Exhibit 10-1

$200,000,000

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

AMONG

THE NAVIGATORS GROUP, INC.,

as Borrower,

THE LENDERS NAMED HEREIN,

JPMORGAN CHASE BANK, N.A.

as Administrative Agent,

LASALLE BANK NATIONAL ASSOCIATION, as Syndication Agent,

CITIBANK, N.A.,

and

COMMERZBANK AKTIENGESELLSCHAFT, New York and Grand Cayman Branches,
as Documentation Agents,

CREDIT SUISSE FIRST BOSTON, as Managing Agent

and

U.S. BANK NATIONAL ASSOCIATION and BROWN BROTHERS HARRIMAN & CO.
as Co-Agents

DATED AS OF

February 2, 2007

 

J.P. MORGAN SECURITIES INC.,

as Sole Bookrunner and
Sole Lead Arranger

 

 

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

TABLE OF CONTENTS

 

 

 

Page

ARTICLE I

 

DEFINITIONS

 

 

1

 

 

 

 

 

 

 

 

ARTICLE II

 

THE REVOLVING CREDITS

 

 

17

 

 

 

 

 

 

 

 

2.1

 

Revolving Credit Advances

 

 

17

 

 

 

 

 

 

 

 

2.2

 

Ratable Loans

 

 

18

 

 

 

 

 

 

 

 

2.3

 

Types of Revolving Credit Advances

 

 

18

 

 

 

 

 

 

 

 

2.4

 

Commitment Fee; Reductions in Aggregate Revolving Credit Commitment

 

 

18

 

 

 

 

 

 

 

 

2.5

 

Optional Principal Payments

 

 

18

 

 

 

 

 

 

 

 

2.6

 

Mandatory Prepayments

 

 

18

 

 

 

 

 

 

 

 

2.7

 

Revolving Credit Advances

 

 

19

 

 

 

 

 

 

 

 

2.8

 

Conversion and Continuation of Outstanding Revolving Credit Advances

 

 

19

 

 

 

 

 

 

 

 

2.9

 

Changes in Interest Rate, etc

 

 

20

 

 

 

 

 

 

 

 

2.10

 

Rates Applicable After Default

 

 

20

 

 

 

 

 

 

 

 

2.11

 

Method of Payment

 

 

20

 

 

 

 

 

 

 

 

2.12

 

Noteless Agreement; Evidence of Indebtedness

 

 

21

 

 

 

 

 

 

 

 

2.13

 

Telephonic Notices

 

 

21

 

 

 

 

 

 

 

 

2.14

 

Interest Payment Dates; Interest and Fee Basis

 

 

22

 

 

 

 

 

 

 

 

2.15

 

Notification of Revolving Credit Advances, Interest Rates and Prepayments,
Commitment Reductions

 

 

22

 

 

 

 

 

 

 

 

2.16

 

Lending Installations

 

 

22

 

 

 

 

 

 

 

 

2.17

 

Non-Receipt of Funds by the Agent

 

 

22

 

 

 

 

 

 

 

 

ARTICLE III

 

THE LETTER OF CREDIT FACILITY

 

 

23

 

 

 

 

 

 

 

 

3.1

 

Issuance of Letters of Credit

 

 

23

 

 

 

 

 

 

 

 

3.2

 

Participating Interests

 

 

25

 

 

 

 

 

 

 

 

3.3

 

Reductions in Letter of Credit Commitment

 

 

25

 

 

 

 

 

 

 

 

3.4

 

Reimbursement Obligations

 

 

25

 

 

 

 

 

 

 

 

3.5

 

Procedure for Issuance

 

 

27

 

 

 

 

 

 

 

 

3.6

 

Nature of the Lenders’ Obligations

 

 

28

 

i

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Page

3.7

 

Notification of Issuance Requests

 

28

 

 

 

 

 

3.8

 

Cash Collateral for Letters of Credit

 

28

 

 

 

 

 

3.9

 

Fees

 

29

 

 

 

 

 

3.10

 

Extension of Revolving Credit Termination Date

 

30

 

 

 

 

 

ARTICLE IV

 

YIELD PROTECTION; TAXES

 

32

 

 

 

 

 

4.1

 

Yield Protection

 

32

 

 

 

 

 

4.2

 

Changes in Capital Adequacy Regulations

 

32

 

 

 

 

 

4.3

 

Availability of Types of Revolving Credit Advances

 

33

 

 

 

 

 

4.4

 

Funding Indemnification

 

33

 

 

 

 

 

4.5

 

Taxes

 

33

 

 

 

 

 

4.6

 

Lender Statements; Survival of Indemnity

 

35

 

 

 

 

 

ARTICLE V

 

CONDITIONS PRECEDENT

 

36

 

 

 

 

 

5.1

 

Initial Revolving Credit Loans and Letters of Credit

 

36

 

 

 

 

 

5.2

 

Each Revolving Credit Advance and Letter of Credit

 

37

 

 

 

 

 

ARTICLE VI

 

REPRESENTATIONS AND WARRANTIES

 

37

 

 

 

 

 

6.1

 

Existence and Standing

 

37

 

 

 

 

 

6.2

 

Authorization and Validity

 

38

 

 

 

 

 

6.3

 

No Conflict; Government Consent

 

38

 

 

 

 

 

6.4

 

Financial Statements

 

38

 

 

 

 

 

6.5

 

Statutory Financial Statements

 

39

 

 

 

 

 

6.6

 

Material Adverse Change

 

39

 

 

 

 

 

6.7

 

Taxes

 

39

 

 

 

 

 

6.8

 

Litigation and Contingent Obligations

 

40

 

 

 

 

 

6.9

 

Subsidiaries

 

40

 

 

 

 

 

6.10

 

ERISA

 

40

 

 

 

 

 

6.11

 

Defaults

 

40

 

 

 

 

 

6.12

 

Accuracy of Information

 

40

 

 

 

 

 

6.13

 

Regulation U

 

40

 

ii

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Page

6.14

 

Material Agreements

 

 

41

 

 

 

 

 

 

 

 

6.15

 

Compliance With Laws

 

 

41

 

 

 

 

 

 

 

 

6.16

 

Ownership of Properties

 

 

41

 

 

 

 

 

 

 

 

6.17

 

Plan Assets; Prohibited Transactions

 

 

41

 

 

 

 

 

 

 

 

6.18

 

Environmental Matters

 

 

41

 

 

 

 

 

 

 

 

6.19

 

Investment Company Act

 

 

42

 

 

 

 

 

 

 

 

6.20

 

Public Utility Holding Company Act

 

 

42

 

 

 

 

 

 

 

 

6.21

 

Solvency

 

 

42

 

 

 

 

 

 

 

 

6.22

 

Insurance Licenses

 

 

42

 

 

 

 

 

 

 

 

6.23

 

Partnerships

 

 

42

 

 

 

 

 

 

 

 

6.24

 

Lines of Business

 

 

42

 

 

 

 

 

 

 

 

6.25

 

Reinsurance Practices

 

 

43

 

 

 

 

 

 

 

 

6.26

 

Security

 

 

43

 

 

 

 

 

 

 

 

6.27

 

Disclosure

 

 

43

 

 

 

 

 

 

 

 

ARTICLE VII

 

COVENANTS

 

 

43

 

 

 

 

 

 

 

 

7.1

 

Financial Reporting

 

 

43

 

 

 

 

 

 

 

 

7.2

 

Use of Proceeds

 

 

46

 

 

 

 

 

 

 

 

7.3

 

Notice of Default

 

 

47

 

 

 

 

 

 

 

 

7.4

 

Conduct of Business

 

 

47

 

 

 

 

 

 

 

 

7.5

 

Taxes

 

 

47

 

 

 

 

 

 

 

 

7.6

 

Insurance

 

 

47

 

 

 

 

 

 

 

 

7.7

 

Compliance with Laws

 

 

47

 

 

 

 

 

 

 

 

7.8

 

Maintenance of Properties

 

 

48

 

 

 

 

 

 

 

 

7.9

 

Inspection; Maintenance of Books and Records

 

 

48

 

 

 

 

 

 

 

 

7.10

 

Dividends and Stock Repurchases

 

 

48

 

 

 

 

 

 

 

 

7.11

 

Indebtedness

 

 

48

 

 

 

 

 

 

 

 

7.12

 

Merger

 

 

49

 

 

 

 

 

 

 

 

7.13

 

Sale of Assets

 

 

49

 

 

iii

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

 

 

 

 

Page

7.14

 

Investments and Acquisitions

 

 

49

 

 

 

 

 

 

 

 

7.15

 

Contingent Obligations

 

 

50

 

 

 

 

 

 

 

 

7.16

 

Liens

 

 

50

 

 

 

 

 

 

 

 

7.17

 

Affiliates

 

 

51

 

 

 

 

 

 

 

 

7.18

 

Amendments to Agreements

 

 

51

 

 

 

 

 

 

 

 

7.19

 

Change in Fiscal Year

 

 

52

 

 

 

 

 

 

 

 

7.20

 

Inconsistent Agreements

 

 

52

 

 

 

 

 

 

 

 

7.21

 

Reinsurance

 

 

52

 

 

 

 

 

 

 

 

7.22

 

Stock of Subsidiaries

 

 

52

 

 

 

 

 

 

 

 

7.23

 

Financial Covenants

 

 

52

 

 

 

 

 

 

 

 

7.24

 

Additional Pledge

 

 

53

 

 

 

 

 

 

 

 

ARTICLE VIII

 

DEFAULTS

 

 

53

 

 

 

 

 

 

 

 

ARTICLE IX

 

ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

 

 

56

 

 

 

 

 

 

 

 

9.1

 

Acceleration

 

 

56

 

 

 

 

 

 

 

 

9.2

 

Amendments

 

 

57

 

 

 

 

 

 

 

 

9.3

 

Preservation of Rights

 

 

57

 

 

 

 

 

 

 

 

ARTICLE X

 

GENERAL PROVISIONS

 

 

58

 

 

 

 

 

 

 

 

10.1

 

Survival of Representations

 

 

58

 

 

 

 

 

 

 

 

10.2

 

Governmental Regulation

 

 

58

 

 

 

 

 

 

 

 

10.3

 

Headings

 

 

58

 

 

 

 

 

 

 

 

10.4

 

Entire Agreement

 

 

58

 

 

 

 

 

 

 

 

10.5

 

Numbers of Documents

 

 

58

 

 

 

 

 

 

 

 

10.6

 

Several Obligations; Benefits of this Agreement

 

 

58

 

 

 

 

 

 

 

 

10.7

 

Expenses; Indemnification

 

 

59

 

 

 

 

 

 

 

 

10.8

 

Accounting

 

 

59

 

 

 

 

 

 

 

 

10.9

 

Severability of Provisions

 

 

59

 

 

 

 

 

 

 

 

10.10

 

Nonliability of Lenders

 

 

59

 

 

 

 

 

 

 

 

10.11

 

Confidentiality

 

 

60

 

 

iv

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Page

10.12

 

Nonreliance

 

 

60

 

 

 

 

 

 

 

 

10.13

 

Disclosure

 

 

60

 

 

 

 

 

 

 

 

10.14

 

USA Patriot Act Notification

 

 

60

 

 

 

 

 

 

 

 

ARTICLE XI

 

THE ADMINISTRATIVE AGENT

 

 

61

 

 

 

 

 

 

 

 

11.1

 

Appointment; Nature of Relationship

 

 

61

 

 

 

 

 

 

 

 

11.2

 

Powers

 

 

61

 

 

 

 

 

 

 

 

11.3

 

General Immunity

 

 

61

 

 

 

 

 

 

 

 

11.4

 

No Responsibility for Revolving Credit Loans, Recitals, etc

 

 

61

 

 

 

 

 

 

 

 

11.5

 

Action on Instructions of Lenders

 

 

62

 

 

 

 

 

 

 

 

11.6

 

Employment of Agent and Counsel

 

 

62

 

 

 

 

 

 

 

 

11.7

 

Reliance on Documents; Counsel

 

 

62

 

 

 

 

 

 

 

 

11.8

 

Agent’s Reimbursement and Indemnification

 

 

62

 

 

 

 

 

 

 

 

11.9

 

Notice of Default

 

 

63

 

 

 

 

 

 

 

 

11.10

 

Rights as a Lender

 

 

63

 

 

 

 

 

 

 

 

11.11

 

Lender Credit Decision

 

 

63

 

 

 

 

 

 

 

 

11.12

 

Successor Agent

 

 

64

 

 

 

 

 

 

 

 

11.13

 

Agents’ Fees

 

 

64

 

 

 

 

 

 

 

 

11.14

 

Delegation to Affiliates

 

 

64

 

 

 

 

 

 

 

 

11.15

 

Syndication Agent

 

 

65

 

 

 

 

 

 

 

 

ARTICLE XII

 

SETOFF; RATABLE PAYMENTS

 

 

65

 

 

 

 

 

 

 

 

12.1

 

Setoff

 

 

65

 

 

 

 

 

 

 

 

12.2

 

Ratable Payments

 

 

65

 

 

 

 

 

 

 

 

ARTICLE XIII

 

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

 

 

65

 

 

 

 

 

 

 

 

13.1

 

Successors and Assigns

 

 

65

 

 

 

 

 

 

 

 

13.2

 

Participations

 

 

66

 

 

 

 

 

 

 

 

13.3

 

Assignments

 

 

67

 

 

 

 

 

 

 

 

13.4

 

Dissemination of Information

 

 

68

 

 

 

 

 

 

 

 

13.5

 

Tax Treatment

 

 

68

 

v

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Page

ARTICLE XIV

 

NOTICES

 

 

68

 

 

 

 

 

 

 

 

14.1

 

Notices

 

 

68

 

 

 

 

 

 

 

 

14.2

 

Change of Address

 

 

69

 

 

 

 

 

 

 

 

ARTICLE XV

 

COUNTERPARTS

 

 

69

 

 

 

 

 

 

 

 

ARTICLE XVI

 

CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

 

 

69

 

 

 

 

 

 

 

 

16.1

 

CHOICE OF LAW

 

 

69

 

 

 

 

 

 

 

 

16.2

 

CONSENT TO JURISDICTION

 

 

69

 

 

 

 

 

 

 

 

16.3

 

WAIVER OF JURY TRIAL

 

 

70

 

 

SCHEDULES

Pricing Schedule

Schedule 1

 

—

 

Commitments

Schedule 3.1

 

—

 

Existing Letters of Credit

Schedule 6.9

 

—

 

Subsidiaries

Schedule 6.22

 

—

 

Licenses — Navigators Specialty Insurance Company

Schedule 6.22A

 

—

 

Licenses — Navigators Insurance Company

Schedule 6.23

 

—

 

Partnerships

Schedule 6.24

 

—

 

Existing Lines of Business

Schedule 7.16

 

—

 

Liens

Schedule 7.21

 

—

 

Reinsurance Guidelines

 

EXHIBITS

Exhibit A

 

Revolving Credit Note

Exhibit B

 

Compliance Certificate

Exhibit C

 

Assignment Agreement

Exhibit D

 

Reimbursement Agreement Excerpt

Exhibit E

 

Increase Request

 

vi

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

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

This Third Amended and Restated Credit Agreement, dated as of February 2, 2007,
is among THE NAVIGATORS GROUP, INC., a Delaware corporation, the Lenders, and
JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent, LASALLE
BANK NATIONAL ASSOCIATION, as Syndication Agent, CITIBANK, N.A., and
COMMERZBANK, NEW YORK AND GRAND CAYMAN BRANCHES, as Documentation Agents, CREDIT
SUISSE FIRST BOSTON, as Managing Agent and U.S. BANK NATIONAL ASSOCIATION and
BROWN BROTHERS HARRIMAN & CO., as Co-Agents.

R E C I T A L S:

A.            The Borrower, JPMorgan Chase Bank, N.A., as agent and certain
financial institutions have entered into that certain Second Amended and
Restated Credit Agreement, dated as of January 31, 2005 (as heretofore amended,
the “Existing Credit Agreement”), pursuant to which the lenders party thereto
agreed to make financial accommodations to the Borrower under revolving credit
and letter of credit facilities.

B.            The Borrower has requested that the Existing Credit Agreement be
amended and restated in order to increase the amount of the letter of credit
facility and to make certain other changes to the Existing Credit Agreement.

C.            The Borrower, the Agent and the Lenders desire to amend and
restate the Existing Credit Agreement to, among other things, accomplish such
amendments.

NOW, THEREFORE, in consideration of the mutual covenants and undertakings herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Lenders and the
Agent hereby agree to amend and restate the Existing Credit Agreement as
follows:

ARTICLE I

DEFINITIONS

As used in this Agreement:

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

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

 

majority (by percentage or voting power) of the outstanding ownership  interests
of a partnership or limited liability company.

“Affiliate” of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person.  A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.

“Additional Lender” is defined in Section 3.11.

“Agent” means JPMorgan Chase Bank in its capacity as administrative agent
pursuant to Article XI, and not in its individual capacity as a Lender, and any
successor Agent appointed pursuant to Article XI.

“Aggregate Revolving Credit Commitment” means the aggregate of the Revolving
Credit Commitments of all the Lenders, as reduced from time to time pursuant to
the terms hereof.  The Aggregate Revolving Credit Commitment as of the date
hereof is $20,000,000.

“Agreement” means this Third Amended and Restated Credit Agreement, as it may be
amended, modified or restated and in effect from time to time.

“Agreement Accounting Principles” means generally accepted accounting principles
as in effect from time to time, applied in a manner consistent with those used
in preparing the financial statements referred to in Section 6.4; provided,
however, that for purposes of all computations required to be made with respect
to compliance by the Borrower with Section 7.23, such term shall mean generally
accepted accounting principles as in effect on the Closing Date, applied in a
manner consistent with those used in preparing the financial statements referred
to in Section 6.4.

“Alternate Base Rate” means, for any day, a rate of interest per annum equal to
the higher of (a) the Prime Rate in effect for such day, and (b) the Federal
Funds Effective Rate on such day plus 1/2% per annum.

“Alternate Base Rate Advance” means a Revolving Credit Advance which, except as
otherwise provided in Section 2.10, bears interest at the Alternate Base Rate.

“A.M. Best Rating” means, as to any insurance company, its financial strength
rating assigned by A.M. Best Company.

“Annual Statement” means the annual statutory financial statement of any
Insurance Subsidiary required to be filed with the insurance commissioner (or
similar authority) of its jurisdiction of incorporation, which statement shall
be in the form required by such Insurance Subsidiary’s jurisdiction of
incorporation or, if no specific form is so required, in the form of financial
statements permitted by such insurance commissioner (or such similar authority)
to be

2

 

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

 

used for filing annual statutory financial statements and shall contain the type
of information permitted by such insurance commissioner (or such similar
authority) to be disclosed therein, together with all exhibits or schedules
filed therewith.

“Applicable Commitment Fee Rate” means, at any time, the percentage per annum at
which commitment fees are accruing on the unused portion of the Aggregate
Revolving Credit Commitment at such time as set forth in the Pricing Schedule.

“Applicable Letter of Credit Participation Fee Rate” means, at any time, the
percentage per annum at which letter of credit participation fees are accruing
on the Letters of Credit at such time as set forth in the Pricing Schedule.

“Applicable Margin” means, with respect to Revolving Credit Advances of any Type
at any time, the percentage rate per annum which is applicable at such time with
respect to Revolving Credit Advances of such Type as set forth in the Pricing
Schedule.

“Approved Reinsurer” means a reinsurer which satisfies the criteria set forth in
the Reinsurance Guidelines for entering into reinsurance or retrocession
agreements with the Borrower.

“Arranger” means J.P. Morgan Securities Inc. and its successors.

“Article” means an article of this Agreement unless another document is
specifically referenced.

“Asset Disposition” means any sale, transfer or other disposition of any asset
of the Borrower or any Subsidiary in a single transaction or in a series of
related transactions (other than the sale of Investments (other than stock in
Subsidiaries) in the ordinary course).

“Authorized Officer” means any of the president, chief financial officer or
treasurer of the Borrower, acting singly.

“Bankruptcy Code” means Title 11, United States Code, sections 1 et seq., as the
same may be amended from time to time, and any successor thereto or replacement
therefor which may be hereafter enacted.

“Borrower” means The Navigators Group, Inc., a Delaware corporation, and its
successors and assigns.

“Borrower’s Moody’s Rating” means, at any time, the rating issued by Moody’s
with respect to the Borrower’s senior unsecured long-term debt securities
without third-party credit enhancement.

“Borrower’s S&P Rating” means, at any time, the rating issued by S&P with
respect to the Borrower’s senior unsecured long-term debt securities without
third-party credit enhancement.

3

 

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

 

“Borrowing Date” means a date on which a Revolving Credit Advance is made or a
Letter of Credit is issued hereunder.

“Borrowing Notice” is defined in Section 2.7.

“Business Day” means (a) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States dollars are carried on in the London interbank market and (b)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Chicago and New York for the conduct of substantially all
of their commercial lending activities.

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

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

“Cash Collateral Investments” means (a) short-term obligations of, or fully
guaranteed by, the United States of America, (b) commercial paper rated A-1 or
better by S&P or P-1 or better by Moody’s, (c) demand deposit accounts
maintained in the ordinary course of business, and (d) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest and has a maturity of not more than six months.

“Cash Collateral Security Agreement” means a security agreement in form and
substance satisfactory to the Agent executed by the Borrower in favor of the
Agent, on behalf of itself and the Lenders, pursuant to this Agreement, pledging
to the Agent a security interest in all Cash Collateral Investments delivered to
the Agent pursuant to the terms hereof, as the same may be amended, supplemented
or otherwise modified from time to time.

“Cash Equivalent Investments” means (a) short-term obligations of, or fully
guaranteed by, the United States of America, (b) commercial paper rated A-1 or
better by S&P or P-1 or better by Moody’s, (c) demand deposit accounts
maintained in the ordinary course of business, and (d) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $500,000,000; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest.

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“Change” is defined in Section 4.2.

“Change in Control” means (a) the acquisition by any Person, or two or more
Persons acting in concert of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of (i) 20% or more of the outstanding shares of voting stock of the
Borrower or (ii), if less, a percentage of such stock, greater than the
percentage owned by members of the Terence Deeks Family, or (b) the members of
the Terence Deeks Family shall cease to own, in the aggregate, free and clear of
all Liens and other encumbrances, at least 10% of the outstanding shares of
voting stock of the Borrower on a fully diluted basis.

“Closing Date” means February 2, 2007.

“Code” means the Internal Revenue Code of 1986, as amended or otherwise modified
from time to time.

“Condemnation” is defined in Section 8.8.

“Consolidated” or “consolidated”, when used in connection with any calculation,
means a calculation to be determined on a consolidated basis for the Borrower
and its Consolidated Subsidiaries in accordance with Agreement Accounting
Principles.

“Consolidated Net Income” means, for any period, the net income (or loss) of the
Borrower and its Consolidated Subsidiaries calculated on a consolidated basis
for such period, all as determined in accordance with Agreement Accounting
Principles.

“Consolidated Net Worth” means, for any period, the consolidated stockholders’
equity of the Borrower and its Consolidated Subsidiaries calculated on a
consolidated basis for such period, all as determined in accordance with
Agreement Accounting Principles, excluding, however, for the purposes of
Section 7.23.3, the effect of any unrealized gain or loss reported under
Statement of Financial Accounting Standards No. 115.

“Consolidated Person” means, for the taxable year of reference, each Person
which is a member of the affiliated group of the Borrower if Consolidated
returns are or shall be filed for such affiliated group for federal income tax
purposes or any combined or unitary group of which the Borrower is a member for
state income tax purposes.

“Consolidated Subsidiaries” means all Subsidiaries of the Borrower which should
be included in the Borrower’s consolidated financial statements, all as
determined in accordance with Agreement Accounting Principles.

“Consolidated Tangible Net Worth” means the excess of (a) Consolidated Total
Tangible Assets over (b) Consolidated Total Liabilities, excluding, however, for
the purposes of Section 7.23.1, the effect of any unrealized gain or loss
reported under Statement of Financial Accounting Standards No. 115.

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“Consolidated Total Assets” means, at any time, the total assets of the Borrower
and its Consolidated Subsidiaries calculated on a consolidated basis as of such
time, all as determined in accordance with Agreement Accounting Principles.

“Consolidated Total Intangible Assets” means, at any time, the total intangible
assets of the Borrower and its Consolidated Subsidiaries calculated on a
consolidated basis as of such time including, but not limited to, goodwill,
patents, trademarks, tradenames, copyrights and franchises and excluding
deferred policy acquisition costs.

“Consolidated Total Liabilities” means, at any time, the total liabilities of
the Borrower and its Consolidated Subsidiaries calculated on a consolidated
basis as of such time, all as determined in accordance with Agreement Accounting
Principles.

“Consolidated Total Tangible Assets” means, at any time, Consolidated Total
Assets minus Consolidated Total Intangible Assets.

“Contingent Obligation” of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership. 
The term “Contingent Obligation” shall not include (a) the obligations of any
Insurance Subsidiary arising under any insurance policy or reinsurance agreement
entered into in the ordinary course of business; or (b) operating leases.

“Controlled Group” means all members of a controlled group of corporations or
other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any of
its Subsidiaries, are treated as a single employer under Section 414 of the
Code.

“Conversion/Continuation Notice” is defined in Section 2.8.

“Conversion Differential” is defined in Section 3.1(e).

“Default” means an event described in Article VIII.

“Department” is defined in Section 6.5.

“Dollars” and the sign “$” mean lawful money of the United States of America.

“Environmental Laws” means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to (a) the
protection of the environment, (b) the effect of the environment on human

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health, (c) emissions, discharges or releases of pollutants, contaminants,
hazardous substances or wastes into surface water, ground water or land, or (d)
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any rule or regulation issued thereunder.

“Eurodollar Advance” means a Revolving Credit Advance which, except as otherwise
provided in Section 2.11, bears interest at the applicable Eurodollar Rate.

“Eurodollar Base Rate” means, with respect to a Eurodollar Advance for the
relevant Interest Period, the rate appearing on Page 3750 of the Dow Jones
Market Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Agent from time to time for purposes of providing quotations
of interest rates applicable to dollar deposits in the London interbank market)
at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for Dollar deposits with a
maturity comparable to such Interest Period.  In the event that such rate is not
available at such time for any reason, then the “Eurodollar Base Rate” with
respect to such Eurodollar Advance for such Interest Period shall be the rate at
which Dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.

“Eurodollar Loan” means a Revolving Credit Loan which bears interest at the
applicable Eurodollar Rate.

“Eurodollar Rate” means, with respect to a Eurodollar Advance for the relevant
Interest Period, the sum of (a) the quotient of (i) the Eurodollar Base Rate
applicable to such Interest Period, divided by (ii) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(b) the Applicable Margin.  The Eurodollar Rate shall be rounded to the next
higher multiple of 1/16 of 1% if the rate is not such a multiple.

“Excluded Taxes” means, in the case of each Lender or applicable Lending
Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (a) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (b) the jurisdiction in
which the Agent’s or such Lender’s principal executive office or such Lender’s
applicable Lending Installation is located.

“Exhibit” refers to an exhibit to this Agreement, unless another document is
specifically referenced.

“Existing Credit Agreement” is defined in the Recitals hereto.

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“Existing Lines of Business” is defined in Section 6.24.

“Extension Request” is defined in Section 3.10.

“Facility Documents” means this Agreement, any Revolving Credit Notes issued
pursuant to Section 2.12, the Security Documents, the Reimbursement Agreements
and the other documents and agreements contemplated hereby and executed by the
Borrower in favor of the Agent or any Lender.

“Federal Funds Effective Rate” means, for any day, an interest rate per annum
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.

“Fee Letter” is defined in Section 10.4.

“Fiscal Quarter” means one of the four three-month accounting periods comprising
a Fiscal Year.

“Fiscal Year” means the twelve-month accounting period commencing on January 1
and ending December 31 of each year.

“Governmental Authority” means any government (foreign or domestic) or any state
or other political subdivision thereof or any governmental body, agency,
authority, department or commission (including without limitation any taxing
authority or political subdivision) or any instrumentality or officer thereof
(including without limitation any court or tribunal and any board of insurance,
insurance department or insurance commissioner) exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any corporation, partnership or other entity directly or
indirectly owned or controlled by or subject to the control of any of the
foregoing.

“Indebtedness” of a Person means such Person’s (a) obligations for borrowed
money, (b) obligations representing the deferred purchase price of Property or
services (other than accounts payable arising in the ordinary course of such
Person’s business payable on terms customary in the trade), (c) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from Property now or hereafter owned or acquired by such Person, (d)
obligations which are evidenced by notes, acceptances, or other instruments, (e)
obligations of such Person to purchase securities or other Property arising out
of or in connection with the sale of the same or substantially similar
securities or Property, (f) Capitalized Lease Obligations, (g) Contingent
Obligations, (h) actual and contingent reimbursement obligations in respect of
letters of credit, (i) any other obligation for borrowed money or other
financial accommodation

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which in accordance with Agreement Accounting Principles would be shown as a
liability on the consolidated balance sheet of such Person, (j) any liability
under any financing lease or so-called “synthetic lease” transaction entered
into by such Person and (k) any obligation arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the consolidated balance
sheet of such Person.

“Insurance Subsidiary” means each of Navigators, NSIC and any other domestic
Subsidiary acquired or formed after the Closing Date which is engaged in, or is
authorized to engage in, the insurance business.

“Interest Period” means, with respect to a Eurodollar Advance, a period of one,
two, three or six months commencing on a Business Day selected by the Borrower
pursuant to this Agreement.  Such Interest Period shall end on the day which
corresponds numerically to such date one, two, three or six months thereafter,
provided, however, that if there is no such numerically corresponding day in
such next, second, third or sixth succeeding month, such Interest Period shall
end on the last Business Day of such next, second, third or sixth succeeding
month.  If an Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall end on the next succeeding Business
Day, provided, however, that if said next succeeding Business Day falls in a new
calendar month, such Interest Period shall end on the immediately preceding
Business Day.

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

“Issuance Request” is defined in Section 3.5.

“Issuer” means JPMorgan Chase Bank.

“JPMorgan Chase Bank” means JPMorgan Chase Bank, N.A., in its individual
capacity, and its successor.

“Lenders” means the lending institutions listed on the signature pages of this
Agreement and their respective successors and assigns.

“Lending Installation” means, with respect to a Lender or the Agent, the office,
branch, subsidiary or affiliate of such Lender or the Agent listed on the
signature pages hereof or on a Schedule or otherwise selected by such Lender or
the Agent pursuant to Section 2.16.

“Letter of Credit” means a letter of credit issued pursuant to Article III.

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“Letter of Credit Availability Termination Date” means March 31, 2009 or any
later date as may be specified as the Letter of Credit Availability Termination
Date in accordance with Section 3.10 or any earlier date on which the Letter of
Credit Commitment is reduced to zero or otherwise terminated pursuant to the
terms hereof.

“Letter of Credit Cash Collateral Account” is defined in Section 9.1.  Such
account and the related cash collateralization shall be subject to documentation
satisfactory to the Agent and the taking of all steps required to give the Agent
a perfected security interest in the Cash Collateral Investments.

“Letter of Credit Commitment” means the aggregate Letter of Credit Participation
Amounts of all of the Lenders, as reduced or increased from time to time
pursuant to the terms hereof.  The Letter of Credit Commitment as of the date
hereof is $180,000,000.

“Letter of Credit Obligations” means as at the time of determination thereof,
the sum of (a) the Reimbursement Obligations then outstanding and (b) the
aggregate then undrawn face amount of the then outstanding Letters of Credit.

“Letter of Credit Participation Amount” means, for each Lender, the maximum face
amount of Letters of Credit (which are approved by all Lenders in their sole
discretion in accordance with Section 3.1) in which such Lender participates not
exceeding the amount set forth on Schedule 1 or as set forth in any Notice of
Assignment relating to any assignment that has become effective pursuant to
Section 13.3.2, as such amount may be modified from time to time pursuant to the
terms hereof.

“Leverage Ratio” means, at any time, the ratio of (a) the consolidated
Indebtedness of the Borrower and its Consolidated Subsidiaries (excluding any
letter of credit obligations incurred by the Borrower and its Consolidated
Subsidiaries in the ordinary course of business prior to any drawing under such
a letter of credit but including any letter of credit obligations after any
drawing) at such time to (b) the sum of (i) the consolidated Indebtedness of the
Borrower and its Consolidated Subsidiaries (excluding any letter of credit
obligations incurred by the Borrower and its Consolidated Subsidiaries in the
ordinary course of business) plus (ii) Consolidated Net Worth at such time.

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

“Lien” means any security interest, lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).

“Lloyd’s Letters of Credit” is defined in Section 3.1.

 

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“Loss Reserves” means, with respect to any Insurance Subsidiary at any time, the
sum of (a) all losses, including incurred losses of such Insurance Subsidiary at
such time shown on page 3, line 1 of the Annual Statement of such Insurance
Subsidiary plus (b) all loss adjustment expenses of such Insurance Subsidiary at
such time shown on page 3, line 3 of the Annual Statement of such Insurance
Subsidiary, as determined in accordance with SAP.

“Margin Stock” has the meaning assigned to that term under Regulation U.

“Material Adverse Effect” means a material adverse effect on (a) the business,
Property, condition (financial or otherwise) or results of operations of any of
(i) the Borrower or (ii) the Subsidiaries taken as a whole, (b) the ability of
the Borrower to perform its obligations under the Facility Documents, or (c) the
validity or enforceability of any of the Facility Documents or the rights or
remedies of the Agent or the Lenders thereunder.

“MUL” means Millennium Underwriting Limited, which entity is a corporate name
with limited liability at Lloyd’s of London.

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

“Multiemployer Plan” means a Plan maintained pursuant to a collective bargaining
agreement or any other arrangement to which the Borrower or any member of the
Controlled Group is a party to which more than one employer is obligated to make
contributions.

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

“Navigators” means Navigators Insurance Company, a New York corporation.

“NCUL” means Navigators Corporate Underwriters Limited, which entity is a
corporate name with limited liability at Lloyd’s of London.

“Net Available Proceeds” means (a) with respect to any Asset Disposition, the
sum of cash or readily marketable cash equivalents received (including by way of
a cash generating sale or discounting of a note or account receivable)
therefrom, whether at the time of such disposition or subsequent thereto, or (b)
with respect to any sale or issuance of any debt or equity securities of the
Borrower or any Subsidiary, cash or readily marketable cash equivalents received
therefrom, whether at the time of such disposition or subsequent thereto, net,
in either case, of all legal, title and recording tax expenses, commissions and
other fees and all costs and expenses incurred and, in the case of an Asset
Disposition, net of all payments made by the Borrower or any of its Subsidiaries
on any Indebtedness which is secured by such assets pursuant to a permitted Lien
upon or with respect to such assets or which must, by the terms of such Lien, in
order to obtain a necessary consent to such Asset Disposition, or by applicable
law, be repaid out of the proceeds from such Asset Disposition.

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“Non-U.S. Lender” is defined in Section 4.5(d).

“Notice of Assignment” is defined in Section 13.3.2.

“NSIC” means Navigators Specialty Insurance Company, a New York corporation.

“Obligations” means all unpaid principal of and accrued and unpaid interest on
the Revolving Credit Loans, the Letter of Credit Obligations and all other
liabilities (if any), whether actual or contingent, of the Borrower with respect
to Letters of Credit, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lenders
or to any Lender, the Agent or any indemnified party hereunder arising under any
of the Facility Documents.

“Other Taxes” is defined in Section 4.5(b).

“Participants” is defined in Section 13.2.1.

“Payment Date” means the last day of each March, June, September and December.

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

“Person” means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, limited liability company, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.

“Plan” means an employee pension benefit plan which is covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
as to which the Borrower or any member of the Controlled Group may have any
liability.

“Pledge Agreement” means that certain Amended and Restated Stock Pledge
Agreement, dated as of January 31, 2005, between the Borrower and the Agent, as
the same may be amended, supplemented or otherwise modified from time to time.

“Pounds” and the sign “£” mean lawful money of the United Kingdom.

“Pricing Schedule” means the Schedule attached hereto identified as such.

“Prime Rate” means the rate of interest per annum publicly announced by JPMorgan
Chase Bank from time to time as its prime rate in effect at its principal office
in New York City; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.

“Property” of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.

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“pro-rata” means, when used with respect to a Lender, and any described
aggregate or total amount, an amount equal to such Lender’s pro-rata share or
portion based on its percentage of the Aggregate Revolving Credit Commitment or
the Letter of Credit Commitment, as applicable.

“Purchasers” is defined in Section 13.3.1.

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and shall include any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of the
Federal Reserve System.

“Regulation T” means Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and shall include any successor
thereto or other regulation or official interpretation of such Board of
Governors relating to the extension of credit by securities brokers and dealers
for the purpose of purchasing or carrying margin stocks applicable to such
Persons.

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and shall include any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to the extension of credit by banks for the purpose of
purchasing or carrying margin stocks applicable to member banks of the Federal
Reserve System.

“Regulation X” means Regulation X of the Board of Governors of the Federal
Reserve Systems from time to time in effect and shall include any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to the extension of credit by the specified lenders for the
purpose of purchasing or carrying margin stocks applicable to such Persons.

“Reimbursement Agreement” means a letter of credit application and reimbursement
agreement in such form as the Issuer may from time to time employ in the
ordinary course of business.

“Reimbursement Obligations” means, at any time, the aggregate (without
duplication) of the Obligations of the Borrower to the Lenders, the Issuer
and/or the Agent in respect of all unreimbursed payments or disbursements made
by the Lenders, the Issuer and/or the Agent under or in respect of draws made
under the Letters of Credit.

“Reinsurance Guidelines” is defined in Section 7.21(c).

“Release” is defined in the Comprehensive Environmental Response, Compensation
and Liability Act, as amended, 42 U.S.C. 39601 et seq.

“Reportable Event” means a reportable event as defined in Section 4043 of ERISA
and the regulations issued under such section, with respect to a Plan,
excluding, however, such events

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as to which the PBGC has by regulation waived the requirement of Section 4043(a)
of ERISA that it be notified within 30 days of the occurrence of such event;
provided, however, that a failure to meet the minimum funding standard of
Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event
regardless of the issuance of any such waiver of the notice requirement in
accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.

“Required Lenders” means Lenders in the aggregate having at least 66-2/3% of the
Aggregate Revolving Credit Commitment plus the Letter of Credit Commitment or,
if the Aggregate Revolving Credit Commitment and the Letter of Credit Commitment
have been terminated, the sum of the aggregate unpaid principal amount of the
outstanding Revolving Credit Loans plus the aggregate amount of the outstanding
Letter of Credit Obligations.

“Reserve Requirement” means, with respect to an Interest Period, the maximum
aggregate reserve requirement (including all basic, supplemental, marginal and
other reserves) which is imposed under Regulation D on Eurocurrency liabilities.

“Response Date” is defined in Section 3.10.

“Revolving Credit Advance” means a borrowing hereunder (a) made by the Lenders
on the same Borrowing Date, or (b) converted or continued by the Lenders on the
same date of conversion or continuation, consisting, in either case, of the
aggregate amount of the several Revolving Credit Loans of the same Type and, in
the case of Eurodollar Loans, for the same Interest Period.

“Revolving Credit Commitment” means, for each Lender, the obligation of such
Lender to make Revolving Credit Loans not exceeding the amount set forth on
Schedule 1 or as set forth in any Notice of Assignment relating to any
assignment that has become effective pursuant to Section 13.3.2, as such amount
may be modified from time to time pursuant to the terms hereof.

“Revolving Credit Loan” means, with respect to a Lender, any loan made by such
Lender pursuant to Article II (or any conversion or continuation thereof).

“Revolving Credit Note” means any promissory note issued at the request of a
Lender pursuant to Section 2.12, including any amendment, modification, renewal
or replacement of such promissory note.

“Revolving Credit Termination Date” means March 31, 2009 or any later date as
may be specified as the Revolving Credit Termination Date in accordance with
Section 3.10 or any earlier date on which the Aggregate Revolving Credit
Commitment is reduced to zero or otherwise terminated pursuant to the terms
hereof.

“Risk-Based Capital Guidelines” is defined in Section 4.2.

“S&P” means Standard and Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc.

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“SAP” means, with respect to any Insurance Subsidiary, the statutory accounting
practices prescribed or permitted by the insurance commissioner (or other
similar authority) in the jurisdiction of such Person for the preparation of
annual statements and other financial reports by insurance companies of the same
type as such Person in effect from time to time, applied in a manner consistent
with those used in preparing the Statutory Financial Statements referred to in
Section 6.5.

“Schedule” refers to a specific schedule to this Agreement, unless another
document is specifically referenced.

“Section” means a numbered section of this Agreement, unless another document is
specifically referenced.

“Security Documents” means the Pledge Agreement and the Cash Collateral Security
Agreement.

“Significant Insurance Subsidiary” means a Significant Subsidiary which is an
Insurance Subsidiary.

“Significant Subsidiary” means, at any time, a direct domestic Subsidiary of the
Borrower the assets of which are greater than or equal to five percent (5%) of
the Consolidated Total Assets of the Borrower and its Consolidated Subsidiaries.

“Single Employer Plan” means a Plan maintained by the Borrower or any member of
the Controlled Group for employees of the Borrower or any member of the
Controlled Group.

“Statutory Financial Statements” is defined in Section 6.5.

“Statutory Net Income” means, with respect to any Insurance Subsidiary for any
computation period, the net income earned by such Insurance Subsidiary during
such period, as determined in accordance with SAP (“Underwriting and Investment
Exhibit, Statement of Income” statement, Page 4, Line 20 of the Annual
Statement).

“Statutory Surplus” means, with respect to any Insurance Subsidiary at any time,
the statutory capital and surplus of such Insurance Subsidiary at such time, as
determined in accordance with SAP (“Liabilities, Surplus and Other Funds”
statement, page 3, line 35 of the Annual Statement).

“Subsidiary” of a Person means (a) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(b) any partnership, association, joint venture, limited liability company or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled. 
Unless otherwise expressly provided, all references herein to a “Subsidiary”
shall mean a Subsidiary of the Borrower.

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“Substantial Portion” means, with respect to the Property of the Borrower and
its Consolidated Subsidiaries, Property which (a) represents more than 10% of
the Consolidated Total Assets of the Borrower and its Consolidated Subsidiaries,
as would be shown in the consolidated financial statements of the Borrower and
its Consolidated Subsidiaries as at the end of the quarter next preceding the
date on which such determination is made, or (b) is responsible for more than
10% of the consolidated net sales or of the Consolidated Net Income of the
Borrower and its Consolidated Subsidiaries for the 12-month period ending as of
the end of the quarter next preceding the date of determination.

“Taxes” means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes.

“Terence Deeks Family” means, collectively, Terence N. Deeks; his spouse; any
natural person who is a lineal descendant of Terence N. Deeks; the spouse,
children, or grandchildren of any such natural person; any trust of which any of
the foregoing is or are the sole beneficiary or beneficiaries; or the estate,
executor, administrator, or legal guardian of any of the foregoing.

“Termination Event” means, with respect to a Plan which is subject to Title IV
of ERISA, (a) a Reportable Event, (b) the withdrawal of the Borrower or any
other member of the Controlled Group from such Plan during a plan year in which
the Borrower or any other member of the Controlled Group was a “substantial
employer” as defined in Section 4001(a)(2) of ERISA or was deemed such under
Section 4068(f) of ERISA, (c) the termination of such Plan, the filing of a
notice of intent to terminate such Plan or the treatment of an amendment of such
Plan as a termination under Section 4041 of ERISA, (d) the institution by the
PBGC of proceedings to terminate such Plan or (e) any event or condition which
might constitute grounds under Section 4042 of ERISA for the termination of, or
appointment of a trustee to administer, such Plan.

“Transferee” is defined in Section 13.4.

“Type” means, with respect to any Revolving Credit Advance, its nature as an
Alternate Base Rate Advance or a Eurodollar Advance.

“Unfunded Liabilities” means the amount (if any) by which the present value of
all vested and unvested accrued benefits under all Single Employer Plans exceeds
the fair market value of all such Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such Plans using PBGC
actuarial assumptions for single employer plan terminations.

“Unmatured Default” means an event which but for the lapse of time or the giving
of notice, or both, would constitute a Default.

“Wholly-Owned Subsidiary” of a Person means (a) any Subsidiary all (or, in the
case of Navigators N.V., all but one) of the outstanding voting securities of
which shall at the time be

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owned or controlled, directly or indirectly, by such Person or one or more
Wholly-Owned Subsidiaries of such Person, or by such Person and one or more
Wholly-Owned Subsidiaries of such Person, or (b) any partnership, limited
liability company, association, joint venture or similar business organization
100% of the ownership interests having ordinary voting power of which shall at
the time be so owned or controlled.

The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.

ARTICLE II

THE REVOLVING CREDITS

2.1  REVOLVING CREDIT ADVANCES.  SUBJECT TO THE TERMS OF THE EXISTING CREDIT
AGREEMENT, THE LENDERS PARTY THERETO ESTABLISHED IN FAVOR OF THE BORROWER, AND
THE LENDERS HEREBY CONTINUE, A REVOLVING CREDIT FACILITY PURSUANT TO WHICH, UPON
THE FOLLOWING TERMS AND SUBJECT TO THE FOLLOWING CONDITIONS:

(A)           FROM AND INCLUDING THE DATE HEREOF TO BUT EXCLUDING THE REVOLVING
CREDIT TERMINATION DATE, EACH LENDER SEVERALLY (AND NOT JOINTLY) AGREES, ON THE
TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT, TO MAKE REVOLVING CREDIT LOANS
TO THE BORROWER FROM TIME TO TIME IN AMOUNTS NOT TO EXCEED IN THE AGGREGATE AT
ANY ONE TIME OUTSTANDING THE AMOUNT OF ITS PRO-RATA SHARE OF THE AGGREGATE
REVOLVING CREDIT COMMITMENT EXISTING AT SUCH TIME.  SUBJECT TO THE TERMS OF THIS
AGREEMENT, THE BORROWER MAY BORROW, REPAY AND REBORROW REVOLVING CREDIT ADVANCES
AT ANY TIME PRIOR TO THE REVOLVING CREDIT TERMINATION DATE.  THE REVOLVING
CREDIT COMMITMENTS SHALL EXPIRE ON THE REVOLVING CREDIT TERMINATION DATE.  ALL
REVOLVING CREDIT LOANS SHALL BE IN DOLLARS.

(B)           THE BORROWER HEREBY AGREES THAT, IF AT ANY TIME AS A RESULT OF
REDUCTIONS IN THE AGGREGATE REVOLVING CREDIT COMMITMENT PURSUANT TO SECTION
2.4(B) OR OTHERWISE, THE AGGREGATE BALANCE OF THE REVOLVING CREDIT LOANS EXCEEDS
THE AGGREGATE REVOLVING CREDIT COMMITMENT, THE BORROWER SHALL REPAY IMMEDIATELY
SUCH THEN AMOUNT OF REVOLVING CREDIT LOANS AS MAY BE NECESSARY TO ELIMINATE SUCH
EXCESS.

(C)           ANY OUTSTANDING REVOLVING CREDIT ADVANCES AND ALL OTHER UNPAID
OBLIGATIONS  WITH RESPECT TO THE REVOLVING CREDIT LOANS SHALL BE PAID IN FULL BY
THE BORROWER ON THE REVOLVING CREDIT TERMINATION DATE.

(D)           UPON THE EFFECTIVENESS OF THIS AGREEMENT PURSUANT TO SECTION 5.1,
EACH REVOLVING CREDIT ADVANCE WHICH IS THEN OUTSTANDING UNDER THE EXISTING
CREDIT AGREEMENT SHALL BE DEEMED A REVOLVING CREDIT ADVANCE OUTSTANDING UNDER
THIS AGREEMENT.

2.2  RATABLE LOANS.  EACH REVOLVING CREDIT ADVANCE HEREUNDER SHALL CONSIST OF
REVOLVING CREDIT LOANS MADE FROM THE SEVERAL LENDERS RATABLY IN PROPORTION TO
THE RATIO THAT

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THEIR RESPECTIVE REVOLVING CREDIT COMMITMENTS BEAR TO THE AGGREGATE REVOLVING
CREDIT COMMITMENT.

2.3  TYPES OF REVOLVING CREDIT ADVANCES.  THE REVOLVING CREDIT ADVANCES MAY BE
ALTERNATE BASE RATE ADVANCES OR EURODOLLAR ADVANCES, OR A COMBINATION THEREOF,
SELECTED BY THE BORROWER IN ACCORDANCE WITH SECTIONS 2.7 AND 2.8.

2.4  COMMITMENT FEE; REDUCTIONS IN AGGREGATE REVOLVING CREDIT COMMITMENT.

(A)           THE BORROWER AGREES TO PAY TO THE AGENT FOR THE ACCOUNT OF EACH
LENDER A COMMITMENT FEE ON ITS REVOLVING CREDIT COMMITMENT LESS ITS REVOLVING
CREDIT LOANS AT A PER ANNUM RATE EQUAL TO THE APPLICABLE COMMITMENT FEE RATE
FROM THE CLOSING DATE TO AND INCLUDING THE REVOLVING CREDIT TERMINATION DATE,
PAYABLE ON EACH PAYMENT DATE HEREAFTER AND ON THE REVOLVING CREDIT TERMINATION
DATE OR, IF LATER, UPON RECEIPT OF A BILL FROM THE AGENT.  ALL SUCH ACCRUED
COMMITMENT FEES SHALL BE PAYABLE ON THE EFFECTIVE DATE OF ANY TERMINATION OF THE
OBLIGATIONS OF THE LENDERS TO MAKE REVOLVING CREDIT LOANS HEREUNDER OR, IF
LATER, UPON RECEIPT OF A BILL FROM THE AGENT.  ACCRUED AND UNPAID COMMITMENT
FEES UNDER THE EXISTING AGREEMENT SHALL BE PAID ON THE CLOSING DATE.

(B)           THE BORROWER MAY PERMANENTLY REDUCE THE AGGREGATE REVOLVING CREDIT
COMMITMENT IN WHOLE, OR IN PART RATABLY AMONG THE LENDERS IN INTEGRAL MULTIPLES
OF $5,000,000 UPON AT LEAST FIVE (5) BUSINESS DAYS’ WRITTEN NOTICE TO THE AGENT,
WHICH NOTICE SHALL SPECIFY THE AMOUNT OF ANY SUCH REDUCTION; PROVIDED, HOWEVER,
THAT THE AMOUNT OF THE AGGREGATE REVOLVING CREDIT COMMITMENT MAY NOT BE REDUCED
BELOW THE AGGREGATE PRINCIPAL AMOUNT OF THE OUTSTANDING REVOLVING CREDIT LOANS.

2.5  OPTIONAL PRINCIPAL PAYMENTS.  THE BORROWER MAY FROM TIME TO TIME PAY,
WITHOUT PENALTY OR PREMIUM, ALL OUTSTANDING ALTERNATE BASE RATE ADVANCES, OR, IN
A MINIMUM AGGREGATE AMOUNT OF $1,000,000 OR ANY INTEGRAL MULTIPLE OF $500,000 IN
EXCESS THEREOF, ANY PORTION OF THE OUTSTANDING ALTERNATE BASE RATE ADVANCES UPON
TWO BUSINESS DAYS’ PRIOR NOTICE TO THE AGENT. THE BORROWER MAY FROM TIME TO TIME
PAY, SUBJECT TO THE PAYMENT OF ANY FUNDING INDEMNIFICATION AMOUNTS REQUIRED BY
SECTION 4.4 BUT WITHOUT PENALTY OR PREMIUM, ALL OUTSTANDING EURODOLLAR ADVANCES,
OR, IN A MINIMUM AGGREGATE AMOUNT OF $1,000,000 OR ANY INTEGRAL MULTIPLE OF
$1,000,000 IN EXCESS THEREOF, ANY PORTION OF THE OUTSTANDING EURODOLLAR ADVANCES
UPON THREE BUSINESS DAYS’ PRIOR NOTICE TO THE AGENT.

2.6  MANDATORY PREPAYMENTS.  MANDATORY PREPAYMENTS OF REVOLVING CREDIT LOANS
SHALL BE REQUIRED IN THE AMOUNTS AND AT THE TIMES SET FORTH BELOW:

(A)           CONCURRENTLY WITH THE RECEIPT THEREOF BY THE BORROWER OR ANY
SUBSIDIARY, 75% OF THE AGGREGATE NET AVAILABLE PROCEEDS IN EXCESS OF $1,000,000
REALIZED UPON ALL ASSET DISPOSITIONS IN ANY FISCAL YEAR; AND

(B)           CONCURRENTLY WITH THE RECEIPT THEREOF BY THE BORROWER OR ANY
SUBSIDIARY, 75% OF THE NET AVAILABLE PROCEEDS IN EXCESS OF $1,000,000 REALIZED
UPON THE ISSUANCE OR

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SALE BY THE BORROWER OR SUCH SUBSIDIARY OF ANY EQUITY OR DEBT SECURITIES (OTHER
THAN AN ISSUANCE OR SALE OF COMMON STOCK OF A SUBSIDIARY TO THE BORROWER);

provided that, if the outstanding Revolving Credit Loans at the time of a
mandatory prepayment are less than the mandatory prepayment, the prepayment
shall be limited to the outstanding amount of such Revolving Loans.

2.7  REVOLVING CREDIT ADVANCES.  THE BORROWER SHALL SELECT THE TYPE OF REVOLVING
CREDIT ADVANCE AND, IN THE CASE OF EACH EURODOLLAR ADVANCE, THE INTEREST PERIOD
APPLICABLE THERETO FROM TIME TO TIME.  THE BORROWER SHALL GIVE THE AGENT
IRREVOCABLE NOTICE (A “BORROWING NOTICE”) NOT LATER THAN 10:00 A.M. (CHICAGO
TIME) AT LEAST ONE (1) BUSINESS DAY BEFORE THE BORROWING DATE OF EACH ALTERNATE
BASE RATE ADVANCE AND AT LEAST THREE (3) BUSINESS DAYS BEFORE THE BORROWING DATE
FOR EACH EURODOLLAR ADVANCE, SPECIFYING:

(A)           THE BORROWING DATE OF SUCH REVOLVING CREDIT ADVANCE, WHICH SHALL
BE A BUSINESS DAY;

(B)           THE AGGREGATE AMOUNT OF SUCH REVOLVING CREDIT ADVANCE;

(C)           THE TYPE OF REVOLVING CREDIT ADVANCE SELECTED; AND

(D)            IN THE CASE OF EACH EURODOLLAR ADVANCE, THE INTEREST PERIOD
APPLICABLE THERETO, WHICH SHALL END ON OR PRIOR TO THE REVOLVING CREDIT
TERMINATION DATE.

Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Revolving Credit Loan or Loans in funds immediately available
in Chicago to the Agent at its address specified pursuant to Article XIV.

2.8  CONVERSION AND CONTINUATION OF OUTSTANDING REVOLVING CREDIT ADVANCES. 
ALTERNATE BASE RATE ADVANCES SHALL CONTINUE AS ALTERNATE BASE RATE ADVANCES
UNLESS AND UNTIL SUCH ALTERNATE BASE RATE ADVANCES ARE CONVERTED INTO EURODOLLAR
ADVANCES PURSUANT TO THIS SECTION 2.8 OR ARE REPAID IN ACCORDANCE WITH
SECTION 2.5.  EACH EURODOLLAR ADVANCE SHALL CONTINUE AS A EURODOLLAR ADVANCE
UNTIL THE END OF THE THEN APPLICABLE INTEREST PERIOD THEREFOR, AT WHICH TIME
SUCH EURODOLLAR ADVANCE SHALL BE AUTOMATICALLY CONVERTED INTO AN ALTERNATE BASE
RATE ADVANCE UNLESS (X) SUCH EURODOLLAR ADVANCE IS OR WAS REPAID IN ACCORDANCE
WITH SECTION 2.5 OR (Y) THE BORROWER SHALL HAVE GIVEN THE AGENT A
CONVERSION/CONTINUATION NOTICE (AS DEFINED BELOW) REQUESTING THAT, AT THE END OF
SUCH INTEREST PERIOD, SUCH EURODOLLAR ADVANCE CONTINUE AS A EURODOLLAR ADVANCE
FOR THE SAME OR ANOTHER INTEREST PERIOD.  THE BORROWER MAY ELECT FROM TIME TO
TIME TO CONVERT ALL OR ANY PART OF AN ALTERNATE BASE RATE ADVANCE INTO A
EURODOLLAR ADVANCE.  THE BORROWER SHALL GIVE THE AGENT IRREVOCABLE NOTICE (A
“CONVERSION/CONTINUATION NOTICE”) OF EACH CONVERSION OF AN ALTERNATE BASE RATE
ADVANCE INTO A EURODOLLAR ADVANCE OR CONTINUATION OF A EURODOLLAR ADVANCE NOT
LATER THAN 10:00 A.M. (CHICAGO TIME) AT LEAST THREE BUSINESS DAYS PRIOR TO THE
DATE OF THE REQUESTED CONVERSION OR CONTINUATION, SPECIFYING:

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(A)           THE REQUESTED DATE, WHICH SHALL BE A BUSINESS DAY, OF SUCH
CONVERSION OR CONTINUATION,

(B)           THE AGGREGATE AMOUNT AND TYPE OF THE REVOLVING CREDIT ADVANCE
WHICH IS TO BE CONVERTED OR CONTINUED, AND

(C)           THE AMOUNT OF SUCH REVOLVING CREDIT ADVANCE WHICH IS TO BE
CONVERTED INTO OR CONTINUED AS A EURODOLLAR ADVANCE AND THE DURATION OF THE
INTEREST PERIOD APPLICABLE THERETO.

2.9  CHANGES IN INTEREST RATE, ETC.  EACH ALTERNATE BASE RATE ADVANCE SHALL BEAR
INTEREST ON THE OUTSTANDING PRINCIPAL AMOUNT THEREOF, FOR EACH DAY FROM AND
INCLUDING THE DATE SUCH REVOLVING CREDIT ADVANCE IS MADE OR IS AUTOMATICALLY
CONVERTED FROM A EURODOLLAR ADVANCE INTO AN ALTERNATE BASE RATE ADVANCE PURSUANT
TO SECTION 2.8, TO BUT EXCLUDING THE DATE IT IS PAID OR IS CONVERTED INTO A
EURODOLLAR ADVANCE PURSUANT TO SECTION 2.8 HEREOF, AT A RATE PER ANNUM EQUAL TO
THE ALTERNATE BASE RATE FOR SUCH DAY.  CHANGES IN THE RATE OF INTEREST ON THAT
PORTION OF ANY REVOLVING CREDIT ADVANCE MAINTAINED AS AN ALTERNATE BASE RATE
ADVANCE WILL TAKE EFFECT SIMULTANEOUSLY WITH EACH CHANGE IN THE ALTERNATE BASE
RATE.  EACH EURODOLLAR ADVANCE SHALL BEAR INTEREST ON THE OUTSTANDING PRINCIPAL
AMOUNT THEREOF FROM AND INCLUDING THE FIRST DAY OF THE INTEREST PERIOD
APPLICABLE THERETO TO (BUT NOT INCLUDING) THE LAST DAY OF SUCH INTEREST PERIOD
AT THE INTEREST RATE DETERMINED BY THE AGENT AS APPLICABLE TO SUCH EURODOLLAR
ADVANCE BASED UPON THE BORROWER’S SELECTIONS UNDER SECTION 2.7 AND 2.8 AND
OTHERWISE IN ACCORDANCE WITH THE TERMS HEREOF.  NO INTEREST PERIOD MAY END AFTER
THE REVOLVING CREDIT TERMINATION DATE.

2.10  RATES APPLICABLE AFTER DEFAULT.  NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN SECTION 2.7 OR 2.8, DURING THE CONTINUANCE OF A DEFAULT OR
UNMATURED DEFAULT THE REQUIRED LENDERS MAY, AT THEIR OPTION, BY NOTICE TO THE
BORROWER (WHICH NOTICE MAY BE REVOKED AT THE OPTION OF THE REQUIRED LENDERS
NOTWITHSTANDING ANY PROVISION OF SECTION 9.2 REQUIRING UNANIMOUS CONSENT OF THE
LENDERS TO REDUCTIONS IN INTEREST RATES), DECLARE THAT NO REVOLVING CREDIT
ADVANCE MAY BE MADE AS, CONVERTED INTO OR CONTINUED AS A EURODOLLAR ADVANCE. 
DURING THE CONTINUANCE OF A DEFAULT THE REQUIRED LENDERS MAY, AT THEIR OPTION,
BY NOTICE TO THE BORROWER (WHICH NOTICE MAY BE REVOKED AT THE OPTION OF THE
REQUIRED LENDERS NOTWITHSTANDING ANY PROVISION OF SECTION 9.2 REQUIRING
UNANIMOUS CONSENT OF THE LENDERS TO REDUCTIONS IN INTEREST RATES), DECLARE THAT
(A) EACH EURODOLLAR ADVANCE SHALL BEAR INTEREST FOR THE REMAINDER OF THE
APPLICABLE INTEREST PERIOD AT THE RATE OTHERWISE APPLICABLE TO SUCH INTEREST
PERIOD PLUS 2% PER ANNUM AND (B) EACH ALTERNATE BASE RATE ADVANCE SHALL BEAR
INTEREST AT A RATE PER ANNUM EQUAL TO THE ALTERNATE BASE RATE IN EFFECT FROM
TIME TO TIME PLUS 2% PER ANNUM, PROVIDED THAT, DURING THE CONTINUANCE OF A
DEFAULT UNDER SECTION 8.6 OR 8.7, THE INTEREST RATES SET FORTH IN CLAUSES (A)
AND (B) ABOVE SHALL BE APPLICABLE TO ALL REVOLVING CREDIT ADVANCES WITHOUT ANY
ELECTION OR ACTION ON THE PART OF THE AGENT OR ANY LENDER.

2.11  METHOD OF PAYMENT.  ALL PAYMENTS OF THE OBLIGATIONS HEREUNDER SHALL BE
MADE, WITHOUT SETOFF, DEDUCTION, OR COUNTERCLAIM, IN IMMEDIATELY AVAILABLE FUNDS
TO THE AGENT AT THE AGENT’S ADDRESS SPECIFIED PURSUANT TO ARTICLE XIV, OR AT ANY
OTHER LENDING

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INSTALLATION OF THE AGENT SPECIFIED IN WRITING BY THE AGENT TO THE BORROWER, BY
NOON (CHICAGO TIME) ON THE DATE WHEN DUE AND SHALL BE APPLIED RATABLY BY THE
AGENT AMONG THE LENDERS.  EACH PAYMENT DELIVERED TO THE AGENT FOR THE ACCOUNT OF
ANY LENDER SHALL BE DELIVERED PROMPTLY BY THE AGENT TO SUCH LENDER IN THE SAME
TYPE OF FUNDS THAT THE AGENT RECEIVED AT ITS ADDRESS SPECIFIED PURSUANT TO
ARTICLE XIV OR AT ANY LENDING INSTALLATION SPECIFIED IN A NOTICE RECEIVED BY THE
AGENT FROM SUCH LENDER.  THE AGENT IS HEREBY AUTHORIZED TO CHARGE THE ACCOUNT OF
THE BORROWER MAINTAINED WITH JPMORGAN CHASE BANK FOR EACH PAYMENT OF PRINCIPAL,
INTEREST AND FEES AS IT BECOMES DUE HEREUNDER.

2.12                 NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS.  (A)  EACH
LENDER SHALL MAINTAIN IN ACCORDANCE WITH ITS USUAL PRACTICE AN ACCOUNT OR
ACCOUNTS EVIDENCING THE INDEBTEDNESS OF THE BORROWER TO SUCH LENDER RESULTING
FROM EACH REVOLVING CREDIT LOAN MADE BY SUCH LENDER FROM TIME TO TIME, INCLUDING
THE AMOUNTS OF PRINCIPAL AND INTEREST PAYABLE AND PAID TO SUCH LENDER FROM TIME
TO TIME HEREUNDER.

(B)           THE AGENT SHALL ALSO MAINTAIN ACCOUNTS IN WHICH IT WILL RECORD (I)
THE AMOUNT OF EACH REVOLVING CREDIT LOAN MADE HEREUNDER, THE TYPE THEREOF AND
THE INTEREST PERIOD WITH RESPECT THERETO, (II) THE AMOUNT OF ANY PRINCIPAL OR
INTEREST DUE AND PAYABLE OR TO BECOME DUE AND PAYABLE FROM THE BORROWER TO EACH
LENDER HEREUNDER AND (III) THE AMOUNT OF ANY SUM RECEIVED BY THE AGENT HEREUNDER
FROM THE BORROWER AND EACH LENDER’S SHARE THEREOF.

(C)           THE ENTRIES MAINTAINED IN THE ACCOUNTS MAINTAINED PURSUANT TO
PARAGRAPHS (A) AND (B) ABOVE SHALL BE PRIMA FACIE EVIDENCE OF THE EXISTENCE AND
AMOUNTS OF THE OBLIGATIONS THEREIN RECORDED; PROVIDED, HOWEVER, THAT THE FAILURE
OF THE AGENT OR ANY LENDER TO MAINTAIN SUCH ACCOUNTS OR ANY ERROR THEREIN SHALL
NOT IN ANY MANNER AFFECT THE OBLIGATION OF THE BORROWER TO REPAY THE OBLIGATIONS
IN ACCORDANCE WITH THEIR TERMS.

(D)           ANY LENDER MAY REQUEST THAT ITS REVOLVING CREDIT LOANS BE
EVIDENCED BY A PROMISSORY NOTE IN THE FORM OF EXHIBIT A (A “REVOLVING CREDIT
NOTE”).  IN SUCH EVENT, THE BORROWER SHALL PREPARE, EXECUTE AND DELIVER TO SUCH
LENDER A REVOLVING CREDIT NOTE PAYABLE TO THE ORDER OF SUCH LENDER.  THEREAFTER,
THE REVOLVING CREDIT LOANS EVIDENCED BY SUCH REVOLVING CREDIT NOTE AND INTEREST
THEREON SHALL AT ALL TIMES (INCLUDING AFTER ANY ASSIGNMENT PURSUANT TO
SECTION 13.3) BE REPRESENTED BY ONE OR MORE REVOLVING CREDIT NOTES PAYABLE TO
THE ORDER OF THE PAYEE NAMED THEREIN OR ANY ASSIGNEE PURSUANT TO SECTION 13.3,
EXCEPT TO THE EXTENT THAT ANY SUCH LENDER OR ASSIGNEE SUBSEQUENTLY RETURNS ANY
SUCH REVOLVING CREDIT NOTE FOR CANCELLATION AND REQUESTS THAT SUCH REVOLVING
CREDIT LOANS ONCE AGAIN BE EVIDENCED AS DESCRIBED IN PARAGRAPHS (A) AND (B)
ABOVE.

2.13                TELEPHONIC NOTICES.  THE BORROWER HEREBY AUTHORIZES THE
LENDERS AND THE AGENT TO EXTEND, CONVERT OR CONTINUE REVOLVING CREDIT ADVANCES,
EFFECT SELECTIONS OF TYPES OF REVOLVING CREDIT ADVANCES AND TO TRANSFER FUNDS
BASED ON TELEPHONIC NOTICES MADE BY ANY PERSON OR PERSONS THE AGENT OR ANY
LENDER IN GOOD FAITH BELIEVES TO BE ACTING ON BEHALF OF THE BORROWER, IT BEING
UNDERSTOOD THAT THE FOREGOING AUTHORIZATION IS SPECIFICALLY INTENDED TO ALLOW
BORROWING NOTICES AND CONVERSION/CONTINUATION NOTICES TO BE GIVEN
TELEPHONICALLY.

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THE BORROWER AGREES TO DELIVER PROMPTLY TO THE AGENT A WRITTEN CONFIRMATION, IF
SUCH CONFIRMATION IS REQUESTED BY THE AGENT OR ANY LENDER, OF EACH TELEPHONIC
NOTICE SIGNED BY AN AUTHORIZED OFFICER.  IF THE WRITTEN CONFIRMATION DIFFERS IN
ANY MATERIAL RESPECT FROM THE ACTION TAKEN BY THE AGENT AND THE LENDERS, THE
RECORDS OF THE AGENT AND THE LENDERS SHALL GOVERN ABSENT MANIFEST ERROR.

2.14                INTEREST PAYMENT DATES; INTEREST AND FEE BASIS.  INTEREST
ACCRUED ON EACH ALTERNATE BASE RATE ADVANCE SHALL BE PAYABLE ON EACH PAYMENT
DATE, COMMENCING WITH THE FIRST SUCH DATE TO OCCUR AFTER THE CLOSING DATE AND AT
MATURITY OR, IF LATER, UPON RECEIPT OF A BILL FROM THE AGENT.  INTEREST ACCRUED
ON EACH EURODOLLAR ADVANCE SHALL BE PAYABLE ON THE LAST DAY OF ITS APPLICABLE
INTEREST PERIOD, ON ANY DATE ON WHICH THE EURODOLLAR ADVANCE IS PREPAID, WHETHER
BY ACCELERATION OR OTHERWISE, AND AT MATURITY.  INTEREST ACCRUED ON EACH
EURODOLLAR ADVANCE HAVING AN INTEREST PERIOD LONGER THAN THREE MONTHS SHALL ALSO
BE PAYABLE ON THE LAST DAY OF EACH THREE-MONTH INTERVAL DURING SUCH INTEREST
PERIOD OR, IF LATER, UPON RECEIPT OF A BILL FROM THE AGENT.  INTEREST ON
EURODOLLAR ADVANCES AND FEES SHALL BE CALCULATED FOR ACTUAL DAYS ELAPSED ON THE
BASIS OF A 360-DAY YEAR, AND INTEREST ON ALTERNATE BASE RATE ADVANCES SHALL BE
CALCULATED FOR ACTUAL DAYS ELAPSED ON THE BASIS OF A 365 OR 366 DAY YEAR, AS
APPLICABLE.  INTEREST SHALL BE PAYABLE FOR THE DAY A REVOLVING CREDIT ADVANCE IS
MADE BUT NOT FOR THE DAY OF ANY PAYMENT ON THE AMOUNT PAID IF PAYMENT IS
RECEIVED PRIOR TO NOON (CHICAGO TIME) AT THE PLACE OF PAYMENT.  IF ANY PAYMENT
OF PRINCIPAL OF OR INTEREST ON A REVOLVING CREDIT ADVANCE SHALL BECOME DUE ON A
DAY WHICH IS NOT A BUSINESS DAY, SUCH PAYMENT SHALL BE MADE ON THE NEXT
SUCCEEDING BUSINESS DAY AND, IN THE CASE OF A PRINCIPAL PAYMENT, SUCH EXTENSION
OF TIME SHALL BE INCLUDED IN COMPUTING INTEREST IN CONNECTION WITH SUCH
PAYMENT.  ACCRUED AND UNPAID INTEREST UNDER THE EXISTING CREDIT AGREEMENT SHALL
BE PAID ON THE CLOSING DATE.

2.15                NOTIFICATION OF REVOLVING CREDIT ADVANCES, INTEREST RATES
AND PREPAYMENTS, COMMITMENT REDUCTIONS.  PROMPTLY AFTER RECEIPT THEREOF, THE
AGENT WILL NOTIFY EACH LENDER OF THE CONTENTS OF EACH AGGREGATE REVOLVING CREDIT
COMMITMENT REDUCTION NOTICE, BORROWING NOTICE, CONVERSION/CONTINUATION NOTICE
AND REPAYMENT NOTICE RECEIVED BY IT HEREUNDER.  THE AGENT WILL NOTIFY EACH
LENDER OF THE INTEREST RATE APPLICABLE TO EACH EURODOLLAR ADVANCE PROMPTLY UPON
DETERMINATION OF SUCH INTEREST RATE AND WILL GIVE EACH LENDER PROMPT NOTICE OF
EACH CHANGE IN THE ALTERNATE BASE RATE.

2.16                LENDING INSTALLATIONS.  EACH LENDER MAY BOOK ITS REVOLVING
CREDIT LOANS AT ANY LENDING INSTALLATION SELECTED BY SUCH LENDER AND MAY CHANGE
ITS LENDING INSTALLATION FROM TIME TO TIME.  ALL TERMS OF THIS AGREEMENT SHALL
APPLY TO ANY SUCH LENDING INSTALLATION AND THE REVOLVING CREDIT LOANS AND ANY
REVOLVING CREDIT NOTES ISSUED HEREUNDER SHALL BE DEEMED HELD BY EACH LENDER FOR
THE BENEFIT OF SUCH LENDING INSTALLATION.  EACH LENDER MAY, BY WRITTEN NOTICE TO
THE AGENT AND THE BORROWER IN ACCORDANCE WITH ARTICLE XIV, DESIGNATE REPLACEMENT
OR ADDITIONAL LENDING INSTALLATIONS THROUGH WHICH REVOLVING CREDIT LOANS WILL BE
MADE BY IT AND FOR WHOSE ACCOUNT REVOLVING CREDIT LOAN PAYMENTS ARE TO BE MADE.

2.17                NON-RECEIPT OF FUNDS BY THE AGENT.  UNLESS THE BORROWER OR A
LENDER, AS THE CASE MAY BE, NOTIFIES THE AGENT PRIOR TO THE DATE ON WHICH IT IS
SCHEDULED TO MAKE

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PAYMENT TO THE AGENT OF (A) IN THE CASE OF A LENDER, THE PROCEEDS OF A REVOLVING
CREDIT LOAN OR (B) IN THE CASE OF THE BORROWER, A PAYMENT OF PRINCIPAL, INTEREST
OR FEES TO THE AGENT FOR THE ACCOUNT OF THE LENDERS, THAT IT DOES NOT INTEND TO
MAKE SUCH PAYMENT, THE AGENT MAY ASSUME THAT SUCH PAYMENT HAS BEEN MADE.  THE
AGENT MAY, BUT SHALL NOT BE OBLIGATED TO, MAKE THE AMOUNT OF SUCH PAYMENT
AVAILABLE TO THE INTENDED RECIPIENT IN RELIANCE UPON SUCH ASSUMPTION.  IF SUCH
LENDER OR THE BORROWER, AS THE CASE MAY BE, HAS NOT IN FACT MADE SUCH PAYMENT TO
THE AGENT, THE RECIPIENT OF SUCH PAYMENT SHALL, ON DEMAND BY THE AGENT, REPAY TO
THE AGENT THE AMOUNT SO MADE AVAILABLE TOGETHER WITH INTEREST THEREON IN RESPECT
OF EACH DAY DURING THE PERIOD COMMENCING ON THE DATE SUCH AMOUNT WAS SO MADE
AVAILABLE BY THE AGENT UNTIL THE DATE THE AGENT RECOVERS SUCH AMOUNT AT A RATE
PER ANNUM EQUAL TO (I) IN THE CASE OF PAYMENT BY A LENDER, THE FEDERAL FUNDS
EFFECTIVE RATE FOR SUCH DAY FOR THE FIRST THREE DAYS AND, THEREAFTER, THE
INTEREST RATE APPLICABLE TO THE RELEVANT REVOLVING CREDIT LOAN OR (II) IN THE
CASE OF PAYMENT BY THE BORROWER, THE INTEREST RATE APPLICABLE TO THE RELEVANT
REVOLVING CREDIT LOAN.

ARTICLE III

THE LETTER OF CREDIT FACILITY

3.1                   ISSUANCE OF LETTERS OF CREDIT.  (A)  FROM AND AFTER THE
DATE HEREOF TO BUT EXCLUDING THE LETTER OF CREDIT AVAILABILITY TERMINATION DATE,
THE ISSUER AGREES, UPON THE TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT, TO
ISSUE AT THE REQUEST AND FOR THE ACCOUNT OF THE BORROWER, ONE OR MORE LETTERS OF
CREDIT FOR THE ACCOUNT OF THE BORROWER (X) TO SUPPORT THE OBLIGATIONS OF
WHOLLY-OWNED SUBSIDIARIES OF THE BORROWER WITH RESPECT TO SPECIFIC SYNDICATES AT
THE SOCIETY OF LLOYD’S (THE LETTERS OF CREDIT ISSUED UNDER THIS CLAUSE (X) BEING
CALLED THE “LLOYD’S LETTERS OF CREDIT”) AND (Y) TO SUPPORT OTHER OBLIGATIONS,
PROVIDED THAT THE AGGREGATE FACE AMOUNT OF ALL OUTSTANDING LETTERS OF CREDIT
OBLIGATIONS WITH RESPECT TO THIS CLAUSE (Y) DOES NOT AT ANY TIME EXCEED THE
LESSER OF (A) THE LETTER OF CREDIT COMMITMENT AND (B) $5,000,000; PROVIDED,
HOWEVER, THAT THE ISSUER SHALL NOT BE UNDER ANY OBLIGATION TO ISSUE, AND SHALL
NOT ISSUE, ANY LETTER OF CREDIT IF: (I) ANY ORDER, JUDGMENT OR DECREE OF ANY
GOVERNMENTAL AUTHORITY OR OTHER REGULATORY BODY WITH JURISDICTION OVER THE
ISSUER SHALL PURPORT BY ITS TERMS TO ENJOIN OR RESTRAIN SUCH ISSUER FROM ISSUING
SUCH LETTER OF CREDIT, OR ANY LAW OR GOVERNMENTAL RULE, REGULATION, POLICY,
GUIDELINE OR DIRECTIVE (WHETHER OR NOT HAVING THE FORCE OF LAW) FROM ANY
GOVERNMENTAL AUTHORITY OR OTHER REGULATORY BODY WITH JURISDICTION OVER THE
ISSUER SHALL PROHIBIT, OR REQUEST THAT THE ISSUER REFRAIN FROM, THE ISSUANCE OF
LETTERS OF CREDIT IN PARTICULAR OR SHALL IMPOSE UPON THE ISSUER WITH RESPECT TO
ANY LETTER OF CREDIT ANY RESTRICTION OR RESERVE OR CAPITAL REQUIREMENT (FOR
WHICH THE ISSUER IS NOT OTHERWISE COMPENSATED) OR ANY UNREIMBURSED LOSS, COST OR
EXPENSE WHICH WAS NOT APPLICABLE, IN EFFECT AND KNOWN TO THE ISSUER AS OF THE
DATE OF THIS AGREEMENT AND WHICH THE ISSUER IN GOOD FAITH DEEMS MATERIAL TO IT;
(II) ONE OR MORE OF THE CONDITIONS TO SUCH ISSUANCE CONTAINED IN SECTION 5.2 IS
NOT THEN SATISFIED; OR (III) AFTER GIVING EFFECT TO SUCH ISSUANCE, THE AGGREGATE
OUTSTANDING AMOUNT OF THE LETTER OF CREDIT OBLIGATIONS WOULD EXCEED THE LETTER
OF CREDIT COMMITMENT.  LETTERS OF CREDIT SHALL BE DENOMINATED, AT THE BORROWER’S
OPTION, IN EITHER DOLLARS OR POUNDS.

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(B)           IN NO EVENT SHALL:  (I) THE AGGREGATE AMOUNT OF THE LETTER OF
CREDIT OBLIGATIONS AT ANY TIME EXCEED THE LETTER OF CREDIT COMMITMENT; OR (II)
THE EXPIRATION DATE OF ANY LETTER OF CREDIT (OTHER THAN THE LETTERS OF CREDIT
IDENTIFIED ON SCHEDULE 3.1 HERETO) OR THE DATE FOR PAYMENT OF ANY DRAFT
PRESENTED THEREUNDER AND ACCEPTED BY THE ISSUER, BE LATER THAN (X) THE DATE ONE
YEAR AFTER THE EFFECTIVE DATE OF SUCH LETTER OF CREDIT OR (Y) IN THE CASE OF THE
LLOYD’S LETTERS OF CREDIT, FOUR YEARS AFTER NOTICE OF EXPIRY FROM THE ISSUER TO
THE BORROWER AND THE BENEFICIARY OF THE LETTER OF CREDIT; PROVIDED, THAT EACH
LETTER OF CREDIT ISSUED WITH AN AUTOMATIC “EVERGREEN” PROVISION PROVIDING FOR
RENEWAL ABSENT ADVANCE NOTICE BY THE BORROWER OR THE ISSUER SHALL BE
AUTOMATICALLY RENEWED UNLESS AT LEAST 30 DAYS PRIOR TO EACH ANNIVERSARY OF THE
ISSUANCE OF SUCH LETTER OF CREDIT THE BENEFICIARY THEREOF RECEIVES NOTICE FROM
THE ISSUER THAT SUCH LETTER OF CREDIT SHALL NOT BE RENEWED.  THE ISSUER SHALL BE
UNDER NO OBLIGATION TO PERMIT THE RENEWAL OR EXTENSION OF ANY LETTER OF CREDIT
AT ANY TIME (A) WHEN A DEFAULT OR UNMATURED DEFAULT HAS OCCURRED AND IS
CONTINUING OR (B) AFTER THE LETTER OF CREDIT AVAILABILITY TERMINATION DATE.  THE
ISSUER MAY (AND, UPON THE REQUEST OF THE REQUIRED LENDERS, SHALL) GIVE NOTICE OF
TERMINATION OF ANY LLOYD’S LETTERS OF CREDIT WITH AN EXPIRY DATE BASED UPON
NOTICE AT ANY TIME (A) WHEN A DEFAULT HAS OCCURRED AND IS CONTINUING OR (B)
AFTER THE LETTER OF CREDIT AVAILABILITY TERMINATION DATE.

(C)           THE BORROWER AGREES THAT, IF AT ANY TIME AS A RESULT OF REDUCTIONS
IN THE LETTER OF CREDIT COMMITMENT PURSUANT TO SECTION 3.3 OR OTHERWISE THE
AGGREGATE BALANCE OF THE LETTER OF CREDIT OBLIGATIONS EXCEEDS THE LETTER OF
CREDIT COMMITMENT, THE BORROWER SHALL CASH COLLATERALIZE THE LETTER OF CREDIT
OBLIGATIONS BY DEPOSITING INTO THE LETTER OF CREDIT CASH COLLATERAL ACCOUNT CASH
OR CASH COLLATERAL INVESTMENTS IN SUCH AMOUNT AS MAY BE NECESSARY TO ELIMINATE
SUCH EXCESS.

(D)           THE LETTERS OF CREDIT IDENTIFIED ON SCHEDULE 3.1 HERETO WHICH ARE
ISSUED AND OUTSTANDING UNDER THE EXISTING CREDIT AGREEMENT SHALL, UPON
SATISFACTION OF THE CONDITIONS SET FORTH IN ARTICLE V HERETO, AUTOMATICALLY AND
WITHOUT FURTHER ACTION ON THE PART OF THE AGENT, THE ISSUER, THE LENDERS OR THE
BORROWER BE DEEMED LETTERS OF CREDIT ISSUED UNDER THIS AGREEMENT.

(E)           FOR PURPOSES OF DETERMINING USAGE AND AVAILABILITY UNDER THIS
SECTION 3.1, WHEN A LETTER OF CREDIT IS ISSUED IN POUNDS, SUCH POUNDS WILL BE
CONVERTED TO DOLLARS UPON ISSUANCE, UPON THE PROPOSED ISSUANCE OF ANY OTHER
LETTER OF CREDIT AND AT THE END OF EACH CALENDAR QUARTER, AND AT ANY TIME
THEREAFTER AS REQUESTED BY THE AGENT OR ANY LENDER (INCLUDING THE ISSUER) AND
SUCH DETERMINATION SHALL BE MADE BY THE AGENT IN ITS SOLE DETERMINATION BASED
UPON THE SPOT EXCHANGE RATE BETWEEN DOLLARS AND POUNDS AS QUOTED BY THE AGENT’S
FOREIGN EXCHANGE DESK AS OF SUCH DATE OF DETERMINATION.  NOTWITHSTANDING ANY
OTHER PROVISIONS OF THIS AGREEMENT, IF AT ANY TIME, AFTER GIVING EFFECT TO THE
CONVERSION OF POUNDS INTO DOLLARS AS SET FORTH ABOVE, THE AGGREGATE FACE AMOUNT
OF ALL OUTSTANDING LETTERS OF CREDIT IS GREATER THAN THE LETTER OF CREDIT
COMMITMENT (“CONVERSION DIFFERENTIAL”), THEN THE BORROWER SHALL CASH
COLLATERALIZE SUCH CONVERSION DIFFERENTIAL BY DEPOSITING INTO THE LETTER OF
CREDIT CASH COLLATERAL ACCOUNT CASH OR CASH COLLATERAL INVESTMENTS IN AN AMOUNT
EQUAL TO SUCH DIFFERENCE.

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(F)            AT THE REQUEST OF THE BORROWER, LETTERS OF CREDIT MAY BE ISSUED
WITH ANY WHOLLY-OWNED SUBSIDIARY OF THE BORROWER AS AN APPLICANT, SO LONG AS THE
BORROWER IS ALSO AN APPLICANT UNDER THE APPLICABLE REIMBURSEMENT AGREEMENT.  THE
FACT THAT SUCH SUBSIDIARY IS AN APPLICANT SHALL NOT AFFECT THE OBLIGATIONS OF
THE BORROWER WITH RESPECT TO SUCH LETTERS OF CREDIT HEREUNDER OR UNDER ANY
FACILITY  DOCUMENT IN ANY WAY.  ANY REIMBURSEMENT AGREEMENT FOR A LETTER OF
CREDIT WITH RESPECT TO WHICH SUCH SUBSIDIARY IS AN APPLICANT SHALL INCLUDE
LANGUAGE SUBSTANTIALLY SIMILAR TO THAT SET FORTH IN EXHIBIT D OR OTHERWISE
ACCEPTABLE TO THE AGENT.

3.2                   PARTICIPATING INTERESTS.  IMMEDIATELY UPON THE ISSUANCE BY
THE ISSUER OF A LETTER OF CREDIT IN ACCORDANCE WITH SECTION 3.5 (AND WITH
RESPECT TO THE LETTERS OF CREDIT IDENTIFIED ON SCHEDULE 3.1 HERETO, UPON
SATISFACTION OF THE CONDITIONS SET FORTH IN ARTICLE V HEREOF), EACH LENDER SHALL
BE DEEMED TO HAVE IRREVOCABLY AND UNCONDITIONALLY PURCHASED AND RECEIVED FROM
THE ISSUER, WITHOUT RECOURSE, REPRESENTATION OR WARRANTY, AN UNDIVIDED
PARTICIPATION INTEREST EQUAL TO ITS PRO-RATA SHARE OF THE LETTER OF CREDIT
COMMITMENT OF THE FACE AMOUNT OF SUCH LETTER OF CREDIT AND EACH DRAW PAID BY THE
ISSUER THEREUNDER.  EACH LENDER’S OBLIGATION TO PAY ITS PROPORTIONATE SHARE OF
ALL DRAWS UNDER THE LETTERS OF CREDIT, ABSENT GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT BY THE ISSUER IN HONORING ANY SUCH DRAW, SHALL BE ABSOLUTE,
UNCONDITIONAL AND IRREVOCABLE AND IN EACH CASE SHALL BE MADE WITHOUT
COUNTERCLAIM OR SET-OFF BY SUCH LENDER.

3.3                   REDUCTIONS IN LETTER OF CREDIT COMMITMENT.  THE BORROWER
MAY PERMANENTLY REDUCE THE LETTER OF CREDIT COMMITMENT IN WHOLE, OR IN PART
RATABLY AMONG THE LENDERS IN INTEGRAL MULTIPLES OF $2,500,000, UPON AT LEAST
FIVE (5) BUSINESS DAYS’ WRITTEN NOTICE TO THE AGENT, WHICH NOTICE SHALL SPECIFY
THE AMOUNT OF SUCH REDUCTION; PROVIDED, HOWEVER, THAT THE AMOUNT OF THE LETTER
OF CREDIT COMMITMENT MAY NOT BE REDUCED BELOW THE AGGREGATE AMOUNT OF THE
OUTSTANDING LETTER OF CREDIT OBLIGATIONS.

3.4                   REIMBURSEMENT OBLIGATIONS.  (A)  THE BORROWER AGREES TO
PAY TO THE ISSUER OF A LETTER OF CREDIT (I) ON EACH DATE THAT ANY AMOUNT IS
DRAWN UNDER EACH LETTER OF CREDIT (OR, IF ANY DRAW IS PAID BY THE ISSUER AFTER
3:00 P.M. (CHICAGO TIME) ON SUCH DATE, ON THE NEXT SUCCEEDING BUSINESS DAY) A
SUM (AND INTEREST ON SUCH SUM AS PROVIDED IN CLAUSE (II) BELOW) EQUAL TO THE
AMOUNT SO DRAWN PLUS ALL OTHER CHARGES AND EXPENSES WITH RESPECT THERETO
SPECIFIED IN SECTION 3.9 OR IN THE APPLICABLE REIMBURSEMENT AGREEMENT AND (II)
INTEREST ON ANY AND ALL AMOUNTS REMAINING UNPAID UNDER THIS SECTION 3.4 UNTIL
PAYMENT IN FULL AT THE RATE PER ANNUM, COMPUTED FOR ACTUAL DAYS ELAPSED BASED ON
A 365 OR 366 DAY YEAR, AS APPLICABLE, EQUAL TO (A) THE ALTERNATE BASE RATE FOR
SUCH DAY FOR THE FIRST TWO DAYS FOLLOWING THE DUE DATE OF ANY REIMBURSEMENT
OBLIGATIONS, AND (B) THE ALTERNATE BASE RATE FOR SUCH DAY PLUS 2% PER ANNUM. 
THE BORROWER AGREES TO PAY TO THE ISSUER THE AMOUNT OF ALL REIMBURSEMENT
OBLIGATIONS OWING IN RESPECT OF ANY LETTER OF CREDIT IMMEDIATELY WHEN DUE, UNDER
ALL CIRCUMSTANCES, INCLUDING, WITHOUT LIMITATION, ANY OF THE FOLLOWING
CIRCUMSTANCES:  (W) ANY LACK OF VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR
ANY OF THE OTHER FACILITY DOCUMENTS; (X) THE EXISTENCE OF ANY CLAIM, SET-OFF,
DEFENSE OR OTHER RIGHT WHICH THE BORROWER MAY HAVE AT ANY TIME AGAINST A
BENEFICIARY NAMED IN A LETTER OF CREDIT, ANY TRANSFEREE OF ANY LETTER OF CREDIT
(OR ANY PERSON FOR WHOM ANY SUCH TRANSFEREE MAY BE ACTING), ANY LENDER OR ANY
OTHER

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PERSON, WHETHER IN CONNECTION WITH THIS AGREEMENT, ANY LETTER OF CREDIT, THE
TRANSACTIONS CONTEMPLATED HEREIN OR ANY UNRELATED TRANSACTIONS (INCLUDING ANY
UNDERLYING TRANSACTION BETWEEN THE BORROWER AND THE BENEFICIARY NAMED IN ANY
LETTER OF CREDIT); (Y) THE VALIDITY, SUFFICIENCY OR GENUINENESS OF ANY DOCUMENT
WHICH THE ISSUER HAS DETERMINED IN GOOD FAITH COMPLIES ON ITS FACE WITH THE
TERMS OF THE APPLICABLE LETTER OF CREDIT, EVEN IF SUCH DOCUMENT SHOULD LATER
PROVE TO HAVE BEEN FORGED, FRAUDULENT, INVALID OR INSUFFICIENT IN ANY RESPECT OR
ANY STATEMENT THEREIN SHALL HAVE BEEN UNTRUE OR INACCURATE IN ANY RESPECT; OR
(Z) THE SURRENDER OR IMPAIRMENT OF ANY SECURITY FOR THE PERFORMANCE OR
OBSERVANCE OF ANY OF THE TERMS HEREOF.

(B)           NOTWITHSTANDING ANY PROVISIONS TO THE CONTRARY IN ANY
REIMBURSEMENT AGREEMENT, THE BORROWER AGREES TO REIMBURSE THE ISSUER FOR AMOUNTS
WHICH THE ISSUER PAYS UNDER SUCH LETTER OF CREDIT NO LATER THAN THE TIME
SPECIFIED IN THIS AGREEMENT.  IF THE BORROWER DOES NOT PAY ANY SUCH
REIMBURSEMENT OBLIGATIONS WHEN DUE AT ANY TIME PRIOR THE REVOLVING CREDIT
TERMINATION DATE, SUCH REIMBURSEMENT OBLIGATIONS, IF IN POUNDS, SHALL BE DEEMED
TO HAVE BEEN CONVERTED INTO THE EQUIVALENT AMOUNT OF DOLLARS ON THE DATE DUE
BASED UPON THE SPOT RATE OF EXCHANGE BETWEEN DOLLARS AND POUNDS AS DETERMINED BY
THE AGENT ON THE REUTERS WRLD PAGE AS OF THE TIME OF DETERMINATION ON SUCH
DATE.  IN THE EVENT THAT SUCH RATE DOES NOT APPEAR ON ANY REUTERS WRLD PAGE, THE
EXCHANGE RATE SHALL BE DETERMINED BY REFERENCE TO SUCH OTHER PUBLICLY AVAILABLE
SERVICE FOR DISPLAYING EXCHANGE RATES AS MAY BE AGREED UPON BY THE AGENT AND THE
BORROWER, OR, IN THE ABSENCE OF SUCH AN AGREEMENT, SUCH EXCHANGE RATE SHALL
INSTEAD BE THE ARITHMETIC AVERAGE OF THE SPOT RATES OF EXCHANGE OF THE AGENT IN
LONDON AT OR ABOUT SUCH TIME BETWEEN DOLLARS AND POUNDS FOR DELIVERY TWO
BUSINESS DAYS LATER; PROVIDED THAT IF AT THE TIME OF ANY SUCH DETERMINATION, FOR
ANY REASON, NO SUCH SPOT RATE IS BEING QUOTED, THE AGENT MAY USE ANY REASONABLE
METHOD IT DEEMS APPROPRIATE TO DETERMINE SUCH RATE, AND SUCH DETERMINATION SHALL
BE PRESUMED CORRECT ABSENT MANIFEST ERROR.

(C)           IF THE ISSUER MAKES A PAYMENT ON ACCOUNT OF ANY LETTER OF CREDIT
AND IS NOT CONCURRENTLY REIMBURSED THEREFOR BY THE BORROWER, THEN AS PROMPTLY AS
PRACTICAL DURING NORMAL BANKING HOURS ON THE DATE OF ITS RECEIPT OF SUCH NOTICE
OR, IF NOT PRACTICABLE ON SUCH DATE, NOT LATER THAN NOON (CHICAGO TIME) ON THE
BUSINESS DAY IMMEDIATELY SUCCEEDING SUCH DATE OF NOTIFICATION, EACH LENDER SHALL
DELIVER TO THE AGENT FOR THE ACCOUNT OF THE ISSUER, IN IMMEDIATELY AVAILABLE
FUNDS, THE PURCHASE PRICE FOR SUCH LENDER’S INTEREST IN SUCH UNREIMBURSED
REIMBURSEMENT OBLIGATIONS, WHICH SHALL BE AN AMOUNT EQUAL TO SUCH LENDER’S
PRO-RATA SHARE OF SUCH PAYMENT.  EACH LENDER SHALL, UPON DEMAND BY THE ISSUER,
PAY THE ISSUER INTEREST ON SUCH LENDER’S PRO-RATA SHARE OF SUCH DRAW FROM THE
DATE OF PAYMENT BY THE ISSUER ON ACCOUNT OF SUCH LETTER OF CREDIT UNTIL THE DATE
OF DELIVERY OF SUCH FUNDS TO THE ISSUER BY SUCH LENDER AT A RATE PER ANNUM,
COMPUTED FOR ACTUAL DAYS ELAPSED BASED ON A 360-DAY YEAR, EQUAL TO THE FEDERAL
FUNDS EFFECTIVE RATE ON THE AMOUNT OF THE UNREIMBURSED REIMBURSEMENT
OBLIGATIONS, IF IN DOLLARS, OR THE EQUIVALENT AMOUNT OF DOLLARS CALCULATED IN
THE MANNER PROVIDED IN PARAGRAPH (B), IF IN POUNDS, FOR SUCH PERIOD; PROVIDED,
THAT SUCH PAYMENTS SHALL BE MADE BY THE LENDERS ONLY IN THE EVENT AND TO THE
EXTENT THAT THE ISSUER IS NOT REIMBURSED IN FULL BY THE BORROWER FOR INTEREST ON
THE AMOUNT OF ANY DRAW ON THE LETTERS OF CREDIT.

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(D)           AT ANY TIME AFTER THE ISSUER HAS MADE A PAYMENT ON ACCOUNT OF ANY
LETTER OF CREDIT AND HAS RECEIVED FROM ANY OTHER LENDER SUCH LENDER’S PRO-RATA
SHARE OF SUCH PAYMENT, SUCH ISSUER SHALL, FORTHWITH UPON ITS RECEIPT OF ANY
REIMBURSEMENT (IN WHOLE OR IN PART) BY THE BORROWER FOR SUCH PAYMENT, OR OF ANY
OTHER AMOUNT FROM THE BORROWER OR ANY OTHER PERSON IN RESPECT OF SUCH PAYMENT
(INCLUDING, WITHOUT LIMITATION, ANY PAYMENT OF INTEREST OR PENALTY FEES AND ANY
PAYMENT UNDER ANY COLLATERAL ACCOUNT AGREEMENT OF THE BORROWER OR ANY FACILITY
DOCUMENT BUT EXCLUDING ANY TRANSFER OF FUNDS FROM ANY OTHER LENDER PURSUANT TO
SECTION 3.4(B)), TRANSFER TO SUCH OTHER LENDER SUCH OTHER LENDER’S RATABLE SHARE
OF SUCH REIMBURSEMENT OR OTHER AMOUNT; PROVIDED, THAT INTEREST SHALL ACCRUE FOR
THE BENEFIT OF SUCH LENDER FROM THE TIME SUCH ISSUER HAS MADE A PAYMENT ON
ACCOUNT OF ANY LETTER OF CREDIT; PROVIDED, FURTHER, THAT IN THE EVENT THAT THE
RECEIPT BY THE ISSUER OF SUCH REIMBURSEMENT OR OTHER AMOUNT IS FOUND TO HAVE
BEEN A TRANSFER IN FRAUD OF CREDITORS OR A PREFERENTIAL PAYMENT UNDER THE UNITED
STATES BANKRUPTCY CODE OR IS OTHERWISE REQUIRED TO BE RETURNED, SUCH LENDER
SHALL PROMPTLY RETURN TO THE ISSUER ANY PORTION THEREOF PREVIOUSLY TRANSFERRED
BY THE ISSUER TO SUCH LENDER, BUT WITHOUT INTEREST TO THE EXTENT THAT INTEREST
IS NOT PAYABLE BY THE ISSUER IN CONNECTION THEREWITH.

(E)           ALL PAYMENTS IN RESPECT OF REIMBURSEMENT OBLIGATIONS SHALL BE IN
DOLLARS AT THE ISSUER’S SELLING RATE FOR CABLE TRANSFERS TO THE PLACE OF PAYMENT
OF THE LETTER OF CREDIT CURRENT ON THE DATE OF PAYMENT OR OF THE ISSUER’S
SETTLEMENT OF ITS OBLIGATION, AS THE ISSUER MAY REQUIRE OR, AT THE ISSUER’S
ELECTION, IN THE CURRENCY IN WHICH THE ISSUER WAS REQUIRED TO PAY SUCH LETTER OF
CREDIT.  IF, FOR ANY CAUSE, ON THE DATE OF PAYMENT OR SETTLEMENT, AS THE CASE
MAY BE, THERE IS NO SELLING RATE OR OTHER RATE OF EXCHANGE GENERALLY CURRENT IN
CHICAGO FOR EFFECTING SUCH TRANSFERS, THE BORROWER WILL PAY THE ISSUER ON DEMAND
AN AMOUNT IN DOLLARS EQUIVALENT TO THE ISSUER’S ACTUAL COST OF SETTLEMENT ON ITS
OBLIGATION HOWEVER OR WHENEVER THE ISSUER SHALL MAKE SUCH SETTLEMENT, WITH
INTEREST AT THE ALTERNATE BASE RATE FROM THE DATE OF SETTLEMENT TO THE DATE OF
PAYMENT.

3.5   PROCEDURE FOR ISSUANCE.  PRIOR TO THE ISSUANCE OF EACH NEW LETTER OF
CREDIT, AND AS A CONDITION OF SUCH ISSUANCE, THE BORROWER SHALL DELIVER TO THE
ISSUER (WITH A COPY TO THE AGENT) A REIMBURSEMENT AGREEMENT SIGNED BY THE
BORROWER, TOGETHER WITH SUCH OTHER DOCUMENTS OR ITEMS AS MAY BE REQUIRED
PURSUANT TO THE TERMS THEREOF, AND THE PROPOSED FORM AND CONTENT OF SUCH LETTER
OF CREDIT SHALL BE REASONABLY SATISFACTORY TO THE ISSUER.  EACH LETTER OF CREDIT
SHALL BE ISSUED NO EARLIER THAN TWO (2) BUSINESS DAYS AFTER DELIVERY OF THE
FOREGOING DOCUMENTS, WHICH DELIVERY MAY BE BY THE BORROWER TO THE ISSUER BY
TELECOPY, TELEX OR OTHER ELECTRONIC MEANS FOLLOWED BY DELIVERY OF EXECUTED
ORIGINALS WITHIN FIVE (5) DAYS THEREAFTER.  THE DOCUMENTS SO DELIVERED SHALL BE
IN COMPLIANCE WITH THE REQUIREMENTS SET FORTH IN SECTION 3.1(B), AND SHALL
SPECIFY THEREIN (A) THE STATED AMOUNT OF THE LETTER OF CREDIT REQUESTED, (B) THE
EFFECTIVE DATE OF ISSUANCE OF SUCH REQUESTED LETTER OF CREDIT, WHICH SHALL BE A
BUSINESS DAY, (C) THE DATE ON WHICH SUCH REQUESTED LETTER OF CREDIT IS TO
EXPIRE, WHICH SHALL BE NO LATER THAN FOUR YEARS FROM THE DATE OF ISSUANCE OF
SUCH LETTER OF CREDIT OR IN THE CASE OF A LLOYD’S LETTER OF CREDIT, FOUR YEARS
FROM NOTICE OF EXPIRY FROM THE ISSUER TO THE BORROWER AND THE BENEFICIARY OF
SUCH LETTER OF CREDIT, (D) WHETHER THE LETTER OF CREDIT IS TO BE DENOMINATED IN
DOLLARS OR POUNDS, AND (E) THE AGGREGATE AMOUNT OF LETTER OF CREDIT OBLIGATIONS
WHICH ARE OUTSTANDING AND WHICH WILL BE OUTSTANDING AFTER GIVING EFFECT TO THE

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REQUESTED LETTER OF CREDIT ISSUANCE.  THE DELIVERY OF THE FOREGOING DOCUMENTS
AND INFORMATION SHALL CONSTITUTE AN “ISSUANCE REQUEST” FOR PURPOSES OF THIS
AGREEMENT.  SUBJECT TO THE TERMS AND CONDITIONS OF SECTION 3.1 AND PROVIDED THAT
THE APPLICABLE CONDITIONS SET FORTH IN SECTION 5.2 HEREOF HAVE BEEN SATISFIED,
THE ISSUER SHALL, ON THE REQUESTED DATE, ISSUE A LETTER OF CREDIT ON BEHALF OF
THE BORROWER IN ACCORDANCE WITH THE ISSUER’S USUAL AND CUSTOMARY BUSINESS
PRACTICES.  IN ADDITION, ANY AMENDMENT OF AN EXISTING LETTER OF CREDIT SHALL BE
DEEMED TO BE AN ISSUANCE OF A NEW LETTER OF CREDIT AND SHALL BE SUBJECT TO THE
REQUIREMENTS SET FORTH ABOVE.  THE ISSUER SHALL GIVE THE AGENT PROMPT WRITTEN
NOTICE OF THE ISSUANCE OF ANY LETTER OF CREDIT.

3.6                   NATURE OF THE LENDERS’ OBLIGATIONS.  (A)  AS BETWEEN THE
BORROWER AND THE LENDERS, THE BORROWER ASSUMES ALL RISKS OF THE ACTS AND
OMISSIONS OF, OR MISUSE OF THE LETTERS OF CREDIT BY, THE RESPECTIVE
BENEFICIARIES OF THE LETTERS OF CREDIT; PROVIDED, HOWEVER, THAT THE BORROWER MAY
HAVE A CLAIM AGAINST THE ISSUER, AND THE ISSUER MAY BE LIABLE TO THE BORROWER,
TO THE EXTENT, BUT ONLY TO THE EXTENT, OF ANY DIRECT (AS OPPOSED TO
CONSEQUENTIAL OR EXEMPLARY) DAMAGES SUFFERED BY THE BORROWER WHICH THE BORROWER
PROVES WERE CAUSED BY THE ISSUER’S WILLFUL MISCONDUCT OR GROSS NEGLIGENCE IN
DETERMINING WHETHER DOCUMENTS PRESENTED UNDER A LETTER OF  CREDIT COMPLY WITH
THE TERMS OF SUCH LETTER OF CREDIT.  IN FURTHERANCE AND NOT IN LIMITATION OF THE
FOREGOING, THE LENDERS SHALL NOT BE RESPONSIBLE FOR: (I) THE FORM, VALIDITY,
SUFFICIENCY, ACCURACY, GENUINENESS OR LEGAL EFFECT OF ANY DOCUMENT SUBMITTED BY
ANY PARTY IN CONNECTION WITH THE APPLICATION FOR AN ISSUANCE OF A LETTER OF
CREDIT, EVEN IF IT SHOULD IN FACT PROVE TO BE IN ANY OR ALL RESPECTS INVALID,
INSUFFICIENT, INACCURATE, FRAUDULENT OR FORGED; (II) THE VALIDITY OR SUFFICIENCY
OF ANY INSTRUMENT TRANSFERRING OR ASSIGNING OR PURPORTING TO TRANSFER OR ASSIGN
A LETTER OF CREDIT OR THE RIGHTS OR BENEFITS THEREUNDER OR PROCEEDS THEREOF, IN
WHOLE OR IN PART, WHICH MAY PROVE TO BE INVALID OR INEFFECTIVE FOR ANY REASON;
(III) THE FAILURE OF THE BENEFICIARY OF A LETTER OF CREDIT TO COMPLY FULLY WITH
CONDITIONS REQUIRED TO BE SATISFIED BY ANY PERSON OTHER THAN THE ISSUER IN ORDER
TO DRAW UPON SUCH LETTER OF CREDIT; (IV) ERRORS, OMISSIONS, INTERRUPTIONS OR
DELAYS IN TRANSMISSION OR DELIVERY OF ANY MESSAGES, BY MAIL, CABLE, TELEGRAPH,
TELEX OR OTHERWISE; (V) ERRORS IN THE INTERPRETATION OF TECHNICAL TERMS; (VI)
THE MISAPPLICATION BY THE BENEFICIARY OF A LETTER OF CREDIT OF THE PROCEEDS OF
ANY DRAWING UNDER SUCH LETTER OF CREDIT; OR (VII) ANY CONSEQUENCES ARISING FROM
CAUSES BEYOND CONTROL OF THE ISSUER.

(B)           IN FURTHERANCE AND EXTENSION AND NOT IN LIMITATION OF THE SPECIFIC
PROVISIONS HEREINABOVE SET FORTH, ANY ACTION TAKEN OR OMITTED BY THE ISSUER
UNDER OR IN CONNECTION WITH THE LETTERS OF CREDIT OR ANY RELATED CERTIFICATES,
IF TAKEN OR OMITTED IN GOOD FAITH, SHALL NOT PUT THE AGENT OR ANY LENDER UNDER
ANY RESULTING LIABILITY TO THE BORROWER OR RELIEVE THE BORROWER OF ANY OF ITS
OBLIGATIONS HEREUNDER TO THE ISSUER OR ANY SUCH PERSON.

3.7                   NOTIFICATION OF ISSUANCE REQUESTS.  PROMPTLY AFTER RECEIPT
THEREOF, THE AGENT WILL NOTIFY EACH LENDER OF THE CONTENTS OF EACH ISSUANCE
REQUEST RECEIVED BY IT HEREUNDER.

3.8                   CASH COLLATERAL FOR LETTERS OF CREDIT.  IF NO CASH
COLLATERAL SECURITY AGREEMENT HAS BEEN PREVIOUSLY ENTERED INTO, THEN ON THE
LETTER OF CREDIT AVAILABILITY TERMINATION DATE

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THE BORROWER SHALL ENTER INTO THE CASH COLLATERAL SECURITY AGREEMENT AND, IN ANY
EVENT, ON AND AFTER SUCH DATE THE BORROWER SHALL PLEDGE AND DELIVER TO THE
AGENT, FOR THE BENEFIT OF THE LENDERS, CASH OR CASH COLLATERAL INVESTMENTS IN
SUFFICIENT AMOUNTS TO MAINTAIN IN THE LETTER OF CREDIT CASH COLLATERAL ACCOUNT
AN AMOUNT AT LEAST EQUAL TO THE FOLLOWING PERCENTAGE OF THE LETTER OF CREDIT
OBLIGATIONS OUTSTANDING FROM TIME TO TIME DURING THE FOLLOWING PERIODS:

    Period

 

 

 

Percentage of Letter of Credit

Obligations Collateralized

 

 

 

Letter of Credit Availability Termination Date to but not
including first anniversary of Letter of Credit Availability
Termination Date

 

20%

 

 

 

First anniversary of Letter of Credit Availability
Termination Date to but not including second
anniversary of Letter of Credit Availability Termination Date

 

40%

 

 

 

Second anniversary of Letter of Credit Availability
Termination Date to but not including third
anniversary of Letter of Credit Availability Termination Date

 

60%

 

 

 

Third anniversary of Letter of Credit Availability
Termination Date to but not including fourth
anniversary of Letter of Credit Availability Termination Date

 

80%

 

 

 

Fourth anniversary of Letter of Credit Availability
Termination Date and at all times thereafter

 

100%

 

The Letter of Credit Cash Collateral Account shall be maintained by JPMorgan
Chase Bank in the name of the Agent for the ratable benefit of the Lenders and
the Agent pursuant to the terms of Article IX; provided, however, that if no
Default has occurred and is continuing, the Borrower may direct the investment
of funds therein in Cash Collateral Investments.  The earnings thereon shall be
for the account of the Borrower.

3.9                   FEES.

(A)           COMMITMENT FEE.  THE BORROWER AGREES TO PAY TO THE AGENT FOR THE
ACCOUNT OF EACH LENDER WITH RESPECT TO ITS LETTER OF CREDIT PARTICIPATION AMOUNT
A COMMITMENT FEE AT A RATE PER ANNUM EQUAL TO THE APPLICABLE COMMITMENT FEE RATE
ON THE DAILY UNUSED PORTION OF SUCH LENDER’S LETTER OF CREDIT PARTICIPATION
AMOUNT FROM THE CLOSING DATE TO AND INCLUDING THE LETTER OF CREDIT AVAILABILITY
TERMINATION DATE, PAYABLE ON EACH PAYMENT DATE HEREAFTER AND ON THE LETTER OF
CREDIT AVAILABILITY TERMINATION DATE OR, IF LATER, UPON RECEIPT OF A BILL FROM
THE AGENT.  ACCRUED AND UNPAID COMMITMENT FEES UNDER THE EXISTING CREDIT
AGREEMENT SHALL BE PAID ON THE CLOSING DATE OR, IF LATER, UPON RECEIPT OF A BILL
FROM THE AGENT.

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(B)           LETTER OF CREDIT FRONTING FEE.  THE BORROWER HEREBY AGREES TO PAY
TO THE AGENT, FOR THE ACCOUNT OF THE ISSUER, A LETTER OF CREDIT FRONTING FEE
WITH RESPECT TO EACH LETTER OF CREDIT FROM AND INCLUDING THE DATE OF ISSUANCE
THEREOF (OR, WITH RESPECT TO THE LETTERS OF CREDIT IDENTIFIED ON SCHEDULE 3.1,
THE DATE ON WHICH SUCH LETTERS OF CREDIT ARE DEEMED ISSUED UNDER THIS AGREEMENT
PURSUANT TO SECTION 3.1(D)) UNTIL THE DATE SUCH LETTER OF CREDIT IS FULLY DRAWN,
CANCELED OR EXPIRED, IN AN AMOUNT EQUAL TO THE RATE PROVIDED IN THE FEE LETTER
OF THE AGGREGATE INITIAL FACE AMOUNT OF SUCH LETTER OF CREDIT, CALCULATED WITH
RESPECT TO ACTUAL DAYS ELAPSED ON THE BASIS OF A 360-DAY YEAR AND PAYABLE
QUARTERLY IN ARREARS ON EACH PAYMENT DATE IN EACH YEAR AND UPON THE EXPIRATION,
CANCELLATION OR UTILIZATION IN FULL OF SUCH LETTER OF CREDIT.  IN ADDITION TO
THE FOREGOING, THE BORROWER AGREES TO PAY THE ISSUER ANY OTHER FEES CUSTOMARILY
CHARGED BY IT IN RESPECT OF THE ISSUANCE, AMENDMENT, CANCELLATION, NEGOTIATION
OR TRANSFER OF EACH LETTER OF CREDIT AND EACH DRAWING MADE THEREUNDER.  THE
LETTER OF CREDIT FRONTING FEE IS IN ADDITION TO (AND NOT INCLUDED IN) THE LETTER
OF CREDIT PARTICIPATION FEE PROVIDED FOR IN PARAGRAPH (C) BELOW.  ACCRUED AND
UNPAID FRONTING FEES UNDER THE EXISTING CREDIT AGREEMENT SHALL BE PAID ON THE
CLOSING DATE OR, IF LATER, UPON RECEIPT OF A BILL FROM THE AGENT.

(C)           LETTER OF CREDIT PARTICIPATION FEE.  THE BORROWER AGREES TO PAY TO
THE AGENT FOR THE PRO-RATA ACCOUNT OF THE LENDERS (INCLUDING THE ISSUER) A
LETTER OF CREDIT PARTICIPATION FEE WITH RESPECT TO EACH LETTER OF CREDIT FROM
AND INCLUDING THE DATE OF ISSUANCE THEREOF UNTIL THE DATE SUCH LETTER OF CREDIT
IS FULLY DRAWN, CANCELED OR EXPIRED, IN AN AMOUNT EQUAL TO THE APPLICABLE LETTER
OF CREDIT PARTICIPATION FEE RATE ON THE AGGREGATE AMOUNT FROM TIME TO TIME
AVAILABLE TO BE DRAWN ON SUCH LETTER OF CREDIT, CALCULATED WITH RESPECT TO
ACTUAL DAYS ELAPSED ON THE BASIS OF A 360-DAY YEAR AND PAYABLE QUARTERLY IN
ARREARS ON EACH PAYMENT DATE IN EACH YEAR AND UPON THE EXPIRATION, CANCELLATION
OR UTILIZATION IN FULL OF SUCH LETTER OF CREDIT.  DURING THE CONTINUANCE OF A
DEFAULT, THE REQUIRED LENDERS MAY, AT THEIR OPTION, BY NOTICE TO THE BORROWER,
DECLARE THAT THE APPLICABLE LETTER OF CREDIT PARTICIPATION FEE RATE SHALL BE
INCREASED BY 2% PER ANNUM; PROVIDED, THAT DURING THE CONTINUANCE OF A DEFAULT
UNDER SECTION 8.6 OR 8.7, THE APPLICABLE LETTER OF CREDIT PARTICIPATION FEE RATE
SHALL BE INCREASED BY 2% WITHOUT ANY ELECTION OR ACTION ON THE PART OF THE AGENT
OR ANY LENDER.

3.10                 EXTENSION OF REVOLVING CREDIT TERMINATION DATE.  THE
BORROWER MAY REQUEST AN EXTENSION OF THE LETTER OF CREDIT AVAILABILITY
TERMINATION DATE AND THE REVOLVING CREDIT TERMINATION DATE BY SUBMITTING A
REQUEST FOR AN EXTENSION TO THE AGENT (AN “EXTENSION REQUEST”) ON ANY BUSINESS
DAY THAT IS NOT LESS THAN 30 DAYS PRIOR TO THE THEN LETTER OF CREDIT
AVAILABILITY TERMINATION DATE OR REVOLVING CREDIT TERMINATION DATE.  THE
EXTENSION REQUEST MUST SPECIFY THE NEW LETTER OF CREDIT AVAILABILITY TERMINATION
DATE OR NEW REVOLVING CREDIT TERMINATION DATE REQUESTED BY THE BORROWER AND THE
DATE AS OF WHICH DATE (WHICH MUST BE AT LEAST 30 DAYS AFTER THE EXTENSION
REQUEST IS DELIVERED TO THE AGENT) THE LENDERS (INCLUDING THE ISSUER) MUST
RESPOND TO THE EXTENSION REQUEST (THE “RESPONSE DATE”).  THE NEW LETTER OF
CREDIT AVAILABILITY TERMINATION DATE OR NEW REVOLVING CREDIT TERMINATION DATE
SHALL NOT BE MORE THAN TWO YEARS AFTER THE LETTER OF CREDIT AVAILABILITY
TERMINATION DATE OR REVOLVING CREDIT TERMINATION DATE, AS APPLICABLE, IN EFFECT
AT THE TIME THE EXTENSION REQUEST IS RECEIVED, INCLUDING THE LETTER OF CREDIT
AVAILABILITY TERMINATION

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DATE OR REVOLVING CREDIT TERMINATION DATE AS ONE OF THE DAYS IN THE CALCULATION
OF THE DAYS ELAPSED.  PROMPTLY UPON RECEIPT OF AN EXTENSION REQUEST, THE AGENT
SHALL NOTIFY EACH LENDER OF THE CONTENTS THEREOF AND SHALL REQUEST THE ISSUER
AND EACH LENDER TO APPROVE THE EXTENSION REQUEST.  EACH LENDER APPROVING THE
EXTENSION REQUEST SHALL DELIVER ITS WRITTEN CONSENT NO LATER THAN THE RESPONSE
DATE.  IF THE CONSENT OF ALL OF THE LENDERS IN THEIR SOLE DISCRETION IS RECEIVED
BY THE AGENT, THE LETTER OF CREDIT AVAILABILITY TERMINATION DATE OR REVOLVING
CREDIT TERMINATION DATE SPECIFIED IN THE EXTENSION REQUEST SHALL BECOME
EFFECTIVE ON THE EXISTING LETTER OF CREDIT AVAILABILITY TERMINATION DATE OR
REVOLVING CREDIT TERMINATION DATE AND THE AGENT SHALL PROMPTLY NOTIFY THE
BORROWER AND EACH LENDER (INCLUDING THE ISSUER) OF THE NEW LETTER OF CREDIT
AVAILABILITY TERMINATION DATE AND THE NEW REVOLVING CREDIT TERMINATION DATE. 
OTHERWISE THE LETTER OF CREDIT AVAILABILITY TERMINATION DATE OR REVOLVING CREDIT
TERMINATION DATE SHALL BE UNCHANGED.

3.11 Optional Increase in Letter of Credit Commitment.  The Borrower may, from
time to time, by means of a letter delivered to the Agent substantially in the
form of Exhibit E, request that the Letter of Credit Commitment be increased by
an aggregate amount (for all such increases) not exceeding $20,000,000 by (a)
increasing the Letter of Credit Participation Amount of one or more Lenders that
have agreed to such increase (in their sole discretion) and/or (b) adding one or
more commercial banks or other Persons as a party hereto (each an “Additional
Lender”) with a Letter of Credit Participation Amount in an amount agreed to by
any such Additional Lender; provided that (i) any increase in the Letter of
Credit Commitment shall be in an aggregate amount of $1,000,000 or a higher
integral multiple of $1,000,000; (ii) no Additional Lender shall be added as a
party hereto without the written consent of the Agent and the Issuer (which
consents shall not be unreasonably withheld) or if a Default or an Unmatured
Default exists; and (iii) the Borrower may not request an increase in the Letter
of Credit Commitment unless the Borrower has delivered to the Agent (with a copy
for each Lender) a certificate stating that the representations and warranties
contained in Article VI are correct on and as of the date of such certificate as
though made on and as of such date and that no Default or Unmatured Default
exists on such date.  Any increase in the Letter of Credit Commitment pursuant
to this Section 3.11 shall be effective three Business Days after the date on
which the Agent has received and accepted the applicable increase letter in the
form of Annex 1 to Exhibit E (in the case of an increase in the Letter of Credit
Participation Amount of an existing Lender) or assumption letter in the form of
Annex 2 to Exhibit E (in the case of the addition of a commercial bank or other
Person as a new Lender).  The Agent shall promptly notify the Borrower and the
Lenders of any increase in the Letter of Credit Commitment pursuant to this
Section 3.11 and of the Letter of Credit Participation Amount and pro rata share
of each Lender after giving effect thereto.  To the extent that any increase
pursuant to this Section 3.11 is not expressly authorized pursuant to
resolutions or consents delivered pursuant to Section 5.1(b), the Borrower
shall, prior to the effectiveness of such increase, deliver to the Agent a
certificate signed by an authorized officer of the Borrower certifying and
attaching the resolutions or consents that have been adopted to approve or
consent to such increase.

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ARTICLE IV

YIELD PROTECTION; TAXES

4.1   YIELD PROTECTION.  IF, ON OR AFTER THE CLOSING DATE, THE ADOPTION OF ANY
LAW OR ANY GOVERNMENTAL OR QUASI-GOVERNMENTAL RULE, REGULATION, POLICY,
GUIDELINE OR DIRECTIVE (WHETHER OR NOT HAVING THE FORCE OF LAW), OR ANY CHANGE
IN THE INTERPRETATION OR ADMINISTRATION THEREOF BY ANY GOVERNMENTAL OR
QUASI-GOVERNMENTAL AUTHORITY, CENTRAL BANK OR COMPARABLE AGENCY CHARGED WITH THE
INTERPRETATION OR ADMINISTRATION THEREOF, OR COMPLIANCE BY ANY LENDER OR
APPLICABLE LENDING INSTALLATION WITH ANY REQUEST OR DIRECTIVE (WHETHER OR NOT
HAVING THE FORCE OF LAW) OF ANY SUCH AUTHORITY, CENTRAL BANK OR COMPARABLE
AGENCY:

(A)           SUBJECTS ANY LENDER OR ANY APPLICABLE LENDING INSTALLATION TO ANY
TAXES, OR CHANGES THE BASIS OF TAXATION OF PAYMENTS (OTHER THAN WITH RESPECT TO
EXCLUDED TAXES) TO ANY LENDER IN RESPECT OF ITS EURODOLLAR LOANS OR ITS INTEREST
IN THE LETTERS OF CREDIT, OR

(B)           IMPOSES OR INCREASES OR DEEMS APPLICABLE ANY RESERVE, ASSESSMENT,
INSURANCE CHARGE, SPECIAL DEPOSIT OR SIMILAR REQUIREMENT AGAINST ASSETS OF,
DEPOSITS WITH OR FOR THE ACCOUNT OF, OR CREDIT EXTENDED BY, ANY LENDER OR ANY
APPLICABLE LENDING INSTALLATION (OTHER THAN RESERVES AND ASSESSMENTS TAKEN INTO
ACCOUNT IN DETERMINING THE INTEREST RATE APPLICABLE TO EURODOLLAR ADVANCES), OR

(C)           IMPOSES ANY OTHER CONDITION THE RESULT OF WHICH IS TO INCREASE THE
COST TO ANY LENDER OR ANY APPLICABLE LENDING INSTALLATION OF MAKING, FUNDING OR
MAINTAINING ITS EURODOLLAR LOANS OR ISSUING LETTERS OF CREDIT OR REDUCES ANY
AMOUNT RECEIVABLE BY ANY LENDER OR ANY APPLICABLE LENDING INSTALLATION IN
CONNECTION WITH ITS EURODOLLAR LOANS OR ANY LETTER OF CREDIT, OR REQUIRES ANY
LENDER OR ANY APPLICABLE LENDING INSTALLATION TO MAKE ANY PAYMENT CALCULATED BY
REFERENCE TO THE AMOUNT OF EURODOLLAR LOANS HELD, LETTERS OF CREDIT ISSUED OR
PARTICIPATED IN OR INTEREST RECEIVED BY IT, BY AN AMOUNT DEEMED MATERIAL BY SUCH
LENDER,

and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation of making or maintaining its Eurodollar Loans,
the Letter of Credit Commitment or Revolving Credit Commitment or its interest
in the Letters of Credit or to reduce the return received by such Lender or
applicable Lending Installation in connection with such Eurodollar Loans, the
Letter of Credit Commitment or Revolving Credit Commitment or interest in
Letters of Credit, then, within 15 days of demand by such Lender, the Borrower
shall pay such Lender such additional amount or amounts as will compensate such
Lender for such increased cost or reduction in amount received.

4.2   CHANGES IN CAPITAL ADEQUACY REGULATIONS.  IF A LENDER DETERMINES THE
AMOUNT OF CAPITAL REQUIRED OR EXPECTED TO BE MAINTAINED BY SUCH LENDER, ANY
LENDING INSTALLATION OF SUCH LENDER OR ANY CORPORATION CONTROLLING SUCH LENDER
IS INCREASED AS A RESULT OF A CHANGE, THEN, WITHIN 15 DAYS OF DEMAND BY SUCH
LENDER, THE BORROWER SHALL PAY SUCH LENDER THE AMOUNT NECESSARY TO COMPENSATE
FOR ANY SHORTFALL IN THE RATE OF RETURN ON THE PORTION OF SUCH

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INCREASED CAPITAL WHICH SUCH LENDER DETERMINES IS ATTRIBUTABLE TO THIS
AGREEMENT, ITS REVOLVING CREDIT LOANS, ITS REVOLVING CREDIT COMMITMENT TO MAKE
REVOLVING CREDIT LOANS OR ITS COMMITMENT TO PARTICIPATE IN LETTERS OF CREDIT
HEREUNDER (AFTER TAKING INTO ACCOUNT SUCH LENDER’S POLICIES AS TO CAPITAL
ADEQUACY).  “CHANGE” MEANS (A) ANY CHANGE AFTER THE CLOSING DATE IN THE
RISK-BASED CAPITAL GUIDELINES OR (B) ANY ADOPTION OF OR CHANGE IN ANY OTHER LAW,
GOVERNMENTAL OR QUASI-GOVERNMENTAL RULE, REGULATION, POLICY, GUIDELINE,
INTERPRETATION, OR DIRECTIVE (WHETHER OR NOT HAVING THE FORCE OF LAW) AFTER THE
CLOSING DATE WHICH AFFECTS THE AMOUNT OF CAPITAL REQUIRED OR EXPECTED TO BE
MAINTAINED BY ANY LENDER OR ANY LENDING INSTALLATION OR ANY CORPORATION
CONTROLLING ANY LENDER.  “RISK-BASED CAPITAL GUIDELINES” MEANS (I) THE
RISK-BASED CAPITAL GUIDELINES IN EFFECT IN THE UNITED STATES ON THE CLOSING
DATE, INCLUDING TRANSITION RULES, AND (II) THE CORRESPONDING CAPITAL REGULATIONS
PROMULGATED BY REGULATORY AUTHORITIES OUTSIDE THE UNITED STATES IMPLEMENTING THE
JULY 1988 REPORT OF THE BASLE COMMITTEE ON BANKING REGULATION AND SUPERVISORY
PRACTICES ENTITLED “INTERNATIONAL CONVERGENCE OF CAPITAL MEASUREMENTS AND
CAPITAL STANDARDS,” INCLUDING TRANSITION RULES, AND ANY AMENDMENTS TO SUCH
REGULATIONS ADOPTED PRIOR TO THE CLOSING DATE.

4.3   AVAILABILITY OF TYPES OF REVOLVING CREDIT ADVANCES.  IF ANY LENDER
DETERMINES THAT MAINTENANCE OF ITS EURODOLLAR LOANS AT A SUITABLE LENDING
INSTALLATION WOULD VIOLATE ANY APPLICABLE LAW, RULE, REGULATION, OR DIRECTIVE,
WHETHER OR NOT HAVING THE FORCE OF LAW, OR IF THE REQUIRED LENDERS DETERMINE
THAT (I) DEPOSITS OF A TYPE AND MATURITY APPROPRIATE TO MATCH FUND EURODOLLAR
ADVANCES ARE NOT AVAILABLE OR (II) THE INTEREST RATE APPLICABLE TO EURODOLLAR
ADVANCES DOES NOT ACCURATELY REFLECT THE COST OF MAKING OR MAINTAINING
EURODOLLAR ADVANCES, THEN THE AGENT SHALL SUSPEND THE AVAILABILITY OF EURODOLLAR
ADVANCES AND REQUIRE ANY AFFECTED EURODOLLAR ADVANCES TO BE REPAID OR CONVERTED
TO ALTERNATE BASE RATE ADVANCES, SUBJECT TO THE PAYMENT OF ANY FUNDING
INDEMNIFICATION AMOUNTS REQUIRED BY SECTION 4.4.

4.4   FUNDING INDEMNIFICATION.  IF ANY PAYMENT OF A EURODOLLAR ADVANCE OCCURS ON
A DATE WHICH IS NOT THE LAST DAY OF THE APPLICABLE INTEREST PERIOD, WHETHER
BECAUSE OF ACCELERATION, PREPAYMENT OR OTHERWISE, OR A EURODOLLAR ADVANCE IS NOT
MADE ON THE DATE SPECIFIED BY THE BORROWER FOR ANY REASON OTHER THAN DEFAULT BY
THE LENDERS, THE BORROWER WILL INDEMNIFY EACH LENDER FOR ANY LOSS OR COST
INCURRED BY IT RESULTING THEREFROM, INCLUDING, WITHOUT LIMITATION, ANY LOSS OR
COST IN LIQUIDATING OR EMPLOYING DEPOSITS ACQUIRED TO FUND OR MAINTAIN SUCH
EURODOLLAR ADVANCE.

4.5           TAXES.  (A)  ALL PAYMENTS BY THE BORROWER TO OR FOR THE ACCOUNT OF
ANY LENDER OR THE AGENT HEREUNDER OR UNDER ANY REVOLVING CREDIT NOTE SHALL BE
MADE FREE AND CLEAR OF AND WITHOUT DEDUCTION FOR ANY AND ALL TAXES.  IF THE
BORROWER SHALL BE REQUIRED BY LAW TO DEDUCT ANY TAXES FROM OR IN RESPECT OF ANY
SUM PAYABLE HEREUNDER TO ANY LENDER OR THE AGENT, (I) THE SUM PAYABLE SHALL BE
INCREASED AS NECESSARY SO THAT AFTER MAKING ALL REQUIRED DEDUCTIONS (INCLUDING
DEDUCTIONS APPLICABLE TO ADDITIONAL SUMS PAYABLE UNDER THIS SECTION 4.5) SUCH
LENDER OR THE AGENT (AS THE CASE MAY BE) RECEIVES AN AMOUNT EQUAL TO THE SUM IT
WOULD HAVE RECEIVED HAD NO SUCH DEDUCTIONS BEEN MADE, (II) THE BORROWER SHALL
MAKE SUCH DEDUCTIONS, (III) THE BORROWER SHALL PAY THE FULL AMOUNT DEDUCTED TO
THE RELEVANT AUTHORITY IN ACCORDANCE WITH APPLICABLE LAW AND (IV) THE BORROWER
SHALL FURNISH TO THE AGENT THE ORIGINAL COPY OF A RECEIPT EVIDENCING PAYMENT
THEREOF WITHIN THIRTY (30) DAYS AFTER SUCH PAYMENT IS MADE.

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(B)           IN ADDITION, THE BORROWER HEREBY AGREES TO PAY ANY PRESENT OR
FUTURE STAMP OR DOCUMENTARY TAXES AND ANY OTHER EXCISE OR PROPERTY TAXES,
CHARGES OR SIMILAR LEVIES WHICH ARISE FROM ANY PAYMENT MADE HEREUNDER OR UNDER
ANY REVOLVING CREDIT NOTE OR FROM THE EXECUTION OR DELIVERY OF, OR OTHERWISE
WITH RESPECT TO, THIS AGREEMENT OR ANY REVOLVING CREDIT NOTE (“OTHER TAXES”).

(C)           THE BORROWER HEREBY AGREES TO INDEMNIFY THE AGENT AND EACH LENDER
FOR THE FULL AMOUNT OF TAXES OR OTHER TAXES (INCLUDING, WITHOUT LIMITATION, ANY
TAXES OR OTHER TAXES IMPOSED ON AMOUNTS PAYABLE UNDER THIS SECTION 4.5) PAID BY
THE AGENT OR SUCH LENDER AND ANY LIABILITY (INCLUDING PENALTIES, INTEREST AND
EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO.  PAYMENTS DUE UNDER THIS
INDEMNIFICATION SHALL BE MADE WITHIN THIRTY (30) DAYS OF THE DATE THE AGENT OR
SUCH LENDER MAKES DEMAND THEREFOR PURSUANT TO SECTION 4.6.

(D)           EACH LENDER THAT IS NOT INCORPORATED UNDER THE LAWS OF THE UNITED
STATES OF AMERICA OR A STATE THEREOF (EACH A “NON-U.S. LENDER”) AGREES THAT IT
WILL, NOT LESS THAN TEN (10) BUSINESS DAYS AFTER THE DATE OF THIS AGREEMENT, (I)
DELIVER TO EACH OF THE BORROWER AND THE AGENT SUCH PROPERLY COMPLETED AND
EXECUTED DOCUMENTATION PRESCRIBED BY APPLICABLE LAW OR REASONABLY REQUESTED BY
THE BORROWER, CERTIFYING THAT SUCH LENDER IS ENTITLED TO RECEIVE PAYMENTS UNDER
THIS AGREEMENT WITHOUT DEDUCTION OR WITHHOLDING OF ANY UNITED STATES FEDERAL
INCOME TAXES.  EACH NON-U.S. LENDER FURTHER UNDERTAKES TO DELIVER TO EACH OF THE
BORROWER AND THE AGENT (X) RENEWALS OR ADDITIONAL COPIES OF SUCH FORM (OR ANY
SUCCESSOR FORM) ON OR BEFORE THE DATE THAT SUCH FORM EXPIRES OR BECOMES
OBSOLETE, AND (Y) AFTER THE OCCURRENCE OF ANY EVENT REQUIRING A CHANGE IN THE
MOST RECENT FORMS SO DELIVERED BY IT, SUCH ADDITIONAL FORMS OR AMENDMENTS
THERETO AS MAY BE REASONABLY REQUESTED BY THE BORROWER OR THE AGENT.  ALL FORMS
OR AMENDMENTS DESCRIBED IN THE PRECEDING SENTENCE SHALL CERTIFY THAT SUCH LENDER
IS ENTITLED TO RECEIVE PAYMENTS UNDER THIS AGREEMENT WITHOUT DEDUCTION OR
WITHHOLDING OF ANY UNITED STATES FEDERAL INCOME TAXES, 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 RENDERS ALL SUCH FORMS INAPPLICABLE OR WHICH WOULD PREVENT SUCH
LENDER FROM DULY COMPLETING AND DELIVERING ANY SUCH FORM OR AMENDMENT WITH
RESPECT TO IT AND SUCH LENDER ADVISES THE BORROWER AND THE AGENT THAT IT IS NOT
CAPABLE OF RECEIVING PAYMENTS WITHOUT ANY DEDUCTION OR WITHHOLDING OF UNITED
STATES FEDERAL INCOME TAX.

(E)           FOR ANY PERIOD DURING WHICH A NON-U.S. LENDER HAS FAILED TO
PROVIDE THE BORROWER WITH AN APPROPRIATE FORM PURSUANT TO PARAGRAPH (D) ABOVE
(UNLESS SUCH FAILURE IS DUE TO A CHANGE IN TREATY, LAW OR REGULATION, OR ANY
CHANGE IN THE INTERPRETATION OR ADMINISTRATION THEREOF BY ANY GOVERNMENTAL
AUTHORITY, OCCURRING SUBSEQUENT TO THE DATE ON WHICH A FORM ORIGINALLY WAS
REQUIRED TO BE PROVIDED), SUCH NON-U.S. LENDER SHALL NOT BE ENTITLED TO
INDEMNIFICATION UNDER THIS SECTION 4.5 WITH RESPECT TO TAXES IMPOSED BY THE
UNITED STATES; PROVIDED THAT, SHOULD A NON-U.S. LENDER WHICH IS OTHERWISE EXEMPT
FROM OR SUBJECT TO A REDUCED RATE OF WITHHOLDING TAX BECOME SUBJECT TO TAXES
BECAUSE OF ITS FAILURE TO DELIVER A FORM REQUIRED UNDER PARAGRAPH (D) ABOVE, THE
BORROWER SHALL TAKE SUCH

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STEPS AS SUCH NON-U.S. LENDER SHALL REASONABLY REQUEST TO ASSIST SUCH NON-U.S.
LENDER TO RECOVER SUCH TAXES.

(F)            ANY LENDER THAT IS ENTITLED TO AN EXEMPTION FROM OR REDUCTION OF
WITHHOLDING TAX WITH RESPECT TO PAYMENTS UNDER THIS AGREEMENT OR ANY REVOLVING
CREDIT NOTE PURSUANT TO THE LAW OF ANY RELEVANT JURISDICTION OR ANY TREATY SHALL
DELIVER TO THE BORROWER (WITH A COPY TO THE AGENT), AT THE TIME OR TIMES
PRESCRIBED BY APPLICABLE LAW, SUCH PROPERLY COMPLETED AND EXECUTED DOCUMENTATION
PRESCRIBED BY APPLICABLE LAW AS WILL PERMIT SUCH PAYMENTS TO BE MADE WITHOUT
WITHHOLDING OR AT A REDUCED RATE.

(G)           IF THE U.S. INTERNAL REVENUE SERVICE OR ANY OTHER GOVERNMENTAL
AUTHORITY OF THE UNITED STATES OR ANY OTHER COUNTRY OR ANY POLITICAL SUBDIVISION
THEREOF ASSERTS A CLAIM THAT THE AGENT DID NOT PROPERLY WITHHOLD TAX FROM
AMOUNTS PAID TO OR FOR THE ACCOUNT OF ANY LENDER (BECAUSE THE APPROPRIATE FORM
WAS NOT DELIVERED OR PROPERLY COMPLETED, BECAUSE SUCH LENDER FAILED TO NOTIFY
THE AGENT OF A CHANGE IN CIRCUMSTANCES WHICH RENDERED ITS EXEMPTION FROM
WITHHOLDING INEFFECTIVE, OR FOR ANY OTHER REASON), SUCH LENDER SHALL INDEMNIFY
THE AGENT FULLY FOR ALL AMOUNTS PAID, DIRECTLY OR INDIRECTLY, BY THE AGENT AS
TAX, WITHHOLDING THEREFOR, OR OTHERWISE, INCLUDING PENALTIES AND INTEREST, AND
INCLUDING TAXES IMPOSED BY ANY JURISDICTION ON AMOUNTS PAYABLE TO THE AGENT
UNDER THIS SUBSECTION, TOGETHER WITH ALL COSTS AND EXPENSES RELATED THERETO
(INCLUDING ATTORNEYS FEES AND TIME CHARGES OF ATTORNEYS FOR THE AGENT, WHICH
ATTORNEYS MAY BE EMPLOYEES OF THE AGENT).  THE OBLIGATIONS OF THE LENDERS UNDER
THIS SECTION 4.5(G) SHALL SURVIVE THE PAYMENT OF THE OBLIGATIONS AND TERMINATION
OF THIS AGREEMENT.

4.6   LENDER STATEMENTS; SURVIVAL OF INDEMNITY.  TO THE EXTENT REASONABLY
POSSIBLE, EACH LENDER SHALL DESIGNATE AN ALTERNATE LENDING INSTALLATION WITH
RESPECT TO ITS EURODOLLAR LOANS TO REDUCE ANY LIABILITY OF THE BORROWER TO SUCH
LENDER UNDER SECTIONS 4.1, 4.2 AND 4.5 OR TO AVOID THE UNAVAILABILITY OF
EURODOLLAR ADVANCES UNDER SECTION 4.3, SO LONG AS SUCH DESIGNATION IS NOT, IN
THE JUDGMENT OF SUCH LENDER, DISADVANTAGEOUS TO SUCH LENDER.  EACH LENDER SHALL
DELIVER A WRITTEN STATEMENT OF SUCH LENDER TO THE BORROWER (WITH A COPY TO THE
AGENT) AS TO THE AMOUNT DUE, IF ANY, UNDER SECTION 4.1, 4.2, 4.4 OR 4.5.  SUCH
WRITTEN STATEMENT SHALL SET FORTH IN REASONABLE DETAIL THE CALCULATIONS UPON
WHICH SUCH LENDER DETERMINED SUCH AMOUNT AND SHALL BE FINAL, CONCLUSIVE AND
BINDING ON THE BORROWER IN THE ABSENCE OF MANIFEST ERROR.  DETERMINATION OF
AMOUNTS PAYABLE UNDER SUCH SECTIONS IN CONNECTION WITH A EURODOLLAR LOAN SHALL
BE CALCULATED AS THOUGH EACH LENDER FUNDED ITS EURODOLLAR LOAN THROUGH THE
PURCHASE OF A DEPOSIT OF THE TYPE AND MATURITY CORRESPONDING TO THE DEPOSIT USED
AS A REFERENCE IN DETERMINING THE EURODOLLAR RATE APPLICABLE TO SUCH REVOLVING
CREDIT LOAN, WHETHER IN FACT THAT IS THE CASE OR NOT.  UNLESS OTHERWISE PROVIDED
HEREIN, THE AMOUNT SPECIFIED IN THE WRITTEN STATEMENT OF ANY LENDER SHALL BE
PAYABLE ON DEMAND AFTER RECEIPT BY THE BORROWER OF SUCH WRITTEN STATEMENT.  THE
OBLIGATIONS OF THE BORROWER UNDER SECTIONS 4.1, 4.2, 4.4 AND 4.5 SHALL SURVIVE
PAYMENT OF THE OBLIGATIONS AND TERMINATION OF THIS AGREEMENT.

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ARTICLE V

CONDITIONS PRECEDENT

5.1   INITIAL REVOLVING CREDIT LOANS AND LETTERS OF CREDIT.  THE AMENDMENTS TO
THE EXISTING CREDIT AGREEMENT EMBODIED IN THIS AGREEMENT SHALL NOT BE EFFECTIVE
(IN WHICH CASE THE EXISTING CREDIT AGREEMENT SHALL REMAIN IN FULL FORCE AND
EFFECT) AND THE LENDERS SHALL HAVE NO OBLIGATION TO MAKE REVOLVING CREDIT
ADVANCES HEREUNDER AND THE ISSUER SHALL HAVE NO OBLIGATION TO ISSUE ANY LETTER
OF CREDIT HEREUNDER UNLESS AND UNTIL ALL LOANS UNDER THE EXISTING CREDIT
AGREEMENT HAVE BEEN PAID IN FULL AND THE BORROWER HAS FURNISHED THE FOLLOWING TO
THE AGENT WITH SUFFICIENT COPIES FOR THE LENDERS AND THE OTHER CONDITIONS SET
FORTH BELOW HAVE BEEN SATISFIED:

(A)           CHARTER DOCUMENTS; GOOD STANDING CERTIFICATES.  COPIES OF THE
ARTICLES OR CERTIFICATE OF INCORPORATION OF THE BORROWER, TOGETHER WITH ALL
AMENDMENTS, AND A CERTIFICATE OF GOOD STANDING, EACH CERTIFIED BY THE
APPROPRIATE GOVERNMENTAL OFFICER IN ITS JURISDICTION OF INCORPORATION.

(B)           BY-LAWS AND RESOLUTIONS.  COPIES, CERTIFIED BY THE SECRETARY OR
ASSISTANT SECRETARY OF THE BORROWER, OF ITS BY-LAWS AND OF ITS BOARD OF
DIRECTORS’ RESOLUTIONS AND OF RESOLUTIONS OR ACTIONS OF ANY OTHER BODY
AUTHORIZING THE EXECUTION OF THE FACILITY DOCUMENTS TO WHICH THE BORROWER IS A
PARTY.

(C)           SECRETARY’S CERTIFICATE.  AN INCUMBENCY CERTIFICATE, EXECUTED BY
THE SECRETARY OR ASSISTANT SECRETARY OF THE BORROWER, WHICH SHALL IDENTIFY BY
NAME AND TITLE AND BEAR THE SIGNATURE OF THE OFFICERS OF THE BORROWER AUTHORIZED
TO SIGN THE FACILITY DOCUMENTS, UPON WHICH CERTIFICATE THE AGENT AND THE LENDERS
SHALL BE ENTITLED TO RELY UNTIL INFORMED OF ANY CHANGE IN WRITING BY THE
BORROWER.

(D)           OFFICER’S CERTIFICATE.  A CERTIFICATE, SIGNED BY AN AUTHORIZED
OFFICER OF THE BORROWER, STATING THAT:  (I) ON THE CLOSING DATE NO DEFAULT OR
UNMATURED DEFAULT HAS OCCURRED AND IS CONTINUING; AND (II) EACH OF THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE VI OF THIS AGREEMENT IS TRUE
AND CORRECT ON AND AS OF THE CLOSING DATE.

(E)           LEGAL OPINIONS.  A WRITTEN OPINION OF ELLIOT OROL, INTERNAL
COUNSEL TO THE BORROWER AND ITS SUBSIDIARIES, ADDRESSED TO THE AGENT AND THE
LENDERS IN FORM AND SUBSTANCE ACCEPTABLE TO THE AGENT AND ITS COUNSEL.

(F)            REVOLVING CREDIT NOTES. ANY REVOLVING CREDIT NOTES REQUESTED BY A
LENDER PURSUANT TO SECTION 2.12 PAYABLE TO THE ORDER OF EACH SUCH REQUESTING
LENDER.

(G)           FACILITY DOCUMENTS.  EXECUTED ORIGINALS OF THIS AGREEMENT AND EACH
OF THE FACILITY DOCUMENTS, WHICH SHALL BE IN FULL FORCE AND EFFECT, TOGETHER
WITH ALL SCHEDULES, EXHIBITS, CERTIFICATES, STOCK CERTIFICATES (INCLUDING STOCK
CERTIFICATES REPRESENTING ALL OF THE OUTSTANDING STOCK OF EACH SIGNIFICANT
SUBSIDIARY OTHER THAN NSIC), RELATED STOCK POWERS,

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INSTRUMENTS, OPINIONS AND DOCUMENTS REQUIRED TO BE DELIVERED PURSUANT HERETO AND
THERETO.

(H)           OTHER.  SUCH OTHER DOCUMENTS AS THE AGENT, ANY LENDER OR THEIR
COUNSEL MAY HAVE REASONABLY REQUESTED.

5.2   EACH REVOLVING CREDIT ADVANCE AND LETTER OF CREDIT.  THE LENDERS SHALL NOT
BE REQUIRED TO MAKE ANY REVOLVING CREDIT ADVANCE (OTHER THAN A REVOLVING CREDIT
ADVANCE THAT, AFTER GIVING EFFECT THERETO AND TO THE APPLICATION OF THE PROCEEDS
THEREOF, DOES NOT INCREASE THE AGGREGATE AMOUNT OF OUTSTANDING REVOLVING CREDIT
ADVANCES), AND THE ISSUER SHALL NOT BE OBLIGATED TO ISSUE ANY LETTER OF CREDIT,
UNLESS ON THE APPLICABLE BORROWING DATE:

(A)           THERE EXISTS NO DEFAULT OR UNMATURED DEFAULT AND NONE WOULD RESULT
FROM SUCH REVOLVING CREDIT ADVANCE OR ISSUANCE OF SUCH LETTER OF CREDIT;

(B)           THE REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE VI ARE
TRUE AND CORRECT AS OF SUCH BORROWING DATE EXCEPT TO THE EXTENT ANY SUCH
REPRESENTATION OR WARRANTY IS STATED TO RELATE SOLELY TO AN EARLIER DATE, IN
WHICH CASE SUCH REPRESENTATION OR WARRANTY SHALL HAVE BEEN TRUE AND CORRECT ON
AND AS OF SUCH EARLIER DATE.

(C)           A BORROWING NOTICE OR ISSUANCE REQUEST, AS APPLICABLE, SHALL HAVE
BEEN PROPERLY SUBMITTED; AND

(D)           ALL LEGAL MATTERS INCIDENT TO THE MAKING OF SUCH REVOLVING CREDIT
ADVANCE OR ISSUANCE OF SUCH LETTER OF CREDIT SHALL BE SATISFACTORY TO THE
LENDERS AND THEIR COUNSEL.

Each Borrowing Notice with respect to each such Revolving Credit Advance and
each Issuance Request with respect to each such Letter of Credit shall
constitute a representation and warranty by the Borrower that the conditions
contained in Section 5.2 (a) and (b) have been satisfied.  Any Lender may
require a duly completed compliance certificate in substantially the form of
Exhibit B hereto as a condition to making a Revolving Credit Advance or issuing
a Letter of Credit.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lenders that:

6.1   EXISTENCE AND STANDING.  EACH OF THE BORROWER AND ITS SUBSIDIARIES IS A
CORPORATION, DULY AND PROPERLY INCORPORATED, VALIDLY EXISTING AND IN GOOD
STANDING UNDER THE LAWS OF ITS JURISDICTION OF INCORPORATION OR ORGANIZATION AND
HAS ALL REQUISITE AUTHORITY TO CONDUCT ITS BUSINESS IN EACH JURISDICTION IN
WHICH ITS BUSINESS IS CONDUCTED.

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6.2   AUTHORIZATION AND VALIDITY.  THE BORROWER HAS THE CORPORATE POWER AND
AUTHORITY AND LEGAL RIGHT TO EXECUTE AND DELIVER THE FACILITY DOCUMENTS AND TO
PERFORM ITS OBLIGATIONS THEREUNDER.  THE EXECUTION AND DELIVERY BY THE BORROWER
OF THE FACILITY DOCUMENTS AND THE PERFORMANCE OF ITS OBLIGATIONS THEREUNDER HAVE
BEEN DULY AUTHORIZED BY PROPER CORPORATE PROCEEDINGS, AND THE FACILITY DOCUMENTS
TO WHICH THE BORROWER IS A PARTY CONSTITUTE LEGAL, VALID AND BINDING OBLIGATIONS
OF THE BORROWER ENFORCEABLE AGAINST THE BORROWER IN ACCORDANCE WITH THEIR TERMS,
EXCEPT AS ENFORCEABILITY MAY BE LIMITED BY BANKRUPTCY, INSOLVENCY OR SIMILAR
LAWS AFFECTING THE ENFORCEMENT OF CREDITORS’ RIGHTS GENERALLY.

6.3   NO CONFLICT; GOVERNMENT CONSENT.  NEITHER THE EXECUTION AND DELIVERY BY
THE BORROWER OF THE FACILITY DOCUMENTS, NOR THE CONSUMMATION OF THE TRANSACTIONS
THEREIN CONTEMPLATED, NOR COMPLIANCE WITH THE PROVISIONS THEREOF WILL VIOLATE
(A) ANY LAW, RULE, REGULATION, ORDER, WRIT, JUDGMENT, INJUNCTION, DECREE OR
AWARD BINDING ON THE BORROWER OR ANY OF ITS SUBSIDIARIES OR (B) THE BORROWER’S
OR ANY SUBSIDIARY’S ARTICLES OR CERTIFICATE OF INCORPORATION, PARTNERSHIP
AGREEMENT, CERTIFICATE OF PARTNERSHIP, ARTICLES OR CERTIFICATE OF ORGANIZATION,
BY-LAWS, OR OPERATING OR OTHER MANAGEMENT AGREEMENT, AS THE CASE MAY BE, OR (C)
THE PROVISIONS OF ANY INDENTURE, INSTRUMENT OR AGREEMENT TO WHICH THE BORROWER
OR ANY OF ITS SUBSIDIARIES IS A PARTY OR IS SUBJECT, OR BY WHICH IT, OR ITS
PROPERTY, IS BOUND, OR CONFLICT WITH OR CONSTITUTE A DEFAULT THEREUNDER, OR
RESULT IN, OR REQUIRE, THE CREATION OR IMPOSITION OF ANY LIEN IN, OF OR ON THE
PROPERTY OF THE BORROWER OR A SUBSIDIARY PURSUANT TO THE TERMS OF ANY SUCH
INDENTURE, INSTRUMENT OR AGREEMENT.  NO ORDER, CONSENT, ADJUDICATION, APPROVAL,
LICENSE, AUTHORIZATION, OR VALIDATION OF, OR FILING, RECORDING OR REGISTRATION
WITH, OR EXEMPTION BY, OR OTHER ACTION IN RESPECT OF ANY GOVERNMENTAL OR PUBLIC
BODY OR AUTHORITY, OR ANY SUBDIVISION THEREOF, WHICH HAS NOT BEEN OBTAINED BY
THE BORROWER OR ANY OF ITS SUBSIDIARIES, IS REQUIRED TO BE OBTAINED BY THE
BORROWER OR ANY OF ITS SUBSIDIARIES IN CONNECTION WITH THE EXECUTION AND
DELIVERY OF THE FACILITY DOCUMENTS, THE EXTENSIONS OF CREDIT UNDER THIS
AGREEMENT, THE PAYMENT AND PERFORMANCE BY THE BORROWER OF THE OBLIGATIONS OR THE
LEGALITY, VALIDITY, BINDING EFFECT OR ENFORCEABILITY OF ANY OF THE FACILITY
DOCUMENTS, EXCEPT THAT APPROVAL OF THE NEW YORK INSURANCE DEPARTMENT, THE
CALIFORNIA INSURANCE DEPARTMENT AND/OR ONE OR MORE OTHER STATE INSURANCE
DEPARTMENTS WOULD BE REQUIRED IN ORDER FOR THE LENDERS TO ACQUIRE CONTROL OF
NAVIGATORS AND NSIC.  NEITHER THE BORROWER NOR ANY SUBSIDIARY IS IN DEFAULT
UNDER OR IN VIOLATION OF ANY FOREIGN, FEDERAL, STATE OR LOCAL LAW, RULE,
REGULATION, ORDER, WRIT, JUDGMENT, INJUNCTION, DECREE OR AWARD BINDING UPON OR
APPLICABLE TO THE BORROWER OR SUCH SUBSIDIARY, IN EACH CASE THE CONSEQUENCES OF
WHICH DEFAULT OR VIOLATION COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT.

6.4   FINANCIAL STATEMENTS.  (A)  THE CONSOLIDATED BALANCE SHEETS OF THE
BORROWER AND THE CONSOLIDATED SUBSIDIARIES AS OF DECEMBER 31, 2005 THE RELATED
CONSOLIDATED STATEMENTS OF INCOME, CONSOLIDATED STATEMENTS OF STOCKHOLDERS’
EQUITY, AND CONSOLIDATED STATEMENTS OF CASH FLOWS OF THE BORROWER AND SUCH
CONSOLIDATED SUBSIDIARIES FOR THE FISCAL YEAR THEN ENDED, AND THE ACCOMPANYING
FOOTNOTES, TOGETHER, WITH THE OPINION THEREON, OF KPMG PEAT MARWICK, INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS, COPIES OF WHICH HAVE BEEN FURNISHED TO THE
LENDERS, FAIRLY PRESENT THE FINANCIAL CONDITION OF THE BORROWER AND THE
CONSOLIDATED SUBSIDIARIES AS AT SUCH DATES AND THE RESULTS OF THE OPERATIONS OF
THE BORROWER AND

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CONSOLIDATED SUBSIDIARIES FOR THE PERIODS COVERED BY SUCH STATEMENTS, ALL IN
ACCORDANCE WITH AGREEMENT ACCOUNTING PRINCIPLES CONSISTENTLY APPLIED.

(B)           THE CONSOLIDATED BALANCE SHEETS OF THE BORROWER AND THE
CONSOLIDATED SUBSIDIARIES AS OF SEPTEMBER 30, 2006 AND THE RELATED CONSOLIDATED
STATEMENTS OF INCOME, CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY, AND
CONSOLIDATED STATEMENTS OF CASH FLOWS OF THE BORROWER AND SUCH CONSOLIDATED
SUBSIDIARIES FOR THE FISCAL QUARTER THEN ENDED, COPIES OF WHICH HAVE BEEN
FURNISHED TO THE LENDERS, FAIRLY PRESENT THE FINANCIAL CONDITION OF THE BORROWER
AND THE CONSOLIDATED SUBSIDIARIES AS AT SUCH DATES AND THE RESULTS OF THE
OPERATIONS OF THE BORROWER AND THE CONSOLIDATED SUBSIDIARIES FOR THE PERIODS
COVERED BY SUCH STATEMENTS, ALL IN ACCORDANCE WITH AGREEMENT ACCOUNTING
PRINCIPLES CONSISTENTLY APPLIED (SUBJECT TO CHANGES RESULTING FROM NORMAL
YEAR-END AUDIT ADJUSTMENTS).

(C)           THERE ARE NO LIABILITIES OF THE BORROWER OR ANY OF THE
CONSOLIDATED SUBSIDIARIES, FIXED OR CONTINGENT, WHICH ARE MATERIAL BUT ARE NOT
REFLECTED IN THE MOST RECENT FINANCIAL STATEMENTS REFERRED TO ABOVE OR IN THE
NOTES THERETO, OTHER THAN LIABILITIES ARISING IN THE ORDINARY COURSE OF BUSINESS
SINCE SEPTEMBER 30, 2006.

6.5   STATUTORY FINANCIAL STATEMENTS.  (A)  THE ANNUAL STATEMENT OF EACH OF THE
INSURANCE SUBSIDIARIES (INCLUDING, WITHOUT LIMITATION, THE PROVISIONS MADE
THEREIN FOR INVESTMENTS AND THE VALUATION THEREOF, RESERVES, POLICY AND CONTRACT
CLAIMS AND STATUTORY LIABILITIES) AS FILED WITH THE APPROPRIATE GOVERNMENTAL
AUTHORITY OF ITS STATE OF DOMICILE (THE “DEPARTMENT”) AND DELIVERED TO EACH
LENDER PRIOR TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT, AS OF AND FOR THE
2005 FISCAL YEAR, AND AS OF AND FOR THE FISCAL QUARTER ENDED SEPTEMBER 30, 2006
(COLLECTIVELY, THE “STATUTORY FINANCIAL STATEMENTS”), HAVE BEEN PREPARED IN
ACCORDANCE WITH SAP APPLIED ON A CONSISTENT BASIS (EXCEPT AS NOTED THEREIN). 
EACH SUCH STATUTORY FINANCIAL STATEMENT WAS IN COMPLIANCE WITH APPLICABLE LAW
WHEN FILED.

(B)           NO DIVIDENDS OR OTHER DISTRIBUTIONS HAVE BEEN DECLARED, PAID OR
MADE UPON ANY SHARES OF CAPITAL STOCK OF THE BORROWER, NOR HAVE ANY SHARES OF
CAPITAL STOCK OF THE BORROWER BEEN REDEEMED, RETIRED, PURCHASED OR OTHERWISE
ACQUIRED BY THE BORROWER SINCE SEPTEMBER 30, 2006, EXCEPT TO THE EXTENT
PERMITTED UNDER THE TERMS OF THIS AGREEMENT.

6.6   MATERIAL ADVERSE CHANGE.  SINCE DECEMBER 31, 2005 THERE HAS BEEN NO CHANGE
IN THE BUSINESS, PROPERTY, CONDITION (FINANCIAL OR OTHERWISE) OR RESULTS OF
OPERATIONS OF THE BORROWER AND ITS SUBSIDIARIES WHICH COULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

6.7   TAXES.  THE BORROWER AND ITS SUBSIDIARIES HAVE FILED ALL UNITED STATES
FEDERAL TAX RETURNS AND ALL OTHER TAX RETURNS WHICH ARE REQUIRED TO BE FILED AND
HAVE PAID ALL TAXES DUE PURSUANT TO SAID RETURNS OR PURSUANT TO ANY ASSESSMENT
RECEIVED BY THE BORROWER OR ANY OF ITS SUBSIDIARIES, EXCEPT SUCH TAXES, IF ANY,
AS ARE BEING CONTESTED IN GOOD FAITH AND AS TO WHICH ADEQUATE RESERVES HAVE BEEN
PROVIDED IN ACCORDANCE WITH AGREEMENT ACCOUNTING PRINCIPLES AND AS TO WHICH NO
LIEN EXISTS.  NO TAX LIENS HAVE BEEN FILED AND NO CLAIMS ARE BEING ASSERTED

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WITH RESPECT TO ANY SUCH TAXES.  THE CHARGES, ACCRUALS AND RESERVES ON THE BOOKS
OF THE BORROWER AND ITS SUBSIDIARIES IN RESPECT OF ANY TAXES OR OTHER
GOVERNMENTAL CHARGES ARE ADEQUATE.

6.8   LITIGATION AND CONTINGENT OBLIGATIONS.  THERE IS NO LITIGATION,
ARBITRATION, GOVERNMENTAL INVESTIGATION, PROCEEDING OR INQUIRY PENDING OR, TO
THE KNOWLEDGE OF ANY OF THEIR OFFICERS, THREATENED AGAINST OR AFFECTING THE
BORROWER OR ANY OF ITS SUBSIDIARIES WHICH COULD REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT OR WHICH SEEKS TO PREVENT, ENJOIN OR DELAY THE MAKING OF
ANY REVOLVING CREDIT LOANS OR THE ISSUANCE OF ANY LETTERS OF CREDIT.  OTHER THAN
ANY LIABILITY INCIDENT TO ANY LITIGATION, ARBITRATION OR PROCEEDING WHICH COULD
NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT, THE BORROWER HAS
NO MATERIAL CONTINGENT OBLIGATIONS NOT PROVIDED FOR OR DISCLOSED IN THE
FINANCIAL STATEMENTS REFERRED TO IN SECTION 6.4.

6.9   SUBSIDIARIES.  SCHEDULE 6.9 CONTAINS AN ACCURATE LIST OF ALL SUBSIDIARIES
OF THE BORROWER AS OF THE DATE OF THIS AGREEMENT, SETTING FORTH THEIR RESPECTIVE
JURISDICTIONS OF ORGANIZATION AND THE PERCENTAGE OF THEIR RESPECTIVE CAPITAL
STOCK OR OTHER OWNERSHIP INTERESTS OWNED BY THE BORROWER OR OTHER SUBSIDIARIES
AND INDICATING WHICH SUBSIDIARIES ARE SIGNIFICANT SUBSIDIARIES.  ALL OF THE
ISSUED AND OUTSTANDING SHARES OF CAPITAL STOCK OR OTHER OWNERSHIP INTERESTS OF
SUCH SUBSIDIARIES HAVE BEEN (TO THE EXTENT SUCH CONCEPTS ARE RELEVANT WITH
RESPECT TO SUCH OWNERSHIP INTERESTS) DULY AUTHORIZED AND ISSUED AND ARE FULLY
PAID AND NON-ASSESSABLE.

6.10   ERISA.  THE UNFUNDED LIABILITIES OF ALL SINGLE EMPLOYER PLANS IS $0
EXCEPT THAT FUNDING OF ANY MONEY PURCHASE PENSION PLAN MAY BE DELAYED EACH
FISCAL YEAR UNTIL THE END OF THE FIRST FISCAL QUARTER THEREOF.  NEITHER THE
BORROWER NOR ANY OTHER MEMBER OF THE CONTROLLED GROUP HAS INCURRED, OR IS
REASONABLY EXPECTED TO INCUR, ANY WITHDRAWAL LIABILITY TO ANY MULTIEMPLOYER
PLAN.  EACH PLAN COMPLIES IN ALL MATERIAL RESPECTS WITH ALL APPLICABLE
REQUIREMENTS OF LAW AND REGULATIONS, NO REPORTABLE EVENT HAS OCCURRED WITH
RESPECT TO ANY PLAN, NEITHER THE BORROWER NOR ANY OTHER MEMBER OF THE CONTROLLED
GROUP HAS WITHDRAWN FROM ANY PLAN OR INITIATED STEPS TO DO SO, AND NO STEPS HAVE
BEEN TAKEN TO REORGANIZE OR TERMINATE ANY PLAN.

6.11   DEFAULTS.  NO DEFAULT OR UNMATURED DEFAULT HAS OCCURRED AND IS
CONTINUING.

6.12   ACCURACY OF INFORMATION.  NO INFORMATION, EXHIBIT OR REPORT FURNISHED BY
THE BORROWER OR ANY OF ITS SUBSIDIARIES TO THE AGENT OR TO ANY LENDER IN
CONNECTION WITH THE NEGOTIATION OF, OR COMPLIANCE WITH, THE FACILITY DOCUMENTS
CONTAINED ANY MATERIAL MISSTATEMENT OF FACT OR OMITTED TO STATE A MATERIAL FACT
OR ANY FACT NECESSARY TO MAKE THE STATEMENTS CONTAINED THEREIN NOT MISLEADING.

6.13   REGULATION U.  MARGIN STOCK (AS DEFINED IN REGULATION U) CONSTITUTES LESS
THAN 25% OF THE VALUE OF THOSE ASSETS OF THE BORROWER AND ITS SUBSIDIARIES WHICH
ARE SUBJECT TO ANY LIMITATION ON SALE, PLEDGE, OR OTHER RESTRICTION HEREUNDER. 
NEITHER THE MAKING OF ANY

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REVOLVING CREDIT ADVANCE NOR ISSUANCE OF ANY LETTERS OF CREDIT HEREUNDER NOR THE
USE OF THE PROCEEDS THEREOF, WILL VIOLATE OR BE INCONSISTENT WITH THE PROVISIONS
OF REGULATION T, REGULATION U OR REGULATION X.

6.14   MATERIAL AGREEMENTS.  NEITHER THE BORROWER NOR ANY SUBSIDIARY IS A PARTY
TO ANY AGREEMENT OR INSTRUMENT OR SUBJECT TO ANY CHARTER OR OTHER CORPORATE
RESTRICTION WHICH COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT.  NEITHER THE BORROWER NOR ANY SUBSIDIARY IS IN DEFAULT IN THE
PERFORMANCE, OBSERVANCE OR FULFILLMENT OF ANY OF THE OBLIGATIONS, COVENANTS OR
CONDITIONS CONTAINED IN (A) ANY AGREEMENT TO WHICH IT IS A PARTY WHICH DEFAULT
COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT OR (B) ANY
AGREEMENT OR INSTRUMENT EVIDENCING OR GOVERNING INDEBTEDNESS.

6.15   COMPLIANCE WITH LAWS.  THE BORROWER AND ITS SUBSIDIARIES HAVE COMPLIED
WITH ALL APPLICABLE STATUTES, RULES, REGULATIONS, ORDERS AND RESTRICTIONS OF ANY
DOMESTIC OR FOREIGN GOVERNMENT OR ANY INSTRUMENTALITY OR AGENCY THEREOF HAVING
JURISDICTION OVER THE CONDUCT OF THEIR RESPECTIVE BUSINESSES OR THE OWNERSHIP OF
THEIR RESPECTIVE PROPERTY, EXCEPT WHERE THE FAILURE TO COMPLY COULD NOT
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

6.16   OWNERSHIP OF PROPERTIES.  THE BORROWER AND EACH OF ITS SUBSIDIARIES HAS
GOOD TITLE, FREE OF ALL LIENS OTHER THAN THOSE PERMITTED BY SECTION 7.16, TO ALL
OF THE PROPERTY AND ASSETS REFLECTED IN THE BORROWER’S MOST RECENT CONSOLIDATED
FINANCIAL STATEMENTS PROVIDED TO THE AGENT AS OWNED BY THE BORROWER AND ITS
SUBSIDIARIES.

6.17   PLAN ASSETS; PROHIBITED TRANSACTIONS.  THE BORROWER IS NOT AN ENTITY
DEEMED TO HOLD “PLAN ASSETS” WITHIN THE MEANING OF 29 C.F.R. § 2510.3-101 OF AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF ERISA) WHICH IS SUBJECT TO
TITLE I OF ERISA OR ANY PLAN (WITHIN THE MEANING OF SECTION 4975 OF THE CODE),
AND NEITHER THE EXECUTION OF THIS AGREEMENT NOR THE MAKING OF REVOLVING CREDIT
LOANS NOR THE ISSUANCE OF LETTERS OF CREDIT HEREUNDER GIVES RISE TO A PROHIBITED
TRANSACTION WITHIN THE MEANING OF SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE.

6.18   ENVIRONMENTAL MATTERS.  IN THE ORDINARY COURSE OF ITS BUSINESS, THE
OFFICERS OF THE BORROWER CONSIDER THE EFFECT OF ENVIRONMENTAL LAWS ON THE
BUSINESS OF THE BORROWER AND ITS SUBSIDIARIES, IN THE COURSE OF WHICH THEY
IDENTIFY AND EVALUATE POTENTIAL RISKS AND LIABILITIES ACCRUING TO THE BORROWER
DUE TO ENVIRONMENTAL LAWS.  ON THE BASIS OF THIS CONSIDERATION, THE BORROWER HAS
CONCLUDED THAT ENVIRONMENTAL LAWS CANNOT REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.  NEITHER THE BORROWER NOR ANY SUBSIDIARY HAS RECEIVED
ANY NOTICE TO THE EFFECT THAT ITS OPERATIONS ARE NOT IN MATERIAL COMPLIANCE WITH
ANY OF THE REQUIREMENTS OF APPLICABLE ENVIRONMENTAL LAWS OR ARE THE SUBJECT OF
ANY FEDERAL OR STATE INVESTIGATION EVALUATING WHETHER ANY REMEDIAL ACTION IS
NEEDED TO RESPOND TO A RELEASE OF ANY TOXIC OR HAZARDOUS WASTE OR SUBSTANCE INTO
THE ENVIRONMENT, WHICH NON-COMPLIANCE OR REMEDIAL ACTION COULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

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6.19   INVESTMENT COMPANY ACT.  NEITHER THE BORROWER NOR ANY SUBSIDIARY IS AN
“INVESTMENT COMPANY” OR A COMPANY “CONTROLLED” BY AN “INVESTMENT COMPANY”,
WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED.

6.20   PUBLIC UTILITY HOLDING COMPANY ACT.  NEITHER THE BORROWER NOR ANY
SUBSIDIARY IS A “HOLDING COMPANY” OR A “SUBSIDIARY COMPANY” OF A “HOLDING
COMPANY”, OR AN “AFFILIATE” OF A “HOLDING COMPANY” OR OF A “SUBSIDIARY COMPANY”
OF A “HOLDING COMPANY”, WITHIN THE MEANING OF THE PUBLIC UTILITY HOLDING COMPANY
ACT OF 1935, AS AMENDED.

6.21   SOLVENCY.  IMMEDIATELY AFTER THE CONSUMMATION OF THE TRANSACTIONS TO
OCCUR ON THE DATE HEREOF AND IMMEDIATELY FOLLOWING EACH EXTENSION OF CREDIT, IF
ANY, MADE HEREUNDER ON THE DATE HEREOF AND AFTER GIVING EFFECT TO THE
APPLICATION OF THE PROCEEDS OF SUCH EXTENSIONS OF CREDIT, (A) THE FAIR VALUE OF
THE ASSETS OF THE BORROWER AND ITS SUBSIDIARIES ON A CONSOLIDATED BASIS, AT A
FAIR VALUATION, WILL EXCEED THE DEBTS AND LIABILITIES, SUBORDINATED, CONTINGENT
OR OTHERWISE, OF THE BORROWER AND ITS SUBSIDIARIES ON A CONSOLIDATED BASIS; (B)
THE PRESENT FAIR SALEABLE VALUE OF THE PROPERTY OF THE BORROWER AND ITS
SUBSIDIARIES ON A CONSOLIDATED BASIS WILL BE GREATER THAN THE AMOUNT THAT WILL
BE REQUIRED TO PAY THE PROBABLE LIABILITY OF THE BORROWER AND ITS SUBSIDIARIES
ON A CONSOLIDATED BASIS ON THEIR DEBTS AND OTHER LIABILITIES, SUBORDINATED,
CONTINGENT OR OTHERWISE, AS SUCH DEBTS AND OTHER LIABILITIES BECOME ABSOLUTE AND
MATURED; (C) THE BORROWER AND ITS SUBSIDIARIES ON A CONSOLIDATED BASIS WILL BE
ABLE TO PAY THEIR DEBTS AND LIABILITIES, SUBORDINATED, CONTINGENT OR OTHERWISE,
AS SUCH DEBTS AND LIABILITIES BECOME ABSOLUTE AND MATURED; AND (D) THE BORROWER
AND ITS SUBSIDIARIES ON A CONSOLIDATED BASIS WILL NOT HAVE UNREASONABLY SMALL
CAPITAL WITH WHICH TO CONDUCT THE BUSINESSES IN WHICH THEY ARE ENGAGED AS SUCH
BUSINESSES ARE NOW CONDUCTED AND ARE PROPOSED TO BE CONDUCTED AFTER THE DATE
HEREOF.

6.22   INSURANCE LICENSES.  SCHEDULE 6.22 HERETO LISTS ALL OF THE JURISDICTIONS
IN WHICH ANY INSURANCE SUBSIDIARY HOLDS A LICENSE AND IS AUTHORIZED TO TRANSACT
INSURANCE BUSINESS AS OF THE DATE OF THIS AGREEMENT.  NO SUCH LICENSE, THE LOSS
OF WHICH COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT, IS THE
SUBJECT OF A PROCEEDING FOR SUSPENSION, LIMITATION OR REVOCATION.  TO THE
BORROWER’S KNOWLEDGE, THERE IS NOT A SUSTAINABLE BASIS FOR SUCH SUSPENSION,
LIMITATION OR REVOCATION, AND NO SUCH SUSPENSION, LIMITATION OR REVOCATION HAS
BEEN THREATENED BY ANY GOVERNMENTAL AUTHORITY.  SCHEDULE 6.22 ALSO INDICATES THE
LINE OR LINES OF INSURANCE IN WHICH EACH SUCH INSURANCE SUBSIDIARY IS ENGAGED
AND THE STATE OR STATES IN WHICH SUCH INSURANCE SUBSIDIARY IS LICENSED TO ENGAGE
IN ANY LINE OF INSURANCE, IN EACH CASE AS OF THE DATE OF THIS AGREEMENT.  THE
INSURANCE SUBSIDIARIES DO NOT TRANSACT ANY BUSINESS, DIRECTLY OR INDIRECTLY,
REQUIRING ANY LICENSE, PERMIT, GOVERNMENTAL APPROVAL, CONSENT OR OTHER
AUTHORIZATION OTHER THAN THOSE LISTED ON SCHEDULE 6.22.

6.23   PARTNERSHIPS.  EXCEPT AS DISCLOSED IN SCHEDULE 6.23, NEITHER THE BORROWER
NOR ANY OF ITS SUBSIDIARIES IS A PARTNER OF ANY PARTNERSHIP.

6.24   LINES OF BUSINESS.  SCHEDULE 6.24 SETS FORTH A COMPLETE STATEMENT OF EACH
LINE OF BUSINESS CONDUCTED AS OF THE DATE HEREOF BY THE BORROWER AND EACH OF ITS
SUBSIDIARIES (THE “EXISTING LINES OF BUSINESS”).

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6.25   REINSURANCE PRACTICES.  THE BUSINESS OF EACH INSURANCE SUBSIDIARY IS
BEING CONDUCTED IN ALL MATERIAL RESPECTS IN ACCORDANCE WITH THE REINSURANCE
GUIDELINES.

6.26   SECURITY.  THE PLEDGE AGREEMENT IS EFFECTIVE TO CREATE AND GIVE THE
AGENT, FOR THE BENEFIT OF THE LENDERS, AS SECURITY FOR THE REPAYMENT OF THE
OBLIGATIONS SECURED THEREBY, A LEGAL, VALID, PERFECTED AND ENFORCEABLE FIRST
PRIORITY LIEN UPON AND SECURITY INTEREST IN THE CAPITAL STOCK PLEDGED THEREBY. 
THE BORROWER, THE AGENT AND THE LENDER AGREE THAT ALL REFERENCES IN THE PLEDGE
AGREEMENT OR ANY CASH COLLATERAL SECURITY AGREEMENT (INCLUDING WITHOUT
LIMITATION THE AMENDED AND RESTATED PLEDGE AGREEMENT DATED AS OF JANUARY 31,
2005 AMONG THE BORROWER, THE AGENT, THE ISSUER AND JPMORGAN CHASE BANK, AS
DEPOSITORY), TO THE “CREDIT AGREEMENT” SHALL BE TO THIS AGREEMENT, AS IT MAY BE
AMENDED, MODIFIED OR RESTATED AND IN EFFECT FROM TIME TO TIME.

6.27   DISCLOSURE.  NONE OF THE (A) INFORMATION, EXHIBITS OR REPORTS FURNISHED
OR TO BE FURNISHED BY THE BORROWER OR ANY SUBSIDIARY TO THE AGENT OR TO ANY
LENDER IN CONNECTION WITH THE NEGOTIATION OF THE FACILITY DOCUMENTS, OR (B)
REPRESENTATIONS OR WARRANTIES OF THE BORROWER OR ANY SUBSIDIARY CONTAINED IN
THIS AGREEMENT, THE OTHER FACILITY DOCUMENTS OR ANY OTHER DOCUMENT, CERTIFICATE
OR WRITTEN STATEMENT FURNISHED TO THE AGENT OR THE LENDERS BY OR ON BEHALF OF
THE BORROWER OR ANY SUBSIDIARY FOR USE IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR THE FACILITY DOCUMENTS CONTAINED, CONTAINS OR
WILL CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMITTED, OMITS OR WILL
OMIT TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS
CONTAINED HEREIN OR THEREIN NOT MISLEADING IN LIGHT OF THE CIRCUMSTANCES IN
WHICH THE SAME WERE MADE.  THERE IS NO FACT KNOWN TO THE BORROWER (OTHER THAN
MATTERS OF A GENERAL ECONOMIC NATURE) THAT HAS HAD OR COULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT AND THAT HAS NOT BEEN DISCLOSED
HEREIN OR IN SUCH OTHER DOCUMENTS, CERTIFICATES AND STATEMENTS FURNISHED TO THE
LENDERS FOR USE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.

ARTICLE VII

COVENANTS

During the term of this Agreement, unless the Lenders shall otherwise consent in
writing:

7.1   FINANCIAL REPORTING.  THE BORROWER WILL MAINTAIN, FOR ITSELF AND EACH
SUBSIDIARY, A SYSTEM OF ACCOUNTING ESTABLISHED AND ADMINISTERED IN ACCORDANCE
WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, CONSISTENTLY APPLIED, AND WILL
FURNISH TO THE LENDERS:

(A)           AS SOON AS PRACTICABLE AND IN ANY EVENT WITHIN ONE HUNDRED (100)
DAYS AFTER THE CLOSE OF EACH OF ITS FISCAL YEARS, AN UNQUALIFIED AUDIT REPORT
CERTIFIED BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ACCEPTABLE TO THE REQUIRED
LENDERS, PREPARED IN ACCORDANCE WITH AGREEMENT ACCOUNTING PRINCIPLES ON A
CONSOLIDATED AND CONSOLIDATING BASIS AND SETTING FORTH IN COMPARATIVE FORM
FIGURES FOR THE PRECEDING FISCAL YEAR FOR ITSELF AND ITS CONSOLIDATED
SUBSIDIARIES AND ON A STAND ALONE BASIS FOR THE BORROWER, INCLUDING BALANCE
SHEETS AS OF THE END OF SUCH PERIOD AND RELATED STATEMENTS OF INCOME,

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STOCKHOLDERS’ EQUITY AND CASH FLOWS ACCOMPANIED BY ANY MANAGEMENT LETTER
PREPARED BY SAID ACCOUNTANTS; PROVIDED THAT NO ANNUAL REPORT OTHER THAN THE
REPORT ON FORM 10K NEEDS TO BE DELIVERED.

(B)           AS SOON AS PRACTICABLE AND IN ANY EVENT WITHIN FIFTY (50) DAYS
AFTER THE CLOSE OF THE FIRST THREE FISCAL QUARTERS OF EACH OF ITS FISCAL YEARS,
FOR ITSELF AND ITS SUBSIDIARIES, CONSOLIDATED AND CONSOLIDATING UNAUDITED
BALANCE SHEETS AS AT THE CLOSE OF EACH SUCH PERIOD AND CONSOLIDATED AND
CONSOLIDATING STATEMENT OF INCOME, STOCKHOLDERS’ EQUITY AND CASH FLOWS FOR THE
PERIOD FROM THE BEGINNING OF SUCH FISCAL YEAR TO THE END OF SUCH QUARTER SETTING
FORTH IN EACH CASE IN COMPARATIVE FORM FIGURES FOR THE CORRESPONDING PERIOD IN
THE PRIOR FISCAL YEAR, ALL PREPARED IN ACCORDANCE WITH AGREEMENT ACCOUNTING
PRINCIPLES AND IN REASONABLE DETAIL, AND ALL SIGNED BY ITS CHIEF FINANCIAL
OFFICER.

(C)           AS SOON AS AVAILABLE AND IN ANY EVENT (I) WITHIN SEVENTY (70) DAYS
AFTER THE CLOSE OF EACH FISCAL YEAR OF EACH INSURANCE SUBSIDIARY, THE ANNUAL
STATEMENT OF SUCH INSURANCE SUBSIDIARY FOR SUCH FISCAL YEAR AS FILED WITH THE
INSURANCE COMMISSIONER (OR SIMILAR AUTHORITY) IN SUCH INSURANCE SUBSIDIARY’S
STATE OF DOMICILE, TOGETHER WITH (II) WITHIN SEVENTY (70) DAYS AFTER THE CLOSE
OF EACH FISCAL YEAR OF EACH INSURANCE SUBSIDIARY, THE SIGNATURE THEREOF OF THE
CHIEF FINANCIAL OFFICER OF THE BORROWER STATING THAT SUCH ANNUAL STATEMENT
PRESENTS THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF SUCH INSURANCE
SUBSIDIARY IN ACCORDANCE WITH SAP, (III) ON OR PRIOR TO EACH JUNE 1 AFTER THE
CLOSE OF EACH FISCAL YEAR OF EACH INSURANCE SUBSIDIARY, THE OPINION OF A FIRM OF
CERTIFIED PUBLIC ACCOUNTANTS REASONABLY SATISFACTORY TO THE REQUIRED LENDERS,
WHO SHALL HAVE EXAMINED SUCH ANNUAL STATEMENT AND WHOSE OPINION SHALL NOT BE
QUALIFIED AS TO THE SCOPE OF AUDIT OR AS TO THE STATUS OF SUCH INSURANCE
SUBSIDIARY AS A GOING CONCERN, AND (IV) WITHIN ONE HUNDRED TWENTY (120) DAYS
AFTER THE CLOSE OF EACH FISCAL YEAR OF EACH INSURANCE SUBSIDIARY, A WRITTEN
REVIEW OF AND OPINION OF AN ACCOUNTING OR ACTUARIAL FIRM OR INTERNAL ACTUARY, AS
DELIVERED TO THE DEPARTMENT, REASONABLY SATISFACTORY TO THE REQUIRED LENDERS ON
THE METHODOLOGY AND ASSUMPTIONS USED TO CALCULATE THE LOSS RESERVES OF SUCH
INSURANCE SUBSIDIARY AT THE END OF SUCH FISCAL YEAR (AS SHOWN ON THE ANNUAL
STATEMENT OF SUCH INSURANCE SUBSIDIARY PREPARED IN ACCORDANCE WITH SAP).

(D)           AS SOON AS AVAILABLE AND IN ANY EVENT ON OR PRIOR TO EACH MAY 1
AFTER THE CLOSE OF EACH FISCAL YEAR OF THE INSURANCE SUBSIDIARIES, THE
CONSOLIDATED ANNUAL STATEMENT OF THE INSURANCE SUBSIDIARIES FOR SUCH FISCAL
YEAR, PREPARED IN ACCORDANCE WITH SAP AND FILED WITH THE NEW YORK INSURANCE
DEPARTMENT.

(E)           AS SOON AS AVAILABLE AND IN ANY EVENT WITHIN FIFTY (50) DAYS AFTER
THE CLOSE OF EACH OF THE FIRST THREE FISCAL QUARTERS IN EACH FISCAL YEAR OF EACH
INSURANCE SUBSIDIARY, QUARTERLY FINANCIAL STATEMENTS OF SUCH INSURANCE
SUBSIDIARY (PREPARED IN ACCORDANCE WITH SAP) FOR SUCH FISCAL QUARTER AND AS
FILED WITH THE INSURANCE COMMISSIONER (OR SIMILAR AUTHORITY) IN SUCH INSURANCE
SUBSIDIARY’S STATE OF DOMICILE, TOGETHER WITH THE SIGNATURE THEREON OF THE CHIEF
FINANCIAL OFFICER OF THE BORROWER STATING THAT SUCH FINANCIAL STATEMENTS PRESENT
THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF SUCH INSURANCE SUBSIDIARY
IN ACCORDANCE WITH SAP.

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(F)            AS SOON AS AVAILABLE, BUT IN ANY EVENT WITHIN 120 DAYS AFTER THE
BEGINNING OF EACH FISCAL YEAR, A COPY OF THE PLAN AND FORECAST OF THE BORROWER
AND ITS SUBSIDIARIES FOR SUCH FISCAL YEAR IN THE FORM CUSTOMARILY PREPARED BY
THE BORROWER.

(G)           TOGETHER WITH THE FINANCIAL STATEMENTS REQUIRED BY CLAUSES (A) AND
(B) ABOVE, A COMPLIANCE CERTIFICATE IN SUBSTANTIALLY THE FORM OF EXHIBIT B
HERETO SIGNED BY ITS CHIEF FINANCIAL OFFICER SHOWING THE CALCULATIONS NECESSARY
TO DETERMINE COMPLIANCE WITH THIS AGREEMENT AND STATING THAT NO DEFAULT OR
UNMATURED DEFAULT EXISTS, OR IF ANY DEFAULT OR UNMATURED DEFAULT EXISTS, STATING
THE NATURE AND STATUS THEREOF.

(H)           AS SOON AS POSSIBLE AND IN ANY EVENT WITHIN 10 DAYS AFTER THE
BORROWER KNOWS THAT ANY TERMINATION EVENT HAS OCCURRED WITH RESPECT TO ANY PLAN,
A STATEMENT, SIGNED BY THE CHIEF FINANCIAL OFFICER OF THE BORROWER, DESCRIBING
SAID TERMINATION EVENT AND THE ACTION WHICH THE BORROWER PROPOSES TO TAKE WITH
RESPECT THERETO.

(I)            AS SOON AS POSSIBLE AND IN ANY EVENT WITHIN 10 DAYS AFTER RECEIPT
BY THE BORROWER, A COPY OF (I) ANY NOTICE OR CLAIM TO THE EFFECT THAT THE
BORROWER OR ANY OF ITS SUBSIDIARIES IS OR MAY BE LIABLE TO ANY PERSON AS A
RESULT OF THE RELEASE BY THE BORROWER, ANY OF ITS SUBSIDIARIES, OR ANY OTHER
PERSON OF ANY TOXIC OR HAZARDOUS WASTE OR SUBSTANCE INTO THE ENVIRONMENT, AND
(II) ANY NOTICE ALLEGING ANY VIOLATION OF ANY FEDERAL, STATE OR LOCAL
ENVIRONMENTAL, HEALTH OR SAFETY LAW OR REGULATION BY THE BORROWER OR ANY OF ITS
SUBSIDIARIES.

(J)            AS SOON AS POSSIBLE AND IN ANY EVENT WITHIN 10 DAYS AFTER THE
BORROWER LEARNS THEREOF, NOTICE OF THE ASSERTION OR COMMENCEMENT OF ANY CLAIMS,
ACTION, SUIT OR PROCEEDING AGAINST OR AFFECTING THE BORROWER OR ANY SUBSIDIARY
WHICH MAY REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

(K)           PROMPTLY UPON THE FURNISHING THEREOF TO THE SHAREHOLDERS OF THE
BORROWER, COPIES OF ALL FINANCIAL STATEMENTS, REPORTS AND PROXY STATEMENTS SO
FURNISHED; PROVIDED THAT NO ANNUAL REPORT OTHER THAN THE REPORT ON FORM 10K
NEEDS TO BE DELIVERED.

(L)            PROMPTLY UPON THE FILING THEREOF, COPIES OF ALL REGISTRATION
STATEMENTS AND ANNUAL, QUARTERLY, MONTHLY OR OTHER REGULAR REPORTS WHICH THE
BORROWER OR ANY OF ITS SUBSIDIARIES FILES WITH THE SECURITIES AND EXCHANGE
COMMISSION.

(M)          PROMPTLY AND IN ANY EVENT WITHIN TEN (10) DAYS AFTER LEARNING
THEREOF, NOTIFICATION OF (I) ANY TAX ASSESSMENT, DEMAND, NOTICE OF PROPOSED
DEFICIENCY OR NOTICE OF DEFICIENCY RECEIVED BY THE BORROWER OR ANY CONSOLIDATED
PERSON OR (II) THE FILING OF ANY TAX LIEN OR COMMENCEMENT OF ANY JUDICIAL
PROCEEDING BY OR AGAINST ANY SUCH CONSOLIDATED PERSON, IF ANY SUCH ASSESSMENT,
DEMAND, NOTICE, LIEN OR JUDICIAL PROCEEDING RELATES TO TAX LIABILITIES IN EXCESS
OF $2,500,000.

(N)           PROMPTLY, AND IN ANY EVENT WITHIN FIVE DAYS AFTER (I) LEARNING
THEREOF, NOTIFICATION OF ANY CHANGES AFTER THE DATE HEREOF IN THE BORROWER’S S&P
RATING OR

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BORROWER’S MOODY’S RATING OR IN THE A.M. BEST RATING IN RESPECT OF ANY INSURANCE
SUBSIDIARY AND (II) RECEIPT THEREOF, COPIES OF ANY RATINGS ANALYSIS BY A.M. BEST
& CO. RELATING TO ANY INSURANCE SUBSIDIARY.

(O)           COPIES OF ANY ACTUARIAL CERTIFICATES PREPARED WITH RESPECT TO ANY
INSURANCE SUBSIDIARY, PROMPTLY AFTER THE RECEIPT THEREOF, AND NOT LATER THAN 90
DAYS AFTER EACH FISCAL YEAR, AN ACTUARIAL OPINION WITH RESPECT TO EACH INSURANCE
SUBSIDIARY IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE AGENT AND THE
REQUIRED LENDERS FROM AN ACCOUNTING OR ACTUARIAL FIRM OR INTERNAL ACTUARY, AS
DELIVERED TO THE DEPARTMENT, REASONABLY SATISFACTORY TO THE AGENT AND THE
REQUIRED LENDERS.

(P)           PROMPTLY UPON THE FILING THEREOF, COPIES OF ALL FILINGS AND
ANNUAL, QUARTERLY, MONTHLY OR OTHER REGULAR REPORTS WHICH THE BORROWER OR ANY OF
ITS SUBSIDIARIES FILES WITH THE NAIC OR ANY INSURANCE COMMISSION OR DEPARTMENT
OR ANALOGOUS GOVERNMENTAL AUTHORITY (INCLUDING, WITHOUT LIMITATION, ANY FILING
MADE BY THE BORROWER OR ANY SUBSIDIARY PURSUANT TO ANY INSURANCE HOLDING COMPANY
ACT OR RELATED RULES OR REGULATIONS), BUT EXCLUDING ROUTINE OR NON-MATERIAL
FILINGS WITH THE NAIC, ANY INSURANCE COMMISSIONER OR DEPARTMENT OR ANALOGOUS
GOVERNMENTAL AUTHORITY.

(Q)           IN ADDITION TO THE REQUIREMENTS OF CLAUSE (C)(IV) ABOVE, AS
PROMPTLY AS REASONABLY PRACTICABLE FOLLOWING THE REQUEST OF THE REQUIRED
LENDERS, A REPORT PREPARED BY AN ACCOUNTING OR ACTUARIAL FIRM OR INTERNAL
ACTUARY, AS DELIVERED TO THE DEPARTMENT, REVIEWING THE ADEQUACY OF LOSS RESERVES
OF EACH INSURANCE SUBSIDIARY, WHICH FIRM SHALL BE PROVIDED ACCESS TO OR COPIES
OF ALL RESERVE ANALYSES AND VALUATIONS RELATING TO THE INSURANCE BUSINESS OF
EACH INSURANCE SUBSIDIARY IN THE POSSESSION OF OR AVAILABLE TO THE BORROWER OR
ITS SUBSIDIARIES; PROVIDED, THAT, IN THE EVENT THAT THE WRITTEN REVIEW REQUIRED
TO BE PROVIDED TO THE LENDERS IN RESPECT OF ANY FISCAL YEAR PURSUANT TO CLAUSE
(C)(IV) ABOVE IS PROVIDED BY AN INDEPENDENT ACTUARIAL CONSULTING FIRM REASONABLY
SATISFACTORY TO THE AGENT, OR A WRITTEN REVIEW OF AN INDEPENDENT ACTUARIAL
CONSULTING FIRM REASONABLY SATISFACTORY TO THE AGENT SATISFYING THE REQUIREMENTS
SET FORTH IN CLAUSE (C)(IV) IS OTHERWISE DELIVERED TO THE LENDERS AT ANY TIME
OTHER THAN PURSUANT TO SUCH CLAUSE, THEN THE REQUIRED LENDERS MAY NOT REQUEST A
REPORT PURSUANT TO THIS PARAGRAPH (Q) UNTIL ONE YEAR AFTER THE DELIVERY DATE OF
SUCH REPORT UNLESS, AT THE TIME OF SUCH REQUEST, A DEFAULT IS IN EXISTENCE.

(R)            SUCH OTHER INFORMATION AS THE AGENT OR ANY LENDER MAY FROM TIME
TO TIME REASONABLY REQUEST.

The Borrower may provide information required under Sections 7.1(a), (b), (k),
and (l) by posting such information on EDGAR and giving notice to the Agent of
such posting.

7.2   USE OF PROCEEDS.  THE PROCEEDS OF THE REVOLVING CREDIT LOANS SHALL BE USED
FOR GENERAL CORPORATE PURPOSES INCLUDING ACQUISITIONS.

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7.3   NOTICE OF DEFAULT.  THE BORROWER WILL, PROMPTLY AFTER BECOMING AWARE OF
THE OCCURRENCE OF ANY OF THE FOLLOWING, GIVE NOTICE IN WRITING TO THE LENDERS OF
THE OCCURRENCE OF (A) ANY DEFAULT OR UNMATURED DEFAULT, (B) OF ANY OTHER EVENT
OR DEVELOPMENT, FINANCIAL OR OTHERWISE WHICH COULD REASONABLY BE EXPECTED TO
HAVE A MATERIAL ADVERSE EFFECT, (C) THE RECEIPT OF ANY NOTICE FROM ANY
GOVERNMENTAL AUTHORITY OF THE EXPIRATION WITHOUT RENEWAL, REVOCATION OR
SUSPENSION OF, OR THE INSTITUTION OF ANY PROCEEDINGS TO REVOKE OR SUSPEND, ANY
LICENSE NOW OR HEREAFTER HELD BY ANY INSURANCE SUBSIDIARY WHICH IS REQUIRED TO
CONDUCT INSURANCE BUSINESS IN COMPLIANCE WITH ALL APPLICABLE LAWS AND
REGULATIONS AND THE EXPIRATION, REVOCATION OR SUSPENSION OF WHICH COULD
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT, (D) THE RECEIPT OF ANY
NOTICE FROM ANY GOVERNMENTAL AUTHORITY OF THE INSTITUTION OF ANY DISCIPLINARY
PROCEEDINGS AGAINST OR IN RESPECT OF ANY INSURANCE SUBSIDIARY, OR THE ISSUANCE
OF ANY ORDER, THE TAKING OF ANY ACTION OR ANY REQUEST FOR AN EXTRAORDINARY AUDIT
FOR CAUSE BY ANY GOVERNMENTAL AUTHORITY WHICH, IF ADVERSELY DETERMINED, COULD
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT, (E) ANY MATERIAL
JUDICIAL OR ADMINISTRATIVE ORDER LIMITING OR CONTROLLING THE BUSINESS OF ANY
SUBSIDIARY (AND NOT THE INDUSTRY IN WHICH SUCH SUBSIDIARY IS ENGAGED GENERALLY)
WHICH HAS BEEN ISSUED OR ADOPTED, OR (F) THE COMMENCEMENT OF ANY LITIGATION
WHICH COULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.

7.4   CONDUCT OF BUSINESS.  THE  BORROWER WILL, AND WILL CAUSE EACH SUBSIDIARY
TO, (A) CARRY ON AND CONDUCT ITS BUSINESS ONLY IN THE EXISTING LINES OF BUSINESS
OR IN OTHER LINES OF THE INSURANCE BUSINESS OR IN ACTIVITIES REASONABLY
INCIDENTAL TO THE INSURANCE BUSINESS, (B) DO ALL THINGS NECESSARY TO REMAIN DULY
INCORPORATED OR ORGANIZED, VALIDLY EXISTING AND (TO THE EXTENT SUCH CONCEPT
APPLIES TO SUCH ENTITY) IN GOOD STANDING IN ITS JURISDICTION OF INCORPORATION
AND ITS JURISDICTION OF INCORPORATION OR ORGANIZATION, AS THE CASE MAY BE, AND
MAINTAIN ALL REQUISITE AUTHORITY TO CONDUCT ITS BUSINESS IN EACH OTHER
JURISDICTION IN WHICH SUCH QUALIFICATION IS REQUIRED, AND (C) DO ALL THINGS
NECESSARY TO RENEW, EXTEND AND CONTINUE IN EFFECT ALL LICENSES WHICH MAY AT ANY
TIME AND FROM TIME TO TIME BE NECESSARY FOR ANY INSURANCE SUBSIDIARY TO OPERATE
ITS BUSINESS IN COMPLIANCE WITH ALL APPLICABLE LAWS AND REGULATIONS.  NO
INSURANCE SUBSIDIARY SHALL CHANGE ITS STATE OF DOMICILE OR INCORPORATION WITHOUT
THE PRIOR WRITTEN CONSENT OF THE REQUIRED LENDERS.

7.5   TAXES.  THE BORROWER WILL, AND WILL CAUSE EACH SUBSIDIARY TO, TIMELY FILE
COMPLETE AND CORRECT UNITED STATES FEDERAL AND APPLICABLE FOREIGN, STATE AND
LOCAL TAX RETURNS REQUIRED BY APPLICABLE LAW AND PAY WHEN DUE ALL TAXES,
ASSESSMENTS AND GOVERNMENTAL CHARGES AND LEVIES UPON IT OR ITS INCOME, PROFITS
OR PROPERTY, EXCEPT THOSE WHICH ARE BEING CONTESTED IN GOOD FAITH BY APPROPRIATE
PROCEEDINGS AND WITH RESPECT TO WHICH ADEQUATE RESERVES HAVE BEEN SET ASIDE IN
ACCORDANCE WITH AGREEMENT ACCOUNTING PRINCIPLES AND SAP, AS APPLICABLE.

7.6   INSURANCE.  THE BORROWER WILL, AND WILL CAUSE EACH SUBSIDIARY TO, MAINTAIN
WITH FINANCIALLY SOUND AND REPUTABLE INSURANCE COMPANIES INSURANCE ON ALL THEIR
PROPERTY IN SUCH AMOUNTS AND COVERING SUCH RISKS AS IS CONSISTENT WITH SOUND
BUSINESS PRACTICE, AND THE BORROWER WILL FURNISH TO THE AGENT AND ANY LENDER
UPON REQUEST FULL INFORMATION AS TO THE INSURANCE CARRIED.

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7.7   COMPLIANCE WITH LAWS.  THE BORROWER WILL, AND WILL CAUSE EACH SUBSIDIARY
TO, COMPLY WITH ALL LAWS, RULES, REGULATIONS, ORDERS, WRITS, JUDGMENTS,
INJUNCTIONS, DECREES OR AWARDS TO WHICH IT MAY BE SUBJECT, INCLUDING, WITHOUT
LIMITATION, ALL ENVIRONMENTAL LAWS, THE NONCOMPLIANCE WITH WHICH COULD
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

7.8   MAINTENANCE OF PROPERTIES.  THE BORROWER WILL, AND WILL CAUSE EACH
SUBSIDIARY TO, DO ALL THINGS NECESSARY TO MAINTAIN, PRESERVE, PROTECT AND KEEP
ITS PROPERTY IN GOOD REPAIR, WORKING ORDER AND CONDITION, AND MAKE ALL NECESSARY
AND PROPER REPAIRS, RENEWALS AND REPLACEMENTS SO THAT ITS BUSINESS CARRIED ON IN
CONNECTION THEREWITH MAY BE PROPERLY CONDUCTED AT ALL TIMES.

7.9   INSPECTION; MAINTENANCE OF BOOKS AND RECORDS.  THE BORROWER WILL, AND WILL
CAUSE EACH SUBSIDIARY TO, PERMIT THE AGENT AND THE LENDERS, BY THEIR RESPECTIVE
REPRESENTATIVES AND AGENTS, TO INSPECT ANY OF THE PROPERTY, BOOKS AND FINANCIAL
RECORDS OF THE BORROWER AND EACH SUBSIDIARY, TO EXAMINE AND MAKE COPIES OF THE
BOOKS OF ACCOUNTS AND OTHER FINANCIAL RECORDS OF THE BORROWER AND EACH
SUBSIDIARY, AND TO DISCUSS THE AFFAIRS, FINANCES AND ACCOUNTS OF THE BORROWER
AND EACH SUBSIDIARY WITH, AND TO BE ADVISED AS TO THE SAME BY, THEIR RESPECTIVE
OFFICERS AT SUCH REASONABLE TIMES AND INTERVALS, DURING NORMAL BUSINESS HOURS
AND UPON REASONABLE PRIOR NOTICE TO THE BORROWER, AS THE AGENT OR ANY LENDER MAY
DESIGNATE.  THE BORROWER WILL KEEP OR CAUSE TO BE KEPT, AND CAUSE EACH
SUBSIDIARY TO KEEP OR CAUSE TO BE KEPT, APPROPRIATE RECORDS AND BOOKS OF ACCOUNT
IN WHICH COMPLETE ENTRIES ARE TO BE MADE REFLECTING ITS AND THEIR BUSINESS AND
FINANCIAL TRANSACTIONS, SUCH ENTRIES TO BE MADE IN ACCORDANCE WITH AGREEMENT
ACCOUNTING PRINCIPLES AND SAP, AS APPLICABLE, CONSISTENTLY APPLIED.

7.10   DIVIDENDS AND STOCK REPURCHASES.  THE BORROWER WILL NOT, NOR WILL IT
PERMIT ANY SUBSIDIARY TO, DECLARE OR PAY ANY DIVIDENDS OR MAKE ANY DISTRIBUTIONS
ON ITS CAPITAL STOCK (OTHER THAN DIVIDENDS PAYABLE IN ITS OWN CAPITAL STOCK) OR
REDEEM, REPURCHASE OR OTHERWISE ACQUIRE OR RETIRE ANY OF ITS CAPITAL STOCK OR
ANY OPTIONS OR OTHER RIGHTS IN RESPECT THEREOF AT ANY TIME OUTSTANDING, EXCEPT
THAT (A) ANY SUBSIDIARY MAY DECLARE AND PAY DIVIDENDS OR MAKE DISTRIBUTIONS TO
THE BORROWER OR TO A WHOLLY-OWNED SUBSIDIARY OF THE BORROWER AND (B) THE
BORROWER MAY REPURCHASE CAPITAL STOCK IN AN AGGREGATE AMOUNT NOT TO EXCEED 5% OF
CONSOLIDATED NET WORTH OF THE BORROWER AND ITS CONSOLIDATED SUBSIDIARIES IN ANY
FISCAL YEAR ENDING PRIOR TO THE REVOLVING CREDIT TERMINATION DATE AND LETTER OF
CREDIT AVAILABILITY TERMINATION DATE AND MAY PAY DIVIDENDS IN AN AGGREGATE
AMOUNT NOT TO EXCEED $10,000,000 IN ANY FISCAL YEAR ENDING PRIOR TO THE
REVOLVING CREDIT TERMINATION DATE AND LETTER OF CREDIT AVAILABILITY TERMINATION
DATE; PROVIDED, HOWEVER, THAT THE BORROWER MAY NOT REPURCHASE ANY CAPITAL STOCK
OR PAY ANY DIVIDENDS UNLESS AFTER GIVING EFFECT THERETO BORROWER WOULD BE IN PRO
FORMA COMPLIANCE WITH THE TERMS OF THIS AGREEMENT.

7.11   INDEBTEDNESS.  THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY SUBSIDIARY
TO, CREATE, INCUR OR SUFFER TO EXIST ANY INDEBTEDNESS, EXCEPT:

(A)           THE REVOLVING CREDIT LOANS AND OTHER OBLIGATIONS;

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(B)           UP TO $125,000,000 INDEBTEDNESS OF THE BORROWER ISSUED PURSUANT TO
A SENIOR INDENTURE BETWEEN THE BORROWER AND JPMORGAN CHASE BANK, N.A., AS
TRUSTEE, DATED APRIL 17, 2006; AND;

(C)           GUARANTIES PERMITTED UNDER SECTION 7.15; AND

(D)           CAPITAL LEASES IN AMOUNTS NOT IN EXCESS OF $2,500,000 AT ANY TIME
OUTSTANDING.

7.12   MERGER.  THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY SUBSIDIARY TO,
MERGE OR CONSOLIDATE WITH OR INTO ANY OTHER PERSON, EXCEPT THAT A SUBSIDIARY MAY
MERGE INTO THE BORROWER OR ANY WHOLLY-OWNED SUBSIDIARY.

7.13   SALE OF ASSETS.  THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY SUBSIDIARY
TO, LEASE, SELL, TRANSFER OR OTHERWISE DISPOSE OF ITS PROPERTY, TO ANY OTHER
PERSON EXCEPT FOR:

(A)           SALES OF INVENTORY IN THE ORDINARY COURSE OF BUSINESS; AND

(B)           LEASES, SALES, TRANSFERS OR OTHER DISPOSITIONS OF ITS PROPERTY
THAT, TOGETHER WITH ALL OTHER PROPERTY OF THE BORROWER AND ITS SUBSIDIARIES
PREVIOUSLY LEASED, SOLD OR DISPOSED OF (OTHER THAN INVENTORY OR INVESTMENTS
(OTHER THAN INVESTMENTS IN SUBSIDIARIES) SOLD IN THE ORDINARY COURSE OF
BUSINESS) AS PERMITTED BY THIS SECTION 7.13 SINCE THE CLOSING DATE, DO NOT
CONSTITUTE A SUBSTANTIAL PORTION OF THE PROPERTY OF THE BORROWER AND ITS
SUBSIDIARIES.

7.14   INVESTMENTS AND ACQUISITIONS.  THE BORROWER WILL NOT, NOR WILL IT PERMIT
ANY SUBSIDIARY TO, MAKE OR SUFFER TO EXIST ANY INVESTMENT (INCLUDING, WITHOUT
LIMITATION, LOANS AND ADVANCES TO, AND OTHER INVESTMENTS IN, SUBSIDIARIES), OR
COMMITMENTS THEREFOR, OR TO CREATE ANY SUBSIDIARY OR TO BECOME OR REMAIN A
PARTNER IN ANY PARTNERSHIP OR JOINT VENTURE, OR TO MAKE ANY ACQUISITIONS,
EXCEPT:

(A)           CASH EQUIVALENT INVESTMENTS;

(B)           INVESTMENTS IN DEBT SECURITIES RATED A- OR BETTER BY S&P, A-3 OR
BETTER BY MOODY’S OR NAIC-1 OR BETTER BY THE NAIC;

(C)           EXISTING INVESTMENTS IN SUBSIDIARIES AND OTHER INVESTMENTS IN
EXISTENCE ON THE CLOSING DATE;

(D)           INVESTMENTS IN DEBT SECURITIES NOT SATISFYING ANY OF THE STANDARDS
SET FORTH IN CLAUSE (B) ABOVE BUT RATED BBB- OR BETTER BY S&P, BAA-3 OR BETTER
BY MOODY’S OR NAIC-2 OR BETTER BY THE NAIC; PROVIDED, THAT IF ANY SUCH
INVESTMENT CEASES TO MEET SUCH RATINGS REQUIREMENTS, THEN SUCH INVESTMENT SHALL
BE PERMITTED HEREBY FOR A PERIOD OF 180 DAYS AFTER THE DATE ON WHICH SUCH
RATINGS REQUIREMENT IS NO LONGER SATISFIED; PROVIDED, FURTHER, THAT ALL SUCH
INVESTMENTS UNDER THIS CLAUSE (D) DO NOT EXCEED, IN THE AGGREGATE AT

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ANY ONE TIME OUTSTANDING, 10% OF THE COMBINED INVESTMENTS OF THE BORROWER AND
ITS SUBSIDIARIES;

(E)           INVESTMENTS IN DEBT SECURITIES NOT SATISFYING ANY OF THE STANDARDS
SET FORTH IN CLAUSE (B) OR (D) ABOVE IN AN AGGREGATE AMOUNT NOT EXCEEDING 5% OF
CONSOLIDATED NET WORTH OF THE BORROWER AND ITS CONSOLIDATED SUBSIDIARIES;

(F)            INVESTMENTS BY THE BORROWER (NOT INCLUDING INVESTMENTS IN
SUBSIDIARIES) IN EQUITY SECURITIES IN AN AGGREGATE AMOUNT NOT TO EXCEED 20% OF
THE CONSOLIDATED NET WORTH OF THE BORROWER AND ITS CONSOLIDATED SUBSIDIARIES;
PROVIDED THAT NO SINGLE INVESTMENT IN EQUITY SECURITIES SHALL BE IN AN AMOUNT IN
EXCESS OF 5% OF THE CONSOLIDATED NET WORTH OF THE BORROWER AND ITS CONSOLIDATED
SUBSIDIARIES;

(G)           OTHER INVESTMENTS AFTER THE CLOSING DATE IN AN AGGREGATE AMOUNT
NOT TO EXCEED 5% OF CONSOLIDATED NET WORTH OF THE BORROWER AND ITS CONSOLIDATED
SUBSIDIARIES;

(H)           ACQUISITIONS IN AN AGGREGATE AMOUNT NOT TO EXCEED 5% OF
CONSOLIDATED NET WORTH OF THE BORROWER AND ITS CONSOLIDATED SUBSIDIARIES IN ANY
FISCAL YEAR; AND

(I)            INVESTMENTS BY NAVIGATORS IN WHOLLY-OWNED SUBSIDIARIES OF
NAVIGATORS (INCLUDING NEW WHOLLY-OWNED SUBSIDIARIES OF NAVIGATORS);

provided that the Borrower will not, and will not permit any Subsidiary to, make
any Investments not in conformity with its then applicable investment
guidelines.

7.15   CONTINGENT OBLIGATIONS.  THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY
SUBSIDIARY TO, MAKE OR SUFFER TO EXIST ANY CONTINGENT OBLIGATION (INCLUDING,
WITHOUT LIMITATION, ANY CONTINGENT OBLIGATION WITH RESPECT TO THE OBLIGATIONS OF
A SUBSIDIARY), EXCEPT (A) BY ENDORSEMENT OF INSTRUMENTS FOR DEPOSIT OR
COLLECTION IN THE ORDINARY COURSE OF BUSINESS, (B) CONTINGENT OBLIGATIONS IN
RESPECT OF LETTERS OF CREDIT; AND (C) OBLIGATIONS WITH RESPECT TO LETTERS OF
CREDIT NOT ISSUED PURSUANT TO THIS AGREEMENT WITH MILLENNIUM UNDERWRITING LTD.
OR NAVIGATORS CORPORATE UNDERWRITERS LTD. AS APPLICANT SO LONG AS NONE OF THE
BORROWER OR ITS SUBSIDIARIES IS A CO-APPLICANT WITH RESPECT THERETO OR OTHERWISE
GUARANTIES SUCH OBLIGATIONS; PROVIDED, HOWEVER, THAT THE BORROWER OR ANY OF ITS
WHOLLY-OWNED SUBSIDIARIES MAY GUARANTEE (I) THE OBLIGATIONS OF ANY PERSON THAT
IS ITS OR ITS SUBSIDIARY’S EMPLOYEE SO LONG AS THE AGGREGATE AMOUNT OF ALL SUCH
GUARANTEED OBLIGATIONS, TAKEN TOGETHER WITH THE AGGREGATE AMOUNT OF ANY AND ALL
LOANS TO SUCH PERSONS BY THE BORROWER IN ACCORDANCE WITH SECTION 7.14
OUTSTANDING AT ANY TIME DO NOT IN THE AGGREGATE EXCEED $500,000, AND (II) THE
OBLIGATIONS OF ANY WHOLLY-OWNED SUBSIDIARY UNDER OFFICE SPACE LEASES FOR SPACE
USED BY SUCH WHOLLY-OWNED SUBSIDIARY.

7.16   LIENS.  THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY SUBSIDIARY TO,
CREATE, INCUR, OR SUFFER TO EXIST ANY LIEN IN, OF OR ON THE PROPERTY OF THE
BORROWER OR ANY OF ITS SUBSIDIARIES, EXCEPT:

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(A)           LIENS FOR TAXES, ASSESSMENTS OR GOVERNMENTAL CHARGES OR LEVIES ON
ITS PROPERTY IF THE SAME SHALL NOT AT THE TIME BE DELINQUENT OR THEREAFTER CAN
BE PAID WITHOUT PENALTY, OR ARE BEING CONTESTED IN GOOD FAITH AND BY APPROPRIATE
PROCEEDINGS AND FOR WHICH ADEQUATE RESERVES IN ACCORDANCE WITH AGREEMENT
ACCOUNTING PRINCIPLES SHALL HAVE BEEN SET ASIDE ON ITS BOOKS;

(B)           LIENS IMPOSED BY LAW, SUCH AS CARRIERS’, WAREHOUSEMEN’S AND
MECHANICS’ LIENS AND OTHER SIMILAR LIENS ARISING IN THE ORDINARY COURSE OF
BUSINESS WHICH SECURE THE PAYMENT OF OBLIGATIONS NOT MORE THAN 60 DAYS PAST DUE
OR WHICH ARE BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS AND FOR
WHICH ADEQUATE RESERVES SHALL HAVE BEEN SET ASIDE ON ITS BOOKS;

(C)           LIENS ARISING OUT OF PLEDGES OR DEPOSITS UNDER WORKER’S
COMPENSATION LAWS, UNEMPLOYMENT INSURANCE, OLD AGE PENSIONS, OR OTHER SOCIAL
SECURITY OR RETIREMENT BENEFITS, OR SIMILAR LEGISLATION;

(D)           UTILITY EASEMENTS, BUILDING RESTRICTIONS AND SUCH OTHER
ENCUMBRANCES OR CHARGES AGAINST REAL PROPERTY AS ARE OF A NATURE GENERALLY
EXISTING WITH RESPECT TO PROPERTIES OF A SIMILAR CHARACTER AND WHICH DO NOT IN
ANY MATERIAL WAY AFFECT THE MARKETABILITY OF THE SAME OR INTERFERE WITH THE USE
THEREOF IN THE BUSINESS OF THE BORROWER OR ITS SUBSIDIARIES;

(E)           LIENS EXISTING ON THE CLOSING DATE AND DESCRIBED IN SCHEDULE 7.16
HERETO;

(F)            LIENS IN FAVOR OF THE AGENT, FOR THE BENEFIT OF THE LENDERS,
GRANTED PURSUANT TO THE PLEDGE AGREEMENT OR PURSUANT TO THE CASH COLLATERAL
SECURITY AGREEMENT;

(G)           DEPOSITS OF CASH OR SECURITIES WITH OR ON BEHALF OF STATE
INSURANCE DEPARTMENTS REFLECTED IN THE INSURANCE SUBSIDIARIES’ STATUTORY
FINANCIAL STATEMENTS;

(H)           DEPOSITS OF CASH OR SECURITIES BY THE BORROWER WITH LLOYD’S OF
LONDON; AND

(I)            LIENS ON ASSETS SUBJECT TO CAPITAL LEASES PERMITTED UNDER
SECTION 7.11(D).

7.17   AFFILIATES.  THE BORROWER WILL NOT, AND WILL NOT PERMIT ANY SUBSIDIARY
TO, ENTER INTO ANY TRANSACTION (INCLUDING, WITHOUT LIMITATION, THE PURCHASE OR
SALE OF ANY PROPERTY OR SERVICE) WITH, OR MAKE ANY PAYMENT OR TRANSFER TO, ANY
AFFILIATE EXCEPT IN THE ORDINARY COURSE OF BUSINESS AND PURSUANT TO THE
REASONABLE REQUIREMENTS OF THE BORROWER’S OR SUCH SUBSIDIARY’S BUSINESS AND UPON
FAIR AND REASONABLE TERMS NO LESS FAVORABLE TO THE BORROWER OR SUCH SUBSIDIARY
THAN THE BORROWER OR SUCH SUBSIDIARY WOULD OBTAIN IN A COMPARABLE ARMS-LENGTH
TRANSACTION.

7.18   AMENDMENTS TO AGREEMENTS.  THE BORROWER WILL NOT, AND WILL NOT PERMIT ANY
SUBSIDIARY TO, AMEND, WAIVE, MODIFY OR TERMINATE ITS CERTIFICATE OR ARTICLES OF
INCORPORATION.

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7.19   CHANGE IN FISCAL YEAR.  THE BORROWER SHALL NOT, NOR SHALL IT PERMIT ANY
SUBSIDIARY TO, CHANGE ITS FISCAL YEAR TO END ON ANY DATE OTHER THAN DECEMBER 31
OF EACH YEAR.

7.20   INCONSISTENT AGREEMENTS.  THE BORROWER SHALL NOT, NOR SHALL IT PERMIT ANY
SUBSIDIARY TO, ENTER INTO ANY INDENTURE, AGREEMENT, INSTRUMENT OR OTHER
ARRANGEMENT WHICH, (A) DIRECTLY OR INDIRECTLY PROHIBITS OR RESTRAINS, OR HAS THE
EFFECT OF PROHIBITING OR RESTRAINING, OR IMPOSES MATERIALLY ADVERSE CONDITIONS
UPON, THE INCURRENCE OF THE OBLIGATIONS, THE GRANTING OF LIENS TO SECURE THE
OBLIGATIONS, THE AMENDING OF THE FACILITY DOCUMENTS, THE AMENDING OF THE
FACILITY DOCUMENTS OR THE ABILITY OF ANY SUBSIDIARY TO (I) PAY DIVIDENDS OR MAKE
OTHER DISTRIBUTIONS ON ITS CAPITAL STOCK, (II) MAKE LOANS OR ADVANCES TO THE
BORROWER OR (III) REPAY LOANS OR ADVANCES FROM THE BORROWER OR (B) CONTAINS ANY
PROVISION WHICH WOULD BE VIOLATED OR BREACHED BY THE MAKING OF REVOLVING CREDIT
ADVANCES, BY THE ISSUANCE OF LETTERS OF CREDIT OR BY THE PERFORMANCE BY THE
BORROWER OR ANY SUBSIDIARY OF ANY OF ITS OBLIGATIONS UNDER ANY FACILITY
DOCUMENT.

7.21   REINSURANCE.  (A)  THE BORROWER SHALL CAUSE EACH INSURANCE SUBSIDIARY TO
MAINTAIN REINSURANCE PROTECTION WITH RESPECT TO EACH TYPE OF RISK IT WRITES
WHICH REINSURANCE PROTECTION, IN THE EVENT OF A LOSS, LIMITS THE NET LOSS OF
SUCH INSURANCE SUBSIDIARY TO 2.5% OR LESS OF THE STATUTORY SURPLUS OF SUCH
INSURANCE SUBSIDIARY.

(B)           THE BORROWER SHALL NOT CAUSE OR PERMIT AN INSURANCE SUBSIDIARY TO
ENTER INTO OR MAINTAIN, AS A CEDENT, REINSURANCE AGREEMENTS OR RETROCESSION
AGREEMENTS WITH ANY PERSON OTHER THAN AN APPROVED REINSURER.

(C)           THE BORROWER SHALL NOT CAUSE OR PERMIT AN INSURANCE SUBSIDIARY TO
ENTER INTO OR MAINTAIN, AS A CEDENT, REINSURANCE AGREEMENTS OR RETROCESSSION
AGREEMENTS WITH ANY PERSON WHICH DO NOT COMPLY WITH THE GUIDELINES FOR
REINSURANCE BY INSURANCE SUBSIDIARIES SET FORTH ON SCHEDULE 7.21 HERETO, AS
AMENDED WITH THE CONSENT OF THE LENDERS (THE “REINSURANCE GUIDELINES”).

7.22   STOCK OF SUBSIDIARIES.  THE BORROWER SHALL NOT SELL OR OTHERWISE DISPOSE
OF (INCLUDING THE GRANTING OF ANY SECURITY INTEREST IN) ANY SHARES OF CAPITAL
STOCK OF ANY SUBSIDIARY OTHER THAN PURSUANT TO THE PLEDGE AGREEMENT, OR PERMIT
ANY SUBSIDIARY TO ISSUE ADDITIONAL SHARES OF ITS CAPITAL STOCK, EXCEPT THE
MINIMUM NUMBER OF DIRECTORS’ QUALIFYING SHARES REQUIRED BY APPLICABLE LAW.

7.23   FINANCIAL COVENANTS.

7.23.1 MINIMUM CONSOLIDATED TANGIBLE NET WORTH.  THE BORROWER WILL AT ALL TIMES
MAINTAIN CONSOLIDATED TANGIBLE NET WORTH OF NOT LESS THAN $415,000,000.

7.23.2 MINIMUM STATUTORY SURPLUS.  THE BORROWER WILL CAUSE THE SIGNIFICANT
INSURANCE SUBSIDIARIES TO MAINTAIN AN AGGREGATE STATUTORY SURPLUS OF NOT LESS
THAN $400,000,000.

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7.23.3 LEVERAGE RATIO.  THE BORROWER WILL NOT PERMIT THE LEVERAGE RATIO TO
EXCEED 0.30 TO 1.0 AT ANY TIME.

7.23.4 MINIMUM RISK-BASED CAPITAL.  THE BORROWER WILL CAUSE EACH SIGNIFICANT
INSURANCE SUBSIDIARY TO MAINTAIN A RATIO OF (A) TOTAL ADJUSTED CAPITAL (AS
DEFINED IN THE RISK-BASED CAPITAL ACT OR IN THE RULES AND PROCEDURES PRESCRIBED
FROM TIME TO TIME BY THE NAIC WITH RESPECT THERETO) TO (B) THE COMPANY ACTION
LEVEL RBC (AS DEFINED IN THE RISK-BASED CAPITAL ACT OR IN THE RULES AND
PROCEDURES PRESCRIBED FROM TIME TO TIME BY THE NAIC WITH RESPECT THERETO) OF AT
LEAST 150%.

7.24   ADDITIONAL PLEDGE.  EFFECTIVE UPON ANY PERSON BECOMING A SIGNIFICANT
SUBSIDIARY, THE PARENT THEREOF SHALL PLEDGE THE STOCK OR OTHER EQUITY INTERESTS
THEREOF TO THE AGENT FOR THE BENEFIT OF THE LENDERS PURSUANT TO DOCUMENTATION
REASONABLY ACCEPTABLE TO THE AGENT PROVIDED THAT NO PLEDGE OF THE STOCK OF NSIC
SHALL BE REQUIRED SO LONG AS NSIC IS NOT A DIRECT SUBSIDIARY OF THE BORROWER.

ARTICLE VIII

DEFAULTS

The occurrence of any one or more of the following events shall constitute a
Default:

8.1   ANY REPRESENTATION OR WARRANTY MADE OR DEEMED MADE BY OR ON BEHALF OF THE
BORROWER OR ANY OF ITS SUBSIDIARIES TO THE LENDERS OR THE AGENT UNDER OR IN
CONNECTION WITH THIS AGREEMENT, ANY OTHER FACILITY DOCUMENT, ANY REVOLVING
CREDIT LOAN, ANY LETTER OF CREDIT OR ANY CERTIFICATE OR INFORMATION DELIVERED IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER FACILITY DOCUMENT SHALL BE FALSE IN
ANY MATERIAL RESPECT ON THE DATE AS OF WHICH MADE OR DEEMED MADE.

8.2   NONPAYMENT OF (A) ANY PRINCIPAL OF ANY REVOLVING CREDIT LOAN OR ANY
REIMBURSEMENT OBLIGATION WHEN DUE, OR (B) ANY INTEREST UPON ANY REVOLVING CREDIT
LOAN OR ANY COMMITMENT OR OTHER FEE OR OBLIGATIONS UNDER ANY OF THE FACILITY
DOCUMENTS WITHIN FIVE DAYS AFTER WRITTEN NOTICE FROM THE AGENT OR ANY LENDER.

8.3   THE BREACH BY THE BORROWER OF ANY OF THE TERMS OR PROVISIONS OF SECTIONS
3.8, 7.2, 7.3, SECTIONS 7.10 THROUGH 7.13, SECTIONS 7.15 THROUGH 7.20 OR
SECTIONS 7.22 THROUGH 7.23.

8.4   THE BREACH BY THE BORROWER (OTHER THAN A BREACH WHICH CONSTITUTES A
DEFAULT UNDER SECTION 8.1, 8.2 OR 8.3) OF ANY OF THE TERMS OR PROVISIONS OF THIS
AGREEMENT WHICH IS NOT REMEDIED WITHIN THIRTY (30) DAYS (OR IN THE CASE OF
SECTION 7.14, TEN (10) DAYS) AFTER WRITTEN NOTICE FROM THE AGENT OR ANY LENDER.

8.5   FAILURE OF THE BORROWER OR ANY OF ITS SUBSIDIARIES TO PAY ANY INDEBTEDNESS
AGGREGATING IN EXCESS OF $2,500,000 WHEN DUE; OR THE DEFAULT BY THE BORROWER OR
ANY OF ITS SUBSIDIARIES IN THE PERFORMANCE OF ANY TERM, PROVISION OR CONDITION
CONTAINED IN ANY AGREEMENT UNDER WHICH ANY SUCH INDEBTEDNESS WAS CREATED OR IS
GOVERNED, OR THE OCCURRENCE

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OF ANY OTHER EVENT OR EXISTENCE OF ANY OTHER CONDITION, THE EFFECT OF ANY OF
WHICH IS TO CAUSE, OR TO PERMIT THE HOLDER OR HOLDERS OF SUCH INDEBTEDNESS TO
CAUSE, SUCH INDEBTEDNESS TO BECOME DUE PRIOR TO ITS STATED MATURITY; OR ANY SUCH
INDEBTEDNESS OF THE BORROWER OR ANY OF ITS SUBSIDIARIES SHALL BE DECLARED TO BE
DUE AND PAYABLE OR REQUIRED TO BE PREPAID (OTHER THAN BY A REGULARLY SCHEDULED
PAYMENT) PRIOR TO THE STATED MATURITY THEREOF.

8.6   THE BORROWER OR ANY OF ITS SUBSIDIARIES SHALL (A) HAVE AN ORDER FOR RELIEF
ENTERED WITH RESPECT TO IT UNDER THE FEDERAL BANKRUPTCY LAWS AS NOW OR HEREAFTER
IN EFFECT, (B) MAKE AN ASSIGNMENT FOR THE BENEFIT OF CREDITORS, (C) APPLY FOR,
SEEK, CONSENT TO, OR ACQUIESCE IN, THE APPOINTMENT OF A RECEIVER, CUSTODIAN,
TRUSTEE, EXAMINER, LIQUIDATOR OR SIMILAR OFFICIAL FOR IT OR ANY SUBSTANTIAL
PORTION OF ITS PROPERTY, (D) INSTITUTE ANY PROCEEDING SEEKING AN ORDER FOR
RELIEF UNDER THE FEDERAL BANKRUPTCY LAWS AS NOW OR HEREAFTER IN EFFECT OR
SEEKING TO ADJUDICATE IT A BANKRUPT OR INSOLVENT, OR SEEKING DISSOLUTION,
WINDING UP, LIQUIDATION, REORGANIZATION, ARRANGEMENT, ADJUSTMENT OR COMPOSITION
OF IT OR ITS DEBTS UNDER ANY LAW RELATING TO BANKRUPTCY, INSOLVENCY OR
REORGANIZATION OR RELIEF OF DEBTORS OR FAIL TO FILE AN ANSWER OR OTHER PLEADING
DENYING THE MATERIAL ALLEGATIONS OF ANY SUCH PROCEEDING FILED AGAINST IT, (E)
TAKE ANY CORPORATE ACTION TO AUTHORIZE OR EFFECT ANY OF THE FOREGOING ACTIONS
SET FORTH IN THIS SECTION 8.6, (F) FAIL TO CONTEST IN GOOD FAITH ANY APPOINTMENT
OR PROCEEDING DESCRIBED IN SECTION 8.7 OR (G) BECOME UNABLE TO PAY, NOT PAY, OR
ADMIT IN WRITING ITS INABILITY TO PAY, ITS DEBTS GENERALLY AS THEY BECOME DUE.

8.7   WITHOUT THE APPLICATION, APPROVAL OR CONSENT OF THE BORROWER OR ANY OF ITS
SUBSIDIARIES, A RECEIVER, TRUSTEE, EXAMINER, LIQUIDATOR OR SIMILAR OFFICIAL
SHALL BE APPOINTED FOR THE BORROWER OR ANY OF ITS SUBSIDIARIES OR ANY
SUBSTANTIAL PORTION OF ITS PROPERTY, OR A PROCEEDING DESCRIBED IN SECTION 8.6(D)
SHALL BE INSTITUTED AGAINST THE BORROWER OR ANY OF ITS SUBSIDIARIES AND SUCH
APPOINTMENT CONTINUES UNDISCHARGED OR SUCH PROCEEDING CONTINUES UNDISMISSED OR
UNSTAYED FOR A PERIOD OF THIRTY CONSECUTIVE DAYS.

8.8   ANY COURT, GOVERNMENT OR GOVERNMENTAL AGENCY SHALL CONDEMN, SEIZE OR
OTHERWISE APPROPRIATE, OR TAKE CUSTODY OR CONTROL OF (EACH A “CONDEMNATION”),
ALL OR ANY PORTION OF THE PROPERTY OF THE BORROWER AND ITS SUBSIDIARIES WHICH,
WHEN TAKEN TOGETHER WITH ALL OTHER PROPERTY OF THE BORROWER AND ITS SUBSIDIARIES
SO CONDEMNED, SEIZED, APPROPRIATED, OR TAKEN CUSTODY OR CONTROL OF, DURING THE
TWELVE-MONTH PERIOD ENDING WITH THE MONTH IN WHICH ANY SUCH CONDEMNATION OCCURS,
CONSTITUTES A SUBSTANTIAL PORTION.

8.9   THE BORROWER OR ANY OF ITS SUBSIDIARIES SHALL FAIL WITHIN THIRTY DAYS TO
PAY, BOND OR OTHERWISE DISCHARGE ONE OR MORE (A) FINAL, NONAPPEALABLE JUDGMENTS
OR ORDERS FOR THE PAYMENT OF MONEY IN EXCESS OF $2,500,000 (OR THE EQUIVALENT
THEREOF IN CURRENCIES OTHER THAN U.S. DOLLARS) IN THE AGGREGATE, OR (B) FINAL,
NONAPPEALABLE NONMONETARY JUDGMENTS OR ORDERS WHICH, INDIVIDUALLY OR IN THE
AGGREGATE, COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT, WHICH
JUDGMENT(S), IN ANY SUCH CASE, IS/ARE NOT STAYED ON APPEAL OR OTHERWISE BEING
APPROPRIATELY CONTESTED IN GOOD FAITH.

8.10   ANY REPORTABLE EVENT SHALL OCCUR IN CONNECTION WITH ANY PLAN.

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8.11   THE BORROWER OR ANY OTHER MEMBER OF THE CONTROLLED GROUP SHALL HAVE BEEN
NOTIFIED BY THE SPONSOR OF A MULTIEMPLOYER PLAN THAT IT HAS INCURRED WITHDRAWAL
LIABILITY TO SUCH MULTIEMPLOYER PLAN IN AN AMOUNT WHICH, WHEN AGGREGATED WITH
ALL OTHER AMOUNTS REQUIRED TO BE PAID TO MULTIEMPLOYER PLANS BY THE BORROWER OR
ANY OTHER MEMBER OF THE CONTROLLED GROUP AS WITHDRAWAL LIABILITY (DETERMINED AS
OF THE DATE OF SUCH NOTIFICATION), EXCEEDS $2,500,000.

8.12   THE BORROWER OR ANY OTHER MEMBER OF THE CONTROLLED GROUP SHALL HAVE BEEN
NOTIFIED BY THE SPONSOR OF A MULTIEMPLOYER PLAN THAT SUCH MULTIEMPLOYER PLAN IS
IN REORGANIZATION OR IS BEING TERMINATED, WITHIN THE MEANING OF TITLE IV OF
ERISA, IF AS A RESULT OF SUCH REORGANIZATION OR TERMINATION THE AGGREGATE ANNUAL
CONTRIBUTIONS OF THE BORROWER AND THE OTHER MEMBERS OF THE CONTROLLED GROUP
(TAKEN AS A WHOLE) TO ALL MULTIEMPLOYER PLANS WHICH ARE THEN IN REORGANIZATION
OR BEING TERMINATED HAVE BEEN OR WILL BE INCREASED OVER THE AMOUNTS CONTRIBUTED
TO SUCH MULTIEMPLOYER PLANS FOR THE RESPECTIVE PLAN YEARS OF EACH SUCH
MULTIEMPLOYER PLAN IMMEDIATELY PRECEDING THE PLAN YEAR IN WHICH THE
REORGANIZATION OR TERMINATION OCCURS BY AN AMOUNT EXCEEDING $2,500,000.

8.13   THE BORROWER OR ANY OF ITS SUBSIDIARIES SHALL (A) BE THE SUBJECT TO ANY
PROCEEDING OR INVESTIGATION PERTAINING TO THE RELEASE BY THE BORROWER, ANY OF
ITS SUBSIDIARIES OR ANY OTHER PERSON OF ANY TOXIC OR HAZARDOUS WASTE OR
SUBSTANCE INTO THE ENVIRONMENT, OR (B) VIOLATE ANY ENVIRONMENTAL LAW, WHICH, IN
THE CASE OF AN EVENT DESCRIBED IN CLAUSE (A) OR (B), COULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

8.14   ANY CHANGE IN CONTROL SHALL OCCUR.

8.15   THE OCCURRENCE OF ANY “DEFAULT”, AS DEFINED IN ANY FACILITY DOCUMENT
(OTHER THAN THIS AGREEMENT OR THE REVOLVING CREDIT NOTES) OR THE BREACH OF ANY
OF THE TERMS OR PROVISIONS OF ANY FACILITY DOCUMENT (OTHER THAN THIS AGREEMENT
OR THE REVOLVING CREDIT NOTES), WHICH DEFAULT OR BREACH CONTINUES BEYOND ANY
PERIOD OF GRACE THEREIN PROVIDED.

8.16   THE PLEDGE AGREEMENT SHALL FOR ANY REASON FAIL TO CREATE A VALID AND
PERFECTED FIRST PRIORITY SECURITY INTEREST IN ANY COLLATERAL PURPORTED TO BE
COVERED THEREBY, EXCEPT AS PERMITTED BY THE TERMS THEREOF, OR THE PLEDGE
AGREEMENT SHALL FAIL TO REMAIN IN FULL FORCE OR EFFECT OR ANY ACTION SHALL BE
TAKEN TO DISCONTINUE OR TO ASSERT THE INVALIDITY OR UNENFORCEABILITY OF THE
PLEDGE AGREEMENT, OR THE BORROWER SHALL FAIL TO COMPLY WITH ANY OF THE TERMS OR
PROVISIONS OF THE PLEDGE AGREEMENT.

8.17   THERE SHALL OCCUR A CHANGE IN THE BUSINESS, PROPERTY, CONDITION
(FINANCIAL OR OTHERWISE) OR RESULTS OF OPERATIONS OF THE BORROWER AND ITS
SUBSIDIARIES WHICH HAS A MATERIAL ADVERSE EFFECT.

8.18   THE BORROWER OR ANY OF ITS SUBSIDIARIES INCURS OR BECOMES SUBJECT TO
ACTION OR THREATENED ACTION OF ANY GOVERNMENTAL AUTHORITY, INCLUDING, WITHOUT
LIMITATION, A FINE, PENALTY, CEASE AND DESIST ORDER OR REVOCATION, SUSPENSION OR
LIMITATION OF A LICENSE, THE EFFECT OF WHICH COULD REASONABLY BE EXPECTED TO
HAVE A MATERIAL ADVERSE EFFECT.

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8.19   ANY SECURITY DOCUMENT SHALL FOR ANY REASON FAIL TO CREATE A VALID AND
PERFECTED, FIRST PRIORITY SECURITY INTEREST IN ANY COLLATERAL PURPORTED TO BE
COVERED THEREBY, EXCEPT AS PERMITTED BY THE TERMS OF SUCH SECURITY DOCUMENT, OR
ANY SECURITY DOCUMENT, ONCE EXECUTED, SHALL FAIL TO REMAIN IN FULL FORCE OR
EFFECT OR ANY ACTION SHALL BE TAKEN TO DISCONTINUE OR TO ASSERT THE INVALIDITY
OR UNENFORCEABILITY OF ANY SECURITY DOCUMENT.

ARTICLE IX

ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

9.1   ACCELERATION.  IF ANY DEFAULT DESCRIBED IN SECTION 8.6 OR 8.7 OCCURS WITH
RESPECT TO THE BORROWER, THE OBLIGATIONS OF THE LENDERS TO MAKE REVOLVING CREDIT
LOANS AND ISSUE LETTERS OF CREDIT HEREUNDER SHALL AUTOMATICALLY TERMINATE AND
THE OBLIGATIONS SHALL IMMEDIATELY BECOME DUE AND PAYABLE WITHOUT ANY ELECTION OR
ACTION ON THE PART OF THE AGENT OR ANY LENDER.  IF ANY OTHER DEFAULT OCCURS, THE
REQUIRED LENDERS (OR THE AGENT WITH THE CONSENT OF THE REQUIRED LENDERS) MAY
TERMINATE OR SUSPEND THE OBLIGATIONS OF THE LENDERS TO MAKE REVOLVING CREDIT
LOANS AND/OR ISSUE LETTERS OF CREDIT HEREUNDER, OR DECLARE THE OBLIGATIONS TO BE
DUE AND PAYABLE, OR BOTH, WHEREUPON THE OBLIGATIONS SHALL BECOME IMMEDIATELY DUE
AND PAYABLE, WITHOUT PRESENTMENT, DEMAND, PROTEST OR NOTICE OF ANY KIND, ALL OF
WHICH THE BORROWER HEREBY EXPRESSLY WAIVES.  IN ADDITION TO THE FOREGOING,
FOLLOWING THE OCCURRENCE AND DURING THE CONTINUANCE OF A DEFAULT, SO LONG AS ANY
LETTER OF CREDIT HAS NOT BEEN FULLY DRAWN AND HAS NOT BEEN CANCELED OR EXPIRED
BY ITS TERMS, UPON DEMAND BY THE AGENT (WHICH DEMAND SHALL BE MADE UPON THE
REQUEST OF THE REQUIRED LENDERS), THE BORROWER SHALL DEPOSIT IN AN ACCOUNT (THE
“LETTER OF CREDIT CASH COLLATERAL ACCOUNT”) MAINTAINED WITH JPMORGAN CHASE BANK
IN THE NAME OF THE AGENT, FOR THE RATABLE BENEFIT OF THE LENDERS AND THE AGENT,
CASH OR CASH COLLATERAL INVESTMENTS IN AN AMOUNT NECESSARY TO MAKE THE BALANCE
IN SUCH ACCOUNT EQUAL TO THE AGGREGATE UNDRAWN FACE AMOUNT OF ALL OUTSTANDING
LETTERS OF CREDIT AND ALL FEES AND OTHER AMOUNTS DUE OR WHICH MAY BECOME DUE
WITH RESPECT THERETO.  FOLLOWING THE OCCURRENCE AND DURING THE CONTINUANCE OF A
DEFAULT, THE BORROWER SHALL HAVE NO CONTROL OVER FUNDS DEPOSITED IN THE LETTER
OF CREDIT CASH COLLATERAL ACCOUNT PURSUANT TO THIS SECTION, WHICH FUNDS SHALL BE
INVESTED BY THE AGENT FROM TIME TO TIME IN ITS DISCRETION IN CERTIFICATES OF
DEPOSIT OF JPMORGAN CHASE BANK HAVING A MATURITY NOT EXCEEDING THIRTY (30)
DAYS.  SUCH FUNDS SHALL BE PROMPTLY APPLIED BY THE AGENT TO REIMBURSE THE ISSUER
FOR DRAFTS DRAWN FROM TIME TO TIME UNDER THE LETTERS OF CREDIT.  SUCH FUNDS, IF
ANY, REMAINING IN THE LETTER OF CREDIT CASH COLLATERAL ACCOUNT FOLLOWING THE
PAYMENT OF ALL OBLIGATIONS IN FULL OR THE EARLIER TERMINATION OF ALL DEFAULTS
SHALL, UNLESS THE AGENT IS OTHERWISE DIRECTED BY A COURT OF COMPETENT
JURISDICTION, BE PROMPTLY PAID OVER TO THE BORROWER.

If, within thirty (30) days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Revolving
Credit Loans and/or issue Letters of Credit hereunder as a result of any Default
(other than any Default as described in Section 8.6 or 8.7 with respect to the
Borrower) and before any judgment or decree for the payment of the Obligations
due shall have been obtained or entered, the Required Lenders (in

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their sole discretion) shall so direct, the Agent shall, by notice to the
Borrower, rescind and annul such acceleration and/or termination.

9.2   AMENDMENTS.  SUBJECT TO THE PROVISIONS OF THIS ARTICLE IX, THE REQUIRED
LENDERS (OR THE AGENT WITH THE CONSENT OF THE REQUIRED LENDERS) AND THE BORROWER
MAY ENTER INTO AGREEMENTS SUPPLEMENTAL HERETO FOR THE PURPOSE OF ADDING OR
MODIFYING ANY PROVISIONS TO THE FACILITY DOCUMENTS OR CHANGING IN ANY MANNER THE
RIGHTS OF THE LENDERS OR THE BORROWER HEREUNDER OR WAIVING ANY DEFAULT
HEREUNDER; PROVIDED, HOWEVER, THAT NO SUCH SUPPLEMENTAL AGREEMENT SHALL, WITHOUT
THE CONSENT OF EACH LENDER:

(A)           EXTEND THE FINAL MATURITY OF ANY REVOLVING CREDIT LOAN OR FORGIVE
ALL OR ANY PORTION OF THE PRINCIPAL AMOUNT THEREOF, OR REDUCE THE RATE OR EXTEND
THE TIME OF PAYMENT OF INTEREST OR FEES (INCLUDING WITHOUT LIMITATION LETTER OF
CREDIT FEES) HEREUNDER;

(B)           REDUCE THE PERCENTAGE SPECIFIED IN THE DEFINITION OF REQUIRED
LENDERS;

(C)           REDUCE THE AMOUNT OF OR EXTEND THE DATE FOR THE MANDATORY PAYMENTS
AND COMMITMENT AND FACILITY REDUCTIONS REQUIRED UNDER SECTION 2.1(B) OR 2.6, OR
INCREASE THE AMOUNT OF THE REVOLVING CREDIT COMMITMENT OR LETTER OF CREDIT
PARTICIPATION AMOUNT OF ANY LENDER HEREUNDER;

(D)           EXTEND THE REVOLVING CREDIT TERMINATION DATE OR THE LETTER OF
CREDIT AVAILABILITY TERMINATION DATE; PERMIT ANY LETTER OF CREDIT TO HAVE AN
EXPIRY DATE BEYOND FOUR YEARS AFTER NOTICE, IN THE CASE OF LLOYD’S LETTERS OF
CREDIT, OR ONE YEAR AFTER ITS EFFECTIVE DATE IN THE CASE OF OTHER LETTERS OF
CREDIT; EXCEPT AS PERMITTED IN SECTION 3.5, PERMIT THE AMENDMENT OR EXTENSION OF
ANY LETTER OF CREDIT; OR, EXCEPT AS OTHERWISE SET FORTH IN SECTION 3.1(B),
PERMIT THE RENEWAL OF ANY LETTER OF CREDIT;

(E)           RELEASE ANY GUARANTOR OF ANY OBLIGATIONS OR, EXCEPT AS PROVIDED IN
THE PLEDGE AGREEMENT, RELEASE ALL OR SUBSTANTIALLY ALL OF THE COLLATERAL FOR THE
OBLIGATIONS;

(F)            PERMIT ANY ASSIGNMENT BY THE BORROWER OF ITS OBLIGATIONS OR ITS
RIGHTS HEREUNDER; OR

(G)           PERMIT ANY AMENDMENT OF THE REINSURANCE GUIDELINES;

provided, further, that no such supplemental agreement shall, without the
consent of each Lender, amend this Section 9.2.  No amendment of any provision
of this Agreement relating to the Agent shall be effective without the written
consent of the Agent.  The Agent may waive payment of the fee required under
Section 13.3.2 without obtaining the consent of any other party to this
Agreement.

9.3   PRESERVATION OF RIGHTS.  NO DELAY OR OMISSION OF THE LENDERS OR THE AGENT
TO EXERCISE ANY RIGHT UNDER THE FACILITY DOCUMENTS SHALL IMPAIR SUCH RIGHT OR BE
CONSTRUED TO BE A WAIVER OF ANY DEFAULT OR AN ACQUIESCENCE THEREIN, AND THE
MAKING OF A REVOLVING CREDIT LOAN OR THE ISSUANCE OF A LETTER OF CREDIT
NOTWITHSTANDING THE EXISTENCE OF A DEFAULT OR THE

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INABILITY OF THE BORROWER TO SATISFY THE CONDITIONS PRECEDENT TO SUCH REVOLVING
CREDIT LOAN OR LETTER OF CREDIT SHALL NOT CONSTITUTE ANY WAIVER OR
ACQUIESCENCE.  ANY SINGLE OR PARTIAL EXERCISE OF ANY SUCH RIGHT SHALL NOT
PRECLUDE OTHER OR FURTHER EXERCISE THEREOF OR THE EXERCISE OF ANY OTHER RIGHT,
AND NO WAIVER, AMENDMENT OR OTHER VARIATION OF THE TERMS, CONDITIONS OR
PROVISIONS OF THE FACILITY DOCUMENTS WHATSOEVER SHALL BE VALID UNLESS IN WRITING
SIGNED BY THE LENDERS REQUIRED PURSUANT TO SECTION 9.2, AND THEN ONLY TO THE
EXTENT IN SUCH WRITING SPECIFICALLY SET FORTH.  ALL REMEDIES CONTAINED IN THE
FACILITY DOCUMENTS OR BY LAW AFFORDED SHALL BE CUMULATIVE AND ALL SHALL BE
AVAILABLE TO THE AGENT AND THE LENDERS UNTIL THE OBLIGATIONS HAVE BEEN PAID IN
FULL.

ARTICLE X

GENERAL PROVISIONS

10.1   SURVIVAL OF REPRESENTATIONS.  ALL REPRESENTATIONS AND WARRANTIES OF THE
BORROWER CONTAINED IN THIS AGREEMENT OR IN ANY FACILITY DOCUMENT SHALL SURVIVE
THE MAKING OF THE REVOLVING CREDIT LOANS AND THE ISSUANCE OF THE LETTERS OF
CREDIT HEREIN CONTEMPLATED.

10.2   GOVERNMENTAL REGULATION.  ANYTHING CONTAINED IN THIS AGREEMENT TO THE
CONTRARY NOTWITHSTANDING, NO LENDER SHALL BE OBLIGATED TO EXTEND CREDIT TO THE
BORROWER IN VIOLATION OF ANY LIMITATION OR PROHIBITION PROVIDED BY ANY
APPLICABLE STATUTE OR REGULATION.

10.3   HEADINGS.  SECTION HEADINGS IN THE FACILITY DOCUMENTS ARE FOR CONVENIENCE
OF REFERENCE ONLY, AND SHALL NOT GOVERN THE INTERPRETATION OF ANY OF THE
PROVISIONS OF THE FACILITY DOCUMENTS.

10.4   ENTIRE AGREEMENT.  THE FACILITY DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND
UNDERSTANDING AMONG THE BORROWER, THE AGENT, AND THE LENDERS AND SUPERSEDE ALL
PRIOR AGREEMENTS AND UNDERSTANDINGS AMONG THE BORROWER, THE AGENT, AND THE
LENDERS RELATING TO THE SUBJECT MATTER THEREOF OTHER THAN THE FEE LETTER DATED
DECEMBER 14, 2006 IN FAVOR OF JPMORGAN CHASE BANK AND JPMORGAN SECURITIES INC.
(THE “FEE LETTER”).

10.5   NUMBERS OF DOCUMENTS.  ALL STATEMENTS, NOTICES, CLOSING DOCUMENTS, AND
REQUESTS HEREUNDER SHALL BE FURNISHED TO THE AGENT WITH SUFFICIENT COUNTERPARTS
SO THAT THE AGENT MAY FURNISH ONE TO EACH OF THE LENDERS.

10.6   SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT.  THE RESPECTIVE
OBLIGATIONS OF THE LENDERS HEREUNDER ARE SEVERAL AND NOT JOINT AND NO LENDER
SHALL BE THE PARTNER OR AGENT OF ANY OTHER (EXCEPT TO THE EXTENT TO WHICH THE
AGENT IS AUTHORIZED TO ACT AS SUCH).  THE FAILURE OF ANY LENDER TO PERFORM ANY
OF ITS OBLIGATIONS HEREUNDER SHALL NOT RELIEVE ANY OTHER LENDER FROM ANY OF ITS
OBLIGATIONS HEREUNDER.  THIS AGREEMENT SHALL NOT BE CONSTRUED SO AS TO CONFER
ANY RIGHT OR BENEFIT UPON ANY PERSON OTHER THAN THE PARTIES TO THIS AGREEMENT
AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, PROVIDED, HOWEVER, THAT THE PARTIES
HERETO EXPRESSLY AGREE THAT THE ARRANGER SHALL ENJOY THE BENEFITS OF THE
PROVISIONS OF SECTIONS 10.7, 10.11 AND 11.11 TO THE EXTENT SPECIFICALLY SET
FORTH THEREIN AND SHALL HAVE THE RIGHT TO

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ENFORCE SUCH PROVISIONS ON ITS OWN BEHALF AND IN ITS OWN NAME TO THE SAME EXTENT
AS IF IT WERE A PARTY TO THIS AGREEMENT.

10.7   EXPENSES; INDEMNIFICATION.  (A)  THE BORROWER SHALL REIMBURSE THE AGENT
AND THE ARRANGER FOR ANY COSTS, INTERNAL CHARGES AND OUT-OF-POCKET EXPENSES
(INCLUDING REASONABLE ATTORNEYS’ FEES AND TIME CHARGES OF ATTORNEYS FOR THE
AGENT) PAID OR INCURRED BY THE AGENT OR THE ARRANGER IN CONNECTION WITH THE
PREPARATION, NEGOTIATION, EXECUTION, DELIVERY, SYNDICATION, REVIEW, AMENDMENT,
MODIFICATION, AND ADMINISTRATION OF THE FACILITY DOCUMENTS.  THE BORROWER ALSO
AGREES TO REIMBURSE THE AGENT, THE ARRANGER AND THE LENDERS FOR ANY COSTS,
INTERNAL CHARGES AND OUT-OF-POCKET EXPENSES (INCLUDING REASONABLE ATTORNEYS’
FEES AND TIME CHARGES OF ATTORNEYS FOR THE AGENT, THE ARRANGER AND THE LENDERS),
PAID OR INCURRED BY THE AGENT, THE ARRANGER OR ANY LENDER IN CONNECTION WITH THE
INVESTIGATION, COLLECTION AND ENFORCEMENT OF THE FACILITY DOCUMENTS.

(B)           THE BORROWER HEREBY FURTHER AGREES TO INDEMNIFY THE AGENT, THE
ARRANGER, EACH LENDER, EACH AFFILIATE OF A LENDER, AND THE DIRECTORS, OFFICERS,
PARTNERS AND EMPLOYEES OF ANY OF THE FOREGOING AGAINST ALL LOSSES, CLAIMS,
DAMAGES, PENALTIES, JUDGMENTS, LIABILITIES AND EXPENSES (INCLUDING, WITHOUT
LIMITATION, ALL EXPENSES OF LITIGATION OR PREPARATION THEREFOR WHETHER OR NOT
THE AGENT, THE ARRANGER OR ANY LENDER IS A PARTY THERETO) WHICH ANY OF THEM MAY
PAY OR INCUR ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER FACILITY
DOCUMENTS, THE TRANSACTIONS CONTEMPLATED HEREBY OR THE DIRECT OR INDIRECT
APPLICATION OR PROPOSED APPLICATION OF THE PROCEEDS OF ANY REVOLVING CREDIT LOAN
HEREUNDER EXCEPT TO THE EXTENT THAT THEY HAVE RESULTED FROM THE GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT OF THE PARTY SEEKING INDEMNIFICATION.  THE OBLIGATIONS OF
THE BORROWER UNDER THIS SECTION 10.7 SHALL SURVIVE THE TERMINATION OF THIS
AGREEMENT.

10.8   ACCOUNTING.  EXCEPT AS PROVIDED TO THE CONTRARY HEREIN, ALL ACCOUNTING
TERMS USED HEREIN SHALL BE INTERPRETED AND ALL ACCOUNTING DETERMINATIONS
HEREUNDER SHALL BE MADE IN ACCORDANCE WITH AGREEMENT ACCOUNTING PRINCIPLES.  IN
THE EVENT THE PAGES, COLUMNS, LINES OR SECTIONS OF THE ANNUAL STATEMENT
REFERENCED HEREIN ARE CHANGED OR RENUMBERED, ALL SUCH REFERENCES SHALL BE DEEMED
REFERENCES TO SUCH PAGE, COLUMN, LINE OR SECTION AS SO RENUMBERED OR CHANGED.

10.9   SEVERABILITY OF PROVISIONS.  ANY PROVISION IN ANY FACILITY DOCUMENT THAT
IS HELD TO BE INOPERATIVE, UNENFORCEABLE, OR INVALID IN ANY JURISDICTION SHALL,
AS TO THAT JURISDICTION, BE INOPERATIVE, UNENFORCEABLE, OR INVALID WITHOUT
AFFECTING THE REMAINING PROVISIONS IN THAT JURISDICTION OR THE OPERATION,
ENFORCEABILITY, OR VALIDITY OF THAT PROVISION IN ANY OTHER JURISDICTION, AND TO
THIS END THE PROVISIONS OF ALL FACILITY DOCUMENTS ARE DECLARED TO BE SEVERABLE.

10.10   NONLIABILITY OF LENDERS.  THE RELATIONSHIP BETWEEN THE BORROWER ON THE
ONE HAND AND THE LENDERS AND THE AGENT ON THE OTHER HAND SHALL BE SOLELY THAT OF
BORROWER AND LENDER.  NEITHER THE AGENT, THE ARRANGER NOR ANY LENDER SHALL HAVE
ANY FIDUCIARY RESPONSIBILITIES TO THE BORROWER.  NEITHER THE AGENT, THE ARRANGER
NOR ANY LENDER UNDERTAKES ANY RESPONSIBILITY TO THE BORROWER TO REVIEW OR INFORM
THE BORROWER OF ANY MATTER IN

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CONNECTION WITH ANY PHASE OF THE BORROWER’S BUSINESS OR OPERATIONS.  THE
BORROWER AGREES THAT NEITHER THE AGENT, THE ARRANGER NOR ANY LENDER SHALL HAVE
LIABILITY TO THE BORROWER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) FOR
LOSSES SUFFERED BY THE BORROWER IN CONNECTION WITH, ARISING OUT OF, OR IN ANY
WAY RELATED TO, THE TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED
BY THE FACILITY DOCUMENTS, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION
THEREWITH, UNLESS IT IS DETERMINED IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT
OF COMPETENT JURISDICTION THAT SUCH LOSSES RESULTED FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE PARTY FROM WHICH RECOVERY IS SOUGHT.  NEITHER THE
AGENT, THE ARRANGER NOR ANY LENDER SHALL HAVE ANY LIABILITY WITH RESPECT TO, AND
THE BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE FOR, ANY SPECIAL,
INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES SUFFERED BY THE BORROWER IN
CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO THE FACILITY DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED THEREBY.

10.11   CONFIDENTIALITY.  EACH LENDER AGREES TO HOLD ANY CONFIDENTIAL
INFORMATION WHICH IT MAY RECEIVE FROM THE BORROWER PURSUANT TO THIS AGREEMENT IN
CONFIDENCE, EXCEPT FOR DISCLOSURE (A) TO ITS AFFILIATES AND TO OTHER LENDERS AND
THEIR RESPECTIVE AFFILIATES, (B) TO LEGAL COUNSEL, ACCOUNTANTS, AND OTHER
PROFESSIONAL ADVISORS TO SUCH LENDER OR TO A TRANSFEREE, (C) TO REGULATORY
OFFICIALS, (D) TO ANY PERSON AS REQUESTED PURSUANT TO OR AS REQUIRED BY LAW,
REGULATION, OR LEGAL PROCESS, (E) TO ANY PERSON IN CONNECTION WITH ANY LEGAL
PROCEEDING TO WHICH SUCH LENDER IS A PARTY, (F) TO SUCH LENDER’S DIRECT OR
INDIRECT CONTRACTUAL COUNTERPARTIES IN SWAP AGREEMENTS OR TO LEGAL COUNSEL,
ACCOUNTANTS AND OTHER PROFESSIONAL ADVISORS TO SUCH COUNTERPARTIES AND (G)
PERMITTED BY SECTION 13.4; PROVIDED, THAT ANY RECIPIENT OF SUCH DISCLOSURE SHALL
BE ADVISED BY SUCH LENDER  OF THE CONFIDENTIALITY REQUIREMENTS HEREIN SET FORTH.

10.12   NONRELIANCE.  EACH LENDER HEREBY REPRESENTS THAT IT IS NOT RELYING ON OR
LOOKING TO ANY MARGIN STOCK (AS DEFINED IN REGULATION U OF THE BOARD OF
GOVERNORS OF THE FEDERAL RESERVE SYSTEM) FOR THE REPAYMENT OF THE REVOLVING
CREDIT LOANS PROVIDED FOR HEREIN.

10.13   DISCLOSURE.  THE BORROWER AND EACH LENDER HEREBY (A) ACKNOWLEDGE AND
AGREE THAT JPMORGAN CHASE BANK AND/OR ITS AFFILIATES FROM TIME TO TIME MAY HOLD
OTHER INVESTMENTS IN, MAKE OTHER LOANS TO OR HAVE OTHER RELATIONSHIPS WITH THE
BORROWER, AND (B) WAIVE ANY LIABILITY OF JPMORGAN CHASE BANK OR SUCH AFFILIATE
TO THE BORROWER OR ANY LENDER, RESPECTIVELY, ARISING OUT OF OR RESULTING FROM
SUCH INVESTMENTS, LOANS OR RELATIONSHIPS OTHER THAN LIABILITIES ARISING OUT OF
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF JPMORGAN CHASE BANK OR ITS
AFFILIATES.

10.14   USA PATRIOT ACT NOTIFICATION.  EACH LENDER HEREBY NOTIFIES THE BORROWER
THAT PURSUANT TO THE REQUIREMENTS OF THE USA ACT (TITLE III OF PUB. L. 107-56
(SIGNED INTO LAW ON OCTOBER 26, 2001) (THE “ACT”), IT IS REQUIRED TO OBTAIN,
VERIFY AND RECORD INFORMATION THAT IDENTIFIES THE BORROWER, WHICH INFORMATION
INCLUDES THE NAME AND ADDRESS OF THE BORROWER AND OTHER INFORMATION THAT WILL
ALLOW SUCH LENDER TO IDENTIFY THE BORROWER IN ACCORDANCE WITH THE ACT.  THE
BORROWER AGREES TO COOPERATE WITH EACH LENDER AND PROVIDE TRUE, ACCURATE AND
COMPLETE INFORMATION TO SUCH LENDER IN RESPONSE TO ANY SUCH REQUEST.

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ARTICLE XI

THE ADMINISTRATIVE AGENT

11.1   Appointment; Nature of Relationship.   JPMorgan Chase Bank is hereby
appointed by each of the Lenders as Administrative Agent (herein referred to as
the “Agent”) hereunder and under each other Facility Document, and each of the
Lenders irrevocably authorizes the Agent to act as the Administrative Agent of
such Lender with the rights and duties expressly set forth herein and in the
other Facility Documents.  The Agent agrees to act as such Administrative Agent
upon the express conditions contained in this Article XI.  Notwithstanding the
use of the defined term “Agent,” it is expressly understood and agreed that the
Agent shall not have any fiduciary responsibilities to any Lender by reason of
this Agreement or any other Facility Document and that the Agent is merely
acting as the Administrative Agent of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Facility Documents.  In its
capacity as the Lenders’ Administrative Agent, the Agent (a) does not hereby
assume any fiduciary duties to any of the Lenders, (b) is a “representative” of
the Lenders within the meaning of Section 9-105 of the Uniform Commercial Code
and (c) is acting as an independent contractor, the rights and duties of which
are limited to those expressly set forth in this Agreement and the other
Facility Documents.  Each of the Lenders hereby agrees to assert no claim
against the Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Lender hereby waives.

11.2   Powers.   The Agent shall have and may exercise such powers under the
Facility Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto. 
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Facility Documents to be taken by the Agent.

11.3   General Immunity.   Neither the Agent nor any of its directors, officers,
agents or employees shall be liable to the Borrower, the Lenders or any Lender
for any action taken or omitted to be taken by it or them hereunder or under any
other Facility Document or in connection herewith or therewith except to the
extent such action or inaction is determined in a final non-appealable judgment
by a court of competent jurisdiction to have arisen from the gross negligence or
willful misconduct of such Person.

11.4   No Responsibility for Revolving Credit Loans, Recitals, etc.   Neither
the Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify:  (a) any
statement, warranty or representation made in connection with any Facility
Document or any borrowing hereunder; (b) the performance or observance of any of
the covenants or agreements of any obligor under any Facility Document,
including, without limitation, any agreement by an obligor to furnish
information directly to each Lender; (c) the satisfaction of any condition
specified in Article V, except receipt of items required to be delivered solely
to the Agent; (d) the existence or possible existence of any Default or
Unmatured Default; (e) the validity, enforceability,

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effectiveness, sufficiency or genuineness of any Facility Document or any other
instrument or writing furnished in connection therewith; (f) the value,
sufficiency, creation, perfection or priority of any Lien in any collateral
security; or (g) the financial condition of the Borrower or any guarantor of any
of the Obligations or of any of the Borrower’s or any such guarantor’s
respective Subsidiaries.  The Agent shall have no duty to disclose to the
Lenders information that is not required to be furnished by the Borrower to the
Agent at such time, but is voluntarily furnished by the Borrower to the Agent
(either in its capacity as Agent or in its individual capacity).

11.5   Action on Instructions of Lenders.   The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Facility Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders.  The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Facility Document unless it shall be requested in writing to do so
by the Required Lenders.  The Agent shall be fully justified in failing or
refusing to take any action hereunder and under any other Facility Document
unless it shall first be indemnified to its satisfaction by the Lenders pro rata
against any and all liability, cost and expense that it may incur by reason of
taking or continuing to take any such action.

11.6   Employment of Agent and Counsel.   The Agent may execute any of its
duties as Agent hereunder and under any other Facility Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care.  The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent’s duties hereunder and under any other
Facility Document.

11.7   Reliance on Documents; Counsel.   The Agent shall be entitled to rely
upon any Revolving Credit Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Agent, which
counsel may be employees of the Agent.

11.8   Agent’s Reimbursement and Indemnification.   The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Revolving Credit Commitments and Letter of Credit Participation Amount (or, if
the Aggregate Revolving Credit Commitments and Letter of Credit Commitments have
been terminated, in proportion to their Revolving Credit Commitments and Letter
of Credit Participation Amount immediately prior to such termination) (a) for
any amounts not reimbursed by the Borrower for which the Agent is entitled to
reimbursement by the Borrower under the Facility Documents, (b) for any other
expenses incurred by the Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the

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Facility Documents (including, without limitation, for any expenses incurred by
the Agent in connection with any dispute between the Agent and any Lender or
between two or more of the Lenders) and (c) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of the Facility Documents or any other document delivered in connection
therewith or the transactions contemplated thereby (including, without
limitation, for any such amounts incurred by or asserted against the Agent in
connection with any dispute between the Agent and any Lender or between two or
more of the Lenders), or the enforcement of any of the terms of the Facility
Documents or of any such other documents; provided that (i) no Lender shall be
liable for any of the foregoing to the extent any of the foregoing is found in a
final non-appealable judgment by a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the Agent and (ii)
any indemnification required pursuant to Section 4.5(g) shall, notwithstanding
the provisions of this Section 11.8, be paid by the relevant Lender in
accordance with the provisions thereof.  The obligations of the Lenders under
this Section 11.8 shall survive payment of the Obligations and termination of
this Agreement.

11.9   Notice of Default.   The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Unmatured Default hereunder unless
the Agent has received written notice from a Lender or the Borrower referring to
this Agreement describing such Default or Unmatured Default and stating that
such notice is a “notice of default”.  In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Lenders.

11.10   Rights as a Lender.   In the event the Agent is a Lender, the Agent
shall have the same rights and powers hereunder and under any other Facility
Document with respect to its Revolving Credit Commitment, its Revolving Credit
Loans, Letter of Credit Participation Amount, and any Letters of Credit in which
it has an interest as any Lender and may exercise the same as though it were not
the Agent, and the term “Lender” or “Lenders” shall, at any time when the Agent
is a Lender, unless the context otherwise indicates, include the Agent in its
individual capacity.  The Agent and its Affiliates may accept deposits from,
lend money to, and generally engage in any kind of trust, debt, equity or other
transaction, in addition to those contemplated by this Agreement or any other
Facility Document, with the Borrower or any of its Subsidiaries in which the
Borrower or such Subsidiary is not restricted hereby from engaging with any
other Person.  The Agent, in its individual capacity, is not obligated to remain
a Lender.

11.11   Lender Credit Decision.   Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Facility
Documents.  Each Lender also acknowledges that it will, independently and
without reliance upon the Agent, the Arranger or any other Lender and based on
such documents and information as it shall deem appropriate at the time,

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continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Facility Documents.

11.12   Successor Agent.   The Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower, such resignation to be effective
upon the appointment of a successor Agent or, if no successor Agent has been
appointed, forty-five days after the retiring Agent gives notice of its
intention to resign.  The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders.  Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrower and the Lenders, a successor Agent.  If no successor
Agent shall have been so appointed by the Required Lenders within thirty days
after the resigning Agent’s giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent.  Notwithstanding the previous sentence, the Agent may at any
time without the consent of the Borrower or any Lender, appoint any of its
Affiliates which is a commercial bank as a successor Agent hereunder.  If the
Agent has resigned or been removed and no successor Agent has been appointed,
the Lenders may perform all the duties of the Agent hereunder and the Borrower
shall make all payments in respect of the Obligations to the applicable Lender
and for all other purposes shall deal directly with the Lenders.  No successor
Agent shall be deemed to be appointed hereunder until such successor Agent has
accepted the appointment.  Any such successor Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000.  Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent.  Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Facility Documents.  After the effectiveness of the resignation or
removal of an Agent, the provisions of this Article XI shall continue in effect
for the benefit of such Agent in respect of any actions taken or omitted to be
taken by it while it was acting as the Agent hereunder and under the other
Facility Documents.  In the event that there is a successor to the Agent by
merger, or the Agent assigns its duties and obligations to an Affiliate pursuant
to this Section 11.12, then the term “Prime Rate” as used in this Agreement
shall mean the prime rate, base rate or other analogous rate of the new Agent.

11.13   Agents’ Fees.   The Borrower agrees to pay to the Agent, for its own
account, the fees agreed to by the Borrower and the Agent pursuant to the Fee
Letter.

11.14   Delegation to Affiliates.   The Borrower and the Lenders agree that the
Agent may delegate any of its duties under this Agreement to any of its
Affiliates.  Any such Affiliate (and such Affiliate’s directors, officers,
agents and employees) which performs duties in connection with this Agreement
shall be entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles X and XI.

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11.15   Syndication Agent.   The Syndication Agent, Senior Managing Agent,
Managing Agent, Documentation Agent and Co-Agent shall have no right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such.  Without limiting the foregoing, the
Syndication Agent, Senior Managing Agent, Managing Agent, Documentation Agent
and Co-Agent shall not have or be deemed to have a fiduciary relationship with
any Lender.  Each Lender hereby makes the same acknowledgements with respect to
the Syndication Agent, Senior Managing Agent, Managing Agent and Co-Agent as it
makes to the Agent in Section 11.10.

ARTICLE XII

SETOFF; RATABLE PAYMENTS

12.1   Setoff.   In addition to, and without limitation of, any rights of the
Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender to
or for the credit or account of the Borrower may be offset and applied toward
the payment of the Obligations owing to such Lender, whether or not the
Obligations, or any part hereof, shall then be due.

12.2   Ratable Payments.   If any Lender, whether by setoff or otherwise, has
payment made to it upon its Revolving Credit Loans or Reimbursement Obligations
(other than payments received pursuant to Section 4.1, 4.2, 4.4 or 4.5) in a
greater proportion than that received by any other Lender, such Lender agrees,
promptly upon demand, to purchase a portion of the Revolving Credit Loans or
participation interests in Letters of Credit, as the case may be, held by the
other Lenders so that after such purchase each Lender will hold its ratable
proportion of such Revolving Credit Loans or participation interests in Letters
of Credit.  If any Lender, whether in connection with setoff or amounts which
might be subject to setoff or otherwise, receives collateral or other protection
for its Obligations or such amounts which may be subject to setoff, such Lender
agrees, promptly upon demand, to take such action necessary such that all
Lenders share in the benefits of such collateral ratably in proportion to their
Revolving Credit Loans and Letter of Credit Participation Amounts.  In case any
such payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.

ARTICLE XIII

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

13.1   Successors and Assigns.   The terms and provisions of the Facility
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (a) the
Borrower shall not have the right to assign its rights or obligations under the
Facility Documents and (b) any assignment by any Lender must be made in
compliance with Section 13.3.  Notwithstanding clause (b) of

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the foregoing sentence, any Lender may at any time, without the consent of the
Borrower or the Agent, assign all or any portion of its rights under this
Agreement and any Revolving Credit Note to a Federal Reserve Bank; provided,
however, that no such assignment to a Federal Reserve Bank shall release the
transferor Lender from its obligations hereunder.  The Agent may treat the
Person which made any Revolving Credit Loan, participated in any Letter of
Credit or holds any Revolving Credit Note as the owner thereof for all purposes
hereof unless and until such Person complies with Section 13.3 in the case of an
assignment thereof or, in the case of any other transfer, a written notice of
the transfer is filed with the Agent.  Any assignee or transferee of the rights
to any Revolving Credit Loan, Letter of Credit or Revolving Credit Note agrees
by acceptance of such transfer or assignment to be bound by all the terms and
provisions of the Facility Documents.  Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Revolving Credit Loan (whether or not
a Revolving Credit Note has been issued in evidence thereof) or any Letter of
Credit, shall be conclusive and binding on any subsequent holder, transferee or
assignee of the rights to such Revolving Credit Loan or Letter of Credit, as the
case may be.

13.2   Participations.

13.2.1   Permitted Participants; Effect.   Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time sell
to one or more banks or other entities (“Participants”) participating interests
in any Revolving Credit Loan owing to such Lender, any Revolving Credit Note
held by such Lender, any Revolving Credit Commitment of such Lender, any Letter
of Credit Participation Amount of such Lender, any interest of such Lender in
any Letters of Credit or any other interest of such Lender under the Facility
Documents.  In the event of any such sale by a Lender of participating interests
to a Participant, such Lender’s obligations under the Facility Documents shall
remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain
the owner of its Revolving Credit Loans and its interest in any Letters of
Credit and the holder of any Revolving Credit Note issued to it in evidence
thereof for all purposes under the Facility Documents, all amounts payable by
the Borrower under this Agreement shall be determined as if such Lender had not
sold such participating interests, and the Borrower and the Agent shall continue
to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under the Facility Documents.

13.2.2   Voting Rights.   Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Facility Documents, except to the extent such amendment,
modification or waiver would require the unanimous consent of the Lenders as
described in Section 9.2.

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13.2.3   Benefit of Setoff.   The Borrower agrees that each Participant shall be
deemed to have the right of setoff provided in Section 12.1 in respect of its
participating interest in amounts owing under the Facility Documents to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under the Facility Documents, provided that each Lender shall retain
the right of setoff provided in Section 12.1 with respect to the amount of
participating interests sold to each Participant.  The Lenders agree to share
with each Participant, and each Participant, by exercising the right of setoff
provided in Section 12.1, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 12.2 as if each Participant were a Lender.

13.3   Assignments.

13.3.1   Permitted Assignments.   Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or
more banks or other entities (“Purchasers”) all or any part of its rights and
obligations under the Facility Documents.  Such assignment shall be
substantially in the form of Exhibit C or in such other form as may be agreed to
by the parties thereto.  The consent of the Borrower and the Agent shall be
required prior to an assignment becoming effective with respect to a Purchaser
which is not a Lender or an Affiliate thereof; provided, however, that if a
Default has occurred and is continuing, the consent of the Borrower shall not be
required.  Such consent shall not be unreasonably withheld or delayed.  Each
such assignment shall (unless it is to a Lender or an Affiliate thereof or the
Agent otherwise consents) be in an amount not less than the lesser of
(a) $5,000,000 or (b) the remaining amount of the assigning Lender’s Revolving
Credit Commitment and/or Letter of Credit Participation Amount (calculated as at
the date of such assignment).

13.3.2   Effect; Effective Date.   Upon (a) delivery to the Agent and the
Borrower of a notice of assignment, substantially in the form attached as
Exhibit I to Exhibit C (a “Notice of Assignment”), together with any consents
required by Section 13.3.1, and (b) payment of a $3,500 fee to the Agent by the
assigning Lender or the Purchaser for processing such assignment, such
assignment shall become effective on the effective date specified in such Notice
of Assignment.  The Notice of Assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to make the purchase
of the Revolving Credit Commitment, Revolving Credit Loans and participation
interests in the Letters of Credit under the applicable assignment agreement are
“plan assets” as defined under ERISA and that the rights and interests of the
Purchaser in and under the Facility Documents will not be “plan assets” under
ERISA.  On and after the effective date of such assignment, such Purchaser shall
for all purposes be a Lender party to this Agreement and any other Facility
Document executed by or on behalf of the Lenders and shall have all the rights
and obligations of a Lender under the Facility Documents, to the same extent as
if it were an original

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party hereto, and no further consent or action by the Borrower, the Lenders or
the Agent shall be required to release the transferor Lender with respect to the
percentage of the Aggregate Revolving Credit Commitment, the Letter of Credit
Commitment, Revolving Credit Loans and the participation interests in Letters of
Credit assigned to such Purchaser.  Upon the consummation of any assignment to a
Purchaser pursuant to this Section 13.3.2, the transferor Lender, the Agent and
the Borrower shall, if the transferor Lender or the Purchaser desires that its
Revolving Credit Loans be evidenced by Revolving Credit Notes, make appropriate
arrangements so that new Revolving Credit Notes or, as appropriate, replacement
Revolving Credit Notes are issued to such transferor Lender and new Revolving
Credit Notes or, as appropriate, replacement Revolving Credit Notes, are issued
to such Purchaser, in each case in principal amounts reflecting their respective
Revolving Credit Commitments, as adjusted pursuant to such assignment.

13.4   Dissemination of Information.   The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Facility Documents by operation of law (each a “Transferee”) and
any prospective Transferee any and all information in such Lender’s possession
concerning the creditworthiness of the Borrower and its Subsidiaries; provided
that each Transferee and prospective Transferee agrees to be bound by
Section 10.11 of this Agreement.

13.5   Tax Treatment.   If any interest in any Facility Document is transferred
to any Transferee which is organized under the laws of any jurisdiction other
than the United States or any State thereof, the transferor Lender shall cause
such Transferee, concurrently with the effectiveness of such transfer, to comply
with the provisions of Section 4.5(d).

ARTICLE XIV

NOTICES

14.1   Notices.   Except as otherwise permitted by Section 2.12 with respect to
borrowing notices, all notices, requests and other communications to any party
hereunder shall be in writing (including electronic transmission, facsimile
transmission or similar writing) and shall be given to such party: (a) in the
case of the Borrower or the Agent, at its address or facsimile number set forth
on the signature pages hereof, (b) in the case of any Lender, at its address or
facsimile number set forth below its signature hereto or (c) in the case of any
party, at such other address or facsimile number as such party may hereafter
specify for the purpose by notice to the Agent and the Borrower in accordance
with the provisions of this Section 14.1.  Each such notice, request or other
communication shall be effective (i) if given by facsimile transmission, when
transmitted to the facsimile number specified in this Section and confirmation
of receipt is received, (ii) if given by mail, 72 hours after such communication
is deposited in the mails with first class postage prepaid, addressed as
aforesaid, or (iii) if given by any other means, when delivered (or, in the case
of

68

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

electronic transmission, received) at the address specified in this Section;
provided that notices to the Agent under Articles II and III shall not be
effective until received.

14.2   Change of Address.   The Borrower, the Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.

ARTICLE XV

COUNTERPARTS

This Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart.  This Agreement shall be
effective when it has been executed by the Borrower, the Agent and the Lenders
and each party has notified the Agent by facsimile transmission or telephone
that it has taken such action.

ARTICLE XVI

CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

16.1   CHOICE OF LAW.   THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET
SEQ., BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE
STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.

16.2   CONSENT TO JURISDICTION.   THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT
SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY FACILITY DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.  NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.  ANY JUDICIAL PROCEEDING BY
THE BORROWER AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR
ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY

69

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

ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY FACILITY DOCUMENT SHALL BE
BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.

16.3   WAIVER OF JURY TRIAL.   THE BORROWER, THE AGENT AND EACH LENDER HEREBY
WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY FACILITY DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.

[signature pages follow]

70

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

 

IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have executed this
Agreement as of the date first above written.

THE NAVIGATORS GROUP, INC.

 

 

 

 

 

By:

 

 

Print Name:

 

 

 

 

Title:

 

 

 

 

Address:

Reckson Executive Park

 

 

6 International Drive

 

 

Rye Brook, New York 10573

 

 

 

 

Attn:

Bradley D. Wiley

 

 

 

Telephone: (914) 933-6025

 

Fax: (914) 933-6033

S-1

 

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

 

JPMORGAN CHASE BANK, N.A.,

 

Individually and as Administrative Agent

 

 

 

 

 

By:_________________________________

 

Print Name: Thomas Kiepura

 

 

 

Title: Vice President

 

 

 

Address:

10 South Dearborn

 

 

Chicago, Illinois 60670

 

 

 

 

Attn:

Hector Varona

 

 

 

Telephone: (312) 732-7614

 

Fax: (312) 325-3060

S-2

 

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

 

LASALLE BANK NATIONAL

 

ASSOCIATION, individually and as

 

Syndication Agent

 

 

 

By:

 

 

Print Name:

 

Title:

S-3

 

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

 

CITIBANK, N.A., individually and as

 

Documentation Agent

 

 

 

By:

 

 

Print Name:

 

Title:

S-4

 

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

 

COMMERZBANK AKTIEGESELLSCHAFT,

New York and Grand Cayman Branches,

 

individually and as Documentation Agent

 

 

 

By:

 

 

Print Name:

 

Title:

 

 

 

By:

 

 

Print Name:

 

Title:

S-5

 

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

 

CREDIT SUISSE FIRST BOSTON, acting

 

through its Cayman Islands Branch,

 

individually and as Managing Agent

 

 

 

By:

 

 

Print Name:

 

Title:

S-6

 

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

 

U.S. BANK NATIONAL ASSOCIATION,

 

individually and as Co-Agent

 

 

By:

 

 

Print Name:

 

Title:

S-7

 

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

 

BROWN BROTHERS HARRIMAN &

 

CO., individually and as Co-Agent

 

 

 

By:

 

 

Print Name:

 

Title:

 

S-8

 

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

 

PRICING SCHEDULE

 

Applicable Margin

 

 

Level I Status

 

Level II Status

 

Level III Status

 

Level IV Status

Eurodollar Rate

 

0.625%

 

0.750%

 

1.000%

 

1.25%

 

 

Applicable Fee Rate

 

 

Level I Status

 

Level II Status

 

Level III Status

 

Level IV Status

Commitment Fee

 

0.09%

 

0.100%

 

0.125%

 

0.150%

Letter of Credit Participation Fee

 

0.625%

 

0.750%

 

1.000%

 

1.25%

 

For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:

“Level I Status” exists at any date if, on such date, the Borrower’s S&P Rating
is BBB+ or better or the Borrower’s Moody’s Rating is Baa1 or better.

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

“Level III Status” exists at any date if, on such date, (i) the Borrower has not
qualified for Level I Status or Level II Status and (ii) the Borrower’s S&P
Rating is BBB- or better or the Borrower’s Moody’s Rating is Baa3 or better.

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

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

The Applicable Margin and Applicable Fee Rate shall be determined in accordance
with the foregoing table based on the Borrower’s Status as determined from its
then-current Borrower’s S&P Ratings and Borrower’s Moody’s Rating; provided that
if the Borrower’s S&P Rating and the Borrower’s Moody’s Rating are not on the
same Level, the better Rating shall apply except that if the Ratings differ by
more than one Level than the Level above the lower Rating shall apply.  The
Rating in effect on any date for the purposes of this Schedule is that in effect
at the close of business on such date.  If at any time the Borrower has neither
a Borrower’s S&P Rating nor a Borrower’s Moody’s Rating, Level IV Status shall
exist.

 

 

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

 

SCHEDULE 1

COMMITMENTS

Lender

 

 

 

Revolving Credit Facility

 

Letter of Credit Facility

JPMorgan Chase Bank

 

$3,900,000

 

$35,100,000

LaSalle Bank National Association

 

$3,300,000

 

$29,700,000

Citibank, N.A.

 

$3,300,000

 

$29,700,000

Commerzbank Aktiegesellschaft —
New York and Grand Cayman Branches

 

$3,300,000

 

$29,700,000

Credit Suisse First Boston

 

$3,200,000

 

$28,800,000

U.S. Bank National Association

 

$2,000,000

 

$18,000,000

Brown Brothers Harriman & Co.

 

$1,000,000

 

$9,000,000

TOTAL:

 

$20,000,000.00

 

$180,000,000.00

 

 

 

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

 

SCHEDULE 3.1

EXISTING LETTERS OF CREDIT AS OF 02/02/07

 

 

Pounds

 

 

 

 

L/C Number

 

Outstandings

 

Applicant

 

Beneficiary

 

 

 

 

 

 

 

ST4028/96

 

£13,250,000.00

 

Navigators Corporate Underwriters Ltd

 

Society of Lloyd’s

 

 

 

 

 

 

 

ST4027/97

 

£1,500,000.00

 

Navigators Corporate Underwriters Ltd

 

Society of Lloyd’s

 

 

 

 

 

 

 

ST4033/98

 

£5,689,000.00

 

Navigators Corporate Underwriters Ltd

 

The Council of Lloyd’s

 

 

 

 

 

 

 

ST4034/98

 

£12,624,000.00

 

Millennium Underwriting Ltd

 

The Council of Lloyd’s

 

 

 

 

 

 

 

ST4029/03 / 343952

 

£12,804,000.00

 

Millennium Underwriting Ltd

 

The Society and Council of Lloyd’s

 

 

 

 

 

 

 

ST4030/03 / 343953

 

£7,462,000.00

 

Navigators Corporate Underwriters Ltd

 

The Society and Council of Lloyd’s

 

 

 

 

 

 

 

Total

 

£53,329,000.00

 

 

 

 

 

 

 

USD

 

 

 

 

L/C Nos

 

Outstandings

 

Applicant

 

Beneficiary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

321745

 

$133,645.33

 

The Navigators Group Inc

 

One Penn Plaza LLC

 

 

 

 

 

 

 

S-202661

 

$400,000.00

 

The Navigators Group Inc

 

Union Cycliste Internationale (UCI)

 

 

 

 

 

 

 

S-290392

 

$400,000.00

 

The Navigators Group Inc

 

Union Cycliste Internationale (UCI)

 

 

 

 

 

 

 

Total

 

$933,645.33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

EXHIBIT A

REVOLVING CREDIT NOTE

$

 

 

 

, 2007

 

The Navigators Group, Inc., a Delaware corporation (the “Borrower”), promises to
pay to the order of                                                           
(the “Lender”) the lesser of the principal sum of
                                 Dollars ($                ) or the aggregate
unpaid principal amount of all Revolving Credit Loans made by the Lender to the
Borrower pursuant to Article II of the Agreement (as hereinafter defined), in
immediately available funds at the main office of JPMorgan Chase Bank, N.A. in
Chicago, Illinois, as Administrative Agent, together with interest on the unpaid
principal amount hereof at the rates and on the dates set forth in the
Agreement.  The Borrower shall pay the principal of and accrued and unpaid
interest on the Revolving Credit Loans in full on the Revolving Credit
Termination Date and shall make such mandatory payments as are required to be
made under the terms of Article II of the Agreement.

The Lender shall, and is hereby authorized to, record on the schedule attached
hereto, or to otherwise record in accordance with its usual practice, the date
and amount of each Revolving Credit Loan and the date and amount of each
principal payment hereunder.

This Revolving Credit Note is one of the Revolving Credit Notes issued pursuant
to, and is entitled to the benefits of, the Third Amended and Restated Credit
Agreement, dated as of                         , 2007 (which, as it may be
amended or modified and in effect from time to time, is herein called the
“Agreement”), among the Borrower, the lenders party thereto, including the
Lender, as Administrative Agent, to which Agreement reference is hereby made for
a statement of the terms and conditions governing this Revolving Credit Note,
including the terms and conditions under which this Revolving Credit Note may be
prepaid or its maturity date accelerated.  This Revolving Credit Note is secured
pursuant to the Security Documents, as more specifically described in the
Agreement, and reference is made thereto for a statement of the terms and
provisions thereof.  Capitalized terms used herein and not otherwise defined
herein are used with the meanings attributed to them in the Agreement.

This Note shall be governed by, and construed in accordance with, the internal
laws (and not the law of conflicts) of the State of Illinois.

THE NAVIGATORS GROUP, INC.

 

 

 

 

 

By:

 

 

Print Name:

 

 

Title:

 

A-1

 

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

SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
REVOLVING CREDIT NOTE OF THE NAVIGATORS GROUP, INC.
DATED                         , 2007

 

Date

 

Principal
Amount of
Loan

 

Maturity
of Interest
Period

 

Principal
Amount
Paid

 

Unpaid
Balance

 

 

 

 

 

 

 

 

 

 

A-2

 

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

EXHIBIT B

COMPLIANCE CERTIFICATE

To:          The Lenders parties to the
                Credit Agreement Described Below

This Compliance Certificate is furnished pursuant to that certain Third Amended
and Restated Credit Agreement, dated as of __________, 2007 (as amended,
modified, renewed or extended from time to time, the “Agreement”), among The
Navigators Group, Inc. (the “Borrower”), the lenders party thereto, and JPMorgan
Chase Bank, N.A., as Administrative Agent.  Unless otherwise defined herein,
capitalized terms used in this Compliance Certificate have the meanings ascribed
thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1.             I am the duly elected ___________ of the Borrower;

2.             I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Borrower and its Subsidiaries during the
accounting period covered by the attached financial statements;

3.             The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or Unmatured Default during or at the time of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and

4.             Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower’s compliance with certain covenants of the
Agreement, all of which data and computations are true, complete and correct.

Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B-1

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

The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this ___ day of ______, ____.

 

 

 

 

 

 

B-2

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

SCHEDULE I TO COMPLIANCE CERTIFICATE

Compliance as of _________, ____ with
Provisions of Sections 7.14 and 7.23 of
the Agreement

Section 7.14 — Investments and Acquisitions

 

 

 

 

 

 

 

 

1.

Clause (d)

 

 

 

 

 

 

 

 

 

 

(a)

Required:

 

 

 

 

 

 

 

 

 

 

 

(i)

Combined Investments of the Borrower and its Subsidiaries on the date of
determination:

$                            

 

 

 

 

 

 

 

 

(ii)

10% of (a)(i):

$                            

 

 

 

 

 

 

 

(b)

Actual:

 

 

 

 

 

 

 

 

 

 

 

Investments in debt securities not rated A- or better by S&P, A-3 or better by
Moody’s or NAIC-1 or better by the NAIC but rated BBB- or better by S&P, Baa-3
or better by Moody’s or NAIC-2 or better by the NAIC on the date of
determination (or downgraded from such ratings within the last 180 days):

$                            

 

 

 

 

 

 

2.

Clause (e)

 

 

 

 

 

 

 

 

 

 

(a)

Required:

 

 

$                            

 

 

 

 

 

 

 

 

(i)

Consolidated Net Worth of Borrower and its Consolidated Subsidiaries on the date
of determination:

$                            

 

 

 

 

 

 

 

 

(ii)

5% of (a)(i)

$                            

 

 

 

 

 

 

 

(b)

Actual:

 

 

$                            

 

 

 

 

 

 

 

 

Aggregate Investment in Investments not satisfying standards set forth in clause
(b) or (d):

 

 

 

 

 

 

 

 

B-3

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

 

3.

Clause (f)

 

 

 

 

 

 

 

 

 

 

(a)

Aggregate Investments in equity securities:

 

 

 

 

 

 

 

 

 

(i)

Required:

 

 

 

 

 

 

 

 

 

 

(A)

Consolidated Net Worth of the Borrower and its Consolidated Subsidiaries on the
date of determination:

$                            

 

 

 

 

 

 

 

 

 

(B)

20% of (a)(i)(A):

 

 

 

 

 

 

 

 

 

(ii)

Actual:

 

 

 

 

 

 

 

 

 

 

 

Aggregate Investments by the Borrower in equity securities on the date of
determination:

$                            

 

 

 

 

 

 

 

(b)

Individual Investments:

 

 

 

 

 

 

 

 

 

 

(i)

Required:

 

 

 

 

 

 

 

 

 

 

(A)

Consolidated Net Worth of the Borrower and its Consolidated Subsidiaries on the
date of determination:

$                            

 

 

 

 

 

 

 

 

 

(B)

5% of (b)(i)(A):

$                            

 

 

 

 

 

 

 

 

(ii)

Actual:

 

 

 

 

 

 

 

 

 

 

 

Largest single equity securities investment by the Borrower and its Subsidiaries
on the date of determination:

$                            

 

 

 

 

 

 

4.

Clause (g)

 

 

 

 

 

 

 

 

 

 

(a)

Required:

 

 

 

 

 

 

 

 

 

 

 

(i)

Consolidated Net Worth of the Borrower and its Consolidated Subsidiaries on the
date of determination:

$                            

 

 

 

 

 

 

 

 

(ii)

5% of (a)(i):

 

 

 

 

 

 

 

(b)

Actual:

 

 

 

 

 

 

 

 

 

 

 

Other Investments on date of determination:

$                            

 

 

 

 

 

 

 

B-4

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

 

5.

Clause (h)

 

 

 

 

 

 

 

 

 

 

(a)

Required:

 

 

 

 

 

 

 

 

 

 

 

(i)

Consolidated Net Worth of the Borrower and its Consolidated Subsidiaries on the
date of determination:

 

 

 

 

 

 

$                            

 

 

(ii)

5% of (a)(i):

 

 

 

 

 

 

 

 

(b)

Actual:

 

 

 

 

 

 

 

 

 

 

 

Amount of Acquisitions from beginning of Fiscal Year through date of
determination:

$                            

 

 

 

 

 

 

 

B-5

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

 

Section 7.23.1 — Minimum Consolidated Tangible Net Worth

 

 

 

 

 

 

 

Period:

Fiscal Quarter ended _____________, _______

 

 

 

 

 

 

 

1.

Required:

 

 

$        415,000,000

 

 

 

 

 

 

2.

Actual:

 

 

 

 

 

 

 

 

 

 

 

Consolidated Tangible Net Worth (excluding the effect of unrealized gain or loss
under SFAS 115):

$                           

 

B-6

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

 

Section 7.23.2 — Minimum Statutory Surplus

 

 

 

 

 

 

 

Period:

 

Fiscal Quarter ended _____________, _______

 

 

 

 

 

 

 

1.

Required:

 

 

 

$        400,000,000

 

 

 

 

 

 

2.

Actual:

 

 

 

 

 

 

 

 

 

 

 

Aggregate Statutory Surplus of the Significant Insurance Subsidiaries:

$                            

 

 

 

 

 

 

 

 

 

 

 

 

Section 7.23.3 — Leverage Ratio

 

 

 

 

 

 

 

1.

Required:

 

 

 

                 0.30:1.0

 

 

 

 

 

 

2.

Actual:

 

 

 

 

 

 

 

 

 

 

 

(a)

Consolidated Indebtedness of the Borrower and its Consolidated Subsidiaries
(excluding letter of credit obligations incurred in the ordinary course of
business) on date of determination:

$                            

 

 

 

 

 

 

 

(b)

Consolidated Net Worth on date of determination:

$                            

 

 

 

 

 

 

 

(c)

(a) plus (b):

 

$                            

 

 

 

 

 

 

 

(d)

Ratio of (a) to (c):

 

                        :1.0

 

 

 

 

 

 

Section 7.23.4 — Minimum Risk-Based Capital

 

 

 

 

 

 

 

1.

Required:

 

 

 

                    150%

 

 

 

 

 

 

2.

Actual:

 

 

 

 

 

 

 

 

 

 

 

(a)

Total Adjusted Capital on date of determination:

$                            

 

 

 

 

 

 

 

(b)

Company Action Level RBC on date of determination:

$                            

 

 

 

 

 

 

 

(c)

Ratio of (a) to (b) (expressed as a percentage):

                          %

 

 

 

 

 

 

 

B-7

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

EXHIBIT C

ASSIGNMENT AGREEMENT

This Assignment Agreement (this “Assignment Agreement”) between               
(the “Assignor”) and                       (the “Assignee”) is dated as of
                           .  The parties hereto agree as follows:

1.             PRELIMINARY STATEMENT.  The Assignor is a party to a Credit
Agreement (which, as it may be amended, modified, renewed or extended from time
to time is herein called the “Credit Agreement”) described in Item 1 of Schedule
1 attached hereto (“Schedule 1”).  Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to them in the
Credit Agreement.

2.             ASSIGNMENT AND ASSUMPTION.  The Assignor hereby sells and assigns
to the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, an interest in and to the Assignor’s rights and obligations under the
Credit Agreement such that after giving effect to such assignment the Assignee
shall have purchased pursuant to this Assignment Agreement the percentage
interest specified in Item 3 of Schedule 1 of all outstanding rights and
obligations under the Credit Agreement relating to the loans listed in Item 3 of
Schedule 1 and the other Facility Documents.  The total of the Revolving Credit
Commitment and the Letter of Credit Participation Amount purchased by the
Assignee hereunder is set forth in Item 4 of Schedule 1.

3.             EFFECTIVE DATE.  The effective date of this Assignment Agreement
(the “Effective Date”) shall be the later of the date specified in Item 5 of
Schedule 1 or two Business Days (or such shorter period agreed to by the Agent)
after a Notice of Assignment substantially in the form of Exhibit I attached
hereto has been delivered to the Agent.  Such Notice of Assignment must include
any consents required to be delivered to the Agent by Section 13.3.1 of the
Credit Agreement.  In no event will the Effective Date occur if the payments
required to be made by the Assignee to the Assignor on the Effective Date under
Sections 4 and 5 hereof are not made on the proposed Effective Date or if any
other condition precedent agreed to by the Assignor and the Assignee has not
been satisfied.  The Assignor will notify the Assignee of the proposed Effective
Date not later than the Business Day prior to the proposed Effective Date.  As
of the Effective Date, (i) the Assignee shall have the rights and obligations of
a Lender under the Facility Documents with respect to the rights and obligations
assigned to the Assignee hereunder and (ii) the Assignor shall relinquish its
rights and be released from its corresponding obligations under the Facility
Documents with respect to the rights and obligations assigned to the Assignee
hereunder.

4.             PAYMENT OBLIGATIONS.  On and after the Effective Date, the
Assignee shall be entitled to receive from the Agent all payments of principal,
interest and fees with respect to the interest assigned hereby.  The Assignee
shall advance funds directly to the Agent with respect to all Revolving Credit
Loans and reimbursement payments made on or after the Effective Date with
respect to the interest assigned hereby.  In the event that either party hereto
receives any payment to which the other party hereto is entitled under this
Assignment Agreement, then the party receiving such amount shall promptly remit
it to the other party hereto.

C-1

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

5.             FEES PAYABLE BY THE ASSIGNEE.  The Assignee agrees to pay the
$3,500 processing fee required to be paid to the Agent in connection with this
Assignment Agreement.

6.             REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR’S
LIABILITY.  The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor.  It is
understood and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee.  Neither the Assignor
nor any of its officers, directors, employees, agents or attorneys shall be
responsible for (i) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectability of any Facility Document, including
without limitation, documents granting the Assignor and the other Lenders a
security interest in assets of the Borrower or any guarantor, (ii) any
representation, warranty or statement made in any Facility Document or in
connection with any of the Facility Documents, (iii) the financial condition or
creditworthiness of the Borrower or any guarantor, (iv) the performance of or
compliance with any of the terms or provisions of any of the Facility Documents,
(v) inspecting any of the Property, books or records of the Borrower, (vi) the
validity, enforceability, perfection, priority, condition, value or sufficiency
of any collateral securing or purporting to secure the Revolving Credit Loans or
the Reimbursement Obligations or (vii) any mistake, error of judgment, or action
taken or omitted to be taken in connection with the Revolving Credit Loans, the
Letters of Credit or the Facility Documents.

7.             REPRESENTATIONS OF THE ASSIGNEE.  The Assignee (i) confirms that
it has received a copy of the Credit Agreement, together with copies of the
financial statements requested by the Assignee and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement, (ii) agrees that it will,
independently and with reliance upon the 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 Facility Documents, (iii) appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under the
Facility Documents as are delegated to the Agent by the terms thereof, together
with such powers as are reasonably incidental thereto, (iv) agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of the Facility Documents are required to be performed by it as a Lender, (v)
agrees that its payment instructions and notice instructions are as set forth in
the attachment to Schedule 1, (vi) confirms that none of the funds, monies,
assets or other consideration being used to make the purchase and assumption
hereunder are “plan assets” as defined under ERISA and that its rights, benefits
and interests in and under the Facility Documents will not be “plan assets”
under ERISA, [and (vii) attaches the forms prescribed by the Internal Revenue
Service of the United States certifying that the Assignee is entitled to receive
payments under the Facility Documents without deduction or withholding of any
United States federal income taxes].

8.             INDEMNITY.  The Assignee agrees to indemnify and hold the
Assignor harmless against any and all losses, costs and expenses (including,
without limitation, reasonable attorneys’ fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee’s
non-performance of the obligations assumed under this Assignment Agreement.

C-2

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

9.             SUBSEQUENT ASSIGNMENTS.  After the Effective Date, the Assignee
shall have the right pursuant to Section 13.3.1 of the Credit Agreement to
assign the rights which are assigned to the Assignee hereunder to any entity or
person, provided that (i) any such subsequent assignment does not violate any of
the terms and conditions of the Facility Documents or any law, rule, regulation,
order, writ, judgment, injunction or decree and that any consent required under
the terms of the Facility Documents has been obtained and (ii) unless the prior
written consent of the Assignor is obtained, the Assignee is not hereby released
from its obligations to the Assignor hereunder, if any remain unsatisfied,
including, without limitation, its obligations under Sections 4, 5 and 8 hereof.

10.           REDUCTIONS OF AGGREGATE COMMITMENT.  If any reduction in the
Aggregate Revolving Credit Commitment or the Letter of Credit Commitment occurs
between the date of this Assignment Agreement and the Effective Date, the
percentage interest specified in Item 3 of Schedule 1 shall remain the same, but
the dollar amount purchased shall be recalculated based on the reduced Aggregate
Revolving Credit Commitment or Letter of Credit Commitment, as the case may be.

11.           ENTIRE AGREEMENT.  This Assignment Agreement and the attached
Notice of Assignment embody the entire agreement and understanding between the
parties hereto and supersede all prior agreements and understandings between the
parties hereto relating to the subject matter hereof.

12.           GOVERNING LAW.  This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Illinois.

13.           NOTICES.  Notices shall be given under this Assignment Agreement
in the manner set forth in the Credit Agreement.  For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall be
the address set forth in the attachment to Schedule 1.

[signature page follows]

C-3

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

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

 

[NAME OF ASSIGNOR]

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[NAME OF ASSIGNEE]

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

C-4

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

SCHEDULE 1

TO ASSIGNMENT AGREEMENT

1.

 

Description and Date of Credit Agreement:

 

 

 

 

 

That certain Third Amended and Restated Credit Agreement, dated as of
                    , 2007, among the Navigators Group, Inc., the financial
institutions named therein, and JPMorgan Chase Bank, N.A., as Administrative
Agent.

 

 

 

2.

 

Date of Assignment Agreement:

 

 

 

3.

 

Amounts (As of Date of Item 2 above):

 

 

 

 

 

 

 

 

 

 

 

 

Revolving Credit
Facility

 

Letter of Credit
Facility

 

 

(a)

 

Aggregate Revolving Credit Commitment (total Revolving Credit Loans)* and Letter
of Credit Commitment (total outstanding Letter of Credit Obligations)** under
Credit Agreement

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

(b)

 

Assignee’s Percentage of each Facility purchased under the Assignment Agreement
(taken to five decimal places);

 

 

%

 

%

 

 

 

 

 

 

 

 

 

 

 

(c)

 

Amount of Assigned Share in each Facility purchased under the Assignment
Agreement:

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

4.

 

Total of Assignee’s Revolving Credit Commitment (Revolving Credit Loan amount)*
and Letter of Credit Participation Amount (outstanding Letter of Credit
Obligations)** purchased hereunder:

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

5.

 

Proposed Effective Date:

 

 

 

 

 

 

C-5

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

 

Accepted and Agreed:

 

 

 

 

 

 

 

 

 

 

 

[NAME OF ASSIGNOR]

 

[NAME OF ASSIGNEE]

 

 

 

 

 

 

 

By:

 

 

 

By:

 

 

Title:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*                    If the Aggregate Revolving Credit Commitment has been
terminated, insert outstanding Revolving Credit Loans in place of Aggregate
Revolving Credit Commitment or Revolving Credit Commitment, as the case may be.

**             If the Letter of Credit Commitment has been terminated, insert
total outstanding Letter of Credit Obligations in place of Letter of Credit
Commitment or Letter of Credit Participation Amount, as the case may be.

C-6

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

 

ATTACHMENT TO SCHEDULE 1 to ASSIGNMENT AGREEMENT

ADMINISTRATIVE INFORMATION SHEET

Attach Assignor’s Administrative Information Sheet, which must
include notice addresses for the Assignor and the Assignee
(Sample form shown below)

ASSIGNOR INFORMATION

Contact:

Name:

 

 

 

Telephone No.:

 

 

Fax No.:

 

 

 

 

 

 

 

Payment Information:

Name & ABA # of Destination Bank:

 

 

 

 

 

Account Name & Number for Wire Transfer:

 

 

 

 

 

Other Instructions:

 

 

 

 

Address for Notices for Assignee:

 

 

 

 

 

 

 

 

 

ASSIGNEE INFORMATION

Credit Contact:

Name:

 

 

 

Telephone No.:

 

 

Fax No.:

 

 

 

 

 

 

 

C-7

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

Key Operations Contacts:

Booking Installation:

 

 

 

Booking Installation:

 

 

Name:

 

 

 

Name:

 

 

Telephone No.:

 

 

 

Telephone No.:

 

 

Fax No.:

 

 

 

Fax No.:

 

 

 

Payment Information:

Name & ABA # of Destination Bank:

 

 

 

 

 

Account Name & Number for Wire Transfer:

 

 

 

 

 

Other Instructions:

 

 

 

 

Address for Notices for Assignor:

 

 

 

 

 

 

 

 

 

C-8

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

 

EXHIBIT I

TO ASSIGNMENT AGREEMENT

NOTICE
OF ASSIGNMENT

                          ,           

To:                          The Navigators Group, Inc.

                                JPMorgan Chase Bank, N.A., as Administrative
Agent

From:                      [NAME OF ASSIGNOR] (the “Assignor”)

                                [NAME OF ASSIGNEE] (the “Assignee”)

1.             We refer to that certain Credit Agreement (the “Credit
Agreement”) described in Item 1 of Schedule 1 attached hereto (“Schedule 1”). 
Capitalized terms used herein and not otherwise defined herein shall have the
meanings attributed to them in the Credit Agreement.

2.             This Notice of Assignment (the “Notice of Assignment”) is given
and delivered to [the Borrower and] the Agent pursuant to Section 13.3.2 of the
Credit Agreement.

3.             The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of ___________, _____ (the “Assignment Agreement”), pursuant
to which, among other things, the Assignor has sold, assigned, delegated and
transferred to the Assignee, and the Assignee has purchased, accepted and
assumed from the Assignor the percentage interest specified in Item 3 of
Schedule 1 of all outstandings, rights and obligations under the Credit
Agreement relating to the facilities listed in Item 3 of Schedule 1.  The
Effective Date of the Assignment Agreement shall be the later of the date
specified in Item 5 of Schedule 1 or two Business Days (or such shorter period
as agreed to by the Agent) after this Notice of Assignment and any consents and
fees required by Sections 13.3.1 and 13.3.2 of the Credit Agreement have been
delivered to the Agent; provided that the Effective Date shall not occur if any
condition precedent agreed to by the Assignor and the Assignee has not been
satisfied.

4.             The Assignor and the Assignee hereby give to the Borrower and the
Agent notice of the assignment and delegation referred to herein.  The Assignor
will confer with the Agent before the date specified in Item 5 of Schedule 1 to
determine if the Assignment Agreement will become effective on such date
pursuant to Section 3 hereof, and will confer with the Agent to determine the
Effective Date pursuant to Section 3 hereof if it occurs thereafter.  The
Assignor shall notify the Agent if the Assignment Agreement does not become
effective on any proposed Effective Date as a result of the failure to satisfy
the conditions precedent agreed to by the Assignor and the Assignee.  At the
request of the Agent, the Assignor will give the Agent written confirmation of
the satisfaction of the conditions precedent.

5.             The Assignor or the Assignee shall pay to the Agent on or before
the Effective Date the processing fee of $3,500 required by Section 13.3.2 of
the Credit Agreement.

C-9

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

6.             If Revolving Credit Notes are outstanding on the Effective Date,
the Assignor and the Assignee request and direct that the Agent prepare and
cause the Borrower to execute and deliver new Revolving Credit Notes or, as
appropriate, replacement notes, to the Assignor and the Assignee.  The Assignor
and, if applicable, the Assignee each agree to deliver to the Agent for
forwarding to the Borrower the original Revolving Credit Note received by it
from the Borrower upon its receipt of a new Revolving Credit Note in the
appropriate amount.

7.             The Assignee advises the Agent that notice and payment
instructions are set forth in the attachment to Schedule 1.

8.             The Assignee hereby represents and warrants that none of the
funds, monies, assets or other consideration being used to make the purchase
pursuant to the Assignment Agreement are “plan assets” as defined under ERISA
and that its rights, benefits, and interests in and under the Facility Documents
will not be “plan assets” under ERISA.

9.             The Assignee authorizes the Agent to act as its agent under the
Facility Documents in accordance with the terms thereof.  The Assignee
acknowledges that the Agent has no duty to supply information with respect to
the Borrower or the Facility Documents to the Assignee until the Assignee
becomes a party to the Credit Agreement.

[NAME OF ASSIGNOR]

 

[NAME OF ASSIGNEE]

 

 

 

 

 

 

By:

 

 

By:

 

Title:

 

 

Title:

 

 

C-10

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

 

ACKNOWLEDGED AND CONSENTED TO BY JPMORGAN CHASE BANK, N.A., as Administrative
Agent

 

ACKNOWLEDGED AND CONSENTED TO BY THE NAVIGATORS GROUP, INC.

 

 

 

 

 

 

By:

 

 

By:

 

Title:

 

 

Title:

 

[Attach photocopy of Schedule 1 to Assignment Agreement]

 

C-11

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

 

EXHIBIT D

REIMBURSEMENT AGREEMENT EXCERPT

This Letter of Credit is issued under, and is subject to the terms and
conditions of, that certain Third Amended and Restated Credit Agreement dated as
of                 , 2007 as amended, among The Navigators Group, Inc., a
Delaware corporation, certain financial institutions and JPMorgan Chase Bank,
N.A., as administrative agent.  In the event of a conflict between the terms and
conditions of this letter of credit application and those of the Credit
Agreement, the terms and conditions of the Credit Agreement shall govern.

D-1

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

EXHIBIT E

FORM OF INCREASE REQUEST

 

, 20

 

 

 

 

 

 

 

JPMorgan Chase Bank, N.A., as Administrative Agent

under the Credit Agreement referred to below

Ladies/Gentlemen:

Please refer to the Third Amended and Restated Credit Agreement dated as of
              , 2007 among The Navigators Group, Inc., as borrower (the
“Borrower”), various financial institutions and JPMorgan Chase Bank, N.A., as
Administrative Agent (as amended, modified, extended or restated from time to
time, the “Credit Agreement”).  Capitalized terms used but not defined herein
have the respective meanings set forth in the Credit Agreement.

In accordance with Section 3.11 of the Credit Agreement, the Borrower hereby
requests an increase in the Letter of Credit Commitment from
$                    to $               .  Such increase shall be made by
[increasing the Letter of Credit Participation Amount of                    
from $              to $               ] [adding                           as a
Lender under the Credit Agreement with a Letter of Credit Participation Amount
of $____________] as set forth in the letter attached hereto.  Such increase
shall be effective three Business Days after the date that the Administrative
Agent accepts the letter attached hereto or such other date as is agreed among
the Borrower, the Administrative Agent and the [increasing] [new] Lender.

The Borrower certifies that (A) the representations and warranties contained in
Article VI of the Credit Agreement will be correct on the date of the increase
requested hereby, before and after giving effect to such increase, as though
made on and as of such date; and (B) no event has occurred and is continuing, or
shall have occurred and be continuing as of the date of the increase requested
hereby, that constitutes a Default or Unmatured Default.

 

Very truly yours,

 

 

 

 

 

THE NAVIGATORS GROUP, INC.

 

 

 

By:

 

Name:

 

Its:

E-1

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

ANNEX I TO EXHIBIT E

 

, 20

 

 

 

JPMorgan Chase Bank, N.A., as Administrative Agent

under the Credit Agreement referred to below

Ladies/Gentlemen:

Please refer to the letter dated               , 20     from The Navigators
Group, Inc. (the “Borrower”) requesting an increase in the Letter of Credit
Commitment from $               to $                 pursuant to Section 3.11 of
the Third Amended and Restated Credit Agreement dated as of               , 2007
among the Borrower, various financial institutions and JPMorgan Chase Bank,
N.A., as Administrative Agent (as amended, modified, extended or restated from
time to time, the “Credit Agreement”).  Capitalized terms used but not defined
herein have the respective meanings set forth in the Credit Agreement.

The undersigned hereby confirms that it has agreed to increase its Letter of
Credit Participation Amount under the Credit Agreement from $               to
$               effective on the date which is three Business Days after the
acceptance hereof by the Administrative Agent or on such other date as may be
agreed among the Borrower, the Administrative Agent and the undersigned.

 

Very truly yours,

 

 

 

 

 

[NAME OF INCREASING LENDER]

 

 

 

 

 

By:

 

 

Title:

 

 

Accepted as of

 

, 20

 

 

 

 

 

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

By:

 

 

Name:

 

 

Title:

 

 

E-2

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

ANNEX II TO EXHIBIT E

 

, 20

 

 

 

JPMorgan Chase Bank, N.A., as Administrative Agent

under the Credit Agreement referred to below

Ladies/Gentlemen:

Please refer to the letter dated               , 20     from The Navigators
Group, Inc. (the “Borrower”) requesting an increase in the Letter of Credit
Commitment from $               to $               pursuant to Section 3.11 of
the Third Amended and Restated Credit Agreement dated as of                  ,
2007 among the Borrower, various financial institutions and JPMorgan Chase Bank,
N.A., as Administrative Agent (as amended, modified, extended or restated from
time to time, the “Credit Agreement”).  Capitalized terms used but not defined
herein have the respective meanings set forth in the Credit Agreement.

The undersigned hereby confirms that it has agreed to become a Lender under the
Credit Agreement with a Letter of Credit Participation Amount of $              
effective on the date which is three Business Days after the acceptance hereof,
and consent hereto, by the Administrative Agent or on such other date as may be
agreed among the Borrower, the Administrative Agent and the undersigned.

The undersigned (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements delivered by the Borrower pursuant to the
Credit Agreement, and such other documents and information as it has deemed
appropriate to make its own credit and legal analysis and decision to become a
Lender under the Credit Agreement; and (b) 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 and legal decisions in taking or not taking
action under the Credit Agreement.

The undersigned represents and warrants that (i) it is duly organized and
existing and it has full power and authority to take, and has taken, all action
necessary to execute and deliver this letter and to become a Lender under the
Credit Agreement; and (ii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution and delivery of this letter and the performance of its
obligations as a Lender under the Credit Agreement.

The undersigned agrees to execute and deliver such other instruments, and take
such other actions, as the Administrative Agent may reasonably request in
connection with the transactions contemplated by this letter.

E-3

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

The following administrative details apply to the undersigned:

(A)

Notice Address:

 

 

Legal name:

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

Attention:

 

 

 

Telephone: (

 

)

 

 

 

Facsimile:

(

 

)

 

 

 

 

 

(B)

Payment Instructions:

 

Account No.:

 

 

 

At:

 

 

 

 

 

 

 

 

 

 

 

Reference:

 

 

 

Attention:

 

 

 

The undersigned acknowledges and agrees that, on the date on which the
undersigned becomes a Lender under the Credit Agreement as set forth in the
second paragraph hereof, the undersigned will be bound by the terms of the
Credit Agreement as fully and to the same extent as if the undersigned were an
original Lender under the Credit Agreement.

 

Very truly yours,

 

 

 

 

 

[NAME OF NEW LENDER]

 

 

 

 

 

By:

 

 

Title:

 

 

Accepted as of

 

, 20

 

 

 

 

 

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

E-4

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

Schedule 6.9

The Navigators Group, Inc.

SUBSIDIARIES

Subsidiary

 

State of Incorporation

 

% ownership by the Borrower or a
Subsidiary as otherwise indicated

 

 

 

 

 

Navigators Insurance Company(1)

 

New York

 

100%

Navigators Specialty Insurance Company

 

New York

 

100% Navigators Insurance Co.

Navigators Management Company, Inc.

 

New York

 

100%

Navigators Insurance Services of Texas, Inc.

 

Texas

 

100%

Navigators Special Risk, Inc.

 

Texas

 

100% Navigators Insurance Services of Texas

Navigators California Insurance Services, Inc.

 

California

 

100%

Navigators Insurance Services of Washington, Inc.

 

Washington

 

100%

Navigators Corporate Underwriters Ltd.

 

U.K.

 

100% Navigators Holdings (UK) Ltd.

Navigators Management (UK) Ltd.

 

U.K.

 

100% Navigators Holdings (UK) Ltd.

Navigators Holdings (UK) Ltd.

 

U.K.

 

100%

Navigators Underwriting Agency Ltd.

 

U.K.

 

100% Navigators Holdings (UK) Ltd.

Millennium Underwriting Ltd.

 

U.K.

 

100% Navigators Underwriting Agency Ltd.

Navigators Underwriting Ltd.

 

U.K.

 

100% Navigators Underwriting Agency Ltd.

Navigators NV

 

Belgium

 

100% Navigators Underwriting Agency Ltd.

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

(1) Significant Subsidiary

 

 

Schedule 6.9

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

Schedule 6.22

[g34381lgi001.jpg]

NAVIGATORS SPECIALTY INSURANCE COMPANY

THE FOLLOWING IS THE CURRENT STATUS OF OUR STATE LICENSES AS OF JANUARY 26,
2007:

 

 

SURPLUS LINES ELIGIBLE

 

LICENSED

 

TO BE FILED

 

ALASKA

 

NEW YORK

 

ARKANSAS

ARIZONA

 

 

 

MINNESOTA

CALIFORNIA

 

 

 

MISSISSIPPI

COLORADO

 

 

 

NEW MEXICO

CONNECTICUT

 

 

 

OKLAHOMA

DELAWARE

 

 

 

RHODE ISLAND

FLORIDA

 

 

 

VERMONT

IDAHO

 

 

 

WEST VIRGINIA

INDIANA

 

 

 

 

IOWA

 

 

 

 

KANSAS

 

 

 

 

KENTUCKY

 

 

 

 

LOUISIANA

 

 

 

 

MAINE

 

 

 

 

MARYLAND

 

 

 

 

MASSACHUSETTS

 

(1) Licensed for all major lines indicated on Schedule 6.24

MICHIGAN

 

 

 

 

MISSOURI

 

 

 

 

MONTANA

 

 

 

 

NEVADA

 

 

 

 

NEW HAMPSHIRE

 

 

 

 

NEW JERSEY

 

 

 

 

NORTH CAROLINA

 

 

 

 

NORTH DAKOTA

 

 

 

 

OHIO

 

 

 

 

OREGON

 

 

 

 

PENNSYLVANIA

 

 

 

 

SOUTH CAROLINA

 

 

 

 

TENNESSEE

 

 

 

 

TEXAS

 

 

 

 

UTAH

 

 

 

 

VIRGINIA

 

 

 

 

WISCONSIN

 

 

 

 

 

 

 

 

 

The following jurisdictions do not review eligibility of surplus lines
insurers.  The burden of determining eligibility and assuring a company’s
financial conditions, rests solely upon the licensed surplus lines broker:

ALABAMA

 

SOUTH DAKOTA

 

 

DISTRICT OF COLUMBIA

 

WASHINGTON

 

 

GEORGIA

 

WYOMING

 

 

HAWAII

 

 

 

 

ILLINOIS

 

 

 

 

NEBRASKA

 

 

 

 

 

 

 

 

 

 

One Penn Plaza, New York, NY 10119

Tel. (212) 244-2333  Fax (212) 244-4077

 

 

Schedule 6.22

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

Schedule 6.22A

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NAVIGATORS INSURANCE COMPANY

The following is the current status of our state licenses as of January 26,
2007:

 

LICENSED

 

(continued)

 

 

 

 

 

 

 

Alabama

 

New Mexico

 

 

Alaska

 

New York

 

 

Arizona

 

North Carolina

 

 

Arkansas

 

North Dakota

 

 

California

 

Ohio

 

 

Colorado

 

Oklahoma

 

 

Connecticut

 

Oregon

(1)  Licensed for all major lines indicated on Schedule 6.24

Delaware

 

Pennsylvania

 

 

District of Columbia

 

Puerto Rico

 

 

Florida

 

Rhode Island

 

 

Georgia

 

South Carolina

 

 

Hawaii

 

South Dakota

 

 

Idaho

 

Tennessee

 

 

Indiana

 

Texas

 

 

Illinois

 

Utah

 

 

Iowa

 

Vermont

 

 

Kansas

 

Virginia

 

 

Kentucky

 

Washington

 

 

Louisiana

 

West Virginia

 

 

Maine

 

Wisconsin

 

 

Maryland

 

Wyoming

 

 

Massachusetts

 

U.S. Treasury

 

 

Michigan

 

 

 

 

Minnesota

 

 

 

 

Mississippi

 

 

 

 

Missouri

 

 

 

 

Montana

 

 

 

 

Nebraska

 

 

 

 

Nevada

 

 

 

 

New Hampshire

 

 

 

 

New Jersey

 

 

 

 

 

 

 

 

 

 

 

 

 

Reckson Executive Park, 6 International Drive, Suite 100

Rye Brook, New York 10573

Tel. (914) 934-8999  Fax (914) 934-2355

 

 

 

 

 

 

 

Schedule 6.22A

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Schedule 6.23

THE NAVIGATORS GROUP, INC.

Partnerships:                         None

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 6.23

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Schedule 6.24

LINES OF BUSINESS

The Borrower and its Subsidiaries are active in the following lines of business:

Commercial Multi Peril

Ocean Marine

Inland Marine

Other Liability

Commercial Auto Liability

Auto Physical Damage

Aircraft

Surety

Reinsurance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 6.24

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Schedule 7.16

THE NAVIGATORS GROUP, INC.

Liens:                    None

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 7.16

 

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Schedule 7.21

Navigators Insurance Company

Reinsurance Guidelines

·                                          Minimum A.M. Best rating of “A-” and

·                                          Policyholders’ surplus of US $250
million

·                                          Or, if not rated by A.M. Best, an
equivalent rating from a major rating agency along with the following:

o                                         Shareholder’s funds must be in excess
of US $250 million and

o                                         Must pass a minimum of 5 ISI tests

For purpose of this Credit Agreement, the following applies, net of any
collateral from the reinsurers:

1.                                       Reinsurers constituting the lessor of
$10,000,000 or 25% of the credit risk on any reinsurance program can be outside
of the above guidelines.

2.                                       Any reinsurer, falling within the
Reinsurance Guidelines, rated A- or below cannot exceed an aggregate exposure
across all programs of 66 2/3% of the Consolidated Surplus of the Insurance
Subsidiaries.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 7.21

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