AmTrust Financial Services
Amtrust Financial Services, Inc. (Form: 8-K, Received: 11/13/2017 07:41:41)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of Earliest Event Reported)
November 8, 2017
   
AmTrust Financial Services, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
 
001-33143
 
04-3106389
(State or other jurisdiction
 
(Commission
 
(IRS Employer
of incorporation)
 
File Number)
 
Identification No.)
 
59 Maiden Lane, 43 rd  Floor, New York, New York
10038
(Address of principal executive offices)
 
(Zip Code)
 
Registrant’s telephone number, including area code
(212) 220-7120

 
 
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below): 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.133-4 (c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)
Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨















 
Item 1.01
Entry into a Material Definitive Agreement.

On November 8, 2017, AmTrust Financial Services, Inc. (as Guarantor), and five of its wholly-owned subsidiaries, AmTrust International Insurance, Ltd. (as Account Party), AmTrust Corporate Capital Limited, AmTrust Corporate Member Limited, AmTrust Corporate Member Two Limited and ANV Corporate Name Limited (as Corporate Members and collectively with the Guarantor and the Account Party, the “Company”) entered into an Amending and Restating Agreement relating to its £515 million credit facility agreement with ING Bank, N.V., London Branch, The Bank of Nova Scotia, London Branch and Bank of Montreal, London Branch. The amended and restated credit facility decreases the maximum amount of the letter of credit facility to £455 million to be used to support the Company’s capacity at Lloyd’s as a member and/or reinsurer of Syndicates 2526, 1206, 44, 1861 and 5820 for the 2018 underwriting year of account, as well as prior open years of account. The reduction in the size of the facility resulted from a restructuring of the facility to exclude solvency deficits as the Company will fund such deficits by alternative means, which, over time, the Company anticipates will reduce costs and enhance investment income.
The amended and restated credit facility contains customary covenants for facilities of this type, including restrictions on indebtedness and liens, limitations on mergers, transactions with affiliates and the sale of assets, and requirements to maintain certain consolidated net worth, statutory surplus, leverage and fixed charge coverage ratios. The amended and restated credit facility also provides for customary events of default, including, without limitation, failure to pay principal, interest or fees when due, failure to comply with certain covenants, any representation or warranty made by the Company being false or misleading in any material respect, default under certain other indebtedness, certain insolvency or receivership events affecting the Company and its subsidiaries, the occurrence of certain material judgments, or a change in control of the Account Party or the Corporate Member. Upon an event of default, the lender may immediately terminate its obligations to issue letters of credit, declare the Company’s obligations under the amended and restated credit facility to become immediately due and payable, and require the Company to deposit collateral with a value equal to 100% of the aggregate face amount of any outstanding letters of credit consisting of cash or other specified collateral including time deposits, certificates of deposit, money market deposits and U.S. government securities subject to varying advance rates.
The ability to have letters of credit issued under this amended and restated facility expires on July 31, 2018 and the maturity date for the facility is July 31, 2022. The facility is 35% secured by a pledge of a collateral account established in the United States pursuant to a pledge and security agreement and in the United Kingdom pursuant to Account Security Deeds dated as of November 26, 2013, November 24, 2015, April 14, 2016 and November 3, 2016. In addition to upon an event of default as discussed above, the collateral account will be required to be 100% funded upon the occurrence of certain specified events, including the A.M. Best financial strength rating of the Account Party falling below A-, the forecast underwriting losses exceeding a certain level of allocated capacity for any year supported by a letter of credit, any net unfunded solvency deficit on any open years of account that is not funded by June 30 or December 31 of the corresponding calendar year, or any non-extension notice is given with respect to any letter of credit.
Fees payable by the Company under the amended and restated credit facility include a letter of credit issuance fee, payable quarterly in arrears, on the secured portion of the letters of credit at the rate of 0.50% and on the unsecured potion of the letters of credit determined based on the Account Party’s then-current financial strength rating issued by A.M. Best. As of November 8, 2017, the applicable letter of credit fee rate on the unsecured portion was 1.15% based on the Account Party’s A.M. Best financial strength rating of “A”. The Company also pays a commitment fee of 0.35% per year on the aggregate unutilized and uncanceled amount of the facility, and a facility fee upon closing of 0.15% of the total aggregate commitment.
The foregoing description of the amended and restated credit facility is qualified by reference to the full text of the amended and restated credit facility, which is attached hereto as Exhibit 10.1.

Item 2.03
Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

The information required by this Item 2.03 is set forth under Item 1.01 above and is hereby incorporated by reference in response to this Item.
 





Item 9.01
Financial Statements and Exhibits.

(d)
Exhibits.

Exhibit No.
 
Description
 
 
 
10.1
 
Amending and Restating Agreement  related to the £455,000,000 Facility Agreement, dated November 8, 2017, among AmTrust Corporate Capital Limited, AmTrust Corporate Member Limited, AmTrust Corporate Member Two Limited, ANV Corporate Name Limited, AmTrust International Insurance, Ltd., AmTrust Financial Services, Inc., ING Bank N.V., London Branch, The Bank of Nova Scotia, London Branch and Bank of Montreal, London Branch.






SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 
 

 
AmTrust Financial Services, Inc.
 
(Registrant)
 

Date
November 10, 2017
 

 
/s/ Stephen Ungar
 
Stephen Ungar
 
Senior Vice President, General Counsel and Secretary
 


Exhibit 10.1
D ATED
8 N OVEMBER  2017
 
 
A M T RUST C ORPORATE C APITAL  L IMITED
A M T RUST  C ORPORATE M EMBER  L IMITED
A M T RUST  C ORPORATE  M EMBER T WO  L IMITED
ANV C ORPORATE  N AME  L IMITED
as Corporate Members
 
 
- and -
 
 
A M T RUST I NTERNATIONAL  I NSURANCE, L TD.
as Account Party
 
 
- and -
 
 
A M T RUST F INANCIAL  S ERVICES, I NC.
as Guarantor
 
 
- and -
 
 
T HE  B ANKS AND F I NANCIAL I NSTITUTIONS L ISTED IN  S CHEDULE  1 OF THE  A MENDED F ACILITY  A GREEMENT
as Original Banks
 
 
- and -
 
 
ING B ANK  N . V ., L ONDON B RANCH,  T HE  B ANK OF N OVA  S COTIA, L ONDON  B RANCH AND   B ANK OF  M ONTREAL,  L ONDON  B RANCH
as Mandated Lead Arrangers
 
 
- and -
 
 
ING B ANK  N . V .,   L ONDON  B RANCH
as Bookrunner, Agent, Issuing Bank and Security Trustee
 


A MENDING AND R ESTATING  A GREEMENT R ELATING TO A  C REDIT  F ACILITY  A GREEMENT


1M1209/001503
Hogan Lovells International LLP
Atlantic House, Holborn Viaduct, London EC1A 2FG





C ONTENTS

C LAUSE
 
P AGE

1.
D EFINITIONS AND  I NTERPRETATION
2

2.
A MENDMENT AND  R ESTATEMENT
3

3.
R EPRESENTATIONS AND  W ARRANTIES
3

4.
C ONTINUITY AND  F URTHER  A SSURANCE
3

5.
R EAFFIRMATION OF S ECURITY
4

6
A MENDMENTS
4

7.
T RANSFERS
4

8.
I NCORPORATION OF  T ERMS
4

9.
G OVERNING L AW
4

S IGNATURES TO  A MENDING AND  R ESTATING  A GREEMENT
6

S CHEDULE  1 C ONDITIONS  P RECEDENT  D OCUMENTS AND  E VIDENCE
11









T HIS A GREEMENT dated 8 November 2017 is made
B ETWEEN :
(1)
A M T RUST C ORPORATE C APITAL L IMITED , a company incorporated in England under registered number 08128684 whose registered office is at 2 Minster Court, Mincing Lane, London EC3R 7BB ( ACCL ”);

(2)
A M T RUST C ORPORATE M EMBER L IMITED a company incorporated in England under registered number 03621278 whose registered office is at 1 Great Tower Street, London EC3R 5AA (“ ACML ”);

(3)
A M T RUST C ORPORATE M EMBER T WO L IMITED , a company incorporated in England under registered number 05264527 whose registered office is at 1 Great Tower Street, London EC3R 5AA (“ ACM2L ”);

(4)
ANV C ORPORATE N AME L IMITED , a company incorporated in England under registered number 06705037 whose registered office is at 4th floor, 1 Minster Court, Mincing Lane, London EC3R 7AA (“ ANV ”);

(5)
A M T RUST I NTERNATIONAL I NSURANCE, L TD. , a company incorporated in Bermuda under registered number 9551 whose registered office is at 7 Reid Street, Suite 400, Hamilton HM11, Bermuda (the “ Account Party ”);

(6)
A M T RUST F INANCIAL S ERVICES, I NC. , a corporation organised under the laws of Delaware whose registered office is at 251 Little Falls Drive, Wilmington, Delaware 19808 (the “ Guarantor ”);
(7)
T HE B ANKS AND F INANCIAL I NSTITUTIONS L ISTED IN S CHEDULE 1 OF THE A MENDED F ACILITY A GREEMENT (the “ Original Banks ”);
(8)
ING B ANK N . V ., L ONDON B RANCH as Bookrunner;
(9)
ING B ANK N . V ., L ONDON B RANCH , T HE B ANK OF N OVA S COTIA, L ONDON B RANCH AND B ANK OF M ONTREAL, L ONDON B RANCH as Mandated Lead Arrangers (the “ Lead Arrangers ”); and
(10)
ING B ANK N . V ., L ONDON B RANCH as Agent;
(11)
ING B ANK N . V ., L ONDON B RANCH as Issuing Bank; and
(12)
IING B ANK N . V ., L ONDON B RANCH as Security Trustee.
W HEREAS
The Banks have agreed to make available to the Account Party, subject as provided in this Agreement, a letter of credit facility of up to £455,000,000 (or equivalent in other eligible currencies):

(a)
to provide Funds at Lloyd's on behalf of ACCL to support its underwriting at Lloyd's as a member of Syndicate 2526 as constituted for the 2014 and all prior open years of account and, through an interavailability arrangement, to provide Funds at Lloyd's on behalf of ACML to support its underwriting at Lloyd's as a member of:

(i)    Syndicate 2526, as constituted for the 2015 and 2016 years of account;

(ii)    Syndicate 1206, as constituted for the 2017, 2016 and all prior open years of account;

(iii)    Syndicate 1861, as constituted for the 2018 and 2017 years of account; and

(iv)    Syndicate 5820 as constituted for the 2017 year of account;

(b)
to provide Funds at Lloyd's on behalf of ANV to support its underwriting at Lloyd's as a member of Syndicate 1861 and Syndicate 5820, each as constituted for the 2016 and all prior open years of account and, through an interavailability arrangement, to provide Funds at Lloyd's on behalf of ACML to support its underwriting at Lloyd's as a member of:

(i)    Syndicate 1861, as constituted for the 2018 and 2017 years of account; and



(ii)    Syndicate 5820 and Syndicate 1206, each as constituted for the 2017 year of account;

(c)    to provide Funds at Lloyd's on behalf of ACML to support its underwriting at Lloyd's as a member of:
(i)    Syndicate 2526 as constituted for the 2015 and 2016 years of account; and
(ii)    Syndicate 1206 as constituted for the 2017 and all prior open years of account;
(iii)    Syndicate 1861 as constituted for the 2017 and 2018 years of account; and
(iv)    Syndicate 5820 as constituted for the 2017 year of account; and
(d)
to provide Funds at Lloyd's on behalf of ACM2L to support its underwriting at Lloyd's as a member of Syndicate 44 as constituted for the 2018 and all prior open years of account.
I T I S A GREED
1.      D EFINITIONS AND I NTERPRETATION

1.1     Definitions

In this Agreement, including the Recitals, the expressions used in this Agreement shall have the meanings given in the Amended Facility Agreement (as defined below) and the following expressions shall have the meanings given below:
Amended Facility Agreement ” means the Facility Agreement as amended by this Agreement, having the terms set out in the Appendix ( Amended Facility Agreement ).
Amendment Documents ” means this Agreement, the Amended Facility Agreement and any Fee Letter entered into on or about the date hereof.
Deeds of Accession ” means each deed of accession relating to the Facility Agreement dated 13 January 2014 between (1) ACML and the Agent, and (2) ACM2L and the Agent respectively.
Effective Date ” means the date on which the Agent confirms in writing that it has received (or waived its requirement to receive) the documents and evidence described in Schedule 1 ( Conditions Precedent Documents and Evidence ) to this Agreement in form and substance satisfactory to it.
Facility Agreement ” means the letter of credit facility agreement dated 26 November 2013 originally between ACCL, the Account Party, the Guarantor, and ING Bank N.V., London Branch, as acceded to by ACML and ACM2L pursuant to the Deeds of Accession, as amended and restated on 25 November 2014 and as amended on 20 May 2015 and as amended and restated on 24 November 2015 and as amended on 14 April 2016 and as amended and restated on 3 November 2016 and as further amended on 22 December 2016, 1 March 2017 and 3 March 2017.
1.2
The provisions of clauses 1.2 to 1.9 of the Amended Facility Agreement shall apply to this Agreement as if references therein to “this Agreement” were references to this Agreement.

2.      A MENDMENT AND R ESTATEMENT

2.1
With effect on and from the Effective Date, the Facility Agreement shall be amended and restated so that it shall be read and construed for all purposes as set out in the Appendix ( Amended Facility Agreement ).

2.2
From the Effective Date, any reference in any Finance Document to the Facility Agreement shall be read and construed for all purposes as a reference to the Amended Facility Agreement.

3.      R EPRESENTATIONS AND W ARRANTIES

3.1
Subject to Clause 3.2, each Obligor represents and warrants that each of the representations and warranties set out in clauses 13.2 to 13.33 of the Amended Facility Agreement, construed as if references therein to “this



Agreement” were references to this Agreement, is true and correct in all material respects (or, to the extent any such representation or warranty is qualified as to “material”, “Material Adverse Change” or similar wording, in all respects) as at the date of this Agreement and at the Effective Date.

3.2
Each Obligor gives each representation and warranty under Clause 3.1 in respect of itself only, and only to the extent that the terms of the relevant clause make the relevant clause applicable in respect of it.

4.      C ONTINUITY AND F URTHER A SSURANCE

4.1     Continuing obligations

(a)
The rights and obligations of the parties under the Facility Agreement and the other Finance Documents shall continue in full force and effect, uninterrupted by the amendment and restatement hereunder, save insofar as they are amended hereby. In addition:
(i)
each Obligor that has granted Security pursuant to the Security Documents confirms that the Security created by the relevant Security Documents shall continue fully to secure the obligations of the relevant Obligors under the Amended Facility Agreement; and
(ii)
the Guarantor confirms that from the Effective Date the Guarantee given by it in clause 12 ( Guarantee and indemnity ) of the Facility Agreement will continue in full force and effect and will extend to all obligations of each other Obligor under the Amended Facility Agreement,
in each case, notwithstanding the increase in the Facility under the Amended Facility Agreement, the extension of its purpose and the amendment of its provisions.
4.2     Prospective effect only

The amendments made hereby to the Facility Agreement shall, with effect from the Effective Date, have prospective effect only.
4.3     Actions already taken

Any action already taken and any payment already made by a party under the Facility Agreement prior to the Effective Date shall be treated as having been taken or made notwithstanding the amendment and restatement hereby, and shall not be required to be taken or made again by reason of the amendment and restatement hereby.
4.4     Conditions precedent

It is acknowledged that the documents and evidence set out in Schedule 2 to the Facility Agreement have been provided and that the documents and evidence set out in Schedule 1 ( Conditions Precedent Documents and Evidence ) to this Agreement are the additional documents and evidence that will be required to be provided for purposes of clause 3.4(a)(i) of the Amended Facility Agreement.
4.5     Further assurance

Each of the parties shall do all acts and things necessary or desirable to give effect to the amendments effected or to be effected pursuant hereto.
5.     R EAFFIRMATION OF S ECURITY

The Account Party hereby reaffirms the continuing existence and validity of the security interest created under the Security Agreement.

6.      A MENDMENTS

The parties may agree to further amendments to the Amended Facility Agreement in accordance with the terms thereof without being required to amend or terminate this Agreement.



7.      T RANSFERS

Any transfer or assignment made in accordance with the terms of the Amended Facility Agreement shall have the same effect in relation to the rights and obligations of the parties under this Agreement as it has in relation to their rights and obligations under the Amended Facility Agreement.
8.      I NCORPORATION OF T ERMS

The provisions of clauses 1.9 ( Rights of third parties ), 18.5 ( Indemnity against costs ), 33 ( Miscellaneous ), 36 ( Notices ) and 37.2 to 37.7 ( Applicable Law and Jurisdiction ) of the Amended Facility Agreement shall be incorporated into this Agreement as if set out herein and as if references therein to “this Agreement” were references to this Agreement.
9.     G OVERNING L AW

This Agreement and any contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.
AS WITNESS the hands of the duly authorised representatives of the parties hereto the day and year first before written.



S IGNATURES TO A MENDING AND R ESTATING A GREEMENT
ACCL
 
 
 
 
 
SIGNED  for and on behalf of
)
/s/ Janice Hamilton     Signature
AMTRUST CORPORATE
)
Janice Hamilton         PRINT NAME
CAPITAL LIMITED
 
Director             Job title
 
 
 
 
 
 
ACML
 
 
SIGNED  for and on behalf of
)
/s/ Janice Hamilton     Signature
AMTRUST CORPORATE
)
Janice Hamilton         PRINT NAME
MEMBER LIMITED
 
Director             Job title
 
 
 
 
 
 
 
 
ACM2L
 
 
SIGNED  for and on behalf of
)
/s/ Janice Hamilton     Signature
AMTRUST CORPORATE
)
Janice Hamilton         PRINT NAME
MEMBER TWO LIMITED
 
Director             Job title
 
 
 
 
 
 
 
 
 
 
ANV
 
 
 
 
SIGNED  for and on behalf of
)
/s/ Janice Hamilton     Signature
ANV CORPORATE
 
)
Janice Hamilton         PRINT NAME
NAME LIMITED
 
 
Director             Job title
 
 
 
 
 
 
 
 
 
 
A CCOUNT  P ARTY
 
 
 
SIGNED  for and on behalf of
)
/s/ Chris Souter       Signature
AMTRUST INTERNATIONAL
)
Chris Souter          PRINT NAME
INSURANCE, LTD.
 
Director, CFO, Asst. Secretary     Job title
 
 
 
 
 
 
 
 
 
 
G UARANTOR
 
 
 
SIGNED  for and on behalf of
)
/s/ Evan Greenstein   Signature
AMTRUST FINANCIAL SERVICES, INC.
)
Evan Greenstein         PRINT NAME
 
 
 
SVP, Treasurer             Job title




ORIGINAL BANKS
 
 
SIGNED  for and on behalf of
)
/s/ Mike Sharman      Signature
ING BANK N.V., LONDON BRANCH
)
Mike Sharman           PRINT NAME
 
 
Managing Director    Job title
 
 
 
 
 
/s/ Nick Merchant      Signature
 
 
Nick Merchant           PRINT NAME
 
 
Director                     Job title
 
 
 
 
 
 
SIGNED  for and on behalf of
)
/s/ Ralph Booth         Signature
THE BANK OF NOVA SCOTIA, LONDON
)
Ralph Booth            PRINT NAME
BRANCH
 
Managing Director     Job title
 
 
 
 
 
/s/ Travis J. Chernichen    Signature
 
 
Travis J. Chernichen        PRINT NAME
 
 
Director                     Job title
 
 
 
 
 
 
SIGNED  for and on behalf of
)
/s/ Tom Woolgar          Signature
BANK OF MONTREAL, LONDON
)
Tom Woolgar               PRINT NAME
BRANCH
 
Managing Director    Job title
 
 
 
 
 
/s/ Scott Matthews    Signature
 
 
Scott Matthews         PRINT NAME
 
 
CFO                         Job title
 
 
 
 
 
 
MANDATED LEAD ARRANGERS
 
 
SIGNED  for and on behalf of
)
/s/ Mike Sharman      Signature
ING BANK N.V., LONDON BRANCH
)
Mike Sharman           PRINT NAME
 
 
Managing Director    Job title
 
 
 
 
 
/s/ Nick Merchant      Signature
 
 
Nick Merchant           PRINT NAME
 
 
Director                     Job title
 
 
 
 
 
 
SIGNED  for and on behalf of
)
/s/ Ralph Booth         Signature
THE BANK OF NOVA SCOTIA, LONDON
)
Ralph Booth            PRINT NAME
BRANCH
 
Managing Director     Job title
 
 
 
 
 
/s/ Travis J. Chernichen    Signature
 
 
Travis J. Chernichen        PRINT NAME
 
 
Director                     Job title
 
 
 



 
 
 
SIGNED  for and on behalf of
)
/s/ Tom Woolgar          Signature
BANK OF MONTREAL, LONDON
)
Tom Woolgar               PRINT NAME
BRANCH
 
Managing Director    Job title
 
 
 
 
 
/s/ Scott Matthews    Signature
 
 
Scott Matthews         PRINT NAME
 
 
CFO                         Job title
 
 
 
 
 
 
BOOKRUNNER
 
 
SIGNED  for and on behalf of
)
/s/ Mike Sharman      Signature
ING BANK N.V., LONDON BRANCH
)
Mike Sharman           PRINT NAME
 
 
Managing Director    Job title
 
 
 
 
 
/s/ Nick Merchant      Signature
 
 
Nick Merchant           PRINT NAME
 
 
Director                     Job title
 
 
 
 
 
 
AGENT
 
 
SIGNED  for and on behalf of
)
/s/ Mike Sharman      Signature
ING BANK N.V., LONDON BRANCH
)
Mike Sharman           PRINT NAME
 
 
Managing Director    Job title
 
 
 
 
 
/s/ Nick Merchant      Signature
 
 
Nick Merchant           PRINT NAME
 
 
Director                     Job title
 
 
 
 
 
 
ISSUING BANK
 
 
SIGNED  for and on behalf of
)
/s/ Mike Sharman      Signature
ING BANK N.V., LONDON BRANCH
)
Mike Sharman           PRINT NAME
 
 
Managing Director    Job title
 
 
 
 
 
/s/ Nick Merchant      Signature
 
 
Nick Merchant           PRINT NAME
 
 
Director                     Job title
 
 
 
 
 
 
SECURITY TRUSTEE
 
 
SIGNED  for and on behalf of
)
/s/ Mike Sharman      Signature
ING BANK N.V., LONDON BRANCH
)
Mike Sharman           PRINT NAME
 
 
Managing Director    Job title
 
 
 
 
 
/s/ Nick Merchant      Signature
 
 
Nick Merchant           PRINT NAME
 
 
Director                     Job title





S CHEDULE 1
C ONDITIONS P RECEDENT D OCUMENTS AND E VIDENCE
The documents and evidence referred to in the definition of “Effective Date” are as follows:
1.     Obligors

1.1
A copy of the constitutional documents of each Obligor or confirmation from an authorised officer of each Obligor that its constitutional documents a copy of which was previously provided to the Agent on a specified date remain in full force and effect and have not been amended since that date.

1.2    A copy of a resolution of the board of directors of each Obligor:

(a)
approving the terms of, and the transactions contemplated by, the Amendment Documents to which it is a Party and resolving that such Obligor execute the Amendment Documents to which it is a Party;

(b)
authorising a specified person or persons to execute the Amendment Documents to which such Obligor is a Party on its behalf; and

(c)
authorising a specified person or persons, on such Obligor’s behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by such Obligor under or in connection with the Amendment Documents to which it is a Party.

1.3
A specimen of the signature of each person authorised by the resolution referred to in paragraph 1.2 above or confirmation from an authorised officer of each Obligor that the specimen signatures previously provided to the Agent on or about a specified date remain in full force and effect and have not been amended since that date.

1.4
A list of the directors and the secretary of each Obligor, signed by the secretary or a director of such Obligor or confirmation from an authorised officer of each Obligor that the list of the directors and company secretary previously provided to the Agent on a specified date remains in full force and effect and has not been amended since that date.

1.5
A certificate of each Obligor (signed by a director or other duly authorised officer) confirming that entering into the Amendment Documents and performing its obligations under the Finance Documents would not cause any borrowing, guaranteeing or similar limit binding on such Obligor to be exceeded.

1.6
A certificate of an authorised signatory of each Obligor certifying that each copy document relating to it specified in this paragraph 1 of Schedule 1 is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

1.7
Where any Amendment Document is executed under a power of attorney, the original or a certified copy of such power of attorney.

1.8
For each Obligor organised in or qualified to do business in a jurisdiction of the United States, copies of good standing certificates from the applicable Governmental Authority for each such Obligor’s jurisdiction of incorporation, organization or formation and in each jurisdiction in which it is qualified as a foreign corporation or other entity to do business, each dated a recent date prior to the date hereof.

1.9
Confirmation from each Obligor that, since 31 December 2016, there has been no event, development or circumstance that has resulted in, or could reasonably be expected to result in, a Material Adverse Change except for Disclosed Matters.

1.10
A copy of such other document, authorisation, opinion or assurance which the Agent considers to be necessary (if it has notified the Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document.




2.     Legal Opinions

2.1
A legal opinion of Hogan Lovells International LLP, legal advisers to the Agent in England, in form and substance satisfactory to the Agent.

2.2
A legal opinion of Locke Lord LLP, legal advisers to the Guarantor in Delaware and New York, in form and substance satisfactory to the Agent.

2.3
A legal opinion of K&L Gates LLP, legal advisers to the Guarantor in Delaware, in form and substance satisfactory to the Agent.
    
2.4
A legal opinion of Conyers Dill & Pearman Limited, legal advisers to the Agent in Bermuda, in form and substance satisfactory to the Agent.

3.    Other

3.1
Certified copies of the audited financial statements of each Obligor for the financial year ending 31 December 2016.

3.2
Certified copies of the unaudited combined financial statements of the Guarantor for the period ending 30 June 2017.

3.3
Evidence that the fees, costs and expenses then due from the Obligors pursuant to clauses 18.1 and 18.3 of the Amended Facility Agreement have been paid.

3.4
Confirmation that each Obligor has obtained all appropriate insurance or reinsurance regulatory authorisations.

3.5
This Agreement, each other Amendment Document and all documents, instruments, notices and acknowledgements required thereunder or pursuant thereto duly executed in a form satisfactory to the Agent by the relevant Obligors.

3.6
Such certificates and documents as any Bank may require to comply with the money laundering prevention and “know your customer” procedures then applicable to it.
    
3.7
A Managing Agent's Undertaking duly executed by AmTrust Syndicates Limited in respect of each Syndicate.

3.8
Letters of Comfort from Lloyd's in respect of each of ACML and ACM2L acknowledging the intention that the Letters of Credit issued in respect of that Corporate Member under the Amended Facility Amendment are to be drawn only once all other Funds at Lloyd's of that Corporate Member have been exhausted.

3.9
A statement provided by the Custodian in relation to the value of the Eligible Collateral in the Secured Accounts.

3.10
Evidence of all Funds at Lloyd's supporting each Corporate Member as at the Effective Date.

3.11
Confirmation that the Account Party has a Financial Strength Rating of at least A- on the Effective Date.




A PPENDIX
A MENDED AND R ESTATED F ACILITY A GREEMENT

  C ONTENTS
 
 
 
C LAUSE
P AGE

 
 
 
1

D EFINITIONS   AND  I NTERPRETATION
2

 
 
 
2

T HE  F ACILITY  - G ENERAL  P ROVISIONS
36

 
 
 
3

T HE  F ACILITY  - S PECIFIC  P ROVISIONS
38

 
 
 
4

C ONDITIONS  A PPLICABLE   TO  L ETTERS   OF  C REDIT
45

 
 
 
5

R EIMBURSEMENT   AND   INDEMNITIES
47

 
 
 
6

P AYMENTS
49

 
 
 
7

N O  S ET -O FF , C OUNTERCLAIM   OR  T AX  D EDUCTION
50

 
 
 
8

A CCOUNTS   OF   THE  B ANK
60

 
 
 
9

A PPLICATION   OF  M ONEYS
61

 
 
 
10

D EPOSIT A CCOUNTS
61

 
 
 
11

C OLLATERAL
62

 
 
 
12

G UARANTEE   AND   INDEMNITY
64

 
 
 
13

R EPRESENTATIONS   AND  W ARRANTIES
67

 
 
 
14

U NDERTAKINGS
75

 
 
 
15

F INANCIAL   COVENANT
93

 
 
 
16

E VENTS   OF  D EFAULT
96

 
 
 
17

S ECURITY   OVER  B ANKS RIGHTS
101

 
 
 
18

F EES , E XPENSES   AND  I NDEMNITIES
101

 
 
 
19

M ITIGATION   BY   THE  B ANKS
105

 
 
 
20

I NCREASED  C OST
105

 
 
 



21

I LLEGALITY
107

 
 
 
22

T HE  A GENT,   THE  L EAD  A RRANGERS AND THE REFERENCE BANKS
108

 
 
 
23

T HE  S ECURITY  T RUSTEE
114

 
 
 
24

R ETIREMENT   OF   A  S ERVICE  B ANK
116

 
 
 
25

L IMITS   OF   THE  S ERVICE  B ANKS ’ O BLIGATIONS
117

 
 
 
26

C ONDUCT   OF  B USINESS   BY   THE  B ANKS
119

 
 
 
27

S HARING   OF  P AYMENTS
120

 
 
 
28

A SSIGNMENTS   AND  T RANSFERS
121

 
 
 
29

D ISCLOSURE   OF   INFORMATION
124

 
 
 
30

S ET -O FF
127

 
 
 
31

C ONFIDENTIALITY O F R EFERENCE B ANK Q UOTATIONS
127

 
 
 
32

USA P ATRIOT  A CT
128

 
 
 
33

M ISCELLANEOUS
128

 
 
 
34

O BLIGATIONS   AND  L IABILITIES
129

 
 
 
35

F URTHER  A SSURANCE
129

 
 
 
36

N OTICES
130

 
 
 
37

A PPLICABLE  L AW   AND  J URISDICTION
133

 
S CHEDULE  1 :
B ANKS   AND  C OMMITMENTS
135

 
 
 
S CHEDULE  2 :
C ONDITIONS  P RECEDENT  D OCUMENTS   AND  E VIDENCE
136

 
 
 
S CHEDULE  3 :
F ORM   OF  T RANSFER  C ERTIFICATE
138

 
 
 
S CHEDULE  4 :
F ORM   OF  L ETTER   OF  C REDIT
142

 
 
 
S CHEDULE  5 :
F ORM   OF  A PPLICATION
147

 
 
 
S CHEDULE  6 :
F ORM   OF  C ANCELLATION  N OTICE   OF  I SSUED  L ETTER   OF  C REDIT
148

 
 
 
S CHEDULE  7 :
F ORM   OF  R EDUCTION  N OTICE   FOR  I SSUED  L ETTER   OF  C REDIT
149




 
 
 
S CHEDULE  8 :
F ORM   OF  I NCREASE  N OTICE   FOR  I SSUED  L ETTER   OF  C REDIT
150

 
 
 
S CHEDULE  9 :
F ORM   OF  E XTENSION  N OTICE   FOR  I SSUED  L ETTER   OF  C REDIT
151

 
 
 
S CHEDULE  10 :
F ORM   OF  C OMPLIANCE  C ERTIFICATE
152

 
 
 
S CHEDULE  11 :
E LIGIBLE  C OLLATERAL
155

 
 
 
S CHEDULE  12 :
F ORM   OF  B ORROWING  B ASE  C ERTIFICATE
157

 
 
 
S CHEDULE  13 :
P ERMITTED  T AX  I NCENTIVE  F INANCING  T RANSACTIONS
158

 
 
 
S CHEDULE  14 :
E XISTING  I NDEBTEDNESS
159

 
 
 
S CHEDULE  15 :
E XISTING  S ECURITY
164

 
 
 
S CHEDULE  16 :
E XISTING  I NVESTMENTS
165




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T HIS A GREEMENT originally dated 26 November 2013, as amended and restated on 25 November 2014, 20 May 2015, 24 November 2015, 14 April 2016 and 3 November 2016 and as further amended on 22 December 2016, 1 March 2017 and 3 March 2017 and as further amended and restated with effect from the Effective Date by the Amending and Restating Agreement is made:
B ETWEEN :
 
(1)
A M T RUST C ORPORATE C APITAL L IMITED, a company incorporated in England under registered number 08128684 whose registered office is at 2 Minster Court, Mincing Lane, London EC3R 7BB (“ ACCL ”);

(2)
A M T RUST C ORPORATE M EMBER L IMITED, a company incorporated in England under registered number 03621278 whose registered office is at 1 Great Tower Street, London EC3R 5AA (“ ACML ”);

(3)
A M T RUST C ORPORATE M EMBER T WO L IMITED, a company incorporated in England under registered number 05264527 whose registered office is at 1 Great Tower Street, London EC3R 5AA (“ ACM2L ”);

(4)
ANV C ORPORATE N AME L IMITED , a company incorporated in England under registered number 06705037 whose registered office is at 4th floor, 1 Minster Court, Mincing Lane, London EC3R 7AA (“ ANV ”);

(5)
A M T RUST I NTERNATIONAL I NSURANCE , L TD . , a company incorporated in Bermuda under registered number 9551 whose registered office is at 7 Reid Street, Suite 400, Hamilton HM11, Bermuda (the “ Account Party ”);

(6)
A M T RUST F INANCIAL S ERVICES , I NC . , a corporation organised under the laws of Delaware whose registered office is at 251 Little Falls Drive, Wilmington, Delaware 19808 (the “ Guarantor ”);

(7)
T HE B ANKS AND F INANCIAL I NSTITUTIONS L ISTED I N S CHEDULE 1 (the “ Original Banks ”);

(8)
ING B ANK N.V., L ONDON B RANCH as Bookrunner;

(9)
ING B ANK N.V., L ONDON B RANCH, THE B ANK OF N OVA S COTIA, L ONDON B RANCH AND B ANK OF M ONTREAL, L ONDON B RANCH as Mandated Lead Arrangers (the “ Lead Arrangers ”);

(10)
ING B ANK N.V., L ONDON B RANCH as Agent;

(11)
ING B ANK N.V., L ONDON B RANCH as Issuing Bank; and

(12)
ING B ANK N.V., L ONDON B RANCH as Security Trustee.
W HEREAS

The Banks have agreed to make available to the Account Party, subject as provided in this Agreement, a letter of credit facility of up to £455,000,000 (or equivalent in other eligible currencies):
(a)
to provide Funds at Lloyd's on behalf of ACCL to support its underwriting at Lloyd's as a member of Syndicate 2526 as constituted for the 2014 and the prior open year of account and, through an interavailability arrangement, to provide Funds at Lloyd's on behalf of ACML to support its underwriting at Lloyd's as a member of:
    
(i)    Syndicate 2526, as constituted for the 2015 and 2016 years of account;

(ii)    Syndicate 1206, as constituted for the 2017, 2016 and all prior open years of account

(iii)    Syndicate 1861, as constituted for the 2018 and 2017 years of account; and




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(iv)    Syndicate 5820 as constituted for the 2017 year of account;

(b)
to provide Funds at Lloyd's on behalf of ANV to support its underwriting at Lloyd's as a member of Syndicate 1861 and Syndicate 5820, each as constituted for the 2016 and all prior open years of account and through an interavailability arrangement, to provide Funds at Lloyd's on behalf of ACML to support its underwriting at Lloyd's as a member of:

(i)    Syndicate 1861, as constituted for the 2018 and 2017 years of account; and

(ii)
Syndicate 5820 and Syndicate 1206, each as constituted for the 2017 year of account;

(c)
to provide Funds at Lloyd's on behalf of ACML to support its underwriting at Lloyd's as a member of:
(i)    Syndicate 2526 as constituted for the 2015 and 2016 years of account; and

(ii)    Syndicate 1206 as constituted for the 2017 and all prior open years of account;

(iii)    Syndicate 1861 as constituted for the 2017 and 2018 years of account; and

(iv)    Syndicate 5820 as constituted for the 2017 year of account; and

(d)
to provide Funds at Lloyd's on behalf of ACM2L to support its underwriting at Lloyd's as a member of Syndicate 44 as constituted for the 2018 and all prior open years of account.
I T I S A GREED
1.     D EFINITIONS AND I NTERPRETATION
 

1.1       Definitions
In this Agreement, including the recital and the Schedules, the following expressions shall have the following meanings:
Acceptable Custodian ” means a financial institution which:
 
(a)
has a long-term credit rating issued by S&P of A or better, or an equivalent rating issued by Moody’s or AM Best;

(b)
carries on business as a custodian in New York;

(c)
has all necessary licences and permissions to permit it to do so in accordance with all applicable laws; and

(d)
is acceptable to the Agent, acting reasonably;

Account Bank” means, in respect of a Deposit Account, the Bank on whose books that Deposit Account is held.

Account Control Agreement ” means an agreement dated 25 November 2013 among the Account Party, the Custodian and the Security Trustee under which the Account Party and the Custodian give certain undertakings in favour of the Security Trustee in respect of certain cash and assets to be held from time to time in the Secured Account.
Account Security Deeds ” means the ING Account Security Deeds.
Acquisition ” means the acquisition by the Guarantor of ANV Holdings B.V. and its Affiliates on or around 4 November 2016 in accordance with the Share Purchase Agreement.



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Advance Rate ” means, in respect of any cash or assets meeting a description set out in Schedule 11 ( Eligible Collateral ), the percentage set opposite that description in that Schedule.
Affiliate ” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
Agent ” means ING Bank N.V., London Branch, a bank incorporated in The Netherlands and acting through its office at 8-10 Moorgate, London EC2R 6DA in its capacity as agent for the other Finance Parties.
Aggregate Commitment ” means the aggregate of the Commitments of all the Banks, which on the date hereof shall be £455,000,000, or the Sterling Equivalent Amount thereof determined at the date of each utilisation.
AM Best ” means A.M. Best Company, Inc. or any successor to its rating business.
Amending and Restating Agreement ” means the agreement dated on or around 8 November 2017 between the parties to this Agreement pursuant to which the terms of this Agreement were amended and restated.
Applicable Collateral Percentage ” means:
 
(a)
where a Full Collateralisation Event has not occurred, or where a Full Collateralisation Event has occurred but the applicable Full Collateralisation Date has not yet occurred, 35 per cent or such higher percentage as the Account Party shall have specified to the Agent in writing from time to time, which percentage shall take effect from the first day of the month following the date such percentage is notified to the Agent in writing; and

(b)
following the occurrence of a Full Collateralisation Event, and with effect from the applicable Full Collateralisation Date, 100 per cent.
Applicable Insurance Regulatory Authority ” means, when used with respect to any Regulated Insurance Company:
 
(a)
the insurance department or similar Governmental Authority located in the state or jurisdiction (domestic or foreign) in which such Regulated Insurance Company is domiciled; or

(b)
to the extent asserting regulatory jurisdiction over such Regulated Insurance Company, the insurance department, authority or agency in each state or jurisdiction (domestic or foreign) in which such Regulated Insurance Company is licensed, and shall include any federal or national insurance regulatory department, authority or agency that may be created and that asserts insurance regulatory jurisdiction over such Regulated Insurance Company.

Application ” means an application for the issuance of a Letter of Credit by the Issuing Bank to be made by the Account Party on behalf of a Corporate Member substantially in the form set out in Schedule 5 ( Form of Application ) or in such other form as the Banks may agree.
Application Date ” means the date on which an Application is received by the Agent.
Authorisation ” means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.
Authority ” means any of the United Nations, the European Union, Her Majesty's Treasury, any European Union member state, Canada (including Global Affairs Canada) or the United States government.
Available Facility ” means, at any time, the Aggregate Commitment minus the Sterling Equivalent Amount of the aggregate face amount of the Letters of Credit outstanding or the subject of a pending Application minus any amount due and payable to the Banks under Clause 5.1 ( Reimbursement ).
Bank ” means:
 
(a)
any Original Bank, unless it has transferred the whole of its rights and obligations hereunder to another bank or financial institution by way of Transfer Certificate in accordance with this Agreement; and

(b)
a bank or financial institution to which any rights and obligations hereunder have been transferred by way of Transfer Certificate in accordance with this Agreement, unless such bank or financial institution has transferred the whole of those rights and obligations to another bank or financial institution by way of Transfer Certificate in accordance with this Agreement;



- 5 -

and, in the case of any indemnity or obligation expressed to be given to or undertaken in favour of the Banks, includes the Agent, the Issuing Bank and the Security Trustee.
Banking Day ” means a day (excluding Saturdays and Sundays) on which dealings in deposits in Sterling may be carried out in the London interbank market and in New York City, and on which banks and foreign exchange markets are open for business in London and (in the case of payment) the place to which such payment is required to be made.
Basel III ” means:
 
(a)
the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

(b)
the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement – Rules text” published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

(c)
any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”.

“BMO” means Bank of Montreal, London Branch, a bank incorporated in Canada and acting through its office at 95 Queen Victoria Street, London EC4V 4HG.

Board of Directors ” means, with respect to any Person, (i) in the case of any corporation, the board of directors of such Person, (ii) in the case of any limited liability company, the board of managers of such Person, (iii) in the case of any partnership, the Board of Directors of the general partner of such Person and (iv) in any other case, the functional equivalent of the foregoing.
Borrowing Base Certificate ” means a certificate substantially in the form set out in Schedule 12 ( Form of Borrowing Base Certificate ) setting out, among other things, details of the Collateral provided in accordance with Clause 11 ( Collateral ).
Business Day ” means a day (other than a Saturday or Sunday) on which banks are open for general business in London.
Capital Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP (excluding all obligations under operating leases required by the Financial Accounting Standards Board to be classified or accounted for as capital leases), and the amount of such obligations shall be the capitalised amount thereof determined in accordance with GAAP.
Catastrophe Bond ” means any note, bond or other instrument of Indebtedness or any Swap Contract or other similar agreement which has a catastrophe, weather or other risk feature linked to payments thereunder.
Code ” means the U.S. Internal Revenue Code of 1986, as amended.
Collateral ” means (a) cash and assets held in the Secured Account which, pursuant to the Security Agreement, are fully secured by way of a first priority, perfected, security interest in favour of the Security Trustee, which security interest has been made the subject of a UCC-1 Financing Statement, and which are held subject to the Account Control Agreement and (b) cash held in the Deposit Accounts which, pursuant to the Account Security Deeds, are fully secured by way of a first ranking fixed charge in favour of the Security Trustee.
Collateral Value ” means, with respect to:
 
(a)
any Eligible Collateral held in the Secured Account, the Sterling Equivalent Amount of the mark-to-market value thereof multiplied by the applicable Advance Rate, and with respect to any Collateral other than Eligible Collateral, zero, provided that if any of the assets in the Secured Account is at any time allocated to the long-term insurance fund of the Account Party, the Collateral Value of all assets in the Secured Account shall be zero; and



- 6 -


(b)
any cash held in the Deposit Accounts, the value of that cash.
Coming Into Line Date ” means, in relation to any year of account, the last date prescribed by the Council of Lloyd’s (taking into account any extension which may be permitted to the prescribed date) by which each Corporate Member must have provided its Funds at Lloyd’s if it is to be eligible to underwrite or to continue to underwrite insurance business at Lloyd’s for such year of account.
Commitment ” means:
 
(a)
in relation to an Original Bank, the amount set opposite its name under the heading “Commitment” in Schedule 1 ( Banks and Commitments ) and the amount of any other Commitment transferred to it under this Agreement (or the Sterling Equivalent Amount thereof determined at the date of each utilisation); and

(b)
in relation to any other Bank, the amount of any Commitment transferred to it under this Agreement (or the Sterling Equivalent Amount thereof determined at the date of each utilisation);
to the extent not reduced, cancelled, terminated or transferred in accordance with the provisions of this Agreement.
Commitment Period ” means the period commencing on the date of this Agreement and ending on the earlier of (a) 31 July 2018; and (b) the date on which the Commitments of the Banks are cancelled in accordance with any applicable provision of this Agreement.
Compliance Certificate ” means a certificate substantially in the form set out in Schedule 10 ( Form of Compliance Certificate ) setting out, among other things, a calculation of the financial covenant in Clause 14 ( Financial Covenant ).
Confidential Information ” means all information relating to the Obligors, the Group, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:
 
(a)
any Obligor or member of the Group or any of its advisers; or

(b)
another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any Obligor or member of the Group or any of its advisers;
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes:
(i)     information that:
 
(1)
is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 29 ( Disclosure of information ); or

(2)
is identified in writing at the time of delivery as non-confidential by any Obligor or member of the Group or any of its advisers; or

(3)
is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, which, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and

(ii)    any Reference Bank Quotation.
Consolidated Fixed Charge Coverage Ratio ” means, at any date of determination, with respect to the Guarantor and its Subsidiaries on a consolidated basis, the ratio of:
 
(a)
the sum of:
(i)
the maximum cash dividends available to the Guarantor from its Regulated Insurance Companies on such date (without prior approval from any Applicable Insurance Regulatory Authority); plus



- 7 -


(ii)
an amount equal to the Service and Fee EBITDA of the Guarantor and its Subsidiaries for the Test Period then ended; to
(b)
the sum of:
(i)
the aggregate amount of all scheduled principal payments on all Indebtedness of the Guarantor and its Subsidiaries for the next succeeding four fiscal quarters of the Guarantor (other than any balloon, bullet or similar payment which repays such Indebtedness in full); plus

(ii)
the Consolidated Interest Expense (excluding Consolidated Interest Expense attributable to Permitted Non-Recourse Secured Debt) for the Test Period then ended; plus

(iii)
all Consolidated Shareholder Distributions made during the Test Period then ended.
“Consolidated Interest Expense” means, for any period, the total consolidated interest expense of the Guarantor and its Subsidiaries for such period determined on a consolidated basis, for statement of income purposes, in accordance with GAAP.
Consolidated Leverage Ratio ” means, at any date of determination, the ratio of:
 
(a)
Consolidated Total Debt (excluding the aggregate principal amount of the Junior Subordinated Debentures and Permitted Qualifying Subordinated Indebtedness, provided that the amount so excluded shall not exceed 15% of the Consolidated Net Worth (calculated as of the most recently ended fiscal quarter by reference to the Guarantor’s financial statements most recently delivered pursuant to Clause 14.4(c)(i) (Audited Financial Statements));

(b)
Consolidated Total Capitalisation.
Consolidated Net Income ” means, for any period, for the Guarantor and its Subsidiaries on a consolidated basis, the net income of the Guarantor and its Subsidiaries for such period as such amount would be shown on the consolidated financial statements of the Guarantor for such period prepared in accordance with GAAP.
Consolidated Net Worth ” means, as of any date of determination, the Net Worth of the Guarantor and its Subsidiaries determined on a consolidated basis in accordance with GAAP after appropriate deduction for any minority interests in Subsidiaries; provided that the aggregate outstanding amount of trust preferred securities of the Guarantor and its Subsidiaries shall only be included in Consolidated Net Worth to the extent such amount would be included in a determination of the consolidated net worth of the Guarantor and its Subsidiaries under the applicable procedures and guidelines of GAAP as of the date hereof. In addition to the foregoing, the aggregate amount excluded pursuant to clause (a) of the definition of Consolidated Leverage Ratio shall be deemed to be stockholders’’ equity for purposes of the calculation of Consolidated Net Worth.
Consolidated Shareholder Distributions ” means all payments, dividends or distributions made by the Guarantor to any holder of the Equity Interest of the Guarantor .
Consolidated Total Assets ” means, as of the date of any determination thereof, total assets of the Guarantor and its Subsidiaries calculated in accordance with GAAP on a consolidated basis as of such date.
Consolidated Total Capitalisation ” means, as of any date of determination, the sum of:
 
(a)
the principal amount of all outstanding Consolidated Total Debt; and

(b)
Consolidated Net Worth
at such time.
Consolidated Total Debt ” means, at any date of determination, all Indebtedness of the Guarantor and its Subsidiaries on a consolidated basis, plus, without duplication, all Indebtedness of the Guarantor in respect of the Junior Subordinated Debentures, less the sum of the following:
 
(a)
the Maiden Debt;

(b)
the aggregate principal amount outstanding in respect of the Guarantor’s obligations to repurchase securities pursuant to Repurchase Agreements;



- 8 -


(c)
the aggregate amount of the Repurchase Liability; and

(d)
the aggregate amount of Guarantees (other than the Excess Amount) otherwise included in such Indebtedness.
Notwithstanding the foregoing, Indebtedness in respect of letters of credit (other than the Excess Amount) shall not be included in the determination of Consolidated Total Debt to the extent that any such letter of credit is undrawn as of the date of determination. As used herein, " Excess Amount " means, at any time, the amount by which the Indebtedness incurred pursuant to Clause 14.2(s)(xxxi) exceeds $250,000,000, to the extent that such Indebtedness is incurred by any Subsidiary as an account party in respect of letters of credit (and Guarantees thereof by the Guarantor).
In addition, but without duplication of the foregoing, Consolidated Total Debt shall include Permitted Non-Recourse Secured Debt to the extent the obligations in respect thereof are, or should be, reflected as a liability on the consolidated balance sheet of the Guarantor and its Subsidiaries in accordance with GAAP.
Contractual Obligation ” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
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, and the terms “ Controlling ” and “ Controlled ” shall be construed accordingly.
Corporate Member ” means ACCL, ACML, ACM2L and ANV.
CRD IV “ means:

(a)
Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms; and

(b)
Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC;

or any law, rules or guidance by which either of them is implemented.
CTA ” means the Corporation Tax Act 2009.
Custodian ” means The Bank of New York Mellon NA or another financial institution which replaces it in its capacity as custodian hereunder with the consent of the Security Trustee, being an Acceptable Custodian at the time of such replacement.

Customary Recourse Exceptions ” means, with respect to any Permitted Non-Recourse Secured Debt, exclusions from the exculpation provisions with respect to such Permitted Non-Recourse Secured Debt for fraud, misapplication of funds, waste, environmental indemnities, prohibited transfers, failure to pay taxes, non-compliance with “separateness” covenants, voluntary bankruptcy, collusive involuntary bankruptcy and other exceptions to non-recourse liability that are either customarily excluded by institutional lenders from exculpation provisions and/or included in separate indemnification agreements in non-recourse financings of real estate or approved by JPMorgan Chase Bank, N.A.

Debtor Relief Laws ” means the Bankruptcy Code of the United States, 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, any state thereof or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
Default Rate ” means the annual rate of interest determined by the Agent to be equal to the aggregate of 3% and LIBOR for periods of such duration as the Agent may, after consultation with the Banks, determine from time to time.

Designated Parties List ” means the Specially Designated Nationals List, the Sectoral Sanctions Identifications List and the Foreign Sanctions Evaders List maintained by the Office of Foreign Assets Control of



- 9 -

the United States Department of the Treasury, or any similar list of sanctioned persons or entities maintained by any Authority.
Deposit Accounts ” means the ING Deposit Accounts and “Deposit Account” means any one of them.
Derivative ” means any transaction (including an agreement with respect thereto) that is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option, derivative transaction or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures.
Derivative Obligations ” means obligations under or with respect to any Derivative.
Disclosed Matters ” means any matters disclosed in any Form 10-K, Form 10-Q or Form 8-K filed by the Guarantor with the SEC or any press release required to be issued by the Guarantor pursuant to any Law during the period from and including 1 January 2012 to and including the Effective Date.
Disclosed Tax Matters ” means any matters relating to Taxes set forth or accounted for in the “Federal Income Taxes” or “Income Taxes” notes, as applicable, to the Guarantor’s consolidated financial statements in any Form 10-Q or 10-K filed by the Guarantor with the SEC during the period from and including 1 January 2010 to and including the Effective Date.
Disqualified Stock ” means any Equity Interest in any 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:
 
(a)
matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, in each case other than solely for capital stock in such Person that does not constitute Disqualified Stock and cash in lieu of fractional shares of such capital stock and at any time on or prior to the first anniversary of the last day of the Commitment Period; or

(b)
is convertible into or exchangeable (unless at the sole option of the issuer thereof) for (i) debt securities or (ii) any Equity Interest referred to in paragraph (a) above (other than solely for capital stock in such Person that do not constitute Disqualified Stock and cash in lieu of fractional shares of such capital stock), in each case at any time prior to the first anniversary of the last day of the Commitment Period;

provided, however, that capital stock in any Person that would not constitute Disqualified Stock but for terms thereof giving holders thereof the right to require such Person to redeem or purchase such capital stock upon the occurrence of a disposition or a change of control shall not constitute Disqualified Stock if any such requirement becomes operative only after repayment in full of all obligations in respect of the Letters of Credit and all other obligations that are accrued and payable.
Disruption Event ” means either or both of:
 
(a)
a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the transactions contemplated by the Finance Documents, which disruption is not caused by, and is beyond the control of, any of the Parties; or

(b)
the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:

(i)
from performing its payment obligations under the Finance Documents; or

(ii)
from communicating with other Parties in accordance with the terms of the Finance Documents,
and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.
Dollars ” or “ $ ” means the lawful currency from time to time of the United States.



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Dollar Cash Collateral ” means Collateral that is deposited in any of the Deposit Accounts and which is denominated in Dollars.
Dollar Exposure ” means, in relation to any Bank, the aggregate exposure of that Bank under the Letters of Credit that are denominated in Dollars.
Domestic Subsidiary ” means any Subsidiary of the Guarantor other than a Foreign Subsidiary.
ECA ” means the Economic Capital Assessment required under the Lloyd's Rules to be calculated by each Syndicate by reference to the SCR of that Syndicate.
Effective Date ” means the date on which the Agent confirms that it has received (or waived its requirement to receive) the documents and evidence described in Schedule 1 ( Conditions Precedent Documents and Evidence ) of the Amending and Restating Agreement in form and substance satisfactory to it.
Eligible Collateral ” means cash or assets meeting a description set out in Schedule 11 ( Eligible Collateral ).
Eligible Currency ” means Sterling, Euros, Dollars and any other currency agreed by all of the Banks.
Eligible Investments ” means (a) Permitted Investments, (b) investments in debt and/or equity securities, (c) investments in loan portfolios, (d) investments in derivatives and other financial instruments and (e) Repurchase Agreements.
Environmental Laws ” means all federal, state, local, municipal and foreign Laws (including common law), treaties, regulations, rules, ordinances, codes, decrees, judgments, injunctions, permits, directives, orders (including consent orders), and legally binding requirements of any Governmental Authority, in each case concerning the protection of the environment, natural resources and human health and safety as it relates to any Hazardous Materials, or the presence, Release of, or exposure to, Hazardous Materials, or the generation, manufacture, processing, distribution, use, treatment, storage, transport, recycling, disposal or handling of, or the arrangement for such activities with respect to, Hazardous Materials, in each case not relating to or arising out of the insurance or reinsurance activities of the Group.

Environmental Liability ” means all liabilities, obligations, damages, losses, claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and costs (including administrative oversight costs, natural resource damages and remediation costs), whether contingent or otherwise, arising out of (a) actual or alleged noncompliance with any Environmental Law, (b) the generation, manufacture, processing, distribution, use, treatment, storage, transport, recycling, disposal or handling of, or the arrangement for such activities with respect to, any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which a liability or obligation is assumed or imposed with respect to any of the foregoing, provided that Liabilities of the type described above arising out of the obligation of any Regulated Insurance Company with respect to its insurance operations shall not constitute “Environmental Liabilities” hereunder.
Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity interest in any Person, and any option, warrant or other right entitling the holder to purchase or otherwise acquire any of the foregoing.
ERISA ” means the U.S. Employee Retirement Income Security Act of 1974, as amended from time to time.
ERISA Affiliate ” means the Account Party and any trade or business (whether or not incorporated) that, together with the Guarantor, is treated as a single employer under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
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)
any failure by any Plan to satisfy the minimum funding standard (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, whether or not waived;




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(c)
the determination that any Plan is in “at-risk status” (within the meaning of Section 412(c) of the Code and Section 302(d) of ERISA);

(d)
the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan;

(e)
the incurrence by the Guarantor or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan or the withdrawal or partial withdrawal of the Guarantor or any of its ERISA Affiliates from any Plan or Multiemployer Plan;

(f)
the receipt by the Guarantor or any of its ERISA Affiliates from the PBGC or a plan administrator of any notice relating to the intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan;

(g)
the requirement that a Plan provide a security pursuant to Section 436(f)(i) of the Code or the utilisation by a Plan of the provision of a security pursuant to Section 436(f) of the Code;

(h)
the receipt by the Guarantor or any of its ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan from the Guarantor or any of its ERISA Affiliates of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganisation, within the meaning of Title IV of ERISA;

(i)
the Guarantor or any of its Subsidiaries engaging in a “prohibited transaction” with respect to a Plan for which the Guarantor or its Subsidiaries is a “disqualified person” (within the meaning of Section 4975 of the Code) or with respect to which the Guarantor or any such Subsidiary could otherwise be liable;

(j)
any other event or condition with respect to a Plan or Multiemployer Plan that could reasonably be expected to result in liability of the Guarantor or its Subsidiaries under Title IV of ERISA; or

(k)
any Foreign Benefit Event.
Euros ” or “ ” means the lawful currency from time to time of the member states of the European Union that adopt the single currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
Event of Default ” means any of the events listed in Clause 16.1.
Existing Debentures ” means, collectively, the following:
 
(a)
the fixed/floating rate junior subordinated deferrable interest debentures due 2037 of the Guarantor in the original aggregate principal amount of $40,000,000;

(b)
the fixed/floating rate junior subordinated deferrable interest debentures due 2036 of the Guarantor in the original aggregate principal amount of $30,000,000;

(c)
the fixed/floating rate junior subordinated deferrable interest debentures due March 2035 of the Guarantor in the original aggregate principal amount of $25,000,000;

(d)
the fixed/floating rate junior subordinated deferrable interest debentures due June 2035 of the Guarantor in the original aggregate principal amount of $25,000,000;

(e)
the fixed/floating rate junior subordinated deferrable interest debentures due September 2033 of the Guarantor in the aggregate principal amount of $10,000,000;

(f)
the fixed/floating rate junior subordinated deferrable interest debentures due October 2033 of the Guarantor in the aggregate principal amount of $20,000,000;

(g)
the fixed/floating rate junior subordinated deferrable interest debentures due December 2036 of the Guarantor in the aggregate principal amount of $20,000,000;




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(h)
the fixed/floating rate junior subordinated deferrable interest debentures due June 2037 of the Guarantor in the aggregate principal amount of $25,000,000; and

(i)
the fixed/floating rate junior subordinated deferrable interest debentures due September 2037 of the Guarantor in the aggregate principal amount of $15,000,000,
in each case with respect to the foregoing, issued to TOPS Trust pursuant to the applicable Existing Indenture, and as the same may be further amended, amended and restated, supplemented or otherwise modified from time to time.
Existing Indentures ” means the indentures governing the Existing Debentures, as the same may be further amended, amended and restated, supplemented or otherwise modified from time to time.

“Existing Notes” means the Guarantor’s 5.50% Convertible Senior Notes due 2021 issued under the Existing Notes Indenture.

“Existing Notes Indenture” means an Indenture governing the Existing Notes dated December 21, 2011, by and between the Guarantor and The Bank of New York Trust Company, N.A., as supplemented by the first Supplemental Indenture, dated December 21, 2011, by and between the same two parties.

“Existing Structured Securities” means, collectively, (a) each of the Existing Debentures, (b) the common securities issued by the applicable TOPS Trust to the Guarantor in connection with such Existing Debentures, (c) the trust preferred securities issued by the applicable TOPS Trust in connection with such Existing Debentures having substantially similar terms as such Existing Debentures and (d) the Guarantees with respect to the trust preferred securities issued in connection with the Existing Debentures and any other guarantee agreement executed and delivered by the Guarantor with respect to such issued trust preferred securities, all of the foregoing as described in either (x) the Guarantor’s Form 8-K filed by the Guarantor with the SEC on March 22, 2007, or (y) Amendment No. 5 to the Guarantor’s Form S-1 filed by the Guarantor with the SEC on November 8, 2006, as the case may be, and all of the foregoing in clauses (a), (b), (c) and (d) above as may be further amended, amended and restated, supplemented or otherwise modified from time to time.
Facility ” means the letter of credit facility of up to £455,000,000 (or the Sterling Equivalent Amount thereof determined at the date of each utilisation) to be made available by the Banks to the Account Party under this Agreement.
FAL ” means Funds at Lloyd’s supporting underwriting as a member of a Syndicate or the Syndicates for any applicable year of account as required by Lloyd’s pursuant to Lloyd’s Rules;
FATCA ” means:
 
(a)
sections 1471 to 1474 of the Code or any associated regulations or other official guidance;

(b)
any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of paragraph (a) above; or

(c)
any agreement pursuant to the implementation of paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction;
FATCA Application Date ” means:
 
(a)
in relation to a “withholdable payment” described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014; and

(b)
in relation to a “withholdable payment” described in section 1473(1)(A)(ii) of the Code (which relates to “gross proceeds” from the disposition of property of a type that can produce interest from sources within the US), 1 January 2019, or

(c)
in relation to a “passthru payment” described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2019,



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or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement;
FATCA Deduction ” means a deduction or withholding from a payment under a Finance Document required by FATCA;
FATCA Exempt Party ” means a Party that is entitled to receive payments free from any FATCA Deduction;
FATCA FFI ” means a foreign financial institution as defined in section 1471(d)(4) of the Code which, if any Finance Party is not a FATCA Exempt Party, could be required to make a FATCA Deduction;
FATCA Protected Bank ” means any Bank irrevocably designated as a “FATCA Protected Bank” by the Account Party by notice to that Bank and the Agent at least three months prior to the earliest FATCA Application Date for a payment by a Party to that Bank (or to the Agent for the account of that Bank);

“FCA” means the United Kingdom Financial Conduct Authority and any predecessor or successor body or bodies;

Fee Letter ” means a fee letter dated on or about the date hereof under which the Account Party undertakes to pay fees to any Finance Party.

Finance Document ” means this Agreement, the Amending and Restating Agreement, any Security Document, any Deed of Accession, any fee letter entered into between any Finance Party and any Obligor in connection with this Agreement, and any other agreement or document which is from time to time specified as a Finance Document by the Agent and the Account Party.
Finance Party ” means each Bank, the Agent, the Issuing Bank, the Security Trustee and each Lead Arranger.

Financial Officer ” means, with respect to any Person, the chief financial officer, principal accounting officer, treasurer or controller of such Person.

Financial Strength Rating ” means, in relation to any entity, the financial strength rating from time to time ascribed to it by AM Best.

FNC ” means First Nonprofit Companies, an Illinois corporation, and a Subsidiary of the Guarantor, together with all of its Subsidiaries.
Foreign Benefit Event ” means, with respect to any Foreign Pension Plan:
 
(a)
the existence of unfunded liabilities in excess of the amount permitted under any applicable Law or in excess of the amount that would be permitted absent a waiver from a Governmental Authority;

(b)
the failure to make the required contributions or payments, under any applicable Law, on or before the due date for such contributions or payments;

(c)
the receipt of a notice by a Governmental Authority relating to the intention to terminate such Foreign Pension Plan or to appoint a trustee or similar official to administer such Foreign Pension Plan, or alleging the insolvency of such Foreign Pension Plan;

(d)
the incurrence of any liability by the Guarantor or any of its Subsidiaries under applicable Law on account of the complete or partial termination of such Foreign Pension Plan or the complete or partial withdrawal of any participating employer therein; or

(e)
the occurrence of any transaction that is prohibited under any applicable Law and that could reasonably be expected to result in the incurrence of any liability by the Guarantor or any of its Subsidiaries, or the imposition on the Guarantor or any of its Subsidiaries of any fine, excise tax or penalty resulting from any noncompliance with any applicable Law.



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Foreign Pension Plan ” means any benefit plan maintained outside of the U.S. primarily for the benefit of employees working outside the U.S. that under applicable Law is required to be funded through a trust or other funding vehicle other than a trust or funding vehicle maintained exclusively by a Governmental Authority.
Foreign Subsidiary ” means any Subsidiary of the Guarantor which is organised under the laws of any jurisdiction outside of the United States and its territories, possessions and associated commonwealths.
Full Collateralisation Date ” has the meaning given in Clause 11.2 ( Full Collateralisation Date ).
 
Full Collateralisation Event ” has the meaning given in Clause 11.3 ( Full Collateralisation Events ).
Funds at Lloyd’s ” has the meaning given in paragraph 16 of Lloyd’s Membership Byelaw (No. 5 of 2005).
GAAP ” means Generally Accepted Accounting Principles, which means in the case of the Guarantor and the Account Party, US GAAP, and in the case of the Corporate Members, UK GAAP.
GIC ” means a guaranteed investment contract or funding agreement or other similar agreement issued by an Obligor that guarantees to a counterparty a rate of return on the invested capital over the life of such contract or agreement.
Governmental Authority ” means any federal, state, local, municipal or foreign court or governmental agency, authority, instrumentality, regulatory body (including any board of insurance, insurance department or insurance commissioner), court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including, where applicable, any US entity).
Group ” means the Guarantor and its Subsidiaries from time to time, and “ member of the Group ” shall be construed accordingly.
Guarantee ” of or by any Person means any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect:
 
(a)
to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness or other obligation;

(b)
to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment of such Indebtedness or other obligation; or

(c)
to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation;
provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business.
“Handbook” means the PRA Rulebook of Rules and Guidance and/or the FCA Handbook of Rules and Guidance, as applicable (each as amended from time to time);
Hazardous Materials ” means any pollutant, contaminant, waste or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substance, waste or material, including petroleum, its derivatives, by-products and other hydrocarbons, coal ash, radon gas, asbestos, asbestos-containing materials, urea formaldehyde foam insulation, polychlorinated biphenyls, chlorofluorohydrocarbons, and any substance, waste or material regulated under any Environmental Law.
HM Treasury ” means The Lords Commissioners of Her Majesty’s Treasury.
Holding Company ” means, in relation to a person, any other person in respect of which it is a Subsidiary;

Indebtedness ” of any Person means, without duplication:
 
(a)
all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, including, for the avoidance of doubt, promissory notes;



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(b)
all obligations of such Person evidenced by bonds, debentures, notes or similar instruments;

(c)
all obligations of such Person upon which interest charges are customarily paid or accrued;

(d)
all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person;

(e)
all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business on normal trade terms and not overdue by more than 90 days);

(f)
all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, but limited to the fair market value of such property;

(g)
all Capital Lease Obligations and synthetic lease obligations of such Person;

(h)
all obligations, contingent or otherwise, of such Person for the reimbursement of any obligor in respect of letters of credit, letters of guaranty, bankers’ acceptances and similar credit transactions;

(i)
the redemption price of all redeemable preferred stock of such Person (but not accrued dividends on any preferred stock), but only to the extent that such stock is redeemable at the option of the holder or requires sinking fund or similar payments at any time prior to the Maturity Date; and

(j)
all Guarantees (other than Non-Recourse Secured Debt Guarantees) by such Person in respect of Indebtedness or obligations of others of the kinds referred to in Clauses (a) through (i) above.
The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
“ING” means ING Bank N.V., London Branch, a bank incorporated in The Netherlands and acting through its office at 8-10 Moorgate, London EC2R 6DA.
“ING Account Security Deeds” means:
(a)
the account security deeds dated 26 November 2013, 24 November 2015 and 3 November 2016 between the Guarantor and the Security Trustee creating security in favour of the Security Trustee over an account of the Guarantor held on the books of ING Bank N.V., London Branch; and
(b)
the account security deeds dated 14 April 2016 and 3 November 2016 and on or around the Effective Date between the Account Party and the Security Trustee creating security in favour of the Security Trustee over a sterling account and a dollar account of the Account Party held on the books of ING Bank N.V., London Branch.
ING Deposit Accounts” means the accounts on the books of ING Bank N.V., London Branch which are the subject of the ING Account Security Deeds, and includes any additional account opened in accordance with that deed.
Insolvency Event ” means any of the events listed in Clause 16.1(g) ( Insolvency Events) .
Insurance Business ” means one or more aspects of the business of issuing or underwriting insurance or reinsurance and other businesses reasonably related thereto.
Insurance Product ” means any product provided by an insurer or service contract provider in its insurance or warranty business whereby such insurer or service contract provider undertakes to pay or indemnify another as to loss from certain specified contingencies or perils called “risks” or to pay or grant a specified amount or determinable benefit in connection with ascertainable risk contingencies or to act as a surety, including, without limitation, reinsurance agreements, reinsurance treaties, reinsurance pools, property and casualty insurance products, accident and health insurance products, life insurance products, surety bonds, specialty risk



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insurance programs, warranty programs, insurance loss portfolio transfers and any other insurance or reinsurance product related to the acceptance of risk or commitment to pay or indemnify another for specific types of losses.

Interpolated Screen Rate” means, in relation to LIBOR for any relevant period, the rate which results from interpolating on a linear basis between:
 
(a)
the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than that period; and

(b)
the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds that period,
each as at or about 11.00 a.m. two Business Days before the commencement of that period for the offering of deposits in the relevant currency in an amount comparable to the relevant sum (as the case may be) and for a period comparable to that period.
Investment ” means to purchase, hold or acquire (including pursuant to any merger with any Person that was not a Wholly Owned Subsidiary prior to such merger) any Equity Interest, evidences of Indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, guarantee any obligations of, make or permit any capital contribution to, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit or all or a substantial part of the business of, such Person.
Investment Policy ” means the investment policy of the Guarantor as in effect from time to time.
IRS ” means the U.S. Internal Revenue Service.
Issuance Date ” means, in relation to a Letter of Credit, the Banking Day on which a Corporate Member (or the Account Party on its behalf) specifies in the relevant Application that it wishes to arrange for a Letter of Credit to be issued by the Issuing Bank or (as the context requires) the date on which that Letter of Credit is actually issued by the Issuing Bank.
Issuing Bank ” means ING Bank N.V., London Branch, a bank incorporated in The Netherlands and acting through its office at 60 London Wall, London, EC2M 5TQ in its capacity as issuing bank for each Letter of Credit.
ITA ” means the Income Tax Act 2007.
Junior Subordinated Debentures ” means, collectively, the following:
 
(a)
the Existing Debentures; and

(b)
any other subordinated debentures which:

(i)
by their terms (or by the terms of any security into which they are convertible or for which they are exchangeable at the option of the holder thereof), or upon the happening of any event mature or are mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or are redeemable at the sole option of the holder thereof on or after the Maturity Date;

(ii)
are issued pursuant to the Existing Indentures;

(iii)
are issued to a TOPS Trust which issues to investors, simultaneously with the issues of such debentures, trust preferred securities having substantially similar terms as such debentures;

(iv)
mature after, and do not require any scheduled amortization or other scheduled payments of principal prior to, the date that is 367 days after the Maturity Date; and

(v)
are reasonably acceptable to the Agent,
in each case with respect to foregoing in Clause (b) above, as the same may be further amended, amended and restated, supplemented or otherwise modified from time to time.



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Law ” means any law (including common or customary law), statute, constitution, decree, judgment, directive, byelaw, order or any other legislative measure of any government, supranational, local government, statutory or regulatory body or court, all international, foreign, federal, state and local treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licences, authorisations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
Lead Arrangers ” means each of ING Bank N.V., London Branch, The Bank of Nova Scotia, London Branch and Bank of Montreal, London Branch, as joint lead arrangers and their respective successors and assigns;
Lender Confirmation Date ” means the date on which the Agent has received written confirmation from the Guarantor that:
(a)
the “Consolidated Fixed Charge Coverage Ratio” financial covenant set forth in Section 6.14(c) of the Credit Agreement dated 12 September 2014 between, among others, the Guarantor, certain lenders and JP Morgan Chase Bank N.A. (or any successor or replacement) as administrative agent (as such agreement may be amended, varied, restated, supplemented, refinanced or replaced from time to time) has been amended to provide that the Guarantor shall not permit such “Consolidated Fixed Charge Coverage Ratio” as of the end of any fiscal quarter of the Guarantor to be less than 2.0 to 1.0; and
(b)
as a result of the change to the Consolidated Fixed Charge Coverage Ratio contemplated in Clause 15.4, on the date thereof the “Consolidated Fixed Charge Coverage Ratio” referred to in the letter of credit and reimbursement agreement dated as of 29 September 2017 between the Account Party, the Guarantor and BMO Harris Bank N.A. (as such agreement may be amended, varied, supplemented, refinanced or replaced from time to time) will be subject to an identical amendment.
Letter of Comfort ” means a letter of comfort delivered in accordance with Clause 3.7 ( Letter of Comfort );
Letter of Credit ” means any letter of credit issued by the Issuing Bank (on behalf of the Banks) at the request of the Account Party pursuant to this Agreement.
LIBOR ” means, in relation to any relevant period:
 
(a)
the applicable Screen Rate; or

(b)
if no Screen Rate is available for that period, the Interpolated Screen Rate for that period; or

(c)
if no Screen Rate is available for that period and it is not possible to calculate an Interpolated Screen Rate for that period, the Reference Bank Rate,
at or about 11.00 a.m. two Business Days before the commencement of that period for the offering of deposits in the relevant currency in an amount comparable to the relevant sum (as the case may be) and for a period comparable to that period and, if that applicable Screen Rate, Interpolated Screen Rate or Reference Bank Rate is below zero, LIBOR will be deemed to be zero.
Lien ” means with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
Lloyd’s ” means the Society incorporated by Lloyd’s Act 1871 by the name of Lloyd’s.
Lloyd’s Rules ” means:
 
(a)
Lloyd’s Acts 1871-1982 and the byelaws and regulations of Lloyd’s applicable and in force from time to time; and

(b)
the rules and regulations of the Financial Conduct Authority or the Prudential Regulation Authority, as applicable (or any successor thereto), which may apply to Lloyd’s or managing agents at Lloyd’s from time to time.




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Maiden Debt ” means all Indebtedness and other obligations and liabilities of the Account Party to Maiden Reinsurance under a loan agreement between the Guarantor and Maiden Reinsurance, pursuant to which Maiden Reinsurance lends funds to the Account Party from time to time for the amount of the obligations of the Guarantor’s U.S., Irish and U.K. insurance companies (the “ AmTrust Ceding Insurers ”) that the Account Party is obligated to secure, not to exceed an amount equal to Maiden Reinsurance’s proportionate share of such obligations to such AmTrust Ceding Insurers in accordance with certain quota share reinsurance agreements, all of the foregoing as described in the Guarantor’s Form 10-Q filed by the Guarantor with the SEC on November 9, 2015, as such loan agreement and any other documents entered into in connection therewith may be amended from time to time.
Maiden Reinsurance ” means Maiden Reinsurance, Ltd., a company organised under the laws of Bermuda and a wholly-owned subsidiary of Maiden Holdings, Inc., a Bermuda insurance holding company.
Majestic ” means Majestic Insurance Company, a California corporation.
Majority Banks ” means:
 
(a)
if there are no Letters of Credit then outstanding, a Bank or Banks whose Commitments aggregate more than 66  2 3 % of the Aggregate Commitment (or, if the Aggregate Commitment has been reduced to zero, aggregated more than 66  2 3 % of the Aggregate Commitment immediately prior to the reduction); or

(b)
at any other time, a Bank or Banks whose participations in the Letters of Credit then outstanding aggregate more than 66  2 3 % of all the Letters of Credit then outstanding.
Managing Agent ” means AmTrust Syndicates Limited.
Managing Agent’s Undertaking ” means an undertaking to be executed by AmTrust Syndicates Limited in respect of each Syndicate with respect to notification of cash calls on each of the Syndicates, in a form acceptable to the Agent.
Margin Stock ” means “margin stock” within the meaning of Regulations T, U and X of the Board of Governors of the Federal Reserve System of the United States.
Material Adverse Effect ” means a material adverse effect on:
 
(a)
the business, operations, property or condition (financial or otherwise) of the Guarantor and its Subsidiaries taken as a whole;

(b)
the ability of the Obligors to perform their payment obligations under the Finance Documents; or

(c)
the validity or enforceability of any of the Finance Documents or the rights or remedies of the Agent and the Banks thereunder.

Maturity Date ” means 31 July 2022.
Moody’s ” means Moody’s Investors Service Limited (or any successor to its rating business).
Multiemployer Plan ” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
Net Solvency Shortfall ” or “ Solvency Deficit ” each has the meaning given to the term “solvency shortfall” in Lloyd’s Definitions Byelaw (No. 7 of 2005).
Net Worth ” means, as to any Person, the sum of its capital stock (including its preferred stock), capital in excess of par or stated value of shares of its capital stock (including its preferred stock), retained earnings and any other account which, in accordance with GAAP, constitutes stockholders equity, but, in the case of the Guarantor excluding all accumulated other comprehensive income (or loss) as shown on the most recent consolidated balance sheet of the Guarantor delivered to the Agent pursuant to Clause 14.4 (c)(i) (Audited Financial Statements).
Non-Recourse Secured Debt Guarantees ” means Guarantees in respect of Permitted Non-Recourse Secured Debt, where liability of the guarantor is limited to Customary Recourse Exceptions.
Obligations ” means (a) all obligations of the Guarantor or the Account Party from time to time arising under or in respect of the due and punctual payment of (i) the principal of and premium, if any, and interest (including interest accruing during the pendency of any proceeding under any Debtor Relief Laws, regardless of whether allowed or allowable in such proceeding) on the Letters of Credit, when and as due, whether at maturity,



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by acceleration, upon one or more dates set for prepayment or otherwise, and (ii) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any proceeding under any Debtor Relief Laws, regardless of whether allowed or allowable in such proceeding), of the Guarantor or the Account Party under this Agreement and the other Finance Documents, and (b) the due and punctual performance of all covenants, agreements, obligations and liabilities of the Guarantor or the Account Party under or pursuant to this Agreement and the other Finance Documents.
Obligor ” means each of the Account Party, the Guarantor and each Corporate Member that is party to this Agreement.
Outstanding Indebtedness ” means, without double counting, the aggregate of the maximum amounts for which the Banks are or may be liable, actually or contingently, under all Letters of Credit and the actual and contingent obligations of the Obligors to the Finance Parties in respect of such amounts, and all other sums of money whatsoever from time to time due or owing, actually or contingently, to the Finance Parties under or pursuant to the Finance Documents, and with respect to a particular Letter of Credit “ Outstanding Indebtedness with respect to that Letter of Credit ” or any similar phrase shall be construed accordingly.
Own Funds ” has the meaning given in the Handbook.
Party ” means any party to the Finance Documents.
PBGC ” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor performing similar functions.
Permitted Acquisition ” means any acquisition, whether by purchase, merger, consolidation or otherwise, by the Guarantor or any of its Subsidiaries of (a) all or substantially all of the property of any Person, or of any business, book of business, business unit or division of any Person or (b) Equity Interests of any Person, and otherwise causing such Person to become a Subsidiary, if each of the following conditions is met:
 
(a)
in the case of the acquisition of Equity Interests of such Person, upon the consummation thereof, such acquired Person or any Person formed in connection with such acquisition shall be a Subsidiary of the Guarantor;

(b)
in the case of the acquisition of all or substantially all of the property of or of any business, business unit or division of any Person, in each case, upon the consummation thereof, such property, business, business unit or division shall be wholly-owned directly by the Guarantor or one or more Subsidiaries of the Guarantor;

(c)
no Potential Event of Default then exists or would result therefrom;

(d)
after giving effect to such acquisition on a Pro Forma Basis, the Guarantor shall be in compliance with Clause 15.4 as of the last day of the Test Period most recently ended;

(e)
[intentionally omitted];

(f)
the Person or business to be acquired shall be, or shall be engaged in, a business of the type that the Guarantor and its Subsidiaries are permitted to be engaged in under Clause 14.2(y), and the property to be acquired is to be used in a business of the type that the Guarantor and its Subsidiaries are permitted to be engaged in under Clause 14.2(y);

(g)
the Board of Directors of the Person to be acquired shall not have indicated publicly its opposition to the consummation of such acquisition (which opposition has not been publicly withdrawn);

(h)
transactions in connection therewith shall be consummated in accordance with all applicable requirements of Law; and

(i)
at least 5 Business Days prior to the proposed date of consummation of the transaction involving consideration in excess of $300,000,000, the Guarantor shall have delivered to the Agent a certificate of a Financial Officer of the Guarantor certifying that (A) such transaction complies with this definition (which shall have attached thereto reasonably detailed backup data and calculations showing such



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compliance), and (B) such transaction could not reasonably be expected to result in a Material Adverse Effect.
Permitted Call Spread Derivative ” means one or more Derivatives pursuant to which an Obligor:
 
(a)
acquires a call option requiring the counterparty thereto to deliver to such Obligor shares of common stock of such Obligor, the cash value of such shares or a combination thereof from time to time upon exercise of such option; and/or

(b)
issues to the counterparty thereto warrants to acquire common stock of such Obligor.
in each case entered into by such Obligor concurrently with the issuance of Permitted Convertible Notes; provided that:
 
(i)
the terms, conditions and covenants of each such Derivative shall be such as are typical and customary for Derivatives of such type (as determined by the Board of Directors of the Obligor in good faith); and

(ii)
in the case of paragraph (b) above, each such Derivative, at the time of execution, would be classified as an equity instrument in accordance with EITF 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock , or any successor thereto (including pursuant to the Accounting Standards Codification), and the settlement of such Derivative does not require such Obligor to make any payment in cash or cash equivalents that would disqualify such Derivative from so being classified as an equity instrument.
Permitted Convertible Notes ” means any unsecured notes issued by an Obligor that are convertible into common stock of such Obligor, cash or any combination thereof; provided that the Indebtedness thereunder satisfies the following requirements:
 
(a)
both immediately prior to and after giving effect (including pro forma effect) thereto, no Potential Event of Default or Event of Default shall exist or result therefrom;

(b)
such Indebtedness matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the date that is 367 days after the Maturity Date (it being understood that the settlement of any early conversion as a result of circumstances described in Section 4.01 in effect as of the Effective Date (“Right to Convert”) of the Existing Notes Indenture or (ii) required repurchase following a “Fundamental Change” (as defined in the Existing Notes Indenture in effect as of the Effective Date) (i.e. prior to the stated maturity date of the Indebtedness) of any Permitted Convertible Notes in accordance with the terms thereof shall not be considered a maturity, scheduled amortization or other scheduled payment of principal prior to the date that is 367 days after the Maturity Date);

(c)
such Indebtedness is not guaranteed by any Subsidiary of such Obligor; and

(d)
the aggregate principal amount of Indebtedness permitted to be issued or incurred under this definition shall not exceed $200,000,000 at any time outstanding.
Permitted Encumbrances ” means:
 
(a)
Liens for Taxes not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

(b)
carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 30 days or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person;

(c)
pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA;




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(d)
Liens given in lieu of surety, stay or appeal bonds or deposits required by law or any governmental regulations, court order or judgment as a condition to the transaction of business or the exercise of any right, privilege or license;

(e)
Liens securing judgments not constituting an Event of Default under Clause 16.1(i) (Final Judgment);

(f)
easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Guarantor or any Subsidiary of the Guarantor;

(g)
Liens granted in the ordinary course of business and consistent with past practices on invested assets pursuant to trust, withheld balances or other security arrangements in connection with (i) reinsurance policies entered into in the ordinary course of business or (ii) regulatory requirements;

(h)
Liens granted or arising in the ordinary course of business under or in connection with Insurance Products; and

(i)
Liens created by the Guarantor or any Subsidiary of the Guarantor in the ordinary course of business over deposits or investments pursuant to statutory or regulatory requirements of any Applicable Insurance Regulatory Authority as a condition to obtaining or maintaining any licenses issued by it or to satisfy regulatory capital or other financial responsibility requirements.
provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.
Permitted Intercompany Pledge ” means Liens granted by the Guarantor or any of its Subsidiaries in favour of one or more of the Guarantor's Subsidiaries securing Indebtedness permitted by Clause 14.2(s)(vi).

Permitted Investments ” means:
 
(a)
direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

(b)
investments in commercial paper maturing within one year from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

(c)
investments in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;

(d)
fully collateralized repurchase agreements with a term of not more than thirty (30) days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; and

(e)
money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000; and

(f)
in the case of Subsidiaries doing business outside of the United States, investments that are substantially similar, and of comparable credit quality, to those set forth in clauses (a) through (e) above.
Permitted Majestic Acquisition ” means the acquisition by the Guarantor of the renewal rights to Majestic’s workers’ compensation insurance business in consideration, in part, of the assumption by the Guarantor of all of Majestic’s liabilities under outstanding workers’ compensation insurance policies (including federal longshore and harbour workers’ compensation act (“ USL&H ”) policies) through a loss portfolio transfer and quota share reinsurance agreement by which the Guarantor will receive from Majestic cash and invested assets in an amount equal to Majestic’s reserves for such liabilities, as adjusted in the agreement. It is understood and



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agreed that, as required by law, a significant portion of Majestic’s assets to be received by the Guarantor are on deposit with the State of California, other US states and the US Department of Labor as security for its obligations to workers’ compensation and USL&H policyholders and will continue to be on deposit following the consummation of the Permitted Majestic Acquisition.
Permitted Majestic Indebtedness ” means the reimbursement obligations of the Guarantor under the letter of credit facility established by the Guarantor as a result of the Permitted Majestic Acquisition for the sole purpose of complying with the deposit requirements of the State of California and the US Department of Labor as security for the Guarantor’s obligations to workers’ compensation and USL&H policyholders in connection with the business acquired by the Guarantor pursuant to the Permitted Majestic Acquisition.
Permitted Majestic Liens ” means the Liens encumbering the cash or investment assets of the Guarantor that secure the Permitted Majestic Indebtedness (but excluding, for the avoidance of doubt, any other Indebtedness or other obligations other than customary margin requirements in respect of letter of credit facilities similar to the Permitted Majestic Indebtedness).
Permitted Nationale Borg Acquisition ” means the acquisition by AmTrust International Limited, a Subsidiary of the Guarantor, of 100% of the issued and outstanding stock of N.V. Nationale Borg-Maatschappij and its subsidiaries (“ Nationale Borg ”), all of which will become Subsidiaries of the Guarantor at closing. It is understood and agreed that post acquisition, Nationale Borg will remain liable under four different letter of credit facilities pursuant to which trade related guarantees and comparable standby letters of credit are issued primarily to secure obligations owing by Nationale Borg to third parties in the ordinary course its business. The aggregate face amount of all trade related guarantees and comparable standby letters of credit that may be issued under three of these four facilities is €76,650,000 and under the fourth facility is U.S. $2.2 million. One of the letter of credit facilities, with a maximum capacity of €1,650,000, is fully cash collateralized through a deposit account maintained with the letter of credit issuer (the “ Nationale Borg Retained Liabilities ”).
Permitted Nationale Borg Indebtedness ” means the reimbursement obligations of the Guarantor, AmTrust International Limited, a Subsidiary of the Guarantor, or Nationale Borg once it becomes a Subsidiary of the Guarantor, under the Nationale Borg Retained Liabilities in connection with the business acquired by AmTrust International Limited pursuant to the Permitted Nationale Borg Acquisition.
Permitted Non-Recourse Secured Debt ” means secured Indebtedness of the Guarantor or any Subsidiary of the Guarantor incurred in order to purchase or develop real property or to finance the construction or improvement of real property or to purchase furniture, fixtures or other equipment for real property (or any other related Indebtedness of the Guarantor or any Subsidiary of the Guarantor and any refinancing thereof) so long as (i) the payment of such Indebtedness is non-recourse to the Guarantor or any Subsidiary of the Guarantor or any such Person’s assets (except for Customary Recourse Exceptions and other than as provided in the following clause (v)), either as a result of the structure of, or a contractual provision applicable to, such Indebtedness, (ii) the principal amount of Indebtedness related to such real property and related assets does not exceed the cost of purchasing, developing, constructing or improving such real property and/or related assets, (iii) the aggregate outstanding principal amount of all Permitted Non-Recourse Secured Debt shall not at any time exceed an amount equal to 7.5% of the total cash and Eligible Investments maintained by the Guarantor at such time, (iv) neither the Guarantor nor any Subsidiary of the Guarantor shall have guaranteed such Indebtedness (other than with respect to Non-Recourse Secured Debt Guarantees) or shall otherwise be obligated in respect thereof (other than to the extent of any security therefor permitted by the following clause (v)) and (v) any Liens securing such Indebtedness shall (A) be limited to (1) such real property and/or related assets purchased, developed, constructed or improved by the Guarantor or such Subsidiary of the Guarantor (and any income generated from such real property and/or related assets and proceeds thereof) or (2) the Equity Interests of the Subsidiary of the Guarantor purchasing, developing, constructing or improving such real property and/or related assets, so long as such real property and/or related assets are the sole assets of such Subsidiary and (B) not apply to any other property or assets of the Guarantor or any Subsidiary of the Guarantor.
Permitted Qualifying Subordinated Indebtedness ” means:
(a) unsecured Indebtedness of the Guarantor; provided that (i) both immediately prior to and after giving effect (including pro forma effect) thereto, (1) no Potential Event of Default or Event of Default shall exist or result therefrom and (2) the Guarantor shall be in compliance with all of the covenants set forth in Clauses 15.2 to 15.5 inclusive, (ii) such Indebtedness matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the date that is 367 days after the Maturity Date, (iii) save for (b) below, such Indebtedness is not guaranteed by any Subsidiary of the



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Guarantor and (iv) such Indebtedness shall be expressly subordinated to the Obligations on terms reasonably acceptable to the Agent; and

(b) guarantees by any Subsidiary of the Guarantor of the Indebtedness described in clause (a), provided such guarantees are expressly subordinated to the Obligations on terms reasonably acceptable to the Agent.
Permitted Tax Incentive Financing Transactions ” means the transactions described in Schedule 13.
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 (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code and in respect of which the Guarantor or any ERISA Affiliate 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.
Potential Event of Default ” means an event or circumstance which, with the giving of any notice, lapse of time, determination of the Agent in accordance with the relevant provisions of this Agreement and the other Finance Documents or satisfaction of any other condition would constitute an Event of Default.
“PRA” means the United Kingdom Prudential Regulation Authority and any predecessor or successor body or bodies;
Primary FAL ” means in relation to a Corporate Member and a year of account, any FAL other than a Letter of Credit.
Pro Forma Basis ” means on a basis in accordance with GAAP and Regulation S-X and otherwise reasonably satisfactory to the Agent.
Purchase Money Obligations ” means for any Person, the obligations of such Person in respect of Indebtedness (including Capital Lease Obligations) incurred for the purpose of financing all or any part of the purchase price of any fixed or capital assets or the cost of installation, construction or improvement of any such assets and any refinancing thereof; provided, however, that (i) such Indebtedness is incurred within one year after such acquisition, installation, construction or improvement of such assets by such person and (ii) the amount of such Indebtedness does not exceed 100% of the cost of such acquisition, installation, construction or improvement, as the case may be.
Quasi-Security ” means an arrangement or transaction described in Clause 14.2(p)(ii).
Quotation Day ” means in relation to any period for which an interest rate is to be determined, the day falling two Business Days before the first day of that period.
RDS ” means a realistic disaster scenario prescribed from time to time by Lloyd’s and in respect of which, pursuant to Lloyd’s Rules, the Managing Agent of each Syndicate is obliged to prepare and submit to Lloyd’s a report.
Reference Bank Quotation ” means any quotation supplied to the Agent by a Reference Bank.

Reference Bank Rate ” means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by the Reference Banks as either:

(a)
if:
(i)    the Reference Bank is a contributor to the applicable Screen Rate; and

(ii)    it consists of a single figure:

the rate applied to the relevant Reference Bank and the relevant currency and period) which contributors to the applicable Screen Rate are asked to submit to the relevant administrator; or

(b)
in any other case, the rate at which the relevant Reference Bank could fund itself in the relevant currency for the relevant period with reference to the unsecured funding wholesale funding market.
Reference Banks ” means such banks as may be appointed by the Agent in consultation with the Account Party.



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Regulated Insurance Company ” means any Subsidiary of the Guarantor that is an authorised or admitted insurance carrier that transacts Insurance Business in any jurisdiction (foreign or domestic) and is regulated by any Applicable Insurance Regulatory Authority.
Regulation S-X ” means Regulation S-X under the Securities Act of 1933, as amended.
Release ” means any release, spill, emission, leaking, dumping, pumping, emptying, escaping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment or within, at, to, under, from or upon any building, structure, facility or fixture.
Release Test ” means any assessment carried out by Lloyd’s to determine whether the amount of FAL held on behalf of a Corporate Member is sufficient, and how much (if any) additional FAL must be provided and how much (if any) existing FAL may be released.
Relevant Jurisdiction ” means for any Obligor:
 
(a)
the jurisdiction of incorporation of such Obligor;

(b)
the jurisdiction of the principal office of such Obligor; and

(c)
the jurisdiction whose laws govern the Security Documents, or the perfection of the security interests provided therein.
Repeating Representations ” means each of the representations set out in Clause 13 ( Representations and Warranties ) other than the representations in Clause 13.8 (No litigation current or pending) , Clause 13.12 (Change in Disclosed Matters) , Clause 13.15 (No Material Adverse Effect) , Clause 13.17(a) ( Truth of financial and other information ), Clause 13.23 ( No liability to withholding or deduction ), Clause 13.30 ( Sanctions ), Clause 13.32 ( Secured Account ) and Clause 13.33 ( Deposit Accounts ).
Repurchase Agreement ” means a repurchase agreement entered into by the Guarantor from time to time pursuant to which the Guarantor shall have sold securities to a third party and has agreed to repurchase such security at a specified time in the future; provided that such repurchase agreement shall have been entered into by the Guarantor solely in connection with the Guarantor’s investment portfolio and in accordance with the Investment Policy of the Guarantor.
Repurchase Liability ” means, at any date of determination, the liability of the Guarantor to purchase securities in the market that are identical to those securities it borrowed and sold pursuant to Repurchase Transactions (it being understood that such liability shall be measured based on the then market value of such security).
Repurchase Transaction ” means a repurchase transaction in which the Guarantor borrows a security and delivers it to a purchaser and at a later date, the Guarantor purchases the identical security in the market to replace the borrowed security; provided, that such transaction shall have been entered into by the Guarantor solely in connection with the Guarantor’s investment portfolio and in accordance with the Investment Policy of the Guarantor.
Required Collateral Amount ” means:
 
(a)
the Applicable Collateral Percentage of the Sterling Equivalent Amount of the sum of:

(i)
the face amount of all issued Letters of Credit, and

(ii)
any amount by which (i) will be increased following the issue of any Letter of Credit which is the subject of an outstanding Application or following an increase in the amount of any Letter of Credit requested under Clause 3.12 ( Changes to issued Letters of Credit ); plus

(b)
except where the Applicable Collateral Percentage is 100 per cent:

(i)
the Sterling Equivalent Amount of 100 per cent of the amount of any Net Solvency Shortfall attributable to any Corporate Member on any open year of account less the amount of any cash or other assets deposited into the personal reserves of such Corporate Member which are treated by Lloyd’s as available to meet that Net Solvency Shortfall; plus



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(ii)
the amount by which the Sterling Equivalent Amount of the face amount of all issued Letters of Credit exceeds £455,000,000; plus

(iii)
the amount of any increases resulting from Clause 7.11(b) or Clause 21.3 ( Immediate collateralisation ).
Responsible Officer ” of any Person means any executive officer or Financial Officer of such person and any other officer or similar official thereof with responsibility for the administration of the obligation of such Person in respect of this Agreement.
Screen Rate ” means the London interbank offered rate administered by the ICE Benchmark Administration (or any other person which takes over the administration of that rate) for the relevant currency and period displayed (before any correction, recalculation or republication by the administrator) on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Thomson Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters. If such page or service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Account Party.
“Scotia” means The Bank of Nova Scotia, London Branch, a bank incorporated in Canada and acting through its office at 201 Bishopsgate, London EC2M 3NS.
SCR ” means the Solvency Capital Requirement applicable to a Syndicate (or, in the case of a Corporate Member, the notional SCR applicable to that Corporate Member), in each case calculated in accordance with requirements set out in the Handbook and Lloyd's Rules.
SEC ” means the Securities and Exchange Commission, or any regulatory body that succeeds to the functions thereof.
Secured Account ” means the account or accounts identified in the Security Agreement as being the subject of the pledge and security thereunder.
Secured Portion ” means the Sterling Equivalent Amount of the Applicable Collateral Percentage of the aggregate outstanding amount available to be drawn down under the Letters of Credit.
Security ” means a mortgage, charge (whether fixed or floating), pledge, lien, trust, hypothecation, assignment or other security interest securing any obligation of any Person or any other agreement or arrangement having a similar effect.
Security Agreement ” means a pledge and security agreement dated 26 November 2013 between the Security Trustee and the Account Party under which the Account Party pledges to the Security Trustee its rights in respect of certain cash and assets to be held in the Secured Account.
Security Documents ” means this Agreement, any Fee Letter, the Security Agreement, the Account Control Agreement, the Account Security Deeds and the Amending and Restating Agreement, and any and every other document from time to time executed to secure, or to establish a subordination or priorities arrangement in relation to, all or any of the obligations of any Person to the Banks (or any of them) under this Agreement or any other Finance Document.
Security Period ” means the period from the date of this Agreement until the discharge of the Security created by the Security Documents by final and irrevocable repayment or payment in full of the Outstanding Indebtedness and expiry of all the Letters of Credit.
Security Trustee ” means ING Bank N.V., London Branch, a bank incorporated in The Netherlands and acting through its office at 8-10 Moorgate, London EC2R 6DA in its capacity as security trustee for the Finance Parties.
Service and Fee EBITDA ” means, for any period and for any Person, net income of such Person for such period, produced solely from services and fees generated from product warranty registration and service, servicing carriers, management services, insurance fees, broker services, asset management services, information technology services and other similar services related to the Insurance Business plus, to the extend deducted from revenues in determining such net income, (i) interest expense, (ii) expense for taxes paid or accrued, (iii) depreciation, (iv) amortization, and (v) extraordinary losses incurred other than in the ordinary course of business, minus, to the extent included in net income, extraordinary gains realised other than in the ordinary course of business.



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Service Bank ” means the Agent, the Issuing Bank and the Security Trustee.
Share Purchase Agreement ” means the agreement dated on 19 April 2016 for the purchase by the Guarantor of the entire issued share capital of ANV Holdings B.V. and its affiliates from Ontario Teachers’ Pension Plan;
Solvency Statement ” has the meaning given in Lloyd’s Definitions Byelaw (No. 7 of 2005).
Sterling ” or “ £ ” means the lawful currency from time to time of the United Kingdom.
Sterling Cash Collateral ” means Collateral that is deposited in any of the ING Deposit Accounts and which is denominated in Sterling.
Sterling Equivalent Amount ” means:
 
(a)
in the case of any amount denominated in Sterling, that amount;

(b)
in the case of any amount denominated in a currency other than Sterling, that amount converted into Sterling at such rate of exchange as the Agent may select based on the rates of exchange used in its books, acting reasonably.

S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies Inc. (or any successor to its rating business).
Strategic Investment ” means (i) Investments by the Guarantor or any Subsidiary of the Guarantor in 50% or less of the Equity Interests of a Person and (ii) loans or advances by the Guarantor or any Subsidiary of the Guarantor to a Person, in the case of each of (i) and (ii), that is engaged in a business of the type in which the Guarantor and its Subsidiaries are permitted to engage under Clause 14.2(y) (Changes to Business).
Structured Securities ” means, collectively, the following: (a) the Existing Structured Securities; and (b) (i) any other Junior Subordinated Debentures, (ii) the common securities issued by TOPS Trusts to the Guarantor in connection with such other Junior Subordinated Debentures, (iii) the trust preferred securities issued by TOPS Trusts in connection with such other Junior Subordinated Debentures and having substantially similar terms as such Junior Subordinated Debentures and (iv) any guarantee executed and delivered by the Guarantor with respect to such trust preferred securities, in each case with respect to the foregoing in clause (b) above, all reasonably acceptable to the Agent and as the same may be further amended, amended and restated, supplemented or otherwise modified from time to time.
Subsidiary ” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, Controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
Substantial Portion ” means, with respect to the assets of the Guarantor and its Subsidiaries, assets which:
 
(a)
represent more than 10% of the consolidated assets of the Guarantor and its Subsidiaries as reflected in the consolidated financial statements of the Guarantor and its Subsidiaries as of December 31, 2014; or
(b)
are responsible for generating more than 10% of the consolidated net revenues or of the Consolidated Net Income of the Guarantor and its Subsidiaries as reflected in the financial statements referred to in clause (a) above.
Swap Contract ” means:
 
(a)
any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, emission rights, spot contracts, or any other similar transactions or



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any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement; and
 
(b)
any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement or any other master agreement (any such master agreement, together with any related schedules, a “ Swap Master Agreement ”), including any such obligations or liabilities under any Swap Master Agreement;
provided that Swap Contract shall not include:
 
(i)
any right, option, warrant or other award made under an employee benefit plan, employment contract or other similar arrangement; or

(ii)
any right, warrant or option or other convertible or exchangeable security or other instrument issued by the Guarantor or its Subsidiaries or any Affiliate of the Guarantor or its Subsidiaries for capital raising purposes.
Syndicate ” means Lloyd’s Syndicate 1206, Lloyd’s Syndicate 2526, Lloyd’s Syndicate 44 Lloyd's Syndicate 1861 and Lloyd's Syndicate 5820.
Syndicate Merger Date ” means the later of:
(a)
the date on which the underwriting of each of Syndicates 1206 and 5820 is merged into Syndicate 1861; and

(b)
the Effective Date.
Synthetic Lease ” means, as to any Person, any lease (including leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed):
 
(a)
that is accounted for as an operating lease under GAAP; and

(b)
in respect of which the lessee retains or obtains ownership of the property so leased for U.S. federal income tax purposes, other than any such lease under which such Person is the lessor.
Synthetic Lease Obligations ” means, as to any Person, an amount equal to the capitalised amount of the remaining lease payments under any Synthetic Lease that would appear on a balance sheet of such Person in accordance with GAAP if such obligations were accounted for as Capital Lease Obligations.
Tax ” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any related penalty or interest).
Tax Credit ” means a credit against, relief or remission for, or repayment of any Tax.
Tax Deduction ” means a deduction or withholding for or on account of any present or future Tax from a payment made under a Finance Document other than a FATCA Deduction.
Tax Payment ” means a payment made by an Obligor to a Bank in any way relating to a Tax Deduction or under any indemnity given by that Obligor in respect of Tax under any Finance Document (including the amount by which a payment made by an Obligor to a Finance Party is increased under Clause 7.3 ( Gross-up ) or a payment under Clause 7.6 ( Tax indemnity )).
Termination Requirements ” means, collectively, the occurrence of all of the following events: (A) the payment in full of the Obligations (other than unasserted contingent indemnity obligations), (B) the expiry of the Commitment Period, and (C) the termination, expiration or cancellation of all outstanding Letters of Credit.

Test Period ” means, at any time, the four consecutive fiscal quarters of the Guarantor then last ended.
TOPS Trust ” means a trust sponsored or acquired by the Guarantor or acquired, directly or indirectly, by the Guarantor or one of its Subsidiaries, in each case created for the sole purpose of issuing such trust's preferred and common securities in connection with the issuance of Junior Subordinated Debentures and which is not part of the Guarantor’s consolidated group of entities in accordance with GAAP.

Tower Group Commercial Lines Transaction ” means the loan made by the Guarantor to ACP Re Holdings, LLC (“ ACP Re ”) in the aggregate principal amount of $125,000,000, pursuant to an amended and restated



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credit agreement dated as of September 20, 2016 by and among ACP Re, the Michael Karfunkel Family 2005 Trust, the lenders party thereto and the Guarantor, as administrative agent (as it may be amended or otherwise modified from time to time).
Transfer Certificate ” means a transfer certificate in the form set out in Schedule 3 with any modifications or amendments approved or required by the Agent.
Transferee Bank ” has the meaning given to that term in Clause 28.3.
Transferor Bank ” has the meaning given to that term in Clause 28.3.
Unsecured Portion ” means the Sterling Equivalent Amount of the aggregate outstanding amount available to be drawn down under the Letters of Credit less the Secured Portion, but not less than zero.
USA Patriot Act ” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56) of the United States of America.
US Bankruptcy Code ” means Title 11 of the United States Code, as amended from time to time.
US Bankruptcy Law ” means the US Bankruptcy Code, as amended from time to time, and any other US federal or state bankruptcy, insolvency or similar law.
US Tax Obligor ” means:
 
(a)
an Obligor which is resident for tax purposes in the United States of America; or

(b)
an Obligor some or all of whose payments under the Finance Documents are from sources within the United States for US federal income tax purposes;
VAT ” means:
 
(a)
any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and

(b)
any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere.
Whole World AEP ” means the whole world aggregate exceedance probability 1-in-30 metric required under Lloyd's Rules to be included in the RDS section of a Syndicate's business forecast.
Wholly Owned Subsidiary ” has the meaning given to the term “wholly-owned subsidiary” in section 1159 of the Companies Act 2006.
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.

1.2
Interpretation
The following expressions shall be construed in the following manner:
Account Party ”, “ Corporate Member ” and “ Obligor ” include their administrators, successors and permitted assigns;
approved ” means approved in writing by the Agent, with the authorisation of the Majority Banks;
assets ” includes present and future properties, revenues and rights of every description;
Bank ”, “ Agent ”, “ Security Trustee ”, “ Issuing Bank ” and “ Bank ” include their respective successors and assigns;
Clause ” shall be construed as a reference to a clause hereof;
continuing ”, in relation to a Potential Event of Default, shall be construed as a reference to a Potential Event of Default which has not been remedied or waived in accordance with the terms hereof and, in relation to an Event of Default, one which has not been remedied within the relevant grace period or waived in accordance with the terms hereof;



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Schedule ” shall be construed as a reference to a schedule hereto;
successor ” of any Party shall be construed so as to include an assignee or successor in title of such Party and any Person which under the laws of its jurisdiction of incorporation or domicile has assumed the rights and obligations of such Party under this Agreement or to which, under such laws, those rights and obligations have been transferred;
syndicate ” shall be construed as a reference to a group of members or a single corporate member underwriting insurance business at Lloyd’s through the agency of a managing agent to which a particular syndicate number is assigned by the Council of Lloyd’s;
winding up ”, “ dissolution ” or “ administration ” of a company or corporation shall be construed so as to include any equivalent or analogous proceedings under the law of the jurisdiction in which such company or corporation is incorporated or any jurisdiction in which such company or corporation carries on business including the seeking of liquidation, winding up, reorganisation, dissolution, administration, arrangement, adjustment and protection or relief of debtors;
year ” shall, except when used to refer to a year of account or a financial year, be construed as a reference to a calendar year; and
year of account ” shall be construed as a Lloyd’s year of account.
1.3    Unless the context otherwise requires, words in the singular include the plural and vice versa.
1.4    References to any document include the same as varied, supplemented or replaced from time to time.
1.5    References to any document include the same as varied, supplemented or replaced from time to time.
1.6    Clause headings are for convenience of reference only and are not to be taken into account in construction.
1.7    Unless otherwise specified, references to Clauses, Recitals and Schedules are respectively to Clauses of and Recitals and Schedules to this Agreement.
1.8    In this Agreement, references to periods of “ months ” shall mean a period beginning in one calendar month and ending in the next calendar month on the day numerically corresponding to the day of the calendar month in which such period started, provided that (a) if such period started on the last Banking Day in a calendar month, or if there is no such numerically corresponding day, such period shall end on the last Banking Day in the relevant calendar month and (b) if such numerically corresponding day is not a Banking Day, such period shall end on the next following Banking Day in the same calendar month, or if there is no such Banking Day, such period shall end on the preceding Banking Day (and “ month ” and “ monthly ” shall be construed accordingly).
1.9    A Person who is not a Party to this Agreement may not enforce, or otherwise have the benefit of, any provision of this Agreement under the Contracts (Rights of Third Parties) Act 1999.
2.         T HE F ACILITY - G ENERAL P ROVISIONS
2.1
Overall Maximum Limit
The overall maximum limit of the Facility shall not exceed £455,000,000 (based on the Sterling Equivalent Amount of the face amount of the Letters of Credit determined at the date of each utilisation) and, unless the Agent (with the approval of all of the Banks) otherwise agrees in writing, no Letter of Credit shall be issued if such limit has been or would thereby be exceeded.
 
2.2
Banks’ Participations
Subject to the provisions of this Agreement, each Bank will participate:
 
(a)
in the Facility, up to an aggregate maximum principal amount not exceeding its Commitment; and

(b)
in any Letter of Credit, in the proportion which its Commitment bears to the Aggregate Commitment on the Issuance Date.
For the avoidance of doubt, no Bank is obliged to participate in Letters of Credit in an aggregate amount greater than its Commitment.
 



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2.3
Corporate Members’ agent
The Corporate Members by executing this Agreement appoint the Account Party to act on their behalf as their agent in relation to this Agreement and irrevocably authorise the Account Party to supply all information concerning them contemplated hereby and to give any notice, demand or other communication, including an Application.
 
2.4
Cancellation
The Account Party may, on behalf of the Corporate Members, if it gives the Agent not less than five Banking Days’ prior notice, cancel the whole of the Facility or a part of the Facility in an amount not less than £5,000,000. Any cancellation under this Clause 2.4 shall reduce the Commitments of the Banks rateably.
 
2.5
Mandatory cancellation
Following the occurrence of a Full Collateralisation Event, the Agent shall, by written notice to the Account Party, declare the Commitment of each Bank, and the unutilised portion of the Facility, to be cancelled, whereupon the Commitment of such Bank and the unutilised portion of the Facility shall be cancelled and the Issuing Bank shall be under no further obligation to issue, and each Bank shall be under no further obligation to participate in the issuance of, any Letter of Credit, and any outstanding Application shall be automatically cancelled.
 
2.6
Position after expiry of Commitment Period
No Bank shall have any liability whatsoever to participate in a Letter of Credit to be issued after the date of the expiry of the Commitment Period, and each Letter of Credit will (subject to the terms of this Agreement) expire on 31 July 2022. Notwithstanding the foregoing, each Bank (in its absolute discretion) may, at the request of the Account Party, agree (upon such terms and conditions as they may think fit) to extend the expiry date of a Letter of Credit after 31 July 2022. Any Bank that does not agree to extend the expiry date of a Letter of Credit shall have no obligations in relation to any Letters of Credit extended pursuant to any such renewal or extension, and if a Letter of Credit is renewed or extended then the Issuing Bank shall make such amendments to the Letter of Credit as are necessary accordingly.
 
2.7
Obligations of Banks several
The obligations of each Bank under this Agreement and the other Finance Documents are several and, accordingly:
 
(a)
no Bank shall be liable for the failure of any other Bank to perform its obligations under this Agreement or any of the other Finance Documents; and

(b)
the failure of a Bank to perform any of its obligations under this Agreement or any of the other Finance Documents shall not relieve any other Bank or any Obligor from any of their respective obligations hereunder or thereunder.
2.8
Rights of Banks several
The rights and interests of each Bank under this Agreement and the other Finance Documents are several and, accordingly, notwithstanding any provision to the contrary herein or therein:
 
(a)
the aggregate of the amounts outstanding at any time under this Agreement and the other Finance Documents to each Bank shall be due as a separate and independent debt; and

(b)
except as otherwise stated in the Finance Documents, each Bank shall have the right to sue for any amount due and payable to it from any Obligor under this Agreement or any of the other Finance Documents and it shall not be necessary for any other Bank to be joined as an additional party in any proceedings to that end.
2.9
Restrictions on other proceedings by individual Banks



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Save as provided in Clause 2.8 ( Rights of Banks several ), no Bank shall, except with the prior written consent of the Majority Banks, bring any proceedings against any Obligor in respect of any other claim (whether in contract, tort or otherwise) which that Bank may have under or in connection with this Agreement or any of the other Finance Documents.

2.10
Parties bound by certain actions of the Majority Banks
Every Bank shall be bound in the absence of manifest error by:
 
(a)
any instruction or authorisation given by the Majority Banks to the Issuing Bank, the Agent or the Security Trustee under or in connection with any Finance Document; and

(b)
any action taken (or in good faith purportedly taken) by the Issuing Bank, the Agent or the Security Trustee in accordance with such an instruction or authorisation.

2.11
Rights apply in all capacities

Where a Bank acts in the capacity of Agent, Issuing Bank, Account Bank, Security Trustee or Lead Arranger, it may exercise any rights under any Security Document that it has in one capacity for the purpose of recovering any amount due to it in another capacity under this Agreement, and may exercise rights of set-off as between any such right and any such amount.
3.
T HE  F ACILITY  - S PECIFIC  P ROVISIONS
 
3.1
Purpose
Subject to the provisions of this Agreement, the Issuing Bank (on behalf of the Banks) agrees to issue Letters of Credit which may:
 
(a)
form part of the Funds at Lloyd’s of ACCL to support its underwriting at Lloyd's as a member of Syndicate 2526 as constituted for the 2014 and the prior open year of account and, through an interavailability arrangement, to provide Funds at Lloyd's on behalf of ACML to support its underwriting at Lloyd's as a member of:

(i)    Syndicate 2526, as constituted for the 2015 and 2016 years of account;

(ii)    Syndicate 1206, as constituted for the 2017, 2016 and all prior open years of account

(iii)    Syndicate 1861, as constituted for the 2018 and 2017 years of account; and

(iv)    Syndicate 5820 as constituted for the 2017 year of account;

(b)
form part of the Funds at Lloyd's of ANV to support its underwriting at Lloyd's as a member of Syndicate 1861 and Syndicate 5820, each as constituted for the 2016 and all prior open years of account and, through an interavailability arrangement, to provide Funds at Lloyd's on behalf of ACML to support its underwriting at Lloyd's as a member of:

(i)    Syndicate 1861, as constituted for the 2018 and 2017 years of account; and

(ii)    Syndicate 5820 and Syndicate 1206, each as constituted for the 2017 year of account;

(c)
form part of the Funds at Lloyd's on behalf of ACML to support its underwriting at Lloyd's as a member of:

(i)
Syndicate 2526 as constituted for the 2015 and 2016 years of account; and

(ii)
Syndicate 1206 as constituted for the 2017 and all prior open years of account;

(iii)
Syndicate 1861 as constituted for the 2017 and 2018 years of account; and



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(iv)
Syndicate 5820 as constituted for the 2017 year of account; and     

(d)
form part of the Funds at Lloyd's of ACM2L to support its underwriting at Lloyd’s as a member of Syndicate 44 as constituted for the 2018 and all prior open years of account.

provided that, in each case, such Letters of Credit shall not be used to cover any Net Solvency Shortfall attributable to any Corporate Member in respect of any open year of account.
3.2
Maximum limit
Subject to Clauses 2.1 and 2.2, and save as may result from changes in currency exchange rates after the issue of Letters of Credit (in which event collateralisation will be required for any excess), the Sterling Equivalent Amount of the Letters of Credit issued under this Agreement shall not at any time exceed £455,000,000.
 
3.3
Currency and amount
 
(a)
The Facility will be available in Sterling, Euros, Dollars and any other currency agreed by all of the Banks.

(b)
The amount of a proposed Letter of Credit as specified in an Application must be such that, following the issue of that Letter of Credit, the Sterling Equivalent Amount of the face value of all of the Letters of Credit, excluding any Letter of Credit which is intended to be replaced and released for cancellation substantially simultaneously with the issue of the proposed Letter of Credit, will not be more than the Available Facility.
3.4
Conditions precedent and subsequent
 
(a)
Conditions Precedent: It shall be a condition of the effectiveness of each Application and the issuance of any Letter of Credit that the following conditions precedent are satisfied:

(i)    in respect of the first Application only:

(1)    the Agent or its legal advisers have received the documents and evidence described in Schedule 1 ( Conditions Precedent Documents and Evidence ) of the Amending and Restating Agreement, in form and substance satisfactory to them; and the Agent shall notify the Account Party promptly upon being so satisfied;

(2)    the representations and warranties in Clause 13 are true and correct in all material respects (or, to the extent any such representation or warranty is qualified as to “material”, “Material Adverse Change” or similar wording, in all respects) as at the first Application Date;

(3)    the Financial Strength Rating of the Account Party was not lower on the first Application Date than on the date of this Agreement, namely A-; and

(4)    in respect of each Obligor there has been no event, development or circumstance since the date of the latest audited financial statements of that Obligor or the date of the latest unaudited combined financial statements of the Guarantor or (other, in either case, than those disclosed in any 10-Q, 10-K or 8K filings made by the Guarantor since that date) that has had, or could reasonably be expected to have, a material adverse effect on the business, operations or property (financial or otherwise) of such Obligor;

(5)    the Issuing Bank has received a duly completed Application in respect of that Letter of Credit;
(ii)    the Custodian has provided a statement showing that the Collateral Value is equal to the Required Collateral Amount as it would be following the issuance of that Letter of Credit;
(iii)    the Agent has received payment of the fees, costs and expenses specified in Clause 18 or in any other Finance Document to the extent due and payable;



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(iv)    the Repeating Representations are true and correct in all material respects at the Application Date and on the proposed Issuance Date of that Letter of Credit;
(v)    the Agent is satisfied that, upon receipt of the Letter of Credit issued on behalf of a Corporate Member, Lloyd’s will issue, in a form acceptable to the Agent, a Letter of Comfort addressed to that Corporate Member setting out the intended order of application of the Funds at Lloyd’s of that Corporate Member in respect of Lloyd’s obligations allocable to each year of account of the Syndicate of which that Corporate Member is a member for the time being remaining open, being an order consistent with Clause 3.6;
(vi)    the Agent is provided with evidence which is satisfactory to it of all FAL which supports or is intended to support the Corporate Members;
(vii)    none of the circumstances specified in Clause 21 ( Illegality ) is subsisting; and
(viii)    no Event of Default or Potential Event of Default has occurred or will arise following the issuance of that Letter of Credit.

(b)     Condition Subsequent : It shall be a condition of the continuing effectiveness of any Letter of Credit that the following condition subsequent is satisfied:

(i)    The Account Party shall provide, within five Business Days of 1 December 2017, evidence of all Funds at Lloyd's supporting each Corporate Member as at that date.

3.5
Waiver of conditions precedent
The Issuing Bank may, with the prior approval of all of the Banks, issue any Letter of Credit notwithstanding that one or more of the relevant conditions precedent specified above remains unsatisfied on the Issuance Date of that Letter of Credit and, if it does so, the Agent shall notify the Obligors in writing of the conditions precedent that remain unsatisfied, and the Obligors shall procure the satisfaction of such conditions precedent within 14 days thereafter or such longer period as the Agent may agree in writing with the consent of all of the Banks.

3.6
Order of application of Funds at Lloyd’s
Subject to the duties of Lloyd’s as trustee of all such FAL and to any conditions and requirements prescribed under the Membership Byelaw (No. 5 of 2005) which are for the time being applicable, the Obligors shall use all reasonable endeavours to ensure that the FAL of any Corporate Member will be applied in the following order of application:
 
(a)
FIRST: the Primary FAL in respect of such Corporate Member; and
(b)
SECOND: only after the Primary FAL in respect of such Corporate Member has been exhausted, the Letters of Credit which are available to be applied in relation to the business of such Corporate Member.

It is agreed that any drawings under the Letters of Credit pursuant to Clause 3.6(b) will be treated as being applied first from the Secured Portion of the Letters of Credit and second, only after the Secured Portion of the Letters of Credit has been exhausted, from the Unsecured Portion of the Letters of Credit.
3.7
Letter of Comfort
Each Corporate Member that is an Obligor shall, and the Account Party shall procure that each Corporate Member will, use all reasonable endeavours to obtain from Lloyd’s (after consultation with the Agent), no later than 5 Banking Days after each of:
 
(a)
the Coming Into Line Date for each new year of account provided that, in the case of the 2017 Coming Into Line Date, this shall only apply to ACML and ACM2L;
(b)
the relevant date prescribed by Lloyd’s for the purposes of mid-year coming into line;



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(c)
any date on which any Letter of Credit is issued or there is any change in the face value of any Letter of Credit;
(d)
any date on which any cash or assets are added to or withdrawn from its Primary FAL for purposes of coming-into-line or by way of the release of excess FAL;
(e)
any date on which any person who is not then a third party depositor of any FAL included in its Primary FAL transfers cash or assets to Lloyd’s to form part of its Primary FAL; and
(f)
any date on which: (i) any letter of credit other than a Letter of Credit is added to its Primary FAL; or (ii) any letter of credit which forms part of its Primary FAL is released by Lloyd’s;
one or more letters of comfort addressed to it setting out a requested order, acceptable to the Agent in view of the intention expressed in Clause 3.6, of application of its FAL in respect of Lloyd’s obligations allocable to each year of account of any Syndicate of which it is a member for the time being remaining open, and shall send a copy of each such letter of comfort to the Agent.
 
3.8
Application required
 
(a)
If the Account Party wishes the Issuing Bank (on behalf of the Banks) to issue a Letter of Credit on behalf of one or more of the Corporate Members, it must make its Application and give it to the Agent not later than 10:00 a.m. London time two Banking Days before the proposed Issuance Date (or, in respect of the first Application only, not later than 12:00 p.m. London time on the Banking Day before the proposed Issuance Date). Each Application shall be effective on receipt by the Agent.

(b)
Each Application shall be irrevocable and will not be regarded as having been duly completed unless:
(i)
it specifies that it is for a Letter of Credit;
(ii)
the proposed Issuance Date is a Banking Day within the Commitment Period;
(iii)
the currency and amount of the Letter of Credit applied for are in compliance with Clause 3.3;
(iv)
the form of Letter of Credit is attached; and
(v)
the delivery instructions for the Letter of Credit are specified.
3.9
Condition of effectiveness of Applications
No Application made pursuant to Clause 3.8 (Application required) shall be considered effective until all the applicable conditions precedent set out in Clause 3.4 ( Conditions precedent and subsequent) have been satisfied.
 
3.10
Issuance of Letters of Credit
 
(a)
Subject to the provisions of this Agreement and, in particular, but without limitation, Clause 2.1, the Issuing Bank (on behalf of the Banks) will issue each Letter of Credit on the applicable Issuance Date in accordance with the Application made by the Account Party.
(b)
The amount of each Bank’s participation in each Letter of Credit will be equal to the proportion borne by its Commitment to the Aggregate Commitment immediately prior to the issuance of the Letter of Credit.
(c)
Where, as provided in Clause 3.12(a)(i), an Application requests that a new Letter of Credit is issued on the basis that it will replace an existing Letter of Credit, the Issuing Bank may in its discretion decline to issue such new Letter of Credit if, acting reasonably, it is not satisfied that it will receive the existing Letter of Credit for cancellation within three Banking Days after the issue of the new Letter of Credit.



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(d)
If the conditions set out in this Agreement have been met, the Issuing Bank shall notify the Banks of the Application and confirm satisfaction of such conditions and the Issuing Bank is hereby authorised to arrange for the issue or amendment of any Letter of Credit by:
(i)
completing the Commencement Date (as defined therein), and the other items marked in square brackets in such Letter of Credit;
(ii)
completing the schedule to such Letter of Credit with the percentage participation of each Bank as allocated pursuant to the terms hereof;
(iii)
with the prior consent of all of the Banks, amending such Letter of Credit in such manner as Lloyd’s may agree; and
(iv)
executing such Letter of Credit on behalf of each Bank and following such execution delivering such Letter of Credit to Lloyd’s on the Issuance Date.
(e)
The Issuing Bank shall notify each Bank, no later than two Banking Days prior to the proposed Issuance Date (or by such shorter time as may be agreed to by all of the Banks), of the Letter of Credit that is to be issued by the Issuing Bank on behalf of the Banks, the proposed term, the aggregate principal amount of the Letter of Credit and the amount of the Letter of Credit allocated to such Bank pursuant to this Agreement.

3.11
Applied Letters of Credit
If, notwithstanding the provisions of Clause 14.1(a), any sum is paid under a Letter of Credit (an “ Applied Letter of Credit ”) before the Primary FAL have been applied to the fullest extent possible, the relevant Corporate Member shall, at the request of the Agent and to any extent necessary to facilitate the indemnification of each Bank by such Corporate Member under Clause 5 ( Reimbursement and indemnities ), use all reasonable endeavours to procure the release by Lloyd’s of the Primary FAL and, upon each Bank being indemnified in full thereunder (and subject to receiving confirmation that no Event of Default or Potential Event of Default is then continuing):
 
(a)
a supplementary Letter of Credit will be issued in an amount equal to the sum paid under the Applied Letter of Credit and having an expiry date which is the same as that of the Applied Letter of Credit; or

(b)
the Applied Letter of Credit will be amended by increasing the amount thereof by an amount equal to the sum so paid.
3.12
Changes to issued Letters of Credit
 
(a)
Subject to there being no Event of Default or Potential Event of Default which is continuing, and subject to confirmation from Lloyd’s in a form satisfactory to the Agent that it will permit the same, the Account Party may request the Issuing Bank to:
(i)
replace an issued Letter of Credit, on terms whereby an existing Letter of Credit will be released for cancellation substantially simultaneously with the issue of a new Letter of Credit, by including the appropriate wording (shown in Schedule 5 ( Form of Application )) in the Application for the new Letter of Credit;
(ii)
cancel an issued Letter of Credit by way of an application in the form of Schedule 6 and release the Collateral held by the Custodian in respect of that Letter of Credit in accordance with Clause 11.1;
(iii)
decrease an issued Letter of Credit by way of an application in the form of Schedule 7 and release the Collateral held by the Custodian in accordance with Clause 11.1 to the extent of the reduction in the aggregate face value of that Letter of Credit;
(iv)
subject to Clause 3.2, increase or amend an issued Letter of Credit by way of an application in the form of Schedule 8; or



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(v)
subject to Clause 2.6, extend the expiry date of an issued Letter of Credit by way of an application in the form of Schedule 9.
(b)
The Issuing Bank shall act on a request of the Account Party under Clause 3.12(a) within four Banking Days of its receipt of that request provided that, in the case of a request for the replacement of a Letter of Credit, an increase in the amount of a Letter of Credit or the extension of the expiry date of a Letter of Credit:
(i)
the Account Party has deposited Collateral in accordance with Clause 11.1 in respect of any increase to the aggregate face value of the new or amended Letter of Credit;
(ii)
the Agent has received payment of the fees, costs and expenses specified in Clause 18 or in any other Finance Document to the extent due and payable;
(iii)
the Repeating Representations are true and correct in all material respects at the date of the request and will, so far as any Obligor is aware, be true and correct in all material respects on the proposed effective date (as provided in paragraph (c) below) of the increase or extension of the Letter of Credit, or on the proposed Issuance Date of the replacement Letter of Credit, as applicable;
(iv)
none of the circumstances specified in Clause 21 ( Illegality ) is subsisting;
(v)
the Account Party has confirmed in its request under Clause 3.12(a) that no Event of Default or Potential Event of Default has occurred or, so far as it is aware, will arise on or before the proposed effective date (as provided in paragraph (c) below) of the increase or extension of the Letter of Credit, or on or before the proposed Issuance Date of the replacement Letter of Credit, as applicable; and
(vi)
the request is made on, and is due to take effect on, a Banking Day within the Commitment Period.
(c)
Where the Issuing Bank acts on a request of the Account Party under Clause 3.12(a), such cancellation, increase, decrease or extension shall take effect, for all purposes under this Agreement:
(i)
in respect of an increase or extension of expiry date or other amendment, as from the day on which the Issuing Bank gives notice to Lloyd’s of the relevant change; and
(ii)
in respect of a decrease or cancellation, as from the day on which Lloyd’s confirms in writing to the Issuing Bank that it agrees to the relevant change.
3.13
Termination
The Issuing Bank shall be entitled at any time to give, and, unless otherwise agreed by all the Banks and subject to any extension pursuant to Clause 3.12(a)(v)), shall give by 31 July 2018, a notice terminating any Letter of Credit on 31 July 2022.
4.
C ONDITIONS  A PPLICABLE   TO  L ETTERS   OF  C REDIT
 
4.1
Terms of Letters of Credit
Each Letter of Credit shall be in the form of Schedule 4 ( Form of Letter of Credit ) unless otherwise agreed by all of the Banks.

4.2
Authority to Banks to pay
Each Bank is hereby authorised, without any further reference to or further authority from any Obligor, to pay or accept for the account of the Obligors all drafts, demands or other instruments whatsoever drawn or made or purporting to be drawn or made under any Letter of Credit and which appears on its face to be in order.
 
4.3
Role of Issuing Bank
 



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(a)
Nothing in this Agreement constitutes the Issuing Bank a trustee or fiduciary of any other Person. The Issuing Bank shall not be bound to account to any Bank for any sum or the profit element of any sum received by it for its own account.
(b)
Upon receiving notice of any demand for payment under a Letter of Credit, the Issuing Bank shall notify the Banks, and each Bank shall assume responsibility for the performance of its obligations under the Letter of Credit in respect of the demand.
(c)
Save to the extent of its own payment obligation in its capacity as a Bank, the Issuing Bank shall have no obligation to make any payment in respect of any demand for payment under a Letter of Credit, and in particular the Issuing Bank shall not be required to fund any part of the obligations of any other Bank in respect of any such demand.
(d)
The Issuing Bank may:
(i)
accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group;
(ii)
rely on any representation, notice or document believed by it to be genuine, correct and appropriately authorised and any statement made by a director, authorised signatory or employee of any Person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify; or
(iii)
engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.
(e)
The Issuing Bank is not responsible for:
(i)
the adequacy, accuracy and/or completeness of any information (whether oral or written) provided by any Bank or Obligor, the transactions contemplated by this Agreement or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with this Agreement; or
(ii)
the legality, validity, effectiveness, adequacy or enforceability of this Agreement or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with this Agreement.
4.4
Exclusion of Bank’s liability
 
(a)
Each Letter of Credit shall be opened entirely at the risk of the Obligors.

(b)
Any action taken or omitted by the Issuing Bank or any of its correspondents or agents under or in connection with any Letter of Credit, if taken or omitted in good faith and in the absence of gross negligence or wilful misconduct, shall be binding on Obligors and shall not place the Issuing Bank under any liability to the Obligors.

(c)
Without prejudice to the provisions of Clause 4.4(b), in the event of any uncertainty or ambiguity in any instructions given to the Issuing Bank, the Issuing Bank may, at its discretion, either (a) act upon its understanding of the meaning of such instructions, or (b) take no action until the relevant Obligor upon written request by the Issuing Bank clarifies such instructions to the Issuing Bank’s satisfaction. The Issuing Bank shall not be held liable for any losses incurred by any Obligor as a result of any action which the Issuing Bank takes in the light of such instructions.

(d)
No Bank or Obligor (other than the Issuing Bank) may take any proceedings against any officer, employee or agent of the Issuing Bank in respect of any claim it might have against the Issuing Bank or in respect of any act or omission of any kind by that officer, employee or agent in relation to this Agreement.
4.5
Propriety of demand



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The Issuing Bank shall be entitled to rely without further enquiry on any demand, claim, document or other communication believed by it in good faith to be genuine and correct and to have been signed or otherwise executed or made by the proper Person and otherwise to be in conformity with the relevant Letter of Credit.
 
4.6
Incorporation of ISP 98 and conditions of Application
The Obligors agree that the International Standby Practices (ISP 98 - Publication No. 590) and the conditions of the relevant Application shall apply to each Letter of Credit. In the case of any conflict between the provisions of this Agreement on the one hand and that publication and/or of the Application on the other, the provisions of this Agreement shall prevail.
5.
R EIMBURSEMENT   AND   INDEMNITIES
 
5.1
Reimbursement
If any Bank pays any amount under a Letter of Credit then the Obligors shall, immediately, as their joint and several obligation, be obliged to make payment to the Agent (as recipient on behalf of such Bank) of the amount so paid by such Bank.
 
5.2
Obligors’ Indemnity
Without limiting Clause 5.1, the Obligors shall, as their joint and several obligation, indemnify each Finance Party and hold it harmless from and against all claims, demands, actions, losses, liabilities, damages, costs, expenses, fees, commissions, charges and other sums of whatsoever nature (including legal fees and expenses on a full indemnity basis) which it may incur or pay in connection with any Letter of Credit (otherwise than by such Finance Party’s fraud, misconduct or negligence). No Obligor will be entitled to any right of contribution or indemnity from any Finance Party in respect of any payment made to it under this Clause 5.
 
5.3
Payments and interest
If the Obligors are liable to make any payment under Clause 5.1 or 5.2, they shall, as their joint and several obligation, be obliged to make such payment to the Agent (as recipient for and on behalf of the relevant Finance Party or Finance Parties) together with interest at the Default Rate on each such amount from the date on which such amount becomes due and payable until the date of payment to the Agent, before or after any relevant judgment.

5.4
Maximum Rate of Interest
In relation to the obligation of the Guarantor under this Agreement, notwithstanding anything to the contrary contained in any Finance Document, the interest paid or agreed to be paid under the Finance Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “ Maximum Rate ”). If the Guarantor is liable in relation to interest to be received by any Finance Party in an amount that exceeds the Maximum Rate, the excess interest shall, in relation to the Guarantor only, be applied to any other Outstanding Indebtedness or, if and as long as it exceeds the other Outstanding Indebtedness, the Guarantor shall not be liable for such excess interest under this Agreement. In determining whether the interest contracted for, charged or received by a Finance Party exceeds the Maximum Rate, such Person may, to the extent permitted by applicable law, (i) characterise any payment that is not principal as an expense, fee or premium rather than interest, (ii) exclude voluntary prepayments and the effects thereof, and (iii) amortise, prorate, allocate and spread in equal or unequal parts the total amount of interest throughout the contemplated term of this Agreement.
 
5.5
No requirement to apply Collateral
No Finance Party shall be obliged to apply any Collateral in settlement of any obligation of the Obligors under Clauses 5.1 to 5.3.
 
5.6
Banks’ Indemnities
 



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(a)
Each Bank shall (according to its Commitment) immediately on demand indemnify each Service Bank against any cost, loss or liability incurred by such Service Bank (otherwise than by reason of such Service Bank’s fraud, negligence or misconduct) in acting as a Service Bank in connection with any Letter of Credit (unless such Service Bank has been reimbursed by an Obligor pursuant to a Finance Document).
(b)
The obligations of each Bank under this Clause are continuing obligations and will extend to the ultimate balance of sums payable by that Bank in respect of any Letter of Credit, regardless of any intermediate payment or discharge in whole or in part.
(c)
The obligations of any Bank under this Clause will not be affected by any act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause (without limitation and whether or not known to it or any other Person) including:
(i)
any time, waiver or consent granted to, or composition with, any Obligor, any beneficiary under a Letter of Credit or other Person;
(ii)
the release of any other Obligor or any other Person under the terms of any composition or arrangement with any creditor or any Obligor;
(iii)
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or Security over assets of, any Obligor, any beneficiary under a Letter of Credit or other Person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any Security;
(iv)
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor, any beneficiary under a Letter of Credit or any other Person;
(v)
any amendment (however fundamental) or replacement of a Finance Document, any Letter of Credit or any other document or Security;
(vi)
any unenforceability, illegality or invalidity of any obligation of any Person under any Finance Document, any Letter of Credit or any other document or Security; or
(vii)
any insolvency or similar proceedings.
6.
P AYMENTS
 
6.1
Place of payment
Unless otherwise specified by the Issuing Bank or otherwise provided in this Agreement or any of the other Finance Documents, all moneys to be paid by the Banks to the Issuing Bank or by the Obligors to any Bank under this Agreement and any of the other Finance Documents shall be paid to the Issuing Bank or to the Agent or the Security Trustee as recipient on behalf of the Banks (as the case may be):
 
(a)
by not later than 3:00 p.m. (London time);
(b)
in the case of the reimbursement of a Bank of an amount paid by that Bank in another currency, or interest on such amount, in that currency;
(c)
in the case of any amount not falling in (b), in Sterling; and
(d)
to such account of the Issuing Bank, Agent or Security Trustee as the Issuing Bank, Agent or Security Trustee (as the case may be) shall notify to the Obligors and the Banks in writing from time to time.
6.2
Availability of funds conditional upon receipt by Agent



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No Service Bank shall be obliged to make available to any of the Parties hereto any amount which it is due to receive for the account of that Party unless it is satisfied that it has unconditionally received the funds concerned.
 
6.3
Refunds by Banks
Without prejudice to Clause 6.2, if the Agent or the Issuing Bank or the Security Trustee makes an amount available to a Bank or the Security Trustee which has not (but should have) been paid to the Agent or the Issuing Bank by any Obligor, such Bank or the Security Trustee (as appropriate) shall:
 
(a)
on demand refund such amount to the Agent or the Issuing Bank or the Security Trustee, and

(b)
pay to the Agent or the Issuing Bank or the Security Trustee on demand such further amount (as conclusively certified by the Agent or the Issuing Bank) as shall indemnify the Agent or the Issuing Bank or the Security Trustee against any cost, loss, liability or expense suffered or incurred by the Agent or the Issuing Bank or the Security Trustee as a result of its having made available such amount to that Bank or the Security Trustee (as appropriate) before receiving it from such Obligor.

6.4
Non-Banking Days
All payments due shall be made on a Banking Day. If the due date for payment falls on a day which is not a Banking Day:
 
(a)
the payment or payments due shall be made on the first Banking Day thereafter, provided this falls in the same calendar month; and

(b)
if it does not, payment shall fall due and be made on the immediately preceding Banking Day.
6.5
Accrual of interest and periodic payments
All payments of interest and other payments of an annual or periodic nature to be made by the Obligors shall accrue from day to day and be calculated on the basis of the actual number of days elapsed and a 365 day year.
7.
N O  S ET -O FF , C OUNTERCLAIM   OR  T AX  D EDUCTION
 
7.1
Definitions
 
(a)
In this Clause 7:
Non-U.S. Bank ” means any Bank that is organised under the laws of a jurisdiction other than the United States, each State thereof and the District of Columbia;
Obligor DTTP Filing ” means an HM Revenue & Customs’ Form DTTP2 duly completed and filed by the relevant Obligor, which:
 
(i)
where it relates to a Treaty Bank that is an Original Bank, contains the scheme reference number and jurisdiction of tax residence stated opposite that Bank’s name in Schedule 1 ( Banks and Commitments ), and is filed with HM Revenue & Customs within 30 days of the date of this Agreement; or

(ii)
where it relates to a Treaty Bank that is a Transferee Bank, contains the scheme reference number and jurisdiction of tax residence stated in respect of that Bank in the relevant Transfer Certificate, and is filed with HM Revenue & Customs within 30 days of the relevant Transfer Date;
Protected Party ” means a Finance Party which is or will be subject to any liability or required to make any payment for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document;




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Qualifying Bank ” means a Bank which is beneficially entitled to interest payable to that Bank in respect of an advance under a Finance Document and is:
 
(i)
a Bank:
(1)
which is a bank (as defined for the purpose of section 879 of the ITA) making an advance under a Finance Document and is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance or would be within such charge as respects such payments apart from section 18A of the CTA; or

(2)
in respect of an advance made under a Finance Document by a person that was a bank (as defined for the purpose of section 879 of the ITA) at the time that that advance was made and within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance; or

(ii)
a Bank which is:
(1)
a company resident in the United Kingdom for United Kingdom tax purposes;

(2)
a partnership each member of which is:
(aa) a company so resident in the United Kingdom; or
(bb) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA;

(3)
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company;

(4)
a Treaty Bank; or

(5)
a Bank which is a building society (as defined for the purpose of section 880 of the ITA).
Tax Confirmation ” means a confirmation by a Bank that the person beneficially entitled to interest payable to that Bank in respect of an advance under a Finance Document is either:
 
(i)
a company resident in the United Kingdom for United Kingdom tax purposes;
(ii)
a partnership each member of which is:
(1)
a company so resident in the United Kingdom; or
(2)
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or
(iii)
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.
Treaty Bank ” means a Bank which:
 
(i)
is treated as a resident of a Treaty State for the purposes of the Treaty;



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(ii)
does not carry on a business in the United Kingdom through a permanent establishment with which that Bank’s participation in the Facility is effectively connected; and
(iii)
fulfils any conditions which must be fulfilled under the Treaty (as defined below) for residents of that Treaty State to obtain exemption from United Kingdom taxation on interest, except that for this purpose it is assumed that there are fulfilled:
(1)
any condition contained in the Treaty which relates to the amount or terms of the Facility or to there being a special relationship between the Account Party and a bank or between both of them and another person by reason of which the amount of interest paid exceeds the amount which would have been paid in the absence of such relationship; and
(2)
any necessary procedural formalities.
Treaty State ” means a jurisdiction having a double taxation agreement (a “ Treaty ”) with the United Kingdom which makes provision for full exemption from tax imposed by the United Kingdom on interest.
 
(b)
Unless a contrary indication appears, in this Clause 7 a reference to “determines” or “determined” means a determination made in the absolute discretion of the person making the determination.
7.2
No set-off or counterclaim
All payments to be made by an Obligor under this Agreement and any of the other Finance Documents shall be made:
 
(a)
without set-off or counterclaim; and

(b)
free and clear of, and without, any Tax Deduction unless the Obligor is required by law to make a Tax Deduction.
7.3
Gross-up
If an Obligor is required by law to make any Tax Deduction:
 
(a)
such Obligor shall promptly notify the Agent upon becoming aware of such requirement;

(b)
such Obligor shall pay the Finance Party to which the payment in respect of which such Tax Deduction is made such additional amounts as may be necessary to ensure that the Finance Party receives (after any Tax Deduction has been made, including any deductions applicable to additional sums payable under this Clause 7.3) a net amount equal to the full amount which that Finance Party would have received had the payment not been subject to such a Tax Deduction; and

(c)
such Obligor shall make such a Tax Deduction and any payment required in connection with it within the time allowed, and in the minimum amount required, by law.
For the avoidance of doubt, a Tax Deduction made specifically with respect to any U.S. withholding Tax (other than a FATCA Deduction) shall constitute a Tax Deduction for purposes of this Clause 7 (No Set-Off, Counterclaim or Tax Deduction ).
 
7.4
Exceptions to gross-up
 
(a)
A payment shall not be increased under Clause 7.3 above by reason of a Tax Deduction on account of Tax imposed by the United Kingdom, if on the date on which the payment falls due:
(i)
the payment could have been made to the relevant Bank without a Tax Deduction if the Bank had been a Qualifying Bank, but on that date that Bank is not or has ceased to be a Qualifying Bank other than as a result of any change after the date it became a Bank under this Agreement in (or in the interpretation, administration, implementation or application of) any law or Treaty, or any published practice or published concession of any relevant taxing authority; or



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(ii)
the relevant Bank is a Qualifying Bank solely by virtue of paragraph (ii) of the definition of Qualifying Bank; and:
(1)
an officer of H.M. Revenue & Customs has given (and not revoked) a direction (a “ Direction ”) under section 931 of the ITA which relates to the payment and that Bank has received from the Obligor making the payment or from the Account Party a certified copy of that Direction; and
(2)
the payment could have been made to the Bank without any Tax Deduction if that Direction had not been made; or
(iii)
the relevant Bank is a Qualifying Bank solely by virtue of paragraph (ii) of the definition of Qualifying Bank and:
(1)
the relevant Bank has not given a Tax Confirmation to the Account Party; and
(2)
the payment could have been made to the Bank without any Tax Deduction if the Bank had given a Tax Confirmation to the Account Party, on the basis that the Tax Confirmation would have enabled the Account Party to have formed a reasonable belief that the payment was an “excepted payment” for the purpose of section 930 of the ITA; or
(iv)
the relevant Bank is a Treaty Bank and the Obligor making the payment is able to demonstrate that the payment could have been made to the Bank without the Tax Deduction had that Bank complied with its obligations under Clause 7.5(b) below.

7.5
Obligations in respect of Tax Deductions
 
(a)
Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment a statement under section 975 of the ITA or other evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

(b)
    
(i)
Subject to paragraph (ii) below, a Treaty Bank and each Obligor which makes a payment to which that Treaty Bank is entitled shall co-operate in completing any procedural formalities necessary for that Obligor to obtain authorisation to make that payment without a Tax Deduction.
(ii)
    
(1)
A Treaty Bank which becomes a Party on the day on which this Agreement is entered into that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence opposite its name in Schedule 1 (Banks and Commitments ); and
(2)
a Transferee Bank that is a Treaty Bank that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence in the Transfer Certificate which it executes,
and, having done so, that Bank shall be under no obligation pursuant to paragraph (i) above.
 
(c)
If a Bank has confirmed its scheme reference number and its jurisdiction of tax residence in accordance with paragraph (b)(ii) above and:




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(i)    an Obligor making a payment to that Bank has not made an Obligor DTTP Filing in respect of that Bank; or

(ii)    an Obligor making a payment to that Bank has made an Obligor DTTP Filing in respect of that Bank but:
(1) that Obligor DTTP Filing has been rejected by HM Revenue & Customs; or

(2)
HM Revenue & Customs has not given the Obligor authority to make payments to that Bank without a Tax Deduction within 60 days of the date of the Obligor DTTP Filing,
and in each case, the Obligor has notified that Bank in writing, that Bank and the Obligor shall co-operate in completing any additional procedural formalities necessary for that Obligor to obtain authorisation to make that payment without a Tax Deduction.
 
(d)
If a Bank has not confirmed its scheme reference number and jurisdiction of tax residence in accordance with paragraph (b)(ii) above, no Obligor shall make an Obligor DTTP Filing or file any other form relating to the HMRC DT Treaty Passport scheme in respect of that Bank's Commitment(s) or its participation in any Letter of Credit unless the Bank otherwise agrees.
 
(e)
An Obligor shall, promptly on making an Obligor DTTP Filing, deliver a copy of that Obligor DTTP Filing to the Agent for delivery to the relevant Bank.
7.6
Tax Indemnity
 
(a)
Except as provided below, each Obligor must indemnify each Protected Party against any loss or liability which that Protected Party determines will be or has been suffered (directly or indirectly) by it for or on account of Tax in relation to a payment received or receivable (or any payment deemed to be received or receivable) under a Finance Document. Such Obligor shall (within ten days of demand by the Agent) pay to that Protected Party an amount equal to such loss or liability.

(b)
Clause 7.6(a) above does not apply to (and no Obligor shall be required under this Agreement to indemnify or compensate any Protected Party for):

(i)
any Tax assessed on a Protected Party:

(1)
under the laws of the jurisdiction in which that Protected Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Protected Party is treated as resident for tax purposes; or

(2)
under the laws of the jurisdiction in which that Protected Party’s facility office is located in respect of amounts received or receivable in that jurisdiction;
if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any payment deemed to be received or receivable) by that Protected Party (but any amount treated as income but not actually received by the Protected Party, such as a Tax Deduction, will not be treated as net income received or receivable for this purpose); and
 
(ii)
any loss, liability or cost to the extent it:

(1)
is compensated for by an increased payment under Clause 7.3;

(2)
would have been compensated for by an increased payment under Clause 7.3 but was not so compensated solely because one of the exclusions in Clause 7.4 applied; or

(3)
relates to a FATCA Deduction required to be made by a Party.

(c)
If the Agent on behalf of a Protected Party makes (or intends to make) a claim under Clause 7.6(a), it shall promptly notify each Obligor of the event which has caused (or will cause) that claim.



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7.7
Tax Credit
If an Obligor makes a Tax Payment and the relevant Protected Party determines that:
 
(a)
a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required; and

(b)
that Protected Party has obtained and utilised that Tax Credit in whole or in part,

the Protected Party shall pay an amount to the Obligor which that Protected Party in its sole and absolute discretion determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor. This Clause 7.7 shall not apply if the Protected Party has reasonably determined that its actual or probable administration efforts or other resources or costs involved in making the necessary determinations are disproportionate to the amount otherwise payable by it under this Clause 7.7.
 
7.8
Bank Status Confirmation
 
(a)
Each Bank which becomes a Party to this Agreement after the date of this Agreement shall indicate, in the Transfer Certificate which it executes on becoming such a Party, and for the benefit of the Agent and without liability to any Obligor, which of the following categories it falls in:
(i)
not a Qualifying Bank;
(ii)
a Qualifying Bank (other than a Treaty Bank);
(iii)
a Treaty Bank.
(b)
If a Bank fails to indicate its status in accordance with this Clause 7.8 then such Bank shall be treated for the purposes of this Agreement (including by each Obligor) as if it is not a Qualifying Bank until such time as it notifies the Agent which category applies (and the Agent upon receipt of such notification shall inform the Account Party). For the avoidance of doubt, a Transfer Certificate shall not be invalidated by any failure of a Bank to comply with this Clause 7.8.
7.9
VAT
 
(a)
All amounts expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to paragraph (b) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply), upon receipt from such Finance Party of a valid VAT invoice raised in accordance with the requirements of the Value Added Tax Act 1994, an amount equal to the amount of the VAT.

(b)
If VAT is or becomes chargeable on any supply made by any Finance Party (the “ Supplier ”) to any other Finance Party (the “ Recipient ”) under a Finance Document, and any Party other than the Recipient (the “ Relevant Party ”) is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):
(i)
(where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this paragraph (i) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient is entitled to receive from the relevant tax authority in relation to the VAT chargeable on that supply; and

(ii)
(where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the



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Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.

(c)
Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represen