Execution
Version


 


Standby Letter of Credit Agreement


(Committed/Secured) 


STANDBY LETTER OF CREDIT AGREEMENT (the “Agreement”),
dated as of October 8, 2021,
by and between Everest Reinsurance
(Bermuda), Ltd., an exempted company incorporated and existing under the
laws of Bermuda and registered as a Class 4 and Class C insurer pursuant to the
Bermuda Insurance Act (as defined below) (the “Account Party”), and
LLOYDS BANK CORPORATE MARKETS PLC (“Bank”). 


  


1.                 
Defined Terms.  


(a)               
Definitions.   For purposes of this Agreement, in
addition to the terms defined elsewhere herein, the following terms have the
meanings set forth below (such meanings to be equally applicable to the
singular and plural forms thereof):


“Accordion Upfront Fee” has the
meaning specified in Section 2(i). 


“A.M. Best” means A.M. Best Company,
Inc.


“Anti-Corruption Laws” means all
laws, rules, and regulations of any jurisdiction applicable to the Account
Party from time to time concerning or relating to bribery or corruption,
including, to the extent applicable, the United States Foreign Corrupt
Practices Act of 1977
and the rules and regulations thereunder and the U.K. Bribery Act 2010 and the rules and
regulations thereunder.


“Anti-Money Laundering Laws” means
any and all laws, rules and regulations applicable to the Account Party from
time to time concerning or relating to terrorism financing or money laundering,
including any applicable provision of the PATRIOT Act and The Currency and
Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§ 5311-5330
and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959).



“Application”
has the meaning set forth in Section 2(a). 


“Annual Statement” means,
with respect to the Account Party for any fiscal year, the annual financial
statements of the Account Party as required to be filed with the Insurance
Regulatory Authority of its jurisdiction of domicile and in accordance with the
laws of such jurisdiction, together with all exhibits, schedules, certificates
and actuarial opinions required to be filed or delivered therewith.


“Auto-Extension Letter of
Credit” has the meaning given to such term in Section 2(g).  


“Bankruptcy Law” means
the United States Bankruptcy Code (11 U.S.C. § 101 et seq.), as amended,
modified, succeeded or replaced from time to time, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
rearrangement, receivership, insolvency, reorganization or similar debtor
relief laws of the United States or any state thereof, Bermuda or any other
foreign or other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.


“Bermuda Insurance Act”
means the Insurance Act 1978 of Bermuda and its related rules and regulations,
each as amended.








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"Bermuda
Private Act" means separate legislation enacted in Bermuda with the
intention that such legislation apply specifically to the Account Party, in
whole or in part.


“Business
Day” means any day (other than a Saturday, Sunday or legal holiday) on
which banks in Hamilton, Bermuda, New York City, New York and London, England
are open for the conduct of their commercial banking business.


“Capital Stock” means (i)
with respect to any Person that is a corporation, any and all shares, interests
or equivalents in capital stock (whether voting or nonvoting, and whether
common or preferred) of such corporation, and (ii) with respect to any Person
that is not a corporation, any and all partnership, membership, limited
liability company or other equity interests of such Person; and in each case,
any and all warrants, rights or options to purchase any of the foregoing.


“Change in Law” means the occurrence after the date
of this Agreement of: (a) the adoption or effectiveness of any law,
rule, regulation, judicial ruling, judgment or treaty, (b) any change in any law, rule, regulation or
treaty or in the administration, interpretation, implementation or application
by any Governmental Authority of any law, rule, regulation or treaty, or (c) the making or
issuance by any Governmental Authority of any request, rule, guideline or
directive, whether or not having the force of law; provided that
notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines or directives thereunder or
issued in connection therewith and (ii) all requests, rules, guidelines or directives
concerning capital adequacy promulgated by Bank for International Settlements,
the Basel Committee on Banking Supervision (or any successor or similar
authority) or the U.S. federal or foreign regulatory authorities shall, in each
case, be deemed to be a “Change in Law,” regardless of the date enacted,
adopted or issued.


“Change in Control” means
(a) the acquisition of ownership, directly or indirectly, beneficially or of
record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the SEC thereunder as in effect on the date
hereof), other than Everest Re Group, Ltd. and any of its direct or indirect
Subsidiaries, of Capital Stock representing 25% or more of the aggregate
ordinary voting power represented by the issued and outstanding Capital Stock
of the Account Party; or (b) the acquisition of direct or indirect Control
of the Account Party by any Person or group, other than Everest Re Group, Ltd.
and any of its direct or indirect Subsidiaries.


“Closing Date” means the first date on which all the
conditions precedent set forth in Section 4(a) are satisfied or waived
by Bank.


“Code” means the Internal
Revenue Code of 1986,
and the rules and regulations promulgated thereunder.


“Collateral” means all the assets, property and
interests in property that shall from time to time be pledged or be purported
to be pledged as direct or indirect security for the Obligations pursuant to
any one or more of the Security Documents.


“Collateral Value” for any Business Day shall be
calculated as set forth on Attachment A to Exhibit B. 


“Collateral Value Certificate”  means a
certificate substantially in the form attached as Exhibit B. 








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“Commitment” means the
obligation of Bank to Issue Letters of Credit for the account of the Account
Party hereunder in an aggregate principal amount at any time outstanding not to
exceed $50,000,000, as such amount may be adjusted from time to time pursuant
to the terms hereof.


“Commitment Fee” has the meaning specified in Section
2(i). 


“Commitment Termination Date” means the earliest to
occur of (a)
subject to any extension agreed pursuant to Section 2(k), the date that
is three years after the Closing Date, (b) the date of termination of the entire
Commitment by the Account Party pursuant to Section 2(h), and (c) the date
of termination of the Commitment pursuant to Section 11(a). 


“Consolidated Net Income” means, for any period, the
consolidated net income of the Account Party and its Subsidiaries for that
period, as determined on a consolidated basis in accordance with GAAP.


“Consolidated Tangible Net Worth” means, as of any
date of determination, the Shareholders’ Equity of the Account Party less (a)
any minority interest in Subsidiaries of the Account Party, (b) any treasury
stock, and (c) (to the extent included) any amount shown in respect of goodwill
arising only on consolidation or other intangible assets of the Account Party
and its Subsidiaries and interests of non-members of the Account Party and its
Subsidiaries in the Account Party’s Subsidiaries.


“Control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ability to exercise voting power, by
contract or otherwise.  “Controlling” and “Controlled” have the
meanings correlative thereto.


“Control Agreement” means the control agreement among
Custodian, Bank and the Account Party, as amended, supplemented or restated
from time to time, pursuant to which a lien on one or more Custodial Accounts
and the contents thereof and all security entitlements related thereto securing
the Obligations is perfected in favor of Bank.


“Covenant Compliance Worksheet” means a fully
completed worksheet in the form of Annex A to Exhibit A. 


“Credit Documents” means, collectively, this
Agreement, the Letter of Credit Documents and each Security Document.


“Custodial Account” means each custodial, brokerage
or similar account of the Account Party maintained by the Custodian as a
“securities account” within the meaning of Section 8-501(a) of the UCC for the Account Party as the
“entitlement holder” within the meaning of Section 8-102(7) of the UCC pursuant to a custodial
agreement, on which (and on the contents of which) a lien has been granted as
security for the Obligations.


“Custodian” means The Bank of New York Mellon (in
its capacity as custodian of the Custodial Accounts).


“Default” means any of the events specified in Section 10 which with the passage of time, the giving of notice or any other
condition, would constitute an Event of Default.








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“Disqualified Capital Stock”
means, with respect to any Person, any Capital Stock of such Person that, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event or otherwise, (i)
matures or is mandatorily redeemable or subject to any mandatory repurchase
requirement, pursuant to a sinking fund obligation or otherwise, (ii) is
redeemable or subject to any mandatory repurchase requirement at the sole
option of the holder thereof, or (iii) is convertible into or exchangeable for
(whether at the option of the issuer or the holder thereof) (A) debt securities
or (B) any Capital Stock referred to in clause (i) or (ii) above, in each case
under clause (i), (ii) or (iii) above at any time on or prior to the Final
Maturity Date; provided, however, that only the portion of
Capital Stock that so matures or is mandatorily redeemable, is so redeemable at
the option of the holder thereof, or is so convertible or exchangeable on or
prior to such date shall be deemed to be Disqualified Capital Stock.


“Dollars” or “$” means dollars of the United
States of America.


“Draw Date” has the meaning specified in Section 2(b)(i). 


“Due Date” has the meaning specified in Section 2(b)(i). 


“ERISA”  means  the  Employee  Retirement  Income  Security  Act  of  1974, as amended.


 


“ERISA
Affiliate” means any trade or business (whether or not incorporated) that,
together with the Account Party, is treated as a single employer under
Section 414(b) or (c) of the Code or Section 4001(14) of ERISA or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer
under Section 414(m)
or (o) of the Code.


 


“ERISA Event” means (a) any
“reportable event”, as defined in Section 4043 of ERISA or the regulations issued
thereunder with respect to a Plan (other than an event for which the 30 day
notice period is waived); (b) the failure to satisfy the “minimum
funding standard” (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived with respect to any Plan; (c) the filing
pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of
an application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Account Party or any of its ERISA Affiliates
of any liability under Title IV of ERISA with respect to the termination
of any Plan; (e) the receipt by the Account Party or any of its ERISA
Affiliates from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the incurrence by the Account Party or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial
withdrawal of the Account Party or any of its ERISA Affiliates from any Plan or
Multiemployer Plan; or (g) the receipt by the Account Party or any of its
ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan from,
the Account Party, or any of its ERISA Affiliates of any notice, concerning the
imposition upon the Account Party, or any of its ERISA Affiliates of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to
be, insolvent within the meaning of Title IV of ERISA.  


“Event of Default” has the meaning
specified in Section 10. 


“Exchange Act” means the
Securities Exchange Act of 1934.








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“Extension Fee” has the
meaning specified in Section 2(k)(v). 


“FATCA” means (a) Sections 1471 through 1474 of the Code, as of the date of this Agreement
(or any amended or successor version that is substantively comparable and not
materially more onerous to comply with), any current or future regulations or
official interpretations thereof, and any agreements entered into pursuant to
Section 1471(b)(1)
of the Code, (b)
any treaty, law, regulation or other official guidance enacted in any other
jurisdiction, or relating to an intergovernmental agreement between the United
States and any other jurisdiction with the purpose (in either case) of
facilitating the implementation of (a) above, or (c) any agreement pursuant to the implementation
of paragraphs (a)
or (b) above with
the IRS, the United States government or any governmental or taxation authority
in the United States.


“Final Expiry Date” means the date
when the Final Maturity Date has occurred, all Letters of Credit have expired
or terminated and all Obligations owing hereunder and in the other Credit
Documents have been paid in full. 


“Final Maturity Date” means the date that is one year
following the Commitment Termination Date (as it may be extended pursuant to
and in accordance with Section 2(k)); provided, however,
that if such date is not a Business Day, the Final Maturity Date shall be the
next preceding Business Day. 


“Financial Strength Rating” means,
as to any Person, the rating that has been most recently announced by A.M. Best
as the “financial strength rating” of such Person.


“GAAP” means generally accepted
accounting principles in the United States set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or such other principles as may be approved by a
significant segment of the accounting profession in the United States, that are
applicable to the circumstances as of the date of determination, consistently
applied.


“Governmental
Authority” means the government of any nation or any political subdivision
thereof, whether at the national, state, territorial, provincial, municipal or
any other level, and any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of, or
pertaining to, government (including any supra-national bodies such as the
European Union or the European Central Bank).   


“Hedge Agreement” means any
interest or foreign currency rate swap, cap, collar, option, hedge, forward
rate or other similar agreement or arrangement designed to protect against
fluctuations in interest rates or currency exchange rates, including any swap
agreement (as defined in 11 U.S.C. § 101).


“Hedge Termination Value” means,
in respect of any one or more Hedge Agreements, after taking into account the
effect of any legally enforceable netting agreement relating to such Hedge
Agreements, (a) for
any date on or after the date such Hedge Agreements have been closed out and
termination value(s) determined in accordance therewith, such termination
value(s), and (b) for
any date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Hedge Agreements, as determined based upon one
or more mid-market or other readily available quotations 








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provided by any
recognized dealer in such Hedge Agreements (which may include Bank or any
affiliate of Bank).


“Increase Effective Date” has the
meaning specified in Section 2(j)(ii). 


“Indebtedness” means, with respect
to any Person (without duplication), (i) all indebtedness of such Person for
borrowed money or in respect of loans or advances, (ii) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments, (iii) all
reimbursement obligations of such Person with respect to surety bonds, letters
of credit and bankers’ acceptances (in each case, whether or not drawn or
matured and in the stated amount thereof), (iv) all obligations of such Person
to pay the deferred purchase price of property or services, (v) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person, (vi) all
obligations of such Person as lessee under leases that are or are required to
be, in accordance with GAAP, recorded as capital or finance leases, to the
extent such obligations are required to be so recorded, (vii) all obligations
and liabilities of such Person incurred in connection with any transaction or
series of transactions providing for the financing of assets through one or
more securitizations or in connection with, or pursuant to, any synthetic lease
or similar off-balance sheet financing, (viii) all Disqualified Capital Stock
issued by such Person, with the amount of Indebtedness represented by such
Disqualified Capital Stock being equal to the greater of its voluntary or
involuntary liquidation preference and its maximum fixed repurchase price, but
excluding accrued dividends, if any (for purposes hereof, the “maximum fixed
repurchase price” of any Disqualified Capital Stock that does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant
to this Agreement, and if such price is based upon, or measured by, the fair
market value of such Disqualified Capital Stock, such fair market value shall
be determined reasonably and in good faith by the board of directors or other
governing body of the issuer of such Disqualified Capital Stock), (ix) the
Hedge Termination Value of such Person under any Hedge Agreements, calculated
as of any date as if such agreement or arrangement were terminated as of such
date, (x) all contingent obligations of such Person in respect of Indebtedness
of other Persons and (xi) all indebtedness referred to in clauses (i) through
(x) above secured by any Lien on any property or asset owned or held by such
Person regardless of whether the indebtedness secured thereby shall have been
assumed by such Person or is nonrecourse to the credit of such Person.


“Instructions” has the meaning set
forth in Section 2(a). 


“Insurance Regulatory Authority”
means, with respect to the Account Party, the insurance department or similar
Governmental Authority charged with regulating insurance companies or insurance
holding companies, in its jurisdiction of domicile and, to the extent that it
has regulatory authority over the Account Party, in each other jurisdiction in
which the Account Party conducts business or is licensed to conduct business.


“Investment Company Act” means the
Investment Company Act of 1940 (15 U.S.C. § 80(a)(1), et seq.). 


“IRS” means the United States
Internal Revenue Service.








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“Issue” means, with respect
to any Letter of Credit, to issue, to amend or to extend the expiry of, or to
renew or increase the stated amount of, such Letter of Credit.  The terms “Issued”,
“Issuing” and “Issuance” have corresponding meanings.


“Letter of Credit Documents” means, with respect to
any Letter of Credit, collectively, any Applications, agreements, instruments,
guarantees or other documents (whether general in application or applicable
only to such Letter of Credit) governing or providing for the rights and
obligations of the parties concerned or at risk with respect to such Letter of
Credit.   


“Letter of Credit Fee” has the meaning specified in Section
2(i)(iv). 


“Letters of Credit” means the collective reference to
standby letters of credit Issued pursuant to Section 2. 


“Lien” means any mortgage, pledge,
hypothecation, assignment, security interest, lien (statutory or otherwise),
preference, priority, charge or other encumbrance of any nature, whether
voluntary or involuntary, including the interest of any vendor or lessor under
any conditional sale agreement, title retention agreement, capital lease or any
other lease or arrangement having substantially the same effect as any of the
foregoing.


“Material Adverse Effect” means a material
adverse effect upon (i) the financial condition, operations, business,
properties or assets of the Account Party, (ii) the ability of the Account
Party to perform its payment or other material obligations under this Agreement
or any of the other Credit Documents or (iii) the legality, validity or
enforceability of this Agreement or any of the other Credit Documents or the
rights and remedies of Bank hereunder and thereunder.


“Maximum Total Facility Amount” means $250,000,000.


“Multiemployer
Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.


“Minimum
CTNW Amount” means, as of any date of determination, the sum of (i)
$1,905,373,600 plus (ii) 25.0% of the Consolidated Net Income during the period
from September 30, 2021 through the last day of the most recently ended fiscal
quarter of the Account Party (if positive).


“Multiple
Employer Plan” means an employee pension benefit plan with respect to which
the Account Party or any of its ERISA Affiliates is a contributing sponsor, and
that has two (2) or more contributing sponsors at least two (2) of whom are not
under common control, as such a plan is described in Section 4064 of ERISA.


“Notice of Non-Extension” has the
meaning given to such term in Section 2(g). 


“Obligations” means all obligations and
liabilities (including any interest and fees accruing after the filing of a
petition or commencement of a case by or with respect to the Account Party
seeking relief under any applicable Bankruptcy Laws, whether or not the claim
for such interest or fees is allowed in such proceeding), including without
limitation, reimbursement and other payment obligations and liabilities, of the
Account Party to Bank arising under, or in connection with, the applicable
Credit Document, including, without 








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limitation, Section 5  below, any Application or any Letter of Credit,
in each case whether matured or unmatured, absolute or contingent, now existing
or hereafter incurred.


“OFAC” means the U.S. Department of the Treasury’s Office of
Foreign Assets Control.


“Officer’s Compliance Certificate”
means a certificate of the chief executive officer, the chief financial
officer, vice president—finance, principal accounting officer, treasurer or
assistant treasurer of the Account Party substantially in the form attached as Exhibit
A, together with a Covenant Compliance Worksheet.


“Other Taxes” has the meaning
specified in Section 2(c). 


“Outstanding Letters of Credit” means, as of any
date, the sum of (a)
the Stated Amount of all outstanding Letters of Credit at such time and, without
duplication, (b)
all reimbursement obligations in respect of Letters of Credit at such time.


“Parent” means Everest Re Group,
Ltd., a Bermuda exempted company.


“PATRIOT Act” means the USA
PATRIOT Act (Title III
of Pub. L. 107-56 (signed into law October 26, 2001)).


“Payment Date” has the meaning specified in Section
2(b)(i). 


“PBGC” means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA and any successor entity performing similar
functions.


“Person” means any natural person,
corporation, limited liability company, trust, joint venture, association,
company, partnership, governmental authority or other entity.


“Plan” means any employee
pension benefit plan (including a Multiple Employer Plan, but other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Account
Party or any ERISA Affiliate thereof is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.


 “Pledge Agreement” means the Pledge and
Security Agreement, dated as of the date hereof, made by the Account Party in
favor of Bank, as amended, supplemented or restated from time to time.


“Prime Rate”
means the rate of interest last quoted by the Wall Street Journal as the
"Prime Rate" in the U.S. or, if The Wall Street Journal ceases to
quote such rate, the highest per annum interest rate published by the Board of
Governors of the Federal Reserve System of the United States in Federal Reserve
Statistical Release H.15 (519) (Selected Interest Rates) as the "bank
prime loan" rate or, if such rate is no longer quoted therein, any similar
rate quoted therein (as determined reasonably by Bank) or any similar release
by the Board of Governors of the Federal Reserve System of the United States
(as determined reasonably by Bank); provided that if the Prime Rate as so
determined would be less than zero, such rate shall be deemed to be zero for
the purposes of this Agreement.


“Quarterly Statement”
means, with respect to the Account Party for any fiscal quarter, the quarterly
financial statements of the Account Party as required to be filed with the 








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Insurance
Regulatory Authority of its jurisdiction of domicile, together with all
exhibits, schedules, certificates and actuarial opinions required to be filed
or delivered therewith.


 “Responsible Officer” means, as
to any Person, the chief executive officer, president, chief financial officer,
controller, treasurer or assistant treasurer of such Person or any other
officer of such Person designated in writing by the Account Party and
reasonably acceptable to Bank; provided that, to the extent requested thereby,
Bank shall have received a certificate of such Person certifying as to the
incumbency and genuineness of the signature of each such officer.  Any document
delivered hereunder or under any other Credit Document that is signed by a
Responsible Officer of a Person shall be conclusively presumed to have been
authorized by all necessary corporate, limited liability company, partnership
and/or other action on the part of such Person and such Responsible Officer
shall be conclusively presumed to have acted on behalf of such Person.


“Sanctions” means any and all
economic or financial sanctions, sectoral sanctions, secondary sanctions, trade
embargoes and anti-terrorism laws, including but not limited to those imposed,
administered or enforced from time to time by the U.S. government (including
those administered by OFAC or the U.S. Department of State), the United Nations
Security Council, the European Union, Her Majesty’s Treasury, or other relevant
sanctions authority. 


“Sanctioned Country” means at any
time, a country, territory or region which is itself the subject or target of
any Sanctions.


“Sanctioned
Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by OFAC (including,
without limitation, OFAC’s Specially Designated Nationals and Blocked Persons
List and OFAC’s Consolidated Non-SDN List), 
the U.S. Department of State, the United Nations Security Council, the European
Union, Her Majesty’s Treasury, or other relevant sanctions authority, (b) any Person
located, operating, organized or resident in a Sanctioned
Country or (c) any
Person owned or controlled by any such Person or Persons described in clauses (a) and (b), including
a Person that is deemed by OFAC to be a Sanctions target based on the ownership
of such legal entity by Sanctioned Peron(s). 


“Security Documents” means, collectively, (a) the Pledge
Agreement and (b)
the Control Agreement and (c) each other document, agreement, certificate
and/or financing statement, executed, delivered, made or filed pursuant to the
terms of the documents specified in foregoing clauses (a) and (b).


“Shareholders’ Equity”
means, as of any date of determination, the consolidated shareholders’ equity
of the Account Party and its Subsidiaries as of that date determined on a
consolidated basis in accordance with GAAP.


“Standard Letter of Credit
Practice” means, for Bank, any U.S. federal or state or foreign law or
letter of credit practices applicable in the city in which Bank Issued the
applicable Letter of Credit or for its branch or correspondent banks, such laws
and practices applicable in the city in which it has advised, confirmed or
negotiated such Letter of Credit, as the case may be.  Such practices shall be (i) of banks that
regularly issue letters of credit in the particular city, and (ii) required or
permitted under the ISP (as defined below) or UCP (as defined below), as chosen
in the applicable Letter of Credit.  “ISP” means, International Standby
Practices 1998
(International Chamber of Commerce Publication No. 590) and any subsequent revision thereof adopted
by the International Chamber of 








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Commerce
on the date such Letter of Credit is issued.  “UCP” means, Uniform
Customs and Practice for Documentary Credits 2007 Revision, International Chamber of Commerce
Publication No. 600
and any subsequent revision thereof adopted by the International Chamber of
Commerce on the date such Letter of Credit is issued.


“Stated Amount” means,
with respect to any Letter of Credit at any time, the aggregate amount
available to be drawn thereunder at such time (regardless of whether any
conditions for drawing could then be met).


“Subsidiary” means as to any
Person, any corporation, partnership, limited liability company or other entity
of which more than fifty percent (50%) of the outstanding Capital Stock having ordinary
voting power to elect a majority of the board of directors (or equivalent
governing body) or other managers of such corporation, partnership, limited
liability company or other entity is at the time owned by (directly or
indirectly) such Person (irrespective of whether, at the time, Capital Stock of
any other class or classes of such corporation, partnership, limited liability
company or other entity shall have or might have voting power by reason of the
happening of any contingency).  Unless otherwise qualified, references to
“Subsidiary” or “Subsidiaries” herein shall refer to those of the Account
Party.


                        “Taxes”
has the meaning specified in Section 2(c). 


“Threshold Amount” means $15,000,000.


“UCC” means the Uniform Commercial Code as
in effect from time to time in the State of New York.


“Upfront Fee” has the meaning specified in Section
2(i). 


“U.S.” means United States of America.


2.                 
LETTER OF CREDIT FACILITY.   


(a)               
General.  At the request of the Account Party, Bank
agrees, on and subject to the terms and conditions of this Agreement, to issue
standby Letters of Credit for the account of the Account Party in Dollars from
time to time during the period from the Closing Date to but not including the
Commitment Termination Date.  Letters of Credit may only be issued on Business
Days.  The request to issue a Letter of Credit (an “Application”) shall
be in the form of Exhibit C or such other form as Bank shall from time
to time require or agree to accept (including any type of electronic form or
means of communication acceptable to Bank) and, upon the receipt of any
Application, Bank shall process such Application in accordance with its
customary procedures and shall, subject to Section 4,
promptly issue the Letter of Credit requested thereby (but in no event shall
Bank be required to issue any Letter of Credit earlier than three Business Days
after its receipt of the Application therefor) by issuing the original of such
Letter of Credit to the beneficiary thereof or as otherwise may be agreed by
Bank and the Account Party.  Inquiries, communications and instructions
(whether written, facsimile or in other electronic form approved by Bank)
regarding a Letter of Credit, an Application and this Agreement are each
referred to herein as “Instructions”.  Bank’s records of the content of
any Instruction will be conclusive, absent manifest error.  





 


 



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(b)               
General Payment Obligations.  For each Letter of Credit,
the Account Party shall, as to clause (i) below, reimburse Bank, and as to all other
clauses below, pay Bank, in each case in Dollars:


(i)                
with respect to a drawing under any Letter of Credit, the amount
of each drawing paid by Bank thereunder (such date of payment hereinafter
referred to as the “Draw Date”) no later than the first succeeding
Business Day after the Account Party’s receipt of notice of such payment by
Bank (the “Due Date”), with interest as provided below on the amount so
paid by Bank (to the extent not reimbursed prior to 2:00 p.m. Eastern Time on
the Draw Date) for the period from the Draw Date to the date the reimbursement
obligation created thereby is satisfied in full (the “Payment Date”). 
If the Payment Date is on or prior to the Due Date, such interest shall be
payable at the Prime Rate as in effect from time to time during the period from
the Draw Date to the Payment Date.  If the Payment Date is after the Due Date,
such interest shall be payable (x) as provided in the preceding sentence during
the period from and including the Draw Date to and not including the Due Date,
and (y) at the
Prime Rate as in effect from time to time plus 2% from and including the Due Date to and not
including the Payment Date; 


(ii)              
the fees payable by the Account Party at such times and in such
amounts as are set forth in Section 2(i). 


(iii)            
except as otherwise provided in clause (i) above and clause (iv) below, interest on each amount payable by the
Account Party under the applicable Credit Documents for each day from and
including the date such payment is due to and not including the date of
payment, on demand, at a rate per annum equal to the Prime Rate as in effect
from time to time plus 2%;



(iv)             
within ten (10) days of demand, Bank’s reasonable and
documented out-of-pocket costs and expenses (including the reasonable and
documented legal fees, charges and disbursements of outside counsel to Bank
incurred in connection with the protection or enforcement of Bank’s rights
against the Account Party under this Agreement and the other applicable Credit
Documents and any correspondent bank’s documented charges related thereto),
with interest from the date of demand by Bank to and not including the date of
payment by the Account Party, at a rate per annum equal to the Prime
Rate as in effect from time to time plus 2%;






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(v)               
if as a result of any Change in Law, Bank determines that the
cost to Bank of Issuing or maintaining any Letter of Credit is increased
(excluding, for purposes of this clause (a)(v), any such increased costs resulting from (A) income taxes,
franchise taxes and similar taxes imposed on Bank by any taxing authority, any
U.S. federal withholding taxes imposed under FATCA and Other Taxes (in each
case as to which Section 2(c) shall govern) and (B) changes in the
basis of taxation of overall net income or overall gross income by the U.S. or
by the foreign jurisdiction or state under the laws of which Bank is organized
or has its lending office or any political subdivision thereof), then the
Account Party will pay to Bank, from time to time, within ten (10) days after
demand by Bank, which demand shall include a statement of the basis for such
demand and a calculation in reasonable detail of the amount demanded,
additional amounts sufficient to compensate Bank for such increased cost.  A
certificate as to the amount of such 





 


 



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


(vi)             
if Bank determines that any Change in Law affecting Bank or any
lending office of Bank or Bank’s holding company regarding capital or liquidity
requirements has or would have the effect of reducing the rate of return on
Bank’s capital or on the capital of Bank’s holding company as a consequence of
this Agreement or the Letters of Credit issued by Bank to a level below that
which Bank or Bank’s holding company could have achieved but for such Change in
Law (taking into consideration Bank’s or its holding company’s policies with
respect to capital adequacy), then from time to time the Account Party will pay
to Bank within ten (10) days after demand by Bank, which demand shall
include a statement of the basis for such demand and a calculation in
reasonable detail of the amount demanded, such additional amount or amounts as
will compensate Bank or Bank’s holding company for any such reduction
suffered.  A certificate as to such amounts submitted to the Account Party by
Bank shall be conclusive and binding for all purposes, absent manifest error.


Bank shall use reasonable
efforts to designate a different lending office if such designation will avoid
(or reduce the cost to the Account Party of) any event described in the
preceding sentence and such designation will not, in Bank’s good faith
judgment, subject Bank to any unreimbursed cost or expense and would not
otherwise be disadvantageous to Bank.


Notwithstanding the provisions
of clause (v) or (vi) above or Section
2(c) below (and without limiting the immediately preceding
paragraph), Bank shall not be entitled to compensation from the Account Party
for any amount arising prior to the date which is 180 days before the date on which Bank notifies
the Account Party of such event or circumstance (except that if such event or
circumstance is retroactive, then such 180-day period shall be extended to
include the period of retroactive effect thereof).


Any payments received by Bank
pursuant to the Credit Documents after 2:00 p.m. Eastern shall be deemed to
have been made on the next succeeding Business Day for all purposes under the
Credit Documents.


(c)               
Immediately Available Funds; No Withholding.  All
reimbursements and payments by or on behalf of the Account Party shall be made
in immediately available funds, free and clear of and without deduction for any
present or future Taxes, set-off or other liabilities, to such location as Bank
may reasonably designate from time to time.  The Account Party shall pay all
withholding taxes and Other Taxes imposed by any taxing authority on
reimbursement or payment under any Letter of Credit and any Credit Document,
and shall indemnify Bank against all liabilities, costs, claims and expenses
resulting from Bank having to pay or from any omission to pay or delay in
paying any such taxes, except to the extent that such taxes are determined by a
court of competent jurisdiction by a final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of Bank.  Any such
indemnification payment shall be made within ten (10) days from the date Bank makes written demand
therefor.  “Taxes” means all taxes, fees, duties, levies, imposts, deductions,
charges or withholdings of any kind (other than income taxes, franchise taxes
and similar taxes imposed on Bank by any taxing authority and any U.S. federal
withholding taxes imposed under FATCA).  “Other Taxes” means all present
or future stamp, documentary, excise, property or similar taxes, charges or
levies that arise 








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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 Credit Document.


(d)               
Automatic Debit and Set-Off.  Upon the occurrence and
during the continuance of any Event of Default with respect to the Account
Party, Bank may (but shall not be required to), without demand for
reimbursement or payment or notice to the Account Party, and in addition to any
other right of set-off that Bank may have, debit any account or accounts
maintained by the Account Party with any office of Bank (now or in the future)
and set-off and apply (i) any balance or deposits (general, special,
time, demand, provisional, final, matured or absolute) in the account(s) and (ii) any sums due or
payable from Bank, to the payment of any and all Obligations owed by the
Account Party to Bank, irrespective of whether Bank shall have made any demand
under this Agreement and although such Obligations may be contingent or
unmatured.  Bank agrees promptly to notify the 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. 



(e)               
Obligations Absolute.  The Account Party’s
reimbursement and payment obligations under this Section 2  are absolute, unconditional and irrevocable and
shall be performed strictly in accordance with the terms of this Agreement
under any and all circumstances whatsoever, including, without limitation:


(i)                
any lack of validity, enforceability or legal effect of any
Letter of Credit or any Credit Document or any term or provision therein; 


(ii)              
payment against presentation of any draft, demand or claim for
payment under any Letter of Credit or other document presented for purposes of
drawing under any Letter of Credit (individually, a “Drawing Document”
and collectively, the “Drawing Documents”) that does not comply in whole
or in part with the terms of the applicable Letter of Credit or which proves to
be fraudulent, forged or invalid in any respect or any statement therein
proving to be untrue or inaccurate in any respect, or which is signed, issued
or presented by a Person or a transferee of such Person purporting to be a
successor or transferee of the beneficiary of such Letter of Credit; 


(iii)            
Bank or any of its branches or affiliates being the beneficiary
of any Letter of Credit;


(iv)             
Bank or any correspondent bank honoring a drawing against a
Drawing Document up to the amount available under any Letter of Credit even if
such Drawing Document claims an amount in excess of the amount available under
such Letter of Credit; 


(v)               
the existence of any claim, set-off, defense or other right that
Account Party or any other Person may have at any time against any beneficiary
or any assignee of proceeds, Bank or any other Person; or


(vi)             
any other event, circumstance or conduct whatsoever, whether or
not similar to any of the foregoing that might, but for this Section 2(e), constitute a legal or equitable defense to or discharge of, or provide a
right of set-off against, the Obligations, whether against Bank, the
beneficiary or any other Person;









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provided, however, that subject to Section
0 below, the foregoing shall not release Bank from such liability to
the Account Party as may be determined by a court of competent jurisdiction by
a final and nonappealable judgment against Bank following reimbursement and/or
payment of the Obligations.  


 


(f)                
Computation of Interest and Fees; Maximum Rate.  All
computations of interest and fees to be made hereunder and under any other
Credit Document shall be made on the basis of a year consisting of (i) in the case of
interest determined with reference to the Prime Rate, 365/366 days, as the case
may be, or (ii)
in all other instances, 360 days; and in each case under (i) and (ii), for the
actual number of days elapsed (including the first day but excluding the last
day) occurring in the period for which such interest or fee is payable.  In no
contingency or event whatsoever shall the aggregate of all amounts deemed
interest under this Agreement charged or collected pursuant to the terms of
this Agreement exceed the highest rate permissible under any applicable law
which a court of competent jurisdiction shall, in a final determination, deem
applicable hereto.  In the event that such a court determines that Bank has
charged or received interest hereunder in excess of the highest applicable
rate, the rate in effect hereunder shall automatically be reduced to the
maximum rate permitted by applicable law and Bank shall at its option (i) promptly
refund to the Account Party any interest received by Bank in excess of the
maximum lawful rate or (ii) apply such excess to any outstanding
Obligations.  It is the intent hereof that the Account Party not pay or
contract to pay, and that Bank not receive or contract to receive, directly or
indirectly in any manner whatsoever, interest in excess of that which may be
paid by the Account Party under applicable law.


(g)               
Expiry Date of Letters of Credit.  Each Letter of
Credit shall expire at or prior to the earlier of (i) the close of business on the date one year
after the date of the Issuance of such Letter of Credit (or, in the case of any
renewal or extension thereof, one year after such renewal or extension), or (ii) the Final
Maturity Date; provided, however, if the Account Party so
requests in any applicable Application, Bank agrees to issue a Letter of Credit
that has automatic extension provisions (each, an “Auto-Extension Letter of
Credit”); provided  that any such Auto-Extension Letter of Credit (1)
must permit Bank to prevent any such extension at least once in each
twelve-month period (commencing with the date of issuance of such Letter of
Credit) by giving prior notice to the beneficiary thereof (any such notice, a “Notice
of Non-Extension”) not later than a day in each such twelve-month period to
be agreed upon at the time such Letter of Credit is issued, and (2) shall
expire on or before the Final Maturity Date.


(h)               
Permanent Reduction of Commitment. The Account Party
shall have the right at any time and from time to time, upon at least three
Business Days’ prior irrevocable written notice to Bank, to permanently reduce,
without premium or penalty, (i) the entire Commitment at any time or (ii) portions
of the Commitment, from time to time, in an aggregate principal amount not less
than $3,000,000 or any whole multiple of $1,000,000 in excess thereof.  All
Commitment Fees accrued until the effective date of any termination of the
Commitment shall be paid on the effective date of such termination.  


(i)                
Fees. The Account Party agrees to pay the following
amounts:


(i)                
a non-refundable upfront fee (the “Upfront Fee”), in an
aggregate amount equal to 0.025% of the Commitment.  The entire amount of the
Upfront Fee will be fully earned and shall be due and payable in full in cash
on the Closing Date;





 


 



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(ii)              
a non-refundable upfront fee (the “Accordion Upfront Fee”),
in an aggregate amount equal to 0.025% of Bank's increase in its Commitment
pursuant to Section 2(j) on each Increase Effective Date.  The entire amount of
each Accordion Upfront Fee will be fully earned and shall be due and payable in
full in cash on such Increase Effective Date;


(iii)            
a non-refundable commitment fee (a “Commitment Fee”), for
each calendar quarter (or portion thereof) at a per annum rate equal to 0.125%
of the daily aggregate unused portion of the Commitment, payable in arrears (A) on the last
Business Day of each calendar quarter, beginning with the first such day to
occur after the Closing Date through the Commitment
Termination Date and (B) on the
Commitment Termination Date; and


(iv)             
a non-refundable letter of credit fee (the “Letter of Credit
Fee”) for each calendar quarter (or portion thereof) in respect of all
Letters of Credit issued for the account of the Account Party and outstanding
during such quarter, at a per annum rate equal to 0.375% of the daily aggregate
Stated Amount of such Letters of Credit.  The Letter of Credit Fee shall be due
and payable quarterly in arrears (A) on the last Business Day of each calendar
quarter, commencing with the first such date to occur after the Closing Date
through the Final Maturity Date, (B) on the Commitment Termination Date, (C) on
the Final Maturity Date and (D) on the Final Expiry Date.


(j)                
Accordion Facility. 


(i)                
The Account Party may, from time to time during the period from
the Closing Date to but not including the Commitment Termination Date, by
written notice to Bank, request an increase of the Commitment; provided that
Bank shall not have any obligation to agree to increase the Commitment pursuant
to this Section 2(j) and any election to do so shall be in the sole
discretion of Bank; provided, further, that in no event shall the Commitment
exceed the Maximum Total Facility Amount.


(ii)              
If Bank agrees to increase the Commitment pursuant to Section
2(j)(i), Bank and the Account Party shall determine the effective date for
the increase of the Commitment pursuant to this Section 2(j) (the "Increase
Effective Date"). 


(iii)            
Notwithstanding the foregoing, the increase in the Commitment
pursuant to this Section 2(j) shall not be effective unless:


(A)             
No Default or Event of Default shall have occurred and be continuing on
the Increase Effective Date and after giving effect to such increase on such
date; 


(B)             
The representations and warranties contained in this Agreement and the
other Credit Documents shall be true and correct in all material respects,
except for any representation and warranty that is qualified by materiality or
reference to Material Adverse Effect, which such representation and warranty
shall be true and correct in all respects, on and as of the Increase Effective
Date with the same effect as if made on and as of such date (except for any
such representation and warranty that by its terms is made only as of an
earlier date, which representation and warranty shall remain true and correct
in all material respects as of such earlier date, except for any representation
and warranty that is qualified by materiality or reference to Material Adverse
Effect, which such representation and warranty shall be true and correct in all
respects as of such earlier date);








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(C)             
The Account Party shall have paid to Bank all fees and all reasonable
and documented expenses of Bank required hereunder or under any other Credit
Document to be paid on or prior to the Increase Effective Date (including
reasonable fees and expenses of counsel) in connection with this Agreement, the
other Credit Documents and the transactions contemplated hereby; and


(D)             
Bank shall have received copies of all documents, certificates and
instruments reasonably requested thereby, with respect to the transactions
contemplated by this Agreement.


(k)               
Extension of Commitment. 


(i)                
The Account Party may, on one occasion, by written notice to Bank
following the second anniversary of the Closing Date, request that Bank extend
the Commitment Termination Date for an additional year from the initial
Commitment Termination Date.


(ii)              
Bank may, acting in its sole discretion, determine whether to
agree to such extension of the Commitment Termination Date.  If (and only if)
Bank has agreed in writing to so extend the Commitment Termination Date, then,
effective as of the initial Commitment Termination Date, the Commitment Termination
Date shall be extended to the date falling one year after the initial
Commitment Termination Date (except that, if such date is not a Business Day,
such Commitment Termination Date as so extended shall be the next preceding
Business Day).


(iii)            
Notwithstanding the foregoing, the extension of the Commitment
Termination Date pursuant to this Section 2(k) shall not be effective
unless Bank receives a non-refundable extension fee (the “Extension Fee”),
in an aggregate amount equal to 0.025% of the Commitment.  The entire amount of
the Extension Fee will be fully earned and shall be due and payable in full in
cash as a condition precedent to the effectiveness of the extension of the
Commitment Termination Date pursuant to this Section 2(k). 


3.                 
Account Party’s Responsibility. 
The Account Party is responsible for approving the final text of any Letter of
Credit Issued by Bank for its account, irrespective of any assistance Bank may
provide such as drafting or recommending text or by Bank’s use or refusal to
use text submitted by the Account Party.  The Account Party is solely
responsible for the suitability of the Letter of Credit for the Account Party’s
purposes.  The Account Party will examine the copy of each Letter of Credit
Issued for its account and any other documents sent by Bank in connection with
such Letter of Credit and shall promptly notify Bank of any non-compliance with
the Account Party’s Instructions and of any discrepancy in any document under
any presentment or other irregularity.  The Account Party understands that the
final form of any Letter of Credit may be subject to such revisions and changes
as are deemed necessary or appropriate by Bank in accordance with standard
industry practice and the Account Party hereby consents to such revisions and
changes.   


4.                 
CONDITIONS OF CLOSING AND ISSUANCE.  


(a)               
Conditions Precedent to Closing. The effectiveness of this
Agreement and the obligation of the Bank to Issue any Letters of Credit on the
Closing Date is subject to the satisfaction of each of the following
conditions:


(i)                
Executed Credit Documents.  This Agreement, together with
any other applicable Credit Documents, shall have been duly authorized,
executed and 








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delivered to Bank by the parties thereto, shall be in
full force and effect and no Default or Event of Default shall exist hereunder
or thereunder.


(ii)              
Closing Certificates; Etc.  Bank shall have received each
of the following in form and substance reasonably satisfactory to Bank:


(A)             
Officer’s Certificate.  A certificate from a Responsible
Officer of the Account Party to the effect that (A) all representations and warranties of
the Account Party contained in this Agreement and the other Credit Documents
are true, correct and complete in all material respects (except to the extent
any such representation and warranty is qualified by materiality or reference
to Material Adverse Effect, in which case, such representation and warranty
shall be true, correct and complete in all respects); and (B) as of the
Closing Date, no Default or Event of Default has occurred and is continuing.


(B)             
Certificate of Secretary of the Account Party.  A certificate
of a Responsible Officer of the Account Party certifying as to the incumbency
and genuineness of the signature of each officer of the Account Party executing
Credit Documents to which it is a party and certifying that attached thereto is
a true, correct and complete copy of (A) the memorandum of association (or
equivalent), as applicable, of the Account Party and all amendments thereto,
certified as of a recent date by the appropriate Governmental Authority in its
jurisdiction of incorporation, organization or formation (or equivalent), as
applicable, (B) the
bye-laws or other governing document of the Account Party as in effect on the
Closing Date, (C) resolutions
duly adopted by the board of directors (or other governing body) of the Account
Party authorizing and approving the transactions contemplated hereunder and the
execution, delivery and performance of this Agreement and the other Credit
Documents to which it is a party, and (D) each certificate required to be
delivered pursuant to Section 4(a)(ii)(C). 


(C)             
Certificates of Good Standing.  Certificates as of a recent
date of the good standing of the Account Party under the laws of its
jurisdiction of incorporation, organization or formation (or equivalent), as
applicable, and, to the extent requested by Bank, each other jurisdiction where
the Account Party is qualified to do business.


(D)             
Opinions of Counsel.  Opinions of counsel to the Account
Party addressed to Bank with respect to the Account Party, the Credit Documents
and such other matters as Bank shall request (which such opinions shall
expressly permit reliance by permitted successors and assigns of Bank).


(iii)            
Consents; Defaults. 


(A)             
Governmental and Third Party Approvals.  The Account
Party shall have received all material governmental, shareholder and third
party consents and approvals necessary (or any other material consents as
determined in the reasonable discretion of Bank) in connection with the
transactions contemplated by this Agreement and the other Credit Documents and
all applicable waiting periods shall have expired without any action being
taken by any Person that would reasonably be expected to restrain, prevent or
impose any material adverse conditions on the Account Party or such
transactions or that could seek or threaten any of the foregoing, and no law or
regulation shall be applicable which in the reasonable judgment of Bank would
reasonably be expected to have such effect.









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(B)             
No Injunction, Etc.  No action, proceeding or
investigation shall have been instituted, threatened in writing or proposed in
writing before any Governmental Authority to enjoin, restrain, or prohibit, or
to obtain substantial damages in respect of, or which is related to or arises
out of this Agreement or the other Credit Documents or the consummation of the
transactions contemplated hereby or thereby, or which, in Bank’s sole
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement or the other Credit Documents or the
consummation of the transactions contemplated hereby or thereby.


(iv)          
Payments at Closing.  The Account Party shall have
paid to Bank (i)
the Upfront Fee, and (ii) all other fees and reasonable and documented expenses
of Bank required hereunder or under any other Credit Document to be paid on or
prior to the Closing Date (including reasonable and documented fees and
expenses of counsel) in connection with this Agreement, the other Credit
Documents and the transactions contemplated hereby.


(v)               
Miscellaneous. 


(A)             
PATRIOT Act, etc.  The Account Party shall have
provided to Bank, at least five Business Days prior to the Closing Date to the
extent requested at least 10 Business Days prior to the Closing Date, the
documentation and other information requested by Bank in order to comply with
requirements of any Anti-Money Laundering Laws, including, without limitation,
the PATRIOT Act and any applicable “know your customer” rules and regulations.


(B)             
Other Documents.  All opinions, certificates and other
instruments and all proceedings in connection with the transactions
contemplated by this Agreement shall be satisfactory in form and substance to
Bank.  Bank shall have received copies of all other documents, certificates and
instruments reasonably requested thereby, with respect to the transactions
contemplated by this Agreement.


(b)               
Conditions Precedent to Issuance of Letters of Credit.
The obligation of Bank to Issue Letters of Credit (including any Letters of
Credit Issued on the Closing Date) is subject to the satisfaction of each of
the following conditions:


(i)             
Continuation of Representations and Warranties.  The
representations and warranties contained in this Agreement and the other Credit
Documents shall be true and correct in all material respects, except for any
representation and warranty that is qualified by materiality or reference to
Material Adverse Effect, which such representation and warranty shall be true
and correct in all respects, on and as of such issuance with the same effect as
if made on and as of such date (except for any such representation and warranty
that by its terms is made only as of an earlier date, which representation and
warranty shall remain true and correct in all material respects as of such
earlier date, except for any representation and warranty that is qualified by
materiality or reference to Material Adverse Effect, which such representation
and warranty shall be true and correct in all respects as of such earlier
date).


(ii)              
No Existing Default.  No Default or Event of Default shall
have occurred and be continuing on the Issuance date with respect to such
Letter of Credit or after giving effect to the issuance of such Letter of
Credit on such date.









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(iii)            
Notice and Collateral Value Certificate.  Bank shall have
received an Application from the Account Party and a Collateral Value
Certificate pursuant to Section 7(d)(iii). 


(iv)             
Miscellaneous.  In addition to the foregoing, Bank
shall be under no obligation to Issue any Letter of Credit if:


(A)             
any order, judgment or decree of any Governmental Authority or
arbitrator having jurisdiction over Bank shall by its terms enjoin or restrain
the Issuance of such Letter of Credit or any law applicable to Bank, Bank or
any request or directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over it shall prohibit, or request that it refrain
from, the Issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon it with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which Bank is not otherwise
compensated) not in effect on the Closing Date, or any unreimbursed loss, cost
or expense which was not applicable or in effect as of the Closing Date and
which Bank in good faith deems material to it;


(B)             
Bank shall have delivered a Notice of Non-Extension with respect
to such Letter of Credit;


(C)             
the expiry date of such Letter of Credit would occur more than
twelve months after the date of issuance or last extension unless Bank has
approved such expiry date in writing;


(D)             
the expiry date of such Letter of Credit occurs after the Final
Maturity Date, unless Bank has approved such expiry date in writing;


(E)              
such Letter of Credit is not substantially in form and substance
reasonably acceptable to Bank; or


(F)              
immediately after giving effect thereto,  the amount of
Outstanding Letters of Credit would exceed the Commitment or the Collateral
Value of the Collateral at such time.


5.                 
Indemnification; Limitation of Liability; Expenses.   


(a)               
Indemnification.   The Account Party agrees to
indemnify and hold harmless Bank (including its branches and affiliates), its
correspondent banks and each of their respective directors, officers,
employees, attorneys and agents (each, including Bank, an “Indemnified
Person”) from and against any and all claims, suits, judgments,
liabilities, losses, fines, damages, penalties, interest, costs and expenses
(including expert witness fees and reasonable out-of-pocket legal fees, charges
and disbursements of any counsel (including outside counsel fees and expenses),
and all expenses of arbitration or litigation and in preparation thereof), in
each case, which are documented and may be incurred by or awarded against any
Indemnified Person (collectively, the “Costs”), and which arise out of
or in connection with or by reason of this Agreement, the other Credit
Documents, the actual or proposed use of the proceeds of the Letters of Credit
or any of the transactions contemplated thereby, including, without limitation,
any Costs which arise out of or in connection with, or as a result of:  





 


 



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(i)                
any Letter of Credit or any pre-advice of its Issuance; 


(ii)              
any transfer, sale, delivery, surrender or endorsement of any
Drawing Document at any time(s) held by any Indemnified Person in connection
with any Letter of Credit; 


(iii)            
any actual or prospective action or proceeding arising out of, or
in connection with, any Letter of Credit or any Credit Document (whether administrative,
judicial or in connection with arbitration, whether based on contract, tort or
any other theory, and whether brought by a third party or by the Account Party
or any Subsidiary thereof, and regardless of whether any Indemnified Person is
a party thereto), including any action or proceeding to compel or restrain any
presentation or payment under any Letter of Credit, or for the wrongful
dishonor of, or honoring a presentation under, any Letter of Credit; 


(iv)             
any independent undertakings issued by the beneficiary of any
Letter of Credit;


(v)               
any unauthorized Instruction or error in computer or electronic
transmission in connection with any Letter of Credit Issued hereunder; 


(vi)             
an adviser, confirmer or other nominated person seeking to be
reimbursed, indemnified or compensated in connection with any Letter of Credit
Issued hereunder;


(vii)           
any third party seeking to enforce the rights of the Account
Party, beneficiary, nominated person, transferee, assignee of Letter of Credit
proceeds or holder of an instrument or document in connection with any Letter
of Credit Issued hereunder; 


(viii)         
the fraud, forgery or illegal action of parties other than any
Indemnified Person in connection with any Letter of Credit Issued hereunder;


(ix)             
Bank’s performance of the obligations of a confirming institution
or entity that wrongfully dishonors a confirmation in connection with any
Letter of Credit Issued hereunder; or


(x)               
the acts or omissions, whether rightful or wrongful, of any
present or future de jure or de facto Governmental Authority or
cause or event beyond the control of such Indemnified Person in connection with
any Letter of Credit Issued hereunder;





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in each case, including that resulting from Bank’s own
negligence; provided, however,  that such
indemnity shall not be available to any Person claiming indemnification under
this Section 5(a) to the extent that such Costs (A) are determined by a court of competent
jurisdiction by a final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Person, (B) are determined by a court of competent
jurisdiction by a final and nonappealable judgment to have resulted from a
claim by the Account Party against an Indemnified Person for breach in bad
faith of the obligations of such Indemnified Person hereunder or under any
other Credit Document, or (C) result from any dispute solely between or
among Indemnified Parties.  The Account Party hereby agrees to pay Bank within
thirty (30)  days after demand from time to time all amounts owing under this Section
5(a).    This indemnity provision shall survive termination of this Agreement and
all Letters of Credit.


 





 


 



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(b)               
Direct Damages; No Punitive Damages.  The liability of
Bank (or any other Indemnified Person) under, in connection with and/or arising
out of any Credit Document or any Letter of Credit (or pre-advice), regardless
of the form or legal grounds of the action or proceeding, shall be limited to
direct damages suffered by the Account Party that are determined by a court of
competent jurisdiction by a final and nonappealable judgment to have resulted
from Bank’s gross negligence or willful misconduct or breach in bad faith of
its obligations hereunder or under any Letter of Credit (including pre-advice)
or other Credit Document.  Bank shall be deemed to have acted with due
diligence and reasonable care if Bank’s conduct is in accordance with Standard
Letter of Credit Practice or in accordance with any Credit Document.  No
Indemnified Person shall be liable for any damages arising from any errors,
omissions, interruptions or delays in transmission or delivery of any message,
advice or document (regardless of how sent or transmitted) in connection with this
Agreement or the other Credit Documents, except to the extent that any losses,
claims, damages, liabilities or expenses result from the gross negligence or
willful misconduct of such Indemnified Person in making any such transmission
as determined by a final nonappealable judgment of a court of competent
jurisdiction.


Notwithstanding anything to
the contrary in this Agreement or in any other Credit Document, no Indemnified
Person shall be liable in contract, tort or otherwise for any punitive,
exemplary, consequential, indirect or special damages or losses regardless of
whether or not such party or Indemnified Person shall have been advised of the
possibility thereof or the form of action in which such damages or losses may
be claimed.  The Account Party shall take commercially reasonable action to
avoid and mitigate the amount of any damages claimed against Bank or any other
Indemnified Person, including by enforcing its rights in appropriate
proceedings diligently pursued in the underlying transaction. 


(c)               
No Responsibility or Liability.   Without limiting any
other provision of this Agreement or any other Credit Document, Bank and each
other Indemnified Person (if applicable) shall not be responsible to the
Account Party for, and/or Bank’s rights and remedies against the Account Party
and the Obligations shall not be impaired by:  


(i)                
honor of a presentation under any Letter of Credit that on its
face substantially complies with the terms and conditions of such Letter of
Credit, even if the Letter of Credit requires strict compliance by the
beneficiary;


(ii)              
acceptance as a draft of any written or electronic demand or
request for payment under a Letter of Credit, even if nonnegotiable or not in
the form of a draft; 


(iii)            
the identity or authority of any presenter or signer of any
Drawing Document or the form, accuracy, genuineness or legal effect of any
Drawing Document (other than Bank’s determination that such Drawing Document
appears on its face to substantially comply with the terms and conditions of
the Letter of Credit); 


(iv)             
acting upon any Instruction that it in good faith believes to
have been given by a Person authorized to give such Instructions;


(v)               
any errors in interpretation of technical terms or in
translation;





 


 



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(vi)             
any acts, omissions or fraud by, or the solvency of, any
beneficiary, any nominated person or entity or any other Person, other than an
Indemnified Person; 


(vii)           
any breach of contract between the beneficiary and the Account
Party or any of the parties to the underlying transaction;


(viii)         
payment to any paying or negotiating bank (designated or
permitted by the terms of the applicable Letter of Credit) claiming that it
rightfully honored or is entitled to reimbursement or indemnity under Standard
Letter of Credit Practice applicable to it; 


(ix)             
acting as required or permitted, or failing to act as permitted,
in each case under Standard Letter of Credit Practice applicable to where it
has issued, confirmed, advised or negotiated such Letter of Credit, as the case
may be; 


(x)               
honor of a presentation after the expiration date of any Letter
of Credit notwithstanding that a presentation was made prior to such expiration
date and dishonored by Bank if subsequently Bank or any court or other finder
of fact determines such presentation should have been honored; 


(xi)             
dishonor of any presentation that does not strictly comply or
that is fraudulent, forged or otherwise not entitled to honor; or


(xii)           
honor of a presentation that is subsequently determined by Bank
to have been made in violation of international, federal, state or local restrictions
on the transaction of business with certain prohibited Persons.


provided,
however,  that such limitation of liability shall not be available to
the extent that such actions in (i) – (xii) (A) are determined by a court of
competent jurisdiction by a final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnified Person or
(B) are determined by a court of competent jurisdiction by a final and
nonappealable judgment to have resulted from a claim by the Account Party
against an Indemnified Person for breach in bad faith of the obligations of
such Indemnified Party hereunder or under any other Credit Document.


(d)               
Costs and Expenses.  Within thirty (30) days of receipt of
an invoice from Bank, the Account Party shall pay (i) all reasonable and
documented costs and expenses incurred by Bank and its affiliates (including
the reasonable and documented fees, charges and disbursements of counsel for
Bank) in connection with the preparation, negotiation, execution, delivery and
administration of this Agreement and the other Credit Documents or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable and documented costs and expenses incurred by
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all costs and
expenses incurred by Bank (including the fees, charges and disbursements of any
counsel for Bank) during the existence of an Event of Default in connection
with the enforcement or protection of its rights (A) in connection with this
Agreement and the other Credit Documents, including its rights under this
Section 5, or (B) in connection with the Letters of Credit issued
hereunder, including all such costs and expenses incurred during any workout,
restructuring or negotiations in respect of such Letters of Credit.





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6.                 
Representations and Warranties.  The
Account Party hereby represents and warrants to Bank (all of which
representations and warranties will be repeated as of the date of each new
Application submitted by the Account Party to Bank and as of the date of
Issuance of any Letter of Credit requested in each such Application) as
follows:


(a)               
Organization, etc.  The Account Party is duly
organized or formed, validly existing and (to the extent applicable under the
laws of the relevant jurisdiction) in good standing under the laws of the
jurisdiction of its organization or formation, and is duly qualified or
licensed to do business (and in good standing as a foreign corporation or
entity, if applicable) in all jurisdictions in which such qualification or
licensing is required or in which the failure to so qualify or to be so
licensed would have a Material Adverse Effect. The Account Party does not have
any Subsidiaries.


(b)               
Power and Authority.  The Account Party has the
requisite power and authority to execute and deliver this Agreement and each
other Credit Document to which it is a party and to perform and observe the
terms and conditions stated herein and therein, and the Account Party has taken
all necessary corporate or other action to authorize its execution, delivery
and performance of each such Credit Document.


(c)               
Valid and Binding Obligation.  This Agreement
constitutes, and each other Credit Document when signed and delivered by the
Account Party to Bank will constitute, its legal, valid and binding obligation,
enforceable against it in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors’ rights against the Account Party generally,
by general equitable principles or by principles of good faith and fair
dealing, and assuming that this Agreement and each such other Credit Document
have been validly executed and delivered by each party thereto other than the
Account Party.


(d)               
No Violation or Breach.  The Account Party’s
execution, delivery and performance of each Credit Document to which it is a
party and the payment of all sums payable by it under each such Credit Document
do not and will not: (i) violate or contravene its memorandum of
association, bye-laws or other organizational documents; (ii) to its
knowledge, violate or contravene any order, writ, law, treaty, rule, regulation
or determination of any Governmental Authority, in each case applicable to or
binding upon it or any of its property, the violation or contravention of which
would have a Material Adverse Effect; or (iii) result in the breach of any provision of, or
in the imposition of any lien or encumbrance (except for liens or encumbrances
created under the Credit Documents) under, or constitute a default or event of
default under, any agreement or arrangement to which it is a party or by which
it or any of its property is bound, the contravention of which agreement or
arrangement would have a Material Adverse Effect.


(e)               
Approvals.   No authorization, approval or consent of,
or notice to or filing with, any Governmental Authority is required to be made
by the Account Party in connection with the execution and delivery by the
Account Party of any Credit Document to which it is a party or the Issuance by
Bank of any Letter of Credit for the account of the Account Party pursuant to
this Agreement and the related Application, except for those which have been
duly obtained, taken, given or made and are in full force and effect, and
except where failure to obtain the foregoing could not reasonably be expected
to have a Material Adverse Effect.





 


 



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(f)                
Compliance with Laws.  The Account Party is in compliance
with all applicable laws and regulations, except where the noncompliance with
which would not have a Material Adverse Effect, and no Application, Letter of
Credit or transaction of the Account Party under any Credit Document to which
it is a party will in any material respect contravene any laws, treaties, rules
or regulations of any Governmental Authority, including, without limitation,
any foreign exchange control laws or regulations, U.S. foreign assets control
laws or regulations or currency reporting laws and regulations, now or
hereafter applicable to it.


(g)               
No Default Under Other Agreements.  The Account Party
is not in default under any agreement, obligation or duty to which it is a
party or by which it or any of its property is bound, which would have a
Material Adverse Effect.


(h)               
No Arbitration Proceeding or Litigation.  There is no
pending or, to the knowledge of the Account Party, threatened arbitration
proceeding, litigation or action against it which (i) is reasonably likely to have a Material
Adverse Effect or (ii)
may affect the legality, validity or enforceability of this Agreement or the
other Credit Documents.


(i)                
Anti-Corruption Laws; Anti-Money Laundering Laws and Sanctions. 


(i)                
None of (i)
the Account Party or, to its knowledge, any of its respective directors,
officers, or employees, or (ii) any agent or representative of the Account
Party that will act in any capacity in connection with this Agreement, (A) is a Sanctioned
Person or currently the subject or target of any Sanctions, (B) is controlled
by or is acting on behalf of a Sanctioned Person or (C) is located, organized or resident in a
country or territory that is, or whose government is, the subject of Sanctions,
in a manner that would result in the violation of applicable Sanctions by any
party hereto.


(ii)              
The Account Party has implemented and maintains in effect policies and
procedures designed to ensure compliance by the Account Party and its
respective directors, officers and employees with all applicable
Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions.


(iii)            
The Account Party and, to the knowledge of the Account Party, each
director, officer, employee and agent of the Account Party, is in compliance
with all applicable Anti-Corruption Laws, Anti-Money Laundering Laws and
Sanctions in all material respects.


(iv)             
No proceeds of any Letter of Credit have been used, directly or
indirectly, by the Account Party or, to the knowledge of the Account Party, any
of its or their respective directors, officers, employees and agents in
violation of Section 7(h). 


(j)                
Filed All Tax Returns and Paid All Taxes.  The Account
Party has filed all required tax returns, and all Taxes, assessments and other
governmental charges due from it have been fully paid, except for Taxes which
are being contested in good faith or those which the failure to file or pay
would not have a Material Adverse Effect.  The Account Party has established on
its books reserves adequate for the payment of all federal, state and other
income tax liabilities, including those being contested in good faith.





 


 



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(k)               
Financial Statements.  The financial statements most
recently furnished to Bank by the Account Party, if any, fairly present in all
material respects the financial condition of the Account Party as at the date
of such financial statements and for the periods then ended in accordance with
GAAP (except as disclosed therein and, in the case of interim financial statements
for any fiscal quarter, subject to normal year-end adjustments and except that
footnote and schedule disclosure may be abbreviated), and there has been no
material adverse change in the Account Party’s business or financial condition
or results of operations since the date of the Account Party’s most recent
annual financial statements.


(l)                
Collateral.   On the date of Issuance of any Letter of
Credit for the account of the Account Party, both immediately before and after
giving effect to such Issuance, the amount of Outstanding Letters of Credit
does not exceed the Collateral Value of the Collateral.


(m)             
Margin Stock.  The Account Party is not engaged
principally or as one of its activities in the business of extending credit for
the purpose of “purchasing” or “carrying” any “margin stock” (as each such term
is defined or used, directly or indirectly, in Regulation U of the Board of
Governors of the Federal Reserve System).  No part of the proceeds of any
Letters of Credit will be used for purchasing or carrying margin stock or for
any purpose which violates, or which would be inconsistent with, the provisions
of Regulation T, U or X of such Board of Governors.


(n)               
No Material Adverse Effect. There has been no Material Adverse Effect since December
31, 2020, and there exists no event, condition or state of facts that could
reasonably be expected to result in a Material Adverse Effect.


(o)               
Investment Company.  The Account Party is not an
“investment company” or a company “controlled” by an “investment company” (as
each such term is defined or used in the Investment Company Act).


(p)               
First Priority Security Interest.  Bank has a first
priority perfected security interest in the Collateral pledged by the Account
Party pursuant to the Security Documents.


(q)               
Insurance. The properties of the Account Party and its
Subsidiaries are insured with financially sound and reputable insurance
companies not affiliates of the Account Party, in such amounts, with such
deductibles and covering such risks as are customarily carried by companies engaged
in similar businesses and owning similar properties in localities where the
Account Party and its Subsidiaries operate.


(r)                
Disclosure. No report, financial statement, certificate or
other information furnished (whether in writing or orally) by or on behalf of
the Account Party to Bank in connection with the transactions contemplated
hereby and the negotiation of this Agreement or delivered hereunder or under
any other Credit Document (in each case, as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not materially
misleading.


 



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(s)                
Certain Bermuda Matters: As of the Closing Date, (i) the
Account Party’s insurance licenses are not the subject of any direction issued
by an Insurance Regulatory Authority, proceeding for suspension or revocation,
there is no sustainable basis for such suspension or revocation, and to the Account
Party’s knowledge, no such suspension or revocation has been threatened by any
applicable Insurance Regulatory Authority; (ii) the Account Party 





 


 



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(t)                
does not transact any insurance business, directly or indirectly,
in any jurisdiction where it would be unlawful for it to do so; and (iii) the
Account Party has not received any direction or other notification from the
Bermuda Monetary Authority pursuant to Section 32 of the Bermuda Insurance Act
and is not the subject of any Bermuda Private Act.


(u)               
ERISA.  It
does not have any direct obligation or direct liability in respect of any Plan
or Multiemployer Plan, and except as would not reasonably be expected to have a
Material Adverse Effect, no ERISA Affiliate thereof has any obligation or
liability in respect of any Plan or Multiemployer Plan. With respect to its
obligations to each Plan, it is in compliance in all material respects with the
applicable provisions of ERISA and the Code and the regulations and published
interpretations thereunder and other federal or state laws.  No ERISA Event has
occurred or is reasonably expected to occur that, when taken together with all
other such ERISA Events for which liability is reasonably expected to occur,
has had or could reasonably be expected to result in a Material Adverse Effect.


7.                 
AFFIRMATIVE Covenants. 
Until all of the Obligations (other than contingent indemnification obligations
not then due) have been paid and satisfied in full in cash, all Letters of
Credit have been terminated or expired and the Commitment terminated, the
Account Party shall: 


(a)               
GAAP Financial Statements.  Deliver to Bank, in form
and detail satisfactory to Bank:


(i)             
As soon as available and in any event
within 55 days after the end of each of the first three fiscal quarters of each
fiscal year, beginning with the fiscal quarter ending September 30, 2021, the
Quarterly Statement prepared for its board of directors in accordance with
GAAP, in each case applied on a basis consistent with that of the preceding
quarter or containing disclosure of the effect on the financial condition or
results of operations of any change in the application of accounting principles
and practices during such quarter; and


(ii)           
As soon as available and in any event within
135 days after the end of each fiscal year, beginning with the fiscal year
ending December 31, 2021, the Annual Statement prepared for its board of
directors in accordance with GAAP, in each case applied on a basis
consistent with that of the preceding year or containing disclosure of the
effect on the financial condition or results of operations of any change in the
application of accounting principles and practices during such year.


(b)               
Certificates; Other Reports.  Deliver to Bank:


(i)             
at each time financial statements are delivered pursuant to Section
7(a), a duly completed Officer’s Compliance
Certificate signed by the chief executive officer, chief financial officer,
vice president—finance, principal accounting officer, treasurer or assistant
treasurer of the Account Party, together with a Covenant Compliance Worksheet
reflecting the computation of the respective financial covenants set forth in
such Covenant Compliance Worksheet;






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(ii)           
promptly upon receipt thereof, copies of
all reports, if any, submitted to the Account Party, or any of its respective
boards of directors by its respective independent public accountants in
connection with their auditing function, including, without limitation, any
management report and any management responses thereto;





 


 



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(iii)         
promptly upon the request thereof, such
other information and documentation required by bank regulatory authorities
under applicable Anti-Money Laundering Laws (including, without limitation, any
applicable “know your customer” rules and regulations and the PATRIOT Act), as
from time to time reasonably requested by Bank;
and


(iv)          
such other information regarding the
operations, business affairs and financial condition of the Account
Party as Bank may reasonably request.


(c)               
Notice of Litigation and Other Matters.  Promptly (but
in no event later than ten (10) days after any Responsible Officer of the
Account Party becoming aware thereof) notify Bank in writing of:


(i)             
the occurrence of any Default or Event
of Default;


(ii)           
the commencement of all proceedings and
investigations by or before any Governmental Authority and all actions and
proceedings in any court or before any arbitrator against or involving the
Account Party or any of its respective properties, assets or businesses in each
case that if adversely determined would reasonably be expected to result in a
Material Adverse Effect;


(iii)         
any attachment, judgment, lien, levy or
order exceeding the Threshold Amount that has been assessed against the Account
Party; and


(iv)          
any announcement by A.M. Best of any
change in the Financial Strength Rating of the Account Party.


Each notice pursuant to this Section
7(c) shall be accompanied by a statement of a Responsible Officer of the
Account Party setting forth details of the occurrence referred to therein and
stating what action the Account Party has taken and proposes to take with
respect thereto and shall describe with particularity any and all provisions of
this Agreement and any other Credit Document that have been breached.


(d)               
Collateral.  Comply with the following:


(i)             
Pursuant to the Security Documents and as
collateral security for the payment and performance of its Obligations, the
Account Party shall grant and convey to Bank a security interest in the
Collateral charged and pledged by it, prior and superior to all other liens, except
for liens in favor of the Custodian securing payment of amounts advanced to
settle authorized transactions or pay income or distributions in respect of
Collateral.  The Account Party shall cause the
Collateral charged and pledged by it to be made subject to the Security
Documents (in form and substance reasonably acceptable to Bank) necessary for
the perfection of the security interest in the Collateral and for the exercise
by Bank of its rights and remedies with respect thereto.  The Account Party
shall promptly after the date hereof file a charge against the Collateral with
the Bermuda Registrar of Companies and deliver evidence of such filing
to Bank no later than thirty (30) days after the date hereof.






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(ii)           
The Account Party shall at all times cause the Collateral Value of the
Collateral pledged by the Account Party to equal or exceed the amount of
Outstanding 





 


 



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(iii)         
Letters of Credit at such time.  If on any date the Outstanding Letters
of Credit shall exceed the Collateral Value of the Collateral pledged by the
Account Party, the Account Party agrees to pay or deliver within three (3) Business Days
to the Custodian Collateral having an aggregate Collateral Value of not less
than the amount of such excess, with any such Collateral to be held in the
Account Party’s Custodial Account as security for all Obligations hereunder.


(iv)          
The Account Party shall deliver to Bank a Collateral Value Certificate,
setting forth the Outstanding Letters of Credit, the fair market value of the
Collateral by category and in the aggregate, the calculation of each Collateral
Value and such other information as Bank may reasonably request (A) not later than 11:00 a.m. on the
Business Day immediately preceding the date on which any Letter of Credit is to
be Issued, (B)
within ten (10)
Business Days after the end of each calendar month, (C) at and as of such other times as Bank may
reasonably request and (D) at such other times as the Account Party may
desire.


(v)            
The Account Party shall cause the Custodian to provide to Bank, in a
manner and at times consistent with the terms of the Control Agreement,
information with respect to each of its Custodial Accounts, in a format to be
agreed by Bank (acting reasonably), which information
shall provide, without limitation, a detailed list of the assets in each such
Custodial Account (including the amount of cash and a detailed description of
the Collateral (including a breakdown listing the name of each issuer, and the
fair market value of the assets held of such issuer)), the fair market value of
those assets and the pricing source of such valuation.


(e)               
Payment of Taxes and Other Obligations.  Except where
the failure to pay or perform such items described in this Section would not
reasonably be expected to have a Material Adverse Effect or impact the
Collateral, the Account Party will pay and perform all taxes, assessments and
other governmental charges that may be levied or assessed upon it or any of its
property; provided, that the Account Party may contest any item described in
this Section in good faith so long as adequate reserves are maintained with
respect thereto in accordance with GAAP.


(f)                
Compliance with Laws and Approvals.  Observe and
remain in compliance with (i) in all material respects, all applicable laws and
maintain in full force and effect all Governmental Approvals, in each case
applicable to the conduct of its business and (ii) the Bermuda Insurance Act,
except, in the case of clause (i) above only, where the failure to do so would
not reasonably be expected to have a Material Adverse Effect.






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(g)               
Maintenance of Books and Records; Inspection.  (i) maintain
adequate books, accounts and records, in which full, true and correct entries
in all material respects shall be made of all financial transactions in
relation to its business and properties, and prepare all financial statements
required under this Agreement, in each case in accordance with GAAP and in
compliance with the requirements of any Governmental Authority having
jurisdiction over it, and (ii) permit employees or agents of Bank to
visit and inspect its properties and examine or audit its books, records,
working papers and accounts and make copies and memoranda of them, and at its
own cost and expense (other than after the occurrence of an Event of Default),
and to discuss its affairs, finances and accounts with its officers and
employees and, upon notice to the Account Party, the independent public
accountants of 





 


 



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the Account Party (and by
this provision the Account Party authorizes such accountants to discuss the
finances and affairs of the Account Party), all at such times that will not
interrupt or interfere with the operation of Account Party’s business and from
time to time, upon reasonable notice and during business hours, as may be reasonably
requested; provided that except during the continuance of an Event of Default
Bank shall not exercise such rights described in clause (ii) of this Section more than once per calendar
year.


(h)               
Use of Proceeds.  Comply with the following:


(i)             
The Account Party shall use the Letters of Credit to support insurance
obligations, obligations under reinsurance agreements and retrocession
agreements and similar risk obligations. 


(ii)           
The Account Party shall not request or use any Issued Letter of Credit, (i) in furtherance
of an offer, payment, promise to pay, or authorization of the payment or giving
of money, or anything else of value, to any Person in violation of any
Anti-Corruption Laws, (ii) for the purpose of funding, financing or
facilitating any activities, business or transaction of or with any Sanctioned
Person, or in any Sanctioned Country, except to the extent permitted for a
Person required to comply with Sanctions or (iii) in any manner that would result in the
violation of any Sanctions applicable to any party hereto.


(i)                
Compliance with Anti-Corruption Laws; Anti-Money Laundering
Laws and Sanctions.  Maintain in effect and enforce policies and
procedures designed to ensure compliance by the Account Party and its 
directors, officers, employees and agents with all applicable Anti-Corruption
Laws, Anti-Money Laundering Laws, and Sanctions.


(j)                
Maintenance of Existence.  Take all reasonable action to
maintain all rights, privileges, permits, licenses and franchises necessary or
desirable in the normal conduct of its business, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect.


(k)               
Maintenance of Property and Insurance.  Comply with the
following:


(i)             
maintain, preserve and protect all of its material properties and equipment
necessary in the operation of its business in good working order and condition,
ordinary wear and tear excepted, and make all necessary repairs thereto and
renewals and replacements thereof, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect; and 


(ii)           
maintain with financially sound and reputable insurance companies not
affiliates of the Account Party, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such
amounts as are customarily carried under similar circumstances by such other
Persons.






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(l)                
Further Assurances.  At the Account Party’s cost and
expense, the Account Party will execute and deliver to Bank such additional
certificates, instruments and/or documents and take such additional action as
may be reasonably requested by Bank to enable Bank to Issue 





 


 



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any Letter of Credit
pursuant to this Agreement and the related Application, to perfect and maintain
the validity and priority of the liens granted pursuant to the Security
Documents, to protect, exercise and/or enforce Bank’s rights and interests
under any Credit Document and/or to give effect to the terms and provisions of
any Credit Document.


8.                 
Financial Covenants.  Until
all of the Obligations (other than contingent indemnification obligations not
then due) have been paid and satisfied in full in cash, all Letters of Credit
have been terminated or expired and the Commitment terminated, the Account
Party covenants and agrees to the following:


(a)               
Minimum Consolidated Tangible Net Worth. The Account Party shall not permit Consolidated Tangible Net
Worth at any time to be less than the Minimum CTNW Amount.


(b)               
Financial Strength Ratings.  The Account Party shall at
all times maintain a financial strength rating by A.M. Best Company and shall
not permit such rating to be lower than “B++.”


9.                 
NEGATIVE COVENANTS.  Until all of the Obligations (other than
contingent indemnification obligations not then due) have been paid and
satisfied in full in cash, all Letters of Credit have been terminated or
expired and the Commitment terminated, the Account Party shall not directly or
indirectly:


(a)               
Changes in Business.  At any time from the date hereof
until the Final Expiry Date, make any material change in the nature of its
business as carried on at the date hereof that could be reasonably expected to
have a Material Adverse Effect or enter into any new line of business that is
not similar, corollary, related, ancillary, incidental or complementary, or a
reasonable extension, development or expansion thereof or ancillary thereto the
business as carried on as of the date hereof.


(b)               
Liens.  Create, incur, assume or suffer to exist any Lien
on any Collateral, whether now owned or hereafter acquired, other than (i)
Liens granted to Bank pursuant to any Credit Document, and (ii) Liens of the
Custodian with respect to the Custodial Accounts and funds therein by operation
of law or expressly consented to by Bank in a Control Agreement.


10.             
Events of Default.  Each of the
following shall be an “Event of Default” under this Agreement:


(a)               
Failure to Reimburse Draws.  The failure by the
Account Party to reimburse or pay any drawing under any Letter of Credit or
accrued interest thereon on the Due Date therefor.


(b)               
Failure to Pay Certain Other Amounts.  The failure by
the Account Party to pay any fee or other amount when due under or in
connection with any Credit Document or any Letter of Credit within five (5)
Business Days after the same shall become due and payable.


(c)               
Breach of Representation and Warranty.  Any
representation, warranty, certification or statement made or furnished by the
Account Party under or in connection with any Credit Document or as an
inducement to Bank to Issue a Letter of Credit shall be false, incorrect or
misleading in any material respect when made.






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(d)               
Failure to Maintain Collateral Value.  The Account Party
shall fail to maintain at any time Collateral in which Bank shall have a
perfected first priority security interest and 





 


 



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having a Collateral Value
of not less than the Outstanding Letters of Credit and such failure shall
continue or remain unremedied for more than the three (3) Business Day period
provided for in Section 7(d)(ii).  


(e)               
Failure to Perform or Observe Covenants.   


(i)                
The Account Party’s failure to perform or observe any term,
covenant or agreement contained in Section 7(c)(i),  Section 7(h),
Section  8 or  Section 9; or 


(ii)              
The Account Party’s failure to perform or observe any term,
covenant or agreement contained in any Credit Document (other than those
referred to in subsections (a), (b), (c), (d) and (e)(i) of this Section 10), and with respect to any such failure or
breach that by its nature can be cured, such failure or breach shall continue
or remain unremedied for thirty (30) calendar days after the earlier of (1) Bank’s
delivery of written notice thereof to the Account Party and (2) the Account
Party having actual knowledge that such failure or breach has occurred.


(f)                
Insolvency Proceedings, Etc.  The Account Party
institutes or consents to the institution of any proceeding under any
Bankruptcy Law; or makes an assignment for the benefit of creditors; or applies
for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of the Account Party, as the case may be, and the
appointment continues undischarged, undismissed or unstayed for sixty (60) calendar days;
or any proceeding under any Bankruptcy Law relating to the Account Party or to
all or any material part of its property is instituted without the consent of
the Account Party, as the case may be, and continues undischarged, undismissed
or unstayed for sixty (60) calendar days; or an order for relief is
entered in any such proceeding; or the Account Party becomes unable or admits
in writing its inability or fails generally to pay its debts as they become
due.   


(g)               
Sale of Assets; Merger; Dissolution.  There shall
occur in one or a series of transactions: (i) the sale, assignment or transfer of all or
substantially all of the assets of the Account Party; (ii) a merger, amalgamation or consolidation of
the Account Party without the prior written consent of Bank, except that (A) the Account Party may merge, amalgamate or
consolidate with a Subsidiary of the Account Party so long as the Account Party
is the surviving entity in any such transaction and (B) the Account Party may
merge, amalgamate or consolidate with any Person so long as the Account Party
is the surviving entity; or (iii) the
dissolution of the Account Party.


(h)               
Credit Documents.  Any provision of any Credit
Document to which the Account Party is a party shall for any reason cease to be
valid and binding or enforceable; or the Account Party shall deny or disaffirm
in writing the enforceability of any provision of any Credit Document to which
it is a party.


(i)                
Security Documents.  Any Security Document to which
the Account Party is a party shall for any reason (other than pursuant to the
terms thereof) cease to create in favor of Bank a valid and perfected first
priority security interest in the Collateral of the Account Party purported to
be covered thereby; or Bank shall cease for any reason to hold a perfected
first priority security interest in the Collateral of the Account Party; or the
Account Party or any 








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Person acting on its
behalf shall deny or disaffirm in writing the enforceability of any Security
Document.


(j)                
Indebtedness Cross-Default.  The Account Party shall (i) default in
the payment of any Indebtedness (other than the Obligations and obligations amongst the Account Party and its
affiliates) the aggregate principal amount (including undrawn committed or
available amounts), or with respect to any Hedge Agreement, the Hedge
Termination Value, of which is in excess of the Threshold Amount beyond the
period of grace if any, provided in the instrument or agreement under which
such Indebtedness was created, or (ii) default in the observance or performance
of any other agreement or condition relating to any Indebtedness (other than
the Obligations and obligations amongst the Account
Party and its affiliates) the aggregate principal amount (including undrawn
committed or available amounts), or with respect to any Hedge Agreement, the
Hedge Termination Value, of which is in excess of the Threshold Amount or
contained in any instrument or agreement evidencing, securing or relating
thereto or any other event shall occur or condition exist (other than the
Obligations and obligations amongst the Account Party and its affiliates), the
effect of which default or other event or condition is to cause, with the
giving of notice and/or lapse of time, if required, any such Indebtedness to (A) become due, or
to be repurchased, prepaid, defeased or redeemed (automatically or otherwise),
or an offer to repurchase, prepay, defease or redeem such Indebtedness to be
made, prior to its stated maturity (any applicable grace period having expired)
or (B) be cash
collateralized (it being understood that a pledge of cash collateral by the
Account Party to secure a Hedge Agreement as initial or variation margin does
not trigger a violation of this clause (B)).


(k)               
Judgment.  One or more judgments, orders or decrees
shall be entered against the Account Party by any court and continues without
having been discharged, vacated or stayed for a period of thirty (30) consecutive
days after the entry thereof and such judgments, orders or decrees are either (i) for the payment
of money, individually or in the aggregate (not paid or fully covered by
insurance as to which the relevant insurance company has acknowledged coverage),
equal to or in excess of the Threshold Amount or (ii) for injunctive relief and could reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.


(l)                
Employee  Benefit  Matters.  Except as would not reasonably be expected to result in a
Material Adverse Effect, any Lien  shall  be  imposed 
on  the  assets  of  the  Account
Party under ERISA with respect to any Plan or under any foreign laws similar to
ERISA governing foreign pension plans. 


(m)             
Change in Control.  There occurs any Change in Control.


11.             
REMEDIES.  Upon the occurrence and during
the continuance of any Event of Default:


(a)               
Bank may terminate the Commitment and declare all amounts owed to
Bank under this Agreement or any of the other Credit Documents and all other
Obligations, to be forthwith due and payable, whereupon the same shall promptly
become due and payable without presentment, demand, protest or other notice of
any kind, all of which are expressly waived by the Account Party, anything in
this Agreement or the other Credit Documents to the contrary notwithstanding;
provided, that upon the occurrence of an Event of Default specified in Section
10(f), the Commitment shall be automatically terminated and all
Obligations shall automatically become due and payable without presentment,
demand, protest or other notice of any kind, all of which are expressly waived
by the Account Party, 








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anything in this Agreement
or in any other Credit Document to the contrary notwithstanding. 


(b)               
Solely with respect to the occurrence of an Event of Default
under Sections 10(a), (b),
(d), or  (f), Bank may
(i) demand that the Account Party
deposit in the Custodial Account an amount of cash equal to 103% of the
aggregate Outstanding Letters of Credit to be held and applied to the
Obligations and/or (ii) terminate any or all of the Letters of Credit
or give Notices of Non-Extension in respect thereof, in each case if permitted
in accordance with their terms; provided  that upon the occurrence of an
Event of Default specified in Section 10(f),
the requirement to deliver cash collateralize pursuant to the foregoing clause
(i) in respect of all Outstanding Letters of Credit shall automatically become
due without demand or other notice of any kind, all of which are expressly
waived by the Account Party, anything in this Agreement or in any other Credit
Document to the contrary notwithstanding.  Such cash collateral shall be
applied by Bank to the payment of drafts drawn under such Letters of Credit,
and the unused portion thereof after all such Letters of Credit shall have
expired or been fully drawn upon, if any, shall be applied to repay the other
Obligations.  After all such Letters of Credit shall have expired or been fully
drawn upon and all Obligations shall have been paid in full, the balance, if
any, in such Custodial Account shall be returned to the Account Party.


(c)               
Bank may exercise from time to time any of the rights, powers and
remedies available to Bank under any Credit Document to which the Account Party
is a party, under any other documents now or in the future evidencing or
securing the Obligations or under applicable law, and all such remedies shall
be cumulative and not exclusive.  


12.             
SUBROGATION.  In the event of an Event of
Default, Bank, at its option, shall be subrogated to the Account Party’s rights
against any Person who may be liable to the Account Party on any transaction or
obligation underlying any Letter of Credit, to the rights of any holder in due
course or Person with similar status against the Account Party, and to the
rights of any beneficiary or any successor or assignee of any beneficiary.


13.             
TERM OF AGREEMENT. This Agreement shall
remain in effect from the Closing Date through and including the date upon
which all Obligations (other than contingent indemnification obligations not
then due) arising hereunder or under any other Credit Document shall have been
indefeasibly and irrevocably paid and satisfied in full, all Letters of Credit
have been terminated or expired and the Commitment has been terminated.  No
termination of this Agreement shall affect the rights and obligations of the
parties hereto arising prior to such termination or in respect of any provision
of this Agreement which survives such termination.


14.             
USA PATRIOT Act; Anti-Money Laundering Laws. 
Bank hereby notifies the Account Party that pursuant to the requirements of the
PATRIOT Act or any other Anti-Money Laundering Laws, it is required to obtain,
verify and record information that identifies the Account Party, which
information includes the name and address of the Account Party and other
information that will allow Bank to identify the Account Party in accordance
with the PATRIOT Act or such Anti-Money Laundering Laws.






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15.             
Governing Law; UCP; ISP; Standard Letter of Credit
Practice.  Each Credit Document and each Letter of Credit shall
be governed by and construed in accordance with (a) in the case of each Credit Document (other
than the Letters of Credit), the substantive laws of New York and (b) in the case of
each Letter of Credit, the governing law specified in the applicable Letter of
Credit as determined by Bank and the Account Party (which may include the laws
of a particular jurisdiction and the ISP or UCP, if applicable), which is, as
applicable, incorporated herein by reference into this Agreement 





 


 







 





and which shall control
(to the extent not prohibited by the laws of New York) in the event of any inconsistent
provisions of such law.  Unless the Account Party specifies otherwise in its
Application for a Letter of Credit, the Account Party agrees that Bank may
issue a Letter of Credit subject to the ISP or UCP.  Bank’s privileges, rights
and remedies under the ISP and UCP, as applicable, shall be in addition to, and
not in limitation of, its privileges, rights, and remedies expressly provided
for herein.  The ISP or UCP, as applicable, shall serve, in the absence of
proof to the contrary, as evidence of Standard Letter of Credit Practice with
respect to matters covered therein.  To the extent permitted by applicable law,
as between the Account Party and Bank, (i) this Agreement shall prevail in case of
conflict between this Agreement, the UCC and/or Standard Letter of Credit
Practice, (ii)
the ISP shall prevail in case of conflict between the ISP and the UCC or other
Standard Letter of Credit Practice if the Letter of Credit is governed by the
ISP, and (iii)
the UCP shall prevail in case of a conflict between the UCP and the UCC or
other Standard Letter of Credit Practice if the Letter of Credit is governed by
the UCP.  


16.             
Consent to
Jurisdiction and Venue; Service of process.  The Account PARTY HEREBY CONSENTS TO
THE EXCLUSIVE JURISDICTION OF ANY STATE COURT WITHIN NEW YORK COUNTY, NEW YORK
OR ANY FEDERAL COURT LOCATED WITHIN THE SOUTHERN DISTRICT OF THE STATE OF NEW
YORK OR ANY APPELLATE COURT THEREOF FOR ANY PROCEEDING INSTITUTED HEREUNDER OR
UNDER ANY OF THE OTHER CREDIT DOCUMENTS, OR ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, OR ANY PROCEEDING TO
WHICH BANK OR the Account PARTY IS A
PARTY, INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN
CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF BANK OR PROCEEDING TO WHICH BANK OR THE ACCOUNT
PARTY IS A PARTY.  BANK AND the Account
PARTY IRREVOCABLY AGREE TO BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF
APPEAL) BY ANY JUDGMENT RENDERED OR RELIEF GRANTED THEREBY AND FURTHER WAIVES
ANY OBJECTION THAT IT MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE
OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY SUCH PROCEEDING.  BANK AND
THE ACCOUNT PARTY IRREVOCABLY AGREE THAT SERVICE OF PROCESS MAY BE DULY EFFECTED
UPON IT BY MAILING A COPY THEREOF, BY CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT
ITS ADDRESS SET FORTH IN SECTION 19  BELOW.  NOTWITHSTANDING THE FOREGOING,
NOTHING IN THIS AGREEMENT SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR THE RIGHT OF BANK TO BRING ANY
ACTION OR PROCEEDING AGAINST THE ACCOUNT PARTY OR ITS PROPERTIES IN THE COURTS
OF ANY OTHER JURISDICTION.


On or prior to the Closing Date, the Account Party shall
appoint CT Corporation System (the “Process Agent”), with an office on
the date hereof at 28 Liberty Street, New York, NY 10005 USA, as its agent to
receive on its behalf service of the summons and complaints and any other
process which may be served in any such action or proceeding, provided that a
copy of such process is also mailed to the Account Party in the manner provided
in Section ‎19.  Such service may be made by mailing or delivering a copy
of such process to the Account Party in care of the Process Agent at the
Process Agent's above address, and the Account Party hereby authorizes and
directs the Process Agent to receive such service on its behalf.  Nothing in
this Agreement will affect the right of any party hereto to serve process in
any other manner permitted by applicable law.


If the appointment of any person mentioned in this Section
16 ceases to be effective with respect to the Account Party, the Account Party
must immediately appoint a further person in the State of New York to accept
service of process on its behalf in the State of New York and, if the Account
Party does not appoint a process agent within 15 days, the Account Party
authorizes Bank to appoint a process agent for the Account Party.









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17.             
WAIVER OF JURY TRIAL.  TO THE EXTENT PERMITTED
BY APPLICABLE LAW, THE ACCOUNT PARTY AND BANK KNOWINGLY AND VOLUNTARILY WAIVE
ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED ON, ARISING
OUT OF, OR RELATING TO ANY CREDIT DOCUMENT OR LETTER OF CREDIT, OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (ORAL OR WRITTEN) OR ACTIONS OF THE
ACCOUNT PARTY OR BANK WITH RESPECT THERETO.  THIS WAIVER IS A MATERIAL
INDUCEMENT FOR BANK TO ISSUE LETTERS OF CREDIT.


18.             
Bankruptcy and
Forfeiture Reinstatement.  If any consideration transferred
to Bank in payment of, or as collateral for, or in satisfaction of the
Obligations, shall be voided in whole or in part as a result of (a) a subsequent
bankruptcy or insolvency proceeding; (b) any forfeiture or seizure action or remedy; (c) any fraudulent
transfer or preference action or remedy; or (d) any other civil, criminal or equitable
proceeding or remedy, then Bank’s claim to recover the voided consideration
shall be a new and independent claim arising under the applicable Credit
Document and shall be due and payable immediately by the Account Party that is
obligated therefor under the terms of the Credit Documents.


19.             
Notices.  Unless otherwise
expressly provided herein, all notices, Instructions, approvals, requests,
demands, consents and other communications provided for hereunder
(collectively, “notices”) shall be in writing (including by facsimile or
other electronic transmission approved by Bank).  All notices shall be sent by
regular U.S. mail or certified mail prepaid, by facsimile or other electronic
transmission approved by Bank, by hand delivery, by Federal Express (or
other comparable domestic or international delivery service) prepaid to the
applicable address, facsimile number or electronic mail address set forth on
the signature page hereof of the Account Party or the Bank, as applicable. 
Bank may, but shall not be obligated to, require authentication of any
electronic transmission.  Notices sent by hand, Federal Express (or
other comparable domestic or international delivery service) or certified mail
shall be deemed to have been given when received; notices sent by regular U.S.
mail shall be deemed to have been received five (5) days after deposit into the U.S. mail;
notices sent by facsimile or other electronic transmission shall be deemed to
have been given when sent and receipt has been confirmed.  The Account Party or
Bank may change its address for notices by notifying the other of the new
address in any manner permitted by this Section.  Unless otherwise agreed by
Bank, Bank in its discretion may accept an Application or seek or receive
Instruction from, or give or send notice to, the Account Party regarding a
Letter of Credit issued for its account, including, without limitation, any
amendment thereto or waiver of any discrepancy thereunder, and the Account
Party shall be bound by and hereby affirms the Instructions of the other.  The
Account Party irrevocably consents that service of process may be made by registered
or certified mail directed to the Account Party at the address of its agent for
service of process in Bermuda, Seon Place, 4th floor, 141 Front Street,
Hamilton HM19 Bermuda.    


20.             
Waiver and Amendments.  No
modification, amendment or waiver of, or consent to any departure by Bank or
the Account Party from, any provision of any Credit Document will be effective
unless made in a writing signed by the Account Party (in the case of Bank) or
Bank (in the case of the Account Party), and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which
given.  No party’s consent to any amendment, waiver or modification shall mean
that such party will consent or has consented to any other or subsequent
request to amend, modify or waive a term of any Credit Document.  No delay by
any party in exercising any of its rights or remedies shall operate as a
waiver, nor shall any single or partial waiver of any right or remedy preclude
any other further exercise of that right or remedy, or the exercise of any
other right or remedy. 






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21.             
Successors and Assigns.  Each Credit
Document to which the Account Party is a party will be binding on the Account
Party’s successors and permitted assigns, and shall inure to the benefit of the
respective successors and permitted assigns of the Account Party and Bank. 
Except as provided in the last sentence of this Section 21, Bank may assign its rights and obligations under each Credit Document, 





 


 



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including its rights to
reimbursement regarding any Letter of Credit, in whole or in part, with the
Account Party’s consent; provided that the Account Party shall be deemed to
have consented to any such assignment unless it objects by written notice to
Bank within ten (10)
Business Days after having received notice thereof; and, provided further, that
the Account Party’s consent to an assignment to any Person shall not be
required if (i)
the assignment is to an affiliate of Bank or (ii) an Event of Default has occurred and is
continuing.  Bank may sell to one or more Persons participations in or to all
or a portion of its rights and obligations under the Credit Documents without
the Account Party’s consent.  Any assignment in violation of this Section 21 shall be void.  The Account Party shall not assign or transfer any of its
interests, rights or remedies related to any Credit Document, in whole or in
part, without the prior written consent of Bank.  Any Person to whom Bank
delegates its obligation to issue a Letter of Credit must be a bank that is on
the List of Qualified U.S. Financial Institutions maintained by the Securities
Valuation Office of the National Association of Insurance Commissioners.


22.             
Severability. 
Whenever possible, each provision of each Credit Document shall be interpreted
in a manner as to be effective and valid under applicable law, but if any
provision of any Credit Document shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or any remaining provisions of such Credit Document.


23.             
Entire Agreement.   This Agreement, together with
the other Credit Documents and any other agreement, document or instrument
referred to herein, constitute the final, exclusive and entire agreement and
understanding of, and supersede all prior or contemporaneous, oral or written,
agreements, understandings, representations and negotiations between, the
parties relating to the subject matter of the Credit Documents, provided that
this Agreement shall not supersede any reimbursement agreement (however titled)
that has been entered into specifically with respect to any “direct pay”
standby letter of credit or other similar standby letter of credit where the
terms of such reimbursement agreement have been drafted to specifically address
the particular attributes of, or the particular circumstances of the underlying
transaction supported by, such standby letter of credit.


24.             
Acknowledgement
and Consent to Bail-In.  Notwithstanding
anything to the contrary in any Credit Documents or in any other agreement,
arrangement or understanding among any such parties, each party hereto
acknowledges that any liability of any Affected Financial Institution arising
under any Credit Document, to the extent such liability is unsecured, may be
subject to the Write-Down and Conversion Powers of the applicable Resolution
Authority and agrees and consents to, and acknowledges and agrees to be bound
by:


(a)               
the application of any Write-Down and Conversion Powers by the
applicable EEA Resolution Authority to any such liabilities arising hereunder
which may be payable to it by any party hereto that is an Affected Financial
Institution; and


(b)               
the effects of any Bail-In Action on any such liability, including,
if applicable:


(i)         a
reduction in full or in part or cancellation of any such liability;


(ii)        a
conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such Affected Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Credit Document; or





 





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(iii)       the variation of the terms of such liability
in connection with the exercise of the Write-Down and Conversion Powers of the
applicable Resolution Authority.


(c)               
Capitalized terms used in this Section 24 that are not otherwise
defined in this Agreement have the meanings assigned to them below.


“Affected Financial
Institution”  means (a) any EEA
Financial Institution or (b) any UK Financial Institution.


“Bail-In Action”  means the exercise of any Write-Down and Conversion
Powers by the applicable Resolution Authority in respect of any liability of an
Affected Financial Institution.


“Bail-In
Legislation”  means (a) with
respect to any EEA Member Country implementing Article 55 of Directive
2014/59/EU of the European Parliament and of the Council of the European Union,
the implementing law, regulation rule or requirement for such EEA Member
Country from time to time which is described in the EU Bail-In Legislation
Schedule and (b) with respect to the United Kingdom, Part I of the United
Kingdom Banking Act 2009 (as amended from time to time) and any other law,
regulation or rule applicable in the United Kingdom relating to the resolution
of unsound or failing banks, investment firms or other financial institutions
or their affiliates (other than through liquidation, administration or other
insolvency proceedings).


“EEA Financial
Institution”  means (a) any
credit institution or investment firm established in any EEA Member Country
which is subject to the supervision of an EEA Resolution Authority, (b) any
entity established in an EEA Member Country which is a parent of an institution
described in clause (a) of this definition, or (c) any financial institution
established in an EEA Member Country which is a subsidiary of an institution
described in clauses (a) or (b) of this definition and is subject to
consolidated supervision with its parent.


“EEA Member Country”  means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.


“EEA Resolution
Authority”  means any public
administrative authority or any person entrusted with public administrative
authority of any EEA Member Country (including any delegee) having
responsibility for the resolution of any EEA Financial Institution.


“EU Bail-In
Legislation Schedule”  means the EU
Bail-In Legislation Schedule published by the Loan Market Association (or any
successor person), as in effect from time to time.


“Resolution
Authority”  means an EEA
Resolution Authority or, with respect to any UK Financial Institution, a UK
Resolution Authority.





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“Write-Down and Conversion Powers”  means, (a) with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution
Authority from time to time under the Bail-In Legislation for the applicable
EEA Member Country, which write-down and conversion powers are described in the
EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom,
any powers of the applicable Resolution Authority under the Bail-In Legislation
to cancel, reduce, modify or change the form of a liability of any UK Financial
Institution or any contract or instrument under which that 





 





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liability arises,
to convert all or part of that liability into shares, securities or obligations
of that person or any other person, to provide that any such contract or
instrument is to have effect as if a right had been exercised under it or to
suspend any obligation in respect of that liability or any of the powers under
that Bail-In Legislation that are related to or ancillary to any of those
powers.


(Signature pages
to follow)


 


 





 






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By: 
                                                                         


      
Name:


      
Title:


 


Notice
Details:


 


Everest
Reinsurance (Bermuda), Ltd.


Seon Place, 4th floor


141
Front Street


Hamilton
HM19 Bermuda


Attention:
[___________________________]


Telephone:
[___________________________]


Electronic
Mail:  [___________________________]


Facsimile:  [___________________________] 





 





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BANK:


 


LLOYDS BANK CORPORATE MARKETS
PLC 


 


 


 


By:                                                                                           


       Name:    


      
Title:       


 


 


 


By:                                                                                           


       Name:    


      
Title:       


 


 


Notice
Details: 


 


For
payments, bills and all other operation related issues:


 


Lloyds Bank Corporate Markets
plc


1095 Avenue of the Americas,
34th Floor


New York, NY 10036


Email:  NewYorkOperations@lbusa.com; NY-LC@lbusa.com


 


For
financial information, credit and amendment/waiver requests:


 


Lloyds Bank Corporate Markets
plc


1095 Avenue of the Americas,
34th Floor


New York, NY 10036


Tel: 212-895-9510


Email:  Tracey.Anchundia@lbusa.com 


 


For all L/C
issuances or extension requests:


 


Lloyds Bank Corporate Markets
plc


1095 Avenue of the Americas,
34th Floor


New York, NY 10036


Email:  NY-LC@lbusa.com


 


 


 











 


Schedule I


 


Collateral Base


 




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  Category of
  Collateral

  	
  Maturity

  	
  Advance Rate

  
	
  Cash

  	
  N/A

  	
  100%

  
	
  CDs
  and savings, money market and demand deposit accounts issued by a federally
  insured U.S. bank (rated AA- / Aa3 or better)

  	
  N/A

  	
  95%

  
	
  U.S.
  Government Bills, Bonds and Notes (excluding savings bonds)

  	
  ≤ 5 years

  > 5 years

  	
  95%

  90%

  
	
  U.S.
  Corporate/Municipal Bonds I (rated AA- / Aa3 or better)

  	
  ≤ 5 years

  > 5 years

  	
  90%

  85%

  
	
  U.S.
  Corporate/Municipal Bonds II (rated A1 / A+ through BBB / Baa2,
  nonconvertible, NYSE-traded, denominated in USD)

  	
  ≤ 5 years

  > 5 years

  	
  85% 

  80%

  
	
  Agency
  RMBS (GNMA, FNMA, FHLMC; rated AA- / Aa3 or better) other than securities
  issued pursuant to a re-securitization

  	
  Weighted average life ≤ 2 years

  Weighted average life > 2 years and ≤ 5 years

  Weighted average life > 5 years and ≤ 10 years Weighted average life
  > 10 years

  	
  95% 

  90% 

  85% 

  80%

  
	
  Asset-Backed
  Securities (rated AAA / Aaa or better) other than securities issued pursuant
  to a re-securitization

  	
  Weighted average life ≤ 10 years

  	
  85%

  
	
  Commercial
  Paper

  	
  A1 or P1 Graded Commercial Paper

  	
  90%

  








 


Notes: 


In each case, deposited with or held by the Custodian
in a Custodial Account and capable of being marked to market on a daily basis,
except that:


1.      
No more than 20 percent of the
aggregate Collateral (by reference to Market Value) shall at any time consist
of U.S. corporate bonds rated A1 / A+
through BBB / Baa2;


2.      
In the case of Collateral falling
under Asset-Backed Securities and U.S. Corporate/Municipal Bonds above, no more
than 10 per cent of the aggregate Collateral (by reference to fair market
value) shall at any time shall have been issued by a single issuer;


3.      
No more than 10 per cent of the
aggregate Collateral (by reference to fair market value) shall at any time
consist of collateralized loan obligations;


4.      
Not more than 30 per cent of the
aggregate Collateral (by reference to fair market value) shall consist of
asset-backed securities. For clarity, this is inclusive of collateralized loan
obligations.


 











 


Exhibit A



FORM OF

Officer’s ComplianCe CertificatE





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THIS CERTIFICATE is given pursuant to
Section 7(b)(i) of the Standby Letter of Credit Agreement, dated as of October
8, 2021 (as amended, restated, modified or supplemented from time to time, the
“Credit Agreement,” the terms defined therein being used herein as
therein defined), between EVEREST REINSURANCE (BERMUDA), LTD., an exempted
company incorporated and existing under the laws of Bermuda (the “Account
Party”), and LLOYDS BANK CORPORATE MARKETS PLC (the “Bank”). 


The undersigned hereby certifies that:


1.         He or she is the [Chief Executive Officer] [Chief Financial
Officer] [Vice President—Finance] [Principal Accounting Officer] [Treasurer]
[Assistant Treasurer] of the Account Party.


2.         Enclosed with this Certificate are copies of the financial
statements of the Account Party  as of _____________, and for the [________-month
period]  [year]  then ended, required to be delivered under
Section 7(a) of the Credit Agreement.  Such financial statements have been
prepared in accordance with GAAP [(subject to the absence of notes
required by GAAP and subject to normal year-end adjustments)][1] and present
fairly, in all material respects, the financial condition of the Account Party 
as of the date indicated and the results of operations of the Account Party 
for the period covered thereby.


3.         The undersigned has reviewed the terms of the Credit Agreement
and has made, or caused to be made under the supervision of the undersigned, a
review in reasonable detail of the transactions and condition of the Account
Party during the accounting period covered by such financial statements.


4.         The examination described in paragraph 3 above did not
disclose, and the undersigned has no knowledge of the existence of, any Default
or Event of Default during or at the end of the accounting period covered by
such financial statements or as of the date of this Certificate [, except as
set forth below.


Describe
here or in a separate attachment any exceptions to paragraph 4 above by
listing, in reasonable detail, the nature of the Default or Event of Default,
the period during which it existed and the action that Everest has taken or
proposes to take with respect thereto]. 


5.         Attached to this Certificate as Annex A  is a
covenant compliance worksheet reflecting the computation of the financial
covenants set forth in Section 8 of the Credit Agreement as of the last day of
the period covered by the financial statements enclosed herewith.
















[1]Insert in the case of quarterly financial
statements.









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IN WITNESS WHEREOF, the undersigned has
executed and delivered this Certificate as of the _______ day of _____________,
____.


Everest Reinsurance
(Bermuda), Ltd.


By:                                                                          


Name:                                                                     


Title:                                                                       


 












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Annex
A


 


COVENANT
COMPLIANCE WORKSHEET


 


A.  Minimum
Consolidated Tangible Net Worth


(Section 8(a) of
the Credit Agreement)


 


 


	
  (1)  Consolidated
  Tangible Net Worth

  	
   

  	
   

  	
   

  
	
  a)      
  Required (Minimum CTNW Amount):

  	
   

  	
   

  	
  $[ ]

  
	
  b)     
  Actual: 

  	
   

  	
   

  	
  $        
                  

  






 


 


 


 


 


 












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B. 
Financial Strength Rating


(Section 8(b) of
the Credit Agreement)


 


	
  (1)  Has the Account Party maintained a financial strength rating by
  A.M. Best Company at all times from the date of the most recently delivered
  Officer’s Compliance Certificate to and including the date hereof?

  	
  ___  Yes

  	
  ___  No

  
	
  (2)  Has the financial strength rating by A.M. Best Company for the
  Account Party been equal to or better than “B++” at all times during the
  period described in line (1) above?

  	
  ___  Yes

  	
  ___  No

  






 


  









 


Exhibit b



FORM OF

COLLATERAL VALUE Certificate


 


____________, 20__


Lloyds Bank Corporate Markets
plc


1095 Avenue of the Americas,
34th Floor


New York, NY 10036


Attention: Tracey Anchundia,
Director - Insurance, Financial Services


Ladies
and Gentlemen:


Reference is made to the Standby Letter of
Credit Agreement, dated as of October 8, 2021, between EVEREST REINSURANCE
(BERMUDA), LTD., an exempted company incorporated and existing under the laws
of Bermuda (the “Account Party”), and LLOYDS BANK CORPORATE MARKETS PLC
(the “Bank”) (as amended or otherwise modified from time to time, the “Credit
Agreement”).  Terms defined in the Credit Agreement are, unless otherwise
defined herein or the context otherwise requires, used herein as defined
therein.


This Collateral Value
Certificate is delivered pursuant to Section 7(d)(iii) of the Credit
Agreement.  The date of this Collateral Value Certificate is _____________,
20__ (the “Certificate Date”).  Set forth on Attachment A  is
the computation of the Collateral Value of the Collateral and certain other
information required by Section 7(d)(iii) of the Credit Agreement as of
______________, 20__ (the “Valuation Date”), calculated in accordance
with the definition of “Collateral Value” contained in the Credit Agreement and
the other provisions of the Credit Agreement (including Schedule I thereto).


The undersigned hereby
certifies that (i) the information on Attachment A  correctly
sets forth the Collateral Value (in the aggregate and for each category of
Collateral) and the Outstanding Letters of Credit as of the Valuation Date;
(ii) the Outstanding Letters of Credit do not exceed the aggregate
Collateral Value as of the Valuation Date; and (iii) nothing has come to
the attention of the undersigned to cause the undersigned to believe that Bank
does not have a first priority perfected Lien on and security interest in the
Collateral set forth on Attachment A  as of the Certificate Date.


[Signature page to follow]














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ACCOUNT
PARTY: 


 


Everest Reinsurance (Bermuda),
Ltd.


 


By: 
                                                                        


      
Name:


      
Title:


 


 





 





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Attachment A


 


COLLATERAL VALUE OF THE COLLATERAL 


 


 




	
  Category of Collateral

  	
  Maturity

  	
  Fair Market Value

  	
  Advance Rate

  	
  Collateral Value

  
	
  Cash

  	
  N/A

  	
  $________

  	
  100%

  	
  $________

  
	
  CDs
  and savings, money market and demand deposit accounts issued by a federally
  insured U.S. bank (rated AA- / Aa3 or better)

  	
  N/A

  	
  $________

  	
  95%

  	
  $________

  
	
  U.S.
  Government Bills, Bonds and Notes (excluding savings bonds)

  	
  ≤ 5 years

  > 5 years

  	
  $________

  $________

  	
  95% 

  90%

  	
  $________

  $________

  
	
  U.S.
  Corporate/Municipal Bonds I (rated AA- / Aa3 or better)

  	
  ≤ 5 years

  > 5 years

  	
  $________

  $________

  	
  90% 

  85%

  	
  $________

  $________

  
	
  U.S.
  Corporate/Municipal Bonds II (rated A1 / A+ through BBB / Baa2,
  nonconvertible, NYSE-traded, denominated in USD)

  	
  ≤ 5 years

  > 5 years

  	
  $________

  $________

  	
  85% 

  80%

  	
  $________

  $________

  
	
  Agency
  RMBS (GNMA, FNMA, FHLMC; rated AA- / Aa3 or better) other than securities
  issued pursuant to a re-securitization

  	
  Weighted average life ≤ 2 years

  Weighted average life > 2 years and ≤ 5
  years

  Weighted average life > 5 years and ≤ 10
  years

  Weighted average life > 10 years

  	
  $________

   

  $________

   

  $________

  $________

  	
  95% 

   

  90% 

   

  85% 

  80%

  	
  $________

   

  $________

   

  $________

  $________

  
	
  Asset-Backed
  Securities (rated AAA / Aaa or better) other than securities issued 

  	
  Weighted average life ≤ 10 years

  	
  $________

  	
  85%

  	
  $________

  











 




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  pursuant to a re-securitization

  	
   

  	
   

  	
   

  	
   

  
	
  Commercial
  Paper

  	
  A1 or P1 Graded Commercial Paper

  	
  $________

  	
  90%

  	
  $________

  
	
  Total
  Collateral Value

  	
   

  	
   

  	
   

  	
  $________

  








 


Notes: 


 


In each case, deposited with or held by the Custodian
in a Custodial Account and capable of being marked to market on a daily basis,
except that:


1.      
No more than 20 percent of the
aggregate Collateral (by reference to fair market value) shall at any time
consist of U.S. corporate bonds rated A1 / A+
through BBB / Baa2;


2.      
In the case of Collateral falling
under Asset-Backed Securities and U.S. Corporate/Municipal Bonds above, no more
than 10 per cent of the aggregate Collateral (by reference to fair market
value) shall at any time shall have been issued by a single issuer;


3.      
No more than 10 per cent of the
aggregate Collateral (by reference to fair market value) shall at any time
consist of collateralized loan obligations;


4.      
Not more than 30 per cent of the
aggregate Collateral (by reference to fair market value) shall consist of
asset-backed securities. For clarity, this is inclusive of collateralized loan
obligations.


 












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Outstanding Letters
of Credit




	
  Beneficiary

  	
  Issue Date

  	
  Undrawn Amount

  	
  Unreimbursed Drawings

  
	
   

  	
   

  	
  $________

  	
  $________

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Outstanding Letters of Credit

  	
   

  	
  $________

  	
  $________

  








Ratio of aggregate
Collateral Value to Outstanding Letters of Credit: ____________












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Exhibit C



FORM OF APPLICATION


 


 


See attached.











 


APPLICATION AND AGREEMENT
FOR STANDBY LETTER OF CREDIT


 


Date
____________    L/C No. _____________                                             


 


Dear
Sir or Madam 


 


Please
issue an IRREVOCABLE Standby Letter of Credit (the “Credit”), by _____ 
courier   _____  SWIFT as follows :


 


	
      ADVISING BANK (if applicable):

  	
  FOR ACCOUNT OF EVEREST REINSURANCE (BERMUDA), LTD.

   

   

  
	
  IN FAVOR OF (BENEFICIARY’S NAME)

   

  	
  AMOUNT AND CURRENCY IN WORDS

   

   

  DATE AND PLACE OF EXPIRATION

  _______________  Lloyds Bank Corporate Markets plc counters in New
  York

  






 


In
consideration of your issuing the Credit substantially in accordance with this
application, the undersigned hereby agrees that the terms and conditions as set
forth in the Standby Letter of Credit Agreement (as amended, supplemented or
otherwise modified from time to time, the “Agreement”) dated as of October 8,
2021 between Lloyds Bank Corporate Markets plc (the “Bank”) and the undersigned
shall apply to the Credit and to the obligations of the undersigned to the Bank
with respect thereto. Unless otherwise agreed between the parties, the letter
of credit commission payable by us in respect of the Credit shall be calculated
at a rate of __ per cent (__%) calculated in accordance with the Agreement.


 


Please issue the Credit
substantially in the form attached. 


 


Covering [brief description
of what the Letter of Credit is covering]:


 


Special Instructions (if
needed):


 


Applicant:


 


EVEREST REINSURANCE
(BERMUDA), LTD.


 


By:
__________________________


Name:


Title:


 


Date:


 



















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