Exhibit 10.58
INSURANCE LETTERS OF CREDIT AGREEMENT
We are pleased to advise you that Barclays Bank PLC (the "Bank") has agreed
to grant a line for the issue of Letters of Credit (each a "Credit" and together
the "Credits") to be issued upon and subject to the terms and conditions set out
below and overleaf and on the attached Special Conditions, if any (as the same
may from time to time be amended by written agreement between us).
NAME: SCPIE Holdings Inc. ("SCPIE") ADDRESS: 0000 Xxxxxxx Xxxx Xxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
FAX: x000-000-0000
NAME: SCPIE Indemnity Company ADDRESS: 1888 Century Park East
("SCPIE Indemnity") Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
FAX: x000-000-0000
NAME: American Healthcare Indemnity Company ADDRESS: 1888 Century Park East
("American Healthcare") Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
FAX: x000-000-0000
NAME: American Healthcare Specialty ADDRESS: 0000 Xxxxxxx Xxxx Xxxx
Insurance Company ("American Specialty") Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
FAX: x000-000-0000
SCPIE, SCPIE Indemnity, American Healthcare and American Specialty (each, a
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"Company" and together, the "Companies")
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SECURITY ARRANGEMENTS
AS SET OUT IN THE ACCOMPANYING FACILITY LETTER OF EVEN DATE (the "Facility
Letter").
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INTEREST RATE FOR PURPOSES OF CLAUSE 8.2
2.00% per annum above Barclays US Dollar Base Rate.
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COMMISSION RATES FOR PURPOSES OF CLAUSE 9.1
AS SET OUT IN THE ACCOMPANYING FACILITY LETTER.
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for BARCLAYS BANK PLC
By .../s/ XXXX XXXXXX .................... Date: 15/th/ November 2001
Name......Xxxx Xxxxxx ....................
Title....Relationship Directors ..........
This offer is accepted by SCPIE Holdings Inc. pursuant to a resolution of its
board of directors, dated 2001 and a copy of such resolution, certified by a
director or the Secretary of SCPIE Holdings Inc. to be a true, complete and
up-to-date copy, is attached hereto.
for and on behalf of SCPIE HOLDINGS INC.
By .../s/ XXXXXXX X. XX .................. Date: 15/th/ November 2001
Name......Xxxxxxx X. Xx ..................
Title Senior Vice President and Chief Financial
Officer
This offer is accepted by SCPIE Indemnity Company pursuant to a resolution of
its board of directors, dated 2001 and a copy of such resolution,
certified by a director or the Secretary of SCPIE Indemnity Company to be a
true, complete and up-to-date copy, is attached hereto.
for and on behalf of SCPIE INDEMNITY COMPANY
By .../s/ XXXXXXX X. XX .................. Date: 15/th/ November 2001
Name......Xxxxxxx X. Xx ..................
Title Senior Vice President and Chief Financial
Officer
This offer is accepted by American Healthcare Indemnity Company pursuant to a
resolution of its board of directors, dated 2001 and a copy of
such resolution, certified by a director or the Secretary of American Healthcare
Indemnity Company to be a true, complete and up-to-date copy, is attached
hereto.
for and on behalf of AMERICAN HEALTHCARE INDEMNITY COMPANY
By .../s/ XXXXXXX X. XX .................. Date: 15/th/ November 2001
Name......Xxxxxxx X. Xx ..................
Title Senior Vice President and Chief Financial
Officer
This offer is accepted by American Healthcare Specialty Insurance Company
pursuant to a resolution of its board of directors, dated 2001 and a copy of
such resolution, certified by a director or the Secretary of American Healthcare
Specialty Insurance Company to be a true, complete and up-to-date copy, is
attached hereto.
for and on behalf of AMERICAN HEALTHCARE SPECIALTY INSURANCE COMPANY
By .../s/ XXXXXXX X. XX .................. Date: 15/th/ November 2001
Name......Xxxxxxx X. Xx ..................
Title Senior Vice President and Chief Financial
Officer
INSURANCE BANKING
XX Xxx 000, 00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
E-Mail: xxxxxxxxx.xxxxxxx@xxxxxxxx.xx.xx
Telephone: x00 (0)00 0000 0000 Facsimile: + 00 (0)00 0000 0000
INSURANCE LETTERS OF CREDIT AGREEMENT
Special Conditions
1. Without prejudice to the generality of clause 2 of Conditions, the Bank
shall not be under an obligation to issue a Credit unless it has received
the following in form and substance satisfactory to it:
1.1 board resolution (or other evidence of corporate authority) from each of
the Companies, approving the terms and conditions of and execution of the
Facility Letter, the Security Documents and this Agreement;
1.2 signed original copies of the Facility Letter, this Agreement, the Security
Documents, the Account Control Agreement (as defined in the Facility
Letter) and the custodian undertakings, bank mandates and other account
opening forms;
1.3 legal opinions in respect of (among other things) validity and
enforceability of the Facility Letter and this Agreement from lawyers
qualified in England and Wales and the Security Documents from lawyers
qualified in the state of California, USA, and corporate capacity in
respect of each Company from lawyers qualified in such Company's
jurisdiction of incorporation.
2. Letters of credit under this Agreement may be issued in favour of Lloyd's
(as defined in the Facility Letter) in Lloyd's standard form in respect of
any of the Companies or SCPIE Underwriting Ltd. or in favour of any of the
Companies or SCPIE Underwriting Ltd. for reserving purposes.
3. Each of the Companies acknowledge that in the event of a demand by the Bank
under this Agreement, the Bank may ask for Lloyd's assistance to recover
any monies due and that Lloyd's and the Bank may co-operate to ensure that
monies are recovered. Each of the Companies agree to the Bank and Lloyd's
so co-operating.
CONDITIONS
1. APPLICATIONS
Each time a Company wishes the Bank to issue or amend a Credit it shall either
(i) if it is able to access Barclays Business Master International or any other
electronic banking service from time to time made available by the Bank
incorporating a letter of credit issuance instruction facility, send an
appropriate electronic user instruction to the Bank by means of such service or
(ii) deliver to the Bank such duly completed form as the Bank shall require for
the purpose (an `application form'), signed pursuant to the resolution of its
board of directors, referred to on the front hereof, as amended or varied from
time to time, provided such amendments of variations are in a form acceptable to
the Bank. The opening or amendment of any Credit shall be at the sole discretion
of the Bank.
2. CONDITIONS PRECEDENT
Prior to making an application for the opening of a Credit, the requesting
Company shall deposit with the Bank such amount of cash or other collateral as
is specified on the front hereof under "Security Arrangements" and complete such
security documents (the "Security Documents") and other formalities as the Bank
may require in relation to such proposed Credit in form and substance
satisfactory to the Bank.
3. REPRESENTATIONS
As at the date hereof and upon the delivery to the Bank of any application form
by a Company, such Company shall be deemed to represent to the Bank that:
3.1 such Company is duly incorporated and validly existing under the laws of
its jurisdiction of incorporation;
3.2 such Company has the power and is able lawfully to perform its obligations
under this Agreement and the Security Documents;
3.3 each of this Agreement and the Security Documents constitutes its legal,
valid and binding obligations enforceable in accordance with its terms;
3.4 all government or official consents, licenses, approvals or authorisations
required in connection with the making, performance, validity and
enforceability of this agreement and the Security Documents have been
obtained and are in full force and effect, except where the failure to
obtain such consents, licenses, approvals or authorisations would not have
a material adverse effect on the financial condition, business or operation
of such Company or the validity and binding nature of this Agreement, the
Facility Letter or the rights and remedies of the Bank thereunder;
3.5 no action or administrative proceeding of or before any court or agency
which would or might have a material adverse effect on the financial
condition, business or operation of such Company has been commenced or
threatened and has not been resolved or concluded; and
3.6 the Parent's most recent consolidated audited financial statements give a
true and fair view of the state of affairs of the Companies as at the date
as of which they were prepared and, since that date, there has been no
material adverse change in its business, assets, condition or operations.
4. COVENANTS
Each Company undertakes that, during the term of this Agreement and while any
Credit is outstanding or any obligation of any of the Companies hereunder or
under any Security Document has not been discharged in full, it will:
4.1 provide the Bank with the consolidated audited financial statements of the
Parent as soon as they are available and not later than 180 days from the
end of each accounting reference period;
4.2 obtain and promptly renew all consents, licenses, approvals and
authorisations required to enable it to perform its obligations under, and
for the validity and enforceability of, this Agreement and the Security
Documents, except where the failure to obtain or promptly renew such
consents, licenses, approvals or authorisations would not have a material
adverse effect on the financial condition, business or operation of such
Company or the validity and binding nature of this Agreement, the Facility
Letter or the rights and remedies of the Bank thereunder;
4.3 promptly pay all stamp, registration and other taxes to which this
Agreement and the Security Documents are, or may at any time be, subject
and indemnify the Bank on demand against all losses, damages, charges,
costs and expenses incurred by the Bank in connection with this Agreement,
the Security Documents or any Credit (other than as a result of the Bank's
own negligence or wilful misconduct);
4.4 promptly on demand pay to the Bank such amounts representing the cost to
the Bank of complying with all reserve asset, special deposit, cash
liquidity or other requirements of the Bank of England which the Bank
determines to be attributable to this Agreement and/or the opening of any
Credit hereunder such determination to be conclusive in the absence of
manifest error; and
4.5 provide the Bank with such additional information relating to such
Company's business, operations and financial condition as the Bank may from
time to time reasonably require.
5. OPENING OF CREDITS
5.1 A Credit opened pursuant hereto shall be an irrevocable clean sight Credit
in favour of the beneficiary, and for the amount in U.S. dollars or such
other currency as may have been agreed between the Bank and the requesting
Company, specified in the relevant application form and available by the
beneficiary's sight draft on Barclays Bank PLC, and shall, if requested by
such Company and required by applicable law, be confirmed by a branch of
the Bank or, at the Bank's discretion, by a bank, or any other branch of
any other bank, which is qualified to act as a bank in the jurisdiction
concerned.
5.2 Any Credit opened pursuant hereto shall be subject to the Uniform Customs
and Practice for Documentary Credits (1993 Revision) ICC Publication Number
500 or any revision thereof from time to time, subject to such amendments
as the Bank shall consider appropriate in the light of the requirements of
any relevant regulatory authority.
6. EXTENSION OF CREDITS
6.1 If a Company so requests in any relevant application form, and the Bank
agrees, a Credit opened pursuant to this Agreement may state that it will
be automatically extended for successive periods (as stated in such
application form) unless the Bank has sent the beneficiary not less than 60
days written
notice (or such other period as may have been stated in such application
form) to the contrary. Such notice shall expire at the end of the original
term of the Credit or, as the case may be, any extension thereof.
6.2 The Bank shall not be obliged to send the beneficiary any such notice
unless the Bank shall have received written notice from the relevant
Company that such Company does not wish the relevant Credit to be extended.
Such notice shall reach the Bank not less than 15 days before the latest
date on which the Bank is entitled to give notice to the beneficiary of the
relevant Credit that the Credit is not to be extended.
6.3 Each of the Companies accepts that the Bank reserves the right, at any time
and in its discretion, to give notice to the beneficiary of a Credit that
such Credit will not be extended. If the Bank does so, it will, as soon as
practicable, give the relevant Company written notice thereof.
7 INCREASE OF SECURITY
The Bank may, at any time, require any of the Companies to deposit additional
cash or other collateral, or execute such Security Documents or complete such
other formalities as the Bank may determine. Provided always that the value of
security cover effected by each type of security shall not exceed the percentage
of the relevant Credit which is specified on the front hereof or such other
percentage as may be agreed by the Companies and the Bank from time to time.
8. PAYMENTS AND REIMBURSEMENT
8.1 Each Company hereby irrevocably authorises the Bank to make payment of the
amount of any demand made on the Bank under each Credit without reference
to such Company. Any such demand, if apparently made in accordance with the
terms of the Credit, shall be a sufficient authority to the Bank to make
the payment demanded and the Bank shall be entitled and bound to make such
payment, and the Bank shall not be under any obligation to satisfy itself
that the amount demanded is in fact due or that any such demand has been
properly made or that any such demand is genuine.
8.2 Each Company undertakes to pay the Bank on demand the amount of each
drawing under any Credit together with interest thereon from the date of
the drawing until the date of reimbursement by such Company at the rate
specified on the front hereof. If a Company has deposited cash with the
Bank, the Bank may, but shall not be obliged to, apply all or part of such
cash in or towards satisfaction of such Company's obligations under this
Clause 8.2.
9. COMMISSIONS
9.1 Each Company shall pay to the Bank commission on the amount of each
outstanding Credit and on the amount of each increase to an existing Credit
at the rates specified on the front hereof. Provided always that, in each
case, the commission shall be subject to the minimum charge per quarter or
part thereof as specified on the front hereof.
9.2 Commission shall be (a) calculated on the basis of a 360 day year and the
actual number of days in the relevant period and (b) payable quarterly in
advance on the last day of March, June, September and December each year in
respect of each Credit outstanding at such time and, in respect of an
increase in a Credit, (on the day the increase becomes effective) or at
such other times as may be determined by the Bank
10. INCREASED COSTS
In the event of:
10.1 any change in applicable law or regulation resulting in the Bank being
subjected to additional tax, levy. Duty, Charge, penalty, deduction or
withholding of any nature (other than tax on the Bank's net profits and
gains); or
10.2 any existing requirements of the Bank of England or other governmental
authorities or agencies (whether having the force of law or otherwise)
affecting the conduct of the Bank's business being changed or any new
requirements being imposed by any competent body, (including without
limitation a request or requirement which affects the manner in which the
Bank allocates capital resources to its commitments, including its
obligations hereunder);
and the result of any of the foregoing in the sole reasonable opinion of the
Bank is to increase the cost to the Bank of funding, maintaining or making
available any Credit (including any undrawn amount thereof) or to reduce the
amount of any payment received or receivable by the Bank, or to reduce the
effective return to the Bank in any such case by an amount which the Bank deems
material, then each Company shall pay to the Bank such sum as may be certified
in writing by the Bank to such Company, as shall compensate the Bank for such
increased cost or reduction.
11. MISCELLANEOUS
11.1 All payments to be made by the Companies hereunder shall be made in the
currency in which such payment is due and in immediately available and
freely transferable funds to such account at such bank as the Bank may
designate. All payments shall be made without set-off or deduction save as
required by law. If any payment is required by law to be made subject to
any withholding or deduction, the sum payable shall be increased to the
extent necessary to ensure that, after the making of such withholding or
deduction, the Bank receives and retains a net sum equal to that which it
would have received and retained in the absence of such withholding or
deduction.
11.2 This Agreement may not be assigned by any of the Companies.
11.3 If any sum payable by the Companies hereunder or under any order or
judgement relating hereto has to be converted from the currency (the `first
currency') in which the same is payable into another currency (the `second
currency') for the purpose of making or filing a proof or claim, obtaining
an order or judgement or enforcing any order or judgement, the Companies
will indemnify the Bank against any loss suffered as a result of any
discrepancy between the rate of exchange used for such purpose to convert
the sum in question from the first currency to the second currency and the
rate of exchange at which the Bank could in the ordinary course of business
purchase the first currency with the second currency upon receipt of a sum
paid to it in satisfaction, in part or whole, of any such order, judgement,
claim or proof.
11.4 Notices and other communications hereunder may be given by letter, telex,
or telefax to any or all of the Companies, as relevant, or, as the case may
be, the Bank at the address, telex number or telefax number specified on
the front hereof (or such other address, telex number or telefax number as
the recipient may have notified to the other party by not less than fifteen
days written notice).
11.5 This Agreement shall be governed by and construed in accordance with
English Law, and for the benefit of the Bank, each of the Companies hereby
irrevocably submits to the jurisdiction of the English courts.
