Common use of Collateral Cover Clause in Contracts

Collateral Cover. If: 13.9.1 the financial strength rating of Max Bermuda from AM Best is less than B++, the Account Party must provide collateral cover (or ensure that collateral cover is provided) in the form of Investment Collateral or Cash Collateral and in an amount equal to the face value of each issued Letter of Credit, such collateral cover to be provided within 2 Banking Days of the date on which the relevant financial strength rating becomes less than B++; or 13.9.2 any Obligor or any Relevant Corporate Member reports on its solvency statements prepared by Lloyd’s a solvency deficit in its individual open year of account and the applicable amount is not funded directly at Lloyd’s by depositing cash or similar assets into the relevant Corporate Member’s personal reserves by 30 June and 31 December of the corresponding calendar year, the Account Party must provide collateral cover (or ensure that collateral cover is provided) in the form of Investment Collateral or Cash Collateral in an amount equal to the relevant solvency deficit or residual solvency deficit if part funded, such collateral cover to be provided within 2 Banking Days of 30 June and 31 December of the corresponding calendar year; 13.9.3 notice of termination of a Letter of Credit is served in accordance with the provisions of Clause ý3.10 all amounts payable under such Letter of Credit shall be fully collateralised in the form of Investment Collateral or Cash Collateral within 3 Banking Days following the 31 December of the applicable last year of account except where the appropriate Corporate Member does not provide any underwriting capacity to any Syndicate for the following underwriting year of account, in which case, such collateralisation will only be required from the date falling 18 months after 31 December of the last year of account agreed to have been supported by the applicable Letter of Credit; 13.9.4 the net loss to the Syndicate on any RDS would, without the prior written consent of the Majority Banks (not to be unreasonably withheld of delayed), exceed 20% of the Syndicate’s overall premium limit for the year of account concerned then all amounts payable under each Letter of Credit shall be fully collateralised in the form of Investment Collateral or Cash Collateral within 3 Banking Days of the date on which the relevant net loss would exceed the specified percentage or, if at any time Lloyd’s redefines any existing RDS or prescribes any new RDS which in each case is applicable in respect of the Syndicate, within 30 Banking Days of the date on which the relevant loss would exceed the specified percentage; 13.9.5 other than by the Max Corporate 2 Quota Share Addendum, an Obligor makes or permits to be made any amendment to either of the Quota Share Agreements that shortens the term of the reinsurance thereunder or reduces the reinsurance recoveries thereunder or changes the governing law or jurisdiction thereof or makes or permits to be made any amendment to any Lloyd’s Security and Trust Deed that reduces the sums payable thereunder (other than as required by Lloyd’s) in either case without the prior written consent of the Agent (acting at the direction of the Majority Banks), such consent not to be unreasonably withheld and to be deemed to be granted if not expressly withheld within 20 Banking Days of the request therefor, the Account Party must provide collateral cover in the form of Investment Collateral or Cash Collateral in an amount equal to the face value of each issued Letter of Credit, such collateral cover to be provided within 15 Banking Days of the date of such amendment; (a) it is or becomes unlawful for the Collateral Provider to perform any of its material obligations under either Quota Share Agreement; (b) either Quota Share Agreement is not effective in accordance with its terms or is alleged by the Collateral Provider to be ineffective in accordance with its terms for any reason; (c) the Collateral Provider repudiates or terminates either Quota Share Agreement or evidences an intention to repudiate or terminate either Quota Share Agreement other than as permitted in the Quota Share Assignment in respect of that Quota Share Agreement; (d) the Collateral Provider fails to pay any amount of premium or fees due and payable under the Quota Share Agreement to which it is party within any cure period allowed thereunder or breaches any material term of its Quota Share Agreement; (e) the Collateral Provider ceases, or threatens to cease, to carry on business; or (f) the Collateral Provider does not provide the Agent with a copy of the Max Quota Share Agreement in the form acceptable to the Agent acting reasonably, certified by an officer of the Account Party, by the later of (i) the date falling 3 Banking Days after the Coming Into Line Date in relation to Max Corporate for the 2009 year of account and (ii) the date falling 15 Banking Days after Completion; the Account Party must provide collateral cover (or ensure that collateral cover is provided) in the form of Investment Collateral or Cash Collateral in an amount equal to the face value of each issued Letter of Credit, such collateral cover to be provided within 15 Banking Days of the relevant event.

Collateral Cover. If: 13.9.1 the financial strength rating of Max Alterra Bermuda from AM Best is less than B++, the Account Party must provide collateral cover (or ensure that collateral cover is provided) in the form of Investment Collateral or Cash Collateral and in an amount equal to the face value of each issued Letter of Credit, such collateral cover to be provided within 2 Banking Days of the date on which the relevant financial strength rating becomes less than B++; or 13.9.2 any Obligor or any Relevant Corporate Member reports on its solvency statements prepared by Lloyd’s a solvency deficit in its individual open year of account and the applicable amount is not funded directly at Lloyd’s by depositing cash or similar assets into the relevant Relevant Corporate Member’s personal reserves by 30 June and 31 December of the corresponding calendar year, the Account Party must provide collateral cover (or ensure that collateral cover is provided) in the form of Investment Collateral or Cash Collateral in an amount equal to the relevant solvency deficit or residual solvency deficit if part funded, such collateral cover to be provided within 2 Banking Days of 30 June and 31 December of the corresponding calendar year; 13.9.3 notice of termination of a Letter of Credit is served in accordance with the provisions of Clause ý3.10 3.11 all amounts payable under such Letter of Credit shall be fully collateralised in the form of Investment Collateral or Cash Collateral within 3 5 Banking Days following the 31 December of the applicable last year of account except where the appropriate relevant Corporate Member does not provide any underwriting capacity to any Syndicate for the following underwriting year of account, in which case, such collateralisation will only be required from the date falling 18 months after 31 December of the last year of account agreed to have been supported by the applicable Letter of Credit; 13.9.4 the net loss to the Syndicate on any RDS would, without the prior written consent of the Majority Banks (not to be unreasonably withheld of delayed), exceed 20% of the Syndicate’s overall premium limit for the year of account concerned then all amounts payable under each Letter of Credit shall be fully collateralised in the form of Investment Collateral or Cash Collateral within 3 Banking Days of the date on which the relevant net loss would exceed the specified percentage or, if at any time Lloyd’s redefines any existing RDS or prescribes any new RDS which in each case is applicable in respect of the Syndicate, within 30 Banking Days of the date on which the relevant loss would exceed the specified percentage; 13.9.5 other than by as permitted in the Max Corporate 2 Quota Share AddendumAssignment in respect of that Quota Share Agreement, an Obligor makes or permits to be made any amendment to either any of the Quota Share Agreements that shortens the term of the reinsurance thereunder or reduces the reinsurance recoveries thereunder or changes the governing law or jurisdiction thereof or makes or permits to be made any amendment to any Lloyd’s Security and Trust Deed that reduces the sums payable thereunder (other than as required by Lloyd’s) in either case without the prior written consent of the Agent (acting at the direction of the Majority Banks), such consent not to be unreasonably withheld and to be deemed to be granted if not expressly withheld within 20 Banking Days of the request therefor, the Account Party must provide collateral cover in the form of Investment Collateral or Cash Collateral in an amount equal to the face value of each issued Letter of Credit, such collateral cover to be provided within 15 Banking Days of the date of such amendment; 13.9.6 (a) it is or becomes unlawful for the Collateral Provider a Corporate Member or a Reinsurer to perform any of its material obligations under either Quota Share Agreement; (b) either Quota Share Agreement is not effective in accordance with its terms or is alleged by the Collateral Provider to be ineffective in accordance with its terms for any reason; (c) the Collateral Provider repudiates or terminates either Quota Share Agreement or evidences an intention to repudiate or terminate either Quota Share Agreement other than as permitted in the Quota Share Assignment in respect of that Quota Share Agreement; (d) the Collateral Provider fails to pay any amount of premium or fees due and payable under the Quota Share Agreement to which it is party within any cure period allowed thereunder or breaches any material term of its Quota Share Agreementparty; (e) the Collateral Provider ceases, or threatens to cease, to carry on business; or (f) the Collateral Provider does not provide the Agent with a copy of the Max Quota Share Agreement in the form acceptable to the Agent acting reasonably, certified by an officer of the Account Party, by the later of (i) the date falling 3 Banking Days after the Coming Into Line Date in relation to Max Corporate for the 2009 year of account and (ii) the date falling 15 Banking Days after Completion; the Account Party must provide collateral cover (or ensure that collateral cover is provided) in the form of Investment Collateral or Cash Collateral in an amount equal to the face value of each issued Letter of Credit, such collateral cover to be provided within 15 Banking Days of the relevant event.

Collateral Cover. If: 13.9.1 the financial strength rating of Max Bermuda from AM Best is less than B++, the Account Party must provide collateral cover (or ensure that collateral cover is provided) in the form of Investment Collateral or Cash Collateral and in an amount equal to the face value of each issued Letter of Credit, such collateral cover to be provided within 2 Banking Days of the date on which the relevant financial strength rating becomes less than B++; or 13.9.2 any Obligor or any Relevant Corporate Member reports on its solvency statements prepared by Lloyd’s a solvency deficit in its individual open year of account and the applicable amount is not funded directly at Lloyd’s by depositing cash or similar assets into the relevant Corporate Member’s personal reserves by 30 June and 31 December of the corresponding calendar year, the Account Party must provide collateral cover (or ensure that collateral cover is provided) in the form of Investment Collateral or Cash Collateral in an amount equal to the relevant solvency deficit or residual solvency deficit if part funded, such collateral cover to be provided within 2 Banking Days of 30 June and 31 December of the corresponding calendar year; 13.9.3 notice of termination of a Letter of Credit is served in accordance with the provisions of Clause ý3.10 3.11 all amounts payable under such Letter of Credit shall be fully collateralised in the form of Investment Collateral or Cash Collateral within 3 Banking Days following the 31 December of the applicable last year of account except where the appropriate Corporate Member does not provide any underwriting capacity to any Syndicate for the following underwriting year of account, in which case, such collateralisation will only be required from the date falling 18 months after 31 December of the last year of account agreed to have been supported by the applicable Letter of Credit; 13.9.4 the net loss to the Syndicate on any RDS would, without the prior written consent of the Majority Banks (not to be unreasonably withheld of delayed), exceed 20% of the Syndicate’s overall premium limit for the year of account concerned then all amounts payable under each Letter of Credit shall be fully collateralised in the form of Investment Collateral or Cash Collateral within 3 Banking Days of the date on which the relevant net loss would exceed the specified percentage or, if at any time Lloyd’s redefines any existing RDS or prescribes any new RDS which in each case is applicable in respect of the Syndicate, within 30 Banking Days of the date on which the relevant loss would exceed the specified percentage; 13.9.5 other than by the Max Corporate 2 Imagine Quota Share Addendum, an Obligor makes or permits to be made any amendment to either of the Quota Share Agreements that shortens the term of the reinsurance thereunder or reduces the reinsurance recoveries thereunder or changes the governing law or jurisdiction thereof or makes or permits to be made any amendment to any Lloyd’s Security and Trust Deed that reduces the sums payable thereunder (other than as required by Lloyd’s) in either case without the prior written consent of the Agent (acting at the direction of the Majority Banks), such consent not to be unreasonably withheld and to be deemed to be granted if not expressly withheld within 20 Banking Days of the request therefor, the Account Party must provide collateral cover in the form of Investment Collateral or Cash Collateral in an amount equal to the face value of each issued Letter of Credit, such collateral cover to be provided within 15 Banking Days of the date of such amendment; (a) it is or becomes unlawful for the Collateral Provider to perform any of its material obligations under either Quota Share Agreement; (b) either Quota Share Agreement is not effective in accordance with its terms or is alleged by the Collateral Provider to be ineffective in accordance with its terms for any reason; (c) the Collateral Provider repudiates or terminates either Quota Share Agreement or evidences an intention to repudiate or terminate either Quota Share Agreement other than as permitted in the Quota Share Assignment in respect of that Quota Share Agreement; (d) the Collateral Provider fails to pay any amount of premium or fees due and payable under the Quota Share Agreement to which it is party within any cure period allowed thereunder or breaches any material term of its Quota Share Agreement; (e) the Collateral Provider ceases, or threatens to cease, to carry on business; or (f) the Collateral Provider does not provide the Agent with a copy of the Max Quota Share Agreement in the form acceptable to the Agent acting reasonably, certified by an officer of the Account Party, by the later of (i) the date falling 3 Banking Days after the Coming Into Line Date in relation to Max Imagine Corporate for the 2009 year of account and (ii) the date falling 15 Banking Days after Completion; the Account Party must provide collateral cover (or ensure that collateral cover is provided) in the form of Investment Collateral or Cash Collateral in an amount equal to the face value of each issued Letter of Credit, such collateral cover to be provided within 15 Banking Days of the relevant event.

Collateral Cover. If: 13.9.1 3.7.1 From the financial strength rating of Max Bermuda from AM Best is less than B++first Issuance Date, the Account Party must provide collateral cover (or ensure that collateral cover is provided) shall be provided by the Pledgors in the form of Investment Collateral or Cash Collateral and in an amount so that the Borrowing Base shall be equal to not less than 100% of the aggregate face value amount of each all issued Letter Letters of Credit, such collateral cover to . Such Investment Collateral shall be provided within 2 Banking Days of by the date on which the relevant financial strength rating becomes less than B++; or 13.9.2 any Obligor or any Relevant Corporate Member reports on its solvency statements prepared by Lloyd’s a solvency deficit in its individual open year of account and the applicable amount is not funded directly at Lloyd’s by depositing cash or similar assets into the relevant Corporate Member’s personal reserves by 30 June and 31 December of the corresponding calendar year, the Account Party must provide collateral cover (or ensure that collateral cover is provided) Pledgors in the form of collateral held in the Collateral Account and pledged in favour of the Bank pursuant to the Pledge and Security Agreement. 3.7.2 The Borrowing Base may be calculated by the Bank, as often as it reasonably deems necessary, by reference to the definitions of "Market Value" and "Adjusted Market Value" set out herein, and any information that the Bank reasonably deems appropriate (including, but not limited to, the most recent Borrowing Base Certificate or any valuation requested pursuant to Clause 13.3.2), but Investment Collateral or Cash Collateral in an amount equal shall only be valued if and to the relevant solvency deficit extent that the Bank has a Security Interest over it. 3.7.3 Provided always that: (a) the Borrowing Base equals or residual solvency deficit if part funded, such collateral cover to be provided within 2 Banking Days of 30 June and 31 December exceeds 100% of the corresponding calendar yearaggregate of the face amounts of all issued Letters of Credit and is secured in accordance with Clause 11; 13.9.3 notice (b) there is no Event of termination Default then continuing; and (c) the requirements of Clause 3.7.6 are complied with, a Pledgor may (i) transfer, sell, exchange, settle, withdraw, redeem or invest their Investment Collateral from the relevant Collateral Account, (ii) substitute Investment Collateral for any other form of Investment Collateral, (iii) procure the transfer of collateral to Lloyd's as FAL to reduce the amount of any Letter of Credit or (iv) cause any cash on a Collateral Account of a Pledgor to be applied towards payment of the Outstanding Indebtedness. 3.7.4 If at any time Investment Collateral is served not held in the Collateral Account in the amounts prescribed in Clause 3.7.1 and secured in accordance with Clause 11, then the provisions of Clause ý3.10 all amounts payable under such Letter of Credit Applicant shall be fully collateralised in the form of Investment Collateral or Cash Collateral within 3 5 Banking Days following the 31 December after receipt of the applicable last year of account except where the appropriate Corporate Member does not provide any underwriting capacity to any Syndicate for the following underwriting year of account, in which case, such collateralisation will only be required written notice from the date falling 18 months after 31 December Bank procure the provision of the last year of account agreed to have been supported by the applicable Letter of Credit; 13.9.4 the net loss to the Syndicate on any RDS would, without the prior written consent of the Majority Banks (not to be unreasonably withheld of delayed), exceed 20% of the Syndicate’s overall premium limit for the year of account concerned then all amounts payable under each Letter of Credit shall be fully collateralised in the form of Investment Collateral or Cash Collateral within 3 Banking Days of the date on which the relevant net loss would exceed the specified percentage or, if at any time Lloyd’s redefines any existing RDS or prescribes any new RDS which in each case is applicable in respect of the Syndicate, within 30 Banking Days of the date on which the relevant loss would exceed the specified percentage; 13.9.5 other than by the Max Corporate 2 Quota Share Addendum, an Obligor makes or permits to be made any amendment to either of the Quota Share Agreements that shortens the term of the reinsurance thereunder or reduces the reinsurance recoveries thereunder or changes the governing law or jurisdiction thereof or makes or permits to be made any amendment to any Lloyd’s Security and Trust Deed that reduces the sums payable thereunder (other than as required by Lloyd’s) in either case without the prior written consent of the Agent (acting at the direction of the Majority Banks), such consent not to be unreasonably withheld and to be deemed to be granted if not expressly withheld within 20 Banking Days of the request therefor, the Account Party must provide additional collateral cover in the form of Investment Collateral or Cash Collateral in an amount equal necessary to satisfy such deficiency. 3.7.5 If at any time the amount of the Borrowing Base exceeds that required by Clause 3.7.1 or any other applicable provision of this Agreement, any Pledgor may, by instruction to the face value of each issued Letter of CreditCustodian, such collateral cover to be provided within 15 Banking Days procure that Investment Collateral is transferred out of the date of such amendment; (a) it is or becomes unlawful for relevant Collateral Account and into the Collateral Provider to perform any of its material obligations under either Quota Share Agreement; (b) either Quota Share Agreement is not effective in accordance with its terms or is alleged by the Collateral Provider to be ineffective in accordance with its terms for any reason; (c) the Collateral Provider repudiates or terminates either Quota Share Agreement or evidences an intention to repudiate or terminate either Quota Share Agreement other than as permitted in the Quota Share Assignment in respect absolute beneficial ownership of that Quota Share Agreement; (d) the Collateral Provider fails to pay Pledgor, free from any amount of premium or fees due and payable under the Quota Share Agreement to which it is party within any cure period allowed thereunder or breaches any material term of its Quota Share Agreement; (e) the Collateral Provider ceases, or threatens to cease, to carry on business; or (f) the Collateral Provider does not provide the Agent with a copy Security Interest in favour of the Max Quota Share Agreement in Bank, provided that the form acceptable to the Agent acting reasonably, certified by an officer Borrowing Base after such transfer shall be no less than that required under those provisions. 3.7.6 No more than 25% of the Account Party, by the later of (i) the date falling 3 Banking Days after the Coming Into Line Date in relation to Max Corporate for the 2009 year of account and (ii) the date falling 15 Banking Days after Completion; the Account Party must provide collateral cover (or ensure that collateral cover is provided) in Investment Collateral may take the form of Collateral Type 5 and no more than 10% of the Investment Collateral or Cash may take the form of Collateral in an amount equal to Type 5 issued by the face value of each issued Letter of Credit, such collateral cover to be provided within 15 Banking Days of the relevant eventsame issuer.

Collateral Cover. If: 13.9.1 the financial strength rating of Max Bermuda from AM Best is less than B++, the Account Party must provide collateral cover (or ensure that collateral cover is provided) in the form of Investment Collateral or Cash Collateral and in an amount equal to the face value of each issued Letter of Credit, such collateral cover to be provided within 2 Banking Days of the date on which the relevant financial strength rating becomes less than B++; or 13.9.2 any Obligor or any Relevant Corporate Member reports on its solvency statements prepared by Lloyd’s a solvency deficit in its individual open year of account and the applicable amount is not funded directly at Lloyd’s by depositing cash or similar assets into the relevant Corporate Member’s personal reserves by 30 June and 31 December of the corresponding calendar year, the Account Party must provide collateral cover (or ensure that collateral cover is provided) in the form of Investment Collateral or Cash Collateral in an amount equal to the relevant solvency deficit or residual solvency deficit if part funded, such collateral cover to be provided within 2 Banking Days of 30 June and 31 December of the corresponding calendar year; 13.9.3 notice of termination of a Letter of Credit is served in accordance with the provisions of Clause ý3.10 all amounts payable under such Letter of Credit shall be fully collateralised in the form of Investment Collateral or Cash Collateral within 3 Banking Days following the 31 December of the applicable last year of account except where the appropriate Corporate Member does not provide any underwriting capacity to any Syndicate for the following underwriting year of account, in which case, such collateralisation will only be required from the date falling 18 months after 31 December of the last year of account agreed to have been supported by the applicable Letter of Credit; 13.9.4 the net loss to the Syndicate on any RDS would, without the prior written consent of the Majority Banks (not to be unreasonably withheld of delayed), exceed 20% of the Syndicate’s overall premium limit for the year of account concerned then all amounts payable under each Letter of Credit shall be fully collateralised in the form of Investment Collateral or Cash Collateral within 3 Banking Days of the date on which the relevant net loss would exceed the specified percentage or, if at any time Lloyd’s redefines any existing RDS or prescribes any new RDS which in each case is applicable in respect of the Syndicate, within 30 Banking Days of the date on which the relevant loss would exceed the specified percentage; 13.9.5 other than by the Max Corporate 2 Quota Share Addendum, an Obligor makes or permits to be made any amendment to either of the Quota Share Agreements that shortens the term of the reinsurance thereunder or reduces the reinsurance recoveries thereunder or changes the governing law or jurisdiction thereof or makes or permits to be made any amendment to any Lloyd’s Security and Trust Deed that reduces the sums payable thereunder (other than as required by Lloyd’s) in either case without the prior written consent of the Agent (acting at the direction of the Majority Banks), such consent not to be unreasonably withheld and to be deemed to be granted if not expressly withheld within 20 Banking Days of the request therefor, the Account Party must provide collateral cover in the form of Investment Collateral or Cash Collateral in an amount equal to the face value of each issued Letter of Credit, such collateral cover to be provided within 15 Banking Days of the date of such amendment; 13.9.6 (a) it is or becomes unlawful for the Collateral Provider to perform any of its material obligations under either Quota Share Agreement; (b) either Quota Share Agreement is not effective in accordance with its terms or is alleged by the Collateral Provider to be ineffective in accordance with its terms for any reason; (c) the Collateral Provider repudiates or terminates either Quota Share Agreement or evidences an intention to repudiate or terminate either Quota Share Agreement other than as permitted in the Quota Share Assignment in respect of that Quota Share Agreement; (d) the Collateral Provider fails to pay any amount of premium or fees due and payable under the Quota Share Agreement to which it is party within any cure period allowed thereunder or breaches any material term of its Quota Share Agreement; (e) the Collateral Provider ceases, or threatens to cease, to carry on business; or (f) the Collateral Provider does not provide the Agent with a copy of the Max Quota Share Agreement in the form acceptable to the Agent acting reasonably, certified by an officer of the Account Party, by the later of (i) the date falling 3 Banking Days after the Coming Into Line Date in relation to Max Corporate for the 2009 year of account and (ii) the date falling 15 Banking Days after Completion; the Account Party must provide collateral cover (or ensure that collateral cover is provided) in the form of Investment Collateral or Cash Collateral in an amount equal to the face value of each issued Letter of Credit, such collateral cover to be provided within 15 Banking Days of the relevant event.