Execution Version

$238,445,927.35 LETTER OF CREDIT FACILITY AGREEMENT
Between
CINCINNATI FINANCIAL CORPORATION,

as Borrower,
and
THE BANK OF NOVA SCOTIA, as Bank

Dated as of February 25, 2019

TABLE OF CONTENTS
Contents
1.DEFINITIONS, CONSTRUCTION AND SIMILAR PROVISIONS    1
1.1Certain Definitions.    1
1.2Construction.    18
1.3Accounting Principles.    19
1.4Completion Date Subsidiaries.    19
2.LETTER OF CREDIT FACILITY    19
2.1Letter of Credit Facility.    19
2.2Letter of Credit.    19
2.2.1Issuance of Letter of Credit.    19
2.2.2Letter of Credit Fees.    20
2.2.3Disbursements, Reimbursement.    20
2.2.4Documentation.    21
2.2.5Determinations to Honor Drawing Requests.    21
2.2.6Nature of Reimbursement Obligations.    21
2.2.7Indemnity.    22
2.2.8Liability for Acts and Omissions.    23
2.3Purpose and Application.    24
2.3.1Purpose.    24
2.3.2Letter of Credit Subordinated .    24
2.3.3Application.    24
2.4Cash Collateral.    25
2.4.1Expiration Date Cash Collateralization.    25
2.4.2Mandatory Cash Collateralization.    25
2.4.3Unfunded Solvency Deficit Cash Collateralization.    25
2.4.4Tail Period Cash Collateralization.    25
2.4.5Further Cash Collateralization.    25
2.4.6Termination of Requirement.    25
2.4.7Borrower Cash Collateral Direction.    26
2.5Reduction of LC Commitment.    26
2.6Cancellation of the Letter of Credit.    26
2.7Obligations.    26
3.PAYMENTS AND INTEREST    26
3.1Payments.    26
3.2Increased Costs.    27
3.2.1Increased Costs Generally.    27
3.2.2Capital Requirements.    27
3.2.3Certificates for Reimbursement; Repayment of Outstanding Obligations.    27
3.2.4Delay in Requests.    27
3.3Taxes.    28
3.3.1Payments Free of Taxes.    28
3.3.2Payment of Other Taxes by the Borrower.    28
3.3.3Indemnification by the Borrower.    28
3.3.4Evidence of Payments.    28
3.3.5Status of the Bank.    28
3.3.6Treatment of Certain Refunds.    30
3.3.7Survival.    31
3.4Indemnity.    31
3.5LIBOR.    31
3.5.1LIBOR.    31
3.5.2LIBOR Rate Unascertainable.    31
3.5.3Illegality.    32
3.6Successor LIBOR Rate Index .    32
3.6.1LIBOR Termination.    32
3.6.2LIBOR Amendment.    32
3.6.3Replacement Index.    32
3.6.4Floor.    33
4.REPRESENTATIONS AND WARRANTIES    33
4.1Representations and Warranties.    33
4.1.1Organization and Qualification; Power and Authority; Compliance With Laws;
Title to Properties; Event of Default.    33
4.1.2Subsidiaries and Owners; Investment Companies.    33
4.1.3Validity and Binding Effect.    34
4.1.4No Conflict; Material Agreements; Consents.    34
4.1.5Litigation.    34
4.1.6Financial Statements.    34
4.1.7Margin Stock.    35
4.1.8Full Disclosure.    35
4.1.9Taxes.    35
4.1.10Patents, Trademarks, Copyrights, Licenses, Etc.    35
4.1.11Insurance.    36
4.1.12ERISA Compliance.    36
4.1.13Environmental Matters.    36
4.1.14Solvency.    36
4.1.15Insurance Licenses.    36
4.1.16Certificate of Beneficial Ownership.    37
4.1.17Corporate Member.    37
4.1.18Appointment as Managing Agent.    37
4.1.19Underwriting Standards and Investment Guidelines.    37
4.1.20Anti-Terrorism Laws.    37
4.1.21Existing Asset.    37
5.CONDITIONS OF ISSUANCE OF THE LETTER OF CREDIT    37
5.1Conditions to Effectiveness.    37
5.1.1Deliveries.    37
5.2The Letter of Credit.    38
6.COVENANTS    39
6.1Affirmative Covenants.    39
6.1.1Preservation of Existence, Etc.    39
6.1.2Payment of Liabilities, Including Taxes, Etc.    39
6.1.3Maintenance of Insurance.    39
6.1.4Maintenance of Properties and Leases.    39
6.1.5Visitation Rights.    40
6.1.6Keeping of Records and Books of Account.    40
6.1.7Compliance with Laws; Use of Proceeds.    40
6.1.8Certificate of Beneficial Ownership and Other Additional Information.    40
6.1.9Lloyd's Syndicate Accounting Rules.    40
6.1.10Regulatory Compliance.    41
6.1.11Funds at Lloyd's Compliance.    41
6.1.12Underwriting Standards and Investment Guidelines.    41
6.1.13Minimum Ratings.    41
6.1.14Corporate Member.    41
6.1.15Business Plan.    41
6.1.16Sanctions; Anti-Corruption Laws.    41
6.1.17Completion Date.    41
6.2Negative Covenants.    42
6.2.1Indebtedness.    42
6.2.2Liens; Lien Covenants.    42
6.2.3Guaranties.    43
6.2.4Dividends and Related Distributions.    43
6.2.5Liquidations, Mergers, Consolidations, Acquisitions.    43
6.2.6Dispositions of Assets or Subsidiaries.    43
6.2.7Affiliate Transactions.    43
6.2.8Continuation of or Change in Business.    44
6.2.9Fiscal Year.    44
6.2.10Changes in Organizational Documents.    44
6.2.11Limitation on Certain Restrictions on Subsidiaries.    44
6.2.12Anti-Terrorism Laws.    44
6.2.13Consolidated Debt to Total Capitalization.    45
6.2.14Own FAL.    45
6.2.15Third Party FAL.    45
6.3Reporting Requirements.    45
6.3.1Quarterly Financial Statements.    45
6.3.2Annual Financial Statements.    45
6.3.3Quarterly Monitoring Return.    45
6.3.4Certificate of the Borrower.    46
6.3.5Unfunded Solvency Deficit .    46
6.3.6Notices.    46
7.DEFAULT    48
7.1Events of Default.    48
7.1.1Payments Under FAL LC Documents .    48
7.1.2Breach of Warranty .    48
7.1.3Breach of Negative Covenants or Visitation Rights.    48
7.1.4Breach of Other Covenants.    49
7.1.5Defaults in Other Agreements or Indebtedness.    49
7.1.6Final Judgments or Orders.    49
7.1.7FAL LC Document Unenforceable.    49
7.1.8Proceedings Against Assets.    49
7.1.9Events Relating to Plans and Benefit Arrangements.    49
7.1.10Change of Control.    49
7.1.11Regulatory Orders .    50
7.1.12Solvency Test.    50
7.1.13The Borrower's Business.    50
7.1.14Withdrawal of the Permission/Authority of the Managing Agent.    50
7.1.15Managing Agent Ceases to Act.    50
7.1.16Insurers (Reorganization and Winding Up)(Lloyd's) Regulations 2005.    50
7.1.17Financial Services and Markets Act 2000.    50
7.1.18Insurance Licenses.    51
7.1.19Relief Proceedings.    51
7.2Consequences of Event of Default.    51
7.2.1Events of Default Other Than Bankruptcy, Insolvency or Reorganization
Proceedings.    51
7.2.2Bankruptcy, Insolvency or Reorganization Proceedings.    51
7.2.3Set-off.    52
7.2.4Application of Proceeds.    52
8.MISCELLANEOUS    52
8.1Modifications, Amendments or Waivers.    52
8.2No Implied Waivers; Cumulative Remedies.    52
8.3Expenses; Indemnity; Damage Waiver.    53
8.3.1Costs and Expenses.    53
8.3.2Indemnification by the Borrower.    53
8.3.3Waiver of Consequential Damages, Etc.    54
8.3.4Payments.    54
8.4Holidays.    54
8.5Notices; Effectiveness; Electronic Communication.    54
8.5.1Notices Generally.    54
8.5.2Electronic Communications.    54
8.5.3Change of Address, Etc.    55
8.6Severability.    55
8.7Duration; Survival.    55
8.8Successors and Assigns.    55
8.8.1Successors and Assigns Generally.    55
8.8.2Assignments by the Bank.    56
8.8.3Register.    56
8.8.4Participations.    56
8.8.5Limitations upon Participant Rights Successors and Assigns Generally.    57
8.8.6Certain Pledges; Successors and Assigns Generally.    57
8.9Confidentiality.    58
8.9.1General.    58
8.9.2Sharing Information With Affiliates of the Bank.    58
8.10Counterparts; Integration; Effectiveness.    58
8.10.1Counterparts; Integration; Effectiveness.    58
8.11CHOICE OF LAW; SUBMISSION TO JURISDICTION; WAIVER OF VENUE; SERVICE OF
PROCESS; WAIVER OF JURY TRIAL.    59
8.11.1Governing Law.    59
8.11.2SUBMISSION TO JURISDICTION.    59
8.11.3WAIVER OF VENUE.    59
8.11.4SERVICE OF PROCESS.    59
8.11.5WAIVER OF JURY TRIAL.    59
8.12USA Patriot Act Notice.    60
8.13Contractual Recognition of Bail-In.    60

LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
SCHEDULE 1.1(A)
-    APPLICABLE LETTER OF CREDIT FEE RATE

SCHEDULE 1.1(B)
-    LC COMMITMENT OF THE BANK AND ADDRESSES FOR NOTICES

SCHEDULE 1.1(P)
-    PERMITTED LIENS

SCHEDULE 4.1.2
-    SUBSIDIARIES

SCHEDULE 4.1.10
-    INTELLECTUAL PROPERTY

SCHEDULE 6.2.1    -    PERMITTED INDEBTEDNESS

EXHIBITS
EXHIBIT 1
-    INTERCOMPANY SUBORDINATION AGREEMENT

EXHIBIT 2
-    LETTER OF COMFORT

EXHIBIT 3
-    SUBSTITUTION LETTER

EXHIBIT 4
-    LETTER OF CREDIT

EXHIBIT 5
-    U.S. TAX COMPLIANCE CERTIFICATE

EXHIBIT 6
-    QUARTERLY COMPLIANCE CERTIFICATE

EXHIBIT 7
-    CERTIFICATE OF BENEFICIAL OWNERSHIP

709155153 12403011

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

LETTER OF CREDIT FACILITY AGREEMENT
THIS LETTER OF CREDIT FACILITY AGREEMENT (as hereafter amended, restated,
amended and restated, supplemented or otherwise modified, this “Agreement”) is
dated as of February 25, 2019 and is made by and between CINCINNATI FINANCIAL
CORPORATION, an Ohio corporation (the “Borrower”), and THE BANK OF NOVA SCOTIA ,
in its capacity as issuing lender under this Agreement (hereinafter referred to
in such capacity as the “Bank”).
WHEREAS, the Borrower intends to consummate the Acquisition Transaction referred
to below, pursuant to which it will acquire the entire issued share capital of
MSP Underwriting Limited, the direct parent of the Corporate Member;
WHEREAS, the Borrower wishes for the Bank to issue a Letter of Credit for the
benefit of Lloyd's, as Funds at Lloyd's, to support and stand as security for
the general business at Lloyd's of the Corporate Member for the 2019 year of
account and each prior open year of account;
WHEREAS, such Letter of Credit is to be substituted for the Existing Asset as
Funds at Lloyd’s of the Corporate Member on the Substitution Date in accordance
with the terms of the Substitution Letter; and
WHEREAS, the Bank is willing to issue such Letter of Credit on the terms and
subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of their mutual covenants and agreements
hereinafter set forth and intending to be legally bound hereby, the parties
hereto covenant and agree as follows:

1.DEFINITIONS, CONSTRUCTION AND SIMILAR PROVISIONS

1.1    Certain Definitions. In addition to words and terms defined elsewhere in
this Agreement, the following words and terms shall have the following meanings,
respectively, unless the context hereof clearly requires otherwise:
Acquisition Agreement shall mean the Agreement for the sale and purchase of the
entire issued share capital of MSP Underwriting Limited between the Borrower, as
buyer, and Münchener Rückversicherungs Gesellschaft AG, as seller, dated October
11, 2018.
Acquisition Transaction shall mean the acquisition by the Borrower of the entire
issued share capital of MSP Underwriting Limited in accordance with the terms of
the Acquisition Agreement.
Affiliate as to any Person shall mean any other Person (i) which directly or
indirectly controls, is controlled by, or is under common control with such
Person, (ii) which beneficially owns or holds 5% or more of any class of the
voting or other equity interests of such Person, or (iii) 5% or more of any
class of voting interests or other equity interests of which is beneficially
owned or held, directly or indirectly, by such Person.
Anti-Corruption Laws shall mean all laws and requirements of any jurisdiction
(including, without limitation, the United States of America and Canada)
applicable to the Borrower and its Affiliates concerning or relating to bribery
or corruption, including, without limitation, the FCPA, the UK Bribery Act 2010,
applicable anti-corruption laws in United States of America and Canada and other
similar applicable anti-corruption legislation in other jurisdictions.
Anti-Money Laundering Laws shall mean, with respect to the Borrower and its
Affiliates, all Applicable Laws concerning or relating to anti-money laundering
and anti-terrorism financing, including, without limitation, the USA PATRIOT
Act, the Money Laundering Control Act of 1986 and other legislation, which
legislative framework is commonly referred to as the “Bank Secrecy Act,” and all
rules and regulations implementing these laws, as any of the foregoing may be
amended from time to time.
Anti-Terrorism Laws shall mean any Laws relating to terrorism, trade sanctions
programs and embargoes, import/export licensing, money laundering or bribery,
and any regulation, order, or directive promulgated, issued or enforced pursuant
to such Laws, including Executive Order No. 13224, the USA Patriot Act, Money
Laundering Control Act of 1986 (18 U.S.C. 1956 at seq), the Laws comprising or
implementing the Bank Secrecy Act, and the Laws administered by the United
States Treasury Department’s Office of Foreign Asset Control (as any of the
foregoing Laws may from time to time be amended, renewed, extended, or
replaced).
Applicable Insurance Regulatory Authority shall mean, with respect to any
Insurance Company, the Corporate Member and/or the Managing Agent, the insurance
department or similar administrative authority or agency of the jurisdiction in
which such Insurance Company, the Corporate Member and/or the Managing Agent, as
applicable, is domiciled or operates, including any federal, national or
supranational insurance department, similar administrative authority or agency
which asserts insurance regulatory jurisdiction over such Insurance Company, the
Corporate Member and/or the Managing Agent, as applicable, provided Lloyd’s
shall be deemed to be an Applicable Insurance Regulatory Authority.
Applicable Law shall mean, as to any Person, all applicable Laws binding upon
such Person or to which such Person is subject.
Applicable Letter of Credit Fee Rate shall mean the percentage rate per annum
provided on Schedule 1.1(A) below the heading "Applicable Letter of Credit Fee
Rate" which rate shall be applied as of any date of determination with respect
to all or the applicable portion of the Letter of Credit Obligations, in each
case, as provided on Schedule 1.1(A).
Approved Credit Institution shall have the meaning given to it in Appendix I of
the Membership and Underwriting Conditions and Requirements (Funds at Lloyd’s).
Approved Fund shall mean any fund that is engaged in making, purchasing, holding
or investing in bank loans and similar extensions of credit in the ordinary
course of business and that is administered or managed by (a) the Bank, (b) an
Affiliate of the Bank or (c) an entity or an Affiliate of an entity that
administers or manages the Bank.
Assignment and Assumption Agreement shall mean an assignment and assumption
agreement entered into by the Bank and an assignee permitted under Section 8.8.
Authorized Officer shall mean, with respect to the Borrower, the Chief Executive
Officer and Chief Financial Officer of the Borrower or such other individuals,
designated by written notice to the Bank from the Borrower, authorized to
execute notices, reports and other documents on behalf of the Borrower required
hereunder. The Borrower may amend such list of individuals from time to time by
giving written notice of such amendment to the Bank.
Availability Period shall mean the period commencing on the Closing Date and
ending on the tenth Business Day thereafter.
Bail-In Action shall mean the exercise of any Write-down and Conversion Powers.
Bail-In Legislation shall mean:
(A)    in relation to an EEA Member Country which has implemented, or which at
any time implements, Article 55 of Directive 2014/59/EU establishing a framework
for the recovery and resolution of credit institutions and investment firms, the
relevant implementing law or regulation as described in the EU Bail-In
Legislation Schedule from time to time; and
(B)    in relation to any other state, any analogous law or regulation from time
to time which requires contractual recognition of any Write-down and Conversion
Powers contained in that law or regulation.
Beneficial Owner shall mean each of the following: (a) each individual, if any,
who, directly or indirectly, owns 25% or more of the Borrower’s equity
interests; and (b) a single individual with significant responsibility to
control, manage, or direct the Borrower.
Beneficial Ownership Regulation shall mean 31 C.F.R. § 1010.230.
Borrower shall have the meaning specified in the Preamble hereto.
Business Day shall mean any day other than a Saturday or Sunday or a legal
holiday on which commercial banks are authorized or required to be closed for
business in New York, New York, Toronto, Ontario or London England, and if the
applicable Business Day is related to any calculation of the LIBOR Rate, such
day must also be a day on which dealings are carried on in the London interbank
market.
Cash Collateral Account shall mean a deposit account established in the name of
the Borrower with the Bank entitled "Cincinnati Financial – Cash Collateral
Account subject to Lien of Bank of Nova Scotia", or any other deposit account
which the Borrower and the Bank subsequently agree shall be the Cash Collateral
Account for purposes of this Agreement; provided, that with respect to any
deposit account, to the extent that the Borrower has failed to enter into a
deposit account control agreement in form and substance reasonably acceptable to
the Bank within ten (10) Business Days of Bank requesting that Borrower enter
into such a deposit account control agreement and providing the Borrower with
the proposed form thereof, such deposit account shall cease to constitute a
“Cash Collateral Account” for purposes of this Agreement until such time as the
Borrower shall have entered into such a deposit account control agreement with
respect thereto.
Cash Collateralization Date shall have the meaning specified in Section 6.1.17.
Cash Collateralize shall mean to deposit or deliver to a Cash Collateral
Account, as collateral for the Letter of Credit Obligations, cash or deposit
account balances. Cash Collateral shall have a meaning correlative to the
foregoing and shall include the proceeds of such cash collateral and other
credit support.
Certificate of Beneficial Ownership shall mean a certificate in the form
attached hereto as Exhibit 7 or such other certificate in form and substance
reasonably acceptable to the Bank and the Borrower, certifying, among other
things, the Beneficial Owners of the Borrower.
Change in Law shall mean the occurrence, after the Closing Date, of any of the
following: (a) the adoption or taking effect of any Law, (b) any change in any
Law or in the administration, interpretation, implementation or application
thereof by any Official Body or (c) the making or issuance of any request,
guideline or directive (whether or not having the force of Law) by any Official
Body; provided that notwithstanding anything herein to the contrary, (x) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines or directives thereunder or issued in connection therewith and
(y) all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a “Change in Law”, regardless of the date enacted, adopted or issued.
Closing Date shall mean February 25, 2019.
Code shall mean the Internal Revenue Code of 1986, as the same may be amended or
supplemented from time to time, and any successor statute of similar import, and
the rules and regulations thereunder, as from time to time in effect.
Commitment Fee shall have the meaning specified in Section 2.2.2.
Completion Date shall mean the date of the consummation of the Acquisition
Transaction.
Completion Date Subsidiaries shall mean the entities listed under the heading
“Completion Date Subsidiaries” on Schedule 4.1.2, which entities are to become
Subsidiaries of the Borrower upon the consummation of the Acquisition
Transaction on the Completion Date.
Compliance Certificate shall have the meaning specified in Section 6.3.4.
Connection Income Taxes shall mean Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.
Consolidated Debt shall mean the consolidated Indebtedness of the Borrower and
its consolidated Subsidiaries, including without limitation the face value of
any outstanding undrawn letter of credit and the principal amount of any Letter
of Credit Borrowing, but excluding any obligation relating to an undrawn letter
of credit that is issued in connection with a liability for which a reserve has
been established by the Borrower and its consolidated Subsidiaries in accordance
with GAAP.
Consolidated Net Worth shall mean, at any time, the consolidated shareholders’
equity of the Borrower and its Subsidiaries at such time.
Corporate Member shall mean Beaufort Dedicated No 2 Limited, a corporation
incorporated under the laws of England & Wales, which is a Member.
Dollar and the symbol $ shall mean lawful money of the United States of America.
Economic Capital Assessment Requirement shall have the meaning given to it in
the Lloyd's Membership and Underwriting Conditions and Requirements (Funds at
Lloyd's) (M&URs);
EEA Member Country shall mean any member state of the European Union, Iceland,
Liechtenstein and Norway.
Eligible Asset Rules shall mean the eligible assets rules as set out in the
Handbook (or as otherwise prescribed by Lloyd's from time to time).
Environmental Laws shall mean all applicable federal, state, local, tribal,
territorial and foreign Laws (including common law), constitutions, statutes,
treaties, regulations, rules, ordinances and codes and any consent decrees,
settlement agreements, judgments, orders, directives, policies or programs
issued by or entered into with an Official Body pertaining or relating to:
(i) pollution or pollution control; (ii) protection of human health from
exposure to regulated substances; (iii) protection of the environment and/or
natural resources; (iv) employee safety in the workplace; (v) the presence, use,
management, generation, manufacture, processing, extraction, treatment,
recycling, refining, reclamation, labeling, packaging, sale, transport, storage,
collection, distribution, disposal or release or threat of release of regulated
substances; (vi) the presence of contamination; (vii) the protection of
endangered or threatened species; and (viii) the protection of environmentally
sensitive areas.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as the
same may be amended or supplemented from time to time, and any successor statute
of similar import, and the rules and regulations thereunder, as from time to
time in effect.
ERISA Affiliate shall mean, at any time, any trade or business (whether or not
incorporated) under common control with the Borrower and are treated as a single
employer under Section 414 of the Code.
ERISA Event shall mean (a) a reportable event (under Section 4043 of ERISA and
regulations thereunder) with respect to a Pension Plan; (b) a withdrawal by the
Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial employer (as defined in
Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing of a
notice of intent to terminate, the treatment of a Plan amendment as a
termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
an event or condition which constitutes grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan or Multiemployer Plan; or (f) the imposition of any liability under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, upon the Borrower or any ERISA Affiliate.
ERISA Group shall mean, at any time, the Borrower and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control and all other entities which, together with
the Borrower, are treated as a single employer under Section 414 of the Code.
EU Bail-In Legislation Schedule shall mean the document described as such and
published by the Loan Market Association (or any successor person) from time to
time.
Event of Default shall mean any of the events described in Section 7.1 and
referred to therein as an “Event of Default.”
Excluded Taxes shall mean any of the following Taxes imposed on or with respect
to the Bank or required to be withheld or deducted from a payment to the Bank,
(a) Taxes imposed on or measured by net income (however denominated), franchise
Taxes, and branch profits Taxes, in each case, (i) imposed as a result of the
Bank being organized under the laws of, or having its principal office or its
lending office located in the jurisdiction imposing such Tax (or any political
subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. federal
withholding Taxes imposed on amounts payable to or for the account of the Bank
with respect to an applicable interest in a Letter of Credit Borrowing or LC
Commitment pursuant to a law in effect on the date on which (i) the Bank
acquires such interest in a Letter of Credit Borrowing or LC Commitment or (ii)
the Bank changes its lending office, except in each case to the extent that,
pursuant to Section 3.3, amounts with respect to such Taxes were payable either
to the Bank's assignor immediately before the Bank became a party hereto or to
the Bank immediately before it changed its lending office, (c) Taxes
attributable to the Bank's failure to comply with Section 3.3.5 and (d) any U.S.
federal withholding Taxes imposed under FATCA.
Executive Order No. 13224 shall mean the Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001, as the same has been, or shall
hereafter be, renewed, extended, amended or replaced.
Existing Asset shall have the meaning specified in the Substitution Letter.
Expiration Date shall mean February 26, 2023.
FAL LC Documents shall mean this Agreement, any Intercompany Subordination
Agreement, any security agreement or control agreement entered into in
connection with Cash Collateralizing the Letter of Credit Obligations as
contemplated hereby and, from and after the Completion Date, any other
instruments, certificates or documents delivered in connection herewith or
therewith.
FATCA shall mean Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with) and any current or future
regulations or official interpretations thereof and any agreement entered into
pursuant to Section 1471(b)(1) of the Code.
FCPA shall mean the Foreign Corrupt Practices Act of 1977, as amended.
Federal Funds Effective Rate for any day shall mean the rate per annum (based on
a year of 360 days and actual days elapsed and rounded upward to the nearest
1/100 of 1%) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates on overnight
federal funds transactions arranged by federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or any
successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the “Federal Funds
Effective Rate” as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
“Federal Funds Effective Rate” for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
Financial Conduct Authority shall mean the Financial Conduct Authority in the
United Kingdom and any regulatory body which succeeds to one or more of the
functions and/or duties performed by it as at the date of this Agreement.
Funds at Lloyd's or FAL has the meaning given to it under paragraphs 16 and 17
of the Membership Byelaw (No. 5 of 2005).
GAAP shall mean generally accepted accounting principles in the United States of
America as are in effect from time to time, subject to the provisions of
Section 1.3, and applied on a consistent basis both as to classification of
items and amounts.
Guaranty of any Person shall mean any obligation of such Person guaranteeing or
having the economic effect of guaranteeing any liability or obligation of any
other Person in any manner, whether directly or indirectly, including any
agreement to indemnify or hold harmless any other Person, except endorsement of
negotiable or other instruments for deposit or collection in the ordinary course
of business; provided however, that term Guaranty shall not include (a) trade
payables (including payables under insurance contracts and reinsurance payables)
and accrued expenses, in each case arising in the ordinary course of business,
(b) obligations with respect to surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of business
and (c) obligations with respect to Policies.
Handbook means the Prudential Regulation Authority’s Rulebook and guidance or
the Financial Conduct Authority Handbook of Rules and Guidance, as, in either
case, is applicable (each as amended and replaced from time to time).
IFRS shall mean the International Financial Reporting Standards issued by the
International Accounting Standards Board (“IASB”) (including those International
Accounting Standards issued by the International Accounting Standards Committee
(“IASC”) which have been adopted by the IASB, as well as interpretations of
International Financial Reporting Standards developed by the International
Financial Reporting Interpretations Committee (and predecessor bodies) and
approved by the IASB, as endorsed by the European Union, from time to time in
effect and applied on a consistent basis both as to classification of items and
amounts.
Indebtedness shall mean, as to any Person at any time, any and all indebtedness,
obligations or liabilities (whether matured or unmatured, liquidated or
unliquidated, direct or indirect, absolute or contingent, or joint or several)
of such Person for or in respect of: (i) borrowed money, (ii) amounts raised
under or liabilities in respect of any note purchase or acceptance credit
facility, (iii) reimbursement obligations (contingent or otherwise) under any
letter of credit agreement, (iv) obligations under any currency swap agreement,
interest rate swap, cap, collar or floor agreement or other interest rate
management device, (v) any other transaction (including forward sale or purchase
agreements, capitalized leases and conditional sales agreements) having the
commercial effect of a borrowing of money entered into by such Person to finance
its operations or capital requirements (but not including trade payables and
accrued expenses incurred in the ordinary course of business which are not
represented by a promissory note or other evidence of indebtedness and which are
not more than sixty (60) days past due), or (vi) any Guaranty of Indebtedness
for borrowed money; provided that Indebtedness shall not include (x) trade
payables (including payables under insurance contracts and reinsurance payables)
and accrued expenses, in each case arising in the ordinary course of business
and (y) obligations with respect to Policies.
Indemnified Taxes shall mean (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Borrower under any FAL LC Document and (b) to the extent not otherwise described
in (a), Other Taxes.
Indemnitee shall have the meaning specified in Section 8.3.2.
Information shall mean all information received from the Borrower or any of its
Subsidiaries relating to the Borrower or such Subsidiary or any of their
respective businesses, other than any such information that is available to the
Bank on a non‑confidential basis prior to disclosure by the Borrower or any of
its Subsidiaries.
Insignificant Subsidiary shall mean any Subsidiary which has revenues in an
amount less than 5% of the consolidated revenues of the Company and its
Subsidiaries as of the end of the most recent fiscal quarter of the Company for
which financial statements are available.
Insolvency Proceeding shall mean, with respect to any Person, (a) a case, action
or proceeding with respect to such Person (i) before any court or any other
Official Body under any bankruptcy, insolvency, reorganization or other similar
Law now or hereafter in effect, or (ii) for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar
official) of the Borrower or otherwise relating to the liquidation, dissolution,
winding-up or relief of such Person, or (b) any general assignment for the
benefit of creditors, composition, marshaling of assets for creditors, or other,
similar arrangement in respect of such Person’s creditors generally or any
substantial portion of its creditors; undertaken under any Law.
Insurance Code shall mean, with respect to any Insurance Company, the applicable
insurance code or Law (including regulations) of such Insurance Company’s
domicile which governs the licensing of companies who engage in the insurance or
reinsurance business and the issuance of insurance or reinsurance.
Insurance Company shall mean any Subsidiary which is subject to the regulation
of, and is required to file statements with, any governmental body, agency or
official in any jurisdiction which regulates insurance and/ or reinsurance
companies or the doing of an insurance and/ or reinsurance business therein.
Intercompany Subordination Agreement shall mean a Subordination Agreement among
the Borrower and certain of its Subsidiaries in the form attached hereto as
Exhibit 1.
IRS shall mean the Internal Revenue Service.
ISP98 shall mean the rules of the International Standby Practices (ICC
Publication Number 590), as determined by the Bank.
Knowledge shall mean to the knowledge of any “named executive officer” (as
defined in rules promulgated by the SEC) of the Borrower.
Law shall mean any law (including common law), constitution, statute, code,
treaty, regulation, rule, ordinance, ruling, order, injunction, writ, decree or
judgment, including the interpretation or administration thereof by any Official
Body charged with the enforcement, interpretation or administration thereof, and
all applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Official Body, in each
case whether or not having the force of law.
LC Commitment shall mean the amount initially set forth opposite the Bank's name
on Schedule 1.1(B) in the column labeled “Amount of LC Commitment for the Letter
of Credit,” as such LC Commitment may thereafter be assigned or modified in
accordance with the terms of this Agreement.
Letter of Comfort shall mean a comfort letter from Lloyd's substantially in the
form set out in Exhibit 2 or in such other form as the Borrower and the Bank may
otherwise agree.
Letter of Credit shall have the meaning specified in Section 2.1.
Letter of Credit Application shall mean an application for the issuance or
amendment of a Letter of Credit in the form from time to time in use by, or
otherwise acceptable to, the Bank.
Letter of Credit Borrowing shall have the meaning specified in Section 2.2.3.
Letter of Credit Fee shall have the meaning specified in Section 2.2.2.
Letter of Credit Obligation shall mean, as of any date of determination, the
aggregate amount available to be drawn under the Letter of Credit on such date
plus, without duplication, the aggregate Reimbursement Obligations and Letter of
Credit Borrowings on such date. For all purposes of this Agreement, if on any
date of determination the Letter of Credit has expired by its terms but any
amount may still be drawn thereunder by reason of the operation of Rule 3.14 of
the ISP98 (or another rule or contractual provision having a similar effect),
the Letter of Credit shall be deemed to be outstanding in the amount so
remaining available to be drawn.
LIBOR Rate shall mean, for any day, the rate per annum determined by the Bank by
dividing (x) the Published Rate by (y) a number equal to 1.00 minus the LIBOR
Reserve Percentage on such day. Notwithstanding the foregoing, if such rate
would be less than zero (0.00), such rate shall be deemed to be zero (0.00) for
purposes of this Agreement.
LIBOR Reserve Percentage shall mean as of any day the maximum percentage in
effect on such day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirements
(including supplemental, marginal and emergency reserve requirements) with
respect to eurocurrency funding.
Licenses shall have the meaning specified in Section 4.1.15.
Lien shall mean any mortgage, deed of trust, pledge, lien, security interest,
charge or other encumbrance or security arrangement of any nature whatsoever,
whether voluntarily or involuntarily given, including any conditional sale or
title retention arrangement, and any assignment, deposit arrangement or lease
intended as, or having the effect of, security and any filed financing statement
or other notice of any of the foregoing (whether or not a lien or other
encumbrance is created or exists at the time of the filing).
Lloyd's shall mean the Society incorporated by the Lloyd's Act 1871 by the name
Lloyd's.
Lloyd’s Syndicate Accounting Rules shall mean the Lloyd’s syndicate accounting
rules within the meaning of the Definitions Byelaw (No. 7 of 2005).
Managed Syndicate shall mean Syndicate 318; provided, that, the Managed
Syndicate shall at all times be managed by the Managing Agent.
Managing Agent shall mean Beaufort Underwriting Agency Ltd.
Material Adverse Change shall mean any set of circumstances or events which
(a) has any material adverse effect whatsoever upon the validity or
enforceability of this Agreement or any other FAL LC Document, (b) is material
and adverse to the business, properties, assets, financial condition or results
of operations of the Borrower and its Subsidiaries, taken as a whole,
(c) materially impairs the ability of the Borrower and its Subsidiaries, taken
as a whole, to duly and punctually pay or perform any of the Obligations, or
(d) impairs materially the ability of the Bank to enforce its legal remedies
pursuant to this Agreement or any other FAL LC Document.
Member shall mean an underwriting member of Lloyd's.
Minimum Collateral Amount shall mean, at any time, (i) with respect to Cash
Collateral consisting of cash or deposit account balances, an amount equal to
105% of the aggregate amount of the Letter of Credit Obligations of the Bank
with respect to the Letter of Credit issued and outstanding at such time (or for
which Reimbursement Obligations exist) and (ii) otherwise, an amount determined
by the Bank in its sole discretion.
Multiemployer Plan shall mean any employee benefit plan which is a
“multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA and to
which the Borrower or any member of the ERISA Group is then making or accruing
an obligation to make contributions or, within the preceding five Plan years,
has made or had an obligation to make such contributions.
New York Business Day shall mean any day other than a Saturday or Sunday or a
legal holiday on which commercial banks are authorized or required to be closed
for business in New York, New York.
Obligation shall mean any obligation or liability of the Borrower, howsoever
created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, under or in
connection with this Agreement, the Letter of Credit, or any other FAL LC
Document whether to the Bank or its Affiliates or other persons provided for
under such FAL LC Documents.
Official Body shall mean the government of the United States of America or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body (including Lloyd's),
court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).
Other Connection Taxes shall mean, with respect to the Bank, Taxes imposed as a
result of a present or former connection between the Bank and the jurisdiction
imposing such Tax (other than connections arising from the Bank having executed,
delivered, become a party to, performed its obligations under, received payments
under, received or perfected a security interest under, engaged in any other
transaction pursuant to or enforced any FAL LC Document, or sold or assigned an
interest in any Letter of Credit Borrowing or FAL LC Document).
Other Taxes shall mean all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any FAL LC Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment.
Own FAL shall mean, in relation to the Corporate Member, such part of its FAL
(if any) as is provided by the Borrower or the Corporate Member by way of cash
and/or investments and/or covenant and charge or otherwise as permitted by
Lloyd's from time to time (which shall be valued by Lloyd's in accordance with
its usual practice), excluding any FAL provided in response to a Solvency
Deficit.
Participant has the meaning specified in Section 8.8.4.
Participant Register shall have the meaning specified in Section 8.8.4.
Payment Date shall mean the last day of each calendar quarter ending after the
date hereof and the Expiration Date.
Payment In Full shall mean the indefeasible payment in full in cash of all
Obligations hereunder, termination of the LC Commitment and expiration or
termination of the Letter of Credit.
PBGC shall mean the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA or any successor.
Pension Plan shall mean any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
times during the immediately preceding five plan years.
Permitted Liens shall mean:
(i)    Liens for taxes, assessments, or similar charges, incurred in the
ordinary course of business and which are not yet due and payable;
(ii)    Pledges or deposits made in the ordinary course of business to secure
payment of workmen’s compensation, or to participate in any fund in connection
with workmen’s compensation, unemployment insurance, old-age pensions or other
social security programs;
(iii)    Liens of mechanics, materialmen, warehousemen, carriers, or other like
Liens, securing obligations incurred in the ordinary course of business that are
not yet due and payable and Liens of landlords securing obligations to pay lease
payments that are not yet due and payable or in default;
(iv)    Encumbrances consisting of zoning restrictions, easements or other
restrictions on the use of real property, none of which materially impairs the
use of such property or the value thereof, and none of which is violated in any
material respect by existing or proposed structures or land use;
(v)    Liens on property leased by the Borrower or any of its Subsidiaries under
capital and operating leases securing obligations of the Borrower or such
Subsidiary to the lessor under such leases;
(vi)    Any Lien existing on the date of this Agreement and described on
Schedule 1.1(P), provided that the principal amount secured thereby is not
hereafter increased, and no additional assets become subject to such Lien;
(vii)    Liens securing obligations owed by the Borrower to any of its
Subsidiaries or owed by any Subsidiary to the Borrower or any Subsidiary, in
each case solely to the extent that such Liens are required by an Applicable
Insurance Regulatory Authority for such Person to maintain such obligations;
(viii)    Purchase Money Security Interests;
(ix)    The following, if (A) the validity or amount thereof is being contested
in good faith by appropriate and lawful proceedings diligently conducted so long
as levy and execution thereon have been stayed and continue to be stayed or
(B) they do not, in the aggregate, materially impair the ability of the Borrower
to perform its Obligations hereunder or under the other FAL LC Documents:
(1)    Claims or Liens for taxes, assessments or charges due and payable and
subject to interest or penalty; provided that the Borrower or its applicable
Subsidiary maintains such reserves or other appropriate provisions as shall be
required by GAAP and pays all such taxes, assessments or charges forthwith upon
the commencement of proceedings to foreclose any such Lien;
(2)    Claims, Liens or encumbrances upon, and defects of title to, real or
personal property, including any attachment of personal or real property or
other legal process prior to adjudication of a dispute on the merits; or
(3)     Claims or Liens of mechanics, materialmen, warehousemen, carriers, or
other statutory nonconsensual Liens;
(x)    Liens granted or subsisting under any deed or agreement required by
Lloyd’s or the Prudential Regulation Authority to be executed or entered into by
or on behalf of the Borrower or any of its Subsidiaries in connection with any
of its Subsidiaries' insurance business at Lloyd's;
(xi)    Liens over or affecting any asset forming part of a trust fund (or, in
the case of reinsurance recoveries or other things in action, whose proceeds
will form part of a trust fund) which is held subject to the provisions of any
deed or agreement of the kind referred to in clause (x) above, where that Lien
is created to secure obligations arising under a Syndicate Arrangement;
(xii)    Liens in connection with funds on deposit with a state or an Applicable
Insurance Regulatory Authority, or in connection with the collateralization of
an obligation required by the same;
(xiii)    Liens granted under the FAL LC Documents; and
(xiv)    Liens not otherwise permitted by clauses (i) through (xiii) hereof;
provided that (A) the aggregate amount of Indebtedness at any time secured
thereby shall not exceed $25,000,000 and (B) the aggregate book value of the
assets at any time subject to such Lien shall not exceed $50,000,000.
Person shall mean any individual, corporation, partnership, limited liability
company, association, joint-stock company, trust, unincorporated organization,
joint venture, government or political subdivision or agency thereof, or any
other entity.
Plan shall mean at any time an employee pension benefit plan (including a
Multiple Employer Plan, but not a Multiemployer Plan) which is covered by Title
IV of ERISA or is subject to the minimum funding standards under Section 412 of
the Code and either (i) is maintained by any member of the ERISA Group for
employees of any member of the ERISA Group or (ii) has at any time within the
preceding five years been maintained by any entity which was at such time a
member of the ERISA Group for employees of any entity which was at such time a
member of the ERISA Group.
Policies shall mean all insurance and reinsurance policies, annuity contracts,
guaranteed interest contracts and funding agreements (including riders to any
such policies or contracts, certificates issued with respect to group life
insurance or annuity contracts and any contracts issued in connection with
retirement plans or arrangements) and assumption certificates issued or to be
issued (or filed pending current review by applicable Official Bodies) by any
Insurance Company and any coinsurance agreements entered into or to be entered
into by an Insurance Company.
Potential Default shall mean any event or condition which with notice or passage
of time, or both, would constitute an Event of Default.
Principal Office shall mean the main banking office of the Bank in Toronto,
Ontario.
Prudential Regulation Authority shall mean the Prudential Regulation Authority
in the United Kingdom and any regulatory body which succeeds to one or more of
the functions and/or duties performed by it as at the date of this Agreement.
Published Rate shall mean the rate of interest published each Business Day in
The Wall Street Journal “Money Rates” listing under the caption “London
Interbank Offered Rates” for a one month period (or, if no such rate is
published therein for any reason, then the Published Rate shall be the rate at
which Dollar deposits are offered by leading banks in the London interbank
deposit market for a one month period as published in another publication
selected by the Bank in its reasonable discretion); provided that, for any day
that is not a Business Day, the Published Rate for such day shall be the
Published Rate as in effect on the most recent Business Day.
Purchase Money Security Interest shall mean Liens upon tangible personal
property securing loans to the Borrower or any of its Subsidiaries or deferred
payments by the Borrower or such Subsidiary for the purchase of such tangible
personal property.
Quarterly Monitoring Return shall mean the information to be provided by the
Borrower in relation to the Managed Syndicate pursuant to Section 6.3.3 in the
format agreed between the Bank and the Borrower on or before the date of this
Agreement.
Realistic Disaster Scenario shall mean any realistic disaster scenario presented
in a business plan prepared in relation to the Managed Syndicate under paragraph
35 of the Underwriting Byelaw (No. 2 of 2003) which shows the potential impact
on the Managed Syndicate of a catastrophic event.
Reimbursement Date shall have the meaning specified in Section 2.2.3.
Reimbursement Obligation shall have the meaning specified in Section 2.2.3.
Related Parties shall mean, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person’s Affiliates.
Relief Proceeding shall mean any proceeding seeking a decree or order for relief
in respect of the Borrower or any of its Subsidiaries in a voluntary or
involuntary case under any applicable bankruptcy, insolvency, reorganization or
other similar law now or hereafter in effect, or for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of the Borrower or any of its Subsidiaries for any
substantial part of its property, or for the winding-up or liquidation of its
affairs, or an assignment for the benefit of its creditors.
Resolution Authority shall mean any body which has authority to exercise any
Write-down and Conversion Powers.
Return Deadline Date shall have the meaning specified in Section 6.1.17.
Sanctioned Country shall mean a country or territory which is subject to
general, country wide trade, economic or financial sanctions or embargoes
imposed, administered or enforced by:
(a)    the United States of America (including the Office of Foreign Assets
Control of the U.S. Department of the Treasury, and the U.S. Department of
State);
(b)    the United Nations;
(c)    the European Union;
(d)    Her Majesty’s Treasury, and the Foreign and Commonwealth Office of the
United Kingdom;
(e)    Canada (including the Canadian Ministry for Foreign Affairs and Global
Affairs Canada); or
(f)    any other relevant authority having jurisdiction over the Borrower, or
any of its Subsidiaries, or the Bank, as applicable.
Sanctioned Person shall mean any individual person, group, regime, entity or
thing listed or otherwise recognized as a specially designated, prohibited,
sanctioned or debarred person, group, regime, entity or thing, or subject to any
limitations or prohibitions (including but not limited to the blocking of
property or rejection of transactions), under any Anti-Terrorism Law.
SAP shall mean, as to each Insurance Company, the statutory accounting practices
prescribed or permitted by the Applicable Insurance Regulatory Authority for the
preparation of its financial statements and other reports by insurance
corporations of the same type as such Insurance Company in effect on the date
such statements or reports are to be prepared.
SEC shall mean the United States Securities and Exchange Commission or any
successor entity.
Solvency Deficit shall have the meaning given to it in the Lloyd's Membership
and Underwriting Conditions and Requirements (Funds at Lloyd's) (M&URs).
Solvent shall mean, with respect to any Person on any date of determination,
taking into account such right of reimbursement, contribution or similar right
available to such Person from other Persons, that on such date (i) the fair
value of the property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person, (ii) the present fair saleable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (iii) such Person is
able to realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal course
of business, (iv) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person’s ability to pay as such
debts and liabilities mature, and (v) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person’s property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which
such Person is engaged. In computing the amount of contingent liabilities at any
time, it is intended that such liabilities will be computed at the amount which,
in light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability.
Statements shall have the meaning specified in Section 4.1.6(i).
Statutory Statement shall mean, for any Insurance Company, for any fiscal year
of such Insurance Company, the most recent Annual Statement or Quarterly
Statement (if any) filed with the Applicable Insurance Regulatory Authority,
which Statutory Statements shall be prepared in accordance with SAP.
Subordinated Funds at Lloyd's shall have the meaning specified in Section 2.3.2.
Subsidiary of any Person at any time shall mean any corporation, trust,
partnership, any limited liability company or other business entity (i) of which
more than 50% of the outstanding voting securities or other interests normally
entitled to vote for the election of one or more directors or trustees
(regardless of any contingency which does or may suspend or dilute the voting
rights) is at such time owned directly or indirectly by such Person or one or
more of such Person’s Subsidiaries, or (ii) which is controlled or capable of
being controlled by such Person or one or more of such Person’s Subsidiaries.
Subsidiary Equity Interests shall have the meaning specified in Section 4.1.2.
Substitution Date shall mean the date on which the Letter of Credit issued
hereunder replaces the Existing Asset upon a “Deemed Confirmation” in accordance
with (and as defined in) the Substitution Letter.
Substitution Letter shall mean the substitution letter between Lloyd's, the
Borrower and the other parties thereto substantially in the form set out in
Exhibit 3 or in such other form as the Bank may otherwise agree.
Syndicate Arrangement shall mean any arrangement (whether pursuant to
guarantees, letters of credit or otherwise) entered into by the Managing Agent
on behalf of the Corporate Member, together with the other Members of the
Managed Syndicate with respect to financing or reinsurance for the purposes of
or in connection with the underwriting business carried on by all such Members
of the Managed Syndicate.
Taxes shall mean all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), assessments, fees or
other charges imposed by any Official Body, including any interest, additions to
tax or penalties applicable thereto.
Total FAL shall mean the total FAL requirement of the Corporate Member in
respect of the Managed Syndicate, excluding any FAL provided in response to a
Solvency Deficit.
Unused LC Commitment shall mean, at any time: (a) the Bank's LC Commitment at
such time, minus (b) the Letter of Credit Obligation outstanding at such time.
USA Patriot Act shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.
Unfunded Solvency Deficit shall have the meaning specified in Section 2.4.3.
U.S. Person shall mean any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.
U.S. Tax Compliance Certificate has the meaning assigned to such term in Section
3.3.5.
Write-down and Conversion Powers shall mean:
(i)    in relation to any Bail-In Legislation described in the EU Bail-In
Legislation Schedule from time to time, the powers described as such in relation
to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and
(ii)    in relation to any other applicable Bail-In Legislation:
(a)    any powers under that Bail-In Legislation to cancel, transfer or dilute
shares issued by a person that is a bank or investment firm or other financial
institution or affiliate of a bank, investment firm or other financial
institution, to cancel, reduce, modify or change the form of a liability of such
a person or any contract or instrument under which that liability arises, to
convert all or part of that liability into shares, securities or obligations of
that person or any other person, to provide that any such contract or instrument
is to have effect as if a right had been exercised under it or to suspend any
obligation in respect of that liability or any of the powers under that Bail-In
Legislation that are related to or ancillary to any of those powers; and
(b)    any similar or analogous powers under that Bail-In Legislation.

1.2    Construction. Unless the context of this Agreement otherwise clearly
requires, the following rules of construction shall apply to this Agreement and
each of the other FAL LC Documents: (i) references to the plural include the
singular, the plural, the part and the whole and the words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation”; (ii) the words “hereof,” “herein,” “hereunder,” “hereto” and
similar terms in this Agreement or any other FAL LC Document refer to this
Agreement or such other FAL LC Document as a whole; (iii) article, section,
subsection, clause, schedule and exhibit references are to this Agreement or
other FAL LC Document, as the case may be, unless otherwise specified; (iv)
reference to any Person includes such Person’s successors and assigns; (v)
reference to any agreement, including this Agreement and any other FAL LC
Document together with the schedules and exhibits hereto or thereto, document or
instrument means such agreement, document or instrument as amended, modified,
replaced, substituted for, superseded or restated; (vi) relative to the
determination of any period of time, “from” means “from and including,” “to”
means “to but excluding,” and “through” means “through and including”; (vii) the
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights; (viii)
section headings herein and in each other FAL LC Document are included for
convenience and shall not affect the interpretation of this Agreement or such
FAL LC Document; and (ix) unless otherwise specified, all references herein to
times of day shall be references to Eastern Time.

1.3    Accounting Principles. Except as otherwise provided in this Agreement,
all computations and determinations as to accounting or financial matters and
all financial statements to be delivered pursuant to this Agreement shall be
made and prepared in accordance with GAAP (including principles of consolidation
where appropriate) or SAP, as the context requires, and all accounting or
financial terms shall have the meanings ascribed to such terms by GAAP or SAP,
as the case may be; provided, however, that all accounting terms used in
Section 6.2 (and all defined terms used in the definition of any accounting term
used in Section 6.2 shall have the meaning given to such terms (and defined
terms) under GAAP as in effect on the date hereof applied on a basis consistent
with those used in preparing Statements referred to in Section 4.1.6(i). If
after the Borrower migrates to IFRS or there occurs any change in GAAP or in the
application thereof that would affect the computation of any financial ratio or
requirement set forth in any FAL LC Document and the Borrower notifies the Bank
that the Borrower requests an amendment to any provision hereof to eliminate the
effect of such migration to IFRS or change in GAAP or in the application thereof
(or if the Bank notifies the Borrower that it requests an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such migration to IFRS or change in GAAP or in the
application thereof, then the parties hereto agree to endeavor, in good faith,
to amend such ratio or requirement to preserve the original intent thereof in
light of such change, but would allow compliance therewith to be determined in
accordance with the Borrower’s financial statements at that time, provided that,
until so amended such financial covenants shall continue to be computed in
accordance with GAAP as in effect and applied immediately before such migration
or change.

1.4    Completion Date Subsidiaries. With respect to any condition,
representation, warranty, covenant or Event of Default in this Agreement that
relates to a Subsidiary of the Borrower, the Managing Agent, the Corporate
Member or the Managed Syndicate, any such representation or warranty shall be
deemed to be made in respect of any Subsidiary that is a Completion Date
Subsidiary (including the Managing Agent and the Corporate Member), the Managed
Syndicate or the Existing Asset, as applicable, as of the Completion Date and
shall not, notwithstanding anything to the contrary in this Agreement, be made
at any time prior to the Completion Date.

2.    LETTER OF CREDIT FACILITY

2.1    Letter of Credit Facility. The Bank agrees, on the terms and conditions
hereinafter set forth, to issue (or cause an Affiliate that is a commercial bank
and an Approved Credit Institution to issue on its behalf) a standby funds at
Lloyd's letter of credit in Dollars, substantially in the form of Exhibit 4 (the
“Letter of Credit”) for the benefit of Lloyd's to support the underwriting
business of the Corporate Member at Lloyd's.

2.2    Letter of Credit.

2.2.1    Issuance of Letter of Credit. The Borrower may at any time during the
Availability Period request the issuance of a Letter of Credit for the benefit
of the Lloyd's for the purpose of supporting the underwriting business of the
Corporate Member at Lloyd's, by delivering to the Bank a completed Letter of
Credit Application, in such form as the Bank may specify from time to time, by
no later than 11:00 a.m. at least two (2) Business Days, or such shorter period
as may be agreed to by the Bank, in advance of the proposed date of issuance of
the Letter of Credit. After receipt of a Letter of Credit Application complying
with the terms of this Agreement, unless the Bank determines that one or more
applicable conditions in Section 5 is not satisfied, then, subject to the terms
and conditions hereof, the Bank or any of the Bank’s Affiliates will, in
accordance with this Agreement, issue the Letter of Credit, provided that each
Letter of Credit shall (A) be denominated in Dollars and (B) in no event expire
later than the then current Expiration Date, and provided further that in no
event shall the aggregate Letter of Credit Obligations and the Unused LC
Commitment (including after giving effect to the issuance of the Letter of
Credit) exceed, at any time the LC Commitment. The request by the Borrower for
the issuance of the Letter of Credit shall be deemed to be a representation by
the Borrower that it shall be in compliance with the preceding sentence and each
applicable condition in Section 5 shall be satisfied after giving effect to the
requested issuance of the Letter of Credit. Promptly after its delivery of the
Letter of Credit or any amendment to the Letter of Credit to the beneficiary
thereof, the Bank will also deliver to the Borrower a true and complete copy of
the Letter of Credit or amendment.

2.2.2    Letter of Credit Fees.
2.2.2.1    The Borrower agrees to pay to the Bank: (a) an upfront fee equal to
0.15% of the LC Commitment on the Closing Date, which upfront fee shall be
nonrefundable when paid and shall be due and payable (x) 50%, on February 28,
2019 and (y) 50%, on the earliest to occur, if any, of (i) the Completion Date,
(ii) the Cash Collateralization Date, or (iii) the failure of the Borrower to
cause the Letter of Credit to be returned to the Bank on or prior to the Return
Deadline Date as contemplated by clause (ii) of Section 6.1.17 (without giving
effect to the proviso thereof); (b) on the last Business Day of the Availability
Period, for the period from the Closing Date until the end of the Availability
Period, a nonrefundable commitment fee (the “Commitment Fee”) equal to 0.20%
(computed on the basis of a year of 365 days, and the actual number of days in
such period) multiplied by the average amount by which, during the Availability
Period, (i) the LC Commitment exceeds (ii) the Letter of Credit Obligations; and
(c) subject to Section 8.4, in arrears on each Payment Date, a fee (the “Letter
of Credit Fee”) calculated daily and equal to (i) the daily amount of the Letter
of Credit Obligations on each day during such calendar quarter multiplied by
(ii) the Applicable Letter of Credit Fee Rate (computed on the basis of a year
of 365 days, and the actual number of days in such period).
2.2.2.2    All fees payable under this Section 2.2.2 shall be calculated and
payable in Dollars.

2.2.3    Disbursements, Reimbursement. In the event of any request for a drawing
under the Letter of Credit by the beneficiary or transferee thereof, the Bank
will promptly notify the Borrower thereof. The Borrower shall reimburse the Bank
in Dollars prior to 12:00 noon (New York time) on the third New York Business
Day (the "Reimbursement Date") immediately following the date on which an amount
is paid by the Bank under the Letter of Credit by paying to the Bank the amount
so paid by the Bank (such obligation to reimburse the Bank shall sometimes be
referred to as a “Reimbursement Obligation”). In the event the Borrower fails to
reimburse the Bank for the full amount of any drawing under the Letter of Credit
by 12:00 noon (New York time) on the Reimbursement Date, the Borrower shall be
deemed to have incurred from the Bank a borrowing (each a “Letter of Credit
Borrowing”) in the amount of such drawing. Each Letter of Credit Borrowing shall
be due and payable on demand (together with interest) and shall bear interest at
a rate per annum equal to the LIBOR Rate plus 3.0%.

2.2.4    Documentation. The Borrower agrees to be bound by the terms of the
Bank’s Letter of Credit Application and the Bank’s written regulations and
customary practices relating to letters of credit, though such interpretation
may be different from the Borrower’s own. In the event of a conflict between the
Letter of Credit Application and this Agreement, this Agreement shall govern. It
is understood and agreed that, except in the case of gross negligence or willful
misconduct, the Bank shall not be liable for any error, negligence and/or
mistakes, whether of omission or commission, in following the Borrower’s
instructions or those contained in the Letter of Credit or any modifications,
amendments or supplements thereto.

2.2.5    Determinations to Honor Drawing Requests. In determining whether to
honor any request for drawing under the Letter of Credit by the beneficiary
thereof, the Bank shall be responsible only to determine that the documents and
certificates required to be delivered under the Letter of Credit have been
delivered and that they comply on their face with the requirements of the Letter
of Credit.

2.2.6    Nature of Reimbursement Obligations. The Obligations of the Borrower to
reimburse the Bank upon a draw under the Letter of Credit, shall be absolute,
unconditional and irrevocable. The Obligations of the Borrower shall be
performed strictly in accordance with the terms of this Section 2.2 under all
circumstances, including the following circumstances:
(i)    any set-off, counterclaim, recoupment, defense or other right which the
Bank may have against the Borrower or any other Person for any reason
whatsoever, or which the Borrower may have against the Bank or any of its
Affiliates, or any other Person for any reason whatsoever;
(ii)    the failure of the Borrower or any other Person to comply, in connection
with a Letter of Credit Borrowing or with the conditions set forth in
Section 5.2, it being acknowledged that such conditions are not required for the
making of a Letter of Credit Borrowing;
(iii)    any lack of validity or enforceability of the Letter of Credit;
(iv)    any claim of breach of warranty that might be made by the Borrower or
the Bank against any beneficiary of the Letter of Credit, or the existence of
any claim, set-off, recoupment, counterclaim, crossclaim, defense or other right
which the Borrower or the Bank may have at any time against a beneficiary,
successor beneficiary any transferee or assignee of the Letter of Credit or the
proceeds thereof (or any Persons for whom any such transferee may be acting),
the Bank or its Affiliates or any other Person, whether in connection with this
Agreement, the transactions contemplated herein or any unrelated transaction
(including any underlying transaction between the Borrower or its Subsidiaries
and the beneficiary for which the Letter of Credit was procured);
(v)    the lack of power or authority of any signer of (or any defect in or
forgery of any signature or endorsement on) or the form of or lack of validity,
sufficiency, accuracy, enforceability or genuineness of any draft, demand,
instrument, certificate or other document presented under or in connection with
the Letter of Credit, or any fraud or alleged fraud in connection with the
Letter of Credit, or the transport of any property or provision of services
relating to the Letter of Credit, in each case even if the Bank or any of its
Affiliates has been notified thereof;
(vi)    payment by the Bank or any of its Affiliates under the Letter of Credit
against presentation of a demand, draft or certificate or other document which
does not comply with the terms of the Letter of Credit;
(vii)    the solvency of, or any acts or omissions by, any beneficiary of the
Letter of Credit, or any other Person having a role in any transaction or
obligation relating to the Letter of Credit, or the existence, nature, quality,
quantity, condition, value or other characteristic of any property or services
relating to the Letter of Credit;
(viii)    any failure by the Bank or any of its Affiliates to issue the Letter
of Credit in the form requested by the Borrower, unless the Bank has received
written notice from the Borrower of such failure within three (3) Business Days
after the Bank shall have furnished the Borrower a copy of the Letter of Credit
and such error is material and no drawing has been made thereon prior to receipt
of such notice;
(ix)    any adverse change in the business, operations, properties, assets,
condition (financial or otherwise) or prospects of the Borrower or any of its
Subsidiaries;
(x)    any breach of this Agreement or any other FAL LC Document by any party
thereto;
(xi)    the occurrence or continuance of an Insolvency Proceeding with respect
to the Borrower;
(xii)    the fact that an Event of Default or a Potential Default shall have
occurred and be continuing;
(xiii)    the fact that the Expiration Date shall have passed or this Agreement
or the LC Commitment hereunder shall have been terminated;
(xiv)    any drawing of the Letter of Credit by Lloyd's contrary to the terms of
the Comfort Letter, the Membership Byelaws or any other agreement to which
Lloyd's is bound; and
(xv)    any other circumstance or happening whatsoever, whether or not similar
to any of the foregoing.

2.2.7    Indemnity. The Borrower hereby agrees to protect, indemnify, pay and
save harmless the Bank and any of its Affiliates that has issued the Letter of
Credit from and against any and all claims, demands, liabilities, damages,
taxes, penalties, interest, judgments, losses, costs, charges and expenses
(including reasonable fees, expenses and disbursements of counsel and allocated
costs of internal counsel) which the Bank or any of its Affiliates may incur or
be subject to as a consequence, direct or indirect, of the issuance of the
Letter of Credit, other than as a result of (A) the gross negligence or willful
misconduct of the Bank as determined by a final non-appealable judgment of a
court of competent jurisdiction or (B) the wrongful dishonor by the Bank or any
of Bank’s Affiliates of a proper demand for payment made under the Letter of
Credit, except if such dishonor resulted from any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government or
Official Body.

2.2.8    Liability for Acts and Omissions. As between the Borrower and the Bank,
or the Bank’s Affiliates, the Borrower assumes all risks of the acts and
omissions of, or misuse of the Letter of Credit by, the respective beneficiaries
of the Letter of Credit. In furtherance and not in limitation of the foregoing,
the Bank shall not be responsible for any of the following, including any losses
or damages to the Borrower or other Person or property relating therefrom:
(i) the form, validity, sufficiency, accuracy, genuineness or legal effect of
any document submitted by any party in connection with the application for an
issuance of the Letter of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged (even if
the Bank or its Affiliates shall have been notified thereof); (ii) the validity
or sufficiency of any instrument transferring or assigning or purporting to
transfer or assign the Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (iii) the failure of the beneficiary of the Letter
of Credit, or any other party to which the Letter of Credit may be transferred,
to comply fully with any conditions required in order to draw upon the Letter of
Credit or any other claim of the Borrower against any beneficiary of the Letter
of Credit, or any such transferee, or any dispute between or among the Borrower
and any beneficiary of the Letter of Credit or any such transferee; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, email or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under the Letter of Credit or of the proceeds thereof; (vii) the misapplication
by the beneficiary of the Letter of Credit of the proceeds of any drawing under
the Letter of Credit; or (viii) any consequences arising from causes beyond the
control of the Bank or its Affiliates, as applicable, including any act or
omission of any Official Body, and none of the above shall affect or impair, or
prevent the vesting of, any of the Bank’s or its Affiliates rights or powers
hereunder. Nothing in the preceding sentence shall relieve the Bank from
liability for the Bank’s gross negligence or willful misconduct, as determined
by a final non-appealable judgment of a court of competent jurisdiction, in
connection with actions or omissions described in such clauses (i) through
(viii) of such sentence. In no event shall the Bank or its Affiliates be liable
to the Borrower for any indirect, consequential, incidental, punitive, exemplary
or special damages or expenses (including without limitation attorneys’ fees),
or for any damages resulting from any change in the value of any property
relating to the Letter of Credit.
Without limiting the generality of the foregoing, the Bank and each of its
Affiliates (i) may rely on any oral or other communication believed in good
faith by the Bank or such Affiliate to have been authorized or given by or on
behalf of the applicant for the Letter of Credit, (ii) may honor any
presentation if the documents presented appear on their face substantially to
comply with the terms and conditions of the relevant Letter of Credit; (iii) may
honor a previously dishonored presentation under the Letter of Credit, whether
such dishonor was pursuant to a court order, to settle or compromise any claim
of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to
the same extent as if such presentation had initially been honored, together
with any interest paid by the Bank or its Affiliate; (iv) may honor any drawing
that is payable upon presentation of a statement advising negotiation or
payment, upon receipt of such statement (even if such statement indicates that a
draft or other document is being delivered separately), and shall not be liable
for any failure of any such draft or other document to arrive, or to conform in
any way with the relevant Letter of Credit; (v) may pay any paying or
negotiating bank claiming that it rightfully honored under the laws or practices
of the place where such bank is located; and (vi) may settle or adjust any claim
or demand made on the Bank or its Affiliate in any way related to any order
issued at the applicant’s request to an air carrier, a letter of guarantee or of
indemnity issued to a carrier or any similar document (each an “Order”) and
honor any drawing in connection with the Letter of Credit that is the subject of
such Order, notwithstanding that any drafts or other documents presented in
connection with the Letter of Credit fail to conform in any way with the Letter
of Credit.
In furtherance and extension and not in limitation of the specific provisions
set forth above, any action taken or omitted by the Bank or its Affiliates under
or in connection with the Letter of Credit issued by it or any documents and
certificates delivered thereunder, if taken or omitted in good faith, shall not
put the Bank or its Affiliates under any resulting liability to the Borrower.

2.3    Purpose and Application.

2.3.1    Purpose. The Letter of Credit issued hereunder (i) shall be requested
by, and issued on behalf of, the Borrower and (ii) is intended to provide Funds
at Lloyd's (excluding any Funds at Lloyd's in respect of any Solvency Deficit)
for the general business at Lloyd's of the Corporate Member for the 2019 year of
account and each prior open year of account of the Managed Syndicate. For so
long as the Letter of Credit issued hereunder is deposited at Lloyd's, the
Borrower shall cause the Letter of Credit to be used solely to provide Funds at
Lloyd’s to support the general business at Lloyd’s of the Corporate Member for
the 2019 year of account and each prior open year of account. The Bank shall not
be obliged to monitor or verify such use by the Borrower or the Corporate
Member.

2.3.2    Letter of Credit Subordinated . Each of the parties hereto agrees and
acknowledges that, subject to the duties of Lloyd's as trustee of all Funds at
Lloyd's and to any conditions and requirements prescribed under the Membership
Byelaw (No. 5 of 2005) which are for the time being applicable, each Letter of
Credit will, from and after the Substitution Date, provide Funds at Lloyd's for
the Corporate Member which, to the extent within the Borrower’s control and in
accordance with the Letter of Comfort, shall only be applied after all other
Funds at Lloyd's of the Corporate Member (collectively, the "Subordinated Funds
at Lloyd's") from time to time have been exhausted.

2.3.3    Application. From and after the Completion Date, the Borrower shall, to
the extent within its control and in accordance with the Letter of Comfort,
cause all other Funds at Lloyd's of the Corporate Member (including the
Subordinated Funds at Lloyd's) to be applied to the fullest extent possible
before any payment is made under any Letter of Credit.

2.4    Cash Collateral. The Borrower hereby grants to the Bank, as security for
the Obligations under the FAL LC Documents, a security interest in all of
Borrower’s right, title and interest in the Cash Collateral pledged, paid or
delivered pursuant to this Section 2.4 or otherwise under this Agreement, and
all deposit accounts into which such Cash Collateral is deposited, including the
Cash Collateral Account. The Borrower further agrees to maintain such Cash
Collateral in accordance with this Agreement.  

2.4.1    Expiration Date Cash Collateralization. Upon the request of the Bank,
if, on the Expiration Date, any Letter of Credit Obligation for any reason
remains outstanding, Borrower shall, in each case, immediately Cash
Collateralize the then outstanding amount of all Letter of Credit Obligations in
an amount not less than the Minimum Collateral Amount.

2.4.2    Mandatory Cash Collateralization. If at any time the aggregate amount
of the Letter of Credit Obligations plus the Unused LC Commitment exceeds the LC
Commitment, the Borrower shall, promptly after receipt of written notice thereof
from the Bank, Cash Collateralize the Letter of Credit Obligations in an amount
equal to such excess.

2.4.3    Unfunded Solvency Deficit Cash Collateralization. If, at any time,
Funds at Lloyd's in respect of any Solvency Deficit have not been provided by
(x) June 30 of any year, (y) December 31 of any year or (z) any ad hoc date as
required by Lloyd’s, (an "Unfunded Solvency Deficit"), the Borrower will
promptly Cash Collateralize the Letter of Credit Obligations in an amount equal
to such Unfunded Solvency Deficit.

2.4.4    Tail Period Cash Collateralization. If the Bank delivers a notice of
termination in respect of the Letter of Credit to Lloyd's, which notice confirms
that the relevant Letter of Credit will terminate four (4) years from the date
of such notice, the Borrower will, within five (5) New York Business Days from
December 31 of the last account year agreed to have been supported by the Letter
of Credit, Cash Collateralize the Letter of Credit Obligations in an amount
equal to 100% of the Letter of Credit Obligations.

2.4.5    Further Cash Collateralization. If the Bank determines, at any time
during which the Borrower is required to Cash Collateralize the Letter of Credit
Obligations as provided herein, that (x) all or a portion of the Cash Collateral
is subject to any right or claim of any Person other than the Bank as herein
provided or (y) with respect to the Borrower’s obligation to Cash Collateralize
Letter of Credit Obligations under Section 2.4.1 or Section 7.2, that the total
amount of such Cash Collateral is less than the Minimum Collateral Amount, the
Borrower will, promptly upon demand by the Bank, provide additional Cash
Collateral to Bank in an amount equal to the amount of such Cash Collateral
subject to such right or claim (in the case of the foregoing clause (x)) or in
an amount sufficient to eliminate such deficiency (in the case of the foregoing
clause (y)).

2.4.6    Termination of Requirement. If at any time the Bank determines that (x)
the amount of Cash Collateral in the Cash Collateral Account exceeds the amount
required to be provided by the Borrower hereunder or (y) the Cash Collateral (or
any portion thereof) is no longer required to be held as Cash Collateral
pursuant to this Section 2.4 the Bank shall promptly return such Cash Collateral
(or the excess or other applicable portion thereof) to the Borrower by
depositing the applicable amount into an account designated by the Borrower.

2.4.7    Borrower Cash Collateral Direction. At any time during which any
Reimbursement Obligation or Letter of Credit Borrowing remains outstanding, the
Borrower may, in its sole and absolute discretion, direct the Bank to apply all
or a portion of the amounts held in the Cash Collateral Account to pay or
satisfy such outstanding Reimbursement Obligation or Letter of Credit Borrowing
in whole or in part. Upon the Bank’s receipt of any such direction, the Bank
shall promptly, and in any event within one (1) Business Day thereof, apply such
Cash Collateral in the amounts and in the manner so directed.

2.5    Reduction of LC Commitment. The LC Commitment which is an Unused LC
Commitment at the end of the Availability Period shall be immediately cancelled.

2.6    Cancellation of the Letter of Credit. The Borrower shall have the right,
upon notice to the Bank, without penalty or premium, to cause the cancellation
of any undrawn Letter of Credit by causing the Letter of Credit to be returned
to the Bank for cancellation (including upon the issuance of a “Stop
Instruction” under and in accordance with the Substitution Letter), whereupon,
upon such return of the Letter of Credit to the Bank, the LC Commitment shall be
terminated and all accrued and unpaid Obligations shall be immediately due and
payable and, upon payment thereof , this Agreement shall be deemed terminated
(other than with respect to contingent indemnification obligations for which no
claim has been asserted).

2.7    Obligations.Each Obligation (including Reimbursement Obligations)
hereunder if not paid when due shall bear interest at a rate per annum equal to
the sum of the LIBOR Rate plus 3.0% per annum from the time such Obligation
becomes due and payable and until it is paid or satisfied in full. The Borrower
acknowledges that the rates referred to in this Section 2.7 and Section 2.2.3
reflect, among other things, the fact that amounts not paid when due have a
substantially greater risk of non-payment and that such rates reflect additional
compensation for such risk as agreed between the Bank and Borrower; and all such
interest shall be payable by the Borrower upon demand by the Bank.

3.    PAYMENTS AND INTEREST

3.1    Payments. Subject to Section 2.2.3, all payments and prepayments to be
made in respect of Reimbursement Obligations, interest, Commitment Fees, Letter
of Credit Fees, or other fees or amounts due from the Borrower hereunder shall
be payable prior to 4:00 p.m. (New York time) on the date when due without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by the Borrower, and without set-off, counterclaim or other
deduction of any nature, and an action therefor shall immediately accrue. Such
payments shall be made to the Bank at the Principal Office in immediately
available funds. The Bank's statement of account, ledger or other relevant
record shall, in the absence of manifest error, be conclusive as the statement
of the amount owing under this Agreement and shall be deemed an “account
stated.”

3.2    Increased Costs.

3.2.1    Increased Costs Generally. If any Change in Law shall:
(i)    impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by,
the Bank (except any reserve requirement reflected in the LIBOR Rate);
(ii)    subject the Bank to any Taxes (other than (A) Indemnified Taxes, (B)
Taxes described in clauses (b) through (d) of the definition of Excluded Taxes
and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto; or
(iii)    impose on the Bank or the London interbank market any other condition,
cost or expense (other than Taxes) affecting this Agreement or the Letter of
Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to the Bank
of issuing or maintaining the Letter of Credit (or of maintaining its obligation
to issue the Letter of Credit), or to reduce the amount of any sum received or
receivable by the Bank hereunder (whether of principal, interest or any other
amount) then, upon request of the Bank, the Borrower agrees to pay to the Bank,
as the case may be, such additional amount or amounts as will compensate the
Bank for such additional costs incurred or reduction suffered.

3.2.2    Capital Requirements. If the Bank determines that any Change in Law
affecting the Bank or any lending office of the Bank or the Bank’s holding
company, if any, regarding capital or liquidity requirements has or would have
the effect of reducing the rate of return on the Bank’s capital or on the
capital of the Bank's holding company, if any, as a consequence of this
Agreement, the LC Commitment of the Bank, or the Letter of Credit issued by the
Bank, to a level below that which the Bank or the Bank’s holding company could
have achieved but for such Change in Law (taking into consideration the Bank’s
policies and the policies of the Bank’s holding company with respect to capital
adequacy or liquidity requirement), then from time to time the Borrower will pay
to the Bank, as the case may be, such additional amount or amounts as will
compensate the Bank or the Bank’s holding company for any such reduction
suffered.

3.2.3    Certificates for Reimbursement; Repayment of Outstanding Obligations. A
certificate of the Bank setting forth the amount or amounts necessary to
compensate the Bank or its holding company, as the case may be, as specified in
Sections 3.2.1 or 3.2.2 and delivered to the Borrower shall be conclusive absent
manifest error. The Borrower shall pay the Bank the amount shown as due on any
such certificate within ten (10) days after receipt thereof.

3.2.4    Delay in Requests. Failure or delay on the part of the Bank to demand
compensation pursuant to this Section shall not constitute a waiver of the
Bank’s right to demand such compensation, provided that the Borrower shall not
be required to compensate the Bank pursuant to this Section for any increased
costs incurred or reductions suffered more than nine months prior to the date
that the Bank, as the case may be, notifies the Borrower of the Change in Law
giving rise to such increased costs or reductions and of the Bank’s intention to
claim compensation therefor (except that, if the Change in Law giving rise to
such increased costs or reductions is retroactive, then the nine (9) month
period referred to above shall be extended to include the period of retroactive
effect thereof).

3.3    Taxes.

3.3.1    Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower under any FAL LC Document shall be made without
deduction or withholding for any Taxes, except as required by Applicable Law. If
any Applicable Law (as determined in the good faith discretion of the Bank)
requires the deduction or withholding of any Tax from any such payment by the
Bank, then the Bank shall be entitled to make such deduction or withholding and
shall timely pay the full amount deducted or withheld to the relevant Official
Body in accordance with Applicable Law and, if such Tax is an Indemnified Tax,
then the sum payable by the Borrower shall be increased as necessary so that
after such deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section) the Bank
receives an amount equal to the sum it would have received had no such deduction
or withholding been made.

3.3.2    Payment of Other Taxes by the Borrower. The Borrower shall timely pay
to the relevant Official Body in accordance with Applicable Law, or at the
option of the Bank timely reimburse it for the payment of, any Other Taxes.

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

3.3.4    Evidence of Payments. As soon as practicable after any payment of Taxes
by the Borrower to an Official Body pursuant to this Section 3.3, the Borrower
shall deliver to the Bank the original or a certified copy of a receipt issued
by such Official Body evidencing such payment, a copy of the return reporting
such payment or other evidence of such payment reasonably satisfactory to the
Bank.

3.3.5    Status of the Bank. (i) If the Bank or any Participant is entitled to
an exemption from or reduction of withholding Tax with respect to payments made
under any FAL LC Document, the Bank or such Participant, as applicable, shall
deliver to the Borrower, at the time or times reasonably requested by the
Borrower, such properly completed and executed documentation reasonably
requested by the Borrower as will permit such payments to be made without
withholding or at a reduced rate of withholding. In addition, the Bank and each
Participant, if reasonably requested by the Borrower, shall deliver such other
documentation prescribed by Applicable Law or reasonably requested by the
Borrower as will enable the Borrower to determine whether or not the Bank or any
Participant is subject to backup withholding or information reporting
requirements. Notwithstanding anything to the contrary in the preceding two
sentences, the completion, execution and submission of such documentation (other
than such documentation set forth in Section 3.3.5(ii)(A), (ii)(B) and (ii)(D)
below) shall not be required if in the reasonable judgment of the Bank or a
Participant (as applicable) such completion, execution or submission would
subject the Bank or such Participant to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of the
Bank or such Participant.
(ii) Without limiting the generality of the foregoing:

(A)    if a Participant is a U.S. Person, it shall deliver to the Borrower on
the date it acquires its participation (and from time to time thereafter upon
the reasonable request of the Borrower), executed originals of IRS Form W-9
certifying that the Participant is exempt from U.S. federal backup withholding
tax;
(B)    the Bank shall and, if a Participant is not a U.S. Person, it shall, to
the extent it is legally entitled to do so, deliver to the Borrower on or prior
to the date of this Agreement (in the case of the Bank) or on the date it
acquires its participation (in the case of a Participant) (and in either case
from time to time thereafter upon the reasonable request of the Borrower),
whichever of the following is applicable:
(i) if the Bank or a Participant is claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any FAL LC Document, executed originals of IRS Form W-8BEN or IRS
Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of,
U.S. federal withholding Tax pursuant to the “interest” article of such tax
treaty and (y) with respect to any other applicable payments under any FAL LC
Document, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an
exemption from, or reduction of, U.S. federal withholding Tax pursuant to the
“business profits” or “other income” article of such tax treaty;

(ii) executed originals of IRS Form W-8ECI;

(iii) if a Participant is claiming the benefits of the exemption for portfolio
interest under Section 881(c) of the Code, (x) a certificate substantially in
the form of Exhibit 5-1 to the effect that the Participant is not a “bank”
within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent
shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the
Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of
the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS
Form W-8BEN or IRS Form W-8BEN-E, as applicable; or

(iv) if the Bank or a Participant is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN,
IRS Form W-8BEN-E, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Participant is a
partnership or other intermediary and one or more direct or indirect partners or
members of the Participant are claiming the portfolio interest exemption, the
Participant may provide a U.S. Tax Compliance Certificate substantially in the
form of Exhibit 5-2 on behalf of each such direct and indirect partner or
member;

(C)    The Bank and any Participant that is not a U.S. Person shall, to the
extent it is legally entitled to do so, deliver to the Borrower on or prior to
the date of this Agreement (in the case of the Bank) or on the date it acquires
its participation (in the case of a Participant) (and in either case from time
to time thereafter upon the reasonable request of the Borrower), executed
originals of any other form prescribed by Applicable Law as a basis for claiming
exemption from or a reduction in U.S. federal withholding Tax, duly completed,
together with such supplementary documentation as may be prescribed by
Applicable Law to permit the Borrower to determine the withholding or deduction
required to be made; and
(D)    if a payment made to the Bank or a Participant under any FAL LC Document
would be subject to U.S. federal withholding Tax imposed by FATCA if the Bank or
such Participant were to fail to comply with the applicable reporting
requirements of FATCA (including those contained in Section 1471(b) or 1472(b)
of the Code, as applicable), the Bank and/or such Participant shall deliver to
the Borrower at the time or times prescribed by law and at such time or times
reasonably requested by the Borrower such documentation prescribed by Applicable
Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower as may be
necessary for the Borrower to comply with its obligations under FATCA and to
determine that the Bank and each Participant has complied with the Bank’s and
the Participants’ obligations under FATCA or to determine the amount to deduct
and withhold from such payment. Solely for purposes of this clause (D), “FATCA”
shall include any amendments made to FATCA after the date of this Agreement.
The Bank and each Participant agrees that if any form or certification it
previously delivered expires or becomes obsolete or inaccurate in any respect,
it shall update such form or certification or promptly notify the Borrower in
writing of its legal inability to do so.

3.3.6    Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 3.3 (including by
the payment of additional amounts pursuant to this Section 3.3), it shall pay to
the indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section with respect to the Taxes giving rise
to such refund), net of all out-of-pocket expenses (including Taxes) of such
indemnified party and without interest (other than any interest paid by the
relevant Official Body with respect to such refund). Such indemnifying party,
upon the request of such indemnified party, shall repay to such indemnified
party the amount paid over pursuant to this Section 3.3.6 (plus any penalties,
interest or other charges imposed by the relevant Official Body) in the event
that such indemnified party is required to repay such refund to such Official
Body. Notwithstanding anything to the contrary in this Section 3.3.6, in no
event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this Section 3.3.6 the payment of which would
place the indemnified party in a less favorable net after-Tax position than the
indemnified party would have been in if the indemnification payments or
additional amounts giving rise to such refund had never been paid. This
paragraph shall not be construed to require any indemnified party to make
available its Tax returns (or any other information relating to its Taxes that
it deems confidential) to the indemnifying party or any other Person.

3.3.7    Survival. Each party’s obligations under this Section 3.3 shall survive
any assignment of rights by, or the replacement of, the Bank, the termination of
the LC Commitment and the repayment, satisfaction or discharge of all
obligations under any FAL LC Document.

3.4    Indemnity. In addition to the compensation or payments required by
Section 3.2 or Section 3.3, the Borrower shall indemnify the Bank against all
liabilities, losses or expenses (including loss of anticipated profits, any
foreign exchange losses and any loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain the Letter of Credit Borrowing,
from fees payable to terminate the deposits from which such funds were obtained
or from the performance of any foreign exchange contract) which the Bank
sustains or incurs as a consequence of any:
(i)    attempt by the Borrower to revoke (expressly, by later inconsistent
notices or otherwise) in whole or part any Letter of Credit Application under
Section 2.2, or
(ii)    default by the Borrower in the performance or observance of any covenant
or condition contained in this Agreement or any other FAL LC Document, including
any failure of the Borrower to pay when due (by acceleration or otherwise) any
Reimbursement Obligation, interest, Commitment Fee or any other amount due
hereunder.
If the Bank sustains or incurs any such loss or expense, it shall from time to
time notify the Borrower of the amount determined in good faith by the Bank
(which determination may include such assumptions, allocations of costs and
expenses and averaging or attribution methods as the Bank shall deem reasonable)
to be necessary to indemnify the Bank for such loss or expense. Such notice
shall set forth in reasonable detail the basis for such determination. Such
amount shall be due and payable by the Borrower to the Bank ten (10) New York
Business Days after such notice is given.

3.5    LIBOR.

3.5.1    LIBOR. Subject to 3.5.2, as used hereunder, the LIBOR Rate (or any
successor rate adopted pursuant to Section 3.6) shall be calculated on each
Business Day, and with respect to any day which is not a Business Day, the LIBOR
Rate (or any such successor rate) shall be the rate calculated on the most
recent Business Day for which the LIBOR Rate (or any such successor rate) was
calculated.

3.5.2    LIBOR Rate Unascertainable. If on any date on which the LIBOR Rate (or
any such successor rate) would otherwise be determined, the Bank shall have
determined that adequate and reasonable means do not exist for ascertaining such
LIBOR Rate (or any such successor rate), for the purposes of such date, any
reference to the LIBOR Rate herein shall be deemed to be a reference to Federal
Funds Effective Rate plus 0.5% for such date, as determined by the Bank.

3.5.3    Illegality. If on any date on which the LIBOR Rate (or any such
successor rate) would otherwise be determined, the Bank shall have determined
that the making, maintenance or funding of any loan (including any loan to fund
the Bank's obligations in connection with any drawing of the Letter of Credit
hereunder) based on the LIBOR Rate has been made impracticable or unlawful by
compliance by the Bank in good faith with any Law or any interpretation or
application thereof by any Official Body or with any request or directive of any
such Official Body (whether or not having the force of Law), then the LIBOR Rate
that would otherwise apply shall be calculated at the Federal Funds Effective
Rate plus 0.5%.

3.6    Successor LIBOR Rate Index .

3.6.1    LIBOR Termination. Notwithstanding anything herein to the contrary, if
the Bank determines (which determination shall be final and conclusive, absent
manifest error) that either that either (a) (i) (x) adequate and reasonable
means do not exist for ascertaining the LIBOR Rate, or (y) a contingency has
occurred which materially and adversely affects the London interbank eurodollar
market relating to the LIBOR Rate, and, in either case, such circumstances are
unlikely to be temporary, or (ii) the circumstances set forth in clause (i)
above have not arisen but the applicable supervisor or administrator (if any) of
the LIBOR Rate or an Official Body having jurisdiction over the Bank has made a
public statement identifying the specific date after which the LIBOR Rate shall
no longer be used for determining interest rates for loans in Dollars, or (b) a
rate other than the LIBOR Rate has become a widely recognized benchmark rate for
newly originated syndicated loans in Dollars in the U.S. market, then the Bank
may (in consultation with the Borrower) choose a replacement index for the LIBOR
Rate hereunder, and make adjustments to applicable margins and related
amendments to this Agreement as referred to below such that, to the extent
practicable, the rate based on the replacement index will be substantially
equivalent to the LIBOR Rate-based interest rate in effect prior to its
replacement.

3.6.2    LIBOR Amendment. The Bank and the Borrower shall enter into an
amendment to this Agreement to reflect the replacement index, the adjusted
margins and such other related amendments as may be appropriate, in the
discretion of the Bank, for the implementation and administration of the
replacement index-based rate in accordance with Section 3.6.1.

3.6.3    Replacement Index. Selection of the replacement index, adjustments to
the applicable margins, and amendments to this Agreement (a) will be determined
with due consideration to the Bank's then-current market practice for
determining and implementing a rate of interest for newly originated syndicated
loans in the United States and loans converted from a LIBOR Rate-based rate to a
replacement index-based rate in each case for borrowers similarly situated to
the Borrower, and (b) may also reflect adjustments to account for (x) the
effects of the transition from the LIBOR Rate to the replacement index and (y)
yield- or risk-based differences between the LIBOR Rate and the replacement
index.

3.6.4    Floor. Notwithstanding anything to the contrary contained herein, if at
any time the replacement index is less than zero, at such times, such index
shall be deemed to be zero for purposes of this Agreement.

4.    REPRESENTATIONS AND WARRANTIES

4.1    Representations and Warranties. The Borrower represents and warrants to
the Bank as follows, provided that with respect to any Subsidiary that is a
Completion Date Subsidiary (including the Managing Agent and the Corporate
Member), the Managed Syndicate or the Existing Asset, such representations and
warranties shall be made solely as provided in Section 1.4:

4.1.1    Organization and Qualification; Power and Authority; Compliance With
Laws; Title to Properties; Event of Default. The Borrower and each of its
Subsidiaries (i) is a corporation or limited liability company, duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, (ii) has the lawful power to own or lease its properties and to
engage in the business it presently conducts or proposes to conduct, (iii) is
duly licensed or qualified and in good standing in (x) its jurisdiction of
organization and (y) except where the failure to be so qualified would not
reasonably be expected to result in Material Adverse Change, each jurisdiction
where the property owned or leased by it or the nature of the business
transacted by it or both makes such licensing or qualification necessary, (iv)
has full power to enter into, execute, deliver and carry out this Agreement and
the other FAL LC Documents to which it is a party, to incur the Indebtedness
contemplated by the FAL LC Documents and to perform its Obligations under the
FAL LC Documents to which it is a party, and all such actions have been duly
authorized by all necessary proceedings on its part, (v) is in compliance in all
material respects with all Applicable Laws (other than Environmental Laws which
are specifically addressed in Section 4.1.13) in all jurisdictions in which the
Borrower or any of its Subsidiaries is presently or will be doing business
except where the failure to do so would not reasonably be expected to result in
Material Adverse Change, and (vi) has good and marketable title to or valid
leasehold interest in all properties, assets and other rights which it purports
to own or lease or which are reflected as owned or leased on its books and
records, free and clear of all Liens and encumbrances except Permitted Liens. No
Event of Default or Potential Default exists or is continuing.

4.1.2    Subsidiaries and Owners; Investment Companies. Schedule 4.1.2 states
the name of each of the Borrower's Subsidiaries (other than Insignificant
Subsidiaries) as of the Closing Date and as of the Completion Date, its
jurisdiction of organization and the amount, percentage and type of equity
interests in such Subsidiary (the “Subsidiary Equity Interests”). The Borrower
and each of its Subsidiaries has good and marketable title to all of the
Subsidiary Equity Interests it purports to own, free and clear in each case of
any Lien and all such Subsidiary Equity Interests have been validly issued,
fully paid and nonassessable. Neither the Borrower nor any of its Subsidiaries
is an “investment company” registered or required to be registered under the
Investment Company Act of 1940 or under the “control” of an “investment company”
as such terms are defined in the Investment Company Act of 1940 and shall not
become such an “investment company” or under such “control.”

4.1.3    Validity and Binding Effect. This Agreement and each of the other FAL
LC Documents (i) has been duly and validly executed and delivered by the
Borrower, and (ii) constitutes, or will constitute, legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
its terms, except as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other laws and principles
of equity affecting the enforcement of creditor’s rights.

4.1.4    No Conflict; Material Agreements; Consents. Neither the execution and
delivery of this Agreement or the other FAL LC Documents by the Borrower nor the
consummation of the transactions herein or therein contemplated or compliance
with the terms and provisions hereof or thereof by any of them will conflict
with, constitute a default under or result in any breach of (i) the terms and
conditions of the articles of incorporation, regulations or other organizational
documents of the Borrower or (ii) any Law or any material agreement or
instrument or order, writ, judgment, injunction or decree to which the Borrower
or any of its Subsidiaries is a party or by which it or any of its Subsidiaries
is bound or to which it is subject, or result in the creation or enforcement of
any Lien, charge or encumbrance whatsoever upon any property (now or hereafter
acquired) of the Borrower or any of its Subsidiaries. There is no default under
such material agreement (referred to above) and neither the Borrower nor any of
its Subsidiaries is bound by any contractual obligation, or subject to any
restriction in any organization document, or subject to any requirement of Law
that would reasonably be likely to result in a Material Adverse Change. No
consent, approval, exemption, order or authorization of, or a registration or
filing with, any Official Body or any other Person is advisable or required by
any Law or any agreement in connection with the execution, delivery and carrying
out of this Agreement and the other FAL LC Documents, other than the filing of a
Form 8-K upon entering into this Agreement and the FAL LC Documents.

4.1.5    Litigation. Except as routinely encountered in claims activity, there
are no actions, suits, proceedings or investigations pending or, to the
Knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries at law or in equity before any Official Body as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Change. Neither the Borrower nor any of its
Subsidiaries is in violation of any order, writ, injunction or any decree of any
Official Body which could reasonably be expected to result in a Material Adverse
Change.

4.1.6    Financial Statements.
(i)    Historical Statements. The Borrower has delivered to the Bank copies of
its audited consolidated year-end financial statements for and as of the end of
the fiscal year ended December 31, 2018. In addition, the Borrower has delivered
to the Bank copies of its unaudited consolidated interim financial statements
for the fiscal year to date and as of the end of the fiscal quarter ended
September 30, 2018 (all such annual and interim statements being collectively
referred to as the “Statements”). The Statements were compiled from the books
and records maintained by the Borrower’s management, are correct and complete
and fairly represent the consolidated financial condition of the Borrower and
its Subsidiaries in all material respects as of the respective dates thereof and
the results of operations for the fiscal periods then ended and have been
prepared in accordance with GAAP consistently applied, subject (in the case of
the interim statements) to normal year-end audit adjustments.
(ii)    Accuracy of Financial Statements. Neither the Borrower nor any of its
Subsidiaries has any liabilities, contingent or otherwise (other than
obligations under Policies), or forward or long-term commitments that are not
disclosed in the Statements or in the notes thereto, and except as disclosed
therein there are no unrealized or anticipated losses from any commitments of
the Borrower or any of its Subsidiaries which may reasonably be expected to
result in a Material Adverse Change. Since December 31, 2018, no Material
Adverse Change has occurred.

4.1.7    Margin Stock. Neither the Borrower nor any of its Subsidiaries engages
or intends to engage principally, or as one of its important activities, in the
business of extending credit for the purpose, immediately, incidentally or
ultimately, of purchasing or carrying margin stock (within the meaning of
Regulation U, T or X as promulgated by the Board of Governors of the Federal
Reserve System). No part of the proceeds of the Letter of Credit has been or
will be used by the Borrower or its Subsidiaries, immediately, incidentally or
ultimately, for the purpose of purchasing or carrying margin stock or to extend
credit to others for the purpose of purchasing or carrying margin stock in
violation of the provisions of Regulation T, U or X of the Board of Governors of
the Federal Reserve System of the United States. Neither the Borrower, nor any
of its Subsidiaries, holds or intends to hold margin stock in such amounts that
more than 25% of the reasonable value of the assets of the Borrower or any of
its Subsidiaries is or will be represented by margin stock.

4.1.8    Full Disclosure. Neither this Agreement nor any other FAL LC Document,
nor any certificate, statement, agreement or other documents furnished to the
Bank in connection herewith or therewith, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein, in light of the circumstances under
which they were made, not misleading.

4.1.9    Taxes. All Federal and state income tax returns, and all other material
federal, state, local and other tax returns required to have been filed with
respect to the Borrower and each of its Subsidiaries have been filed, and
payment or adequate provision has been made for the payment of all taxes, fees,
assessments and other governmental charges which have or may become due pursuant
to said returns or to assessments received, except to the extent that such
taxes, fees, assessments and other charges are being contested in good faith by
appropriate proceedings diligently conducted and for which such reserves or
other appropriate provisions, if any, as shall be required by GAAP shall have
been made.

4.1.10    Patents, Trademarks, Copyrights, Licenses, Etc. Except as set forth on
Schedule 4.1.10, the Borrower and each of its Subsidiaries owns or possesses all
the material patents, trademarks, service marks, trade names, copyrights,
licenses, registrations, franchises, permits and rights necessary to own and
operate its properties and to carry on its business as presently conducted by
the Borrower or such Subsidiary, without known possible, alleged or actual
conflict with the rights of others.

4.1.11    Insurance. The properties of the Borrower and each of its Subsidiaries
are insured pursuant to policies and other bonds which are valid and in full
force and effect and which provide adequate coverage from reputable and
financially sound insurers in amounts sufficient to insure the assets and risks
of the Borrower and each such Subsidiary in accordance with prudent business
practice in the industry of the Borrower and each such Subsidiary.

4.1.12    ERISA Compliance. (i) Each Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state Laws. Each Plan that is intended to qualify under Section 401(a) of the
Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with
respect thereto and, to the best Knowledge of the Borrower, nothing has occurred
which would prevent, or cause the loss of, such qualification. The Borrower and
each ERISA Affiliate have made all required contributions to each Plan subject
to Section 412 of the Code, and no application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Code has
been made with respect to any Plan.
(ii)    No ERISA Event has occurred or is reasonably expected to occur; (a) no
Pension Plan has any unfunded pension liability (i.e. excess of benefit
liabilities over the current value of that Pension Plan’s assets, determined in
accordance with the assumptions used for funding the Pension Plan for the
applicable plan year); (b) neither the Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (c) neither the Borrower nor any ERISA Affiliate
has incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (d) neither the Borrower nor any ERISA Affiliate has
engaged in a transaction that could be subject to Sections 4069 or 4212(c) of
ERISA.

4.1.13    Environmental Matters. To the Knowledge of the Borrower, the Borrower
and each of its Subsidiaries is and has been in compliance with applicable
Environmental Laws except for such noncompliance that would not in the aggregate
reasonably be likely to result in a Material Adverse Change.

4.1.14    Solvency. Before and after giving effect to the transactions
contemplated hereunder, including the issuance of the Letter of Credit issued
hereunder, the Borrower is Solvent.

4.1.15    Insurance Licenses. No material license (including, without
limitation, licenses or certificates of authority from applicable insurance
departments), permits or authorizations to transact insurance and reinsurance
business of any Insurance Subsidiary (collectively, the “Licenses”) is the
subject of a proceeding for suspension or revocation or any similar proceedings,
to the best of Borrower’s Knowledge, there is no sustainable basis for such a
suspension or revocation, and to the best of the Borrower’s Knowledge, no such
suspension or revocation is threatened by any state insurance department.

4.1.16    Certificate of Beneficial Ownership. Each Certificate of Beneficial
Ownership executed and delivered to the Bank by the Borrower from time to time,
as updated from time to time in accordance with this Agreement, is accurate,
complete and correct as of the date thereof. The Borrower acknowledges and
agrees that each Certificate of Beneficial Ownership is a FAL LC Document.

4.1.17    Corporate Member. The Corporate Member is duly authorized to
underwrite business at Lloyd's.

4.1.18    Appointment as Managing Agent. The Managing Agent has been validly
appointed to act as the managing agent at Lloyd's of each Member of the Managed
Syndicate, and its appointment as such is in full force and effect.

4.1.19    Underwriting Standards and Investment Guidelines. The Managing Agent
has at all material times adhered in all material respects to Lloyd's
requirements with regards to the investment of syndicate funds.

4.1.20    Anti-Terrorism Laws. Neither the Borrower nor any its Subsidiaries (i)
is a Sanctioned Person, or (ii) either in its own right or through any third
party, (a) has any of its assets in a Sanctioned Country or in the possession,
custody or control of a Sanctioned Person in violation of any Anti-Terrorism
Law, (b) does business in or with, or derives any of its income from investments
in or transactions with, any Sanctioned Country or Sanctioned Person in
violation of any Anti-Terrorism Law; or (c) engages in any dealings or
transactions prohibited by any Anti-Terrorism Law.

4.1.21    Existing Asset. From and after the Substitution Date, neither the
Borrower, nor any of its Subsidiaries, including the Completion Date
Subsidiaries, will have any obligations (contingent or otherwise) in respect of
the Existing Asset.

5.    CONDITIONS OF ISSUANCE OF THE LETTER OF CREDIT
The obligation of the Bank to issue the Letter of Credit hereunder is subject to
the satisfaction of the following conditions:

5.1    Conditions to Effectiveness.

5.1.1    Deliveries. On the Closing Date, the Bank shall have received each of
the following in form and substance satisfactory to the Bank:
(i)    A certificate of the Borrower signed by an Authorized Officer, dated the
Closing Date stating that (w) all representations and warranties of the Borrower
set forth in this Agreement and made as of the Closing Date are true and correct
in all material respects, (x) the Borrower is in compliance with each of the
applicable covenants and conditions hereunder, and certifying compliance with
the covenant set forth in Section 6.2.13 as of December 31, 2018 (in the form of
such certification contained in the Compliance Certificate), (y) no Event of
Default or Potential Default exists, and (z) no Material Adverse Change has
occurred since the date of the last audited financial statements of the Borrower
delivered to the Bank;
(ii)    A certificate dated the Closing Date and signed by the Secretary or an
Assistant Secretary of the Borrower, certifying as to: (a) all action taken by
the Borrower in connection with this Agreement and the other FAL LC Documents;
(b) the names of the Authorized Officers authorized to sign the FAL LC Documents
and their true signatures; and (c) copies of its organizational documents as in
effect on the Closing Date certified by the appropriate state official where
such documents are filed in a state office together with certificates from the
appropriate state officials as to the continued existence and good standing of
the Borrower in each state where organized or qualified to do business;
(iii)    This Agreement and each of the other FAL LC Documents signed by an
Authorized Officer;
(iv)    A written opinion of counsel for the Borrower, dated the Closing Date
and in form and substance satisfactory to the Bank;
(v)    All material consents required to effectuate the transactions
contemplated hereby;
(vi)    Certified copies of the business plan for the 2019 year of account
prepared in relation to the Managed Syndicate and (if separate) the Realistic
Disaster Scenario relating thereto;
(vii)    A Letter of Comfort signed on behalf of Lloyd's;
(viii)    Evidence that, as of the Closing Date, Own FAL of the Corporate Member
is no less than $19,398,830.23 and £60,427,866.83, combined;
(ix)    Evidence that a cash amount of no less than $19,398,830.23 and
£60,427,866.83, combined, has been paid to Lloyd's for the purposes of forming
part of the Own FAL of the Corporate Member;
(x)    Evidence that the Corporate Member is authorized or admitted by Lloyd's
to underwrite business at Lloyd's;
(xi)    A certified copy of the reinsurance resume of the Managed Syndicate for
the 2019 year of account and each year of account then open;
(xii)    A fully executed copy of the Substitution Letter; and
(xiii)    Such other documents in connection with such transactions as the Bank
or its counsel may reasonably request.

5.2    The Letter of Credit. At the time of issuing the Letter of Credit and
after giving effect to the proposed extensions of credit: (i) the
representations, warranties made by the Borrower shall then be true and correct
in all material respects (except to the extent that such representations and
warranties relate solely to an earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date), (ii) no Event of Default or Potential Default shall have occurred
and be continuing, (iii) the issuance of the Letter of Credit shall not
contravene any Law applicable to the Borrower, the Bank or any of the Borrower’s
Subsidiaries as of such issuance date, and (iv) the Borrower shall have
delivered to the Bank a duly executed and completed Letter of Credit
Application; provided that for the avoidance of doubt, the satisfaction of the
above conditions with respect to any Subsidiary that is a Completion Date
Subsidiary (including the Managing Agent and the Corporate Member), the Managed
Syndicate or the Existing Asset shall not be a condition to the effectiveness of
the Letter of Credit issued on or prior to the Completion Date.

6.    COVENANTS
The Borrower covenants and agrees that until Payment In Full, the Borrower shall
comply at all times with the following covenants:

6.1    Affirmative Covenants.

6.1.1    Preservation of Existence, Etc. The Borrower shall, and shall cause
each of its Subsidiaries (other than Insignificant Subsidiaries) to, maintain
its legal existence as a corporation, limited partnership or limited liability
company and its license or qualification and good standing in (a) its
jurisdiction of organization and (b) except where the failure to be so qualified
would not reasonably be expected to result in a Material Adverse Change, each
jurisdiction where the property owned or leased by it or the nature of the
business transacted by it or both makes such licensing or qualification
necessary, except as otherwise expressly permitted in 6.2.5.

6.1.2    Payment of Liabilities, Including Taxes, Etc. The Borrower shall, and
shall cause each of its Subsidiaries to, duly pay and discharge all liabilities
to which it is subject or which are asserted against it, promptly as and when
the same shall become due and payable, including all taxes, assessments and
governmental charges upon it or any of its properties, assets, income or
profits, prior to the date on which penalties attach thereto, except to the
extent that such liabilities, including taxes, assessments or charges, are being
contested in good faith and by appropriate and lawful proceedings diligently
conducted and for which such reserve or other appropriate provisions, if any, as
shall be required by GAAP shall have been made.

6.1.3    Maintenance of Insurance. The Borrower shall, and shall cause each of
its Subsidiaries to, insure its properties and assets against loss or damage by
fire and such other insurable hazards as such assets are commonly insured
(including fire, extended coverage, property damage, workers’ compensation,
public liability and business interruption insurance) and against other risks
(including errors and omissions) in such amounts as similar properties and
assets are insured by prudent companies in similar circumstances carrying on
similar businesses, and with reputable and financially sound insurers, including
self-insurance to the extent customary, all as reasonably determined by the
Bank.

6.1.4    Maintenance of Properties and Leases. The Borrower shall, and shall
cause each of its Subsidiaries to, maintain in good repair, working order and
condition (ordinary wear and tear excepted) in accordance with the general
practice of other businesses of similar character and size, all of those
properties and facilities material to its business, and from time to time, the
Borrower will make or cause to be made all material repairs, renewals or
replacements thereof.

6.1.5    Visitation Rights. The Borrower shall, and shall cause each of its
Subsidiaries to, permit any of the officers or authorized employees or
representatives of the Bank to visit and inspect any of its properties during
normal business hours and to examine and make excerpts from its books and
records and discuss its business affairs, finances and accounts with its
officers, all in such detail and at such times as the Bank may reasonably
request, provided that the Bank shall provide the Borrower with reasonable
notice prior to any visit or inspection; provided, further, that unless an Event
of Default exists, (x) the Bank shall only be entitled to one (1) such visit and
inspection by the Bank and its officers, authorized employees or representatives
per calendar year and (y) any such visit and inspection shall be at Bank’s cost
and expense.

6.1.6    Keeping of Records and Books of Account. The Borrower shall, and shall
cause each of its Subsidiaries to, maintain and keep proper books of record and
account which enable the Borrower and its Subsidiaries to issue financial
statements in accordance with GAAP or IFRS, as applicable, and as otherwise
required by Lloyd's and Applicable Laws of any Official Body having jurisdiction
over the Borrower or any of its Subsidiaries, and in which full, true and
correct entries shall be made in all material respects of all its dealings and
business and financial affairs.

6.1.7    Compliance with Laws; Use of Proceeds. The Borrower shall, and shall
cause each of its Subsidiaries to, comply in all material respects with all
Applicable Laws, including all Environmental Laws. The Borrower will use the
Letter of Credit only in accordance with Section 2.3 and as permitted by
Applicable Law.

6.1.8    Certificate of Beneficial Ownership and Other Additional Information.
The Borrower shall provide to the Bank: (i) if required by the Beneficial
Ownership Regulation, a fully-executed and delivered copy of a Certificate of
Beneficial Ownership; (ii) upon the request of the Bank confirmation of the
accuracy of the information set forth in the most recent Certificate of
Beneficial Ownership provided to the Bank, if any; (iii) a new Certificate of
Beneficial Ownership, in form and substance acceptable to the Bank, when the
individual(s) to be identified as a Beneficial Owner have changed; and (iv) such
other information and documentation as may reasonably be requested by the Bank
from time to time for purposes of compliance by the Bank with Applicable Laws
(including without limitation the USA Patriot Act and other “know your customer”
and Anti-Money Laundering Laws), and any policy or procedure implemented by the
Bank to comply therewith.

6.1.9    Lloyd's Syndicate Accounting Rules. From and after the Completion Date,
the Borrower shall ensure that: (a) each annual report in respect of the Managed
Syndicate delivered pursuant to Section 6.3.6.7(vii) is prepared: (i) in
accordance with the Lloyd's Syndicate Accounting Rules applicable at the
relevant time; and (ii) subject to paragraph (i) above, using generally applied
accounting principles of the United Kingdom or IFRS, in each case, consistently
applied; and (b) there is attached to each such annual report a Managing Agent’s
report and underwriter’s report (or, if applicable, a combined report), each
prepared in accordance with the Lloyd’s Syndicate Accounting Rules applicable at
the relevant time.

6.1.10    Regulatory Compliance. From and after the Completion Date, the
Borrower shall, and shall cause the Corporate Member to, ensure that each of
them observes and complies with all applicable acts, byelaws and regulations
(including, without limitation, under the Financial Services and Markets Acts
2000, the Lloyd's Acts 1871 to 1982, the Handbook, and any conditions or
requirements prescribed thereunder) where the failure to observe or comply with
which might reasonably be expected to have a Material Adverse Change.

6.1.11    Funds at Lloyd's Compliance. From and after the Completion Date, the
Borrower shall (i) ensure the Funds at Lloyd's of the Borrower shall comply with
the Eligible Asset Rules (provided that in the case of the Letter of Credit, the
Bank remains an Approved Credit Institution); (ii) ensure that the Funds at
Lloyd's of the Borrower shall be revalued in accordance with Lloyd's usual
practice on a semi-annual basis and that the Funds at Lloyd's of the Corporate
Member are applied in the manner described in Sections 2.3.2 and 2.3.3; and
(iii) if there is at any time a shortfall in the Funds at Lloyd's of the
Borrower, promptly remedy such shortfall in accordance with the applicable
Membership Byelaws and rules and regulations as may be issued by Lloyd's from
time to time.

6.1.12    Underwriting Standards and Investment Guidelines. From and after the
Completion Date, the Borrower shall ensure that the Managing Agent makes no
change to its standards for managing underwriting risk if it has or is
reasonably like to have a Material Adverse Change and adheres in all material
respects to Lloyd's requirements with regards to the investment of syndicate
funds.

6.1.13    Minimum Ratings. The Borrower shall ensure that its long term issuer
credit rating, as determined by A.M. Best Company, Inc., is not less than bbb.

6.1.14    Corporate Member. From and after the Completion Date, the Borrower
shall ensure that the Corporate Member shall not undertake any business or
activity other than insurance business at Lloyd's as a Member of any Managed
Syndicate.

6.1.15    Business Plan. From and after the Completion Date, the Borrower shall
ensure that there is no material change to the business plan submitted in
accordance with Section 6.3.6.7(viii) without the prior written consent of the
Bank.

6.1.16    Sanctions; Anti-Corruption Laws. The Borrower will, and will cause
each of its Subsidiaries to, conduct its businesses in compliance with
applicable Anti-Corruption Laws, Anti-Money Laundering Laws, and Anti-Terrorism
Laws and maintain in effect policies and procedures designed to promote and
achieve compliance by the Borrower, its Subsidiaries, and their respective
directors, officers, employees, and agents with such laws.

6.1.17    Completion Date. The Borrower shall give the Bank prompt notice of the
occurrence of the Completion Date. If the Completion Date has not occurred
within 10 Business Days of the Closing Date, the Borrower shall, on or prior to
such 10th Business Day following the Closing Date, notify the Bank in writing
that the Completion Date has not occurred and whether the Borrower intends to
(i) Cash Collateralize the Letter of Credit Obligations in an amount not less
than the Minimum Collateral Amount, or (ii) return, or cause the return, to the
Bank of the Letter of Credit issued hereunder. If option (i) above is elected,
the Borrower shall, within 13 Business Days of the Closing Date, Cash
Collateralize the Letter of Credit Obligations in an amount not less than the
Minimum Collateral Amount (the date on which the Borrower Cash Collateralizes
(or if earlier, is required to Cash Collateralize) the Letter of Credit pursuant
to this clause (i), the "Cash Collateralization Date"). If option (ii) above is
selected, the Borrower shall (x) within 30 Business Days of the Closing Date
(the “Return Deadline Date”), return, or cause the return, to the Bank of the
Letter of Credit issued hereunder; provided, that if the Borrower has delivered
a “Stop Instruction” under and in accordance with the Substitution Letter prior
to the Return Deadline Date and the Letter of Credit has nevertheless not been
returned on or prior to the Return Deadline Date, the Borrower may, until the
Letter of Credit is returned to Bank, Cash Collateralize the Letter of Credit
Obligations in an amount not less than the Minimum Collateral Amount, and (y) on
or before the Return Deadline Date, pay to the Bank any and all accrued and
unpaid fees, costs and expenses due hereunder. For the avoidance of doubt, if
option (ii) of this Section 6.1.17 is selected, upon return of the original
Letter of Credit to the Bank, and payment of any and all fees, costs, expenses
or other Obligations owed to the Bank hereunder, this Agreement shall be deemed
to be of no further force and effect, other than with respect to provisions that
expressly survive termination.

6.2    Negative Covenants.

6.2.1    Indebtedness. The Borrower shall not, and shall not permit any of its
Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness, except:
(i)    Indebtedness under the FAL LC Documents;
(ii)    Existing Indebtedness as set forth on Schedule 6.2.1 (including any
refinancings, extensions or renewals thereof); provided there is no increase in
the amount thereof or other significant change in the terms thereof unless
otherwise specified on Schedule 6.2.1;
(iii)    Indebtedness incurred with respect to Purchase Money Security Interests
and capitalized leases;
(iv)    Indebtedness arising under any Syndicate Arrangement;
(v)    Indebtedness of the Borrower to any of its Subsidiaries which is
subordinated pursuant to the Intercompany Subordination Agreement;
(vi)    Indebtedness between wholly-owned Subsidiaries;
(vii)    Guaranties of Indebtedness of associates/agents of the Insurance
Companies in the ordinary course of business; and
(viii)    Additional Indebtedness of the Borrower and each Insurance Company, so
long as at the time of incurrence thereof, the Borrower is in pro forma
compliance with Section 6.2.13 and there is no Event of Default or Potential
Default after giving effect to such additional Indebtedness.

6.2.2    Liens; Lien Covenants. The Borrower shall not, and shall not permit any
of its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Lien on any of its property or assets, tangible or intangible, now owned or
hereafter acquired, or agree or become liable to do so, except Permitted Liens.

6.2.3    Guaranties. The Borrower shall not, and shall not permit any of its
Subsidiaries to, at any time, directly or indirectly, become or be liable in
respect of any Guaranty, or assume, guarantee, become surety for, endorse or
otherwise agree, become or remain directly or contingently liable upon or with
respect to any obligation or liability of any other Person, except for
Guaranties by the Borrower of Indebtedness permitted hereunder and Guaranties
permitted under Section 6.2.1.

6.2.4    Dividends and Related Distributions. The Borrower shall not make or
pay, or agree to become or remain liable to make or pay, any dividend or other
distribution of any nature (whether in cash, property, securities or otherwise)
on account of or in respect of its shares of capital stock on account of the
purchase, redemption, retirement or acquisition of its shares of capital stock
(or warrants, options or rights therefor), unless no Event of Default under
Section 7.1.1 shall have occurred and be continuing at the time of such dividend
or distribution.

6.2.5    Liquidations, Mergers, Consolidations, Acquisitions. The Borrower shall
not, and shall not permit any of its Subsidiaries to, (a) dissolve, liquidate or
wind-up its affairs, or become a party to any merger or consolidation, other
than dissolution, liquidation, winding up, merger or consolidation by an
Insignificant Subsidiary so long as all assets of such Insignificant Subsidiary
are transferred to the Borrower or another Subsidiary of the Borrower; provided
that any Subsidiary of the Borrower may consolidate or merge into the Borrower
or another wholly-owned Subsidiary of the Borrower or (b) acquire all or
substantially all of the capital stock or assets of another Person unless, in
the case of either (a) or (b), at such time and immediately after giving effect
thereto, no Potential Default or Event of Default exists or would result
therefrom; provided, that the Borrower shall be permitted to consummate the
Acquisition Transaction.

6.2.6    Dispositions of Assets or Subsidiaries. The Borrower shall not, and
shall not permit any of its Subsidiaries (other than Insignificant Subsidiaries)
to, sell, convey, assign, lease, abandon or otherwise transfer or dispose of,
voluntarily or involuntarily (any of the foregoing being referred to in this
Section 6.2.6 as a “Disposition” and any series of related Dispositions
constituting but a single Disposition), any of its assets or sell or assign with
or without recourse any receivables, other than any sale, conveyance,
assignment, lease or abandonment (a) in the ordinary course of business or (b)
to the extent that the fair market value of the assets the subject thereof (as
determined in good faith by the board of directors or senior management of the
Borrower), when added to the fair market value of the assets the subject of any
such other Disposition or Dispositions permitted by this clause (b) previously
consummated during the same fiscal year of the Borrower (as determined in good
faith by the board of directors or senior management of the Borrower), does not
constitute more than 3.0% of the consolidated assets of the Borrower and its
Subsidiaries as of the last day of the most recently ended fiscal year of the
Borrower.

6.2.7    Affiliate Transactions. The Borrower shall not, and shall not cause or
permit its Subsidiaries to directly or indirectly enter into or permit to exist
any transaction defined by Section 404(a) of Regulation S-K under the Securities
Act of 1933 with any Affiliate or with any director or executive officer of the
Borrower, except (a) transactions in the ordinary course of and pursuant to the
reasonable requirements of the business of the Borrower or any of its
Subsidiaries and upon fair and reasonable terms which are no less favorable to
the Borrower or any of its Subsidiaries than would be obtained in a comparable
arm’s length transaction with a Person that is not an Affiliate, (b) payment of
reasonable compensation to officers for services actually rendered to the
Borrower or any of its Subsidiaries, (c) payment of reasonable compensation to
directors and (d) transactions approved by the audit committee of the Borrower.

6.2.8    Continuation of or Change in Business. The Borrower shall not, and
shall not permit any of its Subsidiaries to, (a) engage in any business other
than in substantially the same fields of enterprise as it is presently
conducted, substantially as conducted and operated by the Borrower or such
Subsidiary during the present fiscal year, and the Borrower or such Subsidiary
shall not permit any material change in such business, or (b) change its form of
organization, including a division into two or more entities.

6.2.9    Fiscal Year. The Borrower shall not, and shall not permit any
Subsidiary of the Borrower to, change its fiscal year from the twelve-month
period beginning January 1 and ending December 31.

6.2.10    Changes in Organizational Documents. The Borrower shall not, and shall
not permit any of its Subsidiaries (other than Insignificant Subsidiaries) to,
amend in any respect its certificate of incorporation (including any provisions
or resolutions relating to capital stock), by-laws, certificate of limited
partnership, partnership agreement, certificate of formation, limited liability
company agreement or other organizational documents in any manner that may be
materially adverse to the Bank without obtaining the prior written consent of
the Bank.

6.2.11    Limitation on Certain Restrictions on Subsidiaries. The Borrower will
not, nor will it permit any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or consensual restriction on the ability of any such Subsidiary to
(a) pay dividends or make any other distributions on its capital stock or any
other interest or participation in its profits owned by the Borrower or any of
its Subsidiaries, or pay any Indebtedness owed to the Borrower or any of its
Subsidiaries, (b) make loans or advances to the Borrower or any of its
Subsidiaries or (c) transfer any of its properties or assets to the Borrower or
any of its Subsidiaries; provided that the foregoing shall not apply to (i)
restrictions and conditions imposed by law or by any FAL LC Document, (ii)
agreements entered into with an Applicable Insurance Regulatory Authority or
ratings agency in the ordinary course of business or any requirement imposed or
required by any Applicable Insurance Regulatory Authority, (iii) provisions in
partnership agreements, shareholders agreements, limited liability company
organizational governance documents, joint venture agreements and other similar
agreements or (iv) customary restrictions imposed under contracts (including
Policies and insurance contracts) or trust agreements, in each case, entered
into in the ordinary course of business, including any Indebtedness permitted by
Section 6.2.1(ii).

6.2.12    Anti-Terrorism Laws. The Borrower is not, nor shall it be (i) a Person
with whom the Bank is restricted from doing business under Executive Order No.
13224 or any other Anti-Terrorism Law, (ii) engaged in any business involved in
making or receiving any contribution of funds, goods or services to or for the
benefit of such a Person or in any transaction that evades or avoids, or has the
purpose of evading or avoiding, the prohibitions set forth in any Anti-Terrorism
Law, or (iii) otherwise in violation of any Anti-Terrorism Law. The Borrower
shall provide to Bank any certifications or information that the Bank requests
to confirm compliance by the Borrower with Anti-Terrorism Laws.

6.2.13    Consolidated Debt to Total Capitalization. Not permit the ratio of (a)
the principal amount of Consolidated Debt to (b) the sum of (i) Consolidated Net
Worth plus (ii) Consolidated Debt to exceed 0.35 to 1.0 as of the end of each
fiscal quarter of the Borrower.

6.2.14    Own FAL. From and after the Completion Date, the Borrower shall not
permit the Own FAL of the Corporate Member to be less than (i) on the Completion
Date, 10% of Total FAL, and (ii) thereafter, the applicable requirements of
Lloyd's from time to time.

6.2.15    Third Party FAL. From and after the Completion Date, the Borrower
shall not (and shall ensure that none of its Subsidiaries will) enter into any
credit agreement, reinsurance agreement or other similar arrangement pursuant to
which Funds at Lloyd's are to be provided for the Corporate Member without the
prior consent of the Bank.

6.3    Reporting Requirements. The Borrower will furnish or cause to be
furnished to the Bank:

6.3.1    Quarterly Financial Statements. As soon as available and in any event
within sixty (60) calendar days after the end of each of the first three fiscal
quarters in each fiscal year, a copy of its Form 10-Q filed with the SEC,
consisting of a consolidated balance sheet as of the end of such fiscal quarter
and related consolidated statements of income, shareholder’s equity and cash
flows for the fiscal quarter then ended, all in reasonable detail and certified
(subject to normal year-end audit adjustments) by the Chief Executive Officer,
President or Chief Financial Officer of the Borrower as having been prepared in
accordance with GAAP, consistently applied and fairly presenting the
consolidated results of operations and cash flows of the Borrower as at the end
of such fiscal quarter.

6.3.2    Annual Financial Statements. As soon as available and in any event
within one hundred eighty (180) days after the end of each fiscal year of the
Borrower, financial statements of the Borrower consisting of a consolidated
balance sheet as of the end of such fiscal year, and related consolidated
statements of income, shareholders’ equity and cash flows for the fiscal year
then ended, all in reasonable detail, audited and accompanied by a report and
opinion of by independent certified public accountants of nationally recognized
standing. The opinion and report of accountants shall be free of qualifications
(other than any consistency qualification that may result from a change in the
method used to prepare the financial statements as to which such accountants
concur) and shall not indicate the occurrence or existence of any event,
condition or contingency which would materially impair the prospect of payment
or performance of any covenant, agreement or duty of the Borrower under any of
the FAL LC Documents.

6.3.3    Quarterly Monitoring Return. From and after the Completion Date, as
soon as the same become available but, in any event within 3 days of their being
filed with Lloyd's, the Quarterly Monitoring Return for the Managed Syndicate.

6.3.4    Certificate of the Borrower. Concurrently with the financial statements
of the Borrower furnished to the Bank pursuant to Sections 6.3.1 and 6.3.2, a
certificate (each a “Compliance Certificate”) of the Borrower signed by the
Chief Executive Officer, President or Chief Financial Officer of the Borrower,
in the form of Exhibit 6.

6.3.5    Unfunded Solvency Deficit . If, at any time from and after the
Completion Date, any Unfunded Solvency Deficit exists, immediately provide
notice of the occurrence of such Unfunded Solvency Deficit and confirm the value
of such Unfunded Solvency Deficit as a percentage of the Corporate Member's
Economic Capital Assessment Requirement for all open years of account.

6.3.6    Notices.
6.3.6.1    Default. Promptly after the Borrower has Knowledge of the occurrence
of an Event of Default or Potential Default, a certificate signed by an
Authorized Officer setting forth the details of such Event of Default or
Potential Default and the action which the Borrower proposes to take with
respect thereto.
6.3.6.2    Litigation. Promptly and in any event within ten (10) days after the
commencement thereof, notice of all actions, suits, proceedings or
investigations before or by any Official Body or any other Person against the
Borrower or any of its Subsidiaries which, if adversely determined, is
reasonably likely to result in a Material Adverse Change.
6.3.6.3    Lloyd's Litigation. From and after the Completion Date, promptly upon
becoming aware of them, the details of any litigation, arbitration or
administrative proceedings which are current, threatened or pending against the
Borrower or any of its Subsidiaries, including the Corporate Member or any
actual or threatened intervention by Lloyd's, the Prudential Regulation
Authority or the Financial Conduct Authority, and which would, if adversely
determined, have a Material Adverse Change.
6.3.6.4    Demands for Payment of FAL. From and after the Completion Date, upon
service on the Corporate Member by Lloyd's (or any other trustee for the time
being of such Funds at Lloyd's) of a written demand for the payment of a sum on
account of its Funds at Lloyd's, immediately provide notice of such occurrence.
6.3.6.5    Managing Agent Request for Funds. From and after the Completion Date,
promptly upon becoming aware of it, notice that the Managing Agent has made a
request for funds of the Corporate Member in its capacity as a Member of a
Managed Syndicate before applying the Funds at Lloyd's of the Corporate Member
in payment of any claims, expenses or outgoings made or incurred in connection
with its underwriting business.
6.3.6.6    ERISA Event. Promptly and in any event within ten (10) days after the
occurrence of any ERISA Event, notice of such ERISA Event.
6.3.6.7    Other Reports. Promptly upon their becoming available to the
Borrower:
(i)    Management Letters. Copies of any final reports including final
management letters submitted to the Borrower by independent accountants in
connection with any annual, interim or special audit.
(ii)    Statutory Statements. Within 15 days after the filing of Statutory
Statements by any Insurance Borrower, a copy of such Statutory Statements of
such Insurance Borrower for the relevant fiscal year.
(iii)    Licenses. Within five (5) New York Business Days of such notice, notice
of actual suspension, termination or revocation of any material License of the
Insurance Subsidiaries by any Official Body or of receipt of notice from any
Official Body notifying the Borrower or any Subsidiary of a hearing (which is
not withdrawn within ten (10) days) relating to such a suspension, termination
or revocation, including any request by an Official Body which commits the
Borrower or any Subsidiary to take, or refrain from taking, any action or which
otherwise materially and adversely affects the authority of the Borrower to
conduct its business.
(iv)    SEC Reports; Shareholder Communications. Copies of Forms 10-K and 10-Q,
registration statements and prospectuses filed by the Borrower with the
Securities and Exchange Commission.
(v)    Insurance Code. Promptly upon obtaining Knowledge thereof, notice of any
actual or proposed material changes in the Insurance Code governing the
investment or dividend practices of any Insurance Company.
(vi)    Annual Budget and Cashflow Statements. From and after the Completion
Date, as soon as the same become available following the production of each
syndicate business forecast, but in any event within 5 New York Business Days of
their being filed with Lloyd's, its annual consolidated budget and cashflow
statements for that forthcoming financial year.
(vii)    Annual Reports for the Managed Syndicate. From and after the Completion
Date, as soon as the same become available, but in any event within 120 days
after the end of each year of account of the Managed Syndicate, annual reports
in respect of the Managed Syndicate.
(viii)    Business Plan and Realistic Disaster Scenarios for the Managed
Syndicate. From and after the Completion Date, as soon as the same become
available, but in any event within 5 New York Business Days of the date
prescribed by Lloyd's with respect to the preparation and dispatch thereof, the
business plan prepared in relation to the Managed Syndicate and (if separate)
the Realistic Disaster Scenarios relating thereto.
(ix)    Reinsurance Resume for the Managed Syndicate. From and after the
Completion Date, as soon as the same become available, but in any event by
January 31 of every year, the reinsurance resume of the Managed Syndicate for
each year of account then open.
(x)    Lloyd's Solvency Statement. From and after the Completion Date, as soon
as the same become available, but in any event within 5 New York Business Days
of receipt from Lloyd's, the annual solvency statements prepared by Lloyd's for
the Managed Syndicate.
(xi)    Misc. Information. From and after the Completion Date, as soon as the
same become available, but in any event within 5 New York Business Days of
delivery to Lloyd's or the other relevant Official Body, such other exceptional
financial reports that the Managed Syndicate or Corporate Member is required to
delivery to Lloyd's or such other Official Body.
(xii)    Other Information. Such other reports and information as the Bank may
from time to time reasonably request.
6.3.6.8    Syndicate Arrangements. From and after the Completion Date, promptly
after the incurrence of any Indebtedness arising under a Syndicate Arrangement,
notice of such incurrence of Indebtedness arising under a Syndicate Arrangement,
including the amount thereunder.
6.3.6.9    Electronic Delivery. Documents required to be delivered pursuant to
this Section 6.3 (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower’s
website (so long as Bank is notified in writing of such posting); or (ii) on
which such documents are posted on the Borrower’s behalf on an internet or
intranet website to which the Bank has access (so long as Bank is notified in
writing of such posting) or made publicly available on the website of the SEC.

7.    DEFAULT

7.1    Events of Default. An Event of Default shall mean the occurrence or
existence of any one or more of the following events or conditions (whatever the
reason therefor and whether voluntary, involuntary or effected by operation of
Law):

7.1.1    Payments Under FAL LC Documents . The Borrower shall fail to pay (a)
when due, any Reimbursement Obligation or (b) within two (2) New York Business
Days after the same shall become due, any other Letter of Credit Obligation, any
other Obligation or any other amount owing hereunder or under the other FAL LC
Documents;

7.1.2    Breach of Warranty . Any representation or warranty made at any time by
the Borrower herein or in any other FAL LC Document, or in any certificate,
other instrument or statement furnished pursuant to the provisions hereof or
thereof, shall prove to have been false or misleading in any material respect as
of the time it was made or furnished;

7.1.3    Breach of Negative Covenants or Visitation Rights. The Borrower shall
default in the observance or performance of any covenant contained in
Section 6.1.5 or Section 6.2;

7.1.4    Breach of Other Covenants. The Borrower shall default in the observance
or performance of any other covenant, condition or provision hereof or of any
other FAL LC Document and such default shall continue unremedied for a period of
thirty (30) days after (a) the Borrower obtains Knowledge thereof or (b) written
notice thereof from the Bank to the Borrower;

7.1.5    Defaults in Other Agreements or Indebtedness. A default or event of
default shall occur at any time under the terms of any other agreement involving
borrowed money or the extension of credit or any other Indebtedness under which
the Borrower or any of its Subsidiaries may be obligated as a borrower or
guarantor in excess of $50,000,000 in the aggregate, and such breach, default or
event of default consists of the failure to pay (beyond any period of grace
permitted with respect thereto, whether waived or not) any Indebtedness when due
(whether at stated maturity, by acceleration or otherwise) or if such breach or
default permits or causes the acceleration of any Indebtedness (whether or not
such right shall have been waived or amended) or the termination of any
commitment to lend;

7.1.6    Final Judgments or Orders. Any final, nonappealable judgments or orders
involving a liability in excess of $50,000,000 (after the application of any
applicable insurance or reinsurance coverage) in the aggregate shall be entered
against the Borrower by a court having jurisdiction in the premises, which
judgment is not discharged, vacated, bonded or stayed pending appeal within a
period of thirty (30) days from the date of entry;

7.1.7    FAL LC Document Unenforceable. Any of the FAL LC Documents shall cease
to be legal, valid and binding agreements enforceable against the party
executing the same or such party’s successors and assigns (as permitted under
the FAL LC Documents) in accordance with the respective terms thereof or shall
in any way be terminated (except in accordance with its terms) or become or be
declared ineffective or inoperative or shall in any way be challenged or
contested or cease to give or provide the respective rights, titles, interests,
remedies, powers or privileges intended to be created thereby;

7.1.8    Proceedings Against Assets. The Borrower's or any of its Subsidiaries'
assets are attached, seized, levied upon or subjected to a writ or distress
warrant; or such come within the possession of any receiver, trustee, custodian
or assignee for the benefit of creditors and the same is not cured within thirty
(30) days thereafter;

7.1.9    Events Relating to Plans and Benefit Arrangements. (i) An ERISA Event
occurs with respect to a Pension Plan or Multiemployer Plan which has had or
could reasonably be expected to result in, either individually or in the
aggregate, a Material Adverse Change or (ii) the Borrower or any ERISA Affiliate
fails to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan, and such failure has had or could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Change.

7.1.10    Change of Control. (a) Any person or group of persons (within the
meaning of Sections 13(d) or 14(a) of the Securities Exchange Act of 1934, as
amended) shall have acquired beneficial ownership of (within the meaning of Rule
13d-3 promulgated by the Securities and Exchange Commission under said Act) 50%
or more of the voting capital stock of the Borrower; or (b) during any period of
12 consecutive months a majority of the members of the board of directors or
other equivalent governing body of the Borrower cease to be composed of
individuals (i) who were members of that board or equivalent governing body on
the Closing Date, (ii) whose election or nomination to that board or equivalent
governing body was approved by individuals referred to in clause (i) above
constituting at the time of such election or nomination at least a majority of
that board or equivalent governing body or (iii) whose election or nomination to
that board or other equivalent governing body was approved by individuals
referred to in clauses (i) and (ii) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body;

7.1.11    Regulatory Orders . Any Insurance Subsidiary becomes subject to a
corrective order or similar document issued by an Applicable Insurance
Regulatory Authority which cites or otherwise references its financial
impairment, or failure to meet minimum levels of statutory capital or surplus
and such failure is not cured within thirty (30) days of the date of such
corrective order or similar document;

7.1.12    Solvency Test. From and after the Completion Date, the Corporate
Member fails as a Member to maintain its capital resources requirement
calculated by Lloyd's and notified to it in accordance with the Handbook and
that failure has not been remedied within 7 New York Business Days of such
failure;

7.1.13    The Borrower's Business. From and after the Completion Date, the
Corporate Member ceases to carry on the business of underwriting insurance at
Lloyd's;

7.1.14    Withdrawal of the Permission/Authority of the Managing Agent. From and
after the Completion Date, Lloyd's, the Prudential Regulation Authority and/or
the Financial Conduct Authority (as appropriate) withdraws the permission and/or
authority of the Managing Agent to act as a managing agent at Lloyd's or to
manage any Managed Syndicate;

7.1.15    Managing Agent Ceases to Act. From and after the Completion Date, the
Managing Agent ceases to act as a managing agent at Lloyd's unless a substitute
managing agent is appointed (on terms acceptable to the Bank) in place of the
Managing Agent pursuant to the Underwriting Bylaw (No.2 of 2003);

7.1.16    Insurers (Reorganization and Winding Up)(Lloyd's) Regulations 2005.
From and after the Completion Date, a "Lloyd's Market Reorganisation Order" is
made by the English courts in relation to the "association of underwriters known
as Lloyd's" as each of those terms is defined in the Insurers (Reorganisation
and Winding Up) (Lloyd's) Regulations 2005 and (a) the Borrower is an "affected
market participant" (as defined in the Insurers (Reorganisation and Winding Up)
(Lloyd's) Regulations 2005); or (b) such "Lloyd's Market Reorganisation Order"
would be reasonably likely to have a Material Adverse Change;

7.1.17    Financial Services and Markets Act 2000. From and after the Completion
Date, either (a) a failure by Lloyd's (or, where appropriate, the Members of
Lloyd's taken together) to satisfy the solvency requirements to which it is or
they are subject by virtue of Part XIX of the Financial Services and Markets Act
2000, the Handbook or any statutory provision enacted after the date of this
agreement and a failure to comply with any binding requirement to rectify the
position within the time period permitted for such rectification; or (b) the
authorization or permission granted to Lloyd's to carry on a regulated activity
pursuant to the Financial Markets and Services Act 2000 is withdrawn, removed,
revoked or cancelled by the Prudential Regulation Authority or the Financial
Conduct Authority, which, in either such case, in the reasonable opinion of the
Bank, is reasonably likely to have a Material Adverse Change;

7.1.18    Insurance Licenses. (i) Any one or more Licenses of the Insurance
Subsidiaries shall be suspended, limited or terminated or shall not be renewed
and such action would reasonably be expected to result in, either individually
or in the aggregate, a Material Adverse Change or (ii) from and after the
Completion Date, Lloyd's, the Prudential Regulation Authority, the Financial
Conduct Authority or any other relevant authority withdraws any license or
consent necessary for the conduct of the Corporate Member's business of
underwriting insurance at Lloyd's and that license or consent is not immediately
replaced so as to enable the Corporate Member to, without cessation, continue
the conduct of the Corporate Member's business of underwriting insurance at
Lloyd's; or

7.1.19    Relief Proceedings. (i) A Relief Proceeding shall have been instituted
against the Borrower or any of its Subsidiaries (other than Insignificant
Subsidiaries) and such Relief Proceeding shall remain undismissed or unstayed
and in effect for a period of thirty (30) consecutive days or such court shall
enter a decree or order granting any of the relief sought in such Relief
Proceeding, (ii) the Borrower or any of its Subsidiaries (other than
Insignificant Subsidiaries) institutes, or takes any action in furtherance of, a
Relief Proceeding, or (iii) the Borrower or any of its Subsidiaries (other than
Insignificant Subsidiaries) ceases to be Solvent or admits in writing its
inability to pay its debts as they mature.

7.2    Consequences of Event of Default.

7.2.1    Events of Default Other Than Bankruptcy, Insolvency or Reorganization
Proceedings. If an Event of Default specified under Sections 7.1.1 through
7.1.18 shall occur and be continuing, the Bank shall be under no obligation to
issue the Letter of Credit and the Bank may (i) by written notice to the
Borrower, declare any unpaid fees and all other Indebtedness of the Borrower to
the Bank hereunder and thereunder to be forthwith due and payable, and the same
shall thereupon become and be immediately due and payable to the Bank without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived, and (ii) require the Borrower to, and the Borrower
shall thereupon, deposit in the Cash Collateral Account, as Cash Collateral for
its Obligations under the FAL LC Documents, an amount necessary to cause the
balance thereof to be no less than the Minimum Collateral Amount; and

7.2.2    Bankruptcy, Insolvency or Reorganization Proceedings. If an Event of
Default specified under Section 7.1.19 shall occur, the Bank shall be under no
obligation to issue Letter of Credit, the Borrower shall immediately deposit in
the Cash Collateral Account, as Cash Collateral for its Obligations under the
FAL LC Documents, an amount necessary to cause the balance thereof to be no less
than the Minimum Collateral Amount, and the unpaid principal amount of the
Letter of Credit Borrowings then outstanding and all interest accrued thereon,
any unpaid fees and all other Indebtedness of the Borrower to the Bank hereunder
and thereunder shall be immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived;
and

7.2.3    Set-off. If an Event of Default shall have occurred and be continuing,
the Bank, each of its Affiliates and any Participant is hereby authorized at any
time and from time to time, to the fullest extent permitted by Applicable Law,
to set off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by the Bank, any such
Affiliate or any such Participant to or for the credit or the account of the
Borrower against any and all of the Obligations of the Borrower now or hereafter
existing under this Agreement or any other FAL LC Document to the Bank,
Affiliate or Participant, irrespective of whether or not the Bank, Affiliate or
Participant shall have made any demand under this Agreement or any other FAL LC
Document and although such Obligations of the Borrower may be contingent or
unmatured are owed to a branch or office of the Bank different from the branch
or office holding such deposit or obligated on such Indebtedness. The rights of
the Bank, its Affiliates and Participants under this Section are in addition to
other rights and remedies (including other rights of setoff) that the Bank, its
Affiliates and Participants may have. The Bank agrees to notify the Borrower
promptly after any such setoff and application; provided that the failure to
give such notice shall not affect the validity of such setoff and application;
and

7.2.4    Application of Proceeds. From and after the date on which the Bank has
taken any action pursuant to this Section 7.2 and until all Obligations of the
Borrower have been paid in full, any and all proceeds received by the Bank from
the exercise of any other remedy by the Bank, shall be applied as follows:
(i)    first, to reimburse the Bank for out-of-pocket costs, expenses and
disbursements, including reasonable attorneys’ and paralegals’ fees and legal
expenses, incurred by the Bank in connection with collection of any Obligations
of the Borrower under any of the FAL LC Documents;
(ii)    second, to the repayment of all Obligations then due and unpaid of the
Borrower to the Bank or its Affiliates incurred under this Agreement, whether of
Reimbursement Obligations, interest, fees, expenses or otherwise and to Cash
Collateralize the Letter of Credit Obligations in an amount not less than the
Minimum Collateral Amount, in such manner as the Bank may determine in its
discretion; and
(iii)    the balance, if any, as required by Law.

8.    MISCELLANEOUS

8.1    Modifications, Amendments or Waivers. No modification, amendment or
waiver of any provision of this Agreement or any other FAL LC Document nor
consent to any departure by the Bank or the Borrower therefrom shall in any
event be effective unless the same shall be in writing and signed by the Bank
and the Borrower, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

8.2    No Implied Waivers; Cumulative Remedies. No course of dealing and no
delay or failure of the Bank in exercising any right, power, remedy or privilege
under this Agreement or any other FAL LC Document shall affect any other or
future exercise thereof or operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any further exercise thereof or of any other
right, power, remedy or privilege. The rights and remedies of the Bank under
this Agreement and any other FAL LC Documents are cumulative and not exclusive
of any rights or remedies which they would otherwise have.

8.3    Expenses; Indemnity; Damage Waiver.

8.3.1    Costs and Expenses. The Borrower agrees to pay (i) all out‑of‑pocket
expenses incurred by the Bank and its Affiliates (including the reasonable fees,
charges and disbursements of counsel for the Bank), in connection with the
preparation, negotiation, execution, delivery and administration of this
Agreement and the other FAL LC Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all out‑of‑pocket
expenses incurred by the Bank in connection with the issuance, amendment,
renewal or extension of the Letter of Credit or any demand for payment
thereunder, (iii) all out-of-pocket expenses incurred by the Bank (including the
reasonable fees, charges and disbursements of any counsel for the Bank), in
connection with the enforcement or protection of its rights (A) in connection
with this Agreement and the other FAL LC Documents, including its rights under
this Section, or (B) in connection with the Letter of Credit issued hereunder,
including all such out‑of‑pocket expenses incurred during any workout,
restructuring or negotiations in respect of the Letters of Credit, and (iv)
subject to Section 6.1.5, all reasonable out-of-pocket expenses of the Bank’s
regular employees and agents engaged periodically to perform audits of the
Borrower’s books, records and business properties.

8.3.2    Indemnification by the Borrower. The Borrower shall indemnify the Bank
and each Related Party of any of the foregoing Persons (each such Person being
called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses (including the
fees, charges and disbursements of any counsel for any Indemnitee), incurred by
any Indemnitee or asserted against any Indemnitee by any third party arising out
of, in connection with, or as a result of (i) the execution or delivery of this
Agreement, any other FAL LC Document or any agreement or instrument contemplated
hereby or thereby, the performance or nonperformance by the parties hereto of
their respective obligations hereunder or thereunder or the consummation of the
transactions contemplated hereby or thereby, (ii) the Letter of Credit or the
use or proposed use of the proceeds therefrom (including any refusal by the Bank
to honor a demand for payment under the Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of the Letter of Credit), (iii) breach of representations, warranties or
covenants of the Borrower under the FAL LC Documents, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, including any such items or losses relating to or arising under
Environmental Laws or pertaining to environmental matters, whether based on
contract, tort or any other theory, whether brought by a third party or by the
Borrower, and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or (y) result from a claim brought by the Borrower against an
Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or
under any other FAL LC Document, if the Borrower has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction.

8.3.3    Waiver of Consequential Damages, Etc. To the fullest extent permitted
by Applicable Law, the Borrower shall not assert, and each hereby waives, any
claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
FAL LC Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, the Letter of Credit or the use of
the proceeds thereof.

8.3.4    Payments. All amounts due under this Section shall be payable not later
than ten (10) days after demand therefor.

8.4    Holidays. Whenever any payment or action to be made or taken hereunder
shall be stated to be due on a day which is not a Business Day or New York
Business Day, such payment or action shall be made or taken on the next
following Business Day or New York Business Day, respectively, and such
extension of time shall be included in computing interest or fees, if any, in
connection with such payment or action, except that any amount due hereunder
shall be due on the Business Day or New York Business Day, as the case may be,
preceding the Expiration Date if the Expiration Date is not a Business Day or a
New York Business Day, respectively.

8.5    Notices; Effectiveness; Electronic Communication.

8.5.1    Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in Section 8.5.2), all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopier to it at
its address set forth on Schedule 1.1(B).
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient). Notices delivered through electronic communications to the extent
provided in Section 8.5.2, shall be effective as provided in such Section.

8.5.2    Electronic Communications. Notices and other communications to the Bank
hereunder may be delivered or furnished by electronic communication (including
e‑mail and Internet or intranet websites) pursuant to procedures approved by the
Bank. The Bank or the Borrower may, in its discretion, agree to accept notices
and other communications to it hereunder by electronic communications pursuant
to procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications. Unless the Bank otherwise
prescribes, (i) notices and other communications sent to an e-mail address shall
be deemed received upon the sender’s receipt of an acknowledgement from the
intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement); provided that if
such notice or other communication is not sent during the normal business hours
of the recipient, such notice or communication shall be deemed to have been sent
at the opening of business on the next Business Day for the recipient, and
(ii) notices or communications posted to an Internet or intranet website shall
be deemed received upon the deemed receipt by the intended recipient at its
e-mail address as described in the foregoing clause (i) of notification that
such notice or communication is available and identifying the website address
therefor. Notwithstanding the foregoing, any report, notice, information or
other document to be delivered by the Borrower pursuant to Section 6.3 may be
delivered electronically in accordance with Section 6.3.6.8.

8.5.3    Change of Address, Etc. Any party hereto may change its address, e‑mail
address or telecopier number for notices and other communications hereunder by
notice to the other parties hereto.

8.6    Severability. The provisions of this Agreement are intended to be
severable. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.

8.7    Duration; Survival. All representations and warranties of the Borrower
contained herein or made in connection herewith shall survive the execution and
delivery of this Agreement, the completion of the transactions hereunder and
Payment In Full. All covenants and agreements of the Borrower contained herein
relating to the payment of principal, interest, premiums, additional
compensation or expenses and indemnification, including those set forth in
Section 3 and Section 8.3, shall survive Payment In Full. All other covenants
and agreements of the Borrower shall continue in full force and effect from and
after the date hereof and until Payment In Full.

8.8    Successors and Assigns.

8.8.1    Successors and Assigns Generally. The provisions of this Agreement
shall be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Bank and Bank may not assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an
assignee in accordance with the provisions of Section 8.8.2, (ii) by way of
participation in accordance with the provisions of Section 8.8.4, or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of Section 8.8.6 (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in Section 8.8.4 and, to the extent expressly contemplated
hereby, the Related Parties of the Bank) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

8.8.2    Assignments by the Bank. The Bank may at any time assign to one or more
assignees all but not less than all of its rights and obligations under this
Agreement (including all but not less than all of its LC Commitment); provided
that any such assignment shall be subject to the following conditions:
(i)    Required Consents. The consent of the Borrower shall be required for any
assignment (such consent not to be unreasonably withheld or delayed) unless (x)
an Event of Default has occurred and is continuing at the time of such
assignment or (y) such assignment is to an Affiliate of the Bank or an Approved
Fund; provided that the Borrower shall be deemed to have consented to any such
assignment unless it shall object thereto by written notice to the Bank within
five (5) Business Days after having received notice thereof.
(ii)    Assignment and Assumption Agreement. The parties to each assignment
shall execute and deliver an Assignment and Assumption Agreement.
(iii)    Approved Credit Institution. No such assignment shall be made to any
assignee which is not an Approved Credit Institution.
(iv)    Tax Forms. The parties to each assignment shall execute and deliver to
the Borrower the applicable tax forms required by Section 3.3.5
From and after the effective date specified in each Assignment and Assumption
Agreement, the assignee thereunder shall be a party to this Agreement and, to
the extent of the interest assigned by such Assignment and Assumption Agreement,
have the rights and obligations of the Bank under this Agreement, and the Bank
shall, to the extent of the interest assigned by such Assignment and Assumption
Agreement, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption Agreement covering all of the Bank’s rights
and obligations under this Agreement, the Bank shall cease to be a party hereto)
but shall continue to be entitled to the benefits of Sections 3.2, and 8.3 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Any assignment or transfer by the Bank of rights or obligations
under this Agreement that does not comply with this Section 8.8.2 shall be
treated for purposes of this Agreement as a sale by the Bank of a participation
in such rights and obligations in accordance with Section 8.8.4.

8.8.3    Register. The Bank, acting solely for this purpose as an agent of the
Borrower, shall maintain a record of the names and addresses of the assignees,
if any, and the LC Commitment of, and amounts owing to, each assignee pursuant
to the terms hereof from time to time. Such register shall be conclusive, and
the Borrower and the Bank and any assignee may treat each Person whose name is
in such register pursuant to the terms hereof as a lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. Such
register shall be available for inspection by the Borrower and any assignee, at
any reasonable time and from time to time upon reasonable prior notice.

8.8.4    Participations. The Bank may at any time, without the consent of, or
notice to, the Borrower, sell participations to any Person (other than a natural
person or the Borrower or any of its Affiliates or Subsidiaries) (each, a
“Participant”) in all or a portion of the Bank’s rights and/or obligations under
this Agreement (including all or a portion of its LC Commitment and/or the
amounts owing to it hereunder); provided that (i) the Bank’s obligations under
this Agreement shall remain unchanged, (ii) the Bank shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower shall continue to deal solely and directly with the Bank
in connection with the Bank’s rights and obligations under this Agreement.
Any agreement or instrument pursuant to which the Bank sells such a
participation shall provide that the Bank shall retain the sole right to enforce
this Agreement and to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such agreement or instrument may
provide that the Bank will not, without the consent of the Participant, agree to
any amendment, modification or waiver to this Agreement or any other FAL LC
Document with respect any increase to the LC Commitment, extension of the
Expiration Date, time for payment of the Letter of Credit Fee or reduction of
the Applicable Letter of Credit Fee Rate. Subject to Section 8.8.5, the Borrower
agrees that each Participant shall be entitled to the benefits of Section 3.2 to
the same extent as if it were the Bank and had acquired its interest by
assignment pursuant to Section 8.8.2. To the extent permitted by Law, each
Participant also shall be entitled to the benefits of Section 7.2.3 as though it
were the Bank.
If the Bank sells a participation, it shall, acting solely for this purpose as
an agent of the Borrower, maintain a register on which it enters the name and
address of each Participant and the amounts of each Participant’s interest in
the obligations under the FAL LC Documents (the “Participant Register”);
provided that the Bank shall have no obligation to disclose all or any portion
of the Participant Register (including the identity of any Participant or any
information relating to a Participant’s interest in any commitments, loans,
letters of credit or its other obligations under any FAL LC Document) to any
Person except to the extent that such disclosure is necessary to establish that
such commitment, letter of credit or other obligation is in registered form
under Section 5f.103-1(c) of the United States Treasury Regulations. The entries
in the Participant Register shall be conclusive absent manifest error, and the
Bank shall treat each Person whose name is recorded in the Participant Register
as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary.
Section 3.3.5 shall apply to each Participant as if it had acquired its interest
by assignment pursuant to Section 8.8.2.

8.8.5    Limitations upon Participant Rights Successors and Assigns Generally. A
Participant shall not be entitled to receive any greater payment under Sections
3.2, 3.3 or 8.3 than the Bank would have been entitled to receive with respect
to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent. A Participant that is not a U.S. Person shall not be entitled to the
benefits of Section 3.3 unless the Borrower is notified of the participation
sold to such Participant.

8.8.6    Certain Pledges; Successors and Assigns Generally. The Bank may at any
time pledge or assign a security interest in all or any portion of its rights
under this Agreement to secure its obligations, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release the Bank from any of its obligations
hereunder or substitute any such pledgee or assignee for the Bank as a party
hereto.

8.9    Confidentiality.

8.9.1    General. The Bank agrees to maintain the confidentiality of the
Information, except that Information may be disclosed (i) to its Affiliates and
to its and its Affiliates’ respective partners, directors, officers, employees,
agents, advisors and other representatives (it being understood that the Persons
to whom such disclosure is made will be informed of the confidential nature of
such Information and instructed to keep such Information confidential), (ii) to
the extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (iii) to the extent required by
Applicable Laws or regulations or by any subpoena or similar legal process,
(iv) to any other party hereto, (v) in connection with the exercise of any
remedies hereunder or under any other FAL LC Document or any action or
proceeding relating to this Agreement or any other FAL LC Document or the
enforcement of rights hereunder or thereunder, (vi) subject to an agreement
containing provisions substantially the same as those of this Section, to
(A) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or (B) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations, (vii) with the consent
of the Borrower or (viii) to the extent such Information (Y) becomes publicly
available other than as a result of a breach of this Section or (Z) becomes
available to the Bank or any of its Affiliates on a nonconfidential basis from a
source other than the Borrower. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information. The terms of this
Section 8.9.1 shall terminate 2 years following the Expiration Date.

8.9.2    Sharing Information With Affiliates of the Bank. The Borrower
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to the Borrower or one or more of its
Affiliates (in connection with this Agreement or otherwise) by the Bank or by
one or more Subsidiaries or Affiliates of the Bank and the Borrower hereby
authorizes the Bank to share any information delivered to the Bank by the
Borrower and its Subsidiaries pursuant to this Agreement to any such Subsidiary
or Affiliate subject to the provisions of Section 8.9.1.

8.10    Counterparts; Integration; Effectiveness.

8.10.1    Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
FAL LC Documents, and any separate letter agreements with respect to fees
payable to the Bank, constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof including
any prior confidentiality agreements and commitments. Except as provided in
Section 5, this Agreement shall become effective when it shall have been
executed by the Bank and when the Bank shall have received counterparts hereof
that bear the signature of the Borrower. Delivery of an executed counterpart of
a signature page of this Agreement by telecopy or e‑mail shall be effective as
delivery of a manually executed counterpart of this Agreement.

8.11    CHOICE OF LAW; SUBMISSION TO JURISDICTION; WAIVER OF VENUE; SERVICE OF
PROCESS; WAIVER OF JURY TRIAL.

8.11.1    Governing Law. This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York. The Letter of Credit shall be
governed by, and interpreted in accordance with, English law.

8.11.2    SUBMISSION TO JURISDICTION. Each party hereto irrevocably and
unconditionally agrees that it will not commence any action, litigation or
proceeding of any kind or description, whether in law or equity, whether in
contract or in tort or otherwise, against the other party hereto or any of their
Related Parties in any way relating to this Agreement or any other FAL LC
Document or the transactions relating hereto or thereto, in any forum other than
the courts of the State of New York sitting in New York County, and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof (provided that the foregoing shall not affect
any right that the Bank may have under Applicable Law to bring any action or
proceeding relating to the Letter of Credit, the Cash Collateral Account or
other properties of the Borrower in the courts of another jurisdiction), and
each of the parties hereto irrevocably and unconditionally submits to the
jurisdiction of such courts and agrees that all claims in respect of any such
action, litigation or proceeding may be heard and determined in such New York
State court or, to the fullest extent permitted by Applicable Law, in such
federal court. Each of the parties hereto agrees that a final judgment in any
such action, litigation or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.

8.11.3    WAIVER OF VENUE. The Borrower irrevocably and unconditionally waives,
to the fullest extent permitted by Applicable Law, any objection that it may now
or hereafter have to the laying of venue of any action or proceeding arising out
of or relating to this Agreement or any other FAL LC Document in any court
referred to in Section 8.11.2. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by Applicable Law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

8.11.4    SERVICE OF PROCESS. Each party hereto irrevocably consents to service
of process in the manner provided for notices in Section 8.5. Nothing in this
Agreement will affect the right of any party hereto to serve process in any
other manner permitted by Applicable Law.

8.11.5    WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER FAL LC DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER FAL LC DOCUMENTS BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

8.12    USA Patriot Act Notice. The Bank, to the extent it is subject to the USA
Patriot Act, hereby notifies the Borrower that pursuant to the requirements of
the USA Patriot Act, it is required to obtain, verify and record information
that identifies the Borrower, which information includes the name and address of
the Borrower and other information that will allow the Bank to identify the
Borrower in accordance with the USA Patriot Act.

8.13    Contractual Recognition of Bail-In. Notwithstanding any other term of
any FAL LC Document or any other agreement, arrangement or understanding between
the parties hereto, each party hereto acknowledges and accepts that any
liability of any party hereto to any other party hereto under or in connection
with the FAL LC Documents may be subject to Bail-In Action by the relevant
Resolution Authority and acknowledges and accepts to be bound by the effect of:
(i)    any Bail-In Action in relation to any such liability, including (without
limitation);
(A)    a reduction, in full or in part, in the principal amount, or outstanding
amount due (including any accrued but unpaid interest) in respect of any such
liability;
(B)    a conversion of all, or part of, any such liability into shares or other
instruments of ownership that may be issued to, or conferred on, it; and
(C)    a cancellation of any such liability; and
(ii)    a variation of any term of any FAL LC Document to the extent necessary
to give effect to any Bail-In Action in relation to any such liability.

1
709155153 12403011

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

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

CINCINNATI FINANCIAL CORPORATION,     as Borrower

By: /s/ Michael J. Sewell
Name: Michael J. Sewell
Title: Chief Financial Officer

    

709155153 12403011
Credit Agreement
Signature Page

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

THE BANK OF NOVA SCOTIA, as Bank
By: /s/ Eli Mou
Name: Eli Mou
Title: Managing Director

709155153 12403011
Credit Agreement
Signature Page