EXHIBIT 10.50
EXECUTION COPY
$250,000,000
CREDIT AGREEMENT
Dated as of June 11, 1999
Among
ACE LIMITED
ACE BERMUDA INSURANCE LTD.
TEMPEST REINSURANCE COMPANY LIMITED
ACE INA HOLDINGS INC.
as Borrowers
-- --------
and
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders
-- ------- -------
and
MELLON BANK, N.A.
as Issuing Bank
-- ------- ----
and
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
as Lead Arranger and Syndication Agent
--------------------------------------
and
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK
as Administrative Agent
-- --------------------
and
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
as Co-Arranger
-- -----------
and
BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION
CHASE MANHATTAN BANK
as Co-Documentation Agents
-- ---------------- ------
T A B L E O F C O N T E N T S
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms 1
1.02. Computation of Time Periods; Other Definitional Provisions 21
1.03. Accounting Terms and Determinations 21
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT
SECTION 2.01. The Committed Advances and the Letters of Credit 21
SECTION 2.02. Making the Committed Advances 22
SECTION 2.03. The Competitive Bid Advances 23
SECTION 2.04. Issuance and Renewals and Drawings, Participations and
Reimbursement with Respect to Letters of Credit 27
SECTION 2.05. Repayment of Advances 30
SECTION 2.06. Termination or Reduction of the WC Commitments. 31
SECTION 2.07. Prepayments 31
SECTION 2.08. Interest 32
SECTION 2.09. Fees 33
SECTION 2.10. Conversion of Advances 33
SECTION 2.11. Increased Costs, Etc. 34
SECTION 2.12. Payments and Computations 36
SECTION 2.13. Taxes 37
SECTION 2.14. Sharing of Payments, Etc. 39
SECTION 2.15. Use of Proceeds 40
SECTION 2.16. Defaulting Lenders 40
SECTION 2.17. Replacement of Affected Lender 42
SECTION 2.18. Certain Provisions Relating to the Issuing Bank and Letters of Credit 42
SECTION 2.19. Downgrade Event with Respect to a Lender 44
SECTION 2.20. Downgrade Event or Other Event with Respect to the Issuing Bank 46
SECTION 2.21. Non-Dollar Letters of Credit 46
ii
Section Page
ARTICLE III
CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01. Conditions Precedent to Initial Extension of Credit 48
SECTION 3.02. Conditions Precedent to Each Committed Borrowing and Issuance,
Extension or Increase of a Letter of Credit 50
SECTION 3.03. Conditions Precedent to Each Competitive Bid Borrowing 51
SECTION 3.04. Determinations Under Section 3.01 51
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrowers 52
ARTICLE V
COVENANTS OF THE BORROWERS
SECTION 5.01. Affirmative Covenants 56
SECTION 5.02. Negative Covenants 58
SECTION 5.03. Reporting Requirements 62
SECTION 5.04. Financial Covenants 64
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default 65
SECTION 6.02. Actions in Respect of the Letters of Credit upon Default 67
ARTICLE VII
THE GUARANTY
SECTION 7.01. The Guaranty 68
SECTION 7.02. Guaranty Unconditional 68
SECTION 7.03. Discharge Only upon Payment in Full; Reinstatement in Certain
Circumstances 69
iii
SECTION 7.04. Waiver by the Borrowers 69
SECTION 7.05. Subrogation 69
SECTION 7.06. Stay of Acceleration 70
SECTION 7.07. Continuing Guaranty; Assignments 70
ARTICLE VIII
THE AGENTS
SECTION 8.01. Authorization and Action 70
SECTION 8.02. Agents' Reliance, Etc 71
SECTION 8.03. MGT and Affiliates 71
SECTION 8.04. Lender Credit Decision 71
SECTION 8.05. Indemnification 72
SECTION 8.06. Successor Agents 72
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc 73
SECTION 9.02. Notices, Etc 73
SECTION 9.03. No Waiver; Remedies 74
SECTION 9.04. Costs and Expenses 74
SECTION 9.05. Right of Set-off. 75
SECTION 9.06. Binding Effect 75
SECTION 9.07. Assignments and Participations 76
SECTION 9.08. Execution in Counterparts 80
SECTION 9.09. No Liability of the Issuing Bank 80
SECTION 9.10. Confidentiality 80
SECTION 9.11. Jurisdiction, Etc 81
SECTION 9.12. Governing Law 81
SECTION 9.14. Waiver of Jury Trial 81
iv
Section Page
SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule 4.01(b) - Subsidiaries
EXHIBITS
Exhibit A-1 - Form of Committed Note
Exhibit A-2 - Form of Competitive Bid Note
Exhibit B-1 - Form of Notice of Committed Borrowing
Exhibit B-2 - Form of Notice of Competitive Bid Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D-1 - Form of Opinion of Cayman Islands Counsel to the
Parent
Exhibit D-2 - Form of Opinion of New York Counsel to the Loan Parties
Exhibit D-3 - Form of Opinion of Bermuda Counsel to the Ace Bermuda
and Tempest
Exhibit E - Form of Designation Agreement
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of June 11, 1999 among ACE Limited, a Cayman
Islands company (the "Parent"), ACE Bermuda Insurance Ltd ( "ACE Bermuda"),
Tempest Reinsurance Company Limited ("Tempest") and ACE INA Holdings Inc. ("ACE
INA") (Ace Bermuda, Tempest, ACE INA together with the Parent, the "Borrowers"),
the banks, financial institutions and other institutional lenders listed on the
signature pages hereof as the Initial Lenders (the "Initial Lenders"), Mellon
Bank, N.A. as issuing bank (the "Issuing Bank"), ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated ("ML&Co."), as syndication agent (together with any successor
syndication agent appointed pursuant to Article VII, the "Syndication Agent")
and as lead arranger (the "Lead Arranger"), ▇▇▇▇▇▇ Guaranty Trust Company of New
York ("MGT"), as administrative agent (together with any successor
administrative agent appointed pursuant to Article VII, the "Administrative
Agent" and, together with the Syndication Agent, the "Agents") for the Lenders
(as hereinafter defined), and ▇.▇. ▇▇▇▇▇▇ Securities Inc. ("▇.▇. ▇▇▇▇▇▇"), as
co-arranger (the "Co-Arranger").
PRELIMINARY STATEMENTS:
The Borrowers have requested that the Lenders make available to the
Borrowers a credit facility in an amount up to $250,000,000 to provide working
capital for the Borrowers and their Subsidiaries and for other general corporate
purposes. The Lenders have indicated their willingness to agree to make such
amount 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 Party" with respect to any outstanding or proposed Letter
of Credit means the Borrower for the account of which such Letter of Credit
was or is proposed to be issued.
"ACE Bermuda" has the meaning specified in the recital of parties to
this Agreement.
"ACE INA" has the meaning specified in the recital of parties to this
Agreement.
"ACE INA 364-Day Revolving Credit Facility" means the 364-Day
Revolving Credit Agreement dated as of the date hereof among the Parent,
ACE INA, as borrower, the subsidiary
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guarantors referred to therein, the lenders party thereto, ML&Co. as
syndication agent and lead arranger, MGT as administrative agent, and ▇.▇.
▇▇▇▇▇▇ as co-arranger, as the same may be amended, modified or otherwise
supplemented from time to time.
"Acquisition" means the acquisition by the Parent or one of its
Affiliates from the Seller of CIGNAP&C, which currently is a division of
the Seller.
"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) 50% of 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 with ▇▇▇▇▇▇
Guaranty Trust Company of New York, at its office at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Account No. 999 99 090, Attention: ▇▇▇▇ ▇▇▇▇, or
such other account as the Administrative Agent shall specify in writing to
the Lenders.
"Advance" means a Committed Advance, a Competitive Bid Advance or a
Letter of Credit Advance.
"Affected Lender" means any Lender that (i) has made, or notified any
Borrower that an event or circumstance has occurred which may give rise to,
a demand for compensation under Section 2.11(a) or (b) or Section 2.13 (but
only so long as the event or circumstance giving rise to such demand or
notice is continuing), (ii) has notified any Borrower (which notice has
not been withdrawn) of any event or circumstance of a type described in
Section 2.11(c) or (d) or (iii) is a Downgraded Lender.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 5% or more of the
Voting Interests of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Interests, by contract or otherwise.
"Agents" has the meaning specified in the recital of parties to this
Agreement.
"Agreement Currency" has the meaning specified in Section 2.21(g).
"Applicable Facility Fee Percentage" means, as of any date, a
percentage per annum determined by reference to the Public Debt Rating in
effect on such date as set forth below:
3
----------------------------------------------
Public Debt Rating Applicable Facility Fee
S&P/▇▇▇▇▇'▇ Percentage
----------------------------------------------
▇▇▇▇▇ ▇ 0.125%
-------
A-/A3 and above
----------------------------------------------
▇▇▇▇▇ ▇ 0.150%
-------
BBB+/Baa1
----------------------------------------------
▇▇▇▇▇ ▇ 0.175%
-------
BBB/Baa2
----------------------------------------------
▇▇▇▇▇ ▇ 0.225%
-------
BBB-/Baa3
----------------------------------------------
▇▇▇▇▇ ▇ 0.350%
-------
Lower than Level 4
----------------------------------------------
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance and
such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance and, in the case of a Competitive Bid Advance, the office of such
Lender notified by such Lender to the Administrative Agent as its
Applicable Lending Office with respect to such Competitive Bid Advance.
"Applicable Margin" means, as of any date, a percentage per annum
determined by reference to the Public Debt Rating in effect on such date as
set forth below:
-------------------------------------------------------------
Public Debt Rating Applicable Margin Applicable Margin
S&P/▇▇▇▇▇'▇ for for
Base Rate Advances Eurodollar Rate
Advances
-------------------------------------------------------------
▇▇▇▇▇ ▇ 0.00% 0.375%
-------
A-/A3 and above
-------------------------------------------------------------
▇▇▇▇▇ ▇ 0.00% 0.475%
-------
BBB+/Baa1
-------------------------------------------------------------
▇▇▇▇▇ ▇ 0.00% 0.575%
-------
BBB/Baa2
-------------------------------------------------------------
▇▇▇▇▇ ▇ 0.00% 0.650%
-------
BBB-/Baa3
-------------------------------------------------------------
▇▇▇▇▇ ▇ 0.00% 1.275%
-------
Lower than Level 4
-------------------------------------------------------------
provided, however, that, if as of any date of determination the aggregate
outstanding principal amount of Committed Advances on such day exceeds 33%
of the aggregate WC Commitments on such day, the Applicable Margin for such
date shall be the percentage per annum determined above plus 0.125%.
4
"Approved Fund" means, with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is
advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"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.
"Arrangers" means each of the Lead Arranger and the Co-Arranger.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in accordance with Section 9.07 and in substantially
the form of Exhibit C 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).
"Bankruptcy Law" means any proceeding of the type referred to in
Section 6.01(f) or Title 11, U.S. Code, or any similar foreign, federal or
state law for the relief of debtors.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the
higher of:
(a) the rate of interest announced publicly by MGT in New York,
New York, from time to time, as MGT's prime rate; and
(b) 1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears interest as provided
in Section 2.08(a)(i).
"Borrowers" has the meaning specified in the recital of parties to
this Agreement.
"Borrowers' 364-Day Revolving Credit Facility" means the 364-Day
Revolving Credit Agreement dated as of the date hereof among the Borrowers,
the lenders party thereto, ML&Co. as syndication agent and lead arranger,
MGT as administrative agent and ▇.▇. ▇▇▇▇▇▇ as co-arranger, as the same may
be amended, modified or otherwise supplemented from time to time.
"Borrowers' Account" means the account of one or more Borrowers
maintained by such Borrower(s) with The Bank of Bermuda Limited at its
office at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ Account No.▇▇▇▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, or such other account as the Parent shall specify
in writing to the Administrative Agent or such other account as the
Borrowers (or any one of them) shall specify in writing to the
Administrative Agent.
5
"Borrowing" means a Committed Borrowing or a Competitive Bid
Borrowing.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advances or LIBO Rate Advances,
on which dealings are carried on in the London interbank market.
"Capitalized Leases" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
"Change of Control" means the occurrence of any of the following: (a)
any Person or two or more Persons acting in concert shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the Securities
and Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly, of Voting Interests of the Parent (or other
securities convertible into such Voting Interests) representing 30% or more
of the combined voting power of all Voting Interests of the Parent; or (b)
a majority of the board of directors of the Parent shall not be Continuing
Members; or (c) any Person or two or more Persons acting in concert shall
have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that results in its or their acquisition of the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of the Parent.
"CIGNAP&C" means the domestic and international property and casualty
business of the Seller.
"Co-Arranger" has the meaning specified in the recital of parties to
this Agreement.
"Commitment" means a WC Commitment or the Letter of Credit Commitment.
"Committed Advance" has the meaning specified in Section 2.01(a).
"Committed Borrowing" means a borrowing consisting of simultaneous
Committed Advances of the same Type made by the Lenders to the same
Borrower.
"Committed Facility" means, at any time, the aggregate amount of the
Lenders' WC Commitments at such time.
"Committed Note" means a promissory note of any Borrower payable to
the order of any Lender, in substantially the form of Exhibit A-1 hereto,
evidencing the aggregate indebtedness of such Borrower to such Lender
resulting from the Committed Advances made by such Lender, as amended.
"Competitive Bid Advance" means an advance by a Lender to any Borrower
as part of a Competitive Bid Borrowing resulting from the competitive
bidding procedure described in Section 2.03 and refers to a Fixed Rate
Advance or a LIBO Rate Advance.
6
"Competitive Bid Borrowing" means a borrowing consisting of
simultaneous Competitive Bid Advances from each of the Lenders whose offer
to make one or more Competitive Bid Advances as part of such borrowing has
been accepted under the competitive bidding procedure described in Section
2.03.
"Competitive Bid Note" means a promissory note of any Borrower payable
to the order of any Lender, in substantially the form of Exhibit A-2
hereto, evidencing the indebtedness of such Borrower to such Lender
resulting from Competitive Bid Advances made by such Lender.
"Confidential Information" means information that any Loan Party
furnishes to any Agent or any Lender, but does not include any such
information that is or becomes generally available to the public other than
as a result of a breach by such Agent or any Lender of its obligations
hereunder or that is or becomes available to such Agent or such Lender from
a source other than the Loan Parties that is not, to the best of such
Agent's or such Lender's knowledge, acting in violation of a
confidentiality agreement with a Loan Party.
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Consolidated Net Income" means, for any period, the net income of the
Parent and its Consolidated Subsidiaries, determined on a Consolidated
basis for such period.
"Consolidated Tangible Net Worth" means at any date the Consolidated
stockholder's equity of the Parent and its Consolidated Subsidiaries (plus,
to the extent not included in such Consolidated stockholder's equity, the
outstanding amount of all Mandatorily Convertible Preferred Securities)
less their Consolidated Intangible Assets, all 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. For
purposes of this definition, "Intangible Assets" means the amount (to the
extent reflected in determining such Consolidated stockholder's equity) of
(i) all write-ups (other than write-ups resulting from foreign currency
translations and write-ups of assets of a going concern business made
within twelve months after the acquisition of such business) subsequent to
March 31, 1999 in the book value of any asset owned by the Parent or a
Consolidated Subsidiary and (ii) all unamortized debt discount and expense,
unamortized deferred charges, deferred acquisition cost relating to the
acquisition of the stock or assets of any other Person, goodwill, patents,
trademarks, service marks, trade names, anticipated future benefit of tax
loss carry-forwards, copyrights, organization or developmental expense and
other intangible assets.
"Contingent Obligation" means, with respect to any Person, any
obligation or arrangement of such Person to guarantee or intended to
guarantee any Debt, leases, dividends or other payment obligations
("primary obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, (a)
the direct or indirect guarantee, endorsement (other than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of a
primary obligor, (b) the obligation to make take-or-pay or similar
payments, if
7
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.
"Conversion", "Convert" and "Converted" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section
2.10 or 2.11.
"Debenture" means debt securities issued by ACE INA or the Parent to
the Special Purpose Trust in exchange for proceeds of Preferred Securities.
"Debt" of any Person means, without duplication for purposes of
calculating financial ratios, (a) all indebtedness of such Person for
borrowed money, (b) all obligations of such Person for the deferred
purchase price of property or services (other than trade payables incurred
in the ordinary course of such Person's business), (c) all obligations of
such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all obligations of such Person created or arising under
any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all obligations of
such Person as lessee under Capitalized Leases (excluding imputed
interest), (f) all obligations of such Person under acceptance, letter of
credit or similar facilities, (g) all obligations of such Person to
purchase, redeem, retire, defease or otherwise make any payment in respect
of any Equity Interests 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
8
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 the Special Purpose Trust under any Preferred Securities.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
"Defaulted Advance" means, with respect to any Lender at any time, the
portion of any Advance required to be made by such Lender to any Borrower
pursuant to Section 2.01 or 2.02 at or prior to such time that has not been
made by such Lender or by the Administrative Agent for the account of such
Lender pursuant to Section 2.02(d) as of such time.
"Defaulted Amount" means, with respect to any Lender at any time, any
amount required to be paid by such Lender to any Agent or any other Lender
hereunder or under any other Loan Document at or prior to such time that
has not been so paid as of such time, including, without limitation, any
amount required to be paid by such Lender to (a) the Administrative Agent
pursuant to Section 2.02(d) to reimburse the Administrative Agent for the
amount of any Committed Advance made by the Administrative Agent for the
account of such Lender, (b) the Issuing Bank pursuant to Section 2.04(c) to
purchase a portion of a Letter of Credit Advance made by the Issuing Bank,
(c) any other Lender pursuant to Section 2.14 to purchase any participation
in Committed Advances owing to such other Lender and (d) any Agent or the
Issuing Bank pursuant to Section 8.05 to reimburse such Agent or the
Issuing Bank for such Lender's ratable share of any amount required to be
paid by the Lenders to such Agent or the Issuing Bank as provided therein.
"Defaulting Lender" means, at any time, any Lender that, at such time,
(a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take any
action or be the subject of any action or proceeding of a type described in
Section 6.01(f).
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"Designated Bidder" means (a) an Eligible Assignee or (b) a special
purpose corporation that is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business and
that issues (or the parent of which issues) commercial paper rated at least
"Prime-1" (or the then equivalent grade) by Moody's or "A-1" (or the then
equivalent grade) by S&P that, in the case of either clause (a) or (b), (i)
is organized under the laws of the United States or any State thereof, (ii)
shall have become a party hereto pursuant to Section 9.07(f), (g) and (h)
and (iii) is not otherwise a Lender.
"Designation Agreement" means a designation agreement entered into by
a Lender (other than a Designated Bidder) and a Designated Bidder, and
accepted by the Administrative Agent and the Parent (such acceptance, in
the case of the Parent, not to be unreasonably withheld), in substantially
the form of Exhibit E hereto.
"Dollar Equivalent" has the meaning specified in Section 2.21(h).
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant
to which it became a Lender, as the case may be, or such other office of
such Lender as such Lender may from time to time specify to any Borrower
and the Administrative Agent.
"Downgrade Account" has the meaning specified in Section 2.19(a).
"Downgrade Event" means, with respect to any Lender, a reduction of
the credit rating for the senior unsecured unsupported long-term debt of
such Lender by S&P or Moody's.
"Downgraded Lender" means any Lender which has a credit rating of less
than A- (in the case of S&P) or A3 (in the case of Moody's) for its senior
unsecured unsupported long-term debt or which does not have any credit
rating on such debt from one of S&P or Moody's.
"Downgrade Notice" has the meaning specified in Section 2.19(a).
"Effective Date" means the first date on which the conditions set
forth in Article III shall have been satisfied.
"Eligible Assignee" means (i) a Lender, (ii) an Affiliate of a Lender,
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 a Default has occurred and is continuing at the time any
assignment is effected pursuant to Section 9.07, the Borrower (such
approval of the Borrower 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,
10
consent order or consent agreement relating in any way to any Environmental
Law, any Environmental Permit or Hazardous Material or arising from alleged
injury or threat to health, safety or the environment, including, without
limitation, (a) by any governmental or regulatory authority for
enforcement, cleanup, removal, response, remedial or other actions or
damages and (b) by any governmental or regulatory authority or third party
for damages, contribution, indemnification, cost recovery, compensation or
injunctive relief.
"Environmental Law" means any Federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or agency interpretation, policy or guidance
relating to pollution or protection of the environment, health, safety or
natural resources, including, without limitation, those relating to the
use, handling, transportation, treatment, storage, disposal, release or
discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"Equity Interests" means, with respect to any Person, shares of
capital stock of (or other ownership or profit interests in) such Person,
warrants, options or other rights for the purchase or other acquisition
from such Person of shares of capital stock of (or other ownership or
profit interests in) such Person, securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase
or other acquisition from such Person of such shares (or such other
interests), and other ownership or profit interests in such Person
(including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares,
warrants, options, rights or other interests are authorized or otherwise
existing on any date of determination.
"Equity Issuance" means one or more issuances by the Parent and/or ACE
INA of Equity Interests and/or equity-linked securities, the Net Cash
Proceeds of which shall be at least $500,000,000.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of any Loan Party, or under
common control with any Loan Party, within the meaning of Section 414 of
the Internal Revenue Code or Section 4001 of ERISA.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant
to which it became a Lender (or, if no such office is
11
specified, its Domestic Lending Office), or such other office of such
Lender as such Lender may from time to time specify to the Parent and the
Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for all Eurodollar
Rate Advances comprising part of the same Committed Borrowing, an interest
rate per annum equal to the rate per annum (rounded upwards, if not an
integral multiple of 1/32 or 1/100 of 1%, to the nearest 1/100 of 1%)
appearing on Dow ▇▇▇▇▇ Markets (Telerate) Page 3750 (or any successor page)
as the London interbank offered rate for deposits in U.S. dollars at 11:00
A.M. (London time) two Business Days before the first day of such Interest
Period for a period equal to such Interest Period (provided that, if for
any reason such rate is not available, the term "Eurodollar Rate" shall
mean, for any Interest Period for all Eurodollar Rate Advances comprising
part of the same Committed Borrowing, the rate per annum (rounded upwards,
if not an integral multiple of 1/32 or 1/100 of 1% to the nearest 1/100 of
1%) appearing on Reuters Screen LIBO Page as the London interbank offered
rate for deposits in Dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates).
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.08(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Committed Borrowing
means the reserve percentage applicable two Business Days before the first
day of such Interest Period under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve requirement) for a
member bank of the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities
(or with respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurodollar Rate
Advances is determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Existing Credit Agreement" means the Five-Year Credit Agreement dated
as of December 11, 1997 among the Parent, the guarantors listed therein,
the lenders party thereto, ▇.▇. ▇▇▇▇▇▇ Securities Inc. and Mellon Bank,
N.A., as co-syndication agents, MGT as administrative agent, as amended,
modified or otherwise supplemented from time to time
"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
12
that is a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letter" means the fee letter dated January 11, 1999 among the
Parent, the Arrangers, the Administrative Agent and ▇▇▇▇▇▇▇ ▇▇▇▇▇, as
amended.
"Fiscal Year" means a fiscal year of the Parent and its Consolidated
Subsidiaries ending on September 30 in any calendar year.
"Fixed Rate Advances" has the meaning specified in Section 2.03(a)(i).
"Foreign Government Scheme or Arrangement" has the meaning specified
in Section 4.01 (n) (iv).
"Foreign Plan" has the meaning specified in Section 4.01 (n) (iv).
"GAAP" has the meaning specified in Section 1.03.
"Granting Lender" has the meaning specified in Section 9.07(l).
"Guaranty" means the undertaking by each of the Borrowers 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).
"Information Memorandum" means the information memorandum dated
February, 1999 used by the Arrangers in connection with the syndication of
the Commitments.
"Initial Extension of Credit" means the earlier to occur of the
initial Committed Borrowing and the initial issuance of a Letter of Credit
hereunder.
"Initial Lenders" has the meaning specified in the recital of parties
to this Agreement.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Committed Borrowing and each LIBO Rate Advance comprising
part of the same Competitive
13
Bid Borrowing, the period commencing on the date of such Eurodollar Rate
Advance or LIBO Rate Advance or the date of the Conversion of any Base Rate
Advance into such Eurodollar Rate Advance, and ending on the last day of
the period selected by the Borrower requesting such Borrowing or Conversion
pursuant to the provisions below and, thereafter, each subsequent period
commencing on the last day of the immediately preceding Interest Period and
ending on the last day of the period selected by the applicable Borrower
pursuant to the provisions below. The duration of each such Interest Period
shall be one or two weeks or one, two, three or six months, as the Borrower
requesting such Borrowing or Conversion may, upon notice received by the
Administrative Agent not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the first day of such Interest Period, select;
provided, however, that:
(a) such Borrower may not select any Interest Period with respect
to any Eurodollar Rate Advance that ends after the Termination Date;
(b) Interest Periods commencing on the same date for Eurodollar
Rate Advances comprising part of the same Committed Borrowing or for LIBO
Rate Advances comprising part of the same Competitive Bid Borrowing shall
be of the same duration;
(c) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day,
provided, however, that, if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the last day
of such Interest Period shall occur on the next preceding Business Day; and
(d) whenever the first day of any Interest Period (other than a
one or two week Interest Period) occurs on a day of an initial calendar
month for which there is no numerically corresponding day in the calendar
month that succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such Interest Period
shall end on the last Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any Equity Interests or Debt or the
assets comprising a division or business unit or a substantial part or all
of the business of such Person, any capital contribution to such Person or
any other direct or indirect investment in such Person, including, without
limitation, any acquisition by way of a merger or consolidation and any
arrangement pursuant to which the investor incurs Debt of the types
referred to in clause (h) or (i) of the definition of "Debt" in respect of
such Person; provided, however, that any purchase by any Loan Party or any
Subsidiary of any catastrophe-linked instruments which are (x) issued for
the purpose of transferring traditional reinsurance risk to the capital
markets and (y) purchased by such Loan
14
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 Mellon Bank, N.A. and any "New Issuing Bank"
appointed in accordance with Section 2.20.
"▇.▇. ▇▇▇▇▇▇" has the meaning specified in the recital of parties to
this Agreement.
"Judgment Currency" has the meaning specified in Section 2.21(g).
"LC Participation Obligations" has the meaning specified in Section
2.19(a).
"L/C Related Documents" has the meaning specified in Section
2.05(b)(ii).
"Lead Arranger" has the meaning specified in the recital of parties to
this Agreement.
"Lenders" means the Initial Lenders and each Person that shall become
a Lender hereunder pursuant to Section 9.07(a), (b) and (c) for so long as
such Initial Lender or Person, as the case may be, shall be a party to this
Agreement and, solely when used in reference to a Competitive Bid Advance,
a Competitive Bid Borrowing, a Competitive Bid Note, or a related term,
each Designated Bidder.
"Letter of Credit Advance" has the meaning specified in Section
2.04(f).
"Letter of Credit Agreement" has the meaning specified in Section
2.04(a).
"Letter of Credit Business Day" means a day of the year on which banks
are not required or authorized by law to close in New York City and on
which banks are not required or authorized by law to close in Pittsburgh,
Pennsylvania (or, if Mellon Bank, N.A. is no longer the Issuing Bank, in
the city in which the principal letter of credit operations of the Issuing
Bank are located).
"Letter of Credit Commitment" means at any time the lesser of (a)
$250,000,000(or such other amount as may be agreed in writing among the
Borrowers, the Agents and the Issuing Bank) and (b) the aggregate amount of
the WC Commitments.
"Letters of Credit" has the meaning specified in Section 2.01(b).
"Letter of Credit Exposure" at any time means the sum at such time of
(a) the aggregate outstanding amount of Letter of Credit Advances, (b) the
aggregate Available Amounts of all outstanding Letters of Credit and (c)
the aggregate Available Amounts of all Letters of Credit which have been
requested by a Borrower to be issued hereunder but have not yet been so
issued.
15
"Letter of Credit Participating Interest" has the meaning specified in
Section 2.04(d).
"Letter of Credit Participating Interest Commitment" has the meaning
specified in Section 2.04(d).
"LIBO Rate" means, for any Interest Period for all LIBO Rate Advances
comprising part of the same Competitive Bid Borrowing, an interest rate per
annum equal to the rate per annum (rounded upwards, if not an integral
multiple of 1/32 or 1/100 of 1%, to the nearest 1/100 of 1%) appearing on
Dow ▇▇▇▇▇ Markets (Telerate) Page 3750 (or any successor page) as the
London interbank offered rate for deposits in U.S. dollars at 11:00 A.M.
(London time) two Business Days before the first day of such Interest
Period for a period equal to such Interest Period (provided that, if for
any reason such rate is not available, the term "LIBO Rate" shall mean for
any Interest Period for all LIBO Rate Advances comprising part of the same
Competitive Bid Borrowing, the rate per annum (rounded upwards, if not an
integral multiple of 1/32 or 1/100 of 1%, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered rate
for deposits in Dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates).
"LIBO Rate Advances" has the meaning specified in Section 2.03(a)(i).
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"Loan Documents" means (i) this Agreement, (ii) the Notes, (iii) the
Fee Letter and (iv) each Letter of Credit Agreement, in each case as
amended.
"Loan Parties" means the Borrowers.
"Mandatorily Convertible Preferred Securities" means units comprised
of Preferred Securities and a contract for the sale of ordinary shares of
the Parent (including "Feline Prides" 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
16
rights and remedies of any Agent or any Lender under any Loan Document or
(c) the ability of the Loan Parties, taken as a whole, to perform their
obligations under the Loan Documents.
"Material Financial Obligation" means a principal amount of Debt
and/or payment obligations in respect of any Hedge Agreement of the Parent
and/or one or more of its Subsidiaries arising in one or more related or
unrelated transactions exceeding in the aggregate $25,000,000.
"▇▇▇▇▇▇▇ ▇▇▇▇▇" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation.
"MGT" has the meaning specified in the recital of parties to this
Agreement.
"ML&Co." has the meaning specified in the recital of parties to this
Agreement.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any
of the preceding five plan years made or accrued an obligation to make
contributions.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
or other disposition of any asset or the incurrence or issuance of any Debt
or the sale or issuance of any Equity Interests or Preferred Securities by
any Person, the aggregate amount of cash received from time to time
(whether as initial consideration or through payment or disposition of
deferred consideration) by or on behalf of such Person in connection with
such transaction after deducting therefrom only (without duplication) (a)
reasonable and customary brokerage commissions, underwriting fees and
discounts, legal fees, finder's fees and other similar fees and
commissions, (b) the amount of taxes payable in connection with or as a
result of such transaction and (c) the amount of any Debt secured by a Lien
on such asset that, by the terms of the agreement or instrument governing
such Debt, is required to be repaid upon such disposition, in each case to
the extent, but only to the extent, that the amounts so deducted are, at
the time of receipt of such cash, actually paid to a Person that is not an
Affiliate of such Person or any Loan Party or any Affiliate of any Loan
Party and are properly attributable to such transaction or to the asset
that is the subject thereof; provided, however, that in the case of taxes
that are deductible under clause (b) above but for the fact that, at the
time of receipt of such cash, such taxes have not been actually paid or are
not then payable, such Loan Party or such Subsidiary may deduct an amount
(the "Reserved Amount") equal to the amount reserved in accordance with
GAAP for such Loan Party's or such Subsidiary's reasonable estimate of such
taxes, other than taxes for which such Loan Party or such Subsidiary is
indemnified; provided further that, at the time such taxes are paid, an
amount equal to the amount, if any, by which the Reserved Amount for such
taxes exceeds the amount of such taxes actually paid shall constitute "Net
Cash Proceeds" of the type for which such taxes were reserved for all
purposes hereunder; provided further that, prior to the date on which the
Public Debt Rating of the Parent falls to BBB/Baa2 or below, Net Cash
Proceeds from the sale, lease, transfer or other disposition of any asset
or Equity Interests shall
17
not include any amount of cash proceeds received in connection with such
transaction to the extent such cash proceeds are reinvested in the same or
related line of business as the business of the Parent.
"Non-Dollar Letters of Credit" has the meaning specified in Section
2.21(a).
"Note" means a Committed Note or a Competitive Bid Note.
"Notice of Committed Borrowing" has the meaning specified in Section
2.02(a).
"Notice of Competitive Bid Borrowing" has the meaning specified in
Section 2.03(a).
"OECD" means the Organization for Economic Cooperation and
Development.
"Other Taxes" has the meaning specified in Section 2.13(b).
"Overnight Rate" has the meaning specified in Section 2.21(h).
"Parent" has the meaning specified in the recital of parties to this
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 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.
18
"Pre-Commitment Information" means all of the written information in
the Information Memorandum provided by or on behalf of the Parent to the
Administrative Agent and the Lenders (other than any information provided
by ML&Co. and its Affiliates).
"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 the
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 Share" of any amount means, with respect to any Lender at
any time, the product of such amount times a fraction the numerator of
which is the amount of such Lender's WC Commitment at such time (or, if the
WC Commitments shall have been terminated pursuant to Section 2.06 or 6.01,
such Lender's WC Commitment as in effect immediately prior to such
termination) and the denominator of which is the Committed Facility at such
time (or, if the WC Commitments shall have been terminated pursuant to
Section 2.05 or 6.01, the Committed Facility as in effect immediately prior
to such termination).
"Public Debt Rating" means, as of any date, the lower rating that has
been most recently announced by either S&P or ▇▇▇▇▇'▇, as the case may be,
for any class of non-credit enhanced long-term senior unsecured debt issued
by the Parent. For purposes of the foregoing, (a) if only one of S&P and
▇▇▇▇▇'▇ shall have in effect a Public Debt Rating, the Applicable Margin or
the Applicable Facility Fee Percentage, as the case may be, shall be
determined by reference to the available rating; (b) if (i) from and after
January 11, 1999, the Parent and its Subsidiaries shall not have sold or
issued Equity Interests and/or equity linked securities or sold, leased,
transferred or otherwise disposed of (including through liquidation)
material assets generating, in the aggregate, $500,000,000 of Net Cash
Proceeds which are used to permanently reduce the Borrowers' 364-Day
Revolving Credit Facility and the ACE INA 364-Day Revolving Credit Facility
in accordance with their respective terms and (ii) neither S&P nor ▇▇▇▇▇'▇
shall have in effect a Public Debt Rating, the Applicable Margin and the
Applicable Facility Fee Percentage will be set in accordance with Level 3
under the definition of "Applicable Margin" and "Applicable Facility Fee
Percentage" as the case may be; (c) if neither S&P nor ▇▇▇▇▇'▇ shall have
in effect a Public Debt Rating (other than under the circumstances
described in clause (b) above), the Applicable Margin and the Applicable
Facility Fee Percentage shall be set in accordance with the level which is
three rating levels below the Parent's S&P financial strength rating at
such time, provided that, in the event that the Parent's S&P financial
strength rating is affirmed at (i) A+, the applicable Level will be Level 2
and (ii) A+ and on credit watch/review with negative implications, the
applicable Level will be Level 3; (d) if any rating established by S&P or
▇▇▇▇▇'▇ shall be changed, such change shall be effective as of the date on
which such change is first announced publicly by the rating agency making
such change; and (e) if S&P or ▇▇▇▇▇'▇ shall change the basis on which
ratings are established, each reference to the Public
19
Debt Rating announced by S&P or ▇▇▇▇▇'▇, as the case may be, shall refer to
the then equivalent rating by S&P or ▇▇▇▇▇'▇, as the case may be.
"Purchase Agreement" means the Purchase Agreement dated as of January
11, 1999 among the Seller, Cigna Holdings, Inc. and the Parent.
"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 Lenders" means, at any time, Lenders owed or holding at
least a majority in interest of the sum of (a) aggregate principal amount
of the Committed Advances outstanding at such time and (b) the aggregate
Available Amount of all Letters of Credit outstanding at such time, or, if
no such principal amount and no Letters of Credit are outstanding at such
time, Lenders holding at least a majority in interest of the aggregate of
the WC Commitments; provided, however, that if any Lender shall be a
Defaulting Lender at such time, there shall be excluded from the
determination of Required Lenders at such time (A) the aggregate principal
amount of the Committed Advances owing to such Lender (in its capacity as a
Lender) and outstanding at such time, (B) such Lender's Pro Rata Share of
the aggregate Available Amount of all Letters of Credit outstanding at such
time and (C) the Unused WC Commitment of such Lender at such time.
"Responsible Officer" means the Chairman, Chief Executive Officer,
President, Chief Financial Officer, Treasurer or Chief Investment Officer
of the Parent.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Seller" means Cigna Corporation.
"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
20
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.
"SPC" has the meaning specified in Section 9.07(l).
"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.
"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.
"Syndication Agent" has the meaning specified in the recital of
parties to this Agreement.
"Taxes" has the meaning specified in Section 2.13(a).
"Tempest" has the meaning specified in the recital of parties to this
Agreement.
"Termination Date" means the earlier of June 10, 2004 and the date of
termination in whole of the WC Commitments and the Letter of Credit
Commitment.
"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 and (without
duplication) Debentures.
"Type" refers to the distinction between Advances bearing interest at
the Base Rate and Advances bearing interest at the Eurodollar Rate.
"Unused WC Commitment" means, with respect to any Lender at any time,
(a) such Lender's WC Commitment at such time minus (b) the sum of (i) the
aggregate principal amount of all Committed Advances made by such Lender
hereunder plus (ii) such Lender's Pro Rata Share of (A) the aggregate
Available Amount of all Letters of Credit hereunder and (B) the
21
aggregate principal amount of all Letter of Credit Advances made by the
Issuing Bank pursuant to Section 2.04(c) and outstanding at such time
(whether held by the Issuing Bank or the Lenders) and (C) the aggregate
principal amount of all Competitive Bid Advances hereunder.
"Voting Interests" means shares of capital stock issued by a
corporation, or equivalent Equity Interests in any other Person, the
holders of which are ordinarily, in the absence of contingencies, entitled
to vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been suspended
by the happening of such a contingency.
"WC Commitment" means, with respect to any Lender at any time, the
amount set forth opposite such Lender's name on Schedule I hereto under the
caption "WC Commitment" or, if such Lender has entered into one or more
Assignment and Acceptances, set forth for such Lender in the Register
maintained by the Administrative Agent pursuant to Section 9.07(d) as such
Lender's "WC Commitment", as such amount may be reduced at or prior to such
time pursuant to Section 2.06.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of any Loan Party or in respect of
which any Loan Party could have liability.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle
E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods; Other Definitional
Provisions. In this Agreement and the other Loan Documents in the computation of
periods of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding". References in the Loan Documents to any agreement or contract "as
amended" shall mean and be a reference to such agreement or contract as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with its terms.
SECTION 1.03. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time
("GAAP"), applied on a basis consistent (except for changes concurred in by the
Parent's independent public accountants) with the most recent audited
consolidated financial statements of the Parent and its Subsidiaries delivered
to the Lenders; provided that, if the Parent notifies the Administrative Agent
that the Parent wishes to amend any covenant in Article V to eliminate the
effect of any change in generally accepted accounting principles on the
operation of such covenant (or if the Administrative Agent notifies the Parent
that the Required Lenders wish to amend Article V for such purpose), then the
Parent's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles became effective
(and, concurrently with the delivery of any financial statements required to be
delivered hereunder, the Parent shall provide a statement of reconciliation
conforming such financial information
22
to such generally accepted accounting principles as previously in effect), until
either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Parent and the Required Lenders.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Committed Advances and the Letters of Credit. (a)
The Committed Advances. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make advances (each a "Committed Advance")
to any Borrower from time to time on any Business Day during the period from the
date hereof until the Termination Date in an amount for each such Committed
Advance not to exceed such Lender's Unused WC Commitment at such time. Each
Committed Borrowing shall be in an aggregate amount of $10,000,000 or an
integral multiple of $1,000,000 in excess thereof and shall consist of Committed
Advances made simultaneously by the Lenders ratably according to their WC
Commitments. Within the limits of each Lender's Unused WC Commitment in effect
from time to time, the Borrower may borrow under this Section 2.01, prepay
pursuant to Section 2.07 and reborrow under this Section 2.01.
(b) Letters of Credit. The Issuing Bank agrees, on the terms and
subject to the conditions herein set forth, to issue letters of credit (the
"Letters of Credit") for the account of any Borrower on any Letter of Credit
Business Day from time to time during the period from the date hereof until May
1, 2004. The Issuing Bank shall have no obligation to issue, and no Borrower
will request the issuance of, any Letter of Credit hereunder if, at the time of
issuance of such Letter of Credit and after giving effect thereto, the Letter of
Credit Exposure would exceed the Issuing Bank's Letter of Credit Commitment. The
Issuing Bank shall have no obligation to issue, and no Borrower shall request
the issuance of, any Letter of Credit hereunder if the Available Amount of such
Letter of Credit exceeds, immediately before the time of such issuance, an
amount equal to the total Unused WC Commitments of the Lenders at such time (as
such amount shall be advised by the Administrative Agent to the Issuing Bank as
contemplated by Section 2.04). The Issuing Bank shall have no obligation to
issue, and no Borrower shall request the issuance of, any Letter of Credit
except within the following limitations: (i) each Letter of Credit shall be
denominated in U.S. dollars, (ii) each Letter of Credit shall be payable only
against sight drafts (and not time drafts) and (iii) no Letter of Credit shall
have an expiration date (including all rights of the applicable Borrower or the
beneficiary to require renewal) later than the earlier of June 1, 2004 and one
year after the date of issuance thereof, but a Letter of Credit may by its terms
be automatically renewable annually unless the Issuing Bank notifies the
beneficiary thereof of its election not to renew such Letter of Credit; provided
that the terms of each Letter of Credit that is automatically renewable annually
shall not permit the expiration date (after giving effect to any renewal) of
such Letter of Credit in any event to be extended to a date later than June 1,
2004. 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.
23
SECTION 2.02. Making the Committed Advances. (a) Except as otherwise
provided in Section 2.03, each Committed Borrowing shall be made on notice,
given not later than 11:00 A.M. (New York City time) on the third Business Day
prior to the date of the proposed Committed Borrowing in the case of a Committed
Borrowing consisting of Eurodollar Rate Advances, or the first Business Day
prior to the date of the proposed Committed Borrowing in the case of a Committed
Borrowing consisting of Base Rate Advances, by any Borrower to the
Administrative Agent, which shall give to each Lender prompt notice thereof by
telecopier. Each such notice of a Committed Borrowing (a "Notice of Committed
Borrowing") shall be by telephone, confirmed immediately in writing, or
telecopier, in substantially the form of Exhibit B-1 hereto, specifying therein
the requested (i) date of such Committed Borrowing, (ii) Type of Advances
comprising such Committed Borrowing, (iii) aggregate amount of such Committed
Borrowing and (iv) in the case of a Committed Borrowing consisting of Eurodollar
Rate Advances, initial Interest Period for such Committed Advances. Each Lender
shall, before 11:00 A.M. (New York City time) on the date of such Committed
Borrowing, make available for the account of its Applicable Lending Office to
the Administrative Agent at the Administrative Agent's Account, in same day
funds, such Lender's ratable portion of such Committed Borrowing in accordance
with the respective WC Commitments of such Lender and the other Lenders. After
the Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Borrower requesting such Committed Borrowing by
crediting the applicable Borrower's Account.
(b) Anything in subsection (a) above to the contrary notwithstanding,
(i) no Borrower may select Eurodollar Rate Advances if the obligation of the
Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to
Section 2.10 or 2.11 and (ii) the Committed Advances may not be outstanding as
part of more than ten(10) separate Committed Borrowings.
(c) Each Notice of Committed Borrowing shall be irrevocable and
binding on the Borrower that requested such Committed Borrowing. In the case of
any Committed Borrowing that the related Notice of Committed Borrowing specifies
is to be comprised of Eurodollar Rate Advances, the Borrower that requested such
Committed Borrowing shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill on or
before the date specified in such Notice of Committed Borrowing for such
Committed Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss (excluding loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Committed Advance to
be made by such Lender as part of such Committed Borrowing when such Committed
Advance, as a result of such failure, is not made on such date.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Committed Borrowing that such Lender will not
make available to the Administrative Agent such Lender's ratable portion of such
Committed Borrowing, the Administrative Agent may assume that such Lender has
made such portion available to the Administrative Agent on the date of such
Committed Borrowing in accordance with subsection (a) of this Section 2.02 and
the Administrative Agent may, in reliance upon such assumption, make available
to the Borrower requesting such Committed Borrowing on such date a corresponding
amount. If and to the extent that such Lender shall not have so made such
ratable portion available to the Administrative Agent, such Lender and such
Borrower severally agree to repay or pay to the Administrative Agent forthwith
on demand such
24
corresponding amount and to pay interest thereon, for each day from the date
such amount is made available to such Borrower until the date such amount is
repaid or paid to the Administrative Agent, at (i) in the case of such Borrower,
the interest rate applicable at such time under Section 2.08 to Advances
comprising such Committed Borrowing and (ii) in the case of such Lender, the
Federal Funds Rate. If such Lender shall pay to the Administrative Agent such
corresponding amount, such amount so paid shall constitute such Lender's
Committed Advance as part of such Borrowing for all purposes.
(e) The failure of any Lender to make the Committed Advance to be made
by it as part of any Committed Borrowing shall not relieve any other Lender of
its obligation, if any, hereunder to make its Committed Advance on the date of
such Committed Borrowing, but no Lender shall be responsible for the failure of
any other Lender to make the Committed Advance to be made by such other Lender
on the date of any Committed Borrowing.
SECTION 2.03. The Competitive Bid Advances. (a) Each Lender severally
agrees that any Borrower may make Competitive Bid Borrowings under this Section
2.03 from time to time on any Business Day during the period from the date
hereof until the date occurring 7 days prior to the Termination Date in the
manner set forth below; provided that, following the making of each Competitive
Bid Borrowing, the aggregate amount of the Advances then outstanding plus the
then Available Amount of all Letters of Credit shall not exceed the aggregate
amount of the WC Commitments of the Lenders.
(i) Any Borrower may request a Competitive Bid Borrowing under this
Section 2.03 by delivering to the Administrative Agent, by telecopier, a
notice of a Competitive Bid Borrowing (a "Notice of Competitive Bid
Borrowing"), in substantially the form of Exhibit B-2 hereto, specifying
therein the requested (v) date of such proposed Competitive Bid Borrowing,
(w) aggregate amount of such proposed Competitive Bid Borrowing, (x) in the
case of a Competitive Bid Borrowing consisting of LIBO Rate Advances,
Interest Period, or in the case of a Competitive Bid Borrowing consisting
of Fixed Rate Advances, maturity date for repayment of each Fixed Rate
Advance to be made as part of such Competitive Bid Borrowing (which
maturity date may not be earlier than the date occurring 7 days after the
date of such Competitive Bid Borrowing or later than the earlier of (I) 180
days after the date of such Competitive Bid Borrowing and (II) the
Termination Date), (y) interest payment date or dates relating thereto, and
(z) other terms (if any) to be applicable to such Competitive Bid
Borrowing, not later than 10:00 A.M. (New York City time) (A) at least one
Business Day prior to the date of the proposed Competitive Bid Borrowing,
if such Borrower shall specify in the Notice of Competitive Bid Borrowing
that the rates of interest to be offered by the Lenders shall be fixed
rates per annum (the Advances comprising any such Competitive Bid Borrowing
being referred to herein as "Fixed Rate Advances") and (B) at least four
Business Days prior to the date of the proposed Competitive Bid Borrowing,
if such Borrower shall instead specify in the Notice of Competitive Bid
Borrowing that the rates of interest to be offered by the Lenders are to be
based on a margin above or below the LIBO Rate (the Advances comprising
such Competitive Bid Borrowing being referred to herein as "LIBO Rate
Advances"). Each Notice of Competitive Bid Borrowing shall be irrevocable
and binding on such Borrower. The Administrative Agent shall in turn
promptly notify each Lender of each request for a Competitive Bid Borrowing
received
25
by it from such Borrower by sending such Lender a copy of the related
Notice of Competitive Bid Borrowing.
(ii) Each Lender may, if, in its sole discretion, it elects to do so,
irrevocably offer to make one or more Competitive Bid Advances to the
Borrower requesting the Competitive Bid Advances as part of such proposed
Competitive Bid Borrowing at a rate or rates of interest specified by such
Lender in its sole discretion, by notifying the Administrative Agent (which
shall give prompt notice thereof to the Borrower requesting the Competitive
Bid Borrowing), before 9:30 A.M. (New York City time) on the date of such
proposed Competitive Bid Borrowing, in the case of a Competitive Bid
Borrowing consisting of Fixed Rate Advances and before 10:00 A.M. (New York
City time) three Business Days before the date of such proposed Competitive
Bid Borrowing, in the case of a Competitive Bid Borrowing consisting of
LIBO Rate Advances, of the minimum amount and maximum amount of each
Competitive Bid Advance which such Lender would be willing to make as part
of such proposed Competitive Bid Borrowing (which amounts may, subject to
the proviso to the first sentence of this Section 2.03(a), exceed such
Lender's WC Commitment, if any), the rate or rates of interest therefor and
such Lender's Applicable Lending Office with respect to such Competitive
Bid Advance; provided that if the Administrative Agent in its capacity as a
Lender shall, in its sole discretion, elect to make any such offer, it
shall notify the Borrower requesting such Competitive Bid Borrowing of such
offer at least 30 minutes before the time and on the date on which notice
of such election is to be given to the Administrative Agent by the other
Lenders. If any Lender shall elect not to make such an offer, such Lender
shall so notify the Administrative Agent, before 10:00 A.M. (New York City
time) on the date on which notice of such election is to be given to the
Administrative Agent by the other Lenders, and such Lender shall not be
obligated to, and shall not, make any Competitive Bid Advance as part of
such Competitive Bid Borrowing; provided that the failure by any Lender to
give such notice shall not cause such Lender to be obligated to make any
Competitive Bid Advance as part of such proposed Competitive Bid Borrowing.
(iii) The Borrower requesting any particular Competitive Bid Borrowing
shall, in turn, before 10:30 A.M. (New York City time) on the date of such
proposed Competitive Bid Borrowing, in the case of a Competitive Bid
Borrowing consisting of Fixed Rate Advances and before 11:00 A.M. (New York
City time) three Business Days before the date of such proposed Competitive
Bid Borrowing, in the case of a Competitive Bid Borrowing consisting of
LIBO Rate Advances, either:
(x) cancel such Competitive Bid Borrowing by giving the
Administrative Agent notice to that effect, or
(y) accept one or more of the offers made by any Lender or
Lenders pursuant to paragraph (ii) above, in its sole discretion, by
giving notice to the Administrative Agent of the amount of each
Competitive Bid Advance (which amount shall be equal to or greater
than the minimum amount, and equal to or less than the maximum amount,
notified to such Borrower by the Administrative Agent on behalf of
such Lender for such Competitive Bid Advance pursuant to paragraph
(ii) above) to be
26
made by each such Lender as part of such Competitive Bid Borrowing,
and reject any remaining offers made by Lenders pursuant to paragraph
(ii) above by giving the Administrative Agent notice to that effect.
The Borrower that requested such Competitive Bid Borrowing shall
accept the offers made by any Lender or Lenders to make Competitive
Bid Advances in order of the lowest to the highest rates of interest
offered by such Lenders. If two or more Lenders have offered the same
interest rate, the amount to be borrowed at such interest rate will be
allocated among such Lenders in proportion to the amount that each
such Lender offered at such interest rate.
(iv) If the Borrower that requested any particular Competitive Bid
Borrowing notifies the Administrative Agent that such Competitive Bid
Borrowing is canceled pursuant to paragraph (iii)(x) above, the
Administrative Agent shall give prompt notice thereof to the Lenders and
such Competitive Bid Borrowing shall not be made.
(v) If the Borrower that requested any particular Competitive Bid
Borrowing accepts one or more of the offers made by any Lender or Lenders
pursuant to paragraph (iii)(y) above, the Administrative Agent shall in
turn promptly notify (A) each Lender that has made an offer as described in
paragraph (ii) above, of the date and aggregate amount of such Competitive
Bid Borrowing and whether or not any offer or offers made by such Lender
pursuant to paragraph (ii) above have been accepted by such Borrower, (B)
each Lender that is to make a Competitive Bid Advance as part of such
Competitive Bid Borrowing, of the amount of each Competitive Bid Advance to
be made by such Lender as part of such Competitive Bid Borrowing, and (C)
each Lender that is to make a Competitive Bid Advance as part of such
Competitive Bid Borrowing, upon receipt, that the Administrative Agent has
received forms of documents appearing to fulfill the applicable conditions
set forth in Article III. Each Lender that is to make a Competitive Bid
Advance as part of such Competitive Bid Borrowing shall, before 12:00 noon
(New York City time) on the date of such Competitive Bid Borrowing
specified in the notice received from the Administrative Agent pursuant to
clause (A) of the preceding sentence or any later time when such Lender
shall have received notice from the Administrative Agent pursuant to clause
(C) of the preceding sentence, make available for the account of its
Applicable Lending Office to the Administrative Agent at the Administrative
Agent's Account, in same day funds, such Lender's portion of such
Competitive Bid Borrowing. Upon fulfillment of the applicable conditions
set forth in Article III and after receipt by the Administrative Agent of
such funds, the Administrative Agent will make such funds available to the
Borrower that requested such Borrowing at the Administrative Agent's
address referred to in Section 8.02. Promptly after each Competitive Bid
Borrowing the Administrative Agent will notify each Lender of the amount of
the Competitive Bid Borrowing.
(vi) If the Borrower that requested any particular Competitive Bid
Borrowing notifies the Administrative Agent that it accepts one or more of
the offers made by any Lender or Lenders pursuant to paragraph (iii)(y)
above, such notice of acceptance shall be irrevocable and binding on such
Borrower. Such Borrower shall indemnify each Lender against any loss, cost
or expense incurred by such Lender as a result of any failure to fulfill on
or before the date specified in the related Notice of Competitive Bid
Borrowing for such Competitive Bid Borrowing the applicable conditions set
forth in Article III, including, without limitation, any
27
loss (excluding loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Competitive Bid Advance to be made by
such Lender as part of such Competitive Bid Borrowing when such Competitive
Bid Advance, as a result of such failure, is not made on such date.
(b) Each Competitive Bid Borrowing shall be in an aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof and,
following the making of each Competitive Bid Borrowing, the Borrowers shall be
in compliance with the limitations set forth in the proviso to the first
sentence of subsection (a) above.
(c) Within the limits and on the conditions set forth in this Section
2.03, any Borrower may from time to time borrow under this Section 2.03, repay
or prepay pursuant to subsection (d) below, and reborrow under this Section
2.03, provided that a Competitive Bid Borrowing shall not be made within three
Business Days of the date of any other Competitive Bid Borrowing.
(d) The Borrower to which any particular Competitive Bid Borrowing is
made shall repay to the Administrative Agent for the account of each Lender that
has made a Competitive Bid Advance, on the maturity date of each Competitive Bid
Advance (such maturity date being that specified by such Borrower for repayment
of such Competitive Bid Advance in the related Notice of Competitive Bid
Borrowing delivered pursuant to subsection (a)(i) above, the then unpaid
principal amount of such Competitive Bid Advance. No Borrower shall have any
right to prepay any principal amount of any Competitive Bid Advance unless, and
then only on the terms, specified by such Borrower for such Competitive Bid
Advance in the related Notice of Competitive Bid Borrowing delivered pursuant to
subsection (a)(i) above.
(e) The Borrower to which any particular Competitive Bid Borrowing is
made shall pay interest on the unpaid principal amount of each Competitive Bid
Advance from the date of such Competitive Bid Advance to the date the principal
amount of such Competitive Bid Advance is repaid in full, at the rate of
interest for such Competitive Bid Advance specified by the Lender making such
Competitive Bid Advance in its notice with respect thereto delivered pursuant to
subsection (a)(ii) above, payable on the interest payment date or dates
specified by such Borrower for such Competitive Bid Advance in the related
Notice of Competitive Bid Borrowing delivered pursuant to subsection (a)(i)
above. Upon the occurrence and during the continuance of an Event of Default
under Section 6.01(a) or 6.01(f) or at the request of the Required Lenders
during the existence of any other Event of Default, such Borrower shall pay
interest on the amount of unpaid principal of and interest on each Competitive
Bid Advance owing to a Lender, payable in arrears on the date or dates interest
is payable thereon, at a rate per annum equal at all times to 2% per annum above
the rate per annum otherwise required to be paid on such Competitive Bid
Advance.
(f) The indebtedness of any Borrower resulting from any Competitive
Bid Advance made to such Borrower as part of a Competitive Bid Borrowing shall
be evidenced by the Competitive Bid Note of such Borrower payable to the order
of the Lender making such Competitive Bid Advance.
28
(g) Upon delivery of each Notice of Competitive Bid Borrowing, the
Borrower that requested the applicable Competitive Bid Borrowing shall pay a
non-refundable fee of $1,500 to the Administrative Agent for its own account.
SECTION 2.04. Issuance and Renewals and Drawings, Participations and
Reimbursement with Respect to Letters of Credit. (a) Request for Issuance. A
Borrower may from time to time request, upon at least three Letter of Credit
Business Days' written notice (given not later than 11:00 A.M. New York City
time on the last day permitted therefor), the Issuing Bank to issue or renew
(other than any automatic renewal thereof) a Letter of Credit by:
(i) delivering to the Issuing Bank and the Administrative Agent a
written request to such effect, specifying the date on which such Letter of
Credit is to be issued (which shall be a Letter of Credit Business Day),
the expiration date thereof, the Available Amount thereof, the name and
address of the beneficiary thereof and the form thereof, and
(ii) in the case of the issuance of a Letter of Credit, delivering to
the Issuing Bank a completed agreement and application with respect to such
Letter of Credit as the Issuing Bank may specify for use in connection with
such requested Letter of Credit (a "Letter of Credit Agreement"), together
with such other certificates, documents and other papers as are specified
in such Letter of Credit Agreement.
The Administrative Agent shall, promptly upon receiving such notice, notify the
Lenders of such proposed Letter of Credit (which notice shall specify the
Available Amount and term of such proposed Letter of Credit) or such proposed
renewal of a Letter of Credit (which notice shall specify the term of such
renewal), and shall determine, as of 11:00 A.M. (New York City time) on the
Business Day immediately preceding such proposed issuance, whether such proposed
Letter of Credit complies with the limitations set forth in Section 2.01 hereof.
If such limitations set forth in Section 2.01 are not satisfied or if the
Required Lenders have given notice to the Administrative Agent to cease issuing
or renewing Letters of Credit as contemplated by this Agreement, the
Administrative Agent shall immediately notify the Issuing Bank (in writing or by
telephone immediately confirmed in writing) that the Issuing Bank is not
authorized to issue or renew, as the case may be, such Letter of Credit. If the
Issuing Bank issues or renews a Letter of Credit, it shall deliver the original
of such Letter of Credit to the beneficiary thereof or as the Account Party
shall otherwise direct, and shall promptly notify the Administrative Agent
thereof and furnish a copy thereof to the Administrative Agent.
(b) Request for Extension or Increase. An Account Party may from time
to time request the Issuing Bank to extend the expiration date of an outstanding
Letter of Credit or increase (or, with the consent of the beneficiary, decrease)
the Available Amount of or the amount available to be drawn on such Letter of
Credit. Such extension or increase shall for all purposes hereunder be treated
as though such Account Party had requested issuance of a replacement Letter of
Credit (except only that the Issuing Bank may, if it elects, issue a notice of
extension or increase in lieu of issuing a new Letter of Credit in substitution
for the outstanding Letter of Credit).
(c) Limitations on Issuance, Extension, Renewal and Amendment. As
between the Issuing Bank, on the one hand, and the Agents and the Lenders, on
the other hand, the Issuing Bank shall
29
be justified and fully protected in issuing or renewing a proposed Letter of
Credit unless it shall have received notice from the Administrative Agent as
provided in Section 2.04(a) hereof that it is not authorized to do so (and, in
the case of automatic renewals, ten days shall have passed following the date of
the Issuing Bank's receipt of such notice), notwithstanding any subsequent
notices to the Issuing Bank, any knowledge of a Default, any knowledge of
failure of any condition specified in Article III hereof to be satisfied, any
other knowledge of the Issuing Bank, or any other event, condition or
circumstance whatsoever. The Issuing Bank may amend, modify or supplement
Letters of Credit or Letter of Credit Agreements, or waive compliance with any
condition of issuance, renewal or payment, without the consent of, and without
liability to, any Agent or any Lender, provided that any such amendment,
modification or supplement that extends the expiration date or increases the
Available Amount of or the amount available to be drawn on an outstanding Letter
of Credit shall be subject to Section 2.01.
(d) Letter of Credit Participating Interests. Concurrently with the
issuance of each Letter of Credit, the Issuing Bank automatically shall be
deemed, irrevocably and unconditionally, to have sold, assigned, transferred and
conveyed to each other Lender, and each other Lender automatically shall be
deemed, irrevocably and unconditionally, severally to have purchased, acquired,
accepted and assumed from the Issuing Bank, without recourse to, or
representation or warranty by, the Issuing Bank, an undivided interest, in a
proportion equal to such Lender's Pro Rata Share, in all of the Issuing Bank's
rights and obligations in, to or under such Letter of Credit, the related Letter
of Credit Agreement, all reimbursement obligations with respect to such Letter
of Credit, and all collateral, guarantees and other rights from time to time
directly or indirectly securing the foregoing (such interest of each Lender
being referred to herein as a "Letter of Credit Participating Interest", it
being understood that the Letter of Credit Participating Interest of the Issuing
Bank is the interest not otherwise attributable to the Letter of Credit
Participating Interests of the other Lenders). Each Lender irrevocably and
unconditionally agrees to the immediately preceding sentence, such agreement
being herein referred to as such Bank's "Letter of Credit Participating Interest
Commitment". Amounts, other than Letter of Credit Advances made by a Lender
other than the Issuing Bank and other than Letter of Credit commissions under
Section 2.09(d)(i), payable from time to time under or in connection with a
Letter of Credit or Letter of Credit Agreement shall be for the sole account of
the Issuing Bank. On the date that any assignee becomes a party to this
Agreement in accordance with Section 9.07 hereof, Letter of Credit Participating
Interests in all outstanding Letters of Credit held by the Lender from which
such assignee acquired its interest hereunder shall be proportionately
reallocated between such assignee and such assignor Lender (and, to the extent
such assignor Lender is the Issuing Bank, the assignee 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 Lender hereby
agrees that its obligation to participate in each Letter of Credit, its
obligation to make the payments specified in Section 2.04(e), and the right of
the Issuing Bank to receive such payments in the manner specified therein, are
each absolute, irrevocable and unconditional and shall not be affected by any
event, condition or circumstance whatever. The failure of any Lender to make any
such payment shall not relieve any other Lender of its funding obligation
hereunder on the date due, but no Lender shall be responsible for the failure of
any other Lender to meet its funding obligations hereunder.
(e) Payment by Lenders on Account of Unreimbursed Draws. If the
Issuing Bank makes a payment under any Letter of Credit and is not reimbursed in
full therefor on such payment date
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in accordance with Section 2.05(b), the Issuing Bank may notify the
Administrative Agent thereof (which notice may be by telephone), and the
Administrative Agent shall forthwith notify each Lender (which notice may be by
telephone promptly confirmed in writing) thereof. No later than the
Administrative Agent's close of business on the date such notice is given (if
notice is given by 2:00 P.M. New York City time) or 10:00 A.M. New York City
time the following day (if notice is given after 2:00 P.M. New York City time or
in the case of any Lender whose Applicable Lending Office is located in Europe),
each Lender will pay to the Administrative Agent, for the account of the Issuing
Bank, in immediately available funds, an amount equal to such Lender's Pro Rata
Share of the unreimbursed portion of such payment by the Issuing Bank. Amounts
received by the Administrative Agent for the account of the Issuing Bank shall
be forthwith transferred, in immediately available funds, to the Issuing Bank.
If and to the extent that any Lender fails to make such payment to the
Administrative Agent for the account of the Issuing Bank on such date, such
Lender shall pay such amount on demand, together with interest, for the Issuing
Bank's own account, for each day from and including the date of the Issuing
Bank's payment to but not including the date of repayment to the Issuing Bank
(before and after judgment) at a rate per annum for each day (i) from and
including the date of such payment by the Issuing Bank to and including the
second Business Day thereafter equal to the Federal Funds Rate and (ii)
thereafter equal to the Base Rate.
(f) Letter of Credit Advances. The term "Letter of Credit Advance" is
used in this Agreement in accordance with the meanings set forth in this
paragraph 2.04(f). The making of any payment by the Issuing Bank under a Letter
of Credit is sometimes referred to herein as the making of a Letter of Credit
Advance by the Issuing Bank in the amount of such payment. The making of any
payment by a Lender for the account of the Issuing Bank under Section 2.04(e) on
account of an unreimbursed drawing on a Letter of Credit is sometimes referred
to herein as the making of a Letter of Credit Advance to the applicable Borrower
by such Lender. The making of such a Letter of Credit Advance by a Lender with
respect to an unreimbursed drawing on a Letter of Credit shall reduce, by a like
amount, the outstanding Letter of Credit Advance of the Issuing Bank with
respect to such unreimbursed drawing.
(g) Letter of Credit Reports. The Issuing Bank will furnish to the
Administrative Agent prompt written notice of each issuance of a Letter of
Credit (including the Available Amount and expiration date thereof), amendment
to a Letter of Credit, cancellation of a Letter of Credit and payment on a
Letter of Credit. The Administrative Agent will furnish (A) to each Lender
prior to the tenth Business Day of each month a written report summarizing
issuance and expiration dates of Letters of Credit issued during the preceding
month and payments and reductions in Available Amount during such month on all
Letters of Credit and (B) to each Lender prior to the tenth Business Day of each
calendar quarter a written report setting forth the average daily aggregate
Available Amount during the preceding calendar quarter of all Letters of Credit.
SECTION 2.05. Repayment of Advances. (a) Committed Advances. Each
Borrower shall repay to the Administrative Agent for the ratable account of the
Lenders on the Termination Date the aggregate outstanding principal amount of
the Committed Advances then outstanding.
(b) Account Party's Reimbursement Obligation. (i) Each Account Party
hereby agrees to reimburse the Issuing Bank (by making payment to the
Administrative Agent for the account of
31
the Issuing Bank in accordance with Section 2.12) in the amount of each payment
made by the Issuing Bank under any Letter of Credit issued for such Account
Party's account, such reimbursement to be made on the date such payment under
such Letter of Credit is made by the Issuing Bank (but not earlier than the date
which is one Business Day after notice of such payment under such Letter of
Credit or of the drawing giving rise to such payment under such Letter of Credit
is given to such Account Party). Such reimbursement obligation shall be payable
without further notice, protest or demand, all of which are hereby waived, and
an action therefor shall immediately accrue. To the extent such payment by such
Account Party is not timely made, such Account Party hereby agrees to pay to the
Administrative Agent, for the respective accounts of the Issuing Bank and the
Lenders which have funded their respective shares of such amount remaining
unpaid by such Account Party, on demand, interest thereon at the rate then
applicable to Base Rate Advances under Section 2.08. Each Letter of Credit
Advance shall be a Base Rate Advance.
(ii) The obligation of each Account Party to reimburse the Issuing
Bank for any payment made by the Issuing Bank under any Letter of Credit,
and the obligation of each Lender under Section 2.04(e) with respect
thereto, shall be unconditional and irrevocable, and shall be paid strictly
in accordance with the terms of this Agreement, the applicable Letter of
Credit Agreement and any other applicable agreement or instrument under all
circumstances, including, without limitation, the following circumstances:
(A) any lack of validity or enforceability of any Loan Document, any
Letter of Credit Agreement, any Letter of Credit or any other agreement or
instrument relating thereto (all of the foregoing being, collectively, the
"L/C Related Documents");
(B) any change in the time, manner or place of payment of, or in any
other term of, all or any of the obligations of any Borrower or any other
Person in respect of any L/C Related Document or any other amendment or
waiver of or any consent to departure from all or any of the L/C Related
Documents;
(C) the existence of any claim, set-off, defense or other right that
any Borrower or any other Person may have at any time against any
beneficiary or any transferee of a Letter of Credit (or any Persons for
which any such beneficiary or any such transferee may be acting), the
Issuing Bank or any other Person, whether in connection with the
transactions contemplated by the L/C Related Documents or any unrelated
transaction;
(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
32
all or any of the obligations of any Borrower or any other Person in
respect of the L/C Related Documents; or
(G) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, any Borrower or a guarantor.
(c) Rescission. If any amount received by the Issuing Bank on account
of any Letter of Credit Advance shall be avoided, rescinded or otherwise
returned or paid over by the Issuing Bank for any reason at any time, whether
before or after the termination of this Agreement (or the Issuing Bank believes
in good faith that such avoidance, rescission, return or payment is required,
whether or not such matter has been adjudicated), each Lender will (except to
the extent a corresponding amount received by such Lender on account of its
Letter of Credit Advance relating to the same payment on a Letter of Credit has
been avoided, rescinded or otherwise returned or paid over by such Lender),
promptly upon notice from the Administrative Agent or the Issuing Bank, pay over
to the Administrative Agent for the account of the Issuing Bank its Pro Rata
Share of such amount, together with its Pro Rata Share of any interest or
penalties payable with respect thereto.
SECTION 2.06. Termination or Reduction of the WC Commitments. The
Parent may, upon at least three Business Days' notice to the Administrative
Agent, terminate in whole or reduce in part the unused portion of the WC
Commitments; provided, however, that each partial reduction (i) shall be in an
aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in excess
thereof and (ii) shall be made ratably among the Lenders in accordance with
their WC Commitments.
SECTION 2.07. Prepayments. Each Borrower may, upon at least one
Business Day's notice in the case of Base Rate Advances and three Business Days'
notice in the case of Eurodollar Rate Advances, in each case to the
Administrative Agent stating the proposed date and aggregate principal amount of
the prepayment, and if such notice is given such Borrower shall, prepay the
outstanding aggregate principal amount of the Committed Advances comprising part
of the same Committed Borrowing in whole or ratably in part, together with
accrued interest to the date of such prepayment on the aggregate principal
amount prepaid; provided, however, that (x) each partial prepayment shall be in
an aggregate principal amount of $10,000,000 or an integral multiple of
$1,000,000 in excess thereof (except that prepayment of any Letter of Credit
Advance may be made in any amount so long as such Letter of Credit Advance is
paid in full or, after giving effect to such prepayment, the aggregate principal
amount of all Letter of Credit Advances is an integral multiple of $1,000,000)
and (y) if any prepayment of a Eurodollar Rate Advance is made on a date other
than the last day of an Interest Period for such Committed Advance, such
Borrower shall also pay any amounts owing pursuant to Section 9.04(c). All
prepayments in respect of Eurodollar Rate Advances shall be made together with
accrued interest to the date of such prepayment on the principal amount prepaid.
SECTION 2.08. Interest. (a) Scheduled Interest. Each Borrower
shall pay interest on the unpaid principal amount of each Advance owing to each
Lender from the date of such Advance until such principal amount shall be paid
in full, at the following rates per annum:
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(i) Base Rate Advances. During such periods as such Advance is a Base
Rate Advance, a rate per annum equal at all times to the sum of (A) the
Base Rate in effect from time to time plus (B) the Applicable Margin in
effect from time to time, payable in arrears quarterly on the last day of
each March, June, September and December during such periods and on the
Termination Date.
(ii) Eurodollar Rate Advances. During such periods as such Advance is
a Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (A) the Eurodollar Rate for
such Interest Period for such Advance plus (B) the Applicable Margin in
effect from time to time, payable in arrears on the last day of such
Interest Period and, if such Interest Period has a duration of more than
three months, on each day that occurs during such Interest Period every
three months from the first day of such Interest Period and on the date
such Eurodollar Rate Advance shall be Converted or paid in full.
(iii) Regulation D Compensation. Each Lender that is subject to
reserve requirements of the Board of Governors of the Federal Reserve
System (or any successor) may require any Borrower to pay,
contemporaneously with each payment of interest on Eurodollar Rate
Advances, additional interest on the related Eurodollar Rate Advances of
such Lender at the rate per annum equal to the excess of (i)(A) the
applicable Eurodollar Rate, divided by (B) one minus the Eurodollar Rate
Reserve Requirement over (ii) the rate specified in clause (i)(A). Any
Lender wishing to require payment of such additional interest shall so
notify such Borrower directly, in which case such additional interest on
the Eurodollar Rate Advances of such Lender shall be payable to such Lender
at the place indicated in such notice with respect to each Interest Period
commencing after the giving of such notice.
(b) Default Interest. Upon the occurrence and during the existence of
an Event of Default under Section 6.01(a) or 6.01(f) or at the request of the
Required Lenders during the existence of any other Event of Default, each
Borrower shall pay interest on (i) the unpaid principal amount of each Advance
owing to each Lender, payable in arrears on the dates referred to in clause
(a)(i) or (a)(ii) above and at a rate per annum equal at all times to 2% per
annum above the rate per annum required to be paid on such Advance pursuant to
clause (a)(i) or (a)(ii) above and (ii) to the fullest extent permitted by law,
the amount of any interest, fee or other amount payable under the Loan Documents
that is not paid when due, from the date such amount shall be due until such
amount shall be paid in full, payable in arrears on the date such amount shall
be paid in full and on demand, at a rate per annum equal at all times to 2% per
annum above the rate per annum required to be paid, in the case of interest, on
the Type of Advance on which such interest has accrued pursuant to clause (a)(i)
or (a)(ii) above and, in all other cases, on Base Rate Advances pursuant to
clause (a)(i) above.
(c) Notice of Interest Period and Interest Rate. Promptly after
receipt of a Notice of Borrowing pursuant to Section 2.02(a), a notice of
Conversion pursuant to Section 2.10 or a notice of selection of an Interest
Period pursuant to the terms of the definition of "Interest Period", the
Administrative Agent shall give notice to the Borrowers and each Lender of the
applicable Interest Period and the applicable interest rate determined by the
Administrative Agent for purposes of clause (a)(i) or (a)(ii) above.
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SECTION 2.09. Fees. (a) Ticking Fee. In respect of any portion of
the WC Commitments, each Borrower jointly and severally agrees that it shall pay
to the Administrative Agent for the account of the Lenders a ticking fee, from
April 6, 1999 in the case of each Initial Lender and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender
in the case of each other Lender until the date on which such portion of the WC
Commitments is available to be borrowed pursuant to the provisions of Section
3.01, payable in arrears on the Effective Date, thereafter quarterly on the last
day of each March, June, September and December, commencing June 30, 1999, and
on the Termination Date, at the rate of 1/10 of 1% per annum on the average
daily unavailable WC Commitment of each Lender during such quarter; provided,
however, that no ticking fee shall accrue on the WC Commitment of a Defaulting
Lender so long as such Lender shall be a Defaulting Lender and provided further
that no ticking fee shall accrue on the portion of the WC Commitment on which
the facility fee is accruing pursuant to Section 2.09(b).
(b) Facility Fee. Each Borrower jointly and severally agrees to pay
to the Administrative Agent for the account of the Lenders a facility fee, from
the Effective Date in the case of each Initial Lender and from the effective
date specified in the Assignment and Acceptance pursuant to which it became a
Lender in the case of each other Lender until the Termination Date, payable in
arrears quarterly on the last day of each March, June, September and December,
commencing on June 30, 1999, and on the Termination Date, at the rate of the
Applicable Facility Fee Percentage on the average daily available WC Commitment
of each Lender during such quarter; provided, however, that no facility fee
shall accrue on the WC Commitment of a Defaulting Lender so long as such Lender
shall be a Defaulting Lender.
(c) Agents' Fees. Each Borrower jointly and severally agrees that it
shall pay to each Agent for its own account such fees as may from time to time
be agreed between such Borrower and such Agent.
(d) Letter of Credit Fees, Etc. (i) Each Borrower jointly and
severally agrees that it shall pay to the Administrative Agent for the account
of each Lender a commission, payable in arrears quarterly on the last day of
each calendar quarter commencing June 30, 1999, and on the earliest to occur of
the full drawing, expiration, termination or cancellation of any Letter of
Credit and on the Termination Date, on such Lender's Pro Rata Share of the
average daily aggregate Available Amount during such quarter of all Letters of
Credit outstanding from time to time at the rate equal to the then Applicable
Margin
(ii) Each Borrower jointly and severally agrees that it shall pay to
the Issuing Bank, for its own account, such commissions, issuance fees, fronting
fees, transfer fees and other fees and charges in connection with the issuance
or administration of each Letter of Credit as such Borrower and the Issuing Bank
shall agree in a side letter.
SECTION 2.10. Conversion of Advances. (a) Optional. Each Borrower
may on any Business Day, upon notice given to the Administrative Agent not later
than 11:00 A.M. (New York City time) on the third Business Day prior to the date
of the proposed Conversion and subject to the provisions of Section 2.11,
Convert all or any portion of the Committed Advances of one Type comprising the
same Committed Borrowing into Committed Advances of the other Type; provided,
35
however, that any Conversion of Eurodollar Rate Advances into Base Rate Advances
shall be made only on the last day of an Interest Period for such Eurodollar
Rate Advances, any Conversion of Base Rate Advances into Eurodollar Rate
Advances shall be in an amount not less than the minimum amount specified in
Section 2.01, no Conversion of any Committed Advances shall result in more
separate Committed Borrowings than permitted under Section 2.02(b) and each
Conversion of Committed Advances comprising part of the same Borrowing shall be
made ratably among the Lenders in accordance with their respective WC
Commitments. Each such notice of Conversion shall, within the restrictions
specified above, specify (i) the date of such Conversion, (ii) the Advances to
be Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the
duration of the initial Interest Period for such Advances. Each notice of
Conversion shall be irrevocable and binding on such Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Committed Borrowing
shall be reduced, by payment or prepayment or otherwise, to less than
$10,000,000, such Committed Advances shall automatically Convert into Base Rate
Advances at the end of the applicable Interest Period.
(ii) If the Borrowers shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrowers and the Lenders,
whereupon each such Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate Advance.
(iii) Upon the occurrence and during the existence of an Event of
Default under Section 6.01(a) or 6.01(f) or at the request of the Required
Lenders during the existence of any other Event of Default, (x) each Eurodollar
Rate Advance will automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Advance and (y) the obligation of the
Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended.
SECTION 2.11. Increased Costs, Etc. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of, in each case after
the date hereof, any law or regulation or (ii) the compliance with any guideline
or request issued after the date hereof from any central bank or other
governmental authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender of agreeing to make or of making, funding
or maintaining Eurodollar Rate Advances or LIBO Rate Advances or of agreeing to
issue or of issuing or maintaining or participating in Letters of Credit
(excluding, for purposes of this Section 2.11, any such increased costs
resulting from (x) Taxes or Other Taxes (as to which Section 2.13 shall govern)
and (y) changes in the basis of taxation of overall net income or overall gross
income by the United States or by the foreign jurisdiction or state under the
laws of which such Lender is organized or has its Applicable Lending Office or
any political subdivision thereof), then the Borrowers jointly and severally
agree to pay, from time to time, within five days after demand by such Lender
(with a copy of such demand to the Administrative Agent), which demand shall
include a statement of the basis for such demand and a calculation in reasonable
detail of the amount demanded, to the Administrative Agent for the account of
such Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost, submitted
to the Borrowers by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.
36
(b) If, due to either (i) the introduction of or any change in or in
the interpretation of any law or regulation, in each case after the date hereof,
or (ii) the compliance with any guideline or request issued after the date
hereof from any central bank or other governmental authority (whether or not
having the force of law), there shall be any increase in the amount of capital
required or expected to be maintained by any Lender or any corporation
controlling such Lender as a result of or based upon the existence of such
Lender's commitment to lend hereunder and other commitments of such type, then,
within five days after demand by such Lender or such corporation (with a copy of
such demand to the Administrative Agent), which demand shall include a statement
of the basis for such demand and a calculation in reasonable detail of the
amount demanded, the Borrowers jointly and severally agree to pay to the
Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend or to issue or participate in Letters of
Credit hereunder or to the issuance or maintenance of or participation in any
Letters of Credit. A certificate as to such amounts submitted to the Borrowers
by such Lender shall be conclusive and binding for all purposes, absent manifest
error.
(c) If, prior to the first day of any Interest Period with respect to
any Eurodollar Rate Advances, the Required Lenders notify the Administrative
Agent that the Eurodollar Rate for such Interest Period for such Committed
Advances will not adequately reflect the cost to such Lenders of making, funding
or maintaining their Eurodollar Rate Advances for such Interest Period, the
Administrative Agent shall forthwith so notify the Borrower and the Lenders,
whereupon each such Eurodollar Rate Advance will (i) in the case of requested
new Eurodollar Rate Advances, be made as or remain Base Rate Advances or as a
Eurodollar Rate Advance with a different Interest Period as to which the
Required Lenders have not given such a notice and (ii) in the case of existing
Eurodollar Rate Advances, automatically, on the last day of the then existing
Interest Period therefor, Convert into Base Rate Advances or be continued as a
Eurodollar Rate Advance with a different Interest Period as to which the
Required Lenders have not given such notice.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation, in each case after the date hereof, shall make it unlawful, or any
central bank or other governmental authority shall assert that it is unlawful,
for any Lender or its Eurodollar Lending Office to perform its obligations
hereunder to make Eurodollar Rate Advances or LIBO Rate Advances or to continue
to fund or maintain Eurodollar Rate Advances or LIBO Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrowers
through the Administrative Agent, (i) each Eurodollar Rate Advance or LIBO Rate
Advance, as the case may be, of such Lender will automatically, upon such
demand, Convert into a Base Rate Advance or an Advance that bears interest at
the rate set forth in Section 2.08(a)(i), as the case may be, and (ii) the
obligation of such Lender to make Eurodollar Rate Advances or LIBO Rate Advances
or to Convert Committed Advances into Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the Borrowers that such
Lender has determined that the circumstances causing such suspension no longer
exist (it being understood that such Lender shall make and maintain Base Rate
Advances in the amount that would otherwise be made and maintained by such
Lender as Eurodollar Advances absent the circumstances described above).
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(e) Each Lender shall promptly notify the Borrowers and the
Administrative Agent of any event of which it has actual knowledge which will
result in, and will use reasonable commercial efforts available to it (and not,
in such Lender's good faith judgment, otherwise disadvantageous to such Lender)
to mitigate or avoid, (i) any obligation by the Borrowers to pay any amount
pursuant to subsection (a) or (b) above or pursuant to Section 2.13 or (ii) the
occurrence of any circumstances of the nature described in subsection (c) or (d)
above (and, if any Lender has given notice of any event described in clause (i)
or (ii) above and thereafter such event ceases to exist, such Lender shall
promptly so notify the Borrowers and the Administrative Agent). Without
limiting the foregoing, each Lender will designate a different Applicable
Lending Office if such designation will avoid (or reduce the cost to the
Borrowers of) any event described in clause (i) or (ii) of the preceding
sentence and such designation will not, in such Lender's good faith judgment, be
otherwise disadvantageous to such Lender.
(f) Notwithstanding the provisions of subsections (a) and (b) above or
Section 2.13 (and without limiting subsection (e) above), if any Lender fails to
notify the Borrowers of any event or circumstance that will entitle such Lender
to compensation pursuant subsection (a) or (b) above or Section 2.13 within 120
days after such Lender obtains actual knowledge of such event or circumstance,
then such Lender shall not be entitled to compensation, from the Borrowers for
any amount arising prior to the date which is 120 days before the date on which
such Lender notifies the Borrowers of such event or circumstance.
SECTION 2.12. Payments and Computations. (a) The applicable
Borrower shall make each payment hereunder and under the applicable Notes,
irrespective of any right of counterclaim or set-off (except as otherwise
provided in Section 2.16), not later than 11:00 A.M. (New York City time) on the
day when due in U.S. dollars to the Administrative Agent at the Administrative
Agent's Account in same day funds, with payments being received by the
Administrative Agent after such time being deemed to have been received on the
next succeeding Business Day. The Administrative Agent will promptly thereafter
cause like funds to be distributed (i) if such payment by such Borrower is in
respect of principal, interest, ticking fees, facility fees or any other amount
then payable hereunder and under the Notes to more than one Lender, to such
Lenders for the account of their respective Applicable Lending Offices ratably
in accordance with the amounts of such respective amount then payable to such
Lenders and (ii) if such payment by such Borrower is in respect of any amount
then payable hereunder to one Lender, to such Lender for the account of its
Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. 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 and under
the Notes in respect of the interest assigned thereby to the Lender 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.
(b) Each Borrower hereby authorizes each Lender, if an Event of
Default under Section 6.01(a) has occurred and is continuing, to charge from
time to time against any or all of such Borrower's accounts with such Lender any
amount that resulted in such Event of Default.
(c) All computations of interest on Base Rate Advances (and any other
amount payable by reference to the Base Rate) when the Base Rate is determined
by reference to MGT's prime
38
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 or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fee, as the case may be;
provided, however, that, if such extension would cause payment of interest on or
principal of Eurodollar Rate Advances or LIBO Rate Advances to be made in the
next following calendar month, such payment shall be made on the next preceding
Business Day.
(e) Unless the Administrative Agent shall have received notice from
any Borrower required to make any payment prior to the date on which any payment
is due to any Lender hereunder that such Borrower will not make such payment in
full, the Administrative Agent may assume that such Borrower has made such
payment in full to the Administrative Agent on such date and the Administrative
Agent may, in reliance upon such assumption, cause to be distributed to each
such Lender on such due date an amount equal to the amount then due such Lender.
If and to the extent such Borrower shall not have so made such payment in full
to the Administrative Agent, each such Lender shall repay to the Administrative
Agent forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.
SECTION 2.13. Taxes. (a) Any and all payments by any Loan Party
hereunder or under the Notes shall be made, in accordance with Section 2.12,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and each Agent, taxes
that are imposed on its overall net income by the United States and taxes that
are imposed on its overall net income (and franchise taxes imposed in lieu
thereof) by the state or foreign jurisdiction under the laws of which such
Lender or such Agent, as the case may be, is organized or any political
subdivision thereof and, in the case of each Lender, taxes that are imposed on
its overall net income (and franchise taxes imposed in lieu thereof) by the
state or foreign jurisdiction of such Lender's Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities in respect of payments
hereunder or under the Notes being herein referred to as "Taxes"). If any Loan
Party shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder or under any Note to any Lender or any Agent, (i) the sum
payable by such Loan Party shall be increased as may be necessary so that after
such Loan Party and the Administrative Agent have made all required deductions
(including deductions applicable to additional sums payable under this Section
2.13) such Lender or such Agent, as the case may be, receives an amount equal to
the sum it would have received had no such deductions been made, (ii) such Loan
Party shall make all such deductions and (iii) such Loan Party shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
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(b) In addition, each Loan Party shall pay any present or future
stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performance under, or otherwise with respect to,
this Agreement or the Notes (herein referred to as "Other Taxes").
(c) Each Loan Party shall indemnify each Lender and each Agent for and
hold them harmless against the full amount of Taxes and Other Taxes, and for the
full amount of taxes of any kind imposed by any jurisdiction on amounts payable
under this Section 2.13, imposed on or paid by such Lender or such Agent (as the
case may be) and any liability (including penalties, additions to tax, interest
and expenses) arising therefrom or with respect thereto. This indemnification
payment shall be made within 30 days from the date such Lender or such Agent (as
the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, each Loan
Party shall furnish to the Administrative Agent, at its address referred to in
Section 9.02, the original or a certified copy of a receipt evidencing such
payment. In the case of any payment hereunder or under the Notes by or on
behalf of a Loan Party through an account or branch outside the United States or
by or on behalf of a Loan Party by a payor that is not a United States person,
if such Loan Party determines that no Taxes are payable in respect thereof, such
Loan Party shall furnish, or shall cause such payor to furnish, to the
Administrative Agent, at such address, an opinion of counsel acceptable to the
Administrative Agent stating that such payment is exempt from Taxes. For
purposes of subsections (d) and (e) of this Section 2.13, the terms "United
States" and "United States person" shall have the meanings specified in Section
7701(a)(9) and 7701(a)(10) of the Internal Revenue Code, respectively.
(e) Each Lender organized under the laws of a jurisdiction outside the
United States shall, on or prior to the date of its execution and delivery of
this Agreement in the case of each Initial Lender or the initial Issuing Bank,
as the case may be, and on the date of the Assignment and Acceptance pursuant to
which it becomes a Lender in the case of each other Lender, and from time to
time thereafter as requested in writing by the Parent (but only so long
thereafter as such Lender remains lawfully able to do so), provide each of the
]Administrative Agent and the Parent with two original Internal Revenue Service
forms W-8BEN (or if delivered on or before December 31, 1999, form 1001) or
W-8ECI (or if delivered on or before December 31, 1999, form 4224) or (in the
case of a Lender that has certified in writing to the Administrative Agent that
it is not a "bank" as defined in Section 881(c)(3)(A) of the Internal Revenue
Code) form W-8 (and, if such Lender delivers a form W-8, a certificate
representing that such Lender is not a "bank" for purposes of Section
881(c)(3)(A) of the Internal Revenue Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the
Parent and is not a controlled foreign corporation related to the Parent (within
the meaning of Section 864(d)(4) of the Internal Revenue Code)), as appropriate,
or any successor or other form prescribed by the Internal Revenue Service,
certifying that such Lender is exempt from or entitled to a reduced rate of
United States withholding tax on payments pursuant to this Agreement or the
Notes or, in the case of a Lender providing a form W-8, certifying that such
Lender is a foreign corporation, partnership, estate or trust. If the forms
provided by a Lender at the time such Lender first becomes a party to this
Agreement indicate a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from Taxes
unless and until such Lender provides the appropriate forms certifying that a
lesser rate applies, whereupon withholding tax at such
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lesser rate only shall be considered excluded from Taxes for periods governed by
such forms; provided, however, that if, at the effective date of the Assignment
and Acceptance pursuant to which a Lender becomes a party to this Agreement, the
Lender assignor was entitled to payments under subsection (a) of this Section
2.13 in respect of United States withholding tax with respect to interest paid
at such date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) United States withholding tax, if any, applicable with
respect to the Lender assignee on such date. If any form or document referred to
in this subsection (e) requires the disclosure of information, other than
information necessary to compute the tax payable and information required on the
date hereof by Internal Revenue Service form W-8BEN, 1001, W-8ECI, 4224 or W-8
(and the related certificate described above), that the Lender reasonably
considers to be confidential, the Lender shall give notice thereof to the Parent
and shall not be obligated to include in such form or document such confidential
information.
(f) For any period with respect to which a Lender which may lawfully
do so has failed to provide the Parent with the appropriate form described in
subsection (e) above (other than if such failure is due to a change in law
occurring after the date on which a form originally was required to be provided
or if such form otherwise is not required under subsection (e) above), such
Lender shall not be entitled to indemnification under subsection (a) or (c) of
this Section 2.13 with respect to Taxes imposed by the United States by reason
of such failure; provided, however, that should a Lender become subject to Taxes
because of its failure to deliver a form required hereunder, the Parent shall
take such steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
(g) Each Lender represents and warrants to the Borrowers that, as of
the date such Lender becomes a party to this Agreement, such Lender is entitled
to receive payments hereunder from the Borrowers without deduction or
withholding for or on account of any Taxes.
SECTION 2.14. Sharing of Payments, Etc. If any Lender shall obtain at
any time any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise, other than as a result of an assignment
pursuant to Section 9.07) (a) on account of obligations due and payable to such
Lender hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such obligations due and
payable to such Lender at such time to (ii) the aggregate amount of the
obligations due and payable to all Lenders hereunder and under the Notes at such
time) of payments on account of the obligations due and payable to all Lenders
hereunder and under the Notes at such time obtained by all the Lenders at such
time or (b) on account of obligations owing (but not due and payable) to such
Lender hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such obligations owing to such
Lender at such time to (ii) the aggregate amount of the obligations owing (but
not due and payable) to all Lenders hereunder and under the Notes at such time)
of payments on account of the obligations owing (but not due and payable) to all
Lenders hereunder and under the Notes at such time obtained by all of the
Lenders at such time, such Lender shall forthwith purchase from the other
Lenders such interests or participating interests in the obligations due and
payable or owing to them, as the case may be, as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each other
Lender shall be rescinded and such other Lender shall repay to the purchasing
Lender the purchase price to the extent of such Lender's ratable share
(according
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to the proportion of (i) the purchase price paid to such Lender to (ii) the
aggregate purchase price paid to all Lenders) of such recovery together with an
amount equal to such Lender's ratable share (according to the proportion of (i)
the amount of such other Lender's required repayment to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
Each Borrower agrees that any Lender so purchasing an interest or participating
interest from another Lender pursuant to this Section 2.14 may, to the fullest
extent permitted by law, exercise all its rights of payment (including the right
of set-off) with respect to such interest or participating interest, as the case
may be, as fully as if such Lender were the direct creditor of such Borrower in
the amount of such interest or participating interest, as the case may be.
SECTION 2.15. Use of Proceeds. The proceeds of the Advances shall be
available (and each Borrower agrees that it shall use such proceeds) to provide
working capital, and for other general corporate purposes of the Borrowers and
their respective Subsidiaries.
SECTION 2.16. Defaulting Lenders. (a) In the event that, at any one
time, (i) any Lender shall be a Defaulting Lender, (ii) such Defaulting Lender
shall owe a Defaulted Advance to any Borrower and (iii) such Borrower shall be
required to make any payment hereunder or under any other Loan Document to or
for the account of such Defaulting Lender, then such Borrower may, to the
fullest extent permitted by applicable law, set off and otherwise apply the
obligation of such Borrower to make such payment to or for the account of such
Defaulting Lender against the obligation of such Defaulting Lender to make such
Defaulted Advance. In the event that, on any date, any Borrower shall so set off
and otherwise apply its obligation to make any such payment against the
obligation of such Defaulting Lender to make any such Defaulted Advance on or
prior to such date, the amount so set off and otherwise applied by such Borrower
shall constitute for all purposes of this Agreement and the other Loan Documents
an Advance by such Defaulting Lender made on the date of such setoff. Such
Committed Advance shall be considered, for all purposes of this Agreement, to
comprise part of the Committed Borrowing in connection with which such Defaulted
Advance was originally required to have been made pursuant to Section 2.01, even
if the other Committed Advances comprising such Borrowing shall be Eurodollar
Rate Advances on the date such Committed Advance is deemed to be made pursuant
to this subsection (a). Each Borrower shall notify the Administrative Agent at
any time such Borrower exercises its right of set-off pursuant to this
subsection (a) and shall set forth in such notice (A) the name of the Defaulting
Lender and the Defaulted Advance required to be made by such Defaulting Lender
and (B) the amount set off and otherwise applied in respect of such Defaulted
Advance pursuant to this subsection (a). Any portion of such payment otherwise
required to be made by such Borrower to or for the account of such Defaulting
Lender which is paid by such Borrower, after giving effect to the amount set off
and otherwise applied by such Borrower pursuant to this subsection (a), shall be
applied by the Administrative Agent as specified in subsection (b) or (c) of
this Section 2.16.
(b) In the event that, at any one time, (i) any Lender shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to
any Agent or any of the other Lenders and (iii) any Borrower shall make any
payment hereunder or under any other Loan Document to the Administrative Agent
for the account of such Defaulting Lender, then the Administrative Agent may, on
its behalf or on behalf of such other Agents or such other Lenders and to the
fullest extent permitted by applicable law, apply at such time the amount so
paid by such Borrower to or for the account of such Defaulting Lender to the
payment of each such Defaulted Amount to the extent required to pay such
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Defaulted Amount. In the event that the Administrative Agent shall so apply any
such amount to the payment of any such Defaulted Amount on any date, the amount
so applied by the Administrative Agent shall constitute for all purposes of this
Agreement and the other Loan Documents payment, to such extent, of such
Defaulted Amount on such date. Any such amount so applied by the Administrative
Agent shall be retained by the Administrative Agent or distributed by the
Administrative Agent to such other Agents or such other Lenders, ratably in
accordance with the respective portions of such Defaulted Amounts payable at
such time to the Administrative Agent, such other Agents and such other Lenders
and, if the amount of such payment made by such Borrower shall at such time be
insufficient to pay all Defaulted Amounts owing at such time to the
Administrative Agent, such other Agents and such other Lenders, in the following
order of priority:
(i) first, to the Agents for any Defaulted Amounts then owing to the
Agents, ratably in accordance with such respective Defaulted Amounts then
owing to the Agents;
(ii) second, to the Issuing Bank for any amount then due and payable
to it, in its capacity as such, by such Defaulting Lender, ratably in
accordance with such amounts then due and payable to such Issuing Bank; and
(iii) third, to any other Lenders for any Defaulted Amounts then
owing to such other Lenders, ratably in accordance with such respective
Defaulted Amounts then owing to such other Lenders.
Any portion of such amount paid by such Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.16.
(c) In the event that, at any one time, (i) any Lender shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance
or a Defaulted Amount and (iii) any Borrower, any Agent or any other Lender
shall be required to pay or distribute any amount hereunder or under any other
Loan Document to or for the account of such Defaulting Lender, then such
Borrower or such Agent or such other Lender shall pay such amount to the
Administrative Agent to be held by the Administrative Agent, to the fullest
extent permitted by applicable law, in escrow or the Administrative Agent shall,
to the fullest extent permitted by applicable law, hold in escrow such amount
otherwise held by it. Any funds held by the Administrative Agent in escrow under
this subsection (c) shall be deposited by the Administrative Agent in an account
with MGT, in the name and under the control of the Administrative Agent, but
subject to the provisions of this subsection (c). The terms applicable to such
account, including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be MGT's standard terms
applicable to escrow accounts maintained with it. Any interest credited to such
account from time to time shall be held by the Administrative Agent in escrow
under, and applied by the Administrative Agent from time to time in accordance
with the provisions of, this subsection (c). The Administrative Agent shall, to
the fullest extent permitted by applicable law, apply all funds so held in
escrow from time to time to the extent necessary to make any Advances required
to be made by such Defaulting Lender and to pay any amount payable by such
Defaulting Lender hereunder and under the other Loan Documents to the
Administrative Agent or any other Lender, as and when such Advances or amounts
are required to be made or paid and, if the amount so held in
43
escrow shall at any time be insufficient to make and pay all such Advances and
amounts required to be made or paid at such time, in the following order of
priority:
(i) first, to the Agents for any amounts then due and payable by such
Defaulting Lender to the Agents hereunder, ratably in accordance with such
amounts then due and payable to the Agents;
(ii) second, to the Issuing Bank for any amount then due and payable
to it, in its capacity as such, by such Defaulting Lender, ratably in
accordance with such amounts then due and payable to such Issuing Bank;
(iii) third, to any other Lenders for any amount then due and payable
by such Defaulting Lender to such other Lenders hereunder, ratably in
accordance with such respective amounts then due and payable to such other
Lenders; and
(iv) fourth, to such Borrower for any Advance then required to be made
by such Defaulting Lender pursuant to the Commitment of such Defaulting
Lender.
In the event that any Lender that is a Defaulting Lender shall, at any time,
cease to be a Defaulting Lender, any funds held by the Administrative Agent in
escrow at such time with respect to such Lender shall be distributed by the
Administrative Agent to such Lender and applied by such Lender to the
obligations owing to such Lender at such time under this Agreement and the other
Loan Documents ratably in accordance with the respective amounts of such
obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under this
Section 2.16 are in addition to other rights and remedies that such Borrower may
have against such Defaulting Lender with respect to any Defaulted Advance and
that any Agent or any Lender may have against such Defaulting Lender with
respect to any Defaulted Amount.
SECTION 2.17. Replacement of Affected Lender. At any time any Lender
is an Affected Lender, the Borrowers may replace such Affected Lender as a party
to this Agreement with one or more other Lenders and/or Eligible Assignees, and
upon notice from the Borrowers such Affected Lender shall assign pursuant to an
Assignment and Acceptance, and without recourse or warranty, its WC Commitment,
its Committed Advances, its Committed Note, its Letter of Credit Advances, its
obligations to fund Letter of Credit payments, its participation in, and its
rights and obligations with respect to, Letters of Credit, and all of its other
rights and obligations hereunder to such other Lenders and/or Eligible Assignees
for a purchase price equal to the sum of the principal amount of the Committed
Advances so assigned, all accrued and unpaid interest thereon, such Affected
Lender's ratable share of all accrued and unpaid fees payable pursuant to
Section 2.09, any amounts payable pursuant to Section 9.04(c) as a result of
such Affected Lender receiving payment of any Eurodollar Rate Advance prior to
the end of an Interest Period therefor (assuming for such purpose that receipt
of payment pursuant to such Assignment and Acceptance constitutes payment of
such Eurodollar Rate Advances) and all other obligations owed to such Affected
Lender hereunder.
SECTION 2.18. Certain Provisions Relating to the Issuing Bank and
Letters of Credit.
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(a) Letter of Credit Agreements. The representations, warranties and
covenants by the Borrowers under, and the rights and remedies of the Issuing
Bank under, any Letter of Credit Agreement relating to any Letter of Credit are
in addition to, and not in limitation or derogation of, representations,
warranties and covenants by the Borrowers under, and rights and remedies of the
Issuing Bank and the Lenders under, this Agreement and applicable law. Each
Account Party acknowledges and agrees that all rights of the Issuing Bank under
any Letter of Credit Agreement shall inure to the benefit of each Lender to the
extent of its Letter of Credit Participating Interest Commitment as fully as if
such Lender was a party to such Letter of Credit Agreement. In the event of any
inconsistency between the terms of this Agreement and any Letter of Credit
Agreement, this Agreement shall prevail.
(b) Certain Provisions. The Issuing Bank shall have no duties or
responsibilities to any Agent or any Lender except those expressly set forth in
this Agreement, and no implied duties or responsibilities on the part of the
Issuing Bank shall be read into this Agreement or shall otherwise exist. The
duties and responsibilities of the Issuing Bank to the Lenders and the Agents
under this Agreement and the other Loan Documents shall be mechanical and
administrative in nature, and the Issuing Bank shall not have a fiduciary
relationship in respect of any Agent, any Lender or any other Person. The
Issuing Bank shall not be liable for any action taken or omitted to be taken by
it under or in connection with this Agreement or any Loan Document or Letter of
Credit, except as specifically set forth in Section 9.09. The Issuing Bank shall
not be under any obligation to ascertain, inquire or give any notice to any
Agent or any Lender relating to (i) the performance or observance of any of the
terms or conditions of this Agreement or any other Loan Document on the part of
any Borrower, (ii) the business, operations, condition (financial or otherwise)
or prospects of the Borrowers or any other Person, or (iii) the existence of any
Default. The Issuing Bank shall not be under any obligation, either initially or
on a continuing basis, to provide any Agent or any Lender with any notices,
reports or information of any nature, whether in its possession presently or
hereafter, except for such notices, reports and other information expressly
required by this Agreement to be so furnished. The Issuing Bank shall not be
responsible for the execution, delivery, effectiveness, enforceability,
genuineness, validity or adequacy of this Agreement or any Loan Document.
(c) Administration. The Issuing Bank may rely upon any notice or other
communication of any nature (written or oral, including but not limited to
telephone conversations, whether or not such notice or other communication is
made in a manner permitted or required by this Agreement or any other Loan
Document) purportedly made by or on behalf of the proper party or parties, and
the Issuing Bank shall not have any duty to verify the identity or authority of
any Person giving such notice or other communication. The Issuing Bank may
consult with legal counsel (including, without limitation, in-house counsel for
the Issuing Bank or in-house or other counsel for the Borrowers), independent
public accountants and any other experts selected by it from time to time, and
the Issuing Bank shall not be liable for any action taken or omitted to be taken
in good faith in accordance with the advice of such counsel, accountants or
experts. Whenever the Issuing Bank shall deem it necessary or desirable that a
matter be proved or established with respect to any Borrower, Agent or Lender,
such matter may be established by a certificate of such Borrower, Agent or
Lender, as the case may be, and the Issuing Bank may conclusively rely upon such
certificate. The Issuing Bank shall not be deemed to have any knowledge or
notice of the occurrence of any Default unless the Issuing Bank has received
45
notice from a Lender, an Agent or a Borrower referring to this Agreement,
describing such Default, and stating that such notice is a "notice of default".
(d) Indemnification of Issuing Bank by Lenders. Each Lender hereby
agrees to reimburse and indemnify the Issuing Bank and each of its directors,
officers, employees and agents (to the extent not reimbursed by the Borrowers
and without limitation of the obligations of the Borrowers to do so), in
accordance with its Pro Rata Share, from and against any and all amounts,
losses, liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature (including,
without limitation, the reasonable fees and disbursements of counsel (other than
in-house counsel) for the Issuing Bank or such other Person in connection with
any investigative, administrative or judicial proceeding commenced or
threatened, whether or not the Issuing Bank or such other Person shall be
designated a party thereto) that may at any time be imposed on, incurred by or
asserted against the Issuing Bank, in its capacity as such, or such other
Person, as a result of, or arising out of, or in any way related to or by reason
of, this Agreement, any other Loan Document or any Letter of Credit, any
transaction from time to time contemplated hereby or thereby, or any transaction
financed in whole or in part or directly or indirectly with the proceeds of any
Letter of Credit, provided, that no Lender shall be liable for any portion of
such amounts, losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements to the extent
resulting from the gross negligence or willful misconduct of the Issuing Bank or
such other Person, as finally determined by a court of competent jurisdiction.
(e) Issuing Bank in its Individual Capacity. With respect to its
Commitments and the obligations owing to it, the Issuing Bank shall have the
same rights and powers under this Agreement and each other Loan Document as any
other Lender and may exercise the same as though it were not the Issuing Bank,
and the term "Lenders" and like terms shall include the Issuing Bank in its
individual capacity as such. The Issuing Bank and its affiliates may, without
liability to account to any Person, make loans to, accept deposits from, acquire
debt or equity interests in, act as trustee under indentures of, act as agent
under other credit facilities for, and engage in any other business with, any
Borrower and any stockholder, subsidiary or affiliate of any Borrower, as though
the Issuing Bank were not the Issuing Bank hereunder.
SECTION 2.19. Downgrade Event with Respect to a Lender. (a) If a
Downgrade Event shall occur with respect to (i) any Downgraded Lender or (ii)
any other Lender and, as a result thereof, such other Lender becomes a
Downgraded Lender, then the Issuing Bank may, by notice to such Downgraded
Lender, the Administrative Agent and the Parent within 45 days after such
Downgrade Event (any such notice, a "Downgrade Notice"), request that the
Borrowers use reasonable efforts to replace such Lender as a party to this
Agreement pursuant to Section 2.17. If such Lender is not so replaced within 45
days after receipt by the Borrowers of such Downgrade Notice, then: (x) if no
Default exists and such Downgraded Lender has not exercised its right to remain
a Lender hereunder pursuant to clause (y) below, the following shall occur
concurrently:
(A) the Committed Facility shall be reduced by the amount of the WC
Commitment of such Downgraded Lender,
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(B) the Borrowers shall prepay all amounts owed to such Downgraded
Lender hereunder or in connection herewith (including any amount payable
pursuant to Section 9.04(c) as a result of such Downgraded Lender receiving
payment of any Eurodollar Rate Advance prior to the end of an Interest
Period therefor),
(C) if, upon the reduction of the Committed Facility under clause (A)
above and the payment under clause (B) above, the sum of the principal
amount of all Advances plus the Available Amount of all Letters of Credit
(valuing the Available Amount of, and Letter of Credit Advances of the
Issuing Bank in respect of, any Non-Dollar Letter of Credit at the Dollar
Equivalent thereof as of the time of such calculation) would exceed the
amount of the Committed Facility, then the Borrowers will immediately
eliminate such excess by prepaying Committed Advances and/or causing the
Available Amount of one or more Letters of Credit to be reduced, and
(D) upon completion of the events described in clauses (A), (B) and
(C) above, such Downgraded Lender shall cease to be a party to this
Agreement;
or (y) if a Default exists or, not later than 30 days after receipt of such
Downgrade Notice, such Downgraded Lender notifies the Borrowers, the Issuing
Bank and the Administrative Agent that such Downgraded Lender elects to provide
(in a manner reasonably satisfactory to the Issuing Bank) cash collateral to the
Issuing Bank for (or if such Downgraded Lender is unable, without regulatory
approval, to provide cash collateral, a letter of credit reasonably satisfactory
to the Issuing Bank covering) its contingent obligations to reimburse the
Issuing Bank for any payment under any Letter of Credit as provided in Section
2.04(e) (its "LC Participation Obligations"), such Downgraded Lender shall be
obligated to (and each Lender agrees that in such circumstances it will) deliver
to the Issuing Bank (I) immediately, cash collateral (or, as aforesaid, a letter
of credit) in an amount equal to its LC Participation Obligations and (II) from
time to time thereafter (so long as it is a Downgraded Lender), cash collateral
(or, as aforesaid, a letter of credit) sufficient to cover any increase in its
LC Participation Obligations as a result of any proposed issuance of or increase
in a Letter of Credit. Any funds provided by a Downgraded Lender for such
purpose shall be maintained in a segregated deposit account in the name of the
Issuing Bank at the Issuing Bank's principal office in the United States (a
"Downgrade Account"). The funds so deposited in any Downgrade Account shall be
used only in accordance with the following provisions of this Section 2.19.
(b) If any Downgraded Lender shall be required to fund its
participation in a payment under a Letter of Credit pursuant to Section 2.04(e),
then the Issuing Bank shall apply the funds deposited in the applicable
Downgrade Account by such Downgraded Lender to fund such participation. The
deposit of funds in a Downgrade Account by any Downgraded Lender shall not
constitute a Letter of Credit Advance (and the Downgraded Lender shall not be
entitled to interest on such funds except as provided in clause (c) below)
unless and until (and then only to the extent that) such funds are used by the
Issuing Bank to fund the participation of such Downgraded Lender pursuant to the
first sentence of this clause (b).
(c) Funds in a Downgrade Account shall be invested in such investments
as may be agreed between the Issuing Bank and the applicable Downgraded Lender,
and the income from such
47
investments shall be distributed to such Downgraded Lender from time to time
(but not less often than monthly) as agreed between the Issuing Bank and such
Downgraded Lender. The Issuing Bank will (i) from time to time, upon request by
a Downgraded Lender, release to such Downgraded Lender any amount on deposit in
the applicable Downgrade Account in excess of the LC Participation Obligations
of such Downgraded Lender and (ii) upon the earliest to occur of (A) the
effective date of any replacement of such Downgraded Lender as a party hereto
pursuant to an Assignment and Acceptance, (B) the termination of such Downgraded
Lender's WC Commitment pursuant to clause (a) or (C) the first Letter of Credit
Business Day after receipt by the Issuing Bank of evidence (reasonably
satisfactory to the Issuing Bank) that such Lender is no longer a Downgraded
Lender, release to such Lender all amounts on deposit in the applicable
Downgrade Account.
(d) At any time any Downgraded Lender is required to maintain cash
collateral with the Issuing Bank pursuant to this Section 2.19, the Issuing Bank
shall have no obligation to issue or increase any Letter of Credit unless such
Downgraded Lender has provided sufficient funds as cash collateral to the
Issuing Bank to cover all LC Participation Obligations of such Downgraded Lender
(including in respect of the Letter of Credit to be issued or increased).
SECTION 2.20. Downgrade Event or Other Event with Respect to the
Issuing Bank. At any time that the Issuing Bank is a Downgraded Lender or at
such other times as the Issuing Bank and the Borrowers may agree, the Borrowers
may, upon not less than three Letter of Credit Business Days' notice to the
Issuing Bank (in this Section sometimes referred to as the "Old Issuing Bank")
and the Administrative Agent, designate any Lender (so long as such Lender has
agreed to such designation) as an additional "Issuing Bank" hereunder (in this
Section sometimes referred to as the "New Issuing Bank"). Such notice shall
specify the date (which shall be a Letter of Credit Business Day) on which the
New Issuing Bank is to become an additional "Issuing Bank" hereunder. From and
after such date, all new Letters of Credit requested to be issued hereunder
shall be issued by the New Issuing Bank. From and after such date (and until the
first date on which no Letters of Credit issued by the Old Issuing Bank are
outstanding and no reimbursement obligations are owed to the Old Issuing Bank,
on which date the Old Issuing Bank shall cease to be an Issuing Bank hereunder),
references in this Agreement to the "Issuing Bank" shall be deemed to refer (a)
to the Old Issuing Bank, with respect to Letters of Credit issued by it, (b) to
the New Issuing Bank, with respect to Letters of Credit issued or to be issued
by it, and (c) to each of the Old Issuing Bank and the New Issuing Bank, with
respect to other matters. Notwithstanding the fact that an Old Issuing Bank
shall cease to be an "Issuing Bank" hereunder, all of the exculpatory,
indemnification and similar provisions hereof in favor of the "Issuing Bank"
shall inure to such Old Issuing Bank's benefit as to any actions taken or
omitted by it while it was an "Issuing Bank" under this Agreement. The Borrowers
agree that after any appointment of a New Issuing Bank hereunder, the Borrowers
shall use reasonable commercial efforts to promptly replace (or otherwise cause
the applicable beneficiary to return to the Old Issuing Bank for cancellation)
each letter of credit issued by the Old Issuing Bank.
SECTION 2.21. Non-Dollar Letters of Credit. (a) The Borrowers, the
Administrative Agent, the Issuing Bank and the Lenders (i) agree that the
Issuing Bank may (in its sole discretion) issue Letters of Credit ("Non-Dollar
Letters of Credit") in currencies other than U.S. dollars and (ii) further agree
as follows with respect to such Non-Dollar Letters of Credit:
48
(b) The Borrowers agree that their reimbursement obligations under
Section 2.05(b) and any resulting Letter of Credit Advance, in each case in
respect of a drawing under any Non-Dollar Letter of Credit, (i) shall be
payable in Dollars at the Dollar Equivalent of such obligation in the
currency in which such Non-Dollar Letter of Credit was issued (determined
on the date of payment) and (ii) shall bear interest at a rate per annum
equal to (A) in the case of amounts owed to the Issuing Bank, the sum of
the Overnight Rate plus the Applicable Margin for Eurodollar Rate Advances
plus 2% and (B) in the case of amounts owing to any other Lender, the Base
Rate plus 2%, in each case for each day from and including the date on
which the applicable Account Party is to reimburse the Issuing Bank
pursuant to Section 2.05(b) to but excluding the date such obligation is
paid in full.
(c) Each Lender agrees that its obligation to pay the Issuing Bank
such Lender's Pro Rata Share of the unreimbursed portion of any payment by
the Issuing Bank under Section 2.04(e) in respect of a drawing under any
Non-Dollar Letter of Credit shall be payable in Dollars at the Dollar
Equivalent of such obligation in the currency in which such Non-Dollar
Letter of Credit was issued (calculated on the date of payment) (and any
such amount which is not paid when due shall bear interest at a rate per
annum equal to the Overnight Rate plus, beginning on the third Business Day
after such amount was due, the Applicable Margin for Eurodollar Rate
Advances).
(d) For purposes of determining whether there is availability for the
Borrowers to request any Advance or to request the issuance or extension
of, or any increase in, any Letter of Credit, the Dollar Equivalent amount
of the Available Amount of each Non-Dollar Letter of Credit shall be
calculated as of the date such Advance is to be made or such Letter of
Credit is to be issued, extended or increased.
(e) For purposes of determining the letter of credit fee under Section
2.09(d), the Dollar Equivalent amount of the Available Amount of any Non-
Dollar Letter of Credit shall be determined on each of (1) the date of an
issuance, extension or change in the Available Amount of such Non-Dollar
Letter of Credit, (2) the date of any payment by the Issuing Bank in
respect of a drawing under such Non-Dollar Letter of Credit, (3) the last
day of each calendar month and (4) each day on which the WC Commitments are
to be reduced pursuant to Section 2.06 (it being understood that no
requested reduction shall be permitted to the extent that, after making a
calculation pursuant this clause (e), such reduction would be greater than
the unused portion of the WC Commitments).
(f) If, on the last day of any calendar month, the sum of the
principal amount of all Advances plus the Available Amount of all Letters
of Credit (valuing the Available Amount of, and Letter of Credit Advances
in respect of, any Non-Dollar Letter of Credit at the Dollar Equivalent
thereof as of such day) would exceed the amount of the Committed Facility,
then the Borrowers will immediately eliminate such excess by prepaying
Committed Advances and/or causing the Available Amount of one or more
Letters of Credit to be reduced.
(g) If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due in respect of any Non-Dollar Letter of
Credit in one currency into another currency,
49
the rate of exchange used shall be that at which in accordance with its
normal banking procedures the Issuing Bank could purchase the first
currency with such other currency on the Letter of Credit Business Day
preceding that on which final judgment is given. The obligation of any
Account Party in respect of any such sum due from it to the Issuing Bank or
any Lender hereunder shall, notwithstanding any judgment in a currency (the
"Judgment Currency") other than that in which such sum is denominated in
accordance with the applicable provisions of this Agreement and the
applicable Non-Dollar Letter of Credit (the "Agreement Currency"), be
discharged only to the extent that on the Letter of Credit Business Day
following receipt by the Issuing Bank or such Lender of any sum adjudged to
be so due in the Judgment Currency, the Issuing Bank or such Lender may in
accordance with normal banking procedures purchase the Agreement Currency
with the Judgment Currency. If the amount of the Agreement Currency so
purchased is less than the sum originally due to the Issuing Bank or such
Lender in the Agreement Currency, the applicable Account Party agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Issuing Bank or such Lender, as applicable, against such loss. If the
amount of the Agreement Currency so purchased is greater than the sum
originally due to the Issuing Bank or such Lender in such currency, the
Issuing Bank and each Lender agrees to return the amount of any excess to
the applicable Account Party (or to any other Person who may be entitled
thereto under applicable law).
(h) For purposes of this Section, "Dollar Equivalent" means, in
relation to an amount denominated in a currency other than U.S. dollars,
the amount of U.S. dollars which could be purchased with such amount by the
Issuing Bank in accordance with its customary procedures (and giving effect
to any transaction costs) at the quoted foreign exchange spot rate of the
Issuing Bank at the time of determination; and "Overnight Rate" means, for
any day, the rate of interest per annum at which overnight deposits in the
applicable currency, in an amount approximately equal to the amount with
respect to which such rate is being determined, would be offered for such
day by the Issuing Bank to major banks in the London or other applicable
offshore interbank market. The Overnight Rate for any day which is not a
Letter of Credit Business Day (or on which dealings are not carried on in
the applicable offshore interbank market) shall be the Overnight Rate for
the immediately preceding Letter of Credit Business Day.
ARTICLE III
CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01. Conditions Precedent to Initial Extension of Credit. The
obligation of each Lender to make a Committed Advance or of the Issuing Bank to
issue a Letter of Credit on the occasion of the Initial Extension of Credit
hereunder is subject to the satisfaction of the following conditions precedent
before or concurrently with the Initial Extension of Credit:
(i) The Administrative Agent shall have received on or before the day
of the Initial Extension of Credit the following, each dated such day
(unless otherwise specified), in form and
50
substance reasonably satisfactory to the Administrative Agent (unless
otherwise specified) and (except for the Committed Notes) in sufficient
copies for each Lender:
(A) The Committed Notes payable to the order of the Lenders.
(B) Certified copies of the resolutions of the Board of Directors
of each Loan Party approving the transactions contemplated by the Loan
Documents and each Loan Document to which it is or is to be a party,
and of all documents evidencing other necessary corporate action and
governmental and other third party approvals and consents, if any,
with transactions contemplated by the Loan Documents and each Loan
Document to which it is or is to be a party.
(C) A copy of a certificate of the Secretary of State or other
appropriate official of the jurisdiction of incorporation of (x) ACE
INA, dated reasonably near the date of the Initial Extension of
Credit, certifying (A) as to a true and correct copy of the charter of
ACE INA and each amendment thereto on file in such Secretary's office
and (B) that (1) such amendments are the only amendments to ACE INA's
charter on file in such Secretary's office, (2) ACE INA has paid all
franchise taxes to the date of such certificate and (C) ACE INA is
duly incorporated and in good standing or presently subsisting under
the laws of the State of the jurisdiction of its incorporation and (y)
each other Loan Party, dated reasonably near the Initial Extension of
Credit, certifying as to the good standing (or existence) of such Loan
Party.
(D) A certificate of each Loan Party, signed on behalf of such
Loan Party by its President or a Vice President and its Secretary or
any Assistant Secretary, dated the date of the Initial Extension of
Credit (the statements made in which certificate shall be true on and
as of the date of the Initial Extension of Credit), certifying as to
(1) in the case of ACE INA, the absence of any amendments to the
charter of such Loan Party since the date of the Secretary of State's
certificate referred to in Section 3.01(a)(i)(C), (2) a true and
correct copy of the bylaws (in the case of ACE INA) or the
constitutional documents (in the case of each Loan Party) 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 date of the Initial
Extension of Credit, (3) the due incorporation and good standing or
valid existence of such Loan Party as a corporation organized under
the laws of the jurisdiction of its incorporation, and the absence of
any proceeding for the dissolution or liquidation of such Loan Party,
(4) the truth of the representations and warranties contained in the
Loan Documents as though made on and as of the date of the Initial
Extension of Credit and (5) the absence of any event occurring and
continuing, or resulting from the Initial Extension of Credit, that
constitutes a Default.
(E) A certificate of the Secretary or an Assistant Secretary of
each Loan Party certifying the names and true signatures of the
officers of such Loan Party authorized to sign each Loan Document to
which it is or is to be a party and the other documents to be
delivered hereunder and thereunder.
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(F) A favorable opinion of (1) ▇▇▇▇▇▇ and ▇▇▇▇▇▇, Cayman Islands
counsel for the Parent, in substantially the form of Exhibit D-1
hereto and as to such other matters as any Lender through the
Administrative Agent may reasonably request, (2) ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇,
New York counsel for the Loan Parties, in substantially the form of
Exhibit D-2 hereto and as to such other matters as any Lender through
the Administrative Agent may reasonably request, and (3) ▇▇▇▇▇▇▇ ▇▇▇▇
& ▇▇▇▇▇▇▇, Bermuda counsel for ACE Bermuda and Tempest, in
substantially the form of Exhibit D-3 hereto and as to such other
matters as any Lender through the Administrative Agent may reasonably
request.
(ii) (x) No development or change occurring after January 11, 1999,
and no information becoming known after such date, that results in a
material change in the planned post-Acquisition corporate and
capitalization structure of the Parent or in the capitalization structure
of the Parent's subsidiaries contemplated in the Pre-Commitment Information
and (y) the Lenders shall be reasonably satisfied with the corporate and
legal structure and capitalization of each Loan Party (other than the
Parent), including the terms and conditions of the constitutional documents
of each such Person and of each material agreement or instrument relating
to such structure.
(iii) There shall have occurred no material adverse change since
September 30, 1998 in the business, financial condition, operations or
properties of (i) CIGNAP&C or (ii) the Parent and its Subsidiaries, taken
as a whole.
(iv) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that (x)
could be reasonably expected to have a Material Adverse Effect or (y) would
reasonably be expected to materially adversely affect the legality,
validity or enforceability of any Loan Document or the other transactions
contemplated by the Loan Documents.
(v) The Pre-Commitment Information shall be true and correct in all
material aspects, and no additional information shall have come to the
attention of the Administrative Agent or the Lenders that is inconsistent
in any material respect with the Pre-Commitment Information or that could
reasonably be expected to have a Material Adverse Effect.
(vi) No development or change occurring after January 11, 1999, and no
information becoming known after such date, that (x) results in or could
reasonably be expected to result in a material change in, or material
deviation from, the Pre-Commitment Information that is or could reasonably
be expected to be materially adverse to any Borrower or any of its
Subsidiaries or materially adverse to the Lenders or (y) has had or could
reasonably be expected to have a Material Adverse Effect.
(vii) The Borrowers shall have paid all accrued fees of the Agents
and the Lenders and all accrued expenses of the Agents (including the
accrued fees and expenses of counsel to
52
the Administrative Agent and local counsel on behalf of all of the
Lenders), in each case to the extent then due and payable.
SECTION 3.02. Conditions Precedent to Each Committed Borrowing and
Issuance, Extension or Increase of a Letter of Credit. The obligation of each
Lender to make a Committed Advance on the occasion of each Committed Borrowing
(including the initial Committed Borrowing), and the obligation of the Issuing
Bank to issue, extend or increase a Letter of Credit (including the initial
issuance), shall be subject to the further conditions precedent that on the date
of such Committed Borrowing or issuance, extension or increase (a) the following
statements shall be true (and each of the giving of the applicable Notice of
Committed Borrowing or request for issuance, extension, or increase, and the
acceptance by the Borrower that requested such Committed Borrowing of the
proceeds of such Committed Borrowing or of such issuance, extension or increase
shall constitute a representation and warranty by such Borrower that both on the
date of such notice and on the date of such Committed Borrowing or such
issuance, extension or increase such statements are true):
(i) the representations and warranties contained in each Loan Document
are correct in all material respects on and as of such date, before and
after giving effect to such Committed Borrowing and to the application of
the proceeds therefrom or such issuance, extension or increase, as though
made on and as of such date, other than any such representations or
warranties that, by their terms, refer to a specific date other than the
date of such Committed Borrowing or the date of such issuance, extension or
increase, in which case as of such specific date; and
(ii) no Default has occurred and is continuing, or would result from
such Committed Borrowing or the application of the proceeds therefrom or
from such issuance, extension or increase;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Lender or the Issuing Bank through the
Administrative Agent may reasonably request.
SECTION 3.03. Conditions Precedent to Each Competitive Bid Borrowing.
The obligation of each Lender that is to make a Competitive Bid Advance on the
occasion of a Competitive Bid Borrowing to make such Competitive Bid Advance as
part of such Competitive Bid Borrowing is subject to the conditions precedent
that (i) the Administrative Agent shall have received the written confirmatory
Notice of Competitive Bid Borrowing with respect thereto, and (ii) on the date
of such Competitive Bid Borrowing the following statements shall be true (and
each of the giving of the applicable Notice of Competitive Bid Borrowing and the
acceptance by the Borrower that requested such Competitive Bid Borrowing of the
proceeds of such Competitive Bid Borrowing shall constitute a representation and
warranty by such Borrower that on the date of such Competitive Bid Borrowing
such statements are true):
53
(a) the representations and warranties contained in Section 4.01 are
correct in all material respects on and as of the date of such Competitive
Bid Borrowing, before and after giving effect to such Competitive Bid
Borrowing and to the application of the proceeds therefrom, as though made
on and as of such date, other than any such representations or warranties
that, by their terms, refer to a specific date other than the date of such
Competitive Bid Borrowing, in which case as of such specific date, and
(b) no Default has occurred and is continuing, or would result from
such Competitive Bid Borrowing or from the application of the proceeds
therefrom.
SECTION 3.04. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Administrative Agent responsible for the transactions contemplated by the
Loan Documents shall have received notice from such Lender prior to the Initial
Extension of Credit specifying its objection thereto and, if the Initial
Extension of Credit consists of a Borrowing, such Lender shall not have made
available to the Administrative Agent such Lender's ratable portion of such
Committed Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrowers. Each
Borrower 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 Borrower (other than the Parent) have been validly issued, are fully
paid and non-assessable and (except for any Preferred Securities issued
after the date of this Agreement) are owned, directly or indirectly, by the
Parent free and clear of all Liens.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all Subsidiaries of each Loan Party.
54
(c) The execution, delivery and performance by each Loan Party of each
Loan Document to which it is or is to be a party and the consummation of
the transactions contemplated by the Loan Documents, are within such Loan
Party's corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene such Loan Party's
constitutional documents, (ii) violate any law, rule, regulation
(including, without limitation, Regulation X of the Board of Governors of
the Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of, or
constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting
any Loan Party, any of its Subsidiaries or any of their properties or (iv)
except for the Liens created under the Loan Documents, result in or require
the creation or imposition of any Lien upon or with respect to any of the
properties of any Loan Party or any of its Subsidiaries. No Loan Party or
any of its Subsidiaries is in violation of any such law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award or in
breach of any such contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument, the violation or breach of which could be
reasonably likely to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other
third party is required for (i) the due execution, delivery, recordation,
filing or performance by any Loan Party of any Loan Document to which it is
or is to be a party or the other transactions contemplated by the Loan
Documents (other than the Acquisition), or (ii) the exercise by any Agent
or any Lender of its rights under the Loan Documents, except for the
authorizations, approvals, actions, notices and filings which have been
duly obtained, taken, given or made and are in full force and effect.
(e) This Agreement has been, and each other Loan Document when
delivered hereunder will have been, duly executed and delivered by each
Loan Party party thereto. This Agreement is, and each other Loan Document
when delivered hereunder will be, the legal, valid and binding obligation
of each Loan Party party thereto, enforceable against such Loan Party in
accordance with its terms.
(f) There is no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of its Subsidiaries, including any
Environmental Action, pending or threatened before any court, governmental
agency or arbitrator that (i) could be reasonably likely to have a Material
Adverse Effect or (ii) would reasonably be expected to affect the legality,
validity or enforceability of any Loan Document or the transactions
contemplated by the Loan Documents.
(g) The Consolidated balance sheets of the Parent and its Subsidiaries
as at September 30, 1998, 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 December 31, 1998, and the related
Consolidated statements of income and cash flows of the Parent and its
Subsidiaries for the three months then ended, duly certified by the Chief
Financial Officer of the Parent, copies of which have been furnished to
each Lender, fairly present, subject, in the case of said balance sheet as
at
55
December 31, 1998, and said statements of income and cash flows for the
three 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 December 31, 1998 balance sheet and statements, to the
absence of footnotes), and since December 31, 1998, there has been no
Material Adverse Change.
(h) The Consolidated forecasted balance sheet, statements of income
and statements of cash flows of the Parent and its Subsidiaries contained
in the Information Memorandum were prepared in good faith on the basis of
the assumptions stated therein, which assumptions were fair in light of the
conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery, the Parent's best estimate of its
future financial performance.
(i) Neither the Information Memorandum nor any other written
information, exhibit or report furnished by or on behalf of any Loan Party
to any Agent or any Lender in connection with the negotiation and
syndication of the Loan Documents or pursuant to the terms of the Loan
Documents contained any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements made therein not
misleading as at the date it was dated (or if not dated, so delivered).
(j) None of the Borrowers is engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance or drawings under any Letter of Credit will be used
to purchase or carry any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any 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 Borrower, nor the
consummation of the other transactions contemplated by the Loan Documents,
will violate any provision of such Act or any rule, regulation or order of
the Securities and Exchange Commission thereunder.
(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
56
complete and accurate and fairly presents the funding status of such
Pension Plan, and since the date of such Schedule B there has been no
material adverse change in such funding status.
(ii) Neither any Loan Party nor any ERISA Affiliate has incurred or is
reasonably expected to incur any Withdrawal Liability to any Multiemployer
Plan.
(iii) Neither any Loan Party nor any ERISA Affiliate has been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of
ERISA, and no such Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of
ERISA.
(iv) With respect to each scheme or arrangement mandated by a government
other than the United States (a "Foreign Government Scheme or Arrangement")
and with respect to each employee benefit plan that is not subject to
United States law maintained or contributed to by any Loan Party or with
respect to which any Subsidiary of any Loan Party may have liability under
applicable local law (a "Foreign Plan"):
(x) Any employer and employee contributions required by law or by
the terms of any Foreign Government Scheme or Arrangement or any
Foreign Plan have been made, or, if applicable, accrued, in accordance
with normal accounting practices.
(y) The fair market value of the assets of each funded Foreign
Plan, the liability of each insurer for any Foreign Plan funded
through insurance or the book reserve established for any Foreign
Plan, together with any accrued contributions, is sufficient to
procure or provide for the accrued benefit obligations, as of the date
hereof, with respect to all current and former participants in such
Foreign Plan according to the actuarial assumptions and valuations
most recently used to account for such obligations in accordance with
applicable generally accepted accounting principles.
(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 (S) 2510.3-101, the execution, delivery and performance of
the Loan Documents and the consummation of the transactions contemplated
therein will not result in a non-exempt prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue
Code.
(vi) During the twelve-consecutive-month period to the date of the
execution and delivery of this Agreement and prior to any Borrowing
hereunder, no steps have been taken to terminate any Pension Plan, no
contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a lien under section 302(f) of ERISA and no
minimum funding waiver has been applied for or is in effect with respect to
any Pension Plan. No condition exists or event or transaction has occurred
or is reasonably expected to occur with respect to any Pension Plan
57
which could result in any Loan Party or any ERISA Affiliate incurring any
material liability, fine or penalty.
(o) (i) In the ordinary course of its business, each Borrower reviews
the effect of Environmental Laws on the operations and properties of such
Borrower and its Subsidiaries, in the course of which it identifies and
evaluates associated liabilities and costs (including, without limitation,
any capital or operating expenditures required for clean-up or closure of
properties presently or previously owned, any capital or operating
expenditures required to achieve or maintain compliance with environmental
protection standards imposed by law or as a condition of any license,
permit or contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility or reduction
in the level of or change in the nature of operations conducted thereat,
and any actual or potential liabilities to third parties and any related
costs and expenses). On the basis of this review, each Borrower has
reasonably concluded that such associated liabilities and costs, including
the costs of compliance with Environmental Laws, are unlikely to have a
Material Adverse Effect.
(ii) The operations and properties of each Loan Party and each of its
Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits, except for non-compliances
which would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect; Hazardous Materials have not been
released, discharged or disposed of on any property currently or formerly
owned or operated by any Loan Party or any of its Subsidiaries that would
reasonably be expected to have a Material Adverse Effect; and there are no
Environmental Actions pending or threatened against any Loan Party or its
Subsidiaries, and no circumstances exist that could be reasonably likely to
form the basis of any such Environmental Action, which (in either case),
individually or in the aggregate with all other such 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) Each Borrower has (i) initiated a review and assessment of all
areas within its and each of its Subsidiaries' business and operations
(including those affected by suppliers, vendors and customers) that could
be adversely affected by the risk that computer applications used by such
Borrower or any of its Subsidiaries (or material suppliers, vendors and
customers other than those affecting customers that may give rise to claims
under insurance policies issued by any Borrower or a Subsidiary) may be
unable to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999 (the "Year 2000
Problem"), (ii) developed a plan and timetable for addressing the Year 2000
Problem on a timely basis and (iii) to date, implemented that plan
substantially in accordance with such timetable. Based on the foregoing,
each Borrower believes that all computer applications of such Borrower and
its Subsidiaries that are material to its or any of its
58
Subsidiaries' business and operations are reasonably expected on a timely
basis to be able to perform properly date-sensitive functions for all dates
before and after January 1, 2000 ("Year 2000 Compliant"), except to the
extent that a failure to do so could not reasonably be expected to have a
Material Adverse Effect.
ARTICLE V
COVENANTS OF THE BORROWERS
SECTION 5.01. Affirmative Covenants. So long as any Advance or any
other obligation of any Loan Party under any Loan Document shall remain unpaid,
any Letter of Credit shall be outstanding or any Lender shall have any
Commitment hereunder, each Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without
limitation, compliance with Environmental Laws, Environmental Permits,
ERISA and the Racketeer Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent,
(i) all material taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful material claims
that, if unpaid, might by law become a Lien upon its property; provided,
however, that neither any Borrower nor any of its Subsidiaries shall be
required to pay or discharge any such tax, assessment, charge or claim that
is being contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained.
(c) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks
as is usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Parent or such
Subsidiary operates (it being understood that the foregoing shall not apply
to maintenance of reinsurance or similar matters which shall be solely
within the reasonable business judgment of the Parent and its
Subsidiaries).
(d) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its existence,
legal structure, legal name, rights (charter and statutory), permits,
licenses, approvals, privileges and 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
59
Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to the Parent, such Subsidiary or
the Lenders.
(e) Visitation Rights. At any reasonable time and from time to time
upon prior notice, permit the Agents (upon request made by any Agent or any
Lender), or any agents or representatives thereof, at the expense (so long
as no Default has occurred and is continuing) of such Agents (or such
Lender, as the case may be), to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of, the
Parent and any of its Subsidiaries, and to discuss the affairs, finances
and accounts of the Parent and any of its Subsidiaries with any of their
officers or directors and with, so long as a representative of the Parent
is present, their independent certified public accountants.
(f) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of
the Parent and each such Subsidiary sufficient to permit the preparation of
financial statements in accordance with GAAP.
(g) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties
that are used or useful in the conduct of its business in good working
order and condition, ordinary wear and tear excepted.
(h) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates (other than any transaction
between Loan Parties) on terms that are fair and reasonable and no less
favorable than it would obtain in a comparable arm's-length transaction
with a Person not an Affiliate.
(i) Pari Passu ranking. Each Borrower shall procure that its
obligations under the Loan Documents will rank at least pari passu with all
its other present and future unsecured and unsubordinated obligations,
except for obligations which are mandatorily preferred by law applying to
companies generally.
SECTION 5.02. Negative Covenants. So long as any Advance or any other
obligation of any Loan Party under any Loan Document shall remain unpaid, any
Letter of Credit shall be outstanding or any Lender shall have any Commitment
hereunder, each of the Borrowers will not, at any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien on or with respect to any of its properties of any character
(including, without limitation, accounts) whether now owned or hereafter
acquired, or assign or permit any of its Subsidiaries to assign, any
accounts or other right to receive income, except:
(i) Liens created under the Loan Documents or in respect of the
Borrowers' 364-Day Revolving Credit Facility or the ACE INA 364-Day
Revolving Credit Facility
60
(provided that all obligations of the Loan Parties under all of the
foregoing shall be ratably secured);
(ii) Permitted Liens;
(iii) Liens described on Schedule 5.02(a) hereto and other Liens
arising in the ordinary course of business of CIGNAP&C;
(iv) purchase money Liens upon or in real property or equipment
acquired or held by the Parent or any of its Subsidiaries in the
ordinary course of business to secure the purchase price of such
property or equipment or to secure Debt incurred solely for the
purpose of financing the acquisition, construction or improvement of
any such property or equipment to be subject to such Liens, or Liens
existing on any such property or equipment at the time of acquisition
or within 180 days following such acquisition (other than any such
Liens created in contemplation of such acquisition that do not secure
the purchase price), or extensions, renewals or replacements of any of
the foregoing for the same or a lesser amount; provided, however, that
no such Lien shall extend to or cover any property other than the
property or equipment being acquired, constructed or improved, and no
such extension, renewal or replacement shall extend to or cover any
property not theretofore subject to the Lien being extended, renewed
or replaced;
(v) Liens arising in connection with Capitalized Leases; provided
that no such Lien shall extend to or cover any assets other than the
assets subject to such Capitalized Leases;
(vi) (A) any Lien existing on any asset of any Person at the time
such Person becomes a Subsidiary and not created in contemplation of
such event, (B) any Lien on any asset of any Person existing at the
time such Person is merged or consolidated with or into the Parent or
any of it Subsidiaries in accordance with Section 5.02(c) and not
created in contemplation of such event and (C) any Lien existing on
any asset prior to the acquisition thereof by the Parent or any of its
Subsidiaries and not created in contemplation of such acquisition;
(vii) Liens securing obligations under credit default swap
transactions determined by reference to, or Contingent Obligations in
respect of, Debt issued by the Parent or one of its Subsidiaries; such
Debt not to exceed an aggregate principal amount of $550,000,000;
(viii) Liens arising in the ordinary course of its business which
(A) do not secure Debt and (B) do not in the aggregate materially
detract from the value of its assets or materially impair the use
thereof in the operation of its business;
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(ix) Liens on cash and Approved Investments securing Hedge
Agreements arising in the ordinary course of business;
(x) other Liens securing Debt or other obligations outstanding in
an aggregate principal or face amount not to exceed at any time 10% of
Consolidated Tangible Net Worth;
(xi) Liens consisting of deposits made by the Parent or any
insurance Subsidiary with any insurance regulatory authority or other
statutory Liens or Liens or claims imposed or required by applicable
insurance law or regulation against the assets of the Parent or any
insurance Subsidiary, in each case in favor of policyholders of the
Parent or such insurance Subsidiary or an insurance regulatory
authority and in the ordinary course of the Parent's or such insurance
Subsidiary's business;
(xii) Liens on Investments and cash balances of the Parent or any
insurance Subsidiary (other than capital stock of any Subsidiary)
securing obligations of the Parent or any insurance Subsidiary in
respect of (i) letters of credit obtained in the ordinary course of
business and/or (ii) trust arrangements formed in the ordinary course
of business for the benefit of cedents to secure reinsurance
recoverables owed to them by the Parent or any insurance Subsidiary;
(xiii) the replacement, extension or renewal of any Lien
permitted by clause (iii) or (vi) above upon or in the same property
theretofore subject thereto or the replacement, extension or renewal
(without increase in the amount (other than in respect of fees,
expenses and premiums, if any) or change in any direct or contingent
obligor) of the Debt secured thereby;
(xiv) Liens securing obligations owed by any Loan Party to any
other Loan Party or owed by any Subsidiary of the Parent (other than a
Loan Party) to the Parent or any other Subsidiary;
(xv) Liens incurred in the ordinary course of business in favor
of financial intermediaries and clearing agents pending clearance of
payments for investment or in the nature of set-off, banker's lien or
similar rights as to deposit accounts or other funds; and
(xvi) judgment or judicial attachment Liens, provided that the
enforcement of such Liens is effectively stayed.
(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 but assuming that the Acquisition
had occurred.
(c) Mergers, Etc. Merge into or consolidate with any Person or permit
any Person to merge into it, or permit any of its Subsidiaries to do so,
except that:
62
(i) any Subsidiary of the Parent may merge into or consolidate
with any other Subsidiary of the Parent, provided that, in the case of
any such merger or consolidation, the Person formed by such merger or
consolidation shall be a wholly owned Subsidiary of the Parent,
provided further that, in the case of any such merger or consolidation
to which a Borrower is a party, the Person formed by such merger or
consolidation shall be such Borrower;
(ii) any Subsidiary of any Borrower may merge into or consolidate
with any other Person or permit any other Person to merge into or
consolidate with it; provided that the Person surviving such merger
shall be a wholly owned Subsidiary of the Borrower;
(iii) in connection with any sale or other disposition permitted
under Section 5.02(d) (other than clause (ii) thereof), any Subsidiary
of the Parent may merge into or consolidate with any other Person or
permit any other Person to merge into or consolidate with it; and
(iv) the Parent or any Borrower may merge into or consolidate
with any other Person; provided that, in the case of any such merger
or consolidation, the Person formed by such merger or consolidation
shall be the Parent or such Borrower, as the case may be;
provided, however, that in each case, immediately after giving effect
thereto, no event shall occur and be continuing that constitutes a Default.
(d) Sales, Etc., of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer or
otherwise dispose of, any assets, or grant any option or other right to
purchase, lease or otherwise acquire any, assets except:
(i) sales of inventory in the ordinary course of its business;
(ii) in a transaction authorized by Section 5.02(c);
(iii) sales of Approved Investments in the ordinary course of
business on a basis consistent with past practices;
(iv) sales of assets for fair value;
(v) sales, leases, transfers or other dispositions of any assets
by the Parent or a Subsidiary to the Parent or another Subsidiary; and
(vi) so long as no Default shall occur and be continuing, the
grant of any option or other right to purchase any asset in a
transaction that would be permitted under the provisions of clauses
(i) through (iv) above.
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(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,
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) the 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.
SECTION 5.03. Reporting Requirements. So long as any Advance or any
other obligation of any Loan Party under any Loan Document shall remain unpaid,
any Letter of Credit shall be outstanding or any Lender shall have any
Commitment hereunder, the Parent will furnish to the Agents and the Lenders:
(a) Default Notice. As soon as possible and in any event within two
days after the occurrence of each Default or any event, development or
occurrence reasonably likely to have a Material Adverse Effect continuing
on the date of such statement, a statement of the chief financial officer
of the Parent setting forth details of such Default, event, development or
occurrence and the action that the Parent or the applicable Subsidiary has
taken and proposes to take with respect thereto.
(b) Annual Financials. (i) As soon as available and in any event
within 90 days after the end of each Fiscal Year, a copy of the annual
Consolidated audit report for such year for
64
the Parent and its Subsidiaries, including therein a Consolidated balance
sheet of the Parent and its Subsidiaries as of the end of such Fiscal Year
and Consolidated statements of income and cash flows of the Parent and its
Subsidiaries for such Fiscal Year, all reported on in a manner reasonably
acceptable to the Securities and Exchange Commission in each case and
accompanied by an opinion of PricewaterhouseCoopers LLP or other
independent public accountants of recognized standing reasonably acceptable
to the Required Lenders, together with (i) a certificate of the Chief
Financial Officer of the Parent stating that no Default has occurred and is
continuing, or if a Default has occurred and is continuing, a statement as
to the nature thereof and the action that the Parent has taken a proposes
to take with respect thereto, and (ii) a schedule in form reasonably
satisfactory to the Administrative Agent of the computations used by the
Parent in determining, as of the end of such Fiscal Year, compliance with
the covenants contained in Section 5.04.
(ii) As soon as available and in any event within 120 days after the
end of each Fiscal Year, a copy of the annual Consolidated audit report for
such year for each Subsidiary Guarantor and its Subsidiaries, including
therein a Consolidated balance sheet of such Subsidiary Guarantor and its
Subsidiaries as of the end of such Fiscal Year and a Consolidated statement
of income and a Consolidated statement of cash flows of such Subsidiary
Guarantor and its Subsidiaries for such Fiscal Year, in each case
accompanied by an opinion acceptable to the Required Lenders of
PricewaterhouseCoopers LLP or other independent public accountants of
recognized standing acceptable to the Required Lenders.
(c) Quarterly Financials. As soon as available and in any event
within 45 days after the end of each of the first three quarters of each
Fiscal Year, Consolidated balance sheets of the Parent and its Subsidiaries
as of the end of such quarter and Consolidated statements of income and a
Consolidated statement of cash flows of the Parent and its Subsidiaries for
the period commencing at the end of the previous fiscal quarter and ending
with the end of such fiscal quarter and Consolidated statements of income
and a Consolidated statement of cash flows of the Parent and its
Subsidiaries for the period commencing at the end of the previous Fiscal
Year and ending with the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding date or
period of the preceding Fiscal Year, all in reasonable detail and duly
certified (subject to the absence of footnotes and normal year-end audit
adjustments) by the Chief Financial Officer of the Parent as having been
prepared in accordance with GAAP, together with (i) a certificate of said
officer stating that no Default has occurred and is continuing or, if a
Default has occurred and is continuing, a statement as to the nature
thereof and the action that the Parent has taken and proposes to take with
respect thereto and (ii) a schedule in form reasonably satisfactory to the
Administrative Agent of the computations used by the Parent in determining
compliance with the covenants contained in Section 5.04.
(d) Litigation. Promptly after the commencement thereof, notice of
all actions, suits, investigations, litigation and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or any of
its Subsidiaries of the type described in Section 4.01(f).
65
(e) Securities Reports. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports that the
Parent sends to its stockholders generally, and copies of all regular,
periodic and special reports, and all registration statements, that any
Loan Party or any of its Subsidiaries files with the Securities and
Exchange Commission or any governmental authority that may be substituted
therefor, or with any national securities exchange.
(f) ERISA. (i) ERISA Events. Promptly and in any event within 10
days after any Loan Party or any ERISA Affiliate institutes any steps to
terminate any Pension Plan or becomes aware of the institution of any steps
or any threat by the PBGC to terminate any Pension Plan, or the failure to
make a required contribution to any Pension Plan if such failure is
sufficient to give rise to a lien under section 302(f) of ERISA, or the
taking of any action with respect to a Pension Plan which could result in
the requirement that any Loan Party or any ERISA Affiliate furnish a bond
or other security to the PBGC or such Pension Plan, or the occurrence of
any event with respect to any Pension Plan which could result in any Loan
Party or any ERISA Affiliate incurring any material liability, fine or
penalty, or any material increase in the contingent liability of any Loan
Party or any ERISA Affiliate with respect to any post-retirement Welfare
Plan benefit, notice thereof and copies of all documentation relating
thereto.
(ii) Plan Annual Reports. Promptly upon request of any Agent or any
Lender, copies of each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) with respect to each Pension Plan.
(iii) Multiemployer Plan Notices. Promptly and in any event within
15 Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate from the sponsor of a Multiemployer Plan, copies of each notice
concerning (A) the imposition of Withdrawal Liability by any such
Multiemployer Plan, (B) the reorganization or termination, within the
meaning of Title IV of ERISA, of any such Multiemployer Plan or (C) the
amount of liability incurred, or that may be incurred, by such Loan Party
or any ERISA Affiliate in connection with any event described in clause (A)
or (B); provided, however, that such notice and documentation shall not be
required to be provided (except at the specific request of any Agent or
Lender, in which case such notice and documentation shall be promptly
provided following such request) if such condition or event is not
reasonably expected to result in any Loan Party or any ERISA Affiliate
incurring any material liability, fine, or penalty..
(g) Year 2000 Compliance. Promptly after the Parent's discovery or
determination thereof, notice (in reasonable detail) that any computer
application that is material to its or any of its Subsidiaries' business
and operations will not be Year 2000 Compliant (as defined in Section
4.01(q)), except to the extent that such failure could not reasonably be
expected to have a Material Adverse Effect.
(h) 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.
66
(i) Regulatory Notices, Etc. Promptly after any Responsible Officer
of the Parent obtains knowledge thereof, (i) a copy of any notice from the
Bermuda Minister of Finance or the Registrar of Companies or any other
person of the revocation, the suspension or the placing of any restriction
or condition on the registration as an insurer of any Borrower under the
Bermuda Insurance Act 1978 (and related regulations) or of the institution
of any proceeding or investigation which could result in any such
revocation, suspension or placing of such a restriction or condition, (ii)
copies of any correspondence by, to or concerning any Loan Party relating
to an investigation conducted by the Bermuda Minister of Finance, whether
pursuant to Section 132 of the Bermuda Companies Act 1981 (and related
regulations) or otherwise and (iii) a copy of any notice of or requesting
or otherwise relating to the winding-up or any similar proceeding of or
with respect to any Loan Party.
(j) Other Information. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries as any
Agent, or any Lender through the Administrative Agent, may from time to
time reasonably request.
SECTION 5.04. Financial Covenants. So long as any Advance or any
other obligation of any Loan Party under any Loan Document shall remain unpaid,
any Letter of Credit shall be outstanding or any Lender shall have any
Commitment hereunder, the Parent will:
(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 the lesser of (a) 0.50 to 1 or (b) the
Specified Ratio. For purposes of the foregoing, the Specified Ratio shall
be the greater of 0.35 to 1 or the ratio determined by multiplying 1.25
times the numerator of the lowest ratio of Adjusted Consolidated Debt to
Total Capitalization as of the last day of any fiscal quarter of the Parent
after completion of the Acquisition.
(b) Tangible Net Worth. Maintain at all times Consolidated Tangible
Net Worth in an amount equal to the sum of (i) $1,000,000,000 plus (ii) 25%
of Consolidated Net Income for each fiscal quarter of the Parent ending on
and after June 30, 1999 for which such Consolidated Net Income is positive
plus (iii) 75% (or, after the Equity Issuance (so long as the Net Cash
Proceeds received by the Parent and its Subsidiaries are at least
$500,000,000) 50%) of the aggregate amount by which Consolidated Tangible
Net Worth shall have been increased by reason of the issuance and sale of
any Equity Interests or Mandatorily Convertible Preferred Securities or,
without duplication, the conversion or exchange of any Debt of the Parent
into or with Equity Interests of the Parent.
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ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) (i) any Borrower shall fail to pay any principal of any Advance
when the same shall become due and payable or (ii) any Borrower shall fail
to pay any interest on any Advance, or any Loan Party shall fail to make
any other payment under any Loan Document, in each case under this clause
(ii) within five Business Days after the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to
have been incorrect in any material respect when made; or
(c) any Borrower shall fail to perform or observe any term, covenant
or agreement contained in Section 2.15, 5.01(d) (with respect to the
Parent) or (e), 5.02 or 5.04; or
(d) any Loan Party shall fail to perform or observe any other term,
covenant or agreement contained in any Loan Document on its part to be
performed or observed if such failure shall remain unremedied for 30 days
after the earlier of the date on which (i) a Responsible Officer becomes
aware of such failure or (ii) written notice thereof shall have been given
to such Loan Party by any Agent or any Lender; or
(e) the Parent or any of its Subsidiaries shall fail to pay any
Material Financial Obligation (but excluding Debt outstanding hereunder) of
the Parent or such Subsidiary (as the case may be), when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after
the applicable grace period, if any, specified in the agreement or
instrument relating to such Material Financial Obligation; or any other
event shall occur or condition shall exist under any agreement or
instrument relating to any such Material Financial Obligation and shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Material
Financial 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 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
68
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
(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;
(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
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required to furnish a bond or security to the PBGC or such Pension
Plan, or incurring a liability or obligation.
(l) any Loan Party or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan; or
(m) any Loan Party or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, and as a result of such reorganization or termination the aggregate
annual contributions of the Loan Parties and the ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years of such Multiemployer Plans
immediately preceding the plan year in which such reorganization or
termination occurs;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrowers,
declare the Commitments of each Lender and the obligation of each Lender to make
Advances (other than Letter of Credit Advances by the Issuing Bank or a Lender
pursuant to Section 2.04(c)) and of the Issuing Bank to issue Letters of Credit
to be terminated, whereupon the same shall forthwith terminate, and/or (ii)
shall at the request, or may with the consent, of the Required Lenders, by
notice to the Borrowers, declare the Notes, all interest thereon and all other
amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrowers; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to any Borrower under the
Federal Bankruptcy Code, (x) the Commitments of each Lender and the obligation
of each Lender to make Advances (other than Letter of Credit Advances by the
Issuing Bank or a Lender pursuant to Section 2.04(c)) and of the Issuing Bank to
issue Letters of Credit shall automatically be terminated and (y) the Notes, all
such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrowers.
SECTION 6.02. Actions in Respect of the Letters of Credit upon
Default. If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders, after
having taken any of the actions described in Section 6.01(ii) or otherwise, make
demand upon the Borrower to, and forthwith upon such demand the Borrower will,
pay to the Administrative Agent on behalf of the Lenders in same day funds at
the Administrative Agent's office designated in such demand, an amount equal to
the aggregate Available Amount of all Letters of Credit then outstanding as cash
collateral. If at any time during the continuance of an Event of Default the
Administrative Agent determines that such funds are subject to any right or
claim of any Person other than the Administrative Agent and the Lenders or that
the total amount of such funds is less than the aggregate Available Amount of
all Letters of Credit, the Borrower will, forthwith upon demand by the
Administrative Agent, pay to the Administrative Agent, as additional cash
collateral, an amount equal to the excess of (a) such aggregate Available Amount
over (b) the total amount of funds, if any, that the Administrative Agent
determines to be free and clear of any such right and claim. Upon the drawing
of
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any Letter of Credit, such funds shall be applied to reimburse the Issuing
Bank or Lenders, as applicable, to the extent permitted by applicable law.]
ARTICLE VII
THE GUARANTY
SECTION 7.01. The Guaranty. (a) Each Borrower hereby jointly and
severally, unconditionally, absolutely and irrevocably guarantees the full and
punctual payment (whether at stated maturity, upon acceleration or otherwise) of
all amounts payable by each of the other Borrowers under the Loan Documents
including, without limitation, the principal of and interest on each Note issued
by such other Borrowers pursuant to this Agreement and for reimbursement
obligations with respect to Letters of Credit. Upon failure by a Borrower to
pay punctually any such amount, each other Borrower agrees to pay forthwith on
demand the amount not so paid at the place and in the manner specified in this
Agreement.
(b) Each Borrower (other than the Parent), and by its acceptance of
this Guaranty, the Administrative Agent and each other Lender, hereby confirms
that it is the intention of all such Persons that this Guaranty and the
obligations of each Borrower 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
Borrower (other than the Parent) hereunder. To effectuate the foregoing
intention, the Administrative Agent, the other Lenders and the Borrowers hereby
irrevocably agree that the obligations of each Borrower (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 Borrower under this Guaranty not
constituting a fraudulent transfer or conveyance.
SECTION 7.02. Guaranty Unconditional. The obligations of each
Borrower under this Article VII shall be unconditional, absolute and irrevocable
and, without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of any other obligor under any of the Loan
Documents, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to any of the Loan
Documents;
(iii) any release, non-perfection or invalidity of any direct or
indirect security for any obligation of any other obligor under any of the
Loan Documents;
(iv) any change in the corporate existence, structure or ownership of
any obligor, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting any other obligor or its assets or any resulting
release or discharge of any obligation of any other obligor contained in
any of the Loan Documents;
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(v) the existence of any claim, set-off or other rights which any
obligor may have at any time against any other obligor, the Administrative
Agent, any Lender or any other corporation or person, whether in connection
with any of the Loan Documents or any unrelated transactions, provided that
nothing herein shall prevent the assertion of any such claim by separate
suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or against any
other obligor for any reason of any of the Loan Documents, or any provision
of applicable law or regulation purporting to prohibit the payment by any
other obligor of the principal of or interest on any Note or any other
amount payable under any of the Loan Documents; or
(vii) any other act or omission to act or delay of any kind by any
obligor, the Administrative Agent, any Lender or any other corporation or
person or any other circumstance whatsoever which might, but for the
provisions of this paragraph, constitute a legal or equitable discharge of
or defense to a Borrower's obligations under this Article VII.
SECTION 7.03. Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances. Each Borrower's obligations under this Article VII shall
remain in full force and effect until the Commitments shall have terminated and
the principal of and interest on the Notes and all other amounts payable by the
other Borrowers under the Loan Documents shall have been paid in full. If at
any time any payment of the principal of or interest on any Note or any other
amount payable by a Borrower under the Loan Documents is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of such Borrower or otherwise, each other Borrower'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 Borrowers. Each Borrower 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 Borrower hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against any other Borrower, any other Loan Party or any other insider
guarantor that arise from the existence, payment, performance or enforcement of
such Borrower's obligations under or in respect of this Guaranty or any other
Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of any Lender against any other Borrower, any
other Loan Party or any other insider guarantor or any collateral, whether or
not such claim, remedy or right arises in equity or under contract, statute or
common law, including, without limitation, the right to take or receive from any
other Borrower, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all amounts payable under this Guaranty shall have been paid in full in cash,
and the Commitments shall have expired or been terminated. If any amount shall
be paid to any Borrower 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
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Guaranty, and (b) the Termination Date, such amount shall be
received and held in trust for the benefit of the Lenders, shall be segregated
from other property and funds of such Borrower 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 Borrower shall make
payment to any Lender of all or any amounts payable under this Guaranty, (ii)
all amounts payable under this Guaranty shall have been paid in full in cash,
and (iii) the Termination Date shall have occurred, the Lenders will, at such
Borrower's request and expense, execute and deliver to such Borrower appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to such Borrower of an interest in the
obligations resulting from such payment made by such Borrower pursuant to this
Guaranty.
SECTION 7.06. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by any Borrower under any of the Loan Documents is
stayed upon the insolvency, bankruptcy or reorganization of such Borrower, all
such amounts otherwise subject to acceleration under the terms of this Agreement
shall nonetheless by payable by the other Borrowers under this Article VII
forthwith on demand by the Administrative Agent made at the request of the
requisite proportion of the Lenders.
SECTION 7.07. Continuing Guaranty; Assignments. This Guaranty is a
continuing guaranty and shall (a) remain in full force and effect until the
latest of (i) the payment in full in cash of all amounts payable under this
Guaranty and (ii) the Termination Date, (b) be binding upon each Borrower, its
successors and assigns and (c) inure to the benefit of and be enforceable by the
Lenders and their successors, transferees and assigns. Without limiting the
generality of clause (c) of the immediately preceding sentence, any Lender may
assign or otherwise transfer all or any portion of its rights and obligations
under this Agreement (including, without limitation, all or any portion of its
Commitments, the Advances owing to it and the Note or Notes held by it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise, in each
case as and to the extent provided in Section 9.07. No Borrower shall have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Required Lenders.
ARTICLE VIII
THE AGENTS
SECTION 8.01. Authorization and Action. Each Lender (in its capacity
as a Lender) hereby appoints and authorizes each Agent to take such action as
agent on its behalf and to exercise such powers and discretion under this
Agreement and the other Loan Documents as are delegated to such Agent by the
terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
the Loan Documents (including, without limitation, enforcement or collection of
the Notes), no Agent shall be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully
73
protected in so acting or refraining from acting) upon the instructions of
the Required Lenders or all the Lenders where unanimity is required, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that no Agent shall be required to take any action that
exposes such Agent to personal liability or that is contrary to this Agreement
or applicable law. Each Agent agrees to give to each Lender prompt notice of
each notice given to it by any Borrower pursuant to the terms of this Agreement.
SECTION 8.02. Agents' Reliance, Etc. Neither any Agent nor any of
their respective directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it or them under or in connection
with the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each Agent:
(a) may treat the payee of any Note as the holder thereof until, in the case of
the Administrative Agent, the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, or, in the case of any
other Agent, such Agent has received notice from the Administrative Agent that
it has received and accepted such Assignment and Acceptance, in each case as
provided in Section 9.07; (b) 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; (c) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations
(whether written or oral) made in or in connection with the Loan Documents; (d)
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; (e) shall not be responsible to any Lender for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest created
or purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by
telegram or telecopy) reasonably believed by it to be genuine and signed or sent
by the proper party or parties.
SECTION 8.03. MGT and Affiliates. With respect to its WC
Commitments, the Committed Advances made by it and the Committed Notes issued to
it, MGT shall have the same rights and powers under the Loan Documents as any
other Lender and may exercise the same as though it were not an Agent; and the
term "Lender" or "Lenders" shall, unless otherwise expressly indicated, include
MGT in its individual capacity. MGT and its affiliates may accept deposits
from, lend money to, act as trustee under indentures of, accept investment
banking engagements from and generally engage in any kind of business with, any
Loan Party, any of its Subsidiaries and any Person that may do business with or
own securities of any Loan Party or any such Subsidiary, all as if MGT were not
Agent and without any duty to account therefor to the Lenders.
SECTION 8.04. Lender Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon any Agent or any other Lender
and based on the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
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acknowledges that it will, independently and without reliance upon any Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 8.05. Indemnification. (a) Each Lender severally agrees to
indemnify each Agent (to the extent not promptly reimbursed by the Borrowers)
from and against such Lender's ratable share (determined as provided below) of
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against such Agent
in any way relating to or arising out of the Loan Documents or any action taken
or omitted by such Agent under the Loan Documents; provided, however, that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse each Agent promptly
upon demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrowers under Section
9.04, to the extent that such Agent is not promptly reimbursed for such costs
and expenses by the Borrowers.
(b) For purposes of this Section 8.05, the Lenders' respective ratable
shares of any amount shall be determined, at any time, according to the sum of
(i) the aggregate principal amount of the Advances outstanding at such time and
owing to the respective Lenders, (ii) their respective Pro Rata Shares of the
aggregate Available Amounts of all Letters of Credit outstanding at such time
and (iii) their respective Unused WC Commitments at such time. The
failure of any Lender to reimburse any Agent promptly upon demand for its
ratable share of any amount required to be paid by the Lenders to such Agent as
provided herein shall not relieve any other Lender of its obligation hereunder
to reimburse such Agent for its ratable share of such amount, but no Lender
shall be responsible for the failure of any other Lender to reimburse such Agent
for such other Lender's ratable share of such amount. Without prejudice to the
survival of any other agreement of any Lender hereunder, the agreement and
obligations of each Lender contained in this Section 8.05 shall survive the
payment in full of principal, interest and all other amounts payable hereunder
and under the other Loan Documents.
SECTION 8.06. Successor Agents. Any Agent may resign at any time by
giving written notice thereof to the Lenders and the Parent and may be removed
at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent, subject (so long as no Event of Default exists) to the consent
of the Parent (which consent shall not be unreasonably withheld). If no
successor Agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within 30 days after the retiring Agent's giving
of notice of resignation or the Required Lenders' removal of the retiring Agent,
then the retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be a commercial bank organized under the laws of the United
States or of any State thereof and having a combined capital and surplus of at
least $250,000,000. Upon the acceptance of any appointment as Agent hereunder
by a successor Agent such successor Agent shall succeed to and become vested
with all the rights, powers, discretion, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations under the Loan Documents. If within 45 days after written notice is
given of the retiring Agent's resignation or removal under this Section 8.06 no
successor Agent shall have been appointed and shall have accepted such
appointment, then on such 45th day (i) the retiring Agent's
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resignation or removal shall become effective, (ii) the retiring Agent shall
thereupon be discharged from its duties and obligations under the Loan Documents
and (iii) the Required Lenders shall thereafter perform all duties of the
retiring Agent under the Loan Documents until such time, if any, as the Required
Lenders appoint a successor Agent as provided above. After any retiring Agent's
resignation or removal hereunder as Agent shall have become effective, the
provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes or any other Loan Document, nor consent
to any departure by any Loan Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Required Lenders (and, in
the case of an amendment, the Parent), and then any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by all of the Lenders
(other than any Lender that is, at such time, a Defaulting Lender), do any of
the following at any time: (i) waive any of the conditions specified in Section
3.01 or, in the case of the Initial Extension of Credit, Section 3.02, (ii)
change the number of Lenders or the percentage of (x) the WC Commitments, (y)
the aggregate unpaid principal amount of the Advances or (z) the aggregate
Available Amount of outstanding Letters of Credit that, in each case, shall be
required for the Lenders or any of them to take any action hereunder, (iii)
reduce or limit the obligations of any Borrower under Section 7.01 or release
such Borrower or otherwise limit such Borrower's liability with respect to the
obligations owing to the Agents and the Lenders, (iv) amend this Section 9.01,
(v) increase the WC Commitments of the Lenders or subject the Lenders to any
additional obligations, (vi) reduce the principal of, or interest on, the Notes
or any fees or other amounts payable hereunder (other than under Section 2.07),
(vii) postpone any date fixed for any payment of principal of, or interest on,
the Notes or any fees or other amounts payable hereunder (other than under
Section 2.07), or (viii) limit the liability of any Loan Party under any of the
Loan Documents; provided further that no amendment, waiver or consent shall,
unless in writing and signed by an Agent in addition to the Lenders required
above to take such action, affect the rights or duties of such Agent under this
Agreement or the other Loan Documents and no amendment, waiver or consent shall,
unless in writing and signed by the Issuing Bank in addition to the Lenders
above required to take such action, affect the rights or duties of the Issuing
Bank under this Agreement or the other Loan Documents (including, without
limitation, any change in Section 2.01(b), 2.04, 2.05(b), 2.05(c), 2.09(d),
2.18, 2.19, 2.20, 2.21 or 9.09).
SECTION 9.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic or telecopy
communication) and mailed, telegraphed, telecopied or delivered, if to any
Borrower, at its address set forth below on the signature pages hereof; if to
any Initial Lender, at its Domestic Lending Office specified opposite its name
on Schedule I hereto; if to any other Lender, at its Domestic Lending Office
specified in the Assignment and Acceptance pursuant to which it became a Lender;
if to the Syndication Agent, at its address at World Financial Center, North
Tower, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇; and
if to
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the Administrative Agent, at its address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇; or, as to any party, at such
other address as shall be designated by such party in a written notice to the
other parties. All such notices and communications shall, when mailed,
telegraphed or telecopied, be effective when deposited in the mails, delivered
to the telegraph company or transmitted by telecopier, respectively, except that
notices and communications to any Agent pursuant to Article II, III or VIII
shall not be effective until received by such Agent. Manual delivery by
telecopier of an executed counterpart of any amendment or waiver of any
provision of this Agreement or the Notes or of any Exhibit hereto to be executed
and delivered hereunder shall be effective as delivery of an original executed
counterpart thereof.
SECTION 9.03. No Waiver; Remedies. No failure on the part of any
Lender or any Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. Costs and Expenses. (a) Each of the Borrowers agrees
to pay on demand (i) all reasonable costs and expenses of the Agents and of the
Issuing Bank in connection with the preparation, execution, delivery,
administration, modification and amendment of the Loan Documents (including,
without limitation, (A) all due diligence, collateral review, syndication,
transportation, computer, duplication, appraisal, audit, insurance, consultant,
search, filing and recording fees and expenses and (B) the reasonable fees and
expenses of a single counsel for the Agents and a single counsel for the Issuing
Bank with respect thereto, with respect to advising the Agents as to its rights
and responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii) all
reasonable costs and expenses of each Agent, the Issuing Bank and each Lender in
connection with the enforcement of the Loan Documents, whether in any action,
suit or litigation, or any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally (including, without limitation, the
reasonable fees and expenses of counsel for the Administrative Agent, the
Issuing Bank and each Lender with respect thereto).
(b) Each of the Borrowers jointly and severally agrees to indemnify
and hold harmless each Agent, the Issuing Bank, each Lender and each of their
Affiliates and their respective officers, directors, employees, agents and
advisors (each, an "Indemnified Party") from and against any and all claims,
damages, losses, liabilities and expenses (including, without limitation,
reasonable fees and expenses of counsel) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in connection
with any investigation, litigation or proceeding or preparation of a defense in
connection therewith) this Agreement, the actual or proposed use of the proceeds
of the Advances, the Loan Documents or any of the transactions contemplated
thereby, including, without limitation, any acquisition or proposed acquisition
(including, without limitation, the Acquisition and any of the other
transactions contemplated by the Loan Documents) by any Borrower or any of its
Subsidiaries or
77
Affiliates of all or any portion of the Equity Interests in or Debt securities
or substantially all of the assets of CIGNAP&C, except to the extent such claim,
damage, loss, liability or expense is found in a final, non-appealable judgment
by a court of competent jurisdiction to have resulted from such Indemnified
Party's gross negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 9.04(b)
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by any Loan Party, its directors,
shareholders or creditors or an Indemnified Party or any Indemnified Party is
otherwise a party thereto and whether or not the transactions contemplated by
the Loan Documents are consummated. Each of the Borrowers also agrees not to
assert any claim against any Agent, any Lender or any of their Affiliates, or
any of their respective officers, directors, employees, attorneys and agents, on
any theory of liability, for special, indirect, consequential or punitive
damages arising out of or otherwise relating to the credit facilities provided
hereunder, the actual or proposed use of the proceeds of the Advances or the
Letters of Credit, the Loan Documents or any of the transactions contemplated by
the Loan Documents.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance or LIBO Rate Advance is made by any Borrower to or for the account
of a Lender other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.07, 2.10(b)(i) or
2.11(d), acceleration of the maturity of the Notes pursuant to Section 6.01 or
for any other reason, or if any Borrower fails to make any payment or prepayment
of an Advance for which a notice of prepayment has been given or that is
otherwise required to be made, whether pursuant to Section 2.05, 2.07 or 6.01 or
otherwise, the Borrowers jointly and severally agree, within 10 days after
demand by such Lender (with a copy of such demand to the Administrative Agent),
which demand shall include a calculation in reasonable detail of the amount
demanded, to pay to the Administrative Agent for the account of such Lender any
amounts required to compensate such Lender for any additional losses, costs or
expenses that it may reasonably incur as a result of such payment or Conversion
or such failure to pay or prepay, as the case may be, including, without
limitation, any loss (excluding loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance.
(d) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrowers contained in Sections 2.10 and 2.12 and this
Section 9.04 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under any of the other Loan Documents.
SECTION 9.05. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Agent and each Lender and each of their
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Agent, such Lender or such
Affiliate to or for the credit or the account of any Borrower against any and
all of the obligations of such Borrower now or hereafter existing under the Loan
Documents, irrespective of whether such Agent or such Lender shall have made any
demand under this Agreement or such Note or Notes and although such obligations
may be unmatured. Each Agent and each Lender agrees promptly to notify each
Borrower after any such
78
set-off and application; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Agent and each Lender and their respective Affiliates under this Section
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) that such Agent, such Lender and their respective
Affiliates may have.
SECTION 9.06. Binding Effect. This Agreement shall become effective
when it shall have been executed by each Borrower and each Agent and the
Administrative Agent shall have been notified by each Initial Lender that such
Initial Lender and has executed it and thereafter shall be binding upon and
inure to the benefit of each Borrower, each Agent and each Lender and their
respective successors and assigns, except that no Borrower shall have the right
to assign its rights hereunder or any interest herein without the prior written
consent of the Lenders.
SECTION 9.07. Assignments and Participations. (a) Each Lender may, and
so long as no Default shall have occurred and be continuing, if demanded by any
Borrower (following a demand by such Lender pursuant to Section 2.17) upon at
least five Business Days' notice to such Lender and the Administrative Agent,
will, assign to one or more Eligible Assignee all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its WC Commitment, the Committed Advances owing to it and the
Committed Note or Notes held by it); provided, however, that (i) each such
assignment shall be of a uniform, and not a varying, percentage of all rights
and obligations under and in respect of the Committed Facility, the "Committed
Facility" under the ACE INA 364-Day Revolving Credit Facility and the "Committed
Facility" under the Borrowers' 364-Day Revolving Credit Facility, except for any
non-pro rata assignments to a SPC pursuant to Section 9.07(l), any non-pro rata
assignment made by a Downgraded Lender after a request by the Issuing Bank
pursuant to Section 2.19 (and any subsequent non-pro rata assignment of the
interest so assigned or by the Downgraded Lender) and any other non-pro rata
assignment approved by the Administrative Agent and any Borrower, (ii) except in
the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender, an Affiliate of any Lender or an Approved Fund of any
Lender or an assignment of all of a Lender's rights and obligations under this
Agreement, the aggregate amount of the WC Commitments 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, (iii) each such assignment shall be to an Eligible
Assignee, (iv) each assignment made as a result of a demand by any Borrower
pursuant to Section 2.17 shall be arranged by such Borrower after consultation
with the Administrative Agent and shall be either an assignment of all of the
rights and obligations of the assigning Lender 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 Lender under this Agreement, (v) no
Lender shall be obligated to make any such assignment as a result of a demand by
any Borrower pursuant to Section 2.17 unless and until such Lender shall have
received one or more payments from either such Borrower or other Eligible
Assignees in an aggregate amount at least equal to the aggregate outstanding
principal amount of the Committed Advances owing to such Lender, together with
accrued interest thereon to the date of payment of such principal amount and all
other amounts payable to such Lender under this Agreement, (vi) as a result of
such assignment, no Borrower shall be subject to additional amounts under
Section 2.11 or 2.13, (vii) no such assignment shall be permitted without the
consent of the Administrative Agent and, so long as no Default shall have
occurred and be continuing, the Parent (which consents shall not be unreasonably
withheld) and (viii) the parties to each such assignment shall
79
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note
or Notes subject to such assignment and 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 Lender, hereunder and (ii) the
Lender 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 2.11, 2.13 and 9.04
to the extent any claim thereunder relates to an event arising prior to such
assignment) 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 Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, each
Lender 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 Lender 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 Lender 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 Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (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 Lender.
(d) The Administrative Agent, acting for this purpose (but only for
this purpose) as the agent of the Borrowers, shall maintain at its address
referred to in Section 9.02 a copy of each Assignment and Acceptance and each
Designation Agreement delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and, with respect to
Lenders other than Designated Bidders, the WC Commitment of, and principal
amount of the Advances owing to, each Lender from time to time (the "Register").
The entries in the Register shall be conclusive and binding
80
for all purposes, absent manifest error, and the Borrowers, the Agents and the
Lenders shall treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by any Borrower or any Agent or any Lender 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 Lender and an assignee, together with any Note or Notes subject to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit C
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 each other Agent. In the case of any assignment by a Lender, within
five Business Days after its receipt of such notice, each Borrower, at its own
expense, shall execute and deliver to the Administrative Agent in exchange for
the surrendered Note or Notes a new Note to the order of such Eligible Assignee
in an amount equal to the WC Commitment assumed by it pursuant to such
Assignment and Acceptance and, if any assigning Lender has retained a WC
Commitment hereunder, a new Note to the order of such assigning Lender in an
amount equal to the WC Commitment retained by it hereunder. Such new Note or
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit A-1 hereto.
(f) Each Lender (other than the Designated Bidders) may designate one
or more banks or other entities to have a right to make Competitive Bid Advances
as a Lender pursuant to Section 2.03; provided, however, that (i) no such Lender
shall be entitled to make more than 3 such designations, (ii) each such Lender
making one or more such designations shall retain the right to make Competitive
Bid Advances as a Lender pursuant to Section 2.03, (iii) each such designation
shall be to a Designated Bidder and (iv) the parties to each such designation
shall execute and deliver to the Agent, for its acceptance and recording in the
Register, a Designation Agreement. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Designation
Agreement, the designee thereunder shall be a party hereto with a right to make
Competitive Bid Advances as a Lender pursuant to Section 2.03 and the
obligations related thereto.
(g) By executing and delivering a Designation Agreement, the Lender
making the designation thereunder and its designee thereunder confirm and agree
with each other and the other parties hereto as follows: (i) such Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any
Borrower or the performance or observance by any Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such designee 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
Designation Agreement; (iv) such designee will, independently and without
reliance upon the Agent, such designating Lender or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its
81
own credit decisions in taking or not taking action under this Agreement; (v)
such designee confirms that it is a Designated Bidder; (vi) such designee
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under this Agreement as are delegated to
the Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto; and (vii) such designee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
(h) Upon its receipt of a Designation Agreement executed by a
designating Lender and a designee representing that it is a Designated Bidder,
the Administrative Agent shall, if such Designation Agreement has been completed
and is substantially in the form of Exhibit F hereto, (i) accept such
Designation Agreement, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Parent.
(i) Each Lender 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 WC Commitment, the Committed Advances owing to it and the
Committed Note or Notes (if any) held by it); provided, however, that (i) such
Lender's obligations under this Agreement (including, without limitation, its WC
Commitment) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Committed Note for all
purposes of this Agreement, (iv) the Borrowers, the Agents and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and (v) 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, the Committed Notes 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 Committed Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation. Each Lender
shall, as agent of the Borrowers solely for the purposes of this Section, record
in book entries maintained by such Lender, 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.
(j) Any Lender 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 Borrower furnished to such Lender by or on behalf of
any Borrower; 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 Lender.
(k) Notwithstanding any other provision set forth in this Agreement,
any Lender 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 and the Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
82
(l) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle (a
"SPC"), identified as such in writing from time to time by the Granting Lender
to the Administrative Agent and the Borrowers, the option to provide to the
Borrowers all or any part of any Committed Advance that such Granting Lender
would otherwise be obligated to make to the Borrowers pursuant to this
Agreement; provided that (i) nothing herein shall constitute a commitment by any
SPC to make any Committed Advance, (ii) if an SPC elects not to exercise such
option or otherwise fails to provide all or any part of such Committed Advance,
the Granting Lender shall be obligated to make such Committed Advance pursuant
to the terms hereof. The making of a Committed Advance by an SPC hereunder shall
utilize the WC Commitment of the Granting Lender to the same extent, and as if,
such Committed Advance were made by such Granting Lender. Each party hereto
hereby agrees that no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Lender). In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the termination of this Agreement) that,
prior to the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior indebtedness of any SPC, it will
not institute against, or join any other person in instituting against, such SPC
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State thereof. In
addition, notwithstanding anything to the contrary contained in this Section
9.07(l), any SPC may (i) with notice to, but without the prior written consent
of, the Parent and the Administrative Agent and without paying any processing
fee therefor, assign all or a portion of its interests in any Committed Advances
to the Granting Lender or to any financial institutions (consented to by the
Parent and Administrative Agent) providing liquidity and/or credit support to or
for the account of such SPC to support the funding or maintenance of Committed
Advances and (ii) disclose on a confidential basis any non-public information
relating to its Committed Advances to any rating agency, commercial paper dealer
or provider of any surety, guarantee or credit or liquidity enhancement to such
SPC. This section may not be amended without the written consent of each SPC.
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 Borrower assumes
all risks of the acts or omissions of any beneficiary or transferee of any
Letter of Credit with respect to its use of such Letter of Credit. Neither the
Issuing Bank nor any of its officers, directors, employees or agents shall be
liable or responsible for: (a) the use that may be made of any Letter of Credit
or any acts or omissions of any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (c) payment by the Issuing
Bank against presentation of documents that do not strictly comply with the
terms of a Letter of Credit, including failure of any documents to bear any
reference or adequate reference to the Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except that such Borrower shall have a claim against the Issuing
Bank, and the Issuing Bank shall be liable to such Borrower, to the extent of
any direct, but not consequential, damages suffered by such Borrower
83
that such Borrower proves were caused by (i) the Issuing Bank's willful
misconduct or gross negligence as determined in a final, non-appealable judgment
by a court of competent jurisdiction in determining whether documents presented
under any Letter of Credit comply with the terms of the Letter of Credit or (ii)
the Issuing Bank's willful failure to make lawful payment under a Letter of
Credit after the presentation to it of a draft and certificates strictly
complying with the terms and conditions of the Letter of Credit. In furtherance
and not in limitation of the foregoing, the Issuing Bank may accept documents
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
SECTION 9.10. Confidentiality. Neither any Agent nor any Lender shall
disclose any Confidential Information to any Person without the consent of the
Parent, other than (a) to such Agent's or such Lender's Affiliates and their
officers, directors, employees, agents and advisors and to actual or prospective
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 Lender and (d) to any rating agency when required by it, provided that,
prior to any such disclosure, such rating agency shall undertake to preserve the
confidentiality of any Confidential Information relating to the Loan Parties
received by it from such Lender.
SECTION 9.11. Jurisdiction, Etc. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is a party in any New York State or Federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
SECTION 9.12. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 9.13. Termination of the Existing Credit Agreement. The
"Required Banks" under the Existing Credit Agreement, by executing this
Agreement, hereby agree to terminate the Existing Credit Agreement, as of the
Effective Date.
84
SECTION 9.14. Waiver of Jury Trial. Each of the Borrowers, the Agents
and the Lenders irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to any of the Loan Documents, the Advances or the
actions of any Agent or any Lender in the negotiation, administration,
performance or enforcement thereof.
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
TEMPEST REINSURANCE COMPANY LIMITED
The Common Seal of Tempest
Reinsurance Company Limited was
hereunto affixed in the
presence of:
______________________________
Director
______________________________
Secretary
ACE INA HOLDINGS INC.
By:________________________________
Title:
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED,
as Lead Arranger and Syndication Agent
By:
--------------------------------
Title:
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK,
as Administrative Agent
By:
--------------------------------
Title:
MELLON BANK, N.A., as Issuing Bank
By:
--------------------------------
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION,
as Documentation Agent
By:
--------------------------------
Title:
Initial Lenders
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL
CORPORATION
By:
--------------------------------
Title:
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK
By:
--------------------------------
Title:
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION
By:
--------------------------------
Title:
CHASE MANHATTAN BANK
By:
--------------------------------
Title:
MELLON BANK, N.A.
By:
--------------------------------
Title:
ABN-AMRO BANK N.V.
By:
--------------------------------
Title:
BANCO SANTANDER CENTRAL HISPANO,
S.A.
By:
--------------------------------
Title:
THE BANK OF NEW YORK
By:
--------------------------------
Title:
THE BANK OF NOVA SCOTIA
By:
--------------------------------
Title:
THE FIRST NATIONAL BANK OF
CHICAGO
By:
--------------------------------
Title:
BARCLAYS BANK PLC
By:
--------------------------------
Title:
BANQUE NATIONALE DE PARIS
By:
--------------------------------
Title:
By:
--------------------------------
Title:
THE BANK OF TOKYO-MITSUBISHI, LTD.
By:_______________________________
Title:
CIBC INC.
By:_______________________________
Title:
CITIBANK, N.A.
By:_______________________________
Title:
COMERICA BANK
By:_______________________________
Title:
COMMERZBANK AKTIENGESELLSCHAFT
NEW YORK BRANCH
By:_______________________________
Title:
By:_______________________________
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By:_______________________________
Title:
CREDIT SUISSE FIRST BOSTON
By:_______________________________
Title:
By:_______________________________
Title:
DEUTSCHE BANK AG, NEW YORK
AND/OR CAYMAN ISLANDS BRANCHES
By:_______________________________
Title:
By:_______________________________
Title:
FIRST UNION NATIONAL BANK
By:_______________________________
Title:
FLEET NATIONAL BANK
By:_______________________________
Title:
ING BANK N.V., LONDON BRANCH
By:_______________________________
Title:
By:_______________________________
Title:
KBC BANK
By:_______________________________
Title:
By:_______________________________
Title:
LLOYDS BANK PLC
By:_______________________________
Title:
By:_______________________________
Title:
ROYAL BANK OF CANADA
By:_______________________________
Title:
SOCIETE GENERALE
By:_______________________________
Title:
STATE STREET BANK AND TRUST
COMPANY
By:_______________________________
Title:
STANDARD CHARTERED BANK
By:_______________________________
Title:
By:_______________________________
Title: