EXHIBIT 10.2

AMENDED AND RESTATED CREDIT AGREEMENT

dated as of

September 20, 2016

by and among

ACP RE HOLDINGS, LLC

MICHAEL KARFUNKEL FAMILY 2005 TRUST,

THE LENDERS PARTY HERETO

and

AMTRUST FINANCIAL SERVICES, INC.

as Administrative Agent

 

 

 

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TABLE OF CONTENTS

 

ARTICLE I Definitions

     1   

SECTION 1.01 Defined Terms

     1   

SECTION 1.02 Terms Generally

     13   

SECTION 1.03 Accounting Terms; GAAP;

     14   

SECTION 1.04 Status of Obligations

     14   

ARTICLE II The Loans

     15   

SECTION 2.01 Loans

     15   

SECTION 2.02 Repayment of Loans; Evidence of Debt; Collateral

     15   

SECTION 2.03 Prepayment of Loans

     16   

SECTION 2.04 Fees

     16   

SECTION 2.05 Interest

     16   

SECTION 2.06 Increased Costs

     17   

SECTION 2.07 Taxes

     18   

SECTION 2.08 Payments Generally; Pro Rata Treatment; Sharing of Set-offs

     20   

ARTICLE III Representations and Warranties

     21   

SECTION 3.01 Organization; Powers

     21   

SECTION 3.02 Authorization; Enforceability

     21   

SECTION 3.03 Governmental Approvals; No Conflicts

     21   

SECTION 3.04 Financial Condition

     22   

SECTION 3.05 Properties

     22   

SECTION 3.06 Litigation

     22   

SECTION 3.07 Compliance with Laws and Agreements

     22   

SECTION 3.08 Investment Company Status

     22   

SECTION 3.09 Taxes

     22   

SECTION 3.10 ERISA

     22   

SECTION 3.11 Disclosure

     23   

SECTION 3.12 Federal Regulations

     23   

SECTION 3.13 General Insurance

     23   

SECTION 3.14 Seniority

     23   

SECTION 3.15 Corporate Structure; Subsidiaries

     23   

SECTION 3.16 Embargoed Persons

     24   

SECTION 3.17 PATRIOT Act

     24   

SECTION 3.18 Rights in Pledged Equity; Priority of Liens

     24   

 

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TABLE OF CONTENTS

(continued)

 

ARTICLE IV Conditions

     25   

SECTION 4.01 Restatement Effective Date

     25   

ARTICLE V Affirmative Covenants

     25   

SECTION 5.01 Financial Statements; Ratings Change and Other Information

     25   

SECTION 5.02 Notices of Material Events

     27   

SECTION 5.03 Existence; Conduct of Business

     27   

SECTION 5.04 Books and Records; Inspection Rights

     27   

SECTION 5.05 Compliance with Laws

     28   

SECTION 5.06 Further Assurances

     28   

SECTION 5.07 Covenant to Give Security

     28   

ARTICLE VI Financial Covenant

     28   

SECTION 6.01 Financial Covenant

     28   

ARTICLE VII Events of Default

     29   

SECTION 7.01 Events of Default

     29   

ARTICLE VIII The Administrative Agent

     31   

SECTION 8.01 Appointment and Authority

     31   

SECTION 8.02 Rights as a Lender

     31   

SECTION 8.03 Exculpatory Provisions

     31   

SECTION 8.04 Reliance by Administrative Agent

     32   

SECTION 8.05 Delegation of Duties

     32   

SECTION 8.06 Resignation of Administrative Agent

     32   

SECTION 8.07 Non-Reliance as Administrative Agent

     32   

SECTION 8.08 No Partnership or Joint Venture

     33   

SECTION 8.09 Collateral Matters

     33   

ARTICLE IX Miscellaneous

     34   

SECTION 9.01 Notices

     34   

SECTION 9.02 Waivers; Amendments

     34   

SECTION 9.03 Expenses; Indemnity; Damage Waiver

     35   

SECTION 9.04 Successors and Assigns

     36   

SECTION 9.05 Survival

     37   

SECTION 9.06 Counterparts; Integration; Effectiveness

     37   

SECTION 9.07 Severability

     37   

SECTION 9.08 Right of Setoff

     38   

SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process

     38   

SECTION 9.10 WAIVER OF JURY TRIAL

     38   

 

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TABLE OF CONTENTS

(continued)

 

SECTION 9.11 Headings

     39   

SECTION 9.12 Confidentiality

     39   

SECTION 9.13 USA PATRIOT Act

     39   

SECTION 9.14 Interest Rate Limitation

     39   

SECTION 9.15 No Advisory or Fiduciary Responsibility

     39   

SECTION 9.16 Appointment for Perfection

     40   

 

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TABLE OF CONTENTS

(continued)

 

SCHEDULES:

 

Schedule A

 

–     Material Subsidiaries

Schedule B

 

–     Disclosure Schedule to Article III

Schedule 2.01

 

–     Commitments

Schedule 3.03(c)

 

–     Conflicting Agreements

Schedule 3.15

 

–     Subsidiaries

 

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AMENDED AND RESTATED CREDIT AGREEMENT

AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) dated as of
September 20, 2016, by and among ACP RE HOLDINGS, LLC, a Delaware limited
liability company (“Holdings” or the “Borrower”), MICHAEL KARFUNKEL FAMILY 2005
TRUST, a trust formed under the laws of the State of New York pursuant to an
Agreement dated March 28, 2005 (the “Trust Agreement”), and any Family Trust
into which the property of the trust may pass pursuant to the Trust Agreement
(“Karfunkel Trust”), the LENDERS from time to time party hereto, and AMTRUST
FINANCIAL SERVICES, INC., a Delaware corporation, as Administrative Agent.

RECITALS

WHEREAS, the Borrower, Tower Group International, Ltd., a Bermuda insurance
holding company (“Tower”), ACP Re Ltd., a Bermuda exempted company (“ACP”), the
Administrative Agent and the Lenders party thereto have previously entered into
the Credit Agreement, dated as of September 15, 2014, as amended, supplemented
or otherwise modified from time to time (the “Prior Credit Agreement”)

WHEREAS, a continuance of the extension of credit under this Agreement
(originally made pursuant to the Prior Credit Agreement) is being proposed in
connection with the conservation plan (the “Conservation Plan”) to be presented
for approval to the Superior Court of the State of California (the “Court”) by
the Insurance Commissioner for the State of California, as conservator (the
“Conservator”) of CastlePoint National Insurance Company (“CNIC”), for the
orderly run-off of the liabilities of CNIC as successor by merger to all of the
U.S. insurance company subsidiaries of Tower, as set forth in a Conservation
Agreement to be entered into by and among the Conservator, the Karfunkel Trust
and the other parties thereto;

WHEREAS, subject to the approval by the Court of the Conservation Plan, (i) the
Karfunkel Trust and members of the family of Michael Karfunkel will contribute,
or cause to be contributed, $200,000,000 to CNIC in accordance with the
Conservation Plan and (ii) the Stop Loss Reinsurance Contract and the
Retrocession Agreement will be commuted and AmTrust and National General will
cease to have any liability thereunder; and

NOW, THEREFORE, 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:

“Administrative Agent” means AmTrust, in its capacity as administrative agent
for the Lenders hereunder, and any successor Administrative Agent appointed
pursuant hereto.

“Affected Foreign Subsidiary” means any Foreign Subsidiary to the extent a
pledge of the Equity Interests of such Foreign Subsidiary would cause a Deemed
Dividend Problem.

 

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“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.

“Aggregate Commitment” means Two Hundred Fifty Million Dollars ($250,000,000),
which is the aggregate of the Commitments of all of the Lenders.

“AmTrust” means AmTrust Financial Services, Inc., a Delaware corporation.

“Applicable Percentage” means, with respect to any Lender, the percentage of the
Aggregate Commitment represented by such Lender’s Commitment.

“Applicable Pledge Percentage” means 100%, but 65% in the case of a pledge by
the Borrower or any Domestic Subsidiary of its Equity Interests in an Affected
Foreign Subsidiary.

“Bankruptcy Event” means, with respect to any Person, such Person becomes the
subject of a 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,
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, provided, further, that
such ownership interest does not result in or provide 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 permit such Person (or such
Governmental Authority or instrumentality) to reject, repudiate, disavow or
disaffirm any contracts or agreements made by such Person.

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

“Board of Directors” means, with respect to any Person, (a) in the case of any
corporation, the board of directors of such Person, (b) in the case of any
limited liability company, the board of managers of such Person, (c) in the case
of any partnership, the Board of Directors of the general partner of such Person
and (d) in any other case, the functional equivalent of the foregoing.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed.

“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP (excluding all obligations under
operating leases required by the Financial Accounting Standards Board to be
classified or accounted for as capital leases), and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.

 

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“Change in Control” shall be deemed to have occurred if:

(a) one or more of the Permitted Holders (collectively) cease to own and
control, or to have the power to vote or direct the voting of, Voting Stock of
Holdings representing more than 35% of the voting power of the total outstanding
Voting Stock of Holdings;

(b) one or more of the Permitted Holders (collectively) cease to own and control
Equity Interests representing more than 35% of the total economic interests of
the Equity Interests of Holdings; or

(c) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act), other than one or more Permitted Holders, is or becomes
the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, except that for purposes of this clause such person or group shall be
deemed to have “beneficial ownership” of all securities that such person or
group has the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of Voting Stock of
Holdings representing more than 50% of the voting power of the total outstanding
Voting Stock of Holdings.

“Change in Law” means, as and to the extent applicable to any Lender, the
occurrence, after the date of this Agreement (or with respect to any Lender, if
later, the date on which such Lender becomes a Lender), of any of the following:
(a) the adoption 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 or application thereof by any Governmental Authority; or (c) the
making or issuance of any request, rules, guideline, requirement or directive
(whether or not having the force of law) by any Governmental Authority; provided
however, that notwithstanding anything herein to the contrary, (i) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines, requirements and directives thereunder, issued in connection
therewith or in implementation thereof, and (ii) all requests, rules,
guidelines, requirements and 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.

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

“Collateral” means all Property and interests in Property and proceeds thereof
now owned or hereafter acquired by the Borrower, any of its Subsidiaries and any
other Person who has granted a Lien to the Administrative Agent for the benefit
of the Lenders, in or upon which a Lien is granted, purported to be granted, or
now or hereafter exists in favor of any Lender or the Administrative Agent for
the benefit of the Administrative Agent and the Lenders, whether under this
Agreement, the Security Documents or under any other documents executed by any
such Persons and delivered to the Administrative Agent.

“Commercial Lines Master Agreement” means the Amended and Restated Commercial
Lines Master Agreement between ACP and AmTrust dated as of July 23, 2014, as
amended, restated, supplemented or otherwise modified from time to time.

“Commitment” means, with respect to each Lender, the amount set forth on
Schedule 2.01.

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

 

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“Contingent Earn-Out Payments” means, collectively, the aggregate earn-out
consideration, if any, that becomes due and owing from either Lender (or
Affiliate thereof) to the Borrower at any time after the Effective Date under
and pursuant to the Commercial Lines Master Agreement, the Personal Lines Master
Agreement, and/or related bills of sale, agreements, documents and instruments.

“Contract Rate” means a fixed annual rate of interest of three and seven tenths
percent (3.7%); provided that, upon the Administrative Agent’s receipt of a PIK
Election Notice, the Borrower shall be permitted to pay up to one and two tenths
percent (1.2%) (the “PIK Interest Rate”) of the Contract Rate as interest
in-kind, with such PIK Amount capitalized and added to the aggregate principal
amount of Loans then outstanding.

“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.

“Controlled Affiliate” has the meaning assigned to such term in Section 3.17.

“Controlled Entities” means, with respect to any Family Trust, the corporations,
limited liability companies, trusts, partnerships or other similar entities that
are assets of such Family Trust and are controlled by such Family Trust.

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

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief laws of the United States, any state thereof or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.

“Deemed Dividend Problem” means, with respect to any Foreign Subsidiary, such
Foreign Subsidiary’s accumulated and undistributed earnings and profits being
deemed to be repatriated to the Borrower or the applicable parent Domestic
Subsidiary under Section 956 of the Code and the effect of such repatriation
causing materially adverse tax consequences to the Borrower or such parent
Domestic Subsidiary, in each case as determined by the Borrower in its
commercially reasonable judgment acting in good faith and in consultation with
its legal and tax advisors.

“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.

“Default Rate” means the Total Rate plus one percent (1%).

“Disposition” means a sale, lease or sub-lease (as lessor or sublessor), sale
and leaseback, assignment, conveyance, transfer or other disposition to any
Person, in one transaction or a series of transactions, of all or any part of
the Borrower’s or any of its Subsidiaries’ businesses, assets or properties of
any kind, whether real, personal, or mixed and whether tangible or intangible,
whether now owned or hereafter acquired, including, without limitation, notes
and accounts receivable and the Equity Interests of the Borrower’s Subsidiaries.

“Disqualified Stock” means any Equity Interests which, by its terms (or by the
terms of any security or other Equity Interests into which it is convertible or
for which it is exchangeable), or upon

 

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the happening of any event or condition, (a) matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
date that is ninety-one (91) days following the final maturity date of the Loans
(excluding any provisions requiring redemption upon a “change of control” or
similar event; provided that such “change of control” or similar event results
in the prior payment in full in cash of the Obligations (other than contingent
indemnification obligations to the extent no claim giving rise thereto has been
asserted), the termination of all commitments to lend hereunder and the
termination of this Agreement), (b) is convertible into or exchangeable for
(i) debt securities or (ii) any Equity Interests referred to in (a) above, in
each case, at any time on or prior to the date that is ninety-one (91) days
following the final maturity date of the Loans, or (c) is entitled to receive
scheduled dividends or distributions (excluding tax distributions) in cash prior
to the time that the Obligations (other than contingent indemnification
obligations to the extent no claim giving rise thereto has been asserted) are
paid in full in cash.

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

“Domestic Subsidiary” means any Subsidiary of the Borrower other than a Foreign
Subsidiary.

“Effective Date” means September 15, 2014, the date on which the conditions
specified in Section 4.01 of the Prior Credit Agreement were satisfied (or
waived).

“Embargoed Person” has the meaning assigned to such term in Section 3.16.

“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 the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to 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 or limited liability 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.

“Equity Issuance Proceeds” means any cash received by the Borrower after the
Effective Date from any contributions made to the Equity Interests of the
Borrower.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“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, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

 

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“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 existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) 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 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 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 of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

“Event of Default” has the meaning assigned to such term in Article VII.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Taxes” means, with respect to any payment made by the Borrower under
any Loan Document, any of the following Taxes imposed on or with respect to a
Recipient: (a) income or franchise Taxes imposed on (or measured by) net income,
in each case, (i) imposed by the United States of America or any state or
political subdivision thereof, or by the jurisdiction under the laws of which
such Recipient is organized or in which its principal office is located or, in
the case of any Lender, in which its applicable lending office is located or
(ii) that are Other Connection Taxes; (b) any branch profits Taxes imposed by
the United States of America or any similar Taxes imposed by any other
jurisdiction in which the Borrower is located; (c) in the case of a Non-U.S.
Lender, any U.S. Federal withholding Taxes resulting from any law in effect on
the date such Non-U.S. Lender becomes a party to this Agreement (or designates a
new lending office) or is attributable to such Non U.S. Lender’s failure to
comply with Section 2.07(f), except to the extent that such Non-U.S. Lender (or
its assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrower with
respect to such withholding Taxes pursuant to Section 2.07(a); and (d) any
U.S. Federal withholding Taxes imposed under FATCA.

“Executive Order” has the meaning assigned to such term in Section 3.16.

“Extraordinary Receipts” means any tax refunds, pension plan reversions,
insurance proceeds, indemnity payments, purchase price adjustments (excluding
working capital adjustments) under acquisition agreements, litigation proceeds
and other similar receipts) received by the Borrower after the Effective Date.

“Family Member” means, with respect to any individual, any other individual
having a relationship by blood (to the second degree of consanguinity),
marriage, or adoption to such individual.

“Family Trusts” means, with respect to any individual, trusts or other estate
planning vehicles established for the benefit of such individual or Family
Members of such individual and in respect of which such individual or a Family
Member of such individual serves as trustee or in a similar capacity and has
sole control.

 

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“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) and any current or future
regulations or official interpretations thereof.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

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

“Financial Covenant” means, the financial covenant set forth in Section 6.01.

“Financials” means the annual or quarterly financial statements, and
accompanying certificates and other documents, of the Borrower and its
Subsidiaries required to be delivered pursuant to Section 5.01(a) or 5.01(b).

“Foreign Assets Control Regulations” has the meaning assigned to such term in
Section 3.16.

“Foreign Subsidiary” means any Subsidiary of the Borrower which is organized
under the laws of any jurisdiction outside of the United States.

“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 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 or performance 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 (i) endorsements for collection or
deposit in the ordinary course of business or (ii) Insurance Products. The
amount of any Guarantee shall be deemed to be an amount equal to the

 

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stated or determinable amount of the related primary obligation, or portion
thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith. The term “Guarantee” as a
verb has a corresponding meaning.

“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 any Person means, without duplication: (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind; (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments; (c) all obligations of such Person upon which interest
charges are customarily paid or accrued; (d) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person; (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business on normal trade terms and
not overdue by more than 90 days); (f) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, but
limited to the fair market value of such property; (g) all Capital Lease
Obligations and synthetic lease obligations of such Person; (h) all Swap
Obligations of such Person; (i) all obligations, contingent or otherwise, of
such Person for the reimbursement of any obligor in respect of letters of
credit, letters of guaranty, bankers’ acceptances and similar credit
transactions; (j) the redemption price of all redeemable preferred stock of such
Person (but not accrued dividends on any preferred stock), but only to the
extent that such stock is redeemable at the option of the holder or requires
sinking fund or similar payments at any time prior to the Maturity Date; and
(k) all Guarantees by such Person in respect of Indebtedness or obligations of
others of the kinds referred to in clauses (a) through (j) above; provided, that
the term Indebtedness shall not include any amounts arising under, or owed with
respect to, Insurance Products. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person’s ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by the Borrower under any Loan Document and
(b) Other Taxes.

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

“Interest Payment Date” means (a) the last Business Day of January and July of
each calendar year and (b) the Maturity Date.

“IRS” means the United States Internal Revenue Service.

“Lenders” and “Lender” means, collectively or individually (as appropriate), the
Persons listed on Schedule 2.01, or any of such Persons, and any other Person
that shall have become a Lender hereunder following the Restatement Effective
Date.

“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

 

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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.

“Liquid Assets” means cash, cash equivalents, treasuries, debt or equity
securities that are listed on any stock exchange or traded on any
over-the-counter market or any other marketable securities reasonably acceptable
to the Lenders.

“Loan Documents” means this Agreement, the Security Documents, any promissory
notes issued pursuant to Section 2.02(e) and all other agreements, instruments,
documents and certificates identified in Section 4.01 executed and delivered to,
or in favor of, the Administrative Agent or any Lenders and including all other
pledges, powers of attorney, consents, assignments, contracts, notices, letter
of credit agreements and all other written matter whether heretofore, now or
hereafter executed by or on behalf of the Borrower , or any employee of the
Borrower, and delivered to the Administrative Agent or any Lender in connection
with this Agreement or the Transactions. Any reference in this Agreement or any
other Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to this Agreement or such Loan Document
as the same may be in effect at any and all times such reference becomes
operative.

“Loan” or “Loans” means, in respect of any Lender, the term loan, in an amount
equal to such Lender’s Commitment, which was originally made by such Lender to
the Borrower (as defined in the Prior Credit Agreement) pursuant to the Prior
Credit Agreement, and any increase in the principal amount thereof by the PIK
Amount pursuant to a PIK Election hereunder.

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

“Maturity Date” means the twentieth (20th) anniversary of the Restatement
Effective Date.

“Material Subsidiary” means, at any date of determination, (i) each Subsidiary
set forth on Schedule A hereto or (ii) each other Subsidiary of the Borrower,
unless otherwise agreed to in writing by the Required Lenders.

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

“National General” means National General Holdings Corp., a Delaware
corporation.

“Obligations” means (a) all obligations of the Borrower from time to time
arising under or in respect of the due and punctual payment of (i) the principal
of and premium, if any, and interest (including interest accruing during the
pendency of any proceeding under any Debtor Relief Laws, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, and (ii) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any

 

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proceeding under any Debtor Relief Laws, regardless of whether allowed or
allowable in such proceeding), of the Borrower under this Agreement and the
other Loan Documents and (b) the due and punctual performance of all covenants,
agreements, obligations and liabilities of the Borrower under or pursuant to
this Agreement and the other Loan Documents.

“OFAC” means Office of Foreign Assets Control of the United States Department of
the Treasury.

“Organizational Documents” means, with respect to any Person, (a) in the case of
any corporation, the certificate of incorporation and by-laws (or similar
documents) of such Person, (b) in the case of any limited liability company, the
certificate of formation and operating agreement (or similar documents) of such
Person, (c) in the case of any limited partnership, the certificate of formation
and limited partnership agreement (or similar documents) of such Person, (d) in
the case of any general partnership, the partnership agreement (or similar
document) of such Person and (e) in any other case, the functional equivalent of
the foregoing.

“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 Taxes (other than a connection arising from such
Recipient having executed, delivered, enforced, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, or engaged in any other transaction pursuant to, or enforced,
any Loan Document, or sold or assigned an interest in any Loan Document).

“Other Taxes” means any present or future stamp, court, documentary, intangible,
recording, filing or similar excise or property Taxes that arise from any
payment made under, from the execution, delivery, performance, enforcement or
registration of, or from the registration, 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.

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

“Permitted Holders” means, collectively, (a) the Karfunkel Trust or (b) Leah
Karfunkel, and her Permitted Related Persons.

“Permitted Related Persons” means, with respect to any individual, (a) the
Family Members of such individual, (b) the Family Trusts of such individual and
the Controlled Entities of such Family Trusts and (c) the Controlled Charitable
Foundations of such individual.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Personal Lines Master Agreement” means the Amended and Restated Personal Lines
Master Agreement between ACP and National General, dated as of July 23, 2014, as
amended, restated, supplemented or otherwise modified from time to time.

“PIK Amount” means as of any date of determination the aggregate amount of all
interest accrued that has been paid-in-kind with respect to the Loans by being
added to the balance thereof.

“PIK Election Notice” means written notice to the Administrative Agent,
notifying the Administrative Agent of the Borrower’s election to pay interest
in-kind (such election, a “PIK Election”)

 

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at the PIK Interest Rate on the next Interest Payment Date; provided such notice
shall be received by the Administrative Agent no less than two (2) Business Days
prior to the Interest Payment Date for which such election is to apply.

“PIK Interest Rate” means up to a fixed annual rate of interest of one and two
tenths percent (1.2%).

“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.

“Pledged Equity” means all pledged Equity Interests in or upon which a security
interest or Lien is from time to time granted to the Administrative Agent, for
the benefit of the Secured Parties, under the Security Agreement.

“Prohibited Person” means any Person (a) listed in the Annex to the Executive
Order or identified pursuant to Section 1 of the Executive Order; (b) that is
owned or controlled by, or acting for or on behalf of, any Person listed in the
Annex to the Executive Order or identified pursuant to the provisions of
Section 1 of the Executive Order; (c) with whom a Lender is prohibited from
dealing or otherwise engaging in any transaction by any terrorism or
anti-laundering law, including the Executive Order; (d) who commits, threatens,
conspires to commit, or support “terrorism” as defined in the Executive Order;
(e) who is named as a “Specially designated national or blocked person” on the
most current list published by the OFAC at its official website, at
http://www.treas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf or any replacement
website or other replacement official publication of such list; or (f) who is
owned or controlled by a Person listed above in clause (c) or (e).

“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, and whether tangible or intangible, including, without
limitation, any Equity Interests and debt instruments.

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

“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.

“Required Lenders” means, at any time, one or more Lenders having an aggregate
Applicable Percentage of more than 50%.

“Requirements of Law” means, collectively, any and all requirements of any
Governmental Authority including any and all laws, judgments, orders, decrees,
ordinances, rules, regulations, statutes or case law.

“Responsible Officer” of any Person means any executive officer or Financial
Officer of such person and any other officer or similar official thereof with
responsibility for the administration of the obligations of such Person in
respect of this Agreement.

 

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“Restatement Effective Date” means the date on which the conditions specified in
that certain Restatement Agreement by and among the parties hereto of even date
herewith are satisfied or waived.

“Retrocession Agreement” means that certain Aggregate Stop-Loss Retrocession
Agreement, by and between AmTrust (or Affiliate thereof), National General (or
Affiliate thereof) and ACP, entered into in connection with the Merger, as
amended, restated, supplemented or otherwise modified from time to time.

“Security Agreement” means the Pledge and Security Agreement, in form and
substance reasonably satisfactory to the Administrative Agent and the Lenders,
executed and delivered by the Borrower, pursuant to which the Administrative
Agent has been granted a security interest in the Collateral covered thereby as
security for the Obligations for the benefit of the Secured Parties including,
without limitation, a pledge and security interest in the Equity Interests
required to be granted to the Administrative Agent in accordance with the
provisions of this Agreement, as amended, restated, supplemented or otherwise
modified from time to time.

“Security Documents” means, collectively, the Security Agreement, each Deposit
Account Control Agreement (as defined in the Security Agreement) and all other
security agreements, pledge agreements, patent and trademark security
agreements, guarantees or similar agreements by the Borrower and any of its
Subsidiaries or any other Person pledging or granting a Lien on Collateral or
guaranteeing the prompt payment and performance of the Obligations, and any
Lender or the Administrative Agent for the benefit of the Administrative Agent,
the Lenders and other Secured Parties now or hereafter delivered to the Lenders
or the Administrative Agent pursuant to or in connection with the Transactions,
as any of the foregoing may be amended, restated and/or modified from time to
time.

“Secured Parties” means the holders of the Obligations from time to time and
shall include (a) each Lender in respect of its Loans, (b) the Administrative
Agent and the Lenders in respect of all other present and future obligations and
liabilities of the Borrower and each Subsidiary of every type and description
arising under or in connection with this Agreement or any other Loan Document,
(c) each indemnified party under Section 9.03 in respect of the obligations and
liabilities of the Borrower to such Person hereunder and under the other Loan
Documents, and (d) their respective successors and (in the case of a Lender,
permitted) transferees and assigns.

“Stop Loss Reinsurance Contract” means the Aggregate Stop Loss Reinsurance
Contract, dated as of September 15, 2014, among CastlePoint Re, AmTrust
International and National General Re.

“Subordinated Indebtedness” means any Indebtedness of the Borrower or any
Subsidiary the payment of which is subordinated to payment of the obligations
under the Loan Documents.

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

 

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“Subsidiary” means any subsidiary of the Borrower.

“Swap Agreement” means any transaction (including an agreement with respect
thereto) that is a rate swap, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option, derivative transaction or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures.

“Swap Obligations” means obligations under or with respect to Swap Agreements.

“Taxes” means any present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

“Total Rate” means the Contract Rate inclusive of the PIK Interest Rate (if
applicable).

“Threshold Amount” means $5,000,000.

“Trading with the Enemy Act” has the meaning assigned to such term in
Section 3.16.

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

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.

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

“Voting Stock” means, with respect to any Person, any class or classes of Equity
Interests pursuant to which the holders thereof have the general voting power
under ordinary circumstances to elect at least a majority of the Board of
Directors of such Person.

“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.

“Withholding Agent” means the Borrower and the Administrative Agent.

SECTION 1.02 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”. The
word “law” shall be construed as referring to all statutes, rules, regulations,
codes and other laws (including official rulings and interpretations thereunder
having the force of law or with which affected Persons customarily comply),

 

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and all judgments, orders and decrees, of all Governmental Authorities. 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,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, restatements, supplements or modifications set forth herein),
(b) any definition of or reference to any statute, rule or regulation shall be
construed as referring thereto as from time to time amended, supplemented or
otherwise modified (including by succession of comparable successor laws),
(c) any reference herein to any Person shall be construed to include such
Person’s successors and assigns (subject to any restrictions on assignment set
forth herein) and, in the case of any Governmental Authority, any other
Governmental Authority that shall have succeeded to any or all functions
thereof, (d) 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, (e) 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 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.

SECTION 1.03 Accounting Terms; GAAP;. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as the case may be, as in effect from time to time;
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 (i) without
giving effect to any election under Accounting Standards Codification 825-10-25
(or any other Accounting Standards Codification or 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) without giving effect to 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.

SECTION 1.04 Status of Obligations. In the event that the Borrower shall at any
time issue or have outstanding any Subordinated Indebtedness, the Borrower shall
take all such actions as shall be necessary to cause the Obligations to
constitute senior indebtedness (however denominated) in respect of such
Subordinated Indebtedness and to enable the Administrative Agent and the Lenders
to have and exercise any payment blockage or other remedies available or
potentially available to holders of senior indebtedness under the terms of such
Subordinated Indebtedness. Without limiting the foregoing, the Obligations are
hereby designated as “senior indebtedness” and as “designated senior
indebtedness” and words of similar import under and in respect of any indenture
or other agreement or instrument under which such Subordinated Indebtedness is
outstanding and are further given all such other designations as shall be
required under the terms of any such Subordinated Indebtedness in order that the
Lenders may have and exercise any payment blockage or other remedies available
or potentially available to holders of senior indebtedness under the terms of
such Subordinated Indebtedness.

 

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ARTICLE II

The Loans

SECTION 2.01 Loans. Subject to the terms and conditions set forth herein, on the
Restatement Effective Date, each Lender, severally, agrees to permit the
continuance of extension of credit by it to the Borrower in respect of the
amount equal to such Lender’s Applicable Percent of the Aggregate Commitment.

SECTION 2.02 Repayment of Loans; Evidence of Debt; Collateral.

(a) Commencing on the tenth (10th) anniversary of the Restatement Effective
Date, and on each subsequent anniversary date thereafter, 2.0% of the then
outstanding aggregate principal amount of the Loans (inclusive of any PIK
Amounts as a result of the Borrower’s election to pay a portion of the Contract
Rate at the PIK Interest Rate) shall be due and payable. To the extent not
previously paid, the Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of the applicable Loan, plus all accrued and unpaid interest thereon
(inclusive of any PIK Amounts as a result of the Borrower’s election to pay a
portion of the Contract Rate at the PIK Interest Rate), on the Maturity Date.
All amounts due and payable hereunder shall be paid in cash; provided, that if
requested by Borrower, each Lender shall have the right to accept from Borrower
for the repayment of the Loans and unpaid interest thereon due and owing to such
Lender, in lieu of cash, equity of any company listed on the New York Stock
Exchange, the NASDAQ Stock Market or the London Stock Exchange, provided
(i) such equity is publicly traded and (ii) the aggregate amount of such equity
is equal in value, as of the date such securities are transferred to such
Lender, to the aggregate principal amount of Loans and unpaid interest thereon
to be repaid to such Lender.

(b) 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 the Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.

(c) The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, (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,
all in accordance with the terms of this Agreement.

(d) The entries made in the accounts maintained pursuant to paragraphs (b) or
(c) of this Section 2.02 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.

(e) Any Lender may request that the Loan 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 the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns) and in a form
approved by the Administrative Agent.

(f) The Loans shall be secured at all times by the Collateral, pursuant to and
in accordance with the terms and conditions of the applicable Security
Documents.

 

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SECTION 2.03 Prepayment of Loans.

Optional Prepayments. The Borrower shall have the right at any time and from
time to time to prepay the Loans in whole or in part, subject to prior notice in
accordance with the provisions of this Section 2.03. The Borrower shall notify
the Administrative Agent by telephone (confirmed by telecopy) of any prepayment
hereunder not later than 11:00 a.m., New York City time, one (1) Business Day
before the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date and the amount of the Loans to be prepaid. Promptly
following receipt of any such notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each prepayment of the Loans shall be applied
ratably to each Lender’s Loans based on the Applicable Percentage of each Lender
then in effect. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.05.

SECTION 2.04 Fees.

(a) The Borrower agrees to pay to the Administrative Agent, for its own account,
an annual fee equal to $30,000, plus reimbursement of all fees, costs, expenses
and other charges required pursuant to Section 9.03(a).

(b) All fees payable under Section 2.04(a) shall be paid on the dates due, in
Dollars and immediately available funds, to the Administrative Agent. Fees paid
shall not be refundable under any circumstances.

SECTION 2.05 Interest.

(a) The Loans shall bear interest at the Total Rate.

(b) Notwithstanding the foregoing, if any principal of or interest on any Loan
or any fee or other amount payable by the Borrower hereunder is not paid when
due, whether at stated maturity, upon acceleration or otherwise, such overdue
amount shall bear interest, after as well as before judgment, at a rate per
annum equal to the Default Rate.

(c) Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date and upon acceleration of such Loan following the occurrence of an
Event of Default; provided, that (i) interest accrued pursuant to paragraph (b)
of this Section 2.05 shall be payable on demand and (ii) in the event of any
repayment or prepayment of any Loan (for any reason, including acceleration of
the Loan following the occurrence of an Event of Default), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment.

(d) All interest hereunder shall accrue on a semi-annual basis and shall be
computed using a 30/360 day count convention. For the avoidance of doubt, each
accrual period shall be the six-month period preceding the applicable Interest
Payment Date.

(e) Each Lender shall have the right, whether or not a Default or Event of
Default has occurred or is continuing, to set off against Contingent Earn-Out
Payments due and owing by it, and any other amounts at any time and from time to
time due and owing by such Lender to the Borrower pursuant to the Commercial
Lines Master Agreement or the Personal Lines Master Agreement, as applicable,
any interest that is due and owing from the Borrower to such Lender pursuant
hereto, and any interest satisfied pursuant to the Lender’s set-off rights
contained herein shall constitute a proper method for the payment of interest
hereunder.

 

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SECTION 2.06 Increased Costs. (a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender;

(ii) impose on any Lender any other condition, cost or expense affecting this
Agreement or Loans made by such Lender; or

(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 of making 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 hereunder, whether of principal, interest or otherwise, then the
Borrower will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered
as reasonably determined by such Lender (which determination shall be made in
good faith (and not on an arbitrary or capricious basis) after consideration of
such factors as such Lender then reasonably determines to be relevant).

(b) 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 Loan 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 as reasonably
determined by such Lender (which determination shall be made in good faith (and
not on an arbitrary or capricious basis) after consideration of such factors as
such Lender then reasonably determines to be relevant).

(c) 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 2.06 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 ten (10) days
after receipt thereof.

(d) Failure or delay on the part of any Lender to demand compensation pursuant
to this Section 2.06 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 2.06 for any increased costs or
reductions incurred more than 270 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 270-day period referred to above shall be
extended to include the period of retroactive effect thereof.

 

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SECTION 2.07 Taxes.

(a) Withholding of Taxes; Gross-Up. Each payment by the Borrower under any Loan
Document shall be made without withholding for any Taxes, unless such
withholding is required by any law. If any Withholding Agent determines, in its
sole discretion exercised in good faith, that it is so required to withhold
Taxes, then such Withholding Agent may so withhold and shall timely pay the full
amount of withheld Taxes to the relevant Governmental Authority in accordance
with applicable law. If such Taxes are Indemnified Taxes, then the amount
payable by the Borrower shall be increased as necessary so that, net of such
withholding (including such withholding applicable to additional amounts payable
under this Section 2.07), the applicable Recipient receives the amount it would
have received had no such withholding been made.

(b) Payment of Other Taxes by the Borrower. The Borrower shall timely pay any
Other Taxes to the relevant Governmental Authority in accordance with applicable
law.

(c) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes by the Borrower to a Governmental Authority, 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.

(d) Indemnification by the Borrower. The Borrower shall indemnify each Recipient
for any Indemnified Taxes that are paid or payable by such Recipient in
connection with any Loan Document (including amounts paid or payable under this
Section 2.07(d)) 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. The indemnity under this
Section 2.07(d) shall be paid within ten (10) days after the Recipient delivers
to the Borrower a certificate stating the amount of any Indemnified Taxes so
paid or payable by such Recipient and describing the basis for the
indemnification claim. Such certificate shall be conclusive of the amount so
paid or payable absent manifest error. Such Recipient shall deliver a copy of
such certificate to the Administrative Agent.

(e) Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within ten (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)
and (ii) 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).

(f) Status of Lenders.

(i) Any Lender that is entitled to an exemption from, or reduction of, any
applicable withholding Tax with respect to any payments 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

 

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reasonably requested by the Borrower or the Administrative Agent as will permit
such payments to be made without, or at a reduced rate of, withholding. In
addition, any Lender, if requested by the Borrower or the Administrative Agent,
shall deliver such other documentation prescribed by 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 any
withholding (including 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 2.07(f)(ii)(A) and (B) below) shall
not be required if in the Lender’s judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense (or, in the case of a Change in Law, any incremental material
unreimbursed cost or expense) or would materially prejudice the legal or
commercial position of such Lender. Upon the reasonable request of the Borrower
or the Administrative Agent, any Lender shall update any form or certification
previously delivered pursuant to this Section 2.07(f). If any form or
certification previously delivered pursuant to this Section expires or becomes
obsolete or inaccurate in any respect with respect to a Lender, such Lender
shall promptly (and in any event within ten (10) days after such expiration,
obsolescence or inaccuracy) notify the Borrower and the Administrative Agent in
writing of such expiration, obsolescence or inaccuracy and update the form or
certification if it is legally eligible to do so.

(ii) Without limiting the generality of the foregoing, if the Borrower is a
U.S. Person, any Lender with respect to the Borrower shall, if it is legally
eligible to do so, deliver to the Borrower and the Administrative Agent (in such
number of copies reasonably requested by the Borrower and the Administrative
Agent) on or prior to the date on which such Lender becomes a party hereto, duly
completed and executed copies of whichever of the following is applicable:

(A) in the case of a Lender that is a U.S. Person, IRS Form W-9 certifying that
such Lender is exempt from U.S. Federal backup withholding tax; or

(B) any other form prescribed by law as a basis for claiming exemption from, or
a reduction of, U.S. Federal withholding Tax together with such supplementary
documentation necessary to enable the Borrower or the Administrative Agent to
determine the amount of Tax (if any) required by law to be withheld.

(iii) 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 Withholding Agent, at the time or times prescribed by law
and at such time or times reasonably requested by the Withholding 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 Withholding Agent as may be necessary for the
Withholding Agent to comply with its obligations under FATCA, to determine that
such Lender has or has not 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 Section 2.07(f)(iii), “FATCA” shall include any amendments made
to FATCA after the date of this Agreement.

(g) 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 2.07 (including
additional amounts paid pursuant to this Section 2.07), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments

 

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made under this Section with respect to the Taxes giving rise to such refund),
net of all reasonable out-of-pocket expenses (including any 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 to such indemnified party pursuant to the
previous sentence (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) in the event such indemnified party is required
to repay such refund to such Governmental Authority. Notwithstanding anything to
the contrary in this Section 2.07(g), in no event will any indemnified party be
required to pay any amount to any indemnifying party pursuant to this
Section 2.07(g) if such payment would place such indemnified party in a less
favorable position (on a net after-Tax basis) than such indemnified party would
have been in if the indemnification payments or additional amounts giving rise
to such refund had never been paid. This Section 2.07(g) shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes which it deems confidential) to the
indemnifying party or any other Person.

SECTION 2.08 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a) 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 2.05, 2.06 or 2.07, or otherwise) prior to 12:00 noon, New York City
time on the date when due, in immediately available funds, without set-off 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
59 Maiden Lane, New York, New York 10038, except that payments pursuant to
Sections 2.05, 2.06, 2.07 and 9.03 shall be made directly to the Persons
entitled thereto, pursuant to instructions provided to the Borrower by such
Person. 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.

(b) 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 Lenders entitled thereto
in accordance with the amounts of interest and fees then due to such Lenders,
and (ii) second, towards payment of principal then due hereunder, ratably among
the Lenders entitled thereto in accordance with the amounts of principal then
due to such Lenders. Notwithstanding the foregoing, any proceeds of Pledged
Equity received by the Administrative Agent (i) not constituting a specific
payment of principal, interest, fees or other sum payable under the Loan
Documents (which shall be applied as specified by the Borrower) or (ii) after an
Event of Default has occurred and is continuing and the Required Lenders so
direct the Administrative Agent, such funds shall be applied ratably first, to
pay any fees, indemnities, or expense reimbursements including amounts then due
to the Administrative Agent from the Borrower, second, to pay any fees or
expense reimbursements then due to the Lenders from the Borrower, third, to pay
interest then due and payable on the Loans ratably, and fourth, to the payment
of any other Obligation due to the Administrative Agent or any Lender by the
Borrower.

(c) At the election of the Administrative Agent, all payments of principal,
interest, fees, premiums, reimbursable expenses (including, without limitation,
all reimbursement for fees and expenses pursuant to Section 9.03), and other
sums payable under the Loan Documents, may be deducted from any deposit or
securities investment account of the Borrower maintained with the Administrative
Agent or controlled by the Administrative Agent in connection with any deposit
or securities account control agreement.

 

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(d) If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any interest on its Loan (including any
proceeds of Pledged Equity) resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loan and accrued interest
thereon than the proportion received by any other Lender and contrary to the
provisions of this Agreement, then the Lender receiving such greater proportion
shall take such action as shall be reasonably requested by the other Lender to
ensure that the benefit of all such payments are shared by the Lenders ratably
in accordance with the provisions of this Agreement. The Borrower consents to
the foregoing and agrees to take such action as shall be reasonably requested by
the Lenders in order to effectuate the provisions of this Section 2.08(d).

(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 9.03(c), then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
and for the benefit of the Administrative Agent to satisfy such Lender’s
obligations to it under such Section until all such unsatisfied obligations are
fully paid.

ARTICLE III

Representations and Warranties

The Borrower represents and warrants to the Lenders that, as of the Restatement
Effective Date, except as otherwise set forth on Disclosure Schedule B attached
hereto:

SECTION 3.01 Organization; Powers. Each of the Karfunkel Trust and the Borrower
is duly formed or organized, validly existing and in good standing under the
laws of the jurisdiction of its formation or organization, has all requisite
power and authority to carry on its business as now conducted and, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required. The Borrower is a holding company for the Equity Interests of ACP and
conducts no other material business.

SECTION 3.02 Authorization; Enforceability. The Transactions are within the
Borrower’s organizational powers and have been duly authorized by all necessary
corporate and, if required, stockholder action. This Agreement and the other
Loan Documents have been duly executed and delivered by each of the Borrower and
the Karfunkel Trust and constitute legal, valid and binding obligations of the
Borrower and the Karfunkel Trust, enforceable against them in accordance with
their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.

SECTION 3.03 Governmental Approvals; No Conflicts. The Transactions (a) do not
require, on the part of the Borrower, any consent or approval of, registration
or filing with, or any other action by, any Governmental Authority, except such
as have been obtained or made and are in full force and effect, (b) will not
violate any applicable law or regulation or the Organizational Documents of the
Borrower or any of its Subsidiaries or any order of any Governmental Authority
having applicability to the Borrower or any of its Subsidiaries, (c) other than
as set forth on Schedule 3.03(c), will not violate or result in a default under
any indenture, material agreement or other material instrument binding upon the
Borrower or any of its Subsidiaries or its assets, or give rise to a right
thereunder to require any payment to be made by the Borrower or any of its
Subsidiaries, and (d) will not result in the creation or imposition of any Lien
on any asset of the Borrower or any of its Subsidiaries, other than Liens
created under the Security Documents.

 

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SECTION 3.04 Financial Condition.

The Borrower has heretofore furnished to the Lenders its consolidated balance
sheet and statements of income, stockholders equity and cash flows (i) as of and
for the fiscal year ended December 31, 2015 and (ii) as of and for the fiscal
quarter ended March 31, 2016 (other than a statement of stockholders equity),
certified by its chief financial officer. Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower and its consolidated Subsidiaries as
of such dates and for such periods in accordance with GAAP.

SECTION 3.05 Properties. The Borrower and its Subsidiaries has good title to, or
valid leasehold interests in, all its real and personal property material to its
business, except for minor defects in title that are not reasonably expected to
have a Material Adverse Effect.

SECTION 3.06 Litigation. There are no actions, suits or proceedings by or before
any arbitrator or Governmental Authority pending against or, to the knowledge of
the Borrower, threatened against or affecting it or any of its Subsidiaries
(i) as to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, could reasonably be expected, individually or
in the aggregate, to result in a Material Adverse Effect or (ii) that question
the validity or enforceability of the Agreement or any of the other Loan
Documents, or of any action to be taken by the Borrower pursuant to this
Agreement or any of the other Loan Documents.

SECTION 3.07 Compliance with Laws and Agreements. The Borrower and its
Subsidiaries is in compliance with all Requirements of Law and orders of any
Governmental Authority, in each case, applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.

SECTION 3.08 Investment Company Status. The Borrower is not an “investment
company” as defined in, or subject to regulation under, the Investment Company
Act of 1940.

SECTION 3.09 Taxes.

The Borrower and its Subsidiaries has timely filed or caused to be filed all Tax
returns and reports required to have been filed and has paid or caused to be
paid all Taxes required to have been paid by it, except (a) Taxes that are being
contested in good faith by appropriate proceedings and for which the Borrower or
Subsidiary, as applicable, has set aside on its books adequate reserves or
(b) to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect. As of the Restatement Effective Date, there
are no tax sharing agreements or similar arrangements (including tax indemnity
arrangements) with respect to or involving the Borrower or any of its
Subsidiaries, other than tax sharing agreements between the Borrower and its
Subsidiaries.

SECTION 3.10 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. Except as, either individually or in the aggregate, has not had, and
could not reasonably be expected to have, a Material Adverse Effect, the
Borrower and its Subsidiaries

 

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and their ERISA Affiliates (i) have fulfilled their respective obligations under
the minimum funding standards of ERISA and the Code with respect to each Plan
and are in compliance with the applicable provisions of ERISA and the Code, and
(ii) have not incurred any liability to the PBGC or any Plan or Multiemployer
Plan (other than to make contributions in the ordinary course of business.

SECTION 3.11 Disclosure. The Borrower has disclosed to the Lenders all
agreements, instruments and other restrictions to which it or any of its
Subsidiaries is subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. None of the written information, reports, financial statements,
certificates or other information furnished by or on behalf of the Borrower to
the Administrative Agent or any Lender in connection with the negotiation of
this Agreement and any other Loan Document or delivered hereunder or thereunder
(as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein (taken as a whole), in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.

SECTION 3.12 Federal Regulations. The Borrower is not engaged nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of “purchasing” or “carrying” any “margin
stock” within the respective meanings of each of the quoted terms under
Regulations T, U or X of the Board as now and from time to time hereafter in
effect. No part of the proceeds of the Loans hereunder will be used for
“purchasing” or “carrying” “margin stock” as so defined or for any purpose which
violates, or which would be inconsistent with, the provisions of the Regulations
of such Board.

SECTION 3.13 General Insurance. The properties of the Borrower and each of its
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of the Borrower, in such amounts (after giving effect
to any self-insurance compatible with the following standards), with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
the Borrower or such Subsidiary operates.

SECTION 3.14 Seniority. The Obligations are, and will be, superior and senior in
right of payment to any Indebtedness of the Borrower.

SECTION 3.15 Corporate Structure; Subsidiaries.

(a) Set forth on Part A of Schedule 3.15 is a complete list of each Person
holding direct ownership interests in the Borrower, together with, for each such
Person, the percentage ownership of the Borrower represented by such ownership
interests. Set forth on Part B of Schedule 3.15 is a complete and correct list
of (i) all of the Subsidiaries of the Borrower as of the Restatement Effective
Date, together with, for each such Subsidiary, (A) the jurisdiction of
organization of such Subsidiary, (B) each Person holding direct ownership
interests in such Subsidiary and (C) percentage ownership of such Subsidiary
represented by such ownership interests. Except as set forth on Schedule 3.15,
the Borrower and its Subsidiaries owns, free and clear of Liens, other than
Liens created under the Pledge Agreements, and has the unencumbered right to
vote, all the outstanding ownership interests in each Person shown to be held by
it on Schedule 3.15. All Equity Interests of each Subsidiary of the Borrower are
duly and validly issued and are fully paid and non-assessable.

(b) As of the Restatement Effective Date, there are no restrictions on the
Borower or any of its Subsidiaries which prohibit or otherwise restrict the
transfer of cash or other assets from any

 

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Subsidiary of the Borrower, other than (i) prohibitions or restrictions existing
under or by reason of this Agreement or the other Loan Documents,
(ii) prohibitions or restrictions existing under or by reason of applicable
Requirements of Law, and (iii) other prohibitions or restrictions which, either
individually or in the aggregate, have not had, or could not reasonably be
expected to have, Material Adverse Effect.

SECTION 3.16 Embargoed Persons. (a) No assets of the Borrower constitute
property of, or are beneficially owned, directly or indirectly, by any Person
targeted by economic or trade sanctions under United States law, including but
not limited to, the International Emergency Economic Powers Act, 50 U.S.C.
§§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq. (the
“Trading With the Enemy Act”), any of the foreign assets control regulations of
the Treasury (31 C.F.R., Subtitle B, Chapter V, as amended) (the “Foreign Assets
Control Regulations”) or any enabling legislation or regulations promulgated
thereunder or executive order relating thereto (which includes, without
limitation, (i) Executive Order No. 13224, effective as of September 24, 2001,
and relating to Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)) (the “Executive Order”) and (ii) the USA PATRIOT Act), if the result of
such ownership would be that any Loan made by any Lender would be in violation
of law (“Embargoed Person”); (b) no Embargoed Person has any interest of any
nature whatsoever in the Borrower if the result of such interest would be that
any Loan would be in violation of law; (c) the Borrower has not engaged in
business with Embargoed Persons if the result of such business would be that any
Loan made by any Lender would be in violation of law; and (d) neither the
Borrower nor any Controlled Affiliate (i) is or will become a “blocked person”
as described in the Executive Order, the Trading With the Enemy Act or the
Foreign Assets Control Regulations or (ii) engages or will engage in any
dealings or transactions, or be otherwise associated, with any such “blocked
person”. For purposes of determining whether or not a representation is true
under this Section 3.16, the Borrower shall not be required to make any
investigation into (i) the ownership of publicly traded stock or other publicly
traded securities or (ii) the beneficial ownership of any collective investment
fund.

SECTION 3.17 PATRIOT Act. (a) Neither the Borrowr nor any of its Subsidiaries
or, to the knowledge of the Borrower, any of their respective Affiliates over
which any of the foregoing exercises management control (each, a “Controlled
Affiliate”) is a Prohibited Person, and the Borrower, its Subsidiaries and, to
the knowledge of the Borrower, such Controlled Affiliates are in compliance with
all applicable orders, rules and regulations of OFAC.

(b) Neither the Borrower nor any of its Subsidiaries or, to the knowledge of the
Borrower, any of their respective Controlled Affiliates: (i) is targeted by
United States or multilateral economic or trade sanctions currently in force;
(ii) is owned or controlled by, or acts on behalf of, any Person that is
targeted by United States or multilateral economic or trade sanctions currently
in force; or (iii) is named, identified or described on any list of Persons with
whom United States Persons may not conduct business, including any such blocked
persons list, designated nationals list, denied persons list, entity list,
debarred party list, unverified list, sanctions list or other such lists
published or maintained by the United States, including OFAC, the United States
Department of Commerce or the United States Department of State.

SECTION 3.18 Rights in Pledged Equity; Priority of Liens.

(a) The Borrower and each Subsidiary that is party to a Security Document is the
legal and beneficial owner of the Pledged Equity or Collateral, as the case may
be, granted by it under the Security Document to which it is a party, free and
clear of any and all Liens except for the Liens created or expressly permitted
under the Security Documents.

 

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(b) The Security Documents, once executed and delivered, will create in favor of
the Administrative Agent legal, valid and enforceable Liens on the Pledged
Equity and the Collateral, securing the payment of the Obligations, subject to
no Liens other than the Liens created by the Security Document.

(c) Upon (i) the proper filing of UCC financing statements or the filing,
recording, registering or taking such other actions as may be necessary with the
appropriate Governmental Authority (including payment of applicable filing or
recording fees or taxes), and (ii) the taking of possession or control by the
Administrative Agent of any of the Pledged Equity or the Collateral with respect
to which a security interest may be perfected only by possession or control
(which possession or control shall be given to the Administrative Agent to the
extent possession or control by the Administrative Agent is required by the
applicable Security Document, as the case may be), the Liens created pursuant to
the Security Documents in favor of the Administrative Agent shall constitute
legal, valid and enforceable perfected first priority Liens on the Pledged
Equity or the Collateral, subject to no Liens other than the Liens created by
the Security Documents.

ARTICLE IV

Conditions

SECTION 4.01 Restatement Effective Date. The obligations of the Lenders to
effectuate the amendments and modifications under this Agreement as of the
Restatement Effective Date shall not become effective until the date on which
each of the conditions set forth in that certain Restatement Agreement by and
among the parties hereto of even date herewith, as determined by the
Administrative Agreement with the written consent of both Lenders is satisfied
or waived pursuant to the terms specified therein.

ARTICLE V

Affirmative Covenants

Until 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 the Borrower will, and will cause each of its Subsidiaries to:

SECTION 5.01 Financial Statements; Ratings Change and Other Information. Furnish
to the Administrative Agent and each Lender:

(a) Annual Financial Statements. As soon as available and in any event within
180 days after the end of each fiscal year of the Borrower, its consolidated
balance sheet and related consolidated statements of operations, stockholders’
equity and cash flows as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all
accompanied by a certificate of a Financial Officer of the Borrower certifying
that such consolidated financial statements present fairly in all material
respects the financial condition and results of operations of the Borrower and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied.

(b) Quarterly Financial Statements. As soon as available and in any event within
60 days after the end of each of the first three fiscal quarters of each fiscal
year of the Borrower, its consolidated and consolidating balance sheet and
related consolidated statements of operations and cash flows as of the end of
and for such fiscal quarter and the then elapsed portion of the fiscal year,
setting

 

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forth in each case in comparative form the figures for the corresponding period
or periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, all accompanied by a certificate of a Financial Officer of
the Borrower certifying that such statements present fairly in all material
respects the financial condition and results of operations of the Borrower and
its consolidated Subsidiaries on a consolidated (and, in the case of the balance
sheet, consolidating) basis in accordance with GAAP consistently applied.

(c) Officer’s Certificate. Concurrently with any delivery of financial
statements under Sections 5.01(a) and 5.01(b), a certificate of a Financial
Officer of the Borrower (i) certifying that no Default or Event of Default has
occurred, or if any Default or Event of Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with respect
thereto, (ii) setting forth reasonably detailed calculations demonstrating
compliance with Section 6.01 (for the final fiscal quarter of any fiscal
year) as at the end of such fiscal year or quarter, as the case may be,
(iii) attaching, to the extent necessary so that the Collateral (as defined in
the Security Agreement) shall have an aggregate fair market value not less than
the amount necessary to satisfy the Maintenance Covenant Margin, updated
exhibits K, G-1 and G-2 (as applicable) to the Security Agreement, setting forth
in detail the Collateral securing the Obligations, provided, that (x) the
Collateral shall consist exclusively of Liquid Assets except and solely to the
extent the Karfunkel Trust shall have contributed other assets as described in
Section 6.01(iii) and has not otherwise replaced such assets pursuant to the
last sentence of Section 6.01, and (y) without the prior consent of each Lender,
the updated exhibits shall not reflect any substitution of Collateral (other
than any substitution of Liquid Assets for other Liquid Assets), and
(iv) stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to in
Section 3.04(a) and, if any such change has occurred, specifying the effect of
such change on the financial statements accompanying such certificate. In
addition to the foregoing, if pursuant to the last sentence of Section 6.01 the
Trust shall replace any of the assets described in Section 6.01(iii) with assets
described in Section 6.01(i) or (ii), the Borrower shall promptly deliver to the
Administrative Agent and each Lender updated exhibits K, G-1, and G-2 (as
applicable) reflecting the addition of the replacement assets described in
Section 6.01(i) or (ii) and the removal of the replaced assets described in
Section 6.01(iii).

(d) Reports to Debt Holders. Promptly after the furnishing thereof, copies of
any statement or report furnished to any holder of debt securities of the
Borrower or of any of its Subsidiaries pursuant to the terms of any indenture,
loan or credit or similar agreement and not otherwise required to be furnished
to the Lenders pursuant to any other subsection of this Section 5.01.

(e) Management Letters. Promptly after the receipt thereof by the Borrower, a
copy of any “management letter” received by the Borrower from its certified
public accountants and the management’s responses thereto.

(f) Other Information. Promptly following any request therefor, such other
information or existing documents regarding the operations, business affairs and
financial condition of the Borrower or any Subsidiary, or compliance with the
terms of this Agreement (including any information required under the Act), as
the Lenders may reasonably request from time to time.

Documents required to be delivered pursuant to Sections 5.01(a) or 5.01(b) may
be delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or
provides a link thereto on the Borrower’s website on the Internet; or (ii) on
which such documents are posted on the Borrower’s behalf on an Internet or
intranet website, if any, to which the Administrative Agent has access (whether
a commercial, third-party website or whether sponsored by the Administrative
Agent); provided that: (i) the Borrower shall deliver paper copies of such
documents to the Administrative Agent, if the Administrative Agent requests, in
writing, the

 

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Borrower deliver such paper copies, until a written request to cease delivering
paper copies is given by the Administrative Agent and (ii) the Borrower shall
notify the Administrative Agent (by telecopier or electronic mail) of the
posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance the Borrower shall
be required to provide paper copies of the certificate of a Financial Officer
required by Section 5.01(c) to the Administrative Agent.

SECTION 5.02 Notices of Material Events. Furnish to the Administrative Agent and
each Lender prompt written notice of the following:

(a) the occurrence of any Default or any Event of Default;

(b) the filing or commencement of, or, to the knowledge of the Borrower, any
threat or notice of intention of any Person to file or commence, any action,
suit or proceeding, whether at law or in equity by or before any arbitrator or
Governmental Authority (i) against or affecting the Borrower or any Subsidiary
thereof that, if adversely determined, could reasonably be expected to result in
a Material Adverse Effect or (ii) with respect to any Loan Document;

(c) 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
the Threshold Amount; or

(d) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.

Each notice delivered under this Section 5.02 shall be accompanied by a
statement of a Financial Officer or other executive officer of the Borrower
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.

SECTION 5.03 Existence; Conduct of Business.

Do or cause to be done all things necessary to preserve, renew and maintain in
full force and effect its legal existence, except as otherwise expressly
permitted herein or, in the case of any Subsidiary, where the failure to perform
such obligations, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

SECTION 5.04 Books and Records; Inspection Rights.

(a) Keep proper books of record and account in which full, true and correct
entries in conformity with GAAP and/or SAP, as applicable, and all Requirements
of Law are made of all dealings and transactions in relation to its business and
activities.

(b) The Borrower will, and will cause each of its Subsidiaries to, permit the
Administrative Agent (or if an Event of Default is continuing, any Lender) and
any representatives or independent contractors designated by the Administrative
Agent or such Lender, to visit and inspect its properties, to examine and make
extracts from its books and records, and to discuss affairs, finances, accounts
and condition of the Borrower or any Subsidiary with the officers thereof and
advisors therefor (including independent accountants), all at the expense of the
Borrower and at such reasonable times during normal business hours and as often
as may be reasonably desired, upon reasonable advance notice to the Borrower;
provided, however, that unless an Event of Default exists, the Borrower shall
only be required to pay for one (1) such visit by the Administrative Agent and
its representatives and independent

 

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contractors per fiscal year of the Borrower and provided, further, that when an
Event of Default exists the Administrative Agent or any Lender (or any of its
representatives or independent contractors) may do any of the foregoing at the
sole expense of the Borrower at any time during normal business hours and
without advance notice. Notwithstanding the foregoing, the Borrower may place
reasonable limits on access to information which is proprietary or constitutes
trade secrets and need not disclose any information if such disclosure would be
prohibited by a confidentiality agreement entered into by the Borrower on an
arm’s length basis and in good faith.

SECTION 5.05 Compliance with Laws. Comply with all Requirements of Law and
decrees and orders of any Governmental Authority applicable to it or its
property (including, without limitation, the Act), except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.

SECTION 5.06 Further Assurances. The Borrower shall promptly and duly execute
and deliver to the Lenders such documents and assurances and take such further
action as the Lenders may from time to time reasonably request in order to carry
out more effectively the intent and purpose of this Agreement and the other Loan
Documents and to establish, protect and perfect the rights and remedies created
or intended to be created in favor of the Lenders pursuant to this Agreement and
the other Loan Documents.

SECTION 5.07 Covenant to Give Security. The Borrower shall (i) execute and
deliver, or cause to be executed and delivered, to the Administrative Agent such
Security Document or such other documents, and take or cause to be taken, such
actions, in each case as the Administrative Agent shall deem necessary or
advisable to grant to the Administrative Agent, for the benefit of the Secured
Parties, a Lien on the Collateral of the Borrower, and (ii) take all actions as
the Administrative Agent shall deem necessary or advisable to cause such Lien to
be duly perfected to the extent required by the relevant Security Document in
accordance with all applicable Requirements of Law.

ARTICLE VI

Financial Covenant

SECTION 6.01 Financial Covenant.

Minimum Assets. Until the principal of and interest on each Loan and all fees
payable hereunder have been paid in full, the Karfunkel Trust and the Borrower,
jointly and severally, covenant and agree with the Lenders that the Borrower
will not at any time have assets having an aggregate fair market value of less
than one hundred fifteen percent (115%) of the aggregate principal amount of
Loans then outstanding, including accrued and unpaid interest (the “Maintenance
Covenant Margin”); provided, that, other than any assets contributed in
accordance with clause (iii) below, all such assets shall be Liquid Assets. If
on any quarterly review date or at any time that the Loans shall become due and
payable the Maintenance Covenant Margin is not satisfied, the Karfunkel Trust
shall promptly contribute to Holdings: (i) Liquid Assets other than stock of the
public parent corporation of each Lender, (ii) second, solely to the extent
there are insufficient Liquid Assets then owned by the Karfunkel Trust as
described in the preceding clause (i), stock of the public parent corporation of
each Lender, and (iii) third, solely to the extent there are insufficient Liquid
Assets then owned by the Karfunkel Trust as described in the preceding clauses
(i) and (ii), other available assets (other than Equity Interests of Holdings).
Notwithstanding the foregoing, to the extent (x) any assets described in clause
(iii) of the immediately preceding sentence have been contributed to Holdings
and (y) the Karfunkel Trust shall at any time thereafter acquire assets
described in clauses (i) or (ii) of the preceding sentence, the Karfunkel Trust
shall replace the assets described in clause (iii) so contributed with assets
described in clauses (i) or (ii), as applicable, in the order of priority
described in the preceding sentence.

 

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ARTICLE VII

Events of Default

SECTION 7.01 Events of Default.

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

(a) the Borrower shall fail to pay any principal of any Loan when and as the
same shall become due and payable, whether at the due date thereof or otherwise;

(b) the Borrower shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in clause (a) of this Article)
payable under this Agreement or any other Loan Document, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of three (3) Business Days;

(c) any representation or warranty made or deemed made by or on behalf of the
Borrower or any Subsidiary in or in connection with this Agreement or any other
Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with this Agreement or any
amendment or modification hereof or waiver hereunder, shall prove to have been
incorrect when made or deemed made;

(d) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02 or 5.03 (with respect to the Borrower’s
existence);

(e) the Borrower or the Karfunkel Trust, as applicable, shall fail to observe or
perform any covenant, condition or agreement contained in this Agreement (other
than those specified in clause (a), (b), (c) or (d) of this Article), and such
failure shall continue unremedied for a period of thirty (30) consecutive
calendar days after the earlier of (i) actual knowledge of the Borrower of such
default and (ii) notice thereof from the Administrative Agent to the Borrower;

(f) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any Material Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Material Subsidiary or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;

(g) the Borrower or any Material Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Material Subsidiary or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

 

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(h) the Borrower or any Material Subsidiary shall become unable, admit in
writing its inability or fail generally to pay its debts as they become due;

(i) there is entered against the Borrower or any Subsidiary thereof (A) one or
more final judgments or orders for the payment of money in an aggregate amount
(as to all such judgments and orders) exceeding $5,000,000 (to the extent not
covered by independent third-party insurance, has been notified of the potential
claim and does not dispute coverage), or (B) any one or more non-monetary final
judgments that have, or could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect and in case of either (A) or (B),
(x) enforcement proceedings are commenced by any creditor upon such judgment or
order, or (y) there is a period of thirty (30) consecutive days during which a
stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, is not in effect;

(j) one or more ERISA Events shall have occurred that when taken together with
all other such ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower and its Subsidiaries and its ERISA
Affiliates in an aggregate amount exceeding (i) the Threshold Amount in any year
or (ii) the Threshold Amount for all periods;

(k) a Change in Control shall occur;

(l) any Loan Document, at any time after its execution and delivery and for any
reason other than as expressly permitted hereunder or thereunder or the
satisfaction in full of all the Obligations, shall cease to be in full force and
effect; or the Borrower (or any Person by, through or on behalf of the
Borrower), shall contest in any manner the validity or enforceability of any
provision of any Loan Document; or the Borrower shall deny that it has any or
further liability or obligation under any provision of any Loan Document, or
purport to revoke, terminate or rescind any provision of any Loan Document; or

(m) any security interest and Lien purported to be created by any Security
Document shall cease to be in full force and effect, or shall cease to give the
Administrative Agent, for the benefit of the Secured Parties, the Liens, rights,
powers and privileges purported to be created and granted under such Security
Document (including a perfected first priority security interest in and Lien on
the Pledged Equity covered thereby (except as otherwise expressly provided in
such Security Document or in this Agreement)) in favor of the Administrative
Agent, for the benefit of the Secured Parties, or shall be asserted by the
Borrower or any Subsidiary not be a valid, perfect, first priority (except as
otherwise expressly provided in this Agreement or such Security Document)
security interest in or Lien on the Pledged Equity or Collateral, as the case
may be, covered thereby;

(n) then, and in every such event (other than an event with respect to the
Borrower described in clause (f) or (g) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of any Lender shall, by notice to the Borrower, 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 and under the other Loan
Documents, 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 in case of any event with respect to the Borrower described in
clause (f) or (g) of this Article, the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other Obligations
accrued hereunder and under the

 

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other Loan Documents, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower. Upon the occurrence and during the continuance of
an Event of Default, the Administrative Agent may, and at the request of any
Lender shall, exercise any rights and remedies provided to the Administrative
Agent under the Loan Documents or at law or equity, including all remedies
provided under the UCC.

ARTICLE VIII

The Administrative Agent

SECTION 8.01 Appointment and Authority. Each of the Lenders hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf, including execution of the other Loan
Documents, and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto.

SECTION 8.02 Rights as a Lender. The entity serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent, and such entity and its Affiliates may generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.

SECTION 8.03 Exculpatory Provisions. The Administrative Agent shall not have any
duties or obligations except those expressly set forth in the Loan Documents.
Without limiting the generality of the foregoing:

(a) the Administrative Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing;
and

(b) the Administrative Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated by the Loan Documents that the Administrative
Agent is required to exercise in writing as directed by the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02).

(c) 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 or any of its
Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or in the absence of its own gross
negligence or willful misconduct. The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until written notice thereof 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 representation made in or in
connection with any Loan Document, (ii) the contents of any certificate, report
or other document delivered hereunder or in connection with any Loan Document,
(iii) the performance or observance of any of the covenants, agreements or other
terms or conditions set forth in any Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, (v)

 

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the creation, perfection or priority of Liens on the Pledged Equity or the
existence of the Pledged Equity or (vi) 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.

SECTION 8.04 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or sent by the
proper Person. The Administrative Agent also may rely upon any statement made to
it orally or by telephone and believed by it to be made by the proper Person,
and shall not incur any liability for relying thereon. The Administrative Agent
may consult with legal counsel, independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

SECTION 8.05 Delegation of Duties. The Administrative Agent may perform any and
all its duties and exercise its rights and powers 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 and all its duties and exercise its rights
and powers through their respective Related Parties. The exculpatory provisions
of the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent.

SECTION 8.06 Resignation of Administrative Agent. Subject to the appointment and
acceptance of a successor Administrative Agent as provided in this paragraph,
the Administrative Agent may resign at any time by notifying the Lenders and the
Borrower in writing at least thirty (30) days in advance of such resignation.
Upon the resignation by AmTrust as Administrative Agent, National General shall
have the right (but not the obligation) to become the successor Administrative
Agent hereunder in its sole discretion. If National General elects not to become
the successor Administrative Agent pursuant to the immediately preceding
sentence or upon the resignation of any Person other than AmTrust serving as the
Administrative Agent, the Required Lenders shall have the right, with the
consent of the Borrower (such consent not to be unreasonably withheld), to
appoint a successor; provided, that no such consent of the Borrower shall be
required if a Default or Event of Default has occurred and is continuing. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within thirty (30) days after the retiring
Administrative Agent gives notice of its 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 New York, New York,
or an Affiliate of any such bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 8.03 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 it was acting as Administrative Agent.

SECTION 8.07 Non-Reliance as Administrative Agent. Each Lender acknowledges that
it has, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information 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.

 

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SECTION 8.08 No Partnership or Joint Venture. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Administrative Agent)
authorized to act for, any other Lender. Subject to the provisions of this
Agreement and the Security Documents, the Administrative Agent shall have the
exclusive right on behalf of the Lenders to enforce the payment of the principal
of and interest on any Loan after the date such principal or interest has become
due and payable pursuant to the terms of this Agreement.

SECTION 8.09 Collateral Matters. In its capacity as Administrative Agent, the
Administrative Agent is a “representative” of the Secured Parties within the
meaning of the term “secured party” as defined in the New York Uniform
Commercial Code. Each Lender authorizes the Administrative Agent to enter into
each of the Security Documents to which it is a party and to take all action
contemplated by such documents. Each Lender agrees that no Secured Party (other
than the Administrative Agent) shall have the right individually to seek to
realize upon the security granted by any Security Document, it being understood
and agreed that such rights and remedies may be exercised solely by the
Administrative Agent for the benefit of the Secured Parties upon the terms of
the Security Documents. In the event that any Pledged Equity is hereafter
pledged by any Person as collateral security for the Obligations, the
Administrative Agent is hereby authorized, and hereby granted a power of
attorney, to execute and deliver on behalf of the Secured Parties any Loan
Documents necessary or appropriate to grant and perfect a Lien on such Pledged
Equity in favor of the Administrative Agent on behalf of the Secured Parties.
The Lenders hereby authorize the Administrative Agent, at its option and in its
discretion, to release any Lien granted to or held by the Administrative Agent
upon any Pledged Equity: (i) as described in Section 9.02(d); (ii) as permitted
by, but only in accordance with, the terms of the applicable Loan Document; or
(iii) if approved, authorized or ratified in writing by the Required Lenders,
unless such release is required to be approved by all of the Lenders hereunder.
Upon request by the Administrative Agent at any time, the Lenders will confirm
in writing the Administrative Agent’s authority to release particular types or
items of Pledged Equity pursuant hereto. Upon any sale or transfer of assets
constituting Pledged Equity which is permitted pursuant to the terms of any Loan
Document, or consented to in writing by the Required Lenders or all of the
Lenders, as applicable, and upon at least five (5) Business Days’ prior written
request by the Borrower to the Administrative Agent, the Administrative Agent
shall (and is hereby irrevocably authorized by the Lenders to) execute such
documents as may be necessary to evidence the release of the Liens granted to
the Administrative Agent for the benefit of the Secured Parties herein or
pursuant hereto upon the Pledged Equity that was sold or transferred; provided,
however, that (i) the Administrative Agent shall not be required to execute any
such document on terms which, in the Administrative Agent’s opinion, would
expose the Administrative Agent to liability or create any obligation or entail
any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Liens upon (or obligations of the Borrower or any
Subsidiary in respect of) all interests retained by the Borrower or any
Subsidiary, including (without limitation) the proceeds of the sale, all of
which shall continue to constitute part of the Pledged Equity.

 

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ARTICLE IX

Miscellaneous

SECTION 9.01 Notices.

(a) 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 telecopy, as follows:

(i) if to the Borrower, to it at 59 Maiden Lane, 38th Floor, New York, NY 10038,
Attention of General Counsel;

(ii) if to the Administrative Agent, to it at 59 Maiden Lane, 43rd Floor, New
York, NY 10038, Attention of Stephen Ungar, General Counsel (Telecopy No. (212)
220-7130; Telephone No. (646) 458-7913); and

(iii) if to (A) AmTrust International Insurance, Ltd. (in its capacity as
Lender), to it at 59 Maiden Lane, 43rd Floor, New York, NY 10038, Attention of
Stephen Ungar, General Counsel (Telecopy No. (212) 220-7130; Telephone No. (646)
458-7913), and (B) National General Re Ltd., to it at 59 Maiden Lane, 38th
Floor, New York, NY 10038, Attention of Jeffrey Weissman, General Counsel
(Telecopy No. (212) 380-9498; Telephone No. (212) 380-9479).

(b) Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications 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) Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

SECTION 9.02 Waivers; Amendments.

(a) No failure or delay by the Administrative Agent or any Lender in exercising
any right or power hereunder or under any other Loan Document 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 and under the other Loan Documents 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.

 

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(b) 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 directly 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
directly affected thereby, (iv) changes Sections 2.08(b) or 2.08(d) in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) 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 or (vi) except as provided in
clause (d) of this Section or in any Pledge Agreement, release all or
substantially all of the Pledged Equity, 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. In addition, no amendment,
waiver of modification shall be made to Sections 2.02 or 6.01, including with
respect to the form of consideration to be paid, without the consent of each
Lender.

(c) The Lenders hereby irrevocably authorize the Administrative Agent, at its
option and in its sole discretion, to release any Liens granted to the
Administrative Agent by the Borrower or any of its Subsidiary on any Pledged
Equity (i) upon the payment and satisfaction in full in cash of all Obligations,
(ii) constituting property being sold or disposed of if the Borrower certifies
to the Administrative Agent that the sale or disposition is made in compliance
with the terms of this Agreement and any applicable Security Document (and the
Administrative Agent may rely conclusively on any certificate, without further
inquiry), (iii) constituting property leased to the Borrower or any Subsidiary
under a lease which has expired or been terminated in a transaction permitted
under this Agreement, or (iv) as required to effect any sale or other
disposition of such Pledged Equity in connection with any exercise of remedies
of the Administrative Agent and the Lenders pursuant to Article VII. Any such
release shall not in any manner discharge, affect, or impair the Obligations or
any Liens (other than those expressly being released) upon (or obligations of
the Borrower in respect of) all interests retained by the Borrower and its
Subsidiaries, including the proceeds of any sale, all of which shall continue to
constitute part of the Pledged Equity.

(d) Notwithstanding anything to the contrary herein the Administrative Agent
may, with the consent of the Borrower only, amend, modify or supplement this
Agreement or any of the other Loan Documents to cure any ambiguity, omission,
mistake, defect or inconsistency.

SECTION 9.03 Expenses; Indemnity; Damage Waiver.

(a) 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 credit facilities provided for herein, the preparation and
administration of this Agreement and the other Loan Documents (including the
Security Documents and the perfection of Liens pursuant thereto) or 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 reasonable out-of-pocket expenses incurred by the
Administrative Agent or any Lender, including the reasonable fees, charges and
disbursements of one firm as counsel for the Administrative Agent (and, in
addition to such firm, any local counsel engaged in each relevant

 

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jurisdiction by such firm), and one additional firm as counsel for the Lenders
(and, in addition to such firm, any local counsel engaged in each relevant
jurisdiction by such firm) and additional counsel as the Administrative Agent or
any Lender or group of Lenders reasonably determines are necessary in light of
actual or potential conflicts of interest or the availability of different
claims or defenses, in connection with the enforcement or protection of its
rights in connection with this Agreement and any other Loan Document, 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.

(b) The Borrower shall indemnify the Administrative Agent 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
reasonable 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 any Loan Document or
any agreement or instrument contemplated thereby, the performance by the parties
hereto of their respective obligations 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 or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by the Borrower or any of its Subsidiaries, 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 or
damages arising from any non-Tax claim.

(c) To the extent that the Borrower fails to pay any amount required to be paid
by it to the Administrative Agent under paragraph (a) or (b) of this Section,
each Lender severally agrees to pay to the Administrative Agent such Lender’s
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount (it
being understood that the Borrower’s failure to pay any such amount shall not
relieve the Borrower of any default in the payment thereof); provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent in its capacity as such.

(d) To the extent permitted by applicable law, the Borrower shall not assert,
and hereby waives, any claim against any Indemnitee (i) 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), or (ii) 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.

(e) All amounts due under this Section shall be payable not later than fifteen
(15) days 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

 

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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) neither Lender may assign
or otherwise transfer its rights or obligations hereunder without the prior
written consent of the other Lender, except for any assignment or transfer by a
Lender to an Affiliate advance written notice of which has been provided to the
other Lender and to the Administrative Agent. 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
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. In the event of any assignment or
transfer of rights or obligations hereunder that is permitted pursuant to this
Section 9.04, the assigning or transferring party shall execute and deliver, or
cause to be executed and delivered, such agreements, documents and instruments
as may be reasonably requested by the Administrative Agent to properly document
and evidence the assignment or transfer under this Agreement and other Loan
Documents.

SECTION 9.05 Survival. All covenants, agreements, representations and warranties
made by the Borrower in the Loan Documents and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loan, 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 or any other Loan Document is outstanding and
unpaid and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.06, 2.07, 2.08 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 and
the Commitments or the termination of this Agreement or any other Loan Document
or any provision hereof or thereof.

SECTION 9.06 Counterparts; Integration; Effectiveness. 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. Delivery of an executed counterpart
of a signature page of this Agreement by facsimile or other electronic imaging
shall be effective as delivery of a manually executed counterpart of this
Agreement.

SECTION 9.07 Severability. Any provision of any Loan Document 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 thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

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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 obligations at any time owing by such Lender or Affiliate
to or for the credit or the account of the Borrower against any of and all of
the Obligations held by such Lender, irrespective of whether or not such Lender
shall have made any demand under the Loan Documents and although such
obligations may be unmatured. The rights of each Lender under this Section 9.08
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.

SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.

(b) The Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of the Supreme Court of the State
of New York sitting in New York County, Borough of Manhattan, and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to any Loan Document, 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 be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal 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 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 or any other Loan Document against the
Borrower or its properties in the courts of any jurisdiction.

(c) The Borrower 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 (b) 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 or
any other Loan Document 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, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (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 BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

 

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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, in each case who need to know such Information in connection
with the Loan Documents and the Transactions (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 regulatory 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 under
this Agreement or any other Loan Document or any suit, action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
or prospective assignee of 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) with
the consent of the Borrower or (h) 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
nonconfidential 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 nonconfidential
basis prior to disclosure by the Borrower; 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 USA PATRIOT Act. Each Lender that is subject to the requirements of
the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”) hereby notifies the Borrower that pursuant to the
requirements of the 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 Act.

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 Requirements of 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 Requirements of 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.

SECTION 9.15 No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), the Borrower acknowledges and agrees that: (i) (A) the arranging and
other services regarding this Agreement provided by the Lenders are arm’s-length
commercial transactions between the Borrower, on the one hand, and the Lenders
and their

 

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Affiliates, on the other hand, (B) the Borrower has consulted its own legal,
accounting, regulatory and tax advisors to the extent it has deemed appropriate,
and (C) the Borrower is capable of evaluating, and understands and accepts, the
terms, risks and conditions of the transactions contemplated hereby and by the
other Loan Documents; (ii) (A) each of the Lenders and their Affiliates is and
has been acting solely as a principal and, except as expressly agreed in writing
by the relevant parties, has not been, is not, and will not be acting as an
advisor, agent or fiduciary for the Borrower or any of its Affiliates and (B) no
Lender or any of its Affiliates has any obligation to the Borrower or any of its
Affiliates with respect to the transactions contemplated hereby except, in the
case of a Lender, those obligations expressly set forth herein and in the other
Loan Documents; and (iii) each of the Lenders and their respective Affiliates
may be engaged in a broad range of transactions that involve interests that
differ from those of the Borrower and its Affiliates, and no Lender or any of
its Affiliates has any obligation to disclose any of such interests to the
Borrower or its Affiliates. To the fullest extent permitted by law, the Borrower
hereby waives and releases any claims that it may have against each of the
Lenders and their Affiliates with respect to any breach or alleged breach of
agency or fiduciary duty in connection with any aspect of any transaction
contemplated hereby.

SECTION 9.16 Appointment for Perfection. Each Lender hereby appoints each other
Lender as its agent for the purpose of perfecting Liens, for the benefit of the
Administrative Agent and the Secured Parties, in assets which, in accordance
with Article 9 of the UCC or any other applicable law can be perfected only by
possession. Should any Lender (other than the Administrative Agent) obtain
possession of any Pledged Equity, such Lender shall notify the Administrative
Agent thereof, and, promptly upon the Administrative Agent’s request therefor
shall deliver such Pledged Equity to the Administrative Agent or otherwise deal
with such Pledged Equity in accordance with the Administrative Agent’s
instructions.

[Signature Pages Follow]

 

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

 

BORROWER: ACP RE HOLDINGS, LLC, as Borrower By:  

/s/ Leah Karfunkel

  Name: Leah Karfunkel   Title: Manager

 

Signature Page to Credit Agreement

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Solely with respect to its representations under Sections 3.01 and 3.02, and its
obligations under Section 6.01 and provisions of the Loan Documents incidental
or related thereto:

 

MICHAEL KARFUNKEL FAMILY 2005 TRUST By:  

/s/ Leah Karfunkel

  Name: Leah Karfunkel   Title: Trustee By:  

/s/ Barry Zyskind

  Name: Barry Zyskind   Title: Trustee

 

Signature Page to Credit Agreement

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ADMINISTRATIVE AGENT: AMTRUST FINANCIAL SERVICES, INC., as Administrative Agent
By:  

/s/ Ronald E. Pipoly, Jr.

  Name: Ronald E. Pipoly, Jr.   Title: EVP, Chief Financial Officer

 

Signature Page to Credit Agreement

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LENDERS: AMTRUST INTERNATIONAL INSURANCE, LTD., as a Lender By:  

/s/ Stephen Ungar

  Name: Stephen Ungar   Title: Secretary NATIONAL GENERAL RE LTD., as a Lender
By:  

/s/ Jeffrey Weissmann

  Name: Jeffrey Weissmann   Title: Vice President

 

Signature Page to Credit Agreement

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SCHEDULE 2.01

COMMITMENTS

 

LENDER

   COMMITMENT  

AMTRUST INTERNATIONAL INSURANCE, LTD.

   $ 125,000,000   

NATIONAL GENERAL RE LTD.

   $ 125,000,000   

AGGREGATE COMMITMENT

   $ 250,000,000