Exhibit 10.2

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REIMBURSEMENT AGREEMENT

 

among

 

ACE LIMITED

ACE BERMUDA INSURANCE LTD.

ACE TEMPEST LIFE REINSURANCE LTD.

ACE TEMPEST REINSURANCE LTD.,

as Account Parties,

 

THE BANKS NAMED HEREIN,

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

as an Issuing Bank and as Administrative Agent

 

and

 

BANK OF AMERICA, N.A.,

as Syndication Agent

 

$850,000,000 Unsecured Letter of Credit Facility

 

WACHOVIA CAPITAL MARKETS, LLC

BANC OF AMERICA SECURITIES LLC

as Joint Book Runners and Joint Lead Arrangers

 

Dated as of September 22, 2004

 

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TABLE OF CONTENTS

 

          Page

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ARTICLE I      DEFINITIONS AND ACCOUNTING TERMS     

1.01

   Certain Defined Terms    1

1.02

   Computation of Time Periods; Other Definitional Provisions    16

1.03

   Accounting Terms and Determinations    16 ARTICLE II      AMOUNTS AND TERMS
OF THE LETTERS OF CREDIT     

2.01

   The Letters of Credit    17

2.02

   Issuance and Renewals and Drawings, Participations and Reimbursement with
Respect to Letters of Credit    18

2.03

   Repayment of Advances    21

2.04

   Termination or Reduction of the LC Commitment Amounts    23

2.05

   Fees    23

2.06

   Increased Costs, Etc.    24

2.07

   Payments and Computations    25

2.08

   Taxes    26

2.09

   Sharing of Payments, Etc.    28

2.10

   Use of Letters of Credit    29

2.11

   Defaulting Banks    29

2.12

   Replacement of Affected Bank    31

2.13

   Certain Provisions Relating to the Issuing Banks and Letters of Credit    31

2.14

   Downgrade Event with Respect to a Bank    33

2.15

   Non–Dollar Letters of Credit    35

2.16

   Increase of LC Commitment Amounts    36 ARTICLE III      CONDITIONS OF
LENDING AND ISSUANCES OF LETTERS OF CREDIT     

3.01

   Conditions Precedent to Effective Date    37

3.02

   Conditions Precedent to Each Issuance, Extension or Increase of a Letter of
Credit    39

3.03

   Determinations Under Section 3.01    39 ARTICLE IV      REPRESENTATIONS AND
WARRANTIES     

4.01

   Representations and Warranties of the Account Parties    40

 

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ARTICLE V      COVENANTS OF THE ACCOUNT PARTIES     

5.01

   Affirmative Covenants    43

5.02

   Negative Covenants    45

5.03

   Reporting Requirements    49

5.04

   Financial Covenants    52 ARTICLE VI      EVENTS OF DEFAULT     

6.01

   Events of Default    52

6.02

   Actions in Respect of the Letters of Credit upon Default    54 ARTICLE VII   
  THE GUARANTY     

7.01

   The Guaranty    55

7.02

   Guaranty Unconditional    56

7.03

   Discharge Only upon Payment in Full; Reinstatement in Certain Circumstances
   56

7.04

   Waiver by the Account Parties    57

7.05

   Subrogation    57

7.06

   Stay of Acceleration    57

7.07

   Continuing Guaranty; Assignments    58 ARTICLE VIII      THE AGENTS     

8.01

   Authorization and Action    58

8.02

   Agents’ Reliance, Etc.    58

8.03

   Agents and Affiliates    59

8.04

   Bank Credit Decision    59

8.05

   Indemnification    59

8.06

   Successor Administrative Agent    60 ARTICLE IX      MISCELLANEOUS     

9.01

   Amendments, Etc.    60

9.02

   Notices, Etc.    61

9.03

   No Waiver; Remedies    62

9.04

   Costs and Expenses    62

 

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9.05

   Right of Set-off    63

9.06

   Binding Effect    63

9.07

   Assignments and Participations    63

9.08

   Execution in Counterparts    66

9.09

   No Liability of the Issuing Banks    66

9.10

   Confidentiality    67

9.11

   Jurisdiction, Etc.    67

9.12

   Governing Law    68

9.13

   Waiver of Jury Trial    68

9.14

   Disclosure of Information    68

9.15

   USA Patriot Act    68

9.16

   Certain Effective Date Matters    69

 

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Schedule I

  LC Commitment Amounts

Schedule I – Part 2

  Domestic Lending Offices

Schedule II

  Existing Letters of Credit

Schedule 4.01(b)

  Subsidiaries

Schedule 5.02(a)

  Liens

Exhibit A

  Form of Assignment and Acceptance

Exhibit B-1

  Form of Opinion of Maples and Calder

Exhibit B-2

  Form of Opinion of Mayer, Brown, Rowe & Maw LLP

Exhibit B-3

  Form of Opinion of Conyers, Dill & Pearman

Exhibit C

  Form of Letter regarding Existing Letters of Credit

 

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REIMBURSEMENT AGREEMENT

 

REIMBURSEMENT AGREEMENT dated as of September 22, 2004, among ACE Limited, a
Cayman Islands company (the “Parent”), ACE Bermuda Insurance Ltd., a Bermuda
company (“ACE Bermuda”), ACE Tempest Life Reinsurance Ltd., a Bermuda company
(“Tempest Life”), and ACE Tempest Reinsurance Ltd., a Bermuda company
(“Tempest”) (ACE Bermuda, Tempest Life and Tempest, together with the Parent,
the “Account Parties” and individually an “Account Party”), the banks, financial
institutions and other institutional lenders listed on the signature pages
hereof as the Initial Banks (the “Initial Banks”), Wachovia Bank, National
Association (“Wachovia”), as an Issuing Bank (as hereinafter defined), Bank of
America, N.A. (“Bank of America”), as syndication agent, (the “Syndication
Agent”), Barclays Bank PLC (“Barclays”), as co-documentation agent, CitiBank,
N.A. (“CitiBank”), as co-documentation agent, JPMorgan Chase Bank, as
co-documentation agent (“Chase” and, together with Barclays and CitiBank, the
“Documentation Agents”), and Wachovia, as administrative agent (together with
any successor administrative agent appointed pursuant to Article VIII, the
“Administrative Agent” and, together with the Syndication Agent and
Documentation Agents, the “Agents”) for the Banks.

 

PRELIMINARY STATEMENTS:

 

The Account Parties have requested that the Issuing Banks and the Banks make
available to the Account Parties a credit facility in an amount up to
$850,000,000 to provide for the issuance of letters of credit for the account of
one or more of the Account Parties. The Issuing Banks and the Banks have
indicated their willingness to agree to make such letters of credit available on
the terms and conditions of this Agreement.

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements contained herein, the parties hereto hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

 

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

 

“Account Parties” has the meaning specified in the recital of parties to this
Agreement.

 

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

 

“ACE INA” means ACE INA Holdings Inc., a Delaware corporation.

 

“Additional Bank” has the meaning specified in Section 2.16(a).

 

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“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 Account” means the account of the Administrative Agent
maintained by the Administrative Agent at Wachovia Bank, National Association,
Charlotte Plaza Building, 201 South College Street, 8th Floor NC0680, Charlotte,
North Carolina 28288, Account No. 5000000027444, Re: ACE Ltd., Attn: Syndication
Agency Services, or such other account as the Administrative Agent shall specify
in writing to the Banks.

 

“Advance” means a Letter of Credit Advance.

 

“Affected Bank” means any Bank that (i) has made, or notified any Account Party
that an event or circumstance has occurred which may give rise to, a demand for
compensation under Section 2.06(a) or (b) or Section 2.08 (but only so long as
the event or circumstance giving rise to such demand or notice is continuing) or
(ii) is a Downgraded Bank.

 

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

 

“Agents” has the meaning specified in the recital of parties to this Agreement.

 

“Agreement Currency” has the meaning specified in Section 2.15(g).

 

“Applicable Account Party” with respect to any outstanding or proposed Letter of
Credit means the Account Party for the account of which such Letter of Credit
was or is proposed to be issued.

 

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“Applicable Commitment Fee Percentage” means, as of any date, a percentage per
annum determined by reference to the Public Debt Rating in effect on such date
as set forth below:

 

Public Debt Rating

S&P/Moody’s

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Applicable Commitment Fee

Percentage

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Level 1

A+/A1 and above

   0.060%

Level 2

A/A2

   0.080%

Level 3

A-/A3

   0.100%

Level 4

BBB+/Baa1

   0.125%

Level 5

Lower than Level 4

   0.150%

 

“Applicable Lending Office” means, with respect to each Bank, such Bank’s
Domestic Lending Office.

 

“Applicable Margin” means, as of any date, with respect to either Type of Letter
of Credit, a percentage per annum determined by reference to such Type and the
Public Debt Rating in effect on such date as set forth below:

 

Public Debt Rating

S&P/Moody’s

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Applicable Margin

for Intercompany

Letters of Credit

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Applicable Margin

for Third Party

Letters of Credit

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Level 1

A+/A1 and above

   0.300%    0.350%

Level 2

A/A2

   0.400%    0.425%

Level 3

A-/A3

   0.450%    0.475%

Level 4

BBB+/Baa1

   0.500%    0.525%

Level 5

Lower than Level 4

   0.600%    0.625%

 

provided, however, that at all times during which the Available Amount with
respect to Intercompany Letters of Credit exceeds $200,000,000, then for
purposes of Section 2.05(c)(i) the Applicable Margin for the portion of the
Available Amount of such Intercompany Letters of Credit in excess of
$200,000,000 shall be determined as if such Letters of Credit were Third Party
Letters of Credit.

 

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“Approved Investment” means any Investment that was made by the Parent or any of
its Subsidiaries pursuant to investment guidelines set forth by the board of
directors of the Parent which are consistent with past practices.

 

“Assignment and Acceptance” means an assignment and acceptance entered into by a
Bank and an Eligible Assignee, and accepted by the Administrative Agent, in
accordance with Section 9.07 and in substantially the form of Exhibit A hereto.

 

“Available Amount” of any Letter of Credit means, at any time, the maximum
amount available to be drawn under such Letter of Credit at such time or at any
future time (assuming compliance at such time or such future time with all
conditions to drawing) (including without limitation amounts which have been the
subject of drawings by the applicable beneficiary but which have not yet been
paid by an Issuing Bank).

 

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

 

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

 

“Banks” means the Initial Banks and each Person that shall become a Bank
hereunder pursuant to Section 2.16(a) or Section 9.07(a), (b) and (c) for so
long as such Initial Bank or Person, as the case may be, shall be a party to
this Agreement.

 

“Barclays” has the meaning specified in the recital of parties to this
Agreement.

 

“Base Amount” has the meaning set forth in Section 5.04(b).

 

“Base Rate” means a fluctuating interest rate per annum in effect from time to
time, which rate per annum shall at all times be equal to the rate of interest
announced publicly by Wachovia in Charlotte, North Carolina from time to time,
as Wachovia’s prime rate (which may not be its best lending rate) or, if higher
on the day in question, ½ of 1% above the Federal Funds Rate.

 

“Bilateral Agreements” means (i) the Insurance and Reinsurance Letters of Credit
Agreement dated November 20, 2003 issued by Barclays relating to the Lloyd’s
Dollar Trust Funds of Syndicate 2488; and (ii) the Insurance Letters of Credit –
Master Agreement dated April 20, 1994 between Tempest (then known as Tempest
Reinsurance Company Limited) and CitiBank.

 

“Business Day” means a day of the year on which banks are not required or
authorized by law to close in Charlotte, North Carolina, New York, New York,
London, England or Bermuda.

 

“Capitalized Leases” means all leases that have been or should be, in accordance
with GAAP, recorded as capitalized leases.

 

“Change of Control” means the occurrence of any of the following: (a) any Person
or two or more Persons acting in concert shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities

 

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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.

 

“CitiBank” has the meaning specified in the recital of parties to this
Agreement.

 

“Committed Facility” means, at any time, the aggregate amount of the Banks’ LC
Commitment Amounts at such time.

 

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

 

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

 

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

 

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

 

“Contingent Obligation” means, with respect to any Person, any obligation or
arrangement of such Person to guarantee or intended to guarantee any Debt,
leases, dividends or other payment obligations (“primary obligations”) of any
other Person (the “primary obligor”) in any manner, whether directly or
indirectly, including, without limitation, (a) the direct or indirect guarantee,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of a primary obligor, (b) the obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement or (c) any obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation or
(B) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, assets, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to assure
or hold harmless the holder of such primary obligation against loss in respect
thereof; provided, however, that Contingent Obligations shall not include any
obligations of any such Person 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

 

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primary obligation in respect of which such Contingent Obligation is made (or,
if less, the maximum amount of such primary obligation for which such Person may
be liable pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder), as determined by such Person in good faith.

 

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

 

“Debenture” means debt securities issued by ACE INA or the Parent to a Special
Purpose Trust in exchange for proceeds of Preferred Securities and common
securities of such Special Purpose Trust.

 

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

 

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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 ACE
INA under any Debentures or under any subordinated guaranty of any Preferred
Securities or obligations of a Special Purpose Trust under any Preferred
Securities.

 

“Default” means any Event of Default or any event that would constitute an Event
of Default but for the requirement that notice be given or time elapse or both.

 

“Defaulted Amount” means, with respect to any Bank at any time, any amount
required to be paid by such Bank to any Agent or any other Bank hereunder or
under any other Loan Document at or prior to such time that has not been so paid
as of such time, including, without limitation, any amount required to be paid
by such Bank to (a) an Issuing Bank pursuant to Section 2.02(f) to purchase a
portion of a Letter of Credit Advance made by such Issuing Bank and (b) any
Agent or any Issuing Bank pursuant to Section 8.05 to reimburse such Agent or
such Issuing Bank for such Bank’s ratable share of any amount required to be
paid by the Banks to such Agent or such Issuing Bank as provided therein.

 

“Defaulting Bank” means, at any time, any Bank that, at such time, (a) owes a
Defaulted Amount or (b) shall take any action or be the subject of any action or
proceeding of a type described in Section 6.01(g).

 

“Documentation Agents” has the meaning specified in the recital of parties to
this Agreement.

 

“Dollar Equivalent” has the meaning specified in Section 2.15(h).

 

“Domestic Lending Office” means, with respect to any Bank, the office of such
Bank specified as its “Domestic Lending Office” opposite its name on Part 2 of
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Bank, as the case may be, or such other office of such Bank as such
Bank may from time to time specify to any Account Party and the Administrative
Agent.

 

“Downgrade Account” has the meaning specified in Section 2.14(a).

 

“Downgrade Event” means, with respect to any Bank, a reduction of the credit
rating for the senior unsecured unsupported long-term debt of such Bank (or, if
no such rating exists, then a reduction of the long-term issuer credit rating of
such Bank) by S&P or Moody’s.

 

“Downgrade Notice” has the meaning specified in Section 2.14(a).

 

“Downgraded Bank” means any Bank which has a credit rating of less than A- (in
the case of S&P) or A3 (in the case of Moody’s) for its senior unsecured
unsupported long-term debt or which does not have any credit rating on such debt
from one of S&P or Moody’s; provided, that if at any time such Bank has no such
senior unsecured unsupported long-term debt rating from either rating service
but does have a long-term issuer credit rating from either or both

 

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services, then such Bank shall not be considered a Downgraded Bank so long as
such long-term issuer credit rating remains at or above A- (in the case of S&P)
or A3 (in the case of Moody’s).

 

“Effective Date” means the first date on which the conditions set forth in
Article III shall have been satisfied.

 

“Eligible Assignee” means (i) a Bank, (ii) an Affiliate of a Bank, or (iii) a
commercial bank, a savings bank or other financial institution that is approved
by the Administrative Agent and, unless an Event of Default has occurred and is
continuing at the time any assignment is effected pursuant to Section 9.07, the
Parent (such approvals not to be unreasonably withheld or delayed); provided,
however, that neither any Loan Party nor any Affiliate of a Loan Party shall
qualify as an Eligible Assignee under this definition.

 

“Environmental Action” means any action, suit, demand, demand letter, claim,
notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Material or arising from alleged injury or threat to health, safety or
the environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory authority or
third party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.

 

“Environmental Law” means any federal, state, local or foreign statute, law,
ordinance, rule, regulation, code, order, writ, judgment, injunction, decree or
judicial or agency interpretation, policy or guidance relating to pollution or
protection of the environment, health, safety or natural resources, including,
without limitation, those relating to the use, handling, transportation,
treatment, storage, disposal, release or discharge of Hazardous Materials.

 

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

 

“Equity Interests” means, with respect to any Person, shares of capital stock of
(or other ownership or profit interests in) such Person, warrants, options or
other rights for the purchase or other acquisition from such Person of shares of
capital stock of (or other ownership or profit interests in) such Person,
securities convertible into or exchangeable for shares of capital stock of (or
other ownership or profit interests in) such Person or warrants, rights or
options for the purchase or other acquisition from such Person of such shares
(or such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any
date of determination.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.

 

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

 

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“Events of Default” has the meaning specified in Section 6.01.

 

“Existing Letters of Credit” means, collectively, the letters of credit
outstanding on the Effective Date issued by (i) Wachovia pursuant to the
Existing Reimbursement Agreement, and (ii) CitiBank and Barclays pursuant to the
Bilateral Agreements, which letters of credit are listed on Schedule II hereto.

 

“Existing Reimbursement Agreement” means the Reimbursement Agreement, dated as
of September 25, 2003, among the Account Parties, the banks and other lenders
named therein, Bank of America, The Bank of Nova Scotia, Bank One, NA and
Deutsche Bank AG, New York Branch, as Co-Syndication Agents, and Wachovia, as
Issuing Bank and as Administrative Agent, as amended, providing for a
$500,000,000 unsecured letter of credit facility for the benefit of the Account
Parties.

 

“Existing Secured Reimbursement Agreement” means the Reimbursement Agreement,
dated as of September 25, 2003, among the Account Parties, the banks and other
lenders named therein, Bank of America, The Bank of Nova Scotia, Bank One, NA
and Deutsche Bank AG, New York Branch, as Co-Syndication Agents, and Wachovia,
as Issuing Bank and as Administrative Agent, as amended, providing for a
$500,000,000 secured letter of credit facility for the benefit of the Account
Parties.

 

“Expiration Date” shall mean September 22, 2007.

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it.

 

“Fee Letter” means the fee letter dated August 18, 2004 among the Parent,
Wachovia and Wachovia Capital Markets, LLC, as amended.

 

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

 

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

 

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

 

“GAAP” has the meaning specified in Section 1.03.

 

“Guaranty” means the undertaking by each of the Account Parties under Article
VII.

 

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“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 Banks” has the meaning specified in the recital of parties to this
Agreement.

 

“Intercompany Letter of Credit” means a Letter of Credit issued for the account
of any Account Party (whether alone or jointly with any one or more other wholly
owned Subsidiaries of the Parent) in favor of one or more beneficiaries each of
which is a wholly owned Subsidiary of the Parent (whether or not any such
beneficiary is an Account Party hereunder).

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.

 

“Investment” in any Person means any loan or advance to such Person, any
purchase or other acquisition of any Equity Interests or Debt or the assets
comprising a division or business unit or a substantial part or all of the
business of such Person, any capital contribution to such Person or any other
direct or indirect investment in such Person, including, without limitation, any
acquisition by way of a merger or consolidation and any arrangement pursuant to
which the investor incurs Debt of the types referred to in clause (h) or (i) of
the definition of “Debt” in respect of such Person; provided, however, that any
purchase by any Loan Party or any Subsidiary of any catastrophe-linked
instruments which are (x) issued for the purpose of transferring traditional
reinsurance risk to the capital markets and (y) purchased by such Loan Party or
Subsidiary in accordance with its customary reinsurance underwriting procedures,
or the entry by any Loan Party or any Subsidiary into swap instruments relating
to such instruments in accordance with such procedures, shall be deemed to be
the entry by such Person into a reinsurance contract and shall not be deemed to
be an Investment by such Person.

 

“Issuing Banks” means Wachovia, CitiBank, Barclays and any other Bank that has
been appointed by the Parent, has accepted such appointment and has been
approved in writing by the Administrative Agent (which approval shall not be
unreasonably withheld).

 

“Joint Lead Arrangers” means Wachovia Capital Markets, LLC and Banc of America
Sercurities, LLC, collectively.

 

“JPMorgan Credit Agreement” has the meaning specified in Section 5.02(a)(xvii).

 

“Judgment Currency” has the meaning specified in Section 2.15(g).

 

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“LC Commitment Amount” means, with respect to any Bank at any time, the amount
set forth opposite such Bank’s name on Schedule I hereto under the caption “LC
Commitment Amount” or, if such Bank has entered into one or more Assignment and
Acceptances or has become a Bank, or has increased its LC Commitment pursuant to
Section 2.16, set forth for such Bank in the Register maintained by the
Administrative Agent pursuant to Section 9.07(d) as such Bank’s “LC Commitment
Amount”, as such amount may be reduced at or prior to such time pursuant to
Section 2.04.

 

“LC Participation Obligations” has the meaning specified in Section 2.14(a).

 

“L/C Related Documents” has the meaning specified in Section 2.03(a)(ii).

 

“Letter of Credit Advance” has the meaning specified in Section 2.02(g).

 

“Letter of Credit Agreement” has the meaning specified in Section 2.02(a).

 

“Letter of Credit Exposure” at any time means the sum at such time of (a) the
aggregate outstanding amount of Letter of Credit Advances, (b) the aggregate
Available Amounts of all outstanding Letters of Credit (including, without
limitation, all outstanding Existing Letters of Credit) and (c) the aggregate
Available Amounts of all Letters of Credit which have been requested by an
Account Party to be issued hereunder but have not yet been so issued.

 

“Letter of Credit Participating Interest” has the meaning specified in Section
2.02(e).

 

“Letter of Credit Participating Interest Commitment” has the meaning specified
in Section 2.02(e).

 

“Letter of Credit Participating Interest Percentage” means, for any Bank, a
fraction, expressed as a percentage, the numerator of which is such Bank’s LC
Commitment Amount and the denominator of which is the aggregate LC Commitment
Amounts of all the Banks.

 

“Letters of Credit” has the meaning specified in Section 2.01.

 

“Lien” means any lien, security interest or other charge or encumbrance of any
kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.

 

“Loan Documents” means (i) this Agreement, (ii) the Fee Letter and (iii) each
Letter of Credit Agreement, in each case as amended from time to time.

 

“Loan Parties” means the Account Parties.

 

“Mandatorily Convertible Preferred Securities” means units comprised of (i)
Preferred Securities or preferred shares of Parent and (ii) a contract for the
sale of ordinary shares of the Parent.

 

“Margin Stock” has the meaning specified in Regulation U.

 

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“Material Adverse Change” means any material adverse change in the business,
financial condition, operations or properties of the Parent and its
Subsidiaries, taken as a whole.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
condition, operations or properties of the Parent and its Subsidiaries, taken as
a whole, (b) the rights and remedies of the Administrative Agent, any Issuing
Bank or any Bank under any Loan Document or (c) the ability of the Loan Parties,
taken as a whole, to perform their obligations under the Loan Documents.

 

“Material Financial Obligation” means a principal amount of Debt and/or payment
obligations in respect of any Hedge Agreement of the Parent and/or one or more
of its Subsidiaries arising in one or more related or unrelated transactions
exceeding in the aggregate $50,000,000.

 

“Material Subsidiary” means (i) any Subsidiary of the Parent that has more than
$10,000,000 in assets or that had more than $10,000,000 of revenue during the
most recent period of four fiscal quarters for which financial statements are
available, and (ii) any Subsidiary that is the direct or indirect parent company
of any Subsidiary that qualified as a “Material Subsidiary” under clause (i)
above.

 

“Minimum Amount” has the meaning set forth in Section 5.04(b).

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Multiemployer Plan” means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.

 

“Net Proceeds” means, with respect to any issuance of Equity Interests by any
Person, the amount of cash received by such Person in connection with such
transaction after deducting therefrom the aggregate, without duplication, of the
following amounts to the extent properly attributable to such transaction: (a)
reasonable brokerage commissions, attorneys’ fees, finder’s fees, financial
advisory fees, accounting fees, underwriting fees, investment banking fees, and
other similar commissions, and fees and expenses and disbursements of any of the
foregoing, in each case to the extent paid or payable by such Person; (b)
printing and related expenses of filing and recording or registration fees or
charges or similar fees or charges paid by such Person; and (c) taxes paid or
payable by such Person to any governmental authority or regulatory body as a
result of such transaction.

 

“Non-Dollar Letters of Credit” has the meaning specified in Section 2.15(a).

 

“Other Taxes” has the meaning specified in Section 2.08(b).

 

“Overnight Rate” has the meaning specified in Section 2.15(h).

 

“Parent” has the meaning specified in the recital of parties to this Agreement.

 

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“Patriot Act” has the meaning specified in Section 9.15.

 

“PBGC” means the Pension Benefit Guaranty Corporation (or any successor).

 

“Pension Plan” means a “pension plan”, as such term is defined in section 3(2)
of ERISA, which is subject to title IV of ERISA (other than any “multiemployer
plan” as such term is defined in section 4001(a)(3) of ERISA), and to which any
Loan Party or any ERISA Affiliate may have any liability, including any
liability by reason of having been a substantial employer within the meaning of
section 4063 of ERISA at any time during the preceding five years, or by reason
of being deemed to be a contributing sponsor under section 4069 of ERISA.

 

“Permitted Liens” means such of the following as to which no enforcement,
collection, execution, levy or foreclosure proceeding shall have been commenced
or which are being contested in good faith by appropriate proceedings: (a) Liens
for taxes, assessments and governmental charges or levies not yet due and
payable; (b) Liens imposed by law, such as materialmen’s, mechanics’, carriers’,
workmen’s and repairmen’s Liens and other similar Liens arising in the ordinary
course of business securing obligations that are not overdue for a period of
more than 90 days; (c) pledges or deposits to secure obligations under workers’
compensation laws or similar legislation or to secure public or statutory
obligations; and (d) easements, rights of way and other encumbrances on title to
real property that do not render title to the property encumbered thereby
unmarketable or materially adversely affect the use of such property for its
present purposes.

 

“Person” means an individual, partnership, corporation (including a business
trust), limited liability company, joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.

 

“Preferred Interests” means, with respect to any Person, Equity Interests issued
by such Person that are entitled to a preference or priority over any other
Equity Interests issued by such Person upon any distribution of such Person’s
property and assets, whether by dividend or upon liquidation.

 

“Preferred Securities” means (i) preferred securities issued by a Special
Purpose Trust which shall provide, among other things, that dividends shall be
payable only out of proceeds of interest payments on the Debentures, or (ii)
other instruments that may be treated in whole or in part as equity for rating
agency purposes while being treated as debt for tax purposes.

 

“Pro Rata” means from and to the Banks in accordance with their respective
Letter of Credit Participating Interest Percentages.

 

“Pro Rata Share” means, for any Bank, its share determined Pro Rata, in
accordance with the definition of the term “Pro Rata.”

 

“Public Debt Rating” means, as of any date, the higher rating that has been most
recently announced by either S&P or Moody’s, as the case may be, for any class
of non-credit enhanced long-term senior unsecured debt issued by the Parent;
provided that if at any time the difference between the ratings of such type
most recently announced by S&P and Moody’s is more than one rating grade, the
Public Debt Rating shall be the rating that is one grade below the higher of
such

 

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two ratings. For purposes of the foregoing, (a) if only one of S&P and Moody’s
shall have in effect a rating for any class of non-credit enhanced long-term
senior unsecured debt issued by the Parent, the Public Debt Rating shall be the
available rating; (b) if neither S&P nor Moody’s shall have in effect a rating
for any class of non-credit enhanced long-term senior unsecured debt issued by
the Parent, the Public Debt Rating shall be the rating which is three rating
levels below the Parent’s S&P financial strength rating at such time, provided
that, in the event that the Parent’s S&P financial strength rating is affirmed
at (i) A+, the applicable Level will be Level 2 and (ii) A+ and on credit
watch/review with negative implications, the applicable Level will be Level 3;
(c) if any rating established by S&P or Moody’s shall be changed, such change
shall be effective as of the date on which such change is first announced
publicly by the rating agency making such change; and (d) if S&P or Moody’s
shall change the basis on which ratings are established, each reference herein
to ratings announced by S&P or Moody’s, as the case may be, shall refer to the
then equivalent rating by S&P or Moody’s, as the case may be.

 

“Redeemable” means, with respect to any Equity Interest, any Debt or any other
right or obligation, any such Equity Interest, Debt, right or obligation that
(a) the issuer has undertaken to redeem at a fixed or determinable date or
dates, whether by operation of a sinking fund or otherwise, or upon the
occurrence of a condition not solely within the control of the issuer or (b) is
redeemable at the option of the holder.

 

“Register” has the meaning specified in Section 9.07(d).

 

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.

 

“Required Banks” means, at any time, Banks owed or holding at least a majority
in interest of the sum of (a) aggregate principal amount of the Letter of Credit
Advances outstanding at such time and (b) the aggregate Available Amount of all
Letters of Credit outstanding at such time, or, if no such principal amount and
no Letters of Credit are outstanding at such time, Banks having LC Commitment
Amounts constituting at least a majority in interest of the aggregate of the LC
Commitment Amounts; provided, however, that if any Bank shall be a Defaulting
Bank at such time, there shall be excluded from the determination of Required
Banks at such time (A) the aggregate principal amount of the interest of such
Bank in Letter of Credit Advances and outstanding at such time, (B) such Bank’s
Pro Rata Share of the aggregate Available Amount of all Letters of Credit
outstanding at such time and (C) the Unused LC Commitment Amount of such Bank at
such time.

 

“Responsible Officer” means the Chairman, Chief Executive Officer, President,
Chief Financial Officer, Chief Accounting Officer, Treasurer or General Counsel
of the Parent.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc.

 

“Secured Letter of Credit Facility” means the $500,000,000 secured letter of
credit facility for the benefit of the Account Parties evidenced by the
Reimbursement Agreement, dated as of even date herewith, among the Account
Parties, the banks and other lenders named therein, Bank of America, as
Syndication Agent, Barclays and CitiBank, as Issuing Banks, and

 

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Wachovia, as an Issuing Bank and as Administrative Agent (as amended or
otherwise modified from time to time).

 

“Securitization Transaction” means any sale, assignment or other transfer by
Parent or any Subsidiary of any accounts receivable, premium finance loan
receivables, lease receivables or other payment obligations owing to Parent or
such Subsidiary or any interest in any of the foregoing, together in each case
with any collections and other proceeds thereof, any collection or deposit
accounts related thereto, and any collateral, guaranties or other property or
claims in favor of Parent or such Subsidiary supporting or securing payment by
the obligor thereon of, or otherwise related to, any such receivables.

 

“Significant Subsidiary” means a Subsidiary of Parent that is a “significant
subsidiary” of the Parent under Regulation S-X promulgated by the Securities and
Exchange Commission.

 

“Solvent” and “Solvency” mean, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay such debts and
liabilities as they mature and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person’s property would constitute an unreasonably small capital. The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

 

“Special Purpose Trust” means a special purpose business trust established by
the Parent or ACE INA of which the Parent or ACE INA will hold all the common
securities, which will be the issuer of the Preferred Securities, and which will
loan to the Parent or ACE INA (such loan being evidenced by the Debentures) the
net proceeds of the issuance and sale of the Preferred Securities and common
securities of such Special Purpose Trust.

 

“Subsidiary” of any Person means any corporation, partnership, joint venture,
limited liability company, trust or estate of which (or in which) more than 50%
of (a) the issued and outstanding capital stock having ordinary voting power to
elect a majority of the Board of Directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such partnership,
joint venture or limited liability company or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person’s other Subsidiaries.

 

“Subsidiary Guarantors” means the Account Parties (other than the Parent).

 

“Syndication Agent” has the meaning specified in the recital of parties to this
Agreement.

 

“Taxes” has the meaning specified in Section 2.08(a).

 

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“Tempest” has the meaning specified in the recital of parties to this Agreement.

 

“Tempest Life” has the meaning specified in the recital of parties to this
Agreement.

 

“Third Party Letter of Credit” means a Letter of Credit other than an
Intercompany Letter of Credit.

 

“Total Capitalization” means, at any time, an amount (without duplication) equal
to (i) the then outstanding Consolidated Debt of the Parent and its Subsidiaries
plus (ii) Consolidated stockholders equity of the Parent and its Subsidiaries
plus (without duplication) (iii) the then issued and outstanding amount of
Preferred Securities (including Mandatorily Convertible Preferred Securities)
and (without duplication) Debentures.

 

“Type”, with respect to any Letter of Credit, means and refers to whether such
Letter of Credit is an Intercompany Letter of Credit or a Third Party Letter of
Credit.

 

“Unused LC Commitment Amount” means, with respect to any Bank at any time, (a)
such Bank’s LC Commitment Amount at such time minus (b) such Bank’s Pro Rata
Share of (i) the aggregate Available Amount of all Letters of Credit hereunder
(including, without limitation, all Existing Letters of Credit) and (ii) the
aggregate principal amount of all Letter of Credit Advances made by the Issuing
Banks pursuant to Section 2.02(g) and outstanding at such time (whether held by
the Issuing Banks or the Banks).

 

“Voting Interests” means shares of capital stock issued by a corporation, or
equivalent Equity Interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the election
of directors (or persons performing similar functions) of such Person, even if
the right so to vote has been suspended by the happening of such a contingency.

 

“Wachovia” has the meaning specified in the recital of parties to this
Agreement.

 

“Welfare Plan” means a welfare plan, as defined in Section 3(1) of ERISA, that
is maintained for employees of any Loan Party or in respect of which any Loan
Party could have liability.

 

“Withdrawal Liability” has the meaning specified in Part I of Subtitle E of
Title IV of ERISA.

 

1.02 Computation of Time Periods; Other Definitional Provisions. In this
Agreement and the other Loan Documents in the computation of periods of time
from a specified date to a later specified date, the word “from” means “from and
including” and the words “to” and “until” each mean “to but excluding”.
References in the Loan Documents to any agreement or contract “as amended” shall
mean and be a reference to such agreement or contract as amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with its terms.

 

1.03 Accounting Terms and Determinations. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements required to be delivered
hereunder shall be prepared in

 

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accordance with generally accepted accounting principles as in effect from time
to time in the United States of America (“GAAP”), applied on a basis consistent
(except for changes concurred in by the Parent’s independent public accountants)
with the most recent audited consolidated financial statements of the Parent and
its Subsidiaries delivered to the Banks; provided that, if the Parent notifies
the Administrative Agent that the Parent wishes to amend any covenant in Article
V to eliminate the effect of any change in generally accepted accounting
principles on the operation of such covenant (or if the Administrative Agent
notifies the Parent that the Required Banks wish to amend Article V for such
purpose), then the Parent’s compliance with such covenant shall be determined on
the basis of generally accepted accounting principles in effect immediately
before the relevant change in generally accepted accounting principles became
effective (and, concurrently with the delivery of any financial statements
required to be delivered hereunder, the Parent shall provide a statement of
reconciliation conforming such financial information to such generally accepted
accounting principles as previously in effect), until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Parent and
the Required Banks.

 

ARTICLE II

 

AMOUNTS AND TERMS OF

THE LETTERS OF CREDIT

 

2.01 The Letters of Credit. Each Issuing Bank agrees, on the terms and subject
to the conditions herein set forth, to issue standby letters of credit (the
“Letters of Credit”) for the account of any Account Party on any Business Day
from time to time during the period from the Effective Date to the Expiration
Date. From and after the Effective Date, the Existing Letters of Credit shall be
Letters of Credit hereunder. Letters of Credit may be issued as Intercompany
Letters of Credit or Third Party Letters of Credit, subject to the terms and
conditions of this Agreement. No Issuing Bank shall have any obligation to
issue, and no Account Party will request the issuance of, any Letter of Credit
hereunder if either (a) the aggregate Available Amounts of all Letters of Credit
issued by such Issuing Bank would exceed, after giving effect to such issuance,
the maximum amount set forth in a letter agreement between such Issuing Bank and
the Parent, on behalf of the Account Parties, or (b) any Bank’s Pro Rata Share
of the Available Amount of such Letter of Credit exceeds, immediately before the
time of such issuance, an amount equal to such Bank’s Pro Rata Share of the
total Unused LC Commitment Amounts of the Banks at such time (as such amount
shall be advised by the Administrative Agent to the respective Issuing Bank as
contemplated by Section 2.02). Unless all the Banks consent otherwise in
writing, no Issuing Bank shall have any obligation to issue, and no Account
Party shall request the issuance of, any Letter of Credit hereunder if the
Available Amount of such Letter of Credit exceeds, immediately before the time
of such issuance, an amount equal to the total Unused LC Commitment Amounts of
the Banks at such time (as such amount shall be advised by the Administrative
Agent to the respective Issuing Bank as contemplated by Section 2.02). No
Issuing Bank shall have any obligation to issue, and no Account Party shall
request the issuance of, any Letter of Credit except within the following
limitations: (i) subject to the provisions of Section 2.15, each Letter of
Credit shall be denominated in U.S. dollars, (ii) each Letter of Credit shall be
payable only against sight drafts (and not time drafts) and (iii) no Letter of
Credit shall have an expiration date (including all rights of the Applicable
Account Party or the beneficiary to require renewal) later than one year after
the date of issuance thereof,

 

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but a Letter of Credit may by its terms be automatically renewable annually
unless the respective Issuing Bank notifies the beneficiary thereof of its
election not to renew such Letter of Credit (which such Issuing Bank agrees to
do on and subject to the terms of Section 2.02(d)). No Issuing Bank shall have
any obligation to issue any letter of credit which is unsatisfactory in form,
substance or beneficiary to such Issuing Bank in the exercise of its reasonable
judgment consistent with its customary practice. Letters of Credit may be issued
for the account of any Subsidiary of the Parent that is not an Account Party
hereunder, provided that the Parent shall be a joint applicant and account party
with respect to any such Letter of Credit.

 

2.02 Issuance and Renewals and Drawings, Participations and Reimbursement with
Respect to Letters of Credit.

 

(a) Request for Issuance. An Account Party may from time to time request, upon
at least three Business Days’ notice (given not later than 11:00 A.M. Charlotte,
North Carolina time on the last day permitted therefor), an Issuing Bank issue
or renew (other than any automatic renewal thereof) a Letter of Credit by:

 

(i) delivering to such Issuing Bank, with a copy to the Administrative Agent,
either (x) a written request to such effect or (y) a request made in electronic
form through such Issuing Bank’s remote access system and in accordance with the
terms and conditions (including any written agreements between such Issuing Bank
and any Account Party) applicable thereto, in each case specifying the date on
which such Letter of Credit is to be issued (which shall be a Business Day), the
expiration date thereof, the Available Amount thereof, the name and address of
the beneficiary thereof and the form thereof, and in each case with a copy of
such request (or, in the case of clause (y) above, a written or electronic
summary thereof) to the Administrative Agent; and

 

(ii) in the case of the issuance of a Letter of Credit, delivering to such
Issuing Bank, with a copy to the Administrative Agent, a completed agreement and
application with respect to such Letter of Credit as such Issuing Bank may
specify for use in connection with such requested Letter of Credit (a “Letter of
Credit Agreement”), together with such other certificates, documents and other
papers or information as are specified in such Letter of Credit Agreement or as
may be required pursuant to such Issuing Bank’s customary practices for the
issuance of letters of credit (including requirements relating to requests made
through such Issuing Bank’s remote access system).

 

If the limitation set forth in Section 2.01(b) is satisfied and if the Required
Banks have not given notice to the Administrative Agent to cease issuing or
renewing Letters of Credit as contemplated by this Agreement, the Administrative
Agent shall promptly notify the respective Issuing Bank (in writing or by
telephone immediately confirmed in writing) that such Issuing Bank is authorized
to issue or renew, as the case may be, such Letter of Credit. An Issuing Bank
shall not issue or renew, as the case may be, any Letter of Credit (other than
by the automatic renewal thereof) unless it shall have received notice from the
Administrative Agent that it is authorized to do so as described in the
preceding sentence. If such Issuing Bank issues or renews a Letter of Credit, it
shall deliver the original of such Letter of Credit to the beneficiary thereof

 

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or as the Applicable Account Party shall otherwise direct, and shall promptly
notify the Administrative Agent thereof and furnish a copy thereof to the
Administrative Agent. Each Issuing Bank may issue Letters of Credit through any
of its branches or Affiliates (whether domestic or foreign) that issue letters
of credit, and each Account Party authorizes and directs each Issuing Bank to
select the branch or Affiliate that will issue or process any Letter of Credit.

 

(b) Request for Extension or Increase. An Account Party may from time to time
request an Issuing Bank extend the expiration date of an outstanding Letter of
Credit issued for its account or increase (or, with the consent of the
beneficiary, decrease) the Available Amount of or the amount available to be
drawn on such Letter of Credit by delivering to such Issuing Bank, with a copy
to the Administrative Agent, either (i) a written request to such effect or (ii)
a request made in electronic form through such Issuing Bank’s remote access
system. Such extension or increase shall for all purposes hereunder (including
for purposes of Section 2.02(a)) be treated as though such Account Party had
requested issuance of a replacement Letter of Credit (except only that such
Issuing Bank may, if it elects, issue a notice of extension or increase in lieu
of issuing a new Letter of Credit in substitution for the outstanding Letter of
Credit).

 

(c) Automatic Renewals. If any Letter of Credit shall provide for the automatic
renewal of the expiry date thereof unless the respective Issuing Bank gives
notice that such expiry date shall not be renewed, then the respective Issuing
Bank shall allow such Letter of Credit to be renewed unless it shall have
received, at least five days prior to the date on which such notice of
nonrenewal must be delivered under such Letter of Credit (or such shorter period
acceptable to the respective Issuing Bank) (i) notice from the Administrative
Agent that such Issuing Bank is not authorized to renew such Letter of Credit
(or Letters of Credit generally), or (ii) notice from any Account Party that it
does not want the Issuing Bank to renew such Letter of Credit. An Issuing Bank
shall not allow any Letter of Credit to be automatically renewed if it has
received notice from the Administrative Agent, as described in the preceding
sentence, that it is not authorized to do so anytime prior to the date five days
prior to the date on which the notice of nonrenewal must be delivered under such
Letter of Credit.

 

(d) Limitations on Issuance, Extension, Renewal and Amendment. As between each
Issuing Bank, on the one hand, and the Agents and the Banks, on the other hand,
each Issuing Bank shall be justified and fully protected (i) in issuing or
renewing a proposed Letter of Credit (other than by the automatic renewal
thereof) if such Issuing Bank has received notice from the Administrative Agent
that such Issuing Bank is authorized to issue or renew such Letter of Credit,
and (ii) in allowing a Letter of Credit to be automatically renewed if such
Issuing Bank has not received notice from the Administrative Agent as provided
in Section 2.02(c) hereof that it is not authorized to do so at any time prior
to the date five days prior to the date on which the notice of nonrenewal must
be delivered under such Letter of Credit, in either case, notwithstanding any
subsequent notices to such Issuing Bank, any knowledge of a Default, any
knowledge of failure of any condition specified in Article III hereof to be
satisfied, any other knowledge of such Issuing Bank, or any other event,
condition or circumstance whatsoever. Each Issuing Bank may amend, modify or
supplement Letters of Credit or Letter of Credit Agreements, or waive compliance
with any condition of issuance, renewal or payment, without the consent of, and
without liability to, any Agent or any Bank, provided that any such amendment,
modification or supplement that extends the expiration date or increases the
Available Amount of or the amount available to be drawn on an outstanding Letter
of Credit

 

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shall be subject to Section 2.01. With respect to each Letter of Credit that
remains outstanding at any time after the Expiration Date and that provides by
its terms for automatic renewal, the respective Issuing Bank shall notify the
beneficiary thereof, in accordance with the terms specified for such notice in
such Letter of Credit, of such Issuing Bank’s election not to renew such Letter
of Credit.

 

(e) Letter of Credit Participating Interests. Concurrently with the issuance of
each Letter of Credit (and upon the Effective Date, with respect to each
Existing Letter of Credit, and without any further action by any party to this
Agreement), the respective Issuing Bank automatically shall be deemed,
irrevocably and unconditionally, to have sold, assigned, transferred and
conveyed to each other Bank, and each other Bank automatically shall be deemed,
irrevocably and unconditionally, severally to have purchased, acquired, accepted
and assumed from such Issuing Bank, without recourse to, or representation or
warranty by, such Issuing Bank, an undivided interest, in a proportion equal to
such Bank’s Pro Rata Share, in all of such Issuing Bank’s rights and obligations
in, to or under such Letter of Credit, the related Letter of Credit Agreement,
all reimbursement obligations with respect to such Letter of Credit, and all
collateral, guarantees and other rights from time to time directly or indirectly
securing the foregoing (such interest of each Bank being referred to herein as a
“Letter of Credit Participating Interest”, it being understood that the Letter
of Credit Participating Interest of such Issuing Bank is the interest not
otherwise attributable to the Letter of Credit Participating Interests of the
other Banks). Each Bank irrevocably and unconditionally agrees to the
immediately preceding sentence, such agreement being herein referred to as such
Bank’s “Letter of Credit Participating Interest Commitment”. Amounts, other than
Letter of Credit Advances made by a Bank other than the Issuing Banks and other
than Letter of Credit commissions under Section 2.05(c)(i), payable from time to
time under or in connection with a Letter of Credit or Letter of Credit
Agreement shall be for the sole account of the Issuing Banks. On the date that
any assignee becomes a party to this Agreement in accordance with Section 9.07
hereof, Letter of Credit Participating Interests in all outstanding Letters of
Credit held by the Bank from which such assignee acquired its interest hereunder
shall be proportionately reallocated between such assignee and such assignor
Bank (and, to the extent such assignor Bank is an Issuing Bank, the assignee
Bank shall be deemed to have acquired a Letter of Credit Participating Interest
from such Issuing Bank to such extent). Notwithstanding any other provision
hereof, each Bank hereby agrees that its obligation to participate in each
Letter of Credit, its obligation to make the payments specified in Section
2.02(f), and the right of each Issuing Bank to receive such payments in the
manner specified therein, are each absolute, irrevocable and unconditional and
shall not be affected by any event, condition or circumstance whatever. The
failure of any Bank to make any such payment shall not relieve any other Bank of
its funding obligation hereunder on the date due, but no Bank shall be
responsible for the failure of any other Bank to meet its funding obligations
hereunder.

 

(f) Payment by Banks on Account of Unreimbursed Draws. If an Issuing Bank makes
a payment under any Letter of Credit and is not reimbursed in full therefor in
accordance with Section 2.03(a), such Issuing Bank may notify the Administrative
Agent thereof (which notice may be by telephone), and the Administrative Agent
shall forthwith notify each Bank (which notice may be by telephone promptly
confirmed in writing) thereof. No later than the Administrative Agent’s close of
business on the date such notice is given (if notice is given by 2:00 P.M.
Charlotte, North Carolina time) or 10:00 A.M. Charlotte, North Carolina time the

 

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following day (if notice is given after 2:00 P.M. Charlotte, North Carolina time
or in the case of any Bank whose Applicable Lending Office is located in
Europe), each Bank will pay to the Administrative Agent, for the account of such
Issuing Bank, in immediately available funds, an amount equal to such Bank’s Pro
Rata Share of the unreimbursed portion of such payment by such Issuing Bank.
Amounts received by the Administrative Agent for the account of such Issuing
Bank shall be forthwith transferred, in immediately available funds, to such
Issuing Bank. If and to the extent that any Bank fails to make such payment to
the Administrative Agent for the account of such Issuing Bank on such date, such
Bank shall pay such amount on demand, together with interest, for such Issuing
Bank’s own account, for each day from and including the date such payment is due
from such Bank to such Issuing Bank to but not including the date of repayment
to such Issuing Bank (before and after judgment) at a rate per annum for each
day (i) from and including the date such payment is due from such Bank to such
Issuing Bank to and including the second Business Day thereafter equal to the
Federal Funds Rate and (ii) thereafter equal to the Base Rate. For avoidance of
doubt, it is understood and agreed by the Banks that Letters of Credit issued
prior to the Expiration Date may, by their terms, remain outstanding after the
Expiration Date and that the obligations of the Banks to make payments under
this Section 2.02(f) shall continue from and after the Expiration Date until the
expiration or termination of all Letters of Credit, subject to and in accordance
with the terms hereof.

 

(g) Letter of Credit Advances. The term “Letter of Credit Advance” is used in
this Agreement in accordance with the meanings set forth in this Section
2.02(g). The making of any payment by an Issuing Bank under a Letter of Credit
is sometimes referred to herein as the making of a Letter of Credit Advance by
such Issuing Bank in the amount of such payment. The making of any payment by a
Bank for the account of an Issuing Bank under Section 2.02(f) on account of an
unreimbursed drawing on a Letter of Credit is sometimes referred to herein as
the making of a Letter of Credit Advance to the Applicable Account Party by such
Bank. The making of such a Letter of Credit Advance by a Bank with respect to an
unreimbursed drawing on a Letter of Credit shall reduce, by a like amount, the
outstanding Letter of Credit Advance of the Issuing Bank with respect to such
unreimbursed drawing.

 

(h) Letter of Credit Reports. Each Issuing Bank will furnish to the
Administrative Agent prompt written notice of each issuance or renewal of a
Letter of Credit (including the Available Amount and expiration date thereof),
amendment to a Letter of Credit, cancellation of a Letter of Credit and payment
on a Letter of Credit. The Administrative Agent will furnish (A) to each Bank
prior to the fifteenth Business Day of each calendar quarter a written report
summarizing issuance, renewal and expiration dates of Letters of Credit issued
or renewed during the preceding calendar quarter and payments and reductions in
Available Amount during such calendar quarter on all Letters of Credit and (B)
to each Bank prior to the fifteenth Business Day of each calendar quarter a
written report setting forth the average daily aggregate Available Amount during
the preceding calendar quarter of all Letters of Credit.

 

2.03 Repayment of Advances.

 

(a) Account Parties’ Reimbursement Obligation.

 

(i) Each Account Party hereby agrees to reimburse each Issuing Bank (by making
payment to the Administrative Agent for the account of each Issuing

 

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Bank in accordance with Section 2.07) in the amount of each payment made by each
Issuing Bank under any Letter of Credit issued for such Account Party’s account,
such reimbursement to be made on the date such payment under such Letter of
Credit is made by the Issuing Bank (but not earlier than one Business Day after
notice of the drawing giving rise to such payment under such Letter of Credit is
given to such Account Party). Such reimbursement obligation shall be payable
without further notice, protest or demand, all of which are hereby waived, and
an action therefor shall immediately accrue. To the extent such payment by such
Account Party is not timely made as provided in the first sentence of this
clause (i), such Account Party hereby agrees to pay to the Administrative Agent,
for the respective accounts of each Issuing Bank and the Banks which have funded
their respective shares of such amount remaining unpaid by such Account Party,
on demand, interest at a rate per annum equal to the Base Rate plus 2%, for each
day from and including the date on which the Applicable Account Party is to
reimburse such Issuing Bank to, but excluding, the date such obligation is paid
in full.

 

(ii) The obligation of each Account Party to reimburse each Issuing Bank for any
payment made by each Issuing Bank under any Letter of Credit, and the obligation
of each Bank under Section 2.02(f) with respect thereto, shall be unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement, the applicable Letter of Credit Agreement and any other applicable
agreement or instrument under all circumstances, including, without limitation,
the following circumstances:

 

(A) any lack of validity or enforceability of any Loan Document, any Letter of
Credit Agreement, any Letter of Credit or any other agreement or instrument
relating thereto (all of the foregoing being, collectively, the “L/C Related
Documents”);

 

(B) any change in the time, manner or place of payment of, or in any other term
of, all or any of the obligations of any Account Party or any other Person in
respect of any L/C Related Document or any other amendment or waiver of or any
consent to departure from all or any of the L/C Related Documents;

 

(C) the existence of any claim, set-off, defense or other right that any Account
Party or any other Person may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Persons for which any such beneficiary
or any such transferee may be acting), any Issuing Bank or any other Person,
whether in connection with the transactions contemplated by the L/C Related
Documents or any unrelated transaction;

 

(D) any statement or any other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in

 

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any respect or any statement therein being untrue or inaccurate in any respect;

 

(E) payment by any Issuing Bank under a Letter of Credit against presentation of
a draft or certificate that does not strictly comply with the terms of such
Letter of Credit;

 

(F) any exchange, release or non-perfection of any collateral, or any release or
amendment or waiver of or consent to departure from the Guaranty or any other
guarantee, for all or any of the obligations of any Account Party or any other
Person in respect of the L/C Related Documents; or

 

(G) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including, without limitation, any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any
Account Party or a guarantor.

 

(b) Rescission. If any amount received by an Issuing Bank on account of any
Letter of Credit Advance shall be avoided, rescinded or otherwise returned or
paid over by such Issuing Bank for any reason at any time, whether before or
after the termination of this Agreement (or such Issuing Bank believes in good
faith that such avoidance, rescission, return or payment is required, whether or
not such matter has been adjudicated), each Bank will (except to the extent a
corresponding amount received by such Bank on account of its Letter of Credit
Advance relating to the same payment on a Letter of Credit has been avoided,
rescinded or otherwise returned or paid over by such Bank), promptly upon notice
from the Administrative Agent or such Issuing Bank, pay over to the
Administrative Agent for the account of such Issuing Bank its Pro Rata Share of
such amount, together with its Pro Rata Share of any interest or penalties
payable with respect thereto.

 

2.04 Termination or Reduction of the LC Commitment Amounts. The Parent may, upon
at least three Business Days’ notice to the Administrative Agent, terminate in
whole or reduce in part the unused portion of the LC Commitment Amounts;
provided, however, that each partial reduction (i) shall be in an aggregate
amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof
and (ii) shall be made ratably among the Banks in accordance with their LC
Commitment Amounts.

 

2.05 Fees.

 

(a) Commitment Fee. The Account Parties jointly and severally agree to pay to
the Administrative Agent for the account of the Banks a commitment fee, from the
Effective Date in the case of each Initial Bank and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Bank in
the case of each other Bank until the Expiration Date, payable in arrears
quarterly on the last Business Day of each March, June, September and December
commencing December 31, 2004 and on the Expiration Date, at the rate of the
Applicable Commitment Fee Percentage on the average daily Unused LC Commitment
Amount of each Bank during such quarter (or shorter period); provided, however,

 

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that no commitment fee shall accrue on the LC Commitment Amount of a Defaulting
Bank so long as such Bank shall be a Defaulting Bank.

 

(b) Administrative Agent’s Fees. The Account Parties jointly and severally agree
to pay to the Administrative Agent for its own account such fees as may from
time to time be agreed between the Parent and the Administrative Agent.

 

(c) Letter of Credit Fees, Etc.

 

(i) The Account Parties jointly and severally agree to pay to the Administrative
Agent for the account of each Bank a commission, payable in arrears quarterly on
the last Business Day of each March, June, September and December commencing
December 31, 2004, and on the Expiration Date, on such Bank’s Pro Rata Share of
the average daily aggregate Available Amount during such quarter (or shorter
period) of all Letters of Credit of each Type outstanding from time to time at
the rate equal to the then Applicable Margin with respect to such Type of
Letters of Credit.

 

(ii) The Account Parties jointly and severally agree to pay (x) to Wachovia, in
its capacity as an Issuing Bank and for its own account, the facing fee referred
to the Fee Letter, on the terms set forth therein, and (y) each Issuing Bank’s
customary issuance, presentation, amendment and other processing fees, and other
standard costs and charges, relating to letters of credit as are from time to
time in effect. With respect to each Existing Letters of Credit, the respective
Issuing Bank shall be entitled to receive the fees and other amounts provided
for under this Section 2.05(c)(ii) (to the extent not previously paid to such
Issuing Bank pursuant to the Existing Reimbursement Agreement or the Bilateral
Agreements) as if the Existing Letters of Credit were issued hereunder on the
Effective Date.

 

2.06 Increased Costs, Etc.

 

(a) If, due to either (i) the introduction of or any change in or in the
interpretation of, in each case after the date hereof, any law or regulation or
(ii) the compliance with any guideline or request issued after the date hereof
from any central bank or other governmental authority (whether or not having the
force of law), there shall be any increase in the cost to any Bank of agreeing
to issue or of issuing or maintaining or participating in Letters of Credit or
the making of Letter of Credit Advances (excluding, for purposes of this Section
2.06, any such increased costs resulting from (x) Taxes or Other Taxes (as to
which Section 2.08 shall govern) and (y) changes in the basis of taxation of
overall net income or overall gross income by the United States or by the
foreign jurisdiction or state under the laws of which such Bank is organized or
has its Applicable Lending Office or any political subdivision thereof), then
the Account Parties jointly and severally agree to pay, from time to time,
within five days after demand by such Bank (with a copy of such demand to the
Administrative Agent), which demand shall include a statement of the basis for
such demand and a calculation in reasonable detail of the amount demanded, to
the Administrative Agent for the account of such Bank additional amounts
sufficient to compensate such Bank for such increased cost. A certificate as to
the amount of

 

24

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such increased cost, submitted to the Account Parties by such Bank, shall be
conclusive and binding for all purposes, absent manifest error.

 

(b) If, due to either (i) the introduction of or any change in or in the
interpretation of any law or regulation, in each case after the date hereof, or
(ii) the compliance with any guideline or request issued after the date hereof
from any central bank or other governmental authority (whether or not having the
force of law), there shall be any increase in the amount of capital required or
expected to be maintained by any Bank or any corporation controlling such Bank
as a result of or based upon the existence of such Bank’s commitment to lend
hereunder and other commitments of such type, then, within five days after
demand by such Bank or such corporation (with a copy of such demand to the
Administrative Agent), which demand shall include a statement of the basis for
such demand and a calculation in reasonable detail of the amount demanded, the
Account Parties jointly and severally agree to pay to the Administrative Agent
for the account of such Bank, from time to time as specified by such Bank,
additional amounts sufficient to compensate such Bank in the light of such
circumstances, to the extent that such Bank reasonably determines such increase
in capital to be allocable to the existence of such Bank’s commitment to issue
or participate in Letters of Credit hereunder or to the issuance or maintenance
of or participation in any Letters of Credit. A certificate as to such amounts
submitted to the Account Parties by such Bank shall be conclusive and binding
for all purposes, absent manifest error.

 

(c) Each Bank shall promptly notify the Account Parties and the Administrative
Agent of any event of which it has actual knowledge which will result in, and
will use reasonable commercial efforts available to it (and not, in such Bank’s
good faith judgment, otherwise disadvantageous to such Bank) to mitigate or
avoid any obligation by the Account Parties to pay any amount pursuant to
Section 2.06(a) or 2.06(b) above or pursuant to Section 2.08 (and, if any Bank
has given notice of any such event and thereafter such event ceases to exist,
such Bank shall promptly so notify the Account Parties and the Administrative
Agent). Without limiting the foregoing, each Bank will designate a different
Applicable Lending Office if such designation will avoid (or reduce the cost to
the Account Parties of) any event described in the preceding sentence and such
designation will not, in such Bank’s good faith judgment, be otherwise
disadvantageous to such Bank.

 

(d) Notwithstanding the provisions of Section 2.06(a), 2.06(b) or 2.08 (and
without limiting Section 2.06(c) above), if any Bank fails to notify the Account
Parties of any event or circumstance that will entitle such Bank to compensation
pursuant to Section 2.06(a), 2.06(b) or 2.08 within 120 days after such Bank
obtains actual knowledge of such event or circumstance, then such Bank shall not
be entitled to compensation from the Account Parties for any amount arising
prior to the date which is 120 days before the date on which such Bank notifies
the Account Parties of such event or circumstance. For avoidance of doubt, it is
noted that the term “Bank” as used in this Section 2.06 and in other Sections of
this Agreement includes the Issuing Banks in its capacity as such.

 

2.07 Payments and Computations.

 

(a) The Account Parties shall make each payment hereunder irrespective of any
right of counterclaim or set-off (except as otherwise provided in Section 2.11),
not later than

 

25

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11:00 A.M. (Charlotte, North Carolina time) on the day when due, in U.S.
dollars, to the Administrative Agent at the Administrative Agent’s Account in
same day funds, with payments being received by the Administrative Agent after
such time being deemed to have been received on the next succeeding Business
Day. The Administrative Agent will promptly thereafter cause like funds to be
distributed (i) if such payment by such Account Party is in respect of
principal, interest, commitment fees or any other amount then payable hereunder
to more than one Bank, to such Banks for the account of their respective
Applicable Lending Offices ratably in accordance with the amounts of such
respective amount then payable to such Banks and (ii) if such payment by such
Account Party is in respect of any amount then payable hereunder to one Bank, to
such Bank for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement. Upon its acceptance of
an Assignment and Acceptance and recording of the information contained therein
in the Register pursuant to Section 9.07(d), from and after the effective date
of such Assignment and Acceptance, the Administrative Agent shall make all
payments hereunder in respect of the interest assigned thereby to the Bank
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.

 

(b) Each Account Party hereby authorizes each Bank, if an Event of Default under
Section 6.01(a) has occurred and is continuing, to charge from time to time
against any or all of such Account Party’s accounts with such Bank any amount
that resulted in such Event of Default.

 

(c) All computations of interest on Letter of Credit Advances (and any other
amount payable by reference to the Base Rate) when the Base Rate is determined
by reference to Wachovia’s prime rate shall be made by the Administrative Agent
on the basis of a year of 365 days or, if applicable, 366 days; all other
computations of interest, fees and Letter of Credit commissions shall be made by
the Administrative Agent on the basis of a year of 360 days. All such
computations shall be made for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such interest,
fees or commissions are payable. Each determination by the Administrative Agent
of an interest rate, fee or commission hereunder shall be conclusive and binding
for all purposes, absent manifest error.

 

(d) Whenever any payment hereunder shall be stated to be due on a day other than
a Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
payment of interest or fee, as the case may be.

 

2.08 Taxes.

 

(a) Any and all payments by any Loan Party hereunder shall be made, in
accordance with Section 2.07, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Bank and each Agent, taxes that are imposed on its overall net income by
the United States and taxes that are imposed on its overall net income (and
franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction
under the laws of which such Bank or such Agent, as the case may be, is
organized or any political subdivision thereof and, in

 

26

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the case of each Bank, taxes that are imposed on its overall net income (and
franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction of
such Bank’s Applicable Lending Office or any political subdivision thereof (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder being herein referred to as
“Taxes”). If any Loan Party shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder or to any Bank or any Agent, (i) the sum
payable by such Loan Party shall be increased as may be necessary so that after
such Loan Party and the Administrative Agent have made all required deductions
(including deductions applicable to additional sums payable under this Section
2.08) such Bank or such Agent, as the case may be, receives an amount equal to
the sum it would have received had no such deductions been made, (ii) such Loan
Party shall make all such deductions and (iii) such Loan Party shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.

 

(b) In addition, each Loan Party shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or from the execution, delivery or registration
of, performance under, or otherwise with respect to, this Agreement or any other
Loan Document (herein referred to as “Other Taxes”).

 

(c) Each Loan Party shall indemnify each Bank and each Agent for and hold them
harmless against the full amount of Taxes and Other Taxes, and for the full
amount of taxes of any kind imposed by any jurisdiction on amounts payable under
this Section 2.08, imposed on or paid by such Bank or such Agent (as the case
may be) and any liability (including penalties, additions to tax, interest and
expenses) arising therefrom or with respect thereto. This indemnification
payment shall be made within 30 days from the date such Bank or such Agent (as
the case may be) makes written demand therefor.

 

(d) Within 30 days after the date of any payment of Taxes, each Loan Party shall
furnish to the Administrative Agent, at its address referred to in Section 9.02,
the original or a certified copy of a receipt evidencing such payment. In the
case of any payment hereunder by or on behalf of a Loan Party through an account
or branch outside the United States or by or on behalf of a Loan Party by a
payor that is not a United States person, if such Loan Party determines that no
Taxes are payable in respect thereof, such Loan Party shall furnish, or shall
cause such payor to furnish, to the Administrative Agent, at such address, an
opinion of counsel acceptable to the Administrative Agent stating that such
payment is exempt from Taxes. For purposes of this Section 2.08(d) or Section
2.08(e), the terms “United States” and “United States person” shall have the
meanings specified in Section 7701(a)(9) and 7701(a)(10) of the Internal Revenue
Code, respectively.

 

(e) Each Bank organized under the laws of a jurisdiction outside the United
States shall, on or prior to the date of its execution and delivery of this
Agreement in the case of each Initial Bank or each Issuing Bank, as the case may
be, and on the date of the Assignment and Acceptance pursuant to which it
becomes a Bank in the case of each other Bank, and from time to time thereafter
as requested in writing by the Parent (but only so long thereafter as such Bank
remains lawfully able to do so), provide each of the Administrative Agent and
the Parent with two original Internal Revenue Service forms W-8BEN or W-8ECI or
(in the case of a Bank that has certified in writing to the Administrative Agent
that it is not a “bank” as defined in Section

 

27

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881(c)(3)(A) of the Internal Revenue Code) form W-8 (and, if such Bank delivers
a form W-8, a certificate representing that such Bank is not a “bank” for
purposes of Section 881(c)(3)(A) of the Internal Revenue Code, is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the
Internal Revenue Code) of the Parent and is not a controlled foreign corporation
related to the Parent (within the meaning of Section 864(d)(4) of the Internal
Revenue Code)), as appropriate, or any successor or other form prescribed by the
Internal Revenue Service, certifying that such Bank is exempt from or entitled
to a reduced rate of United States withholding tax on payments pursuant to this
Agreement or, in the case of a Bank providing a form W-8, certifying that such
Bank is a foreign corporation, partnership, estate or trust. If the forms
provided by a Bank at the time such Bank first becomes a party to this Agreement
indicate a United States interest withholding tax rate in excess of zero,
withholding tax at such rate shall be considered excluded from Taxes unless and
until such Bank provides the appropriate forms certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall be considered
excluded from Taxes for periods governed by such forms; provided, however, that
if, at the effective date of the Assignment and Acceptance pursuant to which a
Bank becomes a party to this Agreement, the Bank assignor was entitled to
payments under Section 2.08(a) in respect of United States withholding tax with
respect to interest paid at such date, then, to such extent, the term Taxes
shall include (in addition to withholding taxes that may be imposed in the
future or other amounts otherwise includable in Taxes) United States withholding
tax, if any, applicable with respect to the Bank assignee on such date. If any
form or document referred to in this Section 2.08(e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form W-8BEN,
W-8ECI or W-8 (and the related certificate described above), that the Bank
reasonably considers to be confidential, the Bank shall give notice thereof to
the Parent and shall not be obligated to include in such form or document such
confidential information.

 

(f) For any period with respect to which a Bank which may lawfully do so has
failed to provide the Parent with the appropriate form described in Section
2.08(e) above (other than if such failure is due to a change in law occurring
after the date on which a form originally was required to be provided or if such
form otherwise is not required under Section 2.08(e) above), such Bank shall not
be entitled to indemnification under Sections 2.08(a) or 2.08(c) with respect to
Taxes imposed by the United States by reason of such failure; provided, however,
that should a Bank become subject to Taxes because of its failure to deliver a
form required hereunder, the Parent shall take such steps as such Bank shall
reasonably request to assist such Bank to recover such Taxes.

 

(g) Each Bank represents and warrants to the Account Parties that, as of the
date such Bank becomes a party to this Agreement, such Bank is entitled to
receive payments hereunder from the Account Parties without deduction or
withholding for or on account of any Taxes.

 

2.09 Sharing of Payments, Etc. If any Bank shall obtain at any time any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise, other than as a result of an assignment pursuant to Section 9.07)
(a) on account of obligations due and payable to such Bank hereunder at such
time in excess of its ratable share (according to the proportion of (i) the
amount of such obligations due and payable to such Bank at such time to (ii) the
aggregate amount of the obligations due and payable to all Banks hereunder at
such time)

 

28

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of payments on account of the obligations due and payable to all Banks hereunder
at such time obtained by all the Banks at such time or (b) on account of
obligations owing (but not due and payable) to such Bank hereunder at such time
in excess of its ratable share (according to the proportion of (i) the amount of
such obligations owing to such Bank at such time to (ii) the aggregate amount of
the obligations owing (but not due and payable) to all Banks hereunder at such
time) of payments on account of the obligations owing (but not due and payable)
to all Banks hereunder at such time obtained by all of the Banks at such time,
such Bank shall forthwith purchase from the other Banks such interests or
participating interests in the obligations due and payable or owing to them, as
the case may be, as shall be necessary to cause such purchasing Bank to share
the excess payment ratably with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered from such purchasing
Bank, such purchase from each other Bank shall be rescinded and such other Bank
shall repay to the purchasing Bank the purchase price to the extent of such
Bank’s ratable share (according to the proportion of (i) the purchase price paid
to such Bank to (ii) the aggregate purchase price paid to all Banks) of such
recovery together with an amount equal to such Bank’s ratable share (according
to the proportion of (i) the amount of such other Bank’s required repayment to
(ii) the total amount so recovered from the purchasing Bank) of any interest or
other amount paid or payable by the purchasing Bank in respect of the total
amount so recovered. Each Account Party agrees that any Bank so purchasing an
interest or participating interest from another Bank pursuant to this Section
2.09 may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off) with respect to such interest or
participating interest, as the case may be, as fully as if such Bank were the
direct creditor of such Account Party in the amount of such interest or
participating interest, as the case may be.

 

2.10 Use of Letters of Credit. The Letters of Credit shall be used for the
general corporate purposes of the Account Parties and their respective
Subsidiaries.

 

2.11 Defaulting Banks.

 

(a) In the event that, at any one time, (i) any Bank shall be a Defaulting Bank,
(ii) such Defaulting Bank shall owe a Defaulted Amount to any Agent or any of
the other Banks and (iii) any Account Party shall make any payment hereunder or
under any other Loan Document to the Administrative Agent for the account of
such Defaulting Bank, then the Administrative Agent may, on its behalf or on
behalf of such other Banks and to the fullest extent permitted by applicable
law, apply at such time the amount so paid by such Account Party to or for the
account of such Defaulting Bank to the payment of each such Defaulted Amount to
the extent required to pay such Defaulted Amount. In the event that the
Administrative Agent shall so apply any such amount to the payment of any such
Defaulted Amount on any date, the amount so applied by the Administrative Agent
shall constitute for all purposes of this Agreement and the other Loan Documents
payment, to such extent, of such Defaulted Amount on such date. Any such amount
so applied by the Administrative Agent shall be retained by the Administrative
Agent or distributed by the Administrative Agent to such other Banks, ratably in
accordance with the respective portions of such Defaulted Amounts payable at
such time to the Administrative Agent and such other Banks and, if the amount of
such payment made by such Account Party shall at such time be insufficient to
pay all Defaulted Amounts owing at such time to the Administrative Agent, such
other Agents and such other Banks, in the following order of priority:

 

(i) first, to the Agents for any Defaulted Amounts then owing to the Agents;

 

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(ii) second, to the Issuing Banks for any amount then due and payable to them,
in their capacity as such, by such Defaulting Bank, ratably in accordance with
such amounts then due and payable to the Issuing Banks; and

 

(iii) third, to any other Banks for any Defaulted Amounts then owing to such
other Banks, ratably in accordance with such respective Defaulted Amounts then
owing to such other Banks.

 

Any portion of such amount paid by such Account Party for the account of such
Defaulting Bank remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this Section 2.11(a), shall be applied by the
Administrative Agent as specified in Section 2.11(b).

 

(b) In the event that, at any one time, (i) any Bank shall be a Defaulting Bank,
(ii) such Defaulting Bank shall not owe a Defaulted Amount and (iii) any Account
Party, any Agent or other Bank shall be required to pay or distribute any amount
hereunder or under any other Loan Document to or for the account of such
Defaulting Bank, then such Account Party or such Agent or such other Bank shall
pay such amount to the Administrative Agent to be held by the Administrative
Agent, to the fullest extent permitted by applicable law, in escrow and the
Administrative Agent shall, to the fullest extent permitted by applicable law,
hold in escrow such amount otherwise held by it. Any funds held by the
Administrative Agent in escrow under this Section 2.11(b) shall be deposited by
the Administrative Agent in an account with Wachovia in the name and under the
control of the Administrative Agent, but subject to the provisions of this
Section 2.11(b). The terms applicable to such account, including the rate of
interest payable with respect to the credit balance of such account from time to
time, shall be Wachovia’s standard terms applicable to escrow accounts
maintained with it. Any interest credited to such account from time to time
shall be held by the Administrative Agent in escrow under, and applied by the
Administrative Agent from time to time in accordance with the provisions of,
this Section 2.11(b). The Administrative Agent shall, to the fullest extent
permitted by applicable law, apply all funds so held in escrow from time to time
to the extent necessary to make any Advances required to be made by such
Defaulting Bank and to pay any amount payable by such Defaulting Bank hereunder
and under the other Loan Documents to the Administrative Agent or any other
Bank, as and when such Advances or amounts are required to be made or paid and,
if the amount so held in escrow shall at any time be insufficient to make and
pay all such Advances and amounts required to be made or paid at such time, in
the following order of priority:

 

(i) first, to the Agents for any amounts then due and payable by such Defaulting
Bank to the Agents hereunder;

 

(ii) second, to the Issuing Banks for any amount then due and payable to them,
in their capacity as such, by such Defaulting Bank, ratably in accordance with
such amounts then due and payable to such Issuing Banks; and

 

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(iii) third, to any other Banks for any amount then due and payable by such
Defaulting Bank to such other Banks hereunder, ratably in accordance with such
respective amounts then due and payable to such other Banks.

 

In the event that any Bank that is a Defaulting Bank shall, at any time, cease
to be a Defaulting Bank, any funds held by the Administrative Agent in escrow at
such time with respect to such Bank shall be distributed by the Administrative
Agent to such Bank and applied by such Bank to the obligations owing to such
Bank at such time under this Agreement and the other Loan Documents ratably in
accordance with the respective amounts of such obligations outstanding at such
time.

 

(c) The rights and remedies against a Defaulting Bank under this Section 2.11
are in addition to other rights and remedies that any Agent or any Bank may have
against such Defaulting Bank with respect to any Defaulted Amount.

 

2.12 Replacement of Affected Bank. At any time any Bank is an Affected Bank, the
Account Parties may replace such Affected Bank as a party to this Agreement with
one or more other Banks and/or Eligible Assignees, and upon notice from the
Account Parties such Affected Bank shall assign pursuant to an Assignment and
Acceptance, and without recourse or warranty, its LC Commitment Amount, its
Letter of Credit Advances, its obligations to fund Letter of Credit payments,
its participation in, and its rights and obligations with respect to, Letters of
Credit, and all of its other rights and obligations hereunder to such other
Banks and/or Eligible Assignees for a purchase price equal to the sum of the
principal amount of the Letter of Credit Advances so assigned, all accrued and
unpaid interest thereon, such Affected Bank’s ratable share of all accrued and
unpaid fees payable pursuant to Section 2.05 and all other obligations owed to
such Affected Bank hereunder.

 

2.13 Certain Provisions Relating to the Issuing Banks and Letters of Credit.

 

(a) Letter of Credit Agreements. The representations, warranties and covenants
by the Account Parties under, and the rights and remedies of each Issuing Bank
under, any Letter of Credit Agreement relating to any Letter of Credit are in
addition to, and not in limitation or derogation of, representations, warranties
and covenants by the Account Parties under, and rights and remedies of each
Issuing Bank and the Banks under, this Agreement and applicable law. Each
Account Party acknowledges and agrees that all rights of each Issuing Bank under
any Letter of Credit Agreement shall inure to the benefit of each Bank to the
extent of its Letter of Credit Participating Interest Commitment and Letter of
Credit Advances as fully as if such Bank was a party to such Letter of Credit
Agreement. In the event of any inconsistency between the terms of this Agreement
and any Letter of Credit Agreement, this Agreement shall prevail.

 

(b) Certain Provisions. The Issuing Banks shall have no duties or
responsibilities to any Agent or any Bank except those expressly set forth in
this Agreement, and no implied duties or responsibilities on the part of the
Issuing Banks shall be read into this Agreement or shall otherwise exist. The
duties and responsibilities of the Issuing Banks to the Banks and the Agents
under this Agreement and the other Loan Documents shall be mechanical and
administrative in nature, and the Issuing Banks shall not have a fiduciary
relationship in respect of any Agent, any Bank or any other Person. No Issuing
Bank shall be liable for any action taken or omitted to be

 

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taken by it under or in connection with this Agreement or any Loan Document or
Letter of Credit, except to the extent resulting from its gross negligence or
willful misconduct, as finally determined by a court of competent jurisdiction.
The Issuing Banks shall not be under any obligation to ascertain, inquire or
give any notice to any Agent or any Bank relating to (i) the performance or
observance of any of the terms or conditions of this Agreement or any other Loan
Document on the part of any Account Party, (ii) the business, operations,
condition (financial or otherwise) or prospects of the Account Parties or any
other Person, or (iii) the existence of any Default. The Issuing Banks shall not
be under any obligation, either initially or on a continuing basis, to provide
any Agent or any Bank with any notices, reports or information of any nature,
whether in its possession presently or hereafter, except for such notices,
reports and other information expressly required by this Agreement to be so
furnished. The Issuing Banks shall not be responsible for the execution,
delivery, effectiveness, enforceability, genuineness, validity or adequacy of
this Agreement or any Loan Document.

 

(c) Administration. Each Issuing Bank may rely upon any notice or other
communication of any nature (written, electronic or oral, including but not
limited to telephone conversations and transmissions through each Issuing Bank’s
remote access system, whether or not such notice or other communication is made
in a manner permitted or required by this Agreement or any other Loan Document)
purportedly made by or on behalf of the proper party or parties, and each
Issuing Bank shall not have any duty to verify the identity or authority of any
Person giving such notice or other communication. Each Issuing Bank may consult
with legal counsel (including, without limitation, its in-house counsel or
in-house or other counsel for the Account Parties), independent public
accountants and any other experts selected by it from time to time, and each
Issuing Bank shall not be liable for any action taken or omitted to be taken in
good faith in accordance with the advice of such counsel, accountants or
experts. Whenever an Issuing Bank shall deem it necessary or desirable that a
matter be proved or established with respect to any Account Party, any Agent or
any Bank, such matter may be established by a certificate of such Account Party,
such Agent or such Bank, as the case may be, and such Issuing Bank may
conclusively rely upon such certificate. An Issuing Bank shall not be deemed to
have any knowledge or notice of the occurrence of any Default unless such
Issuing Bank has received notice from a Bank, an Agent or an Account Party
referring to this Agreement, describing such Default, and stating that such
notice is a “notice of default”.

 

(d) Indemnification of Issuing Banks by Banks. Each Bank hereby agrees to
reimburse and indemnify each Issuing Bank and each of its directors, officers,
employees and agents (to the extent not reimbursed by the Account Parties and
without limitation of the obligations of the Account Parties to do so), in
accordance with its Pro Rata Share, from and against any and all amounts,
losses, liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature (including,
without limitation, the reasonable fees and disbursements of counsel (other than
in-house counsel) for each Issuing Bank or such other Person in connection with
any investigative, administrative or judicial proceeding commenced or
threatened, whether or not each Issuing Bank or such other Person shall be
designated a party thereto) that may at any time be imposed on, incurred by or
asserted against each Issuing Bank, in its capacity as such, or such other
Person, as a result of, or arising out of, or in any way related to or by reason
of, this Agreement, any other Loan Document or any Letter of Credit, any
transaction from time to time contemplated hereby or thereby, or any transaction
financed in whole or in part or directly or indirectly with the proceeds

 

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of any Letter of Credit, provided, that no Bank shall be liable for any portion
of such amounts, losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements to the extent
resulting from the gross negligence or willful misconduct of an Issuing Bank or
such other Person, as finally determined by a court of competent jurisdiction.

 

(e) Issuing Banks in their Individual Capacity. With respect to its commitments
and the obligations owing to it, each Issuing Bank shall have the same rights
and powers under this Agreement and each other Loan Document as any other Bank
and may exercise the same as though it were not an Issuing Bank, and the term
“Banks” and like terms shall include each Issuing Bank in its individual
capacity as such. Each Issuing Bank and its affiliates may, without liability to
account to any Person, make loans to, accept deposits from, acquire debt or
equity interests in, act as trustee under indentures of, act as agent under
other credit facilities for, and engage in any other business with, any Account
Party and any stockholder, subsidiary or affiliate of any Account Party, as
though such Issuing Bank were not an Issuing Bank hereunder.

 

2.14 Downgrade Event with Respect to a Bank.

 

(a) If a Downgrade Event shall occur with respect to (i) any Downgraded Bank or
(ii) any other Bank and, as a result thereof, such other Bank becomes a
Downgraded Bank, then the Administrative Agent may, by notice to such Downgraded
Bank and the Parent within 45 days after such Downgrade Event (any such notice,
a “Downgrade Notice”), request that the Account Parties use reasonable efforts
to replace such Bank as a party to this Agreement pursuant to Section 2.12. If
such Bank is not so replaced within 45 days after receipt by the Account Parties
of such Downgrade Notice, then (x) if no Default exists and such Downgraded Bank
has not exercised its right to remain a Bank hereunder pursuant to clause (y)
below, the following shall occur concurrently:

 

(i) the Committed Facility shall be reduced by the amount of the LC Commitment
Amount of such Downgraded Bank,

 

(ii) the Account Parties shall prepay all amounts owed to such Downgraded Bank
hereunder or in connection herewith,

 

(iii) if, upon the reduction of the Committed Facility under clause (i) above
and the payment under clause (ii) above, the sum of the principal amount of all
Advances plus the Available Amount of all Letters of Credit (valuing the
Available Amount of, and Letter of Credit Advances of the Issuing Banks in
respect of, any Non-Dollar Letter of Credit at the Dollar Equivalent thereof as
of the time of such calculation) would exceed the amount of the Committed
Facility, then the Account Parties will immediately eliminate such excess by
paying Advances and/or causing the Available Amount of one or more Letters of
Credit to be reduced, and

 

(iv) upon completion of the events described in clauses (i), (ii) and (iii)
above, such Downgraded Bank shall cease to be a party to this Agreement;

 

or (y) if a Default exists or, not later than 30 days after receipt of such
Downgrade Notice, such Downgraded Bank notifies the Account Parties, the Issuing
Banks and the Administrative Agent

 

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that such Downgraded Bank elects to provide (in a manner reasonably satisfactory
to Administrative Agent) cash collateral to the Administrative Agent for (or if
such Downgraded Bank is unable, without regulatory approval, to provide cash
collateral, a letter of credit reasonably satisfactory to Administrative Agent
covering) its contingent obligations to reimburse each Issuing Bank for any
payment under any Letter of Credit as provided in Section 2.02(f) (its “LC
Participation Obligations”), such Downgraded Bank shall be obligated to (and
each Bank agrees that in such circumstances it will) deliver to the
Administrative Agent (I) immediately, cash collateral (or, as aforesaid, a
letter of credit) in an amount equal to its LC Participation Obligations and
(II) from time to time thereafter (so long as it is a Downgraded Bank), cash
collateral (or, as aforesaid, a letter of credit) sufficient to cover any
increase in its LC Participation Obligations as a result of any proposed
issuance of or increase in a Letter of Credit. Any funds provided by a
Downgraded Bank for such purpose shall be maintained in segregated deposit
accounts in the name of the Issuing Banks at the Administrative Agent’s
principal offices in the United States (each a “Downgrade Account”). The funds
so deposited in any Downgrade Account (or any drawing under such a letter of
credit) shall be used only in accordance with the following provisions of this
Section 2.14.

 

(b) If any Downgraded Bank shall be required to fund its participation in a
payment under a Letter of Credit pursuant to Section 2.02(f), then the
Administrative Agent shall apply the funds deposited in the applicable Downgrade
Account by such Downgraded Bank (or any drawing under such a letter of credit)
to fund such participation. The deposit of funds in a Downgrade Account by any
Downgraded Bank (or any drawing under such a letter of credit) shall not
constitute a Letter of Credit Advance (and the Downgraded Bank shall not be
entitled to interest on such funds except as provided in Section 2.14(c) below)
unless and until (and then only to the extent that) such funds (or any drawing
under such a letter of credit) are used by the Administrative Agent to fund the
participation of such Downgraded Bank pursuant to the first sentence of this
Section 2.14(b).

 

(c) Funds in a Downgrade Account shall be invested in such investments as may be
agreed between the Administrative Agent and the applicable Downgraded Bank, and
the income from such investments shall be distributed to such Downgraded Bank
from time to time (but not less often than monthly) as agreed between the
Administrative Agent and such Downgraded Bank. The Administrative Agent will (i)
from time to time, upon request by a Downgraded Bank, release to such Downgraded
Bank any amount on deposit in the applicable Downgrade Account in excess of the
LC Participation Obligations of such Downgraded Bank (or, if applicable, not
draw under any such letter of credit in excess of the L/C Participation
Obligations of such Downgraded Bank) and (ii) upon the earliest to occur of (A)
the effective date of any replacement of such Downgraded Bank as a party hereto
pursuant to an Assignment and Acceptance, (B) the termination of such Downgraded
Bank’s LC Commitment Amount pursuant to Section 2.14(a) or (C) the first
Business Day after receipt by the Administrative Agent of evidence (reasonably
satisfactory to the Administrative Agent) that such Bank is no longer a
Downgraded Bank, release to such Bank all amounts on deposit in the applicable
Downgrade Account (or, if applicable, return such letter of credit to such Bank
for cancellation).

 

(d) At any time any Downgraded Bank is required to maintain cash collateral with
the Administrative Agent pursuant to this Section 2.14, the Issuing Banks shall
have no obligation to issue or increase any Letter of Credit unless such
Downgraded Bank has provided sufficient

 

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funds as cash collateral to the Administrative Agent to cover all LC
Participation Obligations of such Downgraded Bank (including in respect of the
Letter of Credit to be issued or increased).

 

2.15 Non-Dollar Letters of Credit.

 

(a) The Account Parties, the Administrative Agent, the Issuing Banks and the
Banks (i) agree that an Issuing Bank may (in its sole discretion), with the
prior approval of the Administrative Agent, issue Letters of Credit (“Non-Dollar
Letters of Credit”) in currencies other than U.S. dollars and (ii) further agree
as set forth in the following subsections of this Section 2.15 with respect to
such Non-Dollar Letters of Credit.

 

(b) The Account Parties agree that their reimbursement obligations under Section
2.03(a) and any resulting Letter of Credit Advance, in each case in respect of a
drawing under any Non-Dollar Letter of Credit, (i) shall be payable in Dollars
at the Dollar Equivalent of such obligation in the currency in which such
Non-Dollar Letter of Credit was issued (determined on the date of payment by the
Account Parties or, in the event of payment by the Banks pursuant to Section
2.02(f), on the date of such payment by the Banks), and (ii) shall bear interest
at a rate per annum equal to the Base Rate plus 2%, for each day from and
including the date on which the Applicable Account Party is to reimburse an
Issuing Bank pursuant to Section 2.03(a) to but excluding the date such
obligation is paid in full.

 

(c) Each Bank agrees that its obligation to pay an Issuing Bank such Bank’s Pro
Rata Share of the unreimbursed portion of any payment by such Issuing Bank under
Section 2.02(f) in respect of a drawing under any Non-Dollar Letter of Credit
shall be payable in Dollars at the Dollar Equivalent of such obligation in the
currency in which such Non-Dollar Letter of Credit was issued (calculated on the
date of payment), and any such amount which is not paid when due shall bear
interest at a rate per annum equal to the Overnight Rate plus, beginning on the
third Business Day after such amount was due, 2%.

 

(d) For purposes of determining whether there is availability for the Account
Parties to request any Advance or to request the issuance or extension of, or
any increase in, any Letter of Credit, the Dollar Equivalent amount of the
Available Amount of each Non-Dollar Letter of Credit shall be calculated as of
the date such Advance is to be made or such Letter of Credit is to be issued,
extended or increased.

 

(e) For purposes of determining the letter of credit fee under Section 2.05(c),
the Dollar Equivalent amount of the Available Amount of any Non-Dollar Letter of
Credit shall be determined on each of (i) the date of an issuance, extension or
change in the Available Amount of such Non-Dollar Letter of Credit, (ii) the
date of any payment by an Issuing Bank in respect of a drawing under such
Non-Dollar Letter of Credit, (iii) the last Business Day of each March, June,
September and December and (iv) each day on which the LC Commitment Amounts are
to be reduced pursuant to Section 2.04 (it being understood that no requested
reduction shall be permitted to the extent that, after making a calculation
pursuant to this Section 2.15(e), such reduction would be greater than the
unused portion of the LC Commitment Amounts).

 

(f) If, on the last Business Day of each March, June, September and December,
the sum of the principal amount of all Advances plus the Available Amount of all
Letters of Credit

 

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(valuing the Available Amount of, and Letter of Credit Advances in respect of,
any Non-Dollar Letter of Credit at the Dollar Equivalent thereof as of such day)
would exceed the amount of the Committed Facility, then the Account Parties will
immediately eliminate such excess by paying Advances and/or causing the
Available Amount of one or more Letters of Credit to be reduced.

 

(g) If, for the purposes of obtaining judgment in any court, it is necessary to
convert a sum due in respect of any Non-Dollar Letter of Credit in one currency
into another currency, the rate of exchange used shall be that at which, in
accordance with its normal banking procedures, Wachovia in its capacity as an
Issuing Bank could purchase the first currency with such other currency on the
Business Day preceding that on which final judgment is given. The obligation of
any Account Party in respect of any such sum due from it to any Issuing Bank or
any Bank hereunder shall, notwithstanding any judgment in a currency (the
“Judgment Currency”) other than that in which such sum is denominated in
accordance with the applicable provisions of this Agreement and the applicable
Non-Dollar Letter of Credit (the “Agreement Currency”), be discharged only to
the extent that on the Business Day following receipt by such Issuing Bank or
such Bank of any sum adjudged to be so due in the Judgment Currency, such
Issuing Bank or such Bank may in accordance with normal banking procedures
purchase the Agreement Currency with the Judgment Currency. If the amount of the
Agreement Currency so purchased is less than the sum originally due to such
Issuing Bank or such Bank in the Agreement Currency, the Applicable Account
Party agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify such Issuing Bank or such Bank, as applicable, against such loss. If
the amount of the Agreement Currency so purchased is greater than the sum
originally due to such Issuing Bank or such Bank in such currency, each Issuing
Bank and each Bank agrees to return the amount of any excess to the Applicable
Account Party (or to any other Person who may be entitled thereto under
applicable law).

 

(h) For purposes of this Section 2.15, “Dollar Equivalent” means, in relation to
an amount denominated in a currency other than U.S. dollars, the amount of U.S.
dollars which could be purchased with such amount by Wachovia in its capacity as
an Issuing Bank in accordance with its customary procedures (and giving effect
to any transaction costs) at the quoted foreign exchange spot rate of Wachovia
in its capacity as an Issuing Bank at the time of determination; and “Overnight
Rate” means, for any day, the rate of interest per annum at which overnight
deposits in the applicable currency, in an amount approximately equal to the
amount with respect to which such rate is being determined, would be offered for
such day by Wachovia in its capacity as an Issuing Bank to major banks in the
London or other applicable offshore interbank market. The Overnight Rate for any
day which is not a Business Day (or on which dealings are not carried on in the
applicable offshore interbank market) shall be the Overnight Rate for the
immediately preceding Business Day.

 

2.16 Increase of LC Commitment Amounts.

 

(a) From time to time subsequent to the Effective Date, the Account Parties
jointly may, upon at least five days’ notice to the Administrative Agent (which
shall promptly provide a copy of such notice to the Banks), propose to increase
the aggregate amount of the LC Commitment Amounts by an amount which (i) is not
less than $25,000,000, or an integral multiple of $1,000,000 in excess thereof,
with respect to any such request nor (ii) when aggregated with all prior
increases in the LC Commitment Amounts pursuant to this

 

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Section 2.16, is not in excess of $250,000,000. The Borrowers may increase the
aggregate LC Commitment Amounts by (i) agreeing with any Bank to increase its LC
Commitment Amount hereunder, (ii) having another bank or other banks reasonably
satisfactory to the Administrative Agent (each, an “Additional Bank”) become
party to this Agreement or (iii) a combination of the procedures described in
clauses (i) and (ii) of this sentence.

 

(b) An increase in the aggregate amount of the LC Commitment Amounts pursuant to
this Section 2.16 shall become effective upon the receipt by the Administrative
Agent of an agreement in form and substance satisfactory to the Administrative
Agent signed by the Account Parties, by each Additional Bank and by each other
Bank whose LC Commitment Amount is to be increased, setting forth the new LC
Commitment Amounts of such Banks and setting forth the agreement of each
Additional Bank to become a party to this Agreement and to be bound by all the
terms and provisions hereof, together with such evidence of appropriate
corporate authorization on the part of the Account Parties with respect thereto
and such opinions of counsel for the Account Parties with respect thereto as the
Administrative Agent may reasonably request. At the time of any increase in the
aggregate LC Commitment Amount pursuant to this Section 2.16, the Account
Parties shall represent (i) that, immediately before and after such increase is
made, no Default has occurred and is continuing and (ii) that the
representations and warranties of the Account Parties contained in the Loan
Documents are true in all material respects on and as of the date such increase
is made, except for such representations or warranties which by their terms are
made as of a specified date, which shall be true and correct as of such
specified date.

 

ARTICLE III

 

CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT

 

3.01 Conditions Precedent to Effective Date. The occurrence of the Effective
Date, and the obligation of the Issuing Banks to issue any Letter of Credit on
the Effective Date, is subject to the satisfaction of the following conditions
precedent:

 

(a) The Administrative Agent shall have received the following, each dated the
Effective Date (unless otherwise specified), in form and substance reasonably
satisfactory to the Administrative Agent (unless otherwise specified) and in
sufficient copies for each Bank:

 

(i) Certified copies of the resolutions of the Board of Directors of each Loan
Party approving the transactions contemplated by the Loan Documents and each
Loan Document to which it is or is to be a party, and of all documents
evidencing other necessary corporate action and governmental and other third
party approvals and consents, if any, with transactions contemplated by the Loan
Documents and each Loan Document to which it is or is to be a party.

 

(ii) A copy of a certificate of the Secretary of State or other appropriate
official of the jurisdiction of incorporation of each Loan Party, dated
reasonably near the Effective Date, certifying as to the good standing (or
existence) of such Loan Party.

 

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(iii) A certificate of each Loan Party, signed on behalf of such Loan Party by
its President or a Vice President (or equivalent officer if such Loan Party has
no Vice President) and its Secretary or any Assistant Secretary (the statements
made in which certificate shall be true on and as of the Effective Date),
certifying as to (1) a true and correct copy of the constitutional documents of
such Loan Party as in effect on the date on which the resolutions referred to in
Section 3.01(a)(i) were adopted and on the Effective Date, (2) the due
incorporation and good standing or valid existence of such Loan Party as a
corporation organized under the laws of the jurisdiction of its incorporation,
and the absence of any proceeding for the dissolution or liquidation of such
Loan Party, (3) the truth of the representations and warranties contained in the
Loan Documents as though made on and as of the Effective Date and (4) the
absence of any event occurring and continuing, or resulting from the Effective
Date, that constitutes a Default.

 

(iv) A certificate of the Secretary or an Assistant Secretary of each Loan Party
certifying the names and true signatures of the officers of such Loan Party
authorized to sign each Loan Document to which it is or is to be a party and the
other documents to be delivered hereunder and thereunder.

 

(v) Favorable opinions of (1) Maples and Calder, Cayman Islands counsel for the
Parent, in substantially the form of Exhibit B-1 hereto and as to such other
matters as any Bank through the Administrative Agent may reasonably request, (2)
Mayer, Brown, Rowe & Maw LLP, New York counsel for the Loan Parties, in
substantially the form of Exhibit B-2 hereto and as to such other matters as any
Bank through the Administrative Agent may reasonably request, and (3) Conyers
Dill & Pearman, Bermuda counsel for ACE Bermuda, Tempest Life and Tempest, in
substantially the form of Exhibit B-3 hereto and as to such other matters as any
Bank through the Administrative Agent may reasonably request.

 

(b) There shall exist no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of its Subsidiaries pending or threatened before
any court, governmental agency or arbitrator that (x) would be reasonably
expected to have a Material Adverse Effect or (y) would reasonably be expected
to materially adversely affect the legality, validity or enforceability of any
Loan Document or the other transactions contemplated by the Loan Documents.

 

(c) No development or change shall have occurred after December 31, 2003, and no
information shall have become known after such date, that has had or would
reasonably be expected to have a Material Adverse Effect.

 

(d) The Account Parties shall have paid all accrued fees of the Administrative
Agent and the Banks and all accrued expenses of the Administrative Agent
(including the accrued fees and expenses of counsel to the Administrative Agent
and local counsel on behalf of all of the Banks), in each case to the extent
then due and payable.

 

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(e) The Administrative Agent shall have received evidence satisfactory to it
that all obligations of any Account Party outstanding under the Existing
Reimbursement Agreement and Existing Secured Reimbursement Agreement (other than
fees and expenses of Wachovia’s counsel) and the Bilateral Agreements have been
repaid and satisfied in full.

 

3.02 Conditions Precedent to Each Issuance, Extension or Increase of a Letter of
Credit. The obligation of the Issuing Banks to issue, extend or increase a
Letter of Credit (including any issuance on the Effective Date) shall be subject
to the further conditions precedent that on the date of such issuance, extension
or increase (a) the following statements shall be true (and each request for
issuance, extension, or increase, and the acceptance by the Account Party that
requested such issuance, extension or increase shall constitute a representation
and warranty by such Account Party that both on the date of such notice and on
the date of such issuance, extension or increase such statements are true):

 

(i) the representations and warranties contained in each Loan Document are
correct in all material respects on and as of such date, before and after giving
effect to such issuance, extension or increase, as though made on and as of such
date, other than any such representations or warranties that, by their terms,
refer to a specific date other the date of such issuance, extension or increase,
in which case as of such specific date (provided, however, that the
representation and warranty contained in the last sentence of Section 4.01(g)
shall be excluded from this clause (i) at all times after (but shall be included
on and as of) the Effective Date); and

 

(ii) no Default has occurred and is continuing, or would result from such
issuance, extension or increase;

 

and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Bank or any Issuing Bank through the Administrative
Agent may reasonably request.

 

3.03 Determinations Under Section 3.01. For purposes of determining compliance
with the conditions specified in Section 3.01, each Bank shall be deemed to have
consented to, approved or accepted or to be satisfied with each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to the Banks unless an officer of the Administrative Agent
responsible for the transactions contemplated by the Loan Documents shall have
received notice from such Bank prior to the Effective Date specifying its
objection thereto, provided that such Bank has been given at least one Business
Day’s notice that the final form of such document or matter is available for its
review.

 

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ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

4.01 Representations and Warranties of the Account Parties. Each Account Party
represents and warrants as follows:

 

(a) Each Loan Party and each of its Material Subsidiaries (i) is duly organized
or formed, validly existing and, to the extent such concept applies, in good
standing under the laws of the jurisdiction of its incorporation or formation,
(ii) is duly qualified and in good standing as a foreign corporation or other
entity in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed would not be reasonably
likely to have a Material Adverse Effect and (iii) has all requisite power and
authority (including, without limitation, all governmental licenses, permits and
other approvals) to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted, except where the
failure to have any license, permit or other approval would not be reasonably
likely to have a Material Adverse Effect. All of the outstanding Equity
Interests in each Account Party (other than the Parent) have been validly
issued, are fully paid and non-assessable and (except for any Preferred
Securities issued after the date of this Agreement) are owned, directly or
indirectly, by the Parent free and clear of all Liens.

 

(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate list of all
Subsidiaries of each Loan Party as of the Effective Date.

 

(c) The execution, delivery and performance by each Loan Party of each Loan
Document to which it is or is to be a party and the consummation of the
transactions contemplated by the Loan Documents, are within such Loan Party’s
corporate powers, have been duly authorized by all necessary corporate action,
and do not (i) contravene such Loan Party’s constitutional documents, (ii)
violate any law, rule, regulation (including, without limitation, Regulation X
of the Board of Governors of the Federal Reserve System), order, writ, judgment,
injunction, decree, determination or award, (iii) conflict with or result in the
breach of, or constitute a default under, any contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument binding on or
affecting any Loan Party, any of its Subsidiaries or any of their properties or
(iv) except for the Liens created under the Loan Documents, result in or require
the creation or imposition of any Lien upon or with respect to any of the
properties of any Loan Party or any of its Subsidiaries. No Loan Party or any of
its Subsidiaries is in violation of any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which would be reasonably likely to have
a Material Adverse Effect.

 

(d) No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body or any other third party is
required for (i) the due execution, delivery, recordation, filing or performance
by any Loan Party of any Loan Document to which it is or is to be a party or the
other transactions contemplated by the Loan Documents, or (ii) the exercise by
the Administrative Agent or any Bank of its rights under the Loan Documents,
except for the authorizations, approvals, actions, notices and filings which
have been duly obtained, taken, given or made and are in full force and effect,
subject to bankruptcy, insolvency and similar laws of general application
relating to creditors’ rights and to general principles of equity.

 

(e) This Agreement has been, and each other Loan Document when delivered
hereunder will have been, duly executed and delivered by each Loan Party party
thereto. This

 

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Agreement is, and each other Loan Document when delivered hereunder will be, the
legal, valid and binding obligation of each Loan Party party thereto,
enforceable against such Loan Party in accordance with its terms.

 

(f) There is no action, suit, investigation, litigation or proceeding affecting
any Loan Party or any of its Subsidiaries, including any Environmental Action,
pending or, to such Loan Party’s knowledge, threatened before any court,
governmental agency or arbitrator that (i) would be reasonably likely to have a
Material Adverse Effect or (ii) would reasonably be expected to affect the
legality, validity or enforceability of any Loan Document or the transactions
contemplated by the Loan Documents.

 

(g) The Consolidated balance sheet of the Parent and its Subsidiaries as at
December 31, 2003, and the related Consolidated statements of income and of cash
flows of the Parent and its Subsidiaries for the fiscal year then ended,
accompanied by an unqualified opinion of PricewaterhouseCoopers LLP, independent
public accountants, and the Consolidated balance sheet of the Parent and its
Subsidiaries as at June 30, 2004, and the related Consolidated statements of
income and cash flows of the Parent and its Subsidiaries for the six months then
ended, duly certified by the Chief Financial Officer of the Parent, copies of
which have been furnished to each Bank, fairly present, subject, in the case of
said balance sheet as at June 30, 2004, and said statements of income and cash
flows for the six months then ended, to year-end audit adjustments, the
Consolidated financial condition of the Parent and its Subsidiaries as at such
dates and the Consolidated results of operations of the Parent and its
Subsidiaries for the periods ended on such dates, all in accordance with GAAP
applied on a consistent basis (subject, in the case of the June 30, 2004 balance
sheet and statements of income and cash flows, to the absence of footnotes).
Since December 31, 2003, there has been no Material Adverse Change.

 

(h) No written information, exhibit or report furnished by or on behalf of any
Loan Party to any Agent or any Bank in connection with the negotiation and
syndication of the Loan Documents or pursuant to the terms of the Loan Documents
contained any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements made therein not misleading as at the date
it was dated (or if not dated, so delivered).

 

(i) Margin Stock constitutes less than 25% of the value of those assets of any
Account Party which are subject to any limitation on sale, pledge or other
disposition hereunder.

 

(j) Neither any Loan Party nor any of its Subsidiaries is an “investment
company”, or an “affiliated person” of, or “promoter” or “principal underwriter”
for, an “investment company”, as such terms are defined in the Investment
Company Act of 1940, as amended. Neither the making of any Advances, nor the
issuance of any Letters of Credit, nor the application of the proceeds or
repayment thereof by any Account Party, nor the consummation of the other
transactions contemplated by the Loan Documents, will violate any provision of
such Act or any rule, regulation or order of the Securities and Exchange
Commission thereunder.

 

(k) Each Loan Party is, individually and together with its Subsidiaries,
Solvent.

 

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(l) Except to the extent that any and all events and conditions under clauses
(i) through (v) below of this Section 4.01(l) in the aggregate are not
reasonably expected to have a Material Adverse Effect:

 

(i) Neither any Loan Party nor any ERISA Affiliate has incurred or is reasonably
expected to incur any Withdrawal Liability to any Multiemployer Plan.

 

(ii) With respect to each scheme or arrangement mandated by a government other
than the United States (a “Foreign Government Scheme or Arrangement”) and with
respect to each employee benefit plan that is not subject to United States law
maintained or contributed to by any Loan Party or with respect to which any
Subsidiary of any Loan Party may have liability under applicable local law (a
“Foreign Plan”):

 

(A) Any employer and employee contributions required by law or by the terms of
any Foreign Government Scheme or Arrangement or any Foreign Plan have been made,
or, if applicable, accrued, in accordance with normal accounting practices.

 

(B) The fair market value of the assets of each funded Foreign Plan, the
liability of each insurer for any Foreign Plan funded through insurance or the
book reserve established for any Foreign Plan, together with any accrued
contributions, is sufficient to procure or provide for the accrued benefit
obligations, as of the date hereof, with respect to all current and former
participants in such Foreign Plan according to the actuarial assumptions and
valuations most recently used to account for such obligations in accordance with
applicable generally accepted accounting principles.

 

(C) Each Foreign Plan required to be registered has been registered and has been
maintained in good standing with applicable regulatory authorities.

 

(iii) During the twelve-consecutive-month period to the date of the execution
and delivery of this Agreement and prior to the request for any Letter of Credit
to be issued hereunder, no steps have been taken to terminate any Pension Plan,
no contribution failure has occurred with respect to any Pension Plan sufficient
to give rise to a lien under section 302(f) of ERISA and no minimum funding
waiver has been applied for or is in effect with respect to any Pension Plan. No
condition exists or event or transaction has occurred or is reasonably expected
to occur with respect to any Pension Plan which could result in any Loan Party
or any ERISA Affiliate incurring any material liability, fine or penalty.

 

(iv) Each Pension Plan is in compliance in all respects with the applicable
provisions of ERISA, the Internal Revenue Code and other federal or state laws.

 

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(v) No assets of any Loan Party are or are deemed under applicable law to be
“plan assets” within the meaning of Department of Labor Regulation §2510.3-101.

 

(m) In the ordinary course of its business, each Account Party reviews the
effect of Environmental Laws on the operations and properties of such Account
Party and its Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties presently
or previously owned, any capital or operating expenditures required to achieve
or maintain compliance with environmental protection standards imposed by law or
as a condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, and any actual or potential liabilities to third parties and
any related costs and expenses). On the basis of this review, each Account Party
has reasonably concluded that such associated liabilities and costs, including
the costs of compliance with Environmental Laws, are unlikely to have a Material
Adverse Effect. The operations and properties of each Loan Party and each of its
Subsidiaries comply in all material respects with all applicable Environmental
Laws and Environmental Permits, except for non-compliances which would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; Hazardous Materials have not been released, discharged or
disposed of on any property currently or formerly owned or operated by any Loan
Party or any of its Subsidiaries that would reasonably be expected to have a
Material Adverse Effect; and there are no Environmental Actions pending or
threatened against any Loan Party or its Subsidiaries, and no circumstances
exist that could be reasonably likely to form the basis of any such
Environmental Action, which (in either case), individually or in the aggregate
with all other such pending or threatened actions and circumstances, would
reasonably be expected to have a Material Adverse Effect.

 

(n) Each Loan Party and each of its Subsidiaries has filed, has caused to be
filed or has been included in all material federal tax returns and all other
material tax returns required to be filed and has paid all taxes shown thereon
to be due, together with applicable interest and penalties, except to the extent
contested in good faith and by appropriate proceedings (in which case adequate
reserves have been established therefor in accordance with GAAP).

 

(o) Set forth on Schedule II hereto is a list of all letters of credit that were
issued (or deemed issued) under the Existing Reimbursement Agreement and that
are outstanding as of the Effective Date.

 

ARTICLE V

 

COVENANTS OF THE ACCOUNT PARTIES

 

5.01 Affirmative Covenants. So long as any Advance or any other obligation of
any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit
shall be outstanding or any Bank shall have any Letter of Credit Participating
Interest Commitment or commitment to issue a Letter of Credit hereunder, each
Account Party will:

 

(a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to
comply with all applicable laws, rules, regulations and orders, such compliance
to include, without limitation, compliance with Environmental Laws,
Environmental Permits, ERISA and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

 

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(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its Subsidiaries
to pay and discharge, before the same shall become delinquent, all material
taxes, assessments and governmental charges or levies imposed upon it or upon
its property; provided, however, that neither any Account Party nor any of its
Subsidiaries shall be required to pay or discharge any such tax, assessment,
charge or levy that is being contested in good faith and by proper proceedings
and as to which appropriate reserves are being maintained.

 

(c) Maintenance of Insurance. Maintain, and cause each of its Material
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Parent or such Material Subsidiary
operates (it being understood that the foregoing shall not apply to maintenance
of reinsurance or similar matters which shall be solely within the reasonable
business judgment of the Parent and its Subsidiaries).

 

(d) Preservation of Corporate Existence, Etc. Preserve and maintain, and cause
each of its Material Subsidiaries to preserve and maintain, its existence, legal
structure, legal name, rights (charter and statutory), permits, licenses,
approvals, privileges and franchises; provided, however, that (i) the Parent and
its Subsidiaries may consummate any merger or amalgamation or consolidation
permitted under Section 5.02(c), (ii) no Subsidiary (other than an Account
Party) shall be required to preserve and maintain its existence, legal
structure, legal names or other rights (charter and statutory) if the Board of
Directors of a direct or indirect parent of such Subsidiary has determined that
such action is not disadvantageous in any material respect to the Parent, such
parent or the Banks, and (iii) neither the Parent nor any of its Subsidiaries
shall be required to preserve any right, permit, license, approval, privilege or
franchise if the Board of Directors of the Parent or such Subsidiary shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Parent or such Subsidiary, as the case may be, and that the
loss thereof is not disadvantageous in any material respect to the Parent, such
Subsidiary or the Banks.

 

(e) Visitation Rights. At any reasonable time and from time to time upon not
less than three Business Days prior notice, permit the Administrative Agent
(upon request made by any Agent or any Bank), or any agents or representatives
thereof, at the expense (so long as no Default has occurred and is continuing)
of such Agent or such Bank, as the case may be, to examine and make copies of
and abstracts from the records and books of account of, and visit the properties
of, the Parent and any of its Subsidiaries, and to discuss the affairs, finances
and accounts of the Parent and any of its Subsidiaries with any of their
officers or directors and with, so long as a representative of the Parent is
present, their independent certified public accountants; provided that neither
the Parent nor any of its Subsidiaries shall be required to

 

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disclose any information that it reasonably determines is entitled to the
protection of attorney-client privilege.

 

(f) Keeping of Books. Keep, and cause each of its Subsidiaries to keep, proper
books of record and account, in which full and correct entries shall be made of
all financial transactions and the assets and business of the Parent and each
such Subsidiary sufficient to permit the preparation of financial statements in
accordance with GAAP.

 

(g) Maintenance of Properties, Etc. Maintain and preserve, and cause each of its
Subsidiaries to maintain and preserve, all of its properties that are used or
useful in the conduct of its business in good working order and condition,
ordinary wear and tear excepted, except where the failure to do so would not
reasonably be expected to result in a Material Adverse Effect.

 

(h) Transactions with Affiliates. Conduct, and cause each of its Subsidiaries to
conduct, all transactions otherwise permitted under the Loan Documents with any
of their Affiliates (other than any such transactions between Loan Parties or
wholly owned Subsidiaries of Loan Parties) on terms that are fair and reasonable
and no less favorable than it would obtain in a comparable arm’s-length
transaction with a Person not an Affiliate.

 

(i) Pari Passu Ranking. Ensure that at all times the claims of the Banks, the
Issuing Banks and the Agents against it under the Loan Documents will rank at
least pari passu with the claims of all its other unsecured and unsubordinated
creditors, except for claims which are preferred by any bankruptcy, insolvency,
liquidation or other similar laws of general application or are mandatorily
preferred by law applying to insurance companies generally.

 

5.02 Negative Covenants. So long as any Advance or any other obligation of any
Loan Party under any Loan Document shall remain unpaid, any Letter of Credit
shall be outstanding or any Bank shall have any Letter of Credit Participating
Interest Commitment or commitment to issue a Letter of Credit hereunder, each of
the Account Parties will not, at any time:

 

(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Lien on or with
respect to any of its properties of any character (including, without
limitation, accounts) whether now owned or hereafter acquired, or assign or
permit any of its Subsidiaries to assign, any accounts or other right to receive
income, except:

 

(i) Permitted Liens;

 

(ii) Liens described on Schedule 5.02(a) hereto;

 

(iii) purchase money Liens upon any property acquired or held by the Parent or
any of its Subsidiaries in the ordinary course of business to secure the
purchase price of such property or to secure Debt incurred solely for the
purpose of financing the acquisition, construction or improvement of any
property to be subject to such Liens, or Liens existing on any property at the
time of acquisition or within 180 days following such acquisition (other than
any such Liens created in contemplation of such acquisition that do not secure
the purchase price), or

 

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extensions, renewals or replacements of any of the foregoing for the same or a
lesser amount; provided, however, that no such Lien shall extend to or cover any
property other than the property being acquired, constructed or improved, and no
such extension, renewal or replacement shall extend to or cover any property not
theretofore subject to the Lien being extended, renewed or replaced;

 

(iv) Liens arising in connection with Capitalized Leases; provided that no such
Lien shall extend to or cover any assets other than the assets subject to such
Capitalized Leases;

 

(v) (A) any Lien existing on any asset of any Person at the time such Person
becomes a Subsidiary and not created in contemplation of such event, (B) any
Lien on any asset of any Person existing at the time such Person is merged or
consolidated with or into the Parent or any of it Subsidiaries in accordance
with Section 5.02(c) and not created in contemplation of such event and (C) any
Lien existing on any asset prior to the acquisition thereof by the Parent or any
of its Subsidiaries and not created in contemplation of such acquisition;

 

(vi) Liens securing obligations under credit default swap transactions
determined by reference to, or Contingent Obligations in respect of, Debt issued
by the Parent or one of its Subsidiaries; such Debt not to exceed an aggregate
principal amount of $550,000,000;

 

(vii) Liens arising in the ordinary course of its business which (A) do not
secure Debt and (B) do not in the aggregate materially detract from the value of
its assets or materially impair the use thereof in the operation of its
business;

 

(viii) Liens on cash and Approved Investments securing Hedge Agreements arising
in the ordinary course of business;

 

(ix) other Liens securing Debt or other obligations outstanding in an aggregate
principal or face amount not to exceed at any time 5% of Consolidated Net Worth;

 

(x) Liens consisting of deposits made by the Parent or any insurance Subsidiary
with any insurance regulatory authority or other statutory Liens or Liens or
claims imposed or required by applicable insurance law or regulation against the
assets of the Parent or any insurance Subsidiary, in each case in favor of
policyholders of the Parent or such insurance Subsidiary or an insurance
regulatory authority and in the ordinary course of the Parent’s or such
insurance Subsidiary’s business;

 

(xi) Liens on Investments and cash balances of the Parent or any insurance
Subsidiary (other than capital stock of any Subsidiary) securing obligations of
the Parent or any insurance Subsidiary in respect of (i) letters of credit
obtained in the ordinary course of business and/or (ii) trust arrangements

 

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formed in the ordinary course of business for the benefit of cedents to secure
reinsurance recoverables owed to them by the Parent or any insurance Subsidiary;

 

(xii) the replacement, extension or renewal of any Lien permitted by clause (ii)
or (v) above upon or in the same property theretofore subject thereto or the
replacement, extension or renewal (without increase in the amount (other than in
respect of fees, expenses and premiums, if any) or change in any direct or
contingent obligor) of the Debt secured thereby;

 

(xiii) Liens securing obligations owed by any Loan Party to any other Loan Party
or owed by any Subsidiary of the Parent (other than a Loan Party) to the Parent
or any other Subsidiary;

 

(xiv) Liens incurred in the ordinary course of business in favor of financial
intermediaries and clearing agents pending clearance of payments for investment
or in the nature of set-off, banker’s lien or similar rights as to deposit
accounts or other funds;

 

(xv) judgment or judicial attachment Liens, provided that the enforcement of
such Liens is effectively stayed;

 

(xvi) Liens arising in connection with Securitization Transactions; provided
that the aggregate principal amount of the investment or claim held at any time
by all purchasers, assignees or other transferees of (or of interests in)
receivables and other rights to payment in all Securitization Transactions
(together with the aggregate principal amount of any other obligations secured
by such Liens) shall not exceed U.S. $750,000,000;

 

(xvii) Liens on securities arising out of repurchase agreements with a term of
not more than three months entered into with “Lenders” (as such term is defined
in the JPMorgan Credit Agreement) or their Affiliates or with securities dealers
of recognized standing; provided that the aggregate amount of all assets of the
Parent and its Subsidiaries subject to such agreements shall not at any time
exceed $1,000,000,000. For purposes of this clause (xvii), “JPMorgan Credit
Agreement” shall mean the Three-Year Credit Agreement dated as of April 2, 2004
among the Parent, ACE Bermuda, Tempest, and ACE INA Holdings Inc., as borrowers,
various financial institutions, and JPMorgan Chase Bank, as administrative
agent, as amended, modified, supplemented or restated from time to time; and

 

(xviii) Liens securing up to an aggregate amount of $200,000,000 of obligations
of the Parent or any wholly owned Subsidiary, arising out of catastrophe bond
financing.

 

(b) Change in Nature of Business. Make any material change in the nature of the
business of the Parent and its Material Subsidiaries, taken as a whole, as
carried on at the date hereof.

 

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(c) Mergers, Etc. Merge into or amalgamate or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries to do so,
except that:

 

(i) any Subsidiary of the Parent may merge into or amalgamate or consolidate
with any other Subsidiary of the Parent, provided that, in the case of any such
merger, amalgamation or consolidation, the Person formed by such merger,
amalgamation or consolidation shall be a wholly owned Subsidiary of the Parent,
provided further that, in the case of any such merger, amalgamation or
consolidation to which an Account Party is a party, the Person formed by such
merger, amalgamation or consolidation shall be such Account Party;

 

(ii) any Subsidiary of any Account Party may merge into or amalgamate or
consolidate with any other Person or permit any other Person to merge into,
amalgamate or consolidate with it; provided that the Person surviving such
merger, amalgamation or consolidation shall be a wholly owned Subsidiary of the
Account Party;

 

(iii) in connection with any sale or other disposition permitted under Section
5.02(d), any Subsidiary of the Parent may merge into or amalgamate or
consolidate with any other Person or permit any other Person to merge into or
amalgamate or consolidate with it; and

 

(iv) the Parent or any Account Party may merge into or amalgamate or consolidate
with any other Person; provided that, in the case of any such merger,
amalgamation or consolidation, the Person formed by such merger, amalgamation or
consolidation shall be the Parent or such Account Party, as the case may be;

 

provided, however, that in each case, immediately after giving effect thereto,
no event shall occur and be continuing that constitutes a Default.

 

(d) Sales, Etc., of Assets. Sell, lease, transfer or otherwise dispose of, or
permit any other Account Party to sell, lease, transfer or otherwise dispose of,
all or substantially all of its assets (excluding sales of investment securities
in the ordinary course of business).

 

(e) Restricted Payments. Declare or pay any dividends, purchase, redeem, retire,
defease or otherwise acquire for value any of its Equity Interests now or
hereafter outstanding, return any capital to its stockholders, partners or
members (or the equivalent Persons thereof) as such, make any distribution of
assets, Equity Interests, obligations or securities to its stockholders,
partners or members (or the equivalent Persons thereof) as such or issue or sell
any Equity Interests or accept any capital contributions, or permit any of its
Subsidiaries to do any of the foregoing, or permit any of its Subsidiaries to
purchase, redeem, retire, defease or otherwise acquire for value any Equity
Interests in the Parent or to issue or sell any Equity Interests therein, if in
any case referred to above, a Default shall have occurred and be continuing at
the time of such action or would result therefrom.

 

(f) Accounting Changes. Make or permit, or permit any of its Subsidiaries to
make or permit, any change in accounting policies or reporting practices, except
as permitted by GAAP.

 

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5.03 Reporting Requirements. So long as any Advance or any other obligation of
any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit
shall be outstanding or any Bank shall have any Letter of Credit Participating
Interest Commitment or commitment to issue a Letter of Credit hereunder, the
Parent will furnish to the Agents and the Banks:

 

(a) Default Notice. As soon as possible and in any event within five days after
the occurrence of each Default or any event, development or occurrence
reasonably likely to have a Material Adverse Effect continuing on the date of
such statement, a statement of the chief financial officer of the Parent setting
forth details of such Default, event, development or occurrence and the action
that the Parent or the applicable Subsidiary has taken and proposes to take with
respect thereto.

 

(b) Annual Financials.

 

(i) As soon as available and in any event within 90 days after the end of each
Fiscal Year (or, if earlier, within five Business Days after such date as the
Parent is required to file its annual report on Form 10-K for such Fiscal Year
with the Securities and Exchange Commission), a copy of the annual Consolidated
audit report for such year for the Parent and its Subsidiaries, including
therein a Consolidated balance sheet of the Parent and its Subsidiaries as of
the end of such Fiscal Year and Consolidated statements of income and cash flows
of the Parent and its Subsidiaries for such Fiscal Year, all reported on in a
manner reasonably acceptable to the Securities and Exchange Commission in each
case and accompanied by an opinion of PricewaterhouseCoopers LLP or other
independent public accountants of recognized standing reasonably acceptable to
the Required Banks, together with (i) a certificate of the Chief Financial
Officer, Chief Accounting Officer or Chief Compliance Officer of the Parent
stating that no Default has occurred and is continuing, or if a Default has
occurred and is continuing, a statement as to the nature thereof and the action
that the Parent has taken a proposes to take with respect thereto, and (ii) a
schedule in form reasonably satisfactory to the Administrative Agent of the
computations used by the Parent in determining, as of the end of such Fiscal
Year, compliance with the covenants contained in Section 5.04.

 

(ii) As soon as available and in any event within 120 days after the end of each
Fiscal Year, a copy of the annual Consolidated audit report for such year for
each Subsidiary Guarantor and its Subsidiaries, including therein a Consolidated
balance sheet of such Subsidiary Guarantor and its Subsidiaries as of the end of
such Fiscal Year and a Consolidated statement of income and a Consolidated
statement of cash flows of such Subsidiary Guarantor and its Subsidiaries for
such Fiscal Year, in each case accompanied by an opinion acceptable to the
Required Banks of PricewaterhouseCoopers LLP or other independent public
accountants of recognized standing acceptable to the Required Banks.

 

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(c) Quarterly Financials. As soon as available and in any event within 45 days
after the end of each of the first three quarters of each Fiscal Year (or, if
earlier, within five Business Days after such date as the Parent is required to
file its quarterly report on Form 10-Q for such fiscal quarter with the
Securities and Exchange Commission), Consolidated balance sheets of the Parent
and its Subsidiaries as of the end of such quarter and Consolidated statements
of income and a Consolidated statement of cash flows of the Parent and its
Subsidiaries for the period commencing at the end of the previous fiscal quarter
and ending with the end of such fiscal quarter and Consolidated statements of
income and a Consolidated statement of cash flows of the Parent and its
Subsidiaries for the period commencing at the end of the previous Fiscal Year
and ending with the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding date or period
of the preceding Fiscal Year, all in reasonable detail and duly certified
(subject to the absence of footnotes and normal year-end audit adjustments) by
the Chief Financial Officer, Chief Accounting Officer or Chief Compliance
Officer of the Parent as having been prepared in accordance with GAAP, together
with (i) a certificate of said officer stating that no Default has occurred and
is continuing or, if a Default has occurred and is continuing, a statement as to
the nature thereof and the action that the Parent has taken and proposes to take
with respect thereto and (ii) a schedule in form reasonably satisfactory to the
Administrative Agent of the computations used by the Parent in determining
compliance with the covenants contained in Section 5.04.

 

(d) Litigation. Promptly after the commencement thereof, notice of all actions,
suits, investigations, litigation and proceedings before any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, affecting any Loan Party or any of its Subsidiaries of the
type described in Section 4.01(f).

 

(e) Securities Reports. Promptly after the sending or filing thereof, copies of
all proxy statements, financial statements and reports that the Parent sends to
its stockholders generally, copies of all regular, periodic and special reports,
and all registration statements, that any Loan Party or any of its Subsidiaries
files with the Securities and Exchange Commission or any governmental authority
that may be substituted therefor, or with any national securities exchange.

 

(f) ERISA.

 

(i) ERISA Events. Promptly and in any event within 10 days after any Loan Party
or any ERISA Affiliate institutes any steps to terminate any Pension Plan or
becomes aware of the institution of any steps or any threat by the PBGC to
terminate any Pension Plan, or the failure to make a required contribution to
any Pension Plan if such failure is sufficient to give rise to a lien under
section 302(f) of ERISA, or the taking of any action with respect to a Pension
Plan which could result in the requirement that any Loan Party or any ERISA
Affiliate furnish a bond or other security to the PBGC or such Pension Plan, or
the occurrence of any event with respect to any Pension Plan which could result
in any Loan Party or any ERISA Affiliate incurring any material liability, fine
or penalty, or any material increase in the contingent liability of any Loan
Party or any ERISA Affiliate with respect to any post-retirement Welfare Plan
benefit, notice thereof and copies of all documentation relating thereto.

 

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(ii) Plan Annual Reports. Promptly upon request of any Agent or any Bank, copies
of each Schedule B (Actuarial Information) to the annual report (Form 5500
Series) with respect to each Pension Plan.

 

(iii) Multiemployer Plan Notices. Promptly and in any event within 15 Business
Days after receipt thereof by any Loan Party or any ERISA Affiliate from the
sponsor of a Multiemployer Plan, copies of each notice concerning (A) the
imposition of Withdrawal Liability by any such Multiemployer Plan, (B) the
reorganization or termination, within the meaning of Title IV of ERISA, of any
such Multiemployer Plan or (C) the amount of liability incurred, or that may be
incurred, by such Loan Party or any ERISA Affiliate in connection with any event
described in clause (A) or (B); provided, however, that such notice and
documentation shall not be required to be provided (except at the specific
request of any Agent or any Bank, in which case such notice and documentation
shall be promptly provided following such request) if such condition or event is
not reasonably expected to result in any Loan Party or any ERISA Affiliate
incurring any material liability, fine, or penalty.

 

(g) Statutory Statements. As soon as available and in any event within 20 days
after submission, each statutory statement of the Loan Parties (or any of them)
in the form submitted to the Supervisor of Insurance, the Insurance Division of
the Bermuda Monetary Authority.

 

(h) Regulatory Notices, Etc. Promptly after any Responsible Officer of the
Parent obtains knowledge thereof, (i) a copy of any notice from the Bermuda
Minister of Finance or the Registrar of Companies or any other person of the
revocation, the suspension or the placing of any restriction or condition on the
registration as an insurer of any Account Party under the Bermuda Insurance Act
1978 (and related regulations) or of the institution of any proceeding or
investigation which could result in any such revocation, suspension or placing
of such a restriction or condition, (ii) copies of any correspondence by, to or
concerning any Loan Party relating to an investigation conducted by the Bermuda
Minister of Finance, whether pursuant to Section 132 of the Bermuda Companies
Act 1981 (and related regulations) or otherwise and (iii) a copy of any notice
of or requesting or otherwise relating to the winding-up or any similar
proceeding of or with respect to any Loan Party.

 

(i) Other Information. Such other information respecting the business, condition
(financial or otherwise), operations, performance, properties or prospects of
any Loan Party or any of its Subsidiaries as the Administrative Agent, or any
Bank through the Administrative Agent, may from time to time reasonably request.
Information required to be delivered pursuant to Sections 5.03(b), 5.03(c), and
5.03(e) shall be deemed to have been delivered on the date on which the Parent
provides notice to the Administrative Agent that such information has been
posted on the Parent’s website on the Internet at the website address listed on
the signature pages hereof, at sec.gov/edaux.searches.htm or at another website
identified in such notice and accessible by the Banks without charge; provided
that (x) such notice may be included in a certificate delivered pursuant to
Section 5.03(b)(i)(A) or 5.01(c)(i) and (y) the Parent shall deliver paper
copies of the information referred to in Sections 5.03(b), 5.03(c), and 5.03(e)
to any Bank which requests such delivery.

 

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5.04 Financial Covenants. So long as any Advance or any other obligation of any
Loan Party under any Loan Document shall remain unpaid, any Letter of Credit
shall be outstanding or any Bank shall have any Letter of Credit Participating
Interest Commitment or commitment to issue a Letter of Credit hereunder, the
Parent will:

 

(a) Adjusted Consolidated Debt to Total Capitalization Ratio. Maintain at all
times a ratio of Adjusted Consolidated Debt to Total Capitalization of not more
than 0.35 to 1.0.

 

(b) Consolidated Net Worth. Maintain at all times Consolidated Net Worth in an
amount not less than the Minimum Amount. For this purpose, the “Minimum Amount”
is an amount equal to the sum of (i) the Base Amount plus (ii) (A) 25% of
Consolidated Net Income for each fiscal quarter of the Parent, ending on or
after the date on which the current Base Amount became effective and before the
last day of the current Fiscal Year, for which such Consolidated Net Income is
positive and (B) 50% of any increase in Consolidated Net Worth during such
period attributable to the issuance of ordinary and preferred shares. The “Base
Amount” shall be $6,000,000,000 as of December 31, 2003 and shall be reset on
the last day of each Fiscal Year to equal the greater of (x) 70% of Consolidated
Net Worth as of the last day of such Fiscal Year and (y) the Minimum Amount in
effect immediately prior to such last day.

 

ARTICLE VI

 

EVENTS OF DEFAULT

 

6.01 Events of Default. If any of the following events (“Events of Default”)
shall occur and be continuing:

 

(a) (i) any Account Party shall fail to pay any reimbursement obligation in
respect of any Advance made by any Issuing Bank pursuant to a Letter of Credit
when and as the same shall become due and payable, or (ii) any Account Party
shall fail to make any payment of interest on such Advance or of any other
amount payable by such Account Party under any Loan Document, in each case under
this clause (ii) within five Business Days after the same becomes due and
payable; or

 

(b) any representation or warranty made by any Loan Party (or any of its
officers) under or in connection with any Loan Document shall prove to have been
incorrect in any material respect when made; or

 

(c) any Account Party shall fail to perform or observe any term, covenant or
agreement contained in Section 2.10, 5.01(d) (with respect to the Parent), 5.02,
5.03(a) or 5.04; or

 

(d) any Account Party shall fail to perform or observe any term, covenant or
agreement contained in Section 5.01(e) if such failure shall remain unremedied
for five Business Days after written notice thereof shall have been given to
such Loan Party by any Agent or any Bank; or

 

(e) any Loan Party shall fail to perform or observe any other term, covenant or
agreement contained in any Loan Document on its part to be performed or observed
if such

 

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failure shall remain unremedied for 30 days after the earlier of the date on
which (i) a Responsible Officer becomes aware of such failure or (ii) written
notice thereof shall have been given to such Loan Party by any Agent or any
Bank; or

 

(f) the Parent or any of its Subsidiaries shall fail to pay any Material
Financial Obligation (but excluding Debt outstanding hereunder) of the Parent or
such Subsidiary (as the case may be), when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period,
if any, specified in the agreement or instrument relating to such Material
Financial Obligation; or any other event shall occur or condition shall exist
under any agreement or instrument relating to any such Material Financial
Obligation and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Material Financial Obligation or otherwise to cause, or to permit the
holder thereof to cause, such Material Financial Obligation to mature; or any
such Material Financial Obligation shall be declared to be due and payable or
required to be prepaid or redeemed (other than by a regularly scheduled required
prepayment or redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Material Financial Obligation shall be required to be
made, in each case prior to the stated maturity thereof; or

 

(g) any Loan Party or any of its Significant Subsidiaries shall generally not
pay its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against any Loan Party
or any of its Significant Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it (but not
instituted by it) that is being diligently contested by it in good faith, either
such proceeding shall remain undismissed or unstayed for a period of 60 days or
any of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur; or any Loan Party or any of its Significant Subsidiaries
shall take any corporate action to authorize any of the actions set forth above
in this Section 6.01(g); or

 

(h) any judgment or order for the payment of money in excess of $100,000,000
shall be rendered against any Loan Party or any of its Subsidiaries and either
(i) enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or

 

(i) any non-monetary judgment or order shall be rendered against any Loan Party
or any of its Subsidiaries that would be reasonably likely to have a Material
Adverse Effect, and there shall be any period of 30 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or

 

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(j) any provision in Article VII of this Agreement shall for any reason cease to
be valid and binding on or enforceable against any Loan Party (other than as a
result of a transaction permitted hereunder), or any such Loan Party shall so
state in writing; or

 

(k) a Change of Control shall occur; or

 

(l) Any Loan Party or any ERISA Affiliate shall incur or shall be reasonably
expected to incur liability in excess of $25,000,000 in the aggregate with
respect to any Pension Plan or any Multiemployer Plan in connection with the
occurrence of any of the following events or existence of any of the following
conditions:

 

(i) Institution of any steps by any Loan Party, any ERISA Affiliate or any other
Person, including, without limitation, the PBGC to terminate a Pension Plan if
as a result of such termination a Loan Party or any ERISA Affiliate would
reasonably expect to be required to make a contribution to such Pension Plan, or
would reasonably expect to incur a liability or obligation; or

 

(ii) A contribution failure occurs with respect to any Pension Plan sufficient
to give rise to a lien under section 302(f) of ERISA; or

 

(iii) Any condition shall exist or event shall occur with respect to a Pension
Plan that is reasonably expected to result in any Loan Party or any ERISA
Affiliate being required to furnish a bond or security to the PBGC or such
Pension Plan, or incurring a liability or obligation; or

 

(m) any Loan Party or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability or a
default, within the meaning of Section 4219(c)(5) of ERISA, has occurred with
respect to such Multiemployer Plan which could cause any Loan Party or any ERISA
Affiliate to incur a payment obligation in excess of $25,000,000;

 

then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Banks, by notice to the Account
Parties, declare the obligation of the Issuing Banks to issue Letters of Credit
to be terminated, whereupon the same shall forthwith terminate, and/or (ii)
shall at the request, or may with the consent, of the Required Banks, by notice
to the Account Parties, declare all amounts payable under this Agreement and the
other Loan Documents to be forthwith due and payable, whereupon all such amounts
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Account Parties; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to any Account Party under the
federal Bankruptcy Code, (x) the obligation of the Issuing Banks to issue
Letters of Credit shall automatically be terminated, (y) all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Account Parties and (z) the obligation of the Account Parties to provide
cash collateral under Section 6.02 shall automatically become effective.

 

6.02 Actions in Respect of the Letters of Credit upon Default. If any Event of
Default shall have occurred and be continuing, the Administrative Agent may, or
shall at the request of

 

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the Required Banks, after having taken any of the actions described in Section
6.01(ii) or otherwise, make demand upon the Account Parties to, and forthwith
upon such demand the Account Parties will, pay to the Administrative Agent on
behalf of the Banks in same day funds at the Administrative Agent’s office
designated in such demand, an amount equal to the aggregate Available Amount of
all Letters of Credit then outstanding as cash collateral. If at any time during
the continuance of an Event of Default the Administrative Agent determines that
such funds are subject to any right or claim of any Person other than the
Administrative Agent and the Banks or that the total amount of such funds is
less than the aggregate Available Amount of all Letters of Credit, the Account
Parties will, forthwith upon demand by the Administrative Agent, pay to the
Administrative Agent, as additional cash collateral, an amount equal to the
excess of (a) such aggregate Available Amount over (b) the total amount of
funds, if any, that the Administrative Agent determines to be free and clear of
any such right and claim. Upon the drawing of any Letter of Credit, such funds
shall be applied to reimburse the Issuing Banks or Banks, as applicable, to the
extent permitted by applicable law.

 

ARTICLE VII

 

THE GUARANTY

 

7.01 The Guaranty.

 

(a) Each Account Party hereby jointly and severally, unconditionally, absolutely
and irrevocably guarantees the full and punctual payment (whether at stated
maturity, upon acceleration or otherwise) of all amounts payable by each of the
other Account Parties under the Loan Documents including, without limitation,
the principal of and interest (including, to the greatest extent permitted by
law, post-petition interest) on reimbursement obligations owing by such other
Account Parties pursuant to this Agreement with respect to Letters of Credit and
fees, expenses, indemnities or any other obligations, whether now existing or
hereafter incurred, created or arising and whether direct or indirect, absolute
or contingent, or due or to become due. Upon failure by an Account Party to pay
punctually any such amount, each other Account Party agrees to pay forthwith on
demand the amount not so paid at the place and in the manner specified in this
Agreement.

 

(b) Each Account Party (other than the Parent), and by its acceptance of this
Guaranty, the Administrative Agent and each other Bank, hereby confirms that it
is the intention of all such Persons that this Guaranty and the obligations of
each Account Party hereunder not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to
the extent applicable to this Guaranty and the obligations of each Account Party
(other than the Parent) hereunder. To effectuate the foregoing intention, the
Administrative Agent, the other Banks and the Account Parties hereby irrevocably
agree that the obligations of each Account Party (other than the Parent) under
this Article VII at any time shall be limited to the maximum amount as will
result in the obligations of such Account Party under this Guaranty not
constituting a fraudulent transfer or conveyance.

 

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7.02 Guaranty Unconditional. The obligations of each Account Party under this
Article VII shall be unconditional, absolute and irrevocable and, without
limiting the generality of the foregoing, shall not be released, discharged or
otherwise affected by:

 

(i) any extension, renewal, settlement, compromise, waiver or release in respect
of any obligation of any other obligor under any of the Loan Documents, by
operation of law or otherwise;

 

(ii) any modification or amendment of or supplement to any of the Loan
Documents;

 

(iii) any release, non-perfection or invalidity of any direct or indirect
security for any obligation of any other obligor under any of the Loan
Documents;

 

(iv) any change in the corporate existence, structure or ownership of any
obligor, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting any other obligor or its assets or any resulting release or
discharge of any obligation of any other obligor contained in any of the Loan
Documents;

 

(v) the existence of any claim, set-off or other rights which any obligor may
have at any time against any other obligor, the Administrative Agent, any Bank
or any other corporation or person, whether in connection with any of the Loan
Documents or any unrelated transactions, provided that nothing herein shall
prevent the assertion of any such claim by separate suit or compulsory
counterclaim;

 

(vi) any invalidity or unenforceability relating to or against any other obligor
for any reason of any of the Loan Documents, or any provision of applicable law
or regulation purporting to prohibit the payment by any other obligor of
principal interest or any other amount payable under any of the Loan Documents;

 

(vii) any law, regulation or order of any jurisdiction, or any other event,
affecting any term of any obligation of the Banks’ rights with respect thereto;
or

 

(viii) any other act or omission to act or delay of any kind by any obligor, the
Administrative Agent, any Bank or any other corporation or person or any other
circumstance whatsoever which might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of or defense to an Account Party’s
obligations under this Article VII.

 

7.03 Discharge Only upon Payment in Full; Reinstatement in Certain
Circumstances. Each Account Party’s obligations under this Article VII shall
remain in full force and effect until the commitments of the Banks hereunder
shall have terminated, no Letters of Credit shall be outstanding and all amounts
payable by the other Account Parties under the Loan Documents shall have been
paid in full. If at any time any payment of the principal of or interest on any
reimbursement obligation or any other amount payable by an Account Party under
the Loan

 

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Documents is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of such Account Party or otherwise,
each other Account Party’s obligations under this Article VII with respect to
such payment shall be reinstated as though such payment had been due but not
made at such time.

 

7.04 Waiver by the Account Parties. Each Account Party irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
corporation or person against any other obligor or any other corporation or
person.

 

7.05 Subrogation. Each Account Party hereby unconditionally and irrevocably
agrees not to exercise any rights that it may now have or hereafter acquire
against any other Account Party, or any other insider guarantor that arise from
the existence, payment, performance or enforcement of such Account Party’s
obligations under or in respect of this Guaranty or any other Loan Document,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in any
claim or remedy of any Bank against any other Account Party, any other Loan
Party or any other insider guarantor or any collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from any other
Account Party, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all amounts payable under this Guaranty shall have been paid in full in cash, no
Letters of Credit shall be outstanding and the commitments of the Banks
hereunder shall have expired or been terminated. If any amount shall be paid to
any Account Party in violation of the immediately preceding sentence at any time
prior to the latest of (a) the payment in full in cash of all amounts payable
under this Guaranty, and (b) the Expiration Date, such amount shall be received
and held in trust for the benefit of the Banks, shall be segregated from other
property and funds of such Account Party and shall forthwith be paid or
delivered to the Administrative Agent in the same form as so received (with any
necessary endorsement or assignment) to be credited and applied to all amounts
payable under this Guaranty, whether matured or unmatured, in accordance with
the terms of the Loan Documents, or to be held as collateral for any amounts
payable under this Guaranty thereafter arising. If (i) any Account Party shall
make payment to any Bank of all or any amounts payable under this Guaranty, (ii)
all amounts payable under this Guaranty shall have been paid in full in cash,
and (iii) the Expiration Date shall have occurred, the Banks will, at such
Account Party’s request and expense, execute and deliver to such Account Party
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to such Account Party of an
interest in the obligations resulting from such payment made by such Account
Party pursuant to this Guaranty.

 

7.06 Stay of Acceleration. If acceleration of the time for payment of any amount
payable by any Account Party under any of the Loan Documents is stayed upon the
insolvency, bankruptcy or reorganization of such Account Party, all such amounts
otherwise subject to acceleration under the terms of this Agreement shall
nonetheless be payable by the other Account Parties under this Article VII
forthwith on demand by the Administrative Agent made at the request of the
requisite proportion of the Banks.

 

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7.07 Continuing Guaranty; Assignments. This Guaranty is a continuing guaranty
and shall (a) remain in full force and effect until the latest of (i) the
payment in full in cash of all amounts payable under this Guaranty and (ii) the
Expiration Date, (b) be binding upon each Account Party, its successors and
assigns and (c) inure to the benefit of and be enforceable by the Banks and
their successors, transferees and assigns. Without limiting the generality of
clause (c) of the immediately preceding sentence, any Bank may assign or
otherwise transfer all or any portion of its rights and obligations under this
Agreement (including, without limitation, all or any portion of its Letter of
Credit Participating Interest Commitment and the Advances owing to it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Bank herein or otherwise, in each
case as and to the extent provided in Section 9.07.

 

ARTICLE VIII

 

THE AGENTS

 

8.01 Authorization and Action. Each Bank (in its capacity as a Bank) hereby
appoints and authorizes each Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement and the other
Loan Documents as are delegated to such Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental thereto.
As to any matters not expressly provided for by the Loan Documents, no Agent
shall be required to exercise any discretion or take any action, but shall be
required to act (in the case of the Administrative Agent) or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Banks or all the Banks where unanimity is
required, and such instructions shall be binding upon all Banks; provided,
however, that no Agent shall be required to take any action that exposes such
Agent to personal liability or that is contrary to this Agreement or applicable
law. The Administrative Agent agrees to give to each Bank prompt notice of each
notice given to it by any Account Party pursuant to the terms of this Agreement.

 

8.02 Agents’ Reliance, Etc. Neither any Agent nor any of its respective
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, each Agent: (a) may
consult with legal counsel (including counsel for any Loan Party), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (b) makes no warranty or
representation to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations (whether written or oral) made in or
in connection with the Loan Documents; (c) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of any Loan Document on the part of any Loan Party or to inspect
the property (including the books and records) of any Loan Party; (d) shall not
be responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; and (e) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent,

 

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certificate or other instrument or writing (which may be by telegram or
telecopy) reasonably believed by it to be genuine and signed or sent by the
proper party or parties.

 

8.03 Agents and Affiliates. With respect to its LC Commitment Amounts, and the
Advances, each Agent shall have the same rights and powers under the Loan
Documents as any other Bank and may exercise the same as though it were not an
Agent; and the term “Bank” or “Banks” shall, unless otherwise expressly
indicated, include each Agent in its individual capacity. Each Agent and its
affiliates may accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from and generally engage
in any kind of business with, any Loan Party, any of its Subsidiaries and any
Person that may do business with or own securities of any Loan Party or any such
Subsidiary, all as if such Agent were not an Agent and without any duty to
account therefor to the Banks.

 

8.04 Bank Credit Decision. Each Bank acknowledges that it has, independently and
without reliance upon any Agent or any other Bank and based on the financial
statements referred to in Section 4.01 and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Bank also acknowledges that it will, independently and
without reliance upon any Agent or any other Bank and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement.

 

8.05 Indemnification.

 

(a) Each Bank severally agrees to indemnify each Agent and its officers,
directors, employees, agents, advisors and Affiliates (to the extent not
promptly reimbursed by the Account Parties) from and against such Bank’s ratable
share (determined as provided below) of any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against such Agent or any such other Person in any way relating
to or arising out of the Loan Documents or any action taken or omitted by such
Agent under the Loan Documents; provided, however, that no Bank shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from such
Agent’s or other Person’s gross negligence or willful misconduct. Without
limitation of the foregoing, each Bank agrees to reimburse each Agent promptly
upon demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Account Parties under
Section 9.04, to the extent that such Agent is not promptly reimbursed for such
costs and expenses by the Account Parties.

 

(b) For purposes of this Section 8.05, the Banks’ respective ratable shares of
any amount shall be determined, at any time, according to the sum of (i) the
aggregate principal amount of the Advances outstanding at such time and owing to
the respective Banks, (ii) their respective Pro Rata Shares of the aggregate
Available Amounts of all Letters of Credit outstanding at such time and (iii)
their respective Unused LC Commitment Amounts at such time. The failure of any
Bank to reimburse any Agent promptly upon demand for its ratable share of any
amount required to be paid by the Banks to such Agent as provided herein shall
not relieve any other Bank of its obligation hereunder to reimburse such Agent
for its ratable share of such amount, but no Bank shall be responsible for the
failure of any other Bank to reimburse

 

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such Agent for such other Bank’s ratable share of such amount. Without prejudice
to the survival of any other agreement of any Bank hereunder, the agreement and
obligations of each Bank contained in this Section 8.05 shall survive the
payment in full of principal, interest and all other amounts payable hereunder
and under the other Loan Documents.

 

8.06 Successor Administrative Agent. Any Agent may resign at any time by giving
written notice thereof to the Banks and the Parent. Upon any such resignation or
removal of the Administrative Agent, the Required Banks shall have the right to
appoint a successor Administrative Agent, subject (so long as no Event of
Default exists) to the consent of the Parent (which consent shall not be
unreasonably withheld). If no successor Administrative Agent shall have been so
appointed by the Required Banks, and shall have accepted such appointment,
within 30 days after the retiring Administrative Agent’s giving of notice of
resignation or the Required Banks’ removal of the retiring Administrative Agent,
then the retiring Administrative Agent may, on behalf of the Banks, appoint a
successor Administrative Agent, which shall be a commercial bank organized under
the laws of the United States or of any State thereof and having a combined
capital and surplus of at least $250,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent such successor Administrative Agent shall succeed to and become vested
with all the rights, powers, discretion, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under the Loan Documents. If within 45 days
after written notice is given of the retiring Administrative Agent’s resignation
or removal under this Section 8.06 no successor Administrative Agent shall have
been appointed and shall have accepted such appointment, then on such 45th day
(i) the retiring Administrative Agent’s resignation or removal shall become
effective, (ii) the retiring Administrative Agent shall thereupon be discharged
from its duties and obligations under the Loan Documents and (iii) the Required
Banks shall thereafter perform all duties of the retiring Administrative Agent
under the Loan Documents until such time, if any, as the Required Banks appoint
a successor Administrative Agent as provided above. After any retiring Agent’s
resignation or removal hereunder as Agent shall have become effective, the
provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement. If
Bank of America ceases to be a Bank hereunder, it shall be deemed to have
resigned as Syndication Agent and no replacement shall be appointed.

 

ARTICLE IX

 

MISCELLANEOUS

 

9.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement
or any other Loan Document, nor consent to any departure by any Loan Party
therefrom, shall in any event be effective unless the same shall be in writing
and signed by Wachovia in its capacity as an Issuing Bank and the Required Banks
(and, in the case of an amendment, the Parent), and then any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall:

 

(a) unless in writing and signed by all of the Banks (other than any Bank that
is, at such time, a Defaulting Bank), do any of the following at any time: (i)
waive any of

 

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the conditions specified in Section 3.01 or, in the case of the Effective Date,
Section 3.02, (ii) change the number of Banks or the percentage of (x) the LC
Commitment Amounts, (y) the aggregate unpaid principal amount of the Advances or
(z) the aggregate Available Amount of outstanding Letters of Credit that, in
each case, shall be required for the Banks or any of them to take any action
hereunder, (iii) reduce or limit the obligations of any Account Party under
Section 7.01 or release such Account Party or otherwise limit such Account
Party’s liability with respect to the obligations owing to the Agents and the
Banks, (iv) amend this Section 9.01 or any of the definitions herein that would
have such effect, (v) extend the Expiration Date, or (vi) limit the liability of
any Loan Party under any of the Loan Documents;

 

(b) unless in writing and signed by each affected Bank, do any of the following
at any time: (i) increase the LC Commitment Amounts of the Banks or subject the
Banks to any additional obligations, (ii) reduce the principal of, or interest
on, any reimbursement obligation or any fees or other amounts payable hereunder,
or increase any Bank’s LC Commitment Amount, or (iii) postpone any date fixed
for any payment of principal of, or interest on, any reimbursement obligation or
any fees or other amounts payable hereunder;

 

provided further that no amendment, waiver or consent shall, unless in writing
and signed by an Agent in addition to the Banks required above to take such
action, affect the rights or duties of such Agent under this Agreement or the
other Loan Documents and no amendment, waiver or consent shall, unless in
writing and signed by an Issuing Bank in addition to the Banks above required to
take such action, affect the rights or duties of such Issuing Bank under this
Agreement or the other Loan Documents.

 

9.02 Notices, Etc. All notices and other communications provided for hereunder
shall be in writing (including telegraphic or telecopy communication) and
mailed, telegraphed, telecopied or delivered, if to any Account Party, at its
address set forth below on the signature pages hereof; if to any Initial Bank,
at its Domestic Lending Office specified opposite its name on Part 2 of Schedule
I hereto; if to any other Bank, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it became a Bank; if to Wachovia (in
its capacity as Issuing Bank) at its address at 401 Linden Street, Mail Code
NC-6034, Winston-Salem, North Carolina 27101, Attn: International Operations —
Standby Letter of Credit Department, Telecopy No. (336) 735-0952; and if to the
Administrative Agent, at its address at Charlotte Plaza Building, 201 South
College Street, 8th Floor NC0680, Charlotte, North Carolina 28288, Attn:
Syndication Agency Services, Telecopy No. (704) 383-0288, with a copy to Mark B.
Felker, Managing Director, 301 South College Street, 5th Floor NC0760,
Charlotte, NC 28288, Telecopy No. (704) 383-7611; or, as to any party, at such
other address as shall be designated by such party in a written notice to the
other parties. All such notices and communications shall, when mailed,
telegraphed or telecopied, be effective when deposited in the mails, delivered
to the telegraph company or transmitted by telecopier, respectively, except that
notices and communications to the Administrative Agent pursuant to Article II,
III or VIII shall not be effective until received by the Administrative Agent.
Manual delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Agreement or of any Exhibit hereto to be
executed and delivered hereunder shall be effective as delivery of an original
executed counterpart thereof.

 

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9.03 No Waiver; Remedies. No failure on the part of any Bank or any Agent to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

 

9.04 Costs and Expenses.

 

(a) Each of the Account Parties agrees to pay on demand (i) all reasonable costs
and expenses of the Agents, the Joint Lead Arrangers and Wachovia, in its
capacity as an Issuing Bank, in connection with the preparation, execution,
delivery, administration, modification and amendment of the Loan Documents
(including, without limitation, (A) all due diligence, collateral review,
syndication, transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses and (B) the
reasonable fees and expenses of a single counsel for the Administrative Agent
and Wachovia in its capacity as an Issuing Bank with respect thereto, with
respect to advising the Administrative Agent as to its rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors’ rights generally and any proceeding ancillary thereto); and (ii) all
reasonable costs and expenses of each Agent, each Issuing Bank and each Bank in
connection with the enforcement of the Loan Documents, whether in any action,
suit or litigation, or any bankruptcy, insolvency or other similar proceeding
affecting creditors’ rights generally (including, without limitation, the
reasonable fees and expenses of counsel for the Administrative Agent, each
Issuing Bank and each Bank with respect thereto).

 

(b) Each of the Account Parties jointly and severally agrees to indemnify and
hold harmless each Agent, each Joint Lead Arranger, each Issuing Bank, each Bank
and each of their Affiliates and their respective officers, directors,
employees, agents and advisors (each, an “Indemnified Party”) from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) this Agreement, the actual or
proposed use of the proceeds of the Advances, the Loan Documents or any of the
transactions contemplated thereby, except to the extent such claim, damage,
loss, liability or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnified Party or any of its Affiliates. In the
case of an investigation, litigation or other proceeding to which the indemnity
in this Section 9.04(b) applies, such indemnity shall be effective whether or
not such investigation, litigation or proceeding is brought by any Loan Party,
its directors, shareholders or creditors or an Indemnified Party or any
Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated by the Loan Documents are consummated. Each of the
Account Parties also agrees not to assert any claim against any Agent, any Joint
Lead Arranger, any Bank or any of their Affiliates, or any of their respective

 

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officers, directors, employees, attorneys and agents, on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or otherwise relating to the credit facilities provided hereunder, the actual
or proposed use of the proceeds of the Advances or the Letters of Credit, the
Loan Documents or any of the transactions contemplated by the Loan Documents.

 

(c) Without prejudice to the survival of any other agreement of any Loan Party
hereunder or under any other Loan Document, the agreements and obligations of
the Account Parties contained in Section 2.07 and this Section 9.04 shall
survive the payment in full of principal, interest and all other amounts payable
hereunder and under any of the other Loan Documents.

 

9.05 Right of Set-off. Upon (a) the occurrence and during the continuance of any
Event of Default and (b) the making of the request or the granting of the
consent specified by Section 6.01 to authorize the Administrative Agent to
declare amounts owing hereunder to be due and payable pursuant to the provisions
of Section 6.01, each Agent and each Bank and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Agent, such Bank or such
Affiliate to or for the credit or the account of any Account Party against any
and all of the obligations of such Account Party now or hereafter existing under
the Loan Documents, irrespective of whether such Agent or such Bank shall have
made any demand under this Agreement and although such obligations may be
unmatured. Each Agent and each Bank agrees promptly to notify each Account Party
after any such set-off and application; provided, however, that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of each Agent and each Bank and their respective Affiliates under
this Section 9.05 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) that such Agent, such Bank and
their respective Affiliates may have.

 

9.06 Binding Effect. This Agreement shall become effective when it shall have
been executed by each Account Party, each Issuing Bank and each Agent and the
Administrative Agent shall have been notified by each Initial Bank that such
Initial Bank has executed it and thereafter shall be binding upon and inure to
the benefit of each Account Party, each Agent, each Issuing Bank and each Bank
and their respective successors and assigns, except that no Account Party shall
have the right to assign its rights hereunder or any interest herein without the
prior written consent of the Banks.

 

9.07 Assignments and Participations.

 

(a) Each Bank may, and so long as no Default shall have occurred and be
continuing, if demanded by any Account Party (following a demand by such Bank
pursuant to Section 2.12) upon at least five Business Days notice to such Bank
and the Administrative Agent, will, assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its LC Commitment Amount, its Letter of
Credit Participating Interest Commitment and the Letter of Credit Advances owing
to it); provided, however, that (i) each such assignment shall be of a uniform,
and not a varying,

 

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percentage of all rights and obligations of such Bank hereunder, except for any
non-pro rata assignment made by a Downgraded Bank after a request by the
Administrative Agent pursuant to Section 2.14 (and any subsequent non-pro rata
assignment of the interest so assigned or by the Downgraded Bank) and any other
non-pro rata assignment approved by the Administrative Agent and any Account
Party, (ii) except in the case of an assignment to a Person that, immediately
prior to such assignment, was (x) a Bank or an Affiliate of any Bank, the
aggregate amount of the LC Commitment Amounts being assigned to such Eligible
Assignee pursuant to such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $1,000,000 unless it is an assignment of the entire amount of such
assignor’s LC Commitment Amount, or (y) not a Bank or an Affiliate of any Bank,
the aggregate amount of the LC Commitment Amounts being assigned to such
Eligible Assignee pursuant to such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $5,000,000 unless it is an assignment of the entire amount of such
assignor’s LC Commitment Amount, (iii) each such assignment shall be to an
Eligible Assignee, (iv) each assignment made as a result of a demand by any
Account Party pursuant to Section 2.12 shall be arranged by such Account Party
after consultation with the Administrative Agent and shall be either an
assignment of all of the rights and obligations of the assigning Bank under this
Agreement or an assignment of a portion of such rights and obligations made
concurrently with another such assignment or other such assignments that
together cover all of the rights and obligations of the assigning Bank under
this Agreement, (v) no Bank shall be obligated to make any such assignment as a
result of a demand by any Account Party pursuant to Section 2.12 unless and
until such Bank shall have received one or more payments from either such
Account Party or other Eligible Assignees in an aggregate amount at least equal
to the aggregate outstanding principal amount of the Advances made by such Bank,
together with accrued interest thereon to the date of payment of such principal
amount and all other amounts payable to such Bank under this Agreement, (vi) as
a result of such assignment, no Account Party shall be subject to additional
amounts under Section 2.06 or 2.08 and (vii) the parties to each such assignment
shall execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $3,500.

 

(b) Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in such Assignment and Acceptance, (i) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Bank, hereunder and (ii) the
Bank assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (other than its rights under Sections 2.06, 2.08 and 9.04
to the extent any claim thereunder relates to an event arising prior to such
assignment and any other rights that are expressly provided hereunder to
survive) and be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the remaining portion of an
assigning Bank’s rights and obligations under this Agreement, such Bank shall
cease to be a party hereto).

 

(c) By executing and delivering an Assignment and Acceptance, each Bank assignor
thereunder and each assignee thereunder confirm to and agree with each other and
the other parties thereto and hereto as follows: (i) other than as provided in
such Assignment and

 

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Acceptance, such assigning Bank makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with any Loan Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with, any Loan Document or any other
instrument or document furnished pursuant thereto; (ii) such assigning Bank
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of any Loan Party or the performance or observance by
any Loan Party of any of its obligations under any Loan Document or any other
instrument or document furnished pursuant thereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon any Agent, such assigning Bank or any
other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes each Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under the Loan Documents as are delegated to such Agent by the terms hereof and
thereof, together with such powers and discretion as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as a Bank.

 

(d) The Administrative Agent, acting for this purpose (but only for this
purpose) as the agent of the Account Parties, shall maintain at its address
referred to in Section 9.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Banks and the LC Commitment Amount of, and principal amount of
the Advances owing to, each Bank from time to time (the “Register”). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Account Parties, the Agents and the Banks shall treat
each Person whose name is recorded in the Register as a Bank hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
any Account Party or any Agent or any Bank at any reasonable time and from time
to time upon reasonable prior notice.

 

(e) Upon its receipt of an Assignment and Acceptance executed by an assigning
Bank and an assignee, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit A
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Parent and to the parties to such Assignment and Acceptance.

 

(f) Each Bank may sell participations to one or more Persons (other than any
Loan Party or any of its Affiliates) in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its LC Commitment Amount, its Letter of Credit Participating Interest
Commitment and the Advances owing to it; provided, however, that (i) such Bank’s
obligations under this Agreement (including, without limitation, its Letter of
Credit Participating Interest Commitment) shall remain unchanged, (ii) such Bank
shall remain solely responsible to the other parties hereto for the performance
of such obligations,

 

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(iii) the Account Parties, the Agents and the other Banks shall continue to deal
solely and directly with such Bank in connection with such Bank’s rights and
obligations under this Agreement and (iv) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, reimbursement obligations or any
fees or other amounts payable hereunder, in each case to the extent subject to
such participation, postpone any date fixed for any payment of principal of, or
interest on, the reimbursement obligations or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation. Each Bank
shall, as agent of the Account Parties solely for the purposes of this Section
9.07, record in book entries maintained by such Bank, the name and amount of the
participating interest of each Person entitled to receive payments in respect of
any participating interests sold pursuant to this Section 9.07.

 

(g) Any Bank may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section 9.07, disclose to the
assignee or participant or proposed assignee or participant any information
relating to any Account Party furnished to such Bank by or on behalf of any
Account Party; provided, however, that, prior to any such disclosure, the
assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any Confidential Information received by it from
such Bank.

 

(h) Notwithstanding any other provision set forth in this Agreement, any Bank
may at any time create a security interest in all or any portion of its rights
under this Agreement (including, without limitation, the Advances owing to it)
in favor of any Federal Reserve Bank in accordance with Regulation A of the
Board of Governors of the Federal Reserve System.

 

9.08 Execution in Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall be
effective as delivery of an original executed counterpart of this Agreement.

 

9.09 No Liability of the Issuing Banks. Each Account Party assumes all risks of
the acts or omissions of any beneficiary or transferee of any Letter of Credit
with respect to its use of such Letter of Credit. Neither an Issuing Bank nor
any of its officers, directors, employees or agents shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by such Issuing Bank
against presentation of documents that do not strictly comply with the terms of
a Letter of Credit, including failure of any documents to bear any reference or
adequate reference to the Letter of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under any Letter of Credit,
except that such Account Party shall have a claim against such Issuing Bank, and
such Issuing Bank shall be liable to such Account Party, to the extent of any
direct, but not consequential, damages suffered by such Account Party that such
Account Party proves were caused by (i) such Issuing Bank’s willful misconduct
or gross

 

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negligence as determined in a final, non-appealable judgment by a court of
competent jurisdiction in determining whether documents presented under any
Letter of Credit comply with the terms of the Letter of Credit or (ii) such
Issuing Bank’s willful failure to make lawful payment under a Letter of Credit
after the presentation to it of a draft and certificates strictly complying with
the terms and conditions of the Letter of Credit. In furtherance and not in
limitation of the foregoing, the Issuing Banks may accept documents that appear
on their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.

 

9.10 Confidentiality. Neither any Agent nor any Bank shall disclose any
Confidential Information to any Person without the consent of the Parent, other
than (a) to such Agent’s or such Bank’s Affiliates and their officers,
directors, employees, agents and advisors and to actual or prospective Eligible
Assignees and participants, and then only on a confidential basis, (b) as
required by any law, rule or regulation or judicial process, (c) as requested or
required by any state, federal or foreign authority or examiner regulating such
Bank or pursuant to any request of any self-regulatory body having or claiming
authority to regulate or oversee any aspect of a Bank’s business of that of any
of its Affiliates and (d) to any rating agency when required by it, provided
that, prior to any such disclosure, such rating agency shall undertake to
preserve the confidentiality of any Confidential Information relating to the
Loan Parties received by it from such Bank. Notwithstanding anything herein to
the contrary, the information subject to this Section 9.10 shall not include,
and the Administrative Agent and each Bank may disclose to any and all Persons,
without limitation of any kind, any information with respect to the “tax
treatment” and “tax structure” (in each case, within the meaning of Treasury
Regulation Section 1.6011-4) of the transactions contemplated hereby or by any
of the other Loan Documents and all materials of any kind (including opinions or
other tax analyses) that are provided to the Administrative Agent or such Bank
relating to such tax treatment and tax structure (it being understood that this
authorization is retroactively effective to the commencement of the first
discussions between or among any of the parties regarding the transactions
contemplated hereby or by any of the other Loan Documents); provided that with
respect to any document or similar item that in either case contains information
concerning such tax treatment or tax structure as well as other information,
this sentence shall only apply to such portions of the document or similar item
that relate to such tax treatment or tax structure.

 

9.11 Jurisdiction, Etc.

 

(a) Each of the parties hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or federal court of the United States of America sitting in New York
City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any of the other Loan Documents
to which it is a party, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that any party may
otherwise have to bring any

 

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action or proceeding relating to this Agreement or any of the other Loan
Documents in the courts of any jurisdiction.

 

(b) Each of the parties hereto irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any of the other Loan Documents
to which it is a party in any New York State or federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

 

(c) Each of the Account Parties hereby irrevocably appoints Mayer, Brown, Rowe &
Maw LLP, with offices on the Effective Date at 1675 Broadway, New York, New
York, 10019, USA as its agent to receive, accept and acknowledge for and on its
behalf services of any and all legal process, summons, notices and documents
which may be served in any such action or proceeding. If for any reason such
agent shall cease to be available to act as such, the Account Parties agree to
promptly designate a new agent satisfactory to the Administrative Agent in the
Borough of Manhattan, The City of New York, to receive, accept and acknowledge
for and on its behalf service of any and all legal process, summons, notices and
documents which may be served in any such action or proceeding pursuant to the
terms of this Section 9.11. In the event that any Borrower shall fail to
designate such new agent, service of process in any such action or proceeding
may be made on such Account Party by the mailing of copies thereof by express or
overnight mail or courier, postage prepaid, to such Account Party at its address
set forth opposite its signature below.

 

9.12 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.

 

9.13 Waiver of Jury Trial. Each of the Account Parties, the Agents and the Banks
irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to any of the Loan Documents, the Advances or the actions of any Agent
or any Bank in the negotiation, administration, performance or enforcement
thereof.

 

9.14 Disclosure of Information. Each Account Party agrees and consents to the
Administrative Agent’s disclosure of information relating to this transaction to
Gold Sheets and other similar bank trade publications. Such information will
consist of deal terms and other information customarily found in such
publications. The Parent shall have the right to review and approve any such
disclosure made by the Administrative Agent before such disclosure is made (such
approval not to be unreasonably withheld).

 

9.15 USA Patriot Act. Each Bank hereby notified the Account Parties that
pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Patriot Act”), it is required to
obtain, verify and record information that identifies each Account Party, which
information includes the name and address of such Account Party and other
information that will allow such Bank to identify such Account Party in

 

68

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accordance with the Patriot Act. Each Account Party shall provide such
information promptly upon request from such Bank.

 

9.16 Certain Effective Date Matters. By their execution of this Agreement, (i)
the Account Parties and the Banks that are parties to the Existing Reimbursement
Agreement (which Banks constitute “Required Banks” under and as defined in the
Existing Reimbursement Agreement), Tempest and CitiBank as parties to a
Bilateral Agreement and Barclays as a party to a Bilateral Agreement
(collectively, the “Existing Agreements”) agree that each Existing Agreement
shall terminate and be of no further force or effect on the Effective Date
(except that any provision of any Existing Agreement that by its terms survives
termination of such Existing Agreement shall remain in full force and effect),
(ii) the Parent, the Administrative Agent, Barclays, as an Issuing Bank, and, by
execution and delivery of a letter agreement substantially in the form of
Exhibit C, the Trustees of the Lloyd’s Dollar Trust Funds of Syndicate 2488 (the
“Trustees”) agree that each letter of credit issued under the Bilateral
Agreement to which Barclays is a party shall be deemed to have been issued, and
to be outstanding, for the joint account of the Parent and the Trustees and
(iii) the relevant Account Parties and the Issuing Banks agree that each
Existing Letter of Credit shall become a Letter of Credit hereunder on the
Effective Date, in each case without any further action by any Person.

 

[Remainder of page intentionally left blank]

 

69

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

 

ACE LIMITED The Common Seal of ACE Limited was hereunto affixed in the presence
of:  

Authorized Officer

 

Authorized Officer

ACE BERMUDA INSURANCE LTD. The Common Seal of ACE Bermuda Insurance Ltd. was
hereunto affixed in the presence of:  

Authorized Officer

 

Authorized Officer

ACE TEMPEST LIFE REINSURANCE LTD. The Common Seal of ACE Tempest Life
Reinsurance Ltd. was hereunto affixed in the presence of:  

Authorized Officer

 

Authorized Officer

 

(signatures continued)

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

ACE TEMPEST REINSURANCE LTD.

The Common Seal of ACE Tempest Reinsurance Ltd. was hereunto affixed in the
presence of:

 

Authorized Officer

 

Authorized Officer

Address for each Account Party:

ACE Global Headquarters

17 Woodbourne Avenue

Hamilton HM08 Bermuda

Telecopy: (441) 296-0087

 

(signatures continued)

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent, as Issuing Bank
and as an Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

BANK OF AMERICA, N.A., as Syndication Agent and as an Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

BARCLAYS BANK, PLC, as a Co-Documentation Agent, as an Issuing Bank and as an
Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

CITIBANK, N.A., as a Co-Documentation Agent,
as an Issuing Bank and as an Initial Bank By:    

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

JPMORGAN CHASE BANK, as a
Co- Documentation Agent and as an Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

DEUTSCHE BANK AG, NEW YORK BRANCH, as an Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

HSBC BANK USA, NATIONAL ASSOCIATION as an Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

ING BANK N.V., LONDON BRANCH, as an
Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

THE ROYAL BANK OF SCOTLAND PLC, as an Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

ABN AMRO BANK, N.V., as an Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

KEYBANK NATIONAL ASSOCIATION, as an Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

STATE STREET BANK AND TRUST
COMPANY, as an Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

BNP PARIBAS, as an Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

THE BANK OF TOKYO-MITSUBISHI, LTD. NEW YORK BRANCH, as an Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

COMERICA BANK, as an Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

LLOYDS TSB BANK PLC, as an Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

MELLON BANK, N.A., as an Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

NATIONAL AUSTRALIA BANK LIMITED, as
an Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

NATIONAL CITY BANK, as an Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

WELLS FARGO BANK, NATIONAL ASSOCIATION, as an Initial Bank

By:

   

Title:

   

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

THE BANK OF N.T. BUTTERFIELD & SON LIMITED, as an Initial Bank

By:

   

Title:

   

 

Signature Page to Unsecured Reimbursement Agreement

 

--------------------------------------------------------------------------------

SCHEDULE I

 

LC COMMITMENT AMOUNTS

 

Wachovia Bank, National Association

   $ 62,900,000

Bank of America, N.A.

   $ 62,900,000

Barclays Bank PLC

   $ 59,800,000

CitiBank, N.A.

   $ 59,800,000

JPMorgan Chase Bank

   $ 59,800,000

Deutsche Bank AG, New York Branch

   $ 50,400,000

HSBC Bank USA, National Association

   $ 50,400,000

ING Bank N.V., London Branch

   $ 50,400,000

The Royal Bank of Scotland plc

   $ 50,400,000

ABN AMRO Bank, N.V.

   $ 40,900,000

KeyBank National Association

   $ 40,900,000

State Street Bank and Trust Company

   $ 40,900,000

BNP Paribas

   $ 25,200,000

The Bank of Tokyo-Mitsubishi, Ltd. New York Branch

   $ 25,200,000

Comerica Bank

   $ 25,200,000

Lloyds TSB Bank plc

   $ 25,200,000

Mellon Bank, N.A.

   $ 25,200,000

National Australia Bank Limited

   $ 25,200,000

National City Bank

   $ 25,200,000

Wells Fargo Bank, National Association

   $ 25,200,000

The Bank of N.T. Butterfield & Son Limited

   $ 18,900,000     

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Total

   $ 850,000,000

 

--------------------------------------------------------------------------------

SCHEDULE I – PART 2

 

DOMESTIC LENDING OFFICES

 

Wachovia Bank, National Association

  

Agency Management Group

301 South College Street, 5th Floor

Charlotte, North Carolina 28288-0737

Attn: Mark Felker

Telephone: (704) 374-7074

Telecopy: (704) 383-7611

Bank of America, N.A.

  

231 S. LaSalle Street

Chicago, Illinois 60697

Attn: Debra Basler

Telephone: (312) 828-3734

Telecopy: (312) 987-0889

Barclays Bank PLC

  

P.O. Box 544

1st Floor

54 Lombard Street

London EC3V 9EX England

Attn: Neil Holmes

Telephone: 44 (0) 20 7699 3125

Telecopy: 44 (0) 20 7699 2407

 

Copies to:

Barclays Capital

GSU, 5 North Colonade

Canary Wharf

London E14 4BB England

Attn: Graham Smart

Telephone: 44 (0) 20 7773 6450

Telecopy: 44 (0) 20 7773 6807

CitiBank, N.A.

    

JPMorgan Chase Bank

  

Financial Institutions Group

270 Park Avenue, 15th Floor

New York, New York 10017

Attn: Helen Newcomb

Telephone: (212) 270-6260

Telecopy: (212) 270-1511

Deutsche Bank AG, New York Branch

  

31 West 52nd Street Mail Stop NYC01-2402

New York, New York 10019

Attn: Clinton M. Johnson

Telephone: (212) 469-8101

Telecopy: (212) 469-8366

 

--------------------------------------------------------------------------------

HSBC Bank USA, National Association   

452 Fifth Avenue, 5th Floor

New York, New York 10018

Attn: Kenneth J. Johnson

Telephone: (212) 525-2480

Telecopy: (212) 525-2479

ING Bank N.V., London Branch      The Royal Bank of Scotland plc      ABN AMRO
Bank, N.V.   

540 West Madison Street, Suite 2621

Chicago, Illinois 60661

Attn: Credit Administration

Telecopy: (312) 992-5111

 

Copies to:

350 Park Avenue

New York, NY 10055

Telecopy: (212) 409-1718

KeyBank National Association   

127 Public Square, 6th Floor

Cleveland, Ohio 44114

Attn: Mary K. Young

Telephone: (216) 689-4443

Telecopy: (216) 689-4981

State Street Bank and Trust Company   

Domestic Lending Office:

225 Franklin Street

Boston, Massachusetts 02110

 

Address for notices:

Lafayette Corporate Center

2 Avenue de Lafayette

Boston, Massachusetts 02111

Attn: Edward M. Anderson, VP

Telephone: (617) 662-3782

Telecopy: (617) 662-3778

BNP Paribas   

787 7th Avenue, 28th Floor

New York, New York 10019

Attn: Joshua Landau

Telephone: (212) 841-3823

Telecopy: (212) 841-2533

The Bank of Tokyo-Mitsubishi, Ltd. New York Branch      Comerica Bank   

500 Woodward Avenue

Detroit, Michigan 48226-3331

Attn: Martin G. Ellis

Telephone: (313) 222-9443

Telecopy: (313) 222-5466

 

2

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Lloyds TSB Bank plc

  

1251 Avenue of the Americas, 39th Floor

NY, NY 10020

Attn: Patricia Kilian, VP, Loans Administration

Telephone: (212) 930-8914

Telecopy: (212) 930-5098

Mellon Bank, N.A.

  

One Mellon Center, Room 4505

Pittsburgh, Pennsylvania 15258-0001

Attn: Karla Maloof

Telephone: (412) 236-4147

Telecopy: (412) 234-8087

National Australia Bank Limited

  

245 Park Avenue, 28th Floor

New York, NY 10167

Attn: Mike McHugh

Telephone: (212) 916-9559

Telecopy: (212) 949-9515

National City Bank

  

1 North Franklin, Suite 3600

Chicago, IL 60606

Attn: Gustavus Bahr

Telephone: (312) 384- 6904

Telecopy: (312) 384- 4618

Wells Fargo Bank, National Association

  

90 So. 7th Street

MAC N9305-075, 7th Floor

Minneapolis, Minnesota 55402

Attn: Jason Paulnock

Telephone: (612) 667-4742

Telecopy: (612) 667-7251

The Bank of N.T. Butterfield & Son Limited

  

65 Front Street

Hamilton HM DX, Bermuda

Attn: Jonathan Raynor, VP-Corporate Banking

Telephone: (441) 298-4774

Telecopy: (441) 296-2851

 

3

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SCHEDULE II

 

EXISTING LETTERS OF CREDIT

 

1. Wachovia Letter of Credit No. SM208430

Beneficiary: Travelers Indemnity Company

Amount: US $3,994,681.00

 

2. Wachovia Letter of Credit No. SM207678

Beneficiary: AIG Global Trade & Political Risk Insurance Co.

Amount: US $5,831,454.30

 

3. Wachovia Letter of Credit No. SM419119

Beneficiary: Pacific Employers Insurance Company

Amount: US $4,485,547.00

 

4. Wachovia Letter of Credit No. SM417961

Beneficiary: Westchester Surplus Lines Insurance

Amount: US $452,148.40

 

5. Wachovia Letter of Credit No. SM417966

Beneficiary: Illinois Union Insurance Company

Amount: US $1,333,050.77

 

6. Wachovia Letter of Credit No. SM421751

Beneficiary: North Carolina Commissioner of Insurance

Amount: US $25,000,000.00

 

7. Wachovia Letter of Credit No. SM206354

Beneficiary: Century Indemnity Insurance Company

Amount: US $6,000.00

 

8. Wachovia Letter of Credit No. SM206355

Beneficiary: Westchester Surplus Lines Insurance Company

Amount: US $670,000.00

 

9. Wachovia Letter of Credit No. SM206643

Beneficiary: Travelers Casualty & Surety Insurance Co. of America

Amount: US $5,727,949.40

 

10. Wachovia Letter of Credit No. SM419121

Beneficiary: Protective Life Insurance Company

Amount: US $22,000,000.00

 

--------------------------------------------------------------------------------

11. Wachovia Letter of Credit No. SM419645

Beneficiary: Royal Trust Corp of Canada in Trust for Provident Life & Accident

Amount: CAD 1,963,500

 

12. Wachovia Letter of Credit No. SM419579

Beneficiary: Hartford Steam Boiler

Amount: US $2,199,452.00

 

13. Wachovia Letter of Credit No. SM421261

Beneficiary: American Int’l Life Assurance Co. of America

Amount: US $7,000,733.00

 

14. Wachovia Letter of Credit No. SM418289

Beneficiary: Reliastar Life Insurance Company

Amount: US $9,582,548.00

 

15. Wachovia Letter of Credit No. SM421259

Beneficiary: AIG Life

Amount: US $21,452,166.00

 

16. Wachovia Letter of Credit No. SM417967

Beneficiary: ACE Guaranty

Amount: US $19,700,000.00

 

17. Wachovia Letter of Credit No. SM419487

Beneficiary: Reliastar Life Insurance Company

Amount: US $39,405,795.00

 

18. Wachovia Letter of Credit No. SM200611

Beneficiary: State Compensation Insurance Fund

Amount: US $61,220,438.00

 

19. Wachovia Letter of Credit No. SM202228

Beneficiary: AIG Global Trade & Political

Amount: US $1,430,200.00

 

20. Wachovia Letter of Credit No. SM201521

Beneficiary: ACE Property Casualty Insurance

Amount: US $301,000.00

 

21. Wachovia Letter of Credit No. SM201520

Beneficiary: Illinois Union Insurance Company

Amount: US $382,000.00

 

2

--------------------------------------------------------------------------------

22. Wachovia Letter of Credit No. SM201522

Beneficiary: ACE Property Casualty Insurance Company

Amount: US $2,900,000.00

 

23. Wachovia Letter of Credit No. SM201523

Beneficiary: ACE Property Casualty Insurance Company

Amount: US $21,900,000.00

 

24. Wachovia Letter of Credit No. SM204791

Beneficiary: Pacific Employers Insurance Company

Amount: US $5,540,178.00

 

25. Wachovia Letter of Credit No. SM422302

Beneficiary: Liberty International Insurance Ltd.

Amount: HKD 42,500,000.00

 

26. Wachovia Letter of Credit No. SM200454

Beneficiary: Pacific Employers Insurance Company

Amount: US $1,636,220.00

 

27. Wachovia Letter of Credit No. SM205298

Beneficiary: Illinois Union Insurance Company

Amount: US $1,000,000.00

 

28. Wachovia Letter of Credit No. SM205299

Beneficiary: ACE American Insurance Company

Amount: US $1,308,447.00

 

29. Wachovia Letter of Credit No. SM205102

Beneficiary: Pacific Employers Insurance Company

Amount: US $2,492,563.00

 

30. Wachovia Letter of Credit No. SM202814

Beneficiary: Pacific Employers Insurance Company

Amount: US $5,500,000.00

 

31. Wachovia Letter of Credit No. SM201338

Beneficiary: ACE USA Companies

Amount: US $677,618.68

 

32. Wachovia Letter of Credit No. SM202203

Beneficiary: Zuellig Insurance Management Ltd.

Amount: HKD 42,500,000.00

 

3

--------------------------------------------------------------------------------

33. Wachovia Letter of Credit No. SM422299

Beneficiary: Pacific Employers Insurance Company

Amount: US $3,000,000.00

 

34. Wachovia Letter of Credit No. SM208401

Beneficiary: ACE American Insurance Company

Amount: US $808,363.00

 

35. Wachovia Letter of Credit No. SM209675

Beneficiary: ACE American Insurance Company

Amount: US $64,345.95

 

36. Wachovia Letter of Credit No. SM205103

Beneficiary: The Manufacturers Life Insurance Co. of NY

Amount: US $2,000,000.00

 

37. Wachovia Letter of Credit No. SM201398

Beneficiary: Nationwide Financial Services (Bermuda) Ltd.

Amount: US $280,000.00

 

38. Wachovia Letter of Credit No. SM201345

Beneficiary: Censeco Variable Insurance Company

Amount: US $500,000.00

 

39. Wachovia Letter of Credit No. SM201342

Beneficiary: Jackson National Life Insurance Company

Amount: US $2,200,000.00

 

40. Wachovia Letter of Credit No. SM201646

Beneficiary: Allmerica Financial Life and Annuity Company

Amount: US $20,475,000.00

 

41. Wachovia Letter of Credit No. SM206968

Beneficiary: Delaware American Life Insurance Company

Amount: US $185,036.00

 

42. Wachovia Letter of Credit No. SM206191

Beneficiary: Merrill Lynch Life Insurance Co.

Amount: US $1,250,000.00

 

43. Wachovia Letter of Credit No. SM206638

Beneficiary: Equitable Life Assurance Society of the US

Amount: US $16,000,000.00

 

4

--------------------------------------------------------------------------------

44. Wachovia Letter of Credit No. SM203217

Beneficiary: Manufacturers Life Insurance Company

Amount: US $18,500,000.00

 

45. Barclays Letter of Credit No. LOC 02127

Beneficiary: CitiBank NA as trustees of Syndicate 2488 SLTF

Amount: US $100,371,105

 

46. Barclays Letter of Credit No. LOC 03088

Beneficiary: CitiBank NA as trustees of Syndicate 2488 SLTF

Amount: US $44,031,933

 

47. Barclays Letter of Credit No. LOC 04039

Beneficiary: CitiBank NA as trustees of Syndicate 2488 CRTF

Amount: US $38,712,756

 

48. Barclays Letter of Credit No. LOC 04040

Beneficiary: CitiBank NA as trustees of Syndicate 2488 SLTF

Amount: US $16,884,800

 

49. CitiBank Letter of Credit No. 0159208

Beneficiary: HOME INSURANCE COMPANY, INC.

Amount: US $172,088.69

 

50. CitiBank Letter of Credit No. 0159209

Beneficiary: WESTCHESTER FIRE INSURANCE

Amount: US $148,033.40

 

51. CitiBank Letter of Credit No. 0159223

Beneficiary: TIG INSURANCE COMPANY

Amount: US $149,056.70

 

52. CitiBank Letter of Credit No. 0159415

Beneficiary: CHURCH INSURANCE COMPANY

Amount: US $8,120.19

 

53. CitiBank Letter of Credit No. 0159588

Beneficiary: FACTORY MUTUAL INSURANCE COMPANY

Amount: US $292,614.03

 

54. CitiBank Letter of Credit No. 0159737

Beneficiary: AMERICAN AGRICULTURAL INSURANCE

Amount: US $4,132.50

 

5

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55. CitiBank Letter of Credit No. 0159895

Beneficiary: UNITED STATES FIRE

Amount: US $869,265.45

 

56. CitiBank Letter of Credit No. 0159898

Beneficiary: CHUBB AND SON INC FOR AND ON

Amount: US $229,884.20

 

57. CitiBank Letter of Credit No. 0159912

Beneficiary: ST PAUL FIRE AND MARINE

Amount: US $1,873,170.67

 

58. CitiBank Letter of Credit No. 0159939

Beneficiary: NEW YORK CENTRAL MUTUAL FIRE

Amount: US $11,019.58

 

59. CitiBank Letter of Credit No. 0159973

Beneficiary: FIRE INSURANCE EXCHANGE

Amount: US $5,630,749.68

 

60. CitiBank Letter of Credit No. 0160008

Beneficiary: ROYAL INDEMNITY COMPANY

Amount: US $2,531,800.00

 

61. CitiBank Letter of Credit No. 0160263

Beneficiary: CAMERON MUTUAL INSURANCE COMPANY

Amount: US $86,487.56

 

62. CitiBank Letter of Credit No. 0160264

Beneficiary: AAA MICHIGAN

Amount: US $1,500.00

 

63. CitiBank Letter of Credit No. 0160303

Beneficiary: HSB INDUSTRIAL RISK INSURERS

Amount: US $10,395,669.83

 

64. CitiBank Letter of Credit No. 0160305

Beneficiary: SOUTHERN FARM BUREAU PROPERTY

Amount: US $14,965.56

 

65. CitiBank Letter of Credit No. 0160306

Beneficiary: SHELTER MUTUAL INSURANCE COMPANY

Amount: US $675,830.44

 

6

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66. CitiBank Letter of Credit No. 0160308

Beneficiary: COTTON STATES MUTUAL INSURANCE

Amount: US $10,560,479.04

 

67. CitiBank Letter of Credit No. 0160309

Beneficiary: AMERICAN FAMILY MUTUAL INSURANCE

Amount: US $324,701.30

 

68. CitiBank Letter of Credit No. 0160311

Beneficiary: UNION MUTUAL FIRE INSURANCE

Amount: US $342,996.93

 

69. CitiBank Letter of Credit No. 0160312

Beneficiary: GRE INSURANCE GROUP

Amount: US $837.50

 

70. CitiBank Letter of Credit No. 0160313

Beneficiary: SOUTH CAROLINA FARM BUREAU

Amount: US $2,850.00

 

71. CitiBank Letter of Credit No. 0160314

Beneficiary: GENERAL REINSURANCE CORPORATION

Amount: US $91,456.59

 

72. CitiBank Letter of Credit No. 0160316

Beneficiary: ASSOCIATED INTERNATIONAL INSURANCE

Amount: US $1,019,337.02

 

73. CitiBank Letter of Credit No. 0160327

Beneficiary: SOUTHERN GUARANTY

Amount: US $1,424,225.61

 

74. CitiBank Letter of Credit No. 0160362

Beneficiary: FARM BUREAU MUTUAL INSURANCE

Amount: US $3,420.00

 

75. CitiBank Letter of Credit No. 0162400

Beneficiary: ONE BEACON INSURANCE GROUP

Amount: US $694,925.46

 

76. CitiBank Letter of Credit No. 0601120

Beneficiary: AUSTIN MUTUAL INSURANCE COMPANY

Amount: US $2,932.64

 

7

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77. CitiBank Letter of Credit No. 0601121

Beneficiary: FOLKSAMERICA REINSURANCE COMPANY

Amount: US $69,815.15

 

78. CitiBank Letter of Credit No. 0601125

Beneficiary: INSURANCE COMPANY OF THE WEST

Amount: US $44,596.07

 

79. CitiBank Letter of Credit No. 0601126

Beneficiary: ZEPHYR INSURANCE COMPANY

Amount: US $952,836.10

 

80. CitiBank Letter of Credit No. 0601193

Beneficiary: CITIZENS INSURANCE CO OF AMERICA

Amount: US $290,984.54

 

81. CitiBank Letter of Credit No. 0601194

Beneficiary: THE HANOVER INSURANCE COMPANY

Amount: US $766,253.75

 

82. CitiBank Letter of Credit No. 0601197

Beneficiary: AMERICAN AGRICULTURAL INS CO

Amount: US $131,993.00

 

83. CitiBank Letter of Credit No. 0601235

Beneficiary: ONYX INSURANCE GROUP

Amount: US $100,400.62

 

84. CitiBank Letter of Credit No. 0601398

Beneficiary: PUBLIC SERVICE MUTUAL INSURANCE

Amount: US $10,932.50

 

85. CitiBank Letter of Credit No. 0601399

Beneficiary: HARTFORD FIRE INSURANCE COMPANY

Amount: US $354,090.67

 

86. CitiBank Letter of Credit No. 0601400

Beneficiary: REPUBLIC UNDERWRITERS INSURANCE

Amount: US $17,217.20

 

87. CitiBank Letter of Credit No. 0601402

Beneficiary: HASTINGS MUTUAL INSURANCE COMPANY

Amount: US $2,900.00

 

8

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88. CitiBank Letter of Credit No. 0601403

Beneficiary: ZURICH US

Amount: US $750,000.00

 

89. CitiBank Letter of Credit No. 0601455

Beneficiary: CAPACITY INSURANCE COMPANY

Amount: US $17,690.25

 

90. CitiBank Letter of Credit No. 0601456

Beneficiary: SOMPO JAPAN INSURANCE COMPANY

Amount: US $18,451.36

 

91. CitiBank Letter of Credit No. 0601457

Beneficiary: METROPOLITAN PROPERTY CASUALTY

Amount: US $63,241.56

 

92. CitiBank Letter of Credit No. 0601458

Beneficiary: INDUSTRIAL RISK INSURERS (97)

Amount: US $2,500,000.00

 

93. CitiBank Letter of Credit No. 0601459

Beneficiary: MISSISSIPPI FARM BUREAU MUTUAL I

Amount: US $10,968.21

 

94. CitiBank Letter of Credit No. 0601460

Beneficiary: GRANGE MUTUAL INSURANCE

Amount: US $105,325.30

 

95. CitiBank Letter of Credit No. 0601461

Beneficiary: EMPLOYERS MUTUAL CASUALTY COMPANY

Amount: US $27,221.41

 

96. CitiBank Letter of Credit No. 0601462

Beneficiary: HARLEYSVILLE INSURANCE COMPANIES

Amount: US $25,482.65

 

97. CitiBank Letter of Credit No. 0601465

Beneficiary: DONEGAL MUTUAL INSURANCE COMPANY

Amount: US $14,950.00

 

98. CitiBank Letter of Credit No. 0601489

Beneficiary: NEW AMERICA

Amount: US $227,475.00

 

9

--------------------------------------------------------------------------------

99. CitiBank Letter of Credit No. 0601527

Beneficiary: FARMERS HOME MUTUAL INSURANCE CO

Amount: US $1,336.86

 

100. CitiBank Letter of Credit No. 0601545

Beneficiary: PACIFIC SPECIALTY INSURANCE CO

Amount: US $271,534.94

 

101. CitiBank Letter of Credit No. 0601551

Beneficiary: AMERICAN AGRICULTURAL INS CO

Amount: US $1,360,538.44

 

102. CitiBank Letter of Credit No. 0601552

Beneficiary: UPLAND MUTUAL INSURANCE INC

Amount: US $89,132.38

 

103. CitiBank Letter of Credit No. 0601558

Beneficiary: MUTUAL OF ENUMCLAW INSURANCE CO

Amount: US $112,500.00

 

104. CitiBank Letter of Credit No. 0601605

Beneficiary: HARBOR SPECIALTY INSURANCE CO

Amount: US $32,477.28

 

105. CitiBank Letter of Credit No. 0601606

Beneficiary: CLARENDON AMERICA INSURANCE CO

Amount: US $74,600.61

 

106. CitiBank Letter of Credit No. 0601607

Beneficiary: CLARENDON SELECT INSURANCE COMPANY

Amount: US $74,160.05

 

107. CitiBank Letter of Credit No. 0601608

Beneficiary: ACE PROPERTY CASUALTY INSURANCE

Amount: US $670,362.06

 

108. CitiBank Letter of Credit No. 0601609

Beneficiary: EMPIRE FIRE AND MARINE INS CO

Amount: US $159,940.04

 

109. CitiBank Letter of Credit No. 0601630

Beneficiary: AMERICAN GROWERS INSURANCE COMPANY

Amount: US $58,414.88

 

10

--------------------------------------------------------------------------------

110. CitiBank Letter of Credit No. 0601669

Beneficiary: CLARENDON NATIONAL INSURANCE CO.

Amount: US $199,689.95

 

111. CitiBank Letter of Credit No. 0601670

Beneficiary: ACE AMERICAN INSURANCE COMPANY

Amount: US $44,852.60

 

112. CitiBank Letter of Credit No. 0601677

Beneficiary: CONTINENTAL CASUALTY COMPANY

Amount: US $100,000.00

 

113. CitiBank Letter of Credit No. 0601683

Beneficiary: EMPIRE FIRE AND MARINE INS CO

Amount: US $28,181.75

 

114. CitiBank Letter of Credit No. 0601684

Beneficiary: GENERAL REINSURANCE CORPORATION

Amount: US $118,807.43

 

115. CitiBank Letter of Credit No. 0601708

Beneficiary: CINCINNATI INSURANCE COMPANY

Amount: US $422.26

 

116. CitiBank Letter of Credit No. 0601718

Beneficiary: AUDUBON INSURANCE COMPANY

Amount: US $6,325.72

 

117. CitiBank Letter of Credit No. 0601720

Beneficiary: BRETHREN MUTUAL INSURANCE

Amount: US $1,533,452.12

 

118. CitiBank Letter of Credit No. 0601805

Beneficiary: HIGH POINT PREFERRED INSURANCE C

Amount: US $182,296.88

 

119. CitiBank Letter of Credit No. 0601806

Beneficiary: PHILADELPHIA INSURANCE COMPANY

Amount: US $194,310.43

 

120. CitiBank Letter of Credit No. 0601807

Beneficiary: STATE AUTOMOBILE MUTUAL INS. CO.

Amount: US $640,188.49

 

11

--------------------------------------------------------------------------------

121. CitiBank Letter of Credit No. 0601808

Beneficiary: NC GRANGE MUTUAL INSURANCE

Amount: US $225,626.54

 

122. CitiBank Letter of Credit No. 0601809

Beneficiary: CENTRAL MUTUAL INSURANCE COMPANY

Amount: US $18,456.04

 

123. CitiBank Letter of Credit No. 0601810

Beneficiary: NATIONAL GRANGE MUTUAL INS. CO.

Amount: US $135,804.77

 

124. CitiBank Letter of Credit No. 0601829

Beneficiary: ARMED FORCES INSURANCE EXCHANGE

Amount: US $203,361.47

 

125. CitiBank Letter of Credit No. 0601866

Beneficiary: STATE FARM FIRE CASUALTY CO

Amount: US $303,935.38

 

126. CitiBank Letter of Credit No. 0601873

Beneficiary: LOUISIANA JOINT REINSURANCE

Amount: US $434,764.15

 

127. CitiBank Letter of Credit No. 0601874

Beneficiary: ACE PROPERTY CASUALTY INSURANCE

Amount: US $43,894.69

 

128. CitiBank Letter of Credit No. 0601901

Beneficiary: CALIFORNIA CASUALTY GROUP

Amount: US $279,062.00

 

129. CitiBank Letter of Credit No. 0601903

Beneficiary: PIEDMONT MUTUAL

Amount: US $50,000.00

 

130. CitiBank Letter of Credit No. 0601904

Beneficiary: EDGECOMBE FARMERS MUTUAL

Amount: US $7,500.00

 

131. CitiBank Letter of Credit No. 0601907

Beneficiary: ARCH SPECIALTY INSURANCE COMPANY

Amount: US $107,170.00

 

12

--------------------------------------------------------------------------------

132. CitiBank Letter of Credit No. 601464

Beneficiary: LA SOCIETE DE PORTEFEUILLE

Amount: CAD $350,694.37

 

133. CitiBank Letter of Credit No. 81932

Beneficiary: ACE INSURANCE LTD

Amount: HKD $39,000,000.00

 

13

--------------------------------------------------------------------------------

SCHEDULE 4.01(B)

 

SUBSIDIARIES

 

Name

--------------------------------------------------------------------------------

  

Jurisdiction of

Organization

--------------------------------------------------------------------------------

  

Percentage

Ownership

--------------------------------------------------------------------------------

  

Jurisdictions in which
Authorized

and Type of Business

--------------------------------------------------------------------------------

ACE Limited

   Cayman Islands    Publicly held    Bermuda, holding company

ACE Bermuda Insurance Ltd.

   Bermuda    100%    Bermuda, insurance, reinsurance, general and long term;
Mexico, reinsurance

ACE PCC Insurance Limited

   Guernsey    100%    Guernsey, protected cell rent-a-captive business

Paget Reinsurance International Ltd.

   Bermuda    100%    Bermuda, insurance/reinsurance

ACE Capital Title Reinsurance Company (EI# 06-1434264, NAIC# 50028, NY)

   New York    100%    CA, MI, NY, TX, title insurance/reinsurance

Oasis Investments Limited

   Bermuda    67%    Bermuda, Investment Holding

Oasis Investments 2 Ltd.

   Bermuda    67%    Bermuda, holding company

ACE Financial Solutions International, Ltd.

   Bermuda    100%    Bermuda, insurance management

ACE European Markets Reinsurance Limited

   Ireland    100%    Ireland, general and life reinsurance

ACE European Markets Insurance Limited

   Ireland    100%    EEA/Europe, direct non-life insurance, UK branch

Corporate Officers & Directors Assurance Ltd.

   Bermuda    100%    Bermuda, insurance

Oasis Real Estate Company Ltd.

   Bermuda    100%    Bermuda, investment holding

Scarborough Property Holdings Ltd.

   Bermuda    40%    Bermuda, investment holding

Sovereign Risk Insurance Limited

   Bermuda    50%    Bermuda, insurance agent

Tripar Partnership

   Bermuda   

98%

2% (CODA)

   Bermuda, investment holding

ACE Realty Holdings Limited

   Bermuda    100%    Bermuda, investment holding

 

--------------------------------------------------------------------------------

Name

--------------------------------------------------------------------------------

  

Jurisdiction of

Organization

--------------------------------------------------------------------------------

  

Percentage

Ownership

--------------------------------------------------------------------------------

  

Jurisdictions in which
Authorized

and Type of Business

--------------------------------------------------------------------------------

Oasis Personnel Limited

   Cayman Islands    100%    Cayman Islands, general services

Shipowners Insurance and Guaranty Co. Limited

   Bermuda   

10% Series A

8% Series B

   Bermuda, insurance

Intrepid Re Holdings Limited

   Bermuda    38.5%    Bermuda, holding

Intrepid Re Limited

   Bermuda    100%    Bermuda, Reinsurance

Freisenbruch-Meyer Insurance Ltd.

   Bermuda    40%    Bermuda, local and commercial insurance

Freisenbruch-Meyer Insurance Services Ltd.

   Bermuda    40%    Bermuda, local and commercial insurance

Assured Guaranty Ltd.

(formerly AGC Holdings Limited)

   Bermuda    35% (remaining 65% is publicly held)    Bermuda, holding company

Assured Guaranty Re International Ltd. (formerly ACE Capital Re International
Ltd.)

   Bermuda    100%    Bermuda, insurance/reinsurance, general and long term

Assured Guaranty Barbados Holdings Ltd. (formerly ACE KRE Holdings Limited)

   Barbados    100%    Barbados, investment holding

Assured Guaranty Overseas US Holdings Inc. (formerly ACE Capital Re USA Holdings
Incorporated)

   Delaware    100%    Delaware, investment holding

Assured Guaranty Re Overseas Ltd. (formerly ACE Capital Re Overseas Ltd.)

   Bermuda    100%    Bermuda, insurance/reinsurance, general and long term

Assured Guaranty Mortgage Insurance Company (formerly ACE Capital Mortgage
Reinsurance Co.)
(EI# 06-1384770, NAIC# 10021, NY)

   New York    100%    New York, DC, mtg. guaranty insurance/reinsurance

AG Intermediary Inc.

(formerly ACE Capital Re Inc.)

   New York    100%    New York, reinsurance intermediary

Assured Guaranty Finance Overseas Ltd. (formerly ACE Finance Overseas Limited)

   United Kingdom    100%     

Assured Guaranty US Holdings Inc.

   Delaware    100%    Delaware, holding company

AG Financial Products Inc.

(formerly AGR Financial Products Inc.)

   USA (Delaware)    100%    Delaware, financial products

Assured Guaranty Corp. (formerly ACE Guaranty Corp.) (EI#52 - 1533088, NAIC
#30180, MD)

   Maryland    100%    US, insurance company

 

15

--------------------------------------------------------------------------------

Name

--------------------------------------------------------------------------------

  

Jurisdiction of

Organization

--------------------------------------------------------------------------------

  

Percentage

Ownership

--------------------------------------------------------------------------------

  

Jurisdictions in which
Authorized

and Type of Business

--------------------------------------------------------------------------------

Assured Guaranty (UK) Ltd.

(formerly ACE Guaranty (UK) Ltd.)

   United Kingdom    100%    UK, applying for license to be financial guaranty
insurer

ACE Risk Assurance Company

(EI# 13-4027591, NAIC #10943, MD)

   Maryland    100%    Maryland, reinsurance

ACE Global Markets Limited

   United Kingdom    100%    UK, investment holding

ACE Group Holdings Limited

   United Kingdom    100%    UK, investment holding

ACE Tarquin

   United Kingdom    100%    UK, investment holding

ACE Capital V Limited

   United Kingdom    100%    UK, Lloyd’s corporate member; capital provider

ACE Leadenhall Limited

   United Kingdom    100%    UK, investment holding

ACE Underwriting Agencies Limited

   United Kingdom    100%    UK, Lloyd’s managing agency

ACE Trustees Limited

   United Kingdom    100%    UK, investment holding

ACE London Group Limited

   United Kingdom    100%    UK, investment holding

ACE Capital Limited

   United Kingdom    100%    UK, Lloyd’s corporate member

ACE Capital III Limited

   United Kingdom    100%    UK, Lloyd’s corporate member

ACE Capital IV Limited

   United Kingdom    100%    UK, Lloyd’s corporate member; capital provider

ACE London Holdings Limited

   United Kingdom    100%    UK, investment holding

ACE Capital II Limited

   United Kingdom    100%    UK, Lloyd’s corporate member

ACE London Investments Limited

   United Kingdom    100%    UK, investment holding

ACE London Aviation Limited

   United Kingdom    100%    UK, Lloyd’s managing agent

ACE London Underwriting Limited

   United Kingdom    100%    UK, Lloyd’s managing agent

ACE Underwriting Services Limited

   United Kingdom    100%    UK, Lloyd’s service company

AGM Underwriting Limited

   United Kingdom    100%    UK, dormant

ACE London Services Limited

   United Kingdom    100%    UK, service company

ACE Capital VI Limited

   United Kingdom    100%    UK, Lloyd’s corporate member

ACE UK Limited

   United Kingdom    77%    UK, investment holding

 

16

--------------------------------------------------------------------------------

Name

--------------------------------------------------------------------------------

  

Jurisdiction of
Organization

--------------------------------------------------------------------------------

  

Percentage

Ownership

--------------------------------------------------------------------------------

  

Jurisdictions in which

Authorized

and Type of Business

--------------------------------------------------------------------------------

ACE UK Holdings Limited

   United Kingdom    100%    UK, investment holding

ACE (MI) Limited

   United Kingdom    100%    UK, dormant

ACE (MS) Limited

   United Kingdom    100%    UK, dormant

ACE UK Underwriting Limited

   United Kingdom    100%    Lloyd’s managing agent

ACE (PM) Limited

   United Kingdom    100%    UK, investment holding

ACE UK Limited

   United Kingdom    23%    UK, investment holding

ACE Services Limited

   Cayman Islands    100%    Cayman Islands, general services

ACE Holdings (Gibraltar) Limited

   Gibraltar    100%    Gilbraltar, Bermuda permit, investment holding

ACE Gibraltar Limited

   Gibraltar    51%    Gilbraltar, insurance intermediary

ACE-ii Limited

   United Kingdom    100%    dormant, to become internet company

ACE-ii (Gibraltar) Limited

   Gibraltar    100%    dormant,

ACE Underwriting Services (Gibraltar) Limited

   Gibraltar    100%    dormant,

Arles Services Limited

   Gibraltar    100%    dormant,

CGA Group Limited

   Bermuda    18.20%    Bermuda investment holding

CGA Investment Management, Inc.

   USA (Delaware)    100%    USA, investment

Commercial Guaranty Assurance Ltd.

   Bermuda    100%    Bermuda, insurance

Oasis Insurance Services Ltd.

   Bermuda    100%    Bermuda, general services

ACE Tempest Life Reinsurance Ltd.

   Bermuda    100%    Bermuda, insurance, reinsurance, general and long term
(life, health, annuities)

ACE Tempest Reinsurance Ltd.

   Bermuda    100%    Bermuda, insurance/reinsurance, long term; Puerto Rico,
reinsurance

Oasis Investments Limited

   Bermuda    33%    Bermuda, investment holding

Oasis Investments 2 Ltd.

   Bermuda    33%    Bermuda, holding company

St. George Holdings Ltd

   Cayman Islands    10.71%    Cayman Islands, investment holding

 

17

--------------------------------------------------------------------------------

Name

--------------------------------------------------------------------------------

  

Jurisdiction of
Organization

--------------------------------------------------------------------------------

  

Percentage

Ownership

--------------------------------------------------------------------------------

  

Jurisdictions in which

Authorized

and Type of Business

--------------------------------------------------------------------------------

St. George Investments Ltd.

   Cayman Islands    100%    Cayman Islands, investment holding

ACE INA Holdings Inc.

   USA (Delaware)    20%    USA, investment holding

ACE Prime Holdings Inc.

   USA (Delaware)    100%    USA, investment holding

ACE INA Holdings Inc.

   USA (Delaware)    80%    USA, investment holding

ACE Seguros S.A.

   Argentina    99.35%    Argentina, Insurance

Huatai Insurance Company of China, Limited

   China   

6.129%

10% (ACE Tempest Reinsurance Ltd.)

6% (ACE US Holdings, Inc.)

   China, property and casualty insurer

ACE Seguradora S.A.

   Brazil   

99.9%

0.1% (ACE Prime Holdings Inc.)

   Brazil, insurance

Servicios ACE INA S.A. de C.V.

   Mexico   

99.99%

.00002% (ACE Prime Holdings Inc.)

   Mexico, service company

ACE Tempest Re USA, Inc.

   USA (Connecticut)    100%    CT, NJ, NY, OH, PA, SC, TX, reinsurance
intermediary manager

INA Corporation

   USA (Pennsylvania)    100%    USA, investment holding company

ACE INA Properties, Inc.

   USA (Delaware)    100%    USA, holding company

Conference Facilities, Inc.

   USA (Pennsylvania)    100%    USA, owns & operates corporate facilities

INA Tax Benefits Reporting, Inc.

   USA (Delaware)    100%    USA, tax info & 3rd party reporting

INA Financial Corporation

   USA (Delaware)    100%    USA, investment holding

Brandywine Holdings Corporation

   USA (Delaware)    100%   

USA, holding company

 

18

--------------------------------------------------------------------------------

Name

--------------------------------------------------------------------------------

  

Jurisdiction of
Organization

--------------------------------------------------------------------------------

  

Percentage

Ownership

--------------------------------------------------------------------------------

  

Jurisdictions in which

Authorized

and Type of Business

--------------------------------------------------------------------------------

Brandywine Run-Off Services, Inc.

   USA (Delaware)    100%    USA, management company for 1792

Assurex Development Corporation

   USA (Ohio)    11.011%    USA, provides loans to insurance agents

Cravens, Dargan & Company, Pacific Coast

   USA (Delaware)    100%    USA, managing general agency

Cravens, Dargan & Company, Pacific Coast of Illinois, Inc.

   USA (Illinois)    100%    USA, managing general agency

Century Indemnity Company

(EI# 05-6105395, NAIC #20710, PA)

   USA (Pennsylvania)    100%    USA, insurance

Century Reinsurance Company

(EI# 06-0988117, NAIC #35130, PA)

   USA (Pennsylvania)    100%    USA, reinsurance

ACE American Reinsurance Company

(EI# 23-1740414, NAIC#22705, PA)

   USA (Pennsylvania)    100%    USA, reinsurance

Brandywine Reinsurance Company S.A.-N.V.

   Belgium    100%    Belgium, reinsurance

The 1792 Company

   USA (Delaware)    100%    USA, (former underwriting member of New York
Insurance Exchange)

Century International Reinsurance Company Ltd.

   Bermuda    100%    Bermuda, insurance & reinsurance

INA Holdings Corporation

   USA (Delaware)    100%    USA, holding company

INATrust, fsb

   Chartered by Office of Thrift Supervision    100%    USA, savings bank

INA Reinsurance Company, Ltd.

   Bermuda    100%    Bermuda, reinsurance

ACE INA Financial Institution Solutions, Inc.

   USA (Delaware)    100%   

USA, floodplain determination &

other services to financial institutions

American Lenders Facilities, Inc.

   USA (California)    100%    USA, collection & loan servicing for third
parties

ESIS, Inc.

   USA (Pennsylvania)    100%   

USA, markets risk management

Programs

 

19

--------------------------------------------------------------------------------

Name

--------------------------------------------------------------------------------

  

Jurisdiction of

Organization

--------------------------------------------------------------------------------

  

Percentage

Ownership

--------------------------------------------------------------------------------

  

Jurisdictions in which
Authorized

and Type of Business

--------------------------------------------------------------------------------

NewMarkets Insurance Agency, Inc.

   USA (Delaware)    100%    USA, managing general agency

ACE INA Excess and Surplus Insurance Services, Inc.

   USA (Georgia)    100%    USA, excess & surplus lines broker

ACE INA Excess and Surplus Insurance Services, Inc.

   USA (Pennsylvania)    100%    USA, excess & surplus lines broker

ACE INA Excess and Surplus Insurance Services, Inc.

   USA (California)    100%    USA, excess & surplus lines broker

ACE INA Excess and Surplus Insurance Services, Inc.

   USA (Illinois)    100%    USA, excess & surplus lines broker

Excess and Surplus Insurance Services, Inc.

   USA (Texas)    100%    USA, managing general agency

ACE Financial Solutions, Inc.

   USA (Delaware)    100%    USA, premium finance company

Oasis US Inc.

   USA (Delaware)    100%    USA, general services

ACE Risk Solutions, Inc.

   USA (NewYork)    100%    USA, reinsurance intermediary

Indemnity Insurance Company of North America (EI# 06-1016108, NAIC #43575, PA)

   USA (Pennsylvania)    100%    USA, Puerto Rico, USVI, insurance

ACE Indemnity Insurance Company (EI#92-0040526, NAIC #10030, PA)

   USA (Pennsylvania)    100%    USA, insurance

Allied Insurance Company (EI# 23-2021364, NAIC #36528, CA)

   USA (California)    100%    USA, insurance

ACE American Insurance Company (EI#95-2371728, NAIC# 22667, PA)

   USA (Pennsylvania)    100%   

USA, Korea, Puerto Rico USVI,

Guam, Bermuda permit,

Taiwan (life), insurance

Pacific Employers Insurance Company (EI#95-1077060, NAIC# 22748, PA)

   USA (Pennsylvania)    100%    USA, USVI, insurance

ACE Insurance Company of Texas (EI# 74-1480965, NAIC #22721, 22920, TX)

   USA (Texas)    100%    USA, insurance

 

20

--------------------------------------------------------------------------------

Name

--------------------------------------------------------------------------------

  

Jurisdiction of

Organization

--------------------------------------------------------------------------------

  

Percentage

Ownership

--------------------------------------------------------------------------------

  

Jurisdictions in which
Authorized

and Type of Business

--------------------------------------------------------------------------------

Illinois Union Insurance Company (EI# 36-2759195, NAIC #27960, IL)

   USA (Illinois)    100%    USA, surplus lines insurer

Rain and Hail Insurance Service Incorporated

   USA (Iowa)    20%     

INAMAR Insurance Underwriting Agency, Inc.

   USA (New Jersey)    100%    USA, insurance agency

INAMAR Insurance Underwriting Agency, Inc. of Massachusetts

   USA (Massachusetts)    100%    USA, general agency

INAMAR Insurance Underwriting Agency, Inc. of Texas

   USA (Texas)    100%    USA, general agency

INAMAR Insurance Underwriting Agency, Inc. of Ohio

   USA (Ohio)    100%    USA, general agency

Insurance Company of North America (EI# 23-0723970, NAIC #22713, PA)

   USA (Pennsylvania)    100%   

USA, Guam, Northern Mariana

Islands, Philippines, Puerto Rico,

Taiwan (p/c), insurance

Bankers Standard Insurance Company (EI# 75-1320184, NAIC #18279, PA)

   USA (Pennsylvania)    100%    USA, insurance

Bankers Standard Fire and Marine Company (EI#75-6014863, NAIC #20591, PA)

   USA (Pennsylvania)    100%    USA, insurance

ACE Property and Casualty Insurance Company (EI# 06-0237820, NAIC, #20699, PA)

   USA (Pennsylvania)    100%    USA, Puerto Rico, insurance

ACE Employers Insurance Company (EI# 23-2137343, NAIC #38741, PA)

   USA (Pennsylvania)    100%    USA, insurance

ACE Insurance Company of Ohio (EI#23-1859893, NAIC #22764, OH)

   USA (Ohio)    100%    USA, insurance

INA Surplus Insurance Company (EI# 52-1208598, NAIC #42072, PA)

   USA (Pennsylvania)    100%    USA, reinsurance

ACE Fire Underwriters Insurance Company (EI# 06-6032187, NAIC #20702, PA)

   USA (Pennsylvania)    100%    USA, insurance

 

21

--------------------------------------------------------------------------------

Name

--------------------------------------------------------------------------------

  

Jurisdiction of

Organization

--------------------------------------------------------------------------------

  

Percentage

Ownership

--------------------------------------------------------------------------------

  

Jurisdictions in which
Authorized

and Type of Business

--------------------------------------------------------------------------------

Atlantic Employers Insurance Company (EI# 23-2173820, NAIC #38938, NJ)

   USA (New Jersey)    100%    USA, insurance

Cover-All Technologies, Inc.

   USA (Delaware)    7.41%    USA, develop software products for insurance
industry

ALIC, Incorporated

   USA (Texas)    100%   

USA, general agency &

attorney-in-fact for ACE Lloyds

ACE American Lloyds Insurance Company (Sponsored Lloyds Association) (EI#
75-1365570, NAIC #18511, TX)

   USA (Texas)    100%    USA, Lloyds Association

ACE Insurance Company of Illinois (EI# 36-2709121, NAIC #22691, IL)

   USA (Illinois)    100%    USA, insurance

ACE Insurance Company of the Midwest (EI# 06-0884361, NAIC #26417, IN)

   USA (Indiana)    100%    USA, insurance

ATR USA, LLC

   USA (Connecticut)    100%    USA, reinsurance intermediary manager

ACE Structured Products, Inc. (formerly INAPRO, Inc.)

   USA (Delaware)    100%    USA, insurance management services & underwriting

Recovery Services International, Inc.

   USA (Delaware)    100%   

USA, subrogation, collection &

recovery services

RSI Health Care Recovery, Inc.

   USA (Delaware)    100%   

USA, subrogation, collection &

recovery services

ACE INA International Holdings, Ltd.

   USA (Delaware)    100%   

USA, international insurance &

financial holding company

ACE Insurance S.A.

   Macau    99.94%    Macau, insurance

ACE CIIC Holdings Limited

   Cayman Islands    100%    Cayman Islands, holding company

ACE CIIC Insurance Company Egypt S.A.E.

   Egypt    51%    Egypt, insurance

 

22

--------------------------------------------------------------------------------

Name

--------------------------------------------------------------------------------

  

Jurisdiction of

Organization

--------------------------------------------------------------------------------

  

Percentage

Ownership

--------------------------------------------------------------------------------

  

Jurisdictions in which
Authorized

and Type of Business

--------------------------------------------------------------------------------

ACE European Holdings Limited

   United Kingdom    100%    United Kingdom, holding company

ACE Life Insurance Company S.A.E.

   Egypt    99%    Egypt, life insurance

ACE Synergy Insurance Berhad

   Malaysia    51%    Malaysia, insurance

ACE Insurance S.A.-N.V.

   Belgium   

.0523%

99.9477% (ACE INA Overseas Holdings, Inc.)

  

Europe,

insurance/reinsurance

ACE Seguros S.A.

   Chile   

78.104% (AIIH)

12.235% (AFIA Finance Corporation, Agencia en Chile)

9.095% - (AFIA Finance Corp. Chile Limitada)

   Chile, insurance

ACE Seguros S.A.

   Colombia    99.958%    Colombia, insurance

ACE Seguros S.A.

   Ecuador    100%    Ecuador, insurance

ACE Seguros S.A.

   Mexico    99.9%    Mexico, insurance/assumed reinsurance

Brandywine Reinsurance Co. (UK) Ltd

   United Kingdom    100%    UK, reinsurance

ACE INA UK Limited

   United Kingdom    100%    UK, Greece, insurance

Eksupsiri Company Limited

   Thailand   

49%

50.99% (Nam Ek)

   Thailand, holding company

ACE Life Assurance Co. Ltd.

   Thailand   

75%

25% (Oriental)

   Thailand, life insurance

Nam Ek Company Limited

   Thailand    49%    Thailand, holding company

Chilena Consolidata Seguros Generales, S.A.

   Chile    .65%    Chile, insurance

ACE Insurance Limited

   South Africa    100%    South Africa, insurance

ACE Insurance Limited

   New Zealand    100%    New Zealand, insurance/reinsurance

ACE International Management Corporation

   Pennsylvania    100%    Management Services

Cover Direct, Inc.

   USA (Delaware)    100%   

Japan, direct marketing service

Company

 

23

--------------------------------------------------------------------------------

Name

--------------------------------------------------------------------------------

  

Jurisdiction of

Organization

--------------------------------------------------------------------------------

  

Percentage

Ownership

--------------------------------------------------------------------------------

  

Jurisdictions in which
Authorized

and Type of Business

--------------------------------------------------------------------------------

Victoria Hall Company Limited

   Bermuda    20%    Bermuda, investment holding

ACE INA G.B. Holdings, Ltd

   USA (Delaware)    100%    Delaware, UK, insurance holding

ACE INA Services U.K. Limited

   United Kingdom    100%    UK, computer services for affiliates

INACAP Sociedad Anonima

   Nicaragua    100%    Nicaragua, holding company

INACAP Reaseguros, Sociedad Anonima

   Nicaragua    100%    Nicaragua, reinsurance broker

Century Inversiones, S.A.

   Panama    100%    Panama, reinsurance administrator

Arabia ACE Insurance Company Limited E.C.

   Bahrain    25%    Saudi Arabia, insurance & reinsurance

ACE Insurance Limited

   Australia    100%    Australia, Pakistan, Thailand, Solomon Islands, Vanuatu,
insurance & reinsurance

ACE INA Superannuation Pty. Limited

   Australia    100%    Australia, corporate trustee for ACE Australia
superannuation plan

ACE Insurance Limited

   Pakistan    100%    Pakistan, insurance

ACE INA Overseas Insurance Company Ltd.

   Bermuda    100%    Bermuda, insurance/reinsurance, general and long term

ACE Insurance Limited

   Singapore    100%    Singapore, insurance

ACE Insurance

   Japan    100%    Japan, insurance/reinsurance

ACE Songai Service Kabushikigaisha

   Japan    100%    Japanese service company

ACE INA Marketing Group C.A.

   Venezuela    100%    Venezuela, services & direct marketing

ACE INA Overseas Holdings, Inc.

   USA (Delaware)    100%    Delaware, holding company

INACAN Holdings, Ltd.

   Canada    100%    Canada, insurance holding

ACE INA Insurance

   Canada    100%    Canada, insurance & reinsurance

 

24

--------------------------------------------------------------------------------

Name

--------------------------------------------------------------------------------

  

Jurisdiction of

Organization

--------------------------------------------------------------------------------

  

Percentage

Ownership

--------------------------------------------------------------------------------

 

Jurisdictions in which
Authorized

and Type of Business

--------------------------------------------------------------------------------

ACE INA Life Insurance

   Canada    100%   Canada, life insurance

ACE Insurance S.A.-N.V.

   Belgium    99.9477%
.0523% (AIIH)   Europe, insurance/reinsurance

ACE Insurance Company

(EI# 66-0437305, NAIC #30953, PR)

   Puerto Rico    100%   Puerto Rico, insurance

ACE Insurance Agency, Inc.

   Puerto Rico    100%   Puerto Rico, general agent for ACE American Insurance
Company

ACE Insurance Limited

   Hong Kong    100%   Hong Kong, insurance

ACE Risk Management International Ltd. (formerly ACE INA Bermuda Insurance
Managers Ltd.)

   Bermuda    100%  

Bermuda, management services for

non-affiliates

DELPANAMA S.A.

   Panama    100%   Panama, holding company

INAMEX S.A.

   Mexico    100%   Mexico, reinsurance broker

Maritime General Ins. Company Ltd

   Trinidad    8.06%   Trinidad insurance

Oriental Equity Holdings Limited

   British Virgin Islands    100%   BVI, holding company

ACE Life Assurance Co. Ltd.

   Thailand    25%
75% (Eksupsiri)   Thailand, life insurance

AFIA Finance Corporation

   USA (Delaware)    100%   Delaware, insurance holding

AFIA Venezolana C.A.

   Venezuela    100%   Venezuela, inactive claims & settling agent

ACE ICNA Italy Societa a Responsabilita Limitata

   Italy    99.7%
0.3% (AIIH)   Italy, legal representative for CIGNA Insurance Company of Europe,
S.A.-N.V.

Siam Liberty Company Limited

   Thailand    49% (AFC)
45% (Nam EK)   Thailand, broker, surveyor & claims settling agency

ACE Servicios, S.A.

   Argentina    100%   Argentina, service company

AFIA Finance Corp. Chile Limitada

   Chile    98%
2% (AIIH)   Chile, claims & settling agent

Fire, Equity and General Insurance Company Limited

   Nigeria    6.25%   Nigeria, insurance

Inversiones Continental S.A. de C.V.

   Honduras    1.29%   Honduras, insurance holding

 

25

--------------------------------------------------------------------------------

Name

--------------------------------------------------------------------------------

  

Jurisdiction of
Organization

--------------------------------------------------------------------------------

  

Percentage
Ownership

--------------------------------------------------------------------------------

  

Jurisdictions in which

Authorized

and Type of Business

--------------------------------------------------------------------------------

PT. ACE INA Insurance

   Indonesia    80%    Indonesia, insurance

PT. Adi Citra Mandiri

   Indonesia    45%    Indonesia, service company

RIYAD Insurance Co. Ltd.

   Bermuda    80%    Bermuda, insurance

Safire Private Ltd.

   Singapore    100%    Singapore, management & computer service bureau

AFIA (INA) Corporation, Limited

   USA (Delaware)    100%    Delaware, holding company

AFIA

  

Unincorporated

Association

   60%    Association for international insurance

AFIA (ACE) Corporation, Limited

   USA (Delaware)    100%    Delaware, holding company

AFIA

  

Unincorporated

Association

   40%    Association for international insurance

Compania Anonima de Seguros “AVILA”

   Venezuela    0.6%    Venezuela, insurance

INAVEN, C.A. “Venezuela”

   Venezuela    100%    Venezuela, corporation

La Positiva Compania Nacional de Seguros Sociedad Anonima

   Peru    7.6869%    Peru, insurance

Reaseguradora Nuevo Mundo S.A.

   Panama    3.7246%    Panama, reinsurance

Amazones Compania Anonima de Seguros

   Ecuador    1.423%    Ecuador, insurance

ACE US Holdings, Inc.

   USA (Delaware)    100%    USA, investment holding

ACE Financial Services International, Inc.

(f/k/a ACE Financial Solutions International, Inc.)

   USA (Delaware)    100%    USA, investment holding

ACE USA, Inc.

   USA (Delaware)    100%    USA, investment holding

ASI Administrative Services Inc. (formerly ASI Administrative Services Holdings
Inc. and CRC Creditor Resources Canada Ltd.)

   Canada (Yukon)    100%    Canada, warranties business

Industrial Underwriters Insurance Company

(EI# 75-6015738, NAIC# 21075, TX)

   USA (Texas)    100%    USA, insurance

Rhea International Marketing (L), Inc.

   Malaysia    60%    Malaysia, general services

Westchester Fire Insurance Company

(EI# 13-5481330, NAIC# 21121, NY)

  

USA

(New York)

   100%    USA, Bermuda permit, insurance

Westchester Surplus Lines Insurance Company

(EI# 58-2139927, NAIC #10172, GA)

   USA (Georgia)    100%    USA, insurance

Westchester Specialty Services, Inc.

   USA (Florida)    100%    USA, warranties

 

26

--------------------------------------------------------------------------------

Name

--------------------------------------------------------------------------------

  

Jurisdiction of
Organization

--------------------------------------------------------------------------------

  

Percentage
Ownership

--------------------------------------------------------------------------------

  

Jurisdictions in which

Authorized

and Type of Business

--------------------------------------------------------------------------------

Westchester Specialty Insurance Services, Inc.

   USA (Nevada)    100%    USA, insurance services, brokering, warranties

WDH Corporation

   USA (Ohio)    80%    USA, insurance services

Dimension Service Corporation

   USA (Ohio)    80%    USA, warranties

Dimension Holdings Inc.

   USA (Ohio)    80%    USA, insurance services

ACE Financial Services Inc. (f/k/a Capital Re Corporation)

   USA (Delaware)    100%    Delaware, insurance holding company

Capital RE LLC

   Turks & Caicos    100%    Turks & Caicos, holding company

ACE (CR) Holdings

   United Kingdom    100%    UK, holding co

ACE Capital VII Limited

   United Kingdom    100%    UK, Lloyd’s capital vehicle

ACE (RGB) Holdings Limited

   United Kingdom    100%    UK, holding company

ACE (CIDR) Limited

   United Kingdom    100%    UK, Lloyd’s agency

Global Life Services Limited

   United Kingdom    100%    UK, Lloyd’s agency

Ridge Underwriting Agencies Limited

   United Kingdom    100%    UK, Lloyd’s agency

ACE Asset Management Inc.

   Delaware    100%    DE, Bermuda permit corporation

ACE (Barbados) Holdings Limited

   Barbados    100%    Barbados, holding company

 

27

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SCHEDULE 5.02(A)

 

LIENS

 

1. Lien arising under a Subordination Agreement dated as of October 27, 1998
among ACE US Holdings, Inc., ACE Limited and The Chase Manhattan Bank
encumbering ACE US Holdings, Inc.’s rights under the Subordinated Loan Agreement
dated as of October 27, 1998 among ACE US Holdings, Inc., ACE Bermuda Insurance
Ltd. and United States Trust Company of New York, as trustee under the Indenture
dated October 27, 1998 of ACE US Holdings, Inc.

 

2. Liens securing the Fourth Amendment and Restatement of Letter of Credit
Facility Agreement dated November 14, 2003 among ACE Limited, ACE Bermuda
Insurance Ltd., certain other financial institutions and Citibank International
plc, as Agent and Security Trustee.

 

--------------------------------------------------------------------------------

EXHIBIT A

 

FORM OF ASSIGNMENT AND ACCEPTANCE

 

ASSIGNMENT AND ACCEPTANCE dated as of                 , 20          between
                                     (the “Assignor”) and
                                     (the “Assignee”), and [consented to and]
accepted by Wachovia Bank, National Association, as administrative agent (the
“Administrative Agent”)[, and ACE Limited (the “Parent”)].

 

W I T N E S S E T H

 

WHEREAS, this Assignment and Acceptance (the “Agreement”) relates to the
Reimbursement Agreement dated as of September 22, 2004 among the Parent and
other Account Parties party thereto, the Assignor and the other Banks party
thereto, the Syndication Agent party thereto and the Administrative Agent,
providing for a $850,000,000 unsecured letter of credit facility for the benefit
of the Account Parties (as amended or otherwise modified from time to time, the
“Reimbursement Agreement”);

 

WHEREAS, as provided under the Reimbursement Agreement, the Assignor has a
commitment to participate in Letters of Credit and make Letter of Credit
Advances to the Account Parties in an aggregate principal amount at any time
outstanding not to exceed $                ;

 

WHEREAS, Letters of Credit with a total amount available for drawing thereunder
of $                 are outstanding at the date hereof;

 

WHEREAS, Letter of Credit Advances made to the Account Parties by the Assignor
under the Reimbursement Agreement in the aggregate principal amount of
$                 are outstanding at the date hereof; and

 

WHEREAS, the Assignor proposes to assign to the Assignee all of the rights of
the Assignor under the Reimbursement Agreement and the other Loan Documents in
respect of a portion of its LC Commitment Amount thereunder in an amount equal
to $                 (the “Assigned Amount”), together with a corresponding
portion of its outstanding Letter of Credit Participating Interest, Letter of
Credit Participating Interest Commitment, LC Participation Obligations, Letter
of Credit Exposure, and Letter of Credit Advances, if any, and the Assignee
proposes to accept assignment of such rights and assume the corresponding
obligations from the Assignor on such terms.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:

 

1. Definitions. All capitalized terms not otherwise defined herein shall have
the respective meanings set forth in the Reimbursement Agreement.

 

--------------------------------------------------------------------------------

2. Assignment. The Assignor hereby assigns and sells to the Assignee all of the
rights of the Assignor under the Reimbursement Agreement and the other Loan
Documents to the extent of the Assigned Amount, and the Assignee hereby accepts
such assignment from the Assignor and assumes all of the obligations of the
Assignor under the Reimbursement Agreement to the extent of the Assigned Amount,
including the outstanding Letter of Credit Participating Interest Commitment and
Letter of Credit Exposure, and the amount of the Letter of Credit Advances, if
any, outstanding at the date hereof. Upon the execution and delivery hereof by
the Assignor, the Assignee[, the Administrative Agent and the Parent] and the
payment of the amounts specified in Section 3 required to be paid on the date
hereof (i) the Assignee shall, as of the date hereof, succeed to the rights and
be obligated to perform the obligations of a Bank under the Reimbursement
Agreement with an LC Commitment Amount (in addition to any LC Commitment Amount
theretofore held by it) equal to the Assigned Amount, and (ii) the LC Commitment
Amount of the Assignor shall, as of the date hereof, be reduced by a like amount
and the Assignor shall be released from its obligations under the Reimbursement
Agreement to the extent such obligations have been assumed by the Assignee. The
assignment provided for herein shall be without recourse to the Assignor.

 

3. Payments. As consideration for the assignment and sale contemplated in
Section 2 hereof, the Assignee shall pay to the Assignor on the date hereof the
amount heretofore agreed between them.1 It is understood that commitment and
Letter of Credit fees accrued to the date hereof in respect of the Assigned
Amount are for the account of the Assignor and such fees accruing from and
including the date hereof are for the account of the Assignee. Each of the
Assignor and the Assignee hereby agrees that if it receives any amount under the
Reimbursement Agreement which is for the account of the other party hereto, it
shall receive the same for the account of such other party to the extent of such
other party’s interest therein and shall promptly pay the same to such other
party.

 

4. [Consent of the Administrative Agent and the Parent. Pursuant to the
Reimbursement Agreement, this Agreement is conditioned upon the consent of the
Administrative Agent and, so long as no Default has occurred and is continuing,
the Parent. The execution of this Agreement by the Administrative Agent and, if
applicable, the Parent is evidence of this consent.]

 

5. Non-Reliance on Assignor. The Assignor makes no representation or warranty in
connection with, and shall have no responsibility with respect to, the solvency,
financial condition or statements of the Account Parties or any of their
respective Subsidiaries, or the validity and enforceability of the obligations
of the Account Parties or any of their respective Subsidiaries in respect of any
Loan Document. The Assignee acknowledges that it has, independently and without
reliance on the Assignor, and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement and will continue to be responsible for making its own independent
appraisal of the business, affairs and financial condition of the Account
Parties and their respective Subsidiaries.

--------------------------------------------------------------------------------

1 Amount should combine the principal amount of any Letter of Credit Advances
made by the Assignor together with accrued interest and breakage compensation,
if any, to be paid by the Assignee, net of any portion of any upfront fee to be
paid by the Assignor to the Assignee. It may be preferable in an appropriate
case to specify these amounts generically or by formula rather than as a fixed
sum.

 

--------------------------------------------------------------------------------

6. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

 

7. Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

 

[Remainder of page intentionally left blank.]

 

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered by their duly authorized officers as of the date first above written.

 

[ASSIGNOR]     By:        

Title: 

        [ASSIGNEE]     By:        

Title: 

        [ACE LIMITED]     By:        

Title: 

        WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent     By:    
   

Title: 

      ]

 

--------------------------------------------------------------------------------

EXHIBIT C

 

FORM OF LETTER REGARDING EXISTING LETTERS OF CREDIT

 

September 22, 2004

 

Ladies and Gentlemen:

 

Please refer to the unsecured Reimbursement Agreement, dated as of September 22,
2004, among ACE Limited (“ACE Limited”), ACE Bermuda Insurance Ltd., ACE Tempest
Life Reinsurance Ltd. and ACE Tempest Reinsurance Ltd., as Account Parties, the
Banks party thereto, and Wachovia Bank, National Association, as an Issuing Bank
and as Administrative Agent (the “Reimbursement Agreement”). Terms defined in
the Reimbursement Agreement are, unless otherwise defined herein or the context
otherwise requires, used herein as defined therein.

 

The Trustees confirm that upon the effectiveness of the Reimbursement Agreement,
(a) the Insurance and Reinsurance Letters of Credit Agreement, dated as of
November 20, 2003, issued by Barclays relating to the Lloyd’s Dollar Trust Funds
of Syndicate 2488 (the “Existing Agreement”) shall terminate and be of no
further force or effect (except that any provision of the Existing Agreement
that by its terms survives termination thereof shall remain in full force and
effect); and (b) each outstanding letter of credit issued for the account of the
Trustees under the Existing Agreement shall be deemed to have been issued, and
to be outstanding, for the joint account of the Trustees and ACE Limited under
the Reimbursement Agreement (and shall constitute a “Letter of Credit” under and
as defined therein).

 

Very truly yours,

 

for and on behalf of

Trustees of the Lloyd’s Dollar Trust Funds of Syndicate 2488