CREDIT AGREEMENT

dated as of

March 27, 2020 

among

RLI CORP.,  

The Lenders Party Hereto

and

BANK OF MONTREAL, CHICAGO BRANCH,  
as Administrative Agent

__________________________________

BANK OF MONTREAL, CHICAGO BRANCH,
as Sole Bookrunner and Sole Lead Arranger

 

 

 

736428214 20644379

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

 

 

 

Page

ARTICLE I

DEFINITIONS…………………………………………………………………..........

1

 

SECTION 1.01.

Defined Terms…………………………………………………………………

1

 

SECTION 1.02.

Classification of Loans and Borrowings………………………………………

19

 

SECTION 1.03.

Terms Generally……………………………………………………………….

19

 

SECTION 1.04.

Accounting Terms; GAAP…………………………………………………….

19

 

SECTION 1.05.

Interest Rates…………………………………………………………………..

20

ARTICLE II

THE CREDITS………………………………………………………………

20

 

SECTION 2.01.

Commitments………………………………………………………………….

20

 

SECTION 2.02

Loans and Borrowing………………………………………………………….

21

 

SECTION 2.03

Requests for Revolving Borrowings…………………………………………..

21

 

SECTION 2.04.

Funding of Borrowings………………………………………………………..

22

 

SECTION 2.05.

Interest Elections………………………………………………………………

22

 

SECTION 2.06.

Termination and Reduction of, and Increases in, Commitments……………..

23

 

SECTION 2.07.

Repayment of Loans; Evidence of Debt………………………………………

25

 

SECTION 2.08.

Prepayment of Loans…………………………………………………………..

25

 

SECTION 2.09.

Fees…………………………………………………………………………….

26

 

SECTION 2.10.

Interest…………………………………………………………………………

26

 

SECTION 2.11.

Alternate Rate of Interest……………………………………………...………

27

 

SECTION 2.12.

Increased Costs………………………………………………………………..

31

 

SECTION 2.13.

Break Funding Payments……………………………………………………..

32

 

SECTION 2.14.

Withholding of Taxes; Gross-Up; Payments free of Taxes……………………

33

 

SECTION 2.15.

Payments Generally; Pro Rata Treatment; Sharing of Setoffs…………..……

37

 

SECTION 2.16.

Mitigation Obligations; Replacement of Lenders……………………………..

38

 

SECTION 2.17.

Defaulting Lenders…………………………………………………………….

39

 

SECTION 2.18

Extension of Maturity Date……………………………………………………

40

ARTICLE III

REPRESENTATIONS AND WARRANTIES……………………………………….

41

 

SECTION 3.01.

Existence and Standing………………………………………………………..

41

 

SECTION 3.02.

Authorization and Validity…………………………………………………….

42

 

SECTION 3.03.

No Conflict; Consent…………………………………………………………..

42

 

SECTION 3.04.

Financial Statements……………………………………………………………

42

 

SECTION 3.05.

Taxes……………………………………………………………………………

42

 

SECTION 3.06.

Material Adverse Change………………………………………………………

43

 

SECTION 3.07.

Litigation and Contingent Obligations…………………………………….......

43

 

SECTION 3.08.

Subsidiaries…………………………………………………………………….

43

 

SECTION 3.09.

ERISA………………………………………………………………………….

43

 

SECTION 3.10.

Accuracy of Information……………………………………………………….

43

 

SECTION 3.11.

Regulation U……………………………………………………………………

43

 

SECTION 3.12.

Material Agreements………………………………………………………..…

44

i

736428214 20644379

 

 

SECTION 3.13.

Compliance With Laws…………………………………………………..……

44

 

SECTION 3.14.

Plan Assets; Prohibited Transactions…………………………………………..

44

 

SECTION 3.15.

Investment Company Act………………………………………………………

44

 

SECTION 3.16.

Insurance Licenses……………………………………………………………..

44

 

SECTION 3.17.

Solvency………………………………………………………………………..

44

 

SECTION 3.18.

Labor Controversies; Union Contracts, Etc………………………………........

45

 

SECTION 3.19.

Surety Obligations; Financial Assurances……………………………………..

45

 

SECTION 3.20.

Business Relations……………………………………………………………..

45

 

SECTION 3.21.

Environmental Matters……………………………………………..………….

45

 

SECTION 3.22.

Ranking…………………………………………………………………………

45

 

SECTION 3.23.

Intellectual Property………………………………………………………..….

45

 

SECTION 3.24.

Anti-Corruption Laws and Sanctions………………………………………….

46

 

SECTION 3.25.

EEA Financial Institutions……………………………………………………..

46

ARTICLE IV

CONDITIONS…………………………………………………………………

46

 

SECTION 4.01.

Effective Date………………………………………………………………….

46

 

SECTION 4.02.

Each Loan………………………………………………………………………

47

ARTICLE V

AFFIRMATIVE COVENANTS………………………………………………

47

 

SECTION 5.01.

Financial Statements…………………………………………………………..

47

 

SECTION 5.02.

Other Reports………………………………………………………………….

48

 

SECTION 5.03.

Use of Proceeds………………………………………………………………..

49

 

SECTION 5.04.

Notice of Default………………………………………………………………

49

 

SECTION 5.05.

Taxes…………………………………………………………………………..

49

 

SECTION 5.06.

Insurance………………………………………………………………………

50

 

SECTION 5.07.

Compliance with Laws………………………………………………………

50

 

SECTION 5.08.

Maintenance of Properties…………………………………………………….

50

 

SECTION 5.09.

Inspection………………………………………………………………………

50

 

SECTION 5.10.

Conduct of Business…………………………………………………………

51

 

SECTION 5.11.

Accuracy of Information……………………………………………………….

51

 

SECTION 5.12.

Plan Assets; Prohibited Transaction………………………………..……

51

ARTICLE VI

NEGATIVE COVENANTS……………………………………………………………

52

 

SECTION 6.01.

Dividends………………………………………………………………………

52

 

SECTION 6.02.

Merger………………………………………………………………………….

52

 

SECTION 6.03.

Sale of Assets………………………………………………………………….

52

 

SECTION 6.04.

Investments and Acquisitions…………………………………………….

52

 

SECTION 6.05.

Liens…………………………..……………………………………………

53

 

SECTION 6.06.

Affiliates……………………………………………………………………….

55

 

SECTION 6.07.

Financial Covenants………………………………………………………

55

ARTICLE VII

EVENTS OF DEFAULT……………………………………………………

55

 

SECTION 7.01.

Events of Default……………………………………………………………

55

 

SECTION 7.02.

Application of Payments…………………………………………………..….

58

ii

736428214 20644379

 

ARTICLE VIII

THE ADMINISTRATIVE AGENT…………………………………………...

58

 

SECTION 8.01.

Authorization and Action……………………………………………………..

58

 

SECTION 8.02.

Administrative Agent’s Reliance, Indemnification, Etc………………………

61

 

SECTION 8.03.

Posting of Communications…………………………………………………

62

 

SECTION 8.04.

The Administrative Agent Individually……………………………………….

63

 

SECTION 8.05.

Successor Administrative Agent………………………………………………

63

 

SECTION 8.06.

Acknowledgements of Lenders………………………………………………..

64

 

SECTION 8.07.

Certain ERISA Matters………………………………………………………..

65

ARTICLE IX

MISCELLANEOUS………………………………………………………………………..

66

 

SECTION 9.01.

Notices…………………………………………………………………………

66

 

SECTION 9.02.

Waivers; Amendments…………………………………………………..……

67

 

SECTION 9.03.

Expenses; Indemnity; Damage Waiver………………………………………..

68

 

SECTION 9.04.

Successors and Assigns………………………………………………………..

70

 

SECTION 9.05.

Survival………………………………………………………………………..

73

 

SECTION 9.06.

Counterparts; Integration; Effectiveness; Electronic Execution………………

74

 

SECTION 9.07.

Severability…………………………………………………………………….

74

 

SECTION 9.08.

Right of Setoff………………………………………………..……………….

74

 

SECTION 9.09.

Governing Law; Jurisdiction; Consent to Service of Process……………..….

75

 

SECTION 9.10.

WAIVER OF JURY TRIAL…………………………………………………..

76

 

SECTION 9.11.

Headings……………………………………………………………………….

76

 

SECTION 9.12.

Confidentiality…………………………………………………………………

76

 

SECTION 9.13.

Material Non-Public Information…………………………………………..…

77

 

SECTION 9.14.

Interest Rate Limitation……………………………………………………….

77

 

SECTION 9.15.

No Fiduciary Duty, etc……………………………………………………….

78

 

SECTION 9.16.

USA PATRIOT Act………………………………………………………......

79

 

SECTION 9.17.

Acknowledgement and Consent to Bail-In of EEA Financial Institutions…....

79

 

SCHEDULES:

Schedule 2.01 – Commitments

Schedule 3.08 -- Subsidiaries

Schedule 3.19 – Financial Assurance

EXHIBITS:

Exhibit A – Form of Assignment and Assumption

Exhibit B – Form of Borrowing Request

Exhibit C – Form of Interest Election Request

Exhibit D-1 – U.S. Tax Certificate (For Non-U.S. Lenders that are not
Partnerships for U.S. Federal Income Tax Purposes)

Exhibit D-2 – U.S. Tax Certificate (For Non-U.S. Participants that are not
Partnerships for U.S. Federal Income Tax Purposes)

Exhibit D-3 – U.S. Tax Certificate (For Non-U.S. Participants that are
Partnerships for U.S. Federal Income Tax Purposes)

Exhibit D-4 – U.S. Tax Certificate (For Non-U.S. Lenders that are Partnerships
for U.S. Federal Income Tax Purposes)

Exhibit E – Form of Compliance Certificate

 

iii

736428214 20644379

 

CREDIT AGREEMENT dated as of March 27, 2020, among RLI CORP., the LENDERS party
hereto, and BANK OF MONTREAL, CHICAGO BRANCH, as Administrative Agent.

The parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Defined Terms.  As used in this Agreement, the following terms
have the meanings specified below:

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, bear interest at a rate determined
by reference to the Alternate Base Rate.

“Acquisition” means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (a) acquires any going business or all or substantially all
of the assets of any firm, corporation or limited liability company, or division
thereof, whether through purchase of assets, merger or otherwise or (b) directly
or indirectly acquires (in one transaction or as the most recent transaction in
a series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power) of the
outstanding ownership interests of a partnership or limited liability company.

“Adjusted LIBO Rate” means, for any Borrowing of Eurodollar Loans, a rate per
annum determined in accordance with the following formula:

 

Adjusted LIBO Rate=LIBO Rate

1 - Eurodollar Reserve Percentage

“Administrative Agent” means Bank of Montreal, Chicago Branch in its capacity as
administrative agent for the Lenders hereunder.

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

“Agent Indemnitee” has the meaning assigned to it in Section 9.03(c).

“Agreement” means this Credit Agreement.

 

“Alternate Base Rate”  means, for any day, the rate per annum equal to the
greatest of: (a) the rate of interest announced or otherwise established by
Administrative Agent from time to time as its prime commercial rate as in effect
on such day, with any change in the Alternate Base Rate resulting from a change
in said prime commercial rate to be effective as of the date of the relevant
change in said prime commercial rate (it being acknowledged and agreed that such
rate may not be Administrative Agent’s best or lowest rate), (b) the sum of (i)
the rate determined by Administrative Agent to be the average (rounded upward,
if necessary, to the next higher 1/100 of 1%) of the rates per annum quoted to
Administrative Agent at approximately 10:00 a.m. (or as soon thereafter as is
practicable) on such day (or, if such day is not a Business Day, on the
immediately preceding Business Day) by two or more Federal funds brokers
selected by Administrative Agent for sale to Administrative Agent at face value
of Federal funds in the secondary market in an amount equal or comparable to the
principal amount for which such rate is being determined, plus (ii) 1/2 of 1%,
and (c) the LIBOR Quoted Rate for such day plus 1.00%.  As used herein, the term
“LIBOR Quoted Rate” means, for any day, the rate per annum equal to the quotient
of (i) the rate per annum (rounded upwards, if necessary, to the next higher one
hundred thousandth of a percentage point) for deposits in U.S. Dollars for a
one-month interest period as reported on the applicable Bloomberg screen page
(or such other commercially available source providing such quotations as may be
designated by Administrative Agent from time to time) as of 11:00 a.m. (London,
England time) on such day (or, if such day is not a Business Day, on the
immediately preceding Business Day) divided by (ii) one (1) minus the Eurodollar
Reserve Percentage, provided that in no event shall the “LIBOR Quoted Rate” be
less than 0.00%.

“Annual Statement” means the annual statutory financial statement of any
Insurance Subsidiary required to be filed with the insurance commissioner (or
similar authority) of its jurisdiction of incorporation, which statement shall
be in the form required by such Insurance Subsidiary’s jurisdiction of
incorporation or, if no specific form is so required, in the form of financial
statements permitted by such insurance commissioner (or such similar authority)
to be used for filing annual statutory financial statements and shall contain
the type of information permitted by such insurance commissioner (or such
similar authority) to be disclosed therein, together with all exhibits or
schedules filed therewith.

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Borrower or any of its Subsidiaries from time to
time concerning or relating to bribery or corruption.

“Applicable Parties” has the meaning assigned to it in Section 8.03(c).

“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment; provided that, in the
case of Section 2.17 when a Defaulting Lender shall exist, “Applicable
Percentage” shall mean the percentage of the total Commitments (disregarding any
Defaulting Lender’s Commitment) represented by such Lender’s Commitment.  If the
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments and to any Lender’s status as a Defaulting Lender at the time of
determination.

2

736428214 20644379

 

“Applicable Rate” means, for any day, with respect to any ABR Loan or Eurodollar
Loan, or with respect to the commitment fees payable hereunder, as the case may
be, the applicable rate per annum set forth below under the caption “ABR
Spread”, “Eurodollar Spread” or “Commitment Fee Rate”, as the case may be, based
upon the Moody’s Rating and the S&P Rating applicable on such date to the Index
Debt:

 

 

 

 

Index Debt Ratings:

ABR Spread

Eurodollar Spread

Commitment Fee Rate

Level I Status

0.000%

1.000%

0.125%

Level II Status

0.125%

1.125%

0.150%

Level III Status

0.250%

1.250%

0.175%

Level IV Status

0.500%

1.500%

0.200%

Level V Status

0.750%

1.750%

0.275%

 

For the purposes of this definition:

“Level I Status” exists at any date if, on such date, the Borrower’s Moody’s
Rating is A2 or better or the Borrower’s S&P Rating is A or better.

“Level II Status” exists at any date if, on such date, (i) the Borrower has not
qualified for Level I Status and (ii) the Borrower’s Moody’s Rating is A3 or the
Borrower’s S&P Rating is A-.

“Level III Status” exists at any date if, on such date, (i) the Borrower has not
qualified for Level I Status or Level II Status and (ii) the Borrower’s Moody’s
Rating is Baa1 or the Borrower’s S&P Rating is BBB+.

“Level IV Status” exists at any date if, on such date, (i) the Borrower has not
qualified for Level I Status, Level II Status or Level III Status and (ii) the
Borrower’s Moody’s Rating is Baa2 or better or the Borrower’s S&P Rating is BBB
or better.

“Level V Status” exists at any date if, on such date, the Borrower has not
qualified for Level I Status, Level II Status, Level III Status or Level IV
Status.

“Moody’s Rating” means, at any time, the rating issued by Moody’s and then in
effect with respect to the Index Debt.

“S&P Rating” means, at any time, the rating issued by S&P and then in effect
with respect to the Index Debt.

“Status” means Level I Status, Level II Status, Level III Status, Level IV
Status or Level V Status.

For purposes of the foregoing, (i) if the ratings established or deemed to have
been established by Moody’s and S&P for the Index Debt shall fall within
different Levels, the Applicable Rate shall be based on the higher of the two
ratings unless one of the two ratings is two or more Levels lower than the
other, in which case the Applicable Rate shall be determined by reference to the
rating which is one Level above the lower of the two ratings, and (ii) if the

3

736428214 20644379

 

ratings established or deemed to have been established by Moody’s and S&P for
the Index Debt shall be changed (other than as a result of a change in the
rating system of Moody’s or S&P, as applicable), such change shall be effective
as of the date on which it is first announced by the applicable rating agency,
irrespective of when notice of such change shall have been furnished by the
Borrower to the Agent and the Lenders pursuant to Section 5.01 or otherwise. 
Each change in the Applicable Rate shall apply during the period commencing on
the effective date of such change and ending on the date immediately preceding
the effective date of the next such change.  If the rating system of Moody’s or
S&P shall change, if either Moody’s or S&P shall cease to be in the business of
rating corporate debt obligations or if neither Moody’s nor S&P shall have in
effect a rating for the Index Debt, then the Borrower, the Administrative Agent
and the Required Lenders shall negotiate in good faith to amend this definition
to reflect such changed rating system or the unavailability of ratings from such
ratings agency and, pending the effectiveness of any such amendment, the
Applicable Rate shall be determined by reference to the rating most recently in
effect prior to any such change or cessation.

“Approved Electronic Platform” has the meaning assigned to it in Section
8.03(a).

“Approved Fund” has the meaning assigned to it in Section 9.04(b).

“Arranger” means Bank of Montreal, Chicago Branch in its capacity as sole
bookrunner and sole lead arranger hereunder.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form (including electronic records generated by the use
of an electronic platform) approved by the Administrative Agent.

“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Commitments.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy”, as now and hereafter in effect, or any successor statute.

“Bankruptcy Event” means, with respect to any Person, such Person becomes the
subject of a voluntary or involuntary bankruptcy or insolvency proceeding, or
has had a receiver, conservator, trustee, administrator, custodian, assignee for
the benefit of creditors or similar Person charged with the reorganization or
liquidation of its business appointed for it, or, in the good faith
determination of the Administrative Agent, has taken any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any such
proceeding or appointment or

4

736428214 20644379

 

has had any order for relief in such proceeding entered in respect thereof,
provided that a Bankruptcy Event shall not result solely by virtue of any
ownership interest, or the acquisition of any ownership interest, in such Person
by a Governmental Authority or instrumentality thereof, unless such ownership
interest results in or provides such Person with immunity from the jurisdiction
of courts within the United States or from the enforcement of judgments or writs
of attachment on its assets or permits such Person (or such Governmental
Authority or instrumentality) to reject, repudiate, disavow or disaffirm any
contracts or agreements made by such Person.

“Beneficial Ownership Certification” means a certification regarding beneficial
ownership as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in
Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a “plan” as
defined in Section 4975 of the Code to which Section 4975 of the Code applies,
and (c) any Person whose assets include (for purposes of the Plan Asset
Regulations or otherwise for purposes of Title I of ERISA or Section 4975 of the
Code) the assets of any such “employee benefit plan” or “plan”.

“Borrower” means RLI Corp., a Delaware corporation.

“Borrowing” means Revolving Loans of the same Type, made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.

“Borrowing Request” means a request by the Borrower for a Revolving Borrowing in
accordance with Section 2.03, which shall be substantially in the form of
Exhibit B or any other form approved by the Administrative Agent.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City or Chicago, Illinois are authorized or
required by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term “Business Day” shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.

“Capitalized Lease” of a Person means any lease of property by such Person as
lessee which would be capitalized on a balance sheet of such Person prepared in
accordance with GAAP.

“Capitalized Lease Obligations” of a Person means the amount of the obligations
of such Person under Capitalized Leases which would be shown as a liability on a
balance sheet of such Person prepared in accordance with GAAP.

“CBIC” means Contractors Bonding and Insurance Co., an Illinois insurance
company.

“Change in Control” means (a) a “change in control,” as defined in any
applicable state law Insurance Holding Company System Regulatory Act or similar
legislation, regulation,

5

736428214 20644379

 

applicable insurance commission or department order, with respect to RLIC or
MHIC; (b) any “Person” or “group” (as such terms are used in Sections 13d and
14d of the 1934 Act, is or shall become the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the 1934 Act) directly or indirectly, of 25% or more
on a fully diluted basis of the voting capital stock interest of the Borrower;
(c) during any period of 12 consecutive calendar months, commencing on the date
hereof, the ceasing of those individuals (the “Continuing Directors”) who (i)
were directors of the Borrower on the first day of each such period or (ii)
subsequently became directors of the Borrower and whose initial election or
initial nomination for election subsequent to that date was approved by a
majority of the Continuing Directors then on the board of directors of the
Borrower, to constitute a majority of the board of directors of the Borrower;
(d) the Borrower shall cease to own beneficially and of record, free and clear
of all Liens, other encumbrances or voting agreements, restrictions or trusts of
any kind, 100% of the outstanding shares of voting stock of RLIC on a fully
diluted basis; or (e) RLIC shall cease to own beneficially and of record, free
and clear of all Liens, other encumbrances or voting agreements, restrictions or
trusts of any kind, 100% of the outstanding shares of voting shock of MHIC on a
fully diluted basis.

“Change in Law” means the occurrence after the date of this Agreement or, with
respect to any Lender, such later date on which such Lender becomes a party to
this Agreement) of (a) the adoption of or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation, implementation or application thereof by
any Governmental Authority or (c) compliance by any Lender (or, for purposes of
Section 2.12(b), by any lending office of such Lender or by such Lender’s
holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the date of this Agreement; provided that, notwithstanding anything herein to
the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act
and all requests, rules, guidelines or directives thereunder or issued in
connection therewith or in the implementation thereof and (y) all requests,
rules, guidelines or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall, in each case, be deemed to be a “Change
in Law,” regardless of the date enacted, adopted, issued or implemented.

“Charges” has the meaning assigned to it in Section 9.14.

“Code” means the Internal Revenue Code of 1986, as amended.

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Revolving Loans hereunder, expressed as an amount representing the
maximum aggregate amount of such Lender’s Revolving Credit Exposure hereunder,
as such commitment may be (a) increased or reduced from time to time pursuant to
Section 2.06 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04.  The initial amount
of each Lender’s Commitment is set forth on Schedule 2.01, or in the Assignment
and Assumption or other documentation or record (as such term is defined in
Section 9-102(a)(70) of the Illinois Uniform Commercial Code) as provided in
Section 9.04 (b)(ii)(C), pursuant to which such Lender shall have assumed its
Commitment, as applicable.  The initial aggregate amount of the Lenders’
Commitments is $60,000,000.

6

736428214 20644379

 

“Communications” has the meaning assigned to it in Section 8.03(c).

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Consolidated Indebtedness” means at any time the Indebtedness of the Borrower
and its Subsidiaries calculated on a consolidated basis as of such time.

“Consolidated Net Worth” means at any time the consolidated stockholders’ equity
of the Borrower and its Subsidiaries calculated on a consolidated basis as of
such time.

“Consolidated Total Capitalization” means at any time the sum of Consolidated
Indebtedness and Consolidated Net Worth, each calculated at such time.

“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. 
“Controlling” and “Controlled” have meanings correlative thereto.

“Credit Party” means the Administrative Agent or any Lender.

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

“Defaulting Lender” means any Lender that (a) has failed, within two Business
Days of the date required to be funded or paid, to (i) fund any portion of its
Loans, or (ii) pay over to any Credit Party any other amount required to be paid
by it hereunder, unless, in the case of clause (i) above, such Lender notifies
the Administrative Agent in writing that such failure is the result of such
Lender’s good faith determination that a condition precedent to funding
(specifically identified and including the particular default, if any) has not
been satisfied, (b) has notified the Borrower or any Credit Party in writing, or
has made a public statement to the effect, that it does not intend or expect to
comply with any of its funding obligations under this Agreement (unless such
writing or public statement indicates that such position is based on such
Lender’s good faith determination that a condition precedent (specifically
identified and including the particular default, if any) to funding a loan under
this Agreement cannot be satisfied) or generally under other agreements in which
it commits to extend credit, (c) has failed, within three Business Days after
request by a Credit Party, acting in good faith, to provide a certification in
writing from an authorized officer of such Lender that it will comply with its
obligations (and is financially able to meet such obligations) to fund
prospective Loans under this Agreement, provided that such Lender shall cease to
be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s
receipt of such certification in form and substance satisfactory to it and the
Administrative Agent, or (d) has become the subject of (A) a Bankruptcy Event or
(B) a Bail-In Action.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (in one transaction or in a series of transactions) of any property
by any Person (including any sale and leaseback transaction and any issuance of
Equity Interests by a Subsidiary of such Person),

7

736428214 20644379

 

including any sale, assignment, transfer or other disposal, with or without
recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

“dollars” or “$” refers to lawful money of the United States of America.

“EEA Financial Institution” means (a) any institution established in any EEA
Member Country which is subject to the supervision of an EEA Resolution
Authority, (b) any entity established in an EEA Member Country which is a parent
of an institution described in clause (a) of this definition, or (c) any
institution established in an EEA Member Country which is a subsidiary of an
institution described in clauses (a) or (b) of this definition and is subject to
consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any
Person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Effective Date” means the date on which the conditions specified in Section
4.01 are satisfied (or waived in accordance with Section 9.02).

“Electronic Signature” means an electronic sound, symbol, or process attached
to, or associated with, a contract or other record and adopted by a person with
the intent to sign, authenticate or accept such contract or record.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to (i) the environment, (ii) preservation or reclamation of natural resources,
(iii) the management, release or threatened release of any Hazardous Material or
(iv) health and safety matters.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest, but excluding any debt securities convertible into any of the
foregoing.

8

736428214 20644379

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the rules and regulations promulgated thereunder.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code or Section 4001(14) of ERISA or, solely for purposes
of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414(b), (c), (m) or (o) 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) the failure to satisfy
the “minimum funding standard” (as defined in Section 412 of the Code or Section
302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c)
of the Code or Section 302(c) of ERISA of an application for a waiver of the
minimum funding standard with respect to any Plan; (d) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA
with respect to the termination of any Plan; (e) the receipt by the Borrower or
any ERISA Affiliate from the PBGC or a plan administrator of any notice relating
to an intention by the PBGC to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (f) the incurrence by the Borrower or any of its
ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition upon the Borrower or
any of its ERISA Affiliates of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent within the meaning of
Title IV of ERISA.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor Person), as in effect
from time to time.

“Eurodollar” when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.

“Eurodollar Reserve Percentage” means the maximum reserve percentage, expressed
as a decimal, at which reserves (including any emergency, marginal, special, and
supplemental reserves) are imposed by the Board of Governors of the Federal
Reserve System (or any successor) on “eurocurrency liabilities”, as defined in
Regulation D (or any successor thereto), subject to any amendments of such
reserve requirement by such Board or its successor, taking into account any
transitional adjustments thereto.  For purposes of this definition, the relevant
Loans shall be deemed to be “eurocurrency liabilities” as defined in Regulation
D without benefit or credit for any prorations, exemptions or offsets under
Regulation D. The Eurodollar Reserve Percentage shall be adjusted automatically
on and as of the effective date of any change in any such reserve percentage.

“Event of Default” has the meaning assigned to such term in Section 7.01.

9

736428214 20644379

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. Federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (i) such Lender acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by the
Borrower under Section 2.16(b)) or (ii) such Lender changes its lending office,
except in each case to the extent that, pursuant to Section 2.14, amounts with
respect to such Taxes were payable either to such Lender’s assignor immediately
before such Lender acquired the applicable interest in a Loan or Commitment or
to such Lender immediately before it changed its lending office, (c) Taxes
attributable to such Recipient’s failure to comply with Section 2.14(f) and (d)
any U.S. federal withholding Taxes imposed under FATCA.

“Existing Maturity Date” has the meaning assigned to such term in Section
2.18(a).

“Extending Lender” has the meaning assigned to such term in Section 2.18(b)(ii).

“Extension Request” means a written request from the Borrower to the
Administrative Agent requesting an extension of the Maturity Date pursuant to
Section 2.18.

“FATCA”  means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof, any agreement entered into
pursuant to Section 1471(b)(1) of the Code, any applicable intergovernmental
agreement entered into among Governmental Authorities in connection with the
implementation of the foregoing and any fiscal or regulatory legislation, rules
or practices adopted pursuant to any such intergovernmental agreement, or any
treaty or convention among Governmental Authorities and implementing the
foregoing.

“Federal Funds Rate” means the fluctuating interest rate per annum described in
part (i) of clause (b) of the definition of Alternate Base Rate.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System of the United States of America.

“FHLB Agreement” means any loan agreement or other instrument or agreement
governing Indebtedness entered into between RLIC or MHIC and the Federal Home
Loan Bank of Chicago.

“Financial Assurance” means any financial assurance (whether in the form of a
bond, letter of credit, cash or otherwise), other than insurance policies and
bonds issued by any Insurance Subsidiary in the ordinary course of business.

10

736428214 20644379

 

“Financial Hedge” means a swap, collar, floor, cap or other contract which is
intended to reduce or eliminate the risk of fluctuations in interest rates.

“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.

“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is
not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that
is resident or organized under the laws of a jurisdiction other than that in
which the Borrower is resident for tax purposes.

“GAAP” means generally accepted accounting principles in the United States of
America.

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor 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 the guarantor, 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 thereof, (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 thereof, (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 or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

 “Indebtedness” of a Person means such Person’s (a) obligations for borrowed
money (other than obligations under any FHLB Agreement), (b) obligations
representing the deferred purchase price of property or services (other than
accounts payable arising in the ordinary course of such Person’s business
payable on terms customary in the trade), (c) obligations, whether or not
assumed, secured by Liens or payable out of the proceeds or production from
property now or hereafter owned or acquired by such Person, (d) obligations
which are evidenced by notes, acceptances, or other instruments, (e) obligations
to purchase securities or other property arising out of or in connection with
the sale of the same or substantially similar securities or property, (f)

11

736428214 20644379

 

Capitalized Lease Obligations, (g) obligations arising in respect of reverse
repurchase transactions, (h) reimbursement obligations arising in respect of
drawn letters of credit, (i) senior obligations with respect to Financial
Hedges, but only following the occurrence of a default under the applicable
Financial Hedge or an Event of Default hereunder, (j) senior obligations with
respect to debt for which a Person is responsible or liable solely as a
guarantor, but only from and after the date demand for payment is made under the
applicable guaranty, and (k) any other obligation for borrowed money or other
financial accommodation which in accordance with GAAP would be shown as a
liability on the consolidated balance sheet of such Person.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Borrower under any Loan Document and (b) to the extent not otherwise described
in (a) hereof, Other Taxes.

“Indemnitee” has the meaning assigned to it in Section 9.03(b).

“Ineligible Institution” has the meaning assigned to it in Section 9.04(b).

“Index Debt” means senior, unsecured, long-term indebtedness for borrowed money
of the Borrower that is not guaranteed by any other Person or subject to any
other credit enhancement.

“Information” has the meaning assigned to it in Section 9.12.

“Insurance Subsidiary” means any Subsidiary which is engaged in the insurance
business.

“Interest Election Request” means a request by the Borrower to convert or
continue a Revolving Borrowing in accordance with Section 2.05, which shall be
substantially in the form of Exhibit C or any other form approved by the
Administrative Agent.

“Interest Payment Date” means (a) with respect to any ABR Loan, the last day of
each March, June, September and December and the Maturity Date, and (b) with
respect to any Eurodollar Loan, the last day of each Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months’ duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months’ duration after the first day of such Interest Period, and the Maturity
Date.

“Interest Period” means, with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect; provided, that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the case of a Eurodollar
Borrowing only, such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar
Borrowing that commences on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the last calendar
month of such Interest Period) shall end on the last Business Day of the last

12

736428214 20644379

 

calendar month of such Interest Period.  For purposes hereof, the date of a
Borrowing initially shall be the date on which such Borrowing is made and, in
the case of a Borrowing, thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing.

 “Investment” of a Person means any loan, advance (other than commission, travel
and similar advances to officers and employees made in the ordinary course of
business), extension of credit (other than premiums or accounts receivable
arising in the ordinary course of business on terms customary in the trade) or
contribution of capital by such Person; stocks, bonds, mutual funds, partnership
interests, notes, debentures or other securities owned by such Person; any
deposit accounts and certificate of deposit owned by such Person; and structured
notes, derivative financial instruments and other similar instruments or
contracts owned by such Person.

“Investment Grade Obligations” means, as of any date for each Insurance
Subsidiary, Investments having an NAIC investment rating of 1 or 2, or a
Standard & Poor’s rating within the range of ratings from AAA to BBB-, or a
Moody’s rating within the range of ratings from Aaa to Baa3.

“IRS” means the United States Internal Revenue Service.

“Lender Parent” means, with respect to any Lender, any Person as to which such
Lender is, directly or indirectly, a subsidiary.

“Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to an Assignment and Assumption or
otherwise, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption or otherwise.

“LIBO Rate”  means, for an Interest Period for a Borrowing of Eurodollar Loans,
(a) the LIBOR Index Rate for such Interest Period, if such rate is available,
and (b) if the LIBOR Index Rate cannot be determined, the arithmetic average of
the rates of interest per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) at which deposits in U.S. Dollars in immediately available funds
are offered to Administrative Agent at 11:00 a.m. (London, England time) two (2)
Business Days before the beginning of such Interest Period by three (3) or more
major banks in the interbank eurodollar market selected by Administrative Agent
for delivery on the first day of and for a period equal to such Interest Period
and in an amount equal or comparable to the principal amount of the Eurodollar
Loan scheduled to be made as part of such Borrowing, provided that in no event
shall “LIBO Rate” be less than 0.00%.

“LIBOR Index Rate” means, for any Interest Period, the rate per annum (rounded
upwards, if necessary, to the next higher one hundred thousandth of a percentage
point) for deposits in U.S. Dollars for a period equal to such Interest Period,
as reported on the applicable Bloomberg screen page (or such other commercially
available source providing such quotations as may be designated by
Administrative Agent from time to time) as of 11:00 a.m. (London, England time)
on the day two (2) Business Days before the commencement of such Interest
Period.

13

736428214 20644379

 

“License” means any license, certificate of authority, permit or other
authorization which is required to be obtained from any Governmental Authority
in connection with the operation, ownership or transaction of insurance
business.

“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.

“Loan Documents” means this Agreement, including schedules and exhibits hereto,
and any agreements entered into in connection herewith by the Borrower with or
in favor of the Administrative Agent and/or the Lenders, including this
Agreement, the notes, any amendments, modifications or supplements thereto or
waivers thereof, legal opinions issued in connection with the other Loan
Documents, and any other documents prepared in connection with the other Loan
Documents, if any.

“Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.

“Margin Stock” means margin stock within the meaning of Regulations T, U and X,
as applicable.

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, prospects or condition, financial or otherwise, of the
Borrower and the Subsidiaries taken as a whole, (b) the ability of the Borrower
to perform any of its Obligations or (c) the validity or enforceability of any
of the Loan Documents or the rights or remedies of the Administrative Agent or
the Lenders thereunder.

“Material Indebtedness” means Indebtedness (other than the Loans), or
obligations in respect of one or more Swap Agreements, of any one or more of the
Borrower and its Subsidiaries in an aggregate principal amount exceeding
$10,000,000.  For purposes of determining Material Indebtedness, the “principal
amount” of the obligations of the Borrower or any Subsidiary in respect of any
Swap Agreement at any time shall be the maximum aggregate amount (giving effect
to any netting agreements) that the Borrower or such Subsidiary would be
required to pay if such Swap Agreement were terminated at such time.

“Material Indebtedness Agreement” means any agreement under which any Material
Indebtedness was created or is governed or which provides for the incurrence of
Indebtedness in an amount which would constitute Material Indebtedness (whether
or not an amount of Indebtedness constituting Material Indebtedness is
outstanding thereunder).

“Maturity Date” means, with respect to any Lender, the later of (a) March 27,
2023 and (b) if the maturity date is extended for such Lender pursuant to
Section 2.18, such extended maturity date as determined pursuant to such
Section; provided,  however, in each case, if such date is not a Business Day,
the Maturity Date shall be the next preceding Business Day.

14

736428214 20644379

 

“Maximum Rate” has the meaning assigned to it in Section 9.14.

“MHIC” means Mt. Hawley Insurance Company, an Illinois insurance company.

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.

“NAIC” means the National Association of Insurance Commissioners or any
successor thereto, or in lieu thereof, any other association, agency or other
organization performing advisory, coordination or other like functions among
insurance departments, insurance commissioners and similar Governmental
Authorities of the various states of the United States toward the promotion of
uniformity in the practices of such Governmental Authorities.

“Non-extending Lender” has the meaning assigned to such term in Section 2.18(a).

 “Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, the Borrower arising under any Loan Document or
otherwise with respect to any Loan, whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest and fees that accrue after
the commencement by or against the Borrower or any Affiliate thereof of any
proceeding under any debtor relief laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed or
allowable claims in such proceeding.  Without limiting the foregoing, the
Obligations include (a) the obligation to pay principal, interest, charges,
expenses, fees, indemnities and other amounts payable by the Borrower under any
Loan Document and (b) the obligation of the Borrower to reimburse any amount in
respect of any of the foregoing that the Administrative Agent or any Lender, in
each case in its sole discretion, may elect to pay or advance on behalf of the
Borrower.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 2.16).

 “Participant” has the meaning assigned to such term in Section 9.04(c).

“Participant Register” has the meaning assigned to such term in Section 9.04(c).

15

736428214 20644379

 

“Patriot Act” has the meaning assigned to it in Section 9.16.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

“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 or
Section 302 of ERISA, and in respect of which the Borrower 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.

“Plan Asset Regulations” means 29 CFR § 2510.3-101 et seq., as modified by
Section 3(42) of ERISA, as amended from time to time.

 “PTE” means a prohibited transaction class exemption issued by the U.S.
Department of Labor, as any such exemption may be amended from time to time.

“Quarterly Statement” means the quarterly statutory financial statement of any
Insurance Subsidiary required to be filed with the insurance commissioner (or
similar authority) of its jurisdiction of incorporation or, if no specific form
is so required, in the form of financial statements permitted by such insurance
commissioner (or such similar authority) to be used for filing quarterly
statutory financial statements and shall contain the type of financial
information permitted by such insurance commissioner (or such similar authority)
to be disclosed therein, together with all exhibits or schedules filed
therewith.

“Rating Agency” means each of S&P and Moody’s.

“Recipient” means (a) the Administrative Agent and (b) any Lender, as
applicable.

“Register” has the meaning assigned to such term in Section 9.04(b).

“Regulation D” means Regulation D of the Federal Reserve Board, as in effect
from time to time and all official rulings and interpretations thereunder or
thereof.

“Regulation T” means Regulation T of the Federal Reserve Board, as in effect
from time to time and all official rulings and interpretations thereunder or
thereof.

“Regulation U” means Regulation U of the Federal Reserve Board, as in effect
from time to time and all official rulings and interpretations thereunder or
thereof.

“Regulation X” means Regulation X of the Federal Reserve Board, as in effect
from time to time and all official rulings and interpretations thereunder or
thereof.

16

736428214 20644379

 

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.

“Replacement Lender” has the meaning assigned to such term in Section 2.18(c).

“Required Lenders” means, subject to Section 2.17, at any time, Lenders having
Revolving Credit Exposures and unused Commitments representing more than 50% of
the sum of the Total Revolving Credit Exposure and unused Commitments at such
time.

“Response Date” has the meaning assigned to such term in Section 2.18(a).

“Responsible Officer” means the president, Financial Officer or other executive
officer of the Borrower.

“Revolving Credit Exposure” means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender’s Revolving Loans at such
time.

“Revolving Loan” means a Loan made pursuant to Section 2.03.

“Risk Based Capital Act” means the Risk-Based Capital for Property and Casualty
Insurers Model Act and the rules, regulations and procedures prescribed from
time to time by the NAIC with respect thereto, in each case as amended, modified
or supplemented from time to time by the NAIC.

“RLIC” means RLI Insurance Company, an Illinois insurance company.

“S&P” means Standard & Poor’s Rating Services, a Standard & Poor’s Financial
Services LLC business.

“Sanctioned Country” means, at any time, a country, region or territory which is
itself the subject or target of any Sanctions (at the time of this Agreement,
Crimea, Cuba, Iran, North Korea and Syria).

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury or the U.S. Department of
State, (b) any Person operating, organized or resident in a Sanctioned Country,
(c) any Person owned or controlled by any such Person or Persons described in
the foregoing clauses (a) or (b), or (d) any Person otherwise the subject of any
Sanctions.

“Sanctions” means all economic or financial sanctions or trade embargoes
imposed, administered or enforced from time to time by the U.S. government,
including those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State.

“SAP” means, with respect to any Insurance Subsidiary, the statutory accounting
practices prescribed or permitted by the insurance commissioner (or other
similar authority) in

17

736428214 20644379

 

the jurisdiction of such Person for the preparation of annual statements and
other financial reports by insurance companies of the same type as such Person
in effect from time to time, applied in a manner consistent with those used in
preparing the financial statements referred to in Section 5.01.

“SEC” means the Securities and Exchange Commission of the United State of
America.

“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 and/or one or more subsidiaries of the parent.

“Subsidiary” means any subsidiary of the Borrower.

“Substantial Portion” means, with respect to the property of the Borrower and
its Subsidiaries, property which represents more than 10% of the consolidated
assets of the Borrower and its Subsidiaries or property which is responsible for
more than 10% of the consolidated net revenue of the Borrower and its
Subsidiaries, in each case, as would be shown in the consolidated financial
statements of the Borrower and its Subsidiaries as at the beginning of the
twelve-month period ending with the month in which such determination is made
(or if financial statements have not been delivered hereunder for that month
which begins the twelve-month period, then the financial statements delivered
hereunder for the quarter ending immediately prior to that month).

“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Borrower or the
Subsidiaries shall be a Swap Agreement.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), value added taxes, or any other
goods and services, use or sales taxes, assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

“Total Revolving Credit Exposure” means, the sum of the outstanding principal
amount of all Lenders’ Revolving Loans.

18

736428214 20644379

 

“Transactions” means the execution, delivery and performance by the Borrower of
this Agreement, the borrowing of Loans and the use of the proceeds thereof.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

“U.S. Person” means a “United States person” within the meaning of Section
7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 2.17(f)(ii)(B)(3).

“Wholly-Owned Subsidiary” means a Subsidiary that is 100% owned by the Borrower.

“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.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

SECTION 1.02. Classification of Loans and Borrowings.  For purposes of this
Agreement, Loans may be classified and referred to by Type (e.g., a “Eurodollar
Loan”).  Borrowings also may be classified and referred to by Type (e.g., a
“Eurodollar Borrowing”).

SECTION 1.03. Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”.  The word
“will” shall be construed to have the same meaning and effect as the word
“shall”.  Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person’s successors and assigns to the extent permitted hereby, (c) the words
“herein”, “hereof” and “hereunder”, and words of similar import, shall
be construed to refer to this Agreement in its entirety and not to any
particular provision hereof, (d) all references herein to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement, (e) any reference to any law,
rule or regulation herein shall, unless otherwise specified, refer to such law,
rule or regulation as amended, modified or supplemented from time to time and
(f) the words “asset” and “property” shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.

19

736428214 20644379

 

SECTION 1.04. Accounting Terms; GAAP.    Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP or SAP, as applicable, as in effect from time to time,
unless otherwise specified; provided that, if the Borrower notifies the
Administrative Agent that the Borrower requests an amendment to any provision
hereof to eliminate the effect of any change occurring after the date hereof in
GAAP or in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.  Notwithstanding any other provision contained herein, all
terms of an accounting or financial nature used herein shall be construed, and
all computations of amounts and ratios referred to herein shall be made, without
giving effect to (i) any election under Financial Accounting Standards Board
Accounting Standards Codification 825 (or any other Financial Accounting
Standard having a similar result or effect) to value any Indebtedness or other
liabilities of the Borrower or any Subsidiary at “fair value”, as defined
therein and (ii) any treatment of Indebtedness in respect of convertible debt
instruments under Accounting Standards Codification 470-20 (or any other
Accounting Standards Codification or Financial Accounting Standard having a
similar result or effect) to value any such Indebtedness in a reduced or
bifurcated manner as described therein, and such Indebtedness shall at all times
be valued at the full stated principal amount thereof.

(a) References herein to particular columns, lines or sections of any Person’s
Annual Statement shall be deemed, where appropriate, to be references to the
corresponding column, line or section of such Person’s Quarterly Statement, or
if no such corresponding column, line or section exists or if any report form
changes, then to the corresponding item referenced thereby.  In the event that
the columns, lines or sections of the Annual Statement referenced herein are
changed or renumbered, all such references shall be deemed references to such
column, line or section as so renumbered or changed.  References herein to the
Risk Based Capital Act shall be deemed to be references to such act as in effect
on the date of this Agreement; provided, that the Agent, the Lenders and the
Borrower agree to make mutually acceptable modifications to Section 6.07 hereof
following the request by any thereof upon any modification to such act.

SECTION 1.05. Interest Rates.  The Administrative Agent does not warrant or
accept responsibility for, and shall not have any liability with respect to, the
administration, submission or any other matter related to the rates in the
definition of “LIBO Rate” or with respect to any comparable or successor rate
thereto, or replacement rate therefor.

ARTICLE II

The Credits

SECTION 2.01. Commitments.  Subject to the terms and conditions set forth
herein, each Lender agrees to make Revolving Loans to the Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result (after giving effect to any application of proceeds of such Borrowing
pursuant to Section 2.07) in (a) such Lender’s

20

736428214 20644379

 

Revolving Credit Exposure exceeding such Lender’s Commitment or (b) the Total
Revolving Credit Exposure exceeding the total Commitments.  Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Revolving Loans.

SECTION 2.02. Loans and Borrowings.   Each Revolving Loan shall be made as part
of a Borrowing consisting of Revolving Loans made by the Lenders ratably in
accordance with their respective Commitments.  The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender’s failure to make Loans
as required.

(a) Subject to Section 2.14, each Revolving Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith.   Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.

(b) At the commencement of each Interest Period for any Eurodollar Revolving
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $500,000.  At the time that each ABR
Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $1,000,000 and not less than $100,000; provided that
an ABR Revolving Borrowing may be in an aggregate amount that is equal to the
entire unused balance of the total Commitments.  Borrowings of more than one
Type may be outstanding at the same time; provided that there shall not at any
time be more than a total of six (6) Eurodollar Revolving Borrowings
outstanding.

(c) Notwithstanding any other provision of this Agreement, the Borrower shall
not be entitled to request, or to elect to convert or continue, any Borrowing if
the Interest Period requested with respect thereto would end after the Maturity
Date.

SECTION 2.03. Requests for Revolving Borrowings.  To request a Revolving
Borrowing, the Borrower shall notify the Administrative Agent of such request by
submitting a Borrowing Request (a) in the case of a Eurodollar Borrowing, not
later than 12:00 noon, Chicago time, two Business Days before the date of the
proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 12:00
noon, Chicago time, the date of the proposed Borrowing.  Each such Borrowing
Request shall be irrevocable and shall be signed by a Responsible Officer of the
Borrower.  Each such Borrowing Request shall specify the following information
in compliance with Section 2.02:

(i) the aggregate amount of the requested Borrowing;

(ii) the date of such Borrowing, which shall be a Business Day;

(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

21

736428214 20644379

 

(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”; and

(v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.04.

If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing.  If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Borrower shall be deemed to have selected an Interest Period of one month’s
duration.  Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.

SECTION 2.04. Funding of Borrowings.   Each Lender shall make each Loan to be
made by it hereunder on the proposed date thereof solely by wire transfer of
immediately available funds, by 2:00 p.m., Chicago time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders.  The Administrative Agent will make such Loans available to the
Borrower by promptly crediting the funds so received in the aforesaid account of
the Administrative Agent to an account of the Borrower maintained with the
Administrative Agent in Chicago, Illinois or New York City and designated by the
Borrower in the applicable Borrowing Request.

(a) Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount.  In such event, if a Lender has not in fact made its share of the
applicable Borrowing available to the Administrative Agent, then the applicable
Lender and the Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to
but excluding the date of payment to the Administrative Agent, at (i) in the
case of such Lender, the Federal Funds Rate or (ii) in the case of the Borrower,
the interest rate applicable to ABR Loans.  If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender’s Loan
included in such Borrowing.

SECTION 2.05. Interest Elections.   Each Revolving Borrowing initially shall be
of the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Revolving Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request.  Thereafter, the Borrower may elect to
convert such Borrowing to a different Type or to continue such Borrowing and, in
the case of a Eurodollar Revolving Borrowing, may elect Interest Periods
therefor, all as provided in this Section.  The Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such

22

736428214 20644379

 

Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.

(a) To make an election pursuant to this Section, the Borrower shall notify the
Administrative Agent of such election by the time that a Borrowing Request would
be required under Section 2.03 if the Borrower were requesting a Revolving
Borrowing of the Type resulting from such election to be made on the effective
date of such election.  Each such Interest Election Request shall be irrevocable
and shall be signed by a Responsible Officer of the Borrower.

(b) Each Interest Election Request shall specify the following information in
compliance with Section 2.02:

(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and

(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period
to be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.

(c) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.

(d) If the Borrower fails to deliver a timely Interest Election Request with
respect to a Eurodollar Revolving Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing.  Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing (i) no outstanding Revolving Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Revolving Borrowing shall be converted to an ABR Borrowing at the end
of the Interest Period applicable thereto.

SECTION 2.06. Termination and Reduction of, and Increases in, Commitments. 
 Unless previously terminated, the Commitments shall terminate on the Maturity
Date.

23

736428214 20644379

 

(a) The Borrower may at any time terminate, or from time to time reduce, the
Commitments; provided that (i) each reduction of the Commitments shall be in an
amount that is an integral multiple of $500,000 and not less than $1,000,000 and
(ii) the Borrower shall not terminate or reduce the Commitments if, after giving
effect to any concurrent prepayment of the Loans in accordance with Section
2.08, the Total Revolving Credit Exposure would exceed the total Commitments.

(b) The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under paragraph (b) of this Section at least
three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof.  Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant
to this Section shall be irrevocable; provided that a notice of termination of
the Commitments delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied.  Any termination or reduction of the Commitments shall be permanent. 
Each reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.

(c) The Borrower may, at its option, seek to increase the aggregate Commitments
by up to an aggregate amount of $60,000,000 (resulting in a maximum aggregate
Commitment of $120,000,000) upon at least three (3) Business Days’ prior written
notice to the Administrative Agent, which notice shall specify the amount of any
such increase and shall be delivered at a time when no Default or Event of
Default has occurred and is continuing; provided that each such increase shall
be in minimum incremental amounts of $5,000,000.  The Borrower shall, after
giving such notice, first offer the increase in the aggregate Commitment on a
ratable basis to the Lenders (which may be declined by any Lender in its sole
discretion).  If any existing Lender does not accept the offer to increase its
Commitment, the Borrower may offer the amount so declined to one or more Lenders
and/or to other Lenders or entities reasonably acceptable to the Administrative
Agent.  No increase in the aggregate Commitment shall become effective until the
existing or new Lenders extending such incremental Commitment amount and the
Borrower shall have delivered to the Administrative Agent a document in form
reasonably satisfactory to the Administrative Agent pursuant to which any such
existing Lender states the amount of its Commitment increase, any such new
Lender states its Commitment amount and agrees to assume and accept the
obligations and rights of a Lender hereunder and the Borrower accepts such
incremental Commitments.  The Lenders (new or existing) shall accept an
assignment from the existing Lenders, and the existing Lenders shall make an
assignment to the new or existing Lender accepting a new or increased
Commitment, of a direct or participation interest in each then outstanding
Borrowing such that, after giving effect thereto, all credit exposure hereunder
is held ratably by the Lenders in proportion to their respective Commitments. 
Assignments pursuant to the preceding sentence shall be made in exchange for the
principal amount assigned plus accrued and unpaid interest and facility fees. 
The Borrower shall make any payments under Section 2.13 resulting from such
assignments.  Any such increase of the aggregate Commitment shall be subject to
receipt by the Administrative Agent from the Borrower of resolutions approving
the increase in the aggregate Commitment and such

24

736428214 20644379

 

other supplemental opinions, resolutions, certificates and other documents as
the Administrative Agent may reasonably request.

SECTION 2.07. Repayment of Loans; Evidence of Debt.   The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Revolving Loan on the
Maturity Date.

(a) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.

(b) The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Type thereof and the Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Administrative Agent hereunder
for the account of the Lenders and each Lender’s share thereof.

(c) The entries made in the accounts maintained pursuant to paragraph (b) or (c)
of this Section shall be prima facie evidence of the existence and amounts of
the obligations recorded therein; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.

(d) Any Lender may request that Loans made by it be evidenced by a promissory
note.  In such event, the Borrower shall prepare, execute and deliver to such
Lender a promissory note payable to such Lender (or, if requested by such
Lender, to such Lender and its registered assigns) and in a form approved by the
Administrative Agent.  Thereafter, the Loans evidenced by such promissory note
and interest thereon shall at all times (including after assignment pursuant to
Section 9.04) be represented by one or more promissory notes in such form.

SECTION 2.08. Prepayment of Loans.   The Borrower shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part, subject
to prior notice in accordance with paragraph (b) of this Section.

(a) The Borrower shall notify the Administrative Agent by telephone (confirmed
by electronic mail) of any prepayment hereunder (i) in the case of prepayment of
a Eurodollar Revolving Borrowing, not later than 12:00 noon, Chicago time, three
Business Days before the date of prepayment, or (ii) in the case of prepayment
of an ABR Revolving Borrowing, not later than 12:00 noon, Chicago time, one
Business Day before the date of prepayment.  Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid; provided that, if a notice of
prepayment is given in connection with a conditional notice of termination of
the Commitments as contemplated by Section 2.06, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.06.  Promptly following receipt of any such notice relating to a
Revolving Borrowing, the Administrative Agent shall advise the Lenders of the
contents

25

736428214 20644379

 

thereof.  Each partial prepayment of any Revolving Borrowing shall be in an
amount that would be permitted in the case of an advance of a Revolving
Borrowing of the same Type as provided in Section 2.02.  Each prepayment of a
Revolving Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing.  Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.10 and any break funding payments required by
Section 2.13.

SECTION 2.09. Fees.   The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a commitment fee, which shall accrue at the
Applicable Rate on the daily unused portion of the Commitment of such Lender
during the period from and including the date hereof to but excluding the date
on which such Commitment terminates.  Commitment fees accrued through and
including the last day of March, June, September and December of each year shall
be payable in arrears on the fifteenth day following such last day and on the
date on which the Commitments terminate, commencing on the first such date to
occur after the date hereof.  All commitment fees shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).

(a) The Borrower agrees to pay to the Administrative Agent, for its own account,
fees payable in the amounts and at the times separately agreed upon between the
Borrower and the Administrative Agent.

(b) All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, in the case of
commitment fees, to the Lenders.  Fees paid shall not be refundable under any
circumstances.

SECTION 2.10. Interest.   The Loans comprising each ABR Borrowing shall bear
interest at the Alternate Base Rate plus the Applicable Rate.

(a) The Loans comprising each Eurodollar Borrowing shall bear interest in the
case of a Eurodollar Revolving Loan, at the Adjusted LIBO Rate for the Interest
Period in effect for such Borrowing plus the Applicable Rate.

(b) Notwithstanding anything to the contrary contained in this Section 2.10 or
otherwise, during the continuance of a Default or Event of Default the Required
Lenders may, at their option, by notice to the Borrower (which notice may be
revoked at the option of the Required Lenders notwithstanding any provision of
Section 9.02 requiring unanimous consent of the Lenders to changes in interest
rates), declare that no Loan may be made as, converted into or continued as a
Eurodollar Loan.  During the continuance of an Event of Default the Required
Lenders may, at their option, by notice to the Borrower (which notice may be
revoked at the option of the Required Lenders notwithstanding any provision of
Section 9.02 requiring unanimous consent of the Lenders to changes in interest
rates), declare that (i) each Eurodollar Borrowing shall bear interest for the
remainder of the applicable Interest Period at the rate otherwise applicable to
such Interest Period plus 2% per annum and (ii) each ABR Loan shall bear
interest at a rate per annum equal to the rate applicable to ABR Loans in effect
from time to time plus 2% per annum, provided that, during the continuance of an
Event of Default under

26

736428214 20644379

 

Section 7.1(f) or (g), the interest rates set forth in clauses (i) and (ii)
above shall be applicable to all Loans without any election or action on the
part of the Administrative Agent or any Lender.

(c) Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date for such Loan and upon termination of the Commitments; provided
that (i) interest accrued pursuant to paragraph (d) of this Section shall be
payable on demand, (ii) in the event of any repayment or prepayment of any Loan
(other than a prepayment of an ABR Revolving Loan prior to the end of the
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any Eurodollar Revolving Loan prior to the end of the
current Interest Period therefor, accrued interest on such Loan shall be payable
on the effective date of such conversion.

(d) All interest hereunder shall be computed on the basis of a year of 360 days,
except that interest computed by reference to the Alternate Base Rate at times
when the Alternate Base Rate is based on the prime rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and in each case shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).  The applicable Alternate Base Rate, Adjusted LIBO Rate
or LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

SECTION 2.11. Alternate Rate of Interest.   If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

(i) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable (including
because the LIBOR Index Rate is not available or published on a current basis),
for such Interest Period; or

(ii) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or electronic mail as promptly as practicable thereafter
and, until the Administrative Agent notifies the Borrower and the Lenders that
the circumstances giving rise to such notice no longer exist, (A) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective, and (B) if any Borrowing Request requests a Eurodollar Revolving
Borrowing, such Borrowing shall be made as an ABR Borrowing; provided that if
the circumstances giving rise to such notice affect only one Type of Borrowing,
then the other Type of Borrowing shall be permitted.

(e) Effect of Benchmark Transition Event

(i)  Benchmark Replacement.  Notwithstanding anything to the contrary herein or
in any other Loan Document, upon the occurrence of a Benchmark Transition

27

736428214 20644379

 

Event or an Early Opt-in Election, as applicable, the Administrative Agent and
the Borrower may amend this Agreement to replace the LIBO Rate with a Benchmark
Replacement.  Any such amendment with respect to a Benchmark Transition Event
will become effective at 5:00 p.m. on the fifth (5th) Business Day after the
Administrative Agent has posted such proposed amendment to all Lenders and the
Borrower so long as the Administrative Agent has not received, by such time,
written notice of objection to such amendment from Lenders comprising the
Required Lenders.  Any such amendment with respect to an Early Opt-in Election
will become effective on the date that Lenders comprising the Required Lenders
have delivered to the Administrative Agent written notice that such Required
Lenders accept such amendment.  No replacement of LIBOR with a Benchmark
Replacement pursuant to this Section 2.11(b) will occur prior to the applicable
Benchmark Transition Start Date.

(ii)    Benchmark Replacement Conforming Changes.  In connection with the
implementation of a Benchmark Replacement, the Administrative Agent will have
the right to make Benchmark Replacement Conforming Changes from time to time
and, notwithstanding anything to the contrary herein or in any other Loan
Document, any amendments implementing such Benchmark Replacement Conforming
Changes will become effective without any further action or consent of any other
party to this Agreement.

(iii)    Notices; Standards for Decisions and Determinations.  The
Administrative Agent will promptly notify the Borrower and the Lenders of (i)
any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as
applicable, and its related Benchmark Replacement Date and Benchmark Transition
Start Date, (ii) the implementation of any Benchmark Replacement, (iii) the
effectiveness of any Benchmark Replacement Conforming Changes and (iv) the
commencement or conclusion of any Benchmark Unavailability Period.  Any
determination, decision or election that may be made by the Administrative Agent
or Lenders pursuant to this Section titled “Effect of Benchmark Transition
Event,” including any determination with respect to a tenor, rate or adjustment
or of the occurrence or non-occurrence of an event, circumstance or date and any
decision to take or refrain from taking any action, will be conclusive and
binding absent manifest error and may be made in its or their sole discretion
and without consent from any other party hereto, except, in each case, as
expressly required pursuant to this Section 2.11(b).

(iv)    Benchmark Unavailability Period.  Upon the Borrower’s receipt of notice
of the commencement of a Benchmark Unavailability Period, the Borrower may
revoke any request for a Eurodollar Borrowing of, conversion to or continuation
of Eurodollar Loans to be made, converted or continued during any Benchmark
Unavailability Period and, failing that, the Borrower will be deemed to have
converted any such request into a request for a Borrowing of or conversion to
ABR Loans.  During any Benchmark Unavailability Period, the component of ABR
based upon LIBOR will not be used in any determination of ABR.

(v)  Certain Defined Terms.  As used in this Section 2.11(b):

28

736428214 20644379

 

“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate
(which may include Term SOFR) that has been selected by the Administrative Agent
and the Borrower giving due consideration to (i) any selection or recommendation
of a replacement rate or the mechanism for determining such a rate by the
Relevant Governmental Body or (ii) any evolving or then-prevailing market
convention for determining a rate of interest as a replacement to LIBOR for U.S.
dollar-denominated syndicated credit facilities and (b) the Benchmark
Replacement Adjustment; provided that, if the Benchmark Replacement as so
determined would be less than zero, the Benchmark Replacement will be deemed to
be zero for the purposes of this Agreement.

“Benchmark Replacement Adjustment” means, with respect to any replacement of
LIBOR with an Unadjusted Benchmark Replacement for each applicable Interest
Period, the spread adjustment, or method for calculating or determining such
spread adjustment, (which may be a positive or negative value or zero) that has
been selected by the Administrative Agent and the Borrower giving due
consideration to (i) any selection or recommendation of a spread adjustment, or
method for calculating or determining such spread adjustment, for the
replacement of the LIBO Rate with the applicable Unadjusted Benchmark
Replacement by the Relevant Governmental Body or (ii) any evolving or
then-prevailing market convention for determining a spread adjustment, or method
for calculating or determining such spread adjustment, for the replacement of
LIBOR with the applicable Unadjusted Benchmark Replacement for U.S.
dollar-denominated syndicated credit facilities at such time.

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark
Replacement, any technical, administrative or operational changes (including
changes to the definition of “ABR,” the definition of “Interest Period,” timing
and frequency of determining rates and making payments of interest and other
administrative matters) that the Administrative Agent decides may be appropriate
to reflect the adoption and implementation of such Benchmark Replacement and to
permit the administration thereof by the Administrative Agent in a manner
substantially consistent with market practice (or, if the Administrative Agent
decides that adoption of any portion of such market practice is not
administratively feasible or if the Administrative Agent determines that no
market practice for the administration of the Benchmark Replacement exists, in
such other manner of administration as the Administrative Agent decides is
reasonably necessary in connection with the administration of this Agreement).

“Benchmark Replacement Date” means the earlier to occur of the following events
with respect to the LIBO Rate:

(1)in the case of clause (1) or (2) of the definition of “Benchmark Transition
Event,” the later of (a) the date of the public statement or publication of
information referenced therein and (b) the date on which the administrator of
the LIBO Rate permanently or indefinitely ceases to provide the LIBO Rate; or

(2)in the case of clause (3) of the definition of “Benchmark Transition Event,”
the date of the public statement or publication of information referenced
therein.

29

736428214 20644379

 

“Benchmark Transition Event” means the occurrence of one or more of the
following events with respect to the LIBO Rate:

(1)a public statement or publication of information by or on behalf of the
administrator of the LIBO Rate announcing that such administrator has ceased or
will cease to provide the LIBO Rate, permanently or indefinitely, provided that,
at the time of such statement or publication, there is no successor
administrator that will continue to provide the LIBO Rate;

(2)a public statement or publication of information by the regulatory supervisor
for the administrator of the LIBO Rate, the U.S. Federal Reserve System, an
insolvency official with jurisdiction over the administrator for the LIBO Rate,
a resolution authority with jurisdiction over the administrator for the LIBO
Rate or a court or an entity with similar insolvency or resolution authority
over the administrator for the LIBO Rate, which states that the administrator of
the LIBO Rate has ceased or will cease to provide the LIBO Rate permanently or
indefinitely, provided that, at the time of such statement or publication, there
is no successor administrator that will continue to provide the LIBO Rate; or

(3)a public statement or publication of information by the regulatory supervisor
for the administrator of the LIBO Rate announcing that the LIBO Rate is no
longer representative.

“Benchmark Transition Start Date” means (a) in the case of a Benchmark
Transition Event, the earlier of (i) the applicable Benchmark Replacement Date
and (ii) if such Benchmark Transition Event is a public statement or publication
of information of a prospective event, the 90th day prior to the expected date
of such event as of such public statement or publication of information (or if
the expected date of such prospective event is fewer than 90 days after such
statement or publication, the date of such statement or publication) and (b) in
the case of an Early Opt-in Election, the date specified by the Administrative
Agent or the Required Lenders, as applicable, by notice to the Borrower, the
Administrative Agent (in the case of such notice by the Required Lenders) and
the Lenders.

“Benchmark Unavailability Period” means, if a Benchmark Transition Event and its
related Benchmark Replacement Date have occurred with respect to the LIBO Rate
and solely to the extent that the LIBO Rate has not been replaced with a
Benchmark Replacement, the period (x) beginning at the time that such Benchmark
Replacement Date has occurred if, at such time, no Benchmark Replacement has
replaced the LIBO Rate for all purposes hereunder in accordance with the Section
titled “Effect of Benchmark Transition Event” and (y) ending at the time that a
Benchmark Replacement has replaced the LIBO Rate for all purposes hereunder
pursuant to the Section titled “Effect of Benchmark Transition Event.”

“Early Opt-in Election” means the occurrence of:

30

736428214 20644379

 

(1)(i) a determination by the Administrative Agent or (ii) a notification by the
Required Lenders to the Administrative Agent (with a copy to the Borrower) that
the Required Lenders have determined that U.S. dollar-denominated syndicated
credit facilities being executed at such time, or that include language similar
to that contained in this Section titled “Effect of Benchmark Transition Event,”
are being executed or amended, as applicable, to incorporate or adopt a new
benchmark interest rate to replace LIBOR, and

(2)(i) the election by the Administrative Agent or (ii) the election by the
Required Lenders to declare that an Early Opt-in Election has occurred and the
provision, as applicable, by the Administrative Agent of written notice of such
election to the Borrower and the Lenders or by the Required Lenders of written
notice of such election to the Administrative Agent.

“Federal Reserve Bank of New York’s Website” means the website of the Federal
Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.

“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal
Reserve Bank of New York, or a committee officially endorsed or convened by the
Federal Reserve Board and/or the Federal Reserve Bank of New York or any
successor thereto.

“SOFR” with respect to any day means the secured overnight financing rate
published for such day by the Federal Reserve Bank of New York, as the
administrator of the benchmark, (or a successor administrator) on the Federal
Reserve Bank of New York’s Website.

“Term SOFR” means the forward-looking term rate based on SOFR that has been
selected or recommended by the Relevant Governmental Body.

“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the
Benchmark Replacement Adjustment.

 

SECTION 2.12. Increased Costs.   If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, liquidity or
similar requirement (including any compulsory loan requirement, insurance charge
or other assessment) against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate);

(ii) impose on any Lender or the London interbank market any other condition,
cost or expense (other than Taxes) affecting this Agreement or Loans made by
such Lender; or

31

736428214 20644379

 

(iii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B)
Taxes described in clauses (b) through (d) of the definition of Excluded Taxes
and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making, continuing, converting or maintaining
any Loan (or of maintaining its obligation to make any such Loan) or to reduce
the amount of any sum received or receivable by such Lender or such other
Recipient hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or such other Recipient, as the case may be,
such additional amount or amounts as will compensate such Lender or such other
Recipient, as the case may be, for such additional costs incurred or reduction
suffered.

(f) If any Lender determines that any Change in Law regarding capital or
liquidity requirements has or would have the effect of reducing the rate of
return on such Lender’s capital or on the capital of such Lender’s holding
company, if any, as a consequence of this Agreement or the Loans made by such
Lender to a level below that which such Lender or such Lender’s holding company
could have achieved but for such Change in Law (taking into consideration such
Lender’s policies and the policies of such Lender’s holding company with respect
to capital adequacy and liquidity), then from time to time the Borrower will pay
to such Lender such additional amount or amounts as will compensate such Lender
or such Lender’s holding company for any such reduction suffered.

(g) A certificate of a Lender setting forth the amount or amounts necessary to
compensate such Lender or its holding company, as the case may be, as specified
in paragraph (a) or (b) of this Section shall be delivered to the Borrower and
shall be conclusive absent manifest error.  The Borrower shall pay such Lender
the amount shown as due on any such certificate within 10 days after receipt
thereof.

(h) Failure or delay on the part of any Lender to demand compensation pursuant
to this Section shall not constitute a waiver of such Lender’s right to demand
such compensation; provided that the Borrower shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than 120 days prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender’s intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the 120-day period referred to above shall be
extended to include the period of retroactive effect thereof.

SECTION 2.13. Break Funding Payments.  In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section
2.08(b) and is revoked in accordance therewith), or (d) the assignment of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant

32

736428214 20644379

 

to Section 2.16, then, in any such event, the Borrower shall compensate each
Lender for the loss, cost and expense attributable to such event.  In the case
of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed
to include an amount determined by such Lender to be the excess, if any, of (i)
the amount of interest which would have accrued on the principal amount of such
Loan had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market.  A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error.  The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.

SECTION 2.14. Withholding of Taxes; Gross-Up;  Payments Free of Taxes.   Any and
all payments by or on account of any obligation of the Borrower under any Loan
Document shall be made without deduction or withholding for any Taxes, except as
required by applicable law.  If any applicable law (as determined in the good
faith discretion of an applicable withholding agent) requires the deduction or
withholding of any Tax from any such payment by a withholding agent, then the
applicable withholding agent shall be entitled to make such deduction or
withholding and shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with applicable law and, if such
Tax is an Indemnified Tax, then the sum payable by the Borrower shall be
increased as necessary so that after such deduction or withholding has been made
(including such deductions and withholdings applicable to additional sums
payable under this Section) the applicable Recipient receives an amount equal to
the sum it would have received had no such deduction or withholding been made.

(a) Payment of Other Taxes by the Borrower.  The Borrower shall timely pay to
the relevant Governmental Authority in accordance with applicable law, or at the
option of the Administrative Agent timely reimburse it for, Other Taxes.

(b) Evidence of Payments.  As soon as practicable after any payment of Taxes by
the Borrower to a Governmental Authority pursuant to this Section, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

(c) Indemnification by the Borrower.  The Borrower shall indemnify each
Recipient, within 10 days after demand therefor, for the full amount of any
Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section) payable or paid by such
Recipient or required to be withheld or deducted from a payment to such
Recipient and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority.  A certificate as to the amount
of such payment or liability delivered to

33

736428214 20644379

 

the Borrower by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

(d) Indemnification by the Lenders.  Each Lender shall severally indemnify the
Administrative Agent, within 10 days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that the
Borrower has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Borrower to do so),
(ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 9.04(c) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority.  A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error.  Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (e).

(e) Status of Lenders.  Any Lender that is entitled to an exemption from or
reduction of withholding Tax with respect to payments made under any Loan
Document shall deliver to the Borrower and the Administrative Agent, at the time
or times reasonably requested by the Borrower or the Administrative Agent, such
properly completed and executed documentation reasonably requested by the
Borrower or the Administrative Agent as will permit such payments to be made
without withholding or at a reduced rate of withholding.  In addition, any
Lender, if reasonably requested by the Borrower or the Administrative Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine whether or not such Lender
is subject to backup withholding or information reporting requirements. 
Notwithstanding anything to the contrary in the preceding two sentences, the
completion, execution and submission of such documentation (other than such
documentation set forth in Section 2.14(f)(ii)(A),  (ii)(B) and (ii)(D) below)
shall not be required if in the Lender’s reasonable judgment such completion,
execution or submission would subject such Lender to any material unreimbursed
cost or expense or would materially prejudice the legal or commercial position
of such Lender.

(i) Without limiting the generality of the foregoing, in the event that the
Borrower is a U.S. Person,

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), an executed
copy of IRS Form W-9 certifying that such Lender is exempt from U.S. federal
backup withholding tax;

34

736428214 20644379

 

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), whichever of the following is applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, an executed copy of IRS Form W-8BEN-E or IRS
Form W-8BEN establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “interest” article of such tax treaty and (y)
with respect to any other applicable payments under any Loan Document, IRS Form
W-8BEN-E or IRS Form W-8BEN establishing an exemption from, or reduction of,
U.S. Federal withholding Tax pursuant to the “business profits” or “other
income” article of such tax treaty;

(2) in the case of a Foreign Lender claiming that its extension of credit will
generate U.S. effectively connected income, an executed copy of IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit D-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10
percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B)
of the Code, or a “controlled foreign corporation” described in Section
881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) an
executed copy of IRS Form W-8BEN-E or IRS Form W-8BEN; or

(4) to the extent a Foreign Lender is not the beneficial owner, an executed copy
of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E, IRS Form
W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit
D-2 or Exhibit D-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit D-4 on
behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time

35

736428214 20644379

 

thereafter upon the reasonable request of the Borrower or the Administrative
Agent), executed copies of any other form prescribed by applicable law as a
basis for claiming exemption from or a reduction in U.S. Federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrower or the Administrative Agent
to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative Agent such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or
the Administrative Agent as may be necessary for the Borrower and the
Administrative Agent to comply with their obligations under FATCA and to
determine that such Lender has complied with such Lender’s obligations under
FATCA or to determine the amount to deduct and withhold from such payment. 
Solely for purposes of this clause (D), “FATCA” shall include any amendments
made to FATCA after the date of this Agreement.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Administrative
Agent in writing of its legal inability to do so.

(f) Treatment of Certain Refunds.  If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section (including by the
payment of additional amounts pursuant to this Section), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section with respect to the Taxes giving rise
to such refund), net of all out-of-pocket expenses (including Taxes) of such
indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund).  Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this paragraph (g) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority.  Notwithstanding anything to the contrary
in this paragraph (g), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (g) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid.  This paragraph shall not be construed
to require any indemnified party to make

36

736428214 20644379

 

available its Tax returns (or any other information relating to its Taxes that
it deems confidential) to the indemnifying party or any other Person.

(g) Survival.  Each party’s obligations under this Section shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan
Document.

(h) Defined Terms.  For purposes of this Section, the term “applicable law”
includes FATCA.

SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of Setoffs.   The
Borrower shall make each payment required to be made by it hereunder (whether of
principal, interest or fees, or of amounts payable under Section 2.12,  2.13 or
2.14, or otherwise) prior to 11:00 a.m., Chicago time, on the date when due, in
immediately available funds, without setoff, recoupment or counterclaim.  Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon.  All such payments
shall be made to the Administrative Agent at its offices at 115 S. LaSalle
Street, Chicago, Illinois, 60603 except that payments pursuant to Sections 2.12,
 2.13,  2.14 and 9.03 shall be made directly to the Persons entitled thereto. 
The Administrative Agent shall distribute any such payments received by it for
the account of any other Person to the appropriate recipient promptly following
receipt thereof.  If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension.  All payments
hereunder shall be made in dollars.

(a) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, interest and fees
then due hereunder, such funds shall be applied (i) first, towards payment of
interest and fees then due hereunder, ratably among the parties entitled thereto
in accordance with the amounts of interest and fees then due to such parties,
and (ii) second, towards payment of principal then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal then
due to such parties.

(b) If any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Revolving Loans resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express

37

736428214 20644379

 

terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans to any assignee
or participant, other than to the Borrower or any Subsidiary or Affiliate
thereof (as to which the provisions of this paragraph shall apply).  The
Borrower consents to the foregoing and agrees, to the extent it may effectively
do so under applicable law, that any Lender acquiring a participation
pursuant to the foregoing arrangements may exercise against the Borrower rights
of setoff and counterclaim with respect to such participation as fully as if
such Lender were a direct creditor of the Borrower in the amount of such
participation.

(c) Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Administrative Agent for
the account of the Lenders hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due.  In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the Federal Funds Rate.

SECTION 2.16. Mitigation Obligations; Replacement of Lenders.   If any Lender
requests compensation under Section 2.12, or if the Borrower is required to pay
any Indemnified Taxes or additional amounts to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.14, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.13 or 2.14, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender.  The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

(a) If any Lender requests compensation under Section 2.12, or if the Borrower
is required to pay any Indemnified Taxes or additional amounts to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section
2.14, or if any Lender becomes a  Defaulting Lender, or if any Lender does not
consent to any proposed amendment, supplement, modification, consent or waiver
of any provision of this Agreement or any other Loan Document that requires the
consent of each of the Lenders or each of the Lenders affected thereby has been
obtained), then the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 9.04), all its interests, rights (other than its existing
rights to payments pursuant to Sections 2.12 or 2.14) and obligations under this
Agreement and the other Loan Documents to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of

38

736428214 20644379

 

such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.12 or payments required
to be made pursuant to Section 2.14, such assignment will result in a reduction
in such compensation or payments.  A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.  Each party hereto agrees that an
assignment required pursuant to this paragraph may be effected pursuant to an
Assignment and Assumption executed by the Borrower, the Administrative Agent and
the assignee, and (b) the Lender required to make such assignment need not be a
party thereto in order for such assignment to be effective and shall be deemed
to have consented to an be bound by the terms thereof; provided that, following
the effectiveness of any such assignment, the other parties to such assignment
agree to execute and deliver such documents necessary to evidence such
assignment as reasonably requested by the applicable Lender, provided that any
such documents shall be without recourse to or warranty by the parties thereto.

SECTION 2.17. Defaulting Lenders.

Notwithstanding any provision of this Agreement to the contrary, if any Lender
becomes a Defaulting Lender, then the following provisions shall apply for so
long as such Lender is a Defaulting Lender:

(a) fees shall cease to accrue on the unfunded portion of the Commitment of such
Defaulting Lender pursuant to Section 2.09(a);

(b) any payment of principal, interest, fees or other amounts received by the
Administrative Agent for the account of such Defaulting Lender (whether
voluntary or mandatory, at maturity, pursuant to Section 7.02 or otherwise) or
received by the Administrative Agent from a Defaulting Lender pursuant to
Section 9.08 shall be applied at such time or times as may be determined by the
Administrative Agent as follows:  first, to the payment of any amounts owing by
such Defaulting Lender to the Administrative Agent hereunder; second, as the
Borrower may request (so long as no Default or Event of Default exists), to the
funding of any Loan in respect of which such Defaulting Lender has failed to
fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent; third, if so determined by the Administrative Agent and
the Borrower, to be held in a deposit account and released pro rata in order to
satisfy such Defaulting Lender’s potential future funding obligations with
respect to Loans under this Agreement; fourth, to the payment of any amounts
owing to the Lenders as a result of any judgment of a court of competent
jurisdiction obtained by any Lender against such Defaulting Lender as a result
of such Defaulting Lender’s breach of its obligations under this Agreement or
under any other Loan Document; fifth, so long as no Default or Event of Default
exists, to the payment of any amounts owing to the Borrower as a result of any
judgment of a court of competent jurisdiction obtained by the Borrower against
such Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement or under any other Loan Document; and seventh,
to such Defaulting Lender or as otherwise directed by a court of competent
jurisdiction; provided that if (x) such payment is a payment of the principal
amount of any Loans in respect of which such Defaulting Lender has not fully
funded its appropriate share, and (y) such Loans were made at a time when the
conditions set forth in Section 4.02 were

39

736428214 20644379

 

satisfied or waived, such payment shall be applied solely to pay the Loans of
all non-Defaulting Lenders on a pro rata basis prior to being applied to the
payment of any Loans of such Defaulting Lender until such time as all Loans are
held by the Lenders pro rata in accordance with the Commitments without giving
effect to clause (d) below.  Any payments, prepayments or other amounts paid or
payable to a Defaulting Lender that are applied (or held) to pay amounts owed by
a Defaulting Lender or to post cash collateral pursuant to this Section shall be
deemed paid to and redirected by such Defaulting Lender, and each Lender
irrevocably consents hereto; and

(c) the Commitment and Revolving Credit Exposure of such Defaulting Lender shall
not be included in determining whether the Required Lenders have taken or may
take any action hereunder (including any consent to any amendment, waiver or
other modification pursuant to Section 9.02); provided that this clause (c)
shall not apply to the vote of a Defaulting Lender in the case of an amendment,
waiver or other modification requiring the consent of such Lender or each Lender
affected thereby.

SECTION 2.18. Extension of Maturity Date.   The Borrower may, by delivering an
Extension Request to the Administrative Agent (who shall promptly deliver a copy
to each of the Lenders), not less than 60 days in advance of the Maturity Date
in effect at such time (the “Existing Maturity Date”), request that the Lenders
extend the Existing Maturity Date for a period of 364 days; provided, that no
such notice may be given at any time that a year or more remains under the
existing term of this Agreement.  Each Lender, acting in its sole discretion,
shall, by written notice to the Administrative Agent given not later than the
date that is the 20th day after the date of the Extension Request, or if such
date is not a Business Day, the immediately following Business Day (the
“Response Date”), advise the Administrative Agent in writing whether or not such
Lender agrees to the requested extension.  Each Lender that advises the
Administrative Agent that it will not extend the Existing Maturity Date is
referred to herein as a “Non-extending Lender”; provided, that any Lender that
does not advise the Administrative Agent of its consent to such requested
extension by the Response Date and any Lender that is a Defaulting Lender on the
Response Date shall be deemed to be a Non-extending Lender.  The Administrative
Agent shall notify the Borrower, in writing, of the Lenders’ elections promptly
following the Response Date.  The election of any Lender to agree to such an
extension shall not obligate any other Lender to so agree.  The Maturity Date
may be extended no more than two times pursuant to this Section 2.18.

(i) If, by the Response Date, Lenders holding Commitments that aggregate 50% or
more of the total Commitments shall constitute Non-extending Lenders, then the
Existing Maturity Date shall not be extended and the outstanding principal
balance of all Loans and other amounts payable hereunder shall be payable, and
the Commitments shall terminate, on the Existing Maturity Date in effect prior
to such extension.

(ii) If (and only if), by the Response Date, Lenders holding Commitments that
aggregate more than 50% of the total Commitments shall have agreed to extend the
Existing Maturity Date (each such consenting Lender, an “Extending Lender”),
then effective as of the Existing Maturity Date, the Maturity Date for such
Extending Lenders shall be extended for a period of 364 days (subject to
satisfaction of the conditions set forth in Section 2.18(d)).  In the event of
such extension, the Commitment of each Non-extending Lender shall terminate on
the Existing Maturity Date in effect for such Non-

40

736428214 20644379

 

extending Lender prior to such extension and the outstanding principal balance
of all Loans and other amounts payable hereunder to such Non-extending Lender
shall become due and payable on such Existing Maturity Date and, subject to
Section 2.18(c) below, the total Commitments hereunder shall be reduced by the
Commitments of the Non-extending Lenders so terminated on such Existing Maturity
Date.

(d) In the event of any extension of the Existing Maturity Date pursuant to
Section 2.18(b)(ii), the Borrower shall have the right on or before the Existing
Maturity Date, at its own expense, to require any Non-extending Lender to
transfer and assign without recourse (in accordance with and subject to the
restrictions contained in Section 9.04) all its interests, rights (other than
its rights to payments pursuant to Section 2.12,  Section 2.13,  Section 2.14 or
Section 9.03 arising prior to the effectiveness of such assignment) and
obligations under this Agreement to one or more banks or other financial
institutions identified to the Non-extending Lender by the Borrower, which may
include any existing Lender (each a “Replacement Lender”), provided that (i)
such Replacement Lender, if not already a Lender hereunder, shall be subject to
the approval of the Administrative Agent (such approvals to not be unreasonably
withheld) to the extent the consent of the Administrative Agent would be
required to effect an assignment under Section 9.04(b), (ii) such assignment
shall become effective as of a date specified by the Borrower (which shall not
be later than the Existing Maturity Date in effect for such Non-extending Lender
prior to the effective date of the requested extension) and (iii) the
Replacement Lender shall pay to such Non-extending Lender in immediately
available funds on the effective date of such assignment the principal of and
interest accrued to the date of payment on the outstanding principal amount
Loans made by it hereunder and all other amounts accrued and unpaid for its
account or otherwise owed to it hereunder on such date.

(e) As a condition precedent to each such extension of the Existing Maturity
Date pursuant to Section 2.18(b)(ii), the Borrower shall (i) deliver to the
Administrative Agent a certificate of the Borrower dated as of the Existing
Maturity Date signed by a Responsible Officer of the Borrower certifying that,
as of such date, both before and immediately after giving effect to such
extension, (A) the representations and warranties of the Borrower set forth in
this Agreement shall be true and correct and (B) no Default shall have occurred
and be continuing and (ii) make such prepayments of the outstanding Loans as
shall be required such that, after giving effect to the termination of the
Commitments of the Non-extending Lenders pursuant to Section 2.18(b) and any
assignment pursuant to Section 2.18(c), the aggregate Revolving Credit Exposure
does not exceed the aggregate amount of Commitments being extended.

(f) For the avoidance of doubt, no consent of any Lender (other than the
existing Lenders participating in the extension of the Existing Maturity Date)
shall be required for any extension of the Maturity Date pursuant to this
Section  2.18 and the operation of this Section 2.18 in accordance with its
terms is not an amendment subject to Section 9.02.

ARTICLE III

Representations and Warranties

The Borrower represents and warrants to the Lenders that:

41

736428214 20644379

 

SECTION 3.01. Existence and Standing.  Each of the Borrower and its Subsidiaries
is a corporation, partnership (in the case of Subsidiaries only) or limited
liability company duly and properly incorporated or organized, as the case may
be, validly existing and (to the extent such concept applies to such entity) in
good standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business and (to the
extent such concept applies to such entity) is in good standing in each
jurisdiction in which its business is conducted, the failure of which could
reasonably be expected to have a Material Adverse Effect.

SECTION 3.02. Authorization and Validity.  The Borrower has the power and
authority and legal right to execute and deliver the Loan Documents to which it
is a party and to perform its obligations thereunder.  The execution and
delivery by the Borrower of the Loan Documents to which it is a party and the
performance of its obligations thereunder have been duly authorized by proper
corporate proceedings, and the Loan Documents to which the Borrower is a party
constitute legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their terms, except as enforceability
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors’ rights generally.

SECTION 3.03. No Conflict; Consent.  Neither the execution and delivery by the
Borrower of the Loan Documents to which it is a party, nor the consummation of
the transactions therein contemplated, nor compliance with the provisions
thereof will violate (a) any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Borrower or any of its Subsidiaries
or (b) the Borrower’s or any Subsidiary’s articles or certificate of
incorporation, partnership agreement, certificate of partnership, articles or
certificate of organization, by-laws, or operating or other management
agreement, as the case may be, or (c) the provisions of any indenture,
instrument or agreement to which the Borrower or any of its Subsidiaries is a
party or is subject, or by which it, or its property, is bound, or conflict with
or constitute a default thereunder, or result in, or require, the creation or
imposition of any Lien in, of or on the property of the Borrower or a Subsidiary
pursuant to the terms of any such indenture, instrument or agreement, which in
the case of this clause (c) could reasonably be expected to have a Material
Adverse Effect.  No order, consent, adjudication, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any Person (including any
governmental or public body or authority, or any subdivision thereof), which has
not been obtained by the Borrower or any of its Subsidiaries, is required to be
obtained by the Borrower or any of its Subsidiaries in connection with the
execution and delivery of the Loan Documents, the borrowings under this
Agreement, the payment and performance by the Borrower of the Obligations or the
legality, validity, binding effect or enforceability of any of the Loan
Documents.

SECTION 3.04. Financial Statements.  The Borrower has heretofore furnished to
each of the Lenders (a) the December 31, 2019 audited consolidated financial
statements of the Borrower and its Subsidiaries and (b) the December 31,
2019 Annual Statement of each of RLIC, CBIC and MHIC (collectively, the
“Financial Statements”).  Each of the Financial Statements was prepared in
accordance with GAAP or SAP, as applicable, and such Financial Statements fairly
present the consolidated (to the extent applicable) financial condition and
operations of the Borrower and its Subsidiaries or such Insurance Subsidiary, as
applicable, at

42

736428214 20644379

 

such dates and the consolidated results of their operations for the respective
periods then ended (except, in the case of such unaudited statements, for normal
year-end audit adjustments).

SECTION 3.05. Taxes.  The Borrower and its Subsidiaries have filed all United
States federal Tax returns and all other Tax returns which are required to be
filed and have paid all Taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any of its Subsidiaries, except such
Taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided in accordance with GAAP and as to which no Lien
exists.  To the Borrower’s knowledge, no Tax Liens have been filed and no claims
are being asserted with respect to any such Taxes.

SECTION 3.06. Material Adverse Change.  Since December 31, 2019, there has been
no change in the business, property, condition (financial or otherwise) or
results of operations of the Borrower and its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.

SECTION 3.07. Litigation and Contingent Obligations.  There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect or which seeks to
prevent, enjoin or delay the making of any Loans.  The Borrower has no material
contingent obligations not provided for or disclosed in the financial statements
referred to in Section 5.01, other than any liabilities which could not
reasonably be expected to have a Material Adverse Effect.

SECTION 3.08. Subsidiaries.  Schedule 3.08 contains an accurate list of all
Subsidiaries of the Borrower as of the date of this Agreement, setting forth
their respective jurisdictions of organization and the percentage of their
respective capital stock or other ownership interests owned by the Borrower or
other Subsidiaries.  All of the issued and outstanding shares of capital stock
or other ownership interests of such Subsidiaries have been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and are fully paid and non-assessable.

SECTION 3.09. ERISA.  No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.  The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of FASB Accounting Standards Codification (ASC) 715) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of ASC 715) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed the fair market
value of the assets of all such underfunded Plans by an amount, in any such
case, which could reasonably be expected to result in a Material Adverse Effect.

SECTION 3.10. Accuracy of Information.  No information, exhibit or report
furnished by the Borrower or any of its Subsidiaries to the Agent or to any
Lender in connection

43

736428214 20644379

 

with the negotiation of, or compliance with, the Loan Documents contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein not misleading.  As of the
Closing Date, the information included in the Beneficial Ownership Certification
is true and correct in all respects.

SECTION 3.11. Regulation U.  The Borrower is not engaged and will not engage,
principally or as one of its important activities, in the business of purchasing
or carrying Margin Stock, or extending credit for the purpose of purchasing or
carrying Margin Stock, and no part of the proceeds of any Borrowing hereunder
will be used to buy or carry any Margin Stock.  Following the application of the
proceeds of each Borrowing, not more than 25% of the value of the assets (either
of the Borrower only or of the Borrower and its Subsidiaries on a consolidated
basis) will be Margin Stock.

SECTION 3.12. Material Agreements.  Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect.  Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (a) any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect or (b) any
agreement or instrument evidencing or governing Indebtedness.

SECTION 3.13. Compliance With Laws.  The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective property except for any failure
to comply with any of the foregoing which could not reasonably be expected to
have a Material Adverse Effect.  No Default has occurred and is continuing.

SECTION 3.14. Plan Assets; Prohibited Transactions.  None of the Borrower or any
of its Subsidiaries holds “plan assets” (within the meaning of the Plan Asset
Regulations), and, subject to the accuracy of the representations set forth in
Section 8.07, neither the execution, delivery or performance of the transactions
contemplated under this Agreement, including the making of any Loan hereunder,
will give rise to a non-exempt prohibited transaction under Section 406 of ERISA
or Section 4975 of the Code.

SECTION 3.15. Investment Company Act.  Neither the Borrower nor any Subsidiary
is an “investment company” or a company “controlled” by an “investment company”,
within the meaning of the Investment Company Act of 1940, as amended.

SECTION 3.16. Insurance Licenses.  No license (including, without limitation,
licenses or certificates of authority from applicable insurance departments),
permit or authorization to transact insurance business held by any Insurance
Subsidiary, the loss of which could reasonably be expected to have a Material
Adverse Effect, is the subject of a proceeding for suspension or revocation.  To
the Borrower’s knowledge, there is no sustainable basis for such suspension or
revocation, and no such suspension or revocation has been threatened by any
Governmental Authority.

44

736428214 20644379

 

SECTION 3.17. Solvency.  Immediately after the consummation of the transactions
to occur on the date hereof and immediately following the making of each Loan,
if any, made on the date hereof and after giving effect to the application of
the proceeds of such Loans, (a) the fair value of the assets of the Borrower and
its Subsidiaries on a consolidated basis, at a fair valuation, will exceed the
debts and liabilities, subordinated, contingent or otherwise, of the Borrower
and its Subsidiaries on a consolidated basis; (b) the present fair saleable
value of the property of the Borrower and its Subsidiaries on a consolidated
basis will be greater than the amount that will be required to pay the probable
liability of the Borrower and its Subsidiaries on a consolidated basis on their
debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (c) the Borrower and
its Subsidiaries on a consolidated basis will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) the Borrower and its
Subsidiaries on a consolidated basis will not have unreasonably small capital
with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the date
hereof.

SECTION 3.18. Labor Controversies; Union Contracts, Etc.  There are no labor
controversies pending or, to the knowledge of the Borrower, threatened against
the Borrower, which if adversely determined could have a Material Adverse
Effect.  There are no pending or, to the Borrower’s knowledge, threatened or
anticipated (a) employment discrimination charges or complaints against or
involving the Borrower before any Governmental Authority or (b) unfair labor
practice charges or complaints, disputes or grievances or arbitration
proceedings or controversies affecting the Borrower, which, in any such case, if
adversely determined, could have a Material Adverse Effect.  There are no
collective bargaining agreements covering any of the employees of the Borrower.

SECTION 3.19. Surety Obligations; Financial Assurances.  The Borrower is not
obligated as surety or indemnitor under any surety or similar bond or other
contract and has not issued or entered into any agreement to assure payment,
performance or completion of performance of any undertaking or obligation of any
Person, except, in any such case, in the ordinary course of business.  As of the
date of this Agreement, the Borrower has not posted or placed any Financial
Assurance except as indicated in Schedule 3.19 hereto.

SECTION 3.20. Business Relations.  There exists no actual or threatened
termination, cancellation, or adverse limitation of, or any adverse modification
or change in, the contractual and/or business relationship between the Borrower
and any owner/lessor of any facility utilized in the Borrower’s business,
municipality, customer and/or supplier, and there exists no present condition or
state of facts or circumstances in such relations, which in each case would have
a Material Adverse Effect.

SECTION 3.21. Environmental Matters.  Except with respect to any matters that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, neither the Borrower nor any of its Subsidiaries (i)
has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.

45

736428214 20644379

 

SECTION 3.22. Ranking.  The Obligations will rank at least pari passu with all
Indebtedness of the Borrower, except Indebtedness secured by Liens permitted
under Section 6.05.

SECTION 3.23. Intellectual Property.  The Borrower owns or has sufficient and
legally enforceable rights to use all material licenses, patents, patent
applications, copyrights, service marks, trademarks, trademark applications, and
trade names necessary to continue to conduct its businesses as heretofore
conducted by it, now conducted by it, and now proposed to be conducted by it,
the lack of which could reasonably be expected to have a Material Adverse
Effect.  The Borrower is conducting its business without infringement or claim
of infringement of any license, patent, copyright, service mark,
trademark, trade name, trade secret, or other intellectual property right of
others, other than any such infringements or claims which, if successfully
asserted against or determined adversely to the Borrower, could not,
individually or collectively reasonably be expected to have a Material Adverse
Effect.

SECTION 3.24. Anti-Corruption Laws and Sanctions.  The Borrower has implemented
and maintains in effect policies and procedures designed to ensure compliance by
the Borrower, its Subsidiaries and their respective directors, officers,
employees and agents with Anti-Corruption Laws and applicable Sanctions, and the
Borrower, its Subsidiaries and their respective officers and directors and to
the knowledge of the Borrower its employees and agents, are in compliance with
Anti-Corruption Laws and applicable Sanctions in all material respects and are
not knowingly engaged in any activity that would reasonably be expected to
result in the Borrower being designated as a Sanctioned Person.  None of (a) the
Borrower, any Subsidiary, any of their respective directors or officers or to
the knowledge of the Borrower or such Subsidiary employees, or (b) to the
knowledge of the Borrower, any agent of the Borrower or any Subsidiary that will
act in any capacity in connection with or benefit from the credit facility
established hereby, is a Sanctioned Person.  No Borrowing, use of proceeds or
other transaction contemplated by this Agreement will violate any
Anti-Corruption Law or applicable Sanctions.

SECTION 3.25. EEA Financial Institutions.  The Borrower is not an EEA Financial
Institution.

ARTICLE IV

Conditions

SECTION 4.01. Effective Date.  The obligations of the Lenders to make Loans
hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.02):

(a) The Administrative Agent (or its counsel) shall have received from each
party hereto either (i) a counterpart of this Agreement signed on behalf of such
party or (ii) written evidence satisfactory to the Administrative Agent (which
may include electronic transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement.

46

736428214 20644379

 

(b) The Administrative Agent shall have received a favorable written opinion
(addressed to the Administrative Agent and the Lenders and dated the Effective
Date) of Jeffrey D. Fick, Senior Vice President and Chief Legal Officer for the
Borrower, covering such matters relating to the Borrower and this Agreement as
the Administrative Agent shall reasonably request.  The Borrower hereby requests
such counsel to deliver such opinion.

(c) The Administrative Agent shall have received such documents and certificates
as the Administrative Agent or its counsel may reasonably request relating to
the organization, existence and good standing of the Borrower, the authorization
of the Transactions and any other legal matters relating to the Borrower, this
Agreement or the Transactions, all in form and substance satisfactory to the
Administrative Agent and its counsel.

(d) The Administrative Agent shall have received all fees and other amounts due
and payable on or prior to the Effective Date, including, to the extent
invoiced, reimbursement or payment of all out of pocket expenses required to be
reimbursed or paid by the Borrower hereunder.

(e) The Administrative Agent shall have received, at least (i) five days prior
to the Effective Date, all documentation and other information regarding the
Borrower requested in connection with applicable “know your customer” and
anti-money laundering rules and regulations, including the Patriot Act, to the
extent requested in writing of the Borrower at least 10 days prior to the
Effective Date, and (ii) to the extent the Borrower qualifies as a “legal entity
customer” under the Beneficial Ownership Regulation, at least five days prior to
the Effective Date, a Beneficial Ownership Certification in relation to the
Borrower.

(f) The Administrative Agent shall have received such other documents as the
Administrative Agent or the Required Lenders (through the Administrative Agent)
may reasonably request.

SECTION 4.02. Each Loan.  The obligation of each Lender to make a Loan on the
occasion of any Borrowing is subject to the satisfaction of the following
conditions:

(a) The representations and warranties of the Borrower set forth in this
Agreement shall be true and correct on and as of the date of such Borrowing.

(b) At the time of and immediately after giving effect to such Borrowing, no
Default shall have occurred and be continuing.

Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in paragraphs (a)
and (b) of this Section.

ARTICLE V

Affirmative Covenants

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full, the Borrower covenants and agrees with the Lenders that:

47

736428214 20644379

 

SECTION 5.01. Financial Statements.  The Borrower will furnish to the
Administrative Agent and each Lender:

(a) Within ninety (90) days after the close of each of its fiscal years, an
audit report (without a “going concern” or like qualification, commentary or
exception and without any qualification or exception as to the scope of such
audit) issued by an independent registered public accounting firm acceptable to
the Lenders, prepared in accordance with GAAP on a consolidated basis for itself
and its Subsidiaries, including balance sheets as of the end of such period,
related profit and loss, retained earnings and reconciliation of surplus
statements, and a statement of cash flows, accompanied by any management letter
prepared by said accountants, and within one hundred fifty (150) days after the
close of each of its fiscal years, a certificate of said accountants that, in
the course of their examination necessary for their certification of the
foregoing, they have obtained no knowledge of any Default or Event of Default,
or if, in the opinion of such accountants, any Default or Event of Default shall
exist, stating the nature and status thereof.

(b) Within sixty (60) days after the close of the first three quarterly periods
of each of its fiscal years, for itself and its Subsidiaries, consolidated
unaudited balance sheets as at the close of each such period and consolidated
profit and loss, retained earnings and reconciliation of surplus statements and
a statement of cash flows for the period from the beginning of such fiscal year
to the end of such quarter, all certified by its chief financial officer.

(c) Together with the financial statements required under Sections 6.01(a) and
(b), a compliance certificate in substantially the form of Exhibit E signed by
its chief financial officer or treasurer showing the calculations necessary to
determine compliance with this Agreement and stating that no Default or Event of
Default exists, or if any Default or Event of Default exists, stating the nature
and status thereof.

SECTION 5.02. Other Reports.  The Borrower will furnish to the Administrative
Agent and each Lender prompt written notice of the following:

(a) As soon as possible and in any event within 10 days after learning thereof,
the occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability
of the Borrower and its Subsidiaries in an aggregate amount exceeding
$1,000,000.

(b) Within ninety (90) days after the close of each fiscal year of each of RLIC,
CBIC and MHIC, copies of the unaudited Annual Statement of such Insurance
Subsidiary, certified by the chief financial officer or the treasurer of such
Insurance Subsidiary, all such statements to be prepared in accordance with SAP
consistently applied throughout the periods reflected therein.

(c) Within sixty (60) days after the close of each of the first three (3) fiscal
quarters of each fiscal year of each of RLIC, CBIC and MHIC, copies of the
unaudited Quarterly Statement of each of the Insurance Subsidiaries, certified
by the chief financial officer or the treasurer of RLIC, CBIC or MHIC, as
applicable, all such statements to be prepared in accordance with SAP
consistently applied through the period reflected therein.

48

736428214 20644379

 

(d) Promptly and in any event within ten (10) days after (i) learning thereof,
notification of any changes after the date of this Agreement in the rating given
by A.M. Best & Co. in respect of any Insurance Subsidiary and (ii) receipt
thereof, copies of any ratings analysis by A.M. Best & Co. relating to any
Insurance Subsidiary.

(e) Promptly after Moody’s or S&P shall have announced a change in the rating
established or deemed to have been established for the Index Debt, written
notice of such rating change.

(f) Promptly following any request therefor, information and documentation
reasonably requested by the Administrative Agent or any Lender for purposes of
compliance with applicable “know your customer” and anti-money laundering rules
and regulations, including the Patriot Act.

(g) Such other information (including, without limitation, the annual Best’s
Advance Report Service report prepared with respect to each Insurance Subsidiary
rated by A.M. Best & Co. and non-financial information) as the Administrative
Agent or any Lender may from time to time reasonably request.

SECTION 5.03. Use of Proceeds.  The proceeds of the Loans will be used for
working capital and general corporate purposes.  No part of the proceeds of any
Loan will be used, whether directly or indirectly, for any purpose that entails
a violation of any of the regulations of the Federal Reserve Board, including
Regulations T, U and X.  The Borrower will not request any Borrowing, and the
Borrower shall not use, and shall procure that its Subsidiaries and its or their
respective directors, officers, employees and agents shall not use, the proceeds
of any Borrowing (A) in furtherance of an offer, payment, promise to pay, or
authorization of the payment or giving of money, or anything else of value, to
any Person in violation of any Anti-Corruption Laws, (B) for the purpose of
funding, financing or facilitating any activities, business or transaction of or
with any Sanctioned Person, or in any Sanctioned Country, except to the extent
permitted for a Person required to comply with Sanctions, or (C) in any manner
that would result in the violation of any Sanctions applicable to any party
hereto.

SECTION 5.04. Notice of Default.  The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of the occurrence of
(a) any Default or Event of Default, (b) of any other event or development,
financial or other, relating specifically to the Borrower or any of its
Subsidiaries (and not of a general economic or political nature) which could
reasonably be expected to have a Material Adverse Effect, (c) their receipt of
any notice from any Governmental Authority of the expiration without renewal,
revocation or suspension of, or the institution of any proceedings to revoke or
suspend, any License now or hereafter held by any Insurance Subsidiary which is
required to conduct insurance business in compliance with all applicable laws
and regulations and the expiration, revocation or suspension of which could
reasonably be expected to have a Material Adverse Effect, (d) their receipt of
any notice from any Governmental Authority of the institution of any
disciplinary proceedings against or in respect of any Insurance Subsidiary, or
the issuance of any order, the taking of any action or any request for an
extraordinary audit for cause by any Governmental Authority which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect, (e)
any material judicial or administrative order of which they are aware limiting
or controlling the

49

736428214 20644379

 

insurance business of any Insurance Subsidiary (and not the insurance industry
generally) which has been issued or adopted, (f) the commencement of any
litigation of which they are aware which could reasonably be expected to create
a Material Adverse Effect, or (g) any change in the information provided in the
Beneficial Ownership Certification that would result in a change to the list of
beneficial owners identified in parts (c) or (d) of such certification.

SECTION 5.05. Taxes.  The Borrower will, and will cause each Subsidiary to,
timely file complete and correct United States federal and other material
foreign, state and local Tax returns required by law and pay when due all Taxes,
assessments and governmental charges and levies upon it or its income, profits
or property, except those which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside in
accordance with GAAP.

SECTION 5.06. Insurance.  The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all their property in such amounts and covering such risks as is consistent with
sound business practice, and the Borrower will furnish to any Lender upon
request full information as to the insurance carried.  The Borrower shall retain
all incidents of ownership of the insurance maintained pursuant hereto and shall
not borrow upon or otherwise impair its rights to receive the proceeds of such
insurance.  In the event the Borrower either fails to provide the Administrative
Agent with evidence of the insurance coverage required by this Section 5.06 or
at any time hereafter shall fail to obtain or maintain any of the policies of
insurance required above, or to pay any premium in whole or in part relating
thereto, then the Administrative Agent, without waiving or releasing any
obligation or default by the Borrower hereunder, may at any time (but shall be
under no obligation to act), obtain and maintain such policies of insurance and
pay such premium and take any other action with respect thereto, which the
Administrative Agent deems advisable.  The Borrower may later cancel any such
insurance purchased by the Administrative Agent, but only after providing the
Administrative Agent with evidence that the Borrower has obtained the insurance
coverage required by this Section.  The costs of such insurance obtained by the
Administrative Agent, through and including the effective date such insurance
coverage is canceled or expires, shall be payable on demand by the Borrower to
the Administrative Agent, together with interest at the default rate provided
for in Section 2.10(c) on such amounts until repaid and any other charges by the
Administrative Agent in connection with the placement of such insurance.  The
costs of such insurance, which may be greater than the cost of insurance which
the Borrower may be able to obtain on its own, together with interest thereon at
the default rate provided for in Section 2.10(c) and any other charges by the
Administrative Agent in connection with the placement of such insurance may be
added to the total Obligations due and owing.

SECTION 5.07. Compliance with Laws.  The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws, the failure to comply with which
could reasonably be expected to have a Material Adverse Effect.

SECTION 5.08. Maintenance of Properties.  The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its property in

50

736428214 20644379

 

good repair, working order and condition, and make all necessary and proper
repairs, renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times.

SECTION 5.09. Inspection.  The Borrower will, and will cause each Subsidiary to,
upon reasonable notice permit the Administrative Agent and the Lenders, by their
respective representatives and agents, to inspect any of the property, corporate
books and financial records of the Borrower and each Subsidiary, to examine and
make copies of the books of accounts and other financial records of the Borrower
and each Subsidiary, and to discuss the affairs, finances and accounts of the
Borrower and each Subsidiary with, and to be advised as to the same by, their
respective officers at such reasonable times and intervals as the Lenders may
designate.  The Borrower will keep or cause to be kept, and cause each
Subsidiary to keep or cause to be kept, appropriate records and books of account
in which complete entries are to be made reflecting its and their business and
financial transactions, such entries to be made in accordance with GAAP or SAP,
as applicable, consistently applied.

SECTION 5.10. Conduct of Business.  The Borrower will, and will cause each
Subsidiary to, (a) carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted, (b) do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation in its jurisdiction of
incorporation and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted except where the failure to
maintain such authority could not reasonably be expected to have a Material
Adverse Effect and (c) do all things necessary to renew, extend and continue in
effect all Licenses which may at any time and from time to time be necessary for
any Insurance Subsidiary to operate its insurance business in compliance with
all applicable laws and regulations except for any License the loss of which
could not reasonably be expected to have a Material Adverse Effect; provided,
that any Insurance Subsidiary may withdraw from one or more states (other than
its state of domicile) as an admitted insurer if such withdrawal is determined
by the such Insurance Subsidiary’s Board of Directors to be in the best interest
of such Insurance Subsidiary and could not reasonably be expected to have a
Material Adverse Effect.  No Insurance Subsidiary shall change its state of
domicile or incorporation without the prior written consent of the Required
Lenders; provided that any Insurance Subsidiary may change its state of domicile
and/or incorporation to Illinois.  Each Wholly-Owned Subsidiary in existence as
of the date of this Agreement shall continue to be a Wholly-Owned Subsidiary;
provided, that (x) the Borrower may sell all of the capital stock of any
Subsidiary, subject to Section 6.03 hereof, and (y) the Borrower may cause or
permit the dissolution or winding up of any such Wholly-Owned Subsidiary so long
as the assets or revenues thereof, taken together with all other Wholly-Owned
Subsidiaries dissolved or wound up since the date hereof, do not constitute a
Substantial Portion.

SECTION 5.11. Accuracy of Information.  The Borrower will ensure that any
information, including financial statements or other documents, furnished to the
Administrative Agent or the Lenders in connection with this Agreement or any
amendment or modification hereof or waiver hereunder contains no material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and the furnishing of such information shall be deemed

51

736428214 20644379

 

to be a representation and warranty by the Borrower on the date thereof as to
the matters specified in this Section.

SECTION 5.12. Plan Assets; Prohibited Transactions.  (a)  The Borrower will, and
will cause each Subsidiary to, ensure that neither Borrower nor any of its
Subsidiaries holds “plan assets” (within the meaning of the Plan Asset
Regulations).  (b)  Subject to the accuracy of the representations set forth in
Section 8.07, neither the execution, delivery or performance of the transactions
contemplated under this Agreement, including the making of any Loan hereunder,
will give rise to a non-exempt prohibited transaction under Section 406 of ERISA
or Section 4975 of the Code.

ARTICLE VI

Negative Covenants

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full, the
Borrower covenants and agrees with the Lenders that:

SECTION 6.01. Dividends.  The Borrower will not, nor will it permit any
Subsidiary to, declare or pay any dividends or make any distributions on its
capital stock (other than dividends payable in its own capital stock) or redeem,
repurchase or otherwise acquire or retire any of its capital stock at any time
outstanding, except that (a) any Subsidiary may declare and pay dividends or
make distributions to the Borrower or to a Wholly-Owned Subsidiary, and (b) the
Borrower may declare and pay dividends on its capital stock or redeem,
repurchase or otherwise acquire or retire any of its capital stock at any time
outstanding; provided, that no Default or Event of Default shall exist before or
after giving effect to such dividends, redemptions, repurchases or other
acquisitions or be created as a result thereof.

SECTION 6.02. Merger.  The Borrower will not, nor will it permit any Subsidiary
to, merge or consolidate with or into any other Person; provided, that (x) any
Person may merge with or into the Borrower so long as (i) no Event of Default
will result therefrom, (ii) the Borrower has provided written notice at least
twenty days prior to the proposed effective date, (iii) the aggregate
consideration paid in such transaction does not exceed $100,000,000 and (iv) the
Borrower is the surviving entity, and (y) subject to Section 6.04, a Subsidiary
may merge into the Borrower or a Wholly-Owned Subsidiary.

SECTION 6.03. Sale of Assets.   The Borrower will not, nor will it permit any
Subsidiary to, lease, sell, transfer or otherwise Dispose of its property to any
other Person except for (a) sales of Investments in the ordinary course of
business, (b) the sale by the Borrower on commercially reasonable terms of its
other unconsolidated investees and (c) leases, sales, transfers or other
Dispositions of its property (including capital stock of Subsidiaries) that,
together with all other property of the Borrower and its Subsidiaries leased,
sold or Disposed of (other than sales permitted pursuant to clauses (a) and (b)
of this Section 6.03) as permitted by this Section 6.03 since the date hereof do
not constitute a Substantial Portion.

52

736428214 20644379

 

SECTION 6.04. Investments and Acquisitions.  The Borrower and its Subsidiaries
may make Investments (including, without limitation, loans and advances to, and
other Investments in, its Subsidiaries) and commitments therefor, create
Subsidiaries, become a partner in any partnership or joint venture and make
Acquisitions, subject to the following:

(a) The Borrower and its Subsidiaries may make Acquisitions so long as (i) such
transactions (A) consist exclusively of Acquisitions of businesses or entities
engaged in the property and casualty business, (B) do not constitute hostile
takeovers and (C) do not require the payment of an aggregate consideration in
excess of $100,000,000 after the date of this Agreement, (ii) the Borrower
provides the Administrative Agent and each Lender with written notice of such
transactions at least 20 days prior to the effective date thereof, and (iii) no
Default has occurred and is continuing or would occur after giving effect
thereto.

(b) The Borrower and its Subsidiaries may make Investments in debt securities so
long as at least 85% of the principal amount outstanding of all such Investments
constitutes an Investment in Investment Grade Obligations.

(c) Any Investments made by any Insurance Subsidiary must be of a quality
acceptable to the insurance commissioner in the respective domiciliary state of
such Insurance Subsidiary.

(d) The Borrower and its Subsidiaries may make loans to and extend guarantees of
loans made to employees of the Borrower and its Subsidiaries to purchase stock
of the Borrower pursuant to an employee stock purchase plan, so long as the
aggregate principal amount outstanding of all such loans and guaranteed loans
shall not exceed $20,000,000 in the aggregate.

(e) The Borrower and its Subsidiaries may become a partner in a partnership or
joint venture or similar Person in a transaction which does not constitute an
Acquisition; provided, that after giving effect to such transaction, the
aggregate fair market value of the partnership, joint venture and other
interests so obtained shall not exceed at any time 20% of the aggregate
statutory surplus of the Insurance Subsidiaries at such time; provided,
 further, that (x) interests in joint ventures which are limited liability
companies engaging in the same lines of business as the Insurance Subsidiaries
and (y) interests in partnerships, to the extent that such investments are
insurance company portfolio investments made by an Insurance Subsidiary in the
ordinary course of business, shall not count toward such limitation.

SECTION 6.05. Liens.  The Borrower will not, nor will it permit any Subsidiary
to, create, incur, or suffer to exist any Lien in, of or on the property of the
Borrower or any of its Subsidiaries, except:

(a) Liens for Taxes, assessments or governmental charges or levies on its
property if the same shall not at the time be delinquent or thereafter can be
paid without penalty, or are being contested in good faith and by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books.

(b) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ liens
and other similar liens arising in the ordinary course of business which secure
payment of

53

736428214 20644379

 

obligations not more than 60 days past due or which are being contested in good
faith by appropriate proceedings and for which adequate reserves shall have been
set aside on its books.

(c) Liens arising out of pledges or deposits under worker’s compensation laws,
unemployment insurance, pension plans, or other social security or retirement
benefits, or similar legislation.

(d) Utility easements, building restrictions and such other encumbrances or
charges against real property as are of a nature generally existing with respect
to properties of a similar character and which do not in any material way affect
the marketability of the same or interfere with the use thereof in the business
of the Borrower or its Subsidiaries.

(e) Purchase money Liens upon or in real property or equipment acquired or held
by the Borrower or any Subsidiary in the ordinary course of business to secure
the purchase price of such property or equipment or to secure Indebtedness
incurred solely for the purpose of financing the acquisition, construction or
improvement of any such property or equipment to be subject to such Liens, or
Liens existing on any such property or equipment at the time of acquisition or
within 180 days following such acquisition (other than any such Liens created in
contemplation of such acquisition that do not secure the purchase price), or
extensions, renewals or replacements of any of the foregoing for the same or a
lesser amount; provided that no such Lien shall extend to or cover any property
other than the property or equipment being acquired, constructed or improved,
and no such extension, renewal or replacement shall extend to or cover any
property not theretofore subject to the Lien being extended, renewed or
replaced.

(f) Liens arising in connection with Capitalized Leases; provided that no such
Lien shall extend to or cover any assets other than the assets subject to such
Capitalized Leases.

(g) Liens securing Financial Hedges arising in the ordinary course of business.

(h) Liens on securities arising out of repurchase agreements permitted by the
terms of this Agreement.

(i) Liens consisting of deposits made by an Insurance Subsidiary with any
Governmental Authority or Liens or claims imposed or required by applicable
insurance law or regulation against the property of any Insurance Subsidiary, in
each case in favor of policyholders of such Insurance Subsidiary or any
Governmental Authority and in the ordinary course of such Insurance Subsidiary’s
business.

(j) Liens on Investments and cash balances of any Insurance Subsidiary (other
than capital stock or any Subsidiary) securing Obligations of the Borrower or
any Insurance Subsidiary in respect of (i) letters of credit obtained in the
ordinary course of business and/or (ii) trust arrangements formed in the
ordinary course of business for the benefit of cedents to secure reinsurance
recoverables owed to them by any Insurance Subsidiary.

(k) The replacement, extension or renewal of any Lien permitted by clause (e) or
(f) above upon or in the same property theretofore subject thereto or the
replacement, extension or renewal (without increase in the amount (other than in
respect of fees, expenses and premiums, if any) or change in any direct or
contingent obligor) of the Indebtedness secured thereby.

54

736428214 20644379

 

(l) Liens securing obligations owed by any Subsidiary to the Borrower or any
other Subsidiary.

(m) Liens incurred in the ordinary course of business in favor of financial
intermediaries and clearing agents pending clearance of payments for Investments
or in the nature of set-off, banker’s lien or similar rights as to deposit
accounts or other funds.

(n) Judgment or judicial attachment Liens; provided, that the enforcement of
such Liens is effectively stayed and the claims secured thereby are being
actively contested in good faith and by appropriate proceedings.

(o) Liens securing obligations outstanding under FHLB Agreements.

(p) Liens securing investments by an Insurance Subsidiary in Section 42 low
income housing tax credit transactions and historical tax credit transactions.

(q) Liens securing Indebtedness or obligations (in addition to that described in
clauses (a) through (p) above), in an aggregate amount not to exceed $30,000,000
at any one time outstanding.

SECTION 6.06. Affiliates.  The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase, exchange or sale of any property or service) with, or make any payment
or transfer to, any Affiliate except (a) transactions between Subsidiaries
and/or payments by or transfers from one Subsidiary to another or (b) in the
ordinary course of business and pursuant to the reasonable requirements of the
Borrower’s or such Subsidiary’s business and upon fair and reasonable terms no
less favorable to the Borrower or such Subsidiary than the Borrower or such
Subsidiary would obtain in a comparable arms-length transaction.

SECTION 6.07. Financial Covenants.

(a) Leverage Ratio.  The Borrower will not permit the ratio, determined as of
the end of each of its fiscal quarters, of (a) Consolidated Indebtedness to (b)
Consolidated Total Capitalization to be greater than 0.35 to 1.0.

(b) Consolidated Net Worth.  The Borrower will not permit the Consolidated Net
Worth as at any date to be less than the sum of (i) the amount equal to 65% of
Consolidated Net Worth as of the most recent fiscal quarter ended prior to the
Closing Date, (ii) 50% of Consolidated Net Income during each fiscal quarter (if
positive) after the Closing Date and (iii) 50% of the aggregate net cash
proceeds of all issuances by the Borrower of shares of its capital stock from
and after the Closing Date.

ARTICLE VII

Events of Default

SECTION 7.01. Events of Default.  If any of the following events (“Events of
Default”) shall occur:

55

736428214 20644379

 

(a) Any representation or warranty made or deemed made by or on behalf of the
Borrower or any of its Subsidiaries to the Lenders or the Administrative Agent
under or in connection with this Agreement, any Loan, or any certificate or
information delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which made;

(b) Nonpayment of principal of any Loan when due, or nonpayment of interest upon
any Loan or of any commitment fee or other obligations under any of the Loan
Documents within five days after the same becomes due;

(c) The breach by the Borrower of any of the terms or provisions of Sections
5.03,  5.04(a),  5.10,  5.12(b),  or 6.01    through 6.07;

(d) The breach by the Borrower (other than a breach which constitutes a Default
under another Section of this Article VII) of any of the terms or provisions of
this Agreement or any other Loan Document which is not remedied within twenty
(20) Business Days after written notice from the Agent or any Lender;

(e) Failure of the Borrower or any of its Subsidiaries to pay when due any
Material Indebtedness; or the default by the Borrower or any of its Subsidiaries
in the performance (beyond the applicable grace period with respect thereto, if
any) of any term, provision or condition contained in any Material Indebtedness
Agreement, or any other event shall occur or condition exist, the effect of
which default, event or condition is to cause, or to permit the holder(s) of
such Material Indebtedness or the lender(s) under any Material Indebtedness
Agreement to cause, such Material Indebtedness to become due prior to its stated
maturity or any commitment to lend under any Material Indebtedness Agreement to
be terminated prior to its stated expiration date; or any Material Indebtedness
of the Borrower or any of its Subsidiaries shall be declared to be due and
payable or required to be prepaid or repurchased (other than by a regularly
scheduled payment) prior to the stated maturity thereof; or the Borrower or any
of its Subsidiaries shall not pay, or admit in writing its inability to pay, its
debts generally as they become due;

(f) The Borrower or any of its Subsidiaries shall (i) have an order for relief
entered with respect to it under the Federal bankruptcy laws as now or hereafter
in effect, (ii) make an assignment for the benefit of creditors, (iii) apply
for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its property, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment, rehabilitation
or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors or fail to file an answer or
other pleading denying the material allegations of any such proceeding filed
against it, (v) take any corporate or partnership action to authorize or effect
any of the foregoing actions set forth in this Section 7.01(f) or (vi) fail to
contest in good faith any appointment or proceeding described in Section
7.01(g);

56

736428214 20644379

 

(g) Without the application, approval or consent of the Borrower or any of its
Subsidiaries, a receiver, trustee, examiner, liquidator or similar official
shall be appointed for the Borrower or any of its Subsidiaries or any
Substantial Portion of its property, or a proceeding described in Section
7.01(f)(iv) shall be instituted against the Borrower or any of its Subsidiaries
and such appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of 60 consecutive days;

(h) Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of, all or any portion of the
property of the Borrower and its Subsidiaries which, when taken together with
all other property of the Borrower and its Subsidiaries so condemned, seized,
appropriated, or taken custody or control of, during the twelve-month period
ending with the month in which any such action occurs, constitutes a Substantial
Portion;

(i) The Borrower or any of its Subsidiaries shall fail within 30 days to pay (or
make arrangements to pay), bond or otherwise discharge one or more judgments
which are not stayed on appeal or otherwise being appropriately contested in
good faith and which are (i) judgments or orders for the payment of money in
excess of $10,000,000 (or the equivalent thereof in currencies other than U.S.
Dollars) in the aggregate, or (ii) nonmonetary judgments or orders which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect;

(j) An ERISA Event shall have occurred that, when taken together with all other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an amount which could
reasonably be expected to have a Material Adverse Effect;

(k) Any Change in Control shall occur;

(l) Any material License of RLIC or MHIC (a) shall be revoked by the
Governmental Authority which issued a material License, or any action
(administrative or judicial) to revoke a material License shall have been
commenced against RLIC or MHIC and shall not have been dismissed within 180 days
after the commencement thereof, (b) shall be suspended by such Governmental
Authority for a period in excess of thirty (30) days or (c) shall not be
reissued or renewed by such Governmental Authority upon the expiration thereof
following application for such reissuance or renewal by RLIC or MHIC, as
applicable; or

(m) Any Insurance Subsidiary shall become subject to any conservation,
rehabilitation or liquidation order, directive or mandate issued by any
Governmental Authority or any Insurance Subsidiary shall become subject to any
other directive or mandate issued by any Governmental Authority which could
reasonably be expected to have a Material Adverse Effect and which is not stayed
within ten (10) days;

then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take any or
all of the following actions, at the same or different times:  (i) terminate

57

736428214 20644379

 

the Commitments, and thereupon the Commitments shall terminate immediately, (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower, and (iii) exercise on
behalf of itself and the Lenders all rights and remedies available to it and the
Lenders under the Loan Documents and Applicable Law; and in case of any event
with respect to the Borrower described in clause (h) or (i) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due
and payable, in each case, without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower.

SECTION 7.02. Application of Payments.  Notwithstanding anything herein to the
contrary, following the occurrence and during the continuance of an Event of
Default, and notice thereof to the Administrative Agent by the Borrower or the
Required Lenders, all payments received on account of the Obligations shall,
subject to Section 2.17, be applied by the Administrative Agent as follows:

(i) first, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts payable to the Administrative Agent
(including fees and disbursements and other charges of counsel to the
Administrative Agent payable under Section 9.03 and amounts pursuant to Section
2.12(c) payable to the Administrative Agent in its capacity as such);

(ii) second, to payment of that portion of the Obligations constituting fees,
expenses, indemnities and other amounts (other than principal and interest)
payable to the Lenders (including fees and disbursements and other charges of
counsel to the Lenders payable under Section 9.03) arising under the Loan
Documents, ratably among them in proportion to the respective amounts described
in this clause (ii) payable to them;

(iii) third, to payment of that portion of the Obligations constituting charges
and interest on the Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause (iii) payable to them;

(iv) fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause (iv) payable to them;

(v) fifth, to the payment in full of all other Obligations, in each case ratably
among the Administrative Agent and the Lenders based upon the respective
aggregate amounts of all such Obligations owing to them in accordance with the
respective amounts thereof then due and payable; and

58

736428214 20644379

 

(vi) finally, the balance, if any, after all Obligations have been indefeasibly
paid in full, to the Borrower or as otherwise required by law.

ARTICLE VIII

The Administrative Agent

SECTION 8.01. Authorization and Action.   Each Lender hereby irrevocably
appoints the entity named as Administrative Agent in the heading of this
Agreement and its successors and assigns to serve as the administrative agent
under the Loan Documents and each Lender authorizes the Administrative Agent to
take such actions as agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Administrative
Agent under such agreements and to exercise such powers as are reasonably
incidental thereto.  Without limiting the foregoing, each Lender hereby
authorizes the Administrative Agent to execute and deliver, and to perform its
obligations under, each of the Loan Documents to which the Administrative Agent
is a party and to exercise all rights, powers and remedies that the
Administrative Agent may have under such Loan Documents.

(a) As to any matters not expressly provided for herein and in the other Loan
Documents (including enforcement or collection), the Administrative Agent shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the written instructions of the Required
Lenders (or such other number or percentage of the Lenders as shall be
necessary, pursuant to the terms in the Loan Documents), and, unless and until
revoked in writing, such instructions shall be binding upon each Lender;
provided, however, that the Administrative Agent shall not be required to take
any action that (i) the Administrative Agent in good faith believes exposes it
to liability unless the Administrative Agent receives an indemnification
satisfactory to it from the Lenders with respect to such action or (ii) is
contrary to this Agreement or any other Loan Document or applicable law,
including any action that may be in violation of the automatic stay under any
requirement of law relating to bankruptcy, insolvency or reorganization or
relief of debtors or that may effect a forfeiture, modification or termination
of property of a Defaulting Lender in violation of any requirement of law
relating to bankruptcy, insolvency or reorganization or relief of debtors;
provided,  further, that the Administrative Agent may seek clarification or
direction from the Required Lenders prior to the exercise of any such instructed
action and may refrain from acting until such clarification or direction has
been provided.  Except as expressly set forth in the Loan Documents, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower,
any Subsidiary or any Affiliate of any of the foregoing that is communicated to
or obtained by the Person serving as Administrative Agent or any of its
Affiliates in any capacity.  Nothing in this Agreement shall require the
Administrative Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.

(b) In performing its functions and duties hereunder and under the other Loan
Documents, the Administrative Agent is acting solely on behalf of the Lenders
(except in limited

59

736428214 20644379

 

circumstances expressly provided for herein relating to the maintenance of the
Register), and its duties are entirely mechanical and administrative in nature. 
Without limiting the generality of the foregoing:

(i) the Administrative Agent does not assume and shall not be deemed to have
assumed any obligation or duty or any other relationship as the agent, fiduciary
or trustee of or for any Lender other than as expressly set forth herein and in
the other Loan Documents, regardless of whether a Default or an Event of Default
has occurred and is continuing (and it is understood and agreed that the use of
the term “agent” (or any similar term) herein or in any other Loan Document with
reference to the Administrative Agent is not intended to connote any fiduciary
duty or other implied (or express) obligations arising under agency doctrine of
any applicable law, and that such term is used as a matter of market custom and
is intended to create or reflect only an administrative relationship between
contracting parties); additionally, each Lender agrees that it will not assert
any claim against the Administrative Agent based on an alleged breach of
fiduciary duty by the Administrative Agent in connection with this Agreement and
the transactions contemplated hereby; and

(ii) nothing in this Agreement or any Loan Document shall require the
Administrative Agent to account to any Lender for any sum or the profit element
of any sum received by the Administrative Agent for its own account.

(c) The Administrative Agent may perform any of its duties and exercise its
rights and powers hereunder or under any other Loan Document by or through any
one or more sub-agents appointed by the Administrative Agent.  The
Administrative Agent and any such sub-agent may perform any of their respective
duties and exercise their respective rights and powers through their respective
Related Parties.  The exculpatory provisions of this Article shall apply to any
such subagent and to the Related Parties of the Administrative Agent and any
such sub-agent, and shall apply to their respective activities pursuant to this
Agreement.  The Administrative Agent shall not be responsible for the negligence
or misconduct of any sub-agent except to the extent that a court of competent
jurisdiction determines in a final and nonappealable judgment that the
Administrative Agent acted with gross negligence or willful misconduct in the
selection of such sub-agent.

(d) No Arranger shall have obligations or duties whatsoever in such capacity
under this Agreement or any other Loan Document and shall incur no liability
hereunder or thereunder in such capacity, but all such persons shall have the
benefit of the indemnities provided for hereunder.

(e) In case of the pendency of any proceeding with respect to Borrower under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect, the Administrative Agent (irrespective of whether
the principal of any Loan shall then be due and payable as herein expressed or
by declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on the Borrower) shall be entitled and empowered (but
not obligated) by intervention in such proceeding or otherwise:

60

736428214 20644379

 

(i) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim under Sections 2.12,  2.13,  2.15,  2.17 and 9.03)
allowed in such judicial proceeding; and

(ii) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such proceeding is hereby authorized by each
Lender to make such payments to the Administrative Agent and, in the event that
the Administrative Agent shall consent to the making of such payments directly
to the Lenders to pay to the Administrative Agent any amount due to it, in its
capacity as the Administrative Agent, under the Loan Documents (including under
Section 9.03).  Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.

(f) The provisions of this Article are solely for the benefit of the
Administrative Agent and the Lenders, and, except solely to the extent of the
Borrower’s rights to consent pursuant to and subject to the conditions set forth
in this Article, none of the Borrower or any Subsidiary, or any of their
respective Affiliates, shall have any rights as a third party beneficiary under
any such provisions.

SECTION 8.02. Administrative Agent’s Reliance, Indemnification, Etc.   Neither
the Administrative Agent nor any of its Related Parties shall be (i) liable for
any action taken or omitted to be taken by it under or in connection with this
Agreement or the other Loan Documents (x) with the consent of or at the request
of the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary, or as the Administrative Agent shall believe in good faith
to be necessary, under the circumstances as provided in the Loan Documents) or
(y) in the absence of its own gross negligence or willful misconduct (such
absence to be presumed unless otherwise determined by a court of competent
jurisdiction by a final and nonappealable judgment) or (ii) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by the Borrower or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or any other Loan Document or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or for any failure of
the Borrower to perform its obligations hereunder or thereunder.

(a) The Administrative Agent shall be deemed not to have knowledge of any
Default unless and until written notice thereof (stating that it is a “notice of
default”) is given to the Administrative Agent by the Borrower or a Lender, and
the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or

61

736428214 20644379

 

representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered thereunder or in
connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document or the occurrence of any Default, (iv) the sufficiency, validity,
enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, or (v) the satisfaction of any condition set
forth in Article IV or elsewhere in any Loan Document, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent
or satisfaction of any condition that expressly refers to the matters described
therein being acceptable or satisfactory to the Administrative Agent.

(b) Without limiting the foregoing, the Administrative Agent (i) may treat the
payee of any promissory note as its holder until such promissory note has been
assigned in accordance with Section 9.04, (ii) may rely on the Register to the
extent set forth in Section 9.04(b), (iii) may consult with legal counsel
(including counsel to the Borrower), independent public accountants and other
experts selected by it, and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts, (iv) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations made by or on behalf of the Borrower in connection with this
Agreement or any other Loan Document, (v) in determining compliance with any
condition hereunder to the making of a Loan, that by its terms must be fulfilled
to the satisfaction of a Lender, may presume that such condition is satisfactory
to such Lender unless the Administrative Agent shall have received notice to the
contrary from such Lender sufficiently in advance of the making of such Loan and
(vi) shall be entitled to rely on, and shall incur no liability under or in
respect of this Agreement or any other Loan Document by acting upon, any notice,
consent, certificate or other instrument or writing (which writing may be a fax,
any electronic message, Internet or intranet website posting or other
distribution) or any statement made to it orally or by telephone and believed by
it to be genuine and signed or sent or otherwise authenticated by the proper
party or parties (whether or not such Person in fact meets the requirements set
forth in the Loan Documents for being the maker thereof).

SECTION 8.03. Posting of Communications.   The Borrower agrees that the
Administrative Agent may, but shall not be obligated to, make any Communications
available to the Lenders by posting the Communications on IntraLinksTM,
DebtDomain, SyndTrak, ClearPar or any other electronic platform chosen by the
Administrative Agent to be its electronic transmission system (the “Approved
Electronic Platform”).

(a) Although the Approved Electronic Platform and its primary web portal are
secured with generally-applicable security procedures and policies implemented
or modified by the Administrative Agent from time to time (including, as of the
Effective Date, a user ID/password authorization system) and the Approved
Electronic Platform is secured through a per-deal authorization method whereby
each user may access the Approved Electronic Platform only on a deal-by-deal
basis, each of the Lenders and the Borrower acknowledges and agrees that the
distribution of material through an electronic medium is not necessarily secure,
that the Administrative Agent is not responsible for approving or vetting the
representatives or contacts of any Lender that are added to the Approved
Electronic Platform and that there are confidentiality and other risks
associated with such distribution.  Each of the Lenders and the

62

736428214 20644379

 

Borrower hereby approves distribution of the Communications through the Approved
Electronic Platform and understands and assumes the risks of such distribution.

(b) THE APPROVED ELECTRONIC PLATFORM AND THE COMMUNICATIONS ARE PROVIDED “AS IS”
AND “AS AVAILABLE”.  THE APPLICABLE PARTIES (AS DEFINED BELOW) DO NOT WARRANT
THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE
APPROVED ELECTRONIC PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR
OMISSIONS IN THE APPROVED ELECTRONIC PLATFORM AND THE COMMUNICATIONS.  NO
WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE
APPLICABLE PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE APPROVED
ELECTRONIC PLATFORM.  IN NO EVENT SHALL THE ADMINISTRATIVE AGENT, ANY ARRANGER
OR ANY OF THEIR RESPECTIVE RELATED PARTIES (COLLECTIVELY, “APPLICABLE PARTIES”)
HAVE ANY LIABILITY TO THE BORROWER, ANY LENDER OR ANY OTHER PERSON OR ENTITY FOR
DAMAGES OF ANY KIND, INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR
OTHERWISE) ARISING OUT OF THE BORROWER’S OR THE ADMINISTRATIVE AGENT’S
TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET OR THE APPROVED ELECTRONIC
PLATFORM.

“Communications” means, collectively, any notice, demand, communication,
information, document or other material provided by or on behalf of the Borrower
pursuant to any Loan Document or the transactions contemplated therein which is
distributed by the Administrative Agent or any Lender by means of electronic
communications pursuant to this Section, including through an Approved
Electronic Platform.

(c) Each Lender agrees that notice to it (as provided in the next sentence)
specifying that Communications have been posted to the Approved Electronic
Platform shall constitute effective delivery of the Communications to such
Lender for purposes of the Loan Documents.  Each Lender agrees (i) to notify the
Administrative Agent in writing (which could be in the form of electronic
communication) from time to time of such Lender’s email address to which the
foregoing notice may be sent by electronic transmission and (ii) that the
foregoing notice may be sent to such email address.

(d) Each of the Lenders and the Borrower agrees that the Administrative Agent
may, but (except as may be required by applicable law) shall not be obligated
to, store the Communications on the Approved Electronic Platform in accordance
with the Administrative Agent’s generally applicable document retention
procedures and policies.

(e) Nothing herein shall prejudice the right of the Administrative Agent or any
Lender to give any notice or other communication pursuant to any Loan Document
in any other manner specified in such Loan Document.

63

736428214 20644379

 

SECTION 8.04. The Administrative Agent Individually.  With respect to its
Commitment and Loans, the Person serving as the Administrative Agent shall have
and may exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender.  The terms “Lenders”, “Required Lenders” and any similar terms shall,
unless the context clearly otherwise indicates, include the Administrative Agent
in its individual capacity as a Lender or as one of the Required Lenders, as
applicable.  The Person serving as the Administrative Agent and its Affiliates
may accept deposits from, lend money to, own securities of, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind
of banking, trust or other business with, the Borrower, any Subsidiary or any
Affiliate of any of the foregoing as if such Person was not acting as the
Administrative Agent and without any duty to account therefor to the Lenders.

SECTION 8.05. Successor Administrative Agent.   The Administrative Agent may
resign at any time by giving 30 days’ prior written notice thereof to the
Lenders and the Borrower, whether or not a successor Administrative Agent has
been appointed.  Upon any such resignation, the Required Lenders shall have the
right to appoint a successor Administrative Agent.  If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent’s giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a bank with an office in Chicago, Illinois
or New York, New York or an Affiliate of any such bank.  In either case, such
appointment shall be subject to the prior written approval of the Borrower
(which approval may not be unreasonably withheld and shall not be required while
an Event of Default has occurred and is continuing).  Upon the acceptance of any
appointment as Administrative Agent by a successor Administrative Agent, such
successor Administrative Agent shall succeed to, and become vested with, all the
rights, powers, privileges and duties of the retiring Administrative Agent. 
Upon the acceptance of appointment as Administrative Agent by a successor
Administrative Agent, the retiring Administrative Agent shall be discharged from
its duties and obligations under this Agreement and the other Loan Documents. 
Prior to any retiring Administrative Agent’s resignation hereunder as
Administrative Agent, the retiring Administrative Agent shall take such action
as may be reasonably necessary to assign to the successor Administrative Agent
its rights as Administrative Agent under the Loan Documents.

(a) Notwithstanding paragraph (a) of this Section, in the event no successor
Administrative Agent shall have been so appointed and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its intent to resign, the retiring Administrative Agent may give notice of
the effectiveness of its resignation to the Lenders and the Borrower, whereupon,
on the date of effectiveness of such resignation stated in such notice, (i) the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents; and (ii) the Required
Lenders shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent; provided that (A)
all payments required to be made hereunder or under any other Loan Document to
the Administrative Agent for the account of any Person other than the
Administrative Agent shall be made directly to such Person and (B) all notices
and other communications required or contemplated to be given or made to the
Administrative Agent shall directly be given or made to each Lender.  Following
the effectiveness of the Administrative Agent’s resignation from its capacity as
such, the provisions of this Article and Section 9.03, as

64

736428214 20644379

 

well as any exculpatory, reimbursement and indemnification provisions set forth
in any other Loan Document, shall continue in effect for the benefit of such
retiring Administrative Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while the retiring Administrative Agent was acting as Administrative Agent.

SECTION 8.06. Acknowledgements of Lenders.   Each Lender represents that it is
engaged in making, acquiring or holding commercial loans in the ordinary course
of its business and that it has, independently and without reliance upon the
Administrative Agent, any Arranger or any other Lender, or any of the Related
Parties of any of the foregoing, and based on such documents and information as
it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement as a Lender, and to make, acquire or hold Loans hereunder. 
Each Lender also acknowledges that it will, independently and without reliance
upon the Administrative Agent, any Arranger or any other Lender, or any of the
Related Parties of any of the foregoing, and based on such documents and
information (which may contain material, non-public information within the
meaning of the United States securities laws concerning the Borrower and its
Affiliates) as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.

(a) Each Lender, by delivering its signature page to this Agreement on the
Effective Date, or delivering its signature page to an Assignment and Assumption
or any other Loan Document pursuant to which it shall become a Lender hereunder,
shall be deemed to have acknowledged receipt of, and consented to and approved,
each Loan Document and each other document required to be delivered to, or be
approved by or satisfactory to, the Administrative Agent or the Lenders on the
Effective Date.

SECTION 8.07. Certain ERISA Matters.  (a) Each Lender (x) represents and
warrants, as of the date such Person became a Lender party hereto, to, and (y)
covenants, from the date such Person became a Lender party hereto to the date
such Person ceases being a Lender party hereto, for the benefit of, the
Administrative Agent and not, for the avoidance of doubt, to or for the benefit
of the Borrower, that at least one of the following is and will be true:

(i) such Lender is not using “plan assets” (within the meaning of Section 3(42)
of ERISA or otherwise) of one or more Benefit Plans with respect to such
Lender’s entrance into, participation in, administration of and performance of
the Loans, the Commitments or this Agreement,

(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14
(a class exemption for certain transactions determined by independent qualified
professional asset managers), PTE 95-60 (a class exemption for certain
transactions involving insurance company general accounts), PTE 90-1 (a class
exemption for certain transactions involving insurance company pooled separate
accounts), PTE 91-38 (a class exemption for certain transactions involving bank
collective investment funds) or PTE 96-23 (a class exemption for certain
transactions determined by in-house asset managers), is applicable with respect
to

65

736428214 20644379

 

such Lender’s entrance into, participation in, administration of and performance
of the Loans, the Commitments and this Agreement,

(iii) (A) such Lender is an investment fund managed by a “Qualified Professional
Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified
Professional Asset Manager made the investment decision on behalf of such Lender
to enter into, participate in, administer and perform the Loans, the Commitments
and this Agreement, (C) the entrance into, participation in, administration of
and performance of the Loans, the Commitments and this Agreement satisfies the
requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to
the best knowledge of such Lender, the requirements of subsection (a) of Part I
of PTE 84-14 are satisfied with respect to such Lender’s entrance into,
participation in, administration of and performance of the Loans, the
Commitments and this Agreement, or

(iv) such other representation, warranty and covenant as may be agreed in
writing between the Administrative Agent, in its sole discretion, and such
Lender. 

(b)In addition, unless either (1) sub-clause (i) in the immediately preceding
clause (a) is true with respect to a Lender or (2) such Lender has provided
another representation, warranty and covenant in accordance with sub-clause (iv)
in the immediately preceding clause (a), such Lender further (x) represents and
warrants, as of the date such Person became a Lender party hereto, to, and (y)
covenants, from the date such Person became a Lender party hereto to the date
such Person ceases being a Lender party hereto, for the benefit of, the
Administrative Agent and not, for the avoidance of doubt, to or for the benefit
of the Borrower, that the Administrative Agent is not a fiduciary with respect
to the assets of such Lender involved in such Lender’s entrance into,
participation in, administration of and performance of the Loans, the
Commitments and this Agreement (including in connection with the reservation or
exercise of any rights by the Administrative Agent under this Agreement, any
Loan Document or any documents related hereto or thereto).

ARTICLE IX

Miscellaneous

SECTION 9.01. Notices.   Except in the case of notices and other communications
expressly permitted to be given by telephone (and subject to paragraph (b)
below), all notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by electronic mail, as follows:

(i) if to the Borrower, to it at

9025 North Lindbergh Drive
Peoria, Illinois 61615-1431

66

736428214 20644379

 

Attention:  Todd W. Bryant  
todd.bryant@rlicorp.com

(ii) if to the Administrative Agent, to

115 South LaSalle Street, 25th Floor

Chicago, IL 60603

Attn: Ben Mlot

Benjamin.mlot@bmo.com 

 

With a copy to: Nathan.sotomayor@bmo.com

 

and

(iii) if to any other Lender, to it at its address set forth in its
Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received.  Notices
delivered through Approved Electronic Platforms, to the extent provided in
paragraph (b) below, shall be effective as provided in said paragraph (b). 
Notices delivered through electronic mail shall be effective as provided in said
paragraph (c).

(b) Notices and other communications to the Lenders hereunder may be delivered
or furnished by using Approved Electronic Platforms pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender.  The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.

(c) Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an email address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient, at its e-mail address as described in the foregoing
clause (i), of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses (i)
and (ii) above, if such notice, email or other communication is not sent during
the normal business hours of the recipient, such notice or communication shall
be deemed to have been sent at the opening of business on the next business day
for the recipient.

(d) Any party hereto may change its address for notices and other communications
hereunder by notice to the other parties hereto.

67

736428214 20644379

 

SECTION 9.02. Waivers; Amendments.   No failure or delay by the Administrative
Agent or any Lender in exercising any right or power hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power.  The rights and remedies of the Administrative Agent and
the Lenders hereunder are cumulative and are not exclusive of any rights or
remedies that they would otherwise have.  No waiver of any provision of this
Agreement or consent to any departure by the Borrower therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.  Without limiting the generality
of the foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent or any Lender may have
had notice or knowledge of such Default at the time.

(a) Subject to Section 2.11(b) and Section 9.02(c) below, neither this Agreement
nor any provision hereof may be waived, amended or modified except pursuant to
an agreement or agreements in writing entered into by the Borrower and the
Required Lenders or by the Borrower and the Administrative Agent with the
consent of the Required Lenders; provided that no such agreement shall (i)
increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the scheduled date of
payment of the principal amount of any Loan, or any interest thereon, or any
fees payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment, without
the written consent of each Lender affected thereby, (iv) change Section 2.09(c)
or 2.18(b) or (c) in a manner that would alter the ratable reduction of
Commitments or the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) change the payment waterfall provisions of
Section 2.17(b) or 7.02 without the written consent of each Lender, or (vi)
change any of the provisions of this Section or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender; provided further that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent hereunder
without the prior written consent of the Administrative Agent.

(b) If the Administrative Agent and the Borrower acting together identify any
ambiguity, omission, mistake, typographical error or other defect in any
provision of this Agreement or any other Loan Document, then the Administrative
Agent and the Borrower shall be permitted to amend, modify or supplement such
provision to cure such ambiguity, omission, mistake, typographical error or
other defect, and such amendment shall become effective without any further
action or consent of any other party to this Agreement.

SECTION 9.03. Expenses; Indemnity; Damage Waiver.   The Borrower shall pay (i)
all reasonable out of pocket expenses incurred by the Administrative Agent and
its Affiliates, including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent, in connection with the syndication of the
credit facilities provided for herein, the preparation and administration of
this Agreement and the other Loan Documents or

68

736428214 20644379

 

any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), and (ii) all out-of-pocket expenses incurred by the Administrative
Agent or any Lender, including the fees, charges and disbursements of any
counsel for the Administrative Agent or any Lender, in connection with the
enforcement or protection of its rights in connection with this Agreement and
the other Loan Documents, including its rights under this Section, or in
connection with the Loans made hereunder, including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Loans.

(a) The Borrower shall indemnify the Administrative Agent, each Arranger and
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement, any
other Loan Document, or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto of their respective obligations
hereunder or thereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation, arbitration or proceeding relating to any of the
foregoing, whether or not such claim, litigation, investigation, arbitration or
proceeding is brought by the Borrower or its equity holders, Affiliates,
creditors or any other third Person and whether based on contract, tort or any
other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.  This Section 9.03(b) shall not apply with respect to Taxes
other than any Taxes that represent losses, claims or damages arising from any
non-Tax claim.

(b) Each Lender severally agrees to pay any amount required to be paid by the
Borrower under paragraph (a) or (b) of this Section 9.03 to the Administrative
Agent and each Related Party of any of the foregoing Persons (each, an “Agent
Indemnitee”) (to the extent not reimbursed by the Borrower and without limiting
the obligation of the Borrower to do so), ratably according to their respective
Applicable Percentage in effect on the date on which indemnification is sought
under this Section (or, if indemnification is sought after the date upon which
the Commitments shall have terminated and the Loans shall have been paid in
full, ratably in accordance with such Applicable Percentage immediately prior to
such date), from and against any and all losses, claims, damages, liabilities
and related expenses, including the fees, charges and disbursements of any kind
whatsoever that may at any time (whether before or after the payment of the
Loans) be imposed on, incurred by or asserted against such Agent Indemnitee in
any way relating to or arising out of the Commitments, this Agreement, any of
the other Loan Documents or any documents contemplated by or referred to herein
or therein or the transactions contemplated hereby or thereby or any action
taken or omitted by such Agent Indemnitee under or in connection with any of the
foregoing; provided that the unreimbursed expense or

69

736428214 20644379

 

indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against such Agent Indemnitee in its capacity as
such; provided further that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a final
and nonappealable decision of a court of competent jurisdiction to have resulted
from such Agent Indemnitee’s gross negligence or willful misconduct.  The
agreements in this Section shall survive the termination of this Agreement and
the payment of the Loans and all other amounts payable hereunder.

(c) To the extent permitted by applicable law (i) the Borrower shall not assert,
and the Borrower hereby waives, any claim against any Indemnitee for any damages
arising from the use by others of information or other materials obtained
through telecommunications, electronic or other information transmission systems
(including the Internet), and (ii) no party hereto shall assert, and each such
party hereby waives, any claim against any other party hereto, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document, or any agreement or instrument
contemplated hereby or thereby, the Transactions, any Loan or the use of the
proceeds thereof; provided that, nothing in this clause (d)(ii) shall relieve
the Borrower of any obligation it may have to indemnify an Indemnitee against
special, indirect, consequential or punitive damages asserted against such
Indemnitee by a third party.

(d) All amounts due under this Section shall be payable promptly after written
demand therefor.

SECTION 9.04. Successors and Assigns.   The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that (i) the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by the Borrower without such consent shall be null and void) and
(ii) no Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section.  Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants (to the extent provided in paragraph (c) of this Section) and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may
assign to one or more Persons (other than an Ineligible Institution) all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld) of:

(A) the Borrower, provided that, the Borrower shall be deemed to have consented
to an assignment of all or a portion of the Revolving Loans and Commitments
unless it shall have objected thereto by written notice to the

70

736428214 20644379

 

Administrative Agent within ten (10) Business Days after having received notice
thereof; provided that no consent of the Borrower shall be required for an
assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an
Event of Default has occurred and is continuing, any other assignee; and

(B) the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment of any Commitment to an assignee that
is a Lender (other than a Defaulting Lender) with a Commitment immediately prior
to giving effect to such assignment.

(iv) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender’s
Commitment or Loans, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, provided that no such
consent of the Borrower shall be required if an Event of Default has occurred
and is continuing;

(B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;

(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500; and

(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more Credit Contacts to whom all syndicate-level information
(which may contain material non-public information about the Borrower and its
related parties or its securities) will be made available and who may receive
such information in accordance with the assignee’s compliance procedures and
applicable laws, including Federal and state securities laws.

For the purposes of this Section 9.04(b), the term “Approved Fund” and
“Ineligible Institution” have the following meanings:

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

71

736428214 20644379

 

“Ineligible Institution” means (a) a natural person, (b) a Defaulting Lender or
its Lender Parent, (c) a holding company, investment vehicle or trust for, or
owned and operated for the primary benefit of, a natural person or relative(s)
thereof or (d) the Borrower or any of its Affiliates; provided that, with
respect to clause (c), such holding company, investment vehicle or trust shall
not constitute an Ineligible Institution if it (x) has not been established for
the primary purpose of acquiring any Loans or Commitments, (y) is managed by a
professional advisor, who is not such natural person or a relative thereof,
having significant experience in the business of making or purchasing commercial
loans, and (z) has assets greater than $25,000,000 and a significant part of its
activities consist of making or purchasing commercial loans and similar
extensions of credit in the ordinary course of its business; provided,  further,
that upon the occurrence and during the continuance of an Event of Default, any
Person (other than a Lender) shall be an Ineligible Institution if after giving
effect to any proposed assignment to such Person, such Person would hold more
than 25% of the then outstanding Total Revolving Credit Exposure or Commitments,
as the case may be.

(v) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of
this Section, from and after the effective date specified in each Assignment and
Assumption the assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.12,
 2.13,  2.14 and 9.03).  Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

(vi) The Administrative Agent, acting for this purpose as a non-fiduciary agent
of the Borrower, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitment of, and principal amount (and
stated interest) of the Loans owing to, each Lender pursuant to the terms hereof
from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders shall
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary.  The Register shall be available for inspection by the
Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

(vii) Upon its receipt of (x) a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee or (y) to the extent applicable,
an agreement incorporating an Assignment and Assumption by reference pursuant to
an Approved Electronic Platform as to which the Administrative Agent and the
parties to the Assignment and Assumption are participants, the assignee’s
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing

72

736428214 20644379

 

and recordation fee referred to in paragraph (b) of this Section and any written
consent to such assignment required by paragraph (b) of this Section, the
Administrative Agent shall accept such Assignment and Assumption and record the
information contained therein in the Register; provided that if either the
assigning Lender or the assignee shall have failed to make any payment required
to be made by it pursuant to Section 9.03(c), the Administrative Agent shall
have no obligation to accept such Assignment and Assumption and record the
information therein in the Register unless and until such payment shall have
been made in full, together with all accrued interest thereon.  No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.

(e) Any Lender may, without the consent of, or notice to, the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a “Participant”), other than an Ineligible Institution, in all or a portion of
such Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans owing to it); provided that (A) such
Lender’s obligations under this Agreement shall remain unchanged; (B) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations; and (C) the Borrower, the Administrative Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement.  Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the first proviso
to Section 9.02(b) that affects such Participant.  The Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.12,  2.13 and 2.14
(subject to the requirements and limitations therein, including the requirements
under Sections  2.14(f) and (g) (it being understood that the documentation
required under Section 2.14(f) shall be delivered to the participating Lender
and the information and documentation required under Section 2.14(g) will be
delivered to the Borrower and the Administrative Agent)) to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section; provided that such Participant (A) agrees to be
subject to the provisions of Section 2.16 as if it were an assignee under
paragraph (b) of this Section; and (B) shall not be entitled to receive any
greater payment under Section 2.12 or 2.14, with respect to any participation,
than its participating Lender would have been entitled to receive, except to the
extent such entitlement to receive a greater payment results from a Change in
Law that occurs after the Participant acquired the applicable participation. 
Each Lender that sells a participation agrees, at the Borrower’s request and
expense, to use reasonable efforts to cooperate with the Borrower to effectuate
the provisions of Section 2.16(b) with respect to any Participant.  To the
extent permitted by law, each Participant also shall be entitled to the benefits
of Section 9.08 as though it were a Lender; provided that such Participant
agrees to be subject to Section 2.15(c) as though it were a Lender.  Each Lender
that sells a participation shall, acting solely for this purpose as a
non-fiduciary agent of the Borrower, maintain a register on which it enters the
name and address of each Participant and the principal amounts (and stated
interest) of each Participant’s interest in the Loans or other obligations under
the Loan Documents (the “Participant Register”); provided that no Lender shall
have any obligation to disclose all or any portion of the Participant Register
(including the identity of any Participant or any information

73

736428214 20644379

 

relating to a Participant’s interest in any Commitments or Loans or its other
obligations under any Loan Document) to any Person except to the extent that
such disclosure is necessary to establish that such Commitment, Loan or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations.  The entries in the Participant Register shall be
conclusive absent manifest error, and such Lender shall treat each Person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the contrary. 
For the avoidance of doubt, the Administrative Agent (in its capacity as
Administrative Agent) shall have no responsibility for maintaining a Participant
Register.

(f) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 9.05. Survival.  All covenants, agreements, representations and
warranties made by the Borrower herein and in the other Loan Documents and in
the certificates or other instruments delivered in connection with or pursuant
to this Agreement or any other Loan Documents shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of this Agreement and the making of any Loans, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid and so long as the
Commitments have not expired or terminated.  The provisions of Sections 2.12,
 2.13,  2.14 and 9.03 and Article VIII shall survive and remain in full force
and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the
Commitments or the termination of this Agreement or any provision hereof.

SECTION 9.06. Counterparts; Integration; Effectiveness; Electronic Execution. 
 This Agreement may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract.  This
Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating to
the subject matter hereof.  Except as provided in Section 4.01, this Agreement
shall become effective when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.

74

736428214 20644379

 

(a) Delivery of an executed counterpart of a signature page of this Agreement by
emailed pdf. or any other electronic means that reproduces an image of the
actual executed signature page shall be effective as delivery of a manually
executed counterpart of this Agreement.  The words “execution,” “signed,”
“signature,” “delivery,” and words of like import in or relating to any document
to be signed in connection with this Agreement and the transactions contemplated
hereby shall be deemed to include Electronic Signatures, deliveries or the
keeping of records in electronic form, each of which shall be of the same legal
effect, validity or enforceability as a manually executed signature, physical
delivery thereof or the use of a paper-based recordkeeping system, as the case
may be, to the extent and as provided for in any applicable law, including the
Federal Electronic Signatures in Global and National Commerce Act, the Illinois
Electronic Commerce Security Act, or any other similar state laws based on the
Uniform Electronic Transactions Act; provided that nothing herein shall require
the Administrative Agent to accept electronic signatures in any form or format
without its prior written consent.

SECTION 9.07. Severability.  Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 9.08. Right of Setoff.  If an Event of Default shall have occurred and
be continuing, each Lender and each of its Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held, and other obligations at any time owing,
by such Lender or any such Affiliate, to or for the credit or the account of the
Borrower against any and all of the obligations of the Borrower now or hereafter
existing under this Agreement or any other Loan Document to such Lender or its
Affiliates, irrespective of whether or not such Lender or Affiliate shall have
made any demand under this Agreement or any other Loan Document and although
such obligations of the Borrower may be contingent or unmatured or are owed to a
branch office or Affiliate of such Lender different from the branch office or
Affiliate holding such deposit or obligated on such indebtedness; provided that
in the event that any Defaulting Lender shall exercise any such right of setoff,
(x) all amounts so set off shall be paid over immediately to the Administrative
Agent for further application in accordance with the provisions of Section 2.17
and, pending such payment, shall be segregated by such Defaulting Lender from
its other funds and deemed held in trust for the benefit of the Administrative
Agent and the Lenders, and (y) the Defaulting Lender shall provide promptly to
the Administrative Agent a statement describing in reasonable detail the
Obligations owing to such Defaulting Lender as to which it exercised such right
of setoff.  The rights of each Lender and its Affiliates under this Section are
in addition to other rights and remedies (including other rights of setoff) that
such Lender or its Affiliates may have.  Each Lender agrees to notify the
Borrower and the Administrative Agent promptly after any such setoff and
application; provided that the failure to give such notice shall not affect the
validity of such setoff and application.

SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.   This
Agreement and the other Loan Documents shall be construed in accordance with and
governed by the law of the State of Illinois.

75

736428214 20644379

 

(a) Each of the Lenders and the Administrative Agent hereby irrevocably and
unconditionally agrees that, notwithstanding the governing law provisions of any
applicable Loan Document, any claims brought against the Administrative Agent by
any Lender relating to this Agreement, any other Loan Document or the
consummation or administration of the transactions contemplated hereby or
thereby shall be construed in accordance with and governed by the law of the
State of Illinois.

(b) Each of the parties hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the exclusive jurisdiction of the United States
District Court for the Northern District of Illinois (or if such court lacks
subject matter jurisdiction, any state court of the State of Illinois sitting in
Cook County), and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any other Loan
Document or the transactions relating hereto or thereto, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may (and any such claims, cross-claims or third party claims brought
against the Administrative Agent or any of its Related Parties may only) be
heard and determined in such Federal (to the extent permitted by law) or
Illinois State court.  Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.  Nothing in this Agreement or in any other Loan Document shall affect any
right that the Administrative Agent or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement against the Borrower or its
properties in the courts of any jurisdiction.

(c) Each of the parties hereto hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (c) of this Section.  Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01.  Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

SECTION 9.10. WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE

76

736428214 20644379

 

BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.11. Headings.  Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

SECTION 9.12. Confidentiality.  Each of the Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any Governmental Authority (including any self-regulatory authority, such as
the National Association of Insurance Commissioners), (c) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party to this Agreement, (e) in connection with the exercise of
any remedies hereunder or under any other Loan Document or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder of
under any other Loan Document, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) on a confidential basis to (1) any rating
agency in connection with rating the Company or its Subsidiaries or the credit
facilities provided for herein or (2) the CUSIP Service Bureau or any similar
agency in connection with the issuance and monitoring of identification numbers
with respect to the credit facilities provided for herein, (h) with the consent
of the Borrower or (i) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent or any Lender on a non-confidential basis
from a source other than the Borrower.  For the purposes of this Section,
“Information” means all information received from the Borrower relating to the
Borrower or its business, other than any such information that is available to
the Administrative Agent or any Lender on a non-confidential basis prior to
disclosure by the Borrower and other than information pertaining to this
Agreement routinely provided by arrangers to data service providers, including
league table providers, that serve the lending industry; provided that, in the
case of information received from the Borrower after the date hereof, such
information is clearly identified at the time of delivery as confidential.  Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

SECTION 9.13. Material Non-Public Information.

(a) EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12
FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC
INFORMATION CONCERNING THE BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE
SECURITIES,

77

736428214 20644379

 

AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF
MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC
INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING
FEDERAL AND STATE SECURITIES LAWS.

(b) ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY
THE BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY
CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER AND ITS RELATED
PARTIES OR ITS SECURITIES.  ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER
AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE
QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN
MATERIAL NONPUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND
APPLICABLE LAW.

SECTION 9.14. Interest Rate Limitation.  Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Rate to the date of repayment, shall
have been received by such Lender.

SECTION 9.15. No Fiduciary Duty, etc.  The Borrower acknowledges and agrees, and
acknowledges its Subsidiaries’ understanding, that no Credit Party will have any
obligations except those obligations expressly set forth herein and in the other
Loan Documents and each Credit Party is acting solely in the capacity of an
arm’s length contractual counterparty to the Borrower with respect to the Loan
Documents and the transaction contemplated therein and not as a financial
advisor or a fiduciary to, or an agent of, the Borrower or any other person. 
The Borrower agrees that it will not assert any claim against any Credit Party
based on an alleged breach of fiduciary duty by such Credit Party in connection
with this Agreement and the transactions contemplated hereby.  Additionally, the
Borrower acknowledges and agrees that no Credit Party is advising the Borrower
as to any legal, tax, investment, accounting, regulatory or any other matters in
any jurisdiction.  The Borrower shall consult with its own advisors concerning
such matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby, and the
Credit Parties shall have no responsibility or liability to the Borrower with
respect thereto.

78

736428214 20644379

 

The Borrower further acknowledges and agrees, and acknowledges its Subsidiaries’
understanding, that each Credit Party, together with its Affiliates, is a full
service securities or banking firm engaged in securities trading and brokerage
activities as well as providing investment banking and other financial
services.  In the ordinary course of business, any Credit Party may provide
investment banking and other financial services to, and/or acquire, hold or
sell, for its own accounts and the accounts of customers, equity, debt and other
securities and financial instruments (including bank loans and other
obligations) of, the Borrower and other companies with which the Borrower may
have commercial or other relationships.  With respect to any securities and/or
financial instruments so held by any Credit Party or any of its customers, all
rights in respect of such securities and financial instruments, including any
voting rights, will be exercised by the holder of the rights, in its sole
discretion.

In addition, the Borrower acknowledges and agrees, and acknowledges its
Subsidiaries’ understanding, that each Credit Party and its affiliates may be
providing debt financing, equity capital or other services (including financial
advisory services) to other companies in respect of which the Borrower may have
conflicting interests regarding the transactions described herein and
otherwise.  No Credit Party will use confidential information obtained from the
Borrower by virtue of the transactions contemplated by the Loan Documents or its
other relationships with the Borrower in connection with the performance by such
Credit Party of services for other companies, and no Credit Party will furnish
any such information to other companies.  The Borrower also acknowledges that no
Credit Party has any obligation to use in connection with the transactions
contemplated by the Loan Documents, or to furnish to the Borrower, confidential
information obtained from other companies.

SECTION 9.16. USA PATRIOT Act.  Each Lender that is subject to the requirements
of the USA PATRIOT Act of 2001 (the “Patriot Act”) hereby notifies the Borrower
that pursuant to the requirements of the Patriot Act, it is required to obtain,
verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will
allow such Lender to identify the Borrower in accordance with the Patriot Act.

SECTION 9.17. Acknowledgement and Consent to Bail-In of EEA Financial
Institutions.  Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any EEA Financial
Institution arising under any Loan Document may be subject to the Write-Down and
Conversion Powers of an EEA Resolution Authority and agrees and consents to, and
acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-In Action on any such liability, including, if
applicable:

(i) a reduction in full or in part or cancellation of any such liability;

79

736428214 20644379

 

(ii) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent entity,
or a bridge institution that may be issued to it or otherwise conferred on it,
and that such shares or other instruments of ownership will be accepted by it in
lieu of any rights with respect to any such liability under this Agreement or
any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the
exercise of the Write-Down and Conversion Powers of any EEA Resolution
Authority.

 

80

736428214 20644379

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective authorized officers as of the day and
year first above written.

RLI CORP.

By:  _____/s/ Todd W. Bryant______
Name:  Todd W. Bryant
Title:  VP, Chief Financial Officer

By:___/s/ Aaron P. Diefenthaler______
Name:  Aaron P. Diefenthaler
Title:  VP, Chief Investment Officer &

Treasurer

736428214 20644379Credit Agreement

 

 

BANK OF MONTREAL, CHICAGO BRANCH, as a Lender and as Administrative Agent

By:____/s/ Benjamin Mlot__________
Name:  Benjamin Mlot
Title:  Director

 

 

736428214 20644379Credit Agreement

 

Schedule 2.01

Commitments

BANK

ALLOCATION

PERCENT

Bank of Montreal, Chicago Branch

$60,000,000

100.00%

Total

$60,000,000

100.00%

 

 

 

736428214 20644379

 

Schedule 3.08

Subsidiaries of RLI Corp.

Name

Jurisdiction of Incorporation

Percentage Ownership

RLI Insurance Company

Illinois

100%

Mt. Hawley Insurance Company

Illinois

100%

RLI Underwriting Services, Inc.

Illinois

100%

Safe Fleet Insurance Services, Inc.

California

100%

Data & Staff Service Company

Washington

100%

Contractors Bonding & Insurance Company

Illinois

100%

 

 

 

736428214 20644379

 

Schedule 3.19

Financial Assurances

NONE

736428214 20644379

 

ANNEX 1

EXHIBIT A

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”).  Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard
Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to
and incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the facility identified below and
(ii) to the extent permitted to be assigned under applicable law, all claims,
suits, causes of action and any other right of the Assignor (in its capacity as
a Lender) against any Person, whether known or unknown, arising under or in
connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby or in any
way based on or related to any of the foregoing, including contract claims, tort
claims, malpractice claims, statutory claims and all other claims at law or in
equity related to the rights and obligations sold and assigned pursuant to
clause (i) above (the rights and obligations sold and assigned pursuant to
clauses (i) and (ii) above being referred to herein collectively as the
“Assigned Interest”).  Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.

 

 

 

1.

Assignor:

2.

Assignee:

 

 

[and is an Affiliate/Approved Fund of [identify Lender]]

3.

Borrower(s):

RLI Corp.

4.

Administrative Agent:

Bank of Montreal, Chicago Branch, as the administrative agent under the Credit
Agreement

736428214 20644379

 

5.

Credit Agreement

Credit Agreement dated as of March 27, 2020 among RLI Corp., the Lenders parties
thereto, Bank of Montreal, Chicago Branch, as Administrative Agent, and the
other agents parties thereto

6.

Assigned Interest:

 

 

 

Aggregate Amount of Commitment/Loans for all Lenders

Amount of Commitment/Loans Assigned

Percentage Assigned of Commitment/Loans

$

$

%

$

$

%

$

$

%

 

Effective Date:  ___________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

The Assignee agrees to deliver to the Administrative Agent a completed
Administrative Questionnaire in which the Assignee designates one or more Credit
Contacts to whom all syndicate-level information (which may contain material
non-public information about the Borrower and its Related Parties or their
respective securities) will be made available and who may receive such
information in accordance with the Assignee’s compliance procedures and
applicable laws, including Federal and state securities laws.

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR

[NAME OF ASSIGNOR]

By:___________________________________________________________________________________________________

Title:

ASSIGNEE

[NAME OF ASSIGNEE]

By:___________________________________________________________________________________________________

Title:

 

 

736428214 20644379

 

[Consented to and] Accepted:

BANK OF MONTREAL, CHICAGO BRANCH, as
Administrative Agent

By

Title:

[Consented to:]

RLI CORP.

By

Title:

 

 

736428214 20644379

 

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

1.Representations and Warranties.

1.1 Assignor.  The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any collateral
thereunder, (iii) the financial condition of the Borrower, any of its
Subsidiaries or Affiliates or any other Person obligated in respect of the
Credit Agreement, (iv) any requirements under applicable law for the Assignee to
become a lender under the Credit Agreement or to charge interest at the rate set
forth therein from time to time or (v) the performance or observance by the
Borrower, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under the Credit Agreement.

1.2. Assignee.  The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement and under applicable law
that are required to be satisfied by it in order to acquire the Assigned
Interest and become a Lender, (iii) from and after the Effective Date, it shall
be bound by the provisions of the Credit Agreement as a Lender thereunder and,
to the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to Section
5.01 thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without
reliance on the Administrative Agent, any Arranger or any other Lender and their
respective Related Parties, and (v) attached to the Assignment and Assumption is
any documentation required to be delivered by it pursuant to the terms of the
Credit Agreement, duly completed and executed by the Assignee; and (b) agrees
that (i) it will, independently and without reliance on the Administrative
Agent, any Arranger, the Assignor or any other Lender and their respective
Related Parties, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender.

2.Payments.  From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.

736428214 20644379

 

3.General Provisions.  This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns.  This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument.  Acceptance and
adoption of the terms of this Assignment and Assumption by the Assignee and the
Assignor by Electronic Signature or delivery of an executed counterpart of a
signature page of this Assignment and Assumption by any Approved Electronic
Platform shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption.  This Assignment and Assumption shall be
governed by, and construed in accordance with, the law of the State of Illinois.

 

 

736428214 20644379

 

EXHIBIT B

[FORM OF] BORROWING REQUEST

Bank of Montreal, Chicago Branch,
as Administrative Agent
115 South LaSalle Street, 25th Floor

Chicago, IL 60603

Attn: Ben Mlot

Benjamin.mlot@bmo.com 

With a copy to: Nathan.sotomayor@bmo.com

[Date]

Ladies and Gentlemen:

Reference is hereby made to the Credit Agreement dated as of March 27, 2020 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among RLI Corp., each lender from time to time party thereto and
Bank of Montreal, Chicago Branch, as Administrative Agent.  Unless otherwise
defined herein, terms defined in the Credit Agreement and used herein shall have
the meanings given to them in the Credit Agreement.  This notice constitutes a
Borrowing Request and the Borrower hereby gives you notice, pursuant to Section
2.03 of the Credit Agreement, that it requests a Borrowing under the Credit
Agreement, and in that connection the Borrower specifies the following
information with respect to such Borrowing:

(A)Aggregate principal amount of Borrowing:  $___________

(B)Date of Borrowing (which is a Business Day):___________

(C)Type of Borrowing:________________________________

(D)Interest Period:_______________________

[(E)Location and number of the Borrower’s account to which proceeds of the
requested Borrowing are to be disbursed:  [NAME OF BANK] (Account
No.:_________)]

The Borrower hereby certifies that the conditions specified in paragraphs (a)
and (b) of Section 4.02 of the Credit Agreement have been satisfied and that,
after giving effect to the

736428214 20644379

 

Borrowing requested hereby, the Total Revolving Credit Exposure shall not exceed
the maximum amount thereof specified in Section 2.01 of the Credit Agreement.

Very truly yours,
RLI CORP.,

by_____________________________________________________________________________________________________

Name: 
Title:

 

 

736428214 20644379

 

EXHIBIT C

[FORM OF] INTEREST ELECTION REQUEST

Bank of Montreal, Chicago Branch,
as Administrative Agent
115 South LaSalle Street, 25th Floor

Chicago, IL 60603

Attn: Ben Mlot

Benjamin.mlot@bmo.com

With a copy to: Nathan.sotomayor@bmo.com

[Date]

Ladies and Gentlemen:

Reference is hereby made to the Credit Agreement dated as of March 27, 2020 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among RLI Corp., Bank of Montreal, Chicago Branch, as
administrative agent, and each lender from time to time party thereto.  Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.  This notice
constitutes an Interest Election Request and the Borrower hereby gives you
notice, pursuant to Section 2.05 of the Credit Agreement, that it requests to
convert an existing Borrowing under the Credit Agreement, and in that connection
the Borrower specifies the following information with respect to such conversion
requested hereby:

(A)List date, Type, principal amount and Interest Period (if applicable) of
existing Borrowing:  ____________

(B)Aggregate principal amount of resulting Borrowing:  $____________

(C)Effective date of interest election (which is a Business Day):__________

(D)Type of Borrowing:_________________________________________

(E)Interest Period and last day thereof (if a Eurodollar
Borrowing):________________

Very truly yours,
RLI CORP.,

736428214 20644379

 

by_____________________________________________________________________________________________________

Name: 
Title:

 

 

736428214 20644379

 

EXHIBIT D-1

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of March 27, 2020 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among RLI Corp., Bank of Montreal, Chicago Branch, as
administrative agent, and each lender from time to time party thereto.

Pursuant to the provisions of Section 2.14 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Loan(s) (as well as any promissory note(s) evidencing such Loan(s)) in
respect of which it is providing this certificate, (ii) it is not a bank within
the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent
shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the
Code and (iv) it is not a controlled foreign corporation related to the Borrower
as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with a
certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form
W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform the Borrower and the Administrative Agent, and (2) the undersigned
shall have at all times furnished the Borrower and the Administrative Agent with
a properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

[NAME OF LENDER]

By:

Name:
Title:

Date:  __________ __, 20[ ]

 

 

736428214 20644379

 

EXHIBIT D-2

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of March 27, 2020 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among RLI Corp., Bank of Montreal, Chicago Branch, as
administrative agent, and each lender from time to time party thereto.

Pursuant to the provisions of Section 2.14 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate, (ii)
it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii)
it is not a ten percent shareholder of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code.

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E. By executing
this certificate, the undersigned agrees that (1) if the information provided on
this certificate changes, the undersigned shall promptly so inform such Lender
in writing, and (2) the undersigned shall have at all times furnished such
Lender with a properly completed and currently effective certificate in either
the calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

[NAME OF PARTICIPANT]

By:

Name:
Title:

Date:  __________ __, 20[ ]

 

 

736428214 20644379

 

EXHIBIT D-3

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of March 27, 2020 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among RLI Corp., Bank of Montreal, Chicago Branch, as
administrative agent, and each lender from time to time party thereto.

Pursuant to the provisions of Section 2.14 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect such participation, neither the undersigned
nor any of its direct or indirect partners/members is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a ten percent shareholder of the
Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of
its direct or indirect partners/members is a controlled foreign corporation
related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption:  (i) an IRS Form W-8BEN or IRS
Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or
IRS Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is
claiming the portfolio interest exemption.  By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform such Lender and (2) the
undersigned shall have at all times furnished such Lender with a properly
completed and currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned, or in either of the two
calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

[NAME OF PARTICIPANT]

By:

Name:
Title:

Date:  __________ __, 20[ ]

 

 

736428214 20644379

 

EXHIBIT D-4

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement dated as of March 27, 2020 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among RLI Corp., Bank of Montreal, Chicago Branch, as
administrative agent, and each lender from time to time party thereto.

Pursuant to the provisions of Section 2.14 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the Loan(s)
(as well as any promissory note(s) evidencing such Loan(s)) in respect of which
it is providing this certificate, (ii) its direct or indirect partners/members
are the sole beneficial owners of such Loan(s) (as well as any promissory
note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit
pursuant to this Credit Agreement or any other Loan Document, neither the
undersigned nor any of its direct or indirect partners/members is a bank
extending credit pursuant to a loan agreement entered into in the ordinary
course of its trade or business within the meaning of Section 881(c)(3)(A) of
the Code, (iv) none of its direct or indirect partners/members is a ten percent
shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the
Code and (v) none of its direct or indirect partners/members is a controlled
foreign corporation related to the Borrower as described in Section 881
(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with IRS
Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption:  (i) an IRS
Form W-8BEN or Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS
Form W-8BEN or IRS W-8BEN-E from each of such partner’s/member’s beneficial
owners that is claiming the portfolio interest exemption.  By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform the Borrower and
the Administrative Agent, and (2) the undersigned shall have at all times
furnished the Borrower and the Administrative Agent with a properly completed
and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years
preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

[NAME OF LENDER]

By:

Name:
Title:

Date:  __________ __, 20[ ]

736428214 20644379

 

EXHIBIT E

[FORM OF] COMPLIANCE CERTIFICATE

 

Financial Statement Date:             , 20[●]  

To:Bank of Montreal, Chicago Branch,
as Administrative Agent
115 South LaSalle Street, 25th Floor

Chicago, IL 60603

Attn: Ben Mlot

Benjamin.mlot@bmo.com

Ladies and Gentlemen:

 

Reference is hereby made to the Credit Agreement dated as of March 27, 2020 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among RLI Corp. (the “Borrower”), each lender from time to time
party thereto and Bank of Montreal, Chicago Branch, as Administrative Agent (the
“Administrative Agent”).  Capitalized terms used but not defined herein shall
have the meanings given such terms in the Credit Agreement.

 

The undersigned, ____________________, hereby certifies as of the date hereof
that he/she is the chief financial officer of the Borrower, and that, as such,
he/she is authorized to execute and deliver this Compliance Certificate to the
Administrative Agent on behalf of the Borrower, and that:

 

[Use following paragraph 1 for fiscal year-end financial statements]

 

1.The Borrower has delivered the year-end audited consolidated financial
statements required by Section 5.01(a) of the Credit Agreement for the fiscal
year of the Borrower ended as of the above date, together with the report and
opinion of an independent registered public accounting firm required by such
section.

[Use following paragraph 1 for fiscal quarter-end financial statements]

 

1.The Borrower has delivered the unaudited consolidated financial statements
required by Section 5.01(b) of the Credit Agreement for the fiscal quarter of
the Borrower ended as of the above date.  Such financial statements fairly
present in all material respects the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a consolidated
basis.

 

2.The undersigned has reviewed and is familiar with the terms of the Credit
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and condition (financial or otherwise) of
the Borrower during the accounting period covered by such financial statements.

 

736428214 20644379

 

3.A review of the activities of the Borrower during such fiscal period has been
made under the supervision of the undersigned with a view to determining whether
during such fiscal period the Borrower performed and observed all of its
Obligations under the Loan Documents, and

 

[select one:]

[to the best knowledge of the undersigned, no event or condition exists as
of  the date of this Compliance Certificate which constitutes a Default or an
Event of Default.]

--or—

[to the best knowledge of the undersigned, during such fiscal period the
following covenants or conditions have not been performed or observed and the
following is a list of each such Default or Event of Default and its nature and
status:]

 

4.The financial covenant analyses and information set forth on Schedule 1
attached hereto are true and accurate on and as of the date of this Compliance
Certificate.

 

IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as
of

,  .

RLI CORP.

By: 

Name: 

Title: 

736428214 20644379

 

For the Quarter/Year ended ___________________(“Statement Date”)

 

SCHEDULE 1
to the Compliance Certificate
($ in 000’s)

 

COVENANT COMPLIANCE WORKSHEET

A.Maximum Consolidated Indebtedness to Consolidated Total Capitalization
(Section 6.07(a) of the Credit Agreement)

 

 

 

 

 

(1

)

Indebtedness as of the date of determination, determined on a consolidated basis
in accordance with GAAP:

 

 

 

(a)All obligations for borrowed money (other than obligations under any FHLB
Agreement)

$____________

 

 

(b)All obligations representing the deferred purchase price of property or
services (other than accounts payable arising in the ordinary course of business
payable on terms customary in the trade)

$____________

 

 

(c)All obligations, whether or not assumed, secured by Liens or payable out of
the proceeds or production from property now or hereafter owned or acquired

$____________

 

 

(d)All obligations which are evidenced by notes, acceptances, or other
instruments

$____________

 

 

(e)All obligations to purchase securities or other property arising out of or in
connection with the sale of the same or substantially similar securities or
property

$____________

 

 

(f)All Capital Lease Obligations

$____________

 

 

(g)All obligations arising in respect of reverse repurchase transactions

$____________

 

 

(h)All reimbursement obligations arising in respect of drawn letters of credit

$____________

 

736428214 20644379

 

 

(i)All senior obligations with respect to Financial Hedges, but only following
the occurrence of a default under the applicable Financial Hedge or an Event of
Default

$____________

 

 

(j)All senior obligations with respect to debt for which a Person is responsible
or liable solely as a guarantor, but only from and after the date demand for
payment is made under the applicable guaranty

$____________

 

 

(k)All other obligations for borrowed money or other financial accommodation
which in accordance with GAAP would be shown as a liability on the consolidated
balance sheet

$____________

 

 

(l)Total Consolidated Indebtedness as of the date of determination: 
Add Lines 1(a) through 1(k)

 

$____________

(2)

Consolidated Total Capitalization as of the date of determination:

 

 

 

(a)Consolidated Net Worth

$____________

 

 

(b)Consolidated Indebtedness

$____________

 

 

(d)Consolidated Total Capitalization 
Add Lines 2(a) and 2(b)

 

$____________

(3)

Consolidated Indebtedness to Consolidated Total Capitalization: 
Divide Line 1(l) by Line 2(d)

 

$____________

(4)

Required ratio of Consolidated Indebtedness to Consolidated Total Capitalization

 

0.35 : 1.0

 

736428214 20644379

 

 

B.Minimum Consolidated Net Worth
(Section 6.07(b) of the Credit Agreement)

 

 

 

 

 

(1)

Base for calculating Consolidated Net Worth (65% of Consolidated Net Worth on
the Closing Date):

 

$[_____]

 

(2)

(a)Consolidated Net Income for each fiscal quarter (if positive) beginning with
the fiscal quarter ending after the Closing Date:

$____________

 

 

(b)Net income adjustment:
Multiply Line 2(a) by 50%

 

$____________

(3)

(a)Aggregate net cash proceeds of all issuances by the Borrower of shares of its
capital stock from and after the Closing Date

$____________

 

 

(b)Capital Stock issuance adjustment:
Multiply Line 3(a) by 50%

 

$____________

(4)

Minimum Consolidated Net Worth as of the date of determination:

Add Lines 1, 2(b) and 3(b)

 

$____________

(5)

Consolidated Net Worth: consolidated stockholders’ equity of the Borrower and
its Subsidiaries calculated on a consolidated basis

 

$____________

 

 

 

736428214 20644379