EX-10.42 13 exhibit1042.htm EXHIBIT 10.42
1
Confidential
Exhibit 10.42
Execution Version
Certain information in the marked exhibit below
has been omitted because it is both (i) not material and (ii) is the
type that the registrant
treats as private or confidential.
Omissions are designated as “[*****].”
Standby Letter of Credit Agreement
(Committed/Unsecured)
STANDBY
LETTER OF CREDIT
AGREEMENT (the
“
Agreement
”), dated
as of
December
30, 2022,
by
and
among
EVEREST
REINSURANCE
(BERMUDA),
LTD.,
a company
incorporated
and existing
under the
laws
of Bermuda
(the “
Account
Party
”), and BAYERISCHE LANDESBANK,
NEW YORK BRANCH, the New York Branch of a financial
institution organized
under the laws of the Federal Republic of Germany
(“
Bank
”).
1.
DEFINED TERMS.
(a)
Definitions.
For purposes of
this Agreement,
in addition to
the terms defined
elsewhere herein,
the following terms have the
meanings set forth below
(such meanings to be
equally applicable to
the singular and plural forms thereof):
“
Affected Financial Institution
” means (a) any EEA Financial Institution
or (b) any UK Financial
Institution.
“
A.M. Best
” means A.M. Best Company,
Inc.
“
Anti-Corruption Laws
” means all laws, rules,
and regulations of any jurisdiction applicable to the
Account Party from time to time concerning or relating
to bribery or corruption, including, to the
extent
applicable,
the United
States
Foreign
Corrupt
Practices
Act
of
1977
and
the
rules
and
regulations
thereunder
and the U.K.
Bribery Act 2010 and the rules and regulations thereunder.
“
Anti-Money Laundering
Laws
” means any
and all laws,
rules and regulations
applicable
to
the
Account
Party
from
time
to
time
concerning
or
relating
to
terrorism
financing
or
money
laundering, including any
applicable provision
of the PATRIOT
Act and The Currency
and Foreign
Transactions Reporting Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§ 5311-5330 and 12
U.S.C. §§ 1818(s), 1820(b) and 1951-1959).
“
Application
” has the meaning set forth in
Section
2(a)
.
“
Annual
Statement
”
means,
with
respect
to
the
Account
Party
for
any
fiscal
year,
the
annual
financial statements
of the
Account
Party
as required
to be
filed with
the
Insurance
Regulatory
Authority
of
its
jurisdiction
of
domicile
and
in
accordance
with
the
laws
of
such
jurisdiction,
together
with
all
exhibits,
schedules,
certificates
and
actuarial
opinions
required
to
be filed
or
delivered therewith.
“
Bail-In Action
” means the exercise of any Write
-Down and Conversion Powers
by the applicable
Resolution Authority in respect of any liability
of an Affected Financial Institution.
2
Confidential
“
Bail-In Legislation
” means (a) with respect to any EEA Member Country implementing Article 55
of Directive
2014/59/EU of
the European
Parliament and
of the Council
of the European
Union,
the implementing
law,
regulation rule
or requirement
for such
EEA Member
Country from
time
to time which is
described in the EU
Bail-In Legislation Schedule and (b)
with respect to the
United
Kingdom,
Part I
of the
United
Kingdom Banking
Act 2009
(as amended
from time
to time)
and
any other
law,
regulation or
rule applicable
in the
United Kingdom
relating to
the resolution
of
unsound or failing banks,
investment firms or other
financial institutions or
their affiliates (other
than through liquidation, administration
or other insolvency proceedings).
“
Bankruptcy
Law
”
means
the
United
States
Bankruptcy
Code
(11
U.S.C.
§
101
et
seq.
),
as
amended,
modified,
succeeded
or
replaced
from
time
to
time,
and
all
other
liquidation,
conservatorship,
bankruptcy,
assignment
for
the
benefit
of
creditors,
moratorium,
rearrangement, receivership, insolvency,
reorganization or similar debtor relief laws
of the United
States or
any state
thereof,
Bermuda or any
other foreign
or other applicable
jurisdictions from
time to time in effect and affecting
the rights of creditors generally.
“
Base
Rate
”
means,
at
any
time,
the
highest
of
(a)
0.00%,
(b)
the
prime
rate
per
annum
established
by the
JPMorgan
Chase Bank,
N.A. as
the reference
rate
for short
term commercial
loans in Dollars, and (c) the NYFRB Rate plus 0.50%;
each change in the Base Rate shall take effect
simultaneously with the corresponding change or changes
in the rate specified in
clause (b) above
or the NYFRB Rate.
“
Business Day
” means (i)
any day other than
a Saturday, Sunday or legal holiday
on which banks in
Hamilton, Bermuda and
New York
City,
New York,
are open for
the conduct of
their commercial
banking business and (ii)
when used in
connection with
a Letter of
Credit denominated in
a Foreign
Currency, such day is also a day
on which banks are
open for dealings in
deposits in such Foreign
Currency in the principal financial center for such
Foreign Currency.
“
Capital
Stock
”
means
(i)
with
respect
to
any
Person
that
is
a
corporation,
any
and
all
shares,
interests
or equivalents
in capital
stock
(whether voting
or nonvoting,
and whether
common or
preferred)
of such
corporation,
and (ii)
with respect
to any
Person
that is
not a
corporation, any
and all partnership,
membership, limited liability
company or other
equity interests of such
Person;
and in
each case,
any and
all warrants, rights
or options
to purchase any of the foregoing.
“
Cash Equivalents
” means (i) securities issued or unconditionally guaranteed by the United States
of
America
or any
agency
or
instrumentality
thereof,
backed
by the
full
faith
and
credit
of
the
United States of America and maturing within 90 days from the date of
acquisition, (ii) commercial
paper issued
by any
Person
organized
under the
laws of
the United
States of
America, maturing
within 90
days
from the
date of
acquisition and,
at the
time of
acquisition,
having
a rating
of at
least A 1
or the equivalent
thereof by Standard
& Poor’s
or at least
P 1 or the
equivalent thereof
by Moody’s,
(iii) time deposits
and certificates
of deposit
maturing within
90 days
from the
date
of issuance and issued
by a bank or trust
company organized
under the laws
of the United States
of America or any state thereof that
has combined capital and surplus
of at least $500,000,000
and
that has (or is a subsidiary of a bank holding company that has) a long-term unsecured debt rating
of at least A or
the equivalent thereof by Standard & Poor’s or
at least A2 or the
equivalent thereof
by Moody’s,
(iv) repurchase obligations
with a term not
exceeding seven
(7) days
with respect to
underlying securities of the types described in clause (i) above entered into with any
bank or trust
company meeting the
qualifications specified in
clause (iii) above, and
(v) money market funds
at
least 95%
of the
assets of
which are
continuously
invested
in securities
of the
type described
in
clauses (i) through (iv) above.
3
Confidential
“
Change in Control
” means (a)
the acquisition
of ownership,
directly or
indirectly,
beneficially or
of record, by any Person
or group (within the meaning of the Securities Exchange
Act of 1934 and
the rules of the SEC thereunder as in effect on the date hereof), other than Everest
Re Group, Ltd.
and
any
of
its
direct
or
indirect
Subsidiaries,
of
Capital
Stock
representing
25%
or
more
of
the
aggregate ordinary
voting power
represented
by the issued
and outstanding
Capital Stock
of the
Account
Party;
or
(b) the
acquisition
of
direct
or
indirect
Control
of
the
Account
Party
by
any
Person or group, other than Everest
Re Group, Ltd. and any
of its direct or indirect Subsidiaries.
“
Change in
Law
” means
the occurrence
after the
date of
this Agreement
of: (a)
the adoption
or
effectiveness of any law,
rule, regulation, judicial ruling, judgment or treaty,
(b) any change in any
law,
rule,
regulation
or
treaty
or
in
the
administration,
interpretation,
implementation
or
application by any Governmental Authority of any law, rule, regulation or treaty,
or (c) the making
or issuance by any Governmental Authority of any request, rule, guideline or directive, whether or
not having the force of law; provided that notwithstanding
anything herein to the contrary,
(i) the
Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder
or issued
in connection
therewith and
(ii) all
requests,
rules, guidelines
or
directives concerning capital adequacy promulgated by the
Bank for International Settlements, the
Basel
Committee
on
Banking
Supervision
(or
any
successor
or
similar
authority)
or
the
U.S.
federal or
foreign regulatory
authorities shall, in
each case, be
deemed to be
a “Change
in
Law,”
regardless of the date enacted,
adopted or
issued.
“
Closing Date
” means December 30, 2022.
“
Code
”
means
the
Internal
Revenue
Code
of
1986,
and
the
rules
and
regulations
promulgated
thereunder.
“
Commitment
”
means
the
obligation
of
Bank
to
Issue
Letters
of
Credit
for
the
account
of
the
Account Party hereunder in an aggregate principal amount at any time outstanding
not to exceed
$150,000,000, as such amount may be reduced from
time to time pursuant to
the terms hereof.
[*****]
“
Commitment Termination
Date
” means
the earliest
to occur
of (a)
December 30,
2024, (b)
the
date of termination of the entire Commitment by the Account
Party pursuant
to
Section 2(h)
, and
(c) the date of termination of the Commitment
pursuant
to
Section
11(a)
.
“
Control
” means the possession,
directly or indirectly, of the power to direct
or cause the direction
of the management or
policies of a Person,
whether through the ability
to exercise voting
power,
by contract or otherwise.
“
Controlling
” and “
Controlled
” have meanings correlative thereto.
[*****]
“
Credit Documents
” means,
collectively, this Agreement, [*****],
the Letter of
Credit Documents,
and
each
other
agreement,
document,
or
instrument
executed
and
delivered
by
the
Account
Party to the Bank in connection with any
Credit Document or any Letter
of Credit.
“
Default
”
means
any
of the
events
specified
in
Section
10
which
with
the
passage
of time,
the
giving of notice or any other condition, would
constitute an Event of
Default.
4
Confidential
“
Disqualified Capital
Stock
” means, with
respect to any
Person, any
Capital Stock
of such Person
that,
by
its
terms
(or
by
the
terms
of
any
security
into
which
it
is
convertible
or
for
which
it
is
exchangeable),
or upon
the happening
of any
event
or
otherwise,
(i) matures
or is
mandatorily
redeemable
or
subject
to
any
mandatory
repurchase
requirement,
pursuant
to
a
sinking
fund
obligation or otherwise, (ii) is redeemable or subject to any mandatory repurchase requirement at
the sole
option
of
the
holder
thereof, or (iii) is convertible
into or exchangeable for
(whether at
the
option
of
the issuer or the holder
thereof) (A) debt securities or (B)
any Capital Stock referred
to in clause
(i) or (ii)
above, in each
case under clause
(i), (ii) or
(iii) above at
any time on
or prior
to
the
Final
Maturity
Date;
provided,
however,
that
only
the
portion
of
Capital
Stock
that
so
matures or is mandatorily
redeemable, is so redeemable
at the option of the
holder thereof,
or is
so convertible or exchangeable on or prior to such date
shall be deemed to be Disqualified Capital
Stock.
“
Dollar Amount
” means, at any time, (i) with respect to any amount denominated in Dollars, such
amount, and (ii) with respect to any amount denominated in any Foreign
Currency, the equivalent
amount
thereof
in
Dollars
as
determined
by
Bank
at
such
time
on
the
basis
of
the
Spot
Rate
(determined in respect of the most recent Revaluation
Date) for the purchase of Dollars with such
Foreign Currency.
“
Dollars
” or “
$
” means dollars of the United States
of America.
“
Draw Date
” has the meaning specified in
Section
2(b)(i)
.
“
Due Date
” has the meaning specified in
Section
2(b)(i)
.
“
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 of the member states of the European
Union, Iceland,
Liechtenstein, and Norway.
“
EEA Resolution Authority
” means any public administrative
authority or any Person entrusted
with public administrative authority
of any EEA Member Country (including any
delegee) having
responsibility for the resolution of any
EEA Financial Institution.
“
ERISA
” means the
Employee Retirement Income Security Act of
1974, as amended.
“
ERISA Affiliate
” means any trade or business (whether
or not incorporated) that, together with the
Account
Party,
is treated
as a
single employer
under Section
414(b) or
(c) of the
Code or
Section
4001(14) of
ERISA or,
solely for
purposes
of Section 302
of ERISA
and Section 412
of the
Code, is
treated as a single employer under
Section 414(m) or (o) of the Code.
5
Confidential
“
ERISA
Event
”
means
(a) any
“reportable
event”,
as
defined
in
Section 4043
of
ERISA
or
the
regulations
issued
thereunder
with
respect
to
a
Plan
(other
than
an
event
for
which
the
30
day
notice period
is waived);
(b) the failure
to satisfy
the “minimum
funding standard”
(as defined
in
Section 412 of the Code
or Section 302 of
ERISA), whether or
not waived with
respect to any
Plan;
(c) the filing pursuant
to Section 412(c) of the
Code or Section 302(c) of
ERISA of an application
for
a
waiver
of
the
minimum
funding
standard
with
respect
to
any
Plan;
(d) the
incurrence
by
the
Account Party or any of its ERISA Affiliates
of any liability under Title IV of ERISA with respect to the
termination of any
Plan; (e) the receipt
by the Account
Party or any
of its ERISA Affiliates
from the
PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or
to
appoint
a trustee
to
administer
any
Plan; (f) the
incurrence
by
the Account
Party
or any
of its
ERISA Affiliates
of any liability
with respect to
the withdrawal
or partial withdrawal
of the Account
Party
or any
of its
ERISA Affiliates
from any
Plan or
Multiemployer
Plan; or
(g) the receipt
by the
Account Party
or any of
its ERISA Affiliates
of any notice,
or the receipt
by any Multiemployer
Plan
from, the Account Party,
or any of its ERISA Affiliates of any notice, concerning the imposition upon
the Account
Party,
or any
of its
ERISA Affiliates
of Withdrawal
Liability
or a
determination
that a
Multiemployer Plan is, or is expected to be, insolvent
within the meaning of Title IV of ERISA.
“
Event of Default
” has the meaning specified in
Section
10
.
“
Exchange Act
” means the Securities Exchange Act of 1934.
“
FATCA
” means (a) Sections 1471
through 1474 of the
Code, as of the date
of this Agreement (or
any
amended
or
successor
version
that
is
substantively
comparable
and
not
materially
more
onerous to comply with),
any current or future
regulations or official interpretations
thereof, and
any
agreements
entered
into
pursuant
to
Section
1471(b)(1)
of
the
Code,
(b)
any
treaty,
law,
regulation
or
other
official
guidance
enacted
in
any
other
jurisdiction,
or
relating
to
an
intergovernmental
agreement
between
the
United
States
and
any
other
jurisdiction
with
the
purpose
(in
either
case)
of
facilitating
the
implementation
of
(a)
above,
or
(c)
any
agreement
pursuant
to
the implementation
of paragraphs
(a) or
(b) above
with
the
IRS,
the
United
States
government or any governmental
or taxation authority in the United States.
“
Federal
Funds
Effective
Rate
” means,
for
any
day,
the rate
calculated
by
the NYFRB
based
on
such day’s federal
funds transactions by depositary
institutions, as determined in such
manner as
shall be set
forth on the NYFRB’s Website
from time to time,
and published on the
next succeeding
Business Day by the NYFRB as the effective
federal funds rate.
“
Final Expiry Date
” means the
date when the
Final Maturity Date has
occurred, all Letters of Credit
have
expired
or
terminated
without
any
pending
drawing
thereon,
and
all
Obligations
owing
hereunder and in the other Credit Documents have
been paid in full.
“
Final Maturity Date
” means the first anniversary of
the Commitment Termination Date.
“
Financial
Strength
Rating
”
means,
as
to
any
Person,
the
rating
that
has
been
most
recently
announced by A.M. Best as the “financial strength
rating” of such Person.
“
Fiscal Year
” means the fiscal year of the Account Party.
“
Foreign Currency
” means any currency other than Dollars approved
by Bank, in its sole discretion,
from time to time.
6
Confidential
“
Foreign Currency
Equivalent
” means,
at any
time, with
respect to
any amount
denominated in
Dollars, the
equivalent amount
thereof in the
applicable Foreign Currency as determined by Bank
at such time on the basis of the Spot Rate (determined in respect
of the
most recent
Revaluation
Date) for the purchase of such Foreign
Currency with Dollars.
“
GAAP
”
means
generally
accepted
accounting
principles
in
the
United
States
set
forth
in
the
opinions and
pronouncements
of the
Accounting Principles
Board and
the American
Institute
of
Certified
Public
Accountants
and
statements
and
pronouncements
of
the
Financial
Accounting
Standards
Board
or
such
other
principles
as
may
be
approved
by
a
significant
segment
of
the
accounting profession in the United States, that are applicable to the circumstances
as of the date
of determination, consistently applied.
“
Governmental
Authority
”
means
the
government
of
any
nation
or
any
political
subdivision
thereof, whether at the national, state,
territorial, provincial, municipal or any other level, and
any
agency, authority,
instrumentality,
regulatory body,
court, central bank
or other
entity exercising
executive,
legislative,
judicial,
taxing,
regulatory
or
administrative
powers
or
functions
of,
or
pertaining
to,
government
(including any
supra-
national
bodies such
as the
European
Union or
the European Central Bank).
[*****]
[*****]
“
Hedge Agreement
” means any interest or
foreign currency rate swap,
cap, collar,
option, hedge,
forward rate
or other similar agreement
or arrangement
designed to protect
against fluctuations
in interest rates or currency exchange rates, including any swap agreement
(as defined in 11 U.S.C.
§ 101).
“
Hedge Termination Value
” means, in respect of any one
or more Hedge Agreements, after taking
into
account
the
effect
of
any
legally
enforceable
netting
agreement
relating
to
such
Hedge
Agreements, (a) for
any date on
or after
the date
such Hedge
Agreements have been closed out
and
termination value(s)
determined
in accordance
therewith, such
termination value(s),
and (b)
for
any
date
prior
to
the
date
referenced
in
clause
(a),
the
amount(s)
determined
as
the
mark-to-
market value(s) for
such Hedge Agreements,
as determined based upon
one or more mid-market
or other readily available quotations provided by any recognized dealer
in such Hedge Agreements
(which may include Bank or any affiliate
of Bank).
7
Confidential
“
Indebtedness
” means,
with respect
to any
Person
(without duplication),
(i) all
indebtedness of
such
Person
for
borrowed
money
or in
respect
of loans
or
advances,
(ii) all
obligations
of
such
Person
evidenced
by
notes,
bonds,
debentures
or
similar
instruments,
(iii)
all
reimbursement
obligations of such Person with respect to surety bonds, letters of credit and bankers’ acceptances
(in
each
case,
whether
or
not
drawn
or
matured
and
in
the
stated
amount
thereof),
(iv)
all
obligations
of
such
Person
to
pay
the
deferred
purchase
price
of
property
or
services,
(v)
all
indebtedness
created
or
arising under
any
conditional
sale
or
other
title
retention
agreement
with
respect
to
property
acquired
by
such
Person,
(vi) all
obligations
of such
Person
as lessee
under leases that are or
are required to be, in accordance
with GAAP, recorded as
capital or
finance
leases, to
the extent
such obligations
are
required
to
be
so
recorded,
(vii)
all
obligations
and
liabilities
of
such
Person
incurred
in
connection
with
any
transaction
or
series
of
transactions
providing for the financing of assets through one or more securitizations
or in connection with, or
pursuant to, any synthetic
lease or similar off-balance sheet financing, (viii) all Disqualified Capital
Stock issued
by such
Person, with
the amount
of Indebtedness
represented
by such
Disqualified
Capital Stock being equal
to the greater of its
voluntary or involuntary
liquidation preference
and
its maximum fixed repurchase price, but
excluding accrued dividends, if any (for
purposes hereof,
the “maximum fixed repurchase price” of any
Disqualified Capital Stock that does not have a fixed
repurchase price shall
be calculated in
accordance with the terms of
such Disqualified Capital Stock
as if
such Disqualified
Capital Stock
were
purchased
on
any
date
on
which
Indebtedness
shall
be
required
to
be
determined
pursuant to
this Agreement,
and if such
price is based
upon, or
measured by, the fair market value
of such Disqualified
Capital Stock,
such fair market
value shall
be determined
reasonably and in good
faith by the board of directors
or other governing body
of
the issuer
of
such
Disqualified
Capital
Stock),
(ix)
the
Hedge
Termination
Value
of
such
Person
under any Hedge Agreements, calculated as of
any date as if
such agreement or arrangement were
terminated as of such
date, (x) all
contingent obligations of such
Person in respect
of Indebtedness
of other Persons
and (xi) all
indebtedness referred
to in
clauses (i)
through (x)
above secured
by
any
Lien
on
any
property
or
asset
owned
or
held
by
such
Person
regardless
of
whether
the
indebtedness secured
thereby shall have
been assumed by
such Person
or is
nonrecourse
to the
credit of such Person.
“
Instructions
” has the meaning set forth in
Section
2(a)
.
“
Insurance
Regulatory
Authority
”
means,
with
respect
to
the
Account
Party,
the
insurance
department or
similar Governmental
Authority charged
with regulating
insurance
companies
or
insurance holding companies, in its jurisdiction of domicile
and, to the extent that it has regulatory
authority over
the Account
Party,
in each other
jurisdiction in
which the
Account Party
conducts
business or is licensed to conduct business.
“
Investment Company
Act
” means the Investment
Company Act of
1940 (15 U.S.C.
§ 80(a)(1),
et
seq.
).
“
IRS
” means the United States Internal
Revenue Service.
“
issue
” means, with respect to
any Letter of
Credit, to issue, to amend
or to extend the expiry
of,
or to renew or increase the stated
amount of, such
Letter of Credit. The terms “
issued
”,
“
issuing
”
and “
issuance
” have corresponding meanings.
“
Letters of
Credit
” means the
collective reference
to standby
letters of
credit issued
pursuant to
Section
2
.
8
Confidential
“
Letter
of
Credit
Documents
”
means,
with
respect
to
any
Letter
of
Credit,
collectively,
any
Applications,
agreements,
instruments,
guarantees
or
other
documents
(whether
general
in
application
or applicable
only to
such Letter
of Credit)
governing
or providing
for the
rights and
obligations of the parties concerned or at risk with respect to such Letter of Credit.
[*****]
“
Lien
” means any
mortgage, pledge, hypothecation,
assignment, security interest,
lien (statutory
or otherwise), preference, priority, charge or other
encumbrance of any nature, whether
voluntary
or involuntary, including the interest of any
vendor or lessor
under any conditional sale
agreement,
title retention agreement, capital lease or any other lease or arrangement having substantially the
same effect as any of the foregoing.
“
Material
Adverse
Effect
”
means
a
material
adverse
effect
upon
(i)
the
financial
condition,
operations, business, properties
or assets of the Account
Party, (ii) the ability of
the Account Party
to perform its
payment
or
other
material
obligations
under
this
Agreement
or
any
of
the
other
Credit Documents,
or (iii)
the legality,
validity,
or enforceability
of this
Agreement or
any
of the
other Credit Documents or the rights and remedies
of Bank hereunder and thereunder.
“
Multiemployer Plan
” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.
“
Multiple
Employer
Plan
”
means
an
employee
pension
benefit
plan
with
respect
to
which
the
Account Party or any of its
ERISA Affiliates is a contributing
sponsor,
and that has two (2) or more
contributing sponsors
at least
two (2)
of whom
are not
under common
control, as
such a plan
is
described in Section 4064 of ERISA.
“
Non-Extension Notice Date
” has the meaning given to such term in
Section
2(g)
.
“
Notice of Non-Extension
” has the meaning given to such term in
Section
2(g)
.
“
NYFRB
” means the Federal Reserve Bank of New
York.
“
NYFRB Rate
” means,
for any
day,
the greater
of (a)
the Federal
Funds Effective
Rate in
effect on
such day and (b) the Overnight Bank Funding Rate
in effect on such day (or for any
day that is not a
Business Day,
for the immediately
preceding Business Day);
provided
that if none of
such rates
are
published for
any day
that is
a Business
Day,
the term
“NYFRB Rate”
means the
rate
for a
federal
funds transaction
quoted at
11:00 a.m. on
such day
received by
Bank from
a federal
funds broker
of
recognized
standing
selected
by
it;
provided
,
further
,
that
if
any
of
the
aforesaid
rates
as
so
determined are less than zero, such rate shall be
deemed to be zero for purposes of
this Agreement.
“
NYFRB’s Website
” means the website of the NYFRB at
http://www.newyorkfed.org
, or any
successor source.
“
Obligations
” means all obligations and liabilities
(including (a) any interest and fees accruing after
the filing of a petition or
commencement of a case by or with respect to the Account Party seeking
relief under
any applicable
Bankruptcy Laws,
whether or not
the claim for such interest
or fees is
allowed or
allowable in such proceeding,
(b) the
obligation
to provide
cash collateral
hereunder,
and (c) reimbursement and other payment obligations and liabilities) of the Account Party to Bank
arising under,
or in connection
with, the applicable
Credit Document
(including
Section
5
below)
any Application
or any Letter
of Credit, in
each case whether
matured or unmatured,
absolute or
contingent, now existing or hereafter incurred.
“
OFAC
” means the U.S. Department of the Treasury’s
Office of Foreign Assets Control.
9
Confidential
[*****]
“
Other Taxes
” has the meaning specified in
Section
2(c)
.
“
Outstanding
Letters
of Credit
” means,
as of
any date,
the sum
of (a)
the Stated
Amount
of
all
outstanding
Letters
of
Credit
at
such
time
and,
without
duplication,
(b)
all
reimbursement
obligations in respect of Letters
of Credit at such time.
“
Overnight Bank
Funding Rate
” means, for
any day,
the rate
comprised of
both overnight
federal
funds and overnight eurodollar borrowings
denominated in Dollars by U.S.-managed banking
offices
of depository institutions, as such composite rate
shall be determined by the NYFRB as set forth on
the NYFRB’s Website
from time to time, and published on
the next succeeding Business Day by
the
NYFRB as an overnight bank funding rate.
“
PATRIOT
Act
” means the USA PATRIOT
Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)).
“
Payment Date
” has the meaning specified in
Section
2(b)(i)
.
“
PBGC
” means the Pension Benefit Guaranty
Corporation referred
to and defined in ERISA and any
successor entity performing similar functions.
“
Person
” means
any
natural
person,
corporation,
limited liability
company,
trust,
joint venture,
association, company,
partnership, governmental authority
or other
entity.
“
Plan
” means any
employee pension
benefit plan (including
a Multiple Employer
Plan, but
other
than a Multiemployer Plan) subject to the provisions of
Title IV of ERISA or
Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Account Party or any ERISA Affiliate thereof is
(or,
if
such
plan
were
terminated,
would
under
Section
4069
of
ERISA
be
deemed
to
be)
an
“employer” as defined in Section 3(5) of ERISA.
[*****]
“
Requirement
of Law
” means,
with respect
to
any
Person,
the charter,
articles,
constitution
or
certificate
of
organization
or
incorporation
and
by-laws
or
other
organizational
or
governing
documents
of
such
Person,
and
any
statute,
law,
treaty,
rule,
regulation,
order,
decree,
writ,
injunction or
determination
of any
arbitrator
or court
or other
Governmental
Authority,
in each
case applicable
to or binding
upon such Person
or any
of its property
or to which
such Person
or
any of its property is subject
or otherwise pertaining to any or
all of the transactions contemplated
by this Agreement and the other Credit Documents.
“
Resolution
Authority
” means
an EEA
Resolution
Authority or,
with respect
to any
UK Financial
Institution, a UK Resolution Authority.
10
Confidential
“
Responsible
Officer
”
means,
as
to
any
Person,
the
chief
executive
officer,
president,
chief
financial officer,
controller,
treasurer or assistant
treasurer of such Person
or any other
officer
of
such
Person
designated
in
writing
by
the
Account
Party
and
reasonably
acceptable
to
Bank;
provided that,
to
the
extent requested thereby, Bank
shall have
received a certificate of such Person
certifying
as
to
the
incumbency
and
genuineness
of
the
signature
of
each
such
officer.
Any
document
delivered
hereunder
or
under
any
other
Credit
Document
that
is
signed
by
a
Responsible
Officer
of
a
Person
shall
be
conclusively
presumed
to
have
been
authorized
by
all
necessary corporate, limited liability company, partnership and/or other action on the part
of such
Person
and such
Responsible
Officer shall
be conclusively
presumed
to
have
acted
on behalf
of
such Person.
“
Revaluation Date
” means with respect to any Letter of Credit, each of the
following: (i) each date
of issuance of
a Letter of
Credit denominated in
a Foreign Currency, (ii) each
date of an
amendment
of
any
such
Letter
of
Credit
having
the
effect
of
increasing
or
decreasing
the
Stated
Amount
thereof, (iii) each date of
any payment by Bank under
any Letter of
Credit denominated in
a Foreign
Currency and (iv) each such additional date as Bank shall determine or require.
“
Sanctions
”
means
any
and
all
economic
or
financial
sanctions,
sectoral
sanctions,
secondary
sanctions, trade
embargoes and
anti-terrorism laws,
including but
not limited
to those
imposed,
administered or enforced from time to time by the U.S.
government (including those administered
by
OFAC
or
the
U.S.
Department
of
State),
the
United
Nations
Security
Council,
the
European
Union, His Majesty’s Treasury,
or other relevant sanctions authority.
“
Sanctioned Country
” means at any time, a
country,
territory or region
which is itself the
subject
or target of any Sanctions.
“
Sanctioned
Person
”
means,
at
any
time,
(a)
any
Person
listed
in
any
Sanctions-related
list
of
designated
Persons
maintained
by
OFAC
(including
OFAC’s
Specially
Designated
Nationals
and
Blocked Persons
List and OFAC’s
Consolidated Non-
SDN List),
the U.S.
Department of
State,
the
United
Nations
Security
Council, the
European
Union,
His Majesty’s
Treasury,
or
other relevant
sanctions
authority,
(b)
any
Person
located,
operating,
organized
or
resident
in
a
Sanctioned
Country or (c) any Person owned or controlled by any such
Person or Persons described in clauses
(a)
and
(b),
including
a
Person
that
is deemed
by
OFAC
to
be
a
Sanctions
target
based
on the
ownership of such legal entity by
Sanctioned Peron(s).
“
Solvent
” means, as
to any Person
as of any
date of determination,
that on such
date (a) the fair
value
of
the
property
of
such
Person
is
greater
than
the
total
amount
of
liabilities,
including
contingent liabilities,
of such Person,
(b) the present fair
saleable value of
such Person
is not less
than
the amount
that will
be required
to
pay
the probable
liability of
such
Person
on its
debts,
including contingent debts, as they
become absolute and matured, (c) such
Person does not intend
to,
and
does
not
believe
that
it
will,
incur
debts
or
liabilities,
including
contingent
debts
and
liabilities, beyond such Person’s ability to pay such debts and
liabilities as they mature and (d) such
Person is not engaged in a
business or a transaction, and is not about
to engage in a business or a
transaction, for which such Person’s property would constitute an unreasonably small capital.
The
amount of any contingent liability at any
time shall be computed as the amount that, in light of all
of the
facts and
circumstances
existing at
such time,
represents the
amount that
can reasonably
be expected to become an actual or matured
liability.
11
Confidential
“
Spot Rate
” means, with respect to
any Foreign Currency, the rate quoted by Bank as the spot rate
for
the
purchase
by
Bank
of
such
Foreign
Currency
with
Dollars
through
its
principal
foreign
exchange trading office at
approximately 11:00 a.m., London time, on
the date two Business Days
prior to the date as of which the foreign exchange
computation
is made; provided
that Bank
may
use such spot
rate quoted
on the date
as of which
the foreign
exchange
computation is
made in
the case of any Letter of Credit
denominated in an Foreign Currency.
“
Standard
Letter of
Credit Practice
” means,
for Bank,
any U.S.
federal
or state
or foreign
law or
letter of credit
practices applicable
in the city in
which Bank issued
the applicable Letter of Credit
or for
its branch
or correspondent
banks, such
laws and
practices applicable in
the city
in which
it has
advised, confirmed or
negotiated such Letter of Credit, as the case may be.
Such practices shall be
(i) of banks that regularly issue letters of credit in the particular city, and (ii) required
or permitted
under the ISP (as
defined below) or
UCP (as defined
below), as chosen
in the applicable
Letter of
Credit. “
ISP
” means,
International
Standby
Practices
1998 (International
Chamber of
Commerce
Publication No.
590) and any
subsequent revision
thereof adopted
by the International
Chamber
of
Commerce
on
the
date
such
Letter
of
Credit
is
issued.
“
UCP
”
means,
Uniform
Customs
and
Practice for Documentary Credits
2007 Revision, International Chamber of Commerce
Publication
No. 600 and any subsequent revision thereof adopted by the International Chamber of Commerce
on the date such Letter of Credit
is issued.
“
Stated
Amount
” means,
with respect
to
any
Letter
of Credit
at
any
time, the
aggregate
Dollar
Amount available to
be drawn thereunder
at such time (regardless
of whether any conditions
for
drawing could then be met).
“
Subsidiary
” means
as to
any
Person,
any
corporation,
partnership,
limited liability
company
or
other
entity
of
which
more
than
fifty
percent
(50%)
of
the
outstanding
Capital
Stock
having
ordinary voting power to elect a majority of the board of directors
(or equivalent governing body)
or other managers of
such corporation,
partnership, limited liability
company or other entity
is at
the time owned by (directly
or indirectly) such Person (irrespective of whether, at the time, Capital
Stock of
any
other class
or classes
of such
corporation,
partnership,
limited liability
company
or
other entity shall
have or might have
voting power by reason
of the happening
of any contingency).
“
Taxes
” has the meaning specified in
Section
2(c)
.
“
Threshold Amount
” means $200,000,000.
“
UCC
” means
the Uniform
Commercial Code
as in
effect on
the
date
hereof in
the State
of New
York.
“
UK Financial
Institution
”
means any
BRRD Undertaking
(as such
term is
defined under
the PRA
Rulebook
(as
amended
from
time
to
time)
promulgated
by
the
United
Kingdom
Prudential
Regulation Authority)
or any
person falling
within IFPRU 11.6
of the FCA
Handbook (as
amended
from
time
to
time)
promulgated
by
the
United
Kingdom
Financial
Conduct
Authority,
which
includes
certain
credit
institutions
and
investment
firms,
and
certain
affiliates
of
such
credit
institutions or investment
firms.
“
UK Resolution Authority
” means Bank of England or any other public administrative
authority
having responsibility for the resolution
of any UK Financial Institution.
[*****]
“
U.S.
” means United States of America.
12
Confidential
“
Withdrawal
Liability
” means
liability to
a Multiemployer
Plan as a
result of
a complete
or partial
withdrawal from such Multiemployer Plan, as such terms are defined in
Part I of Subtitle E of
Title IV
of ERISA.
“
Write-Down
and Conversion
Powers
” means,
(a) with
respect
to
any
EEA Resolution
Authority,
the write-down
and conversion
powers of
such EEA
Resolution Authority
from time to
time under
the Bail-In
Legislation for
the applicable
EEA Member
Country,
which write-down
and conversion
powers
are
described
in
the
EU
Bail-In
Legislation
Schedule,
and
(b)
with
respect
to
the
United
Kingdom,
any powers of the applicable Resolution Authority
under the Bail-In Legislation to cancel,
reduce, modify
or change
the form
of a
liability of
any UK
Financial Institution
or any
contract
or
instrument
under
which
that
liability
arises,
to
convert
all
or
part
of
that
liability
into
shares,
securities or
obligations
of that
person
or any
other person,
to provide
that any
such contract
or
instrument is to have effect
as if a right had been exercised under
it or to suspend any obligation in
respect
of that
liability
or
any
of the
powers
under
that
Bail-In
Legislation
that
are
related
to
or
ancillary to any of those powers.
(b)
Exchange Rates; Currency Equivalents
.
(i)
The Bank shall determine
the Spot Rates as
of each Revaluation
Date to be used
for
calculating
Dollar
Amounts
of
Letters
of
Credit
denominated
in
Foreign
Currencies.
Such
Spot
Rates
shall
become effective as of such Revaluation Date
and shall be the Spot Rates employed in converting any
amounts
between
the applicable
currencies
until
the next
Revaluation
Date
to
occur.
Except
for purposes
of financial
statements
required
to
be
delivered
hereunder
or
calculating
financial
covenants
hereunder
and
except
as
otherwise
provided
herein,
the
applicable
amount
of
any
currency
(other
than
Dollars)
for
purposes
of
the
Credit Documents shall be such Dollar Amount as so
determined by Bank.
(ii)
Wherever
in
this
Agreement
in
connection
with
the
issuance,
amendment
or
extension
of a
Letter
of Credit,
an amount,
such as
a required
minimum or
multiple amount,
is expressed
in
Dollars, but
such Letter of
Credit is denominated
in a
Foreign Currency, such amount
shall be
the relevant Foreign
Currency Equivalent of such Dollar amount (rounded to the nearest unit of such Foreign Currency,
with 0.5 of a
unit being rounded upward), as determined
by Bank.
2.
LETTER OF CREDIT FACILITY.
13
Confidential
(a)
General.
At the
request of
the Account
Party,
Bank agrees,
on and subject
to the terms
and
conditions of this Agreement, to
issue standby Letters of Credit for the
account of the Account
Party in Dollars (or, in Bank’s sole discretion, a Foreign Currency) from time to time during the
period from
the Closing
Date to
but not
including the
Commitment Termination
Date. Bank
may,
in its sole
discretion, arrange
for one
or more
Letters
of Credit to
be issued
by its
New
York branch,
which branch is on the List of Qualified U.S.
Financial Institutions maintained by
the Securities Valuation Office
of the National Association of Insurance Commissioners,
or by
any other branch
or affiliate of
Bank that is
on the List
of Qualified U.S. Financial
Institutions
maintained
by
the
Securities
Valuation
Office
of
the
National
Association
of
Insurance
Commissioners, in which
case the term “Bank”
shall include any such
branch or affiliate
with
respect to
Letters
of Credit
issued by
such branch
or affiliate.
Letters
of Credit
may only
be
issued on Business Days.
The request to issue
a Letter of Credit
(an “
Application
”) shall be in
such form
as Bank
shall from
time to
time require
or agree
to accept
(including any
type of
electronic form or means of communication acceptable to Bank) and, upon the receipt of any
Application, Bank shall process such Application in accordance with its customary procedures
and shall, subject
to
Section
4
, promptly issue
the Letter of
Credit requested
thereby (but
in
no event
shall Bank
be required
to issue
any Letter of Credit earlier than three
Business Days
after its receipt of
the Application therefor) by
issuing the
original of
such Letter
of Credit
to
the
beneficiary
thereof
or
as
otherwise
may
be
agreed
by
Bank
and
the
Account
Party.
Inquiries, communications and instructions (whether written,
facsimile or in
other electronic
form approved
by Bank)
regarding a
Letter of
Credit, an
Application and
this Agreement
are
each referred to herein as “
Instructions
”.
Bank’s records of the
content of any Instruction
will
be conclusive, absent manifest error.
(b)
General Payment Obligations.
For each Letter of Credit,
the Account Party shall,
as to clause
(i) below, reimburse
Bank, and as to all other clauses below,
pay Bank, in each case in Dollars
(unless Bank agrees otherwise with Account Party):
(i)
with respect to a drawing under any Letter of Credit, the amount of each drawing paid by
Bank thereunder
(such date
of payment
hereinafter referred
to as
the “
Draw Date
”) no
later than the first succeeding Business
Day after the Account Party’s
receipt of notice of
such payment by
Bank (the “
Due Date
”), with
interest as
provided below on the
amount
so
paid by
Bank
(to the
extent
not reimbursed
prior
to
2:00 p.m.
Eastern
Time on
the
Draw Date) for the period from the Draw
Date to the date the reimbursement
obligation
created thereby is satisfied in
full (the “
Payment Date
”). If the
Payment Date is on or
prior
to the Due
Date, such interest
shall be payable at the Base Rate
as in effect from time to
time during the period from the
Draw Date
to the Payment
Date. If the
Payment Date
is
after
the
Due
Date,
such
interest
shall
be
payable
(x)
as
provided
in
the
preceding
sentence
during the
period from
and including
the Draw
Date to
and not
including the
Due
Date,
and
(y)
at
the
Base
Rate
as
in
effect
from
time
to
time
plus
2%
from
and
including the Due Date to and not including the Payment Date;
(ii)
the fees payable by the Account
Party at such times and in such amounts as are set
forth
in
Section
2(i)
.
(iii)
except
as otherwise
provided
in clause
(i) above
and clause
(iv) below,
interest on each
amount payable by the
Account Party under
the applicable Credit
Documents for each day
from and
including the
date such payment
is due to
and not
including the date
of payment,
on demand, at a rate per
annum equal to the Base
Rate as in effect from time to time
plus
2%;
14
Confidential
(iv)
within ten (10) days
of demand, Bank’s
reasonable and documented
out-of-pocket
costs
and
expenses
(including
the
reasonable
and
documented
legal
fees,
charges
and
disbursements of
outside counsel
to Bank
incurred in
connection with the
protection or
enforcement
of Bank’s
rights
against
the
Account
Party
under this
Agreement
and
the
other applicable
Credit Documents
and any
correspondent
bank’s
documented charges
related thereto), with interest from the date of demand by Bank
to and not including
the
date of payment
by the Account
Party,
at a rate
per annum equal
to the Base
Rate as in
effect from time to time plus 2%;
(v)
if as
a result
of any
Change in
Law,
Bank determines
that the
cost to
Bank of
issuing or
maintaining any Letter of Credit
is increased (excluding, for purposes of this clause (a)(v),
any
such
increased
costs
resulting
from
(A)
income
taxes,
franchise
taxes
and
similar
taxes
imposed
on
Bank
by
any
taxing
authority,
any
U.S.
federal
withholding
taxes
imposed under FATCA
and Other Taxes (in each case as to
which
Section
2(c)
shall govern)
and (B) changes in the basis of taxation of
overall net
income or
overall gross
income by
the U.S. or
by the foreign
jurisdiction or state
under the laws
of which Bank is
organized
or has its
lending office or
any political
subdivision thereof),
then the Account
Party will
pay to Bank, from
time to time,
within ten (10)
days after demand by Bank,
which demand
shall include
a statement
of the
basis
for such
demand and
a calculation
in
reasonable
detail of
the amount
demanded, additional
amounts sufficient
to compensate
Bank for
such increased
cost. A
certificate as
to the amount
of such
increased cost,
submitted to
the
Account
Party
by
Bank,
shall
be
conclusive
and
binding
for
all
purposes,
absent
manifest error; and
(vi)
if Bank determines that any Change in Law affecting Bank or any lending office of Bank or
Bank’s holding company regarding capital or liquidity requirements has or
would have the
effect of reducing
the rate
of return on
Bank’s capital
or on the capital
of Bank’s
holding
company as a consequence of this Agreement or the Letters of Credit issued
by Bank to a
level below that which Bank or Bank’s holding company could have
achieved but for such
Change
in
Law
(taking
into
consideration
Bank’s
or
its
holding
company’s
policies
with
respect to
capital adequacy),
then from time
to time the
Account Party
will pay
to Bank
within
ten (10) days
after demand by
Bank, which demand
shall include a
statement of
the
basis
for
such
demand
and
a
calculation
in
reasonable
detail
of
the
amount
demanded, such
additional amount
or amounts
as will
compensate Bank or
Bank’s holding
company for any such reduction
suffered.
A certificate as to such amounts
submitted
to
the
Account
Party
by
Bank
shall
be
conclusive
and
binding
for
all
purposes,
absent
manifest error.
Bank
shall
use
reasonable
efforts
to
designate
a
different
lending
office
if
such
designation will avoid (or reduce the cost to the Account Party
of) any event described in
the
preceding
sentence
and
such
designation
will
not,
in
Bank’s good
faith
judgment,
subject
Bank
to
any
unreimbursed
cost
or
expense
and
would
not
otherwise
be
disadvantageous to Bank.
Notwithstanding
the
provisions
of
clause
(v)
or
(vi)
above
or
Section
2(c)
below
(and
without
limiting
the
immediately
preceding
paragraph),
Bank
shall
not
be
entitled
to
compensation from
the Account
Party for
any amount
arising prior
to the
date which
is
180
days
before
the
date
on
which
Bank
notifies
the
Account
Party
of
such
event
or
circumstance (except that if such event or circumstance
is retroactive, then such 180-day
period shall be extended to include the period of retroactive
effect thereof).
Any payments received by Bank
pursuant to the Credit
Documents after 1:00 p.m. Eastern
shall be deemed to have been made on
the next succeeding Business Day for all purposes
under the Credit Documents.
15
Confidential
(c)
Immediately Available Funds; No Withholding.
All reimbursements and payments by or on behalf
of the Account
Party shall
be made in immediately
available funds,
free and clear
of and without
deduction for any present or future Taxes,
set-off or other liabilities, to such location
as Bank may
reasonably
designate
from
time to
time.
The
Account
Party
shall
pay
all
withholding
taxes
and
Other Taxes
imposed by
any taxing
authority on
reimbursement or
payment under
any Letter
of
Credit and any
Credit Document, and
shall indemnify Bank
against all
liabilities, costs,
claims and
expenses resulting from Bank having to
pay or from any
omission to pay or
delay in paying
any such
taxes, except to the extent that such taxes
are determined by a court of competent jurisdiction by
a
final
and
nonappealable
judgment
to
have
resulted
from
the
gross
negligence
or
willful
misconduct of
Bank. Any
such indemnification
payment shall
be made
within ten
(10) days
from
the
date
Bank
makes
written
demand
therefor.
“
Taxes
”
means
all
taxes,
fees,
duties,
levies,
imposts, deductions, charges or withholdings of
any kind (other than income
taxes, franchise taxes
and similar taxes
imposed on Bank by any
taxing authority and any
U.S. federal withholding
taxes
imposed under
FATCA).
“
Other Taxes
” means
all present
or future
stamp,
documentary,
excise,
property or similar taxes,
charges or levies that
arise from any
payment made hereunder
or from
the execution,
delivery or
registration
of,
performance under,
or otherwise
with respect
to, this
Agreement or any other Credit Document.
(d)
Automatic
Debit and
Set-Off.
Upon the
occurrence and
during the
continuance
of any
Event
of
Default
with
respect
to
the
Account
Party,
Bank (which
term
shall
include
Bank’s
branches
and
affiliates for
purposes of
this paragraph)
may (but
shall not
be required
to), without
demand for
reimbursement
or payment
or notice
to the
Account Party,
and in
addition to
any other
right of
set-off
that
Bank may
have,
debit any
account
or accounts,
irrespective
of the
currency
of such
account or accounts, maintained by
the Account Party
with any
office of Bank
(now or in
the future)
and set-off and apply (i) any balance or deposits (general, special, time, demand,
provisional, final,
matured or absolute) in the account(s)
and (ii) any sums
due or payable from Bank, to
the payment
of any
and all Obligations
owed by the
Account Party
to Bank, irrespective
of whether Bank
shall
have made any
demand under this
Agreement and although
such Obligations
may be contingent
or
unmatured.
Bank
agrees
promptly
to
notify
the
Account
Party
after
any
such
set-off
and
application; provided,
however,
that the failure to give such
notice shall
not affect
the validity
of
such set-off and application.
(e)
Obligations
Absolute.
The
Account
Party’s
reimbursement
and
payment
obligations
under
this
Section
2
are absolute, unconditional and irrevocable and
shall be performed
strictly in accordance
with the terms of this Agreement under any
and all circumstances whatsoever,
including:
(i)
any
lack
of
validity,
enforceability
or
legal
effect
of
any
Letter
of
Credit
or
any
Credit
Document or any term or provision therein;
(ii)
payment against presentation of any
draft, demand or
claim for payment
under any Letter
of Credit or other
document presented for purposes of drawing under any
Letter of Credit
(individually,
a
“
Drawing
Document
”
and
collectively,
the
“
Drawing
Documents
”)
that
does not
comply in
whole or
in part
with the
terms of
the applicable
Letter of
Credit or
which proves
to be fraudulent,
forged or invalid
in any respect or
any statement
therein
proving to be untrue or inaccurate in any respect,
or which is signed, issued or presented
by a
Person
or a
transferee
of such Person
purporting to be a successor or transferee
of
the beneficiary of such Letter of Credit;
(iii)
Bank or any of its branches or affiliates
being the beneficiary of any Letter
of Credit;
(iv)
Bank or any
correspondent bank honoring
a drawing against
a Drawing Document
up to
the amount
available under
any Letter
of Credit
even if
such Drawing
Document claims
an amount in excess of the amount
available under such Letter of Credit;
16
Confidential
(v)
the existence of any claim, set-off, defense
or other right that Account Party or any other
Person
may have
at any
time against
any beneficiary
or any
assignee of
proceeds, Bank
or any other Person;
(vi)
if any other Person shall at any time have guaranteed or otherwise agreed to be liable for
any of the
Obligations or
granted any
security therefor,
any change
in the time,
manner
or place of payment
of or any other
term of the obligations
of such other Person,
or any
exchange, change, waiver,
release of, or failure
or lapse of perfection of any
grant of any
collateral
for,
or
any
other
Person’s
guarantee
of
or
other
liability
for,
any
of
the
Obligations;
(vii)
any other event,
circumstance or conduct
whatsoever, whether or not
similar to
any of the
foregoing that might,
but for this
Section 2
(e)
,
constitute a legal
or equitable defense to or
discharge of,
or provide a right
of set-off against,
the Obligations,
whether against Bank,
the beneficiary or any other Person;
provided,
however,
that subject to
Section
5(b)
below,
the foregoing shall
not release Bank
from
such liability to the Account Party as
may be determined by a court of competent
jurisdiction by a
final and nonappealable judgment against
Bank following reimbursement
and/or payment
of the
Obligations.
(f)
Computation
of Interest
and Fees;
Maximum
Rate.
All computations
of interest
and fees
to be
made
hereunder
and
under
any
other
Credit
Document
shall
be
made
on
the
basis
of
a
year
consisting of 360 days, for the actual number of days elapsed (including the first day but excluding
the last day) occurring in the period for which such interest
or fee is payable. In no contingency or
event
whatsoever
shall
the
aggregate
of
all
amounts
deemed
interest
under
this
Agreement
charged or collected pursuant to the terms of this Agreement exceed
the highest rate
permissible
under any
applicable law
which a
court of
competent
jurisdiction shall,
in a
final determination,
deem applicable
hereto.
In the
event
that such
a court
determines that
Bank has
charged or
received interest
hereunder in
excess of
the highest applicable
rate, the
rate in
effect hereunder
shall automatically be reduced to
the maximum rate permitted by applicable law and
Bank shall at
its option (i) promptly refund
to the Account
Party any
interest received
by Bank
in excess
of the
maximum lawful rate or (ii)
apply such excess to any outstanding Obligations. It
is the intent hereof
that the Account Party not pay or contract to pay, and that Bank not
receive or contract to receive,
directly or
indirectly in
any manner
whatsoever,
interest
in excess
of that
which may
be paid
by
the Account Party under applicable law.
(g)
Expiry Date of Letters of Credit
. Each Letter of Credit shall expire at or prior to the earlier of
(i) the
close of business on the
date one year after the date of
the issuance of such Letter of Credit
(or,
in
the case of any renewal or extension thereof, one year after such renewal or extension), or (ii) the
Final
Maturity
Date;
provided,
however,
if
the
Account
Party
so
requests
in
any
applicable
Application, Bank agrees to
issue a Letter
of Credit that
provides
for the
automatic
extension
for
successive periods
of one year
or less until
Bank shall have
delivered prior written
notice of non-
extension to
the beneficiary of
such Letter of
Credit (a
“
Notice of
Non-Extension
”) no
later than
60 days
prior to
the stated
maturity
date specified in such Letter of
Credit (such time, the “
Non-
Extension
Notice
Date
”).
The
Account
Party
acknowledges
that
Bank
shall
not
be
required
to
extend any Letter of
Credit if
Bank has
determined that
it would have
no obligation
at such
time
to issue such Letter of Credit (as extended)
under the terms hereof.
17
Confidential
(h)
Permanent
Reduction
of Commitment.
The Account
Party
shall have
the right
at
any
time and
from time to
time, upon at least
three Business Days’
prior irrevocable written
notice to Bank,
to
permanently reduce,
without premium
or penalty,
(i) the
entire Commitment
at any
time or
(ii)
portions of
the Commitment,
from time
to time,
in an
aggregate principal
amount not
less than
$3,000,000 or any
whole multiple of
$1,000,000 in excess thereof.
All Commitment Fees accrued
until the effective date of any termination of the
Commitment shall
be paid on
the effective
date
of such
termination.
[*****]
3.
ACCOUNT PARTY’S
RESPONSIBILITY
.
The Account Party
is responsible for
approving the
final text
of
any
Letter
of Credit
issued
by
Bank
for
its account,
irrespective
of any
assistance
Bank may
provide
such
as
drafting
or
recommending
text
or
by
Bank’s
use
or
refusal
to
use
text
submitted
by
the
Account
Party.
The
Account Party
is solely
responsible for
the suitability
of the
Letter of
Credit for
the Account
Party’s
purposes.
The Account Party will examine the copy of
each Letter of Credit issued for its
account and any other
documents
sent
by Bank
in connection
with
such Letter
of Credit
and
shall promptly
notify
Bank
in
writing
of
any
non-
compliance
with
the
Account
Party’s
Instructions
and
of
any
discrepancy
in
any
document
under
any
presentment or other irregularity. The Account Party understands
that the final form of
any Letter of
Credit may
be subject to such revisions
and changes as are deemed necessary or appropriate
by
Bank in
accordance
with
standard industry practice
and the Account Party hereby
consents to such revisions and changes.
4.
CONDITIONS OF CLOSING AND ISSUANCE.
(a)
Conditions Precedent to Closing.
The obligation of Bank to close this Agreement and to issue
any Letters of Credit on the Closing Date is subject
to the satisfaction of each of the following
conditions:
(i)
Executed
Credit
Documents
.
This
Agreement,
together
with
any
other
applicable
Credit Documents, shall have been
duly authorized, executed
and delivered to Bank
by
the
parties thereto,
shall be
in
full force
and
effect
and
no
Default
or Event
of
Default shall exist hereunder
or thereunder.
(ii)
Closing Certificates; Etc.
Bank shall have received each of the following in form
and
substance reasonably satisfactory
to Bank:
(A)
Officer’s Certificate
. A certificate from a Responsible Officer of the Account
Party to the
effect that (I) all
representations and warranties of the Account
Party contained in
this Agreement and the other
Credit Documents are true, correct and
complete in all
material
respects (except to the extent
any such representation and warranty is
qualified by materiality
or reference to Material Adverse Effect,
in which case such representation and warranty shall
be true,
correct and
complete
in all
respects); and
(II) as
of the
Closing Date,
no Default
or
Event of Default has occurred
and is continuing.
18
Confidential
(B)
Certificate of Secretary of the Account Party
. A certificate of a Responsible
Officer of the Account Party certifying as to the incumbency
and genuineness of the signature
of each officer
of the
Account Party
executing Credit
Documents to
which it
is
a
party
and
certifying that attached
thereto is
a true, correct
and complete copy
of (I) the
memorandum
of
association
(or
equivalent),
as
applicable,
of
the
Account
Party
and
all
amendments
thereto,
certified
as
of
a
recent
date
by
the
appropriate
Governmental
Authority
in
its
jurisdiction of incorporation,
organization
or formation (or
equivalent), as
applicable, (II) the
by-laws or other
governing document of
the Account Party
as in
effect on the Closing Date, (III)
resolutions duly adopted
by the board
of directors
(or other governing
body) of the Account
Party authorizing and approving the transactions contemplated hereunder and the
execution,
delivery and performance
of this Agreement and
the other Credit Documents
to which it is a
party, and (D) each certificate
required to be delivered pursuant
to
Section 4(a)(ii)(C)
.
(C)
Certificates of
Good Standing
. Certificates
as of
a recent
date of
the good
standing of the Account Party under the laws
of its jurisdiction of incorporation, organization
or formation (or equivalent),
as applicable, and, to the
extent requested
by Bank, each other
jurisdiction where the Account Party
is qualified to do business.
(D)
Opinions of
Counsel
. Opinions
of counsel
to the
Account
Party addressed
to Bank with
respect to the
Account Party,
the Credit Documents
and such other
matters
as
Bank
shall
request
(which
such
opinions
shall
expressly
permit
reliance
by
permitted
successors and
assigns of Bank).
The Account
Party requests
that such
counsel deliver
such
opinions.
(iii)
Consents; Defaults
.
(A)
Governmental and Third Party Approvals
. The Account
Party shall have received
all material governmental,
shareholder and third
party consents and
approvals necessary
(or any
other material
consents
as determined
in the
reasonable
discretion of
Bank) in
connection with
the
transactions
contemplated
by
this
Agreement
and
the
other
Credit
Documents
and
all
applicable
waiting
periods
shall
have
expired
without any action being taken
by any Person
that
would reasonably be expected to
restrain,
prevent
or impose
any material
adverse
conditions on
the Account Party
or such other transactions
or that could
seek or threaten
any of the
foregoing,
and
no
law
or
regulation
shall
be
applicable
which
in
the
reasonable
judgment
of
Bank
would
reasonably be expected to have
such effect.
(B)
No
Injunction,
Etc
.
No
action,
proceeding
or
investigation
shall
have
been
instituted,
threatened
in
writing
or
proposed
in
writing
before
any
Governmental
Authority
to
enjoin, restrain,
or prohibit, or
to obtain
substantial damages
in respect of,
or which is
related to
or
arises
out
of
this
Agreement
or
the
other
Credit
Documents
or
the
consummation
of the
transactions contemplated
hereby or thereby,
or which, in
Bank’s
sole
discretion, would
make it
inadvisable to consummate the transactions contemplated
by this Agreement
or the
other Credit
Documents or the consummation of the transactions
contemplated hereby or thereby.
(iv)
[Reserved]
(v)
Miscellaneous
.
(A)
PATRIOT
Act,
etc
.
The
Account
Party
shall
have
provided
to
Bank
the
documentation and other information requested by Bank in order to comply with requirements of
any
Anti-Money
Laundering
Laws,
including
the
PATRIOT
Act
and
any
applicable
“know
your
customer” rules and regulations.
19
Confidential
(B)
Other
Documents
.
All
opinions,
certificates
and
other
instruments
and
all
proceedings
in
connection
with
the
transactions
contemplated
by
this
Agreement
shall
be
satisfactory in form
and substance to
Bank.
Bank shall
have received copies of
all other documents,
certificates
and
instruments
reasonably
requested
thereby,
with
respect
to
the
transactions
contemplated by this Agreement.
(b)
Conditions Precedent
to Issuance
of Letters
of Credit
. The obligation
of Bank
to issue
Letters
of
Credit (including
any Letters
of Credit issued
on the Closing
Date) is
subject to
the satisfaction
of
each of the following conditions:
(i)
Continuation
of
Representations
and
Warranties.
The
representations
and
warranties
contained in
this Agreement and
the other Credit
Documents shall
be true and correct
in
all
material
respects,
except
for
any
representation
and warranty
that
is
qualified
by
materiality
or
reference
to
Material
Adverse
Effect,
which
such
representation
and
warranty shall be true and correct in all respects, on and as of such issuance
with the same
effect as if made on and as of such date (except
for any
such representation and warranty
that by its
terms is made
only as
of an
earlier date, which representation and warranty shall
remain
true
and
correct
in
all
material
respects
as
of
such
earlier
date,
except
for
any
representation
and
warranty
that
is
qualified
by
materiality
or
reference
to
Material
Adverse
Effect,
which
such
representation
and warranty
shall be
true and
correct
in all
respects as
of such
earlier date).
(ii)
No Existing Default
. No Default or Event of Default shall have occurred and be continuing
on the
issuance date
with respect
to such
Letter
of Credit
or after
giving
effect
to
the
issuance of such Letter of Credit on such date.
(iii)
Miscellaneous
. In addition to the foregoing, Bank shall be under
no obligation to issue
any Letter of Credit if:
(A)
any
order,
judgment
or
decree
of
any
Governmental
Authority
or
arbitrator
having
jurisdiction
over
Bank shall
by
its terms
enjoin or
restrain
the issuance
of such
Letter
of
Credit or any law
applicable to Bank,
or any request
or directive (whether or not
having the force
of law) from any
Governmental Authority
with jurisdiction over it shall
prohibit, or request
that it
refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall
impose upon it with respect to such
Letter of Credit any restriction or reserve or capital or liquidity
requirement (for
which Bank
is not otherwise
compensated) not in
effect on the
Closing Date, or
any unreimbursed loss, cost or
expense which was not applicable or in
effect as of the Closing Date
and which Bank in good faith deems material
to it;
(B)
Bank shall have
delivered a Notice of Non-Extension
with respect to such
Letter
of Credit;
(C)
the expiry
date of
such Letter
of Credit
would occur
more than
twelve months
after the date of issuance or last extension
unless Bank has approved such expiry date
in writing;
(D)
the
expiry
date
of
such
Letter
of
Credit
occurs
after
the
Final
Maturity
Date,
unless Bank has approved such expiry date
in writing;
(E)
such
Letter
of
Credit
is
not
substantially
in
form
and
substance
reasonably
acceptable to Bank;
(F)
immediately
after
giving
effect
thereto,
the amount
of Outstanding
Letters
of
Credit would exceed the Commitment
or the Collateral Value
of the Collateral at such time; or
20
Confidential
(G)
any proposed beneficiary of such Letter of Credit
is the subject of a receivership
or similar
proceeding, including
any conservation,
rehabilitation,
or liquidation
proceeding, or
is
otherwise insolvent.
5.
INDEMNIFICATION; LIMITATION
OF
LIABILITY.
(a)
Indemnification.
The Account
Party agrees
to indemnify
and hold
harmless Bank
(including
its
branches
and affiliates),
its
correspondent
banks
and each
of their
respective
directors,
officers,
employees,
attorneys
and agents
(each, including
Bank, an
“
Indemnified
Person
”)
from
and
against
any
and
all
claims,
suits,
judgments,
liabilities,
losses,
fines,
damages,
penalties, interest, costs and expenses (including expert
witness fees
and
reasonable
out-of-
pocket legal
fees, charges
and disbursements
of any
counsel (including
outside counsel
fees
and expenses), and all expenses of
arbitration or litigation and in preparation thereof),
in each
case,
which
are
documented
and may
be incurred
by
or
awarded
against
any
Indemnified
Person (collectively,
the “
Costs
”), and which arise out of or
in connection with or by reason of
this Agreement,
the other Credit
Documents, the
actual or proposed
use of the
proceeds of
the
Letters
of
Credit
or
any
of the
transactions
contemplated
thereby,
including
any
Costs
which arise out of or in connection with, or as a result of:
(i)
any Letter of Credit or amendment
thereto, or any pre
-advice of the issuance of a
Letter of Credit;
(ii)
any transfer,
sale, delivery,
surrender or endorsement
of any Drawing
Document at
any time(s) held by any Indemnified Person
in connection with any Letter
of Credit;
(iii)
any actual or
prospective action or
proceeding arising out
of, or in
connection with,
any Letter
of Credit
or any
Credit Document
(whether administrative,
judicial or
in
connection with arbitration, whether
based on
contract, tort or
any other theory, and
whether brought by a third party or by the Account Party, and regardless of whether
any
Indemnified
Person
is
a
party
thereto),
including
any
action
or
proceeding
to
compel or
restrain
any
presentation
or payment
under any
Letter
of Credit,
or for
the wrongful dishonor of,
or honoring a presentation under,
any Letter of Credit;
(iv)
any independent undertakings issued by
the beneficiary of any Letter of Credit;
(v)
any
unauthorized
Instruction
or
error
in
computer
or
electronic
transmission
in
connection with any Letter of
Credit issued hereunder;
(vi)
an
adviser,
confirmer
or
other
nominated
person
seeking
to
be
reimbursed,
indemnified
or
compensated
in
connection
with
any
Letter
of
Credit
issued
hereunder;
(vii)
any
third
party
seeking
to
enforce
the
rights
of
the
Account
Party,
beneficiary,
nominated person,
transferee,
assignee of Letter
of Credit proceeds
or holder of an
instrument or document in connection with any
Letter of Credit issued hereunder;
(viii)
the fraud,
forgery
or illegal
action of
parties other
than any
Indemnified Person
in
connection with any Letter of
Credit issued hereunder;
(ix)
Bank’s
performance
of
the
obligations
of
a
confirming
institution
or
entity
that
wrongfully
dishonors
a confirmation
in connection
with any
Letter of
Credit
issued
hereunder; or
21
Confidential
(x)
the acts
or omissions, whether
rightful or wrongful,
of any present or
future
de jure
or
de
facto
Governmental
Authority
or
cause
or
event
beyond
the
control
of
such
Indemnified Person in connection with any
Letter of Credit issued hereunder;
in each case,
including that resulting
from Bank’s
own negligence; provided,
however,
that
such
indemnity shall not be available to any
Person claiming indemnification
under this
Section
5(a)
to
the extent
that such
Costs (A) are
determined by
a court of
competent jurisdiction
by a final
and
nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such
Person,
(B)
are
determined
by
a
court
of
competent
jurisdiction by
a final
and nonappealable
judgment to have resulted
from a claim
by
the
Account
Party
against
an
Indemnified
Person
for
breach in
bad faith
of the
obligations
of such
Indemnified Person
hereunder or
under any
other
Credit Document,
or (C)
result
from any
dispute
solely between
or among
Indemnified
Persons.
The Account Party
hereby agrees to
pay Bank within
fifteen (15) days
after demand from
time to
time all amounts owing under this
Section 5
(a)
. This indemnity provision shall survive termination
of this Agreement and all Letters
of Credit.
(b)
Direct
Damages;
No
Punitive
Damages
. The
liability
of Bank
(or
any
other
Indemnified
Person)
under, in connection with and/or arising
out of
any Credit Document or
any Letter of Credit (or pre-
advice), regardless
of the
form
or legal
grounds
of the
action or
proceeding,
shall be
limited to
direct
damages
suffered
by
the
Account
Party
that
are
determined
by
a
court
of
competent
jurisdiction
by a
final and
nonappealable judgment
to have
been caused directly by
Bank’s
gross
negligence, willful misconduct
or breach in
bad faith in (i)
honoring a presentation under a
Letter of
Credit that on its face does not
at least substantially comply with the terms and conditions
of such
Letter of
Credit, (ii)
failing to
honor a
presentation
under a
Letter of
Credit that
strictly complies
with
the
terms
and
conditions
of
such
Letter
of
Credit
or
(iii)
retaining
Drawing
Documents
presented
under a
Letter
of Credit.
Bank shall
be deemed
to have
acted with
due diligence
and
reasonable
care
if Bank’s
conduct
is in
accordance
with Standard
Letter
of Credit
Practice
or in
accordance
with
any
Credit
Document.
No
Indemnified
Person
shall
be
liable
for
any
damages
arising
from
any
errors,
omissions,
interruptions
or
delays
in
transmission
or
delivery
of
any
message,
advice
or
document
(regardless
of
how
sent
or
transmitted)
in
connection
with
this
Agreement or the other Credit Documents, except
to the extent that any losses,
claims, damages,
liabilities or
expenses result
from the
gross negligence
or willful misconduct
of such
Indemnified
Person
in making
any
such
transmission
as determined
by
a final
nonappealable
judgment
of a
court of competent jurisdiction.
(c)
Waiver
of
Consequential
Damages,
etc
.
Notwithstanding
anything
to
the
contrary
in
this
Agreement or in any other Credit Document, no Indemnified Person shall be
liable in contract, tort
or
otherwise
for
any
punitive,
exemplary,
consequential,
indirect
or
special
damages
or
losses
regardless
of
whether
or
not
such
party
or
Indemnified
Person
shall
have
been
advised
of
the
possibility
thereof
or
the
form
of action
in
which
such
damages
or
losses
may
be
claimed.
The
Account Party shall take
commercially reasonable action to avoid
and mitigate the amount of
any
damages claimed
against Bank
or any
other Indemnified
Person,
including by
enforcing its
rights
in appropriate proceedings diligently
pursued in the underlying transaction.
(d)
No Responsibility or Liability
. Without limiting any other provision of this Agreement or any other
Credit Document, Bank and
each other Indemnified Person
(if applicable) shall not be responsible
to the
Account Party
for,
and/or Bank’s
rights and
remedies against
the
Account
Party
and
the
Obligations shall not be impaired by:
(i)
honor
of
a
presentation
under
any
Letter
of
Credit
that
on
its
face
substantially
complies with the terms and conditions of such Letter of Credit,
even if the Letter of
Credit requires strict compliance by
the beneficiary;
22
Confidential
(ii)
acceptance as
a draft
of any
written or
electronic demand
or request
for payment
under a Letter of Credit, even if nonnegotiable
or not in the form of a draft;
(iii)
the identity or authority of any presenter
or signer of any Drawing Document
or the
form,
accuracy,
genuineness
or
legal
effect
of any
Drawing
Document
(other
than
Bank’s
determination
that
such
Drawing
Document
appears
on
its
face
to
substantially comply with the terms
and conditions of the Letter of Credit);
(iv)
acting
upon
any
Instruction
that
it
in
good
faith
believes
to
have
been
given
by
a
Person authorized to
give such Instructions;
(v)
any errors in interpretation
of technical terms or in translation;
(vi)
any acts,
omissions or
fraud by,
or the solvency
of,
any beneficiary,
any nominated
person or entity or any other Person,
other than an Indemnified Person;
(vii)
any breach of contract
between the beneficiary and
the Account Party or any
of the
parties to the underlying transaction;
(viii)
payment to any paying or negotiating bank (designated or permitted by the terms of
the
applicable
Letter
of
Credit)
claiming
that
it
rightfully
honored
or
is
entitled
to
reimbursement or indemnity
under Standard Letter
of Credit Practice
applicable to it;
(ix)
acting
as
required
or permitted,
or
failing
to
act as
permitted,
in
each
case
under
Standard
Letter
of
Credit
Practice
applicable
to
where
it
has
issued,
confirmed,
advised or negotiated such Letter
of Credit, as the case may be;
(x)
honor
of
a
presentation
after
the
expiration
date
of
any
Letter
of
Credit
notwithstanding
that
a
presentation
was
made
prior
to
such
expiration
date
and
dishonored
by
Bank
if
subsequently
Bank
or
any
court
or
other
finder
of
fact
determines such presentation
should have been honored;
(xi)
dishonor
of
any
presentation
that
does
not
strictly
comply
or
that
is
fraudulent,
forged or otherwise not entitled to honor;
(xii)
honor of a presentation that is
subsequently determined by Bank to have been
made
in violation
of international,
federal, state
or local restrictions
on the transaction
of
business with certain prohibited Persons; or
(xiii)
amending
a
Letter
of
Credit
to
reflect
any
change
of
address
or
other
contact
information of any beneficiary
(e)
Within
15
Business
Days
after
the
Closing
Date,
the
Account
Party
shall
pay
to
the
Bank
or
its
designee all reasonable and
documented costs and expenses incurred by
the Bank as
of the
Closing
Date (including the
reasonable fees and
expenses of counsel)
in connection with
this Agreement,
the other Credit Documents and the transactions
contemplated hereby.
6.
REPRESENTATIONS
AND
WARRANTIES
.
The Account Party hereby represents
and
warrants to Bank (all of which representations
and warranties will be repeated as
of the date of each new
Application submitted by the Account
Party to Bank and as of the date of issuance
of any Letter of Credit
requested in each such Application)
as follows:
23
Confidential
(a)
Organization, etc.
It is duly organized or formed, validly existing
and (to the extent applicable
under the laws of the relevant jurisdiction) in good standing under the laws of the jurisdiction
of its organization or formation,
and is duly qualified or licensed to
do business
(and in
good
standing
as
a
foreign
corporation
or
entity,
if
applicable)
in
all
jurisdictions
in
which
such
qualification or
licensing is
required or
in which the
failure to
so qualify or
to be so
licensed
would have a Material Adverse Effect.
It does not have any Subsidiaries.
(b)
Power
and Authority.
It has
the requisite
power and
authority to
execute
and
deliver
this
Agreement and each other Credit Document to which
it is a party and
to perform and observe
the terms and
conditions stated
herein and therein,
and it has
taken all
necessary corporate
or
other
action
to
authorize
its
execution,
delivery
and
performance
of
each
such
Credit
Document.
(c)
Valid and
Binding Obligation.
This Agreement
constitutes, and
each other Credit
Document
when signed and delivered by it to Bank will constitute,
its legal, valid and binding obligation,
enforceable against it in accordance with its terms, except as enforceability may be limited by
bankruptcy,
insolvency,
reorganization,
moratorium or other
similar laws affecting
creditors’
rights against
it generally,
by general
equitable principles
or by
principles of
good faith
and
fair
dealing,
and assuming
that this
Agreement and
each such
other Credit
Document
have
been validly executed and delivered by
each party thereto other than the Account Party.
(d)
No Violation or Breach.
Its execution, delivery
and performance of each Credit
Document to
which it is a
party and the payment of
all sums payable by it under
each such Credit Document
do not and will not: (i)
violate or contravene its memorandum of association, by-laws or other
organizational
documents;
(ii)
violate
or
contravene
any
order,
writ,
law,
treaty,
rule,
regulation
or
determination
of
any
Governmental
Authority,
in
each
case
applicable
to
or
binding
upon it
or any
of its
property,
the violation or contravention
of which would have
a
Material Adverse Effect;
or (iii) result in the breach of any provision of, or in the imposition of
any
Lien
or
encumbrance
(except
for
Liens
or
encumbrances
created
under
the
Credit
Documents)
under,
or
constitute
a
default
or
event
of
default
under,
any
agreement
or
arrangement
to
which
it
is
a
party
or
by
which
it
or
any
of
its
property
is
bound,
the
contravention
of which agreement or arrangement would
have a Material Adverse Effect.
(e)
Approvals.
No
authorization,
approval
or
consent
of,
or
notice
to
or
filing
with,
any
Governmental
Authority is
required
to be
made by
it in
connection with
the execution
and
delivery
by
it of
any
Credit
Document to
which it
is a
party or
the issuance
by Bank
of any
Letter
of
Credit
for
the
account
of
the
Account
Party
pursuant
to
this
Agreement
and
the
related Application,
except
for those
which have
been duly
obtained,
taken,
given or
made
and
are
in
full
force
and
effect;
and
except
where
failure to obtain
the foregoing could
not
reasonably be expected
to have a
Material Adverse Effect.
(f)
Compliance
with
Laws.
It
is
in
compliance
with
all
applicable
laws
and
regulations,
except
where
the
noncompliance
with
which
would
not
have
a
Material
Adverse
Effect,
and
no
Application, Letter
of Credit or
transaction of
the Account Party
under any Credit
Document
to
which
it
is
a
party
will
contravene
any
laws,
treaties,
rules
or
regulations
of
any
Governmental
Authority,
including
any
foreign
exchange
control
laws
or
regulations,
U.S.
foreign assets
control laws
or regulations
or currency reporting laws and regulations, now or
hereafter
applicable
to it,
except
where the
noncompliance
with
which
would
not
have
a
Material Adverse Effect.
(g)
No Default Under Other
Agreements.
It is not in default
under any agreement,
obligation or
duty to which
it is a
party or by
which it or
any of its
property is
bound, which would
have a
Material Adverse Effect.
24
Confidential
(h)
No
Arbitration
Proceeding
or
Litigation.
There
is
no
pending
or,
to
the
knowledge
of
the
Account Party,
threatened
arbitration
proceeding, litigation
or action
against it
which (i)
is
reasonably
likely
to have
a Material
Adverse
Effect
or (ii)
may affect
the legality,
validity or
enforceability of this Agreement
or the other Credit Documents.
(i)
Anti-Corruption Laws; Anti-Money
Laundering Laws and Sanctions
.
(i)
None of
(i) the
Account Party
or,
to the
knowledge of
the Account
Party,
any of
its
directors,
officers, or
employees, or
(ii) any
agent or representative
of the
Account
Party
that
will
act
in
any
capacity
in
connection
with
this
Agreement,
(A)
is
a
Sanctioned Person or
currently the subject
or target of
any Sanctions, (B) is controlled
by or
is acting
on behalf
of a
Sanctioned Person or
(C) is located, organized or resident
in a country or territory that is,
or whose government is, the subject of Sanctions,
in
a
manner
that
would
result
in
the
violation
of
applicable
Sanctions
by
any
party
hereto.
(ii)
The Account Party has implemented
and maintains in effect
policies and procedures
designed to
ensure compliance
by the
Account
Party and
its directors,
officers and
employees with
all applicable
Anti-Corruption Laws,
Anti-Money Laundering Laws and
Sanctions.
(iii)
The Account Party and, to the knowledge of
the Account Party, each director,
officer,
employee and
agent of
the Account
Party,
is in compliance
with all
applicable Anti-
Corruption Laws, Anti-Money Laundering Laws and Sanctions in all
material respects.
(iv)
No
proceeds
of
any
Letter
of
Credit
have
been
used,
directly
or
indirectly,
by
the
Account Party or, to the knowledge of the
Account Party, any of its directors, officers,
employees and agents in violation of
Section
7
(h)
.
(j)
Filed All Tax Returns
and Paid All Taxes.
It has filed all required tax returns,
and all Taxes,
assessments and other governmental
charges due from it have been
fully paid, except for
Taxes
which are being contested in
good faith or those which the failure to
file or pay would
not have a Material Adverse
Effect. It has established
on its books reserves adequate for
the
payment of all federal, state
and other income tax liabilities, including those
being contested
in good faith.
(k)
Financial
Statements.
The
financial
statements
most
recently
furnished
to
Bank
by
the
Account
Party
fairly
present
in
all
material
respects
the
financial
condition
of
the
Account
Party as at the date
of such financial
statements and for the periods then ended
in accordance
with GAAP (except as disclosed therein
and, in the case of
interim financial statements for any
fiscal quarter, subject to normal year-end adjustments and except that footnote and schedule
disclosure
may
be
abbreviated),
and
there
has
been
no
material
adverse
change
in
the
Account Party’s
business or financial
condition or
results of operations
since the date
of the
Account Party’s
most recent annual financial statements.
(l)
Margin
Stock.
It
is
not
engaged
principally
or
as
one
of
its
activities
in
the
business
of
extending
credit
for
the purpose
of “purchasing”
or “carrying”
any
“margin
stock”
(as each
such term is defined or used, directly or indirectly,
in Regulation U of the Board of
Governors
of the Federal
Reserve System).
No part of the
proceeds of any
Letters of
Credit will be used
for purchasing or carrying margin
stock or for any purpose
which violates, or which would be
inconsistent with, the provisions
of Regulation T,
U or X of such Board of Governors.
25
Confidential
(m)
No Material
Adverse Effect
. There has
been no Material
Adverse Effect
since December
31,
2021, and there exists no event, condition or state of facts that could reasonably be expected
to result in a Material Adverse Effect.
(n)
Investment
Company
. It
is not
an
“investment
company”
or
a company “controlled”
by
an
“investment company” (as each such term is
defined or used in
the Investment Company Act).
(o)
Solvency
.
It is Solvent.
(p)
ERISA.
It
does
not
have
any
direct
obligation
or
direct
liability
in
respect
of
any
Plan
or
Multiemployer
Plan,
and
except
as
would
not
reasonably
be
expected
to
have
a
Material
Adverse Effect,
no ERISA Affiliate
thereof has any
obligation or liability
in respect of any
Plan
or Multiemployer
Plan. With
respect to
its obligations
to each
Plan, it
is in
compliance in
all
material respects
with the
applicable provisions
of ERISA
and the
Code and
the regulations
and published interpretations thereunder and other federal or state laws.
No ERISA Event has
occurred
or
is
reasonably
expected
to
occur
that,
when
taken
together
with
all
other such
ERISA Events
for which liability
is reasonably expected
to occur,
has had or
could reasonably
be expected to result in a Material Adverse
Effect.
7.
AFFIRMATIVE
COVENANTS
.
Until
all
of
the
Obligations
(other
than
contingent
indemnification
obligations not then due) have been paid and satisfied in full in cash, all Letters of Credit have
been terminated
or expired without any pending drawing thereon,
and the Commitment has been
terminated, the Account Party
covenants and agrees to the following:
[*****]
[*****]
(a)
Notice of
Litigation and
Other Matters
.
Promptly (but
in no
event later than
ten (10) days after
any Responsible Officer
of the Account Party
becoming aware thereof),
it shall notify Bank in
writing of:
(i)
the occurrence of any Default
or Event of Default;
(ii)
the
commencement
of
all
proceedings
and
investigations
by
or
before
any
Governmental Authority
and all actions
and proceedings
in any court
or before
any
arbitrator against
or involving
the Account
Party or
any of
its respective
properties,
assets or businesses in each
case that if adversely
determined would
reasonably
be
expected to result in a Material
Adverse Effect;
(iii)
any attachment, judgment, Lien, levy or order exceeding the Threshold Amount
that
has been assessed against the Account Party;
and
(iv)
any announcement by A.M. Best of
any change in the Financial
Strength Rating of the
Account Party.
Each notice
pursuant
to
Section 7
(c)
shall be
accompanied by
a statement
of a
Responsible
Officer of
the Account
Party,
setting
forth
details
of the
occurrence referred
to therein and
stating what action
the Account Party has
taken and proposes to take with
respect thereto and
shall describe with particularity any and all provisions of this Agreement and
any other Credit
Document that have been breached.
(b)
[Reserved.]
26
Confidential
(c)
Payment
of Taxes
and Other
Obligations
.
Except where
the failure
to pay
or perform such
items described in this Section would not reasonably be expected to have
a Material
Adverse
Effect,
it
will
pay
and
perform
all
taxes,
assessments
and other
governmental
charges
that
may
be levied
or assessed
upon it
or any
of its
property;
provided,
that it
may
contest
any
item described in this Section in good faith
so long as adequate reserves are
maintained with
respect thereto in accordance
with GAAP.
(d)
Compliance
with
Laws
and
Approvals
.
It
shall
observe
and
remain
in
compliance
in
all
material
respects
with
all
applicable
laws
and
maintain
in
full
force
and
effect
all
Governmental Approvals,
in each case applicable to the conduct of its business except
where
the failure to
do so
would not reasonably
be expected
to have a
Material Adverse Effect.
(e)
Maintenance of Books and
Records; Inspection
. It shall
(i) maintain adequate books, accounts
and records, in which full, true and correct entries in all material respects shall be made
of all
financial
transactions
in
relation
to
its
business
and
properties,
and
prepare
all
financial
statements
required
under
this
Agreement,
in
each
case
in
accordance
with GAAP
and in
compliance with the requirements of any Governmental
Authority having
jurisdiction over it,
and
(ii)
permit
employees
or
agents
of
Bank,
and
after
the
occurrence
and
during
the
continuance
of an
Event
of Default,
Bank, to
visit and
inspect its
properties and
examine or
audit its
books, records,
working papers
and accounts
and make
copies and
memoranda
of
them, and at
its own cost
and expense (other
than after the
occurrence of an
Event of Default),
and
to
discuss
its
affairs,
finances
and
accounts
with its
officers
and
employees
and,
upon
notice
to
it,
its
independent
public
accountants
(and
by
this
provision
it
authorizes
such
accountants
to discuss
its the
finances and
affairs),
all at
such times
that will
not materially
interrupt
or
interfere
with
the
operation
of
its
business
and
from
time
to
time,
upon
reasonable
notice and during business hours, as may be reasonably requested;
provided that
except
during
the
continuance
of
an
Event
of
Default
Bank
shall
not
exercise
such
rights
described in clause (ii) of this Section more than once per calendar year.
(f)
Use of Proceeds
.
It shall comply with the following:
(i)
The Account
Party
shall use
the Letters
of Credit
to
support
insurance
obligations,
obligations under
reinsurance agreements
and retrocession
agreements and
similar
risk obligations.
(ii)
The
Account
Party
shall
not
request
or
use
any
issued
Letter
of
Credit,
(i)
in
furtherance of
an offer,
payment,
promise to
pay,
or authorization
of the
payment
or giving of money,
or anything else
of value, to
any Person
in violation of
any Anti-
Corruption Laws, (ii) for
the purpose of
funding, financing or
facilitating any activities,
business
or
transaction
of
or
with
any
Sanctioned
Person,
or
in
any
Sanctioned
Country,
except
to
the
extent
permitted
for
a
Person
required
to
comply
with
Sanctions or (iii) in any
manner
that
would
result
in
the
violation
of
any
Sanctions
applicable to any party hereto.
(g)
Accuracy
of
Information.
It
will
ensure
that
any
information,
including
financial
statements or
other documents,
furnished by it
to Bank in
connection with this
Agreement or
any
amendment
or
modification
hereof
or
waiver
hereunder
contains
no
material
misstatement
of
fact
or
omits
to
state
any
material
fact
necessary
to
make
the
statements
therein,
in
the
light
of
the
circumstances
under
which
they
were
made,
not
materially
misleading, and the furnishing of such information shall be deemed to be a representation and
warranty by it on the date thereof
as to the matters specified
in this Section.
27
Confidential
(h)
Compliance with Anti-Corruption Laws; Anti-Money
Laundering Laws and Sanctions
. It shall
maintain in
effect and
enforce
policies and
procedures
designed to
ensure compliance
by it
and its directors, officers, employees
and agents with
all applicable
Anti-Corruption Laws, Anti-
Money Laundering Laws, and Sanctions.
(i)
Further Assurances.
It will
execute and deliver
to Bank
such additional
certificates, instruments
and/or documents and take such additional action as
may be reasonably requested by Bank
to
enable
Bank
to
issue
any
Letter
of
Credit
pursuant
to
this
Agreement
and
the
related
Application, to
protect, exercise
and/or enforce
Bank’s
rights and
interests under
any Credit
Document and/or to give effect
to the terms and provisions of any
Credit Document.
(j)
Maintenance
of
Existence.
It
shall
(i) maintain
its
entity
existence,
and
(ii) maintain
in
full
force
and
effect
all
licenses,
bonds,
franchises,
leases,
trademarks,
qualifications
and
authorizations
to
do
business,
and
all
patents,
contracts
and
other
rights
necessary
or
advisable to the
profitable conduct
of its businesses,
in each case except
where failure
to do
so could not reasonably be expected to have
a Material Adverse Effect.
(k)
Change in Nature of Business.
It shall will not, at
any time from the date hereof until the Final
Expiry Date, make
any material
change in the
nature of its
business as carried
on at the date
hereof that could be reasonably expected
to have a Material Adverse
Effect or enter
into any
new
line
of
business
that
is
not
similar,
corollary,
related,
ancillary,
incidental
or
complementary,
or
a
reasonable
extension,
development
or
expansion
thereof
or
ancillary
thereto the business as carried on as of the date
hereof.
(l)
Payment
of
Liabilities.
It
shall
pay
and
discharge,
in
the
ordinary
course
of
business,
all
obligations
and
liabilities
(including
tax
liabilities
and
other
governmental
charges),
except
where the
same may
be contested
in good
faith by
appropriate
proceedings
and for
which
adequate reserves with
respect thereto have
been established in accordance
with GAAP and
except where the same could not
reasonably be expected to have
a Material Adverse Effect.
8.
FINANCIAL
COVENANTS.
Until
all
of
the
Obligations
(other
than
contingent
indemnification
obligations not then due) have been
paid and satisfied in full
in cash, all Letters of Credit
have been terminated
or
expired,
without
any
pending
drawing
thereon,
and
the
Commitment
terminated,
the
Account
Party
covenants and agrees to the following:
(a)
Minimum Total
Shareholder’s Equity
. The total
shareholder’s equity
of the Account
Party,
determined
in
accordance
with
GAAP,
shall
be
at
all
times
an
amount
not
less [*****]
(b)
Financial Strength Ratings
. The Account Party shall at all times maintain a financial strength
rating by A.M. Best Company and
shall not permit such rating to be lower than
[*****]
9.
NEGATIVE
COVENANTS.
(a)
[Reserved].
10.
EVENTS OF DEFAULT
. Each of the following shall be an “
Event of Default
” under this Agreement:
(a)
Failure
to
Reimburse
Draws.
The
failure
by
the
Account
Party
to
reimburse
or
pay
any
drawing under any Letter
of Credit or accrued interest thereon
on the Due Date
therefor.
(b)
Failure
to Pay
Certain Other
Amounts.
The failure
by the
Account Party
to pay
any fee
or
other amount when
due under or in
connection with any
Credit Document or
any Letter
of
Credit within three (3) Business Days
after the same shall become due and
payable.
28
Confidential
(c)
Breach
of
Representation
and
Warranty.
Any
representation,
warranty,
certification
or
statement
made or furnished
by the Account
Party under
or in connection
with any
Credit
Document or as an inducement to Bank to issue a Letter of Credit shall be false, incorrect
or
misleading
in
any
material
respect
when
made
(except
to
the
extent
any
such
representation,
warranty,
certification or statement
is qualified by
materiality or reference
to
Material
Adverse
Effect,
in
which
case,
such
representation,
warranty,
certification
or
statement shall be true, correct
and complete in all respects).
(d)
[
Reserved.
]
(e)
Failure to Perform
or Observe Covenants.
(i)
The Account Party’s failure to
perform or observe
any term, covenant
or agreement
contained in
Sections
7(c)(i)
,
7(h)
or
8
;
or
(ii)
The Account Party’s failure
to perform or
observe any term,
covenant or agreement
contained in any Credit Document
(other than those referred to
in subsections
(a), (b),
(c), (d) and (e)(i) of this
Section
10
), and with respect to any such failure
or breach that by
its nature can be cured, such failure
or breach shall continue or
remain unremedied for
thirty (30) calendar days after
the earlier of (1) Bank’s
delivery of written notice thereof to the Account
Party,
and (2) the Account Party
having actual knowledge that such failure
or breach has occurred.
(f)
Insolvency Proceedings,
Etc.
The Account
Party institutes
or consents
to the institution
of
any
proceeding
under
any
Bankruptcy
Law;
or
makes
an
assignment
for
the
benefit
of
creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian,
conservator,
liquidator,
rehabilitator or similar officer for it or for all or any material part of
its
property;
or
any
receiver,
trustee,
custodian,
conservator,
liquidator,
rehabilitator
or
similar officer is appointed without the application or
consent of the Account Party, and the
appointment continues undischarged, undismissed or unstayed for sixty (60) calendar days;
or any
proceeding under
any Bankruptcy
Law relating
to the Account
Party or to all or any
material part of
their respective
property is instituted
without the consent
of the
Account
Party, and continues undischarged, undismissed or unstayed
for sixty (60) calendar days; or
an order for relief is entered
in any such proceeding; or the Account Party
becomes unable
or admits in writing its inability or fails generally to
pay its debts as they become due.
(g)
Sale of Assets; Merger; Dissolution.
There shall occur in one or a series of
transactions:
(i)
the sale, assignment or transfer of all or
substantially all of the assets
of the Account Party);
(ii) a merger, amalgamation or consolidation of the Account Party without
the prior written
consent of Bank, except that
the Account Party may merge,
amalgamate or consolidate
with any Person so long as the Account
Party is the surviving entity in
any such transaction;
or (iii) the dissolution of the Account Party.
(h)
Credit Documents
. Any
provision of
any Credit
Document to
which the
Account Party
is a
party shall for any reason cease to
be valid and binding or
enforceable; or the Account Party
shall deny or disaffirm in writing the enforceability of any provision of any Credit Document
to which it is a party.
29
Confidential
(i)
Indebtedness
Cross-Default
.
The
Account
Party
shall
(i)
default
in
the
payment
of
any
Indebtedness
(other
than
the
Obligations
and
other
than
Indebtedness
solely
among
or
between
the
Account
Party
and
its
affiliates)
the
aggregate
principal
amount
(including
undrawn committed
or available
amounts), or
with respect
to any
Hedge Agreement,
the
Hedge Termination Value,
of which is in excess of the Threshold Amount beyond the period
of grace
if any,
provided
in the
instrument
or agreement
under which
such Indebtedness
was
created,
or (ii)
default
in the
observance
or performance
of any
other agreement
or
condition relating to any Indebtedness
(other than the
Obligations and other than
in respect
of Indebtedness solely among or
between the Account Party and its
affiliates) the aggregate
principal amount
(including undrawn
committed or
available amounts),
or with respect
to
any Hedge Agreement, the Hedge Termination
Value, of which is in excess of the Threshold
Amount
or
contained
in
any
instrument
or
agreement
evidencing,
securing
or
relating
thereto
or
any
other
event
shall
occur
or
condition
exist
other
than
in
respect
of
an
instrument,
agreement,
or condition
solely among
or between
the Account
Party
and its
affiliates, the effect of which default or other
event or condition
is to
cause with
the giving
of
notice and/or lapse of
time, if required, any such
Indebtedness to (A) become due, or to be
repurchased,
prepaid,
defeased
or redeemed
(automatically
or otherwise),
or an
offer
to
repurchase,
prepay,
defease or
redeem such
Indebtedness to
be made, prior
to its stated
maturity (any applicable
grace period having expired)
or (B) be cash collateralized
(it being
understood
that
a
pledge
of
cash
collateral
by
the
Account
Party
to
secure
a
Hedge
Agreement as initial or variation margin does not trigger a violation of this clause (B)).
(j)
Judgment
.
One or more judgments, orders or decrees (excluding
those entered
against the
Account
Party
in
any
arbitration
or
litigation
related
to
(re)insurance
coverage
disputes
arising
in
the
ordinary
course
of
business
involving
any
reinsurance
agreement
(treaty
or
facultative), or direct insurance
policy) shall be entered or filed against the Account
Party by
any
court
and
continues
without
having
been
dismissed,
discharged,
vacated
or
stayed
within sixty (60) days
after the entry thereof or is not
otherwise
being
appropriately
contested
in good
faith
and such judgments, orders or decrees are either
(i) for the payment
of money,
individually
or
in
the
aggregate
(not
paid
or
fully
covered
by
insurance
as
to
which
the
relevant
insurance
company
has
acknowledged
coverage),
equal
to
or
in
excess
of
the
Threshold Amount
or (ii)
for injunctive relief and could reasonably
be expected, individually
or in
the aggregate, to
have a Material Adverse Effect.
(k)
Employee
Benefit
Matters
.
Except
as
would
not
reasonably
be
expected
to
result
in
a
Material Adverse
Effect,
any Lien shall be imposed on the assets of the Account Party under
ERISA with respect
to any Plan
or under any
foreign laws
similar to ERISA governing
foreign
pension plans.
(l)
Change in Control.
The occurrence of any Change in Control.
11.
REMEDIES
.
Upon the occurrence and during the continuance of any
Event of Default:
(a)
Bank
may
terminate
the
Commitment
and
declare
all
amounts
owed
to
Bank
under
this
Agreement or any
of the
other Credit Documents
and all
other Obligations, to
be forthwith due
and
payable,
whereupon
the
same
shall
promptly
become
due
and
payable
without
presentment, demand, protest or other
notice of
any kind, all
of which
are expressly waived by
the Account Party,
anything in this Agreement or the other Credit Documents to the contrary
notwithstanding;
provided,
that
upon
the
occurrence
of
an
Event
of
Default
specified
in
Section
10(f)
,
the
Commitment
shall
be
automatically
terminated
and
all
Obligations
shall
automatically
become
due
and
payable
without
presentment,
demand,
protest
or
other
notice of
any kind,
all of
which are
expressly
waived by
the Account
Party,
anything
in
this
Agreement or in any other Credit Document
to the contrary notwithstanding.
30
Confidential
(b)
Solely with respect
to the occurrence of
an Event
of Default under
Sections
10(a)
,
(b)
,
or
(f)
,
Bank
may
terminate
any
or
all
of the
Letters
of Credit
or
give
Notices
of Non-Extension
in
respect thereof, in
each case if permitted in accordance
with their terms.
(c)
Bank may exercise from time to time any of
the rights, powers and remedies available to Bank
under any Credit Document to which
the Account Party is a
party, under any other documents
now or
in the future
evidencing or
securing the
Obligations
or under
applicable
law,
and all
such remedies shall be cumulative and not exclusive.
12.
SUBROGATION
.
Without limiting any rights or remedies of Bank
under applicable law,
if an Event of
Default is continuing regarding
the Account Party’s
obligation to reimburse or pay
any drawing under any
Letter of Credit on the Due Date,
Bank, at its option, shall be subrogated
to the Account Party’s
rights against
any Person who may
be liable to the Account Party on any
obligation underlying any Letter
of Credit.
13.
TERM
OF
AGREEMENT
.
This
Agreement
shall
remain
in
effect
from
the
Closing
Date
through
and
including the date upon which all Obligations
(other than contingent indemnification obligations
not then due)
arising hereunder
or under
any other
Credit Document
shall have
been indefeasibly
and irrevocably
paid and
satisfied in full, all Letters of Credit have been terminated or expired without any pending
drawing thereon, and
the Commitment has been terminated.
No termination of this Agreement shall
affect the rights and obligations
of the
parties hereto
arising prior
to such
termination or
in respect
of any
provision of
this Agreement
which
survives such termination.
14.
USA
PATRIOT
ACT;
ANTI-MONEY
LAUNDERING
LAWS
.
Bank
hereby
notifies
the
Account Party
that
pursuant to
the requirements
of the PATRIOT
Act or any
other Anti-Money Laundering
Laws,
it
is
required
to
obtain, verify
and record
information
that identifies
the Account
Party,
which information
includes the name
and address
of the
Account
Party
and other
information that
will allow
Bank
to identify
the Account
Party
in
accordance with the PATRIOT Act or such Anti-Money Laundering Laws.
15.
GOVERNING LAW; UCP; ISP; STANDARD LETTER OF CREDIT
PRACTICE
. Each Credit Document
and each
Letter of Credit shall be governed by and construed
in accordance with (a) in the case of each Credit Document
(other than the Letters
of Credit), the substantive
laws of New York and (b) in the case of each
Letter of Credit,
such Letter of Credit will be governed
by and construed in accordance with the
governing law (if any) specified
in such Letter
of Credit, which
governing law
may be
specified by Bank
at the Account
Party’s
request or
with
its
approval
(and
which
governing
law
may
include
the
laws
of
a
particular
jurisdiction
and
may
include
specification of
ISP or UCP
as the practice
rules to
govern such Letter
of Credit), and
if any such
practice rules
are
specified
in such
Letter
of Credit
then they
are
incorporated
by
reference
into
this Agreement
and shall
control (to the
extent not prohibited
by applicable law) to
the extent of
any conflict with
the law applicable to
such Letter
of Credit.
Unless the
Account Party
specifies otherwise in
its Application
for a
Letter of Credit, the
Account Party
agrees that Bank
may issue a
Letter of Credit
subject to the ISP or
UCP.
Bank’s
privileges, rights
and remedies under the ISP and UCP, as applicable, shall be in addition to, and
not in limitation of, its privileges,
rights, and remedies expressly
provided for herein. The ISP
or UCP,
as applicable, shall serve, in the absence of
proof to the contrary, as evidence of Standard Letter of Credit Practice with respect to matters covered therein.
To
the extent
permitted
by
applicable law,
as between
the Account
Party
and Bank,
(i) this
Agreement
shall
prevail in case of conflict between this Agreement, the UCC and/or Standard Letter of
Credit Practice, (ii) the
ISP
shall prevail
in case of conflict
between the ISP
and the
UCC or
other Standard
Letter of
Credit Practice
if the
Letter of Credit
is governed by
the ISP,
and (iii) the UCP shall
prevail in case
of a conflict between
the UCP and
the UCC or other Standard Letter of Credit
Practice if the Letter of Credit is
governed by the UCP.
31
Confidential
16.
CONSENT TO JURISDICTION AND
VENUE
. THE ACCOUNT
PARTY HEREBY CONSENTS TO THE EXCLUSIVE
JURISDICTION
OF
ANY
STATE
COURT
WITHIN
NEW
YORK
COUNTY,
NEW
YORK
OR
ANY
FEDERAL
COURT
LOCATED WITHIN
THE SOUTHERN DISTRICT OF THE STATE
OF NEW YORK OR ANY APPELLATE
COURT THEREOF
FOR
ANY
PROCEEDING
INSTITUTED
HEREUNDER
OR
UNDER
ANY
OF
THE
OTHER
CREDIT
DOCUMENTS,
OR
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OF THE OTHER CREDIT DOCUMENTS, OR
ANY PROCEEDING
TO
WHICH
BANK
OR
THE
ACCOUNT
PARTY
IS
A PARTY,
INCLUDING
ANY ACTIONS
BASED
UPON,
ARISING
OUT
OF,
OR
IN
CONNECTION
WITH
ANY
COURSE
OF
CONDUCT,
COURSE
OF
DEALING,
STATEMENT
(WHETHER ORAL OR
WRITTEN) OR ACTIONS OF
BANK OR PROCEEDING
TO WHICH BANK
OR THE
ACCOUNT
PARTY
IS
A
PARTY.
THE
BANK
AND
THE
ACCOUNT
PARTY
IRREVOCABLY
AGREE
TO
BE
BOUND
(SUBJECT TO ANY AVAILABLE
RIGHT OF APPEAL) BY ANY JUDGMENT RENDERED
OR RELIEF GRANTED THEREBY
AND FURTHER
WAIVES
ANY OBJECTION
THAT
IT MAY
HAVE
BASED ON LACK
OF JURISDICTION
OR IMPROPER
VENUE
OR
FORUM
NON
CONVENIENS
TO
THE
CONDUCT
OF
ANY
SUCH
PROCEEDING.
THE
BANK
AND
THE
ACCOUNT
PARTY
IRREVOCABLY
AGREE
THAT
SERVICE
OF
PROCESS
MAY
BE
DULY
EFFECTED
UPON
IT
BY
MAILING A COPY THEREOF,
BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID,
TO IT AT
ITS ADDRESS SET
FORTH
OR
REFERRED
TO
IN
SECTION
19
BELOW.
NOTWITHSTANDING
THE
FOREGOING,
NOTHING
IN
THIS
AGREEMENT
SHALL
AFFECT
THE
RIGHT
OF
ANY
PARTY
TO
SERVE
LEGAL
PROCESS
IN
ANY
OTHER
MANNER
PERMITTED BY LAW
OR THE RIGHT OF BANK
TO BRING ANY ACTION OR PROCEEDING AGAINST
THE ACCOUNT
PARTY OR ITS PROPERTIES
IN THE COURTS OF ANY OTHER JURISDICTION.
17.
WAIVER OF JURY
TRIAL
. TO THE EXTENT
PERMITTED BY APPLICABLE LAW,
THE ACCOUNT PARTY
AND
BANK KNOWINGLY AND VOLUNTARILY
WAIVE ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LITIGATION
BASED ON, ARISING OUT OF, OR RELATING
TO ANY CREDIT DOCUMENT OR LETTER OF CREDIT, OR ANY COURSE
OF CONDUCT,
COURSE OF DEALING,
STATEMENTS
(ORAL OR WRITTEN)
OR ACTIONS OF
THE ACCOUNT PARTY
OR BANK WITH RESPECT THERETO. THIS WAIVER IS A MATERIAL
INDUCEMENT FOR BANK TO ISSUE LETTERS OF
CREDIT.
18.
BANKRUPTCY
AND
FORFEITURE
REINSTATEMENT
.
If
any
consideration
transferred
to
Bank
in
payment of, or as collateral for, or in satisfaction of the Obligations, shall be voided
in whole
or in part as
a result
of (a) a subsequent bankruptcy or insolvency proceeding; (b) any
forfeiture or seizure action or remedy; (c) any
fraudulent transfer
or preference
action or remedy;
or (d) any
other civil, criminal
or equitable
proceeding or
remedy,
then Bank’s
claim to
recover
the voided
consideration
shall be
a new
and independent
claim arising
under the applicable
Credit Document
and shall
be due and
payable immediately
by the Account
Party under
the
terms
of
the
Credit
Documents.
32
Confidential
19.
NOTICES
.
Unless
otherwise
expressly
provided
herein,
all
notices,
Instructions,
approvals,
requests, demands,
consents and other
communications provided
for hereunder (collectively,
“
notices
”) shall
be in writing (including
by facsimile or other electronic transmission approved by Bank). All notices
shall be sent
by
regular
U.S.
mail
or
registered
or
certified
mail
prepaid,
by
facsimile
or
other
electronic
transmission
approved by Bank, by hand
delivery, by
Federal Express
(or other comparable domestic or international delivery
service) prepaid to
the applicable address,
facsimile number or
electronic mail address
set forth on
the signature
page hereof in
the case of
the Account Party.
All notices to
Bank (including notices
by email, if
Bank approves
of
receiving
notices
by
email)
shall
be
directed
to
Bayerische
Landesbank,
New
York
Branch,
560
Lexington
Avenue, 22
nd
Floor, New York,
New York 10022, Attention: Maddalena Scenna & Chris Catucci, email addresses:
MScenna@bayernlbny.com
and
Chris.Catucci@bayernlbny.com
with
a
copy
to
Bayerische
Landesbank,
New
York
Branch, 560
Lexington
Avenue,
22
nd
Floor,
New York,
New York
10022, Attention:
Credit Services,
email
address:
creditcompliance@bayernlbny.com
.
Bank may,
but shall not
be obligated
to, require
authentication
of
any
electronic
transmission.
Notices
sent
by
hand,
Federal
Express
(or
other
comparable
domestic
or
international delivery service) or
registered or certified mail shall
be deemed to
have been given when
received;
notices sent by regular U.S. mail shall be deemed to have been received five (5) days
after deposit into the U.S.
mail; notices sent
by facsimile or other
electronic transmission shall be deemed
to have been given
upon receipt
by sender
of a
transmission confirmation
or read
receipt.
The Account
Party or
Bank may
change its
address
(including email addresses) for
notices by
notifying the
other of
the new
address in
any manner
permitted by this
Section.
The Account Party irrevocably consents that service of process may be made by registered or certified
mail directed to it at the address of its agent for service of process, Conyers Corporate
Services (Bermuda) Ltd.,
Clarendon House, 2 Church Street, Hamilton,
HM 11 Bermuda.
20.
WAIVER AND AMENDMENTS
. No modification, amendment or waiver of, or consent to any
departure
by Bank
or the
Account
Party from,
any
provision
of any
Credit Document
will be
effective
unless made
in a
writing signed
by the
Account
Party (in
the case
of Bank)
or Bank
(in the
case of
the Account
Party and
then
such waiver
or consent shall
be effective
only in the
specific instance
and for the
purpose for which
given. No
party’s
consent
to
any
amendment,
waiver
or
modification
shall
mean
that
such
party
will
consent
or
has
consented to
any other or
subsequent request
to amend, modify
or waive a
term of any Credit Document.
No
delay by
any party
in
exercising any of
its rights
or remedies
shall operate as
a waiver, nor shall
any single
or partial
waiver of any right
or remedy preclude
any other further exercise of that right or remedy,
or the exercise of any
other right or remedy.
21.
SUCCESSORS AND ASSIGNS
. Each Credit Document
to which the
Account Party is a
party will be
binding
on the
Account
Party’s
successors
and permitted
assigns, as
applicable,
and shall
inure to
the benefit
of the
respective
successors
and
permitted
assigns
of
the
Account
Party
and
Bank.
Except
as
provided
in
the
last
sentence of this
Section
21
,
Bank may assign
its rights and
obligations under
each Credit Document,
including
its rights to reimbursement regarding any Letter of Credit, in whole or in part, with the
Account Party’s consent;
provided that the Account Party shall be deemed
to have consented to any such assignment unless it objects by
written notice to Bank within ten (10)
Business Days after having received notice thereof; and,
provided further,
that the Account Party’s consent to an assignment to any Person shall not be required if (i) the assignment
is to
an affiliate
of Bank
or (ii)
an
Event
of Default
has
occurred
and is
continuing.
Bank may
sell to
one or
more
Persons participations
in or to all or a
portion of its rights
and obligations under the Credit Documents without
the Account
Party’s consent.
Any assignment in
violation of this
Section
21
shall be void. The
Account Party shall
not assign or transfer any of its interests, rights or remedies related to any Credit Document, in
whole or in
part,
without the prior written consent
of Bank. Any
Person to
whom Bank delegates
its obligation
to issue a
Letter
of
Credit
must
be
a
bank,
or
a
branch
or
affiliate,
that
is
on
the
List
of
Qualified
U.S.
Financial
Institutions
maintained by the Securities Valuation
Office of the National Association of Insurance Commissioners.
33
Confidential
20.
SEVERABILITY
. Whenever
possible, each
provision of
each Credit
Document shall
be interpreted
in a
manner as to be
effective and
valid under applicable
law,
but if any provision
of any Credit
Document shall
be
prohibited
by
or
invalid
under
applicable
law,
such
provision
shall
be
ineffective
only
to
the
extent
of
such
prohibition
or invalidity
without invalidating
the remainder
of such
provision
or any
remaining
provisions
of
such Credit Document.
21.
ENTIRE
AGREEMENT.
This
Agreement,
together
with
the
other
Credit
Documents
and
any
other
agreement,
document
or instrument
referred
to herein,
constitute
the final,
exclusive
and entire
agreement
and
understanding
of,
and
supersede
all
prior
or
contemporaneous,
oral
or
written,
agreements,
understandings,
representations
and negotiations
between,
the parties
relating
to the
subject
matter
of the
Credit Documents, provided that this Agreement
shall not supersede any reimbursement
agreement (however
titled) that has
been entered into
specifically with respect
to any
“direct pay”
standby letter
of credit or other
similar
standby
letter
of
credit
where
the
terms
of
such
reimbursement
agreement
have
been
drafted
to
specifically address
the particular
attributes
of,
or the
particular circumstances
of the
underlying transaction
supported by,
such standby letter of credit.
22.
SURVIVAL
.
All
covenants,
agreements,
representations
and
warranties
made by
the
Account
Party
herein and in the other
Credit Documents and in
the certificates or other
instruments
delivered in connection
with or pursuant to
this Agreement or any
other Credit Documents shall be
considered to have been relied upon
by the other parties hereto
and shall survive the execution
and delivery of this Agreement
and the issuance of
any
Letters
of
Credit,
regardless
of
any
investigation
made
by
any
such
other
party
or
on
its
behalf
and
notwithstanding
that
Bank
may
have
had
notice
or
knowledge
of
any
Event
of
Default
or
incorrect
representation
or warranty
at the
time any
credit is
extended hereunder,
and shall
continue in
full force
and
effect
as long
as the
principal of
or any
accrued interest
on any
fee or
any
other amount
payable
under this
Agreement is
outstanding
and unpaid
or any
Letter of
Credit is
outstanding
and so
long as
the Commitments
have not expired or terminated.
The provisions of Sections 2(b)(v), 2(b)(vi), 2(c) and 5 shall survive and remain
in full force and effect regardless of the consummation of the
transactions contemplated hereby,
the expiration
or
termination
of
the
Letters
of
Credit
and
the
Commitments
or
the
termination
of
this
Agreement
or
any
provision hereof.
23.
INTERPRETATION;
COUNTERPARTS;
ELECTRONIC
EXECUTION
.
In
this
Agreement,
(a)
the
term
“including” means “including without limitation”; (b) the terms “will” and “shall” shall have
the same meaning,
(c) unless the context
requires otherwise, references
herein to Sections
shall be construed to
refer to Sections
of
this
Agreement;
(d)
references
to
any
laws,
rules,
or
regulations
include
any
amendments
thereto
or
successor or replacement
laws, rules, or
regulations; and (e)
references to
actions Bank “may” take
or omit to
take mean “may in its sole discretion”.
24.
COUNTERPARTS;
ELECTRONIC EXECUTION
.
This Agreement
may be
executed by
one or more
of the
parties to this Agreement on any number of separate
counterparts and all of such counterparts taken
together
shall be
deemed to
constitute
one and
the same
instrument.
Delivery of
an executed
signature
page of
this
Agreement by
any electronic
means that
reproduces an
image of
the actual
executed
signature page
shall be
effective as delivery of a manually executed
counterpart hereof.
25.
NO FIDUCIARY DUTY,
ETC.
34
Confidential
(a)
The
Account
Party
acknowledges
and
agrees
that
Bank
will
not
have
any
obligations
except
those
obligations expressly set forth herein and in the
other Credit Documents and Bank
is acting solely
in the capacity
of an arm’s length contractual counterparty to the Account Party
with respect to the Credit Documents and the
transactions contemplated herein and therein and not as a financial advisor or a fiduciary
to, or an agent of, the
Account Party or any other Person.
The Account Party agrees that it
will not assert any
claim against Bank based
on
an
alleged
breach
of
fiduciary
duty
by
Bank
in
connection
with
this
Agreement
and
the
transactions
contemplated hereby.
Additionally,
the Account Party
acknowledges and
agrees that
Bank is not
advising the
Account Party
as to any
legal, tax,
investment, accounting,
regulatory or any
other matters
in any jurisdiction.
The
Account
Party
shall
consult
with
its
own
advisors
concerning
such
matters
and
shall
be
responsible
for
making its own independent investigation and appraisal of
the transactions contemplated herein or in the
other
Credit Documents, and Bank shall have
no responsibility or liability to the Account Party
with respect thereto.
(b)
The
Account
Party
further
acknowledges
and
agrees
that
Bank,
together
with
its
branches
and
affiliates, is a full service securities or banking firm
engaged in securities trading and brokerage activities as well
as
providing
investment
banking
and
other
financial
services.
In
the
ordinary
course
of business,
Bank may
provide investment
banking and
other financial
services to,
and/or acquire,
hold or
sell, for
its own
accounts
and the accounts of
customers, equity, debt and other securities and
financial instruments (including bank loans
and
other
obligations)
of,
the
Account
Party
and
other
companies
with
which
the
Account
Party
may
have
commercial or other relationships.
With respect to any securities and/or financial instruments
so held by Bank
or any
of its
customers,
all rights
in respect
of such
securities and
financial instruments,
including any
voting
rights, will be exercised by
the holder of the rights, in its sole discretion.
(c)
In addition, the
Account Party
acknowledges and
agrees that
Bank and its
affiliates may
be providing
debt
financing,
equity
capital
or
other
services
(including
financial
advisory
services)
to
other
companies
in
respect of which
the Account Party
may have
conflicting interests
regarding the
transactions described
herein
and otherwise.
Bank will
not use
confidential
information
obtained
from the
Account Party
by virtue
of the
transactions
contemplated
by
the
Credit
Documents
or
its
other
relationships
with
the
Account
Party
in
connection with the
performance by
Bank of services
for other companies,
and Bank will
not furnish any
such
information
to other
companies.
The Account
Party also
acknowledges that
Bank has
no obligation
to use
in
connection with
the transactions
contemplated
by the
Credit Documents,
or to
furnish to
the Account
Party,
confidential information obtained
from other companies.
26.
JUDGMENT
CURRENCY
.
The
Account
Party’s
obligation
to
make
payments
in
any
currency
(the
“
Specified
Currency
”)
shall
not
be
discharged
or
satisfied
by
any
tender,
or
any
recovery
pursuant
to
any
judgment or otherwise, which is expressed in or converted into any currency other than the
Specified Currency,
except to the extent that
such tender or recovery results in the actual receipt by Bank of the full amount of the
Specified Currency payable under this Agreement. The Account Party shall indemnify Bank for any shortfall
and
the
Account
Party’s
obligation
to
indemnify
Bank
and
make
payments
in
the
Specified
Currency
shall
be
enforceable as an alternative or additional cause of action to the extent that such actual receipt is less than the
full amount of
the Specified Currency expressed to
be payable hereunder, and shall not be
affected by judgment
being obtained for other sums due hereunder.
27.
ACKNOWLEDGEMENT
AND
CONSENT
TO
BAIL-IN
OF
AFFECTED
FINANCIAL
INSTITUTIONS
.
Notwithstanding anything
to the contrary
in any Credit
Document or in
any other agreement,
arrangement or
understanding
among
any
such
parties,
each
party
hereto
acknowledges
that
any
liability
of
any
Affected
Financial
Institution
arising
under
any
Credit
Document
may
be
subject
to
the
Write-Down
and
Conversion
Powers of the applicable Resolution
Authority and agrees and consents to, and acknowledges
and agrees to be
bound by:
(a)
the
application
of
any
Write-Down
and
Conversion
Powers
by
an
the
applicable
Resolution
Authority to any such
liabilities arising hereunder
which may be
payable to it by
any party hereto that
is an Affected
Financial Institution; and
35
Confidential
(b)
the effects of any Bail-In Action
on any such liability,
including, if applicable:
(i)
a reduction in full or in part or cancellation of any
such liability;
(ii)
a
conversion
of all,
or
a
portion
of,
such
liability
into
shares
or
other
instruments
of
ownership
in
such
Affected
Financial
Institution,
its
parent
entity,
or
a
bridge
institution
that
may
be
issued to it or otherwise
conferred on
it, and that such shares
or other instruments
of ownership will be
accepted by
it in
lieu of
any rights
with respect
to any
such liability
under this
Agreement
or any
other
Credit Document; or
(iii)
the variation of the terms of such liability in connection
with the exercise of the Write-
Down
and Conversion Powers
of the applicable Resolution Authority.
[SIGNATURE PAGE
FOLLOWS]
36
Confidential
IN WITNESS WHEREOF,
the parties hereto have duly executed
and delivered this Standby Letter
of
Credit as of the date first set forth
above.
ACCOUNT PARTY
:
EVEREST REINSURANCE
(BERMUDA), LTD.
By:__________________________
Name:
Title:
Address for Notices:
Seon Place, 4
th
floor 141
Front Street
Hamilton HM19 Bermuda
BANK
:
BAYERISCHE LANDESBANK,
NEW YORK BRANCH
By: _________________________________
Name:
Christopher Catucci
Title:
Senior
Director,
Head
of
Financial
Institutions,
North
America
By: _________________________________
Name:
Sylvia Szawrycka
Title:
Vice President
37
Confidential
[*****]