Document:

November 9, 2018

    

    

    

    

    Everest International Reinsurance, Ltd.

    Seon Place, 4th Floor

    141 Front Street

    Hamilton, HM 19

    P.O. Box HM 845

    Telecopy Number: (441) 295-4828

    Attention: Mark de Saram

    

    

    Ladies and Gentlemen:

    

    

    Ref: Amendment Agreement – Standby Letter of Credit Facility

    

    

    This Letter Agreement (the “Amendment Agreement”) is made as of November 9, 2018 between Lloyds Bank plc (the “Bank” or “us”)

        and Everest International Reinsurance, Ltd., a company organized under the laws of Bermuda (the “Company”, “you” or “your”) in connection to that certain: (i) letter agreement dated as of November 9, 2015 between the Bank and the Company (as the same may have been amended or
        restated the “Facility Letter Agreement”), (ii) Master Agreement for Standby Letters of Credit and Demand Guarantees dated as of November 9,
        2015 between the Bank and the Company (as the same may have been amended or restated the “Master Agreement”), (iii) the Pledge and Security
        Agreement dated as of November 9, 2015 (as the same may have been amended or restated the “Pledge and Security Agreement”) and (iv) Account
        Control Agreement, dated as of November 9, 2015 made among the Company, the Bank and The Bank of New York Mellon (as the same may have been amended or restated the “Account Control Agreement” together with, the Facility Letter Agreement, the Master Agreement and the Pledge and Security Agreement, the “Existing Documents”). Unless otherwise specified herein, all terms defined in this Amendment Agreement shall have the meanings as provided for in the relevant Related Documents.

    

    

    You have advised us of your intention to amend and extend the termination date of your £145,000,000 (as such amount may be
        reduced as hereinafter provided) bilateral FAL facility in support of your obligation to provide Funds at Lloyd’s to support your and any Other Party’s business assumed as a member of certain syndicates at Lloyd’s for the 2019 Year of Account.

    

    

    In consideration of the mutual covenants and agreements herein contained the parties hereto agree and covenant to amend the Existing
        Documents as follows:

    

    

    Amendment:

    

    

    Facility Letter

    
      	
              1.

            	
              Any and all references to “Related Documents”, in any Related Documents, shall be read to include this Amendment Agreement.

            

    

    

    

    
      	
              2.

            	
              The reference to “£145,000,000” in the first paragraph of the Facility Letter is deleted and replaced with “£30,000,000”.

            

    

    

    

    
      	
              3.

            	
              The reference to “December 31, 2017” in the second paragraph of the Facility Letter is deleted and replaced by “December 31, 2018.”

            

    

    

    
    
      
        

        

        

        Lloyds Bank plc. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065.
            Telephone: 020 7626 1500.Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under number 119278.

        Lloyds Bank plc is covered by the Financial Services Compensation Scheme and the Financial Ombudsman Service.
            (Please note that due to the schemes' eligibility criteria not all Lloyds Bank business customers will be covered by these schemes.)

        
          
            

        

         

    

    

    

    

    
      	
              4.

            	
              The reference to “December 31, 2020” in the sixth  paragraph (Conditions Precedent) of the Facility Letter is deleted and replaced by “December 31, 2021”

            

    

    

    

    
      	
              5.

            	
              The reference to “December 31, 2017” in the seventh paragraph of the Facility Letter is deleted and replaced by “December 31, 2018.” and

            

    

    

    

    
      	
              6.

            	
              The reference to “31 December 2018” in the eighth paragraph of the Facility Letter is deleted and replaced by “31 December 2019.”

            

    

    

    

    
      	
              7.

            	
              The reference to “2019” in the seventh paragraph of the Facility Letter is deleted and replaced by “2020.”

            

    

    

    

    

    

    
      	
              8.

            	
              The reference to “December 31, 2020” in footnote 3 in Exhibit B (Form of Application for Irrevocable Standby Letter of Credit) to the Facility
                  Letter is deleted and replaced by “December 31, 2022.”

            

    

    

    

    
      	
              9.

            	
              The reference to “[2016]” in Clause 4 of Exhibit B (Form of Application for Irrevocable Standby Letter of Credit) to the Facility Letter is
                  deleted and replace by “[2019 ]”.

            

    

    

    

    

    

    
      	
              10.

            	
              The reference to “Section (n)” in the opening paragraph of Exhibit B (Form of Compliance Certificate) to Exhibit C to the Facility
                  Letter is deleted and replaced by “Section 6(n)”.

            

    

    

    

    
      	
              11.

            	
              The references to “December 31, 2016” in clause 2(a) and clause 2(c) (Minimum Consolidated Net Worth) in Section B of Attachment A
                  (GAAP Covenant Compliance Worksheet) to Exhibit B (Form of Compliance Certificate) to Exhibit C to the Facility Letter are deleted and replaced by “December 31, 2017 in both instances

            

    

    

    

    Master Agreement

    1    The reference to “December 31, 2021” in the definition of Termination Date in the Master Agreement is deleted and replaced by “December 31, 2022.”

    

    

    2.   The references to
        “December 31, 2016” in clause (i) and clause (ii) of the definition of Minimum Amount in Clause 2 of  Schedule 8(d) (Financial Covenants) in the Master
        Agreement are deleted and replaced by “December 31, 2017” in both instances.

    

    

    3.   A new Section 20
        is added to the Master Agreement by inserting the following:

    

    

    
      
        	20.	
                Notwithstanding any other term of this Agreement or Related Documents or any other document, agreement, or instrument relating to the this Agreement or the Related
                    Documents, the Applicant accepts and acknowledges that any liability of the Bank, as an EEA Financial Institution, may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the
                    effect of:

              

      

    

    

    

    (a)    any Bail-In Action in relation to any such liability, including (without limitation):

    

    

    (i)      a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;

    (ii)     a conversion of all, or part of, any such liability into
        shares or other instruments of ownership that may be issued to, or conferred on, it; and

    (iii)      a cancellation of any such liability; and

    

    

    (b)    a variation of any term of any Related Document to the extent
        necessary to give effect to any Bail-In Action in relation to any such liability.

    
      2

      
        

    

    

    

    "Bail-In Action" means the exercise of any Write-down and Conversion Powers.

    "Bail-In Legislation" means in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of
        Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms , the relevant implementing law or regulation  as described in the EU Bail-In Legislation Schedule from time to time.

    “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 member state of the European Union, Iceland, Liechtenstein and Norway.

    "EU Bail-In Legislation Schedule" means the document described as such and published by the Loan Market Association (or any successor
        person) from time to time.

    "Resolution Authority" means any body which has authority to exercise any Write-down and Conversion Powers.

    "Write-down and Conversion Powers" means in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from
        time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule.

    

    

    

    

     

    

    

    

    Conditions Precedent:

    

    

    This Amendment Agreement shall become effective and the effective date shall occur upon the satisfaction of the following conditions
        (and the documents required to be delivered shall be in form and substance satisfactory to the Bank) (the first date on which all of the following conditions are satisfied or waived by the Bank, the “Effective Date” but which must occur on or
        before December 31, 2018):

    

    

    
      	
              1.

            	
              delivery of this Amendment Agreement duly executed by the Company;

            

    

    

    

    
      	
              2.

            	
              delivery of copies of the organic documents of the Company certified as true and correct and up to date by the Secretary or Assistant Secretary
                  of the Company or that the documents previously delivered by the Company pursuant to the Facility Letter have not changed;

            

    

    

    

    
      	
              3.

            	
              delivery of a certificate of the Secretary or Assistant Secretary of the Company, attaching and certifying copies of the resolutions of its
                  board of directors authorizing the execution and delivery of the Amendment Agreement and the performance of the transactions contemplated herein and therein, and certifying the name, title, and true signature of each officer of the
                  Company authorized to execute the Amendment Agreement and the other Related Documents;

            

    

    

    

    
      	
              4.

            	
              delivery of a good standing certificate or comparable certificate relating to the Company’s good standing under the laws of the jurisdiction of
                  its organization if such is available in such jurisdiction;

            

    

    

    

    
      	
              5.

            	
              satisfactory completion by the Bank of all “know your customer” checks;

            

    

    

    

    
      	
              6.

            	
              delivery of favorable opinions of counsel to the Company addressed to the Bank and covering matters customary for a transaction of this nature;

            

    

    

    

    
      	
              7.

            	
              Evidence satisfactory to the Bank that all necessary or appropriate steps have been taken (including the filing of a UCC-1 financing statement
                  and the registration of a charge under Bermuda law) have been taken in order to perfect the lien and security interest of the Bank in the collateral pledged to the Bank pursuant to the Pledge and Security Agreement together with
                  satisfactory UCC and Bermuda lien searches;

            

    

    
      3

      
        

    

    
      	

            	

            

    

    
      	
              8.

            	
              The Bank shall have received evidence of acceptance by CT Corporation System of its appointment of agent of service of process for the Company
                  pursuant to Section 19 of the Master Agreement;

            

    

    

    

    
      	
              9.

            	
              No Event of Default under the Master Agreement shall have occurred and be continuing; and

            

    

    

    

    
      
        	
                10.

              	
                The representations and warranties set out in the Existing Documents are true and correct in all respects as if made on the Effective Date except to the extent they
                    refer to an earlier date in which case they shall be true and correct as of such date.

              

      

    

    

    

    Entire Agreement; Restatement:

    

    

    This Amendment Agreement and the Existing Agreements constitute the entire agreement and understanding of the parties with respect to
        its subject matter and supersedes all oral communications and prior writings (except as otherwise provided herein) with respect thereto

    

    

    Save as amended hereby, all terms and conditions of the Existing Documents will continue in full force and effect. References to the
        Existing Documents will be to the Existing Documents, as amended by this Amendment Agreement.

    

    

    Counterparts:

    

    

    This Agreement may be executed by the parties hereto individually, or in any combination of the parties hereto, in two or more
        counterparts, each which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Amendment Agreement by any electronic imaging means
        (including portable document format) shall be effective as delivery of a manually executed counterpart of this Amendment Agreement; provided, however, that, the Bank
        shall require any request for a Letter of Credit delivered via email to attach such request, signed by authorized signatories, in portable document format.

    

    

    Governing Law:

    

    

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

    

    

    [Signature page to follow]

    

    

    
      4

      
        

    

    

    

    

    

    	
            Yours sincerely,

          
	
            LLOYDS BANK PLC

          
	 
	 
	
            By:___/S/SARAH CHAVY ___________________

          
	
            Name: SARAH CHAVY

              

          
	
            Title: ASSOCIATE DIRECTOR

              

          
	 
	 
	
            By:________________________________

          
	
            Name:

          
	
            Title:

          

    

    

    

    

    	
            Acknowledged and agreed (in counterpart) this ____

          
	day of November, 2018
	 
	
            EVEREST INTERNATIONAL REINSURANCE, LTD.

          
	 
	 
	
            By:__/S/ SANJOY MUKHERJEE______________

          
	
            Name: SANJOY MUKHERJEE

              

          
	
            Title: CEO

              

          

    

    

    

    

  

  5Exhibit

Exhibit 10.1

SUMMIT FINANCIAL GROUP, INC.

BOARD ATTENDANCE AND COMPENSATION POLICY

1.    PURPOSE AND CONTENTS

General

This section outlines the Summit Financial Group and its subsidiaries Board Attendance and Compensation Policy, formalized by the Board of Directors of Summit Financial Group, Inc. on the date indicated above.

Topics covered in this policy are:

	
				
	Meeting Fees for Holding Company Board Members
	Topic 2

	Retainer and Meeting Fees for Subsidiary Board Members
	Topic 3

	Meeting Fees for Division Board Members
	Topic 4

	Employee-Directors
	Topic 5

	Deferred Compensation Plan
	Topic 6

	Payment by Direct Deposit and Deferral of Payments
	Topic 7

	Expense Reimbursement
	Topic 8

	Attendance
	Topic 9

	Renomination
	Topic 10

	Mandatory Retirement
	Topic 11

	Benefits
	Topic 12

	Stock Requirements 
	Topic 13

Effective Date

All employees of Summit Financial Group, Inc., herein referred to as the “Summit”, must comply with the terms of this policy immediately.  Managers, employees and technical personnel must modify system configurations and procedures, if necessary, to comply with the terms of this plan within 10 business days.

2.    MEETING FEES FOR HOLDING COMPANY BOARD MEMBERS

Summit board members will be paid as follows:
		
	•
	$500 per board meeting attended if the board meeting is held on a different date than a subsidiary bank board meeting

		
	•
	$300 per committee meeting attended (unless otherwise noted);

		
	•
	$300 per Equity Compensation Committee meeting if held on a different date than a Compensation and Nominating Committee meeting

		
	•
	$750 per Audit Committee meeting attended;

		
	•
	$750 per Compensation and Nominating Committee attended;

		
	•
	$500 per Executive Committee meeting attended.

Members of the board of directors of Summit may attend board meetings or committee meetings in person or by video conference.  Any member of any board or committee may attend meetings by telephone, but payment will be made for only four (4) meetings (either board or committee) in any given year where attendance is by telephone.  Notwithstanding the foregoing, members of the Audit Committee should not attend meetings by telephone.  In addition, Audit Committee members shall receive no other remuneration other than the retainer fees and fees per meeting set forth herein for serving on the Audit Committee.

3.    RETAINER AND MEETING FEES FOR SUBSIDIARY BOARD MEMBERS

Members of the board of directors of the subsidiaries of Summit will be paid $10,000 retainer fee.  The retainer fee will be paid on May 31st each year to every director who is scheduled to serve through December 31st of said year.  In addition to the above retainer fees and fees per board meeting attended, board committee members (except for Executive Committee) will also be paid $300 per committee meeting attended.  Executive Committee members will be paid $500.00 per Executive Committee meeting attended.  Members of board committees may attend committee meetings in person or by video conference.  Any member of any board or committee may attend meetings by telephone, but payment will be made for only four (4) meetings (either board or committee) in any given year where attendance is by telephone.  

4.    MEETING FEES FOR DIVISION BOARD MEETINGS

The Chairman of each division shall appoint individuals to serve as a member of the division board of directors.  Each division board member shall serve for a term of two (2) years and may be re-appointed for an additional two-year term.  The division board of directors shall operate solely as an advisory board and shall have no authority to manage the business and property of Summit or its subsidiaries or to direct the operations of Summit or its subsidiaries.  Members of each division board of directors shall not be paid a retainer fee; however each member of the division board of directors shall be paid a fee per meeting attended as set by the CEO of Summit.  The fee shall only be paid for division board of directors who attend in person.  

5.    EMPLOYEE-DIRECTORS

If an individual is a member of the board of directors of Summit or any of its subsidiaries and is also an employee of Summit or any of its subsidiaries, then such employee/director shall be paid the retainer fees and the fees for each board meeting attended as set forth above; however, such employee/director shall not be paid the fees for each committee meeting attended. 

6.    DEFERRED COMPENSATION PLAN

A deferred compensation plan (“Director Deferred Compensation Plan”) for the members of the board of directors of the subsidiaries of Summit was established to allow members of the board of directors of the subsidiaries of Summit to defer their  compensation.  For further details please refer to the Director Deferred Compensation Plan.  Election to participate in the Director Deferral Plan is only allowed once a year at a set time per the plan documents.  

7.    PAYMENT BY DIRECT DEPOSIT AND DEFERRAL OF PAYMENTS

The retainer fees and per meeting fees described above may be paid by direct deposit into each board member’s Summit Financial Group, Inc. subsidiary bank account or the fees can be deferred if the board member is a participant in the Director Deferral Plan.  If payment is made by a direct deposit to a board member’s account, then it will be made on the last day of the month; however, if the last day of the month falls on a weekend, the direct deposit will be made on the previous Friday.  If the meeting date falls after the deadline for payroll, payments will be made the following month for attendance at a meeting.

8.    EXPENSE REIMBURSEMENT

Any member of the board of directors of Summit or any of its subsidiaries who must travel in excess of sixty (60) miles round trip from his primary residence or place of business to attend a board meeting or committee meeting is eligible for reimbursement of direct expenses including, but not limited to, mileage and hotel expenses.  Requests must be filed within 90 days of meeting date.  Forms are available from the Human Resources Department for this purpose.

9.    ATTENDANCE

Summit owns all of the shares of stock of each of its subsidiaries, and therefore, Summit has the power to elect the directors of each of its subsidiaries.   Members serving on the board of directors of each of Summit’s subsidiaries serve at the will and pleasure of the board of directors of Summit.  Serving on the board of directors of a financial institution is a very serious commitment.  In order to do the job properly, directors must set aside the time to attend the board and committee meetings.  If a director fails to attend at least 75% of the board and committee meetings of which he is a member for any given calendar year, then the director will be placed on attendance probation.  If a director does not attend at least 75% of the board and committee meetings for two consecutive years, then the board will ask the individual to resign unless the director submits a good reason for his or her absence.  Acceptable reasons for failing to attend board and committee meetings include, but are not limited to, public service, personal health problems, or family health problems.  

10.    RENOMINATION

Each year, the Nominating Committee will meet to assess the performance of all board members and make a recommendation to the full board of Summit as to which board members should be renominated.  The Nominating Committee will assess whether each member is continuing to fulfill his or her fiduciary duties to the board.  Additionally the Nominating Committee will assess the contribution by said board members to furthering the mission of their respective bank.

11.    MANDATORY RETIREMENT

Members of the Board of Directors of Summit and its subsidiaries are subject to a mandatory retirement age of 75.  When a Summit or subsidiary bank board member reaches age 75, he/she will not be renominated.  If a Summit or subsidiary bank board member would attain the age of 75 at any time during his or her three year term, then such director will be nominated for such lesser term so as to comply with the mandatory retirement age.  The following exceptions have been made to this requirement:

		
	1.
	Members of the board of directors of Summit who were board members of Potomac Valley Bank and who were the age of 60 at the time of the Potomac Valley Bank merger into Summit may be re-nominated until the age 80, provided such board member’s service is consistent with prudent banking practices and such board member fulfills his or her fiduciary duty to Summit to Summit’s satisfaction.

		
	2.
	Any member of the board of directors of Summit or any of its subsidiaries who remains an active employee of Summit or any of its subsidiaries is not subject to mandatory retirement because of age.

		
	3.
	The division board members are not subject to mandatory retirement because of age.

12.    BENEFITS

Individuals who were members of either the South Branch Valley National Bank board or members of the Potomac Valley Bank board at the time of merger, will continue benefits provided before the merger until their mandatory retirement from the board.  At retirement, the board member may continue their benefits through Summit provided the board member pays 100% of the premium of the benefit.  

Any future offer of benefits will be reviewed and approved by the Compensation Committee before being offered to the board members.

13.    STOCK REQUIREMENTS

In order to be elected to and maintain a seat on the board of directors of Summit or any of its subsidiaries, a member must hold in his or her own right, a minimum number of shares of the stock of Summit. Regulations promulgated by West Virginia law set forth the minimum number of shares that must be owned by each director.  Qualifying share ownership for directors of Summit Community Bank are governed by West Virginia law.  The bylaws of Summit set forth more stringent requirements than established by West Virginia law.  In addition, this policy establishes more stringent requirements than the requirements set forth in the bylaws of Summit Community Bank. Summit stock held in the Director Deferred Compensation Plan will be counted towards the minimum requirement of stock that each member of the board of directors of each subsidiary of Summit must own to maintain a seat on the board of directors.
  

The requirements are as follows:  

•    Summit Financial Group, Inc.
    
West Virginia law provides that each director of Summit must own in his or her own right, common or preferred stock of Summit, in an amount equal to or greater than any one of the following:
        
(i)    aggregate par value of $500.00;
(ii)    aggregate shareholders’ equity of $500.00; or
(iii)    aggregate fair market value of $500.00.

Determination of the fair market value of the director’s stock in Summit is based on the value of the stock on the date it was purchased or on the date that the individual became a director, whichever is greater.  

Directors should be aware that although based on the current market value of Summit stock, the minimum number of shares required to be owned under this policy exceeds the regulatory minimum, a decrease in the market value of Summit stock could require directors to purchase more shares to meet the regulatory minimums discussed below.
 
Summit’s bylaws and this policy impose more stringent requirements on directors than imposed by West Virginia law.  Summit’s bylaws and this policy require that each director own in his or her own right, a minimum of 2,000 shares of Summit’s common stock.  This minimum number of shares shall be proportionately increased for any stock splits.  Summit’s bylaws specify that the following shares are held in a director’s “own right”: (i) shares held solely in the director’s name; (ii) shares held through the corporation’s employee stock option plan, a profit-sharing plan, individual retirement account, retirement plan or similar arrangement; and (iii) shares owned by a company where the director owns a controlling interest.  

The West Virginia Attorney General has interpreted the language “own in his own right” in the West Virginia statute governing qualifying shares, W.Va. Code § 31A-4-8, to exclude any shares that a director owns jointly.  Accordingly, Summit’s bylaws and this policy allow shares held jointly by a director and his or her spouse to be counted when determining whether the director owns 2,000 shares of common stock in his or her own right, as long as the director owns stock in his or her own name with a minimum value (calculated by the par value, shareholder’s equity or fair market value) of at least $500 (the minimum imposed by West Virginia law).  

•    Summit Community Bank 

West Virginia state law and the bylaws of Summit Community Bank provide that each director of Summit Community Bank must own in his or her own right, common or preferred stock of Summit, in an amount equal to or greater than any one of the following:

(i)    aggregate par value of $500.00;
(ii)    aggregate shareholders’ equity of $500.00; or
(iii)    aggregate fair market value of $500.00.

Determination of the fair market value of the director’s stock in Summit is based on the value of the stock on the date it was purchased or on the date that the individual became a director, whichever is greater.  

This policy imposes more stringent requirements on directors of Summit Community Bank than imposed by West Virginia state law and the bylaws of Summit Community Bank.  This policy requires that each member of the board of directors of Summit Community Bank own, in his or her own right, a minimum of one-thousand (1,000) shares of common stock of Summit.  This minimum number of shares shall be proportionately increased for any stock splits.  For purposes of determining whether shares are owned by a director in his or her own right, the following shares shall be deemed owned by a director in his or her own right: (i) shares held solely in the director’s name; (ii) shares held through the Summit’s employee stock ownership plan, the Director Deferred Compensation Plan, a profit-sharing plan, individual retirement account, retirement plan or similar arrangement; and (iii) shares owned by a company where the director owns a controlling interest.  Shares held jointly by a director and his or her spouse may also be counted when determining whether the director owns 1,000 shares of common stock in his or her own right as long as the director owns stock in his or her own right with a minimum value (calculated by the par value, shareholder’s equity or fair market value) of at least $500.  

*  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *

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