IMPOSED OR REQUIRED BY APPLICABLE
INSURANCE LAWS OR REGULATIONS AGAINST THE ASSETS OF ANY REGULATED INSURANCE
COMPANY, IN EACH CASE IN FAVOR OF POLICYHOLDERS OF SUCH REGULATED INSURANCE
COMPANY OR AN APPLICABLE INSURANCE REGULATORY AUTHORITY AND IN THE ORDINARY
COURSE OF SUCH REGULATED INSURANCE COMPANY'S BUSINESS; AND
(G)
LIENS (A) ON ASSETS OF VARIABLE INTEREST
ENTITIES GRANTED IN CONNECTION WITH THE PURCHASES OF EQUITY ISSUED IN CONNECTION
WITH, AND THE WAREHOUSING OF ASSETS FOR, COLLATERALIZED DEBT OBLIGATION
TRANSACTIONS STRUCTURED AND MANAGED BY A VARIABLE INTEREST ENTITY IN THE
ORDINARY COURSE OF BUSINESS OF SUCH VARIABLE INTEREST ENTITIES AND (B) ON CASH
AND CASH EQUIVALENTS SECURING SWAP AGREEMENTS ENTERED INTO FOR BONA FIDE RISK
MANAGEMENT PURPOSES AND NOT FOR SPECULATION;
(H)
LIENS ON INVESTMENTS AND CASH BALANCES OF
ANY REGULATED INSURANCE COMPANY SECURING OBLIGATIONS OF SUCH REGULATED INSURANCE
COMPANY IN RESPECT OF TRUST ARRANGEMENTS FORMED IN THE ORDINARY COURSE OF
BUSINESS FOR THE BENEFIT OF CEDENTS TO SECURE REINSURANCE RECOVERABLES OWED TO
THEM BY SUCH REGULATED INSURANCE COMPANY;
(I)
LIENS ON INVESTMENTS AND CASH BALANCES
OF ANY CREDIT DEFAULT SWAP ENTITY OR REGULATED INSURANCE COMPANY TO SECURE
OBLIGATIONS UNDER OR IN RESPECT OF CREDIT DEFAULT SWAPS, PROVIDED THAT IN THE
CASE OF ANY SUCH CREDIT DEFAULT SWAP ENTITY, SUCH INVESTMENTS AND CASH BALANCES
HAVE BEEN PROVIDED BY A REGULATED INSURANCE COMPANY SUPPORTING ITS OBLIGATIONS
UNDER SUCH CREDIT DEFAULT SWAPS;
(J)
LIENS AT THE BORROWER ON INVESTMENTS AND
CASH BALANCES, IN AN AGGREGATE VALUE AT ANY TIME OF NOT MORE THAN $50,000,000,
SECURING CREDIT DEFAULT SWAPS; AND
(K)
LIENS NOT OTHERWISE PERMITTED BY THE
FOREGOING CLAUSES OF THIS SECTION 6.02 SECURING INDEBTEDNESS IN AN AGGREGATE
PRINCIPAL OR FACE AMOUNT AT ANY DATE NOT TO EXCEED 5% OF TANGIBLE NET WORTH.
51
SECTION 6.03.
Fundamental Changes; Sales of Assets. (a)
The Borrower will not,
and will not permit any Subsidiary to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
sell, transfer, lease or otherwise dispose of (in one transaction or in a series
of transactions) all or substantially all of its assets or any of the capital
stock of ACA Financial Guaranty Corporation, or liquidate or dissolve, except
that, if at the time thereof and immediately after giving effect thereto no
Event of Default shall have occurred and be continuing,
(I)
THE BORROWER MAY MERGE INTO OR
CONSOLIDATE WITH ANY OTHER PERSON AND ANY OTHER PERSON MAY MERGE INTO OR
CONSOLIDATE WITH THE BORROWER AND THE BORROWER MAY SELL, TRANSFER, LEASE OR
OTHERWISE DISPOSE OF (IN ONE TRANSACTION OR IN A SERIES OF TRANSACTIONS) ALL OR
SUBSTANTIALLY ALL OF ITS ASSETS TO ANY PERSON, SO LONG AS (A) THE SURVIVING
ENTITY OF SUCH TRANSACTION IS THE BORROWER AND (B) IMMEDIATELY AFTER GIVING
EFFECT THERETO NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING,
(II)
ANY SUBSIDIARY MAY MERGE INTO THE BORROWER
IN A TRANSACTION IN WHICH THE BORROWER IS THE SURVIVING CORPORATION,
(III)
ANY SUBSIDIARY MAY MERGE INTO