CREDIT AGREEMENT

between

EVEREST REINSURANCE HOLDINGS, INC.,

THE LENDERS NAMED HEREIN,

and

WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent

 

$150,000,000 Senior Revolving Credit Facility

Lead Arranger and Sole Book-Runner:
WACHOVIA CAPITAL MARKETS, LLC

Dated as of October 10, 2003

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TABLE OF CONTENTS

 

                                                RECITALS                                                                                                              
                                       PAGE

ARTICLE I

DEFINITIONS

1.1   Defined Terms     1 1.2   Accounting Terms    16 1.3   Other Terms;
Construction    17

ARTICLE II

AMOUNT AND TERMS OF THE LOANS

2 .1 Commitments     17 2 .2 Borrowings    17 2 .3 Disbursements; Funding
Reliance; Domicile of Loans    18 2 .4 Notes    19 2 .5 Termination and
Reduction of Commitments    19 2 .6 Mandatory and Voluntary Payments and
Prepayments    20 2 .7 Interest    20 2 .8 Fees    22 2 .9 Interest Periods   
22 2 .10 Conversions and Continuations    23 2 .11 Method of Payments;
Computations    24 2 .12 Recovery of Payments    25 2 .13 Use of Proceeds    26
2 .14 Pro Rata Treatment    26 2 .15 Increased Costs; Change in Circumstances;
Illegality; etc    27 2 .16 Taxes    29 2 .17 Compensation    31 2 .18
Replacemen Lenders    31

ARTICLE III

CONDITIONS OF BORROWING

3.1   Conditions of Initial Borrowing     32 3.2   Conditions of All Borrowings 
  35

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

4 .1 Corporate Organization and Power     35 4 .2 Authorization; Enforceability 
  36 4 .3 No Violation    36 4 .4 Governmental Authorization; Permits    36 4 .5
Litigation    37 4 .6 Taxes    37 4 .7 Subsidiaries    37 4 .8 Full Disclosure 
  37 4 .9 Margin Regulations    38 4 .10 No Material Adverse Change    38 4 .11
Financial Matters    38 4 .12 ERISA    39 4 .13 Environmental Matters    40 4
.14 Compliance With Laws    40 4 .15 Regulated Industries    41 4 .16 Insurance 
  41 4 .17 Material Contracts    41 4 .18 Reinsurance Agreements    41 4 .19
Foreign Assets Control Regulations and Anti-Money Laundering    42 4 .20 Pari
Passu Debt    42

ARTICLE V

AFFIRMATIVE COVENANTS

5. 1 GAAP Financial Statements     42 5. 2 Statutory Financial Statements    43
5. 3 Other Business and Financial Information    44 5. 4 Corporate Existence;
Franchises; Maintenance of Properties    47 5. 5 Compliance with Laws    47 5. 6
Payment of Obligations    47 5. 7 Insurance    47 5. 8 Maintenance of Books and
Records; Inspection    47 5. 9 Dividends    48 5. 10 USA Patriot Act Compliance 
  48 5. 11 Further Assurances    48

ARTICLE VI

FINANCIAL COVENANTS

6 .1 Maximum Consolidated Indebtedness to Total Capitalization     48 6 .2
Minimum Statutory Surplus    48 6 .3 Minimum Interest Coverage Ratio    49

ARTICLE VII

NEGATIVE COVENANTS

7.1    Fundamental Changes       49 7.2    Indebtedness      49 7.3    Liens   
  50 7.4    Disposition of Assets      51 7.5    Transactions with Affiliates   
  52 7.6    Restricted Payments      53 7.7    Lines of Business      53 7.8
   Fiscal Year      53 7.9    Ratings      53 7.10    Accounting Changes      53
7.11    Limitation on Certain Restrictions      53 7.12    Investments      54

ARTICLE VIII

EVENTS OF DEFAULT

8 .1 Events of Default     54 8 .2 Remedies; Termination of Commitments,
Acceleration, Etc    56 8 .3 Remedies; Set-Off    57

ARTICLE IX

THE ADMINISTRATIVE AGENT

9 .1 Appointment     57 9 .2 Nature of Duties    57 9 .3 Exculpatory Provisions 
  58 9 .4 Reliance by Administrative Agent    58 9 .5 Non-Reliance on
Administrative Agent and Other Lenders    59 9 .6 Notice of Default    59 9 .7
Indemnification    60 9 .8 The Administrative Agent in its Individual Capacity 
  60 9 .9 Successor Agent    60

ARTICLE X

MISCELLANEOUS

10.1 Fees and Expenses       61 10.2 Indemnification      61 10.3 Governing Law;
Consent to Jurisdiction    62 10.4 Waiver of Trial by Jury      63 10.5 Notices
     63 10.6 Amendments Waivers, Etc      64 10.7 Assignments, Participations   
  64 10.8 No Waiver      67 10.9 Successors and Assigns      67 10.10 Survival
     67 10.11 Severability      67 10.12 Construction      68 10.13
Confidentiality      68 10.14 Counterparts;Effectiveness      68 10.15
Disclosure of Information      68 10.16 Nonreliance      69 10.17 Entire
Agreement      69

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EXHIBITS

Exhibit A   Form of Note   Exhibit B-1  Form of Notice of Borrowing  Exhibit
B-2  Form of Notice of Conversion/Continuation  Exhibit C-1  Form of GAAP
Compliance Certificate  Exhibit C-2  Form of SAP Compliance Certificate  Exhibit
D  Form of Assignment and Acceptance 

SCHEDULES

Schedule 1.1(a)   Commitments and Notice Addresses   Schedule 4.4  Licenses 
Schedule 4.7  Subsidiaries  Schedule 4.17  Material Contracts  Schedule 7.3 
Liens 

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CREDIT AGREEMENT

        THIS CREDIT AGREEMENT, dated as of the 10th day of October 2003, is made
among EVEREST REINSURANCE HOLDINGS, INC., a Delaware corporation with its
principal offices in Liberty Corner, New Jersey (the “Borrower”), the banks and
financial institutions listed on the signature pages hereto or that become
parties hereto after the date hereof (collectively, the “Lenders”), and WACHOVIA
BANK, NATIONAL ASSOCIATION (“Wachovia”), as administrative agent for the
Lenders.

RECITALS

     A.     The Borrower has requested that the Lenders make available to the
Borrower a revolving credit facility in the aggregate principal amount of
$150,000,000. The Borrower will use the proceeds of this facility (i) to
refinance certain existing indebtedness, (ii) to pay certain transaction fees
and expenses in connection herewith and therewith, and (iii) for working capital
and general corporate purposes, all as more fully described herein.

     B.     The Lenders are willing to make available to the Borrower the
revolving credit facility described above subject to and on the terms and
conditions set forth in this Agreement.

AGREEMENT

        NOW, THEREFORE, in consideration of the mutual provisions, covenants and
agreements herein contained, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

     1.1 Defined Terms. For purposes of this Agreement, in addition to the terms
defined elsewhere herein, the following terms shall have the meanings set forth
below (such meanings to be equally applicable to the singular and plural forms
thereof):

        “Account Designation Letter” shall mean a letter from the Borrower to
the Administrative Agent, duly completed and signed by an Authorized Officer and
in form and substance satisfactory to the Administrative Agent, listing any one
or more accounts to which the Borrower may from time to time request the
Administrative Agent to forward the proceeds of any Loans made hereunder.

        “Adjusted LIBOR Rate” shall mean, at any time with respect to any LIBOR
Loan, a rate per annum equal to the LIBOR Rate as in effect at such time plus
the Applicable Margin Percentage for LIBOR Loans as in effect at such time.

        “Administrative Agent” shall mean Wachovia, in its capacity as
Administrative Agent appointed under ARTICLE IX, and its successors and
permitted assigns in such capacity.

        “Affiliate” shall mean, as to any Person, each other Person that
directly, or indirectly through one or more intermediaries, owns or controls, is
controlled by or under common control with, such Person or is a director or
officer of such Person. For purposes of this definition, with respect to any
Person “control” shall mean (i) the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise, or
(ii) the beneficial ownership of securities or other ownership interests of such
Person having 10% or more of the combined voting power of the then outstanding
securities or other ownership interests of such Person ordinarily (and apart
from rights accruing under special circumstances) having the right to vote in
the election of directors or other governing body of such Person.

        “Agreement” shall mean this Credit Agreement, as amended, restated,
modified or supplemented from time to time.

        “Annual Statement” shall mean, with respect to any Insurance Subsidiary
for any fiscal year, the annual financial statements of such Insurance
Subsidiary as required to be filed with the Insurance Regulatory Authority of
its jurisdiction of domicile and in accordance with the laws of such
jurisdiction, together with all exhibits, schedules, certificates and actuarial
opinions required to be filed or delivered therewith.

        “Applicable Margin Percentage” shall mean, at any time from and after
the Closing Date, the applicable percentage (a) to be added to the LIBOR Rate
pursuant to Section 2.7 for purposes of determining the Adjusted LIBOR Rate,
(b) to be used in calculating the commitment fee payable pursuant to
Section 2.8(b), and (c) to be used in calculating the utilization fee payable
pursuant to Section 2.8(d), in each case as determined under the following
matrix with reference to the Borrower’s senior unsecured debt rating by Moody’s
or Standard & Poor’s (in each case based upon the higher of the two ratings),
when available, or, if not available, then with reference to three rating levels
below the higher of the financial strength ratings (individual company or pool
rating, if applicable) assigned to Everest Re by Standard & Poor’s and Moody’s
(the “Financial Strength Rating”):

    Standard         Applicable Margin                           Poor's/Moody's
    Percentage for Utilization Level  Rating  Commitment fees   LIBOR Loans
Usage > 50%       I  A+/A1 or above  0.080%     0.350% 0.100%     II  A/A2 
0.100%     0.425% 0.100%    III  A-/A3  0.125%   0.500% 0.100%     IV 
BBB+/Baa1  0.150%     0.650% 0.150%     V  BBB/Baa2 or below  0.200%     0.825%
0.250%  

Notwithstanding anything set forth herein to the contrary, if at any time the
difference between the senior unsecured debt ratings by Moody’s and Standard &
Poor’s is more than one rating grade, then for purposes of determining the
applicable level set forth above, the rating one level above the lower rating
will apply.

On each Adjustment Date (as hereinafter defined), the Applicable Margin
Percentage for all Loans and the commitment fee and utilization fee payable
pursuant to Section 2.8(b) and (d) respectively shall be adjusted effective as
of such date in accordance with the above matrix; provided, however, that,
notwithstanding the foregoing or anything else herein to the contrary, if at any
time an Event of Default described in Section 8.1(a) shall have occurred and be
continuing, at all times from and including the date on which such Event of
Default occurred to the date on which such Event of Default shall have been
cured or waived, each Applicable Margin Percentage shall be determined in
accordance with Level V of the above matrix (notwithstanding the actual level).
For purposes of this definition, “Adjustment Date” shall mean the tenth (10th)
Business Day after the announcement by either Moody’s or Standard & Poor’s of
any change in its rating with respect to the Borrower’s senior unsecured debt or
the Financial Strength Rating if the Borrower does not have a senior unsecured
debt rating. Until the first Adjustment Date, each Applicable Margin Percentage
shall be determined in accordance with Level III of the above matrix.

        “Arranger” shall mean Wachovia Capital Markets, LLC.

        “Assignee” shall have the meaning given to such term in Section 10.7(a).

        “Assignment and Acceptance” shall mean an Assignment and Acceptance
entered into between a Lender and an Assignee and accepted by the Administrative
Agent and the Borrower, in substantially the form of Exhibit D.

        “Authorized Officer” shall mean, with respect to any action specified
herein, any officer of the Borrower duly authorized by resolution of the board
of directors of the Borrower to take such action on its behalf, and whose
signature and incumbency shall have been certified to the Administrative Agent
by the secretary or an assistant secretary of the Borrower.

        “Available Dividend Amount” shall mean, with respect to Everest Re for
any period of four consecutive fiscal quarters, the aggregate maximum amount of
dividends that is or, if such period were a fiscal year, would be permitted by
the Insurance Regulatory Authority of its jurisdiction of domicile, under all
applicable Requirements of Law (without the necessity of any consent, approval
or other action of such Insurance Regulatory Authority involving the granting of
permission or the exercise of discretion by such Insurance Regulatory
Authority), to be paid by Everest Re to the Borrower in respect of such
four-quarter period as if such period were a fiscal year (whether or not any
such dividends are actually paid).

        “Bankruptcy Code” shall mean 11 U.S.C. §§101 et seq., as amended from
time to time, and any successor statute.

        “Base Rate” shall mean the higher of (i) the per annum interest rate
publicly announced from time to time by Wachovia in Charlotte, North Carolina,
to be its prime rate (which may not necessarily be its best lending rate), as
adjusted to conform to changes as of the opening of business on the date of any
such change in such prime rate, and (ii) the Federal Funds Rate plus 0.5% per
annum, as adjusted to conform to changes as of the opening of business on the
date of any such change in the Federal Funds Rate.

        “Base Rate Loan” shall mean, at any time, any Loan that bears interest
at such time at the Base Rate.

        “Borrowing” shall mean the incurrence by the Borrower (including as a
result of conversions and continuations of outstanding Loans pursuant to
Section 2.10) on a single date of a group of Loans of a single Type and, in the
case of LIBOR Loans, as to which a single Interest Period is in effect.

        “Borrowing Date” shall mean, with respect to any Borrowing, the date
upon which such Borrowing is made.

        “Business Day” shall mean (i) any day other than a Saturday or Sunday, a
legal holiday or a day on which commercial banks in Charlotte, North Carolina or
New York, New York are authorized by law or proclamation to be closed and
(ii) in respect of any determination relevant to a LIBOR Loan, any such day that
is also a day on which tradings are conducted in the London interbank Eurodollar
market.

        “Capital Stock” shall mean (i) with respect to any Person that is a
corporation, any and all shares, interests or equivalents in capital stock
(whether voting or nonvoting, and whether common or preferred) of such
corporation, and (ii) with respect to any Person that is not a corporation, any
and all partnership, membership, limited liability company or other equity
interests of such Person; and in each case, any and all warrants, rights or
options to purchase any of the foregoing.

        “Cash Equivalents” shall mean (i) securities issued or unconditionally
guaranteed by the United States of America or any agency or instrumentality
thereof, backed by the full faith and credit of the United States of America and
maturing within ninety (90) days from the date of acquisition, (ii) commercial
paper issued by any Person organized under the laws of the United States of
America, maturing within ninety (90) days from the date of acquisition and, at
the time of acquisition, having a rating of at least A-1 or the equivalent
thereof by Standard & Poor’s or at least P-1 or the equivalent thereof by
Moody’s, (iii) time deposits and certificates of deposit maturing within ninety
(90) days from the date of issuance and issued by a bank or trust company
organized under the laws of the United States of America or any state thereof
that has combined capital and surplus of at least $500,000,000 and that has (or
is a subsidiary of a bank holding company that has) a long-term unsecured debt
rating of at least A or the equivalent thereof by Standard & Poor’s or at least
A2 or the equivalent thereof by Moody’s, (iv) repurchase obligations with a term
not exceeding seven (7) days with respect to underlying securities of the types
described in clause (i) above entered into with any bank or trust company
meeting the qualifications specified in clause (iii) above, and (v) money market
funds at least 95% of the assets of which are continuously invested in
securities of the type described in clauses (i) through (iv) above.

        “Closing Date” shall mean the date upon which the initial extension of
credit is made pursuant to this Agreement.

        “Combined Net Cash Flow” shall mean, with respect to the Borrower’s
non-Insurance Subsidiaries (other than Subsidiaries of an Insurance Subsidiary)
and without duplication, for any period, the sum of (i) the aggregate Net Income
for such period and (ii) the sum of depreciation expense, amortization of
intangible assets, any increase during such period in deferred taxes and other
non-cash expenses, losses and charges reducing income, in each case to the
extent taken into account in the calculation of such Net Income for such period,
minus the sum of capital expenditures and all non-cash gains and other non-cash
items taken into account in determining such Net Income for such period and any
decrease during such period in deferred taxes.

        “Commitment” shall mean, with respect to any Lender at any time, the
commitment of such Lender to make Loans in an aggregate principal amount at any
time outstanding up to the amount set forth opposite such Lender’s name on
Schedule 1.1(a) under the caption “Commitment” or, if such Lender has entered
into one or more Assignment and Acceptances, the amount set forth for such
Lender at such time in the Register maintained by the Administrative Agent
pursuant to Section 10.7(b) as such Lender’s “Commitment,” as such amount may be
reduced at or prior to such time pursuant to the terms hereof.

        “Compliance Certificate” shall mean a fully completed and duly executed
certificate in the form of Exhibit C-1 or Exhibit C-2, each together with a
Covenant Compliance Worksheet.

        “Consolidated Indebtedness” shall mean, as of the last day of any fiscal
quarter, the aggregate (without duplication) of all Indebtedness (whether or not
reflected on the Borrower’s or any Subsidiary’s balance sheet) of the Borrower
and its Subsidiaries, determined on a consolidated basis in accordance with
GAAP, excluding (i) reimbursement obligations in respect of letters of credit
issued for the benefit of any Insurance Subsidiary or the Borrower in the
ordinary course of its business to support the payment of obligations arising
under insurance and reinsurance contracts and weather and similar swap
agreements, but only in each case to the extent such letters of credit (A) are
not drawn upon and (B) are collateralized by cash or Cash Equivalents and (ii)
the aggregate redemption value of all Trust Preferred Securities to the extent
such aggregate redemption value is equal to or less than fifteen percent (15%)
of Total Capitalization.

        “Consolidated Interest Expense” shall mean, for any period, the sum
(without duplication) of (i) total interest expense of Borrower and its
Subsidiaries for such period in respect of Consolidated Indebtedness of Borrower
and its Subsidiaries (including, without limitation, all such interest expense
accrued or capitalized during such period, whether or not actually paid during
such period), determined on a consolidated basis in accordance with GAAP,
(ii) all net amounts payable under or in respect of Hedge Agreements, to the
extent paid or accrued by the Borrower and its Subsidiaries during such period,
and (iii) all commitment fees and other ongoing fees in respect of Consolidated
Indebtedness (including the fees provided for under Sections 2.8(b) and (d))
paid, accrued or capitalized by the Borrower and its Subsidiaries during such
period.

        “Consolidated Net Income” shall mean, for any period, net income (or
loss) for the Borrower and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.

        “Consolidated Net Worth” shall mean, as of any date of determination,
the net worth of the Borrower and its Subsidiaries as of such date, determined
on a consolidated basis in accordance with GAAP, but excluding any Disqualified
Capital Stock.

        “Contingent Obligation” shall mean, with respect to any Person, any
direct or indirect liability of such Person with respect to any Indebtedness,
liability or other obligation (the “primary obligation”) of another Person (the
“primary obligor”), whether or not contingent, (a) to purchase, repurchase or
otherwise acquire such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or provide funds (i) for the payment
or discharge of any such primary obligation or (ii) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net worth
or solvency or any balance sheet item, level of income or financial condition of
the primary obligor, (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor in respect thereof to make payment of such
primary obligation or (d) otherwise to assure or hold harmless the owner of any
such primary obligation against loss or failure or inability to perform in
respect thereof; provided, however, that, with respect to the Borrower and its
Subsidiaries, the term Contingent Obligation shall not include (y) endorsements
for collection or deposit in the ordinary course of business or (z) obligations
entered into by an Insurance Subsidiary in the ordinary course of its insurance
or reinsurance business under insurance policies, surety bonds or contracts
issued by it or to which it is a party, including reinsurance agreements (and
security posted by any such Insurance Subsidiary in the ordinary course of its
business to secure obligations thereunder).

        “Covenant Compliance Worksheet” shall mean a fully completed worksheet
in the form of Attachment A to Exhibit C-1 or Exhibit C-2.

        “Credit Documents” shall mean this Agreement, the Notes, the Fee Letter
and all other agreements, instruments, documents and certificates now or
hereafter executed and delivered to the Administrative Agent or any Lender by or
on behalf of the Borrower or any of its Subsidiaries with respect to this
Agreement and the transactions contemplated hereby, in each case as amended,
restated, modified or supplemented from time to time.

        “Default” shall mean any event or condition that, with the passage of
time or giving of notice, or both, would constitute an Event of Default.

        “Disqualified Capital Stock” shall mean, with respect to any Person, any
Capital Stock of such Person that, by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable), or upon the
happening of any event or otherwise, (i) matures or is mandatorily redeemable or
subject to any mandatory repurchase requirement, pursuant to a sinking fund
obligation or otherwise, (ii) is redeemable or subject to any mandatory
repurchase requirement at the sole option of the holder thereof, or (iii) is
convertible into or exchangeable for (whether at the option of the issuer or the
holder thereof) (a) debt securities or (b) any Capital Stock referred to in (i)
or (ii) above, in each case under (i), (ii) or (iii) above at any time on or
prior to the first anniversary of the Maturity Date; provided, however, that
only the portion of Capital Stock that so matures or is mandatorily redeemable,
is so redeemable at the option of the holder thereof, or is so convertible or
exchangeable on or prior to such date shall be deemed to be Disqualified Capital
Stock.

        “Dollars” or “$” shall mean dollars of the United States of America.

        “Eligible Assignee” shall mean (i) a commercial bank organized under the
laws of the United States or any state thereof and having total assets in excess
of $1,000,000,000, (ii) a commercial bank organized under the laws of any other
country that is a member of the Organization for Economic Cooperation and
Development or any successor thereto (the “OECD”) or a political subdivision of
any such country and having total assets in excess of $1,000,000,000; provided
that such bank or other financial institution is acting through a branch or
agency located in the United States, in the country under the laws of which it
is organized or in another country that is also a member of the OECD, (iii) the
central bank of any country that is a member of the OECD, (iv) a finance
company, insurance company or other financial institution or fund that is
engaged in making, purchasing or otherwise investing in loans in the ordinary
course of its business and having total assets in excess of $500,000,000,
(v) any Affiliate of an existing Lender or (vi) any other Person approved by the
Required Lenders, which approval shall not be unreasonably withheld.

        “Environmental Claims” shall mean any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations (other than internal reports prepared
by any Person in the ordinary course of its business and not in response to any
third party action or request of any kind) or proceedings relating in any way to
any Environmental Law or relating to any permit issued, or any approval given,
under any such Environmental Law (collectively, “Claims”), including, without
limitation, (i) any and all Claims by Governmental Authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law and (ii) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Substances or arising from alleged
injury or threat of injury to human health or the environment.

        “Environmental Laws” shall mean any and all federal, state and local
laws, statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations, rules of common law and orders of courts or Governmental
Authorities, relating to the protection of human health or occupational safety
or the environment, now or hereafter in effect and in each case as amended from
time to time, including, without limitation, requirements pertaining to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transportation, handling, reporting, licensing, permitting, investigation or
remediation of Hazardous Substances.

        “ERISA” shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.

        “ERISA Affiliate” shall mean any Person (including any trade or
business, whether or not incorporated) that would be deemed to be under “common
control” with, or a member of the same “controlled group” as, the Borrower or
any of its Subsidiaries, within the meaning of Sections 414(b), (c), (m) or (o)
of the Internal Revenue Code or Section 4001 of ERISA.

        “ERISA Event” shall mean any of the following with respect to a Plan or
Multiemployer Plan, as applicable: (i) a Reportable Event with respect to a Plan
or a Multiemployer Plan, (ii) a complete or partial withdrawal by the Borrower
or any ERISA Affiliate from a Multiemployer Plan that results in liability under
Section 4201 or 4204 of ERISA, or the receipt by the Borrower or any ERISA
Affiliate of notice from a Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA, (iii) the distribution
by the Borrower or any ERISA Affiliate under Section 4041 or 4041A of ERISA of a
notice of intent to terminate any Plan or the taking of any action to terminate
any Plan, (iv) the commencement of proceedings by the PBGC under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan, or the receipt by the Borrower or any ERISA Affiliate of a notice from any
Multiemployer Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan, (v) the institution of a proceeding by any fiduciary of
any Multiemployer Plan against the Borrower or any ERISA Affiliate to enforce
Section 515 of ERISA, which is not dismissed within thirty (30) days, (vi) the
imposition upon the Borrower or any ERISA Affiliate of any liability under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, or the imposition or threatened imposition of any Lien upon any
assets of the Borrower or any ERISA Affiliate as a result of any alleged failure
to comply with the Internal Revenue Code or ERISA in respect of any Plan,
(vii) the engaging in or otherwise becoming liable for a nonexempt Prohibited
Transaction by the Borrower or any ERISA Affiliate, (viii) a violation of the
applicable requirements of Section 404 or 405 of ERISA or the exclusive benefit
rule under Section 401(a) of the Internal Revenue Code by any fiduciary of any
Plan for which the Borrower or any of its ERISA Affiliates may be directly or
indirectly liable or (ix) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Internal Revenue Code or Section 307 of
ERISA, would result in the loss of tax-exempt status of the trust of which such
Plan is a part if the Borrower or an ERISA Affiliate fails to timely provide
security to such Plan in accordance with the provisions of such sections.

        “Event of Default” shall have the meaning given to such term in Section
8.1.

        “Everest Indemnity” shall mean Everest Indemnity Insurance Company, a
Delaware corporation and subsidiary of Everest Re.

        “Everest National” shall mean Everest National Insurance Company, an
Arizona insurance corporation and subsidiary of Everest Re.

        “Everest Re” shall mean Everest Reinsurance Company, a Delaware
insurance corporation and the Borrower’s primary insurance subsidiary.

        “Everest Security” shall mean Everest Security Insurance Company, a
Georgia insurance corporation and subsidiary of Everest Re.

        “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.

        “Existing Credit Agreement” shall mean the Credit Agreement, dated
December 21, 1999, as amended, between the Borrower, the lenders party thereto
and Wachovia (formerly known as First Union National Bank) as administrative
agent for such lenders.

        “Federal Funds Rate” shall mean, for any period, a fluctuating per annum
interest rate (rounded upwards, if necessary, to the nearest 1/100 of one
percentage point) equal for each day during such period to the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding 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 of the quotations for such day on such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by the Administrative Agent.

        “Federal Reserve Board” shall mean the Board of Governors of the Federal
Reserve System or any successor thereto.

        “Fee Letter” shall mean the letter from Wachovia and the Arranger to the
Borrower, dated September 3, 2003, relating to certain fees payable by the
Borrower in respect of the transactions contemplated by this Agreement, as
amended, modified or supplemented from time to time.

        “Financial Officer” shall mean, with respect to the Borrower, the chief
financial officer, vice president – finance, principal accounting officer or
treasurer of the Borrower.

        “GAAP” shall mean generally accepted accounting principles, as set forth
in the statements, opinions and pronouncements of the Accounting Principles
Board, the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained, as in effect
from time to time (subject to the provisions of Section 1.2).

        “Governmental Authority” shall mean any nation or government, any state
or other political subdivision thereof and any central bank thereof, any
municipal, local, city or county government, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.

        “Group” shall mean Everest Re Group, Ltd., a corporation organized under
the laws of Bermuda.

        “Hazardous Substances” shall mean any substances or materials (i) that
are or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants or toxic substances under any Environmental Law, (ii) that are
defined by any Environmental Law as toxic, explosive, corrosive, ignitable,
infectious, radioactive, mutagenic or otherwise hazardous, (iii) the presence of
which require investigation or response under any Environmental Law, (iv) that
constitute a nuisance, trespass or health or safety hazard to Persons or
neighboring properties, (v) that consist of underground or aboveground storage
tanks, whether empty, filled or partially filled with any substance or (vi) that
contain, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or wastes, crude oil, nuclear fuel, natural gas or synthetic gas.

        “Hedge Agreement” shall mean any interest or foreign currency rate swap,
cap, collar, option, hedge, forward rate or other similar agreement or
arrangement designed to protect against fluctuations in interest rates or
currency exchange rates, including any swap agreement (as defined in 11 U.S.C. §
101).

        “Historical Statutory Statements” shall have the meaning given to such
term in Section 4.11(c).

        “Holding Company Expenses” shall mean, for any period, the aggregate of
all operating costs and expenses incurred or paid by the Borrower during such
period, including without limitation rent, utilities, professional fees, taxes
(without duplication for taxes included in the determination of Net Tax Sharing
Payments) and payroll expenses.

        “Indebtedness” shall mean, with respect to any Person (without
duplication), (i) all indebtedness of such Person for borrowed money or in
respect of loans or advances, (ii) all obligations of such Person evidenced by
notes, bonds, debentures or similar instruments, (iii) all reimbursement
obligations of such Person with respect to surety bonds, letters of credit and
bankers’ acceptances (in each case, whether or not drawn or matured and in the
stated amount thereof), (iv) all obligations of such Person to pay the deferred
purchase price of property or services, (v) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person, (vi) all obligations of such Person as lessee
under leases that are or are required to be, in accordance with GAAP, recorded
as capital leases, to the extent such obligations are required to be so
recorded, (vii) all obligations and liabilities of such Person incurred in
connection with any transaction or series of transactions providing for the
financing of assets through one or more securitizations or in connection with,
or pursuant to, any synthetic lease or similar off-balance sheet financing,
(viii) all Disqualified Capital Stock issued by such Person, with the amount of
Indebtedness represented by such Disqualified Capital Stock being equal to the
greater of its voluntary or involuntary liquidation preference and its maximum
fixed repurchase price, but excluding accrued dividends, if any (for purposes
hereof, the “maximum fixed repurchase price” of any Disqualified Capital Stock
that does not have a fixed repurchase price shall be calculated in accordance
with the terms of such Disqualified Capital Stock as if such Disqualified
Capital Stock were purchased on any date on which Indebtedness shall be required
to be determined pursuant to this Agreement, and if such price is based upon, or
measured by, the fair market value of such Disqualified Capital Stock, such fair
market value shall be determined reasonably and in good faith by the board of
directors or other governing body of the issuer of such Disqualified Capital
Stock), (ix) the net termination obligations of such Person under any Hedge
Agreements, calculated as of any date as if such agreement or arrangement were
terminated as of such date, (x) all Contingent Obligations of such Person and
(xi) all indebtedness referred to in clauses (i) through (x) above secured by
any Lien on any property or asset owned or held by such Person regardless of
whether the indebtedness secured thereby shall have been assumed by such Person
or is nonrecourse to the credit of such Person.

        “Insurance Code” shall mean, with respect to any Insurance Subsidiary,
the insurance code of any state where such Insurance Subsidiary is domiciled or
conducting business, as amended from time to time, and any successor statute,
together with all rules and regulations from time to time promulgated
thereunder.

        “Insurance Regulatory Authority” shall mean, with respect to any
Insurance Subsidiary, the insurance department or similar Governmental Authority
charged with regulating insurance companies or insurance holding companies, in
its jurisdiction of domicile and, to the extent that it has regulatory authority
over such Insurance Subsidiary, in each other jurisdiction in which such
Insurance Subsidiary conducts business or is licensed to conduct business.

        “Insurance Subsidiary” shall mean Everest Re, Everest National, Everest
Indemnity, Everest Security and any other Subsidiary of the Borrower the ability
of which to pay dividends is regulated by an Insurance Regulatory Authority or
that is otherwise required to be regulated thereby in accordance with the
applicable Requirements of Law of its jurisdiction of domicile.

        “Interest Coverage Ratio” shall mean, as of the last day of any period
of four consecutive fiscal quarters (the “Measurement Period”), the ratio of:

    (i)        the sum (without duplication) of (A) the Available Dividend
Amount for the Measurement Period for Everest Re, (B) the Net Tax Sharing
Payments with respect to the Measurement Period, (C) the Combined Net Cash Flow
(whether positive or negative) for the Measurement Period, (D) refunds received
by the Borrower during such Measurement Period relating to tax payments made by
Borrower in respect of taxable income and (E) the net cash proceeds received
during the Measurement Period from Investments made by the Borrower (but not a
Subsidiary of the Borrower) permitted hereunder, minus Holding Company Expenses
accrued during such Measurement Period, to

    (ii)        the sum (without duplication) of (A) Consolidated Interest
Expense and (B) dividends to be paid on Trust Preferred Securities, each as
projected for the four consecutive fiscal quarters immediately following the
date of determination.

        “Interest Period” shall have the meaning given to such term in Section
2.9.

        “Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.

        “Lending Office” shall mean, with respect to any Lender, the office of
such Lender designated as its “Lending Office” on its signature page hereto or
in an Assignment and Acceptance, or such other office as may be otherwise
designated in writing from time to time by such Lender to the Borrower and the
Administrative Agent. A Lender may designate separate Lending Offices as
provided in the foregoing sentence for the purposes of making or maintaining
different Types of Loans, and, with respect to LIBOR Loans, such office may be a
domestic or foreign branch or Affiliate of such Lender.

        “LIBOR Loan” shall mean, at any time, any Loan that bears interest at
such time at the Adjusted LIBOR Rate.

        “LIBOR Rate” shall mean, with respect to each LIBOR Loan comprising part
of the same Borrowing for any Interest Period, an interest rate per annum
obtained by dividing (i)(y) the rate of interest (rounded upward, if necessary,
to the nearest 1/16 of one percentage point) appearing on Telerate Page 3750 (or
any successor page) or (z) if no such rate is available, the rate of interest
determined by the Administrative Agent to be the rate or the arithmetic mean of
rates (rounded upward, if necessary, to the nearest 1/16 of one percentage
point) at which Dollar deposits in immediately available funds are offered by
Wachovia to first-tier banks in the London interbank Eurodollar market, in each
case under (y) and (z) above at approximately 11:00 a.m., London time, two (2)
Business Days prior to the first day of such Interest Period for a period
substantially equal to such Interest Period and in an amount substantially equal
to the amount of Wachovia’s LIBOR Loan comprising part of such Borrowing, by
(ii) the amount equal to 1.00 minus the Reserve Requirement (expressed as a
decimal) for such Interest Period.

        “Licenses” shall have the meaning given to such term in Section 4.4(c).

        “Lien” shall mean any mortgage, pledge, hypothecation, assignment,
security interest, lien (statutory or otherwise), preference, priority, charge
or other encumbrance of any nature, whether voluntary or involuntary, including,
without limitation, the interest of any vendor or lessor under any conditional
sale agreement, title retention agreement, capital lease or any other lease or
arrangement having substantially the same effect as any of the foregoing.

        “Loans” shall have the meaning given to such term in Section 2.1.

        “Margin Stock” shall have the meaning given to such term in Regulation
U.

        “Material Adverse Change” shall mean a material adverse change in the
financial condition, operations, business, properties or assets of the Borrower
and its Subsidiaries, taken as a whole.

        “Material Adverse Effect” shall mean a material adverse effect upon
(i) the financial condition, operations, business, properties or assets of the
Borrower and its Subsidiaries, taken as a whole, (ii) the ability of the
Borrower to perform its payment or other material obligations under this
Agreement or any of the other Credit Documents or (iii) the legality, validity
or enforceability of this Agreement or any of the other Credit Documents or the
rights and remedies of the Administrative Agent and the Lenders hereunder and
thereunder.

        “Material Insurance Subsidiary” shall mean any Insurance Subsidiary that
is a Material Subsidiary.

        “Material Subsidiary” shall mean each of (i) Everest Re and (ii) at the
relevant time of determination, any Subsidiary having (after the elimination of
intercompany accounts) (y) in the case of a non-Insurance Subsidiary, (A) assets
constituting at least ten percent (10%) of the total assets of Borrower and its
Subsidiaries on a consolidated basis, (B) revenues for the four quarters most
recently ended constituting at least ten percent (10%) of the total revenues of
Borrower and its Subsidiaries on a consolidated basis, or (C) Net Income for the
four quarters most recently ended constituting at least ten percent (10%) of the
Consolidated Net Income of Borrower and its Subsidiaries, in each case
determined in accordance with GAAP as of the date of the GAAP financial
statements of Borrower and its Subsidiaries most recently delivered under
Section 5.1 prior to such time (or, with regard to determinations at any time
prior to the initial delivery of financial statements under Section 5.1, as of
the date of the most recent financial statements referred to in
Section 4.11(a)), or (z) in the case of an Insurance Subsidiary, (A) assets
constituting at least ten percent (10%) of the aggregate assets of all the
Borrower’s Insurance Subsidiaries, or (B) Gross Written Premiums for the four
quarters most recently ended constituting at least ten percent (10%) of the
aggregate Gross Written Premiums (without duplication) of all the Borrower’s
Insurance Subsidiaries, in each case determined in accordance with SAP as of the
date of the statutory financial statements most recently delivered under Section
5.2 prior to such time (or, with regard to determinations at any time prior to
the initial delivery of financial statements under Section 5.2, as of the date
of the most recent financial statements referred to in Section 4.11(a)) and
(iii) any Subsidiary that has one of the foregoing as a Subsidiary.

        “Maturity Date” shall mean the third anniversary of the Closing Date.

        “Moody’s” shall mean Moody’s Investors Service, Inc., and its successors
and assigns.

        “Multiemployer Plan” shall mean any “multiemployer plan” within the
meaning of Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate makes, is making or is obligated to make contributions or has made or
been obligated to make contributions.

        “NAIC” shall mean the National Association of Insurance Commissioners
and any successor thereto.

        “Net Income” shall mean, with respect to any Person for any period, the
net income (or loss), after extraordinary items, taxes and all other items of
expense and income of such Person for such period, determined in accordance with
GAAP.

        “Net Tax Sharing Payments” shall mean, for any period, (i) the aggregate
(without duplication) of all payments made or to be made to the Borrower by its
Subsidiaries pursuant to tax sharing or tax allocation agreements or
arrangements or otherwise in respect of taxable income realized during such
period, minus (ii) the aggregate (without duplication) of all foreign, federal,
state or local income, franchise and other tax payments made or to be made by
the Borrower in respect of taxable income realized during such period and any
payments made or to be made by the Borrower during such period pursuant to such
tax sharing or tax allocation agreement or arrangement. For purposes of the
Interest Coverage Ratio, if the amount in clause (ii) exceeds the amount in
clause (i) hereof, the result shall be expressed as a negative amount.

        “Notes” shall mean the promissory notes of the Borrower in substantially
the form of Exhibit A, together with any amendments, modifications and
supplements thereto, substitutions therefor and restatements thereof.

        “Notice of Borrowing” shall have the meaning given to such term in
Section 2.2(b).

        “Notice of Conversion/Continuation” shall have the meaning given to such
term in Section 2.10(b).

        “Obligations” shall mean all principal of and interest (including, to
the greatest extent permitted by law, post-petition interest) on the Loans and
all fees, expenses, indemnities and other obligations owing, due or payable at
any time by the Borrower to the Administrative Agent, any Lender or any other
Person entitled thereto, under this Agreement or any of the other Credit
Documents.

        “Participant” shall have the meaning given to such term in Section
10.7(d).

        “PBGC” shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.

        “Permitted Liens” shall have the meaning given to such term in Section
7.3.

        “Person” shall mean any corporation, association, joint venture,
partnership, limited liability company, organization, business, individual,
trust, government or agency or political subdivision thereof or any other legal
entity.

        “Plan” shall mean any “employee pension benefit plan” within the meaning
of Section 3(2) of ERISA that is subject to the provisions of Title IV of ERISA
(other than a Multiemployer Plan) and to which the Borrower or any ERISA
Affiliate may have any liability.

        “Prohibited Transaction” shall mean any transaction described in
(i) Section 406 of ERISA that is not exempt by reason of Section 408 of ERISA or
by reason of a Department of Labor prohibited transaction individual or class
exemption or (ii) Section 4975(c) of the Internal Revenue Code that is not
exempt by reason of Section 4975 (c)(2) or 4975(d) of the Internal Revenue Code.

        “Projections” shall have the meaning given to such term in
Section 4.11(b).

        “Quarterly Statement” shall mean, with respect to any Insurance
Subsidiary for any fiscal quarter, the quarterly financial statements of such
Insurance Subsidiary as required to be filed with the Insurance Regulatory
Authority of its jurisdiction of domicile, together with all exhibits,
schedules, certificates and actuarial opinions required to be filed or delivered
therewith.

        “Register” shall have the meaning given to such term in Section 10.7(b).

        “Regulations D, T, U and X” shall mean Regulations D, T, U and X,
respectively, of the Federal Reserve Board, and any successor regulations.

        “Reinsurance Agreement” shall mean any agreement, contract, treaty,
certificate or other arrangement whereby any Insurance Subsidiary agrees to
transfer, cede or retrocede to another insurer or reinsurer all or part of the
liability assumed or assets held by such Insurance Subsidiary under a policy or
policies of insurance issued by such Insurance Subsidiary or under a reinsurance
agreement assumed by such Insurance Subsidiary.

        “Reportable Event” shall mean (i) any “reportable event” within the
meaning of Section 4043(c) of ERISA for which the 30-day notice under Section
4043(a) of ERISA has not been waived by the PBGC (including any failure to meet
the minimum funding standard of, or timely make any required installment under,
Section 412 of the Internal Revenue Code or Section 302 of ERISA, regardless of
the issuance of any waivers in accordance with Section 412(d) of the Internal
Revenue Code), (ii) any such “reportable event” subject to advance notice to the
PBGC under Section 4043(b)(3) of ERISA, (iii) any application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of the
Internal Revenue Code, and (iv) a cessation of operations described in Section
4062(e) of ERISA.

        “Required Lenders” shall mean the Lenders holding outstanding Loans and
Unutilized Commitments (or, after the termination of the Commitments,
outstanding Loans) representing more than fifty percent (50%) of the aggregate
at such time of all outstanding Loans and Unutilized Commitments (or, after the
termination of the Commitments, the aggregate at such time of all outstanding
Loans).

        “Requirement of Law” shall mean, with respect to any Person, the
charter, articles or certificate of organization or incorporation and bylaws or
other organizational or governing documents of such Person, and any statute,
law, treaty, rule, regulation, order, decree, writ, injunction or determination
of any arbitrator or court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject or otherwise pertaining to any or
all of the transactions contemplated by this Agreement and the other Credit
Documents.

        “Reserve Requirement” shall mean, with respect to any Interest Period,
the reserve percentage (expressed as a decimal) in effect from time to time
during such Interest Period, as provided by the Federal Reserve Board, applied
for determining the maximum reserve requirements (including, without limitation,
basic, supplemental, marginal and emergency reserves) applicable to Wachovia
under Regulation D with respect to “Eurocurrency liabilities” within the meaning
of Regulation D, or under any similar or successor regulation with respect to
Eurocurrency liabilities or Eurocurrency funding.

        “Responsible Officer” shall mean, with respect to the Borrower, the
president, the chief executive officer, the chief financial officer, any
executive officer or any other Financial Officer of the Borrower, and any other
officer or similar official thereof responsible for the administration of the
obligations of the Borrower in respect of this Agreement.

        “SAP” shall mean, with respect to any Insurance Subsidiary, the
statutory accounting practices prescribed or permitted by the relevant Insurance
Regulatory Authority of its jurisdiction of domicile, consistently applied and
maintained and in conformity with those used in the preparation of the most
recent Historical Statutory Statements.

        “Standard & Poor’s” shall mean Standard & Poor’s Ratings Services, a
division of The McGraw Hill Companies, Inc. and its successors and assigns.

        “Statutory Surplus” shall mean, as to Everest Re, at any time, the
amount shown on its most recent Quarterly Statement or Annual Statement.

        “Subsidiary” shall mean, with respect to any Person, any corporation or
other Person of which more than fifty percent (50%) of the outstanding Capital
Stock having ordinary voting power to elect a majority of the board of
directors, board of managers or other governing body of such Person, is at the
time, directly or indirectly, owned or controlled by such Person and one or more
of its other Subsidiaries or a combination thereof (irrespective of whether, at
the time, securities of any other class or classes of any such corporation or
other Person shall or might have voting power by reason of the happening of any
contingency). When used without reference to a parent entity, the term
“Subsidiary” shall be deemed to refer to a Subsidiary of the Borrower.

        “Terminating Senior Indebtedness” shall mean all Indebtedness of the
Borrower under the Existing Credit Agreement.

        “Termination Date” shall mean the Maturity Date or such earlier date of
termination of the Commitments pursuant to Section 2.5 or Section 8.2.

        “Total Capitalization” shall mean, as of any date of determination, the
sum of (i) Consolidated Net Worth as of such date, (ii) Consolidated
Indebtedness as of such date (excluding, to the extent otherwise included, the
Trust Preferred Securities) and (iii) the aggregate redemption value of all
Trust Preferred Securities.

        “Trust Preferred Securities” shall mean the 7.85% Trust Preferred
Securities issued by Everest Re Capital Trust and any other preferred securities
offered by a special purpose business trust of which the Borrower or any of its
respective Subsidiaries is the grantor, the proceeds of which are or have been
used principally to purchase subordinated debentures issued by the Borrower or
any Subsidiary of the Borrower.

        “Type” shall have the meaning given to such term in Section 2.2(a).

        “Unfunded Pension Liability” shall mean, with respect to any Plan or
Multiemployer Plan, the excess of its benefit liabilities under Section
4001(a)(16) of ERISA over the current value of its assets, determined in
accordance with the applicable assumptions used for funding under Section 412 of
the Internal Revenue Code for the applicable plan year.

        “Unutilized Commitment” shall mean, with respect to any Lender at any
time, such Lender’s Commitment at such time less the aggregate principal amount
of all Loans made by such Lender that are outstanding at such time.

        “Wholly Owned” shall mean, with respect to any Subsidiary of any Person,
that 100% of the outstanding Capital Stock of such Subsidiary is owned, directly
or indirectly, by such Person.

        1.2 Accounting Terms. Except as specifically provided otherwise in this
Agreement, all accounting terms used herein that are not specifically defined
shall have the meanings customarily given them, and all financial computations
hereunder shall be made, in accordance with GAAP (or, to the extent that such
terms apply solely to any Insurance Subsidiary or if otherwise expressly
required, SAP). Notwithstanding the foregoing, in the event that any changes in
GAAP or SAP after the date hereof are required to be applied to the transactions
described herein and would affect the computation of the financial covenants
contained in ARTICLE VI as applicable, such changes shall be followed only from
and after the date this Agreement shall have been amended to take into account
any such changes.

        1.3 Other Terms; Construction. Unless otherwise specified or unless the
context otherwise requires, all references herein to sections, annexes,
schedules and exhibits are references to sections, annexes, schedules and
exhibits in and to this Agreement, and all terms defined in this Agreement shall
have the defined meanings when used in any other Credit Document or any
certificate or other document made or delivered pursuant hereto.

ARTICLE II

AMOUNT AND TERMS OF THE LOANS

        2.1 Commitments. Each Lender severally agrees, subject to and on the
terms and conditions of this Agreement, to make loans (each, a “Loan,” and
collectively, the “Loans”) to the Borrower, from time to time on any Business
Day during the period from and including the Closing Date to but not including
the Termination Date, in an aggregate principal amount at any time outstanding
not greater than its Commitment at such time; provided that no Borrowing of
Loans shall be made if, immediately after giving effect thereto, the aggregate
principal amount of Loans outstanding at such time would exceed the aggregate
Commitments at such time. Subject to and on the terms and conditions of this
Agreement, the Borrower may borrow, repay and reborrow Loans.

        2.2 Borrowings.

        (a) The Loans shall, at the option of the Borrower and subject to the
terms and conditions of this Agreement, be either Base Rate Loans or LIBOR Loans
(each, a “Type” of Loan). [Discuss LIBOR Borrowings at Closing]

        (b) In order to make a Borrowing (other than Borrowings involving
continuations or conversions of outstanding Loans, which shall be made pursuant
to Section 2.10), the Borrower will give the Administrative Agent written notice
not later than 11:00 a.m., Charlotte time, three (3) Business Days prior to each
Borrowing to be comprised of LIBOR Loans and not later than 10:00 a.m.,
Charlotte time, on the same Business Day prior to each Borrowing of Base Rate
Loans; provided, however, that requests for the Borrowing of any Loans to be
made on the Closing Date may, at the discretion of the Administrative Agent, be
given later than the times specified hereinabove. Each such notice (each, a
“Notice of Borrowing”) shall be irrevocable, shall be given in the form of
Exhibit B-1 and shall specify (1) the aggregate principal amount and initial
Type of the Loans to be made pursuant to such Borrowing, (2) in the case of a
Borrowing of LIBOR Loans, the initial Interest Period to be applicable thereto,
and (3) the requested Borrowing Date, which shall be a Business Day. Upon its
receipt of a Notice of Borrowing, the Administrative Agent will promptly notify
each Lender of the proposed Borrowing. Notwithstanding anything to the contrary
contained herein:

          (i) the aggregate principal amount of each Borrowing shall not be less
than $3,000,000 or, if greater, an integral multiple of $1,000,000in excess
thereof (or, if less, in the amount of the aggregate Unutilized Commitments);

          (ii) if the Borrower shall have failed to designate the Type of Loans
comprising a Borrowing, the Borrower shall be deemed to have requested a
Borrowing comprised of Base Rate Loans; and

          (iii) if the Borrower shall have failed to select the duration of the
Interest Period to be applicable to any Borrowing of LIBOR Loans, then the
Borrower shall be deemed to have selected an Interest Period with a duration of
one month.

        (c) Not later than 1:00 p.m., Charlotte time, on the requested Borrowing
Date, each Lender will make available to the Administrative Agent at its office
referred to in Section 10.5 (or at such other location as the Administrative
Agent may designate) an amount, in Dollars and in immediately available funds,
equal to the amount of the Loan to be made by such Lender. To the extent the
Lenders have made such amounts available to the Administrative Agent as provided
hereinabove, the Administrative Agent will make the aggregate of such amounts
available to the Borrower in accordance with Section 2.3(a) and in like funds as
received by the Administrative Agent.

        2.3 Disbursements; Funding Reliance; Domicile of Loans.

        (a)     The Borrower hereby authorizes the Administrative Agent to
disburse the proceeds of each Borrowing in accordance with the terms of any
written instructions from any of the Authorized Officers; provided that the
Administrative Agent shall not be obligated under any circumstances to forward
amounts to any account not listed in an Account Designation Letter.

        (b)     Unless the Administrative Agent has received, prior to 1:00
p.m., Charlotte time, on the relevant Borrowing Date, written notice from a
Lender that such Lender will not make available to the Administrative Agent such
Lender’s ratable portion of the relevant Borrowing, the Administrative Agent may
assume that such Lender has made such portion available to the Administrative
Agent in immediately available funds on such Borrowing Date in accordance with
the applicable provisions of Section 2.2, and the Administrative Agent may, in
reliance upon such assumption, but shall not be obligated to, make a
corresponding amount available to the Borrower on such Borrowing Date. If and to
the extent that such Lender shall not have made such portion available to the
Administrative Agent, and the Administrative Agent shall have made such
corresponding amount available to the Borrower, such Lender, on the one hand,
and the Borrower, on the other, severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount, together with interest
thereon for each day from the date such amount is made available to the Borrower
until the date such amount is repaid to the Administrative Agent, (i) in the
case of such Lender, at the Federal Funds Rate, and (ii) in the case of the
Borrower, at the rate of interest applicable at such time to the Type of Loans
comprising such Borrowing, as determined under the provisions of Section 2.7. If
such Lender shall repay to the Administrative Agent such corresponding amount,
such amount shall constitute such Lender’s Loan as part of such Borrowing for
purposes of this Agreement. The failure of any Lender to make any Loan required
to be made by it as part of any Borrowing shall not relieve any other Lender of
its obligation, if any, hereunder to make its Loan as part of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Loan to be made by such other Lender as part of any Borrowing.

        (c)     Each Lender may, at its option, make and maintain any Loan at,
to or for the account of any of its Lending Offices; provided that any exercise
of such option shall not affect the obligation of the Borrower to repay such
Loan to or for the account of such Lender in accordance with the terms of this
Agreement.

        (d)     The Borrower may at any time deliver to the Administrative Agent
an Account Designation Letter listing any additional accounts or deleting any
accounts listed in a previous Account Designation Letter.

        2.4 Notes. (a)     The Loans made by each Lender shall be evidenced by a
Note appropriately completed in substantially the form of Exhibit A.

        (b)     Each Note issued to a Lender shall (i) be executed by the
Borrower, (ii) be payable to the order of such Lender, (iii) be dated as of the
Closing Date (or, in the case of a Note issued after the Closing Date, dated the
effective date of the applicable Assignment and Acceptance), (iv) be in a stated
principal amount equal to such Lender’s Commitment, (v) bear interest in
accordance with the provisions of Section 2.7, as the same may be applicable
from time to time to the Loans made by such Lender, and (vi) be entitled to all
of the benefits of this Agreement and the other Credit Documents and subject to
the provisions hereof and thereof.

        (c)     Each Lender will record on its internal records the amount and
Type of each Loan made by it and each payment received by it in respect thereof
and will, in the event of any transfer of its Note, either endorse on the
reverse side thereof or on a schedule attached thereto (or any continuation
thereof) the outstanding principal amount and Type of the Loans evidenced
thereby as of the date of transfer or provide such information on a schedule to
the Assignment and Acceptance relating to such transfer; provided, however, that
the failure of any Lender to make any such recordation or provide any such
information, or any error therein, shall not affect the Borrower’s obligations
under this Agreement or the Notes.

        2.5 Termination and Reduction of Commitments.

        (a)     The Commitments shall be automatically and permanently
terminated on the Termination Date.

        (b)     At any time and from time to time after the date hereof, upon
not less than five (5) Business Days’ prior written notice to the Administrative
Agent, the Borrower may terminate in whole or reduce in part the aggregate
Unutilized Commitments; provided that any such partial reduction shall be in an
aggregate amount of not less than $5,000,000 or, if greater, an integral
multiple thereof. The amount of any termination or reduction made under this
subsection (b) may not thereafter be reinstated.

        (c)     Each reduction of the Commitments pursuant to this Section 2.5
shall be applied ratably among the Lenders according to their respective
Commitments

        2.6 Mandatory and Voluntary Payments and Prepayments.

        (a)     Except to the extent due or paid sooner pursuant to the
provisions of this Agreement, the aggregate outstanding principal of the Loans
shall be due and payable in full on the Maturity Date.

        (b)     In the event that, at any time, the aggregate principal amount
of Loans outstanding at such time shall exceed the aggregate Commitments at such
time (after giving effect to any concurrent termination or reduction thereof),
the Borrower will immediately prepay the outstanding principal amount of the
Loans in the amount of such excess.

        (c)     At any time and from time to time, the Borrower shall have the
right to prepay the Loans, in whole or in part, together with accrued interest
to the date of prepayment, without premium or penalty (except as provided in
clause (iii) below), upon written notice given to the Administrative Agent not
later than 11:00 a.m., Charlotte time, three (3) Business Days prior to each
intended prepayment of LIBOR Loans and one (1) Business Day prior to each
intended prepayment of Base Rate Loans; provided that (i) each partial
prepayment shall be in an aggregate principal amount of not less than $1,000,000
or, if greater, an integral multiple of $500,000 in excess thereof, (ii) no
partial prepayment of LIBOR Loans made pursuant to any single Borrowing shall
reduce the aggregate outstanding principal amount of the remaining LIBOR Loans
under such Borrowing to less than $3,000,000 or to any greater amount not an
integral multiple of $1,000,000 in excess thereof, and (iii) unless made
together with all amounts required under Section 2.17 to be paid as a
consequence of such prepayment, a prepayment of a LIBOR Loan may be made only on
the last day of the Interest Period applicable thereto. Each such notice shall
specify the proposed date of such prepayment and the aggregate principal amount
and Type of the Loans to be prepaid (and, in the case of LIBOR Loans, the
Interest Period of the Borrowing pursuant to which made), and shall be
irrevocable and shall bind the Borrower to make such prepayment on the terms
specified therein. Amounts prepaid pursuant to this subsection(c) may be
reborrowed, subject to the terms and conditions of this Agreement.

        (d)     Each payment or prepayment of LIBOR Loans made pursuant to the
provisions of this Section 2.6 on a day other than the last day of the Interest
Period applicable thereto shall be made together with all amounts required under
Section 2.17 to be paid as a consequence thereof.

        (e)     Each prepayment of the Loans made pursuant to this Section 2.6
shall be applied ratably among the Lenders holding the Loans being prepaid, in
proportion to the principal amount held by each.

        2.7 Interest.

        (a) The Borrower will pay interest in respect of the unpaid principal
amount of each Loan, from the date of Borrowing thereof until such principal
amount shall be paid in full, (i) at the Base Rate, as in effect from time to
time during such periods as such Loan is a Base Rate Loan, and (ii) at the
Adjusted LIBOR Rate, as in effect from time to time during such periods as such
Loan is a LIBOR Loan.

        (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 maturity, pursuant to acceleration or otherwise, all
outstanding principal amounts of the Loans and, to the greatest extent permitted
by law, all interest accrued on the Loans, shall bear interest, after as well as
before judgment, at a rate per annum equal to the interest rate applicable from
time to time thereafter to such Loans (whether the Base Rate or the Adjusted
LIBOR Rate) plus 2% (or, in the case of fees and other amounts, at the Base Rate
plus 2%), and, in each case, such default interest shall be payable on demand.
To the greatest extent permitted by law, interest shall continue to accrue after
the filing by or against the Borrower of any petition seeking any relief in
bankruptcy or under any law pertaining to insolvency or debtor relief.

        (c) Accrued (and theretofore unpaid) interest shall be payable as
follows:

          (i) in respect of each Base Rate Loan (including any Base Rate Loan or
portion thereof paid or prepaid pursuant to the provisions of Section 2.6 except
as provided hereinbelow) in arrears on the last Business Day of each calendar
quarter, beginning with the first such day to occur after the Closing Date;
provided, that in the event the Loans are repaid or prepaid in full and the
Commitments have been terminated, then accrued interest in respect of all Base
Rate Loans shall be payable together with such repayment or prepayment on the
date thereof;

          (ii) in respect of each LIBOR Loan (including any LIBOR Loan or
portion thereof paid or prepaid pursuant to the provisions of Section 2.6,
except as provided hereinbelow), in arrears (y) on the last Business Day of the
Interest Period applicable thereto (subject to the provisions of clause (iv) in
Section 2.9) and (z) in addition, in the case of a LIBOR Loan with an Interest
Period having a duration of six months or longer, on each date on which interest
would have been payable under clause (y) above had successive Interest Periods
of three months’ duration been applicable to such LIBOR Loan; provided, that in
the event all LIBOR Loans made pursuant to a single Borrowing are repaid or
prepaid in full, then accrued interest in respect of such LIBOR Loans shall be
payable together with such repayment or prepayment on the date thereof; and

          (iii) in respect of any Loan, at maturity (whether pursuant to
acceleration or otherwise) and, after maturity, on demand.

        (d) Nothing contained in this Agreement or in any other Credit Document
shall be deemed to establish or require the payment of interest to any Lender at
a rate in excess of the maximum rate permitted by applicable law. If the amount
of interest payable for the account of any Lender on any interest payment date
would exceed the maximum amount permitted by applicable law to be charged by
such Lender, the amount of interest payable for its account on such interest
payment date shall be automatically reduced to such maximum permissible amount.
In the event of any such reduction affecting any Lender, if from time to time
thereafter the amount of interest payable for the account of such Lender on any
interest payment date would be less than the maximum amount permitted by
applicable law to be charged by such Lender, then the amount of interest payable
for its account on such subsequent interest payment date shall be automatically
increased to such maximum permissible amount; provided that at no time shall the
aggregate amount by which interest paid for the account of any Lender has been
increased pursuant to this sentence exceed the aggregate amount by which
interest paid for its account has theretofore been reduced pursuant to the
previous sentence.

        (e) The Agent shall promptly notify the Borrower and the Lenders upon
determining the interest rate for each Borrowing of LIBOR Loans after its
receipt of the relevant Notice of Borrowing or Notice of
Conversion/Continuation, and upon each change in the Base Rate; provided,
however, that the failure of the Agent to provide the Borrower or the Lenders
with any such notice shall neither affect any obligations of the Borrower or the
Lenders hereunder nor result in any liability on the part of the Agent to the
Borrower or any Lender. Each such determination (including each determination of
the Reserve Requirement) shall, absent demonstrable error, be conclusive and
binding on all parties hereto.

        2.8 Fees. The Borrower agrees to pay:

        (a)     To the Arranger, for its own account, on the date of execution
of this Agreement, the fees described in paragraphs (1) and (2) of the Fee
Letter, in the amounts set forth therein as due and payable on such date and to
the extent not theretofore paid to it;

        (b)     To the Administrative Agent, for the account of each Lender, a
commitment fee for each calendar quarter (or portion thereof) for the period
from the date of this Agreement to the Termination Date, at a per annum rate
equal to the Applicable Margin Percentage in effect for such fee from time to
time during such quarter, on such Lender’s ratable share (based on the
proportion that its Commitment bears to the aggregate Commitments) of the
average daily aggregate Unutilized Commitments, payable in arrears (i) on the
last Business Day of each calendar quarter, beginning with the first such day to
occur after the Closing Date, and (ii) on the Termination Date;

        (c)     To the Administrative Agent, for its own account, the annual
administrative fee described in paragraph (3) of the Fee Letter, on the terms,
in the amount and at the times set forth therein; and

        (d)     To the Administrative Agent, for the account of each Lender, a
utilization fee in respect of the unpaid principal amount of each Loan, at a per
annum rate equal to the Applicable Margin Percentage in effect for such fee from
time to time payable in accordance with Section2.7(c) at any time when the
aggregate principal amount of Loans outstanding exceeds 50% of the aggregate
Commitments.

        2.9 Interest Periods. Concurrently with the giving of a Notice of
Borrowing in the case of a Borrowing of LIBOR Loans or a Notice of
Conversion/Continuation in respect of any Borrowing comprised of Base Rate Loans
to be converted into, or LIBOR Loans to be continued as, LIBOR Loans, the
Borrower shall have the right to elect, pursuant to such notice, the interest
period (each, an “Interest Period”) to be applicable to such LIBOR Loans, which
Interest Period shall, at the option of the Borrower, be a one, two, three or
six-month period; provided, however, that:

          (i) all LIBOR Loans comprising a single Borrowing shall at all times
have the same Interest Period;

          (ii) the initial Interest Period for any LIBOR Loan shall commence on
the date of the Borrowing of such LIBOR Loan (including the date of any
continuation of, or conversion into, such LIBOR Loan), and each successive
Interest Period applicable to such LIBOR Loan shall commence on the day on which
the next preceding Interest Period applicable thereto expires;

          (iii) LIBOR Loans may not be outstanding under more than seven (7)
separate Interest Periods at any one time (for which purpose Interest Periods
shall be deemed to be separate even if they are coterminous);

          (iv) if any Interest Period otherwise would expire on a day that is
not a Business Day, such Interest Period shall expire on the next succeeding
Business Day unless such next succeeding Business Day falls in another calendar
month, in which case such Interest Period shall expire on the next preceding
Business Day;

          (v) the Borrower may not select any Interest Period that expires after
the Maturity Date; and

          (vi) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month during which such Interest
Period would otherwise expire, such Interest Period shall expire on the last
Business Day of such calendar month.

        2.10 Conversions and Continuations.

        (a)     The Borrower shall have the right, on any Business Day, to elect
(i) to convert all or a portion of the outstanding principal amount of any Base
Rate Loans into LIBOR Loans, or to convert any LIBOR Loans the Interest Periods
for which end on the same day into Base Rate Loans, or (ii) upon the expiration
of any Interest Period, to continue all or a portion of the outstanding
principal amount of any LIBOR Loans the Interest Periods for which end on the
same day for an additional Interest Period; provided that (x) any such
conversion of LIBOR Loans into Base Rate Loans shall involve an aggregate
principal amount of not less than $1,000,000 or, if greater, an integral
multiple of $500,000 in excess thereof; any such conversion of Base Rate Loans
of the same Borrowing into, or continuation of LIBOR Loans shall involve an
aggregate principal amount of not less than $3,000,000 or, if greater, an
integral multiple of $1,000,000 in excess thereof; and no partial conversion of
LIBOR Loans of the same Borrowing shall reduce the outstanding principal amount
of such LIBOR Loans to less than $3,000,000 or to any greater amount not an
integral multiple of $1,000,000 in excess thereof, (y) except as otherwise
provided in Section 2.15(d), LIBOR Loans may be converted into Base Rate Loans
only on the last day of the Interest Period applicable thereto (and, in any
event, if a LIBOR Loan is converted into a Base Rate Loan on any day other than
the last day of the Interest Period applicable thereto, the Borrower will pay,
upon such conversion, all amounts required under Section 2.17 to be paid as a
consequence thereof) and (z) no conversion of Base Rate Loans into LIBOR Loans
or continuation of LIBOR Loans shall be permitted during the continuance of a
Default or Event of Default.

        (b)     The Borrower shall make each such election by giving the
Administrative Agent written notice not later than 11:00 a.m., Charlotte time,
three (3) Business Days prior to the intended effective date of any conversion
of Base Rate Loans into, or continuation of, LIBOR Loans and one (1) Business
Day prior to the intended effective date of any conversion of LIBOR Loans into
Base Rate Loans. Each such notice (each, a “Notice of Conversion/Continuation”)
shall be irrevocable, shall be given in the form of Exhibit B-2 and shall
specify (x) the date of such conversion or continuation (which shall be a
Business Day), (y) in the case of a conversion into, or a continuation of, LIBOR
Loans, the Interest Period to be applicable thereto, and (z) the aggregate
amount and Type of the Loans being converted or continued. Upon the receipt of a
Notice of Conversion/Continuation, the Administrative Agent will promptly notify
each Lender of the proposed conversion or continuation. In the event that the
Borrower shall fail to deliver a Notice of Conversion/Continuation as provided
herein with respect to any outstanding LIBOR Loans, such LIBOR Loans shall
automatically be converted to a LIBOR Loan having an Interest Period of one (1)
month; provided that if Borrower is not otherwise entitled to convert into or
continue a LIBOR Loan, then such LIBOR Loan shall automatically be converted to
a Base Rate Loan, in each case upon the expiration of the then current Interest
Period applicable thereto (unless repaid pursuant to the terms hereof).

        2.11 Method of Payments; Computations.

        (a)     All payments by the Borrower hereunder shall be made without
setoff, counterclaim or other defense, in Dollars and in immediately available
funds to the Administrative Agent, for the account of the Lenders entitled to
such payment (except as otherwise expressly provided herein as to payments
required to be made directly to the Lenders) at its office referred to in
Section 10.5, prior to 12:00 noon, Charlotte time, on the date payment is due.
Any payment made as required hereinabove, but after 12:00 noon, Charlotte time,
shall be deemed to have been made on the next succeeding Business Day. If any
payment falls due on a day that is not a Business Day, then such due date shall
be extended to the next succeeding Business Day (except that in the case of
LIBOR Loans to which the provisions of clause (iii) in Section 2.9 are
applicable, such due date shall be the next preceding Business Day), and such
extension of time shall then be included in the computation of payment of
interest, fees or other applicable amounts.

        (b)     The Administrative Agent will distribute to the Lenders like
amounts relating to payments made to the Administrative Agent for the account of
the Lenders as follows: (i) if the payment is received by 12:00 noon, Charlotte
time, in immediately available funds, the Administrative Agent will make
available to each relevant Lender on the same date, by wire transfer of
immediately available funds, such Lender’s ratable share of such payment (based
on the percentage that the amount of the relevant payment owing to such Lender
bears to the total amount of such payment owing to all of the relevant Lenders),
and (ii) if such payment is received after 12:00 noon, Charlotte time, or in
other than immediately available funds, the Administrative Agent will make
available to each such Lender its ratable share of such payment by wire transfer
of immediately available funds on the next succeeding Business Day (or in the
case of uncollected funds, as soon as practicable after collected). If the
Administrative Agent shall not have made a required distribution to the
appropriate Lenders as required hereinabove after receiving a payment for the
account of such Lenders, the Administrative Agent will pay to each such Lender,
on demand, its ratable share of such payment with interest thereon at the
Federal Funds Rate for each day from the date such amount was required to be
disbursed by the Administrative Agent until the date repaid to such Lender.

        (c)     Unless the Administrative Agent shall have received written
notice from the Borrower prior to the date on which any payment is due to any
Lender hereunder that such payment will not be made in full, the Administrative
Agent may assume that the Borrower has made such payment in full to the
Administrative Agent on such date, and the Administrative Agent may, in reliance
on such assumption, but shall not be obligated to, cause to be distributed to
such Lender on such due date an amount equal to the amount then due to such
Lender. If and to the extent the Borrower shall not have so made such payment in
full to the Administrative Agent, and without limiting the obligation of the
Borrower to make such payment in accordance with the terms hereof, such Lender
shall repay to the Administrative Agent forthwith on demand such amount so
distributed to such Lender, together with interest thereon for each day from the
date such amount is so distributed to such Lender until the date repaid to the
Administrative Agent, at the Federal Funds Rate.

        (d)     With respect to each payment hereunder, except as specifically
provided otherwise herein or in any of the other Credit Documents, the Borrower
may designate by written notice to the Administrative Agent prior to or
concurrently with such payment the specific Loans or other Obligations that are
to be paid, repaid or prepaid; provided that unless made together with all
amounts required under Section 2.17 to be paid as a consequence thereof, a
prepayment of a LIBOR Loan may be made only on the last day of the Interest
Period applicable thereto. In the absence of any such designation by the
Borrower, or if an Event of Default has occurred and is continuing, the
Administrative Agent shall make such designation in its sole discretion subject
to the foregoing and to the other provisions of this Agreement.

        (e)     All computations of interest and fees hereunder (including
computations of the Reserve Requirement), excluding the computation of interest
with respect to Base Rate Loans, shall be made on the basis of a year consisting
of 360 days and the actual number of days (including the first day, but
excluding the last day) elapsed. Interest on Base Rate Loans shall be computed
on the basis of a year of 365 or 366 days, as the case may be, and the actual
number of days (including the first day, but excluding the last day) elapsed.

        2.12 Recovery of Payments.

        (a)     The Borrower agrees that to the extent the Borrower makes a
payment or payments to or for the account of the Administrative Agent or any
Lender, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party under any bankruptcy,
insolvency or similar state or federal law, common law or equitable cause, then,
to the extent of such payment or repayment, the Obligation intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been received.

        If any amounts distributed by the Administrative Agent to any Lender are
subsequently returned or repaid by the Administrative Agent to the Borrower or
its representative or successor in interest, whether by court order or by
settlement approved by the Lender in question, such Lender will, promptly upon
receipt of notice thereof from the Administrative Agent, pay the Administrative
Agent such amount. If any such amounts are recovered by the Administrative Agent
from the Borrower or its representative or successor in interest, the
Administrative Agent will redistribute such amounts to the Lenders on the same
basis as such amounts were originally distributed.

        2.13 Use of Proceeds. The proceeds of the Loans shall be used (i) to
repay the Terminating Senior Indebtedness in full, (ii) to pay or reimburse
reasonable transaction fees and expenses in connection with the closing of the
transactions contemplated hereby, and (iii) to provide for the working capital,
liquidity needs and general corporate requirements of the Borrower and its
Subsidiaries.

        2.14 Pro Rata Treatment.

        (a)     All fundings, continuations and conversions of Loans shall be
made by the Lenders pro rata on the basis of their respective Commitments (in
the case of the initial funding of Loans pursuant to Section 2.2) or on the
basis of their respective outstanding Loans (in the case of continuations and
conversions of Loans pursuant to Section 2.10, and additionally in all cases in
the event the Commitments have expired or have been terminated), as the case may
be from time to time. All payments on account of principal of or interest on any
Loans, fees or any other Obligations owing to or for the account of any one or
more Lenders shall be apportioned ratably among such Lenders in proportion to
the amounts of such principal, interest, fees or other Obligations owed to them
respectively.

        (b)     Each Lender agrees that if it shall receive any amount hereunder
(whether by voluntary payment, realization upon security, exercise of the right
of setoff or banker’s lien, counterclaim or cross action, or otherwise, other
than pursuant to Section 2.15, 2.16, 2.17 or 10.7) applicable to the payment of
any of the Obligations that exceeds its ratable share (according to the
proportion of (i) the amount of such Obligations due and payable to such Lender
at such time to (ii) the aggregate amount of such Obligations due and payable to
all Lenders at such time) of payments on account of such Obligations then or
therewith obtained by all the Lenders to which such payments are required to
have been made, such Lender shall forthwith purchase from the other Lenders such
participations in such Obligations as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery ratably with
each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each such other Lender shall be rescinded and each such other Lender shall repay
to the purchasing Lender the purchase price to the extent of such recovery,
together with an amount equal to such other Lender’s ratable share (according to
the proportion of (i) the amount of such other Lender’s required repayment to
(ii) the total amount so recovered from the purchasing Lender) of any interest
or other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to the provisions of this subsection
(b) may, to the fullest extent permitted by law, exercise any and all rights of
payment (including, without limitation, setoff, banker’s lien or counterclaim)
with respect to such participation as fully as if such participant were a direct
creditor of the Borrower in the amount of such participation. If under any
applicable bankruptcy, insolvency or similar law, any Lender receives a secured
claim in lieu of a setoff to which this subsection (b) applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Lenders entitled under this
subsection (b) to share in the benefits of any recovery on such secured claim.

        2.15 Increased Costs; Change in Circumstances; Illegality; etc.

        (a)     If the introduction of or any change in any applicable law, rule
or regulation or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, in each case after the date hereof, or compliance by any Lender with
any guideline or request from any such Governmental Authority (whether or not
having the force of law) given or made after the date hereof, shall (i) subject
such Lender to any tax or other charge, or change the basis of taxation of
payments to such Lender, in respect of any of its LIBOR Loans or any other
amounts payable hereunder or its obligation to make, fund or maintain any LIBOR
Loans (other than any change in the rate or basis of tax on the overall net
income of such Lender or its applicable Lending Office), (ii) impose, modify or
deem applicable any reserve, special deposit or similar requirement (but
excluding any reserves to the extent actually included within the Reserve
Requirement in the calculation of the LIBOR Rate) against assets of, deposits
with or for the account of, or credit extended by, such Lender or its applicable
Lending Office, or (iii) impose on such Lender or its applicable Lending Office
any other condition, and the result of any of the foregoing shall be to increase
the cost to such Lender of making or maintaining any LIBOR Loans or to reduce
the amount of any sum received or receivable by such Lender hereunder, the
Borrower will, promptly upon demand therefor by such Lender, pay to such Lender
such additional amounts as shall compensate such Lender for such increase in
costs or reduction in return; provided that the Borrower shall not be obligated
to pay any such amount or amounts (i) unless such Lender shall have first
notified the Borrower in writing that it intends to seek compensation pursuant
to this Section 2.15(a) and (ii) which are attributable to any period of time
occurring more than 90 days prior to the date of receipt by the Borrower of the
notice provided for in the preceding clause (i); providedfurther that if the
event or circumstance requiring such compensation is retroactive, then the
90-day period referred to above shall be extended to include the period of
retroactive effect thereof.

        (b)     If any Lender shall have reasonably determined that the
introduction of or any change in any applicable law, rule or regulation
regarding capital adequacy or in the interpretation or administration thereof by
any Governmental Authority charged with the interpretation or administration
thereof, in each case after the date hereof, or compliance by such Lender with
any guideline or request from any such Governmental Authority (whether or not
having the force of law) given or made after the date hereof, has or would have
the effect, as a consequence of such Lender’s Commitment or Loans hereunder, of
reducing the rate of return on the capital of such Lender or any Person
controlling such Lender to a level below that which such Lender or controlling
Person could have achieved but for such introduction, change or compliance
(taking into account such Lender’s or controlling Person’s policies with respect
to capital adequacy), the Borrower will, promptly upon demand therefor by such
Lender therefor, pay to such Lender such additional amounts as will compensate
such Lender or controlling Person for such reduction in return; provided that
the Borrower shall not be obligated to pay any such amount or amounts (i) unless
such Lender shall have first notified the Borrower in writing that it intends to
seek compensation pursuant to this Section 2.15(b) and (ii) which are
attributable to any period of time occurring more than 90 days prior to the date
of receipt by the Borrower of the notice provided for in the preceding
clause (i); provided further that if the event or circumstance requiring such
compensation is retroactive, then the 90-day period referred to above shall be
extended to include the period of retroactive effect thereof.

        (c)     If, on or prior to the first day of any Interest Period, (y) the
Administrative Agent shall have determined that adequate and reasonable means do
not exist for ascertaining the applicable LIBOR Rate for such Interest Period or
(z) the Administrative Agent shall have received written notice from the
Required Lenders of their determination that the rate of interest referred to in
the definition of “LIBOR Rate” upon the basis of which the Adjusted LIBOR Rate
for LIBOR Loans for such Interest Period is to be determined will not adequately
and fairly reflect the cost to such Lenders of making or maintaining LIBOR Loans
during such Interest Period, the Administrative Agent will forthwith so notify
the Borrower and the Lenders. Upon such notice, (i) all then outstanding LIBOR
Loans shall automatically, on the expiration date of the respective Interest
Periods applicable thereto (unless then repaid in full), be converted into Base
Rate Loans, (ii) the obligation of the Lenders to make, to convert Base Rate
Loans into, or to continue, LIBOR Loans shall be suspended (including pursuant
to the Borrowing to which such Interest Period applies), and (iii) any Notice of
Borrowing or Notice of Conversion/Continuation given at any time thereafter with
respect to LIBOR Loans shall be deemed to be a request for Base Rate Loans, in
each case until the Administrative Agent or the Required Lenders, as the case
may be, shall have determined that the circumstances giving rise to such
suspension no longer exist (and the Required Lenders, if making such
determination, shall have so notified the Administrative Agent), and the
Administrative Agent shall have so notified the Borrower and the Lenders.

        (d)     Notwithstanding any other provision in this Agreement, if, at
any time after the date hereof and from time to time, any Lender shall have
determined in good faith that the introduction of or any change in any
applicable law, rule or regulation or in the interpretation or administration
thereof by any Governmental Authority charged with the interpretation or
administration thereof, or compliance with any guideline or request from any
such Governmental Authority (whether or not having the force of law), has or
would have the effect of making it unlawful for such Lender to make or to
continue to make or maintain LIBOR Loans, such Lender will forthwith so notify
the Administrative Agent and the Borrower. Upon such notice, (i) each of such
Lender’s then outstanding LIBOR Loans shall automatically, on the expiration
date of the respective Interest Period applicable thereto (or, to the extent any
such LIBOR Loan may not lawfully be maintained as a LIBOR Loan until such
expiration date, upon such notice), be converted into a Base Rate Loan, (ii) the
obligation of such Lender to make, to convert Base Rate Loans into, or to
continue, LIBOR Loans shall be suspended (including pursuant to any Borrowing
for which the Administrative Agent has received a Notice of Borrowing but for
which the Borrowing Date has not arrived), and (iii) any Notice of Borrowing or
Notice of Conversion/Continuation given at any time thereafter with respect to
LIBOR Loans shall, as to such Lender, be deemed to be a request for a Base Rate
Loan, in each case until such Lender shall have determined that the
circumstances giving rise to such suspension no longer exist and shall have so
notified the Administrative Agent, and the Administrative Agent shall have so
notified the Borrower.

        Determinations by the Administrative Agent or any Lender for purposes of
this Section 2.15 of any increased costs, reduction in return, market
contingencies, illegality or any other matter shall, absent demonstrable error,
be conclusive; provided that such determinations are made in good faith. No
failure by the Administrative Agent or any Lender at any time to demand payment
of any amounts payable under this Section 2.15 shall constitute a waiver of its
right to demand payment of any additional amounts arising at any subsequent
time. Nothing in this Section 2.15 shall require or be construed to require the
Borrower to pay any interest, fees, costs or other amounts in excess of that
permitted by applicable law.

        2.16 Taxes.

        (a)     Subject to subsection (e), any and all payments by the Borrower
hereunder or under any Note shall be made, in accordance with the terms hereof
and thereof, free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on, or measured by,
the overall net income (or franchise taxes imposed in lieu thereof) of the
Administrative Agent or any Lender by reason of any present or former connection
between the Administrative Agent or such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision thereof,
other than such a connection arising solely from the Administrative Agent or
such Lender having executed, delivered or performed its obligations or received
a payment under, or enforced, this Agreement or the Notes (all such nonexcluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as “Taxes”). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to the Administrative Agent or any Lender, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.16), the Administrative Agent or such Lender, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower will make such deductions, (iii) the Borrower will pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) the Borrower will deliver to the
Administrative Agent or such Lender, as the case may be, evidence of such
payment.

        (b)     Subject to subsection (e), the Borrower will indemnify the
Administrative Agent and each Lender for the full amount of Taxes (including,
without limitation, any Taxes imposed by any jurisdiction on amounts payable
under this Section 2.16) paid by the Administrative Agent or such Lender, as the
case may be, and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes were
correctly or legally asserted. This indemnification shall be made within 30 days
from the date the Administrative Agent or such Lender, as the case may be, makes
written demand therefor.

        (c)     Each of the Administrative Agent and the Lenders agrees that if
it subsequently recovers, or receives a permanent net tax benefit with respect
to, any amount of Taxes (i) previously paid by it and as to which it has been
indemnified by or on behalf of the Borrower or (ii) previously deducted by the
Borrower (including, without limitation, any Taxes deducted from any additional
sums payable under clause (i) of subsection (a) above), the Administrative Agent
or such Lender, as the case may be, shall reimburse the Borrower to the extent
of the amount of any such recovery or permanent net tax benefit (but only to the
extent of indemnity payments made, or additional amounts paid, by or on behalf
of the Borrower under this Section 2.16 with respect to the Taxes giving rise to
such recovery or tax benefit); provided, however, that the Borrower, upon the
request of the Administrative Agent or such Lender, agrees to repay to the
Administrative Agent or such Lender, as the case may be, the amount paid over to
the Borrower (together with any penalties, interest or other charges), in the
event the Administrative Agent or such Lender is required to repay such amount
to the relevant taxing authority or other Governmental Authority. The
determination by the Administrative Agent or any Lender of the amount of any
such recovery or permanent net tax benefit shall, in the absence of demonstrable
error, be conclusive and binding.

        (d)     If any Lender is incorporated or organized under the laws of a
jurisdiction other than the United States of America or any state thereof (a
“Non-U.S. Lender”) and is entitled to an exemption from or a reduction of United
States withholding tax pursuant to the Internal Revenue Code, such Non-U.S.
Lender will deliver to each of the Administrative Agent and the Borrower, on or
prior to the Closing Date (or, in the case of a Non-U.S. Lender that becomes a
party to this Agreement as a result of an assignment after the Closing Date, on
the effective date of such assignment), (i) in the case of a Non-U.S. Lender
that is a “bank” for purposes of Section 881(c)(3)(A) of the Internal Revenue
Code, a properly completed Internal Revenue Service Form W-8BEN, W-8ECI or W-8
EXP, as applicable (or successor forms), certifying that such Non-U.S. Lender is
entitled to an exemption from or a reduction of withholding or deduction for or
on account of United States federal income taxes in connection with payments
under this Agreement or any of the Notes, together with a properly completed
Internal Revenue Service Form W-8BEN or W-9, as applicable (or successor forms),
and (ii) in the case of a Non-U.S. Lender that is not a “bank” for purposes of
Section 881(c)(3)(A) of the Internal Revenue Code, a certificate in form and
substance reasonably satisfactory to the Administrative Agent and the Borrower
and to the effect that (x) such Non-U.S. Lender is not a “bank” for purposes of
Section 881(c)(3)(A) of the Internal Revenue Code, is not subject to regulatory
or other legal requirements as a bank in any jurisdiction, and has not been
treated as a bank for purposes of any tax, securities law or other filing or
submission made to any governmental authority, any application made to a rating
agency or qualification for any exemption from any tax, securities law or other
legal requirements, (y) is not a 10-percent shareholder for purposes of Section
881(c)(3)(B) of the Internal Revenue Code and (z) is not a controlled foreign
corporation receiving interest from a related person for purposes of Section
881(c)(3)(C) of the Internal Revenue Code, together with a properly completed
Internal Revenue Service Form W-8BEN or W-9, as applicable (or successor forms).
Each such Non-U.S. Lender further agrees to deliver to each of the
Administrative Agent and the Borrower an additional copy of each such relevant
form on or before the date that such form expires or becomes obsolete or after
the occurrence of any event (including a change in its applicable Lending
Office) requiring a change in the most recent forms so delivered by it, in each
case certifying that such Non-U.S. Lender is entitled to an exemption from or a
reduction of withholding or deduction for or on account of United States federal
income taxes in connection with payments under this Agreement or any of the
Notes, unless an event (including, without limitation, any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required, which event renders all such forms inapplicable or the
exemption to which such forms relate unavailable and such Non-U.S. Lender
notifies the Administrative Agent and the Borrower that it is not entitled to
receive payments without deduction or withholding of United States federal
income taxes. Each such Non-U.S. Lender will promptly notify the Administrative
Agent and the Borrower of any changes in circumstances that would modify or
render invalid any claimed exemption or reduction.

        (e)     The Borrower shall not be required to indemnify any Non-U.S.
Lender, or to pay any additional amounts to any Non-U.S. Lender, in respect of
United States federal withholding tax to the extent that (i) the obligation to
withhold amounts with respect to United States federal withholding tax existed
on the date such Non-U.S. Lender became a party to this Agreement; provided,
however, that this clause (i) shall not apply to the extent that (y) the
indemnity payments or additional amounts any Lender would be entitled to receive
(without regard to this clause (i)) do not exceed the indemnity payment or
additional amounts that the person making the assignment, participation or
transfer to such Lender would have been entitled to receive in the absence of
such assignment, participation or transfer, or (z) such assignment,
participation or transfer was requested by the Borrower, (ii) the obligation to
pay such additional amounts would not have arisen but for a failure by such
Non-U.S. Lender to comply with the provisions of Section 2.16(d), (iii) any of
the representations or certifications made by a Non-U.S. Lender pursuant to
Section 2.16(d) are incorrect at the time a payment hereunder is made, other
than by reason of any change in treaty, law or regulation having effect after
the date such representations or certifications were made or (iv) the Lender
designated a successor Lending Office at which it maintains its Loans which has
the effect of causing such Lender to become obligated for tax payments in excess
of those in effect immediately prior to such designation.

        (f)     At the Borrower’s request and at the Borrower’s cost, each
Lender shall take reasonable steps (i) (to the extent (x) consistent with such
Lender’s internal policies and (y) the same would not, in the reasonable
judgment of such Lender, be otherwise materially disadvantageous to such Lender)
to contest such Lender’s liability for Taxes that have not been paid or (ii) to
seek a refund of Taxes. Nothing in this subsection (f) shall obligate any Lender
to disclose any information regarding its tax affairs or computations to the
Borrower.

        2.17 Compensation. The Borrower will compensate each Lender upon demand
for all losses, expenses and liabilities (including, without limitation, any
loss, expense or liability incurred by reason of the liquidation or reemployment
of deposits or other funds required by such Lender to fund or maintain LIBOR
Loans) that such Lender may incur or sustain (i) if for any reason (other than a
default by such Lender) a Borrowing or continuation of, or conversion into, a
LIBOR Loan does not occur on a date specified therefor in a Notice of Borrowing
or Notice of Conversion/Continuation, (ii) if any repayment, prepayment or
conversion of any LIBOR Loan occurs on a date other than the last day of an
Interest Period applicable thereto (including as a consequence of acceleration
of the maturity of the Loans pursuant to Section 8.2), (iii) if any prepayment
of any LIBOR Loan is not made on any date specified in a notice of prepayment
given by the Borrower or (iv) as a consequence of any other failure by the
Borrower to make any payments with respect to any LIBOR Loan when due hereunder.
Calculation of all amounts payable to a Lender under this Section 2.17 shall be
made as though such Lender had actually funded its relevant LIBOR Loan through
the purchase of a Eurodollar deposit bearing interest at the LIBOR Rate in an
amount equal to the amount of such LIBOR Loan, having a maturity comparable to
the relevant Interest Period; provided, however, that each Lender may fund its
LIBOR Loans in any manner it sees fit and the foregoing assumption shall be
utilized only for the calculation of amounts payable under this Section 2.17.
Determinations by any Lender for purposes of this Section 2.17 of any such
losses, expenses or liabilities shall, absent demonstrable error, be conclusive;
provided that such determinations are made in good faith.

        2.18 Replacement Lenders. The Borrower may, at any time and so long as
no Default or Event of Default has then occurred and is continuing, replace any
Lender (i) that has requested compensation from the Borrower under Section 2.15
or 2.16, (ii) the obligation of which to make or maintain LIBOR Loans has been
suspended under Section 2.15(d) or (iii) that shall refuse to fund, or otherwise
default in the funding, of its ratable share of any Borrowing requested and
permitted to be made hereunder and such refusal has not been withdrawn or such
default has not been cured within three (3) Business Days after the Borrower has
given such Lender written notice thereof, in any case under clauses (i) through
(iii) above by written notice to such Lender and the Administrative Agent
identifying one or more Persons each of which shall be an Eligible Assignee and
reasonably acceptable to the Administrative Agent (each, a “Replacement Lender,”
and collectively, the “Replacement Lenders”) to replace such Lender (the
“Replaced Lender”); provided that (a) the notice from the Borrower to the
Replaced Lender and the Administrative Agent provided for hereinabove shall
specify an effective date for such replacement (the “Replacement Effective
Date”), which shall be at least five (5) Business Days after such notice is
given, (b) as of the relevant Replacement Effective Date, each Replacement
Lender shall enter into an Assignment and Acceptance with the Replaced Lender
pursuant to Section 10.7, pursuant to which such Replacement Lenders
collectively shall acquire, in such proportion among them as they may agree with
the Borrower and the Administrative Agent, all (but not less than all) of the
Commitment and outstanding Loans of the Replaced Lender, and, in
connection therewith, shall pay (x) to the Replaced Lender, as the purchase
price in respect thereof, an amount equal to the sum as of the Replacement
Effective Date (without duplication) of (1) the unpaid principal amount of, and
all accrued but unpaid interest on, all outstanding Loans of the Replaced Lender
and (2) all accrued but unpaid fees owing to the Replaced Lender under
Section 2.8(b), (y) to the Administrative Agent, for its own account, any
amounts owing to the Administrative Agent by the Replaced Lender under
Section 2.3(b), and (c) all other obligations of the Borrower owing to the
Replaced Lender (other than those specifically described in clause (b) above in
respect of which the assignment purchase price has been, or is concurrently
being, paid), including, without limitation, amounts payable under
Sections 2.15(a) and (b) which give rise to the replacement of such Replaced
Lender and amounts payable under Section 2.17 as a result of the actions
required to be taken under this Section 2.18, shall be paid in full by the
Borrower to the Replaced Lender on or prior to the Replacement Effective Date.

ARTICLE III.......

CONDITIONS OF BORROWING

        3.1 Conditions of Initial Borrowing. The obligation of each Lender to
make Loans in connection with the initial Borrowing hereunder is subject to the
satisfaction of the following conditions precedent:

        (a) the Administrative Agent shall have received the following, each
dated as of the Closing Date (unless otherwise specified) and, except for the
Notes, in sufficient copies for each Lender:

          (i) A Note for each Lender that is a party hereto as of the Closing
Date, in the amount of such Lender’s Commitment, each duly completed in
accordance with the relevant provisions of Section 2.4 and executed by the
Borrower;

          (ii) a certificate, signed by the chief executive officer, chief
financial officer, treasurer or comptroller of the Borrower, in form and
substance satisfactory to the Administrative Agent, certifying that (A) all
representations and warranties of the Borrower contained in this Agreement and
the other Credit Documents are true and correct in all material respects as of
the Closing Date (except representations and warranties which relate solely to a
specific earlier date, which shall have been true and correct in all material
respects as of such earlier date), both immediately before and after giving
effect to the consummation of the transactions contemplated hereby, the making
of the initial Loans hereunder and the application of the proceeds thereof,
(B) no Default or Event of Default has occurred and is continuing, both
immediately before and after giving effect to the initial Loans hereunder and
the application of the proceeds thereof, (C) there are no insurance regulatory
proceedings pending or, to such individual’s knowledge, threatened against any
Insurance Subsidiary in any jurisdiction that would reasonably be expected to
have a Material Adverse Effect, and (D) both immediately before and after giving
effect to the consummation of the transactions contemplated by this Agreement,
no Material Adverse Change has occurred since December 31, 2002 and there exists
no event, condition or state of facts that would reasonably be expected to
result in a Material Adverse Change;

          (iii) a certificate of the secretary or an assistant secretary of the
Borrower, in form and substance satisfactory to the Administrative Agent,
certifying (A) that attached thereto is a true and complete copy of the
certificate of incorporation and all amendments thereto of the Borrower,
certified as of a recent date by the Secretary of State of Delaware and that the
same has not been amended since the date of such certification, (B) that
attached thereto is a true and complete copy of the bylaws of the Borrower, as
then in effect and as in effect at all times from the date on which the
resolutions referred to in clause (C) below were adopted to and including the
date of such certificate, and (C) that attached thereto is a true and complete
copy of resolutions adopted by the board of directors of the Borrower
authorizing the execution, delivery and performance of this Agreement and the
other Credit Documents to which it is a party, and as to the incumbency and
genuineness of the signature of each officer of the Borrower executing this
Agreement or any of the other Credit Documents, and attaching all such copies of
the documents described above;

          (iv) a copy of the investment policy approved by the board of
directors for each of the Insurance Subsidiaries and the Borrower; and

          (v) the favorable opinions of (i)  Mayer, Brown, Rowe & Maw LLP,
special New York counsel to the Borrower, and (ii) Joseph A. Gervasi, General
Counsel of the Borrower, in each case addressed to the Administrative Agent and
the Lenders and in form and substance reasonably satisfactory to the
Administrative Agent;

        (b) The Administrative Agent shall have received a certificate as of a
recent date of the good standing of each of (i) the Borrower, (ii) Everest Re,
(iii) Everest Indemnity, (iv) Everest National and (v) Everest Security, under
the laws of their respective jurisdictions of organization, from the Secretary
of State or Insurance Regulatory Authorities (or comparable Governmental
Authority) of such jurisdiction;

        (c) All legal, tax, accounting, business and other matters relating to
the Borrower and its Subsidiaries, documentation and corporate or other
proceedings incident to the transactions contemplated hereby shall be reasonably
acceptable to the Administrative Agent; all approvals, permits and consents of
any Governmental Authorities (including, without limitation, all relevant
Insurance Regulatory Authorities) or other Persons required in connection with
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby shall have been obtained (without the
imposition of conditions that are not reasonably acceptable to the
Administrative Agent), and all related filings, if any, shall have been made,
and all such approvals, permits, consents and filings shall be in full force and
effect and the Administrative Agent shall have received such copies thereof as
it shall have requested; all applicable waiting periods shall have expired
without any adverse action being taken by any Governmental Authority having
jurisdiction; and no action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before, and no
order, injunction or decree shall have been entered by, any court or other
Governmental Authority, in each case to enjoin, restrain or prohibit, to obtain
substantial damages in respect of, or that is otherwise related to or arises out
of, this Agreement, any of the other Credit Documents or the consummation of the
transactions contemplated hereby or thereby, or that would reasonably be
expected to have a Material Adverse Effect;

        (d) Since December 31, 2002, both immediately before and after giving
effect to the consummation of the transactions contemplated by this Agreement,
there shall not have occurred any Material Adverse Change or any event,
condition or state of facts that could reasonably be expected to result in a
Material Adverse Change;

        (e) The Borrower shall have paid (i) to the Arranger, the unpaid balance
of the fees described in paragraphs (1) and (2) of the Fee Letter, (ii) to the
Administrative Agent, the initial payment of the annual administrative fee
described in paragraph (3) of the Fee Letter, and (iii) all other fees and
expenses of the Administrative Agent and the Lenders required hereunder or under
any other Credit Document to be paid on or prior to the Closing Date (including
fees and expenses of counsel) in connection with this Agreement and the
transactions contemplated hereby;

        (f) The Administrative Agent shall have received a Covenant Compliance
Worksheet, duly completed and certified by the chief financial officer,
treasurer or comptroller of Borrower and in form and substance satisfactory to
the Administrative Agent, demonstrating Borrower’s compliance with the financial
covenants set forth in Sections 6.1 through 6.3, determined on a pro forma basis
as of June 30, 2003 after giving effect to the making of the initial Loans
hereunder and the consummation of the transactions contemplated hereby;

        (g) The Lenders shall have received the Projections as described in
Section 4.11(b) in form and substance satisfactory to the Administrative Agent;

        (h) The Administrative Agent shall have received evidence satisfactory
to it that concurrently with the making of the initial Loans hereunder, (x) all
principal, interest and other amounts outstanding with respect to the
Terminating Senior Indebtedness shall be repaid and satisfied in full and
(y) all commitments to extend credit under the agreements and instruments
relating thereto shall be terminated;

        (i) The Administrative Agent shall have received satisfactory
confirmation from A.M. Best Company that the current rating of each Material
Insurance Subsidiary is “A-” or better;

        (j) The Administrative Agent shall have received (i) an Account
Designation Letter, together with written instructions from an Authorized
Officer of the Borrower, including wire transfer information, directing the
payment of the proceeds of the initial Loans to be made hereunder and [(ii) a
LIBOR borrowing indemnity letter][Discuss borrowing at closing]; and

        (k) The Administrative Agent shall have received such other documents,
certificates, opinions and instruments in connection with the transactions
contemplated hereby as it shall have reasonably requested.

        3.2 Conditions of All Borrowings. The obligation of each Lender to make
any Loan hereunder, including the initial Loans, is subject to the satisfaction
of the following conditions precedent on the relevant Borrowing Date:

        (a)     The Administrative Agent shall have received a Notice of
Borrowing in accordance with Section 2.2(b);

        (b)     Each of the representations and warranties contained in ARTICLE
IV and in the other Credit Documents shall be true and correct in all material
respects on and as of the Closing Date (in the case of the initial Loan made
hereunder) and as of any such later Borrowing Date in the case of all subsequent
Loans (except those found at Sections 4.17 and 4.18), with the same effect as if
made on and as of such date, both immediately before and after giving effect to
the Loans to be made on such date (except to the extent any such representation
or warranty is expressly stated to have been made as of a specific date, in
which case such representation or warranty shall be true and correct in all
material respects as of such date); and

        (c)     No Default or Event of Default shall have occurred and be
continuing on such date, both immediately before and after giving effect to, the
Loans to be made on such date.

        Each giving of a Notice of Borrowing, and the consummation of each
Borrowing, shall be deemed to constitute a representation and warranty by the
Borrower that the statements contained in subsections 3.2(b) and 3.2(c) above
are true, both as of the date of such notice or request and as of the relevant
Borrowing Date.

ARTICLE IV........

REPRESENTATIONS AND WARRANTIES

        To induce the Administrative Agent and the Lenders to enter into this
Agreement and to induce the Lenders to extend the credit contemplated hereby,
the Borrower represents and warrants to the Administrative Agent and the Lenders
as follows:

        4.1 Corporate Organization and Power. Each of the Borrower and its
Subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
full corporate power and authority to execute, deliver and perform the Credit
Documents to which it is or will be a party, to own and hold its property and to
engage in its business as presently conducted, and (iii) is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the nature of its business or the ownership of its properties requires it
to be so qualified, except when the failure to be so qualified would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect.

        4.2 Authorization; Enforceability. The Borrower has taken all necessary
corporate action to execute, deliver and perform each of the Credit Documents to
which it is or will be a party, and has, or on the Closing Date (or any later
date of execution and delivery) will have, validly executed and delivered each
of the Credit Documents to which it is or will be a party. This Agreement
constitutes, and each of the other Credit Documents upon execution and delivery
by the Borrower will constitute, the legal, valid and binding obligation of the
Borrower, enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors’ rights generally or by
general equitable principles.

        4.3 No Violation. The execution, delivery and performance by the
Borrower of this Agreement and each of the other Credit Documents, and
compliance by it with the terms hereof and thereof, do not and will not
(i) violate any provision of its certificate of incorporation or bylaws or
contravene any other Requirement of Law applicable to it, (ii) conflict with,
result in a breach of or constitute (with notice, lapse of time or both) a
default under any material indenture, agreement or other instrument to which it
is a party, by which it or any of its properties is bound or to which it is
subject, or (iii) result in or require the creation or imposition of any Lien
upon any of its properties or assets. No Subsidiary is a party to any agreement
or instrument or otherwise subject to any restriction or encumbrance that
restricts or limits its ability to make dividend payments or other distributions
in respect of its Capital Stock, to repay Indebtedness owed to the Borrower or
any other Subsidiary, to make loans or advances to the Borrower or any other
Subsidiary, or to transfer any of its assets or properties to the Borrower or
any other Subsidiary, in each case other than such restrictions or encumbrances
existing under or by reason of the Credit Documents or applicable Requirements
of Law.

        4.4 Governmental Authorization; Permits.

        (a)     No consent, approval, authorization or other action by, notice
to, or registration or filing with, any Governmental Authority or other Person
is or will be required as a condition to or otherwise in connection with the due
execution, delivery and performance by the Borrower of this Agreement or any of
the other Credit Documents or the legality, validity or enforceability hereof or
thereof.

        (b)     Each of the Borrower and its Subsidiaries has, and is in good
standing with respect to, all governmental approvals, licenses, permits and
authorizations necessary to conduct its business as presently conducted and to
own or lease and operate its properties, except for those the failure to obtain
which would not be reasonably likely, individually or in the aggregate, to have
a Material Adverse Effect.

        (c)    Schedule 4.4 lists with respect to each Insurance Subsidiary, as
of the Closing Date, all of the jurisdictions in which such Insurance Subsidiary
holds licenses (including, without limitation, licenses or certificates of
authority from relevant Insurance Regulatory Authorities), permits or
authorizations to transact insurance and reinsurance business (collectively, the
“Licenses”), and indicates the type or types of insurance in which each such
Insurance Subsidiary is permitted to be engaged with respect to each License
therein listed. (i) No such License is the subject of a proceeding for
suspension, revocation or limitation or any similar proceedings, (ii) there is
no sustainable basis for such a suspension, revocation or limitation, and
(iii) no such suspension, revocation or limitation is threatened by any relevant
Insurance Regulatory Authority, that, in each instance under (i), (ii) and (iii)
above, would individually or in the aggregate, have a Material Adverse Effect.
No Insurance Subsidiary transacts any insurance business, directly or
indirectly, in any jurisdiction other than those listed on Schedule 4.4, where
such business requires any license, permit or other authorization of an
Insurance Regulatory Authority of such jurisdiction.

        4.5 Litigation. Except as disclosed in the Borrower’s 2002 Form 10-K and
as supplemented in written disclosure to the Administrative Agent delivered
prior to execution of this Agreement, there are no actions, investigations,
suits or proceedings pending or threatened, at law, in equity or in arbitration,
before any court, other Governmental Authority or other Person, against or
affecting the Borrower, any of its Subsidiaries or any of their respective
properties (i) that would reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect, or (ii) with respect to this
Agreement or any of the other Credit Documents.

        4.6 Taxes. Each of the Borrower and its Subsidiaries has timely filed
all federal, state and local tax returns and reports required to be filed by it
and has paid all taxes, assessments, fees and other charges levied upon it or
upon its properties that are shown thereon as due and payable, other than those
that are being contested in good faith and by proper proceedings and for which
adequate reserves have been established in accordance with GAAP. Such returns
are true, correct and complete in all material respects. There is no ongoing
audit or examination or other investigation by any Governmental Authority of the
tax liability of the Borrower or any of its Subsidiaries, and there is no
unresolved claim by any Governmental Authority concerning the tax liability of
the Borrower or any of its Subsidiaries for any period for which tax returns
have been or were required to have been filed, other than claims for which
adequate reserves have been established in accordance with GAAP. Neither the
Borrower nor any of its Subsidiaries has waived or extended or has been
requested to waive or extend the statute of limitations relating to the payment
of any taxes.

        4.7 Subsidiaries. Schedule 4.7 sets forth a list, as of the Closing
Date, of all of the Subsidiaries of the Borrower and, as to each such
Subsidiary, the percentage ownership (direct and indirect) of the Borrower in
each class of its Capital Stock and each direct owner thereof. All of the issued
and outstanding shares of Capital Stock of Everest Re are directly owned and
held by the Borrower.

        4.8 Full Disclosure. All factual information (other than financial
projections and forecasts) heretofore or contemporaneously furnished to the
Administrative Agent or any Lender in writing by or on behalf of the Borrower or
any of its Subsidiaries for purposes of or in connection with this Agreement and
the transactions contemplated hereby is, and all other such factual information
(other than financial projections and forecasts) hereafter furnished to the
Administrative Agent or any Lender in writing by or on behalf of the Borrower or
any of its Subsidiaries will be, true and accurate in all material respects on
the date as of which such information is dated or certified (or, if such
information has been amended or supplemented, on the date as of which any such
amendment or supplement is dated or certified) and not made incomplete by
omitting to state a material fact necessary to make the statements contained
therein, in light of the circumstances under which such information was
provided, not misleading.

        4.9 Margin Regulations. Neither the Borrower nor any of its Subsidiaries
is engaged principally or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock. No
proceeds of the Loans will be used, directly or indirectly, to purchase or carry
any Margin Stock, to extend credit fur such purpose or for any other purpose
that would violate or be inconsistent with Regulations T, U or X or any
provision of the Exchange Act. Following the application of the proceeds of the
Loan, less than 25% of the value (as determined by any reasonable method) of the
assets of the Borrower and its Subsidiaries will be represented by Margin Stock.

        4.10 No Material Adverse Change. There has been no Material Adverse
Change since December 31, 2002, and there exists no event, condition or state of
facts that could reasonably be expected to result in a Material Adverse Change.

        4.11 Financial Matters.

        (a)     The Borrower has heretofore furnished to the Administrative
Agent copies of (i) the audited consolidated balance sheets of the Borrower and
its Subsidiaries as of December 31, 2002, 2001 and 2000 and the related
statements of income, stockholders’ equity and cash flows for the fiscal years
then ended, together with the opinion of PricewaterhouseCoopers thereon, and
(ii) the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as of June 30, 2003, and the related statements of income,
stockholders’ equity and cash flows for the six-month period then ended. Such
financial statements have been prepared in accordance with GAAP (subject, with
respect to the unaudited financial statements, to the absence of notes required
by GAAP and to normal year-end adjustments) and present fairly the financial
condition of the Borrower and its Subsidiaries on a consolidated basis as of the
respective dates thereof and the consolidated results of operations of the
Borrower and its Subsidiaries for the respective periods then ended. Except as
fully reflected in the most recent financial statements referred to above and
the notes thereto, there are no material liabilities or obligations with respect
to the Borrower or any of its Subsidiaries of any nature whatsoever (whether
absolute, contingent or otherwise and whether or not due).

        (b)     The Borrower has prepared, and has heretofore furnished to the
Administrative Agent a copy of, annual projected balance sheets and statements
of income of the Borrower for the three-year period beginning with the year
ending December 31, 2003, giving effect to the initial extensions of credit made
under this Agreement, and the payment of transaction fees and expenses related
to the foregoing (the “Projections”). In the opinion of management of the
Borrower, the assumptions used in the preparation of the Projections were fair,
complete and reasonable when made and continue to be fair, complete and
reasonable as of the date hereof. The Projections have been prepared in good
faith by the executive and financial personnel of the Borrower, are complete and
represent a reasonable estimate of the future performance and financial
condition of the Borrower, subject to the uncertainties and approximations
inherent in any projections.

        (c)     The Borrower has heretofore furnished to the Administrative
Agent copies of (i) the Annual Statements of each Insurance Subsidiary as of
December 31, 2002, 2001 and 2000 and for the fiscal years then ended, each as
filed with the relevant Insurance Regulatory Authority, and (ii) the Quarterly
Statements of each Insurance Subsidiary as of June 30, 2003, and for the
six-month period then ended, each as filed with the relevant Insurance
Regulatory Authority (collectively, the “Historical Statutory Statements”). The
Historical Statutory Statements (including, without limitation, the provisions
made therein for investments and the valuation thereof, reserves, policy and
contract claims and statutory liabilities) have been prepared, in all material
respects, in accordance with SAP (except as may be reflected in the notes
thereto and subject, with respect to the Quarterly Statements, to the absence of
notes required by SAP and to normal year-end adjustments), were in all material
respects, in compliance with applicable Requirements of Law when filed and
present fairly the financial condition of the respective Insurance Subsidiaries
covered thereby as of the respective dates thereof and the results of
operations, changes in capital and surplus and cash flow of the respective
Insurance Subsidiaries covered thereby for the respective periods then ended.
Except for liabilities and obligations disclosed or provided for in the
Historical Statutory Statements (including, without limitation, reserves, policy
and contract claims and statutory liabilities), no Insurance Subsidiary had, as
of the date of its respective Historical Statutory Statements, any material
liabilities or obligations of any nature whatsoever (whether absolute,
contingent or otherwise and whether or not due) that, in accordance with SAP,
would have been required to have been disclosed or provided for in such
Historical Statutory Statements. All books of account of each Insurance
Subsidiary fully and fairly disclose all of its material transactions,
properties, assets, investments, liabilities and obligations, are in its
possession and are true, correct and complete in all material respects.

        4.12 ERISA.

        (a)     Each of the Borrower and its ERISA Affiliates is in compliance
in all material respects with the applicable provisions of ERISA, and each Plan
is and has been administered in compliance in all material respects with all
applicable Requirements of Law, including, without limitation, the applicable
provisions of ERISA and the Internal Revenue Code. No ERISA Event (i) has
occurred within the five-year period prior to the Closing Date and is
continuing, or (ii) to the knowledge of the Borrower, is reasonably expected to
occur with respect to any Plan, in either case that would reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.
No Plan has any Unfunded Pension Liability as of the date of the most recent
actuarial report applicable thereto, and neither the Borrower nor any ERISA
Affiliate has engaged in a transaction that could be subject to Section 4069 or
4212(c) of ERISA, in either instance where the same would reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.

        (b)     Neither the Borrower nor any ERISA Affiliate has had a complete
or partial withdrawal from any Multiemployer Plan for which there exists
unsatisfied withdrawal liability that would reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect, and neither the Borrower
nor any ERISA Affiliate would become subject to any withdrawal liability under
ERISA that would reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect if the Borrower or any ERISA Affiliate were to
withdraw completely from all Multiemployer Plans as of the most recent valuation
date for the Multiemployer Plans. To the knowledge of the Borrower, no
Multiemployer Plan is in “reorganization” or is “insolvent” within the meaning
of such terms under ERISA.

        4.13 Environmental Matters.

        (a)     No Hazardous Substances are or have been generated, used,
located, released, treated, disposed of or stored by the Borrower or any of its
Subsidiaries or, to the knowledge of the Borrower, by any other Person
(including any predecessor in interest) or otherwise, in, on or under any
portion of any real property, leased or owned, of the Borrower or any of its
Subsidiaries, except in compliance with all applicable Environmental Laws, and
no portion of any such real property or, to the knowledge of the Borrower, any
other real property at any time leased, owned or operated by the Borrower or any
of its Subsidiaries, has been contaminated by any Hazardous Substance; and no
portion of any real property, leased or owned, of the Borrower or any of its
Subsidiaries has been or, to the knowledge of the Borrower, is presently the
subject of an environmental audit, assessment or remedial action.

        (b)     To the knowledge of the Borrower, (i) no portion of any real
property, leased or owned, of the Borrower or any of its Subsidiaries has been
used as or for a mine, a landfill, a dump or other disposal facility, a gasoline
service station, or (other than for petroleum substances stored in the ordinary
course of business) a petroleum products storage facility, (ii) no portion of
such real property or any other real property at any time leased, owned or
operated by the Borrower or any of its Subsidiaries has, pursuant to any
Environmental Law, been placed on the “National Priorities List” or “CERCLIS
List” (or any similar federal, state or local list) of sites subject to possible
environmental problems, and (iii) and there are not and have never been any
underground storage tanks situated on any real property, leased or owned, of the
Borrower or any of its Subsidiaries.

        (c)     Except as disclosed in the Borrower’s 2002 Form 10-K, (i) all
activities and operations of the Borrower and its Subsidiaries are in compliance
with the requirements of all applicable Environmental Laws, except to the extent
the failure so to comply, individually or in the aggregate, would not be
reasonably likely to have a Material Adverse Effect, (ii) neither the Borrower
nor any of its Subsidiaries is involved in any suit, action or proceeding, or
has received any notice, complaint or other request for information from any
Governmental Authority or other Person, with respect to any actual or alleged
Environmental Claims that, if adversely determined, would be reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect and (iii) to
the knowledge of the Borrower. there are no threatened actions, suits,
proceedings or investigations with respect to any such Environmental Claims, nor
any basis therefor.

        4.14 Compliance With Laws. Each of the Borrower and its Subsidiaries has
timely filed all material reports, documents and other materials required to be
filed by it under all applicable Requirements of Law with any Governmental
Authority, has retained all material records and documents required to be
retained by it under all applicable Requirements of Law, and is otherwise in
compliance with all applicable Requirements of Law in respect of the conduct of
its business and the ownership and operation of its properties, except for such
Requirements of Law the failure to comply with which, individually or in the
aggregate, would not be reasonably likely to have a Material Adverse Effect.

        4.15 Regulated Industries. Neither the Borrower nor any of its
Subsidiaries is (i) an “investment company,” a company “controlled” by an
“investment company,” or an “investment advisor,” within the meaning of the
Investment Company Act of 1940, as amended, or (ii) a “holding company,” a
“subsidiary company” of a “holding company,” or an “affiliate” of a “holding
company” or of a “subsidiary company” of a “holding company,” within the meaning
of the Public Utility Holding Company Act of 1935, as amended.

        4.16 Insurance. The assets, properties and business of the Borrower and
its Subsidiaries are insured against such hazards and liabilities, under such
coverages and in such amounts, as are customarily maintained by prudent
companies similarly situated and under policies issued by insurers of recognized
responsibility. No notice of any pending or threatened cancellation or material
premium increase has been received by the Borrower or any of its Subsidiaries
with respect to any such policies, and the Borrower and each of its Subsidiaries
are in substantial compliance with all conditions contained therein.

        4.17 Material Contracts. Schedule 4.17 lists, as of the Closing Date,
each “material contract”(within the meaning of Item 601(b)(10) of Regulation S-K
under the Exchange Act) (other than Reinsurance Agreements) to which the
Borrower or any of its Subsidiaries is a party, by which any of them or their
respective properties is bound or to which any of them is subject (collectively,
“Material Contracts”), other than Material Contracts disclosed in the Borrower’s
quarterly or annual statement most recently filed with the Securities and
Exchange Commission, and also indicates the parties, subject matter and term
thereof. As of the Closing Date, (i) each Material Contract is in full force and
effect and, to Borrower’s knowledge, is enforceable by the Borrower or the
Subsidiary that is a party thereto in accordance with its terms, subject to the
effects of bankruptcy, insolvency and other similar laws affecting the
enforcement of creditors’ rights generally and to the effect of principles of
equity and (ii) neither the Borrower nor any of its Subsidiaries (nor, to the
knowledge of the Borrower, any other party thereto) is in breach of or default
under any Material Contract in any material respect or has given notice of
termination or cancellation of any Material Contract.

        4.18 Reinsurance Agreements. As of the Closing Date, except as set forth
on Schedule F to the Annual Statements for the Insurance Subsidiaries for the
fiscal year ending December 31, 2002 or as provided for or disclosed on the
interim GAAP financial statements dated as of June 30, 2003, there are no
material liabilities outstanding as of the Closing Date under any Reinsurance
Agreement to which any Insurance Subsidiary is the ceding party. Each
Reinsurance Agreement to which an Insurance Subsidiary is the ceding party and
which is in effect on the Closing Date is in full force and effect on the
Closing Date. Each Reinsurance Agreement to which an Insurance Subsidiary is the
ceding party and which is in effect on the Closing Date is qualified as of the
Closing Date under all applicable Requirements of Law to receive the statutory
credit assigned to such Reinsurance Agreement in the relevant Annual Statement
or Quarterly Statement at the time prepared.

        4.19 Foreign Assets Control Regulations and Anti-Money Laundering.

        (a)     Neither the making of Loans under this Agreement, nor the use of
the proceeds thereof, shall cause the Borrower to violate any of the sanctions
programs administered by the U.S. Department of the Treasury’s Office of Foreign
Assets Control (“OFAC”) of the United States Department of Treasury, any
regulations promulgated thereunder by OFAC or under any affiliated or successor
governmental or quasi-governmental office, bureau or agency and any enabling
legislation or executive order relating thereto. Without limiting the foregoing,
neither the Borrower, nor any of its Subsidiaries, (i) is a person whose
property or interests in property are blocked pursuant to Section 1 of Executive
Order 13224 of September 23, 200l Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg.
49079 (2001)), (ii) to Borrower’s knowledge, engages in any dealings or
transactions prohibited by Section 2 of such executive order, or (iii) is a
person on the list of Specially Designated Nationals and Blocked Persons.

        (b)     The Borrower and its Subsidiaries are in compliance, in all
material respects, with the Uniting and Strengthening of America by Providing
the Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.
No part of the proceeds of the Loans hereunder will be used, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended.

        4.20 Pari Passu Debt. The Loans rank at least pari passu in right of
payment with all other Indebtedness of the Borrower.

ARTICLE V.........

AFFIRMATIVE COVENANTS

        The Borrower covenants and agrees that, until the termination of the
Commitments and the payment in full of all principal and interest with respect
to the Loans together with all other amounts then due and owing hereunder:

        5.1 GAAP Financial Statements. The Borrower will deliver to each Lender:

        (a)     As soon as available and in any event within fifty-five (55)
days after the end of each of the first three fiscal quarters of each fiscal
year, beginning with the fiscal quarter ending September 30, 2003, unaudited
consolidated and, to the extent otherwise prepared for external distribution,
consolidating balance sheets of the Borrower and its Subsidiaries as of the end
of such fiscal quarter and unaudited consolidated and, to the extent otherwise
prepared for external distribution, consolidating statements of income,
stockholders’ equity and cash flows for the Borrower and its Subsidiaries for
the fiscal quarter then ended and for that portion of the fiscal year then
ended, in each case setting forth comparative consolidated or consolidating
figures as of the end of and for the corresponding period in the preceding
fiscal year, all prepared in accordance with GAAP (subject to the absence of
notes required by GAAP and subject to normal year-end adjustments) applied on a
basis consistent with that of the preceding quarter or containing disclosure of
the effect on the financial condition or results of operations of any change in
the application of accounting principles and practices during such quarter; and

        (b)     As soon as available and in any event within 105 days after the
end of each fiscal year, beginning with the fiscal year ending December 31,
2003, (i) an audited consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such fiscal year and audited consolidated
statements of income, stockholders’ equity and cash flows for the Borrower and
its Subsidiaries for the fiscal year then ended, including the applicable notes,
in each case setting forth comparative figures as of the end of and for the
preceding fiscal year, certified by the independent certified public accounting
firm regularly retained by the Borrower or another independent certified public
accounting firm of recognized national standing, together with (y) a report
thereon by such accountants that is not qualified as to going concern or scope
of audit and to the effect that such financial statements present fairly the
consolidated financial condition and results of operations of the Borrower and
its Subsidiaries as of the dates and for the periods indicated in accordance
with GAAP applied on a basis consistent with that of the preceding year or
containing disclosure of the effect on the financial condition or results of
operations of any change in the application of accounting principles and
practices during such year, and (z) a report by such accountants to the effect
that, based on and in connection with their examination of the financial
statements of the Borrower and its Subsidiaries, they obtained no knowledge of
the occurrence or existence of any Default or Event of Default relating to
accounting or financial reporting matters, or a statement specifying the nature
and period of existence of any such Default or Event of Default disclosed by
their audit; provided, however, that such accountants shall not be liable by
reason of the failure to obtain knowledge of any Default or Event of Default
that would not be disclosed or revealed in the course of their audit
examination, and (ii) to the extent otherwise prepared, an unaudited
consolidating balance sheet of the Borrower and its Subsidiaries as of the end
of such fiscal year and unaudited consolidating statements of income,
stockholders’ equity and cash flows for the Borrower and its Subsidiaries for
the fiscal year then ended, all in reasonable detail.

        5.2 Statutory Financial Statements. The Borrower will deliver to each
Lender:

        (a)     As soon as available and in any event within fifty-five (55)
days after the end of each of the first three fiscal quarters of each fiscal
year (or, in the case of Everest Insurance Company of Canada, within fifteen
(15) days after the required filing date), beginning with the fiscal quarter
ending September 30, 2003, a Quarterly Statement of each of its Insurance
Subsidiaries as of the end of such fiscal quarter and for that portion of the
fiscal year then ended, in the form filed with the relevant Insurance Regulatory
Authority, prepared in accordance with SAP applied on a basis consistent with
that of the preceding quarter or containing disclosure of the effect on the
financial condition or results of operations of any change in the application of
accounting principles and practices during such quarter;

        (b)     As soon as available and in any event within seventy-five (75)
days after the end of each fiscal year (or, in the case of Everest Insurance
Company of Canada, within fifteen (15) days after the required filing date),
beginning with the fiscal year ending December 31, 2003, an Annual Statement of
each of its Insurance Subsidiaries as of the end of such fiscal year and for the
fiscal year then ended, in the form filed with the relevant Insurance Regulatory
Authority, prepared in accordance with SAP applied on a basis consistent with
that of the preceding year or containing disclosure of the effect on the
financial condition or results of operations of any change in the application of
accounting principles and practices during such year;

        (c)     As soon as available and in any event within 135 days after the
end of each fiscal year, beginning with the fiscal year ending December 31,
2003, an unaudited consolidated balance sheet of the Borrower and its Insurance
Subsidiaries (other than Everest Insurance Company of Canada) as of the end of
such fiscal year and unaudited consolidated statements of income, stockholders’
equity and cash flows for the Borrower and its Insurance Subsidiaries (other
than Everest Reinsurance Company of Canada) for the fiscal year then ended, in
each case setting forth comparative consolidated figures as of the end of and
for the preceding fiscal year, all prepared in accordance with SAP applied on a
basis consistent with that of the preceding year or containing disclosure of the
effect on the financial condition or results of operations of any change in the
application of accounting principles and practices during such year; and

        (d)     As soon as available and in any event within 165 days after the
end of each fiscal year, beginning with the fiscal year ending December 31, 2003
(but only if and to the extent required by the applicable Insurance Regulatory
Authority with regard to any Insurance Subsidiary), a certification by the
independent certified public accounting firm referred to in Section 5.1(b) as to
the Annual Statement of each such Insurance Subsidiary as of the end of such
fiscal year and for the fiscal year then ended, together with a report thereon
by such accountants that is not qualified as to going concern or scope of audit
and to the effect that such financial statements present fairly the consolidated
financial condition and results of operations of such Insurance Subsidiary as of
the date and for the period indicated in accordance with SAP applied on a basis
consistent with that of the preceding year or containing disclosure of the
effect on the financial position or results of operations of any change in the
application of accounting principles and practices during such year.

        5.3 Other Business and Financial Information. The Borrower will deliver
to each Lender:

        (a) Concurrently with each delivery of the financial statements
described in Sections 5.1 and 5.2, a Compliance Certificate in the form of
Exhibit C-1 (in the case of the financial statements described in Section 5.1)
or Exhibit C-2 (in the case of the financial statements described in
Section 5.2) with respect to the period covered by the financial statements then
being delivered, executed by the chief financial officer, treasurer or
comptroller of the Borrower, together with a Covenant Compliance Worksheet
reflecting the computation of the respective financial covenants set forth in
such Covenant Compliance Worksheet as of the last day of the period covered by
such financial statements;

        (b) Promptly upon filing with the relevant Insurance Regulatory
Authority and in any event within 105 days after the end of each fiscal year
(or, in the case of Everest Insurance Company of Canada, within fifteen (15)
days of the required filing date), beginning with the fiscal year ended December
31, 2003, a copy of each Insurance Subsidiary’s “Statement of Actuarial Opinion”
(or equivalent information should the relevant Insurance Regulatory Authority
not require such a statement) as to the adequacy of such Insurance Subsidiary’s
loss reserves for such fiscal year, together with a copy of its management
discussion and analysis in connection therewith (but only if and to the extent
required by the applicable Insurance Regulatory Authority with regard to such
Insurance Subsidiary), each in the format prescribed by the applicable insurance
laws of such Insurance Subsidiary’s jurisdiction of domicile;

        (c) Promptly upon the sending, filing or receipt thereof, copies of
(i) all financial statements, reports, notices and proxy statements that the
Borrower or any of the Borrower’s Subsidiaries shall send or make available
generally to its shareholders, (ii) all reports (other than earnings press
releases) on Form 10-Q, Form 10-K or Form 8-K (or their successor forms) or
registration statements and prospectuses (other than on Form S-8 or its
successor form) that the Borrower or any of the Borrower’s Subsidiaries shall
render to or file with the Securities and Exchange Commission, the National
Association of Securities Dealers, Inc. or any national securities exchange,
(iii) all reports on Form A (or any successor form) that any Insurance
Subsidiary shall file with any Insurance Regulatory Authority, (iv) all material
reports on examination or similar material reports, financial examination
reports or market conduct examination reports by the NAIC or any Insurance
Regulatory Authority or other Governmental Authority with respect to any
Insurance Subsidiary’s insurance business, and (v) all material filings made
under applicable state insurance holding company acts by the Borrower or any of
its Subsidiaries, including, without limitation, filings seeking approval of
transactions with Affiliates;

        (d) Promptly upon (and in any event within five (5) Business Days after)
any Responsible Officer of the Borrower obtaining knowledge thereof, written
notice of any of the following:

          (i) the occurrence of any Default or Event of Default, together with a
written statement of a Responsible Officer of the Borrower specifying the nature
of such Default or Event of Default, the period of existence thereof and the
action that the Borrower has taken and proposes to take with respect thereto;

          (ii) the institution or threatened institution of any action, suit,
investigation or proceeding against or affecting the Borrower or any of its
Subsidiaries, including any such investigation or proceeding by any Insurance
Regulatory Authority or other Governmental Authority (other than routine
periodic inquiries, investigations or reviews), that would reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect, and any material development in any litigation or other proceeding
previously reported pursuant to Section 4.5 or this subsection (d);

          (iii) the receipt by the Borrower or any of its Subsidiaries from any
Insurance Regulatory Authority or other Governmental Authority of (i) any notice
asserting any failure by the Borrower or any of its Subsidiaries to be in
compliance with applicable Requirements of Law or that threatens the taking of
any action against the Borrower or such Subsidiary or sets forth circumstances
that, if taken or adversely determined, would have, or be reasonably likely to
have, a Material Adverse Effect, or (ii) any notice of any actual or threatened
suspension, limitation or revocation of, failure to renew, or imposition of any
restraining order, escrow or impoundment of funds in connection with, any
license, permit, accreditation or authorization of the Borrower or any of its
Subsidiaries, where such action would have, or be reasonably likely to have, a
Material Adverse Effect;

          (iv) the occurrence of any ERISA Event, together with (x) a written
statement of a Responsible Officer of the Borrower specifying the details of
such ERISA Event and the action that the Borrower has taken and proposes to take
with respect thereto, (y) a copy of any notice with respect to such ERISA Event
that may be required to be filed with the PBGC and (z) a copy of any notice
delivered by the PBGC to the Borrower or such ERISA Affiliate with respect to
such ERISA Event;

          (v) the occurrence of any decrease in (y) the rating given by either
Standard & Poor’s or Moody’s with respect to any Insurance Subsidiary’s claims
paying ability or financial strength rating or (z) the rating given to any
Insurance Subsidiary by A.M. Best Company;

          (vi) the occurrence of any actual changes in any insurance statute or
regulation governing the investment or dividend practices of any Material
Insurance Subsidiary that would be reasonably likely to have a Material Adverse
Effect; and

          (vii) any other matter or event that has, or would be reasonably
likely to have, a Material Adverse Effect, together with a written statement of
a Responsible Officer of the Borrower setting forth the nature and period of
existence thereof and the action that the Borrower has taken and proposes to
take with respect thereto;

        (e) Promptly, notice of (i) the occurrence of any material amendment or
modification (other than expiration) to any Reinsurance Agreement (whether
entered into before or after the Closing Date), including any such agreements
that are in a runoff mode on the date hereof, which amendment or modification
would be reasonably likely to have a Material Adverse Effect, or (ii) the
receipt by the Borrower or any of its Subsidiaries of any written notice of any
denial of coverage or claim, litigation or arbitration with respect to any
Reinsurance Agreement to which it is a ceding party which would be reasonably
likely to have a Material Adverse Effect;

        (f) Promptly following the request from the Administrative Agent or the
Required Lenders (which request may only be made when an Event of Default has
occurred and is continuing), a report prepared by an independent actuarial
consulting firm of recognized professional standing reasonably satisfactory to
the Administrative Agent or the Required Lenders, as the case may be, reviewing
the adequacy of reserves of each Insurance Subsidiary determined in accordance
with SAP, which firm shall be provided access to or copies of all reserve
analyses and valuations relating to the insurance business of each Insurance
Subsidiary in the possession of or available to the Borrower or any of its
Subsidiaries.

        (g) Any material change to the investment policy for the Insurance
Subsidiaries or the Borrower, including copies of such changes. (h) As promptly
as reasonably possible, such other information about the business, condition
(financial or otherwise), operations or properties of the Borrower or any of its
Subsidiaries (including any Plan and any information required to be filed under
ERISA) as the Administrative Agent or any Lender may from time to time
reasonably request.

        5.4 Corporate Existence; Franchises; Maintenance of Properties. The
Borrower will, and will cause each of its Material Subsidiaries to, (i) except
as expressly permitted otherwise by Section 7.1, maintain and preserve in full
force and effect its legal existence, (ii) obtain, maintain and preserve in full
force and effect all other rights, franchises, licenses, permits,
certifications, approvals and authorizations required by Governmental
Authorities and necessary to the ownership, occupation or use of its properties
or the conduct of its business, except to the extent the failure to do so would
not be reasonably likely to have a Material Adverse Effect, (iii) continue to
conduct and operate its businesses substantially as conducted and operated
during the present and preceding fiscal years and (iv) keep all material
properties in good working order and condition (normal wear and tear excepted)
and from time to time make all necessary repairs to and renewals and
replacements of such properties, except to the extent that any of such
properties are obsolete or are being replaced.

        5.5 Compliance with Laws. The Borrower will, and will cause each of its
Subsidiaries to, comply in all respects with all Requirements of Law applicable
in respect of the conduct of its business and the ownership and operation of its
properties, except to the extent the failure so to comply would not have, or be
reasonably likely to have, a Material Adverse Effect.

        5.6 Payment of Obligations. The Borrower will, and will cause each of
its Subsidiaries to, (i) pay all liabilities and obligations as and when due
(subject to any applicable subordination provisions), except to the extent
failure to do so would not be reasonably likely to have, a Material Adverse
Effect, and (ii) pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it, upon its income or profits or upon any of its
properties, prior to the date on which penalties would attach thereto, and all
lawful claims that, if unpaid, might become a Lien upon any of the properties of
the Borrower or any of its Subsidiaries; provided, however, that neither the
Borrower nor any of its Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim that is being contested in good faith and by
proper proceedings and as to which the Borrower or such Subsidiary is
maintaining adequate reserves with respect thereto in accordance with GAAP.

        5.7 Insurance. The Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurance
companies insurance with respect to its assets, properties and business, against
such hazards and liabilities, of such types and in such amounts, as is
customarily maintained by companies in the same or similar businesses similarly
situated; provided that the Borrower and its Subsidiaries may self-insure
against risks consistent with customary industry practices for companies in the
same or similar businesses, of similar size and with similar risk parameters.

        5.8 Maintenance of Books and Records; Inspection. The Borrower will, and
will cause each of its Subsidiaries to, (i) maintain adequate books, accounts
and records, in which full, true and correct entries shall be made of all
financial transactions in relation to its business and properties, and prepare
all financial statements required under this Agreement, in each case in
accordance with GAAP or SAP, as applicable, and in compliance with the
requirements of any Governmental Authority having jurisdiction over it, and
(ii) permit employees or agents of the Administrative Agent or any Lender to
visit and inspect its properties and examine or audit its books, records,
working papers and accounts and make copies and memoranda of them, and to
discuss its affairs, finances and accounts with its officers and employees and,
upon notice to the Borrower, the independent public accountants of the Borrower
and its Subsidiaries (and by this provision the Borrower authorizes such
accountants to discuss the finances and affairs of the Borrower and its
Subsidiaries), all at such times and from time to time, upon reasonable notice
and during business hours, as may be reasonably requested.

        5.9 Dividends. The Borrower will take all action necessary to cause its
Subsidiaries to make such dividends, distributions or other payments to the
Borrower as shall be necessary for the Borrower to make payments of the
principal of and interest on the Loans in accordance with the terms of this
Agreement. In the event the approval of any Governmental Authority or other
Person is required in order for any such Subsidiary to make any such dividends,
distributions or other payments to the Borrower, or for the Borrower to make any
such principal or interest payments, the Borrower will forthwith exercise its
best efforts and take all actions permitted by law and necessary to obtain such
approval.

        5.10 USA Patriot Act Compliance. The Borrower shall, and shall cause
each of its Subsidiaries to, provide, to the extent commercially reasonable,
such information and take such actions as are reasonably requested by the
Administrative Agent or any Lender in order to assist the Administrative Agent
and the Lenders in maintaining compliance with the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, as amended.

        5.11 Further Assurances. The Borrower will, and will cause each of its
Subsidiaries to, make, execute, endorse, acknowledge and deliver any amendments,
modifications or supplements hereto and restatements hereof and any other
agreements, instruments or documents, and take any and all such other actions,
as may from time to time be reasonably requested by the Administrative Agent or
the Required Lenders to effect, confirm or further assure or protect and
preserve the interests, rights and remedies of the Administrative Agent and the
Lenders under this Agreement and the other Credit Documents.

ARTICLE VI........

FINANCIAL COVENANTS

        The Borrower covenants and agrees that, until the termination of the
Commitments and the payment in full of all principal and interest with respect
to the Loans together with all other amounts then due and owing hereunder:

        6.1 Maximum Consolidated Indebtedness to Total Capitalization. The ratio
of Consolidated Indebtedness to Total Capitalization as of the last day of any
fiscal quarter beginning with the fiscal quarter ending September 30, 2003 shall
not be greater than 0.35 to 1.0.

        6.2 Minimum Statutory Surplus. The Statutory Surplus of Everest Re, at
any time beginning with the fiscal quarter ending September 30, 2003, shall not
be less than $1,000,000,000 plus 25% of the aggregate Net Income of Everest Re
for the period beginning after December 31, 2002 and ending on the date of
calculation, as determined in each case in accordance with SAP (provided that
Net Income for any period shall be taken into account for purposes of this
calculation only if positive), plus 25% of the aggregate capital contributions
made to Everest Re after December 31, 2002.

        6.3 Minimum Interest Coverage Ratio. The Interest Coverage Ratio as of
the last day of any fiscal quarter, beginning with the fiscal quarter ending
September 30, 2003, shall not be less than 2.5 to 1.0.

ARTICLE VII.......

NEGATIVE COVENANTS

        The Borrower covenants and agrees that, until the termination of the
Commitments and the payment in full of all principal and interest with respect
to the Loans together with all other amounts then due and owing hereunder:

        7.1 Fundamental Changes. The Borrower will not, and will not permit or
cause any of its Subsidiaries to, liquidate, wind up or dissolve, or enter into
any consolidation, merger or other combination, or agree to do any of the
foregoing; provided, however, that the Borrower or any Subsidiary may merge into
or consolidate with any other Person so long as (y) the surviving corporation is
the Borrower or a Wholly Owned Subsidiary of the Borrower (and in any event, if
Borrower is a party to such merger or consolidation, the surviving corporation
shall be the Borrower), and (z) immediately after giving effect thereto, no
Default or Event of Default would exist.

        7.2 Indebtedness. The Borrower will not, and will not permit or cause
any of its Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness other than:

          (i) Indebtedness created hereunder;

          (ii) Indebtedness incurred by the Borrower; provided that any such
Indebtedness shall either rank pari passu in right of payment to the Obligations
or be subordinated in right and time of payment to the Obligations; provided
further any loan or advance by Group or any Affiliate of Group to the Borrower
will be subordinated in right and time of payment to the Obligations and
evidenced by a promissory note in form and substance satisfactory to the
Administrative Agent;

          (iii) indorsements of negotiable instruments in the ordinary course of
business;

          (iv) accrued expenses (including salaries, accrued vacation and other
compensation), current trade or other accounts payable and other current
liabilities arising in the ordinary course of business and not incurred through
the borrowing of money; provided that the same shall be paid when due except to
the extent being contested in good faith and by appropriate proceedings;

          (v) loans and advances by the Borrower or any Subsidiaryto any other
Subsidiary or by any Subsidiary to the Borrower; provided that any such loan or
advance is subordinated in right and time of payment to the Obligations and is
evidenced by a promissory note, in form and substance satisfactory to the
Administrative Agent;

          (vi) Indebtedness in connection with Permitted Liens; and

          (vii) Indebtedness of the Borrower under Hedge Agreements.

          7.3 Liens. The Borrower will not, and will not permit or cause any of
its Subsidiaries to, directly or indirectly, make, create, incur, assume or
suffer to exist, or enter into or suffer to exist any agreement (other than the
Credit Documents) or restriction that prohibits or conditions the creation,
incurrence or assumption of, any Lien upon or with respect to any part of its
property or assets, whether now owned or hereafter acquired, or agree to do any
of the foregoing, other than the following (collectively, “Permitted Liens”):

          (i) Liens in existence on the Closing Date and set forth on Schedule
7.3 and extensions, renewals and replacements thereof so long as the outstanding
principal amount of the Indebtedness secured by any such Lien is not increased;

          (ii) Liens imposed by law, such as Liens of carriers, warehousemen,
mechanics, materialmen and landlords, and other similar Liens incurred in the
ordinary course of business for sums not constituting borrowed money that are
not overdue for a period of more than thirty (30) days or that are being
contested in good faith by appropriate proceedings and for which adequate
reserves have been established in accordance with GAAP;

          (iii) Liens (other than any Lien imposed by ERISA, the creation or
incurrence of which would result in an Event of Default under Section 8.1(i))
incurred in the ordinary course of business in connection with workers’
compensation, unemployment insurance or other forms of governmental insurance or
benefits, or to secure the performance of letters of credit, bids, tenders,
statutory obligations, surety and appeal bonds, leases, government contracts and
other similar obligations (other than obligations for borrowed money) entered
into in the ordinary course of business;

          (iv) Liens for taxes, assessments or other governmental charges or
statutory obligations that are not delinquent or remain payable without any
penalty or that are being contested in good faith by appropriate proceedings and
for which adequate reserves have been established in accordance with GAAP;

          (v) Liens in connection with pledges and deposits made pursuant to
statutory and regulatory requirements of Insurance Regulatory Authorities by an
Insurance Subsidiary in the ordinary course of its business, for the purpose of
securing regulatory capital or satisfying other financial responsibility
requirements;

          (vi) Liens upon cash and United States government and agency
securities and other investment assets of the Borrower and its Subsidiaries
securing (A) obligations incurred in connection with reverse repurchase
transactions and other similar investment management transactions and (B)
reinsurance transactions in an aggregate amount not to exceed $500,000,000 at
any time of such types and in such amounts as are customary for companies
similar to the Borrower in size and lines of business and that are entered into
by the Borrower and its Subsidiaries in the ordinary course of business;

          (vii) Purchase money Liens upon real or personal property used by the
Borrower or any of its Subsidiaries in the ordinary course of its business,
securing Indebtedness incurred solely to pay all or a portion of the purchase
price thereof (including in connection with capital leases, and including
mortgages or deeds of trust upon real property and improvements thereon);
provided that the aggregate principal amount at any time outstanding of all
indebtedness secured by such Liens does not exceed an amount equal to 5% of the
value of the total assets of the Borrower and its Subsidiaries at such time,
determined on a consolidated basis in accordance with GAAP as of the date of the
financial statements of the Borrower and its Subsidiaries most recently
delivered under Section 5.1 prior to such time (or, with regard to
determinations at any time prior to the initial delivery of financial statements
under Section 5.1, as of the date of the most recent financial statements
referred to in Section 4.11(a)), and providedfurther that any such Lien
(A) shall attach to such property concurrently with or within twenty (20) days
after the acquisition thereof by the Borrower or such Subsidiary, (B) shall not
exceed the lesser of (y) the fair market value of such property or (z) the cost
thereof to the Borrower or such Subsidiary and (C) shall not encumber any other
property of the Borrower or any of its Subsidiaries;

          (viii) Any attachment or judgment Lien not constituting an Event of
Default under Section 8.1(h) that is being contested in good faith by
appropriate proceedings and for which adequate reserves have been established in
accordance with GAAP;

          (ix) With respect to any real property occupied by the Borrower or any
of its Subsidiaries, all easements, rights of way, licenses and similar
encumbrances on title that do not materially impair the use of such property for
its intended purposes;

          (x) Liens arising from the filing, for notice purposes only, of
financing statements in respect of true leases;

          (xi) Liens on marketable securities and cash or cash equivalents
securing letter of credit facilities in an aggregate amount not to exceed
$300,000,000 at any time; and

          (xii) Liens in favor of the trustee or agent under any agreement or
indenture relating to Indebtedness of the Borrower and its Subsidiaries
permitted under this Agreement, covering sums required to be deposited with such
trustee or agent thereunder.

        7.4 Disposition of Assets. The Borrower will not, and will not permit or
cause any of its Subsidiaries to, sell, assign, lease, convey, transfer or
otherwise dispose of (whether in one or a series of transactions) all or any
portion of its assets, business or properties (including, without limitation,
any Capital Stock of any Subsidiary), or enter into any arrangement with any
Person providing for the lease by the Borrower or any Subsidiary as lessee of
any asset that has been sold or transferred by the Borrower or such Subsidiary
to such Person, or agree to do any of the foregoing, except for:

          (i) sales of investments in the ordinary course of business;

          (ii) the sale or exchange of used or obsolete equipment to the extent
(y) the proceeds of such sale are applied towards, or such equipment is
exchanged for, similar replacement equipment or (z) such equipment is no longer
necessary for the operations of the Borrower or its applicable Subsidiary in the
ordinary course of business;

          (iii) the sale, lease or other disposition of assets by a Subsidiary
of the Borrower to the Borrower or to another Wholly Owned Subsidiary, to the
extent permitted by applicable Requirements of Law and each relevant Insurance
Regulatory Authority; provided that (x) immediately after giving effect thereto,
no Default or Event of Default would exist, (y) in no event shall the Borrower
contribute, sell or otherwise transfer, or permit Everest Re to issue or sell,
any of the Capital Stock of Everest Re to any other Subsidiary, and (z) such
sale or disposition would not adversely affect the ability of any Insurance
Subsidiary party thereto to pay dividends or otherwise make distributions to the
Borrower; and

          (iv) the sale or disposition of assets outside the ordinary course of
business; provided that (w) the net proceeds from any such sale or disposition
do not exceed an amount equal to the least of the following: (1) 10% of the
total assets of the Borrower and its Subsidiaries on a consolidated basis,
(2) 10% of the total revenues of the Borrower and its Subsidiaries on a
consolidated basis, and (3) 10% of the total net earnings of the Borrower and
its Subsidiaries on a consolidated basis, in each case as determined as of the
date of the financial statements of the Borrower and its Subsidiaries most
recently delivered under Section 5.1 prior to such time (or, with regard to
determinations at any time prior to the initial delivery of financial statements
under Section 5.1, as of the date of the most recent financial statements
referred to in Section 4.11(a)), (x) immediately after giving effect thereto, no
Default or Event of Default would exist, and (y) in no event shall the Borrower
or any of its Subsidiaries sell or otherwise dispose of any of the Capital Stock
or other ownership interests of Everest Re or any other Subsidiary.

        7.5 Transactions with Affiliates. The Borrower will not, and will not
permit or cause any of its Subsidiaries to, enter into any transaction
(including, without limitation, any purchase, sale, lease or exchange of
property or the rendering of any service) with any officer, director,
stockholder or other Affiliate of the Borrower or any Subsidiary, except in the
ordinary course of its business and upon fair and reasonable terms that are no
less favorable to it than it would obtain in a comparable arm’s length
transaction with a Person other than an Affiliate of the Borrower or such
Subsidiary; provided, however, that nothing contained in this Section 7.5 shall
prohibit:

          (i) transactions between and among the Borrower and its Wholly Owned
Subsidiaries or between and among Wholly Owned Subsidiaries of the Borrower,
provided, however, that such transactions are made in the ordinary course of its
business and upon fair and reasonable terms or as otherwise required by law;

          (ii) transactions under incentive compensation plans, stock option
plans and other employee benefit plans, and loans and advances from the Borrower
or any of its Subsidiaries to its officers, in each case that have been approved
by the board of directors, or a committee thereof, of the Borrower or any of its
Subsidiaries; and

          (iii) the payment by the Borrower of reasonable and customary fees to
members of its board of directors.

        7.6 Restricted Payments. The Borrower will not, and will not permit or
cause any of its Subsidiaries to, directly or indirectly, declare or make any
dividend payment, or make any other distribution of cash, property or assets, in
respect of any of its Capital Stock or any warrants, rights or options to
acquire its Capital Stock, or purchase, redeem, retire or otherwise acquire for
value any shares of its or Group’s Capital Stock or any warrants, rights or
options to acquire its or Group’s Capital Stock, or set aside funds for any of
the foregoing, except (i) that any Subsidiary may declare and pay dividends on
or make distributions to the Borrower or to a Wholly Owned Subsidiary, (ii) the
Borrower may declare and pay dividends on, make distributions in respect of or
repurchase, redeem, retire or otherwise acquire its Capital Stock so long as (y)
no Default or Event of Default has occurred and is continuing before or after
giving effect to the declaration or payment of such dividends, distributions,
repurchases or other acquisitions and (z) prior to any of the foregoing,the
Administrative Agent shall have received a Covenant Compliance Worksheet, duly
completed and certified by the chief financial officer, treasurer or comptroller
of the Borrower and in form and substance satisfactory to the Administrative
Agent, demonstrating Borrower’s compliance with the financial covenants set
forth in Sections 6.1 through 6.3, determined on a pro forma basis after giving
effect to the proposed transaction and (iii) dividends may be paid on Trust
Preferred Securities to the extent that the trust issuing the same has received
payments on subordinated debentures issued with respect thereto, provided all
such payments are permitted by the provisions governing any such debentures.

        7.7 Lines of Business. The Borrower will not, and will not permit or
cause any of its Subsidiaries to, engage to any material extent in any business
other than the insurance and reinsurance business (including the life
reinsurance business) and other businesses engaged in by the Borrower and its
Subsidiaries on the date hereof or a business reasonably related thereto.

        7.8 Fiscal Year. The Borrower will not, and will not permit or cause any
of its Subsidiaries to, change the ending date of its fiscal year to a date
other than December 31 unless (i) the Borrower shall have given the
Administrative Agent written notice of its intention to change such ending date
at least sixty (60) days prior to the effective date thereof and (ii) prior to
such effective date this Agreement shall have been amended to make any changes
in the financial covenants and other terms and conditions to the extent
necessary, in the reasonable determination of the Lender, to reflect the new
fiscal year ending date.

        7.9 Ratings. The Borrower will not permit or cause the rating of Everest
Re by A.M. Best Company to be lower than "A-" at any time.

        7.10 Accounting Changes. The Borrower will not, and will not permit or
cause any of its Subsidiaries to, make or permit any material change in its
accounting policies or reporting practices, except as may be required or
permitted by GAAP or SAP, as applicable.

        7.11 Limitation on Certain Restrictions. The Borrower will not, and will
not permit or cause any of its Subsidiaries to, directly or indirectly, create
or otherwise cause or suffer to exist or become effective any restriction or
encumbrance on (i) the ability of the Borrower to perform and comply with its
obligations under the Credit Documents or (ii) the ability of any Subsidiary of
the Borrower to make any dividend payments or other distributions in respect of
its Capital Stock, to repay Indebtedness owed to the Borrower or any other
Subsidiary, to make loans or advances to the Borrower or any other Subsidiary,
or to transfer any of its assets or properties to the Borrower or any other
Subsidiary, in each case other than such restrictions or encumbrances existing
under or by reason of the Credit Documents or applicable Requirements of Law.

        7.12 Investments. The Borrower will not, and will not permit or cause
any of its Subsidiaries to, directly or indirectly, purchase, own, invest in or
otherwise acquire any Capital Stock, evidence of indebtedness or other
obligation or security or any interest whatsoever in any other Person, or make
or permit to exist any loans, advances or extensions of credit to, or any
investment in cash or by delivery of property in, any other Person, or purchase
or otherwise acquire (whether in one or a series of related transactions) any
portion of the assets, business or properties of another Person (including
pursuant to an acquisition), or create or acquire any Subsidiary, or become a
partner or joint venturer in any partnership or joint venture (collectively,
“Investments”), or make a commitment or otherwise agree to do any of the
foregoing, other than Investments by the Borrowerand its Subsidiaries to the
extent permitted under applicable Requirements of Law and in compliance at all
times with (i) the Insurance Code, if applicable, (ii) all applicable insurance
laws and regulations of any other relevant jurisdiction relating to investments
by an Insurance Subsidiary, and (iii) the limitations set forth in the
investment policies for each of the Insurance Subsidiaries and the Borrower.

ARTICLE VIII......

EVENTS OF DEFAULT

        8.1 Events of Default. The occurrence of any one or more of the
following events shall constitute an "Event of Default":

        (a)     The Borrower shall fail to pay (i) any principal of any Loan
when such principal is due hereunder or (ii) any interest on any Loan, any fee
or any other Obligation under this Agreement or under the other Credit Documents
within three (3) Business Days after such interest, fee or other amount becomes
due in accordance with the terms hereof or thereof; or

        (b)     The Borrower shall fail to, or fail to cause its Subsidiaries
to, observe, perform or comply with any condition, covenant or agreement
contained in any of Sections 2.13, 5.3(d)(i)or 5.4(i), Article VI, Sections 7.1
through 7.4, inclusive, and Sections 7.6, 7.7, 7.9, 7.10, 7.11 or 7.12; or

        (c)     The Borrower, or any of the Borrower’s Subsidiaries shall fail
to observe, perform or comply with any condition, covenant or agreement
contained in this Agreement or any of the other Credit Documents other than
those enumerated in subsections (a) and (b) above, and such failure shall
continue unremedied for any grace period specifically applicable thereto or, if
no such grace period is applicable, for a period of thirty (30) days after the
earlier of (y) the date on which a Responsible Officer of the Borrower acquires
knowledge thereof and (z) the date on which written notice thereof is delivered
by the Administrative Agent or any Lender to the Borrower; or

        (d)     Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries in this Agreement, any of the
other Credit Documents or in any certificate, instrument, report or other
document furnished in connection herewith or therewith or in connection with the
transactions contemplated hereby or thereby shall prove to have been false or
misleading in any material respect as of the time made, deemed made or
furnished; or

        (e)     The Borrower or any of its Subsidiaries shall (i) fail to pay
when due (whether by scheduled maturity, acceleration or otherwise and after
giving effect to any applicable grace period) (y) any principal of or interest
on any Indebtedness (other than the Indebtedness incurred pursuant to this
Agreement) having an aggregate principal amount of at least $20,000,000 or its
equivalent in any other currency or (z) any termination or other payment under
any Hedge Agreement having a net termination obligation of at least $20,000,000
or (ii) fail to observe, perform or comply with any condition, covenant or
agreement contained in any agreement or instrument evidencing or relating to any
such Indebtedness, or any other event shall occur or condition exist in respect
thereof, and the effect of such failure, event or condition is to cause, or
permit the holder or holders of such Indebtedness (or a trustee or agent on its
or their behalf) to cause (with the giving of notice, lapse of time, or both),
such Indebtedness to become due, or to be prepaid, redeemed, purchased or
defeased, prior to its stated maturity; or

        (f)     The Borrower, or any of its Material Subsidiaries, shall
(i) file a voluntary petition or commence a voluntary case seeking liquidation,
winding-up, reorganization, dissolution, arrangement, readjustment of debts or
any other relief under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to controvert in a timely and appropriate manner,
any petition or case of the type described in subsection (g) below, (iii) apply
for or consent to the appointment of or taking possession by a custodian,
trustee, receiver or similar official for or of itself or all or a substantial
part of its properties or assets, (iv) fail generally, or admit in writing its
inability, to pay its debts generally as they become due, (v) make a general
assignment for the benefit of creditors or (vi) take any corporate action to
authorize or approve any of the foregoing; or

        (g)     Any involuntary petition or case shall be filed or commenced
against the Borrower, or any of its Material Subsidiaries, seeking liquidation,
winding-up, reorganization, dissolution, arrangement, readjustment of debts, the
appointment of a custodian, trustee, receiver or similar official for it or all
or a substantial part of its properties or any other relief under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, and such petition or case shall continue undismissed and
unstayed for a period of forty-five (45) days; or an order, judgment or decree
approving or ordering any of the foregoing shall be entered in any such
proceeding; or

        (h)     Any one or more money judgments, writs or warrants of
attachment, executions or similar processes involving an aggregate amount
(exclusive of amounts fully bonded or covered by insurance as to which the
surety or insurer, as the case may be, has acknowledged its liability in
writing) in excess of $20,000,000 (or its equivalent in any other currency)
shall be entered or filed against the Borrower or any of its Subsidiaries or any
of their respective properties, and (i) the same shall not be dismissed, stayed
or discharged within forty-five (45) days or is not otherwise being
appropriately contested in good faith and in a manner reasonably satisfactory to
all of the Lenders, or (ii) the same shall not be dismissed, stayed or
discharged within five (5) days prior to any proposed sale of assets of the
Borrower or any such Subsidiary pursuant thereto, or (iii) any action shall be
legally taken by a judgment creditor to levy upon assets of the Borrower or any
such Subsidiary to enforce the same; or

        (i)     Any ERISA Event or any other event or condition shall occur or
exist with respect to any Plan or Multiemployer Plan and, as a result thereof,
together with all other ERISA Events then existing, there shall exist a
reasonable likelihood of liability to any one or more Plans or Multiemployer
Plans or to the PBGC (or to any combination thereof) in excess of $5,000,000
with respect to the Borrower or any ERISA Affiliate; or

        (j)     Any Insurance Regulatory Authority or other Governmental
Authority having jurisdiction shall issue any order of conservation,
supervision, rehabilitation or liquidation or any other order of similar effect
in respect of any Material Insurance Subsidiary; or

        (k)     Any one or more licenses, permits, accreditations or
authorizations of the Borrower or any of its Subsidiaries shall be suspended,
limited or terminated or shall not be renewed, or any other action shall be
taken, by any Governmental Authority in response to any alleged failure by the
Borrower or any of its Subsidiaries to be in compliance with applicable
Requirements of Law, and such action, individually or in the aggregate, has or
would be reasonably likely to have a Material Adverse Effect; or

        (l)     At any time, the Borrower shall cease to be a Wholly Owned
Subsidiary of Group; or

        (m)     Any of the following shall occur: (i) any Person or group of
Persons acting in concert as a partnership or other group, shall, as a result of
a tender or exchange offer, open market purchases, privately negotiated
purchases or otherwise, have become, after the date hereof, the “beneficial
owner” (within the meaning of such term under Rule 13d-3 under the Exchange Act)
of securities of Group representing 30% or more of the combined voting power of
the then outstanding securities of Group ordinarily (and apart from rights
accruing under special circumstances) having the right to vote in the election
of directors; or (ii) the Board of Directors of Group shall cease to consist of
a majority of the individuals who constituted the Board of Directors as of the
date hereof or who shall have become a member thereof subsequent to the date
hereof after having been nominated, or otherwise approved in writing, by at
least a majority of individuals who constituted the Board of Directors of Group
as of the date hereof (or their replacements approved as herein required); or
(iii) any Material Subsidiary shall cease to be a Wholly Owned Subsidiary of the
Borrower.

        8.2 Remedies; Termination of Commitments, Acceleration, Etc. Upon and at
any time after the occurrence and during the continuance of any Event of
Default, the Administrative Agent shall at the direction, or may with the
consent, of the Required Lenders, take any or all of the following actions at
the same or different times:

        (a)     Declare the Commitments to be terminated, whereupon the same
shall terminate (provided that, upon the occurrence of an Event of Default
pursuant to Section 8.1(f), Section 8.1(g) or Section 8.1(j), the Commitments
shall automatically be terminated);

        (b)     Declare all or any part of the outstanding principal amount of
the Loans to be immediately due and payable, whereupon the principal amount so
declared to be immediately due and payable, together with all interest accrued
thereon and all other amounts payable under this Agreement, the Notes and the
other Credit Documents, shall become immediately due and payable without
presentment, demand, protest, notice of intent to accelerate or other notice or
legal process of any kind, all of which are hereby knowingly and expressly
waived by the Borrower (provided that, upon the occurrence of an Event of
Default pursuant to Section 8.1(f), Section 8.1(g) or Section 8.1(j), all of the
outstanding principal amount of the Loans and all other amounts described in
this subsection (b) shall automatically become immediately due and payable
without presentment, demand, protest, notice of intent to accelerate or other
notice or legal process of any kind, all of which are hereby knowingly and
expressly waived by the Borrower); and

(c)     Exercise all rights and remedies available to it under this Agreement,
the other Credit Documents and applicable law.

        8.3 Remedies; Set-Off. In addition to all other rights and remedies
available under the Credit Documents or applicable law or otherwise, upon and at
any time after the occurrence and during the continuance of any Event of
Default, each Lender and any Affiliate of any Lender may, and each is hereby
authorized by the Borrower, at any such time and from time to time, to the
fullest extent permitted by applicable law, without presentment, demand, protest
or other notice of any kind, all of which are hereby knowingly and expressly
waived by the Borrower, to set off and to apply any and all deposits (general or
special, time or demand, provisional or final) and any other property at any
time held (including at any branches or agencies, wherever located), and any
other indebtedness at any time owing, by such Lender or such Affiliate of a
Lender to or for the credit or the account of the Borrower against any or all of
the Obligations to such Lender now or hereafter existing, whether or not such
Obligations may be contingent or unmatured, the Borrower hereby granting to each
Lender and their Affiliates a continuing security interest in and Lien upon all
such deposits and other property as security for such Obligations. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such set-off and application; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application.

ARTICLE IX........

THE ADMINISTRATIVE AGENT

        9.1 Appointment. Subject to Section 9.9, each Lender hereby irrevocably
appoints and authorizes Wachovia to act as Administrative Agent hereunder and
under the other Credit Documents and to take such actions as agent on its behalf
hereunder and under the other Credit Documents, and to exercise such powers and
to perform such duties, as are specifically delegated to the Administrative
Agent by the terms hereof or thereof, together with such other powers and duties
as are reasonably incidental thereto.

        9.2 Nature of Duties. The Administrative Agent shall have no duties or
responsibilities other than those expressly set forth in this Agreement and the
other Credit Documents. The Administrative Agent shall not have, by reason of
this Agreement or any other Credit Document, a fiduciary relationship in respect
of any Lender; and nothing in this Agreement or any other Credit Document,
express or implied, is intended to or shall be so construed as to impose upon
the Administrative Agent any obligations or liabilities in respect of this
Agreement or any other Credit Document except as expressly set forth herein or
therein. The Administrative Agent may execute any of its duties under this
Agreement or any other Credit Document by or through agents or attorneys-in-fact
and shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact that it selects with reasonable care. The Administrative Agent
shall be entitled to consult with legal counsel, independent public accountants
and other experts selected by it with respect to all matters pertaining to this
Agreement and the other Credit Documents and its duties hereunder and thereunder
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts. The Lenders hereby acknowledge that the Administrative Agent shall not
be under any duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement or any other Credit Document unless
it shall be requested in writing to do so by the Required Lenders (or, where a
higher percentage of the Lenders is expressly required hereunder, such Lenders).

        9.3 Exculpatory Provisions. Neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable to any Lender for any action taken or omitted to be taken by
it or such Person under or in connection with the Credit Documents, except for
its or such Person’s own gross negligence or willful misconduct,
(ii) responsible in any manner to any Lender for any recitals, statements,
information, representations or warranties herein or in any other Credit
Document or in any document, instrument, certificate, report or other writing
delivered in connection herewith or therewith, for the execution, effectiveness,
genuineness, validity, enforceability or sufficiency of this Agreement or any
other Credit Document, or for the financial condition of the Borrower, its
Subsidiaries or any other Person, or (iii) required to ascertain or make any
inquiry concerning the performance or observance of any of the terms, provisions
or conditions of this Agreement or any other Credit Document or the existence or
possible existence of any Default or Event of Default, or to inspect the
properties, books or records of the Borrower or any of its Subsidiaries.

        9.4 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any notice,
statement, consent or other communication (including, without limitation, any
thereof by telephone, telecopy, telex, telegram or cable) believed by it in good
faith to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons. The Administrative Agent may deem and treat each
Lender as the owner of its interest hereunder for all purposes hereof unless and
until a written notice of the assignment, negotiation or transfer thereof shall
have been given to the Administrative Agent in accordance with the provisions of
this Agreement. The Administrative Agent shall be entitled to refrain from
taking or omitting to take any action in connection with this Agreement or any
other Credit Document (i) if such action or omission would, in the reasonable
opinion of the Administrative Agent, violate any applicable law or any provision
of this Agreement or any other Credit Document or (ii) unless and until it shall
have received such advice or concurrence of the Required Lenders (or, where a
higher percentage of the Lenders is expressly required hereunder, such Lenders)
as it deems appropriate or it shall first have been indemnified to its
satisfaction by the Lenders against any and all liability and expense (other
than liability and expense arising from its own gross negligence or willful
misconduct) that may be incurred by it by reason of taking, continuing to take
or omitting to take any such action. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent’s acting or refraining from acting hereunder
or under any other Credit Document in accordance with the instructions of the
Required Lenders (or, where a higher percentage of the Lenders is expressly
required hereunder, such Lenders), and such instructions and any action taken or
failure to act pursuant thereto shall be binding upon all of the Lenders
(including all subsequent Lenders).

        9.5 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representation or warranty to it and that no act by the Administrative Agent
or any such Person hereinafter taken, including any review of the affairs of the
Borrower and its Subsidiaries, shall be deemed to constitute any representation
or warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that (i) 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 appraisal of and
investigation into the business, prospects, operations, properties, financial
and other condition and creditworthiness of the Borrower and its Subsidiaries
and made its own decision to enter into this Agreement and extend credit to the
Borrower hereunder, and (ii) it will, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action
hereunder and under the other Credit Documents and to make such investigation as
it deems necessary to inform itself as to the business, prospects, operations,
properties, financial and other condition and creditworthiness of the Borrower
and its Subsidiaries. Except as expressly provided in this Agreement and the
other Credit Documents, the Administrative Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information concerning the business, prospects,
operations, properties, financial or other condition or creditworthiness of the
Borrower, its Subsidiaries or any other Person that may at any time come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.

        9.6 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
unless the Administrative Agent shall have received written notice from the
Borrower or a Lender referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a “notice of default.” In the
event that the Administrative Agent receives such a notice, the Administrative
Agent will give notice thereof to the Lenders as soon as reasonably practicable;
provided, however, that if any such notice has also been furnished to the
Lenders, the Administrative Agent shall have no obligation to notify the Lenders
with respect thereto. The Administrative Agent shall (subject to Sections 9.4
and 10.6) take such action with respect to such Default or Event of Default as
shall reasonably be directed by the Required Lenders; providedthat, unless and
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders except
to the extent that this Agreement expressly requires that such action be taken,
or not be taken, only with the consent or upon the authorization of the Required
Lenders or all of the Lenders.

        9.7 Indemnification. To the extent the Administrative Agent is not
reimbursed by or on behalf of the Borrower, and without limiting the obligation
of the Borrower to do so, the Lenders agree (i) to indemnify the Administrative
Agent and its officers, directors, employees, agents, attorneys-in-fact and
Affiliates, ratably in proportion to their respective percentages as used in
determining the Required Lenders as of the date of determination, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including, without limitation,
reasonable attorneys’ fees and expenses) or disbursements of any kind or nature
whatsoever that may at any time (including, without limitation, at any time
following the repayment in full of the Loans and the termination of the
Commitments) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of this Agreement or any other
Credit Document or any documents contemplated by or referred to herein or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Administrative Agent under or in connection with any of the foregoing, and
(ii) to reimburse the Administrative Agent upon demand, ratably in proportion to
their respective percentages as used in determining the Required Lenders as of
the date of determination, for any expenses incurred by the Administrative Agent
in connection with the preparation, negotiation, execution, delivery,
administration, amendment, modification, waiver or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement or any of the other Credit
Documents (including, without limitation, reasonable attorneys’ fees and
expenses and compensation of agents and employees paid for services rendered on
behalf of the Lenders); provided, however, that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent
resulting from the gross negligence or willful misconduct of the party to be
indemnified.

        9.8 The Administrative Agent in its Individual Capacity. With respect to
its Commitment, the Loans made by it and the Note or Notes issued to it, the
Administrative Agent in its individual capacity and not as Administrative Agent
shall have the same rights and powers under the Credit Documents as any other
Lender and may exercise the same as though it were not performing the agency
duties specified herein; and the terms “Lenders,” “Required Lenders,”“holders of
Notes” and any similar terms shall, unless the context clearly otherwise
indicates, include the Administrative Agent in its individual capacity. The
Administrative Agent and its Affiliates may accept deposits from, lend money to,
make investments in, and generally engage in any kind of banking, trust,
financial advisory or other business with the Borrower, any of its Subsidiaries
or any of their respective Affiliates as if the Administrative Agent were not
performing the agency duties specified herein, and may accept fees and other
consideration from any of them for services in connection with this Agreement
and otherwise without having to account for the same to the Lenders.

        9.9 Successor Agent. The Administrative Agent may resign at any time by
giving ten (10) days’ prior written notice to the Borrower and the Lenders. Upon
any such notice of resignation, the Required Lenders will, with the prior
written consent of the Borrower (which consent shall not be unreasonably
withheld), appoint from among the Lenders a successor to the Administrative
Agent (provided that the Borrower’s consent shall not be required in the event
an Event of Default shall have occurred and be continuing). If no successor to
the Administrative Agent shall have been so appointed by the Required Lenders
and shall have accepted such appointment within such ten-day period, then the
retiring Administrative Agent may, on behalf of the Lenders and after consulting
with the Lenders and the Borrower, appoint a successor Administrative Agent from
among the Lenders. Upon the acceptance of any appointment as Administrative
Agent by a successor Administrative Agent, such successor Administrative Agent
shall thereupon 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 and under the other Credit Documents. After any retiring
Administrative Agent’s resignation as Administrative Agent, the provisions of
this Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent. If no successor to the
Administrative Agent has accepted appointment as Administrative Agent by the
thirtieth (30th) day following a retiring Administrative Agent’s notice of
resignation, the retiring Administrative Agent’s resignation shall nevertheless
thereupon become effective, and the Lenders shall thereafter perform all of the
duties of the Administrative Agent hereunder and under the other Credit
Documents until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided for hereinabove.

ARTICLE X.........

MISCELLANEOUS

        10.1 Fees and Expenses. The Borrower agrees (i) whether or not the
transactions contemplated by this Agreement shall be consummated, to pay upon
demand all reasonable and documented out-of-pocket costs and expenses of the
Administrative Agent (including, without limitation, the reasonable and
documented fees and expenses of counsel to the Administrative Agent) in
connection with the Administrative Agent’s due diligence investigation in
connection with, and the preparation, negotiation, execution, delivery and
syndication of, this Agreement and the other Credit Documents, and any
amendment, modification or waiver hereof or thereof or consent with respect
hereto or thereto, (ii) to pay upon demand all reasonable and documented
out-of-pocket costs and expenses of the Administrative Agent and each Lender
(including, without limitation, reasonable and documented attorneys’ fees and
expenses) in connection with (y) any refinancing or restructuring of the credit
arrangement provided under this Agreement, whether in the nature of a
“work-out,” in any insolvency or bankruptcy proceeding or otherwise and whether
or not consummated, and (z) the enforcement, attempted enforcement or
preservation of any rights or remedies under this Agreement or any of the other
Credit Documents, whether in any action, suit or proceeding (including any
bankruptcy or insolvency proceeding) or otherwise, and (iii) to pay and hold the
Administrative Agent and each Lender harmless from and against all liability for
any intangibles, documentary, stamp or other similar taxes, fees and excises, if
any, including any interest and penalties, and any finder’s or brokerage fees,
commissions and expenses (other than any fees, commissions or expenses of
finders or brokers engaged by the Administrative Agent or any Lender), that may
be payable in connection with the transactions contemplated by this Agreement
and the other Credit Documents.

        10.2 Indemnification. The Borrower agrees, whether or not the
transactions contemplated by this Agreement shall be consummated, to indemnify
and hold harmless the Administrative Agent, the Arranger and each Lender and
each of their respective directors, officers, employees, agents and Affiliates
(each, an “Indemnified Person”) from and against any and all claims, losses,
damages, obligations, liabilities, penalties, costs and expenses (including,
without limitation, reasonable attorneys’ fees and expenses) of any kind or
nature whatsoever, whether direct, indirect or consequential (collectively,
“Indemnified Costs”), that may at any time be imposed on, incurred by or
asserted against any such Indemnified Person as a result of, arising from or in
any way relating to the preparation, execution, performance or enforcement of
this Agreement or any of the other Credit Documents, any of the transactions
contemplated herein or therein or any transaction financed or to be financed in
whole or in part, directly or indirectly, with the proceeds of any Loans
(including, without limitation, in connection with the actual or alleged
generation, presence, discharge or release of any Hazardous Substances on, into
or from, or the transportation of Hazardous Substances to or from, any real
property at any time owned or leased by the Borrower or any of its Subsidiaries,
any other Environmental Claims or any violation of or liability under any
Environmental Law), or any action, suit or proceeding (including any inquiry or
investigation) by any Person, whether threatened or initiated, related to any of
the foregoing, and in any case whether or not such Indemnified Person is a party
to any such action, proceeding or suit or a subject of any such inquiry or
investigation; provided, however, that no Indemnified Person shall have the
right to be indemnified hereunder for any Indemnified Costs to the extent
determined by a final and nonappealable judgment of a court of competent
jurisdiction or pursuant to arbitration as set forth herein to have resulted
from the gross negligence or willful misconduct of such Indemnified Person. All
of the foregoing Indemnified Costs of any Indemnified Person shall be paid or
reimbursed by the Borrower, as and when incurred and upon demand.

        10.3 Governing Law; Consent to Jurisdiction. THIS AGREEMENT AND THE
OTHER CREDIT DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS
(EXCLUDING NEW YORK GENERAL OBLIGATIONS LAW§5-1401). THE PARTIES HERETO HEREBY
DECLARE THAT IT IS THEIR INTENTION THAT THIS AGREEMENT SHALL BE REGARDED AS MADE
UNDER THE LAWS OF THE STATE OF NEW YORK AND THAT THE LAWS OF SAID STATE SHALL BE
APPLIED IN INTERPRETING ITS PROVISIONS IN ALL CASES WHERE LEGAL INTERPRETATION
SHALL BE REQUIRED. EACH OF THE PARTIES HERETO AGREES (A) THAT THIS AGREEMENT
INVOLVES AT LEAST $250,000; AND (B) THAT THIS AGREEMENT HAS BEEN ENTERED INTO BY
THE PARTIES HERETO IN EXPRESS RELIANCE UPON NEW YORK GENERAL OBLIGATIONS LAW §
5-1401. NOTWITHSTANDING THE FOREGOING CHOICE OF LAW, THE BORROWER HEREBY
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE COURT WITHIN MECKLENBURG
COUNTY, NORTH CAROLINA OR NEW YORK COUNTY, NEW YORK OR ANY FEDERAL COURT LOCATED
WITHIN THE WESTERN DISTRICT OF THE STATE OF NORTH CAROLINA OR THE SOUTHERN
DISTRICT OF THE STATE OF NEW YORK FOR ANY PROCEEDING INSTITUTED HEREUNDER OR
UNDER ANY OF THE OTHER CREDIT DOCUMENTS, OR ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, OR ANY PROCEEDING TO WHICH
THE ADMINISTRATIVE AGENT, THE ARRANGER OR ANY LENDER OR THE BORROWER IS A PARTY.
INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN CONNECTION WITH ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF THE ADMINISTRATIVE AGENT, THE ARRANGER OR ANY LENDER OR THE BORROWER.
THE BORROWER IRREVOCABLY AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF
APPEAL) BY ANY JUDGMENT RENDERED OR RELIEF GRANTED THEREBY AND FURTHER WAIVES
ANY OBJECTION THAT IT MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE
OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY SUCH PROCEEDING. THE BORROWER
CONSENTS THAT ALL SERVICE OF PROCESS BE MADE BY REGISTERED OR CERTIFIED MAIL
DIRECTED TO IT AT ITS ADDRESS SET FORTH HEREINBELOW, AND SERVICE SO MADE SHALL
BE DEEMED TO BE COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE
(3) DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID AND
PROPERLY ADDRESSED. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT, THE ARRANGER OR ANY LENDER TO BRING ANY ACTION OR
PROCEEDING AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.

        10.4 Waiver of Trial by Jury. EACH PARTY HEREBY EXPRESSLY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS TO WHICH IT IS
A PARTY, OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR
ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.

        10.5 Notices. All notices and other communications provided for
hereunder shall be in writing (including telegraphic, telex, facsimile
transmission or cable communication) and mailed, telegraphed, telexed,
telecopied, cabled or delivered to the party to be notified at the following
addresses:

        (a)     if to the Borrower, Everest Reinsurance Holdings, Inc., Westgate
Corporate Center, 477 Martinville Road, P.O. Box 830, Liberty Corner, NJ
07938-0830, Attention: Frank N. Lo Papa, Telecopy No.: (908) 604-3412, Telephone
No.: (908) 604-3160 (with a copy to Joseph A. Gervasi, Telecopy No.: (908)
604-3450, Telephone No.: (908) 604-3170);

        (b)     if to the Administrative Agent, to Wachovia Bank, National
Association, Charlotte Plaza Building, CP-23, 201 South College Street,
Charlotte NC 28288-0680, Attention: Syndication Agency Services, Telecopy No.:
(704) 383-0288; and

        (c)     if to any Lender, to it at the address set forth on
Schedule 1.1(a) (or if to any Lender not a party hereto as of the date hereof,
at the address set forth in its Assignment and Acceptance);

or in each case, to such other address as any party may designate for itself by
like notice to all other parties hereto. All such notices and communications
shall be deemed to have been given (i) if mailed as provided above by any method
other than overnight delivery service, on the third Business Day after deposit
in the mails, (ii) if mailed by overnight delivery service, telegraphed,
telexed, telecopied or cabled, when delivered for overnight delivery, delivered
to the telegraph company, confirmed by telex answerback, transmitted by
telecopier or delivered to the cable company, respectively, or (iii) if
delivered by hand, upon delivery; provided that notices and communications to
the Administrative Agent shall not be effective until received by the
Administrative Agent.

        10.6 Amendments Waivers, Etc. No amendment, modification, waiver or
discharge or termination of, or consent to any departure by the Borrower from,
any provision of this Agreement or any other Credit Document, shall be effective
unless in a writing signed by the Required Lenders (or by the Administrative
Agent at the direction or with the consent of the Required Lenders), and then
the same shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment,
modification, waiver, discharge, termination or consent shall:

        (a)     unless agreed to by each Lender directly affected thereby,
(i) reduce or forgive the principal amount of any Loan, reduce the rate of or
forgive any interest thereon, or reduce or forgive any fees or other Obligations
(other than fees payable to the Administrative Agent for its own account), or
(ii) extend the Maturity Date or any other scheduled date for the payment of any
principal of any Loan, any interest on any Loan (other than additional interest
payable under Section 2.7(b)), any fees (other than fees payable to the
Administrative Agent for its own account) or any other Obligations; and

        (b)     unless agreed to by all of the Lenders, (i) increase or extend
any Commitment of any Lender (it being understood that a waiver of any Event of
Default, if agreed to by the requisite Lenders hereunder, shall not constitute
such an increase), (ii) change the percentage of the aggregate Commitments or of
the aggregate unpaid principal amount of the Loans, or the number or percentage
of Lenders, that shall be required for the Lenders or any of them to take or
approve, or direct the Administrative Agent to take, any action hereunder
(including as set forth in the definition of “Required Lenders”), or
(iii) change any provision of Section 2.14 or this Section 10.6;

        and provided further that the Fee Letter may be amended or modified, and
any rights thereunder waived, in a writing signed by the parties thereto.

        10.7 Assignments, Participations.

        (a)     Each Lender may assign to one or more other Eligible Assignees
(each, an “Assignee”) all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the outstanding Loans made by it, the Note or Notes held by it); provided,
however, that (i) any such assignment (other than an assignment to a Lender or
an Affiliate of a Lender) shall not be made without the prior written consent of
the Administrative Agent and the Borrower (to be evidenced by their
counterexecution of the relevant Assignment and Acceptance), which consent shall
not be unreasonably withheld (provided that the Borrower’s consent shall not be
required in the event an Event of Default shall have occurred and be
continuing), (ii) each such assignment shall be of a uniform, and not varying,
percentage of all of the assigning Lender’s rights and obligations under this
Agreement, (iii) unless otherwise waived by the Borrower and the Administrative
Agent, except in the case of an assignment to a Lender or an Affiliate of a
Lender, no such assignment shall be in an aggregate principal amount (determined
as of the date of the Assignment and Acceptance with respect to such assignment)
less than $10,000,000, determined by combining the amount of the assigning
Lender’s outstanding Loans and Unutilized Commitment being assigned pursuant to
such assignment (or, if less, the entire Commitment and Loans of the assigning
Lender); provided, however, the limitation on assignment in this clause (iii)
shall be no less than the aggregate principal amount of $5,000,000 (determined
as of the date of the Assignment and Acceptance with respect to such assignment)
if an Event of Default shall have occurred and be continuing; and (iv) the
parties to each such assignment will execute and deliver to the Administrative
Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance, together with any Note or Notes subject to such assignment, and will
pay a nonrefundable processing fee of $3,500 to the Administrative Agent for its
own account. Upon such execution, delivery, acceptance and recording of the
Assignment and Acceptance, from and after the effective date specified therein,
which effective date shall be at least five (5) Business Days after the
execution thereof (unless the Administrative Agent shall otherwise agree),
(A) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have (in addition to any rights and obligations
theretofore held by it) the rights and obligations of the assigning Lender
hereunder with respect thereto and (B) the assigning Lender shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights (other than rights under the
provisions of this Agreement and the other Credit Documents relating to
indemnification or payment of fees, costs and expenses, to the extent such
rights relate to the time prior to the effective date of such Assignment and
Acceptance) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of such assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto). Unless otherwise waived by the
Borrower, each Assignee which was not previously a Lender hereunder and which is
not a “United States person” as defined in Section 7701(a)(30) of the Internal
Revenue Code shall, within three Business Days of becoming a party hereto,
deliver the forms required by Section 2.16(d).

        (b)     The Administrative Agent will maintain at its address for
notices referred to herein a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and addresses
of the Lenders and the Commitments of, and principal amount of the Loans owing
to, each Lender from time to time (the “Register”). The entries in the Register
shall be conclusive and binding for all purposes, absent demonstrable error, and
the Borrower, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower
and each Lender at any reasonable time and from time to time upon reasonable
prior notice.

        (c)     Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an Assignee and, if required,
counterexecuted by the Borrower, together with the Note or Notes subject to such
assignment and the processing fee referred to in subsection (a) above, the
Administrative Agent will (i) accept such Assignment and Acceptance, (ii) on the
effective date thereof, record the information contained therein in the Register
and (iii) give notice thereof to the Borrower and the Lenders. Within five (5)
Business Days after its receipt of such notice, the Borrower, at its own
expense, will execute and deliver to the Administrative Agent, in exchange for
the surrendered Note or Notes, a new Note or Notes to the order of the Assignee
(and, if the assigning Lender has retained any portion of its rights and
obligations hereunder, to the order of the assigning Lender), prepared in
accordance with the provisions of Section 2.4 as necessary to reflect, after
giving effect to the assignment, the Commitments of the Assignee and (to the
extent of any retained interests) the assigning Lender, dated the date of the
replaced Note or Notes and otherwise in substantially the form of Exhibit A. The
Administrative Agent will return canceled Notes to the Borrower.

        (d)     Each Lender may, without the consent of the Borrower, the
Administrative Agent or any other Lender, sell to one or more other Persons
(each, a “Participant”) participations in any portion comprising less than all
of its rights and obligations under this Agreement (including, without
limitation, a portion of its Commitment, the outstanding Loans made by it, and
the Note or Notes held by it); provided, however, that (i) such Lender’s
obligations under this Agreement shall remain unchanged and such Lender shall
remain solely responsible for the performance of such obligations, (ii) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement, and no Lender shall permit any Participant to
have any voting rights or any right to control the vote of such Lender with
respect to any amendment, modification, waiver, consent or other action
hereunder or under any other Credit Document (except as to actions that would
(x) reduce or forgive the principal amount of any Loan, reduce the rate of or
forgive any interest thereon, or reduce or forgive any fees or other
Obligations, (y) extend the Maturity Date or any other date fixed for the
payment of any principal of or interest on any Loan, any fees or any other
Obligations, or (z) increase or extend any Commitment of any Lender), and
(iii) no Participant shall have any rights under this Agreement or any of the
other Credit Documents, each Participant’s rights against the granting Lender in
respect of any participation to be those set forth in the participation
agreement, and all amounts payable by the Borrower hereunder shall be determined
as if such Lender had not granted such participation. Notwithstanding the
foregoing, each Participant shall have the rights of a Lender for purposes of
Sections 2.15(a), 2.15(b), 2.16, 2.17 and 8.3, and shall be entitled to the
benefits thereto, to the extent that the Lender granting such participation
would be entitled to such benefits if the participation had not been made;
provided that no Participant shall be entitled to receive any greater amount
pursuant to any of such Sections than the Lender granting such participation
would have been entitled to receive in respect of the amount of the
participation made by such Lender to such Participant had such participation not
been made.

        (e)     Nothing in this Agreement shall be construed to prohibit any
Lender from pledging or assigning all or any portion of its rights and interest
hereunder or under any Note to any Federal Reserve Bank as security for
borrowings therefrom; provided, however, that no such pledge or assignment shall
release a Lender from any of its obligations hereunder.

        (f)     Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
10.7, disclose to the Assignee or Participant or proposed Assignee or
Participant any information relating to the Borrower and its Subsidiaries
furnished to it by or on behalf of any other party hereto; provided that such
Assignee or Participant or proposed Assignee or Participant agrees in writing to
keep such information confidential to the same extent required of the Lenders
under Section 10.13.

        10.8 No Waiver. The rights and remedies of the Administrative Agent, the
Arranger and each Lender expressly set forth in this Agreement and the other
Credit Documents are cumulative and in addition to, and not exclusive of, all
other rights and remedies available at law, in equity or otherwise. No failure
or delay on the part of the Administrative Agent, the Arranger or any Lender in
exercising any right, power or privilege shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege or be construed to be a waiver of any Default or Event
of Default. No course of dealing between any of the Borrower and the
Administrative Agent, the Arranger or the Lenders or their agents or employees
shall be effective to amend, modify or discharge any provision of this Agreement
or any other Credit Document or to constitute a waiver of any Default or Event
of Default. No notice to or demand upon the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of the Administrative Agent,
the Arranger or any Lender to exercise any right or remedy or take any other or
further action in any circumstances without notice or demand.

        10.9 Successors and Assigns. This Agreement shall be binding upon, inure
to the benefit of and be enforceable by the respective successors and assigns of
the parties hereto, and all references herein to any party shall be deemed to
include its successors and assigns; provided, however, that (i) the Borrower
shall not sell, assign or transfer any of its rights, interests, duties or
obligations under this Agreement or any other Credit Document without the prior
written consent of all of the Lenders and (ii) any Assignees and Participants
shall have such rights and obligations with respect to this Agreement and the
other Credit Documents as are provided for under and pursuant to the provisions
of Section 10.7.

        10.10 Survival. All representations, warranties and agreements made by
or on behalf of the Borrower or any of its Subsidiaries in this Agreement and in
the other Credit Documents shall survive the execution and delivery hereof or
thereof and the making and repayment of the Loans. In addition, notwithstanding
anything herein or under applicable law to the contrary, the provisions of this
Agreement and the other Credit Documents relating to indemnification or payment
of fees, costs and expenses, including, without limitation, the provisions of
Sections 2.15(a), 2.15(b), 2.16, 2.17, 9.7, 10.1and 10.2, shall survive the
payment in full of the Loans, the termination of the Commitments and any
termination of this Agreement or any of the other Credit Documents.

        10.11 Severability. To the extent any provision of this Agreement is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.

        10.12 Construction. The headings of the various articles, sections and
subsections of this Agreement have been inserted for convenience only and shall
not in any way affect the meaning or construction of any of the provisions
hereof. Except as otherwise expressly provided herein and in the other Credit
Documents, in the event of any inconsistency or conflict between any provision
of this Agreement and any provision of any of the other Credit Documents, the
provision of this Agreement shall control.

        10.13 Confidentiality. Each Lender agrees to keep confidential, pursuant
to its customary procedures for handling confidential information of a similar
nature and in accordance with safe and sound banking practices, all nonpublic
information provided to it by or on behalf of the Borrower or any of its
Subsidiaries in connection with this Agreement or any other Credit Document;
provided, however, that any Lender may disclose such information (i) to its
affiliates, directors, employees and agents and to its auditors, counsel and
other professional advisors (provided such persons are informed of the
confidential nature of such nonpublic information and are instructed by the
Lender to keep such nonpublic information confidential to the same extent
required hereunder), (ii) at the demand or request of any bank regulatory
authority, court or other Governmental Authority having or asserting
jurisdiction over such Lender, as may be required pursuant to subpoena or other
legal process, or otherwise in order to comply with any applicable Requirement
of Law, (iii) in connection with any proceeding to enforce its rights hereunder
or under any other Credit Document or in any other litigation or proceeding in
connection with the Credit Documents, (iv) to the Administrative Agent, the
Arranger or any other Lender, (v) to the extent the same has become publicly
available other than as a result of a breach of this Agreement and (vi) pursuant
to and in accordance with the provisions of Section 10.7(f). Notwithstanding
anything to the contrary in this Section 10.13 or otherwise in the Credit
Documents, the information subject to any confidentiality requirement shall not
include, and the Administrative Agent, the Arranger and each Lender may disclose
without limitation of any kind, any information with respect to the U.S. federal
income tax treatment and the U.S. federal income tax structure of the
transactions contemplated hereby and all materials of any kind (including
opinion or other tax analyses) that are provided to the Administrative Agent,
the Arranger or such Lender relating to such tax treatment and tax structure,
except that the foregoing shall not apply to the extent reasonably necessary to
comply with securities laws and except that with respect to any document or
similar item that contains information with respect to tax treatment or tax
structure as well as other information, only such information that relates to
the tax treatment or tax structure may be disclosed.

        10.14 Counterparts; Effectiveness. This Agreement may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. This Agreement
shall become effective upon the execution of a counterpart hereof by each of the
parties hereto and receipt by the Administrative Agent and the Borrower of
written or telephonic notification of such execution and authorization of
delivery thereof.

        10.15 Disclosure of Information. The Borrower agrees and consents to the
Administrative Agent’s disclosure of information relating to this transaction to
Gold Sheets and other similar bank trade publications. Such information will
consist of deal terms and other information customarily found in such
publications; provided that as to any disclosure of information not made
publicly available by the Borrower, the Borrower shall have the right to consent
to such disclosure(such consent not to be unreasonably withheld or delayed
beyond one (1) business day of the request of the Administrative Agent).

        10.16 Nonreliance. Each Lender hereby represents that it is not relying
on or looking to any Margin Stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Loans provided
for herein.

        10.17 Entire Agreement. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS
AND INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION HEREWITH (A) EMBODY THE
ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND THERETO
RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF, (B) SUPERSEDE ANY AND ALL
PRIOR AGREEMENTS AND UNDERSTANDINGS OF SUCH PERSONS, ORAL OR WRITTEN, RELATING
TO THE SUBJECT MATTER HEREOF AND THEREOF, INCLUDING, WITHOUT LIMITATION, THE
COMMITMENT LETTER FROM WACHOVIA TO THE BORROWER DATED SEPTEMBER 3, 2003, BUT
SPECIFICALLY EXCLUDING THE FEE LETTER AND (C) MAY NOT BE AMENDED, SUPPLEMENTED,
CONTRADICTED OR OTHERWISE MODIFIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

--------------------------------------------------------------------------------

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

             EVEREST REINSURANCE HOLDINGS, INC       
By:   ________________________________    
Name:   ________________________________   
Title:   ________________________________ 

(signatures continued)

--------------------------------------------------------------------------------

         WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent and as a
Lender               By:   ________________________________           
Name:   ________________________________           
Title:   ________________________________ 

(signatures continued)

--------------------------------------------------------------------------------

   RBC FINANCE B.V., as a Lender        By:   ________________________________ 
   Name:   ________________________________    
Title:   ________________________________ 

(signatures continued)

--------------------------------------------------------------------------------

DEUTSCHE BANK AG, New York Branch, as a
Lender     By:   ________________________________   Name:   ________________________________   Title:   ________________________________      By:   ________________________________  : Name   ________________________________   Title:   ________________________________ 

(signatures continued)

--------------------------------------------------------------------------------

                                                  CITICORP USA, INC., as a
Lender                                                       
By:   ________________________________ 
                                                      
Name:   ________________________________ 
                                                      
Title:   ________________________________ 

(signatures continued)

--------------------------------------------------------------------------------

   THE BANK OF NEW YORK, as a Lender       
By:   ________________________________    
Name:   ________________________________    
Title:   ________________________________ 

(signatures continued)

--------------------------------------------------------------------------------

   JPMORGAN CHASE BANK, as a Lender       
By:   ________________________________    
Name:   ________________________________   
Title:   ________________________________ 

--------------------------------------------------------------------------------

Schedule
1.1(a)                                                              Commitments
and                                                            Notice
Addresses                  Lender Commitment 

--------------------------------------------------------------------------------

  Wachovia Bank, National Association  $  32,500,000  

--------------------------------------------------------------------------------

           RBC Finance B.V  $  25,000,000  

--------------------------------------------------------------------------------

   Deutsche Bank AG, New York Branch  $  25,000,000  

--------------------------------------------------------------------------------

          Citicorp USA, Inc.  $  22,500,000  

--------------------------------------------------------------------------------

         The Bank of New York  $  22,500,000  

--------------------------------------------------------------------------------

          JPMorgan Chase Bank  $  22,500,000  

--------------------------------------------------------------------------------

                 Total  $150,000,000  

--------------------------------------------------------------------------------