EXHIBIT 10.29
INSURANCE LETTERS OF CREDIT - MASTER AGREEMENT
To: Citibank, N.A, Form 3
000 Xxxxxx
Xxxxxx, XX0X 0XX
Dear Sirs,
INSURANCE LETTERS OF CREDIT - MASTER AGREEMENT
INSURANCE/REINSURANCE COMPANIES OR BROKERS
The Purpose of this letter is to record our agreement (the "Agreement") to the
following method of establishing letters of credit or similar or equivalent
instruments acceptable to you (each a "Credit" and collectively "the Credits")
on our behalf in favour of beneficiaries located in the United States of America
or elsewhere. In connection with this Agreement, we have also separately agreed
with you the contractual or security arrangements that will apply in respect of
our obligations under or pursuant to this Agreement.
1. It is agreed between us in relation to each Credit that:-
(a) you will, upon receipt of an application form for the establishment
of a letter of credit in such form as you may be willing to accept
for this purpose and which may, without limitation, be received by
you via any electronic system(s) or transmission arrangement(s)
acceptable to you (referred to in this Agreement in relation to any
Credit as an "application form" ) completed by us or on our behalf
in accordance with the terms of our banking mandate(s) or other
authorities lodged with you or arrangement(s) made with you from
time to time and indicating therein the name of the beneficiary and
the amount and term of the Credit required, establish on our behalf
an irrevocable clean sight Credit (or such other form of Credit as
may be required by the application form relating thereto) available,
in whole or in part, by the beneficiary's sight draft on Citibank
N.A. or otherwise as may be required by the terms of the Credit;
provided, however, that the opening of any Credit hereunder shall,
in every instance, be at your option and nothing herein shall be
construed as obliging you to open any Credit;
(b) we undertake to reimburse you, on demand, the amount of any and all
drawings under the Credit;
(c) we undertake to indemnify you, on demand, for and against all
actions, proceedings, losses, damages, charges, costs, expenses,
claims and demands which you may incur, pay or sustain by reason of
or arising in any way whatsoever (apart from your own gross
negligence or wilful misconduct) in connection with each Credit
and/or this Agreement;
(d) we undertake to pay to you, on demand, such fees and/or commissions
of such amount(s) and/or at such rate(s) as shall have been or as
may be advised by you to us as payable in connection with each
Credit;
(e) we hereby irrevocably authorise you to make any payments and comply
with any demands which may be claimed from or made upon you in
connection with each Credit without any reference to or further
authority from us and we hereby agree that it shall not be incumbent
upon you to enquire or to take notice whether or not any such
payments or demands claimed from or made upon you in connection with
each Credit are properly made or to enquire or to take notice
whether or not any dispute exists between ourselves and the
beneficiary thereof and we further agree that any payment which you
shall make in accordance with the terms and conditions of each
Credit shall be binding upon us and shall be accepted by us as
conclusive evidence that you were liable to make such payment or
comply with such demand; and
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(f) we represent and warrant to you and undertake that:-
(i) we have and will at all times have the necessary power to
enable us to enter into and perform the obligations expressed
to be assumed by us under this Agreement;
(ii) this Agreement constitutes our legal, valid, binding and
enforceable obligation effective in accordance with its terms;
and
(iii) all necessary authorisations to enable or entitle us to enter
into this Agreement have been obtained and are in full force
and effect and will remain in such force and effect at all
times during the subsistence of this Agreement.
2. Where an application form has been completed by or on behalf of any other
applicant(s) with whom you have entered into an agreement similar or
equivalent in effect to this Agreement, and a separate application form
has been completed by us or on our behalf which corresponds, in your
opinion with such other application form (or any other combination of
circumstances exist which, in your opinion, are reasonably equivalent to
the foregoing) then you shall be at liberty to open a single Credit on
behalf of ourselves and such other applicant(s) jointly and in that event
the following provisions shall apply:-
(a) our obligations pursuant to paragraph 1(b) above shall be in respect
of our due proportion of each drawing under any such Credit;
(b) in establishing our due proportion of each drawing under any such
Credit you are hereby irrevocably authorised to make apportionment's
between ourselves and such other applicant(s) (i) on a pro rata
basis by reference to the amounts set forth in the application forms
originally completed by us and them in respect of such Credit (and
after taking into account any subsequent increases or decreases in
such Credit effected by you for our or their respective accounts)
or, if you should so choose (ii) in reliance on the instructions and
advice of and information provided by the relevant Insurance Broker
(construed in accordance with paragraph 3 below); and
(c) for the purposes of paragraph 1(c) above, you may make any required
apportionments in such manner as you, in your sole discretion,
consider to be fair and reasonable.
3. You may refer any query or problem arising in connection with this
Agreement or any transaction hereby contemplated to the relevant Insurance
Broker or respond to any question relating to the status of any Credit
made by the relevant Insurance Broker (and, in such response, if you
consider that it is material to make reference to the subject matter of
any other agreement(s) now or hereafter entered into between us in
connection with this Agreement, you may disclose such information relating
thereto as you in your sole discretion consider to be appropriate). For
the purpose of this Agreement, references to the relevant Insurance Broker
shall be construed so as to mean the insurance broker or other
intermediary (a) through whom you originally received the application form
relating to the Credit in question (or the person(s) who purport to have
succeeded to the business thereof) or (b) which, in your opinion, acts in
connection with such Credit.
4.
(a) Any Credit established hereunder may, if requested by us on the
application form relating thereto and subject to your consent, bear
a clause to the effect that it will automatically be extended for
successive periods of one year (or such other period as may be
stated in the relevant application form) unless the beneficiary has
received from the bank or institution issuing the Credit ("the
Issuing Bank") by registered mail (or other appropriate receipted
delivery) notification of intention not to renew such Credit at
least 30 days (or such other period as may be stated in the relevant
application form) ("the notice period") prior to the end of the
original term or, as the
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case may be, of a period of extension. The Issuing Bank shall be
under no obligation to us to send the beneficiary such notification
(and without such notification to the beneficiary the Credit will be
automatically extended as provided above) unless you shall have
received at your branch at 000 Xxxxxx, Xxxxxx, XX0X 0XX (or such
other branch in England as may be advised to us by you for such
purpose) by registered mail or other means acceptable to you
notification from us (or from any one or more of the other parties
(if any) for whose account(s) such Credit may also have been
established as contemplated by paragraph 2 above) of our or its
election not to renew such Credit at least 30 days prior to the
commencement of the notice period relating to the original term or,
as the case may be, a period of extension; provided however that you
will, as soon as is reasonably possible, give us advice of the
receipt by you of any such notice from any other such parties. We
understand that receipt by you of any such notice may result in the
whole of such Credit being cancelled (and not just the portion
attributable to us in the case of a joint credit as referred to in
paragraph 2 above) and, save as is provided above, you reserve the
right, at your sole option and discretion, to give or procure the
giving at any time to the beneficiary of notification of intention
not to renew any Credit and that if you exercise such said right you
will give us notice in writing thereof as soon as is reasonably
possible.
(b) If, in either of the circumstances referred to in sub-paragraph (a)
above, the Issuing Bank has given notification not to renew such
Credit, then you may (but shall not be obliged to) without further
authority from us (or from any of the other persons as aforesaid)
arrange for the beneficiary to accept (1) a substitute Credit ("the
Substitute Credit") from the Issuing Bank on terms identical to such
Credit except that (i) the amount of the Substitute Credit will be
equal to the then undrawn face value of such Credit less the portion
thereof (determined by you ) to be attributable to the person (s)
("the excluded Person(s)") who gave a notice of non-renewal to you
or, as the case may be, for whom you do not wish to arrange the
issuance of the Substitute Credit and (ii) the original term of the
Substitute Credit will, subject to renewal as mentioned in
sub-paragraph (a) above, be up to one year in duration (or such
longer duration as may be required by any regulatory or other
authority having jurisdiction as to the acceptability of the
Substitute Credit) OR (2) such other arrangement, compromise,
release or waiver as, in your sole opinion, will result in the same
effect being achieved as in (1) above. You will, as soon as
reasonably possible, advise us (unless we are the or one of the
Excluded Person(s)) of the matter(s) effected by you pursuant to the
foregoing provisions.
5. You may, at your sole option, arrange for the issuance of any Credit as
being subject to either (i) the Uniform Customs and Practice for
Documentary Credits (1993 Revision) ICC Publication No. 500 or (ii) the
International Standby Practices 1998, (or any subsequent version of
either); provided however that you may agree such modifications thereof as
may be required by any regulatory or other authority having jurisdiction
as to the acceptability of the Credit in question.
6. Unless otherwise agreed between us in writing, the previous agreement(s)
entered into between us governing Credits (other than those at any time
governed by a "Master Agreement - London Market Letter of Credit Scheme")
established by Citibank, N.A. on our behalf in favour of United States or
other beneficiaries shall, excepting details of the beneficiary, amount
and tenor, on acceptance by you of this letter duly executed by us, cease
to apply to all such Credits established by Citibank, N.A. prior to the
date of our signature of this Agreement and all such Credits shall, from
the date of such acceptance be governed by this Agreement.
7. If, at Applicant's request, a Credit expressly chooses a state or country
law other than New York, U.S.A. or English law, or is silent with respect
to the International Chamber of Commerce Publication No. 500 - Uniform
Customs and Practice for Documentary Credits (the "UCP"), the
International Chamber of Commerce Publication No. 590 - International
Standby Practices (the "ISP") or a governing law, Citibank shall not be
liable for any payment, cost, expense or loss resulting from any action or
inaction taken by Citibank if such action or inaction is justified under
UCP, ISP, New York law or English law or the law governing the Credit.
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8. We understand that Citibank, N.A. may carry out any of its obligations
under this Agreement through any offices or branches of Citibank, N.A.
wheresoever situated and may wish to exercise any of its rights under this
Agreement through offices or branches of Citibank, N.A. wheresoever
situated.
9. We further understand that Citibank, N.A. also reserves the right to issue
any Credit through any third party correspondent of its choice and, in
such circumstances, Citibank, N.A. will be required to guarantee
reimbursement to such correspondent of any payments which such
correspondent may make under the Credit in question and such guarantee
(howsoever described) shall also be treated mutatis mutandis as a Credit
for the purpose of this Agreement.
10. The provisions of the foregoing paragraphs shall be equally applicable to
any increase, extension, renewal, partial renewal, modification or
amendment of or substitute instrument for any Credit to which they apply.
If for any reason any amount paid under any Credit is repaid, in whole or
in part, by the beneficiary thereof, you may, in your sole discretion,
treat (or procure the treatment of) such repayment as a reinstatement of
an amount (equal to such repayment) under such Credit. The value date
applied by you to any such reinstatement shall not be earlier than the
date of such repayment and you shall not be liable for any loss of any
nature which we may suffer or incur and which may arise from any
inadvertent or erroneous drawing.
11. Any notice or demand required to be served on us by you hereunder may be
served (a) on any of our officers personally and left at our registered
office or at any one of our principal places of business or (b) by posting
the same by letter addressed in any such manner as aforesaid to such
registered office or any such principal place of business or (c) by telex
or facsimile addressed in any such manner as aforesaid to any then
published telex or facsimile number of ourselves. Any notice or demand:-
(i) sent by post in accordance with this paragraph to any address in the
United Kingdom shall be deemed to have been served on us at 10am.
(London time) on the business day next following the date of posting
or, in the case of an address outside the United Kingdom, shall be
deemed to have been served on us at 10am. (London time) on the third
business day next following and exclusive of the date of posting; or
(ii) sent by telex or facsimile in accordance with this paragraph shall
be deemed to have been served on us when despatched.
In proving such service by post it shall be sufficient to show that the
letter containing the notice or demand was properly addressed and posted
and such proof of service shall be effective notwithstanding that the
letter was in fact not delivered or was returned undelivered.
12. You shall have a full and unfettered right to (a) assign the whole or any
part of the benefit of or (b) (subject to Clause 13 below) novate your
rights and obligations under this Agreement. The words "you" and "your"
wherever used herein shall be deemed to include your assignees and
novatees and other successors, whether immediate or derivative, who shall
be entitled to enforce and proceed upon this Agreement in the same manner
as if named herein. You shall be entitled to impart any information
concerning us to any such assignee, novatee or other successor or any
participant or proposed assignee, novatee, successor or participant.
13.
13.1 The person who is for the time being liable to perform your obligations
under this Agreement (a "Transferring Bank") shall be entitled to novate
at any time, upon service of a Novation Notice on us, any or all of its
rights and obligations under, and the benefit of, this Agreement to any
Permitted Transferee. With effect from the date on which a notice in the
form attached as Schedule 1 (a "Novation Notice") is executed by the
Transferring Bank and the Permitted Transferee (the "Novation Date"), the
provisions of Clause 13.2 shall have effect (but not otherwise).
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For the purposes of this Clause 13 a "Permitted Transferee" shall mean any
holding company, subsidiary or affiliate of Citibank, N.A.
13.2 With effect from (and subject to the occurrence of) the Novation Date:
(a) the Permitted Transferee shall be bound by the terms of this
Agreement (as novated) in every way as if the Permitted Transferee
were and had been a party hereto in place of the Transferring Bank
and the Permitted Transferee shall undertake and perform and
discharge all your obligations and liabilities under this Agreement
(as novated) whether the same fell or fall to be performed or arose
or arise on, before or after the Novation Date;
(b) we shall release and discharge the Transferring Bank from further
performance of its obligations arising in favour of us on and after
the Novation Date under this Agreement and all claims and demands
whatsoever in respect thereof against the Transferring Bank and we
shall accept the liability of the Permitted Transferee in respect of
such obligations in place of the liability of the Transferring Bank;
(c) the Transferring Bank shall release and discharge us from further
performance of our obligations arising in favour of the Transferring
Bank on and after the Novation Date under this Agreement and all
claims and demands whatsoever in respect thereof by the Transferring
Bank;
(d) we shall be bound by the terms of this Agreement (as novated) in
every way, and we shall undertake and perform and discharge in
favour of the Permitted Transferee each of our obligations whether
the same fell or fall to be performed or arose or arise on, before
or after the Novation Date and expressed to be owed to you.
13.3 Without prejudice to the automatic novation of the Transferring Bank's
rights and obligations pursuant to Clause 13.2 we undertake to sign and
return promptly each acknowledgement of the Novation Notice from time to
time delivered to us promptly following receipt of the same from the
Transferring Bank.
14 This Agreement shall be governed by English law and for your benefit we
hereby irrevocably submit to the jurisdiction of the English Courts in
respect of any dispute which may arise from or in connection with this
agreement. The terms of this Agreement may not be waived, modified or
amended unless such waiver, modification or amendment is in writing and
signed by you nor may we assign any of our rights here under without your
prior written consent.
15 A person who is not a party to this agreement has no rights under this
contract (Rights of Third Parties) Xxx 0000 to enforce any terms of this
Agreement
Yours faithfully
For and on behalf of
ALLIED WORLD ASSURANCE COMPANY, LTD.
*___________________________________
(Full name of Company / Firm)
/s/ X.X. Xxxxxx /s/ X. Xxxxxxx
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X.X. XXXXXX (Signature(s)) X. XXXXXXX
VICE PRESIDENT/TREASURER
Dated Sept. 10, 2002.
Accepted for and on behalf
of Citibank, N.A.
By: [ILLEGIBLE]
Dated: 19/9/02
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