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TABLE OF CONTENTS
IT IS AGREED as follows:
In this Agreement:
“ 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:
“ 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:
“ 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:
“ 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:
“ 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 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
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:
“ 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:
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:
“ Expiry Date ” means, for a Letter of Credit, the last day of its Term.
“ 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.
“ 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:
“ 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).
“ Issuing Bank ” means:
which in each case has not ceased to be a Party in accordance with the terms of this Agreement.
“ Legal Reservations ” means:
“ 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:
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:
“ 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:
“ 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:
“ Permitted Financial Indebtedness ” means Financial Indebtedness:
“ Permitted Security ” means:
“ 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:
“ Repeating Representations ” means each of the representations set out in Clause 20.2 ( Status ) to Clause 20.6 ( Validity and admissibility in evidence ) (inclusive), Clause 20.8 ( No filing or stamp taxes ), Clause 20.10 ( No default ), Clause 20.11 ( No misleading information ), paragraphs (d) and (e) of Clause 20.12 ( Original Financial Statements ), Clause 20.13 ( Pari passu ranking ) and Clause 20.14 ( No proceedings pending or threatened ), Clause 20.15 (Custodian arrangements), Clause 20.16 (No Insolvency), Clause 20.18 ( Security and Financial Indebtedness ), Clause 20.19 ( Legal and beneficial ownership ) and Clause 20.20 ( Centre of main interests and establishments ).
“ 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:
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.
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.
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.
in each case in form and substance sat