Looking for an agreement? Search from over 1 million agreements now.

Term Loan Agreement

This is an actual contract by ACE.

Save time and money with our Premium Packages.
Buy all (8) recommended agreements for
$140.00 (50% savings)
Agreement Preview
Sectors: Insurance
Governing Law: New York, View New York State Laws
Effective Date: December 11, 1997
Search This Document
EXHIBIT 10.33


EXECUTION COPY


$250,000,000


TERM LOAN AGREEMENT


dated as of


December 11, 1997


among


ACE US Holdings, Inc.,
as Borrower,


ACE Limited,
as Guarantor,


The Banks Listed Herein


and


Morgan Guaranty Trust Company of New York,
as Administrative Agent


________________


J.P. Morgan Securities Inc.
and
Mellon Bank N.A.,
Co-Syndication Agents


Morgan Guaranty Trust Company of New York,
Documentation Agent


TABLE OF CONTENTS


_____________


Page
----
ARTICLE 1
Definitions


Section 1.01. Definitions................................................................. 1 Section 1.02. Accounting Terms and Determinations......................................... 12 Section 1.03. Types of Borrowings......................................................... 13 Section 1.04. United States Dollars....................................................... 13


ARTICLE 2
The Loans


Section 2.01. Commitments to Lend......................................................... 13 Section 2.02. Notice of Borrowing......................................................... 13 Section 2.03. Notice of Banks; Funding of Loans........................................... 14 Section 2.04. Notes....................................................................... 14 Section 2.05. Amortization of Loans....................................................... 15 Section 2.06. Interest Rates.............................................................. 15 Section 2.07. Fees........................................................................ 17 Section 2.08. Mandatory Termination of Commitments........................................ 17 Section 2.09. Method of Electing Interest Rates........................................... 17 Section 2.10. Optional Prepayments........................................................ 19 Section 2.11. General Provisions as to Payments........................................... 19 Section 2.12. Funding Losses.............................................................. 20 Section 2.13. Computation of Interest and Fees............................................ 20 Section 2.14. Regulation D Compensation................................................... 20


ARTICLE 3
Conditions


Section 3.01. Closing..................................................................... 21 Section 3.02. Borrowing................................................................... 22


ARTICLE 4
Representations and Warranties


Section 4.01. Corporate Existence and Power............................................... 24 Section 4.02. Corporate and Governmental Authorization; No Contravention............................................................................ 24


PAGE
---- Section 4.03. Binding Effect.............................................................. 24 Section 4.04. Financial Information....................................................... 24 Section 4.05. Litigation.................................................................. 26 Section 4.06. ERISA....................................................................... 26 Section 4.07. Taxes....................................................................... 27 Section 4.08. Not an Investment Company................................................... 27 Section 4.09. Full Disclosure............................................................. 27 Section 4.10. Compliance with Laws........................................................ 27


ARTICLE 5
Covenants


Section 5.01. Information................................................................. 28 Section 5.02. Payment of Obligations...................................................... 29 Section 5.03. Maintenance of Property; Insurance.......................................... 30 Section 5.04. Conduct of Business and Maintenance of Existence............................ 30 Section 5.05. Compliance with Laws........................................................ 30 Section 5.06. Inspection of Property, Book and Records.................................... 31 Section 5.07. Leverage.................................................................... 31 Section 5.08. Debt........................................................................ 31 Section 5.09. Minimum Tangible Net Worth.................................................. 32 Section 5.10. Negative Pledge............................................................. 32 Section 5.11. Consolidations, Mergers and Sales of Assets................................. 33 Section 5.12. Use of Proceeds............................................................. 33 Section 5.13. ERISA....................................................................... 33 Section 5.14. Restricted Payments......................................................... 34 Section 5.15. Investments; Acquisitions................................................... 34 Section 5.16. Transactions with Affiliates................................................ 34 Section 5.17. No Modification of Documents Without Consent................................ 34 Section 5.18. Debt Service Coverage Ratio................................................. 35


ARTICLE 6
Defaults


Section 6.01. Events of Default........................................................... 35 Section 6.02. Notice of Default........................................................... 39


ii


PAGE
----
ARTICLE 7
The Agents


Section 7.01. Appointment and Authorization..................................................... 39 Section 7.02. Administrative Agent and Affiliates............................................... 39 Section 7.03. Action by Administrative Agent.................................................... 39 Section 7.04. Consultation with Experts......................................................... 39 Section 7.05. Liability of Administrative Agent................................................. 39 Section 7.06. Indemnification................................................................... 40 Section 7.07. Credit Decision................................................................... 40 Section 7.08. Successor Administrative Agent.................................................... 40 Section 7.09. Administrative Agent's Fee........................................................ 41 Section 7.10. Other Agents...................................................................... 41


ARTICLE 8
Change in Circumstances


Section 8.01. Basis for Determination Interest Rate Inadequate or
Unfair................................................................................... 41 Section 8.02. Illegality........................................................................ 42 Section 8.03. Increased Cost and Reduced Return................................................. 42 Section 8.04. Taxes............................................................................. 44 Section 8.05. Base Rate Loans Substituted for Affected Fixed Rate Loans......................... 46 Section 8.06. Substitution of Bank.............................................................. 47


ARTICLE 9
Guaranty


Section 9.01. The Guaranty...................................................................... 47 Section 9.02. Guaranty Unconditional............................................................ 47 Section 9.03. Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances.................................................................... 48 Section 9.04. Waiver by the Guarantor........................................................... 49 Section 9.05. Subrogation....................................................................... 49 Section 9.06. Stay of Acceleration.............................................................. 49


iii


PAGE
----
ARTICLE 10
Miscellaneous


Section 10.01. Notices................................................. 49 Section 10.02. No Waivers.............................................. 50 Section 10.03. Expenses; Indemnification............................... 50 Section 10.04. Sharing; Set-Offs....................................... 50 Section 10.05. Amendments and Waivers.................................. 51 Section 10.06. Successors and Assigns.................................. 52 Section 10.07. Collateral.............................................. 53 Section 10.08. Governing Law........................................... 53 Section 10.09. Counterparts; Integration; Effectiveness................ 54 Section 10.10. Judicial Proceedings.................................... 54 Section 10.11. Judgment Currency....................................... 55 Section 10.12. WAIVER OF JURY TRIAL.................................... 56 Section 10.13. Confidentiality......................................... 56


EXHIBIT A - NOTE EXHIBIT B - FORM OF PLEDGE AGREEMENT EXHIBIT C - FORM OF SUBORDINATED LOAN AGREEMENT EXHIBIT D - FORM OF MAPLES AND CALDER OPINION EXHIBIT E - FORM OF CONYERS, DILL & PEARMAN OPINION EXHIBIT F - FORM OF MAYER, BROWN & PLATT OPINION EXHIBIT G - FORM OF DAVIS POLK & WARDWELL OPINION EXHIBIT H - ASSIGNMENT AND ASSUMPTION AGREEMENT EXHIBIT I - LETTER FROM CT CORPORATION SYSTEM


iv


TERM LOAN AGREEMENT


AGREEMENT dated as of December 11, 1997 among ACE US HOLDINGS, INC., ACE LIMITED, the BANKS listed on the signature pages hereof and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent.


The parties hereto agree as follows:


ARTICLE 1
Definitions


Section 1.01. Definitions. The following terms, as used herein, have the following meanings:


"ACE INSURANCE" means A.C.E. Insurance Company, Ltd., a Bermuda limited liability company, and its successors.


"ACQUISITION" means an acquisition by the Borrower or any of its Subsidiaries of a company, a division, a location or a line of business or of all or substantially all of the assets of any of the foregoing.


"ADMINISTRATIVE AGENT" means Morgan Guaranty Trust Company of New York in its capacity as administrative agent for the Banks under the Financing Documents, and its successors in such capacity.


"AFFILIATE" means (i) any Person that directly, or indirectly through one or more intermediaries, controls the Borrower (a "CONTROLLING PERSON") or (ii) any Person (other than the Borrower or a Subsidiary of the Borrower) which is controlled by or is under common control with a Controlling Person; provided that no Relevant Party shall be an Affiliate for purposes hereof. As used herein, the term "CONTROL" means possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether though the ownership of voting securities, by contract or otherwise.


"AGENT" means each of the Administrative Agent, the Documentation Agent, the Syndication Agents, the Managing Agent and the Co-Agents, and "AGENTS" means any combination of them, as the context may require.


"ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each Bank, an administrative questionnaire in the form prepared by the Administrative Agent and submitted to the Administrative Agent (with a copy to the Borrower) duly completed by such Bank.


"APPLICABLE LENDING OFFICE" means, with respect to any Bank, (i) in the case of its Base Rate Loans, its Domestic Lending Office and (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.


"ASSIGNEE" has the meaning set forth in Section 10.06.


"BANK" means each bank listed on the signature pages hereof, each Assignee which becomes a Bank pursuant to Section 10.06, 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 Loan which bears interest at the Base Rate pursuant to the applicable Notice of Borrowing or Notice of Interest Rate Election or the provisions of Section 2.09 or Article 8.


"BENEFIT ARRANGEMENT" means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of the Borrower's ERISA Group.


"BERMUDA COMPANIES LAW" means The Companies Act 1981 of Bermuda, as amended, and the regulations promulgated thereunder.


"BORROWER" means ACE US Holdings, Inc., a Delaware corporation, and its successors.


"BORROWING" has the meaning set forth in Section 1.03.


"BORROWING DATE" means the date of the Borrowing hereunder.


"CASH AVAILABLE" means, for any period, the sum (without duplication) of (i) the excess over $3,000,000 of the cash and cash equivalents held by the Borrower on the first day of such period, (ii) cash dividends, cash interest payments, and other cash income received by the Borrower during such period, (iii) the cash proceeds to the Borrower of loans made under the Subordinated


2


Loan Agreement during such period and (iv) the unused amount of the "Commitment" (as defined in the Subordinated Loan Agreement) at the end of such period.


"CLOSING DATE" means the date on or after the Effective Date and on or before the Borrowing Date on which the Administrative Agent shall have received the documents specified in or pursuant to Section 3.01.


"CO-AGENT" means each Bank designated as a Co-Agent on the signature pages hereof, in its capacity as co-agent in respect of this Agreement.


"COMMITMENT" means, with respect to each Bank, the amount set forth opposite the name of such Bank on the signature pages hereof.


"CONSOLIDATED DEBT" means at any date the Debt of the Guarantor and its Consolidated Subsidiaries, determined on a consolidated basis as of such date.


"CONSOLIDATED NET INCOME" means, for any period, the net income of the Guarantor and its Consolidated Subsidiaries, determined on a consolidated basis for such period.


"CONSOLIDATED SUBSIDIARY" means at any date, with respect to any Person, any Subsidiary or other entity the accounts of which would be consolidated with those of such Person 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 Guarantor and its Consolidated Subsidiaries less their consolidated Intangible Assets, all determined as of such date; provided that such determination for purposes of Sections , and shall be made without giving effect to adjustments pursuant to Statement No. 115 of the Financial Accounting Standards Board. 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, 1997 in the book value of any asset owned by the Guarantor 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.


3


"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 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.


"DEBT SERVICE" means, for any period, the sum of (i) the interest expense of the Borrower for such period and (ii) scheduled payments of principal on Debt of the Borrower due during such period.


"DEBT SERVICE COVERAGE RATIO" means, at any date, the ratio of Cash Available for the period of four consecutive fiscal quarters ended at such date (or, if shorter, the period from the Borrowing Date through such date) to Debt Service for such period.


"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.


"DOCUMENTATION AGENT" means Morgan Guaranty Trust Company of New York in its capacity as documentation agent in respect of this Agreement.


4


"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 Administrative Agent.


"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 of such Person 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 Administrative Agent.


"EURO-DOLLAR LOAN" means a Loan which bears interest at a Euro-Dollar Rate pursuant to the applicable Notice of Committed Borrowing or Notice of Interest Rate Election.


"EURO-DOLLAR MARGIN" has the meaning set forth in Section 2.06.


"EURO-DOLLAR RATE" means a rate of interest determined pursuant to Section on the basis of a London Interbank Offered Rate.


5


"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 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 Morgan Guaranty Trust Company of New York on such day on such transactions as determined by the Administrative Agent.


"FINANCING DOCUMENTS" means this Agreement, the Notes, the Pledge Agreement and the Subordinated Loan Agreement.


"GROUP OF LOANS" means at any time a group of Loans consisting of (i) all Base Rate Loans which are outstanding at such time or (ii) all Euro-Dollar Loans having the same Interest Period at such time; provided that, if a Loan of any particular Bank is converted to or made as a Base Rate Loan pursuant to Section 8.02 or 8.04, such Loan shall be included in the same Group or Groups of Loans from time to time as it would have been in if it had not been so converted or made.


"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


6


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.


"GUARANTOR" means ACE Limited, a Cayman Islands company limited by shares, and its successors.


"INDEMNITEE" has the meaning set forth in Section 10.03(b).


"INFORMATION MEMORANDUM" means the confidential information memorandum dated November 1997 furnished to the Banks in connection with this Agreement.


"INTEREST PERIOD" means, with respect to each Euro-Dollar Loan, the period commencing on the date of borrowing specified in the Notice of Borrowing or on the date specified in an applicable Notice of Interest Rate Election and ending one, two, three or six months thereafter, as the Borrower may elect in the applicable notice; 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) no Interest Period applicable to any Loan shall extend
beyond any Principal Payment Date unless the aggregate principal amount of
Loans represented by Base Rate Loans, or by Euro-Dollar Loans having
Interest Periods that will expire on or before such Principal Payment Date,
equals or exceeds the amount of principal due on such Principal Payment
Date.


7


"INTERNAL
-- End of Preview --
Home| About Us| FAQ| Subscription | Contact Us |

Privacy Policy   Terms of Service  3.80.128.196