Exhibit 10.1
Execution Copy
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REIMBURSEMENT AGREEMENT
among
ACE LIMITED
ACE BERMUDA INSURANCE LTD.
ACE TEMPEST REINSURANCE LTD.,
as Account Parties,
THE BANKS NAMED HEREIN,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Issuing Bank and as Administrative Agent
JPMORGAN CHASE BANK and BANK OF AMERICA, N.A.
as Co-Syndication Agents,
and
THE BANK OF NOVA SCOTIA and DEUTSCHE BANK AG, NEW YORK BRANCH
as Co-Documentation Agents,
$500,000,000 Letter of Credit Facility
WACHOVIA SECURITIES, INC.
Sole Book Runner and Lead Arranger
Dated as of September 30, 2002
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Table of Contents
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 Certain Defined Terms..........................................1
SECTION 1.02 Computation of Time Periods; Other Definitional Provisions....16
SECTION 1.03 Accounting Terms and Determinations...........................16
ARTICLE II
AMOUNTS AND TERMS OF THE LETTERS OF CREDIT
SECTION 2.01 The Letters of Credit.........................................17
SECTION 2.02 Issuance and Renewals and Drawings, Participations and
Reimbursement with Respect to Letters of Credit...............18
SECTION 2.03 Repayment of Advances.........................................22
SECTION 2.04 Termination or Reduction of the LC Commitment Amounts.........23
SECTION 2.05 Fees..........................................................23
SECTION 2.06 Increased Costs, Etc..........................................25
SECTION 2.07 Payments and Computations.....................................26
SECTION 2.08 Taxes.........................................................27
SECTION 2.09 Sharing of Payments, Etc......................................29
SECTION 2.10 Use of Letters of Credit......................................29
SECTION 2.11 Defaulting Banks..............................................30
SECTION 2.12 Replacement of Affected Bank..................................31
SECTION 2.13 Certain Provisions Relating to the Issuing Bank and Letters
of Credit.....................................................32
SECTION 2.14 Downgrade Event with Respect to a Bank........................33
SECTION 2.15 Downgrade Event or Other Event with Respect to the
Issuing Bank..................................................35
SECTION 2.16 Non-Dollar Letters of Credit..................................36
ARTICLE III
CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01 Conditions Precedent to Effective Date........................37
SECTION 3.02 Conditions Precedent to Each Issuance, Extension or
Increase of a Letter of Credit................................39
SECTION 3.03 Determinations Under Section 3.01.............................40
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of the Account Parties.........40
ARTICLE V
COVENANTS OF THE ACCOUNT PARTIES
SECTION 5.01 Affirmative Covenants.........................................44
SECTION 5.02 Negative Covenants............................................46
SECTION 5.03 Reporting Requirements........................................49
SECTION 5.04 Financial Covenants...........................................52
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01 Events of Default.............................................53
SECTION 6.02 Actions in Respect of the Letters of Credit upon Default......55
ARTICLE VII
THE GUARANTY
SECTION 7.01 The Guaranty..................................................56
SECTION 7.02 Guaranty Unconditional........................................56
SECTION 7.03 Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances.........................................57
SECTION 7.04 Waiver by the Account Parties.................................57
SECTION 7.05 Subrogation...................................................57
SECTION 7.06 Stay of Acceleration..........................................58
SECTION 7.07 Continuing Guaranty; Assignments..............................58
ARTICLE VIII
THE AGENTS
SECTION 8.01 Authorization and Action......................................58
SECTION 8.02 Agents' Reliance, Etc.........................................59
SECTION 8.03 Wachovia and Affiliates.......................................59
SECTION 8.04 Bank Credit Decision..........................................59
SECTION 8.05 Indemnification...............................................60
SECTION 8.06 Successor Administrative Agent................................60
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ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Amendments, Etc...............................................61
SECTION 9.02 Notices, Etc..................................................62
SECTION 9.03 No Waiver; Remedies...........................................62
SECTION 9.04 Costs and Expenses............................................62
SECTION 9.05 Right of Set-off..............................................63
SECTION 9.06 Binding Effect................................................64
SECTION 9.07 Assignments and Participations................................64
SECTION 9.08 Execution in Counterparts.....................................66
SECTION 9.09 No Liability of the Issuing Bank..............................67
SECTION 9.10 Confidentiality...............................................67
SECTION 9.11 Jurisdiction, Etc.............................................67
SECTION 9.12 Governing Law.................................................68
SECTION 9.13 Waiver of Jury Trial..........................................68
SECTION 9.14 Disclosure of Information.....................................68
Schedule I LC Commitment Amounts
Schedule I - Part 2 Domestic Lending Offices
Schedule II Existing Wachovia Letters of Credit
Schedule III Existing Mellon Letter of Credit
Schedule IV Replacement Letter of Credit
Schedule 4.01(b) Subsidiaries
Schedule 5.02(a) Liens
Exhibit A Assignment and Acceptance
Exhibit B Replacement Letter of Credit Insert
Exhibit C-1 Form of Opinion of Xxxxxx and Xxxxxx
Exhibit C-2 Form of Opinion of Mayer, Brown, Xxxx & Maw
Exhibit C-3 Form of Opinion of Xxxxxxx, Xxxx & Xxxxxxx
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REIMBURSEMENT AGREEMENT
REIMBURSEMENT AGREEMENT dated as of September 30, 2002, among ACE
Limited, a Cayman Islands company (the "Parent"), ACE Bermuda Insurance
Ltd., a Bermuda company ("ACE Bermuda"), and ACE Tempest Reinsurance Ltd.,
a Bermuda company ("Tempest") (ACE Bermuda and Tempest, together with the
Parent, the "Account Parties" and individually an "Account Party"), the
banks, financial institutions and other institutional lenders listed on the
signature pages hereof as the Initial Banks (the "Initial Banks"), Wachovia
Bank, National Association ("Wachovia"), as Issuing Bank (as hereinafter
defined), JPMorgan Chase Bank ("JPMorgan Chase"), as syndication agent,
Bank of America, N.A. ("Bank of America"), as syndication agent (JPMorgan
Chase and Bank of America, together with any successor syndication agent
appointed pursuant to Article VIII, the "Syndication Agents"), The Bank of
Nova Scotia ("Nova Scotia"), as documentation agent, Deutsche Bank AG, New
York Branch ("Deutsche Bank"), as documentation agent (Nova Scotia and
Deutsche Bank, together with any successor documentation agent appointed
pursuant to Article VIII, the "Documentation Agents"), and Wachovia, as
administrative agent (together with any successor administrative agent
appointed pursuant to Article VIII, the "Administrative Agent" and,
together with the Syndication Agents and the Documentation Agents, the
"Agents") for the Banks.
PRELIMINARY STATEMENTS:
The Account Parties have requested that the Issuing Bank and the
Banks make available to the Account Parties a credit facility in an amount
up to $500,000,000 to provide for the issuance of letters of credit for the
account of one or more of the Account Parties. The Issuing Bank and the
Banks have indicated their willingness to agree to make such letters of
credit available on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree
as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
"Account Parties" has the meaning specified in the recital of
parties to this Agreement.
"ACE Bermuda" has the meaning specified in the recital of parties
to this Agreement.
"ACE INA" means ACE INA Holdings Inc., a Delaware corporation.
"Adjusted Consolidated Debt" means, at any time, an amount equal
to (i) the then outstanding Consolidated Debt of the Parent and its
Subsidiaries plus (ii) to the extent exceeding an amount equal to 15% of
Total Capitalization, the then issued and outstanding amount of Preferred
Securities (other than any Mandatorily Convertible Securities).
"Administrative Agent" has the meaning specified in the recital of
parties to this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent at Wachovia
Bank, National Association, Xxxxxxxxx Xxxxx Xxxxxxxx XX-00, 000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Account No.
5000000027444, Re: ACE Ltd., Attn: Syndication Agency Services, or such
other account as the Administrative Agent shall specify in writing to the
Banks.
"Advance" means a Letter of Credit Advance.
"Affected Bank" means any Bank that (i) has made, or notified any
Account Party that an event or circumstance has occurred which may give
rise to, a demand for compensation under Section 2.06(a) or (b) or Section
2.08 (but only so long as the event or circumstance giving rise to such
demand or notice is continuing) or (ii) is a Downgraded Bank.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person. For
purposes of this definition, the term "control" (including the terms
"controlling", "controlled by" and "under common control with") of a Person
means the possession, direct or indirect, of the power to vote 5% or more
of the Voting Interests of such Person or to direct or cause the direction
of the management and policies of such Person, whether through the
ownership of Voting Interests, by contract or otherwise.
"Agents" has the meaning specified in the recital of parties to
this Agreement.
"Agreement Currency" has the meaning specified in Section 2.16(g).
"Applicable Account Party" with respect to any outstanding or
proposed Letter of Credit means the Account Party for the account of which
such Letter of Credit was or is proposed to be issued.
"Applicable Commitment 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 Commitment Fee
S&P/Xxxxx'x Percentage
--------------------------------------- ---------------------------------------
Level 1
A+/A1 and above 0.060%
--------------------------------------- ---------------------------------------
Xxxxx 0
X/X0 0.080%
--------------------------------------- ---------------------------------------
Xxxxx 0
X-/X0 0.100%
--------------------------------------- ---------------------------------------
Xxxxx 0
BBB+/Baa1 0.125%
--------------------------------------- ---------------------------------------
Xxxxx 0
Xxxxx xxxx Xxxxx 0 0.150%
--------------------------------------- ---------------------------------------
"Applicable Lending Office" means, with respect to each Bank, such
Bank's Domestic Lending Office.
"Applicable Margin" means, as of any date, with respect to either
Type of Letter of Credit, a percentage per annum determined by reference to
such Type and the Public Debt Rating in effect on such date as set forth
below:
------------------------------- ----------------------- -----------------------
Applicable Margin Applicable Margin
Public Debt Rating for Intercompany for Third Party
S&P/Xxxxx'x Letters of Credit Letters of Credit
------------------------------- ----------------------- -----------------------
Level 1
A+/A1 and above 0.300% 0.350%
------------------------------- ----------------------- -----------------------
Xxxxx 0
X/X0 0.400% 0.425%
------------------------------- ----------------------- -----------------------
Xxxxx 0
X-/X0 0.450% 0.475%
------------------------------- ----------------------- -----------------------
Xxxxx 0
XXXx/Xxx0 0.500% 0.525%
------------------------------- ----------------------- -----------------------
Xxxxx 0
Xxxxx xxxx Xxxxx 0 0.600% 0.625%
------------------------------- ----------------------- -----------------------
provided, however, that at all times during which the Available Amount with
respect to Intercompany Letters of Credit exceeds $125,000,000, then for
purposes of Section 2.05(c)(i) the Applicable Margin for the portion of the
Available Amount of such Intercompany Letters of Credit in excess of
$125,000,000 shall be determined as if such Letters of Credit were Third
Party Letters of Credit.
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"Approved Investment" means any Investment that was made by the
Parent or any of its Subsidiaries pursuant to investment guidelines set
forth by the board of directors of the Parent which are consistent with
past practices.
"Arranger" means Wachovia Securities, Inc.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Bank and an Eligible Assignee, and accepted by the
Administrative Agent, in accordance with Section 9.07 and in substantially
the form of Exhibit A hereto.
"Available Amount" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such
time or at any future time (assuming compliance at such time or such future
time with all conditions to drawing) (including without limitation amounts
which have been the subject of drawings by the applicable beneficiary but
which have not yet been paid by the Issuing Bank); provided that, except as
otherwise expressly provided in this Agreement, the Available Amount of the
Replacement Letter of Credit, determined at any time until the Initial
Availability Time, shall be equal to zero (or to the excess, if any, by
which the Available Amount thereof (determined as provided hereinabove) at
such time exceeds the Available Amount of the Existing Mellon Letter of
Credit at such time). At all times after the Initial Availability Time, the
Available Amount of the Replacement Letter of Credit shall be determined as
provided in this definition without regard to the foregoing proviso.
"Bank of America" has the meaning specified in the recital of
parties to this Agreement.
"Bankruptcy Law" means any proceeding of the type referred to in
Section 6.01(f) or Title 11, U.S. Code, or any similar foreign, federal or
state law for the relief of debtors.
"Banks" means the Initial Banks and each Person that shall become
a Bank hereunder pursuant to Section 9.07(a), (b) and (c) for so long as
such Initial Bank or Person, as the case may be, shall be a party to this
Agreement.
"Base Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to the
rate of interest announced publicly by Wachovia in Charlotte, North
Carolina from time to time, as Wachovia's prime rate (which may not be its
best lending rate) or, if higher on the day in question, 1/2 of 1% above
the Federal Funds Rate.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in Xxxxxxxxx, Xxxxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx, Xxxxxx, Xxxxxxx or Bermuda.
"Capitalized Leases" means all leases that have been or should be,
in accordance with GAAP, recorded as capitalized leases.
"Change of Control" means the occurrence of any of the following:
(a) any Person or two or more Persons acting in concert shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the Securities
and Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly, of Voting Interests of the Parent (or other
securities convertible into such Voting Interests) representing 30% or more
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of the combined voting power of all Voting Interests of the Parent; or (b)
a majority of the board of directors of the Parent shall not be Continuing
Members; or (c) any Person or two or more Persons acting in concert shall
have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that results in its or their acquisition of the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of the Parent.
"Commitment Amount" means an LC Commitment Amount or the Letter of
Credit Issuance Commitment Amount.
"Committed Facility" means, at any time, the aggregate amount of
the Banks' LC Commitment Amounts at such time.
"Confidential Information" means information that any Loan Party
furnishes to any Agent or any Bank, but does not include any such
information that is or becomes generally available to the public other than
as a result of a breach by any Agent or any Bank of its obligations
hereunder or that is or becomes available to such Agent or such Bank from a
source other than the Loan Parties that is not, to the best of such Agent's
or such Bank's knowledge, acting in violation of a confidentiality
agreement with a Loan Party.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income of
the Parent and its Consolidated Subsidiaries, determined on a Consolidated
basis for such period.
"Consolidated Net Worth" means at any date the Consolidated
stockholders' equity of the Parent and its Consolidated Subsidiaries
determined as of such date, provided that such determination for purposes
of Section 5.04 shall be made without giving effect to adjustments pursuant
to Statement No. 115 of the Financial Accounting Standards Board of the
United States of America.
"Contingent Obligation" means, with respect to any Person, any
obligation or arrangement of such Person to guarantee or intended to
guarantee any Debt, leases, dividends or other payment obligations
("primary obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, (a)
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
5
arising under insurance contracts entered into in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation
in respect of which such Contingent Obligation is made (or, if less, the
maximum amount of such primary obligation for which such Person may be
liable pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required
to perform thereunder), as determined by such Person in good faith.
"Continuing Member" means a member of the Board of Directors of
the Parent who either (i) was a member of the Parent's Board of Directors
on the date of execution and delivery of this Agreement by the Parent and
has been such continuously thereafter or (ii) became a member of such Board
of Directors after such date and whose election or nomination for election
was approved by a vote of the majority of the Continuing Members then
members of the Parent's Board of Directors.
"Debenture" means debt securities issued by ACE INA or the Parent
to a Special Purpose Trust in exchange for proceeds of Preferred Securities
and common securities of such Special Purpose Trust.
"Debt" of any Person means, without duplication for purposes of
calculating financial ratios, (a) all indebtedness of such Person for
borrowed money, (b) all obligations of such Person for the deferred
purchase price of property or services (other than trade payables incurred
in the ordinary course of such Person's business), (c) all obligations of
such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all obligations of such Person created or arising under
any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all obligations of
such Person as lessee under Capitalized Leases (excluding imputed
interest), (f) all obligations of such Person under acceptance, letter of
credit or similar facilities, (g) all obligations of such Person to
purchase, redeem, retire, defease or otherwise make any payment in respect
of any Equity Interests (except for obligations to pay for Equity Interests
within customary settlement periods) in such Person or any other Person or
any 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;
6
provided further that "Debt" shall not include obligations in respect of
insurance or reinsurance contracts entered into in the ordinary course of
business; provided further that, solely for purposes of Section 5.04 and
the definitions of "Adjusted Consolidated Debt" and "Total Capitalization",
"Debt" shall not include (x) any contingent obligations of any Person under
or in connection with acceptance, letter of credit or similar facilities or
(y) obligations of the Parent or ACE INA under any Debentures or under any
subordinated guaranty of any Preferred Securities or obligations of a
Special Purpose Trust under any Preferred Securities.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
"Defaulted Amount" means, with respect to any Bank at any time,
any amount required to be paid by such Bank to any Agent or any other Bank
hereunder or under any other Loan Document at or prior to such time that
has not been so paid as of such time, including, without limitation, any
amount required to be paid by such Bank to (a) the Issuing Bank pursuant to
Section 2.02(e) to purchase a portion of a Letter of Credit Advance made by
the Issuing Bank and (b) any Agent or the Issuing Bank pursuant to Section
8.05 to reimburse such Agent or the Issuing Bank for such Bank's ratable
share of any amount required to be paid by the Banks to such Agent or the
Issuing Bank as provided therein.
"Defaulting Bank" means, at any time, any Bank that, at such time,
(a) owes a Defaulted Amount or (b) shall take any action or be the subject
of any action or proceeding of a type described in Section 6.01(f).
"Deutsche Bank" has the meaning specified in the recital of
parties to this Agreement.
"Documentation Agents" has the meaning specified in the recital of
parties to this Agreement.
"Dollar Equivalent" has the meaning specified in Section 2.16(h).
"Domestic Lending Office" means, with respect to any Bank, the
office of such Bank specified as its "Domestic Lending Office" opposite its
name on Part 2 of Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Bank, as the case may be, or such other
office of such Bank as such Bank may from time to time specify to any
Account Party and the Administrative Agent.
"Downgrade Account" has the meaning specified in Section 2.14(a).
"Downgrade Event" means, with respect to any Bank, a reduction of
the credit rating for the senior unsecured unsupported long-term debt of
such Bank (or, if no such rating exists, then a reduction of the long-term
issuer credit rating of such Bank) by S&P or Xxxxx'x.
"Downgrade Notice" has the meaning specified in Section 2.14(a).
"Downgraded Bank" means any Bank which has a credit rating of less
than A- (in the case of S&P) or A3 (in the case of Xxxxx'x) for its senior
unsecured unsupported long-term debt or which does not have any credit
rating on such debt from one of S&P or Xxxxx'x; provided, that if at any
time such Bank has no such senior unsecured unsupported long-term debt
7
rating from either rating service but does have a long-term issuer credit
rating from either or both services, then such Bank shall not be considered
a Downgraded Bank so long as such long-term issuer credit rating remains at
or above A- (in the case of S&P) or A3 (in the case of Xxxxx'x).
"Effective Date" means the first date on which the conditions set
forth in Article III shall have been satisfied.
"Eligible Assignee" means (i) a Bank, (ii) an Affiliate of a Bank,
or (iii) a commercial bank, a savings bank or other financial institution
that is approved by the Administrative Agent and the Issuing Bank and,
unless an Event of Default has occurred and is continuing at the time any
assignment is effected pursuant to Section 9.07, the Parent (such approvals
not to be unreasonably withheld or delayed); provided, however, that
neither any Loan Party nor any Affiliate of a Loan Party shall qualify as
an Eligible Assignee under this definition.
"Environmental Action" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of liability
or potential liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, any Environmental
Permit or Hazardous Material or arising from alleged injury or threat to
health, safety or the environment, including, without limitation, (a) by
any governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages and (b) by any governmental
or regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any Federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or agency interpretation, policy or guidance
relating to pollution or protection of the environment, health, safety or
natural resources, including, without limitation, those relating to the
use, handling, transportation, treatment, storage, disposal, release or
discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"Equity Interests" means, with respect to any Person, shares of
capital stock of (or other ownership or profit interests in) such Person,
warrants, options or other rights for the purchase or other acquisition
from such Person of shares of capital stock of (or other ownership or
profit interests in) such Person, securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase
or other acquisition from such Person of such shares (or such other
interests), and other ownership or profit interests in such Person
(including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares,
warrants, options, rights or other interests are authorized or otherwise
existing on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV
of ERISA is a member of the controlled group of any Loan Party, or under
common control with any Loan Party, within the meaning of Section 414 of
the Internal Revenue Code or Section 4001 of ERISA.
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"Events of Default" has the meaning specified in Section 6.01.
"Existing Letters of Credit" means, collectively, the Existing
Mellon Letter of Credit and the Existing Wachovia Letters of Credit.
"Existing Mellon Letter of Credit" means the letter of credit
originally issued by Mellon pursuant to the Mellon Reimbursement Agreement,
renewed by Mellon pursuant to the Existing Reimbursement Agreement, and
outstanding on the Effective Date, which letter of credit is listed on
Schedule III hereto.
"Existing Reimbursement Agreement" means the Reimbursement
Agreement, dated as of August 24, 2001, among the Account Parties, the
banks and other lenders named therein, Fleet National Bank, as
Documentation Agent, and Wachovia, as Issuing Bank and as Administrative
Agent, as amended.
"Existing Wachovia Letters of Credit" means the letters of credit
issued by Wachovia pursuant to the Existing Reimbursement Agreement and
outstanding on the Effective Date, which letters of credit are listed on
Schedule II hereto.
"Expiration Date" shall mean September 29, 2003.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the
average of the quotations for such day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"Fee Letter" means the fee letter dated August 23, 2002 among the
Parent, Wachovia and the Arranger, as amended.
"Fiscal Year" means the fiscal year of the Parent and its Consolidated
Subsidiaries ending on December 31 in any calendar year.
"Foreign Government Scheme or Arrangement" has the meaning
specified in Section 4.01 (n) (iv).
"Foreign Plan" has the meaning specified in Section 4.01 (n) (iv).
"GAAP" has the meaning specified in Section 1.03.
"Guaranty" means the undertaking by each of the Account Parties
under Article VII.
"Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and
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(b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other hedging
agreements.
"Indemnified Party" has the meaning specified in Section 9.04(b).
"Initial Availability Time" means, with respect to the Replacement
Letter of Credit, the first time at which the applicable conditions to
availability for drawing thereunder, as described on Exhibit B hereto,
shall have been satisfied and the Replacement Letter of Credit becomes
available for drawing in whole or in part.
"Initial Banks" has the meaning specified in the recital of
parties to this Agreement.
"Intercompany Letter of Credit" means a Letter of Credit issued
for the account of any Account Party (whether alone or jointly with any one
or more other wholly owned Subsidiaries of the Parent) in favor of one or
more beneficiaries each of which is a wholly owned Subsidiary of the Parent
(whether or not any such beneficiary is an Account Party hereunder).
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Investment" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any Equity Interests or Debt
or the assets comprising a division or business unit or a substantial part
or all of the business of such Person, any capital contribution to such
Person or any other direct or indirect investment in such Person,
including, without limitation, any acquisition by way of a merger or
consolidation and any arrangement pursuant to which the investor incurs
Debt of the types referred to in clause (h) or (i) of the definition of
"Debt" in respect of such Person; provided, however, that any purchase by
any Loan Party or any Subsidiary of any catastrophe-linked instruments
which are (x) issued for the purpose of transferring traditional
reinsurance risk to the capital markets and (y) purchased by such Loan
Party or Subsidiary in accordance with its customary reinsurance
underwriting procedures, or the entry by any Loan Party or any Subsidiary
into swap instruments relating to such instruments in accordance with such
procedures, shall be deemed to be the entry by such Person into a
reinsurance contract and shall not be deemed to be an Investment by such
Person.
"Issuing Bank" means (i) Mellon (solely with respect to the
Existing Mellon Letter of Credit), (ii) Wachovia (with respect to all other
Letters of Credit, including the Existing Wachovia Letters of Credit), and
(iii) any "New Issuing Bank" appointed in accordance with Section 2.15.
"JPMorgan Chase" has the meaning specified in the recital of
parties to this Agreement.
"Judgment Currency" has the meaning specified in Section 2.16(g).
10
"LC Commitment Amount" means, with respect to any Bank at any
time, the amount set forth opposite such Bank's name on Schedule I hereto
under the caption "LC Commitment Amount" or, if such Bank has entered into
one or more Assignment and Acceptances, set forth for such Bank in the
Register maintained by the Administrative Agent pursuant to Section 9.07(d)
as such Bank's "LC Commitment Amount", as such amount may be reduced at or
prior to such time pursuant to Section 2.04.
"LC Participation Obligations" has the meaning specified in
Section 2.14(a).
"L/C Related Documents" has the meaning specified in Section
2.03(a)(ii).
"Letter of Credit Advance" has the meaning specified in Section
2.02(f).
"Letter of Credit Agreement" has the meaning specified in Section
2.02(a).
"Letter of Credit Business Day" means a Business Day.
"Letter of Credit Exposure" at any time means the sum at such time
of (a) the aggregate outstanding amount of Letter of Credit Advances, (b)
the aggregate Available Amounts of all outstanding Letters of Credit
(including, without limitation, all outstanding Existing Letters of Credit)
and (c) the aggregate Available Amounts of all Letters of Credit which have
been requested by an Account Party to be issued hereunder but have not yet
been so issued.
"Letter of Credit Issuance Commitment Amount" means at any time
the lesser of (a) $500,000,000 (or such lesser amount as may be agreed in
writing among the Account Parties, the Administrative Agent and the Issuing
Bank) and (b) the aggregate amount of the LC Commitment Amounts then in
effect.
"Letter of Credit Participating Interest" has the meaning
specified in Section 2.02(d).
"Letter of Credit Participating Interest Commitment" has the
meaning specified in Section 2.02(d).
"Letter of Credit Participating Interest Percentage" means, for
any Bank, a fraction, expressed as a percentage, the numerator of which is
such Bank's LC Commitment Amount and the denominator of which is the
aggregate LC Commitment Amounts of all the Banks.
"Letters of Credit" has the meaning specified in Section 2.01.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"Loan Documents" means (i) this Agreement, (ii) the Fee Letter and
(iii) each Letter of Credit Agreement, in each case as amended.
"Loan Parties" means the Account Parties.
11
"Mandatorily Convertible Preferred Securities" means units
comprised of (i) Preferred Securities or preferred shares of Parent and
(ii) a contract for the sale of ordinary shares of the Parent (including
"Feline Prides(TM)", "Rhinos(TM)" or any substantially similar securities).
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change in the
business, financial condition, operations or properties of the Parent and
its Subsidiaries, taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a)
the business, condition, operations or properties of the Parent and its
Subsidiaries, taken as a whole, (b) the rights and remedies of the
Administrative Agent, the Issuing Bank or any Bank under any Loan Document
or (c) the ability of the Loan Parties, taken as a whole, to perform their
obligations under the Loan Documents.
"Material Financial Obligation" means a principal amount of Debt
and/or payment obligations in respect of any Hedge Agreement of the Parent
and/or one or more of its Subsidiaries arising in one or more related or
unrelated transactions exceeding in the aggregate $25,000,000.
"Mellon" means Mellon Bank, N.A.
"Mellon Reimbursement Agreement" means the Reimbursement
Agreement, dated as of September 8, 1999, among the Account Parties, the
banks and other lenders named therein, the Documentation Agents named
therein, and Mellon, as Issuing Bank and as Administrative Agent, as
amended.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate
is making or accruing an obligation to make contributions, or has within
any of the preceding five plan years made or accrued an obligation to make
contributions.
"Non-Dollar Letters of Credit" has the meaning specified in
Section 2.16(a).
"Nova Scotia" has the meaning specified in the recital of parties
to this Agreement.
"OECD" means the Organization for Economic Cooperation and
Development.
"Other Taxes" has the meaning specified in Section 2.08(b).
"Overnight Rate" has the meaning specified in Section 2.16(h).
"Parent" has the meaning specified in the recital of parties to
this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
12
"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.
"Preferred Interests" means, with respect to any Person, Equity
Interests issued by such Person that are entitled to a preference or
priority over any other Equity Interests issued by such Person upon any
distribution of such Person's property and assets, whether by dividend or
upon liquidation.
"Preferred Securities" means (i) preferred securities issued by a
Special Purpose Trust which shall provide, among other things, that
dividends shall be payable only out of proceeds of interest payments on the
Debentures, or (ii) other instruments that may be treated in whole or in
part as equity for rating agency purposes while being treated as debt for
tax purposes.
"Pro Rata" means from and to the Banks in accordance with their
respective Letter of Credit Participating Interest Percentages.
"Pro Rata Share" means, for any Bank, its share determined Pro
Rata, in accordance with the definition of the term "Pro Rata."
"Public Debt Rating" means, as of any date, the higher 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; provided that if at any time the difference between
the ratings of such type most recently announced by S&P and Xxxxx'x is more
than one rating grade, the Public Debt Rating shall be the rating that is
13
one grade below the higher of such two ratings. For purposes of the
foregoing, (a) if only one of S&P and Moody's shall have in effect a rating
for any class of non-credit enhanced long-term senior unsecured debt issued
by the Parent, the Public Debt Rating shall be the available rating; (b) if
neither S&P nor Moody's shall have in effect a rating for any class of
non-credit enhanced long-term senior unsecured debt issued by the Parent,
the Public Debt Rating shall be the rating 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; (c) 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
(d) if S&P or Moody's shall change the basis on which ratings are
established, each reference herein to ratings 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.
"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.
"Replacement Letter of Credit" means the letter of credit issued
by Wachovia pursuant to the Existing Reimbursement Agreement and
outstanding on the Effective Date, which letter of credit (i) was issued in
replacement of and substitution for the Existing Mellon Letter of Credit
and includes language substantially as set forth on Exhibit B hereto and
(ii) is listed on Schedule IV hereto.
"Required Banks" means, at any time, Banks owed or holding at
least a majority in interest of the sum of (a) aggregate principal amount
of the Letter of Credit Advances outstanding at such time and (b) the
aggregate Available Amount of all Letters of Credit outstanding at such
time, or, if no such principal amount and no Letters of Credit are
outstanding at such time, Banks having LC Commitment Amounts constituting
at least a majority in interest of the aggregate of the LC Commitment
Amounts; provided, however, that if any Bank shall be a Defaulting Bank at
such time, there shall be excluded from the determination of Required Banks
at such time (A) the aggregate principal amount of the interest of such
Bank in Letter of Credit Advances and outstanding at such time, (B) such
Bank's Pro Rata Share of the aggregate Available Amount of all Letters of
Credit outstanding at such time and (C) the Unused LC Commitment Amount of
such Bank at such time.
"Responsible Officer" means the Chairman, Chief Executive Officer,
President, Chief Financial Officer, Chief Accounting Officer, Treasurer or
General Counsel of the Parent.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
14
"Securitization Transaction" means any sale, assignment or other
transfer by Parent or any Subsidiary of any accounts receivable, premium
finance loan receivables, lease receivables or other payment obligations
owing to Parent or such Subsidiary or any interest in any of the foregoing,
together in each case with any collections and other proceeds thereof, any
collection or deposit accounts related thereto, and any collateral,
guaranties or other property or claims in favor of Parent or such
Subsidiary supporting or securing payment by the obligor thereon of, or
otherwise related to, any such receivables.
"Significant Subsidiary" means a Subsidiary of Parent that is a
"significant subsidiary" of the Parent under Regulation S-X promulgated by
the Securities and Exchange Commission.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the present
fair salable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay such debts and liabilities as they mature and
(d) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount that, in
the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual
or matured liability.
"Special Purpose Trust" means a special purpose business trust
established by the Parent or ACE INA of which the Parent or ACE INA will
hold all the common securities, which will be the issuer of the Preferred
Securities, and which will loan to the Parent or ACE INA (such loan being
evidenced by the Debentures) the net proceeds of the issuance and sale of
the Preferred Securities and common securities of such Special Purpose
Trust.
"Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or in
which) more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interest in the capital or
profits of such partnership, joint venture or limited liability company or
(c) the beneficial interest in such trust or estate is at the time directly
or indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Subsidiary Guarantors" means the Account Parties (other than the
Parent).
"Syndication Agents" has the meaning specified in the recital of
parties to this Agreement.
"Taxes" has the meaning specified in Section 2.08(a).
15
"Tempest" has the meaning specified in the recital of parties to
this Agreement.
"Third Party Letter of Credit" means a Letter of Credit other than
an Intercompany Letter of Credit.
"Total Capitalization" means, at any time, an amount (without
duplication) equal to (i) the then outstanding Consolidated Debt of the
Parent and its Subsidiaries plus (ii) Consolidated stockholders equity of
the Parent and its Subsidiaries plus (without duplication) (iii) the then
issued and outstanding amount of Preferred Securities (including
Mandatorily Convertible Preferred Securities) and (without duplication)
Debentures.
"Type", with respect to any Letter of Credit, means and refers to
whether such Letter of Credit is an Intercompany Letter of Credit or a
Third Party Letter of Credit.
"Unused LC Commitment Amount" means, with respect to any Bank at
any time, (a) such Bank's LC Commitment Amount at such time minus (b) such
Bank's Pro Rata Share of (i) the aggregate Available Amount of all Letters
of Credit hereunder (including, without limitation, all Existing Letters of
Credit) and (ii) the aggregate principal amount of all Letter of Credit
Advances made by the Issuing Bank pursuant to Section 2.02(f) and
outstanding at such time (whether held by the Issuing Bank or the Banks).
"Voting Interests" means shares of capital stock issued by a
corporation, or equivalent Equity Interests in any other Person, the
holders of which are ordinarily, in the absence of contingencies, entitled
to vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been suspended
by the happening of such a contingency.
"Wachovia" has the meaning specified in the recital of parties to
this Agreement.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of any Loan Party or in respect of
which any Loan Party could have liability.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02 Computation of Time Periods; Other Definitional Provisions.
In this Agreement and the other Loan Documents in the computation of periods
of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding". References in the Loan Documents to any agreement or contract
"as amended" shall mean and be a reference to such agreement or contract as
amended, amended and restated, supplemented or otherwise modified from time
to time in accordance with its terms.
SECTION 1.03 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted,
all accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from
16
time to time in the United States of America ("GAAP"), applied on a basis
consistent (except for changes concurred in by the Parent's independent
public accountants) with the most recent audited consolidated financial
statements of the Parent and its Subsidiaries delivered to the Banks;
provided that, if the Parent notifies the Administrative Agent that the
Parent wishes to amend any covenant in Article V to eliminate the effect of
any change in generally accepted accounting principles on the operation of
such covenant (or if the Administrative Agent notifies the Parent that the
Required Banks wish to amend Article V for such purpose), then the Parent's
compliance with such covenant shall be determined on the basis of generally
accepted accounting principles in effect immediately before the relevant
change in generally accepted accounting principles became effective (and,
concurrently with the delivery of any financial statements required to be
delivered hereunder, the Parent shall provide a statement of reconciliation
conforming such financial information to such generally accepted accounting
principles as previously in effect), until either such notice is withdrawn
or such covenant is amended in a manner satisfactory to the Parent and the
Required Banks.
ARTICLE II
AMOUNTS AND TERMS OF
THE LETTERS OF CREDIT
SECTION 2.01 The Letters of Credit. The Issuing Bank agrees, on the terms
and subject to the conditions herein set forth, to issue standby letters of
credit (the "Letters of Credit") for the account of any Account Party on
any Letter of Credit Business Day from time to time during the period from
the Effective Date to the Expiration Date. The agreement of the Issuing
Bank in the preceding sentence includes the agreement of Mellon (in its
capacity as Issuing Bank with respect to the Existing Mellon Letter of
Credit) to maintain the Existing Mellon Letter of Credit as a Letter of
Credit hereunder. From and after the Effective Date, the Existing Letters
of Credit shall be Letters of Credit hereunder. Letters of Credit may be
issued as Intercompany Letters of Credit or Third Party Letters of Credit,
subject to the terms and conditions of this Agreement. The Issuing Bank
shall have no obligation to issue, and no Account Party will request the
issuance of, any Letter of Credit hereunder if either (a) at the time of
issuance of such Letter of Credit and after giving effect thereto, the
Letter of Credit Exposure would exceed the Letter of Credit Issuance
Commitment Amount, or (b) any Bank's Pro Rata Share of the Available Amount
of such Letter of Credit exceeds, immediately before the time of such
issuance, an amount equal to such Bank's Pro Rata Share of the total Unused
LC Commitment Amounts of the Banks at such time (as such amount shall be
advised by the Administrative Agent to the Issuing Bank as contemplated by
Section 2.02). Unless all the Banks consent otherwise in writing, the
Issuing Bank shall have no obligation to issue, and no Account Party shall
request the issuance of, any Letter of Credit hereunder if the Available
Amount of such Letter of Credit exceeds, immediately before the time of
such issuance, an amount equal to the total Unused LC Commitment Amounts of
the Banks at such time (as such amount shall be advised by the
Administrative Agent to the Issuing Bank as contemplated by Section 2.02).
The Issuing Bank shall have no obligation to issue, and no Account Party
shall request the issuance of, any Letter of Credit except within the
following limitations: (i) subject to the provisions of Section 2.16, each
Letter of Credit shall be denominated in U.S. dollars, (ii) each Letter of
Credit shall be payable only against sight drafts (and not time drafts) and
(iii) no Letter of Credit shall have an expiration date (including all
rights of the Applicable Account Party or the beneficiary to require
renewal) later than one year after the date of issuance thereof, but a
Letter of Credit may by its terms be automatically renewable annually
17
unless the Issuing Bank notifies the beneficiary thereof of its election
not to renew such Letter of Credit (which the Issuing Bank agrees to do on
and subject to the terms of Section 2.02(c)). The Issuing Bank shall have
no obligation to issue any letter of credit which is unsatisfactory in
form, substance or beneficiary to the Issuing Bank in the exercise of its
reasonable judgment consistent with its customary practice. Letters of
Credit may be issued for the account of any Subsidiary of the Parent that
is not an Account Party hereunder, provided that the Parent shall be a
joint applicant and account party with respect to any such Letter of
Credit.
SECTION 2.02 Issuance and Renewals and Drawings, Participations and
Reimbursement with Respect to Letters of Credit.
(a) Request for Issuance. An Account Party may from time to time
request, upon at least three Letter of Credit Business Days' notice (given
not later than 11:00 A.M. Charlotte, North Carolina time on the last day
permitted therefor), the Issuing Bank to issue or renew (other than any
automatic renewal thereof) a Letter of Credit by:
(i) delivering to the Issuing Bank either (x) a written request to
such effect or (y) a request made in electronic form through the
Issuing Bank's remote access system and in accordance with the
terms and conditions (including any written agreements between the
Issuing Bank and any Account Party) applicable thereto, in each
case specifying the date on which such Letter of Credit is to be
issued (which shall be a Letter of Credit Business Day), the
expiration date thereof, the Available Amount thereof, the name
and address of the beneficiary thereof and the form thereof, and
in each case with a copy of such request (or, in the case of
clause (y) above, a written or electronic summary thereof) to the
Administrative Agent; and
(ii) in the case of the issuance of a Letter of Credit, delivering
to the Issuing Bank a completed agreement and application with
respect to such Letter of Credit as the Issuing Bank may specify
for use in connection with such requested Letter of Credit (a
"Letter of Credit Agreement"), together with such other
certificates, documents and other papers or information as are
specified in such Letter of Credit Agreement or as may be required
pursuant to the Issuing Bank's customary practices for the
issuance of letters of credit (including requirements relating to
requests made through the Issuing Bank's remote access system).
The Administrative Agent shall, promptly upon receiving a copy of the
notice referred to in clause (i) above, notify the Banks of such proposed
Letter of Credit (which notice shall specify the Available Amount and term
of such proposed Letter of Credit) or such proposed renewal of a Letter of
Credit (which notice shall specify the term of such renewal), and shall
determine, as of 11:00 A.M. (Charlotte, North Carolina time) on the
Business Day immediately preceding such proposed issuance, whether such
proposed Letter of Credit complies with the limitations set forth in
Section 2.01 hereof. If such limitations set forth in Section 2.01 are not
satisfied or if the Required Banks have given notice to the Administrative
18
Agent to cease issuing or renewing Letters of Credit as contemplated by
this Agreement, the Administrative Agent shall immediately notify the
Issuing Bank (in writing or by telephone immediately confirmed in writing)
that the Issuing Bank is not authorized to issue or renew, as the case may
be, such Letter of Credit. If the Issuing Bank issues or renews a Letter of
Credit, it shall deliver the original of such Letter of Credit to the
beneficiary thereof or as the Applicable Account Party shall otherwise
direct, and shall promptly notify the Administrative Agent thereof and
furnish a copy thereof to the Administrative Agent. The Issuing Bank may
issue Letters of Credit through any of its branches or Affiliates (whether
domestic or foreign) that issue letters of credit, and each Account Party
authorizes and directs the Issuing Bank to select the branch or Affiliate
that will issue or process any Letter of Credit.
(b) Request for Extension or Increase. An Account Party may from time
to time request the Issuing Bank to extend the expiration date of an
outstanding Letter of Credit issued for its account or increase (or, with
the consent of the beneficiary, decrease) the Available Amount of or the
amount available to be drawn on such Letter of Credit. Such extension or
increase shall for all purposes hereunder (including for purposes of
Section 2.02(a)) be treated as though such Account Party had requested
issuance of a replacement Letter of Credit (except only that the Issuing
Bank may, if it elects, issue a notice of extension or increase in lieu of
issuing a new Letter of Credit in substitution for the outstanding Letter
of Credit).
(c) Limitations on Issuance, Extension, Renewal and Amendment. As
between the Issuing Bank, on the one hand, and the Agents and the Banks, on the
other hand, the Issuing Bank shall be justified and fully protected in
issuing or renewing a proposed Letter of Credit unless it shall have
received notice from the Administrative Agent as provided in Section
2.02(a) hereof that it is not authorized to do so (and, in the case of
automatic renewals, ten days shall have passed following the date of the
Issuing Bank's receipt of such notice), notwithstanding any subsequent
notices to the Issuing Bank, any knowledge of a Default, any knowledge of
failure of any condition specified in Article III hereof to be satisfied,
any other knowledge of the Issuing Bank, or any other event, condition or
circumstance whatsoever. The Issuing Bank may amend, modify or supplement
Letters of Credit or Letter of Credit Agreements, or waive compliance with
any condition of issuance, renewal or payment, without the consent of, and
without liability to, any Agent or any Bank, provided that any such
amendment, modification or supplement that extends the expiration date or
increases the Available Amount of or the amount available to be drawn on an
outstanding Letter of Credit shall be subject to Section 2.01. With respect
to each Letter of Credit that remains outstanding at any time after the
Expiration Date and that provides by its terms for automatic renewal, the
Issuing Bank shall notify the beneficiary thereof, in accordance with the
terms specified for such notice in such Letter of Credit, of the Issuing
Bank's election not to renew such Letter of Credit. Notwithstanding
anything in this Section 2.02 or elsewhere in this Agreement to the
contrary, (x) no Account Party will request that the Existing Mellon Letter
of Credit be amended (other than to reduce the Available Amount
thereunder), renewed or extended, and the Account Parties hereby request
that Mellon, as Issuing Bank with respect to the Existing Mellon Letter of
Credit, provide timely notice of non-renewal to the beneficiary thereof (to
the extent the Existing Mellon Letter of Credit remains outstanding up
until the deadline for notice of non-renewal), and in any event if the
Existing Mellon Letter of Credit shall nevertheless be outstanding at any
time after the Expiration Date, Mellon hereby agrees to provide such notice
of non-renewal to the beneficiary thereof, and (y) all Letters of Credit
issued under this Agreement (excluding the Existing Mellon Letter of
Credit, but including any Letters of Credit issued in replacement of or in
substitution for the Existing Mellon Letter of Credit) shall be issued by
Wachovia (or any New Issuing Bank, as the case may be) in its capacity as
19
Issuing Bank. Solely with respect to the Existing Mellon Letter of Credit
and any Letter of Credit Agreements delivered in connection therewith,
Mellon (in its capacity as issuer of the Existing Mellon Letter of Credit)
shall have all rights and benefits afforded to, and shall be bound by all
duties and obligations of, the "Issuing Bank" under this Agreement, and for
such purpose all references herein to the "Issuing Bank" shall be deemed to
be references to Mellon in such capacity.
(d) Letter of Credit Participating Interests. Concurrently with the
issuance of each Letter of Credit (and upon the Effective Date, with
respect to each Existing Letter of Credit, and without any further action
by any party to this Agreement), the Issuing Bank automatically shall be
deemed, irrevocably and unconditionally, to have sold, assigned,
transferred and conveyed to each other Bank, and each other Bank
automatically shall be deemed, irrevocably and unconditionally, severally
to have purchased, acquired, accepted and assumed from the Issuing Bank,
without recourse to, or representation or warranty by, the Issuing Bank, an
undivided interest, in a proportion equal to such Bank's Pro Rata Share, in
all of the Issuing Bank's rights and obligations in, to or under such
Letter of Credit, the related Letter of Credit Agreement, all reimbursement
obligations with respect to such Letter of Credit, and all collateral,
guarantees and other rights from time to time directly or indirectly
securing the foregoing (such interest of each Bank being referred to herein
as a "Letter of Credit Participating Interest", it being understood that
the Letter of Credit Participating Interest of the Issuing Bank is the
interest not otherwise attributable to the Letter of Credit Participating
Interests of the other Banks). Each Bank irrevocably and unconditionally
agrees to the immediately preceding sentence, such agreement being herein
referred to as such Bank's "Letter of Credit Participating Interest
Commitment". Amounts, other than Letter of Credit Advances made by a Bank
other than the Issuing Bank and other than Letter of Credit commissions
under Section 2.05(c)(i), payable from time to time under or in connection
with a Letter of Credit or Letter of Credit Agreement shall be for the sole
account of the Issuing Bank. On the date that any assignee becomes a party
to this Agreement in accordance with Section 9.07 hereof, Letter of Credit
Participating Interests in all outstanding Letters of Credit held by the
Bank from which such assignee acquired its interest hereunder shall be
proportionately reallocated between such assignee and such assignor Bank
(and, to the extent such assignor Bank is the Issuing Bank, the assignee
Bank shall be deemed to have acquired a Letter of Credit Participating
Interest from the Issuing Bank to such extent). Notwithstanding any other
provision hereof except the next succeeding sentence, each Bank hereby
agrees that its obligation to participate in each Letter of Credit, its
obligation to make the payments specified in Section 2.02(e), and the right
of the Issuing Bank to receive such payments in the manner specified
therein, are each absolute, irrevocable and unconditional and shall not be
affected by any event, condition or circumstance whatever. Notwithstanding
anything to the contrary herein contained, no Bank shall have any
participation or funding obligation with respect to any drawing under the
Replacement Letter of Credit unless the Existing Mellon Letter of Credit
shall have been cancelled or shall have terminated, in each case without
any unreimbursed drawing thereunder. The failure of any Bank to make any
such payment shall not relieve any other Bank of its funding obligation
hereunder on the date due, but no Bank shall be responsible for the failure
of any other Bank to meet its funding obligations hereunder.
(e) Payment by Banks on Account of Unreimbursed Draws. If the Issuing
Bank makes a payment under any Letter of Credit and is not reimbursed in full
therefor on such payment date in accordance with Section 2.03(a), the
Issuing Bank may notify the Administrative Agent thereof (which notice may
20
be by telephone), and the Administrative Agent shall forthwith notify each
Bank (which notice may be by telephone promptly confirmed in writing)
thereof. No later than the Administrative Agent's close of business on the
date such notice is given (if notice is given by 2:00 P.M. Charlotte, North
Carolina time) or 10:00 A.M. Charlotte, North Carolina time the following
day (if notice is given after 2:00 P.M. Charlotte, North Carolina time or
in the case of any Bank whose Applicable Lending Office is located in
Europe), each Bank will pay to the Administrative Agent, for the account of
the Issuing Bank, in immediately available funds, an amount equal to such
Bank's Pro Rata Share of the unreimbursed portion of such payment by the
Issuing Bank. Amounts received by the Administrative Agent for the account
of the Issuing Bank shall be forthwith transferred, in immediately
available funds, to the Issuing Bank. If and to the extent that any Bank
fails to make such payment to the Administrative Agent for the account of
the Issuing Bank on such date, such Bank shall pay such amount on demand,
together with interest, for the Issuing Bank's own account, for each day
from and including the date such payment is due from such Bank to the
Issuing Bank to but not including the date of repayment to the Issuing Bank
(before and after judgment) at a rate per annum for each day (i) from and
including the date such payment is due from such Bank to the Issuing Bank
to and including the second Business Day thereafter equal to the Federal
Funds Rate and (ii) thereafter equal to the Base Rate. For avoidance of
doubt, it is understood and agreed by the Banks that Letters of Credit
issued prior to the Expiration Date may, by their terms, remain outstanding
after the Expiration Date and that the obligations of the Banks to make
payments under this Section 2.02(e) shall continue from and after the
Expiration Date until the expiration or termination of all Letters of
Credit, subject to and in accordance with the terms hereof.
(f) Letter of Credit Advances. The term "Letter of Credit Advance" is
used in this Agreement in accordance with the meanings set forth in this
paragraph 2.02(f). The making of any payment by the Issuing Bank under a
Letter of Credit is sometimes referred to herein as the making of a Letter
of Credit Advance by the Issuing Bank in the amount of such payment. The
making of any payment by a Bank for the account of the Issuing Bank under
Section 2.02(e) on account of an unreimbursed drawing on a Letter of Credit
is sometimes referred to herein as the making of a Letter of Credit Advance
to the Applicable Account Party by such Bank. The making of such a Letter
of Credit Advance by a Bank with respect to an unreimbursed drawing on a
Letter of Credit shall reduce, by a like amount, the outstanding Letter of
Credit Advance of the Issuing Bank with respect to such unreimbursed
drawing.
(g) Letter of Credit Reports. The Issuing Bank will furnish to the
Administrative Agent prompt written notice of each issuance or renewal of a
Letter of Credit (including the Available Amount and expiration date
thereof), amendment to a Letter of Credit, cancellation of a Letter of
Credit and payment on a Letter of Credit. The Administrative Agent will
furnish (A) to each Bank prior to the tenth Business Day of each calendar
quarter a written report summarizing issuance, renewal and expiration dates
of Letters of Credit issued or renewed during the preceding calendar
quarter and payments and reductions in Available Amount during such
calendar quarter on all Letters of Credit and (B) to each Bank prior to the
tenth Business Day of each calendar quarter a written report setting forth
the average daily aggregate Available Amount during the preceding calendar
quarter of all Letters of Credit.
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(h) Replacement Letter of Credit. With respect to any Replacement
Letter of Credit, Wachovia (in its capacity as Issuing Bank) will deliver to the
beneficiary thereof the written confirmation that the Replacement Letter of
Credit is operative for drawing, as contemplated by the provisions of
Exhibit B hereto, promptly upon its receipt of written confirmation from
Mellon (in its capacity as Issuing Bank), which shall be in form and
substance satisfactory to Wachovia, that the Existing Mellon Letter of
Credit has been validly cancelled.
SECTION 2.03 Repayment of Advances.
(a) Account Parties' Reimbursement Obligation.
(i) Each Account Party hereby agrees to reimburse the Issuing
Bank (by making payment to the Administrative Agent for the
account of the Issuing Bank in accordance with Section 2.07) in the
amount of each payment made by the Issuing Bank under any Letter of
Credit issued for such Account Party's account, such reimbursement to
be made on the date such payment under such Letter of Credit is made
by the Issuing Bank (but not earlier than the date which is one
Business Day after notice of such payment under such Letter of Credit
or of the drawing giving rise to such payment under such Letter of
Credit is given to such Account Party). Such reimbursement obligation
shall be payable without further notice, protest or demand, all of
which are hereby waived, and an action therefor shall immediately
accrue. To the extent such payment by such Account Party
is not timely made as provided in the first sentence of this clause
(i), such Account Party hereby agrees to pay to the Administrative
Agent, for the respective accounts of the Issuing Bank and the Banks
which have funded their respective shares of such amount remaining
unpaid by such Account Party, on demand, interest thereon at a rate
per annum for each day equal to 2% plus the Base Rate in effect on
such day.
(ii) The obligation of each Account Party to reimburse the
Issuing Bank for any payment made by the Issuing Bank under any Letter
of Credit, and the obligation of each Bank under Section 2.02(e) with
respect thereto, shall be unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement, the
applicable Letter of Credit Agreement and any other applicable
agreement or instrument under all circumstances, including, without
limitation, the following circumstances:
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of
Credit or any other agreement or instrument relating
thereto (all of the foregoing being, collectively, the
"L/C Related Documents");
(B) any change in the time, manner or place of payment of,
or in any other term of, all or any of the obligations of
any Account Party or any other Person in respect of any
L/C Related Document or any other amendment or waiver of
or any consent to departure from all or any of the L/C
Related Documents;
22
(C) the existence of any claim, set-off, defense or other
right that any Account Party or any other Person may have
at any time against any beneficiary or any transferee of
a Letter of Credit (or any Persons for which any such
beneficiary or any such transferee may be acting), the
Issuing Bank or any other Person, whether in connection
with the transactions contemplated by the L/C Related
Documents or any unrelated transaction;
(D) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(E) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does
not strictly comply with the terms of such Letter of
Credit;
(F) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or
consent to departure from the Guaranty or any other
guarantee, for all or any of the obligations of any
Account Party or any other Person in respect of the L/C
Related Documents; or
(G) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including,
without limitation, any other circumstance that might
otherwise constitute a defense available to, or a
discharge of, any Account Party or a guarantor.
(b) Rescission. If any amount received by the Issuing Bank on
account of any Letter of Credit Advance shall be avoided, rescinded or
otherwise returned or paid over by the Issuing Bank for any reason at any
time, whether before or after the termination of this Agreement (or the
Issuing Bank believes in good faith that such avoidance, rescission, return
or payment is required, whether or not such matter has been adjudicated),
each Bank will (except to the extent a corresponding amount received by
such Bank on account of its Letter of Credit Advance relating to the same
payment on a Letter of Credit has been avoided, rescinded or otherwise
returned or paid over by such Bank), promptly upon notice from the
Administrative Agent or the Issuing Bank, pay over to the Administrative
Agent for the account of the Issuing Bank its Pro Rata Share of such
amount, together with its Pro Rata Share of any interest or penalties
payable with respect thereto.
SECTION 2.04 Termination or Reduction of the LC Commitment Amounts. The
Parent may, upon at least three Business Days' notice to the Administrative
Agent, terminate in whole or reduce in part the unused portion of the LC
Commitment Amounts; provided, however, that each partial reduction (i)
shall be in an aggregate amount of $10,000,000 or an integral multiple of
$1,000,000 in excess thereof, (ii) shall be made ratably among the Banks in
accordance with their LC Commitment Amounts and (iii) shall automatically
reduce the Issuing Bank's Letter of Credit Issuance Commitment Amount, as
contemplated by the definition of that term.
SECTION 2.05 Fees.
(a) Commitment Fee. The Account Parties jointly and severally agree to
pay to the Administrative Agent for the account of the Banks a commitment
fee, from the Effective Date in the case of each Initial Bank and from the
23
effective date specified in the Assignment and Acceptance pursuant to which
it became a Bank in the case of each other Bank until the Expiration Date,
payable in arrears quarterly on the last Business Day of each March, June,
September and December commencing December 31, 2002 and on the Expiration
Date, at the rate of the Applicable Commitment Fee Percentage on the
average daily Unused LC Commitment Amount of each Bank during such quarter
(or shorter period); provided, however, that no commitment fee shall accrue
on the LC Commitment Amount of a Defaulting Bank so long as such Bank shall
be a Defaulting Bank; and provided further that, solely for purposes of
this Section 2.05(a), to the extent the Replacement Letter of Credit has a
positive Available Amount prior to the Initial Availability Time, such
Available Amount shall not be taken into account (i.e., shall not be deemed
usage) in the calculation of the Unused LC Commitment Amounts of the Banks
until the Initial Availability Time.
(b) Administrative Agent's Fees. The Account Parties jointly and
severally agree to pay to the Administrative Agent for its own account such
fees as may from time to time be agreed between the Parent and the
Administrative Agent.
(c) Letter of Credit Fees, Etc.
(i) The Account Parties jointly and severally agree to pay to the
Administrative Agent for the account of each Bank a commission,
payable in arrears quarterly on the last Business Day of each March,
June, September and December commencing December 31, 2002, and on the
Expiration Date, on such Bank's Pro Rata Share of the average daily
aggregate Available Amount during such quarter (or shorter period) of
all Letters of Credit of each Type outstanding from time to time at
the rate equal to the then Applicable Margin with respect to such Type
of Letters of Credit; provided, however, that, solely for purposes of
this Section 2.05(c)(i), to the extent the Replacement Letter of
Credit has a positive Available Amount prior to the Initial
Availability Time, the Replacement Letter of Credit shall not be
deemed outstanding until the Initial Availability Time.
(ii) The Account Parties jointly and severally agree to pay to
the Issuing Bank, for its own account, (x) the facing fee referred
to the Fee Letter, on the terms set forth therein, and (y) the Issuing
Bank's customary issuance, presentation, amendment and other processing
fees, and other standard costs and charges, relating to letters of
credit as are from time to time in effect; provided, however, that for
purposes of clause (x) above, the Replacement Letter of Credit shall
not be deemed issued and outstanding until the Initial Availability
Time. With respect to the Existing Mellon Letter of Credit, Mellon
shall be entitled to receive the fees and other amounts provided for
under this Section 2.05(c)(ii) (to the extent not previously paid to
Mellon pursuant to the Mellon Reimbursement Agreement or the Existing
Reimbursement Agreement) as if the Existing Mellon Letter of Credit
were issued hereunder on the Effective Date. With respect to the
Existing Wachovia Letters of Credit, Wachovia shall be entitled to
receive the fees and other amounts provided for under this
Section 2.05(c)(ii) (to the extent not previously paid to Wachovia
pursuant to the Existing Reimbursement Agreement) as if the Existing
Wachovia Letters of Credit were issued hereunder on the Effective Date.
24
SECTION 2.06 Increased Costs, Etc.
(a) If, due to either (i) the introduction of or any change in or in
the interpretation of, in each case after the date hereof, any law or
regulation or (ii) the compliance with any guideline or request issued
after the date hereof from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in
the cost to any Bank of agreeing to issue or of issuing or maintaining or
participating in Letters of Credit or the making of Letter of Credit
Advances (excluding, for purposes of this Section 2.06, any such increased
costs resulting from (x) Taxes or Other Taxes (as to which Section 2.08
shall govern) and (y) changes in the basis of taxation of overall net
income or overall gross income by the United States or by the foreign
jurisdiction or state under the laws of which such Bank is organized or has
its Applicable Lending Office or any political subdivision thereof), then
the Account Parties jointly and severally agree to pay, from time to time,
within five days after demand by such Bank (with a copy of such demand to
the Administrative Agent), which demand shall include a statement of the
basis for such demand and a calculation in reasonable detail of the amount
demanded, to the Administrative Agent for the account of such Bank
additional amounts sufficient to compensate such Bank for such increased
cost. A certificate as to the amount of such increased cost, submitted to
the Account Parties by such Bank, shall be conclusive and binding for all
purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any change in or in
the interpretation of any law or regulation, in each case after the date
hereof, or (ii) the compliance with any guideline or request issued after
the date hereof from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in
the amount of capital required or expected to be maintained by any Bank or
any corporation controlling such Bank as a result of or based upon the
existence of such Bank's commitment to lend hereunder and other commitments
of such type, then, within five days after demand by such Bank or such
corporation (with a copy of such demand to the Administrative Agent), which
demand shall include a statement of the basis for such demand and a
calculation in reasonable detail of the amount demanded, the Account
Parties jointly and severally agree to pay to the Administrative Agent for
the account of such Bank, from time to time as specified by such Bank,
additional amounts sufficient to compensate such Bank in the light of such
circumstances, to the extent that such Bank reasonably determines such
increase in capital to be allocable to the existence of such Bank's
commitment to issue or participate in Letters of Credit hereunder or to the
issuance or maintenance of or participation in any Letters of Credit. A
certificate as to such amounts submitted to the Account Parties by such
Bank shall be conclusive and binding for all purposes, absent manifest
error.
(c) Each Bank shall promptly notify the Account Parties and the
Administrative Agent of any event of which it has actual knowledge which
will result in, and will use reasonable commercial efforts available to it
(and not, in such Bank's good faith judgment, otherwise disadvantageous to
such Bank) to mitigate or avoid any obligation by the Account Parties to
pay any amount pursuant to subsection (a) or (b) above or pursuant to
Section 2.08 (and, if any Bank has given notice of any such event and
thereafter such event ceases to exist, such Bank shall promptly so notify
the Account Parties and the Administrative Agent). Without limiting the
foregoing, each Bank will designate a different Applicable Lending Office
25
if such designation will avoid (or reduce the cost to the Account Parties
of) any event described in the preceding sentence and such designation will
not, in such Bank's good faith judgment, be otherwise disadvantageous to
such Bank.
(d) Notwithstanding the provisions of subsections (a) and (b) above or
Section 2.08 (and without limiting subsection (c) above), if any Bank fails
to notify the Account Parties of any event or circumstance that will
entitle such Bank to compensation pursuant subsection (a) or (b) above or
Section 2.08 within 120 days after such Bank obtains actual knowledge of
such event or circumstance, then such Bank shall not be entitled to
compensation from the Account Parties for any amount arising prior to the
date which is 120 days before the date on which such Bank notifies the
Account Parties of such event or circumstance. For avoidance of doubt, it
is noted that the term "Bank" as used in this Section 2.06 and in other
Sections of this Agreement includes the Issuing Bank in its capacity as
such.
SECTION 2.07 Payments and Computations.
(a) The Account Parties shall make each payment hereunder irrespective
of any right of counterclaim or set-off (except as otherwise provided in
Section 2.11), not later than 11:00 A.M. (Charlotte, North Carolina time)
on the day when due, in U.S. dollars, to the Administrative Agent at the
Administrative Agent's Account in same day funds, with payments being
received by the Administrative Agent after such time being deemed to have
been received on the next succeeding Business Day. The Administrative Agent
will promptly thereafter cause like funds to be distributed (i) if such
payment by such Account Party is in respect of principal, interest,
commitment fees or any other amount then payable hereunder to more than one
Bank, to such Banks for the account of their respective Applicable Lending
Offices ratably in accordance with the amounts of such respective amount
then payable to such Banks and (ii) if such payment by such Account Party
is in respect of any amount then payable hereunder to one Bank, to such
Bank for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement. Upon its acceptance
of an Assignment and Acceptance and recording of the information contained
therein in the Register pursuant to Section 9.07(d), from and after the
effective date of such Assignment and Acceptance, the Administrative Agent
shall make all payments hereunder in respect of the interest assigned
thereby to the Bank assignee thereunder, and the parties to such Assignment
and Acceptance shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
(b) Each Account Party hereby authorizes each Bank, if an Event of
Default under Section 6.01(a) has occurred and is continuing, to charge from
time to time against any or all of such Account Party's accounts with such Bank
any amount that resulted in such Event of Default.
(c) All computations of interest on Letter of Credit Advances (and any
other amount payable by reference to the Base Rate) when the Base Rate is
determined by reference to Wachovia's prime rate shall be made by the
Administrative Agent on the basis of a year of 365 or, if applicable, 366
days; all other computations of interest, fees and Letter of Credit
commissions shall be made by the Administrative Agent on the basis of a
year of 360 days. All such computations shall be made for the actual number
of days (including the first day but excluding the last day) occurring in
the period for which such interest, fees or commissions are payable. Each
determination by the Administrative Agent of an interest rate, fee or
commission hereunder shall be conclusive and binding for all purposes,
absent manifest error.
26
(d) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in
the computation of payment of interest or fee, as the case may be.
SECTION 2.08 Taxes.
(a) Any and all payments by any Loan Party hereunder shall be made, in
accordance with Section 2.07, free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Bank and each Agent, taxes that are imposed on its overall
net income by the United States and taxes that are imposed on its overall
net income (and franchise taxes imposed in lieu thereof) by the state or
foreign jurisdiction under the laws of which such Bank or such Agent, as
the case may be, is organized or any political subdivision thereof and, in
the case of each Bank, taxes that are imposed on its overall net income
(and franchise taxes imposed in lieu thereof) by the state or foreign
jurisdiction of such Bank's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities in respect of payments
hereunder being herein referred to as "Taxes"). If any Loan Party shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or to any Bank or any Agent, (i) the sum payable by such Loan
Party shall be increased as may be necessary so that after such Loan Party
and the Administrative Agent have made all required deductions (including
deductions applicable to additional sums payable under this Section 2.08)
such Bank or such Agent, as the case may be, receives an amount equal to
the sum it would have received had no such deductions been made, (ii) such
Loan Party shall make all such deductions and (iii) such Loan Party shall
pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) In addition, each Loan Party shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that
arise from any payment made hereunder or from the execution, delivery or
registration of, performance under, or otherwise with respect to, this
Agreement or any other Loan Document (herein referred to as "Other Taxes").
(c) Each Loan Party shall indemnify each Bank and each Agent for and
hold them harmless against the full amount of Taxes and Other Taxes, and for
the full amount of taxes of any kind imposed by any jurisdiction on amounts
payable under this Section 2.08, imposed on or paid by such Bank or such
Agent (as the case may be) and any liability (including penalties,
additions to tax, interest and expenses) arising therefrom or with respect
thereto. This indemnification payment shall be made within 30 days from the
date such Bank or such Agent (as the case may be) makes written demand
therefor.
(d) Within 30 days after the date of any payment of Taxes, each Loan
Party shall furnish to the Administrative Agent, at its address referred to in
Section 9.02, the original or a certified copy of a receipt evidencing such
payment. In the case of any payment hereunder by or on behalf of a Loan
27
Party through an account or branch outside the United States or by or on
behalf of a Loan Party by a payor that is not a United States person, if
such Loan Party determines that no Taxes are payable in respect thereof,
such Loan Party shall furnish, or shall cause such payor to furnish, to the
Administrative Agent, at such address, an opinion of counsel acceptable to
the Administrative Agent stating that such payment is exempt from Taxes.
For purposes of subsections (d) and (e) of this Section 2.08, the terms
"United States" and "United States person" shall have the meanings
specified in Section 7701(a)(9) and 7701(a)(10) of the Internal Revenue
Code, respectively.
(e) Each Bank organized under the laws of a jurisdiction outside the
United States shall, on or prior to the date of its execution and delivery of
this Agreement in the case of each Initial Bank or the Issuing Bank, as the case
may be, and on the date of the Assignment and Acceptance pursuant to which
it becomes a Bank in the case of each other Bank, and from time to time
thereafter as requested in writing by the Parent (but only so long
thereafter as such Bank remains lawfully able to do so), provide each of
the Administrative Agent and the Parent with two original Internal Revenue
Service forms W-8BEN or W-8ECI or (in the case of a Bank that has certified
in writing to the Administrative Agent that it is not a "bank" as defined
in Section 881(c)(3)(A) of the Internal Revenue Code) form W-8 (and, if
such Bank delivers a form W-8, a certificate representing that such Bank is
not a "bank" for purposes of Section 881(c)(3)(A) of the Internal Revenue
Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Internal Revenue Code) of the Parent and is not a
controlled foreign corporation related to the Parent (within the meaning of
Section 864(d)(4) of the Internal Revenue Code)), as appropriate, or any
successor or other form prescribed by the Internal Revenue Service,
certifying that such Bank is exempt from or entitled to a reduced rate of
United States withholding tax on payments pursuant to this Agreement or, in
the case of a Bank providing a form W-8, certifying that such Bank is a
foreign corporation, partnership, estate or trust. If the forms provided by
a Bank at the time such Bank first becomes a party to this Agreement
indicate a United States interest withholding tax rate in excess of zero,
withholding tax at such rate shall be considered excluded from Taxes unless
and until such Bank provides the appropriate forms certifying that a lesser
rate applies, whereupon withholding tax at such lesser rate only shall be
considered excluded from Taxes for periods governed by such forms;
provided, however, that if, at the effective date of the Assignment and
Acceptance pursuant to which a Bank becomes a party to this Agreement, the
Bank assignor was entitled to payments under subsection (a) of this Section
2.08 in respect of United States withholding tax with respect to interest
paid at such date, then, to such extent, the term Taxes shall include (in
addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if
any, applicable with respect to the Bank assignee on such date. If any form
or document referred to in this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable
and information required on the date hereof by Internal Revenue Service
form X-0XXX, X-0XXX or W-8 (and the related certificate described above),
that the Bank reasonably considers to be confidential, the Bank shall give
notice thereof to the Parent and shall not be obligated to include in such
form or document such confidential information.
(f) For any period with respect to which a Bank which may lawfully do
so has failed to provide the Parent with the appropriate form described in
subsection (e) above (other than if such failure is due to a change in law
occurring after the date on which a form originally was required to be
28
provided or if such form otherwise is not required under subsection (e)
above), such Bank shall not be entitled to indemnification under subsection
(a) or (c) of this Section 2.08 with respect to Taxes imposed by the United
States by reason of such failure; provided, however, that should a Bank
become subject to Taxes because of its failure to deliver a form required
hereunder, the Parent shall take such steps as such Bank shall reasonably
request to assist such Bank to recover such Taxes.
(g) Each Bank represents and warrants to the Account Parties that, as
of the date such Bank becomes a party to this Agreement, such Bank is entitled
to receive payments hereunder from the Account Parties without deduction or
withholding for or on account of any Taxes.
SECTION 2.09 Sharing of Payments, Etc. If any Bank shall obtain at any
time any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise, other than as a result of an assignment
pursuant to Section 9.07) (a) on account of obligations due and payable to
such Bank hereunder at such time in excess of its ratable share (according
to the proportion of (i) the amount of such obligations due and payable to
such Bank at such time to (ii) the aggregate amount of the obligations due
and payable to all Banks hereunder at such time) of payments on account of
the obligations due and payable to all Banks hereunder at such time
obtained by all the Banks at such time or (b) on account of obligations
owing (but not due and payable) to such Bank hereunder at such time in
excess of its ratable share (according to the proportion of (i) the amount
of such obligations owing to such Bank at such time to (ii) the aggregate
amount of the obligations owing (but not due and payable) to all Banks
hereunder at such time) of payments on account of the obligations owing
(but not due and payable) to all Banks hereunder at such time obtained by
all of the Banks at such time, such Bank shall forthwith purchase from the
other Banks such interests or participating interests in the obligations
due and payable or owing to them, as the case may be, as shall be necessary
to cause such purchasing Bank to share the excess payment ratably with each
of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Bank, such purchase
from each other Bank shall be rescinded and such other Bank shall repay to
the purchasing Bank the purchase price to the extent of such Bank's ratable
share (according to the proportion of (i) the purchase price paid to such
Bank to (ii) the aggregate purchase price paid to all Banks) of such
recovery together with an amount equal to such Bank's ratable share
(according to the proportion of (i) the amount of such other Bank's
required repayment to (ii) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. Each Account
Party agrees that any Bank so purchasing an interest or participating
interest from another Bank pursuant to this Section 2.09 may, to the
fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such interest or
participating interest, as the case may be, as fully as if such Bank were
the direct creditor of such Account Party in the amount of such interest or
participating interest, as the case may be.
SECTION 2.10 Use of Letters of Credit. The Letters of Credit shall be
used for the general corporate purposes of the Account Parties and their
respective Subsidiaries.
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SECTION 2.11 Defaulting Banks.
(a) In the event that, at any one time, (i) any Bank shall be a
Defaulting Bank, (ii) such Defaulting Bank shall owe a Defaulted Amount to any
Agent or any of the other Banks and (iii) any Account Party shall make any
payment hereunder or under any other Loan Document to the Administrative
Agent for the account of such Defaulting Bank, then the Administrative
Agent may, on its behalf or on behalf of such other Banks and to the
fullest extent permitted by applicable law, apply at such time the amount
so paid by such Account Party to or for the account of such Defaulting Bank
to the payment of each such Defaulted Amount to the extent required to pay
such Defaulted Amount. In the event that the Administrative Agent shall so
apply any such amount to the payment of any such Defaulted Amount on any
date, the amount so applied by the Administrative Agent shall constitute
for all purposes of this Agreement and the other Loan Documents payment, to
such extent, of such Defaulted Amount on such date. Any such amount so
applied by the Administrative Agent shall be retained by the Administrative
Agent or distributed by the Administrative Agent to such other Banks,
ratably in accordance with the respective portions of such Defaulted
Amounts payable at such time to the Administrative Agent and such other
Banks and, if the amount of such payment made by such Account Party shall
at such time be insufficient to pay all Defaulted Amounts owing at such
time to the Administrative Agent, such other Agents and such other Banks,
in the following order of priority:
(i) first, to the Agents for any Defaulted Amounts then owing
to the Agents;
(ii) second, to the Issuing Bank for any amount then due and
payable to it, in its capacity as such, by such Defaulting Bank,
ratably in accordance with such amounts then due and payable to the
Issuing Bank; and
(iii) third, to any other Banks for any Defaulted Amounts then
owing to such other Banks, ratably in accordance with such respective
Defaulted Amounts then owing to such other Banks.
Any portion of such amount paid by such Account Party for the account of
such Defaulting Bank remaining, after giving effect to the amount applied
by the Administrative Agent pursuant to this subsection (a), shall be
applied by the Administrative Agent as specified in subsection (b) of this
Section 2.11.
(b) In the event that, at any one time, (i) any Bank shall be a
Defaulting Bank, (ii) such Defaulting Bank shall not owe a Defaulted Amount
and (iii) any Account Party, any Agent or other Bank shall be required to
pay or distribute any amount hereunder or under any other Loan Document to
or for the account of such Defaulting Bank, then such Account Party or such
Agent or such other Bank shall pay such amount to the Administrative Agent
to be held by the Administrative Agent, to the fullest extent permitted by
applicable law, in escrow and the Administrative Agent shall, to the
fullest extent permitted by applicable law, hold in escrow such amount
otherwise held by it. Any funds held by the Administrative Agent in escrow
30
under this subsection (b) shall be deposited by the Administrative Agent in
an account with Wachovia in the name and under the control of the
Administrative Agent, but subject to the provisions of this subsection (b).
The terms applicable to such account, including the rate of interest
payable with respect to the credit balance of such account from time to
time, shall be Wachovia's standard terms applicable to escrow accounts
maintained with it. Any interest credited to such account from time to time
shall be held by the Administrative Agent in escrow under, and applied by
the Administrative Agent from time to time in accordance with the
provisions of, this subsection (b). The Administrative Agent shall, to the
fullest extent permitted by applicable law, apply all funds so held in
escrow from time to time to the extent necessary to make any Advances
required to be made by such Defaulting Bank and to pay any amount payable
by such Defaulting Bank hereunder and under the other Loan Documents to the
Administrative Agent or any other Bank, as and when such Advances or
amounts are required to be made or paid and, if the amount so held in
escrow shall at any time be insufficient to make and pay all such Advances
and amounts required to be made or paid at such time, in the following
order of priority:
(i) first, to the Agents for any amounts then due and payable
by such Defaulting Bank to the Agents hereunder;
(ii) second, to the Issuing Bank for any amount then due and
payable to it, in its capacity as such, by such Defaulting Bank,
ratably in accordance with such amounts then due and payable to such
Issuing Bank; and
(iii) third, to any other Banks for any amount then due and
payable by such Defaulting Bank to such other Banks hereunder, ratably
in accordance with such respective amounts then due and payable to
such other Banks.
In the event that any Bank that is a Defaulting Bank shall, at any time,
cease to be a Defaulting Bank, any funds held by the Administrative Agent
in escrow at such time with respect to such Bank shall be distributed by
the Administrative Agent to such Bank and applied by such Bank to the
obligations owing to such Bank at such time under this Agreement and the
other Loan Documents ratably in accordance with the respective amounts of
such obligations outstanding at such time.
(c) The rights and remedies against a Defaulting Bank under this Section
2.11 are in addition to other rights and remedies that any Agent or any
Bank may have against such Defaulting Bank with respect to any Defaulted
Amount.
SECTION 2.12 Replacement of Affected Bank. At any time any Bank is an
Affected Bank, the Account Parties may replace such Affected Bank as a
party to this Agreement with one or more other Banks and/or Eligible
Assignees, and upon notice from the Account Parties such Affected Bank
shall assign pursuant to an Assignment and Acceptance, and without recourse
or warranty, its LC Commitment Amount, its Letter of Credit Advances, its
obligations to fund Letter of Credit payments, its participation in, and
its rights and obligations with respect to, Letters of Credit, and all of
its other rights and obligations hereunder to such other Banks and/or
Eligible Assignees for a purchase price equal to the sum of the principal
amount of the Letter of Credit Advances so assigned, all accrued and unpaid
interest thereon, such Affected Bank's ratable share of all accrued and
unpaid fees payable pursuant to Section 2.05 and all other obligations owed
to such Affected Bank hereunder.
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SECTION 2.13 Certain Provisions Relating to the Issuing Bank and
Letters of Credit.
(a) Letter of Credit Agreements. The representations, warranties and
covenants by the Account Parties under, and the rights and remedies of the
Issuing Bank under, any Letter of Credit Agreement relating to any Letter
of Credit are in addition to, and not in limitation or derogation of,
representations, warranties and covenants by the Account Parties under, and
rights and remedies of the Issuing Bank and the Banks under, this Agreement
and applicable law. Each Account Party acknowledges and agrees that all
rights of the Issuing Bank under any Letter of Credit Agreement shall inure
to the benefit of each Bank to the extent of its Letter of Credit
Participating Interest Commitment and Letter of Credit Advances as fully as
if such Bank was a party to such Letter of Credit Agreement. In the event
of any inconsistency between the terms of this Agreement and any Letter of
Credit Agreement, this Agreement shall prevail.
(b) Certain Provisions. The Issuing Bank shall have no duties or
responsibilities to any Agent or any Bank except those expressly set forth
in this Agreement, and no implied duties or responsibilities on the part of
the Issuing Bank shall be read into this Agreement or shall otherwise
exist. The duties and responsibilities of the Issuing Bank to the Banks and
the Agents under this Agreement and the other Loan Documents shall be
mechanical and administrative in nature, and the Issuing Bank shall not
have a fiduciary relationship in respect of any Agent, any Bank or any
other Person. The Issuing Bank shall not be liable for any action taken or
omitted to be taken by it under or in connection with this Agreement or any
Loan Document or Letter of Credit, except to the extent resulting from the
gross negligence or willful misconduct of the Issuing Bank, as finally
determined by a court of competent jurisdiction. The Issuing Bank shall not
be under any obligation to ascertain, inquire or give any notice to any
Agent or any Bank relating to (i) the performance or observance of any of
the terms or conditions of this Agreement or any other Loan Document on the
part of any Account Party, (ii) the business, operations, condition
(financial or otherwise) or prospects of the Account Parties or any other
Person, or (iii) the existence of any Default. The Issuing Bank shall not
be under any obligation, either initially or on a continuing basis, to
provide any Agent or any Bank with any notices, reports or information of
any nature, whether in its possession presently or hereafter, except for
such notices, reports and other information expressly required by this
Agreement to be so furnished. The Issuing Bank shall not be responsible for
the execution, delivery, effectiveness, enforceability, genuineness,
validity or adequacy of this Agreement or any Loan Document.
(c) Administration. The Issuing Bank may rely upon any notice or other
communication of any nature (written, electronic or oral, including but not
limited to telephone conversations and transmissions through the Issuing
Bank's remote access system, whether or not such notice or other
communication is made in a manner permitted or required by this Agreement
or any other Loan Document) purportedly made by or on behalf of the proper
party or parties, and the Issuing Bank shall not have any duty to verify
the identity or authority of any Person giving such notice or other
communication. The Issuing Bank may consult with legal counsel (including,
without limitation, in-house counsel for the Issuing Bank or in-house or
other counsel for the Account Parties), independent public accountants and
any other experts selected by it from time to time, and the Issuing Bank
shall not be liable for any action taken or omitted to be taken in good
faith in accordance with the advice of such counsel, accountants or
experts. Whenever the Issuing Bank shall deem it necessary or desirable
that a matter be proved or established with respect to any Account Party,
32
any Agent or any Bank, such matter may be established by a certificate of
such Account Party, such Agent or such Bank, as the case may be, and the
Issuing Bank may conclusively rely upon such certificate. The Issuing Bank
shall not be deemed to have any knowledge or notice of the occurrence of
any Default unless the Issuing Bank has received notice from a Bank, an
Agent or an Account Party referring to this Agreement, describing such
Default, and stating that such notice is a "notice of default".
(d) Indemnification of Issuing Bank by Banks. Each Bank hereby agrees to
reimburse and indemnify the Issuing Bank and each of its directors,
officers, employees and agents (to the extent not reimbursed by the Account
Parties and without limitation of the obligations of the Account Parties to
do so), in accordance with its Pro Rata Share, from and against any and all
amounts, losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements of any kind or
nature (including, without limitation, the reasonable fees and
disbursements of counsel (other than in-house counsel) for the Issuing Bank
or such other Person in connection with any investigative, administrative
or judicial proceeding commenced or threatened, whether or not the Issuing
Bank or such other Person shall be designated a party thereto) that may at
any time be imposed on, incurred by or asserted against the Issuing Bank,
in its capacity as such, or such other Person, as a result of, or arising
out of, or in any way related to or by reason of, this Agreement, any other
Loan Document or any Letter of Credit, any transaction from time to time
contemplated hereby or thereby, or any transaction financed in whole or in
part or directly or indirectly with the proceeds of any Letter of Credit,
provided, that no Bank shall be liable for any portion of such amounts,
losses, liabilities, claims, damages, expenses, obligations, penalties,
actions, judgments, suits, costs or disbursements to the extent resulting
from the gross negligence or willful misconduct of the Issuing Bank or such
other Person, as finally determined by a court of competent jurisdiction.
(e) Issuing Bank in its Individual Capacity. With respect to its
commitments and the obligations owing to it, the Issuing Bank shall have
the same rights and powers under this Agreement and each other Loan
Document as any other Bank and may exercise the same as though it were not
the Issuing Bank, and the term "Banks" and like terms shall include the
Issuing Bank in its individual capacity as such. The Issuing Bank and its
affiliates may, without liability to account to any Person, make loans to,
accept deposits from, acquire debt or equity interests in, act as trustee
under indentures of, act as agent under other credit facilities for, and
engage in any other business with, any Account Party and any stockholder,
subsidiary or affiliate of any Account Party, as though the Issuing Bank
were not the Issuing Bank hereunder.
SECTION 2.14 Downgrade Event with Respect to a Bank.
(a) If a Downgrade Event shall occur with respect to (i) any
Downgraded Bank or (ii) any other Bank and, as a result thereof, such
other Bank becomes a Downgraded Bank, then the Issuing Bank may, by notice
to such Downgraded Bank, the Administrative Agent and the Parent within 45
days after such Downgrade Event (any such notice, a "Downgrade Notice"),
request that the Account Parties use reasonable efforts to replace such
Bank as a party to this Agreement pursuant to Section 2.12. If such Bank is
not so replaced within 45 days after receipt by the Account Parties of such
Downgrade Notice, then (x) if no Default exists and such Downgraded Bank
has not exercised its right to remain a Bank hereunder pursuant to clause
(y) below, the following shall occur concurrently:
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(A) the Committed Facility shall be reduced by the
amount of the LC Commitment Amount of such Downgraded Bank,
(B) the Account Parties shall prepay all amounts owed
to such Downgraded Bank hereunder or in connection herewith
(C) if, upon the reduction of the Committed Facility
under clause (A) above and the payment under clause (B)
above, the sum of the principal amount of all Advances plus
the Available Amount of all Letters of Credit (valuing the
Available Amount of, and Letter of Credit Advances of the
Issuing Bank in respect of, any Non-Dollar Letter of
Credit at the Dollar Equivalent thereof as of the time of
such calculation) would exceed the amount of the
Committed Facility, then the Account Parties will
immediately eliminate such excess by paying Advances
and/or causing the Available Amount of one or more
Letters of Credit to be reduced, and
(D) upon completion of the events described in clauses
(A), (B) and (C) above, such Downgraded Bank shall cease to be
a party to this Agreement;
or (y) if a Default exists or, not later than 30 days after receipt of such
Downgrade Notice, such Downgraded Bank notifies the Account Parties, the
Issuing Bank and the Administrative Agent that such Downgraded Bank elects
to provide (in a manner reasonably satisfactory to the Issuing Bank) cash
collateral to the Issuing Bank for (or if such Downgraded Bank is unable,
without regulatory approval, to provide cash collateral, a letter of credit
reasonably satisfactory to the Issuing Bank covering) its contingent
obligations to reimburse the Issuing Bank for any payment under any Letter
of Credit as provided in Section 2.02(e) (its "LC Participation
Obligations"), such Downgraded Bank shall be obligated to (and each Bank
agrees that in such circumstances it will) deliver to the Issuing Bank (I)
immediately, cash collateral (or, as aforesaid, a letter of credit) in an
amount equal to its LC Participation Obligations and (II) from time to time
thereafter (so long as it is a Downgraded Bank), cash collateral (or, as
aforesaid, a letter of credit) sufficient to cover any increase in its LC
Participation Obligations as a result of any proposed issuance of or
increase in a Letter of Credit. Any funds provided by a Downgraded Bank for
such purpose shall be maintained in a segregated deposit account in the
name of the Issuing Bank at the Issuing Bank's principal office in the
United States (a "Downgrade Account"). The funds so deposited in any
Downgrade Account (or any drawing under such a letter of credit) shall be
used only in accordance with the following provisions of this Section 2.14.
(b) If any Downgraded Bank shall be required to fund its participation
in a payment under a Letter of Credit pursuant to Section 2.02(e), then the
Issuing Bank shall apply the funds deposited in the applicable Downgrade
Account by such Downgraded Bank (or any drawing under such a letter of
credit) to fund such participation. The deposit of funds in a Downgrade
Account by any Downgraded Bank (or any drawing under such a letter of
credit) shall not constitute a Letter of Credit Advance (and the Downgraded
Bank shall not be entitled to interest on such funds except as provided in
clause (c) below) unless and until (and then only to the extent that) such
34
funds (or any drawing under such a letter of credit) are used by the
Issuing Bank to fund the participation of such Downgraded Bank pursuant to
the first sentence of this clause (b).
(c) Funds in a Downgrade Account shall be invested in such investments
as may be agreed between the Issuing Bank and the applicable Downgraded Bank,
and the income from such investments shall be distributed to such
Downgraded Bank from time to time (but not less often than monthly) as
agreed between the Issuing Bank and such Downgraded Bank. The Issuing Bank
will (i) from time to time, upon request by a Downgraded Bank, release to
such Downgraded Bank any amount on deposit in the applicable Downgrade
Account in excess of the LC Participation Obligations of such Downgraded
Bank (or, if applicable, not draw under any such letter of credit in excess
of the L/C Participation Obligations of such Downgraded Bank) and (ii) upon
the earliest to occur of (A) the effective date of any replacement of such
Downgraded Bank as a party hereto pursuant to an Assignment and Acceptance,
(B) the termination of such Downgraded Bank's LC Commitment Amount pursuant
to clause (a) or (C) the first Letter of Credit Business Day after receipt
by the Issuing Bank of evidence (reasonably satisfactory to the Issuing
Bank) that such Bank is no longer a Downgraded Bank, release to such Bank
all amounts on deposit in the applicable Downgrade Account (or, if
applicable, return such letter of credit to such Bank for cancellation).
(d) At any time any Downgraded Bank is required to maintain cash
collateral with the Issuing Bank pursuant to this Section 2.14, the Issuing
Bank shall have no obligation to issue or increase any Letter of Credit unless
such Downgraded Bank has provided sufficient funds as cash collateral to the
Issuing Bank to cover all LC Participation Obligations of such Downgraded
Bank (including in respect of the Letter of Credit to be issued or
increased).
SECTION 2.15 Downgrade Event or Other Event with Respect to the Issuing
Bank. At any time that the Issuing Bank is a Downgraded Bank or at such
other times as the Issuing Bank and the Account Parties may agree, the
Account Parties may, upon not less than three Letter of Credit Business
Days' notice to the Issuing Bank (in this Section sometimes referred to as
the "Old Issuing Bank") and the Administrative Agent, designate any Bank
(so long as such Bank has agreed to such designation) as an additional
"Issuing Bank" hereunder (in this Section sometimes referred to as the "New
Issuing Bank"). Such notice shall specify the date (which shall be a Letter
of Credit Business Day) on which the New Issuing Bank is to become an
additional "Issuing Bank" hereunder. From and after such date, all new
Letters of Credit requested to be issued hereunder shall be issued by the
New Issuing Bank. From and after such date (and until the first date on
which no Letters of Credit issued by the Old Issuing Bank are outstanding
and no reimbursement obligations are owed to the Old Issuing Bank, on which
date the Old Issuing Bank shall cease to be an Issuing Bank hereunder),
references in this Agreement to the "Issuing Bank" shall be deemed to refer
(a) to the Old Issuing Bank, with respect to Letters of Credit issued by
it, (b) to the New Issuing Bank, with respect to Letters of Credit issued
or to be issued by it, and (c) to each of the Old Issuing Bank and the New
Issuing Bank, with respect to other matters. Notwithstanding the fact that
an Old Issuing Bank shall cease to be an "Issuing Bank" hereunder, all of
the exculpatory, indemnification and similar provisions hereof in favor of
the "Issuing Bank" shall inure to such Old Issuing Bank's benefit as to any
actions taken or omitted by it while it was an "Issuing Bank" under this
Agreement. The Account Parties agree that after any appointment of a New
Issuing Bank hereunder, the Account Parties shall use reasonable commercial
efforts to promptly replace (or otherwise cause the applicable beneficiary
35
to return to the Old Issuing Bank for cancellation) each letter of credit
issued by the Old Issuing Bank with a new Letter of Credit issued by the
New Issuing Bank.
SECTION 2.16 Non-Dollar Letters of Credit.
(a) The Account Parties, the Administrative Agent, the Issuing Bank and
the Banks (i) agree that the Issuing Bank may (in its sole discretion) issue
Letters of Credit ("Non-Dollar Letters of Credit") in currencies other than
U.S. dollars and (ii) further agree as set forth in the following
paragraphs of this Section with respect to such Non-Dollar Letters of
Credit.
(b) The Account Parties agree that their reimbursement obligations
under Section 2.03(a) and any resulting Letter of Credit Advance, in each case
in respect of a drawing under any Non-Dollar Letter of Credit, (i) shall be
payable in Dollars at the Dollar Equivalent of such obligation in the
currency in which such Non-Dollar Letter of Credit was issued (determined
on the date of payment by the Account Parties or, in the event of payment
by the Banks pursuant to Section 2.02(e), on the date of such payment by
the Banks), and (ii) shall bear interest at a rate per annum equal to the
Base Rate plus 2%, for each day from and including the date on which the
Applicable Account Party is to reimburse the Issuing Bank pursuant to
Section 2.03(a) to but excluding the date such obligation is paid in full.
(c) Each Bank agrees that its obligation to pay the Issuing Bank such
Bank's Pro Rata Share of the unreimbursed portion of any payment by the
Issuing Bank under Section 2.02(e) in respect of a drawing under any
Non-Dollar Letter of Credit shall be payable in Dollars at the Dollar
Equivalent of such obligation in the currency in which such Non-Dollar
Letter of Credit was issued (calculated on the date of payment), and any
such amount which is not paid when due shall bear interest at a rate per
annum equal to the Overnight Rate plus, beginning on the third Business Day
after such amount was due, 2%.
(d) For purposes of determining whether there is availability for the
Account Parties to request any Advance or to request the issuance or
extension of, or any increase in, any Letter of Credit, the Dollar
Equivalent amount of the Available Amount of each Non-Dollar Letter of
Credit shall be calculated as of the date such Advance is to be made or
such Letter of Credit is to be issued, extended or increased.
(e) For purposes of determining the letter of credit fee under Section
2.05(c), the Dollar Equivalent amount of the Available Amount of any
Non-Dollar Letter of Credit shall be determined on each of (1) the date of
an issuance, extension or change in the Available Amount of such Non-Dollar
Letter of Credit, (2) the date of any payment by the Issuing Bank in
respect of a drawing under such Non-Dollar Letter of Credit, (3) the last
Business Day of each March, June, September and December and (4) each day
on which the LC Commitment Amounts are to be reduced pursuant to Section
2.04 (it being understood that no requested reduction shall be permitted to
the extent that, after making a calculation pursuant to this clause (e),
such reduction would be greater than the unused portion of the LC
Commitment Amounts).
(f) If, on the last Business Day of each March, June, September and
December, the sum of the principal amount of all Advances plus the
Available Amount of all Letters of Credit (valuing the Available Amount of,
and Letter of Credit Advances in respect of, any Non-Dollar Letter of
36
Credit at the Dollar Equivalent thereof as of such day) would exceed the
amount of the Committed Facility, then the Account Parties will immediately
eliminate such excess by paying Advances and/or causing the Available
Amount of one or more Letters of Credit to be reduced.
(g) If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due in respect of any Non-Dollar Letter of
Credit in one currency into another currency, the rate of exchange used
shall be that at which in accordance with its normal banking procedures the
Issuing Bank could purchase the first currency with such other currency on
the Letter of Credit Business Day preceding that on which final judgment is
given. The obligation of any Account Party in respect of any such sum due
from it to the Issuing Bank or any Bank hereunder shall, notwithstanding
any judgment in a currency (the "Judgment Currency") other than that in
which such sum is denominated in accordance with the applicable provisions
of this Agreement and the applicable Non-Dollar Letter of Credit (the
"Agreement Currency"), be discharged only to the extent that on the Letter
of Credit Business Day following receipt by the Issuing Bank or such Bank
of any sum adjudged to be so due in the Judgment Currency, the Issuing Bank
or such Bank may in accordance with normal banking procedures purchase the
Agreement Currency with the Judgment Currency. If the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Issuing Bank or such Bank in the Agreement Currency, the Applicable Account
Party agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify the Issuing Bank or such Bank, as applicable,
against such loss. If the amount of the Agreement Currency so purchased is
greater than the sum originally due to the Issuing Bank or such Bank in
such currency, the Issuing Bank and each Bank agrees to return the amount
of any excess to the Applicable Account Party (or to any other Person who
may be entitled thereto under applicable law).
(h) For purposes of this Section, "Dollar Equivalent" means, in
relation to an amount denominated in a currency other than U.S. dollars, the
amount of U.S. dollars which could be purchased with such amount by the Issuing
Bank in accordance with its customary procedures (and giving effect to any
transaction costs) at the quoted foreign exchange spot rate of the Issuing
Bank at the time of determination; and "Overnight Rate" means, for any day,
the rate of interest per annum at which overnight deposits in the
applicable currency, in an amount approximately equal to the amount with
respect to which such rate is being determined, would be offered for such
day by the Issuing Bank to major banks in the London or other applicable
offshore interbank market. The Overnight Rate for any day which is not a
Letter of Credit Business Day (or on which dealings are not carried on in
the applicable offshore interbank market) shall be the Overnight Rate for
the immediately preceding Letter of Credit Business Day.
ARTICLE III
CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01 Conditions Precedent to Effective Date. The occurrence of
the Effective Date, and the obligation of the Issuing Bank to issue any Letter
of Credit on the Effective Date, is subject to the satisfaction of the
following conditions precedent:
37
(i) The Administrative Agent shall have received the following,
each dated the Effective Date (unless otherwise specified), in form and
substance reasonably satisfactory to the Administrative Agent
(unless otherwise specified) and in sufficient copies for each
Bank:
(A) Certified copies of the resolutions of the Board
of Directors of each Loan Party approving the transactions contemplated
by the Loan Documents and each Loan Document to which it is or is to
be a party, and of all documents evidencing other necessary corporate
action and governmental and other third party approvals and
consents, if any, with transactions contemplated by the Loan
Documents and each Loan Document to which it is or is to be a
party.
(B) A copy of a certificate of the Secretary of State
or other appropriate official of the jurisdiction of incorporation of
each Loan Party, dated reasonably near the Effective Date, certifying
as to the good standing (or existence) of such Loan Party.
(C) A certificate of each Loan Party, signed on behalf
of such Loan Party by its President or a Vice President (or equivalent
officer if such Loan Party has no Vice President) and its Secretary or
any Assistant Secretary (the statements made in which certificate
shall be true on and as of the Effective Date), certifying as to (1) a
true and correct copy of the constitutional documents of such Loan
Party as in effect on the date on which the resolutions referred to in
Section 3.01(a)(i)(A) were adopted and on the Effective Date, (2) the
due incorporation and good standing or valid existence of such Loan
Party as a corporation organized under the laws of the jurisdiction of
its incorporation, and the absence of any proceeding for the
dissolution or liquidation of such Loan Party, (3) the truth of the
representations and warranties contained in the Loan Documents as
though made on and as of the Effective Date and (4) the absence of any
event occurring and continuing, or resulting from the Effective Date,
that constitutes a Default.
(D) A certificate of the Secretary or an Assistant
Secretary of each Loan Party certifying the names and true signatures
of the officers of such Loan Party authorized to sign each Loan
Document to which it is or is to be a party and the other documents to
be delivered hereunder and thereunder.
(E) A favorable opinion of (1) Xxxxxx and Xxxxxx,
Cayman Islands counsel for the Parent, in substantially the form of
Exhibit C-1 hereto and as to such other matters as any Bank through the
Administrative Agent may reasonably request, (2) Mayer, Brown,
Xxxx & Maw, New York counsel for the Loan Parties, in
substantially the form of Exhibit C-2 hereto and as to such other
matters as any Bank through the Administrative Agent may
reasonably request, and (3) Xxxxxxx Xxxx & Xxxxxxx, Bermuda
counsel for ACE Bermuda and Tempest, in substantially the form of
Exhibit C-3 hereto and as to such other matters as any Bank
through the Administrative Agent may reasonably request.
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(ii) There shall exist no action, suit, investigation,
litigation or proceeding affecting any Loan Party or any of its
Subsidiaries pending or threatened before any court, governmental
agency or arbitrator that (x) could be reasonably expected to have a
Material Adverse Effect or (y) would reasonably be expected to
materially adversely affect the legality, validity or
enforceability of any Loan Document or the other transactions
contemplated by the Loan Documents.
(iii) No development or change shall have occurred after
December 31, 2001, and no information shall have become known after
such date, that has had or could reasonably be expected to have a
Material Adverse Effect.
(iv) The Account Parties shall have paid all accrued fees of
the Administrative Agent and the Banks and all accrued expenses of the
Administrative Agent (including the accrued fees and expenses of
counsel to the Administrative Agent and local counsel on behalf of
all of the Banks), in each case to the extent then due and
payable.
(v) The Administrative Agent shall have received evidence
satisfactory to it that all obligations of any Account Party
outstanding under the Existing Reimbursement Agreement (other than fees
and expenses of Wachovia's counsel) have been repaid and satisfied in
full and that, concurrently with the effectiveness of this Agreement,
the LC Commitment Amounts (as defined therein) under the Existing
Reimbursement Agreement have been reduced to zero; Mellon shall have
agreed, by its execution and delivery of this Agreement, that the
Existing Mellon Letter of Credit shall become a Letter of Credit
hereunder as of the Effective Date; and Wachovia shall have agreed, by
its execution and delivery of this Agreement, that the Existing
Wachovia Letters of Credit issued under the Existing Reimbursement
Agreement shall become Letters of Credit hereunder as of the Effective
Date.
SECTION 3.02 Conditions Precedent to Each Issuance, Extension or
Increase of a Letter of Credit. The obligation of the Issuing Bank to issue,
extend or increase a Letter of Credit (including any issuance on the Effective
Date) shall be subject to the further conditions precedent that on the date
of such issuance, extension or increase (a) the following statements shall
be true (and each request for issuance, extension, or increase, and the
acceptance by the Account Party that requested such issuance, extension or
increase shall constitute a representation and warranty by such Account
Party that both on the date of such notice and on the date of such
issuance, extension or increase such statements are true):
(i) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of such date,
before and after giving effect to such issuance, extension or
increase, as though made on and as of such date, other than any
such representations or warranties that, by their terms, refer to
a specific date other the date of such issuance, extension or
increase, in which case as of such specific date (provided,
however, that the representation and warranty contained in the
last sentence of Section 4.01(g) shall be excluded from this
clause (i) at all times after (but shall be included on and as of)
the Effective Date); and
39
(ii) no Default has occurred and is continuing, or would result
from such issuance, extension or increase;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Bank or the Issuing Bank through the
Administrative Agent may reasonably request.
SECTION 3.03 Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each Bank
shall be deemed to have consented to, approved or accepted or to be satisfied
with each document or other matter required thereunder to be consented to
or approved by or acceptable or satisfactory to the Banks unless an officer
of the Administrative Agent responsible for the transactions contemplated
by the Loan Documents shall have received notice from such Bank prior to
the Effective Date specifying its objection thereto, provided that such
Bank has been given at least one Business Day's notice that the final form
of such document or matter is available for its review.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of the Account Parties.
Each Account Party represents and warrants as follows:
(a) Each Loan Party and each of its Subsidiaries (i) is duly organized
or formed, validly existing and, to the extent such concept applies,
in good standing under the laws of the jurisdiction of its incorporation or
formation, (ii) is duly qualified and in good standing as a foreign
corporation or other entity in each other jurisdiction in which it owns or
leases property or in which the conduct of its business requires it to so
qualify or be licensed except where the failure to so qualify or be
licensed would not be reasonably likely to have a Material Adverse Effect
and (iii) has all requisite power and authority (including, without
limitation, all governmental licenses, permits and other approvals) to own
or lease and operate its properties and to carry on its business as now
conducted and as proposed to be conducted, except where the failure to have
any license, permit or other approval would not be reasonably likely to
have a Material Adverse Effect. All of the outstanding Equity Interests in
each Account Party (other than the Parent) have been validly issued, are
fully paid and non-assessable and (except for any Preferred Securities
issued after the date of this Agreement) are owned, directly or indirectly,
by the Parent free and clear of all Liens.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all Subsidiaries of each Loan Party as of the Effective Date.
(c) The execution, delivery and performance by each Loan Party of each
Loan Document to which it is or is to be a party and the consummation of the
transactions contemplated by the Loan Documents, are within such Loan Party's
corporate powers, have been duly authorized by all necessary corporate action,
and do not (i) contravene such Loan Party's constitutional documents, (ii)
violate any law, rule, regulation
40
(including, without limitation, Regulation X of the Board of Governors of
the Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of, or
constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting
any Loan Party, any of its Subsidiaries or any of their properties or (iv)
except for the Liens created under the Loan Documents, result in or require
the creation or imposition of any Lien upon or with respect to any of the
properties of any Loan Party or any of its Subsidiaries. No Loan Party or
any of its Subsidiaries is in violation of any such law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award or in
breach of any such contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument, the violation or breach of which could be
reasonably likely to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any
other third party is required for (i) the due execution, delivery,
recordation, filing or performance by any Loan Party of any Loan Document
to which it is or is to be a party or the other transactions contemplated
by the Loan Documents, or (ii) the exercise by the Administrative Agent or
any Bank of its rights under the Loan Documents, except for the
authorizations, approvals, actions, notices and filings which have been
duly obtained, taken, given or made and are in full force and effect.
(e) This Agreement has been, and each other Loan Document when
delivered hereunder will have been, duly executed and delivered by
each Loan Party party thereto. This Agreement is, and each other Loan
Document when delivered hereunder will be, the legal, valid and binding
obligation of each Loan Party party thereto, enforceable against such Loan
Party in accordance with its terms.
(f) There is no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of its Subsidiaries, including any
Environmental Action, pending or threatened before any court, governmental
agency or arbitrator that (i) could be reasonably likely to have a Material
Adverse Effect or (ii) would reasonably be expected to affect the legality,
validity or enforceability of any Loan Document or the transactions
contemplated by the Loan Documents.
(g) The Consolidated balance sheets of the Parent and its Subsidiaries
as at December 31, 2001, and the related Consolidated statements of income
and of cash flows of the Parent and its Subsidiaries for the fiscal year
then ended, accompanied by an unqualified opinion of PricewaterhouseCoopers
LLP, independent public accountants, and the Consolidated balance sheets of
the Parent and its Subsidiaries as at June 30, 2002, and the related
Consolidated statements of income and cash flows of the Parent and its
Subsidiaries for the six months then ended, duly certified by the Chief
Financial Officer of the Parent, copies of which have been furnished to
each Bank, fairly present, subject, in the case of said balance sheet as at
June 30, 2002, and said statements of income and cash flows for the six
months then ended, to year-end audit adjustments, the Consolidated
financial condition of the Parent and its Subsidiaries as at such dates and
the Consolidated results of operations of the Parent and its Subsidiaries
for the periods ended on such dates, all in accordance with generally
accepted accounting principles applied on a consistent basis (subject, in
the case of the June 30, 2002 balance sheet and statements, to the absence
of footnotes). Since December 31, 2001, there has been no Material Adverse
Change.
41
(h) [Reserved.]
(i) No written information, exhibit or report furnished by or on
behalf of any Loan Party to any Agent or any Bank in connection
with the negotiation and syndication of the Loan Documents or pursuant
to the terms of the Loan Documents contained any untrue statement of a
material fact or omitted to state a material fact necessary to make
the statements made therein not misleading as at the date it was dated
(or if not dated, so delivered).
(j) Margin Stock will constitute less than 25% of the value of those
assets of any Account Party which are subject to any limitation on sale, pledge
or other disposition hereunder.
(k) Neither any Loan Party nor any of its Subsidiaries is an
"investment company", or an "affiliated person" of, or "promoter"
or "principal underwriter" for, an "investment company", as such terms
are defined in the Investment Company Act of 1940, as amended. Neither
the making of any Advances, nor the issuance of any Letters of Credit,
nor the application of the proceeds or repayment thereof by any
Account Party, nor the consummation of the other transactions
contemplated by the Loan Documents, will violate any provision of such
Act or any rule, regulation or order of the Securities and Exchange
Commission thereunder.
(l) Neither any Loan Party nor any of its Subsidiaries is a party to
any indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate restriction that is
reasonably likely to have a Material Adverse Effect.
(m) Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
(n) Except to the extent that any and all events and conditions under
clauses (i) through (vi) below of this paragraph (n) in the aggregate are not
reasonably expected to have a Material Adverse Effect:
(i) Schedule B (Actuarial Information) to the most recent
annual report (Form 5500 Series) for each Pension Plan, copies of which
have been filed with the Internal Revenue Service, is complete and
accurate and fairly presents the funding status of such Pension
Plan, and since the date of such Schedule B there has been no
material adverse change in such funding status.
(ii) Neither any Loan Party nor any ERISA Affiliate has incurred
or is reasonably expected to incur any Withdrawal Liability to any
Multiemployer Plan.
(iii) Neither any Loan Party nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the
meaning of Title IV of ERISA, and no such Multiemployer Plan is
reasonably expected to be in reorganization or to be terminated,
within the meaning of Title IV of ERISA.
(iv) With respect to each scheme or arrangement mandated by a
government other than the United States (a "Foreign Government
Scheme or Arrangement") and with respect to each employee benefit
42
plan that is not subject to United States law maintained or
contributed to by any Loan Party or with respect to which any
Subsidiary of any Loan Party may have liability under applicable
local law (a "Foreign Plan"):
(x) Any employer and employee contributions
required by law or by the terms of any Foreign Government
Scheme or Arrangement or any Foreign Plan have been made,
or, if applicable, accrued, in accordance with normal
accounting practices.
(y) The fair market value of the assets of each
funded Foreign Plan, the liability of each insurer for
any Foreign Plan funded through insurance or the book
reserve established for any Foreign Plan, together with
any accrued contributions, is sufficient to procure or
provide for the accrued benefit obligations, as of the
date hereof, with respect to all current and former
participants in such Foreign Plan according to the
actuarial assumptions and valuations most recently used
to account for such obligations in accordance with
applicable generally accepted accounting principles.
(z) Each Foreign Plan required to be registered
has been registered and has been maintained in good
standing with applicable regulatory authorities.
(v) To the extent the assets of any Loan Party are or are deemed
under applicable law to be "plan assets" within the meaning of
Department of Labor Regulation ss. 2510.3-101, the execution,
delivery and performance of the Loan Documents and the
consummation of the transactions contemplated therein will not
result in a non-exempt prohibited transaction within the meaning
of Section 406 of ERISA or Section 4975 of the Internal Revenue
Code.
(vi) During the twelve-consecutive-month period to the date of
the execution and delivery of this Agreement and prior to the request
for any Letter of Credit to be issued hereunder, no steps have
been taken to terminate any Pension Plan, no contribution failure
has occurred with respect to any Pension Plan sufficient to give
rise to a lien under section 302(f) of ERISA and no minimum
funding waiver has been applied for or is in effect with respect
to any Pension Plan. No condition exists or event or transaction
has occurred or is reasonably expected to occur with respect to
any Pension Plan which could result in any Loan Party or any ERISA
Affiliate incurring any material liability, fine or penalty.
(o) In the ordinary course of its business, each Account Party
reviews the effect of Environmental Laws on the operations and properties of
such Account Party and its Subsidiaries, in the course of which it identifies
and evaluates associated liabilities and costs (including, without limitation,
any capital or operating expenditures required for clean-up or closure of
properties presently or previously owned, any capital or operating
43
expenditures required to achieve or maintain compliance with environmental
protection standards imposed by law or as a condition of any license, permit
or contract, any related constraints on operating activities, including any
periodic or permanent shutdown of any facility or reduction in the level of or
change in the nature of operations conducted thereat, and any actual or
potential liabilities to third parties and any related costs and expenses). On
the basis of this review, each Account Party has reasonably concluded that
such associated liabilities and costs, including the costs of compliance with
Environmental Laws, are unlikely to have a Material Adverse Effect. The
operations and properties of each Loan Party and each of its Subsidiaries
comply in all material respects with all applicable Environmental Laws and
Environmental Permits, except for non-compliances which would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; Hazardous Materials have not been released, discharged or
disposed of on any property currently or formerly owned or operated by any
Loan Party or any of its Subsidiaries that would reasonably be expected to
have a Material Adverse Effect; and there are no Environmental Actions pending
or threatened against any Loan Party or its Subsidiaries, and no circumstances
exist that could be reasonably likely to form the basis of any such
Environmental Action, which (in either case), individually or in the aggregate
with all other such pending or threatened actions and circumstances, would
reasonably be expected to have a Material Adverse Effect.
(p) Each Loan Party and each of its Subsidiaries has filed, has
caused to be filed or has been included in all material federal tax returns
and all other material tax returns required to be filed and has paid all taxes
shown thereon to be due, together with applicable interest and penalties,
except to the extent contested in good faith and by appropriate proceedings
(in which case adequate reserves have been established therefor in accordance
with GAAP).
(q) Set forth on Schedule II hereto is a list of all letters of
credit that were issued (or deemed issued) under the Existing Reimbursement
Agreement and that are outstanding as of the Effective Date.
ARTICLE V
COVENANTS OF THE ACCOUNT PARTIES
SECTION 5.01 Affirmative Covenants. So long as any Advance or any other
obligation of any Loan Party under any Loan Document shall remain unpaid,
any Letter of Credit shall be outstanding or any Bank shall have any Letter
of Credit Participating Interest Commitment or commitment to issue a Letter
of Credit hereunder, each Account Party will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without limitation,
compliance with Environmental Laws, Environmental Permits, ERISA and the
Racketeer Influenced and Corrupt Organizations Chapter of the Organized
Crime Control Act of 1970.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent,
(i) all material taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful material claims
that, if unpaid, might by law become a Lien upon its property; provided,
however, that neither any Account Party nor any of its Subsidiaries shall
be required to pay or discharge any such tax, assessment, charge or claim
that is being contested in good faith and by proper proceedings and as to
which appropriate reserves are being maintained.
44
(c) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar
properties in the same general areas in which the Parent or such Subsidiary
operates (it being understood that the foregoing shall not apply to
maintenance of reinsurance or similar matters which shall be solely within
the reasonable business judgment of the Parent and its Subsidiaries).
(d) Preservation of Corporate Existence, Etc. Preserve and maintain, and
cause each of its Subsidiaries to preserve and maintain, its existence,
legal structure, legal name, rights (charter and statutory), permits,
licenses, approvals, privileges and franchises; provided, however, that the
Parent and its Subsidiaries may consummate any merger or consolidation
permitted under Section 5.02(c) and provided further that neither the
Parent nor any of its Subsidiaries shall be required to preserve any right,
permit, license, approval, privilege or franchise if the Board of Directors
of the Parent or such Subsidiary shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Parent
or such Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to the Parent, such Subsidiary or
the Banks.
(e) Visitation Rights. At any reasonable time and from time to time upon
prior notice, permit the Administrative Agent (upon request made by any
Agent or any Bank), or any agents or representatives thereof, at the
expense (so long as no Default has occurred and is continuing) of such
Agent or such Bank, as the case may be, to examine and make copies of and
abstracts from the records and books of account of, and visit the
properties of, the Parent and any of its Subsidiaries, and to discuss the
affairs, finances and accounts of the Parent and any of its Subsidiaries
with any of their officers or directors and with, so long as a
representative of the Parent is present, their independent certified public
accountants.
(f) Keeping of Books. Keep, and cause each of its Subsidiaries to keep,
proper books of record and account, in which full and correct entries shall
be made of all financial transactions and the assets and business of the
Parent and each such Subsidiary sufficient to permit the preparation of
financial statements in accordance with GAAP.
(g) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties that
are used or useful in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
(h) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates (other than any such
transactions between Loan Parties or wholly owned Subsidiaries of Loan
Parties) on terms that are fair and reasonable and no less favorable than
it would obtain in a comparable arm's-length transaction with a Person not
an Affiliate.
(i) Pari Passu Ranking. Ensure that at all times the claims of the
Banks, the Issuing Bank and the Agents against it under the Loan Documents will
rank at least pari passu with the claims of all its other unsecured and
45
unsubordinated creditors, except for claims which are preferred by any
bankruptcy, insolvency, liquidation or other similar laws of general
application or are mandatorily preferred by law applying to insurance
companies generally.
SECTION 5.02 Negative Covenants. So long as any Advance or any other
obligation of any Loan Party under any Loan Document shall remain unpaid,
any Letter of Credit shall be outstanding or any Bank shall have any Letter
of Credit Participating Interest Commitment or commitment to issue a Letter
of Credit hereunder, each of the Account Parties will not, at any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its properties of any
character (including, without limitation, accounts) whether now
owned or hereafter acquired, or assign or permit any of its
Subsidiaries to assign, any accounts or other right to receive
income, except:
(i) Permitted Liens;
(ii) Liens described on Schedule 5.02(a) hereto;
(iii) purchase money Liens upon or in real property or equipment
acquired or held by the Parent or any of its Subsidiaries in the
ordinary course of business to secure the purchase price of such
property or equipment or to secure Debt incurred solely for
the purpose of financing the acquisition, construction or improvement
of any such property or equipment to be subject to such Liens, or Liens
existing on any such property or equipment at the time of acquisition
or within 180 days following such acquisition (other than any such
Liens created in contemplation of such acquisition that do not secure
the purchase price), or extensions, renewals or replacements of any of
the foregoing for the same or a lesser amount; provided, however, that
no such Lien shall extend to or cover any property other than the
property or equipment being acquired, constructed or improved, and no
such extension, renewal or replacement shall extend to or cover any
property not theretofore subject to the Lien being extended, renewed
or replaced;
(iv) Liens arising in connection with Capitalized Leases;
provided that no such Lien shall extend to or cover any assets other
than the assets subject to such Capitalized Leases;
(v)(A) any Lien existing on any asset of any Person at the time
such Person becomes a Subsidiary and not created in contemplation of
such event, (B) any Lien on any asset of any Person existing at
the time such Person is merged or consolidated with or into the
Parent or any of it Subsidiaries in accordance with Section
5.02(c) and not created in contemplation of such event and (C) any
Lien existing on any asset prior to the acquisition thereof by the
Parent or any of its Subsidiaries and not created in contemplation
of such acquisition;
(vi) Liens securing obligations under credit default swap
transactions determined by reference to, or Contingent Obligations in
respect of, Debt issued by the Parent or one of its Subsidiaries; such
Debt not to exceed an aggregate principal amount of $550,000,000;
46
(vii) Liens arising in the ordinary course of its business
which (A) do not secure Debt and (B) do not in the aggregate materially
detract from the value of its assets or materially impair the use
thereof in the operation of its business;
(viii) Liens on cash and Approved Investments securing Hedge
Agreements arising in the ordinary course of business;
(ix) other Liens securing Debt or other obligations outstanding
in an aggregate principal or face amount not to exceed at any time 5%
of Consolidated Net Worth;
(x) Liens consisting of deposits made by the Parent or any
insurance Subsidiary with any insurance regulatory authority or other
statutory Liens or Liens or claims imposed or required by
applicable insurance law or regulation against the assets of the
Parent or any insurance Subsidiary, in each case in favor of
policyholders of the Parent or such insurance Subsidiary or an
insurance regulatory authority and in the ordinary course of the
Parent's or such insurance Subsidiary's business;
(xi) Liens on Investments and cash balances of the Parent or
any insurance Subsidiary (other than capital stock of any Subsidiary)
securing obligations of the Parent or any insurance Subsidiary in
respect of (i) letters of credit obtained in the ordinary course of
business 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;
(xii) the replacement, extension or renewal of any Lien
permitted by clause (iii) or (vi) above upon or in the same property
theretofore subject thereto or the replacement, extension or renewal
(without increase in the amount (other than in respect of fees,
expenses and premiums, if any) or change in any direct or contingent
obligor) of the Debt secured thereby;
(xiii) Liens securing obligations owed by any Loan Party to
any other Loan Party or owed by any Subsidiary of the Parent (other
than a Loan Party) to the Parent or any other Subsidiary;
(xiv) Liens incurred in the ordinary course of business in
favor of financial intermediaries and clearing agents pending
clearance of payments for investment or in the nature of set-off,
banker's lien or similar rights as to deposit accounts or other
funds;
(xv) judgment or judicial attachment Liens, provided that the
enforcement of such Liens is effectively stayed;
(xvi) Liens arising in connection with Securitization
Transactions; provided that the aggregate principal amount of the
investment or claim held at any time by all purchasers, assignees or
other transferees of (or of interests in) receivables and other
rights to payment in all Securitization Transactions (together with
the aggregate principal amount of any other obligations secured by
such Liens) shall not exceed U.S. $250,000,000;
47
(xvii) Liens arising in connection with certain equity
proceeds received on or about September 12, 2000 (plus interest
accrued thereon) placed in a segregated account in support of (or
pledged as collateral for) Parent's guaranty of the $412,372,000
principal amount of Auction Rate Reset Subordinated Notes Series A
issued by ACE INA to ACE RHINOS Trust on June 30, 1999;
(xviii) Liens on securities arising out of repurchase
agreements with a term of not more than three months entered into
with "Lenders" (as such term is defined in the Five Year Credit
Agreement) or their Affiliates or with securities dealers of
recognized standing; provided that the aggregate amount of all assets
of the Parent and its Subsidiaries subject to such agreements shall
not at any time exceed $800,000,000. For purposes of this clause
(xviii), "Five Year Credit Agreement" shall mean the Second Amended
and Restated Five Year Credit Agreement dated as of April 5, 2002
among the Parent, ACE Bermuda, Tempest, ACE INA Holdings Inc. and ACE
Guaranty Re Inc., as borrowers, various financial institutions, and
JPMorgan Chase Bank, as administrative agent, as amended, modified,
supplemented or restated from time to time; and
(xix) Liens securing up to an aggregate amount of $200,000,000
of obligations of Tempest, the Parent or any wholly owned Subsidiary,
arising out of catastrophe bond financing.
(b) Change in Nature of Business. Make any material change in the
nature of the business of the Parent and its Subsidiaries, taken as a whole,
as carried on at the date hereof.
(c) Mergers, Etc. Merge into or amalgamate or consolidate with any
Person or permit any Person to merge into it, or permit any of its
Subsidiaries to do so, except that:
(i) any Subsidiary of the Parent may merge into or amalgamate
or consolidate with any other Subsidiary of the Parent, provided
that, in the case of any such merger, amalgamation or consolidation,
the Person formed by such merger, amalgamation or consolidation shall
be a wholly owned Subsidiary of the Parent, provided further that, in
the case of any such merger, amalgamation or consolidation to which
an Account Party is a party, the Person formed by such merger,
amalgamation or consolidation shall be such Account Party;
(ii) any Subsidiary of any Account Party may merge into or
amalgamate or consolidate with any other Person or permit any other
Person to merge into or amalgamate or consolidate with it; provided
that the Person surviving such merger shall be a wholly owned
Subsidiary of the Account Party;
(iii) in connection with any sale or other disposition
permitted under Section 5.02(d), any Subsidiary of the Parent may
merge into or amalgamate or consolidate with any other Person or
permit any other Person to merge into or amalgamate or consolidate
with it; and
(iv) the Parent or any Account Party may merge into or
amalgamate or consolidate with any other Person; provided that, in
48
the case of any such merger, amalgamation or consolidation, the
Person formed by such merger, amalgamation or consolidation shall be
the Parent or such Account Party, as the case may be;
provided, however, that in each case, immediately after giving effect
thereto, no event shall occur and be continuing that constitutes a Default.
(d) Sales, Etc., of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any other Account Party to sell, lease, transfer or
otherwise dispose of, all or substantially all of its assets (excluding sales
of investment securities in the ordinary course of business).
(e) Restricted Payments. In the case of the Parent, declare or pay
any dividends, purchase, redeem, retire, defease or otherwise acquire for
value any of its Equity Interests now or hereafter outstanding, return any
capital to its stockholders, partners or members (or the equivalent Persons
thereof) as such, make any distribution of assets, Equity Interests,
obligations or securities to its stockholders, partners or members (or the
equivalent Persons thereof) as such or issue or sell any Equity Interests or
accept any capital contributions, or permit any of its Subsidiaries to do any
of the foregoing, or permit any of its Subsidiaries to purchase, redeem,
retire, defease or otherwise acquire for value any Equity Interests in the
Parent or to issue or sell any Equity Interests therein, except that, so long
as no Default shall have occurred and be continuing at the time of any action
described in clause (i) or (ii) below or would result therefrom:
(i) the Parent may (A) declare and pay dividends and
distributions payable only in common stock of the Parent, (B) issue
and sell shares of its capital stock, (C) purchase, redeem, retire,
defease or otherwise acquire for value any of its Equity Interests in
an aggregate amount during the term of this Agreement not exceeding
$300,000,000 and (D) declare and pay cash dividends to its
stockholders,
(ii) (A) any Loan Party (other than the Parent) may declare and
pay cash dividends to another Loan Party and (B) any Subsidiary of
the Parent (other than any Loan Party) may (x) declare and pay cash
dividends to the Parent or any other wholly owned Subsidiary of the
Parent of which it is a Subsidiary and (y) accept capital
contributions from its parent, and
(iii) a Special Purpose Trust may issue Preferred Securities and
pay dividends thereon with the proceeds of payments of interest on
the Debentures.
(f) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or reporting
practices, except as permitted by GAAP.
SECTION 5.03 Reporting Requirements. So long as any Advance or any
other obligation of any Loan Party under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding or any Bank shall have any
Letter of Credit Participating Interest Commitment or commitment to issue a
Letter of Credit hereunder, the Parent will furnish to the Agents and the
Banks:
49
(a) Default Notice. As soon as possible and in any event within two
days after the occurrence of each Default or any event, development or
occurrence reasonably likely to have a Material Adverse Effect continuing on
the date of such statement, a statement of the chief financial officer of the
Parent setting forth details of such Default, event, development or occurrence
and the action that the Parent or the applicable Subsidiary has taken and
proposes to take with respect thereto.
(b) Annual Financials.
(i) As soon as available and in any event within 90 days after
the end of each Fiscal Year (or, if earlier, within five Business
Days after such date as the Parent is required to file its annual
report on Form 10-K for such Fiscal Year with the Securities and
Exchange Commission), a copy of the annual Consolidated audit report
for such year for the Parent and its Subsidiaries, including therein
a Consolidated balance sheet of the Parent and its Subsidiaries as of
the end of such Fiscal Year and Consolidated statements of income and
cash flows of the Parent and its Subsidiaries for such Fiscal Year,
all reported on in a manner reasonably acceptable to the Securities
and Exchange Commission in each case and accompanied by an opinion of
PricewaterhouseCoopers LLP or other independent public accountants of
recognized standing reasonably acceptable to the Required Banks,
together with (i) a certificate of the Chief Financial Officer of the
Parent stating that no Default has occurred and is continuing, or if
a Default has occurred and is continuing, a statement as to the
nature thereof and the action that the Parent has taken a proposes to
take with respect thereto, and (ii) a schedule in form reasonably
satisfactory to the Administrative Agent of the computations used by
the Parent in determining, as of the end of such Fiscal Year,
compliance with the covenants contained in Section 5.04.
(ii) As soon as available and in any event within 120 days after
the end of each Fiscal Year, a copy of the annual Consolidated audit
report for such year for each Subsidiary Guarantor and its
Subsidiaries, including therein a Consolidated balance sheet of such
Subsidiary Guarantor and its Subsidiaries as of the end of such
Fiscal Year and a Consolidated statement of income and a Consolidated
statement of cash flows of such Subsidiary Guarantor and its
Subsidiaries for such Fiscal Year, in each case accompanied by an
opinion acceptable to the Required Banks of PricewaterhouseCoopers
LLP or other independent public accountants of recognized standing
acceptable to the Required Banks.
(c) Quarterly Financials. As soon as available and in any event
within 45 days after the end of each of the first three quarters of each
Fiscal Year (or, if earlier, within five Business Days after such date as the
Parent is required to file its quarterly report on Form 10-Q for such fiscal
quarter with the Securities and Exchange Commission), Consolidated balance
sheets of the Parent and its Subsidiaries as of the end of such quarter and
Consolidated statements of income and a Consolidated statement of cash flows
of the Parent and its Subsidiaries for the period commencing 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
50
adjustments) by the Chief Financial Officer of the Parent as having been
prepared in accordance with GAAP, together with (i) a certificate of said
officer stating that no Default has occurred and is continuing or, if a
Default has occurred and is continuing, a statement as to the nature thereof
and the action that the Parent has taken and proposes to take with respect
thereto and (ii) a schedule in form reasonably satisfactory to the
Administrative Agent of the computations used by the Parent in determining
compliance with the covenants contained in Section 5.04.
(d) Litigation. Promptly after the commencement thereof, notice of
all actions, suits, investigations, litigation and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or any of its
Subsidiaries of the type described in Section 4.01(f).
(e) Securities Reports. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports that the
Parent sends to its stockholders generally, copies of all regular, periodic
and special reports, and all registration statements, that any Loan Party or
any of its Subsidiaries files with the Securities and Exchange Commission or
any governmental authority that may be substituted therefor, or with any
national securities exchange, and (to the extent not otherwise provided)
copies of all certifications of the Parent's principal executive officer and
principal financial officer made pursuant to Section 302 or 906 of the
Xxxxxxxx-Xxxxx Act of 2002, as amended.
(f) ERISA.
(i) ERISA Events. Promptly and in any event within 10 days after
any Loan Party or any ERISA Affiliate institutes any steps to
terminate any Pension Plan or becomes aware of the institution of any
steps or any threat by the PBGC to terminate any Pension Plan, or the
failure to make a required contribution to any Pension Plan if such
failure is sufficient to give rise to a lien under section 302(f) of
ERISA, or the taking of any action with respect to a Pension Plan
which could result in the requirement that any Loan Party or any
ERISA Affiliate furnish a bond or other security to the PBGC or such
Pension Plan, or the occurrence of any event with respect to any
Pension Plan which could result in any Loan Party or any ERISA
Affiliate incurring any material liability, fine or penalty, or any
material increase in the contingent liability of any Loan Party or
any ERISA Affiliate with respect to any post-retirement Welfare Plan
benefit, notice thereof and copies of all documentation relating
thereto.
(ii) Plan Annual Reports. Promptly upon request of any Agent or
any Bank, copies of each Schedule B (Actuarial Information) to the
annual report (Form 5500 Series) with respect to each Pension Plan.
(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
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(A) or (B); provided, however, that such notice and
documentation shall not be required to be provided (except at the
specific request of any Agent or any Bank, in which case such notice and
documentation shall be promptly provided following such request) if such
condition or event is not reasonably expected to result in any Loan Party
or any ERISA Affiliate incurring any material liability, fine, or
penalty.
(g) [Reserved.]
(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, the Registrar of Companies or the Supervisor of
Insurance or any other person of the revocation, the suspension or the placing
of any restriction or condition on the registration as an insurer of any
Account Party under the Bermuda Insurance Act 1978 (and related regulations)
or of the institution of any proceeding or investigation which could result in
any such revocation, suspension or placing of such a restriction or condition,
(ii) copies of any correspondence by, to or concerning any Loan Party relating
to an investigation conducted by the Bermuda Minister of Finance, whether
pursuant to Section 132 of the Bermuda Companies Act 1981 (and related
regulations) or otherwise and (iii) a copy of any notice of or requesting or
otherwise relating to the winding-up or any similar proceeding of or with
respect to any Loan Party.
(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 the
Administrative Agent, or any Bank through the Administrative Agent, may from
time to time reasonably request.
SECTION 5.04 Financial Covenants. So long as any Advance or any other
obligation of any Loan Party under any Loan Document shall remain unpaid, any
Letter of Credit shall be outstanding or any Bank shall have any Letter of
Credit Participating Interest Commitment or commitment to issue a Letter of
Credit hereunder, the Parent will:
(a) Adjusted Consolidated Debt to Total Capitalization Ratio.
Maintain at all times a ratio of Adjusted Consolidated Debt to Total
Capitalization of not more than 0.35 to 1.0.
(b) Consolidated Net Worth. Maintain at all times Consolidated Net
Worth in an amount not less than the sum of (i) $3,600,000,000 plus (ii) 25%
of Consolidated Net Income for each fiscal quarter of the Parent ending on or
after March 31, 2000 for which such Consolidated Net Income is positive.
52
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01 Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) (i) any Account Party shall fail to pay any principal of any
Advance when the same shall become due and payable or (ii) any Account Party
shall fail to pay any interest on any Advance, or any Loan Party shall fail to
make any other payment under any Loan Document, in each case under this clause
(ii) within five Business Days after the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to
have been incorrect in any material respect when made; or
(c) any Account Party shall fail to perform or observe any term,
covenant or agreement contained in Section 2.10, 5.01(d) (with respect to the
Parent) or (e), 5.02 or 5.04; or
(d) any Loan Party shall fail to perform or observe any other term,
covenant or agreement contained in any Loan Document on its part to be
performed or observed if such failure shall remain unremedied for 30 days
after the earlier of the date on which (i) a Responsible Officer becomes aware
of such failure or (ii) written notice thereof shall have been given to such
Loan Party by any Agent or any Bank; or
(e) the Parent or any of its Significant Subsidiaries shall fail to
pay any Material Financial Obligation (but excluding Debt outstanding
hereunder) of the Parent or such Significant Subsidiary (as the case may be),
when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the agreement
or instrument relating to such Material Financial Obligation; or any other
event shall occur or condition shall exist under any agreement or instrument
relating to any such Material Financial Obligation and shall continue after
the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Material Financial Obligation
or otherwise to cause, or to permit the holder thereof to cause, such Material
Financial Obligation to mature; or any such Material Financial Obligation
shall be declared to be due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or redemption),
purchased or defeased, or an offer to prepay, redeem, purchase or defease such
Material Financial Obligation shall be required to be made, in each case prior
to the stated maturity thereof; or
(f) any Loan Party or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any Loan Party
or any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent,
or seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating
to bankruptcy, insolvency or reorganization or relief of debtors, or seeking
the entry of an order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its property and,
53
in the case of any such proceeding instituted against it (but not instituted
by it) that is being diligently contested by it in good faith, either such
proceeding shall remain undismissed or unstayed for a period of 30 days or any
of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or any substantial part
of its property) shall occur; or any Loan Party or any of its Subsidiaries
shall take any corporate action to authorize any of the actions set forth
above in this subsection (f); or
(g) any judgment or order for the payment of money in excess of
$100,000,000 shall be rendered against any Loan Party or any of its
Subsidiaries and either (i) enforcement proceedings shall have been commenced
by any creditor upon such judgment or order or (ii) there shall be any period
of 30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; or
(h) any non-monetary judgment or order shall be rendered against any
Loan Party or any of its Subsidiaries that could be reasonably likely to have
a Material Adverse Effect, and there shall be any period of 30 consecutive
days during which a stay of enforcement of such judgment or order, by reason
of a pending appeal or otherwise, shall not be in effect; or
(i) any provision of any Loan Document after delivery thereof
pursuant to Section 3.01 shall for any reason cease to be valid and binding on
or enforceable against any Loan Party party to it (other than as a result of a
transaction permitted hereunder), or any such Loan Party shall so state in
writing; or
(j) a Change of Control shall occur; or
(k) Any Loan Party or any ERISA Affiliate shall incur or shall be
reasonably expected to incur liability in excess of $25,000,000 in the
aggregate with respect to any Pension Plan or any Multiemployer Plan in
connection with the occurrence of any of the following events or existence of
any of the following conditions:
(i) Institution of any steps by any Loan Party, any ERISA
Affiliate or any other Person, including, without limitation, the
PBGC to terminate a Pension Plan if as a result of such termination a
Loan Party or any ERISA Affiliate could be required to make a
contribution to such Pension Plan, or could incur a liability or
obligation; or
(ii) A contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a lien under section 302(f) of ERISA;
or
(iii) Any condition shall exist or event shall occur with respect
to a Pension Plan that is reasonably expected to result in any Loan
Party or any ERISA Affiliate being required to furnish a bond or
security to the PBGC or such Pension Plan, or incurring a liability
or obligation; or
(l) any Loan Party or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability
to such Multiemployer Plan; or
54
(m) any Loan Party or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, and as a result of such reorganization or termination the aggregate
annual contributions of the Loan Parties and the ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated have
been or will be increased over the amounts contributed to such Multiemployer
Plans for the plan years of such Multiemployer Plans immediately preceding the
plan year in which such reorganization or termination occurs;
then, and in any such event, the Administrative Agent (i) shall at the
request, or may with the consent, of the Required Banks, by notice to the
Account Parties, declare the obligation of the Issuing Bank to issue
Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and/or (ii) shall at the request, or may with the consent, of
the Required Banks, by notice to the Account Parties, declare all amounts
payable under this Agreement and the other Loan Documents to be forthwith
due and payable, whereupon all such amounts shall become and be forthwith
due and payable, without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived by the Account Parties;
provided, however, that in the event of an actual or deemed entry of an
order for relief with respect to any Account Party under the Federal
Bankruptcy Code, (x) the obligation of the Issuing Bank to issue Letters of
Credit shall automatically be terminated, (y) all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived
by the Account Parties and (z) the obligation of the Account Parties to
provide cash collateral under Section 6.02 shall automatically become
effective.
SECTION 6.02 Actions in Respect of the Letters of Credit upon
Default. If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Banks, after
having taken any of the actions described in Section 6.01(ii) or otherwise,
make demand upon the Account Parties to, and forthwith upon such demand the
Account Parties will, pay to the Administrative Agent on behalf of the Banks
in same day funds at the Administrative Agent's office designated in such
demand, an amount equal to the aggregate Available Amount of all Letters of
Credit then outstanding as cash collateral. If at any time during the
continuance of an Event of Default the Administrative Agent determines that
such funds are subject to any right or claim of any Person other than the
Administrative Agent and the Banks or that the total amount of such funds is
less than the aggregate Available Amount of all Letters of Credit, the Account
Parties will, forthwith upon demand by the Administrative Agent, pay to the
Administrative Agent, as additional cash collateral, an amount equal to the
excess of (a) such aggregate Available Amount over (b) the total amount of
funds, if any, that the Administrative Agent determines to be free and clear
of any such right and claim. Upon the drawing of any Letter of Credit, such
funds shall be applied to reimburse the Issuing Bank or Banks, as applicable,
to the extent permitted by applicable law.
55
ARTICLE VII
THE GUARANTY
SECTION 7.01 The Guaranty.
(a) Each Account Party hereby jointly and severally, unconditionally,
absolutely and irrevocably guarantees the full and punctual payment (whether
at stated maturity, upon acceleration or otherwise) of all amounts payable by
each of the other Account Parties under the Loan Documents including, without
limitation, the principal of and interest (including, to the greatest extent
permitted by law, post-petition interest) on reimbursement obligations owing
by such other Account Parties pursuant to this Agreement with respect to
Letters of Credit and fees, expenses, indemnities or any other obligations,
whether now existing or hereafter incurred, created or arising and whether
direct or indirect, absolute or contingent, or due or to become due. Upon
failure by an Account Party to pay punctually any such amount, each other
Account Party agrees to pay forthwith on demand the amount not so paid at the
place and in the manner specified in this Agreement.
(b) Each Account Party (other than the Parent), and by its acceptance
of this Guaranty, the Administrative Agent and each other Bank, hereby
confirms that it is the intention of all such Persons that this Guaranty and
the obligations of each Account Party hereunder not constitute a fraudulent
transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign,
federal or state law to the extent applicable to this Guaranty and the
obligations of each Account Party (other than the Parent) hereunder. To
effectuate the foregoing intention, the Administrative Agent, the other Banks
and the Account Parties hereby irrevocably agree that the obligations of each
Account Party (other than the Parent) under this Article VII at any time shall
be limited to the maximum amount as will result in the obligations of such
Account Party under this Guaranty not constituting a fraudulent transfer or
conveyance.
SECTION 7.02 Guaranty Unconditional. The obligations of each Account
Party under this Article VII shall be unconditional, absolute and irrevocable
and, without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver or
release 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;
56
(v) the existence of any claim, set-off or other rights which any
obligor may have at any time against any other obligor, the
Administrative Agent, any Bank or any other corporation or person,
whether in connection with any of the Loan Documents or any unrelated
transactions, provided that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory
counterclaim;
(vi) any invalidity or unenforceability relating to or against
any other obligor for any reason of any of the Loan Documents, or any
provision of applicable law or regulation purporting to prohibit the
payment by any other obligor of principal interest or any other
amount payable under any of the Loan Documents; or
(vii) any other act or omission to act or delay of any kind by
any obligor, the Administrative Agent, any Bank or any other
corporation or person or any other circumstance whatsoever which
might, but for the provisions of this paragraph, constitute a legal
or equitable discharge of or defense to an Account Party's
obligations under this Article VII.
SECTION 7.03 Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances. Each Account Party's obligations under this Article VII
shall remain in full force and effect until the commitments of the Banks
hereunder shall have terminated, no Letters of Credit shall be outstanding and
all amounts payable by the other Account Parties under the Loan Documents
shall have been paid in full. If at any time any payment of the principal of
or interest on any reimbursement obligation or any other amount payable by an
Account Party under the Loan Documents is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of such
Account Party or otherwise, each other Account Party's obligations under this
Article VII with respect to such payment shall be reinstated as though such
payment had been due but not made at such time.
SECTION 7.04 Waiver by the Account Parties. Each Account Party
irrevocably waives acceptance hereof, presentment, demand, protest and any
notice not provided for herein, as well as any requirement that at any time
any action be taken by any corporation or person against any other obligor or
any other corporation or person.
SECTION 7.05 Subrogation. Each Account Party hereby unconditionally
and irrevocably agrees not to exercise any rights that it may now have or
hereafter acquire against any other Account Party, any other Loan Party or any
other insider guarantor that arise from the existence, payment, performance or
enforcement of such Account Party's obligations under or in respect of this
Guaranty or any other Loan Document, including, without limitation, any right
of subrogation, reimbursement, exoneration, contribution or indemnification
and any right to participate in any claim or remedy of any Bank against any
other Account Party, any other Loan Party or any other insider guarantor or
any collateral, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including, without limitation, the
right to take or receive from any other Account Party, any other Loan Party or
any other insider guarantor, directly or indirectly, in cash or other property
or by set-off or in any other manner, payment or security on account of such
claim, remedy or right, unless and until all amounts payable under this
Guaranty shall have been paid in full in cash, no Letters of Credit shall be
outstanding and the commitments of the Banks hereunder shall have expired or
been terminated. If any amount shall be paid to any Account Party in violation
57
of the immediately preceding sentence at any time prior to the latest of (a)
the payment in full in cash of all amounts payable under this Guaranty, and
(b) the Expiration Date, such amount shall be received and held in trust for
the benefit of the Banks, shall be segregated from other property and funds of
such Account Party and shall forthwith be paid or delivered to the
Administrative Agent in the same form as so received (with any necessary
endorsement or assignment) to be credited and applied to all amounts payable
under this Guaranty, whether matured or unmatured, in accordance with the
terms of the Loan Documents, or to be held as collateral for any amounts
payable under this Guaranty thereafter arising. If (i) any Account Party shall
make payment to any Bank of all or any amounts payable under this Guaranty,
(ii) all amounts payable under this Guaranty shall have been paid in full in
cash, and (iii) the Expiration Date shall have occurred, the Banks will, at
such Account Party's request and expense, execute and deliver to such Account
Party appropriate documents, without recourse and without representation or
warranty, necessary to evidence the transfer by subrogation to such Account
Party of an interest in the obligations resulting from such payment made by
such Account Party pursuant to this Guaranty.
SECTION 7.06 Stay of Acceleration. If acceleration of the time for
payment of any amount payable by any Account Party under any of the Loan
Documents is stayed upon the insolvency, bankruptcy or reorganization of such
Account Party, all such amounts otherwise subject to acceleration under the
terms of this Agreement shall nonetheless be payable by the other Account
Parties under this Article VII forthwith on demand by the Administrative Agent
made at the request of the requisite proportion of the Banks.
SECTION 7.07 Continuing Guaranty; Assignments. This Guaranty is a
continuing guaranty and shall (a) remain in full force and effect until the
latest of (i) the payment in full in cash of all amounts payable under this
Guaranty and (ii) the Expiration Date, (b) be binding upon each Account Party,
its successors and assigns and (c) inure to the benefit of and be enforceable
by the Banks and their successors, transferees and assigns. Without limiting
the generality of clause (c) of the immediately preceding sentence, any Bank
may assign or otherwise transfer all or any portion of its rights and
obligations under this Agreement (including, without limitation, all or any
portion of its Letter of Credit Participating Interest Commitment and the
Advances owing to it) to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
such Bank herein or otherwise, in each case as and to the extent provided in
Section 9.07.
ARTICLE VIII
THE AGENTS
SECTION 8.01 Authorization and Action. Each Bank (in its capacity as
a Bank) hereby appoints and authorizes each Agent to take such action as agent
on its behalf and to exercise such powers and discretion under this Agreement
and the other Loan Documents as are delegated to such Agent by the terms
hereof and thereof, together with such powers and discretion as are reasonably
incidental thereto. As to any matters not expressly provided for by the Loan
Documents, no Agent shall be required to exercise any discretion or take any
action, but shall be required to act (in the case of the Administrative Agent)
or to refrain from acting (and shall be fully protected in so acting or
58
refraining from acting) upon the instructions of the Required Banks or all the
Banks where unanimity is required, and such instructions shall be binding upon
all Banks; provided, however, that no Agent shall be required to take any
action that exposes such Agent to personal liability or that is contrary to
this Agreement or applicable law. The Administrative Agent agrees to give to
each Bank prompt notice of each notice given to it by any Account Party
pursuant to the terms of this Agreement.
SECTION 8.02 Agents' Reliance, Etc. Neither any Agent nor any of its
respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each Agent:
(a) may consult with legal counsel (including counsel for any Loan Party),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (b) makes
no warranty or representation to any Bank and shall not be responsible to any
Bank for any statements, warranties or representations (whether written or
oral) made in or in connection with the Loan Documents; (c) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of any Loan Document on the part of any
Loan Party or to inspect the property (including the books and records) of any
Loan Party; (d) shall not be responsible to any Bank for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or
the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; and (e) shall incur
no liability under or in respect of any Loan Document by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telegram or telecopy) reasonably believed by it to be genuine and signed or
sent by the proper party or parties.
SECTION 8.03 Wachovia and Affiliates. With respect to its LC
Commitment Amounts, and the Advances, Wachovia shall have the same rights and
powers under the Loan Documents as any other Bank and may exercise the same as
though it were not an Agent; and the term "Bank" or "Banks" shall, unless
otherwise expressly indicated, include Wachovia in its individual capacity.
Wachovia and its affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, any Loan Party, any of its
Subsidiaries and any Person that may do business with or own securities of any
Loan Party or any such Subsidiary, all as if Wachovia were not an Agent and
without any duty to account therefor to the Banks.
SECTION 8.04 Bank Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon any Agent or any other Bank and
based on the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon any Agent
or any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under this Agreement.
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SECTION 8.05 Indemnification.
(a) Each Bank severally agrees to indemnify each Agent and its
officers, directors, employees, agents, advisors and Affiliates (to the extent
not promptly reimbursed by the Account Parties) from and against such Bank's
ratable share (determined as provided below) of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against such Agent or any such other Person in
any way relating to or arising out of the Loan Documents or any action taken
or omitted by such Agent under the Loan Documents; provided, however, that no
Bank shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Agent's or other Person's gross negligence
or willful misconduct. Without limitation of the foregoing, each Bank agrees
to reimburse each Agent promptly upon demand for its ratable share of any
costs and expenses (including, without limitation, fees and expenses of
counsel) payable by the Account Parties under Section 9.04, to the extent that
such Agent is not promptly reimbursed for such costs and expenses by the
Account Parties.
(b) For purposes of this Section 8.05, the Banks' respective ratable
shares of any amount shall be determined, at any time, according to the sum of
(i) the aggregate principal amount of the Advances outstanding at such time
and owing to the respective Banks, (ii) their respective Pro Rata Shares of
the aggregate Available Amounts of all Letters of Credit outstanding at such
time and (iii) their respective Unused LC Commitment Amounts at such time. The
failure of any Bank to reimburse any Agent promptly upon demand for its
ratable share of any amount required to be paid by the Banks to such Agent as
provided herein shall not relieve any other Bank of its obligation hereunder
to reimburse such Agent for its ratable share of such amount, but no Bank
shall be responsible for the failure of any other Bank to reimburse such Agent
for such other Bank's ratable share of such amount. Without prejudice to the
survival of any other agreement of any Bank hereunder, the agreement and
obligations of each Bank contained in this Section 8.05 shall survive the
payment in full of principal, interest and all other amounts payable hereunder
and under the other Loan Documents.
SECTION 8.06 Successor Administrative Agent. Any Agent may resign at
any time by giving written notice thereof to the Banks and the Parent and may
be removed at any time with or without cause by the Required Banks. Upon any
such resignation or removal of the Administrative Agent, the Required Banks
shall have the right to appoint a successor Administrative Agent, subject (so
long as no Event of Default exists) to the consent of the Parent (which
consent shall not be unreasonably withheld). If no successor Administrative
Agent shall have been so appointed by the Required Banks, and shall have
accepted such appointment, within 30 days after the retiring Administrative
Agent's giving of notice of resignation or the Required Banks' removal of the
retiring Administrative Agent, then the retiring Administrative Agent may, on
behalf of the Banks, appoint a successor Administrative Agent, which shall be
a commercial bank organized under the laws of the United States or of any
State thereof and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent such successor Administrative
Agent shall succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. If within 45 days after written notice
is given of the retiring Administrative Agent's resignation or removal under
this Section 8.06 no successor Administrative Agent shall have been appointed
and shall have accepted such appointment, then on such 45th day (i) the
retiring
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Administrative Agent's resignation or removal shall become effective, (ii) the
retiring Administrative Agent shall thereupon be discharged from its duties
and obligations under the Loan Documents and (iii) the Required Banks shall
thereafter perform all duties of the retiring Administrative Agent under the
Loan Documents until such time, if any, as the Required Banks appoint a
successor Administrative Agent as provided above. After any retiring Agent's
resignation or removal hereunder as Agent shall have become effective, the
provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement. If
Nova Scotia or Deutsche Bank ceases to be a Bank hereunder, it shall be deemed
to have resigned as Documentation Agent and no replacement shall be appointed.
If JPMorgan Chase or Bank of America ceases to be a Bank hereunder, it shall
be deemed to have resigned as Syndication Agent and no replacement shall be
appointed.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Amendments, Etc. No amendment or waiver of any provision
of this Agreement or any other Loan Document, nor consent to any departure by
any Loan Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Issuing Bank and the Required Banks
(and, in the case of an amendment, the Parent), and then any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or
consent shall, unless in writing and signed by all of the Banks (other than
(A) any Bank that is, at such time, a Defaulting Bank, and (B) in the case of
clauses (vi) and (vii) below, any Bank which is not and will not be (and is
not and will not be owed any obligation which is or will be) affected
thereby), do any of the following at any time: (i) waive any of the conditions
specified in Section 3.01 or, in the case of the Effective Date, Section 3.02,
(ii) change the number of Banks or the percentage of (x) the LC Commitment
Amounts, (y) the aggregate unpaid principal amount of the Advances or (z) the
aggregate Available Amount of outstanding Letters of Credit that, in each
case, shall be required for the Banks or any of them to take any action
hereunder, (iii) reduce or limit the obligations of any Account Party under
Section 7.01 or release such Account Party or otherwise limit such Account
Party's liability with respect to the obligations owing to the Agents and the
Banks, (iv) amend this Section 9.01, (v) increase the LC Commitment Amounts of
the Banks, extend the Expiration Date or subject the Banks to any additional
obligations, (vi) reduce the principal of, or interest on, any reimbursement
obligation or any fees or other amounts payable hereunder, or increase any
Bank's LC Commitment Amount, (vii) postpone any date fixed for any payment of
principal of, or interest on, any reimbursement obligation or any fees or
other amounts payable hereunder, 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 Banks required above to take such action, affect the rights or duties
of such Agent under this Agreement or the other Loan Documents.
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SECTION 9.02 Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic or telecopy
communication) and mailed, telegraphed, telecopied or delivered, if to any
Account Party, at its address set forth below on the signature pages hereof;
if to any Initial Bank, at its Domestic Lending Office specified opposite its
name on Part 2 of Schedule I hereto; if to any other Bank, at its Domestic
Lending Office specified in the Assignment and Acceptance pursuant to which it
became a Bank; if to Wachovia (in its capacity as Issuing Bank) at its address
at 000 Xxxxxx Xxxxxx, Mail Code NC-6034, Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000,
Attn: International Operations -- Standby Letter of Credit Department,
Telecopy No. (000) 000-0000; if to Mellon (in its capacity as Issuing Bank) at
its address at Xxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, Attn: Xxxxx
Xxxxxx, Telecopy No. (000) 000-0000, with a copy to Letter of Credit
Operations, at the same address; and if to the Administrative Agent, at its
address at Charlotte Plaza Building CP-23, 000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attn: Syndication Agency Services,
Telecopy No. (000) 000-0000; or, as to any party, at such other address as
shall be designated by such party in a written notice to the other parties.
All such notices and communications shall, when mailed, telegraphed or
telecopied, be effective when deposited in the mails, delivered to the
telegraph company or transmitted by telecopier, respectively, except that
notices and communications to the Administrative Agent pursuant to Article II,
III or VIII shall not be effective until received by the Administrative Agent.
Manual delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Agreement or of any Exhibit hereto to be
executed and delivered hereunder shall be effective as delivery of an original
executed counterpart thereof.
SECTION 9.03 No Waiver; Remedies. No failure on the part of any Bank
or any Agent to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 9.04 Costs and Expenses.
(a) Each of the Account Parties agrees to pay on demand (i) all
reasonable costs and expenses of the Administrative Agent and of the Issuing
Bank in connection with the preparation, execution, delivery, administration,
modification and amendment of the Loan Documents (including, without
limitation, (A) all due diligence, collateral review, syndication,
transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses and (B) the
reasonable fees and expenses of a single counsel for the Administrative Agent
and a single counsel for the Issuing Bank with respect thereto, with respect
to advising the Administrative Agent as to its rights and responsibilities, or
the perfection, protection or preservation of rights or interests, under the
Loan Documents, with respect to negotiations with any Loan Party or with other
creditors of any Loan Party or any of its Subsidiaries arising out of any
Default or any events or circumstances that may give rise to a Default and
with respect to presenting claims in or otherwise participating in or
monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii) all
reasonable costs and expenses of each Agent, the Issuing Bank and each Bank in
connection with the enforcement of the Loan Documents, whether in any action,
suit or litigation, or any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally (including, without limitation, the
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reasonable fees and expenses of counsel for the Administrative Agent, the
Issuing Bank and each Bank with respect thereto).
(b) Each of the Account Parties jointly and severally agrees to
indemnify and hold harmless each Agent, the Arranger, the Issuing Bank, each
Bank and each of their Affiliates and their respective officers, directors,
employees, agents and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) this Agreement, the actual
or proposed use of the proceeds of the Advances, the Loan Documents or any of
the transactions contemplated thereby, except to the extent such claim,
damage, loss, liability or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct. In the case of an
investigation, litigation or other proceeding to which the indemnity in this
Section 9.04(b) applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnified Party or any
Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated by the Loan Documents are consummated. Each of the
Account Parties also agrees not to assert any claim against any Agent, the
Arranger, any Bank or any of their Affiliates, or any of their respective
officers, directors, employees, attorneys and agents, on any theory of
liability, for special, indirect, consequential or punitive damages arising
out of or otherwise relating to the credit facilities provided hereunder, the
actual or proposed use of the proceeds of the Advances or the Letters of
Credit, the Loan Documents or any of the transactions contemplated by the Loan
Documents.
(c) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Account Parties contained in Section 2.07 and this Section
9.04 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan Documents.
SECTION 9.05 Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare amounts owing hereunder to be due and payable
pursuant to the provisions of Section 6.01, each Agent and each Bank and each
of their respective Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and otherwise
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such
Agent, such Bank or such Affiliate to or for the credit or the account of any
Account Party against any and all of the obligations of such Account Party now
or hereafter existing under the Loan Documents, irrespective of whether such
Agent or such Bank shall have made any demand under this Agreement and
although such obligations may be unmatured. Each Agent and each Bank agrees
promptly to notify each Account Party after any such set-off and application;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Agent and each
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Bank and their respective Affiliates under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) that such Agent, such Bank and their respective Affiliates may have.
SECTION 9.06 Binding Effect. This Agreement shall become effective
when it shall have been executed by each Account Party, the Issuing Bank and
each Agent and the Administrative Agent shall have been notified by each
Initial Bank that such Initial Bank has executed it and thereafter shall be
binding upon and inure to the benefit of each Account Party, each Agent, the
Issuing Bank and each Bank and their respective successors and assigns, except
that no Account Party shall have the right to assign its rights hereunder or
any interest herein without the prior written consent of the Banks.
SECTION 9.07 Assignments and Participations.
(a) Each Bank may, and so long as no Default shall have occurred and
be continuing, if demanded by any Account Party (following a demand by such
Bank pursuant to Section 2.12) upon at least five Business Days notice to such
Bank and the Administrative Agent, will, assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its LC Commitment Amount,
its Letter of Credit Participating Interest Commitment and the Letter of
Credit Advances owing to it); provided, however, that (i) each such assignment
shall be of a uniform, and not a varying, percentage of all rights and
obligations of such Bank hereunder, except for any non-pro rata assignment
made by a Downgraded Bank after a request by the Issuing Bank pursuant to
Section 2.14 (and any subsequent non-pro rata assignment of the interest so
assigned or by the Downgraded Bank) and any other non-pro rata assignment
approved by the Administrative Agent and any Account Party, (ii) except in the
case of an assignment to a Person that, immediately prior to such assignment,
was a Bank or an Affiliate of any Bank or an assignment of all of a Bank's
rights and obligations under this Agreement, the aggregate amount of the LC
Commitment Amounts being assigned to such Eligible Assignee pursuant to such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $10,000,000 unless
it is an assignment of the entire amount of such assignor's LC Commitment
Amount, (iii) each such assignment shall be to an Eligible Assignee, (iv) each
assignment made as a result of a demand by any Account Party pursuant to
Section 2.12 shall be arranged by such Account Party after consultation with
the Administrative Agent and shall be either an assignment of all of the
rights and obligations of the assigning Bank under this Agreement or an
assignment of a portion of such rights and obligations made concurrently with
another such assignment or other such assignments that together cover all of
the rights and obligations of the assigning Bank under this Agreement, (v) no
Bank shall be obligated to make any such assignment as a result of a demand by
any Account Party pursuant to Section 2.12 unless and until such Bank shall
have received one or more payments from either such Account Party or other
Eligible Assignees in an aggregate amount at least equal to the aggregate
outstanding principal amount of the Advances made by such Bank, together with
accrued interest thereon to the date of payment of such principal amount and
all other amounts payable to such Bank under this Agreement, (vi) as a result
of such assignment, no Account Party shall be subject to additional amounts
under Section 2.06 or 2.08 and (vii) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
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recording in the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $2,500.00.
(b) Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (i) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Bank, hereunder and (ii) the
Bank assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (other than its rights under Sections 2.06, 2.08 and
9.04 to the extent any claim thereunder relates to an event arising prior to
such assignment and any other rights that are expressly provided hereunder to
survive) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all of the remaining portion
of an assigning Bank's rights and obligations under this Agreement, such Bank
shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, each
Bank assignor thereunder and each assignee thereunder confirm to and agree
with each other and the other parties thereto and hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Bank makes
no representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
any Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any
lien or security interest created or purported to be created under or in
connection with, any Loan Document or any other instrument or document
furnished pursuant thereto; (ii) such assigning Bank makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of any Loan Party or the performance or observance by any Loan Party
of any of its obligations under any Loan Document or any other instrument or
document furnished pursuant thereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee
will, independently and without reliance upon any Agent, such assigning Bank
or any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under this Agreement; (v) such assignee confirms that it
is an Eligible Assignee; (vi) such assignee appoints and authorizes each Agent
to take such action as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to such Agent by the
terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations that by the
terms of this Agreement are required to be performed by it as a Bank.
(d) The Administrative Agent, acting for this purpose (but only for
this purpose) as the agent of the Account Parties, shall maintain at its
address referred to in Section 9.02 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the
names and addresses of the Banks and the LC Commitment Amount of, and
principal amount of the Advances owing to, each Bank from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for
all purposes,
65
absent manifest error, and the Account Parties, the Agents and the Banks shall
treat each Person whose name is recorded in the Register as a Bank hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by any Account Party or any Agent or any Bank at any reasonable
time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and an assignee, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form
of Exhibit A hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the Parent and to the parties to such Assignment and Acceptance.
(f) Each Bank may sell participations to one or more Persons (other
than any Loan Party or any of its Affiliates) in or to all or a portion of its
rights and obligations under this Agreement (including, without limitation,
all or a portion of its LC Commitment Amount, its Letter of Credit
Participating Interest Commitment and the Advances owing to it; provided,
however, that (i) such Bank's obligations under this Agreement (including,
without limitation, its Letter of Credit Participating Interest Commitment)
shall remain unchanged, (ii) such Bank shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) the
Account Parties, the Agents and the other Banks shall continue to deal solely
and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement and (iv) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, reimbursement obligations or
any fees or other amounts payable hereunder, in each case to the extent
subject to such participation, postpone any date fixed for any payment of
principal of, or interest on, the reimbursement obligations or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation. Each Bank shall, as agent of the Account Parties solely for the
purposes of this Section, record in book entries maintained by such Bank, the
name and amount of the participating interest of each Person entitled to
receive payments in respect of any participating interests sold pursuant to
this Section.
(g) Any Bank may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 9.07,
disclose to the assignee or participant or proposed assignee or participant
any information relating to any Account Party furnished to such Bank by or on
behalf of any Account Party; provided, however, that, prior to any such
disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Bank.
(h) Notwithstanding any other provision set forth in this Agreement,
any Bank may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it) in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System.
SECTION 9.08 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate
66
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of an original executed counterpart
of this Agreement.
SECTION 9.09 No Liability of the Issuing Bank. Each Account Party
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letter of Credit. Neither
the Issuing Bank nor any of its officers, directors, employees or agents shall
be liable or responsible for: (a) the use that may be made of any Letter of
Credit or any acts or omissions of any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of documents, or of
any endorsement thereon, even if such documents should prove to be in any or
all respects invalid, insufficient, fraudulent or forged; (c) payment by the
Issuing Bank against presentation of documents that do not strictly comply
with the terms of a Letter of Credit, including failure of any documents to
bear any reference or adequate reference to the Letter of Credit; or (d) any
other circumstances whatsoever in making or failing to make payment under any
Letter of Credit, except that such Account Party shall have a claim against
the Issuing Bank, and the Issuing Bank shall be liable to such Account Party,
to the extent of any direct, but not consequential, damages suffered by such
Account Party that such Account Party proves were caused by (i) the Issuing
Bank's willful misconduct or gross negligence as determined in a final,
non-appealable judgment by a court of competent jurisdiction in determining
whether documents presented under any Letter of Credit comply with the terms
of the Letter of Credit or (ii) the Issuing Bank's willful failure to make
lawful payment under a Letter of Credit after the presentation to it of a
draft and certificates strictly complying with the terms and conditions of the
Letter of Credit. In furtherance and not in limitation of the foregoing, the
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 9.10 Confidentiality. Neither any Agent nor any Bank shall
disclose any Confidential Information to any Person without the consent of the
Parent, other than (a) to such Agent's or such Bank's Affiliates and their
officers, directors, employees, agents and advisors and to actual or
prospective Eligible Assignees and participants, and then only on a
confidential basis, (b) as required by any law, rule or regulation or judicial
process, (c) as requested or required by any state, Federal or foreign
authority or examiner regulating such Bank and (d) to any rating agency when
required by it, provided that, prior to any such disclosure, such rating
agency shall undertake to preserve the confidentiality of any Confidential
Information relating to the Loan Parties received by it from such Bank.
SECTION 9.11 Jurisdiction, Etc.
(a) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or Federal court of the United States of America sitting
in New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any of the other
Loan Documents to which it is a party, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or, to
the extent permitted by law, in such Federal court. Each of the parties hereto
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agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Agreement shall affect
any right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or any of the other Loan Documents in the courts of
any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement or any
of the other Loan Documents to which it is a party in any New York State or
Federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
SECTION 9.12 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 9.13 Waiver of Jury Trial. Each of the Account Parties, the
Agents and the Banks irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to any of the Loan Documents, the
Advances or the actions of any Agent or any Bank in the negotiation,
administration, performance or enforcement thereof.
SECTION 9.14 Disclosure of Information. Each Account Party agrees and
consents to the Administrative Agent's and the Arranger's disclosure of
information relating to this transaction to Gold Sheets and other similar bank
trade publications. Such information will consist of deal terms and other
information customarily found in such publications. The Parent shall have the
right to review and approve any such disclosure made by the Administrative
Agent or the Arranger before such disclosure is made (such approval not to be
unreasonably withheld).
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
ACE LIMITED
The Common Seal of ACE Limited was hereunto
affixed in the presence of:
--------------------------------------------
Director
--------------------------------------------
Secretary
ACE BERMUDA INSURANCE LTD.
The Common Seal of ACE Bermuda Insurance Ltd.
was hereunto affixed in the presence of:
--------------------------------------------
Director
--------------------------------------------
Secretary
ACE TEMPEST REINSURANCE LTD.
The Common Seal of ACE Tempest Reinsurance
Ltd. was hereunto affixed in the presence of:
--------------------------------------------
Director
--------------------------------------------
Secretary
Address for each Account Party:
ACE Global Headquarters
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx XX00 Xxxxxxx
Telecopy: (000) 000-0000
(signatures continued)
S-1
WACHOVIA BANK, NATIONAL
ASSOCIATION, as Administrative Agent, as
Issuing Bank and as an Initial Bank
By: _________________________________________
Title: ______________________________________
JPMORGAN CHASE BANK, as Syndication
Agent and as an Initial Bank
By: _________________________________________
Title: ______________________________________
BANK OF AMERICA, N.A. as Syndication Agent
and as an Initial Bank
By: _________________________________________
Title: ______________________________________
THE BANK OF NOVA SCOTIA, as
Documentation Agent and as an Initial Bank
By: _________________________________________
Title: ______________________________________
DEUTSCHE BANK, AG, NEW YORK BRANCH
as Documentation Agent and as an Initial Bank
By: _________________________________________
Title: ______________________________________
(signatures continued)
X-0
XXXXXX XXXX, N.A., as Issuing Bank and as
an Initial Bank
By: _________________________________________
Title: ______________________________________
NATIONAL AUSTRALIA BANK LIMITED, as an
Initial Bank
By: _________________________________________
Title: ______________________________________
FLEET NATIONAL BANK, as an Initial Bank
By: _________________________________________
Title: ______________________________________
ROYAL BANK OF CANADA , as an Initial Bank
By: _________________________________________
Title: ______________________________________
BARCLAYS BANK PLC, as an Initial Bank
By: _________________________________________
Title: ______________________________________
(signatures continued)
S-3
COMERICA BANK, as an Initial Bank
By: _________________________________________
Title: ______________________________________
STATE STREET BANK AND TRUST
COMPANY, as an Initial Bank
By: _________________________________________
Title: ______________________________________
ABN AMRO BANK, N.V., as an Initial Bank
By: _________________________________________
Title: ______________________________________
HSBC BANK USA, as an Initial Bank
By: _________________________________________
Title: ______________________________________
BANK ONE, N.A., as an Initial Bank
By: _________________________________________
Title: ______________________________________
(signatures continued)
S-4
THE BANK OF BERMUDA LIMITED, as an
Initial Bank
By: _________________________________________
Title: ______________________________________
THE BANK OF N.T. XXXXXXXXXXX & SON
LIMITED, as an Initial Bank
By: _________________________________________
Title: ______________________________________
S-5
SCHEDULE I
LC COMMITMENT AMOUNTS
----------------------
Wachovia Bank, National Association $40,000,000
JPMorgan Chase Bank 37,500,000
Bank of America, N.A. 37,500,000
The Bank of Nova Scotia 37,500,000
Deutsche Bank AG, New York Branch 37,500,000
National Australia Bank Limited 35,000,000
Fleet National Bank 35,000,000
Royal Bank of Canada 30,000,000
Barclays Bank PLC 30,000,000
Comercia Bank 30,000,000
State Street Bank and Trust Company 30,000,000
Mellon Bank, N.A. 20,000,000
ABN AMRO Bank, N.V. 20,000,000
HSBC Bank USA 20,000,000
Bank One, N.A. 20,000,000
The Bank of Bermuda Limited 20,000,000
The Bank of N.T. Xxxxxxxxxxx & Son Limited 20,000,000
Total $500,000,000.00
===============
SCHEDULE I - Part 2
DOMESTIC LENDING OFFICES
-------------------------
--------------------------------------------------------------------------------
Wachovia Bank, National Association Financial Institutions Group
0000 Xxxxxxxx Xxxxxx, XX 4819
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx XxXxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
--------------------------------------------------------------------------------
JPMorgan Chase Bank Financial Institutions Group
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
--------------------------------------------------------------------------------
Bank of America, N.A. 000 X. XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
--------------------------------------------------------------------------------
The Bank of Nova Scotia Xxx Xxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
--------------------------------------------------------------------------------
Deutsche Bank AG, New York Branch 00 Xxxx 00xx Xxxxxx Mail Stop NYC01-2402
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
--------------------------------------------------------------------------------
National Australia Bank Limited 000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
` Attn: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
--------------------------------------------------------------------------------
Mellon Bank, N.A. One Mellon Center, Room 4401
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
--------------------------------------------------------------------------------
Fleet National Bank 000 Xxxx Xxxxxx
Mail Stop CTEH40225C
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
--------------------------------------------------------------------------------
Royal Bank of Canada Xxx Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Manager, Trade Products
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
--------------------------------------------------------------------------------
2
--------------------------------------------------------------------------------
with a copy of notices to:
Royal Bank of Canada
Xxx Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxx Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
--------------------------------------------------------------------------------
Xxxxxxxx Xxxx XXX X.X. Xxx 000
0xx Xxxxx
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX Xxxxxxx
Attn: Xxxx Xxxxxx
Telephone: 00 (0) 00 0000 0000
Telecopy: 00 (0) 00 0000 0000
Copies to:
Barclays Xxxxxxx
XXX, 0 Xxxxx Xxxxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX Xxxxxxx
Attn: Graham Smart
Telephone: 00 (0) 00 0000 0000
Telecopy: 00 (0) 00 0000 0000
--------------------------------------------------------------------------------
Comerica Bank 000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
--------------------------------------------------------------------------------
State Street Bank and Trust Company Domestic Lending Office:
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Address for notices:
Lafayette Corporate Center
0 Xxxxxx xx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, VP
Telephone: (000) 000-0000
--------------------------------------------------------------------------------
Telecopy: (000) 000-0000
--------------------------------------------------------------------------------
ABN AMRO Bank, N.V. 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Credit Administration
Telecopy: (000) 000-0000
--------------------------------------------------------------------------------
HSBC Bank USA 000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
--------------------------------------------------------------------------------
Bank One, N.A. 1 Bank Xxx Xxxxx, Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
--------------------------------------------------------------------------------
The Bank of Bermuda Limited 0 Xxxxx Xxxxxx
Xxxxxxxx XX 11
Xxxxxxxx XX DX, Bermuda
Attn: A. Xxxxx Xxxxxxx, VP-Credit Manager
(North America)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
--------------------------------------------------------------------------------
The Bank of N.T. Xxxxxxxxxxx 00 Xxxxx Xxxxxx
& Son Limited Xxxxxxxx XX DX, Bermuda
Attn: Xxxxxxxx Xxxxxx,
VP-Corporate Banking
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
--------------------------------------------------------------------------------
3
SCHEDULE II
EXISTING WACHOVIA LETTERS OF CREDIT
[attached hereto]
SCHEDULE III
EXISTING MELLON LETTER OF CREDIT
--------------------------------
[attached hereto]
SCHEDULE IV
REPLACEMENT LETTER OF CREDIT
----------------------------
[attached hereto]
SCHEDULE 4.01(B)
Subsidiaries
[attached hereto]
SCHEDULE 5.02(A)
Liens
[attached hereto]
EXHIBIT A
Assignment and Acceptance
ASSIGNMENT AND ACCEPTANCE dated as of ____________, 20___ between
________________________ (the "Assignor") and ________________________ (the
"Assignee"), and [consented to and] accepted by Wachovia Bank, National
Association, as administrative agent (the "Administrative Agent")[, and ACE
Limited (the "Parent")].
W I T N E S S E T H
WHEREAS, this Assignment and Acceptance (the "Agreement") relates to
the Reimbursement Agreement dated as of September 30, 2002 among the Parent
and other Account Parties party thereto, the Assignor and the other Banks
party thereto, the Syndication Agents party thereto, the Documentation Agents
party thereto and the Administrative Agent (as amended or otherwise modified
from time to time, the "Reimbursement Agreement");
WHEREAS, as provided under the Reimbursement Agreement, the Assignor
has a commitment to participate in Letters of Credit and make Letter of Credit
Advances to the Account Parties in an aggregate principal amount at any time
outstanding not to exceed $---------------;
WHEREAS, Letters of Credit with a total amount available for drawing
thereunder of $_______________ are outstanding at the date hereof;
WHEREAS, Letter of Credit Advances made to the Account Parties by the
Assignor under the Reimbursement Agreement in the aggregate principal amount
of $___________ are outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Reimbursement Agreement and the other Loan
Documents in respect of a portion of its LC Commitment Amount thereunder in an
amount equal to $____________ (the "Assigned Amount"), together with a
corresponding portion of its outstanding Letter of Credit Participating
Interest, Letter of Credit Participating Interest Commitment, LC Participation
Obligations, Letter of Credit Exposure, and Letter of Credit Advances, if any,
and the Assignee proposes to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. Definitions. All capitalized terms not otherwise defined herein
shall have the respective meanings set forth in the Reimbursement Agreement.
2. Assignment. The Assignor hereby assigns and sells to the Assignee
all of the rights of the Assignor under the Reimbursement Agreement and the
other Loan Documents to the extent of the Assigned Amount, and the Assignee
hereby accepts such assignment from the Assignor and assumes all of the
obligations of the Assignor under the Reimbursement Agreement to the extent of
the Assigned Amount, including the outstanding Letter of Credit Participating
Interest Commitment and Letter of Credit Exposure, and the amount of the
Letter of Credit Advances, if any, outstanding at the date hereof. Upon the
execution and delivery hereof by the Assignor, the Assignee[, the
Administrative Agent and the Parent] and the payment of the amounts specified
in Section 3 required to be paid on the date hereof (i) the Assignee shall, as
of the date hereof, succeed to the rights and be obligated to perform the
obligations of a Bank under the Reimbursement Agreement with an LC Commitment
Amount (in addition to any LC Commitment Amount theretofore held by it) equal
to the Assigned Amount, and (ii) the LC Commitment Amount of the Assignor
shall, as of the date hereof, be reduced by a like amount and the Assignor
shall be released from its obligations under the Reimbursement Agreement to
the extent such obligations have been assumed by the Assignee. The assignment
provided for herein shall be without recourse to the Assignor.
3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on
the date hereof the amount heretofore agreed between them.1 It is understood
that commitment and Letter of Credit fees accrued to the date hereof in
respect of the Assigned Amount are for the account of the Assignor and such
fees accruing from and including the date hereof are for the account of the
Assignee. Each of the Assignor and the Assignee hereby agrees that if it
receives any amount under the Reimbursement Agreement which is for the account
of the other party hereto, it shall receive the same for the account of such
other party to the extent of such other party's interest therein and shall
promptly pay the same to such other party.
4. [Consent of the Administrative Agent and the Parent. Pursuant to
the Reimbursement Agreement, this Agreement is conditioned upon the consent of
the Administrative Agent and, so long as no Default has occurred and is
continuing, the Parent. The execution of this Agreement by the Administrative
Agent and, if applicable, the Parent is evidence of this consent.]
5. Non-Reliance on Assignor. The Assignor makes no representation or
warranty in connection with, and shall have no responsibility with respect to,
the solvency, financial condition or statements of the Account Parties or any
of their respective Subsidiaries, or the validity and enforceability of the
obligations of the Account Parties or any of their respective Subsidiaries in
respect of any Loan Document. The Assignee acknowledges that it has,
independently and without reliance on the Assignor, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business, affairs
and financial condition of the Account Parties and their respective
Subsidiaries.
-------------------
1/ Amount should combine the principal amount of any Letter of Credit
Advances made by the Assignor together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be
preferable in an appropriate case to specify these amounts generically or
by formula rather than as a fixed sum.
2
6. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
[Remainder of page intentionally left blank.]
3
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By: ________________________________
Title: ________________________________
[ASSIGNEE]
By: ________________________________
Title: ________________________________
[ACE LIMITED
By: ________________________________
Title: ________________________________
WACHOVIA BANK, NATIONAL
ASSOCIATION, as Administrative Agent
By: ________________________________
Title: ________________________________]
4
EXHIBIT B
Replacement Letter of Credit Language
This Letter of Credit is issued in replacement of and substitution for
Letter of Credit No. ____________ issued by Mellon Bank, N.A. in your favor
(the "Mellon Letter of Credit"). Upon your receipt of this Letter of
Credit, you are requested to send the Mellon Letter of Credit, with
authorization for cancellation, to the following address:
Mellon Bank, N.A.
Xxx Xxxxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxx /2
This Letter of Credit is not presently operative for drawing and shall
become operative for drawing only and immediately upon your receipt of a
writing from us (which we agree to send to you upon our receipt of a
writing from Mellon Bank, N.A. in form and substance satisfactory to us
confirming that the Mellon Letter of Credit has been validly cancelled),
sent to you at your address set forth above, reading as follows:
"Letter of Credit No. __________ issued by the
undersigned in the amount of US $_____________
is now operative for drawing."
------------------
/2 Address subject to change.
