Exhibit 10.1

 

CONFORMED COPY

 

 

 

Published CUSIP Number:  G0506YAH0

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

Dated as of June 30, 2014

 

among

 

ARCH CAPITAL GROUP LTD.,
and
CERTAIN SUBSIDIARIES,
as the Borrowers,

 

BANK OF AMERICA, N.A.,
as Administrative Agent,
Fronting Bank and L/C Administrator,

 

JPMORGAN CHASE BANK, N.A.
and
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Co-Syndication Agents

 

U.S. BANK NATIONAL ASSOCIATION
and
LLOYDS BANK PLC
as Co-Documentation Agents

 

and

 

The Other Lenders Party Hereto

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
J.P. MORGAN SECURITIES LLC
and
WELLS FARGO SECURITIES, LLC
as
Joint Lead Arrangers and Joint Bookrunners

 

 

 

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TABLE OF CONTENTS

 

 

 

 

Page

ARTICLE I.

 

DEFINITIONS AND ACCOUNTING TERMS

1

 

 

 

 

 

1.01

 

Defined Terms

1

 

1.02

 

Other Interpretive Provisions

35

 

1.03

 

Accounting Terms

36

 

1.04

 

Rounding

36

 

1.05

 

Exchange Rates; Currency Equivalents

36

 

1.06

 

Additional Alternative Currencies

37

 

1.07

 

Change of Currency

38

 

1.08

 

Times of Day

38

 

1.09

 

Letter of Credit Amounts

38

 

1.10

 

Allocation of Loans and Percentages at the Effective Time

39

 

1.11

 

Existing Letters of Credit

39

 

 

 

 

ARTICLE II.

 

THE COMMITMENTS AND CREDIT EXTENSIONS

40

 

 

 

 

 

2.01

 

Commitments

40

 

2.02

 

Borrowings, Conversions and Continuations of Loans

41

 

2.03

 

Letters of Credit

44

 

2.04

 

Prepayments; Cash Collateralization

55

 

2.05

 

Termination or Reduction of Commitments

57

 

2.06

 

Repayment of Loans

57

 

2.07

 

Interest

57

 

2.08

 

Fees

58

 

2.09

 

Computation of Interest and Fees

58

 

2.10

 

Evidence of Debt

59

 

2.11

 

Payments Generally; Administrative Agent’s Clawback

59

 

2.12

 

Sharing of Payments by Lenders

61

 

2.13

 

Designated Subsidiary Borrowers

62

 

2.14

 

Increase in Commitments

64

 

2.15

 

Cash Collateral

66

 

2.16

 

Defaulting Lenders

67

 

 

 

 

ARTICLE III.

 

TAXES, YIELD PROTECTION AND ILLEGALITY

69

 

 

 

 

 

3.01

 

Taxes

69

 

3.02

 

Illegality

73

 

3.03

 

Inability to Determine Rates

74

 

3.04

 

Increased Costs; Reserves on Eurocurrency Rate Loans

74

 

3.05

 

Compensation for Losses

76

 

3.06

 

Mitigation Obligations; Replacement of Lenders

77

 

3.07

 

Survival

78

 

 

 

 

ARTICLE IV.

 

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

78

 

 

 

 

 

4.01

 

Conditions of Initial Credit Extension

78

 

4.02

 

Conditions to all Credit Extensions

80

 

ii

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Page

ARTICLE V.

 

REPRESENTATIONS AND WARRANTIES

82

 

 

 

 

 

5.01

 

Corporate Status

82

 

5.02

 

Corporate Power and Authority

82

 

5.03

 

No Contravention of Laws, Agreements or Organizational Documents

83

 

5.04

 

Litigation

83

 

5.05

 

Use of Proceeds; Margin Regulations

83

 

5.06

 

Approvals

83

 

5.07

 

Investment Company Act

84

 

5.08

 

True and Complete Disclosure

84

 

5.09

 

Financial Condition; Financial Statements

84

 

5.10

 

Tax Returns and Payments

85

 

5.11

 

Compliance with ERISA

85

 

5.12

 

Subsidiaries

85

 

5.13

 

Compliance with Statutes, Etc.

86

 

5.14

 

Insurance Licenses

86

 

5.15

 

Insurance Business

87

 

5.16

 

Security Documents

87

 

5.17

 

No Section 32 Direction

87

 

5.18

 

Taxpayer Identification Number

87

 

5.19

 

Representations as to Foreign Jurisdiction Matters

87

 

5.20

 

OFAC

88

 

5.21

 

Anti-Corruption Laws

88

 

 

 

 

ARTICLE VI.

 

AFFIRMATIVE COVENANTS

88

 

 

 

 

 

6.01

 

Information Covenants

88

 

6.02

 

Books, Records and Inspections

92

 

6.03

 

Insurance

93

 

6.04

 

Payment of Taxes

93

 

6.05

 

Maintenance of Existence

93

 

6.06

 

Compliance with Statutes, Etc.

93

 

6.07

 

ERISA

94

 

6.08

 

Maintenance of Property

95

 

6.09

 

Maintenance of Licenses and Permits

95

 

6.10

 

Financial Strength Ratings

95

 

6.11

 

End of Fiscal Years; Fiscal Quarters

95

 

6.12

 

Borrowing Base Requirement

95

 

6.13

 

Further Assurances

95

 

 

 

 

ARTICLE VII.

 

NEGATIVE COVENANTS

95

 

 

 

 

 

7.01

 

Changes in Business and Investments

96

 

7.02

 

Consolidations, Mergers, Sales of Assets and Acquisitions

96

 

7.03

 

Liens

97

 

7.04

 

Indebtedness

100

 

7.05

 

Issuance of Stock

100

 

7.06

 

Dissolution

100

 

7.07

 

Restricted Payments

100

 

7.08

 

Transactions with Affiliates

100

 

7.09

 

Maximum Parent Borrower Leverage Ratio

101

 

7.10

 

Minimum Consolidated Tangible Net Worth

101

 

iii

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Page

 

7.11

 

Limitation on Certain Restrictions on Subsidiaries

101

 

7.12

 

Private Act

102

 

7.13

 

Sanctions

102

 

7.14

 

Anti-Corruption Laws

103

 

 

 

 

ARTICLE VIII.

 

EVENTS OF DEFAULT AND REMEDIES

103

 

 

 

 

 

 

8.01

 

Events of Default

103

 

8.02

 

Remedies Upon Event of Default

105

 

8.03

 

Application of Funds

106

 

 

 

 

ARTICLE IX.

 

ADMINISTRATIVE AGENT

107

 

 

 

 

 

9.01

 

Appointment and Authority

107

 

9.02

 

Rights as a Lender

108

 

9.03

 

Exculpatory Provisions

108

 

9.04

 

Reliance by Administrative Agent

109

 

9.05

 

Delegation of Duties

109

 

9.06

 

Resignation of Administrative Agent

109

 

9.07

 

Non-Reliance on Administrative Agent and Other Lenders

110

 

9.08

 

No Other Duties, Etc.

111

 

9.09

 

Administrative Agent May File Proofs of Claim

111

 

9.10

 

Collateral Matters

112

 

 

 

 

ARTICLE X.

 

MISCELLANEOUS

112

 

 

 

 

 

10.01

 

Amendments, Etc.

112

 

10.02

 

Notices; Effectiveness; Electronic Communication

114

 

10.03

 

No Waiver; Cumulative Remedies; Enforcement

116

 

10.04

 

Expenses; Indemnity; Damage Waiver

117

 

10.05

 

Payments Set Aside

119

 

10.06

 

Successors and Assigns

119

 

10.07

 

Treatment of Certain Information; Confidentiality

124

 

10.08

 

Right of Setoff

125

 

10.09

 

Interest Rate Limitation

126

 

10.10

 

Counterparts; Integration; Effectiveness

126

 

10.11

 

Survival of Representations and Warranties

126

 

10.12

 

Severability

126

 

10.13

 

Replacement of Lenders

127

 

10.14

 

Governing Law; Jurisdiction; Etc.

127

 

10.15

 

Waiver of Jury Trial

129

 

10.16

 

No Advisory or Fiduciary Responsibility

129

 

10.17

 

Electronic Execution of Assignments and Certain Other Documents

130

 

10.18

 

USA PATRIOT Act

130

 

10.19

 

Time of the Essence

130

 

10.20

 

Judgment Currency

130

 

10.21

 

Amendment and Restatement

131

 

iv

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Page

 

 

SCHEDULES

 

 

 

 

 

 

1.01(a)

Continuing Letter of Credit

 

 

1.01(c)

Facility-wide Liability Percentage

 

 

2.01

Commitments and Applicable Percentages

 

 

5.12

Subsidiaries

 

 

5.14

Insurance Licenses

 

 

7.02(b)

Consolidations, Mergers, Sale of Assets, Acquisitions

 

 

7.03

Existing Liens

 

 

7.04

Existing Indebtedness

 

 

7.05

Issuance of Stock

 

 

10.02

Administrative Agent’s Office; Certain Addresses for Notices

 

 

 

 

 

EXHIBITS

 

 

 

 

 

 

A

Form of Loan Notice

 

 

B

Form of Note

 

 

C

Form of Compliance Certificate

 

 

D-1

Form of Assignment and Assumption

 

 

D-2

Form of Administrative Questionnaire

 

 

E

Form of Several Letter of Credit

 

 

F

Copy of Security Agreement

 

 

G

Form of Borrowing Base Certificate

 

 

H

Form of Designated Subsidiary Borrower Request and Assumption Agreement

 

 

I

Form of Designated Subsidiary Borrower Notice

 

 

J

Form of Confirmation

 

 

K

Copy of ACUS Guaranty

 

 

L

Copy of Parent Guaranty

 

 

v

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CREDIT AGREEMENT

 

This AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”) is entered into as of
June 30, 2014 among ARCH CAPITAL GROUP LTD., a Bermuda company (“Parent
Borrower”), and certain Subsidiaries of the Parent Borrower party hereto on the
date hereof or pursuant to Section 2.13 (each a “Designated Subsidiary Borrower”
and, together with the Parent Borrower, the “Borrowers” and, each a “Borrower”),
each lender from time to time party hereto (collectively, the “Lenders” and
individually, a “Lender”), and Bank of America, N.A., as Administrative Agent,
L/C Administrator and a Fronting Bank.

 

WHEREAS, the Parent Borrower, certain Designated Subsidiary Borrowers, various
lenders party thereto and the Administrative Agent are parties to a credit
agreement dated as of August 18, 2011 (as amended to date, the “Existing Credit
Agreement”);

 

WHEREAS, the parties hereto have agreed to amend and restate the Existing Credit
Agreement to make available to the Borrowers a revolving credit facility, and
the Lenders are willing to do so on the terms and conditions set forth herein;
and

 

WHEREAS, the parties hereto intend that this Agreement and the documents
executed in connection herewith not effect a novation of the obligations of the
Borrowers under the Existing Credit Agreement, but merely a restatement of and,
where applicable, an amendment to the terms governing such obligations;

 

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree the Existing Credit Agreement is hereby
amended to state in its entirety as follows:

 

ARTICLE I.  DEFINITIONS AND ACCOUNTING TERMS

 

1.01                        Defined Terms.  As used in this Agreement, the
following terms shall have the meanings set forth below:

 

“Account Bank” means any “bank” within the meaning of Section 9-102(a)(8) of the
UCC at which any deposit account constituting a Collateral Account is held,
which shall be (a) located in the United States and (b) reasonably acceptable to
the Administrative Agent.

 

“Acquired Indebtedness” means Indebtedness of the Parent Borrower or a
Subsidiary of the Parent Borrower acquired pursuant to an acquisition not
prohibited under this Agreement (or Indebtedness assumed at the time of such
acquisition of an asset securing such Indebtedness); provided that such
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such acquisition.

 

“ACUS” means Arch Capital Group (U.S.) Inc., a Delaware corporation.

 

“ACUS Guaranty” means the guaranty executed by ACUS guaranteeing the Obligations
of the Parent Borrower hereunder, a copy of which is attached as Exhibit K.

 

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

 

“Administrative Agent” means Bank of America in its capacity as administrative
agent under any of the Credit Documents, or any successor administrative agent.

 

“Administrative Agent’s Office” means, with respect to any currency, the
Administrative Agent’s address and, as appropriate, account as set forth on
Schedule 10.02 with respect to such currency, or such other address or account
with respect to such currency as the Administrative Agent may from time to time
notify to the Parent Borrower and the Lenders.

 

“Administrative Questionnaire” means an Administrative Questionnaire in
substantially the form of Exhibit D-2 or any other form approved by the
Administrative Agent.

 

“Advance Rate” means, for Cash or any category of obligation or investment
specified below in the column entitled “Cash and Eligible Securities” (other
than Cash, the “Eligible Securities”), the percentage set forth opposite such
category of Cash or Eligible Securities below in the column entitled “Advance
Rate” and, in each case, subject to the term to maturity criteria set forth
therein:

 

Cash and Eligible Securities:

 

Advance Rate:

 

 

 

Cash:

 

Dollars and any overnight or other investment money market funds of the
Financial Institution (or an Affiliate of such Financial Institution) at which a
Collateral Account is held.

 

 

 

100%

 

 

 

Time Deposits, CDs, Money Market Deposits and Money Market Mutual Funds:

 

Time deposits, certificates of deposit and money market deposits, denominated in
Dollars, of any commercial bank incorporated in the United States with a rating
of at least (i) AA- from S&P or (ii) Aa3 from Moody’s and maturing within two
years from the date of determination. Money market mutual funds with
institutions not affiliated with the Lenders with same-day liquidity and with a
rating of (i) AAA from S&P or (ii) Aaa from Moody’s or (iii) “1” by the NAIC
Securities Valuation Office.

 

 

 

90%

 

 

 

U.S. Government Securities:

 

Securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof).

 

With maturities of (x) two years or less from the date of determination, 95%,
(y) more than two years to ten years from the date of determination, 90% and
(z) more than ten years from the

 

2

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Cash and Eligible Securities:

 

Advance Rate:

 

 

 

 

 

date of determination, 85%

 

 

 

Investment Grade Municipal Bonds Level I:

 

Municipal bonds maturing within eleven years from the date of determination
rated at least (i) AAA from S&P or (ii) Aaa from Moody’s.

 

 

 

90%

 

 

 

Investment Grade Municipal Bonds Level II:

 

Municipal bonds maturing within eleven years from the date of determination
rated (a) at least (i) A- from S&P or (ii) A3 from Moody’s.

 

 

 

85%

 

 

 

Investment Grade Nonconvertible Corporate Bonds Level I:

 

Nonconvertible corporate bonds denominated in Dollars or Alternative Currencies
which are traded publicly maturing within eleven years from the date of
determination rated (a) at least (i) AA- from S&P or (ii) Aa3 from Moody’s or
(b) in the case of corporate bonds rated solely by DBRS, at least AA low from
DBRS.

 

With maturities of (x) two years or less from the date of determination, 90% and
(y) more than two years to eleven years from the date of determination, 85%

 

 

 

Investment Grade Nonconvertible Corporate Bonds Level II:

 

Nonconvertible corporate bonds denominated in Dollars or Alternative Currencies
which are traded publicly, maturing within eleven years from the date of
determination rated (a) at least (i) A- from S&P or (ii) A3 from Moody’s or
(b) in the case of corporate bonds rated solely by DBRS, at least A low from
DBRS.

 

 

 

80%

 

 

 

Commercial Paper:

 

Commercial paper issued by any entity organized in the United States and
denominated in Dollars and maturing not more than one year after the date of
determination rated at least (i) A-1 or the equivalent thereof by S&P or
(ii) P-1 or the equivalent thereof by Moody’s.

 

 

 

90%

 

 

 

Agency Securities:

 

(i) Single-class mortgage participation certificates in book-entry form and
denominated in Dollars backed by single-family residential mortgage loans, the
full and timely payment of interest at the applicable certificate rate and the
ultimate collection of principal of which are guaranteed by the Federal Home
Loan Mortgage Corporation (excluding REMIC or other multi-class pass-through
certificates, collateralized mortgage obligations, pass-through certificates
backed by adjustable rate mortgages, securities paying interest or principal
only and similar derivative securities);

 

With a weighted average life from the date of determination of (x) two years or
less from the date of determination, 95%, (y) more than two years and less than
ten years from the date

 

3

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Cash and Eligible Securities:

 

Advance Rate:

 

 

 

(ii) single-class mortgage pass-through certificates in book-entry form and
denominated in Dollars backed by single-family residential mortgage loans, the
full and timely payment of interest at the applicable certificate rate and
ultimate collection of principal of which are guaranteed by the Federal National
Mortgage Association (excluding REMIC or other multi-class pass-through
certificates, pass-through certificates backed by adjustable rate mortgages,
collateralized mortgage obligations, securities paying interest or principal
only and similar derivative securities); and (iii) single-class fully modified
pass-through certificates in book-entry form and denominated in Dollars backed
by single-family residential mortgage loans, the full and timely payment of
principal and interest of which is guaranteed by the Government National
Mortgage Association (excluding REMIC or other multi-class pass-through
certificates, collateralized mortgage obligations, pass-through certificates
backed by adjustable rate mortgages, securities paying interest or principal
only and similar derivatives securities), in each case rated at least (i) AA- or
the equivalent thereof by S&P and (ii) Aa3 or the equivalent thereof by Moody’s.

 

of determination, 90% and (z) more than ten years from the date of
determination, 85%

 

 

 

Asset-Backed Securities:

 

Asset-backed securities denominated in Dollars rated at least (i) AAA by S&P and
(ii) Aaa by Moody’s, provided that (x) such securities are backed by credit card
receivables, automobile loans, commercial mortgages or utility charges (as in
Rate Reduction Bonds) and have a weighted average life from the date of
determination of 10 years or less and (y) asset-backed securities will not
constitute Eligible Securities if they are certificated securities that cannot
be paid or delivered by book entry (and all asset-backed securities issued by an
issuer incorporated in the United States of America must be capable of
settlement through DTC).

 

 

 

85%

 

 

 

Supranational Securities

 

Securities issued or backed by the International Bank for Reconstruction &
Development, European Bank for Reconstruction & Development, Inter American
Development Bank, International Monetary Fund, European Investment Bank, Asian
Development Bank, African Development Bank and Nordic Development Bank as long
as the credit ratings are at or above AAA by S&P and Aaa by Moody’s.

 

With maturities of (x) two years or less from the date of determination, 95%,
(y) more than two years to ten years from the date of determination, 90% and
(z) more than ten years from the date of determination, 80%

 

 

 

OECD Government Securities

 

With maturities of

 

4

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Cash and Eligible Securities:

 

Advance Rate:

 

 

 

Securities issued or backed by the Government of any member of the Organization
for Economic Cooperation and Development which has the credit ratings of at
least AA- by S&P and Aa3 by Moody’s.

 

(x) two years or less from the date of determination, 95%, (y) more than two
years to ten years from the date of determination, 90% and (z) more than ten
years from the date of determination, 80%

 

 

 

Other Securities:

 

All other cash, investments, obligations or securities

 

 

 

0%

 

Notwithstanding the foregoing, (A) the value of Eligible Securities at any time
shall be determined based on the Borrowing Base Certificate then most recently
delivered, (B) if any single corporate issuer (or any Affiliate thereof)
represents more than 10% of the aggregate market value of all Cash and Eligible
Securities comprising the aggregate amount of all Borrowing Bases, the excess
over 10% shall be excluded (with such exclusion being allocated in equal parts
to each Borrowing Base at such time), (C) the weighted average rating of all
Agency Securities (as described above) constituting Eligible Securities shall at
all times be at least (x) AA+ from S&P or (y) Aa1 from Moody’s, (D)  if
Asset-Backed Securities (as described above) (including CMBS) represent more
than 20% of the aggregate market value of all Cash and Eligible Securities
comprising the aggregate amount of all Borrowing Bases, the excess over 20%
shall be excluded (with such exclusion being allocated in equal parts to each
Borrowing Base at such time), (E) if Asset-Backed Securities constituting CMBS
represent more than 10% of the aggregate market value of all Cash and Eligible
Securities of the aggregate amount of all Borrowing Bases, the excess over 10%
shall be excluded (with such exclusion being allocated in equal parts to each
Borrowing Base at such time), (F) if OECD Government Securities (as described
above) represent more than 20% of the aggregate market value of all Cash and
Eligible Securities comprising the aggregate amount of all Borrowing Bases, the
excess over 20% shall be excluded (with such exclusion being allocated in equal
parts to each Borrowing Base at such time), and (G) if Supranational Securities
(as described above) represent more than 20% of the aggregate market value of
all Cash and Eligible Securities comprising the aggregate amount of all
Borrowing Bases, the excess over 20% shall be excluded (with such exclusion
being allocated in equal parts to each Borrowing Base at such time).  With
respect to any Eligible Securities denominated in a currency other than Dollars,
the Dollar equivalent thereof (using a method agreed upon by the Parent Borrower
and the Administrative Agent) shall be used for purposes of determining the
value of such Eligible Securities.

 

5

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

 

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.

 

“Aggregate Commitments” means the Tranche A Commitments and the Tranche B
Commitments of all Lenders.

 

“Agreement” has the meaning specified in the introductory paragraph hereto.

 

“AIC” means Arch Insurance Company, a corporation organized under the laws of
Missouri.

 

“Alternative Currency” means each of Canadian Dollars, Euro, Sterling, Yen,
Australian Dollars, Rand and each other currency (other than Dollars) that is
approved in accordance with Section 1.06.

 

“Alternative Currency Equivalent” means, at any time, with respect to any amount
denominated in Dollars, the equivalent amount thereof in the applicable
Alternative Currency as determined by the Administrative Agent or a Fronting
Bank, as the case may be, at such time on the basis of the Spot Rate (determined
in respect of the most recent Revaluation Date) for the purchase of such
Alternative Currency with Dollars.

 

“Applicable Insurance Regulatory Authority” means, when used with respect to any
Regulated Insurance Company, (x) the insurance department or similar
administrative authority or agency located in each state or jurisdiction
(foreign or domestic) in which such Regulated Insurance Company is domiciled or
(y) to the extent asserting regulatory jurisdiction over such Regulated
Insurance Company, the insurance department, authority or agency in each state
or jurisdiction (foreign or domestic) in which such Regulated Insurance Company
is licensed, and shall include any Federal or national insurance regulatory
department, authority or agency that may be created and that asserts regulatory
jurisdiction over such Regulated Insurance Company.

 

“Applicable Issuing Party” means (a) in the case of any Fronted Letter of
Credit, the Fronting Bank who issued such Fronted Letter of Credit and (b) in
the case of any Several Letter of Credit, the L/C Administrator, as agent of the
applicable Lenders, shown as “Letter of Credit Agent” or “Agent” on such Several
Letter of Credit.

 

“Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate
Commitments, Tranche A Commitments or Tranche B Commitments, as applicable,
represented by such Lender’s relevant Commitment at such time, subject to
adjustment as provided in Section 2.16.  If the commitment of each Lender to
make Loans and issue Several Letters of Credit and the obligation of the
Fronting Banks to issue Fronted Letters of Credit have been terminated pursuant
to Section 8.02 or if the Aggregate Commitments have expired, then the
Applicable Percentage of each Lender shall be determined based on the Applicable
Percentage of such Lender most recently in effect, giving effect to any
subsequent assignments.  The initial Applicable Percentage of each Lender is set

 

6

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

 

forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable. 
The Applicable Percentage “of” a particular amount may also refer to the value
obtained by multiplying the Applicable Percentage times such amount.  All
funding, payment and applications of Collateral shall be based on such Lender’s
Tranche A Commitment or Tranche B Commitment, as the case may be.

 

“Applicable Rate” means, from time to time, the following percentages per annum
and, in the case of the Tranche B Commitments and Credit Extensions, based upon
the Parent Debt Rating as set forth below:

 

Applicable Rate for Tranche A Commitments and Credit Extensions

 

Letter of Credit Fee

 

0.40

%

Commitment Fee

 

0.125

%

 

Applicable Rate for Tranche B Commitments and Credit Extensions

 

Parent Debt Rating

 

Pricing
Level 1:
> A+/A1

 

Pricing
Level 2:
A/A2

 

Pricing
Level 3:
A-/A3

 

Pricing
Level 4:
BBB+/Baa1

 

Pricing
Level 5:
<BBB/Baa2

 

Letter of Credit Fee and Applicable Margin for Eurocurrency Rate Loans

 

0.875

%

1.000

%

1.125

%

1.375

%

1.625

%

Applicable Margin for Base Rate Loans

 

0.00

%

0.00

%

0.125

%

0.375

%

0.625

%

Commitment Fee

 

0.100

%

0.125

%

0.150

%

0.175

%

0.250

%

 

“Parent Debt Rating” means, as of any date of determination, the rating as
determined by either S&P or Moody’s (collectively, the “Debt Ratings”) of the
Parent Borrower’s non-credit-enhanced, senior unsecured long-term debt; provided
that (a) if the respective Debt Ratings issued by the foregoing rating agencies
differ by one level, then the Pricing Level for the higher of such Debt Ratings
shall apply (with the Debt Rating for Pricing Level 1 being the highest and the
Debt Rating for Pricing Level 5 being the lowest); (b) if there is a split in
Debt Ratings of more than one level, then the Pricing Level that is one level
lower than the Pricing Level of the higher Debt Rating shall apply; (c) if the
Parent Borrower has only one Debt Rating, the Pricing Level of such Debt Rating
shall apply; and (d) if the Parent Borrower does not have any Debt Rating,
Pricing Level 5 shall apply.

 

Initially, the Applicable Rate shall be determined based upon the Debt Rating in
effect on the Closing Date.  Thereafter, each change in the Applicable Rate
resulting from a publicly announced change in the Debt Rating shall be
effective, in the case of an upgrade, during the period

 

7

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commencing on the date of delivery by the Parent Borrower to the Administrative
Agent of notice thereof pursuant to Section 6.01(e) and ending on the date
immediately preceding the effective date of the next such change and, in the
case of a downgrade, during the period commencing on the date of the public
announcement thereof and ending on the date immediately preceding the effective
date of the next such change.

 

“Applicable Time” means, with respect to any borrowings and payments in any
Alternative Currency, the local time in the place of settlement for such
Alternative Currency as may be determined by the Administrative Agent or a
Fronting Bank, as the case may be, to be necessary for timely settlement on the
relevant date in accordance with normal banking procedures in the place of
payment.

 

“Applicant Borrower” has the meaning specified in Section 2.13(a).

 

“ARC” means Arch Reinsurance Company, a corporation organized under the laws of
Nebraska.

 

“Arch Europe” means Arch Insurance Company (Europe) Limited, a private company
limited by shares incorporated under the laws of England and Wales.

 

“AREUL” means Arch Reinsurance Europe Underwriting Limited, a corporation
organized under the laws of Ireland.

 

“ARL” means Arch Reinsurance Ltd., a corporation organized under the laws of
Bermuda.

 

“Arrangers” means Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P.
Morgan Securities LLC and Wells Fargo Securities, LLC, in their capacities as
joint lead arrangers and joint book managers.

 

“ASIC” means Arch Specialty Insurance Company, a corporation organized under the
laws of Nebraska.

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 10.06(b)), and accepted by the Administrative Agent, in substantially
the form of Exhibit D-1 or any other form approved by the Administrative Agent.

 

“Australian Dollar” means lawful money of Australia.

 

“Availability Period” means the period from and including the Closing Date to
the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.05, (c) the date of termination of
the commitment of each Lender to make Loans and of the obligation of the L/C
Issuers to make L/C Credit Extensions pursuant to Section 8.02, (d) with respect
to the Tranche A Commitment, the date of termination of the Tranche A
Commitments pursuant to Section 2.05, and (e) with respect to the Tranche B
Commitment, the date of

 

8

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

 

termination of the Tranche B Commitments pursuant to Section 2.05. “Bank of
America” means Bank of America, N.A. and its successors.

 

“Base Rate” means for any day a fluctuating rate per annum equal to the highest
of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect
for such day as publicly announced from time to time by Bank of America as its
“prime rate,” and (c) the one-month Eurocurrency Rate for Dollars plus 1.00%. 
The “prime rate” is a rate set by Bank of America based upon various factors
including Bank of America’s costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate.  Any change
in such prime rate announced by Bank of America shall take effect at the opening
of business on the day specified in the public announcement of such change.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.  All
Base Rate Loans shall be denominated in Dollars.

 

“Bermuda Companies Law” means the Companies Act 1981 of Bermuda and other
relevant Bermuda law.

 

“Borrower” and “Borrowers” each has the meaning specified in the introductory
paragraph hereto.

 

“Borrower Materials” has the meaning specified in Section 6.01.

 

“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type
and, in the case of Eurocurrency Rate Loans, having the same Interest Period
made by each of the Tranche B Lenders pursuant to Section 2.01(b).

 

“Borrowing Base” means, at any time, and in respect of each Designated
Subsidiary Borrower, the aggregate amount of Cash and Eligible Securities held
in the Collateral Accounts applicable to such Designated Subsidiary Borrower
under the Security Agreement at such time multiplied in each case by the
respective Advance Rates for Cash and such Eligible Securities; provided that
all Cash and Eligible Securities in respect of any Borrowing Base shall only be
included in such Borrowing Base to the extent same are subject to a first
priority perfected security interest in favor of the Administrative Agent , for
the benefit of itself, the Lenders and the Fronting Banks, pursuant to the
Security Documents.

 

“Borrowing Base Certificate” means a certificate substantially in the form of
Exhibit G with such changes therein as the Administrative Agent may reasonably
request from time to time.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office with respect to
Obligations denominated in Dollars is located and:

 

9

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

 

(a)                                 if such day relates to any interest rate
settings as to a Eurocurrency Rate Loan denominated in Dollars, any fundings,
disbursements, settlements and payments in Dollars in respect of any such
Eurocurrency Rate Loan, or any other dealings in Dollars to be carried out
pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means
any such day on which dealings in deposits in Dollars are conducted by and
between banks in the London interbank Eurocurrency market;

 

(b)                                 if such day relates to any interest rate
settings as to a Eurocurrency Rate Loan denominated in Euro, any fundings,
disbursements, settlements and payments in Euro in respect of any such
Eurocurrency Rate Loan or a Letter of Credit denominated in Euro, or any other
dealings in Euro to be carried out pursuant to this Agreement in respect of any
such Eurocurrency Rate Loan, means a TARGET Day; and

 

(c)                                  if such day relates to any fundings,
disbursements, settlements and payments in a currency other than Dollars or Euro
in respect of a Letter of Credit denominated in a currency other than Dollars or
Euro, or any other dealings in any currency other than Dollars or Euro to be
carried out pursuant to this Agreement in respect of any such Letter of Credit
(other than any interest rate settings), means any such day on which banks are
open for foreign exchange business in the principal financial center of the
country of such currency.

 

“Canadian Dollar” and “C$” mean lawful money of Canada.

 

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

 

“Cash” means Dollars and any overnight or other investment money market funds of
the Financial Institution (or an Affiliate of such Financial Institution) at
which a Collateral Account is held.

 

“Cash Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the Administrative Agent, the Fronting
Banks and the Lenders, as collateral for L/C Obligations or obligations of the
Fronting Banks or Lenders to fund or fund participations in respect of Letters
of Credit, cash or deposit account balances or, if the applicable Fronting Bank
shall agree in its sole discretion, other credit support, in each case pursuant
to documentation in form and substance satisfactory to (a) the Administrative
Agent and (b) the applicable Fronting Bank. “Cash Collateral” shall have a
meaning correlative to the foregoing and shall include the proceeds of such cash
collateral and other credit support.

 

“Cash Equivalents” means, as to any Person, (i) securities issued or directly
and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided

 

10

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

 

that the full faith and credit of the United States is pledged in support
thereof) having maturities of not more than one year from the date of
acquisition, (ii) time deposits and certificates of deposit, denominated in
Dollars, of any commercial bank having, or which is the principal banking
subsidiary of a bank holding company organized under the laws of the United
States, any State thereof, the District of Columbia or any foreign jurisdiction
having, capital, surplus and undivided profits aggregating in excess of
$200,000,000, with maturities of not more than one year from the date of
acquisition by such Person, (iii) commercial paper denominated in Dollars rated
at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody’s and in each case maturing not more than one year after the
date of acquisition by such Person, and (iv) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (iii) above.

 

“Change in Control” means (a) any Person or group of Persons (as used in
Sections 13 and 14 of the Securities Exchange Act of 1934 and the rules and
regulations thereunder) shall have become the beneficial owner (as defined in
rules promulgated by the SEC) of more than 50% of the voting securities of the
Parent Borrower, (b) the occupation of a majority of the seats (other than
vacant seats) of the board of directors of the Parent Borrower by Persons who
are neither (i) nominated by the board of directors of the Parent Borrower nor
(ii) appointed by directors so nominated or (c) the Parent Borrower shall cease
to own, directly or indirectly, 100% of the Equity Interests of any Designated
Subsidiary Borrower.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States
regulatory authorities, in each case pursuant to Basel III, shall in each case
be deemed to be a “Change in Law,” regardless of the date enacted, adopted or
issued.

 

“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 10.01.

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateral” means, with respect to any Borrower, all property and assets with
respect to which a security interest is purported to be granted in favor of the
Administrative Agent pursuant to a Security Agreement executed by such Borrower.

 

11

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

 

“Collateral Account” means, with respect to any Borrower, any deposit account or
securities account at a Financial Institution as to which such Financial
Institution, such Borrower and the Administrative Agent have entered into a
Control Agreement.

 

“Commitment” means, as to each Lender, its Tranche A Commitment and its Tranche
B Commitment.

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C.

 

“Consolidated Indebtedness” means, as of any date of determination, (i) all
Indebtedness of the Parent Borrower and its Subsidiaries which at such time
would appear on the liability side of a balance sheet of such Persons prepared
on a consolidated basis in accordance with GAAP (excluding Indebtedness with
respect to the transaction described in item 4 on Schedule 7.04) plus (ii) any
Indebtedness for borrowed money of any other Person (other than the Parent
Borrower or any of its Subsidiaries) as to which the Parent Borrower and/or any
of its Subsidiaries has created a Guarantee (but only to the extent of such
Guarantee).  For the avoidance of doubt, “Consolidated Indebtedness” shall not
include any Guarantees of any Person under or in connection with letters of
credit or similar facilities so long as no unreimbursed drawings or payments
have been made in respect thereof.

 

“Consolidated Net Income” means, (i) for the Parent Borrower, for any period,
the amount set forth on the consolidated income statement of the Parent Borrower
as “Net income available to Arch” determined on a consolidated basis in
accordance with GAAP and (ii) for any other Person, for any period, net income
(or loss) after income taxes of such Person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.

 

“Consolidated Net Worth” means, (i) for the Parent Borrower, as of any date of
determination, the amount set forth on the consolidated balance sheet of the
Parent Borrower as “Total shareholders’ equity available to Arch”  determined on
a consolidated basis in accordance with GAAP (excluding the effects of Financial
Accounting Statement No. 115) and (ii) for any other Person as of any date of
determination, the Net Worth of such Person and its Subsidiaries determined on a
consolidated basis in accordance with GAAP, after appropriate deduction for any
minority interests in Subsidiaries.

 

“Consolidated Tangible Net Worth” means, for any Person, as of the date of any
determination, Consolidated Net Worth of such Person and its Subsidiaries on
such date less the amount of all intangible items included therein, including,
without limitation, goodwill, franchises, licenses, patents, trademarks, trade
names, copyrights, service marks, brand names and write-ups of assets.

 

“Consolidated Total Capital” means, as of any date of determination, the sum of
(i) Consolidated Indebtedness and (ii) Consolidated Net Worth of the Parent
Borrower at such time.

 

“Control” means the possession, directly or indirectly, of the power (i) to vote
10% or more of the securities having ordinary voting power for the election of
directors of a corporation

 

12

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

 

or (ii) to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

 

“Control Agreement” means, with respect to any deposit account or securities
account of any Borrower, an agreement among such Borrower, the applicable
Financial Institution and the Administrative Agent with respect to such deposit
account or securities account in which a security interest is purported to be
granted to the Administrative Agent.

 

“Credit Documents” means this Agreement, each Note, each Issuer Document, any
agreement creating or perfecting rights in Cash Collateral pursuant to the
provisions of Section 2.15, the Security Documents, the Fee Letters, the Parent
Guaranty, the ACUS Guaranty and each Designated Subsidiary Borrower Request and
Assumption Agreement.

 

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.

 

“Credit Protection Agreement” means any OTC arrangement designed to transfer
credit risk from one party to another, including credit default swaps
(including, without limitation, single name, basket and first-to-default swaps),
total return swaps and credit-linked notes.

 

“DBRS” means DBRS Limited.

 

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

 

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

 

“Default Rate” means (a) when used with respect to Obligations other than Letter
of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum;
provided, however, that with respect to a Eurocurrency Rate Loan, the Default
Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum, and
(b) when used with respect to Letter of Credit Fees, a rate equal to the
Applicable Rate plus 2% per annum.

 

“Defaulting Lender” means, subject to Section 2.16(b), any Lender that (a) has
failed to perform any of its funding obligations hereunder, including in respect
of its Loans or participations in respect of Letters of Credit, within three
Business Days of the date required to be funded by it hereunder, unless such
failure is the result of a good faith dispute, (b) has notified the Parent
Borrower, the Administrative Agent, a Fronting Bank or an L/C Administrator that
it does not intend to comply with its funding obligations or has made a public
statement to that effect, (c)

 

13

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

 

has failed, within three Business Days after request by the Administrative
Agent, to confirm in a manner satisfactory to the Administrative Agent that it
will comply with its funding obligations (provided that such Lender shall cease
to be a Defaulting Lender pursuant to this clause (c) upon receipt of such
written confirmation by the Administrative Agent and the Parent Borrower), or
(d) has, or has a direct or indirect parent company that has, (i) become the
subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for
it a receiver, custodian, conservator, trustee, administrator, assignee for the
benefit of creditors or similar Person charged with reorganization or
liquidation of its business or assets, including the Federal Deposit Insurance
Corporation or any other state or federal regulatory authority acting in such a
capacity; provided that a Lender shall not be a Defaulting Lender solely by
virtue of the ownership or acquisition of any equity interest in that Lender or
any direct or indirect parent company thereof by a Governmental Authority so
long as such ownership interest does not result in or provide such Lender with
immunity from the jurisdiction of courts within the United States or from the
enforcement of judgments or writs of attachment on its assets or permit such
Lender (or such Governmental Authority) to reject, repudiate, disavow or
disaffirm any contracts or agreements made with such Lender.  Any determination
by the Administrative Agent that a Lender is a Defaulting Lender under clauses
(a) through (d) above shall be conclusive and binding absent manifest error, and
such Lender shall be deemed to be a Defaulting Lender (subject to
Section 2.16(b)) upon delivery of written notice of such determination to the
Parent Borrower, the Fronting Banks, the L/C Administrator and each Lender.

 

“Designated Jurisdiction” means any country or territory to the extent that such
country or territory itself is the subject of any Sanction.

 

“Designated Subsidiary Borrower” means each of ARC, ARL, AIC, ASIC, ACUS, AREUL
and Arch Europe and each Person which is designated as an additional Designated
Subsidiary Borrower after the Closing Date in accordance with Section 2.13 (in
each case, unless otherwise removed as such in accordance with Section 2.13(d).

 

“Designated Subsidiary Borrower Notice” has the meaning specified in
Section 2.13(a).

 

“Designated Subsidiary Borrower Request and Assumption Agreement” has the
meaning specified in Section 2.13(a).

 

“Dispositions” has the meaning specified in Section 7.02(b).

 

“Dividends” has the meaning specified in Section 7.07.

 

“Dollar” and “$” mean lawful money of the United States.

 

“Dollar Equivalent” means, at any time, (a) with respect to any amount
denominated in Dollars, such amount, and (b) with respect to any amount
denominated in any Alternative Currency, the equivalent amount thereof in
Dollars as determined by the Administrative Agent or a Fronting Bank, as the
case may be, at such time on the basis of the Spot Rate (determined in respect

 

14

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

 

of the most recent Revaluation Date) for the purchase of Dollars with such
Alternative Currency.

 

“Effective Time” has the meaning specified in Section 1.10(a).

 

“Eligible Assignee” means any of (a) a Lender, (b) an Affiliate of a Lender or
(c) a financial institution having a senior unsecured debt rating of not less
than “A,” or its equivalent, by S&P and (d) any other Person (other than a
natural person) approved by (i) the Administrative Agent and the Fronting Banks
and (ii) unless a Default has occurred and is continuing, the Parent Borrower
(with each such approval not to be unreasonably withheld or delayed); provided,
however, that in all cases such assignee must be a NAIC Approved Bank unless the
Parent and a Fronting Bank have agreed that such assignee which is not a NAIC
Approved Bank may become a Participating Bank.

 

“Eligible Securities” has the meaning specified in the definition of “Advance
Rates.”

 

“EMU Legislation” means the legislative measures of the European Council for the
introduction of, changeover to or operation of a single or unified European
currency.

 

“Environmental Law” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Parent Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

 

“Equity Interests” means, with respect to any Person, shares of capital stock of
(or other ownership or profit interests in) such Person, warrants, options or
other rights for the purchase or other acquisition from such Person of shares of
capital stock of (or other ownership or profit interests in) such Person,
securities convertible into or exchangeable for shares of capital stock of (or
other ownership or profit interests in) such Person or warrants, rights or
options for the purchase or other acquisition from such Person of such shares
(or such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any
date of determination.

 

15

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

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” means any corporation or trade or business which is a member
of the same controlled group of corporations (within the meaning of Sections
414(b) and (c) of the Code, and Sections 414(m) and (o) of the Code for purposes
of provisions relating to Section 412 of the Code) as the Parent Borrower or any
of its Subsidiaries.

 

“Euro” and “EUR” mean the lawful currency of the Participating Member States
introduced in accordance with the EMU Legislation.

 

“Eurocurrency Rate” means:

 

(a)                                 for any Interest Period with respect to a
Eurocurrency Rate Loan, the rate per annum equal to the London Interbank Offered
Rate (“LIBOR”) or a comparable or successor rate, which rate is approved by the
Administrative Agent, as published on the applicable Bloomberg screen page (or
such other commercially available source providing such quotations as may be
designated by the Administrative Agent from time to time) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, for deposits in the relevant currency (for delivery on the
first day of such Interest Period) with a term equivalent to such Interest
Period.  If such rate is not available at such time for any reason, then the
“Eurocurrency Rate” for such Interest Period shall be the rate per annum
determined by the Administrative Agent to be the rate at which deposits in the
relevant currency for delivery on the first day of such Interest Period in Same
Day Funds in the approximate amount of the Eurocurrency Rate Loan being made,
continued or converted by Bank of America and with a term equivalent to such
Interest Period would be offered by Bank of America’s London Branch (or other
Bank of America branch or Affiliate) to major banks in the London or other
offshore interbank market for such currency at their request at approximately
11:00 a.m. (London time) two Business Days prior to the commencement of such
Interest Period; and

 

(b)                                 for any interest calculation with respect to
a Base Rate Loan on any date, the rate per annum equal to (i) LIBOR, at or about
11:00 a.m., London time determined two London Banking Days prior to such date
for Dollar deposits with a term of one month commencing that day or (ii) if such
published rate is not available at such time for any reason, the rate per annum
determined by the Administrative Agent to be the rate at which deposits in
Dollars for delivery on the date of determination in same day funds in the
approximate amount of the Base Rate Loan being made or maintained and with a
term equal to one month would be offered by Bank of America’s London Branch to
major banks in the London interbank Eurocurrency market at their request at the
date and time of determination.

 

“Eurocurrency Rate Loan” means a Loan that bears interest at a rate based on
clause (a) of the definition of Eurocurrency Rate.  Eurocurrency Rate Loans may
be denominated in Dollars, Sterling or in Euros.  All Loans denominated in Euros
must be Eurocurrency Rate Loans.

 

“Event of Default” has the meaning specified in Section 8.01.

 

16

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“Excluded Taxes” means any of the following Taxes imposed on or with respect to
any Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) (i) Taxes imposed on or measured by net income (however
denominated), franchise Taxes, and branch profits Taxes, in each case, imposed
as a result of such Recipient being organized under the laws of, or having its
principal office or, in the case of any Lender, its Lending Office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) and
(ii) Taxes that are Other Connection Taxes, (b) in the case of a Lender, any
U.S. federal withholding Tax (and, in the case of any Foreign Lender, any other
withholding Tax) imposed on amounts payable to or for the account of such Lender
with respect to an applicable interest in a Loan or Commitment pursuant to a law
in effect on the date on which (i) such Lender acquires such interest in the
Loan or Commitment (other than pursuant to an assignment request by the Parent
Borrower under Section 10.13) or (ii) such Lender changes its Lending Office,
except in each case to the extent that, pursuant to Section 3.01(a)(ii),
(a)(iii) or (c), amounts with respect to such Taxes were payable either to such
Lender’s assignor immediately before such Lender became a party hereto or to
such Lender immediately before it changed its Lending Office, (c) Taxes
attributable to such Recipient’s failure to comply with Section 3.01(e) and
(d) any Taxes imposed pursuant to FATCA.

 

“Existing Credit Agreement” has the meaning specified in the preamble hereto.

 

“Existing Lender” has the meaning specified in Section 1.10(b).

 

“Existing Letters of Credit” means the Letters of Credit outstanding under the
Existing Credit Agreement on the Closing Date as shown on Schedule 1.01(a).

 

“Existing Loan” has the meaning specified in Section 1.10(b).

 

“Existing Several Letters of Credit”  has the meaning specified in Section 1.11.

 

“Existing Senior Notes” means (i) the Parent Borrower’s 7.35% senior notes due
2034, issued pursuant to that certain Indenture, dated as of May 4, 2004, among
the Parent Borrower, as issuer, and JPMorgan Chase Bank, N.A. (formerly known as
JPMorgan Chase Bank), as trustee, as in effect on the Closing Date and as the
same may be amended, restated, modified and/or supplemented from time to time in
accordance with the terms hereof and thereof, and (ii) the ACUS 5.144% senior
notes due 2043 issued pursuant to that certain Indenture, dated as of
December 13, 2014, among ACUS, as issuer, the Parent Borrower, as Guarantor, and
The Bank of New York Mellon, as trustee.

 

“Facility-wide Liability Percentage” means, with respect to any Borrower, the
percentage set forth opposite its name on Schedule 1.01(c), as the same may be
revised by the Parent Borrower to reflect the addition or removal of a
Designated Subsidiary Borrower.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471 (b) (1) of the Code.

 

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“Federal Funds Rate” means, for any day, the 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 by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.

 

“Fee Letters” means each of (a) the letter agreement, dated June 4, 2014, among
the Borrowers, the Administrative Agent and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, (b) the letter agreement, dated June 4, 2014, among the
Borrowers, JPMorgan Chase Bank, N.A. and J.P. Morgan Securities LLC and (c) the
letter agreement, dated June 4, 2014, among the Borrowers, Wells Fargo Bank,
National Association and Wells Fargo Securities, LLC.

 

“Financial Institution” means the Securities Intermediary or Account Bank, as
applicable, with respect to any Collateral Account.

 

“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer, controller or assistant controller of the Parent Borrower
or, with respect to Borrowing Base Certificates, such officer or any similar
authorized person of a Designated Subsidiary Borrower.  Any document delivered
hereunder that is signed by a Financial Officer shall be conclusively presumed
to have been authorized by all necessary corporate, partnership and/or other
action on the part of the Parent Borrower and such Financial Officer shall be
conclusively presumed to have acted on behalf of the Parent Borrower.

 

“Financial Strength Rating” means with respect to any Regulated Insurance
Company, the financial strength rating of such Regulated Insurance Company as
determined by A.M. Best Company, Inc. or S&P.

 

“Foreign Lender” means, as to any Borrower, (a) if such Borrower is a U.S.
Person, any Lender, L/C Issuer or Fronting Bank that is not a U.S. Person, and
(b) if the Borrower is not a U.S. Person, any Lender, L/C Issuer or Fronting
Bank that is organized under the Laws of a jurisdiction other than that in which
such Borrower is resident for tax purposes.  For purposes of this definition,
the United States, each State thereof and the District of Columbia shall be
deemed to constitute a single jurisdiction.

 

“Foreign Obligor” means each Borrower that is not organized under the laws of
the United States or a state thereof.

 

“Foreign Pension Plan” means any plan, fund (including, without limitation, any
superannuation fund) or other similar program established or maintained outside
the United States of America by the Parent Borrower or any one or more of its
Subsidiaries primarily for the benefit

 

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of employees of the Parent Borrower or such Subsidiaries residing outside the
United States of America, which plan, fund or other similar program provides, or
results in, retirement income and which plan is not subject to ERISA or the
Code.

 

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

 

“Fronted Letter of Credit” means a Letter of Credit issued by a Fronting Bank in
which the Lenders purchase a risk participation pursuant to Section 2.03.

 

“Fronted Letter of Credit Sublimit” means $75,000,000 (as may be increased from
time to time with the consent of the Administrative Agent).

 

“Fronting Bank” means (a) in the case of Fronted Letters of Credit (i) Bank of
America and (ii) any other Lender that, with the written consent of the Parent
Borrower and Bank of America, is a fronting bank; provided that such Lender has
agreed to be a Fronting Bank and (b) in the case of Several Letters of Credit,
any Person described in clause (a) who has agreed to act as fronting bank on
behalf of any Participating Bank.

 

“Fronting Exposure” means, at any time there is a Defaulting Lender, with
respect to each Fronting Bank, (i) such Defaulting Lender’s Applicable
Percentage of the outstanding L/C Obligations with respect to Fronted Letters of
Credit of such Fronting Bank other than L/C Obligations as to which such
Defaulting Lender’s participation obligation has been reallocated to other
Lenders or Cash Collateralized in accordance with the terms hereof and (ii) if
such Defaulting Lender is a Participating Bank, such Defaulting Lender’s
Applicable Percentage of the outstanding L/C Obligations with respect to Several
Letters of Credit as to which such Fronting Bank has fronted for such Defaulting
Lender as a Participating Bank.

 

“GAAP” means accounting principles generally accepted in the United States set
forth in the Financial Accounting Standards Board Codification or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.  For purposes of Arch Europe
and AREUL, this shall mean the accounting principles in the United Kingdom or
Ireland, respectively, which are required to be applied by Arch Europe and AREUL
to their respective financial statements and accounts by the Applicable
Insurance Regulatory Authority and/or Governmental Authority, consistently
applied.

 

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

 

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“Guarantee” of or by any Person (the “guarantor”) means any obligation
guaranteeing or intended to guarantee any Indebtedness, leases, dividends or
other obligations (“primary obligations”) of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (i) for the purchase
or payment of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (d) otherwise to assure or hold harmless the owner of such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee shall not include (x) endorsements of instruments for deposit or
collection in the ordinary course of business or (y) obligations of any
Regulated Insurance Company under Insurance Contracts, Reinsurance Agreements or
Retrocession Agreements.  The amount of any Guarantee shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good
faith.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Hedging Agreements” means any equity short sales, any foreign exchange
contracts, currency swap agreements, commodity price hedging arrangements or
other similar arrangements, or arrangements designed to protect against
fluctuations in currency values.

 

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person under conditional
sale or other title retention agreements relating to property acquired by such
Person, (d) all obligations of such Person in respect of the deferred purchase
price of property or services, (e) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed,
provided that the amount of Indebtedness of such Person shall be the lesser of
(A) the fair market value of such property at such date of determination
(determined in good faith by the Parent Borrower) and (B) the amount of such
Indebtedness of such other person, (f) all Guarantees by such Person of
Indebtedness of others, (g) all Capital Lease Obligations of such Person,
(h) all obligations of such Person under Interest Rate Protection Agreements,
Hedging Agreements and Credit Protection Agreements and (i) all reimbursement
obligations of such Person

 

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in respect of letters of credit, letters of guaranty, bankers’ acceptances and
similar credit transactions.

 

The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.  For
the avoidance of doubt, Indebtedness shall not include (u) trade payables
(including payables under insurance contracts and reinsurance payables) and
accrued expenses in each case arising in the ordinary course of business,
(v) obligations of Regulated Insurance Companies with respect to Policies,
(w) obligations arising under deferred compensation plans of the Parent Borrower
and its Subsidiaries in effect on the date hereof or which have been approved by
the board of directors of the Parent Borrower, (x) obligations with respect to
products underwritten by Regulated Insurance Companies in the ordinary course of
business, including insurance policies, annuities, performance and surety bonds
and any related contingent obligations (y) reinsurance agreements entered into
by any Regulated Insurance Company in the ordinary course of business and
(z) Preferred Securities.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any
Borrower under any Credit Document and (b) to the extent not otherwise described
in (a), Other Taxes.

 

“Indemnitees” has the meaning specified in Section 10.04(b).

 

“Information” has the meaning specified in Section 10.07.

 

“Insignificant Subsidiary” means any Subsidiary, other than any Designated
Subsidiary Borrower, which has assets, earnings or revenues which, if aggregated
with the assets, earnings or revenues, as the case may be, of all other
Subsidiaries of the Parent Borrower with respect to which an event described
under Section 8.01(e) has occurred and is continuing, would have assets,
earnings or revenues, as the case may be, in an amount less than 10% of the
consolidated assets, earnings or revenues, as the case may be, of the Parent
Borrower and its Subsidiaries as of the end of the most recent fiscal quarter of
the Parent Borrower for which financial statements are available.

 

“Insurance Business” means one or more aspects of the business of selling,
issuing or underwriting insurance or reinsurance.

 

“Insurance Contract” means any insurance contract or policy issued by a
Regulated Insurance Company but shall not include any Reinsurance Agreement or
Retrocession Agreement.

 

“Insurance Licenses” has the meaning specified in Section 5.14.

 

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan,
the last day of each Interest Period applicable to such Loan and the Maturity
Date; provided, however, that if any Interest Period for a Eurocurrency Rate
Loan exceeds three months, the respective

 

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dates that fall every three months after the beginning of such Interest Period
shall also be Interest Payment Dates; and (b) as to any Base Rate Loan, the last
Business Day of each March, June, September and December and the Maturity Date.

 

“Interest Period” means as to each Eurocurrency Rate Loan, the period commencing
on the date such Eurocurrency Rate Loan is disbursed or converted to or
continued as a Eurocurrency Rate Loan and ending on the date one week or one,
two, three or six months thereafter, as selected by a Borrower in its Loan
Notice, or such other period that is twelve months or less requested by a
Borrower and consented to by all the Lenders; provided that:

 

(i)                                 any Interest Period that would otherwise end
on a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day;

 

(ii)                                   any Interest Period that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period; and

 

(iii)                                    no Interest Period shall extend beyond
the Maturity Date.

 

“Interest Rate Protection Agreement” means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
hedging agreement, interest rate floor agreement, interest rate futures contract
traded on a nationally or internationally recognized exchange (including, but
not limited to, the Chicago Board of Trade, Chicago Mercantile Exchange, New
York Mercantile Exchange, New York Futures Exchange and London International
Financial Futures Exchange) or other similar agreement or arrangement.

 

“ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice, Inc. (or such later version thereof as may be in effect at the time of
issuance of such Letter of Credit).

 

“Issuer Documents” means, with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement and instrument entered
into by the Applicable Issuing Party and any Borrower in respect of such Letter
of Credit.

 

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

 

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“L/C Administrator” means with respect to Several Letters of Credit, Bank of
America’s Letter of Credit Operations located at One Fleet Way, Scranton, PA
18507, as letter of credit administrator for the Lenders, together with any
replacement L/C Administrator arising under Section 10.06.

 

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Applicable Percentage.

 

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or which
has been refinanced as a Borrowing.

 

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount
thereof.

 

“L/C Issuer” means (a) with respect to any Fronted Letter of Credit, the
Fronting Bank which has issued such Letter of Credit and (b) with respect to a
Several Letter of Credit, each Lender other than a Participating Bank.

 

“L/C Obligations” means, at any time, the sum, without duplication, of (a) the
Dollar Equivalent of the aggregate amount available to be drawn under all
outstanding Letters of Credit, plus (b) the aggregate unpaid amount of all
Unreimbursed Amounts, including L/C Borrowings, after giving effect to any L/C
Credit Extension occurring on such date and any other changes in the aggregate
amount of the L/C Obligations as of such date, including as a result of any
reimbursements by a Borrower of Unreimbursed Amounts.  For purposes of computing
the amount available to be drawn under any Letter of Credit, the amount of such
Letter of Credit shall be determined in accordance with Section 1.09.  For all
purposes of this Agreement, if on any date of determination (i) a Letter of
Credit that is subject to the rules of the ISP has expired by its terms,
(ii) the Applicable Issuing Party shall be closed for the reasons set forth in
Rule 3.14 of the ISP, and (iii) any amount may still be drawn under such Letter
of Credit, such Letter of Credit shall be deemed to be “outstanding” in the
amount so remaining available to be drawn for the period set forth in, and
subject to the terms of, Rule 3.14 of the ISP as in effect from time to time. 
For purposes of determining the L/C Obligations held by any Lender, a Lender
shall be deemed to hold an amount equal to the sum of (a) the aggregate amount
of each Lender’s direct obligation, in all outstanding Several Letters of Credit
(or, if a Participating Bank, its risk participation in Several Letters of
Credit), (b) its risk participation in all outstanding Fronted Letters of
Credit, and (c) its L/C Advances.  The L/C Obligation of any Borrower shall be
the aggregate amount available to be drawn under all outstanding Letters of
Credit issued for the account of such Borrower plus the aggregate of all
Unreimbursed Amounts owed by such Borrower.

 

“Legal Requirements” means all applicable Laws.

 

“Lender” has the meaning specified in the introductory paragraph hereto.

 

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“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrowers and the
Administrative Agent.

 

“Letter of Credit” means any standby letter of credit issued hereunder and shall
include the Existing Letters of Credit.  Letters of Credit may be issued in
Dollars or in an Alternative Currency and include all of the Tranche A Letters
of Credit and the Tranche B Letters of Credit.

 

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the Applicable Issuing Party.

 

“Letter of Credit Expiration Date” means June 30, 2020.

 

“Letter of Credit Fee” has the meaning specified in Section 2.03(h).

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

 

“Loan” has the meaning specified in Section 2.01(b).

 

“Loan Notice” means a notice of (a) a Borrowing, (b) a conversion of Loans from
one Type to the other, or (c) a continuation of Eurocurrency Rate Loans,
pursuant to Section 2.02(a), shall be substantially in the form of Exhibit A or
such other form as may be approved by the Administrative Agent (including any
form on an electronic platform or electronic transmission system as shall be
approved by the Agent), appropriately completed and signed by a Responsible
Officer of the applicable Borrower.

 

“London Banking Day” means any day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank Eurocurrency market.

 

“Long-Term LC Facilities” means (i) the Letter of Credit Facility Agreement,
dated as of April 22, 2014 (as the same has been amended, modified or
supplemented to, but not including, the Closing Date), between ARL and Lloyds
Bank plc, which provides for the issuance of a letter of credit in an aggregate
amount of up to $68,962,500 (and any replacements, renewals and extensions
thereof and any successor facilities), (ii) the Insurance Letters of Credit
Master Agreement, dated as of November 6, 2009 (as the same has been amended,
modified or supplemented to, but not including, the Closing Date), between ARL
and Citibank Europe PLC, which provides for the issuance of letters of credit
from time to time (and any replacements, renewals and extensions thereof and any
successor facilities) and (iii) any Letter of Credit obtained by the Borrower or
any of its Subsidiaries in the ordinary course of business and secured by Cash
and Cash Equivalents.

 

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“Majority Tranche A Lenders” means, at any time, Tranche A Lenders whose Tranche
A Commitments (or, after the Tranche A Commitments have terminated, the sum of
such Tranche A Lenders’ Applicable Percentages of the Tranche A L/C Obligations
at such time) represent an amount greater than 50% of the aggregate Tranche A
Commitments (or after termination thereof, the Tranche A L/C Obligations at such
time).

 

“Majority Tranche B Lenders” means, at any time, Tranche B Lenders whose Tranche
B Commitments (or, after the Tranche B Commitments have terminated, the sum of
such Tranche B Lenders’ Applicable Percentages of the Tranche B Obligations at
such time) represent an amount greater than 50% of the aggregate Tranche B
Commitment (or after termination thereof, the Tranche B Obligations at such
time).

 

“Margin Stock” means “margin stock” within the meaning of Regulations T, U and X
of the FRB.

 

“Material Adverse Effect” means (i) a material adverse effect on the business,
operations, property or financial condition of the Parent Borrower and its
Subsidiaries taken as a whole or (ii) a material adverse effect on (x) the
rights and remedies of the Administrative Agent or the Lenders under the Credit
Documents, (y) the ability of either the Parent Borrower and its Subsidiaries
taken as a whole, to perform their respective obligations under the Credit
Documents to which such entities are a party or (z) the legality, validity or
enforceability of any Credit Document.

 

“Maturity Date” means June 30, 2019; provided, however, that if such date is not
a Business Day, the Maturity Date shall be the next preceding Business Day.

 

“Maximum Rate” has the meaning specified in Section 10.09.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Multiemployer Plan” means any “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA, which is maintained or contributed to by (or to
which there is an obligation to contribute of) the Parent Borrower, any of its
Subsidiaries or any of its ERISA Affiliates, and each such plan for the five
year period immediately following the latest date on which the Parent Borrower,
such Subsidiary or such ERISA Affiliate contributed to or had an obligation to
contribute to such plan, or any other such plan with respect to which Parent
Borrower, any of its Subsidiaries or any of its ERISA Affiliates has any
liability under Title IV of ERISA, contingent or otherwise.

 

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

 

“NAIC Approved Bank” means any bank listed on the most current list of banks
approved by the Securities Valuation Office of the NAIC and acting through the
branch so listed.

 

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“Net Cash Proceeds” means, for any issuance of debt or equity, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from such issuance, net of customary transaction costs (including, as
applicable, any underwriting, brokerage or other customary commissions and
legal, advisory and other fees and expenses associated therewith).

 

“Net Worth” means, as to any Person, the sum of its capital stock (including,
without limitation, its preferred stock), capital in excess of par or stated
value of shares of its capital stock (including, without limitation, its
preferred stock), retained earnings and any other account which, in accordance
with GAAP, constitutes stockholders equity, but excluding (i) any treasury stock
and (ii) the effects of Financial Accounting Statement No. 115.

 

“Non-Consenting Lender” means any Lender that does not approve any consent,
waiver or amendment that (i) requires the approval of all Lenders or all
affected Lenders in accordance with the terms of Section 10.01 and (ii) has been
approved by the Required Lenders.

 

“Note” means a promissory note made by a Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit B.

 

“Obligations” means all advances to, and debts, liabilities and obligations of
any Borrower arising under any Credit Document, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against any Borrower or any Affiliate
thereof of any proceeding under any Debtor Relief Laws naming such Person as the
debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding.

 

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

 

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising solely from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected

 

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a security interest under, engaged in any other transaction pursuant to or
enforced any Credit Document, or sold or assigned an interest in any Loan or
Credit Document).

 

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Credit Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 3.06).

 

“Outstanding Amount” means (i) with respect to Loans on any date, the Dollar
Equivalent of the aggregate outstanding principal amount thereof after giving
effect to any borrowings and prepayments or repayments of Loans, occurring on
such date; and (ii) with respect to any L/C Obligations on any date, the amount
of such L/C Obligations on such date after giving effect to any L/C Credit
Extension occurring on such date and any other changes in the aggregate amount
of the L/C Obligations as of such date, including as a result of any
reimbursements by any Borrower of Unreimbursed Amounts.

 

“Overnight Rate” means, for any day, (a) with respect to any amount denominated
in Dollars, the greater of (i) the Federal Funds Rate and (ii) an overnight rate
determined by the Administrative Agent or a Fronting Bank, as the case may be,
in accordance with banking industry rules on interbank compensation, and
(b) with respect to any amount denominated in an Alternative Currency, the rate
of interest per annum at which overnight deposits in the applicable Alternative
Currency, in an amount approximately equal to the amount with respect to which
such rate is being determined, would be offered for such day by a branch or
Affiliate of Bank of America in the applicable offshore interbank market for
such currency to major banks in such interbank market.

 

“Parent Borrower” has the meaning specified in the introductory paragraph
hereto.

 

“Parent Borrower Leverage Ratio” means, at any time, the ratio of
(i) Consolidated Indebtedness at such time to (ii) Consolidated Total Capital at
such time.

 

“Parent Debt Rating” has the meaning specified in the definition of Applicable
Rate.

 

“Parent Guaranty” means the guaranty executed by the Parent Borrower of the
Obligations of ACUS as a Borrower hereunder, a copy of which is attached as
Exhibit L.

 

“Participant” has the meaning specified in Section 10.06(d).

 

“Participant Register” has the meaning specified in Section 10.06(d).

 

“Participating Bank” means, from time to time, with respect to any Several
Letter of Credit, a Lender that is unable to issue such Letter of Credit because
(a) it is unable due to regulatory restrictions or other legal impediments based
on its relationship to the beneficiary, (b) it is not, or has lost its status
as, an NAIC Approved Bank (if such Letter of Credit must be issued by

 

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NAIC Approved Banks), or (c) it does not engage in transactions in the requested
Alternative Currency.

 

“Participating Member State” means each state so described in any EMU
Legislation.

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Permitted Subsidiary Indebtedness” means:

 

(a)                                 Indebtedness of any Subsidiary of the Parent
Borrower incurred pursuant to this Agreement or any other Credit Document;

 

(b)                                 Indebtedness of any Subsidiary of the Parent
Borrower existing on the date hereof and listed on Schedule 7.04 and
refinancings by such Subsidiary thereof; provided that the aggregate principal
amount of any such refinancing Indebtedness is not greater than the aggregate
principal amount of the Indebtedness being refinanced plus the amount of any
premiums required to be paid thereon and fees and expenses associated therewith;

 

(c)                                  Indebtedness of any Subsidiary of the
Parent Borrower under any Interest Rate Protection Agreement or Hedging
Agreement, in each case entered into in the ordinary course of business in
managing such Subsidiary’s investment portfolio;

 

(d)                                 any Indebtedness owed by Subsidiaries of the
Parent Borrower to the Parent Borrower or any of its Subsidiaries;

 

(e)                                  Indebtedness in respect of purchase money
obligations and Capital Lease Obligations of any Subsidiary of the Parent
Borrower, and refinancings thereof; provided that the aggregate principal amount
of all such purchase money obligations and Capital Lease Obligations does not
exceed at any time outstanding $25,000,000 at the time of incurrence of any new
Indebtedness permitted by this clause (e);

 

(f)                                   Indebtedness of any Subsidiary of the
Parent Borrower in respect of letters of credit issued to reinsurance cedents,
in connection with requirements of Lloyd’s of London for syndicates owned by any
Subsidiary of the Parent Borrower, or to lessors of real property in lieu of
security deposits in connection with leases of any Subsidiary of the Parent
Borrower, in each case in the ordinary course of business;

 

(g)                                  Indebtedness of any Subsidiary of the
Parent Borrower incurred in the ordinary course of business in connection with
workers’ compensation claims, self-insurance obligations, unemployment insurance
or other forms of governmental insurance or benefits and pursuant to letters of
credit or other security arrangements entered into in connection with such
insurance or benefit;

 

(h)                                 Acquired Indebtedness of Subsidiaries of the
Parent Borrower;

 

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(i)                                     Indebtedness incurred under securities
lending arrangements entered into in the ordinary course of business;

 

(j)                                    Indebtedness incurred under Credit
Protection Agreements entered into in the ordinary course of business;

 

(k)                                 additional Indebtedness of Subsidiaries of
the Parent Borrower not otherwise permitted under clauses (a) through (m) of
this definition which shall not exceed at any time outstanding 5% of the Parent
Borrower’s Consolidated Net Worth at the time of incurrence of any new
Indebtedness permitted by this clause (k);

 

(l)                                 Indebtedness in the form of earn-out
obligations; and

 

(m)                             Indebtedness arising from Guarantees made by any
Subsidiary of the Parent Borrower of Indebtedness of the type described in
clauses (a) through (l) of this definition.

 

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

 

“Plan” means any “pension plan” as defined in Section 3(2) of ERISA (other than
a Multiemployer Plan) that is subject to Title IV of ERISA, which is maintained
or contributed to by (or to which there is an obligation to contribute of) the
Parent Borrower or any of its Subsidiaries or any of its ERISA Affiliates, and
each such plan for the five year period immediately following the latest date on
which the Parent Borrower, any of its Subsidiaries or any of its ERISA
Affiliates maintained, contributed to or had an obligation to contribute to such
plan, or any such plan to which Parent Borrower, any of its Subsidiaries or any
of its ERISA Affiliates has any liability under Title IV of ERISA, contingent or
otherwise.

 

“Platform” has the meaning specified in Section 6.02.

 

“Policies” means all insurance policies, annuity contracts, guaranteed interest
contracts and funding agreements (including riders to any such policies or
contracts, certificates issued with respect to group life insurance or annuity
contracts and any contracts issued in connection with retirement plans or
arrangements) and assumption certificates issued or to be issued (or filed
pending current review by applicable Governmental Authorities) by any Regulated
Insurance Company and any coinsurance agreements entered into or to be entered
into by any Regulated Insurance Company.

 

“Preferred Securities” means, at any time, any preferred Equity Interests (or
capital stock) of such Person that has preferential rights with respect to
dividends or redemptions or upon liquidation or dissolution of such Person over
shares of common Equity Interests (or capital stock) of any other class of such
Person.

 

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

 

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“Public Lender” has the meaning specified in Section 6.02.

 

“Rand” means the lawful currency of South Africa.

 

“Recipient” means the Administrative Agent, any Lender, any Fronting Bank, any
L/C Issuer or any other recipient of any payment to be made by or on account of
any obligation of any Loan Party hereunder.

 

“Register” has the meaning specified in Section 10.06(c).

 

“Regulated Insurance Company” means any Subsidiary of the Parent Borrower,
whether now owned or hereafter acquired, that is authorized or admitted to carry
on or transact Insurance Business in any jurisdiction (foreign or domestic) and
is regulated by any Applicable Insurance Regulatory Authority.

 

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

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees,
administrators, managers, advisors and representatives of such Person and of
such Person’s Affiliates.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

 

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Loans, a Loan Notice and (b) with respect to an L/C Credit
Extension, a Letter of Credit Application.

 

“Required Lenders” means, as of any date of determination, Lenders having more
than 50% of the Aggregate Commitments or, if the commitment of each Lender to
make Loans and to issue Several Letters of Credit and the obligations of the
Fronting Banks to issue Fronted Letters of Credit have been terminated pursuant
to Section 8.02, Lenders holding in the aggregate more than 50% of the Total
Outstandings (with the aggregate amount of each Lender’s risk participation and
funded participation in L/C Obligations being deemed “held” by such Lender for
purposes of this definition); provided that the Commitment of, and the portion
of the Total Outstandings held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required Lenders.

 

“Responsible Officer” means, as to any Borrower, the chief executive officer,
any Financial Officer, the president, general counsel or any vice president of
such Borrower, and solely for purposes of the delivery of incumbency
certificates pursuant to Section 4.01, the secretary or any assistant secretary
of such Borrower and, solely for purposes of notices given pursuant to Section

 

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2.02 or 2.03, any other officer or employee of such Borrower so designated by
any of the foregoing officers in a notice to the Administrative Agent.  Any
document delivered hereunder that is signed by a Responsible Officer of a
Borrower shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Borrower and such
Responsible Officer shall be conclusively presumed to have acted on behalf of
such Borrower.

 

“Retrocession Agreement” means any agreement, contract, treaty or other
arrangement whereby one or more insurers or reinsurers, as retrocessionaires,
assume liabilities of reinsurers under a Reinsurance Agreement or other
retrocessionaires under another Retrocession Agreement.

 

“Revaluation Date” means (a) with respect to any Loan, each of the following: 
(i) each date of a Borrowing of a Eurocurrency Rate Loan denominated in an
Alternative Currency, (ii) each date of a continuation of a Eurocurrency Rate
Loan denominated in an Alternative Currency pursuant to Section 2.02, and
(iii) such additional dates as the Administrative Agent shall determine or the
Required Lenders shall require; and (b) with respect to any Letter of Credit,
each of the following:  (i) each date of issuance of a Letter of Credit
denominated in an Alternative Currency, (ii) each date of an amendment of any
such Letter of Credit having the effect of increasing the amount thereof or
extending the expiration thereof, (iii) each date of any payment by the
Applicable Issuing Party under any Letter of Credit denominated in an
Alternative Currency, and (iv) such additional dates as the Administrative
Agent, an L/C Administrator or a Fronting Bank shall determine or the Required
Lenders shall require.

 

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The
McGraw-Hill Companies, Inc. and any successor thereto.

 

“Same Day Funds” means (a) with respect to disbursements and payments in
Dollars, immediately available funds, and (b) with respect to disbursements and
payments in an Alternative Currency, same day or other funds as may be
determined by the Administrative Agent or the Applicable Issuing Party, as the
case may be, to be customary in the place of disbursement or payment for the
settlement of international banking transactions in the relevant Alternative
Currency.

 

“Sanction(s)” means any sanction administered or enforced by the United States
government (including without limitation, OFAC), the United Nations Security
Council, the European Union, Her Majesty’s Treasury or other relevant sanctions
authority.

 

“SAP” means, with respect to any Regulated Insurance Company, the accounting
procedures and practices prescribed or permitted by the Applicable Insurance
Regulatory Authority of the state in which such Regulated Insurance Company is
domiciled; it being understood and agreed that determinations in accordance with
SAP for purposes of Article VI, including defined terms used therein, are
subject (to the extent provided therein) to Section 1.03.

 

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“SEC” means the United States Securities and Exchange Commission or any
successor entity.

 

“Securities Intermediary” means any “securities intermediary” within the meaning
of Section 8.102(a)(14) of the UCC at which any securities account constituting
a Collateral Account is held, which shall be (a) located in the United States
and (b) reasonably acceptable to the Administrative Agent.

 

“Security Agreement” means the Security Agreement, a copy of which is attached
hereto as Exhibit F with such changes therein as may be agreed to by the
Administrative Agent and any Borrower which may be entered into from time to
time between the Administrative Agent and such Borrower.

 

“Security Documents” means (i) each Security Agreement, (ii) each Control
Agreement, (iii) each other security agreement executed and delivered pursuant
to Section 6.13 and (iv) each other document, agreement, certificate and/or
financing statement executed, delivered, made or filed pursuant to the terms of
the documents specified in foregoing clauses (i), (ii) and (iii).

 

“Service of Process Agent” means CT Corporation, New York Corporate Service
Center, New York Service Group1, 111 Eighth Avenue, New York, NY 10011.

 

“Several Letter of Credit” means a Letter of Credit issued severally by or on
behalf of the Lenders pursuant to which the Lenders are severally liable to the
beneficiary which shall be substantially in the form of Exhibit E with such
changes thereto as are described in Section 2.03(a)(iii)(E).

 

“Special Notice Currency” means at any time an Alternative Currency, other than
the currency of a country that is a member of the Organization for Economic
Cooperation and Development at such time located in North America or Europe.

 

“Spot Rate” for a currency means the rate determined by the Administrative Agent
or a Fronting Bank, as applicable, to be the rate quoted by the Person acting in
such capacity as the spot rate for the purchase by such Person of such currency
with another currency through its principal foreign exchange trading office at
approximately 11:00 a.m. on the date two Business Days prior to the date as of
which the foreign exchange computation is made; provided that the Administrative
Agent or the issuing Fronting Bank may obtain such spot rate from another
financial institution designated by the Administrative Agent or the issuing
Fronting Bank if the Person acting in such capacity does not have as of the date
of determination a spot buying rate for any such currency; and provided further
that the issuing Fronting Bank may use such spot rate quoted on the date as of
which the foreign exchange computation is made in the case of any Letter of
Credit denominated in an Alternative Currency.

 

“Statutory Statements” means, with respect to any Regulated Insurance Company
for any fiscal year or fiscal quarter, the annual or quarterly financial
statements of such Regulated Insurance

 

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Company as required to be filed with the Insurance Regulatory Authority of its
jurisdiction of domicile and in accordance with the laws of such jurisdiction,
together with all exhibits.

 

“Sterling” and “£” mean the lawful currency of the United Kingdom.

 

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
of which securities or other ownership interests representing more than 50% of
the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.  The term Subsidiary shall not include,
however, (i) any Person (such as Watford Holdings Ltd. and Gulf Re Holdings
Ltd.) and its Subsidiaries in which the Parent Borrower owns 50% or less of the
Equity Interest of such Person but which, due to accounting rules, is required
to be consolidated in the Parent Borrower’s consolidated financial statements
under GAAP and (ii) funds, partnerships, corporations, limited liability
companies or similar entities in which the Parent Borrower holds an interest
solely for investment purposes and which may be deemed “Subsidiaries” because
they would be consolidated in the Parent Borrower’s consolidated financial
statements in accordance with GAAP (each, an “Investment Entity”) to the extent
that the assets or revenues, as the case may be, of any Investment Entity or of
all Investment Entities in the aggregate, are not more than 10% of the
consolidated assets or revenues, as the case may be, of the Parent Borrower and
its Subsidiaries as of the end of the most recent fiscal quarter of the Parent
Borrower for which financial statements are available.

 

“TARGET Day” means any day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer (TARGET) payment system (or, if such payment system
ceases to be operative, such other payment system (if any) determined by the
Administrative Agent to be a suitable replacement) is open for the settlement of
payments in Euro.

 

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

 

“Total Outstandings” means, on any date, the sum of (a) the Tranche A L/C
Obligations plus (b) the Tranche B Obligations as of such date.

 

“Tranche A Commitment” means, as to any Lender, the commitment of such Lender
pursuant to Section 2.01(a) to issue Tranche A Several Letters of Credit and
purchase participations in Tranche A L/C Obligations arising under Fronted
Letters of Credit for the account of the Designated Subsidiary Borrowers, in an
aggregate principal amount at any one time outstanding not to exceed the Dollar
amount set forth opposite such Lender’s name on Schedule 2.01 or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto,
as applicable,

 

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as such amount may be adjusted from time to time in accordance with this
Agreement. The initial amount of the Tranche A Commitment of each Lender is set
forth on Schedule 2.01.

 

“Tranche A Commitment Termination Date’ means the earliest of (a) the Maturity
Date and (b) termination of the Tranche A Commitments pursuant to Section 2.05
or Section 8.02.

 

“Tranche A Fronted Letter of Credit” means a Tranche A Letter of Credit issued
as a Fronted Letter of Credit.

 

“Tranche A L/C Obligations” means, at any time, the L/C Obligations with respect
to Tranche A Letters of Credit.

 

“Tranche A Lender” means a Lender who has a Tranche A Commitment.

 

“Tranche A Letter of Credit” means a Letter of Credit issued pursuant to the
Tranche A Commitment.

 

“Tranche A Several Letter of Credit” means a Tranche A Letter of Credit issued
as a Several Letter of Credit.

 

“Tranche B Commitment” means, as to any Lender, the commitment of such Lender
pursuant to Section 2.01(b) to (a) make Loans to the Parent Borrower and ACUS
and (b) to issue Tranche B Several Letters of Credit and purchase participations
in Tranche B L/C Obligations arising under Tranche B Fronted Letters of Credit
for the account of the Parent Borrower, ARC and ARL, in an aggregate principal
amount at any one time outstanding not to exceed the Dollar amount set forth
opposite such Lender’s name on Schedule 2.01 or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable, as such
amount may be adjusted from time to time in accordance with this Agreement. The
initial amount of the Tranche B Commitment of each Lender is set forth on
Schedule 2.01.

 

“Tranche B Commitment Termination Date” means the earliest of (a) the Maturity
Date and (b) termination of the Tranche B Commitments pursuant to Section 2.05
or Section 8.02.

 

“Tranche B Fronted Letter of Credit” means a Tranche B Letter of Credit issued
as a Fronted Letter of Credit.

 

“Tranche B L/C Obligations” means, at any time, the L/C Obligations with respect
to Tranche B Letters of Credit.

 

“Tranche B Lender” means a Lender who has a Tranche B Commitment.

 

“Tranche B Letter of Credit” means any Letter of Credit issued under the Tranche
B Commitment.

 

“Tranche B Obligations” means, at any time, the sum, without duplication, of
(a) the Tranche B L/C Obligations plus (b) the aggregate outstanding principal
amount of Loans.

 

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“Tranche B Several Letter of Credit” means a Tranche B Letter of Credit issued
as a Several Letter of Credit.

 

“Transactions” means the execution, delivery and performance by each Borrower of
this Agreement, the borrowing of Loans, the issuing of Letters of Credit and the
use of the proceeds thereof.

 

“Type” means with respect to a Loan, its character as a Base Rate Loan or a
Eurocurrency Rate Loan.

 

“UCC” means the Uniform Commercial Code as in effect in the State of New York.

 

“UCP” means the Uniform Customs and Practice for Documentary Credits, as most
recently published by the International Chamber of Commerce at the time of
issuance of a Letter of Credit or, in the case of Letters of Credit issued to
back Reinsurance Agreements, such earlier version thereof as may be required by
the applicable Governmental Authority or beneficiary.

 

“United States” and “U.S.” mean the United States of America.

 

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(ii).

 

“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

 

“Wholly-Owned Subsidiary” of any Person means any Subsidiary of such Person to
the extent all of the capital stock or other ownership interests in such
Subsidiary, other than directors’ or nominees’ qualifying shares, is owned
directly or indirectly by such Person; provided, however that Alternative Re
Holdings Limited shall be a considered a Wholly-Owned Subsidiary provided the
Parent Borrower owns directly or indirectly all of the voting capital stock or
other voting ownership interests in such Subsidiary.

 

“Yen” means the lawful currency of Japan.

 

1.02                        Other Interpretive Provisions.  With reference to
this Agreement and each other Credit Document, unless otherwise specified herein
or in such other Credit Document:

 

(a)                           The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include,” “includes” and “including”
shall be deemed to be followed by the phrase “without limitation.”  The word
“will” shall be construed to have the same meaning and effect as the word
“shall.”  Unless the context requires otherwise, (i) any definition of or
reference to any agreement, instrument or other document (including any
Organization Document) shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein or in any other Credit Document), (ii) any
reference herein to any Person shall be

 

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construed to include such Person’s successors and assigns, (iii) the words
“hereto,” “herein,” “hereof” and “hereunder,” and words of similar import when
used in any Credit Document, shall be construed to refer to such Credit Document
in its entirety and not to any particular provision thereof, (iv) all references
in a Credit Document to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
the Credit Document in which such references appear, (v) any reference to any
law shall include all statutory and regulatory provisions consolidating,
amending, replacing or interpreting such law and any reference to any law or
regulation shall, unless otherwise specified, refer to such law or regulation as
amended, modified or supplemented from time to time, and (vi) the words “asset”
and “property” shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.

 

(b)                           In the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and
including”; the words “to” and “until” each mean “to but excluding”; and the
word “through” means “to and including.”

 

(c)                            Section headings herein and in the other Credit
Documents are included for convenience of reference only and shall not affect
the interpretation of this Agreement or any other Credit Document.

 

1.03                        Accounting Terms.  Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Parent Borrower (on behalf of the Borrowers) notifies the
Administrative Agent that the Borrowers request an amendment to any provision
hereof to eliminate the effect of any change occurring after the date hereof in
GAAP or in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Parent Borrower (on behalf of the Borrowers)
that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.

 

1.04                        Rounding.  Any financial ratios required to be
maintained by the Parent Borrower pursuant to this Agreement shall be calculated
by dividing the appropriate component by the other component, carrying the
result to one place more than the number of places by which such ratio is
expressed herein and rounding the result up or down to the nearest number (with
a rounding-up if there is no nearest number).

 

1.05                        Exchange Rates; Currency Equivalents.

 

(a)                           The Administrative Agent or the issuing Fronting
Bank, as applicable, shall determine the Spot Rates as of each Revaluation Date
to be used for calculating Dollar Equivalent amounts of Credit Extensions and
Outstanding Amounts denominated in Alternative Currencies.  Such Spot Rates
shall become effective as of such Revaluation Date and shall be the Spot

 

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Rates employed in converting any amounts between the applicable currencies until
the next Revaluation Date to occur.  Except for purposes of financial statements
delivered by Borrowers hereunder or calculating financial covenants hereunder or
except as otherwise provided herein, the applicable amount of any currency
(other than Dollars) for purposes of the Credit Documents shall be such Dollar
Equivalent amount as so determined by the Administrative Agent or the issuing
Fronting Bank, as applicable.

 

(b)                           Wherever in this Agreement in connection with a
Borrowing, conversion, continuation or prepayment of a Eurocurrency Rate Loan or
the issuance, amendment or extension of a Letter of Credit, an amount, such as a
required minimum or multiple amount, is expressed in Dollars, but such
Borrowing, Eurocurrency Rate Loan or Letter of Credit is denominated in an
Alternative Currency, such amount shall be the relevant Alternative Currency
Equivalent of such Dollar amount (rounded to the nearest unit of such
Alternative Currency, with 0.5 of a unit being rounded upward), as determined by
the Administrative Agent or the issuing Fronting Bank, as the case may be.

 

1.06                        Additional Alternative Currencies.

 

(a)                            The Borrowers may from time to time request that
Eurocurrency Rate Loans be made and/or Fronted Letters of Credit be issued in a
currency other than those specifically listed in the definition of “Alternative
Currency”; provided that such requested currency is a lawful currency (other
than Dollars) that is readily available and freely transferable and convertible
into Dollars.  In the case of any such request with respect to the making of
Eurocurrency Rate Loans, such request shall be subject to the approval of the
Administrative Agent and the Lenders; and in the case of any such request with
respect to the issuance of Fronted Letters of Credit, such request shall be
subject to the approval of the Administrative Agent and the Fronting Banks.

 

(b)                           Any such request shall be made to the
Administrative Agent not later than 11:00 a.m., 15 Business Days prior to the
date of the desired Credit Extension (or in the case of Fronted Letters of
Credit, such earlier time or date as may be agreed to by the issuing Fronting
Bank, in its sole discretion).  In the case of any such request pertaining to
Eurocurrency Rate Loans, the Administrative Agent shall promptly notify each
Lender thereof; and in the case of any such request pertaining to Fronted
Letters of Credit, the Administrative Agent shall promptly notify the Fronting
Banks thereof.  Each Lender (in the case of any such request pertaining to
Eurocurrency Rate Loans) or the issuing Fronting Bank (in the case of a request
pertaining to Fronted Letters of Credit) shall notify the Administrative Agent,
not later than 11:00 a.m., ten Business Days after receipt of such request
whether it consents, in its sole discretion, to the making of Eurocurrency Rate
Loans or the issuance of Letters of Credit, as the case may be, in such
requested currency.

 

(c)                            Any failure by a Lender or a Fronting Bank, as
the case may be, to respond to such request within the time period specified in
the preceding clause (b) shall be deemed to be a refusal by such Lender or such
Fronting Bank, as the case may be, to permit Eurocurrency Rate Loans to be made
or Fronted Letters of Credit to be issued in such requested currency.  If the

 

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Administrative Agent and all the Lenders consent to making Eurocurrency Rate
Loans in such requested currency, the Administrative Agent shall so notify the
Parent Borrower and such currency shall thereupon be deemed for all purposes to
be an Alternative Currency hereunder for purposes of any Borrowings of
Eurocurrency Rate Loans; and if the Administrative Agent and a Fronting Bank
consent to the issuance of Fronted Letters of Credit in such requested currency,
the Administrative Agent shall so notify the Parent Borrower and such currency
shall thereupon be deemed for all purposes to be an Alternative Currency
hereunder for purposes of any Fronted Letter of Credit issuances. If the
Administrative Agent shall fail to obtain consent to any request for an
additional currency under this Section 1.06, the Administrative Agent shall
promptly so notify the Parent Borrower.

 

1.07                        Change of Currency.

 

(a)                           Each obligation of a Borrower to make a payment
denominated in the national currency unit of any member state of the European
Union that adopts the Euro as its lawful currency after the date hereof shall be
redenominated into Euro at the time of such adoption (in accordance with the EMU
Legislation).  If, in relation to the currency of any such member state, the
basis of accrual of interest expressed in this Agreement in respect of that
currency shall be inconsistent with any convention or practice in the London
interbank market for the basis of accrual of interest in respect of the Euro,
such expressed basis shall be replaced by such convention or practice with
effect from the date on which such member state adopts the Euro as its lawful
currency; provided that if any Loan in the currency of such member state is
outstanding immediately prior to such date, such replacement shall take effect,
with respect to such Loan, at the end of the then current Interest Period.

 

(b)                            Each provision of this Agreement shall be subject
to such reasonable changes of construction as the Administrative Agent may from
time to time specify to be appropriate to reflect the adoption of the Euro by
any member state of the European Union and any relevant market conventions or
practices relating to the Euro.  In the event that any member state of the
European Union withdraws its adoption of the Euro and adopts another currency,
the adopted currency shall not be an Alternative Currency unless it is either an
existing Alternative Currency or is approved in accordance with Section 1.06.

 

(c)                            Each provision of this Agreement also shall be
subject to such reasonable changes of construction as the Administrative Agent
may from time to time specify to be appropriate to reflect a change in currency
of any other country and any relevant market conventions or practices relating
to the change in currency.

 

1.08                        Times of Day.  Unless otherwise specified, all
references herein to times of day shall be references to Eastern time (daylight
or standard, as applicable).

 

1.09                        Letter of Credit Amounts.  Unless otherwise
specified herein, the amount of a Letter of Credit at any time shall be deemed
to be the Dollar Equivalent of the stated amount of such Letter of Credit in
effect at such time; provided, however, that with respect to any Letter of
Credit that, by its terms or the terms of any Issuer Document related thereto,
provides for one or

 

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more automatic increases in the stated amount thereof, the amount of such Letter
of Credit shall be deemed to be the Dollar Equivalent of the maximum stated
amount of such Letter of Credit after giving effect to all such increases,
whether or not such maximum stated amount is in effect at such time.

 

1.10                        Allocation of Loans and Percentages at the Effective
Time.

 

(a)                           Each Borrower and each Lender agree that,
effective at the time at which all conditions precedent to the effectiveness of
this Agreement have been satisfied (the “Effective Time”), (i) this Agreement
shall amend and restate in its entirety the Existing Credit Agreement and
(ii) the outstanding “Loans” under and as defined in the Existing Credit
Agreement shall be allocated among the Lenders in accordance with their
respective Applicable Percentages.

 

(b)                           To facilitate the allocation described in clause
(a), at the Effective Time, (i) all “Loans” under the Existing Credit Agreement
(“Existing Loans”) shall be deemed to be Loans, (ii) each Lender that is a party
to the Existing Credit Agreement (an “Existing Lender”) shall transfer to the
Administrative Agent an amount equal to the excess, if any, of such Lender’s pro
rata share (according to its Applicable Percentage) of the outstanding Loans
hereunder (including any Loans made at the Effective Time) over the amount of
all of such Lender’s Existing Loans, (iii) each Lender that is not a party to
the Existing Credit Agreement shall transfer to the Administrative Agent an
amount equal to such Lender’s pro rata share (according to its Applicable
Percentage) of the Loans outstanding hereunder (including any Loans made at the
Effective Time), (iv) the Administrative Agent shall apply the funds received
from the Lenders pursuant to clauses (ii) and (iii), first, on behalf of the
Lenders (pro rata according to the amount of the applicable Existing Loans each
is required to purchase to achieve the allocation described in clause (a)), to
purchase from each Existing Lender that has Existing Loans in excess of such
Lender’s pro rata share (according to its Applicable Percentage) of the
applicable outstanding Loans hereunder (including any Loans made at the
Effective Time), a portion of such Existing Loans equal to such excess, second,
to pay to each Existing Lender all interest, fees and other amounts (including
amounts payable pursuant to Section 3.05 of the Existing Credit Agreement,
assuming for such purpose that the Existing Loans were prepaid rather than
allocated at the Effective Time) owed to such Existing Lender under the Existing
Credit Agreement (whether or not otherwise then due) and, third, as the Parent
Borrower shall direct, and (v) all Loans shall commence new Interest Periods in
accordance with elections made by the applicable Borrower at least three
Business Days prior to the Closing Date pursuant to the procedures applicable to
conversions and continuations set forth in Section 2.02 (all as if the Existing
Loans were continued or converted as of the Effective Time).  To the extent the
applicable Borrower fails to make a timely election pursuant to clause (v) of
the preceding sentence with respect to any Loans, such Loans shall be Base Rate
Loans.

 

1.11                        Existing Letters of Credit.  (i)  On and after the
Closing Date, the Existing Letters of Credit shall be deemed to be Tranche A
Letters of Credit or Tranche B Letters of Credit as indicated on Schedule
1.01(a), issued under this Agreement for all purposes, including for purposes of
the fees to be collected pursuant to Section 2.03(h) and (i), and reimbursement
of costs and expenses to the extent provided herein.

 

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(ii)               On the Closing Date, the risk participation of each Lender in
the Existing Letters of Credit which, as shown on Schedule 1.01(a), were issued
as Fronted Letters of Credit shall be equal to each Lender’s Applicable
Percentage and the risk participation of each Lender in the Existing Letters of
Credit which, as shown on Schedule 1.01(a) were issued as Several Letters of
Credit (the “Existing Several Letters of Credit”) shall be equal to each
Lender’s Applicable Percentage.

 

(iii)            Bank of America shall promptly amend each Existing Several
Letter of Credit to reflect the applicable Lenders as Issuers and the correct
Applicable Percentages of such Lenders under such Existing Several Letter of
Credit.  The Designated Subsidiary Borrowers shall cooperate with Bank of
America and provide any necessary documents as may reasonably be requested by a
beneficiary in connection with such amendment.  Bank of America and the
Designated Subsidiary Borrowers will use their commercially reasonable efforts
to amend or replace any Existing Several Letter of Credit which cannot be
amended without the consent of a beneficiary, to reflect the correct Applicable
Percentages of the Lenders.  From the Closing Date until the date on which an
Existing Several Letter of Credit has been amended to reflect the applicable
Lenders’ Applicable Percentage, each Lender hereby irrevocably and
unconditionally purchases from each lender who has issued such Several Letter of
Credit, a risk participation in such Existing Several Letter of Credit in an
amount such that after giving effect to such purchase, the risk participation of
each applicable Lender in such Existing Several Letter of Credit is equal to
such Lender’s Applicable Percentage.

 

ARTICLE II.   THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01                        Commitments.

 

(a)                           Tranche A Commitment.  Upon and subject to the
terms and conditions hereof, (i) each Fronting Bank (subject to the definition
thereof) hereby agrees to issue Tranche A Fronted Letters of Credit in Dollars
or an Alternative Currency at the request of and for the account of each
Designated Subsidiary Borrower from time to time during the Availability Period,
(ii) each Tranche A Lender that is not a Participating Bank hereby agrees to
issue Tranche A Several Letters of Credit in Dollars at the request of and for
the account of each Designated Subsidiary Borrower from time to time during the
Availability Period in such Lender’s Applicable Percentage of such aggregate
stated amounts as such Designated Subsidiary Borrower may from time to time
request, (iii) each Tranche A Lender hereby agrees to purchase risk
participations in the obligations of the issuing Fronting Bank under Tranche A
Fronted Letters of Credit in an amount equal of such Tranche A Lender’s
Applicable Percentage of such obligations, and (iv) with respect to Tranche A
Several Letters of Credit, the applicable Fronting Bank shall be severally (and
not jointly) liable for an amount equal to its Applicable Percentage plus each
Participating Bank’s Applicable Percentage of the amount of such Several Letter
of Credit and each Participating Bank hereby agrees to purchase risk
participations in the obligations of such Fronting Bank under any such Tranche A
Several Letter of Credit in an amount equal to such Participating Bank’s
Applicable Percentage of such obligations; provided, however, that after giving
effect to any Credit Extension pursuant to this Section 2.01(a), (A) the Tranche
A L/C Obligations outstanding shall not exceed the combined Tranche A
Commitments, (B) the

 

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Tranche A L/C Obligations of any Designated Subsidiary Borrower shall not exceed
such Designated Subsidiary Borrower’s Borrowing Base, (C) the Tranche A L/C
Obligations of any Tranche A Lender will not exceed such Lender’s Tranche A
Commitment and (D) the total outstanding stated amount of Fronted Letters of
Credit shall not exceed the Fronted Letter of Credit Sublimit.

 

(b)                           Tranche B Commitment.  Upon and subject to the
terms and conditions hereof, (i) each Tranche B Lender severally agrees to make
loans in Dollars, Euros or Sterling (each such loan a “Loan”) to the Parent
Borrower and ACUS from time to time, on any Business Day, from time to time
during the Availability Period in an amount equal to such Tranche B Lender’s
Applicable Percentage of the requested Loan and (ii) as more fully set forth in
Section 2.03, (w) each Fronting Bank (subject to the definition thereof) hereby
agrees to issue Tranche B Fronted Letters of Credit in Dollars or an Alternative
Currency at the request of and for the account of ARC, ARL or the Parent
Borrower from time to time during the Availability Period, (x) each Tranche B
Lender that is not a Participating Bank hereby agrees to issue Tranche B Several
Letters of Credit in Dollars at the request of and for the account of ARC, ARL
or the Parent Borrower from time to time during the Availability Period in such
Lender’s Applicable Percentage of such aggregate stated amounts as such Borrower
may from time to time request, (y) each Tranche B Lender hereby agrees to
purchase risk participations in the obligations of the issuing Fronting Bank
under Tranche B Fronted Letters of Credit in an amount equal to such Tranche B
Lender’s Applicable Percentage of such obligations, and (z) with respect to
Tranche B Several Letters of Credit, the applicable Fronting Bank shall be
severally (and not jointly) liable for an amount equal to its Applicable
Percentage plus each Participating Bank’s Applicable Percentage of the amount of
each such Several Letter of Credit and each Participating Bank hereby agrees to
purchase risk participations in the obligations of such Fronting Bank under any
such Tranche B Several Letter of Credit in an amount equal to such Participating
Bank’s Applicable Percentage of such obligations; provided, however that, after
giving effect to any Tranche B Credit Extension, (A) the Tranche B Obligations
will not exceed the combined Tranche B Commitments, (B) the Tranche B
Obligations of any Tranche B Lender will not exceed such Lender’s Tranche B
Commitment, (C) Tranche B L/C Obligations of ARC shall not exceed $100,000,000
and the Tranche B L/C Obligations of ARL shall not exceed $100,000,000 and
(D) the total outstanding stated amount of Fronted Letters of Credit shall not
exceed the Fronted Letter of Credit Sublimit.  Within the foregoing limits, and
subject to the terms and conditions hereof, ARC, ARL, ACUS and the Parent
Borrower, may borrow under Section 2.02(a), prepay under Section 2.11(b) and
reborrow under Section 2.02(a).

 

2.02                        Borrowings, Conversions and Continuations of Loans.

 

(a)                           Each Borrowing, each conversion of Loans from one
Type to the other, and each continuation of Eurocurrency Rate Loans shall be
made upon the Parent Borrower’s or ACUS’s irrevocable notice to the
Administrative Agent, which may be given by telephone.  Each such notice must be
received by the Administrative Agent not later than 11:00 a.m. (i) three
Business Days prior to the requested date of any Borrowing of, conversion to or
continuation of Eurocurrency Rate Loans denominated in Dollars, (ii) four
Business Days (or five Business Days in the case of a Special Notice Currency)
prior to the requested date of any Borrowing or continuation

 

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of Eurocurrency Rate Loans denominated in Euros or Sterling and (iii) on the
requested date of any Borrowing of Base Rate Loans; provided, however, that if
the applicable Borrower wishes to request Eurocurrency Rate Loans having an
Interest Period other than one week, two week, one, two, three or six months in
duration as provided in the definition of “Interest Period,” the applicable
notice must be received by the Administrative Agent not later than 11:00 a.m.
(i) four Business Days prior to the requested date of such Borrowing of,
conversion to or continuation of Eurocurrency Rate Loans denominated in Dollars,
or (ii) five Business Days (or six Business Days in the case of a Special Notice
Currency) prior to the requested date of such Borrowing or continuation of
Eurocurrency Rate Loans denominated in Euros or Sterling whereupon the
Administrative Agent shall give prompt notice to the Lenders of such request and
determine whether the requested Interest Period is acceptable to all of them. 
If a different Interest Period is requested, not later than 11:00 a.m.,
(i) three Business Days before the requested date of such Borrowing of,
conversion to or continuation of Eurocurrency Rate Loans denominated in Dollars,
or (ii) four Business Days (or five Business Days in the case of a Special
Notice Currency) prior to the requested date of such Borrowing or continuation
of Eurocurrency Rate Loans denominated in Euros or Sterling the Administrative
Agent shall notify the applicable Borrower (which notice may be by telephone)
whether or not the requested Interest Period has been consented to by all the
Lenders.  Not later than 11:00 a.m., three Business Days before the requested
date of such Borrowing, conversion or continuation, the Administrative Agent
shall notify the applicable Borrower (which notice may be by telephone) whether
or not the requested Interest Period has been consented to by all the Lenders. 
Each telephonic notice by the applicable Borrower pursuant to this
Section 2.02(a) must be confirmed promptly by delivery to the Administrative
Agent of a written Loan Notice.  Each Borrowing of, conversion to or
continuation of Eurocurrency Rate Loans shall be in a principal amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof.  Except as
provided in Sections 2.03(c), each Borrowing of or conversion to Base Rate Loans
shall be in a principal amount of $500,000 or a whole multiple of $100,000 in
excess thereof.  Each Loan Notice (whether telephonic or written) shall specify
(i) whether the applicable Borrower is requesting a Borrowing, a conversion of
Loans from one Type to the other, or a continuation of Eurocurrency Rate Loans,
(ii) the requested date of the Borrowing, conversion or continuation, as the
case may be (which shall be a Business Day), (iii) the principal amount of Loans
to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or
to which existing Loans are to be converted and (v) if applicable, the duration
of the Interest Period with respect thereto.  If the applicable Borrower fails
to specify a Type of Loan in a Loan Notice or fails to give a timely notice
requesting a conversion or continuation, then the applicable Loans shall be made
as, or converted to, Base Rate Loans; provided, however, that in the case of a
failure to timely request a continuation of Loans denominated in an Alternative
Currency, such Loans shall be continued as Eurocurrency Rate Loans in their
original currency with an Interest Period of one month.  Any automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Eurocurrency Rate
Loans.  If the applicable Borrower requests a Borrowing of, conversion to, or
continuation of Eurocurrency Rate Loans in any such Loan Notice, but fails to
specify an Interest Period, it will be deemed to have specified an Interest
Period of one month.  No Loan may be converted into or continued as a Loan
denominated in a different currency, but

 

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instead must be prepaid in the original currency of such Loan and reborrowed in
the other currency.

 

(b)                           Following receipt of a Loan Notice, the
Administrative Agent shall promptly notify each Tranche B Lender of the amount
(and currency) of its Applicable Percentage of the applicable Loans, and if no
timely notice of a conversion or continuation is provided by the applicable
Borrower, the Administrative Agent shall notify each Tranche B Lender of the
details of any automatic conversion to Base Rate Loans or continuation of Loans
denominated in a currency other than Dollars, in each case as described in the
preceding subsection.  In the case of a Borrowing, each Tranche B Lender shall
make the amount of its Loan available to the Administrative Agent in Same Day
Funds at the Administrative Agent’s Office for the applicable currency not later
than 1:00 p.m., in the case of any Loan denominated in Dollars, and not later
than the Applicable Time specified by the Administrative Agent in the case of
any Loan in an Alternative Currency, in each case on the Business Day specified
in the applicable Loan Notice.  Upon satisfaction of the applicable conditions
set forth in Section 4.02 (and, if such Borrowing is the initial Credit
Extension, Section 4.01), the Administrative Agent shall make all funds so
received available to the Parent Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Parent Borrower
on the books of Bank of America with the amount of such funds or (ii) wire
transfer of such funds, in each case in accordance with instructions provided to
(and reasonably acceptable to) the Administrative Agent by the Parent Borrower;
provided, however, that if, on the date the Loan Notice with respect to such
Borrowing denominated in Dollars is given by the Parent Borrower, there are L/C
Borrowings of the Parent Borrower outstanding, then the proceeds of such
Borrowing, first, shall be applied to the payment in full of any such L/C
Borrowings, and, second, shall be made available to the Parent Borrower as
provided above.  Each Tranche B Lender may, at its option, make any Loan
available to the Parent Borrower by causing any foreign or domestic branch or
Affiliate of such Tranche B Lender to make such Loan; provided that any exercise
of such option shall not affect the obligation of the Parent Borrower to repay
such Loan in accordance with the terms of this Agreement and such branch or
Affiliate shall not have any voting rights hereunder which rights shall remain
with such Tranche B Lender.

 

(c)                            Except as otherwise provided herein, a
Eurocurrency Rate Loan may be continued or converted only on the last day of an
Interest Period for such Eurocurrency Rate Loan.  During the existence of a
Default, no Loans may be requested as, converted to or continued as Eurocurrency
Rate Loans (whether in Dollars or any Alternative Currency) without the consent
of the Majority Tranche B Lenders, and the Majority Tranche B Lenders may demand
that any or all of the then outstanding Eurocurrency Rate Loans denominated in
an Alternative Currency be redenominated into Dollars in the amount of the
Dollar Equivalent thereof, on the last day of the then current Interest Period
with respect thereto.

 

(d)                           The Administrative Agent shall promptly notify the
Parent Borrower and the Tranche B Lenders of the interest rate applicable to any
Interest Period for Eurocurrency Rate Loans upon determination of such interest
rate.  At any time that Base Rate Loans are outstanding, the Administrative
Agent shall notify the Parent Borrower and the Tranche B Lenders of

 

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any change in Bank of America’s prime rate used in determining the Base Rate
promptly following the public announcement of such change.

 

(e)                            After giving effect to all Borrowings, all
conversions of Loans from one Type to the other, and all continuations of Loans
as the same Type, there shall not be more than seven Interest Periods in effect
with respect to Loans.

 

2.03                        Letters of Credit.

 

(a)                           The Letter of Credit Commitments.

 

(i)                  Each request by a Borrower for the issuance or amendment of
a Letter of Credit shall be deemed to be a representation by such Borrower that
the L/C Credit Extension so requested complies with the conditions set forth in
Section 2.01(a) or (b), as applicable. Within the foregoing limits, and subject
to the terms and conditions hereof, the Borrowers’ ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrowers may, during the
Availability Period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed.

 

(ii)               The Applicable Issuing Party shall not issue any Letter of
Credit, if:

 

(A)                               subject to Section 2.03(b)(iii), the expiry
date of the requested Letter of Credit would occur more than twelve months after
the date of issuance or last extension, (or, (1) in the case of Letters of
Credit denominated in Canadian Dollars, thirteen months and (2) in the case of
Letters of Credit denominated in Australian Dollars, twenty-four months, in each
case solely if necessary for regulatory purposes) unless the Required Lenders
have approved such expiry date; or

 

(B)                               the expiry date of the requested Letter of
Credit would occur after the Letter of Credit Expiration Date, unless all the
Tranche A Lenders, with respect to Tranche A Letters of Credit, or all of the
Tranche B Lenders, with respect to Tranche B Letters of Credit have approved
such expiry date;

 

(C)                               if the Borrower requesting such Letter of
Credit is an Irish company, unless the beneficiary of such Letter of Credit is
neither habitually resident in Ireland nor has a place of establishment in
Ireland; or

 

(D)                               if such Letter of Credit is to be a Fronted
Letter of Credit, after giving effect thereto, the outstanding stated amount of
all Fronted Letters of Credit would exceed the Fronted Letter of Credit
Sublimit.

 

(iii)            An L/C Issuer shall not be under any obligation to issue any
Letter of Credit if:

 

(A)                               any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain such L/C Issuer from issuing such Letter of Credit, or any Law
applicable to such L/C Issuer or any request or directive (whether or

 

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not having the force of law) from any Governmental Authority with jurisdiction
over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain
from, the issuance of letters of credit generally or the Letter of Credit in
particular or shall impose upon such L/C Issuer with respect to the Letter of
Credit any restriction, reserve, capital or liquidity requirement (for which
such L/C Issuer is not otherwise compensated hereunder) not in effect on the
Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost
or expense which was not applicable on the Closing Date and which such L/C
Issuer in good faith deems material to it;

 

(B)                               the issuance of such Letter of Credit would
violate one or more policies of such L/C Issuer applicable to letters of credit
generally (it being acknowledged by each L/C Issuer that issuance of Letters of
Credit for purposes of supporting reinsurance and insurance obligations or to
meet insurance regulatory requirements would not violate any policy);

 

(C)                               except as otherwise agreed by the
Administrative Agent and the Applicable Issuing Party, the Letter of Credit is
in an initial stated amount less than $100,000;

 

(D)                               such Letter of Credit is to be denominated in
a currency other than Dollars or an Alternative Currency;

 

(E)                                in the case of a Several Letter of Credit,
(1) such Letter of Credit is not substantially in the form of Exhibit E
(provided that the Applicable Issuing Party can and will agree to reasonable
changes to such form, not adverse to interests of the applicable Lenders,
necessary to satisfy any then applicable requirements of the applicable
insurance regulators) or (2) any Lender has advised the applicable L/C
Administrator that it must be a Participating Bank with respect to such Several
Letter of Credit unless such Lender has entered into an agreement with a
Fronting Bank to front for such Lender under such Letter of Credit;

 

(F)                                 any Lender is at that time a Defaulting
Lender, unless, in the case of a Fronted Letter of Credit or a Several Letter of
Credit as to which such Defaulting Lender is a Participating Bank, the
applicable Fronting Bank (x) has entered into arrangements, including the
delivery of Cash Collateral, satisfactory to such Fronting Bank (in its sole
discretion) with such Lender or (y) has received Cash Collateral from (or
entered into other arrangements satisfactory to such Fronting Bank in its sole
discretion with) the Parent Borrower to eliminate such Fronting Bank’s actual or
potential Fronting Exposure (after giving effect to Section 2.16 (a)(iv)) with
respect to the Defaulting Lender arising from either the Letter of Credit then
proposed to be issued or that Fronted Letter of Credit and all other L/C
Obligations (including as Fronting Bank for a Participating Bank) as to which
such Fronting Bank has actual or potential Fronting Exposure, as it may elect in
its sole discretion; or

 

(G)                               such Letter of Credit contains any provisions
for automatic reinstatement of the stated amount after any drawing thereunder.

 

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(iv)           The Applicable Issuing Party shall not amend any Letter of Credit
if (A) the Applicable Issuing Party would not be permitted at such time to issue
the Letter of Credit in its amended form under the terms hereof, or (B) the
beneficiary of the Letter of Credit does not accept the proposed amendment to
the Letter of Credit.

 

(v)              Each L/C Administrator is hereby authorized to execute and
deliver each Several Letter of Credit and each amendment to a Several Letter of
Credit on behalf of (1) each Tranche A Lender, in the case of Tranche A Letters
of Credit and (2) each Tranche B Lender, in the case of Tranche B Letters of
Credit (unless such Lender has advised the applicable L/C Administrator that it
is a Participating Bank).  Each L/C Administrator shall use the Applicable
Percentage of an L/C Issuer under each Several Letter of Credit provided that
the applicable Fronting Bank for such Participating Bank shall be severally (and
not jointly) liable for an amount equal to its Applicable Percentage plus the
Applicable Percentage of each Participating Bank.  No L/C Administrator shall
amend any Several Letter of Credit to change the “Commitment shares” of a Lender
or add or delete a Lender liable thereunder unless such amendment is done in
connection with an assignment in accordance with Section 10.06, a change in the
Lenders and/or the Applicable Percentages as a result of any increase in the
Aggregate Commitments pursuant to Section 2.14 or any other addition or
replacement of a Lender in accordance with the terms of this Agreement or a
change in status of a Lender as a Participating Bank.  Fees owed by any
Participating Bank to the applicable Fronting Bank pursuant to
Section 2.03(i) shall accrue for the account of such Participating Bank only
during such period as such Lender is a Participating Bank with respect to any
such Several Letter of Credit.  Each Lender hereby irrevocably constitutes and
appoints each L/C Administrator its true and lawful attorney-in-fact for and on
behalf of such Lender with full power of substitution and revocation in its own
name or in the name of such L/C Administrator to issue, execute and deliver, as
the case may be, each Several Letter of Credit and each amendment to a Several
Letter of Credit and to carry out the purposes of this Agreement with respect to
Several Letters of Credit.  Upon request, each Lender shall execute such powers
of attorney or other documents as any beneficiary of any Several Letter of
Credit may reasonably request to evidence the authority of an L/C Administrator
to execute and deliver such Several Letter of Credit and any amendment or other
modification thereto on behalf of the Lenders.

 

(vi)           The Applicable Issuing Party shall act on behalf of the Lenders
with respect to any Letters of Credit issued by it and the documents associated
therewith, and the Applicable Issuing Party shall have all of the benefits and
immunities (A) provided to the Administrative Agent in Article IX with respect
to any acts taken or omissions suffered by the Applicable Issuing Party in
connection with Letters of Credit issued by it or proposed to be issued by it
and Issuer Documents pertaining to such Letters of Credit as fully as if the
term “Administrative Agent” as used in Article IX included the Fronting Banks
and the L/C Administrators with respect to such acts or omissions, and (B) as
additionally provided herein with respect to the Fronting Banks and the L/C
Administrators.

 

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(b)                           Procedures for Issuance and Amendment of Letters
of Credit; Auto-Extension Letters of Credit.

 

(i)                               Each Letter of Credit shall be issued or
amended, as the case may be, upon the request of the applicable Borrower
delivered to (x) the issuing Fronting Bank, in the case of Fronted Letters of
Credit and (y) the applicable L/C Administrator, in the case of Several Letters
of Credit (with a copy in each case to the Administrative Agent) in the form of
a Letter of Credit Application, appropriately completed and signed by a
Responsible Officer of the applicable Borrower.  Such Letter of Credit
Application must be received by the Applicable Issuing Party and the
Administrative Agent not later than 11:00 a.m. at least two Business Days (or
such later date and time as the Administrative Agent and the Applicable Issuing
Party may agree in a particular instance in their sole discretion) prior to the
proposed issuance date or date of amendment, as the case may be.  In the case of
a request for an initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the Applicable
Issuing Party: (A) the name of the account party, which shall be the applicable
Borrower; (B) the proposed issuance date of the requested Letter of Credit
(which shall be a Business Day); (C) the amount and currency thereof;
(D) whether such Letter of Credit is to be a Tranche A Letter of Credit or a
Tranche B Letter of Credit; (E) the expiry date thereof (which shall be the
earlier of the date which is twelve months from the date of issuance (or, (1) in
the case of Letters of Credit denominated in Canadian Dollars, thirteen months
and (2) in the case of Letters of Credit denominated in Australian Dollars,
twenty-four months, in each case solely if necessary for regulatory purposes))
or the Letter of Credit Expiration Date; (F) the name and address of the
beneficiary thereof; (G) the documents to be presented by such beneficiary in
case of any drawing thereunder; (H) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; (I) the purpose
and nature of the requested Letter of Credit; (J) whether such Letter of Credit
shall be an Auto-Extension Letter of Credit (as defined below); (K) whether such
Letter of Credit is to be a Fronted Letter of Credit (it being understood that
all Letters of Credit issued in Alternative Currencies shall be issued as
Fronted Letters of Credit) or a Several Letter of Credit; and, in the case of
Several Letters of Credit, in the event a Lender advises the applicable L/C
Administrator that such Lender is a Participating Bank, such Participating
Bank’s Applicable Percentage of such Several Letter of Credit will be issued by
the applicable Fronting Bank); (L) whether such Letter of Credit shall be issued
under the rules of the ISP or the UCP; and (M) such other matters as the
Applicable Issuing Party may require.  In the case of a request for an amendment
of any outstanding Letter of Credit, such Letter of Credit Application shall
specify in form and detail satisfactory to the Applicable Issuing Party (1) the
Letter of Credit to be amended; (2) the proposed date of amendment thereof
(which shall be a Business Day); (3) the nature of the proposed amendment; and
(4) such other matters as the Applicable Issuing Party may require. 
Additionally, the applicable Borrower shall furnish to the Applicable Issuing
Party and the Administrative Agent such other documents and information
pertaining to such requested Letter of Credit issuance or amendment, as the
Applicable Issuing Party or the Administrative Agent may reasonably require.

 

(ii)                            Promptly after receipt of any Letter of Credit
Application, the Applicable Issuing Party will confirm with the Administrative
Agent (by telephone or in writing) that the Administrative Agent has received a
copy of such Letter of Credit Application from the applicable Borrower

 

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and, if not, the Applicable Issuing Party will provide the Administrative Agent
with a copy thereof.  Unless the Applicable Issuing Party has received written
notice from any Lender, the Administrative Agent or the applicable Borrower, at
least one Business Day prior to the requested date of issuance or amendment of
the applicable Letter of Credit, that one or more applicable conditions
contained in Article IV shall not then be satisfied, then, subject to the terms
and conditions hereof, the Applicable Issuing Party shall, on the requested
date, issue a Letter of Credit for the account of the applicable Borrower or
enter into the applicable amendment, as the case may be, in each case in
accordance with the Applicable Issuing Party’s usual and customary business
practices.  Immediately upon the issuance of each Fronted Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the issuing Fronting Bank a risk participation in such Fronted
Letter of Credit in an amount equal to the product of such Lender’s Applicable
Percentage times the amount of such Letter of Credit and immediately upon the
issuance of a Several Letter of Credit in which a Fronting Bank has “fronted”
for a Participating Bank, each Participating Bank shall be deemed to, and hereby
irrevocably and unconditionally agrees to, without recourse or warranty,
purchase from such Fronting Bank a risk participation in such Several Letter of
Credit in an amount equal to the product of such Lender’s Applicable Percentage
times the amount of such Several Letter of Credit.

 

(iii)                         If the applicable Borrower so requests in any
applicable Letter of Credit Application, the Applicable Issuing Party may, in
its sole discretion, agree to issue a Letter of Credit that has automatic
extension provisions (each, an “Auto-Extension Letter of Credit”); provided that
any such Auto-Extension Letter of Credit must permit the Applicable Issuing
Party to prevent any such extension at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by giving prior
notice to the beneficiary thereof not later than a day (the “Non-Extension
Notice Date”) in each such twelve-month period to be agreed upon at the time
such Letter of Credit is issued.  Unless otherwise directed by the Applicable
Issuing Party, the applicable Borrower shall not be required to make a specific
request to the Applicable Issuing Party for any such extension.  Once an
Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to
have authorized (but may not require) the Applicable Issuing Party to permit the
extension of such Letter of Credit at any time to an expiry date not later than
the Letter of Credit Expiration Date; provided, however, that the Applicable
Issuing Party shall not permit any such extension if (A) the Applicable Issuing
Party has determined that it would not be permitted, or would have no
obligation, at such time to issue such Letter of Credit in its revised form (as
extended) under the terms hereof (by reason of the provisions of clause (ii) or
(iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may
be by telephone or in writing) on or before the day that is seven Business Days
before the Non-Extension Notice Date (1) from the Administrative Agent that the
Majority Tranche A Lenders or Majority Tranche B Lenders, as applicable, have
elected not to permit such extension or (2) from the Administrative Agent, any
Lender or the applicable Borrower that one or more of the applicable conditions
specified in Section 4.02 is not then satisfied, and in each such case directing
the Applicable Issuing Party not to permit such extension.

 

(iv)                        Promptly after its delivery of any Letter of Credit
or any amendment to a Letter of Credit to an advising bank with respect thereto
or to the beneficiary thereof, the Applicable Issuing

 

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Party will also deliver to the applicable Borrower and the Administrative Agent
a true and complete copy of such Letter of Credit or amendment.

 

(c)                            Drawings and Reimbursements; Funding of
Participations.

 

(i)                               Upon receipt from the beneficiary of any
Letter of Credit of any notice of a drawing under such Letter of Credit (a
“Drawing Request”), the Applicable Issuing Party shall notify the applicable
Borrower and the Administrative Agent of the receipt of such Drawing Request and
of the date the Applicable Issuing Party will honor such request (each such
date, an “Honor Date”).  Not later than 10:00 a.m. on the latter of (x) such
Honor Date in the case of Letters of Credit to be reimbursed in Dollars or the
Applicable Time on the Honor Date with respect to Letters of Credit to be
reimbursed in an Alternative Currency or (y) one Business Day after the date the
notice of such Drawing Request has been given (such date, the “Reimbursement
Date”), the applicable Borrower shall reimburse the respective L/C Issuers
through the Administrative Agent in Same Day Funds the amount of the Drawing
Request and, if such payment is made after the Honor Date, plus interest on such
amount at the Base Rate plus the Applicable Rate for Base Rate Loans from the
Honor Date to the Reimbursement Date.  In the case of a Fronted Letter of Credit
denominated in an Alternative Currency, the applicable Borrower shall reimburse
the applicable Fronting Bank through the Administrative Agent in such
Alternative Currency, unless (A) the applicable Fronting Bank (at its option)
shall have specified in such notice that it will require reimbursement in
Dollars, or (B) in the absence of any such requirement for reimbursement in
Dollars, such Borrower shall have notified the applicable Fronting Bank promptly
following receipt of notice of drawing that such Borrower will reimburse the
applicable Fronting Bank in Dollars.  In the case of any such reimbursement in
Dollars of a drawing under a Letter of Credit denominated in an Alternative
Currency, the Administrative Agent shall notify the applicable Borrower of the
Dollar Equivalent of the amount of the drawing promptly following the
determination thereof.  To the extent that Same Day Funds are received by the
Administrative Agent from the applicable Borrower prior to 11:00 a.m. (or the
Applicable Time in the case of any Letter of Credit to be reimbursed in an
Alternative Currency) on the Honor Date, the Administrative Agent shall remit
the funds so received to the Applicable Issuing Party.  Any notice given by the
Applicable Issuing Party or the Administrative Agent pursuant to this
Section 2.03(c)(i) may be given by telephone if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.

 

(ii)                            With respect to any Drawing Request, if Same Day
Funds are not received by the Administrative Agent from the applicable Borrower
prior to 11:00 a.m. (or the Applicable Time in the case of any Letter of Credit
to be reimbursed in an Alternative Currency) on the Honor Date in the amount of
such Drawing Request, the Administrative Agent shall promptly notify each
applicable Lender of such Drawing Request, the amount of the unreimbursed
drawing (the “Unreimbursed Amount”) and such Lender’s Applicable Percentage of
such Unreimbursed Amount.  If such Unreimbursed Amount relates to a Letter of
Credit issued in an Alternative Currency, such Unreimbursed Amount shall be the
Dollar Equivalent (as calculated by the issuing Fronting Bank using the Spot
Rate) of the Drawing Request.  Each Lender shall make funds available in Dollars
to the Administrative Agent for the account of the Applicable Issuing Party at
the Administrative Agent’s Office in an amount equal to its Applicable
Percentage of the Unreimbursed

 

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Amount not later than 1:00 p.m. on the Business Day specified in such notice by
the Administrative Agent (the “L/C Advance Date”).  The Administrative Agent
shall remit the funds so received to the Applicable Issuing Party.  To the
extent that Same Day Funds are received by the Administrative Agent from the
Lenders (or the applicable Fronting Bank on behalf of a Participating Bank) with
respect to a Several Letter of Credit prior to 2:00 p.m. on the L/C Advance
Date, the Administrative Agent shall notify the applicable L/C Administrator and
the applicable L/C Administrator shall promptly make such funds available to the
beneficiary of such Several Letter of Credit on such date.  To the extent that
the applicable L/C Administrator has not delivered funds to any beneficiary of a
Several Letter of Credit on behalf of a Lender on the L/C Advance Date, if Same
Day Funds are received by the Administrative Agent from such Lender: (i) after
2:00 p.m. on the L/C Advance Date, the L/C Administrator shall make such funds
available to such beneficiary on the next Business Day; (ii) prior to 2:00 p.m.
on any Business Day after the L/C Advance Date, the L/C Administrator shall make
those funds available to such beneficiary on such Business Day; and (iii) after
2:00 p.m. on any Business Day after the L/C Advance Date, the applicable L/C
Administrator shall make those funds available to such beneficiary on the next
Business Day following such Business Day.

 

(iii)                         Unless the Administrative Agent or the applicable
L/C Administrator receives notice from a Lender prior to any L/C Advance Date
with respect to a Several Letter of Credit that such Lender will not make
available as and when required hereunder to the Administrative Agent the amount
of such Lender’s L/C Advance on such L/C Advance Date, the Administrative Agent
and the applicable L/C Administrator may assume that such Lender has made such
amount available to the Administrative Agent in Same Day Funds on the L/C
Advance Date and the applicable L/C Administrator may (but shall not be
required), in reliance upon such assumption, make available to the beneficiary
of the related Several Letter of Credit on such date such Lender’s L/C Advance.

 

(iv)                        With respect to any Unreimbursed Amount, the
applicable Borrower shall be deemed to have incurred an L/C Advance in the
Dollar Equivalent of the Unreimbursed Amount on the Honor Date from (x) in the
case of Fronted Letters of Credit, the issuing Fronting Bank and (y) in the case
of Several Letters of Credit, from the Lenders to the extent that they have
provided funds with respect to such Several Letter of Credit pursuant to
Section 2.03(c)(ii), from the applicable Fronting Bank to the extent it has made
funds available on behalf of a Participating Bank or from the applicable L/C
Administrator to the extent it has made funds available on behalf of a Lender
pursuant to Section 2.03(c)(iii).  L/C Advances shall be due and payable on the
Reimbursement Date and thererafter on demand (together with interest) and shall
bear interest at the Base Rate plus the Applicable Rate for Base Rate Loans from
the Honor Date to the Reimbursement Date and thereafter at the Default Rate. 
Each Lender’s or Participating Bank’s payment to the Administrative Agent for
the account of a Fronting Bank pursuant to Section 2.03(c)(ii) shall be deemed
payment in respect of its participation in such L/C Advance and shall constitute
an L/C Advance from such Lender in satisfaction of its participation obligation
under this Section 2.03.  Any payment by a Borrower in respect of such L/C
Advance shall be made to the Administrative Agent and upon receipt distributed
by the Administrative Agent in accordance with Section 2.03(d).

 

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(v)                           Until each Lender funds its L/C Advance pursuant
to this Section 2.03(c) to reimburse a Fronting Bank (or the L/C Administrator
pursuant to Section 2.03(c)(iii)) for any amount drawn under any Letter of
Credit, interest in respect of such Lender’s Applicable Percentage of the
related L/C Borrowing shall be solely for the account of the relevant Fronting
Bank or the relevant L/C Administrator, as applicable.

 

(vi)                        Each Lender’s obligation to make L/C Advances to
reimburse the relevant issuing Fronting Bank (or the applicable L/C
Administrator pursuant to Section 2.03(c)(iii)) for amounts drawn under Letters
of Credit, as contemplated by this Section 2.03(c), shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
setoff, counterclaim, recoupment, defense or other right which such Lender may
have against the Administrative Agent, any Fronting Bank, any L/C Administrator,
any Lender, any Borrower, any beneficiary named in any Letter of Credit, any
transferee of any Letter of Credit (or any Persons for whom any such transferree
may be acting) or any other Person for any reason whatsoever, (B) the occurrence
or continuance of a Default, (C) any lack of validity or enforceability of such
Letter of Credit, this Agreement or any other Credit Document, (D) any draft,
certificate or any other document presented under any Letter of Credit proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect, (E) the surrender
or impairment of any security for the performance or observance of any of the
terms of the Credit Documents, (F) any matter or event set forth in
Section 2.03(b)(i), or (G) any other occurrence, event or condition, whether or
not similar to any of the foregoing.  No such making of an L/C Advance shall
relieve or otherwise impair the obligation of the applicable Borrower to
reimburse the respective L/C Issuers for the amount of any payment made by the
respective L/C Issuers under any Letter of Credit, together with interest as
provided herein.

 

(vii)                     If any Lender fails to make available to the
Administrative Agent for the account of a Fronting Bank or an L/C Administrator
any amount required to be paid by such Lender pursuant to the foregoing
provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii),
such Fronting Bank or such L/C Administrator, as the case may be, shall be
entitled to recover from such Lender (acting through the Administrative Agent),
on demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available
to such Fronting Bank or such L/C Administrator, as the case may be, at a rate
per annum equal to the Federal Funds Rate, plus any administrative, processing
or similar fees customarily charged by such Fronting Bank or such L/C
Administrator in connection with the foregoing.  A certificate of such Fronting
Bank or such L/C Administrator, as the case may be, submitted to any Lender
(through the Administrative Agent) with respect to any amounts owing under this
clause (vii) shall be conclusive absent manifest error.

 

(d)              Repayment of Participations.

 

(i)                  At any time after the Applicable Issuing Party has made a
payment under any Letter of Credit and has received from any Lender such
Lender’s L/C Advance in respect of such payment in accordance with
Section 2.03(c), if the Administrative Agent receives any payment in respect of
the related Unreimbursed Amount or interest thereon (whether directly from a
Borrower or otherwise, including proceeds of Cash Collateral applied thereto by
the Administrative

 

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Agent), the Administrative Agent will distribute to such Lender its Applicable
Percentage thereof in the same funds as those received by the Administrative
Agent.

 

(ii)                            If any payment received by the Administrative
Agent pursuant to Section 2.03(c)(i) is required to be returned under any of the
circumstances described in Section 10.05 (including pursuant to any settlement
entered into by the applicable Fronting Bank or other L/C Issuer in its
discretion), each Lender shall pay to the Administrative Agent for the account
of such Fronting Bank or L/C Administrator its Applicable Percentage thereof on
demand of the Administrative Agent, plus interest thereon from the date of such
demand to the date such amount is returned by such Lender, at a rate per annum
equal to the Federal Funds Rate from time to time in effect.  The obligations of
the Lenders under this clause shall survive the payment in full of the
Obligations and the termination of this Agreement.

 

(e)                            Obligations Absolute.  The obligation of a
Borrower to reimburse the respective L/C Issuers for each drawing under each
Letter of Credit as to each Letter of Credit issued for its account and to repay
each related L/C Borrowing shall be absolute, unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:

 

(i)                               any lack of validity or enforceability of such
Letter of Credit, this Agreement, or any other Credit Document;

 

(ii)                            the existence of any claim, counterclaim,
setoff, defense or other right that the Parent Borrower or any Subsidiary may
have at any time against any beneficiary or any transferee of such Letter of
Credit (or any Person for whom any such beneficiary or any such transferee may
be acting), the Applicable Issuing Party or any L/C Issuer or any other Person,
whether in connection with this Agreement, the transactions contemplated hereby
or by such Letter of Credit or any agreement or instrument relating thereto, or
any unrelated transaction;

 

(iii)                         any draft, demand, certificate or other document
presented under such Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under such Letter of Credit;

 

(iv)                        any adverse change in the relevant exchange rates or
in the availability of the relevant Alternative Currency to any Borrower or in
the relevant currency markets generally;

 

(v)                           any payment by the Applicable Issuing Party or L/C
Issuer under such Letter of Credit against presentation of a draft or
certificate that does not strictly comply with the terms of such Letter of
Credit; or any payment made by any Applicable Issuing Party or L/C Issuer under
such Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver

 

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or other representative of or successor to any beneficiary or any transferee of
such Letter of Credit, including any arising in connection with any proceeding
under any Debtor Relief Law; or

 

(vi)                        any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including any other circumstance
that might otherwise constitute a defense available to, or a discharge of, the
Parent Borrower or any Subsidiary.

 

The applicable Borrower shall promptly examine a copy of each Letter of Credit
and each amendment thereto that is delivered to it and, in the event of any
claim of noncompliance with the applicable Borrower’s instructions or other
irregularity, the applicable Borrower will immediately notify the Applicable
Issuing Party.  The applicable Borrower shall be conclusively deemed to have
waived any such claim against the Applicable Issuing Party and its
correspondents and the L/C Issuers unless such notice is given as aforesaid.

 

(f)                             Role of Applicable Issuing Party.  Each Lender
and each Borrower agree that, in paying any drawing under a Letter of Credit,
the Applicable Issuing Party shall not have any responsibility to obtain any
document (other than any sight draft, certificates and documents expressly
required by such Letter of Credit) or to ascertain or inquire as to the validity
or accuracy of any such document or the authority of the Person executing or
delivering any such document.  None of the Applicable Issuing Parties, the L/C
Issuers, the Lenders, the Administrative Agent, any of their respective Related
Parties nor any correspondent, participant or assignee of an Applicable Issuing
Party or L/C Issuer shall be liable to any Lender for (i) any action taken or
omitted in connection herewith at the request or with the approval of the
Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted
in the absence of gross negligence or willful misconduct; or (iii) the due
execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Issuer Document.  Each Borrower
hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude such Borrower
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement.  None of the Applicable Issuing
Parties, the L/C Issuers, the Lenders, the Administrative Agent, any of their
respective Related Parties nor any correspondent, participant or assignee of an
Applicable Issuing Party or L/C Issuer shall be liable or responsible for any of
the matters described in clauses (i) through (vi) of Section 2.03(e); provided,
however, that anything in such clauses to the contrary notwithstanding, the
applicable Borrower may have a claim against the Applicable Issuing Party and/or
the L/C Issuers, and the Applicable Issuing Party and/or the L/C Issuers may be
liable to the applicable Borrower, to the extent, but only to the extent, of any
direct, as opposed to consequential or exemplary, damages suffered by the
applicable Borrower which the applicable Borrower proves were caused by the
Applicable Issuing Party’s and/or a L/C Issuer’s willful misconduct or gross
negligence or the Applicable Issuing Party’s and/or a L/C Issuer’s willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit.  In furtherance and not in
limitation of the foregoing, the Applicable Issuing Party may accept documents
that appear on their face to be in order, without responsibility for further
investigation, and neither

 

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the Applicable Issuing Party nor any L/C Issuer shall be responsible for 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.  Any L/C Issuer may send a Letter of
Credit or conduct any communication to or from the beneficiary via the Society
for Worldwide Interbank Financial Telecommunication (“SWIFT”) message or
overnight courier, or any other commercially reasonable means of communicating
with a beneficiary.

 

(g)                            Applicability of ISP and UCP.  Unless otherwise
expressly agreed by the Applicable Issuing Party and the applicable Borrower
when a Letter of Credit is issued (including any such agreement applicable to an
Existing Letter of Credit), the rules of the ISP shall apply unless, for
regulatory purposes, the rules of the UCP must apply.  Notwithstanding the
foregoing, no L/C Issuer shall be responsible to any Borrower for, and no L/C
Issuer’s rights and remedies against any Borrower shall be impaired by, any
action or inaction of any such L/C Issuer required or permitted under any law,
order, or practice that is required or permitted to be applied to any Letter of
Credit or this Agreement, including the Law or any order of a jurisdiction where
such L/C Issuer or the beneficiary is located, the practice stated in the ISP or
UCP, as applicable, or in the decisions, opinions, practice statements, or
official commentary of the ICC Banking Commission, the Bankers Association for
Finance and Trade - International Financial Services Association (“BAFT-IFSA”),
or the Institute of International Banking Law & Practice, whether or not any
Letter of Credit chooses such law or practice.

 

(h)                           Letter of Credit Fees; Limitation of Liability. 
The applicable Borrower shall pay to the Administrative Agent for the account of
each Lender in accordance with its Applicable Percentage in Dollars, a Letter of
Credit fee (the “Letter of Credit Fee”) for each Letter of Credit equal to the
Applicable Rate times the Dollar Equivalent of the daily amount available to be
drawn under such Letter of Credit; provided, however, any Letter of Credit Fees
otherwise payable for the account of a Defaulting Lender with respect to any
Letter of Credit as to which such Defaulting Lender has not provided Cash
Collateral satisfactory to each Fronting Bank pursuant to this Section 2.03
shall be payable, to the maximum extent permitted by applicable Law, to the
other Lenders in accordance with the upward adjustments in their respective
Applicable Percentages allocable to such Letter of Credit pursuant to
Section 2.16(a)(iv), with the balance of such fee, if any, payable to the
issuing Fronting Bank for its own account.  For purposes of computing the daily
amount available to be drawn under any Letter of Credit, the amount of such
Letter of Credit shall be determined in accordance with Section 1.09.  Letter of
Credit Fees shall be (i) due and payable on the tenth Business Day after the end
of each March, June, September and December, commencing with the first such date
to occur after the issuance of such Letter of Credit, on the Letter of Credit
Expiration Date and thereafter on demand and (ii) computed on a quarterly basis
in arrears.  If there is any change in the Applicable Rate during any quarter,
the daily amount available to be drawn under each Letter of Credit shall be
computed and multiplied by the Applicable Rate separately for each period during
such quarter that such Applicable Rate was in effect.  Notwithstanding anything
to the contrary contained herein, upon the request of the Required Lenders,
while any Event of Default exists, all Letter of Credit Fees shall accrue at the
Default Rate.

 

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(i)                               Fronting Fee and Documentary and Processing
Charges Payable to Fronting Banks.

 

(i)                               Each Borrower shall pay directly to each
Fronting Bank for its own account in Dollars a fronting fee with respect to each
Fronted Letter of Credit issued for the account of such Borrower by such
Fronting Bank, at the rate per annum agreed to between the Parent Borrower and
such Fronting Bank, computed on the Dollar Equivalent of the daily amount
available to be drawn under such Letter of Credit which fronting fee shall be
(i) due and payable on the tenth Business Day after the end of each March, June,
September and December, commencing with the first such date to occur after the
issuance of such Letter of Credit, on the Letter of Credit Expiration Date and
thereafter on demand and (ii) computed on a quarterly basis in arrears, it being
understood that each Fronting Bank will invoice each Borrower directly for
amounts due under this Section 2.03(i).  For purposes of computing the daily
amount available to be drawn under any Letter of Credit, the amount of such
Letter of Credit shall be determined in accordance with Section 1.09.  In
addition, each Borrower shall pay directly to the Applicable Issuing Party for
its own account, in Dollars, the customary issuance, presentation, amendment and
other processing fees, and other standard costs and charges, of the issuing
Fronting Bank relating to letters of credit as from time to time in effect. 
Such fees are due and payable on demand and are nonrefundable.

 

(ii)                            Each Participating Bank with respect to a
Several Letter of Credit shall pay to the applicable Fronting Bank a fronting
fee (the “Several L/C Fronting Fee”) computed on the risk participation
purchased by such Participating Bank from such Fronting Bank with respect to
such Several Letter of Credit at the rate per annum specified in the fee letter
between such Participating Bank and such Fronting Bank.  Unless otherwise agreed
between such Participating Bank, such Fronting Bank and the Administrative
Agent, the Several L/C Fronting Fee shall be paid quarterly in arrears and each
Fronting Bank will invoice the Participating Banks for any Several L/C Fronting
Fees owed to it.

 

(j)                              Conflict with Issuer Documents.  In the event
of any conflict between the terms hereof and the terms of any Issuer Document,
the terms hereof shall control.

 

2.04                        Prepayments; Cash Collateralization.

 

(a)                           The Parent Borrower or ACUS, as applicable, may,
upon notice to the Administrative Agent, at any time or from time to time
voluntarily prepay Loans in whole or in part without premium or penalty;
provided that (i) such notice must be in a form acceptable to the Administrative
Agent and be received not later than 11:00 a.m. (A) three Business Days prior to
any date of prepayment of Eurocurrency Rate Loans denominated in Dollars,
(B) four Business Days (or five, in the case of prepayment of Loans denominated
in Special Notice Currencies) prior to any date of prepayment of Eurocurrency
Rate Loans denominated in Alternative Currencies, and (C) on the date of
prepayment of Base Rate Loans; (ii) any prepayment of Eurocurrency Rate Loans
denominated in Dollars shall be in a principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof; (iii) any prepayment of Eurocurrency
Rate Loans denominated in Alternative Currencies shall be in a minimum principal
amount of

 

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$5,000,000 or a whole multiple of $1,000,000 in excess thereof; and (iv) any
prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a
whole multiple of $100,000 in excess thereof or, in each case, if less, the
entire principal amount thereof then outstanding.  Each such notice shall
specify the date and amount of such prepayment and the Type(s) of Loans to be
prepaid and, if Eurocurrency Rate Loans are to be prepaid, the Interest
Period(s) of such Loans.  The Administrative Agent will promptly notify each
Tranche B Lender of its receipt of each such notice, and of the amount of such
Tranche B Lender’s Applicable Percentage of such prepayment.  The Parent
Borrower or ACUS, as applicable, shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein.  Any prepayment of a Eurocurrency Rate Loan shall be accompanied by all
accrued interest on the amount prepaid, together with any additional amounts
required pursuant to Section 3.05.  Each such prepayment shall be applied to the
Loans of the Tranche B Lenders in accordance with their respective Applicable
Percentages.

 

(b)                           If for any reason the Tranche B Outstandings at
any time exceed the aggregate Tranche B Commitments then in effect, the Parent
Borrower and/or ACUS, as applicable, shall immediately (or shall cause one or
more Designated Subsidiary Borrowers to) prepay Loans and/or Cash Collateralize
the Tranche B L/C Obligations in an aggregate amount equal to such excess;
provided, however, that neither the Parent Borrower nor ACUS shall be required
to Cash Collateralize the Tranche B L/C Obligations pursuant to this
Section 2.04(b) unless after the prepayment in full of the Loans the Tranche B
Outstandings exceed the aggregate Tranche B Commitments then in effect.

 

(c)                            If the Tranche B Obligations are accelerated
pursuant to Section 8.02, and until the final expiration date of all Tranche B
Letters of Credit and thereafter so long as any Tranche B L/C Obligations are
payable hereunder, the applicable Borrower shall immediately cash collateralize
its Tranche B Letters of Credit with Cash and Cash Equivalents in an amount
equal to 102% of the outstanding Tranche B L/C Obligations and shall deposit
such Cash and Cash Equivalents in a special collateral account pursuant to
arrangements satisfactory to the Administrative Agent at the Administrative
Agent’s office in the name of the Parent Borrower, ACUS, ARC or ARL, as
applicable, but under the sole dominion and control of the Administrative Agent,
for the benefit of the Fronting Banks and the Tranche B Lenders.

 

(d)                           Upon the request of the Parent Borrower or ACUS,
as applicable, made within two Business Days following any Revaluation Date, the
Administrative Agent will, so long as no Default then exists, release Cash
Collateral to the Parent Borrower, ACUS or the applicable Designated Subsidiary
Borrower, as the case may be, to the extent that such Cash Collateral is no
longer required pursuant to Section 2.04(b) or (c), as applicable.

 

(e)                            The Administrative Agent or the Applicable
Issuing Party may, at any time and from time to time after the initial deposit
of Cash Collateral pursuant to Section 2.04(b) or (c), request additional Cash
Collateral to the extent the amount of Cash Collateral provided pursuant thereto
is no longer sufficient due to exchange rate fluctuations.

 

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2.05                        Termination or Reduction of Commitments.  The Parent
Borrower may, upon notice to the Administrative Agent, terminate, or from time
to time permanently reduce, the Tranche A Commitments or the Tranche B
Commitments; provided that (i) any such notice shall be received by the
Administrative Agent not later than 11:00 a.m. five Business Days prior to the
date of termination or reduction, (ii) any such partial reduction shall be in an
aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess
thereof, (iii) the Parent Borrower shall not terminate or reduce the Tranche A
Commitments if, after giving effect thereto the Tranche A L/C Obligations would
exceed the amount of the aggregate Tranche A Commitments then in effect, and
(iv) the Parent Borrower shall not terminate or reduce the Tranche B Commitments
if, after giving effect thereto, the Tranche B Obligations would exceed the
aggregate Tranche B Commitments then in effect.  The Administrative Agent will
promptly notify the Lenders of any such notice of termination or reduction of
the Commitments.  Any reduction of the Commitments shall be applied to the
Commitment of each Lender according to its Applicable Percentage.  All fees
accrued until the effective date of any termination of the Commitments shall be
paid on the effective date of such termination.

 

2.06                        Repayment of Loans.  The Parent Borrower and ACUS,
as applicable, shall repay to the Lenders on the Maturity Date the aggregate
principal amount of Loans outstanding on such date.

 

2.07                        Interest.

 

(a)                           Subject to the provisions of subsection (b) below,
(i) each Eurocurrency Rate Loan shall bear interest on the outstanding principal
amount thereof for each Interest Period at a rate per annum equal to the
Eurocurrency Rate for such Interest Period plus the Applicable Rate; and
(ii) each Base Rate Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the Base
Rate plus the Applicable Rate.

 

(b)                           (i)  If any amount of principal of any Loan is not
paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.

 

(ii)                                  If any amount (other than principal of any
Loan) payable by a Borrower under any Credit Document is not paid when due
(without regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, then upon the request of the Required Lenders, such
amount shall thereafter bear interest at a fluctuating interest rate per annum
at all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.

 

(iii)                               Upon the request of the Required Lenders,
while any Event of Default exists, each Borrower shall pay interest on the
principal amount of all its outstanding Obligations hereunder at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Laws.

 

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(iv)                              Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and payable upon
demand.

 

(c)                            Interest on each Loan shall be due and payable in
arrears on each Interest Payment Date applicable thereto and at such other times
as may be specified herein.  Interest hereunder shall be due and payable in
accordance with the terms hereof before and after judgment, and before and after
the commencement of any proceeding under any Debtor Relief Law.

 

2.08                        Fees.  In addition to certain fees described in
subsections (h) and (i) of Section 2.03:

 

(a)                           Commitment Fee.  The Parent Borrower shall pay to
the Administrative Agent for the account of each Lender in accordance with its
Applicable Percentage, a commitment fee equal to (i) in the case of the Tranche
A Commitments, the Applicable Rate times the actual daily amount by which the
combined Tranche A Commitments exceed the Tranche A L/C Obligations and (ii) in
the case of the Tranche B Commitments, the Applicable Rate times the actual
daily amount by which the combined Tranche B Commitments exceed the Tranche B
Obligations.  The commitment fee shall accrue at all times during the
Availability Period, including at any time during which one or more of the
conditions in Article IV is not met, and shall be due and payable quarterly in
arrears on the tenth Business Day after the end of each March, June,
September and December, commencing with the first such date to occur after the
Closing Date, and on the last day of the Availability Period.  The commitment
fee shall be calculated quarterly in arrears, and if there is any change in the
Applicable Rate during any quarter, the actual daily amount shall be computed
and multiplied by the Applicable Rate separately for each period during such
quarter that such Applicable Rate was in effect.

 

(b)                           Other Fees.  The Borrowers shall pay to the
Arrangers and the Administrative Agent for their own respective accounts fees in
the amounts and at the times specified in the Fee Letters.  Such fees shall be
fully earned when paid and shall not be refundable for any reason whatsoever.

 

2.09                        Computation of Interest and Fees.  All computations
of interest for Base Rate Loans (including Base Rate Loans determined by
reference to the Eurocurrency Rate) shall be made on the basis of a year of 365
or 366 days, as the case may be, and actual days elapsed.  All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year), or, in the case of
interest in respect of Loans denominated in Alternative Currencies as to which
market practice differs from the foregoing, in accordance with such market
practice.  Interest shall accrue on each Loan for the day on which the Loan is
made, and shall not accrue on a Loan, or any portion thereof, for the day on
which the Loan or such portion is paid; provided that any Loan that is repaid on
the same day on which it is made shall, subject to Section 2.11(a), bear
interest for one day.  Each determination by the Administrative Agent of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.

 

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2.10                        Evidence of Debt.

 

(a)                           The Credit Extensions made by each Lender shall be
evidenced by one or more accounts or records maintained by such Lender and by
the Administrative Agent in the ordinary course of business.  The accounts or
records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error of the amount of the Credit Extensions made by
the Lenders to the Borrowers and the interest and payments thereon.  Any failure
to so record or any error in doing so shall not, however, limit or otherwise
affect the obligation of the Borrowers hereunder to pay any amount owing with
respect to the Obligations.  In the event of any conflict between the accounts
and records maintained by any Lender and the accounts and records of the
Administrative Agent in respect of such matters, the accounts and records of the
Administrative Agent shall control in the absence of manifest error.  Upon the
request of any Lender made through the Administrative Agent, the Parent Borrower
and ACUS shall execute and deliver to such Lender (through the Administrative
Agent) a Note, which shall evidence such Lender’s Loans in addition to such
accounts or records.  Each Lender may attach schedules to its Note(s) and
endorse thereon the date, Type (if applicable), amount and maturity of its Loans
and payments with respect thereto.

 

(b)                           In addition to the accounts and records referred
to in subsection (a), each Lender and the Administrative Agent shall maintain in
accordance with its usual practice accounts or records evidencing the purchases
and sales by such Lender of participations in Letters of Credit.  In the event
of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error.

 

2.11                        Payments Generally; Administrative Agent’s Clawback.

 

(a)                           General.  All payments to be made by the Borrowers
shall be made free and clear of and without condition or deduction for any
counterclaim, defense, recoupment or setoff.  Except as otherwise expressly
provided herein and except with respect to principal of and interest on Loans
denominated in an Alternative Currency, all payments by the Borrowers hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the applicable Administrative Agent’s
Office in Dollars and in Same Day Funds not later than 2:00 p.m. on the date
specified herein.  Except as otherwise expressly provided herein, all payments
by the Borrowers hereunder (i) in the case of principal and interest on Loans
denominated in an Alternative Currency shall be made to the Administrative
Agent, for the account of the respective Lenders to which such payment is owed,
(ii) in the case of Fronted Letters of Credit, to the Administrative Agent, for
the account of the issuing Fronting Bank, at the applicable Administrative
Agent’s Office in Dollars or the applicable Alternative Currency and in Same Day
Funds not later than the Applicable Time specified by the Administrative Agent
on the dates specified herein and (iii) in the case of Several Letters of
Credit, to the Administrative Agent, for the account of the Lenders who have
issued such Letter of Credit in each case at the applicable Administrative
Agent’s Office in Same Day Funds not later than the time specified by the
Administrative Agent on the dates specified herein. Without limiting the
generality of the foregoing, the Administrative Agent may require that any
payments due

 

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under this Agreement be made in the United States.  If, for any reason, any
Borrower is prohibited by any Law from making any required payment hereunder in
an Alternative Currency, such Borrower shall make such payment in Dollars equal
to the Dollar Equivalent of the Alternative Currency payment amount.  The
Administrative Agent will promptly distribute to each Lender its Applicable
Percentage (or other applicable share as provided herein) of such payment in
like funds as received by wire transfer to such Lender’s Lending Office.  All
payments received by the Administrative Agent (i) after 2:00 p.m., in the case
of payments in Dollars, or (ii) after the Applicable Time specified by the
Administrative Agent in the case of payments in an Alternative Currency, shall
in each case be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue.  If any payment to be made
by any Borrower shall come due on a day other than a Business Day, payment shall
be made on the next following Business Day, and such extension of time shall be
reflected in computing interest or fees, as the case may be.

 

(b)                           (i)  Funding by Lenders; Presumption by
Administrative Agent.  Unless the Administrative Agent shall have received
notice from a Lender prior to the proposed date of any Borrowing of Eurocurrency
Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00
noon on the date of such Borrowing) that such Lender will not make available to
the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with Section 2.02 (or, in the case of a Borrowing of
Base Rate Loans, that such Lender has made such share available in accordance
with and at the time required by Section 2.02) and may, in reliance upon such
assumption, make available to the applicable Borrower a corresponding amount. 
In such event, if a Lender has not in fact made its share of the applicable
Borrowing available to the Administrative Agent, then the applicable Lender and
the applicable Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount in Same Day Funds with interest
thereon, for each day from and including the date such amount is made available
to such Borrower to but excluding the date of payment to the Administrative
Agent, at (A) in the case of a payment to be made by such Lender, the Overnight
Rate, plus any administrative, processing or similar fees customarily charged by
the Administrative Agent in connection with the foregoing, and (B) in the case
of a payment to be made by such Borrower, the interest rate applicable to Base
Rate Loans.  If such Borrower and such Lender shall pay such interest to the
Administrative Agent for the same or an overlapping period, the Administrative
Agent shall promptly remit to such Borrower the amount of such interest paid by
such Borrower for such period.  If such Lender pays its share of the applicable
Borrowing to the Administrative Agent, then the amount so paid shall constitute
such Lender’s Loan included in such Borrowing.  Any payment by such Borrower
shall be without prejudice to any claim such Borrower may have against a Lender
that shall have failed to make such payment to the Administrative Agent.

 

(ii)                                  Payments by Borrowers; Presumptions by
Administrative Agent.  Unless the Administrative Agent shall have received
notice from a Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Fronting Banks
hereunder that such Borrower will not make such payment, the Administrative
Agent may assume that such Borrower has made such payment on such date in
accordance herewith and may,

 

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in reliance upon such assumption, distribute to the Lenders or such Fronting
Bank, as the case may be, the amount due.  In such event, if such Borrower has
not in fact made such payment, then each of the Lenders or such Fronting Bank,
as the case may be, severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender or such Fronting
Bank, in immediately available funds with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the Overnight Rate.

 

A notice of the Administrative Agent to any Lender or any Borrower with respect
to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.

 

(c)                            Failure to Satisfy Conditions Precedent.  If any
Lender makes available to the Administrative Agent funds for any Loan to be made
by such Lender as provided in the foregoing provisions of this Article II, and
such funds are not made available to the applicable Borrower by the
Administrative Agent because the conditions to the applicable Credit Extension
set forth in Article IV are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.

 

(d)                           Obligations of Lenders Several.  The obligations
of the Lenders hereunder to make Loans, to fund Several Letters of Credit, to
purchase participations in Letters of Credit and to make payments pursuant to
Section 10.04(c) are several and not joint.  The failure of any Lender to make
any Loan, to fund any Several Letter of Credit, to purchase a participation in
any Letter of Credit or to make any payment under Section 10.04(c) on any date
required hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible for the
failure of any other Lender to so make its Loan, to fund a Several Letter of
Credit, to purchase its participation in a Letter of Credit or make its payment
under Section 10.04(c).

 

(e)                            Funding Source.  Nothing herein shall be deemed
to obligate any Lender to obtain the funds for any Loan in any particular place
or manner or to constitute a representation by any Lender that it has obtained
or will obtain the funds for any Loan in any particular place or manner.

 

2.12                        Sharing of Payments by Lenders.  If any Lender
shall, by exercising any right of setoff or counterclaim or otherwise, obtain
payment in respect of any principal of or interest on any of the Loans made by
it, or in L/C Obligations held by it, resulting in such Lender’s receiving
payment of a proportion of the aggregate amount of such Loans or L/C Obligations
and accrued interest thereon greater than its pro rata share thereof as provided
herein, then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value)
participations in the Loans and participations or subparticipations in L/C
Obligations of the other Lenders, or make such other adjustments as shall be
equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Total Outstandings and other amounts owing
them, provided that:

 

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(i)                               if any such participations or
subparticipations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations or subparticipations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest; and

 

(ii)                            the provisions of this Section shall not be
construed to apply to (x) any payment made by or on behalf of a Borrower
pursuant to and in accordance with the express terms of this Agreement
(including the application of funds arising from the existence of a Defaulting
Lender), (y) the application of Cash Collateral provided for in Section 2.15, or
(z) any payment obtained by a Lender as consideration for the assignment of or
sale of a participation in any of its Loans or subparticipations in L/C
Obligations to any assignee or participant, other than an assignment to the
Parent Borrower or any Subsidiary thereof (as to which the provisions of this
Section shall apply).

 

Each Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of such Borrower in the amount of
such participation.

 

2.13                        Designated Subsidiary Borrowers.

 

(a)                           The Parent Borrower may at any time, upon not less
than 10 Business Days’ notice to the Administrative Agent, designate any
additional Subsidiary of the Parent Borrower (an “Applicant Borrower”) as a
Designated Subsidiary Borrower to request Tranche A Letters of Credit hereunder
by delivering to the Administrative Agent (which shall promptly deliver
counterparts thereof to each Lender) a duly executed notice and agreement in
substantially the form of Exhibit H (a “Designated Subsidiary Borrower Request
and Assumption Agreement”).  The parties hereto acknowledge and agree that prior
to any Applicant Borrower becoming entitled to utilize the credit facilities
provided for herein such Applicant Borrower shall have executed a Security
Agreement and a Control Agreement and the Administrative Agent and the Tranche A
Lenders shall have received such supporting resolutions, incumbency
certificates, opinions of counsel and other documents or information, in form,
content and scope reasonably satisfactory to the Administrative Agent, as may be
required by the Administrative Agent or the Majority Tranche A Lenders in their
sole discretion.  If the Administrative Agent and the Tranche A Lenders agree
that an Applicant Borrower shall be entitled to request Tranche A Letters of
Credit hereunder, then promptly following receipt of all such Security Documents
and requested resolutions, incumbency certificates, opinions of counsel and
other documents or information, the Administrative Agent shall send a notice in
substantially the form of Exhibit I (a “Designated Subsidiary Borrower
Notice”) to the Parent Borrower and the Tranche A Lenders specifying the
effective date upon which such Applicant Borrower shall constitute a Designated
Subsidiary Borrower for purposes hereof, whereupon each of the Tranche A Lenders
agrees to permit such Designated Subsidiary Borrower to request Tranche A
Letters of Credit hereunder, on the terms and conditions set forth herein, and
each of the parties agrees that such Designated Subsidiary Borrower otherwise
shall be a Borrower for all purposes of this Agreement; provided that no

 

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Letter of Credit Application may be submitted by or on behalf of such Designated
Subsidiary Borrower until the date five Business Days after such effective date.

 

(b)                           The Parent Borrower may at any time, upon not less
than 10 Business Days’ notice to the Administrative Agent (or such shorter
notice as the Administrative Agent may permit), designate any Applicant Borrower
as a Designated Subsidiary Borrower to request Loans or Tranche B Letters of
Credit hereunder by delivering to the Administrative Agent (which shall promptly
deliver counterparts thereof to each Tranche B Lender) a duly executed
Designated Subsidiary Borrower Request and Assumption Agreement with appropriate
changes to reflect whether such Applicant Borrower may request Loans or Tranche
B Letters of Credit).  The parties hereto acknowledge and agree that prior to
any Applicant Borrower becoming entitled to utilize the Tranche B Commitment the
Administrative Agent and the Tranche B Lenders shall have received such
supporting resolutions, incumbency certificates, opinions of counsel and other
documents or information, in form, content and scope reasonably satisfactory to
the Administrative Agent, as may be required by the Administrative Agent or the
Majority Tranche B Lenders in their sole discretion.  If the Administrative
Agent and the Tranche B Lenders agree that an Applicant Borrower shall be
entitled to request Loans or Tranche B Letters of Credit hereunder, then
promptly following receipt of all such requested resolutions, incumbency
certificates, opinions of counsel and other documents or information, the
Administrative Agent shall send a Designated Subsidiary Borrower Notice to the
Parent Borrower and the Tranche B Lenders specifying the effective date upon
which such Applicant Borrower shall constitute a Designated Subsidiary Borrower
under the Tranche B Commitment, whereupon each of the Tranche B Lenders agrees
to permit such Designated Subsidiary Borrower to request Loans or Tranche B
Letters of Credit hereunder, as the case may be, on the terms and conditions set
forth herein, and each of the parties agrees that such Designated Subsidiary
Borrower otherwise shall be a Borrower for all purposes of this Agreement;
provided that no request for a Credit Extension may be submitted by or on behalf
of such Designated Subsidiary Borrower until the date five Business Days after
such effective date (or such shorter period as may be acceptable to the Tranche
B Lenders)

 

(c)                            The Obligations of the Parent Borrower (except as
otherwise provided herein or in any other Credit Document) and the Obligations
of each Designated Subsidiary Borrower shall be several in nature and no
Designated Subsidiary Borrower will be liable for the Obligations of another
Borrower.  The Parent Borrower will advise the Administrative Agent as to any
change in the Facility-wide Liability Percentages of the Borrowers resulting
from any addition or release of a Designated Subsidiary Borrower and the
Administrative Agent will provide a revised Schedule 1.01(c) reflecting such
change to the Parent Borrower and the Lenders.

 

(d)                           Each Subsidiary of the Parent Borrower that is or
becomes a “Designated Subsidiary Borrower” pursuant to this Section 2.13 hereby
irrevocably appoints the Parent Borrower as its agent for all purposes relevant
to this Agreement and each of the other Credit Documents, including (i) the
giving and receipt of notices and (ii) the execution and delivery of all
documents, instruments and certificates contemplated herein and all
modifications hereto.  Any acknowledgment, consent, direction, certification or
other action which might otherwise be valid or effective only if given or taken
by all Borrowers, or by each Borrower acting singly, shall be

 

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valid and effective if given or taken only by the Parent Borrower, whether or
not any such other Borrower joins therein.  Any notice, demand, consent,
acknowledgement, direction, certification or other communication delivered to
the Parent Borrower in accordance with the terms of this Agreement shall be
deemed to have been delivered to each Designated Subsidiary Borrower.

 

(e)                            The Parent Borrower may from time to time, upon
not less than 5 Business Days’ notice from the Parent Borrower to the
Administrative Agent (or such shorter period as may be agreed by the
Administrative Agent in its sole discretion), terminate a Designated Subsidiary
Borrower’s status as such, provided that there are no Letters of Credit issued
for the account of such Designated Subsidiary Borrower or other amounts payable
by such Designated Subsidiary Borrower on account of any Letters of Credit
issued for its account or Loans outstanding to such Designated Subsidiary
Borrower, as of the effective date of such termination. Termination of ACUS as a
Designated Subsidiary Borrower shall not release ACUS from its obligations under
the ACUS Guarantee.  The Administrative Agent will promptly notify the Lenders
of any such termination of a Designated Subsidiary Borrower’s status.

 

2.14                        Increase in Commitments.

 

(a)                           Request for Increases to Commitments.  The Parent
Borrower shall have the right at any time prior to the date that is 30 days
prior to the Maturity Date to increase the Tranche A Commitments hereunder by an
amount (for all such requests) not exceeding $500,000,000  and to increase the
Tranche B Commitments hereunder by an amount (for all such requests) not
exceeding $200,000,000 by adding to this Agreement one or more other Eligible
Assignees (which may include any existing Lender, with the consent of such
Lender in its sole discretion) (each such bank, a “Supplemental Lender”) with
the approval of (x) the Administrative Agent (which approval shall not be
unreasonably withheld or delayed); provided that no consent of the
Administrative Agent will be required in the case of any such Eligible Assignee
that is a Lender or an Affiliate of a Lender and (y) each Fronting Bank (which
approval shall not be unreasonably withheld or delayed), provided that (i) each
Supplemental Lender shall have entered into an agreement pursuant to which such
Supplemental Lender shall undertake a Commitment (or, if such Supplemental
Lender is an existing Lender, pursuant to which its Commitment shall be
increased), (ii) such Commitment of any Supplemental Lender that is not an
existing Lender shall be in an amount of at least $25,000,000, (iii) such
Commitment (together with the increased Commitment(s) of all other Supplemental
Lenders being provided at such time) shall be in an aggregate amount of at least
$25,000,000, and (iv) if such Supplemental Lender will need to be a
Participating Bank, a Fronting Bank shall have agreed to front for such
Supplemental Lender under Several Letters of Credit on terms satisfactory to
such Fronting Bank.

 

(b)                           Required Supplemental Lender Documentation.  Each
such Supplemental Lender shall enter into an agreement in form and substance
satisfactory to the Parent Borrower and the Administrative Agent and its counsel
pursuant to which such Supplemental Lender shall, as of the effective date of
such increase in the Commitments (which shall be a Business Day and, unless the
Administrative Agent otherwise agrees, on which no issuance, amendment, renewal
or extension of any Letter of Credit is scheduled to occur or no Borrowing is
scheduled to be made, each a “Supplemental Commitment Date”), undertake a
Commitment (or, if any such

 

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Supplemental Lender is an existing Lender, its Commitment shall be in addition
to such Lender’s Commitment hereunder on such date) and such Supplemental Lender
shall thereupon become (or continue to be) a “Lender” for all purposes hereof.

 

(c)                            Conditions to Effectiveness of Increase. 
Notwithstanding the foregoing, no increase in the aggregate Commitments
hereunder pursuant to this Section shall be effective unless:

 

(i)                               the Parent Borrower shall have given the
Administrative Agent notice of any such increase at least ten Business Days
prior to the applicable Supplemental Commitment Date;

 

(ii)                            no Default shall have occurred and be continuing
on the applicable Supplemental Commitment Date; and

 

(iii)                         the Parent Borrower shall have delivered to the
Administrative Agent a certificate of each Borrower under the Commitment being
increased dated as of the Supplemental Commitment Date signed by a Responsible
Officer of such Borrower (x) certifying and attaching the resolutions adopted by
such Borrower approving or consenting to such increase, and (y) certifying that,
before and after giving effect to such increase, (A) each of the representations
and warranties of the Borrowers contained in this Agreement and the other Credit
Documents shall be true in all material respects on and as of the applicable
Supplemental Commitment Date with the same force and effect as if made on and as
of such date (or, if any such representation or warranty is expressly stated to
have been made as of a specific date, as of such specific date); and (B) no
Default exists.

 

(d)                           Revised Percentages and Letter of Credit
Amendments.  The Administrative Agent shall promptly notify the Lenders of the
new Applicable Percentages after giving effect to the Supplemental Commitment.
Promptly after the Supplemental Commitment Date, the L/C Administrators shall
amend the outstanding Several Letters of Credit under the Commitment being
increased to reflect the new “Commitment share” of each Lender (including the
Supplemental Lenders) and prior to the date a Several Letter of Credit has been
amended to give effect to such new “Commitment share,” each Supplemental Lender
shall be deemed to irrevocably and unconditionally purchase from each Lender who
has issued such Several Letter of Credit, a risk participation in such Several
Letter of Credit in an amount such that after giving effect to such purchase,
each Lender (including the Supplemental Lender) has its Applicable Percentage of
such Several Letter of Credit.  In the event of an increase in the Tranche B
Commitments, on the Supplemental Commitment Date, the Administrative Agent will
reallocate the Loans among the Tranche B Lenders to reflect the new Applicable
Percentages of the Tranche B Lenders, the Supplemental Lender shall pay the
Administrative Agent its Applicable Percentage of the outstanding Loans and the
Parent Borrower shall pay compensation, if any, to the Lenders under
Section 3.05 resulting from such reallocation as if such reallocation were a
prepayment.

 

(e)                            Conflicting Provisions.  This Section shall
supersede any provisions in Section 2.12 or 10.01 to the contrary.

 

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2.15                        Cash Collateral.

 

(a)                           Certain Credit Support Events.  At any time that a
Tranche B Lender is a Defaulting Lender, immediately upon the request of the
Administrative Agent or a Fronting Bank, the Parent Borrower shall deliver (or
shall cause the Designated Subsidiary Borrowers to deliver) to the
Administrative Agent Cash Collateral or Cash Equivalents in an amount sufficient
to cover 102% of all Fronting Exposure of such Fronting Bank with respect to
Tranche B Letters of Credit (after giving effect to Section 2.16(a)(iv) and any
Cash Collateral provided by the Defaulting Lender).

 

(b)                           Grant of Security Interest.  All Cash Collateral
(other than credit support not constituting funds subject to deposit) shall be
maintained (x) in the case of funds deposited by a Borrower, in a blocked
deposit or securities account at the Administrative Agent or such other
financial institution as is acceptable to the Administrative Agent (each, a
“Borrower L/C Collateral Account”) which shall be invested in Eligible
Securities and (y) in the case of Cash Collateral provided by a Defaulting
Lender, in blocked, non-interest bearing deposit accounts at the Administrative
Agent.  Each Borrower, and to the extent provided by any Lender, such Lender,
hereby grants to (and subjects to the control of) the Administrative Agent, for
the benefit of the Administrative Agent, the Fronting Banks and the Lenders, and
agrees to maintain, a first priority security interest in all such cash and
deposit accounts and all balances in its Borrower L/C Collateral Account, and
all other property so provided as collateral pursuant hereto, and in all
proceeds of the foregoing, all as security for the obligations to which such
Cash Collateral may be applied pursuant to Section 2.15(c) and shall execute
such additional documents as the Administrative Agent may reasonably request to
ensure that the Administrative Agent, for the benefit of the Administrative
Agent, the Fronting Banks and the Lenders, has a first priority security
interest in such Cash Collateral.  If at any time the Administrative Agent
determines that Cash Collateral is subject to any right or claim of any Person
other than the Administrative Agent as herein provided, or that the total amount
of such Cash Collateral is less than the applicable Fronting Exposure and other
obligations secured thereby, the applicable Borrower or the relevant Defaulting
Lender will, promptly upon demand by the Administrative Agent, pay or provide to
the Administrative Agent additional Cash Collateral in an amount sufficient to
eliminate such deficiency.

 

(c)                            Application.  Notwithstanding anything to the
contrary contained in this Agreement, Cash Collateral provided under any of this
Section 2.15 or Sections 2.03, 2.04, 2.16 or 8.02 in respect of Letters of
Credit shall be held and applied to the satisfaction of the specific L/C
Obligations, obligations to fund participations therein (including, as to Cash
Collateral provided by a Defaulting Lender, any interest accrued on such
obligation) and other obligations for which the Cash Collateral was so provided,
prior to any other application of such property as may be provided for herein.

 

(d)                           Release.  Cash Collateral (or the appropriate
portion thereof) provided to reduce Fronting Exposure or other obligations shall
be released promptly following (i) the elimination of the applicable Fronting
Exposure or other obligations giving rise thereto (including by the termination
of Defaulting Lender status of the applicable Lender (or, as appropriate, its
assignee

 

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following compliance with Section 10.06(b)(vi))) or (ii) the Administrative
Agent’s good faith determination that there exists excess Cash Collateral;
provided, however, (x) that Cash Collateral furnished by or on behalf of a
Borrower shall not be released during the continuance of a Default (and
following application as provided in this Section 2.15 may be otherwise applied
in accordance with Section 8.03), and (y) the Person providing Cash Collateral
and the applicable Fronting Bank may agree that Cash Collateral shall not be
released but instead held to support future anticipated Fronting Exposure or
other obligations.

 

2.16                        Defaulting Lenders.

 

(a)                           Adjustments.  Notwithstanding anything to the
contrary contained in this Agreement, if any Lender becomes a Defaulting Lender,
then, until such time as that Lender is no longer a Defaulting Lender, to the
extent permitted by applicable Law:

 

(i)                               Waivers and Amendments.  That Defaulting
Lender’s right to approve or disapprove any amendment, waiver or consent with
respect to this Agreement shall be restricted as set forth in Section 10.01.

 

(ii)                            Reallocation of Payments.  Any payment of
principal, interest, fees or other amounts received by the Administrative Agent
for the account of that Defaulting Lender (whether voluntary or mandatory, at
maturity, pursuant to Article VIII or otherwise, and including any amounts made
available to the Administrative Agent by that Defaulting Lender pursuant to
Section 10.08), shall be applied at such time or times as may be determined by
the Administrative Agent as follows: first, to the payment of any amounts owing
by that Defaulting Lender to the Administrative Agent hereunder; second, to the
payment on a pro rata basis of any amounts owing by that Defaulting Lender
(including amounts owed in its capacity as a Participating Bank) to the Fronting
Banks hereunder; third, if so determined by the Administrative Agent or
requested by a Fronting Bank, to be held as Cash Collateral for future funding
obligations of that Defaulting Lender of any participation in any Fronted Letter
of Credit or Several Letter of Credit as to which it is a Participating Bank;
fourth, as the Parent Borrower may request (so long as no Default exists), to
the funding of any Loan or Cash Collateralization of any Several Letter of
Credit in respect of which that Defaulting Lender has failed to fund its portion
thereof as required by this Agreement, as determined by the Administrative
Agent; fifth, if so determined by the Administrative Agent and the Parent
Borrower, to be held in a non-interest bearing deposit account and released
in order to satisfy obligations of that Defaulting Lender to fund Loans or
Several Letters of Credit under this Agreement; sixth, to the payment of any
amounts owing to the Lenders or the Fronting Banks as a result of any judgment
of a court of competent jurisdiction obtained by any Lender or any Fronting Bank
against that Defaulting Lender as a result of that Defaulting Lender’s breach of
its obligations under this Agreement; seventh, so long as no Default exists, to
the payment of any amounts owing to the applicable Borrower as a result of any
judgment of a court of competent jurisdiction obtained by such Borrower against
that Defaulting Lender as a result of that Defaulting Lender’s breach of its
obligations under this Agreement; and eighth, to that Defaulting Lender or as
otherwise directed by a court of competent jurisdiction;

 

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provided that if (x) such payment is a payment of the principal amount of any
Loans or L/C Borrowings in respect of which that Defaulting Lender has not fully
funded its appropriate share and (y) such Loans or L/C Borrowings were made at a
time when the conditions set forth in Section 4.02 were satisfied or waived,
such payment shall be applied solely to pay the Loans of, and L/C Borrowings
owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied
to the payment of any Loans of, or L/C Borrowings owed to, that Defaulting
Lender.  Any payments, prepayments or other amounts paid or payable to a
Defaulting Lender that are applied (or held) to pay any amount owed by a
Defaulting Lender or to post Cash Collateral pursuant to this
Section 2.16(a)(ii) shall be deemed paid to and redirected by that Defaulting
Lender, and each Lender irrevocably consents thereto.

 

(iii)                         Certain Fees.  That Defaulting Lender (x) shall
not be entitled to receive a commitment fee pursuant to Section 2.08(a) and
(y) shall be limited in its right to receive Letter of Credit Fees as provided
in Section 2.03(h).

 

(iv)                        Reallocation of Applicable Percentages to Reduce
Fronting Exposure.  During any period in which there is a Defaulting Lender, for
purposes of computing the amount of the obligation of each non-Defaulting Lender
to acquire, refinance or fund participations in Fronted Letters of Credit
pursuant to Section 2.03, the “Applicable Percentage” of each non-Defaulting
Lender shall be computed without giving effect to the Commitment of that
Defaulting Lender; provided, that, (i) each such reallocation shall be given
effect only if, at the date the applicable Lender becomes a Defaulting Lender,
no Default exists; and (ii) such reallocation shall be given effect only to the
extent that the aggregate obligation of each non-Defaulting Lender to issue,
acquire, refinance or fund participations in Letters of Credit shall not exceed
the positive difference, if any, of (1) the Commitment of that non-Defaulting
Lender minus (2) the aggregate Outstanding Amount of that Lender.

 

(b)                           Defaulting Lender Cure.  If the Parent Borrower,
the Administrative Agent and the Fronting Banks agree in writing in their sole
discretion that a Defaulting Lender should no longer be deemed to be a
Defaulting Lender, the Administrative Agent will so notify the parties hereto,
whereupon as of the effective date specified in such notice and subject to any
conditions set forth therein (which may include arrangements with respect to any
Cash Collateral), that Lender will, to the extent applicable, purchase that
portion of outstanding Loans of the other Lenders or take such other actions as
the Administrative Agent may determine to be necessary to cause the Loans and
funded and unfunded participations in Letters of Credit to be held on a pro rata
basis by the Lenders in accordance with their Applicable Percentages (without
giving effect to Section 2.16(a)(iv)), whereupon that Lender will cease to be a
Defaulting Lender; provided that no adjustments will be made retroactively with
respect to fees accrued or payments made by or on behalf of a Borrower while
that Lender was a Defaulting Lender; and provided, further, that except to the
extent otherwise expressly agreed by the affected parties, no change hereunder
from Defaulting Lender to Lender will constitute a waiver or release of any
claim of any party hereunder arising from that Lender’s having been a Defaulting
Lender.

 

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ARTICLE III.  TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01                        Taxes.

 

(a)                                 Payments Free of Taxes; Obligation to
Withhold; Payments on Account of Taxes.

 

(i)                                     Any and all payments by or on account of
any obligation of a Borrower under any Credit Document shall be made without
deduction or withholding for any Taxes, except as required by applicable Laws. 
If any applicable Laws (as determined in the good faith discretion of the
Administrative Agent) require the deduction or withholding of any Tax from any
such payment by the Administrative Agent or a Borrower, then the Administrative
Agent or such Borrower shall be entitled to make such deduction or withholding,
upon the basis of the information and documentation to be delivered pursuant to
subsection (e) below.

 

(ii)                                  If any Borrower or the Administrative
Agent shall be required by the Code to withhold or deduct any Taxes, including
both United States Federal backup withholding and withholding taxes, from any
payment, then (A) the Administrative Agent shall withhold or make such
deductions as are determined by the Administrative Agent to be required based
upon the information and documentation it has received pursuant to subsection
(e) below, (B) the Administrative Agent shall timely pay the full amount
withheld or deducted to the relevant Governmental Authority in accordance with
the Code, and (C) to the extent that the withholding or deduction is made on
account of Indemnified Taxes, the sum payable by such Borrower shall be
increased as necessary so that after any required withholding or the making of
all required deductions (including deductions applicable to additional sums
payable under this Section 3.01) the applicable Recipient receives an amount
equal to the sum it would have received had no such withholding or deduction
been made.

 

(iii)                               If any Borrower or the Administrative Agent
shall be required by any applicable Laws other than the Code to withhold or
deduct any Taxes from any payment, then (A) such Borrower or the Administrative
Agent, as required by such Laws, shall withhold or make such deductions as are
determined by it to be required based upon the information and documentation it
has received pursuant to subsection (e) below, (B) such Borrower or the
Administrative Agent, to the extent required by such Laws, shall timely pay the
full amount withheld or deducted to the relevant Governmental Authority in
accordance with such Laws and (C) to the extent that the withholding or
deduction is made on account of Indemnified Taxes, the sum payable by such
Borrower shall be increased as necessary so that after any required withholding
or the making of all required deductions (including deductions applicable to
additional sums payable under this Section 3.01) the applicable Recipient
receives an amount equal to the sum it would have received had no such
withholding or deduction been made.

 

(b)                                 Payment of Other Taxes by the Borrowers. 
Without limiting the provisions of subsection (a) above, each Borrower shall
timely pay to the relevant Governmental Authority in

 

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accordance with applicable Law, or at the option of the Administrative Agent
timely reimburse it for the payment of, any Other Taxes.

 

(c)                                  Tax Indemnifications.  (i) The applicable
Borrower shall indemnify the applicable Recipient, and shall make payment in
respect thereof within 10 days after demand therefor, for the full amount of any
Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section 3.01) payable or paid by such
Recipient or required to be withheld or deducted from a payment to such
Recipient and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority.  A certificate as to the amount
of such payment or liability delivered to the Parent Borrower by a Lender, a
Fronting Bank or an L/C Issuer (with a copy to the Administrative Agent), or by
the Administrative Agent on its own behalf or on behalf of a Lender, a Fronting
Bank or an L/C Issuer, shall be conclusive absent manifest error.  The
applicable Borrower shall indemnify the Administrative Agent, and shall make
payment in respect thereof within 10 days after demand therefor, for any amount
which a Lender, a Fronting Bank or an L/C Issuer for any reason fails to pay
indefeasibly to the Administrative Agent as required pursuant to
Section 3.01(c)(ii) below.

 

(ii)                                  Each Lender, Fronting Bank and L/C Issuer
shall, and does hereby, severally indemnify, and shall make payment in respect
thereof within 10 days after demand therefor, (x) the Administrative Agent
against any Indemnified Taxes attributable to such Lender, Fronting Bank or L/C
Issuer (but only to the extent that a Borrower has not already indemnified the
Administrative Agent for such Indemnified Taxes and without limiting the
obligation of the Borrowers to do so), (y) the Administrative Agent and the
Borrowers, as applicable, against any Taxes attributable to such Lender’s
failure to comply with the provisions of Section 10.06(d) relating to the
maintenance of a Participant Register and (z) the Administrative Agent and the
Borrowers, as applicable, against any Excluded Taxes attributable to such
Lender, Fronting Bank or L/C Issuer, in each case, that are payable or paid by
the Administrative Agent or a Borrower in connection with any Credit Document,
and any reasonable expenses arising therefrom or with respect thereto, whether
or not such Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority.  A certificate as to the amount of such payment or
liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error.  Each Lender, Fronting Bank and L/C Issuer
hereby authorizes the Administrative Agent to set off and apply any and all
amounts at any time owing to such Lender, Fronting Bank or L/C Issuer, as the
case may be, under this Agreement or any other Credit Document against any
amount due to the Administrative Agent under this clause (ii).

 

(d)                                 Evidence of Payments.  Upon request by any
Borrower or the Administrative Agent, as the case may be, after any payment of
Taxes by such Borrower or by the Administrative Agent to a Governmental
Authority as provided in this Section 3.01, such Borrower shall deliver to the
Administrative Agent or the Administrative Agent shall deliver to such Borrower,
as the case may be, the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, a copy of any return required by
Laws to report such payment

 

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or other evidence of such payment reasonably satisfactory to such Borrower or
the Administrative Agent, as the case may be.

 

(e)                                  Status of Lenders; Tax Documentation.

 

(i)                                     Any Lender that is entitled to an
exemption from or reduction of withholding Tax with respect to payments made
under any Credit Document shall deliver to the Parent Borrower and the
Administrative Agent, at the time or times reasonably requested by the Parent
Borrower or the Administrative Agent, such properly completed and executed
documentation reasonably requested by the Parent Borrower or the Administrative
Agent as will permit such payments to be made without withholding or at a
reduced rate of withholding.  In addition, any Lender, if reasonably requested
by the Parent Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable Law or reasonably requested by the Parent
Borrower or the Administrative Agent as will enable the Parent Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements.  Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 3.01(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

 

(ii)                                  Without limiting the generality of the
foregoing, in the event that a Borrower is a U.S. Person,

 

(A)                               any Lender that is a U.S. Person shall deliver
to the Parent Borrower and the Administrative Agent on or prior to the date on
which such Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Parent Borrower or the
Administrative Agent), executed originals of IRS Form W-9 certifying that such
Lender is exempt from U.S. federal backup withholding tax;

 

(B)                               any Foreign Lender shall, to the extent it is
legally entitled to do so, deliver to the Parent Borrower and the Administrative
Agent (in such number of copies as shall be requested by the recipient) on or
prior to the date on which such Foreign Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the reasonable request of the
Parent Borrower or the Administrative Agent), whichever of the following is
applicable:

 

(1)                                 in the case of a Foreign Lender claiming the
benefits of an income tax treaty to which the United States is a party (x) with
respect to payments of interest under any Credit Document, executed originals of
IRS Form W-8BEN or, if applicable, W-8BEN-E establishing an exemption from, or
reduction of, U.S. federal withholding Tax pursuant to the “interest” article of
such tax treaty

 

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and (y) with respect to any other applicable payments under any Credit
Document, IRS Form W-8BEN or, if applicable, W-8BEN-E establishing an exemption
from, or reduction of, U.S. federal withholding Tax pursuant to the “business
profits” or “other income” article of such tax treaty;

 

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

 

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

 

(4)                                 to the extent a Foreign Lender is not the
beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS
Form W-8ECI, IRS Form W-8BEN or, if applicable, W-8BEN-E, a U.S. Tax Compliance
Certificate, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate on behalf of each such direct and indirect
partner;

 

(C)                               any Foreign Lender shall, to the extent it is
legally entitled to do so, deliver to the Parent Borrower and the Administrative
Agent (in such number of copies as shall be requested by the recipient) on or
prior to the date on which such Foreign Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the reasonable request of the
Parent Borrower or the Administrative Agent), executed originals of any other
form prescribed by applicable Law as a basis for claiming exemption from or a
reduction in United States federal withholding Tax, duly completed, together
with such supplementary documentation as may be prescribed by applicable Law to
permit the Parent Borrower or the Administrative Agent to determine the
withholding or deduction required to be made; and

 

(D)                               if a payment made to a Lender under any Credit
Document would be subject to U.S. federal withholding Tax imposed by FATCA if
such Lender were to fail to comply with the applicable reporting requirements of
FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as
applicable), such Lender shall deliver to the Parent Borrower and the
Administrative Agent at the time or times prescribed by law and at such time or
times reasonably requested by the Parent Borrower or the Administrative Agent
such documentation prescribed by applicable Law (including as prescribed by
Section 1471(b)(3)(C)(i) of

 

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the Code) and such additional documentation reasonably requested by the Parent
Borrower or the Administrative Agent as may be necessary for the Parent Borrower
and the Administrative Agent to comply with their obligations under FATCA and to
determine that such Lender has complied with such Lender’s obligations under
FATCA or to determine the amount to deduct and withhold from such payment.

 

(iii)                               Each Lender agrees that if any form or
certification it previously delivered pursuant to this Section 3.01 expires or
becomes obsolete or inaccurate in any respect, it shall update such form or
certification or promptly notify the Parent Borrower and the Administrative
Agent in writing of its legal inability to do so.

 

(f)                                   Treatment of Certain Refunds.  Unless
required by applicable Laws, at no time shall the Administrative Agent have any
obligation to file for or otherwise pursue on behalf of a Lender, Fronting Bank
or L/C Issuer, or have any obligation to pay to any Lender, Fronting Bank or L/C
Issuer, any refund of Taxes withheld or deducted from funds paid for the account
of such Lender, Fronting Bank or L/C Issuer, as the case may be.  If any
Recipient determines, in its sole discretion exercised in good faith, that it
has received a refund of any Taxes as to which it has been indemnified by a
Borrower or with respect to which a Borrower has paid additional amounts
pursuant to this Section 3.01, it shall pay to such Borrower an amount equal to
such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by such Borrower under this Section 3.01 with respect to the Taxes
giving rise to such refund), net of all out-of-pocket expenses (including Taxes)
incurred by such Recipient, and without interest (other than any interest paid
by the relevant Governmental Authority with respect to such refund), provided
that such Borrower, upon the request of the Recipient, agrees to repay the
amount paid over to such Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Recipient in the event
the Recipient is required to repay such refund to such Governmental Authority. 
Notwithstanding anything to the contrary in this subsection, in no event will
the applicable Recipient be required to pay any amount to a Borrower pursuant to
this subsection the payment of which would place the Recipient in a less
favorable net after-Tax position than such Recipient would have been in if the
Tax subject to indemnification and giving rise to such refund had not been
deducted, withheld or otherwise imposed and the indemnification payments or
additional amounts with respect to such Tax had never been paid.  This
subsection shall not be construed to require any Recipient to make available its
tax returns (or any other information relating to its taxes that it deems
confidential) to any Borrower or any other Person.

 

(g)                                  Survival.  Each party’s obligations under
this Section 3.01 shall survive the resignation or replacement of the
Administrative Agent or any assignment of rights by, or the replacement of, a
Lender, a Fronting Bank or an L/C Issuer, the termination of the Commitments and
the repayment, satisfaction or discharge of all other Obligations.

 

3.02                        Illegality.  If any Lender determines that any Law
has made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain or
fund Eurocurrency Rate Loans (whether denominated in

 

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Dollars or an Alternative Currency), or to determine or charge interest rates
based upon the Eurocurrency Rate, or any Governmental Authority has imposed
material restrictions on the authority of such Lender to purchase or sell, or to
take deposits of, Dollars or any Alternative Currency in the applicable
interbank market, then, on notice thereof by such Lender to the Parent Borrower
through the Administrative Agent, any obligation of such Lender to make or
continue Eurocurrency Rate Loans in the affected currency or currencies or, in
the case of Eurocurrency Rate Loans in Dollars, to convert Base Rate Loans to
Eurocurrency Rate Loans, shall be suspended until such Lender notifies the
Administrative Agent and the Parent Borrower that the circumstances giving rise
to such determination no longer exist.  Upon receipt of such notice, the Parent
Borrower shall, upon demand from such Lender (with a copy to the Administrative
Agent), prepay or, if applicable and such Loans are denominated in Dollars,
convert all such Eurocurrency Rate Loans of such Lender to Base Rate Loans,
either on the last day of the Interest Period therefor, if such Lender may
lawfully continue to maintain such Eurocurrency Rate Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such
Eurocurrency Rate Loans.  Upon any such prepayment or conversion, the Parent
Borrower shall also pay accrued interest on the amount so prepaid or converted.

 

3.03                        Inability to Determine Rates.  If the Majority
Tranche B Lenders determine that for any reason in connection with any request
for a Eurocurrency Rate Loan or a conversion to or continuation thereof that
(a) deposits (whether in Dollars or an Alternative Currency) are not being
offered to banks in the applicable offshore interbank market for such currency
for the applicable amount and Interest Period of such Eurocurrency Rate Loan,
(b) adequate and reasonable means do not exist for determining the Eurocurrency
Rate for any requested Interest Period with respect to a proposed Eurocurrency
Rate Loan (whether denominated in Dollars or an Alternative Currency), or
(c) the Eurocurrency Rate for any requested Interest Period with respect to a
proposed Eurocurrency Rate Loan does not adequately and fairly reflect the cost
to such Lenders of funding such Eurocurrency Rate Loan, the Administrative Agent
will promptly so notify the Parent Borrower and each Tranche B Lender. 
Thereafter, the obligation of the Tranche B Lenders to make or maintain
Eurocurrency Rate Loans in the affected currency or currencies shall be
suspended until the Administrative Agent (upon the instruction of the Majority
Tranche B Lenders) revokes such notice.  Upon receipt of such notice, the Parent
Borrower may revoke any pending request for a Borrowing of, conversion to or
continuation of Eurocurrency Rate Loans in the affected currency or currencies
or, failing that, will be deemed to have converted such request into a request
for a Borrowing of, or conversion to or continuation of, Base Rate Loans in the
amount specified therein.

 

3.04                        Increased Costs; Reserves on Eurocurrency Rate
Loans.

 

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

 

(i)                               impose, modify or deem applicable any reserve,
special deposit, compulsory loan, insurance charge or similar requirement
against assets of, deposits with or for the account of, or credit extended or
participated in by, any Lender (except any reserve requirement contemplated by
Section 3.04(e)) or any Fronting Bank;

 

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(ii)                            subject any Lender or any Fronting Bank to any
tax of any kind whatsoever with respect to this Agreement, any Letter of Credit,
any participation in a Letter of Credit or any Eurocurrency Rate Loan made by
it, or change the basis of taxation of payments to such Lender or such Fronting
Bank in respect thereof (except for Indemnified Taxes or Other Taxes covered by
Section 3.01 and the imposition of, or any change in the rate of, any Excluded
Tax payable by such Lender or such Fronting Bank); or

 

(iii)                         impose on any Lender or any Fronting Bank or the
London interbank market any other condition, cost or expense affecting this
Agreement or Eurocurrency Rate Loans made by such Lender or any Letter of Credit
or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurocurrency Rate Loan (or of maintaining
its obligation to make any such Loan), or to increase the cost to such Lender or
such Fronting Bank of participating in, issuing or maintaining any Letter of
Credit (or of maintaining its obligation to participate in or to issue any
Letter of Credit), or to reduce the amount of any sum received or receivable by
such Lender or such Fronting Bank hereunder (whether of principal, interest or
any other amount) then, upon request of such Lender or such Fronting Bank, the
Parent Borrower will pay (or cause the applicable Designated Subsidiary Borrower
to pay) to such Lender or such Fronting Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Fronting
Bank, as the case may be, for such additional costs incurred or reduction
suffered.

 

(b)                           Capital Requirements.  If any Lender or any
Fronting Bank determines that any Change in Law affecting such Lender or such
Fronting Bank or any Lending Office of such Lender or such Lender’s or such
Fronting Bank’s holding company, if any, regarding capital or liquidity
requirements has or would have the effect of reducing the rate of return on such
Lender’s or such Fronting Bank’s capital or on the capital of such Lender’s or
such Fronting Bank’s holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by such Fronting Bank or such Lender, to a level below that which
such Lender or such Fronting Bank or such Lender’s or such Fronting Bank’s
holding company could have achieved but for such Change in Law (taking into
consideration such Lender’s or such Fronting Bank’s policies and the policies of
such Lender’s or such Fronting Bank’s holding company with respect to capital
adequacy), then from time to time the Parent Borrower will pay (or cause the
applicable Designated Subsidiary Borrower to pay) to such Lender or such
Fronting Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or such Fronting Bank or such Lender’s or such Fronting
Bank’s holding company for any such reduction suffered.

 

(c)                            Certificates for Reimbursement.  A certificate of
a Lender or a Fronting Bank setting forth the amount or amounts necessary to
compensate such Lender or such Fronting Bank or its holding company, as the case
may be, as specified in subsection (a) or (b) of this Section and delivered to
the Parent Borrower shall be conclusive absent manifest error.  The Parent
Borrower shall pay (or cause the applicable Designated Subsidiary Borrower to
pay) such Lender or

 

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such Fronting Bank, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.

 

(d)                           Delay in Requests.  Failure or delay on the part
of any Lender or any Fronting Bank to demand compensation pursuant to the
foregoing provisions of this Section shall not constitute a waiver of such
Lender’s or such Fronting Bank’s right to demand such compensation, provided
that the Borrowers shall not be required to compensate a Lender or a Fronting
Bank pursuant to the foregoing provisions of this Section for any increased
costs incurred or reductions suffered more than 90 days prior to the date that
such Lender or such Fronting Bank, as the case may be, notifies the Parent
Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s or such Fronting Bank’s intention to claim compensation
therefor (except that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the nine-month period referred to above shall
be extended to include the period of retroactive effect thereof).

 

(e)                            Additional Reserve Requirements.  The Parent
Borrower shall pay to each Lender, (i) as long as such Lender shall be required
to maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as “Eurocurrency
liabilities”), additional interest on the unpaid principal amount of each
Eurocurrency Rate Loan equal to the actual costs of such reserves allocated to
such Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive), and (ii) as long as such Lender shall be
required to comply with any reserve ratio requirement or analogous requirement
of any other central banking or financial regulatory authority imposed in
respect of the maintenance of the Commitments or the funding of the Eurocurrency
Rate Loans, such additional costs (expressed as a percentage per annum and
rounded upwards, if necessary, to the nearest five decimal places) equal to the
actual costs allocated to such Commitment or Loan by such Lender (as determined
by such Lender in good faith, which determination shall be conclusive), which in
each case shall be due and payable on each date on which interest is payable on
such Loan, provided the Parent Borrower shall have received at least 10 days’
prior notice (with a copy to the Administrative Agent) of such additional
interest or costs from such Lender.  If a Lender fails to give notice 10 days
prior to the relevant Interest Payment Date, such additional interest or costs
shall be due and payable 10 days from receipt of such notice.

 

3.05                        Compensation for Losses.  Upon demand of any Tranche
B Lender (with a copy to the Administrative Agent) from time to time, the Parent
Borrower shall promptly compensate such Lender for and hold such Lender harmless
from any loss, cost or expense incurred by it as a result of:

 

(a)                                 any continuation, conversion, payment or
prepayment of any Eurocurrency Rate Loan on a day other than the last day of the
Interest Period for such Loan (whether voluntary, mandatory, automatic, by
reason of acceleration, or otherwise);

 

(b)                                 any failure by the Parent Borrower (for a
reason other than the failure of such Lender to make a Loan) to prepay, borrow,
continue or convert any Eurocurrency Rate Loan on the date or in the amount
notified by the Parent;

 

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(c)                                  any failure by the Parent Borrower to make
payment of any Loan or drawing under any Letter of Credit (or interest due
thereon) denominated in an Alternative Currency on its scheduled due date or any
payment thereof in a different currency; or

 

(d)                                 any assignment of a Eurocurrency Rate Loan
on a day other than the last day of the Interest Period therefor as a result of
a request by the Parent Borrower pursuant to Section 10.13;

 

including any foreign exchange losses and any loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain such Loan, from
fees payable to terminate the deposits from which such funds were obtained or
from the performance of any foreign exchange contract.  The Parent Borrower
shall also pay any customary administrative fees charged by such Lender in
connection with the foregoing.

 

For purposes of calculating amounts payable by the Parent Borrower to the
Tranche B Lenders under this Section 3.05, each Tranche B Lender shall be deemed
to have funded each Eurocurrency Rate Loan made by it at the Eurocurrency Rate
for such Loan by a matching deposit or other borrowing in the offshore interbank
market for such currency for a comparable amount and for a comparable period,
whether or not such Eurocurrency Rate Loan was in fact so funded.

 

3.06                        Mitigation Obligations; Replacement of Lenders.

 

(a)                           Designation of a Different Lending Office.  If any
Lender requests compensation under Section 3.04, or a Borrower is required to
pay any additional amount to any Lender, any Fronting Bank, or any Governmental
Authority for the account of any Lender or any Fronting Bank pursuant to
Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then
such Lender or such Fronting Bank shall, as applicable, use reasonable efforts
to designate a different Lending Office for funding or booking its Loans or
Letters of Credit (or participations therein) hereunder or to assign its rights
and obligations hereunder to another of its offices, branches or affiliates, if,
in the judgment of such Lender or such Fronting Bank, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to
Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need
for the notice pursuant to Section 3.02, as applicable, and (ii) in each case,
would not subject such Lender or such Fronting Bank, as the case may be, to any
unreimbursed cost or expense and would not otherwise be materially
disadvantageous to such Lender or such Fronting Bank, as the case may be.  The
Parent Borrower hereby agrees to pay (or cause the applicable Designated
Subsidiary Borrower to pay) all reasonable costs and expenses incurred by any
Lender or any Fronting Bank in connection with any such designation or
assignment.

 

(b)                           Replacement of Lenders.  If any Lender requests
compensation under Section 3.04, or if the Parent Borrower is required to pay
any Indemnified Taxes or additional amounts to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01 and, in each
case, such Lender has declined or is unable to designate a different lending
office in accordance with Section 3.06(a), the Parent Borrower may replace such
Lender in accordance with Section 10.13.

 

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3.07                        Survival.  All of the Borrowers’ obligations under
this Article III shall survive termination of the Aggregate Commitments,
repayment of all Obligations hereunder, and resignation of the Administrative
Agent.

 

ARTICLE IV.  CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

4.01                        Conditions of Initial Credit Extension.  The
obligation of each Fronting Bank and each Lender to make its initial Credit
Extension (including its obligations under any Existing Letter of Credit)
hereunder is subject to satisfaction of the following conditions precedent:

 

(a)                           The Administrative Agent’s receipt of the
following, each of which shall be originals or facsimiles or sent by electronic
mail (followed promptly by originals) unless otherwise specified, each properly
executed by a Responsible Officer of the signing Borrower, each dated the
Closing Date (or, in the case of certificates of governmental officials, a
recent date before the Closing Date):

 

(i)                               executed counterparts of this Agreement,
sufficient in number for distribution to the Administrative Agent, each Lender
and the Parent Borrower;

 

(ii)                            a Note executed by each of the Parent Borrower
and ACUS in favor of each Tranche B Lender requesting a Note;

 

(iii)                         an opinion, in form and substance reasonably
satisfactory to the Administrative Agent, addressed to the Administrative Agent
and each of the Lenders from (A) Cahill Gordon & Reindel LLP, special U.S.
counsel to the Borrowers, (B) Conyers, Dill & Pearman, special Bermuda counsel
to the Borrowers, (iii) Inglish and Monaco, P.C., special Missouri counsel to
AIC, (C) Lamson, Dugan & Murray, LLP, special Nebraska counsel to ARC,
(D) Reynolds Porter Chamberlain LLP, special English and Welsh counsel to Arch
Europe, and (E) A&L Goodbody, special Irish counsel to AREUL;

 

(iv)                        a certificate signed by the President, any Vice
President, Chief Executive Officer, Chief Financial Officer, Controller ,
Chairman or Chief Operating Officer of each Borrower, and attested to by the
Secretary or any Assistant Secretary of such Borrower, together with (x) copies
of its Organizational Documents, (y) the resolutions relating to the Credit
Documents and (z) an incumbency certificate evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Credit
Documents to which such Borrower is a party;

 

(v)                           a certificate signed by a Responsible Officer of
each Designated Subsidiary Borrower (A) certifying that the conditions specified
in Sections 4.02(a) and (b) have been satisfied and (B) either attaching copies
of all consents, licenses and approvals required in connection with the
execution, delivery and performance by such Borrower and the validity against
such Borrower of the Credit Documents to which it is a party, and

 

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such consents, licenses and approvals shall be in full force and effect, or
stating that no such consents, licenses or approvals are so required;

 

(vi)                        a Master Participation Agreement executed by all of
the Lenders, the Existing Lenders and the Administrative Agent in form and
substance satisfactory to the Administrative Agent and the Lenders;

 

(vii)                     a Confirmation executed by all Borrowers,
substantially in the form of Exhibit J; and

 

(viii)                  a certificate signed by a Responsible Officer of the
Parent Borrower certifying (A) that the conditions specified in Sections
4.02(a) and (b) have been satisfied; (B) either attaching copies of all
consents, licenses and approvals required in connection with the execution,
delivery and performance by the Parent Borrower and the validity against the
Parent Borrower of the Credit Documents to which it is a party, and such
consents, licenses and approvals shall be in full force and effect, or stating
that no such consents, licenses or approvals are so required; and (C) that there
has been no event or circumstance since December 31, 2013, that has had or would
be reasonably expected to have, either individually or in the aggregate, a
Material Adverse Effect.

 

(b)                           All corporate and legal proceedings and all
instruments and agreements in connection with the transactions contemplated by
this Agreement and the other Credit Documents shall be reasonably satisfactory
in form and substance to the Administrative Agent, and the Administrative Agent
shall have received all information and copies of all certificates, documents
and papers, including certificates of existence or good standing certificates,
as applicable, and any other records of corporate proceedings and governmental
approvals, if any, which the Administrative Agent reasonably may have requested
in connection therewith, such documents and papers where appropriate to be
certified by proper corporate or governmental authorities.

 

(c)                            Since December 31, 2013, nothing shall have
occurred which has had, or would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.

 

(d)                           No actions, suits or proceedings by any entity
(private or governmental) shall be pending against the Parent Borrower or any of
its Subsidiaries (i) with respect to this Agreement, any other Credit Document,
the Transactions or any of the transactions contemplated hereby or thereby or
(ii) which has had, or would reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect.

 

(e)                            Each Designated Subsidiary Borrower (other than
ACUS) shall have a Financial Strength Rating of at least “A-.”

 

(f)                             The Administrative Agent shall have received a
letter from the Service of Process Agent indicating its consent to its
appointment by the Parent Borrower and each Designated Subsidiary Borrower as
their agent to receive service of process as specified in this Agreement.

 

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(g)                            All loans, interest, fees and other costs and
expenses due and owing under the Existing Credit Agreement through the Effective
Time shall have been paid in full.

 

(h)                           Any fees required to be paid on or before the
Closing Date shall have been paid.

 

(i)                               Unless waived by the Administrative Agent, the
Borrowers shall have paid all reasonable fees, charges and disbursements of
counsel to the Administrative Agent (directly to such counsel if requested by
the Administrative Agent) to the extent invoiced prior to or on the Closing
Date, plus such additional amounts of such fees, charges and disbursements as
shall constitute its reasonable estimate of such fees, charges and disbursements
incurred or to be incurred by it through the closing proceedings (provided that
such estimate shall not thereafter preclude a final settling of accounts between
the Borrowers and the Administrative Agent).

 

Without limiting the generality of the provisions of the last paragraph of
Section 9.03, for purposes of determining compliance with the conditions
specified in this Section 4.01, each Lender that has signed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to a Lender unless the Administrative Agent
shall have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.

 

4.02                        Conditions to all Credit Extensions.  The obligation
of each Lender to honor any Request for Credit Extension (other than a Loan
Notice requesting only a conversion of Loans to the other Type, or a
continuation of Eurocurrency Rate Loans) is subject to the following conditions
precedent:

 

(a)                           The representations and warranties of each
Borrower contained in Article V or any other Credit Document, or which are
contained in any document furnished at any time under or in connection herewith
or therewith, shall be true and correct in all material respects on and as of
the date of such Credit Extension, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct in all material respects as of such earlier
date, and except that for purposes of this Section 4.02, the representations and
warranties contained in Section 5.09 shall be deemed to refer to the most recent
statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01

 

(b)                           No Default shall exist, or would result from such
proposed Credit Extension or from the application of the proceeds thereof.

 

(c)                            The Administrative Agent and, if applicable, the
Applicable Issuing Party, shall have received a Request for Credit Extension in
accordance with the requirements hereof.  In the event such Credit Extension is
pursuant to the Tranche A Commitments, such Borrower shall have delivered a
Borrowing Base Certificate calculated as of the most recent Business Day.

 

(d)                           In the case of a Credit Extension to be
denominated in an Alternative Currency, there shall not have occurred any change
in national or international financial, political or economic

 

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conditions or currency exchange rates or exchange controls which in the
reasonable opinion of the Administrative Agent, the Required Lenders or the
applicable Fronting Bank would make it impracticable for such Credit Extension
to be denominated in the relevant Alternative Currency.

 

(e)                            In addition to satisfaction of the conditions in
clauses (a) through (d), the obligation of each Lender to make its initial
Credit Extension to AREUL and ASIC is subject to the satisfaction of the
conditions that:

 

(i)                               Such Designated Subsidiary Borrower shall have
become a party to the Security Agreement and the Control Agreement ; and

 

(ii)                            if requested by the Administrative Agent, the
Administrative Agent shall have received an opinion, addressed to the
Administrative Agent and each of the Lenders, from counsel to such Designated
Subsidiary Borrower and, if such counsel is not licensed to practice in New
York, an opinion of New York counsel), in form and substance reasonably
satisfactory to the Administrative Agent regarding the creation and perfection
of the security interest in the Collateral Account subject to the Security
Agreement and such Control Agreement;

 

(f)                             In addition to satisfaction of the conditions in
clauses (a) through (d), the obligation of each Lender to make its initial
Credit Extension to a Designated Subsidiary Borrower (other than a Subsidiary
who is a Designated Subsidiary Borrower on the Closing Date) is subject to the
satisfaction of the conditions that the Administrative Agent shall have received
the following:

 

(i)                               a Designated Subsidiary Borrower Request and
Assumption Agreement executed by such Designated Subsidiary Borrower and the
Parent Borrower;

 

(ii)                            a Security Agreement and Control Agreement
executed by such Designated Subsidiary Borrower;

 

(iii)                         all documents as shall reasonably demonstrate the
existence of such Designated Subsidiary Borrower, the corporate power and
authority of such Designated Subsidiary Borrower to enter into, and the validity
with respect to such Designated Subsidiary Borrower of, this Agreement and the
other Credit Documents to which it is a party and the incumbency of officers
executing the Credit Documents (including an opinion, addressed to the
Administrative Agent and the Lenders, of counsel to such Designated Subsidiary
Borrower and, if such counsel is not licensed to practice in New York, an
opinion of New York counsel), in form and substance reasonably satisfactory to
the Administrative Agent;

 

(iv)                        a certificate of a Responsible Officer of the Parent
Borrower or such Designated Subsidiary Borrower either (A) attaching copies of
all consents, licenses and approvals from a Governmental Authority required in
connection with the execution, delivery

 

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and performance by such Designated Subsidiary Borrower and the validity against
such Designated Subsidiary Borrower of the Credit Documents to which it is a
party and confirming that such consents, licenses and approvals shall be in full
force and effect, or (B) stating that no such consents, licenses or approvals
are so required;

 

(v)                           such corporate documents and other information as
the Administrative Agent (or any Lender through the Administrative Agent) shall
reasonably request for purposes of the Patriot Act and/or such Lender’s “Know
Your Client” requirements; and

 

(vi)                        if such Designated Subsidiary Borrower is a Foreign
Obligor, no Lender shall be subject to any legal or regulatory requirement to be
licensed to do business in the jurisdiction in which such Designated Subsidiary
Borrower is organized in order to make Credit Extensions to such Designated
Subsidiary Borrower or shall be otherwise prohibited from extending credit to
such Designated Subsidiary Borrower.

 

Each Request for Credit Extension (other than a Loan Notice requesting only a
conversion of Loans to the other Type or a continuation of Eurocurrency Rate
Loans) submitted by a Borrower shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a) and (b) have been
satisfied on and as of the date of the applicable Credit Extension.

 

ARTICLE V.  REPRESENTATIONS AND WARRANTIES

 

Each Borrower (solely as to itself and its Subsidiaries) represents and warrants
to the Lenders that:

 

5.01                        Corporate Status.  Each Borrower and each of its
Subsidiaries (i) is a duly organized and validly existing corporation or
business trust or other entity in good standing under the laws of the
jurisdiction of its organization and has the corporate or other organizational
power and authority to own its property and assets and to transact the business
in which it is engaged and presently proposes to engage, and (ii) has been duly
qualified and is authorized to do business and is in good standing in all
jurisdictions where it is required to be so qualified, except, in the case of
this clause (ii), where the failure to be so qualified, authorized or in good
standing would not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.

 

5.02                        Corporate Power and Authority.  Each Borrower has
the corporate power and authority to execute, deliver and carry out the terms
and provisions of the Credit Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of such Credit Documents.  Each Borrower has duly executed and delivered each
Credit Document to which it is a party and each such Credit Document constitutes
the legal, valid and binding obligation of such Borrower enforceable against
such Borrower in accordance with its terms, except to the extent that
enforceability thereof may be limited by applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors’ rights generally and general

 

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principles of equity regardless of whether enforcement is sought in a proceeding
in equity or at law.

 

5.03                        No Contravention of Laws, Agreements or
Organizational Documents.  Neither the execution, delivery and performance by
any Borrower of this Agreement or the other Credit Documents to which it is a
party nor compliance with the terms and provisions hereof or thereof, nor the
consummation of the transactions contemplated herein or therein, (i) will
contravene any applicable provision of any law, statute, rule, regulation,
order, writ, injunction or decree of any court or governmental instrumentality,
(ii) will conflict or be inconsistent with or result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of (or the obligation to create or impose)
any Lien upon any of the property or assets of any Borrower or any of its
Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust,
loan agreement, credit agreement or any other material instrument to which such
Borrower or any of its Subsidiaries is a party or by which it or any of its
property or assets are bound or to which it may be subject or (iii) will violate
any provision of the Organizational Documents of any Borrower or any of its
Subsidiaries.

 

5.04                        Litigation.  There are no actions, suits or
proceedings pending or threatened in writing involving the Parent Borrower or
any of its Subsidiaries (including, without limitation, with respect to this
Agreement or any other Credit Document) that have had, or would reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.

 

5.05                        Use of Proceeds; Margin Regulations.

 

(a)                           Letters of Credit shall be issued to support
obligations of the Borrowers that are otherwise permitted under this Agreement. 
Proceeds of Loans shall be utilized for the Parent Borrower’s and its
Subsidiaries’ general corporate and working capital requirements, including but
not limited to, capital infusions to Subsidiaries of the Parent Borrower,
acquisitions and the repurchase of common shares of the Parent Borrower.

 

(b)                           Neither the making of any Loan hereunder, the
issuance of any Letter of Credit nor the use of the proceeds thereof, will
violate or be inconsistent with the provisions of Regulation T, U or X of the
FRB and no part of the proceeds of any Credit Extension will be used to purchase
or carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock.

 

5.06                        Approvals.  Any order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, which is required to authorize or is required in
connection with (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of any
Credit Document, has been obtained.

 

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5.07                        Investment Company Act.  Neither the Parent Borrower
nor any of its Subsidiaries is an “investment company” or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of
1940, as amended.

 

5.08                        True and Complete Disclosure.  All factual
information (taken as a whole) heretofore or contemporaneously furnished by the
Parent Borrower or any of its Subsidiaries to the Administrative Agent or any
Lender in writing (including, without limitation, all information contained in
the Credit Documents) for purposes of or in connection with this Agreement or
any transaction contemplated herein is, and all other factual information (taken
as a whole with all other such information theretofore or contemporaneously
furnished) hereafter furnished by any such Persons in writing to the
Administrative Agent will be, true and accurate in all material respects on the
date as of which such information is dated and not incomplete by omitting to
state any material fact necessary to make such information (taken as a whole
with all other such information theretofore or contemporaneously furnished) not
misleading at such time in light of the circumstances under which such
information was provided.

 

5.09                        Financial Condition; Financial Statements.

 

(i)                                     The consolidated balance sheet of the
Parent Borrower and its Subsidiaries for the fiscal year ended December 31, 2013
and the related consolidated statements of income, shareholders’ equity and cash
flows, reported on by PricewaterhouseCoopers LLP, copies of which have been
delivered to each of the Lenders, and the unaudited consolidated balance sheet
of the Parent Borrower and its Subsidiaries for its fiscal quarter ended
March 31, 2014 and the related consolidated statements of income, shareholders’
equity and cash flows, copies of which have been delivered to each of the
Lenders, fairly present in all material respects, in each case in conformity
with GAAP, consistently applied, the consolidated financial position of the
Parent Borrower and its Subsidiaries as of such dates and their consolidated
results of operations and cash flows for such periods stated (subject, in the
case of the aforementioned quarterly financial statement, to normal year-end
audit adjustments and the absence of full footnote disclosure).

 

(ii)                                  The summary unaudited consolidated balance
sheet of ARL and its Subsidiaries for the fiscal year ended December 31, 2013
and the related consolidated statement of income, copies of which have been
delivered to each of the Lenders, and the summary unaudited consolidated balance
sheet of ARL and its Subsidiaries for its fiscal quarter ended March 31, 2014
and the related consolidated statement of income, copies of which have been
delivered to each of the Lenders, fairly present in all material respects, the
consolidated financial position of ARL and its Subsidiaries as of such dates and
their consolidated results of operations for such periods stated (subject, in
the case of the aforementioned quarterly financial statements, to normal
year-end audit adjustments and the absence of full footnote disclosure).

 

(iii)                               The Statutory Statements of each Designated
Subsidiary Borrower for (x) the fiscal year ended December 31, 2013 and (y) its
fiscal quarter ended March 31, 2014 (other than ARL, AREUL and Arch Europe),
copies of which have been delivered to each of the Lenders, fairly present in
all material respects the financial position of such Designated Subsidiary
Borrower as of such dates and results of operations for such periods stated.

 

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5.10                        Tax Returns and Payments.  The Parent Borrower and
its Subsidiaries (i) have timely filed or caused to be timely filed with the
appropriate taxing authority (taking into account any applicable extension
within which to file) all material income and other material tax returns
(including any statements, forms and reports), domestic and foreign, required to
be filed by the Parent Borrower and its Subsidiaries, and (ii) have timely paid
or caused to have timely paid all material taxes payable by them which have
become due and assessments which have become due, except for those contested in
good faith and adequately disclosed and for which adequate reserves have been
established in accordance with GAAP.  There is no action, suit, proceeding,
investigation, audit or claim now pending or, to the best knowledge of the
Parent Borrower and its Subsidiaries, proposed or threatened by any authority
regarding any income taxes or any other taxes relating to the Parent Borrower or
any of its Subsidiaries that would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.  Neither the Parent
Borrower nor any of its Subsidiaries has entered into an agreement or waiver or
been requested to enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of taxes of the Parent
Borrower or any of its Subsidiaries that would reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.  No tax
Liens have been filed and no claims are pending or, to the best knowledge of the
Parent Borrower or any of its Subsidiaries, proposed or threatened with respect
to any taxes, fees or other charges for any taxable period that would reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect.

 

5.11                        Compliance with ERISA.

 

(a)                           Except as would not reasonably be expected to
result, either individually or in the aggregate, in a Material Adverse Effect,
the Parent Borrower and its Subsidiaries and ERISA Affiliates (i)  have not
failed to satisfy the minimum funding standards of Section 302 of ERISA and
Section 412 of the Code with respect to each Plan and have maintained each Plan
in compliance with the applicable provisions of ERISA and the Code, and
(ii) have not incurred, or reasonably expect to incur, any liability to the PBGC
or any Plan or Multiemployer Plan (other than to pay PBGC premiums or to make
contributions in the ordinary course of business).

 

(b)                           Except as would not reasonably be expected to
result, either individually or in the aggregate, in a Material Adverse Effect,
(i) each Foreign Pension Plan has been maintained in compliance with its terms
and with the requirements of any and all applicable Laws, statutes, rules,
regulations and orders and has been maintained, where required, in good standing
with applicable regulatory authorities, (ii) all contributions required to be
made with respect to a Foreign Pension Plan have been timely made and
(iii) neither the Parent Borrower nor any of its Subsidiaries has incurred any
obligation in connection with the termination of, or withdrawal from, any
Foreign Pension Plan.

 

5.12                        Subsidiaries.

 

(a)                           Set forth on Schedule 5.12 is a complete and
correct list of all of the Subsidiaries of the Parent Borrower as of the Closing
Date, together with, for each such Subsidiary, (i) the jurisdiction of
organization of such Subsidiary, (ii) each Person holding direct ownership
interests

 

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in such Subsidiary and (iii) the percentage of ownership of such Subsidiary
represented by such ownership interests.  Except as disclosed on Schedule 5.12,
each of the Parent Borrower and its Subsidiaries owns, free and clear of Liens,
and has the unencumbered right to vote, all outstanding ownership interests in
each Person shown to be held by it on Schedule 5.12.

 

(b)                           As of the Closing Date, there are no restrictions
on the Parent Borrower or any of its Subsidiaries which prohibit or otherwise
restrict the transfer of cash or other assets from any Subsidiary of the Parent
Borrower to the Parent Borrower, other than (i) prohibitions or restrictions
existing under or by reason of this Agreement or the other Credit Documents,
(ii) prohibitions or restrictions existing under or by reason of the Long-Term
LC Facilities, (iii) prohibitions or restrictions existing under or by reason of
the Existing Senior Notes, (iv) prohibitions or restrictions existing under or
by reason of Legal Requirements, (v) prohibitions or restrictions permissible
under Section 7.11. and (vi) other prohibitions or restrictions which, either
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.

 

5.13                        Compliance with Statutes, Etc.  The Parent Borrower
and each of its Subsidiaries are in compliance with all applicable statutes,
regulations, rules and orders of, and all applicable restrictions imposed by,
and have filed or otherwise provided all material reports, data, registrations,
filings, applications and other information required to be filed with or
otherwise provided to, all governmental bodies, domestic or foreign, in respect
of the conduct of its business and the ownership of its property (including
compliance with all applicable environmental laws), except where the failure to
comply or file or otherwise provide would not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.  All
required regulatory approvals are in full force and effect on the date hereof,
except where the failure of such approvals to be in full force and effect would
not reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.

 

5.14                        Insurance Licenses.  Schedule 5.14 lists with
respect to each Regulated Insurance Company, as of the Closing Date, all of the
jurisdictions in which such Regulated Insurance Company holds licenses
(including, without limitation, licenses or certificates of authority from
Applicable Insurance Regulatory Authorities), permits or authorizations to
transact insurance and reinsurance business (collectively, the “Insurance
Licenses”), and indicates the type or types of insurance in which each such
Regulated Insurance Company is permitted to be engaged with respect to each
Insurance License therein listed.  There is (i) no such Insurance License that
is the subject of a proceeding for suspension, revocation or limitation or any
similar proceedings, (ii) no sustainable basis for such a suspension, revocation
or limitation, and (iii) no such suspension, revocation or limitation threatened
by any Applicable Insurance Regulatory Authority, that, in each instance under
(i), (ii) and (iii) above, has had, or would reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.  No
Regulated Insurance Company transacts any insurance business, directly or
indirectly, in any jurisdiction other than those listed on Schedule 5.14, where
such business requires any Insurance License of an Applicable Insurance
Regulatory Authority or such jurisdiction except where the failure to have any
such license would not reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect.

 

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5.15                        Insurance Business.  All insurance policies issued
by any Regulated Insurance Company are, to the extent required under applicable
Law, on forms approved by the insurance regulatory authorities of the
jurisdiction where issued or have been filed with and not objected to by such
authorities within the period provided for objection, except for those forms
with respect to which a failure to obtain such approval or make such a filing
without it being objected to, would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.

 

5.16                        Security Documents.  The Security Documents create,
as security for the Tranche A L/C Obligations of each Designated Subsidiary
Borrower, valid and enforceable security interests in and Liens on all of the
Collateral, superior to and prior to the rights of all third persons and subject
to no other Liens.  As of the date hereof, no filings or recordings are required
in order to ensure the enforceability, perfection or priority of the security
interests created under the Security Documents, except for filings or recordings
which have been previously made.

 

5.17                        No Section 32 Direction.  ARL has not received any
direction or other notification from the Bermuda Monetary Authority pursuant to
Section 32 of the Insurance Act, 1978 of Bermuda.

 

5.18                        Taxpayer Identification Number.  The Parent
Borrower’s true and correct employer identification number is set forth on
Schedule 10.02.

 

5.19                        Representations as to Foreign Jurisdiction Matters. 
Each Foreign Obligor represents and warrants (solely as to itself) to the
Administrative Agent and the Lenders that:

 

(a)                           Such Foreign Obligor is subject to civil and
commercial Laws with respect to its obligations under this Agreement and the
other Credit Documents to which it is a party (collectively as to such Foreign
Obligor, the “Applicable Foreign Obligor Documents”), and the execution,
delivery and performance by such Foreign Obligor of the Applicable Foreign
Obligor Documents constitute and will constitute private and commercial acts and
not public or governmental acts.  Neither such Foreign Obligor nor any of its
property has any immunity from jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) under the laws of the
jurisdiction in which such Foreign Obligor is organized and existing in respect
of its obligations under the Applicable Foreign Obligor Documents.

 

(b)                           The Applicable Foreign Obligor Documents are in
proper legal form under the Laws of the jurisdiction in which such Foreign
Obligor is organized and existing for the enforcement thereof against such
Foreign Obligor under the Laws of such jurisdiction, and to ensure the legality,
validity, enforceability or admissibility in evidence of the Applicable Foreign
Obligor Documents.  It is not necessary to ensure the legality, validity,
enforceability, priority or admissibility in evidence of the Applicable Foreign
Obligor Documents that the Applicable Foreign Obligor Documents be filed,
registered or recorded with, or executed or notarized before, any court or other
authority in the jurisdiction in which such Foreign Obligor is organized and
existing or that any registration charge or stamp or similar tax be paid on or
in respect of the

 

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Applicable Foreign Obligor Documents or any other document, except for (i) any
such filing, registration, recording, execution or notarization that has been
made and is in full force and effect, or is not required to be made until such
Applicable Foreign Obligor Documents are sought to be enforced and (ii) any
charge or tax that has been timely paid by or on behalf of such Foreign Obligor.

 

(c)                            The execution, delivery and performance of the
Applicable Foreign Obligor Documents executed by such Foreign Obligor are, under
applicable foreign exchange control regulations of the jurisdiction in which
such Foreign Obligor is incorporated or organized and existing, not subject to
any notification or authorization except (i) such as have been made or obtained
or (ii) such as cannot be made or obtained until a later date (provided that any
notification or authorization described in clause (ii) shall be made or obtained
as soon as is reasonably practicable).

 

5.20                        OFAC.  No Borrower or any of its Subsidiaries, nor,
to the knowledge of a Borrower or any of its Subsidiaries, their respective
directors, officers, employees or any agent or affiliate thereof, (a) is an
individual or entity that is, or is owned or controlled by any individual or
entity that is (i) currently the subject or target of any Sanctions or
(ii) located or organized in a Designated Jurisdiction, or (b) has received
written notice of any action, suit or proceeding or accusation of wrongdoing
against a Borrower or Subsidiary by an applicable Governmental Authority with
respect to Sanctions.

 

5.21                        Anti-Corruption Laws.  Each Borrower and its
Subsidiaries have conducted their businesses in compliance with applicable
anti-corruption laws in all material respects.

 

ARTICLE VI.  AFFIRMATIVE COVENANTS

 

Until the Commitments have expired or been terminated, no Loans or Letters of
Credit are outstanding, and the principal of and interest on each Loan, all
Unreimbursed Amounts and all fees payable hereunder shall have been paid in
full, each Borrower covenants and agrees (solely as to itself and its
Subsidiaries) with the Lenders that:

 

6.01                        Information Covenants.  The Parent Borrower will
furnish to the Administrative Agent (for distribution to each Lender):

 

(a)                                 Annual Financial Statements.  (i) As soon as
available and in any event within 90 days after the close of each fiscal year of
the Parent Borrower, the consolidated balance sheet of the Parent Borrower and
its Subsidiaries as at the end of such fiscal year and the related consolidated
statements of income, changes in shareholders’ equity and cash flows of the
Parent Borrower and its Subsidiaries for such fiscal year, setting forth in
comparative form the consolidated figures for the previous fiscal year, all in
reasonable detail and accompanied by a report thereon of PricewaterhouseCoopers
LLP or other independent public accountants of recognized national standing
selected by the Parent Borrower, which report shall state that such consolidated
financial statements present fairly in all material respects the consolidated
financial position of the Parent Borrower and its

 

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Subsidiaries as at the dates indicated and their consolidated results of
operations and cash flows for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except as otherwise specified in
such report; provided any exceptions or qualifications thereto must be
acceptable to the Required Lenders) and that the audit by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards.

 

(ii)                            As soon as available and in any event within 120
days after the close of each fiscal year of ARL, the consolidated balance sheet
of ARL and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income, changes in shareholders’ equity and cash
flows of ARL and its Subsidiaries for such fiscal year, setting forth in
comparative form the consolidated figures for the previous fiscal year, all in
reasonable detail and accompanied by a report thereon of PricewaterhouseCoopers
LLP or other independent public accountants of recognized national standing
selected by ARL, which report shall state that such consolidated financial
statements present fairly in all material respects the consolidated financial
position of ARL and its Subsidiaries as at the dates indicated and their
consolidated results of operations and cash flows for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years (except as
otherwise specified in such report; provided any exceptions or qualifications
thereto must be acceptable to the Required Lenders) and that the audit by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards.

 

(iii)                         As soon as available and in any event within 90
days after the close of each fiscal year of each Designated Subsidiary Borrower
(or, in the case of ARL, AREUL and Arch Europe, such later dates as may be
required by the Bermuda Companies Law and the Companies Act 1985 (as amended)
and the United Kingdom, respectively) other than ACUS, the Statutory Statements
for each such Designated Subsidiary Borrower for such fiscal year.

 

(b)                                 Quarterly Financial Statements.  (i) As soon
as available and in any event within 60 days after the close of each of the
first three quarterly accounting periods in each fiscal year of the Parent
Borrower, consolidated balance sheets of the Parent Borrower and its
Subsidiaries as at the end of such period and the related consolidated
statements of income, changes in shareholders’ equity and cash flows of the
Parent Borrower and its Subsidiaries for such period and (in the case of the
second and third quarterly periods) for the period from the beginning of the
current fiscal year to the end of such quarterly period, setting forth in each
case in comparative form the consolidated figures for the corresponding periods
of the previous fiscal year, all in reasonable detail and certified by the chief
financial officer of the Parent Borrower as presenting fairly in all material
respects, in accordance with GAAP (except as specifically set forth therein;
provided any exceptions or qualifications thereto must be acceptable to the
Administrative Agent) on a basis consistent with such prior fiscal periods, the
information contained therein, subject to changes resulting from normal year-end
audit adjustments and the absence of full footnote disclosure.

 

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(ii)                            As soon as available and in any event within 60
days after the close of each of the first three quarterly accounting periods in
each fiscal year of ARL, consolidated balance sheets of ARL and its Subsidiaries
as at the end of such period and the related consolidated statements of income
of ARL and its Subsidiaries for such period and (in the case of the second and
third quarterly periods) for the period from the beginning of the current fiscal
year to the end of such quarterly period, setting forth in each case in
comparative form the consolidated figures for the corresponding periods of the
previous fiscal year, all in reasonable detail and certified by the chief
financial officer of ARL as presenting fairly in all material respects, in
accordance with GAAP (except as specifically set forth therein; provided any
exceptions or qualifications thereto must be acceptable to the Administrative
Agent) on a basis consistent with such prior fiscal periods, the information
contained therein, subject to changes resulting from normal year-end audit
adjustments and the absence of full footnote disclosure.

 

(iii)                         As soon as available and in any event within 60
days after the close of each of the first three quarterly accounting periods in
each fiscal year of each Designated Subsidiary Borrower (other than ACUS) that
is required to produce quarterly Statutory Statements, such Statutory
Statements.  As of the Closing Date, ARL and Arch Europe are not required to
deliver quarterly Statutory Statements.

 

(c)                            Officer’s Certificates.  At the time of the
delivery of the financial statements provided for in Sections 6.01(a) and
6.01(b), a Compliance Certificate.

 

(d)                           Notice of Default or Litigation.  (x) Within five
Business Days after any Borrower becomes aware of the occurrence of any Default
and/or any event or condition constituting, or which would reasonably be
expected to have, a Material Adverse Effect, a certificate of a Financial
Officer of such Borrower setting forth the details thereof and the actions which
such Borrower (or the Parent Borrower or any of its Subsidiaries) is taking or
proposes to take with respect thereto and (y) promptly after any Borrower knows
of the commencement thereof, notice of any litigation, dispute or proceeding
involving a claim against any Borrower and/or any Subsidiary which claim would
reasonably be expected to have a Material Adverse Effect.

 

(e)                            Change in Debt Rating.  Promptly but in any event
within one Business Day after notice of any announcement by Moody’s or S&P of
any change or possible change in a Parent Debt Rating.

 

(f)                             Other Statements and Reports.  Promptly upon the
mailing thereof to the security holders of the Parent Borrower generally, copies
of all financial statements, reports and proxy statements so mailed (unless same
is publicly available via the SEC’s “EDGAR” filing system).

 

(g)                            SEC Filings.  Promptly upon the filing thereof
copies of all registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and annual, quarterly or
monthly reports which the Parent Borrower shall have filed with the SEC or any
national securities exchange (unless same is publicly available via the SEC’s

 

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“EDGAR” filing system) or (ii) written notification of the filing of a Form 10-Q
or Form 10-K with the SEC.

 

(h)                           Insurance Reports and Filings.  Promptly after the
filing thereof, a copy of each Statutory Statement filed by each Regulated
Insurance Company.

 

(i)                               Promptly following the delivery or receipt, as
the case may be, by any Regulated Insurance Company or any of their respective
Subsidiaries, copies of (a) each material registration, filing or submission
made by or on behalf of any Regulated Insurance Company with any Applicable
Insurance Regulatory Authority, except for policy form or rate filings, (b) each
material examination and/or audit report submitted to any Regulated Insurance
Company by any Applicable Insurance Regulatory Authority, (c) all material
information which the Lenders may from time to time request with respect to the
nature or status of any material deficiencies or violations reflected in any
examination report or other similar report, and (d) each material report, order,
direction, instruction, approval, authorization, license or other notice which
any Borrower or any Regulated Insurance Company may at any time receive from any
Applicable Insurance Regulatory Authority.  For the purpose of this clause
(ii) only, determinations of “material” shall be made by the Borrowers in good
faith.

 

(ii)                            As soon as available and in any event within 120
days after the end of each fiscal year of the Parent Borrower (but subject to
the consent of the actuarial consulting firm referred to below), a report by an
independent actuarial consulting firm of recognized national standing reviewing
the adequacy of loss and loss adjustment expense reserves as at the end of the
last fiscal year of the Parent Borrower and its Subsidiaries on a consolidated
basis, determined in accordance with SAP and stating that the Regulated
Insurance Companies have maintained adequate reserves, it being agreed that in
each case such independent firm will be provided access to or copies of all
relevant valuations relating to the insurance business of each such Regulated
Insurance Company in the possession of or available to the Parent Borrower or
its Subsidiaries.

 

(iii)                         Promptly following notification thereof from a
Governmental Authority, notification of the suspension, limitation, termination
or non-renewal of, or the taking of any other materially adverse action in
respect of, any Insurance License.

 

(i)                               Borrowing Base Certificate.  No later than the
tenth Business Day of each month, a Borrowing Base Certificate from each
Designated Subsidiary Borrower for whose account a Tranche A Letter of Credit
has been issued as of the last day of the immediately preceding month, executed
by an Responsible Officer of such Designated Subsidiary Borrower.  In the event
that any Borrowing Base Certificate reflects a Borrowing Base deficiency for any
Designated Subsidiary Borrower for whose account a Tranche A Letter of Credit
has been issued, on the date such Borrowing Base deficiency is cured, such
Designated Subsidiary Borrower shall issue a revised Borrowing Base Certificate
reflecting such cure.

 

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(j)                              Section 32 Direction.  Promptly following
receipt thereof by ARL, notice of any direction or other notification received
by ARL from the Bermuda Monetary Authority pursuant to Section 32 of the
Insurance Act, 1978 of Bermuda.

 

(k)                           Other Information.  With reasonable promptness,
such other information or existing documents (financial or otherwise) as the
Administrative Agent or any Lender may reasonably request from time to time.

 

Documents required to be delivered pursuant to Section 6.01will be delivered in
electronic versions (i.e., soft copies) by the applicable Borrower by electronic
mail to the Administrative Agent who shall post such documents on the Borrowers’
behalf on an Internet or intranet website to which each Lender and the
Administrative Agent have access (whether a commercial, third-party website or
whether sponsored by the Administrative Agent); provided that: the applicable
Borrower shall deliver paper copies of such documents to the Administrative
Agent or any Lender upon its request to such Borrower to deliver such paper
copies until a written request to cease delivering paper copies is given by the
Administrative Agent or such Lender.  The Administrative Agent shall have no
obligation to request the delivery of or to maintain paper copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Borrowers with any such request by a Lender for
delivery, and each Lender shall be solely responsible for requesting delivery to
it or maintaining its copies of such documents.

 

Each Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Arranger may, but shall not be obligated to, make available to the Lenders and
the Fronting Banks materials and/or information provided by or on behalf of the
Borrowers hereunder (collectively, “Borrower Materials”) by posting the Borrower
Materials on Debt Domain, IntraLinks, Syndtrak, ClearPar, or another similar
electronic system (the “Platform”) and (b) certain of the Lenders (each, a
“Public Lender”) may have personnel who do not wish to receive material
non-public information with respect to the Borrowers or their Affiliates, or the
respective securities of any of the foregoing, and who may be engaged in
investment and other market-related activities with respect to such Persons’
securities.  The Borrowers hereby agree that (w) all Borrower Materials that are
to be made available to Public Lenders shall be clearly and conspicuously marked
“PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof; (x) by marking Borrower Materials
“PUBLIC,” each Borrower shall be deemed to have authorized the Administrative
Agent, the Arrangers, the Fronting Banks and the Lenders to treat such Borrower
Materials as not containing any material non-public information with respect to
the Borrowers or its securities for purposes of United States Federal and state
securities laws (provided, however, that to the extent such Borrower Materials
constitute Information, they shall be treated as set forth in Section 10.07);
(y) all Borrower Materials marked “PUBLIC” are permitted to be made available
through a portion of the Platform designated “Public Side Information;” and
(z) the Administrative Agent and the Arranger shall be entitled to treat any
Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not designated “Public Side Information.”

 

6.02                        Books, Records and Inspections.  Each Borrower will
(i) keep, and will cause each of its Subsidiaries to keep, proper books of
record and account in which full, true and correct

 

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entries in conformity with GAAP or SAP, as applicable, shall be made of all
dealings and transactions in relation to its business and activities; and
(ii) subject to binding contractual confidentiality obligations of such Borrower
and its Subsidiaries to third parties and to Section 10.7, permit, and will
cause each of its Subsidiaries to permit, representatives of any Lender (at such
Lender’s expense prior to the occurrence of an Event of Default and at such
Borrower’s expense after an Event of Default has occurred and is continuing) to
visit and inspect any of their respective properties, to examine their
respective books and records and to discuss their respective affairs, finances
and accounts with their respective officers, employees and independent public
accountants, in each case at such reasonable times and as often as may
reasonably be desired.  Each Borrower agrees to cooperate and assist in such
visits and inspections.

 

6.03                        Insurance.  Each Borrower will maintain, and will
cause each of its Subsidiaries to maintain (either in the name of such Borrower
or in the Subsidiary’s own name) with financially sound and reputable insurance
companies, insurance on all their property in at least such amounts and against
at least such risks as are usually insured against in the same general area by
companies of established repute engaged in the same or similar businesses.

 

6.04                        Payment of Taxes.  Each Borrower will pay and
discharge, and will cause each of its Subsidiaries to pay and discharge, all
income taxes and all other material taxes, assessments and governmental charges
or levies imposed upon it or upon its income or profits, or upon any properties
belonging to it, in each case, on a timely basis prior to the date on which
penalties attach thereto, and all lawful claims which, if unpaid, might become a
Lien or charge upon any properties of such Borrower or any of its Subsidiaries;
provided that neither any Borrower nor any Subsidiary of any Borrower shall be
required to pay any such tax, assessment, charge, levy or claim which is being
contested in good faith and by proper proceedings if it has maintained adequate
reserves with respect thereto in accordance with GAAP.

 

6.05                        Maintenance of Existence.  Each Borrower will
maintain, and will cause each of its Subsidiaries to maintain, its existence;
provided that a Borrower shall not be required to maintain the existence of any
of its Subsidiaries (other than each Borrower the existence of which will be
maintained at all times) if such Borrower shall determine in good faith that the
preservation thereof is no longer desirable in the conduct of the business of
such Borrower and its Subsidiaries taken as a whole.  Each Borrower will qualify
and remain qualified, and cause each of its Subsidiaries to qualify and remain
qualified, as a foreign corporation in each jurisdiction where such Borrower or
such Subsidiary, as the case may be, is required to be qualified, except in
those jurisdictions in which the failure to receive or retain such
qualifications would not reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect.

 

6.06                        Compliance with Statutes, Etc.  Each Borrower will,
and will cause each Subsidiary to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls) other than those the non-compliance with which would not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.

 

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6.07                        ERISA.  Promptly after the Parent Borrower or any of
its Subsidiaries knows or has reason to know that any of the events or
conditions specified below with respect to any Plan or Multiemployer Plan or
Foreign Pension Plan has occurred or exists, deliver to the Administrative Agent
a certificate of the chief financial officer of the Parent Borrower setting
forth details respecting such event or condition and the action if any, that the
Parent Borrower, such Subsidiary or ERISA Affiliate proposes to take with
respect thereto (and a copy of any report or notice required to be filed with or
given to PBGC or an applicable foreign governmental agency by the Parent
Borrower, such Subsidiary or ERISA Affiliate with respect to such event or
condition):

 

(i)                               any reportable event, as defined in
Section 4043(c) of ERISA and the regulations issued thereunder, with respect to
a Plan which would reasonably be expected to result in a liability to the Parent
Borrower or any of its Subsidiaries in excess of $5,000,000, other than events
for which the 30 day notice period has been waived;

 

(ii)                            the filing under Section 4041(c) of ERISA of a
notice of intent to terminate any Plan under a distress termination or the
distress termination of any Plan which, in either case, would reasonably be
expected to result in a liability to the Parent Borrower or any of its
Subsidiaries in excess of $5,000,000;

 

(iii)                         the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Parent Borrower, any of its
Subsidiaries or any of its ERISA Affiliates of a notice from a Multiemployer
Plan that such action has been taken by PBGC with respect to such Multiemployer
Plan which would reasonably be expected to result in a liability to the Parent
Borrower or any of its Subsidiaries in excess of $5,000,000;

 

(iv)                        the receipt by the Parent Borrower, any of its
Subsidiaries or any of its ERISA Affiliates of notice from a Multiemployer Plan
that the Parent Borrower, any of its Subsidiaries or any of its ERISA Affiliates
has incurred withdrawal liability under Section 4201 of ERISA in excess of
$5,000,000 or that such Multiemployer Plan is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA whereby a deficiency or additional
assessment is levied or threatened to be levied in excess of $5,000,000 against
the Parent Borrower, any of its Subsidiaries or any of its ERISA Affiliates;

 

(v)                           the institution of a proceeding by a fiduciary of
any Plan or Multiemployer Plan against the Parent Borrower, any of its
Subsidiaries or any of its ERISA Affiliates to enforce Section 515 or
4219(c)(5) of ERISA asserting liability in excess of $5,000,000, which
proceeding is not dismissed within 30 days; and

 

(vi)                        that any material contribution required to be made
with respect to a Foreign Pension Plan has not been timely made, or that any
Borrower or any Subsidiary of such Borrower may incur any material liability
pursuant to any Foreign Pension Plan (other than to make contributions in the
ordinary course of business).

 

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6.08                        Maintenance of Property.  Each Borrower will, and
will cause each of its Subsidiaries to, maintain all of their properties and
assets in good condition, repair and working order, ordinary wear and tear
excepted, except where failure to maintain the same would not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.

 

6.09                        Maintenance of Licenses and Permits.  Each Borrower
will, and will cause each of its Subsidiaries to, maintain all permits, licenses
and consents as may be required for the conduct of its business by any state,
federal or local government agency or instrumentality, except where failure to
maintain the same would not reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect.

 

6.10                        Financial Strength Ratings.  Each Borrower shall
cause each Designated Subsidiary Borrower (other than ACUS) to maintain at all
times a Financial Strength Rating of at least “B++” by A.M. Best Company, Inc.
or “BBB+” from S&P; provided that any Regulated Insurance Company acquired or
created after the Closing Date shall not be required to comply with this
Section 6.10 until the date occurring 180 days after the date of such
acquisition or creation.

 

6.11                        End of Fiscal Years; Fiscal Quarters.  Each Borrower
will cause (i) each of its, and each of its Subsidiaries’, fiscal years to end
on December 31 of each year and (ii) each of its, and each of its Subsidiaries’,
fiscal quarters to end on dates which are consistent with a fiscal year end as
described above, provided that the Borrowers shall not be required to comply
with the foregoing with respect to any Subsidiary of any Borrower acquired after
the Closing Date having a fiscal year ending on a date other than December 31 at
the time of such acquisition.

 

6.12                        Borrowing Base Requirement.  Each Designated
Subsidiary Borrower shall at all times cause its respective Borrowing Base to
equal or exceed the Tranche A L/C Obligations attributable to such Designated
Subsidiary Borrower at such time. If at any time a Designated Subsidiary
Borrower’s Borrowing Base is less than the Tranche A L/C Obligations
attributable to such Designated Subsidiary Borrower at such time, such
Designated Subsidiary Borrower shall as promptly as possible (and in any event
within three (3) Business Days) deposit into its Collateral Account Cash and
Eligible Securities or reduce its Tranche A L/C Obligations, or a combination of
the foregoing, in an amount sufficient to eliminate such excess.

 

6.13                        Further Assurances.  Each Borrower shall promptly
and duly execute and deliver to the Administrative Agent such documents and
assurances and take such further action as the Administrative Agent may from
time to time reasonably request in order to carry out more effectively the
intent and purpose of the Credit Documents and to establish, protect and perfect
the rights and remedies created or intended to be created in favor of the
Administrative Agent, the Administrative Agent or the Lenders pursuant to the
Credit Documents.

 

ARTICLE VII.  NEGATIVE COVENANTS

 

Until the Commitments have expired or terminated, no Loans or Letters of Credit
are outstanding, and the principal of and interest on each Loan, all
Unreimbursed Amounts and all fees

 

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payable hereunder have been paid in full, each Borrower covenants and agrees
(solely as to itself and its Subsidiaries) with the Lenders that:

 

7.01                        Changes in Business and Investments.  No Borrower
will, nor will it permit any of its Subsidiaries to, engage (directly or
indirectly) in any business other than businesses in which they are engaged on
the Closing Date and reasonable extensions thereof and other businesses that are
complementary or reasonably related thereto.

 

7.02                        Consolidations, Mergers, Sales of Assets and
Acquisitions.

 

(a)                           No Borrower will, nor will it permit any of its
Subsidiaries to, consolidate or merge with or into any other Person, provided
that (i) the Parent Borrower may merge with another Person if (x) the Parent
Borrower is the corporation surviving such merger and (y) immediately after
giving effect to such merger, no Default shall have occurred and be continuing,
and (ii) Subsidiaries of any Borrower may merge with one another provided that
if any such merger involves a Designated Subsidiary Borrower, then a Designated
Subsidiary Borrower is the corporation surviving such merger.

 

(b)                           No Borrower will, nor will it permit any of its
Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer or
dispose of, voluntarily or involuntarily (any of the foregoing being referred to
in this Section 7.02(b) as a “Disposition” and any series of related
Dispositions constituting but a single Disposition), any of its properties or
assets, tangible or intangible (including but not limited to sale, assignment,
discount or other disposition of accounts, contract rights, chattel paper or
general intangibles with or without recourse), except:

 

(i)                               any Disposition of used, worn out, obsolete or
surplus property of the Parent Borrower or any Subsidiary in the ordinary course
of business;

 

(ii)                            the license (as licensor) of intellectual
property so long as such license does not materially interfere with the business
of the Parent Borrower or any of its Subsidiaries;

 

(iii)                         the Disposition of cash, cash equivalents and
investment securities;

 

(iv)                        the release, surrender or waiver of contract, tort
or other claims of any kind as a result of the settlement of any litigation or
threatened litigation;

 

(v)                           the granting or existence of Liens (and
foreclosure thereon) not prohibited by this Agreement;

 

(vi)                        the lease or sublease of real property so long as
such lease or sublease does not materially interfere with the business of the
Parent Borrower or any of its Subsidiaries;

 

(vii)                     Dividends not prohibited by Section 7.07;

 

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(viii)                  any ceding of insurance or reinsurance in the ordinary
course of business;

 

(ix)                        any Disposition by the Parent Borrower set forth on
Schedule 7.02(b);

 

(x)                           Dispositions of properties or assets having an
aggregate fair value (as determined in good faith by the board of directors of
the Parent Borrower) of less than $10,000,000;

 

(xi)                        Dispositions by the Parent Borrower or any of its
Subsidiaries (other than ARL and ARC) of any of their respective properties or
assets to the Parent Borrower or to any Wholly-Owned Subsidiary of the Parent
Borrower; and

 

(xii)                     other Dispositions (x) provided that such sale does
not constitute all or substantially all of the assets of ARC and/or ARL and
(y) to the extent that the fair market value of the assets the subject thereof
(as determined in good faith by the board of directors or senior management of
the Parent Borrower), when added to the fair market value of the assets the
subject of any such other Disposition or Dispositions permitted by this clause
(xii) previously consummated during the same fiscal year of the Parent Borrower
(as determined in good faith by the board of directors or senior management of
the Parent Borrower), does not constitute more than 20% of the consolidated
assets of the Parent Borrower and its Subsidiaries as of the last day of the
most recently ended fiscal year of the Parent Borrower.

 

(c)                            No Borrower will, nor will it permit any of its
Subsidiaries to, acquire all or substantially all of the capital stock or assets
of another Person unless at such time and immediately after giving effect
thereto no Default exists or would result therefrom.

 

7.03                        Liens.  No Borrower will, nor will it permit any of
its Subsidiaries to, permit, create, assume, incur or suffer to exist any Lien
on any asset, tangible or intangible, now owned or hereafter acquired by it,
except:

 

(a)                           Liens created pursuant to the Credit Documents;

 

(b)                           Liens existing on the Closing Date and listed on
Schedule 7.03;

 

(c)                            Liens securing repurchase agreements constituting
a borrowing of funds by the Parent Borrower or any Subsidiary of the Parent
Borrower in the ordinary course of business for liquidity purposes and in no
event for a period exceeding 90 days in each case;

 

(d)                           Liens on assets of any Subsidiary of the Parent
Borrower arising pursuant to purchase money mortgages, capital leases or
security interests securing Indebtedness representing the purchase price (or
financing of the purchase price within 90 days after the respective purchase)
securing Indebtedness of the type described in clause (e) of the definition of
“Permitted Subsidiary Indebtedness”;

 

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(e)                            Liens (x) on any asset of any Person existing at
the time such Person is merged or consolidated with or into the Parent Borrower
or any of its Subsidiaries and not created in contemplation of such event or
(y) securing Acquired Indebtedness so long as such Lien existed prior to the
contemplated acquisition, was not created in contemplation of such acquisition
and only relates to assets of the Person so acquired;

 

(f)                             Liens securing obligations owed by the Parent
Borrower to any of its Subsidiaries or owed by any Subsidiary of the Parent
Borrower to the Parent Borrower or any other Subsidiary of the Parent Borrower,
in each case solely to the extent that such Liens are required by an Applicable
Insurance Regulatory Authority for such Person to maintain such obligations;

 

(g)                            Liens securing insurance obligations of
Subsidiaries of the Parent Borrower owed by any Subsidiary of the Parent
Borrower to the Parent Borrower or any other Subsidiary of the Parent Borrower,
in each case solely to the extent that such Liens are required or requested by
ratings agencies, clients or brokers for such Person to maintain such insurance
obligations;

 

(h)                          Liens on investments and cash balances of any
Regulated Insurance Company securing obligations of such Regulated Insurance
Company in respect of trust or similar arrangements formed, letters of credit
issued or funds withheld balances established, in each case, in the ordinary
course of business for the benefit of cedents to secure reinsurance recoverables
owed to them by such Regulated Insurance Company;

 

(i)                               inchoate Liens for taxes, assessments or
governmental charges or levies not yet due or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by appropriate
proceedings for which adequate reserves have been established in accordance with
GAAP;

 

(j)                              Liens in respect of property or assets of the
Parent Borrower or any of its Subsidiaries imposed by law, which were incurred
in the ordinary course of business and do not secure Indebtedness for borrowed
money, such as carriers’, warehousemen’s, materialmen’s and mechanics’ liens and
other similar Liens arising in the ordinary course of business, and (x) which do
not in the aggregate materially detract from the value of the Parent Borrower’s
or such Subsidiary’s property or assets or materially impair the use thereof in
the operation of the business of the Parent Borrower or such Subsidiary or
(y) which are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the property
or assets subject to any such Lien;

 

(k)                           Licenses, sublicenses, leases, or subleases
granted to other Persons not materially interfering with the conduct of the
business of the Parent Borrower or any of its Subsidiaries;

 

(l)                               easements, rights-of-way, restrictions,
encroachments and other similar charges or encumbrances, and minor title
deficiencies, in each case not securing Indebtedness and not materially
interfering with the conduct of the business of the Parent Borrower or any of
its Subsidiaries;

 

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(m)                       Liens arising out of the existence of judgments or
awards not constituting an Event of Default under Section 8.01(g);

 

(n)                           Liens (other than Liens imposed under ERISA)
incurred in the ordinary course of business in connection with workers
compensation claims, unemployment insurance and social security benefits and
Liens securing the performance of bids, tenders, leases and contracts in the
ordinary course of business, statutory obligations, surety bonds, performance
bonds and other obligations of a like nature incurred in the ordinary course of
business and consistent with past practice (exclusive of obligations in respect
of the payment for borrowed money);

 

(o)                           bankers’ Liens, rights of setoff and other similar
Liens existing solely with respect to cash and cash equivalents on deposit in
one or more accounts maintained by the Parent Borrower or any of its
Subsidiaries, in each case granted in the ordinary course of business in favor
of the bank or banks with which such accounts are maintained;

 

(p)                           Liens arising out of the refinancing, extension,
renewal or refunding of any Indebtedness secured by any Lien permitted by any of
the clauses of this Section 7.03, provided that such Indebtedness is not
increased (except to pay premiums, accrued interest and expenses incurred in
such refinancing) and is not secured by any additional assets;

 

(q)                           Liens in respect of property or assets of any
Subsidiary of the Parent Borrower securing Indebtedness of the type described in
clause (c) and (j) of the definition of “Permitted Subsidiary Indebtedness”
provided the termination amount or the amount(s) determined as the
mark-to-market value(s) for such Indebtedness does not exceed $500,000,000;

 

(r)                              Liens in respect of property or assets of any
Subsidiary of the Parent Borrower securing Indebtedness of the type described in
clauses (d), (f) and (l) of the definition of “Permitted Subsidiary
Indebtedness”;

 

(s)                             Liens in respect of property or assets of any
Subsidiary of the Parent Borrower securing Indebtedness of the type described in
clause (i) of the definition of “Permitted Subsidiary Indebtedness”; provided
that the aggregate amount of the Indebtedness secured by such Liens shall not,
when added to the aggregate amount of all outstanding obligations of the Parent
Borrower secured by Liens incurred pursuant to Section 7.03(t) exceed at any
time 10% of Consolidated Net Worth of the Parent Borrower at the time of
incurrence of any new Liens permitted by this clause (s);

 

(t)                              Liens arising in connection with securities
lending arrangements entered into by the Parent Borrower or any of its
Subsidiaries with financial institutions in the ordinary course of business so
long as any securities subject to any such securities lending arrangement do not
constitute collateral under any Security Document; and

 

(u)                           in addition to the Liens described in clauses
(a) through (t) above, Liens securing obligations of the Parent Borrower or any
of its Subsidiaries; provided that the aggregate amount of the obligations
secured by such Liens shall not exceed at any time 10% of Consolidated

 

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Net Worth of the Parent Borrower at the time of incurrence of any Liens
permitted by this clause (u).

 

7.04                        Indebtedness.  The Parent Borrower will not permit
any of its Subsidiaries (other than ACUS) to create, incur, assume or permit to
exist any Indebtedness, or agree, become or remain liable (contingent or
otherwise) to do any of the foregoing, except for (i) the Obligations,
(ii) Indebtedness under the Long Term L/C Facilities and (iii) Permitted
Subsidiary Indebtedness.

 

7.05                        Issuance of Stock.  No Borrower will, nor will it
permit any of its Subsidiaries to, directly or indirectly issue, sell, assign,
pledge, or otherwise encumber or dispose of any shares of its preferred or
preference equity securities or options to acquire preferred or preference
equity securities, except the issuance of preferred or preference equity
securities, so long as (i) (x) no part of such preferred or preference equity
securities is mandatorily redeemable (whether on a scheduled basis or as a
result of the occurrence of any event or circumstance) prior to the first
anniversary of the Maturity Date or (y) all such preferred or preference equity
securities or options therefor are issued to and held by the Parent Borrower and
its Wholly-Owned Subsidiaries and (ii) such preferred or preference equity
securities do not contain any financial performance related covenants or
incurrence covenants which restrict the operations of the issuer thereof;
provided that the Parent Borrower and its Subsidiaries may issue preferred stock
as described on Schedule 7.05.

 

7.06                        Dissolution.  No Borrower will, nor will it permit
any of its Subsidiaries that is a Borrower to, suffer or permit dissolution or
liquidation either in whole or in part, except through corporate reorganization
to the extent permitted by Section 7.02.

 

7.07                        Restricted Payments.  The Parent Borrower will not
declare or pay any dividends, purchase, redeem, retire, defease or otherwise
acquire for value any of its Equity Interests now or hereafter outstanding,
return any capital to its stockholders, partners or members (or equivalent
Persons thereof) as such, make any distribution of assets, Equity Interests,
obligations or securities to its stockholders, partners or members (or the
equivalent Persons thereof) as such, or permit any of its subsidiaries to
purchase, redeem, retire, defease or otherwise acquire for value any Equity
Interests in Parent Borrower or to sell any Equity Interest therein (each of the
foregoing a “Dividend” and, collectively, “Dividends”) unless no Default shall
have occurred and be continuing at the time of such Dividend or would result
therefrom, except that the Parent Borrower and its Subsidiaries may declare and
pay cash Dividends with respect to any Preferred Security issued by the Parent
Borrower or any of its Subsidiaries, if, at the time of and after giving effect
to such dividend, no Default under Sections 8.01(a), 8.01(d)(i)(x),
8.01(d)(ii) or 8.01(e) shall have occurred and be continuing.

 

7.08                        Transactions with Affiliates.  No Borrower will, nor
will it permit any of its Subsidiaries to, enter into or be a party to a
transaction with any Affiliate of such Borrower or such Subsidiary (which
Affiliate is not the Parent Borrower or a Subsidiary), except (i) transactions
with Affiliates on terms (x) no less favorable to the Parent Borrower or such
Subsidiary than those that could have been obtained in a comparable transaction
on an arm’s length basis

 

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from an unrelated Person or (y) approved by a majority of the disinterested
members of the board of directors of the Parent Borrower, (ii) transactions and
payments pursuant to agreements and arrangements disclosed in, or listed as an
exhibit to, the Parent Borrower’s annual report on Form 10-K filed with the SEC
on March 3, 2014 or any subsequent other filing with the SEC through the Closing
Date or any such agreement or arrangement as thereafter amended, extended or
replaced on terms that are, in the aggregate, no less favorable to the Parent
Borrower and its Subsidiaries than the terms of such agreement on the Closing
Date, as the case may be, (iii) Dividends not prohibited by Section 7.07,
(iv) fees and compensation paid to and indemnities provided on behalf of
officers and directors of the Parent Borrower or any of its Subsidiaries as
reasonably determined in good faith by the board of directors or senior
management of Parent Borrower and (v) the issuance of common stock of the Parent
Borrower.

 

7.09                        Maximum Parent Borrower Leverage Ratio.  The Parent
Borrower will not permit the Parent Borrower Leverage Ratio on the last day of
any fiscal quarter or fiscal year of the Parent Borrower to be greater than
0.35:1.00.

 

7.10                        Minimum Consolidated Tangible Net Worth.  So long as
the Tranche B Commitments are in effect:

 

(a)                           The Parent Borrower will not permit its
Consolidated Tangible Net Worth at any time to be less than, the sum of
(i) $3,948,323,000 plus (ii) 25% of its quarterly Consolidated Net Income (if
positive) for each fiscal quarter ending after March 31, 2014 plus (iii) 25% of
the aggregate Net Cash Proceeds received from any issuance of common or
preferred equity interests of the Parent Borrower consummated on or after the
Closing Date.

 

(b)                           Neither ARC nor ARL will permit its respective
Consolidated Tangible Net Worth at any time to be less than (A) in the case of
ARC, (i) $868,443,000 plus (ii) 25% of its quarterly Consolidated Net Income (if
positive) for each fiscal quarter ending after March 31, 2014; and (B) in the
case of ARL, (i) $4,186,188,000 plus (ii) 25% of its quarterly Consolidated Net
Income (if positive) for each fiscal quarter ending after March 31, 2014.

 

7.11                        Limitation on Certain Restrictions on Subsidiaries. 
No Borrower will, nor will it permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or consensual restriction on the ability of any such
Subsidiary to (a) pay dividends or make any other distributions on its capital
stock or any other interest or participation in its profits owned by such
Borrower or any of its Subsidiaries, or pay any Indebtedness owed to such
Borrower or any of its Subsidiaries, (b) make loans or advances to such Borrower
or any of its Subsidiaries or (c) transfer any of its properties or assets to
such Borrower or any of its Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of (i) applicable Law, (ii) the
Long-Term L/C Facilities (and any replacements, renewals and extensions thereof
and any successor facilities, provided that the encumbrances and restrictions
contained in any such replacements, renewals or extensions or any such successor
facilities are not materially more disadvantageous to the Lenders than is
customary in comparable financings and such encumbrances and restrictions will
not materially affect any Borrower’s ability to make principal or interest
payments on the Loans or to reimburse Unreimbursed

 

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Amounts and do not restrict the ability to grant any Lien contemplated or
required by this Agreement), (iii) the Existing Senior Notes (and any additional
issuances of notes, provided that the encumbrances and restrictions contained in
any such additional notes shall not be materially more disadvantageous to the
Lenders than is customary in comparable financings and such encumbrances and
restrictions will not materially affect any Borrower’s ability to make principal
or interest payments on the Loans or to reimburse Unreimbursed Amounts and do
not restrict the ability to grant any Lien contemplated or required by this
Agreement), (iv) this Agreement and the other Credit Documents, (v) customary
provisions restricting subletting or assignment of any lease governing any
leasehold interest of such Borrower or any of its Subsidiaries, (vi) customary
provisions restricting assignment of any licensing agreement (in which such
Borrower or any of its Subsidiaries is the licensee) or other contract
(including leases) entered into by such Borrower or any of its Subsidiaries in
the ordinary course of business, (vii) restrictions on the transfer of any asset
pending the close of the sale of such asset, (viii) restrictions on the transfer
of any asset subject to a Lien permitted by Section 7.03, (ix) agreements
entered into by a Regulated Insurance Company with an Applicable Insurance
Regulatory Authority or ratings agency in the ordinary course of business,
(x) any instrument governing Acquired Indebtedness, which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Person or the properties or assets of the Person so
acquired, (xi) customary provisions in partnership agreements, limited liability
company organizational governance documents, joint venture agreements and other
similar agreements entered into in the ordinary course of business that restrict
the transfer of ownership interests in such partnership, limited liability
company, joint venture or similar Person, (xii) restrictions on cash or other
deposits or net worth imposed by customers under contracts entered into in the
ordinary course of business, (xiii)  an agreement or instrument relating to any
Permitted Subsidiary Indebtedness of the type described in clause (e), (h),
(i) or (k) of the definition thereof if such encumbrance or restriction is not
materially more disadvantageous to the Lenders than is customary in comparable
financings and such encumbrance or restriction will not materially affect such
Borrower’s ability to make principal or interest payments on the Loans or to
reimburse Unpaid Drawings and (xiv) any encumbrances or restrictions imposed by
any amendments or refinancings of the contracts, instruments or obligations
referred to in clause (x) above, provided that such amendments or refinancings
are no more materially restrictive with respect to such encumbrances and
restrictions that those prior to such amendment or refinancing.

 

7.12                        Private Act.  No Borrower will become subject to a
Private Act.

 

7.13                        Sanctions.  No Borrower will, nor will it permit any
of its Subsidiaries to, directly or indirectly, use the proceeds of any Credit
Extension, or lend, contribute or otherwise make available such proceeds to any
Subsidiary, joint venture partner or other individual or entity, for the purpose
of funding any activities of or business with any individual or entity, or in
any Designated Jurisdiction, that, at the time of such funding, would result in
a violation of Sanctions by such person, or in any other manner that will result
in a violation by any individual or entity participating in the transaction
(including as Lender, Arranger, Administrative Agent, L/C Administrator,
Fronting Bank or otherwise) of Sanctions.

 

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7.14                        Anti-Corruption Laws.  To its knowledge, no Borrower
will, nor will it permit any of its Subsidiaries to, directly or indirectly use
the proceeds of any Credit Extension for any purpose which would result in a
material violation of the United States Foreign Corrupt Practices Act of 1977,
the UK Bribery Act 2010, or other similar legislation in other jurisdictions.

 

ARTICLE VIII.  EVENTS OF DEFAULT AND REMEDIES

 

8.01                        Events of Default.  Any of the following shall
constitute an Event of Default:

 

(a)                           Payments.  Any Borrower shall (i) default in the
payment when due of any principal of any Loan or any reimbursement obligation in
respect of any L/C Borrowing, (ii) default, and such default shall continue for
three or more Business Days, in the payment when due of any interest on any Loan
or L/C Borrowing or any fees payable pursuant to the Credit Documents or
(iii) default in the prompt payment following notice or demand in respect of any
other amounts owing hereunder or under any other Credit Document; or

 

(b)                           Representations, Etc.  Any representation,
warranty or material statement made or deemed made pursuant to the last sentence
of Section 5.02 by any Borrower herein or in any other Credit Document or in any
certificate or material statement delivered or required to be delivered pursuant
hereto or thereto shall prove to be untrue in any material respect on the date
as of which made or deemed made; or

 

(c)                            Covenants.  Any Borrower shall (i) default in the
due performance or observance by it of any term, covenant or agreement contained
in Section 6.01(d), 6.02(ii), 6.05 (but only with respect to the first sentence
thereof), 6.10, 6.12 or Article VII, (ii) default in the due performance or
observance by it of any term, covenant or agreement contained in Section 6.01
(other than Section 6.01(d))  and such default shall continue unremedied for a
period of 7 Business Days, or (iii) default in the due performance or observance
by it of any term, covenant or agreement (other than those referred to in
Section 8.01(a) or 8.01 (c)(i) or (ii)) contained in this Agreement and such
default shall continue unremedied for a period of 45 days after knowledge of a
Responsible Officer of such Borrower or written notice to such Borrower from the
Administrative Agent or the Required Lenders; or

 

(d)                           Default under other Agreements.  (i)  The Parent
Borrower or any of its Subsidiaries shall (x) default in any payment with
respect to Indebtedness (other than the Obligations) in excess of $50,000,000
individually or in the aggregate, for the Parent Borrower and its Subsidiaries,
beyond the period of grace, if any, provided in the instrument or agreement
under which such Indebtedness was created or (y) default in the observance or
performance of any agreement or condition relating to any such Indebtedness or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause (determined without regard to whether any notice of
acceleration, or any lapse of time prior to the effectiveness

 

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of any notice of acceleration, is required), any such Indebtedness to become due
prior to its stated maturity; or (ii) Indebtedness of the Parent Borrower or its
Subsidiaries in excess of $50,000,000 shall be declared to be due and payable
other than in accordance with the terms of such Indebtedness or required to be
prepaid, other than by a regularly scheduled required prepayment or as a
mandatory prepayment (unless such required prepayment or mandatory prepayment
results from a default thereunder or an event of the type that constitutes an
Event of Default), prior to the stated maturity thereof; or

 

(e)                            Bankruptcy, Etc.  The Parent Borrower or any of
its Subsidiaries (other than Insignificant Subsidiaries) shall commence a
voluntary case concerning itself under any Debtor Relief Law; or an involuntary
case is commenced against the Parent Borrower or any of its Subsidiaries (other
than Insignificant Subsidiaries) and the petition is not controverted within 10
days, or is not dismissed within 60 days, after commencement of the case; or a
custodian is appointed for, or takes charge of, all or substantially all of the
property of the Parent Borrower or any of its Subsidiaries (other than
Insignificant Subsidiaries); or the Parent Borrower or any of its Subsidiaries
(other than Insignificant Subsidiaries) commences (including by way of applying
for or consenting to the appointment of, or the taking of possession by, a
rehabilitator, receiver, custodian, trustee, conservator or liquidator
(collectively, a “conservator”) or, for the purposes of United Kingdom law, an
administrator or administrative receiver, of itself or all or any substantial
portion of its property) any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency,
liquidation, rehabilitation, supervision, conservatorship or similar law of any
jurisdiction, the Bermuda Companies Law or U.K. Insolvency Act whether now or
hereafter in effect relating to the Parent Borrower or any of its Subsidiaries
(other than Insignificant Subsidiaries); or any such proceeding is commenced
against (i) any Regulated Insurance Company (other than any Regulated Insurance
Company that is an Insignificant Subsidiary) which is engaged in the business of
underwriting insurance and/or reinsurance in the United States, or (ii) the
Parent Borrower or any of its Subsidiaries (other than Insignificant
Subsidiaries or any Regulated Insurance Company described in the immediately
preceding clause (i)) to the extent such proceeding is consented to by such
Person, and in the case of either clause (i) or (ii) remains undismissed for a
period of 60 days; or the Parent Borrower or any of its Subsidiaries (other than
Insignificant Subsidiaries) is adjudicated insolvent or bankrupt; or any order
of relief or other order approving any such case or proceeding is entered; or
(x) any Regulated Insurance Company (other than any Regulated Insurance Company
that is an Insignificant Subsidiary) which is engaged in the business of
underwriting insurance and/or reinsurance in the United States suffers any
appointment of any conservator or the like for it or any substantial part of its
property, or (y) the Parent Borrower or any of its Subsidiaries (other than
Insignificant Subsidiaries or any Regulated Insurance Company described in the
immediately preceding clause (x)) consents to any appointment of any conservator
or the like for it or any substantial part of its property which continues
undischarged or unstayed for a period of 60 days; or the Parent Borrower or any
of its Subsidiaries (other than Insignificant Subsidiaries) makes a general
assignment for the benefit of creditors; or any corporate action is taken by the
Parent Borrower or any of its Subsidiaries (other than Insignificant
Subsidiaries) for the purpose of effecting any of the foregoing; or

 

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(f)                             ERISA.  (i) An event or condition specified in
Section 6.07 shall occur or exist with respect to any Plan or Multiemployer Plan
or Foreign Pension Plan, (ii) the Parent Borrower, any of its Subsidiaries or
any of its ERISA Affiliates shall fail to pay when due any amount which they
shall have become liable to pay to the PBGC or to a Plan or a Multiemployer Plan
or (iii) a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Plan must be terminated, and as a
result of such event, failure or condition, together with all such other events,
failures or conditions, the Parent Borrower, any of its Subsidiaries or any of
its ERISA Affiliates shall incur a liability to a Plan, a Multiemployer Plan, a
Foreign Pension Plan or PBGC (or any combination of the foregoing) which would
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect; or

 

(g)                            Judgments.  One or more judgments or decrees
shall be entered against the Parent Borrower or any of its Subsidiaries
involving a liability, net of undisputed insurance and reinsurance, of
$50,000,000 or more in the case of any one such judgment or decree or in the
aggregate for all such judgments and decrees for the Parent Borrower and its
Subsidiaries and any such judgments or decrees shall not have been vacated,
discharged, satisfied, stayed or bonded pending appeal within 60 days from the
entry thereof; or

 

(h)                           Insurance Licenses.  Any one or more Insurance
Licenses of the Parent Borrower or any of its Subsidiaries shall be suspended,
limited or terminated or shall not be renewed, or any other action shall be
taken by any Governmental Authority, and such action would reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect; or

 

(i)                               Security Documents.  Any Security Document
shall cease to be in full force and effect, or shall cease to give the
Administrative Agent the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, a first priority security
interest in, and Lien on, a material portion of the Collateral subject thereto,
in favor of the Administrative Agent, for the benefit of the Administrative
Agent, the Lenders and the Fronting Banks, superior to and prior to the rights
of all third Persons and subject to no other Liens (other than liens permitted
under Section 7.03); or any Designated Subsidiary Borrower party to any Security
Documents or any other pledgor thereunder shall default in any material respect
in the due performance or observance of any term, covenant or agreement on its
part to be performed or observed pursuant to any Security Document; or

 

(j)                              Change of Control.  A Change in Control shall
occur; or

 

(k)                           Section 32 Direction.  ARL shall receive any
direction or other notification from the Bermuda Monetary Authority pursuant to
Section 32 of the Insurance Act, 1978 of Bermuda.

 

8.02                        Remedies Upon Event of Default.  If any Event of
Default occurs and is continuing, the Administrative Agent shall, at the request
of, or may, with the consent of, the Required Lenders, take any or all of the
following actions:

 

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(a)                           declare the commitment of each Lender to make
Loans and L/C Credit Extensions and any obligation of Fronting Banks to make L/C
Credit Extensions to be terminated, whereupon such commitments and obligation
shall be terminated;

 

(b)                           declare the unpaid principal amount of all
outstanding Loans and L/C Borrowings, all interest accrued and unpaid thereon,
and all other amounts owing or payable hereunder or under any other Credit
Document to be immediately due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby expressly waived by each
Borrower;

 

(c)                            require that the applicable Borrower Cash
Collateralize its outstanding Tranche B Letters of Credit with Cash and Cash
Equivalents in an amount equal to 102% of the Dollar Equivalent of the amount
available to be drawn under all such Tranche B Letters of Credit;

 

(d)                           require that the Collateral in any Collateral
Account consist solely of Cash and Cash Equivalents or such other Eligible
Securities as the Administrative Agent may permit; and

 

(e)                            exercise on behalf of itself, the Lenders and the
Fronting Banks all rights and remedies available to it, the Lenders and the
Fronting Banks under the Credit Documents;

 

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to any Borrower under an applicable Debtor Relief
Law, the obligation of each Lender to make Loans and L/C Credit Extensions and
any obligation of Fronting Banks to make L/C Credit Extensions shall
automatically terminate, the unpaid principal amount of all outstanding Loans
and L/C Borrowings and all interest and other amounts as aforesaid shall
automatically become due and payable, and the obligation of the applicable
Borrower to Cash Collateralize their Tranche B Letters of Credit as aforesaid
shall automatically become effective, in each case without further act of the
Administrative Agent or any Lender. The Administrative Agent shall provide
written notice of any such action to the Parent Borrower but failure to provide
such notice shall not prevent the Administrative Agent from taking any such
action.

 

8.03                        Application of Funds.  After the exercise of
remedies provided for in Section 8.02 (or after the Loans have automatically
become immediately due and payable and the Tranche B L/C Obligations have
automatically been required to be Cash Collateralized as set forth in the
proviso to Section 8.02), any amounts received on account of the Obligations
shall, subject to the provisions of Sections 2.15 and 2.16, be applied in the
following order (provided, however, that notwithstanding anything contained
herein to the contrary, funds received from a Borrower or any of such Borrower’s
Collateral shall be applied only to the Obligations of such Borrower):

 

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;

 

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Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal, interest and Letter of
Credit Fees) payable to the Lenders and the Fronting Banks (including fees,
charges and disbursements of counsel to the respective Lenders and the Fronting
Banks (including fees and time charges for attorneys who may be employees of any
Lender or any Fronting Bank) and amounts payable under Article III), ratably
among them in proportion to the respective amounts described in this clause
Second payable to them;

 

Third, to payment of that portion of the Obligations constituting accrued and
unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other
Obligations, ratably among the Lenders and the Fronting Banks in proportion to
the respective amounts described in this clause Third payable to them;

 

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings, ratably among the Lenders and the
Fronting Banks in proportion to the respective amounts described in this clause
Fourth held by them;

 

Fifth, to the Administrative Agent for the account of (x) the Fronting Banks, in
the case of Fronted Letters of Credit and (y) the Lenders, in the case of
Several Letters of Credit, to Cash Collateralize that portion of L/C Obligations
comprised of the aggregate undrawn amount of Letters of Credit; and

 

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the applicable Borrower or as otherwise required by Law.

 

Subject to Sections 2.03(c) and 2.16, amounts used to Cash Collateralize the
aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above
shall be applied to satisfy drawings under such Letters of Credit as they
occur.  If any amount remains on deposit as Cash Collateral after all Letters of
Credit have either been fully drawn, terminated, cancelled or expired, such
remaining amount shall be applied to the other Obligations, if any, in the order
set forth above.

 

ARTICLE IX.  ADMINISTRATIVE AGENT

 

9.01                        Appointment and Authority.  Each of the Lenders,
each L/C Administrator, each L/C Issuer and each Fronting Bank hereby
irrevocably appoints Bank of America to act on its behalf as the Administrative
Agent hereunder and under the other Credit Documents and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto.  The provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders, the LC Issuers, the L/C Administrators and
the Fronting Banks, and neither the Parent Borrower nor any other Borrower shall
have rights as a third party beneficiary of any of such provisions.  It is
understood and agreed that the use of the term “agent” herein or in any other
Credit Documents (or any other similar term) with reference to the
Administrative Agent is not intended to connote any fiduciary or other implied

 

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(or express) obligations arising under agency doctrine of any applicable Law.
Instead such term is used as a matter of market custom, and is intended to
create or reflect only an administrative relationship between contracting
parties.

 

9.02                        Rights as a Lender.  The Person serving as the
Administrative Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it
were not the Administrative Agent and the term “Lender” or “Lenders” shall,
unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as the Administrative Agent hereunder in its
individual capacity.  Such Person and its Affiliates may accept deposits from,
lend money to, own securities of, act as the financial advisor or in any other
advisory capacity for and generally engage in any kind of business with the
Parent Borrower or any Subsidiary or other Affiliate thereof as if such Person
were not the Administrative Agent hereunder and without any duty to account
therefor to the Lenders.

 

9.03                        Exculpatory Provisions.  The Administrative Agent
shall not have any duties or obligations except those expressly set forth herein
and in the other Credit Documents, and its duties hereunder shall be
administrative in nature.  Without limiting the generality of the foregoing, the
Administrative Agent:

 

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

 

(b)                                 shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Credit Documents
that the Administrative Agent is required to exercise as directed in writing by
the Required Lenders (or such other number or percentage of the Lenders as shall
be expressly provided for herein or in the other Credit Documents), provided
that the Administrative Agent shall not be required to take any action that, in
its opinion or the opinion of its counsel, may expose the Administrative Agent
to liability or that is contrary to any Credit Document or applicable Law,
including for the avoidance of doubt any action that may be in violation of the
automatic stay under any Debtor Relief Law or that may effect a forfeiture,
modification or termination of property of a Defaulting Lender in violation of
any Debtor Relief Law; and

 

(c)                                  shall not, except as expressly set forth
herein and in the other Credit Documents, have any duty to disclose, and shall
not be liable for the failure to disclose, any information relating to the
Parent Borrower or any of its Affiliates that is communicated to or obtained by
the Person serving as the Administrative Agent or any of its Affiliates in any
capacity.

 

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and 8.02) or (ii) in the

 

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absence of its own gross negligence or willful misconduct as determined by a
court of competent jurisdiction by final and nonappealable judgment.  The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until notice describing such Default is given in writing to the
Administrative Agent by the Parent Borrower, a Lender, a Fronting Bank or an L/C
Issuer.

 

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Credit Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Credit
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.

 

9.04                        Reliance by Administrative Agent.  The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person.  The Administrative Agent also may rely upon any statement made
to it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon.  In determining
compliance with any condition hereunder to the making of a Loan, or the issuance
of a Letter of Credit, that by its terms must be fulfilled to the satisfaction
of a Lender or a Fronting Bank, the Administrative Agent may presume that such
condition is satisfactory to such Lender or such Fronting Bank unless the
Administrative Agent shall have received notice to the contrary from such Lender
or such Fronting Bank prior to the making of such Loan or the issuance of such
Letter of Credit.  The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

 

9.05                        Delegation of Duties.  The Administrative Agent may
perform any and all of its duties and exercise its rights and powers hereunder
or under any other Credit Document by or through any one or more sub-agents
appointed by the Administrative Agent.  The Administrative Agent and any such
sub-agent may perform any and all of its duties and exercise its rights and
powers by or through their respective Related Parties.  The exculpatory
provisions of this Article shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

 

9.06                        Resignation of Administrative Agent.  The
Administrative Agent may at any time give notice of its resignation to the
Lenders, the Fronting Banks, the L/C Administrators

 

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and the Parent Borrower.  Upon receipt of any such notice of resignation, the
Required Lenders shall have the right, in consultation with the Parent Borrower,
to appoint a successor, which shall be a bank with an office in the United
States, or an Affiliate of any such bank with an office in the United States. 
If no such successor shall have been so appointed by the Required Lenders and
shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders, the L/C Administrators and
the Fronting Banks, appoint a successor Administrative Agent meeting the
qualifications set forth above; provided that if the Administrative Agent shall
notify the Parent Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder and under
the other Credit Documents (except that in the case of any collateral security
held by the Administrative Agent on behalf of the Lenders, the L/C
Administrators or the Fronting Banks under any of the Credit Documents, the
retiring Administrative Agent shall continue to hold such collateral security
until such time as a successor Administrative Agent is appointed) and (2) all
payments, communications and determinations provided to be made by, to or
through the Administrative Agent shall instead be made by or to each Lender,
each L/C Administrator and each Fronting Bank directly, until such time as the
Required Lenders appoint a successor Administrative Agent as provided for above
in this Section.  Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring (or
retired) Administrative Agent, and the retiring Administrative Agent shall be
discharged from all of its duties and obligations hereunder or under the other
Credit Documents (if not already discharged therefrom as provided above in this
Section).  The fees payable by the Parent Borrower to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise
agreed between the Parent Borrower and such successor.  After the retiring
Administrative Agent’s resignation hereunder and under the other Credit
Documents, the provisions of this Article and Section 10.04 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.  Any resignation by Bank of America as Administrative
Agent pursuant to this Section shall also constitute its resignation as Fronting
Bank and L/C Administrator.  Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder, (a) such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring
Fronting Bank and L/C Administrator, (b) the retiring Fronting Bank and L/C
Administrator shall be discharged from all of their respective duties and
obligations hereunder or under the other Credit Documents, and (c) the successor
Fronting Bank and L/C Administrator shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession (unless such substitution would require the consent of the
beneficiary and such consent cannot be obtained) or make other arrangements
satisfactory to the retiring Fronting Bank and L/C Administrator to effectively
assume the obligations of the retiring Fronting Bank and L/C Administrator with
respect to such Letters of Credit.

 

9.07                        Non-Reliance on Administrative Agent and Other
Lenders.  Each Lender, each L/C Administrator and each Fronting Bank
acknowledges that it has, independently and

 

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without reliance upon the Administrative Agent, any L/C Administrator, any
Fronting Bank or any other Lender or any of their Related Parties and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement.  Each Lender and each
Fronting Bank also acknowledges that it will, independently and without reliance
upon the Administrative Agent or any other Lender or any of their Related
Parties and based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Credit Document or
any related agreement or any document furnished hereunder or thereunder.

 

9.08                        No Other Duties, Etc.  Anything herein to the
contrary notwithstanding, none of the Bookrunners, Arrangers, Co-Syndication
Agents or Co-Documentation Agents listed on the cover page hereof shall have any
powers, duties or responsibilities under this Agreement or any of the other
Credit Documents, except in its capacity, as applicable, as the Administrative
Agent, a Lender, an L/C Issuer, an L/C Administrator or a Fronting Bank
hereunder.

 

9.09                        Administrative Agent May File Proofs of Claim.  In
case of the pendency of any proceeding under any Debtor Relief Law or any other
judicial proceeding relative to any Borrower, the Administrative Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
such Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

 

(a)                           to file and prove a claim for the whole amount of
the principal and interest owing and unpaid in respect of the Loans, the L/C
Obligations and all other Obligations that are owing and unpaid and to file such
other documents as may be necessary or advisable in order to have the claims of
the Lenders, the L/C Issuers, the Fronting Banks, the L/C Administrators and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders, the L/C Issuers, the
Fronting Banks, the L/C Administrators and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders, the
Fronting Banks, the L/C Issuers, the L/C Administrators and the Administrative
Agent under Sections 2.04(i) and (j), 2.10 and 10.04) allowed in such judicial
proceeding; and

 

(b)                           to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and each Fronting Bank to make such payments to the Administrative
Agent and, in the event that the Administrative Agent shall consent to the
making of such payments directly to the Lenders and the Fronting Banks, to pay
to the Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent and its agents
and counsel, and any other amounts due the Administrative Agent under Sections
2.10 and 10.04.

 

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Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender, any LC
Issuer, any L/C Administrator or any Fronting Bank any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights
of any Lender, any L/C Issuer, any L/C Administrator or any Fronting Bank to
authorize the Administrative Agent to vote in respect of the claim of any
Lender, any L/C Issuer, any L/C Administrator or any Fronting Bank in any such
proceeding.

 

9.10                        Collateral Matters.  The Lenders and the Fronting
Banks irrevocably authorize the Administrative Agent, at its option and in its
discretion:

 

(a)                           (i) upon termination of the Aggregate Commitments
and payment in full of all Obligations (other than contingent indemnification
obligations) and the expiration, cancellation or termination of all Letters of
Credit (other than Letters of Credit as to which other arrangements satisfactory
to the Administrative Agent, the L/C Issuers and the Fronting Banks shall have
been made) to release any Lien on any property granted to or held by the
Administrative Agent under any Credit Document, (ii) upon termination of the
Tranche A Commitments and payment in full of all Tranche A L/C Obligations, to
release the Lien on any Collateral securing the Tranche A L/C Obligations,
(iii) upon termination of the Tranche B Commitments and payment in full of all
Tranche B Obligations, to release any Cash Collateral securing the Tranche B
Obligations, (iv) to release any Lien on Collateral that is sold or to be sold
as part of or in connection with any sale permitted hereunder or under any other
Credit Document, or (v) to release any Lien on Collateral as approved pursuant
to Section 10.01(g); and

 

(b)                           to release any Designated Subsidiary Borrower from
its obligations under this Credit Agreement and any other Credit Document and
release any Collateral provided by such Designated Borrower if such Person
ceases to be a Designated Subsidiary Borrower.

 

Upon request by the Administrative Agent at any time, the applicable Lenders
will confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property pursuant to
this Section 9.10.

 

ARTICLE X.   MISCELLANEOUS

 

10.01                 Amendments, Etc.No amendment or waiver of any provision of
this Agreement or any other Credit Document, and no consent to any departure by
the Parent Borrower or any other Borrower therefrom, shall be effective unless
in writing signed by the Required Lenders and the Parent Borrower or the
applicable Borrower, as the case may be, and acknowledged by the Administrative
Agent, and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no such amendment, waiver or consent shall:

 

(a)                           waive any condition set forth in
Section 4.01(a) without the written consent of each Lender;

 

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(b)                           extend or increase the Commitment of any Lender
(or reinstate any Commitment terminated pursuant to Section 8.02) without the
written consent of such Lender;

 

(c)                            postpone any date fixed by this Agreement or any
other Credit Document for any payment of principal, L/C Borrowing, interest,
fees or other amounts due to the Lenders (or any of them) hereunder or under any
other Credit Document without the written consent of each Lender directly
affected thereby;

 

(d)                           reduce the principal of, or the rate of interest
specified herein on, any Loan or L/C Borrowing, or (subject to clause (iii) of
the second proviso to this Section 10.01) any fees or other amounts payable
hereunder or under any other Credit Document without the written consent of each
Lender directly affected thereby; provided, however, that only the consent of
the Required Lenders shall be necessary to amend the definition of “Default
Rate”  or any provision relating to Defaulting Lenders (including the definition
thereof) or to waive any obligation of any Borrower to pay interest or Letter of
Credit Fees at the Default Rate;

 

(e)                            change Section 8.03 or 2.12 in a manner that
would alter the pro rata sharing of payments required thereby without the
written consent of each Lender;

 

(f)                             change any provision of this Section or the
definition of “Required Lenders” or any other provision hereof specifying the
number or percentage of Lenders required to amend, waive or otherwise modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender directly affected thereby; or

 

(g)                            (i) release all or substantially all of the
security provided by the Designated Subsidiary Borrowers to secure the Tranche A
L/C Obligations, without the written consent of each Tranche A Lender,
(ii) modify the definitions in Section 1.01 of “Advance Rates,” “Borrowing Base”
or “Eligible Securities” without the consent of the Administrative Agent, the
Fronting Banks and any additional Lender required to constitute the Majority
Tranche A Lenders, or (iii) modify, change, waive, discharge or terminate any
provision of any Security Document without the consent of the Majority Tranche A
Lenders;

 

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Fronting Banks and/or the L/C Administrators in
addition to the Lenders required above, affect the rights or duties of the
Fronting Banks and/or the L/C Administrators under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Credit Document; and (iii) no Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto. 
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder
(and any amendment, waiver or consent which by its terms requires the consent of
all Lenders or each affected Lender may be effected with the consent of the
applicable Lenders other than Defaulting Lenders), except that (x) the
Commitment of any Defaulting Lender may not be increased or extended

 

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without the consent of such Lender and (y) any waiver, amendment or modification
requiring the consent of all Lenders or each affected Lender that by its terms
affects any Defaulting Lender more adversely than other affected Lenders shall
require the consent of such Defaulting Lender.

 

10.02                 Notices; Effectiveness; Electronic Communication.

 

(a)                           Notices Generally.  Except in the case of notices
and other communications expressly permitted to be given by telephone (and
except as provided in subsection (b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by facsimile as follows, and all notices and other communications expressly
permitted hereunder to be given by telephone shall be made to the applicable
telephone number, as follows:

 

(i)                                     if to the Borrowers, the Administrative
Agent, the L/C Administrators or the Fronting Banks, to the address, facsimile
number, electronic mail address or telephone number specified for such Person on
Schedule 10.02; and

 

(ii)                                  if to any other Lender, to the address,
facsimile number, electronic mail address or telephone number specified in its
Administrative Questionnaire (including, as appropriate, notices delivered
solely to the Person designated by a Lender on its Administrative Questionnaire
then in effect for the delivery of notices that may contain material non-public
information relating to such Borrower).

 

Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other communications sent by facsimile shall be deemed to
have been given when sent (except that, if not given during normal business
hours for the recipient, shall be deemed to have been given at the opening of
business on the next business day for the recipient).  Notices and other
communications delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

 

(b)                           Electronic Communications.  Notices and other
communications to the Lenders, the L/C Administrators and the Fronting Banks
hereunder may be delivered or furnished by electronic communication (including
e-mail, FpML messaging, and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent, provided that the foregoing
shall not apply to notices to any Lender or the Applicable Issuing Party
pursuant to Article II if such Lender or the Applicable Issuing Party, as
applicable, has notified the Administrative Agent that it is incapable of
receiving notices under such Article by electronic communication.  The
Administrative Agent or each Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures
may be limited to particular notices or communications.

 

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an

 

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acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

 

(c)                            The Platform.  THE PLATFORM IS PROVIDED “AS IS”
AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE
ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE
PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE
BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER
CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER
MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent or any of
its Related Parties (collectively, the “Agent Parties”) have any liability to
any Borrower, any Lender, any L/C Administrator, any Fronting Bank or any other
Person for losses, claims, damages, liabilities or expenses of any kind (whether
in tort, contract or otherwise) arising out of any Borrower’s or the
Administrative Agent’s transmission of Borrower Materials through the Internet,
except to the extent that such losses, claims, damages, liabilities or expenses
are determined by a court of competent jurisdiction by a final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Agent Party; provided, however, that in no event shall any Agent Party have
any liability to any Borrower, any Lender, any L/C Administrator, any Fronting
Bank or any other Person for losses, claims, damages, liabilities or expenses of
any kind (whether in tort, contract or otherwise) arising out of any Borrower’s
or the Administrative Agent’s transmission of Borrower Materials or notices
through the Platform, any other electronic platform or electronic messaging
service, or through the Internet.

 

(d)                           Change of Address, Etc.  Each of the Borrowers,
the Administrative Agent, the L/C Administrators, and the Fronting Banks may
change its address, facsimile or telephone number for notices and other
communications hereunder by notice to the other parties hereto.  Each other
Lender may change its address, facsimile or telephone number for notices and
other communications hereunder by notice to the Parent Borrower, the
Administrative Agent, the L/C Administrators and the Fronting Banks.  In
addition, each Lender agrees to notify the Administrative Agent from time to
time to ensure that the Administrative Agent has on record (i) an effective
address, contact name, telephone number, facsimile number and electronic mail
address to which notices and other communications may be sent and (ii) accurate
wire instructions for such Lender.  Furthermore, each Public Lender agrees to
cause at least one individual at or on behalf of such Public Lender to at all
times have selected the “Private Side Information” or similar designation on the
content declaration screen of the Platform in order to enable such Public

 

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Lender or its delegate, in accordance with such Public Lender’s compliance
procedures and applicable Law, including United States Federal and state
securities Laws, to make reference to Borrower Materials that are not made
available through the “Public Side Information” portion of the Platform and that
may contain material non-public information with respect to the Borrowers or
their securities for purposes of United States Federal or state securities laws.

 

(e)                            Reliance by Administrative Agent, L/C
Administrators, Fronting Banks and Lenders.  The Administrative Agent, the L/C
Administrators, the Fronting Banks and the Lenders shall be entitled to rely and
act upon any notices (including telephonic notices) purportedly given by or on
behalf of a Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof.  Each Borrower shall indemnify
the Administrative Agent, the L/C Administrators, the Fronting Banks, each
Lender and the Related Parties of each of them from all losses, costs, expenses
and liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of such Borrower.  All telephonic notices to
and other telephonic communications with the Administrative Agent may be
recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.

 

10.03                 No Waiver; Cumulative Remedies; Enforcement. No failure by
any Lender, any L/C Administrator, any Fronting Bank or the Administrative Agent
to exercise, and no delay by any such Person in exercising, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.  The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.

 

Notwithstanding anything to the contrary contained herein or in any other Credit
Document, the authority to enforce rights and remedies hereunder and under the
other Credit Documents against the Borrowers or any of them shall be vested
exclusively in, and all actions and proceedings at law in connection with such
enforcement shall be instituted and maintained exclusively by, the
Administrative Agent in accordance with Section 8.02 for the benefit of all the
Lenders, the L/C Administrators and the Fronting Banks; provided, however, that
the foregoing shall not prohibit (a) the Administrative Agent from exercising on
its own behalf the rights and remedies that inure to its benefit (solely in its
capacity as Administrative Agent) hereunder and under the other Credit
Documents, (b) any Applicable Issuing Party from exercising the rights and
remedies that inure to its benefit (solely in its capacity as an Applicable
Issuing Party) hereunder and under the other Credit Documents, (c) any Lender
from exercising setoff rights in accordance with Section 10.08 (subject to the
terms of Section 2.12), or (d) any Lender from filing proofs of claim or
appearing and filing pleadings on its own behalf during the pendency of a
proceeding relative to any Borrower under any Debtor Relief Law; and provided,
further, that if at any time there is no Person acting as Administrative Agent
hereunder and under the other Credit Documents, then (i) the Required Lenders
shall have the rights otherwise ascribed to the Administrative Agent pursuant to
Section 8.02 and (ii) in addition to the matters set forth in clauses (b),
(c) and (d) of the preceding proviso and subject to Section 2.12, any Lender
may, with the consent

 

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of the Required Lenders, enforce any rights and remedies available to it and as
authorized by the Required Lenders.

 

10.04                 Expenses; Indemnity; Damage Waiver.

 

(a)                           Costs and Expenses.  Each Borrower shall pay,
severally in accordance with its respective Facility-wide Liability Percentage
and not jointly, (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates (including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent), in connection with
the syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Credit Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
expenses incurred by the Applicable Issuing Parties in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, any Lender or any Applicable Issuing Party (including the
fees, charges and disbursements of any counsel for the Administrative Agent, any
Lender or the Applicable Issuing Party), in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the other
Credit Documents, including its rights under this Section, or (B) in connection
with the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

 

(b)                           Indemnification by the Borrowers.  Each Borrower
shall indemnify, severally in accordance with its respective Facility-wide
Liability Percentage and not jointly, the Administrative Agent (and any
sub-agent thereof), each Lender, each L/C Administrator and each Fronting Bank,
and each Related Party of any of the foregoing Persons (each such Person being
called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses (including the
reasonable fees, charges and disbursements of any counsel for any Indemnitee),
and shall indemnify and hold harmless each Indemnitee from all fees and time
charges and disbursements for attorneys who may be employees of any Indemnitee,
incurred by any Indemnitee or asserted against any Indemnitee by any Person
(including the Parent Borrower or any other Borrower) other than such Indemnitee
and its Related Parties arising out of, in connection with, or as a result of
(i) the execution or delivery of this Agreement, any other Credit Document or
any agreement or instrument contemplated hereby or thereby, the performance by
the parties hereto of their respective obligations hereunder or thereunder, the
consummation of the transactions contemplated hereby or thereby, or, in the case
of the Administrative Agent (and any sub-agent thereof) and its Related Parties
only, the administration of this Agreement and the other Credit Documents
(including in respect of any matters addressed in Section 3.01), (ii) any Loan
or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the Applicable Issuing Party to honor a demand for
payment under a Letter of Credit if the documents presented in connection with
such demand do not strictly comply with the terms of such Letter of Credit),
(iii) any actual or alleged presence or release of Hazardous Materials on or
from any property owned or operated by the Parent Borrower or any of its
Subsidiaries, or any Environmental Liability related in

 

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any way to the Parent Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by the Parent Borrower or any other Borrower, and
regardless of whether any Indemnitee is a party thereto, IN ALL CASES, WHETHER
OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE,
CONTRIBUTORY OR SOLE NEGLIGENCE OF ANY INDEMNITEE; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses (x) are determined by a court
of competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee or (y) result
from a claim brought by the Parent Borrower or any other Borrower against an
Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or
under any other Credit Document, if the Parent Borrower or such other Borrower
has obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction.  For the avoidance of doubt,
this Section 10.04(b) shall not apply with respect to Taxes other than any Taxes
that represent losses, claims, damages, etc. arising from any non-Tax claim .

 

(c)                            Reimbursement by Lenders.  To the extent that any
Borrower for any reason fails to indefeasibly pay any amount required under
subsection (a) or (b) of this Section to be paid by it to the Administrative
Agent (or any sub-agent thereof), the L/C Administrators, the Fronting Banks or
any Related Party of any of the foregoing, each Lender severally agrees to pay
to the Administrative Agent (or any such sub-agent), the L/C Administrators, the
Fronting Banks or such Related Party, as the case may be, such Lender’s
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent (or any such sub-agent) or an Applicable
Issuing Party in its capacity as such, or against any Related Party of any of
the foregoing acting for the Administrative Agent (or any such sub-agent) or an
Applicable Issuing Party in connection with such capacity.  The obligations of
the Lenders under this subsection (c) are subject to the provisions of
Section 2.11(d).

 

(d)                           Waiver of Consequential Damages, Etc.  To the
fullest extent permitted by applicable Law, each Borrower shall not assert, and
hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Credit Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof.  No Indemnitee referred to in
subsection (b) above shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed to such
unintended recipients by such Indemnitee through telecommunications, electronic
or other information transmission systems in connection with this Agreement or
the other Credit Documents or the transactions contemplated hereby or thereby
other than for direct or actual damages resulting from the gross negligence or
willful misconduct of such Indemnitee as determined by a final and nonappealable
judgment of a court of competent jurisdiction.

 

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(e)                            Payments.  All amounts due under this
Section shall be payable promptly after written demand therefor.

 

(f)                             Survival.  The agreements in this Section shall
survive the resignation of the Administrative Agent, any L/C Administrator or
any Fronting Bank, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.

 

10.05                 Payments Set Aside.  To the extent that any payment by or
on behalf of any Borrower is made to the Administrative Agent, any L/C
Administrator, any Fronting Bank or any Lender, or the Administrative Agent, any
L/C Administrator, any Fronting Bank or any Lender exercises its right of
setoff, and such payment or the proceeds of such setoff or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the
Administrative Agent, such L/C Administrator, such Fronting Bank or such Lender
in its discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such setoff had not occurred, and
(b) each Lender, each L/C Administrator and each Fronting Bank severally agrees
to pay to the Administrative Agent upon demand its applicable share (without
duplication) of any amount so recovered from or repaid by the Administrative
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the applicable Overnight Rate from
time to time in effect, in the applicable currency of such recovery or payment. 
The obligations of the Lenders and the Applicable Issuing Party under clause
(b) of the preceding sentence shall survive the payment in full of the
Obligations and the termination of this Agreement.

 

10.06                 Successors and Assigns.

 

(a)                           Successors and Assigns Generally.  The provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except that
no Borrower may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Administrative Agent and each
Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, or (iii) by
way of pledge or assignment or grant of a security interest, subject to the
restrictions of subsection (f) of this Section (and any other attempted
assignment or transfer by any party hereto shall be null and void).  Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of this
Section and, to the extent expressly contemplated hereby, the Related Parties of
each of the Administrative Agent, the L/C Administrators, the Fronting Banks and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

 

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(b)                           Assignments by Lenders.  Any Lender may at any
time assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans (including for purposes of this subsection (b), direct obligations
under and participations in L/C Obligations) at the time owing to it); provided
that any such assignment shall be subject to the following conditions:

 

(i)                                     Minimum Amounts.

 

(A)                               in the case of an assignment of the entire
remaining amount of the assigning Lender’s Tranche A Commitment or Tranche B
Commitment and the Loans, if any, at the time owing to it under its Tranche A
Commitment or Tranche B Commitment or in the case of an assignment to a Lender
or an Affiliate of a Lender, no minimum amount need be assigned; and

 

(B)                               in any case not described in subsection
(b)(i)(A) of this Section, the aggregate amount of the Commitment (which for
this purpose includes Loans outstanding thereunder) or, if the Commitment is not
then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment, determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than $5,000,000 unless each
of the Administrative Agent and, so long as no Event of Default has occurred and
is continuing, the Parent Borrower otherwise consents (each such consent not to
be unreasonably withheld or delayed).

 

(ii)                                  Proportionate Amounts.  Each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement with respect to
the Loans or the Commitment assigned, except that this clause (ii) shall not
prohibit any Lender from assigning all or a portion of its rights and
obligations among separate Tranches on a non-pro rata basis.

 

(iii)                               Required Consents.  No consent shall be
required for any assignment except to the extent required by subsection
(b)(i)(B) of this Section and, in addition:

 

(A)                               the consent of the Parent Borrower (such
consent not to be unreasonably withheld) shall be required unless (1) an Event
of Default has occurred and is continuing at the time of such assignment or
(2) such assignment is to a Lender or an Affiliate of a Lender; provided that
the Parent Borrower shall be deemed to have consented to any such assignment
unless it shall object thereto by written notice to the Administrative Agent
within five (5) Business Days after having received notice thereof;

 

(B)                               the consent of the Administrative Agent (such
consent not to be unreasonably withheld or delayed) shall be required if such
assignment is to a Person that is not a Lender or an Affiliate of such Lender;
and

 

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(C)                               the consent of each Fronting Banks (such
consent not to be unreasonably withheld or delayed) shall be required for any
assignment and, if such Assignee could not be an L/C Issuer of a Several Letter
of Credit under applicable regulatory requirements, a Fronting Bank must have
agreed (in its sole discretion) to front for such Assignee under Several Letters
of Credit.

 

(iv)                              Assignment and Assumption.  The parties to
each assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee in the
amount of $3,500; provided, however, that the Administrative Agent may, in its
sole discretion, elect to waive such processing and recordation fee in the case
of any assignment.  The assignee, if it is not a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire and, unless otherwise
agreed between the assigning Lender and such Assignee, if any Several Letters of
Credit are outstanding, all such outstanding Several Letters of Credit are
either amended or replaced to give effect to such assignment.

 

(v)                                 No Assignment to Certain Persons.  No such
assignment shall be made (A) to the Parent Borrower or any of the Parent
Borrower’s Affiliates or Subsidiaries, or (B) to any Defaulting Lender or any of
its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would
constitute any of the foregoing Persons described in this clause (B), or (C) to
a natural person.

 

(vi)                              Certain Additional Payments.  In connection
with any assignment of rights and obligations of any Defaulting Lender
hereunder, no such assignment shall be effective unless and until, in addition
to the other conditions thereto set forth herein, the parties to the assignment
shall make such additional payments to the Administrative Agent in an aggregate
amount sufficient, upon distribution thereof as appropriate (which may be
outright payment, purchases by the assignee of participations or
subparticipations, or other compensating actions, including funding, with the
consent of the Parent Borrower and the Administrative Agent, the applicable pro
rata share of Loans previously requested but not funded by such Defaulting
Lender, to each of which the applicable assignee and assignor hereby irrevocably
consent), to (x) pay and satisfy in full all payment liabilities then owed by
such Defaulting Lender to the Administrative Agent or any Lender hereunder (and
interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro
rata share of all Loans, obligations under Several Letters of Credit and
participations in Fronted Letters of Credit in accordance with its Applicable
Percentage.  Notwithstanding the foregoing, in the event that any assignment of
rights and obligations of any Defaulting Lender hereunder shall become effective
under applicable Law without compliance with the provisions of this paragraph,
then the assignee of such interest shall be deemed to be a Defaulting Lender for
all purposes of this Agreement until such compliance occurs.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest

 

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assigned by such Assignment and Assumption, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment.  Upon request, the Parent Borrower and ACUS (at its expense) shall
execute and deliver a Note to the assignee Lender.  Any assignment or transfer
by a Lender of rights or obligations under this Agreement that does not comply
with this subsection shall be treated for purposes of this Agreement as a sale
by such Lender of a participation in such rights and obligations in accordance
with subsection (d) of this Section.

 

(c)                            Register.  The Administrative Agent, acting
solely for this purpose as a non-fiduciary agent of the Borrowers (and such
agency being solely for tax purposes), shall maintain at the Administrative
Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans and L/C Obligations owing to,
each Lender pursuant to the terms hereof from time to time (the “Register”). 
The entries in the Register shall be conclusive absent manifest error, and the
Borrowers, the Administrative Agent and the Lenders shall treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. In addition, the Administrative Agent shall maintain on the Register
information regarding the designation, and revocation of designation, of any
Lender as a Defaulting Lender.  The Register shall be available for inspection
by the Borrowers and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.

 

(d)                           Participations.  Any Lender may at any time,
without the consent of, or notice to, the Parent Borrower or the Administrative
Agent, sell participations to any Person (other than a natural person, a
Defaulting Lender or the Parent Borrower or any of the Parent Borrower’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans (including such Lender’s direct
obligations in respect of and participations in L/C Obligations) owing to it);
provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrowers, the
Administrative Agent, the Lenders, the L/C Administrators and the Fronting Banks
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement.

 

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to

 

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Section 10.01 that affects such Participant.  Each Borrower agrees that each
Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section (it being understood that
the documentation required under Section 3.01(e) shall be delivered to the
Lender who sells the participation) to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to paragraph (b) of this
Section 10.06; provided that such Participant agrees to be subject to the
provisions of Sections 3.06 and 10.13 as if it were an assignee under paragraph
(b) of this Section 10.06.  Each Lender that sells a participation agrees, at
the Parent Borrower’s request and expense, to use reasonable efforts to
cooperate with the Parent Borrower to effectuate the provisions of Section 3.06
with respect to any Participant.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.08 as though it
were a Lender; provided that such Participant agrees to be subject to
Section 2.12 as though it were a Lender.  Each Lender that sells a participation
shall, acting solely for this purpose as an agent of the Borrower, maintain a
register on which it enters the name and address of each Participant and the
principal amounts (and stated interest) of each Participant’s interest in the
Loans or other obligations under the Credit Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any
Participant or any information relating to a Participant’s interest in any
commitments, loans, letters of credit or its other obligations under any Credit
Document) to any Person except to the extent that such disclosure is necessary
to establish that such commitment, loan, letter of credit or other obligation is
in registered form under Section 5f.103-1(c) of the United States Treasury
Regulations.  The entries in the Participant Register shall be conclusive absent
manifest error, and such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary.  For the avoidance
of doubt, the Administrative Agent (in its capacity as Administrative Agent)
shall have no responsibility for maintaining a Participant Register.

 

(e)                            Limitations upon Participant Rights.  A
Participant shall not be entitled to receive any greater payment under
Section 3.01 or 3.04 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Parent Borrower’s
prior written consent.  A Participant that would be a Foreign Lender if it were
a Lender shall not be entitled to the benefits of Section 3.01 unless the Parent
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Parent Borrower, to comply with
Section 3.01(e) as though it were a Lender.

 

(f)                             Certain Pledges.  Any Lender may at any time
pledge or assign, or grant a security interest in, all or any portion of its
rights under this Agreement (including under its Notes, if any) to secure
obligations of such Lender, including any pledge or assignment or grant of a
security interest to secure obligations to a Federal Reserve Bank; provided that
no such pledge or assignment, or grant of a security interest, shall release
such Lender from any of its obligations hereunder or substitute any such pledgee
or assignee or grantee for such Lender as a party hereto.

 

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(g)                            Resignation as Fronting Bank and L/C
Administrator after Assignment.  Notwithstanding anything to the contrary
contained herein, if at any time Bank of America assigns all of its Commitment
and Loans pursuant to subsection (b) above, Bank of America may, upon 30 days’
notice to the Parent Borrower and the Lenders, resign as Fronting Bank and L/C
Administrator.  In the event of any such resignation as Fronting Bank and L/C
Administrator, the Parent Borrower shall be entitled to appoint from among the
Lenders a successor Fronting Bank and L/C Administrator hereunder; provided,
however, that no failure by the Parent Borrower to appoint any such successor
shall affect the resignation of Bank of America as Fronting Bank and L/C
Administrator.  If Bank of America resigns as Fronting Bank and L/C
Administrator, it shall retain all the rights, powers, privileges and duties of
a Fronting Bank and L/C Administrator hereunder with respect to all Letters of
Credit outstanding as of the effective date of its resignation as Fronting Bank
and L/C Administrator and all L/C Obligations with respect thereto (including
the right to require the Lenders to make Base Rate Loans or fund risk
participations in Unreimbursed Amounts pursuant to Section 2.03(c)).  Upon the
appointment of a successor Fronting Bank and L/C Administrator (a) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring Fronting Bank and L/C Administrator, and
(b) the successor Fronting Bank and L/C Administrator shall issue letters of
credit in substitution for the Letters of Credit, if any, outstanding at the
time of such succession (unless such substitution would require the consent of
the beneficiary and such consent cannot be obtained) or make other arrangements
satisfactory to Bank of America to effectively assume the obligations of Bank of
America with respect to such Letters of Credit.

 

10.07                 Treatment of Certain Information; Confidentiality.  Each
of the Administrative Agent, the Lenders, the L/C Administrators and the
Fronting Banks agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its Affiliates
and to its and its Affiliates’ respective partners, directors, officers,
employees, agents, trustees, advisors and representatives (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential and the Administrative Agent, the Lenders, the L/C Administrators
and the Fronting Banks shall be responsible for any breach of this Section 10.07
by such Persons), (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory
authority, such as the NAIC), (c) to the extent required by applicable Laws or
regulations or by any subpoena or similar legal process, (d) to any other party
hereto, (e) in connection with the exercise of any remedies hereunder or under
any other Credit Document or any action or proceeding relating to this Agreement
or any other Credit Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or any Eligible Assignee invited to be a Lender pursuant to
Section 2.14(c) or (ii) any actual or prospective counterparty (or its advisors)
to any swap or derivative transaction relating to any Borrower and its
obligations, (g) with the consent of such Borrower or (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach of
this Section or (y) becomes available to the Administrative Agent, any Lender,
any L/C Administrator, any Fronting Bank or any of their respective Affiliates
on a nonconfidential basis from a source other than a Borrower.  For purposes of
this Section, “Information” means all information

 

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received from the Parent Borrower or any Subsidiary relating to the Parent
Borrower or any Subsidiary or any of their respective businesses, other than any
such information that is available to the Administrative Agent, any Lender, any
L/C Administrator or any Fronting Bank on a nonconfidential basis prior to
disclosure by the Parent Borrower or any Subsidiary, provided that, in the case
of information received from the Parent Borrower or any Subsidiary after the
date hereof, such information is clearly identified at the time of delivery as
confidential.  Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.

 

Each of the Administrative Agent, the Lenders, the L/C Administrators and the
Fronting Banks acknowledges that (a) the Information may include material
non-public information concerning the Parent Borrower or a Subsidiary, as the
case may be, (b) it has developed compliance procedures regarding the use of
material non-public information and (c) it will handle such material non-public
information in accordance with applicable Law, including United States Federal
and state securities Laws.

 

10.08                 Right of Setoff.  If an Event of Default shall have
occurred and be continuing, each Lender, each L/C Administrator, each Fronting
Bank and each of their respective Affiliates is hereby authorized at any time
and from time to time, to the fullest extent permitted by applicable Law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender, such L/C
Administrator, such Fronting Bank or any such Affiliate to or for the credit or
the account of any Borrower against any and all of the obligations of such
Borrower now or hereafter existing under this Agreement or any other Credit
Document to such Lender, such L/C Administrator or such Fronting Bank,
irrespective of whether or not such Lender, such L/C Administrator or such
Fronting Bank shall have made any demand under this Agreement or any other
Credit Document and although such obligations of such Borrower may be contingent
or unmatured or are owed to a branch or office of such Lender, such L/C
Administrator or such Fronting Bank different from the branch or office holding
such deposit or obligated on such indebtedness; provided, that in the event that
any Defaulting Lender shall exercise any such right of setoff, (x) all amounts
so set off shall be paid over immediately to the Administrative Agent for
further application in accordance with the provisions of Section 2.16 and,
pending such payment, shall be segregated by such Defaulting Lender from its
other funds and deemed held in trust for the benefit of the Administrative Agent
and the Lenders, and (y) such Defaulting Lender shall provide promptly to the
Administrative Agent a statement describing in reasonable detail the Obligations
owing to such Defaulting Lender as to which it exercised such right of setoff.
 The rights of each Lender, each L/C Administrator, each Fronting Bank and their
respective Affiliates under this Section are in addition to other rights and
remedies (including other rights of setoff) that such Lender, such L/C
Administrator, such Fronting Bank or their respective Affiliates may have.  Each
Lender, each L/C Administrator and each Fronting Bank each agrees to notify the
applicable Borrower and the Administrative Agent promptly after any such setoff
and application, provided that the failure to give such notice shall not affect
the validity of such setoff and application.

 

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10.09                 Interest Rate Limitation.  Notwithstanding anything to the
contrary contained in any Credit Document, the interest paid or agreed to be
paid under the Credit Documents shall not exceed the maximum rate of
non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the
Administrative Agent or any Lender shall receive interest in an amount that
exceeds the Maximum Rate, the excess interest shall be applied to the principal
of the Loans or, if it exceeds such unpaid principal, refunded to the applicable
Borrower.  In determining whether the interest contracted for, charged, or
received by the Administrative Agent or a Lender exceeds the Maximum Rate, such
Person may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and
(c) amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the Obligations
hereunder.

 

10.10                 Counterparts; Integration; Effectiveness.  This Agreement
may be executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract.  This Agreement and the other
Credit Documents constitute the entire contract among the parties relating to
the subject matter hereof and thereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof and thereof.  Except as provided in Section 4.01, this Agreement shall
become effective when it shall have been executed by the Administrative Agent
and when the Administrative Agent shall have received counterparts hereof that,
when taken together, bear the signatures of each of the other parties hereto. 
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy or other electronic imaging means shall be effective as delivery of a
manually executed counterpart of this Agreement.

 

10.11                 Survival of Representations and Warranties.  All
representations and warranties made hereunder and in any other Credit Document
or other document delivered pursuant hereto or thereto or in connection herewith
or therewith shall survive the execution and delivery hereof and thereof.  Such
representations and warranties have been or will be relied upon by the
Administrative Agent, each L/C Administrator, each Fronting Bank and each
Lender, regardless of any investigation made by the Administrative Agent, any
L/C Administrator, any Fronting Bank or any Lender or on their behalf and
notwithstanding that the Administrative Agent or any Lender may have had notice
or knowledge of any Default at the time of any Credit Extension, and shall
continue in full force and effect as long as any Loan or any other Obligation
hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall
remain outstanding.

 

10.12                 Severability.  If any provision of this Agreement or the
other Credit Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Credit Documents shall not be affected or impaired
thereby and (b) the parties shall endeavor in good faith negotiations to replace
the illegal, invalid or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the illegal,
invalid or unenforceable provisions.  The invalidity of a provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.  Without limiting the foregoing provisions
of this Section

 

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10.12, if and to the extent that the enforceability of any provisions in this
Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws,
as determined in good faith by the Administrative Agent, the L/C Administrators,
or the Fronting Banks, as applicable, then such provisions shall be deemed to be
in effect only to the extent not so limited.

 

10.13                 Replacement of Lenders.  If any Lender requests
compensation under Section 3.04, or if a Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.01, or if any Lender is a Defaulting Lender or
a Non-Consenting Lender, then the Parent Borrower may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in, and consents required by, Section 10.06), all
of its interests, rights and obligations under this Agreement and the other
Credit Documents to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided
that:

 

(a)                           the Parent Borrower shall have paid to the
Administrative Agent the assignment fee specified in Section 10.06(b);

 

(b)                            such Lender shall have received payment of an
amount equal to 100% of the outstanding principal of its Loans and L/C Advances,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder and under the other Credit Documents (including any amounts under
Sections 3.01, 3.04 and 3.05) from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrowers (in the
case of all other amounts);

 

(c)                            in the case of any such assignment resulting from
a claim for compensation under Section 3.04 or payments required to be made
pursuant to Section 3.01, such assignment will result in a reduction in such
compensation or payments thereafter;

 

(d)                           such assignment does not conflict with applicable
Laws; and

 

(e)                            in the case of an assignment resulting from a
Lender becoming a Non-Consenting Lender, the applicable assignee shall have
consented to the applicable amendment, waiver or consent.

 

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Parent Borrower to require such assignment and
delegation cease to apply.

 

10.14                 Governing Law; Jurisdiction; Etc.

 

(a)                           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

(b)                           SUBMISSION TO JURISDICTION.  EACH PARTY HERETO
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE

 

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EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK CITY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF
NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, OR
FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. 
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS
AGREEMENT OR IN ANY OTHER CREDIT DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, ANY LENDER OR ANY FRONTING BANK MAY OTHERWISE HAVE TO
BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT AGAINST THE PARENT BORROWER OR ANY OTHER BORROWER OR ITS PROPERTIES IN
THE COURTS OF ANY JURISDICTION.

 

(c)                                  WAIVER OF VENUE.  EACH PARTY HERETO
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER CREDIT DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS
SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)                                 SERVICE OF PROCESS.  ON OR PRIOR TO THE
CLOSING DATE, EACH FOREIGN OBLIGOR SHALL APPOINT THE SERVICE OF PROCESS AGENT,
WITH AN OFFICE ON THE DATE HEREOF AT 111 EIGHTH AVENUE, NEW YORK, NEW YORK
10011, UNITED STATES, AS ITS AGENT TO RECEIVE ON ITS BEHALF AND ITS PROPERTY
SERVICE OF THE SUMMONS AND COMPLAINTS AND ANY OTHER PROCESS WHICH MAY BE SERVED
IN ANY SUCH ACTION OR PROCEEDING, PROVIDED THAT A COPY OF SUCH PROCESS IS ALSO
MAILED IN THE MANNER PROVIDED IN SECTION 10.02.  SUCH SERVICE MAY BE MADE BY
MAILING OR DELIVERING A COPY OF SUCH PROCESS TO THE PARENT BORROWER IN CARE OF
THE SERVICE OF PROCESS AGENT AT THE SERVICE OF PROCESS AGENT’S ABOVE ADDRESS,
AND THE PARENT BORROWER AND EACH OTHER FOREIGN OBLIGOR HEREBY IRREVOCABLY
AUTHORIZES AND DIRECTS THE SERVICE OF PROCESS AGENT TO ACCEPT SUCH SERVICE ON
ITS BEHALF.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE
MANNER PROVIDED FOR NOTICES IN SECTION 10.02.  NOTHING IN THIS AGREEMENT WILL
AFFECT THE RIGHT OF ANY

 

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PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

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

 

10.16                 No Advisory or Fiduciary Responsibility.  In connection
with all aspects of each transaction contemplated hereby (including in
connection with any amendment, waiver or other modification hereof or of any
other Credit Document), the Parent Borrower and each other Borrower acknowledges
and agrees that: (i) (A) the arranging and other services regarding this
Agreement provided by the Administrative Agent, the Lenders and the Arrangers
are arm’s-length commercial transactions between the Parent Borrower, each other
Borrower and its respective Affiliates, on the one hand, and the Administrative
Agent, the Lenders and the Arrangers on the other hand, (B) each of the Parent
Borrower and the other Borrowers has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate, and
(C) each of the Parent Borrower and each other Borrower is capable of
evaluating, and understands and accepts, the terms, risks and conditions of the
transactions contemplated hereby and by the other Credit Documents; (ii) (A) the
Administrative Agent, the Lenders and the Arrangers, have not been, are not, and
will not be acting as an advisor, agent or fiduciary for the Parent Borrower,
any other Borrower or any of its respective Affiliates, or any other Person and
(B) neither the Administrative Agent, nor any Lender nor any Arranger has any
obligation to the Parent Borrower, any other Borrower or any of their respective
Affiliates with respect to the transactions contemplated hereby except those
obligations expressly set forth herein and in the other Credit Documents; and
(iii) the Administrative Agent, the Lenders and the Arrangers and their
respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Parent Borrower, the other
Borrowers and their respective Affiliates, and neither the Administrative Agent
nor any Lender nor any Arranger has any obligation to disclose any of such
interests to the Parent Borrower, any other Borrower or any of their respective
Affiliates.  To the fullest extent permitted by law, each of the Parent Borrower
and the other Borrowers hereby waives and releases any claims that it may have
against the Administrative Agent, the Lenders and the Arrangers with respect to
any breach or alleged breach of agency or fiduciary duty in connection with any
aspect of any transaction contemplated hereby.

 

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10.17                 Electronic Execution of Assignments and Certain Other
Documents.  The words “execute,” “execution,” “signed,” “signature,” and words
of like import in or related to any document to be signed in connection with
this Agreement and the transactions contemplated hereby (including without
limitation Assignment and Assumptions, amendments or other modifications, Loan
Notices, waivers and consents) shall be deemed to include electronic signatures,
the electronic matching of assignment terms and contract formations on
electronic platforms approved by the Administrative Agent, or the keeping of
records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable Law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act; provided that notwithstanding anything contained herein to the
contrary the Administrative Agent is under no obligation to agree to accept
electronic signatures in any form or in any format unless expressly agreed to by
the Administrative Agent pursuant to procedures approved by it.

 

10.18                 USA PATRIOT Act.  Each Lender that is subject to the Act
(as hereinafter defined), and the Administrative Agent (for itself and not on
behalf of any Lender), hereby notifies each Borrower that pursuant to the
requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Act”), it is required to obtain, verify and record
information that identifies each Borrower, which information includes the name
and address of such Borrower and other information that will allow such Lender
or the Administrative Agent, as applicable, to identify such Borrower in
accordance with the Act.  Each Borrower shall, promptly following a request by
the Administrative Agent or any Lender, provide all documentation and other
information that the Administrative Agent or such Lender requests in order to
comply with its ongoing obligations under applicable “know your customer” and
anti-money laundering rules and regulations, including the Act.

 

10.19                 Time of the Essence.  Time is of the essence of the Credit
Documents.

 

10.20                 Judgment Currency.  If, for the purposes of obtaining
judgment in any court, it is necessary to convert a sum due hereunder or under
any other Credit Document in one currency into another currency, the rate of
exchange used shall be that at which in accordance with normal banking
procedures the Administrative Agent could purchase the first currency with such
other currency on the Business Day preceding that on which final judgment is
given.  The obligation of each Borrower in respect of any such sum due from it
to the Administrative Agent or any Lender hereunder or under the other Credit
Documents shall, notwithstanding any judgment in a currency (the “Judgment
Currency”) other than that in which such sum is denominated in accordance with
the applicable provisions of this Agreement (the “Agreement Currency”), be
discharged only to the extent that on the Business Day following receipt by the
Administrative Agent or such Lender, as the case may be, of any sum adjudged to
be so due in the Judgment Currency, the Administrative Agent or such Lender, as
the case may be, may in accordance with normal banking procedures purchase the
Agreement Currency with the Judgment Currency.  If the amount of the Agreement
Currency so purchased is less than the sum originally due to the Administrative
Agent or any Lender from any Borrower in the Agreement Currency, such Borrower

 

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agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Administrative Agent or such Lender, as the case may be, against
such loss.  If the amount of the Agreement Currency so purchased is greater than
the sum originally due to the Administrative Agent or any Lender in such
currency, the Administrative Agent or such Lender, as the case may be, agrees to
return the amount of any excess to such Borrower (or to any other Person who may
be entitled thereto under applicable Law).

 

10.21                 Amendment and Restatement.  This Agreement amends,
restates and replaces in its entirety the Existing Credit Agreement.  All
rights, benefits, indebtedness, interest, liabilities and obligations of the
parties to the Existing Credit Agreement are hereby amended, restated, replaced
and superseded in their entirety according to the terms and provisions set forth
herein (except that any provision of the Existing Credit Agreement that by its
terms survives termination of the Existing Credit Agreement shall continue in
full force and effect for the benefit of the applicable parties to the Existing
Credit Agreement).  All indebtedness, liabilities and obligations under the
Existing Credit Agreement, including all promissory notes executed by the
Borrowers pursuant thereto, are hereby renewed by this Agreement and the other
documents executed by the Borrowers pursuant to this Agreement and shall, from
and after the Closing Date, be governed by this Agreement and such other
documents.

 

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

 

 

ARCH CAPITAL GROUP LTD.

 

 

 

 

 

By:

/s/ Marc Grandisson

 

 

Name: Marc Grandisson

 

 

Title: Chairman and CEO, Arch Worldwide

 

Reinsurance and Mortgage Groups

 

Arch Capital Credit Agreement
Signature Page

 

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ARCH REINSURANCE LTD.

 

 

 

 

 

By:

/s/ Michelle Seymour-Smith

 

 

Name: Michelle Seymour-Smith

 

 

Title: Chief Financial Officer

 

Arch Capital Credit Agreement
Signature Page

 

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ARCH REINSURANCE COMPANY

 

 

 

 

 

By:

/s/ Timothy J. Olson

 

 

Name: Timothy J. Olson

 

 

Title: President & CEO

 

Arch Capital Credit Agreement
Signature Page

 

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ARCH INSURANCE COMPANY

 

 

 

 

 

By:

/s/ Thomas J. Ahern

 

 

Name: Thomas J. Ahern

 

 

Title: Senior Vice President & CFO

 

Arch Capital Credit Agreement
Signature Page

 

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ARCH SPECIALTY INSURANCE COMPANY

 

 

 

 

 

By:

/s/ Thomas J. Ahern

 

 

Name: Thomas J. Ahern

 

 

Title: Senior Vice President & CFO

 

Arch Capital Credit Agreement
Signature Page

 

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ARCH INSURANCE COMPANY (EUROPE) LIMITED

 

 

 

 

 

By:

/s/ James Weatherstone

 

 

Name: James Weatherstone

 

 

Title: President & CEO

 

Arch Capital Credit Agreement
Signature Page

 

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ARCH REINSURANCE EUROPE UNDERWRITING LIMITED

 

 

 

 

 

By:

/s/ Maamoun Rajeh

 

 

Name: Maamoun Rajeh

 

 

Title: President & CEO

 

Arch Capital Credit Agreement
Signature Page

 

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ARCH CAPITAL GROUP (U.S.) INC.

 

 

 

 

 

By:

/s/ Thomas J. Ahern

 

Name: Thomas J. Ahern

 

Title: Senior Vice President & CFO

 

Arch Capital Credit Agreement
Signature Page

 

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BANK OF AMERICA, N.A., as Administrative Agent, L/C Administrator, a Fronting
Bank and a Lender

 

 

 

By:

/s/ Tiffany Burgess

 

 

Name:  Tiffany Burgess

 

 

Title: Vice President

 

Arch Capital Credit Agreement
Signature Page

 

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JPMORGAN CHASE BANK, N.A.

 

 

 

 

 

By:

/s/ Richard Barracato

 

 

Name:  Richard Barracato

 

 

Title: VP

 

Arch Capital Credit Agreement
Signature Page

 

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WELLS FARGO BANK, NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Kimberly Shaffer

 

 

Name:  Kimberly Shaffer

 

 

Title: Managing Director

 

Arch Capital Credit Agreement
Signature Page

 

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LLOYDS BANK PLC

 

 

 

 

 

By:

/s/ Stephen Giacolone

 

 

Name:  Stephen Giacolone G011

 

 

Title: Assistant Vice President

 

 

 

 

 

 

 

By:

/s/ Julia R. Franklin

 

 

Name:  Julia R. Franklin F014

 

 

Title: Vice President

 

Arch Capital Credit Agreement
Signature Page

 

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U.S. BANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Evan Glass

 

 

Name:  Evan Glass

 

 

Title: Senior Vice President

 

Arch Capital Credit Agreement
Signature Page

 

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BARCLAYS BANK PLC

 

 

 

By:

/s/ Dan Broome

 

 

Name:  Dan Broome

 

 

Title: Director

 

Arch Capital Credit Agreement
Signature Page

 

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BANK OF MONTREAL

 

 

 

 

 

 

 

By:

/s/ Joan Spiotto

 

 

Name:  Joan Spiotto

 

 

Title: Vice President

 

 

 

 

 

 

 

By:

/s/ Athony Ebdon

 

 

Name:  Anthony Ebdon

 

 

Title: Managing Director

 

 

 

 

 

 

 

By:

/s/ Andy McClinton

 

 

Name:  Andy McClinton

 

 

Title: Managing Director

 

Arch Capital Credit Agreement
Signature Page

 

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ROYAL BANK OF CANADA

 

 

 

 

 

 

 

By:

/s/ Patrizia Lloyd

 

 

Name:  Patrizia Lloyd

 

 

Title: Authorized Signatory

 

Arch Capital Credit Agreement
Signature Page

 

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THE BANK OF NEW YORK MELLON

 

 

 

 

 

 

 

By:

/s/ Michael Pensari

 

 

Name:  Michael Pensari

 

 

Title: Managing Director

 

Arch Capital Credit Agreement
Signature Page

 

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