EVENT WHICH, WITH THE
GIVING OF NOTICE OR LAPSE OF TIME, OR BOTH, WOULD BECOME A DEFAULT) UNDER, OR
GIVE TO ANY PERSON ANY RIGHTS OF TERMINATION, ACCELERATION OR CANCELLATION OF,
ANY AGREEMENT, LEASE, NOTE, BOND, LOAN OR CREDIT AGREEMENT, MORTGAGE, INDENTURE
OR OTHER INSTRUMENT, OBLIGATION OR CONTRACT OF ANY KIND TO WHICH THE REINSURER
OR ANY OF ITS SUBSIDIARIES IS A PARTY OR BY WHICH THE REINSURER OR ANY OF ITS
SUBSIDIARIES OR ANY OF THEIR RESPECTIVE PROPERTIES OR ASSETS IS BOUND OR
AFFECTED, EXCEPT, IN THE CASE OF CLAUSE (III), ANY SUCH
31
CONFLICTS, VIOLATIONS, BREACHES, LOSS OF CONTRACTUAL BENEFITS, DEFAULTS OR
RIGHTS THAT, INDIVIDUALLY OR IN THE AGGREGATE, DO NOT HAVE, AND WOULD NOT
REASONABLY BE EXPECTED TO HAVE, A MATERIAL ADVERSE EFFECT ON THE REINSURER'S
ABILITY TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT.
(D)
SOLVENCY.
THE REINSURER IS AND WILL BE SOLVENT ON A STATUTORY
BASIS IMMEDIATELY AFTER GIVING EFFECT TO THIS AGREEMENT.
FOR THE PURPOSES OF
THIS SECTION 17.03(D), "SOLVENT" MEANS THAT: (I) THE AGGREGATE ASSETS OF THE
REINSURER ARE GREATER THAN THE AGGREGATE LIABILITIES OF THE REINSURER, IN EACH
CASE DETERMINED IN ACCORDANCE WITH THE REGULATIONS PROMULGATED BY THE BERMUDA
MONETARY AUTHORITY; (II) THE REINSURER DOES NOT INTEND TO, AND DOES NOT BELIEVE
THAT IT WILL, INCUR DEBTS OR OTHER LIABILITIES BEYOND ITS ABILITY TO PAY SUCH
DEBTS AND OTHER LIABILITIES AS THEY COME DUE AND (III) THE REINSURER IS NOT
ENGAGED IN A BUSINESS OR TRANSACTION, AND DOES NOT CONTEMPLATE ENGAGING IN A
BUSINESS OR TRANSACTION, FOR WHICH THE REINSURER'S ASSETS WOULD CONSTITUTE
UNREASONABLY INSUFFICIENT CAPITAL.
(E)
ACCURACY OF BOOKS AND RECORDS.
THE REINSURER MAINTAINS RECORDS
AND IMPLEMENTS ADMINISTRATIVE AND OPERATING PROCEDURES WITH RESPECT TO SUCH
RECORDS, AND KEEPS AND MAINTAINS ALL MATERIAL DOCUMENTS, BOOKS AND RECORDS
REASONABLY NECESSARY IN THE ORDINARY COURSE OF BUSINESS, WHICH DOCUMENTS, BOOKS
AND RECORDS ARE COMPLETE AND ACCURATE IN ALL MATERIAL RESPECTS, WITH THE UTMOST
GOOD FAITH AND WITH THE SKILL, DILIGENCE AND EXPERTISE THAT WOULD REASONABLY BE
EXPECTED FROM QUALIFIED PERSONNEL PERFORMING SUCH DUTIES IN LIKE CIRCUMSTANCES.
(F)
GOVERNMENTAL LICENSES.
THE REINSURER HAS ALL PERMITS NECESSARY
TO CONDUCT ITS BUSINESS AS CURRENTLY CONDUCTED, EXCEPT IN SUCH CASES WHERE THE
FAILURE TO HAVE A PERMIT HAS NOT HAD AND WOULD NOT REASONABLY BE EXPECTED TO
HAVE A MATERIAL ADVERSE EFFECT WITH RESPECT TO THE REINSURER.
ALL PERMITS THAT
ARE MATERIAL TO THE CONDUCT OF THE REINSURER'S BUSINESS ARE VALID AND IN FULL
FORCE AND EFFECT.
THE REINSURER IS NOT SUBJECT TO ANY PENDING ACTION OR, TO THE
KNOWLEDGE OF THE REINSURER, ANY THREATENED ACTION THAT SEEKS THE REVOCATION,
SUSPENSION, TERMINATION, MODIFICATION OR IMPAIRMENT OF ANY PERMIT THAT, IF
SUCCESSFUL, WOULD REASONABLY BE EXPECTED TO HAVE, OR WITH THE PASSAGE OF TIME
BECOME, A MATERIAL ADVERSE EFFECT WITH RESPECT TO THE REINSURER.
(G)
NO MATERIAL ADVERSE EFFECT.
SINCE JULY 15, 2009, THERE HAS NOT
OCCURRED ANY EVENT OR EVENTS THAT, INDIVIDUALLY OR IN THE AGGREGATE, HAS OR HAVE
HAD OR WOULD BE REASONABLY EXPECTED TO HAVE A