AMENDED AND RESTATED CREDIT AGREEMENT

 

 

 

among

 

 

 

EVEREST RE GROUP, LTD.,
EVEREST REINSURANCE (BERMUDA), LTD.,
EVEREST INTERNATIONAL REINSURANCE, LTD. and
the other Subsidiary Borrowers Party Hereto,
as Borrowers

 

 

 

THE LENDERS NAMED HEREIN,

 

 

 

and

 

 

 

WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent

 

 

 

CITIBANK, N.A.
DEUTSCHE BANK AG NEW YORK BRANCH
HSBC BANK USA, N.A., and
ING BANK N.V., LONDON BRANCH
As Documentation Agents

 

 

 

$850,000,000 Senior Credit Facilities

 

 

 

Sole Lead Arranger and Book Manager:
WACHOVIA CAPITAL MARKETS, LLC

 

 

 

Dated as of July 27, 2007

 

 

 

 

 

1

 

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

 

TABLE OF CONTENTS

 

 

Page

RECITALS

1

 

 

 

ARTICLE I

 

 

 

DEFINITIONS

1.1

Defined Terms

1

1.2

Accounting Terms

20

1.3

Other Terms; Construction

20

 

 

 

ARTICLE II

 

 

 

AMOUNT AND TERMS OF THE CREDIT

 

 

 

2.1

Commitments

20

2.2

Borrowings

20

2.3

Disbursements; Funding Reliance; Domicile of Loans

21

2.4

Notes

22

2.5

Termination and Reduction of Commitments

23

2.6

Mandatory Payments and Prepayments

24

2.7

Voluntary Prepayments

24

2.8

Interest

25

2.9

Fees

27

2.10

Interest Periods

28

2.11

Conversions and Continuations

29

2.12

Method of Payments; Computations

30

2.13

Recovery of Payments

31

2.14

Use of Proceeds

32

2.15

Pro Rata Treatment

32

2.16

Increased Costs; Change in Circumstances; Illegality; etc

33

2.17

Taxes

35

2.18

Compensation

38

2.19

Replacement Lenders

38

2.20

Increase in Commitments

39

2.21

Extension of Tranche 1 Maturity Date and Tranche 2 Maturity Date

40

 

 

 

ARTICLE III

 

 

 

LETTERS OF CREDIT

 

 

 

3.1

Issuance of Tranche 1 Letters of Credit

42

3.2

Issuance of Tranche 2 Letters of Credit

43

3.3

Notices

45

3.4

Participations

45

 

i

 

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

 

 

 

 

3.5

Reimbursement

46

3.6

Obligations Absolute

46

3.7

No Liability of the Issuing Lender

47

3.8

Cash Collateral Account

48

3.9

The Issuing Lender

49

3.10

Effectiveness

49

 

 

 

ARTICLE IV

 

 

 

CONDITIONS PRECEDENT

 

 

 

4.1

Conditions Precedent to the Restatement Effective Date

49

4.2

Conditions Precedent to All Loans and Letters of Credit

52

 

 

 

ARTICLE V

 

 

 

REPRESENTATIONS AND WARRANTIES

 

 

 

5.1

Corporate Organization and Power

52

5.2

Authorization; Enforceability

53

5.3

No Violation

53

5.4

Governmental and Third-Party Authorization; Permits

53

5.5

Litigation

54

5.6

Taxes

54

5.7

Subsidiaries

54

5.8

Full Disclosure

55

5.9

Margin Regulations

55

5.10

No Material Adverse Effect

55

5.11

Financial Matters

55

5.12

ERISA

56

5.13

Environmental Matters

56

5.14

Compliance With Laws

57

5.15

Regulated Industries

57

5.16

Insurance

57

5.17

OFAC; PATRIOT Act

58

5.18

Security Documents

58

 

 

 

ARTICLE VI

 

 

 

AFFIRMATIVE COVENANTS

 

 

 

6.1

GAAP Financial Statements

58

6.2

Statutory Financial Statements

59

6.3

Other Business and Financial Information

60

6.4

Corporate Existence; Franchises; Maintenance of Properties

62

6.5

Compliance with Laws

63

6.6

Payment of Obligations

63

6.7

Insurance

63

 

ii

 

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

 

6.8

Maintenance of Books and Records; Inspection

63

6.9

PATRIOT Act Compliance

63

6.10

Collateral

64

6.11

Further Assurances

64

 

 

 

ARTICLE VII

 

 

 

FINANCIAL COVENANTS

 

 

 

7.1

Maximum Consolidated Indebtedness to Total Capitalization

65

7.2

Consolidated Net Worth

65

 

 

 

ARTICLE VIII

 

 

 

NEGATIVE COVENANTS

 

 

 

8.1

Fundamental Changes

65

8.2

Indebtedness

65

8.3

Liens

66

8.4

Disposition of Assets

68

8.5

Transactions with Affiliates

68

8.6

Restricted Payments

69

8.7

Lines of Business

69

8.8

Fiscal Year

69

8.9

Ratings

69

8.10

Accounting Changes

70

8.11

Limitations on Certain Restrictions

70

8.12

Collateral

70

8.13

Private Act

71

 

 

 

ARTICLE IX

 

 

 

EVENTS OF DEFAULT

 

 

 

9.1

Events of Default

71

9.2

Remedies; Termination of Commitments, Acceleration, Etc

74

9.3

Remedies; Set Off

75

 

 

 

ARTICLE X

 

 

 

THE ADMINISTRATIVE AGENT

 

 

 

10.1

Appointment

75

10.2

Nature of Duties

75

10.3

Exculpatory Provisions

76

10.4

Reliance by Administrative Agent

76

10.5

Non-Reliance on Administrative Agent and Other Lenders

76

10.6

Notice of Default

77

 

iii

 

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

 

10.7

Indemnification

77

10.8

The Administrative Agent in its Individual Capacity

78

10.9

Successor Agent

78

10.10

Collateral and Guaranty Matters

79

10.11

Issuing Lender

79

10.12

No Other Duties, Etc

79

 

 

 

ARTICLE XI

 

 

 

MISCELLANEOUS

11.1

Fees and Expenses

80

11.2

Indemnification

80

11.3

Governing Law; Consent to Jurisdiction

81

11.4

Waiver of Trial by Jury

82

11.5

Notices

82

11.6

Amendments Waivers, Etc

82

11.7

Assignments, Participations

84

11.8

No Waiver

86

11.9

Successors and Assigns

86

11.10

Survival

87

11.11

Severability

87

11.12

Construction

87

11.13

Confidentiality

87

11.14

Counterparts; Effectiveness

88

11.15

Disclosure of Information

88

11.16

Nonreliance

88

11.17

Entire Agreement

88

11.18

PATRIOT Act Notice

88

11.19

Addition and Termination of Borrowers

88

11.20

Judgment Currency

89

11.21

Effectiveness of the Amendment and Restatement; Existing Credit Agreement

89

 

 

 

ARTICLE XII

 

 

 

THE GUARANTY

12.1

The Guaranty

90

12.2

Guaranty Unconditional

90

12.3

Discharge Only upon Payment in Full; Reinstatement in Certain Circumstances

91

12.4

Waiver by Everest Group

91

12.5

Subrogation

91

12.6

Stay of Acceleration

92

12.7

Continuing Guaranty; Assignments

92

 

iv

 

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

 

EXHIBITS

 

 

 

Exhibit A

Form of Note

 

Exhibit B 1

Form of Notice of Borrowing

 

Exhibit B 2

Form of Notice of Conversion/Continuation

 

Exhibit B-3

Form of Letter of Credit Notice

 

Exhibit C

Form of Compliance Certificate

 

Exhibit D

Form of Assignment and Acceptance

 

Exhibit E

Form of Amended and Restated Security Agreement

 

Exhibit F

Form of Collateral Value Report

 

Exhibit G

Form of Joinder Agreement

 

Exhibit H

Form of Assumption Agreement

 

 

 

 

SCHEDULES

 

 

 

Schedule 1.1(a)

Commitments and Notice Addresses

 

Schedule 1.1(b)

Collateral Value

 

Schedule 5.4

Licenses

 

Schedule 5.7

Subsidiaries

 

Schedule 8.3

Liens

 

 

 

v

 

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

AMENDED AND RESTATED CREDIT AGREEMENT

THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of July 27, 2007, is made
among EVEREST RE GROUP, LTD., a company organized under the laws of Bermuda
(“Everest Group”), EVEREST REINSURANCE (BERMUDA), LTD., a company organized
under the laws of Bermuda (“Everest Bermuda”), EVEREST INTERNATIONAL
REINSURANCE, LTD., a company organized under the laws of Bermuda (“Everest
International”, and collectively with Everest Group, Everest Bermuda and any
other Person that joins this Agreement upon the terms and conditions set forth
in Section 11.19, the “Borrowers”), the Lenders (as hereinafter defined) and
WACHOVIA BANK, NATIONAL ASSOCIATION (“Wachovia”), as administrative agent for
the Lenders, and CITIBANK, N.A., DEUTSCHE BANK AG NEW YORK BRANCH, HSBC BANK
USA, N.A., and ING BANK N.V., LONDON BRANCH as Documentation Agents for the
Lenders.

RECITALS

The Borrowers, certain other lenders, Wachovia, as administrative agent, and
Barclays Bank, PLC, Deutsche Bank AG New York Branch, and The Royal Bank of
Scotland PLC, as documentation agents, are parties to a certain Credit Agreement
dated as of December 8, 2004 (the “Existing Credit Agreement”).

The parties hereto have agreed to amend and restate the Existing Credit
Agreement on the terms and conditions set forth herein, it being the intention
of the Borrowers, the Lenders and the Administrative Agent that this Amended and
Restated Credit Agreement and the Credit Documents executed in connection
herewith shall not effect the novation of the obligations of the Borrowers
thereunder but be merely a restatement and, where applicable, an amendment of
and substitution for the terms governing such obligations hereafter.

The Lenders are willing to make available to the Borrowers the credit facilities
provided for herein subject to and on the terms and conditions set forth in this
Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual provisions, covenants and
agreements herein contained, the parties hereto hereby agree that the Existing
Credit Agreement is amended and restated in its entirety as follows:

ARTICLE I

DEFINITIONS

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

 

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

“Account Control Agreements” means, collectively, each control agreement among a
Custodian, the Administrative Agent and (respectively) each of the Borrowers,
each in form and substance reasonably satisfactory to the Administrative Agent,
as amended.

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

“Additional Commitment” shall have the meaning given to such term in Section
2.20(c).

“Additional Lenders” shall have the meaning given to such term in Section
2.20(b).

“Additional Tranche 1 Lender” shall have the meaning given to such term in
Section 2.20(a).

“Additional Tranche 2 Lender” shall have the meaning given to such term in
Section 2.20(b).

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

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

“Administrative Questionnaire” means, with respect to each Lender, the
administrative questionnaire in the form submitted to such Lender by the
Administrative Agent and returned to the Administrative Agent duly completed by
such Lender.

“Affiliate” shall mean, as to any Person, each other Person that directly or
indirectly, through one or more intermediaries, owns or controls, is controlled
by or under common control with, such Person or is a director or officer of such
Person. For purposes of this definition, with respect to any Person “control”
shall mean the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

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

“Amended and Restated Security Agreement” shall mean the amended and restated
security agreement substantially in the form of Exhibit E hereto, as the same
may be amended, modified or supplemented from time to time in accordance with
the provisions thereof.

“Annual Statement” shall mean, with respect to any Insurance Subsidiary for any
fiscal year, the annual financial statements of such Insurance Subsidiary as
required to be filed with the Insurance Regulatory Authority of its jurisdiction
of domicile and in accordance with the laws of

 

2

 

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

such jurisdiction, together with all exhibits, schedules, certificates and
actuarial opinions required to be filed or delivered therewith.

“Applicable Percentage” shall mean, at any time from and after the Restatement
Effective Date, the applicable percentage (a) to be added to the LIBOR Rate for
purposes of determining the Adjusted LIBOR Rate, (b) to be used in calculating
the commitment fee payable pursuant to Section 2.9(b), (c) to be used in
calculating the utilization fee payable pursuant to Section 2.9(c) and (d) to be
used in calculating the letter of credit fee payable pursuant to Section 2.9(d),
in each case as determined under the following matrix with reference to Everest
Group’s non-credit enhanced long-term senior unsecured debt rating by Moody’s or
Standard & Poor’s (in each case based upon the higher of the two ratings), when
available, or, if not available, then with reference to three rating levels
below the higher of the financial strength ratings (individual company or pool
rating, if applicable) assigned to Everest Bermuda by Standard & Poor’s and
Moody’s (the “Financial Strength Rating”):

 

Pricing

Level

S&P/
Moody’s Rating

Interest Margin for LIBOR Loans

Tranche 1
Commitment Fee

Tranche 1
Utilization Fee
Usage > 50%

Tranche 1 Letter of Credit Fee

 

I

A+/ A1 or above

.20%

.05%

.05%

.20%

 

II

A/ A2

.25%

.06%

.05%

.25%

 

III

A-/ A3

.30%

.07%

.05%

.30%

 

IV

Less than A-/A3

.40%

.09%

.10%

.40%

 

 

 

 

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

On each Adjustment Date (as hereinafter defined), the Applicable Percentage for
all LIBOR Loans and the commitment fee, utilization fee and letter of credit
fees payable pursuant to Sections 2.9(b), 2.9(c) and 2.9(d) respectively shall
be adjusted effective as of such date in accordance with the above matrix;
provided, however, that, notwithstanding the foregoing or anything else herein
to the contrary, if at any time an Event of Default described in Section 9.1(a)
shall have occurred and be continuing, at all times from and including the date
on which such Event of Default occurred to the date on which such Event of
Default shall have been cured or waived, each Applicable Percentage shall be
determined in accordance with Level IV of the above matrix (notwithstanding the
actual level). For purposes of this definition, “Adjustment Date” shall mean the
date on which either Moody’s or Standard & Poor’s publicly announces

 

3

 

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

any change in its rating with respect to Everest Group’s non-credit enhanced
long-term senior unsecured debt rating or the Financial Strength Rating if
Everest Group does not have a senior unsecured debt rating. Until the first
Adjustment Date, each Applicable Percentage shall be determined in accordance
with Level II of the above matrix.

“Arranger” shall mean Wachovia Capital Markets, LLC.

“Assignee” shall have the meaning given to such term in Section 11.7(a).

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

“Assumption Agreement” shall mean an assumption agreement in substantially the
form of Exhibit H.

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

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

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

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

“Borrowers” has the meaning giving to such term in the introductory paragraph
hereof.

“Borrowing” shall mean the incurrence by a Borrower (including as a result of
conversions and continuations of outstanding Loans pursuant to Section 2.11) on
a single date of a group of Loans of a single Type and, in the case of LIBOR
Loans, as to which a single Interest Period is in effect.

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

“Business Day” shall mean (i) any day other than a Saturday or Sunday, a legal
holiday or a day on which commercial banks in Charlotte, North Carolina or New
York, New York are authorized by law or proclamation to be closed and (ii) in
respect of any determination relevant

 

4

 

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

to a LIBOR Loan, any such day that is also a day on which trading in Dollar
deposits is conducted by banks in the London interbank Eurodollar market.

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

“Cash Collateral Account” has the meaning given to such term in Section 3.8.

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

“Collateral” shall mean all the assets, property and interests in property that
shall from time to time be pledged or be purported to be pledged by the
Borrowers as direct or indirect security for the Tranche 2 Obligations pursuant
to any one or more of the Security Documents.

“Collateral Value” shall mean with respect to each Borrower for any Business Day
as of which it is being calculated, (a) for each category of Collateral set
forth on Schedule 1.1(b), an amount equal to the “Eligible Percentage” of the
market value (or, as to cash, the dollar amount) thereof set forth opposite such
category of Collateral on Schedule 1.1(b), and (b) for the Collateral, in the
aggregate, the sum of such amounts, in each case as of the close of business on
the immediately preceding Business Day or, if such amount is not determinable as
of the close of business on such immediately preceding Business Day, as of the
close of business on the most recent Business Day on which such amount is
determinable, which Business Day shall be not more than two (2) Business Days
prior to the Business Day as of which the Collateral Value is being calculated;
provided that the calculation of the Collateral Value shall be further subject
to the terms and conditions set forth in Section 8.12 and on Schedule 1.1(b);
and provided further that no Collateral (including, without limitation, cash)
shall be included in the calculation of the Collateral Value unless the
Administrative Agent, for the ratable benefit of the Tranche 2

 

5

 

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

Lenders, has a first priority perfected Lien on and security interest in such
Collateral pursuant to the Security Documents.

“Collateral Value Report” has the meaning specified in Section 6.10(b).

“Commitment” means, with respect to any Lender, such Lender’s Tranche 1
Commitment and/or Tranche 2 Commitment, as applicable.

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

“Consenting Lender” shall have the meaning given to such term in Section
2.21(b).

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

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

“Consolidated Net Worth” shall mean, as of any date of determination, the net
worth of Everest Group and its Subsidiaries as of such date, determined on a
consolidated basis in accordance with GAAP (without giving effect to adjustments
pursuant to Statement No. 115 of the Financial Accounting Standards Board of the
United States of America), but excluding any Disqualified Capital Stock.

“Contingent Obligation” shall mean, with respect to any Person, any direct or
indirect liability of such Person with respect to any Indebtedness, liability or
other obligation (the “primary obligation”) of another Person (the “primary
obligor”), whether or not contingent, (a) to purchase, repurchase or otherwise
acquire such primary obligation or any property constituting direct or indirect
security therefor, (b) to advance or provide funds (i) for the payment or
discharge of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor, (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor in respect thereof to make payment of such
primary obligation or (d) otherwise to assure or hold harmless the owner of any
such primary obligation against loss or failure or inability to perform in
respect thereof; provided, however, that, with respect to Everest Group and its
Subsidiaries, the term Contingent Obligation

6

 

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

shall not include (y) endorsements for collection or deposit in the ordinary
course of business or (z) obligations entered into by an Insurance Subsidiary in
the ordinary course of its insurance or reinsurance business under insurance
policies, surety bonds or contracts issued by it or to which it is a party,
including reinsurance agreements (and security posted by any such Insurance
Subsidiary in the ordinary course of its business to secure obligations
thereunder).

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

“Credit Documents” means this Agreement, the Notes, the Letter of Credit
Documents, the Fee Letter, the Amended and Restated Security Agreement, any
other Security Documents, any Assumption Agreement and all other agreements,
instruments, documents and certificates now or hereafter executed and delivered
to the Administrative Agent or any Lender by or on behalf of any Borrower with
respect to this Agreement, in each case as amended, modified, supplemented or
restated from time to time.

“Custodial Account” means each account of any Borrower on which (and on the
contents of which) a Lien has been granted as security for the Tranche 2
Obligations.

“Custodial Agreement” means each custodial or similar agreement between the
Borrowers (or any of them) and a Custodian, pursuant to which one or more
Custodial Accounts are maintained, in each case as amended.

“Custodian” means each bank or financial institution that maintains a Custodial
Account (in its capacity as custodian thereof), in each case including any
sub-custodian.

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

“Defaulting Lender” means any Lender that (i) has refused to fund, or otherwise
defaulted in the funding of, its ratable share of any Borrowing requested and
permitted to be made hereunder, including the funding of a participation
interest in Letters of Credit in accordance with the terms hereof, (ii) has
failed to pay to the Administrative Agent, Issuing Lender or any Lender when due
an amount owed by such Lender pursuant to the terms of this Credit Agreement,
unless such amount is subject to a good faith dispute, or (c) has been deemed
insolvent or has become subject to a bankruptcy or insolvency proceeding or to a
receiver, trustee or similar official, and such refusal has not been withdrawn
or such default has not been cured within three (3) Business Days.

“Disqualified Capital Stock” shall mean, with respect to any Person, any Capital
Stock of such Person that, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable), or upon the happening
of any event or otherwise, (i) matures or is mandatorily redeemable or subject
to any mandatory repurchase requirement, pursuant to a sinking fund obligation
or otherwise, (ii) is redeemable or subject to any mandatory repurchase
requirement at the sole option of the holder thereof, or (iii) is convertible
into or exchangeable for (whether at the option of the issuer or the holder
thereof) (a) debt securities or (b) any Capital Stock referred to in (i) or (ii)
above, in each case under (i), (ii) or (iii) above at any time on or prior to
the first anniversary of the later of (x) the Tranche 1 Maturity Date and (y)
Tranche 2

 

7

 

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

Maturity Date; provided, however, that only the portion of Capital Stock that so
matures or is mandatorily redeemable, is so redeemable at the option of the
holder thereof, or is so convertible or exchangeable on or prior to such date
shall be deemed to be Disqualified Capital Stock.

“Documentation Agents” has the meaning giving to such term in the introductory
paragraph hereof.

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

“Eligible Assignee” shall mean (i) a Lender; (ii) an Affiliate of a Lender; and
(iii) any other Person approved by the Administrative Agent, the Issuing Lender
and, unless an Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 11.7, Everest Group, such
approval not to be unreasonably withheld or delayed; provided, however, that
neither any Borrower nor an Affiliate of any Borrower shall qualify as an
Eligible Assignee.

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

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

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

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

“ERISA Event” shall mean any of the following with respect to a Plan or
Multiemployer Plan, as applicable: (i) a Reportable Event with respect to a Plan
or a Multiemployer Plan, (ii) a complete or partial withdrawal by Everest Group
or any ERISA Affiliate from a Multiemployer

 

8

 

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

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

“Event of Default” shall have the meaning given to such term in Section 9.1.

“Everest Bermuda” shall have the meaning given to such term in the introductory
paragraph of this Agreement.

“Everest Group” shall have the meaning given to such term in the introductory
paragraph of this Agreement.

“Everest Holdings” shall mean Everest Reinsurance Holdings, Inc., a Delaware
corporation and subsidiary of Everest Group.

“Everest International” shall have the meaning given to such term in the
introductory paragraph of this Agreement.

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

“Existing Credit Agreement” shall have the meaning given to such term in the
Recitals to this Agreement.

“Extension Date” shall have the meaning given to such term in Section 2.21(b).

 

9

 

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

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

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

“Fee Letter” shall mean the letter from Wachovia and the Arranger to the
Borrowers, dated June 21, 2007, relating to certain fees payable by the
Borrowers in respect of the transactions contemplated by this Agreement, as
amended, modified or supplemented from time to time.

“Final Maturity Date” shall mean the date when the Tranche 1 Maturity Date and
Tranche 2 Maturity Date have occurred, all Letters of Credit have expired or
terminated and all Obligations owing hereunder and in the other Credit Documents
have been paid in full.

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

“Foreign Lender” shall have the meaning given such term in Section 2.17(d).

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

“Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof and any central bank thereof, any municipal,
local, city or county government, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government (including any supra-national bodies such as the European Union or
the European Central Bank), and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.

“Guaranty” means the undertaking by Everest Group under Article XII.

“Hazardous Substances” shall mean any substances or materials (i) that are or
become defined as hazardous wastes, hazardous substances, pollutants,
contaminants or toxic substances under any Environmental Law, (ii) that are
defined by any Environmental Law as toxic, explosive, corrosive, ignitable,
infectious, radioactive, mutagenic or otherwise hazardous, (iii) the presence of
which require investigation or response under any Environmental Law, (iv) that
constitute a nuisance, trespass or health or safety hazard to Persons or
neighboring properties, (v)

 

10

 

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

that consist of underground or aboveground storage tanks, whether empty, filled
or partially filled with any substance or (vi) that contain, without limitation,
asbestos, polychlorinated biphenyls, urea formaldehyde foam insulation,
petroleum hydrocarbons, petroleum derived substances or wastes, crude oil,
nuclear fuel, natural gas or synthetic gas.

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

“Historical Statutory Statements” shall have the meaning given to such term in
Section 5.11(b).

“Holdings Credit Agreement” shall mean the Credit Agreement, dated as of August
23, 2006, as amended from time to time between Everest Holdings, the lenders
identified therein and Citibank, N.A. as administrative agent.

“Hybrid Securities” shall mean, at any time, the Trust Preferred Securities and
any subordinated securities, instruments or other obligations directly or
indirectly issued by Everest Group or any of its Subsidiaries or any trust or
other entity formed by Everest Group or any of its Subsidiaries that are then
accorded equity treatment by S&P.

“Increasing Lender” shall have the meaning given to such term in Section
2.20(c).

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

 

11

 

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

obligations of such Person under any Hedge Agreements, calculated as of any date
as if such agreement or arrangement were terminated as of such date, (x) all
Contingent Obligations of such Person in respect of Indebtedness of other
Persons and (xi) all indebtedness referred to in clauses (i) through (x) above
secured by any Lien on any property or asset owned or held by such Person
regardless of whether the indebtedness secured thereby shall have been assumed
by such Person or is nonrecourse to the credit of such Person.

“Indemnified Costs” shall have the meaning given to such term in Section 11.2.

“Indemnified Person” shall have the meaning given to such term in Section 11.2.

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

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

“Interest Period” shall have the meaning given to such term in Section 2.10.

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

“Issuing Lender” means Wachovia in its capacity as issuer of the Letters of
Credit, and its successors in such capacity.

“Joinder Agreement” shall mean the joinder agreement substantially in the form
of Exhibit G hereto, as the same may be amended, modified or supplemented from
time to time in accordance with the provisions thereof.

“Lender” means each Person signatory hereto as a “Lender” and each other Person
that becomes a “Lender” hereunder pursuant to Section 2.19, 2.20, 2.21 or 11.7,
and their respective successors and assigns.

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

 

12

 

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

“Letter of Credit Documents” shall mean, with respect to any Letter of Credit,
collectively, any application therefor and any other agreements, instruments,
guarantees or other documents (whether general in application or applicable only
to such Letter of Credit) governing or providing for the rights and obligations
of the parties concerned or at risk with respect to such Letter of Credit.

“Letter of Credit Exposure” shall mean, collectively, the Tranche 1 Letter of
Credit Exposure and the Tranche 2 Letter of Credit Exposure applicable to any
Lender or the Issuing Lender.

“Letter of Credit Notice” has the meaning given to such term in Section 3.3(a).

“Letters of Credit” has the meaning given to such term in Section 3.2.

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

“LIBOR Rate” shall mean, with respect to each LIBOR Loan comprising part of the
same Borrowing for any Interest Period, an interest rate per annum equal to (y)
the rate of interest (rounded upward, if necessary, to the nearest 1/16 of one
percentage point) appearing on Reuters Screen LIBOR01 (or any successor page) or
(z) if no such rate is available, the rate of interest determined by the
Administrative Agent to be the rate or the arithmetic mean of rates (rounded
upward, if necessary, to the nearest 1/16 of one percentage point) at which
Dollar deposits in immediately available funds are offered by Wachovia to
first-tier banks in the London interbank Eurodollar market, in each case under
(y) and (z) above at approximately 11:00 a.m., London time, two (2) Business
Days prior to the first day of such Interest Period for a period substantially
equal to such Interest Period and in an amount substantially equal to the amount
of Wachovia’s LIBOR Loan comprising part of such Borrowing.

“Licenses” shall have the meaning given to such term in Section 5.4(c).

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

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

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

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

 

13

 

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

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

“Material Subsidiary” shall mean each of (i) Everest Bermuda, (ii) Everest
International, (iii) at the relevant time of determination, any other Subsidiary
having (after the elimination of intercompany accounts) (y) in the case of a
non-Insurance Subsidiary, (A) assets constituting at least ten percent (10%) of
the total assets of Everest Group and its Subsidiaries on a consolidated basis,
(B) revenues for the four quarters most recently ended constituting at least ten
percent (10%) of the total revenues of Everest Group and its Subsidiaries on a
consolidated basis, or (C) Net Income for the four quarters most recently ended
constituting at least ten percent (10%) of the Consolidated Net Income of
Everest Group and its Subsidiaries, in each case determined in accordance with
GAAP as of the date of the GAAP financial statements of Everest Group and its
Subsidiaries most recently delivered under Section 6.1 prior to such time (or,
with regard to determinations at any time prior to the initial delivery of
financial statements under Section 6.1, as of the date of the most recent
financial statements referred to in Section 5.11(a)), or (z) in the case of an
Insurance Subsidiary, (A) assets constituting at least ten percent (10%) of the
aggregate assets of all of Everest Group’s Insurance Subsidiaries, or (B) gross
written premiums for the four quarters most recently ended constituting at least
ten percent (10%) of the aggregate gross written premiums (without duplication)
of all of Everest Group’s Insurance Subsidiaries, in each case determined in
accordance with SAP as of the date of the statutory financial statements most
recently delivered under Section 6.2 prior to such time (or, with regard to
determinations at any time prior to the initial delivery of financial statements
under Section 6.2, as of the date of the most recent financial statements
referred to in Section 5.11(b)) and (iv) any Subsidiary that has one of the
foregoing as a Subsidiary.

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

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

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

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

“Non-Consenting Lender” has the meaning given such term in Section 2.21(b).

“Notes” shall mean, with respect to any Tranche 1 Lender requesting the same,
the promissory note of the Borrowers in favor of such Tranche 1 Lender
evidencing the Loans made by such Tranche 1 Lender pursuant to Section 2.1, in
substantially the form of Exhibit A, together with any amendments, modifications
and supplements thereto, substitutions therefor and restatements thereof.

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

 

14

 

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

“Notice of Conversion/Continuation” shall have the meaning given to such term in
Section 2.11(b).

“Obligations” means all principal of and interest (including interest accruing
after the filing of a petition or commencement of a case by or with respect to
any Borrower seeking relief under any applicable federal and state laws
pertaining to bankruptcy, reorganization, arrangement, moratorium, readjustment
of debts, dissolution, liquidation or other debtor relief, specifically
including, without limitation, the Bankruptcy Code and any fraudulent transfer
and fraudulent conveyance laws, whether or not the claim for such interest is
allowed in such proceeding) on the Loans and Reimbursement Obligations and all
fees, expenses, indemnities and other obligations owing, due or payable at any
time by any Borrower to the Administrative Agent, any Lender, the Issuing Lender
or any other Person entitled thereto, under this Agreement or any of the other
Credit Documents, in each case whether direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, and whether existing by contract, operation of law or
otherwise.

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets
Control, and any successor thereto.

“Participant” shall have the meaning given to such term in Section 11.7(d).

“PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as
amended.

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

“Permitted Liens” shall have the meaning given such term in Section 8.3.

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

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

“Private Act” shall mean separate legislation enacted in Bermuda with the
intention that such legislation apply specifically to any Borrower, in whole or
in part.

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

“Quarterly Statement” shall mean, with respect to any Insurance Subsidiary for
any fiscal quarter, the quarterly financial statements of such Insurance
Subsidiary as required to be filed

 

15

 

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

with the Insurance Regulatory Authority of its jurisdiction of domicile,
together with all exhibits, schedules, certificates and actuarial opinions
required to be filed or delivered therewith.

“Register” shall have the meaning given to such term in Section 11.7(b).

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

“Reimbursement Obligations” shall have the meaning given to such term in Section
3.5.

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

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

“Required Lenders” means, at any time, the Lenders whose Commitments (or, after
the termination of the Commitments, outstanding Tranche 1 Credit Exposure and/or
Tranche 2 Letter of Credit Exposure) represent at least a majority of the
aggregate, at such time, of the Commitments (or, after the termination of the
Commitments, the sum of (x) the aggregate Tranche 1 Credit Exposure and (y) the
aggregate Tranche 2 Letter of Credit Exposure).

“Required Tranche 1 Lenders” means, at any time, the Tranche 1 Lenders whose
Tranche 1 Commitments (or, after the Tranche 1 Termination Date, Tranche 1
Credit Exposure) represent at least a majority of the aggregate, at such time,
of the Tranche 1 Commitments (or, after the Tranche 1 Termination Date, the
aggregate Tranche 1 Credit Exposure).

“Required Tranche 2 Lenders” means, at any time, the Tranche 2 Lenders whose
Tranche 2 Commitments (or, after the Tranche 2 Termination Date, Tranche 2
Letter of Credit Exposure) represent at least a majority of the aggregate, at
such time, of the Tranche 2 Commitments (or, after the Tranche 2 Termination
Date, the aggregate Tranche 2 Letter of Credit Exposure).

“Requirement of Law” shall mean, with respect to any Person, the charter,
articles or certificate of organization or incorporation and bylaws or other
organizational or governing documents of such Person, and any statute, law,
treaty, rule, regulation, order, decree, writ, injunction or determination of
any arbitrator or court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or

 

16

 

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

any of its property is subject or otherwise pertaining to any or all of the
transactions contemplated by this Agreement and the other Credit Documents.

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

“Restatement Effective Date” has the meaning given to such term in Section 4.1.

“Sanctioned Country” means a country subject to a sanctions program identified
on the list maintained by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/

sanctions, or as otherwise published from time to time.

“Sanctioned Person” means (i) a Person named on the list of Specially Designated
Nationals or Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/

enforcement/ofac/sdn, or as otherwise published from time to time, or
(ii) (A) an agency of the government of a Sanctioned Country, (B) an
organization controlled by a Sanctioned Country, or (C) a Person resident in a
Sanctioned Country, to the extent subject to a sanctions program administered by
OFAC.

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

“Security Documents” shall mean (i) the Amended and Restated Security Agreement,
(ii) each Account Control Agreement, (iii) each other security agreement
executed and delivered pursuant to Section 6.11 and (iv) each other document,
agreement, certificate and/or financing statement, executed, delivered, made or
filed pursuant to the terms of the documents specified in foregoing clauses (i),
(ii) and (iii).

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

“Stated Amount” means, with respect to any Letter of Credit at any time, the
aggregate amount available to be drawn thereunder at such time (regardless of
whether any conditions for drawing could then be met).

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

 

17

 

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

“Subsidiary Borrowers” shall mean (i) Everest Bermuda, (ii) Everest
International and (iii) any other Person that joins this Agreement upon the
terms and conditions set forth in Section 11.19.

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

“Tranche 1 Commitment” shall mean, with respect to any Tranche 1 Lender at any
time, the commitment of such Tranche 1 Lender to make Loans and participate in
Tranche 1 Letters of Credit in an aggregate principal amount at any time
outstanding up to the amount set forth opposite such Lender’s name on Schedule
1.1(a) under the caption “Tranche 1 Commitment”, or, if such Tranche 1 Lender
has entered into one or more Assignment and Acceptances, the amount set forth
for such Tranche 1 Lender at such time in the Register maintained by the
Administrative Agent pursuant to Section 11.7(b) as such Tranche 1 Lender’s
“Tranche 1 Commitment,” as such amount may be reduced, increased or terminated
at or prior to such time pursuant to the terms hereof.

“Tranche 1 Credit Exposure” means, with respect to any Tranche 1 Lender at any
time, the sum of (i) the aggregate principal amount of all Loans made by such
Tranche 1 Lender that are outstanding at such time and (ii) such Tranche 1
Lender’s Tranche 1 Letter of Credit Exposure at such time.

“Tranche 1 Lender” means any Lender having a Tranche 1 Commitment (or, after the
Tranche 1 Commitments have terminated, any Lender holding outstanding Loans or
Tranche 1 Letter of Credit Exposure).

“Tranche 1 Letters of Credit” has the meaning given to such term in Section 3.1.

“Tranche 1 Letter of Credit Exposure” means, with respect to any Tranche 1
Lender at any time, such Tranche 1 Lender’s ratable share (based on the
proportion that its Tranche 1 Commitment bears to the aggregate Tranche 1
Commitments at such time) of the sum of (i) the aggregate Stated Amount of all
Tranche 1 Letters of Credit outstanding at such time and (ii) the aggregate
amount of all Tranche 1 Reimbursement Obligations outstanding at such time.

“Tranche 1 Maturity Date” shall mean the fifth anniversary of the Restatement
Effective Date, or such later date if extended pursuant to Section 2.21.

“Tranche 1 Reimbursement Obligations” shall mean all Reimbursement Obligations
owing to any Tranche 1 Lender or the Issuing Lender in respect of Tranche 1
Letters of Credit.

“Tranche 1 Termination Date” shall mean the Tranche 1 Maturity Date or such
earlier date of termination of the Tranche 1 Commitments pursuant to Section 2.5
or Section 9.2.

“Tranche 2 Commitment” shall mean, with respect to any Tranche 2 Lender at any
time, the commitment of such Tranche 2 Lender to participate in Tranche 2
Letters of Credit in an aggregate principal amount at any time outstanding up to
the amount set forth opposite such

 

18

 

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

Lender’s name on Schedule 1.1(a) under the caption “Tranche 2 Commitment”, or,
if such Tranche 2 Lender has entered into one or more Assignment and
Acceptances, the amount set forth for such Tranche 2 Lender at such time in the
Register maintained by the Administrative Agent pursuant to Section 11.7(b) as
such Tranche 2 Lender’s “Tranche 2 Commitment,” as such amount may be reduced,
increased or terminated at or prior to such time pursuant to the terms hereof.

“Tranche 2 Lender” means any Lender having a Tranche 2 Commitment (or, after the
Tranche 2 Commitments have terminated, any Lender holding outstanding Tranche 2
Letter of Credit Exposure).

“Tranche 2 Letters of Credit” has the meaning given to such term in Section 3.2.

“Tranche 2 Letter of Credit Exposure” means, with respect to any Tranche 2
Lender at any time, such Tranche 2 Lender’s ratable share (based on the
proportion that its Tranche 2 Commitment bears to the aggregate Tranche 2
Commitments at such time) of the sum of (i) the aggregate Stated Amount of all
Tranche 2 Letters of Credit outstanding at such time and (ii) the aggregate
amount of all Tranche 2 Reimbursement Obligations outstanding at such time.

“Tranche 2 Maturity Date” shall mean the fifth anniversary of the Restatement
Effective Date, or such later date if extended pursuant to Section 2.21.

“Tranche 2 Obligations” shall mean all Obligations owing to any Tranche 2 Lender
or the Issuing Lender in respect of Tranche 2 Letters of Credit.

“Tranche 2 Reimbursement Obligations” shall mean all Reimbursement Obligations
owing to any Tranche 2 Lender or the Issuing Lender in respect of Tranche 2
Letters of Credit.

“Tranche 2 Termination Date” shall mean the Tranche 2 Maturity Date or such
earlier date of termination of the Tranche 2 Commitments pursuant to Section 2.5
or Section 9.2.

“Trust Preferred Securities” shall mean the 7.85% Trust Preferred Securities
issued by Everest Re Capital Trust, the 6.20% Trust Preferred Securities issued
by Everest Re Capital Trust II and any other preferred securities offered by a
special purpose business trust of which Everest Group or any of its Subsidiaries
is the grantor, the proceeds of which are or have been used principally to
purchase subordinated debentures issued by Everest Group or any of its
Subsidiaries.

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

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

“Unutilized Tranche 1 Commitment” shall mean, with respect to any Tranche 1
Lender at any time, such Lender’s Tranche 1 Commitment at such time less the sum
of (i) the aggregate

 

19

 

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

principal amount of all Loans made by such Tranche 1 Lender that are outstanding
at such time and (ii) such Tranche 1 Lender’s Tranche 1 Letter of Credit
Exposure at such time.

“Unutilized Tranche 2 Commitment” shall mean, with respect to any Tranche 2
Lender at any time, such Lender’s Tranche 2 Commitment at such time less such
Tranche 2 Lender’s Tranche 2 Letter of Credit Exposure at such time.

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

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

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

ARTICLE II

AMOUNT AND TERMS OF THE CREDIT

2.1       Commitments. Each Tranche 1 Lender severally agrees, subject to and on
the terms and conditions of this Agreement, to make loans (each, a “Loan,” and
collectively, the “Loans”) to one or more of the Borrowers, from time to time on
any Business Day during the period from and including the Restatement Effective
Date to but not including the Tranche 1 Termination Date, in an aggregate
principal amount at any time outstanding not greater than its Tranche 1
Commitment at such time; provided that no Borrowing of Loans shall be made if,
immediately after giving effect thereto (and to any concurrent repayment of
Tranche 1 Reimbursement Obligations which are repaid with the proceeds of Loans
made pursuant to such Borrowing), (y) the Tranche 1 Credit Exposure of any
Tranche 1 Lender would exceed its Tranche 1 Commitment at such time or (z) the
aggregate Tranche 1 Credit Exposure would exceed the aggregate Tranche 1
Commitment at such time. Subject to and on the terms and conditions of this
Agreement, the Borrowers may borrow, repay and reborrow Loans.

 

2.2

Borrowings.

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

 

20

 

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

Loan), provided that (i) all Loans comprising the same Borrowing shall, unless
otherwise specifically provided herein, be of the same Type, and (ii) no LIBOR
Loan may be borrowed at any time prior to the third (3rd) Business Day after the
Restatement Effective Date.

(b)       In order to make a Borrowing (other than Borrowings involving
continuations or conversions of outstanding Loans, which shall be made pursuant
to Section 2.11), each Borrower will give the Administrative Agent written
notice not later than 11:00 a.m., Charlotte time, three (3) Business Days prior
to each Borrowing to be comprised of LIBOR Loans and not later than 10:00 a.m.,
Charlotte time, on the same Business Day of such Borrowing of Base Rate Loans;
provided, however, that requests for the Borrowing of any Loans to be made on
the Restatement Effective Date may, at the discretion of the Administrative
Agent, be given with less advance notice than the times specified hereinabove.
Each such notice (each, a “Notice of Borrowing”) shall be irrevocable, shall be
given in the form of Exhibit B-1 and shall specify (1) the aggregate principal
amount and initial Type of the Loans to be made pursuant to such Borrowing, (2)
in the case of a Borrowing of LIBOR Loans, the initial Interest Period to be
applicable thereto, and (3) the requested Borrowing Date, which shall be a
Business Day. Upon its receipt of a Notice of Borrowing, the Administrative
Agent will promptly notify each Tranche 1 Lender of the proposed Borrowing.
Notwithstanding anything to the contrary contained herein:

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

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

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

(c)       Not later than 1:00 p.m., Charlotte time, on the requested Borrowing
Date, each Tranche 1 Lender will make available to the Administrative Agent at
its office referred to in Section 11.5 (or at such other location as the
Administrative Agent may designate) an amount, in Dollars and in immediately
available funds, equal to the amount of the Loan to be made by such Tranche 1
Lender. To the extent the Tranche 1 Lenders have made such amounts available to
the Administrative Agent as provided hereinabove, the Administrative Agent will
make the aggregate of such amounts available to the applicable Borrower in
accordance with Section 2.3(a) and in like funds as received by the
Administrative Agent.

 

2.3

Disbursements; Funding Reliance; Domicile of Loans.

(a)       Each Borrower hereby authorizes the Administrative Agent to disburse
the proceeds of each Borrowing it makes in accordance with the terms of any
written instructions from any Authorized Officer of such Borrower; provided that
the Administrative Agent shall not be obligated under any circumstances to
forward amounts to any account not listed in an Account Designation Letter. Each
Borrower may at any time deliver to the Administrative

 

21

 

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

Agent an Account Designation Letter listing any additional accounts or deleting
any accounts listed in a previous Account Designation Letter.

(b)       Unless the Administrative Agent has received, prior to 1:00 p.m.,
Charlotte time, on the relevant Borrowing Date, written notice from a Tranche 1
Lender that such Tranche 1 Lender will not make available to the Administrative
Agent such Tranche 1 Lender’s share of such Borrowing, the Administrative Agent
may assume that such Tranche 1 Lender has made such share available to the
Administrative Agent in immediately available funds on such Borrowing Date in
accordance with the applicable provisions of Section 2.2, and the Administrative
Agent may, in reliance upon such assumption, but shall not be obligated to, make
a corresponding amount available to the applicable Borrower on such Borrowing
Date. If and to the extent that such Tranche 1 Lender shall not have made its
share available to the Administrative Agent, and the Administrative Agent shall
have made such corresponding amount available to the applicable Borrower, such
Tranche 1 Lender, on the one hand, and such Borrower, on the other, severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount, together with interest thereon for each day from and including the date
such amount is made available to such Borrower to but excluding the date such
amount is repaid to the Administrative Agent, at (i) in the case of such Tranche
1 Lender, the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation and (ii) in the case of such Borrower, at the rate of interest
applicable at such time to the Type of Loans comprising such Borrowing, as
determined under the provisions of Section 2.8. If such Tranche 1 Lender shall
repay to the Administrative Agent such corresponding amount, such amount shall
constitute such Tranche 1 Lender’s Loan included in such Borrowing. The failure
of any Tranche 1 Lender to make any Loan required to be made by it as part of
any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan as part of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be made by
such other Lender as part of any Borrowing. Any payment by the applicable
Borrower shall be without prejudice to any claim such Borrower may have against
a Tranche 1 Lender that shall have failed to make such payment to the
Administrative Agent.

(c)       Each Tranche 1 Lender may, at its option, make and maintain any Loan
at, to or for the account of any of its Lending Offices, provided that any
exercise of such option shall not affect the obligation of the applicable
Borrower to repay such Loan to or for the account of such Tranche 1 Lender in
accordance with the terms of this Agreement.

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

 

2.4

Notes.

(a)       Each Tranche 1 Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of each Borrower to
the applicable Lending Office of such Tranche 1 Lender resulting from each Loan
made by such Lending Office of such Tranche 1 Lender from time to time,
including the amounts of principal and interest payable and paid to such Lending
Office of such Tranche 1 Lender from time to time under this Agreement.

 

22

 

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

(b)       The Administrative Agent shall maintain the Register pursuant to
Section 11.7(b), and a subaccount for each Tranche 1 Lender, in which Register
and subaccounts (taken together) shall be recorded (i) the amount of each such
Loan, the Type of each such Loan and the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become due
and payable from each Borrower to each Tranche 1 Lender hereunder in respect of
each such Loan and (iii) the amount of any sum received by the Administrative
Agent hereunder from each Borrower in respect of each such Loan and each Tranche
1 Lender’s share thereof.

(c)       The entries made in the accounts, Register and subaccounts maintained
pursuant to Section 2.4(b) (and, if consistent with the entries of the
Administrative Agent, Section 2.4(a)) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the applicable Borrower therein recorded; provided, however, that
the failure of any Tranche 1 Lender or the Administrative Agent to maintain such
account, such Register or such subaccount, as applicable, or any error therein,
shall not in any manner affect the obligation of each Borrower to repay (with
applicable interest) the Loans made to such Borrower by such Tranche 1 Lender in
accordance with the terms of this Agreement.

(d)       The Loans made by each Tranche 1 Lender shall, if requested by the
applicable Tranche 1 Lender (which request shall be made to the Administrative
Agent), be evidenced by a Note appropriately completed in substantially the form
of Exhibit A, executed by each Borrower and payable to the order of such Tranche
1 Lender. Each Note shall be entitled to all of the benefits of this Agreement
and the other Credit Documents and shall be subject to the provisions hereof and
thereof.

 

2.5

Termination and Reduction of Commitments.

(a)       Unless sooner terminated pursuant to any other provision of this
Section 2.5 or Section 9.2, the Tranche 1 Commitments shall be automatically and
permanently terminated on the Tranche 1 Termination Date and the Tranche 2
Commitments shall be automatically and permanently terminated on the Tranche 2
Termination Date.

(b)       At any time and from time to time after the date hereof, upon not less
than three (3) Business Days’ prior written notice to the Administrative Agent,
the Borrowers may terminate in whole or reduce in part the aggregate Unutilized
Tranche 1 Commitments; provided that any such partial reduction shall be in an
aggregate amount of not less than $10,000,000 or, if greater, an integral
multiple of $5,000,000 in excess thereof, and applied ratably among the Tranche
1 Lenders according to their respective Tranche 1 Commitments. The amount of any
termination or reduction made under this Section 2.5(b) may not thereafter be
reinstated.

(c)       At any time and from time to time after the date hereof, upon not less
than three (3) Business Days’ prior written notice to the Administrative Agent,
the Borrowers may terminate in whole or reduce in part the aggregate Unutilized
Tranche 2 Commitments; provided that any such partial reduction shall be in an
aggregate amount of not less than $10,000,000 or, if greater, an integral
multiple of $5,000,000 in excess thereof, and applied ratably among the Tranche
2 Lenders according to their respective Tranche 2 Commitments. The amount of any
termination or reduction made under this Section 2.5(c) may not thereafter be
reinstated.

 

23

 

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

 

2.6

Mandatory Payments and Prepayments.

(a)       Except to the extent due or paid sooner pursuant to the provisions of
this Agreement, the aggregate outstanding principal of the Loans shall be due
and payable in full on the Tranche 1 Maturity Date.

(b)       In the event that, at any time, the aggregate Tranche 1 Credit
Exposure shall exceed the aggregate Tranche 1 Commitments at such time (after
giving effect to any concurrent termination or reduction thereof), the Borrowers
will immediately prepay the outstanding principal amount of the Loans in the
amount of such excess; provided that, to the extent such excess amount is
greater than the aggregate principal amount of Loans outstanding immediately
prior to the application of such prepayment, the amount so prepaid shall be
retained by the Administrative Agent and held in the Cash Collateral Account as
cover for Tranche 1 Letter of Credit Exposure, as more particularly described in
Section 3.8, and thereupon such cash shall be deemed to reduce the Tranche 1
Letter of Credit Exposure by an equivalent amount.

(c)       In the event that, at any time, the aggregate Tranche 2 Letter of
Credit Exposure at such time shall exceed the lesser of (y) the aggregate
Tranche 2 Commitments at such time (after giving effect to any concurrent
termination or reduction thereof) and (z) the aggregate Collateral Value at such
time, the Borrowers will, to the extent they have not deposited additional
Collateral in a Custodial Account having a Collateral Value at least equal to
such excess within the three (3) Business Day period specified in Section 8.12
and subject to the other terms of this Agreement, immediately pay to the
Administrative Agent the amount of such excess in Dollars and in immediately
available funds to be retained by the Administrative Agent and held in the Cash
Collateral Account as cover for Tranche 2 Letter of Credit Exposure, as more
particularly described in Section 3.8, and thereupon such funds shall be deemed
to reduce the aggregate Tranche 2 Letter of Credit Exposure by an equivalent
amount.

(d)       In the event that, at any time, the aggregate Tranche 2 Letter of
Credit Exposure pertaining to any Borrower shall exceed the Collateral Value in
the Custodial Account of such Borrower, such Borrower will, to the extent it has
not deposited additional Collateral in its Custodial Account having a Collateral
Value at least equal to such excess within the three (3) Business Day period
specified in Section 8.12 and subject to the other terms of this Agreement,
immediately pay to the Administrative Agent the amount of such excess in Dollars
and in immediately available funds to be retained by the Administrative Agent
and held in the Cash Collateral Account as cover for the Tranche 2 Letter of
Credit Exposure pertaining to it, as more particularly described in Section 3.8,
and thereupon such funds shall be deemed to reduce the Tranche 2 Letter of
Credit Exposure pertaining to such Borrower by an equivalent amount.

 

2.7

Voluntary Prepayments.

(a)       At any time and from time to time, the Borrowers shall have the right
to prepay the Loans, in whole or in part, together with accrued interest to the
date of prepayment, without premium or penalty (except as provided in clause
(iii) below), upon written notice given to the Administrative Agent not later
than 11:00 a.m., Charlotte time, three (3) Business Days prior to each intended
prepayment of LIBOR Loans and one (1) Business Day prior to each intended
prepayment of Base Rate Loans; provided that (i) each partial prepayment shall
be in an

 

24

 

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

aggregate principal amount of not less than $1,000,000 or, if greater, an
integral multiple of $500,000 in excess thereof, (ii) no partial prepayment of
LIBOR Loans made pursuant to any single Borrowing shall reduce the aggregate
outstanding principal amount of the remaining LIBOR Loans under such Borrowing
to less than $3,000,000 or to any greater amount not an integral multiple of
$1,000,000 in excess thereof, and (iii) unless made together with all amounts
required under Section 2.18 to be paid as a consequence of such prepayment, a
prepayment of a LIBOR Loan may be made only on the last day of the Interest
Period applicable thereto. Each such notice shall specify the proposed date of
such prepayment and the aggregate principal amount and Type of the Loans to be
prepaid (and, in the case of LIBOR Loans, the Interest Period of the Borrowing
pursuant to which made), and shall be irrevocable and shall bind the Borrowers
to make such prepayment on the terms specified therein. Loans prepaid pursuant
to this Section 2.7(a) may be reborrowed, subject to the terms and conditions of
this Agreement. In the event the Administrative Agent receives a notice of
prepayment under this Section, the Administrative Agent will give prompt notice
thereof to the Tranche 1 Lenders; provided that if such notice has also been
furnished to the Tranche 1 Lenders, the Administrative Agent shall have no
obligation to notify the Tranche 1 Lenders with respect thereto.

(b)       Each payment or prepayment of LIBOR Loans made pursuant to the
provisions of this Section 2.7 on a day other than the last day of the Interest
Period applicable thereto shall be made together with all amounts required under
Section 2.18 to be paid as a consequence thereof.

(c)       Each prepayment of the Loans made pursuant to this Section 2.7 shall
be applied ratably among the Tranche 1 Lenders holding the Loans being prepaid,
in proportion to the principal amount held by each.

 

2.8

Interest.

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

(b)       Notwithstanding the foregoing, if any principal of any Loan payable by
the Borrowers hereunder is not paid when due (whether at maturity, pursuant to
acceleration or otherwise), all outstanding principal amounts of the Loans shall
bear interest, after as well as before judgment, at a rate per annum equal to
the interest rate applicable from time to time thereafter to such Loans (whether
the Base Rate or the Adjusted LIBOR Rate) plus 2%. If any interest on any Loan
or any fee or other amount payable by the Borrowers hereunder or under any other
Credit Document is not paid when due (whether at maturity, pursuant to
acceleration or otherwise), such overdue amount, to the greatest extent
permitted by law, shall bear interest, after as well as before judgment, at a
rate per annum equal to the Base Rate plus 2%. To the greatest extent permitted
by law, interest shall continue to accrue after the filing by or against the
Borrowers of any petition seeking any relief in bankruptcy or under any law
pertaining to insolvency or debtor relief.

 

25

 

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

 

(c)

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

(i)        in respect of each Base Rate Loan (including any Base Rate Loan or
portion thereof paid or prepaid pursuant to the provisions of Section 2.6 or
Section 2.7, except as provided hereinbelow), in arrears on the last Business
Day of each calendar quarter, beginning with the first such day to occur after
the Restatement Effective Date; provided, that in the event the Loans are repaid
or prepaid in full and the Commitments have been terminated, then accrued
interest in respect of all Base Rate Loans shall be payable together with such
repayment or prepayment on the date thereof;

(ii)       in respect of each LIBOR Loan (including any LIBOR Loan or portion
thereof paid or prepaid pursuant to the provisions of Section 2.6 or Section
2.7, except as provided hereinbelow), in arrears (y) on the last Business Day of
the Interest Period applicable thereto (subject to the provisions of
Section 2.10(iv)) and (z) in addition, in the case of a LIBOR Loan with an
Interest Period having a duration of six months or longer, on each date on which
interest would have been payable under clause (y) above had successive Interest
Periods of three months’ duration been applicable to such LIBOR Loan; provided,
that in the event all LIBOR Loans made pursuant to a single Borrowing are repaid
or prepaid in full, then accrued interest in respect of such LIBOR Loans shall
be payable together with such repayment or prepayment on the date thereof; and

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

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

(e)       The Administrative Agent shall promptly notify the applicable Borrower
and the Tranche 1 Lenders upon determining the interest rate for each Borrowing
of LIBOR Loans after its receipt of the relevant Notice of Borrowing or Notice
of Conversion/Continuation, and upon each change in the Base Rate; provided,
however, that the failure of the Administrative Agent to provide the applicable
Borrower or the Tranche 1 Lenders with any such notice shall neither affect any
obligations of such Borrower or the Tranche 1 Lenders hereunder nor result in
any liability on the part of the Administrative Agent to any Borrower or any
Tranche 1 Lender. Each

 

26

 

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

such determination shall, absent demonstrable error, be conclusive and binding
on all parties hereto.

 

2.9

Fees. The Borrowers agree to pay:

(a)       To the Arranger and Wachovia, for their own respective accounts, on
the Restatement Effective Date, the fees required under the Fee Letter to be
paid to them on the Restatement Effective Date, in the amounts due and payable
as required by the terms thereof;

(b)       To the Administrative Agent, for the account of each Tranche 1 Lender,
a commitment fee for each calendar quarter (or portion thereof) at a per annum
rate equal to the Applicable Percentage in effect for such fee from time to time
during such quarter, on such Tranche 1 Lender’s ratable share (based on the
proportion that its Tranche 1 Commitment bears to the aggregate Tranche 1
Commitments) of the average daily aggregate Unutilized Tranche 1 Commitments,
payable in arrears (i) on the last Business Day of each calendar quarter,
beginning with the first such day to occur after the Restatement Effective Date,
and (ii) on the Tranche 1 Termination Date;

(c)       To the Administrative Agent, for the account of each Tranche 1 Lender,
a utilization fee payable at any time the aggregate principal amount of Loans
outstanding is greater than 50% of the aggregate Tranche 1 Commitments (as in
effect from time to time) computed at a per annum rate equal to the Applicable
Percentage in effect for such fee from time to time on such Tranche 1 Lender’s
ratable share (based on the proportion that its Tranche 1 Commitment bears to
the aggregate Tranche 1 Commitments) of the aggregate amount of Loans then
outstanding for the period from and including the Restatement Effective Date to
but not including the Tranche 1 Maturity Date. Accrued utilization fees shall be
payable in arrears (i) on the last Business Day of each calendar quarter and
(ii) on the Tranche 1 Maturity Date;

(d)       To the Administrative Agent, for the account of each Tranche 1 Lender,
a letter of credit fee for each calendar quarter (or portion thereof) in respect
of all Tranche 1 Letters of Credit outstanding during such quarter, at a per
annum rate equal to the Applicable Percentage in effect for such fee from time
to time during such quarter, on such Tranche 1 Lender’s ratable share (based on
the proportion that its Tranche 1 Commitment bears to the aggregate Tranche 1
Commitments) of the daily average aggregate Stated Amount of such Tranche 1
Letters of Credit, payable in arrears (i) on the last Business Day of each
calendar quarter, beginning with the first such day to occur after the
Restatement Effective Date, and (ii) on the Final Maturity Date;

(e)       To the Issuing Lender, for its own account, a fronting fee for each
calendar quarter (or portion thereof) in respect of all Tranche 1 Letters of
Credit outstanding during such quarter, at the per annum rate set forth in the
Fee Letter on the daily average aggregate Stated Amount of such Tranche 1
Letters of Credit, payable in arrears (i) on the last Business Day of each
calendar quarter, beginning with the first such day to occur after the
Restatement Effective Date, and (ii) on the Final Maturity Date;

(f)        To the Administrative Agent, for the account of each Tranche 2
Lender, a commitment fee for each calendar quarter (or portion thereof) at a per
annum rate of 0.06% on

 

27

 

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

such Lender’s ratable share (based on the proportion that its Tranche 2
Commitment bears to the aggregate Tranche 2 Commitments) of the average daily
aggregate Unutilized Tranche 2 Commitments, payable in arrears (i) on the last
Business Day of each calendar quarter, beginning with the first such day to
occur after the Restatement Effective Date, and (ii) on the Tranche 2
Termination Date;

(g)       To the Administrative Agent, for the account of each Tranche 2 Lender,
a letter of credit fee for each calendar quarter (or portion thereof) in respect
of all Tranche 2 Letters of Credit outstanding during such quarter, at a per
annum rate of 0.225% on such Tranche 2 Lender’s ratable share (based on the
proportion that its Tranche 2 Commitment bears to the aggregate Tranche 2
Commitments) of the daily average aggregate Stated Amount of such Tranche 2
Letters of Credit, payable in arrears (i) on the last Business Day of each
calendar quarter, beginning with the first such day to occur after the
Restatement Effective Date, and (ii) on the Final Maturity Date;

(h)       To the Issuing Lender, for its own account, a fronting fee for each
calendar quarter (or portion thereof) in respect of all Tranche 2 Letters of
Credit outstanding during such quarter, at the per annum rate set forth in the
Fee Letter on the daily average aggregate Stated Amount of such Tranche 2
Letters of Credit, payable in arrears (i) on the last Business Day of each
calendar quarter, beginning with the first such day to occur after the
Restatement Effective Date, and (ii) on the Final Maturity Date;

(i)        To the Issuing Lender, for its own account, such commissions,
transfer fees and other fees and charges incurred in connection with the
issuance and administration of each Letter of Credit as are customarily charged
from time to time by the Issuing Lender for the performance of such services in
connection with similar letters of credit, or as may be otherwise agreed to by
the Issuing Lender.

(j)        To the Administrative Agent, for its own account, the annual
administrative fee described in the Fee Letter, on the terms, in the amount and
at the times set forth therein.

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

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

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

 

28

 

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

(iii)      LIBOR Loans may not be outstanding under more than ten (10) separate
Interest Periods at any one time (for which purpose Interest Periods shall be
deemed to be separate even if they are coterminous);

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

(v)       no Borrower may select any Interest Period that expires after the
Tranche 1 Maturity Date;

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

(vii)     no Borrower may select any Interest Period (and consequently, no LIBOR
Loans shall be made) if a Default or Event of Default shall have occurred and be
continuing at the time of such Notice of Borrowing or Notice of
Conversion/Continuation with respect to any Borrowing.

 

2.11

Conversions and Continuations.

(a)       Each Borrower shall have the right, on any Business Day, to elect (i)
to convert all or a portion of the outstanding principal amount of any Base Rate
Loans into LIBOR Loans, or to convert any LIBOR Loans the Interest Periods for
which end on the same day into Base Rate Loans, or (ii) upon the expiration of
any Interest Period, to continue all or a portion of the outstanding principal
amount of any LIBOR Loans the Interest Periods for which end on the same day for
an additional Interest Period; provided that (x) any such conversion of LIBOR
Loans into Base Rate Loans shall involve an aggregate principal amount of not
less than $1,000,000 or, if greater, an integral multiple of $500,000 in excess
thereof; any such conversion of Base Rate Loans of the same Borrowing into, or
continuation of LIBOR Loans shall involve an aggregate principal amount of not
less than $3,000,000 or, if greater, an integral multiple of $1,000,000 in
excess thereof; and no partial conversion of LIBOR Loans of the same Borrowing
shall reduce the outstanding principal amount of such LIBOR Loans to less than
$3,000,000 or to any greater amount not an integral multiple of $1,000,000 in
excess thereof, (y) except as otherwise provided in Section 2.16(d), LIBOR Loans
may be converted into Base Rate Loans only on the last day of the Interest
Period applicable thereto (and, in any event, if a LIBOR Loan is converted into
a Base Rate Loan on any day other than the last day of the Interest Period
applicable thereto, the respective Borrower will pay, upon such conversion, all
amounts required under Section 2.18 to be paid as a consequence thereof) and (z)
no conversion of Base Rate Loans into LIBOR Loans or continuation of LIBOR Loans
shall be permitted during the continuance of a Default or Event of Default.

(b)       A Borrower shall make each such election by giving the Administrative
Agent written notice not later than 11:00 a.m., Charlotte time, three (3)
Business Days prior to the

 

29

 

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

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

 

2.12

Method of Payments; Computations.

(a)       All payments by the Borrowers hereunder shall be made without setoff,
counterclaim or other defense, in Dollars and in immediately available funds to
the Administrative Agent, for the account of the Lenders entitled to such
payment (except as otherwise expressly provided herein as to payments required
to be made directly to the Issuing Lender or the Lenders) at its office referred
to in Section 11.5, prior to 12:00 noon, Charlotte time, on the date payment is
due. Any payment made as required hereinabove, but after 12:00 noon, Charlotte
time, shall be deemed to have been made on the next succeeding Business Day. If
any payment falls due on a day that is not a Business Day, then such due date
shall be extended to the next succeeding Business Day (except that in the case
of LIBOR Loans to which the provisions of Section 2.10(iv) are applicable, such
due date shall be the next preceding Business Day), and such extension of time
shall then be included in the computation of payment of interest, fees or other
applicable amounts.

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

 

30

 

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

such Lender, on demand, its ratable share of such payment with interest thereon
at the Federal Funds Rate for each day from the date such amount was required to
be disbursed by the Administrative Agent until the date repaid to such Lender.
The Administrative Agent will distribute to the Issuing Lender like amounts
relating to payments made to the Administrative Agent for the account of the
Issuing Lender in the same manner, and subject to the same terms and conditions,
as set forth hereinabove with respect to distributions of amounts to the
Lenders.

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

(d)       With respect to each payment hereunder, except as specifically
provided otherwise herein or in any of the other Credit Documents, the
applicable Borrower may designate by written notice to the Administrative Agent
prior to or concurrently with such payment the specific Loans or other
Obligations that are to be paid, repaid or prepaid; provided that unless made
together with all amounts required under Section 2.18 to be paid as a
consequence thereof, a prepayment of a LIBOR Loan may be made only on the last
day of the Interest Period applicable thereto. In the absence of any such
designation by such Borrower, or if an Event of Default has occurred and is
continuing, the Administrative Agent shall make such designation in its sole
discretion subject to the foregoing and to the other provisions of this
Agreement.

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

 

2.13

Recovery of Payments.

(a)       The Borrowers agree that to the extent any Borrower makes a payment or
payments to or for the account of the Administrative Agent, any Lender or the
Issuing Lender, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party under any bankruptcy,
insolvency or similar state or federal law, common law or equitable

 

31

 

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

cause, then, to the extent of such payment or repayment, the Obligation intended
to be satisfied shall be revived and continued in full force and effect as if
such payment had not been received.

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

2.14     Use of Proceeds. The proceeds of the Loans shall be used (i) to pay or
reimburse reasonable transaction fees and expenses in connection with the
closing of the transactions contemplated hereby, and (ii) to provide for the
working capital, liquidity needs and general corporate requirements of the
Borrowers and their Subsidiaries, including, without limitation, repurchases of
the Capital Stock of Everest Group. The Letters of Credit shall be used
primarily to support insurance and reinsurance liabilities of any Borrower.

 

2.15

Pro Rata Treatment.

(a)       All fundings, continuations and conversions of Loans shall be made by
the Tranche 1 Lenders pro rata on the basis of their respective Tranche 1
Commitments (in the case of the initial funding of Loans pursuant to
Section 2.2) or on the basis of their respective outstanding Loans (in the case
of continuations and conversions of Loans pursuant to Section 2.11, and
additionally in all cases in the event the Tranche 1 Commitments have expired or
have been terminated), as the case may be from time to time.

(b)       All payments from or on behalf of each Borrower on account of any
Obligations of such Borrower shall be apportioned ratably among the Lenders
based upon their respective share, if any, of the Obligations with respect to
which such payment was received.

(c)       Each Lender agrees that if it shall receive any amount hereunder
(whether by voluntary payment, realization upon security, exercise of the right
of setoff or banker’s lien, counterclaim or cross action, or otherwise, other
than pursuant to Section 2.16, 2.17, 2.18, 2.19, 2.21 or 11.7) applicable to the
payment of any of the Obligations that exceeds its ratable share (according to
the proportion of (i) the amount of such Obligations due and payable to such
Lender at such time to (ii) the aggregate amount of such Obligations due and
payable to all Lenders at such time) of payments on account of such Obligations
then or therewith obtained by all the Lenders to which such payments are
required to have been made, such Lender shall forthwith purchase from the other
Lenders such participations in such Obligations as shall be necessary to cause
such purchasing Lender to share the excess payment or other recovery ratably
with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each such other Lender shall be rescinded and each such other Lender shall repay
to the purchasing Lender the purchase price to the extent of such recovery,
together with an amount equal to such other Lender’s ratable

 

32

 

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

share (according to the proportion of (i) the amount of such other Lender’s
required repayment to (ii) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by the purchasing Lender
in respect of the total amount so recovered. The Borrowers agree that any Lender
so purchasing a participation from another Lender pursuant to the provisions of
this subsection (c) may, to the fullest extent permitted by law, exercise any
and all rights of payment (including, without limitation, setoff, banker’s lien
or counterclaim) with respect to such participation as fully as if such
participant were a direct creditor of the Borrowers in the amount of such
participation. If under any applicable bankruptcy, insolvency or similar law,
any Lender receives a secured claim in lieu of a setoff to which this subsection
(c) applies, such Lender shall, to the extent practicable, exercise its rights
in respect of such secured claim in a manner consistent with the rights of the
Lenders entitled under this subsection (c) to share in the benefits of any
recovery on such secured claim.

 

2.16

Increased Costs; Change in Circumstances; Illegality; etc.

(a)       If the introduction of or any change in any applicable law, rule or
regulation or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, in each case after the date hereof, or compliance by any Lender or the
Issuing Lender with any guideline or request from any such Governmental
Authority (whether or not having the force of law) given or made after the date
hereof, shall (i) subject such Lender to any tax or other charge, or change the
basis of taxation of payments to such Lender, in respect of any of its LIBOR
Loans, any Letter of Credit, any participation in a Letter of Credit or any
other amounts payable hereunder or its obligation to make, fund or maintain any
LIBOR Loans (other than any change in the rate or basis of tax on the overall
net income of such Lender or its applicable Lending Office), (ii) impose, modify
or deem applicable any reserve, special deposit or similar requirement (but
excluding reserve requirements contemplated by Section 2.16(e)) against assets
of, deposits with or for the account of, or credit extended or participated in
by, such Lender or Issuing Lender, or (iii) impose on such Lender or the Issuing
Lender or the London interbank market any other condition, cost or expense
affecting this Agreement or LIBOR Loans made by such Lender or any Letter of
Credit or participation therein, and the result of any of the foregoing shall be
to increase the cost to such Lender of making or maintaining any LIBOR Loan (or
of maintaining its obligation to make any such Loan), or to increase the cost to
such Lender or the Issuing Lender of participating in, issuing or maintaining
any Letter of Credit (or of maintaining its obligation to participate in or to
issue any Letter of Credit), or to reduce the amount of any sum received or
receivable by such Lender or the Issuing Lender hereunder (whether of principal,
interest or any other amount), then, the Borrowers will, promptly upon demand,
pay to such Lender or Issuing Lender, as the case may be, such additional
amounts as shall compensate such Lender or the Issuing Lender for such increase
in costs or reduction in return; provided that the Borrowers shall not be
obligated to pay any such amount or amounts (i) unless such Lender or Issuing
Lender shall have first notified the Borrowers in writing that it intends to
seek compensation pursuant to this Section 2.16(a) and (ii) which are
attributable to any period of time occurring more than 90 days prior to the date
of receipt by the Borrowers of the notice provided for in the preceding clause
(i); provided further that if the event or circumstance requiring such
compensation is retroactive, then the 90-day period referred to above shall be
extended to include the period of retroactive effect thereof.

 

33

 

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

(b)       If any Lender or Issuing Lender shall have reasonably determined that
the introduction of or any change in any applicable law, rule or regulation
regarding capital adequacy or in the interpretation or administration thereof by
any Governmental Authority charged with the interpretation or administration
thereof, in each case after the date hereof, or compliance by such Lender or the
Issuing Lender with any guideline or request from any such Governmental
Authority (whether or not having the force of law) given or made after the date
hereof, has or would have the effect, as a consequence of such Lender’s
Commitment or the Loans made by, or participations in Letters of Credit held by,
such Lender or such Issuing Lender or such Lender’s or the Issuing Lender’s
holding company, of reducing the rate of return on the capital of such Lender or
the Issuing Lender or their respective holding companies to a level below that
which such Lender, Issuing Lender or holding company could have achieved but for
such introduction, change or compliance (taking into account such Lender’s,
Issuing Lender’s or holding company’s policies with respect to capital
adequacy), the Borrowers will, promptly upon demand therefor by such Lender or
Issuing Lender therefor, pay to such Lender or Issuing Lender such additional
amounts as will compensate such Lender, Issuing Lender or holding company for
such reduction in return; provided that the Borrowers shall not be obligated to
pay any such amount or amounts (i) unless such Lender or Issuing Lender shall
have first notified the Borrowers in writing that it intends to seek
compensation pursuant to this Section 2.16(b) and (ii) which are attributable to
any period of time occurring more than 90 days prior to the date of receipt by
the Borrowers of the notice provided for in the preceding clause (i); provided
further that if the event or circumstance requiring such compensation is
retroactive, then the 90-day period referred to above shall be extended to
include the period of retroactive effect thereof.

(c)       If, on or prior to the first day of any Interest Period, (y) the
Administrative Agent shall have determined that adequate and reasonable means do
not exist for ascertaining the applicable LIBOR Rate for such Interest Period or
(z) the Administrative Agent shall have received written notice from the
Required Tranche 1 Lenders of their determination that the rate of interest
referred to in the definition of “LIBOR Rate” upon the basis of which the
Adjusted LIBOR Rate for LIBOR Loans for such Interest Period is to be determined
will not adequately and fairly reflect the cost to such Lenders of making or
maintaining LIBOR Loans during such Interest Period, the Administrative Agent
will forthwith so notify the Borrowers and the Tranche 1 Lenders. Upon such
notice, (i) all then outstanding LIBOR Loans shall automatically, on the
expiration date of the respective Interest Periods applicable thereto (unless
then repaid in full), be converted into Base Rate Loans, (ii) the obligation of
the Tranche 1 Lenders to make, to convert Base Rate Loans into, or to continue,
LIBOR Loans shall be suspended (including pursuant to the Borrowing to which
such Interest Period applies), and (iii) any Notice of Borrowing or Notice of
Conversion/Continuation given at any time thereafter with respect to LIBOR Loans
shall be deemed to be a request for Base Rate Loans, in each case until the
Administrative Agent or the Required Tranche 1 Lenders, as the case may be,
shall have determined that the circumstances giving rise to such suspension no
longer exist (and the Required Tranche 1 Lenders, if making such determination,
shall have so notified the Administrative Agent), and the Administrative Agent
shall have so notified the Borrowers and the Tranche 1 Lenders.

(d)       Notwithstanding any other provision in this Agreement, if, at any time
after the date hereof and from time to time, any Tranche 1 Lender shall have
determined in good faith that the introduction of or any change in any
applicable law, rule or regulation or in the interpretation or administration
thereof by any Governmental Authority charged with the interpretation or

 

34

 

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

administration thereof, or compliance with any guideline or request from any
such Governmental Authority (whether or not having the force of law), has or
would have the effect of making it unlawful for such Tranche 1 Lender to make or
to continue to make or maintain LIBOR Loans, such Lender will forthwith so
notify the Administrative Agent and the Borrowers. Upon such notice, (i) each of
such Tranche 1 Lender’s then outstanding LIBOR Loans shall automatically, on the
expiration date of the respective Interest Period applicable thereto (or, to the
extent any such LIBOR Loan may not lawfully be maintained as a LIBOR Loan until
such expiration date, upon such notice), be converted into a Base Rate Loan,
(ii) the obligation of such Tranche 1 Lender to make, to convert Base Rate Loans
into, or to continue, LIBOR Loans shall be suspended (including pursuant to any
Borrowing for which the Administrative Agent has received a Notice of Borrowing
but for which the Borrowing Date has not arrived), and (iii) any Notice of
Borrowing or Notice of Conversion/Continuation given at any time thereafter with
respect to LIBOR Loans shall, as to such Tranche 1 Lender, be deemed to be a
request for a Base Rate Loan, in each case until such Tranche 1 Lender shall
have determined that the circumstances giving rise to such suspension no longer
exist and shall have so notified the Administrative Agent, and the
Administrative Agent shall have so notified the Borrowers.

(e)       The Borrowers shall pay to each Lender, with respect to any period
during which such Lender shall be required under Regulation D or under any
similar or successor regulation to maintain reserves (including, without
limitation, basic, supplemental, marginal and emergency reserves) with respect
to liabilities or assets consisting of or including Eurocurrency funds or
deposits (currently known as “Eurocurrency liabilities”), additional interest on
the unpaid principal amount of each LIBOR Loan equal to the actual costs of such
reserves allocated to such Loan by such Lender (as determined by such Lender in
good faith, which determination, absent demonstrable error, shall be
conclusive), which shall be due and payable on each date on which interest is
payable on such Loan, provided the Borrower shall have received at least 15
days’ prior notice (with a copy to the Administrative Agent) of such additional
interest from such Lender. If a Lender fails to give notice 15 days prior to the
relevant interest payment date, such additional interest shall be due and
payable 15 days from receipt of such notice.

(f)        Determinations by the Administrative Agent, the Issuing Lender or any
Lender for purposes of this Section 2.16 of any increased costs, reduction in
return, market contingencies, illegality or any other matter shall, absent
demonstrable error, be conclusive; provided that such determinations are made in
good faith. No failure by the Administrative Agent, the Issuing Lender or any
Lender at any time to demand payment of any amounts payable under this
Section 2.16 shall constitute a waiver of its right to demand payment of any
additional amounts arising at any subsequent time. Nothing in this Section 2.16
shall require or be construed to require the Borrowers to pay any interest,
fees, costs or other amounts in excess of that permitted by applicable law.

 

2.17

Taxes.

(a)       Subject to Section 2.17(e), any and all payments by or on behalf of
the Borrowers hereunder or under any other Credit Document shall be made, in
accordance with the terms hereof and thereof, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding
taxes imposed on, or measured by, the overall net income (or franchise taxes
imposed

 

35

 

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

in lieu thereof) of the Administrative Agent, Issuing Lender or any Lender by
reason of any present or former connection between the Administrative Agent,
Issuing Lender or such Lender and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision thereof, other than such a
connection arising solely from the Administrative Agent, Issuing Lender or such
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any other Credit Document (all
such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as “Taxes”). If any Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any other Credit Document to the Administrative Agent,
Issuing Lender or any Lender, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.17), the
Administrative Agent, Issuing Lender or such Lender, as the case may be,
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Borrower will make such deductions, (iii) such
Borrower will pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law and (iv) such Borrower will
deliver to the Administrative Agent, Issuing Lender or such Lender, as the case
may be, evidence of such payment.

(b)       Subject to Section 2.17(e), the Borrowers will indemnify the
Administrative Agent, Issuing Lender and each Lender for the full amount of
Taxes (including, without limitation, any Taxes imposed by any jurisdiction on
amounts payable under this Section 2.17) paid by the Administrative Agent,
Issuing Lender or such Lender, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date the Administrative
Agent, Issuing Lender or such Lender, as the case may be, makes written demand
therefor.

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

 

36

 

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

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

(e)       The Borrowers shall not be required to indemnify any Foreign Lender,
or to pay any additional amounts to any Foreign Lender, in respect of United
States federal withholding tax to the extent that (i) the obligation to withhold
amounts with respect to United States federal withholding tax existed on the
date such Foreign Lender became a party to this Agreement; provided, however,
that this clause (i) shall not apply to the extent that (y) the indemnity
payments or additional amounts any Lender would be entitled to receive (without
regard to this clause (i)) do not exceed the indemnity payment or additional
amounts that the person making the assignment, participation or transfer to such
Lender would have been entitled to receive in

 

37

 

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

the absence of such assignment, participation or transfer, or (z) such
assignment, participation or transfer was requested by any Borrower, (ii) the
obligation to pay such additional amounts would not have arisen but for a
failure by such Foreign Lender to comply with the provisions of Section 2.17(d),
(iii) any of the representations or certifications made by a Foreign Lender
pursuant to Section 2.17(d) are incorrect at the time a payment hereunder is
made, other than by reason of any change in treaty, law or regulation having
effect after the date such representations or certifications were made or
(iv) the Lender designated a successor Lending Office at which it maintains its
Loans which has the effect of causing such Lender to become obligated for tax
payments in excess of those in effect immediately prior to such designation.

(f)        At the Borrowers’ request and at the Borrowers’ cost, each Lender
shall take reasonable steps (i) (to the extent (x) consistent with such Lender's
internal policies and (y) the same would not, in the reasonable judgment of such
Lender, be otherwise materially disadvantageous to such Lender) to contest such
Lender's liability for Taxes that have not been paid or (ii) to seek a refund of
Taxes. Nothing in this Section 2.17 shall obligate any Lender to disclose any
information regarding its tax affairs or computations to any Borrower.

2.18     Compensation. The Borrowers will compensate each Tranche 1 Lender upon
demand for all losses, expenses and liabilities (including, without limitation,
any loss, expense or liability incurred by reason of the liquidation or
reemployment of deposits or other funds required by any Tranche 1 Lender to fund
or maintain LIBOR Loans) that such Tranche 1 Lender may incur or sustain (i) if
for any reason (other than a default by such Tranche 1 Lender) a Borrowing or
continuation of, or conversion into, a LIBOR Loan does not occur on a date
specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation, (ii) if any repayment, prepayment or conversion of any
LIBOR Loan occurs on a date other than the last day of an Interest Period
applicable thereto (including as a consequence of acceleration of the maturity
of the Loans pursuant to Section 9.2), (iii) if any prepayment of any LIBOR Loan
is not made on any date specified in a notice of prepayment given by the
respective Borrower or (iv) as a consequence of any other failure by any
Borrower to make any payments with respect to any LIBOR Loan when due hereunder.
Calculation of all amounts payable to a Tranche 1 Lender under this Section 2.18
shall be made as though such Tranche 1 Lender had actually funded its relevant
LIBOR Loan through the purchase of a Eurodollar deposit bearing interest at the
LIBOR Rate in an amount equal to the amount of such LIBOR Loan, having a
maturity comparable to the relevant Interest Period; provided, however, that
each Tranche 1 Lender may fund its LIBOR Loans in any manner it sees fit and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under this Section 2.18. Determinations by any Tranche 1 Lender for
purposes of this Section 2.18 of any such losses, expenses or liabilities shall,
absent demonstrable error, be conclusive; provided that such determinations are
made in good faith.

2.19     Replacement Lenders. If any Lender requests compensation under Section
2.16, or any Lender’s obligation to make or maintain LIBOR Loans has been
suspended under Section 2.16(d), or if any Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.17, or if any Lender becomes a Defaulting
Lender, then the Borrowers may, at their sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 11.7), all of its interests, rights and
obligations under this Agreement and any Notes

 

38

 

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

held by such Lender to an Eligible Assignee that shall assume such obligations
so long as the assigning Lender is paid in full all Obligations owing to it,
provided that (i) in the case of any such assignment resulting from a claim for
compensation under Section 2.16 or payments required to be made pursuant to
Section 2.17, such assignment will result in a reduction in such compensation or
payments thereafter; and (ii) such assignment does not conflict with applicable
law. A Lender shall not be required to make any such assignment if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment cease to apply.

 

2.20

Increase in Commitments.  

(a)       From time to time on and after the Restatement Effective Date and
prior to the Tranche 1 Termination Date so long as no Default or Event of
Default shall have occurred and be continuing, the Borrowers may, upon at least
30 days notice to the Administrative Agent (which shall promptly provide a copy
of such notice to the Tranche 1 Lenders), propose to increase the aggregate
amount of the Tranche 1 Commitments by an amount which (i) is not less than
$25,000,000 or, if greater, an integral multiple of $1,000,000 in excess
thereof, with respect to any such request nor (ii) when aggregated with all
prior and concurrent increases in the Tranche 1 Commitments and Tranche 2
Commitments pursuant to this Section 2.20, is not in excess of $250,000,000. The
Borrowers may increase the aggregate amount of the Tranche 1 Commitments by (x)
having another lender or lenders (each, an “Additional Tranche 1 Lender”) become
party to this Agreement, (y) agreeing with any Tranche 1 Lender (with the
consent of such Lender in its sole discretion) to increase its Tranche 1
Commitment hereunder or (z) a combination of the procedures described in clauses
(x) and (y) of this sentence.

(b)       From time to time on and after the Restatement Effective Date and
prior to the Tranche 2 Termination Date so long as no Default or Event of
Default shall have occurred and be continuing, the Borrowers may, upon at least
30 days notice to the Administrative Agent (which shall promptly provide a copy
of such notice to the Tranche 2 Lenders), propose to increase the aggregate
amount of the Tranche 2 Commitments by an amount which (i) is not less than
$25,000,000 or, if greater, an integral multiple of $1,000,000 in excess
thereof, with respect to any such request nor (ii) when aggregated with all
prior and concurrent increases in the Tranche 1 Commitments and Tranche 2
Commitments pursuant to this Section 2.20, is not in excess of $250,000,000. The
Borrowers may increase the aggregate amount of the Tranche 2 Commitments by (x)
having one or more Eligible Assignees (each, an “Additional Tranche 2 Lender”
and collectively with the Additional Tranche 1 Lenders, the “Additional
Lenders”) become party to this Agreement, (y) agreeing with any Tranche 2 Lender
(with the consent of such Lender in its sole discretion) to increase its Tranche
2 Commitment hereunder or (z) a combination of the procedures described in
clauses (x) and (y) of this sentence.

(c)       Upon any increase in the amount of the Tranche 1 Commitments or
Tranche 2 Commitments, as the case may be, pursuant to this Section 2.20 (each,
an “Additional Commitment”):

(i)        Each Additional Lender or existing Lender agreeing to increase its
Commitments pursuant to this Section 2.20 (each, an “Increasing Lender”) shall
enter into a Joinder Agreement pursuant to which such Additional Lender and/or
Increasing

 

39

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

Lender shall, as of the effective date, undertake an Additional Commitment (or,
in the case of an Increasing Lender, pursuant to which such Increasing Lender’s
Commitment shall be increased in the agreed amount on such date) and such
Additional Lender shall thereupon become (or, if an Increasing Lender, continue
to be) a “Lender” for all purposes hereof.

(ii)       The Borrowers shall in the event of an increase in the Tranche 1
Commitments, in coordination with the Administrative Agent, repay all
outstanding Loans and incur additional Loans from other Tranche 1 Lenders in
each case so that the Tranche 1 Lenders participate in each Borrowing pro rata
on the basis of their respective Tranche 1 Commitments (after giving effect to
any increase in the Tranche 1 Commitments pursuant to this Section 2.20) and
amounts payable under Section 2.18 as a result of the actions required to be
taken under this Section 2.20, shall be paid in full by the Borrowers;

(iii)      If any such Additional Lender is a Foreign Lender, such Additional
Lender shall deliver the forms required by Section 2.17(d); and

(iv)      Any Additional Commitment shall be subject to the prior written
approval of the Issuing Lender.

 

2.21

Extension of Tranche 1 Maturity Date and Tranche 2 Maturity Date.  

(a)       Twice during the term of this Agreement, Everest Group may, by written
notice to the Administrative Agent to be given not less than 30 days but not
more than 90 days prior to any anniversary of the Restatement Effective Date,
request a one-year extension of the Tranche 1 Maturity Date and/or the Tranche 2
Maturity Date; provided that neither the Tranche 1 Maturity Date nor the Tranche
2 Maturity Date may be extended beyond the seventh anniversary of the
Restatement Effective Date. The Administrative Agent shall promptly notify each
Lender holding a commitment that would be extended by such request of such
request, and each such Lender shall in turn, in its sole discretion, not later
than 20 days prior to the Tranche 1 Maturity Date and the Tranche 2 Maturity
Date, notify the Borrowers and the Administrative Agent in writing as to whether
such Lender will consent to such extension. If any such Lender shall fail to
notify the Administrative Agent and the Borrowers in writing of its consent to
any such request at least 20 days prior to the Tranche 1 Maturity Date and the
Tranche 2 Maturity Date, such Lender shall be deemed to be a Non-Consenting
Lender with respect to such request. The Administrative Agent shall notify the
Borrowers not later than 15 days prior to the relevant anniversary of the
Restatement Effective Date of the decision of the Lenders regarding the
Borrowers’ request for an extension of the Tranche 1 Maturity Date and Tranche 2
Maturity Date.

(b)       If all the Lenders holding a commitment that would be extended by such
request consent in writing to any such request in accordance with
Section 2.21(a), the Tranche 1 Maturity Date and/or Tranche 2 Maturity Date, as
the case may be, in effect at such time shall, effective as of the relevant
anniversary of the Restatement Effective Date (as applicable, the “Extension
Date”), be extended for one year; provided that on the Extension Date the
applicable conditions set forth in Section 4.2 shall be satisfied. If less than
all of the Lenders consent in

 

40

 

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

writing to any such request for an extension, the Tranche 1 Maturity Date and/or
Tranche 2 Maturity Date, as applicable, in effect at such time shall, effective
as of the Extension Date and subject to Section 2.21(d), be extended as to those
Lenders that so consented (each a “Consenting Lender”), but shall not be
extended as to any other Lender (each a “Non-Consenting Lender”). To the extent
that the Tranche 1 Maturity Date and Tranche 2 Maturity Date is not extended as
to any Lender pursuant to this Section 2.21 and the Commitment of such Lender is
not assumed in accordance with Section 2.21(c) on or prior to the Extension
Date, the Commitment of such Non-Consenting Lender shall automatically terminate
in whole on such Tranche 1 Maturity Date and Tranche 2 Maturity Date without any
further notice or other action by the Borrowers and all Obligations owing to
such Non-Consenting Lender at such shall time shall be subject to the prior
Tranche 1 Maturity Date and Tranche 2 Maturity Date; provided that such
Non-Consenting Lender’s rights under Sections 2.15, 2.16, 2.17, 2.18, and 11.2,
and its obligations under Section 10.7 shall survive the Tranche 1 Maturity Date
and Tranche 2 Maturity Date for such Lender as to matters occurring prior to
such date. It is understood and agreed that no Lender shall have any obligation
whatsoever to agree to any request made by the Borrowers for any requested
extension of the Tranche 1 Maturity Date and Tranche 2 Maturity Date.

(c)       If less than all of the Lenders consent to any such request pursuant
to Section 2.21(a), the Administrative Agent shall promptly so notify the
Consenting Lenders, and each Consenting Lender may, in its sole discretion, give
written notice to the Administrative Agent not later than 10 days prior to the
Extension Date of the amount of the Non-Consenting Lenders’ Commitments for
which it is willing to accept an assignment. If the Consenting Lenders notify
the Administrative Agent that they are willing to accept assignments of
Commitments in an aggregate amount that exceeds the amount of the Commitments of
the Non-Consenting Lenders, such Commitments shall be allocated among the
Consenting Lenders willing to accept such assignments in such amounts as are
agreed between the Borrowers and the Administrative Agent. If after giving
effect to the assignments of Commitments described above there remains any
Commitments of Non-Consenting Lenders, the Borrowers may arrange for one or more
Consenting Lenders or other Eligible Assignees as Additional Lenders to assume,
effective as of the Extension Date, any Non-Consenting Lender’s Commitment and
all of the obligations of such Non-Consenting Lender under this Agreement
thereafter arising, without recourse to or warranty by, or expense to, such
Non-Consenting Lender; provided, however, that the amount of the Commitment of
any such Additional Lender as a result of such substitution shall in no event be
less than $5,000,000 unless the amount of the Commitment of such Non-Consenting
Lender is less than $5,000,000, in which case such Additional Lender shall
assume all of such lesser amount; and provided further that:

(i)        any such Consenting Lender or Additional Lender shall have paid to
such Non-Consenting Lender (A) the aggregate principal amount of, and any
interest accrued and unpaid to the effective date of the assignment on, the
outstanding Loans, if any, of such Non-Consenting Lender plus (B) any accrued
but unpaid fees owing to such Non-Consenting Lender as of the effective date of
such assignment;

(ii)       all amounts payable to such Non-Consenting Lender under Section 11.2
and all other accrued and unpaid amounts owing to such Non-Consenting Lender

 

41

 

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

hereunder, as of the effective date of such assignment shall have been paid to
such Non-Consenting Lender; and

(iii)      with respect to any such Additional Lender, the processing fee
required under Section 11.7(a) for such assignment shall have been paid;

provided further that such Non-Consenting Lender’s rights under Sections 2.15,
2.16, 2.17, 2.18, and 11.2, and its obligations under Section 10.7, shall
survive such substitution as to matters occurring prior to the date of
substitution. At least three Business Days prior to the Extension Date, (A) each
such Additional Lender, if any, shall have delivered to the Borrowers and the
Administrative Agent an Assignment and Acceptance, duly executed by such
Additional Lender, such Non-Consenting Lender, the Borrowers and the
Administrative Agent, (B) any such Consenting Lender shall have delivered
confirmation in writing satisfactory to the Borrowers and the Administrative
Agent as to the increase in the amount of its Commitment and (C) each
Non-Consenting Lender being replaced pursuant to this Section 2.21 shall have
delivered to the Administrative Agent any Note held by such Non-Consenting
Lender. Upon the payment or prepayment of all amounts referred to in clauses
(i), (ii) and (iii) of the immediately preceding sentence, each such Consenting
Lender or Additional Lender, as of the Extension Date, will be substituted for
such Non-Consenting Lender under this Agreement and shall be a Lender for all
purposes of this Agreement, without any further acknowledgment by or the consent
of the other Lenders, and the obligations of each such Non-Consenting Lender
hereunder shall, by the provisions hereof, be released and discharged.

(d)       If (after giving effect to any assignments or assumptions pursuant to
Section 2.21(c)) any Lender consents in writing to a requested extension
(whether by execution or delivery of an Assumption Agreement or otherwise) not
later than one Business Day prior to such Extension Date, the Administrative
Agent shall so notify the Borrowers, and, subject to the satisfaction of the
conditions in Section 4.2, the Tranche 1 Maturity Date and Tranche 2 Maturity
Date shall be extended for the additional one year period as described in
Section 2.21(a), and all references in this Agreement, and in the Notes, if any,
to the “Tranche 1 Maturity Date” and “Tranche 2 Maturity Date” shall, with
respect to each Consenting Lender and each Additional Lender refer to the
Tranche 1 Maturity Date and Tranche 2 Maturity Date as so extended. Promptly
following the Extension Date, the Administrative Agent shall notify the Lenders
(including, without limitation, each Additional Lender) of the extension of the
Tranche 1 Maturity Date and Tranche 2 Maturity Date and shall thereupon record
in the Register the relevant information with respect to each such Consenting
Lender and each such Additional Lender.

ARTICLE III

LETTERS OF CREDIT

3.1       Issuance of Tranche 1 Letters of Credit. Subject to and upon the terms
and conditions herein set forth, so long as no Default or Event of Default has
occurred and is continuing, the Issuing Lender will, at any time and from time
to time on and after the Restatement Effective Date and prior to the Tranche 1
Termination Date, and upon request by a

 

42

 

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

Borrower in accordance with the provisions of Section 3.3, issue for the account
of such Borrower one or more irrevocable standby letters of credit denominated
in Dollars and in a form customarily used or otherwise approved by the Issuing
Lender (together with all amendments, modifications and supplements thereto,
substitutions therefor and renewals and restatements thereof, collectively, the
“Tranche 1 Letters of Credit”). The Stated Amount of each Tranche 1 Letter of
Credit shall not be less than $100,000. Notwithstanding the foregoing:

(a)       No Tranche 1 Letter of Credit shall be issued if the Stated Amount
thereof upon issuance when added to the aggregate Tranche 1 Credit Exposure,
would exceed the aggregate Tranche 1 Commitments at such time;

(b)       Notwithstanding that a Tranche 1 Letter of Credit issued or
outstanding hereunder is in support of any obligations of, or is for the account
of, or otherwise will benefit, a Subsidiary of a Borrower, such Borrower shall
be obligated to reimburse the Issuing Lender hereunder for any and all drawings
under such Tranche 1 Letter of Credit (and each Borrower hereby acknowledges
that the issuance of Tranche 1 Letters of Credit for the benefit of its
Subsidiaries inures to the benefit of each such Borrower and that each
Borrower’s business derives substantial benefits from the businesses of such
Subsidiaries);

(c)       No Tranche 1 Letter of Credit shall be issued that by its terms
expires later than the earlier of (i) one (1) year after its date of issuance
and (ii) the first anniversary of the Tranche 1 Termination Date; provided,
however, that a Tranche 1 Letter of Credit may, if requested by the applicable
Borrower, provide by its terms, and on terms acceptable to the Issuing Lender,
for renewal for successive periods of one year or less, unless and until the
Issuing Lender shall have delivered a notice of nonrenewal to the beneficiary of
such Tranche 1 Letter of Credit; and

(d)       The Issuing Lender shall be under no obligation to issue any Tranche 1
Letter of Credit if, at the time of such proposed issuance, (i) any order,
judgment or decree of any Governmental Authority or arbitrator shall purport by
its terms to enjoin or restrain the Issuing Lender from issuing such Tranche 1
Letter of Credit, or any Requirement of Law applicable to the Issuing Lender or
any request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Issuing Lender shall prohibit,
or request that the Issuing Lender refrain from, the issuance of letters of
credit generally or such Tranche 1 Letter of Credit in particular or shall
impose upon the Issuing Lender with respect to such Tranche 1 Letter of Credit
any restriction or reserve or capital requirement (for which the Issuing Lender
is not otherwise compensated) not in effect on the Restatement Effective Date,
or any unreimbursed loss, cost or expense that was not applicable or in effect
as of the Restatement Effective Date and that the Issuing Lender in good faith
deems material to it, or (ii) the Issuing Lender shall have actual knowledge, or
shall have received notice from any Tranche 1 Lender, prior to the issuance of
such Tranche 1 Letter of Credit that one or more of the conditions specified in
Section 4.1 (if applicable) or Section 4.2 are not then satisfied (or have not
been waived in writing as required herein) or that the issuance of such Tranche
1 Letter of Credit would violate the provisions of Section 3.1(a).

3.2       Issuance of Tranche 2 Letters of Credit. Subject to and upon the terms
and conditions herein set forth, so long as no Default or Event of Default has
occurred and is continuing, the Issuing Lender will, at any time and from time
to time on and after the

 

43

 

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

Restatement Effective Date and prior to the Tranche 2 Termination Date, and upon
request by a Borrower in accordance with the provisions of Section 3.3, issue
for the account of such Borrower one or more irrevocable standby letters of
credit denominated in Dollars and in a form customarily used or otherwise
approved by the Issuing Lender (together with all amendments, modifications and
supplements thereto, substitutions therefor and renewals and restatements
thereof, the “Tranche 2 Letters of Credit” and collectively with the Tranche 1
Letters of Credit, the “Letters of Credit”). Each letter of credit issued under
the Existing Credit Agreement and outstanding immediately prior to the
Restatement Effective Date shall be deemed to be a Tranche 2 Letter of Credit
hereunder. The Stated Amount of each Tranche 2 Letter of Credit shall not be
less than $100,000. Notwithstanding the foregoing:

(a)       No Tranche 2 Letter of Credit shall be issued if the Stated Amount
thereof upon issuance, when added to the aggregate Tranche 2 Letter of Credit
Exposure, would exceed the lesser of (y) the aggregate Tranche 2 Commitments and
(z) the aggregate Collateral Value at such time;

(b)       No Tranche 2 Letter of Credit shall be issued to any Borrower the
Stated Amount upon issuance of which, when added to the aggregate Tranche 2
Letter of Credit Exposure pertaining to such Borrower, would exceed the
Collateral Value in such Borrower’s Custodial Account at such time;

(c)       Notwithstanding that a Tranche 2 Letter of Credit issued or
outstanding hereunder is in support of any obligations of, or is for the account
of, or otherwise will benefit, a Subsidiary of a Borrower, such Borrower shall
be obligated to reimburse the Issuing Lender hereunder for any and all drawings
under such Tranche 2 Letter of Credit (and each Borrower hereby acknowledges
that the issuance of Tranche 2 Letters of Credit for the benefit of its
Subsidiaries inures to the benefit of each such Borrower and that each
Borrower’s business derives substantial benefits from the businesses of such
Subsidiaries);

(d)       No Tranche 2 Letter of Credit shall be issued that by its terms
expires later than the earlier of (i) one (1) year after its date of issuance
and (ii) the first anniversary of the Tranche 2 Termination Date; provided,
however, that a Tranche 2 Letter of Credit may, if requested by the applicable
Borrower, provide by its terms, and on terms acceptable to the Issuing Lender,
for renewal for successive periods of one year or less, unless and until the
Issuing Lender shall have delivered a notice of nonrenewal to the beneficiary of
such Tranche 2 Letter of Credit; and

(e)       The Issuing Lender shall be under no obligation to issue any Tranche 2
Letter of Credit if, at the time of such proposed issuance, (i) any order,
judgment or decree of any Governmental Authority or arbitrator shall purport by
its terms to enjoin or restrain the Issuing Lender from issuing such Tranche 2
Letter of Credit, or any Requirement of Law applicable to the Issuing Lender or
any request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Issuing Lender shall prohibit,
or request that the Issuing Lender refrain from, the issuance of letters of
credit generally or such Tranche 2 Letter of Credit in particular or shall
impose upon the Issuing Lender with respect to such Tranche 2 Letter of Credit
any restriction or reserve or capital requirement (for which the Issuing Lender
is not otherwise compensated) not in effect on the Restatement Effective Date,
or any unreimbursed loss, cost or expense that was not applicable or in effect
as of the Restatement

44

 

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

Effective Date and that the Issuing Lender in good faith deems material to it,
or (ii) the Issuing Lender shall have actual knowledge, or shall have received
notice from any Tranche 2 Lender, prior to the issuance of such Tranche 2 Letter
of Credit that one or more of the conditions specified in Section 4.1 (if
applicable) or Section 4.2 are not then satisfied (or have not been waived in
writing as required herein) or that the issuance of such Letter of Credit would
violate the provisions of Section 3.2(a).

 

3.3

Notices.  

(a)       Whenever a Borrower desires the issuance of a Letter of Credit, the
respective Borrower will give the Issuing Lender written notice with a copy to
the Administrative Agent not later than 11:00 a.m., Charlotte time, three (3)
Business Days (or such shorter period as is acceptable to the Issuing Lender in
any given case) prior to the requested date of issuance thereof. Each such
notice (each, a “Letter of Credit Notice”) shall be irrevocable, shall be given
in the form of Exhibit B-3 and shall specify (i) the requested date of issuance,
which shall be a Business Day, (ii) whether the Letter of Credit to be issued is
a Tranche 1 Letter of Credit or Tranche 2 Letter of Credit, (iii) the requested
Stated Amount and expiry date of the Letter of Credit, and (iv) the name and
address of the requested beneficiary or beneficiaries of the Letter of Credit.
Such Borrower will also complete any application procedures and documents
reasonably required by the Issuing Lender in connection with the issuance of any
Letter of Credit. Upon its issuance of any Letter of Credit, the Issuing Lender
will promptly notify the Administrative Agent of such issuance, and the
Administrative Agent will give prompt notice thereof to each Tranche 1 Lender or
Tranche 2 Lender as the case may be. The renewal or extension of any outstanding
Letter of Credit shall, for purposes of this Article III, be treated in all
respects as the issuance of a new Letter of Credit.

(b)       In addition to any Letter of Credit Notice with respect to a Tranche 2
Letter of Credit, the Borrowers shall deliver to the Administrative Agent a
Collateral Value Report not later than 11:00 a.m. Charlotte time on the Business
Day immediately preceding the date on which such Tranche 2 Letter of Credit is
to be issued.

3.4       Participations. Immediately upon the issuance of any Letter of Credit,
the Issuing Lender shall be deemed to have sold and transferred to each Tranche
1 Lender or Tranche 2 Lender, as the case may be, and each such Lender shall be
deemed irrevocably and unconditionally to have purchased and received from the
Issuing Lender, without recourse or warranty (except for the absence of Liens
thereon created, incurred or suffered to exist by, through or under the Issuing
Lender), an undivided interest and participation, pro rata in such Letter of
Credit, each drawing made thereunder and the obligations of the Borrowers under
this Agreement with respect thereto and any Collateral or other security
therefor or guaranty pertaining thereto; provided, however, that the fees
described in Sections 2.9(e), 2.9(h), and 2.9(i) shall be payable directly to
the Issuing Lender as provided therein, and the other Lenders shall have no
right to receive any portion thereof. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of the Issuing Lender, such Lender’s
pro rata share of each Reimbursement Obligation not reimbursed by the applicable
Borrower on the date due as provided in Section 3.5 or of any reimbursement
payment required to be refunded to the Borrowers for any reason. Upon any change
in the Commitments of any of the Lenders pursuant

 

45

 

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

to Sections 2.20, 2.21 or 11.7(a), with respect to all outstanding Letters of
Credit and Reimbursement Obligations under the Commitments to be so changed,
there shall be an automatic adjustment to the participations pursuant to this
Section 3.4 to reflect the new pro rata shares of the Lenders. Each Lender’s
obligation to make payment to the Issuing Lender pursuant to this Section 3.4
shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the termination of the Commitments or the
existence of any Default or Event of Default, and each such payment shall be
made without any offset, abatement, reduction or withholding whatsoever.

3.5       Reimbursement. Each Borrower hereby agrees to reimburse the Issuing
Lender by making payment to the Administrative Agent, for the account of the
Issuing Lender, in immediately available funds, for any payment made by the
Issuing Lender under any Letter of Credit issued to it (each such amount so paid
until reimbursed, together with interest thereon payable as provided
hereinbelow, a “Reimbursement Obligation”) forthwith upon, and in any event
within one (1) Business Day after such Borrower’s receipt of notice of such
payment by the Issuing Lender, together with interest on the amount so paid by
the Issuing Lender, to the extent not reimbursed prior to 2:00 p.m., Charlotte
time, on the date of such payment or disbursement, for the period from the date
of the respective payment to the date the Reimbursement Obligation created
thereby is satisfied, at the Base Rate plus 2%, such interest also to be payable
on demand. The Issuing Lender will provide the Administrative Agent and the
respective Borrower with prompt notice of any payment or disbursement made or to
be made under any Letter of Credit, although the failure to give, or any delay
in giving, any such notice shall not release, diminish or otherwise affect such
Borrower’s obligations under this Section 3.5 or any other provision of this
Agreement. The Administrative Agent will promptly pay to the Issuing Lender any
such amounts received by it under this Section 3.5.

3.6       Obligations Absolute. The Reimbursement Obligations of each Borrower
with respect to Letters of Credit issued to it (i) shall be irrevocable, (ii)
shall remain in effect until the Lenders shall have no further obligations to
make any payments or disbursements under any circumstances with respect to any
Letter of Credit and (iii) except to the extent resulting from any gross
negligence or willful misconduct on the part of the Issuing Lender, shall be
absolute and unconditional, shall not be subject to counterclaim, setoff or
other defense (other than the defense of payment) or any other qualification or
exception whatsoever and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:

(a)       Any lack of validity or enforceability of this Agreement, any of the
other Credit Documents or any documents or instruments relating to any Letter of
Credit;

(b)       Any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations in respect of any Letter of Credit or any
other amendment, modification or waiver of or any consent to departure from any
Letter of Credit or any documents or instruments relating thereto, in each case
whether or not the Borrowers have notice or knowledge thereof;

(c)       The existence of any claim, setoff, defense or other right that any
Borrower may have at any time against a beneficiary named in a Letter of Credit,
any transferee of any Letter of

 

46

 

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

Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, the Issuing Lender, any Lender or other Person, whether in
connection with this Agreement, any Letter of Credit Document, the transactions
contemplated hereby or any unrelated transactions (including any underlying
transaction between such Borrower and the beneficiary named in any such Letter
of Credit);

(d)       Any draft, certificate or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect
(provided that such draft, certificate or other document appears on its face to
strictly comply with the terms of such Letter of Credit);

(e)       Any defense based upon the failure of any drawing under a Letter of
Credit to conform to the terms of the Letter of Credit (provided that any draft
or certificate or other document presented pursuant to such Letter of Credit
appears on its face strictly to comply with the terms thereof ), any
nonapplication or misapplication by the beneficiary or any transferee of the
proceeds of such drawing or any other act or omission of such beneficiary or
transferee in connection with such Letter of Credit;

(f)        Any exchange, release, surrender or impairment of any Collateral or
other security for the Obligations;

 

(g)

The occurrence of any Default or Event of Default; or

(h)       Any other circumstance or event whatsoever where the Issuing Lender
has acted in good faith and has exercised due care in its examination of
documents presented under a Letter of Credit, including, without limitation, any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any guarantor.

3.7       No Liability of the Issuing Lender. Any action taken or omitted to be
taken by the Issuing Lender under or in connection with any Letter of Credit, if
taken or omitted in the absence of gross negligence or willful misconduct, shall
be binding upon each Borrower and each Lender and shall not create or result in
any liability of the Issuing Lender to any Borrower or any Lender; provided that
the Issuing Lender exercises due care in its examination of documents presented
under any Letter of Credit; and provided, further, that this sentence shall not
detract from any claim a Borrower may have against the Issuing Lender for
wrongful dishonor of a draft or demand presented under a Letter of Credit. It is
expressly understood and agreed that, for purposes of determining whether a
wrongful payment under a Letter of Credit resulted from the Issuing Lender’s
gross negligence or willful misconduct, (i) the Issuing Lender’s acceptance of
documents that appear on their face to comply with the terms of such Letter of
Credit without responsibility for further investigation, regardless of any
notice or information to the contrary, (ii) the Issuing Lender’s exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including the amount of any draft presented
under such Letter of Credit, whether or not the amount due to the beneficiary
thereunder equals the amount of such draft and whether or not any document
presented pursuant to such Letter of Credit proves to be insufficient in any
respect (so long as such document appears on its face to comply with the terms
of such Letter of Credit), and whether or not any other statement or any other
document presented pursuant to such Letter of

 

47

 

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

Credit proves to be forged or invalid or any statement therein proves to be
inaccurate or untrue in any respect whatsoever, and (iii) any noncompliance in
any immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in each case be deemed not to constitute gross
negligence or willful misconduct of the Issuing Lender.

3.8       Cash Collateral Account. At any time and from time to time (i) after
the occurrence and during the continuance of an Event of Default, the
Administrative Agent may, and at the direction or with the consent of the
Required Lenders shall, require the Borrowers to deliver to the Administrative
Agent such additional amount of cash as is equal to (x) the aggregate Stated
Amount of all Letters of Credit at any time outstanding (whether or not any
beneficiary under any Letter of Credit shall have drawn or be entitled at such
time to draw thereunder) minus (y) the aggregate Collateral Value of all
Collateral at such time and (ii) in the event of a prepayment under
Section 2.6(b) or Section 2.6(c) (to the extent required by the provisos to such
Sections), the Administrative Agent will retain such amount as may then be
required to be retained, such amounts in each case under clauses (i) and (ii)
above to be held by the Administrative Agent in a cash collateral account (the
“Cash Collateral Account”). The Borrowers hereby grant to the Administrative
Agent, for the benefit of the Issuing Lender and the Lenders, a Lien upon and
security interest in the Cash Collateral Account and all amounts held therein
from time to time as security for the Tranche 1 Letter of Credit Exposure and
the Tranche 2 Letter of Credit Exposure, and for application to the Borrowers’
Reimbursement Obligations as and when the same shall arise. The Administrative
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account. Other than any interest on the investment of
such amounts in Cash Equivalents, which investments shall be made at the
direction of the Borrowers (unless a Default or Event of Default shall have
occurred and be continuing, in which case the determination as to investments
shall be made at the option and in the discretion of the Administrative Agent),
amounts in the Cash Collateral Account shall not bear interest. Interest and
profits, if any, on such investments shall accumulate in such account. In the
event of a drawing, and subsequent payment by the Issuing Lender, under any
Letter of Credit at any time during which any amounts are held in the Cash
Collateral Account, the Administrative Agent will deliver to the Issuing Lender
an amount equal to the Reimbursement Obligation created as a result of such
payment (or, if the amounts so held are less than such Reimbursement Obligation,
all of such amounts) to reimburse the Issuing Lender therefor. Any amounts
remaining in the Cash Collateral Account (including interest) after the
expiration of all Letters of Credit and reimbursement in full of the Issuing
Lender for all of its obligations thereunder shall be held by the Administrative
Agent, for the benefit of the Borrower, to be applied against the Obligations in
such order and manner as the Administrative Agent may direct. If the Borrowers
are required to provide cash collateral pursuant to Section 2.6(b) or
Section 2.6(c), such amount (to the extent not applied as aforesaid) shall be
returned to the Borrowers on demand; provided that after giving effect to such
return (i) the Tranche 1 Credit Exposure at such time would not exceed the
Tranche 1 Commitments at such time, (ii) the Tranche 2 Letter of Credit Exposure
at such time would not the exceed lesser of (y) the Tranche 2 Commitments at
such time and (z) the aggregate Collateral Value at such time, and (ii) no
Default or Event of Default shall have occurred and be continuing at such time.
If the Borrowers are required to provide cash collateral as a result of an Event
of Default, such amount (to the extent not applied as aforesaid) shall be
returned to the Borrowers within three (3) Business Days after all Events of
Default have been cured or waived.

 

48

 

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

3.9       The Issuing Lender. The Issuing Lender shall act on behalf of the
Lenders with respect to any Letters of Credit issued by it and the documents
associated therewith, and the Issuing Lender shall have all of the rights,
benefits and immunities (a) provided to the Administrative Agent in Article X
with respect to any acts taken or omissions suffered by it in connection with
Letters of Credit issued by it or proposed to be issued by it and any documents
pertaining to such Letters of Credit as fully as if the term “Administrative
Agent” as used in Article X included the Issuing Lender with respect to such
acts or omissions, and (b) as additionally provided herein with respect to the
Issuing Lender.

3.10     Effectiveness. Notwithstanding any termination of the Commitments or
repayment of the Loans, or both, the obligations of the Borrowers under this
Article III shall remain in full force and effect until the Issuing Lender and
the Lenders shall have no further obligations to make any payments or
disbursements under any circumstances with respect to any Letter of Credit.

ARTICLE IV

CONDITIONS PRECEDENT

4.1       Conditions Precedent to the Restatement Effective Date. The obligation
of each Lender to make Loans hereunder, and the obligation of the Issuing Lender
to issue Letters of Credit hereunder, shall not become effective until the date
(the “Restatement Effective Date”) on which each of the following conditions is
satisfied (or waived in accordance with Section 11.6):

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

(i)        to the extent requested by any Tranche 1 Lender in accordance with
Section 2.4(d), a Note for such Tranche 1 Lender, in each case duly completed in
accordance with the provisions of Section 2.4(d) and executed by each of the
Borrowers;

(ii)       counterparts of the Amended and Restated Security Agreement executed
by each Borrower, together with:

(A)      all documents and instruments, including Uniform Commercial Code
financing statements where applicable, required by law in each applicable
jurisdiction or reasonably requested by the Administrative Agent to be filed,
registered or recorded to create or perfect the Liens intended to be created
under the Amended and Restated Security Agreement;

(B)      results of a recent search of the Uniform Commercial Code (or
equivalent) filings made with respect to each Borrower in the jurisdictions
contemplated in clause (i) above (including, without limitation, Washington D.C.
and Bermuda) and in such other jurisdictions in which Collateral is located on
the Restatement Effective Date which may be reasonably requested by the
Administrative Agent, and copies of the financing statements (or similar

 

49

 

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

documents) disclosed by such search and evidence reasonably satisfactory to the
Administrative Agent that the Liens indicated by such financing statements (or
similar documents) are permitted by the Amended and Restated Security Agreement
or have been released; and

(C)      for each Custodial Account, an Account Control Agreement with the
applicable Custodian in the form specified in the Amended and Restated Security
Agreement (appropriately completed), with such changes thereto as may be
reasonably acceptable to the Administrative Agent and each such Account Control
Agreement shall be in full force and effect;

(iii)      a certificate, signed by the chief executive officer, chief financial
officer, treasurer or comptroller of each Borrower, in form and substance
satisfactory to the Administrative Agent, certifying that (A) all
representations and warranties of such Borrower contained in this Agreement and
the other Credit Documents are true and correct in all material respects as of
the Restatement Effective Date (except representations and warranties which
relate solely to a specific earlier date, which shall have been true and correct
in all material respects as of such earlier date), both immediately before and
after giving effect to the consummation of the transactions contemplated hereby,
the making of the initial Loans hereunder and the application of the proceeds
thereof, (B) no Default or Event of Default has occurred and is continuing, both
immediately before and after giving effect to the initial Loans hereunder and
the application of the proceeds thereof, (C) there are no insurance regulatory
proceedings pending or, to such individual’s knowledge, threatened against any
Insurance Subsidiary in any jurisdiction that would reasonably be expected to
have a Material Adverse Effect, and (D) both immediately before and after giving
effect to the consummation of the transactions contemplated by this Agreement,
no event having a Material Adverse Effect has occurred since December 31, 2006
and there exists no event, condition or state of facts that would reasonably be
expected to result in a Material Adverse Effect;

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

 

50

 

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

(v)       a favorable opinion of (i) Mayer, Brown, Rowe & Maw LLP, special New
York counsel to the Borrowers, (ii) Sanjoy Mukherjee, General Counsel of Everest
Group, and (iii) Conyers Dill & Pearman, Bermuda counsel to the Borrowers, all
in form and substance reasonably satisfactory to the Administrative Agent;

(b)       The Administrative Agent shall have received a certificate as of a
recent date of the good standing of each Borrower under the laws of their
respective jurisdictions of organization from the Secretary of State or
Insurance Regulatory Authorities (or comparable Governmental Authority) of such
jurisdiction;

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

(d)       Since December 31, 2006, both immediately before and after giving
effect to the consummation of the transactions contemplated by this Agreement,
there shall not have occurred any event having a Material Adverse Effect or any
event, condition or state of facts that could reasonably be expected to result
in a Material Adverse Effect;

(e)       The Borrowers shall have paid (i) to the Arranger and Wachovia, the
fees required under the Fee Letter to be paid to them on the Restatement
Effective Date, in the amounts due and payable on the Restatement Effective Date
as required by the terms thereof, (ii) to the Administrative Agent, the initial
payment of the annual administrative fee described in the Fee Letter, and (iii)
all other fees and reasonable expenses of the Arranger, the Administrative Agent
and the Lenders required hereunder or under any other Credit Document to be paid
on or prior to the Restatement Effective Date (including reasonable fees and
expenses of counsel) in connection with this Agreement and the transactions
contemplated hereby;

(f)        The Administrative Agent shall have received an Account Designation
Letter, together with written instructions from an Authorized Officer of each
Borrower, including wire transfer information, directing the payment of the
proceeds of the initial Loans to be made hereunder; and

 

51

 

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

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

4.2       Conditions Precedent to All Loans and Letters of Credit. The
obligation of each Lender to make any Loan hereunder and the obligation of the
Issuing Lender to issue any Letters of Credit hereunder, is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date or date of issuance:

 

(a)

The Restatement Effective Date shall have occurred;

(b)       The Administrative Agent shall have received a Notice of Borrowing in
accordance with Section 2.2(b) or (together with the Issuing Lender) a Letter of
Credit Notice in accordance with Section 3.3, as applicable;

(c)       Each of the representations and warranties contained in Article V and
in the other Credit Documents shall be true and correct in all material respects
on and as of the Restatement Effective Date (in the case of the initial Loan
made or Letter of Credit issued hereunder) and as of any such later Borrowing
Date in the case of all subsequent Loans or date of issuance of a Letter of
Credit (except those found at Section 5.10, clause (i) of Section 5.5, and
clause (ii) of Section 5.13(c)), with the same effect as if made on and as of
such date, both immediately before and after giving effect to the Loans to be
made or Letter of Credit to be issued on such date (except to the extent any
such representation or warranty is expressly stated to have been made as of a
specific date, in which case such representation or warranty shall be true and
correct in all material respects as of such date); and

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

Each giving of a Notice of Borrowing or a Letter of Credit Notice, and the
consummation of each Borrowing or issuance of a Letter of Credit, shall be
deemed to constitute a representation and warranty by the Borrowers that the
statements contained in subsections 4.2(c) and 4.2(d) above are true, both as of
the date of such notice or request and as of the relevant Borrowing Date or date
of issuance.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent, the Issuing Lender and the Lenders to enter
into this Agreement and to induce the Lenders to extend the credit contemplated
hereby and the Issuing Lender to issue Letters of Credit, each of the Borrowers
represents and warrants to the Administrative Agent, the Issuing Lender and the
Lenders as follows:

5.1       Corporate Organization and Power. Each of the Borrowers and their
respective Subsidiaries (i) is a corporation duly organized, validly existing
and in good standing under the

 

52

 

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

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

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

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

 

5.4

Governmental and Third-Party Authorization; Permits.

(a)       No consent, approval, authorization or other action by, notice to, or
registration or filing with, any Governmental Authority or other Person is or
will be required as a condition to or otherwise in connection with the due
execution, delivery and performance by each Borrower of this Agreement or any of
the other Credit Documents to which it is or will be a party or the legality,
validity or enforceability hereof or thereof, other than filings of Uniform
Commercial Code financing statements and other instruments and actions necessary
to perfect the Liens created by the Security Documents.

 

53

 

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

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

(c)       Schedule 5.4 lists with respect to each Insurance Subsidiary, as of
the Restatement Effective Date, all of the jurisdictions in which such Insurance
Subsidiary holds licenses (including, without limitation, licenses or
certificates of authority from relevant Insurance Regulatory Authorities),
permits or authorizations to transact insurance and reinsurance business
(collectively, the “Licenses”), and indicates the type or types of insurance in
which each such Insurance Subsidiary is permitted to be engaged with respect to
each License therein listed. (i) No such License is the subject of a proceeding
for suspension, revocation or limitation or any similar proceedings, (ii) there
is no sustainable basis for such a suspension, revocation or limitation, and
(iii) no such suspension, revocation or limitation is threatened by any relevant
Insurance Regulatory Authority, that, in each instance under (i), (ii) and (iii)
above, would individually or in the aggregate, have a Material Adverse Effect.
No Insurance Subsidiary transacts any insurance business, directly or
indirectly, in any jurisdiction other than those listed on Schedule 5.4, where
such business requires any license, permit or other authorization of an
Insurance Regulatory Authority of such jurisdiction.

5.5       Litigation. Except as disclosed in Everest Group’s 2006 Form 10-K and
as supplemented in written disclosure to the Administrative Agent delivered
prior to execution of this Agreement, there are no actions, investigations,
suits or proceedings pending or threatened, at law, in equity or in arbitration,
before any court, other Governmental Authority or other Person, against or
affecting any Borrower, any of their respective Subsidiaries or any of their
respective properties (i) that would reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect, or (ii) with respect to
this Agreement or any of the other Credit Documents.

5.6       Taxes. Each of the Borrowers and their respective Subsidiaries has
timely filed all federal, state, local and foreign tax returns and reports
required to be filed by it and has paid all taxes, assessments, fees and other
charges levied upon it or upon its properties that are shown thereon as due and
payable, other than those that are being contested in good faith and by proper
proceedings and for which adequate reserves have been established in accordance
with GAAP. Such returns are true, correct and complete in all material respects.
There is no ongoing audit or examination or other investigation by any
Governmental Authority of the tax liability of any Borrower or any of their
respective Subsidiaries, and there is no unresolved claim by any Governmental
Authority concerning the tax liability of any Borrower or any of their
respective Subsidiaries for any period for which tax returns have been or were
required to have been filed, other than claims for which adequate reserves have
been established in accordance with GAAP. No Borrower or any of their respective
Subsidiaries has waived or extended or has been requested to waive or extend the
statute of limitations relating to the payment of any taxes.

5.7       Subsidiaries. Schedule 5.7 sets forth a list, as of the Restatement
Effective Date, of all of the Subsidiaries of Everest Group and, as to each such
Subsidiary, the percentage ownership (direct and indirect) in each class of its
Capital Stock and each direct owner thereof.

 

54

 

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

All of the issued and outstanding shares of Capital Stock of Everest Bermuda and
Everest International are directly owned and held by Everest Group.

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

5.9       Margin Regulations. No Borrower or any of their respective
Subsidiaries is engaged principally or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
Margin Stock. No proceeds of the Loans will be used, directly or indirectly, to
purchase or carry any Margin Stock, to extend credit for such purpose or for any
other purpose that would violate or be inconsistent with Regulations T, U or X
or any provision of the Exchange Act.

5.10     No Material Adverse Effect. There has been no Material Adverse Effect
since December 31, 2006, and there exists no event, condition or state of facts
that could reasonably be expected to result in a Material Adverse Effect.

 

5.11

Financial Matters.

(a)       Everest Group has heretofore furnished to the Administrative Agent
copies of (i) the audited consolidated balance sheets of Everest Group and its
Subsidiaries as of December 31, 2006, 2005 and 2004 and the related statements
of income, stockholders’ equity and cash flows for the fiscal years then ended,
together with the opinion of PricewaterhouseCoopers thereon, and (ii) the
unaudited consolidated balance sheet of Everest Group and its Subsidiaries as of
March 31, 2007, and the related statements of income, stockholders’ equity and
cash flows for the three month period then ended. Such financial statements have
been prepared in accordance with GAAP (subject, with respect to the unaudited
financial statements, to the absence of notes required by GAAP and to normal
year end adjustments) and present fairly in all material respects the financial
condition of Everest Group and its Subsidiaries on a consolidated basis as of
the respective dates thereof and the consolidated results of operations of
Everest Group and its Subsidiaries for the respective periods then ended.

(b)       Everest Group has heretofore furnished to the Administrative Agent
copies of (i) the Annual Statements of each Insurance Subsidiary as of December
31, 2006, 2005 and 2004 and for the fiscal years then ended, each as filed with
the relevant Insurance Regulatory Authority, and (ii) the Quarterly Statements
of each Insurance Subsidiary as of March 31, 2007, and for the three month
period then ended, each as filed with the relevant Insurance Regulatory

 

55

 

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

Authority (collectively, the “Historical Statutory Statements”). The Historical
Statutory Statements (including, without limitation, the provisions made therein
for investments and the valuation thereof, reserves, policy and contract claims
and statutory liabilities) have been prepared, in all material respects, in
accordance with SAP (except as may be reflected in the notes thereto and
subject, with respect to the Quarterly Statements, to the absence of notes
required by SAP and to normal year end adjustments), were in all material
respects, in compliance with applicable Requirements of Law when filed and
present fairly in all material respects the financial condition of the
respective Insurance Subsidiaries covered thereby as of the respective dates
thereof and the results of operations, changes in capital and surplus and cash
flows of the respective Insurance Subsidiaries covered thereby for the
respective periods then ended.

 

5.12

ERISA.

(a)       Each of the Borrowers and their ERISA Affiliates is in compliance in
all material respects with the applicable provisions of ERISA, and each Plan is
and has been administered in compliance in all material respects with all
applicable Requirements of Law, including, without limitation, the applicable
provisions of ERISA and the Internal Revenue Code. No ERISA Event (i) has
occurred within the five-year period prior to the Restatement Effective Date and
is continuing, or (ii) to the knowledge of any Borrower, is reasonably expected
to occur with respect to any Plan, in either case that would reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.
No Plan has any Unfunded Pension Liability as of the date of the most recent
actuarial report applicable thereto, and no Borrower or any of their respective
ERISA Affiliates has engaged in a transaction that could be subject to Section
4069 or 4212(c) of ERISA, in either instance where the same would reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.

(b)       No Borrower nor any of their respective ERISA Affiliates has had a
complete or partial withdrawal from any Multiemployer Plan for which there
exists unsatisfied withdrawal liability that would reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect, and no
Borrower nor any of their respective ERISA Affiliates would become subject to
any withdrawal liability under ERISA that would reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect if such
Borrower or any such ERISA Affiliate were to withdraw completely from all
Multiemployer Plans as of the most recent valuation date for the Multiemployer
Plans. To the knowledge of each of the Borrowers, no Multiemployer Plan is in
“reorganization” or is “insolvent” within the meaning of such terms under ERISA.

 

5.13

Environmental Matters.

(a)       No Hazardous Substances are or have been generated, used, located,
released, treated, disposed of or stored by any Borrower or any of their
respective Subsidiaries or, to the knowledge of each of the Borrowers, by any
other Person (including any predecessor in interest) or otherwise, in, on or
under any portion of any real property, leased or owned, of any Borrower or any
of their respective Subsidiaries, except in compliance with all applicable
Environmental Laws, and no portion of any such real property or, to the
knowledge of each of the Borrowers, any other real property at any time leased,
owned or operated by any Borrower or any of their

 

56

 

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

respective Subsidiaries, has been contaminated by any Hazardous Substance; and
no portion of any real property, leased or owned, of any Borrower or any of
their respective Subsidiaries has been or, to the knowledge of each of the
Borrowers, is presently the subject of an environmental audit, assessment or
remedial action.

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

(c)       Except as disclosed in Everest Group’s 2006 Form 10-K, (i) all
activities and operations of each of the Borrowers and their respective
Subsidiaries are in compliance with the requirements of all applicable
Environmental Laws, except to the extent the failure so to comply, individually
or in the aggregate, would not be reasonably likely to have a Material Adverse
Effect, (ii) no Borrower or any of their respective Subsidiaries is involved in
any suit, action or proceeding, or has received any notice, complaint or other
request for information from any Governmental Authority or other Person, with
respect to any actual or alleged Environmental Claims that would be reasonably
likely, individually or in the aggregate, to have a Material Adverse Effect and
(iii) to the knowledge of each of the Borrowers, there are no threatened
actions, suits, proceedings or investigations with respect to any such
Environmental Claims, nor any basis therefor.

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

5.15     Regulated Industries. No Borrower or any of their respective
Subsidiaries is an “investment company,” a company “controlled” by an
“investment company,” or an “investment advisor,” within the meaning of the
Investment Company Act of 1940, as amended.

5.16     Insurance. The assets, properties and business of each of the Borrowers
and their respective Subsidiaries are insured against such hazards and
liabilities, under such coverages and in such amounts, as are customarily
maintained by prudent companies similarly situated and under policies issued by
insurers of recognized responsibility. No notice of any pending or threatened
cancellation or material premium increase has been received by any Borrower or
any

 

57

 

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

of their respective Subsidiaries with respect to any such policies, and each of
the Borrowers and their respective Subsidiaries are in substantial compliance
with all conditions contained therein.

 

5.17

OFAC; PATRIOT Act.

(a)       No Borrower or their respective Subsidiaries is a Sanctioned Person or
does business in a Sanctioned Country or with a Sanctioned Person in violation
of the economic sanctions of the United States administered by OFAC.

(b)       Each of the Borrowers and their respective Subsidiaries is in
compliance in all material respects with the PATRIOT Act. No part of the
proceeds of the Loans hereunder will be used, directly or indirectly, for any
payments to any governmental official or employee, political party, official of
a political party, candidate for political office, or anyone else acting in an
official capacity, in order to obtain, retain or direct business or obtain any
improper advantage, in violation of the United States Foreign Corrupt Practices
Act of 1977, as amended.

5.18     Security Documents. The Security Documents create a valid and
enforceable security interest in and Lien upon all right, title and interest of
each Borrower that is a party thereto in and to the Collateral purported to be
pledged by it thereunder and described therein, superior to and prior to the
rights of all third persons and subject to no other Liens except as specifically
permitted therein. Upon the filing of a charge with the Bermuda Registrar of
Companies, no filings or recordings are required in order to ensure the
enforceability, perfection or priority of the security interests created under
the Security Documents, except for filings or recordings which shall have been
previously made.

ARTICLE VI

AFFIRMATIVE COVENANTS

Each of the Borrowers covenants and agrees that, until the termination of the
Commitments, the termination or expiration of all Letters of Credit and the
payment in full in cash of all principal and interest with respect to the Loans
and all Reimbursement Obligations together with all fees, expenses and other
amounts then due and owing hereunder:

 

6.1

GAAP Financial Statements. Everest Group will deliver to each Lender:

(a)       As soon as available and in any event within fifty five (55) days (or,
if earlier and if applicable to Everest Group, the quarterly report deadline
under the Exchange Act rules and regulations) after the end of each of the first
three fiscal quarters of each fiscal year, beginning with the fiscal quarter
ending June 30, 2007, unaudited consolidated and, to the extent otherwise
prepared for external distribution, consolidating balance sheets of Everest
Group and its Subsidiaries as of the end of such fiscal quarter and unaudited
consolidated and, to the extent otherwise prepared for external distribution,
consolidating statements of income, stockholders’ equity and cash flows for
Everest Group and its Subsidiaries for the fiscal quarter then ended and for
that portion of the fiscal year then ended, in each case setting forth
comparative consolidated or consolidating figures as of the end of and for the
corresponding period in the preceding fiscal year, all prepared in accordance
with GAAP (subject to the absence of notes required by GAAP

 

58

 

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

and subject to normal year end adjustments) applied on a basis consistent with
that of the preceding quarter or containing disclosure of the effect on the
financial condition or results of operations of any change in the application of
accounting principles and practices during such quarter; and

(b)       As soon as available and in any event within one hundred and five
(105) days (or, if earlier and if applicable to Everest Group, the annual report
deadline under the Exchange Act rules and regulations) after the end of each
fiscal year, beginning with the fiscal year ending December 31, 2007, (i) an
audited consolidated balance sheet of Everest Group and its Subsidiaries as of
the end of such fiscal year and audited consolidated statements of income,
stockholders’ equity and cash flows for Everest Group and its Subsidiaries for
the fiscal year then ended, including the applicable notes, in each case setting
forth comparative figures as of the end of and for the preceding fiscal year,
certified by the independent certified public accounting firm regularly retained
by Everest Group or another independent certified public accounting firm of
recognized national standing, together with (y) a report thereon by such
accountants that is not qualified as to going concern or scope of audit and to
the effect that such financial statements present fairly in all material
respects the consolidated financial condition and results of operations of
Everest Group and its Subsidiaries as of the dates and for the periods indicated
in accordance with GAAP applied on a basis consistent with that of the preceding
year or containing disclosure of the effect on the financial condition or
results of operations of any change in the application of accounting principles
and practices during such year, and (z) a report by such accountants to the
effect that, based on and in connection with their examination of the financial
statements of Everest Group and its Subsidiaries, they obtained no knowledge of
the occurrence or existence of any Default or Event of Default relating to
accounting or financial reporting matters, or a statement specifying the nature
and period of existence of any such Default or Event of Default disclosed by
their audit; provided, however, that such accountants shall not be liable by
reason of the failure to obtain knowledge of any Default or Event of Default
that would not be disclosed or revealed in the course of their audit
examination, and (ii) to the extent otherwise prepared, an unaudited
consolidating balance sheet of Everest Group and its Subsidiaries as of the end
of such fiscal year and unaudited consolidating statements of income,
stockholders’ equity and cash flows for Everest Group and its Subsidiaries for
the fiscal year then ended, all in reasonable detail.

 

6.2

Statutory Financial Statements. Everest Group will deliver to each Lender:

(a)       As soon as available and in any event within fifty five (55) days
after the end of each of the first three fiscal quarters of each fiscal year
(or, in the case of Everest Insurance Company of Canada, within fifteen (15)
days after the required filing date), beginning with the fiscal quarter ending
June 30, 2007, a Quarterly Statement of each of its Insurance Subsidiaries as of
the end of such fiscal quarter and for that portion of the fiscal year then
ended, in the form filed with the relevant Insurance Regulatory Authority,
prepared in accordance with SAP applied on a basis consistent with that of the
preceding quarter or containing disclosure of the effect on the financial
condition or results of operations of any change in the application of
accounting principles and practices during such quarter;

(b)       As soon as available and in any event within ninety (90) days after
the end of each fiscal year (or, in the case of Everest Insurance Company of
Canada, within fifteen (15) days

 

59

 

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

after the required filing date), beginning with the fiscal year ending December
31, 2007, an Annual Statement of each of its Insurance Subsidiaries as of the
end of such fiscal year and for the fiscal year then ended, in the form filed
with the relevant Insurance Regulatory Authority, prepared in accordance with
SAP applied on a basis consistent with that of the preceding year or containing
disclosure of the effect on the financial condition or results of operations of
any change in the application of accounting principles and practices during such
year;

(c)       As soon as available and in any event within 135 days after the end of
each fiscal year, beginning with the fiscal year ending December 31, 2007, an
unaudited consolidated balance sheet of Everest Group and its Insurance
Subsidiaries (other than Everest Insurance Company of Canada) as of the end of
such fiscal year and unaudited consolidated statements of income, stockholders’
equity and cash flows for Everest Group and its Insurance Subsidiaries (other
than Everest Reinsurance Company of Canada) for the fiscal year then ended, in
each case setting forth comparative consolidated figures as of the end of and
for the preceding fiscal year, all prepared in accordance with SAP applied on a
basis consistent with that of the preceding year or containing disclosure of the
effect on the financial condition or results of operations of any change in the
application of accounting principles and practices during such year; and

(d)       As soon as available and in any event within 165 days after the end of
each fiscal year, beginning with the fiscal year ending December 31, 2007 (but
only if and to the extent required by the applicable Insurance Regulatory
Authority with regard to any Insurance Subsidiary), a certification by the
independent certified public accounting firm referred to in Section 6.1(b) as to
the Annual Statement of each such Insurance Subsidiary as of the end of such
fiscal year and for the fiscal year then ended, together with a report thereon
by such accountants that is not qualified as to going concern or scope of audit
and to the effect that such financial statements present fairly the consolidated
financial condition and results of operations of such Insurance Subsidiary as of
the date and for the period indicated in accordance with SAP applied on a basis
consistent with that of the preceding year or containing disclosure of the
effect on the financial position or results of operations of any change in the
application of accounting principles and practices during such year.

6.3       Other Business and Financial Information. Everest Group will deliver
to each Lender:

(a)       Concurrently with each delivery of the financial statements described
in Section 6.1, a Compliance Certificate in the form of Exhibit C with respect
to the period covered by the financial statements then being delivered, executed
by the chief financial officer, treasurer or comptroller of Everest Group,
together with a Covenant Compliance Worksheet reflecting the computation of the
respective financial covenants set forth in such Covenant Compliance Worksheet
as of the last day of the period covered by such financial statements;

(b)       Promptly upon filing with the relevant Insurance Regulatory Authority
and in any event within 120 days after the end of each fiscal year (or, in the
case of Everest Insurance Company of Canada, within fifteen (15) days of the
required filing date), beginning with the fiscal year ended December 31, 2007, a
copy of each Insurance Subsidiary’s “Statement of Actuarial Opinion” (or
equivalent information should the relevant Insurance Regulatory Authority not
require such a statement) as to the adequacy of such Insurance Subsidiary’s loss

 

60

 

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

reserves for such fiscal year, together with a copy of its management discussion
and analysis in connection therewith (but only if and to the extent required by
the applicable Insurance Regulatory Authority with regard to such Insurance
Subsidiary), each in the format prescribed by the applicable insurance laws of
such Insurance Subsidiary’s jurisdiction of domicile;

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

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

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

(ii)       the institution or threatened institution of any action, suit,
investigation or proceeding against or affecting Everest Group or any of its
Subsidiaries, including any such investigation or proceeding by any Insurance
Regulatory Authority or other Governmental Authority (other than routine
periodic inquiries, investigations or reviews), that would reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect, and any material development in any litigation or other proceeding
previously reported pursuant to Section 5.5 or this subsection (d);

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

 

61

 

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

Subsidiaries, where such action would have, or be reasonably likely to have, a
Material Adverse Effect;

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

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

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

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

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

(f)        As promptly as reasonably possible, such other information about the
business, condition (financial or otherwise), operations or properties of
Everest Group or any of its Subsidiaries (including any Plan and any information
required to be filed under ERISA) as the Administrative Agent or any Lender may
from time to time reasonably request.

6.4       Corporate Existence; Franchises; Maintenance of Properties. The
Borrowers will, and will cause each of their Material Subsidiaries to, (i)
except as expressly permitted otherwise by Section 8.1, maintain and preserve in
full force and effect its legal existence, (ii) obtain, maintain and preserve in
full force and effect all other rights, franchises, licenses, permits,
certifications, approvals and authorizations required by Governmental
Authorities and necessary to the ownership, occupation or use of its properties
or the conduct of its business, except to the extent the failure to do so would
not be reasonably likely to have a Material Adverse Effect, (iii) continue to
conduct and operate its businesses substantially as conducted and operated
during the present and preceding fiscal years and (iv) keep all material
properties in good working order and condition (normal wear and tear excepted)
and from time to time make all necessary repairs

 

62

 

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

to and renewals and replacements of such properties, except to the extent that
any of such properties are obsolete or are being replaced.

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

6.6       Payment of Obligations. The Borrowers will, and will cause each of
their respective Subsidiaries to, (i) pay all liabilities and obligations as and
when due (subject to any applicable subordination provisions), except to the
extent failure to do so would not be reasonably likely to have, a Material
Adverse Effect, and (ii) pay and discharge all taxes, assessments and
governmental charges or levies imposed upon it, upon its income or profits or
upon any of its properties, prior to the date on which penalties would attach
thereto, and all lawful claims that, if unpaid, might become a Lien upon any of
the properties of the Borrowers or any of their respective Subsidiaries;
provided, however, that no Borrower or any of their respective Subsidiaries
shall be required to pay any such tax, assessment, charge, levy or claim that is
being contested in good faith and by proper proceedings and as to which such
Borrower or such Subsidiary is maintaining adequate reserves with respect
thereto in accordance with GAAP.

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

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

6.9       PATRIOT Act Compliance. The Borrowers shall, and shall cause each of
their respective Subsidiaries to, provide, to the extent commercially
reasonable, such information and take such actions as are reasonably requested
by the Administrative Agent or any Lender in order

 

63

 

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

to assist the Administrative Agent and the Lenders in maintaining compliance
with the PATRIOT Act.

 

6.10

Collateral.  

(a)       Pursuant to the Security Documents and as collateral security for the
payment and performance of the Tranche 2 Obligations, each Borrower shall grant
and convey, or cause to be granted and conveyed, to the Administrative Agent for
its benefit and the benefit of the Tranche 2 Lenders, a Lien and security
interest in, to and upon the Collateral pledged by it under the Security
Documents, prior and superior to all other Liens except for permitted Liens in
favor of Custodians. Each Borrower shall cause the Collateral to be charged or
pledged and be made subject to the Security Documents (in form and substance
acceptable to the Administrative Agent) necessary for the perfection of the Lien
and security interest in, to and upon the Collateral and for the exercise by the
Administrative Agent and the Tranche 2 Lenders of their rights and remedies
hereunder and thereunder.

(b)       Each Borrower shall deliver or cause to be delivered to the
Administrative Agent a certificate executed by Everest Group, in the form of
Exhibit F or otherwise in a form reasonably satisfactory to the Administrative
Agent (which form may vary depending on the frequency of the delivery of such
certificate and subject to the review and verification by the Administrative
Agent), setting forth the aggregate Tranche 2 Letter of Credit Exposure of the
Borrowers and of such Borrower, the Collateral Value of the Collateral by
category and in the aggregate, and such other information as the Administrative
Agent may reasonably request (such certificate, a “Collateral Value Report”),
(A) on the Business Day immediately preceding the proposed date of issuance or
renewal of a Tranche 2 Letter of Credit under Section 3.2, (B) within ten (10)
Business Days after the end of each calendar month, (C) at and as of such other
times as the Administrative Agent may reasonably request in its sole discretion
and (D) at such other times as the Borrowers may desire.

6.11     Further Assurances. Each of the Borrowers will, and will cause each of
their respective Subsidiaries to, make, execute, endorse, acknowledge and
deliver any amendments, modifications or supplements hereto and restatements
hereof and any other agreements, instruments or documents, and take any and all
such other actions, as may from time to time be reasonably requested by the
Administrative Agent or the Required Lenders to perfect and maintain the
validity and priority of the Liens granted pursuant to the Security Documents
and to effect, confirm or further assure or protect and preserve the interests,
rights and remedies of the Administrative Agent and the Lenders under this
Agreement and the other Credit Documents.

ARTICLE VII

FINANCIAL COVENANTS

Each of the Borrowers covenants and agrees that, until the termination of the
Commitments, the termination or expiration of all Letters of Credit and the
payment in full in cash of all principal and interest with respect to the Loans
and all Reimbursement Obligations together with all fees, expenses and other
amounts then due and owing hereunder:

 

64

 

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

7.1       Maximum Consolidated Indebtedness to Total Capitalization. The ratio
of Consolidated Indebtedness to Total Capitalization as of the last day of any
fiscal quarter beginning with the fiscal quarter ending June 30, 2007 shall not
be greater than 0.35 to 1.0.

7.2       Consolidated Net Worth. Consolidated Net Worth shall be at all times
an amount not less than the Minimum Amount. For this purpose, the “Minimum
Amount” is an amount equal to the sum of (i) $3,575,380,900, plus (ii) 25% of
Consolidated Net Income for each fiscal quarter of Everest Group for which
financial statements are available, ending on or after January 1, 2007, for
which such Consolidated Net Income is positive, plus (iii) 25% of any increase
in Consolidated Net Worth during such period attributable to the issuance of
ordinary and preferred shares.

ARTICLE VIII

NEGATIVE COVENANTS

Each of the Borrowers covenants and agrees that, until the termination of the
Commitments, the termination or expiration of all Letters of Credit and the
payment in full in cash of all principal and interest with respect to the Loans
and all Reimbursement Obligations together with all fees, expenses and other
amounts then due and owing hereunder:

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

8.2       Indebtedness. The Borrowers will not, and will not permit or cause any
of their respective Subsidiaries to, create, incur, assume or suffer to exist
any Indebtedness other than:

 

(i)

Indebtedness created hereunder;

(ii)       Indebtedness incurred by the Borrowers; provided that any such
Indebtedness shall either rank pari passu in right of payment to the Obligations
or be subordinated in right of payment to the Obligations;

(iii)      Indebtedness incurred by Everest Holdings or any of its Subsidiaries
that is permitted under the Holdings Credit Agreement (without regard to any
amendment, restatement, modification or termination of the Holdings Credit
Agreement);

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

 

65

 

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

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

(vi)      loans and advances by any Borrower or any Subsidiary to any other
Subsidiary or by any Subsidiary to any Borrower;

 

(vii)

Indebtedness in connection with Permitted Liens;

(viii)    Indebtedness incurred by Everest Group or any Subsidiary of Everest
Group under Hedge Agreements entered into by such Person in the ordinary course
of its business; and

(ix)      Indebtedness incurred by a Subsidiary of a Borrower; provided that (i)
such Indebtedness is non-recourse to any Borrower and (ii) such Subsidiary does
not directly or indirectly own any equity interest in any Subsidiary Borrower.

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

(i)        Liens in favor of the Administrative Agent and the Tranche 2 Lenders
created by or otherwise existing under or in connection with this Agreement and
the other Credit Documents;

(ii)       Liens in existence on the Restatement Effective Date and set forth on
Schedule 8.2 and extensions, renewals and replacements thereof so long as the
outstanding principal amount of the Indebtedness secured by any such Lien is not
increased;

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

(iv)      Liens (other than any Lien imposed by ERISA, the creation or
incurrence of which would result in an Event of Default under Section 9.1(i))
incurred in the ordinary course of business in connection with workers’
compensation, unemployment insurance or other forms of governmental insurance or
benefits, or to secure the performance of letters of credit, bids, tenders,
statutory obligations, surety and appeal

 

66

 

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

bonds, leases, government contracts and other similar obligations (other than
obligations for borrowed money) entered into in the ordinary course of business;

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

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

(vii)     Liens upon cash and United States government and agency securities and
other investment assets of Everest Group and its Subsidiaries securing (A)
obligations incurred in connection with reverse repurchase transactions and
other similar investment management transactions, (B) obligations in respect of
trust or other security arrangements formed to secure reinsurance transactions
of such types and in such amounts as are customary for companies similar to
Everest Group in size and lines of business and that are entered into by Everest
Group and its Subsidiaries in the ordinary course of business and (C)
obligations arising under Hedge Agreements entered into by any Borrower in the
ordinary course of its business;

(viii)    Purchase money Liens upon real or personal property used by Everest
Group or any of its Subsidiaries in the ordinary course of its business,
securing Indebtedness incurred solely to pay all or a portion of the purchase
price thereof (including in connection with capital leases, and including
mortgages or deeds of trust upon real property and improvements thereon);
provided that any such Lien (A) shall attach to such property concurrently with
or within ninety (90) days after the acquisition thereof by Everest Group or
such Subsidiary, (B) shall not exceed the lesser of (y) the fair market value of
such property or (z) the cost thereof to Everest Group or such Subsidiary and
(C) shall not encumber any other property of Everest Group or any of its
Subsidiaries;

(ix)      Any attachment or judgment Lien not constituting an Event of Default
under Section 9.1(h) that is being contested in good faith by appropriate
proceedings and for which adequate reserves have been established in accordance
with GAAP;

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

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

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

 

67

 

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

and Liens of Custodians on the Custodial Accounts permitted by the Account
Control Agreements;

(xiii)    Liens on marketable securities and cash or cash equivalents securing
letter of credit facilities in an aggregate amount not to exceed $500,000,000 at
any time;

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

(xv)     Liens on property of a Person existing at the time such Person is
merged into or consolidated with Everest Group or any of its Subsidiaries or
becomes a Subsidiary of Everest Group, provided that such Liens were not created
in contemplation of such merger, consolidation or acquisition and do not extend
to any assets other than those of the Person so merged into or consolidated with
Everest Group or such Subsidiary or acquired by Everest Group or such
Subsidiary, and extensions, renewals and replacements thereof so long as the
outstanding principal amount of the Indebtedness secured by any such Lien is not
increased;

(xvi)    Liens existing on any property acquired by Everest Group or any of its
Subsidiaries at the time of its acquisition (other than any such Liens created
in contemplation of such acquisition) or extensions, renewals or replacements of
any of the foregoing for the same or a lesser amount, provided, however, that no
such Lien shall extend to or cover any properties of any character other than
the property being acquired, and no such extension, renewal or replacement shall
extend to or cover any properties not theretofore subject to the Lien being
extended, renewed or replaced; and

(xvii)   Liens not otherwise permitted by this Section 8.3 securing Indebtedness
in an aggregate principal amount not at any time exceeding 5% of Consolidated
Net Worth.

8.4       Disposition of Assets(i). The Borrowers will not, and will not permit
or cause any of their respective Subsidiaries to, sell, assign, lease, convey,
transfer or otherwise dispose of (whether in one or a series of transactions)
any assets consisting of equity interests in any Subsidiary, or grant any option
or other right to purchase, lease or otherwise acquire any such assets.

8.5       Transactions with Affiliates. The Borrowers will not, and will not
permit or cause any of their respective Subsidiaries to, enter into any
transaction (including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service) with any officer,
director, stockholder or other Affiliate of such Borrower or such Subsidiary,
except in the ordinary course of its business and upon fair and reasonable terms
that are no less favorable to it than it would obtain in a comparable arm’s
length transaction with a Person other than an Affiliate of such Borrower or
such Subsidiary; provided, however, that nothing contained in this Section 8.5
shall prohibit:

(i)        transactions between and among Everest Group and its Wholly Owned
Subsidiaries or between and among Wholly Owned Subsidiaries of Everest Group,

 

68

 

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

provided, however, that such transactions are made in the ordinary course of its
business and upon fair and reasonable terms or as otherwise required by law;

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

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

8.6       Restricted Payments. The Borrowers will not, and will not permit or
cause any of their respective Subsidiaries to, directly or indirectly, declare
or make any dividend payment, or make any other distribution of cash, property
or assets, in respect of any of its Capital Stock or any warrants, rights or
options to acquire its Capital Stock, or purchase, redeem, retire or otherwise
acquire for value any shares of its Capital Stock or any warrants, rights or
options to acquire its Capital Stock, or set aside funds for any of the
foregoing, except that (i) any Subsidiary may declare and pay dividends on or
make distributions to a Borrower or to a Wholly Owned Subsidiary, (ii) any
Subsidiary that is not a Wholly Owned Subsidiary may declare and pay dividends
on or make distributions to a Person that is not a Borrower or a Wholly Owned
Subsidiary so long as no Default or Event of Default has occurred and is
continuing before or after giving effect to the declaration or payment of such
dividends or distributions, (iii) Everest Group may declare and pay dividends
on, make distributions in respect of or repurchase, redeem, retire or otherwise
acquire its Capital Stock so long as no Default or Event of Default has occurred
and is continuing before or after giving effect to the declaration or payment of
such dividends, distributions, repurchases or other acquisitions and (iv)
Everest Group and its Subsidiaries may declare and pay dividends in respect of
any Hybrid Securities or preferred stock if, at the time of and after giving
effect to any such payment, no Default or Event of Default under Section 9.1(a),
clause (i) of Section 9.1(e), Section 9.1(f) or Section 9.1(g) shall have
occurred and be continuing.

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

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

8.9       Ratings. The Borrowers will not permit Everest Bermuda to fail to
maintain a financial strength rating by either A.M. Best Company or S&P; and not
permit or cause the

 

69

 

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

financial strength rating of Everest Bermuda by A.M. Best Company (to the extent
such rating is required to be maintained) to be lower than “A-” or such rating
by Standard & Poor’s (to the extent such rating is required to be maintained) to
be less than “A.”

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

8.11     Limitations on Certain Restrictions. The Borrowers will not, and will
not permit or cause any of their respective Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
restriction or encumbrance on the ability of any Subsidiary of such Borrower to
make any dividend payments or other distributions in respect of its Capital
Stock, to repay Indebtedness owed to such Borrower or any other Subsidiary, to
make loans or advances to such Borrower or any other Subsidiary, or to transfer
any of its assets or properties to such Borrower or any other Subsidiary, in
each case other than such restrictions or encumbrances existing under or by
reason of (a) the Credit Documents, (b) applicable Requirements of Law, (c) the
Holdings Credit Agreement, (d) customary provisions restricting subletting or
assignment of any lease governing any leasehold interest of Everest Group or any
of its Subsidiaries, (e) customary provisions restricting assignment of any
licensing agreement (in which Everest Group or any of its Subsidiaries is the
licensee) or other contract (including leases) entered into by Everest Group or
any of its Subsidiaries in the ordinary course of business, (f) restrictions on
the transfer of any asset permitted by Section 8.4 pending the close of the sale
of such asset, (g) restrictions on the transfer of any asset subject to a Lien
permitted by Section 8.3, (h) agreements entered into by an Insurance Subsidiary
with an Insurance Regulatory Authority, (i) customary provisions in partnership
agreements, limited liability company organizational governance documents, joint
venture agreements and other similar agreements entered into in the ordinary
course of business that restrict the transfer of ownership interests in such
partnership, limited liability company, joint venture or similar Person, (j)
restrictions on cash or other deposits or net worth imposed by customers under
contracts entered into in the ordinary course of business and not otherwise
prohibited by this Agreement and (k) pursuant to any agreement or instrument
relating to any Indebtedness of a Subsidiary permitted under Section 8.2, (A) if
the encumbrances and restrictions contained in any such agreement or instrument
taken as a whole are not materially less favorable to the Lenders than the
encumbrances and restrictions contained in the Holdings Credit Agreement as of
the date hereof or (B) if such encumbrance or restriction is not materially more
disadvantageous to the Lenders than is customary in comparable financings and
(1) such encumbrance or restriction will not have a material adverse effect on
the ability of the Borrowers to make payments of the Obligations as and when due
and (2) do not restrict the granting of any Lien or the depositing of Collateral
or Cash Collateral contemplated or required hereunder or under any other Credit
Document.

8.12     Collateral. Each of the Borrowers will not permit (i) the aggregate
Tranche 2 Letter of Credit Exposure to exceed the lesser of (y) the aggregate
Tranche 2 Commitments and (z) the aggregate Collateral Value at such time, (ii)
the Tranche 2 Letter of Credit Exposure pertaining to it to exceed the
Collateral Value in its Custodial Account, (iii) the rating of any security
included within the calculation of Collateral Value to be less than the minimum
rating assigned to such security on Schedule 1.1(b), or (iv) other than U.S.
Government Securities, no

 

70

 

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

single issue or issuer shall comprise greater than 10% of the Collateral at any
time; provided that, but subject to Section 9.2(c), if (A) the aggregate Tranche
2 Letter of Credit Exposure at any time shall exceed the lesser of (y) the
aggregate Tranche 2 Commitments and (z) the aggregate Collateral Value at such
time or (B) the Tranche 2 Letter of Credit Exposure pertaining to any Borrower
at any time shall exceed the Collateral Value in such Borrower’s Custodial
Account at such time, the Borrowers shall have three (3) Business Days to
deposit additional Collateral (or cash collateral as set forth in Section 3.8 in
the event the Tranche 2 Letter of Credit Exposure exceeds the Tranche 2
Commitments) having an aggregate Collateral Value at least equal to such excess
into its Custodial Account. The Borrowers may from time to time add Collateral
to or sell, deliver, transfer or otherwise withdraw Collateral from its
Custodial Account (including, without limitation, by trading of securities), but
only so long as (x) immediately after giving effect thereto no Default or Event
of Default would exist and (y) with respect to the addition or termination (or
removal as Collateral) of Custodial Accounts, the Borrowers comply with any
applicable restrictions and conditions set forth in the Security Documents. At
any time when (i) a Collateral Value Report reveals that the Collateral Value of
the Collateral in a Borrower’s Custodial Account exceeds the Tranche 2 Letter of
Credit Exposure pertaining to such Borrower and (ii) no Default or Event of
Default has occurred and is continuing, such Borrower may request by written
notice to the Administrative Agent to release Collateral having a Collateral
Value equal to such excess, and the Administrative Agent shall release and
direct the Custodian to release such excess Collateral to such Borrower or upon
its order.

8.13     Private Act. No Borrower will become subject to a Private Act which ,
in the reasonable determination of the Administrative Agent, would be adverse in
any material respect to the rights or interests of the Lenders.

ARTICLE IX

EVENTS OF DEFAULT

9.1       Events of Default. The occurrence of any one or more of the following
events shall constitute an “Event of Default”:

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

(b)       Any Borrower shall fail to, or fail to cause its Subsidiaries to,
observe, perform or comply with any condition, covenant or agreement contained
in any of Sections 2.14, 6.3(d)(i) or 6.4(i), Article VII, Sections 8.1 through
8.4, inclusive, and Sections 8.6, 8.7, 8.9, 8.10, 8.11, 8.12 or 8.13; or

(c)       Any Borrower shall fail to observe, perform or comply with any
condition, covenant or agreement contained in this Agreement or any of the other
Credit Documents other than those enumerated in subsections (a) and (b) above,
and such failure shall continue unremedied for any grace period specifically
applicable thereto or, if no such grace period is

 

71

 

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

applicable, for a period of thirty (30) days after the earlier of (y) the date
on which a Responsible Officer of any Borrower acquires knowledge thereof and
(z) the date on which written notice thereof is delivered by the Administrative
Agent or any Lender to the Borrowers; or

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

(e)       Everest Group or any of its Subsidiaries shall (i) fail to pay when
due (whether by scheduled maturity, acceleration or otherwise and after giving
effect to any applicable grace period) (y) any principal of or interest on any
Indebtedness (other than the Indebtedness incurred pursuant to this Agreement)
having an aggregate principal amount of at least $50,000,000 or its equivalent
in any other currency or (z) any termination or other payment under any Hedge
Agreement having a net termination obligation of at least $50,000,000 or (ii)
fail to observe, perform or comply with any condition, covenant or agreement
contained in any agreement or instrument evidencing or relating to any such
Indebtedness, or any other event shall occur or condition exist in respect
thereof, and the effect of such failure, event or condition is to cause, or
permit the holder or holders of such Indebtedness (or a trustee or agent on its
or their behalf) to cause (with the giving of notice, lapse of time, or both),
such Indebtedness to become due, or to be prepaid, redeemed, purchased or
defeased, prior to its stated maturity; or

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

(g)       Any involuntary petition or case shall be filed or commenced against
Everest Group or any of its Material Subsidiaries, seeking liquidation, winding
up, reorganization, dissolution, arrangement, readjustment of debts, the
appointment of a custodian, trustee, receiver or similar official for it or all
or a substantial part of its properties or any other relief under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, and such petition or case shall continue undismissed and
unstayed for a period of sixty (60) days; or an order, judgment or decree
approving or ordering any of the foregoing shall be entered in any such
proceeding; or

(h)       Any one or more money judgments, writs or warrants of attachment,
executions or similar processes involving an aggregate amount (exclusive of
amounts fully bonded or covered by insurance as to which the surety or insurer,
as the case may be, has acknowledged its

 

72

 

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

liability in writing) in excess of $50,000,000 (or its equivalent in any other
currency) shall be entered or filed against Everest Group or any of its
Subsidiaries or any of their respective properties, and (i) the same shall not
be dismissed, stayed or discharged within sixty (60) days or is not otherwise
being appropriately contested in good faith and in a manner reasonably
satisfactory to all of the Lenders, or (ii) the same shall not be dismissed,
stayed or discharged within five (5) days prior to any proposed sale of assets
of Everest Group or any such Subsidiary pursuant thereto, or (iii) any action
shall be legally taken by a judgment creditor to levy upon assets of Everest
Group or any of its Subsidiaries to enforce the same; or

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

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

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

(l)        At any time, Everest Bermuda or Everest International shall cease to
be a Wholly Owned Subsidiary of Everest Group; or

(m)      Any Security Document to which any Borrower is now or hereafter a party
shall for any reason cease to be in full force and effect or cease to be
effective to give the Administrative Agent a valid and perfected security
interest in and Lien upon the Collateral purported to be covered thereby,
subject to no Liens other than Liens of any Custodian permitted under Section
8.3, in each case unless any such cessation occurs in accordance with the terms
thereof or is due to any act or failure to act on the part of the Administrative
Agent or any Lender, or any Borrower shall assert any of the foregoing; or the
obligations of Everest Group under Article XII shall for any reason cease to be
in full force and effect, or Everest Group or any Person acting on its behalf
shall deny or disaffirm its obligations set forth thereunder; or

(n)       Any of the following shall occur: (i) any Person or group of Persons
acting in concert as a partnership or other group, shall, as a result of a
tender or exchange offer, open market purchases, privately negotiated purchases
or otherwise, have become, after the date hereof, the “beneficial owner” (within
the meaning of such term under Rule 13d-3 under the Exchange Act) of securities
of Everest Group representing 30% or more of the combined voting power of the
then outstanding securities of Everest Group ordinarily (and apart from rights
accruing under special circumstances) having the right to vote in the election
of directors; or (ii) the Board of Directors of Everest Group shall cease to
consist of a majority of the individuals

 

73

 

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

who constituted the Board of Directors as of the date hereof or who shall have
become a member thereof subsequent to the date hereof after having been
nominated, or otherwise approved in writing, by at least a majority of
individuals who constituted the Board of Directors of Everest Group as of the
date hereof (or their replacements approved as herein required); or

(o)       Other than as a result of the appointment of a successor Custodian,
any Custodial Agreement with respect to any Custodial Account that holds any
Collateral is amended or modified in any manner that is inconsistent with the
terms of the Security Documents or that otherwise could reasonably be expected
to have a Material Adverse Effect, or is terminated, or ceases to be in full
force and effect or is declared by a court of competent jurisdiction to be null
and void, invalid or unenforceable in any material respect, or any party thereto
denies that it has any further liability or obligation thereunder.

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

(a)       Declare the Commitments and the Issuing Lender’s obligation to issue
Letters of Credit to be terminated, whereupon the same shall terminate (provided
that, upon the occurrence of an Event of Default pursuant to Section 9.1(f),
Section 9.1(g) or Section 9.1(j), the Commitments and the Issuing Lender’s
obligation to issue Letters of Credit shall automatically be terminated);

(b)       Declare all or any part of the outstanding principal amount of the
Loans to be immediately due and payable, whereupon the principal amount so
declared to be immediately due and payable, together with all interest accrued
thereon and all other amounts payable under this Agreement, the Notes and the
other Credit Documents, shall become immediately due and payable without
presentment, demand, protest, notice of intent to accelerate or other notice or
legal process of any kind, all of which are hereby knowingly and expressly
waived by the Borrowers (provided that, upon the occurrence of an Event of
Default pursuant to Section 9.1(f), Section 9.1(g) or Section 9.1(j), all of the
outstanding principal amount of the Loans and all other amounts described in
this subsection (b) shall automatically become immediately due and payable
without presentment, demand, protest, notice of intent to accelerate or other
notice or legal process of any kind, all of which are hereby knowingly and
expressly waived by the Borrowers);

(c)       Direct the Borrowers to deposit (and the Borrowers hereby agree,
forthwith upon receipt of notice of such direction from the Administrative
Agent, to deposit) with the Administrative Agent from time to time such
additional amount of cash as is equal to the aggregate Stated Amount of all
Letters of Credit then outstanding (whether or not any beneficiary under any
Letter of Credit shall have drawn or be entitled at such time to draw
thereunder), such amount to be held by the Administrative Agent in the Cash
Collateral Account as security for the Letter of Credit Exposure as described in
Section 3.8; and

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

 

74

 

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

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

ARTICLE X

THE ADMINISTRATIVE AGENT

10.1     Appointment. Subject to Section 10.9, each Lender (for purposes of this
Article, references to the Lenders shall also mean the Issuing Lender) hereby
irrevocably appoints and authorizes Wachovia to act as Administrative Agent
hereunder and under the other Credit Documents and to take such actions as agent
on its behalf hereunder and under the other Credit Documents, and to exercise
such powers and to perform such duties, as are specifically delegated to the
Administrative Agent by the terms hereof or thereof, together with such other
powers and duties as are reasonably incidental thereto.

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

 

75

 

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

Administrative Agent shall not be under any duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Credit Document unless it shall be requested in writing to do so by
the Required Lenders (or, where a higher percentage of the Lenders is expressly
required hereunder, such Lenders).

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

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

10.5     Non-Reliance on Administrative Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representation or warranty to it and that no act by the Administrative Agent
or any such Person hereinafter taken, including any

76

 

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

review of the affairs of Everest Group and its Subsidiaries, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Lender. Each Lender represents to the Administrative Agent that (i) it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, properties, financial and other condition and creditworthiness of
Everest Group and its Subsidiaries and made its own decision to enter into this
Agreement and extend credit to the Borrowers hereunder, and (ii) it will,
independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action hereunder and under the other Credit Documents
and to make such investigation as it deems necessary to inform itself as to the
business, prospects, operations, properties, financial and other condition and
creditworthiness of Everest Group and its Subsidiaries. Except as expressly
provided in this Agreement and the other Credit Documents, the Administrative
Agent shall have no duty or responsibility, either initially or on a continuing
basis, to provide any Lender with any credit or other information concerning the
business, prospects, operations, properties, financial or other condition or
creditworthiness of Everest Group, its Subsidiaries or any other Person that may
at any time come into the possession of the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.

10.6     Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Administrative Agent shall have received written notice from any Borrower or
a Lender referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default.” In the event that
the Administrative Agent receives such a notice, the Administrative Agent will
give notice thereof to the Lenders as soon as reasonably practicable; provided,
however, that if any such notice has also been furnished to the Lenders, the
Administrative Agent shall have no obligation to notify the Lenders with respect
thereto. The Administrative Agent shall (subject to Sections 10.4 and 11.6) take
such action with respect to such Default or Event of Default as shall reasonably
be directed by the Required Lenders; provided that, unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders except to the extent that
this Agreement expressly requires that such action be taken, or not be taken,
only with the consent or upon the authorization of the Required Lenders or all
of the Lenders.

10.7     Indemnification. To the extent the Administrative Agent is not
reimbursed by or on behalf of the Borrowers, and without limiting the obligation
of the Borrowers to do so, the Lenders agree (i) to indemnify the Administrative
Agent and its officers, directors, employees, agents, attorneys-in-fact and
Affiliates, ratably in proportion to their respective percentages as used in
determining the Required Lenders as of the date of determination, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including, without limitation,
reasonable attorneys’ fees and expenses) or disbursements of any kind or nature
whatsoever that may at any time (including, without limitation, at any time
following the repayment in full of the Loans and the termination of the

 

77

 

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

Commitments) be imposed on, incurred by or asserted against the Administrative
Agent in its capacity as such in any way relating to or arising out of this
Agreement or any other Credit Document or any documents contemplated by or
referred to herein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Administrative Agent under or in connection with
any of the foregoing, and (ii) to reimburse the Administrative Agent upon
demand, ratably in proportion to their respective percentages as used in
determining the Required Lenders as of the date of determination, for any
expenses incurred by the Administrative Agent in connection with the
preparation, negotiation, execution, delivery, administration, amendment,
modification, waiver or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any of the other Credit Documents
(including, without limitation, reasonable attorneys’ fees and expenses and
compensation of agents and employees paid for services rendered on behalf of the
Lenders); provided, however, that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements to the extent resulting from the gross
negligence or willful misconduct of the party to be indemnified.

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

10.9     Successor Agent. The Administrative Agent may resign at any time by
giving thirty (30) days’ prior written notice to the Borrowers and the Lenders.
Upon any such notice of resignation, the Required Lenders will, with the prior
written consent of the Borrowers (which consent shall not be unreasonably
withheld), appoint from among the Lenders a successor to the Administrative
Agent (provided that the Borrowers’ consent shall not be required in the event
an Event of Default shall have occurred and be continuing). If no successor to
the Administrative Agent shall have been so appointed by the Required Lenders
and shall have accepted such appointment within such thirty-day period, then the
retiring Administrative Agent may, on behalf of the Lenders and after consulting
with the Lenders and the Borrowers, appoint a successor Administrative Agent
from among the Lenders. Upon the acceptance of any appointment as Administrative
Agent by a successor Administrative Agent, such successor Administrative Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Credit Documents. After any retiring
Administrative Agent’s resignation as Administrative Agent, the provisions of
this Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it

 

78

 

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

was Administrative Agent. If no successor to the Administrative Agent has
accepted appointment as Administrative Agent by the thirtieth (30th) day
following a retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become
effective, and the Lenders shall thereafter perform all of the duties of the
Administrative Agent hereunder and under the other Credit Documents until such
time, if any, as the Required Lenders appoint a successor Administrative Agent
as provided for hereinabove.

 

10.10

Collateral and Guaranty Matters.

(a)       The Administrative Agent is hereby authorized on behalf of the
Lenders, without the necessity of any notice to or further consent from the
Lenders, from time to time (but without any obligation) to take any action with
respect to the Collateral and the Security Documents that may be deemed by the
Administrative Agent in its discretion to be necessary or advisable to perfect
and maintain perfected the Liens upon the Collateral granted pursuant to the
Security Documents.

(b)       The Lenders hereby authorize the Administrative Agent, at its option
and in its discretion, (i) to release any Lien granted to or held by the
Administrative Agent upon any Collateral (A) upon termination of the
Commitments, termination, expiration or cash collateralization of all
outstanding Tranche 2 Letters of Credit and payment in full of all of the
Tranche 2 Obligations then due and payable, (B) constituting property sold or to
be sold or disposed of as part of or in connection with any disposition
expressly permitted hereunder or under any other Credit Document or to which the
Required Lenders have consented in writing or (C) otherwise pursuant to and in
accordance with the provisions of any applicable Credit Document, and (ii) to
subordinate any Lien on any property granted to or held by the Administrative
Agent under any Credit Document to the holder of any Lien on such property that
is permitted by Section 8.3(viii). Upon request by the Administrative Agent at
any time, the Lenders will confirm in writing the Administrative Agent’s
authority to release or subordinate its interest in particular types or items of
property, pursuant to this Section 10.10(b).

10.11   Issuing Lender. The provisions of this Article X (other than
Section 10.8) shall apply to the Issuing Lender mutatis mutandis to the same
extent as such provisions apply to the Administrative Agent.

10.12   No Other Duties, Etc. Notwithstanding any other provision of this
Agreement or any of the other Credit Documents, any Lenders identified on the
cover page of this Agreement or elsewhere herein as a “Documentation Agent” or
in any similar capacity are named as such for recognition purposes only, and in
their respective capacities as such shall have no powers, rights, duties,
responsibilities or liabilities with respect to this Agreement and the other
Credit Documents and the transactions contemplated hereby and thereby.

 

79

 

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

ARTICLE XI

MISCELLANEOUS

11.1     Fees and Expenses. The Borrowers shall pay (i) all reasonable and
documented out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates (including the reasonable and documented fees, charges and
disbursements of counsel for the Administrative Agent), in connection with the
syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Credit 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 reasonable out-of-pocket
expenses incurred by the Issuing Lender in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, any Lender or the Issuing Lender (including the fees,
charges and disbursements of any counsel for the Administrative Agent, any
Lender or the Issuing Lender), in connection with the enforcement or protection
of its rights (A) in connection with this Agreement and the other Credit
Documents, including its rights under this Section, or (B) in connection with
the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

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

 

80

 

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

paid or reimbursed by the Borrowers, as and when incurred and upon demand.
Borrowers also agree not to assert any claim for special, indirect,
consequential or punitive damages against the Administrative Agent, the Issuing
Lender, any Lender, any of their Affiliates, or any of their respective
directors, officers, employees, attorneys and agents, on any theory of liability
arising out of or otherwise relating to the Notes, this Agreement, any other
Credit Document any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Loans or Letters of Credit.

11.3     Governing Law; Consent to Jurisdiction. THIS AGREEMENT AND THE OTHER
CREDIT DOCUMENTS SHALL (EXCEPT AS MAY BE EXPRESSLY OTHERWISE PROVIDED IN ANY
CREDIT DOCUMENT) BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW, BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF
LAW RULES); PROVIDED THAT EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT OR APPLICATION THEREFOR OR, IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE
INTERNATIONAL STANDBY PRACTICES OF THE INTERNATIONAL CHAMBER OF COMMERCE, AS IN
EFFECT FROM TIME TO TIME (THE “ISP ”), AND, AS TO MATTERS NOT GOVERNED BY THE
ISP, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING ALL OTHER CHOICE OF LAW AND
CONFLICTS OF LAW RULES). NOTWITHSTANDING THE FOREGOING CHOICE OF LAW, EACH
BORROWER HEREBY CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE COURT
WITHIN MECKLENBURG COUNTY, NORTH CAROLINA OR NEW YORK COUNTY, NEW YORK OR ANY
FEDERAL COURT LOCATED WITHIN THE WESTERN DISTRICT OF THE STATE OF NORTH CAROLINA
OR THE SOUTHERN DISTRICT OF THE STATE OF NEW YORK FOR ANY PROCEEDING INSTITUTED
HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS, OR ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, OR ANY
PROCEEDING TO WHICH THE ADMINISTRATIVE AGENT, THE ARRANGER, THE ISSUING LENDER
OR ANY LENDER OR ANY BORROWER IS A PARTY, INCLUDING ANY ACTIONS BASED UPON,
ARISING OUT OF, OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE
ARRANGER, THE ISSUING LENDER OR ANY LENDER OR ANY BORROWER. EACH BORROWER
IRREVOCABLY AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF APPEAL) BY ANY
JUDGMENT RENDERED OR RELIEF GRANTED THEREBY AND FURTHER WAIVES ANY OBJECTION
THAT IT MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE OR FORUM NON
CONVENIENS TO THE CONDUCT OF ANY SUCH PROCEEDING. EACH BORROWER CONSENTS THAT
ALL SERVICE OF PROCESS BE MADE BY REGISTERED OR CERTIFIED MAIL DIRECTED TO IT AT
ITS ADDRESS SET FORTH HEREINBELOW, AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED UPON THE EARLIER OF

 

81

 

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

ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE UNITED STATES
MAILS, PROPER POSTAGE PREPAID AND PROPERLY ADDRESSED. NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, THE ARRANGER, THE ISSUING
LENDER OR ANY LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST ANY BORROWER IN
THE COURTS OF ANY OTHER JURISDICTION.

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

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

(i)        if to the Borrowers, the Administrative Agent, or the Issuing Lender,
to it at the address (or telecopier number) specified for such person on
Schedule 1.1(a); and

(ii)       if to any Lender, to it at its address (or telecopier number) set
forth in its Administrative Questionnaire.

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

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

 

82

 

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

(a)       unless agreed to by each Lender directly affected thereby, (i) reduce
or forgive the principal amount of any Loan or Reimbursement Obligation, reduce
the rate of or forgive any interest thereon, or reduce or forgive any fees or
other Obligations (other than fees payable to the Administrative Agent, the
Arranger or the Issuing Lender for their own account), (ii) except as
contemplated by Section 2.21, extend the final scheduled maturity date or any
other scheduled date for the payment of any principal of or interest on any Loan
(including any scheduled date for the mandatory reduction or termination of any
Commitments), extend the time of payment of any Reimbursement Obligation or any
interest thereon, extend the expiry date of any Letter of Credit beyond the
Tranche 1 Maturity Date or Tranche 2 Maturity Date, as the case may be, or
extend the time of payment of any fees hereunder (other than fees payable to the
Administrative Agent, the Arranger or the Issuing Lender for its own account);
or (iii) increase any Commitment of any such Lender over the amount thereof in
effect or extend the maturity thereof (it being understood that a waiver of any
condition precedent set forth in Section 4.2 or of any Default or Event of
Default or mandatory reduction in the Commitments, if agreed to by the Required
Lenders, Required Tranche 1 Lenders, Required Tranche 2 Lenders or all Lenders
(as may be required hereunder with respect to such waiver), shall not constitute
such an increase);

(b)       unless agreed to by all of the Lenders, (i) release Everest Group from
its obligations under Article XII (other than as may be otherwise specifically
provided in this Agreement or in any other Credit Document), (ii) reduce the
percentage of the aggregate Commitments or of the aggregate unpaid principal
amount of the Loans, or the number or percentage of Lenders, that shall be
required for the Lenders or any of them to take or approve, or direct the
Administrative Agent to take, any action hereunder or under any other Credit
Document (including as set forth in the definition of “Required Lenders”), (iii)
change any other provision of this Agreement or any of the other Credit
Documents requiring, by its terms, the consent or approval of all the Lenders
for such amendment, modification, waiver, discharge, termination or consent, or
(iv) change any provision of Section 2.15 or this Section 11.6;

(c)       unless agreed to by all of the Tranche 1 Lenders, change the
percentage set forth in the definition of “Required Tranche 1 Lenders” (it being
understood that no consent of any other Lender or the Administrative Agent is
required);

(d)       unless agreed to by all of the Tranche 2 Lenders, change the
percentage set forth in the definition of “Required Tranche 2 Lenders” (it being
understood that no consent of any other Lender or the Administrative Agent is
required);

(e)       unless agreed to by the Required Tranche 1 Lenders, (i) except for any
such changes to which Section 11.6(a) applies, change any provision of Article
III, or (ii) amend, modify or waive any condition precedent to any Borrowing of
Loans or issuance of a Tranche 1 Letter of Credit set forth in Section 4.2
(including in connection with any waiver of an existing Default or Event of
Default);

(f)        unless agreed to by the Required Tranche 2 Lenders, (i) except for
any such changes to which Section 11.6(a) applies, change any provision of
Article III, (ii) amend or modify the definition of “Collateral Value” or
Schedule 1.1(b), or (iii) amend, modify or waive any condition precedent to any
issuance of a Tranche 2 Letter of Credit set forth in Section 4.2 (including in
connection with any waiver of an existing Default or Event of Default);

 

83

 

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

(g)       unless agreed to by all of the Tranche 2 Lenders (except as may be
otherwise specifically provided in this Agreement or in any other Credit
Document), release all or substantially all of the Collateral (except as may be
otherwise specifically provided in this Agreement or in any other Credit
Document); and

(h)       unless agreed to by the Issuing Lender or the Administrative Agent in
addition to the Lenders required as provided hereinabove to take such action,
affect the respective rights or obligations of the Issuing Lender or the
Administrative Agent, as applicable, hereunder or under any of the other Credit
Documents; and

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

 

11.7

Assignments, Participations.

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

 

84

 

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

Acceptance) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of such assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto). Unless otherwise waived by the
Borrower, each Assignee which was not previously a Lender hereunder and which is
a Foreign Lender shall, within three Business Days of becoming a party hereto,
deliver the forms required by Section 2.17(d).

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

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

(d)       Each Lender may, without the consent of the Borrowers, the
Administrative Agent or any other Lender, sell to one or more other Persons
(each, a “Participant”) participations in any portion comprising less than all
of its rights and obligations under this Agreement (including, without
limitation, a portion of its Commitment, the outstanding Loans made by it, and
the Note or Notes held by it); provided, however, that (i) such Lender’s
obligations under this Agreement shall remain unchanged and such Lender shall
remain solely responsible for the performance of such obligations, (ii) the
Borrowers, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement, and no Lender shall permit any Participant to
have any voting rights or any right to control the vote of such Lender with
respect to any amendment, modification, waiver, consent or other action
hereunder or under any other Credit Document (except as to actions that would
(x) reduce or forgive the principal amount of any Loan or any Reimbursement
Obligation, reduce the rate of or forgive any interest thereon, or reduce or
forgive any fees or other Obligations, (y) extend the maturity date or any other
date fixed for the payment of any principal of or interest on any Loan or any
Reimbursement

 

85

 

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

Obligation, any fees or any other Obligations, or (z) increase or extend any
Commitment of any Lender), and (iii) no Participant shall have any rights under
this Agreement or any of the other Credit Documents, each Participant’s rights
against the granting Lender in respect of any participation to be those set
forth in the participation agreement, and all amounts payable by the Borrowers
hereunder shall be determined as if such Lender had not granted such
participation. Notwithstanding the foregoing, each Participant shall have the
rights of a Lender for purposes of Sections 2.16(a), 2.16(b), 2.17, 2.18, and
9.3, and shall be entitled to the benefits thereto, to the extent that the
Lender granting such participation would be entitled to such benefits if the
participation had not been made; provided that (i) no Participant shall be
entitled to receive any greater amount pursuant to any of such Sections than the
Lender granting such participation would have been entitled to receive in
respect of the amount of the participation made by such Lender to such
Participant had such participation not been made and (ii) each such Participant
agrees to be subject to Section 2.15(c) as though it were a Lender.

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

(f)        Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 11.7, disclose to
the Assignee or Participant or proposed Assignee or Participant any information
relating to the Borrowers and their respective Subsidiaries furnished to it by
or on behalf of any other party hereto; provided that such Assignee or
Participant or proposed Assignee or Participant agrees in writing to keep such
information confidential to the same extent required of the Lenders under
Section 11.13.

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

11.9     Successors and Assigns. This Agreement shall be binding upon, inure to
the benefit of and be enforceable by the respective successors and assigns of
the parties hereto, and all references herein to any party shall be deemed to
include its successors and assigns; provided, however, that (i) the Borrowers
shall not sell, assign or transfer any of its rights, interests, duties or
obligations under this Agreement or any other Credit Document without the prior
written

 

86

 

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

consent of all of the Lenders and (ii) any Assignees and Participants shall have
such rights and obligations with respect to this Agreement and the other Credit
Documents as are provided for under and pursuant to the provisions of
Section 11.7.

11.10   Survival. All representations, warranties and agreements made by or on
behalf of the Borrowers or any of their respective Subsidiaries in this
Agreement and in the other Credit Documents shall survive the execution and
delivery hereof or thereof and the making and repayment of the Loans and the
issuance and repayment of the Letters of Credit. In addition, notwithstanding
anything herein or under applicable law to the contrary, the provisions of this
Agreement and the other Credit Documents relating to indemnification or payment
of fees, costs and expenses, including, without limitation, the provisions of
Sections 2.16(a), 2.16(b), 2.17, 2.18, 10.7, 11.1 and 11.2, shall survive the
payment in full of the Loans, the termination of the Commitments and all Letters
of Credit, and any termination of this Agreement or any of the other Credit
Documents.

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

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

11.13   Confidentiality. Each of the Administrative Agent and each Lender agrees
to keep confidential, pursuant to its customary procedures for handling
confidential information of a similar nature and in accordance with safe and
sound banking practices, all nonpublic information provided to it by or on
behalf of Everest Group or any of its Subsidiaries in connection with this
Agreement or any other Credit Document; provided, however, that each of the
Administrative Agent and each Lender may disclose such information (i) to its
affiliates, directors, employees and agents and to its auditors, counsel and
other professional advisors (provided such persons are informed of the
confidential nature of such nonpublic information and are instructed by the
Lender to keep such nonpublic information confidential to the same extent
required hereunder), (ii) at the demand or request of any bank regulatory
authority, court or other Governmental Authority having or asserting
jurisdiction over the Administrative Agent or such Lender or any of their
respective Affiliates, as may be required pursuant to subpoena or other legal
process, or otherwise in order to comply with any applicable Requirement of Law,
(iii) in connection with any proceeding to enforce its rights hereunder or under
any other Credit Document or in any other litigation or proceeding in connection
with the Credit Documents, (iv) to the Administrative Agent, the Arranger or any
other Lender or to any direct, indirect, actual or prospective counterparty (and
its advisor) to any swap, derivative or securitization transaction related to
the obligations under this Agreement; provided that all parties to such
transaction agree to comply with the confidentiality provisions of this Section
11.13, (v) to the extent the same has

 

87

 

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

become publicly available other than as a result of a breach of this Agreement
and (vi) pursuant to and in accordance with the provisions of Section 11.7(f).

11.14   Counterparts; Effectiveness. This Agreement may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. Except as provided
in Section 4.1, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof that, when taken together, bear the signatures
of each of the other parties hereto. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or electronically shall be
effective as delivery of a manually executed counterpart of this Agreement.

11.15   Disclosure of Information. The Borrowers agree and consent to the
Administrative Agent’s and the Arranger’s disclosure of information relating to
this transaction to Gold Sheets and other similar bank trade publications. Such
information will consist of deal terms and other information customarily found
in such publications; provided that as to any disclosure of information not made
publicly available by the Borrowers, Everest Group shall have the right to
consent to such disclosure (such consent not to be unreasonably withheld or
delayed).

11.16   Nonreliance. Each Lender hereby represents that it is not relying on or
looking to any Margin Stock for the repayment of the Loans provided for herein.

11.17   Entire Agreement. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND
INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION HEREWITH (A) EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND THERETO RELATING TO
THE SUBJECT MATTER HEREOF AND THEREOF, (B) SUPERSEDE ANY AND ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS OF SUCH PERSONS, ORAL OR WRITTEN, RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF, INCLUDING, WITHOUT LIMITATION, THE COMMITMENT
LETTER FROM WACHOVIA AND THE ARRANGER TO THE BORROWERS DATED JUNE 21, 2007, BUT
SPECIFICALLY EXCLUDING THE FEE LETTER AND (C) MAY NOT BE AMENDED, SUPPLEMENTED,
CONTRADICTED OR OTHERWISE MODIFIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

11.18   PATRIOT Act Notice. Each Lender that is subject to the PATRIOT Act and
the Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrowers that pursuant to the requirements of the PATRIOT Act, it
is required to obtain, verify and record information that identifies the
Borrowers, which information includes the names and addresses of the Borrowers
and other information that will allow such Lender or the Administrative Agent,
as applicable, to identify the Borrowers in accordance with the PATRIOT Act.

 

11.19

Addition and Termination of Borrowers.  

 

88

 

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

(a)       Everest Group may from time to time after the Restatement Effective
Date designate one or more Subsidiaries as an additional Borrower. The effective
date of any designation of an additional Borrower shall be the date upon which
each of the conditions set forth in Section 4.2 and the following terms and
conditions shall have been satisfied or waived in accordance with the terms of
this Agreement (the “Designation Date”):

(i)        On or prior to the applicable Designation Date, each such Person
shall enter into an appropriately completed Assumption Agreement; and

(ii)       On or prior to the applicable Designation Date, the Administrative
Agent shall have received from such Person, the items required to be delivered
under Sections 4.1(a) and 4.1(b) with respect to such Person in substantially
the same form delivered to the Administrative Agent on the Restatement Effective
Date.

(b)       So long as (i) the principal of and interest on any Loans made to any
Subsidiary Borrower under this Agreement shall have been repaid or paid in full,
(ii) no Letters of Credit shall be outstanding for the account of such
Subsidiary Borrower, and (iii) no other Obligations of such Subsidiary Borrower
shall remain outstanding, Everest Group may, by not less than two Business Days’
prior written notice to the Administrative Agent (which shall promptly notify
the Lenders thereof), terminate such Subsidiary’s status as a “Subsidiary
Borrower” hereunder.

11.20   Judgment Currency. The obligations of any Borrower in respect of any sum
due to the Administrative Agent, the Issuing Lender or any Lender hereunder or
under any Credit Document shall, notwithstanding any judgment in a currency (the
“judgment currency”) other than the currency in which such sum originally due to
such party is denominated (the “original currency”), be discharged only to the
extent that on the Business Day following receipt by such party of any sum
adjudged to be so due in the judgment currency such party may in accordance with
normal banking procedures purchase the original currency with the judgment
currency. If the amount of the original currency so purchased is less than the
sum originally due to such party in the original currency, such Borrower agrees,
as a separate obligation and notwithstanding any such judgment, to indemnify
such party against such loss, and if the amount of the original currency so
purchased exceeds the sum originally due to such party to this Agreement, such
party agrees to remit to such Borrower the amount of such excess. This covenant
shall survive the termination of this Agreement and payment of the Loans and all
other amounts payable hereunder.

11.21   Effectiveness of the Amendment and Restatement; Existing Credit
Agreement. This Agreement shall become effective on the Restatement Effective
Date, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Until this Agreement
becomes effective, the Existing Credit Agreement shall remain in full force and
effect and shall not be affected hereby. After the Restatement Effective Date,
all obligations of each Borrower under the Existing Credit Agreement shall
become obligations of such Borrower hereunder, secured by the Liens granted
under the Security Documents, and the provisions of the Existing Credit
Agreement shall be superseded by the provisions hereof. Except as otherwise
expressly stated hereunder, the term of this Agreement is for all purposes
deemed to have commenced on the Restatement Effective Date. As of the
Restatement Effective Date, each of the lenders to the Existing Credit Agreement
that is not a Lender hereunder will

 

89

 

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

cease being a “Lender” under the Existing Credit Agreement and their respective
obligations thereunder to extend credit to the Borrowers shall automatically
terminate.

ARTICLE XII

THE GUARANTY

 

12.1

The Guaranty.

(a)       In order to induce the Lenders to enter into this Agreement and to
extend credit hereunder and in recognition of the direct benefits to be received
by Everest Group from the proceeds of the Loans and the issuance of the Letters
of Credit, Everest Group hereby unconditionally, absolutely and irrevocably
guarantees, as primary obligor and not merely as surety, the full and punctual
payment (whether at stated maturity, upon acceleration or otherwise) of all
Obligations of each of the other Borrowers under the Credit Documents including,
without limitation, the principal of and interest on the Loans and Reimbursement
Obligations owing by such other Borrowers pursuant to this Agreement. This
Guaranty is a guaranty of payment and not of collection. Upon failure by any
Borrower to pay punctually any such amount, Everest Group agrees to pay
forthwith on demand the amount not so paid at the place and in the manner
specified in this Agreement.

12.2     Guaranty Unconditional. The obligations of Everest Group under this
Article XII shall be unconditional, absolute and irrevocable and, without
limiting the generality of the foregoing, shall not be released, discharged or
otherwise affected by:

(i)        any extension, renewal, settlement, compromise, waiver or release
(including with respect to any Collateral) in respect of any obligation of any
other obligor under any of the Credit Documents, by operation of law or
otherwise;

(ii)       any modification or amendment of or supplement to any of the Credit
Documents;

(iii)      any release, non-perfection or invalidity of any direct or indirect
security for any obligation of any other obligor under any of the Credit
Documents;

(iv)      any change in the corporate existence, structure or ownership of any
obligor, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting any other obligor or its assets or any resulting release or
discharge of any obligation of any other obligor contained in any of the Credit
Documents;

(v)       the existence of any claim, set-off or other rights which any obligor
may have at any time against any other obligor, the Administrative Agent, the
Issuing Lender, any Lender or any other corporation or person, whether in
connection with any of the Credit Documents or any unrelated transactions,
provided that nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;

 

90

 

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

(vi)      any invalidity or unenforceability relating to or against any other
obligor for any reason of any of the Credit Documents, or any provision of
applicable law or regulation purporting to prohibit the payment by any other
obligor of principal, interest or any other amount payable under any of the
Credit Documents;

(vii)     any law, regulation or order of any jurisdiction, or any other event,
affecting any term of any obligation or the Lenders’ rights with respect
thereto; or

(viii)    any other act or omission to act or delay of any kind by any obligor,
the Administrative Agent, the Issuing Lender, any Lender or any other
corporation or person or any other circumstance whatsoever (other than the
defense of payment) which might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of or defense to Everest Group’s
obligations under this Article XII.

12.3     Discharge Only upon Payment in Full; Reinstatement in Certain
Circumstances. Everest Group’s obligations under this Article XII shall remain
in full force and effect until the commitments of the Lenders hereunder shall
have terminated, no Letters of Credit shall be outstanding and all amounts
payable by the other Borrowers under the Credit Documents shall have been paid
in full. If at any time any payment of the principal of or interest on any Loan
or any Reimbursement Obligation or any other amount payable by any Borrower
under the Credit Documents is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of such Borrower or
otherwise, Everest Group’s obligations under this Article XII with respect to
such payment shall be reinstated as though such payment had been due but not
made at such time.

12.4     Waiver by Everest Group. Everest Group irrevocably waives acceptance
hereof, presentment, demand, protest and any notice not provided for herein, as
well as any requirement that at any time any action be taken by any corporation
or person against any other obligor or any other corporation or person. Everest
Group warrants and agrees that each waiver set forth in this Section 12.4 is
made with full knowledge of its significance and consequences, and such waivers
shall be effective to the maximum extent permitted by law.

12.5     Subrogation. Everest Group hereby unconditionally and irrevocably
agrees not to exercise any rights that it may now have or hereafter acquire
against any other Borrower, or any other insider guarantor that arise from the
existence, payment, performance or enforcement of Everest Group’s obligations
under or in respect of this Guaranty or any other Credit Document, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or
remedy of any Lender against any other Borrower or any other insider guarantor
or any Collateral, whether or not such claim, remedy or right arises in equity
or under contract, statute or common law, including, without limitation, the
right to take or receive from any other Borrower or any other insider guarantor,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim, remedy or right, unless
and until all Obligations payable under this Agreement shall have been paid in
full in cash, no Letters of Credit shall be outstanding and the commitments of
the Lenders hereunder shall have expired or been terminated. If any amount shall
be paid to Everest Group in violation of the immediately preceding sentence at
any time prior to the latest of (a) the payment in full in cash of all amounts
payable under this Guaranty,

 

91

 

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

and (b) the Final Maturity Date, such amount shall be received and held in trust
for the benefit of the Lenders, shall be segregated from other property and
funds of Everest Group and shall forthwith be paid or delivered to the
Administrative Agent in the same form as so received (with any necessary
endorsement or assignment) to be credited and applied to all amounts payable
under this Guaranty, whether matured or unmatured, in accordance with the terms
of the Credit Documents, or to be held as collateral for any amounts payable
under this Guaranty thereafter arising. If (i) Everest Group shall make payment
to any Lender of all or any amounts payable under this Guaranty, (ii) all
amounts payable under this Guaranty shall have been paid in full in cash, and
(iii) the Final Maturity Date shall have occurred, the Lenders will, at Everest
Group’s request and expense, execute and deliver to Everest Group appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to Everest Group of an interest in the
obligations resulting from such payment made by Everest Group pursuant to this
Guaranty.

12.6     Stay of Acceleration. If acceleration of the time for payment of any
amount payable by any Borrower under any of the Credit Documents is stayed upon
the insolvency, bankruptcy or reorganization of such Borrower, all such amounts
otherwise subject to acceleration under the terms of this Agreement shall
nonetheless be payable by Everest Group under this Article XII forthwith on
demand by the Administrative Agent made at the request of the Required Lenders.

12.7     Continuing Guaranty; Assignments. This Guaranty is a continuing
guaranty and shall (a) remain in full force and effect until the latest of (i)
the payment in full in cash of all Obligations payable under this Agreement and
(ii) the Final Maturity Date, (b) be binding upon Everest Group, its successors
and assigns and (c) inure to the benefit of and be enforceable by the Lenders
and their successors, transferees and assigns. Without limiting the generality
of clause (c) of the immediately preceding sentence, any Lender may assign or
otherwise transfer all or any portion of its rights and obligations under this
Agreement to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such Lender herein or
otherwise, in each case as and to the extent provided in Section 11.7.

[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

92

 

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

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

 

EVEREST RE GROUP, LTD.

 

 

 

 

By:

/s/ CRAIG EISENACHER

 

Name:

Craig Eisenacher

 

Title:

Executive Vice President and CFO

 

 

 

 

EVEREST REINSURANCE (BERMUDA), LTD.

 

 

 

 

By:

/s/ MARK DE SARAM

 

Name:

Mark de Saram

 

Title:

Deputy Chairman, Managing Director & CEO

 

 

 

 

EVEREST INTERNATIONAL REINSURANCE, LTD.

 

 

 

 

By:

/s/ MARK DE SARAM

 

Name:

Mark de Saram

 

Title:

Deputy Chairman

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(signatures continued)

 

 

 

Signature Page to Amended and Restated Credit Agreement

S-1

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

 

WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent, Issuing Lender and
as a Lender

 

 

 

 

By:

/s/ WILLIAM R. GOLEY

 

Name:

William R. Goley

 

Title:

Director

 

 

 

 

 

 

 

 

 

 

 

 

Signature Page to Amended and Restated Credit Agreement

S-2

 

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

 

CITIBANK, N,A, as a Documentation Agent and as a Lender

 

 

 

 

By:

/s/ ALEX DUKA

 

Name:

Alex Duka

 

Title:

Managing Director

 

 

 

 

 

 

Signature Page to Amended and Restated Credit Agreement

S-3

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

 

DEUTSCHE BANK AG NEW YORK BRANCH, as a Documentation Agent and as a Lender

 

 

 

 

By:

/s/ RICHARD J. HERDER

 

Name:

Richard J. Herder

 

Title:

Managing Director

 

 

 

 

By:

/s/ MELISSA A. CURRY

 

Name:

Melissa A. Curry

 

Title:

Vice President

 

 

 

 

Signature Page to Amended and Restated Credit Agreement

S-4

 

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

 

HSBC BANK USA, N.A., as a Documentation Agent and as a Lender

 

 

 

 

By:

/s/ JIMMY TSE

 

Name:

Jimmy Tse

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 

Signature Page to Amended and Restated Credit Agreement

S-5

 

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

 

ING BANK N.V., LONDON BRANCH, as a Documentation Agent and as a Lender

 

 

 

 

By:

/s/ N. MARCHANT

 

Name:

N. Marchant

 

Title:

Director

 

 

 

 

By:

/s/ J. TAYLOR

 

Name:

J. Taylor

 

Title:

Managing Director

 

 

 

 

Signature Page to Amended and Restated Credit Agreement

S-6

 

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

 

BNP PARIBAS, as a Lender

 

 

 

 

By:

/s/ PETER A. NIKITAIDIS

 

Name:

Peter A. Nikitaidis

 

Title:

Director

 

 

 

 

By:

/s/ LAURENT VANDERZYPPY

 

Name:

Laurent Vanderzyppy

 

Title:

Managing Director

 

 

 

Signature Page to Amended and Restated Credit Agreement

S-7

 

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

 

FORTIS CAPITAL CORP., as a Lender

 

 

 

 

By:

/s/ MIKE WRIGHT

 

Name:

Mike Wright

 

Title:

Director

 

 

 

 

By:

/s/ CHRIS HAYES

 

Name:

Chris Hayes

 

Title:

Director

 

 

 

Signature Page to Amended and Restated Credit Agreement

S-8

 

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

 

THE BANK OF NEW YORK, as a Lender

 

 

 

 

By:

/s/ THOMAS MCGINLEY

 

Name:

Thomas McGinley

 

Title:

Vice President

 

 

 

 

 

Signature Page to Amended and Restated Credit Agreement

S-9

 

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

 

 

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as a Lender

 

 

 

 

By:

/s/ CHIMIE T. PEMBA

 

Name:

Chimie T. Pemba

 

Title:

Authorized Signatory

 

 

 

 

 

 

Signature Page to Amended and Restated Credit Agreement

S-10

 

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

 

BANK OF AMERICA, N.A., as a Lender

 

 

 

 

By:

/s/ DEBRA BASLER

 

Name:

Debra Basler

 

Title:

Senior Vice President

 

 

 

 

 

 

Signature Page to Amended and Restated Credit Agreement

S-11

 

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

 

BARCLAYS BANK PLC, as a Lender

 

 

 

 

By:

/s/ CARL BOULTEN

 

Name:

Carl Boulten

 

Title:

Director

 

 

 

 

 

 

 

Signature Page to Amended and Restated Credit Agreement

S-12

 

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

 

 

Signature Page to Amended and Restated Credit Agreement

S-13

 

 

[nreimg1.gif]

 

EXHIBIT A

 

Borrower’s Taxpayer Identification No. ___________

 

NOTE

 

$___________

July __, 2007

Charlotte, North Carolina

 

FOR VALUE RECEIVED, [EVEREST RE GROUP, LTD., a company organized under the laws
of Bermuda,] [EVEREST REINSURANCE (BERMUDA), LTD., a company organized under the
laws of Bermuda,] [EVEREST INTERNATIONAL REINSURANCE, LTD., a company organized
under the laws of Bermuda] (the “Borrower”), hereby promises to pay to the order
of

______________________________ (the “Lender”), at the offices of Wachovia Bank,
National Association (the “Administrative Agent”) located at One Wachovia
Center, 301 South College Street, Charlotte, North Carolina (or at such other
place or places as the Administrative Agent may designate), at the times and in
the manner provided in the Amended and Restated Credit Agreement, dated as of
July 27, 2007 (as amended, restated, modified or supplemented from time to time,
the “Credit Agreement”), among the Borrower, the other Borrowers named therein,
the Lenders from time to time parties thereto, and Wachovia Bank, National
Association, as Administrative Agent, the principal sum of

__________________________ DOLLARS ($___________), or such lesser amount as may
constitute the unpaid principal amount of the Loans made by the Lender to the
Borrower, under the terms and conditions of this promissory note (this “Note”)
and the Credit Agreement. The defined terms in the Credit Agreement are used
herein with the same meaning. The Borrower also promises to pay interest on the
aggregate unpaid principal amount of this Note at the rates applicable thereto
from time to time as provided in the Credit Agreement.

This Note is one of the Notes referred to in the Credit Agreement and is issued
to evidence the Loans made by the Lender pursuant to the Credit Agreement. All
of the terms, conditions and covenants of the Credit Agreement are expressly
made a part of this Note by reference in the same manner and with the same
effect as if set forth herein at length, and any holder of this Note is entitled
to the benefits of and remedies provided in the Credit Agreement and the other
Credit Documents. Reference is made to the Credit Agreement for provisions
relating to the interest rate, maturity, payment, prepayment and acceleration of
this Note.

In the event of an acceleration of the maturity of this Note, this Note shall
become immediately due and payable, without presentation, demand, protest or
notice of any kind, all of which are hereby waived by the Borrower.

 

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

In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and interest,
all costs of collection, including reasonable attorneys’ fees.

This Note shall be governed by and construed in accordance with the internal
laws and judicial decisions of the State of New York (including Sections 5-1401
and 5-1402 of the New York General Obligations Law, but excluding all other
choice of law and conflicts of law rules). The Borrower hereby submits to the
nonexclusive jurisdiction and venue of the federal and state courts located in
Mecklenburg County, North Carolina or New York County, New York, although the
Lender shall not be limited to bringing an action in such courts.

IN WITNESS WHEREOF, the Borrower has caused this Note to be executed under seal
by its duly authorized corporate officer as of the day and year first above
written.

 

[EVEREST RE GROUP, LTD.]

[EVEREST REINSURANCE (BERMUDA), LTD.]

[EVEREST INTERNATIONAL REINSURANCE, LTD.]

 

 

By:

________________________________

 

 

Title:

________________________________

 

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

EXHIBIT B-1

 

NOTICE OF BORROWING

 

[Date]

 

Wachovia Bank, National Association, as Administrative Agent

Charlotte Plaza Building, CP-23

201 South College Street

Charlotte, North Carolina 28288-0680

Attention: Syndication Agency Services

 

Ladies and Gentlemen:

 

The undersigned, [EVEREST RE GROUP, LTD., a company organized under the laws of
Bermuda,] [EVEREST REINSURANCE (BERMUDA), LTD., a company organized under the
laws of Bermuda,] [EVEREST INTERNATIONAL REINSURANCE, LTD., a company organized
under the laws of Bermuda] (the “Borrower”), refers to the Amended and Restated
Credit Agreement, dated as of July 27, 2007, among the Borrower, the other
Borrowers named therein, certain banks and other financial institutions from
time to time parties thereto (the “Lenders”), and you, as Administrative Agent
for the Lenders (as amended, restated, modified or supplemented from time to
time, the “Credit Agreement,” the terms defined therein being used herein as
therein defined), and, pursuant to Section 2.2(b) of the Credit Agreement,
hereby gives you, as Administrative Agent, irrevocable notice that the Borrower
requests a Borrowing of Loans under the Credit Agreement, and to that end sets
forth below the information relating to such Borrowing (the “Proposed
Borrowing”) as required by Section 2.2(b) of the Credit Agreement:

(i)  The aggregate principal amount of the Proposed Borrowing is
$_______________.1

(ii) The Loans comprising the Proposed Borrowing shall be initially made as
[Base Rate Loans] [LIBOR Loans].2

(iii)[The initial Interest Period for the LIBOR Loans comprising the Proposed
Borrowing shall be [one/two/three/six months].]3

_________________________

1 of Proposed Borrowing must comply with Section 2.2(b) of the Credit Agreement.

2 the applicable Type of Loans.

3 this clause in the case of a Proposed Borrowing comprised of LIBOR Loans, and
select the applicable Interest Period.

 

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

(iv)The Proposed Borrowing is requested to be made on __________________ (the
“Borrowing Date”).4

The Borrower hereby certifies that the following statements are true on and as
of the date hereof and will be true on and as of the Borrowing Date:

A.        Each of the representations and warranties contained in Article V of
the Credit Agreement [(except for the representations and warranties contained
in Section 5.10, clause (i) of Section 5.5, and clause (ii) of Section 5.13(c)
of the Credit Agreement)]5 and in the other Credit Documents is and will be true
and correct in all material respects on and as of each such date, with the same
effect as if made on and as of each such date, both immediately before and after
giving effect to the Proposed Borrowing and to the application of the proceeds
therefrom (except to the extent any such representation or warranty is expressly
stated to have been made as of a specific date, in which case such
representation or warranty was true and correct in all material respects as of
such date);

B.        No Default or Event of Default has occurred and is continuing or would
result from the Proposed Borrowing or from the application of the proceeds
therefrom; and

C.        After giving effect to the Proposed Borrowing, the aggregate Tranche 1
Credit Exposure will not exceed the aggregate Tranche 1 Commitments.

Very truly yours,

 

[EVEREST RE GROUP, LTD.]

[EVEREST REINSURANCE (BERMUDA), LTD.]

[EVEREST INTERNATIONAL REINSURANCE, LTD.]

 

 

By:

_________________________________

 

Title:

_________________________________

_________________________

4 notice must be received on a Business Day (i) not later than 11:00 a.m.,
Charlotte time, three (3) Business Days prior to the Borrowing Date (in the case
of LIBOR Loans) and (ii) not later than 10:00 a.m., Charlotte time, on the
Borrowing Date (in the case of Base Rate Loans).

5 Borrower is required to make the representations and warranties contained in
these sections only if borrowing on the Restatement Effective Date.

 

2

 

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

EXHIBIT B-2

 

NOTICE OF CONVERSION/CONTINUATION

 

[Date]

 

Wachovia Bank, National Association, as Administrative Agent

Charlotte Plaza Building, CP-23

201 South College Street

Charlotte, North Carolina 28288-0680

Attention: Syndication Agency Services

 

Ladies and Gentlemen:

 

The undersigned, , [EVEREST RE GROUP, LTD., a company organized under the laws
of Bermuda,] [EVEREST REINSURANCE (BERMUDA), LTD., a company organized under the
laws of Bermuda,] [EVEREST INTERNATIONAL REINSURANCE, LTD., a company organized
under the laws of Bermuda] (the “Borrower”), refers to the Amended and Restated
Credit Agreement, dated as of July 27, 2007, among the Borrower, the other
Borrowers named therein, certain banks and other financial institutions from
time to time parties thereto (the “Lenders”), and you, as Administrative Agent
for the Lenders (as amended, restated, modified or supplemented from time to
time, the “Credit Agreement,” the terms defined therein being used herein as
therein defined), and, pursuant to Section 2.11(b) of the Credit Agreement,
hereby gives you, as Administrative Agent, irrevocable notice that the Borrower
requests a [conversion] [continuation]1 of Loans under the Credit Agreement, and
to that end sets forth below the information relating to such [conversion]
[continuation] (the “Proposed [Conversion] [Continuation]”) as required by
Section 2.11(b) of the Credit Agreement:

(i)  The Proposed [Conversion] [Continuation] is requested to be made on
_______________.2

(ii) The Proposed [Conversion] [Continuation] involves $____________3 in
aggregate principal amount of Loans made pursuant to a Borrowing on
________________,4 which Loans are presently maintained as

_________________________

1  “conversion” or “continuation” throughout the notice, as applicable.

2 be a Business Day at least one (1) Business Day after the date hereof (in the
case of any conversion of LIBOR Loans into Base Rate Loans) or at least three
(3) Business Days after the date hereof (in the case of any conversion of Base
Rate Loans into, or continuation of, LIBOR Loans).

3 of Proposed Conversion or Continuation must comply with Section 2.11(a) of the
Credit Agreement.

4 the applicable Borrowing Date for the Loans being converted or continued.

 

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

[Base Rate] [LIBOR] Loans and are proposed hereby to be [converted into Base
Rate Loans] [converted into LIBOR Loans] [continued as LIBOR Loans].5

(iii)[The initial Interest Period for the Loans being [converted into]
[continued as] LIBOR Loans pursuant to the Proposed [Conversion] [Continuation]
shall be [one/two/three/six months].]6

[The Borrower hereby certifies that the following statement is true both on and
as of the date hereof and on and as of the effective date of the Proposed
[Conversion] [Continuation]: no Default or Event of Default has or will have
occurred and is continuing or would result from the Proposed [Conversion]
[Continuation].]7

 

Very truly yours,

 

[EVEREST RE GROUP, LTD.]

[EVEREST REINSURANCE (BERMUDA), LTD.]

[EVEREST INTERNATIONAL REINSURANCE, LTD.]

 

 

By:

_________________________________

 

 

Title:

_________________________________

 

_________________________

5 with the applicable bracketed language.

6 this clause in the case of a Proposed Conversion or Continuation involving a
conversion of Base Rate Loans into, or continuation of, LIBOR Loans, and select
the applicable Interest Period.

7 this clause in the case of a Proposed Conversion or Continuation involving a
conversion of Base Rate Loans into, or continuation of, LIBOR Loans.

 

2

 

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

EXHIBIT B-3

 

LETTER OF CREDIT NOTICE

 

[Date]

 

Wachovia Bank, National Association,

as Administrative Agent

Charlotte Plaza Building

201 South College Street, 8th Floor NC 0680

Charlotte, North Carolina 28288

Attention: Syndication Agency Services

 

Wachovia Bank, National Association,

as Administrative Agent

301 South College Street, 6th Floor NC0760

Charlotte, North Carolina 28288-0760

Attn: Laura Douglas / Will Goley

 

Ladies and Gentlemen:

 

The undersigned, , [EVEREST RE GROUP, LTD., a company organized under the laws
of Bermuda,] [EVEREST REINSURANCE (BERMUDA), LTD., a company organized under the
laws of Bermuda,] [EVEREST INTERNATIONAL REINSURANCE, LTD., a company organized
under the laws of Bermuda] (the “Borrower”), refers to the Amended and Restated
Credit Agreement, dated as of July 27, 2007, among the Borrower, the other
Borrowers named therein, certain banks and other financial institutions from
time to time parties thereto (the “Lenders”), and you, as Administrative Agent
for the Lenders (as amended, restated, modified or supplemented from time to
time, the “Credit Agreement,” the terms defined therein being used herein as
therein defined), and, pursuant to Section 3.3 of the Credit Agreement, hereby
gives you, as Issuing Lender, irrevocable notice that the Borrower requests the
issuance of a Letter of Credit for its account under the Credit Agreement, and
to that end sets forth below the information relating to such Letter of Credit
(the “Requested Letter of Credit”) as required by Section 3.2 of the Credit
Agreement:

(i)  The Business Day on which the Requested Letter of Credit is requested to be
issued is _______________.1

(ii) The Requested Letter of Credit is a [Tranche 1 Letter of Credit][Tranche 2
Letter of Credit].2

_________________________

1 be at least three Business Days (or such shorter period as is acceptable to
the Issuing Lender in any given case) after the date hereof.

 

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

(iii)The Stated Amount of the Requested Letter of Credit is $____________.

(iv)The expiry date of the Requested Letter of Credit is ______________.

(v) The name and address of the beneficiary of the Requested Letter of Credit is
__________________________________________________________.

The undersigned agrees to complete all application procedures and documents
required by you in connection with the Requested Letter of Credit.

The undersigned hereby certifies that the following statements are true on the
date hereof and will be true on the date of issuance of the Requested Letter of
Credit:

A.  Each of the representations and warranties contained in Article V of the
Credit Agreement [(except for the representations and warranties contained in
Section 5.10, clause (i) of Section 5.5, and clause (ii) of Section 5.13(c) of
the Credit Agreement)]3 and in the other Credit Documents is and will be true
and correct in all material respects on and as of each such date, with the same
effect as if made on and as of each such date, both immediately before and after
giving effect to the Proposed Borrowing and to the application of the proceeds
therefrom (except to the extent any such representation or warranty is expressly
stated to have been made as of a specific date, in which case such
representation or warranty was true and correct in all material respects as of
such date);

B.        No Default or Event of Default has occurred and is continuing or would
result from the issuance of the Requested Letter of Credit; and

C.        [After giving effect to the issuance of the Requested Letter of
Credit, the sum of (i) the aggregate principal amount of Loans outstanding, and
(ii) the aggregate Tranche 1 Letter of Credit Exposure of all Tranche 1 Lenders,
will not exceed the aggregate Tranche 1 Commitments.]4 [After giving effect to
the issuance of the Requested Letter of Credit, the aggregate Tranche 2 Letter
of Credit Exposure of all Tranche 2 Lenders will not exceed the lesser of (i)
the aggregate Tranche 2 Commitments and (ii) the aggregate Collateral Value.]5

D.        [After giving effect to the issuance of the Requested Letter of
Credit, the aggregate Tranche 2 Letter of Credit Exposure pertaining to the
Borrower will not exceed the Collateral Value in the Borrower’s Custodial
Account.]6

_________________________

2 Specify whether the Letter of Credit to be issued is a Tranche 1 Letter of
Credit or Tranche 2 Letter of Credit.

3 Borrower is required to make the representations and warranties contained in
these sections only on the Restatement Effective Date.

4 For Tranche 1 Letters of Credit only.

5 For Tranche 2 Letters of Credit only.

6 For Tranche 2 Letters of Credit only.

 

2

 

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

 

Very truly yours,

 

[NAME OF BORROWER]

 

 

By:

_________________________________

 

 

Title:

_________________________________

 

 

3

 

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

[nreimg2.gif]

 

EXHIBIT C

 

FORM OF

COMPLIANCE CERTIFICATE

 

THIS CERTIFICATE is given pursuant to Section 6.3(a) of the Amended and Restated
Credit Agreement, dated as of July 27, 2007 (as amended, restated, modified or
supplemented from time to time, the “Credit Agreement,” the terms defined
therein being used herein as therein defined), among EVEREST RE GROUP, LTD., a
company organized under the laws of Bermuda (“Everest Group”), the other
Borrowers named therein, certain banks and other financial institutions from
time to time parties thereto (the “Lenders”), and Wachovia Bank, National
Association, as Administrative Agent for the Lenders.

The undersigned hereby certifies that:

1.         He is the [Chief Financial Officer][Treasurer][Comptroller] of
Everest Group.

2.         Enclosed with this Certificate are copies of the financial statements
of Everest Group and its Subsidiaries as of _____________, and for the
[________-month period] [year] then ended, required to be delivered under
Section [6.1(a)][6.1(b)] of the Credit Agreement. Such financial statements have
been prepared in accordance with GAAP [(subject to the absence of notes required
by GAAP and subject to normal year-end adjustments)]1 and present fairly, in all
material respects, the financial condition of Everest Group and its Subsidiaries
on a consolidated basis as of the date indicated and the results of operations
of Everest Group and its Subsidiaries on a consolidated basis for the period
covered thereby.

3.         The undersigned has reviewed the terms of the Credit Agreement and
has made, or caused to be made under the supervision of the undersigned, a
review in reasonable detail of the transactions and condition of Everest Group
and its Subsidiaries during the accounting period covered by such financial
statements.

4.         The examination described in paragraph 3 above did not disclose, and
the undersigned has no knowledge of the existence of, any Default or Event of
Default during or at the end of the accounting period covered by such financial
statements or as of the date of this Certificate [, except as set forth below.

Describe here or in a separate attachment any exceptions to paragraph 4 above by
listing, in reasonable detail, the nature of the Default or Event of Default,
the period during which it existed and the action that Everest has taken or
proposes to take with respect thereto].

_________________________

1 Insert in the case of quarterly financial statements.

 

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

5.         Attached to this Certificate as Attachment A is a covenant compliance
worksheet reflecting the computation of the financial covenants set forth in
Article VII of the Credit Agreement as of the last day of the period covered by
the financial statements enclosed herewith.

IN WITNESS WHEREOF, the undersigned has executed and delivered this Certificate
as of the _______ day of _____________, ____.

 

EVEREST RE GROUP, LTD.

 

 

By:

____________________________________

 

 

Name:

____________________________________

 

 

Title:

____________________________________

 

 

2

 

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

ATTACHMENT A

 

GAAP COVENANT COMPLIANCE WORKSHEET

 

A. Consolidated Indebtedness to Total Capitalization (Section 7.1 of the Credit
Agreement)

 

(1) Consolidated Indebtedness as of the date of determination (excluding, to the
extent otherwise included, amounts due to Hybrid Securities)

 

 

 

$               

(2) Total Capitalization of the Borrower as of such date

 

 

 

(a)             Consolidated Indebtedness as of such date (from Line 1 above)

 

$________

 

 

(b)             Consolidated Net Worth as of such date (excluding Disqualified
Capital Stock)

 

 

$________

 

 

(c)             Aggregate principal amount of all Hybrid Securities as of such
date

 

$________

 

 

(d)             Sum of Line 2(a), Line 2(b) and Line 2(c)

$________

 

 

(3) Hybrid Securities exclusion:

Multiply Line 2(d) by 15%

 

$________

 

 

(4) Adjustment for Hybrid Securities:

Subtract line (3) from Line 2(c) (if not a positive number, enter 0)

 

 

 

$               

(5) Consolidated Indebtedness plus Hybrid Securities adjustment:

Add Line 1 and Line 4

 

 

 

 

$               

(6) Consolidated Indebtedness (as adjusted) to Total Capitalization as of the
date of determination:

Divide Line 5 by Line 2(d)

 

 

 

               

(7) Maximum Consolidated Indebtedness to Total Capitalization Ratio as of the
date of determination

 

 

 

0.35 : 1.0

 

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

B. Minimum Consolidated Net Worth

(Section 7.2 of the Credit Agreement)

 

(1) Consolidated Net Worth as of the date of determination:

 

$               

 

 

 

(2) Minimum Amount as of the date of determination:

 

 

 

(a)      [$______________]1:

$[_________]

 

 

(b)     Consolidated Net Income (if positive) per fiscal quarter (ending on or
after the Restatement Effective Date)

 

$               

 

 

(c)      Net Income Adjustment

Multiply Line 2(b) by 0.25

 

 

$               

 

 

(d)     Increase in Consolidated Net Worth attributable to the issuance of
ordinary and preferred shares

 

$               

 

 

 

(e)      Net Worth Adjustment

Multiply Line 2(d) by 0.25

 

 

$               

 

 

(f)      Minimum Consolidated Net Worth as of the Date of Determination

Add Lines 2(a), Line 2(c) and Line 2(e)

 

 

 

$               

 

 

 

 

_________________________

1  [Insert Consolidated Net Worth as of December 31, 2006 multiplied by .70]

 

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

[nreimg3.gif]
EXHIBIT D

 

ASSIGNMENT AND ASSUMPTION

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

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including any Letters of Credit and guarantees included in
such facilities) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.

 

1.

Assignor:

______________________________

 

 

2.

Assignee:

______________________________

 

[and is an Affiliate of [identify Lender]1]

 

 

3.

Borrowers:

Everest Re Group, Ltd.

 

Everest Reinsurance (Bermuda), Ltd.

 

Everest International Reinsurance, Ltd.

_________________________

 

1   Select as applicable.

 

 

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

 

4.

Administrative Agent:

Wachovia Bank, National Association, as the Administrative Agent under the
Credit Agreement.

 

 

5.

Credit Agreement:

Amended and Restated Credit Agreement, dated as of July 27, 2007 (as amended,
modified, restated or supplemented from time to time, the “Credit Agreement”),
among the Borrowers, certain lenders from time to time parties thereto (the
“Lenders”), Wachovia Bank, National Association, as Administrative Agent.

 

 

6.

Assigned Interest:

 

Facility Assigned2

Aggregate Amount of Commitment/Loans/Letter of Credit Exposure for all Lenders3

Amount of Commitment/Loans/Letter of Credit Exposure Assigned3

Percentage Assigned of Commitment/Loans/Letter of Credit Exposure4

CUSIP Number5

 

$

$

%

 

 

$

$

%

 

 

$

$

%

 

 

 

[7.

Trade Date:

______________]6

 

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

_________________________

 

2 Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g. “Tranche
1Commitment” and/or “Tranche 2 Commitment”.).
3 Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Effective Date.
4 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.
5 Insert if applicable.
6 To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.

 

2

 

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

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

ASSIGNOR:

 

[NAME OF ASSIGNOR]

 

 

By:

_________________________________

 

 

Title:

_________________________________

 

 

ASSIGNEE:

 

[NAME OF ASSIGNEE]

 

 

By:

_________________________________

 

 

Title:

_________________________________

 

[Consented to and]7 Accepted:

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent and Issuing Lender

 

By:

_________________________________

 

Title:

_________________________________

 

 

 

 

 

[signatures continue on next page]

 

_________________________

 

7 

To be added only if the consent of the Administrative Agent and/or Issuing
Lender is required by the terms of the Credit Agreement.

 

 

3

 

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

[Consented to:]1

EVEREST RE GROUP, LTD.

 

By:

_________________________________

 

Title:

_________________________________

 

EVEREST REINSURANCE (BERMUDA), LTD.

 

By:

_________________________________

 

Title:

_________________________________

 

 

EVEREST INTERNATIONAL REINSURANCE, LTD.

 

By:

_________________________________

 

Title:

_________________________________

 

_________________________

 

1 

To be added only if the consent of the Borrowers is required by the terms of the
Credit Agreement.

 

 

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

ANNEX 1 to Assignment and Assumption

 

Credit Agreement, dated as of July 27, 2007, among Everest Re Group, Ltd., a
company organized under the laws of Bermuda (“Everest Group”), Everest
Reinsurance (Bermuda), Ltd., a company organized under the laws of Bermuda
(“Everest Bermuda”), Everest International Reinsurance, Ltd., a company
organized under the laws of Bermuda (“Everest International”, and collectively
with Everest Group and Everest Bermuda, the “Borrowers”), certain Lenders from
time to time parties thereto, and Wachovia Bank, National Association, as
Administrative Agent.

 [nreimg4.gif]

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1.       Representations and Warranties

 

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

 

1.2.      Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder,
(iv) it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to Section 6.1 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached to the Assignment and Assumption is any documentation required
to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in

 

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

taking or not taking action under the Credit Documents, and (ii) it will perform
in accordance with their terms all of the obligations that by the terms of the
Credit Documents are required to be performed by it as a Lender.

 

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

 

3.         General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the laws of the State of New York
(including Sections 5-1401 and 5-1402 of the New York General Obligations Law,
but excluding all other choice of law and conflicts of law rules).

 

 

2

 

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

EXHIBIT E

 

FORM OF

AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT

THIS AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, dated as of the 27th
day of July, 2007 (this “Agreement”), is made among EVEREST RE GROUP, LTD., a
company organized under the laws of Bermuda (“Everest Group”), EVEREST
REINSURANCE (BERMUDA), LTD., a company organized under the laws of Bermuda
(“Everest Bermuda”), EVEREST INTERNATIONAL REINSURANCE, LTD., a company
organized under the laws of Bermuda (“Everest International”, and collectively
with Everest Group and Everest Bermuda, the “Pledgors”), in favor of WACHOVIA
BANK, NATIONAL ASSOCIATION (“Wachovia”), as Administrative Agent for the Lenders
party to the Credit Agreement referred to below (in such capacity, the
“Administrative Agent”). Except as otherwise provided herein, capitalized terms
used herein without definition shall have the meanings given to them in the
Credit Agreement referred to below.

RECITALS

A.        The Pledgors, the Lenders and the Administrative Agent are parties to
a Credit Agreement, dated as of July 27, 2007 (as amended, modified, restated or
supplemented from time to time, the “Credit Agreement”), providing for the
availability of certain credit facilities to the Pledgors upon the terms and
subject to the conditions set forth therein, which amended and restated the
Credit Agreement dated as of December 8, 2004 (the “Existing Credit Agreement”).

B.        As a condition to the extension of credit to the Pledgors under the
Credit Agreement, Everest Group has guaranteed to the Secured Parties the
payment in full of the Obligations of Everest Bermuda and Everest International
under the Credit Agreement and the other Credit Documents.

C.        The Pledgors and the Administrative Agent, on behalf of the Lenders
party to the Credit Agreement, entered into a Pledge and Security Agreement
dated as of December 8, 2004 (the “Existing Security Agreement”) pursuant to
which the Pledgors granted security interests in certain of its assets to secure
the payment in full of its Tranche 2 Obligations under the Existing Credit
Agreement and the other Credit Documents thereto, and have agreed to amend and
restate the Existing Security Agreement in its entirety.

D.        It is a condition to the extension of credit to the Pledgors under the
Credit Agreement that each Pledgor shall have agreed, by executing and
delivering this Agreement, to secure the payment in full of the Tranche 2
Obligations under the Credit Agreement and the other Credit Documents. The
Secured Parties are relying on this Agreement in their decision to extend credit
to the Pledgors under the Credit Agreement, and would not enter into the Credit
Agreement without the execution and delivery of this Agreement by each of the
Pledgors.

 

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

STATEMENT OF AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
induce the Secured Parties to enter into the Credit Agreement and to extend
credit to the Pledgors thereunder, each Pledgor hereby agrees that the Existing
Security Agreement is hereby amended and restated in its entirety as of the date
hereof as follows:

1.         Pledge and Grant of Security Interest. Each Pledgor hereby pledges,
assigns and delivers to the Administrative Agent, for the ratable benefit of the
Lenders (including the Issuing Lender in its capacity as such) and the
Administrative Agent (collectively, the “Secured Parties”), and grants to the
Administrative Agent, for the ratable benefit of the Secured Parties, a Lien
upon and security interest in, all of such Pledgor’s right, title and interest
in and to the following property and assets of such Pledgor, in each case
whether now owned or existing or hereafter acquired or arising and wherever
located (collectively, the “Collateral”):

(i)  Each account listed on Annex A hereto, established by the applicable
Custodian for and in the name of the applicable Pledgor listed on such Annex A
(such accounts, together with any successor or replacement accounts and any new
accounts added to the Collateral pursuant to Section 4(d), and all sub-accounts,
including deposit accounts, created under any of the foregoing, collectively,
the “Accounts,” and individually, an “Account”):

(ii) all securities, money, instruments and other assets now or at any time
hereafter deposited or held in or transferred in or credited to or carried in
any of the Accounts, including, without limitation, all bonds, debentures, stock
and other securities (whether certificated or uncertificated and whether in
registered, bearer or book-entry form), security entitlements, securities
accounts and other investment property and all promissory notes, negotiable
instruments, certificates of deposit, deposit accounts, financial assets, cash
and cash equivalents, together with all rights to receive interest, income,
dividends, distributions, returns of capital and other amounts (whether in cash,
securities, property, or a combination thereof), and all additional stock,
warrants, options, securities, interests and other property, from time to time
paid or payable or distributed or distributable in respect of any of the
foregoing (but subject to the provisions of Section 5); all additions,
replacements, substitutions and exchanges to or for any of the foregoing; and
all other rights, powers, privileges, interests, claims and other property in
any manner arising out of or relating to any of the foregoing, of whatever kind
or character; together with all certificates, instruments and entries upon the
books of any Custodian or any other securities intermediaries at any time
evidencing any of the foregoing, in each case whether now owned or existing or
hereafter acquired or arising, (the securities and other assets described in
this clause (ii), together with the Accounts, collectively, the “Pledged
Assets”); and

(iii)any and all proceeds (as defined in the Uniform Commercial Code) of or from
any and all of the foregoing and, to the extent not otherwise included in the
foregoing, (y) all payments under any insurance (whether or not the
Administrative Agent is the loss payee thereunder), indemnity, warranty or
guaranty with respect to any of the foregoing Collateral and (z) all other
amounts from time to time paid or payable

 

2

 

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

under or with respect to any of the foregoing Collateral (collectively,
“Proceeds”). For purposes of this Agreement, the term “Proceeds” includes
whatever is receivable or received when Collateral or Proceeds are sold,
exchanged, collected or otherwise disposed of, whether voluntarily or
involuntarily.

2.         Security for Obligations. This Agreement and the Collateral secure
the full and prompt payment, at any time and from time to time as and when due
(whether at the stated maturity, by acceleration or otherwise), of (a) all
Tranche 2 Obligations of each of the Pledgors under the Credit Agreement, this
Agreement (including all fees, costs and expenses payable by each such Pledgor
under Section 9) and the other Credit Documents (including interest accruing
after the filing of a petition or commencement of a case by or with respect to
any Pledgor seeking relief under any applicable federal, foreign and state laws
pertaining to bankruptcy, reorganization, arrangement, moratorium, readjustment
of debts, dissolution, liquidation or other debtor relief, specifically
including, without limitation, the Bankruptcy Code and any fraudulent transfer
and fraudulent conveyance laws, whether or not the claim for such interest is
allowed in such proceeding), and (b) in the case of Everest Group, all of its
liabilities and obligations under the Guaranty with respect to the Tranche 2
Obligations under Article XII of the Credit Agreement, whether now existing or
hereafter incurred, created or arising and whether direct or indirect, absolute
or contingent, due or to become due (including obligations of performance), and
including all such obligations that, but for the operation of the automatic stay
under Section 362(a) of the federal Bankruptcy Code (Title 11, U.S. Code), would
become due (the liabilities and obligations of the Pledgors described in this
Section 2, collectively, the “Secured Obligations”).

3.         Representations and Warranties. Each Pledgor represents and warrants
as follows:

(a)       Each Pledgor owns the Accounts established in its name as set forth
herein, and all other Collateral purported to be pledged by it hereunder, in
each case free and clear of any Liens except for the Liens granted to the
Secured Parties, pursuant to this Agreement and except for Liens in favor of the
Custodian (“Custodian Liens”). No security agreement or financing statement with
respect to all or any part of the interests of any Pledgor in the Collateral is
on file or of record in any government or public office, and no Pledgor has
filed or consented to the filing of any such statement or notice, except Uniform
Commercial Code financing statements naming the Administrative Agent as secured
party.

(b)       With respect to each Account and the Pledged Assets held or contained
therein or credited thereto, this Agreement, together with (i) the execution by
the applicable Custodian of a control agreement with respect to each such
Account in substantially the form of Exhibit A hereto or otherwise satisfying
the applicable requirements of Sections 8-106 and 9-104 of the Uniform
Commercial Code (each, a “Control Agreement”), and (ii) to the extent the laws
of Bermuda are applicable, the registration of the charge created by this
Agreement with the Bermuda Registrar of Companies on Form 9 pursuant to Section
55 of the Companies Act 1981, creates, and at all times shall constitute, a
valid and perfected security interest in and Lien upon the Collateral owned by
such Pledgor in favor of the Administrative Agent, for the benefit of the
Secured Parties, superior and prior to the rights of all other Persons therein
(except for the security interest created by this Agreement and except for
Custodian Liens), and no other or

 

3

 

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

additional filings, registrations, recordings or actions are or shall be
necessary or appropriate in order to maintain the perfection and priority of
such Lien and security interest.

4.       Certain Covenants.

(a)       Each Pledgor agrees that in the event any security and other property
received by such Pledgor to be credited to an Account is registered in the name
of such Pledgor, payable to the order of such Pledgor or specially indorsed to
such Pledgor, such Pledgor shall deliver such security or other property to the
applicable Custodian indorsed to such Custodian or in blank.

(b)       No Pledgor will (i) change its name, identity or corporate structure,
(ii) change its chief executive office from the location thereof listed on
Annex B, or (iii) change the jurisdiction of its incorporation or organization
from the jurisdiction listed on Annex B (whether by merger or otherwise), unless
in each case such Pledgor has (1) given twenty (20) days’ prior written notice
to the Administrative Agent of its intention to do so, together with information
regarding any such new location and such other information in connection with
such proposed action as the Administrative Agent may reasonably request, and
(2) delivered to the Administrative Agent ten (10) days prior to any such change
or removal such documents, instruments and financing statements as may be
required by the Administrative Agent, all in form and substance satisfactory to
the Administrative Agent, paid all necessary filing and recording fees and
taxes, and taken all other actions reasonably requested by the Administrative
Agent (including, at the request of the Administrative Agent, delivery of
opinions of counsel reasonably satisfactory to the Administrative Agent to the
effect that all such actions have been taken), in order to perfect and maintain
the Lien upon and security interest in the Collateral provided for herein in
accordance with the provisions of Section 3(b).

(c)       Except as permitted by the Credit Agreement, no Pledgor will sell,
transfer or otherwise dispose of, grant any option with respect to, or mortgage,
pledge, grant any Lien with respect to or otherwise encumber any of the
Collateral or any interest therein, except for the security interest created in
favor of the Secured Parties hereunder, the Custodian Liens and except as may be
otherwise expressly permitted in accordance with the terms of this Agreement and
the Credit Agreement. No Pledgor will purchase any securities on margin using
any of the Collateral as collateral.

(d)       Any Pledgor may add a new Custodial Account as an “Account” under this
Agreement, and/or terminate an Account or remove an Account as Collateral
hereunder, in each case by executing and delivering to the Administrative Agent
a completed supplement to this Agreement in the form of Exhibit B (each, a
“Pledge Supplement”); provided that (i) prior to or concurrently with the
addition of any new Account, the applicable Pledgor shall deliver or cause to be
delivered to the Administrative Agent a true and correct copy of a statement of
such Account prepared by the Custodian thereof, indicating the contents of such
Account as of a recent date, a new Control Agreement (or supplement to an
existing Control Agreement) executed by the applicable Custodian and the
Pledgor, evidencing the establishment of such Account and the perfection of the
security interest of the Administrative Agent therein, and (if applicable) a
copy of any new Custodial Agreement with respect to such Account, and (ii) no
Pledgor may terminate an Account or remove an Account as Collateral hereunder
unless, immediately after giving effect thereto, (A) the Collateral Value (with
respect to all remaining

 

4

 

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

Accounts of such Pledgor and all other Collateral pledged by such Pledgor
pursuant to any Credit Document) would equal or exceed the sum of such Pledgor’s
aggregate Tranche 2 Letter of Credit Exposure and (B) no other Default or Event
of Default would exist. Each Pledgor hereby authorizes the Administrative Agent
to attach each such Pledge Supplement to this Agreement, and agrees that all
Collateral listed or referred to on any Pledge Supplement shall for all purposes
be deemed Collateral hereunder and shall be subject to the provisions hereof.

(e)       In the event any Custodian gives notice of termination of any Control
Agreement covering an Account where any Pledged Assets are held, the applicable
Pledgors shall have the right to appoint a successor Custodian, which shall be a
commercial bank or trust company organized under the laws of the United States
or of any State thereof and having a combined capital and surplus of at least
$1,000,000,000 and which appointment shall be subject to the consent of the
Administrative Agent (which consent shall not be unreasonably withheld);
provided that prior to the effective date of such termination (i) each
applicable Pledgor shall have entered into a custodial agreement with the
successor Custodian in form and substance reasonably satisfactory to the
Administrative Agent, (ii) the retiring Custodian shall have transferred the
financial assets and other property (including cash) contained in each
applicable Account to the successor Custodian, and (iii) the successor Custodian
and each applicable Pledgor shall have entered into a Control Agreement with the
Administrative Agent in form and substance reasonably satisfactory to the
Administrative Agent and the applicable Pledgors shall have executed and
delivered or caused to be delivered all such other documents, opinions and
instruments, and taken all such other action, reasonably requested by the
Administrative Agent in order to perfect the Administrative Agent’s security
interest in the affected Collateral. If no successor Custodian shall have been
so appointed by the Pledgors, and shall have accepted such appointment, prior to
the effective date of termination of the applicable Control Agreement, then the
Administrative Agent may, on behalf of the Pledgors, appoint a successor
Custodian or may direct the retiring Custodian to transfer the financial assets
and other property (including cash) contained in each applicable Account to the
Administrative Agent, to be held by the Administrative Agent as Collateral for
the benefit of the Secured Parties.

(f)        Each Pledgor agrees that it will, at its own cost and expense, take
any and all actions necessary to warrant and defend the right, title and
interest of the Secured Parties in and to the Collateral against the claims and
demands of all other Persons.

5.         Voting Rights; Dividends and other Distributions. So long as no Event
of Default shall have occurred and be continuing (or would occur as a result
thereof), and except as provided otherwise herein or in any other Credit
Document, (i) each Pledgor shall be entitled (as against the Administrative
Agent and subject to the terms of any custodial or other agreements with any
Custodian) to exercise all voting and other consensual rights pertaining to its
Pledged Assets, and (ii) all interest, income, dividends, distributions and
other amounts payable in cash in respect of the Pledged Assets may be paid to
the applicable Custodian and retained in the Accounts for the benefit of the
Pledgors, as applicable, or distributed to the Pledgors, as applicable;
provided, however, that all such interest, income, dividends, distributions and
other amounts shall, at all times after the occurrence and during the
continuance of an Event of Default and upon notice from the Administrative Agent
to the applicable Custodian, be paid to the Administrative Agent and retained by
it as part of the Collateral (except to the extent applied upon receipt to the
repayment of the Secured Obligations). All interest, income, dividends,

 

5

 

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

distributions or other amounts that are received by any Pledgor in violation of
the provisions of this Section shall be received in trust for the benefit of the
Administrative Agent, shall be segregated from other property or funds of such
Pledgor and shall be forthwith delivered to the Administrative Agent as
Collateral in the same form as so received (with any necessary endorsements).
For purposes of the foregoing provisions of this Section and to the extent
applicable thereto, each Pledgor hereby waives the requirement of
Sections 9-207(c)(1) and (c)(2) of the Uniform Commercial Code that the
Administrative Agent apply any money or funds received from the Collateral to
reduce the Secured Obligations.

6.         Remedies. If an Event of Default shall have occurred and be
continuing, the Administrative Agent shall be entitled to exercise in respect of
the Collateral all of its rights, powers and remedies provided for herein or
otherwise available to it under any other Credit Document, by law, in equity or
otherwise, including all rights and remedies of a secured party under the
Uniform Commercial Code, and shall be entitled in particular, but without
limitation of the foregoing, to exercise the following rights, which each
Pledgor agrees to be commercially reasonable:

(a)       To notify each Custodian of the Event of Default and to direct each
Custodian immediately to cease complying with entitlement orders or other
directions concerning the Accounts originated by or on behalf of any Pledgor and
to cease distributing interest and dividends on property in the Accounts to or
for the benefit of the Pledgors, and thereafter to comply with entitlement
orders and other directions concerning the Accounts originated by the
Administrative Agent;

(b)       To notify the parties obligated on any of the Collateral of the
security interest in favor of the Administrative Agent created hereby and to
direct all such Persons to make payments of all amounts due thereon or
thereunder directly to the Administrative Agent or to an account designated by
the Administrative Agent; and in such instance and from and after such notice,
all amounts and Proceeds (including wire transfers, checks and other
instruments) received by any Pledgor in respect of any Collateral shall be
received in trust for the benefit of the Administrative Agent hereunder, shall
be segregated from the other funds of any Pledgor and shall be forthwith
deposited into such account or paid over or delivered to the Administrative
Agent in the same form as so received (with any necessary endorsements or
assignments), to be held as Collateral and applied to the Secured Obligations as
provided herein;

(c)       To direct each Custodian to transfer to or register in the name of the
Administrative Agent or the name of any of its agents or nominees all or any
part of the Collateral, and thereafter to do the same, without notice to any
Pledgor and with or without disclosing that such Collateral is subject to the
security interest created hereunder;

(d)       To exercise all voting, consensual and other rights and powers
pertaining to the Pledged Assets (whether or not transferred into the name of
the Administrative Agent), at any meeting of shareholders, partners, members or
otherwise, and any and all rights of conversion, exchange or subscription and
any other rights, privileges or options pertaining to the Pledged Assets as if
it were the absolute owner thereof, and in connection therewith, the right to
deposit and deliver any and all of the Pledged Assets with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as the Administrative Agent

 

6

 

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

may determine, and give all consents, waivers and ratifications in respect of
the Pledged Assets, all without liability except to account for any property
actually received by it, but the Administrative Agent shall have no duty to
exercise any such right, privilege or option or give any such consent, waiver or
ratification and shall not be responsible for any failure to do so or delay in
so doing; and for the foregoing purposes each Pledgor will promptly execute and
deliver or cause to be executed and delivered to the Administrative Agent, upon
request, all such proxies and other instruments as the Administrative Agent may
reasonably request to enable the Administrative Agent to exercise such rights
and powers; and in furtherance of the foregoing and without limitation thereof,
each Pledgor hereby irrevocably constitutes and appoints the Administrative
Agent as the true and lawful proxy and attorney-in-fact of such Pledgor, with
full power of substitution in the premises, to exercise, while an Event of
Default has occurred and is continuing, all such voting, consensual and other
rights and powers to which any holder of any Pledged Assets would be entitled by
virtue of holding the same, which proxy and power of attorney, being coupled
with an interest, is irrevocable and shall be effective for so long as this
Agreement shall be in effect;

(e)       To sell, resell, assign and deliver, and to direct each Custodian to
sell, resell, assign and deliver, in the sole discretion of the Administrative
Agent, all or any of the Collateral, in one or more parcels, on any securities
exchange on which any Pledged Assets may be listed, at public or private sale,
at any of the Administrative Agent’s offices or elsewhere, for cash, upon credit
or for future delivery, at such time or times and at such price or prices and
upon such other terms as the Administrative Agent may deem satisfactory. If any
of the Collateral is sold upon credit or for future delivery, the Administrative
Agent shall not be liable for the failure of the purchaser to purchase or pay
for the same and, in the event of any such failure, the Administrative Agent may
resell or direct the resale of such Collateral. In no event shall any Pledgor be
credited with any part of the Proceeds of sale of any Collateral until and to
the extent cash payment in respect thereof has actually been received by the
Administrative Agent. Each purchaser at any such sale shall hold the property
sold absolutely, free from any claim or right of whatsoever kind, including any
equity or right of redemption of any Pledgor, and each Pledgor hereby expressly
waives all rights of redemption, stay or appraisal, and all rights to require
the Administrative Agent to marshal any assets in favor of such Pledgor or any
other party or against or in payment of any or all of the Secured Obligations,
that it has or may have under any rule of law or statute now existing or
hereafter adopted. No demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law, as referred to below), all of which
are hereby expressly waived by each Pledgor, shall be required in connection
with any sale or other disposition of any part of the Collateral. If any notice
of a proposed sale or other disposition of any part of the Collateral shall be
required under applicable law, the Administrative Agent shall give the
applicable Pledgor at least ten (10) days’ prior notice of the time and place of
any public sale and of the time after which any private sale or other
disposition is to be made, which notice each Pledgor agrees is commercially
reasonable. The Administrative Agent shall not be obligated to make any sale of
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale may have been given. The Administrative Agent may, without notice
or publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. Upon each public sale and, to the extent
permitted by applicable law, upon each private sale, the Administrative Agent
may purchase all or any of the Collateral being sold, free from any equity,

 

7

 

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

right of redemption or other claim or demand, and may make payment therefor by
endorsement and application (without recourse) of the Secured Obligations in
lieu of cash as a credit on account of the purchase price for such Collateral;
and

(f)        The Administrative Agent shall not deliver a Notice of Exclusive
Control (as defined in any Control Agreement) or any other entitlement order
with respect to any Pledged Asset unless an Event of Default has occurred and is
continuing.

7.       Application of Proceeds.

(a)       All Proceeds collected by the Administrative Agent upon any sale,
other disposition of or realization upon any of the Collateral, together with
all other moneys received by the Administrative Agent hereunder, shall be
applied as follows:

(i)  first, to the payment of all reasonable costs and expenses of such sale,
disposition or other realization, including the reasonable costs and expenses of
the Administrative Agent and the reasonable fees and expenses of its agents and
counsel and all other amounts payable to the Administrative Agent under
Section 9;

(ii) second, after payment in full of the amounts specified in clause (i) above,
to the payment of all amounts owing by any Pledgor to the Administrative Agent
and the Issuing Lender in connection with Tranche 2 Letters of Credit pursuant
to any of the Credit Documents in their respective capacities as such;

(iii)third, after payment in full of the amounts specified in clauses (i) and
(ii) above, to the payment of all other Secured Obligations owing to the Secured
Parties; and

(iv)fourth, after payment in full of the amounts specified in clauses (i), (ii)
and (iii) above, and following the occurrence of the Termination Requirements
(as hereinafter defined), to the Pledgors or any other Person lawfully entitled
to receive such surplus.

(b)       Each Pledgor shall remain liable to the extent of any deficiency
between the amount of all Proceeds realized upon sale or other disposition of
the Collateral pursuant to this Agreement and the aggregate amount of such
Pledgor’s Secured Obligations. Upon any sale of any Collateral hereunder by the
Administrative Agent (whether by virtue of the power of sale herein granted,
pursuant to judicial proceeding, or otherwise), the receipt of the
Administrative Agent or the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold, and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Administrative Agent or such officer
or be answerable in any way for the misapplication thereof.

(c)       Upon the occurrence and during the continuance of an Event of Default,
the Administrative Agent shall have the right to cause to be established and
maintained, at its principal office or such other location or locations as it
may establish from time to time in its discretion, one or more accounts
(collectively, “Collateral Accounts”) for the collection of cash Proceeds of the
Collateral. Such Proceeds, when deposited, shall continue to constitute
Collateral for the Secured Obligations and shall not constitute payment thereof
until applied as herein provided. The Administrative Agent shall have sole
dominion and control over all funds

 

8

 

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

deposited in any Collateral Account, and such funds may be withdrawn therefrom
only by the Administrative Agent. Upon the occurrence and during the continuance
of an Event of Default, the Administrative Agent shall have the right to apply
amounts held in the Collateral Accounts in payment of the Secured Obligations in
the manner provided for in subsection (a) above.

(d)       Each of the Secured Parties, by their acceptance of the benefits
hereof and of the other Credit Documents, agrees and acknowledges that if any
Secured Party receives a distribution on account of undrawn amounts with respect
to Tranche 2 Letters of Credit issued under the Credit Agreement, such amounts
shall be paid to the Administrative Agent and held by it, for the ratable
benefit of the Secured Parties, as cash collateral for the repayment of the
Secured Obligations as provided for in subsection (a) above.

8.         Private Sales. Each Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as amended (the
“Securities Act”), and applicable state securities laws as in effect from time
to time, the Administrative Agent may be compelled, with respect to any sale of
all or any part of the Pledged Assets conducted without registration or
qualification under the Securities Act and such state securities laws, to limit
purchasers to any one or more Persons who will represent and agree, among other
things, to acquire such Pledged Assets for their own account, for investment and
not with a view to the distribution or resale thereof. Each Pledgor acknowledges
that any such private sales may be made in such manner at prices and on terms
less favorable than those obtainable through a public sale without such
restrictions (including, without limitation, a public offering made pursuant to
a registration statement under the Securities Act), and, notwithstanding such
circumstances, agrees that any such private sale shall be not deemed to have not
been made in a commercially reasonable manner solely by virtue of such
restrictions and agrees that the Administrative Agent shall have no obligation
to conduct any public sales and no obligation to delay the sale of any Pledged
Assets for the period of time necessary to permit its registration for public
sale under the Securities Act and applicable state securities laws, and shall
not have any responsibility or liability as a result of its election not to
conduct any such public sales or delay the sale of any Pledged Assets,
notwithstanding the possibility that a substantially higher price might be
realized if the sale were deferred until after such registration. Each Pledgor
hereby waives any claims against the Administrative Agent or any other Secured
Party arising by reason of the fact that the price at which any Pledged Assets
may have been sold at any private sale was less than the price that might have
been obtained at a public sale or was less than the aggregate amount of the
Secured Obligations.

9.         Indemnity and Expenses. Each Pledgor agrees:

(a)       To indemnify and hold harmless the Administrative Agent, each other
Secured Party and each of their respective directors, officers, employees,
agents and affiliates from and against any and all claims, damages, demands,
losses, obligations, judgments and liabilities (including, without limitation,
reasonable attorneys’ fees and expenses) in any way arising out of or in
connection with this Agreement and the transactions contemplated hereby, except
to the extent the same shall arise as a result of the gross negligence or
willful misconduct of the party seeking to be indemnified; and

 

9

 

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

(b)       To pay and reimburse the Administrative Agent upon demand for all
reasonable costs and expenses (including, without limitation, reasonable
attorneys’ fees and expenses) that the Administrative Agent may incur in
connection with (i) the custody, use or preservation of, or the sale of,
collection from or other realization upon, any of the Collateral, including the
reasonable expenses of re-taking, holding, preparing for sale or lease, selling
or otherwise disposing of or realizing on the Collateral, (ii) the exercise or
enforcement of any rights or remedies granted hereunder (including, without
limitation, under Sections 6 and 8), under any of the other Credit Documents or
otherwise available to it (whether at law, in equity or otherwise), or (iii) the
failure by any Pledgor to perform or observe any of the provisions hereof. The
provisions of this Section shall survive the occurrence of the Termination
Requirements (as hereinafter defined).

10.       The Administrative Agent; Standard of Care. The Administrative Agent
will hold all items of the Collateral at any time received under this Agreement
in accordance with the provisions hereof. The obligations of the Administrative
Agent as holder of the Collateral and interests therein and with respect to the
disposition thereof, and otherwise under this Agreement and the other Credit
Documents, are only those expressly set forth in this Agreement and the other
Credit Documents. The Administrative Agent shall act hereunder at the direction,
or with the consent, of the Required Tranche 2 Lenders on the terms and
conditions set forth in the Credit Agreement. The powers conferred on the
Administrative Agent hereunder are solely to protect its interest, on behalf of
the Secured Parties, in the Collateral, and shall not impose any duty upon it to
exercise any such powers. Except for treatment of the Collateral in its
possession in a manner substantially equivalent to that which the Administrative
Agent, in its individual capacity, accords its own property of a similar nature,
and the accounting for moneys actually received by it hereunder, the
Administrative Agent shall have no duty as to any Collateral or as to the taking
of any necessary steps to preserve rights against prior parties or any other
rights pertaining to the Collateral. Neither the Administrative Agent nor any
other Secured Party shall be liable to any Pledgor (i) for any loss or damage
sustained by such Pledgor, or (ii) for any loss, damage, depreciation or other
diminution in the value of any of the Collateral that may occur as a result of
or in connection with or that is in any way related to any exercise by the
Administrative Agent or any other Secured Party of any right or remedy under
this Agreement, any failure to demand, collect or realize upon any of the
Collateral or any delay in doing so, or any other act or failure to act on the
part of the Administrative Agent or any other Secured Party, except to the
extent that the same is caused by its own gross negligence or willful
misconduct.

11.       Authorization to File Financing Statements. Each Pledgor hereby
irrevocably authorizes the Administrative Agent, at the expense of the Pledgors,
at any time and from time to time, to file in any filing office in any
jurisdiction any initial financing statement and amendments thereto (in each
case indicating the Collateral) in order to perfect and preserve the
Administrative Agent’s security interest in the Collateral without the signature
of such Pledgor.

 

12.

Further Assurances; Attorney-in-Fact.

(a)       Each Pledgor agrees that it will join with the Administrative Agent to
execute and, at its own expense, file and refile under the Uniform Commercial
Code such financing statements, continuation statements and other documents and
instruments in such offices as the Administrative Agent may reasonably deem
necessary or appropriate, and wherever required or

 

10

 

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

permitted by law, in order to perfect and preserve the Administrative Agent’s
security interest in the Collateral, and agrees to do such further acts and
things and to execute and deliver to the Administrative Agent such additional
conveyances, assignments, agreements (including control agreements) and
instruments as the Administrative Agent may reasonably require or deem advisable
to perfect, establish, confirm and maintain the security interest and Lien
provided for herein, to carry out the purposes of this Agreement or to further
assure and confirm unto the Administrative Agent its rights, powers and remedies
hereunder.

(b)       Each Pledgor hereby irrevocably appoints the Administrative Agent its
lawful attorney-in-fact, with full authority in the place and stead of such
Pledgor and in the name of such Pledgor, the Administrative Agent or otherwise,
and with full power of substitution in the premises (which power of attorney,
being coupled with an interest, is irrevocable for so long as this Agreement
shall be in effect), from time to time in the Administrative Agent’s discretion
after the occurrence and during the continuance of an Event of Default (except
for the actions described in clause (i) below, which may be taken by the
Administrative Agent without regard to whether an Event of Default has occurred)
to take any action and to execute any instruments that the Administrative Agent
may deem necessary or advisable to accomplish the purpose of this Agreement,
including, without limitation:

(i)  to sign the name of such Pledgor on any financing statement, continuation
statement, notice or other similar document that, in the Administrative Agent’s
opinion, should be made or filed in order to perfect or continue perfected the
security interest granted under this Agreement;

(ii) to ask, demand, collect, sue for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral;

(iii)to receive, endorse and collect any checks, drafts, instruments, chattel
paper and other orders for the payment of money made payable to such Pledgor
representing any interest, income, dividend, distribution or other amount
payable in respect of any of the Collateral and to give full discharge for the
same;

(iv)to file any claims or take any action or institute any proceedings that the
Administrative Agent may deem necessary or advisable for the collection of any
of the Collateral or otherwise to enforce the rights of the Administrative Agent
with respect to any of the Collateral; and

(v) to use, sell, assign, transfer, pledge, make any agreement with respect to
or otherwise deal with any and all of the Collateral as fully and completely as
though the Administrative Agent were the absolute owner of the Collateral for
all purposes, and to do from time to time, at the Administrative Agent’s option
and the Pledgors’ expense, all other acts and things deemed necessary by the
Administrative Agent to protect, preserve or realize upon the Collateral and to
more completely carry out the purposes of this Agreement.

 

11

 

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

(c)       If any Pledgor fails to perform any covenant or agreement contained in
this Agreement after written request to do so by the Administrative Agent
(provided that no such request shall be necessary at any time after the
occurrence and during the continuance of an Event of Default), the
Administrative Agent may itself perform, or cause the performance of, such
covenant or agreement and may take any other action that it deems necessary and
appropriate for the maintenance and preservation of the Collateral or its
security interest therein, and the reasonable expenses so incurred in connection
therewith shall be payable by the Pledgors under Section 9.

13.       Waivers. Each Pledgor, to the greatest extent not prohibited by
applicable law, hereby (i) agrees that it will not invoke, claim or assert the
benefit of any rule of law or statute now or hereafter in effect (including,
without limitation, any right to prior notice or judicial hearing in connection
with the Administrative Agent’s possession, custody or disposition of any
Collateral or any appraisal, valuation, stay, extension, moratorium or
redemption law), or take or omit to take any other action, that would or could
reasonably be expected to have the effect of delaying, impeding or preventing
the exercise of any rights and remedies in respect of the Collateral, the
absolute sale of any of the Collateral or the possession thereof by any
purchaser at any sale thereof, and waives the benefit of all such laws and
further agrees that it will not hinder, delay or impede the execution of any
power granted hereunder to the Administrative Agent, but that it will permit the
execution of every such power as though no such laws were in effect, (ii) waives
all rights that it has or may have under any rule of law or statute now existing
or hereafter adopted to require the Administrative Agent to marshal any
Collateral or other assets in favor of such Pledgor or any other party or
against or in payment of any or all of the Secured Obligations, and (iii) waives
all rights that it has or may have under any rule of law or statute now existing
or hereafter adopted to demand, presentment, protest, advertisement or notice of
any kind (except notices expressly provided for herein).

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

15.       Pledgor’s Obligations Absolute. Each Pledgor agrees that its
obligations hereunder, and the security interest granted to and all rights,
remedies and powers of the Administrative Agent hereunder, are irrevocable,
absolute and unconditional and shall not be discharged, limited or otherwise
affected by reason of any of the following, whether or not such Pledgor has
knowledge thereof:

 

12

 

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

(i)  any change in the time, manner or place of payment of, or in any other term
of, any Secured Obligations, or any amendment, modification or supplement to,
restatement of, or consent to any rescission or waiver of or departure from, any
provisions of the Credit Agreement, any other Credit Document or any agreement
or instrument delivered pursuant to any of the foregoing;

(ii) the invalidity or unenforceability of any Secured Obligations or any
provisions of the Credit Agreement, any other Credit Document or any agreement
or instrument delivered pursuant to any of the foregoing;

(iii)the addition or release of any Pledgor hereunder or the taking, acceptance
or release of any Secured Obligations or additional Collateral or other security
therefor;

(iv)any sale, exchange, release, substitution, compromise, nonperfection or
other action or inaction in respect of any Collateral or other direct or
indirect security for any Secured Obligations, or any discharge, modification,
settlement, compromise or other action or inaction in respect of any Secured
Obligations;

(v) any agreement not to pursue or enforce or any failure to pursue or enforce
(whether voluntarily or involuntarily as a result of operation of law, court
order or otherwise) any right or remedy in respect of any Secured Obligations or
any Collateral or other security therefor, or any failure to create, protect,
perfect, secure, insure, continue or maintain any Liens in any such Collateral
or other security;

(vi)the exercise of any right or remedy available under the Credit Documents, at
law, in equity or otherwise in respect of any Collateral or other security for
any Secured Obligations, in any order and by any manner thereby permitted,
including, without limitation, foreclosure on any such Collateral or other
security by any manner of sale thereby permitted, whether or not every aspect of
such sale is commercially reasonable;

(vii)           any bankruptcy, reorganization, arrangement, liquidation,
insolvency, dissolution, termination, reorganization or like change in the
corporate structure or existence of any other Pledgor or any other Person
directly or indirectly liable for any Secured Obligations;

(viii)          any manner of application of any payments by or amounts received
or collected from any Person, by whomsoever paid and howsoever realized, whether
in reduction of any Secured Obligations or any other obligations of any other
Person directly or indirectly liable for any Secured Obligations, regardless of
what Secured Obligations may remain unpaid after any such application; or

(ix)any other circumstance that might otherwise constitute a legal or equitable
discharge of, or a defense, set-off or counterclaim available to, any Pledgor or
a surety or guarantor generally, other than the occurrence of all of the
following: (x) the payment in full of the Secured Obligations, (y) the
termination of the obligation of the Issuing Lender to issue Tranche 2 Letters
of Credit under the Credit Agreement, and (z) the termination or expiration of
all outstanding Tranche 2 Letters of Credit under the Credit Agreement

 

13

 

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

(the events in clauses (x), (y) and (z) above, collectively, the “Termination
Requirements”).

16.       Enforcement. By its acceptance of the benefits of this Agreement, each
Tranche 2 Lender agrees that this Agreement may be enforced only by the
Administrative Agent, acting upon the instructions or with the consent of such
of the Tranche 2 Lenders as may be required under the provisions of the Credit
Agreement, and that no Tranche 2 Lender shall have any right individually to
enforce or seek to enforce this Agreement or to realize upon any Collateral or
other security given to secure the payment and performance of the Secured
Obligations.

17.       Amendments, Waivers, etc. No amendment, modification, waiver,
discharge or termination of, or consent to any departure by any Pledgor from,
any provision of this Agreement shall be effective unless in a writing signed by
the Administrative Agent and such of the Tranche 2 Lenders as may be required
under the provisions of the Credit Agreement to concur in the action then being
taken, and then the same shall be effective only in the specific instance and
for the specific purpose for which given.

18.       Continuing Security Interest; Term; Successors and Assigns;
Assignment; Termination and Release; Survival. This Agreement shall create a
continuing security interest in the Collateral and shall secure the payment and
performance of all of the Secured Obligations as the same may arise and be
outstanding at any time and from time to time from and after the date hereof,
and shall (i) remain in full force and effect until the occurrence of the
Termination Requirements, (ii) be binding upon and enforceable against each
Pledgor and its successors and assigns (provided, however, that no Pledgor may
sell, assign or transfer any of its rights, interests, duties or obligations
hereunder without the prior written consent of such of the Tranche 2 Lenders as
may be required under the Credit Agreement) and (iii) inure to the benefit of
and be enforceable by each Secured Party and its successors and assigns. Upon
any sale or other disposition by any Pledgor of any Collateral in a transaction
expressly permitted hereunder or under or pursuant to the Credit Agreement or
any other applicable Credit Document, the Lien and security interest created by
this Agreement in and upon such Collateral shall be automatically released, and
upon the satisfaction of all of the Termination Requirements, this Agreement and
the Lien and security interest created hereby shall terminate; and in connection
with any such release or termination, the Administrative Agent, at the request
and expense of the applicable Pledgor, will execute and deliver to such Pledgor
such documents and instruments evidencing such release or termination as such
Pledgor may reasonably request and will assign, transfer and deliver to such
Pledgor, without recourse and without representation or warranty, the Collateral
(or, in the case of any partial release of Collateral, such of the Collateral so
being released). All representations, warranties, covenants and agreements
herein shall survive the execution and delivery of this Agreement and any
amendment or accession.

19.       Other Terms. All terms in this Agreement that are not capitalized
shall have the meanings provided by the Uniform Commercial Code to the extent
the same are used or defined therein. As used in this Agreement, “Uniform
Commercial Code” shall mean the Uniform Commercial Code as the same may be in
effect from time to time in the State of New York; provided that if, by reason
of applicable law, the validity or perfection of any security interest in any
Collateral granted under this Agreement is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than New York, then as to the validity
or perfection, as the case may

 

14

 

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

be, of such security interest, “Uniform Commercial Code” shall mean the Uniform
Commercial Code as in effect from time to time in such other jurisdiction.

20.       Notices. All notices and other communications provided for hereunder
shall be given to the parties in the manner and subject to the other notice
provisions set forth in the Credit Agreement.

21.       Governing Law. The provisions of the Credit Agreement regarding
governing law, jurisdiction, waiver of immunity and jury trial waiver shall
apply mutatis mutandis in this Agreement to the parties hereto to the same
extent as such provisions apply to them under the Credit Agreement.

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

23.       Construction. The headings of the various sections and subsections of
this Agreement have been inserted for convenience only and shall not in any way
affect the meaning or construction of any of the provisions hereof. Unless the
context otherwise requires, words in the singular include the plural and words
in the plural include the singular.

24.       Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.

 

15

 

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

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

 

EVEREST RE GROUP, LTD.

 

 

By: ___________________

 

Title: ___________________

 

 

EVEREST REINSURANCE (BERMUDA), LTD.

 

 

By: ___________________

 

Title: ___________________

 

 

EVEREST INTERNATIONAL REINSURANCE, LTD.

 

 

By: ___________________

 

Title: ___________________

 

 

 

 

 

Accepted and agreed to:

 

WACHOVIA BANK, NATIONAL ASSOCIATION, as

Administrative Agent

 

 

By:   _________________________________

 

Title:   _________________________________

16

 

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

ANNEX A

 

ACCOUNTS

 

1.   “Account Number 109295 Everest Re Bermuda, UK Branch” established and
maintained by The Bank of New York as custodian.

2.   “Account Number 109297, Everest International Reinsurance, Ltd.”
established and maintained by The Bank of New York as custodian.

3.   “Account Number 109296 Everest Re Bermuda, Ltd.” established and maintained
by The Bank of New York as custodian.

4.   “Account Number 109386 Everest Re Group, Ltd.” established and maintained
by The Bank of New York as custodian.

 

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

ANNEX B

 

JURISDICTION OF ORGANIZATION/

LOCATION OF CHIEF EXECUTIVE OFFICE

 

 

1.

Everest Reinsurance (Bermuda) Ltd.

Jurisdiction of organization: Bermuda

Chief executive office

Wessex House

45 Reid Street, 2nd Floor

P.O. Box HM 845

Hamilton, Bermuda HM DX

 

2.

Everest Re Group, Ltd.

Jurisdiction of organization: Bermuda

Chief executive office

Wessex House

45 Reid Street, 2nd Floor

P.O. Box HM 845

Hamilton, Bermuda HM DX

 

3.

Everest International Reinsurance, Ltd.

Jurisdiction of organization: Bermuda

Chief executive office

Wessex House

45 Reid Street, 2nd Floor

P.O. Box HM 845

Hamilton, Bermuda HM DX

 

 

2

 

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

EXHIBIT A

FORM OF CONTROL AGREEMENT

 

[attached hereto]

 

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

EXHIBIT B

FORM OF PLEDGE SUPPLEMENT

 

THIS PLEDGE SUPPLEMENT, dated as of _______________, _____, is delivered by
[NAME OF PLEDGOR] (the “Pledgor”) pursuant to Section 4(d) of the Pledge and
Security Agreement referred to hereinbelow. The Pledgor hereby agrees that this
Pledge Supplement may be attached to the Amended and Restated Pledge and
Security Agreement, dated as of July 27, 2007, made by the Pledgors named
therein in favor of Wachovia Bank, National Association, as Administrative Agent
(as amended, modified or supplemented from time to time, the “Pledge and
Security Agreement,” capitalized terms defined therein being used herein as
therein defined).

The Pledgor hereby pledges, assigns and delivers to the Administrative Agent,
for the ratable benefit of the Secured Parties, and grants to the Administrative
Agent, for the ratable benefit of the Secured Parties, a Lien upon and security
interest in, all of the Pledgor’s right, title and interest in and to the
account listed on Annex A to this Pledge Supplement (the “New Account”),
together with all securities, money, instruments and other assets now or at any
time hereafter held or contained in or credited to the New Account (all as more
completely described in clause (ii) of Section 1 of the Pledge and Security
Agreement) and all Proceeds of the foregoing (the New Account, together with all
such securities, money, instruments and other assets and the Proceeds thereof,
collectively, the “New Collateral”). The Pledgor agrees that the New Account
shall be deemed to be an “Account” within the meaning of the Pledge and Security
Agreement, and that the New Account, together with all other New Collateral,
shall become part of the Collateral and shall secure all of the Secured
Obligations as provided in the Pledge and Security Agreement. This Pledge
Supplement and its attachments are hereby incorporated into the Pledge and
Security Agreement and made a part thereof.

 

[NAME OF PLEDGOR]

 

 

By:

________________________________

 

 

Title:

________________________________

 

 

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

EXHIBIT F

 

FORM OF

COLLATERAL VALUE REPORT

 

 

____________, 200_

 

Wachovia Bank, National Association,

as Administrative Agent

301 South College Street, 6th Floor NC0760

Charlotte, North Carolina 28288-0760

Attn: Laura Douglas / Will Goley

 

Ladies and Gentlemen:

 

Reference is made to the Amended and Restated Credit Agreement, dated as of July
27, 2007, among Everest Re Group, Ltd., a company organized under the laws of
Bermuda (“Everest Group”), Everest Reinsurance (Bermuda), Ltd., a company
organized under the laws of Bermuda (“Everest Bermuda”), Everest International
Reinsurance, Ltd., a company organized under the laws of Bermuda (“Everest
International”), and the other Subsidiary Borrowers named therein (collectively
with Everest Group, Everest Bermuda and Everest International, the “Borrowers”),
the Lenders defined therein and Wachovia Bank, National Association
(“Wachovia”), as administrative agent for the Lenders (as amended or otherwise
modified from time to time, the “Credit Agreement”). Terms defined in the Credit
Agreement are, unless otherwise defined herein or the context otherwise
requires, used herein as defined therein.

This Collateral Value Report is delivered pursuant to Section 6.10(b) of the
Credit Agreement. The date of this Collateral Value Report is _____________,
200__ (the “Report Date”). Set forth on Attachment A is the computation of the
Collateral Value of both the Borrower and the aggregate Collateral Value of the
Borrowers and certain other information required by Section 6.10(b) of the
Credit Agreement as of ______________, 200__ (the “Valuation Date”), calculated
in accordance with the definition of “Collateral Value” contained in the Credit
Agreement and the other provisions of the Credit Agreement (including Section
8.12 and Schedule 1.1(b) thereto).

The undersigned hereby certifies that the information on Attachment A correctly
sets forth the Collateral Value (in the aggregate and for each category of
Collateral) of the Borrower and for all Borrowers and the Tranche 2 Letter of
Credit Exposure (in the aggregate and with respect to Tranche 2 Letters of
Credit issued for the account of the Borrower) as of the Valuation Date, that
the aggregate Tranche 2 Letter of Credit Exposure does not exceed the aggregate
Collateral Value as of the Valuation Date, that the Tranche 2 Letter of Credit
Exposure with respect to Tranche 2 Letters of Credit issued for the account of
the Borrower does not exceed the Collateral Value of the Borrower and that
nothing has come to the attention of the undersigned to

 

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

cause the undersigned to believe that the Administrative Agent, for the ratable
benefit of the Tranche 2 Lenders, does not have a first priority perfected Lien
(subject to permitted Liens in favor of Custodians) on and security interest in
the Collateral set forth on Attachment A as of the Report Date.

 

[Name of Borrower]

 

 

By:

_______________________________

 

 

Name:

_______________________________

 

 

Title:

_______________________________

 

 

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

ATTACHMENT A

 

Collateral Value for all Borrowers

 

Type of Security

Amount/

Market Value

Eligible Percentage

 

 

Collateral Value

Cash Denominated in U.S. Dollars

 

 

100%

 

Prime bank certificates of deposit issued by U.S. banks rated Aa3/AA- or better

 

95%

 

U.S. Government Securities

Maturity 2 years or less

Maturity over 2 years

 

 

 

95% of Market

90% of Market

 

Investment-grade municipal bonds (Rating Aaa/AAA – Baa3/BBB-)

Maturity 5 years or less

Maturity over 5 years

 

 

 

85% of Market

80% of Market

 

Investment-grade corporate bonds (Rating Aa3/AA- or better, non-convertible,
NYSE-traded)

Maturity 2 years or less

Maturity over 2 years

 

 

 

90% of Market

85% of Market

 

Investment-grade corporate bonds (Rating A1/A+ to Baa3/BBB-, non-convertible,
NYSE-traded)

Maturity 2 years or less

Maturity over 2 years

 

 

 

85% of Market

80% of Market

 

Commercial paper (Rating A1-A2, P1-P2)

 

85% of Market

 

Total Aggregate Collateral Value

 

 

$

 

Aggregate Tranche 2 Letter of Credit Exposure

 

 

Beneficiary

 

Date

 

Undrawn Amount

 

Unreimbursed

Drawings

 

 

 

$

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Tranche 2 Letter of Credit Exposure

 

$

$

 

Ratio of aggregate Collateral Value to aggregate Tranche 2 Letter of Credit
Exposure: ____________

 

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

Collateral Value for Borrower

 

Type of Security

Amount/

Market Value

Eligible Percentage

 

 

Collateral Value

Cash Denominated in U.S. Dollars

 

 

100%

 

Prime bank certificates of deposit issued by U.S. banks rated Aa3/AA- or better

 

95%

 

U.S. Government Securities

Maturity 2 years or less

Maturity over 2 years

 

 

 

95% of Market

90% of Market

 

Investment-grade municipal bonds (Rating Aaa/AAA – Baa3/BBB-)

Maturity 5 years or less

Maturity over 5 years

 

 

 

85% of Market

80% of Market

 

Investment-grade corporate bonds (Rating Aa3/AA- or better, non-convertible,
NYSE-traded)

Maturity 2 years or less

Maturity over 2 years

 

 

 

 

90% of Market

85% of Market

 

Investment-grade corporate bonds (Rating A1/A+ to Baa3/BBB-, non-convertible,
NYSE-traded)

Maturity 2 years or less

Maturity over 2 years

 

 

 

 

85% of Market

80% of Market

 

Commercial paper (Rating A1-A2, P1-P2)

 

85% of Market

 

Total Aggregate Collateral Value

 

 

$

 

 

Tranche 2 Letter of Credit Exposure of Borrower

 

 

Beneficiary

 

Date

 

Undrawn Amount

 

Unreimbursed

Drawings

 

 

 

$

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Tranche 2 Letter of Credit Exposure

 

$

$

 

Ratio of Collateral Value to Tranche 2 Letter of Credit Exposure of Borrower:
____________

 

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

EXHIBIT G

 

FORM OF JOINDER AGREEMENT

 

THIS JOINDER AGREEMENT (this “Joinder Agreement”) is made this ____ day of
___________, 20__, by __________________, a _________________ (the “New
Lender”). Reference is made to the Amended and Restated Credit Agreement, dated
as of July 27, 2007, among Everest Re Group, Ltd., a company organized under the
laws of Bermuda (“Everest Group”), Everest Reinsurance (Bermuda), Ltd., a
company organized under the laws of Bermuda (“Everest Bermuda”), Everest
International Reinsurance, Ltd., a company organized under the laws of Bermuda
(“Everest International”), and the other Subsidiary Borrowers named therein
(collectively with Everest Group, Everest Bermuda and Everest International, the
“Borrowers”), the Lenders defined therein and Wachovia Bank, National
Association (“Wachovia”), as administrative agent for the Lenders (in such
capacity, the “Administrative Agent”) (as amended or otherwise modified from
time to time, the “Credit Agreement”). Terms defined in the Credit Agreement
are, unless otherwise defined herein or the context otherwise requires, used
herein as defined therein.

 

The New Lender hereby agrees as follows:

1.         Joinder Agreement. Subject to the terms and conditions hereof and of
the Credit Agreement, the New Lender hereby agrees to become a Lender under the
Credit Agreement with an Additional Commitment of _______________ Dollars
($__________). After giving effect to this Joinder Agreement and the adjustments
required under clause (ii) of Section 2.20(c) of the Credit Agreement, the New
Lender’s Commitment and the aggregate outstanding principal amounts of the Loans
owing to the New Lender and Letter of Credit Exposure assigned to the New Lender
will be as set forth in Item 4 of Annex I attached hereto.

 

2.         New Lender Representations. The New Lender (i) confirms that it has
received a copy of the Credit Agreement, together with copies of the financial
statements of Everest Group delivered to the Administrative Agent pursuant to
the Credit Agreement and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Joinder Agreement, (ii) agrees that it will, independently and without reliance
upon the Administrative Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Credit Agreement,
(iii) appoints and authorizes the Administrative Agent to take such action as
Administrative Agent on its behalf under the Credit Documents, and to exercise
such powers and to perform such duties, as are specifically delegated to or
required of the Administrative Agent by the terms thereof, together with such
other powers as are reasonably incidental thereto, (iv) agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of the Credit Agreement are required to be

 

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

performed by it as a Lender, and (vi) specifies as its address for payments and
notices the office set forth beneath its name on its signature page hereto.1

 

3.         Effective Date. Following the execution of this Joinder Agreement by
the New Lender, an executed original hereof, together with all attachments
hereto, shall be delivered to the Administrative Agent. The effective date of
this Joinder Agreement (the “Effective Date”) shall be the date of execution
hereof by the Borrowers, the Administrative Agent and the New Lender. As of the
Effective Date, the Lender shall be a party to the Credit Agreement and, to the
extent provided in this Joinder Agreement, shall have the rights and obligations
of a Lender thereunder and under the other Credit Documents.

 

4.         Governing Law. This Joinder Agreement shall be governed by, and
construed in accordance with, the law of the State of New York (including
Sections 5-1401 and 5-1402 of the New York General Obligations Law, but
excluding all other choice of law and conflicts of law rules).

 

5.         Entire Agreement. This Joinder Agreement, together with the Credit
Agreement and the other Credit Documents, embody the entire agreement and
understanding between the parties hereto and supersede all prior agreements and
understandings of the parties, verbal or written, relating to the subject matter
hereof.

 

6.         Successors and Assigns. This Joinder Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their successors and
assigns.

 

7.         Counterparts. This Joinder Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which, when so executed and delivered, shall be an original, but all of which
shall together constitute one and the same instrument.

 

 

[signatures on following page]

_________________________

1 If the New Lender is a Foreign Lender, add the following: “and (vii) has
delivered the forms required by Section 2.17(d) of the Credit Agreement.”

 

2

 

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

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

 

 

[insert name of New Lender]

 

 

 

By:

______________________________

 

 

Title:

______________________________

 

 

Accepted this ___ day of

_____________, _____:

 

WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent

 

By:

______________________________

 

Title:

______________________________

 

 

Consented and agreed to:

 

EVEREST RE GROUP, LTD.

 

By:

_________________________________

 

Title:

_________________________________

 

EVEREST REINSURANCE (BERMUDA), LTD.

 

By:

_________________________________

 

Title:

_________________________________

 

 

EVEREST INTERNATIONAL REINSURANCE, LTD.

 

By:

_________________________________

 

Title:

_________________________________

 

 

3

 

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

ANNEX I

 

1.

Borrowers:

Everest Re Group, Ltd.
Everest Reinsurance (Bermuda), Ltd.
Everest International Reinsurance, Ltd.

 

2.

Name and Date of Credit Agreement:

 

Amended and Restated Credit Agreement, dated as of July 272, 2007, among the
Borrowers, certain Lenders from time to time parties thereto and Wachovia Bank,
National Association, as Administrative Agent.

 

3.

Date of Joinder Agreement: ___________, _____

 

4.

Amounts (as of date of adjustment pursuant to clause (ii) of Section 2.20(c) of
the Credit Agreement):

 

Facility1

Aggregate Amount of Commitment/Loans/

Letter of Credit Exposure for all Lenders under Facility

Amount of Commitment/Loans/

Letter of Credit Exposure Assigned

Percentage Assigned of Commitment/Loans/

Letter of Credit Exposure2

 

$

$

%

 

$

$

%

 

$

$

%

 

 

5.

Addresses for Payments and Notices:

 

 

New Lender:

For Funding/Notices:

 

__________________________

 

__________________________

 

__________________________

 

__________________________

 

__________________________

 

Telecopy: (___) ________

 

Reference

 

 

For Payments:

 

__________________________

_________________________

 

1 

Fill in the appropriate terminology for the types of facilities under the Credit
Agreement under which the New Lender is making its commitment (e.g. “Tranche 1
Commitment” and/or “Tranche 2 Commitment”.).

   

2 

Set forth, to at least 9 decimals, as a percentage of the
Commitment/Loans/Letter of Credit Exposure of all Lenders thereunder.

 

 

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

 

__________________________

 

__________________________

 

__________________________

 

Telecopy: (___) ________

 

Reference:

 

 

6.

Effective Date: _______________, ______ (in accordance with Section 3).

 

 

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

EXHIBIT H

 

FORM OF

ASSUMPTION AGREEMENT

 

THIS ASSUMPTION AGREEMENT, dated as of the _____ day of _____________, 20__
(this “Agreement”), is executed and delivered by ________________________, a
______________ corporation (the “Company”), Everest Re Group, Ltd., a company
organized under the laws of Bermuda (“Everest Group”), and Wachovia Bank,
National Association, in its capacity as administrative agent under the Credit
Agreement referred to hereinbelow (in such capacity, the “Administrative
Agent”), pursuant to Section 11.19 of the Credit Agreement. Capitalized terms
used herein without definition shall have the meanings given to them in the
Credit Agreement.

 

Reference is made to the Amended and Restated Credit Agreement, dated as of July
27, 2007, among Everest Re Group, Everest Reinsurance (Bermuda), Ltd., a company
organized under the laws of Bermuda (“Everest Bermuda”), Everest International
Reinsurance, Ltd., a company organized under the laws of Bermuda (“Everest
International”), and the other Subsidiary Borrowers named therein (collectively
with Everest Group, Everest Bermuda and Everest International, the “Borrowers”),
the Lenders defined therein and the Administrative Agent (as amended or
otherwise modified from time to time, the “Credit Agreement”). Pursuant to
Section 11.19 of the Credit Agreement, Everest Group may from time to time after
the Restatement Effective Date designate one or more Persons as additional
Borrowers, subject to, among other things, the execution and delivery by such
designated Borrower of an Assumption Agreement. The Company is a Subsidiary of
Everest Group and will obtain benefits as a result of the extension of credit
under the Credit Agreement, which benefits are hereby acknowledged, and,
accordingly, desires to execute and deliver this Agreement. Therefore, in
consideration of the foregoing and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company hereby
agrees as follows:

1.         The Company hereby joins in and agrees to be bound by each and all of
the provisions of the Credit Agreement as a Borrower thereunder. In furtherance
(and without limitation) of the foregoing, the Company hereby agrees to pay and
perform all of the Obligations of the Company as a Borrower under the Credit
Agreement and the other Credit Documents to which it is or hereafter becomes a
party, all on the terms and subject to the conditions set forth in the Credit
Agreement. The Company further agrees to execute and deliver all other documents
and instruments and take all other actions required under or pursuant to the
provisions of Section 11.19 of the Credit Agreement in connection with its
joinder as a Borrower under the Credit Agreement.

2.         Each of Everest Group and the Company hereby represents and warrants
that each representation and warranty contained in Article V of the Credit
Agreement (except those found at Section 5.10, clause (i) of Section 5.5, and
clause (ii) of Section 5.13(c)) and in the other Credit Documents is true and
correct in all material respects on and as of the date hereof (except to the
extent any such representation or warranty is expressly stated to have been made
as of a specific date, in which case such representation or warranty shall be
true and correct in all

 

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

material respects as of such date), as if such representations and warranties
were set forth at length herein.

3.         This Agreement shall be a Credit Document (within the meaning of such
term under the Credit Agreement), shall be binding upon and enforceable against
the Company and its successors and assigns, and shall inure to the benefit of
and be enforceable by the Administrative Agent and each Lender and their
respective successors and assigns. This Agreement and any attachments hereto are
hereby incorporated into the Credit Agreement and made a part thereof.

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

 

 

[NAME OF COMPANY]

 

 

 

By: __________________________________

 

 

Title: _________________________________

 

 

EVEREST RE GROUP, LTD.

 

 

By: __________________________________

 

 

Title: _________________________________

 

 

Accepted and agreed to:

 

WACHOVIA BANK, NATIONAL ASSOCIATION, as

Administrative Agent

 

By: __________________________________

 

Title: _________________________________

 

 

 

Schedule 1.1(a)

 

Commitments and Notice Addresses

 

 

 

 

Lender

 

Tranche 1 Commitment

 

Tranche 2 Commitment

Wachovia Bank, National Association

$41,176,470.62

$58,823,529.38

Citibank, NA

$38,088,235.29

$54,411,764.71

Deutsche Bank AG New York Branch

$38,088,235.29

$54,411,764.71

HSBC Bank USA, National Association

$38,088,235.29

$54,411,764.71

ING Bank N.V., London Branch

$38,088,235.29

$54,411,764.71

BNP Paribas

$28,823,529.41

$41,176,470.59

Fortis Capital Corp.

$28,823,529.41

$41,176,470.59

The Bank of New York

$28,823,529.41

$41,176,470.59

The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch

$28,823,529.41

$41,176,470.59

Barclays Bank, Plc

$20,588,235.29

$29,411,764.71

Bank of America, N.A.

$20,588,235.29

$29,411,764.71

Total

$350,000,000.00

$500,000,000.00

 

 

 

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

Notice Addresses

 

 

Administrative Agent

 

Address

Wachovia Bank, National Association

Instructions for wire transfers to the Administrative Agent:

 

Wachovia Bank, N.A.

Charlotte, NC

ABA: 053000219

Acct: 01459670001944

Acct Name: Agency Svcs Synd Clearing

Ref: Everest Re

Bank: Sherry McInturf

 

Address for notices as Issuing Lender:

Wachovia Bank, National Association,

as Administrative Agent

Charlotte Plaza Building

201 South College Street, 8th Floor NC 0680

Charlotte, North Carolina 28288

Attention: Syndication Agency Services

 

With a copy to:

 

Wachovia Bank, National Association,

as Administrative Agent

301 South College Street, 6th Floor NC0760

Charlotte, North Carolina 28288-0760

Attn: Laura Douglas / Will Goley

Address for notices as a Lender:

Wachovia Bank, National Association

Charlotte Plaza Building, CP-23

201 South College Street

Charlotte, North Carolina 28288-0680

Attention : Syndication Agency Services

Telephone: (704) 383-3721

Telecopy: (704) 383-0288

 

Lending Office:

 

Wachovia Bank, National Association

Charlotte Plaza Building, CP-23

201 South College Street

Charlotte, North Carolina 28288-0680

Attention : Syndication Agency Services

Telephone: (704) 383-3721

Telecopy: (704) 383-0288

 

 

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

 

Borrowers

 

Address

Everest Re Group, Ltd.

Everest Re Group, Ltd.

Wessex House

45 Reid Street, 2nd Floor

P.O. Box HM 845

Hamilton, HM DX

Bermuda

Attention: Mark De Saram

Telecopy Number: (441) 295-4828

 

 

with a copy to:

 

Everest Global Services, Inc.

Westgate Corporate Center

477 Martinsville Road

P.O. Box 830

Liberty Corner, NJ 07938-0830

Attention: Frank Lopapa

Telecopy Number: (908) 604-3412

 

 

 

 

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

Everest Reinsurance (Bermuda), Ltd.

Everest Reinsurance (Bermuda), Ltd.

Wessex House

45 Reid Street, 2nd Floor

P.O. Box HM 845

Hamilton, HM DX

Bermuda

Attention: Mark De Saram

Telecopy Number: (441) 295-4828

 

 

with a copy to:

 

Everest Global Services, Inc.

Westgate Corporate Center

477 Martinsville Road

P.O. Box 830

Liberty Corner, NJ 07938-0830

Attention: Frank Lopapa

Telecopy Number: (908) 604-3412

 

 

 

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

 

Everest International Reinsurance, Ltd.

Everest International Reinsurance, Ltd.

Wessex House

45 Reid Street, 2nd Floor

P.O. Box HM 845

Hamilton, HM DX

Bermuda

Attention: Mark De Saram

Telecopy Number: (441) 295-4828

 

 

with a copy to:

 

Everest Global Services, Inc.

Westgate Corporate Center

477 Martinsville Road

P.O. Box 830

Liberty Corner, NJ 07938-0830

Attention: Frank Lopapa

Telecopy Number: (908) 604-3412

 

 

 

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

 

Everest Reinsurance (Bermuda), Ltd. through its U.K. Branch

Everest Reinsurance (Bermuda), Ltd., U.K. Branch

40 Lime Street

London EC3M 5BS

Attention: Tom Jackson

Telecopy Number: +(44) 207 623-5967

 

With a copy To:

 

Everest Global Services, Inc.

Westgate Corporate Center

477 Martinsville Road

P.O. Box 830

Liberty Corner, NJ 07938-0830

Attention: Frank Lopapa

Telecopy Number: (908) 604-3412

 

 

 

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

Schedule 1.1(b)

 

Collateral Values1

 

 

Category of Investment/Security

Eligible Percentage

 

Cash (denominated in U.S. Dollars)

100%

Prime bank certificates of deposit issued by U.S. banks rated Aa3/AA- or better

95%

U.S. Government Securities

Maturity 2 years or less

Maturity over 2 years

 

95% of Market

90% of Market

Investment-grade municipal bonds (Rating Aaa/AAA – Baa3/BBB-)

Maturity 5 years or less

Maturity over 5 years

 

 

85% of Market

80% of Market

Investment-grade corporate bonds (Rating Aa3/AA- or better, non-convertible,
NYSE-traded)

Maturity 2 years or less

Maturity over 2 years

 

 

90% of Market

85% of Market

Investment-grade corporate bonds (Rating A1/A+ to Baa3/BBB-, non-convertible,
NYSE-traded)

Maturity 2 years or less

Maturity over 2 years

 

 

85% of Market

80% of Market

Commercial paper (Rating A1-A2, P1-P2)

85% of Market

 

 

_________________________

1 Other than U.S. government securities, no single issue or issuer shall
comprise greater than 10% of the Collateral Value at any time.

 

 

SCHEDULE 5.4

 

LICENSES

 

U.S. Property/Casualty Authorities
as of July 17, 2007

 

 

 

 

 

 

 

Everest Re

Everest Nat'l

Everest Indemnity

Everest Security

Mt. McKinley Ins.

Jurisdiction

 

 

 

 

 

Alabama

Licensed

Licensed

Broker Burden

Licensed

Broker Burden

Alaska

Licensed

Licensed

Approved

 

Not Approved

Arizona

Licensed

Licensed

Approved

 

Not Approved

Arkansas

Licensed

Licensed

Approved

 

Approved

California

Licensed

Licensed

Approved

 

Licensed

Colorado

Licensed

Licensed

Approved

 

Not Approved

Connecticut

Licensed

Licensed

Approved

 

Approved

Delaware

Domiciled

Domiciled

Domiciled

Approved

Domiciled

D.C.

Licensed

Licensed

Broker Burden

 

Broker Burden

Florida

Licensed

Licensed

Approved

 

Not Approved

Georgia

Licensed

Licensed

Broker Burden

Domiciled

Broker Burden

Hawaii

Licensed

Not licensed

Broker Burden

 

Broker Burden

Idaho

Licensed

Licensed

Approved

 

Approved

Illinois

Licensed

Licensed

Broker Burden

 

Broker Burden

Indiana

Licensed

Licensed

Broker Burden

 

Not Approved

Iowa

Licensed

Licensed

Approved

 

Approved

Kansas

Licensed

Licensed

Approved

 

Approved

Kentucky

Licensed

Licensed

Approved

 

Approved

Louisiana

Licensed

Licensed

Approved

 

Not Approved

Maine

Licensed

Licensed

Approved

 

Not Approved

Maryland

Licensed

Licensed

Approved

 

Approved

Massachusetts

Licensed

Licensed

Approved

 

Not Approved

Michigan

Licensed

Licensed

Approved

 

Not Approved

Minnesota

Licensed

Licensed

Approved

 

Approved

Mississippi

Licensed

Licensed

Approved

 

Not Approved

Missouri

Licensed

Licensed

Approved

 

Approved

Montana

Licensed

Licensed

Approved

 

Approved

Nebraska

Licensed

Licensed

Broker Burden

 

Broker Burden

Nevada

Accredited Reinsurer

Licensed

Approved

 

Approved

New Hampshire

Licensed - reins. only

Licensed

Approved

 

Not Approved

New Jersey

Licensed

Licensed

Approved

 

Not Approved

New Mexico

Licensed

Licensed

Approved

 

Not Approved

New York

Licensed

Licensed

Approved

 

Not Approved

North Carolina

Licensed

Not licensed

Approved

 

Not Approved

North Dakota

Licensed

Licensed

Approved

 

Approved

Ohio

Licensed

Licensed

Approved

 

Not Approved

Oklahoma

Licensed

Licensed

Approved

 

Not Approved

Oregon

Licensed

Licensed

Approved

 

Approved

Pennsylvania

Licensed

Licensed

Approved

 

Not Approved

Puerto Rico

Licensed - reins. only

Not licensed

Approved

 

Not Approved

Rhode Island

Licensed

Licensed

Approved

 

Not Approved

South Carolina

Licensed

Licensed

Approved

 

Not Approved

South Dakota

Licensed

Licensed

Broker Burden

 

Broker Burden

Tennessee

Licensed

Licensed

Approved

 

Approved

Texas

Licensed

Licensed

Approved

 

Not Approved

Utah

Licensed

Licensed

Approved

 

Not Approved

Vermont

Licensed

Not licensed

Approved

 

Approved

Virginia

Licensed

Licensed

Approved

 

Not Approved

Washington

Licensed

Licensed

Broker Burden

 

Broker Burden

West Virginia

Licensed

Licensed

Approved

 

Not Approved

Wisconsin

Licensed

Licensed

Approved

 

Approved

Wyoming

Not licensed

Licensed

Broker Burden

 

Broker Burden

 

 

 

 

 

 

U.S. Treasury/Surety Bond Branch

Licensed

Not licensed

N/A

 

 

 

 

 

 

 

N/A

U.S. Longshore & Harbord Workers &

Licensed

Licensed

N/A

 

N/A

related acts

 

 

 

 

 

 

 

 

 

 

 

* Approved = surplus lines approved/eligible

 

 

 

 

 

 

 

LND

 

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

Everest Reinsurance (Bermuda), Ltd.
Registration as an Insurer/Reinsurer

Bermuda and the United Kingdom

Everest International Reinsurance, Ltd.

Bermuda

Everest Reinsurance Company

Licensed and/or In Good Standing As an Insurer or Reinsurer

In Fifteen (15) Foreign (Non-United States) Countries

As of July 17, 2007

 

Argentina

Ecuador

Mexico

Bolivia

El Salvador

Peru

Canada

England and Wales

Philippine Islands

Chile

Guatemala

Singapore

Colombia

Honduras

Venezuela

 

 

LND

 

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

 

Everest Insurance Company of Canada

 

Federal License issued by The Office of the Superintendent of Financial
Institutions Canada (OSFI) and Licenses in the following Thirteen (13)
Providences

As of July 17, 2007

 

Alberta

Northwest Territories

Quebec

British Columbia

Nova Scotia

Saskatchewan

Manitoba

Nunavut

Yukon

New Brunswick

Ontario

 

Newfoundland

Prince Edward Island

 

 

 

 

LND

 

 

 

 

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

SCHEDULE 5.7

 

SUBSIDIARIES

 

Subsidiary

Parent

Percentage Owned

 

Everest International

Everest Re Group, Ltd.

100%

Reinsurance, Ltd.

 

Everest International

Everest Re Group, Ltd.

100%

Holdings, Ltd.

 

Everest Global Services, Inc.

Everest Re Group, Ltd.

100%

 

Everest Reinsurance

Everest Re Group, Ltd.

100%

Holdings, Inc.

 

Everest Reinsurance

Everest Re Group, Ltd.

100%

(Bermuda), Ltd.

 

Everest Re Advisors, Ltd.

Everest Re Group, Ltd.

100%

 

Mt. McKinley

Everest Reinsurance

100%

Managers, L.L.C.

Holdings, Inc.

 

Mt. McKinley

Everest Reinsurance

100%

Insurance Company

Holdings, Inc.

 

Everest Reinsurance

Everest Reinsurance

100%

Company

Holdings, Inc.

 

Everest Re Capital Trust

Everest Reinsurance

100%

 

Holdings, Inc.

 

Everest Re Capital Trust II

Everest Reinsurance

100%

 

Holdings, Inc.

 

Everest Advisors

Everest Re Advisors, Ltd

100%

(Ireland) Limited

 

WorkCare Southeast, Inc.

Mt. McKinley

100%

 

Managers, L.L.C.

 

WorkCare Southeast

Mt. McKinley

100%

Of Georgia, Inc.

Managers, L.L.C.

 

 

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

Everest National

Everest Reinsurance

100%

Insurance Company

Company

 

Mt. Whitney

Everest Reinsurance

100%

Securities, Inc.

Company

 

Everest Indemnity

Everest Reinsurance

100%

Insurance Company

Company

 

Everest Security

Everest Reinsurance

100%

Insurance Company

Company

 

Everest Advisors

Everest Reinsurance

100%

 

(UK), Ltd.

Company

 

 

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

SCHEDULE 8.3

 

LIENS

 

None.