Exhibit 10.2
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REIMBURSEMENT AGREEMENT
among
ACE LIMITED
ACE BERMUDA INSURANCE LTD.
ACE TEMPEST REINSURANCE LTD.,
as Account Parties,
THE BANKS NAMED HEREIN,
FLEET NATIONAL BANK,
as Documentation Agent,
and
FIRST UNION NATIONAL BANK,
as Issuing Bank and as Administrative Agent
$450,000,000 Letter of Credit Facility
FIRST UNION SECURITIES, INC.
Sole Book Runner and Lead Arranger
Dated as of August 24, 2001
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Table of Contents
Page
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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, Reduction or Increase of the LC Commitment
Amounts......................................................23
SECTION 2.05 Fees.........................................................24
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.....................................30
SECTION 2.11 Defaulting Banks.............................................30
SECTION 2.12 Replacement of Affected Bank.................................32
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.......................34
SECTION 2.15 Downgrade Event or Other Event with Respect to the
Issuing Bank.................................................35
SECTION 2.16 Non-Dollar Letters of Credit.................................36
SECTION 2.17 Extensions of Expiration Date................................38
SECTION 2.18 Tranches.....................................................38
SECTION 2.19 Future Amendment to Provide Collateral.......................41
ARTICLE III
CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01 Conditions Precedent to Effective Date.......................41
SECTION 3.02 Conditions Precedent to Each Issuance, Extension or Increase
of a Letter of Credit........................................43
SECTION 3.03 Determinations Under Section 3.01............................44
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of the Account Parties........44
ARTICLE V
COVENANTS OF THE ACCOUNT PARTIES
SECTION 5.01 Affirmative Covenants........................................48
SECTION 5.02 Negative Covenants...........................................49
SECTION 5.03 Reporting Requirements.......................................53
SECTION 5.04 Financial Covenants..........................................56
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01 Events of Default............................................56
SECTION 6.02 Actions in Respect of the Letters of Credit upon Default.....58
ARTICLE VII
THE GUARANTY
SECTION 7.01 The Guaranty.................................................59
SECTION 7.02 Guaranty Unconditional.......................................59
SECTION 7.03 Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances........................................60
SECTION 7.04 Waiver by the Account Parties................................60
SECTION 7.05 Subrogation..................................................60
SECTION 7.06 Stay of Acceleration.........................................61
SECTION 7.07 Continuing Guaranty; Assignments.............................61
ARTICLE VIII
THE AGENTS
SECTION 8.01 Authorization and Action.....................................62
SECTION 8.02 Agents' Reliance, Etc........................................62
SECTION 8.03 First Union and Affiliates...................................62
SECTION 8.04 Bank Credit Decision.........................................63
SECTION 8.05 Indemnification..............................................63
SECTION 8.06 Successor Administrative Agent...............................63
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Amendments, Etc..............................................64
SECTION 9.02 Notices, Etc.................................................65
SECTION 9.03 No Waiver; Remedies..........................................65
SECTION 9.04 Costs and Expenses...........................................65
SECTION 9.05 Right of Set-off.............................................66
SECTION 9.06 Binding Effect...............................................67
SECTION 9.07 Assignments and Participations...............................67
SECTION 9.08 Execution in Counterparts....................................70
SECTION 9.09 No Liability of the Issuing Bank.............................70
SECTION 9.10 Confidentiality..............................................70
SECTION 9.11 Jurisdiction, Etc............................................71
SECTION 9.12 Governing Law................................................71
SECTION 9.13 Waiver of Jury Trial.........................................71
SECTION 9.14 Disclosure of Information....................................71
Schedule I LC Commitment Amounts
Schedule I - Part 2 Domestic Lending Offices
Schedule II Existing Letters of Credit
Schedule 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 Xxxxx, Xxxxx & Xxxxx
Exhibit C-3 Form of Opinion of Xxxxxxx, Xxxx & Xxxxxxx
ii
REIMBURSEMENT AGREEMENT
REIMBURSEMENT AGREEMENT dated as of August 24, 2001, 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"), First
Union National Bank ("First Union"), as Issuing Bank (as hereinafter
defined), Fleet National Bank ("Fleet"), as documentation agent (Fleet,
together with any successor documentation agent appointed pursuant to
Article VIII, the "Documentation Agent"), and First Union, as
administrative agent (together with any successor administrative agent
appointed pursuant to Article VIII, the "Administrative Agent" and,
together with the Documentation Agent, 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 $450,000,000 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 First Union
Xxxxxxxx Xxxx, 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.
"Agent" 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 First Union 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
each 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 corresponding Existing Letter
of Credit at such time). At all times after the Initial Availability Time,
the Available Amount of such Replacement Letter of Credit shall be
determined as provided in this definition without regard to the foregoing
proviso.
"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 2.04(b) or 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 First Union in Charlotte, North
Carolina from time to time, as First Union'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 Charlotte, North Carolina.
"Capitalized Leases" means all leases that have been or should be,
in accordance with GAAP, recorded as capitalized leases.
4
"Change of Control" means the occurrence of any of the following:
(a) any Person or two or more Persons acting in concert shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the Securities
and Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly, of Voting Interests of the Parent (or other
securities convertible into such Voting Interests) representing 30% or more
of the combined voting power of all Voting Interests of the Parent; or (b)
a majority of the board of directors of the Parent shall not be Continuing
Members; or (c) any Person or two or more Persons acting in concert shall
have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that results in its or their acquisition of the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of the Parent.
"Commitment Amount" means an LC Commitment Amount or the Letter of
Credit Issuance Commitment Amount.
"Commitment Banks" has the meaning specified in Section 2.18(a).
"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
5
recourse or sale with recourse by such Person of the obligation of a
primary obligor, (b) the obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party or
parties to an agreement or (c) any obligation of such Person, whether or
not contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation
or (B) to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary obligor,
(iii) to purchase property, assets, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation
or (iv) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof; provided, however, that
Contingent Obligations shall not include any obligations of any such Person
arising under insurance contracts entered into in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation
in respect of which such Contingent Obligation is made (or, if less, the
maximum amount of such primary obligation for which such Person may be
liable pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required
to perform thereunder), as determined by such Person in good faith.
"Continuing Member" means a member of the Board of Directors of
the Parent who either (i) was a member of the Parent's Board of Directors
on the date of execution and delivery of this Agreement by the Parent and
has been such continuously thereafter or (ii) became a member of such Board
of Directors after such date and whose election or nomination for election
was approved by a vote of the majority of the Continuing Members then
members of the Parent's Board of Directors.
"Conversion to Tranche System" has the meaning specified in
Section 2.18(a).
"Current Expiration Date" has the meaning specified in Section
2.17.
"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
6
credit or similar facilities, (g) all obligations of such Person to
purchase, redeem, retire, defease or otherwise make any payment in respect
of any Equity Interests (except for obligations to pay for Equity Interests
within customary settlement periods) in such Person or any other Person or
any warrants, rights or options to acquire such capital stock (excluding
payments under a contract for the forward sale of ordinary shares of such
Person issued in a public offering), valued, in the case of Redeemable
Preferred Interests, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends, (h) all
Contingent Obligations of such Person in respect of Debt (of the types
described above) of any other Person and (i) all indebtedness and other
payment obligations referred to in clauses (a) through (h) above of another
Person secured by (or for which the holder of such Debt has an existing
right, contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the
payment of such indebtedness or other payment obligations; provided,
however, that the amount of Debt of such Person under clause (i) above
shall, if such Person has not assumed or otherwise become liable for any
such Debt, be limited to the lesser of the principal amount of such Debt or
the fair market value of all property of such Person securing such Debt;
provided further that "Debt" shall not include obligations in respect of
insurance or reinsurance contracts entered into in the ordinary course of
business; provided further that, solely for purposes of Section 5.04 and
the definitions of "Adjusted Consolidated Debt" and "Total Capitalization",
"Debt" shall not include (x) any contingent obligations of any Person under
or in connection with acceptance, letter of credit or similar facilities or
(y) obligations of the Parent or ACE INA under any Debentures or under any
subordinated guaranty of any Preferred Securities or obligations of a
Special Purpose Trust under any Preferred Securities.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
"Defaulted Amount" means, with respect to any Bank at any time,
any amount required to be paid by such Bank to any Agent or any other Bank
hereunder or under any other Loan Document at or prior to such time that
has not been so paid as of such time, including, without limitation, any
amount required to be paid by such Bank to (a) the Issuing Bank pursuant to
Section 2.02(e) to purchase a portion of a Letter of Credit Advance made by
the Issuing Bank and (b) any Agent or the Issuing Bank pursuant to Section
8.05 to reimburse such Agent or the Issuing Bank for such Bank's ratable
share of any amount required to be paid by the Banks to such Agent or the
Issuing Bank as provided therein.
"Defaulting Bank" means, at any time, any Bank that, at such time,
(a) owes a Defaulted Amount or (b) shall take any action or be the subject
of any action or proceeding of a type described in Section 6.01(f).
"Documentation Agent" 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).
7
"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 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.
"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 approval
of the Parent 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.
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"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV
of ERISA is a member of the controlled group of any Loan Party, or under
common control with any Loan Party, within the meaning of Section 414 of
the Internal Revenue Code or Section 4001 of ERISA.
"Events of Default" has the meaning specified in Section 6.01.
"Existing Letters of Credit" means the letters of credit issued by
Mellon pursuant to the Mellon Reimbursement Agreement and outstanding on
the Effective Date, which letters of credit are listed on Schedule II
hereto.
"Expiration Date" shall mean August 23, 2002, as such date may be
extended in accordance with Section 2.17 hereof.
"Extension Request" has the meaning specified in Section 2.17.
"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 July 11, 2001 among the
Parent, First Union and the Arranger, as amended.
"First Union" has the meaning specified in the recital of parties
to this Agreement.
"Fiscal Year" means the fiscal year of the Parent and its
Consolidated Subsidiaries ending on December 31 in any calendar year.
"Fleet" has the meaning specified in the recital of parties to
this Agreement.
"Foreign Government Scheme or Arrangement" has the meaning
specified in Section 4.01(n)(iv).
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"Foreign Plan" has the meaning specified in Section 4.01(n)(iv).
"GAAP" has the meaning specified in Section 1.03.
"Guaranty" means the undertaking by each of the Account Parties
under Article VII.
"Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and
(b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other hedging
agreements.
"Increase Request" has the meaning specified in Section 2.04(b).
"Indemnified Party" has the meaning specified in Section 9.04(b).
"Initial Availability Time" means, with respect to any 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 such 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.
10
"Issuing Bank" means (i) Mellon (solely with respect to the
Existing Letters of Credit), (ii) First Union (with respect to all other
Letters of Credit), and (iii) any "New Issuing Bank" appointed in
accordance with Section 2.15.
"Judgment Currency" has the meaning specified in Section 2.16(g).
"LC Commitment Amount" means, with respect to any Bank at any
time, the amount set forth opposite such Bank's name on Schedule I hereto
under the caption "LC Commitment Amount" or, if such Bank has entered into
one or more Assignment and Acceptances or a joinder to this Agreement
pursuant to Section 2.04(b), 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 or increased
at or prior to such time pursuant to Section 2.04. If the Conversion to
Tranche System shall have occurred, the LC Commitment Amount of a Bank
which is not a Commitment Bank will also be reduced, in the event of a
reduction of the Available Amount under (except, for so long as a drawing
is not reimbursed, as a result of a drawing under) any Letter of Credit
(including upon expiration or termination thereof) with respect to which
such Bank has a funding obligation (or with respect to which such Bank
would have had a funding obligation if a drawing had occurred prior to such
expiration or termination), by an amount equal to such reduction.
"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).
"L/C Termination Date" has the meaning specified in Section
2.18(a).
"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.
11
"Letter of Credit Issuance Commitment Amount" means at any time
the lesser of (a) $450,000,000 (or such lesser amount as may be agreed in
writing among the Account Parties, the Administrative Agent and the Issuing
Bank, or such greater amount as may be established pursuant to the
commitment increase provisions of Section 2.04(b)) 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.
"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.
12
"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).
"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).
"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.
13
"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" has the meaning specified in Section 2.18.
"Pro Rata Share" means, for any Bank, its share determined Pro
Rata, in accordance with the definition of the term "Pro Rata" in Section
2.18(a) hereof.
"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
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.
14
"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 a Letter of Credit issued by
the Issuing Bank in replacement of and substitution for an Existing Letter
of Credit and including language substantially as set forth on Exhibit B
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.
"Required Commitment Banks" has the meaning specified in Section
2.18(a).
"Responsible Officer" means the Chairman, Chief Executive Officer,
President, Chief Financial Officer, Chief Accounting Officer or Treasurer
of the Parent.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"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.
15
"Special Expiration Date" has the meaning specified in Section
2.18(a).
"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).
"Supplement to Tranche System" has the meaning specified in
Section 2.18(a).
"Taxes" has the meaning specified in Section 2.08(a).
"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.
"Tranche 1 Bank" and other defined terms beginning with the word
"Tranche" have the respective meanings specified in Section 2.18(a).
"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.
16
"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).
If the Conversion to Tranche System shall have occurred, the Unused LC
Commitment Amount of any Bank which is not a Commitment Bank shall be zero.
"Voting Interests" means shares of capital stock issued by a
corporation, or equivalent Equity Interests in any other Person, the
holders of which are ordinarily, in the absence of contingencies, entitled
to vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been suspended
by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of any Loan Party or in respect of
which any Loan Party could have liability.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02 Computation of Time Periods; Other Definitional Provisions. In
this Agreement and the other Loan Documents in the computation of periods
of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding". References in the Loan Documents to any agreement or contract
"as amended" shall mean and be a reference to such agreement or contract as
amended, amended and restated, supplemented or otherwise modified from time
to time in accordance with its terms.
SECTION 1.03 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted,
all accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from
time to time ("GAAP"), applied on a basis consistent (except for changes
concurred in by the Parent's independent public accountants) with the most
recent audited consolidated financial statements of the Parent and its
Subsidiaries delivered to the 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.
17
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 Letters of Credit) to
maintain the Existing Letters of Credit as Letters 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 unless the Issuing Bank
notifies the beneficiary thereof of its election not to renew such Letter
of Credit. The Issuing Bank shall have no obligation to issue any letter of
credit which is unsatisfactory in form, substance or beneficiary to the
Issuing Bank in the exercise of its reasonable judgment consistent with its
customary practice. Letters of Credit may be issued for the account of any
Subsidiary of the Parent that is not an Account Party hereunder, provided
that the Parent shall be a joint applicant and account party with respect
to any such Letter of Credit. By their execution of this Agreement, the
Banks party hereto as of the Effective Date that are also party to the
Mellon Reimbursement Agreement as "Banks" thereunder hereby waive, in their
capacity as the "Required Banks" under the Mellon Reimbursement Agreement,
the requirement of three Business Days' prior written notice for the
termination of the LC Commitment Amounts (as defined in the Mellon
Reimbursement Agreement) pursuant to Section 2.04 thereof, and agree that
such notice may be given on the Effective Date of this Agreement.
18
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
(which, for purposes of a request for a Replacement Letter of
Credit, shall be specified without regard to the proviso contained
in the definition of "Available Amount"), 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 such notice, notify
the Banks of such proposed Letter of Credit (which notice shall specify the
Available Amount (in the case of a Replacement Letter of Credit, without
regard to the proviso contained in the definition of "Available Amount")
and term of such proposed Letter of Credit) or such proposed renewal of a
Letter of Credit (which notice shall specify the term of such renewal), and
shall determine, as of 11:00 A.M. (Charlotte, North Carolina time) on the
Business Day immediately preceding such proposed issuance, whether such
proposed Letter of Credit complies with the limitations set forth in
Section 2.01 hereof. If such limitations set forth in Section 2.01 are not
satisfied or if the Required Banks have given notice to the Administrative
Agent to cease issuing or renewing Letters of Credit as contemplated by
this Agreement, the Administrative Agent shall immediately notify the
Issuing Bank (in writing or by telephone immediately confirmed in writing)
that the Issuing Bank is not authorized to issue or renew, as the case may
be, such Letter of Credit. If the Issuing Bank issues or renews a Letter of
Credit, it shall deliver the original of such Letter of Credit to the
beneficiary thereof or as the Applicable Account Party shall otherwise
direct, and shall promptly notify the Administrative Agent thereof and
furnish a copy thereof to the Administrative Agent. The Issuing Bank may
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.
19
(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 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.
Notwithstanding anything in this Section 2.01 or elsewhere in this
Agreement to the contrary, (x) no Account Party will request that any
Existing 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 Letters
of Credit, provide timely notice of non-renewal to the beneficiaries
thereof with respect to each Existing Letter of Credit that has automatic
renewal provisions (to the extent any such Existing Letter of Credit
remains outstanding up until the deadline for notice of non-renewal), and
(y) all Letters of Credit issued under this Agreement (excluding the
Existing Letters of Credit, but including any Replacement Letters of Credit
and any other Letters of Credit issued in replacement of or in substitution
for the Existing Letters of Credit) shall be issued by First Union (or any
New Issuing Bank, as the case may be) in its capacity as Issuing Bank.
Solely with respect to the Existing Letters of Credit and any Letter of
Credit Agreements delivered in connection therewith, Mellon (in its
capacity as issuer of the Existing Letters 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
20
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 a
Replacement Letter of Credit unless the related Existing 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
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.
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(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 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 and expiration dates of Letters of
Credit issued 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.
(h) Replacement Letters of Credit. With respect to any Replacement Letter
of Credit, First Union (in its capacity as Issuing Bank) will deliver to
the beneficiary thereof the written confirmation that such 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 First Union, that the corresponding
Existing 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, 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.
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(ii) The obligation of each Account Party to reimburse the
Issuing Bank for any payment made by the Issuing Bank under any
Letter of Credit, and the obligation of each Bank under Section
2.02(e) with respect thereto, shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement, the applicable Letter of Credit Agreement
and any other applicable agreement or instrument under all
circumstances, including, without limitation, the following
circumstances:
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of
Credit or any other agreement or instrument relating
thereto (all of the foregoing being, collectively, the
"L/C Related Documents");
(B) any change in the time, manner or place of payment
of, or in any other term of, all or any of the obligations of
any Account Party or any other Person in respect of any
L/C Related Document or any other amendment or waiver of
or any consent to departure from all or any of the L/C
Related Documents;
(C) the existence of any claim, set-off, defense or
other right that any Account Party or any other Person may
have at any time against any beneficiary or any transferee of
a Letter of Credit (or any Persons for which any such
beneficiary or any such transferee may be acting), the
Issuing Bank or any other Person, whether in connection
with the transactions contemplated by the L/C Related
Documents or any unrelated transaction;
(D) any statement or any other document presented
under a Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(E) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or certificate that
does not strictly comply with the terms of such Letter of
Credit;
(F) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or
consent to departure from the Guaranty or any other
guarantee, for all or any of the obligations of any
Account Party or any other Person in respect of the L/C
Related Documents; or
(G) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including,
without limitation, any other circumstance that might
otherwise constitute a defense available to, or a
discharge of, any Account Party or a guarantor.
23
(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, Reduction or Increase of the LC Commitment
Amounts.
(a) 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.
(b) The Parent may, on one occasion at any time prior to the initial
Expiration Date, make a written request (an "Increase Request") to the
Administrative Agent that the aggregate LC Commitment Amounts of the Banks
be increased by an amount of up to $25,000,000. Such Increase Request shall
include a certification by the Chief Financial Officer of the Parent as to
the matters described in clauses (i) and (ii) of Section 3.02(a), and the
continued accuracy of such certification as of the effective date of the
requested increase shall be a condition to its effectiveness. Upon its
receipt of the Increase Request, the Administrative Agent, in consultation
with the Parent, shall determine how best to increase the aggregate LC
Commitment Amounts as requested, which may include, without limitation,
solicitation of additional commitments from existing Banks (with any
additional commitment by an existing Bank being made in such Bank's sole
discretion), solicitation of one or more new Banks (each of which shall be
an Eligible Assignee), or a combination thereof; provided that the Parent
shall have the right to effect the Increase Request by designating one or
more new Banks (each of which shall be an Eligible Assignee approved by the
Administrative Agent). Any such new Bank that agrees to provide an LC
Commitment Amount shall become a party to this Agreement by executing and
delivering a counterpart hereof or a joinder hereto in form and substance
satisfactory to the Administrative Agent. Promptly after any increase in
the LC Commitment Amounts is effective, the Administrative Agent shall
notify the Banks in writing of such increase and the respective LC
Commitment Amounts of the Banks after giving effect thereto. In the event
any Letter of Credit Advances are outstanding as of the Increase Date, the
Banks shall (through the Administrative Agent) make proportionate
adjustments among themselves in order to reallocate such Letter of Credit
Advances in accordance with their respective LC Commitment Amounts after
giving effect to the increases therein.
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SECTION 2.05 Fees.
(a) Commitment Fee. The Account Parties jointly and severally agree to
pay to the Administrative Agent for the account of the Banks a commitment fee,
from the Effective Date in the case of each Initial Bank and from the
effective date specified in the Assignment and Acceptance pursuant to which
it became a Bank in the case of each other Bank until the Expiration Date,
payable in arrears quarterly on the last Business Day of each March, June,
September and December 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 a 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 calendar quarter commencing September 28, 2001, on the
date of the earliest to occur of the full drawing, expiration,
termination or cancellation of any Letter of Credit, 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 a
Replacement Letter of Credit has a positive Available Amount prior to
the Initial Availability Time, such 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, no
Replacement Letter of Credit shall be deemed issued and outstanding
until the Initial Availability Time. With respect to the Existing
Letters 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) as if the Existing Letters of Credit were
issued hereunder on the Effective Date.
25
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 (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
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.
26
(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 First Union's prime rate shall be made by the
Administrative Agent on the basis of a year of 365 or, if applicable, 366
days; all other computations of interest, fees and Letter of Credit
commissions shall be made by the Administrative Agent on the basis of a
year of 360 days. All such computations shall be made for the actual number
of days (including the first day but excluding the last day) occurring in
the period for which such interest, fees or commissions are payable. Each
determination by the Administrative Agent of an interest rate, fee or
commission hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(d) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in
the computation of payment of interest or fee, as the case may be.
27
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
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.
28
(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
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.
29
(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.
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(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 or the Administrative Agent shall, to the fullest
extent permitted by applicable law, hold in escrow such amount otherwise
held by it. Any funds held by the Administrative Agent in escrow under this
subsection (b) shall be deposited by the Administrative Agent in an account
with First Union 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
First Union'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.
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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.
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 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 as specifically set forth in
Section 9.09. The Issuing Bank shall not be under any obligation to
ascertain, inquire or give any notice to any Agent or any 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.
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(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,
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.
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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:
(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 shall be used only in accordance with the following
provisions of this Section 2.14.
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(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 to fund such participation. The deposit of
funds in a Downgrade Account by any Downgraded Bank shall not constitute a
Letter of Credit Advance (and the Downgraded Bank shall not be entitled to
interest on such funds except as provided in clause (c) below) unless and
until (and then only to the extent that) such funds 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 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.
(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
to return to the Old Issuing Bank for cancellation) each letter of credit
issued by the Old Issuing Bank.
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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), 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
day of each calendar month and (4) each day on which the LC Commitment
Amounts are to be reduced pursuant to Section 2.04(a) (it being understood
that no requested reduction shall be permitted to the extent that, after
making a calculation pursuant this clause (e), such reduction would be
greater than the unused portion of the LC Commitment Amounts).
(f) If, on the last day of any calendar month, the sum of the principal
amount of all Advances plus the Available Amount of all Letters of Credit
(valuing the Available Amount of, and Letter of Credit Advances in respect
of, any Non-Dollar Letter of Credit at the Dollar Equivalent thereof as of
such day) would exceed the amount of the Committed Facility, then the
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.
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(g) If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due in respect of any Non-Dollar Letter of
Credit in one currency into another currency, the rate of exchange used
shall be that at which in accordance with its normal banking procedures the
Issuing Bank could purchase the first currency with such other currency on
the Letter of Credit Business Day preceding that on which final judgment is
given. The obligation of any Account Party in respect of any such sum due
from it to the Issuing Bank or any Bank hereunder shall, notwithstanding
any judgment in a currency (the "Judgment Currency") other than that in
which such sum is denominated in accordance with the applicable provisions
of this Agreement and the applicable Non-Dollar Letter of Credit (the
"Agreement Currency"), be discharged only to the extent that on the Letter
of Credit Business Day following receipt by the Issuing Bank or such Bank
of any sum adjudged to be so due in the Judgment Currency, the Issuing Bank
or such Bank may in accordance with normal banking procedures purchase the
Agreement Currency with the Judgment Currency. If the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Issuing Bank or such Bank in the Agreement Currency, the Applicable Account
Party agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify the Issuing Bank or such Bank, as applicable,
against such loss. If the amount of the Agreement Currency so purchased is
greater than the sum originally due to the Issuing Bank or such Bank in
such currency, the Issuing Bank and each Bank agrees to return the amount
of any excess to the Applicable Account Party (or to any other Person who
may be entitled thereto under applicable law).
(h) For purposes of this Section, "Dollar Equivalent" means, in
relation to an amount denominated in a currency other than U.S. dollars, the
amount of U.S. dollars which could be purchased with such amount by the Issuing
Bank in accordance with its customary procedures (and giving effect to any
transaction costs) at the quoted foreign exchange spot rate of the Issuing
Bank at the time of determination; and "Overnight Rate" means, for any day,
the rate of interest per annum at which overnight deposits in the
applicable currency, in an amount approximately equal to the amount with
respect to which such rate is being determined, would be offered for such
day by the Issuing Bank to major banks in the London or other applicable
offshore interbank market. The Overnight Rate for any day which is not a
Letter of Credit Business Day (or on which dealings are not carried on in
the applicable offshore interbank market) shall be the Overnight Rate for
the immediately preceding Letter of Credit Business Day.
SECTION 2.17 Extensions of Expiration Date. The Parent may, at its
option, give the Administrative Agent and the Issuing Bank written notice (an
"Extension Request") at any time not more than sixty days, nor less than
thirty days, prior to the Expiration Date in effect at such time (the
"Current Expiration Date") of the Parent's desire to extend the Expiration
Date to a date which is not later than 364 days after the Current
Expiration Date. The Administrative Agent shall promptly inform the Banks
of such Extension Request. Each Bank which agrees to such Extension Request
shall deliver to the Administrative Agent its express written consent
thereto no later than ten days prior to the Current Expiration Date. No
extension shall become effective unless the express written consent thereto
by the Required Commitment Banks and the Issuing Bank is received by the
Administrative Agent on or before the tenth day prior to the Current
Expiration Date. If the Issuing Bank and the Required Commitment Banks, but
not all Commitment Banks, have expressly consented in writing to such
Extension Request by such tenth day, then the Administrative Agent shall so
notify the Parent and the Parent may, effective as of the Current
Expiration Date, take one or both of the following actions: (i) replace (as
a party to, and for all purposes of, this Agreement) any Commitment Bank
which has not agreed to such Extension Request (a "Nonextending Bank") with
another commercial lending institution satisfactory to the Issuing Bank (a
"Replacement Bank") by giving notice of the name of such Replacement Bank
to the Administrative Agent and the Issuing Bank not later than five
Business Days prior to the then Current Expiration Date and (ii) elect to
implement a Conversion to Tranche System as contemplated by Section 2.18
hereof (or, if the Conversion to Tranche System has previously been
implemented, elect to implement a Supplement to Tranche System as
38
contemplated by Section 2.18 hereof). In the event that a Nonextending Bank
is to be replaced by a Replacement Bank, such Nonextending Bank shall, upon
payment to it of all amounts owing to it on the date of its replacement,
assign all of its interests hereunder to such Replacement Bank in
accordance with the provisions of Section 9.07(c) hereof. If the Issuing
Bank and the Required Commitment Banks shall have consented to such
Extension Request, then, on the Current Expiration Date, the Expiration
Date shall be deemed to have been extended to, and shall be, the date
specified in such Extension Request. The Administrative Agent shall
promptly after any such extension advise the Banks of any changes in the LC
Commitment Amounts and the Letter of Credit Participating Interest
Percentages, as well as any changes effected by the election of the
Conversion to Tranche System or a Supplement to Tranche System.
SECTION 2.18 Tranches.
(a) Certain Definitions. As used in this Agreement the following
terms have the meanings ascribed thereto:
"Commitment Banks" at any time means Banks which have Letter of
Credit Participating Interest Commitments at such time and "Commitment
Bank" means any one of them.
"Conversion to Tranche System" means the election by the Parent,
at a time when the Parent has made an Extension Request pursuant to Section
2.17 hereof and such Extension Request has been consented to in writing by
the Issuing Bank and the Required Commitment Banks, but not by all of the
Commitment Banks, to classify Letters of Credit as Tranche 1 Letters of
Credit and Tranche 2 Letters of Credit, all in accordance with Section
2.18(b) hereof.
"L/C Termination Date" means, with respect to a Letter of Credit,
the date which is stated therein to be the last day on which the
beneficiary thereof may draw thereon.
"Pro Rata" means: (i) until the first Special Expiration Date,
from and to the Banks in accordance with their respective Letter of Credit
Participating Interest Percentages and (ii) thereafter, (x) with respect to
Tranche 1 Letters of Credit, from and to the Tranche 1 Banks in accordance
with their respective Tranche 1 Letter of Credit Participating Interest
Percentages, (y) with respect to Tranche 2 Letters of Credit and Tranche 2
Letter of Credit Participating Interest Commitments, from and to the
Tranche 2 Banks in accordance with their respective Tranche 2 Letter of
Credit Participating Interest Percentages and (z) with respect to each
additional Tranche of Letters of Credit (i.e., Tranche 3 Letters of Credit,
Tranche 4 Letters of Credit, and so on), if any, from and to the Banks
which have Letter of Credit Participating Interest Commitments or Letter of
Credit Participating Interests, as applicable, with respect to such Tranche
in accordance with their respective related Letter of Credit Participating
Interest Percentages.
"Required Commitment Banks" at any time means Commitment Banks
which have, in the aggregate, LC Commitment Amounts in excess of 50% of the
total outstanding LC Commitment Amounts at such time.
"Special Expiration Date" means the Expiration Date which is in
effect immediately prior to the occurrence of the event described in the
following clause (iii) after the occurrence of the events described in the
following clauses (i) and (ii): (i) the Parent has made an Extension
Request pursuant to Section 2.17 hereof, (ii) such Extension Request has
been consented to in writing by the Issuing Bank and the Required
Commitment Banks, but not by all of the Commitment Banks, and (iii) the
Parent has elected to implement a Conversion to Tranche System or a
Supplement to Tranche System with respect to such Extension Request and
Expiration Date.
"Supplement to Tranche System" means the election by the Parent,
at a time when the Conversion to Tranche System has been previously made
and when the Parent has made an Extension Request pursuant to Section 2.17
hereof and such Extension Request has been consented to in writing by the
Issuing Bank and the Required Commitment Banks, but not by all of the
Commitment Banks, to classify additional Letters of Credit as Tranche X
Letters of Credit.
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"Tranche 1 Bank" shall mean each Bank which is a Bank immediately
prior to the first Special Expiration Date.
"Tranche 1 Letter of Credit" means each Letter of Credit which is
issued prior to the first Special Expiration Date, but shall not include
any such Letter of Credit as to which the L/C Termination Date has been
extended to a date after the L/C Termination Date which was in effect on
such first Special Expiration Date.
"Tranche 1 Letter of Credit Participating Interest Percentage" for
each Tranche 1 Bank means such Bank's Letter of Credit Participating
Interest Percentage immediately prior to the first Special Expiration Date.
"Tranche 2 Bank" shall mean each Bank which has a Tranche 2 Letter
of Credit Participating Interest Commitment.
"Tranche 2 Letter of Credit" means each Letter of Credit which is
issued prior to the second Special Expiration Date, but shall not include
any such Letter of Credit as to which the L/C Termination Date has been
extended to a date after the L/C Termination Date which was in effect on
such second Special Expiration Date and shall not include any Tranche 1
Letter of Credit (it being understood that a Letter of Credit may change
from a Tranche 1 Letter of Credit to a Tranche 2 Letter of Credit as a
result of the extension, after the first Special Expiration Date, of its
L/C Termination Date).
"Tranche 3 Letter of Credit" and "Tranche 4 Letter of Credit" have
the meanings set forth in the definition of the term "Tranche X".
"Tranche X" shall mean Tranche 3 if there are existing Tranche 2
Letters of Credit but not Tranche 3 Letters of Credit, Tranche 4 if there
are existing Tranche 3 Letters of Credit but not Tranche 4 Letters of
Credit, and so on in consecutive integral succession. The terms "Tranche X
Bank", "Tranche X Letter of Credit Participating Interest Commitment",
"Tranche X LC Commitment Amount" and "Tranche X Letter of Credit
Participating Interest Percentage" shall have comparable meanings. The term
"Tranche X Letter of Credit" shall have a comparable meaning, but such
meaning shall be consistent with the following: (i) the term "Tranche 3
Letter of Credit" means each Letter of Credit which is issued prior to the
third Special Expiration Date, but shall not include any such Letter of
Credit as to which the L/C Termination Date has been extended to a date
after the L/C Termination Date which was in effect on such third Special
Expiration Date and shall not include any Tranche 1 Letter or Credit or any
Tranche 2 Letter of Credit; (ii) the term "Tranche 4 Letter of Credit"
means each Letter of Credit which is issued prior to the fourth Special
Expiration Date, but shall not include any such Letter of Credit as to
which the L/C Termination Date has been extended to a date after the L/C
Termination Date which was in effect on such fourth Special Expiration Date
and shall not include any Tranche 1 Letter of Credit, any Tranche 2 Letter
of Credit or any Tranche 3 Letter of Credit; (iii) the terms "Tranche 5
Letter of Credit", "Tranche 6 Letter of Credit", and so on shall have
comparable meanings (it being understood that a Letter of Credit can change
from one Tranche to another as a result of an extension of its L/C
Termination Date).
40
(b) Conversion to Tranche System. If the Parent elects the Conversion to
Tranche System with respect to an Extension Request, the following shall
occur: (i) the Letter of Credit Participating Interest Commitments of Banks
which, with respect to such Extension Request, are Nonextending Banks shall
terminate as of the Special Expiration Date related to such Extension
Request, but such Nonextending Banks (other than Nonextending Banks which
have been replaced as contemplated by Section 2.17 hereof) shall remain
parties to this Agreement and shall retain all of their respective
obligations with respect to Tranche 1 Letters of Credit and shall retain
their respective Letter of Credit Participating Interests in and with
respect to Tranche 1 Letters of Credit; (ii) from and after the Special
Expiration Date related to such Extension Request, the Letter of Credit
Participating Interest Commitment of each Bank which has consented in
writing to such Extension Request shall be a "Tranche 2 Letter of Credit
Participating Interest Commitment" and the LC Commitment Amount of such
Bank shall be its "Tranche 2 LC Commitment Amount" (in addition to being
its LC Commitment Amount applicable to Tranche 1 Letters of Credit); (iii)
the "Tranche 2 Letter of Credit Participating Interest Percentage" for each
Tranche 2 Bank shall mean a fraction, expressed as percentage, the
numerator of which is such Tranche 2 Bank's Tranche 2 LC Commitment Amount
and the denominator of which is the aggregate Tranche 2 LC Commitment
Amounts of all of the Tranche 2 Banks.
(c) Supplement to Tranche System. If the Parent elects a Supplement to
Tranche System with respect to an Extension Request, the following shall
occur: (i) the Letter of Credit Participating Interest Commitments of Banks
which, with respect to such Extension Request, are Nonextending Banks shall
terminate, but such Nonextending Banks shall remain parties to this
Agreement and shall retain all of their respective obligations with respect
to Letters of Credit under existing Tranches and shall retain their
respective Letter of Credit Participating Interests in and with respect to
existing Letters of Credit; (ii) from and after the Special Expiration Date
related to such Extension Request, the Letter of Credit Participating
Interest Commitment of each Bank which has consented in writing to such
Extension Request shall be a "Tranche X Letter of Credit Participating
Interest Commitment" and the LC Commitment Amount of such Lender shall be
its "Tranche X LC Commitment Amount" (in addition to being its LC
Commitment Amount applicable to prior Tranches of Letters of Credit); (iii)
the "Tranche X Letter of Credit Participating Interest Percentage" for each
Tranche X Bank shall mean a fraction, expressed as percentage, the
numerator of which is such Tranche X Bank's Tranche X LC Commitment Amount
and the denominator of which is the aggregate Tranche X LC Commitment
Amounts of all of the Tranche X Banks, all as contemplated by the
definition of the term "Tranche X" contained in paragraph (a) of this
Section 2.18.
SECTION 2.19 Future Amendment to Provide Collateral. It is contemplated
that after the Effective Date the Account Parties may (but are not
obligated to) propose to the Issuing Bank, the Agents and the Banks
amendments to this Agreement to provide for collateral (consisting of
securities accounts to which, among other things, security entitlements
meeting certain eligibility requirements are credited) with respect to
their reimbursement obligations as to certain Letters of Credit issued
hereunder and for a reduction of the Applicable Margins hereunder with
respect to such Letters of Credit, all as contemplated by the term sheet
distributed to the Banks prior to their execution and delivery of this
Agreement. The effectiveness of such amendments shall require the written
consent of each Agent, the Issuing Bank and all of the Banks.
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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 (including any Replacement Letter of Credit) on the Effective
Date, is subject to the satisfaction of the following conditions precedent:
(i) The Administrative Agent shall have received the following,
each dated the Effective Date (unless otherwise specified), in form
and substance reasonably satisfactory to the Administrative Agent
(unless otherwise specified) and in sufficient copies for each
Bank:
(A) 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.
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(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) Xxxxx, Xxxxx & Xxxxx, 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.
(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, 2000, 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 Mellon Reimbursement Agreement (other than
fees and expenses of Mellon'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 Mellon Reimbursement Agreement have been reduced to
zero, and Mellon shall have agreed, by its execution and delivery
of this Agreement, that the Existing Letters of Credit issued
under the Mellon 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
43
(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.
44
(c) The execution, delivery and performance by each Loan Party of each
Loan Document to which it is or is to be a party and the consummation of the
transactions contemplated by the Loan Documents, are within such Loan
Party's corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene such Loan Party's
constitutional documents, (ii) violate any law, rule, regulation
(including, without limitation, Regulation X of the Board of Governors of
the Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of, or
constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting
any Loan Party, any of its Subsidiaries or any of their properties or (iv)
except for the Liens created under the Loan Documents, result in or require
the creation or imposition of any Lien upon or with respect to any of the
properties of any Loan Party or any of its Subsidiaries. No Loan Party or
any of its Subsidiaries is in violation of any such law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award or in
breach of any such contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument, the violation or breach of which could be
reasonably likely to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other
third party is required for (i) the due execution, delivery, recordation,
filing or performance by any Loan Party of any Loan Document to which it is
or is to be a party or the other transactions contemplated by the Loan
Documents, or (ii) the exercise by 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, 2000, 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, 2001, 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, 2001, 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, 2001 balance sheet and statements, to the absence
of footnotes). Since December 31, 2000, there has been no Material Adverse
Change.
45
(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
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"):
46
(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 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
47
Action, which (in either case), individually or in the aggregate with all
other such pending or threatened actions and circumstances, would
reasonably be expected to have a Material Adverse Effect.
(p) Each Loan Party and each of its Subsidiaries has filed, has caused
to be filed or has been included in all material federal tax returns and all
other material tax returns required to be filed and has paid all taxes
shown thereon to be due, together with applicable interest and penalties,
except to the extent contested in good faith and by appropriate proceedings
(in which case adequate reserves have been established therefor in
accordance with GAAP).
(q) Set forth on Schedule II hereto is a list of all letters of credit
that were issued under the Mellon Reimbursement Agreement and that are
outstanding as of the Effective Date.
ARTICLE V
COVENANTS OF THE ACCOUNT PARTIES
SECTION 5.01 Affirmative Covenants. So long as any Advance or any other
obligation of any Loan Party under any Loan Document shall remain unpaid,
any Letter of Credit shall be outstanding or any Bank shall have any Letter
of Credit Participating Interest Commitment or commitment to issue a Letter
of Credit hereunder, each Account Party will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without limitation,
compliance with Environmental Laws, Environmental Permits, ERISA and the
Racketeer Influenced and Corrupt Organizations Chapter of the Organized
Crime Control Act of 1970.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent,
(i) all material taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful material claims
that, if unpaid, might by law become a Lien upon its property; provided,
however, that neither any Account Party nor any of its Subsidiaries shall
be required to pay or discharge any such tax, assessment, charge or claim
that is being contested in good faith and by proper proceedings and as to
which appropriate reserves are being maintained.
(c) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar
properties in the same general areas in which the Parent or such Subsidiary
operates (it being understood that the foregoing shall not apply 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.
48
(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. Each Account Party shall procure that its
obligations under the Loan Documents will rank at least pari passu with all
its other present and future unsecured and unsubordinated obligations,
except for obligations which are mandatorily preferred by law applying to
insurance companies generally.
SECTION 5.02 Negative Covenants. So long as any Advance or any other
obligation of any Loan Party under any Loan Document shall remain unpaid,
any Letter of Credit shall be outstanding or any 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:
49
(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;
(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;
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(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; and
(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.
(b) Change in Nature of Business. Make any material change in the
nature of the business of the Parent and its Subsidiaries, taken as a whole,
as carried on at the date hereof.
(c) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries to do so,
except that:
51
(i) any Subsidiary of the Parent may merge into or
consolidate with any other Subsidiary of the Parent, provided
that, in the case of any such merger or consolidation, the Person
formed by such merger or consolidation shall be a wholly owned
Subsidiary of the Parent, provided further that, in the case of
any such merger or consolidation to which an Account Party is a
party, the Person formed by such merger or consolidation shall be
such Account Party;
(ii) any Subsidiary of any Account Party may merge into or
consolidate with any other Person or permit any other Person to
merge into or consolidate with it; provided that the Person
surviving such merger shall be a wholly owned Subsidiary of the
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 consolidate with any other Person or permit any
other Person to merge into or consolidate with it; and
(iv) the Parent or any Account Party may merge into or
consolidate with any other Person; provided that, in the case of
any such merger or consolidation, the Person formed by such merger
or consolidation shall be the Parent or such 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:
52
(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:
(a) Default Notice. As soon as possible and in any event within two days
after the occurrence of each Default or any event, development or
occurrence reasonably likely to have a Material Adverse Effect continuing
on the date of such statement, a statement of the chief financial officer
of the Parent setting forth details of such Default, event, development or
occurrence and the action that the Parent or the applicable Subsidiary has
taken and proposes to take with respect thereto.
(b) Annual Financials.
(i) As soon as available and in any event within 90 days
after the end of each Fiscal Year, a copy of the annual
Consolidated audit report for such year for the Parent and its
Subsidiaries, including therein a Consolidated balance sheet of
the Parent and its Subsidiaries as of the end of such Fiscal Year
and Consolidated statements of income and cash flows of the Parent
and its Subsidiaries for such Fiscal Year, all reported on in a
manner reasonably acceptable to the Securities and Exchange
Commission in each case and accompanied by an opinion of
Pricewaterhouse Coopers 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 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.
53
(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,
Consolidated balance sheets of the Parent and its Subsidiaries as of the
end of such quarter and Consolidated statements of income and a
Consolidated statement of cash flows of the Parent and its Subsidiaries for
the period commencing at the end of the previous fiscal quarter and ending
with the end of such fiscal quarter and Consolidated statements of income
and a Consolidated statement of cash flows of the Parent and its
Subsidiaries for the period commencing at the end of the previous Fiscal
Year and ending with the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding date or
period of the preceding Fiscal Year, all in reasonable detail and duly
certified (subject to the absence of footnotes and normal year-end audit
adjustments) by the Chief Financial Officer of the Parent as having been
prepared in accordance with GAAP, together with (i) a certificate of said
officer stating that no Default has occurred and is continuing or, if a
Default has occurred and is continuing, a statement as to the nature
thereof and the action that the Parent has taken and proposes to take with
respect thereto and (ii) a schedule in form reasonably satisfactory to the
Administrative Agent of the computations used by the Parent in determining
compliance with the covenants contained in Section 5.04.
(d) Litigation. Promptly after the commencement thereof, notice of all
actions, suits, investigations, litigation and proceedings before any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or any of
its Subsidiaries of the type described in Section 4.01(f).
(e) Securities Reports. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports that the
Parent sends to its stockholders generally, and copies of all regular,
periodic and special reports, and all registration statements, that any
Loan Party or any of its Subsidiaries files with the Securities and
Exchange Commission or any governmental authority that may be substituted
therefor, or with any national securities exchange.
54
(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 (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 or the Registrar of Companies or any other person of
the revocation, the suspension or the placing of any restriction or
condition on the registration as an insurer of any 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.
55
(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.
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
56
(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, 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
57
(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
58
(l) any Loan Party or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability
to such Multiemployer Plan; or
(m) any Loan Party or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, and as a result of such reorganization or termination the aggregate
annual contributions of the Loan Parties and the ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years of such Multiemployer Plans
immediately preceding the plan year in which such reorganization or
termination occurs;
then, and in any such event, the Administrative Agent (i) shall at the
request, or may with the consent, of the Required 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 and (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.
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.
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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 on
reimbursement obligations owing by such other Account Parties pursuant to
this Agreement with respect to Letters of Credit. Upon failure by an
Account Party to pay punctually any such amount, each other Account Party
agrees to pay forthwith on demand the amount not so paid at the place and
in the manner specified in this Agreement.
(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;
(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
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(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 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 final
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.
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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 final 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 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
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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 First Union and Affiliates. With respect to its LC
Commitment Amounts, and the Advances, First Union 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 First Union in
its individual capacity. First Union 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
First Union 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.
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.
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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
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 Fleet ceases to be a Bank hereunder, it
shall be deemed to have resigned as Documentation 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, (B) in
the case of clause (v) below, any Bank which is not a Commitment Bank and
which is not affected by such amendment, waiver or consent and (C) in the
case of clauses (ii), (iii), (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 then applicable 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
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further that no amendment, waiver or consent shall, unless in writing and
signed by an Agent in addition to the Banks required above to take such
action, affect the rights or duties of such Agent under this Agreement or
the other Loan Documents.
SECTION 9.02 Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic or
telecopy communication) and mailed, telegraphed, telecopied or delivered,
if to any Account Party, at its address set forth below on the signature
pages hereof; if to any Initial Bank, at its Domestic Lending Office
specified opposite its name on Part 2 of Schedule I hereto; if to any other
Bank, at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Bank; if to First Union (in its
capacity as Issuing Bank) at its address at One South Broad Street, Mail
Code PA4928, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attn: 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
reasonable fees and expenses of counsel for the Administrative Agent, the
Issuing Bank and each Bank with respect thereto).
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(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 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.
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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, (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, (vii) no such assignment
shall be permitted without the consent of the Administrative Agent and, so
long as no Default shall have occurred and be continuing, the Parent (which
consents shall not be unreasonably withheld) and (viii) the parties to each
such assignment shall execute and deliver to the Administrative Agent, for
its acceptance and recording in the Register, an Assignment and Acceptance,
together with a processing and recordation fee of $2,500.00.
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(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 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.
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(d) The Administrative Agent, acting for this purpose (but only for this
purpose) as the agent of the Account Parties, shall maintain at its address
referred to in Section 9.02 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the
names and addresses of the Banks and the LC Commitment Amount of, and
principal amount of the Advances owing to, each Bank from time to time (the
"Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Account Parties, the
Agents and the Banks shall treat each Person whose name is recorded in the
Register as a Bank hereunder for all purposes of this Agreement. The
Register shall be available for inspection by any Account Party or any
Agent or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and an assignee, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the
form of Exhibit A hereto, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give
prompt notice thereof to the Parent.
(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.
69
(h) Notwithstanding any other provision set forth in this Agreement, any
Bank may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the
Advances owing to it) in favor of any Federal Reserve Bank in accordance
with Regulation A of the Board of Governors of the Federal Reserve System.
SECTION 9.08 Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original
executed counterpart of this Agreement.
SECTION 9.09 No Liability of the Issuing Bank. Each Account Party
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letter of Credit. Neither
the Issuing Bank nor any of its officers, directors, employees or agents
shall be liable or responsible for: (a) the use that may be made of any
Letter of Credit or any acts or omissions of any beneficiary or transferee
in connection therewith; (b) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents should
prove to be in any or all respects invalid, insufficient, fraudulent or
forged; (c) payment by the Issuing Bank against presentation of documents
that do not strictly comply with the terms of a Letter of Credit, including
failure of any documents to bear any reference or adequate reference to the
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.
70
SECTION 9.11 Jurisdiction, Etc.
(a) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of
any New York State court or Federal court of the United States of America
sitting in New York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or any of
the other Loan Documents to which it is a party, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York
State court or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law. Nothing in
this Agreement shall affect any right that any party may otherwise have to
bring any action or proceeding relating to this Agreement or any of the
other Loan Documents in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other
Loan Documents to which it is a party in any New York State or Federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
SECTION 9.12 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 9.13 Waiver of Jury Trial. Each of the Account Parties, the Agents
and the Banks irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to any of the Loan Documents, the Advances or
the actions of any Agent or any Bank in the negotiation, administration,
performance or enforcement thereof.
SECTION 9.14 Disclosure of Information. Each Account Party agrees and
consents to the Administrative Agent's and the Arranger's disclosure of
information relating to this transaction to Gold Sheets and other similar
bank trade publications. Such information will consist of deal terms and
other information customarily found in such publications. The Parent shall
have the right to review and approve any such disclosure made by the
Administrative Agent or the Arranger before such disclosure is made (such
approval not to be unreasonably withheld).
[Remainder of page intentionally left blank]
71
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as
of the date first above written.
ACE LIMITED
The Common Seal of ACE Limited was hereunto
affixed in the presence of:
____________________________________________
Director
____________________________________________
Secretary
ACE BERMUDA INSURANCE LTD.
The Common Seal of ACE Bermuda Insurance Ltd.
was hereunto affixed in the presence of:
____________________________________________
Director
____________________________________________
Secretary
ACE TEMPEST REINSURANCE LTD.
The Common Seal of ACE Tempest Reinsurance
Ltd. was hereunto affixed in the presence of:
____________________________________________
Director
____________________________________________
Secretary
Address for each Account Party:
Xxx XXX Xxxxxxxx
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx XX00 Xxxxxxx
Telecopy: (000) 000-0000
(signatures continued)
S-1
FIRST UNION NATIONAL BANK, as Administrative
Agent, as Issuing Bank and as an Initial Bank
By: _________________________________________
Title: ______________________________________
FLEET NATIONAL BANK, as Documentation Agent
and as an Initial Bank
By: _________________________________________
Title: ______________________________________
MELLON BANK, N.A., as Issuing Bank and as
an Initial Bank
By: _________________________________________
Title: ______________________________________
ROYAL BANK OF CANADA, NEW YORK BRANCH, as
an Initial Bank
By: _________________________________________
Title: ______________________________________
BANK ONE, N.A., as an Initial Bank
By: _________________________________________
Title: ______________________________________
(signatures continued)
S-2
COMERICA BANK, as an Initial Bank
By: _________________________________________
Title: ______________________________________
DEUTSCHE BANK AG, NEW YORK, as an
Initial Bank
By: _________________________________________
Title: ______________________________________
STATE STREET BANK AND TRUST COMPANY, as an
Initial Bank
By: _________________________________________
Title: ______________________________________
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: ______________________________________
(signatures continued)
S-3
CREDIT SUISSE FIRST BOSTON, as an
Initial Bank
By: _________________________________________
Title: ______________________________________
S-4
SCHEDULE I
LC COMMITMENT AMOUNTS
---------------------
First Union National Bank $60,000,000.00
Fleet National Bank $55,000,000.00
Mellon Bank, N.A. $45,000,000.00
Royal Bank of Canada, New York Branch $45,000,000.00
Bank One, N.A. $42,500,000.00
Comerica Bank $42,500,000.00
Deutsche Bank AG, New York $42,500,000.00
State Street Bank and Trust Company $42,500,000.00
The Bank of Bermuda Limited $25,000,000.00
The Bank of N.T. Xxxxxxxxxxx & Son Limited $25,000,000.00
Credit Suisse First Boston $25,000,000.00
Total $450,000,000.00
===============
SCHEDULE I - Part 2
DOMESTIC LENDING OFFICES
------------------------
First Union National Bank Financial Institutions Group
0000 Xxxxxxxx Xxxxxx, XX 4819
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx XxXxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Fleet National Bank 000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
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
Royal Bank of Canada, New York Branch Xxx Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Manager, Trade Products
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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
Bank One, N.A. 0 Xxxx Xxx Xxxxx, Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Comerica Bank 000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Deutsche Bank AG, New York 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx 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
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 & Son Limited 00 Xxxxx Xxxxxx
Xxxxxxxx XX XX, Xxxxxxx
Attn: Xxxxxxxx Xxxxxx,
VP-Corporate Banking
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Credit Suisse First Xxxxxx Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
2
SCHEDULE II
EXISTING LETTERS OF CREDIT
--------------------------
1. Mellon Letter of Credit # S864386
Face Amount: $74,500,000 (amended amount: $64,968,000)
Account Party: ACE Bermuda Insurance Ltd.
Beneficiary: State Industrial Insurance System d/b/a
Employers Insurance Company of Nevada
2. Mellon Letter of Credit # 1400 (London)
Face Amount: GBP57,500,000
Account Party: ACE Limited for and on behalf of ACE Bermuda
Insurance Ltd.
Beneficiary: The Chiyoda Fire and Marine Company (Europe) Ltd.
3. Mellon Letter of Credit # S856602
Face Amount: $427,000
Account Party: ACE Limited for and on behalf of Westchester
Surplus Lines Insurance
Company and Westchester Fire Insurance Company
Beneficiary: International Insurance Company
SCHEDULE 4.01(B)
Subsidiaries
[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 First Union National Bank,
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 August 24, 2001 among the Parent
and other Account Parties party thereto, the Assignor and the other Banks
party thereto, the Documentation Agent 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
Section 9.07(a) of 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 pricipal 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: ________________________________
FIRST UNION NATIONAL BANK, as
Administrative Agent
By: ________________________________
Title: ________________________________]
4
SCHEDULE 5.02(A)
Liens
1. Liens securing letters of credit issued by Citibank for the
account of Cigna Europe in an aggregate stated amount not
exceeding $16,000,000 (subject to currency fluctuations).
2. Liens securing letters of credit issued by Citibank for the account
of INA(UK) in an aggregate stated amount not exceeding $8,000,000.
3. $70,000,000 of Cigna Overseas Insurance Company investments are
pledged to Domestic Pool companies under a Regulation 114 trust.
4. Lien arising under a Subordination Agreement dated as of October
27, 1998 among ACE US Holdings, Inc., ACE Limited and The Chase
Manhattan Bank encumbering ACE US Holdings, Inc.'s rights under
the Subordinated Loan Agreement dated as of October 27, 1998 among
ACE US Holdings, Inc., ACE Bermuda Insurance Ltd. and United
States Trust Company of New York, as trustee under the Indenture
dated October 27, 1998 of ACE US Holdings, Inc.
5. Liens securing Letter of Credit Facility Agreements dated
November 17, 2000 among ACE Limited, ACE Bermuda Insurance, Ltd.,
certain other financial institutions and Citibank International
plc, as Agent and Security Trustee.
EXHIBIT A
Assignment and Acceptance
[attached hereto]
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.
