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$200,000,000
Multicurrency Letter of Credit Facility Agreement
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Dated
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31 August 2011
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FLAGSTONE RÉASSURANCE SUISSE SA (as
Borrower) (1)
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FLAGSTONE
CAPITAL MANAGEMENT LUXEMBOURG SICAF-FIS (as Collateral Provider)
(2)
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BARCLAYS BANK
PLC (as Issuing Bank) (3)
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1390/B23985.23/CORP2:3020236.8/AGAA
TABLE OF CONTENTS
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THIS AGREEMENT is dated 31 August 2011 and made
between:
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FLAGSTONE
RÉASSURANCE SUISSE SA (company number CH-621.3.007.041-9), a company
incorporated in Switzerland whose registered office is at 1, rue du
Collège, CH-1920 Martigny, Switzerland as borrower (the
“ Borrower ”); and
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FLAGSTONE
CAPITAL MANAGEMENT LUXEMBOURG SICAF-FIS a public limited liability company (
société anonyme ) incorporated under the laws
of Luxembourg qualifying as a specialised investment fund (
fonds d’investissement spécialisé ),
having its registered office at 37, Val St André, L-1128
Luxembourg, registered with the Luxembourg trade and companies
register under number B141.810, ( (the “ Collateral
Provider ”); and
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BARCLAYS
BANK PLC as issuing bank
(the “ Issuing Bank ”).
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SECTION 1
INTERPRETATION
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Definitions
and Interpretation
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“ A.M.
Best Company Inc ” means A.M. Best Company Inc, a credit
rating agency incorporated in New Jersey and any successor
thereto.
“
Accounting Principles ” means in respect of any
person, generally accepted accounting principles in accordance with
the relevant GAAP in its jurisdiction of incorporation.
“
Accounting Reference Date ” means 31
December.
“
Affiliate ” means, in relation to any person, a
Subsidiary of that person or a Holding Company of that person or
any other Subsidiary of that Holding Company.
“
Approved Issuing Bank ” means:
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in New York
state, a “qualified bank” as defined by The New York
Insurance Regulations and determined by the Securities and
Valuation Office of the NAIC and whose name is contained in the
Securities and Valuation Office list; or
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in any other
jurisdiction including any state in the United States of America
other than New York state, a bank which meets the criteria,
including such standards of financial condition and standing, as
are considered necessary and appropriate by that
jurisdiction’s regulator to regulate the quality of banks and
trust companies issuing letters of credit for which the beneficiary
can benefit from credit for reinsurance.
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“
Authorisation ” means an authorisation, consent,
approval, resolution, licence, exemption, filing, notarisation or
registration.
“
Availability Period ” means the period from and
including the date of this Agreement to and including the date
falling one year prior to the Final Maturity Date (but subject to
the further provisions of Clause 7.4
.)
“
Available Commitment ” means the Commitment under the
Facility minus:
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the Base
Currency Amount of any outstanding Letters of Credit (other than
any Letters of Credit that are due to expire or be cancelled and do
expire or are cancelled prior to the proposed Utilisation Date);
and
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in relation to
any proposed Utilisation, the Base Currency Amount of any Letters
of Credit that are due to be issued under the Facility on or before
the proposed Utilisation Date.
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“
Available Facility ” means the aggregate for the time
being of the Available Commitment in respect of the
Facility.
“ Base
Currency ” means US Dollars.
“ Base
Currency Amount ” means, in relation to a Letter of
Credit, the amount specified in the Utilisation Request delivered
by the Borrower for that Letter of Credit (or, if the amount
requested is not denominated in the Base Currency, that amount
converted into the Base Currency at the Spot Rate of Exchange on
the Utilisation Date adjusted under Clause 5.7 ( Revaluation of
Letters of Credit ) and as adjusted to reflect any repayment or
prepayment of a Letter of Credit.
“
Break Costs ” means the amount (if any) by
which:
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the interest
which the Issuing Bank should have received for the period from the
date of receipt of all or any part of an Unpaid Sum to the last day
of the current Interest Period in respect of that Unpaid Sum, had
the Unpaid Sum received been paid on the last day of that Interest
Period;
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the amount
which the Issuing Bank would be able to obtain by placing an amount
equal to the Unpaid Sum received by it on deposit with a leading
bank in the Relevant Interbank Market for a period starting on the
Business Day following receipt or recovery and ending on the last
day of the current Interest Period.
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“
Business Day ” means a day (other than a Saturday or
Sunday) on which banks are open for general business in London,
Luxembourg, New York and Switzerland.
“
Cash ” means, at any time, cash denominated in
sterling, euro, US Dollars (or Australian Dollars) credited in a
Cash Account and to which the Collateral Provider is alone
beneficially entitled and which, for the avoidance of doubt,
excludes cash held exclusively for the benefit of the Collateral
Provider’s customers which is not available to the Collateral
Provider for its own use and for so long as:
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that cash is
repayable on demand;
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repayment of
that cash is not contingent on the prior discharge of any other
indebtedness of the Collateral Provider or of any other person
whatsoever or on the satisfaction of any other
condition;
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there is no
Security over the cash except for the Cash Charge; and
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the cash is
freely and immediately available to be applied in repayment or
prepayment of the Facility.
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“ Cash
Accounts ” means the accounts of the Collateral Provider
with the Issuing Bank with the following details: Sterling, sort
code 200000 and account number 03493083; US Dollars, sort code
200000 and account number 79768933; Australian Dollars, sort code
200000 and account number 48314433; and euro, sort code 200000 and
account number 48314444.
“ Cash
Charge ” means the charge over cash deposit in the agreed
form to be entered into by the Collateral Provider on or about the
date of this Agreement pursuant to which the Collateral Provider
creates a fixed charge over the Cash Accounts in favour of the
Issuing Bank.
“ Cash
Collateral ” means any Cash provided by the Collateral
Provider as collateral in accordance with Clause 22.4 ( Minimum
Security Cover ) and subject to the Transaction
Security.
“ Cash
Proportion ” means, at any time, the proportion,
expressed as a percentage, of the value at that time of any Cash
Collateral to the Total Collateral Value.
“
Certified Copy ” means a copy of an original document
which is
(i) in
the case of the Borrower, certified by a director of the Borrower;
and
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in the case of
the Collateral Provider, certified by two directors of the
Collateral Provider,
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as being
a copy of that document..
“
Change of Control ” means any person or group of
persons acting in concert gain direct or indirect control of the
Borrower or the Collateral Provider. For the purposes of
this definition:
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the power
(whether by way of ownership of shares, proxy, contract, agency or
otherwise) to:
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cast, or
control the casting of, more than 50 per cent of the maximum number
of votes that might be cast at a general meeting of the Borrower or
the Collateral Provider; or
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appoint or
remove all, or the majority, of the directors or other equivalent
officers of the Borrower or the Collateral Provider; or
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give directions
with respect to the operating and financial policies of the
Borrower or the Collateral Provider with which the directors or
other equivalent officers of the Borrower or the Collateral
Provider are obliged to comply; and/or
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the holding
beneficially of more than 50% of the issued share capital of the
Borrower or the Collateral Provider (excluding any part of that
issued share capital that carries no right to participate beyond a
specified amount in a distribution of either profits or capital);
and
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“
acting in concert ” means, a group of persons who,
pursuant to an agreement or understanding (whether formal or
informal), actively co-operate, through the acquisition of shares
in a company by any of them, either directly or indirectly, to
obtain or consolidate control of the Borrower or the Collateral
Provider.
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“
Charged Property ” means all of the assets of the
Collateral Provider which from time to time are, or are expressed
to be, the subject of the Transaction Security.
“
Commitment ” means $200,000,000 to the extent not
cancelled, reduced or transferred under this Agreement.
“
Commission Period ” means, in relation to a Letter of
Credit, each successive period commencing on the day after a
Quarter Date and ending on the next Quarter Date except that the
first Commission Period for a Letter of Credit shall commence on
the date such Letter of Credit is issued and that no Commission
Period in respect of a Letter of Credit may end after the Expiry
Date for such Letter of Credit (so any Commission Period which
would otherwise end after the Expiry Date for such Letter of Credit
shall end on the relevant Expiry Date).
“
Constitutional Documents ” means (i) the up-to-date
and certified articles of association of the Borrower and the
Collateral Provider each in the agreed form, (ii) an extract from
the registry of commerce in respect of the Borrower, (iii) a
certified extract from the Luxembourg trade and companies register
in respect of the Collateral Provider, and (iv) a certified
negative certificate issued by the Luxembourg trade and companies
register stating that on the day immediately prior to the issuance
of the certified negative certificate there were no records at the
Luxembourg trade and companies register of any judicial decisions
regarding, inter alia the bankruptcy ( faillite ),
composition arrangements with creditors ( concordat
préventif de faillite ), reprieve from payment (
sursis de paiement ) or controlled management ( gestion
contrôlée ) of the Collateral Provider, each such
extract or certificate, dated no earlier than 10 days before the
date of this Agreement.
“
Control Agreement ” means the securities account
control account agreement in the agreed form to be entered into on
or about the date of this Agreement between the Issuing Bank, the
Collateral Provider and the Custodian.
“
CSSF ” means the Commission de Surveillance du
Secteur Financier of Luxembourg .
“
Custodian Account ” means the accounts established
pursuant to the Custodian Agreement to hold the Securities
Collateral, with numbers: G14965; 81360; G21040; 81359; G21039;
81358.
“
Custodian ” means J.P Morgan Bank Luxembourg S.A. or
any replacement custodian from time to time in respect of the
Securities Collateral approved by the Issuing Bank.
“
Default ” means an Event of Default or any event or
circumstance specified in Clause 25 (
Events of Default ) which would (with
the expiry of a grace period, the giving of notice, the making of
any determination under the Finance Documents or any combination of
any of the foregoing) be an Event of Default.
“
Disruption Event ” means either or both of:
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a material
disruption to those payment or communications systems or to those
financial markets which are, in each case, required to operate in
order for payments to be made in connection with the Facility (or
otherwise in order for the transactions contemplated by the Finance
Documents to be carried out) which disruption is not caused by, and
is beyond the control of, any of the Parties; or
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the occurrence
of any other event which results in a disruption (of a technical or
systems-related nature) to the treasury or payments operations of a
Party preventing that, or any other Party:
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from performing
its payment obligations under the Finance Documents; or
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from
communicating with other Parties in accordance with the terms of
the Finance Documents,
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and which (in
either such case) is not caused by, and is beyond the control of,
the Party whose operations are disrupted.
“
Eligible Securities ” means:
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Government
Securities and Government Guaranteed Securities; and
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Inflation
Linked Securities;
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Supranational
Securities; and
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Quasi
Government Securities.
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“
Expiry Date ” means, for a Letter of Credit, the last
day of its Term.
“
Event of Default ” means any event or circumstance
specified as such in Clause 25 (
Events of Default ).
“
Facility ” means the revolving letter of credit
facility made available or to be made available under this
Agreement for the purposes more specifically set out in Clause
3 .
“
Facility Office ” means the office in the jurisdiction
in which the Issuing Bank is resident for tax purposes.
“
Fannie Mae ” means The Federal National Mortgage
Association, a corporation created under the laws of the United
States of America.
“
Final Maturity Date ” means 31 December 2014 (as the
same may be extended in accordance with Clause 7.4 ( Extension
option ).
“
Finance Document ” means this Agreement, any
Transaction Security Document, any Utilisation Request and any
other document designated as a “Finance Document” by
the Issuing Bank and the Borrower.
“
Financial Indebtedness ” means any indebtedness for or
in respect of:
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moneys borrowed
and debit balances at banks or other financial
institutions;
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any acceptance
under any acceptance credit or bill discounting facility (or
dematerialised equivalent);
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any note
purchase facility or the issue of bonds (but not Trade
Instruments), notes, debentures, loan stock or any similar
instrument;
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the amount of
any liability in respect of finance leases;
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receivables
sold or discounted (other than any receivables to the extent they
are sold on a non-recourse basis and meet any requirement for
de-recognition under the Accounting Principles);
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any Treasury
Transaction (and, when calculating the value of that Treasury
Transaction, only the marked to market value (or, if any actual
amount is due as a result of the termination or close-out of that
Treasury Transaction, that amount) shall be taken into
account);
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any
counter-indemnity obligation in respect of a guarantee, bond,
standby or documentary letter of credit or any other instrument
issued by a bank or financial institution in respect of (i) an
underlying liability (but not, in any case, Trade Instruments) of
an entity which is not a Group Company which liability would fall
within one of the other paragraphs of this definition or (ii) any
liabilities of any Group Company relating to any post-retirement
benefit scheme;
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any amount
raised by the issue of redeemable or preferred shares which are
capable of redemption (other than at the option of the issuer)
before the Final Maturity Date or are otherwise classified as
borrowings under the Accounting Principles;
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any amount of
any liability under an advance or deferred purchase agreement if
(i) one of the primary reasons behind entering into the agreement
is to raise finance or to finance the acquisition or construction
of the asset or service in question or (ii) the agreement is in
respect of the supply of assets or services and payment is due more
than 90 days after the date of supply;
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any amount
raised under any other transaction (including any forward sale or
purchase, sale and sale back or sale and leaseback agreement)
having the commercial effect of a borrowing; and
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the amount of
any liability in respect of any guarantee for any of the items
referred to in paragraphs (a) to
(j) above
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“
Financial Year ” means in relation to the Borrower,
the Parent and/or the Collateral Provider, each calendar year
ending on the 31 December.
“
Fitch " means Fitch Ratings Ltd, a credit rating agency
incorporated in England and Wales and any successor
thereto.
“
Freddie Mac ” means The Federal Home Loan Mortgage
Corporation, a corporation created under the laws of the United
States of America.
“
Ginnie Mae ” means the Government National Mortgage
Association, an agency of the government of the United States of
America.
“
Government Securities ” means US Treasuries (i.e. US
Government Bonds), Federal Deposit Insurance Corporation (FDIC),
Government National Mortgage Association (GNMA), & OECD
Government Bonds and Agency Bonds of the United States, United
Kingdom, France, Germany, Australia, Canada or Japan which are AAA
rated by Standard & Poors or in the case of the United States,
rated no lower than the credit rating for the United States’
sovereign debt (at the date of this Agreement such debt being rated
by Standard & Poors as AA+) or in the case of Japan, rated no
lower than the credit rating for Japan’s sovereign debt (at
the date of this Agreement such debt being rated by Standard &
Poors as AA/AA2).
“
Government Guaranteed Securities ” means Agency Bonds
explicitly guaranteed by the national governments of any of the
United Kingdom, France, Germany, Australia, Canada or Japan and
rated AAA by Standard & Poors or in the case of bonds
guaranteed by the United States, rated no lower than the credit
rating for the United States’ sovereign debt (at the date of
this Agreement such debt being rated by Standard & Poors as
AA+) or in the case of bonds guaranteed by Japan, rated no lower
than the credit rating for Japan’s sovereign debt (at the
date of this Agreement such debt being rated by Standard &
Poors as AA/AA2).
“
Group ” means the Borrower, the Collateral Provider
and each of their Subsidiaries for the time being and “
Group Company ” means any of them.
“
Group Structure Chart ” means the group structure
chart in the agreed form.
“
Holding Company ” means, in relation to a company or
corporation, any other company or corporation in respect of which
it is a Subsidiary.
“
Inflation Linked Securities ” means US Tips, Canadian
Government Real Return Bonds, French Global Inflation linked bonds,
Japan Global Inflation linked bonds, and UK, German and Australian
index linked bonds which are AAA rated by Standard & Poors or
in the case of Japan Global Inflation Linked bonds, rated no lower
than the credit rating for Japan’s sovereign debt (at the
date of this Agreement and debt being rated by Standard & Poors
as AA/AA2).
“
Interest Period ” means in relation to an Unpaid Sum,
each period determined in accordance with Clause 12.1 ( Default
interest ).
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any bank,
financial institution, trust, fund or other entity which has become
a Party in accordance with Clause 26 (
Changes to the Issuing Bank
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which in each
case has not ceased to be a Party in accordance with the terms of
this Agreement.
“
Legal Reservations ” means:
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the principle
that equitable remedies may be granted or refused at the discretion
of a court and the limitation of enforcement by laws relating to
insolvency, reorganisation and other laws generally affecting the
rights of creditors;
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the time
barring of claims under the Limitation Acts, the possibility that
an undertaking to assume liability for or indemnify a person
against non-payment of UK stamp duty may be void and defences of
set-off or counterclaim;
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similar
principles, rights and defences under the laws of any Relevant
Jurisdiction; and
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any other
matters which are set out as qualifications or reservations as to
matters of law of general application in the Legal
Opinions.
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“
Letter of Credit ” means a letter of credit
denominated in US Dollars or Australian Dollars, substantially in
the form set out in Schedule 4A (
Form of US Dollar Letter of Credit )
or Schedule 4B ( Form of Australian Dollar Letter of Credit
) in the case of a Letter of Credit issued in Australian
Dollars or in any other form requested by the Borrower for the
purposes of meeting the requirements of the regulatory body with
whose rules the beneficiary of the relevant Letter of Credit is
seeking to comply in order to benefit from credit for reinsurance
provided such form is approved by the Issuing Bank (such approval
not to be unreasonably withheld).
“
LIBOR ” means, in relation to an Unpaid
Sum:
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the applicable
Screen Rate; or
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(if no Screen
Rate is available for the currency or Interest Period of that
Unpaid Sum) the arithmetic mean of the rates (rounded upwards to
four decimal places) as supplied to the Issuing Bank at its request
quoted by the Reference Banks to leading banks in the London
interbank market,
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as of 11.00am
on the Quotation Day for the offering of deposits in the currency
of that Unpaid Sum and for a period comparable to the Interest
Period for that Unpaid Sum.
“
Limitation Acts ” means the Limitation Act 1980 and
any other legislation in force for the time being in England and
Wales relating to the time barring of claims.
“
LMA ” means the Loan Market Association.
“
Margin ” means in relation to any Unpaid Sum, 3 per
cent per annum.
“
Material Adverse Effect ” means a material adverse
effect on:
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the assets,
financial condition or business of the Borrower, the Collateral
Provider or of the Group taken as a whole;
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the ability of
the Borrower or the Collateral Provider to meet its payment
obligations or the ability of the Borrower to comply with the
financial covenants set out in Clause 22 ( Financial
Covenants ) under any Finance Document;
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the validity,
legality or enforceability of, or the ranking of any Security
granted or purporting to be granted pursuant to any of, the Finance
Documents or the rights or remedies of the Issuing Bank under any
of the Finance Documents.
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“
Month ” means a period starting on one day in a
calendar month and ending on the numerically corresponding day in
the next calendar month, except that:
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if the
numerically corresponding day is not a Business Day, that period
shall end on the next Business Day in that calendar month in which
that period is to end if there is one, or if there is not, on the
immediately preceding Business Day;
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if there is no
numerically corresponding day in the calendar month in which that
period is to end, that period shall end on the last Business Day in
that calendar month.
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NAIC ” means the National Association of Insurance
Commissioners.
“ New
York Insurance Regulations ” means the New York Insurance
Law and the rules and regulations promulgated thereunder which are
in effect from time to time.
“
Original Financial Statements ” means in relation to
the Borrower its audited financial statements for the period of 12
months ended 31 December 2010 and in relation to the Collateral
Provider means its audited financial statements for the period of
12 months ended 31 December 2010 and in relation to the Parent
means its audited consolidated financial statements for the period
of 12 months ended 31 December 2010.
“
Parent ” means Flagstone Reinsurance Holdings S.A.
(R.C.S. Luxembourg company no. B 153 214) whose registered office
is at 37, Val St André, L-1128 Luxembourg, Grand Duchy of
Luxembourg, a company incorporated in the Grand Duchy of
Luxembourg.
“
Participating Member State ” means any member state of
the European Communities that adopts or has adopted the euro as its
lawful currency in accordance with legislation of the European
Community relating to Economic and Monetary Union.
“
Party ” means a party to this Agreement.
“
Perfection Requirements ” means any and all
registrations, filings, notices and other actions and steps
required to be made in any jurisdiction in order to perfect
security created by the Transaction Security Documents or in order
to achieve the relevant priority for such Security.
“
Permitted Disposal ” means any sale, lease, licence,
transfer or other disposal which is on arm’s length
terms:
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of cash or
deposits by the Borrower or the Collateral Provider in the ordinary
course of trading (and for the avoidance of doubt this shall not
include any cash or deposits subject to the Transaction
Security);
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of investments
in the ordinary course of business;
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provided no
Event of Default has occurred which is continuing, of assets in
exchange for other assets comparable or superior as to type, value
and quality;
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of obsolete or
redundant vehicles, plant and equipment for cash;
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arising as a
result of any Permitted Security;
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which is a
lease or licence of property in the ordinary course of business;
and
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of assets not
allowed under the preceding paragraphs (other than shares) for cash
where the net consideration receivable (when aggregated with the
net consideration receivable for any other sale, lease, licence,
transfer or other disposal not allowed under the preceding
paragraphs) does not exceed $20,000,000 (or its equivalent in other
currencies) in any one Financial Year.
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“
Permitted Financial Indebtedness ” means Financial
Indebtedness:
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arising under
any of the Finance Documents;
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arising under
the Borrower’s existing letter of credit and trust facilities
with Citibank and Wells Fargo;
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arising in
respect of any Trade Instrument to the extent such Trade Instrument
is fully collateralised; and
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not permitted
by the preceding paragraphs and the outstanding principal amount of
which does not exceed an amount equal to 25% of Total Shareholder
Equity (or such other amount as may be agreed by the parties in
writing) (or its equivalent in other currencies) in aggregate at
any time.
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“
Permitted Security ” means:
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any Security
granted pursuant to the Transaction Security Documents;
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any lien
arising by operation of law and in the ordinary course of trading
and not as a result of any default or omission by the Borrower or
the Collateral Provider;
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any netting or
set-off arrangement entered into by the Borrower or the Collateral
Provider in the ordinary course of its banking arrangements for the
purpose of netting debit and credit balances;
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any Security
arising under any retention of title, hire purchase or conditional
sale arrangement or arrangements having similar effect in respect
of goods supplied to a the Borrower or the Collateral Provider in
the ordinary course of trading and on the supplier’s standard
or usual terms and not arising as a result of any default or
omission by the Borrower of the Collateral Provider;
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any Security
under netting or set-off arrangements under Treasury Transactions
permitted by the Finance Documents;
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any Transaction
Security, including cash collateral to secure obligations under the
Finance Documents;
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any Security
entered into in respect of Permitted Financial Indebtedness as
described in paragraph (b) or
paragraph (c) of that definition so
long as such Security does not secure any Charged Property or
otherwise adversely affect the validity or enforceability of the
Transaction Security;
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any Security
securing indebtedness the outstanding principal amount of which
(when aggregated with the outstanding principal amount of any other
indebtedness which has the benefit of Security given by the
Borrower or the Collateral Provider other than any permitted under
paragraphs (a) to (g) above ) does not exceed $300,000,000 (or
such other amount as may be agreed between the parties from time to
time) (or its equivalent in other currencies) at any time;
or
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any Security
created with the prior written consent of the Issuing
Bank.
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“
Quarter Date ” means 31 March, 30 June, 30 September
and 31 December in each year.
“
Quasi Government Securities ” means Freddie Mac
debentures and/or mortgage backed securities, Federal Home Loan
Banks debentures and/or mortgage backed securities, Federal Farm
Credit Banks debentures and/or mortgage backed securities and
Fannie Mae debentures and/or mortgages backed securities each of
which are at least AAA rated by Standard & Poors.
“
Quotation Day ” means, in relation to any period for
which an interest rate is to be determined the first day of that
period.
“
Receiver ” means a receiver or receiver and manager or
administrative receiver of the whole or any part of the Charged
Property.
“
Reference Banks ” means, in relation to LIBOR and
Mandatory Cost, the principal London offices of the Issuing Bank,
HSBC Bank plc, Lloyds Banking Group and The Royal Bank of Scotland
plc or such other banks as may be appointed by the Issuing Bank in
consultation with the Borrower.
“
Relevant Interbank Market ” means the London interbank
market.
“
Relevant Jurisdiction ” means, in relation to each of
the Borrower and the Collateral Provider:
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its
jurisdiction of incorporation;
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any
jurisdiction where any asset subject to or intended to be subject
to the Transaction Security to be created by it is
situated;
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any
jurisdiction where it conducts its business; and
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the
jurisdiction whose laws govern the perfection of any of the
Transaction Security Documents entered into by it.
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“
Screen Rate ” means in relation to LIBOR, the British
Bankers’ Association Interest Settlement Rate for the Base
Currency and period displayed on the appropriate page of the
Reuters screen. If the agreed page is replaced or
service ceases to be available, the Issuing Bank may specify
another page or service displaying the appropriate rate after
consultation with the Borrower.
“
Securities Collateral ” means at any time, any
Eligible Securities provided by the Collateral Provider as
collateral in accordance with Clause 22.4 ( Minimum
Security Cover ) and subject to the Transaction
Security.
“
Securities Collateral Charge ” means the Luxembourg
law governed account pledge agreement in the agreed form to be
entered into on or about the date of this Agreement by the
Collateral Provider in favour of the Issuing Bank granting a first
ranking perfected security interest in the Securities Collateral
held in the Custodian Account.
“
Securities Collateral Proportion ” means, at any time,
the proportion, expressed as a percentage, of the value at that
time of any Securities Collateral to the Total Collateral
Value.
“
Security ” means a mortgage, charge, pledge, lien or
other security interest securing any obligation of any person or
any other agreement or arrangement having a similar
effect.
“
Security Period ” means the period starting on the
date of this Agreement and ending on the date on which the Issuing
Bank is satisfied that all of the liabilities of the Borrower and
the Collateral Provider under each Finance Document are irrevocably
discharged in full and the Issuing Bank has no commitment or
liability, whether present or future, actual or contingent, in
relation to the Facility.
“ Spot
Rate of Exchange ” means the Issuing Bank’s spot
rate of exchange for the purchase of the relevant amount of the
relevant currency with the Base Currency in the London foreign
exchange market at about 11am on a particular day.
“
Subsidiary ” means in relation to any company or
corporation, a company or corporation:
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which is
controlled, directly or indirectly, by the first mentioned company
or corporation;
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more than half
the issued share capital of which is beneficially owned, directly
or indirectly by the first mentioned company or corporation;
or
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which is a
Subsidiary of another Subsidiary of the first mentioned company or
corporation,
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and for this
purpose, a company or corporation shall be treated as being
controlled by another if that other company or corporation is able
to direct its affairs and/or to control the composition of its
board of directors or equivalent body.
“
Supranational Securities ” means European Bank for
Reconstruction and Development, European Investment Bank &
European Union securities which are in each case at least AAA rated
by Standard & Poors.
“
Standard & Poor’s ” means Standard &
Poors Rating Services a division of the McGraw & Hill
Companies, Inc., a New York corporation, and any successor
thereto.
“
Supportable Capital Transactions ” means a dividend
paid out of retained earnings, a return of share capital or any
analogous transaction.
“
Tax ” means any tax, levy, impost, duty or other
charge or withholding of a similar nature (including any penalty or
interest payable in connection with any failure to pay or any delay
in paying any of the same).
“
Term ” means each period determined under this
Agreement for which the Issuing Bank is under a liability under a
Letter of Credit.
“
Total Collateral Value ” means, at any time, the
aggregate of the value of the Cash Collateral and the value of the
Securities Collateral, in each case as determined by the Issuing
Bank, acting reasonably and for the avoidance of doubt in
determining the value of the Securities Collateral the Issuing
Bank’s determination shall be made on the basis of the most
recent valuation of the Securities Collateral provided by the
Custodian pursuant to paragraph (a) of
Clause 21.4 ( Information: miscellaneous ) except that where
there is no readily available market value for the Securities
Collateral and the Custodian has based its valuation of such
Securities Collateral on a financial model which is not
satisfactory to the Issuing Bank (acting reasonably), the Issuing
Bank shall be entitled to obtain and have regard to a further
independent valuation of the Securities Collateral.
“
Total Shareholder Equity ” means, at any time, the
amount appearing next to the heading “Total Shareholder
Equity” in the most recent audited financial statements of
the Borrower provided to the Issuing Bank pursuant to paragraph
21.1(a) of Clause 21.1 ( Financial
statements ).
“
Trade Instruments ” means any performance bonds,
advance payment bonds or documentary letters of credit, credit for
reinsurance trusts or collateral trust funds issued in respect of
the obligations of any Group Company arising in the ordinary course
of trading.
“
Transaction Security ” means the Security created or
expressed to be created in favour of the Issuing Bank pursuant to
the Transaction Security Documents.
“
Transaction Security Documents ” means each of the
documents listed as being a Transaction Security Document in
paragraphs 2(b) to 2(d) of Part 1A of Schedule 1 ( Conditions Precedent ) together with any other
document entered into by the Borrower or Collateral Provider
creating or expressed to create or deal with any Security over all
or any part of its assets in respect of its obligations under any
of the Finance Documents.
“
Treasury Transactions ” means any derivative
transaction entered into in connection with protection against or
benefit from fluctuation in any rate or price.
“
Unpaid Sum ” means any sum due and payable but unpaid
by the Borrower or the Collateral Provider under the Finance
Documents.
“
Utilisation ” means a utilisation of the
Facility.
“
Utilisation Date ” means the date on which a
Utilisation is made being the date on which a Letter of Credit is
to be issued.
“
VAT ” means value added tax as provided for in the
Value Added Tax Act 1994 and any other tax of a similar
nature.
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Unless a
contrary indication appears, a reference in this Agreement
to:
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the “
Issuing Bank ”, the “ Borrower ”,
the “ Collateral Provider ”, the “
Custodian ” or any “ Party ” or any
other person shall be construed so as to include its successors in
title, permitted assigns and permitted transferees;
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a document in
“ agreed form ” is a document which is
previously agreed in writing by or on behalf of the Borrower and
the Issuing Bank or, if not so agreed, is in the form specified by
the Issuing Bank;
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“
assets ” includes present and future properties,
revenues and rights of every description;
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a “
Finance Document ” or any other agreement or
instrument is a reference to that Finance Document or other
agreement or instrument as amended, novated, supplemented, extended
or restated;
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“
guarantee ” means any guarantee, letter of credit,
bond, indemnity or similar assurance against loss, or any
obligation, direct or indirect, actual or contingent, to purchase
or assume any indebtedness of any person or to make an investment
in or loan to any person or to purchase assets of any person where,
in each case, such obligation is assumed in order to maintain or
assist the ability of such person to meet its
indebtedness;
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“
indebtedness ” includes any obligation (whether
incurred as principal or as surety) for the payment or repayment of
money, whether present or future, actual or contingent;
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a “
person ” includes any individual, firm, company,
corporation, government, state or agency of a state or any
association, trust, joint venture, consortium or partnership
(whether or not having separate legal personality);
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a “
regulation ” includes any regulation, rule, official
directive, request or guideline (whether or not having the force of
law) of any governmental, intergovernmental or supranational body,
agency, department or regulatory, self-regulatory or other
authority or organisation;
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a provision of
law is a reference to that provision as amended or re-enacted; and
is a reference to a provision, of any treaty, legislation,
regulation, decree, order or by-law and any secondary legislation
enacted under a power given by that provision, as amended, applied
or re-enacted or replaced whether before or after the date of this
Agreement;
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a time of day
is a reference to London time; and
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reinsurance
includes insurance and retrocession.
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Section, Clause
and Schedule headings are for ease of reference only.
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Unless a
contrary indication appears, a term used in any other Finance
Document or in any notice given under or in connection with any
Finance Document has the same meaning in that Finance Document or
notice as in this Agreement.
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A Default
(other than an Event of Default) is “ continuing
” if it has not been remedied or waived and an Event of
Default is “ continuing ” if it has not been
waived.
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Any reference
in this Agreement to:
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the Borrower
“ repaying ” or “ prepaying ”
a Letter of Credit means:
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the Borrower or
the Collateral Provider providing cash cover or eligible collateral
for any Letter of Credit;
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the maximum
amount payable under any Letter of Credit being reduced in
accordance with its terms; or
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the Issuing
Bank being satisfied that it has no further liability under any
Letter of Credit;
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and the amount
by which a Letter of Credit is repaid or prepaid under paragraphs
(A) and (B)
above is the amount of the relevant cash cover, eligible
collateral or reduction.
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Currency
Symbols and Definitions
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“
£ ” and “ Sterling ” denotes
the lawful currency of the United Kingdom;
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“
€ ” and “ euro ” denotes the
single currency of the Participating Member States;
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“
$ ” and “ US Dollars ” denotes the
lawful currency of the United States of America; and
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“ Aus
$ ” and “ Australian Dollars ” denotes
the lawful currency of Australia.
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Unless
expressly provided to the contrary in a Finance Document a person
who is not a Party has no right under the Contracts (Rights of
Third Parties) Act 1999 (the “ Third Parties Act
”) to enforce or enjoy the benefit of any term of this
Agreement.
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Notwithstanding
any term of any Finance Document, the consent of any person who is
not a Party is not required to rescind or vary this Agreement at
any time.
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--
1390/B23985.23/CORP2:3020236.8/AGAA
SECTION 2
THE FACILITY
Subject to the
terms of this Agreement, the Issuing Bank makes available a
multicurrency revolving letter of credit facility in an aggregate
amount equal to the Commitment.
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This Agreement
sets out the basis on which the Issuing Bank may from time to time
make facilities available to the Borrower.
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The Facility
may be amended and/or restated from time to time by agreement in
writing between the Parties. The nature of the Facility
and of this Agreement may therefore change from time to time, even
to the extent of becoming a new agreement fundamentally different
from that which exists at the date of this Agreement and is
evidenced by this document. Following any such
amendment, it is intended that references to this Agreement shall
be to this Agreement as so amended.
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All amounts
utilised by the Borrower under the Facility shall be applied in the
issuance by the Issuing Bank of Letters of Credit required as
collateral in respect of reinsurance policies provided by the
Borrower.
The Issuing
Bank is not bound to monitor or verify the application of any
amount borrowed or utilised pursuant to this Agreement and shall
not be responsible for, or for the consequences of, such
application.
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Conditions
of Utilisation
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Initial
conditions precedent
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on or before
the date of this Agreement, the Issuing Bank has received all of
the documents and other evidence listed in Part 1A of Schedule 1 ( Conditions Precedent );
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in each case in
form and substance sat