Exhibit 10.2
Execution Copy
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REIMBURSEMENT AGREEMENT
among
ACE LIMITED
ACE BERMUDA INSURANCE LTD.
ACE TEMPEST LIFE REINSURANCE LTD.
ACE TEMPEST REINSURANCE LTD.,
as Account Parties,
THE BANKS NAMED HEREIN,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Issuing Bank and as Administrative Agent
JPMORGAN CHASE BANK and BANK OF AMERICA, N.A.
as Co-Syndication Agents,
and
THE BANK OF NOVA SCOTIA and DEUTSCHE BANK AG, NEW YORK BRANCH
as Co-Documentation Agents
$350,000,000 Secured Letter of Credit Facility
WACHOVIA SECURITIES, INC.
Sole Book Runner and Lead Arranger
Dated as of September 30, 2002
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Table of Contents
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 Certain Defined Terms.......................................1
SECTION 1.02 Computation of Time Periods; Other Definitional
Provisions.................................................16
SECTION 1.03 Accounting Terms and Determinations........................16
ARTICLE II
AMOUNTS AND TERMS OF THE LETTERS OF CREDIT
SECTION 2.01 The Letters of Credit......................................17
SECTION 2.02 Issuance and Renewals and Drawings, Participations and
Reimbursement with Respect to Letters of Credit............18
SECTION 2.03 Repayment of Advances......................................21
SECTION 2.04 Termination or Reduction of the LC Commitment Amounts......23
SECTION 2.05 Fees.......................................................23
SECTION 2.06 Increased Costs, Etc.......................................24
SECTION 2.07 Payments and Computations..................................25
SECTION 2.08 Taxes......................................................26
SECTION 2.09 Sharing of Payments, Etc...................................28
SECTION 2.10 Use of Letters of Credit...................................29
SECTION 2.11 Defaulting Banks...........................................29
SECTION 2.12 Replacement of Affected Bank...............................30
SECTION 2.13 Certain Provisions Relating to the Issuing Bank and
Letters of Credit..........................................31
SECTION 2.14 Downgrade Event with Respect to a Bank.....................32
SECTION 2.15 Downgrade Event or Other Event with Respect to the
Issuing Bank...............................................34
SECTION 2.16 Non-Dollar Letters of Credit...............................35
SECTION 2.17 Collateral.................................................36
ARTICLE III
CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01 Conditions Precedent to Effective Date.....................37
SECTION 3.02 Conditions Precedent to Each Issuance, Extension or
Increase of a Letter of Credit.............................39
SECTION 3.03 Determinations Under Section 3.01..........................39
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of the Account Parties......40
ARTICLE V
COVENANTS OF THE ACCOUNT PARTIES
SECTION 5.01 Affirmative Covenants......................................44
SECTION 5.02 Negative Covenants.........................................46
SECTION 5.03 Reporting Requirements.....................................50
SECTION 5.04 Financial Covenants........................................53
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01 Events of Default..........................................54
SECTION 6.02 Actions in Respect of the Letters of Credit upon Default...57
ARTICLE VII
THE GUARANTY
SECTION 7.01 The Guaranty...............................................57
SECTION 7.02 Guaranty Unconditional.....................................58
SECTION 7.03 Discharge Only upon Payment in Full; Reinstatement
in Certain Circumstances...................................59
SECTION 7.04 Waiver by the Account Parties..............................59
SECTION 7.05 Subrogation................................................59
SECTION 7.06 Stay of Acceleration.......................................60
SECTION 7.07 Continuing Guaranty; Assignments...........................60
ARTICLE VIII
THE AGENTS
SECTION 8.01 Authorization and Action...................................61
SECTION 8.02 Agents' Reliance, Etc......................................61
SECTION 8.03 Wachovia and Affiliates....................................61
SECTION 8.04 Bank Credit Decision.......................................62
SECTION 8.05 Indemnification............................................62
SECTION 8.06 Successor Administrative Agent.............................62
SECTION 8.07 Collateral Matters.........................................63
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ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Amendments, Etc............................................64
SECTION 9.02 Notices, Etc...............................................64
SECTION 9.03 No Waiver; Remedies........................................65
SECTION 9.04 Costs and Expenses.........................................65
SECTION 9.05 Right of Set-off...........................................66
SECTION 9.06 Binding Effect.............................................66
SECTION 9.07 Assignments and Participations.............................66
SECTION 9.08 Execution in Counterparts..................................69
SECTION 9.09 No Liability of the Issuing Bank...........................69
SECTION 9.10 Confidentiality............................................70
SECTION 9.11 Jurisdiction, Etc..........................................70
SECTION 9.12 Governing Law..............................................71
SECTION 9.13 Waiver of Jury Trial.......................................71
SECTION 9.14 Disclosure of Information..................................71
Schedule I LC Commitment Amounts
Schedule I - Part 2 Domestic Lending Offices
Schedule II Existing Letters of Credit
Schedule III Methodology for Calculation of Collateral Values
Schedule 4.01(b) Subsidiaries
Schedule 5.02(a) Liens
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Collateral Value Report
Exhibit C-1 Form of Opinion of ▇▇▇▇▇▇ and ▇▇▇▇▇▇
Exhibit C-2 Form of Opinion of Mayer, Brown, ▇▇▇▇ & Maw
Exhibit C-3 Form of Opinion of ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇
Exhibit D Form of Pledge and Security Agreement
Exhibit E Form of Letter of Instruction
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REIMBURSEMENT AGREEMENT
REIMBURSEMENT AGREEMENT dated as of September 30, 2002, among ACE
Limited, a Cayman Islands company (the "Parent"), ACE Bermuda Insurance
Ltd., a Bermuda company ("ACE Bermuda"), ACE Tempest Life Reinsurance Ltd.,
a Bermuda company ("Tempest Life"), and ACE Tempest Reinsurance Ltd., a
Bermuda company ("Tempest") (ACE Bermuda, Tempest Life and Tempest,
together with the Parent, the "Account Parties" and individually an
"Account Party"), the banks, financial institutions and other institutional
lenders listed on the signature pages hereof as the Initial Banks (the
"Initial Banks"), Wachovia Bank, National Association ("Wachovia"), as
Issuing Bank (as hereinafter defined), JPMorgan Chase Bank ("JPMorgan
Chase"), as syndication agent, Bank of America, N.A. ("Bank of America"),
as syndication agent (JPMorgan Chase and Bank of America, together with any
successor syndication agent appointed pursuant to Article VIII, the
"Syndication Agents"), The Bank of Nova Scotia ("Nova Scotia"), as
documentation agent, Deutsche Bank AG, New York Branch ("Deutsche Bank"),
as documentation agent (Nova Scotia and Deutsche Bank, together with any
successor documentation agent appointed pursuant to Article VIII, the
"Documentation Agents"), and Wachovia, as administrative agent (together
with any successor administrative agent appointed pursuant to Article VIII,
the "Administrative Agent" and, together with the Syndication Agents and
the Documentation Agents, the "Agents") for the Banks.
PRELIMINARY STATEMENTS:
The Account Parties have requested that the Issuing Bank and the
Banks make available to the Account Parties a secured credit facility in an
amount up to $350,000,000 to provide for the issuance of letters of credit
for the account of one or more of the Account Parties. The Issuing Bank and
the Banks have indicated their willingness to agree to make such letters of
credit available on the terms and conditions of this 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 Parties" has the meaning specified in the recital of
parties to this Agreement.
"ACE Bermuda" has the meaning specified in the recital of parties
to this Agreement.
"ACE INA" means ACE INA Holdings Inc., a Delaware corporation.
"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 Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent at Wachovia
Bank, National Association, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Account No.
5000000027444, Re: ACE Ltd., Attn: Syndication Agency Services, or such
other account as the Administrative Agent shall specify in writing to the
Banks.
"Advance" means a Letter of Credit Advance.
"Affected Bank" means any Bank that (i) has made, or notified any
Account Party that an event or circumstance has occurred which may give
rise to, a demand for compensation under Section 2.06(a) or (b) or Section
2.08 (but only so long as the event or circumstance giving rise to such
demand or notice is continuing) or (ii) is a Downgraded Bank.
"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 Agreement.
"Agreement Currency" has the meaning specified in Section 2.16(g).
"Applicable Account Party" with respect to any outstanding or
proposed Letter of Credit means the Account Party for the account of which
such Letter of Credit was or is proposed to be issued.
"Applicable Lending Office" means, with respect to each Bank, such
Bank's Domestic Lending Office.
"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.
"Arranger" means Wachovia Securities, Inc.
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"Assignment and Acceptance" means an assignment and acceptance
entered into by a Bank and an Eligible Assignee, and accepted by the
Administrative Agent, in accordance with Section 9.07 and in substantially
the form of Exhibit A hereto.
"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) (including without limitation amounts
which have been the subject of drawings by the applicable beneficiary but
which have not yet been paid by the Issuing Bank).
"Bank of America" has the meaning specified in the recital of
parties to this Agreement.
"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.
"Banks" means the Initial Banks and each Person that shall become
a Bank hereunder pursuant to Section 9.07(a), (b) and (c) for so long as
such Initial Bank or Person, as the case may be, shall be a party to this
Agreement.
"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
rate of interest announced publicly by Wachovia in Charlotte, North
Carolina from time to time, as Wachovia's prime rate (which may not be its
best lending rate) or, if higher on the day in question, 1/2 of 1% above
the Federal Funds Rate.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ or Bermuda.
"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.
"Collateral" means all the assets, property and interests in
property that shall from time to time be pledged or be purported to be
pledged as direct or indirect security for the Obligations pursuant to any
one or more of the Security Documents.
"Collateral Value" means, for any Business Day as of which it is
being calculated, (a) for each category of Collateral set forth on Schedule
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III, an amount equal to the "Eligible Percentage" of the market value (or,
as to cash, the dollar amount) thereof set forth opposite such category of
Collateral on Schedule III, and (b) for the Collateral, in the aggregate,
the sum of such amounts, in each case as of the close of business on the
immediately preceding Business Day or, if such amount is not determinable
as of the close of business on such immediately preceding Business Day, as
of the close of business on the most recent Business Day on which such
amount is determinable, which Business Day shall be not more than two (2)
Business Days prior to the Business Day as of which the Collateral Value is
being calculated; provided that the calculation of the Collateral Value
shall be further subject to the terms and conditions set forth on Schedule
III; and provided further that (i) no Collateral (including, without
limitation, cash) shall be included in the calculation of the Collateral
Value unless the Administrative Agent has a first priority perfected Lien
on and security interest in such Collateral pursuant to the Security
Documents and (ii) until the Tempest Life Effective Date, any Collateral
pledged by Tempest Life shall, for purposes of all calculations of the
Collateral Value hereunder, be taken into account solely against Letter of
Credit Obligations arising with respect to Letters of Credit issued for the
account of Tempest Life.
"Collateral Value Report" has the meaning specified in Section
2.17(b).
"Commitment Amount" means an LC Commitment Amount or the Letter of
Credit Issuance Commitment Amount.
"Committed Facility" means, at any time, the aggregate amount of
the Banks' LC Commitment Amounts at such time.
"Confidential Information" means information that any Loan Party
furnishes to any Agent or any Bank, 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 any Agent or any Bank of its obligations
hereunder or that is or becomes available to such Agent or such Bank from a
source other than the Loan Parties that is not, to the best of such Agent's
or such Bank'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)
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the direct or indirect guarantee, endorsement (other than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of a
primary obligor, (b) the obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party or
parties to an agreement or (c) any obligation of such Person, whether or
not contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation
or (B) to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary obligor,
(iii) to purchase property, assets, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation
or (iv) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof; provided, however, that
Contingent Obligations shall not include any obligations of any such Person
arising under insurance contracts entered into in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation
in respect of which such Contingent Obligation is made (or, if less, the
maximum amount of such primary obligation for which such Person may be
liable pursuant to the terms of the instrument 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.
"Custodial Account" means each custodial, brokerage or similar
account of any Account Party maintained by a custodian, broker or other
securities intermediary as a "securities account" within the meaning of
Section 8-501(a) of the Uniform Commercial Code for such Account Party as
the "entitlement holder" within the meaning of Section 8-102(7) of the
Uniform Commercial Code pursuant to a Custodial Agreement, on which (and on
the contents of which) a Lien has been granted as security for the
Obligations.
"Custodial Agreement" means each custodial or similar agreement
between the Account Parties (or any of them) and a Custodian, pursuant to
which one or more Custodial Accounts are maintained, in each case as
amended.
"Custodian" means (i) State Street (in its capacity as custodian
of the State Street Custodial Accounts) and (ii) each other bank or
financial institution that maintains a Custodial Account (in its capacity
as custodian thereof), in each case including any sub-custodian.
"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
5
borrowed money, (b) all obligations of such Person for the deferred
purchase price of property or services (other than trade payables incurred
in the ordinary course of such Person's business), (c) all obligations of
such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all obligations of such Person created or arising under
any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all obligations of
such Person as lessee under Capitalized Leases (excluding imputed
interest), (f) all obligations of such Person under acceptance, letter of
credit or similar facilities, (g) all obligations of such Person to
purchase, redeem, retire, defease or otherwise make any payment in respect
of any Equity Interests (except for obligations to pay for Equity Interests
within customary settlement periods) in such Person or any other Person or
any warrants, rights or options to acquire such capital stock (excluding
payments under a contract for the forward sale of ordinary shares of such
Person issued in a public offering), valued, in the case of Redeemable
Preferred Interests, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends, (h) all
Contingent Obligations of such Person in respect of Debt (of the types
described above) of any other Person and (i) all indebtedness and other
payment obligations referred to in clauses (a) through (h) above of another
Person secured by (or for which the holder of such Debt has an existing
right, contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the
payment of such indebtedness or other payment obligations; provided,
however, that the amount of Debt of such Person under clause (i) above
shall, if such Person has not assumed or 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 Amount" means, with respect to any Bank at any time,
any amount required to be paid by such Bank to any Agent or any other Bank
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 Bank to (a) the Issuing Bank pursuant to
Section 2.02(e) to purchase a portion of a Letter of Credit Advance made by
the Issuing Bank and (b) any Agent or the Issuing Bank pursuant to Section
8.05 to reimburse such Agent or the Issuing Bank for such Bank's ratable
share of any amount required to be paid by the Banks to such Agent or the
Issuing Bank as provided therein.
"Defaulting Bank" means, at any time, any Bank that, at such time,
(a) owes 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).
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"Deutsche Bank" has the meaning specified in the recital of
parties to this Agreement.
"Documentation Agents" has the meaning specified in the recital of
parties to this Agreement.
"Dollar Equivalent" has the meaning specified in Section 2.16(h).
"Domestic Lending Office" means, with respect to any Bank, the
office of such Bank specified as its "Domestic Lending Office" opposite its
name on Part 2 of Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Bank, as the case may be, or such other
office of such Bank as such Bank may from time to time specify to any
Account Party and the Administrative Agent.
"Downgrade Account" has the meaning specified in Section 2.14(a).
"Downgrade Event" means, with respect to any Bank, a reduction of
the credit rating for the senior unsecured unsupported long-term debt of
such Bank (or, if no such rating exists, then a reduction of the long-term
issuer credit rating of such Bank) by S&P or ▇▇▇▇▇'▇.
"Downgrade Notice" has the meaning specified in Section 2.14(a).
"Downgraded Bank" means any Bank which has a credit rating of less
than A- (in the case of S&P) or A3 (in the case of ▇▇▇▇▇'▇) 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 ▇▇▇▇▇'▇; provided, that if at any
time such Bank has no such senior unsecured unsupported long-term debt
rating from either rating service but does have a long-term issuer credit
rating from either or both services, then such Bank shall not be considered
a Downgraded Bank so long as such long-term issuer credit rating remains at
or above A- (in the case of S&P) or A3 (in the case of ▇▇▇▇▇'▇).
"Effective Date" means the first date on which the conditions set
forth in Article III shall have been satisfied.
"Eligible Assignee" means (i) a Bank, (ii) an Affiliate of a Bank,
or (iii) a commercial bank, a savings bank or other financial institution
that is approved by the Administrative Agent and the Issuing Bank and,
unless an Event of Default has occurred and is continuing at the time any
assignment is effected pursuant to Section 9.07, the Parent (such approvals
not to be unreasonably withheld or delayed); provided, however, that
neither any Loan Party nor any Affiliate of a Loan Party shall qualify as
an Eligible Assignee under this definition.
"Environmental Action" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of liability
or potential liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, any Environmental
Permit or Hazardous Material or arising from alleged injury or threat to
health, safety or the environment, including, without limitation, (a) by
any governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages and (b) by any governmental
or regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
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"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.
"Events of Default" has the meaning specified in Section 6.01.
"Existing Letters of Credit" means, collectively, the letters of
credit issued by Wachovia pursuant to the Existing Reimbursement Agreement
and outstanding on the Effective Date, which letters of credit are listed
on Schedule II hereto.
"Existing Reimbursement Agreement" means the Reimbursement
Agreement, dated as of December 20, 2001, among the Account Parties, the
banks and other lenders named therein, Fleet National Bank, as
Documentation Agent, and Wachovia, as Issuing Bank and as Administrative
Agent, as amended.
"Expiration Date" shall mean September 29, 2003.
"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
8
average of the quotations for such day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"Fee Letter" means the fee letter dated August 23, 2002 among the
Parent, Wachovia and the Arranger, as amended.
"Fiscal Year" means the fiscal year of the Parent and its
Consolidated Subsidiaries ending on December 31 in any calendar year.
"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.
"Guaranty" means the undertaking by each of the Account Parties
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 Banks" has the meaning specified in the recital of
parties to this Agreement.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Investment" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any Equity Interests or Debt
or the assets comprising a division or business unit or a substantial part
or all of the business of such Person, any capital contribution to such
Person or any other direct or indirect investment in such Person,
including, without limitation, any acquisition by way of a merger or
consolidation and any arrangement pursuant to which the investor incurs
Debt of the types referred to in clause (h) or (i) of the definition of
"Debt" in respect of such Person; provided, however, that any purchase by
any Loan Party or any Subsidiary of any catastrophe-linked instruments
which are (x) issued for the purpose of transferring traditional
reinsurance risk to the capital markets and (y) purchased by such Loan
Party or Subsidiary in accordance with its customary reinsurance
underwriting procedures, or the entry by any Loan Party or any Subsidiary
into swap instruments relating to such instruments in accordance with such
procedures, shall be deemed to be the entry by such Person into a
reinsurance contract and shall not be deemed to be an Investment by such
Person.
"Issuing Bank" means Wachovia and any "New Issuing Bank" appointed
in accordance with Section 2.15.
9
"JPMorgan Chase" has the meaning specified in the recital of
parties to this Agreement.
"Judgment Currency" has the meaning specified in Section 2.16(g).
"LC Commitment Amount" means, with respect to any Bank at any
time, the amount set forth opposite such Bank's name on Schedule I hereto
under the caption "LC Commitment Amount" or, if such Bank has entered into
one or more Assignment and Acceptances, set forth for such Bank in the
Register maintained by the Administrative Agent pursuant to Section 9.07(d)
as such Bank's "LC Commitment Amount", as such amount may be reduced at or
prior to such time pursuant to Section 2.04.
"LC Participation Obligations" has the meaning specified in
Section 2.14(a).
"L/C Related Documents" has the meaning specified in Section
2.03(a)(ii).
"Letter of Credit Advance" has the meaning specified in Section
2.02(f).
"Letter of Credit Agreement" has the meaning specified in Section
2.02(a).
"Letter of Credit Business Day" means a Business Day.
"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
(including, without limitation, all outstanding Existing Letters of Credit)
and (c) the aggregate Available Amounts of all Letters of Credit which have
been requested by an Account Party to be issued hereunder but have not yet
been so issued.
"Letter of Credit Issuance Commitment Amount" means at any time
the lesser of (a) $350,000,000 (or such lesser amount as may be agreed in
writing among the Account Parties, the Administrative Agent and the Issuing
Bank) and (b) the aggregate amount of the LC Commitment Amounts then in
effect.
"Letter of Credit Outstandings" at any time means the sum at such
time of (a) the aggregate outstanding amount of Letter of Credit Advances
and (b) the aggregate Available Amounts of all outstanding Letters of
Credit, in each case after giving effect to any issuance or renewal of a
Letter of Credit occurring on the date of determination and any other
changes in the aggregate amounts under clauses (a) and (b) above as of such
date, including as a result of any reimbursements of outstanding unpaid
drawings under any Letter of Credit or any reductions in the maximum amount
available for drawings under any Letter of Credit taking effect on such
date.
"Letter of Credit Participating Interest" has the meaning
specified in Section 2.02(d).
10
"Letter of Credit Participating Interest Commitment" has the
meaning specified in Section 2.02(d).
"Letter of Credit Participating Interest Percentage" means, for
any Bank, a fraction, expressed as a percentage, the numerator of which is
such Bank's LC Commitment Amount and the denominator of which is the
aggregate LC Commitment Amounts of all the Banks.
"Letter of Instruction" means a letter in substantially the form
of Exhibit E.
"Letters of Credit" has the meaning specified in Section 2.01.
"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 Fee Letter,
(iii) each Letter of Credit Agreement, (iv) each Security Document and (v)
each Letter of Instruction, in each case as amended.
"Loan Parties" means the Account Parties.
"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 the
Administrative Agent, the Issuing Bank or any Bank under any Loan Document
or (c) the ability of the Loan Parties, taken as a whole, to perform their
obligations under the Loan Documents.
"Material Financial Obligation" means a principal amount of Debt
and/or payment obligations in respect of any Hedge Agreement of the Parent
and/or one or more of its Subsidiaries arising in one or more related or
unrelated transactions exceeding in the aggregate $25,000,000.
"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.
11
"Non-Dollar Letters of Credit" has the meaning specified in
Section 2.16(a).
"Nova Scotia" has the meaning specified in the recital of parties
to this Agreement.
"OECD" means the Organization for Economic Cooperation and
Development.
"Obligations" means all obligations of every nature of the Account
Parties from time to time owing, due or payable to either Agent or to any
Bank under this Agreement or any of the other Loan Documents, whether for
principal, reimbursement for payments made under Letters of Credit
(including, without limitation, Existing Letters of Credit), interest
(including, to the greatest extent permitted by law, post-petition
interest), fees, expenses, indemnities or any other obligations, and
whether now existing or hereafter incurred, created or arising and whether
direct or indirect, absolute or contingent, or due or to become due
(including obligations of performance).
"Other Taxes" has the meaning specified in Section 2.08(b).
"Overnight Rate" has the meaning specified in Section 2.16(h).
"Parent" has the meaning specified in the recital of parties to
this Agreement.
"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 Collateral Liens" has the meaning specified in Section
5.02(a).
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced or which are being contested in good faith by
appropriate proceedings: (a) Liens for taxes, assessments and governmental
charges or levies not yet due and payable; (b) Liens imposed by law, such
as materialmen's, mechanics', carriers', workmen's and repairmen's Liens
and other similar Liens arising in the ordinary course of business securing
obligations that are not overdue for a period of more than 90 days; (c)
pledges or deposits to secure obligations under workers' compensation laws
or similar legislation or to secure public or statutory obligations; and
(d) easements, rights of way and other encumbrances on title to real
property that do not render title to the property encumbered thereby
unmarketable or materially adversely affect the use of such property for
its present purposes.
"Person" means an individual, partnership, corporation (including
a business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government
or any political subdivision or agency thereof.
12
"Pledge and Security Agreement" means the Pledge and Security
Agreement made by the Account Parties party thereto in favor of the
Administrative Agent, in substantially the form of Exhibit D, as amended.
"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.
"Pro Rata" means from and to the Banks in accordance with their
respective Letter of Credit Participating Interest Percentages.
"Pro Rata Share" means, for any Bank, its share determined Pro
Rata, in accordance with the definition of the term "Pro Rata."
"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.
"Register" has the meaning specified in Section 9.07(d).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Required Banks" means, at any time, Banks owed or holding at
least a majority in interest of the sum of (a) aggregate principal amount
of the Letter of Credit 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, Banks having LC Commitment Amounts constituting
at least a majority in interest of the aggregate of the LC Commitment
Amounts; provided, however, that if any Bank shall be a Defaulting Bank at
such time, there shall be excluded from the determination of Required Banks
at such time (A) the aggregate principal amount of the interest of such
Bank in Letter of Credit Advances and outstanding at such time, (B) such
Bank's Pro Rata Share of the aggregate Available Amount of all Letters of
Credit outstanding at such time and (C) the Unused LC Commitment Amount of
such Bank at such time.
"Responsible Officer" means the Chairman, Chief Executive Officer,
President, Chief Financial Officer, Chief Accounting Officer, Treasurer or
General Counsel of the Parent.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
13
"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.
"Security Documents" means, collectively, (i) the Pledge and
Security Agreement and all other security agreements, pledge agreements,
charges and mortgages at any time delivered to the Administrative Agent to
create or evidence the Liens securing the Obligations, and (ii) the State
Street Control Agreements and all other control agreements and similar
agreements pursuant to which a Lien on a Custodial Account (and on the
contents thereof) securing the Obligations is perfected in favor of the
Administrative Agent, in each case under (i) and (ii), as amended.
"Significant Subsidiary" means a Subsidiary of Parent that is a
"significant subsidiary" of the Parent under Regulation S-X promulgated by
the Securities and Exchange Commission.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the present
fair salable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay such debts and liabilities as they mature and
(d) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount that, in
the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual
or matured liability.
"Special Purpose Trust" means a special purpose business trust
established by the Parent or ACE INA of which the Parent or ACE INA will
hold all the common securities, which will be the issuer of the Preferred
Securities, and which will loan to the Parent or ACE INA (such loan being
evidenced by the Debentures) the net proceeds of the issuance and sale of
the Preferred Securities and common securities of such Special Purpose
Trust.
"State Street" means State Street Bank and Trust Company.
"State Street Control Agreements" means, collectively, the control
agreements among State Street, the Administrative Agent and (respectively)
each of the Account Parties, each in form and substance reasonably
satisfactory to the Administrative Agent, pursuant to which a Lien on the
State Street Custodial Accounts and the contents thereof and all security
entitlements related thereto securing the Obligations is perfected in favor
of the Administrative Agent, as amended.
▇▇
"▇▇▇▇▇ ▇▇▇▇▇▇ Custodial Accounts" means, collectively, the
Custodial Accounts of each of the Account Parties pledged pursuant to the
Pledge and Security Agreement and in which the Administrative Agent's Lien
is perfected pursuant to the State Street Control Agreements.
"State Street Custodial Agreements" means, collectively, the
Custodial Agreements, each dated as of December 14, 2001, between State
Street and (respectively) each of the Account Parties, in each case as
amended.
"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.
"Subsidiary Guarantors" means the Account Parties (other than the
Parent).
"Syndication Agents" has the meaning specified in the recital of
parties to this Agreement.
"Taxes" has the meaning specified in Section 2.08(a).
"Tempest" has the meaning specified in the recital of parties to
this Agreement.
"Tempest Life" has the meaning specified in the recital of parties
to this Agreement.
"Tempest Life Effective Date" has the meaning specified in Section
7.01(c).
"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.
"Uniform Commercial Code" has the meaning specified in the Pledge
and Security Agreement.
"Unused LC Commitment Amount" means, with respect to any Bank at
any time, (a) such Bank's LC Commitment Amount at such time minus (b) such
Bank's Pro Rata Share of (i) the aggregate Available Amount of all Letters
of Credit hereunder (including, without limitation, all Existing Letters of
Credit) and (ii) the aggregate principal amount of all Letter of Credit
Advances made by the Issuing Bank pursuant to Section 2.02(f) and
outstanding at such time (whether held by the Issuing Bank or the Banks).
15
"U.S. Government Securities" means securities issued or
unconditionally guaranteed by the United States of America or any agency or
instrumentality thereof and backed by the full faith and credit of the
United States of America.
"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.
"Wachovia" has the meaning specified in the recital of parties to
this Agreement.
"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 in the United States of America ("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 Banks;
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 Banks wish to amend Article V for such purpose), then the Parent's
compliance with such covenant shall be determined on the basis of generally
accepted accounting principles in effect immediately before the relevant
change in generally accepted accounting principles became effective (and,
concurrently with the delivery of any financial statements required to be
delivered hereunder, the Parent shall provide a statement of reconciliation
conforming such financial information to such generally accepted accounting
principles as previously in effect), until either such notice is withdrawn
or such covenant is amended in a manner satisfactory to the Parent and the
Required Banks.
16
ARTICLE II
AMOUNTS AND TERMS OF
THE LETTERS OF CREDIT
SECTION 2.01 The Letters of Credit. The Issuing Bank agrees, on the
terms and subject to the conditions herein set forth, to issue standby letters
of credit (the "Letters of Credit") for the account of any Account Party on
any Letter of Credit Business Day from time to time during the period from
the Effective Date to the Expiration Date. From and after the Effective
Date, the Existing Letters of Credit shall be Letters of Credit hereunder.
The Issuing Bank shall have no obligation to issue, and no Account Party
will request the issuance of, any Letter of Credit hereunder if either (a)
at the time of issuance of such Letter of Credit and after giving effect
thereto, the Letter of Credit Exposure would exceed the lesser of (x) the
Letter of Credit Issuance Commitment Amount and (y) the aggregate
Collateral Value, or (b) any Bank's Pro Rata Share of the Available Amount
of such Letter of Credit exceeds, immediately before the time of such
issuance, an amount equal to such Bank's Pro Rata Share of the total Unused
LC Commitment Amounts of the Banks at such time (as such amount shall be
advised by the Administrative Agent to the Issuing Bank as contemplated by
Section 2.02). Unless all the Banks consent otherwise in writing, the
Issuing Bank shall have no obligation to issue, and no Account Party 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 LC Commitment Amounts of
the Banks at such time (as such amount shall be advised by the
Administrative Agent to the Issuing Bank as contemplated by Section 2.02).
The Issuing Bank shall have no obligation to issue, and no Account Party
shall request the issuance of, any Letter of Credit except within the
following limitations: (i) subject to the provisions of Section 2.16, 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 Account Party or the beneficiary to require
renewal) later than 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 (which the Issuing Bank agrees to do on
and subject to the terms of Section 2.02(c)). The Issuing Bank shall have
no obligation to issue any letter of 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. Letters of
Credit may be issued for the account of any Subsidiary of the Parent that
is not an Account Party hereunder, provided that the Parent shall be a
joint applicant and account party with respect to any such Letter of
Credit. By their execution of this Agreement, the Banks party hereto as of
the Effective Date that are also party to the Existing Reimbursement
Agreement as "Banks" thereunder hereby waive, in their capacity as the
"Required Banks" under the Existing Reimbursement Agreement, the
requirement of three Business Days' prior written notice for the
termination of the LC Commitment Amounts (as defined in the Existing
Reimbursement Agreement) pursuant to Section 2.04 thereof, and agree that
such notice may be given on the Effective Date of this Agreement.
17
SECTION 2.02 Issuance and Renewals and Drawings, Participations
and Reimbursement with Respect to Letters of Credit.
(a) Request for Issuance. An Account Party may from time to time
request, upon at least three Letter of Credit Business Days' notice (given
not later than 11:00 A.M. Charlotte, North Carolina 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 either (x) a written
request to such effect or (y) a request made in electronic form
through the Issuing Bank's remote access system and in accordance
with the terms and conditions (including any written agreements
between the Issuing Bank and any Account Party) applicable
thereto, in each case 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 in each case with a copy of such request (or, in the
case of clause (y) above, a written or electronic summary thereof)
to the Administrative Agent; 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 or information as
are specified in such Letter of Credit Agreement or as may be
required pursuant to the Issuing Bank's customary practices for
the issuance of letters of credit (including requirements relating
to requests made through the Issuing Bank's remote access system).
In addition, the applicable Account Party shall deliver to the
Administrative Agent a Collateral Value Report not later than 11:00 A.M.
Charlotte, North Carolina time on the Letter of Credit Business Day
immediately preceding the date on which such Letter of Credit is to be
issued.
The Administrative Agent shall, promptly upon receiving a copy of the
notice referred to in clause (i) above, notify the Banks 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. (Charlotte, North Carolina 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 Banks 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 Applicable Account Party shall otherwise
direct, and shall promptly notify the Administrative Agent thereof and
furnish a copy thereof to the Administrative Agent. The Issuing Bank may
18
issue Letters of Credit through any of its branches or Affiliates (whether
domestic or foreign) that issue letters of credit, and each Account Party
authorizes and directs the Issuing Bank to select the branch or Affiliate
that will issue or process any Letter of Credit.
(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 issued for its account or 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 (including for purposes of
Section 2.02(a)) 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 Banks, 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
2.02(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 Bank, 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. With respect
to each Letter of Credit that remains outstanding at any time after the
Expiration Date and that provides by its terms for automatic renewal, the
Issuing Bank shall notify the beneficiary thereof, in accordance with the
terms specified for such notice in such Letter of Credit, of the Issuing
Bank's election not to renew such Letter of Credit.
(d) Letter of Credit Participating Interests. Concurrently with
the issuance of each Letter of Credit (and upon the Effective Date, with
respect to each Existing Letter of Credit, and without any further action
by any party to this Agreement), the Issuing Bank automatically shall be
deemed, irrevocably and unconditionally, to have sold, assigned,
transferred and conveyed to each other Bank, and each other Bank
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 Bank'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
19
securing the foregoing (such interest of each Bank 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 Banks). Each Bank 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 Bank
other than the Issuing Bank and other than Letter of Credit commissions
under Section 2.05(c)(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
Bank from which such assignee acquired its interest hereunder shall be
proportionately reallocated between such assignee and such assignor Bank
(and, to the extent such assignor Bank is the Issuing Bank, the assignee
Bank shall be deemed to have acquired a Letter of Credit Participating
Interest from the Issuing Bank to such extent). Notwithstanding any other
provision hereof, each Bank hereby agrees that its obligation to
participate in each Letter of Credit, its obligation to make the payments
specified in Section 2.02(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 Bank to make any
such payment shall not relieve any other Bank of its funding obligation
hereunder on the date due, but no Bank shall be responsible for the failure
of any other Bank to meet its funding obligations hereunder.
(e) Payment by Banks 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
2.03(a), the Issuing Bank may notify the Administrative Agent thereof
(which notice may be by telephone), and the Administrative Agent shall
forthwith notify each Bank (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. Charlotte, North Carolina time) or 10:00 A.M. Charlotte, North
Carolina time the following day (if notice is given after 2:00 P.M.
Charlotte, North Carolina time or in the case of any Bank whose Applicable
Lending Office is located in Europe), each Bank will pay to the
Administrative Agent, for the account of the Issuing Bank, in immediately
available funds, an amount equal to such Bank'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 Bank fails to make such payment to the
Administrative Agent for the account of the Issuing Bank on such date, such
Bank shall pay such amount on demand, together with interest, for the
Issuing Bank's own account, for each day from and including the date such
payment is due from such Bank to the Issuing Bank 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 such payment is due
from such Bank to 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. For avoidance of doubt, it is understood and agreed by the Banks
that Letters of Credit issued prior to the Expiration Date may, by their
terms, remain outstanding after the Expiration Date and that the
obligations of the Banks to make payments under this Section 2.02(e) shall
continue from and after the Expiration Date until the expiration or
termination of all Letters of Credit, subject to and in accordance with the
terms hereof.
(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
20
paragraph 2.02(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 Bank for the account of the Issuing Bank under
Section 2.02(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 Account Party by such Bank. The making of such a Letter
of Credit Advance by a Bank 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 or renewal 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 Bank prior to the tenth Business Day of each calendar
quarter a written report summarizing issuance, renewal and expiration dates
of Letters of Credit issued or renewed during the preceding calendar
quarter and payments and reductions in Available Amount during such
calendar quarter on all Letters of Credit and (B) to each Bank 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 2.03 Repayment of Advances.
(a) Account Parties' 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 2.07)
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 as provided
in the first sentence of this clause (i), (x) such Account Party
hereby agrees to pay to the Administrative Agent, for the
respective accounts of the Issuing Bank and the Banks which have
funded their respective shares of such amount remaining unpaid by
such Account Party, on demand, interest thereon at a rate per
annum for each day equal to 2% plus the Base Rate in effect on
such day, and (y) each Account Party shall be deemed to have
delivered an irrevocable and continuing Letter of Instruction to
the Administrative Agent (which each Account Party hereby
irrevocably authorizes the Administrative Agent to date the date
that such payment to the Administrative Agent is due and payable
and to deliver to the Persons identified therein) instructing the
Administrative Agent to obtain, receive and apply at or after such
time such part of the Collateral or the proceeds thereof as is
equivalent to such reimbursement obligation and any interest
thereon that may accrue prior to such application.
21
(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 Bank under
Section 2.02(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 Account Party 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 Account Party 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;
(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
Account Party 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 Account Party or a
guarantor.
(b) 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
22
or payment is required, whether or not such matter has been adjudicated),
each Bank will (except to the extent a corresponding amount received by
such Bank 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 Bank), 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 2.04 Termination or Reduction of the LC Commitment Amounts.
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 LC
Commitment Amounts; 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, (ii) shall be made ratably among the Banks in
accordance with their LC Commitment Amounts and (iii) shall automatically
reduce the Issuing Bank's Letter of Credit Issuance Commitment Amount, as
contemplated by the definition of that term.
SECTION 2.05 Fees.
(a) Commitment Fee. The Account Parties jointly and severally
agree to pay to the Administrative Agent for the account of the Banks a
commitment fee, from the Effective Date in the case of each Initial Bank
and from the effective date specified in the Assignment and Acceptance
pursuant to which it became a Bank in the case of each other Bank until the
Expiration Date, payable in arrears quarterly on the last Business Day of
each March, June, September and December commencing December 31, 2002 and
on the Expiration Date, at a rate equal to 0.08% per annum on the average
daily Unused LC Commitment Amount of each Bank during such quarter (or
shorter period); provided, however, that no commitment fee shall accrue on
the LC Commitment Amount of a Defaulting Bank so long as such Bank shall be
a Defaulting Bank.
(b) Administrative Agent's Fees. The Account Parties jointly and
severally agree to pay to the Administrative Agent for its own account such
fees as may from time to time be agreed between the Parent and the
Administrative Agent.
(c) Letter of Credit Fees, Etc.
(i) The Account Parties jointly and severally agree to
pay to the Administrative Agent for the account of each Bank a
commission, payable in arrears quarterly on the last Business Day
of each March, June, September and December commencing December
31, 2002 and on the Expiration Date, on such Bank's Pro Rata Share
of the average daily aggregate Available Amount during such
quarter (or shorter period) of all Letters of Credit outstanding
from time to time at a rate equal to 0.30% per annum.
(ii) The Account Parties jointly and severally agree to
pay to the Issuing Bank, for its own account, (x) the facing fee
referred to the Fee Letter, on the terms set forth therein, and
(y) the Issuing Bank's customary issuance, presentation, amendment
and other processing fees, and other standard costs and charges,
23
relating to letters of credit as are from time to time in effect.
With respect to the Existing Letters of Credit, Wachovia shall be
entitled to receive the fees and other amounts provided for under
this Section 2.05(c)(ii) (to the extent not previously paid to
Wachovia pursuant to the Existing Reimbursement Agreement) as if
the Existing Letters of Credit were issued hereunder on the
Effective Date.
(iii) Notwithstanding the foregoing provisions of this
Section 2.05(c), until the Tempest Life Effective Date, Tempest
Life shall be obligated under this Section 2.05(c) only for the
portion of such fees, commissions and charges allocable or
attributable to Letters of Credit issued for its own account.
SECTION 2.06 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 Bank of agreeing to issue or of issuing or maintaining or
participating in Letters of Credit or the making of Letter of Credit
Advances (excluding, for purposes of this Section 2.06, any such increased
costs resulting from (x) Taxes or Other Taxes (as to which Section 2.08
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 Bank is organized or has
its Applicable Lending Office or any political subdivision thereof), then
the Account Parties jointly and severally agree to pay, from time to time,
within five days after demand by such Bank (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 Bank
additional amounts sufficient to compensate such Bank for such increased
cost. A certificate as to the amount of such increased cost, submitted to
the Account Parties by such Bank, shall be conclusive and binding for all
purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any change in or
in the interpretation of any law or regulation, in each case after the date
hereof, or (ii) the compliance with any guideline or request issued after
the date hereof from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in
the amount of capital required or expected to be maintained by any Bank or
any corporation controlling such Bank as a result of or based upon the
existence of such Bank's commitment to lend hereunder and other commitments
of such type, then, within five days after demand by such Bank 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 Account
Parties jointly and severally agree to pay to the Administrative Agent for
the account of such Bank, from time to time as specified by such Bank,
additional amounts sufficient to compensate such Bank in the light of such
circumstances, to the extent that such Bank reasonably determines such
increase in capital to be allocable to the existence of such Bank's
commitment to issue or participate in Letters of Credit hereunder or to the
24
issuance or maintenance of or participation in any Letters of Credit. A
certificate as to such amounts submitted to the Account Parties by such
Bank shall be conclusive and binding for all purposes, absent manifest
error.
(c) Each Bank shall promptly notify the Account Parties 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 Bank's good faith judgment, otherwise disadvantageous to
such Bank) to mitigate or avoid any obligation by the Account Parties to
pay any amount pursuant to subsection (a) or (b) above or pursuant to
Section 2.08 (and, if any Bank has given notice of any such event and
thereafter such event ceases to exist, such Bank shall promptly so notify
the Account Parties and the Administrative Agent). Without limiting the
foregoing, each Bank will designate a different Applicable Lending Office
if such designation will avoid (or reduce the cost to the Account Parties
of) any event described in the preceding sentence and such designation will
not, in such Bank's good faith judgment, be otherwise disadvantageous to
such Bank.
(d) Notwithstanding the provisions of subsections (a) and (b)
above or Section 2.08 (and without limiting subsection (c) above), if any
Bank fails to notify the Account Parties of any event or circumstance that
will entitle such Bank to compensation pursuant subsection (a) or (b) above
or Section 2.08 within 120 days after such Bank obtains actual knowledge of
such event or circumstance, then such Bank shall not be entitled to
compensation from the Account Parties for any amount arising prior to the
date which is 120 days before the date on which such Bank notifies the
Account Parties of such event or circumstance. For avoidance of doubt, it
is noted that the term "Bank" as used in this Section 2.06 and in other
Sections of this Agreement includes the Issuing Bank in its capacity as
such.
SECTION 2.07 Payments and Computations.
(a) The Account Parties shall make each payment hereunder
irrespective of any right of counterclaim or set-off (except as otherwise
provided in Section 2.11), not later than 11:00 A.M. (Charlotte, North
Carolina 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 Account Party is in respect of
principal, interest, commitment fees or any other amount then payable
hereunder to more than one Bank, to such Banks for the account of their
respective Applicable Lending Offices ratably in accordance with the
amounts of such respective amount then payable to such Banks and (ii) if
such payment by such Account Party is in respect of any amount then payable
hereunder to one Bank, to such Bank for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of
this Agreement. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 9.07(d), from and after the effective date of such Assignment and
Acceptance, the Administrative Agent shall make all payments hereunder in
respect of the interest assigned thereby to the Bank assignee thereunder,
and the parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.
25
(b) Each Account Party hereby authorizes each Bank, 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 Account Party's accounts with
such Bank any amount that resulted in such Event of Default.
(c) All computations of interest on Letter of Credit Advances (and
any other amount payable by reference to the Base Rate) when the Base Rate
is determined by reference to Wachovia'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 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 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.
SECTION 2.08 Taxes.
(a) Any and all payments by any Loan Party hereunder shall be
made, in accordance with Section 2.07, 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 Bank 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
Bank or such Agent, as the case may be, is organized or any political
subdivision thereof and, in the case of each Bank, taxes that are imposed
on its overall net income (and franchise taxes imposed in lieu thereof) by
the state or foreign jurisdiction of such Bank'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 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 to any Bank 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 2.08) such Bank or such Agent, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) such Loan Party shall make all such deductions and (iii) such
Loan Party shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, each Loan Party shall pay any present or future
stamp, documentary, excise, property or similar taxes, charges or levies
that arise from any payment made hereunder or from the execution, delivery
or registration of, performance under, or otherwise with respect to, this
Agreement or any other Loan Document (herein referred to as "Other Taxes").
26
(c) Each Loan Party shall indemnify each Bank 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 2.08, imposed on or paid by such Bank 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 Bank 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 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
2.08, 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 Bank 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 Bank or the Issuing
Bank, as the case may be, and on the date of the Assignment and Acceptance
pursuant to which it becomes a Bank in the case of each other Bank, and
from time to time thereafter as requested in writing by the Parent (but
only so long thereafter as such Bank 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 Bank
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 Bank delivers a form W-8, a certificate representing
that such Bank 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 Bank is exempt from or entitled to a
reduced rate of United States withholding tax on payments pursuant to this
Agreement or, in the case of a Bank providing a form W-8, certifying that
such Bank is a foreign corporation, partnership, estate or trust. If the
forms provided by a Bank at the time such Bank 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 Bank provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such
lesser rate only shall be considered excluded from Taxes for periods
governed by such forms; provided, however, that if, at the effective date
of the Assignment and Acceptance pursuant to which a Bank becomes a party
to this Agreement, the Bank assignor was entitled to payments under
subsection (a) of this Section 2.08 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 includable in Taxes)
United States withholding tax, if any, applicable with respect to the Bank
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
27
on the date hereof by Internal Revenue Service form ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8
(and the related certificate described above), that the Bank reasonably
considers to be confidential, the Bank 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 Bank 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 Bank shall not be entitled to indemnification under subsection
(a) or (c) of this Section 2.08 with respect to Taxes imposed by the United
States by reason of such failure; provided, however, that should a Bank
become subject to Taxes because of its failure to deliver a form required
hereunder, the Parent shall take such steps as such Bank shall reasonably
request to assist such Bank to recover such Taxes.
(g) Each Bank represents and warrants to the Account Parties that,
as of the date such Bank becomes a party to this Agreement, such Bank is
entitled to receive payments hereunder from the Account Parties without
deduction or withholding for or on account of any Taxes.
SECTION 2.09 Sharing of Payments, Etc. If any Bank 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
Bank hereunder 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
Bank at such time to (ii) the aggregate amount of the Obligations due and
payable to all Banks hereunder at such time) of payments on account of the
Obligations due and payable to all Banks hereunder at such time obtained by
all the Banks at such time or (b) on account of Obligations owing (but not
due and payable) to such Bank hereunder at such time in excess of its
ratable share (according to the proportion of (i) the amount of such
Obligations owing to such Bank at such time to (ii) the aggregate amount of
the Obligations owing (but not due and payable) to all Banks hereunder at
such time) of payments on account of the Obligations owing (but not due and
payable) to all Banks hereunder at such time obtained by all of the Banks
at such time, such Bank shall forthwith purchase from the other Banks 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 Bank 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 Bank, such purchase from each
other Bank shall be rescinded and such other Bank shall repay to the
purchasing Bank the purchase price to the extent of such Bank's ratable
share (according to the proportion of (i) the purchase price paid to such
Bank to (ii) the aggregate purchase price paid to all Banks) of such
recovery together with an amount equal to such Bank's ratable share
(according to the proportion of (i) the amount of such other Bank's
required repayment to (ii) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. Each Account
Party agrees that any Bank so purchasing an interest or participating
interest from another Bank pursuant to this Section 2.09 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
28
participating interest, as the case may be, as fully as if such Bank were
the direct creditor of such Account Party in the amount of such interest or
participating interest, as the case may be.
SECTION 2.10 Use of Letters of Credit. The Letters of Credit shall be
used for the general corporate purposes of the Account Parties and their
respective Subsidiaries.
SECTION 2.11 Defaulting Banks.
(a) In the event that, at any one time, (i) any Bank shall be a
Defaulting Bank, (ii) such Defaulting Bank shall owe a Defaulted Amount to
any Agent or any of the other Banks and (iii) any Account Party shall make
any payment hereunder or under any other Loan Document to the
Administrative Agent for the account of such Defaulting Bank, then the
Administrative Agent may, on its behalf or on behalf of such other Banks
and to the fullest extent permitted by applicable law, apply at such time
the amount so paid by such Account Party to or for the account of such
Defaulting Bank 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 Banks, ratably in accordance with the respective portions of such
Defaulted Amounts payable at such time to the Administrative Agent and such
other Banks and, if the amount of such payment made by such Account Party
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
Banks, in the following order of priority:
(i) first, to the Agents for any 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
Bank, ratably in accordance with such amounts then due and payable
to the Issuing Bank; and
(iii) third, to any other Banks for any Defaulted Amounts
then owing to such other Banks, ratably in accordance with such
respective Defaulted Amounts then owing to such other Banks.
Any portion of such amount paid by such Account Party for the account of
such Defaulting Bank remaining, after giving effect to the amount applied
by the Administrative Agent pursuant to this subsection (a), shall be
applied by the Administrative Agent as specified in subsection (b) of this
Section 2.11.
(b) In the event that, at any one time, (i) any Bank shall be a
Defaulting Bank, (ii) such Defaulting Bank shall not owe a Defaulted Amount
and (iii) any Account Party, any Agent or other Bank shall be required to
pay or distribute any amount hereunder or under any other Loan Document to
or for the account of such Defaulting Bank, then such Account Party or such
29
Agent or such other Bank 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 and 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 (b) shall be deposited by the Administrative Agent in
an account with Wachovia in the name and under the control of the
Administrative Agent, but subject to the provisions of this subsection (b).
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 Wachovia'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 (b). The Administrative Agent shall, to the
fullest extent permitted by applicable law, apply all funds so held in
escrow from time to time to the extent necessary to make any Advances
required to be made by such Defaulting Bank and to pay any amount payable
by such Defaulting Bank hereunder and under the other Loan Documents to the
Administrative Agent or any other Bank, 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 Bank to the Agents hereunder;
(ii) second, to the Issuing Bank for any amount then due
and payable to it, in its capacity as such, by such Defaulting
Bank, ratably in accordance with such amounts then due and payable
to such Issuing Bank; and
(iii) third, to any other Banks for any amount then due
and payable by such Defaulting Bank to such other Banks hereunder,
ratably in accordance with such respective amounts then due and
payable to such other Banks.
In the event that any Bank that is a Defaulting Bank shall, at any time,
cease to be a Defaulting Bank, any funds held by the Administrative Agent
in escrow at such time with respect to such Bank shall be distributed by
the Administrative Agent to such Bank and applied by such Bank to the
Obligations owing to such Bank 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.
(c) The rights and remedies against a Defaulting Bank under this
Section 2.11 are in addition to other rights and remedies that any Agent or
any Bank may have against such Defaulting Bank with respect to any
Defaulted Amount.
SECTION 2.12 Replacement of Affected Bank. At any time any Bank is an
Affected Bank, the Account Parties may replace such Affected Bank as a party to
this Agreement with one or more other Banks and/or Eligible Assignees, and upon
notice from the Account Parties such Affected Bank shall assign pursuant to
an Assignment and Acceptance, and without recourse or warranty, its LC
Commitment Amount, its Letter of Credit Advances, its obligations to fund
Letter of Credit payments, its participation in, and its rights and
30
obligations with respect to, Letters of Credit, and all of its other rights
and obligations hereunder to such other Banks and/or Eligible Assignees for
a purchase price equal to the sum of the principal amount of the Letter of
Credit Advances so assigned, all accrued and unpaid interest thereon, such
Affected Bank's ratable share of all accrued and unpaid fees payable
pursuant to Section 2.05 and all other Obligations owed to such Affected
Bank hereunder.
SECTION 2.13 Certain Provisions Relating to the Issuing Bank and
Letters of Credit.
(a) Letter of Credit Agreements. The representations, warranties
and covenants by the Account Parties 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 Account Parties under,
and rights and remedies of the Issuing Bank and the Banks 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 Bank to the extent of its Letter of
Credit Participating Interest Commitment and Letter of Credit Advances as
fully as if such Bank 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 Bank 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 Banks 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 Bank 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 to the extent resulting from the
gross negligence or willful misconduct of the Issuing Bank, as finally
determined by a court of competent jurisdiction. The Issuing Bank shall not
be under any obligation to ascertain, inquire or give any notice to any
Agent or any Bank 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 Account Party, (ii) the business, operations, condition
(financial or otherwise) or prospects of the Account Parties 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 Bank 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, electronic or oral, including
but not limited to telephone conversations and transmissions through the
Issuing Bank's remote access system, 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
31
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 Account Parties), independent public accountants and
any other 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 Account Party,
any Agent or any Bank, such matter may be established by a certificate of
such Account Party, such Agent or such Bank, 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 Bank, an
Agent or an Account Party referring to this Agreement, describing such
Default, and stating that such notice is a "notice of default".
(d) Indemnification of Issuing Bank by Banks. Each Bank hereby
agrees to reimburse and indemnify the Issuing Bank and each of its
directors, officers, employees and agents (to the extent not reimbursed by
the Account Parties and without limitation of the obligations of the
Account Parties 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 Bank 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 Bank and may exercise the same as though it were not
the Issuing Bank, and the term "Banks" 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 Account Party and any stockholder,
subsidiary or affiliate of any Account Party, as though the Issuing Bank
were not the Issuing Bank hereunder.
SECTION 2.14 Downgrade Event with Respect to a Bank.
(a) If a Downgrade Event shall occur with respect to (i) any
Downgraded Bank or (ii) any other Bank and, as a result thereof, such other
Bank becomes a Downgraded Bank, then the Issuing Bank may, by notice to
such Downgraded Bank, the Administrative Agent and the Parent within 45
days after such Downgrade Event (any such notice, a "Downgrade Notice"),
32
request that the Account Parties use reasonable efforts to replace such
Bank as a party to this Agreement pursuant to Section 2.12. If such Bank is
not so replaced within 45 days after receipt by the Account Parties of such
Downgrade Notice, then (x) if no Default exists and such Downgraded Bank
has not exercised its right to remain a Bank hereunder pursuant to clause
(y) below, the following shall occur concurrently:
(A) the Committed Facility shall be reduced by
the amount of the LC Commitment Amount of such Downgraded
Bank,
(B) the Account Parties shall prepay all amounts
owed to such Downgraded Bank hereunder or in connection
herewith
(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 Account
Parties will immediately eliminate such excess by paying
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 Bank
shall cease to be a party to this Agreement;
or (y) if a Default exists or, not later than 30 days after receipt of such
Downgrade Notice, such Downgraded Bank notifies the Account Parties, the
Issuing Bank and the Administrative Agent that such Downgraded Bank elects
to provide (in a manner reasonably satisfactory to the Issuing Bank) cash
collateral to the Issuing Bank for (or if such Downgraded Bank 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 2.02(e) (its "LC Participation
Obligations"), such Downgraded Bank shall be obligated to (and each Bank
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 Bank), 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 Bank 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 (or any drawing under such a letter of credit) shall be
used only in accordance with the following provisions of this Section 2.14.
(b) If any Downgraded Bank shall be required to fund its
participation in a payment under a Letter of Credit pursuant to Section
2.02(e), then the Issuing Bank shall apply the funds deposited in the
applicable Downgrade Account by such Downgraded Bank (or any drawing under
33
such a letter of credit) to fund such participation. The deposit of funds
in a Downgrade Account by any Downgraded Bank (or any drawing under such a
letter of credit) shall not constitute a Letter of Credit Advance (and the
Downgraded Bank 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 (or any drawing under such a letter of credit) are used by
the Issuing Bank to fund the participation of such Downgraded Bank 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 Bank, and the income from such investments shall be distributed
to such Downgraded Bank from time to time (but not less often than monthly)
as agreed between the Issuing Bank and such Downgraded Bank. The Issuing
Bank will (i) from time to time, upon request by a Downgraded Bank, release
to such Downgraded Bank any amount on deposit in the applicable Downgrade
Account in excess of the LC Participation Obligations of such Downgraded
Bank (or, if applicable, not draw under any such letter of credit in excess
of the L/C Participation Obligations of such Downgraded Bank) and (ii) upon
the earliest to occur of (A) the effective date of any replacement of such
Downgraded Bank as a party hereto pursuant to an Assignment and Acceptance,
(B) the termination of such Downgraded Bank's LC Commitment Amount 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 Bank is no longer a Downgraded Bank, release to such Bank
all amounts on deposit in the applicable Downgrade Account (or, if
applicable, return such letter of credit to such Bank for cancellation).
(d) At any time any Downgraded Bank is required to maintain cash
collateral with the Issuing Bank pursuant to this Section 2.14, the Issuing
Bank shall have no obligation to issue or increase any Letter of Credit
unless such Downgraded Bank has provided sufficient funds as cash
collateral to the Issuing Bank to cover all LC Participation Obligations of
such Downgraded Bank (including in respect of the Letter of Credit to be
issued or increased).
SECTION 2.15 Downgrade Event or Other Event with Respect to the
Issuing Bank. At any time that the Issuing Bank is a Downgraded Bank or at
such other times as the Issuing Bank and the Account Parties may agree, the
Account Parties 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 Bank (so
long as such Bank 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
34
actions taken or omitted by it while it was an "Issuing Bank" under this
Agreement. The Account Parties agree that after any appointment of a New
Issuing Bank hereunder, the Account Parties 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 with a Letter of Credit issued by the New
Issuing Bank.
SECTION 2.16 Non-Dollar Letters of Credit.
(a) The Account Parties, the Administrative Agent, the Issuing
Bank and the Banks (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 set forth in
the following paragraphs of this Section with respect to such Non-Dollar
Letters of Credit.
(b) The Account Parties agree that their reimbursement obligations
under Section 2.03(a) 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 by the Account Parties or, in the event
of payment by the Banks pursuant to Section 2.02(e), on the date of such
payment by the Banks), and (ii) shall bear interest at a rate per annum
equal to the Base Rate plus 2%, for each day from and including the date on
which the Applicable Account Party is to reimburse the Issuing Bank
pursuant to Section 2.03(a) to but excluding the date such obligation is
paid in full.
(c) Each Bank agrees that its obligation to pay the Issuing Bank
such Bank's Pro Rata Share of the unreimbursed portion of any payment by
the Issuing Bank under Section 2.02(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, 2%.
(d) For purposes of determining whether there is availability for
the Account Parties 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
35
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 2.05(c), 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 Business Day of each March, June, September and December and (4)
each day on which the LC Commitment Amounts are to be reduced pursuant to
Section 2.04 (it being understood that no requested reduction shall be
permitted to the extent that, after making a calculation pursuant to this
clause (e), such reduction would be greater than the unused portion of the
LC Commitment Amounts).
(f) If, on the last Business Day of each March, June, September
and December, 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 Account Parties will immediately
eliminate such excess by paying 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 Bank 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 Bank
of any sum adjudged to be so due in the Judgment Currency, the Issuing Bank
or such Bank 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 Bank 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 Bank, 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 Bank in
such currency, the Issuing Bank and each Bank 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.
SECTION 2.17 Collateral.
(a) Pursuant to the Security Documents and as collateral security
for the payment and performance of the Obligations, the Account Parties
36
shall grant and convey, or cause to be granted and conveyed, to the
Administrative Agent for its benefit and the benefit of the Banks, a Lien
and security interest in, to and upon the Collateral, prior and superior to
all other Liens. Each Account Party shall cause the Collateral to be
charged or pledged and be made subject to the Security Documents (in form
and substance acceptable to the Administrative Agent) necessary for the
perfection of the Lien and security interest in, to and upon the Collateral
and for the exercise by the Administrative Agent and the Banks of their
rights and remedies hereunder and thereunder. Notwithstanding the
foregoing, and for the sake of clarity, until the Tempest Life Effective
Date, the Obligations secured by any Collateral pledged by Tempest Life
shall not include any Obligations of Tempest Life under Article VII of this
Agreement.
(b) (i) On the Letter of Credit Business Day immediately preceding
the proposed date of issuance or renewal of a Letter of Credit under
Section 2.02(a), (ii) within ten (10) Business Days after the end of each
calendar month, and (iii) at and as of such other times as the
Administrative Agent or the Required Banks may reasonably request in its
(or their) sole discretion, the Account Parties shall deliver or cause to
be delivered to the Administrative Agent a certificate executed by the
Parent, in the form of Exhibit B or otherwise in a form reasonably
satisfactory to the Administrative Agent (which form may vary depending on
the frequency of the delivery of such certificate), setting forth the
Letter of Credit Outstandings, the Collateral Value of the Collateral by
category and in the aggregate, and such other information as the
Administrative Agent may reasonably request (such certificate, a
"Collateral Value Report"). Such certificate shall be subject to review and
verification by the Administrative Agent, it being understood and agreed
that the Administrative Agent shall have the right to redetermine the
Collateral Value of the Collateral in accordance with the terms and
provisions of this Agreement and the Security Documents.
ARTICLE III
CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01 Conditions Precedent to Effective Date. The occurrence
of the Effective Date, and the obligation of the Issuing Bank to issue any
Letter of Credit on the Effective Date, is subject to the satisfaction of
the following conditions precedent:
(i) The Administrative Agent shall have received the
following, each dated the Effective Date (unless otherwise
specified), in form and substance reasonably satisfactory to the
Administrative Agent (unless otherwise specified) and in
sufficient copies for each Bank:
(A) Copies of the Pledge and Security Agreement,
duly completed and executed by each Account Party that is
a party thereto, the State Street Control Agreements,
each duly completed and executed by State Street and by
the Account Party that is a party thereto, and the State
Street Custodial Agreements.
(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
37
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 each Loan Party, dated reasonably
near the Effective Date, 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 (or equivalent officer if such Loan Party has
no Vice President) and its Secretary or any Assistant
Secretary (the statements made in which certificate shall
be true on and as of the Effective Date), certifying as
to (1) a true and correct copy of the constitutional
documents of such Loan Party as in effect on the date on
which the resolutions referred to in Section
3.01(a)(i)(B) were adopted and on the Effective Date, (2)
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, (3) the truth of the
representations and warranties contained in the Loan
Documents as though made on and as of the Effective Date
and (4) the absence of any event occurring and
continuing, or resulting from the Effective Date, 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 C-1 hereto and as to
such other matters as any Bank through the Administrative
Agent may reasonably request, (2) Mayer, Brown, ▇▇▇▇ &
Maw, New York counsel for the Loan Parties, in
substantially the form of Exhibit C-2 hereto and as to
such other matters as any Bank through the Administrative
Agent may reasonably request, and (3) ▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇, Bermuda counsel for ACE Bermuda, Tempest Life
and Tempest, in substantially the form of Exhibit C-3
hereto and as to such other matters as any Bank through
the Administrative Agent may reasonably request.
(ii) 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.
38
(iii) No development or change shall have occurred after
December 31, 2001, and no information shall have become known
after such date, that has had or could reasonably be expected to
have a Material Adverse Effect.
(iv) The Account Parties shall have paid all accrued fees
of the Administrative Agent and the Banks and all accrued expenses
of the Administrative Agent (including the accrued fees and
expenses of counsel to the Administrative Agent and local counsel
on behalf of all of the Banks), in each case to the extent then
due and payable.
(v) The Administrative Agent shall have received evidence
satisfactory to it that all obligations of any Account Party
outstanding under the Existing Reimbursement Agreement (other than
fees and expenses of Wachovia's counsel) have been repaid and
satisfied in full and that, concurrently with the effectiveness of
this Agreement, the LC Commitment Amounts (as defined therein)
under the Existing Reimbursement Agreement have been reduced to
zero, and Wachovia shall have agreed, by its execution and
delivery of this Agreement, that the Existing Letters of Credit
issued under the Existing Reimbursement Agreement shall become
Letters of Credit hereunder as of the Effective Date.
SECTION 3.02 Conditions Precedent to Each Issuance, Extension or
Increase of a Letter of Credit. The obligation of the Issuing Bank to issue,
extend or increase a Letter of Credit (including any issuance on the Effective
Date) shall be subject to the further conditions precedent that on the date of
such issuance, extension or increase (a) the following statements shall be
true (and each request for issuance, extension, or increase, and the
acceptance by the Account Party that requested such issuance, extension or
increase shall constitute a representation and warranty by such Account
Party that both on the date of such notice and on the date of 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 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 the date of such issuance,
extension or increase, in which case as of such specific date
(provided, however, that the representation and warranty contained
in the last sentence of Section 4.01(g) shall be excluded from
this clause (i) at all times after (but shall be included on and
as of) the Effective Date); and
(ii) no Default has occurred and is continuing, or would
result from such issuance, extension or increase;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Bank or the Issuing Bank through the
Administrative Agent may reasonably request.
SECTION 3.03 Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each Bank
shall be deemed to have consented to, approved or accepted or to be satisfied
39
with each document or other matter required thereunder to be consented to
or approved by or acceptable or satisfactory to the Banks unless an officer
of the Administrative Agent responsible for the transactions contemplated
by the Loan Documents shall have received notice from such Bank prior to
the Effective Date specifying its objection thereto, provided that such
Bank has been given at least one Business Day's notice that the final form
of such document or matter is available for its review.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of the Account Parties.
Each Account Party represents and warrants as follows:
(a) Each Loan Party and each of its Subsidiaries (i) is duly
organized or formed, validly existing and, to the extent such concept
applies, in good standing under the laws of the jurisdiction of its
incorporation or formation, (ii) is duly qualified and in good standing as
a foreign corporation or other entity in each other jurisdiction in which
it owns or leases property or in which the conduct of its business requires
it to so qualify or be licensed except where the failure to so qualify or
be licensed would not be reasonably likely to have a Material Adverse
Effect and (iii) has all requisite power and authority (including, without
limitation, all governmental licenses, permits and other approvals) to own
or lease and operate its properties and to carry on its business as now
conducted and as proposed to be conducted, except where the failure to have
any license, permit or other approval would not be reasonably likely to
have a Material Adverse Effect. All of the outstanding Equity Interests in
each Account Party (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 as of the Effective
Date.
(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
40
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 the Administrative Agent or
any Bank of its rights under the Loan Documents, except for the
authorizations, approvals, actions, notices and filings which have been
duly obtained, taken, given or made and are in full force and effect.
(e) This Agreement has been, and each other Loan Document when
delivered hereunder will have been, duly executed and delivered by each
Loan Party party thereto. This Agreement is, and each other Loan Document
when delivered hereunder will be, the legal, valid and binding obligation
of each Loan Party party thereto, enforceable against such Loan Party in
accordance with its terms.
(f) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries, including
any Environmental Action, pending or threatened before any court,
governmental agency or arbitrator that (i) could be reasonably likely to
have a Material Adverse Effect or (ii) would reasonably be expected to
affect the legality, validity or enforceability of any Loan Document or the
transactions contemplated by the Loan Documents.
(g) The Consolidated balance sheets of the Parent and its
Subsidiaries as at December 31, 2001, 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, and the
Consolidated balance sheets of the Parent and its Subsidiaries as at June
30, 2002, and the related Consolidated statements of income and cash flows
of the Parent and its Subsidiaries for the six months then ended, duly
certified by the Chief Financial Officer of the Parent, copies of which
have been furnished to each Bank, fairly present, subject, in the case of
said balance sheet as at June 30, 2002, and said statements of income and
cash flows for the six months then ended, to year-end audit adjustments,
the Consolidated financial condition of the Parent and its Subsidiaries as
at such dates and the Consolidated results of operations of the Parent and
its Subsidiaries for the periods ended on such dates, all in accordance
with generally accepted accounting principles applied on a consistent basis
(subject, in the case of the June 30, 2002 balance sheet and statements, to
the absence of footnotes). Since December 31, 2001, there has been no
Material Adverse Change.
(h) The Parent has delivered to the Administrative Agent a true
and correct copy of each State Street Custodial Agreement as in effect as
of the date of this Agreement. Each State Street Custodial Agreement is in
full force and effect and no default or event of default by any Account
Party exists thereunder.
(i) No written information, exhibit or report furnished by or on
behalf of any Loan Party to any Agent or any Bank in connection with the
negotiation and syndication of the Loan Documents or pursuant to the terms
41
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).
(j) Margin Stock will constitute less than 25% of the value of
those assets of any Account Party which are subject to any limitation on
sale, pledge or other disposition hereunder. None of the Collateral
constitutes or will constitute Margin Stock.
(k) 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 Account Party, 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.
(l) 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.
(m) Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
(n) Except to the extent that any and all events and conditions
under clauses (i) through (vi) below of this paragraph (n) 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
42
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.
(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
the request for any Letter of Credit to be issued 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.
(o) In the ordinary course of its business, each Account Party
reviews the effect of Environmental Laws on the operations and properties
of such Account Party 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
Account Party 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. 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
43
Material Adverse Effect; and there are no Environmental Actions pending or
threatened against any Loan Party or its Subsidiaries, and no circumstances
exist that could be reasonably likely to form the basis of any such
Environmental Action, which (in either case), individually or in the
aggregate with all other such pending or threatened actions and
circumstances, would reasonably be expected to have a Material Adverse
Effect.
(p) 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).
(q) Set forth on Schedule II hereto is a list of all letters of
credit that were issued under the Existing Reimbursement Agreement and that
are outstanding as of the Effective Date.
ARTICLE V
COVENANTS OF THE ACCOUNT PARTIES
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 Bank shall have any Letter
of Credit Participating Interest Commitment or commitment to issue a Letter
of Credit hereunder, each Account Party 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 Account Party 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
44
to maintenance of reinsurance or similar matters which shall be solely
within the reasonable business judgment of the Parent and its
Subsidiaries).
(d) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain, its
existence, legal structure, legal name, rights (charter and statutory),
permits, licenses, approvals, privileges and franchises; provided, however,
that the Parent and its Subsidiaries may consummate any merger or
consolidation permitted under Section 5.02(c) and provided further that
neither the Parent nor any of its Subsidiaries shall be required to
preserve any right, permit, license, approval, privilege or franchise if
the Board of Directors of the Parent or such Subsidiary shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Parent or such Subsidiary, as the case may be, and that the
loss thereof is not disadvantageous in any material respect to the Parent,
such Subsidiary or the Banks.
(e) Visitation Rights. At any reasonable time and from time to
time upon prior notice, permit the Administrative Agent (upon request made
by any Agent or any Bank), or any agents or representatives thereof, at the
expense (so long as no Default has occurred and is continuing) of such
Agent or such Bank, 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. Ensure that at all times the claims of the
Banks, the Issuing Bank and the Agents against it under the Loan Documents
will rank at least pari passu with the claims of all its other unsecured
and unsubordinated creditors, except for claims which are preferred by any
bankruptcy, insolvency, liquidation or other similar laws of general
application or are mandatorily preferred by law applying to insurance
companies generally.
(j) Additional Collateral. Comply with the provisions of this
Section regarding any new or additional Collateral. The Account Parties may
from time to time add Collateral to the State Street Custodial Accounts
without the necessity of executing or delivering any documents pursuant to
45
this Agreement (but subject to the provisions of Section 5.02(g)). The
Account Parties may from time to time pledge new or additional Collateral
contained in Custodial Accounts other than the State Street Custodial
Accounts by executing and delivering to the Administrative Agent either a
supplement to the Pledge and Security Agreement in the form attached
thereto (in the case of any new Custodial Account maintained with State
Street), or a new pledge and security agreement (in substantially the form
of the Pledge and Security Agreement) or other pledge agreement, security
agreement or charge (in the case of any new Custodial Account maintained
with another Custodian), in form and substance reasonably satisfactory to
the Administrative Agent, and by causing to be executed and delivered to
the Administrative Agent a control agreement or such other Security
Documents as the Administrative Agent shall reasonably require together
with such other documents, certificates and opinions (including opinions as
to the validity and perfection of the Administrative Agent's Lien on such
Collateral), in form and substance reasonably satisfactory to the
Administrative Agent, as the Administrative Agent may reasonably request in
connection therewith; and the applicable Account Parties will take such
other action as the Administrative Agent may reasonably request to create
in favor of the Administrative Agent a perfected security interest in and
Lien on the Collateral being pledged pursuant to the documents described
above.
(k) Custodial Account Statements. Cause to be delivered to the
Administrative Agent, promptly upon receipt after the end of each calendar
month, a monthly statement of each Custodial Account prepared by the
Custodian thereof, showing the assets credited to such account as of the
date of such statement.
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 Bank shall have any Letter of
Credit Participating Interest Commitment or commitment to issue a Letter of
Credit hereunder, each of the Account Parties will not, at any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any Lien on or with respect to any of its properties of any character
(including, without limitation, accounts) whether now owned or hereafter
acquired, or assign or permit any of its Subsidiaries to assign, any
accounts or other right to receive income, except:
(i) Permitted Liens;
(ii) Liens described on Schedule 5.02(a) hereto;
(iii) 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
46
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;
(iv) 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;
(v) (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;
(vi) 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;
(vii) 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;
(viii) Liens on cash and Approved Investments securing
Hedge Agreements arising in the ordinary course of business;
(ix) 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;
(x) 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;
(xi) 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 (including, without limitation, Liens
created by the Security Documents) 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;
47
(xii) 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;
(xiii) 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;
(xiv) 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;
(xv) judgment or judicial attachment Liens, provided that
the enforcement of such Liens is effectively stayed;
(xvi) Liens arising in connection with Securitization
Transactions; provided that the aggregate principal amount of the
investment or claim held at any time by all purchasers, assignees
or other transferees of (or of interests in) receivables and other
rights to payment in all Securitization Transactions (together
with the aggregate principal amount of any other obligations
secured by such Liens) shall not exceed U.S. $250,000,000;
(xvii) Liens arising in connection with certain equity
proceeds received on or about September 12, 2000 (plus interest
accrued thereon) placed in a segregated account in support of (or
pledged as collateral for) Parent's guaranty of the $412,372,000
principal amount of Auction Rate Reset Subordinated Notes Series A
issued by ACE INA to ACE RHINOS Trust on June 30, 1999;
(xviii) Liens on securities arising out of repurchase
agreements with a term of not more than three months entered into
with "Lenders" (as such term is defined in the Five Year Credit
Agreement) or their Affiliates or with securities dealers of
recognized standing; provided that the aggregate amount of all
assets of the Parent and its Subsidiaries subject to such
agreements shall not at any time exceed $800,000,000. For purposes
of this clause (xviii), "Five Year Credit Agreement" shall mean
the Second Amended and Restated Five Year Credit Agreement dated
as of April 5, 2002 among the Parent, ACE Bermuda, Tempest, ACE
INA Holdings Inc. and ACE Guaranty Re Inc., as borrowers, various
financial institutions, and JPMorgan Chase Bank, as administrative
agent, as amended, modified, supplemented or restated from time to
time; and
(xix) Liens securing up to an aggregate amount of
$200,000,000 of obligations of Tempest, the Parent or any wholly
owned Subsidiary, arising out of catastrophe bond financing.
Notwithstanding the foregoing provisions of this subsection (a) or
any other provision of this Agreement or any other Loan Document, in no
event shall any Account Party create, incur, assume or suffer to exist any
Lien on or with respect to the Collateral or any portion thereof other than
48
(w) the Liens created in favor of the Administrative Agent under the
Security Documents, (x) Liens described in clause (a) of the definition of
Permitted Liens, (y) Liens described in clause (xv) above, and (z) Liens in
favor of any Custodian pursuant to such Custodian's standard Custodial
Agreements securing payment of such Custodian's customary fees, commissions
and charges (the Liens described in clauses (w), (x), (y) and (z),
collectively, "Permitted Collateral Liens").
(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 amalgamate 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
amalgamate or consolidate with any other Subsidiary of the Parent,
provided that, in the case of any such merger, amalgamation or
consolidation, the Person formed by such merger, amalgamation or
consolidation shall be a wholly owned Subsidiary of the Parent,
provided further that, in the case of any such merger,
amalgamation or consolidation to which an Account Party is a
party, the Person formed by such merger, amalgamation or
consolidation shall be such Account Party;
(ii) any Subsidiary of any Account Party may merge into
or amalgamate or consolidate with any other Person or permit any
other Person to merge into or amalgamate or consolidate with it;
provided that the Person surviving such merger shall be a wholly
owned Subsidiary of the Account Party;
(iii) in connection with any sale or other disposition
permitted under Section 5.02(d), any Subsidiary of the Parent may
merge into or amalgamate or consolidate with any other Person or
permit any other Person to merge into or amalgamate or consolidate
with it; and
(iv) the Parent or any Account Party may merge into or
amalgamate or consolidate with any other Person; provided that, in
the case of any such merger, amalgamation or consolidation, the
Person formed by such merger, amalgamation or consolidation shall
be the Parent or such Account Party, 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 Account Party 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);
provided, however, that the provisions of Section 5.02(g) shall apply
independent of this Section 5.02(d).
(e) Restricted Payments. In the case of the Parent, 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,
49
obligations or securities to its stockholders, partners or members (or the
equivalent Persons thereof) as such or issue or sell any Equity Interests
or accept any capital contributions, or permit any of its Subsidiaries to
do any of the foregoing, or permit any of its Subsidiaries to purchase,
redeem, retire, defease or otherwise acquire for value any Equity Interests
in the Parent or to issue or sell any Equity Interests therein, except
that, so long as no Default shall have occurred and be continuing at the
time of any action described in clause (i) or (ii) below or would result
therefrom:
(i) the Parent may (A) declare and pay dividends and
distributions payable only in common stock of the Parent, (B)
issue and sell shares of its capital stock, (C) purchase, redeem,
retire, defease or otherwise acquire for value any of its Equity
Interests in an aggregate amount during the term of this Agreement
not exceeding $300,000,000 and (D) declare and pay cash dividends
to its stockholders,
(ii) (A) any Loan Party (other than the Parent) may
declare and pay cash dividends to another Loan Party and (B) any
Subsidiary of the Parent (other than any Loan Party) may (x)
declare and pay cash dividends to the Parent or any other wholly
owned Subsidiary of the Parent of which it is a Subsidiary and (y)
accept capital contributions from its parent, and
(iii) a Special Purpose Trust may issue Preferred
Securities and pay dividends thereon with the proceeds of payments
of interest on the Debentures.
(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.
(g) Collateral. Permit (i) the Letter of Credit Outstandings to
exceed the aggregate Collateral Value at any time or (ii) the average
rating (calculated on a weighted average basis) of the securities included
within the calculation of the aggregate Collateral Value to be less than
"A-" (with rating methodologies to be taken into account in the manner set
forth in Schedule III). The Account Parties may from time to time add
Collateral to or sell, deliver, transfer or otherwise withdraw Collateral
from any Custodial Account (including, without limitation, by trading of
securities), but only so long as (i) immediately after giving effect
thereto no Default or Event of Default would exist and (ii) with respect to
the addition or termination (or removal as Collateral) of Custodial
Accounts, the Account Parties comply with any applicable restrictions and
conditions set forth in the Security Documents.
(h) Custodial Agreements. Make or permit any amendment or
modification to any Custodial Agreement that is adverse in any material
respect to the interests of the Account Parties or the Banks.
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 Bank shall have
any Letter of Credit Participating Interest Commitment or commitment to
issue a Letter of Credit hereunder, the Parent will furnish to the Agents
and the Banks:
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(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 (or, if earlier, within five
Business Days after such date as the Parent is required to file
its annual report on Form 10-K for such Fiscal Year with the
Securities and Exchange Commission), 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
Banks, together with (i) a certificate of the Chief Financial
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 (which schedule shall include a
statement as to the ratio of the aggregate Collateral Value to the
Letter of Credit Outstandings as of the end of each calendar month
during the period covered by such financial statements, to the
extent not previously furnished to the Agents and the Banks).
(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
Banks of PricewaterhouseCoopers LLP or other independent public
accountants of recognized standing acceptable to the Required
Banks.
(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 (or, if earlier, within five Business Days after such date as
the Parent is required to file its quarterly report on Form 10-Q for such
fiscal quarter with the Securities and Exchange Commission), 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
51
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 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 (which schedule shall include a
statement as to the ratio of the aggregate Collateral Value to the Letter
of Credit Outstandings as of the end of each calendar month during the
period covered by such financial statements).
(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, 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, and (to the extent not
otherwise provided) copies of all certifications of the Parent's principal
executive officer and principal financial officer made pursuant to Section
302 or 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended.
(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.
(ii) Plan Annual Reports. Promptly upon request of any
Agent or any Bank, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) with respect
to each Pension Plan.
52
(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 any Bank, 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, the Registrar of Companies or the
Supervisor of Insurance 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 Account Party 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 the
Administrative Agent, or any Bank 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 Bank shall have
any Letter of Credit Participating Interest Commitment or commitment to
issue a Letter of Credit hereunder, the Parent will:
(a) Adjusted Consolidated Debt to Total Capitalization Ratio.
Maintain at all times a ratio of Adjusted Consolidated Debt to Total
Capitalization of not more than 0.35 to 1.0.
(b) Consolidated Net Worth. Maintain at all times Consolidated Net
Worth in an amount not less than the sum of (i) $3,600,000,000 plus (ii)
25% of Consolidated Net Income for each fiscal quarter of the Parent ending
on or after March 31, 2000 for which such Consolidated Net Income is
positive.
53
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 Account Party shall fail to pay any principal of any
Advance when the same shall become due and payable or (ii) any Account
Party 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 Account Party shall fail to perform or observe any term,
covenant or agreement contained in Section 2.10, 5.01(d) (with respect to
the Parent) or (e), 5.02 (other than 5.02(g)) 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 (1) in
the case of any covenant contained in Section 5.02(g), three Business 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 Bank, and (2) in all other cases, 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 Bank; or
(e) the Parent or any of its Significant Subsidiaries shall fail
to pay any Material Financial Obligation (but excluding Debt outstanding
hereunder) of the Parent or such Significant 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 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 of its Subsidiaries 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
54
for the benefit of creditors; or any proceeding shall be instituted by or
against any Loan Party or any of its Subsidiaries 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 of its Subsidiaries shall
take any corporate action to authorize any of the actions set forth above
in this subsection (f); or
(g) any 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 any Security Document shall for any reason (other
than pursuant to the terms thereof) cease to create in favor of the
Administrative Agent a valid and perfected first priority Lien on and
security interest in the Collateral purported to be covered thereby; or the
Administrative Agent shall cease for any reason to hold a perfected first
priority Lien on and security interest in the Collateral; 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 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; or
55
(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; or
(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; or
(n) any Custodial Agreement is amended or modified in any manner
that is inconsistent with the terms of the Loan Documents or that otherwise
could reasonably be expected to have a Material Adverse Effect, or is
terminated, or ceases to be in full force and effect or is declared by a
court of competent jurisdiction to be null and void, invalid or
unenforceable in any material respect, or any party thereto denies that it
has any further liability or obligation thereunder; or
(o) any Account Party shall (i) change its name, identity or
corporate structure, (ii) change its chief executive office from the
location thereof listed on Annex A to the Pledge and Security Agreement, or
(iii) change the jurisdiction of its incorporation or organization from the
jurisdiction listed on Annex A to the Pledge and Security Agreement
(whether by merger or otherwise), unless in each case such Account Party
has (1) given twenty (20) days' prior written notice to the Administrative
Agent of its intention to do so, together with information regarding any
such new location and such other information in connection with such
proposed action as the Administrative Agent may reasonably request, and (2)
delivered to the Administrative Agent ten (10) days prior to any such
change or removal such documents, instruments and financing statements as
may be required by the Administrative Agent, all in form and substance
satisfactory to the Administrative Agent, paid all necessary filing and
recording fees and taxes, and taken all other actions reasonably requested
by the Administrative Agent (including, at the request of the
Administrative Agent, delivery of opinions of counsel reasonably
satisfactory to the Administrative Agent to the effect that all such
actions have been taken), in order to perfect and maintain the Lien upon
and security interest in the Collateral provided for in the Pledge and
Security Agreement in accordance with the provisions of Section 3(c)
thereof; provided that an Event of Default under this subsection shall not
occur unless any failure of any Account Party to perform or observe any
provision of this subsection shall remain unremedied for 30 days after the
earlier of the date on which (y) a Responsible Officer becomes aware of
such failure or (z) written notice thereof shall have been given to such
Loan Party by any Agent or any Bank;
56
then, and in any such event, the Administrative Agent (i) shall at the
request, or may with the consent, of the Required Banks, by notice to the
Account Parties, declare the obligation 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 Banks, by notice to the Account Parties, declare all amounts
payable under this Agreement and the other Loan Documents to be forthwith
due and payable, whereupon 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 Account Parties,
and/or (iii) shall at the request, or may with the consent, of the Required
Banks, proceed to exercise the rights and remedies of the Administrative
Agent and the Banks under the Loan Documents and applicable law, including,
without limitation, by dating, delivering and acting upon Letters of
Instruction; provided, however, that in the event of an actual or deemed
entry of an order for relief with respect to any Account Party under the
Federal Bankruptcy Code, (x) the obligation of the Issuing Bank to issue
Letters of Credit shall automatically be terminated, (y) all such amounts
shall automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Account Parties and (z) the obligation of the
Account Parties to provide cash collateral under Section 6.02 shall
automatically become effective..
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 Banks, after
having taken any of the actions described in Section 6.01(ii) or otherwise,
make demand upon the Account Parties to, and forthwith upon such demand the
Account Parties will, pay to the Administrative Agent on behalf of the
Banks 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 Banks or that the total amount
of such funds is less than the aggregate Available Amount of all Letters of
Credit, the Account Parties 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 Banks, as applicable, to the extent permitted by
applicable law.
ARTICLE VII
THE GUARANTY
SECTION 7.01 The Guaranty.
(a) Subject to subsection (c) below, each Account Party hereby
jointly and severally, unconditionally, absolutely and irrevocably
guarantees the full and punctual payment (whether at stated maturity, upon
acceleration or otherwise) of all Obligations of each of the other Account
Parties under the Loan Documents including, without limitation, the
57
principal of and interest on reimbursement obligations owing by such other
Account Parties pursuant to this Agreement with respect to Letters of
Credit. Upon failure by an Account Party to pay punctually any such amount,
each other Account Party agrees to pay forthwith on demand the amount not
so paid at the place and in the manner specified in this Agreement. For the
avoidance of doubt, notwithstanding the limitations of subsection (c) below
as to the guarantee obligations of Tempest Life, all other Account Parties
at all times, including prior to the Tempest Life Effective Date, jointly
and severally, unconditionally, absolutely and irrevocably guarantee the
full and punctual payment (whether at stated maturity, upon acceleration or
otherwise) of all Obligations of Tempest Life.
(b) Each Account Party (other than the Parent), and by its
acceptance of this Guaranty, the Administrative Agent and each other Bank,
hereby confirms that it is the intention of all such Persons that this
Guaranty and the obligations of each Account Party 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 Account Party (other than the Parent)
hereunder. To effectuate the foregoing intention, the Administrative Agent,
the other Banks and the Account Parties hereby irrevocably agree that the
obligations of each Account Party (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 Account Party under this Guaranty not
constituting a fraudulent transfer or conveyance.
(c) Notwithstanding anything to the contrary in this Agreement,
the guarantee made by Tempest Life under this Article VII shall not be
effective until the date (the "Tempest Life Effective Date") on which
Tempest Life receives the necessary direction or exemption from the Bermuda
Supervisor of Insurance to the effect that any liability with respect to
its guaranty provided under this Article VII, until a claim or demand is
made or funds are drawn against, directly or indirectly, under this Article
VII, need not be recorded as a liability and thereby decrease its statutory
capital and surplus as determinable under the Insurance ▇▇▇ ▇▇▇▇ of Bermuda
and the related regulations. Upon the Tempest Life Effective Date,
automatically and without necessity of any acknowledgment or affirmation by
Tempest Life or any further action by any party, the guarantee made by
Tempest Life under this Article VII shall become effective and the
obligations of Tempest Life under this Article VII shall become Obligations
for all purposes of this Agreement and the other Loan Documents. The
Administrative Agent shall promptly notify the Banks of the date and
occurrence of the Tempest Life Effective Date.
SECTION 7.02 Guaranty Unconditional. The obligations of each Account
Party 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 (including with respect to any Collateral) in
respect of any obligation of any other obligor under any of the
Loan Documents, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to
any of the Loan Documents;
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(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 Bank or any other corporation or
person, whether in connection with any of the Loan Documents or
any unrelated transactions, provided that nothing herein shall
prevent the assertion of any such claim by separate suit or
compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or
against any other obligor for any reason of any of the Loan
Documents, or any provision of applicable law or regulation
purporting to prohibit the payment by any other obligor of
principal interest or any other amount payable under any of the
Loan Documents; or
(vii) any other act or omission to act or delay of any
kind by any obligor, the Administrative Agent, any Bank 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 an Account Party's
obligations under this Article VII.
SECTION 7.03 Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances. Each Account Party's obligations under this Article VII
shall remain in full force and effect until the commitments of the Banks
hereunder shall have terminated, no Letters of Credit shall be outstanding
and all amounts payable by the other Account Parties under the Loan
Documents shall have been paid in full. If at any time any payment of the
principal of or interest on any reimbursement obligation or any other
amount payable by an Account Party under the Loan Documents is rescinded or
must be otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of such Account Party or otherwise, each other Account
Party's obligations under this Article VII with respect to such payment
shall be reinstated as though such payment had been due but not made at
such time.
SECTION 7.04 Waiver by the Account Parties. Each Account Party
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 Account Party hereby
unconditionally and irrevocably agrees not to exercise any rights that it
may now have or hereafter acquire against any other Account Party, any
other Loan Party or any other insider guarantor that arise from the
existence, payment, performance or enforcement of such Account Party'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
59
Bank against any other Account Party, 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 Account
Party, 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, no Letters of Credit shall be outstanding and the commitments of
the Banks hereunder shall have expired or been terminated. If any amount
shall be paid to any Account Party 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
Expiration Date, such amount shall be received and held in trust for the
benefit of the Banks, shall be segregated from other property and funds of
such Account Party 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 Account
Party shall make payment to any Bank 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 Expiration Date shall have occurred,
the Banks will, at such Account Party's request and expense, execute and
deliver to such Account Party appropriate documents, without recourse and
without representation or warranty, necessary to evidence the transfer by
subrogation to such Account Party of an interest in the obligations
resulting from such payment made by such Account Party pursuant to this
Guaranty.
SECTION 7.06 Stay of Acceleration. If acceleration of the time for
payment of any amount payable by any Account Party under any of the Loan
Documents is stayed upon the insolvency, bankruptcy or reorganization of such
Account Party, all such amounts otherwise subject to acceleration under the
terms of this Agreement shall nonetheless be payable by the other Account
Parties under this Article VII forthwith on demand by the Administrative Agent
made at the request of the requisite proportion of the Banks.
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 Expiration Date, (b) be binding upon each Account Party,
its successors and assigns and (c) inure to the benefit of and be enforceable
by the Banks and their successors, transferees and assigns. Without
limiting the generality of clause (c) of the immediately preceding
sentence, any Bank may assign or otherwise transfer all or any portion of
its rights and obligations under this Agreement (including, without
limitation, all or any portion of its Letter of Credit Participating
Interest Commitment and the Advances owing to it) to any other Person, and
such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Bank herein or otherwise, in each case as
and to the extent provided in Section 9.07.
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ARTICLE VIII
THE AGENTS
SECTION 8.01 Authorization and Action. Each Bank (in its capacity as
a Bank) 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, no Agent shall be required to exercise any
discretion or take any action, but shall be required to act (in the case of
the Administrative Agent) or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of
the Required Banks or all the Banks where unanimity is required, and such
instructions shall be binding upon all Banks; 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.
The Administrative Agent agrees to give to each Bank prompt notice of each
notice given to it by any Account Party pursuant to the terms of this
Agreement.
SECTION 8.02 Agents' Reliance, Etc. Neither any Agent nor any of its
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 Bank and shall not
be responsible to any Bank 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 Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be
created under or in connection with, any Loan Document or any other
instrument or document furnished pursuant thereto; and (e) shall incur no
liability under or in respect of any Loan Document by acting upon any
notice, consent, certificate or other instrument or writing (which may be
by telegram or telecopy) reasonably believed by it to be genuine and signed
or sent by the proper party or parties.
SECTION 8.03 Wachovia and Affiliates. With respect to its LC
Commitment Amounts, and the Advances, Wachovia shall have the same rights and
powers under the Loan Documents as any other Bank and may exercise the same as
though it were not an Agent; and the term "Bank" or "Banks" shall, unless
otherwise expressly indicated, include Wachovia in its individual capacity.
Wachovia 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 Wachovia were not an Agent
and without any duty to account therefor to the Banks.
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SECTION 8.04 Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon any Agent or any other Bank 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 Bank also
acknowledges that it will, independently and without reliance upon any
Agent or any other Bank 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 Bank severally agrees to indemnify each Agent and its
officers, directors, employees, agents, advisors and Affiliates (to the
extent not promptly reimbursed by the Account Parties) from and against
such Bank'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 or any
such other Person 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 Bank 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 or other Person's gross negligence or willful misconduct. Without
limitation of the foregoing, each Bank 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 Account Parties under Section 9.04, to the extent that such Agent is
not promptly reimbursed for such costs and expenses by the Account Parties.
(b) For purposes of this Section 8.05, the Banks' 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 Banks, (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 LC Commitment
Amounts at such time. The failure of any Bank to reimburse any Agent
promptly upon demand for its ratable share of any amount required to be
paid by the Banks to such Agent as provided herein shall not relieve any
other Bank of its obligation hereunder to reimburse such Agent for its
ratable share of such amount, but no Bank shall be responsible for the
failure of any other Bank to reimburse such Agent for such other Bank's
ratable share of such amount. Without prejudice to the survival of any
other agreement of any Bank hereunder, the agreement and obligations of
each Bank contained in this Section 8.05 shall survive the payment in full
of principal, interest and all other amounts payable hereunder and under
the other Loan Documents.
SECTION 8.06 Successor Administrative Agent. Any Agent may resign at
any time by giving written notice thereof to the Banks and the Parent and may be
removed at any time with or without cause by the Required Banks. Upon any
such resignation or removal of the Administrative Agent, the Required Banks
shall have the right to appoint a successor Administrative 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 Administrative
Agent shall have been so appointed by the Required Banks, and shall have
62
accepted such appointment, within 30 days after the retiring Administrative
Agent's giving of notice of resignation or the Required Banks' removal of
the retiring Administrative Agent, then the retiring Administrative Agent
may, on behalf of the Banks, appoint a successor Administrative 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
Administrative Agent hereunder by a successor Administrative Agent such
successor Administrative Agent shall succeed to and become vested with all
the rights, powers, discretion, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative 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 Administrative
Agent's resignation or removal under this Section 8.06 no successor
Administrative Agent shall have been appointed and shall have accepted such
appointment, then on such 45th day (i) the retiring Administrative Agent's
resignation or removal shall become effective, (ii) the retiring
Administrative Agent shall thereupon be discharged from its duties and
obligations under the Loan Documents and (iii) the Required Banks shall
thereafter perform all duties of the retiring Administrative Agent under
the Loan Documents until such time, if any, as the Required Banks appoint a
successor Administrative 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. If Nova Scotia or Deutsche Bank ceases to be a Bank
hereunder, it shall be deemed to have resigned as Documentation Agent and
no replacement shall be appointed. If JPMorgan Chase or Bank of America
ceases to be a Bank hereunder, it shall be deemed to have resigned as
Syndication Agent and no replacement shall be appointed.
SECTION 8.07 Collateral Matters.
(a) The Administrative Agent is authorized on behalf of the Banks,
without the necessity of any further notice to or consent from any of the
Banks, from time to time to take any action with respect to any Collateral
or Security Document that may be necessary or as it may deem to be
appropriate to perfect, maintain and protect the security interests in and
Liens on the Collateral granted pursuant to the Security Documents.
(b) The Banks irrevocably authorize the Administrative Agent to
release any security interest in or Lien on the Collateral held by it
pursuant to the Security Documents (i) upon the termination of the Issuing
Bank's obligation to issue Letters of Credit hereunder, the payment in full
of the Obligations and the satisfaction and termination in full of all
other Letter of Credit Outstandings, (ii) that is sold or disposed of as
permitted hereunder or any other Loan Document or to which the requisite
number or percentage of Banks have consented or (iii) otherwise pursuant to
and in accordance with the provisions of any applicable Loan Document. Upon
request by the Administrative Agent at any time, the Banks will confirm in
writing the Administrative Agent's authority to release Collateral pursuant
to this subsection (b).
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ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Amendments, Etc. No amendment or waiver of any provision
of this Agreement 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 Issuing Bank and the Required Banks (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 Banks
(other than (A) any Bank that is, at such time, a Defaulting Bank, and (B)
in the case of clauses (vi) and (vii) below, any Bank which is not and will
not be (and is not and will not be owed any obligation which is or will be)
affected thereby), 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 Effective
Date, Section 3.02, (ii) change the number of Banks or the percentage of
(x) the LC Commitment Amounts, (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 Banks or any of
them to take any action hereunder, (iii) reduce or limit the obligations of
any Account Party under Section 7.01 or release such Account Party or
otherwise limit such Account Party's liability with respect to the
Obligations owing to the Agents and the Banks, (iv) amend this Section
9.01, (v) increase the LC Commitment Amounts of the Banks, extend the
Expiration Date or subject the Banks to any additional obligations, (vi)
reduce the principal of, or interest on, any reimbursement obligation or
any fees or other amounts payable hereunder, or increase any Bank's LC
Commitment Amount, (vii) postpone any date fixed for any payment of
principal of, or interest on, any reimbursement obligation or any fees or
other amounts payable hereunder, (viii) limit the liability of any Loan
Party under any of the Loan Documents, or (ix) release any of the
Collateral if such release would cause the aggregate Collateral Value to be
less than the Letter of Credit Outstandings; provided further that no
amendment, waiver or consent shall, unless in writing and signed by an
Agent in addition to the Banks required above to take such action, affect
the rights or duties of such Agent under this Agreement or the other Loan
Documents.
SECTION 9.02 Notices, Etc.
All notices and other communications provided for hereunder
shall be in writing (including telegraphic or telecopy communication) and
mailed, telegraphed, telecopied or delivered, if to any Account Party, at
its address set forth below on the signature pages hereof; if to any
Initial Bank, at its Domestic Lending Office specified opposite its name on
Part 2 of Schedule I hereto; if to any other Bank, at its Domestic Lending
Office specified in the Assignment and Acceptance pursuant to which it
became a Bank; if to Wachovia (in its capacity as Issuing Bank) at its
address at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, Mail Code NC-6034, ▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: International Operations -- Standby Letter of Credit
Department, Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇; and if to the Administrative
Agent, at its address at Charlotte Plaza Building CP-23, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attn: Syndication Agency
Services, Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇; 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 the Administrative
Agent pursuant to Article II, III or VIII shall not be effective until
received by the Administrative Agent. Manual delivery by telecopier of an
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executed counterpart of any amendment or waiver of any provision of this
Agreement 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 Bank
or any Agent to exercise, and no delay in exercising, any right hereunder 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) Each of the Account Parties agrees to pay on demand (i) all
reasonable costs and expenses of the Administrative Agent 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
Administrative Agent and a single counsel for the Issuing Bank with respect
thereto, with respect to advising the Administrative Agent 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 Bank in connection with the
enforcement of the Loan Documents (including, without limitation, in
connection with the sale of, collection from, or other realization upon,
the Collateral), whether in any action, suit or litigation, or any
bankruptcy, insolvency or other similar proceeding affecting creditors'
rights generally (including, without limitation, the reasonable fees and
expenses of counsel for the Administrative Agent, the Issuing Bank and each
Bank with respect thereto).
(b) Each of the Account Parties jointly and severally agrees to
indemnify and hold harmless each Agent, the Arranger, the Issuing Bank,
each Bank 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
65
contemplated thereby, 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 Account Parties also agrees not to assert any claim against any Agent,
the Arranger, any Bank 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) 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 Account Parties contained in Section 2.07 and this
Section 9.04 shall survive the payment in full of principal, interest and
all other amounts payable hereunder and under any of the other Loan
Documents.
SECTION 9.05 Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or
the granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare amounts owing hereunder to be due and
payable pursuant to the provisions of Section 6.01, each Agent and each
Bank 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 Bank or such Affiliate to or for the
credit or the account of any Account Party against any and all of the
Obligations of such Account Party now or hereafter existing under the Loan
Documents, irrespective of whether such Agent or such Bank shall have made
any demand under this Agreement and although such Obligations may be
unmatured. Each Agent and each Bank agrees promptly to notify each Account
Party 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 Bank 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 Bank and their respective Affiliates may have.
SECTION 9.06 Binding Effect. This Agreement shall become effective
when it shall have been executed by each Account Party, the Issuing Bank
and each Agent and the Administrative Agent shall have been notified by
each Initial Bank that such Initial Bank has executed it and thereafter
shall be binding upon and inure to the benefit of each Account Party, each
Agent, the Issuing Bank and each Bank and their respective successors and
assigns, except that no Account Party shall have the right to assign its
rights hereunder or any interest herein without the prior written consent
of the Banks.
SECTION 9.07 Assignments and Participations.
(a) Each Bank may, and so long as no Default shall have occurred
and be continuing, if demanded by any Account Party (following a demand by
such Bank pursuant to Section 2.12) upon at least five Business Days notice
66
to such Bank and the Administrative Agent, will, assign to one or more
Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its LC
Commitment Amount, its Letter of Credit Participating Interest Commitment
and the Letter of Credit Advances owing to it); provided, however, that (i)
each such assignment shall be of a uniform, and not a varying, percentage
of all rights and obligations of such Bank hereunder, except for any
non-pro rata assignment made by a Downgraded Bank after a request by the
Issuing Bank pursuant to Section 2.14 (and any subsequent non-pro rata
assignment of the interest so assigned or by the Downgraded Bank) and any
other non-pro rata assignment approved by the Administrative Agent and any
Account Party, (ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Bank or an Affiliate of any
Bank or an assignment of all of a Bank's rights and obligations under this
Agreement, the aggregate amount of the LC Commitment Amounts being assigned
to such Eligible Assignee pursuant to such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than $10,000,000 unless it is an assignment of
the entire amount of such assignor's LC Commitment Amount, (iii) each such
assignment shall be to an Eligible Assignee, (iv) each assignment made as a
result of a demand by any Account Party pursuant to Section 2.12 shall be
arranged by such Account Party after consultation with the Administrative
Agent and shall be either an assignment of all of the rights and
obligations of the assigning Bank under this Agreement or an assignment of
a portion of such rights and obligations made concurrently with another
such assignment or other such assignments that together cover all of the
rights and obligations of the assigning Bank under this Agreement, (v) no
Bank shall be obligated to make any such assignment as a result of a demand
by any Account Party pursuant to Section 2.12 unless and until such Bank
shall have received one or more payments from either such Account Party or
other Eligible Assignees in an aggregate amount at least equal to the
aggregate outstanding principal amount of the Advances made by such Bank,
together with accrued interest thereon to the date of payment of such
principal amount and all other amounts payable to such Bank under this
Agreement, (vi) as a result of such assignment, no Account Party shall be
subject to additional amounts under Section 2.06 or 2.08 and (vii) the
parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with a processing and recordation fee
of $2,500.00.
(b) Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in such Assignment and Acceptance,
(i) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Bank,
hereunder and (ii) the Bank assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights (other than its rights
under Sections 2.06, 2.08 and 9.04 to the extent any claim thereunder
relates to an event arising prior to such assignment and any other rights
that are expressly provided hereunder to survive) and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the remaining portion of an assigning Bank's
rights and obligations under this Agreement, such Bank shall cease to be a
party hereto).
67
(c) By executing and delivering an Assignment and Acceptance, each
Bank assignor thereunder and each assignee thereunder confirm to and agree
with each other and the other parties thereto and hereto as follows: (i)
other than as provided in such Assignment and Acceptance, such assigning
Bank makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with any Loan Document or the 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; (ii) such assigning Bank
makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any Loan Party or the performance or
observance by any Loan Party of any of its obligations under any Loan
Document or any other instrument or document furnished pursuant thereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section
4.01 and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment
and Acceptance; (iv) such assignee will, independently and without reliance
upon any Agent, such assigning Bank or any other Bank 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; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes each Agent to take
such action as agent on its behalf and to exercise such powers and
discretion under the 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; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations that by the
terms of this Agreement are required to be performed by it as a Bank.
(d) The Administrative Agent, acting for this purpose (but only
for this purpose) as the agent of the Account Parties, shall maintain at
its address referred to in Section 9.02 a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Banks and the LC Commitment
Amount of, and principal amount of the Advances owing to, each Bank from
time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Account Parties, the Agents and the Banks shall treat each Person whose
name is recorded in the Register as a Bank hereunder for all purposes of
this Agreement. The Register shall be available for inspection by any
Account Party or any Agent or any Bank at any reasonable time and from time
to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by
an assigning Bank and an assignee, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the
form of Exhibit A hereto, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give
prompt notice thereof to the Parent and to the parties to such Assignment
and Acceptance.
(f) Each Bank may sell participations to one or more Persons
(other than any Loan Party or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its LC Commitment Amount, its
Letter of Credit Participating Interest Commitment and the Advances owing
68
to it; provided, however, that (i) such Bank's obligations under this
Agreement (including, without limitation, its Letter of Credit
Participating Interest Commitment) shall remain unchanged, (ii) such Bank
shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the Account Parties, the Agents and
the other Banks shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement
and (iv) no participant under any such participation shall have any right
to approve any amendment or waiver of any provision of any Loan Document,
or any consent to any departure by any Loan Party therefrom, except to the
extent that such amendment, waiver or consent would reduce the principal
of, or interest on, reimbursement obligations or any fees or other amounts
payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the reimbursement obligations or any fees or other amounts
payable hereunder, in each case to the extent subject to such
participation. Each Bank shall, as agent of the Account Parties solely for
the purposes of this Section, record in book entries maintained by such
Bank, the name and amount of the participating interest of each Person
entitled to receive payments in respect of any participating interests sold
pursuant to this Section.
(g) Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 9.07, disclose to the assignee or participant or proposed assignee
or participant any information relating to any Account Party furnished to
such Bank by or on behalf of any Account Party; provided, however, that,
prior to any such disclosure, the assignee or participant or proposed
assignee or participant shall agree to preserve the confidentiality of any
Confidential Information received by it from such Bank.
(h) Notwithstanding any other provision set forth in this
Agreement, any Bank may at any time create a security interest in all or
any portion of its rights under this Agreement (including, without
limitation, the Advances owing to it) in favor of any Federal Reserve Bank
in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
SECTION 9.08 Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original
executed counterpart of this Agreement.
SECTION 9.09 No Liability of the Issuing Bank. Each Account Party
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
69
Letter of Credit; or (d) any other circumstances whatsoever in making or
failing to make payment under any Letter of Credit, except that such
Account Party shall have a claim against the Issuing Bank, and the Issuing
Bank shall be liable to such Account Party, to the extent of any direct,
but not consequential, damages suffered by such Account Party that such
Account Party 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 Bank shall
disclose any Confidential Information to any Person without the consent of the
Parent, other than (a) to such Agent's or such Bank's Affiliates and their
officers, directors, employees, agents and advisors and to actual or
prospective Eligible 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 Bank 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 Bank.
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 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.
70
SECTION 9.12 Governing Law. This Agreement 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 Account Parties,
the Agents and the Banks 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 Bank in the negotiation,
administration, performance or enforcement thereof.
SECTION 9.14 Disclosure of Information. Each Account Party agrees
and consents to the Administrative Agent's and the Arranger's disclosure of
information relating to this transaction to Gold Sheets and other similar
bank trade publications. Such information will consist of deal terms and
other information customarily found in such publications. The Parent shall
have the right to review and approve any such disclosure made by the
Administrative Agent or the Arranger before such disclosure is made (such
approval not to be unreasonably withheld).
[Remainder of page intentionally left blank]
71
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:
-----------------------------------------
Director
-----------------------------------------
Secretary
ACE BERMUDA INSURANCE LTD.
The Common Seal of ACE Bermuda Insurance Ltd.
was hereunto affixed in the presence of:
-----------------------------------------
Director
-----------------------------------------
Secretary
ACE TEMPEST LIFE REINSURANCE LTD.
The Common Seal of ACE Tempest Life Reinsurance
Ltd. was hereunto affixed in the presence of:
-----------------------------------------
Director
-----------------------------------------
Secretary
ACE TEMPEST REINSURANCE LTD.
The Common Seal of ACE Tempest Reinsurance Ltd.
was hereunto affixed in the presence of:
-----------------------------------------
Director
-----------------------------------------
Secretary
Address for each Account Party:
ACE Global Headquarters
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(signatures continued)
S-
WACHOVIA BANK, NATIONAL ASSOCIATION, as
Administrative Agent, as Issuing Bank and as an
Initial Bank
By:
-----------------------------------------
Title:
-----------------------------------------
JPMORGAN CHASE BANK, as Syndication Agent and as
an Initial Bank
By:
-----------------------------------------
Title:
-----------------------------------------
BANK OF AMERICA, N.A. as Syndication Agent and
as an Initial Bank
By:
-----------------------------------------
Title:
-----------------------------------------
THE BANK OF NOVA SCOTIA, as Documentation Agent
and as an Initial Bank
By:
-----------------------------------------
Title:
-----------------------------------------
DEUTSCHE BANK AG, NEW YORK BRANCH as Documentation
Agent and as an Initial Bank
By:
---------------------------------------
Title:
---------------------------------------
(signatures continued)
S-
NATIONAL AUSTRALIA BANK LIMITED, as an Initial
Bank
By:
-----------------------------------------
Title:
-----------------------------------------
FLEET NATIONAL BANK, as an Initial Bank
By:
-----------------------------------------
Title:
-----------------------------------------
ROYAL BANK OF CANADA, as an Initial Bank
By:
-----------------------------------------
Title:
-----------------------------------------
BARCLAYS BANK PLC, as an Initial Bank
By:
-----------------------------------------
Title:
-----------------------------------------
COMERICA BANK, as an Initial Bank
By:
-----------------------------------------
Title:
-----------------------------------------
(signatures continued)
S-
STATE STREET BANK AND TRUST COMPANY, as an Initial
Bank
By:
-----------------------------------------
Title:
-----------------------------------------
MELLON BANK, N.A., as an Initial Bank
By:
-----------------------------------------
Title:
-----------------------------------------
ABN AMRO BANK, N.V., as an Initial Bank
By:
-----------------------------------------
Title:
-----------------------------------------
HSBC BANK USA, as an Initial Bank
By:
-----------------------------------------
Title:
-----------------------------------------
BANK ONE, N.A., as an Initial Bank
By:
-----------------------------------------
Title:
-----------------------------------------
THE BANK OF NEW YORK, as an Initial Bank
By:
-----------------------------------------
Title:
-----------------------------------------
SCHEDULE I
LC COMMITMENT AMOUNTS
Wachovia Bank, National Association $30,000,000
JPMorgan Chase Bank 27,500,000
Bank of America, N.A. 27,500,000
The Bank of Nova Scotia 27,500,000
Deutsche Bank AG, New York Branch 27,500,000
National Australia Bank Limited 22,500,000
Fleet National Bank 22,500,000
Royal Bank of Canada 20,000,000
Barclays Bank PLC 20,000,000
Comercia Bank 20,000,000
State Street Bank and Trust Company 20,000,000
Mellon Bank, N.A. 17,000,000
ABN AMRO Bank, N.V. 17,000,000
HSBC Bank USA 17,000,000
Bank One, N.A. 17,000,000
The Bank of New York 17,000,000
Total $350,000,000.00
===============
SCHEDULE I - Part 2
DOMESTIC LENDING OFFICES
--------------------------------------------------------------------------------
Wachovia Bank, National Association Financial Institutions Group
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ 4819
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
JPMorgan Chase Bank Financial Institutions Group
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
Bank of America, N.A. ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
Bank of Nova Scotia ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
Deutsche Bank AG, New York Branch ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Mail Stop NYC01-2402
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
National Australia Bank Limited ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
Fleet National Bank ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Mail Stop CTEH40225C
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
Royal Bank of Canada ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy of notices to:
Royal Bank of Canada
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
Telecopy: ▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
Copies to:
Barclays ▇▇▇▇▇▇▇
▇▇▇, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
Attn: Graham Smart
Telephone: ▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
Telecopy: ▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
--------------------------------------------------------------------------------
Comerica Bank ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
State Street Bank and Trust Company Domestic Lending Office:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for notices:
Lafayette Corporate Center
▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, VP
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
Mellon Bank, N.A. One Mellon Center, Room 4401
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
ABN AMRO Bank, N.V. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Credit Administration
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
HSBC Bank USA ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
Bank One, N.A. 1 Bank ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
The Bank of New York Insurance Division
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇, VP
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
2
SCHEDULE II
EXISTING LETTERS OF CREDIT
[attached hereto]
SCHEDULE III
Methodology for Calculation of Collateral Values
In order to be included in the calculation of aggregate Collateral
Value (in addition to other requirements set forth in the Reimbursement
Agreement and this Schedule), investments shall satisfy each of the
criteria (including as to rating) under one of the categories listed below.
In addition, the following conditions shall apply:
1. No portion of the Collateral (other than U.S. Government
Securities) consisting of securities of a single issuer shall exceed 10% of
the Collateral Value at any time.
2. No security shall be included in the calculation of aggregate
Collateral Value unless it is listed on a national securities exchange or
freely tradeable at readily established prices in over-the-counter
transactions.
3. For purposes of this Schedule and each Collateral Value Report,
all maturities are calculated from the relevant date of determination of
the Collateral Value.
4. For purposes of calculating the average rating of the
Collateral included in the calculation of the aggregate Collateral Value,
(a) Moody's ratings shall be converted to their respective S&P equivalents
in accordance with established practice, and (b) commercial paper rated
"A2" shall be deemed to be rated "A."
--------------------------------------------------------------------------------
Category of Investment/Security Eligible Percentage
--------------------------------------------------------------------------------
Cash (denominated in U.S. Dollars) 100%
--------------------------------------------------------------------------------
Prime bank certificates of deposit issued by U.S. banks 95%
rated Aa3/AA- or better
--------------------------------------------------------------------------------
U.S. Government Securities 95% of Market
Maturity 2 years or less 90% of Market
Maturity over 2 years
--------------------------------------------------------------------------------
Investment-grade municipal bonds (Rating Aaa/AAA - 85% of Market
Baa3/BBB-) 80% of Market
Maturity 5 years or less
Maturity over 5 years
--------------------------------------------------------------------------------
Investment-grade corporate bonds (Rating Aa3/AA- or 90% of Market
better, non-convertible, NYSE-traded) 85% of Market
Maturity 2 years or less
Maturity over 2 years
--------------------------------------------------------------------------------
Investment-grade corporate bonds (Rating A1/A+ to 85% of Market
Baa3/BBB-, non-convertible, NYSE-traded) 80% of Market
Maturity 2 years or less
Maturity over 2 years
--------------------------------------------------------------------------------
Commercial paper (Rating A1-A2, P1-P2) 85% of Market
--------------------------------------------------------------------------------
SCHEDULE 4.01(B)
Subsidiaries
[attached hereto]
SCHEDULE 5.02(A)
Liens
[attached hereto]
EXHIBIT A
Form of Assignment and Acceptance
ASSIGNMENT AND ACCEPTANCE dated as of ____________, 20___ between
________________________ (the "Assignor") and ________________________ (the
"Assignee"), and [consented to and] accepted by Wachovia Bank, National
Association, as administrative agent (the "Administrative Agent")[, and ACE
Limited (the "Parent")].
W I T N E S S E T H
WHEREAS, this Assignment and Acceptance (the "Agreement") relates
to the Reimbursement Agreement dated as of September 30, 2002 among the
Parent and other Account Parties party thereto, the Assignor and the other
Banks party thereto, the Documentation Agents party thereto, the
Syndication Agents party thereto and the Administrative Agent (as amended
or otherwise modified from time to time, the "Reimbursement Agreement");
WHEREAS, as provided under the Reimbursement Agreement, the
Assignor has a commitment to participate in Letters of Credit and make
Letter of Credit Advances to the Account Parties in an aggregate principal
amount at any time outstanding not to exceed $_______________;
WHEREAS, Letters of Credit with a total amount available for
drawing thereunder of $_______________ are outstanding at the date hereof;
WHEREAS, Letter of Credit Advances made to the Account Parties by
the Assignor under the Reimbursement Agreement in the aggregate principal
amount of $___________ are outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of
the rights of the Assignor under the Reimbursement Agreement and the other
Loan Documents in respect of a portion of its LC Commitment Amount
thereunder in an amount equal to $____________ (the "Assigned Amount"),
together with a corresponding portion of its outstanding Letter of Credit
Participating Interest, Letter of Credit Participating Interest Commitment,
LC Participation Obligations, Letter of Credit Exposure, and Letter of
Credit Advances, if any, 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:
1. Definitions. All capitalized terms not otherwise defined herein
shall have the respective meanings set forth in the Reimbursement
Agreement.
2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Reimbursement
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 Reimbursement
Agreement to the extent of the Assigned Amount, including the outstanding
Letter of Credit Participating Interest Commitment and Letter of Credit
Exposure, and the amount of the Letter of Credit Advances, if any,
outstanding at the date hereof. Upon the execution and delivery hereof by
the Assignor, the Assignee[, the Administrative Agent and the Parent] 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 Bank under the
Reimbursement Agreement with an LC Commitment Amount (in addition to any LC
Commitment Amount theretofore held by it) equal to the Assigned Amount, and
(ii) the LC Commitment Amount of the Assignor shall, as of the date hereof,
be reduced by a like amount and the Assignor shall be released from its
obligations under the Reimbursement Agreement to the extent such
obligations have been assumed by the Assignee. The assignment provided for
herein shall be without recourse to the Assignor.
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 the amount heretofore agreed between them./1 It is
understood that commitment 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 Reimbursement 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.
4. [Consent of the Administrative Agent and the Parent. Pursuant
to the Reimbursement Agreement, this Agreement is conditioned upon the
consent of the Administrative Agent and, so long as no Default has occurred
and is continuing, the Parent. The execution of this Agreement by the
Administrative Agent and, if applicable, the Parent is evidence of this
consent.]
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 Account
Parties or any of their respective Subsidiaries, or the validity and
enforceability of the obligations of the Account Parties 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 Account Parties and their respective Subsidiaries.
---------------------
/1 Amount should combine the principal amount of any Letter of Credit
Advances made by the Assignor 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.
2
6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
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.
[Remainder of page intentionally left blank.]
3
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: ________________________________
WACHOVIA BANK, NATIONAL ASSOCIATION, as
Administrative Agent
By: ________________________________
Title: ________________________________]
4
EXHIBIT B
Form of Collateral Value Report
____________, 200_
Wachovia Bank, National Association,
as Administrative Agent
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇-▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Syndication Agency Services
Ladies and Gentlemen:
Reference is made to the Reimbursement Agreement dated as of September 30,
2002 among ACE Limited, ACE Bermuda Insurance Ltd., ACE Tempest Life
Reinsurance Ltd. and ACE Tempest Reinsurance Ltd., as Account Parties, the
Banks party thereto, and Wachovia Bank, National Association, as
Administrative Agent (as amended or otherwise modified from time to time,
the "Reimbursement Agreement"). Terms defined in the Reimbursement
Agreement are, unless otherwise defined herein or the context otherwise
requires, used herein as defined therein.
This Collateral Value Report is delivered pursuant to Section 2.17(b) of
the Reimbursement Agreement. The date of this Collateral Value Report is
_____________, 200__(the "Report Date"). Set forth below is the Collateral
Value of the Collateral and certain other information required by Section
2.17(b) of the Reimbursement Agreement as of ______________, 200__ (the
"Valuation Date"), calculated in accordance with the definition of
Collateral Value contained in the Reimbursement Agreement and the other
provisions of the Agreement (including Schedule III to the Reimbursement
Agreement):
----------------------------------------------------------------------------------------------------------
Amount/ Eligible
Type of Security Market Value Percenrtage Collateral Value
----------------------------------------------------------------------------------------------------------
Cash Denominated in U.S. Dollars 100%
----------------------------------------------------------------------------------------------------------
Prime bank certificates of deposit issued 95%
by U.S. banks rated Aa3/AA- or better
----------------------------------------------------------------------------------------------------------
U.S. Government and U.S. Government
Agency Obligations
Maturity 2 years or less 95% of Market
Maturity over 2 years 90% of Market
----------------------------------------------------------------------------------------------------------
Investment Grade Municipal Bonds
(Rating Aaa-Baa3)
Maturity 5 years or less 85% of Market
Maturity over 5 years 80% of Market
----------------------------------------------------------------------------------------------------------
Investment Grade Corporate Bonds (Rating
Aa3 or better, Non-convertible, NYSE)
Maturity 2 years or less 90% of Market
Maturity over 2 years 85% of Market
----------------------------------------------------------------------------------------------------------
Investment Grade Corporate Bonds (Rating
Baa3 to A1, Non-convertible, NYSE)
Maturity 2 years or less 85% of Market
Maturity over 2 years 80% of Market
----------------------------------------------------------------------------------------------------------
Commercial Paper (Rating A1-A2, P1-P2) 85% of Market
----------------------------------------------------------------------------------------------------------
Total $
----------------------------------------------------------------------------------------------------------
Outstanding Letters of Credit
------------------------------------------------------------------------------------------------------------
Unreimbursed
Beneficiary Date Undrawn Amount Drawings
------------------------------------------------------------------------------------------------------------
$ $
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Total $ $
------------------------------------------------------------------------------------------------------------
Ratio of Aggregate Collateral Value to Letter of Credit Outstandings: _________
The Parent certifies that the foregoing information correctly sets forth
the Collateral Value (in the aggregate and for each category of Collateral)
and the Letter of Credit Outstandings as of the Valuation Date, that the
Letter of Credit Outstandings do not exceed the aggregate Collateral Value
as of the Valuation Date, and that nothing has come to the attention of the
undersigned to cause the undersigned to believe that the Letter of Credit
Outstandings exceed the aggregate Collateral Value as of the Report Date.
ACE LIMITED
By: _______________________________
Name: _______________________________
Title: _______________________________
2
EXHIBIT D
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT, dated as of the 30th day of
September, 2002 (this "Agreement"), is made by ACE Limited, a Cayman
Islands company (the "Parent"), ACE Bermuda Insurance Ltd., a Bermuda
company ("ACE Bermuda"), ACE Tempest Life Reinsurance Ltd., a Bermuda
company ("Tempest Life"), and ACE Tempest Reinsurance Ltd., a Bermuda
company ("Tempest") (ACE Bermuda, Tempest Life and Tempest, together with
the Parent, the "Pledgors," and individually, a "Pledgor"), in favor of
WACHOVIA BANK, NATIONAL ASSOCIATION ("Wachovia"), as administrative agent
for the banks, financial institutions and other institutional lenders
(collectively, the "Banks") party to the Reimbursement Agreement referred
to below (in such capacity, the "Administrative Agent"), for the benefit of
the Secured Parties (as hereinafter defined). Capitalized terms used herein
without definition shall have the meanings given to them in the
Reimbursement Agreement referred to below.
RECITALS
A. The Pledgors, as Account Parties, the Banks, Wachovia, as Issuing
Bank, JPMorgan Chase Bank and Bank of America, N.A., as Syndication Agents,
The Bank of Nova Scotia and Deutsche Bank AG, New York Branch, as
Documentation Agents, and the Administrative Agent are parties to a
Reimbursement Agreement, dated as of September 30, 2002 (as amended, modified
or supplemented from time to time, the "Reimbursement Agreement"), providing
for the issuance of up to $350,000,000 in letters of credit for the account of
one or more of the Pledgors upon the terms and subject to the conditions set
forth therein.
B. Under Article VII of the Reimbursement Agreement, each of the Pledgors
has guaranteed the payment in full of the Obligations of the other Pledgors
under the Reimbursement Agreement and the other Loan Documents.
C. It is a condition to the extension of credit to the Pledgors under the
Reimbursement Agreement that the Pledgors shall have agreed, by executing and
delivering this Agreement, to secure the payment in full of the Obligations
under the Reimbursement Agreement and the other Loan Documents. The Secured
Parties are relying on this Agreement in their decision to extend credit to
the Pledgors under the Reimbursement Agreement, and would not enter into the
Reimbursement Agreement without the execution and delivery of this Agreement
by the Pledgors.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to induce the Secured Parties to enter into the Reimbursement
Agreement and to induce the Banks to extend credit to the Pledgors thereunder,
each Pledgor hereby agrees as follows:
1. Pledge and Grant of Security Interest. Each Pledgor hereby pledges,
assigns and delivers to the Administrative Agent, for the ratable benefit of
the Banks (including the Issuing Bank in its capacity as such) and the
Administrative Agent (collectively, the "Secured Parties"), and grants to the
Administrative Agent, for the ratable benefit of the Secured Parties, a Lien
upon and security interest in, all of such Pledgor's right, title and interest
in and to the following (collectively, the "Collateral"):
(i) The following accounts, each established by State Street Bank
and Trust Company ("State Street"), as Custodian for and in the name of
the applicable Pledgor listed below (such accounts, together with any
successor or replacement accounts and any new accounts added to the
Collateral pursuant to Section 4(d), and all sub-accounts created under
any of the foregoing, collectively, the "Accounts," and individually, an
"Account"; the Accounts designated as "Fund Accounts" below,
collectively, the "Fund Accounts," and individually, a "Fund Account";
and the Accounts designated as "DDA Accounts" below, collectively, the
"Deposit Accounts," and individually, a "Deposit Account"):
(A) ACE Limited Control Account Wachovia, Fund Account Number
____, DDA Account Number ________, each in the name of the Parent;
(B) ACE Bermuda Control Account Wachovia, Fund Account Number
____, DDA Account Number ________, each in the name of ACE Bermuda;
(C) ATLR Control Account Wachovia, Fund Account Number ____,
DDA Account Number ________, each in the name of Tempest Life; and
(D) ATR Bermuda Control Account Wachovia, Fund Account Number
____, DDA Account Number ________, each in the name of Tempest;
(ii) all securities, money, instruments and other assets now or at
any time hereafter held or contained in or credited to any of the
Accounts, including, without limitation, all bonds, debentures, stock and
other securities (whether certificated or uncertificated and whether in
registered, bearer or book-entry form), security entitlements, securities
accounts and other investment property and all promissory notes,
negotiable instruments, certificates of deposit, deposit accounts,
financial assets, cash and cash equivalents, together with all rights to
receive interest, income, dividends, distributions, returns of capital
and other amounts (whether in cash, securities, property, or a
combination thereof), and all additional stock, warrants, options,
securities, interests and other property, from time to time paid or
payable or distributed or distributable in respect of any of the
foregoing (but subject to the provisions of Section 5); all additions,
replacements, substitutions and exchanges to or for any of the foregoing;
and all other rights, powers, privileges, interests, claims and other
property in any manner arising out of or relating to any of the
foregoing, of whatever kind or character; together with all certificates,
instruments and entries upon the books of any Custodian or any other
securities intermediaries at any time evidencing any of the foregoing, in
each case whether now owned or existing or hereafter acquired or arising,
and including, without limitation, the securities and other assets listed
in the Account statements attached hereto as Exhibit A (the securities
2
and other assets described in this clause (ii), together with the
Accounts, collectively, the "Pledged Assets"); and
(iii) any and all proceeds (as defined in the Uniform Commercial
Code) of or from any and all of the foregoing and, to the extent not
otherwise included in the foregoing, (y) all payments under any insurance
(whether or not the Administrative Agent is the loss payee thereunder),
indemnity, warranty or guaranty with respect to any of the foregoing
Collateral and (z) all other amounts from time to time paid or payable
under or with respect to any of the foregoing Collateral (collectively,
"Proceeds"). For purposes of this Agreement, the term "Proceeds" includes
whatever is receivable or received when Collateral or Proceeds are sold,
exchanged, collected or otherwise disposed of, whether voluntarily or
involuntarily.
2. Security for Obligations. This Agreement and the Collateral secure the
full and prompt payment, at any time and from time to time as and when due
(whether at the stated maturity, by acceleration or otherwise), of all
Obligations of the Pledgors under the Reimbursement Agreement, this Agreement
(including all fees, costs and expenses payable by the Pledgors under Section
9) and the other Loan Documents, whether now existing or hereafter incurred,
created or arising and whether direct or indirect, absolute or contingent, due
or to become due (including obligations of performance), and including all
such Obligations that, but for the operation of the automatic stay under
Section 362(a) of the federal Bankruptcy Code (Title 11, U.S. Code), would
become due. Notwithstanding the foregoing or anything to the contrary
contained herein, until the Tempest Life Effective Date, (i) the Obligations
secured by any Collateral pledged hereunder by Tempest Life shall not include
any Obligations of Tempest Life under Article VII of the Reimbursement
Agreement (such Obligations, the "Guaranty Obligations"), and (ii) any
Collateral pledged hereunder by Tempest Life shall secure only the Obligations
of Tempest Life (excluding the Guaranty Obligations) and shall not secure any
Obligations of any other Pledgor. Upon the Tempest Life Effective Date,
automatically and without necessity of any acknowledgment or affirmation by
Tempest Life or any further action by any party, the Guaranty Obligations
shall be deemed to be Obligations of Tempest Life secured by the Collateral
hereunder and all Collateral pledged by Tempest Life hereunder (whether before
or after the Tempest Life Effective Date) shall be deemed to secure all of the
Obligations of the Pledgors (including, without limitation, the Guaranty
Obligations).
3. Representations and Warranties. Each Pledgor represents and warrants
as follows:
(a) Attached hereto as Exhibit A are true and correct copies of Account
statements indicating the contents of the Accounts as of the date shown
thereon. As of the date hereof, there have not been any withdrawals or
deliveries from, additions to, or trades within the Accounts other than as
separately communicated in writing to the Administrative Agent (other than the
crediting of interest and dividends).
(b) Each Pledgor owns the Accounts established in its name as set
forth herein, and all other Collateral purported to be pledged by it
hereunder, in each case free and clear of any Liens except for Permitted
Collateral Liens. No security agreement, financing statement or other
public notice with respect to all or any part of the Collateral is on file
or of record in any government or public office, and no Pledgor has filed
3
or consented to the filing of any such statement or notice, except Uniform
Commercial Code financing statements naming the Administrative Agent as
secured party.
(c) With respect to each Account and the Pledged Assets held or contained
therein or credited thereto, this Agreement, together with (i) the execution
by State Street (or any other applicable Custodian) of a control agreement
with respect to each such Account in substantially the form of Exhibit B
hereto or otherwise satisfying the applicable requirements of Section 8-106 of
the Uniform Commercial Code (each, a "Control Agreement") and (ii) to the
extent the laws of Bermuda are applicable, the registration of the charge
created by this Agreement with the Bermuda Registrar of Companies on Form 9
pursuant to Section 55 of the Companies ▇▇▇ ▇▇▇▇, creates, and at all times
shall constitute, a valid and perfected security interest in and Lien upon the
Collateral owned by such Pledgor in favor of the Administrative Agent, for the
benefit of the Secured Parties, superior and prior to the rights of all other
Persons therein (except for Permitted Collateral Liens), and no other or
additional filings, registrations, recordings or actions are or shall be
necessary or appropriate in order to maintain the perfection and priority of
such Lien and security interest.
4. Certain Covenants.
(a) All securities and other property held or contained in or credited to
an Account (other than cash) shall be registered in the name of the Custodian
of such Account in a manner sufficient to create a security entitlement in
favor of the applicable Pledgor against such Custodian with respect to such
securities or other property. In no event shall any such securities or other
property be registered in the name of, payable to, or endorsed in favor of,
any Pledgor, except to extent the same has been specially endorsed in favor of
the applicable Custodian. All cash held or contained in or credited to an
Account shall be held or contained in or credited to (as the case may be) a
Deposit Account and shall not be held or contained in or credited to any Fund
Account. In the event that any Pledgor desires to include, as part of the
Collateral, any "Bank Loans" (as defined in the form of Control Agreement
attached hereto as Exhibit B) or any other property or interest (other than
cash) not treated as a "financial asset" within the meaning of Section
8-102(9) of the Uniform Commercial Code or otherwise not constituting a
financial asset pursuant to the applicable Control Agreement, the Pledgor will
cause such Bank Loans or other property or interest to be held in or credited
to a separate Custodial Account from the other Collateral and shall ensure
that such account is added as an "Account" under this Agreement pursuant to
Section 4(d).
(b) [Reserved.]
(c) No Pledgor will sell, transfer or otherwise dispose of, grant any
option with respect to, or mortgage, pledge, grant any Lien with respect to or
otherwise encumber (other than Permitted Collateral Liens), any of the
Collateral or any interest therein, or terminate any Account or Custodial
Agreement with respect to any Account, except as may be otherwise expressly
permitted in accordance with the terms of this Agreement and the Reimbursement
Agreement. No Pledgor will purchase any securities on margin using any of the
Collateral as collateral.
4
(d) Any Pledgor may add a new Custodial Account as an "Account" under
this Agreement, and/or terminate an Account or remove an Account as Collateral
hereunder, in each case by executing and delivering to the Administrative
Agent a completed supplement to this Agreement in the form of Exhibit C (each,
a "Pledge Supplement"); provided that (i) prior to or concurrently with the
addition of any new Account, the applicable Pledgor shall deliver or cause to
be delivered to the Administrative Agent a true and correct copy of a
statement of such Account prepared by the Custodian thereof, indicating the
contents of such Account as of a recent date, a new Control Agreement (or
supplement to an existing Control Agreement) executed by the Custodian and the
Pledgor, evidencing the establishment of such Account and the perfection of
the security interest of the Administrative Agent therein, and (if applicable)
a copy of any new Custodial Agreement with respect to such Account, and (ii)
no Pledgor may terminate an Account or remove an Account as Collateral
hereunder unless, immediately after giving effect thereto, (A) the aggregate
Collateral Value (with respect to all remaining Accounts and all other
Collateral pledged pursuant to any Loan Document) would equal or exceed the
Letter of Credit Outstandings and (B) no other Default or Event of Default
would exist. Each Pledgor hereby authorizes the Administrative Agent to attach
each such Pledge Supplement to this Agreement, and agrees that all Collateral
listed or referred to on any Pledge Supplement shall for all purposes be
deemed Collateral hereunder and shall be subject to the provisions hereof.
(e) In the event any Custodian gives notice of termination of any Control
Agreement, the applicable Pledgors shall have the right to appoint a successor
Custodian, which shall be a commercial bank or trust company organized under
the laws of the United States or of any State thereof and having a combined
capital and surplus of at least $1,000,000,000, and which appointment shall be
subject to the consent of the Administrative Agent (which consent shall not be
unreasonably withheld); provided that prior to the effective date of such
termination (i) each applicable Pledgor shall have entered into a custodial
agreement with the successor Custodian in form and substance reasonably
satisfactory to the Administrative Agent, (ii) the retiring Custodian shall
have transferred the financial assets and other property (including cash)
contained in each applicable Account to the successor Custodian, and (iii) the
successor Custodian and each applicable Pledgor shall have entered into a
Control Agreement with the Administrative Agent in form and substance
reasonably satisfactory to the Administrative Agent and the applicable
Pledgors shall have executed and delivered or caused to be delivered all such
other documents, opinions and instruments, and taken all such other action,
reasonably requested by the Administrative Agent in order to perfect the
Administrative Agent's security interest in the affected Collateral. If no
successor Custodian shall have been so appointed by the Pledgors, and shall
have accepted such appointment, prior to the effective date of termination of
the applicable Control Agreement, then the Administrative Agent may, on behalf
of the Pledgors, appoint a successor Custodian from among the Banks or
otherwise or may direct the retiring Custodian to transfer the financial
assets and other property (including cash) contained in each applicable
Account to the Administrative Agent, to be held by the Administrative Agent as
Collateral for the benefit of the Secured Parties.
(f) Each Pledgor agrees that it will, at its own cost and expense, take
any and all actions necessary to warrant and defend the right, title and
interest of the Secured Parties in and to the Collateral against the claims
and demands of all other Persons.
5
5. Voting Rights; Dividends and other Distributions. So long as no Event
of Default shall have occurred and be continuing (or would occur as a result
thereof), (i) each Pledgor shall be entitled (as against the Administrative
Agent and subject to the terms of any custodial or other agreements with any
Custodian) to exercise all voting and other consensual rights pertaining to
its Pledged Assets, and (ii) all interest, income, dividends, distributions
and other amounts payable in cash in respect of the Pledged Assets may be paid
to the applicable Custodian and retained in the Accounts for the benefit of
the Pledgors, as applicable, or distributed to the Pledgors, as applicable;
provided, however, that all such interest, income, dividends, distributions
and other amounts shall, at all times after the occurrence and during the
continuance of an Event of Default and upon notice from the Administrative
Agent to the applicable Custodian, be paid to the Administrative Agent and
retained by it as part of the Collateral (except to the extent applied upon
receipt to the repayment of the Obligations). All interest, income, dividends,
distributions or other amounts that are received by any Pledgor in violation
of the provisions of this Section shall be received in trust for the benefit
of the Administrative Agent, shall be segregated from other property or funds
of such Pledgor and shall be forthwith delivered to the Administrative Agent
as Collateral in the same form as so received (with any necessary
endorsements). For purposes of the foregoing provisions of this Section and to
the extent applicable thereto, each Pledgor hereby waives the requirement of
Sections 9-207(c)(1) and (c)(2) of the Uniform Commercial Code that the
Administrative Agent apply any money or funds received from the Collateral to
reduce the Obligations.
6. Remedies. If an Event of Default shall have occurred and be
continuing, the Administrative Agent shall be entitled to exercise in respect
of the Collateral all of its rights, powers and remedies provided for herein
or otherwise available to it under any other Loan Document, by law, in equity
or otherwise, including all rights and remedies of a secured party under the
Uniform Commercial Code, and shall be entitled in particular, but without
limitation of the foregoing, to exercise the following rights, which each
Pledgor agrees to be commercially reasonable:
(a) To notify each Custodian of the Event of Default and to direct each
Custodian immediately to cease complying with entitlement orders or other
directions concerning the Account originated by or on behalf of any Pledgor
and to cease distributing interest and dividends on property in the Accounts
to or for the benefit of the Pledgors, and thereafter to comply with
entitlement orders and other directions concerning the Accounts originated by
the Administrative Agent;
(b) To notify the parties obligated on any of the Collateral of the
security interest in favor of the Administrative Agent created hereby and to
direct all such Persons to make payments of all amounts due thereon or
thereunder directly to the Administrative Agent or to an account designated by
the Administrative Agent; and in such instance and from and after such notice,
all amounts and Proceeds (including wire transfers, checks and other
instruments) received by any Pledgor in respect of any Collateral shall be
received in trust for the benefit of the Administrative Agent hereunder, shall
be segregated from the other funds of such Pledgor and shall be forthwith
deposited into such account or paid over or delivered to the Administrative
Agent in the same form as so received (with any necessary endorsements or
assignments), to be held as Collateral and applied to the Obligations as
provided herein;
6
(c) To direct each Custodian to transfer to or register in the name of
the Administrative Agent or the name of any of its agents or nominees all or
any part of the Collateral, without notice to any Pledgor and with or without
disclosing that such Collateral is subject to the security interest created
hereunder;
(d) To exercise all voting, consensual and other rights and powers
pertaining to the Pledged Assets (whether or not transferred into the name of
the Administrative Agent), at any meeting of shareholders, partners, members
or otherwise, and any and all rights of conversion, exchange or subscription
and any other rights, privileges or options pertaining to the Pledged Assets
as if it were the absolute owner thereof, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Assets with any
committee, depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as the Administrative Agent may determine, and
give all consents, waivers and ratifications in respect of the Pledged Assets,
all without liability except to account for any property actually received by
it, but the Administrative Agent shall have no duty to exercise any such
right, privilege or option or give any such consent, waiver or ratification
and shall not be responsible for any failure to do so or delay in so doing;
and for the foregoing purposes each Pledgor will promptly execute and deliver
or cause to be executed and delivered to the Administrative Agent, upon
request, all such proxies and other instruments as the Administrative Agent
may reasonably request to enable the Administrative Agent to exercise such
rights and powers; and in furtherance of the foregoing and without limitation
thereof, each Pledgor hereby irrevocably constitutes and appoints the
Administrative Agent as the true and lawful proxy and attorney-in-fact of such
Pledgor, with full power of substitution in the premises, to exercise all such
voting, consensual and other rights and powers to which any holder of any
Pledged Assets would be entitled by virtue of holding the same, which proxy
and power of attorney, being coupled with an interest, is irrevocable and
shall be effective for so long as this Agreement shall be in effect; and
(e) To sell, resell, assign and deliver, and to direct each Custodian to
sell, resell, assign and deliver, in the sole discretion of the Administrative
Agent, all or any of the Collateral, in one or more parcels, on any securities
exchange on which any Pledged Assets may be listed, at public or private sale,
at any of the Administrative Agent's offices or elsewhere, for cash, upon
credit or for future delivery, at such time or times and at such price or
prices and upon such other terms as the Administrative Agent may deem
satisfactory. If any of the Collateral is sold upon credit or for future
delivery, the Administrative Agent shall not be liable for the failure of the
purchaser to purchase or pay for the same and, in the event of any such
failure, the Administrative Agent may resell or direct the resale of such
Collateral. In no event shall any Pledgor be credited with any part of the
Proceeds of sale of any Collateral until and to the extent cash payment in
respect thereof has actually been received by the Administrative Agent. Each
purchaser at any such sale shall hold the property sold absolutely, free from
any claim or right of whatsoever kind, including any equity or right of
redemption of any Pledgor, and each Pledgor hereby expressly waives all rights
of redemption, stay or appraisal, and all rights to require the Administrative
Agent to marshal any assets in favor of such Pledgor or any other party or
against or in payment of any or all of the Obligations, that it has or may
have under any rule of law or statute now existing or hereafter adopted. No
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law, as referred to below), all of which are hereby
expressly waived by each Pledgor, shall be required in connection with any
sale or other disposition of any part of the Collateral. If any notice of a
7
proposed sale or other disposition of any part of the Collateral shall be
required under applicable law, the Administrative Agent shall give the
applicable Pledgor at least ten (10) days' prior notice of the time and place
of any public sale and of the time after which any private sale or other
disposition is to be made, which notice each Pledgor agrees is commercially
reasonable. The Administrative Agent shall not be obligated to make any sale
of Collateral if it shall determine not to do so, regardless of the fact that
notice of sale may have been given. The Administrative Agent may, without
notice or publication, adjourn any public or private sale or cause the same to
be adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. Upon each public sale and, to the extent
permitted by applicable law, upon each private sale, the Administrative Agent
may purchase all or any of the Collateral being sold, free from any equity,
right of redemption or other claim or demand, and may make payment therefor by
endorsement and application (without recourse) of the Obligations in lieu of
cash as a credit on account of the purchase price for such Collateral.
7. Application of Proceeds.
(a) All Proceeds collected by the Administrative Agent upon any sale or
other disposition of or realization upon any of the Collateral, together with
all other moneys received by the Administrative Agent hereunder, shall be
applied as follows:
(i) first, to the payment of all costs and expenses of such sale,
disposition or other realization, including the reasonable costs and
expenses of the Administrative Agent and the reasonable fees and expenses
of its agents and counsel, all amounts advanced by the Administrative
Agent for the account of any Pledgor, and all other amounts payable to
the Administrative Agent under Section 9;
(ii) second, after payment in full of the amounts specified in
clause (i) above, to the ratable payment of all other Obligations owing
to the Secured Parties; and
(iii) third, after payment in full of the amounts specified in
clauses (i) and (ii) above, and following the termination of this
Agreement, to the Pledgors or any other Person lawfully entitled to
receive such surplus.
(b) Each Pledgor shall remain liable to the extent of any deficiency
between the amount of all Proceeds realized upon sale or other disposition of
the Collateral pursuant to this Agreement and the aggregate amount of the sums
referred to in clauses (i) and (ii) of subsection (a) above. Upon any sale of
any Collateral hereunder by the Administrative Agent (whether by virtue of the
power of sale herein granted, pursuant to judicial proceeding, or otherwise),
the receipt of the Administrative Agent or the officer making the sale shall
be a sufficient discharge to the purchaser or purchasers of the Collateral so
sold, and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Administrative
Agent or such officer or be answerable in any way for the misapplication
thereof.
(c) Upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent shall have the right to cause to be
8
established and maintained, at its principal office or such other location or
locations as it may establish from time to time in its discretion, one or more
accounts (collectively, "Collateral Accounts") for the collection of cash
Proceeds of the Collateral. Such Proceeds, when deposited, shall continue to
constitute Collateral for the Obligations and shall not constitute payment
thereof until applied as herein provided. The Administrative Agent shall have
sole dominion and control over all funds deposited in any Collateral Account,
and such funds may be withdrawn therefrom only by the Administrative Agent.
Upon the occurrence and during the continuance of an Event of Default, the
Administrative Agent shall have the right to (and, if directed by the Required
Banks pursuant to the Reimbursement Agreement, shall) apply amounts held in
the Collateral Accounts in payment of the Obligations in the manner provided
for in subsection (a) above.
8. Private Sales. Each Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as amended (the
"Securities Act"), and applicable state securities laws as in effect from time
to time, the Administrative Agent may be compelled, with respect to any sale
of all or any part of the Pledged Assets conducted without registration or
qualification under the Securities Act and such state securities laws, to
limit purchasers to any one or more Persons who will represent and agree,
among other things, to acquire such Pledged Assets for their own account, for
investment and not with a view to the distribution or resale thereof. Each
Pledgor acknowledges that any such private sales may be made in such manner
and under such circumstances as the Administrative Agent may deem necessary or
advisable in its sole and absolute discretion, including at prices and on
terms less favorable than those obtainable through a public sale without such
restrictions (including, without limitation, a public offering made pursuant
to a registration statement under the Securities Act), and, notwithstanding
such circumstances, agrees that any such private sale shall be deemed to have
been made in a commercially reasonable manner and agrees that the
Administrative Agent shall have no obligation to conduct any public sales and
no obligation to delay the sale of any Pledged Assets for the period of time
necessary to permit its registration for public sale under the Securities Act
and applicable state securities laws, and shall not have any responsibility or
liability as a result of its election so not to conduct any such public sales
or delay the sale of any Pledged Assets, notwithstanding the possibility that
a substantially higher price might be realized if the sale were deferred until
after such registration. Each Pledgor hereby waives any claims against the
Administrative Agent or any other Secured Party arising by reason of the fact
that the price at which any Pledged Assets may have been sold at any private
sale was less than the price that might have been obtained at a public sale or
was less than the aggregate amount of the Obligations, even if the
Administrative Agent accepts the first offer received and does not offer such
Pledged Assets to more than one offeree.
9. Indemnity and Expenses. The Pledgors agree jointly and
severally:
(a) To indemnify and hold harmless the Administrative Agent, each other
Secured Party and each of their respective directors, officers, employees,
agents and affiliates from and against any and all claims, damages, demands,
losses, obligations, judgments and liabilities (including, without limitation,
reasonable attorneys' fees and expenses) in any way arising out of or in
connection with this Agreement and the transactions contemplated hereby,
except to the extent the same shall arise as a result of the gross negligence
or willful misconduct of the party seeking to be indemnified; and
9
(b) To pay and reimburse the Administrative Agent upon demand for all
reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) that the Administrative Agent may incur in
connection with (i) the custody, use or preservation of, or the sale of,
collection from or other realization upon, any of the Collateral, including
the reasonable expenses of re-taking, holding, preparing for sale or lease,
selling or otherwise disposing of or realizing on the Collateral, (ii) the
exercise or enforcement of any rights or remedies granted hereunder
(including, without limitation, under Sections 6 and 8), under any of the
other Loan Documents or otherwise available to it (whether at law, in equity
or otherwise), or (iii) the failure by any Pledgor to perform or observe any
of the provisions hereof. The provisions of this Section shall survive the
occurrence of the Termination Requirements (as hereinafter defined).
10. The Administrative Agent; Standard of Care. The Administrative Agent
will hold all items of the Collateral at any time received under this
Agreement in accordance with the provisions hereof. The obligations of the
Administrative Agent as holder of the Collateral and interests therein and
with respect to the disposition thereof, and otherwise under this Agreement
and the other Loan Documents, are only those expressly set forth in this
Agreement and the other Loan Documents. The Administrative Agent shall act
hereunder at the direction, or with the consent, of the Required Banks on the
terms and conditions set forth in the Reimbursement Agreement. The powers
conferred on the Administrative Agent hereunder are solely to protect its
interest, on behalf of the Secured Parties, in the Collateral, and shall not
impose any duty upon it to exercise any such powers. Except for treatment of
the Collateral in its possession in a manner substantially equivalent to that
which the Administrative Agent, in its individual capacity, accords its own
property of a similar nature, and the accounting for moneys actually received
by it hereunder, the Administrative Agent shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to the Collateral.
Neither the Administrative Agent nor any other Secured Party shall be liable
to any Pledgor (i) for any loss or damage sustained by such Pledgor, or (ii)
for any loss, damage, depreciation or other diminution in the value of any of
the Collateral that may occur as a result of or in connection with or that is
in any way related to any exercise by the Administrative Agent or any other
Secured Party of any right or remedy under this Agreement, any failure to
demand, collect or realize upon any of the Collateral or any delay in doing
so, or any other act or failure to act on the part of the Administrative Agent
or any other Secured Party, except to the extent that the same is caused by
its own gross negligence or willful misconduct.
11. Further Assurances; Attorney-in-Fact.
(a) Each Pledgor agrees that it will join with the Administrative Agent
to execute and, at its own expense, file and refile under the Uniform
Commercial Code such financing statements, continuation statements and other
documents and instruments in such offices as the Administrative Agent may
reasonably deem necessary or appropriate, and wherever required or permitted
by law, in order to perfect and preserve the Administrative Agent's security
interest in the Collateral, and hereby authorizes the Administrative Agent to
file financing statements and amendments thereto relating to all or any part
of the Collateral without the signature of such Pledgor where permitted by
law, and agrees to do such further acts and things and to execute and deliver
to the Administrative Agent such additional conveyances, assignments,
agreements (including control agreements) and instruments as the
Administrative Agent may reasonably require or deem advisable to perfect,
10
establish, confirm and maintain the security interest and Lien provided for
herein, to carry out the purposes of this Agreement or to further assure and
confirm unto the Administrative Agent its rights, powers and remedies
hereunder.
(b) Each Pledgor hereby irrevocably appoints the Administrative Agent its
lawful attorney-in-fact, with full authority in the place and stead of such
Pledgor and in the name of such Pledgor, the Administrative Agent or
otherwise, and with full power of substitution in the premises (which power of
attorney, being coupled with an interest, is irrevocable for so long as this
Agreement shall be in effect), from time to time in the Administrative Agent's
discretion after the occurrence and during the continuance of an Event of
Default (except for the actions described in clause (i) below, which may be
taken by the Administrative Agent without regard to whether an Event of
Default has occurred) to take any action and to execute any instruments that
the Administrative Agent may deem necessary or advisable to accomplish the
purpose of this Agreement, including, without limitation:
(i) to sign the name of such Pledgor on any financing statement,
continuation statement, notice or other similar document that, in the
Administrative Agent's opinion, should be made or filed in order to
perfect or continue perfected the security interest granted under this
Agreement;
(ii) to ask, demand, collect, ▇▇▇ for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(iii) to receive, endorse and collect any checks, drafts,
instruments, chattel paper and other orders for the payment of money made
payable to such Pledgor representing any interest, income, dividend,
distribution or other amount payable in respect of any of the Collateral
and to give full discharge for the same;
(iv) to file any claims or take any action or institute any
proceedings that the Administrative Agent may deem necessary or advisable
for the collection of any of the Collateral or otherwise to enforce the
rights of the Administrative Agent with respect to any of the Collateral;
and
(v) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with any and all of the Collateral as fully
and completely as though the Administrative Agent were the absolute owner
of the Collateral for all purposes, and to do from time to time, at the
Administrative Agent's option and the Pledgors' expense, all other acts
and things reasonably deemed necessary by the Administrative Agent to
protect, preserve or realize upon the Collateral and to more completely
carry out the purposes of this Agreement.
(c) If any Pledgor fails to perform any covenant or agreement contained
in this Agreement after written request to do so by the Administrative Agent
(provided that no such request shall be necessary at any time after the
occurrence and during the continuance of an Event of Default), the
Administrative Agent may itself perform, or cause the performance of, such
covenant or agreement and may take any other action that it deems necessary
11
and appropriate for the maintenance and preservation of the Collateral or its
security interest therein, and the reasonable expenses so incurred in
connection therewith shall be payable by the Pledgors under Section 9.
12. Waivers. Each Pledgor, to the greatest extent not prohibited by
applicable law, hereby (i) agrees that it will not invoke, claim or assert the
benefit of any rule of law or statute now or hereafter in effect (including,
without limitation, any right to prior notice or judicial hearing in
connection with the Administrative Agent's possession, custody or disposition
of any Collateral or any appraisal, valuation, stay, extension, moratorium or
redemption law), or take or omit to take any other action, that would or could
reasonably be expected to have the effect of delaying, impeding or preventing
the exercise of any rights and remedies in respect of the Collateral, the
absolute sale of any of the Collateral or the possession thereof by any
purchaser at any sale thereof, and waives the benefit of all such laws and
further agrees that it will not hinder, delay or impede the execution of any
power granted hereunder to the Administrative Agent, but that it will permit
the execution of every such power as though no such laws were in effect, (ii)
waives all rights that it has or may have under any rule of law or statute now
existing or hereafter adopted to require the Administrative Agent to marshal
any Collateral or other assets in favor of such Pledgor or any other party or
against or in payment of any or all of the Obligations, and (iii) waives all
rights that it has or may have under any rule of law or statute now existing
or hereafter adopted to demand, presentment, protest, advertisement or notice
of any kind (except notices expressly provided for herein).
13. No Waiver. The rights and remedies of the Secured Parties expressly
set forth in this Agreement and the other Loan Documents are cumulative and in
addition to, and not exclusive of, all other rights and remedies available at
law, in equity or otherwise. No failure or delay on the part of any Secured
Party in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of
any other right, power or privilege or be construed to be a waiver of any
Default or Event of Default. No course of dealing between the Pledgors and the
Secured Parties or their agents or employees shall be effective to amend,
modify or discharge any provision of this Agreement or any other Loan Document
or to constitute a waiver of any Default or Event of Default. No notice to or
demand upon any Pledgor in any case shall entitle such Pledgor or any other
Pledgor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of any Secured Party to
exercise any right or remedy or take any other or further action in any
circumstances without notice or demand.
14. Pledgors' Obligations Absolute. Each Pledgor agrees that its
obligations hereunder, and the security interest granted to and all rights,
remedies and powers of the Administrative Agent hereunder, are irrevocable,
absolute and unconditional and shall not be discharged, limited or otherwise
affected by reason of any of the following, whether or not such Pledgor has
knowledge thereof:
(i) any change in the time, manner or place of payment of, or in any
other term of, any Obligations, or any amendment, modification or
supplement to, restatement of, or consent to any rescission or waiver of
12
or departure from, any provisions of the Reimbursement Agreement, any
other Loan Document or any agreement or instrument delivered pursuant to
any of the foregoing;
(ii) the invalidity or unenforceability of any Obligations or any
provisions of the Reimbursement Agreement, any other Loan Document or any
agreement or instrument delivered pursuant to any of the foregoing;
(iii) the addition or release of Pledgors hereunder or the taking,
acceptance or release of any Obligations or additional Collateral or
other security therefor;
(iv) any sale, exchange, release, substitution, compromise,
nonperfection or other action or inaction in respect of any Collateral or
other direct or indirect security for any Obligations, or any discharge,
modification, settlement, compromise or other action or inaction in
respect of any Obligations;
(v) any agreement not to pursue or enforce or any failure to pursue
or enforce (whether voluntarily or involuntarily as a result of operation
of law, court order or otherwise) any right or remedy in respect of any
Obligations or any Collateral or other security therefor, or any failure
to create, protect, perfect, secure, insure, continue or maintain any
Liens in any such Collateral or other security;
(vi) the exercise of any right or remedy available under the Loan
Documents, at law, in equity or otherwise in respect of any Collateral or
other security for any Obligations, in any order and by any manner
thereby permitted, including, without limitation, foreclosure on any such
Collateral or other security by any manner of sale thereby permitted,
whether or not every aspect of such sale is commercially reasonable;
(vii) any bankruptcy, reorganization, arrangement, liquidation,
insolvency, dissolution, termination, reorganization or like change in
the corporate structure or existence of any other Pledgor or any other
Person directly or indirectly liable for any Obligations;
(viii) any manner of application of any payments by or amounts
received or collected from any Person, by whomsoever paid and howsoever
realized, whether in reduction of any Obligations or any other
obligations of any other Person directly or indirectly liable for any
Obligations, regardless of what Obligations may remain unpaid after any
such application; or
(ix) any other circumstance that might otherwise constitute a legal
or equitable discharge of, or a defense, set-off or counterclaim
available to, any Pledgor or a surety or guarantor generally, other than
the occurrence of all of the following: (x) the payment in full of the
Obligations, (y) the termination of the obligation of the Issuing Bank to
issue Letters of Credit under the Reimbursement Agreement, and (z) the
termination or expiration of all outstanding Letters of Credit under the
Reimbursement Agreement (the events in clauses (x), (y) and (z) above,
collectively, the "Termination Requirements").
15. Enforcement. By its acceptance of the benefits of this Agreement,
each Bank agrees that this Agreement may be enforced only by the
13
Administrative Agent, acting upon the instructions or with the consent of the
Required Banks as provided for in the Reimbursement Agreement, and that no
Bank shall have any right individually to enforce or seek to enforce this
Agreement or to realize upon any Collateral or other security given to secure
the payment and performance of the Obligations.
16. Amendments, Waivers, etc. No amendment, modification, waiver,
discharge or termination of, or consent to any departure by any Pledgor from,
any provision of this Agreement shall be effective unless in a writing signed
by the Administrative Agent and such of the Banks as may be required under the
provisions of the Reimbursement Agreement to concur in the action then being
taken, and then the same shall be effective only in the specific instance and
for the specific purpose for which given.
17. Continuing Security Interest; Term; Successors and Assigns;
Assignment; Termination and Release; Survival. This Agreement shall create a
continuing security interest in the Collateral and shall secure the payment
and performance of all of the Obligations as the same may arise and be
outstanding at any time and from time to time from and after the date hereof,
and shall (i) remain in full force and effect until the occurrence of the
Termination Requirements, (ii) be binding upon and enforceable against each
Pledgor and its successors and assigns (provided, however, that no Pledgor may
sell, assign or transfer any of its rights, interests, duties or obligations
hereunder without the prior written consent of the Banks) and (iii) inure to
the benefit of and be enforceable by each Secured Party and its successors and
assigns. Upon any sale or other disposition by any Pledgor of any Collateral
in a transaction expressly permitted hereunder or under or pursuant to the
Reimbursement Agreement or any other applicable Loan Document, the Lien and
security interest created by this Agreement in and upon such Collateral shall
be automatically released, and upon the satisfaction of all of the Termination
Requirements, this Agreement and the Lien and security interest created hereby
shall terminate; and in connection with any such release or termination, the
Administrative Agent, at the request and expense of the applicable Pledgor,
will execute and deliver to such Pledgor such documents and instruments
evidencing such release or termination as such Pledgor may reasonably request
and will assign, transfer and deliver to such Pledgor, without recourse and
without representation or warranty (except that the Administrative Agent has
not assigned or otherwise transferred its rights hereunder with respect to the
applicable Collateral), such of the Collateral as may then be in the
possession of the Administrative Agent (or, in the case of any partial release
of Collateral, such of the Collateral so being released as may be in its
possession). All representations, warranties, covenants and agreements herein
shall survive the execution and delivery of this Agreement and any Pledge
Supplement.
18. Other Terms. All terms in this Agreement that are not capitalized
shall have the meanings provided by the Uniform Commercial Code to the extent
the same are used or defined therein. As used in this Agreement, "Uniform
Commercial Code" shall mean the Uniform Commercial Code as the same may be in
effect from time to time in the State of New York; provided that if, by reason
of applicable law, the validity or perfection of any security interest in any
Collateral granted under this Agreement is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than New York, then as to the
validity or perfection, as the case may be, of such security interest,
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in effect
from time to time in such other jurisdiction.
14
19. Notices. All notices and other communications provided for hereunder
shall be given to the parties in the manner and subject to the other notice
provisions set forth in the Reimbursement Agreement.
20. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
21. Severability. To the extent any provision of this Agreement is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
22. Construction. The headings of the various sections and subsections of
this Agreement have been inserted for convenience only and shall not in any
way affect the meaning or construction of any of the provisions hereof. Unless
the context otherwise requires, words in the singular include the plural and
words in the plural include the singular.
23. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
15
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
under seal by their duly authorized officers as of the date first above
written.
ACE LIMITED
The Common Seal of ACE Limited was hereunto
affixed in the presence of:
---------------------------------------------
Director
---------------------------------------------
Secretary
ACE BERMUDA INSURANCE LTD.
The Common Seal of ACE Bermuda Insurance Ltd.
was hereunto affixed in the presence of:
---------------------------------------------
Director
---------------------------------------------
Secretary
ACE TEMPEST LIFE REINSURANCE LTD.
The Common Seal of ACE Tempest Life
Reinsurance Ltd. was hereunto affixed in the
presence of:
---------------------------------------------
Director
---------------------------------------------
Secretary
(signatures continued)
16
ACE TEMPEST REINSURANCE LTD.
The Common Seal of ACE Tempest Reinsurance
Ltd. was hereunto affixed in the presence of:
---------------------------------------------
Director
---------------------------------------------
Secretary
Accepted and agreed to:
WACHOVIA BANK, NATIONAL ASSOCIATION, as
Administrative Agent
By: _________________________________
Title: _________________________________
ANNEX A
JURISDICTION OF ORGANIZATION/
LOCATION OF CHIEF EXECUTIVE OFFICE
1. ACE Limited
Jurisdiction of organization: Cayman Islands
Chief executive office:
ACE Global Headquarters
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
2. ACE Bermuda Insurance Ltd.
Jurisdiction of organization: Bermuda
Chief executive office:
ACE Global Headquarters
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
3. ACE Tempest Life Reinsurance Ltd.
Jurisdiction of organization: Bermuda
Chief executive office:
ACE Global Headquarters
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
4. ACE Tempest Reinsurance Ltd.
Jurisdiction of organization: Bermuda
Chief executive office:
ACE Global Headquarters
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
Exhibit A
Account Statements
[attached hereto]
Exhibit B
Form of Control Agreement
[attached hereto]
Exhibit C
Form of Pledge Supplement
THIS PLEDGE SUPPLEMENT, dated as of _______________, _____, is delivered
by [NAME OF PLEDGOR] (the "Pledgor") pursuant to Section 4(d) of the Pledge
and Security Agreement referred to hereinbelow. The Pledgor hereby agrees that
this Pledge Supplement may be attached to the Pledge and Security Agreement,
dated as of September 30, 2002, made by the Pledgor and certain other pledgors
named therein in favor of Wachovia Bank, National Association, as
Administrative Agent (as amended, modified or supplemented from time to time,
the "Pledge and Security Agreement," capitalized terms defined therein being
used herein as therein defined).
The Pledgor hereby pledges, assigns and delivers to the Administrative
Agent, for the ratable benefit of the Secured Parties, and grants to the
Administrative Agent, for the ratable benefit of the Secured Parties, a Lien
upon and security interest in, all of the Pledgor's right, title and interest
in and to the account listed on Annex A to this Pledge Supplement (the "New
Account"), together with all securities, money, instruments and other assets
now or at any time hereafter held or contained in or credited to the New
Account (all as more completely described in clause (ii) of Section 1 of the
Pledge and Security Agreement) and all Proceeds of the foregoing (the New
Account, together with all such securities, money, instruments and other
assets and the Proceeds thereof, collectively, the "New Collateral"). The
Pledgor agrees that the New Account shall be deemed to be an "Account" within
the meaning of the Pledge and Security Agreement, and that the New Account,
together with all other New Collateral, shall become part of the Collateral
and shall secure all of the Obligations [(other than the Guaranty Obligations
prior to the Tempest Life Effective Date)]/1 as provided in the Pledge and
Security Agreement. This Pledge Supplement and its attachments are hereby
incorporated into the Pledge and Security Agreement and made a part thereof.
[NAME OF PLEDGOR]
By: ________________________________
Title: ________________________________
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/1 Insert bracketed language if Tempest Life is the Pledgor.
EXHIBIT E
Form of Letter of Instruction
____________, 200_
Wachovia Bank, National Association
as Administrative Agent
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Attn: Syndication Agency Services
Ladies and Gentlemen:
Reference is made to the Reimbursement Agreement, dated as of September 30,
2002, among ACE Limited, ACE Bermuda Insurance Ltd., ACE Tempest Life
Reinsurance Ltd. and ACE Tempest Reinsurance Ltd., as Account Parties, the
Banks party thereto, and Wachovia Bank, National Association, as
Administrative Agent (as amended or otherwise modified from time to time,
the "Reimbursement Agreement"). Terms defined in the Reimbursement
Agreement are, unless otherwise defined herein or the context otherwise
requires, used herein as defined therein.
We refer to the notification received from the Administrative Agent
pursuant to Section 2.03(a) of the Reimbursement Agreement that requires us
to make on the date of this letter a reimbursement payment (the "Required
Payment") with respect to a drawing under a Letter of Credit issued under
the Reimbursement Agreement. Pursuant to this notification and inasmuch as
the Required Payment has not been made, we hereby irrevocably authorize and
direct you to liquidate and receive the proceeds of Collateral in an amount
equal to the Required Payment plus interest thereon as provided in the
Reimbursement Agreement.
We further irrevocably authorize and direct you to deliver this letter to
the Custodian or any other Person (and we agree that they may rely hereon
and are hereby irrevocably authorized and instructed to act in reliance
hereon without further consent or authorization from us or any other
Account Party) as you may deem to be appropriate to give effect to the
authorization and direction contained herein.
Very truly yours,
for and on behalf of
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