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Term Loan Agreement Dated April 1, 2008

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Sectors: Insurance
Governing Law: New York, View New York State Laws
Effective Date: April 01, 2008
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Exhibit 10.5


TERM LOAN AGREEMENT

Dated as of April 1, 2008

among

ACE INA HOLDINGS INC.,

as the Borrower

and

ACE LIMITED,

ACE BERMUDA INSURANCE LTD.,

and

ACE TEMPEST REINSURANCE LTD.,

as the Guarantors and

THE INITIAL LENDERS NAMED HEREIN,

as the Initial Lenders

and

BANK OF AMERICA, N.A.,

as the Administrative Agent


BANC OF AMERICA SECURITIES LLC,

as Sole Lead Arranger and Sole Bookrunner

TABLE OF CONTENTS


PAGE ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS Section 1.01. Certain Defined Terms 1 Section 1.02. Computation of Time Periods; Other Definitional Provisions 12 Section 1.03. Accounting Terms and Determinations 12 ARTICLE 2 AMOUNTS AND TERMS OF THE ADVANCES Section 2.01. Term Loan Facility 13 Section 2.02. Making the Advances. 13 Section 2.03. Repayment of Advances. 14 Section 2.04. Prepayments 14 Section 2.05. Interest 15 Section 2.06. Fees 16 Section 2.07. Conversion of Advances 16 Section 2.08. Increased Costs, Etc. 16 Section 2.09. Payments and Computations 18 Section 2.10. Taxes 19 Section 2.11. Sharing of Payments, Etc. 21 Section 2.12. Use of Proceeds 21 Section 2.13. Replacement of Affected Lender 21 Section 2.14. Registry 22 ARTICLE 3 CONDITIONS OF LENDING Section 3.01. Conditions Precedent to Effectiveness 22 ARTICLE 4 REPRESENTATIONS AND WARRANTIES Section 4.01. Representations and Warranties 24 ARTICLE 5 COVENANTS Section 5.01. Affirmative Covenants 27 Section 5.02. Negative Covenants 29 Section 5.03. Reporting Requirements 31 Section 5.04. Financial Covenants 35 ARTICLE 6 EVENTS OF DEFAULT Section 6.01. Events Of Default 35


i ARTICLE 7 THE GUARANTY Section 7.01. The Guaranty 37 Section 7.02. Guaranty Unconditional 38 Section 7.03. Discharge only upon Payment in Full; Reinstatement in Certain Circumstances 38 Section 7.04. Waiver by the Guarantors 39 Section 7.05. Subrogation 39 Section 7.06. Stay of Acceleration 39 Section 7.07. Continuing Guaranty; Assignments 39 ARTICLE 8 ADMINISTRATIVE AGENTS Section 8.01. Authorization and Action 40 Section 8.02. Administrative Agent' s Reliance, Etc 40 Section 8.03. Bank of America and Affiliates 41 Section 8.04. Lender Credit Decision 41 Section 8.05. Indemnification 41 Section 8.06. Successor Administrative Agent 41 Section 8.07. Other Agents 42 ARTICLE 9 MISCELLANEOUS Section 9.01. Amendments, Etc 42 Section 9.02. Notices, Etc 43 Section 9.03. No Waiver; Remedies 43 Section 9.04. Costs and Expenses 43 Section 9.05. Right of Set-off 44 Section 9.06. Successors; Participations and Assignments 45 Section 9.07. Designated Lenders 46 Section 9.08. Execution in Counterparts 47 Section 9.09. Confidentiality 47 Section 9.10. Jurisdiction, Etc 47 Section 9.11. Governing Law 48 Section 9.12. Waiver of Jury Trial 48 Section 9.13. USA Patriot Act 48 Section 9.14. No Advisory or Fiduciary Responsibility 48


ii SCHEDULES

Pricing Schedule

Commitment Schedule

Schedule 5.02(a) Liens

Schedule 9.02 The Administrative Agent' s Office EXHIBITS

Exhibit A Form of Note

Exhibit B Form of Notice of Borrowing

Exhibit C Form of Assignment and Assumption Agreement

Exhibit D Form of Designation Agreement


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TERM LOAN AGREEMENT

TERM LOAN AGREEMENT dated as of April 1, 2008 among ACE INA Holdings Inc. (the " Borrower" ), ACE Limited (the " Parent" ), ACE Bermuda Insurance Ltd. (" ACE Bermuda" ), and ACE Tempest Reinsurance Ltd. (" ACE Tempest" ) (ACE Bermuda and ACE Tempest, together with the Parent, the " Guarantors" ), the banks, financial institutions and other institutional lenders listed on the signature pages hereof as the Initial Lenders (the " Initial Lenders" ), and Bank of America, N.A. (" Bank of America" ), as administrative agent (together with any successor administrative agent appointed pursuant to Article 8, the " Administrative Agent" ) for the Lenders (as hereinafter defined).

The Borrower has requested that the Lenders provide a term loan facility, and the Lenders are willing to do so on the terms and conditions set forth herein. In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows: ARTICLE 1

DEFINITIONS AND ACCOUNTING TERMS

Section 1.01 . Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

" ACE Bermuda" has the meaning specified in the recital of parties to this Agreement.

" ACE Tempest" has the meaning specified in the recital of parties to this Agreement.

" Acquired Company" means Combined Insurance Company of America.

" Adjusted Consolidated Debt" means, at any time, an amount equal to (i) the then outstanding Consolidated Debt of the Parent and its Subsidiaries plus (ii) to the extent exceeding an amount equal to 15% of Total Capitalization, the then issued and outstanding amount of Preferred Securities (other than any Mandatorily Convertible Preferred Securities).

" Administrative Agent" has the meaning specified in the recital of parties to this Agreement.

" Administrative Agent' s Office" means the Administrative Agent' s address and, as appropriate, account, as set forth on Schedule 9.02 , or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lender. " Administrative Questionnaire" means, with respect to each Lender, an administrative questionnaire in the form prepared by the Administrative Agent, completed by such Lender and returned to the Administrative Agent (with a copy to the Borrower).

" Advance" has the meaning specified in Section 2.01 .

" Affected Lender" means any Lender that (i) has made, or notified the Borrower that an event or circumstance has occurred which may give rise to, a demand for compensation under Section 2.08(a) or (b) or Section 2.10 (but only so long as the event or circumstance giving rise to such demand or notice is

continuing), or (ii) has notified the Borrower (which notice has not been withdrawn) of any event or circumstance of a type described in Section 2.08(c) .

" Affiliate" means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person or is a director or officer of such Person. For purposes of this definition, the term " control" (including the terms " controlling" , " controlled by" and " under common control with" ) of a Person means the possession, direct or indirect, of the power to vote 5% or more of the Voting Interests of such Person or to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Interests, by contract or otherwise.

" Agreement" means this Term Loan Agreement dated as of April 1, 2008.

" Applicable Lending Office" means, with respect to each Lender, such Lender' s Domestic Lending Office in the case of a Base Rate Advance and such Lender' s Eurodollar Lending Office in the case of a Eurodollar Rate Advance. " Applicable Margin" means, as of any date, a percentage per annum determined by reference to the Pricing Schedule. " Approved Investment" means any Investment that was made by the Parent or any of its Subsidiaries pursuant to investment guidelines set forth by the board of directors of the Parent which are consistent with past practices.

" Arranger" means Banc of America Securities LLC, in its capacity as sole lead arranger and sole book manager.

" Assignee" has the meaning specified in Section 9.06(c) .

" Assignment and Assumption" has the meaning specified in Section 9.06(c) .

" Bank of America" has the meaning specified in the recital of parties to this Agreement.

" Bankruptcy Law" means Title 11 of the U.S. Code or any similar foreign, federal or state law for the relief of debtors.

" Base Rate" means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1 / 2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its " prime rate." The " prime rate" is a rate set by Bank of America based upon various factors including Bank of America' s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

" Base Rate Advance" means an Advance or portion thereof that bears interest as provided in Section 2.05(a)(i) .

" Borrower" has the meaning specified in the recital of parties to this Agreement.

" Borrower' s Account" means the account of the Borrower maintained by the Borrower with Mellon Bank at its office in Philadelphia, Pennsylvania, or such other account as the Borrower shall specify in writing to the Administrative Agent.


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" Borrowing" means the borrowing of simultaneous Advances made by the Lenders to the Borrower.

" Business Day" means a day on which banks are not required or authorized by law to close in New York City and, if the applicable Business Day relates to any Eurodollar Rate Advance, on which dealings are carried on in the London interbank market.

" Capitalized Leases" means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases. " Change of Control" means the occurrence of any of the following: (a) any Person or two or more Persons acting in concert shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Interests of the Parent (or other securities convertible into such Voting Interests) representing 30% or more of the combined voting power of all Voting Interests of the Parent or (b) a majority of the board of directors of the Parent shall not be Continuing Members. " Commitment" means (i) with respect to each Lender listed on the Commitment Schedule, the amount set forth opposite such Lender' s name on the Commitment Schedule, and (ii) with respect to any Person which becomes a Lender pursuant to Section 9.06(c) , the amount of the transferor Lender' s Commitment assigned to it pursuant to Section 9.06(c), in each case as such amount may be changed from time to time pursuant to Section 9.06(c) ; provided that, if the context so requires, the term " Commitment" means the obligation of a Lender to extend credit up to such amount to the Borrower hereunder.

" Commitment Schedule" means the Schedule hereto denominated as such.

" Confidential Information" means information that any Loan Party furnishes to the Administrative Agent or any Lender, but does not include any such information that is or becomes generally available to the public other than as a result of a breach by the Administrative Agent or any Lender of its obligations hereunder or that is or becomes available to the Administrative Agent or such Lender from a source other than the Loan Parties that is not, to the best of the Administrative Agent' s or such Lender' s knowledge, acting in violation of a confidentiality agreement with a Loan Party.

" Consolidated" refers to the consolidation of accounts in accordance with GAAP.

" Consolidated Net Income" means, for any period, the net income of the Parent and its Consolidated Subsidiaries, determined on a Consolidated basis for such period.

" Consolidated Net Worth" means, at any date, the Consolidated stockholders' equity of the Parent and its Consolidated Subsidiaries determined as of such date, provided that such determination for purposes of Section 5.04 shall be made without giving effect to adjustments pursuant to Statement No. 115 of the Financial Accounting Standards Board of the United States of America.

" Contingent Obligation" means, with respect to any Person, any obligation or arrangement of such Person to guarantee or intended to guarantee any Debt, leases, dividends or other payment obligations (" primary obligations" ) of any other Person (the " primary obligor" ) in any manner, whether directly or indirectly, including (a) the direct or indirect guarantee, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of a primary obligor, (b) the obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement or (c)


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any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that Contingent Obligations shall not include any obligations of such Person arising under insurance contracts entered into in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder), as determined by such Person in good faith.

" Continuing Member" means a member of the Board of Directors of the Parent who either (i) was a member of the Parent' s Board of Directors on the date of execution and delivery of this Agreement by the Parent and has been such continuously thereafter or (ii) became a member of such Board of Directors after such date and whose election or nomination for election was approved by a vote of the majority of the Continuing Members then members of the Parent' s Board of Directors.

" Conversion" , " Convert" and " Converted" each refer to a conversion of Advances or portions thereof of one Type into Advances of the other Type pursuant to Section 2.07 or 2.08. " Debenture" means debt securities issued by the Borrower or the Parent to a Special Purpose Trust in exchange for proceeds of Preferred Securities and common securities of such Special Purpose Trust.

" Debt" of any Person means, without duplication for purposes of calculating financial ratios, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of such Person' s business), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all obligations of such Person as lessee under Capitalized Leases (excluding imputed interest), (f) all obligations of such Person under acceptance, letter of credit or similar facilities, (g) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interests (except for obligations to pay for Equity Interests within customary settlement periods) in such Person or any other Person or any warrants, rights or options to acquire such capital stock (excluding payments under a contract for the forward sale of ordinary shares of such Person issued in a public offering), valued, in the case of Redeemable Preferred Interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (h) all Contingent Obligations of such Person in respect of Debt (of the types described above) of any other Person and (i) all indebtedness and other payment obligations referred to in clauses (a) through (h) above of another Person secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness or other payment obligations; provided, however, that the amount of Debt of such Person under clause (a)


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above shall, if such Person has not assumed or otherwise become liable for any such Debt, be limited to the lesser of the principal amount of such Debt or the fair market value of all property of such Person securing such Debt; provided further that " Debt" shall not include obligations in respect of insurance or reinsurance contracts entered into in the ordinary course of business or any obligations of such Person (1) to purchase securities (or other property) which arise out of or in connection with the sale of the same or substantially similar securities (or other property) or (2) to return collateral consisting of securities arising out of or in connection with the loan of the same or substantially similar securities; provided further that, solely for purposes of Section 5.04 and the definitions of " Adjusted Consolidated Debt" and " Total Capitalization" , " Debt" shall not include (x) any contingent obligations of any Person under or in connection with acceptance, letter of credit or similar facilities or (y) obligations of the Parent or the Borrower under any Debentures or under any subordinated guaranty of any Preferred Securities or obligations of a Special Purpose Trust under any Preferred Securities. " Default" means any Event of Default or any event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both.

" Designated Lender" means, with respect to any Designating Lender, an Eligible Designee designated by it pursuant to Section 9.07(a) as a Designated Lender for purposes of this Agreement.

" Designating Lender" means, with respect to each Designated Lender, the Lender that designated such Designated Lender pursuant to Section 9.07(a) . " Domestic Lending Office" means, with respect to any Lender, the office of such Lender specified as its " Domestic Lending Office" in its Administrative Questionnaire or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Administrative Agent. " Effective Date" means the first date on which the conditions set forth in Section 3.01 shall have been satisfied.

" Eligible Designee" means a special purpose entity that (i) is organized under the laws of the United States or any state thereof, (ii) is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business and (iii) issues (or the parent of which issues) commercial paper rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody' s.

" Environmental Action" means any action, suit, demand, demand letter, claim, notice of non-compliance or violation, notice of liability or potential liability, investigation, proceeding, consent order or consent agreement relating in any way to any Environmental Law, any Environmental Permit or Hazardous Material or arising from alleged injury or threat to health, safety or the environment, including (a) by any governmental or regulatory authority for enforcement, cleanup, removal, response, remedial or other actions or damages and (b) by any governmental or regulatory authority or third party for damages, contribution, indemnification, cost recovery, compensation or injunctive relief. " Environmental Law" means any Federal, state, local or foreign statute, law, ordinance, rule, regulation, code, order, writ, judgment, injunction, decree or judicial or agency interpretation, policy or guidance relating to pollution or protection of the environment, health, safety or natural resources, including those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials.

" Environmental Permit" means any permit, approval, identification number, license or other authorization required under any Environmental Law.


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" Equity Interests" means, with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or other acquisition from such Person of such shares (or such other interests), and other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized or otherwise existing on any date of determination.

" ERISA" means the Employee Retirement Income Security Act of 1974.

" ERISA Affiliate" means any Person that for purposes of Title IV of ERISA is a member of the controlled group of any Loan Party, or under common control with any Loan Party, within the meaning of Section 414 of the Internal Revenue Code or Section 4001 of ERISA.

" Eurocurrency Liabilities" has the meaning specified in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time. " Eurodollar Lending Office" means, with respect to any Lender, the office of such Lender specified as its " Eurodollar Lending Office" in its Administrative Questionnaire (or, if no such office is specified, its Domestic Lending Office), or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Administrative Agent.

" Eurodollar Rate" means, for any Interest Period for all Eurodollar Rate Advances subject to such Interest Period, the rate per annum equal to the British Bankers Association LIBOR Rate (" BBA LIBOR" ), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for deposits in United States dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the " Eurodollar Rate" for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in United States dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Advance being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America' s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.

" Eurodollar Rate Advance" means an Advance or portion thereof that bears interest as provided in Section 2.05(a)(ii) .

" Eurodollar Rate Reserve Percentage" means, for any Interest Period for all Eurodollar Rate Advances subject to such Interest Period, the reserve percentage applicable two Business Days before the first day of such Interest Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by


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reference to which the interest rate on Eurodollar Rate Advances is determined) having a term equal to such Interest Period. " Events of Default" has the meaning specified in Section 6.01 . " Facility" means, at any time, the aggregate amount of the Lenders' Commitments at such time. " Federal Funds Rate" means, for any day, a fluctuating interest rate per annum equal for such day to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average rate (rounded upward, if necessary, to a whole multiple of 1 / 100 of 1%) charged to Bank of America on such day on such transactions, as determined by the Administrative Agent.

" Fee Letter" means the fee letter dated January 28, 2008 among the Borrower, the Administrative Agent, Bank of America, and the Arranger.

" Fiscal Year" means a fiscal year of the Parent and its Consolidated Subsidiaries ending on December 31 in any calendar year.

" Foreign Government Scheme or Arrangement" has the meaning specified in Section 4.01(l)(ii) .

" Foreign Plan" has the meaning specified in Section 4.01(l)(ii) .

" GAAP" has the meaning specified in Section 1.03 .

" Guarantors" has the meaning specified in the recital of parties to this Agreement. " Guaranty" means the undertaking by each of the Guarantors under Article 7 . " Hazardous Materials" means (a) petroleum or petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls and radon gas and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.

" Hedge Agreements" means interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts and other hedging agreements.

" Indemnified Party" has the meaning specified in Section 9.04(b) .

" Initial Lenders" has the meaning specified in the recital of parties to this Agreement.

" Interest Period" means, for each Eurodollar Rate Advance subject to such Interest Period, the period commencing on the date of such Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance, and ending on the last day of the period selected by the Borrower pursuant to the provisions below and, thereafter, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by the Borrower pursuant to the provisions below. The duration of each such Interest Period shall be one,


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two or three weeks or one, two, three or six months, as the Borrower may, upon notice received by the Administrative Agent not later than 11:00 a.m. (New York City time) on the third Business Day prior to the first day of such Interest Period, select; provided, however, that:

(a) the Borrower may not select any Interest Period with respect to any Eurodollar Rate Advance that ends after the Maturity Date;

(b) whenever the last day of any Interest Period wou
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