[Conformed Copy]
$250,000,000
AMENDED AND RESTATED FIVE-YEAR
CREDIT AGREEMENT
Dated as of May 8, 2000
Among
ACE LIMITED
ACE BERMUDA INSURANCE LTD.
TEMPEST REINSURANCE COMPANY LIMITED
ACE INA HOLDINGS INC.
ACE FINANCIAL SERVICES, INC.
as Borrowers
and
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders
and
MELLON BANK, N.A.
as Issuing Bank
and
BANK OF AMERICA, N.A.
THE CHASE MANHATTAN BANK
Co- Syndication Agents
and
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK
as Administrative Agent
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
Lead Arranger
Table of Cntents
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms..........................................1
SECTION 1.02. Computation of Time Periods; Other Definitional Provisions....20
SECTION 1.03. Accounting Terms and Determinations...........................20
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Committed Advances and the Letters of Credit..............20
SECTION 2.02. Making the Committed Advances.................................21
SECTION 2.03. The Competitive Bid Advances..................................23
SECTION 2.04. Issuance and Renewals and Drawings, Participations and
Reimbursement with Respect to Letters of Credit..............27
SECTION 2.05. Repayment of Advances.........................................30
SECTION 2.06. Termination or Reduction of the WC Commitments................31
SECTION 2.07. Prepayments...................................................31
SECTION 2.08. Interest......................................................32
SECTION 2.09. Fees..........................................................33
SECTION 2.10. Conversion of Advances........................................33
SECTION 2.11. Increased Costs, Etc..........................................34
SECTION 2.12. Payments and Computations.....................................36
SECTION 2.13. Taxes.........................................................37
SECTION 2.14. Sharing of Payments, Etc......................................39
SECTION 2.15. Use of Proceeds...............................................40
SECTION 2.16. Defaulting Lenders............................................40
SECTION 2.17. Replacement of Affected Lender................................43
SECTION 2.18. Certain Provisions Relating to the Issuing Bank and Letters
of Credit....................................................43
SECTION 2.19. Downgrade Event with Respect to a Lender......................45
SECTION 2.20. Downgrade Event or Other Event with Respect to the
Issuing Bank................................................47
SECTION 2.21. Non-Dollar Letters of Credit..................................47
ii
Page
----
ARTICLE III
CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01. Conditions Precedent to Effectiveness.........................49
SECTION 3.02. Conditions Precedent to Each Committed Borrowing and Issuance,
Extension or Increase of a Letter of Credit.................52
SECTION 3.03. Conditions Precedent to Each Competitive Bid Borrowing........53
SECTION 3.04. Conditions Precedent for ACE Financial........................53
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrowers...............53
ARTICLE V
COVENANTS OF THE BORROWERS
SECTION 5.01. Affirmative Covenants.........................................58
SECTION 5.02. Negative Covenants.......................................... .60
SECTION 5.03. Reporting Requirements........................................63
SECTION 5.04. Financial Covenants...........................................66
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default.............................................66
SECTION 6.02. Actions in Respect of the Letters of Credit upon Default......69
ARTICLE VII
THE GUARANTY
SECTION 7.01. The Guaranty..................................................69
SECTION 7.02. Guaranty Unconditional........................................70
SECTION 7.03. Discharge Only upon Payment in Full; Reinstatement in Certain
Circumstances...............................................71
SECTION 7.04. Waiver by the Guarantors......................................71
iii
Page
SECTION 7.05. Subrogation...................................................71
SECTION 7.06. Stay of Acceleration..........................................72
SECTION 7.07. Continuing Guaranty; Assignments..............................72
ARTICLE VIII
THE AGENTS
SECTION 8.01. Authorization and Action......................................72
SECTION 8.02. Agents' Reliance, Etc.........................................72
SECTION 8.03. MGT and Affiliates............................................73
SECTION 8.04. Lender Credit Decision........................................73
SECTION 8.05. Indemnification...............................................73
SECTION 8.06. Successor Agents..............................................74
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc...............................................75
SECTION 9.02. Notices, Etc..................................................75
SECTION 9.03. No Waiver; Remedies...........................................76
SECTION 9.04. Costs and Expenses............................................76
SECTION 9.05. Right of Set-off..............................................77
SECTION 9.06. Successors; Participations and Assignments....................78
SECTION 9.07. Designated Lenders............................................79
SECTION 9.08. Execution in Counterparts.....................................80
SECTION 9.09. No Liability of the Issuing Bank..............................80
SECTION 9.10. Confidentiality...............................................81
SECTION 9.11. Jurisdiction, Etc.............................................81
SECTION 9.12. Governing Law.................................................81
SECTION 9.13. Waiver of Jury Trial..........................................82
SECTION 9.14. Nature of Borrowers' Obligations..............................82
SCHEDULES
Pricing Schedule
Commitment Schedule
Schedule 4.01(b) - Subsidiaries
Schedule 5.02(a) - Liens
iv
EXHIBITS
Exhibit A-1 - Form of Committed Note
Exhibit A-2 - Form of Competitive Bid Note
Exhibit B-1 - Form of Notice of Committed Borrowing
Exhibit B-2 - Form of Notice of Competitive Bid Borrowing
Exhibit C - Form of Assignment and Assumption Agreement
Exhibit D-1 - Form of Opinion of Cayman Islands Counsel to the Parent
Exhibit D-2 - Form of Opinion of New York Counsel to the Loan Parties
Exhibit D-3 - Form of Opinion of Bermuda Counsel to the Ace Bermuda and
Tempest
Exhibit E - Form of Designation Agreement
AMENDED AND RESTATED FIVE-YEAR
CREDIT AGREEMENT
AMENDED AND RESTATED FIVE-YEAR CREDIT AGREEMENT dated as
of May 8, 2000 among ACE Limited, a Cayman Islands company (the "Parent"),
ACE Bermuda Insurance Ltd. ( "ACE Bermuda"), Tempest Reinsurance Company
Limited ("Tempest"), ACE INA Holdings Inc. ("ACE INA") and ACE Financial
Services, Inc. ("ACE Financial") (Ace Bermuda, Tempest, ACE INA and ACE
Financial, together with the Parent, the "Borrowers"), the banks, financial
institutions and other institutional lenders listed on the signature pages
hereof as the Initial Lenders (the "Initial Lenders"), Mellon Bank, N.A. as
issuing bank (the "Issuing Bank"), Bank of America, N.A. and The Chase
Manhattan Bank, as co-syndication agents (together with any successor
co-syndication agents appointed pursuant to Article VIII, the
"Co-Syndication Agents"), and ▇▇▇▇▇▇ Guaranty Trust Company of New York
("MGT"), as administrative agent (together with any successor
administrative agent appointed pursuant to Article VIII, the
"Administrative Agent" and, together with the Co-Syndication Agents, the
"Agents") for the Lenders (as hereinafter defined).
PRELIMINARY STATEMENTS:
Certain of the parties hereto have heretofore entered
into a Credit Agreement dated as of June 11, 1999 pursuant to which the
Lenders (as defined therein) have made available to the Borrowers (as
defined therein) a credit facility in an amount up to $250,000,000 (as
heretofore amended, the "Existing Agreement"). The parties hereto desire to
extend such credit facility for an additional year, to make the other
changes reflected in this Amended Agreement and to amend and restate the
Existing Agreement to read in its entirety as set forth in this Amended
Agreement.
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants and agreements contained herein, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"Account Party" with respect to any outstanding or
proposed Letter of Credit means the Borrower for the account of
which such Letter of Credit was or is proposed to be issued.
"ACE Bermuda" has the meaning specified in the recital of
parties to this Amended Agreement.
2
"ACE Financial" has the meaning specified in the recital
of parties to this Amended Agreement.
"ACE INA" has the meaning specified in the recital of
parties to this Amended Agreement.
"Adjusted Consolidated Debt" means, at any time, an
amount equal to (i) the then outstanding Consolidated Debt of the
Parent and its Subsidiaries plus (ii) to the extent exceeding an
amount equal to 15% of Total Capitalization, the then issued and
outstanding amount of Preferred Securities (other than any
Mandatorily Convertible Securities).
"Administrative Agent" has the meaning specified in the
recital of parties to this Amended Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with
▇▇▇▇▇▇ Guaranty Trust Company of New York, at its office at ▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Account No. 999 99 090,
Attention: ▇▇▇▇ ▇▇▇▇, or such other account as the Administrative
Agent shall specify in writing to the Lenders.
"Administrative Questionnaire" means, with respect to
each Lender, an administrative questionnaire in the form prepared
by the Administrative Agent, completed by such Lender and returned
to the Administrative Agent (with a copy to the Borrowers).
"Advance" means a Committed Advance, a Competitive Bid
Advance or a Letter of Credit Advance.
"Affected Lender" means any Lender that (i) has made, or
notified any Borrower that an event or circumstance has occurred
which may give rise to, a demand for compensation under Section
2.11(a) or (b) or Section 2.13 (but only so long as the event or
circumstance giving rise to such demand or notice is continuing),
(ii) has notified any Borrower (which notice has not been
withdrawn) of any event or circumstance of a type described in
Section 2.11(c) or (d) or (iii) is a Downgraded Lender.
"Affiliate" means, as to any Person, any other Person
that, directly or indirectly, controls, is controlled by or is
under common control with such Person or is a director or officer
of such Person. For purposes of this definition, the term
"control" (including the terms "controlling", "controlled by" and
"under common control with") of a Person means the possession,
direct or indirect, of the power to vote 5% or more of the Voting
Interests of such Person or to direct or cause the direction of
the management and policies of such Person, whether through the
ownership of Voting Interests, by contract or otherwise.
"Agents" has the meaning specified in the recital of
parties to this Amended Agreement.
3
"Agreement" means the Existing Agreement, as amended by
this Amended Agreement and as the same may be further amended from
time to time.
"Agreement Currency" has the meaning specified in Section
2.21(g).
"Amended Agreement" means this Amended and Restated
Five-Year Credit Agreement dated as of May 8, 2000.
"Applicable Facility Fee Percentage" means, as of any
date, a percentage per annum determined by reference to the
Pricing Schedule.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance and such Lender's Eurodollar Lending Office in
the case of a Eurodollar Rate Advance and, in the case of a
Competitive Bid Advance, the office of such Lender notified by
such Lender to the Administrative Agent as its Applicable Lending
Office with respect to such Competitive Bid Advance.
"Applicable Margin" means, as of any date, a percentage
per annum determined by reference to the Pricing Schedule.
"Approved Investment" means any Investment that was made
by the Parent or any of its Subsidiaries pursuant to investment
guidelines set forth by the board of directors of the Parent which
are consistent with past practices.
"Assignee" has the meaning specified in Section 9.06(c).
"Available Amount" of any Letter of Credit means, at any
time, the maximum amount available to be drawn under such Letter
of Credit at such time or at any future time (assuming compliance
at such time or such future time with all conditions to drawing).
"Bankruptcy Law" means any proceeding of the type
referred to in Section 6.01(f) or Title 11, U.S. Code, or any
similar foreign, federal or state law for the relief of debtors.
"Base Rate" means a fluctuating interest rate per annum
in effect from time to time, which rate per annum shall at all
times be equal to the higher of:
(a) the rate of interest announced publicly by
MGT in New York, New York, from time to time, as MGT's
prime rate; and
(b) 1/2 of 1% per annum above the Federal Funds
Rate.
"Base Rate Advance" means an Advance that bears interest
as provided in Section 2.08(a)(i).
4
"Borrowers" has the meaning specified in the recital of
parties to this Amended Agreement.
"Borrowers' Account" means the account of one or more
Borrowers maintained by such Borrower(s) with The Bank of Bermuda
Limited at its office at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇
Account No.▇▇▇▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, or such other
account as the Parent shall specify in writing to the
Administrative Agent or such other account as the Borrowers (or
any one of them) shall specify in writing to the Administrative
Agent.
"Borrowing" means a Committed Borrowing or a Competitive Bid
Borrowing.
"Business Day" means a day of the year on which banks are
not required or authorized by law to close in New York City and,
if the applicable Business Day relates to any Eurodollar Rate
Advances or LIBO Rate Advances, on which dealings are carried on
in the London interbank market.
"Capitalized Leases" means all leases that have been or
should be, in accordance with GAAP, recorded as capitalized
leases.
"Change of Control" means the occurrence of any of the
following: (a) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934), directly or indirectly, of
Voting Interests of the Parent (or other securities convertible
into such Voting Interests) representing 30% or more of the
combined voting power of all Voting Interests of the Parent; or
(b) a majority of the board of directors of the Parent shall not
be Continuing Members; or (c) any Person or two or more Persons
acting in concert shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that results in
its or their acquisition of the power to exercise, directly or
indirectly, a controlling influence over the management or
policies of the Parent.
"Commitment" means a WC Commitment or the Letter of Credit
Commitment.
"Commitment Schedule" means the Schedule hereto denominated as
such.
"Committed Advance" has the meaning specified in Section
2.01(a).
"Committed Borrowing" means a borrowing consisting of
simultaneous Committed Advances of the same Type made by the
Lenders to the same Borrower.
"Committed Facility" means, at any time, the aggregate
amount of the Lenders' WC Commitments at such time.
"Committed Note" means a promissory note of any Borrower
payable to the order of any Lender, in substantially the form of
Exhibit A-1 hereto, evidencing the aggregate
5
indebtedness of such Borrower to such Lender resulting from the
Committed Advances made by such Lender, as amended.
"Competitive Bid Advance" means an advance by a Lender to
any Borrower as part of a Competitive Bid Borrowing resulting from
the competitive bidding procedure described in Section 2.03 and
refers to a Fixed Rate Advance or a LIBO Rate Advance.
"Competitive Bid Borrowing" means a borrowing consisting
of simultaneous Competitive Bid Advances from each of the Lenders
whose offer to make one or more Competitive Bid Advances as part
of such borrowing has been accepted under the competitive bidding
procedure described in Section 2.03.
"Competitive Bid Note" means a promissory note of any
Borrower payable to the order of any Lender, in substantially the
form of Exhibit A-2 hereto, evidencing the indebtedness of such
Borrower to such Lender resulting from Competitive Bid Advances
made by such Lender.
"Confidential Information" means information that any
Loan Party furnishes to any Agent or any Lender, but does not
include any such information that is or becomes generally
available to the public other than as a result of a breach by such
Agent or any Lender of its obligations hereunder or that is or
becomes available to such Agent or such Lender from a source other
than the Loan Parties that is not, to the best of such Agent's or
such Lender's knowledge, acting in violation of a confidentiality
agreement with a Loan Party.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Consolidated Net Income" means, for any period, the net
income of the Parent and its Consolidated Subsidiaries, determined
on a Consolidated basis for such period.
"Consolidated Net Worth" means at any date the
Consolidated stockholders' equity of the Parent and its
Consolidated Subsidiaries determined as of such date, provided
that such determination for purposes of Section 5.04 shall be made
without giving effect to adjustments pursuant to Statement No. 115
of the Financial Accounting Standards Board of the United States
of America.
"Contingent Obligation" means, with respect to any
Person, any obligation or arrangement of such Person to guarantee
or intended to guarantee any Debt, leases, dividends or other
payment obligations ("primary obligations") of any other Person
(the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, (a) the direct or
indirect guarantee, endorsement (other than for collection or
deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of
the obligation of a primary obligor, (b) the obligation to make
take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement or
(c) any obligation of such Person, whether or not contingent, (i)
to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance
or supply funds (A) for the purchase or
6
payment of any such primary obligation or (B) to maintain working
capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii)
to purchase property, assets, securities or services primarily for
the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless
the holder of such primary obligation against loss in respect
thereof; provided, however, that Contingent Obligations shall not
include any obligations of any such Person arising under insurance
contracts entered into in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made
(or, if less, the maximum amount of such primary obligation for
which such Person may be liable pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not
stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to
perform thereunder), as determined by such Person in good faith.
"Continuing Member" means a member of the Board of
Directors of the Parent who either (i) was a member of the
Parent's Board of Directors on the date of execution and delivery
of this Agreement by the Parent and has been such continuously
thereafter or (ii) became a member of such Board of Directors
after such date and whose election or nomination for election was
approved by a vote of the majority of the Continuing Members then
members of the Parent's Board of Directors.
"Conversion", "Convert" and "Converted" each refer to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.10 or 2.11.
"Co-Syndication Agents" has the meaning specified in the
recital of parties to this Amended Agreement.
"Debenture" means debt securities issued by ACE INA or
the Parent to a Special Purpose Trust in exchange for proceeds of
Preferred Securities and common securities of such Special Purpose
Trust.
"Debt" of any Person means, without duplication for
purposes of calculating financial ratios, (a) all indebtedness of
such Person for borrowed money, (b) all obligations of such Person
for the deferred purchase price of property or services (other
than trade payables incurred in the ordinary course of such
Person's business), (c) all obligations of such Person evidenced
by notes, bonds, debentures or other similar instruments, (d) all
obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect
to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such property),
(e) all obligations of such Person as lessee under Capitalized
Leases (excluding imputed interest), (f) all obligations of such
Person under acceptance, letter of credit or similar facilities,
(g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any Equity
Interests (except for obligations to pay for Equity Interests
within customary settlement periods) in such Person or any other
Person or any
7
warrants, rights or options to acquire such capital stock
(excluding payments under a contract for the forward sale of
ordinary shares of such Person issued in a public offering),
valued, in the case of Redeemable Preferred Interests, at the
greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends, (h) all Contingent Obligations
of such Person in respect of Debt (of the types described above)
of any other Person and (i) all indebtedness and other payment
obligations referred to in clauses (a) through (h) above of
another Person secured by (or for which the holder of such Debt
has an existing right, contingent or otherwise, to be secured by)
any Lien on property (including, without limitation, accounts and
contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such indebtedness
or other payment obligations; provided, however, that the amount
of Debt of such Person under clause (i) above shall, if such
Person has not assumed or otherwise become liable for any such
Debt, be limited to the lesser of the principal amount of such
Debt or the fair market value of all property of such Person
securing such Debt; provided further that "Debt" shall not include
obligations in respect of insurance or reinsurance contracts
entered into in the ordinary course of business; provided further
that, solely for purposes of Section 5.04 and the definitions of
"Adjusted Consolidated Debt" and "Total Capitalization", "Debt"
shall not include (x) any contingent obligations of any Person
under or in connection with acceptance, letter of credit or
similar facilities or (y) obligations of the Parent or ACE INA
under any Debentures or under any subordinated guaranty of any
Preferred Securities or obligations of a Special Purpose Trust
under any Preferred Securities.
"Default" means any Event of Default or any event that
would constitute an Event of Default but for the requirement that
notice be given or time elapse or both.
"Defaulted Advance" means, with respect to any Lender at
any time, the portion of any Advance required to be made by such
Lender to any Borrower pursuant to Section 2.01 or 2.02 at or
prior to such time that has not been made by such Lender or by the
Administrative Agent for the account of such Lender pursuant to
Section 2.02(d) as of such time.
"Defaulted Amount" means, with respect to any Lender at
any time, any amount required to be paid by such Lender to any
Agent or any other Lender hereunder or under any other Loan
Document at or prior to such time that has not been so paid as of
such time, including, without limitation, any amount required to
be paid by such Lender to (a) the Administrative Agent pursuant to
Section 2.02(d) to reimburse the Administrative Agent for the
amount of any Committed Advance made by the Administrative Agent
for the account of such Lender, (b) the Issuing Bank pursuant to
Section 2.04(c) to purchase a portion of a Letter of Credit
Advance made by the Issuing Bank, (c) any other Lender pursuant to
Section 2.14 to purchase any participation in Committed Advances
owing to such other Lender and (d) any Agent or the Issuing Bank
pursuant to Section 8.05 to reimburse such Agent or the Issuing
Bank for such Lender's ratable share of any amount required to be
paid by the Lenders to such Agent or the Issuing Bank as provided
therein.
8
"Defaulting Lender" means, at any time, any Lender that,
at such time, (a) owes a Defaulted Advance or a Defaulted Amount
or (b) shall take any action or be the subject of any action or
proceeding of a type described in Section 6.01(f).
"Designated Lender" means, with respect to any
Designating Lender, an Eligible Designee designated by it pursuant
to Section 9.07(a) as a Designated Lender for purposes of this
Agreement.
"Designating Lender" means, with respect to each
Designated Lender, the Lender that designated such Designated
Lender pursuant to Section 9.07(a).
"Dollar Equivalent" has the meaning specified in Section
2.21(h).
"Domestic Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Domestic
Lending Office" in its Administrative Questionnaire or such other
office of such Lender as such Lender may from time to time specify
to any Borrower and the Administrative Agent.
"Downgrade Account" has the meaning specified in Section
2.19(a).
"Downgrade Event" means, with respect to any Lender, a
reduction of the credit rating for the senior unsecured
unsupported long-term debt of such Lender by S&P or Moody's.
"Downgraded Lender" means any Lender which has a credit
rating of less than A- (in the case of S&P) or A3 (in the case of
Moody's) for its senior unsecured unsupported long-term debt or
which does not have any credit rating on such debt from one of S&P
or Moody's.
"Downgrade Notice" has the meaning specified in Section
2.19(a).
"Effective Date" means the first date on which the
conditions set forth in Article III shall have been satisfied.
"Eligible Designee" means a special purpose entity that
(i) is organized under the laws of the United States or any state
thereof, (ii) is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its
business and (iii) issues (or the parent of which issues)
commercial paper rated at least A-1 or the equivalent thereof by
S&P or at least P-1 or the equivalent thereof by Moody's.
"Environmental Action" means any action, suit, demand,
demand letter, claim, notice of non-compliance or violation,
notice of liability or potential liability, investigation,
proceeding, consent order or consent agreement relating in any way
to any Environmental Law, any Environmental Permit or Hazardous
Material or arising from alleged injury or threat to health,
safety or the environment, including, without limitation, (a) by
any governmental or regulatory authority for enforcement, cleanup,
removal, response, remedial or other actions or damages and (b) by
any governmental or
9
regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any Federal, state, local or
foreign statute, law, ordinance, rule, regulation, code, order,
writ, judgment, injunction, decree or judicial or agency
interpretation, policy or guidance relating to pollution or
protection of the environment, health, safety or natural
resources, including, without limitation, those relating to the
use, handling, transportation, treatment, storage, disposal,
release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required
under any Environmental Law.
"Equity Interests" means, with respect to any Person,
shares of capital stock of (or other ownership or profit interests
in) such Person, warrants, options or other rights for the
purchase or other acquisition from such Person of shares of
capital stock of (or other ownership or profit interests in) such
Person, securities convertible into or exchangeable for shares of
capital stock of (or other ownership or profit interests in) such
Person or warrants, rights or options for the purchase or other
acquisition from such Person of such shares (or such other
interests), and other ownership or profit interests in such Person
(including, without limitation, partnership, member or trust
interests therein), whether voting or nonvoting, and whether or
not such shares, warrants, options, rights or other interests are
authorized or otherwise existing on any date of determination.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"ERISA Affiliate" means any Person that for purposes of
Title IV of ERISA is a member of the controlled group of any Loan
Party, or under common control with any Loan Party, within the
meaning of Section 414 of the Internal Revenue Code or Section
4001 of ERISA.
"Eurocurrency Liabilities" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Eurodollar
Lending Office" in its Administrative Questionnaire (or, if no
such office is specified, its Domestic Lending Office), or such
other office of such Lender as such Lender may from time to time
specify to the Parent and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Committed
Borrowing, an interest rate per annum equal to the rate per annum
(rounded upwards, if not an integral multiple of 1/32 or 1/100 of
1%, to the nearest 1/100 of 1%) appearing on Dow ▇▇▇▇▇ Markets
(Telerate)
10
Page 3750 (or any successor page) as the London interbank offered
rate for deposits in U.S. dollars at 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period for a
period equal to such Interest Period (provided that, if for any
reason such rate is not available, the term "Eurodollar Rate"
shall mean, for any Interest Period for all Eurodollar Rate
Advances comprising part of the same Committed Borrowing, the rate
per annum (rounded upwards, if not an integral multiple of 1/32 or
1/100 of 1% to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits
in Dollars at approximately 11:00 A.M. (London time) two Business
Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates).
"Eurodollar Rate Advance" means an Advance that bears
interest as provided in Section 2.08(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest
Period for all Eurodollar Rate Advances comprising part of the
same Committed Borrowing means the reserve percentage applicable
two Business Days before the first day of such Interest Period
under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of
or including Eurocurrency Liabilities (or with respect to any
other category of liabilities that includes deposits by reference
to which the interest rate on Eurodollar Rate Advances is
determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section
6.01.
"Existing Agreement" has the meaning specified in the
preliminary statements to this Amended Agreement.
"Existing 2,050 Million Credit Facility" means the
364-Day Credit Agreement dated as of June 11, 1999 among ACE INA,
as borrower, Parent, ACE Bermuda and Tempest, the financial
institutions listed therein, ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, as syndication agent and lead arranger, ▇▇▇▇▇▇
Guaranty Trust Company of New York, as administrative agent, and
▇.▇. ▇▇▇▇▇▇ Securities Inc., as co-arranger, as amended.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the
quotations for such day for such transactions received by the
11
Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
"Fee Letter" means the fee letter dated April 12, 2000
among the Parent, the Lead Arranger and the Administrative Agent.
"Fiscal Year" means a fiscal year of the Parent and its
Consolidated Subsidiaries ending on December 31 in any calendar
year.
"Fixed Rate Advances" has the meaning specified in
Section 2.03(a)(i).
"Foreign Government Scheme or Arrangement" has the
meaning specified in Section 4.01 (n) (iv).
"Foreign Plan" has the meaning specified in Section 4.01
(n) (iv).
"GAAP" has the meaning specified in Section 1.03.
"Guarantor" means each of the Borrowers other than ACE
Financial.
"Guaranty" means the undertaking by each of the Guarantors
under Article VII.
"Hazardous Materials" means (a) petroleum or petroleum
products, by-products or breakdown products, radioactive
materials, asbestos-containing materials, polychlorinated
biphenyls and radon gas and (b) any other chemicals, materials or
substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental
Law.
"Hedge Agreements" means interest rate swap, cap or
collar agreements, interest rate future or option contracts,
currency swap agreements, currency future or option contracts and
other hedging agreements.
"Indemnified Party" has the meaning specified in Section
9.04(b).
"Initial Extension of Credit" means the earlier to occur
of the initial Borrowing and the initial issuance of a Letter of
Credit hereunder.
"Initial Lenders" has the meaning specified in the
recital of parties to this Amended Agreement.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Committed Borrowing and each LIBO Rate
Advance comprising part of the same Competitive Bid Borrowing, the
period commencing on the date of such Eurodollar Rate Advance or
LIBO Rate Advance or the date of the Conversion of any Base Rate
Advance into such Eurodollar Rate Advance, and ending on the last
day of the period selected by the Borrower requesting such
Borrowing or Conversion pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of
12
the immediately preceding Interest Period and ending on the last
day of the period selected by the applicable Borrower pursuant to
the provisions below. The duration of each such Interest Period
shall be one or two weeks or one, two, three or six months, as the
Borrower requesting such Borrowing or Conversion may, upon notice
received by the Administrative Agent not later than 11:00 A.M.
(New York City time) on the third Business Day prior to the first
day of such Interest Period, select; provided, however, that:
(a) such Borrower may not select any Interest Period
with respect to any Eurodollar Rate Advance that ends after
the Termination Date;
(b) Interest Periods commencing on the same date
for Eurodollar Rate Advances comprising part of the same
Committed Borrowing or for LIBO Rate Advances comprising
part of the same Competitive Bid Borrowing shall be of
the same duration;
(c) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day,
the last day of such Interest Period shall be extended to
occur on the next succeeding Business Day, provided,
however, that, if such extension would cause the last day
of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and
(d) whenever the first day of any Interest
Period (other than a one or two week Interest Period)
occurs on a day of an initial calendar month for which
there is no numerically corresponding day in the calendar
month that succeeds such initial calendar month by the
number of months equal to the number of months in such
Interest Period, such Interest Period shall end on the
last Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code
of 1986, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"Investment" in any Person means any loan or advance to
such Person, any purchase or other acquisition of any Equity
Interests or Debt or the assets comprising a division or business
unit or a substantial part or all of the business of such Person,
any capital contribution to such Person or any other direct or
indirect investment in such Person, including, without limitation,
any acquisition by way of a merger or consolidation and any
arrangement pursuant to which the investor incurs Debt of the
types referred to in clause (h) or (i) of the definition of "Debt"
in respect of such Person; provided, however, that any purchase by
any Loan Party or any Subsidiary of any catastrophe-linked
instruments which are (x) issued for the purpose of transferring
traditional reinsurance risk to the capital markets and (y)
purchased by such Loan Party or Subsidiary in accordance with its
customary reinsurance underwriting procedures, or the entry by any
Loan Party or any Subsidiary into swap instruments relating to
such instruments in accordance with such procedures, shall be
deemed to be the entry by such
13
Person into a reinsurance contract and shall not be deemed to be
an Investment by such Person.
"Issuing Bank" means Mellon Bank, N.A. and any "New Issuing
Bank" appointed in accordance with Section 2.20.
"Judgment Currency" has the meaning specified in Section
2.21(g).
"LC Participation Obligations" has the meaning specified
in Section 2.19(a).
"L/C Related Documents" has the meaning specified in
Section 2.05(b)(ii).
"Lead Arranger"means ▇.▇. ▇▇▇▇▇▇ Securities Inc. in its
capacity as lead arranger and book runner in respect of this Amended
Agreement.
"Lender" means (i) each bank or other institution listed
on the Commitment Schedule, (ii) each Assignee which becomes a
Lender pursuant to Section 9.06(c) and (iii) their respective
successors.
"Letter of Credit Advance" has the meaning specified in
Section 2.04(f).
"Letter of Credit Agreement" has the meaning specified in
Section 2.04(a).
"Letter of Credit Business Day" means a day of the year
on which banks are not required or authorized by law to close in
New York City and on which banks are not required or authorized by
law to close in Pittsburgh, Pennsylvania (or, if Mellon Bank, N.A.
is no longer the Issuing Bank, in the city in which the principal
letter of credit operations of the Issuing Bank are located).
"Letter of Credit Commitment" means at any time the
lesser of (a) $250,000,000(or such other amount as may be agreed
in writing among the Borrowers, the Agents and the Issuing Bank)
and (b) the aggregate amount of the WC Commitments.
"Letters of Credit" has the meaning specified in Section
2.01(b).
"Letter of Credit Exposure" at any time means the sum at
such time of (a) the aggregate outstanding amount of Letter of
Credit Advances, (b) the aggregate Available Amounts of all
outstanding Letters of Credit and (c) the aggregate Available
Amounts of all Letters of Credit which have been requested by a
Borrower to be issued hereunder but have not yet been so issued.
"Letter of Credit Participating Interest" has the meaning
specified in Section 2.04(d).
"Letter of Credit Participating Interest Commitment" has
the meaning specified in Section 2.04(d).
14
"LIBO Rate" means, for any Interest Period for all LIBO
Rate Advances comprising part of the same Competitive Bid
Borrowing, an interest rate per annum equal to the rate per annum
(rounded upwards, if not an integral multiple of 1/32 or 1/100 of
1%, to the nearest 1/100 of 1%) appearing on Dow ▇▇▇▇▇ Markets
(Telerate) Page 3750 (or any successor page) as the London
interbank offered rate for deposits in U.S. dollars at 11:00 A.M.
(London time) two Business Days before the first day of such
Interest Period for a period equal to such Interest Period
(provided that, if for any reason such rate is not available, the
term "LIBO Rate" shall mean for any Interest Period for all LIBO
Rate Advances comprising part of the same Competitive Bid
Borrowing, the rate per annum (rounded upwards, if not an integral
multiple of 1/32 or 1/100 of 1%, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters
Screen LIBO Page, the applicable rate shall be the arithmetic mean
of all such rates).
"LIBO Rate Advances" has the meaning specified in Section
2.03(a)(i).
"Lien" means any lien, security interest or other charge
or encumbrance of any kind, or any other type of preferential
arrangement, including, without limitation, the lien or retained
security title of a conditional vendor and any easement, right of
way or other encumbrance on title to real property.
"Loan Documents" means (i) this Agreement, (ii) the
Notes, (iii) the Fee Letter and (iv) each Letter of Credit
Agreement, in each case as amended.
"Loan Parties" means the Borrowers.
"Mandatorily Convertible Preferred Securities" means
units comprised of (i) Preferred Securities or preferred shares of
Parent and (ii) a contract for the sale of ordinary shares of the
Parent (including "Feline Prides(TM)", "Rhinos(TM)" or any
substantially similar securities).
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse
change in the business, financial condition, operations or
properties of the Parent and its Subsidiaries, taken as a whole.
"Material Adverse Effect" means a material adverse effect
on (a) the business, condition, operations or properties of the
Parent and its Subsidiaries, taken as a whole, (b) the rights and
remedies of any Agent or any Lender under any Loan Document or (c)
the ability of the Loan Parties, taken as a whole, to perform
their obligations under the Loan Documents.
"Material Financial Obligation" means a principal amount
of Debt and/or payment obligations in respect of any Hedge
Agreement of the Parent and/or one or more
15
of its Subsidiaries arising in one or more related or unrelated
transactions exceeding in the aggregate $25,000,000.
"MGT " has the meaning specified in the recital of
parties to this Amended Agreement.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, to which any Loan Party or
any ERISA Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years
made or accrued an obligation to make contributions.
"Non-Dollar Letters of Credit" has the meaning specified
in Section 2.21(a).
"Note" means a Committed Note or a Competitive Bid Note.
"Notice of Committed Borrowing" has the meaning specified
in Section 2.02(a).
"Notice of Competitive Bid Borrowing" has the meaning
specified in Section 2.03(a).
"OECD" means the Organization for Economic Cooperation
and Development.
"Other Taxes" has the meaning specified in Section
2.13(b).
"Overnight Rate" has the meaning specified in Section
2.21(h).
"Parent" has the meaning specified in the recital of
parties to this Amended Agreement.
"Participant" has the meaning specified in Section
9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation (or
any successor).
"Pension Plan" means a "pension plan", as such term is
defined in Section 3(2) of ERISA, which is subject to title IV of
ERISA (other than any "multiemployer plan" as such term is defined
in section 4001(a)(3) of ERISA), and to which any Loan Party or
any ERISA Affiliate may have any liability, including any
liability by reason of having been a substantial employer within
the meaning of section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a
contributing sponsor under section 4069 of ERISA.
"Permitted Liens" means such of the following as to which
no enforcement, collection, execution, levy or foreclosure
proceeding shall have been commenced or which are being contested
in good faith by appropriate proceedings: (a) Liens for taxes,
assessments and governmental charges or levies not yet due and
payable; (b) Liens
16
imposed by law, such as materialmen's, mechanics', carriers',
workmen's and repairmen's Liens and other similar Liens arising in
the ordinary course of business securing obligations that are not
overdue for a period of more than 90 days; (c) pledges or deposits
to secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations; and (d)
easements, rights of way and other encumbrances on title to real
property that do not render title to the property encumbered
thereby unmarketable or materially adversely affect the use of
such property for its present purposes.
"Person" means an individual, partnership, corporation
(including a business trust), limited liability company, joint
stock company, trust, unincorporated association, joint venture or
other entity, or a government or any political subdivision or
agency thereof.
"Preferred Interests" means, with respect to any Person,
Equity Interests issued by such Person that are entitled to a
preference or priority over any other Equity Interests issued by
such Person upon any distribution of such Person's property and
assets, whether by dividend or upon liquidation.
"Preferred Securities" means (i) preferred securities
issued by a Special Purpose Trust which shall provide, among other
things, that dividends shall be payable only out of proceeds of
interest payments on the Debentures, or (ii) other instruments
that may be treated in whole or in part as equity for rating
agency purposes while being treated as debt for tax purposes.
"Pricing Schedule" means the Schedule hereto denominated
as such.
"Pro Rata Share" of any amount means, with respect to any
Lender at any time, the product of such amount times a fraction
the numerator of which is the amount of such Lender's WC
Commitment at such time (or, if the WC Commitments shall have been
terminated pursuant to Section 2.06 or 6.01, such Lender's WC
Commitment as in effect immediately prior to such termination) and
the denominator of which is the Committed Facility at such time
(or, if the WC Commitments shall have been terminated pursuant to
Section 2.05 or 6.01, the Committed Facility as in effect
immediately prior to such termination).
"Redeemable" means, with respect to any Equity Interest,
any Debt or any other right or obligation, any such Equity
Interest, Debt, right or obligation that (a) the issuer has
undertaken to redeem at a fixed or determinable date or dates,
whether by operation of a sinking fund or otherwise, or upon the
occurrence of a condition not solely within the control of the
issuer or (b) is redeemable at the option of the holder.
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from time to
time.
"Required Lenders" means, at any time, Lenders owed or
holding at least a majority in interest of the sum of (a)
aggregate principal amount of the Committed
17
Advances outstanding at such time and (b) the aggregate Available
Amount of all Letters of Credit outstanding at such time, or, if
no such principal amount and no Letters of Credit are outstanding
at such time, Lenders holding at least a majority in interest of
the aggregate of the WC Commitments; provided, however, that if
any Lender shall be a Defaulting Lender at such time, there shall
be excluded from the determination of Required Lenders at such
time (A) the aggregate principal amount of the Committed Advances
owing to such Lender (in its capacity as a Lender) and outstanding
at such time, (B) such Lender's Pro Rata Share of the aggregate
Available Amount of all Letters of Credit outstanding at such time
and (C) the Unused WC Commitment of such Lender at such time.
"Responsible Officer" means the Chairman, Chief Executive
Officer, President, Chief Financial Officer, Treasurer, Chief
Accounting Officer or Chief Investment Officer of the Parent.
"S&P" means Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Significant Subsidiary" means a Subsidiary of Parent
that is a "significant subsidiary" of the Parent under Regulation
S-X promulgated by the Securities and Exchange Commission.
"Securitization Transaction" means any sale, assignment
or other transfer by Parent or any Subsidiary of any accounts
receivable, premium finance loan receivables, lease receivables or
other payment obligations owing to Parent or such Subsidiary or
any interest in any of the foregoing, together in each case with
any collections and other proceeds thereof, any collection or
deposit accounts related thereto, and any collateral, guaranties
or other property or claims in favor of Parent or such Subsidiary
supporting or securing payment by the obligor thereon of, or
otherwise related to, any such receivables.
"Solvent" and "Solvency" mean, with respect to any Person
on a particular date, that on such date (a) the fair value of the
property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair salable value of
the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts
as they become absolute and matured, (c) such Person does not
intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay such debts and
liabilities as they mature and (d) such Person is not engaged in
business or a transaction, and is not about to engage in business
or a transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent
liabilities at any time shall be computed as the amount that, in
the light of all the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Special Purpose Trust" means a special purpose business
trust established by the Parent or ACE INA of which the Parent or
ACE INA will hold all the common securities, which will be the
issuer of Preferred Securities, and which will loan to the
18
Parent or ACE INA (such loan being evidenced by the Debentures)
the net proceeds of the issuance and sale of the Preferred
Securities and common securities of such Special Purpose Trust.
"Subsidiary" of any Person means any corporation,
partnership, joint venture, limited liability company, trust or
estate of which (or in which) more than 50% of (a) the issued and
outstanding capital stock having ordinary voting power to elect a
majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency), (b) the interest in
the capital or profits of such partnership, joint venture or
limited liability company or (c) the beneficial interest in such
trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its
other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Taxes" has the meaning specified in Section 2.13(a).
"Tempest" has the meaning specified in the recital of
parties to this Amended Agreement.
"Termination Date" means the earlier of May 6, 2005 and
the date of termination in whole of the WC Commitments and the
Letter of Credit Commitment.
"364-Day Revolving Credit Facility" means the Amended and
Restated 364-Day Credit Agreement dated as of the date of this
Amended Agreement among the Parent, ACE Bermuda, Tempest, ACE INA
and ACE Guaranty Re, Inc., the lenders party thereto, Bank of
America, N.A. and The Chase Manhattan Bank, as co-syndication
agents, and MGT as administrative agent, as the same may be
amended, modified or otherwise supplemented from time to time.
"Total Capitalization" means, at any time, an amount
(without duplication) equal to (i) the then outstanding
Consolidated Debt of the Parent and its Subsidiaries plus (ii)
Consolidated stockholders equity of the Parent and its
Subsidiaries plus (without duplication) (iii) the then issued and
outstanding amount of Preferred Securities (including Mandatorily
Convertible Preferred Securities) and (without duplication)
Debentures.
"Type" refers to the distinction between Advances bearing
interest at the Base Rate and Advances bearing interest at the
Eurodollar Rate.
"Unused WC Commitment" means, with respect to any Lender
at any time, (a) such Lender's WC Commitment at such time minus
(b) the sum of (i) the aggregate principal amount of all Committed
Advances made by such Lender hereunder plus (ii) such Lender's Pro
Rata Share of (A) the aggregate Available Amount of all Letters of
Credit hereunder and (B) the aggregate principal amount of all
Letter of Credit Advances made by the Issuing Bank pursuant to
Section 2.04(c) and outstanding at such time
19
(whether held by the Issuing Bank or the Lenders) and (C) the
aggregate principal amount of all Competitive Bid Advances
hereunder.
"Voting Interests" means shares of capital stock issued
by a corporation, or equivalent Equity Interests in any other
Person, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even if the
right so to vote has been suspended by the happening of such a
contingency.
"WC Commitment" means (i) with respect to each Lender
listed on the Commitment Schedule, the amount set forth opposite
such Lender's name on the Commitment Schedule and (ii) with
respect to any Assignee which becomes a Lender pursuant to Section
9.06(c), the amount of the transferor Lender's Commitment assigned
to it pursuant to Section 9.06(c), in each case as such amount may
be changed from time to time pursuant to Section 2.06 or 9.06(c);
provided that, if the context so requires, the term "WC
Commitment" means the obligation of a Lender to extend credit up
to such amount to the Borrowers hereunder.
"Welfare Plan" means a welfare plan, as defined in
Section 3(1) of ERISA, that is maintained for employees of any
Loan Party or in respect of which any Loan Party could have
liability.
"Withdrawal Liability" has the meaning specified in Part
I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods; Other
Definitional Provisions. In this Agreement and the other Loan Documents in
the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding". References in the Loan
Documents to any agreement or contract "as amended" shall mean and be a
reference to such agreement or contract as amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with its
terms.
SECTION 1.03. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared
in accordance with generally accepted accounting principles as in effect
from time to time ("GAAP"), applied on a basis consistent (except for
changes concurred in by the Parent's independent public accountants) with
the most recent audited consolidated financial statements of the Parent and
its Subsidiaries delivered to the Lenders; provided that, if the Parent
notifies the Administrative Agent that the Parent wishes to amend any
covenant in Article V to eliminate the effect of any change in generally
accepted accounting principles on the operation of such covenant (or if the
Administrative Agent notifies the Parent that the Required Lenders wish to
amend Article V for such purpose), then the Parent's compliance with such
covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective (and, concurrently with the
delivery of any financial statements required to be delivered
20
hereunder, the Parent shall provide a statement of reconciliation
conforming such financial information to such generally accepted accounting
principles as previously in effect), until either such notice is withdrawn
or such covenant is amended in a manner satisfactory to the Parent and the
Required Lenders.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Committed Advances and the Letters of
Credit. (a) The Committed Advances. Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make advances (each a
"Committed Advance") to any Borrower from time to time on any Business Day
during the period from the date hereof until the Termination Date in an
amount for each such Committed Advance not to exceed such Lender's Unused
WC Commitment at such time. Each Committed Borrowing shall be in an
aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in
excess thereof and shall consist of Committed Advances made simultaneously
by the Lenders ratably according to their WC Commitments. Within the limits
of each Lender's Unused WC Commitment in effect from time to time, each
Borrower may borrow under this Section 2.01, prepay pursuant to Section
2.07 and reborrow under this Section 2.01.
(b) Letters of Credit. The Issuing Bank agrees, on the
terms and subject to the conditions herein set forth, to issue letters of
credit (the "Letters of Credit") for the account of any Borrower on any
Letter of Credit Business Day from time to time during the period from the
date hereof until 30 days prior to the Termination Date. The Issuing Bank
shall have no obligation to issue, and no Borrower will request the
issuance of, any Letter of Credit hereunder if, at the time of issuance of
such Letter of Credit and after giving effect thereto, the Letter of Credit
Exposure would exceed the Issuing Bank's Letter of Credit Commitment. The
Issuing Bank shall have no obligation to issue, and no Borrower shall
request the issuance of, any Letter of Credit hereunder if the Available
Amount of such Letter of Credit exceeds, immediately before the time of
such issuance, an amount equal to the total Unused WC Commitments of the
Lenders at such time (as such amount shall be advised by the Administrative
Agent to the Issuing Bank as contemplated by Section 2.04). The Issuing
Bank shall have no obligation to issue, and no Borrower shall request the
issuance of, any Letter of Credit except within the following limitations:
(i) each Letter of Credit shall be denominated in U.S. dollars, (ii) each
Letter of Credit shall be payable only against sight drafts (and not time
drafts) and (iii) no Letter of Credit shall have an expiration date
(including all rights of the applicable Borrower or the beneficiary to
require renewal) later than the earlier of 10 days prior to the Termination
Date and one year after the date of issuance thereof, but a Letter of
Credit may by its terms be automatically renewable annually unless the
Issuing Bank notifies the beneficiary thereof of its election not to renew
such Letter of Credit; provided that the terms of each Letter of Credit
that is automatically renewable annually shall not permit the expiration
date (after giving effect to any renewal) of such Letter of Credit in any
event to be extended to a date later than 10 days prior to the Termination
Date. The Issuing Bank shall have no obligation to issue any letter of
21
credit which is unsatisfactory in form, substance or beneficiary to the
Issuing Bank in the exercise of its reasonable judgment consistent with its
customary practice.
SECTION 2.02. Making the Committed Advances. (a) Except
as otherwise provided in Section 2.03, each Committed Borrowing shall be
made on notice, given not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the date of the proposed Committed Borrowing in
the case of a Committed Borrowing consisting of Eurodollar Rate Advances,
or not later than 10:30 A.M. (New York City time) on the date of the
proposed Committed Borrowing in the case of a Committed Borrowing
consisting of Base Rate Advances, by any Borrower to the Administrative
Agent, which shall give to each Lender prompt notice thereof by telecopier.
Each such notice of a Committed Borrowing (a "Notice of Committed
Borrowing") shall be by telephone, confirmed immediately in writing, or
telecopier, in substantially the form of Exhibit B-1 hereto, specifying
therein the requested (i) date of such Committed Borrowing, (ii) Type of
Advances comprising such Committed Borrowing, (iii) aggregate amount of
such Committed Borrowing and (iv) in the case of a Committed Borrowing
consisting of Eurodollar Rate Advances, initial Interest Period for such
Committed Advances. Each Lender shall, before 12:00 noon (New York City
time) on the date of such Committed Borrowing, make available for the
account of its Applicable Lending Office to the Administrative Agent at the
Administrative Agent's Account, in same day funds, such Lender's ratable
portion of such Committed Borrowing in accordance with the respective WC
Commitments of such Lender and the other Lenders. After the Administrative
Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article III, the Administrative Agent will make
such funds available to the Borrower requesting such Committed Borrowing by
crediting the applicable Borrower's Account.
(b) Anything in subsection (a) above to the contrary
notwithstanding, (i) no Borrower may select Eurodollar Rate Advances if the
obligation of the Lenders to make Eurodollar Rate Advances shall then be
suspended pursuant to Section 2.10 or 2.11 and (ii) the Committed Advances
may not be outstanding as part of more than ten (10) separate Committed
Borrowings.
(c) Each Notice of Committed Borrowing shall be
irrevocable and binding on the Borrower that requested such Committed
Borrowing. In the case of any Committed Borrowing that the related Notice
of Committed Borrowing specifies is to be comprised of Eurodollar Rate
Advances, the Borrower that requested such Committed Borrowing shall
indemnify each Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date
specified in such Notice of Committed Borrowing for such Committed
Borrowing the applicable conditions set forth in Article III, including,
without limitation, any loss (excluding loss of anticipated profits), cost
or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Committed
Advance to be made by such Lender as part of such Committed Borrowing when
such Committed Advance, as a result of such failure, is not made on such
date.
(d) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Committed Borrowing that such
Lender will not make available to the Administrative Agent such Lender's
ratable portion of such Committed Borrowing, the Administrative Agent may
assume that such Lender has made such portion available to the
22
Administrative Agent on the date of such Committed Borrowing in accordance
with subsection (a) of this Section 2.02 and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower requesting
such Committed Borrowing on such date a corresponding amount. If and to the
extent that such Lender shall not have so made such ratable portion
available to the Administrative Agent, such Lender and such Borrower
severally agree to repay or pay to the Administrative Agent forthwith on
demand such corresponding amount and to pay interest thereon, for each day
from the date such amount is made available to such Borrower until the date
such amount is repaid or paid to the Administrative Agent, at (i) in the
case of such Borrower, the interest rate applicable at such time under
Section 2.08 to Advances comprising such Committed Borrowing and (ii) in
the case of such Lender, the Federal Funds Rate. If such Lender shall pay
to the Administrative Agent such corresponding amount, such amount so paid
shall constitute such Lender's Committed Advance as part of such Borrowing
for all purposes.
(e) The failure of any Lender to make the Committed
Advance to be made by it as part of any Committed Borrowing shall not
relieve any other Lender of its obligation, if any, hereunder to make its
Committed Advance on the date of such Committed Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the
Committed Advance to be made by such other Lender on the date of any
Committed Borrowing.
SECTION 2.03. The Competitive Bid Advances. (a) Each
Lender severally agrees that any Borrower may make Competitive Bid
Borrowings under this Section 2.03 from time to time on any Business Day
during the period from the date hereof until the date occurring 7 days
prior to the Termination Date in the manner set forth below; provided that,
following the making of each Competitive Bid Borrowing, the aggregate
amount of the Advances then outstanding plus the then Available Amount of
all Letters of Credit shall not exceed the aggregate amount of the WC
Commitments of the Lenders.
(i) Any Borrower may request a Competitive Bid Borrowing
under this Section 2.03 by delivering to the Administrative Agent,
by telecopier, a notice of a Competitive Bid Borrowing (a "Notice
of Competitive Bid Borrowing"), in substantially the form of
Exhibit B-2 hereto, specifying therein the requested (v) date of
such proposed Competitive Bid Borrowing, (w) aggregate amount of
such proposed Competitive Bid Borrowing, (x) in the case of a
Competitive Bid Borrowing consisting of LIBO Rate Advances,
Interest Period, or in the case of a Competitive Bid Borrowing
consisting of Fixed Rate Advances, maturity date for repayment of
each Fixed Rate Advance to be made as part of such Competitive Bid
Borrowing (which maturity date may not be earlier than the date
occurring 7 days after the date of such Competitive Bid Borrowing
or later than the earlier of (I) 180 days after the date of such
Competitive Bid Borrowing and (II) the Termination Date), (y)
interest payment date or dates relating thereto, and (z) other
terms (if any) to be applicable to such Competitive Bid Borrowing,
not later than 10:30 A.M. (New York City time) (A) at least one
Business Day prior to the date of the proposed Competitive Bid
Borrowing, if such Borrower shall specify in the Notice of
Competitive Bid Borrowing that the rates of interest to be offered
by the Lenders shall be fixed rates per annum (the Advances
comprising any such Competitive Bid Borrowing being referred to
herein as "Fixed Rate Advances") and (B) at least four Business
Days prior to the date of the proposed Competitive Bid Borrowing,
if such Borrower shall
23
instead specify in the Notice of Competitive Bid Borrowing that
the rates of interest to be offered by the Lenders are to be based
on a margin above or below the LIBO Rate (the Advances comprising
such Competitive Bid Borrowing being referred to herein as "LIBO
Rate Advances"). Each Notice of Competitive Bid Borrowing shall be
irrevocable and binding on such Borrower. The Administrative Agent
shall in turn promptly notify each Lender of each request for a
Competitive Bid Borrowing received by it from such Borrower by
sending such Lender a copy of the related Notice of Competitive
Bid Borrowing.
(ii) Each Lender may, if, in its sole discretion, it
elects to do so, irrevocably offer to make one or more Competitive
Bid Advances to the Borrower requesting the Competitive Bid
Advances as part of such proposed Competitive Bid Borrowing at a
rate or rates of interest specified by such Lender in its sole
discretion, by notifying the Administrative Agent (which shall
give prompt notice thereof to the Borrower requesting the
Competitive Bid Borrowing), before 9:30 A.M. (New York City time)
on the date of such proposed Competitive Bid Borrowing, in the
case of a Competitive Bid Borrowing consisting of Fixed Rate
Advances and before 10:00 A.M. (New York City time) three Business
Days before the date of such proposed Competitive Bid Borrowing,
in the case of a Competitive Bid Borrowing consisting of LIBO Rate
Advances, of the minimum amount and maximum amount of each
Competitive Bid Advance which such Lender would be willing to make
as part of such proposed Competitive Bid Borrowing (which amounts
may, subject to the proviso to the first sentence of this Section
2.03(a), exceed such Lender's WC Commitment, if any), the rate or
rates of interest therefor and such Lender's Applicable Lending
Office with respect to such Competitive Bid Advance; provided that
if the Administrative Agent in its capacity as a Lender shall, in
its sole discretion, elect to make any such offer, it shall notify
the Borrower requesting such Competitive Bid Borrowing of such
offer at least 30 minutes before the time and on the date on which
notice of such election is to be given to the Administrative Agent
by the other Lenders. If any Lender shall elect not to make such
an offer, such Lender shall so notify the Administrative Agent,
before 10:00 A.M. (New York City time) on the date on which notice
of such election is to be given to the Administrative Agent by the
other Lenders, and such Lender shall not be obligated to, and
shall not, make any Competitive Bid Advance as part of such
Competitive Bid Borrowing; provided that the failure by any Lender
to give such notice shall not cause such Lender to be obligated to
make any Competitive Bid Advance as part of such proposed
Competitive Bid Borrowing.
(iii) The Borrower requesting any particular Competitive
Bid Borrowing shall, in turn, before 10:30 A.M. (New York City
time) on the date of such proposed Competitive Bid Borrowing, in
the case of a Competitive Bid Borrowing consisting of Fixed Rate
Advances and before 11:00 A.M. (New York City time) three Business
Days before the date of such proposed Competitive Bid Borrowing,
in the case of a Competitive Bid Borrowing consisting of LIBO Rate
Advances, either:
(x) cancel such Competitive Bid Borrowing by giving the
Administrative Agent notice to that effect, or
24
(y) accept one or more of the offers made by any
Lender or Lenders pursuant to paragraph (ii) above, in
its sole discretion, by giving notice to the
Administrative Agent of the amount of each Competitive
Bid Advance (which amount shall be equal to or greater
than the minimum amount, and equal to or less than the
maximum amount, notified to such Borrower by the
Administrative Agent on behalf of such Lender for such
Competitive Bid Advance pursuant to paragraph (ii) above)
to be made by each such Lender as part of such
Competitive Bid Borrowing, and reject any remaining
offers made by Lenders pursuant to paragraph (ii) above
by giving the Administrative Agent notice to that effect.
The Borrower that requested such Competitive Bid
Borrowing shall accept the offers made by any Lender or
Lenders to make Competitive Bid Advances in order of the
lowest to the highest rates of interest offered by such
Lenders. If two or more Lenders have offered the same
interest rate, the amount to be borrowed at such interest
rate will be allocated among such Lenders in proportion
to the amount that each such Lender offered at such
interest rate.
(iv) If the Borrower that requested any particular
Competitive Bid Borrowing notifies the Administrative Agent that
such Competitive Bid Borrowing is canceled pursuant to paragraph
(iii)(x) above, the Administrative Agent shall give prompt notice
thereof to the Lenders and such Competitive Bid Borrowing shall
not be made.
(v) If the Borrower that requested any particular
Competitive Bid Borrowing accepts one or more of the offers made
by any Lender or Lenders pursuant to paragraph (iii)(y) above, the
Administrative Agent shall in turn promptly notify (A) each Lender
that has made an offer as described in paragraph (ii) above, of
the date and aggregate amount of such Competitive Bid Borrowing
and whether or not any offer or offers made by such Lender
pursuant to paragraph (ii) above have been accepted by such
Borrower, (B) each Lender that is to make a Competitive Bid
Advance as part of such Competitive Bid Borrowing, of the amount
of each Competitive Bid Advance to be made by such Lender as part
of such Competitive Bid Borrowing, and (C) each Lender that is to
make a Competitive Bid Advance as part of such Competitive Bid
Borrowing, upon receipt, that the Administrative Agent has
received forms of documents appearing to fulfill the applicable
conditions set forth in Article III. Each Lender that is to make a
Competitive Bid Advance as part of such Competitive Bid Borrowing
shall, before 12:00 noon (New York City time) on the date of such
Competitive Bid Borrowing specified in the notice received from
the Administrative Agent pursuant to clause (A) of the preceding
sentence or any later time when such Lender shall have received
notice from the Administrative Agent pursuant to clause (C) of the
preceding sentence, make available for the account of its
Applicable Lending Office to the Administrative Agent at the
Administrative Agent's Account, in same day funds, such Lender's
portion of such Competitive Bid Borrowing. Upon fulfillment of the
applicable conditions set forth in Article III and after receipt
by the Administrative Agent of such funds, the Administrative
Agent will make such funds available to the Borrower that
requested such Borrowing at the Administrative Agent's address
referred to in Section 8.02. Promptly after each Competitive Bid
Borrowing the Administrative Agent will notify each Lender of the
amount of the Competitive Bid Borrowing.
25
(vi) If the Borrower that requested any particular
Competitive Bid Borrowing notifies the Administrative Agent that
it accepts one or more of the offers made by any Lender or Lenders
pursuant to paragraph (iii)(y) above, such notice of acceptance
shall be irrevocable and binding on such Borrower. Such Borrower
shall indemnify each Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to fulfill on
or before the date specified in the related Notice of Competitive
Bid Borrowing for such Competitive Bid Borrowing the applicable
conditions set forth in Article III, including, without
limitation, any loss (excluding loss of anticipated profits), cost
or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Lender to fund the
Competitive Bid Advance to be made by such Lender as part of such
Competitive Bid Borrowing when such Competitive Bid Advance, as a
result of such failure, is not made on such date.
(b) Each Competitive Bid Borrowing shall be in an
aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in
excess thereof and, following the making of each Competitive Bid Borrowing,
the Borrowers shall be in compliance with the limitations set forth in the
proviso to the first sentence of subsection (a) above.
(c) Within the limits and on the conditions set forth in
this Section 2.03, any Borrower may from time to time borrow under this
Section 2.03, repay or prepay pursuant to subsection (d) below, and
reborrow under this Section 2.03, provided that a Competitive Bid Borrowing
shall not be made within three Business Days of the date of any other
Competitive Bid Borrowing.
(d) The Borrower to which any particular Competitive Bid
Borrowing is made shall repay to the Administrative Agent for the account
of each Lender that has made a Competitive Bid Advance, on the maturity
date of each Competitive Bid Advance (such maturity date being that
specified by such Borrower as the last day of the Interest Period or the
maturity date of such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above),
the then unpaid principal amount of such Competitive Bid Advance. No
Borrower shall have any right to prepay any principal amount of any
Competitive Bid Advance unless, and then only on the terms, specified by
such Borrower for such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above.
(e) The Borrower to which any particular Competitive Bid
Borrowing is made shall pay interest on the unpaid principal amount of each
Competitive Bid Advance from the date of such Competitive Bid Advance to
the date the principal amount of such Competitive Bid Advance is repaid in
full, at the rate of interest for such Competitive Bid Advance specified by
the Lender making such Competitive Bid Advance in its notice with respect
thereto delivered pursuant to subsection (a)(ii) above, payable on the
interest payment date or dates specified by such Borrower for such
Competitive Bid Advance in the related Notice of Competitive Bid Borrowing
delivered pursuant to subsection (a)(i) above. Upon the occurrence and
during the continuance of an Event of Default under Section 6.01(a) or
6.01(f) or at the request of the Required Lenders during the existence of
any other Event of Default, such Borrower shall pay interest on the amount
of unpaid principal of and interest on each Competitive Bid Advance owing
to a Lender, payable in arrears on the date or dates interest is payable
thereon, at a rate per
26
annum equal at all times to 2% per annum above the rate per annum otherwise
required to be paid on such Competitive Bid Advance.
(f) The indebtedness of any Borrower resulting from any
Competitive Bid Advance made to such Borrower as part of a Competitive Bid
Borrowing shall be evidenced by the Competitive Bid Note of such Borrower
payable to the order of the Lender making such Competitive Bid Advance.
(g) Upon delivery of each Notice of Competitive Bid
Borrowing, the Borrower that requested the applicable Competitive Bid
Borrowing shall pay a non-refundable fee of $1,500 to the Administrative
Agent for its own account.
SECTION 2.04. Issuance and Renewals and Drawings,
Participations and Reimbursement with Respect to Letters of Credit. (a)
Request for Issuance. A Borrower may from time to time request, upon at
least three Letter of Credit Business Days' written notice (given not later
than 11:00 A.M. New York City time on the last day permitted therefor), the
Issuing Bank to issue or renew (other than any automatic renewal thereof) a
Letter of Credit by:
(i) delivering to the Issuing Bank and the Administrative
Agent a written request to such effect, specifying the date on
which such Letter of Credit is to be issued (which shall be a
Letter of Credit Business Day), the expiration date thereof, the
Available Amount thereof, the name and address of the beneficiary
thereof and the form thereof, and
(ii) in the case of the issuance of a Letter of Credit,
delivering to the Issuing Bank a completed agreement and
application with respect to such Letter of Credit as the Issuing
Bank may specify for use in connection with such requested Letter
of Credit (a "Letter of Credit Agreement"), together with such
other certificates, documents and other papers as are specified in
such Letter of Credit Agreement.
The Administrative Agent shall, promptly upon receiving such notice, notify
the Lenders of such proposed Letter of Credit (which notice shall specify
the Available Amount and term of such proposed Letter of Credit) or such
proposed renewal of a Letter of Credit (which notice shall specify the term
of such renewal), and shall determine, as of 11:00 A.M. (New York City
time) on the Business Day immediately preceding such proposed issuance,
whether such proposed Letter of Credit complies with the limitations set
forth in Section 2.01 hereof. If such limitations set forth in Section 2.01
are not satisfied or if the Required Lenders have given notice to the
Administrative Agent to cease issuing or renewing Letters of Credit as
contemplated by this Agreement, the Administrative Agent shall immediately
notify the Issuing Bank (in writing or by telephone immediately confirmed
in writing) that the Issuing Bank is not authorized to issue or renew, as
the case may be, such Letter of Credit. If the Issuing Bank issues or
renews a Letter of Credit, it shall deliver the original of such Letter of
Credit to the beneficiary thereof or as the Account Party shall otherwise
direct, and shall promptly notify the Administrative Agent thereof and
furnish a copy thereof to the Administrative Agent.
(b) Request for Extension or Increase. An Account
Party may from time to time request the Issuing Bank to extend the expiration
date of an outstanding Letter of Credit or
27
increase (or, with the consent of the beneficiary, decrease) the Available
Amount of or the amount available to be drawn on such Letter of Credit.
Such extension or increase shall for all purposes hereunder be treated as
though such Account Party had requested issuance of a replacement Letter of
Credit (except only that the Issuing Bank may, if it elects, issue a notice
of extension or increase in lieu of issuing a new Letter of Credit in
substitution for the outstanding Letter of Credit).
(c) Limitations on Issuance, Extension, Renewal and
Amendment. As between the Issuing Bank, on the one hand, and the Agents and
the Lenders, on the other hand, the Issuing Bank shall be justified and
fully protected in issuing or renewing a proposed Letter of Credit unless
it shall have received notice from the Administrative Agent as provided in
Section 2.04(a) hereof that it is not authorized to do so (and, in the case
of automatic renewals, ten days shall have passed following the date of the
Issuing Bank's receipt of such notice), notwithstanding any subsequent
notices to the Issuing Bank, any knowledge of a Default, any knowledge of
failure of any condition specified in Article III hereof to be satisfied,
any other knowledge of the Issuing Bank, or any other event, condition or
circumstance whatsoever. The Issuing Bank may amend, modify or supplement
Letters of Credit or Letter of Credit Agreements, or waive compliance with
any condition of issuance, renewal or payment, without the consent of, and
without liability to, any Agent or any Lender, provided that any such
amendment, modification or supplement that extends the expiration date or
increases the Available Amount of or the amount available to be drawn on an
outstanding Letter of Credit shall be subject to Section 2.01.
(d) Letter of Credit Participating Interests.
Concurrently with the issuance of each Letter of Credit, the Issuing Bank
automatically shall be deemed, irrevocably and unconditionally, to have
sold, assigned, transferred and conveyed to each other Lender, and each
other Lender automatically shall be deemed, irrevocably and
unconditionally, severally to have purchased, acquired, accepted and
assumed from the Issuing Bank, without recourse to, or representation or
warranty by, the Issuing Bank, an undivided interest, in a proportion equal
to such Lender's Pro Rata Share, in all of the Issuing Bank's rights and
obligations in, to or under such Letter of Credit, the related Letter of
Credit Agreement, all reimbursement obligations with respect to such Letter
of Credit, and all collateral, guarantees and other rights from time to
time directly or indirectly securing the foregoing (such interest of each
Lender being referred to herein as a "Letter of Credit Participating
Interest", it being understood that the Letter of Credit Participating
Interest of the Issuing Bank is the interest not otherwise attributable to
the Letter of Credit Participating Interests of the other Lenders). Each
Lender irrevocably and unconditionally agrees to the immediately preceding
sentence, such agreement being herein referred to as such Bank's "Letter of
Credit Participating Interest Commitment". Amounts, other than Letter of
Credit Advances made by a Lender other than the Issuing Bank and other than
Letter of Credit commissions under Section 2.09(d)(i), payable from time to
time under or in connection with a Letter of Credit or Letter of Credit
Agreement shall be for the sole account of the Issuing Bank. On the date
that any Assignee becomes a party to this Agreement in accordance with
Section 9.07 hereof, Letter of Credit Participating Interests in all
outstanding Letters of Credit held by the Lender from which such Assignee
acquired its interest hereunder shall be proportionately reallocated
between such Assignee and such assignor Lender (and, to the extent such
assignor Lender is the Issuing Bank, the Assignee shall be deemed to have
acquired a Letter of Credit Participating Interest from the Issuing Bank to
such extent). Notwithstanding
28
any other provision hereof, each Lender hereby agrees that its obligation
to participate in each Letter of Credit, its obligation to make the
payments specified in Section 2.04(e), and the right of the Issuing Bank to
receive such payments in the manner specified therein, are each absolute,
irrevocable and unconditional and shall not be affected by any event,
condition or circumstance whatever. The failure of any Lender to make any
such payment shall not relieve any other Lender of its funding obligation
hereunder on the date due, but no Lender shall be responsible for the
failure of any other Lender to meet its funding obligations hereunder.
(e) Payment by Lenders on Account of Unreimbursed Draws.
If the Issuing Bank makes a payment under any Letter of Credit and is not
reimbursed in full therefor on such payment date in accordance with Section
2.05(b), the Issuing Bank may notify the Administrative Agent thereof
(which notice may be by telephone), and the Administrative Agent shall
forthwith notify each Lender (which notice may be by telephone promptly
confirmed in writing) thereof. No later than the Administrative Agent's
close of business on the date such notice is given (if notice is given by
2:00 P.M. New York City time) or 10:00 A.M. New York City time the
following day (if notice is given after 2:00 P.M. New York City time or in
the case of any Lender whose Applicable Lending Office is located in
Europe), each Lender will pay to the Administrative Agent, for the account
of the Issuing Bank, in immediately available funds, an amount equal to
such Lender's Pro Rata Share of the unreimbursed portion of such payment by
the Issuing Bank. Amounts received by the Administrative Agent for the
account of the Issuing Bank shall be forthwith transferred, in immediately
available funds, to the Issuing Bank. If and to the extent that any Lender
fails to make such payment to the Administrative Agent for the account of
the Issuing Bank on such date, such Lender shall pay such amount on demand,
together with interest, for the Issuing Bank's own account, for each day
from and including the date of the Issuing Bank's payment to but not
including the date of repayment to the Issuing Bank (before and after
judgment) at a rate per annum for each day (i) from and including the date
of such payment by the Issuing Bank to and including the second Business
Day thereafter equal to the Federal Funds Rate and (ii) thereafter equal to
the Base Rate.
(f) Letter of Credit Advances. The term "Letter of Credit
Advance" is used in this Agreement in accordance with the meanings set
forth in this paragraph 2.04(f). The making of any payment by the Issuing
Bank under a Letter of Credit is sometimes referred to herein as the making
of a Letter of Credit Advance by the Issuing Bank in the amount of such
payment. The making of any payment by a Lender for the account of the
Issuing Bank under Section 2.04(e) on account of an unreimbursed drawing on
a Letter of Credit is sometimes referred to herein as the making of a
Letter of Credit Advance to the applicable Borrower by such Lender. The
making of such a Letter of Credit Advance by a Lender with respect to an
unreimbursed drawing on a Letter of Credit shall reduce, by a like amount,
the outstanding Letter of Credit Advance of the Issuing Bank with respect
to such unreimbursed drawing.
(g) Letter of Credit Reports. The Issuing Bank will
furnish to the Administrative Agent prompt written notice of each issuance
of a Letter of Credit (including the Available Amount and expiration date
thereof), amendment to a Letter of Credit, cancellation of a Letter of
Credit and payment on a Letter of Credit. The Administrative Agent will
furnish (A) to each Lender prior to the tenth Business Day of each month a
written report summarizing issuance and expiration dates of Letters of
Credit issued during the preceding month and payments and reductions in
Available Amount during such month on all Letters of Credit and
29
(B) to each Lender prior to the tenth Business Day of each calendar quarter
a written report setting forth the average daily aggregate Available Amount
during the preceding calendar quarter of all Letters of Credit.
SECTION 2.05. Repayment of Advances. (a) Committed
Advances. Each Borrower shall repay to the Administrative Agent for the
ratable account of the Lenders on the Termination Date the aggregate
outstanding principal amount of the Committed Advances then outstanding.
(b) Account Party's Reimbursement Obligation. (i) Each
Account Party hereby agrees to reimburse the Issuing Bank (by making
payment to the Administrative Agent for the account of the Issuing Bank in
accordance with Section 2.12) in the amount of each payment made by the
Issuing Bank under any Letter of Credit issued for such Account Party's
account, such reimbursement to be made on the date such payment under such
Letter of Credit is made by the Issuing Bank (but not earlier than the date
which is one Business Day after notice of such payment under such Letter of
Credit or of the drawing giving rise to such payment under such Letter of
Credit is given to such Account Party). Such reimbursement obligation shall
be payable without further notice, protest or demand, all of which are
hereby waived, and an action therefor shall immediately accrue. To the
extent such payment by such Account Party is not timely made, such Account
Party hereby agrees to pay to the Administrative Agent, for the respective
accounts of the Issuing Bank and the Lenders which have funded their
respective shares of such amount remaining unpaid by such Account Party, on
demand, interest thereon at the rate then applicable to Base Rate Advances
under Section 2.08. Each Letter of Credit Advance shall be a Base Rate
Advance.
(ii) The obligation of each Account Party to reimburse
the Issuing Bank for any payment made by the Issuing Bank under
any Letter of Credit, and the obligation of each Lender under
Section 2.04(e) with respect thereto, shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement, the applicable Letter of Credit Agreement
and any other applicable agreement or instrument under all
circumstances, including, without limitation, the following
circumstances:
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of Credit or
any other agreement or instrument relating thereto (all of the
foregoing being, collectively, the "L/C Related Documents");
(B) any change in the time, manner or place of payment
of, or in any other term of, all or any of the obligations of any
Borrower or any other Person in respect of any L/C Related
Document or any other amendment or waiver of or any consent to
departure from all or any of the L/C Related Documents;
(C) the existence of any claim, set-off, defense or other
right that any Borrower or any other Person may have at any time
against any beneficiary or any transferee of a Letter of Credit
(or any Persons for which any such beneficiary or any such
transferee may be acting), the Issuing Bank or any other Person,
whether in connection with the transactions contemplated by the
L/C Related Documents or any unrelated transaction;
30
(D) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(E) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not
strictly comply with the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from the Guaranty or any other guarantee, for all or any
of the obligations of any Borrower or any other Person in respect
of the L/C Related Documents; or
(G) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including, without
limitation, any other circumstance that might otherwise constitute
a defense available to, or a discharge of, any Borrower or a
guarantor.
(c) Rescission. If any amount received by the Issuing
Bank on account of any Letter of Credit Advance shall be avoided, rescinded
or otherwise returned or paid over by the Issuing Bank for any reason at
any time, whether before or after the termination of this Agreement (or the
Issuing Bank believes in good faith that such avoidance, rescission, return
or payment is required, whether or not such matter has been adjudicated),
each Lender will (except to the extent a corresponding amount received by
such Lender on account of its Letter of Credit Advance relating to the same
payment on a Letter of Credit has been avoided, rescinded or otherwise
returned or paid over by such Lender), promptly upon notice from the
Administrative Agent or the Issuing Bank, pay over to the Administrative
Agent for the account of the Issuing Bank its Pro Rata Share of such
amount, together with its Pro Rata Share of any interest or penalties
payable with respect thereto.
SECTION 2.06. Termination or Reduction of the WC
Commitments. The Parent may, upon at least three Business Days' notice to
the Administrative Agent, terminate in whole or reduce in part the unused
portion of the WC Commitments; provided, however, that each partial
reduction (i) shall be in an aggregate amount of $10,000,000 or an integral
multiple of $1,000,000 in excess thereof and (ii) shall be made ratably
among the Lenders in accordance with their WC Commitments.
SECTION 2.07. Prepayments. Each Borrower may, upon notice
given not later than 11:00 A.M. (New York City Time) on the Business Day on
which such prepayment is to be made, in the case of Base Rate Advances, or
on the third Business Day prior to the date on which such prepayment is to
be made, in the case of Eurodollar Rate Advances, in each case to the
Administrative Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given such Borrower shall,
prepay the outstanding aggregate principal amount of the Committed Advances
comprising part of the same Committed Borrowing in whole or ratably in
part, together with accrued interest to the date of such prepayment on the
aggregate principal amount prepaid; provided, however, that (x) each
partial prepayment shall be in an aggregate principal amount of $10,000,000
or an integral multiple of
31
$1,000,000 in excess thereof (except that prepayment of any Letter of
Credit Advance may be made in any amount so long as such Letter of Credit
Advance is paid in full or, after giving effect to such prepayment, the
aggregate principal amount of all Letter of Credit Advances is an integral
multiple of $1,000,000) and (y) if any prepayment of a Eurodollar Rate
Advance is made on a date other than the last day of an Interest Period for
such Committed Advance, such Borrower shall also pay any amounts owing
pursuant to Section 9.04(c). All prepayments in respect of Eurodollar Rate
Advances shall be made together with accrued interest to the date of such
prepayment on the principal amount prepaid.
SECTION 2.08. Interest. (a) Scheduled Interest. Each
Borrower shall pay interest on the unpaid principal amount of each Advance
owing to each Lender from the date of such Advance until such principal amount
shall be paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such
Advance is a Base Rate Advance, a rate per annum equal at all
times to the Base Rate in effect from time to time, payable in
arrears quarterly on the last day of each March, June, September
and December during such periods and on the Termination Date.
(ii) Eurodollar Rate Advances. During such periods as
such Advance is a Eurodollar Rate Advance, a rate per annum equal
at all times during each Interest Period for such Advance to the
sum of (A) the Eurodollar Rate for such Interest Period for such
Advance plus (B) the Applicable Margin in effect from time to
time, payable in arrears on the last day of such Interest Period
and, if such Interest Period has a duration of more than three
months, on each day that occurs during such Interest Period every
three months from the first day of such Interest Period and on the
date such Eurodollar Rate Advance shall be Converted or paid in
full.
(iii) Regulation D Compensation. Each Lender that is
subject to reserve requirements of the Board of Governors of the
Federal Reserve System (or any successor) may require the
applicable Borrower to pay, contemporaneously with each payment of
interest on Eurodollar Rate Advances, additional interest on the
related Eurodollar Rate Advances of such Lender at the rate per
annum equal to the excess of (i)(A) the applicable Eurodollar
Rate, divided by (B) one minus the Eurodollar Rate Reserve
Requirement over (ii) the rate specified in clause (i)(A). Any
Lender wishing to require payment of such additional interest
shall so notify such Borrower directly, in which case such
additional interest on the Eurodollar Rate Advances of such Lender
shall be payable to such Lender at the place indicated in such
notice with respect to each Interest Period commencing after the
giving of such notice.
(b) Default Interest. Upon the occurrence and during the
existence of an Event of Default under Section 6.01(a) or 6.01(f) or at the
request of the Required Lenders during the existence of any other Event of
Default, each Borrower shall pay interest on (i) the unpaid principal
amount of each Advance owing to each Lender, payable in arrears on the
dates referred to in clause (a)(i) or (a)(ii) above and at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be
paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to
the fullest extent permitted by law, the amount of any interest, fee or
other amount payable under the Loan Documents that is not paid when due,
from the date such
32
amount shall be due until such amount shall be paid in full, payable in
arrears on the date such amount shall be paid in full and on demand, at a
rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid, in the case of interest, on the Type of Advance on
which such interest has accrued pursuant to clause (a)(i) or (a)(ii) above
and, in all other cases, on Base Rate Advances pursuant to clause (a)(i)
above.
(c) Notice of Interest Period and Interest Rate. Promptly
after receipt of a Notice of Borrowing pursuant to Section 2.02(a), a
notice of Conversion pursuant to Section 2.10 or a notice of selection of
an Interest Period pursuant to the terms of the definition of "Interest
Period", the Administrative Agent shall give notice to the Borrowers and
each Lender of the applicable Interest Period and the applicable interest
rate determined by the Administrative Agent for purposes of clause (a)(i)
or (a)(ii) above.
SECTION 2.09. Fees. (a) Facility Fee. The Borrowers agree
to pay to the Administrative Agent for the account of the Lenders a facility
fee, from the Effective Date until the Termination Date, payable in arrears
quarterly on the last day of each March, June, September and December,
commencing on June 30, 2000, and on the Termination Date, at the rate of the
Applicable Facility Fee Percentage on the average daily WC Commitment of each
Lender during such quarter (whether used or unused); provided, however, that no
facility fee shall accrue on the Unused WC Commitment of a Defaulting Lender so
long as such Lender shall be a Defaulting Lender.
(b) Agents' Fees. Each Borrower agrees that it shall
pay to each Agent for its own account such fees as may from time to time be
agreed between such Borrower and such Agent.
(c) Letter of Credit Fees, Etc. (i) Each Borrower agrees
that it shall pay to the Administrative Agent for the account of each
Lender a commission, payable in arrears quarterly on the last day of each
calendar quarter commencing June 30, 2000, and on the earliest to occur of
the full drawing, expiration, termination or cancellation of any Letter of
Credit and on the Termination Date, on such Lender's Pro Rata Share of the
average daily aggregate Available Amount during such quarter of all Letters
of Credit issued for the account of such Borrower outstanding from time to
time at the rate equal to the then Applicable Margin.
(ii) Each Borrower agrees that it shall pay to the
Issuing Bank, for its own account, such commissions, issuance fees,
fronting fees, transfer fees and other fees and charges in connection with
the issuance or administration of each Letter of Credit issued for the
account of such Borrower as such Borrower and the Issuing Bank shall agree
in a side letter.
SECTION 2.10. Conversion of Advances. (a) Optional. Each
Borrower may on any Business Day, upon notice given to the Administrative
Agent not later than 11:00 A.M. (New York City time) on the third Business
Day prior to the date of the proposed Conversion and subject to the
provisions of Section 2.11, Convert all or any portion of the Committed
Advances of one Type comprising the same Committed Borrowing into Committed
Advances of the other Type; provided, however, that any Conversion of Base
Rate Advances into Eurodollar Rate Advances shall be in an amount not less
than the minimum amount specified in Section 2.01 for a Committed
Borrowing, no Conversion of any Committed Advances shall
33
result in more separate Committed Borrowings than permitted under Section
2.02(b) and each Conversion of Committed Advances comprising part of the
same Committed Borrowing shall be made ratably among the Lenders in
accordance with their respective WC Commitments. Each such notice of
Conversion shall, within the restrictions specified above, specify (i) the
date of such Conversion, (ii) the Committed Advances to be Converted and
(iii) if such Conversion is into Eurodollar Rate Advances, the duration of
the initial Interest Period for such Committed Advances. Each notice of
Conversion shall be irrevocable and binding on such Borrower.
(b) Mandatory. (i) On the date on which the aggregate
unpaid principal amount of Eurodollar Rate Advances comprising any
Committed Borrowing shall be reduced, by payment or prepayment or
otherwise, to less than $10,000,000, such Committed Advances shall
automatically Convert into Base Rate Advances at the end of the applicable
Interest Period.
(ii) If the Borrowers shall fail to select the duration
of any Interest Period for any Eurodollar Rate Advances in accordance with
the provisions contained in the definition of "Interest Period" in Section
1.01, the Administrative Agent will forthwith so notify the Borrowers and
the Lenders, whereupon each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance.
(iii) Upon the occurrence and during the existence of an
Event of Default under Section 6.01(a) or 6.01(f) or at the request of the
Required Lenders during the existence of any other Event of Default, (x)
each Eurodollar Rate Advance will automatically, on the last day of the
then existing Interest Period therefor, Convert into a Base Rate Advance
and (y) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended.
SECTION 2.11. Increased Costs, Etc. (a) If, due to either
(i) the introduction of or any change in or in the interpretation of, in
each case after the date hereof, any law or regulation or (ii) the
compliance with any guideline or request issued after the date hereof from
any central bank or other governmental authority (whether or not having the
force of law), there shall be any increase in the cost to any Lender of
agreeing to make or of making, funding or maintaining Eurodollar Rate
Advances or LIBO Rate Advances or of agreeing to issue or of issuing or
maintaining or participating in Letters of Credit (excluding, for purposes
of this Section 2.11, any such increased costs resulting from (x) Taxes or
Other Taxes (as to which Section 2.13 shall govern) and (y) changes in the
basis of taxation of overall net income or overall gross income by the
United States or by the foreign jurisdiction or state under the laws of
which such Lender is organized or has its Applicable Lending Office or any
political subdivision thereof), then the Borrowers agree to pay, from time
to time, within five days after demand by such Lender (with a copy of such
demand to the Administrative Agent), which demand shall include a statement
of the basis for such demand and a calculation in reasonable detail of the
amount demanded, to the Administrative Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such increased
cost. A certificate as to the amount of such increased cost, submitted to
the Borrowers by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any
change in or in the interpretation of any law or regulation, in each case
after the date hereof, or (ii) the compliance
34
with any guideline or request issued after the date hereof from any central
bank or other governmental authority (whether or not having the force of
law), there shall be any increase in the amount of capital required or
expected to be maintained by any Lender or any corporation controlling such
Lender as a result of or based upon the existence of such Lender's
commitment to lend hereunder and other commitments of such type, then,
within five days after demand by such Lender or such corporation (with a
copy of such demand to the Administrative Agent), which demand shall
include a statement of the basis for such demand and a calculation in
reasonable detail of the amount demanded, the Borrowers agree to pay to the
Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the
existence of such Lender's commitment to lend or to issue or participate in
Letters of Credit hereunder or to the issuance or maintenance of or
participation in any Letters of Credit. A certificate as to such amounts
submitted to the Borrowers by such Lender shall be conclusive and binding
for all purposes, absent manifest error.
(c) If, prior to the first day of any Interest Period
with respect to any Eurodollar Rate Advances, the Required Lenders notify
the Administrative Agent that the Eurodollar Rate for such Interest Period
for such Committed Advances will not adequately reflect the cost to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances
for such Interest Period, the Administrative Agent shall forthwith so
notify the Borrower and the Lenders, whereupon each such Eurodollar Rate
Advance will (i) in the case of requested new Eurodollar Rate Advances, be
made as or remain Base Rate Advances or as a Eurodollar Rate Advance with a
different Interest Period as to which the Required Lenders have not given
such a notice and (ii) in the case of existing Eurodollar Rate Advances,
automatically, on the last day of the then existing Interest Period
therefor, Convert into Base Rate Advances or be continued as a Eurodollar
Rate Advance with a different Interest Period as to which the Required
Lenders have not given such notice.
(d) Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation
of any law or regulation, in each case after the date hereof, shall make it
unlawful, or any central bank or other governmental authority shall assert
that it is unlawful, for any Lender or its Eurodollar Lending Office to
perform its obligations hereunder to make Eurodollar Rate Advances or LIBO
Rate Advances or to continue to fund or maintain Eurodollar Rate Advances
or LIBO Rate Advances hereunder, then, on notice thereof and demand
therefor by such Lender to the Borrowers through the Administrative Agent,
(i) each Eurodollar Rate Advance or LIBO Rate Advance, as the case may be,
of such Lender will automatically, upon such demand, Convert into a Base
Rate Advance or an Advance that bears interest at the rate set forth in
Section 2.08(a)(i), as the case may be, and (ii) the obligation of such
Lender to make Eurodollar Rate Advances or LIBO Rate Advances or to Convert
Committed Advances into Eurodollar Rate Advances shall be suspended until
the Administrative Agent shall notify the Borrowers that such Lender has
determined that the circumstances causing such suspension no longer exist
(it being understood that such Lender shall make and maintain Base Rate
Advances in the amount that would otherwise be made and maintained by such
Lender as Eurodollar Advances absent the circumstances described above).
35
(e) Each Lender shall promptly notify the Borrowers and
the Administrative Agent of any event of which it has actual knowledge
which will result in, and will use reasonable commercial efforts available
to it (and not, in such Lender's good faith judgment, otherwise
disadvantageous to such Lender) to mitigate or avoid, (i) any obligation by
the Borrowers to pay any amount pursuant to subsection (a) or (b) above or
pursuant to Section 2.13 or (ii) the occurrence of any circumstances of the
nature described in subsection (c) or (d) above (and, if any Lender has
given notice of any event described in clause (i) or (ii) above and
thereafter such event ceases to exist, such Lender shall promptly so notify
the Borrowers and the Administrative Agent). Without limiting the
foregoing, each Lender will designate a different Applicable Lending Office
if such designation will avoid (or reduce the cost to the Borrowers of) any
event described in clause (i) or (ii) of the preceding sentence and such
designation will not, in such Lender's good faith judgment, be otherwise
disadvantageous to such Lender.
(f) Notwithstanding the provisions of subsections (a) and
(b) above or Section 2.13 (and without limiting subsection (e) above), if
any Lender fails to notify the Borrowers of any event or circumstance that
will entitle such Lender to compensation pursuant subsection (a) or (b)
above or Section 2.13 within 120 days after such Lender obtains actual
knowledge of such event or circumstance, then such Lender shall not be
entitled to compensation, from the Borrowers for any amount arising prior
to the date which is 120 days before the date on which such Lender notifies
the Borrowers of such event or circumstance.
SECTION 2.12. Payments and Computations. (a) The
applicable Borrower shall make each payment hereunder and under the
applicable Notes, irrespective of any right of counterclaim or set-off
(except as otherwise provided in Section 2.16), not later than 12:00 noon
(New York City time) on the day when due in U.S. dollars to the
Administrative Agent at the Administrative Agent's Account in same day
funds, with payments being received by the Administrative Agent after such
time being deemed to have been received on the next succeeding Business
Day. The Administrative Agent will promptly thereafter cause like funds to
be distributed (i) if such payment by such Borrower is in respect of
principal, interest, facility fees or any other amount then payable
hereunder and under the Notes to more than one Lender, to such Lenders for
the account of their respective Applicable Lending Offices ratably in
accordance with the amounts of such respective amount then payable to such
Lenders and (ii) if such payment by such Borrower is in respect of any
amount then payable hereunder to one Lender, to such Lender for the account
of its Applicable Lending Office, in each case to be applied in accordance
with the terms of this Agreement.
(b) Each Borrower hereby authorizes each Lender, if an
Event of Default under Section 6.01(a) has occurred and is continuing, to
charge from time to time against any or all of such Borrower's accounts
with such Lender any amount owing under this Agreement that resulted in
such Event of Default.
(c) All computations of interest on Base Rate Advances
(and any other amount payable by reference to the Base Rate) when the Base
Rate is determined by reference to MGT's prime rate shall be made by the
Administrative Agent on the basis of a year of 365 or, if applicable, 366
days; all other computations of interest, fees and Letter of Credit
commissions shall be made by the Administrative Agent on the basis of a
year of 360 days. All such computations shall be made for the actual number
of days (including the first day but excluding
36
the last day) occurring in the period for which such interest, fees or
commissions are payable. Each determination by the Administrative Agent of
an interest rate, fee or commission hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes
shall be stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of
interest or fee, as the case may be; provided, however, that, if such
extension would cause payment of interest on or principal of Eurodollar
Rate Advances or LIBO Rate Advances to be made in the next following
calendar month, such payment shall be made on the next preceding Business
Day.
(e) Unless the Administrative Agent shall have received
notice from any Borrower required to make any payment prior to the date on
which any payment is due to any Lender hereunder that such Borrower will
not make such payment in full, the Administrative Agent may assume that
such Borrower has made such payment in full to the Administrative Agent on
such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each such Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent such
Borrower shall not have so made such payment in full to the Administrative
Agent, each such Lender shall repay to the Administrative Agent forthwith
on demand such amount distributed to such Lender together with interest
thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.
SECTION 2.13. Taxes. (a) Any and all payments by any Loan
Party hereunder or under the Notes shall be made, in accordance with
Section 2.12, free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the
case of each Lender and each Agent, taxes that are imposed on its overall
net income by the United States and taxes that are imposed on its overall
net income (and franchise taxes imposed in lieu thereof) by the state or
foreign jurisdiction under the laws of which such Lender or such Agent, as
the case may be, is organized or any political subdivision thereof and, in
the case of each Lender, taxes that are imposed on its overall net income
(and franchise taxes imposed in lieu thereof) by the state or foreign
jurisdiction of such Lender's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities in respect of payments
hereunder or under the Notes being herein referred to as "Taxes"). If any
Loan Party shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note to any Lender or any Agent,
(i) the sum payable by such Loan Party shall be increased as may be
necessary so that after such Loan Party and the Administrative Agent have
made all required deductions (including deductions applicable to additional
sums payable under this Section 2.13) such Lender or such Agent, as the
case may be, receives an amount equal to the sum it would have received had
no such deductions been made, (ii) such Loan Party shall make all such
deductions and (iii) such Loan Party shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law.
37
(b) In addition, each Loan Party shall pay any present or
future stamp, documentary, excise, property or similar taxes, charges or
levies that arise from any payment made hereunder or under the Notes or
from the execution, delivery or registration of, performance under, or
otherwise with respect to, this Agreement or the Notes (herein referred to
as "Other Taxes").
(c) Each Loan Party shall indemnify each Lender and each
Agent for and hold them harmless against the full amount of Taxes and Other
Taxes, and for the full amount of taxes of any kind imposed by any
jurisdiction on amounts payable under this Section 2.13, imposed on or paid
by such Lender or such Agent (as the case may be) and any liability
(including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto. This indemnification payment shall be
made within 30 days from the date such Lender or such Agent (as the case
may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of
Taxes, each Loan Party shall furnish to the Administrative Agent, at its
address referred to in Section 9.02, the original or a certified copy of a
receipt evidencing such payment. In the case of any payment hereunder or
under the Notes by or on behalf of a Loan Party through an account or
branch outside the United States or by or on behalf of a Loan Party by a
payor that is not a United States person, if such Loan Party determines
that no Taxes are payable in respect thereof, such Loan Party shall
furnish, or shall cause such payor to furnish, to the Administrative Agent,
at such address, an opinion of counsel acceptable to the Administrative
Agent stating that such payment is exempt from Taxes. For purposes of
subsections (d) and (e) of this Section 2.13, the terms "United States" and
"United States person" shall have the meanings specified in Section
7701(a)(9) and 7701(a)(10) of the Internal Revenue Code, respectively.
(e) Each Lender organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of
its execution and delivery of this Agreement in the case of each Initial
Lender or the initial Issuing Bank, as the case may be, and on the date on
which it becomes a Lender in the case of each other Lender, and from time
to time thereafter as requested in writing by the Parent (but only so long
thereafter as such Lender remains lawfully able to do so), provide each of
the Administrative Agent and the Parent with two original Internal Revenue
Service forms W-8BEN or W-8ECI or (in the case of a Lender that has
certified in writing to the Administrative Agent that it is not a "bank" as
defined in Section 881(c)(3)(A) of the Internal Revenue Code) form W-8
(and, if such Lender delivers a form W-8, a certificate representing that
such Lender is not a "bank" for purposes of Section 881(c)(3)(A) of the
Internal Revenue Code, is not a 10-percent shareholder (within the meaning
of Section 871(h)(3)(B) of the Internal Revenue Code) of the Parent and is
not a controlled foreign corporation related to the Parent (within the
meaning of Section 864(d)(4) of the Internal Revenue Code)), as
appropriate, or any successor or other form prescribed by the Internal
Revenue Service, certifying that such Lender is exempt from or entitled to
a reduced rate of United States withholding tax on payments pursuant to
this Agreement or the Notes or, in the case of a Lender providing a form
W-8, certifying that such Lender is a foreign corporation, partnership,
estate or trust. If the forms provided by a Lender at the time such Lender
first becomes a party to this Agreement indicate a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall
be considered excluded from Taxes unless and until such Lender provides the
appropriate forms certifying that a lesser rate applies, whereupon
38
withholding tax at such lesser rate only shall be considered excluded from
Taxes for periods governed by such forms; provided, however, that if, at
the effective date of the Assignment and Acceptance pursuant to which a
Lender becomes a party to this Agreement, the Lender assignor was entitled
to payments under subsection (a) of this Section 2.13 in respect of United
States withholding tax with respect to interest paid at such date, then, to
such extent, the term Taxes shall include (in addition to withholding taxes
that may be imposed in the future or other amounts otherwise includible in
Taxes) United States withholding tax, if any, applicable with respect to
the Lender assignee on such date. If any form or document referred to in
this subsection (e) requires the disclosure of information, other than
information necessary to compute the tax payable and information required
on the date hereof by Internal Revenue Service form W-8BEN,W-8ECI or W-8
(and the related certificate described above), that the Lender reasonably
considers to be confidential, the Lender shall give notice thereof to the
Parent and shall not be obligated to include in such form or document such
confidential information.
(f) For any period with respect to which a Lender which
may lawfully do so has failed to provide the Parent with the appropriate
form described in subsection (e) above (other than if such failure is due
to a change in law occurring after the date on which a form originally was
required to be provided or if such form otherwise is not required under
subsection (e) above), such Lender shall not be entitled to indemnification
under subsection (a) or (c) of this Section 2.13 with respect to Taxes
imposed by the United States by reason of such failure; provided, however,
that should a Lender become subject to Taxes because of its failure to
deliver a form required hereunder, the Parent shall take such steps as such
Lender shall reasonably request to assist such Lender to recover such
Taxes.
(g) Each Lender represents and warrants to the Borrowers
that, as of the date such Lender becomes a party to this Agreement, such
Lender is entitled to receive payments hereunder from the Borrowers without
deduction or withholding for or on account of any Taxes.
SECTION 2.14. Sharing of Payments, Etc. If any Lender
shall obtain at any time any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise, other than as a
result of an assignment pursuant to Section 9.07) (a) on account of
obligations due and payable to such Lender hereunder and under the Notes at
such time in excess of its ratable share (according to the proportion of
(i) the amount of such obligations due and payable to such Lender at such
time to (ii) the aggregate amount of the obligations due and payable to all
Lenders hereunder and under the Notes at such time) of payments on account
of the obligations due and payable to all Lenders hereunder and under the
Notes at such time obtained by all the Lenders at such time or (b) on
account of obligations owing (but not due and payable) to such Lender
hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such obligations owing to
such Lender at such time to (ii) the aggregate amount of the obligations
owing (but not due and payable) to all Lenders hereunder and under the
Notes at such time) of payments on account of the obligations owing (but
not due and payable) to all Lenders hereunder and under the Notes at such
time obtained by all of the Lenders at such time, such Lender shall
forthwith purchase from the other Lenders such interests or participating
interests in the obligations due and payable or owing to them, as the case
may be, as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each
39
other Lender shall be rescinded and such other Lender shall repay to the
purchasing Lender the purchase price to the extent of such Lender's ratable
share (according to the proportion of (i) the purchase price paid to such
Lender to (ii) the aggregate purchase price paid to all Lenders) of such
recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such other Lender's
required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. Each
Borrower agrees that any Lender so purchasing an interest or participating
interest from another Lender pursuant to this Section 2.14 may, to the
fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such interest or
participating interest, as the case may be, as fully as if such Lender were
the direct creditor of such Borrower in the amount of such interest or
participating interest, as the case may be.
SECTION 2.15. Use of Proceeds. The proceeds of the
Advances shall be available (and each Borrower agrees that it shall use
such proceeds) to provide working capital, and for other general corporate
purposes of the Borrowers and their respective Subsidiaries.
SECTION 2.16. Defaulting Lenders. (a) In the event that,
at any one time, (i) any Lender shall be a Defaulting Lender, (ii) such
Defaulting Lender shall owe a Defaulted Advance to any Borrower and (iii)
such Borrower shall be required to make any payment hereunder or under any
other Loan Document to or for the account of such Defaulting Lender, then
such Borrower may, to the fullest extent permitted by applicable law, set
off and otherwise apply the obligation of such Borrower to make such
payment to or for the account of such Defaulting Lender against the
obligation of such Defaulting Lender to make such Defaulted Advance. In the
event that, on any date, any Borrower shall so set off and otherwise apply
its obligation to make any such payment against the obligation of such
Defaulting Lender to make any such Defaulted Advance on or prior to such
date, the amount so set off and otherwise applied by such Borrower shall
constitute for all purposes of this Agreement and the other Loan Documents
an Advance by such Defaulting Lender made on the date of such setoff. Such
Committed Advance shall be considered, for all purposes of this Agreement,
to comprise part of the Committed Borrowing in connection with which such
Defaulted Advance was originally required to have been made pursuant to
Section 2.01, even if the other Committed Advances comprising such
Borrowing shall be Eurodollar Rate Advances on the date such Committed
Advance is deemed to be made pursuant to this subsection (a). Each Borrower
shall notify the Administrative Agent at any time such Borrower exercises
its right of set-off pursuant to this subsection (a) and shall set forth in
such notice (A) the name of the Defaulting Lender and the Defaulted Advance
required to be made by such Defaulting Lender and (B) the amount set off
and otherwise applied in respect of such Defaulted Advance pursuant to this
subsection (a). Any portion of such payment otherwise required to be made
by such Borrower to or for the account of such Defaulting Lender which is
paid by such Borrower, after giving effect to the amount set off and
otherwise applied by such Borrower pursuant to this subsection (a), shall
be applied by the Administrative Agent as specified in subsection (b) or
(c) of this Section 2.16.
(b) In the event that, at any one time, (i) any Lender
shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a
Defaulted Amount to any Agent or any of the other Lenders and (iii) any
Borrower shall make any payment hereunder or under any other Loan Document
to the Administrative Agent for the account of such Defaulting Lender, then
the
40
Administrative Agent may, on its behalf or on behalf of such other Agents
or such other Lenders and to the fullest extent permitted by applicable
law, apply at such time the amount so paid by such Borrower to or for the
account of such Defaulting Lender to the payment of each such Defaulted
Amount to the extent required to pay such Defaulted Amount. In the event
that the Administrative Agent shall so apply any such amount to the payment
of any such Defaulted Amount on any date, the amount so applied by the
Administrative Agent shall constitute for all purposes of this Agreement
and the other Loan Documents payment, to such extent, of such Defaulted
Amount on such date. Any such amount so applied by the Administrative Agent
shall be retained by the Administrative Agent or distributed by the
Administrative Agent to such other Agents or such other Lenders, ratably in
accordance with the respective portions of such Defaulted Amounts payable
at such time to the Administrative Agent, such other Agents and such other
Lenders and, if the amount of such payment made by such Borrower shall at
such time be insufficient to pay all Defaulted Amounts owing at such time
to the Administrative Agent, such other Agents and such other Lenders, in
the following order of priority:
(i) first, to the Agents for any Defaulted Amounts then
owing to the Agents, ratably in accordance with such respective
Defaulted Amounts then owing to the Agents;
(ii) second, to the Issuing Bank for any amount then due
and payable to it, in its capacity as such, by such Defaulting
Lender, ratably in accordance with such amounts then due and
payable to such Issuing Bank; and
(iii) third, to any other Lenders for any Defaulted
Amounts then owing to such other Lenders, ratably in accordance
with such respective Defaulted Amounts then owing to such other
Lenders.
Any portion of such amount paid by such Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by
the Administrative Agent pursuant to this subsection (b), shall be applied
by the Administrative Agent as specified in subsection (c) of this Section
2.16.
(c) In the event that, at any one time, (i) any Lender
shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a
Defaulted Advance or a Defaulted Amount and (iii) any Borrower, any Agent
or any other Lender shall be required to pay or distribute any amount
hereunder or under any other Loan Document to or for the account of such
Defaulting Lender, then such Borrower or such Agent or such other Lender
shall pay such amount to the Administrative Agent to be held by the
Administrative Agent, to the fullest extent permitted by applicable law, in
escrow or the Administrative Agent shall, to the fullest extent permitted
by applicable law, hold in escrow such amount otherwise held by it. Any
funds held by the Administrative Agent in escrow under this subsection (c)
shall be deposited by the Administrative Agent in an account with MGT, in
the name and under the control of the Administrative Agent, but subject to
the provisions of this subsection (c). The terms applicable to such
account, including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be MGT's standard terms
applicable to escrow accounts maintained with it. Any interest credited to
such account from time to time shall be held by the Administrative Agent in
escrow under, and applied by the Administrative Agent from time to time in
accordance with the provisions of, this subsection (c). The Administrative
Agent shall,
41
to the fullest extent permitted by applicable law, apply all funds so held
in escrow from time to time to the extent necessary to make any Advances
required to be made by such Defaulting Lender and to pay any amount payable
by such Defaulting Lender hereunder and under the other Loan Documents to
the Administrative Agent or any other Lender, as and when such Advances or
amounts are required to be made or paid and, if the amount so held in
escrow shall at any time be insufficient to make and pay all such Advances
and amounts required to be made or paid at such time, in the following
order of priority:
(i) first, to the Agents for any amounts then due and
payable by such Defaulting Lender to the Agents hereunder, ratably
in accordance with such amounts then due and payable to the
Agents;
(ii) second, to the Issuing Bank for any amount then due
and payable to it, in its capacity as such, by such Defaulting
Lender, ratably in accordance with such amounts then due and
payable to such Issuing Bank;
(iii) third, to any other Lenders for any amount then due
and payable by such Defaulting Lender to such other Lenders
hereunder, ratably in accordance with such respective amounts then
due and payable to such other Lenders; and
(iv) fourth, to such Borrower for any Advance then
required to be made by such Defaulting Lender pursuant to the
Commitment of such Defaulting Lender.
In the event that any Lender that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender shall be
distributed by the Administrative Agent to such Lender and applied by such
Lender to the obligations owing to such Lender at such time under this
Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender
under this Section 2.16 are in addition to other rights and remedies that
such Borrower may have against such Defaulting Lender with respect to any
Defaulted Advance and that any Agent or any Lender may have against such
Defaulting Lender with respect to any Defaulted Amount.
SECTION 2.17. Replacement of Affected Lender. At any time
any Lender is an Affected Lender, the Borrowers may replace such Affected
Lender as a party to this Agreement with one or more other Lenders and/or
Assignees, and upon notice from the Borrowers such Affected Lender shall
assign, and without recourse or warranty, its WC Commitment, its Committed
Advances, its Committed Note, its Letter of Credit Advances, its
obligations to fund Letter of Credit payments, its participation in, and
its rights and obligations with respect to, Letters of Credit, and all of
its other rights and obligations hereunder to such other Lenders and/or
Assignees for a purchase price equal to the sum of the principal amount of
the Committed Advances so assigned, all accrued and unpaid interest
thereon, such Affected Lender's ratable share of all accrued and unpaid
fees payable pursuant to Section 2.09, any amounts payable pursuant to
Section 9.04(c) as a result of such Affected Lender receiving payment of
any Eurodollar Rate Advance prior to the end of an Interest Period therefor
(assuming for such
42
purpose that receipt of payment pursuant to such Assignment and Acceptance
constitutes payment of such Eurodollar Rate Advances) and all other
obligations owed to such Affected Lender hereunder.
SECTION 2.18. Certain Provisions Relating to the Issuing
Bank and Letters of Credit.
(a) Letter of Credit Agreements. The representations,
warranties and covenants by the Borrowers under, and the rights and
remedies of the Issuing Bank under, any Letter of Credit Agreement relating
to any Letter of Credit are in addition to, and not in limitation or
derogation of, representations, warranties and covenants by the Borrowers
under, and rights and remedies of the Issuing Bank and the Lenders under,
this Agreement and applicable law. Each Account Party acknowledges and
agrees that all rights of the Issuing Bank under any Letter of Credit
Agreement shall inure to the benefit of each Lender to the extent of its
Letter of Credit Participating Interest Commitment as fully as if such
Lender was a party to such Letter of Credit Agreement. In the event of any
inconsistency between the terms of this Agreement and any Letter of Credit
Agreement, this Agreement shall prevail.
(b) Certain Provisions. The Issuing Bank shall have no
duties or responsibilities to any Agent or any Lender except those
expressly set forth in this Agreement, and no implied duties or
responsibilities on the part of the Issuing Bank shall be read into this
Agreement or shall otherwise exist. The duties and responsibilities of the
Issuing Bank to the Lenders and the Agents under this Agreement and the
other Loan Documents shall be mechanical and administrative in nature, and
the Issuing Bank shall not have a fiduciary relationship in respect of any
Agent, any Lender or any other Person. The Issuing Bank shall not be liable
for any action taken or omitted to be taken by it under or in connection
with this Agreement or any Loan Document or Letter of Credit, except as
specifically set forth in Section 9.09. The Issuing Bank shall not be under
any obligation to ascertain, inquire or give any notice to any Agent or any
Lender relating to (i) the performance or observance of any of the terms or
conditions of this Agreement or any other Loan Document on the part of any
Borrower, (ii) the business, operations, condition (financial or otherwise)
or prospects of the Borrowers or any other Person, or (iii) the existence
of any Default. The Issuing Bank shall not be under any obligation, either
initially or on a continuing basis, to provide any Agent or any Lender with
any notices, reports or information of any nature, whether in its
possession presently or hereafter, except for such notices, reports and
other information expressly required by this Agreement to be so furnished.
The Issuing Bank shall not be responsible for the execution, delivery,
effectiveness, enforceability, genuineness, validity or adequacy of this
Agreement or any Loan Document.
(c) Administration. The Issuing Bank may rely upon any
notice or other communication of any nature (written or oral, including but
not limited to telephone conversations, whether or not such notice or other
communication is made in a manner permitted or required by this Agreement
or any other Loan Document) purportedly made by or on behalf of the proper
party or parties, and the Issuing Bank shall not have any duty to verify
the identity or authority of any Person giving such notice or other
communication. The Issuing Bank may consult with legal counsel (including,
without limitation, in-house counsel for the Issuing Bank or in-house or
other counsel for the Borrowers), independent public accountants and any
other
43
experts selected by it from time to time, and the Issuing Bank shall not be
liable for any action taken or omitted to be taken in good faith in
accordance with the advice of such counsel, accountants or experts.
Whenever the Issuing Bank shall deem it necessary or desirable that a
matter be proved or established with respect to any Borrower, Agent or
Lender, such matter may be established by a certificate of such Borrower,
Agent or Lender, as the case may be, and the Issuing Bank may conclusively
rely upon such certificate. The Issuing Bank shall not be deemed to have
any knowledge or notice of the occurrence of any Default unless the Issuing
Bank has received notice from a Lender, an Agent or a Borrower referring to
this Agreement, describing such Default, and stating that such notice is a
"notice of default".
(d) Indemnification of Issuing Bank by Lenders. Each
Lender hereby severally agrees to reimburse and indemnify the Issuing Bank
and each of its directors, officers, employees and agents (to the extent
not reimbursed by the Borrowers and without limitation of the obligations
of the Borrowers to do so), in accordance with its Pro Rata Share, from and
against any and all amounts, losses, liabilities, claims, damages,
expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements of any kind or nature (including, without limitation, the
reasonable fees and disbursements of counsel (other than in-house counsel)
for the Issuing Bank or such other Person in connection with any
investigative, administrative or judicial proceeding commenced or
threatened, whether or not the Issuing Bank or such other Person shall be
designated a party thereto) that may at any time be imposed on, incurred by
or asserted against the Issuing Bank, in its capacity as such, or such
other Person, as a result of, or arising out of, or in any way related to
or by reason of, this Agreement, any other Loan Document or any Letter of
Credit, any transaction from time to time contemplated hereby or thereby,
or any transaction financed in whole or in part or directly or indirectly
with the proceeds of any Letter of Credit, provided, that no Lender shall
be liable for any portion of such amounts, losses, liabilities, claims,
damages, expenses, obligations, penalties, actions, judgments, suits, costs
or disbursements to the extent resulting from the gross negligence or
willful misconduct of the Issuing Bank or such other Person, as finally
determined by a court of competent jurisdiction.
(e) Issuing Bank in its Individual Capacity. With respect
to its Commitments and the obligations owing to it, the Issuing Bank shall
have the same rights and powers under this Agreement and each other Loan
Document as any other Lender and may exercise the same as though it were
not the Issuing Bank, and the term "Lenders" and like terms shall include
the Issuing Bank in its individual capacity as such. The Issuing Bank and
its affiliates may, without liability to account to any Person, make loans
to, accept deposits from, acquire debt or equity interests in, act as
trustee under indentures of, act as agent under other credit facilities
for, and engage in any other business with, any Borrower and any
stockholder, subsidiary or affiliate of any Borrower, as though the Issuing
Bank were not the Issuing Bank hereunder.
SECTION 2.19. Downgrade Event with Respect to a Lender.
(a) If a Downgrade Event shall occur with respect to (i) any Downgraded
Lender or (ii) any other Lender and, as a result thereof, such other Lender
becomes a Downgraded Lender, then the Issuing Bank may, by notice to such
Downgraded Lender, the Administrative Agent and the Parent within 45 days
after such Downgrade Event (any such notice, a "Downgrade Notice"), request
that the Borrowers use reasonable efforts to replace such Lender as a party
to this Agreement pursuant to Section 2.17. If such Lender is not so
replaced within 45 days after receipt by the Borrowers of such Downgrade
Notice, then: (x) if no Default exists and such
44
Downgraded Lender has not exercised its right to remain a Lender hereunder
pursuant to clause (y) below, the following shall occur concurrently:
(A) the Committed Facility shall be reduced by the
amount of the WC Commitment of such Downgraded Lender,
(B) the Borrowers shall prepay all amounts owed to such
Downgraded Lender hereunder or in connection herewith (including
any amount payable pursuant to Section 9.04(c) as a result of such
Downgraded Lender receiving payment of any Eurodollar Rate Advance
prior to the end of an Interest Period therefor),
(C) if, upon the reduction of the Committed Facility
under clause (A) above and the payment under clause (B) above, the
sum of the principal amount of all Advances plus the Available
Amount of all Letters of Credit (valuing the Available Amount of,
and Letter of Credit Advances of the Issuing Bank in respect of,
any Non-Dollar Letter of Credit at the Dollar Equivalent thereof
as of the time of such calculation) would exceed the amount of the
Committed Facility, then the Borrowers will immediately eliminate
such excess by prepaying Committed Advances and/or causing the
Available Amount of one or more Letters of Credit to be reduced,
and
(D) upon completion of the events described in clauses
(A), (B) and (C) above, such Downgraded Lender shall cease to be a
party to this Agreement; provided that the provisions of Sections
2.11, 2.13 and 9.04 of this Agreement shall continue to inure to
the benefit of each such Downgraded Lender.
or (y) if a Default exists or, not later than 30 days after receipt of such
Downgrade Notice, such Downgraded Lender notifies the Borrowers, the
Issuing Bank and the Administrative Agent that such Downgraded Lender
elects to provide (in a manner reasonably satisfactory to the Issuing Bank)
cash collateral to the Issuing Bank for (or if such Downgraded Lender is
unable, without regulatory approval, to provide cash collateral, a letter
of credit reasonably satisfactory to the Issuing Bank covering) its
contingent obligations to reimburse the Issuing Bank for any payment under
any Letter of Credit as provided in Section 2.04(e) (its "LC Participation
Obligations"), such Downgraded Lender shall be obligated to (and each
Lender agrees that in such circumstances it will) deliver to the Issuing
Bank (I) immediately, cash collateral (or, as aforesaid, a letter of
credit) in an amount equal to its LC Participation Obligations and (II)
from time to time thereafter (so long as it is a Downgraded Lender), cash
collateral (or, as aforesaid, a letter of credit) sufficient to cover any
increase in its LC Participation Obligations as a result of any proposed
issuance of or increase in a Letter of Credit. Any funds provided by a
Downgraded Lender for such purpose shall be maintained in a segregated
deposit account in the name of the Issuing Bank at the Issuing Bank's
principal office in the United States (a "Downgrade Account"). The funds so
deposited in any Downgrade Account shall be used only in accordance with
the following provisions of this Section 2.19.
(b) If any Downgraded Lender shall be required to fund
its participation in a payment under a Letter of Credit pursuant to Section
2.04(e), then the Issuing Bank shall apply the funds deposited in the
applicable Downgrade Account by such Downgraded Lender to fund such
participation. The deposit of funds in a Downgrade Account by any
Downgraded Lender
45
shall not constitute a Letter of Credit Advance (and the Downgraded Lender
shall not be entitled to interest on such funds except as provided in
clause (c) below) unless and until (and then only to the extent that) such
funds are used by the Issuing Bank to fund the participation of such
Downgraded Lender pursuant to the first sentence of this clause (b).
(c) Funds in a Downgrade Account shall be invested in
such investments as may be agreed between the Issuing Bank and the
applicable Downgraded Lender, and the income from such investments shall be
distributed to such Downgraded Lender from time to time (but not less often
than monthly) as agreed between the Issuing Bank and such Downgraded
Lender. The Issuing Bank will (i) from time to time, upon request by a
Downgraded Lender, release to such Downgraded Lender any amount on deposit
in the applicable Downgrade Account in excess of the LC Participation
Obligations of such Downgraded Lender and (ii) upon the earliest to occur
of (A) the effective date of any replacement of such Downgraded Lender as a
party hereto pursuant to an Assignment and Acceptance, (B) the termination
of such Downgraded Lender's WC Commitment pursuant to clause (a) or (C) the
first Letter of Credit Business Day after receipt by the Issuing Bank of
evidence (reasonably satisfactory to the Issuing Bank) that such Lender is
no longer a Downgraded Lender, release to such Lender all amounts on
deposit in the applicable Downgrade Account.
(d) At any time any Downgraded Lender is required to
maintain cash collateral with the Issuing Bank pursuant to this Section
2.19, the Issuing Bank shall have no obligation to issue or increase any
Letter of Credit unless such Downgraded Lender has provided sufficient
funds as cash collateral to the Issuing Bank to cover all LC Participation
Obligations of such Downgraded Lender (including in respect of the Letter
of Credit to be issued or increased).
SECTION 2.20. Downgrade Event or Other Event with Respect
to the Issuing Bank. At any time that the Issuing Bank is a Downgraded
Lender or at such other times as the Issuing Bank and the Borrowers may
agree, the Borrowers may, upon not less than three Letter of Credit
Business Days' notice to the Issuing Bank (in this Section sometimes
referred to as the "Old Issuing Bank") and the Administrative Agent,
designate any Lender (so long as such Lender has agreed to such
designation) as an additional "Issuing Bank" hereunder (in this Section
sometimes referred to as the "New Issuing Bank"). Such notice shall specify
the date (which shall be a Letter of Credit Business Day) on which the New
Issuing Bank is to become an additional "Issuing Bank" hereunder. From and
after such date, all new Letters of Credit requested to be issued hereunder
shall be issued by the New Issuing Bank. From and after such date (and
until the first date on which no Letters of Credit issued by the Old
Issuing Bank are outstanding and no reimbursement obligations are owed to
the Old Issuing Bank, on which date the Old Issuing Bank shall cease to be
an Issuing Bank hereunder), references in this Agreement to the "Issuing
Bank" shall be deemed to refer (a) to the Old Issuing Bank, with respect to
Letters of Credit issued by it, (b) to the New Issuing Bank, with respect
to Letters of Credit issued or to be issued by it, and (c) to each of the
Old Issuing Bank and the New Issuing Bank, with respect to other matters.
Notwithstanding the fact that an Old Issuing Bank shall cease to be an
"Issuing Bank" hereunder, all of the exculpatory, indemnification and
similar provisions hereof in favor of the "Issuing Bank" shall inure to
such Old Issuing Bank's benefit as to any actions taken or omitted by it
while it was an "Issuing Bank" under this Agreement. The Borrowers agree
that after any appointment of a New Issuing Bank hereunder, the Borrowers
46
shall use reasonable commercial efforts to promptly replace (or otherwise
cause the applicable beneficiary to return to the Old Issuing Bank for
cancellation) each letter of credit issued by the Old Issuing Bank.
SECTION 2.21. Non-Dollar Letters of Credit. (a) The
Borrowers, the Administrative Agent, the Issuing Bank and the Lenders (i)
agree that the Issuing Bank may (in its sole discretion) issue Letters of
Credit ("Non-Dollar Letters of Credit") in currencies other than U.S.
dollars and (ii) further agree as follows with respect to such Non-Dollar
Letters of Credit:
(b) The Borrowers agree that their reimbursement
obligations under Section 2.05(b) and any resulting Letter of
Credit Advance, in each case in respect of a drawing under any
Non-Dollar Letter of Credit, (i) shall be payable in Dollars at
the Dollar Equivalent of such obligation in the currency in which
such Non-Dollar Letter of Credit was issued (determined on the
date of payment) and (ii) shall bear interest at a rate per annum
equal to (A) in the case of amounts owed to the Issuing Bank, the
sum of the Overnight Rate plus the Applicable Margin for
Eurodollar Rate Advances plus 2% and (B) in the case of amounts
owing to any other Lender, the Base Rate plus 2%, in each case for
each day from and including the date on which the applicable
Account Party is to reimburse the Issuing Bank pursuant to Section
2.05(b) to but excluding the date such obligation is paid in full.
(c) Each Lender agrees that its obligation to pay the
Issuing Bank such Lender's Pro Rata Share of the unreimbursed
portion of any payment by the Issuing Bank under Section 2.04(e)
in respect of a drawing under any Non-Dollar Letter of Credit
shall be payable in Dollars at the Dollar Equivalent of such
obligation in the currency in which such Non-Dollar Letter of
Credit was issued (calculated on the date of payment) (and any
such amount which is not paid when due shall bear interest at a
rate per annum equal to the Overnight Rate plus, beginning on the
third Business Day after such amount was due, the Applicable
Margin for Eurodollar Rate Advances).
(d) For purposes of determining whether there is
availability for the Borrowers to request any Advance or to
request the issuance or extension of, or any increase in, any
Letter of Credit, the Dollar Equivalent amount of the Available
Amount of each Non-Dollar Letter of Credit shall be calculated as
of the date such Advance is to be made or such Letter of Credit is
to be issued, extended or increased.
(e) For purposes of determining the letter of credit fee
under Section 2.09(d), the Dollar Equivalent amount of the
Available Amount of any Non-Dollar Letter of Credit shall be
determined on each of (1) the date of an issuance, extension or
change in the Available Amount of such Non-Dollar Letter of
Credit, (2) the date of any payment by the Issuing Bank in respect
of a drawing under such Non-Dollar Letter of Credit, (3) the last
day of each calendar month and (4) each day on which the WC
Commitments are to be reduced pursuant to Section 2.06 (it being
understood that no requested reduction shall be permitted to the
extent that, after making a calculation pursuant this clause (e),
such reduction would be greater than the unused portion of the WC
Commitments).
47
(f) If, on the last day of any calendar month, the sum of
the principal amount of all Advances plus the Available Amount of
all Letters of Credit (valuing the Available Amount of, and Letter
of Credit Advances in respect of, any Non-Dollar Letter of Credit
at the Dollar Equivalent thereof as of such day) would exceed the
amount of the Committed Facility, then the Borrowers will
immediately eliminate such excess by prepaying Committed Advances
and/or causing the Available Amount of one or more Letters of
Credit to be reduced.
(g) If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due in respect of any
Non-Dollar Letter of Credit in one currency into another currency,
the rate of exchange used shall be that at which in accordance
with its normal banking procedures the Issuing Bank could purchase
the first currency with such other currency on the Letter of
Credit Business Day preceding that on which final judgment is
given. The obligation of any Account Party in respect of any such
sum due from it to the Issuing Bank or any Lender hereunder shall,
notwithstanding any judgment in a currency (the "Judgment
Currency") other than that in which such sum is denominated in
accordance with the applicable provisions of this Agreement and
the applicable Non-Dollar Letter of Credit (the "Agreement
Currency"), be discharged only to the extent that on the Letter of
Credit Business Day following receipt by the Issuing Bank or such
Lender of any sum adjudged to be so due in the Judgment Currency,
the Issuing Bank or such Lender may in accordance with normal
banking procedures purchase the Agreement Currency with the
Judgment Currency. If the amount of the Agreement Currency so
purchased is less than the sum originally due to the Issuing Bank
or such Lender in the Agreement Currency, the applicable Account
Party agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify the Issuing Bank or such Lender, as
applicable, against such loss. If the amount of the Agreement
Currency so purchased is greater than the sum originally due to
the Issuing Bank or such Lender in such currency, the Issuing Bank
and each Lender agrees to return the amount of any excess to the
applicable Account Party (or to any other Person who may be
entitled thereto under applicable law).
(h) For purposes of this Section, "Dollar Equivalent"
means, in relation to an amount denominated in a currency other
than U.S. dollars, the amount of U.S. dollars which could be
purchased with such amount by the Issuing Bank in accordance with
its customary procedures (and giving effect to any transaction
costs) at the quoted foreign exchange spot rate of the Issuing
Bank at the time of determination; and "Overnight Rate" means, for
any day, the rate of interest per annum at which overnight
deposits in the applicable currency, in an amount approximately
equal to the amount with respect to which such rate is being
determined, would be offered for such day by the Issuing Bank to
major banks in the London or other applicable offshore interbank
market. The Overnight Rate for any day which is not a Letter of
Credit Business Day (or on which dealings are not carried on in
the applicable offshore interbank market) shall be the Overnight
Rate for the immediately preceding Letter of Credit Business Day.
48
ARTICLE III
CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01. Conditions Precedent to Effectiveness. This
Amended Agreement shall not become effective, and no Lender shall be
obligated to make any Advance and the Issuing Bank shall not be obligated
to issue any Letter of Credit hereunder, until each of the following
conditions precedent is satisfied:
(i) The Administrative Agent shall have received
counterparts of this Amended Agreement duly executed by each of
the parties listed on the signature pages hereof (or in the case
of any party as to which such an executed counterpart shall not
have been received, the Administrative Agent shall have received
evidence satisfactory to it of the execution and delivery of a
counterpart hereof by such party).
(ii) The Administrative Agent shall have received the
following in form and substance reasonably satisfactory to the
Administrative Agent (unless otherwise specified) and (except for
the Committed Notes) in sufficient copies for each Lender:
(A) The Committed Notes payable to the order of
the Lenders.
(B) Certified copies of the resolutions of the
Board of Directors of each Loan Party approving the
transactions contemplated by the Loan Documents and each
Loan Document to which it is or is to be a party, and of
all documents evidencing other necessary corporate action
and governmental and other third party approvals and
consents, if any, with transactions contemplated by the
Loan Documents and each Loan Document to which it is or
is to be a party.
(C) A copy of a certificate of the Secretary of
State or other appropriate official of the jurisdiction
of incorporation of (x) each of ACE INA and ACE
Financial, dated reasonably near the date of the Initial
Extension of Credit, certifying (A) as to a true and
correct copy of its charter and each amendment thereto on
file in such Secretary's office and (B) that (1) such
amendments are the only amendments to its charter on file
in such Secretary's office, (2) in the case of ACE INA,
it has paid all franchise taxes to the date of such
certificate and (C) it is duly incorporated and in good
standing or presently subsisting under the laws of the
State of the jurisdiction of its incorporation and (y)
each other Loan Party, dated reasonably near the Initial
Extension of Credit, certifying as to the good standing
(or existence) of such Loan Party.
(D) A certificate of each Loan Party, signed on
behalf of such Loan Party by its President or a Vice
President and its Secretary or any Assistant Secretary,
dated the date of the Initial Extension of Credit (the
statements made in which certificate shall be true on and
as of the date of the Initial Extension of Credit),
certifying as to (1) in the case of each of ACE INA and
ACE Financial, the absence of any amendments to the
charter of such Loan Party since the date of the
Secretary of State's certificate referred to in Section
3.01(ii)(C), (2) a true and
49
correct copy of the bylaws (in the case of ACE INA and
ACE Financial) or the constitutional documents (in the
case of each other Loan Party) of such Loan Party as in
effect on the date on which the resolutions referred to
in Section 3.01(ii)(B) were adopted and on the date of
the Initial Extension of Credit, (3) the due
incorporation and good standing or valid existence of
such Loan Party as a corporation organized under the laws
of the jurisdiction of its incorporation, and the absence
of any proceeding for the dissolution or liquidation of
such Loan Party, (4) the truth of the representations and
warranties contained in the Loan Documents as though made
on and as of the date of the Initial Extension of Credit
and (5) the absence of any event occurring and
continuing, or resulting from the Initial Extension of
Credit, that constitutes a Default.
(E) A certificate of the Secretary or an
Assistant Secretary of each Loan Party certifying the
names and true signatures of the officers of such Loan
Party authorized to sign each Loan Document to which it
is or is to be a party and the other documents to be
delivered hereunder and thereunder.
(F) A favorable opinion of (1) ▇▇▇▇▇▇ and
Calder, Cayman Islands counsel for the Parent, in
substantially the form of Exhibit D-1 hereto and as to
such other matters as any Lender through the
Administrative Agent may reasonably request, (2) ▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇, New York counsel for the Loan Parties, in
substantially the form of Exhibit D-2 hereto and as to
such other matters as any Lender through the
Administrative Agent may reasonably request, and (3)
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇, Bermuda counsel for ACE Bermuda
and Tempest, in substantially the form of Exhibit D-3
hereto and as to such other matters as any Lender through
the Administrative Agent may reasonably request.
(iii) There shall have occurred no material adverse
change since December 31, 1999 in the business, financial
condition, operations or properties of the Parent and its
Subsidiaries, taken as a whole.
(iv) There shall exist no action, suit, investigation,
litigation or proceeding affecting any Loan Party or any of its
Subsidiaries pending or threatened before any court, governmental
agency or arbitrator that (x) could be reasonably expected to have
a Material Adverse Effect or (y) would reasonably be expected to
materially adversely affect the legality, validity or
enforceability of any Loan Document or the other transactions
contemplated by the Loan Documents.
(v) The Borrowers shall have paid all accrued fees of the
Agents and the Lenders and all accrued expenses of the Agents
(including the accrued fees and expenses of counsel to the
Administrative Agent and local counsel on behalf of all of the
Lenders), in each case to the extent then due and payable.
On the Effective Date the Existing Agreement will be
automatically amended and restated in its entirety to read as set forth in
this Amended Agreement. On and after the Effective Date the rights and
obligations of the parties hereto shall be governed by this Amended
Agreement; provided the rights and obligations of the parties hereto with
respect to the period
50
prior to the Effective Date shall continue to be governed by the provisions
of the Existing Agreement. On the Effective Date, any Lender whose WC
Commitment is changed to zero shall cease to be a Lender party to this
Agreement and all accrued fees and other amounts payable under this
Agreement for the account of such Lender shall be due and payable on such
date; provided that the provisions of Section 2.11, 2.13 and 9.04 of this
Agreement shall continue to inure to the benefit of each such Lender. The
Notes delivered to each Lender under the Existing Agreement shall be
canceled and Notes under this Amended Agreement shall be given in
substitution therefor. Each Lender shall promptly after the Effective Date
deliver to the Borrowers for cancellation the Notes delivered to such
Lender under the Existing Agreement. The Agent shall promptly notify the
Borrowers and each Lender of the effectiveness of the Amended Agreement,
and such notice shall be conclusive and binding on all parties hereto.
The Banks that are parties to the Existing 2,050 Million
Credit Facility comprising the "Required Banks" as defined therein, and ACE
INA (the "Borrower" as defined under the Existing 2,050 Million Credit
Facility), Parent, ACE Bermuda and Tempest (Parent, ACE Bermuda and
Tempest, the "Guarantors" as defined under the Existing 2,050 Million
Credit Facility, and along with ACE INA, the "2,050 Million Obligors")
agree that the commitments under the Existing 2,050 Million Credit Facility
shall terminate in their entirety simultaneously with and subject to the
effectiveness of this Agreement and that the 2,050 Million Obligors shall
be obligated to pay on the Effective Date all principal amounts outstanding
thereunder, together with all accrued interest and fees and all other
amounts then payable thereunder to but excluding the Effective Date.
SECTION 3.02. Conditions Precedent to Each Committed
Borrowing and Issuance, Extension or Increase of a Letter of Credit. The
obligation of each Lender to make a Committed Advance on the occasion of
each Committed Borrowing (including the initial Committed Borrowing), and
the obligation of the Issuing Bank to issue, extend or increase a Letter of
Credit (including the initial issuance), shall be subject to the further
conditions precedent that on the date of such Committed Borrowing or
issuance, extension or increase (a) the following statements shall be true
(and each of the giving of the applicable Notice of Committed Borrowing or
request for issuance, extension, or increase, and the acceptance by the
Borrower that requested such Committed Borrowing of the proceeds of such
Committed Borrowing or of such issuance, extension or increase shall
constitute a representation and warranty by such Borrower that both on the
date of such notice and on the date of such Committed Borrowing or such
issuance, extension or increase such statements are true):
(i) the representations and warranties contained in each
Loan Document are correct in all material respects on and as of
such date, before and after giving effect to such Committed
Borrowing and to the application of the proceeds therefrom or such
issuance, extension or increase, as though made on and as of such
date, other than any such representations or warranties that, by
their terms, refer to a specific date other than the date of such
Committed Borrowing or the date of such issuance, extension or
increase, in which case as of such specific date; and
(ii) no Default has occurred and is continuing, or would
result from such Committed Borrowing or the application of the
proceeds therefrom or from such issuance, extension or increase;
51
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Lender or the Issuing Bank through the
Administrative Agent may reasonably request.
SECTION 3.03. Conditions Precedent to Each Competitive
Bid Borrowing. The obligation of each Lender that is to make a Competitive
Bid Advance on the occasion of a Competitive Bid Borrowing (including the
initial Competitive Bid Borrowing) to make such Competitive Bid Advance as
part of such Competitive Bid Borrowing is subject to the conditions
precedent that (i) the Administrative Agent shall have received the written
confirmatory Notice of Competitive Bid Borrowing with respect thereto, and
(ii) on the date of such Competitive Bid Borrowing the following statements
shall be true (and each of the giving of the applicable Notice of
Competitive Bid Borrowing and the acceptance by the Borrower that requested
such Competitive Bid Borrowing of the proceeds of such Competitive Bid
Borrowing shall constitute a representation and warranty by such Borrower
that on the date of such Competitive Bid Borrowing such statements are
true):
(a) the representations and warranties contained in
Section 4.01 are correct in all material respects on and as of the
date of such Competitive Bid Borrowing, before and after giving
effect to such Competitive Bid Borrowing and to the application of
the proceeds therefrom, as though made on and as of such date,
other than any such representations or warranties that, by their
terms, refer to a specific date other than the date of such
Competitive Bid Borrowing, in which case as of such specific date,
and
(b) no Default has occurred and is continuing, or would
result from such Competitive Bid Borrowing or from the application
of the proceeds therefrom.
SECTION 3.04. Conditions Precedent for ACE Financial. The
obligation of each Lender to make any Committed Advance or Competitive Bid
Advance to ACE Financial, and the obligation of the Issuing Bank to issue,
extend or increase a Letter of Credit for the account of ACE Financial,
shall be subject to the further condition precedent that on the date of
such Advance or issuance, extension or increase, and after giving effect
thereto, the sum of the aggregate principal amount of all Advances
outstanding to ACE Financial hereunder plus the aggregate Available Amount
of all Letters of Credit issued for the account of ACE Financial hereunder
shall not exceed $25,000,000.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrowers. Each Borrower represents and warrants as follows (except that
ACE Financial represents and warrants only as to itself):
(a) Each Loan Party and each of its Subsidiaries (i) is
duly organized or formed, validly existing and, to the extent such
concept applies, in good standing under the laws of the
jurisdiction of its incorporation or formation, (ii) is duly
qualified and in
52
good standing as a foreign corporation or other entity in each
other jurisdiction in which it owns or leases property or in which
the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed
would not be reasonably likely to have a Material Adverse Effect
and (iii) has all requisite power and authority (including,
without limitation, all governmental licenses, permits and other
approvals) to own or lease and operate its properties and to carry
on its business as now conducted and as proposed to be conducted,
except where the failure to have any license, permit or other
approval would not be reasonably likely to have a Material Adverse
Effect. All of the outstanding Equity Interests in each Borrower
(other than the Parent) have been validly issued, are fully paid
and non-assessable and (except for any Preferred Securities issued
after the date of this Agreement) are owned, directly or
indirectly, by the Parent free and clear of all Liens.
(b) Set forth on Schedule 4.01(b) hereto is a complete
and accurate list of all Subsidiaries of each Loan Party.
(c) The execution, delivery and performance by each Loan
Party of each Loan Document to which it is or is to be a party and
the consummation of the transactions contemplated by the Loan
Documents, are within such Loan Party's corporate powers, have
been duly authorized by all necessary corporate action, and do not
(i) contravene such Loan Party's constitutional documents, (ii)
violate any law, rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve
System), order, writ, judgment, injunction, decree, determination
or award, (iii) conflict with or result in the breach of, or
constitute a default under, any contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument
binding on or affecting any Loan Party, any of its Subsidiaries or
any of their properties or (iv) except for the Liens created under
the Loan Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the
properties of any Loan Party or any of its Subsidiaries. No Loan
Party or any of its Subsidiaries is in violation of any such law,
rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which could be reasonably
likely to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or
regulatory body or any other third party is required for (i) the
due execution, delivery, recordation, filing or performance by any
Loan Party of any Loan Document to which it is or is to be a party
or the other transactions contemplated by the Loan Documents, or
(ii) the exercise by any Agent or any Lender of its rights under
the Loan Documents, except for the authorizations, approvals,
actions, notices and filings which have been duly obtained, taken,
given or made and are in full force and effect.
(e) This Agreement has been, and each other Loan Document
when delivered hereunder will have been, duly executed and
delivered by each Loan Party party thereto. This Agreement is, and
each other Loan Document when delivered hereunder will be, the
53
legal, valid and binding obligation of each Loan Party party
thereto, enforceable against such Loan Party in accordance with
its terms.
(f) There is no action, suit, investigation, litigation
or proceeding affecting any Loan Party or any of its Subsidiaries,
including any Environmental Action, pending or threatened before
any court, governmental agency or arbitrator that (i) could be
reasonably likely to have a Material Adverse Effect or (ii) would
reasonably be expected to affect the legality, validity or
enforceability of any Loan Document or the transactions
contemplated by the Loan Documents.
(g) The Consolidated balance sheets of the Parent and its
Subsidiaries as at December 31, 1999, and the related Consolidated
statements of income and of cash flows of the Parent and its
Subsidiaries for the Fiscal Year then ended, accompanied by an
unqualified opinion of PricewaterhouseCoopers LLP, independent
public accountants, copies of which have been furnished to each
Lender, fairly present the Consolidated financial condition of the
Parent and its Subsidiaries as at such date and the Consolidated
results of operations of the Parent and its Subsidiaries for the
Fiscal Year ended on such date, all in accordance with generally
accepted accounting principles applied on a consistent basis, and,
as of the Effective Date and the date of the Initial Extension of
Credit, since December 31, 1999, there has been no Material
Adverse Change.
(h) No information, exhibit or report furnished by or on
behalf of any Loan Party to any Agent or any Lender in connection
with the negotiation and syndication of the Loan Documents or
pursuant to the terms of the Loan Documents contained any untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements made therein not misleading as at
the date it was dated (or if not dated, so delivered).
(i) Following application of the proceeds of each Advance
hereunder, Margin Stock will constitute less than 25% of the value
of those assets of any Borrower which are subject to any
limitation on sale, pledge or other disposition hereunder.
(j) Neither any Loan Party nor any of its Subsidiaries is
an "investment company", or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment
company", as such terms are defined in the Investment Company Act
of 1940, as amended. Neither the making of any Advances, nor the
issuance of any Letters of Credit, nor the application of the
proceeds or repayment thereof by any Borrower, nor the
consummation of the other transactions contemplated by the Loan
Documents, will violate any provision of such Act or any rule,
regulation or order of the Securities and Exchange Commission
thereunder.
(k) Neither any Loan Party nor any of its Subsidiaries is
a party to any indenture, loan or credit agreement or any lease or
other agreement or instrument or subject to any charter or
corporate restriction that is reasonably likely to have a Material
Adverse Effect.
54
(l) Each Loan Party is, individually and together with
its Subsidiaries, Solvent.
(m) Except to the extent that any and all events and
conditions under clauses (i) through (vi) below of this paragraph
(m) in the aggregate are not reasonably expected to have a
Material Adverse Effect,
(i) Schedule B (Actuarial Information) to the most
recent annual report (Form 5500 Series) for each Pension
Plan, copies of which have been filed with the Internal
Revenue Service, is complete and accurate and fairly
presents the funding status of such Pension Plan, and
since the date of such Schedule B there has been no
material adverse change in such funding status.
(ii) Neither any Loan Party nor any ERISA Affiliate
has incurred or is reasonably expected to incur any
Withdrawal Liability to any Multiemployer Plan.
(iii) Neither any Loan Party nor any ERISA Affiliate
has been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is in reorganization or has
been terminated, within the meaning of Title IV of ERISA,
and no such Multiemployer Plan is reasonably expected to
be in reorganization or to be terminated, within the
meaning of Title IV of ERISA.
(iv) With respect to each scheme or arrangement
mandated by a government other than the United States (a
"Foreign Government Scheme or Arrangement") and with
respect to each employee benefit plan that is not subject
to United States law maintained or contributed to by any
Loan Party or with respect to which any Subsidiary of any
Loan Party may have liability under applicable local law
(a "Foreign Plan"):
(x) Any employer and employee
contributions required by law or by the terms of
any Foreign Government Scheme or Arrangement or
any Foreign Plan have been made, or, if
applicable, accrued, in accordance with normal
accounting practices.
(y) The fair market value of the assets of
each funded Foreign Plan, the liability of each
insurer for any Foreign Plan funded through
insurance or the book reserve established for
any Foreign Plan, together with any accrued
contributions, is sufficient to procure or
provide for the accrued benefit obligations, as
of the date hereof, with respect to all current
and former participants in such Foreign Plan
according to the actuarial assumptions and
valuations most recently used to account for
such obligations in accordance with applicable
generally accepted accounting principles.
55
(z) Each Foreign Plan required to be
registered has been registered and has been
maintained in good standing with applicable
regulatory authorities.
(v) To the extent the assets of any Loan Party are
or are deemed under applicable law to be "plan assets"
within the meaning of Department of Labor Regulation ss.
2510.3-101, the execution, delivery and performance of
the Loan Documents and the consummation of the
transactions contemplated therein will not result in a
non-exempt prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Internal
Revenue Code.
(vi) During the twelve-consecutive-month period to
the date of the execution and delivery of this Agreement
and prior to any Borrowing hereunder, no steps have been
taken to terminate any Pension Plan, no contribution
failure has occurred with respect to any Pension Plan
sufficient to give rise to a lien under section 302(f) of
ERISA and no minimum funding waiver has been applied for
or is in effect with respect to any Pension Plan. No
condition exists or event or transaction has occurred or
is reasonably expected to occur with respect to any
Pension Plan which could result in any Loan Party or any
ERISA Affiliate incurring any material liability, fine or
penalty.
(n) (i) In the ordinary course of its business, each
Borrower reviews the effect of Environmental Laws on the
operations and properties of such Borrower and its Subsidiaries,
in the course of which it identifies and evaluates associated
liabilities and costs (including, without limitation, any capital
or operating expenditures required for clean-up or closure of
properties presently or previously owned, any capital or operating
expenditures required to achieve or maintain compliance with
environmental protection standards imposed by law or as a
condition of any license, permit or contract, any related
constraints on operating activities, including any periodic or
permanent shutdown of any facility or reduction in the level of or
change in the nature of operations conducted thereat, and any
actual or potential liabilities to third parties and any related
costs and expenses). On the basis of this review, each Borrower
has reasonably concluded that such associated liabilities and
costs, including the costs of compliance with Environmental Laws,
are unlikely to have a Material Adverse Effect.
(ii) The operations and properties of each Loan
Party and each of its Subsidiaries comply in all material
respects with all applicable Environmental Laws and
Environmental Permits, except for non-compliances which
would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect; Hazardous
Materials have not been released, discharged or disposed
of on any property currently or formerly owned or
operated by any Loan Party or any of its Subsidiaries
that would reasonably be expected to have a Material
Adverse Effect; and there are no Environmental Actions
pending or threatened against any Loan Party or its
Subsidiaries, and no circumstances exist that could be
reasonably likely to form the basis of any such
Environmental Action, which (in either case),
individually or in the aggregate with all other such
56
pending or threatened actions and circumstances would
reasonably be expected to have a Material Adverse Effect.
(o) Each Loan Party and each of its Subsidiaries has
filed, has caused to be filed or has been included in all material
federal tax returns and all other material tax returns required to
be filed and has paid all taxes shown thereon to be due, together
with applicable interest and penalties, except to the extent
contested in good faith and by appropriate proceedings (in which
case adequate reserves have been established therefor in
accordance with GAAP).
ARTICLE V
COVENANTS OF THE BORROWERS
SECTION 5.01. Affirmative Covenants. So long as any
Advance or any other obligation of any Loan Party under any Loan Document
shall remain unpaid, any Letter of Credit shall be outstanding or any
Lender shall have any Commitment hereunder, each Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of
its Subsidiaries to comply, in all material respects, with all
applicable laws, rules, regulations and orders, such compliance to
include, without limitation, compliance with Environmental Laws,
Environmental Permits, ERISA and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act
of 1970.
(b) Payment of Taxes, Etc. Pay and discharge, and cause
each of its Subsidiaries to pay and discharge, before the same
shall become delinquent, (i) all material taxes, assessments and
governmental charges or levies imposed upon it or upon its
property and (ii) all lawful material claims that, if unpaid,
might by law become a Lien upon its property; provided, however,
that neither any Borrower nor any of its Subsidiaries shall be
required to pay or discharge any such tax, assessment, charge or
claim that is being contested in good faith and by proper
proceedings and as to which appropriate reserves are being
maintained.
(c) Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and
covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same
general areas in which the Parent or such Subsidiary operates (it
being understood that the foregoing shall not apply to maintenance
of reinsurance or similar matters which shall be solely within the
reasonable business judgment of the Parent and its Subsidiaries).
(d) Preservation of Corporate Existence, Etc. Preserve
and maintain, and cause each of its Subsidiaries to preserve and
maintain, its existence, legal structure, legal name, rights
(charter and statutory), permits, licenses, approvals, privileges and
57
franchises; provided, however, that the Parent and its
Subsidiaries may consummate any merger or consolidation permitted
under Section 5.02(c) and provided further that neither the Parent
nor any of its Subsidiaries shall be required to preserve any
right, permit, license, approval, privilege or franchise if the
Board of Directors of the Parent or such Subsidiary shall
determine that the preservation thereof is no longer desirable in
the conduct of the business of the Parent or such Subsidiary, as
the case may be, and that the loss thereof is not disadvantageous
in any material respect to the Parent, such Subsidiary or the
Lenders.
(e) Visitation Rights. At any reasonable time and from
time to time upon prior notice, permit the Agents (upon request
made by any Agent or any Lender), or any agents or representatives
thereof, at the expense (so long as no Default has occurred and is
continuing) of such Agents (or such Lender, as the case may be),
to examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, the Parent and
any of its Subsidiaries, and to discuss the affairs, finances and
accounts of the Parent and any of its Subsidiaries with any of
their officers or directors and with, so long as a representative
of the Parent is present, their independent certified public
accountants.
(f) Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, in which
full and correct entries shall be made of all financial
transactions and the assets and business of the Parent and each
such Subsidiary sufficient to permit the preparation of financial
statements in accordance with GAAP.
(g) Maintenance of Properties, Etc. Maintain and
preserve, and cause each of its Subsidiaries to maintain and
preserve, all of its properties that are used or useful in the
conduct of its business in good working order and condition,
ordinary wear and tear excepted.
(h) Transactions with Affiliates. Conduct, and cause each
of its Subsidiaries to conduct, all transactions otherwise
permitted under the Loan Documents with any of their Affiliates
(other than any such transactions between Loan Parties or
wholly-owned Subsidiaries of Loan Parties) on terms that are fair
and reasonable and no less favorable than it would obtain in a
comparable arm's-length transaction with a Person not an
Affiliate.
(i) Pari Passu ranking. Each Borrower shall procure that
its obligations under the Loan Documents will rank at least pari
passu with all its other present and future unsecured and
unsubordinated obligations, except for obligations which are
mandatorily preferred by law applying to insurance companies
generally.
SECTION 5.02. Negative Covenants. So long as any Advance
or any other obligation of any Loan Party under any Loan Document shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender
shall have any Commitment hereunder, Parent will not, at any time:
58
(a) Liens, Etc. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any Lien on or with respect to any of its
properties of any character (including, without limitation,
accounts) whether now owned or hereafter acquired, or assign or
permit any of its Subsidiaries to assign, any accounts or other
right to receive income, except:
(i) Liens created under the Loan Documents or in
respect of the 364- Day Revolving Credit Facility
(provided that all obligations of the Loan Parties under
all of the foregoing shall be ratably secured);
(ii) Permitted Liens;
(iii) Liens described on Schedule 5.02(a) hereto;
(iv) purchase money Liens upon or in real
property or equipment acquired or held by the Parent or
any of its Subsidiaries in the ordinary course of
business to secure the purchase price of such property or
equipment or to secure Debt incurred solely for the
purpose of financing the acquisition, construction or
improvement of any such property or equipment to be
subject to such Liens, or Liens existing on any such
property or equipment at the time of acquisition or
within 180 days following such acquisition (other than
any such Liens created in contemplation of such
acquisition that do not secure the purchase price), or
extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount; provided,
however, that no such Lien shall extend to or cover any
property other than the property or equipment being
acquired, constructed or improved, and no such extension,
renewal or replacement shall extend to or cover any
property not theretofore subject to the Lien being
extended, renewed or replaced;
(v) Liens arising in connection with Capitalized
Leases; provided that no such Lien shall extend to or
cover any assets other than the assets subject to such
Capitalized Leases;
(vi) (A) any Lien existing on any asset of any
Person at the time such Person becomes a Subsidiary and
not created in contemplation of such event, (B) any Lien
on any asset of any Person existing at the time such
Person is merged or consolidated with or into the Parent
or any of it Subsidiaries in accordance with Section
5.02(c) and not created in contemplation of such event
and (C) any Lien existing on any asset prior to the
acquisition thereof by the Parent or any of its
Subsidiaries and not created in contemplation of such
acquisition;
(vii) Liens securing obligations under credit
default swap transactions determined by reference to, or
Contingent Obligations in respect of, Debt issued by the
Parent or one of its Subsidiaries; such Debt not to
exceed an aggregate principal amount of $550,000,000;
59
(viii) Liens arising in the ordinary course of
its business which (A) do not secure Debt and (B) do not
in the aggregate materially detract from the value of its
assets or materially impair the use thereof in the
operation of its business;
(ix) Liens on cash and Approved Investments
securing Hedge Agreements arising in the ordinary course of
business;
(x) other Liens securing Debt or other
obligations outstanding in an aggregate principal or face
amount not to exceed at any time 5% of Consolidated Net
Worth;
(xi) Liens consisting of deposits made by the
Parent or any insurance Subsidiary with any insurance
regulatory authority or other statutory Liens or Liens or
claims imposed or required by applicable insurance law or
regulation against the assets of the Parent or any
insurance Subsidiary, in each case in favor of
policyholders of the Parent or such insurance Subsidiary
or an insurance regulatory authority and in the ordinary
course of the Parent's or such insurance Subsidiary's
business;
(xii) Liens on Investments and cash balances of
the Parent or any insurance Subsidiary (other than
capital stock of any Subsidiary) securing obligations of
the Parent or any insurance Subsidiary in respect of (i)
letters of credit obtained in the ordinary course of
business and/or (ii) trust arrangements formed in the
ordinary course of business for the benefit of cedents to
secure reinsurance recoverables owed to them by the
Parent or any insurance Subsidiary;
(xiii) the replacement, extension or renewal of
any Lien permitted by clause (iii) or (vi) above upon or
in the same property theretofore subject thereto or the
replacement, extension or renewal (without increase in
the amount (other than in respect of fees, expenses and
premiums, if any) or change in any direct or contingent
obligor) of the Debt secured thereby;
(xiv) Liens securing obligations owed by any
Loan Party to any other Loan Party or owed by any
Subsidiary of the Parent (other than a Loan Party) to the
Parent or any other Subsidiary;
(xv) Liens incurred in the ordinary course of
business in favor of financial intermediaries and
clearing agents pending clearance of payments for
investment or in the nature of set-off, banker's lien or
similar rights as to deposit accounts or other funds;
(xvi) judgment or judicial attachment Liens,
provided that the enforcement of such Liens is effectively
stayed; and
(xvii) Liens arising in connection with
Securitization Transactions; provided that the aggregate
principal amount of the investment or claim held at any
time by all purchasers, assignees or other transferees of
(or of interests in)
60
receivables and other rights to payment in all Securitization
Transactions shall not exceed U.S.$250,000,000.
(b) Change in Nature of Business. Make any material
change in the nature of the business of the Parent and its
Subsidiaries, taken as a whole, as carried on at the date
hereof.
(c) Mergers, Etc. Merge into or consolidate with any
Person or permit any Person to merge into it, or permit any of its
Subsidiaries to do so, except that:
(i) any Subsidiary of the Parent may merge into
or consolidate with any other Subsidiary of the Parent,
provided that, in the case of any such merger or
consolidation, the Person formed by such merger or
consolidation shall be a wholly owned Subsidiary of the
Parent, provided further that, in the case of any such
merger or consolidation to which a Borrower is a party,
the Person formed by such merger or consolidation shall
be such Borrower;
(ii) any Subsidiary of any Borrower may merge
into or consolidate with any other Person or permit any
other Person to merge into or consolidate with it;
provided that the Person surviving such merger shall be a
wholly owned Subsidiary of such Borrower;
(iii) in connection with any sale or other
disposition permitted under Section 5.02(d), any
Subsidiary of the Parent may merge into or consolidate
with any other Person or permit any other Person to merge
into or consolidate with it; and
(iv) the Parent or any other Borrower may merge
into or consolidate with any other Person; provided that,
in the case of any such merger or consolidation, the
Person formed by such merger or consolidation shall be
the Parent or such Borrower, as the case may be;
provided, however, that in each case, immediately after giving
effect thereto, no event shall occur and be continuing that
constitutes a Default.
(d) Sales, Etc., of Assets. Sell, lease, transfer or
otherwise dispose of or permit any other Borrower to sell, lease,
transfer or otherwise dispose of, all or substantially all of its
assets (excluding sales of investment securities in the ordinary
course of business).
(e) Restricted Payments. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for value
any of its Equity Interests now or hereafter outstanding, return
any capital to its stockholders, partners or members (or the
equivalent Persons thereof) as such, make any distribution of
assets, Equity Interests, obligations or securities to its
stockholders, partners or members (or the equivalent Persons
thereof) as such or issue or sell any Equity Interests or accept
any capital contributions, or permit any of its Subsidiaries to do
any of the foregoing, or permit any of its Subsidiaries to
61
purchase, redeem, retire, defease or otherwise acquire for value
any Equity Interests in the Parent or to issue or sell any Equity
Interests therein, if in any case referred to above, a Default
shall have occurred and be continuing at the time of such action
or would result therefrom.
(f) Accounting Changes. Make or permit, or permit any
of its Subsidiaries to make or permit, any change in accounting
policies or reporting practices, except as permitted by GAAP.
SECTION 5.03. Reporting Requirements. So long as any
Advance or any other obligation of any Loan Party under any Loan Document
shall remain unpaid, any Letter of Credit shall be outstanding or any
Lender shall have any Commitment hereunder, the Parent will furnish to the
Agents and the Lenders:
(a) Default Notice. As soon as possible and in any event
within two days after the occurrence of each Default or any event,
development or occurrence reasonably likely to have a Material
Adverse Effect continuing on the date of such statement, a
statement of the chief financial officer of the Parent setting
forth details of such Default, event, development or occurrence
and the action that the Parent or the applicable Subsidiary has
taken and proposes to take with respect thereto.
(b) Annual Financials. (i) As soon as available and in
any event within 90 days after the end of each Fiscal Year, a copy
of the annual Consolidated audit report for such year for the
Parent and its Subsidiaries, including therein a Consolidated
balance sheet of the Parent and its Subsidiaries as of the end of
such Fiscal Year and Consolidated statements of income and cash
flows of the Parent and its Subsidiaries for such Fiscal Year, all
reported on in a manner reasonably acceptable to the Securities
and Exchange Commission in each case and accompanied by an opinion
of PricewaterhouseCoopers LLP or other independent public
accountants of recognized standing reasonably acceptable to the
Required Lenders, together with (i) a certificate of the Chief
Financial Officer or Chief Accounting Officer of the Parent
stating that no Default has occurred and is continuing, or if a
Default has occurred and is continuing, a statement as to the
nature thereof and the action that the Parent has taken a proposes
to take with respect thereto, and (ii) a schedule in form
reasonably satisfactory to the Administrative Agent of the
computations used by the Parent in determining, as of the end of
such Fiscal Year, compliance with the covenants contained in
Section 5.04.
(ii) As soon as available and in any event within 120
days after the end of each Fiscal Year, a copy of the annual
Consolidated audit report for such year for each Subsidiary
Guarantor and its Subsidiaries, including therein a Consolidated
balance sheet of such Subsidiary Guarantor and its Subsidiaries as
of the end of such Fiscal Year and a Consolidated statement of
income and a Consolidated statement of cash flows of such
Subsidiary Guarantor and its Subsidiaries for such Fiscal Year, in
each case accompanied by an opinion acceptable to the Required
Lenders of PricewaterhouseCoopers LLP or other independent public
accountants of recognized standing acceptable to the Required
Lenders.
62
(c) Quarterly Financials. As soon as available and in any
event within 45 days after the end of each of the first three
quarters of each Fiscal Year, Consolidated balance sheets of the
Parent and its Subsidiaries as of the end of such quarter and
Consolidated statements of income and a Consolidated statement of
cash flows of the Parent and its Subsidiaries for the period
commencing at the end of the previous fiscal quarter and ending
with the end of such fiscal quarter and Consolidated statements of
income and a Consolidated statement of cash flows of the Parent
and its Subsidiaries for the period commencing at the end of the
previous Fiscal Year and ending with the end of such quarter,
setting forth in each case in comparative form the corresponding
figures for the corresponding date or period of the preceding
Fiscal Year, all in reasonable detail and duly certified (subject
to the absence of footnotes and normal year-end audit adjustments)
by the Chief Financial Officer or Chief Accounting Officer of the
Parent as having been prepared in accordance with GAAP, together
with (i) a certificate of said officer stating that no Default has
occurred and is continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and the action
that the Parent has taken and proposes to take with respect
thereto and (ii) a schedule in form reasonably satisfactory to the
Administrative Agent of the computations used by the Parent in
determining compliance with the covenants contained in Section
5.04.
(d) Litigation. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and
proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting any Loan Party or any of its Subsidiaries of
the type described in Section 4.01(f).
(e) Securities Reports. Promptly after the sending or
filing thereof, copies of all proxy statements, financial
statements and reports that the Parent sends to its stockholders
generally, and copies of all regular, periodic and special
reports, and all registration statements, that any Loan Party or
any of its Subsidiaries files with the Securities and Exchange
Commission or any governmental authority that may be substituted
therefor, or with any national securities exchange.
(f) ERISA. (i) ERISA Events. Promptly and in any event
within 10 days after any Loan Party or any ERISA Affiliate
institutes any steps to terminate any Pension Plan or becomes
aware of the institution of any steps or any threat by the PBGC to
terminate any Pension Plan, or the failure to make a required
contribution to any Pension Plan if such failure is sufficient to
give rise to a lien under section 302(f) of ERISA, or the taking
of any action with respect to a Pension Plan which could result in
the requirement that any Loan Party or any ERISA Affiliate furnish
a bond or other security to the PBGC or such Pension Plan, or the
occurrence of any event with respect to any Pension Plan which
could result in any Loan Party or any ERISA Affiliate incurring
any material liability, fine or penalty, or any material increase
in the contingent liability of any Loan Party or any ERISA
Affiliate with respect to any post-retirement Welfare Plan
benefit, notice thereof and copies of all documentation relating
thereto.
63
(ii) Plan Annual Reports. Promptly upon request of any
Agent or any Lender, copies of each Schedule B (Actuarial Information)
to the annual report (Form 5500 Series) with respect to each Pension
Plan.
(iii) Multiemployer Plan Notices. Promptly and in any
event within 15 Business Days after receipt thereof by any Loan
Party or any ERISA Affiliate from the sponsor of a Multiemployer
Plan, copies of each notice concerning (A) the imposition of
Withdrawal Liability by any such Multiemployer Plan, (B) the
reorganization or termination, within the meaning of Title IV of
ERISA, of any such Multiemployer Plan or (C) the amount of
liability incurred, or that may be incurred, by such Loan Party or
any ERISA Affiliate in connection with any event described in
clause (A) or (B); provided, however, that such notice and
documentation shall not be required to be provided (except at the
specific request of any Agent or Lender, in which case such notice
and documentation shall be promptly provided following such
request) if such condition or event is not reasonably expected to
result in any Loan Party or any ERISA Affiliate incurring any
material liability, fine, or penalty.
(g) Statutory Statements. As soon as available and in any
event within 20 days after submission, each statutory statement of
the Loan Parties (or any of them) in the form submitted to The
Insurance Division of the Office of Registrar of Companies of
Bermuda.
(h) Regulatory Notices, Etc. Promptly after any
Responsible Officer of the Parent obtains knowledge thereof, (i) a
copy of any notice from the Bermuda Minister of Finance or the
Registrar of Companies or any other person of the revocation, the
suspension or the placing of any restriction or condition on the
registration as an insurer of any Borrower under the Bermuda
Insurance Act 1978 (and related regulations) or of the institution
of any proceeding or investigation which could result in any such
revocation, suspension or placing of such a restriction or
condition, (ii) copies of any correspondence by, to or concerning
any Loan Party relating to an investigation conducted by the
Bermuda Minister of Finance, whether pursuant to Section 132 of
the Bermuda Companies Act 1981 (and related regulations) or
otherwise and (iii) a copy of any notice of or requesting or
otherwise relating to the winding-up or any similar proceeding of
or with respect to any Loan Party.
(i) Other Information. Such other information respecting
the business, condition (financial or otherwise), operations,
performance, properties or prospects of any Loan Party or any of
its Subsidiaries as any Agent, or any Lender through the
Administrative Agent, may from time to time reasonably request.
SECTION 5.04. Financial Covenants. So long as any Advance
or any other obligation of any Loan Party under any Loan Document shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender
shall have any Commitment hereunder, the Parent will:
64
(a) Adjusted Consolidated Debt to Total Capitalization
Ratio. Maintain at all times a ratio of Adjusted Consolidated Debt to
Total Capitalization of not more than 0.35 to 1.
(b) Consolidated Net Worth. Maintain at all times
Consolidated Net Worth in an amount equal to the sum of (i)
$3,600,000,000 plus (ii) 25% of Consolidated Net Income for each
fiscal quarter of the Parent ending on and after March 31, 2000
for which such Consolidated Net Income is positive.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) (i) any Borrower shall fail to pay any principal of
any Advance when the same shall become due and payable or (ii) any
Borrower shall fail to pay any interest on any Advance, or any
Loan Party shall fail to make any other payment under any Loan
Document, in each case under this clause (ii) within five Business
Days after the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party
(or any of its officers) under or in connection with any Loan
Document shall prove to have been incorrect in any material
respect when made; or
(c) any Borrower shall fail to perform or observe any
term, covenant or agreement contained in Section 2.15, 5.01(d)
(with respect to the Parent) or (e), 5.02 or 5.04; or
(d) any Loan Party shall fail to perform or observe any
other term, covenant or agreement contained in any Loan Document
on its part to be performed or observed if such failure shall
remain unremedied for 30 days after the earlier of the date on
which (i) a Responsible Officer becomes aware of such failure or
(ii) written notice thereof shall have been given to such Loan
Party by any Agent or any Lender; or
(e) the Parent or any of its Subsidiaries shall fail to
pay any Material Financial Obligation (but excluding Debt
outstanding hereunder) of the Parent or such Subsidiary (as the
case may be), when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable
grace period, if any, specified in the agreement or instrument
relating to such Material Financial Obligation; or any other event
shall occur or condition shall exist under any agreement or
instrument relating to any such Material Financial Obligation and
shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such
event or condition is to accelerate, or to permit the acceleration
of, the maturity of such Material Financial
65
Obligation or otherwise to cause, or to permit the holder thereof
to cause, such Material Financial Obligation to mature; or any
such Material Financial Obligation shall be declared to be due and
payable or required to be prepaid or redeemed (other than by a
regularly scheduled required prepayment or redemption), purchased
or defeased, or an offer to prepay, redeem, purchase or defease
such Material Financial Obligation shall be required to be made,
in each case prior to the stated maturity thereof; or
(f) any Loan Party or any Significant Subsidiary shall
generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against any Loan Party or
any Significant Subsidiary seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted
against it (but not instituted by it) that is being diligently
contested by it in good faith, either such proceeding shall remain
undismissed or unstayed for a period of 30 days or any of the
actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or
any substantial part of its property) shall occur; or any Loan
Party or any Significant Subsidiary shall take any corporate
action to authorize any of the actions set forth above in this
subsection (f); or
(g) any final judgment or order for the payment of money
in excess of $100,000,000 shall be rendered against any Loan Party
or any of its Subsidiaries and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect;
or
(h) any non-monetary judgment or order shall be rendered
against any Loan Party or any of its Subsidiaries that could be
reasonably likely to have a Material Adverse Effect, and there
shall be any period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
(i) any provision of any Loan Document after delivery
thereof pursuant to Section 3.01 shall for any reason cease to be
valid and binding on or enforceable against any Loan Party party
to it (other than as a result of a transaction permitted
hereunder), or any such Loan Party shall so state in writing; or
(j) a Change of Control shall occur; or
(k) Any Loan Party or any ERISA Affiliate shall incur or
shall be reasonably expected to incur liability in excess of
$25,000,000 in the aggregate with respect to any
66
Pension Plan or any Multiemployer Plan in connection with the
occurrence of any of the following events or existence of any of
the following conditions:
(i) Institution of any steps by any Loan Party,
any ERISA Affiliate or any other Person, including,
without limitation, the PBGC to terminate a Pension Plan
if as a result of such termination a Loan Party or any
ERISA Affiliate could be required to make a contribution
to such Pension Plan, or could incur a liability or
obligation;
(ii) A contribution failure occurs with respect
to any Pension Plan sufficient to give rise to a lien
under section 302(f) of ERISA; or
(iii) Any condition shall exist or event shall
occur with respect to a Pension Plan that is reasonably
expected to result in any Loan Party or any ERISA
Affiliate being required to furnish a bond or security to
the PBGC or such Pension Plan, or incurring a liability
or obligation.
(l) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has
incurred Withdrawal Liability to such Multiemployer Plan; or
(m) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, and as a result of such
reorganization or termination the aggregate annual contributions
of the Loan Parties and the ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have
been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years of such Multiemployer Plans
immediately preceding the plan year in which such reorganization
or termination occurs;
then, and in any such event, the Administrative Agent (i) shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrowers, declare the Commitments of each Lender and the obligation of
each Lender to make Advances (other than Letter of Credit Advances by the
Issuing Bank or a Lender pursuant to Section 2.04(c)) and of the Issuing
Bank to issue Letters of Credit to be terminated, whereupon the same shall
forthwith terminate, and/or (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrowers, declare the
Notes, all interest thereon and all other amounts payable under this
Agreement and the other Loan Documents to be forthwith due and payable,
whereupon the Notes, all such interest and all such amounts shall become
and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrowers; provided, however, that in the event of an actual or deemed
entry of an order for relief with respect to any Borrower under the Federal
Bankruptcy Code, (x) the Commitments of each Lender and the obligation of
each Lender to make Advances (other than Letter of Credit Advances by the
Issuing Bank or a Lender pursuant to Section 2.04(c)) and of the Issuing
Bank to issue Letters of Credit shall automatically be terminated and (y)
the Notes, all such interest and all such amounts shall automatically
become and be due and payable,
67
without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrowers.
SECTION 6.02. Actions in Respect of the Letters of Credit
upon Default. If any Event of Default shall have occurred and be
continuing, the Administrative Agent may, or shall at the request of the
Required Lenders, after having taken any of the actions described in
Section 6.01(ii) or otherwise, make demand upon the Borrower to, and
forthwith upon such demand the Borrower will, pay to the Administrative
Agent on behalf of the Lenders in same day funds at the Administrative
Agent's office designated in such demand, an amount equal to the aggregate
Available Amount of all Letters of Credit then outstanding as cash
collateral. If at any time during the continuance of an Event of Default
the Administrative Agent determines that such funds are subject to any
right or claim of any Person other than the Administrative Agent and the
Lenders or that the total amount of such funds is less than the aggregate
Available Amount of all Letters of Credit, the Borrower will, forthwith
upon demand by the Administrative Agent, pay to the Administrative Agent,
as additional cash collateral, an amount equal to the excess of (a) such
aggregate Available Amount over (b) the total amount of funds, if any, that
the Administrative Agent determines to be free and clear of any such right
and claim. Upon the drawing of any Letter of Credit, such funds shall be
applied to reimburse the Issuing Bank or Lenders, as applicable, to the
extent permitted by applicable law.
ARTICLE VII
THE GUARANTY
SECTION 7.01. The Guaranty. (a) Each Guarantor hereby
jointly and severally, unconditionally, absolutely and irrevocably
guarantees the full and punctual payment (whether at stated maturity, upon
acceleration or otherwise) of all amounts payable by each of the other
Borrowers under the Loan Documents including, without limitation, the
principal of and interest on each Note issued by such other Borrowers
pursuant to this Agreement and for reimbursement obligations with respect
to Letters of Credit. Upon failure by a Borrower to pay punctually any such
amount, each other Guarantor agrees to pay forthwith on demand the amount
not so paid at the place and in the manner specified in this Agreement.
(b) Each Guarantor (other than the Parent), and by its
acceptance of this Guaranty, the Administrative Agent and each other
Lender, hereby confirms that it is the intention of all such Persons that
this Guaranty and the obligations of each Guarantor hereunder not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer
Act or any similar foreign, federal or state law to the extent applicable
to this Guaranty and the obligations of each Guarantor (other than the
Parent) hereunder. To effectuate the foregoing intention, the
Administrative Agent, the other Lenders and the Guarantors hereby
irrevocably agree that the obligations of each Guarantor (other than the
Parent) under this Article VII at any time shall be limited to the maximum
amount as will result in the obligations of such Guarantor under this
Guaranty not constituting a fraudulent transfer or conveyance.
68
SECTION 7.02. Guaranty Unconditional. The obligations of
each Guarantor under this Article VII shall be unconditional, absolute and
irrevocable and, without limiting the generality of the foregoing, shall
not be released, discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise,
waiver or release in respect of any obligation of any other obligor
under any of the Loan Documents, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to
any of the Loan Documents;
(iii) any release, non-perfection or invalidity of any
direct or indirect security for any obligation of any other obligor
under any of the Loan Documents;
(iv) any change in the corporate existence, structure or
ownership of any obligor, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any other
obligor or its assets or any resulting release or discharge of any
obligation of any other obligor contained in any of the Loan
Documents;
(v) the existence of any claim, set-off or other rights
which any obligor may have at any time against any other obligor,
the Administrative Agent, any Lender or any other corporation or
person, whether in connection with any of the Loan Documents or
any unrelated transactions, provided that nothing herein shall
prevent the assertion of any such claim by separate suit or
compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or
against any other obligor for any reason of any of the Loan
Documents, or any provision of applicable law or regulation
purporting to prohibit the payment by any other obligor of the
principal of or interest on any Note or any other amount payable
under any of the Loan Documents; or
(vii) any other act or omission to act or delay of any
kind by any obligor, the Administrative Agent, any Lender or any
other corporation or person or any other circumstance whatsoever
which might, but for the provisions of this paragraph, constitute
a legal or equitable discharge of or defense to a Guarantor's
obligations under this Article VII.
SECTION 7.03. Discharge Only upon Payment in Full;
Reinstatement in Certain Circumstances. Each Guarantor's obligations under
this Article VII shall remain in full force and effect until the
Commitments shall have terminated and the principal of and interest on the
Notes and all other amounts payable by the other Borrowers under the Loan
Documents shall have been paid in full. If at any time any payment of the
principal of or interest on any Note or any other amount payable by a
Borrower under the Loan Documents is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of
such Borrower or otherwise, each Guarantor's obligations under this Article
VII with respect to such payment shall be reinstated as though such payment
had been due but not made at such time.
69
SECTION 7.04. Waiver by the Guarantors. Each Guarantor
irrevocably waives acceptance hereof, presentment, demand, protest and any
notice not provided for herein, as well as any requirement that at any time
any action be taken by any corporation or person against any other obligor
or any other corporation or person.
SECTION 7.05. Subrogation. Each Guarantor hereby
unconditionally and irrevocably agrees not to exercise any rights that it
may now have or hereafter acquire against any other Borrower, any other
Loan Party or any other insider guarantor that arise from the existence,
payment, performance or enforcement of such Guarantor's obligations under
or in respect of this Guaranty or any other Loan Document, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim
or remedy of any Lender against any other Borrower, any other Loan Party or
any other insider guarantor or any collateral, whether or not such claim,
remedy or right arises in equity or under contract, statute or common law,
including, without limitation, the right to take or receive from any other
Borrower, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and
until all amounts payable under this Guaranty shall have been paid in full
in cash, and the Commitments shall have expired or been terminated. If any
amount shall be paid to any Guarantor in violation of the immediately
preceding sentence at any time prior to the latest of (a) the payment in
full in cash of all amounts payable under this Guaranty, and (b) the
Termination Date, such amount shall be received and held in trust for the
benefit of the Lenders, shall be segregated from other property and funds
of such Guarantor and shall forthwith be paid or delivered to the
Administrative Agent in the same form as so received (with any necessary
endorsement or assignment) to be credited and applied to all amounts
payable under this Guaranty, whether matured or unmatured, in accordance
with the terms of the Loan Documents, or to be held as collateral for any
amounts payable under this Guaranty thereafter arising. If (i) any
Guarantor shall make payment to any Lender of all or any amounts payable
under this Guaranty, (ii) all amounts payable under this Guaranty shall
have been paid in full in cash, and (iii) the Termination Date shall have
occurred, the Lenders will, at such Guarantor's request and expense,
execute and deliver to such Guarantor appropriate documents, without
recourse and without representation or warranty, necessary to evidence the
transfer by subrogation to such Guarantor of an interest in the obligations
resulting from such payment made by such Guarantor pursuant to this
Guaranty.
SECTION 7.06. Stay of Acceleration. If acceleration of
the time for payment of any amount payable by any Borrower under any of the
Loan Documents is stayed upon the insolvency, bankruptcy or reorganization
of such Borrower, all such amounts otherwise subject to acceleration under
the terms of this Agreement shall nonetheless by payable by the Guarantors
under this Article VII forthwith on demand by the Administrative Agent made
at the request of the requisite proportion of the Lenders.
SECTION 7.07. Continuing Guaranty; Assignments. This
Guaranty is a continuing guaranty and shall (a) remain in full force and
effect until the latest of (i) the payment in full in cash of all amounts
payable under this Guaranty and (ii) the Termination Date, (b) be binding
upon each Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Lenders and their successors,
transferees and assigns. Without limiting the generality of clause (c) of
the immediately preceding sentence, any Lender may assign or
70
otherwise transfer all or any portion of its rights and obligations under
this Agreement (including, without limitation, all or any portion of its
Commitments, the Advances owing to it and the Note or Notes held by it) to
any other Person, and such other Person shall thereupon become vested with
all the benefits in respect thereof granted to such Lender herein or
otherwise, in each case as and to the extent provided in Section 9.07.
ARTICLE VIII
THE AGENTS
SECTION 8.01. Authorization and Action. Each Lender (in
its capacity as a Lender) hereby appoints and authorizes each Agent to take
such action as agent on its behalf and to exercise such powers and
discretion under this Agreement and the other Loan Documents as are
delegated to such Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto. As to any
matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Notes), no Agent shall
be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in
so acting or refraining from acting) upon the instructions of the Required
Lenders or all the Lenders where unanimity is required, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that no Agent shall be required to take any action that
exposes such Agent to personal liability or that is contrary to this
Agreement or applicable law. Each Agent agrees to give to each Lender
prompt notice of each notice given to it by any Borrower pursuant to the
terms of this Agreement.
SECTION 8.02. Agents' Reliance, Etc. Neither any Agent
nor any of their respective directors, officers, agents or employees shall
be liable for any action taken or omitted to be taken by it or them under
or in connection with the Loan Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of
the foregoing, each Agent: (a) may consult with legal counsel (including
counsel for any Loan Party), independent public accountants and other
experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of
such counsel, accountants or experts; (b) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for
any statements, warranties or representations (whether written or oral)
made in or in connection with the Loan Documents; (c) shall not have any
duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of any Loan Document on the part of
any Loan Party or to inspect the property (including the books and records)
of any Loan Party; (d) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, any Loan
Document or any other instrument or document furnished pursuant thereto;
and (e) shall incur no liability under or in respect of any Loan Document
by acting upon any notice, consent, certificate or other instrument or
writing (which may be by telegram or telecopy) reasonably believed by it to
be genuine and signed or sent by the proper party or parties.
71
SECTION 8.03. MGT and Affiliates. With respect to its WC
Commitments, the Committed Advances made by it and the Committed Notes
issued to it, MGT shall have the same rights and powers under the Loan
Documents as any other Lender and may exercise the same as though it were
not an Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include MGT in its individual capacity. MGT and its
affiliates may accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from and generally
engage in any kind of business with, any Loan Party, any of its
Subsidiaries and any Person that may do business with or own securities of
any Loan Party or any such Subsidiary, all as if MGT were not Agent and
without any duty to account therefor to the Lenders.
SECTION 8.04. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon any Agent
or any other Lender and based on the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon any Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 8.05. Indemnification. (a) Each Lender severally
agrees to indemnify each Agent (to the extent not promptly reimbursed by
the Borrowers) from and against such Lender's ratable share (determined as
provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against such Agent in any way relating to or arising out of the
Loan Documents or any action taken or omitted by such Agent under the Loan
Documents; provided, however, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
such Agent's gross negligence or willful misconduct. Without limitation of
the foregoing, each Lender agrees to reimburse each Agent promptly upon
demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrowers under
Section 9.04, to the extent that such Agent is not promptly reimbursed for
such costs and expenses by the Borrowers.
(b) For purposes of this Section 8.05, the Lenders'
respective ratable shares of any amount shall be determined, at any time,
according to the sum of (i) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lenders, (ii) their
respective Pro Rata Shares of the aggregate Available Amounts of all
Letters of Credit outstanding at such time and (iii) their respective
Unused WC Commitments at such time. The failure of any Lender to reimburse
any Agent promptly upon demand for its ratable share of any amount required
to be paid by the Lenders to such Agent as provided herein shall not
relieve any other Lender of its obligation hereunder to reimburse such
Agent for its ratable share of such amount, but no Lender shall be
responsible for the failure of any other Lender to reimburse such Agent for
such other Lender's ratable share of such amount. Without prejudice to the
survival of any other agreement of any Lender hereunder, the agreement and
obligations of each Lender contained in this Section 8.05 shall survive the
payment in full of principal, interest and all other amounts payable
hereunder and under the other Loan Documents.
72
SECTION 8.06. Successor Agents. Any Agent may resign at
any time by giving written notice thereof to the Lenders and the Parent and
may be removed at any time with or without cause by the Required Lenders.
Upon any such resignation or removal, the Required Lenders shall have the
right to appoint a successor Agent, subject (so long as no Event of Default
exists) to the consent of the Parent (which consent shall not be
unreasonably withheld). If no successor Agent shall have been so appointed
by the Required Lenders, and shall have accepted such appointment, within
30 days after the retiring Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Agent, then the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent, which shall be a
commercial bank organized under the laws of the United States or of any
State thereof and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent such successor Agent shall succeed to and become vested
with all the rights, powers, discretion, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations under the Loan Documents. If within 45 days after written
notice is given of the retiring Agent's resignation or removal under this
Section 8.06 no successor Agent shall have been appointed and shall have
accepted such appointment, then on such 45th day (i) the retiring Agent's
resignation or removal shall become effective, (ii) the retiring Agent
shall thereupon be discharged from its duties and obligations under the
Loan Documents and (iii) the Required Lenders shall thereafter perform all
duties of the retiring Agent under the Loan Documents until such time, if
any, as the Required Lenders appoint a successor Agent as provided above.
After any retiring Agent's resignation or removal hereunder as Agent shall
have become effective, the provisions of this Article VIII shall inure to
its benefit as to any actions taken or omitted to be taken by it while it
was Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of
any provision of this Agreement or the Notes or any other Loan Document,
nor consent to any departure by any Loan Party therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Required Lenders (and, in the case of an amendment, the Parent), and then
any such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no
amendment, waiver or consent shall, unless in writing and signed by all of
the Lenders (other than any Lender that is, at such time, a Defaulting
Lender), do any of the following at any time: (i) waive any of the
conditions specified in Section 3.01 or, in the case of the Initial
Extension of Credit, Section 3.02 or 3.03, as applicable, (ii) change the
number of Lenders or the percentage of (x) the WC Commitments, (y) the
aggregate unpaid principal amount of the Advances or (z) the aggregate
Available Amount of outstanding Letters of Credit that, in each case, shall
be required for the Lenders or any of them to take any action hereunder,
(iii) reduce or limit the obligations of any Guarantor under Article VII or
release such Guarantor or otherwise limit such Guarantor's liability with
respect to the obligations owing to the Agents and the Lenders, (iv) amend
this Section 9.01 or any of the definitions herein that would have such
effect, (v) increase the WC Commitments of the Lenders or subject the
Lenders to any additional obligations, (vi) reduce the principal of, or
interest on, the Notes or any fees or other amounts payable hereunder,
(vii) postpone any date fixed for any
73
payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, (viii) extend the Termination Date or (ix) limit
the liability of any Loan Party under any of the Loan Documents; provided
further that no amendment, waiver or consent shall, unless in writing and
signed by an Agent in addition to the Lenders required above to take such
action, affect the rights or duties of such Agent under this Agreement or
the other Loan Documents and no amendment, waiver or consent shall, unless
in writing and signed by the Issuing Bank in addition to the Lenders above
required to take such action, affect the rights or duties of the Issuing
Bank under this Agreement or the other Loan Documents (including, without
limitation, any change in Section 2.01(b), 2.04, 2.05(b), 2.05(c), 2.09(d),
2.18, 2.19, 2.20, 2.21 or 9.09).
SECTION 9.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic or telecopy communication) and mailed, telegraphed, telecopied
or delivered, if to any Borrower, at its address set forth below on the
signature pages hereof; if to any Lender, the address for notices specified
in its Administrative Questionnaire; and if to the Administrative Agent, at
its address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇; or, as to any party, at such other address as shall
be designated by such party in a written notice to the other parties. All
such notices and communications shall, when mailed, telegraphed or
telecopied, be effective when deposited in the mails, delivered to the
telegraph company or transmitted by telecopier, respectively, except that
notices and communications to any Agent pursuant to Article II, III or VIII
shall not be effective until received by such Agent. Manual delivery by
telecopier of an executed counterpart of any amendment or waiver of any
provision of this Agreement or the Notes or of any Exhibit hereto to be
executed and delivered hereunder shall be effective as delivery of an
original executed counterpart thereof.
SECTION 9.03. No Waiver; Remedies. No failure on the part
of any Lender or any Agent to exercise, and no delay in exercising, any
right hereunder or under any Note shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other
or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 9.04. Costs and Expenses. (a) The Borrowers agree
to pay on demand (i) all reasonable costs and expenses of the Agents and of
the Issuing Bank in connection with the preparation, execution, delivery,
administration, modification and amendment of the Loan Documents
(including, without limitation, (A) all due diligence, collateral review,
syndication, transportation, computer, duplication, appraisal, audit,
insurance, consultant, search, filing and recording fees and expenses and
(B) the reasonable fees and expenses of a single counsel for the Agents and
a single counsel for the Issuing Bank with respect thereto, with respect to
advising the Agents as to its rights and responsibilities, or the
perfection, protection or preservation of rights or interests, under the
Loan Documents, with respect to negotiations with any Loan Party or with
other creditors of any Loan Party or any of its Subsidiaries arising out of
any Default or any events or circumstances that may give rise to a Default
and with respect to presenting claims in or otherwise participating in or
monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii)
all reasonable costs and expenses of each Agent, the Issuing Bank and each
Lender in connection with the enforcement of the Loan Documents, whether in
any action, suit or litigation, or any bankruptcy, insolvency or other
similar proceeding affecting creditors' rights generally
74
(including, without limitation, the reasonable fees and expenses of counsel
for the Administrative Agent, the Issuing Bank and each Lender with respect
thereto).
(b) The Borrowers agree to indemnify and hold harmless
each Agent, the Issuing Bank, each Lender and each of their Affiliates and
their respective officers, directors, employees, agents and advisors (each,
an "Indemnified Party") from and against any and all claims, damages,
losses, liabilities and expenses (including, without limitation, reasonable
fees and expenses of counsel) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in
connection with any investigation, litigation or proceeding or preparation
of a defense in connection therewith) this Agreement, the actual or
proposed use of the proceeds of the Advances, the Loan Documents or any of
the transactions contemplated thereby, including, without limitation, any
acquisition or proposed acquisition by any Borrower or any of its
Subsidiaries or Affiliates, except to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified
Party's gross negligence or willful misconduct. In the case of an
investigation, litigation or other proceeding to which the indemnity in
this Section 9.04(b) applies, such indemnity shall be effective whether or
not such investigation, litigation or proceeding is brought by any Loan
Party, its directors, shareholders or creditors or an Indemnified Party or
any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated by the Loan Documents are consummated. Each of
the Borrowers also agrees not to assert any claim against any Agent, any
Lender or any of their Affiliates, or any of their respective officers,
directors, employees, attorneys and agents, on any theory of liability, for
special, indirect, consequential or punitive damages arising out of or
otherwise relating to the credit facilities provided hereunder, the actual
or proposed use of the proceeds of the Advances or the Letters of Credit,
the Loan Documents or any of the transactions contemplated by the Loan
Documents.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance or LIBO Rate Advance is made by any Borrower to or
for the account of a Lender other than on the last day of the Interest
Period for such Advance, as a result of a payment or Conversion pursuant to
Section 2.07, 2.10(b)(i) or 2.11(d), acceleration of the maturity of the
Notes pursuant to Section 6.01 or for any other reason, or if any Borrower
fails to make any payment or prepayment of an Advance for which a notice of
prepayment has been given or that is otherwise required to be made, whether
pursuant to Section 2.05, 2.07 or 6.01 or otherwise, the Borrowers agree,
within 10 days after demand by such Lender (with a copy of such demand to
the Administrative Agent), which demand shall include a calculation in
reasonable detail of the amount demanded, to pay to the Administrative
Agent for the account of such Lender any amounts required to compensate
such Lender for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment or Conversion or such failure
to pay or prepay, as the case may be, including, without limitation, any
loss (excluding loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance.
(d) Without prejudice to the survival of any other
agreement of any Loan Party hereunder or under any other Loan Document, the
agreements and obligations of the Borrowers contained in Sections 2.11 and
2.13 and this Section 9.04 shall survive the payment in
75
full of principal, interest and all other amounts payable hereunder and
under any of the other Loan Documents.
SECTION 9.05. Right of Set-off. Upon (a) the occurrence
and during the continuance of any Event of Default and (b) the making of
the request or the granting of the consent specified by Section 6.01 to
authorize the Administrative Agent to declare the Notes due and payable
pursuant to the provisions of Section 6.01, each Agent and each Lender and
each of their respective Affiliates is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and
otherwise apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time
owing by such Agent, such Lender or such Affiliate to or for the credit or
the account of any Borrower against any and all of the obligations of such
Borrower now or hereafter existing under the Loan Documents, irrespective
of whether such Agent or such Lender shall have made any demand under this
Agreement or such Note or Notes and although such obligations may be
unmatured. Each Agent and each Lender agrees promptly to notify each
Borrower after any such set-off and application; provided, however, that
the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Agent and each Lender and their
respective Affiliates under this Section are in addition to other rights
and remedies (including, without limitation, other rights of set-off) that
such Agent, such Lender and their respective Affiliates may have.
SECTION 9.06. Successors; Participations and Assignments.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that no Borrower may assign or otherwise transfer any of its rights
and obligations under this Agreement without the prior written consent of
all the Lenders.
(b) Any Lender may at any time grant to one or more banks
or other institutions (each a "Participant") participating interests in its
WC Commitment or any or all of its Advances. If a Lender grants any such
participating interest to a Participant, whether or not upon notice to the
Borrowers and the Administrative Agent, such Lender shall remain
responsible for the performance of its obligations hereunder, and the
Borrowers and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement pursuant to which any
Lender may grant such a participating interest shall provide that such
Lender shall retain the sole right and responsibility to enforce the
obligations of the Borrowers hereunder including, without limitation, the
right to approve any amendment, modification or waiver of any provision of
this Agreement; provided that such participation agreement may provide that
such Lender will not agree to any modification, amendment or waiver of this
Agreement described in clauses (i)-(ix) of Section 9.01 without the consent
of the Participant. The Borrower agrees that each Participant shall, to the
extent provided in its participation agreement, be entitled to the benefits
of Section's 2.11, 2.13 and 9.04(c) and with respect to its participating
interest. An assignment or other transfer which is not permitted by Section
9.06(c) or 9.06(d) shall be given effect for purposes of this Agreement
only to the extent of a participating interest granted in accordance with
this subsection.
76
(c) Any Lender may at any time assign to one or more
banks or other institutions (each an "Assignee") all, or a proportionate
part (equivalent to an initial Commitment of not less than $10,000,000) of
all, of its rights and obligations under this Agreement and its Note, and
such Assignee shall assume such rights and obligations, pursuant to an
Assignment and Assumption Agreement substantially in the form of Exhibit C
hereto signed by such Assignee and such transferor Lender, with (and
subject to) the subscribed consent of the Parent, the Issuing Bank and the
Administrative Agent (which shall not be unreasonably withheld or delayed);
provided that (i) if an Assignee is an affiliate of such transferor Lender
or was a Lender immediately before such assignment, no such consent shall
be required, (ii) such assignment may, but need not, include rights of the
transferor Lender in respect of outstanding Competitive Bid Advances, (iii)
no such consent of the Parent shall be required if at the time an Event of
Default exists, (iv) such consent shall be deemed to have been given by the
Parent, the Issuing Bank or the Administrative Agent, as the case may be,
if it shall not have responded to a written request for consent within five
Business Days of its receipt thereof, (v) neither the Parent nor any of its
Subsidiaries or Affiliates may be an Assignee and (vi) such assignment
shall be accompanied by a ratably equivalent assignment of the rights and
obligations of the transferor Lender (and its affiliates) under the 364-Day
Revolving Credit Facility. When such instrument has been signed and
delivered by the parties thereto and such Assignee has paid to such
transferor Lender the purchase price agreed between them, such Assignee
shall be a Lender party to this Agreement and shall have all the rights and
obligations of a Lender with a WC Commitment as set forth in such
instrument of assumption, and the transferor Lender shall be released from
its obligations hereunder to a corresponding extent, and no further consent
or action by any party shall be required. Upon the consummation of any
assignment pursuant to this subsection, the transferor Lender, the
Administrative Agent and the Borrowers shall make appropriate arrangements
so that, if required, new Notes are issued to the Assignee. In connection
with any such assignment, the transferor Lender shall pay to the
Administrative Agent an administrative fee for processing such assignment
in the amount of $2,500. If the Assignee is not incorporated under the laws
of the United States or a State thereof, it shall deliver to the Borrowers
and the Administrative Agent certification as to exemption from deduction
or withholding of United States federal income taxes in accordance with
Section 2.13(e).
(d) Any Lender may at any time assign all or any portion
of its rights under this Agreement and its Notes to a Federal Reserve Bank.
No such assignment shall release the transferor Lender from its obligations
hereunder.
(e) No Assignee, Participant or other transferee of any
Lender's rights shall be entitled to receive any greater payment under
Section 2.11 or 2.13 than such Lender would have been entitled to receive
with respect to the rights transferred, unless such transfer is made with
the Borrower's prior written consent or by reason of the provisions of
Section 2.11 requiring such Lender to designate a different Applicable
Lending Office under certain circumstances or at a time when the
circumstances giving rise to such greater payment did not exist.
SECTION 9.07. Designated Lenders. (a) Subject to the
provisions of this subsection (a), any Lender may at any time designate
an Eligible Designee to provide all or a portion of the Committed Advances and
Competitive Bid Advances to be made by such Lender
77
pursuant to this Agreement; provided that such designation shall not be
effective unless the Parent and the Administrative Agent consent thereto
(which consents shall not be unreasonably withheld). When a Lender and its
Eligible Designee shall have signed an agreement substantially in the form
of Exhibit E hereto (a "Designation Agreement") and the Parent and the
Administrative Agent shall have signed their respective consents thereto,
such Eligible Designee shall become a Designated Lender for purposes of
this Agreement. The Designating Lender shall thereafter have the right to
permit such Designated Lender to provide all or a portion of the Committed
Advances and Competitive Bid Advances to be made by such Designating Lender
pursuant to Section 2.01 or 2.03, and the making of such Advances or
portion thereof shall satisfy the obligation of the Designating Lender to
the same extent, and as if, such Advances or portion thereof were made by
the Designating Lender. As to any Advances or portion thereof made by it,
each Designated Lender shall have all the rights that a Lender making such
Advances or portion thereof would have had under this Agreement and
otherwise; provided that (x) its voting rights under this Agreement shall
be exercised solely by its Designating Lender and (y) its Designating
Lender shall remain solely responsible to the other parties hereto for the
performance of such Designated Lender's obligations under this Agreement,
including its obligations in respect of the Advances or portion thereof
made by it. No additional Note shall be required to evidence the Advances
or portion thereof made by a Designated Lender; and the Designating Lender
shall be deemed to hold its Notes as agent for its Designated Lender to the
extent of the Advances or portion thereof funded by such Designated Lender.
Each Designating Lender shall act as administrative agent for its
Designated Lender and give and receive notices and other communications on
its behalf. Any payments for the account of any Designated Lender shall be
paid to its Designating Lender as administrative agent for such Designated
Lender and neither the Borrower nor the Administrative Agent shall be
responsible for any Designating Lender's application of such payments. In
addition, any Designated Lender may, with notice to (but without the prior
written consent of) the Parent and the Administrative Agent, (i) assign all
or portions of its interest in any Advances to its Designating Lender or to
any financial institutions consented to by the Parent and the
Administrative Agent that provide liquidity and/or credit facilities to or
for the account of such Designated Lender to support the funding of
Advances or portions thereof made by it and (ii) disclose on a confidential
basis any non-public information relating to its Advances or portions
thereof to any rating agency, commercial paper dealer or provider of any
guarantee, surety, credit or liquidity enhancement to such Designated
Lender.
(b) Each party to this Agreement agrees that it will not
institute against, or join any other person in instituting against, any
Designated Lender any bankruptcy, insolvency, reorganization or other
similar proceeding under any federal or state bankruptcy or similar law,
for one year and a day after all outstanding senior indebtedness of such
Designated Lender is paid in full. The Designating Lender for each
Designated Lender agrees to indemnify, save, and hold harmless each other
party hereto for any loss, cost, damage and expense arising out of its
inability to institute any such proceeding against such Designated Lender.
This subsection (b) shall survive the termination of this Agreement.
SECTION 9.08. Execution in Counterparts. This Agreement
may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute
one and the same agreement. Delivery of an executed counterpart of a
signature page
78
to this Agreement by telecopier shall be effective as delivery of an
original executed counterpart of this Agreement.
SECTION 9.09. No Liability of the Issuing Bank. Each
Borrower assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letter
of Credit. Neither the Issuing Bank nor any of its officers, directors,
employees or agents shall be liable or responsible for: (a) the use that
may be made of any Letter of Credit or any acts or omissions of any
beneficiary or transferee in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement thereon,
even if such documents should prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (c) payment by the Issuing Bank against
presentation of documents that do not strictly comply with the terms of a
Letter of Credit, including failure of any documents to bear any reference
or adequate reference to the Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any
Letter of Credit, except that such Borrower shall have a claim against the
Issuing Bank, and the Issuing Bank shall be liable to such Borrower, to the
extent of any direct, but not consequential, damages suffered by such
Borrower that such Borrower proves were caused by (i) the Issuing Bank's
willful misconduct or gross negligence as determined in a final,
non-appealable judgment by a court of competent jurisdiction in determining
whether documents presented under any Letter of Credit comply with the
terms of the Letter of Credit or (ii) the Issuing Bank's willful failure to
make lawful payment under a Letter of Credit after the presentation to it
of a draft and certificates strictly complying with the terms and
conditions of the Letter of Credit. In furtherance and not in limitation of
the foregoing, the Issuing Bank may accept documents that appear on their
face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.
SECTION 9.10. Confidentiality. Neither any Agent nor any
Lender shall disclose any Confidential Information to any Person without
the consent of the Parent, other than (a) to such Agent's or such Lender's
Affiliates and their officers, directors, employees, agents and advisors
and to actual or prospective Assignees and Participants, and then only on a
confidential basis, (b) as required by any law, rule or regulation or
judicial process, (c) as requested or required by any state, Federal or
foreign authority or examiner regulating such Lender and (d) to any rating
agency when required by it, provided that, prior to any such disclosure,
such rating agency shall undertake to preserve the confidentiality of any
Confidential Information relating to the Loan Parties received by it from
such Lender.
SECTION 9.11. Jurisdiction, Etc. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or any of the other Loan Documents to
which it is a party, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard
and determined in any such New York State court or, to the extent permitted
by law, in such Federal court. Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any
79
right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or any of the other Loan Documents in the courts
of any jurisdiction.
(b) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it
is a party in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
SECTION 9.12. Governing Law. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State
of New York.
SECTION 9.13. Waiver of Jury Trial. Each of the
Borrowers, the Agents and the Lenders irrevocably waives all right to trial
by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to any of the Loan
Documents, the Advances or the actions of any Agent or any Lender in the
negotiation, administration, performance or enforcement thereof.
SECTION 9.14. Nature of Borrowers' Obligations. Any
payment obligation of the Borrowers or the Loan Parties under Section 2.09,
2.11, 2.13 or 9.04 shall be the joint and several obligation of each
Borrower or Loan Party, as the case may be; provided that ACE Financial
shall be liable only for its appropriately allocable share of any such
obligation.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
ACE LIMITED
The Common Seal of ACE Limited
was hereunto affixed in the presence of:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------------
Director
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. Marshal
-----------------------------------------
Chief Financial Officer
ACE BERMUDA INSURANCE LTD.
The Common Seal of ACE Bermuda
Insurance Ltd. was hereunto affixed
in the presence of:
/s/ ▇▇▇▇▇ Duperreult
-----------------------------------------
Director
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Director
TEMPEST REINSURANCE COMPANY
LIMITED
The Common Seal of Tempest Reinsurance
Company Limited was hereunto affixed
in the presence of:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Director
-----------------------------------------
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Director
-----------------------------------------
ACE INA HOLDINGS INC.
By:/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Title: Director
ACE FINANCIAL SERVICES, INC.
By:/s/ ▇.▇. ▇▇▇▇▇
------------------------------------------
Title: President
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK,
as Administrative Agent
By:/s/ ▇▇▇▇▇ ▇. Dell'Aquila
------------------------------------------
Title: Vice President
MELLON BANK, N.A.,
as Issuing Bank and as Lender
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
Title: Vice President
BANK OF AMERICA, N.A.,
as Co-Syndication Agent and as Lender
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Title: Vice President
THE CHASE MANHATTAN BANK,
as Co-Syndication Agent and as Lender
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Title: Vice President
REVOLVING COMMITMENT VEHICLE
CORPORATION, as a Lender
By: ▇▇▇▇▇▇ Guaranty Trust Company of
New York, as Attorney-in-fact for
Revolving Commitment Vehicle Corporation
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
Title: Vice President
ABN AMRO BANK N.V.
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Title: Authorized Signatory
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Title: Authorized Signatory
THE BANK OF NEW YORK
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------
Title: Assistant Vice President
BANK ONE, NA
By:/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------
Title: Commercial Banking Officer
BARCLAYS BANK PLC
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------
Title: Insurance Banking Director
CITIBANK, N.A.
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Title: Vice President
DEUTSCHE BANK AG NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Title: Managing Director
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------
Title: Director
FIRST UNION NATIONAL BANK
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Title: Vice President
FLEET NATIONAL BANK
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Title: Director
ROYAL BANK OF CANADA
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------------
Title: Senior Manager
THE BANK OF TOKYO-MITSUBISHI, LIMITED
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
Title: Attorney-In-Fact
BANQUE NATIONALE DE PARIS
By:/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Title: Vice President
By:/s/ Laurent Vanderzyppe
------------------------------------------
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------------
Title: Vice President
LLOYDS TSB BANK PLC
By:/s/ Windsor ▇. ▇▇▇▇▇▇
------------------------------------------
Title: Director, Corporate Banking, USA
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Title: Assistant Director
STATE STREET BANK AND TRUST COMPANY
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
Title: Vice President
PRICING SCHEDULE
Each of "Applicable Facility Fee Percentage" and
"Applicable Margin" means, for any day, the rate per annum set forth below
in the row opposite such term and in the column corresponding to the
Pricing Level and Usage that apply on such day:
Pricing Level Level I Level II Level III Level IV Level V Level VI
------------------------ --------- --------- --------- -------- ------- --------
Applicable Facility Fee 0.080% 0.090% 0.100% 0.135% 0.160% 0.250%
Percentage
Applicable Margin
Usage < 33% 0.120% 0.210% 0.250% 0.365% 0.590% 0.750%
Usage > 33% 0.170% 0.260% 0.350% 0.490% 0.715% 1.000%
-
For purposes of this Schedule, the following terms have the
following meanings, subject to the concluding paragraph of this Schedule:
"Level I Pricing" applies on any day on which the Borrower's
long-term debt is rated A+ or higher by S&P or A1 or higher by Moody's.
"Level II Pricing" applies on any day on which (i) the Borrower's
long-term debt is rated A or higher by S&P or A2 or higher by Moody's and
(ii) Level I Pricing does not apply.
"Level III Pricing" applies on any day on which (i) the Borrower's
long-term debt is rated A- or higher by S&P or A3 or higher by Moody's and
(ii) neither Level I Pricing nor Level II Pricing applies.
"Level IV Pricing" applies on any day on which (i) the Borrower's
long-term debt is rated BBB+ or higher by S&P and/or Baa1 or higher by
Moody's and (ii) none of Level I Pricing, Level II Pricing and Level III
Pricing applies.
"Level V Pricing" applies on any day on which (i) the Borrower's
long-term debt is rated BBB or higher by S&P or Baa2 or higher by Moody's
and (ii) none of Level I Pricing, Level II Pricing, Level III Pricing and
Level IV Pricing applies.
"Level VI Pricing" applies on any day if no other Pricing Level
applies on such day.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Pricing Level" refers to the determination of which of Level I,
Level II, Level III, Level IV, Level V or Level VI Pricing applies on any
day.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
The "Usage" applicable to any date is the percentage equivalent of
a fraction the numerator of which is the sum of the aggregate outstanding
principal amount of the Advances at such date and the Available Amounts
under all outstanding Letters of Credit at such date and the denominator of
which is the aggregate amount of the WC Commitments at such date. If for
any reason any Advances or Letters of Credit remain outstanding following
the termination of the WC Commitments, Usage will be deemed to be more
than 33%.
The credit ratings to be utilized for purposes of this Schedule
are those assigned to the senior unsecured long-term debt securities of the
Parent without third-party credit enhancement, and any rating assigned to
any other debt security of the Parent shall be disregarded. The ratings in
effect for any day are those in effect at the close of business on such day.
In the case of split ratings from S&P and Moody's, the rating to
be used to determine the applicable Pricing Level is the higher of the two
(e.g., A+/A2 results in Level I Pricing); provided that if the split is
more than one full rating category, the intermediate (or higher of the two
intermediate ratings) will be used (e.g. A+/A3 results in Level II Pricing
and AA-/A3 results in Level I Pricing); and provided further that unless
the Parent's credit ratings qualify for at least Level V Pricing, no better
Pricing Level will be applicable.
Commitment Schedule
Lender Commitment
Revolving Commitment Vehicle Corporation $17,857,144
Bank of America, N.A. $17,857,143
The Chase Manhattan Bank $17,857,143
ABN AMRO Bank N.V. $14,285,714
The Bank of New York $14,285,714
Bank One, NA $14,285,714
Barclays Bank Plc $14,285,714
Citibank, N.A. $14,285,714
Deutsche Bank AG New York and/or Cayman Islands $14,285,714
Branches
First Union National Bank $14,285,714
Fleet National Bank $14,285,714
Mellon Bank, N.A. $14,285,714
Royal Bank of Canada $14,285,714
The Bank of Tokyo-Mitsubishi, Limited $10,714,286
Banque Nationale de Paris $10,714,286
Credit Lyonnais New York Branch $10,714,286
Lloyds TSB Bank Plc $10,714,286
State Street Bank and Trust Company $10,714,286
Total $250,000,000
Exhibit 4.01(b)
ACE Limited Group of Companies
as of March 1, 2000
Jurisdictions in which
Jurisdiction of Percentage Authorized and Type of
Name Organization Ownership Business
ACE Limited Cayman Islands publicly held Bermuda, holding company
ACE ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇% ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, insurance
Paget Reinsurance International Ltd Bermuda 100% Bermuda, reinsurance
ACE Capital Re International Ltd. Bermuda 100% Bermuda, insurance/reinsurance
ACE KRE Holdings Limited Barbados 100% Barbados, investment holding
ACE Capital Re USA Holdings Incorporated Delaware 100% Delaware, investment holding
ACE Capital Re Overseas Ltd. Bermuda 100% Bermuda, insurance/reinsurance
Lenders Residential Asset Company LLC Delaware 50% Del/MD/VA mtg. Originator
ACE Capital Mortgage Reinsurance Company New York 100% New York, mtg. guaranty
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC# 10021, NY) reinsurance
ACE Capital Title Reinsurance Company New York 100% New York, title guaranty
(EI# 06-143264, NAIC# 50028, NY) reinsurance
ACE Capital Re Inc. New York 100% New York, reinsurance
intermediary
Oasis Investments Limited Bermuda 67% Bermuda, Investment Holding
ACE Capital Re Managers Ltd Bermuda 50% Bermuda, insurance management
ACE Insurance Management Limited Bermuda 100% Bermuda, general services
ACE European Markets Reinsurance Limited Ireland 100% Ireland, reinsurance
ACE European Markets Insurance Limited Ireland 100% Ireland, insurance
Corporate Officers & Directors Assurance Ltd. Bermuda 100% Bermuda, insurance
Tripar Partnership Bermuda 2% Bermuda, investment holding
Oasis Real Estate Company Ltd Bermuda 100% Bermuda, investment holding
Scarborough Property Holdings Ltd Bermuda 40% Bermuda, investment holding
Sovereign Risk Insurance Limited Bermuda 40.5% Bermuda, insurance agent
Tripar Partnership Bermuda 98% Bermuda, investment holding
ACE Realty Holdings Ltd Bermuda 100% Bermuda, investment holding
Oasis Personnel Limited Cayman Islands 100% Cayman Islands, general services
Shipowners Insurance and Guaranty Co. Limited Bermuda 10% Series A Bermuda insurance
Jurisdictions in which
Jurisdiction of Percentage Authorized and Type of
Name Organization Ownership Business
8%Series B
Intrepid Re Holdings Limited Bermuda 100% Bermuda, holding
Intrepid Re Limited Bermuda 100% Bermuda, Reinsurance
ACE Global Markets Limited United Kingdom 100% UK, investment holding
ACE Group Holdings Limited United Kingdom 100% UK, investment holding
ACE Tarquin (Unlimited) United Kingdom 100% UK, investment holding
ACE Capital V Limited United Kingdom 100% UK, Lloyd's corporate member
ACE (CG) Limited United Kingdom 100% UK, investment holding
ACE Underwriting Agencies Limited United Kingdom 100% UK, Lloyd's managing agent
ACE Trustees Limited United Kingdom 100% UK, investment holding
ACE London Group Limited United Kingdom 100% UK, investment holding
ACE Capital Limited United Kingdom 100% UK, Lloyd's corporate member
ACE Capital III Limited United Kingdom 100% UK, Lloyd's corporate member
ACE Capital IV Limited United Kingdom 100% UK, Lloyd's corporate member
ACE London Holdings Limited United Kingdom 100% UK, investment holding
ACE Capital II Limited United Kingdom 100% UK, Lloyd's corporate member
ACE London Investments Limited United Kingdom 100% UK, investment holding
ACE London Aviation Limited United Kingdom 100% UK, Lloyd's managing agent
ACE London Underwriting Limited United Kingdom 100% UK, Lloyd's managing agent
ACE Underwriting Services Limited United Kingdom 100% UK, Lloyd's service company
AGM Underwriting Limited United Kingdom 100% __________________________
ACE London Services Limited United Kingdom 100% UK, service company
ACE Capital VI Limited United Kingdom 100% UK, Lloyd's corporate member
ACE UK Limited United Kingdom 77% UK, investment holding
ACE UK Holdings Limited United Kingdom 100% UK, investment holding
ACE (M) Limited United Kingdom 100% UK, dormant
ACE (ME) Limited United Kingdom 100% UK, dormant
ACE (MI) Limited United Kingdom 100% UK, dormant
ACE (MS) Limited United Kingdom 100% UK, dormant
ACESYS Limited United Kingdom 100% UK, dormant
ACE UK Underwriting Limited United Kingdom 100% Lloyd's managing agent
Underwriting Systems Limited United Kingdom 100% UK, dormant
ACE (PM) Limited United Kingdom 100% UK, investment holding
ACE UK Limited United Kingdom 23% UK, investment holding
ACE Services Ltd. Cayman Islands 100% Cayman Islands, general services
ACE US Holdings, Inc. USA (Delaware) 100% USA, consulting services
ACE Strategic Advisors Inc. USA (Delaware) 100% USA, investment holding
ACE USA Inc. USA (Delaware) 100% USA, investment holding
Jurisdictions in which
Jurisdiction of Percentage Authorized and Type of
Name Organization Ownership Business
CRC Creditor Resources Canada Limited Canada (British 60% Canada, warranties business
Columbia)
Industrial Excess & Surplus Insurance Brokers USA (California) 100% USA, dormant
Industrial Underwriters Insurance Co. USA (Texas) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC# 21075, TX)
▇▇▇▇ International Marketing (L), Inc. Malaysia 60% Malaysia, general services
Westchester Fire Insurance Company USA (New York) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC# 21121, NY)
Westchester Surplus Lines Insurance Co. USA (Georgia) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC# 10173, GA)
Westchester Specialty Services, Inc. USA (Florida) 100% USA, warranties
Westchester Specialty Insurance Services Inc. USA (Nevada) 100% USA, insurance services,
brokering, warranties
SCS Net LLC USA (Delaware) 60% USA, software development
Ameriguard Corporation USA (Ohio) 80% USA, insurance services
WDH Corporation USA (Ohio) 80% USA, insurance services
Dimension Services Corporation USA (Ohio) 80% USA, warranties
Dimension Holdings Inc. USA (Ohio) 80% USA, insurance services
CGA Group Limited Bermuda 10.71% Bermuda, investment holding
CGA Investment Management, Inc. USA (Delaware) 100% USA, investment
Commercial Guaranty Assurance Ltd. Bermuda 100% Bermuda, insurance
Oasis Insurance Services Ltd Bermuda 100% Bermuda, general services
Tempest Reinsurance Company Limited Bermuda 100% Bermuda, Puerto Rico, reinsurance
▇▇▇▇▇▇▇▇ Services Limited Bermuda 100% Bermuda, general services
Oasis Investments Limited Bermuda 33% Bermuda, investment holding
Oasis US Inc. Delaware 100% USA, general services
St. ▇▇▇▇▇▇ Holdings Ltd Cayman Islands 10.71% Cayman Islands, investment
holding
St. ▇▇▇▇▇▇ Investments Ltd. Cayman Islands 100% Cayman Islands, investment
holding
ACE INA Holdings, Inc. USA (Delaware) 20% USA, investment holding
ACE Prime Holdings, Inc. USA (Delaware) 100% USA, investment holding
ACE INA Holdings, Inc. USA (Delaware) 80% USA, investment holding
ACE Seguros S.A. (Argentina) Argentina 99.9% Argentina, Insurance
INA Corporation USA (Pennsylvania) 100% USA, investment holding
Tempest Re USA, Inc. USA (Connecticut) 100% Connecticut, underwriting manager
ACE INA Properties Inc. USA (Delaware) 100% USA, holding company
Jurisdiction in which
Name Jurisdiction of Percentage Authorized and Type of
Conference Facilities, Inc. Organization Ownership Business
USA (Pennsylvania) 100% USA, owns & operates corporate
facilities
INA Tax Benefits Reporting, Inc. USA (Delaware) 100% USA, tax info & 3d party reporting
INA Financial Corporation USA (Delaware) 100% USA, investment holding
Brandywine Holdings Corporation USA (Delaware) 100% USA, holding company
Brandywine Run-Off Services, Inc. USA (Delaware) 100% USA, management company for
1792 company
ASSUREX Development Corporation USA (Ohio) 11.011% USA, provides loans to insurance
agents
International Surplus Adjusting Services USA (California) 100% USA, claims adjusting services
Western Agency Management, Inc. USA (California) 100% USA, fire & casualty agent
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Company Pacific USA (Delaware) 100% USA, managing general agency
Coast
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Company Pacific USA (Illinois) 100% USA, managing general agency
Coast of Illinois
Century Indemnity Company USA (Pennsylvania) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #20710, PA)
Century Reinsurance Company USA (Pennsylvania) 100% USA, reinsurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #35130, PA)
ACE American Reinsurance Company USA (Pennsylvania) 100% USA, reinsurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC# 22705, PA)
Brandywine Reinsurance Company S.A.- Belgium 100% Belgium, reinsurance
N.V.
The 1792 Company USA (Delaware) 100% USA, (former underwriting
member of New York Insurance
Exchange)
Century International Reinsurance Company Bermuda 100% Bermuda, insurance & reinsurance
Ltd.
Brandywine International Brokers Ltd. Bermuda 100% Bermuda, insurance broker
INA Holdings Corporation USA (Delaware) 100% USA, holding company
PDCN Legal Management Company, Inc. USA (Delaware) 100% USA, in-house law firm
Administrator
INA Reinsurance Company, Ltd. Bermuda 100% Bermuda, reinsurance
ACE INA Financial Institution Solutions, Inc USA (Delaware) 100% USA, flood plain determination &
other services to financial
institutions
ESIS, Inc. USA (California) 100% USA, markets risk management
programs
Jurisdictions in which
Jurisdiction of Percentage Authorized and Type of
Name Organization Ownership Business
ACE INA Excess and Surplus Insurance USA (Georgia) 100% USA, excess & surplus lines broker
Services, Inc. (GA)
ACE INA Excess and Surplus Insurance USA (Pennsylvania) 100% USA, excess & surplus lines broker
Services, Inc. (PA)
NewMarkets Insurance Agency, Inc. USA (Delaware) 100% USA, managing general agency
ACE INA Excess and Surplus Insurance USA (California) 100% USA, excess & surplus lines broker
Services, Inc. (CA)
ACE INA Excess and Surplus Insurance USA (Illinois) 100% USA, excess & surplus lines broker
Services, Inc. (IL)
Excess and Surplus Insurance Services, Inc. USA (Texas) 100% USA, managing general agency
INAC Corp. USA (Delaware) 100% USA, premium finance company
INAC Corp. of California USA (California) 100% USA, premium finance company
Global Surety Network, Inc. USA (Delaware) 100% USA, management company &
underwriting services
Marketdyne International, Inc. USA (Delaware) 100% USA, marketing insurance products
ACE INA Railroad Insurance Brokers, Inc. USA (California) 100% USA, reinsurance
Recovery Services International, Inc. USA (Delaware) 100% USA, subrogation, collection &
recovery services
RSI Health Care Recovery Inc. USA (Delaware) 100% USA, subrogation, collection &
recovery services
Indemnity Insurance Company of North USA (Pennsylvania) 100% USA, Puerto Rico, USVI, insurance
America
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC# 43575, PA)
ACE Indemnity Insurance Company USA (Pennsylvania) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #10030, PA)
Allied Insurance Company USA (California) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #36528, CA)
ACE American Insurance Company USA (Pennsylvania) 100% USA, Korea, Puerto Rico, USVI,
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC# 22667, PA) Guam, insurance
Pacific Employers Insurance Company USA (Pennsylvania) 100% USA, USVI, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC# 22748, PA)
ACE Insurance Company of Texas USA (Texas) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #22721,
22920, TX)
Illinois Union Insurance Company USA (Illinois) 100% USA, surplus lines insurer
(EI#▇▇-▇▇▇▇▇▇▇, NAIC #27960, IL)
INAMAR Insurance Underwriting Agency, Inc. USA (New Jersey) 100% USA, insurance agency
Jurisdictions in which
Jurisdiction of Percentage Authorized and Type of
Name Organization Ownership Business
INAMAR Insurance Underwriting USA (Massachusetts) 100% USA, general agency
Agency of Massachusetts
INAMAR Insurance Underwriting USA (Texas) 100% USA, general agency
Agency of Texas
INAMAR Insurance Underwriting USA (Ohio) 100% USA, general agency
Agency, Inc. of Ohio
Insurance Company of North America USA (Pennsylvania) 100% USA, Guam, Northern Mariana
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #22713, PA) Islands, Philippines, Puerto Rico,
Taiwan, insurance
Bankers Standard Insurance Company USA (Pennsylvania) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #18279, PA)
Bankers Standard Fire and Marine USA (Pennsylvania) 100% USA, insurance
Company
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #20591, PA)
ACE Property and Casualty Insurance Company USA (Connecticut) 100% USA, Puerto Rico, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #20699, CT)
ACE Employers Insurance Company USA (Pennsylvania) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #38741, PA)
ACE Insurance Company of Ohio USA (Ohio) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #22764, OH)
INA Surplus Insurance Company USA (Pennsylvania) 100% USA, reinsurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #42072, PA)
Jurisdiction in which
Jurisdiction of Percentage Authorized and Type of
Name Organization Ownership Business
ACE Fire Underwriters Insurance USA (Pennsylvania) 100% USA, insurance
Company
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #20702, PA)
Atlantic Employers Insurance Company USA (New Jersey) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #38938, NJ)
Cover-All Technologies, Inc. USA (Delaware) 7.41% USA, develop software products
for insurance industry
▇▇▇▇, Incorporated USA (Texas) 100% USA, general agency & attorney-
in-fact for CIGNA Lloyds
ACE American Lloyds Insurance USA (Texas) 100% USA, Lloyds Association
Company (Sponsored Lloyds
Association)
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #18511,
TX)
ACE Insurance Company of Illinois USA (Illinois) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #22691, IL)
ACE Insurance Company of the Midwest USA (Indiana) 100% USA, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #26417, IN)
INAPRO, Inc. USA (Delaware) 100% USA, insurance management
services & underwriting
Reinsurance Solutions International, LLC USA (Delaware) 50% USA, reinsurance intermediary
American Adjustment Company, Inc. USA (Delaware) 100% USA, run-off of automobile
guaranty loans
American Lenders Facilities, Inc. USA (California) 100% USA, collection & loan servicing
for third parties
ACE INA International Holdings, Ltd. USA (Delaware) 100% USA, international insurance &
financial holding company
ACE Synergy Insurance Berhad Malaysia 51% Malaysia, insurance
ACE Seguradora S.A. Macau 100% Macau, insurance
Chilena Consolidata Seguros Generales, Chile .65% Chile, insurance
S.A.
INACAN Holdings, Ltd. Canada 100% Canada, insurance holding
ACE INA Insurance (Canada) Canada 100% Canada, insurance & reinsurance
ACE Insurance Limited (S. Africa) South Africa 100% South Africa, insurance
Name Jurisdictions in which
Jurisdiction of Percentage Authorized and Type of
Organization Ownership Business
Seguros CIGNA, S.A. Mexico 99.9% Mexico, insurance
ACE Insurance Limited (New Zealand) New Zealand 100% New Zealand, insurance &
reinsurance
Cover Direct, Inc. USA (Delaware) 100% Japan, direct marketing service
company
▇▇▇▇▇▇▇▇ ▇▇▇▇ Company Ltd. Bermuda 20% Bermuda, investment holding
ACE INA G.B. Holdings, Ltd. USA (Delaware) 100% Delaware, UK, insurance holding
Brandywine Reinsurance Co. (UK) Ltd United Kingdom 100% UK, reinsurance
ACE INA Services U. K. Limited United Kingdom 100% UK, computer services for affiliates
ACE INA UK Retirement Savings Plan United Kingdom 100% UK, investment holding
Insurance Company of North America United Kingdom 100% UK, Greece, insurance
(U.K.) Ltd
INACAP Sociedad Anonima ▇▇▇▇▇▇▇▇▇ ▇▇▇% ▇▇▇▇▇▇▇▇▇, corporation
INACAP Reaseguros, Sociedad Anonima ▇▇▇▇▇▇▇▇▇ ▇▇▇% ▇▇▇▇▇▇▇▇▇, corporation
Century Inversiones, S.A. Panama 100% Panama, reinsurance administrator
ACE INA de Venezuela Intermediaros de Venezuela 100% Venezuela, reinsurance
Reaseguros S A intermediary
ARABIA ACE Insurance Co. Limited E C Bahrain 25% Saudi Arabia, insurance
&reinsurance
ACE Insurance Limited (Australia) Australia 100% Australia, Pakistan, Thailand,
Solomon Islands, Vanuatu,
insurance & reinsurance
ACE Insurance Limited (Singapore) Singapore 100% Singapore, insurance
ACE INA Superannuation Pty. Limited Australia 100% Australia, corporate trustee for
CIGNA Australia superannuation
plan
ACE Seguros S. A. (Chile) Chile 99.13% Chile, insurance
ACE INA Overseas Insurance Co Ltd Bermuda 100% Bermuda, insurance & reinsurance
ACE Insurance (Japan) Japan 100% Japan, insurance & reinsurance
ACE INA Marketing Group C.A. Venezuela 100% Venezuela, services & direct
marketing
ACE INA Overseas Holdings Inc. USA (Delaware) 100% Delaware, holding company
ACE Insurance S.A.-N.V. Belgium 100% Europe, insurance
ACE Insurance Company (Puerto Rico) Puerto Rico 100% Puerto Rico, insurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC #30953, PR)
ACE Insurance Limited (Hong Kong) Hong Kong 100% Hong Kong, insurance
ACE INA Bermuda Ins Managers Ltd. Bermuda 100% Bermuda, management services for
non-affiliates
Jurisdictions in which
Jurisdiction of Percentage Authorized and Type of
Name Organization Ownership Business
DELPANAMA S.A. Panama 100% Panama, holding company
INAMEX S.A. Mexico 100% Mexico, reinsurance broker
Maritime General Ins Company Ltd. Trinidad 8.06% Trinidad, insurance
AFIA Finance Corporation USA (Delaware) 100% Delaware, insurance holding
AFIA Sociedad Anonima Mexico 100% Mexico, service company
AFIA Venezolana C.A. Venezuela 100% Venezuela, inactive claims &
settling agent
ACE ICNA - Italy Societa a Italy 100% Italy, legal representative for
Responsabilita Limitata CIGNA
Insurance Company of Europe,
S.A.-N.V.
ACE INA Thai Company Limited Thailand 55% Thailand, broker, surveyor &
claims settling agency
ACE Servicios, S.A. (Argentina) Argentina 100% Argentina, insurance holding
ESIS International Asesorias Limitada Chile 100% Chile, claims & settling agent
Fire, Equity & General Ins Co. Ltd. Nigeria 6.25% Nigeria, insurance
INDI Servicios C. Ltda. Ecuador 100% Ecuador, claims & settling agent
Inversiones Continental S.A. de C.V. Honduras 1.29% Honduras, insurance holding
P.T. ACE INA Insurance (Indonesia) Indonesia 53.51% Indonesia, insurance
RIYAD Insurance Co. Ltd. Bermuda 80% Bermuda, insurance
▇▇▇▇▇▇ Private Ltd. Singapore 100% Singapore, management &
computer service bureau
AFIA (INA) Corporation Limited USA (Delaware) 100% Delaware, holding company
AFIA Unincorporated 60% Association for international
association insurance
AFIA (ACE) Corporation Limited USA (Delaware) 100% Delaware, holding company
AFIA Unincorporated 40% Association for international
association insurance
Compania Anonima de Seguros "▇▇▇▇▇" Venezuela 5.6% Venezuela, insurance
ACE Seguros S.A. (Colombia) Colombia 85.763% Colombia, insurance
INAVEN, C.A. "Venezuela" Venezuela 100% Venezuela, corporation
La Positiva Co Nacional de Seguros Sociedad Peru 10.79% Peru, insurance
Anonima
Seguros Azteca, S.A. Mexico 1.36% Mexico, insurance & reinsurance
Seguros Comercial America, S.A. de C.V. Mexico .031% Mexico, insurance
Reaseguradora Nuevo Mundo S A Panama 3.7246% Panama, reinsurance
Amazonas Co Anonima de Seguros Ecuador 1.423% Ecuador, insurance
ACE (Barbados) Holdings Limited Barbados 100% Barbados, holding company
Jurisdictions in which
Jurisdiction of Percentage Authorized and Type of
Name Organization Ownership Business
ACE Financial Services, Inc. Delaware 100% Delaware, insurance holding co
Capital Re Financial Products Corporation Delaware 100% Del, financial products
Capital RE LLC Turks & Caicos 100% Turks & Caicos, holding co
Capital RE (UK) Holdings/ACE (CR) Holdings United Kingdom 100% UK & holding co
CRC Capital, Ltd./ACE Capital VII Limited United Kingdom 100% UK, Lloyd's capital vehicle
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇./▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 100% UK, holding company
C.I. de Rougemont & Co. Ltd./ACE (CIDR) Limited United Kingdom 100% UK, Lloyd's agency
RGB Underwriting Services, Ltd./ United Kingdom 100% UK, Lloyd's agency
ACE Agencies Limited
RGB Underwriting Agencies, Ltd./Global Life United Kingdom 100% UK, Lloyd's agency
Services Limited
ACE Guaranty Re Inc. Maryland 100% USA, Reinsurer
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC # 30180, MD)
ACE Risk Assurance Company Maryland 100% Maryland, reinsurance
(EI# ▇▇-▇▇▇▇▇▇▇, NAIC # 10943, MD)
ACE Financial Solutions, Inc. Delaware 100% Delaware, corporation
Schedule 5.02(a)
1. Liens securing letters of credit issued by Citibank for the
account of Cigna Europe in an aggregate stated amount not
exceeding $16,000,000 (subject to currency fluctuations).
2. Liens securing letters of credit issued by Citibank for the account
of INA(UK) in an aggregate stated amount not exceeding $8,000,000.
3. $70,000,000 of Cigna Overseas Insurance Company investments are
pledged to Domestic Pool companies under a Regulation 114 trust.
4. Lien arising under a Subordination Agreement dated as of October
27, 1998 among ACE US Holdings, Inc., ACE Limited and The Chase
Manhattan Bank encumbering ACE US Holdings, Inc.'s rights under
the Subordinated Loan Agreement dated as of October 27, 1998 among
ACE US Holdings, Inc., ACE Bermuda Insurance Ltd. and United
States Trust Company of New York, as trustee under the Indenture
dated October 27, 1998 of ACE US Holdings, Inc.
5. Liens securing Letter of Credit Facility Agreements dated
November 24, 1998 among ACE Limited, ACE Bermuda Insurance, Ltd.,
certain other financial institutions and Citibank International plc,
as Agent and Security Trustee.
EXHIBIT A-1
FORM OF
COMMITTED NOTE
$______________ Dated: _____________ __, 2000
FOR VALUE RECEIVED, the undersigned, __________________, a __________
corporation (the "Obligor"), HEREBY PROMISES TO PAY to the order of
________________ (the "Lender") for the account of its Applicable Lending
Office (as defined in the Credit Agreement referred to below) the aggregate
principal amount of the Committed Advances (as defined below) owing to the
Lender by the Obligor pursuant to the Amended and Restated Five-Year Credit
Agreement dated as of May 8, 2000 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Credit
Agreement"; terms defined therein, unless otherwise defined herein, being
used herein as therein defined) among ACE Limited, ACE Bermuda Insurance
Ltd., Tempest Reinsurance Company Limited, ACE INA Holdings Inc. and ACE
Financial Services, Inc., as Borrowers, the Initial Lenders, Mellon Bank,
N.A., as Issuing Bank, Bank of America, N.A. and The Chase Manhattan Bank,
as Co-Syndication Agents, and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
Administrative Agent, payable at such times as are specified in the Credit
Agreement.
The Obligor promises to pay interest on the unpaid principal amount
of each Committed Advance from the date of such Committed Advance until such
principal amount is paid in full, at such interest rates, and payable at such
times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
Administrative Agent, at such location as shall be designated by the
Administrative Agent in a written notice to the Obligor in same day funds.
Each Committed Advance owing to the Lender by the Obligor and the maturity
thereof, and all payments made on account of principal thereof, shall be
recorded by the Lender and, prior to any transfer hereof, endorsed on the
grid attached hereto, which is part of this Promissory Note; provided,
however, that the failure of the Lender to make any such recordation or
endorsement shall not affect the obligations of the Obligor under this
Promissory Note.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, (i) provides for the making of advances (the "Committed
Advances") by the Lender to the Obligor from time to time in an aggregate
amount not to exceed
at any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Obligor resulting from each such Committed Advance
being evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified. The
obligations of the Obligor under this Promissory Note and the other Loan
Documents, and the obligations of the other Loan Parties under the Loan
Documents, are unconditionally guaranteed by the Guarantors referred to in
the Credit Agreement.
The Obligor hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York.
[NAME OF OBLIGOR]
By
--------------------------------------
Title:
A-1-2
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of Unpaid
Amount of Principal Paid or Principal Notation
Date Advance Prepaid Balance Made By
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF COMPETITIVE BID NOTE
$______________ Dated: _____________ __, ____
FOR VALUE RECEIVED, the undersigned, __________________, a
__________ corporation (the "Obligor"), HEREBY PROMISES TO PAY
_____________ (the "Lender") for the account of its Applicable Lending Office
(as defined in the Credit Agreement referred to below) the aggregate principal
amount of the Competitive Bid Advances (as defined below) owing to the Lender
by the Obligor pursuant to the Amended and Restated Five-Year Credit
Agreement dated as of May 8, 2000 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Credit Agreement";
terms defined therein, unless otherwise defined herein, being used herein as
therein defined) among ACE Limited, ACE Bermuda Insurance Ltd., Tempest
Reinsurance Company Limited, ACE INA Holdings Inc. and ACE Financial
Services, Inc., the Initial Lenders, Mellon Bank, N.A., as Issuing Bank, Bank
of America, N.A. and The Chase Manhattan Bank as Co- Syndication Agents, and
▇▇▇▇▇▇ Guaranty Trust Company of New York, as Administrative Agent,
payable at such times as are specified in the Credit Agreement.
The Obligor promises to pay interest on the unpaid principal amount of
each Competitive Bid Advance from the date of such Competitive Bid Advance
until such principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
Administrative Agent, at such location as shall be designated by the
Administrative Agent in a written notice to the Obligor in same day funds.
Each Competitive Bid Advance owing to the Lender by the Obligor and the
maturity thereof, and all payments made on account of principal thereof,
shall be recorded by the Lender and, prior to any transfer hereof, endorsed
on the grid attached hereto, which is part of this Promissory Note;
provided, however, that the failure of the Lender to make any such
recordation or endorsement shall not affect the obligations of the Obligor
under this Promissory Note.
This Promissory Note is one of the Competitive Bid Notes referred to
in, and is entitled to the benefits of, the Credit Agreement. The Credit
Agreement, among other things, (i) provides for the making of advances
(the "Competitive Bid Advances") by the Lender to the Obligor in an amount not
to exceed the U.S. dollar amount first above mentioned, the indebtedness of
the Obligor resulting
from such Competitive Bid Advances being evidenced by this Promissory Note,
and (ii) contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events and also for prepayments on account
of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified. The obligations of the Obligor under this
Promissory Note and the other Loan Documents, are unconditionally
guaranteed by the Guarantors referred to in the Credit Agreement.
The Obligor hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York.
[NAME OF OBLIGOR]
By
--------------------------------------
Title:
A-2-2
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of Unpaid
Amount of Principal Paid or Principal Notation
Date Advance Prepaid Balance Made By
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF
NOTICE OF COMMITTED BORROWING
▇▇▇▇▇▇ Guaranty Trust Company of New York,
as Administrative Agent
under the Credit Agreement
referred to below
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[Date]
Attention: [ ▇▇▇▇ ▇▇▇▇]
Ladies and Gentlemen:
The undersigned, [Name of Borrower], refers to the Amended and
Restated Five-Year Credit Agreement dated as of May 8, 2000 (as amended,
amended and restated, supplemented or otherwise modified from time to time,
the "Credit Agreement"; the terms defined therein being used herein as
therein defined), among ACE Limited, ACE Bermuda Insurance Ltd., Tempest
Reinsurance Company Limited, ACE INA Holdings Inc. and ACE Financial
Services, Inc., the Initial Lenders, Mellon Bank, N.A., as Issuing Bank,
Bank of America, N.A. and The Chase Manhattan Bank, as Co-Syndication
Agents, and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Administrative
Agent, and hereby gives you notice, irrevocably, pursuant to Section 2.02
of the Credit Agreement that the undersigned hereby requests a Borrowing
under the Credit Agreement, and in that connection sets forth below the
information relating to such Borrowing (the "Proposed Borrowing") as
required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is ______ __, ____.
(ii) The Proposed Borrowing is to be comprised of [Base Rate
Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is $________.
[(iv) The initial Interest Period for each Eurodollar Rate Advance
made as part of the Proposed Borrowing is _______
week[s]/month[s].]
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed
Borrowing:
(A) The representations and warranties contained in each Loan
Document are correct in all material respects on and as of
the date of the Proposed Borrowing, before and after giving
effect to the Proposed Borrowing and to the application of
the proceeds therefrom, as though made on and as of such
date, other than any such representations or warranties
that, by their terms, refer to a specific date other than
the date of the Proposed Borrowing, in which case, as of
such specific date.
(B) No Default has occurred and is continuing, or would result
from such Proposed Borrowing or from the application of the
proceeds therefrom.
Delivery of an executed counterpart of this Notice of Borrowing by
telecopier shall be effective as of an original executed counterpart of this
Notice of Borrowing.
Very truly yours,
[NAME OF BORROWER]
By
------------------------------------------------
Title:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF NOTICE
OF COMPETITIVE
BID BORROWING
▇▇▇▇▇▇ Guaranty Trust Company of New York,
as Administrative Agent
under the Credit Agreement
referred to below
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[Date]
Attention: [▇▇▇▇ ▇▇▇▇]
Ladies and Gentlemen:
The undersigned, [Name of Borrower], refers to the Amended and
Restated Five-Year Credit Agreement dated as of May 8, 2000 (as amended,
amended and restated, supplemented or otherwise modified from time to time,
the "Credit Agreement"; the terms defined therein being used herein as
therein defined), among ACE Limited, ACE Bermuda Insurance Ltd., Tempest
Reinsurance Company Limited, ACE INA Holdings Inc. and ACE Financial
Services, Inc., the Initial Lenders, Mellon Bank, N.A., as Issuing Bank,
Bank of America, N.A. and The Chase Manhattan Bank, as Co-Syndication
Agents, and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Administrative
Agent, and hereby gives you notice, irrevocably, pursuant to Section 2.03
of the Credit Agreement that the undersigned hereby requests a Borrowing
under the Credit Agreement, and in that connection sets forth below the
information relating to such Borrowing (the "Proposed Competitive Bid
Borrowing") as required by Section 2.03(a) of the Credit Agreement:
(A) Date of the Proposed
Competitive Bid Borrowing ___________________
(B) Amount of the Proposed
Competitive Bid Borrowing ___________________
(C) Type of Advances comprising the
Proposed Competitive Bid
Borrowing [Fixed Rate Advances]
[LIBO Rate Advances] ___________________
(D) [LIBO Interest Period for the
LIBO Rate Advances] [Maturity
Date for Fixed Rate Advances]
made as part of the Proposed
Competitive Bid Borrowing ___________________
(E) Interest Payment Date(s) of
Proposed Competitive Bid
Borrowing ___________________
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the proposed
Competitive Bid Borrowing:
(A) The representations and warranties contained in each Loan
Document are correct in all material respects on and as of the date of the
Proposed Competitive Bid Borrowing before and after giving effect to the
Proposed Competitive Bid Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, other than any such
representations or warranties that, by their terms, refer to a specific date
other than the date of the Proposed Competitive Bid Borrowing, in which case,
as of such specific date.
(B) No Default has occurred and is continuing, or would result
from such Proposed Competitive Bid Borrowing or from the application of the
proceeds therefrom.
Delivery of an executed counterpart of this Notice of Competitive Bid
Borrowing by telecopier shall be effective as delivery of an original executed
counterpart of this Notice of Competitive Bid Borrowing.
Very truly yours,
[NAME OF BORROWER]
By ____________________________
Title
* This page (B-2-2) blacklined due to error in transferring exhibits to DPW
system.
B-2-2
EXHIBIT C
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 20__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), ACE LIMITED (the "Parent"),
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the
"Agent") and MELLON BANK, N.A., as Issuing Bank.
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, this Assignment and Assumption Agreement (the
"Agreement") relates to the Amended and Restated Five-Year Credit Agreement
dated as of May 8, 2000 among the Parent and other Borrowers party thereto, the
Assignor and the other Lenders party thereto, as Lenders, the Co-Syndication
Agents and the Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
WC Commitment to make Committed Advances and Competitive Bid Advances
to the Borrowers and participate in Letters of Credit in an aggregate principal
amount at any time outstanding not to exceed $___,000,000;
WHEREAS, Committed Advances and Competitive Bid Advances made
to the Borrowers by the Assignor under the Credit Agreement in the aggregate
principal amount of $__________ are outstanding at the date hereof;
WHEREAS, Letters of Credit with a total amount available for drawing
thereunder of $__________ are outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Credit Agreement and the other Loan Documents
in respect of a portion of its WC Commitment thereunder in an amount equal to
$__________ (the "Assigned Amount"), together with a corresponding portion
of its outstanding Committed Advances, Competitive Bid Advances and Letter of
Credit Exposure, and the Assignee proposes to accept assignment of such rights
and assume the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement and the
other Loan Documents to the extent of the Assigned Amount, and the Assignee
hereby accepts such assignment from the Assignor and assumes all of the
obligations of the Assignor under the Credit Agreement to the extent of the
Assigned Amount, including the purchase from the Assignor of the corresponding
portion of the principal amount of the Committed Advances and Competitive Bid
Advances made by, and Letter of Credit Exposure of, the Assignor outstanding at
the date hereof. Upon the execution and delivery hereof by the Assignor, the
Assignee, the Parent, the Agent and the Issuing Bank and the payment of the
amounts specified in Section 3 required to be paid on the date hereof (i) the
Assignee shall, as of the date hereof, succeed to the rights and be obligated to
perform the obligations of a Lender under the Credit Agreement with a WC
Commitment in an amount equal to the Assigned Amount, and (ii) the WC
Commitment of the Assignor shall, as of the date hereof, be reduced by a like
amount and the Assignor released from its obligations under the Credit
Agreement to the extent such obligations have been assumed by the Assignee.
The assignment provided for herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on
the date hereof in Federal funds the amount heretofore agreed between
them./1/ It is understood that facility and Letter of Credit fees accrued
to the date hereof in respect of the Assigned Amount are for the account of
the Assignor and such fees accruing from and including the date hereof are
for the account of the Assignee. Each of the Assignor and the Assignee
hereby agrees that if it receives any amount under the Credit Agreement
which is for the account of the other party hereto, it shall receive the
same for the account of such other party to the extent of such other
party's interest therein and shall promptly pay the same to such other
party.
[SECTION 4. Consent of the Parent, the Issuing Bank and the Agent.
This Agreement is conditioned upon the consent of the Parent, the Issuing Bank
and the Agent pursuant to Section 9.06(c) of the Credit Agreement. The
execution of this Agreement by the Parent and the Agent is evidence of this
consent.]
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency, financial condition or
statements of the Borrowers or any of their respective Subsidiaries, or the
validity and enforceability of the
------------
/1/ Amount should combine principal together with accrued interest
and breakage compensation, if any, to be paid by the Assignee, net
of any portion of any upfront fee to be paid by the Assignor to the
Assignee. It may be preferable in an appropriate case to specify these
amounts generically or by formula rather than as a fixed sum.
C-2
obligations of the Borrowers or any of their respective Subsidiaries in
respect of any Loan Document. The Assignee acknowledges that it has,
independently and without reliance on the Assignor, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business,
affairs and financial condition of the Borrowers and their respective
Subsidiaries.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By_________________________
Title:
[ASSIGNEE]
By__________________________
Title:
ACE LIMITED
By__________________________
Title:
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK
By__________________________
Title:
MELLON BANK, N.A.
By__________________________
Title
C-3
EXHIBIT D-1
FORM OF OPINION OF CAYMAN ISLANDS COUNSEL
TO THE PARENT
Effective Date:
May 8, 2000
To the parties listed in
Schedule A attached hereto
Dear Sirs,
Re: ACE Limited
We have acted as Cayman Islands counsel for ACE Limited (the
"Company") in connection with its entry into the Credit Agreement referred
to below. This opinion is being rendered to you at the request of our
client pursuant to Section 3.01 of the Credit Agreement. Unless the context
otherwise requires, terms defined in the Credit Agreement are used herein
as therein defined.
We have reviewed, inter alia, originals, drafts or copies of the
following documents:
(a) the Articles of Association of the Company;
(b) the corporate records of the Company maintained at its
registered office in the Cayman Islands;
(c) a Certificate of the Secretary of the Company (the "Secretary's
Certificate") in the form attached certifying, inter alia, that
certain resolutions (the "Resolutions") were passed by the Board
of Directors of the Company on______________, 2000;
(d) a Certificate of Good Standing issued by the Registrar of
Companies of the Cayman Islands dated _______________, 2000;
(e) an amended and restated five-year credit agreement for
$250,000,000 between the Company, ACE Bermuda, Tempest,
ACE INA Holdings Inc. and ACE Financial Services, Inc. as
Borrowers, the Initial Lenders named therein, Mellon Bank, N.A.
as issuing bank, Bank of America, N.A. and The Chase Manhattan
Bank as Co-Syndication Agents and ▇▇▇▇▇▇ Guaranty Trust
Company of New York as Administrative Agent dated 8 May,
2000 (the "Credit Agreement").
The following opinion is given only as to circumstances existing on
the date hereof and known to us and as to the laws of the Cayman Islands as the
same are in force at the date hereof. The following Opinion is given in
reliance upon factual matters as described in the Secretary's Certificate
and on the basis of the other documents referred to in paragraphs (a)-(d)
above. Further, we have based our opinion upon the following assumptions,
which we have not independently verified:
(a) the due authorization, execution and delivery of the Credit
Agreement by the other parties thereto;
(b) the Credit Agreement constitutes or will constitute at all
relevant times the legal, valid, binding and enforceable
obligations of the parties thereto under the laws of New York
and all other relevant laws (other than the laws of the
Cayman Islands);
(c) the choice of laws of New York as the governing law of the
Credit Agreement has been made in good faith and would be
regarded as a valid and binding selection which will be
upheld in the courts of New York as a matter of New York law
and all other relevant laws (other than the laws of the
Cayman Islands);
(d) the genuineness of all documents, the authenticity of the
signatures and seals thereon and the conformity of all copies
with the originals thereof;
(e) the power, authority and legal right of the parties under all
relevant laws and regulations (other than the laws of the
Cayman Islands) to enter into, execute and perform their
respective obligations under the Credit Agreement; and
(f) there is nothing under any law (other than the laws of the
Cayman Islands) which would or might affect the opinions
hereinafter appearing. Specifically, we have made no
independent investigation of the laws of New York or Bermuda.
Upon the basis of the foregoing, we are of the opinion that:
1. The Company is a company limited by shares duly incorporated,
validly existing and in good standing under the laws of the Cayman Islands, and
D-1-2
has all corporate powers required to carry on its business as a holding
company in accordance with its Memorandum and Articles of Association. The
Company is not required to obtain any license, authorization, consent or
approval in the Cayman Islands in order to carry on such business.
2. The execution, delivery and performance by the Company of the
Credit Agreement and when executed and delivered by the Company thereunder,
the Notes are within the Company's corporate powers and have been duly
authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any Cayman Islands governmental body, agency or
official and do not contravene, or constitute a default under, any
provision of Cayman Islands law or regulation or of the Memorandum and
Articles of Association of the Company or, so far as we are aware, of any
judgment, injunction, order or decree of the Cayman Islands authorities
binding upon the Company.
3. The Credit Agreement and each Note of the Company (assuming it
has been or will be duly executed and delivered on behalf of the Company by an
Authorised Officer of the Company referred to in the Resolutions) constitutes a
valid and binding agreement or obligation of the Company enforceable in
accordance with its terms. The expression "enforceable" as used above means
that the obligations of the Company under the Credit Agreement are of a type
which the courts of the Cayman Islands will enforce. It does not necessarily
mean that those obligations will be enforced in all circumstances in accordance
with their terms, in particular:
(i) enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganization or other laws of general
application relating to or affecting the rights of
creditors generally;
(ii) enforcement may be limited by general principles of
equity; discretionary equitable remedies such as
specific performance and injunction may not, for
example, be available where damages are considered to
be an adequate remedy;
(iii) claims may become barred under statutes of limitation
or may be or become subject to defenses of set-off or
counterclaim;
(iv) where obligations are to be performed in a jurisdiction
outside of the Cayman Islands they may not be
enforceable in the Cayman Islands to the extent that
performance would be illegal under the laws of the
jurisdiction in question;
D-1-3
(v) a certificate, determination, calculation or
designation by any party to the Credit Agreement as to
any matter provided therein might be held by a Cayman
Islands court not to be conclusive, final and binding
in the event of manifest error;
(vi) obligations to make payments that are registered by a
Cayman Islands court as a penalty will not be
enforceable;
(vii) an award of a court of the Cayman Islands may be
required to be made in Cayman Islands dollars although
the courts of the Cayman Islands as a matter of practice
make awards in United States dollars where that is the
designated currency of the obligation in question;
currency indemnity provisions have not been tested, so
far as we are aware, in the courts of the Cayman
Islands;
(viii) Cayman Islands stamp duty will be payable if the Credit
Agreement or any Note of the Company is executed in,
brought to or produced before a court of the Cayman
Islands;
(ix) a Cayman Islands court will not necessarily award costs
and disbursements in litigation in accordance with
contractual provisions in this regard; and
(x) we reserve our opinion as to the enforcement of
provisions such as Section 9.04 of the Credit Agreement
by persons who are not parties to the document in
favour of such persons.
4. There is no action, suit or proceeding pending against the
Company in the Grand Court of the Cayman Islands.
5. The submission to jurisdiction and waiver of objection to
venue and forum set forth in the Credit Agreement are valid and effective
assuming this to be so as a matter of New York law.
6. No taxes, levies, imposts, duties, charges or withholding
(other than stamp duty in the circumstances specified in paragraph 3(viii)
above) of any nature will be imposed by the Cayman Islands Government or any
taxing authority thereof or therein upon or with respect to (i) the execution,
delivery or performance of the Credit Agreement or any Note or (ii) the payment
of the principal of or interest on the Notes or on any other amounts payable
under the Credit Agreement.
D-1-4
7. There is no requirement of Cayman Islands law which would
require any Lender to be a resident, citizen or corporation of the Cayman
Islands or to maintain a permanent establishment in the Cayman Islands as a
pre-condition to bringing an action in the Grand Court of the Cayman
Islands and the Lenders are not subject to any condition in bringing or
continuing any such action in the Grand Court of the Cayman Islands to
which any such resident, citizen or corporation or person maintaining a
permanent establishment in the Cayman Islands is not subject except to the
extent that the lack of a presence in the Cayman Islands may influence the
court in any direction as to security for costs. The courts of the Cayman
Islands have jurisdiction in any suit against the Company relating to or
arising out of the Credit Agreement or any Note.
8. Although there is no statutory enforcement in the Cayman
Islands of judgments obtained in any New York State or federal court of the
United States of America sitting in New York City, as a matter of comity
the courts of the Cayman Islands will recognize and enforce a foreign
judgment without a review of the merits thereof (not being in respect of
taxes or like charges or in respect of a fine or penalty) which is final,
was for a liquidated sum, and was not obtained in a manner which would be,
and is not of a kind the enforcement of which is, contrary to the public
policy of the Cayman Islands.
9. The courts of the Cayman Islands will observe and give effect
to the choices of New York law as the governing law of the Credit Agreement
and the Notes assuming such choices are bona fide and legal and assuming
that such choices are valid and binding as a matter of New York law and all
other relevant laws (other than the laws of the Cayman Islands). On the
basis of the facts known to us, we are not aware of any reason why such a
choice would not be upheld.
10. The Company is permitted to hold assets, transfer funds and
conduct its business (including, without limitation, the payment of the
principal of, and interest on the Notes) in any currency, without any
prohibition or limitation of any type whatsoever. There are no exchange
controls imposed under Cayman Islands laws.
Except as specifically stated herein, we make no comment with regard
to any representation which may be made by the Company in the Credit Agreement
or otherwise.
This opinion, although addressed to you, may be relied upon by your
legal advisers (but in that capacity only). It may not be relied upon by any
other person(s) without our prior written consent.
Yours faithfully,
D-1-5
SCHEDULE A
Initial Lenders
▇▇▇▇▇▇ Guaranty Trust Company of New York
Revolving Commitment Vehicle Corporation
Bank of America, N.A.
The Chase Manhattan Bank
ABN AMRO Bank N.V.
The Bank of New York
Bank One, NA
Barclays Bank plc
Citibank, N.A.
Deutsche Bank AG New York and/or Cayman Islands Branches
First Union National Bank
Fleet National Bank
Mellon Bank, N.A.
Royal Bank of Canada
The Bank of Tokyo-Mitsubishi, Limited
Banque Nationale de Paris
Credit Lyonnais New York Branch
Lloyds TSB Bank plc
State Street Bank and Trust Company
D-1-6
ACE LIMITED
P.O. Box 309
▇▇▇▇▇▇ House
South Church Street
▇▇▇▇▇▇ Town
Grand Cayman
Cayman Islands
British West Indies
___ May, 2000
To: Cayman Islands Counsel to the Parent
Dear Sirs,
Re: ACE Limited
In connection with certain opinions you have been requested to render
in respect of the aforesaid, I would hereby certify as follows:
1. The Company's Memorandum and Articles of Association as
adopted by Special Resolution of the Company on 14th January,
1993 remain in full force and effect unamended save by Special
Resolution passed on 6th February, 1998.
2. No resolutions of the shareholders have been passed to restrict
the authority of the Directors as set forth in the Memorandum and
Articles of Association of the Company adopted on 14th January,
1993.
3. No petition has been filed in the Cayman Islands or any
jurisdiction for the winding up of the Company and no resolution
has been passed by the shareholders of the Company to wind it up.
4. The Resolutions of the Board of Directors passed on December 29,
1998, certified extracts of which are annexed to this Certificate,
remain in full force and effect.
5. The Company's authorised share capital includes [300,000,000
Ordinary Shares of US $0.041666667] each and [10,000,000
"Other Shares" of US $1.00 each].
6. The number of Ordinary Shares currently in issue and
outstanding is [193,914,702].
7. The execution by an Authorised Officer of the Company of the
Guaranty in favour of Bank of America National Trust and
Savings Association referred to in your opinion of today's
date was deemed by that Authorised Officer necessary,
advisable or proper in connection with the execution of the
Credit Agreement, referred to in your opinions of today's
date.
---------------------------------------
[▇▇▇▇▇ ▇. ▇▇▇▇]
General Counsel and Secretary
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF NEW YORK COUNSEL
TO THE LOAN PARTIES
May 8, 2000
▇▇▇▇▇▇ Guaranty Trust Company of New York
and each of the other financial institutions
which is a party to the Credit Agreement
referred to below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Administrative Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
We have acted as special New York counsel for ACE Limited, ACE
Bermuda Insurance Ltd., Tempest Reinsurance Company Limited, ACE INA
Holdings Inc. ("ACE INA"), and ACE Financial Services, Inc. ("ACE
Financial", and together with ACE INA, the "Domestic Borrowers" and each a
"Domestic Borrower") (collectively the "Borrowers") in connection with the
$250,000,000 Amended and Restated Five-Year Credit Agreement (the "Credit
Agreement") dated as of May 8, 2000 among the Borrowers, various financial
institutions, Bank of America, N.A. and The Chase Manhattan Bank as Co-
Syndication Agents and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
Administrative Agent. Terms defined in the Credit Agreement are used herein as
therein defined. This opinion letter is being rendered to you at the request of
our clients pursuant to Section 3.01(ii)(F)(2) of the Credit Agreement.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of (i) the Credit Agreement, (ii) the Notes
issued by the Borrowers on the date hereof and (iii) such documents,
corporate records, certificates of public officials and of officers and
representatives of the Borrowers and other instruments, and have conducted
such other investigations of fact and law, as we have deemed necessary or
advisable for purposes of this opinion letter. Except as described in the
foregoing sentence, we have not undertaken any independent investigation of
any factual matters which might be relevant to this opinion letter and we
have made no independent investigation of the records of, or other matters
relating to, any Borrower or any other Person.
Whenever our opinion with respect to the existence or absence of facts
is indicated to be based on our knowledge, we are referring solely to the
actual knowledge of the particular attorneys who have represented the
Borrowers in connection with the Credit Agreement. Except as expressly set
forth herein, we have not undertaken any independent investigation to
determine the existence or absence of such facts and no inference as to our
knowledge concerning such facts should be drawn from the fact that such
representation has been undertaken by us.
For the purposes of this opinion letter, we have assumed that all
items submitted to us as originals are complete and authentic and all
signatures thereon are genuine, and all items submitted to us as copies are
complete and conform to the originals. We have also assumed, with your
permission and without independent investigation of any kind, the
following: (i) each of the Parent, ACE Bermuda and Tempest has been duly
incorporated or organized and is validly existing under the laws of the
Cayman Islands (in the case of the Parent) or of Bermuda (in the case of
ACE Bermuda and Tempest); (ii) the Credit Agreement and the Notes have been
duly authorized, executed and delivered by each party thereto (other than
the Domestic Borrowers, as to which we express an opinion below); (iii) the
Credit Agreement is the legal, valid and binding obligation of each party
thereto (other than the Borrowers, as to which we express an opinion below)
enforceable against each such party in accordance with its terms; (iv) as
to each of the Borrowers (other than, in the case of clauses (a) and (b)
below, the Domestic Borrowers, as to which we express an opinion below),
the execution, delivery and performance of the Credit Agreement and the
Notes by such Borrower (a) are in accordance with (and do not conflict
with) the laws of the jurisdiction in which such Borrower is incorporated
or organized, as the case may be, (b) do not violate or contravene such
Borrower's organizational documents or by-laws; and (c) do not violate or
contravene any provision of any agreement or contract applicable to or
binding upon such Borrower; and (v) there are no agreements or
understandings among the parties, written or oral, and no usage of trade or
course of prior dealing among the parties which would, in either case,
define, supplement or qualify the terms of the Credit Agreement or any
Note.
Upon the basis of the foregoing and the other assumptions and
qualifications set forth herein, we are of the opinion that:
1. Each of the Domestic Borrowers has been duly incorporated, is
validly existing and is in good standing under the laws of the State of
Delaware.
2. Each of the Domestic Borrowers has the corporate power and
authority to execute, deliver and perform its obligations under the Credit
Agreement and the Notes issued by it on the date hereof (the notes issued
by ACE INA the "ACE INA Notes" and notes issued by ACE Financial, the "ACE
Financial Notes"). Each Domestic Borrower has taken all corporate action
required to duly authorize the execution, delivery and performance by it of
the
D-2-2
Credit Agreement and, in the case of ACE INA, the ACE INA Notes, and in the
case of ACE Financial, the ACE Financial Notes. Each of the Credit Agreement
and each ACE INA Note has been duly authorized, executed and delivered by
ACE INA. Each of the Credit Agreement and each ACE Financial Note has been
duly authorized, executed and delivered by ACE Financial.
3. Based upon our review of those statutes, rules, regulations
and judicial decisions which in our experience are normally applicable to
or normally relevant in connection with transactions of the type provided
for in the Credit Agreement, the execution and delivery by the Borrowers of
the Credit Agreement and the Notes and the performance by the Borrowers of
their respective obligations thereunder do not and will not violate,
contravene or constitute a default under any provision of any United States
Federal or New York State law or regulation or, to our knowledge, any
order, writ, injunction or decree applicable to or binding on any Borrower
or its properties. The execution and delivery by ACE INA of the Credit
Agreement and the ACE INA Notes and the performance by ACE INA of its
obligations thereunder in accordance with their respective terms will not
violate the certificate of incorporation or by-laws of ACE INA. The
execution and delivery by ACE Financial of the Credit Agreement and the ACE
Financial Notes and the performance by ACE Financial of its obligations
thereunder in accordance with their respective terms will not violate the
certificate of incorporation or by-laws of ACE Financial.
4. No order, consent, approval, license, authorization or
validation of or exemption by any government or public body or authority of
the State of New York is required to authorize or is required in connection
with the execution, delivery and performance by any Borrower of the Credit
Agreement or any Note.
5. Each of the Credit Agreement and each Note constitutes a
valid and binding agreement of each Borrower which is a party thereto, in
each case enforceable in accordance with its terms.
6. None of the Borrowers is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
Our opinions set forth above are subject to the following
qualifications:
(a) We express no opinion as to any law, rule, regulation,
ordinance, code or similar provision of law of any county,
municipality, or similar political subdivision of the
State of New York or any agency or instrumentality
thereof, and we express no opinion as to any law to which any
Borrower may be subject solely as a result of your legal or
regulatory status or as to any insurance law or (except as
expressly set forth in paragraph 6) any federal or state
securities or "blue sky" law. Members of our Firm are
admitted to practice
D-2-3
law in the State of New York and we express no opinion
on any law other than the laws of the State of New York,
the General Corporation Law of the State of Delaware
("Delaware Corporation Law"), and the Federal law of the
United States to the extent specifically set forth
herein. With respect to any matters concerning Delaware
Corporation Law involved in the opinions set forth above,
we draw your attention to the fact that we are not admitted
to practice law in the State of Delaware and are not experts
in the law of such jurisdiction, and that any such opinions
concerning Delaware Corporation Law are based upon our
reasonable familiarity with Delaware Corporation Law and as
a result of our prior involvement in transactions concerning
such laws.
(b) Our opinions are subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or similar laws affecting creditors'
rights generally and to the effect of general principles of
equity (regardless of whether considered in a proceeding in
equity or at law), including (without limitation) concepts of
materiality, reasonableness, good faith and fair dealing and
by limitations on the availability of specific performance,
injunctive relief or other equitable remedies.
(c) We express no opinion as to:
(i) obligations relating to indemnification, contribution
or exculpation of costs, expenses or liabilities which contravene
public policy;
(ii) the enforceability, under certain circumstances, of
provisions imposing penalties or forfeitures, late payment charges or
an increase in interest rate upon delinquency in payment or the
occurrence of a default;
(iii) any agreement by any Borrower to the subject matter
jurisdiction of a United States federal court, to the waiver of the
right to jury trial or to be served with process by service upon a
designated third party;
(iv) any agreement by any Borrower purporting to waive any
objection to the laying of venue or any claim that an action or
proceeding has been brought in an inconvenient forum;
(v) the effect of the law of any jurisdiction other than
the State of New York wherein any Lender may be located or wherein the
D-2-4
enforcement of the Credit Agreement or any Note may be sought that
limits the rates of interest, fees or other charges legally chargeable
or collectible;
(vi) any provision of the Credit Agreement (A) restricting
access to legal or equitable remedies, (B) relating to severability or
similar clauses, (C) providing that the Credit Agreement may only be
amended, modified or waived in writing, (D) stating that all rights or
remedies of any party are cumulative and may be enforced in addition
to any other right or remedy and that the election of a particular
remedy does not preclude recourse to one or more remedies, (E)
purporting to establish an evidentiary standard for determinations by
the Lenders or the Administrative Agent or (F) purporting to convey
rights to Persons other than parties to the Credit Agreement;
(vii) whether any court outside the State of New York would
honor the choice of New York law as the governing law of the Credit
Agreement and the Notes; or
(viii) Section 9.05 of the Credit Agreement.
The opinions expressed herein are effective only as to the date of this
opinion letter. We do not assume responsibility for updating this opinion
letter as of any date subsequent to the date of this opinion letter, and we
assume no responsibility for advising you of (i) any changes with respect
to any matters described in this opinion letter or (ii) the discovery
subsequent to the date of this opinion letter of factual information not
previously known to us pertaining to the events occurring prior to the date
of this opinion letter.
This opinion letter is rendered solely to you in connection with the
above-described transactions. This opinion letter may not be relied upon by
you for any other purpose, or relied upon by any other Person without our
prior written consent.
Very truly yours,
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF BERMUDA COUNSEL
TO ACE BERMUDA AND TEMPEST
May 8, 2000
The parties listed in Schedule A
attached hereto (together the "Initial Lenders")
Dear Sirs
ACE Bermuda Insurance Ltd ("SCE Bermuda")
Tempest Reinsurance Company Limited ("Tempest")
We have acted as special legal counsel in Bermuda to ACE Bermuda and
Tempest (together the "Companies") in connection with an amended and restated
five-year credit agreement for $250,000,000 between ACE Limited, ACE
Bermuda, Tempest, ACE INA Holdings Inc. and ACE Financial Services, Inc. as
borrowers, the Initial Lenders named therein, Mellon Bank, N.A. as issuing bank,
Bank of America, N.A. and The Chase Manhattan Bank, as Co-Syndication
Agents, and ▇▇▇▇▇▇ Guaranty Trust Company of New York as Administrative
Agent, dated as of May 8, 2000 (the "ACE Ltd. 5-Year Credit Agreement").
For the purposes of giving this opinion, we have examined an electronic
copy and facsimile executed signature pages of the ACE Ltd. 5-Year Credit
Agreement.
We have also reviewed the memorandum of association and the bye-laws
of each of the Companies, a certified copy of an extract from the minutes of a
meeting of each of ACE Bermuda and Tempest's directors held on [26 May,
1999] as certified by the Assistant Secretary of ACE Bermuda and Tempest on
[30 June, 1999] (the "Minutes"), and such other documents and made such
enquiries as to questions of law as we have deemed necessary in order to render
the opinion set forth below.
We have also reviewed and relied upon:
(i) Certificates of Registration of ACE Bermuda and Tempest as
insurers under the Insurance ▇▇▇ ▇▇▇▇ (the "Certificates of
Registration");
(ii) Certificates of Compliance under the Companies ▇▇▇ ▇▇▇▇ and
The Insurance ▇▇▇ ▇▇▇▇ issued by the Assistant Registrar of
Companies on 25 May, 1999 in respect of ACE Bermuda and
Tempest (the "Compliance Certificates");
(iii) the Direction issued under section 56 of the Insurance ▇▇▇
▇▇▇▇ on behalf of the Minister of Finance dated 9 December,
1998 in respect of ACE Bermuda giving guarantees;
(iv) the Direction issued under section 56 of the Insurance ▇▇▇
▇▇▇▇ Act on behalf of the Minister of Finance dated 17
March, 1999 in respect of Tempest giving guarantees;
(v) our searches of documents of public record in respect of each
of ACE Bermuda and Tempest maintained at the Registrar of
Companies in Bermuda and the Cause Book of the Supreme Court
of Bermuda as at [____________, 2000] (the "Searches").
We have assumed (a) the genuineness and authenticity of all signatures
and the conformity to the originals of all copies (whether or not
certified) examined by us and the authenticity and completeness of the
originals from which such copies were taken, (b) that where a document has
been examined by us in draft or electronic form, it will be or has been
executed in the form of that draft or electronic form, and where a number
of drafts of a document have been examined by us all changes thereto have
been marked or otherwise drawn to our attention, (c) the capacity, power
and authority of each of the parties to the ACE Ltd. 5-Year Credit
Agreement, other than the Companies, to enter into and perform its
respective obligations under the ACE Ltd. 5-Year Credit Agreement, (d) the
due execution of the ACE Ltd. 5-Year Credit Agreement by each of the
parties thereto, other than the Companies, and the delivery thereof by each
of the parties thereto, (e) the accuracy and completeness of all factual
representations made in the ACE Ltd. 5-Year Credit Agreement and other
documents reviewed by us, (f) that the resolutions contained in the Minutes
remain in full force and effect and have not been rescinded or amended, (g)
that the Companies are entering into the ACE Ltd. 5-Year Credit Agreement
pursuant to their business of insurance, (h) that the information disclosed
by the Searches has not been materially altered and that the Searches did
not fail to disclose any material information which had been delivered for
filing or registration, but was not disclosed or did not appear on the said
public record at the time of the Searches, (i) that there is no provision
of the law of any jurisdiction, other than Bermuda, which would have any
implication in relation to the opinions expressed herein, (j) that the
entering into of the ACE Ltd. 5-Year Credit Agreement by the Companies will
not result in a breach of the conditions attached to their respective
Certificates of Registration issued pursuant to the Insurance ▇▇▇ ▇▇▇▇; (k)
the validity and binding effect under the laws of the State of New York
(the "Foreign Laws") of the ACE Ltd. 5-Year Credit
D-3-2
Agreement which are expressed to be governed by such Foreign Laws in
accordance with their respective terms, and (l) the validity and binding effect
under the Foreign Laws of the submission by the Company pursuant to the ACE
Ltd. 5-Year Credit Agreement to the non-exclusive jurisdiction of the courts of
any New York State Court or Federal court of the United States of America
sitting in New York City (the "Foreign Courts").
The obligations of the Companies under the ACE Ltd. 5-Year Credit
Agreement (a) will be subject to the laws from time to time in effect
relating to bankruptcy, insolvency, liquidation, possessory liens, rights
of set off, reorganization, amalgamation, moratorium or any other laws or
legal procedures, whether of a similar nature or otherwise, generally
affecting the rights of creditors, (b) will be subject to statutory
limitation of the time within which proceedings may be brought, (c) will be
subject to general principles of equity and, as such, specific performance
and injunctive relief, being equitable remedies, may not be available, (d)
may not be given effect to by a Bermuda court, whether or not it was
applying the Foreign Laws, if and to the extent they constitute the payment
of an amount which is in the nature of a penalty and not in the nature of
liquidated damages and (e) as a person registered as an insurer (the
"insurer") under the Insurance ▇▇▇ ▇▇▇▇ and the regulations promulgated
thereunder (the "Act"), will be subject to directions which may be issued
by the Bermuda Minister of Finance (the "Minister") under Section 32 of the
Act ("Section 32") if it appears to the Minister that the business of the
insurer is being so conducted that there is a significant risk of the
insurer becoming insolvent or the insurer is in breach of a provision of
the Act or of the regulations promulgated thereunder or any condition
imposed on its registration (for example the requirement to maintain a
certain minimum amount of statutory capital and surplus). In these
circumstances, the Minister may direct the insurer to take or refrain from
taking any of the steps listed in Section 32, including, inter alia, that
the insurer cease or limit its underwriting or that there be a prohibition
or restriction on the payment of dividends or other distributions. Further,
under Section 32, if it appears to the Minister that the business of the
insurer is being so conducted that there is a significant risk of the
insurer becoming insolvent, he may direct the insurer to maintain in, or
transfer to and keep in the custody of, a specified bank, assets of the
insurer of such value and description as are specified in the direction.
ACE Bermuda and/or Tempest, under applicable requirements of the Act, may
be required to record a liability against or to deduct from its statutory
capital and surplus (as determined under the Act) amounts payable or paid
pursuant to its obligations under the ACE Ltd. 5-Year Credit Agreement. The
Companies may be considered to be insolvent if they fail to meet and
maintain the required minimum amount of statutory capital and surplus and
in such circumstances the ability of the Companies to carry out the said
obligations will be affected.
We express no opinion as to the enforceability of any provision of the
ACE Ltd. 5-Year Credit Agreement which provides for the payment of a
D-3-3
specified rate of interest on the amount of a judgment after the date of
judgment or which purports to ▇▇▇▇▇▇ the statutory powers of either of the
Companies.
With respect to the opinion expressed in paragraph 4 below, it should
be noted that the documents of public record maintained by the Registrar of
Companies do not reveal (i) whether a winding-up petition or application to
a Bermuda court for the appointment of a receiver has been presented, (ii)
details of matters which have been lodged for registration but have not
actually been registered at the date the file was made available to us,
(iii) whether a direction under Section 32 has been issued or (iv) whether
the Companies are in compliance with conditions attached to their
registration as a Class 4 insurer and a long-term insurer under the Act and
the provisions of the Act.
We have made no investigation of and express no opinion in relation to
the laws of any jurisdiction other than Bermuda. This opinion is to be governed
by and construed in accordance with the laws of Bermuda and is limited to and is
given on the basis of the current law and practice in Bermuda. This opinion is
issued solely for your benefit and is not to be relied upon by any other person,
firm or entity or in respect of any other matter.
On the basis of and subject to the foregoing, we are of the opinion
that:
1. Tempest is duly incorporated and existing under the laws of
Bermuda. ACE Bermuda is the result of a due continuation into
Bermuda and a subsequent due amalgamation under the laws of
Bermuda. Both Companies are in good standing (meaning solely
that each has not failed to make any filing with any Bermuda
governmental authority or to pay any Bermuda government fee or
tax which would make it liable to be struck off the Register
of Companies and thereby cease to exist under the laws of
Bermuda). Based purely on the Certificates of Registration
and the Compliance Certificates, each of Tempest and ACE
Bermuda is registered under the Insurance ▇▇▇ ▇▇▇▇ as a
Class 4 Insurer.
2. Each of the Companies has the necessary corporate power and
authority to enter into and perform its obligations under the
ACE Ltd. 5-Year Credit Agreement. The execution and delivery
of the ACE Ltd. 5-Year Credit Agreement by each of the
Companies and the respective performance by each of the
Companies of its obligations thereunder will not violate the
respective memorandum of association or bye-laws of the
Companies nor any applicable law, regulation, order or
decree in Bermuda.
3. Each of the Companies has taken all corporate action required
to authorise its execution, delivery and performance of the
ACE Ltd.
D-3-4
5-Year Credit Agreement and the Notes thereunder. The ACE Ltd.
5-Year Credit Agreement has been duly executed and delivered
by or on behalf of the Companies, and constitutes the valid
and binding obligations of the Companies in accordance with
the terms thereof.
4. No order, consent, approval, licence, authorisation or
validation of or exemption by any government or public body
or authority of Bermuda or any sub-division thereof is
required to authorise or is required in connection with the
execution, delivery, performance and enforcement of the ACE
Ltd. 5-Year Credit Agreement and the Notes thereunder.
5. It is not necessary or desirable to ensure the enforceability
in Bermuda of the ACE Ltd. 5-Year Credit Agreement and the
Notes thereunder that they be registered in any register kept
by, or filed with, any governmental authority or regulatory
body in Bermuda. However, to the extent that the ACE Ltd.
5-Year Credit Agreement and the Notes thereunder create a
charge over assets of one or both of the Companies, it may be
desirable to ensure the priority in Bermuda of the charge
that they be registered in the Register of Charges in
accordance with Section 55 of the Companies ▇▇▇
▇▇▇▇. On registration, to the extent that Bermuda law governs
the priority of a charge, such charge will have priority in
Bermuda over any unregistered charges, and over any
subsequently registered charges, in respect of the assets
which are the subject of the charge. A registration fee of
$425 will be payable in respect of the registration.
While there is no exhaustive definition of a charge under
Bermuda law, a charge normally has the following
characteristics:
(i) it is a proprietary interest granted by way of
security which entitles the chargee to resort to the
charged property only for the purposes of satisfying
some liability due to the chargee (whether from the
chargor or a third party); and
(ii) the chargor retains an equity of redemption to have
the property restored to him when the liability has
been discharged.
However, as the ACE Ltd. 5-Year Credit Agreement is governed
by the Foreign Laws, the question of whether it would possess
D-3-5
these particular characteristics would be determined under the
Foreign Laws.
6. The ACE Ltd. 5-Year Credit Agreement and the Notes thereunder
will not be subject to ad valorem stamp duty in Bermuda.
7. The choice of the Foreign Laws as the governing law of the ACE
Ltd. 5-Year Credit Agreement and the Notes thereunder is a
valid choice of law and would be recognised and given effect
to in any action brought before a court of competent
jurisdiction in Bermuda, except for those laws (i) which
such court considers to be procedural in nature, (ii) which
are revenue or penal laws or (iii) the application of which
would be inconsistent with public policy, as such term is
interpreted under the laws of Bermuda. The submission in the
ACE Ltd. 5-Year Credit Agreement to the non-exclusive
jurisdiction of the Foreign Courts is valid and binding
upon the Companies.
8. The courts of Bermuda would recognise as a valid judgment, a
final and conclusive judgment in personam obtained in the
Foreign Courts against the Companies based upon the ACE Ltd.
5-Year Credit Agreement or the Notes thereunder under which
a sum of money is payable (other than a sum of money payable
in respect of multiple damages, taxes or other charges of a
like nature or in respect of a fine or other penalty) and
would give a judgment based thereon provided that (a) such
courts had proper jurisdiction over the parties subject to
such judgment, (b) such courts did not contravene the rules
of natural justice of Bermuda, (c) such judgment was not
obtained by fraud, (d) the enforcement of the judgment would
not be contrary to the public policy of Bermuda,
(e) no new admissible evidence relevant to the action is
submitted prior to the rendering of the judgment by the courts
of Bermuda and (f) the due compliance with the correct
procedures under the laws of Bermuda.
Yours faithfully,
D-3-6
SCHEDULE A
Initial Lenders
▇▇▇▇▇▇ Guaranty Trust Company of New York
Revolving Commitment Vehicle Corporation
Bank of America, N.A.
The Chase Manhattan Bank
ABN AMRO Bank N.V.
The Bank of New York
Bank One, NA
Barclays Bank plc
Citibank, N.A.
Deutsche Bank AG New York and/or Cayman Islands Branches
First Union National Bank
Fleet National Bank
Mellon Bank, N.A.
Royal Bank of Canada
The Bank of Tokyo-Mitsubishi, Limited
Banque Nationale de Paris
Credit Lyonnais New York Branch
Lloyds TSB Bank plc
State Street Bank and Trust Company
D-3-7
EXHIBIT E
FORM OF DESIGNATION AGREEMENT
dated as of ________________, 2000
Reference is made to the Amended and Restated Five-Year Credit
Agreement dated as of May 8, 2000 (as amended from time to time, the "Credit
Agreement") among ACE Limited (the "Parent") and the other Borrowers party
thereto, the Initial Lenders party thereto, the Co-Syndication Agents, and
▇▇▇▇▇▇ Guaranty Trust Company of New York, as Administration Agent (the
"Administrative Agent"). Terms defined in the Credit Agreement are used
herein with the same meaning.
_________________ (the "Designator") and ________________ (the
"Designee") agree as follows:
1. The Designator designates the Designee as its Designated Lender
under the Credit Agreement and the Designee accepts such designation.
2. The Designator makes no representations or warranties and
assumes no responsibility with respect to the financial condition of the
Borrowers or the performance or observance by the Borrowers of any of its
obligations under the Credit Agreement or any other instrument or document
furnished pursuant thereto.
3. The Designee (i) confirms that it is an Eligible Designee; (ii)
appoints and authorizes the Designator as its administrative agent and
attorney-in-fact and grants the Designator an irrevocable power of attorney to
receive payments made for the benefit of the Designee under the Credit
E-1
Agreement and to deliver and receive all communications and notices under
the Credit Agreement, if any, that the Designee is obligated to deliver or
has the right to receive thereunder; (iii) acknowledges that the Designator
retains the sole right and responsibility to vote under the Credit
Agreement, including, without limitation, the right to approve any
amendment or waiver of any provision of the Credit Agreement, and (iv)
agrees that the Designee shall be bound by all such votes, approvals,
amendments and waivers and all other agreements of the Designator pursuant
to or in connection with the Credit Agreement.
4. The Designee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the most recent financial
statements referred to in Article 4 or delivered pursuant to Article 5
thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Designation Agreement and (ii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Designator or any other
Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking any action it may be permitted to take under the
Credit Agreement. The Designee acknowledges that it is subject to and bound
by the confidentiality provisions of the Credit Agreement (except as
provided in Section 9.07(a) thereof).
5. Following the execution of this Designation Agreement by the
Designator and the Designee and the consent hereto by the Parent, it will be
delivered to the Administrative Agent for its consent. This Designation
Agreement shall become effective when the Administrative Agent consents
hereto or on any later date specified on the signature page hereof.
6. Upon the effectiveness hereof, the Designee shall have the
right to make Loans or portions thereof as a Lender pursuant to Section 2.01 or
2.03 of
E-2
the Credit Agreement and the rights of a Lender related thereto. The making
of any such Loans or portions thereof by the Designee shall satisfy the
obligations of the Designator under the Credit Agreement to the same
extent, and as if, such Loans or portions thereof were made by the
Designator.
7. This Designation Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties have caused this Designation
Agreement to be executed by their respective officers hereunto duly authorized,
as of the date first above written.
Effective Date:______ , ____
[NAME OF DESIGNATOR]
By:
---------------------------------
Name:
Title:
[NAME OF DESIGNEE]
By:
---------------------------------
Name:
Title:
The undersigned consent to the foregoing designation.
E-3
ACE LIMITED
By:
---------------------------------
Name:
Title:
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK,
as Administrative Agent
By:
---------------------------------
Name:
Title:
E-4