of the
other Loan Documents by such Borrower, except such as have been obtained or
made on or prior to the Closing Date.
(m) No Event of Default; Compliance With Instruments. No event has
occurred and is continuing and no condition exists or will exist after
giving effect to the borrowings or other extensions of credit to be made on
the Closing Date under or pursuant to the Loan Documents which constitutes
an Event of Default or Potential Default. Such Borrower is not in violation
of (i) any term of its certificate or articles of incorporation, bylaws, or
other organizational documents or (ii) any material agreement or instrument
to which it is a party or by which it or any of its properties may be
subject or bound where such violation would constitute a Material Adverse
Change.
(n) Licenses, Etc. Such Borrower owns or possesses all the material
licenses, registrations, franchises, permits, and rights necessary to own
and operate its properties and to carry on its business as presently
conducted by such Borrower, without conflict with the rights of others.
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(o) Insurance. No notice has been given or claim made and no grounds
exist to cancel or avoid any insurance policy or bond in favor of such
Borrower or any of its property, or to reduce the coverage provided
thereby. Such policies and bonds provide adequate coverage from reputable
and financially sound insurers in amounts sufficient to insure the assets
and risks of such Borrower in accordance with prudent business practice in
the industry of such Borrower.
(p) Compliance With Laws. Such Borrower is in compliance in all
material respects with all applicable Laws in all jurisdictions in which
such Borrower is doing business, except where the failure to do so would
not constitute a Material Adverse Change.
(q) Material Contracts; Burdensome Restrictions. All material
contracts relating to the business operations of such Borrower are valid,
binding, and enforceable upon such Borrower and, to the knowledge of such
Borrower, each of the other parties thereto in accordance with their
respective terms, and there is no default thereunder, to such Borrower's
knowledge, with respect to parties other than such Borrower. Such Borrower
is not bound by any contractual obligation, or subject to any restriction
in any organizational document or any requirement of Law, which in and of
itself is material and adverse to such Borrower.
(r) Investment Companies; Regulated Entities. Such Borrower is not an
"investment company" registered or required to be registered under the
Investment Company Act of 1940 or under the "control" of an "investment
company" as such terms are defined in the Investment Company Act of 1940
and shall not become such an "investment company" or under such "control."
Such Borrower is not subject to any other Federal or state statute or
regulation limiting its ability to incur Indebtedness for borrowed money.
(s) Plans and Benefit Arrangements. The Company and each other member
of the ERISA Group are in compliance in all material respects with any
applicable provisions of ERISA with respect to all Benefit Arrangements,
Plans, and Multiemployer Plans. There has been no Prohibited Transaction
with respect to any Benefit Arrangement or any Plan or, to the best
knowledge of the Borrowers, with respect to any Multiemployer Plan or
Multiple Employer Plan, which could result in any material liability of the
Company or any other member of the ERISA Group. The Company and all other
members of the ERISA Group have made when due any and all payments required
to be made under any agreement relating to a Multiemployer Plan or a
Multiple Employer Plan or any Law pertaining thereto. With respect to each
Plan and Multiemployer Plan, the Company and each other member of the ERISA
Group (i) have fulfilled in all material respects their obligations under
the minimum funding standards of ERISA, (ii) have not incurred any
liability to the PBGC other than PBGC premiums due but not delinquent under
Section 4007 of ERISA, and (iii) have not had asserted against them any
penalty for failure to fulfill the minimum funding requirements of ERISA.
All Plans, Benefit Arrangements and Multiemployer Plans have been
administered in accordance with their terms and applicable Law.
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The Company and each other member of the ERISA Group are in compliance
in all material respects with any applicable provisions of ERISA with
respect to all Benefit Arrangements, Plans, and Multiemployer Plans. There
has been no Prohibited Transaction with respect to any Benefit Arrangement
or any Plan or, to the best knowledge of the Company, with respect to any
Multiemployer Plan or Multiple Employer Plan, which could result in any
material liability of the Company or any other member of the ERISA Group.
The Company and all other members of the ERISA Group have made when due any
and all payments required to be made under any agreement relating to a
Multiemployer Plan or a Multiple Employer Plan or any Law pertaining
thereto. With respect to each Plan and Multiemployer Plan, the Company and
each other member of the ERISA Group (i) have fulfilled in all material
respects their obligations under the minimum funding standards of ERISA,
(ii) have not incurred any liability to the PBGC other than PBGC premiums
due but not delinquent under Section 4007 of ERISA, and (iii) have not had
asserted against them any penalty for failure to fulfill the minimum
funding requirements of ERISA. All Plans, Benefit Arrangements and
Multiemployer Plans have been administered in accordance with their terms
and applicable Law.
(A) No event requiring notice to the PBGC under Section
302(f)(4)(A) of ERISA has occurred or is reasonably expected to occur
with respect to any Plan, and no amendment with respect to which
security is required under Section 307 of ERISA has been made or is
reasonably expected to be made to any Plan.
(B) Neither the Company, nor any other member of the ERISA
Group has incurred or reasonably expects to incur any material
withdrawal liability under ERISA to any Multiemployer Plan or Multiple
Employer Plan. Neither the Company, nor any other member of the ERISA
Group has been notified by any Multiemployer Plan or Multiple Employer
Plan that such Multiemployer Plan or Multiple Employer Plan has been
terminated within the meaning of Title IV of ERISA and, to the best
knowledge of the Company, no Multiemployer Plan or Multiple Employer
Plan is reasonably expected to be reorganized or terminated, within
the meaning of Title IV of ERISA.
(t) Senior Debt Status. The Obligations of such Borrower under this
Agreement and each of the other Loan Documents to which it is a party do
rank and will rank at least pari passu in priority of payment with all
other Indebtedness of the such Borrower except (i) Indebtedness of such
Borrower to the extent secured by Permitted Liens, and (ii) Indebtedness
which constitutes a "preferred claim" under Section 9-227 of the Maryland
Insurance Law (or any analogous provision of United Kingdom law) in the
event of the liquidation, rehabilitation, reorganization, or conservation
of the such Borrower. The Obligations of ACE under the Guaranty Agreement
do rank and will rank at least pari passu in priority of payment with all
other senior unsecured Indebtedness of ACE. There is no Lien upon or with
respect to any of the properties or income of such Borrower which secures
indebtedness or other obligations of any Person except for Permitted Liens.
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Section 5.02 Continuation of Representations. Each Borrower makes the
representations and warranties in this ARTICLE V on the date hereof and on the
Closing Date and each date thereafter on which a Loan is made as provided in and
subject to Section 6.01 and Section 6.02.
ARTICLE VI
CONDITIONS OF LENDING
---------------------
The obligation of each Bank to make Loans hereunder is subject to the
performance by the Borrowers of their Obligations to be performed hereunder at
or prior to the making of any such Loans and to the satisfaction of the
following further conditions:
Section 6.01 First Loans. On the Closing Date:
(a) Representations and Warranties True and Complete, No Defaults.
The representations and warranties of the Borrowers contained in Article V
shall be true, complete, and accurate on and as of the Closing Date with
the same effect as though such representations and warranties had been made
on and as of such date (except representations and warranties which relate
solely to an earlier date or time, which representations and warranties
shall be true and correct on and as of the specific dates or times referred
to therein), and the Borrowers shall have performed and complied with all
covenants and conditions hereof and thereof, no Event of Default or
Potential Default shall have occurred and be continuing.
(b) Secretary's Certificate. There shall be delivered to the Agent
for the benefit of each Bank certificates dated the Closing Date and signed
by the Secretary or an Assistant Secretary of the Company and ACE,
certifying as appropriate as to:
(i) all action taken by the Company and ACE in connection with
this Agreement and the other Loan Documents;
(ii) the names of the officer or officers authorized to sign
this Agreement and the other Loan Documents and the true signatures of
such officer or officers and specifying the Authorized Officers
permitted to act on behalf of the Company and ACE for purposes of this
Agreement and the true signatures of such officers, on which the Agent
and each Bank may conclusively rely; and
(iii) copies of its organizational documents, including its
certificate or articles of incorporation and bylaws as in effect on
the Closing Date certified by the appropriate state official where
such documents are filed in a state office together with certificates
from the appropriate state officials as to the continued existence and
good standing of the Company and ACE in each jurisdiction where
organized.
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(c) Delivery of Notes, Guaranty Agreements, and Loan Request. The
Notes and Guaranty Agreement shall have been duly executed and delivered to
the Agent for the benefit of the Banks.
(d) Opinion of Counsel. There shall be delivered to the Agent for the
benefit of each Bank one or more written opinions of counsel for the
Company and ACE dated the Closing Date and in form and substance
satisfactory to the Agent and its counsel:
(i) as to the matters set forth in Exhibit 6.01(d); and
(ii) as to such other matters incident to the transactions
contemplated herein as the Agent may reasonably request.
(e) Legal Details. All legal details and proceedings in connection
with the transactions contemplated by this Agreement and the other Loan
Documents shall be in form and substance satisfactory to the Agent and
counsel for the Agent, and the Agent shall have received all such other
counterpart originals or certified or other copies of such documents and
proceedings in connection with such transactions, in form and substance
satisfactory to the Agent and said counsel, as the Agent or said counsel
may reasonably request.
(f) Payment of Fees. The Borrowers shall have paid or caused to be
paid to the Agent for itself and for the account of the Banks to the extent
not previously paid the Facility Fees, all other fees accrued through the
Closing Date and the costs and expenses for which the Agent and the Banks
are entitled to be reimbursed.
(g) No Material Adverse Change. There has not occurred a Material
Adverse Change since the date of the Historical Statements.
(h) Existing Credit Agreement. The commitments under the Existing
Credit Agreement shall have been terminated, all loans thereunder shall
have been repaid in full, together with all accrued and unpaid interest
thereon, all accrued and unpaid fees thereon shall have been paid in full,
and all other amounts then owing pursuant to the Existing Credit Agreement
shall have been repaid in full, and the Agent shall have received evidence
in form, scope and substance reasonably satisfactory to it that the matters
set forth in this Section 6.01(h) have been satisfied at such time.
(i) Liens. All security interests and Liens created under the
Existing Credit Agreement and the related security documents on the capital
stock of, and assets (including intercompany notes) owned by, the Company
and its Subsidiaries shall have been terminated and released, and the Agent
shall have received UCC-3 termination statements, releases of mortgage (to
the extent applicable), a termination agreement and all such other releases
as may have been requested by the Agent, all of which shall be in form and
substance reasonably satisfactory to the Agent.
Section 6.02 Each Additional Loan. At the time of making any Loans,
other than Loans made on the Closing Date, and after giving effect to the
proposed extensions of credit: the representations and warranties of the
applicable Borrower contained in ARTICLE V and in the
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other Loan Documents and the representations and warranties of each Material
Subsidiary contained or incorporated in the Guarantor Joinder given by such
Material Subsidiary pursuant to Section 10.18 shall be true on and as of the
date of such additional Loan with the same effect as though such representations
and warranties had been made on and as of such date (except representations and
warranties which expressly relate solely to an earlier date or time, which
representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein) and the applicable Borrower shall
have performed and complied with all covenants and conditions hereof that are
required to be performed or complied with as of the date of such Loan and each
Material Subsidiary shall have complied with Section 10.18 and all other
covenants and conditions that are required to be performed or complied with as
of the date of such Loan and which are set forth in or incorporated into the
Guarantor Joinder given by such Material Subsidiary pursuant to Section 10.18;
no Event of Default or Potential Default shall have occurred and be continuing
or shall exist; and the applicable Borrower shall have delivered to the Agent a
duly executed and completed Loan Request.
ARTICLE VII
COVENANTS
---------
Section 7.01 Affirmative Covenants. Each Borrower covenants and agrees
that, until payment in full of the Loans, and interest thereon, satisfaction of
all of the other Obligations under the Loan Documents and termination of the
Commitments, each Borrower shall comply at all times with the following
affirmative covenants:
(a) Preservation of Existence, Etc. The Company shall, and shall
cause each of its Material Subsidiaries to, maintain its legal existence as
a corporation, limited partnership, or limited liability company and its
license or qualification and good standing in each jurisdiction in which
its ownership or lease of property or the nature of its business makes such
license or qualification necessary, except as otherwise expressly permitted
in Section 7.02(f) [Liquidations, Mergers, Etc.].
(b) Payment of Liabilities, Including Taxes, Etc. The Company shall,
and shall cause each of its Material Subsidiaries to, duly pay and
discharge all liabilities to which it is subject or which are asserted
against it, promptly as and when the same shall become due and payable,
including all taxes, assessments, and governmental charges upon it or any
of its properties, assets, income or profits, prior to the date on which
penalties attach thereto, except to the extent that such liabilities,
including taxes, assessments or charges, are being contested in good faith
and by appropriate and lawful proceedings diligently conducted and for
which such reserve or other appropriate provisions, if any, as shall be
required by GAAP shall have been made, provided that the Company will pay,
and cause its Material Subsidiaries to pay, all such liabilities forthwith
upon the commencement of proceedings to foreclose any Lien which may have
attached as security therefor.
(c) Maintenance of Insurance. The Company shall, and shall cause each
of its Material Subsidiaries to, insure its properties and assets against
loss or damage by
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insurable hazards as such assets are commonly insured (including, to the
extent applicable to the respective industry of the Company or any
Subsidiary thereof, fire, extended coverage, property damage, workers'
compensation, public liability, and business interruption insurance) and
against other risks (including errors and omissions) in such amounts as
similar properties and assets are insured by prudent companies in similar
circumstances carrying on similar businesses, and with reputable and
financially sound insurers, including self-insurance to the extent
customary.
(d) Maintenance of Properties and Leases. The Company shall, and
shall cause each of its Material Subsidiaries to, maintain in good repair,
working order, and condition (ordinary wear and tear excepted) in
accordance with the general practice of other businesses of similar
character and size, all of those properties useful or necessary to its
business, and from time to time the Company will make or cause to be made
all appropriate repairs, renewals, or replacements thereof.
(e) Maintenance of Licenses, Etc. The Company shall, and shall cause
each of its Material Subsidiaries to, maintain in full force and effect all
licenses, franchises, permits, rights, and other authorizations necessary
for the ownership and operation of its properties and business if the
failure so to maintain the same would constitute a Material Adverse Change.
(f) Visitation Rights. The Company shall, and shall cause each of its
Material Subsidiaries to, permit any of the officers or authorized
employees or representatives of the Agent to visit and inspect any of its
properties and to examine and make excerpts from its books and records and
discuss its business affairs, finances and accounts with its officers, all
in such detail and at such times and as often as the Agent may reasonably
request and at the pro rata expense of the Banks (if requested by the
Required Banks) or the Agent (if not so requested), provided that the Agent
shall provide the Company with reasonable notice prior to any visit or
inspection and provided further that during the continuation of any Event
of Default, each Bank shall have the right of visitation and inspection
granted above to Agent and all such visits and inspections by Agent and any
Bank during the continuation of an Event of Default shall be at the expense
of the Borrowers. In the event any Bank desires to conduct a visitation or
inspection of the Company or any Subsidiary during the continuation of an
Event of Default, such Bank shall make a reasonable effort to conduct such
visitation and inspection contemporaneously with any visitation or
inspection to be performed by the Agent.
(g) Keeping of Records and Books of Account. The Company shall, and
shall cause each Subsidiary of the Company to, maintain and keep proper
books of record and account which enable the Company and its Material
Subsidiaries to issue financial statements in accordance with GAAP and as
otherwise required by applicable Laws of any Official Body having
jurisdiction over the Company or any Subsidiary of the Company, and in
which full, true and correct entries shall be made in all material respects
of all its dealings and business and financial affairs.
(h) Plans and Benefit Arrangements. The Company shall, and shall
cause each other member of the ERISA Group to, comply with ERISA, the
Internal Revenue
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Code and other Laws applicable to Plans and Benefit Arrangements except
where such failure, alone or in conjunction with any other failure, would
not result in a Material Adverse Change. Without limiting the generality of
the foregoing, the Company shall cause all of its Plans and all Plans
maintained by any member of the ERISA Group to be funded in accordance with
the minimum funding requirements of ERISA and shall make, and cause each
member of the ERISA Group to make, in a timely manner, all contributions
due to Plans, Benefit Arrangements and Multiemployer Plans.
(i) Compliance With Laws. The Company shall, and shall cause each of
its Material Subsidiaries to, comply with all applicable Laws in all
respects, provided that it shall not be deemed to be a violation of this
Section 7.01(i) if any failure to comply with any Law would not result in
fines, penalties, remediation costs, other similar liabilities or
injunctive relief which in the aggregate would constitute a Material
Adverse Change.
(j) Use of Proceeds. Each Borrower will use the proceeds of the Loans
only for the general corporate purposes and working capital needs of the
such Borrower. No Borrower shall use the proceeds of the Loans for any
purposes which contravenes any applicable Law or any provision hereof.
(k) Senior Debt Status. The Company shall ensure that the Obligations
of the Company and any Material Subsidiary under this Agreement, a
Guarantor Joinder, the Guaranty Agreement, and each of the other Loan
Documents to which it is a party shall at all times rank at least pari
passu in priority of payment with all other senior unsecured Indebtedness
of the Company or such Material Subsidiary (except to the extent of any
Indebtedness which has a "preferred" status under any Law governing the
bankruptcy, liquidation, insolvency, rehabilitation, reorganization,
conservation, or like circumstance of the Company or such Material
Subsidiary) and no such other senior unsecured Indebtedness of the Company
or any Material Subsidiary shall at any time be governed by or subject to
covenants, defaults, or other provisions that are more restrictive on the
Company or any Material Subsidiary than those set forth herein; and
provided that if payment of any present or future Indebtedness of the
Company or any Material Subsidiary, except Indebtedness of the Company or
any Material Subsidiary to the extent secured by Permitted Liens, shall at
any time hereafter become secured by any Lien on any property, the Company
or such Material Subsidiary shall secure payment of the Obligations with a
Lien of like priority on the same or substantially similar property of the
same or greater value (but, in any event, such Lien shall secure an amount
of Obligations not to exceed the amount secured by the Lien given to secure
payment of such other Indebtedness).
Section 7.02 Negative Covenants. Each Borrower covenants and agrees
that until payment in full of the Loans and interest thereon, satisfaction of
all of the other Obligations hereunder and termination of the Commitments, such
Borrower shall comply with the following negative covenants:
(a) Indebtedness. The Company shall not, and shall not permit any of
its Material Subsidiaries to, at any time create, incur, assume, or suffer
to exist any Indebtedness, except:
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(i) Indebtedness under the Loan Documents;
(ii) Existing Indebtedness as set forth on Schedule 7.02(a)
(including any extensions or renewals thereof, provided there is no
increase in the amount thereof or other significant change in the
terms thereof unless otherwise specified on Schedule 7.02(a);
(iii) Capitalized and operating leases;
(iv) Indebtedness secured by Purchase Money Security Interests;
(v) Indebtedness of the Company or any Material Subsidiary to
the Company or any other Material Subsidiary or any of their
respective Affiliates;
(vi) Any Interest Rate Hedge;
(vii) Any Guaranties permitted pursuant to Section 7.02(c);
(viii) Other Indebtedness of the Company which is non-recourse to
the Company and in the nature (as to its purpose and non-recourse
structure) of that existing Indebtedness in favor of Deutsche Bank
shown on Exhibit 7.02(a) ("Soft Capital"); and
(ix) Other Indebtedness in an amount outstanding at any time
not to exceed five percent (5%) of the consolidated tangible net worth
of the Company and its Subsidiaries.
(b) Liens. The Company shall not, and shall not permit any of its
Material Subsidiaries to, at any time create, incur, assume, or suffer to
exist any Lien on any of its property or assets, tangible or intangible,
now owned or hereafter acquired, or agree or become liable to do so, except
Permitted Liens.
(c) Guaranties. The Company shall not, and shall not permit any of
its Material Subsidiaries to, at any time, directly or indirectly, become
or be liable in respect of any Guaranty, or assume, guaranty, become surety
for, endorse or otherwise agree, become or remain directly or contingently
liable upon or with respect to any obligation or liability of any other
Person, except for Guaranties of that Indebtedness of the Company and the
Material Subsidiaries permitted hereunder and (the following, collectively,
"Insurance-Related Guaranties"): (i) reinsurance and insurance policies and
Guaranties which the Company or any Material Subsidiary is licensed to
provide in the ordinary course of its reinsurance or insurance business,
and (ii) Guaranties given by the Company to support credit derivative
transactions entered into by AGR Financial Products Inc., a Delaware
corporation and Affiliate of the Company ("Credit Derivative Guaranties"),
subject, however, to the terms of Section 7.02(p).
(d) Loans and Investments. The Company shall not, and shall not
permit any of its Material Subsidiaries to, at any time make or suffer to
remain outstanding any loan or advance to, or purchase, acquire or own any
stock, bonds, notes or securities of, or any
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partnership interest (whether general or limited) or limited liability
company interest in, or any other investment or interest in, or make any
capital contribution to, any other Person, or agree, become, or remain
liable to do any of the foregoing, except:
(i) trade credit extended on usual and customary terms in the
ordinary course of business;
(ii) advances to employees to meet expenses incurred by such
employees in the ordinary course of business;
(iii) Permitted Investments and Permitted Acquisitions; and
(iv) loans, advances and investments in the Company and any
Material Subsidiary.
(e) Dividends and Related Distributions. The Company shall not, and
shall not permit any of its Material Subsidiaries to, make or pay, or agree
to become or remain liable to make or pay, any dividend or other
distribution of any nature (whether in cash, property, securities or
otherwise) on account of or in respect of its shares of capital stock,
partnership interests, or limited liability company interests or on account
of the purchase, redemption, retirement, or acquisition of its shares of
capital stock (or warrants, options or rights therefor), partnership
interests or limited liability company interests, except dividends or other
distributions payable to the Company or any Material Subsidiary and except
for dividends payable by the Company not in excess of $15,000,000 in any
fiscal year of the Company.
(f) Liquidations, Mergers, Consolidations, Acquisitions. The Company
shall not, and shall not permit any of its Material Subsidiaries to,
dissolve, liquidate, or wind-up its affairs, or become a party to any
merger or consolidation, or acquire by purchase, lease, or otherwise all or
substantially all of the assets or capital stock of or other ownership
interest in any other Person, provided that
(1) any Material Subsidiary may consolidate or merge into the
Company or any other Material Subsidiary or any of their respective
Affiliates, and
(2) the Company or any Material Subsidiary may acquire,
whether by purchase or by merger, (A) all of the ownership interests
of another Person or (B) substantially all of the assets of another
Person or of a business or division of another Person (each a
"Permitted Acquisition"), provided that each of the following
requirements is met:
(i) if the Company or any Material Subsidiary is
acquiring the ownership interests in such Person and such Person
meets the criteria for a Material Subsidiary set forth in the
definition of such term at Section 1.01, such Person shall
execute a Guarantor Joinder and join this Agreement as a
Guarantor pursuant to Section 10.18 [Joinder of Guarantors] on or
before the date of such Permitted Acquisition;
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(ii) the board of directors or other equivalent governing
body of such Person shall have approved such Permitted
Acquisition (if such approval has been given or if such approval
would be required by Law) and the Company or the relevant
Material Subsidiary shall have delivered to the Banks written
evidence of such approval of the board of directors (or
equivalent body) of such Person for such Permitted Acquisition
or, if such approval is not given and not required by Law and any
proceeds of the Loans are utilized for such Permitted
Acquisition, the Company or the relevant Material Subsidiary
shall deliver to the Banks evidence satisfactory to Agent that
the Permitted Acquisition is not hostile to, or otherwise opposed
by the board of directors of, such Person;
(iii) the business acquired, or the business conducted by
the Person whose ownership interests are being acquired, as
applicable, shall be substantially the same as one or more lines
of business conducted by the Company or any Material Subsidiary
or otherwise incidental to the business of a financial services
company and shall comply with Section 7.02(j) [Continuation of or
Change in Business];
(iv) no Potential Default or Event of Default shall exist
immediately prior to and after giving effect to such Permitted
Acquisition; and
(v) upon the reasonable request of Agent, the Company or
the relevant Material Subsidiary shall deliver to the Agent at
least five (5) Business Days before such Permitted Acquisition
such information about such Person or its assets as Agent may
reasonably require.
(g) Dispositions of Assets or Subsidiaries. The Company shall not,
and shall not permit any of its Material Subsidiaries to, sell, convey,
assign, lease, abandon, or otherwise transfer or dispose of, voluntarily or
involuntarily, any of its properties or assets, tangible or intangible
(including by sale, assignment, discount, or other disposition of accounts,
contract rights, chattel paper, equipment, or general intangibles with or
without recourse or of capital stock, shares of beneficial interest,
partnership interests or limited liability company interests of a
Subsidiary of the Company), except:
(i) transactions involving the sale of inventory, if any, in the
ordinary course of business;
(ii) any sale, transfer, or lease of assets, including any sale of
investment assets, in the ordinary course of business which are no longer
necessary or required in the conduct of the Company's or such Subsidiary's
business or which are incidental to the management of the Company's or its
Subsidiary's investment portfolio in a manner consistent with past
practices;
(iii) any sale, transfer or lease of assets by any wholly owned
Subsidiary of the Company to the Company or any Material Subsidiary;
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(iv) any sale, transfer or lease of assets in the ordinary course of
business which are replaced by reasonably equivalent substitute assets; or
(v) any sale, transfer or lease of assets, other than those
specifically excepted pursuant to clauses (i) through (iv) above, provided
that (A) at the time of any disposition, no Event of Default shall exist or
shall result from such disposition, and (B) the aggregate value of all
assets so sold by (x) the Company shall not exceed in any fiscal year ten
percent (10%) of the consolidated tangible net worth of the Company and its
Subsidiaries or (y) any Material Subsidiary in any fiscal year shall not
exceed a material portion of such Material Subsidiary's tangible net worth.
(h) Affiliate Transactions. The Company shall not, and shall not
permit any of its Material Subsidiaries to, enter into or carry out any
transaction (including purchasing property or services from or selling
property or services to any Affiliate of the Company or any Material
Subsidiary or other Person) unless such transaction is not otherwise
prohibited by this Agreement, is entered into upon fair and reasonable
arm's-length terms and conditions which are fully disclosed to the Agent,
and is in accordance with all applicable Law and accounting standards.
(i) Subsidiaries, Partnerships and Joint Ventures. The Company shall
not, and shall not permit any of its Material Subsidiaries to, own,
acquire, or create directly or indirectly any Material Subsidiary other
than Material Subsidiaries each of which has joined this Agreement as a
Guarantor at any time after the Closing Date in accordance with Section
10.18 [Joinder of Guarantors]; provided that the UK Borrower shall not be
required to become a Guarantor. Each of the Company and its Material
Subsidiaries shall not become or agree to become (1) a general or limited
partner in any general or limited partnership, except that the Company or
any of its Material Subsidiaries may be general or limited partners in any
other Material Subsidiary, (2) a member or manager of, or hold a limited
liability company interest in, a limited liability company, except that the
Company or any of its Material Subsidiaries may be members or managers of,
or hold limited liability company interests in, other Material
Subsidiaries, or (3) a joint venturer or hold a joint venture interest in
any joint venture except that the Company or any of its Material
Subsidiaries may be a party to a joint venture (A) that would not otherwise
be a Material Subsidiary were it a Subsidiary of Company, and (B) as to
which neither the Company nor any Material Subsidiary is directly or
indirectly jointly or severally liable for any act or omission of the joint
venture beyond the amount of its investment therein.
(j) Continuation of or Change in Business. The Company shall not, and
shall not permit any of its Material Subsidiaries to, make a material
change in the nature of its business as substantially conducted and
operated by the Company or such Subsidiary as of the Closing Date;
provided, however, that it shall not be a material change hereunder for the
Company to alter the concentration percentages of products offered or
business conducted as of the Closing Date, nor to enter into any business
incidental to the offering of such products or the conduct of such business
and it shall not be a material change hereunder for a Material Subsidiary
to engage in any business incidental to the conduct of a financial services
company.
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(k) Plans and Benefit Arrangements. The Company shall not, and shall
not permit any of its Material Subsidiaries to, engage in a Prohibited
Transaction with any Plan, Benefit Arrangement, or Multiemployer Plan
which, alone or in conjunction with any other circumstance or set of
circumstances, would result in a material liability under ERISA or
otherwise violate ERISA in a material respect.
(l) Fiscal Year. The Company shall not, and shall not permit any
Subsidiary of the Company to, change its fiscal year from the twelve-month
period beginning January 1 and ending December 31 unless the Company has
(i) provided thirty (30) days prior written notice to the Agent and the
Banks of the proposed change accompanied by an explanation in reasonable
detail of the effect thereof on the Company and its Subsidiaries in general
and on the Company's or its Material Subsidiary's financial reporting and
covenant compliance hereunder, and (ii) agreed to amend the covenants
contained herein (including the financial covenants set forth below) if
reasonably requested by the Agent and the Required Banks to maintain the
continuity of the such covenants.
(m) Minimum Statutory Capital. The Company shall not at any time
permit the Statutory Capital of the Company to be less than eighty percent
(80%) of the Statutory Capital the Company as of the most recent fiscal
quarter of the Company prior to the Closing Date.
(n) Maximum Exposure Ratio. The Company shall not at any time permit
the ratio of the Net Par of the Company to the Statutory Capital the
Company to exceed 150 to 1.0.
(o) Maximum Debt to Total Capitalization Ratio. The Company shall
maintain at all times a ratio of Consolidated Debt to Total Capitalization
of not more than 0.35 to 1.0.
(p) Maximum Collateralized Credit Derivative Guaranties. The Company
shall not at any time permit the aggregate value of all property of the
Company or any of the Material Subsidiaries subject to a Lien given to
secure payment of Credit Derivative Guaranties to exceed eleven percent
(11%) of the sum of Total Capitalization plus the aggregate value of all
collateral provided in accordance herewith to the Agent for the benefit of
the Banks, except to the extent that the Agent for the benefit of the Banks
is provided with a Lien of equal priority on substantially similar property
of the Company having a value equal to the amount by which such percentage
is exceeded (the amount by which such percentage is exceeded, for the
purposes of this Section 7.02(p), being referred to herein as the "Excess
Lien Amount"). Property subject to such Lien shall be reduced or released,
as the case may be, at any time by the Agent upon the request of the
Company and without further action or consent of any of the Banks whenever
the value of the property subject to that Lien in favor of the Agent for
the benefit of the Banks established pursuant to this Section 7.02(p) at
such time exceeds the Excess Lien Amount.
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Section 7.03 Reporting Requirements. Each Borrower covenants and
agrees that until payment in full of the Loans and interest thereon,
satisfaction of all other Obligations hereunder and under the other Loan
Documents and termination of the Commitments, the Company will furnish or cause
to be furnished to the Agent and each of the Banks:
(a) Quarterly Financial Statements. As soon as available and in any
event within forty-five (45) calendar days after the end of each of the
first three fiscal quarters in each fiscal year, the Form 10-Q of ACE as
filed with the SEC and two sets of financial statements of the Company,
each consisting of a consolidated balance sheet as of the end of such
fiscal quarter and related consolidated statements of income, stockholders'
equity, and cash flows for the fiscal quarter then ended and the fiscal
year through that date, all in reasonable detail and certified (subject to
normal year-end audit adjustments) by the Chief Executive Officer,
President, Chief Financial Officer, Treasurer, or Assistant Treasurer of
the Company as having been prepared as to one set of financial statements
in accordance with GAAP, consistently applied, and as to the other set of
financial statements as having been prepared in accordance with statutory
accounting principles required by the State of Maryland.
(b) Annual Financial Statements. As soon as available and in any
event within ninety (90) days after the end of each fiscal year of the
Company, the Form 10-K of ACE as filed with the SEC and two sets of
financial statements of the Company each consisting of a consolidated
balance sheet as of the end of such fiscal year, and related consolidated
statements of income, stockholders' equity, and cash flows for the fiscal
year then ended, all in reasonable detail with one such set being prepared
in accordance with GAAP, consistently applied, and the other set being
prepared in accordance with statutory accounting principles required by the
State of Maryland, and, in each case, certified by independent certified
public accountants of nationally recognized standing satisfactory to the
Agent. The certificate or report of accountants shall be free of
qualifications (other than any consistency qualification that may result
from a change in the method used to prepare the financial statements as to
which such accountants concur) and shall not indicate the occurrence or
existence of any event, condition, or contingency which would materially
impair the prospect of payment or performance of any covenant, agreement,
or duty of the Company or any Material Subsidiary under any of the Loan
Documents.
(c) Certificate of the Company. Concurrently with the financial
statements of the Company furnished to the Agent and to the Banks pursuant
to Section 7.03(a) [Quarterly Financial Statements] and Section 7.03(b)
[Annual Financial Statements], a certificate (each a "Compliance
Certificate") of the Company signed by the Chief Executive Officer,
President, Chief Financial Officer, Treasurer, or Assistant Treasurer of
the Company, in the form of Exhibit 7.03, to the effect that, except as
described pursuant to Section 7.03(d) [Notice of Default], (i) the
representations and warranties of the Borrowers contained in ARTICLE V and
in the other Loan Documents and the representations and warranties of each
Material Subsidiary, if any, contained or incorporated in the Guarantor
Joinder given by such Material Subsidiary pursuant to Section 10.18 are
true on and as of the date of such certificate with the same effect as
though such representations and warranties had been made on and as of such
date (except
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representations and warranties which expressly relate solely to an earlier
date or time) and each Borrower has performed and complied with all
covenants and conditions hereof and each Material Subsidiary, if any, shall
have complied with all covenants and conditions of or incorporated into the
Guarantor Joinder given by such Material Subsidiary pursuant to Section
10.18, (ii) no Event of Default or Potential Default exists and is
continuing on the date of such certificate, and (iii) containing
calculations in sufficient detail to (A) demonstrate compliance as of the
date of such financial statements with all financial covenants contained in
Section 7.02 [Negative Covenants] and (B) determine the Net Par of the
Company and any material changes or loss experience in connection with
Existing Reinsurance Coverage from the components thereof set forth on
Schedule 5.01(h).
(d) Notice of Default. Promptly after any officer of a Borrower has
learned of: (i) the occurrence of an Event of Default or Potential Default,
a certificate signed by the Chief Executive Officer, President, Chief
Financial Officer, Treasurer, or Assistant Treasurer of such Borrower
setting forth the details of such Event of Default or Potential Default and
the action which such Borrower proposes to take with respect thereto, or
(ii) the creation or acquisition of a Material Subsidiary (or the existence
of a Material Subsidiary other than the UK Borrower which has not executed
and delivered a Guaranty Agreement to Agent for the benefit of the Banks),
a certificate signed by the Chief Executive Officer, President, Chief
Financial Officer, Treasurer, or Assistant Treasurer of the Company setting
forth the legal name, jurisdiction of organization, and such other relevant
information reasonably requested by Agent.
(e) Off-Balance Sheet Financing. None of the Company or any of its
Material Subsidiaries shall engage in any off-balance sheet transaction
(i.e., the liabilities in respect of which do not appear on the liability
side of the balance sheet) providing the functional equivalent of material
Indebtedness or otherwise providing for a material liability of the Company
or any of its Material Subsidiaries (collectively, "Off-Balance Sheet
Transactions"), except such Off-Balance Sheet Transactions as are fully
disclosed to the Banks and Agent prior to their creation.
(f) Notice of Litigation. Promptly after the commencement thereof,
notice of all actions, suits, proceedings or investigations before or by
any Official Body or any other Person against the Company or any Material
Subsidiary of the Company, which involve a claim or series of claims in
excess of $20,000,000 or which if adversely determined would constitute a
Material Adverse Change.
(g) Notice of Change in Insurer Financial Strength Rating. Within two
(2) Business Days after Standard & Poor's or ▇▇▇▇▇'▇ announces a change in
the Company's Insurer Financial Strength Rating, notice of such change. The
Company will deliver together with such notice a copy of any written
notification which the Company received from the applicable rating agency
regarding such change of its Insurer Financial Strength Rating.
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(h) Sale of Assets. At least fifteen (15) calendar days prior
thereto, notice with respect to any proposed sale or transfer of material
assets pursuant to Section 7.02(g)(v).
(i) Budgets, Other Reports and Information. Promptly upon their
becoming available to the Company, such reports and information as any of
the Banks may from time to time reasonably request. Each Borrower shall
also notify the Banks and Agent promptly of the enactment, enforcement, or
adoption of any Law which may result in a Material Adverse Change with
respect to such Borrower.
ARTICLE VIII
DEFAULT
-------
Section 8.01 Events of Default. An Event of Default shall mean the
occurrence or existence of any one or more of the following events or conditions
(whatever the reason therefor and whether voluntary, involuntary, or effected by
operation of Law):
(a) Payments Under Loan Documents. Either Borrower shall fail to pay
(i) any principal of any Loan (including scheduled installments or
mandatory prepayments, if any, or the payment due at maturity) when such
principal is due hereunder or (ii) any interest on any Loan or any other
amount owing hereunder or under the other Loan Documents within five (5)
Business Days after such interest or other amount becomes due in accordance
with the terms hereof or thereof;
(b) Breach of Warranty. Any representation or warranty made at any
time by any of the Company and the Material Subsidiaries herein or by any
of the Company and the Material Subsidiaries in any other Loan Document, or
in any certificate, other instrument, or statement furnished by the Company
or a Material Subsidiary pursuant to the provisions hereof or thereof,
shall prove to have been false or misleading in any material respect as of
the time it was made or furnished;
(c) Breach of Negative Covenants or Visitation Rights. The Company or
any Material Subsidiary shall default in the observance or performance of
any covenant contained in Section 7.02 [Negative Covenants] or shall
default for a period of ten (10) days or more in the observance or
performance of any covenant contained in Section 7.01(f);
(d) Breach of Other Covenants. There shall be a default in the
observance or performance of any other covenant, condition, or provision
hereof or of any other Loan Document and such default shall continue
unremedied for a period of thirty (30) days (such grace period to be
applicable only in the event such default can be remedied by corrective
action);
(e) Defaults in Other Agreements or Indebtedness. A default or event
of default shall occur at any time under the terms of any other agreement
involving borrowed money or the extension of credit or any other
Indebtedness under which the
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Company or any Material Subsidiary of the Company may be obligated as a
borrower or guarantor in excess of $20,000,000 in the aggregate, and such
breach, default or event of default consists of the failure to pay (beyond
any period of grace permitted with respect thereto, whether waived or not)
any Indebtedness when due (whether at stated maturity, by acceleration or
otherwise) or if such breach or default causes the acceleration of any
Indebtedness (whether or not such right shall have been waived) or the
termination of any commitment to lend;
(f) Final Judgments or Orders. Any final judgments or orders for the
payment of money which results in an uninsured liability to pay in excess
of $20,000,000 in the aggregate shall be entered against the Company or any
Material Subsidiary by a court having jurisdiction in the premises, which
judgment is not discharged, vacated, bonded, or stayed pending appeal
within a period of forty-five (45) days from the date of entry;
(g) Loan Document Unenforceable. Any of the Loan Documents shall
cease to be legal, valid, and binding agreements enforceable against the
party executing the same or such party's successors and assigns (as
permitted under the Loan Documents) in accordance with the respective terms
thereof or shall in any way be terminated (except in accordance with its
terms) or become or be declared stayed, ineffective, or inoperative or
shall cease to give or provide the respective Liens or security interests
intended to be created thereby; provided, however, if any of the foregoing
is a result of an involuntary proceeding of the type described in Section
8.01(m), such proceeding has not been contested by the affected party or
has not been dismissed after the passage of more than sixty (60) days;
(h) Losses; Proceedings Against Assets. Any of the Company's assets
having an aggregate value (reasonably determined) in excess of five (5%) of
the tangible net worth of Company and its Subsidiaries, or any of its
Material Subsidiaries' assets having an aggregate value (reasonably
determined) in excess of a material amount of such Material Subsidiary's
tangible net worth, are attached, seized, levied upon or subjected to a
writ or distress warrant; or such come within the possession of any
receiver, trustee, custodian or assignee for the benefit of creditors and
the same is not cured within sixty (60) days thereafter;
(i) Notice of Lien or Assessment. A notice of Lien or assessment in
excess of $20,000,000 which is not a Permitted Lien is filed of record with
respect to all or any part of the Borrower's or any of its Material
Subsidiaries' assets by the United States, or any department, agency, or
instrumentality thereof, or by any state, county, municipal, or other
governmental agency, including the PBGC, or any taxes or debts owing at any
time or times hereafter to any one of these becomes payable and the same is
not paid within thirty (30) days after the same becomes payable;
(j) Insolvency. The Company or any Material Subsidiary of the Company
ceases to be solvent or admits in writing its inability to pay its debts as
they mature;
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(k) Events Relating to Plans and Benefit Arrangements. Any of the
following occurs: (i) any Reportable Event, which the Agent determines in
good faith constitutes grounds for the termination of any Plan by the PBGC
or the appointment of a trustee to administer or liquidate any Plan, shall
have occurred and be continuing; (ii) proceedings shall have been
instituted or other action taken to terminate any Plan, or a termination
notice shall have been filed with respect to any Plan; (iii) a trustee
shall be appointed to administer or liquidate any Plan; (iv) the PBGC shall
give notice of its intent to institute proceedings to terminate any Plan or
Plans or to appoint a trustee to administer or liquidate any Plan; and, in
the case of the occurrence of (i), (ii), (iii) or (iv) above, the Agent
determines in good faith that the amount of the Company's liability is
likely to exceed 10% of its Consolidated Tangible Net Worth; (v) the
Company or any member of the ERISA Group shall fail to make any
contributions when due to a Plan or a Multiemployer Plan; (vi) the Company
or any other member of the ERISA Group shall make any amendment to a Plan
with respect to which security is required under Section 307 of ERISA;
(vii) the Company or any other member of the ERISA Group shall withdraw
completely or partially from a Multiemployer Plan; (viii) the Company or
any other member of the ERISA Group shall withdraw (or shall be deemed
under Section 4062(e) of ERISA to withdraw) from a Multiple Employer Plan;
or (ix) any applicable Law is adopted, changed or interpreted by any
Official Body with respect to or otherwise affecting one or more Plans,
Multiemployer Plans or Benefit Arrangements and, with respect to any of the
events specified in (v), (vi), (vii), (viii) or (ix), the Agent determines
in good faith that any such occurrence would be reasonably likely to
materially and adversely affect the total enterprise represented by the
Company and the other members of the ERISA Group;
(l) Change of Control. (i) Any person or group of persons (within the
meaning of Sections 13(d) or 14(a) of the Securities Exchange Act of 1934,
as amended), other than ACE Limited or an Affiliate of ACE Limited, shall
have acquired beneficial ownership of (within the meaning of Rule 13d-3
promulgated by the SEC under said Act) 30% or more of the voting capital
stock of the Company; or (ii) within a period of twelve (12) consecutive
calendar months, individuals who were directors of the Company on the first
day of such period and individuals approved by ACE Limited or an Affiliate
of ACE Limited shall cease to constitute a majority of the board of
directors of the Company; or (iii) the UK Borrower shall cease to be a
subsidiary of the Company at any time when any Loans are outstanding to the
UK Borrower;
(m) Involuntary Proceedings. A proceeding shall have been instituted
in a court having jurisdiction in the premises seeking a decree or order
for relief in respect of the Company or any Material Subsidiary of the
Company in an involuntary case under any applicable bankruptcy, insolvency,
reorganization, or other similar law now or hereafter in effect, or for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator, or conservator (or similar official) of the Company or any
Material Subsidiary of the Company or for any substantial part of its
property, or for the winding-up or liquidation of its affairs, and such
proceeding shall remain undismissed or unstayed and in effect for a period
of sixty (60) consecutive days or such court shall enter a decree or order
granting any of the relief sought in such proceeding; or
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(n) Voluntary Proceedings. The Company or any Material Subsidiary of
the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency, reorganization, or other similar law now or
hereafter in effect, shall consent to the entry of an order for relief in
an involuntary case under any such law, or shall consent to the appointment
or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator, or conservator (or other similar official) of itself
or for any substantial part of its property or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any action in furtherance of any of
the foregoing.
Section 8.02 Consequences of Event of Default. (a) Events of Default
Other Than Bankruptcy, Insolvency or Reorganization Proceedings. If an Event of
Default or Potential Default specified under Section 8.01(a) through Section
8.01(l) shall occur and be continuing, the Banks and the Agent shall be under no
further obligation to make Revolving Credit Loans, Term Loans or Bid Loans, as
the case may be, and if any such Event of Default shall occur and be continuing,
the Agent may, and upon the request of the Required Banks, shall by written
notice to the Borrowers, take any of the following actions: (i) terminate the
Commitments and thereupon the Commitments shall be terminated and of no further
force or effect, or (ii) declare the unpaid principal amount of the Revolving
Credit Notes, Term Loans and Bid Notes then outstanding and all interest accrued
thereon, any unpaid fees, and all other Indebtedness of the Borrowers to the
Banks hereunder and thereunder to be forthwith due and payable, and the same
shall thereupon become and be immediately due and payable to the Agent for the
benefit of each Bank without presentment, demand, protest or any other notice of
any kind, all of which are hereby expressly waived; and
(b) Bankruptcy, Insolvency or Reorganization Proceedings. If an Event
of Default specified under Section 8.01(m) [Involuntary Proceedings] or Section
8.01(n) [Voluntary Proceedings] shall occur, the Commitments shall automatically
terminate and be of no further force and effect, the Banks shall be under no
further obligations to make Revolving Credit Loans, Term Loans or Bid Loans
hereunder and the unpaid principal amount of the Loans then outstanding and all
interest accrued thereon, any unpaid fees and all other Indebtedness of the
Borrowers to the Banks hereunder and thereunder shall be immediately due and
payable, without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived; and
(c) Set-off. If an Event of Default shall occur and be continuing,
any Bank to whom any Obligation is owed by any Borrower or any Material
Subsidiary hereunder or under any other Loan Document or any participant of such
Bank which has agreed in writing to be bound by the provisions of Section 9.13
[Equalization of Banks] and any branch, Subsidiary, or Affiliate of such Bank or
participant anywhere shall have the right, in addition to all other rights and
remedies available to it, without notice to any Borrower or any Material
Subsidiary, to set-off against and apply to the then unpaid balance of all the
Loans and all other Obligations hereunder or under any other Loan Document any
debt owing to, and any other funds held in any manner for the account of, any
Borrower or any Material Subsidiary by such Bank or participant or by such
branch, Subsidiary or Affiliate, including all funds in all deposit accounts
(whether time or demand, general or special, provisionally credited or finally
credited, or otherwise) now or hereafter maintained by any Borrower or any
Material Subsidiary for its own account (but not
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including funds held in custodian or trust accounts) with such Bank or
participant or such branch, Subsidiary, or Affiliate. Such right shall exist
whether or not any Bank or the Agent shall have made any demand under this
Agreement or any other Loan Document, whether or not such debt owing to or funds
held for the account of any Borrower or any Material Subsidiary is or are
matured or unmatured and regardless of the existence or adequacy of any Guaranty
or any other security, right, or remedy available to any Bank or the Agent; and
(d) Suits, Actions, Proceedings. If an Event of Default shall occur
and be continuing, and whether or not the Agent shall have accelerated the
maturity of Committed Loans pursuant to any of the foregoing provisions of this
Section 8.02, the Agent or any Bank, upon the request or consent of the Required
Banks, may proceed to protect and enforce the Agent's or any one or more Banks'
rights by suit in equity, action at law and/or other appropriate proceeding,
whether for the specific performance of any covenant or agreement contained in
this Agreement or the other Loan Documents, including as permitted by applicable
Law the obtaining of the ex parte appointment of a receiver, and, if such amount
shall have become due, by declaration or otherwise, proceed to enforce the
payment thereof or any other legal or equitable right of the Agent or such Bank;
and
(e) Application of Proceeds. From and after the date on which the
Agent has taken any action pursuant to this Section 8.02 and until all
Obligations have been paid in full, any and all proceeds received by the Agent
from the exercise of any remedy by the Agent, shall be applied as follows:
(A) first, to reimburse the Agent and the Banks for out-of-pocket
costs, expenses and disbursements, including reasonable attorneys' fees and
legal expenses, incurred by the Agent or the Banks in connection with
collection of any Obligations under any of the Loan Documents;
(B) second, to the repayment of all Indebtedness then due and unpaid
of any Borrower or any Material Subsidiary to the Banks incurred under this
Agreement or any of the other Loan Documents, whether of principal,
interest, fees, expenses or otherwise, in such manner as the Agent may
determine in its discretion; and
(C) the balance, if any, as required by Law.
(f) Other Rights and Remedies. In addition to all of the rights and
remedies contained in this Agreement or in any of the other Loan Documents, the
Agent shall have all of the rights and remedies under applicable Law, all of
which rights and remedies shall be cumulative and non-exclusive, to the extent
permitted by Law. The Agent may, and upon the request of the Required Banks
shall, exercise all post-default rights granted to the Agent and the Banks under
the Loan Documents or applicable Law.
Section 8.03 Right of Competitive Bid Loan Banks. If any Event of
Default shall occur and be continuing, the Banks which have any Bid Loans then
outstanding to the Borrowers (the "Bid Loan Banks") shall not be entitled to
accelerate payment of the Bid Loans or to exercise any right or remedy related
to the collection of the Bid Loans until the Commitments shall be terminated
hereunder pursuant to Section 8.02. Upon such a termination of the
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Commitments: (i) references to Revolving Credit Loans in Section 8.02 shall be
deemed to apply also to the Bid Loans and the Bid Loan Banks shall be entitled
to all enforcement rights given to a holder of a Revolving Credit Loan in
Section 8.02, and (ii) the definition of Required Banks shall be changed as
provided in Section 1.01 so that each Bank shall have voting rights hereunder in
proportion to its share of the total Loans outstanding.
ARTICLE IX
THE AGENT
---------
Section 9.01 Appointment. Each Bank hereby irrevocably designates,
appoints and authorizes ABN AMRO Bank N.V. to act as Agent for such Bank under
this Agreement and to execute and deliver or accept on behalf of each of the
Banks the other Loan Documents. Each Bank hereby irrevocably authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and the other Loan Documents and any other instruments and agreements referred
to herein, and to exercise such powers and to perform such duties hereunder as
are specifically delegated to or required of the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. ABN AMRO Bank
N.V. agrees to act as the Agent on behalf of the Banks to the extent provided in
this Agreement.
Section 9.02 Delegation of Duties. The Agent may perform any of its
duties hereunder by or through agents or employees (provided such delegation
does not constitute a relinquishment of its duties as Agent) and, subject to
Section 9.05 [Reimbursement of Agent by Borrower, Etc.] and Section 9.06, shall
be entitled to engage and pay for the advice or services of any attorneys,
accountants or other experts concerning all matters pertaining to its duties
hereunder and to rely upon any advice so obtained.
Section 9.03 Nature of Duties; Independent Credit Investigation. The
Agent shall have no duties or responsibilities except those expressly set forth
in this Agreement and no implied covenants, functions, responsibilities, duties,
obligations, or liabilities shall be read into this Agreement or otherwise
exist. The duties of the Agent shall be mechanical and administrative in nature;
the Agent shall not have by reason of this Agreement a fiduciary or trust
relationship in respect of any Bank; and nothing in this Agreement, expressed or
implied, is intended to or shall be construed as to impose upon the Agent any
obligations in respect of this Agreement except as expressly set forth herein.
Without limiting the generality of the foregoing, the use of the term "agent" in
this Agreement with reference to the Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties. Each Bank expressly
acknowledges (i) that the Agent has not made any representations or warranties
to it and that no act by the Agent hereafter taken, including any review of the
affairs of any of the Company or any of its Subsidiaries, shall be deemed to
constitute any representation or warranty by the Agent to any Bank; (ii) that it
has made and will continue to make, without reliance upon the Agent, its own
independent investigation of the financial condition and affairs and its own
appraisal of the creditworthiness of each of the Company and its Subsidiaries in
connection with this Agreement and the making and continuance of the Loans
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hereunder; and (iii) except as expressly provided herein, that the Agent shall
have no duty or responsibility, either initially or on a continuing basis, to
provide any Bank with any credit or other information with respect thereto,
whether coming into its possession before the making of any Loan or at any time
or times thereafter.
Section 9.04 Actions in Discretion of Agent; Instructions From the
Banks. The Agent agrees, upon the written request of the Required Banks, to take
or refrain from taking any action of the type specified as being within the
Agent's rights, powers or discretion herein, provided that the Agent shall not
be required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement or any other Loan Document or applicable
Law. In the absence of a request by the Required Banks, the Agent shall have
authority, in its sole discretion, to take or not to take any such action,
unless this Agreement specifically requires the consent of the Required Banks or
all of the Banks. Any action taken or failure to act pursuant to such
instructions or discretion shall be binding on the Banks, subject to Section
9.06 [Exculpatory Provisions, Etc.]. Subject to the provisions of Section 9.06,
no Bank shall have any right of action whatsoever against the Agent as a result
of the Agent acting or refraining from acting hereunder in accordance with the
instructions of the Required Banks, or in the absence of such instructions, in
the absolute discretion of the Agent.
Section 9.05 Reimbursement and Indemnification of Agent by the
Borrowers. Each Borrower unconditionally, jointly and severally, agrees to pay
or reimburse the Agent and hold the Agent harmless against (a) liability for the
payment of all reasonable out-of-pocket costs, expenses, and disbursements
(including fees and expenses of counsel) incurred by the Agent (i) in connection
with the development, negotiation, preparation, printing, execution,
administration, syndication, interpretation and performance of this Agreement
and the other Loan Documents, (ii) relating to any requested amendments, waivers
or consents pursuant to the provisions hereof, (iii) in connection with the
enforcement of this Agreement or any other Loan Document or collection of
amounts due hereunder or thereunder or the proof and allowability of any claim
arising under this Agreement or any other Loan Document, whether in bankruptcy
or receivership proceedings or otherwise, and (iv) in any workout or
restructuring or in connection with the protection, preservation, exercise or
enforcement of any of the terms hereof or of any rights hereunder or under any
other Loan Document or in connection with any foreclosure, collection or
bankruptcy proceedings, and (b) all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against the Agent, in its capacity as such, in any way relating to or arising
out of this Agreement or any other Loan Documents or any action taken or omitted
by the Agent hereunder or thereunder, provided that the Borrowers shall not be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements if the
same results from the Agent's gross negligence or willful misconduct, or if the
Borrowers were not given notice of the subject claim and the opportunity to
participate in the defense thereof, at their expense (except that the Borrowers
shall remain liable to the extent such failure to give notice does not result in
a loss to the Borrowers), or if the same results from a compromise or settlement
agreement entered into without the consent of the Borrowers, which shall not be
unreasonably withheld.
Section 9.06 Exculpatory Provisions; Limitation of Liability. Neither
the Agent nor any of its directors, officers, employees, agents, attorneys or
Affiliates shall (a) be liable to
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any Bank for any action taken or omitted to be taken by it or them hereunder, or
in connection herewith including pursuant to any Loan Document, unless caused by
its or their own gross negligence or willful misconduct, (b) be responsible in
any manner to any of the Banks for the effectiveness, enforceability,
genuineness, validity or the due execution of this Agreement or any other Loan
Documents or for any recital, representation, warranty, document, certificate,
report or statement herein or made or furnished under or in connection with this
Agreement or any other Loan Documents, or (c) be under any obligation to any of
the Banks to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions hereof or thereof on the part of the
Borrowers or any of their Subsidiaries, or the financial condition of the
Borrowers or any of their Subsidiaries, or the existence or possible existence
of any Event of Default or Potential Default. No claim may be made by the
Borrowers or any of their Subsidiaries, any Bank, the Agent or any of their
respective Subsidiaries against the Agent, any Bank or any of their respective
directors, officers, employees, agents, attorneys or Affiliates, or any of them,
for any special, indirect or consequential damages or, to the fullest extent
permitted by Law, for any punitive damages in respect of any claim or cause of
action (whether based on contract, tort, statutory liability, or any other
ground) based on, arising out of or related to any Loan Document or the
transactions contemplated hereby or any act, omission or event occurring in
connection therewith, including the negotiation, documentation, administration
or collection of the Loans, and the Borrowers (for themselves and on behalf of
each of their Subsidiaries), the Agent and each Bank hereby waive, release and
agree never to ▇▇▇ upon any claim for any such damages, whether such claim now
exists or hereafter arises and whether or not it is now known or suspected to
exist in their favor. Each Bank agrees that, except for notices, reports and
other documents expressly required to be furnished to the Banks by the Agent
hereunder or given to the Agent for the account of or with copies for the Banks,
the Agent and each of its directors, officers, employees, agents, attorneys or
Affiliates shall not have any duty or responsibility to provide any Bank with an
credit or other information concerning the business, operations, property,
condition (financial or otherwise), prospects or creditworthiness of the
Borrowers or any of their Subsidiaries which may come into the possession of the
Agent or any of its directors, officers, employees, agents, attorneys or
Affiliates.
Section 9.07 Reimbursement and Indemnification of Agent by Banks. Each
Bank agrees to reimburse and indemnify the Agent (to the extent not reimbursed
by the Borrowers and without limiting the Obligation of the Borrowers to do so)
in proportion to its Ratable Share from and against all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements, including attorneys' fees and disbursements
(including the allocated costs of staff counsel), and costs of appraisers and
environmental consultants, of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Agent, in its capacity as such, in any
way relating to or arising out of this Agreement or any other Loan Documents or
any action taken or omitted by the Agent hereunder or thereunder, provided that
no Bank shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements (a) if the same results from the Agent's gross negligence or
willful misconduct, or (b) if such Bank was not given notice of the subject
claim and the opportunity to participate in the defense thereof, at its expense
(except that such Bank shall remain liable to the extent such failure to give
notice does not result in a loss to the Bank), or (c) if the same results from a
compromise and settlement agreement entered into without the consent of such
Bank, which shall not be unreasonably withheld. In addition, each Bank agrees
promptly upon demand to reimburse the Agent (to the
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extent not reimbursed by the Borrowers and without limiting the Obligation of
the Borrowers to do so) in proportion to its Ratable Share for all amounts due
and payable by the Borrowers to the Agent in connection with the Agent's
periodic audit of the Company's or any of its respective Material Subsidiaries'
books, records and business properties.
Section 9.08 Reliance by Agent. The Agent shall be entitled to rely
upon any writing, telegram, telex or teletype message, resolution, notice,
consent, certificate, letter, cablegram, statement, order or other document or
conversation by telephone or otherwise believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons, and upon
the advice and opinions of counsel and other professional advisers selected by
the Agent. The Agent shall be fully justified in failing or refusing to take any
action hereunder unless it shall first be indemnified to its satisfaction by the
Banks against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action.
Section 9.09 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Potential Default or Event of
Default unless the Agent has received written notice from a Bank or a Borrower
referring to this Agreement, describing such Potential Default or Event of
Default and stating that such notice is a "notice of default."
Section 9.10 Notices. The Agent shall promptly send to each Bank a
copy of all notices received from any Borrower pursuant to the provisions of
this Agreement or the other Loan Documents promptly upon receipt thereof. The
Agent shall promptly notify the Borrowers and the other Banks of each change in
the Base Rate and the effective date thereof.
Section 9.11 Banks in Their Individual Capacities; Agents in Its
Individual Capacity. With respect to its Revolving Credit Commitment, the
Revolving Credit Loans and any Bid Loans made by it and any other rights and
powers given to it as a Bank hereunder or under any of the other Loan Documents,
the Agent shall have the same rights and powers hereunder as any other Bank and
may exercise the same as though it were not the Agent, and the term "Bank" and
"Banks" shall, unless the context otherwise indicates, include the Agent in its
individual capacity. ABN AMRO Bank and its Affiliates and each of the Banks and
their respective Affiliates may, without liability to account, except as
prohibited herein, make loans to, issue letters of credit for the account of,
acquire equity interests in, accept deposits from, discount drafts for, act as
trustee under indentures of, and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with, the Company and its
Subsidiaries and their Affiliates, in the case of the Agent, as though it were
not acting as Agent hereunder and in the case of each Bank, as though such Bank
were not a Bank hereunder, in each case without notice to or consent of the
other Banks. The Banks acknowledge that, pursuant to such activities, the Agent
or its Affiliates may (i) receive information regarding the Company and any of
its Subsidiaries or Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or any of its Subsidiaries
or Affiliates) and acknowledge that the Agent shall be under no obligation to
provide such information to them, and (ii) accept fees and other consideration
from the Company and any of its Subsidiaries for services in connection with
this Agreement and otherwise without having to account for the same to the
Banks.
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Section 9.12 Holders of Notes. The Agent may deem and treat any payee
of any Note as the owner thereof for all purposes hereof unless and until
written notice of the assignment or transfer thereof shall have been filed with
the Agent. Any request, authority or consent of any Person who at the time of
making such request or giving such authority or consent is the holder of any
Note shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.
Section 9.13 Equalization of Banks. The Banks and the holders of any
participations in any Commitments or Loans or other rights or obligations of a
Bank hereunder agree among themselves that, with respect to all amounts received
by any Bank or any such holder for application on any Obligation hereunder or
under any such participation, whether received by voluntary payment, by
realization upon security, by the exercise of the right of set-off or banker's
lien, by counterclaim, or by any other non-pro rata source, equitable adjustment
will be made in the manner stated in the following sentence so that, in effect,
all such excess amounts will be shared ratably among the Banks and such holders
in proportion to their interests in payments on the Loans, except as otherwise
provided in Section 3.04(c) [Agent's and Bank's Rights], Section 4.04(b)
[Replacement of a Bank] or Section 4.06 [Additional Compensation in Certain
Circumstances]. The Banks or any such holder receiving any such amount shall
purchase for cash from each of the other Banks an interest in such Bank's Loans
in such amount as shall result in a ratable participation by the Banks and each
such holder in the aggregate unpaid amount of the Loans, provided that if all or
any portion of such excess amount is thereafter recovered from the Bank or the
holder making such purchase, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, together with interest or other
amounts, if any, required by law (including court order) to be paid by the Bank
or the holder making such purchase.
Section 9.14 Successor Agent. The Agent (i) may resign as Agent or
(ii) shall resign if such resignation is required by Section 4.04(b)
[Replacement of a Bank], in either case of (i) or (ii) by giving not less than
thirty (30) days' prior written notice to the Borrowers. If the Agent shall
resign under this Agreement, then either (a) the Required Banks shall appoint
from among the Banks a successor agent for the Banks, subject to the consent of
the Borrowers, such consent not to be unreasonably withheld, or (b) if a
successor agent shall not be so appointed and approved within the thirty (30)
day period following the Agent's notice to the Banks of its resignation, then
the Agent shall appoint, with the consent of the Borrowers, such consent not to
be unreasonably withheld, a successor agent who shall serve as Agent until such
time as the Required Banks appoint and the Borrowers consent to the appointment
of a successor agent. Upon its appointment pursuant to either clause (a) or (b)
above, such successor agent shall succeed to the rights, powers and duties of
the Agent, and the term "Agent" shall mean such successor agent, effective upon
its appointment, and the former Agent's rights, powers and duties as Agent shall
be terminated without any other or further act or deed on the part of such
former Agent or any of the parties to this Agreement. After the resignation of
any Agent hereunder, the provisions of this ARTICLE IX shall inure to the
benefit of such former Agent and such former Agent shall not by reason of such
resignation be deemed to be released from liability for any actions taken or not
taken by it while it was an Agent under this Agreement.
Section 9.15 Agent's Fee. The Borrowers shall pay to the Agent a
nonrefundable fee (the "Bid Loan Processing Fee") in connection with processing
Bid Loans and a
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nonrefundable fee (the "Agent's Fee") for Agent's services hereunder under the
terms of a letter (the "Agent's Letter") between the Borrowers and Agent, as
amended from time to time.
Section 9.16 Availability of Funds. The Agent may assume that each
Bank has made or will make the proceeds of a Loan available to the Agent unless
the Agent shall have been notified by such Bank on or before the later of (1)
the close of Business on the Business Day preceding the Borrowing Date with
respect to such Loan or (2) two hours before the time on which the Agent
actually funds the proceeds of such Loan to the respective Borrower (whether
using its own funds pursuant to this Section 9.16 or using proceeds deposited
with the Agent by the Banks and whether such funding occurs before or after the
time on which Banks are required to deposit the proceeds of such Loan with the
Agent). The Agent may, in reliance upon such assumption (but shall not be
required to), make available to the respective Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the Agent by such
Bank, the Agent shall be entitled to recover such amount on demand from such
Bank (or, if such Bank fails to pay such amount forthwith upon such demand from
the Borrowers) together with interest thereon, in respect of each day during the
period commencing on the date such amount was made available to the Borrowers
and ending on the date the Agent recovers such amount, at a rate per annum equal
to (i) the Federal Funds Effective Rate during the first three (3) days after
such interest shall begin to accrue and (ii) the applicable interest rate in
respect of such Loan after the end of such three-day period.
Section 9.17 Calculations. In the absence of gross negligence or
willful misconduct, the Agent shall not be liable for any error in computing the
amount payable to any Bank whether in respect of the Loans, fees or any other
amounts due to the Banks under this Agreement. In the event an error in
computing any amount payable to any Bank is made, the Agent, the Borrowers and
each affected Bank shall, forthwith upon discovery of such error, make such
adjustments as shall be required to correct such error, and any compensation
therefor will be calculated at the Federal Funds Effective Rate.
Section 9.18 Beneficiaries. Except as expressly provided herein, the
provisions of this ARTICLE IX are solely for the benefit of the Agent and the
Banks, and the Company and its Subsidiaries shall not have any rights to rely on
or enforce any of the provisions hereof. In performing its functions and duties
under this Agreement, the Agent shall act solely as agent of the Banks and does
not assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for the Company or any of its
Subsidiaries.
ARTICLE X
MISCELLANEOUS
-------------
Section 10.01 Modifications, Amendments, or Waivers. With the written
consent of the Required Banks, the Agent, acting on behalf of all the Banks, and
the Borrowers may from time to time enter into written agreements amending or
changing any provision of this Agreement or any other Loan Document or the
rights of the Banks or the Borrowers hereunder or thereunder, or may grant
written waivers or consents to a departure from the due performance of the
Obligations hereunder or thereunder. Any such agreement, waiver or consent made
with
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such written consent shall be effective to bind all the Banks and the Borrowers;
provided that, without the written consent of all the Banks, no such agreement,
waiver, or consent may be made which will:
(a) Increase of Commitment; Extension of Expiration Date. Increase
the amount of the Revolving Credit Commitment of any Bank hereunder or
extend the Expiration Date or the Term Loan Maturity Date;
(b) Extension of Payment; Reduction of Principal Interest or Fees;
Modification of Terms of Payment. Whether or not any Loans are outstanding,
extend the time for payment of principal or interest of any Loan (excluding
the due date of any mandatory prepayment of a Loan or any mandatory
Commitment reduction in connection with such a mandatory prepayment
hereunder except for mandatory reductions of the Commitments on the
Expiration Date), the Facility Fee, the Term Loan Fee or any other fee
payable to any Bank, or reduce the principal amount of or the rate of
interest borne by any Loan or reduce the Facility Fee or any other fee
payable to any Bank, or otherwise affect the terms of payment of the
principal of or interest of any Loan, the Facility Fee or any other fee
payable to any Bank;
(c) Release of Collateral or Guarantor. Release any Guarantor from
its Obligations under the Guaranty Agreement or any other security for any
of the Obligations except as otherwise may be permitted by the terms hereof
or of the instrument establishing the Lien; or
(d) Miscellaneous. Amend Section 4.02 [Pro Rata Treatment of Banks],
Section 9.06 [Exculpatory Provisions, Etc.] or Section 9.13 [Equalization
of Banks] or this Section 10.01, alter any provision regarding the pro rata
treatment of the Banks, change the definition of Required Banks, or change
any requirement providing for the Banks or the Required Banks to authorize
the taking of any action hereunder;
provided, further, that no agreement, waiver or consent which would modify the
interests, rights or obligations of the Agent in its capacity as Agent or as an
issuer of letters of credit shall be effective without the written consent of
the Agent.
Section 10.02 No Implied Waivers; Cumulative Remedies; Writing
Required. No course of dealing and no delay or failure of the Agent or any Bank
in exercising any right, power, remedy or privilege under this Agreement or any
other Loan Document shall affect any other or future exercise thereof or operate
as a waiver thereof, nor shall any single or partial exercise thereof or any
abandonment or discontinuance of steps to enforce such a right, power, remedy or
privilege preclude any further exercise thereof or of any other right, power,
remedy or privilege. The rights and remedies of the Agent and the Banks under
this Agreement and any other Loan Documents are cumulative and not exclusive of
any rights or remedies which they would otherwise have. Any waiver, permit,
consent or approval of any kind or character on the part of any Bank of any
breach or default under this Agreement or any such waiver of any provision or
condition of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing.
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Section 10.03 Reimbursement and Indemnification of Banks by the
Borrower; Taxes. The Borrower agrees unconditionally upon demand to pay or
reimburse to each Bank (other than the Agent, as to which the Borrowers'
Obligations are set forth in Section 9.05 [Reimbursement of Agent By Borrower,
Etc.]) and to save such Bank harmless against (i) liability for the payment of
all reasonable out-of-pocket costs, expenses and disbursements (including fees
and expenses of counsel for each Bank except with respect to (a) and (b) below),
incurred by such Bank (a) in connection with the review, execution, delivery,
administration, or interpretation of this Agreement, and other instruments and
documents to be delivered hereunder, (b) relating to any amendments, waivers, or
consents pursuant to the provisions hereof, (c) in connection with the
enforcement of this Agreement or any other Loan Document, or collection of
amounts due hereunder or thereunder or the proof and allowability of any claim
arising under this Agreement or any other Loan Document, whether in bankruptcy
or receivership proceedings or otherwise, and (d) in any workout or
restructuring or in connection with the protection, preservation, exercise, or
enforcement of any of the terms hereof or of any rights hereunder or under any
other Loan Document or in connection with any foreclosure, collection, or
bankruptcy proceedings, or (ii) all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against such Bank (including such Bank's officers, directors and employees), in
its capacity as such, in any way relating to or arising out of this Agreement or
any other Loan Documents, use of proceeds of the Loans or the transactions
contemplated by the Loan Documents or any action taken or omitted by such Bank
(including such Bank's officers, directors and employees) hereunder or
thereunder, provided that the Borrowers shall not be liable to a Bank (including
such Bank's officers, directors and employees) for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, or disbursements (A) if the same results from such Bank's or
its officer's, director's or employee's gross negligence or willful misconduct,
or (B) if the Borrowers were not given notice of the subject claim and the
opportunity to participate in the defense thereof, at their expense (except that
the Borrowers shall remain liable to the extent such failure to give notice does
not result in a loss to the Borrowers), or (C) if the same results from a
compromise or settlement agreement entered into without the consent of the
Borrowers, which shall not be unreasonably withheld. The Banks will attempt to
minimize the fees and expenses of legal counsel for the Banks which are subject
to reimbursement by the Borrowers hereunder by considering the usage of one law
firm to represent the Banks and the Agent if appropriate under the
circumstances. The Borrowers, jointly and severally, agree unconditionally to
pay all stamp, document, transfer, recording or filing taxes or fees and similar
impositions now or hereafter determined by the Agent or any Bank to be payable
in connection with this Agreement or any other Loan Document, and the Borrowers,
jointly and severally, agree unconditionally to save the Agent and the Banks
harmless from and against any and all present or future claims, liabilities or
losses with respect to or resulting from any omission to pay or delay in paying
any such taxes, fees or impositions.
Section 10.04 Holidays. Whenever payment of a Loan to be made or taken
hereunder shall be due on a day which is not a Business Day such payment shall
be due on the next Business Day (except as provided in the definition of
Committed Loan Interest Period with respect to Interest Periods under the LIBOR
Option) and such extension of time shall be included in computing interest and
fees, except that the Loans shall be due on the Business Day preceding the
Expiration Date or the Term Loan Maturity Date if the Expiration Date or the
Term Loan
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Maturity Date is not a Business Day. Whenever any payment or action to be made
or taken hereunder (other than payment of the Loans) shall be stated to be due
on a day which is not a Business Day, such payment or action shall be made or
taken on the next following Business Day, and such extension of time shall not
be included in computing interest or fees, if any, in connection with such
payment or action.
Section 10.05 Funding by Branch, Subsidiary, or Affiliate. (a)
Notional Funding. Each Bank shall have the right from time to time, without
notice to the Borrowers, to deem any branch, Subsidiary, or Affiliate (which for
the purposes of this Section 10.05 shall mean any corporation or association
which is directly or indirectly controlled by or is under direct or indirect
common control with any corporation or association which directly or indirectly
controls such Bank) of such Bank to have made, maintained, or funded any Loan to
which the LIBOR Option applies at any time, provided that immediately following
(on the assumption that a payment was then due from the Borrowers to such other
office), and as a result of such change, the Borrowers will not be under any
greater financial obligation pursuant to Section 4.06 [Additional Compensation
in Certain Circumstances] than they would have been in the absence of such
change. Notional funding offices may be selected by each Bank without regard to
such Bank's actual methods of making, maintaining or funding the Loans or any
sources of funding actually used by or available to such Bank.
(b) Actual Funding. Each Bank shall have the right from time to time
to make or maintain any Loan by arranging for a branch, Subsidiary or Affiliate
of such Bank to make or maintain such Loan subject to the last sentence of this
Section 10.05(b). If any Bank causes a branch, Subsidiary or Affiliate to make
or maintain any part of the Loans hereunder, all terms and conditions of this
Agreement shall, except where the context clearly requires otherwise, be
applicable to such part of the Loans to the same extent as if such Loans were
made or maintained by such Bank, but in no event shall any Bank's use of such a
branch, Subsidiary or Affiliate to make or maintain any part of the Loans
hereunder cause such Bank or such branch, Subsidiary or Affiliate to incur any
cost or expenses payable by any Borrower hereunder or require any Borrower to
pay any other compensation to any Bank (including any expenses incurred or
payable pursuant to Section 4.06 [Additional Compensation in Certain
Circumstances]) which would otherwise not be incurred.
Section 10.06 Notices. Any notice, request, demand, direction, or
other communication (for purposes of this Section 10.06 only, a "Notice") to be
given to or made upon any party hereto under any provision of this Agreement
shall be given or made by telephone or in writing (which includes means of
electronic transmission (i.e., "e-mail") or facsimile transmission in accordance
with this Section 10.06. Any such Notice must be delivered to the applicable
parties hereto at the addresses and numbers set forth under their respective
names on Schedule 1.01(B) hereof or in accordance with any subsequent unrevoked
Notice from any such party that is given in accordance with this Section 10.06.
Any Notice shall be effective:
(A) In the case of hand-delivery, when delivered;
(B) If given by mail, four days after such Notice is deposited with
the United States Postal Service, with first-class postage prepaid, return
receipt requested;
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(C) In the case of a telephonic Notice, when a party is contacted by
telephone, if delivery of such telephonic Notice is confirmed no later than
the next Business Day by hand delivery, a facsimile or electronic
transmission, a Website Posting or overnight courier delivery of a
confirmatory notice (received at or before noon on such next Business Day);
(D) In the case of a facsimile transmission, when sent to the
applicable party's facsimile machine's telephone number if the party
sending such Notice receives confirmation of the delivery thereof from its
own facsimile machine;
(E) In the case of electronic transmission, when actually received;
(F) In the case of a Website Posting, upon delivery of a Notice of
such posting (including the information necessary to access such web site)
by another means set forth in this Section 10.06; and
(G) If given by any other means (including by overnight courier),
when actually received.
Any Bank giving a Notice to any Borrower or any Material Subsidiary shall
concurrently send a copy thereof to the Agent, and the Agent shall promptly
notify the other Banks of its receipt of such Notice.
Section 10.07 Severability. The provisions of this Agreement are
intended to be severable. If any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction, such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 10.08 Governing Law. This Agreement and any other documents
delivered herewith and the rights and obligations of the parties hereto and
thereto shall be for all purposes governed by, and construed and enforced in
accordance with the internal Laws of the State of New York, without giving
effect to its conflicts of law principles.
Section 10.09 Prior Understanding. This Agreement and the other Loan
Documents supersede all prior understandings and agreements, whether written or
oral, between the parties hereto and thereto relating to the transactions
provided for herein and therein, including any prior confidentiality agreements
and commitments.
Section 10.10 Duration; Survival. All representations and warranties
of the Borrowers and the Material Subsidiaries contained herein or made in
connection herewith shall survive the making of Loans and shall not be waived by
the execution and delivery of this Agreement, any investigation by the Agent or
the Banks, the making of Loans, or payment in full of the Loans. All covenants
and agreements of the Borrowers contained in Section 7.01 [Affirmative
Covenants], Section 7.02 [Negative Covenants] and Section 7.03 [Reporting
Requirements], and all comparable covenants and agreements contained in or
incorporated into the Guarantor Joinder given by each Material Subsidiary
pursuant to Section 10.18, shall
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continue in full force and effect from and after the date hereof so long as the
Borrowers may borrow hereunder and until termination of the Commitments and
payment in full of the Loans. All covenants and agreements of the Borrowers
contained herein relating to the payment of principal, interest, premiums,
additional compensation or expenses and indemnification, including those set
forth in ARTICLE IV [Payments] and Section 9.05 [Reimbursement of Agent by
Borrowers, Etc.], Section 9.07 [Reimbursement of Agent by Banks, Etc.] and
Section 10.03 [Reimbursement of Banks by Borrowers; Etc.], and all comparable
covenants and agreements contained in or incorporated into the Guarantor Joinder
given by each Material Subsidiary pursuant to Section 10.18, shall survive
payment in full of the Loans and termination of the Commitments.
Section 10.11 Successors and Assigns. (a) This Agreement shall be
binding upon and shall inure to the benefit of the Banks, the Agent, the
Borrowers and the Material Subsidiaries, and their respective successors and
assigns, except that no Borrowers or any Material Subsidiary may assign or
transfer any of its rights or Obligations or any interest herein or in any other
Loan Document, except as may be permitted by the terms hereof. Each Bank may, at
its own cost, make assignments of or sell participations in all or any part of
its Revolving Credit Commitments and the Loans made by it to one or more banks
or other entities, subject to the consent of the Borrowers and the Agent with
respect to any assignee, such consent not to be unreasonably withheld, provided
that (1) no consent of the Borrowers shall be required (A) if an Event of
Default exists and is continuing, or (B) in the case of an assignment by a Bank
to an Affiliate of such Bank, (2) any assignment by a Bank to a Person other
than an Affiliate of such Bank may not be made in amounts less than the lesser
of $5,000,000 or the amount of the assigning Bank's Commitment, (3) a Bank may
assign an interest or sell a participation in less than 100% of its Commitments,
Committed Loans, or Bid Loans, provided that such Bank sells an equal percentage
interest or participation in each of its Revolving Credit Commitment and
Revolving Credit Loans and Term Loans, and (4) a Bank may assign a Bid Loan to
another Person without assigning any portion of its Commitment to such Person.
In the case of an assignment, upon receipt by the Agent of the Assignment and
Assumption Agreement, the assignee shall have, to the extent of such assignment
(unless otherwise provided therein), the same rights, benefits and obligations
as it would have if it had been a signatory Bank hereunder, the Commitments
shall be adjusted accordingly, and upon surrender of any Revolving Credit/Term
Loan Note subject to such assignment, the applicable Borrower shall execute and
deliver a new Revolving Credit/Term Loan Note to the assignee, if such assignee
requests such a Note in an amount equal to the amount of the Revolving Credit
Commitment assumed by it and a new Revolving Credit/Term Loan Note to the
assigning Bank, if the assigning Bank requests such a Note with respect to the
Commitment it has retained. The assigning Bank shall surrender its Bid Note and
the respective Borrower shall execute and deliver to the assignee (and to the
assignor if the assignor is assigning less than all of its Revolving Credit
Commitments and Bid Loans) a new Bid Note in the form of Exhibit 1.01(B) as
appropriate. Any Bank which assigns any or all of its Commitment or Loans to a
Person other than an Affiliate of such Bank shall pay to the Agent a service fee
in the amount of $3,500 for each assignment. In the case of a participation, the
participant shall only have the rights specified in Section 8.02 [Set-off] (the
participant's rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto and not to include any voting rights except with
respect to changes of the type referenced in Section 10.01(a) [Increase of
Commitment, Etc.], Section 10.01(b) [Extension of Payment, Etc.], or Section
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10.01(c) [Release of Collateral or Guarantor]), all of such Bank's obligations
under this Agreement or any other Loan Document shall remain unchanged, and all
amounts payable by any Borrower or any Material Subsidiary hereunder or
thereunder shall be determined as if such Bank had not sold such participation.
(b) Any assignee or participant which is not incorporated under the
Laws of the United States of America or a state thereof shall deliver to the
Borrowers and the Agent the form of certificate described in Section 10.17 [Tax
Withholding Clause] relating to federal income tax withholding. Each Bank may
furnish any publicly available information concerning the Borrowers or its
Subsidiaries and any other information concerning the Borrowers or its
Subsidiaries in the possession of such Bank from time to time to assignees and
participants (including prospective assignees or participants), provided that
such assignees and participants agree to be bound by the provisions of Section
10.12 [Confidentiality].
(c) Notwithstanding any other provision in this Agreement, any Bank
may at any time pledge or grant a security interest in all or any portion of its
rights under this Agreement, its Note (if any) and the other Loan Documents to
any Federal Reserve Bank without notice to or consent of the Borrowers or the
Agent. No such pledge or grant of a security interest shall release the
transferor Bank of its obligations hereunder or under any other Loan Document.
Section 10.12 Confidentiality. (a) General. The Agent and the Banks
each agree to keep confidential all information obtained from the Borrowers or
their Subsidiaries which is nonpublic and confidential or proprietary in nature
(including any information the Borrowers specifically designate as
confidential), except as provided below, and to use such information only in
connection with their respective capacities under this Agreement and for the
purposes contemplated hereby. The Agent and the Banks shall be permitted to
disclose such information (i) to outside legal counsel, accountants and other
professional advisors who need to know such information in connection with the
administration and enforcement of this Agreement, subject to agreement of such
Persons to maintain the confidentiality of such information as provided herein,
(ii) to assignees and participants as contemplated by Section 10.11, and
prospective assignees and participants, provided that Agent exercises its best
efforts to obtain the agreement of such prospective assignees and participants
to be bound by the confidentiality provisions hereof, (iii) to the extent
requested by any bank regulatory authority or, with notice to the Borrowers, as
otherwise required by applicable Law or by any subpoena or similar legal
process, or in connection with any investigation or proceeding arising out of
the transactions contemplated by this Agreement, (iv) if it becomes publicly
available other than as a result of a breach of this Agreement or becomes
available from a source not known to be subject to confidentiality restrictions,
or (v) if the Borrowers shall have consented to such disclosure.
(b) Sharing Information With Affiliates of the Banks. The Borrowers
acknowledge that from time to time financial advisory, investment banking, and
other services may be offered or provided to the Borrowers or one or more of
their Affiliates (in connection with this Agreement or otherwise) by any Bank or
by one or more Subsidiaries or Affiliates of such Bank and the Borrowers hereby
authorize each Bank to share any information delivered to such Bank by the
Borrowers or any of their Subsidiaries pursuant to this Agreement, or in
connection with the decision of such Bank to enter into this Agreement, to any
such Subsidiary or Affiliate of such Bank, it being understood that any such
Subsidiary or Affiliate of any Bank
-69-
receiving such information shall be bound by the provisions of Section 10.12 as
if it were a Bank hereunder. Such authorization shall survive the repayment of
the Loans and other Obligations and the termination of the Commitments.
(c) Disclosures of Tax Treatment. Notwithstanding anything herein or
in any of the other Loan Documents to the contrary, the Company, the UK
Borrower, the Agent and each Bank (and each employee, representative or other
agent of any such Person) may disclose to any and all Persons, without
limitation of any kind, the tax treatment and tax structure of the transactions
contemplated hereby and all materials of any kind (including opinions or other
tax analyses) that are provided to such Person relating to such tax treatment
and tax structure. For purposes of this authorization, "tax treatment" means the
purported or claimed U.S. federal income tax treatment of the transaction, and
"tax structure" means any fact that may be relevant to understanding the
purported or claimed U.S. federal income tax treatment of the transaction. The
authorization to disclose the tax treatment and tax structure of the
transactions contemplated hereby contained in the preceding sentence was
applicable immediately upon commencement of discussions between the Company, the
UK Borrower and the Agent with respect to the transactions contemplated hereby.
Notwithstanding the foregoing, however, the Company, the UK Borrower, the Agent
and each Bank each hereby acknowledges that, to the best of its knowledge, no
other party to this Agreement has made or provided a "tax statement" (as such
term is defined in Treasury Regulation section 301.6112-1(c)(2)(iii)) regarding
this Agreement or the transactions contemplated hereby to, or for the benefit
of, the Company, the UK Borrower, the Agent or such Bank, as the case may be, or
any Person affiliated with the Company, the UK Borrower, the Agent or such Bank,
as the case may be.
Section 10.13 Counterparts. This Agreement may be executed by
different parties hereto on any number of separate counterparts, each of which,
when so executed and delivered, shall be an original, and all such counterparts
shall together constitute one and the same instrument.
Section 10.14 Agent's or Bank's Consent. Whenever the Agent's or any
Bank's consent is required to be obtained under this Agreement or any of the
other Loan Documents as a condition to any action, inaction, condition or event,
the Agent and each Bank shall be authorized to give or withhold such consent in
its sole and absolute discretion and to condition its consent upon the giving of
additional collateral, the payment of money or any other matter.
Section 10.15 Exceptions. The representations, warranties and
covenants contained herein shall be independent of each other, and no exception
to any representation, warranty or covenant shall be deemed to be an exception
to any other representation, warranty or covenant contained herein unless
expressly provided, nor shall any such exceptions be deemed to permit any action
or omission that would be in contravention of applicable Law.
Section 10.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL. EACH OF THE
BORROWERS HEREBY IRREVOCABLY CONSENTS 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 WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT. THE
COMPANY CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED
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OR REGISTERED MAIL DIRECTED TO THE COMPANY AT THE ADDRESS PROVIDED FOR IN
SECTION 10.06 AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL
RECEIPT THEREOF. THE UK BORROWER CONSENTS THAT ALL SERVICE OF PROCESS MAY BE
MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO THE COMPANY AT THE ADDRESS
PROVIDED IN SECTION 10.06 (AND THE UK BORROWER HEREBY IRREVOCABLY APPOINTS THE
COMPANY AS ITS AGENT TO RECEIVE SUCH SERVICE OF PROCESS), AND SERVICE SO MADE
SHALL BE COMPLETED UPON ACTUAL RECEIPT THEREOF. EACH OF THE BORROWERS WAIVES ANY
OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS
PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE.
EACH BORROWER, THE AGENT, AND EACH OF THE BANKS HEREBY WAIVES TRIAL BY
JURY IN ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM OF ANY KIND ARISING OUT OF
OR RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY COLLATERAL TO THE
FULL EXTENT PERMITTED BY LAW.
Section 10.17 Tax Withholding Clause. Each Bank or assignee or
participant of a Bank that is not incorporated under the Laws of the United
States of America or a state thereof (and, upon the written request of the
Agent, each other Bank or assignee or participant of a Bank) agrees that it will
deliver to each of the Borrowers and the Agent two (2) duly completed
appropriate valid Withholding Certificates (as defined under Section 1.1441-1(c)
(16) of the Income Tax Regulations (the "Regulations")) certifying its status
(i.e., U.S. or foreign person) and, if appropriate, making a claim of reduced,
or exemption from, U.S. withholding tax on the basis of an income tax treaty or
an exemption provided by the Internal Revenue Code. The term "Withholding
Certificate" means a Form W-9; a Form W-8BEN; a Form W-8ECI; a Form W-8IMY and
the related statements and certifications as required under Section 1.1441-1(e)
(2) and/or (3) of the Regulations; a statement described in Section
1.871-14(c)(2)(v) of the Regulations; or any other certificates under the
Internal Revenue Code or Regulations that certify or establish the status of a
payee or beneficial owner as a U.S. or foreign person. Each Bank, assignee or
participant required to deliver to the Borrowers and the Agent a Withholding
Certificate pursuant to the preceding sentence shall deliver such valid
Withholding Certificate as follows: (A) each Bank which is a party hereto on the
Closing Date shall deliver such valid Withholding Certificate at least five (5)
Business Days prior to the first date on which any interest or fees are payable
by the Borrowers hereunder for the account of such Bank; (B) each assignee or
participant shall deliver such valid Withholding Certificate at least five (5)
Business Days before the effective date of such assignment or participation
(unless the Agent in its sole discretion shall permit such assignee or
participant to deliver such valid Withholding Certificate less than five (5)
Business Days before such date in which case it shall be due on the date
specified by the Agent). Each Bank, assignee or participant which so delivers a
valid Withholding Certificate further undertakes to deliver to each of the
Borrowers and the Agent two (2) additional copies of such Withholding
Certificate (or a successor form) on or before the date that such Withholding
Certificate expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent Withholding Certificate so delivered by
it, and such amendments thereto or extensions or renewals thereof as may be
reasonably requested by the Borrowers or the Agent. Notwithstanding the
submission of a Withholding Certificate claiming a reduced rate of or
-71-
exemption from U.S. withholding tax, the Agent shall be entitled to withhold
United States federal income taxes at the full 30% withholding rate if in its
reasonable judgment it is required to do so under the due diligence requirements
imposed upon a withholding agent under Section 1.1441-7(b) of the Regulations.
Further, the Agent is indemnified under Section 1.1461-1(e) of the Regulations
against any claims and demands of any Bank or assignee or participant of a Bank
for the amount of any tax it deducts and withholds in accordance with
regulations under Section 1441 of the Internal Revenue Code.
Section 10.18 Joinder of Guarantors. Any Material Subsidiary of the
Company which is required to be a Guarantor pursuant to Section 7.02(i)
[Subsidiaries, Partnerships and Joint Ventures] shall execute and deliver to the
Agent (i) a Guarantor Joinder in substantially the form attached hereto as
Exhibit 1.01(G)(1) pursuant to which it shall join as a Guarantor each of the
documents to which the Guarantors are parties; and (ii) documents in the forms
described in Section 6.01 [First Loans] modified as appropriate to relate to
such Subsidiary. The Company shall deliver such Guarantor Joinder and related
documents to the Agent within five (5) Business Days after, as the case may be,
the date of the acquisition of such Subsidiary, the date upon which a Subsidiary
meets the criteria for a Material Subsidiary as set forth in the definition
thereof in Section 1.01, or the date the filing of such Subsidiary's certificate
or articles of incorporation if the Subsidiary is a corporation, the date of the
filing of its certificate of limited partnership if it is a limited partnership
or the date of its organization if it is an entity other than a limited
partnership or corporation.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Agreement as of the day and year first above
written.
ACE GUARANTY CORP.
By:
-------------------------------------
Name:
Title:
ACE GUARANTY (UK) LTD.
By:
-------------------------------------
Name:
Title:
ABN AMRO BANK N.V.
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
FLEET NATIONAL BANK
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
CITIBANK, N.A.
By:
-------------------------------------
Name:
Title:
NORDDEUTSCHE LANDESBANK GIROZENTRALE
NEW YORK BRANCH AND/OR CAYMAN ISLANDS
BRANCH
By:
-------------------------------------
Name:
Title:
WESTLB AG (f/k/a WESTDEUTSCHE LANDESBANK
GIROZENTRALE), NEW YORK BRANCH
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
BANK OF AMERICA N.A.
By:
-------------------------------------
Name:
Title:
THE BANK OF NEW YORK
By:
-------------------------------------
Name:
Title:
SCHEDULE 1.01(B)
----------------
Part 2 - Addresses for Notices to Borrower and Guarantors:
---------------------------------------------------------
AGENT
-----
Notices related to commitments, covenants or extensions of expiry/termination
dates:
ABN AMRO Bank N.V.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Agency Services
E-Mail: ▇▇▇▇▇▇▇▇▇.▇'▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
ABN AMRO Bank N.V.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Credit Administration
E-Mail: ▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
ABN AMRO Bank N.V.
▇▇ ▇▇▇▇ ▇▇/▇▇/ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
E-Mail: ▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Notices related to Loans, Interest and Fees and all required Financial
Information:
ABN AMRO Bank N.V.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Agency Services
E-Mail: ▇▇▇▇▇▇▇▇▇.▇'▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
BORROWERS
---------
Name: ACE Guaranty Corp.
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
SCHEDULE 1.01(B)
----------------
Page 2
Name: ACE Guaranty (UK) Ltd.
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
With a mandatory copy to:
Name: ACE Guaranty Corp.
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
