THIRD AMENDMENT TO REIMBURSEMENT AGREEMENT
This Amendment, dated as of September 1, 2000, amends the
Reimbursement Agreement, dated as of September 8, 1999, and amended as of
November 30, 1999 and as of March 15, 2000, among ACE Limited ("Parent"),
ACE Bermuda Insurance Ltd. ("ACE Bermuda"), Tempest Reinsurance Company
Limited ("Tempest"), the Banks party thereto, Deutsche Bank AG, New York
and/or Cayman Islands Branches and Fleet National Bank, as Documentation
Agents, and Mellon Bank, N.A., as Issuing Bank and Administrative Agent
(the "Agreement").
Parent, the Issuing Bank and the Required Banks (as defined in the
Agreement) hereby agree that the Agreement shall be amended as follows:
1. The definition of the term "Adjusted Consolidated Debt" appearing
in Section 1.01 of the Agreement is hereby amended by deleting clause (ii)
in its entirety and replacing it as follows: "(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 Securities).
2. Section 1.01 of the Agreement is hereby amended by deleting the
definition of the term "Consolidated Tangible Net Worth" appearing therein
and inserting in lieu thereof the following definition:
"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.
3. Each of the definitions of the respective terms "Debenture" and
"Special Purpose Trust" appearing in Section 1.01 of the Agreement is
hereby amended by inserting therein, immediately prior to the period at the
end thereof, the phrase "and common securities of such Special Purpose
Trust".
4. The definition of the term "Debt" appearing in Section 1.01 of
the Agreement is hereby amended by inserting, immediately after the phrase "any
Equity Interests" appearing therein, the parenthetical phrase "(except for
obligations to pay for Equity Interests within customary settlement periods)".
5. The definition of the term "Equity Issuance" appearing in
Section 1.01 of the Agreement shall be deleted in its entirety.
6. The definition of the term "Mandatorily Convertible Preferred
Securities" appearing in Section 1.01 of the Agreement is hereby amended by
deleting the definition in its entirety and replacing it as follows:
"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 (including "Feline Prides(TM)",
"Rhinos(TM)" or any substantially similar securities).
7. The definition of the term "Net Cash Proceeds" appearing in
Section 1.01 of the Agreement shall be deleted in its entirety.
8. The definition of the term "Responsible Officer" appearing in
Section 1.01 of the Agreement is hereby amended by inserting after the term
"Chief Financial Officer," and before the term "Treasurer" the term "Chief
Accounting Officer".
9. Section 1.01 of the Agreement is hereby amended by inserting the
following definition: "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.
10. The definition of the term "Total Capitalization" appearing in
Section 1.01 of the Agreement is hereby amended by inserting therein,
immediately after the phrase "Preferred Securities" appearing therein, the
parenthetical phrase "(including Mandatorily Convertible Preferred
Securities)".
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11. Section 2.02(g) of the Agreement is hereby amended by deleting
the phrase "prior to the tenth Business Day of each month" appearing
therein and inserting in lieu thereof the phrase "prior to the tenth
Business Day of each calendar quarter", by deleting the phrase "during the
preceding month" appearing therein and inserting in lieu thereof the phrase
"during the preceding calendar quarter" and by deleting the phrase "during
such month" appearing therein and inserting in lieu thereof the phrase
"during such calendar quarter".
12. Section 4.01(j) of the Agreement is hereby amended by deleting
the provision in its entirety and replacing it with the following: "(j)
Margin Stock will constitute 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."
13. To correct a typographical error in the Agreement, the last
sentence of Section 2.11(a) of the Agreement is hereby amended by changing
the words "this subsection (b)" to "this subsection (a)" and by changing
the words "in subsection (c)" to "in subsection (b)".
14. Section 5.01(i) of the Agreement is hereby amended by inserting
after the phrase "applying to" and before the phrase "companies generally" the
following: "insurance".
15. Section 5.02(d) of the Agreement is hereby amended by deleting
it in its entirety and replacing it with the following: "(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)." To reflect the amendment
made in the foregoing sentence, Section 5.02(c)(iii) of the Agreement is
hereby amended to delete the words "(other than clause (ii) thereof)",
which words referred to former clause (ii) of Section 5.02(d).
16. Section 5.02(a) of the Agreement is hereby further amended by
deleting, in clause (ix) thereof, the phrase "10% of Consolidated Tangible
Net Worth" and inserting in lieu thereof the phrase "5% of Consolidated Net
Worth".
17. Section 5.04 of the Agreement is hereby amended by deleting
paragraphs (a) and (b) appearing therein and inserting in lieu thereof the
following:
(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.
(b) Consolidated Net Worth. Maintain at all times Consolidated
Net Worth in an amount equal to the sum of (i) $3,600,000,000 plus (ii)
25% of Consolidated Net Income for each fiscal quarter of the
Parent ending on or after March 31, 2000 for which such Consolidated Net
Income is positive.
18. Section 6.01(e) of the Agreement shall be amended by deleting
the term "Subsidiaries" each time it is used therein and replacing it with
the term "Significant Subsidiaries" and by deleting the term "Subsidiary"
each time it is used therein and replacing it with the term "Significant
Subsidiary".
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19. The entire Agreement shall be amended by deleting the word "the"
each time it appears before the phrase "Special Purpose Trust" and
replacing it with the word "a" or "such" as the context requires.
20. The definition of the term "Base Rate" in Section 1.01 of the
Agreement is hereby amended by inserting at the end thereof the words "or,
if higher on the day in question, 1/2 of 1% above the Federal Funds Rate".
This Amendment shall become effective with respect to the
Agreement on the date on which the Administrative Agent has received
counterparts hereof (by facsimile or otherwise) signed by the Parent, the
Issuing Bank and the Required Banks, except that the last sentence of the
next succeeding paragraph hereof shall become effective upon execution of
counterparts hereof by all of the Banks listed on the signature pages of
this Amendment. Except as amended hereby, the Agreement shall remain in
full force and effect and is hereby ratified and confirmed in all respects.
As contemplated by Section 2.17 of the Agreement, the Parent
has requested the Banks to consent to the extension of the Expiration Date
under the Agreement from September 6, 2000 to September 5, 2001. Each of
the Banks other than Societe Generale has indicated its consent to such
extension. As contemplated by Section 2.17 of the Agreement, the Parent has
designated Royal Bank of Canada as a Replacement Bank for Societe Generale
and, accordingly, upon execution of this Amendment by Royal Bank of Canada,
Royal Bank of Canada shall become a Bank party to the Agreement for all
purposes of the Agreement and Societe Generale shall cease to be a Bank
party to the Agreement. In addition, Bank One, NA and the Parent desire
that Bank One, NA become a Bank party to the Agreement and certain Banks
desire that their respective LC Commitment Amounts be changed. Accordingly,
upon its execution of a counterpart of this Amendment Bank One, NA shall
become a Bank party to the Agreement for all purposes of the Agreement. The
definition of the term "Bank" in the Agreement is deemed to be amended so
that each of Bank One, NA and Royal Bank of Canada is a Bank under the
Agreement, the Domestic Lending Office and address for notices for each
such Bank being set forth on part 2 of Schedule I to this Amendment. Each
of the Banks executing a counterpart of this Agreement agrees that its LC
Commitment Amount shall be the amount set forth opposite its name on
Schedule I to this Amendment, which Schedule I shall be deemed to amend
Schedule I to the Agreement, and the respective Letter of Credit
Participating Interests in outstanding Letters of Credit shall be adjusted
accordingly. Each of the Banks executing this Agreement, by its execution
hereof, hereby consents to the extension of the Expiration Date under the
Agreement to September 5, 2001. The provisions of this paragraph shall be
effective (including for purposes of calculating fees) as of September 6,
2000.
This Amendment may be executed in any number of counterparts
and by the 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. This Amendment shall
be governed by, and construed in accordance with, the laws of the State of
New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment 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:
_______________________________________
Chief Financial Officer
_______________________________________
Secretary
MELLON BANK, N.A., as Administrative
Agent, Issuing Bank and Bank
By: _______________________________________
Title:_____________________________________
DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES
By:________________________________________
Title:_____________________________________
FLEET NATIONAL BANK
By:________________________________________
Title:_____________________________________
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THE BANK OF BERMUDA, LIMITED
By: _______________________________________
Title:_____________________________________
THE BANK OF NEW YORK
By:________________________________________
Title:_____________________________________
BANQUE NATIONALE DE PARIS
By:________________________________________
Title:_____________________________________
BANK ONE, NA (Main Office Chicago)
By:________________________________________
Title:_____________________________________
ROYAL BANK OF CANADA
By:________________________________________
Title:_____________________________________
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