EXHIBIT 10.49
EXECUTION COPY
$2,050,000,000
CREDIT AGREEMENT
Dated as of June 11, 1999
Among
ACE INA HOLDINGS INC.
as Borrower
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and
ACE LIMITED
as Parent
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and
THE SUBSIDIARY GUARANTORS NAMED HEREIN
as Subsidiary Guarantors
-- ---------- ----------
and
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders
-- ------- -------
and
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
as Lead Arranger and Syndication Agent
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and
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK
as Administrative Agent
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and
X.X. XXXXXX 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
SECTION 1.01. Certain Defined Terms......................................... 1
SECTION 1.02. Computation of Time Periods; Other Definitional Provisions.... 19
SECTION 1.03. Accounting Terms and Determinations........................... 19
ARTICLE II AMOUNTS AND TERMS OF THE COMMITTED ADVANCES
SECTION 2.01. The Committed Advances........................................ 20
SECTION 2.02. Making the Committed Advances................................. 20
SECTION 2.03. The Competitive Bid Advances.................................. 22
SECTION 2.04. Repayment of Committed Advances............................... 25
SECTION 2.05. Termination or Reduction of the Commitments................... 25
SECTION 2.06. Prepayments................................................... 25
SECTION 2.07. Interest...................................................... 26
SECTION 2.08. Fees.......................................................... 27
SECTION 2.09. Conversion of Advances........................................ 28
SECTION 2.10. Increased Costs, Etc.......................................... 28
SECTION 2.11. Payments and Computations..................................... 30
SECTION 2.12. Taxes......................................................... 31
SECTION 2.13. Sharing of Payments, Etc...................................... 33
SECTION 2.14. Use of Proceeds............................................... 34
SECTION 2.15. Defaulting Lenders............................................ 34
SECTION 2.16. Extension of Final Maturity Date.............................. 36
SECTION 2.17. Replacement of Affected Lender................................ 36
ARTICLE III CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to All Committed Borrowings in
Respect of the Acquisition................................. 37
SECTION 3.02. Conditions Precedent to Each Committed Borrowing.............. 41
SECTION 3.03. Conditions Precedent to Each Competitive Bid Borrowing........ 42
SECTION 3.04. Determinations Under Section 3.01............................. 42
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Parent and the Borrower.. 42
ARTICLE V COVENANTS OF THE PARENT AND THE BORROWER
SECTION 5.01. Affirmative Covenants.......................................... 47
SECTION 5.02. Negative Covenants............................................. 48
SECTION 5.03. Reporting Requirements......................................... 54
SECTION 5.04. Financial Covenants............................................ 56
ARTICLE VI EVENTS OF DEFAULT
SECTION 6.01. Events of Default.............................................. 57
ARTICLE VII GUARANTY
SECTION 7.01. The Guaranty................................................... 60
SECTION 7.02. Guaranty Unconditional......................................... 60
SECTION 7.03. Discharge Only Upon Payment In Full; Reinstatement In Certain
Circumstances.............................................. 61
SECTION 7.04. Waiver by the Guarantors....................................... 61
SECTION 7.05. Subrogation.................................................... 61
SECTION 7.06. Stay of Acceleration........................................... 62
SECTION 7.07. Continuing Guaranty; Assignments............................... 62
ARTICLE VIII THE AGENTS
SECTION 8.01. Authorization and Action....................................... 62
SECTION 8.02. Agents' Reliance, Etc.......................................... 63
SECTION 8.03. MGT and Affiliates............................................. 63
SECTION 8.04. Lender Credit Decision......................................... 63
SECTION 8.05. Indemnification................................................ 63
SECTION 8.06. Successor Agents............................................... 64
ARTICLE IX MISCELLANEOUS
SECTION 9.01. Amendments, Etc................................................ 65
SECTION 9.02. Notices, Etc................................................... 65
SECTION 9.03. No Waiver; Remedies............................................ 66
SECTION 9.04. Costs and Expenses............................................. 66
SECTION 9.05. Right of Set-off............................................... 67
SECTION 9.06. Binding Effect................................................. 67
SECTION 9.07. Assignments and Participations................................. 68
SECTION 9.08. Execution in Counterparts...................................... 72
SECTION 9.09. Confidentiality............................................... 72
SECTION 9.10. Jurisdiction, Etc............................................. 72
SECTION 9.11. Governing Law................................................. 73
SECTION 9.12. Waiver of Jury Trial.......................................... 73
SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule 4.01(b) - Subsidiaries
Schedule 5.02 (a) - Liens
Schedule 5.02 (b) - Surviving Debt
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 - Form of Solvency Certificate
Exhibit E-1 - Form of Opinion of Cayman Islands Counsel to the Parent
Exhibit E-2 - Form of Opinion of New York Counsel to the Loan Parties
Exhibit E-3 - Form of Opinion of Bermuda Counsel to the Subsidiary Guarantors
Exhibit F - Form of Designation Agreement
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of June 11, 1999 among ACE INA Holdings Inc., a
Delaware corporation (the "Borrower"), ACE Limited, a Cayman Islands company
(the "Parent"), the Subsidiary Guarantors (as hereinafter defined), the banks,
financial institutions and other institutional lenders listed on the signature
pages hereof as the Initial Lenders (the "Initial Lenders"), Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("ML&Co."), as syndication agent (together
with any successor syndication agent appointed pursuant to Article VIII, the
"Syndication Agent") and lead arranger (the "Lead Arranger"), Xxxxxx Guaranty
Trust Company of New York ("MGT"), as administrative agent (together with any
successor administrative agent appointed pursuant to Article VIII, the
"Administrative Agent" and, together with the Syndication Agent, the "Agents")
for the Lenders (as hereinafter defined), and X.X. Xxxxxx Securities Inc. ("X.X.
Xxxxxx"), as co-arranger (the "Co-Arranger").
PRELIMINARY STATEMENTS:
(1) The Parent or one of its Affiliates (as hereinafter defined) intends to
acquire (the "Acquisition") the domestic and international property and casualty
businesses ("CIGNAP&C") of Cigna Corporation (the "Seller"). Currently,
CIGNAP&C is a division of the Seller.
(2) The Borrower has requested that, concurrently with the consummation of
the Acquisition (or any portion thereof), the Lenders lend to the Borrower up to
$2,050,000,000 to pay to the Seller a portion of the cash consideration for the
Acquisition and to pay transaction fees and expenses and for other general
corporate purposes. The Lenders have indicated their willingness to agree to
lend such amounts 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):
"Acquisition" has the meaning specified in the Preliminary Statements.
"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 Preferred Securities).
2
"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 Xxxxxx
Guaranty Trust Company at its office at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Account No 000-00-000, Attention: Xxxx Xxxx, or such other account
as the Administrative Agent shall specify in writing to the Lenders.
"Advance" means a Committed Advance or a Competitive Bid Advance.
"Affected Lender" means any Lender that (i) has made, or notified the
Borrower that an event or circumstance has occurred which may give rise to,
a demand for compensation under Section 2.10 (a) or (b) or Section 2.12
(but only so long as the event or circumstance giving rise to such demand
or notice is continuing) or (ii) has notified the Borrower (which notice
has not been withdrawn) of any event or circumstance of a type described in
Section 2.10 (c) or (d).
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 5% or more of the
Voting Interests of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Interests, by contract or otherwise.
"Agents" has the meaning specified in the recital of parties to this
Agreement.
"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:
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Public Debt Rating Applicable Facility Fee
S&P/Xxxxx'x Percentage
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Xxxxx 0 0.100%
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A-/A3 and above
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Xxxxx 0 0.125%
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BBB+/Baa1
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Xxxxx 0 0.150%
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BBB/Baa2
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Xxxxx 0 0.200%
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BBB-/Baa3
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Xxxxx 0 0.300%
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Lower than Level 4
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"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/Xxxxx'x for for
Base Rate Advances Eurodollar Rate
Advances
-------------------------------------------------------------
Xxxxx 0 0.00% 0.400%
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A-/A3 and above
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Xxxxx 0 0.00% 0.500%
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BBB+/Baa1
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Xxxxx 0 0.00% 0.600%
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BBB/Baa2
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Xxxxx 0 0.00% 0.675%
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BBB-/Baa3
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Xxxxx 0 0.00% 1.325%
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Lower than Level 4
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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 Commitments on such day, the Applicable Margin for such
date shall be the percentage per annum determined above plus 0.125%;
provided further that, if the Final Maturity Date is extended pursuant to
the provisions of Section 2.16, the Applicable Margin for Eurodollar Rate
Advances shall be increased by 0.250% and the Applicable Margin for Base
Rate Advances shall be a percentage (not less than 0%) equal to Applicable
Margin for Eurodollar Rate Loans less 1.00%.
"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.
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"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.
"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 a Committed Advance that bears interest as
provided in Section 2.07(a)(i).
"Borrower" has the meaning specified in the recital of parties to this
Agreement.
"Borrower's Account" means the account maintained by the Borrower with
Mellon PSFS at its office at 000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000 Account No. 0-000-000, Attention: Xxxxx Xxxxxx, or such other account
as the Borrower shall specify in writing to the Administrative Agent.
"Borrowing" means a Committed Borrowing or a Competitive Bid
Borrowing.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advances or LIBO Rate Advances,
on which dealings are carried on in the London interbank market.
"Capitalized Leases" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
"Change of Control" means the occurrence of any of the following: (a)
any Person or two or more Persons acting in concert shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the Securities
and Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly, of Voting Interests of the Parent (or other
securities convertible into such Voting Interests) representing 30% or more
of the combined voting power of all Voting Interests of the Parent; or (b)
a majority of the board of directors of the Parent shall not be Continuing
Members; or (c) any Person or two or more Persons acting in concert shall
have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that results in its or their acquisition of the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of the Parent; or (d) the Parent shall
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cease to own, directly or indirectly, 100% of the Equity Interests in the
Borrower (other than any Preferred Securities); or (e) the Parent, or any
other Person controlled by the Parent, shall create, incur, assume or
suffer to exist any Lien on the Equity Interests in the Borrower owned by
it.
"CIGNAP&C" has the meaning specified in the Preliminary Statements.
"Co-Arranger" has the meaning specified in the recital of parties to
this Agreement.
"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 "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 "Commitment", as such amount may be reduced at or prior to such
time pursuant to Section 2.05.
"Committed Advance" has the meaning specified in Section 2.01.
"Committed Borrowing" means a borrowing consisting of simultaneous
Committed Advances of the same Type made by the Lenders.
"Committed Facility" means, at any time, the aggregate amount of the
Lenders' Commitments at such time.
"Committed Note" means a promissory note of the Borrower payable to
the order of any Lender, in substantially the form of Exhibit A-1 hereto,
evidencing the aggregate indebtedness of the 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 the Borrower
as part of a Competitive Bid Borrowing resulting from the competitive
bidding procedure described in Section 2.03 and refers to a Fixed Rate
Advance or a LIBO Rate Advance.
"Competitive Bid Borrowing" means a borrowing consisting of
simultaneous Competitive Bid Advances from each of the Lenders whose offer
to make one or more Competitive Bid Advances as part of such borrowing has
been accepted under the competitive bidding procedure described in Section
2.03.
"Competitive Bid Note" means a promissory note of the Borrower payable
to the order of any Lender, in substantially the form of Exhibit A-2
hereto, evidencing the indebtedness of the 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
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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 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
7
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
Committed Advances of one Type into Committed Advances of the other Type
pursuant to Section 2.09 or 2.10.
"Debenture" means debt securities issued by the Parent or the Borrower
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 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
8
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 the Borrower 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 Committed Advance required to be made by such Lender to the
Borrower pursuant to Section 2.01 or 2.02 at or prior to such time that has
not been made by such Lender or by the Administrative Agent for the account
of such Lender pursuant to Section 2.02(d) as of such time.
"Defaulted Amount" means, with respect to any Lender at any time, any
amount required to be paid by such Lender to any Agent or any other Lender
hereunder or under any other Loan Document at or prior to such time that
has not been so paid as of such time, including, without limitation, any
amount required to be paid by such Lender to (a) the Administrative Agent
pursuant to Section 2.02(d) to reimburse the Administrative Agent for the
amount of any Committed Advance made by the Administrative Agent for the
account of such Lender, (b) any other Lender pursuant to Section 2.13 to
purchase any participation in Committed Advances owing to such other Lender
and (c) any Agent pursuant to Section 8.05 to reimburse such Agent for such
Lender's ratable share of any amount required to be paid by the Lenders to
such Agent as provided therein.
"Defaulting Lender" means, at any time, any Lender that, at such time,
(a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take any
action or be the subject of any action or proceeding of a type described in
Section 6.01(f).
"Designated 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 Borrower (such acceptance, in
the case of the Borrower, not to be unreasonably withheld), in
substantially the form of Exhibit I hereto.
"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
9
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 the Borrower and the Administrative Agent.
"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, 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, 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.
10
"Equity Issuance" means one or more issuances by the Parent and/or
the Borrower 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 specified, its
Domestic Lending Office), or such other office of such Lender as such
Lender may from time to time specify to the Borrower 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 Xxxxx Markets (Telerate) Page 3750 (or any successor page)
as the London interbank offered rate for deposits in U.S. dollars at 11:00
A.M. (London time) two Business Days before the first day of such Interest
Period for a period equal to such Interest Period (provided that, if for
any reason such rate is not available, the term "Eurodollar Rate" shall
mean, for any Interest Period for all Eurodollar Rate Advances comprising
part of the same Committed Borrowing, the rate per annum (rounded upwards,
if not an integral multiple of 1/32 or 1/100 of 1%, to the nearest 1/100 of
1%) appearing on Reuters Screen LIBO Page as the London interbank offered
rate for deposits in Dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates).
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Committed Borrowing
means the reserve percentage applicable two Business Days before the first
day of such Interest Period under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve requirement) for a
member bank of the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or
11
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 Debt" means Debt of each Loan Party and its Subsidiaries
outstanding immediately before giving effect to the Acquisition.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the
average of the quotations for such day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"Fee Letter" means the fee letter dated January 11, 1999 among the
Parent, the Arrangers, the Administrative Agent and Xxxxxxx Xxxxx, as
amended.
"Final Maturity Date" means (a) the Termination Date or (b) if
extended pursuant to Section 2.16, the date requested by the Borrower
pursuant to Section 2.16, but in no event shall such date be later than the
first anniversary of the Termination Date.
"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).
"Guarantors" means the Parent and the Subsidiary Guarantors.
"Guaranty" means the undertaking by each of the Guarantors under
Article VII.
"Hazardous Materials" means (a) petroleum or petroleum products, by-
products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated
12
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 initial Committed Borrowing
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 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 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 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 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) the Borrower may not select any Interest Period with respect
to any Eurodollar Rate Advance that ends after the Final Maturity
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
13
(d) whenever the first day of any Interest Period (other than a
one or two week Interest Period) occurs on a day of an initial
calendar month for which there is no numerically corresponding day in
the calendar month that succeeds such initial calendar month by the
number of months equal to the number of months in such Interest
Period, such Interest Period shall end on the last Business Day of
such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any Equity Interests or Debt or the
assets comprising a division or business unit or a substantial part or all
of the business of such Person, any capital contribution to such Person or
any other direct or indirect investment in such Person, including, without
limitation, any acquisition by way of a merger or consolidation and any
arrangement pursuant to which the investor incurs Debt of the types
referred to in clause (h) or (i) of the definition of "Debt" in respect of
such Person; provided, however, that any purchase by any Loan Party or any
Subsidiary of any catastrophe-linked instruments which are (x) issued for
the purpose of transferring traditional reinsurance risk to the capital
markets and (y) purchased by such Loan Party or Subsidiary in accordance
with its customary reinsurance underwriting procedures, or the entry by any
Loan Party or any Subsidiary into swap transactions 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.
"X.X. Xxxxxx" has the meaning specified in the recital of parties to
this Agreement.
"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.
"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 Xxxxx 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
14
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, and (iii)
the Fee Letter, in each case as amended.
"Loan Parties" means the Borrower and the Guarantors.
"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(TM)" or any substantially similar
securities).
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change in the
business, financial condition, operations or properties of the Parent and
its Subsidiaries, taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition, operations or properties of (i) the Parent and its
Subsidiaries, taken as a whole, or (ii) the Borrower and its Subsidiaries,
taken as a whole, (b) the rights and remedies of any Agent or any Lender
under any Transaction Document or (c) the ability of the Loan Parties,
taken as a whole, to perform their obligations under the Transaction
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.
"Xxxxxxx Xxxxx" means Xxxxxxx Xxxxx 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 Xxxxx'x Investors Service, Inc.
15
"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 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.
"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 2.12(b).
"Parent" has the meaning specified in the recital of parties to this
Agreement.
16
"Parent Five-Year Revolving Credit Facility" means the Five-Year
Revolving Credit Agreement dated as of the date hereof among the Parent,
the subsidiary guarantors referred to therein, the lenders party thereto,
ML&Co. as lead arranger and syndication agent, MGT as administrative agent
and X.X. Xxxxxx as co-arranger, as the same may be amended, modified or
otherwise supplemented from time to time.
"Parent 364-Day Revolving Credit Facility" means the 364-Day Revolving
Credit Agreement dated as of the date hereof among the Parent, the
subsidiary guarantors referred to therein, the lenders party thereto,
ML&Co. as lead arranger and syndication agent, MGT as administrative agent
and X.X. Xxxxxx as co-arranger, as the same may be amended, modified or
otherwise supplemented from time to time.
"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.
"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 therein
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.
17
"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.
"Prepayment Percentage" mean (x) until such time as the Commitments
hereunder are reduced to $750,000,000, 100% and (y) thereafter, 50%.
"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 Commitment at such time (or, if the
Commitments shall have been terminated pursuant to Section 2.05 or 6.01,
such Lender's Commitment as in effect immediately prior to such
termination) and the denominator of which is the Committed Facility at such
time (or, if the 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 Moody's, 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
Moody's 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 Parent 364-Day Revolving
Credit Facility and the Committed Facility in accordance with their
respective terms and (ii) neither S&P nor Moody's 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 Moody's 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 Moody's 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 Moody's shall change the basis on which ratings are established, each
reference to the Public Debt Rating announced by S&P or Moody's, as the
case may be, shall refer to the then equivalent rating by S&P or Moody's,
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.
18
"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 aggregate principal amount of the
Committed Advances outstanding at such time, or, if no such principal
amount is outstanding at such time, Lenders holding at least a majority in
interest of the aggregate of the Commitments; provided, however, that if
any Lender shall be a Defaulting Lender at such time, there shall be
excluded from the determination of Required Lenders at such time (A) the
aggregate principal amount of the Committed Advances owing to such Lender
(in its capacity as a Lender) and outstanding at such time and (B) the
Unused 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
XxXxxx-Xxxx Companies, Inc.
"Seller" has the meaning specified in the Preliminary Statements to
this Agreement.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the present
fair salable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay such debts and liabilities as they mature and
(d) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount that, in
the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual
or matured liability.
"SPC" has the meaning specified in Section 9.07(l).
"Special Purpose Trust" means a special purpose business trust
established by the Parent or the Borrower of which the Parent or the
Borrower will hold all the common interests,
19
which will be the issuer of the Preferred Securities, and which will loan
to Parent or the Borrower (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.
"Subsidiary Guarantors" means ACE Bermuda Insurance Ltd. and Tempest
Reinsurance Company Limited.
"Surviving Debt" means Debt of each Loan Party and its Subsidiaries
outstanding immediately before and after giving effect to the transactions
contemplated by the Transaction Documents.
"Syndication Agent" has the meaning specified in the recital of
parties to this Agreement.
"Taxes" has the meaning specified in Section 2.12(a).
"Termination Date" means the earlier of June 9, 2000 and the date of
termination in whole of the Commitments.
"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 (iii) the then issued and outstanding
amount of Preferred Securities and (without duplication) Debentures.
"Transaction Documents" means, collectively, the Loan Documents and
the Purchase Agreement.
"Type" refers to the distinction between Committed Advances bearing
interest at the Base Rate and Committed Advances bearing interest at the
Eurodollar Rate.
"Unused Commitment" means, with respect to any Lender at any time, (a)
such Lender's Commitment at such time minus (b) the sum of (i) the
aggregate principal amount of all Committed Advances made by such Lender
(in its capacity as a Lender) hereunder plus (ii) such Lender's Pro Rata
Share of the aggregate principal amount of all Competitive Bid Advances
hereunder.
20
"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.
"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 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 COMMITTED ADVANCES
SECTION 2.01. The Committed Advances. Each Lender severally agrees,
on the terms and conditions hereinafter set forth, to make advances (each a
"Committed Advance") to the Borrower from time to time on any Business Day
during the period from the date hereof until the Termination Date
21
in an amount for each such Committed Advance not to exceed such Lender's Unused
Commitment at such time; provided, however, that at any time until the
Acquisition has been fully consummated the sum of (i) the aggregate amount of
Committed Advances outstanding at such time plus (ii) the aggregate amount of
"Committed Advances" under the Parent 364-Day Revolving Credit Facility
outstanding at such time shall not exceed a percentage of the sum of (i) the
Commitments hereunder at the time immediately prior to the first Borrowing
hereunder plus the "Commitments" under the Parent 364-Day Revolving Credit
Facility at the time prior to the first Borrowing thereunder equal to the
percentage that the portion of the purchase price allocable (in the reasonable
judgment of the Administrative Agent) to the assets acquired at or prior to such
time in connection with the Acquisition bears to the aggregate purchase price
for all assets to be acquired in connection with the Acquisition. 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 Commitments. Within the
limits of each Lender's Unused Commitment in effect from time to time, the
Borrower may borrow under this Section 2.01, prepay pursuant to Section 2.06(a)
and reborrow under this Section 2.01.
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 the 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 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 by crediting the Borrower's Account.
(b) Anything in subsection (a) above to the contrary notwithstanding,
(i) the Borrower may not select Eurodollar Rate Advances if the obligation of
the Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to
Section 2.09 or 2.10 and (ii) the Committed Advances may not be outstanding as
part of more than ten (10) separate Committed Borrowings.
(c) Each Notice of Committed Borrowing shall be irrevocable and
binding on the Borrower. 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 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
22
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 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 the Borrower severally agree to repay or
pay to the Administrative Agent forthwith on demand such corresponding amount
and to pay interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid or paid to the
Administrative Agent, at (i) in the case of the Borrower, the interest rate
applicable at such time under Section 2.07 to Advances comprising such Committed
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall pay to the Administrative Agent such corresponding amount, such
amount so paid shall constitute such Lender's Committed Advance as part of such
Committed 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 the Borrower may make Competitive Bid Borrowings under
this Section 2.03 from time to time on any Business Day during the period from
the date hereof until the date occurring 7 days prior to the Termination Date in
the manner set forth below; provided that, following the making of each
Competitive Bid Borrowing, the aggregate amount of the Advances then outstanding
shall not exceed the aggregate amount of the Commitments of the Lenders.
(i) The 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
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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 the 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 the 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 the Borrower. The
Administrative Agent shall in turn promptly notify each Lender of each
request for a Competitive Bid Borrowing received by it from the 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 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), 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 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 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 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:
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(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 the Borrower by the Administrative Agent on behalf of such
Lender for such Competitive Bid Advance pursuant to paragraph (ii)
above) to be made by each such Lender as part of such Competitive Bid
Borrowing, and reject any remaining offers made by Lenders pursuant to
paragraph (ii) above by giving the Administrative Agent notice to that
effect. The Borrower 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 notifies the Administrative Agent that such
Competitive Bid Borrowing is cancelled 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 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 the
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 at the Administrative
Agent's address referred to in Section 8.02. Promptly after each
Competitive Bid Borrowing, the Administrative Agent will notify each Lender
of the amount of the Competitive Bid Borrowing.
25
(vi) If the Borrower 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 the Borrower. The Borrower shall indemnify each Lender
against any loss, cost or expense incurred by such Lender as a result of
any failure to fulfill on or before the date specified in the related
Notice of Competitive Bid Borrowing for such Competitive Bid Borrowing the
applicable conditions set forth in Article III, including, without
limitation, any loss (excluding loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits
or other funds acquired by such Lender to fund the Competitive Bid Advance
to be made by such Lender as part of such Competitive Bid Borrowing when
such Competitive Bid Advance, as a result of such failure, is not made on
such date.
(b) Each Competitive Bid Borrowing shall be in an aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof and,
following the making of each Competitive Bid Borrowing, the Borrower shall be in
compliance with the limitation 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, the 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 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
the 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. The Borrower shall
have no right to prepay any principal amount of any Competitive Bid Advance
unless, and then only on the terms, specified by the Borrower for such
Competitive Bid Advance in the related Notice of Competitive Bid Borrowing
delivered pursuant to subsection (a)(i) above.
(e) The Borrower 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 the 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, the 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.
26
(f) The indebtedness of the Borrower resulting from each Competitive
Bid Advance made to the Borrower as part of a Competitive Bid Borrowing shall be
evidenced by the Competitive Bid Note of the Borrower payable to the order of
the Lender making such Competitive Bid Advance.
(g) Upon delivery of each Notice of Competitive Bid Borrowing, the
Borrower shall pay a non-refundable fee of $1,500 to the Administrative Agent
for its own account.
SECTION 2.04. Repayment of Committed Advances. The Borrower shall
repay to the Administrative Agent for the ratable account of the Lenders on the
Final Maturity Date the aggregate outstanding principal amount of the Committed
Advances then outstanding.
SECTION 2.05. Termination or Reduction of the Commitments. (a)
Optional. The Borrower may, upon at least three Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part the Unused
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 Commitments.
(b) Mandatory. The Committed Facility shall be automatically and
permanently reduced on each date on which prepayment thereof would be required
to be made pursuant to Section 2.06(b) in an amount equal to the amount of such
prepayment (irrespective of whether any Committed Advances are outstanding or
not), provided that each such reduction of the Committed Facility shall be made
ratably among the Lenders in accordance with their Commitments.
SECTION 2.06. Prepayments. (a) Optional. The 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 the Borrower shall, prepay
the outstanding aggregate principal amount of the Committed Advances comprising
part of the same Committed Borrowing in whole or ratably in part, together with
accrued interest to the date of such prepayment on the aggregate principal
amount prepaid; provided, however, that (x) each partial prepayment shall be in
an aggregate principal amount of $10,000,000 or an integral multiple of
$1,000,000 in excess thereof and (y) if any prepayment of
a Eurodollar Rate Advance is made on a date other than the last day of an
Interest Period for such Committed Advance, the Borrower shall also pay any
amounts owing pursuant to Section 9.04(c).
(b) Mandatory. (i) The Borrower shall, on the date of receipt of the
Net Cash Proceeds by the Borrower or any of its Subsidiaries from (A) the sale,
lease, transfer or other disposition of any assets of the Borrower or any of its
Subsidiaries (other than any sale, lease, transfer or other disposition of
assets pursuant to clause (i), (ii), (iii) or (v) of Section 5.02(e)), (B) the
incurrence or issuance by the Borrower or any of its Subsidiaries of any Debt
for borrowed money (other than under this Agreement or Debt issued pursuant to
Section 5.02 (b) (vi)) and (C) the sale or issuance by the Borrower or any of
its Subsidiaries of any Equity Interests (including Preferred Securities) to
Persons that are not Affiliates of the Loan Parties, prepay an aggregate
principal amount of the Committed Advances comprising part of the same Committed
Borrowings in an amount equal to the Prepayment Percentage of the amount of such
Net Cash Proceeds; provided that no prepayment shall be required to
27
the extent of the first $25,000,000 of Net Cash Proceeds generated by any of the
events described under (A), (B) or (C) of this Section 2.06, provided that no
more than an aggregate amount of Net Cash Proceeds equal to $75,000,000 shall be
excluded from the requirements of this Section 2.06(b)(i)); provided further
that any portion of such prepayment that would be applied to any Eurodollar Rate
Advance and would be made on a date other than the last day of an Interest
Period for such Committed Advance shall be so paid and applied, at the option of
the Borrower, within two weeks upon receipt.
(ii) All prepayments under this subsection (b) 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 2.07. Interest. (a) Scheduled Interest. The Borrower shall
pay interest on the unpaid principal amount of each Committed Advance owing to
each Lender from the date of such Committed Advance until such principal amount
shall be paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Committed 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 Final Maturity Date.
(ii) Eurodollar Rate Advances. During such periods as such Committed
Advance is a Eurodollar Rate Advance, a rate per annum equal at all times
during each Interest Period for such Committed Advance to the sum of (A)
the Eurodollar Rate for such Interest Period for such Committed Advance
plus (B) the Applicable Margin in effect from time to time, payable in
arrears on the last day of such Interest Period and, if such Interest
Period has a duration of more than three months, on each day that occurs
during such Interest Period every three months from the first day of such
Interest Period and on the date such Eurodollar Rate Advance shall be
Converted or paid in full.
(iii) Regulation D Compensation. Each Lender that is subject to
reserve requirements of the Board of Governors of the Federal Reserve
System (or any successor) may require the 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 the 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, the
Borrower shall pay interest on (i) the unpaid principal amount of each Committed
Advance owing to each Lender, payable in arrears on the dates referred to in
clause (a)(i) or (a)(ii) above, at a rate per annum equal at all times to 2% per
annum above the rate per annum required to be paid on such Committed Advance
pursuant to clause (a)(i) or
28
(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 Committed
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 Committed Borrowing pursuant to Section 2.02(a), a
notice of Conversion pursuant to Section 2.09 or a notice of selection of an
Interest Period pursuant to the terms of the definition of "Interest Period",
the Administrative Agent shall give notice to the Borrower and each Lender of
the applicable Interest Period and the applicable interest rate determined by
the Administrative Agent for purposes of clause (a)(i) or (a)(ii) above.
SECTION 2.08. Fees. (a) Ticking Fee. In respect of any portion of
the Commitments, the Borrower 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 Commitments is
available to be borrowed pursuant to the provisions of Section 3.01, payable in
arrears on the date of the initial Committed Borrowing hereunder, 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 Commitment of each Lender during such
quarter; provided, however, that no ticking fee shall accrue on the 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
Commitments on which the facility fee is accruing pursuant to Section 2.08(b).
(b) Facility Fee. The Borrower shall 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 June 30,
1999, and on the Final Maturity Date, at the rate of the Applicable Facility Fee
Percentage on the average daily available Commitment of each Lender during such
quarter; provided, however, that no facility fee shall accrue on any of the
Commitments of a Defaulting Lender so long as such Lender shall be a Defaulting
Lender.
(c) Agents' Fees. The Borrower shall pay to each Agent for its own
account such fees as may from time to time be agreed between the Borrower and
such Agent.
SECTION 2.09. Conversion of Advances. (a) Optional. The Borrower
may on any Business Day, upon notice given to the Administrative Agent not later
than 11:00 A.M. (New York City time) on the third Business Day prior to the date
of the proposed Conversion and subject to the provisions of Section 2.10,
Convert all or any portion of the Committed Advances of one Type
29
comprising the same Committed Borrowing into Committed Advances of the other
Type; provided, 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 for a Committed Borrowing 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 Committed Borrowing shall be made ratably among the
Lenders in accordance with their 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 Committed Advances. Each notice of Conversion shall be irrevocable and
binding on the 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 Borrower 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 Borrower 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 2.10. Increased Costs, Etc. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of, in each case after
the date hereof, any law or regulation or (ii) the compliance with any guideline
or request issued after the date hereof from any central bank or other
governmental authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender of agreeing to make or of making, funding
or maintaining Eurodollar Rate Advances or LIBO Rate Advances (excluding, for
purposes of this Section 2.10, any such increased costs resulting from (x) Taxes
or Other Taxes (as to which Section 2.12 shall govern) and (y) changes in the
basis of taxation of overall net income or overall gross income by the United
States or by the foreign jurisdiction or state under the laws of which such
Lender is organized or has its Applicable Lending Office or any political
subdivision thereof), then the Borrower shall from time to time, within 5 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, pay 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,
30
submitted to the Borrower by such Lender, shall be conclusive and binding for
all purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any change in or in
the interpretation of any law or regulation, in each case after the date hereof,
or (ii) the compliance with any guideline or request issued after the date
hereof from any central bank or other governmental authority (whether or not
having the force of law), there shall be any increase in the amount of capital
required or expected to be maintained by any Lender or any corporation
controlling such Lender as a result of or based upon the existence of such
Lender's commitment to lend hereunder and other commitments of such type, then,
within 5 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 Borrower shall 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 hereunder. A certificate as to such amounts submitted to the Borrower 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 a 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 Borrower
through the Administrative Agent, (i) each Eurodollar Rate Advance or LIBO Rate
Advance, as the case may be, of such Lender will automatically, upon such
demand, Convert into a Base Rate Advance or an Advance that bears interest at
the rate set forth in Section 2.07(a)(i), as the case may be, and (ii) the
obligation of such Lender to make Eurodollar Rate Advances or LIBO Rate Advances
or to Convert Committed Advances into Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the Borrower 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 Borrower 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 Borrower to pay any amount
pursuant to subsection (a) or (b) above or pursuant to Section 2.12 or (ii) the
occurrence of any circumstances of the nature described in subsection (c) or (d)
above (and, if any Lender has given notice of any event described in clause (i)
or (ii) above and thereafter such event ceases to exist, such Lender shall
promptly so notify the Borrower 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 Borrower of) any event
described in clause (i) or (ii) of the preceding sentence and such designation
will not, in such Lender's good faith judgment, be otherwise disadvantageous to
such Lender.
(f) Notwithstanding the provisions of subsections (a) and (b) above or
Section 2.12 (and without limiting subsection (e) above), if any Lender fails to
notify the Borrower of any event or circumstance that will entitle such Lender
to compensation pursuant subsection (a) or (b) above or Section 2.12 within 120
days after such Lender obtains actual knowledge of such event or circumstance,
then such Lender shall not be entitled to compensation, from the Borrower for
any amount arising prior to the date which is 120 days before the date on which
such Lender notifies the Borrower of such event or circumstance.
SECTION 2.11. Payments and Computations. (a) The Borrower shall
make each payment hereunder and under the Notes, irrespective of any right of
counterclaim or set-off (except as otherwise provided in Section 2.15), 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 the 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
the 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) The 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 the 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
32
rate shall be made by the Administrative Agent on the basis of a year of 365 or,
if applicable, 366 days; all other computations of interest and fees shall be
made by the Administrative Agent on the basis of a year of 360 days. All such
computations shall be made for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such interest
or fees are payable. Each determination by the Administrative Agent of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fee, as the case may be;
provided, however, that, if such extension would cause payment of interest on or
principal of Eurodollar Rate Advances or LIBO Rate Advances to be made in the
next following calendar month, such payment shall be made on the next preceding
Business Day.
(e) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to any Lender
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the 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 the 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 2.12. Taxes. (a) Any and all payments by any Loan Party
hereunder or under the Notes shall be made, in accordance with Section 2.11,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and each Agent, taxes
that are imposed on its overall net income by the United States and taxes that
are imposed on its overall net income (and franchise taxes imposed in lieu
thereof) by the state or foreign jurisdiction under the laws of which such
Lender or such Agent, as the case may be, is organized or any political
subdivision thereof and, in the case of each Lender, taxes that are
imposed on its overall net income (and franchise taxes imposed in lieu thereof)
by the state or foreign jurisdiction of such Lender's Applicable Lending Office
or any political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities in respect of
payments hereunder or under the Notes being herein referred to as "Taxes"). If
any Loan Party shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note to any Lender or any Agent, (i)
the sum payable by such Loan Party shall be increased as may be necessary so
that after such Loan Party and the Administrative Agent have made all required
deductions (including deductions applicable to additional sums payable under
this Section 2.12) such Lender or such Agent, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) such Loan Party shall make all such deductions and (iii) such Loan Party
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
33
(b) In addition, each Loan Party shall pay any present or future
stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performance under, or otherwise with respect to,
this Agreement or the Notes (herein referred to as "Other Taxes").
(c) Each Loan Party shall indemnify each Lender and each Agent for and
hold them harmless against the full amount of Taxes and Other Taxes, and for the
full amount of taxes of any kind imposed by any jurisdiction on amounts payable
under this Section 2.12, imposed on or paid by such Lender or such Agent (as the
case may be) and any liability (including penalties, additions to tax, interest
and expenses) arising therefrom or with respect thereto. This indemnification
payment shall be made within 30 days from the date such Lender or such Agent (as
the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, each Loan
Party shall furnish to the Administrative Agent, at its address referred to in
Section 9.02, the original or a certified copy of a receipt evidencing such
payment. In the case of any payment hereunder or under the Notes by or on
behalf of a Loan Party through an account or branch outside the United States or
by or on behalf of a Loan Party by a payor that is not a United States person,
if such Loan Party determines that no Taxes are payable in respect thereof, such
Loan Party shall furnish, or shall cause such payor to furnish, to the
Administrative Agent, at such address, an opinion of counsel acceptable to the
Administrative Agent stating that such payment is exempt from Taxes. For
purposes of subsections (d) and (e) of this Section 2.12, the terms "United
States" and "United States person" shall have the meanings specified in Section
7701(a)(9) and 7701(a)(10) of the Internal Revenue Code, respectively.
(e) Each Lender organized under the laws of a jurisdiction outside the
United States shall, on or prior to the date of its execution and delivery of
this Agreement in the case of each Initial Lender, and on the date 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 Borrower (but only so long thereafter as such Lender remains lawfully able
to do so), provide each of the Administrative Agent and the Borrower 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 Borrower and is not a controlled foreign corporation
related to the Borrower (within the meaning of Section 864(d)(4) of the Internal
Revenue Code)), as appropriate, or any successor or other form prescribed by the
Internal Revenue Service, certifying that such Lender is exempt from or entitled
to a reduced rate of United States withholding tax on payments pursuant to this
Agreement or the Notes or, in the case of a Lender providing a form W-8,
certifying that such Lender is a foreign corporation, partnership, estate or
trust. If the forms provided by a Lender at the time such Lender first becomes a
party to this Agreement indicate a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from Taxes unless and until such Lender provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be
34
considered excluded from Taxes for periods governed by such forms; provided,
however, that if, at the effective date of the Assignment and Acceptance
pursuant to which a Lender becomes a party to this Agreement, the Lender
assignor was entitled to payments under subsection (a) of this Section 2.12 in
respect of United States withholding tax with respect to interest paid at such
date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
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
Borrower 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 Borrower with the appropriate form described in
subsection (e) above (other than if such failure is due to a change in law
occurring after the date on which a form originally was required to be provided
or if such form otherwise is not required under subsection (e) above), such
Lender shall not be entitled to indemnification under subsection (a) or (c) of
this Section 2.12 with respect to Taxes imposed by the United States by reason
of such failure; provided, however, that should a Lender become subject to Taxes
because of its failure to deliver a form required hereunder, the Borrower 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 Borrower and the
Guarantors that, as of the date such Lender becomes a party to this Agreement,
such Lender is entitled to receive payments hereunder from the Borrower and the
Guarantors without deduction or withholding for or on account of any Taxes.
SECTION 2.13. Sharing of Payments, Etc. If any Lender shall obtain
at any time any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise, other than as a result of an assignment
pursuant to Section 9.07) (a) on account of obligations due and payable to such
Lender hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such obligations due and
payable to such Lender at such time to (ii) the aggregate amount of the
obligations due and payable to all Lenders hereunder and under the Notes at such
time) of payments on account of the obligations due and payable to all Lenders
hereunder and under the Notes at such time obtained by all the Lenders at such
time or (b) on account of obligations owing (but not due and payable) to such
Lender hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such obligations owing to such
Lender at such time to (ii) the aggregate amount of the obligations owing (but
not due and payable) to all Lenders hereunder and under the Notes at such time)
of payments on account of the obligations owing (but not due and payable) to all
Lenders hereunder and under the Notes at such time obtained by all of the
Lenders at such time, such Lender shall forthwith purchase from the other
Lenders such interests or participating interests in the obligations due and
payable or owing to them, as the case may be, as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each other
Lender shall be rescinded and such other Lender shall
35
repay to the purchasing Lender the purchase price to the extent of such Lender's
ratable share (according to the proportion of (i) the purchase price paid to
such Lender to (ii) the aggregate purchase price paid to all Lenders) of such
recovery together with an amount equal to such Lender's ratable share (according
to the proportion of (i) the amount of such other Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of any interest
or other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. The Borrower agrees that any Lender so purchasing an
interest or participating interest from another Lender pursuant to this Section
2.13 may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off) with respect to such interest or
participating interest, as the case may be, as fully as if such Lender were the
direct creditor of the Borrower in the amount of such interest or participating
interest, as the case may be.
SECTION 2.14. Use of Proceeds. The proceeds of the Committed
Advances shall be available (and the Borrower agrees that it shall use such
proceeds) solely to pay to the Seller a portion of the cash consideration in
respect of the Acquisition, pay transaction fees and expenses, provide working
capital for such Borrower and its Subsidiaries and for other general corporate
purposes.
SECTION 2.15. Defaulting Lenders. (a) In the event that, at any one
time, (i) any Lender shall be a Defaulting Lender, (ii) such Defaulting Lender
shall owe a Defaulted Advance to the Borrower and (iii) the 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 the Borrower may, to the fullest
extent permitted by applicable law, set off and otherwise apply the obligation
of the 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, the 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 the 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 Committed Borrowing shall be
Eurodollar Rate Advances on the date such Committed Advance is deemed to be made
pursuant to this subsection (a). The Borrower shall notify the Administrative
Agent at any time the 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 the Borrower to or for the account of such Defaulting
Lender which is paid by the Borrower, after giving effect to the amount set off
and otherwise applied by the Borrower pursuant to this subsection (a), shall be
applied by the Administrative Agent as specified in subsection (b) or (c) of
this Section 2.15.
(b) In the event that, at any one time, (i) any Lender shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to
any Agent or any of the other Lenders and (iii) the 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
36
applicable law, apply at such time the amount so paid by the Borrower to or for
the account of such Defaulting Lender to the payment of each such Defaulted
Amount to the extent required to pay such Defaulted Amount. In the event that
the Administrative Agent shall so apply any such amount to the payment of any
such Defaulted Amount on any date, the amount so applied by the Administrative
Agent shall constitute for all purposes of this Agreement and the other Loan
Documents payment, to such extent, of such Defaulted Amount on such date. Any
such amount so applied by the Administrative Agent shall be retained by the
Administrative Agent or distributed by the Administrative Agent to such other
Agents or such other Lenders, ratably in accordance with the respective portions
of such Defaulted Amounts payable at such time to the Administrative Agent, such
other Agents and such other Lenders and, if the amount of such payment made by
the Borrower shall at such time be insufficient to pay all Defaulted Amounts
owing at such time to the Administrative Agent, such other Agents and such other
Lenders, in the following order of priority:
(i) first, to the Agents for any Defaulted Amounts then owing to the
Agents, ratably in accordance with such respective Defaulted Amounts then
owing to the Agents; and
(ii) second, to any other Lenders for any Defaulted Amounts then owing
to such other Lenders, ratably in accordance with such respective Defaulted
Amounts then owing to such other Lenders.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance
or a Defaulted Amount and (iii) the 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 the 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 Committed 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 Committed Advances or
amounts are required to be made or paid and, if the amount so held
in escrow shall at any time be insufficient to make and pay all such Committed
Advances and amounts required to be made or paid at such time, in the following
order of priority:
37
(i) first, to the Agents for any amounts then due and payable by such
Defaulting Lender to the Agents hereunder, ratably in accordance with such
amounts then due and payable to the Agents;
(ii) second, to any other Lenders for any amount then due and payable
by such Defaulting Lender to such other Lenders hereunder, ratably in
accordance with such respective amounts then due and payable to such other
Lenders; and
(iii) third, to the Borrower for any Committed 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 2.15 are in addition to other rights and remedies that the Borrower may
have against such Defaulting Lender with respect to any Defaulted Advance and
that any Agent or any Lender may have against such Defaulting Lender with
respect to any Defaulted Amount.
SECTION 2.16. Extension of Final Maturity Date. At least 30 days
prior to the Termination Date but in no event earlier than 60 days prior to the
Termination Date, the Borrower may, by written notice to the Administrative
Agent, request that the Final Maturity Date be a date occurring up to the first
anniversary of the then scheduled Termination Date. Such request shall be
irrevocable and binding upon the Borrower. The Administrative Agent shall
promptly notify each Lender of such request. Subject to the satisfaction of the
applicable conditions set forth in Section 3.02 as of such Termination Date, the
Final Maturity Date shall be, effective as of such Termination Date, such date
as the Borrower shall request pursuant to this Section 2.16. Notwithstanding
the foregoing, the Borrower may not request an extension of the Final Maturity
Date unless the ratio of Adjusted Consolidated Debt to Total Capitalization was
0.40 to 1 or less as of the last day of the most recent fiscal quarter of the
Parent.
SECTION 2.17. Replacement of Affected Lender. At any time any Lender
is an Affected Lender, the Borrower may replace such Affected Lender as a party
to this Agreement with one or more other Lenders and/or, with the consent of the
Administrative Agent (which shall not be unreasonably withheld) Eligible
Assignees, and upon notice from the Borrower such Affected Lender shall assign
pursuant to an Assignment and Acceptance, and without recourse or warranty, its
Commitment, its Committed Advances, its Committed Note 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 2.08, any amounts payable pursuant to Section 9.04(c) as a result of
such Affected Lender receiving payment of any Eurodollar Rate Advance prior to
the end of an Interest Period therefor (assuming for such purpose
38
that receipt of payment pursuant to such Assignment and Acceptance constitutes
payment of such Eurodollar Rate Advances) and all other obligations owed to such
Affected Lender hereunder.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to All Committed Borrowings in
Respect of the Acquisition. (a) Conditions Precedent to Initial Extension of
Credit. The obligation of each Lender to make a Committed Advance 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 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 Acquisition and the other
transactions contemplated by the Transaction Documents and each
Transaction 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 respect to
the Acquisition and the other transactions contemplated by the
Transaction Documents and each Transaction Document to which it is or
is to be a party.
(C) A copy of a certificate or certificates of the Secretary of
State or other appropriate official of the jurisdiction of
incorporation of (x) the Borrower, dated reasonably near the date of
the Initial Extension of Credit, certifying (A) as to a true and
correct copy of the charter of the Borrower and each amendment thereto
on file in such Secretary's office and (B) that (1) such amendments
are the only amendments to the Borrower's charter on file in such
Secretary's office, (2) the Borrower has paid all franchise taxes to
the date of such certificate and (C) the Borrower 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
39
case of the Borrower, 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 the Borrower) or the constitutional documents (in the case of
each Guarantor) 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 Transaction Document to which it is
or is to be a party and the other documents to be delivered hereunder and
thereunder.
(F) Certified copy of the Purchase Agreement, duly executed by
the parties thereto, together with all agreements, instruments and other
documents delivered in connection therewith as the Administrative Agent
shall reasonably request.
(G) Certificates, in substantially the form of Exhibit D hereto,
attesting to the Solvency of each Loan Party before and after giving effect
to the Acquisition and the other transactions contemplated by the
Transaction Documents, from its Chief Financial Officer.
(H) A favorable opinion of (1) Xxxxxx and Xxxxxx, Cayman Islands
counsel for the Parent, in substantially the form of Exhibit E-1 hereto and
as to such other matters as any Lender through the Administrative Agent may
reasonably request , (2) Xxxxx, Xxxxx & Xxxxx, New York counsel for the
Loan Parties, in substantially the form of Exhibit E-2 hereto and as to
such other matters as any Lender through the Administrative Agent may
reasonably request and (3) Xxxxxxx Xxxx & Xxxxxxx, Bermuda counsel for the
Subsidiary Guarantors, in substantially the form of Exhibit E-3 hereto and
as to such other matters as any Lender through the Administrative Agent may
reasonably request.
(I) A certificate of the Parent, signed by its President or Chief
Financial Officer, dated the date of the Initial Extension of Credit,
certifying as to (1) a description (in reasonable detail) of the portion of
the Acquisition occurring on the date of the Initial Extension of Credit
and (2) the percentage that the portion of the purchase price allocable to
the assets acquired at such time in connection with the Acquisition bears
to the aggregate purchase price for all assets to be acquired in connection
with the Acquisition..
40
(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 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 the Borrower and each other 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) The Lenders shall be reasonably satisfied that all Existing
Debt, other than Surviving Debt, has been (or concurrently will be)
prepaid, redeemed or defeased in full or otherwise satisfied and
extinguished and that all Surviving Debt shall be on terms and conditions
reasonably satisfactory to the Lenders.
(iv) Before giving effect to the Acquisition and the other
transactions contemplated by the Transaction Documents, 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.
(v) 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 a
material adverse effect on the business, financial condition, operations or
properties of CIGNAP&C or (y) would reasonably be expected to materially
adversely affect the legality, validity or enforceability of any
Transaction Document or the consummation of the Acquisition or the other
transactions contemplated by the Transaction Documents.
(vi) All governmental and third party consents and approvals necessary
in connection with the portion of the Acquisition occurring on the date of
the Initial Extension of Credit and the other transactions contemplated by
the Transaction Documents to occur on such date shall have been obtained
(without the imposition of any conditions that are not reasonably
acceptable to the Lenders and that would reasonably be expected to have a
Material Adverse Effect) and shall remain in effect, except for any such
consents and approvals, the absence of which, either individually or in the
aggregate, would not reasonably be likely to have a Material Adverse
Effect; all applicable waiting periods in connection with the portion of
the Acquisition occurring on the date of the Initial Extension of Credit
and the other transactions contemplated by the Transaction Documents to
occur on such date shall have expired without any negative action being
taken by any competent authority; and no law or regulation shall be
applicable in the reasonable judgment of the Lenders that restrains,
prevents or imposes materially adverse conditions upon the portion of the
Acquisition occurring on the date of the Initial Extension of Credit or the
other transactions contemplated by the Transaction Documents to occur on
such date.
(vii) 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
41
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.
(viii) 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 the Parent 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.
(ix) The Borrower shall have paid all accrued fees of the Agents and
the Lenders and all accrued expenses of the Agents (including the accrued
fees and expenses of counsel to the Administrative Agent and local counsel
on behalf of all of the Lenders), in each case to the extent then due and
payable.
(x) The portion of the Acquisition occurring on the date of the
Initial Extension of Credit shall have been consummated (or shall be
concurrently consummated) in accordance with the terms of the Purchase
Agreement, without any waiver or amendment not consented to by the Lenders
of any material term, provision or condition set forth therein that would
reasonably be expected to have a Material Adverse Effect, and in compliance
with all material applicable laws.
(xi) The Purchase Agreement shall be in full force and effect.
(b) Conditions Precedent to All Other Committed Borrowings in Respect
of the Acquisition. The obligation of each Lender to make a Committed Advance
on the occasion of each Committed Borrowing (other than in respect of the
Initial Extension of Credit) the proceeds of which shall be used to fund a
portion of the purchase price in respect of the Acquisition shall be subject to
the reasonable satisfaction of the following conditions precedent before or
concurrently with such Committed Borrowing:
(i) The Administrative Agent shall have received on or before the day
of such Committed Borrowing a certificate of the Parent, in form and
substance reasonably satisfactory to the Administrative Agent (unless
otherwise specified) and in sufficient copies for each Lender, signed by
its President or Chief Financial Officer, dated the date of such Committed
Borrowing, certifying as to (1) a description (in reasonable detail) of the
portion of the Acquisition occurring on the date of such Committed
Borrowing and (2) the percentage that the portion of the purchase price
allocable to the assets acquired at such time in connection with the
Acquisition bears to the aggregate purchase price for all assets to be
acquired in connection with the Acquisition.
(ii) All governmental and third party consents and approvals necessary
in connection with the portion of the Acquisition occurring on the date of
such Committed Borrowing and the other transactions contemplated by the
Transaction Documents to occur on such date shall have been obtained
(without the imposition of any conditions that are not reasonably
acceptable to the Lenders and that would reasonably be expected to have a
Material Adverse Effect) and shall
42
remain in effect, except for any such consents and approvals, the absence
of which, either individually or in the aggregate, would not reasonably be
likely to have a Material Adverse Effect; all applicable waiting periods in
connection with the portion of the Acquisition occurring on the date of
such Committed Borrowing and the other transactions contemplated by the
Transaction Documents to occur on such date shall have expired without any
negative action being taken by any competent authority, and no law or
regulation shall be applicable in the reasonable judgment of the Lenders,
that restrains, prevents or imposes materially adverse conditions upon the
portion of the Acquisition occurring on the date of such Committed
Borrowing or the other transactions contemplated by the Transaction
Documents to occur on such date.
(iii) The portion of the Acquisition occurring on the date of such
Committed Borrowing shall have been consummated (or shall be concurrently
consummated) in accordance with the terms of the Purchase Agreement,
without any waiver or amendment not consented to by the Lenders of any
material term, provision or condition set forth therein that would
reasonably be expected to have a Material Adverse Effect and in compliance
with all material applicable laws.
(iv) The Purchase Agreement shall be in full force and effect.
SECTION 3.02. Conditions Precedent to Each Committed Borrowing. The
obligation of each Lender to make a Committed Advance on the occasion of each
Committed Borrowing (including the initial Committed Borrowing) shall be subject
to the further conditions precedent that on the date of such Committed Borrowing
(a) the following statements shall be true (and each of the giving of the
applicable Notice of Committed Borrowing and the acceptance by the Borrower of
the proceeds of such Committed Borrowing shall constitute a representation and
warranty by the Borrower that both on the date of such notice and on the date of
such Committed Borrowing such statements are true):
(i) the representations and warranties contained in each Loan Document
are correct in all material respects on and as of such date, before and
after giving effect to such Committed Borrowing and to the application of
the proceeds therefrom, as though made on and as of such date, other than
any such representations or warranties that, by their terms, refer to a
specific date other than the date of such Committed Borrowing, in which
case as of such specific date; and
(ii) no Default has occurred and is continuing, or would result from
such Committed Borrowing or from the application of the proceeds therefrom;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Lender through the Administrative Agent may
reasonably request.
SECTION 3.03. Conditions Precedent to Each Competitive Bid Borrowing.
The obligation of each Lender that is to make a Competitive Bid Advance on the
occasion of a Competitive Bid Borrowing 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
43
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 of the proceeds of such Competitive
Bid Borrowing shall constitute a representation and warranty by the Borrower
that on the date of such Competitive Bid Borrowing such statements are true):
(a) the representations and warranties contained in Section 4.01 are
correct in all material respects on and as of the date of such Competitive
Bid Borrowing, before and after giving effect to such Competitive Bid
Borrowing and to the application of the proceeds therefrom, as though made
on and as of such date, other than any such representations or warranties
that, by their terms, refer to a specific date other than the date of such
Competitive Bid Borrowing, in which case as of such specific date, and
(b) no Default has occurred and is continuing, or would result from
such Competitive Bid Borrowing or from the application of the proceeds
therefrom.
SECTION 3.04. 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 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 Parent and the
Borrower. Each of the Parent and the 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
the Borrower have been validly issued, are fully paid and non-assessable
and (except for any Preferred Securities issued
44
after the date of this Agreement) are owned, directly or indirectly, by the
Parent free and clear of all Liens.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all Subsidiaries of each Loan Party.
(c) The execution, delivery and performance by each Loan Party of each
Transaction Document to which it is or is to be a party, and the
consummation of the Acquisition and the other transactions contemplated by
the Transaction Documents (to the extent applicable), 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 Transaction Document to
which it is or is to be a party, or for the consummation of the Acquisition
or the other transactions contemplated by the Transaction Documents, or
(ii) the exercise by any Agent or any Lender of its rights under the Loan
Documents, except for the authorizations, approvals, actions, notices and
filings which have been duly obtained, taken, given or made and are in full
force and effect. All applicable waiting periods in connection with the
Acquisition and the other transactions contemplated by the Transaction
Documents have expired without any action having been taken by any
competent authority restraining, preventing or imposing materially adverse
conditions upon the Acquisition or the rights of the Loan Parties or their
Subsidiaries freely to transfer or otherwise dispose of, or to create any
Lien on, any properties now owned or hereafter acquired by any of them.
(e) This Agreement has been, and each other Transaction Document when
delivered hereunder will have been, duly executed and delivered by each
Loan Party party thereto. This Agreement is, and each other Transaction
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
45
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 Transaction Document or the consummation of the Acquisition or the
other transactions contemplated by the Transaction 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 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 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 Borrower 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 Borrower'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) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying Margin Stock, and no proceeds of
any Advance 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 application of the proceeds or repayment
thereof by the Borrower, nor the consummation of the other transactions
contemplated by the Transaction
46
Documents, will violate any provision of
such Act or any rule, regulation or order of the Securities and Exchange
Commission thereunder.
(l) Neither any Loan Party nor any of its Subsidiaries is a party to
any indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate restriction that is
reasonably likely to have a Material Adverse Effect.
(m) Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
(n) Except to the extent that any and all events and conditions under
clauses (i) through (vi) below of this paragraph (n) in the aggregate are
not reasonably expected to have a Material Adverse Effect: (i) Schedule B
(Actuarial Information) to the most recent annual report (Form 5500 Series)
for each Pension Plan, copies of which have been filed with the Internal
Revenue Service, is complete and accurate and fairly presents the funding
status of such Pension Plan, and since the date of such Schedule B there
has been no material adverse change in such funding status.
(ii) Neither any Loan Party nor any ERISA Affiliate has incurred or is
reasonably expected to incur any Withdrawal Liability to any Multiemployer
Plan.
(iii) Neither any Loan Party nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of
Title IV of ERISA, and no such Multiemployer Plan is reasonably expected to
be in reorganization or to be terminated, within the meaning of Title IV of
ERISA.
(iv) With respect to each scheme or arrangement mandated by a
government other than the United States (a "Foreign Government Scheme or
Arrangement") and with respect to each employee benefit plan that is not
subject to United States law maintained or contributed to by any Loan Party
or with respect to which any Subsidiary of any Loan Party may have
liability under applicable local law (a "Foreign Plan"):
(x) Any employer and employee contributions required by law or by
the terms of any Foreign Government 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.
47
(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 which
could result in any Loan Party or any ERISA Affiliate incurring any
liability, fine or penalty.
(o) (i) In the ordinary course of its business, the Parent reviews
the effect of Environmental Laws on the operations and properties of the
Parent 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, the Parent 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
48
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) The 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 material suppliers, vendors and customers)
that could be adversely affected by the risk that computer applications
used by the 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 the 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, the Borrower believes that all computer
applications of the Borrower and its Subsidiaries that are material to its
or any of its 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 PARENT AND THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance or any
other obligation of any Loan Party under any Loan Document shall remain unpaid
or any Lender shall have any Commitment hereunder, each of the Parent and the
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 the 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
49
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(d); and provided further that neither the
Parent nor any of its Subsidiaries shall be required to preserve any right,
permit, license, approval, privilege or franchise if the Board of Directors
of the Parent or such Subsidiary shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Parent
or such Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to the Parent, such Subsidiary or
the Lenders.
(e) Visitation Rights. At any reasonable time and from time to time
upon prior notice, permit the Agents (upon request made by any Agent or any
Lender), or any agents or representatives thereof, at the expense (so long
as no Default has occurred and is continuing) of such Agents (or such
Lender, as the case may be), to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of, the
Parent and any of its Subsidiaries, and to discuss the affairs, finances
and accounts of the Parent and any of its Subsidiaries with any of their
officers or directors and with their, so long as a representative of Parent
is present, independent certified public accountants.
(f) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of
the Parent and each such Subsidiary sufficient to permit the preparation of
financial statements in accordance with GAAP.
(g) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties
that are used or useful in the conduct of its business in good working
order and condition, ordinary wear and tear excepted.
(h) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates (other than any such
transactions between Loan Parties) 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. The 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.
50
SECTION 5.02. Negative Covenants. So long as any Advance or any
other obligation of any Loan Party under any Loan Document shall remain unpaid,
or any Lender shall have any Commitment hereunder, neither the Parent nor the
Borrower will, 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
Parent Five-Year Revolving Credit Facility or the Parent 364-Day
Revolving Credit Facility;
(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; and provided further that the aggregate principal amount
of the Debt secured by Liens permitted by this clause (iv) shall not
exceed the amount permitted under Section 5.02(b)(ii) at any time
outstanding;
(v) Liens arising in connection with Capitalized Leases permitted
under Section 5.02(b)(iii); 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(d) 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;
51
(vii) Liens securing obligations under credit default swap
transactions determined by reference to, or Contingent Obligations in
respect of, Debt issued by the Parent or one of its Subsidiaries;
such Debt not to exceed an aggregate principal amount of $550,000,000;
(viii) Liens arising in the ordinary course of its business
which (A) do not secure Debt and (B) do not in the aggregate
materially detract from the value of its assets or materially impair
the use thereof in the operation of its business;
(ix) Liens on cash and Approved Investments securing Hedge
Agreements arising in the ordinary course of business;
(x) other Liens securing Debt or other obligations outstanding in
an aggregate principal or face amount not to exceed at any time 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
52
(xvi) judgment or judicial attachment Liens, provided that the
enforcement of such Liens is effectively stayed.
(b) Debt. Until such time as the Commitments hereunder are reduced to
$1,400,000,000, permit the Borrower or any of its Subsidiaries to create,
incur, assume or suffer to exist, any Debt, except:
(i) Debt under the Loan Documents, Debt under the Parent Five-
Year Revolving Credit Facility and Debt under the Parent 364-Day
Revolving Credit Facility;
(ii) Debt secured by Liens permitted by Section 5.02(a)(iv) not
to exceed in the aggregate $ 200,000,000 at any time outstanding,
(iii) Capitalized Leases not to exceed in the aggregate
$100,000,000 at any time outstanding,
(iv) the Surviving Debt described on Schedule 5.02 (b) hereto,
and any Debt extending the maturity of, or refunding or refinancing,
in whole or in part, any Surviving Debt, provided that the terms of
any such extending, refunding or refinancing Debt, and of any
agreement entered into and of any instrument issued in connection
therewith, are otherwise permitted by the Loan Documents, provided
further that the principal amount of such Surviving Debt shall not be
increased above the principal amount thereof outstanding immediately
prior to such extension, refunding or refinancing, and the direct and
contingent obligors therefor shall not be changed, as a result of or
in connection with such extension, refunding or refinancing, provided
still further that the terms relating to principal amount,
amortization, maturity, collateral (if any) and subordination (if
any), and other material terms taken as a whole, of any such
extending, refunding or refinancing Debt, and of any agreement entered
into and of any instrument issued in connection therewith, are no less
favorable in any material respect to the Loan Parties or the Lenders
than the terms of any agreement or instrument governing the Surviving
Debt being extended, refunded or refinanced and the interest rate
applicable to any such extending, refunding or refinancing Debt does
not exceed the then applicable market interest rate,
(v) unsecured Debt in respect of acceptance, letter of credit or
similar facilities issued in the ordinary of credit in an aggregate
amount not to exceed $250,000,000 at any time outstanding,
(vi) unsecured Debt in the ordinary course of business for
borrowed money, maturing within one year from the date incurred,
evidenced by commercial paper,
(vii) other Debt in an aggregate principal amount not to
exceed $500,000,000 at any time outstanding,
53
(viii) Debt in respect of the exercise of overdraft privileges
on a basis not more frequent than once each calendar month for not
more than five Business Days in an aggregate amount not to exceed
$50,000,000 at any time outstanding,
(ix) Debt the Net Cash Proceeds of which are used solely to
prepay Debt under this Agreement or to prepay commercial paper; and
(x) in the case of any Subsidiary of the Parent, Debt owed to the
Parent or to a wholly owned Subsidiary of the Parent, provided that,
if the obligor under such Debt is a Loan Party, then such Debt shall
be subordinated in right of payment to the obligations of such Loan
Party under the Loan Documents upon terms acceptable to the
Administrative Agent.
(c) 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 (and giving effect to the
Acquisition).
(d) Mergers, Etc. Merge into or consolidate with any Person or permit
any Person to merge into it, or permit any of its Subsidiaries to do so,
except that:
(i) any Subsidiary of the Parent may merge into or consolidate
with any other Subsidiary of the Parent, provided that, in the case of
any such merger or consolidation, the Person formed by such merger or
consolidation shall be a wholly owned Subsidiary of the Parent,
provided further that, in the case of any such merger or consolidation
to which (x) the Borrower is a party, the Person formed by such merger
or consolidation shall be the Borrower or (y) a Subsidiary Guarantor
is a party, the Person formed by such merger or consolidation shall be
the Borrower or a Subsidiary Guarantor;
(ii) any Subsidiary of the 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(e) (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 the 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 the Borrower, as the case may be;
54
provided, however, that in each case, immediately after giving effect
thereto, no event shall occur and be continuing that constitutes a Default.
(e) 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(d);
(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; provided that, the Borrower
shall, on the date of receipt by any Loan Party or any of its
Subsidiaries of the Net Cash Proceeds from such sale, prepay the
Committed Advances pursuant to, and in the amount and order of
priority set forth in, Section 2.05(b)(ii), as specified therein;
(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;
(f) 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 so long as the Net Cash Proceeds
thereof shall be applied in the manner set forth in Section 2.06(b)(i)
of the Parent 364-Day Revolving Credit Facility, (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,
55
(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.
(g) 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.
(h) Prepayments, Etc., of Debt. Until such time as the Commitments
hereunder are reduced to $1,400,000,000, permit the Borrower or any of its
Subsidiaries to prepay, redeem, purchase, defease or otherwise satisfy
prior to the scheduled maturity thereof in any manner, or make any payment
in violation of any subordination terms of, any Debt, except (i) the
prepayment of the Advances in accordance with the terms of this Agreement,
(ii) the prepayment of Debt under the Parent Five-Year Revolving Credit
Facility and under the Parent 364-Day Revolving Credit Facility and (iii)
regularly scheduled or required repayments or redemptions of Surviving
Debt, or amend, modify or change in any manner any term or condition of any
Surviving Debt, or permit any of its Subsidiaries to do any of the
foregoing other than to prepay any Debt payable to any Loan Party.
(i) Amendment, Etc., of Purchase Agreement. (i) Cancel or terminate
the Purchase Agreement or consent to or accept any cancellation or
termination thereof or (ii) amend, modify or change in any manner any term
or condition of the Purchase Agreement or give any consent, waiver or
approval thereunder, waive any default under or any breach of any term or
condition of the Purchase Agreement, agree in any manner to any other
amendment, modification or change of any term or condition of the Purchase
Agreement or take any other action in connection with the Purchase
Agreement that, in any case described in this clause (ii), would reasonably
be expected to have a Material Adverse Effect, or permit any of its
Subsidiaries to do any of the foregoing.
SECTION 5.03. Reporting Requirements. So long as any Advance or any
other obligation of any Loan Party under any Loan Document shall remain unpaid
or any Lender shall have any Commitment hereunder, the Parent will furnish to
the Agents and the Lenders:
(a) Default Notice. As soon as possible and in any event within two
days after the occurrence of each Default or any event, development or
occurrence reasonably likely to have a Material Adverse Effect continuing
on the date of such statement, a statement of the chief financial officer
of the Parent setting forth details of such Default, event, development or
occurrence and the action that the Parent or the applicable Subsidiary has
taken and proposes to take with respect thereto.
56
(b) Annual Financials. (i) As soon as available and in any event
within 90 days after the end of each Fiscal Year, a copy of the annual
Consolidated audit report for such year for the Parent and its
Subsidiaries, including therein a Consolidated balance sheet of the Parent
and its Subsidiaries as of the end of such Fiscal Year and Consolidated
statements of income and cash flows of the Parent and its Subsidiaries for
such Fiscal Year, all reported on in a manner reasonably acceptable to the
Securities and Exchange Commission in each case and accompanied by an
opinion of PricewaterhouseCoopers LLP or other independent public
accountants of recognized standing reasonably acceptable to the Required
Lenders, together with (i) a certificate of the Chief Financial Officer 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,
57
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting any Loan Party or any of its Subsidiaries of the type described
in Section 4.01(f).
(e) Securities Reports. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports that the
Parent sends to its stockholders generally, and copies of all regular,
periodic and special reports, and all registration statements, that any
Loan Party or any of its Subsidiaries files with the Securities and
Exchange Commission or any governmental authority that may be substituted
therefor, or with any national securities exchange.
(f) ERISA (i) ERISA Events. Promptly and in any event within 10
days after any Loan Party or any ERISA Affiliate institutes any steps to
terminate any Pension Plan or becomes aware of the institution of any steps
or any threat by the PBGC to terminate any Pension Plan, or the failure to
make a required contribution to any Pension Plan if such failure is
sufficient to give rise to a lien under section 302(f) of ERISA, or the
taking of any action with respect to a Pension Plan which could result in
the requirement that any Loan Party or any ERISA Affiliate furnish a bond
or other security to the PBGC or such Pension Plan, or the occurrence of
any event with respect to any Pension Plan which could result in any Loan
Party or any ERISA Affiliate incurring any material liability, fine or
penalty, or any material increase in the contingent liability of any Loan
Party or any ERISA Affiliate with respect to any post-retirement Welfare
Plan benefit, notice thereof and copies of all documentation relating
thereto.
(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.
58
(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.
(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 Subsidiary Guarantor
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
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) the Borrower shall fail to pay any principal of any Advance
when the same shall become due and payable or (ii) the 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) the Borrower shall fail to perform or observe any term, covenant
or agreement contained in Section 2.14, 5.01(d) (with respect to the Parent
or the Borrower) 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 the Borrower 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 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 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
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any Loan Party or any of its Subsidiaries seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or for
any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it) that is being
diligently contested by it in good faith, either such proceeding shall
remain undismissed or unstayed for a period of 60 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
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(iii) Any condition shall exist or event shall occur with
respect to a Pension Plan that is reasonably expected to result in any
Loan Party or any ERISA Affiliate being required to furnish a bond or
security to the PBGC or such Pension Plan, or incurring a liability or
obligation.
(iv) 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
(v) 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 Borrower,
declare the Commitment of each Lender and the obligation of each Lender to make
Advances to be terminated, whereupon the same shall forthwith terminate, and/or
(ii) shall at the request, or may with the consent, of the Required Lenders, by
notice to the Borrower, 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 Borrower; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to the Borrower under the
Federal Bankruptcy Code, (x) the Commitments of each Lender and the obligation
of each Lender to make Advances shall automatically be terminated and (y) the
Notes, all such interest and all such amounts shall automatically become and be
due and payable, without presentment, demand, protest or any notice of any kind,
all of which are hereby expressly waived by the Borrower.
ARTICLE VII
GUARANTY
SECTION 7.01. The Guaranty. (a) Each Guarantor jointly and
severally, hereby unconditionally, absolutely and irrevocably guarantees the
full and punctual payment (whether at stated maturity, upon acceleration or
otherwise) of all amounts payable by the Borrower under the Loan Documents
including, without limitation, the principal of and interest on each Note issued
by the Borrower pursuant to this Agreement. Upon failure by the Borrower to pay
punctually any such amount, each Guarantor agrees to pay forthwith on demand the
amount not so paid at the place and in the manner specified in this Agreement.
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(b) Each Guarantor (other than the Parent), and by its acceptance of
this Guaranty, the Administrative Agent and each other Lender, hereby confirms
that it is the intention of all such Persons that this Guaranty and the
obligations of each Guarantor hereunder not constitute a fraudulent transfer or
conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or
state law to the extent applicable to this Guaranty and the obligations of each
Guarantor (other than the Parent) hereunder. To effectuate the foregoing
intention, the Administrative Agent, the other Lenders and the Guarantors hereby
irrevocably agree that the obligations of each Subsidiary Guarantor under this
Article VII at any time shall be limited to the maximum amount as will result in
the obligations of such Subsidiary Guarantor under this Guaranty not
constituting a fraudulent transfer or conveyance.
SECTION 7.02. Guaranty Unconditional. The obligations of each
Guarantor hereunder shall be unconditional, absolute and irrevocable and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of any other obligor under any of the Loan
Documents, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to any of the Loan
Documents;
(iii) any release, non-perfection or invalidity of any direct or
indirect security for any obligation of any other obligor under any of the
Loan Documents;
(iv) any change in the corporate existence, structure or ownership of
any obligor, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting any other obligor or its assets or any resulting
release or discharge of any obligation of any other obligor contained in
any of the Loan Documents;
(v) the existence of any claim, set-off or other rights which any
obligor may have at any time against any other obligor, the Administrative
Agent, any Lender or any other corporation or person, whether in connection
with any of the Loan Documents or any unrelated transactions, provided that
nothing herein shall prevent the assertion of any such claim by separate
suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or against any
other obligor for any reason of any of the Loan Documents, or any provision
of applicable law or regulation purporting to prohibit the payment by any
other obligor of the principal of or interest on any Note or any other
amount payable under any of the Loan Documents; or
(vii) any other act or omission to act or delay of any kind by any
obligor, the Administrative Agent, any Lender or any other corporation or
person or any other circumstance whatsoever which might, but for the
provisions of this paragraph, constitute a legal or equitable discharge of
or defense to a Guarantor's obligations hereunder.
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SECTION 7.03. Discharge Only Upon Payment In Full; Reinstatement In
Certain Circumstances. Each Guarantor's obligations hereunder 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
Borrower 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 the Borrower under the Loan Documents is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of the Borrower or otherwise, each Guarantor's obligations hereunder with
respect to such payment shall be reinstated as though such payment had been due
but not made at such time.
SECTION 7.04. Waiver by the Guarantors. Each Guarantor irrevocably
waives acceptance hereof, presentment, demand, protest and any notice not
provided for herein, as well as any requirement that at any time any action be
taken by any corporation or person against any other obligor or any other
corporation or person.
SECTION 7.05. Subrogation. Each Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against the Borrower, any other Loan Party or any other insider
guarantor that arise from the existence, payment, performance or enforcement of
such Guarantor's obligations under or in respect of this Guaranty or any other
Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of any Lender against the 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 the
Borrower, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all amounts payable under this Guaranty shall have been paid in full in cash,
and the Commitments shall have expired or been terminated. If any amount shall
be paid to any Guarantor in violation of the immediately preceding sentence at
any time prior to the latest of (a) the payment in full in cash of all amounts
payable under this Guaranty, and (b) the Termination Date, such amount shall be
received and held in trust for the benefit of the Lenders, shall be segregated
from other property and funds of such Guarantor and shall forthwith be paid or
delivered to the Administrative Agent in the same form as so received (with any
necessary endorsement or assignment) to be credited and applied to all amounts
payable under this Guaranty, whether matured or unmatured, in accordance with
the terms of the Loan Documents, or to be held as collateral for any amounts
payable under this Guaranty thereafter arising. If (i) any Guarantor shall make
payment to any Lender of all or any amounts payable under this Guaranty, (ii)
all amounts payable under this Guaranty shall have been paid in full in cash,
and (iii) the Termination Date shall have occurred, the Lenders will, at such
Guarantor's request and expense, execute and deliver to such Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to such Guarantor of an
interest in the obligations resulting from such payment made by such Guarantor
pursuant to this Guaranty.
SECTION 7.06. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Borrower under any of the Loan Documents is
stayed upon the insolvency,
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bankruptcy or reorganization of the Borrower, all such amounts otherwise subject
to acceleration under the terms of this Agreement shall nonetheless by payable
by any Guarantor hereunder 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 the Guarantor, its
successors and assigns and (c) inure to the benefit of and be enforceable by the
Lenders and their successors, transferees and assigns. Without limiting the
generality of clause (c) of the immediately preceding sentence, any Lender may
assign or otherwise transfer all or any portion of its rights and obligations
under this Agreement (including, without limitation, all or any portion of its
Commitments, the Advances owing to it and the Committed 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
Guarantor 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 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 the Parent or the 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
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(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 Commitments, the
Committed Advances made by it and the Committed Notes issued to it, MGT shall
have the same rights and powers under the Loan Documents as any other Lender and
may exercise the same as though it were not an Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include MGT in its
individual capacity. MGT and its affiliates may accept deposits from, lend money
to, act as trustee under indentures of, accept investment banking engagements
from and generally engage in any kind of business with, any Loan Party, any of
its Subsidiaries and any Person that may do business with or own securities of
any Loan Party or any such Subsidiary, all as if MGT were not Agent and without
any duty to account therefor to the Lenders.
SECTION 8.04. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon any Agent or any other Lender and
based on the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon any Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 8.05. Indemnification. (a) Each Lender severally agrees to
indemnify each Agent (to the extent not promptly reimbursed by the Borrower)
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 Borrower under Section
9.04, to the extent that such Agent is not promptly reimbursed for such costs
and expenses by the Borrower.
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(b) For purposes of this Section 8.05, the Lenders' respective ratable
shares of any amount shall be determined, at any time, according to the sum of
(i) the aggregate principal amount of the Advances outstanding at such time and
owing to the respective Lenders and (ii) their respective Unused 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 Borrower 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, subject (so
long as no Event of Default exists) to the consent of the Parent (which consent
shall not be unreasonably withheld), to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within 30 days after the retiring Agent's giving
of notice of resignation or the Required Lenders' removal of the retiring Agent,
then the retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be a commercial bank organized under the laws of the United
States or of any State thereof and having a combined capital and surplus of at
least $250,000,000. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent such successor Agent shall succeed to and become vested with
all the rights, powers, discretion, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
the Loan Documents. If within 45 days after written notice is given of the
retiring Agent's resignation or removal under this Section 8.06 no successor
Agent shall have been appointed and shall have accepted such appointment, then
on such 45th day (i) the retiring Agent's resignation or removal shall become
effective, (ii) the retiring Agent shall thereupon be discharged from its duties
and obligations under the Loan Documents and (iii) the Required Lenders shall
thereafter perform all duties of the retiring Agent under the Loan Documents
until such time, if any, as the Required Lenders appoint a successor Agent as
provided above. After any retiring Agent's resignation or removal hereunder as
Agent shall have become effective, the provisions of this Article VIII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or the Notes or any other Loan Document, nor consent to any
departure by any Loan Party therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Required Lenders (and, in the
case of an amendment, the Parent and the Borrower), and then any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given;
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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 Commitments, or (y) the aggregate unpaid principal amount of the Advances
that, in each case, shall be required for the Lenders or any of them to take any
action hereunder, (iii) reduce or limit the obligations of any Guarantor under
Section 7.01 or release such Guarantor or otherwise limit such Guarantor's
liability with respect to the obligations owing to the Agents and the Lenders,
(iv) amend this Section 9.01, (v) increase the 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 2.06(b)), (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 2.06(b)), 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.
SECTION 9.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic telecopy
communication) and mailed, telegraphed, telecopied or delivered, if to the
Parent, at its address at The Ace Building, 30 Woodbourne Avenue, Xxxxxxxx HM08,
Bermuda, Attention: Xxxxxxx Xxxxxxxx; if to the Borrower, at its address at Six
Concourse Parkway, Suite 2500, Xxxxxxx, Xxxxxxx 00000 with a copy to The Ace
Building, 30 Woodbourne Avenue, Xxxxxxxx HM08, Bermuda, Attention: Xxxxxxx
Xxxxxxxx; 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, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxx Xxxxx; and if to the Administrative Agent, at its address at 000 Xxxxxxx
Xxxxxxxxxx Xxxx, Xxxxxx, Xxxxxxxx 00000, Attention: Xxxx Xxxx; or, as to any
party, at such other address as shall be designated by such party in a written
notice to the other parties. All such notices and communications shall, when
mailed, telegraphed or telecopied, be effective when deposited in the mails,
delivered to the telegraph company or transmitted by telecopier, respectively,
except that notices and communications to any Agent pursuant to Article II, III
or VIII shall not be effective until received by such Agent. Manual delivery by
telecopier of an executed counterpart of any amendment or waiver of any
provision of this Agreement or the Notes or of any Exhibit hereto to be executed
and delivered hereunder shall be effective as delivery of an original executed
counterpart thereof.
SECTION 9.03. No Waiver; Remedies. No failure on the part of any
Lender or any Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. Costs and Expenses. (a) The Borrower agrees to pay on
demand (i) all reasonable costs and expenses of the Agents in connection with
the preparation, execution, delivery,
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administration, modification and amendment of the Loan Documents (including,
without limitation, (A) all due diligence, collateral review, syndication,
transportation, computer, duplication, appraisal, audit, insurance, consultant,
search, filing and recording fees and expenses and (B) the reasonable fees and
expenses of a single counsel for the Agents with respect thereto, with respect
to advising the Agents as to its rights and responsibilities, or the perfection,
protection or preservation of rights or interests, under the Loan Documents,
with respect to negotiations with any Loan Party or with other creditors of any
Loan Party or any of its Subsidiaries arising out of any Default or any events
or circumstances that may give rise to a Default and with respect to presenting
claims in or otherwise participating in or monitoring any bankruptcy, insolvency
or other similar proceeding involving creditors' rights generally and any
proceeding ancillary thereto) and (ii) all reasonable costs and expenses of each
Agent and each Lender in connection with the enforcement of the Loan Documents,
whether in any action, suit or litigation, or any bankruptcy, insolvency or
other similar proceeding affecting creditors' rights generally (including,
without limitation, the reasonable fees and expenses of counsel for the
Administrative Agent and each Lender with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless each Agent,
each Lender and each of their Affiliates and their respective officers,
directors, employees, agents and advisors (each, an "Indemnified Party") from
and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) this Agreement, the actual or
proposed use of the proceeds of the Advances, the Transaction 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 Transaction
Documents) by the Parent or any of its Subsidiaries or 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 Transaction
Documents are consummated. The Borrower 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, the Transaction
Documents or any of the transactions contemplated by the Transaction Documents.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance or LIBO Rate Advance is made by the Borrower to or for the account
of a Lender other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.06, 2.09(b)(i) or
2.10(d), acceleration of the maturity of the Notes pursuant to Section 6.01 or
for any other reason, or if the Borrower fails to make any payment or prepayment
of an Advance for
69
which a notice of prepayment has been given or that is otherwise required to be
made, whether pursuant to Section 2.04, 2.06 or 6.01 or otherwise, the Borrower
shall, 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 Borrower 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 the Borrower against any and
all of the obligations of the 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 the
Borrower after any such set-off and application; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Agent and each Lender and their respective
Affiliates under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that such Agent, such
Lender and their respective Affiliates may have.
SECTION 9.06. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Parent, the Borrower, the Subsidiary
Guarantors and each Agent and the Administrative Agent shall have been notified
by each Initial Lender that such Initial Lender has executed it and thereafter
shall be binding upon and inure to the benefit of the Borrower, each Agent and
each Lender and their respective successors and assigns, except that no Loan
Party 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 the
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 Commitment, the Committed Advances owing to it and the 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
70
respect of the Committed Facility, the "Committed Facility" under the Parent
Five-Year Revolving Credit Facility and the "Committed Facility" under the
Parent 364-Day Revolving Credit Facility, except for any non-pro rata assignment
by a "Downgraded Lender" under the Parent Five-Year Revolving Credit Facility of
its commitment thereunder pursuant to Sections 2.17 and 2.19 thereof and any
non-pro rata assignments to a SPC pursuant to Section 9.07(l) and any other non-
pro rata assignment approved by the Administrative Agent and the 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 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 the Borrower
pursuant to Section 2.17 shall be arranged by the 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
the Borrower pursuant to Section 2.17 unless and until such Lender shall have
received one or more payments from either the 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, the Borrower shall not be subject to additional amounts under
Section 2.10 or 2.12, (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 Borrower (which consents shall not be
unreasonably withheld) and (viii) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with 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 or 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 2.10, 2.12 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
71
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 Borrower, 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 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 for all purposes, absent
manifest error, and the Borrower, 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
the 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
Borrower and each other Agent. No Assignment and Acceptance shall be effective
unless and until it shall have been recorded in the Register. In the case of any
assignment by a Lender, within five Business Days after its receipt of such
notice, the 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 Commitment assumed
by it pursuant to such Assignment and Acceptance and, if any assigning Lender
has retained a Commitment hereunder, a new Note to the order of such assigning
Lender in an amount equal to the 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.
72
(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 the
Borrower or the performance or observance by the 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 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 I hereto, (i) accept such
Designation Agreement, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower.
(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 Commitment, the Committed Advances owing to it and the Note
or Notes (if any) held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation, its 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,
73
(iv) the Borrower, 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 Borrower 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 the Borrower furnished to such Lender by or on behalf of
the 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.
(l) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing from time to time by the Granting Lender
to the Administrative Agent and the Borrower, the option to provide to the
Borrower all or any part of any Committed Advance that such Granting Lender
would otherwise be obligated to make to the Borrower 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 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 Borrower 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
Borrower and Administrative Agent) providing liquidity and/or credit support to
or for the account of
74
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. Confidentiality. Neither any Agent nor any Lender shall
disclose any Confidential Information to any Person without the consent of the
Borrower, 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 9.10. Jurisdiction, Etc. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is a party in any New York State or Federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
SECTION 9.11. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 9.12. Waiver of Jury Trial. Each of the Borrower, the Parent,
the Subsidiary Guarantors, 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
75
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 INA HOLDINGS INC
By:
------------------------------------
Title:
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
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED,
as Lead Arranger and Syndication Agent
By:
------------------------------------
Title:
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK,
as Administrative Agent
By:
------------------------------------
Title:
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION,
as Documentation Agent
By:
------------------------------------
Title:
Initial Lenders
XXXXXXX XXXXX CAPITAL CORPORATION
By:
------------------------------------
Title:
XXXXXX 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:
