EX-10.1 7 exhibit101.htm EXHIBIT 10-1
13879370v5 24740.00061
Pricing
Level
Commitment
Utilization
Ratio
Commitment Fee
I
≥ 50%
0.125%
II
< 50%
0.225%
EXECUTION VERSION
FIRST AMENDMENT TO STANDBY
LETTER OF CREDIT AGREEMENT
This
FIRST AMENDMENT TO STANDBY
LETTER OF CREDIT AGREEMENT
, dated as of May 5, 2021
(this “Amendment”), is by and
among EVEREST REINSURANCE (BERMUDA), LTD., a company incorporated
and
existing
under
the
laws
of
Bermuda
(the
“Account
Party”),
and
WELLS
FARGO
BANK,
NATIONAL
ASSOCIATION, a national
banking association ( “Bank”).
RECITALS
The
Account
Party
and
Bank
are
parties
to
a
Standby
Letter
of
Credit
Agreement,
dated
as
of
February 23, 2021 (the “Agreement”),
pursuant to which Bank has made available
to the Account Party a
letter of credit facility for the issuance of standby letters of credit.
Capitalized terms used but not defined
herein shall have the meanings assigned to such terms
in the Agreement.
The parties now desire to amend the Agreement on the terms
and conditions set forth herein.
STATEMENT
OF AGREEMENT
The parties hereto agree as follows:
ARTICLE I
AMENDMENTS TO AGREEMENT
1.1
Amendments
to
Section
1
(Defined
Terms)
.
Section
1
of
the
Agreement
is
hereby
amended by adding the following defined terms:
“
Applicable Margin
” means the corresponding percentage per annum as set forth
below
based
on
the
percentage
ratio
(the
“Commitment
Utilization
Ratio”)
of
Outstanding
Letters of Credit to the Commitment:
“
Foreign Currency Sublimit
” means the Foreign Currency Equivalent
of $50,000,000.
1.2
Amendment to
Commitment Amount
.
The definition
of “Commitment”
in Section
1 of
the Agreement is hereby amended by replacing
“$50,000,000” in such definition with “$500,000,000”.
1.3
Amendment
to
Commitment
Termination
Date
.
The
defin
ition
of
“Commitment
Termination
Date”
in Section
1 of
the Agreement
is hereby
amended by
replacing “February
22, 2022”
with “May 5, 2023”.
13879370v5 24740.00061
1.4
Amendment to Section 2(a)
.
Section 2(a) of the Agreement is
hereby amended by adding
the following proviso to the end of the first
sentence in such Section:
“; provided, that no Letter of
Credit shall be issued
if (i) the Stated Amount
thereof upon issuance,
when added to the Outstanding Letters of Credit, would
exceed the Commitment at such time or
(ii) if such Letter of Credit is denominated in a Foreign Currency, the Stated Amount thereof upon
issuance, when
added to
the Outstanding
Letters
of Credit
denominated in
a Foreign
Currency,
would exceed the Foreign
Currency Sublimit at such time.
1.5
Amendment to
Commi
tment Fee
.
Section 2(i)(ii)
of the
Agreement
is hereby
amended
and restated as follows:
“(ii)
a non
-
refundable commitment fee
(a “
Commitment Fee
”), for each calendar
quarter (or
portion thereof)
at a
per annum
rate
equal to
the Applicable
Margin in
effect
for such
fee from
time
to
time
on
the
average
daily
aggregate
unused
portion
of
the
Commitment,
payable
in
arrears (A) on the last Business Day of each calendar quarter,
beginning with the first such day to
occur
after
the
Closing
Date
through
the
Commitment
Termination
Date
and
(B)
on
the
Commitment Termination
Date; and”.
1.6
Amendment to Letter of Credit Fee
.
Section 2(i)(iii) of the Agreement is hereby amended
by replacing “0.425%” with “0.375%”.
ARTICLE II
CONDITIONS OF EFFECTIVENESS
2.1
This
Amendment
shall
become
effective
when,
and
only
when,
each
of
the
following
conditions precedent shall have been
satisfied:
(a)
Bank shall
have
received
a duly
executed
counterpart
of this
Amendment from
the Account Party; and
(b)
The Account Party
shall have paid
to Bank (i) a
non
-
refundable upfront
fee in an
aggregate amount equal to 0.05% of the Commitment
(after giving effect to this Amendment),
and (ii) all
reasonable, documented
out-of-pocket
costs and
expenses of
Bank in
connection with
the preparation,
negotiation, execution and delivery of this
Amendment (including, without limitation, the
reasonable fees
and out-of-pocket
expenses of counsel for Bank with respect
thereto).
ARTICLE III
REPRESENTATIONS
AND WARRANTIES
To induce Bank to enter into this
Amendment, the Account Party represents and
warrants to Bank
that (i) the representations
and warranties contained
in the Agreement and
the other Credit Documents
are true and
correct in all
material respects as
of the
date hereof, both immediately before and
after giving
effect to
this Amendment, except
for any
representation
and warranty
that is qualified
by materiality or
reference
to Material
Adverse
Effect,
which such
representation
and warranty
is true
and correct
in all
respects, on and as of the date hereof (except for any
such representation and warranty
that by its terms
is made
only as
of an
earlier date,
which representation
and warranty
is true
and correct
in all
material
13879370v5 24740.00061
respects
as
of
such
earlier
date,
except
for
any
such
representation
and
warranty
that
is
qualified
by
materiality or
reference
to Material
Adverse Effect,
which such representation
and warranty
is true and
correct in
all respects
as of
such earlier
date) and
(ii) no Default
or Event
of Default
has occurred
and is
continuing, both immediately before
and immediately after giving effect
to this Amendment.
ARTICLE IV
ACKNOWLEDGMENT AND CONFIRMATION
The Account
Party
hereby
confirms
and agrees
that after
giving effect
to this
Amendment,
the
Agreement and
the other Credit
Documents remain
in full force
and effect
and enforceable
against it
in
accordance
with
their
respective
terms
and
shall
not
be
discharged,
diminished,
limited
or
otherwise
affected in any respect,
and the amendments to the Agreement made
pursuant to this Amendment shall
not,
in
any
manner,
be
construed
to
constitute
payment
of,
or
impair,
limit,
cancel
or
extinguish,
or
constitute a novation in respect of, the Obligations of the Account Party evidenced by
or arising under the
Agreement
and
the
other
Credit
Documents,
which
shall
not
in
any
manner
be
impaired,
limited,
terminated, waived or
released, but shall continue in
full force and effect.
The Account Party represents
and warrants
to Bank
that it
has no
knowledge
of any
claims, counterclaims,
offsets,
or defenses
to or
with respect
to its
obligations under
the Credit
Documents, or
if the Account
Party has
any such
claims,
counterclaims,
offsets,
or
defenses
to
the
Credit
Documents
or
any
transaction
related
to
the
Credit
Documents, the same are hereby waived,
relinquished, and released in consideration
of the execution of
this Amendment.
This acknowledgment and confirmation by the Account
Party is made and delivered to
induce Bank to enter into
this Amendment.
The Account Party acknowledges
that Bank would not enter
into this Amendment in the absence of the acknowledgment and confirmation
contained herein.
ARTICLE V
MISCELLANEOUS
5.1
Credit Document
.
From and after the date hereof (a) all references to the Agreement set
forth
in
any
Credit
Document
or
other
agreement
or
instrument
shall,
unless
otherwise
specifically
provided,
be
references
to
the
Agreement
as
amended
by
this
Amendment
and
as
may
be
further
amended, modified,
restated or supplemented from
time to
time, and
(b) this
Amendment shall constitute
a Credit Document and
all provisions of the
Agreement and the other Credit
Documents applicable hereto
shall be deemed
to be incorporated
herein by reference.
Nothing herein shall
be deemed to
entitle the
Account Party or any other
party to a consent to,
or a waiver,
amendment, modification or other change
of, any of the terms, conditions, obligations, covenants or agreements contained in the Agreement or any
other Credit Document in similar or different
circumstances.
5.2
Governing Law
.
This Amendment
shall be
governed
by and
construed
and enforced
in
accordance
with
the
laws
of
the
State
of
New
York
(without
regard
to
the
conflicts
of
law
provisions
thereof).
5.3
Severability
.
To
the extent
any provision
of this
Amendment is
prohibited by
or invalid
under the applicable law of
any jurisdiction, such provision
shall be ineffective
only to the extent
of such
13879370v5 24740.00061
prohibition or invalidity
and only in
any such jurisdiction,
without prohibiting or
invalidating such provision
in any other jurisdiction or the remaining provisions
of this Amendment in any jurisdiction.
5.4
Successors and Assigns
.
This Amendment shall
be binding upon,
inure to the
benefit of
and be enforceable by the respective
successors and permitted assigns of the parties hereto.
5.5
Construction
.
The headings of
the various sections
and subsections of
this Amendment
have been
inserted for
convenience only
and shall not
in any
way affect
the meaning or
construction of
any of the provisions hereof.
5.6
Integration; Counterparts
.
This Amendment constitutes the entire contract
among the
parties hereto with respect to the subject matter
hereof and supersedes any and all prior
agreements
and understandings, oral or written,
relating to the subject matter hereof.
This Amendment may be
executed and delivered
via facsimile or electronic mail with the same force
and effect as if an original
were executed and may
be signed in any number of counterparts, each of which
shall be an original,
with the same effect as if the signatures
hereto were upon the same instrument.
The words “execution,”
“signed,”
“signature,”
and words of like import in this Amendment
shall be deemed to include electronic
signatures or the keeping of records
in electronic form, each of which shall be of the same
legal effect,
validity or enforceability as a manually
executed signature or the use
of a paper-based recordkeeping
system, as the case may
be, to the extent and as provided
for in any applicable law,
including the
Federal Electronic Signatures
in Global and National Commerce Act, the New York
State Electronic
Signatures and Records Act, or
any other similar state laws
based on the Uniform Electronic Transactions
Act. For the avoidance of doubt, the authorization
under this paragraph may include,
without limitation,
use or acceptance by Bank of a manually signed letter
which has been converted into electronic
form
(such as scanned into “.pdf”
format), or an electronically signed letter
converted into another format,
for transmission, delivery and/or
retention.
5.7
Expenses
. The Account Party
shall (i) pay all
reasonable, documented fees
and expenses
of
counsel
to
Bank
and
(ii)
reimburse
Bank
for
all
reasonable,
documented
out-of-pocket
costs
and
expenses, in each case, in connection with the preparation, negotiation, execution
and/or delivery of this
Amendment.
[signatures follow]
IN WITNESS WHEREOF
, the parties hereto have caused this
Amendment to be executed by
their duly authorized officers as of the date
first above written.
EVEREST REINSURANCE (BERMUDA), LTD.
By:
/S/ CHRISTOPHER S. DOWNEY
Name:
Christopher S. Downey
Title:
Mana
ging Director and Chief Executive
Officer
Signature Page to First Amendment to Standby Letter
of Credit
WELLS FARGO BANK,
NATIONAL
ASSOCIATION
By:
/S/ WILLIAM R. GOLEY
Name:
William R. Goley
Title:
Managing Director
WELLS FARGO BANK, NATIONAL
ASSOCIATION
By:
/S/ WILLIAM R. GOLEY
Name:
William R. Goley
Title:
Managing Director
Signature Page to First Amendment to Standby Letter
of Credit
SCHEDULE I
COLLATERAL
BASE
Type of Security
Advance
Rates
Cash (denominated in USD) or Certificate of Deposit
100%
Mutual Funds
Listed (on a nationally recognized
U.S. exchange) Money Market
Mutual Funds
90%
U.S. Fixed Income Mutual Funds (excluding
high yield and tax exempt)
80%
U.S. Government Bills, Notes, and U.S.
Government Sponsored Agency Securities
(1)
Maturing in 5 years or less
95%
Maturing in more than 5 years
90%
High Grade U.S. Corporate/Municipal/Structured
Fixed Income Securities (AA/Aa2
or better)
Maturing in 5 years or less
90%
Maturing in more than 5 years
85%
Intermediate Grade U.S. Corporate/Municipal/Structured
Fixed Income Securities
(BBB/Baa2 or better but worse than AA/Aa2)
(2)
Maturing in 5 years or less
85%
Maturing in more than 5 years
80%
Commercial Paper
A1 or P1 Graded Commercial Paper
85%
A2 or P2 Graded Commercial Paper
80%
Notes:
(1)
U.S. Government Bills/Notes/Sponsored Agencies include:
U.S. Treasury Bills, Notes, and Bonds;
U.S. Government Agency and U.S.
Government Sponsored Enterprise (GSE) Securities. Also
included are
Mortgage-Backed
Securities (MBSs).
GSE and
MBS securities
include Fannie
Mae, Freddie
Mac, Ginnie
Mae, FHLB System Banks, and Federal
Farm Credit Banks.
(2) Securities rated BBB or Baa2 shall not comprise greater
than 20% of Collateral Value.
Signature Page to First Amendment to Standby Letter
of Credit
EXHIBIT A
FORM OF
OFFICER’S COMPLIANCE
CERTIFICATE
THIS CERTIFICATE
is given pursuant to Section 7(c)(i)
of the Standby Letter of Credit
Agreement,
dated as of February 23, 2021 (as amended, restated,
modified or supplemented from time to time, the
“Credit
Agreement,”
the
terms
defined
therein
being
used
herein
as
therein
defined),
among
Everest
Reinsurance
(Bermuda),
Ltd.,
a
company
incorporated
and
existing
under
the
laws
of
Bermuda
(the
“Account
Party”), and Wells Fargo
Bank, National Association (the “Bank”).
The undersigned hereby certifies that:
1.
He
or
she
is
the
[Chief
Executive
Officer]
[Chief
Financial
Officer]
[Vice
President
—
Finance] [Principal Accounting Officer] [Treasurer]
[Assistant Treasurer]
of the Account Party.
2.
Enclosed with this Certificate are copies of the financial st
atements of the Account Party
and
its
Subsidiaries
as
of
_____________,
and
for
the
[________-month
period]
[year]
then
ended,
required
to be
delivered
under Section
7(a) of
the Credit
Agreement.
Such financial
statements
have
been prepared in accordance with GAAP [(subject to the absence of notes required by GAAP and subject
to normal year
-end adjustments)]
and present
fairly,
in all material
respects, the financial
condition of
the Account Party and its Subsidiaries on a consolidated
basis as of the date indicated and the results
of
operations
of
the
Account
Party
and
its
Subsidiaries
on
a
consolidated
basis
for
the
period
covered
thereby.
3.
The
undersigned
has
reviewed
the
terms
of
the
Credit
Agreement
and
has
made,
or
caused
to
be
made
under
the
supervision
of
the
undersigned,
a
review
in
reasonable
detail
of
the
transactions and condition
of the
Account Party and
its Subsidiaries during
the accounting period
covered
by such financial statements.
4.
The examination
described in paragraph
3 above did
no
t disclose, and
the undersigned
has
no
knowledge
of
the
existence
of,
any
Default
or
Event
of
Default
during
or
at
the
end
of
the
accounting period
covered by
such financial statements
or as of
the date
of this Certificate
[, except
as
set forth below.
Describe here or in a separate attachment
any exceptions to paragraph
4 above by listing, in reasonable
detail, the
nature of
the Default
or Event
of Default,
the period
during which
it existed
and the
action
that Everest has taken
or proposes to take with
respect thereto].
5.
Attached
to
this Certificate
as Annex
A is
a covenant
compliance
worksheet
reflecting
the computation
of the financial
covenants set
forth in Section
8 of the Credit
Agreement as of
the last
day of the period covered by the financial
statements enclosed herewith.
IN
WITNESS
WHEREOF,
the
undersigned
has
executed
and
delivered
this
Certificate
as
of
the
_______ day of _____________, ____.
EVEREST REINSURANCE (BERMUDA), LTD.
By:______________________________________
Name:____________________________________
Title:_____________________________________
ANNEX A
COVENANT COMPLIANCE WORKSHEET
A.
Minimum Total
Shareholder’s Equity
(Section 8(a) of the Credit Agreement)
(
1
)
Total
Shareholder’s Equity as of the date
of
determination
a)
Required:
$2,143,539,163.00
b)
Actual:
$
Signature Page to First Amendment to Standby Letter
of Credit
B.
Financial Strength Rating
(Section 8(b) of the Credit Agreement)
(1)
Has the Account Party maintained a financial
strength rating by
A.M. Best Company at all times from the date
of the most
recently delivered Officer’s
Compliance Certificate to and
including the date hereof?
___
Yes
___
No
(2)
Has the financial strength rating by
A.M. Best Company for the
Account Party been equal to or better
than “B++” at all times
during the period described in line (1) above?
___
Yes
___
No
Signature Page to First Amendment to Standby Letter
of Credit
EXHIBIT B
FORM OF
COLLATERAL
VALUE CERTIFICATE
____________, 20__
Wells Fargo
Corporate Banking
550 South Tryon Street
MAC D1086-330
Charlotte, NC 28202
Attention: William R. Goley
Ladies and Gentlemen:
Reference
is made
to
the Standby
Letter
of Credit
Agreement,
dated
as of
February 23,
2021,
among
Everest
Reinsurance
(Bermuda),
Ltd.,
a
company
incorporated
and
existing
under
the
laws
of
Bermuda (the “Account
Party”), and Wells
Fargo BaPnk,
National Association (the “Bank”)
(as amended
or
otherwise
modified
from
time
to
time,
the
“Credit
Agreement”).
Terms
defined
in
the
Credit
Agreement
are,
unless
otherwise
defined
herein
or
the
context
otherwise
requires,
used
herein
as
defined therein.
This Collateral Value Certificate is delivered pursuant to Section 7(e)(iii) of
the Credit Agreement.
The date
of this
Collateral
Value
Certificate
is _____________,
20__ (the
“Certificate Date”).
Set forth
on
Attachment
A
is
the
computation
of
the
Collateral
Value
of
the
Collateral
and
certain
other
information
required
by
Section
7(e)(iii)
of
the
Credit
Agreement
as
of
______________,
20__
(the
“Valuation
Date”),
calculated
in
accordance
with
the
definition
of
“Collateral
Value”
contained
in
the
Credit Agreement and the other provisions
of the Credit Agreement (including Schedule I thereto).
The undersigned
hereby certifies
that (i)
the information
on Attachment
A correctly
sets forth
the Collateral Value (in the aggregate and for each category of Collateral)
and the Outstanding Letters of
Credit
as
of
the
Valuation
Date;
(ii)
the
Outstanding
Letters
of
Credit
do
not
exceed
the
aggregate
Collateral Value
as of the Valuation
Date; and (iii) nothing has come to
the attention of the undersigned
to cause
the undersigned
to believe
that the
Bank does
not have
a first
priority perfected
Lien on
and
security interest in the Collateral
set forth on Attachment
A as of the Certificate Date.
[Signature page to follow]
Signature Page to First Amendment to Standby Letter
of Credit
ACCOUNT PARTY:
EVEREST REINSURANCE (BERMUDA), LTD.
By:
____________________________________
Name:
Title:
Signature Page to First Amendment to Standby Letter
of Credit
ATTACHMENT
A
COLLATERAL
VALUE OF THE
COLLATERAL
Type of Security
Value
Advance Rates
Collateral Value
Cash (denominated in USD) or Certificate of
Deposit
$________
100%
$________
Mutual Funds
Listed (on a nationally recognized
U.S.
exchange) Money Market
Mutual Funds
U.S. Fixed Income Mutual Funds
(excluding high yield and tax exempt)
$________
$________
90%
80%
$________
$________
U.S. Government Bills, Notes, and U.S.
Government Sponsored Agency Securities
(1)
Maturing in 5 years or less
$________
95%
$________
Maturing in more than 5 years
$________
90%
$________
High Grade U.S.
Corporate/Municipal/Structured Fixed
Income Securities (AA/Aa2 or better)
Maturing in 5 years or less
$________
90%
$________
Maturing in more than 5 years
$________
85%
$________
Intermediate Grade U.S.
Corporate/Municipal/Structured Fixed
Income Securities (BBB/Baa2 or better but
worse than AA/Aa2)
(2)
Maturing in 5 years or less
$________
85%
$________
Maturing in more than 5 years
$________
80%
$________
Commercial Paper
A1 or P1 Graded Commercial Paper
$________
85%
$________
A2 or P2 Graded Commercial Paper
$________
80%
$________
Total
Collateral Value
$________
Notes
:
(1)
U.S. Government Bills/Notes/Sponsored Agencies include:
U.S. Treasury Bills, Notes, and Bonds;
U.S. Government Agency and U.S.
Government Sponsored Enterprise (GSE) Securities. Also
included are
Mortgage-Backed
Securities (MBSs).
GSE and
MBS securities
include Fannie
Mae, Freddie
Mac, Ginnie
Mae, FHLB System Banks, and Federal
Farm Credit Banks.
(2) Securities rated BBB or Baa2 shall not comprise greater
than 20% of Collateral Value.
Signature Page to First Amendment to Standby Letter
of Credit
Outstanding Letters of Credit
Beneficiary
Issue Date
Undrawn
Amount
Unreimbursed
Drawings
$________
$________
Total
Outstanding Letters of Credit
$________
$________
Ratio of aggregate Collateral
Value to Outstanding
Letters of Credit: ____________
Signature Page to First Amendment to Standby Letter
of Credit