[EXECUTION COPY]
----------------
$50,000,000
CREDIT AGREEMENT
dated as of
November 15, 1996
among
ACE Limited,
as Borrower,
A.C.E. Insurance Company, Ltd.
and
Corporate Officers & Directors Assurance Ltd.,
as Guarantors,
The Banks Listed Herein
and
Xxxxxx Guaranty Trust Company of New York,
as Agent
TABLE OF CONTENTS*
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions............................................ 1
SECTION 1.02. Accounting Terms and
Determinations......................................... 11
SECTION 1.03. Types of Borrowings.................................... 00
XXXXXXX 0.00. Xxxxxx Xxxxxx Dollars.................................. 12
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend.................................... 12
SECTION 2.02. Notice of Committed Borrowing.......................... 13
SECTION 2.03. Money Market Borrowings................................ 13
SECTION 2.04. Notice to Banks; Funding of Loans...................... 17
SECTION 2.05. Notes.................................................. 18
SECTION 2.06. Maturity of Loans...................................... 19
SECTION 2.07. Interest Rates......................................... 19
SECTION 2.08. Facility Fee........................................... 23
SECTION 2.09. Optional Termination or Reduction
of Commitments......................................... 23
SECTION 2.10. Scheduled Termination of
Commitments............................................ 23
SECTION 2.11. Optional Prepayments................................... 23
SECTION 2.12. General Provisions as to Payments...................... 24
SECTION 2.13. Funding Losses......................................... 25
SECTION 2.14. Computation of Interest and Fees....................... 25
SECTION 2.15. Regulation D Compensation.............................. 26
ARTICLE III
CONDITIONS
SECTION 3.01. Closing................................................ 26
SECTION 3.02. Borrowings............................................. 27
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power.......................... 29
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*The Table of Contents is not a part of this Agreement.
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PAGE
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SECTION 4.02. Corporate and Governmental
Authorization; No Contravention.............................. 29
SECTION 4.03. Binding Effect............................................... 29
SECTION 4.04. Financial Information........................................ 29
SECTION 4.05. Litigation................................................... 31
SECTION 4.06. ERISA........................................................ 31
SECTION 4.07. Taxes........................................................ 31
SECTION 4.08. Not an Investment Company.................................... 31
SECTION 4.09. Full Disclosure.............................................. 31
SECTION 4.10. Compliance with Laws......................................... 32
ARTICLE V
COVENANTS
SECTION 5.01. Information.................................................. 32
SECTION 5.02. Payment of Obligations....................................... 34
SECTION 5.03. Maintenance of Property; Insurance........................... 34
SECTION 5.04. Conduct of Business and Maintenance
of Existence................................................. 35
SECTION 5.05. Compliance with Laws......................................... 35
SECTION 5.06. Inspection of Property, Books and
Records...................................................... 35
SECTION 5.07. Leverage..................................................... 36
SECTION 5.08. Subsidiary Debt.............................................. 36
SECTION 5.09. Minimum Tangible Net Worth................................... 36
SECTION 5.10. Negative Pledge.............................................. 36
SECTION 5.11. Consolidations, Mergers and Sales
of Assets.................................................... 37
SECTION 5.12. Use of Proceeds.............................................. 38
SECTION 5.13. ERISA........................................................ 38
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default............................................ 38
SECTION 6.02. Notice of Default............................................ 41
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization................................ 42
SECTION 7.02. Agent and Affiliates......................................... 42
SECTION 7.03. Action by Agent.............................................. 42
SECTION 7.04. Consultation with Experts.................................... 42
SECTION 7.05. Liability of Agent........................................... 42
SECTION 7.06. Indemnification.............................................. 43
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PAGE
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SECTION 7.07. Credit Decision.............................................. 43
SECTION 7.08. Successor Agent.............................................. 43
SECTION 7.09. Agent's Fee.................................................. 44
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair......................................... 44
SECTION 8.02. Illegality................................................... 45
SECTION 8.03. Increased Cost and Reduced Return............................ 45
SECTION 8.04. Taxes........................................................ 47
SECTION 8.05. Base Rate Loans Substituted for
Affected Fixed Rate Loans.................................... 49
ARTICLE IX
GUARANTY
SECTION 9.01. The Guaranty................................................. 49
SECTION 9.02. Guaranty Unconditional....................................... 50
SECTION 9.03. Discharge Only Upon Payment In
Full; Reinstatement In Certain
Circumstances................................................ 51
SECTION 9.04. Waiver by each of the Guarantors............................. 51
SECTION 9.05. Subrogation.................................................. 51
SECTION 9.06. Stay of Acceleration......................................... 51
SECTION 9.07. Limit of Liability........................................... 51
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices...................................................... 52
SECTION 10.02. No Waivers................................................... 52
SECTION 10.03. Expenses; Indemnification.................................... 52
SECTION 10.04. Sharing of Set-Offs.......................................... 53
SECTION 10.05. Amendments and Waivers....................................... 53
SECTION 10.06. Successors and Assigns....................................... 54
SECTION 10.07. Collateral................................................... 56
SECTION 10.08. Governing Law................................................ 56
SECTION 10.09. Counterparts; Integration;
Effectiveness................................................ 56
SECTION 10.10. Judicial Proceedings......................................... 56
SECTION 10.11. Judgment Currency............................................ 58
SECTION 10.12. WAIVER OF JURY TRIAL......................................... 58
SECTION 10.13. Existing Credit Agreement.................................... 58
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Page
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Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of Counsel for the Borrower
Exhibit F - Opinion of Special Bermuda Counsel for the Guarantors
Exhibit G - Opinion of New York Counsel for the Borrower and the Guarantors
Exhibit H - Opinion of Special United States Counsel for the Agent
Exhibit I - Assignment and Assumption Agreement
Exhibit J - Letter from CT System
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CREDIT AGREEMENT
AGREEMENT dated as of November 15, 1996 among ACE LIMITED, A.C.E.
INSURANCE COMPANY, LTD. and CORPORATE OFFICERS & DIRECTORS ASSURANCE LTD., the
BANKS listed on the signature pages hereof and XXXXXX GUARANTY TRUST COMPANY OF
NEW YORK, as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.03.
"ACE Insurance" means A.C.E. Insurance Company, Ltd., a Bermuda
limited liability company, and its successors.
"Adjusted CD Rate" has the meaning set forth in Section 2.07(b).
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Agent and submitted to
the Agent (with a copy to the Borrower) duly completed by such Bank.
"Agent" means Xxxxxx Guaranty Trust Company of New York in its
capacity as agent for the Banks under the Financing Documents, and its
successors in such capacity.
"Applicable Lending Office" means, with respect to any Bank, (i) in
the case of its Domestic Loans, its Domestic Lending Office, (ii) in the case of
its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case of
its Money Market Loans, its Money Market Lending Office.
"Assessment Rate" has the meaning set forth in Section 2.07(b).
"Assignee" has the meaning set forth in Section 10.06(c).
"Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 10.06(c), and their respective
successors.
"Base Rate" means, for any day, a rate per annum equal to the higher
of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan to be made by a Bank as a Base
Rate Loan in accordance with the applicable Notice of Committed Borrowing or
pursuant to Article VIII.
"Bermuda Companies Law" means The Companies Act 1981 of Bermuda, as
amended, and the regulations promulgated thereunder.
"Bermuda Insurance Law" means The Insurance Xxx 0000 of Bermuda, as
amended, and the regulations promulgated thereunder.
"Borrower" means ACE Limited, a Cayman Islands company limited by
shares, and its successors.
"Borrowing" has the meaning set forth in Section 1.03.
"CD Base Rate" has the meaning set forth in Section 2.07(b).
"CD Loan" means a Committed Loan to be made by a Bank as a CD Loan in
accordance with the applicable Notice of Committed Borrowing.
"CD Margin" has the meaning set forth in Section 2.07(b).
"CD Reference Banks" means The Bank of New York and Xxxxxx Guaranty
Trust Company of New York.
"Closing Date" means the date on or after the Effective Date on which
the Agent shall have received the documents specified in or pursuant to Section
3.01.
2
"CODA" means Corporate Officers & Directors Assurance Ltd., a Bermuda
limited liability company, and its successors.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof, as such amount may
be reduced from time to time pursuant to Section 2.09.
"Committed Loan" means a loan made by a Bank pursuant to Section 2.01.
"Consolidated Debt" means at any date the Debt of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Borrower in
its consolidated financial statements if such statements were prepared as of
such date.
"Consolidated Tangible Net Worth" means at any date the consolidated
stockholders' equity of the Borrower and its Consolidated Subsidiaries less
their consolidated Intangible Assets, all determined as of such date. For
purposes of this definition "Intangible Assets" means the amount (to the extent
reflected in determining such consolidated stockholders' equity) of (i) all
write-ups (other than write-ups resulting from foreign currency translations and
write-ups of assets of a going concern business made within twelve months after
the acquisition of such business) subsequent to June 30, 1996 in the book value
of any asset owned by the Borrower or a Consolidated Subsidiary and (ii) all
unamortized debt discount and expense, unamortized deferred charges, deferred
acquisition costs, goodwill, patents, trademarks, service marks, trade names,
anticipated future benefit of tax loss carry-forwards, copyrights, organization
or developmental expenses and other intangible assets.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles, (v) all non-contingent
obligations (and, solely for purposes
3
of Section 5.10 and the definitions of Material Debt and Material Financial
Obligations, all contingent obligations) of such Person to reimburse any bank or
other Person in respect of amounts paid under a letter of credit or similar
instrument, (vi) all Debt secured by a Lien on any asset of such Person, whether
or not such Debt is otherwise an obligation of such Person, and (vii) all Debt
of others Guaranteed by such Person, provided that the term "Debt" shall not
include obligations of an insurance company under insurance policies or surety
bonds issued by it.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Derivatives Obligations" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law to
close.
"Domestic Lending Office" means, as to each Bank, its office located
at its address set forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Agent; provided that any Bank may so designate
separate Domestic Lending Offices for its Base Rate Loans, on the one hand, and
its CD Loans, on the other hand, in which case all references herein to the
Domestic Lending Office of such Bank shall be deemed to refer to either or both
of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in Section
2.07(b).
4
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 10.09.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means, with respect to any Person, such Person, any
Subsidiary and all members of a controlled group of corporations and all trades
or businesses (whether or not incorporated) under common control which, together
with such Person or any such Subsidiary, are treated as a single employer under
Section 414 of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its Euro-
Dollar Lending Office) or such other office, branch or affiliate of such Bank as
it may hereafter designate as its Euro-Dollar Lending Office by notice to the
Borrower and the Agent.
"Euro-Dollar Loan" means a Committed Loan to be made by a Bank as a
Euro-Dollar Loan in accordance with the applicable Notice of Committed
Borrowing.
"Euro-Dollar Margin" has the meaning set forth in Section 2.07(c).
"Euro-Dollar Reference Banks" means the principal London offices of
The Bank of New York and Xxxxxx Guaranty Trust Company of New York.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which
5
includes loans by a non-United States office of any Bank to United States
residents).
"Event of Default" has the meaning set forth in Section 6.01.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to Xxxxxx Guaranty Trust Company of New
York on such day on such transactions as determined by the Agent.
"Financing Documents" means this Agreement and the Notes.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money Market
Loans (excluding Money Market LIBOR Loans bearing interest at the Base Rate
pursuant to Section 8.01(a)) or any combination of the foregoing.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt (whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, or
to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the holder of such Debt of the
payment thereof or to protect such holder against loss in respect thereof (in
whole or in part), provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"Guarantors" means ACE Insurance and CODA.
6
"Hazardous Substances" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives, by-products
and other hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section 10.03(b).
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending one,
two, three or six months thereafter, as the Borrower may elect in the applicable
Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall, subject to clause (c) below, be
extended to the next succeeding Euro-Dollar Business Day unless such Euro-
Dollar Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (c) below, end on the last Euro-Dollar Business
Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
(2) with respect to each CD Borrowing, the period commencing on the date of
such Borrowing and ending 30, 60, 90 or 180 days thereafter, as the Borrower may
elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall, subject to clause (b) below, be
extended to the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
(3) with respect to each Base Rate Borrowing, the period commencing on the date
of such Borrowing and ending 30 days thereafter; provided that:
7
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall, subject to clause (b) below, be
extended to the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
(4) with respect to each Money Market LIBOR Borrowing, the period commencing on
the date of such Borrowing and ending such whole number of months thereafter as
the Borrower may elect in accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall, subject to clause (c) below, be
extended to the next succeeding Euro-Dollar Business Day unless such Euro-
Dollar Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (c) below, end on the last Euro-Dollar Business
Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date; and
(5) with respect to each Money Market Absolute Rate Borrowing, the period
commencing on the date of such Borrowing and ending such number of days
thereafter (but not less than 7 days) as the Borrower may elect in accordance
with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall, subject to clause (b) below, be
extended to the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
8
"LIBOR Auction" means a solicitation of Money Market Quotes setting
forth Money Market Margins based on the London Interbank Offered Rate pursuant
to Section 2.03.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, the
Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"Loan" means a Domestic Loan or a Euro-Dollar Loan or a Money Market
Loan and "Loans" means Domestic Loans or Euro-Dollar Loans or Money Market Loans
or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in Section
2.07(c).
"Material Debt" means Debt (other than the Notes) of the Borrower
and/or one or more of its Subsidiaries, arising in one or more related or
unrelated transactions, in an aggregate principal or face amount exceeding
$10,000,000.
"Material Financial Obligations" means a principal or face amount of
Debt and/or current payment obligations in respect of Derivatives Obligations of
the Borrower and/or one or more of its Subsidiaries, arising in one or more
related or unrelated transactions, exceeding in the aggregate $10,000,000.
"Money Market Absolute Rate" has the meaning set forth in Section
2.03(d).
"Money Market Absolute Rate Loan" means a loan to be made by a Bank
pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Money Market Lending Office by notice to the Borrower
and the Agent; provided that any Bank may from time to time by notice to the
Borrower and the Agent designate separate Money Market Lending Offices for its
Money Market LIBOR Loans, on the one hand, and its Money Market Absolute Rate
Loans, on the other hand, in which case
9
all references herein to the Money Market Lending Office of such Bank shall be
deemed to refer to either or both of such offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made by a Bank pursuant
to a LIBOR Auction (including such a loan bearing interest at the Base Rate
pursuant to Section 8.01(a)).
"Money Market Loan" means a Money Market LIBOR Loan or a Money Market
Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section 2.03(d).
"Money Market Quote" means an offer by a Bank to make a Money Market
Loan in accordance with Section 2.03.
"Notes" means promissory notes of the Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" means a Notice of Committed Borrowing (as
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined in
Section 2.03(f)).
"Obligors" means the Borrower and each of the Guarantors.
"Other Taxes" has the meaning set forth in Section 8.04(b).
"Parent" means, with respect to any Bank, any Person controlling such
Bank.
"Participant" has the meaning set forth in Section 10.06(b).
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Prime Rate" means the rate of interest publicly announced by Xxxxxx
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.
10
"Reference Banks" means the CD Reference Banks or the Euro-Dollar
Reference Banks, as the context may require, and "Reference Bank" means any one
of such Reference Banks.
"Refunding Borrowing" means a Committed Borrowing which, after
application of the proceeds thereof, results in no net increase in the
outstanding principal amount of Committed Loans made by any Bank.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least 66 2/3% of
the aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 66 2/3% of the aggregate unpaid
principal amount of the Loans.
"Subsidiary" means, as to any Person, any corporation or other entity
of which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person; unless
otherwise specified, "Subsidiary" means a Subsidiary of the Borrower.
"Taxes" has the meaning set forth in Section 8.04(a).
"Termination Date" means November 14, 1997 or, if such day is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
"Wholly-Owned Consolidated Subsidiary" means any Consolidated
Subsidiary all of the shares of capital stock or other ownership interests of
which (except directors' qualifying shares) are at the time directly or
indirectly owned by the Borrower.
SECTION 1.02. 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, applied
on a basis consistent (except for changes concurred in by the Borrower's
independent public accountants) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to
11
the Banks; provided that, if the Borrower notifies the Agent that the Borrower
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 Agent notifies the Borrower that the Required Banks wish to amend
Article V for such purpose), then the Borrower'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, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to the Borrower and the Required
Banks.
SECTION 1.03. Types of Borrowings. The term "Borrowing" denotes the
aggregation of Loans of one or more Banks to be made to the Borrower pursuant to
Article II on a single date and for a single Interest Period. Borrowings are
classified for purposes of this Agreement either by reference to the pricing of
Loans comprising such Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing
comprised of Euro-Dollar Loans) or by reference to the provisions of Article II
under which participation therein is determined (i.e., a "Committed Borrowing"
is a Borrowing under Section 2.01 in which all Banks participate in proportion
to their Commitments, while a "Money Market Borrowing" is a Borrowing under
Section 2.03 in which the Bank participants are determined on the basis of their
bids in accordance therewith).
SECTION 1.04. United States Dollars. Each reference herein to
"dollars" or "$" shall refer to United States Dollars.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. Each Bank severally agrees, on the
terms and conditions set forth in this Agreement, to make loans to the Borrower
pursuant to this Section from time to time prior to the Termination Date in
amounts such that the aggregate principal amount of Committed Loans by such Bank
at any one time outstanding shall not exceed the amount of its Commitment. Each
Borrowing under this Section shall be in an aggregate principal amount of
$5,000,000 or any larger multiple of $1,000,000 (except that any such Borrowing
may be in the aggregate amount available in accordance with Section
12
3.02(e)) and shall be made from the several Banks ratably in proportion to their
respective Commitments. Within the foregoing limits, the Borrower may borrow
under this Section, repay, or to the extent permitted by Section 2.11, prepay
Loans and reborrow at any time prior to the Termination Date.
SECTION 2.02. Notice of Committed Borrowing. The Borrower shall give
the Agent notice (such notice to be signed by any two of the President or
Executive Vice-President(s) or any one of the President or Executive Vice-
President(s) together with any one of the Senior Vice-President(s) signing
jointly and hereinafter referred to as a "Notice of Committed Borrowing") not
later than 10:30 A.M. (New York City time) on (x) the date of each Base Rate
Borrowing, (y) the second Domestic Business Day before each CD Borrowing and (z)
the third Euro-Dollar Business Day before each Euro-Dollar Borrowing,
specifying:
(a) the date of such Borrowing, which shall be a Domestic Business Day
in the case of a Domestic Borrowing or a Euro-Dollar Business Day in the
case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to be CD Loans,
Base Rate Loans or Euro-Dollar Loans, and
(d) in the case of a Fixed Rate Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
SECTION 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to Committed Borrowings
pursuant to Section 2.01, the Borrower may, as set forth in this Section,
request the Banks prior to the Termination Date to make offers to make Money
Market Loans to the Borrower. The Banks may, but shall have no obligation to,
make such offers and the Borrower may, but shall have no obligation to, accept
any such offers in the manner set forth in this Section.
(b) Money Market Quote Request. When the Borrower wishes to request
offers to make Money Market Loans under this Section, it shall transmit to the
Agent by telex or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit B hereto so as to be
13
received no later than 10:30 A.M. (New York City time) on (x) the fifth Euro-
Dollar Business Day prior to the date of Borrowing proposed therein, in the case
of a LIBOR Auction or (y) the Domestic Business Day next preceding the date of
Borrowing proposed therein, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the Agent shall have
mutually agreed and shall have notified to the Banks not later than the date of
the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Dollar
Business Day in the case of a LIBOR Auction or a Domestic Business Day in
the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be $5,000,000
or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto, subject
to the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set forth a
Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five Euro-Dollar Business Days (or such other
number of days as the Borrower and the Agent may agree) of any other Money
Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt of a
Money Market Quote Request, the Agent shall send to the Banks by telex or
facsimile transmission an Invitation for Money Market Quotes substantially in
the form of Exhibit C hereto, which shall constitute an invitation by the
Borrower to each Bank to submit Money Market Quotes offering to make the Money
Market Loans to which such Money Market Quote Request relates in accordance with
this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each Bank
may submit a Money Market Quote containing an offer or offers to make Money
Market Loans in response to any Invitation for Money Market Quotes. Each Money
Market Quote must comply with the requirements of this subsection (d) and must
be submitted to the Agent by telex
14
or facsimile transmission at its offices specified in or pursuant to Section
10.01 not later than (x) 2:00 P.M. (New York City time) on the fourth Euro-
Dollar Business Day prior to the proposed date of Borrowing, in the case of a
LIBOR Auction or (y) 9:30 A.M. (New York City time) on the proposed date of
Borrowing, in the case of an Absolute Rate Auction (or, in either case, such
other time or date as the Borrower and the Agent shall have mutually agreed and
shall have notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for which
such change is to be effective); provided that Money Market Quotes submitted by
the Agent (or any affiliate of the Agent) in the capacity of a Bank may be
submitted, and may only be submitted, if the Agent or such affiliate notifies
the Borrower of the terms of the offer or offers contained therein not later
than (x) one hour prior to the deadline for the other Banks, in the case of a
LIBOR Auction or (y) 15 minutes prior to the deadline for the other Banks, in
the case of an Absolute Rate Auction. Subject to Articles III and VI, any Money
Market Quote so made shall be irrevocable except with the written consent of the
Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the form of
Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which each such
offer is being made, which principal amount (w) may be greater than or less
than the Commitment of the quoting Bank, (x) must be $5,000,000 or a larger
multiple of $1,000,000, (y) may not exceed the principal amount of Money
Market Loans for which offers were requested and (z) may be subject to an
aggregate limitation as to the principal amount of Money Market Loans for
which offers being made by such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin above or below the
applicable London Interbank Offered Rate (the "Money Market Margin")
offered for each such Money Market Loan, expressed as a percentage
(specified to the nearest 1/10,000th of 1%) to be added to or subtracted
from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of interest per
annum (specified to the nearest
15
1/10,000th of 1%) (the "Money Market Absolute Rate") offered for each such
Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D hereto or does
not specify all of the information required by subsection (d)(ii);
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set forth in
the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. The Agent shall promptly notify the Borrower
of the terms (x) of any Money Market Quote submitted by a Bank that is in
accordance with subsection (d) and (y) of any Money Market Quote that amends,
modifies or is otherwise inconsistent with a previous Money Market Quote
submitted by such Bank with respect to the same Money Market Quote Request. Any
such subsequent Money Market Quote shall be disregarded by the Agent unless such
subsequent Money Market Quote is submitted solely to correct a manifest error in
such former Money Market Quote. The Agent's notice to the Borrower shall
specify (A) the aggregate principal amount of Money Market Loans for which
offers have been received for each Interest Period specified in the related
Money Market Quote Request, (B) the respective principal amounts and Money
Market Margins or Money Market Absolute Rates, as the case may be, so offered
and (C) if applicable, limitations on the aggregate principal amount of Money
Market Loans for which offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:30 A.M.
(New York City time) on (x) the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) the
16
proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the Agent shall have
mutually agreed and shall have notified to the Banks not later than the date of
the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective), the Borrower shall notify the
Agent of its acceptance or non-acceptance of the offers so notified to it
pursuant to subsection (e). In the case of acceptance, such notice (such notice
to be signed by any two of the President or Executive Vice-President(s) or any
one of the President or Executive Vice-President(s) together with any one of the
Senior Vice-President(s) signing jointly and hereinafter referred to as a
"Notice of Money Market Borrowing") shall specify the aggregate principal amount
of offers for each Interest Period that are accepted. The Borrower may accept
any Money Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market Borrowing may
not exceed the applicable amount set forth in the related Money Market
Quote Request,
(ii) the principal amount of each Money Market Borrowing must be
$5,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of ascending
Money Market Margins or Money Market Absolute Rates, as the case may be,
and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the requirements
of this Agreement.
(g) Allocation by Agent. If offers are made by two or more Banks with
the same Money Market Margins or Money Market Absolute Rates, as the case may
be, for a greater aggregate principal amount than the amount in respect of which
such offers are accepted for the related Interest Period, the principal amount
of Money Market Loans in respect of which such offers are accepted shall be
allocated by the Agent among such Banks as nearly as possible (in multiples of
$1,000,000, as the Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. Determinations by the Agent of the amounts of
Money Market Loans shall be conclusive in the absence of manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans.
17
(a) Upon receipt of a Notice of Borrowing, the Agent shall promptly
notify each Bank of the contents thereof and of such Bank's share (if any) of
such Borrowing and such Notice of Borrowing shall not thereafter be revocable by
the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the date of
each Borrowing, each Bank participating therein shall (except as provided in
subsection (c) of this Section) make available its share of such Borrowing, in
Federal or other funds immediately available in New York City, to the Agent at
its address referred to in Section 10.01. Unless the Agent determines that any
applicable condition specified in Article III has not been satisfied, the Agent
will make the funds so received from the Banks available to the Borrower at the
Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank, such
Bank shall apply the proceeds of its new Loan to make such repayment and only an
amount equal to the difference (if any) between the amount being borrowed and
the amount being repaid shall be made available by such Bank to the Agent as
provided in subsection (b), or remitted by the Borrower to the Agent as provided
in Section 2.12, as the case may be.
(d) Unless the Agent shall have received notice from a Bank prior to
the date of any Borrowing that such Bank will not make available to the Agent
such Bank's share of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such Borrowing in
accordance with subsections (b) and (c) of this Section 2.04 and the Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Agent, such Bank and the Borrower severally agree to
repay to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Agent, at (i) in the
case of the Borrower, a rate per annum equal to the interest rate applicable
thereto pursuant to Section 2.07 and (ii) in the case of such Bank, the Federal
Funds Rate. If such Bank shall repay to the Agent such corresponding amount,
such amount so repaid shall constitute such Bank's Loan included in such
Borrowing for purposes of this Agreement.
SECTION 2.05. Notes. (a) The Loans of each Bank shall be evidenced
by a single Note payable to the order of
18
such Bank for the account of its Applicable Lending Office in an amount equal to
the aggregate unpaid principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent, request
that its Loans of a particular type be evidenced by a separate Note in an amount
equal to the aggregate unpaid principal amount of such Loans. Each such Note
shall be in substantially the form of Exhibit A hereto with appropriate
modifications to reflect the fact that it evidences solely Loans of the relevant
type. Each reference in this Agreement to the "Note" of such Bank shall be
deemed to refer to and include any or all of such Notes, as the context may
require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(a), the
Agent shall forward such Note to such Bank. Each Bank shall record the date,
amount, type and maturity of each Loan made by it and the date and amount of
each payment of principal made by the Borrower with respect thereto, and may, if
such Bank so elects in connection with any transfer or enforcement of its Note,
endorse on the schedule forming a part thereof appropriate notations to evidence
the foregoing information with respect to each such Loan then outstanding;
provided that the failure of any Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Notes. Each Bank is hereby irrevocably authorized by the Borrower so to
endorse its Note and to attach to and make a part of its Note a continuation of
any such schedule as and when required.
SECTION 2.06. Maturity of Loans. Each Loan included in any Borrowing
shall mature, and the principal amount thereof shall be due and payable, on the
last day of the Interest Period applicable to such Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the date
such Loan is made until it becomes due, at a rate per annum equal to the Base
Rate for such day. Such interest shall be payable for each Interest Period on
the last day thereof. Any overdue principal of or interest on any Base Rate Loan
shall bear interest, payable on demand, for each day until paid at a rate per
annum equal to the sum of 2% plus the rate otherwise applicable to Base Rate
Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for each day during the Interest Period applicable thereto, at a
rate per annum
19
equal to the sum of the CD Margin plus the Adjusted CD Rate applicable to such
Interest Period; provided that if any CD Loan or any portion thereof shall, as a
result of clause (2)(b) of the definition of Interest Period, have an Interest
Period of less than 30 days, such portion shall bear interest during such
Interest Period at the rate applicable to Base Rate Loans during such period.
Such interest shall be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than 90 days, at intervals of 90 days
after the first day thereof. Any overdue principal of or interest on any CD Loan
shall bear interest, payable on demand, for each day until paid at a rate per
annum equal to the sum of 2% plus the higher of (i) the sum of the CD Margin
plus the Adjusted CD Rate applicable to the Interest Period for such Loan and
(ii) the rate applicable to Base Rate Loans for such day.
"CD Margin" means 0.400% per annum.
The "Adjusted CD Rate" applicable to any Interest Period means a rate
per annum determined pursuant to the following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
----------------
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the rate of
interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum bid
at 10:00 A.M. (New York City time) (or as soon thereafter as practicable) on the
first day of such Interest Period by two or more New York certificate of deposit
dealers of recognized standing for the purchase at face value from each CD
Reference Bank of its certificates of deposit in an amount comparable to the
principal amount of the CD Loan of such CD Reference Bank to which such Interest
Period applies and having a maturity comparable to such Interest Period.
20
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of new non-personal time deposits in dollars in New York City having a
maturity comparable to the related Interest Period and in an amount of $100,000
or more. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate in
effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. (S) 327.4(a) (or any successor provision) to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of such institution in the United
States. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for such
day plus the London Interbank Offered Rate applicable to such Interest Period.
Such interest shall be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than three months, at intervals of three
months after the first day thereof.
"Euro-Dollar Margin" means 0.285% per annum.
The "London Interbank Offered Rate" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16 of 1%)
of the respective rates per annum at which deposits in dollars are offered to
each of the Euro-Dollar Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the
first day of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference Bank to
which such Interest Period is to apply and for a period of time comparable to
such Interest Period.
21
(d) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day until paid at a rate per
annum equal to the higher of (i) the sum of 2% plus the Euro-Dollar Margin plus
the London Interbank Offered Rate applicable to the Interest Period for such
Loan and (ii) the sum of 2% plus the Euro-Dollar Margin plus the quotient
obtained (rounded upward, if necessary, to the next higher 1/100 of 1%) by
dividing (x) the average (rounded upward, if necessary, to the next higher 1/16
of 1%) of the respective rates per annum at which one day (or, if such amount
due remains unpaid more than three Euro-Dollar Business Days, then for such
other period of time not longer than six months as the Agent may select)
deposits in dollars in an amount approximately equal to such overdue payment due
to each of the Euro-Dollar Reference Banks are offered to such Euro-Dollar
Reference Bank in the London interbank market for the applicable period
determined as provided above by (y) 1.00 minus the Euro-Dollar Reserve
Percentage (or, if the circumstances described in clause (a) or (b) of Section
8.01 shall exist, at a rate per annum equal to the sum of 2% plus the rate
applicable to Base Rate Loans for such day).
(e) Subject to Section 8.01(a), each Money Market LIBOR Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the sum of the London
Interbank Offered Rate for such Interest Period (determined in accordance with
Section 2.07(c) as if the related Money Market LIBOR Borrowing were a Committed
Euro-Dollar Borrowing) plus (or minus) the Money Market Margin quoted by the
Bank making such Loan in accordance with Section 2.03. Each Money Market
Absolute Rate Loan shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate per annum equal
to the Money Market Absolute Rate quoted by the Bank making such Loan in
accordance with Section 2.03. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof. Any overdue
principal of or interest on any Money Market Loan shall bear interest, payable
on demand, for each day until paid at a rate per annum equal to the sum of 2%
plus the Base Rate for such day.
(f) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall give prompt notice to the Borrower and the
participating Banks of each rate of interest so determined, and its
determination
22
thereof shall be conclusive in the absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference Bank
does not furnish a timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations furnished by the
remaining Reference Bank or Banks or, if none of such quotations is available on
a timely basis, the provisions of Section 8.01 shall apply.
SECTION 2.08. Facility Fee. The Borrower shall pay to the Agent for
the account of the Banks ratably a facility fee at the rate of 0.090% per annum.
Such facility fee shall accrue (i) from and including the Closing Date to but
excluding the Termination Date (or earlier date of termination of the
Commitments in their entirety), on the daily aggregate amount of the Commitments
(whether used or unused) and (ii) from and including the Termination Date or
such earlier date of termination to but excluding the date the Loans shall be
repaid in their entirety, on the daily aggregate outstanding principal amount of
the Loans. Accrued fees under this Section shall be payable quarterly in
arrears on each March 31, June 30, September 30 and December 31 and upon the
date of termination of the Commitments in their entirety (and, if later, the
date the Loans shall be repaid in their entirety).
SECTION 2.09. Optional Termination or Reduction of Commitments. The
Borrower may, upon at least three Domestic Business Days' notice to the Agent,
(i) terminate the Commitments at any time, if no Loans are outstanding at such
time or (ii) ratably reduce from time to time by an aggregate amount of
$25,000,000 or any larger multiple of $5,000,000, the aggregate amount of the
Commitments in excess of the aggregate outstanding principal amount of the
Loans. Upon receipt of any notice pursuant to this Section 2.09, the Agent
shall promptly notify the Banks of the contents of such notice.
SECTION 2.10. Scheduled Termination of Commitments. The Commitments
shall terminate on the Termination Date, and any Loans then outstanding
(together with accrued interest thereon) shall be due and payable on such date.
SECTION 2.11. Optional Prepayments. (a) Subject in the case of any
Fixed Rate Borrowing to Section 2.13, the Borrower may, in the case of any CD
Borrowing, upon at least three Domestic Business Days' notice to the Agent,
prepay
23
such CD Borrowing, or, in the case of any other Domestic Borrowing (or
any Money Market Borrowing bearing interest at the Base Rate pursuant to Section
8.01(a)), upon at least one Domestic Business Day's notice to the Agent, prepay
such other Domestic Borrowing, or in the case of any Euro-Dollar Borrowing, upon
at least three Euro-Dollar Business Days' notice to the Agent, prepay any Euro-
Dollar Borrowing, in each case in whole at any time, or from time to time in
part in amounts aggregating $5,000,000 or any larger multiple of $1,000,000, by
paying the principal amount to be prepaid together with accrued interest thereon
to the date of prepayment. Each such optional prepayment shall be applied to
prepay ratably the Loans of the several Banks included in such Borrowing.
(b) Except as provided in Section 2.11(a), the Borrower may not
prepay all or any portion of the principal amount of any Money Market Loan prior
to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this Section,
the Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share (if any) of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments. (a) The Borrower
shall make each payment of principal of, and interest on, the Loans and of fees
hereunder, not later than 2:00 P.M. (New York City time) on the date when due,
in Federal or other funds immediately available in New York City and in the
lawful currency of the United States, to the Agent at its address referred to in
Section 10.01. The Agent will promptly distribute to each Bank its ratable
share of each such payment received by the Agent for the account of the Banks.
Whenever any payment of principal of, or interest on, the Domestic Loans or of
fees shall be due on a day which is not a Domestic Business Day, the date for
payment thereof shall be extended to the next succeeding Domestic Business Day.
Whenever any payment of principal of, or interest on, the Euro-Dollar Loans
shall be due on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next preceding Euro-Dollar
Business Day. Whenever any payment of principal of, or interest on, the Money
Market Loans shall be due on a day which is not a Euro-Dollar Business Day, the
date for payment thereof shall be extended to the next succeeding Euro-Dollar
Business Day. If the date for any payment of
24
principal is extended by operation of law or otherwise, interest thereon shall
be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such Bank. If and to the
extent that the Borrower shall not have so made such payment, each Bank shall
repay to the Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan (pursuant to Article II, VI or
VIII or otherwise) on any day other than the last day of the Interest Period
applicable thereto, or the last day of an applicable period fixed pursuant to
Section 2.07(d), or if the Borrower fails to borrow or prepay any Fixed Rate
Loans after notice has been given to any Bank in accordance with Section 2.04(a)
or 2.11(c), the Borrower shall reimburse each Bank within 15 days after demand
for any resulting loss or expense incurred by it (or by an existing or, in the
case of the failure of the Borrower to borrow any Fixed Rate Loans, prospective
Participant in the related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties, but
excluding loss of margin for the period after any such payment or failure to
borrow or prepay, provided that such Bank shall have delivered to the Borrower a
certificate as to the amount of such loss or expense and setting forth the
calculation thereof, which certificate shall be conclusive in the absence of
manifest error.
SECTION 2.14. Computation of Interest and Fees. Interest based on the
Prime Rate hereunder shall be computed on the basis of a year of 365 days (or
366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and all
facility fees shall be computed on the basis of a year of 360 days and paid for
the actual number of days elapsed (including the first day but excluding the
last day).
25
SECTION 2.15. Regulation D Compensation. For so long as any Bank
maintains reserves against "Eurocurrency liabilities" (or any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of such Bank to United
States residents), and as a result the cost to such Bank (or its Euro-Dollar
Lending Office) of making or maintaining its Euro-Dollar Loans is increased,
then such Bank may require the Borrower to pay, contemporaneously with each
payment of interest on the Euro-Dollar Loans, additional interest on the related
Euro-Dollar Loan of such Bank at a rate per annum up to but not exceeding the
excess of (i) (A) the applicable London Interbank Offered Rate divided by (B)
one minus the Euro-Dollar Reserve Percentage over (ii) the applicable London
Interbank Offered Rate. Any Bank wishing to require payment of such additional
interest (x) shall so notify the Borrower and the Agent, in which case such
additional interest on the Euro-Dollar Loans of such Bank shall be payable to
such Bank at the place indicated in such notice with respect to each Interest
Period commencing at least three Euro-Dollar Business Days after the giving of
such notice and (y) shall furnish to the Borrower at least five Euro-Dollar
Business Days prior to each date on which interest is payable on the Euro-Dollar
Loans an officer's certificate setting forth the amount to which such Bank is
then entitled under this Section (which shall be consistent with such Bank's
good faith estimate of the level at which the related reserves are maintained by
it). Each such certificate shall be accompanied by such information as the
Borrower may reasonably request as to the computation set forth therein.
ARTICLE III
CONDITIONS
SECTION 3.01. Closing. The closing hereunder shall occur upon (x)
termination of the Commitments (as defined in the Credit Agreement referred to
below in this clause (x)) under the Credit Agreement dated as of November 17,
1995 among the Borrower, the Guarantors, the banks listed therein and Xxxxxx
Guaranty Trust Company of New York, as agent, and payment in full of all amounts
owing thereunder to any of such banks or such agent and (y) receipt by the Agent
of the following documents, each dated the Closing Date unless otherwise
indicated:
26
(a) a duly executed Note for the account of each Bank dated on or
before the Closing Date complying with the provisions of Section 2.05;
(b) an opinion of Xxxxxx and Calder, counsel for the Borrower,
substantially in the form of Exhibit E hereto and covering such additional
matters relating to the transactions contemplated hereby as the Required
Banks may reasonably request;
(c) an opinion of Xxxxxxx, Xxxx & Xxxxxxx, special Bermuda counsel
for the Guarantors, substantially in the form of Exhibit F hereto and
covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(d) an opinion of Xxxxx, Xxxxx & Xxxxx, New York counsel for the
Borrower and the Guarantors, substantially in the form of Exhibit G hereto
and covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request;
(e) an opinion of Xxxxx Xxxx & Xxxxxxxx, special United States
counsel for the Agent, substantially in the form of Exhibit H hereto and
covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(f) a letter from CT System in New York, New York, New York,
substantially in the form of Exhibit J hereto, evidencing CT System's
agreement to act as agent for service of process for the Obligors pursuant
to Section 10.10(b); and
(g) all documents the Agent may reasonably request relating to the
existence of the Borrower and the Guarantors, the corporate authority for
and the validity of this Agreement and the Notes, and any other matters
relevant hereto, all in form and substance satisfactory to the Agent.
The Agent shall promptly notify the Borrower and the Banks of the Closing Date,
and such notice shall be conclusive and binding on all parties hereto.
SECTION 3.02. Borrowings. The obligation of any Bank to make a Loan
on the occasion of any Borrowing is subject to the satisfaction of the following
conditions:
27
(a) receipt by the Agent of evidence satisfactory to it of the
adoption by the Board of Directors of the Borrower of a resolution, in form
and substance satisfactory to the Agent, to the effect that the execution,
delivery and performance of this Agreement by the Borrower is approved and
of evidence satisfactory to the Agent that such resolution is in full force
and effect;
(b) receipt by the Agent of evidence satisfactory to it of the
adoption by the Board of Directors of each Guarantor of a resolution, in
form and substance satisfactory to the Agent, to the effect that the
execution, delivery and performance of the Credit Agreement by such
Guarantor is approved and of evidence satisfactory to the Agent that the
respective resolution of such Guarantor is in full force and effect;
(c) the fact that the Closing Date shall have occurred on or prior to
December 31, 1996;
(d) receipt by the Agent of a Notice of Borrowing as required by
Section 2.02 or 2.03, as the case may be;
(e) the fact that, immediately after such Borrowing, the aggregate
outstanding principal amount of the Loans will not exceed the aggregate
amount of the Commitments;
(f) the fact that, immediately before and after such Borrowing, no
Default (except, in the case of a Refunding Borrowing, Defaults other than
Defaults under subsection (a) or (g) of Section 6.01) shall have occurred
and be continuing; and
(g) the fact that the representations and warranties of each Obligor
contained in this Agreement (except, in the case of a Refunding Borrowing,
the representations and warranties set forth in Sections 4.04(c), (e) and
(g) and 4.05 as to any matter which has theretofore been disclosed in
writing by the Borrower to the Banks) shall be true on and as of the date
of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Obligors on the date of such Borrowing as to the facts specified in clauses
(e), (f) and (g) of this Section.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Obligors jointly and severally represent and warrant that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
company limited by shares and each of the Guarantors is a limited liability
company, in each case duly incorporated and validly existing under the laws of
its jurisdiction of incorporation and the Borrower is in good standing under the
laws of the Cayman Islands. Each of the Obligors has all corporate powers and
all material governmental licenses, authorizations, consents and approvals
required to carry on its respective business as now conducted. Each of the
Guarantors is a Wholly-Owned Consolidated Subsidiary of the Borrower.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by each Obligor of this
Agreement and by the Borrower of the Notes are within its corporate powers, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the Memorandum of Association, Articles of Association or
Bye-Laws (or any comparable document) of any Obligor or of any agreement,
judgment, injunction, order, decree or other instrument binding upon any Obligor
or any of their respective Subsidiaries or result in the creation or imposition
of any Lien on any asset of any Obligor or any of their respective Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of each Obligor and each Note, when executed and delivered in
accordance with this Agreement, will constitute a valid and binding obligation
of the Borrower, in each case enforceable in accordance with its terms.
SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of September 30, 1995 and the related consolidated
statements of operations, shareholders' equity and cash flows for the fiscal
year then ended, reported on by Coopers & Xxxxxxx,
29
copies of which have been delivered to each of the Banks, fairly present, in all
material respects, in conformity with generally accepted accounting principles,
the consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such fiscal year.
(b) The unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of June 30, 1996 and the related unaudited
consolidated statements of operations and cash flows for the nine months then
ended, copies of which have been delivered to each of the Banks, fairly present,
in all material respects, in conformity with generally accepted accounting
principles applied on a basis consistent with the financial statements referred
to in subsection (a) of this Section, the consolidated financial position of the
Borrower and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such nine month period
(subject to normal year-end adjustments).
(c) Since June 30, 1996 there has been no material adverse change in
the business, financial position, or results of operations of the Borrower and
its Consolidated Subsidiaries, considered as a whole.
(d) The consolidated balance sheet of ACE Insurance and its
Consolidated Subsidiaries as of September 30, 1995 and the related consolidated
statements of operations and retained earnings and of cash flows for the fiscal
year then ended, all reported on by Coopers & Xxxxxxx, copies of which have been
delivered to each of the Banks, fairly present, in all material respects, in
conformity with generally accepted accounting principles, the consolidated
financial position of ACE Insurance and its Consolidated Subsidiaries as of such
date and their consolidated results of operations and retained earnings and cash
flows for such fiscal year.
(e) Since June 30, 1996 there has been no material adverse change in
the business, financial position or results of operations of ACE Insurance and
its Consolidated Subsidiaries, considered as a whole.
(f) The balance sheet of CODA as of October 31, 1995 and the related
statements of operations and retained earnings and of cash flows for the fiscal
year then ended, all reported on by KPMG Peat Marwick, copies of which have been
delivered to each of the Banks, fairly present, in all material respects, in
conformity with generally accepted accounting principles, the financial position
of CODA as of
30
such date and its results of operations and retained earnings and cash flows for
such fiscal year.
(g) Since July 31, 1996 there has been no material adverse change in
the business, financial position or results of operations of CODA and its
Consolidated Subsidiaries, considered as a whole.
SECTION 4.05. Litigation. There is no action, suit or proceeding
pending against, or to the knowledge of the Borrower threatened against or
affecting, the Borrower or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official in which there is a
reasonable likelihood of an adverse decision which could materially adversely
affect the business, consolidated financial position or consolidated results of
operations of the Borrower and its Consolidated Subsidiaries, considered as a
whole, or which in any manner draws into question the validity of this Agreement
or the Notes.
SECTION 4.06. ERISA. Neither the Borrower, nor any Guarantor, nor
any member of their respective ERISA Groups, maintains or contributes to, or has
within the previous six years (whether or not while a member of such Person's
current ERISA Group) maintained or contributed to, or been required to maintain
or been jointly and severally liable for contributions to, or liability upon
withdrawal from, any plan or arrangement subject to (i) the minimum funding
standards of ERISA and the Internal Revenue Code, (ii) Part 3 of Subtitle B of
Title I of ERISA or (iii) Title IV of ERISA.
SECTION 4.07. Taxes. The Borrower and its Subsidiaries have filed
all income tax returns and all other material tax returns which are required to
be filed by them and have paid all taxes due pursuant to such returns or
pursuant to any assessment received by the Borrower or any Subsidiary. The
charges, accruals and reserves on the books of the Borrower and its Subsidiaries
in respect of taxes or other governmental charges are, in the opinion of the
Borrower, adequate.
SECTION 4.08. Not an Investment Company. No Obligor is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.09. Full Disclosure. All information heretofore furnished
by the Obligors to the Agent or any Bank for purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Borrower to the Agent
31
or any Bank will be, true and accurate in all material respects on the date as
of which such information is stated or certified. The Borrower has disclosed to
the Banks in writing any and all facts which materially and adversely affect or
may affect (to the extent the Obligors can now reasonably foresee) the business,
operations or financial condition of any Obligor and its Consolidated
Subsidiaries, taken as a whole, or the ability of any Obligor to perform its
obligations under this Agreement.
SECTION 4.10. Compliance with Laws. The Borrower and each Subsidiary
are in compliance, in all material respects, with all applicable laws,
ordinances, rules, regulations, guidelines and other requirements of
governmental authorities except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of the
Banks:
(a) as soon as available and in any event within 90 days after the
end of each fiscal year of the Borrower, a consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as of the end of such fiscal
year and the related consolidated statements of operations, shareholders'
equity and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on
in a manner acceptable to the Securities and Exchange Commission or
otherwise reasonably acceptable to the Required Banks by Coopers & Xxxxxxx
or other independent public accountants of nationally recognized standing;
(b) 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 of the
Borrower, a consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such quarter and the related consolidated
statements of operations
32
and cash flows for such quarter and for the portion of the Borrower's
fiscal year ended at the end of such quarter, setting forth in the case of
such statements of operations and cash flows in comparative form the
figures for the corresponding quarter and the corresponding portion of the
Borrower's previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted accounting
principles and consistency by the chief financial officer or the chief
accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
chief financial officer or the chief accounting officer of the Borrower (i)
setting forth in reasonable detail the calculations required to establish
whether the Borrower was in compliance with the requirements of Sections
5.07 to 5.10, inclusive, on the date of such financial statements and (ii)
stating whether any Default exists on the date of such certificate and, if
any Default then exists, setting forth the details thereof and the action
which the Borrower is taking or proposes to take with respect thereto;
(d) within five days after any officer of the Borrower obtains
knowledge of any Default, if such Default is then continuing, a certificate
of the chief financial officer or the chief accounting officer of the
Borrower setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto;
(e) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(f) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) which the Borrower shall have filed with the Securities
and Exchange Commission;
(g) as soon as available and in any event within 20 days after
submission, each statutory statement of the Guarantors (or any of them) in
the form submitted to the Bermuda Department of Insurance;
33
(h) as soon as available and in any event within 120 days after the
end of each fiscal year of each Guarantor, a balance sheet of each
Guarantor as of the end of such fiscal year and the related statements of
income and changes in financial position for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal
year, all reported on by the independent public accountants which reported
on the financial statements referred to in clause (a) above;
(i) promptly upon obtaining knowledge thereof, (i) a copy of any
notice from the 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 either
Guarantor under the Bermuda Insurance Law 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 either Guarantor relating to an
investigation conducted by the Minister of Finance, whether pursuant to
Section 132 of the Bermuda Companies Law 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 either Guarantor; and
(j) from time to time such additional information regarding the
financial position, results of operations or business of the Borrower or
any of its Subsidiaries as the Agent, at the request of any Bank, may
reasonably request from time to time.
SECTION 5.02. Payment of Obligations. The Borrower will pay and
discharge, and will cause each Subsidiary to pay and discharge, at or before
maturity, all their respective material obligations and liabilities, including,
without limitation, tax liabilities, except where the same may be contested in
good faith by appropriate proceedings, and will maintain, and will cause each
Subsidiary to maintain, in accordance with generally accepted accounting
principles, appropriate reserves for the accrual of any of the same.
SECTION 5.03. Maintenance of Property; Insurance. (a) The Borrower
will keep, and will cause each Subsidiary to keep, all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted.
34
(b) The Borrower will maintain, and will cause each Subsidiary to
maintain, physical damage insurance on all real and personal property on an all
risks basis (including the perils of flood and quake), covering the repair and
replacement cost of all such property and consequential loss coverage for
business interruption and extra expense. All such insurance shall be provided by
insurers having an A.M. Best policyholders rating of not less than B+ or such
other insurers as the Required Banks may approve in writing. The Borrower will
deliver to the Banks (i) upon request of any Bank through the Agent from time to
time, full information as to the insurance carried, (ii) within five days of
receipt of notice from any insurer, a copy of any notice of cancellation or
material change in coverage from that existing on the date of this Agreement and
(iii) forthwith, notice of any cancellation or nonrenewal of coverage by the
Borrower.
SECTION 5.04. Conduct of Business and Maintenance of Existence. The
Borrower will continue, and will cause each Subsidiary to continue, to engage in
business of the same general type as now conducted by the Borrower and its
Subsidiaries, and will preserve, renew and keep in full force and effect, and
will cause each Subsidiary to preserve, renew and keep in full force and effect,
their respective existence and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business; provided
that nothing in this Section 5.04 shall prohibit (i) the merger of a Subsidiary
(other than a Guarantor) into the Borrower or the merger or consolidation of a
Subsidiary (other than a Guarantor) with or into another Person if the
corporation surviving such consolidation or merger is a Subsidiary and if, in
each case, after giving effect thereto, no Default shall have occurred and be
continuing or (ii) the termination of the corporate existence of any Subsidiary
(other than a Guarantor) if the Borrower in good faith determines that such
termination is in the best interest of the Borrower and is not materially
disadvantageous to the Banks.
SECTION 5.05. Compliance with Laws. The Borrower will comply, and
cause each Subsidiary to comply, in all material respects with all applicable
laws, ordinances, rules, regulations, guidelines and other requirements of
governmental authorities except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings.
SECTION 5.06. Inspection of Property, Books and Records. The Borrower
will keep, and will cause each
35
Subsidiary to keep, proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in relation to
its business and activities; and will permit, and will cause each Subsidiary to
permit, representatives of any Bank at such Bank's expense to visit and inspect
any of their respective properties, to examine and make abstracts from any of
their respective books and records and to discuss their respective affairs,
finances and accounts with their respective officers, employees and independent
public accountants, all at such reasonable times and as often as may reasonably
be desired.
SECTION 5.07. Leverage. Consolidated Debt will at no time exceed 35%
of Consolidated Tangible Net Worth.
SECTION 5.08. Subsidiary Debt. The Borrower will not permit any of
its Subsidiaries to create, assume or suffer to exist any Debt, except (i) Debt
under the Financing Documents, (ii) Debt owing to the Borrower, (iii) Debt of
Tripar Partnership, a Bermuda general partnership, owing to other Subsidiaries
or Debt of such other Subsidiaries owing to Tripar Partnership, (iv) Debt in
respect of letters of credit issued in the ordinary course of business and (v)
Debt created by exercise of overdraft privileges on a basis not more frequent
than once each calendar month for not more than five Euro-Dollar Business Days
in an amount not to exceed $10,000,000 in the aggregate at any one time.
SECTION 5.09. Minimum Tangible Net Worth. Consolidated Tangible Net
Worth will at no time be less than $1,250,000,000.
SECTION 5.10. Negative Pledge. Neither the Borrower nor any
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement in an aggregate principal or face
amount not exceeding $25,000,000;
(b) any Lien existing on any asset of any corporation at the time
such corporation becomes a Subsidiary and not created in contemplation of
such event;
(c) any Lien on any asset securing Debt incurred or assumed for the
purpose of financing all or any part
36
of the cost of acquiring such asset, provided that such Lien attaches to
such asset concurrently with or within 90 days after the acquisition
thereof;
(d) any Lien on any asset of any corporation existing at the time
such corporation is merged or consolidated with or into the Borrower or a
Subsidiary and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition thereof
by the Borrower or a Subsidiary and not created in contemplation of such
acquisition;
(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, provided that such Debt is not increased and is
not secured by any additional assets;
(g) Liens arising in the ordinary course of its business which (i) do
not secure Debt or Derivatives Obligations, (ii) do not secure any
obligation in an amount exceeding $10,000,000 and (iii) 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;
(h) Liens on cash and cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash
equivalents subject to such Liens may at no time exceed $10,000,000;
(i) Liens on any asset of ACE Insurance securing obligations in
respect of letters of credit to be issued pursuant to any reimbursement
agreement entered into among ACE Insurance, the Banks and Xxxxxx Guaranty
Trust Company of New York, as issuing bank and agent; and
(j) Liens not otherwise permitted by the foregoing clauses of this
Section securing Debt in an aggregate principal or face amount at any date
not to exceed 5% of Consolidated Tangible Net Worth.
SECTION 5.11. Consolidations, Mergers and Sales of Assets. No
Obligor will (i) consolidate with or merge into any other Person or (ii) sell,
lease or otherwise transfer, directly or indirectly, all or any substantial part
of its assets to any other Person.
37
SECTION 5.12. Use of Proceeds. The proceeds of the Loans made under
this Agreement will be used by the Borrower for its general corporate purposes.
None of such proceeds will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of buying or carrying any "margin
stock" within the meaning of Regulation U.
SECTION 5.13. ERISA. Neither the Borrower, nor any Guarantor, nor
any member of their respective ERISA Groups will maintain or contribute to, or
become obligated to maintain or become jointly and severally liable for
contributions to, or have liability upon withdrawal from, any plan or
arrangement subject to (i) the minimum funding standards of ERISA and the
Internal Revenue Code, (ii) Part 3 of Subtitle B of Title I of ERISA or (iii)
Title IV of ERISA.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any Loan
or shall fail to pay within five Business Days of the due date thereof any
interest on any Loan, any fees or any other amount payable hereunder or
either Guarantor shall fail to pay when due any such principal, interest,
fees or other amount payable hereunder; provided that, for purposes of this
Section 6.01(a), no such payment default by the Borrower shall be
continuing if the Guarantors pay the amount thereof at the time and
otherwise in the manner provided in Article IX;
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.07 through 5.12, inclusive;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause
(a) or (b) above) for 30 days after notice thereof has been given to the
Borrower by the Agent at the request of any Bank;
38
(d) any representation, warranty, certification or statement made by
any Obligor in this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have
been incorrect in any material respect when made (or deemed made);
(e) the Borrower or any Subsidiary shall fail to make any payment in
respect of any Material Financial Obligations when due or within any
applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables (or, with the
giving of notice or lapse of time or both, would enable) the holder of such
Debt or any Person acting on such holder's behalf to accelerate the
maturity thereof;
(g) (i)(x) a resolution or other similar action is passed authorizing
the voluntary winding up of the Borrower or any other similar action with
respect to the Borrower or a petition is filed for the winding up of the
Borrower or the taking of any other similar action with respect to the
Borrower in the Grand Court of the Cayman Islands or (y) any corporate
action is taken authorizing the winding up, the liquidation, any
arrangement or the taking of any other similar action of or with respect to
either Guarantor or authorizing any corporate action to be taken to
facilitate any such winding up, liquidation, arrangement or other similar
action or any petition shall be filed seeking the winding up, the
liquidation, any arrangement or the taking of any other similar action of
or with respect to either Guarantor by the Registrar of Companies in
Bermuda, one or more holders of insurance policies or reinsurance
certificates issued by either Guarantor or by any other Person or Persons
or any petition shall be presented for the winding up of either Guarantor
to a court of Bermuda as provided under the Bermuda Companies Law and in
either such case such petition shall remain undismissed and unstayed for a
period of 60 days or any creditors' or members' voluntary winding up of
either Guarantor as provided under the Bermuda Companies Law shall be
commenced or any receiver shall be appointed by a creditor of either
Guarantor or by a court of Bermuda on the application of a creditor of
either Guarantor as provided under any instrument giving rights for the
appointment of a receiver;
39
(ii) a proceeding shall be commenced by any Person seeking the
rehabilitation, liquidation, dissolution or conservation of the assets of
either Guarantor or any substantial part thereof or any similar remedy and
such proceedings shall remain undismissed and unstayed for a period of 60
days;
(iii) the Borrower or any Subsidiary shall commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of
a trustee, receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, or shall consent to any such
relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing; or
(iv) an involuntary case or other proceeding shall be commenced
against the Borrower or any Subsidiary seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed
for a period of 60 days;
(h) a judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against the Borrower or any Subsidiary and
such judgment or order shall continue unsatisfied and unstayed for a period
of 30 days; or
(i) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said Act) of 20% or more of
the outstanding shares of common stock of the Borrower; or, during any
period of 12 consecutive calendar months, individuals who were directors of
the Borrower on the first day of such
40
period shall cease to constitute a majority of the board of directors of
the Borrower; or either Guarantor shall cease to be a Wholly-Owned
Consolidated Subsidiary of the Borrower;
(j) any court or arbitrator or any governmental body, agency or
official which has jurisdiction in the matter shall decide, rule or order
that any provision of any of the Financing Documents is invalid or
unenforceable in any material respect, or any Obligor shall so assert in
writing; or
(k) the registration of either Guarantor as an insurer shall be
revoked, suspended or otherwise have restrictions or conditions placed upon
it unless, in the case of the placing of any such restrictions or
conditions, such restrictions or conditions could not have a material
adverse effect on the interests of the Agent and the Banks under the
Financing Documents;
then, and in every such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing more than 50% in aggregate principal
amount of the Loans, by notice to the Borrower declare the Notes (together with
accrued interest thereon) to be, and the Notes (together with accrued interest
thereon) shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Obligors; provided that in the case of any of the Events of
Default specified in clause (g) above with respect to any Obligor, without any
notice to any Obligor or any other act by the Agent or the Banks, the
Commitments shall thereupon terminate and the Notes (together with accrued
interest thereon) shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Obligors.
SECTION 6.02. Notice of Default. The Agent shall give notice to the
Borrower under Section 6.01(c) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
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ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under the Financing Documents as are delegated to the
Agent by the terms hereof and thereof, together with all such powers as are
reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Xxxxxx Guaranty Trust Company of
New York shall have the same rights and powers under this Agreement as any other
Bank and may exercise or refrain from exercising the same as though it were not
the Agent, and Xxxxxx Guaranty Trust Company of New York and its affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or affiliate of the Borrower as if
it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent under
this Agreement are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agent shall not be required to take any action
with respect to any Default, except as expressly provided in Article VI.
SECTION 7.04. Consultation with Experts. The Agent may consult with
legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither the Agent nor any of its
affiliates nor any of their respective directors, officers, agents or employees
shall be liable for any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Banks or (ii) in the
absence of its own gross negligence or willful misconduct. Neither the Agent
nor any of its affiliates nor any of their respective directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify (i) any statement, warranty or representation made in
connection with the Financing Documents or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements of any Obligor;
(iii) the satisfaction of any
42
condition specified in Article III, except receipt of items required to be
delivered to the Agent; or (iv) the validity, effectiveness or genuineness of
any Financing Document or any other instrument or writing furnished in
connection herewith. The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex, facsimile transmission or similar writing)
believed by it to be genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with the Financing Documents or
any action taken or omitted by such indemnitees hereunder or thereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such 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 the 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 any action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any time by
giving notice thereof to the Banks and the Borrower. Upon any such resignation,
the Required Banks shall have the right to appoint a successor Agent, which
successor Agent shall be reasonably acceptable to the Borrower. If no successor
Agent shall have been so appointed by the Required Banks, and shall have
accepted such appointment, within 30 days after the retiring Agent gives notice
of resignation, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be a commercial bank organized or licensed under
the laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $50,000,000. Upon the acceptance of its
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the
43
rights and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent.
SECTION 7.09. Agent's Fee. The Borrower shall pay to the Agent for
its own account fees in the amounts and at the times previously agreed upon
between the Borrower and the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any Fixed
Rate Borrowing:
(a) the Agent is advised by the Reference Banks that deposits in
dollars (in the applicable amounts) are not being offered to the Reference
Banks in the relevant market for such Interest Period, or
(b) in the case of a Committed Borrowing, Banks having 50% or more of
the aggregate amount of the Commitments advise the Agent that the Adjusted
CD Rate or the London Interbank Offered Rate, as the case may be, as
determined by the Agent will not adequately and fairly reflect the cost to
such Banks of funding their CD Loans or Euro-Dollar Loans, as the case may
be, for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligations of the Banks to make CD
Loans or Euro-Dollar Loans, as the case may be, shall be suspended. Unless the
Borrower notifies the Agent at least two Domestic Business Days before the date
of any Fixed Rate Borrowing for which a Notice of Borrowing has previously been
given that it elects not to borrow on such date, (i) if such Fixed Rate
Borrowing is a Committed Borrowing, such Borrowing shall instead be made as a
Base Rate Borrowing and (ii) if such Fixed Rate Borrowing is a Money Market
LIBOR Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall
bear interest for each day from and including the first day to but excluding the
last
44
day of the Interest Period applicable thereto at the Base Rate for such day.
SECTION 8.02. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any change
in any applicable law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Euro-Dollar Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its Euro-
Dollar Loans and such Bank shall so notify the Agent, the Agent shall forthwith
give notice thereof to the other Banks and the Borrower, whereupon until such
Bank notifies the Borrower and the Agent that the circumstances giving rise to
such suspension no longer exist, the obligation of such Bank to make Euro-Dollar
Loans shall be suspended. Before giving any notice to the Agent pursuant to this
Section, such Bank shall designate a different Euro-Dollar Lending Office if
such designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such Bank
shall determine that it may not lawfully continue to maintain and fund any of
its outstanding Euro-Dollar Loans to maturity and shall so specify in such
notice, the Borrower shall immediately prepay in full the then outstanding
principal amount of each such Euro-Dollar Loan, together with accrued interest
thereon. Concurrently with prepaying each such Euro-Dollar Loan, the Borrower
shall borrow a Base Rate Loan in an equal principal amount from such Bank (on
which interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks), and such Bank shall make such a Base Rate
Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after
(x) the date hereof, in the case of any Committed Loan or any obligation to make
Committed Loans or (y) the date of the related Money Market Quote, in the case
of any Money Market Loan, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any
45
such authority, central bank or comparable agency shall impose, modify or deem
applicable any reserve (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System, but excluding
(i) with respect to any CD Loan any such requirement included in an applicable
Domestic Reserve Percentage and (ii) with respect to any Euro-Dollar Loan any
such requirement included in an applicable Euro-Dollar Reserve Percentage),
special deposit, insurance assessment (excluding, with respect to any CD Loan,
any such requirement reflected in an applicable Assessment Rate) or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Bank (or its Applicable Lending Office) or shall impose on any
Bank (or its Applicable Lending Office) or on the United States market for
certificates of deposit or the London interbank market any other condition
affecting its Fixed Rate Loans, its Note or its obligation to make Fixed Rate
Loans and the result of any of the foregoing is to increase the cost to such
Bank (or its Applicable Lending Office) of making or maintaining any Fixed Rate
Loan, or to reduce the amount of any sum received or receivable by such Bank (or
its Applicable Lending Office) under this Agreement or under its Note with
respect thereto, by an amount deemed by such Bank to be material, then, within
15 days after demand by such Bank (with a copy to the Agent), the Borrower shall
pay to such Bank such additional amount or amounts as will compensate such Bank
for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days after
demand by such Bank (with a copy to the Agent), the Borrower shall pay to such
Bank such additional amount or amounts as will compensate such Bank (or its
Parent) for such reduction.
46
(c) Each Bank will promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will designate a
different Applicable Lending Office if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank
claiming compensation under this Section and setting forth the additional amount
or amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
SECTION 8.04. Taxes. (a) Any and all payments by any Obligor
hereunder shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all penalties, interest, expenses and similar liabilities with respect
thereto, excluding (i) in the case of each Bank and the Agent, taxes imposed on
its income, and franchise and similar taxes imposed on it, by the jurisdiction
under the laws of which such Bank or the Agent, as the case may be, shall be
organized or any political subdivision thereof, (ii) in the case of each Bank,
taxes imposed on its income, and franchise and similar taxes imposed on it, by
the jurisdiction of such Bank's Applicable Lending Office or any political
subdivision thereof or in which such Bank's principal executive office is
located or any political subdivision thereof and (iii) any Taxes imposed as a
result of a change of such Bank's Applicable Lending Office to the extent such
Taxes would not have been imposed absent such change; provided however, that (x)
a change in such Bank's Applicable Lending Office to which the Obligor has
consented and (y) a change in such Bank's Applicable Lending Office as a result
of legal or regulatory restrictions shall not constitute a change for the
purposes of this Section 8.04 (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). Each Obligor agrees that, if any Obligor shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder to any Bank
or the Agent, (A) the sum payable to such Bank or the Agent shall be increased
as may be necessary so that after making all required deductions for Taxes
(including deductions applicable to additional sums payable under this Section
8.04), such Bank or the Agent, as the case may be, shall receive an amount equal
to the sum it would have received had no such deductions been made, (B) such
Obligor shall make such deductions and (C) such Obligor shall pay the full
47
amount deducted to the relevant taxing authority or other authority in
accordance with applicable law.
(b) In addition, each Obligor agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which shall arise from any payment made under, or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement (all such taxes, charges or levies being hereinafter referred to as
"Other Taxes").
(c) Each Obligor agrees to indemnify each Bank and the Agent for the
full amount of Taxes or Other Taxes (including any Taxes or Other Taxes imposed
on amounts payable under this Section 8.04) paid by such Bank or the Agent or
any penalties, interest, expenses and similar liabilities arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted provided that such Bank has acted in good faith with respect to
such Taxes or Other Taxes and that such Bank reasonably cooperates with the
Obligors in challenging such Taxes or Other Taxes. Each indemnification under
this paragraph (c) shall be made within 30 days from the date such Bank or the
Agent makes demand therefor.
(d) Each Bank shall use reasonable efforts (consistent with legal and
regulatory restrictions) (x) to file any certificate or document or to furnish
any information as reasonably requested by any Obligor pursuant to any
applicable treaty, law, rule or regulation or (y) to designate a different
Lending Office if the making of such a filing, the furnishing of such
information or the designation of such other Lending Office would avoid the need
for or reduce the amount of any additional amounts payable by any Obligor
pursuant to this Section 8.04 and would not, in the reasonable judgment of such
Bank, be disadvantageous to such Bank. Notwithstanding the foregoing, it is
understood and agreed that nothing in this Section 8.04 shall interfere with the
rights of any Bank to conduct its fiscal or tax affairs in such manner as it
deems fit.
(e) Within 90 days after the date of any payment of Taxes, the
Obligors will furnish to the Agent notarized copies for each Bank of the
original receipt evidencing payment thereof. If no Taxes shall be payable in
respect of any payment under this Agreement, the Obligors will, upon the
reasonable request of the Agent, furnish to the Agent a certificate in form
reasonably acceptable to the Agent's counsel confirming that such payment is
exempt from or not subject to Taxes.
48
(f) For any period with respect to which a Bank has failed to provide
the Obligors with the appropriate form pursuant to Section 8.04(d) (unless such
failure is due to a change in treaty, law or regulation occurring subsequent to
the date on which such form originally was required to be provided), such Bank
shall not be entitled to indemnification under Section 8.04(a) or (b) with
respect to Taxes imposed by the United States; provided that if a Bank, which is
otherwise exempt from or subject to a reduced rate of withholding tax, becomes
subject to Taxes because of its failure to deliver a form required hereunder,
the Obligors shall take such steps as such Bank shall reasonably request to
assist such Bank to recover such Taxes.
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03 or 8.04 with respect to its CD Loans or Euro-Dollar Loans and
the Borrower shall, by at least five Euro-Dollar Business Days' prior notice to
such Bank through the Agent, have elected that the provisions of this Section
shall apply to such Bank, then, unless and until such Bank notifies the Borrower
that the circumstances giving rise to such suspension or demand for compensation
no longer exist:
(a) all Loans which would otherwise be made by such Bank as CD Loans
or Euro-Dollar Loans, as the case may be, shall be made instead as Base
Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Fixed Rate Loans of the other Banks),
and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case may
be, has been repaid, all payments of principal which would otherwise be
applied to repay such Fixed Rate Loans shall be applied to repay its Base
Rate Loans instead.
ARTICLE IX
GUARANTY
SECTION 9.01. The Guaranty. Each Guarantor hereby unconditionally,
absolutely and irrevocably guarantees the full and punctual payment (whether at
stated maturity, upon acceleration or otherwise) of all amounts payable by the
Borrower under the Financing Documents including, without limitation, the
principal of and interest on each Note issued by the Borrower pursuant to this
49
Agreement. Upon failure by the Borrower to pay punctually any such amount, each
Guarantor shall forthwith on demand pay the amount not so paid at the place and
in the manner specified in this Agreement.
SECTION 9.02. Guaranty Unconditional. The obligations of each
Guarantor hereunder shall be unconditional, absolute and irrevocable and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of any other Obligor under any of the
Financing Documents, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to any of the
Financing 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
Financing 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 Financing 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 Agent, any Bank
or any other corporation or person, whether in connection with any of the
Financing 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 Financing Documents, or any
provision of applicable law or regulation purporting to prohibit the
payment by any other Obligor of the principal of or interest on any Note or
any other amount payable under any of the Financing Documents; or
(vii) any other act or omission to act or delay of any kind by any
Obligor, the Agent, any Bank or any other corporation or person or any
other circumstance
50
whatsoever which might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of or defense to either
Guarantor's obligations hereunder.
SECTION 9.03. Discharge Only Upon Payment In Full; Reinstatement In
Certain Circumstances. Each Guarantor's obligations hereunder shall remain in
full force and effect until the Commitments shall have terminated and the
principal of and interest on the Notes and all other amounts payable by the
Borrower under the Financing Documents shall have been paid in full. If at any
time any payment of the principal of or interest on any Note or any other amount
payable by the Borrower under the Financing Documents is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of the Borrower or otherwise, each Guarantor's obligations hereunder with
respect to such payment shall be reinstated as though such payment had been due
but not made at such time.
SECTION 9.04. Waiver by each of the Guarantors. Each Guarantor
irrevocably waives acceptance hereof, presentment, demand, protest and any
notice not provided for herein, as well as any requirement that at any time any
action be taken by any corporation or person against any other Obligor or any
other corporation or person.
SECTION 9.05. Subrogation. Each Guarantor irrevocably waives any and
all rights to which it may be entitled, by operation of law or otherwise, upon
making any payment hereunder to be subrogated to the rights of the payee against
the Borrower with respect to such payment or otherwise to be reimbursed,
indemnified or exonerated by the Borrower in respect thereof.
SECTION 9.06. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Borrower under any of the Financing
Documents is stayed upon the insolvency, bankruptcy or reorganization of the
Borrower, all such amounts otherwise subject to acceleration under the terms of
this Agreement shall nonetheless be payable by each Guarantor hereunder
forthwith on demand by the Agent made at the request of the requisite proportion
of the Banks specified in Article VI.
SECTION 9.07. Limit of Liability. The obligations of each Guarantor
hereunder shall be limited to an aggregate amount equal to the largest amount
that would not render its obligations hereunder subject to avoidance under any
applicable bankruptcy, insolvency or similar law.
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ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of any Obligor or the Agent, at its address, facsimile
number or telex number set forth on the signature pages hereof, (y) in the case
of any Bank, at its address, facsimile number or telex number set forth in its
Administrative Questionnaire or (z) in the case of any party, such other
address, facsimile number or telex number as such party may hereafter specify
for the purpose by notice to the Agent and the Borrower. Each such notice,
request or other communication shall be effective (i) if given by telex, when
such telex is transmitted to the telex number specified in this Section and the
appropriate answerback is received, (ii) if given by facsimile transmission,
when transmitted to the facsimile number specified in this Section and
confirmation of receipt is received, (iii) if given by mail, 10 days after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iv) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the Agent under
Article II or Article VIII shall not be effective until received.
SECTION 10.02. No Waivers. No failure or delay by the Agent or any
Bank in exercising any right, power or privilege under any Financing Document
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies provided in the
Financing Documents shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 10.03. Expenses; Indemnification. (a) The Borrower shall pay
(i) all out-of-pocket expenses of the Agent, including fees and disbursements of
special counsel for the Agent, reasonably incurred in connection with the
preparation of the Financing Documents, any waiver or consent hereunder or
thereunder or any amendment hereof or thereof or any Default or alleged Default
hereunder or thereunder and (ii) if an Event of Default occurs, all out-of-
pocket expenses incurred by the Agent and each Bank, including (without
duplication) the fees and disbursements
52
of outside counsel and the allocated cost of inside counsel, in connection with
such Event of Default and collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Agent and each Bank, their
respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be reasonably incurred by such Indemnitee in
connection with any investigative, administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party thereto) brought or
threatened relating to or arising out of the Financing Documents or any actual
or proposed use of proceeds of Loans; provided that no Indemnitee shall have the
right to be indemnified hereunder for such Indemnitee's own gross negligence or
willful misconduct as determined by a court of competent jurisdiction.
SECTION 10.04. Sharing of Set-Offs. Each Bank agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest due
with respect to any Note held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of principal and
interest due with respect to any Note held by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Notes held by the Banks shall be shared by the
Banks pro rata; provided that nothing in this Section shall impair the right of
any Bank to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of the
Borrower other than its indebtedness hereunder. Each Obligor agrees, to the
fullest extent it may effectively do so under applicable law, that any holder of
a participation in a Note, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and other rights
with respect to such participation as fully as if such holder of a participation
were a direct creditor of such Obligor in the amount of such participation.
SECTION 10.05. Amendments and Waivers. Any provision of this
Agreement or the Notes may be amended or
53
waived if, but only if, such amendment or waiver is in writing and is signed by
the Obligors and the Required Banks (and, if the rights or duties of the Agent
are affected thereby, by the Agent); provided that no such amendment or waiver
shall, unless signed by all the Banks, (i) increase or decrease the Commitment
of any Bank (except for a ratable decrease in the Commitments of all Banks) or
subject any Bank to any additional obligation, (ii) reduce the principal of or
rate of interest on any Loan or any fees hereunder, (iii) postpone the date
fixed for any payment of principal of or interest on any Loan or any fees
hereunder or for any reduction or termination of any Commitment, (iv) release
the Guarantors hereunder or (v) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Notes, or the number of Banks,
which shall be required for the Banks or any of them to take any action under
this Section or any other provision of this Agreement.
SECTION 10.06. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Obligors may not
assign or otherwise transfer any of their rights under this Agreement without
the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such participation agreement may provide that such Bank will not agree to
any modification, amendment or waiver of this Agreement described in clause (i),
(ii), (iii), (iv) or (v) of Section 10.05 without the consent of the
Participant. The Borrower agrees that each Participant shall, to the extent
provided in its participation agreement and subject to subsection (e) below, be
entitled to the benefits of Article VIII with respect to its participating
interest. An assignment or other transfer which is not permitted by subsection
(c) or (d) below shall be given effect for
54
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part (equivalent to an
initial Commitment of not less than $5,000,000, unless the Borrower shall
otherwise consent or the assignment is for all of the rights and obligations of
the transferor Bank) of all, of its rights and obligations under this Agreement
and the Notes, and such Assignee shall assume such rights and obligations,
pursuant to an Assignment and Assumption Agreement in substantially the form of
Exhibit I hereto executed by such Assignee and such transferor Bank, with (and
subject to) the subscribed consent of the Borrower, which shall not be
unreasonably withheld, and the Agent; provided that if an Assignee is an
affiliate of such transferor Bank or was a Bank immediately prior to such
assignment, no such consent shall be required; and provided further that such
assignment may, but need not, include rights of the transferor Bank in respect
of outstanding Money Market Loans; and provided further that, unless the
Borrower shall otherwise consent or the assignment is for all of the rights and
obligations of the transferor Bank, the Commitment of such transferor Bank after
giving effect to such assignment (together with the Commitments of its
affiliates) shall not be less than $5,000,000. Upon execution and delivery of
such instrument and payment by such Assignee to such transferor Bank of an
amount equal to the purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank party to this Agreement and shall have
all the rights and obligations of a Bank with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Bank, the Agent and the Borrower
shall make appropriate arrangements so that, if required, a new Note is issued
to the Assignee. In connection with any such assignment, the transferor Bank
shall pay to the Agent an administrative fee for processing such assignment in
the amount of $2,500.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such assignment
shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any
55
greater payment under Section 8.03 or 8.04 than such Bank would have been
entitled to receive with respect to the rights transferred, unless such transfer
is made with the Borrower's prior written consent or by reason of the provisions
of Section 8.02, 8.03 or 8.04 requiring such Bank to designate a different
Applicable Lending Office under certain circumstances or at a time when the
circumstances giving rise to such greater payment did not exist.
SECTION 10.07. Collateral. Each of the Banks represents to the Agent
and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 10.08. Governing Law. This Agreement and each Note shall be
governed by and construed in accordance with the laws of the State of New York.
SECTION 10.09. Counterparts; Integration; Effectiveness. 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. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof. This Agreement shall become effective upon receipt by the Agent of
counterparts hereof signed by each of the parties hereto (or, in the case of any
party as to which an executed counterpart shall not have been received, receipt
by the Agent in form satisfactory to it of telegraphic, telex, facsimile or
other written confirmation from such party of execution of a counterpart hereof
by such party).
SECTION 10.10. Judicial Proceedings. (a) Consent to Jurisdiction.
Each Obligor irrevocably submits to the jurisdiction of any federal court
sitting in New York City and, in the event that jurisdiction cannot be obtained
or maintained in a federal court, to the jurisdiction of any New York State
court sitting in New York City over any suit, action or proceeding arising out
of or relating to any of the Financing Documents. Each Obligor irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such suit, action or
proceeding brought in such court and any claim that any suit, action or
proceeding brought in such a court has been brought in an inconvenient forum.
Each Obligor agrees that a final judgment in any such suit, action or proceeding
brought in such a court shall be
56
conclusive and binding upon it and will be given effect in Bermuda or the Cayman
Islands, as the case may be, to the fullest extent permitted by applicable law
and may be enforced in any federal or New York State court sitting in New York
City (or any other courts to the jurisdiction of which such Obligor is or may be
subject) by a suit upon such judgment, provided that service of process is
effected upon it in one of the manners specified herein or as otherwise
permitted by law.
(b) Appointment of Agent for Service of Process. Each Obligor hereby
irrevocably designates and appoints CT Corporation System having an office on
the date hereof at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 as its authorized
agent, to accept and acknowledge on its behalf, service of any and all process
which may be served in any suit, action or proceeding of the nature referred to
in subsection (a) above in any federal or New York State court sitting in New
York City. Each Obligor represents and warrants that such agent has agreed in
writing to accept such appointment and that a true copy of such designation and
acceptance has been delivered to the Agent. Said designation and appointment
shall be irrevocable until all principal and interest and all other amounts
payable hereunder and under the Notes shall have been paid in full in accordance
with the provisions hereof and thereof. If such agent shall cease so to act,
each Obligor covenants and agrees to designate irrevocably and appoint without
delay another such agent satisfactory to the Agent and to deliver promptly to
the Agent evidence in writing of such other agent's acceptance of such
appointment.
(c) Service of Process. Each Obligor hereby consents to process
being served in any suit, action or proceeding of the nature referred to in
subsection (a) above in any federal or New York State court sitting in New York
City by service of process upon the agent of such Obligor for service of process
in such jurisdiction appointed as provided in subsection (b) above; provided
that, to the extent lawful and possible, notice of said service upon such agent
shall be mailed by registered or certified air mail, postage prepaid, return
receipt requested, to such Obligor at its address specified on the signature
page hereof or to any other address of which such Obligor shall have given
written notice to the Bank. Each Obligor irrevocably waives, to the fullest
extent permitted by law, all claim of error by reason of any such service in
such manner and agrees that such service shall be deemed in every respect
effective service of process upon such Obligor in any such suit, action or
proceeding and shall, to the fullest extent
57
permitted by law, be taken and held to be valid and personal service upon and
personal delivery to such Obligor.
(d) No Limitation on Service or Suit. Nothing in this Section 10.10
shall affect the right of the Agent or any Bank to serve process in any other
manner permitted by law or limit the right of the Agent or any Bank to bring
proceedings against any Obligor in the courts of any jurisdiction or
jurisdictions.
SECTION 10.11. Judgment Currency. If, under any applicable law and
whether pursuant to a judgment being made or registered against any Obligor or
for any other reason, any payment under or in connection with any of the
Financing Documents is made or satisfied in a currency (the "Other Currency")
other than that in which the relevant payment is due (the "Required Currency")
then, to the extent that the payment (when converted into the Required Currency
at the rate of exchange on the date of payment or, if it is not practicable for
the party entitled thereto (the "Payee") to purchase the Required Currency with
the Other Currency on the date of payment, at the rate of exchange as soon
thereafter as it is practicable for it to do so) actually received by the Payee
falls short of the amount due under the terms of this Agreement and the Notes,
each Obligor shall, to the extent permitted by law, as a separate and
independent obligation, indemnify and hold harmless the Payee against the amount
of such short-fall. For the purpose of this Section, "rate of exchange" means
the rate at which the Payee is able on the relevant date to purchase the
Required Currency with the Other Currency and shall take into account any
premium and other costs of exchange.
SECTION 10.12. WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS, THE AGENT
AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 10.13. Existing Credit Agreement. On the Closing Date and
simultaneously with the closing the Borrower hereby gives notice to Xxxxxx
Guaranty Trust Company of New York, as agent, under Section 2.09 of the Credit
Agreement referred to in clause (x) of Section 3.01 of the termination of the
Commitments (as defined therein) and the Banks hereby waive the requirement that
prior notice of such termination be given as therein provided.
58
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
ACE LIMITED
The Common Seal of
ACE Limited was
hereunto affixed in
the presence of: By ___________________
Title:
Director Xxx XXX Xxxxxxxx
00 Xxxxxxxxxx Xxxxxx
___________________ Xxxxxxxx XX 08, Bermuda
Telex number: 3543ACEILBA
Secretary Facsimile number: (000) 000-0000
___________________
A.C.E. INSURANCE COMPANY, LTD.,
as Guarantor
The Common Seal of
A.C.E. Insurance
Company, Ltd. was
hereunto affixed in
the presence of: By ____________________________
Title:
Director Xxx XXX Xxxxxxxx
00 Xxxxxxxxxx Xxxxxx
___________________ Xxxxxxxx XX 08, Bermuda
Telex number: 3543ACEILBA
Director/Secretary Facsimile number: (000) 000-0000
___________________
59
CORPORATE OFFICERS & DIRECTORS
ASSURANCE LTD., as Guarantor
The Common Seal of
Corporate Officers and
Directors Assurance, Ltd.
was hereunto affixed in
the presence of: By ____________________________
Title:
Director Xxx XXX Xxxxxxxx
00 Xxxxxxxxxx Xxxxxx
___________________ Xxxxxxxx XX 08, Bermuda
Telex number: 3543ACEILBA
Director/Secretary Facsimile number: (000) 000-0000
___________________
60
Commitments
-----------
$10,000,000 XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK
By ____________________________
Title:
$8,000,000 BANK OF BERMUDA
By ____________________________
Title:
$8,000,000 THE BANK OF NEW YORK
By ____________________________
Title:
$8,000,000 BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
By ____________________________
Title:
$8,000,000 DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLANDS BRANCH
By ____________________________
Title:
By ____________________________
Title:
61
$8,000,000 MELLON BANK, N.A.
By ____________________________
Title:
________________
Total Commitments
$ 50,000,000
=================
62
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By___________________________
Title:
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: _________________
Telex number: 177615
Facsimile number: 000-000-0000
63
EXHIBIT A
NOTE
New York, New York
, 19
For value received, ACE Limited, a Cayman Islands corporation (the
"Borrower"), promises to pay to the order of (the "Bank"), for
the account of its Applicable Lending Office, the unpaid principal amount of
each Loan made by the Bank to the Borrower pursuant to the Credit Agreement
referred to below on the last day of the Interest Period relating to such Loan.
The Borrower promises to pay interest on the unpaid principal amount of each
such Loan on the dates and at the rate or rates provided for in the Credit
Agreement. All such payments of principal and interest shall be made in lawful
money of the United States in Federal or other immediately available funds at
the office of Xxxxxx Guaranty Trust Company of New York, 00 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx.
All Loans made by the Bank, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by the
Bank and, if the Bank so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with respect
to each such Loan then outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof; provided that the failure of the Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
This note is one of the Notes referred to in the Credit Agreement
dated as of November 15, 1996 among the Borrower, A.C.E. Insurance Company, Ltd.
and Corporate Officers & Directors Assurance Ltd., as Guarantors, the banks
listed on the signature pages thereof and Xxxxxx Guaranty Trust Company of New
York, as Agent (as the same may be amended from time to time, the "Credit
Agreement").
Terms defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the prepayment
hereof and the acceleration of the maturity hereof.
Pursuant to the Credit Agreement payment of principal and interest on
this Note is unconditionally guaranteed by the Guarantors named above.
ACE LIMITED
By________________________
Title:
2
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
________________________________________________________________________________
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
3
EXHIBIT B
Form of Money Market Quote Request
----------------------------------
[Date]
To: Xxxxxx Guaranty Trust Company of New York
(the "Agent")
From: [Name of Borrower]
Re: Credit Agreement (as amended, the "Credit Agreement") dated as of
November 15, 1996 among the Borrower, A.C.E. Insurance Company, Ltd.
and Corporate Officers & Directors Assurance Ltd., as Guarantors, the
Banks listed on the signature pages thereof and the Agent
We hereby give notice pursuant to Section 2.03 of the Credit Agreement
that we request Money Market Quotes for the following proposed Money Market
Borrowing(s):
Date of Borrowing:
------------------
Principal Amount* Interest Period**
---------------- -----------------
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
--------------------
*Amount must be $5,000,000 or a larger multiple of $1,000,000.
**Not less than one month (LIBOR Auction) or not less than 7 days (Absolute
Rate Auction), subject to the provisions of the definition of Interest Period.
Terms used herein have the meanings assigned to them in the Credit
Agreement.
ACE LIMITED
By
-----------------------
Title:
2
EXHIBIT C
Form of Invitation for Money Market Quotes
------------------------------------------
To: [Name of Bank]
Re: Invitation for Money Market Quotes to [Name of Borrower]
(the "Borrower")
Pursuant to Section 2.03 of the Credit Agreement dated as of November
15, 1996, as amended, among the Borrower, A.C.E. Insurance Company, Ltd. and
Corporate Officers & Directors Assurance Ltd., as Guarantors, the Banks parties
thereto and the undersigned, as Agent, we are pleased on behalf of the Borrower
to invite you to submit Money Market Quotes to the Borrower for the following
proposed Money Market Borrowing(s):
Date of Borrowing:
------------------
Principal Amount Interest Period
---------------- ---------------
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than [2:00 P.M.] [9:30
A.M.] (New York City time) on [date].
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK
By
---------------------------
Authorized Officer
EXHIBIT D
Form of Money Market Quote
--------------------------
To: Xxxxxx Guaranty Trust Company of New York,
as Agent
Re: Money Market Quote to [Name of Borrower] (the "Borrower")
In response to your invitation on behalf of the Borrower dated
-------------, 19--, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank: --------------------------------
2. Person to contact at Quoting Bank:
-----------------------------
3. Date of Borrowing: --------------------*
4. We hereby offer to make Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
---------- --------- -----------------------------------
$
$
[Provided, that the aggregate principal amount of Money Market Loans for
which the above offers may be accepted shall not exceed $------------.]**
---------------
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed principal amount
requested. Specify aggregate limitation if the sum of the individual offers
exceeds the amount the Bank is willing to lend. Bids must be made for
$5,000,000 or a larger multiple of $1,000,000.
(notes continued on following page)
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Credit Agreement
dated as of November 15, 1996, as amended, among the Borrower, A.C.E. Insurance
Company, Ltd. and Corporate Officers & Directors Assurance Ltd., as Guarantors,
the Banks listed on the signature pages thereof and yourselves, as Agent,
irrevocably obligates us to make the Money Market Loan(s) for which any offer(s)
are accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
Dated: By:
--------------- ---------------------
Authorized Officer
----------
*** Not less than one month or not less than 7 days, as specified in the related
Invitation. No more than five bids are permitted for each Interest Period.
**** Margin over or under the London Interbank Offered Rate determined for the
applicable Interest Period. Specify percentage (to the nearest 1/10,000 of 1%)
and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%).
2
EXHIBIT H
FORM OF XXXXX XXXX & XXXXXXXX OPINION
-------------------------------------
November 15, 1995
To the Banks and the Agent
Referred to Below
c/x Xxxxxx Guaranty Trust Company
of New York, as Agent
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
We have participated in the preparation of the Credit Agreement (the
"Credit Agreement") dated as of November 15, 1996 among ACE Limited, a Cayman
Islands company limited by shares (the "Borrower"), and A.C.E. Insurance
Company, Ltd., a Bermuda limited liability company ("ACE Insurance"), and
Corporate Officers & Directors Assurance Ltd., a Bermuda limited liability
company ("CODA"), as Guarantors, the Banks listed on the signature pages thereof
(the "Banks") and Xxxxxx Guaranty Trust Company of New York, as Agent, and have
acted as special United States counsel for the Agent for the purpose of
rendering this opinion pursuant to Section 3.01(e) of the Credit Agreement.
Terms defined in the Credit Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate powers and
have been duly authorized by all necessary corporation action.
To the Banks and the Agent 2 November 15, 1995
Referred to Below
2. The execution, delivery and performance by each Guarantor of the
Credit Agreement are within such Guarantor's corporate powers and have been duly
authorized by all necessary corporate action.
3. The Credit Agreement constitutes a valid and binding agreement of
the Borrower and each Note constitutes a valid and binding obligation of the
Borrower, in each case enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general principles of equity.
4. The Credit Agreement constitutes a valid and binding agreement of
each Guarantor enforceable in accordance with its terms, except as the same may
be limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by general principles of equity.
In giving the foregoing opinion we have relied, with your consent and
without independent investigation, as to all matters governed by the laws of (i)
the Cayman Islands, upon the opinion of Xxxxxx and Xxxxxx dated the date hereof,
a copy of which has been delivered by you pursuant to Section 3.01(b) of the
Credit Agreement and (ii) Bermuda, upon the opinion of Xxxxxxx, Xxxx & Xxxxxxx
dated the date hereof, a copy of which has been delivered to you pursuant to
Section 3.01(c) of the Credit Agreement.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by any other Person without our prior written consent.
Very truly yours,
2
EXHIBIT I
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of __________ __, 19__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), [BORROWER] (the "Borrower") and XXXXXX
GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, this Assignment and Assumption Agreement (the "Agreement")
relates to the Credit Agreement dated as of November 15, 1996 among the
Borrower, A.C.E. Insurance Company, Ltd. and Corporate Officers & Directors
Assurance Ltd., as Guarantors, the Assignor and the other Banks party thereto,
as Banks, and the Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans to the Borrower in an aggregate principal amount at any
time outstanding not to exceed $__________;
WHEREAS, Committed Loans made to the Borrower by the Assignor under
the Credit 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 Credit Agreement in respect of a portion of its
Commitment thereunder in an amount equal to $__________ (the "Assigned Amount"),
together with a corresponding portion of its outstanding Committed Loans, 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:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement 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
Credit Agreement to the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the principal amount of the
Committed Loans made by the Assignor outstanding at the date hereof. Upon the
execution and delivery hereof by the Assignor, the Assignee, the Borrower and
the Agent 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
Credit Agreement with a Commitment in an amount equal to the Assigned Amount,
and (ii) the Commitment of the Assignor shall, as of the date hereof, be reduced
by a like amount and the Assignor released from its obligations under the Credit
Agreement to the extent such obligations have been assumed by the Assignee. The
assignment provided for herein shall be without recourse to the Assignor.
SECTION 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 in Federal funds the amount heretofore agreed between them.* It is
understood that commitment and/or facility fees accrued to the date hereof 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 Credit 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.
[SECTION 4. Consent of the Borrower and the Agent. This Agreement is
conditioned upon the consent of the Borrower and the Agent pursuant to Section
10.06(c) of
------------------
*Amount should combine principal 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.
2
the Credit Agreement. The execution of this Agreement by the Borrower and the
Agent is evidence of this consent. Pursuant to Section 10.06(c) the Borrower
agrees to execute and deliver a Note payable to the order of the Assignee to
evidence the assignment and assumption provided for herein.]
SECTION 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
Borrower, or the validity and enforceability of the obligations of the Borrower
in respect of the Credit Agreement or any Note. 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 Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 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.
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:
3
ACE LIMITED
By__________________________
Title:
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK
By__________________________
Title:
4
EXHIBIT J
[CT System]
[Dated the Closing Date]
To the Persons Identified
on Schedule A
Dear Sirs:
In respect of the Credit Agreement dated as of November 15, 1996 (the
"Agreement") among ACE Limited, (the "Borrower"), as Borrower, A.C.E. Insurance
Company, Ltd. ("A.C.E. Insurance") and Corporate Officers & Directors Assurance
Ltd., ("CODA" and, together with A.C.E. Insurance, the "Guarantors"), as
Guarantors, the Banks listed therein (the "Banks") and Xxxxxx Guaranty Trust
Company of New York, as Agent (the "Agent"), the undersigned hereby accepts the
irrevocable designation and appointment of it as of the date hereof as agent for
the Borrower and each of the Guarantors to accept and acknowledge service of any
and all process, as contemplated by Section 10.10(b) of the Agreement and
otherwise as provided thereby, such acceptance to remain in effect until the
Agreement shall have been terminated and all obligations thereunder of the
Borrower and each Guarantor shall have been paid in full.
The undersigned agrees to give the Agent or the Borrower or the
Guarantors, as applicable, immediate notice by telephone, fax, telex, cable or
any other means of instant communication upon receipt of all papers served upon
the undersigned pursuant to such appointment and to forward promptly to the
Agent or the Borrower or the Guarantors, as the case may be, all such papers
served pursuant to such appointment by reputable overnight carrier.
Very truly yours,
CT SYSTEM
By:__________________________
Title:
SCHEDULE A
Xxxxxx Guaranty Trust Company
of New York, as Agent
Xxxxxx Guaranty Trust Company
of New York
[other Banks]
ACE Limited, as Borrower
A.C.E. Insurance Company, Ltd., as Guarantor
Corporate Officers & Directors
Assurance Ltd., as Guarantor
2