Common use of Substitute Reset Clause in Contracts

Substitute Reset. (a) If a Reset Agent Failure Event occurs and a Replacement Reset Agent cannot be identified within forty-five (45) calendar days from the termination of the Reset Agent Agreement, the Ceding Insurer may at its option elect to trigger an Early Termination Event II or may alternatively update (a “Substitute Reset”) the Attachment Level, the Exhaustion Level and the Insurance Percentage as follows and will deliver to the Reinsurer, the Indenture Trustee and the Claims Reviewer a notice similar to the form attached hereto as Exhibit U (“Substitute Reset Notice”) setting out such calculations: (i) the Updated Attachment Level will be calculated by dividing the total insured value of the applicable Updated Data by the total insured value of the Initial Data or the Updated Data used by the Reset Agent for the last successfully conducted Reset, as applicable, and multiplying the resulting quotient by the Attachment Level in effect prior to such Substitute Reset; (ii) the Updated Exhaustion Level will increase or decrease by the same U.S. dollar amount that the Updated Attachment Level increased or decreased; and (iii) the Updated Insurance Percentage will be the percentage derived from dividing the Outstanding Limit (after giving effect to any adjustment to the Outstanding Limit on the Payment Date immediately preceding the Reset Date) by the Layer; provided, that such Updated Insurance Percentage will not be greater than 100%. The Claims Reviewer will perform specified arithmetical procedures to agree that the Substitute Reset has been calculated in accordance with the foregoing formula. If the Claims Reviewer fails to timely perform such arithmetical procedures, then the Ceding Insurer will be entitled to have the Substitute Reset take effect by providing written notice thereof to the Reinsurer. (b) The Substitute Reset will be effective as a Reset for all purposes under this Reinsurance Agreement, except that the Ceding Insurer reserves the right to trigger an Early Termination Event in respect of such Reset Agent Failure Event.