EXHIBIT 10.1
EXECUTION VERSION
     
 
Published CUSIP Number: 89177QAA0
CREDIT AGREEMENT
Dated as of May 14, 2010
among

TOWER GROUP, INC.,
as the Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent,
Fronting Bank and L/C Administrator,
JPMORGAN CHASE BANK, N.A. and KEYBANK NATIONAL ASSOCIATION,
as Co-Syndication Agents,
PNC BANK, NATIONAL ASSOCIATION,
as Documentation Agent
and
The Other Lenders Party Hereto
J.P. MORGAN SECURITIES INC.
and
BANC OF AMERICA SECURITIES LLC,
as
Joint Lead Arrangers and Joint Book Managers
     
 

 

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TABLE OF CONTENTS

          Section   Page  
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS
    1  
 
       
1.01 Defined Terms
    1  
1.02 Other Interpretive Provisions
    20  
1.03 Accounting Terms
    21  
1.04 Rounding
    21  
1.05 Times of Day
    21  
1.06 Letter of Credit Amounts
    21  
 
       
ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS
    21  
 
       
2.01 Loans
    22  
2.02 Borrowings, Conversions and Continuations of Loans
    22  
2.03 Letters of Credit
    23  
2.04 Prepayments
    33  
2.05 Termination or Reduction of Commitments
    33  
2.06 Repayment of Loans
    34  
2.07 Interest
    34  
2.08 Fees
    35  
2.09 Computation of Interest and Fees
    35  
2.10 Evidence of Debt
    35  
2.11 Payments Generally; Administrative Agent’s Clawback
    36  
2.12 Sharing of Payments by Lenders
    38  
2.13 Increase in Commitments
    38  
2.14 Cash Collateral
    39  
2.15 Defaulting Lenders
    41  
 
       
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY
    43  
 
       
3.01 Taxes
    43  
3.02 Illegality
    46  
3.03 Inability to Determine Rates
    47  
3.04 Increased Costs; Reserves on Eurodollar Rate Loans
    47  
3.05 Compensation for Losses
    49  
3.06 Mitigation Obligations; Replacement of Lenders
    49  
3.07 Survival
    50  
 
       
ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
    50  
 
       
4.01 Conditions of Initial Credit Extension
    50  
4.02 Conditions to all Credit Extensions
    52  
 
       
ARTICLE V. REPRESENTATIONS AND WARRANTIES
    53  
 
       
5.01 Existence, Qualification and Power
    53  
5.02 Authorization; No Contravention
    53  
5.03 Governmental Authorization; Other Consents
    53  

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          Section   Page  
5.04 Binding Effect
    53  
5.05 Financial Statements; No Material Adverse Effect
    53  
5.06 Litigation
    54  
5.07 No Default
    54  
5.08 Ownership of Property; Liens
    54  
5.09 Insurance
    54  
5.10 Taxes
    55  
5.11 ERISA Compliance
    55  
5.12 Subsidiaries; Equity Interests
    56  
5.13 Margin Regulations; Investment Company Act
    56  
5.14 Disclosure
    56  
5.15 Compliance with Laws
    56  
5.16 Taxpayer Identification Number
    57  
5.17 Solvency
    57  
 
       
ARTICLE VI. AFFIRMATIVE COVENANTS
    57  
 
       
6.01 Financial Statements
    57  
6.02 Certificates; Other Information
    58  
6.03 Notices
    60  
6.04 Payment of Obligations
    60  
6.05 Preservation of Existence, Etc
    61  
6.06 Maintenance of Properties
    61  
6.07 Maintenance of Insurance
    61  
6.08 Compliance with Laws
    61  
6.09 Books and Records
    61  
6.10 Inspection Rights
    61  
6.11 Use of Proceeds
    62  
 
       
ARTICLE VII. NEGATIVE COVENANTS
    62  
 
       
7.01 Liens
    62  
7.02 Indebtedness
    63  
7.03 Fundamental Changes
    64  
7.04 Dispositions
    64  
7.05 Restricted Payments
    65  
7.06 Change in Nature of Business; Hedging
    65  
7.07 Transactions with Affiliates
    65  
7.08 Burdensome Agreements
    66  
7.09 Use of Proceeds
    66  
7.10 Financial Covenants
    66  
7.11 Investments in Reciprocal Insurers
    67  
 
       
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES
    67  
 
       
8.01 Events of Default
    67  
8.02 Remedies Upon Event of Default
    69  
8.03 Application of Funds
    70  
 
       
ARTICLE IX. ADMINISTRATIVE AGENT
    70  

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          Section   Page  
9.01 Appointment and Authority
    70  
9.02 Rights as a Lender
    71  
9.03 Exculpatory Provisions
    71  
9.04 Reliance by Administrative Agent
    72  
9.05 Delegation of Duties
    72  
9.06 Resignation of Administrative Agent
    72  
9.07 Non-Reliance on Administrative Agent and Other Lenders
    73  
9.08 No Other Duties, Etc
    73  
9.09 Administrative Agent May File Proofs of Claim
    74  
 
       
ARTICLE X. MISCELLANEOUS
    74  
 
       
10.01 Amendments, Etc
    74  
10.02 Notices; Effectiveness; Electronic Communication
    76  
10.03 No Waiver; Cumulative Remedies; Enforcement
    78  
10.04 Expenses; Indemnity; Damage Waiver
    78  
10.05 Payments Set Aside
    80  
10.06 Successors and Assigns
    81  
10.07 Treatment of Certain Information; Confidentiality
    85  
10.08 Right of Setoff
    86  
10.09 Interest Rate Limitation
    86  
10.10 Counterparts; Integration; Effectiveness
    87  
10.11 Survival of Representations and Warranties
    87  
10.12 Severability
    87  
10.13 Replacement of Lenders
    87  
10.14 Governing Law; Jurisdiction; Etc
    88  
10.15 Waiver of Jury Trial
    89  
10.16 No Advisory or Fiduciary Responsibility
    89  
10.17 Electronic Execution of Assignments and Certain Other Documents
    90  
10.18 USA PATRIOT Act
    90  
10.19 ENTIRE AGREEMENT
    90  

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      SCHEDULES    
2.01
  Commitments and Applicable Percentages
5.05
  Statutory Financial Statements
5.06
  Litigation
5.10
  Tax Sharing Agreements
5.12
  Subsidiaries; Other Equity Investments
7.01
  Existing Liens
7.02
  Existing Indebtedness
7.10
  Material Subsidiary Minimum Statutory Surplus
10.02
  Administrative Agent’s Office; Certain Addresses for Notices

EXHIBITS

          Form of  
A
  Loan Notice
B
  Note
C
  Compliance Certificate
D-1
  Assignment and Assumption
D-2
  Administrative Questionnaire
E
  Opinion Matters
F
  Several Letter of Credit

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CREDIT AGREEMENT
     This CREDIT AGREEMENT (“Agreement”) is entered into as of May 14, 2010,
among TOWER GROUP, INC., a Delaware corporation (the “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, Fronting Bank and
L/C Administrator.
     The Borrower has requested that the Lenders provide a revolving credit and
letter of credit facility, and the Lenders are willing to do so on the terms and
conditions set forth herein.
     In consideration of the mutual covenants and agreements herein contained,
the parties hereto covenant and agree 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:
     “Acquisition” means any transaction or series of related transactions,
consummated on or after the date hereof, by which the Borrower directly, or
indirectly through one or more Subsidiaries, (i) acquires any going business,
division thereof or line of business, or all or substantially all of the assets,
of any Person, whether through purchase of assets, merger or otherwise, or
(ii) acquires securities or other ownership interests of any Person that,
following such Acquisition, will be deemed a Subsidiary of the Borrower.
     “Administrative Agent” means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
     “Administrative Agent’s Office” means the Administrative Agent’s address
and, as appropriate, account as set forth on Schedule 10.02, or such other
address or account as the Administrative Agent may from time to time notify to
the 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.
     “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 Commitments of all the Lenders.
     “Agreement” means this Credit Agreement.
     “A.M. Best Company” means A.M. Best Company or any successor thereto.
     “Annual Statement” means the annual financial statement of an Insurance
Subsidiary as required to be filed with the Applicable Insurance Regulatory
Authority of such Insurance

 

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Subsidiary’s domicile, together with all exhibits or schedules filed therewith,
prepared in conformity with SAP.
     “Applicable Insurance Regulatory Authority” means, when used with respect
to the Borrower or any of its Subsidiaries, in each case to the extent
authorized or licensed or admitted to carry on or transact in one or more
aspects of the business of selling, issuing or underwriting insurance or
reinsurance or other businesses reasonably related thereto, (x) the insurance
department or similar administrative authority or agency located in each state
or jurisdiction (foreign or domestic) in which the Borrower or such Subsidiary
is domiciled or (y) to the extent asserting regulatory jurisdiction over the
Borrower or such Subsidiary, the insurance department, authority or agency in
each state or jurisdiction (foreign or domestic) in which the Borrower or such
Subsidiary is licensed, and shall include any Federal or national insurance
regulatory department, authority or agency that may be created and that asserts
insurance regulatory jurisdiction over the Borrower or such Subsidiary.
     “Applicable Issuing Party” means (a) in the case of Fronted Letters of
Credit, the Fronting Bank and (b) in the case of Several Letters of Credit, the
L/C Administrator.
     “Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender’s Commitment at such time, subject to adjustment as
provided in Section 2.15. If the commitment of each Lender to make Loans and
issue Several Letters of Credit and the obligation of the Fronting Bank 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 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.
     “Applicable Rate” means, from time to time, the following percentages per
annum, based upon the Debt Rating as set forth below:

                          Debt to       Applicable Margin         Pricing  
Capitalization   Commitment   for Eurodollar   Letter of   Applicable Margin
Level   Ratio   Fee   Loans   Credit Fees   for Base Rate Loans 1   ≥ 25%  
0.625%   3.25%   3.25%   2.25% 2   ≥ 15% but < 25%   0.500%   2.75%   2.75%  
1.75% 3   < 15%   0.400%   2.50%   2.50%   1.50%

     Initially, the Applicable Rate shall be Pricing Level 2. Thereafter, each
change in the Applicable Rate resulting from a change in the Leverage Ratio
shall become effective as of the first Business Day immediately following the
date a Compliance Certificate is delivered pursuant to Section 6.02(a)
(commencing with the Compliance Certificate delivered with respect to the fiscal
quarter ending June 30, 2010) provided, however, that if a Compliance
Certificate is not

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delivered when due in accordance with such Section, then Pricing Level 1 shall
apply as of the first Business Day after the date on which such Compliance
Certificate was required to have been delivered and remain in effect until a
Compliance Certificate is delivered reflecting a different applicable Pricing
Level.
     “Approved Fund” means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
     “Arrangers” means J.P. Morgan Securities Inc. and Banc of America
Securities LLC in their capacities as joint lead arrangers and joint book
managers.
     “Assignee Group” means two or more Eligible Assignees that are Affiliates
of one another or two or more Approved Funds managed by the same investment
advisor.
     “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.
     “Audited Financial Statements” means the audited consolidated balance sheet
of the Borrower and its Subsidiaries for the fiscal year ended December 31,
2009, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto.
     “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, and (c) the date of termination
of the commitment of each Lender to make Loans and of the obligation of the L/C
Issuer to make L/C Credit Extensions pursuant to Section 8.02.
     “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 Eurodollar Rate 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.
     “Borrower” has the meaning specified in the introductory paragraph hereto.
     “Borrower L/C Collateral Account” has the meaning specified in Section
2.14(b).

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     “Borrower Materials” has the meaning specified in Section 6.02.
     “Borrowing” means a borrowing consisting of simultaneous Loans of the same
Type and, in the case of Eurodollar Rate Loans, having the same Interest Period
made by each of the Lenders pursuant to Section 2.01.
     “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 is located or the
state of New York and, if such day relates to any Eurodollar Rate Loan, means
any such day that is also a London Banking Day.
     “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 Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the Administrative Agent, the Fronting
Bank and the Lenders, as collateral for L/C Obligations or obligations of the
Fronting Bank or Lenders to fund or fund participations in respect of Letters of
Credit, cash or deposit account balances or, if the 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 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.
     “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 or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.
     “Change of Control” means an event or series of events by which:
     (a) any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit
plan of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
other than the Michael H. Lee Family becomes the “beneficial owner” (as defined
in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that
a person or group shall be deemed to have “beneficial ownership” of all
securities that such person or group has the right to acquire, whether such
right is exercisable immediately or only after the passage of time (such right,
an “option right”)), directly or indirectly, of 30% or more of the equity
securities of the Borrower entitled to vote for members of the board of
directors or equivalent governing body of the Borrower on a fully-diluted basis
(and taking into account all such

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securities that such person or group has the right to acquire pursuant to any
option right); or
     (b) the Borrower fails to own, directly or indirectly, 100% of the Equity
Interests of (i) Tower Insurance Company of New York, (ii) CastlePoint
Reinsurance Company, Ltd. or (iii) any Insurance Subsidiary of the Borrower
whose Statutory Surplus as of the end of the most recently completed fiscal
quarter of the Borrower for which financial statements are available, is greater
than 20% of the consolidated Statutory Surplus of all Insurance Subsidiaries of
the Borrower taken together as of the end of such fiscal quarter.
     “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.
     “Commitment” means, as to each Lender, its obligation to (a) make Loans to
the Borrower pursuant to Section 2.01 and (b) to issue Several Letters of Credit
and purchase participations in L/C Obligations arising under Fronted Letters of
Credit, in an aggregate principal amount at any one time outstanding not to
exceed the 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.
     “Compliance Certificate” means a certificate substantially in the form of
Exhibit C.
     “Consolidated Debt” means, as of any date of determination, the
consolidated Indebtedness of the Borrower and its Subsidiaries (including the
Loans and the L/C Obligations).
     “Consolidated Net Income” means, for any fiscal quarter, for the Borrower
and its Subsidiaries, on a consolidated basis, the net income of the Borrower
and its Subsidiaries for such fiscal quarter.
     “Consolidated Net Worth” means, as of any date of determination,
consolidated shareholders’ equity of the Borrower and its Subsidiaries as of
that date determined in accordance with GAAP.
     “Contractual Obligation” means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
     “Control” means the possession, directly or indirectly, of the power 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.
     “Credit Extension” means each of the following: (a) a Borrowing and (b) an
L/C Credit Extension.

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     “Debt to Capitalization Ratio” means the ratio of (a) Consolidated Debt to
(b) the sum of Consolidated Net Worth plus Consolidated Debt.
     “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 Eurodollar 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 2.15(b), any Lender that, as
determined by the Administrative Agent, (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, (b) has notified the Borrower,
the Administrative Agent, the Fronting Bank or the L/C Administrator that it
does not intend to comply with its funding obligations or has made a public
statement to that effect with respect to its funding obligations hereunder or
under other agreements in which it commits to extend credit, (c) 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, 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,
(ii) had a receiver, conservator, trustee, administrator, assignee for the
benefit of creditors or similar Person charged with reorganization or
liquidation of its business or a custodian appointed for it, or (iii) taken any
action in furtherance of, or indicated its consent to, approval of or
acquiescence in any such proceeding or appointment; 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.
     “Disposition” or “Dispose” means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.
     “Dollar” and “$” mean lawful money of the United States.

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     “Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 10.06(b)(iii), and (v) (subject to such consents, if any,
as may be required under Section 10.06(b)(iii) having been obtained).
     “Environmental Laws” means any and all applicable Federal, state, local,
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, licenses, agreements or governmental restrictions relating to
pollution and the protection of the environment or the Release of any Hazardous
Materials into the environment or waste or public systems.
     “Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any of its Subsidiaries 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 of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement to which the Borrower or any
of its Subsidiaries is party pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
     “Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, or warrants, rights or options for the purchase or acquisition from
such Person of such shares (or such other interests), and all of the other
ownership or profit interests in such Person (including partnership, member or
trust interests therein), whether voting or nonvoting.
     “ERISA” means the Employee Retirement Income Security Act of 1974.
     “ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
     “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan;
(b) the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which such entity was a
“substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Pension Plan amendment as a termination under Section 4041 or
4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a
Pension Plan; (f) any event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (g) the determination that any Pension Plan is
considered an at-risk plan or a plan in endangered or critical status within the
meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of
ERISA; or (h) the imposition of any liability under

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Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.
     “Eurodollar Rate” means:
     (a) for any Interest Period with respect to a Eurodollar Rate Loan, the
rate per annum equal to (i) the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or such other commercially available source
providing quotations of BBA LIBOR as may be designated by the Administrative
Agent from time to time) at approximately 11:00 a.m., London time, two London
Banking Days prior to the commencement of such Interest Period, for Dollar
deposits (for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period or, (ii) if such 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 first day
of such Interest Period in same day funds in the approximate amount of the
Eurodollar Rate Loan being made, continued or converted and with a term
equivalent to such Interest Period would be offered by Bank of America’s London
Branch to major banks in the London interbank eurodollar market at their request
at approximately 11:00 a.m. (London time) two London Banking 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) BBA LIBOR, at approximately 11:00 a.m.,
London time determined two London Banking Days prior to such date for Dollar
deposits being delivered in the London interbank market for 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 Eurodollar market
at their request at the date and time of determination.
     “Eurodollar Rate Loan” means a Loan that bears interest at a rate based on
clause (a) of the definition of “Eurodollar Rate.”
     “Event of Default” has the meaning specified in Section 8.01.
     “Excluded Taxes” means, with respect to the Administrative Agent, any
Lender, the Fronting Bank or any other recipient of any payment to be made by or
on account of any Obligation of the Borrower hereunder or under any Loan
Document, (a) Taxes imposed on or measured by its net income or gain (however
denominated) and franchise Taxes imposed on it (in lieu of net income taxes), in
each case, imposed by the United States (or any state or locality thereof) or by
the jurisdiction (or any political subdivision thereof) under the Laws of which
such recipient is organized or in which its principal office is located or, in
the case of any Lender, in which its applicable Lending Office is located,
(b) any branch profits taxes imposed by the United States or any similar tax
imposed by any other jurisdiction (i) in which the Borrower is located or
(ii) is described in clause (a) above, (c) any backup withholding tax that is
required by the Code to be withheld from amounts payable to a Lender that has
failed to comply with Section 3.01(e) and (d) in the case of a Non-U.S. Lender
(other than an assignee pursuant to a request by

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the Borrower under Section 10.13), any United States withholding tax that (i) is
required to be imposed on amounts payable to such Non-U.S. Lender pursuant to
any Law in force at the time such Non-U.S. Lender becomes a party hereto (or
designates a new Lending Office), (ii) is attributable to such Non-U.S. Lender’s
failure or inability (other than as a result of a Change in Law occurring after
the date such Lender becomes a party to this Agreement or designates a new
Lending Office) to comply with Section 3.01(e) of this Agreement (including as a
result of any inaccurate or incomplete documentation), except to the extent that
the assignor to such Lender was entitled, at the time of the assignment of its
rights under this Agreement, to receive additional amounts from the Borrower
with respect to such withholding tax pursuant to Section 3.01(a)(ii), or (iii)
is imposed with respect to the requirements of FATCA.
     “FASB ASC” means the Accounting Standards Codification of the Financial
Accounting Standards Board.
     “FATCA” means sections 1471 through 1474 of the Code and any regulations
(whether temporary or proposed) that are issued thereunder or official
governmental interpretations thereof.
     “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 April 8, 2010,
among the Borrower, the Administrative Agent and the Arrangers and (b) the
letter agreement, dated April 8, 2010, among the Borrower, Banc of America
Securities LLC, and the Administrative Agent.
     “Financial Strength Rating” means the financial strength rating given to an
Insurance Subsidiary by A.M. Best Company.
     “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 the Fronting
Bank in which the Lenders purchase a risk participation pursuant to
Section 2.03.
     “Fronting Bank” means Bank of America and any other Person that may become
the issuer of Fronted Letters of Credit hereunder pursuant to Section 10.06(g).
     “Fronting Exposure” means, at any time there is a Defaulting Lender, with
respect to the Fronting Bank, such Defaulting Lender’s Applicable Percentage of
the outstanding L/C Obligations with respect to Fronted Letters of Credit other
than L/C Obligations as to which such

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Defaulting Lender’s participation obligation has been reallocated to other
Lenders or Cash Collateralized in accordance with the terms hereof.
     “Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its activities.
     “GAAP” means generally accepted accounting principles in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board 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.
     “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).
     “Guarantee” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.
     “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 or radon gas, and all other substances or
wastes of any nature regulated pursuant to any Environmental Law.

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     “Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
     (a) all obligations of such Person for borrowed money and all obligations
of such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;
     (b) all direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;
     (c) net obligations of such Person under any Swap Contract;
     (d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business and, in each case, not past due for more than 60 days after the date
on which such trade account payable was created);
     (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;
     (f) capital leases;
     (g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interest in such Person or
any other Person, valued, in the case of a redeemable preferred interest, at the
greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends; and
     (h) all Guarantees of such Person in respect of any of the foregoing.
     For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease as of any date shall be
deemed to be the amount of Capital Lease Obligations in respect thereof as of
such date.
     “Indemnified Taxes” means Taxes other than Excluded Taxes.
     “Indemnitees” has the meaning specified in Section 10.04(b).
     “Information” has the meaning specified in Section 10.07.
     “Insurance Code” means, with respect to any Insurance Subsidiary, the
“Insurance Code” or Law of such Insurance Subsidiary’s domicile and any
successor statute of similar import,

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together with the regulations thereunder or otherwise modified and in effect
from time to time. References to sections of the Insurance Code shall be
construed to also refer to successor sections.
     “Insurance Subsidiary” means any Subsidiary of the Borrower which is
licensed by any Governmental Authority to engage in the insurance business.
     “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 Eurodollar
Rate Loan exceeds three months, the respective 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 Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two or three
months thereafter, as selected by the Borrower in its Loan Notice, or such other
period that is twelve months or less requested by the 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.
     “IRS” means the United States Internal Revenue Service.
     “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).
     “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 the Borrower (or any Subsidiary) in
respect of such Letter of Credit.
     “L/C Administrator” means 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.

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     “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 a Fronted Letter of Credit, the
Fronting Bank and (b) with respect to a Several Letter of Credit, each Lender.
     “L/C Obligations” means, at any time, the sum, without duplication, of
(a) 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 the
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 1.06. For all purposes of this
Agreement, if on any date of determination a Letter of Credit has expired by its
terms but any amount may still be drawn thereunder by reason of the operation of
Rule 3.14 of the ISP or otherwise, such Letter of Credit shall be deemed to be
“outstanding” in the amount so remaining available to be drawn. 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, without duplication, of (i) the aggregate
amount of each Lender’s direct obligation, in all outstanding Several Letters of
Credit, (ii) its risk participation in all outstanding Fronted Letters of
Credit, and (iii) its L/C Borrowings. The L/C Obligation of the Borrower shall
be the aggregate amount available to be drawn under all outstanding Letters of
Credit issued for the account of the Borrower plus the aggregate of all
Unreimbursed Amounts owed by the Borrower.
     “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.
     “Lender” has the meaning specified in the introductory paragraph hereto.
     “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 Borrower
and the Administrative Agent.
     “Letter of Credit” means any standby letter of credit issued hereunder.
     “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.

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     “Letter of Credit Expiration Date” means May 14, 2014.
     “Letter of Credit Fee” has the meaning specified in Section 2.03(h).
     “Letter of Credit Sublimit” means an amount equal to $25,000,000. The
Letter of Credit Sublimit is part of, and not in addition to, the Aggregate
Commitments.
     “Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
     “Loan” has the meaning specified in Section 2.01.
     “Loan Documents” means this Agreement, each Note, each Issuer Document, any
agreement creating or perfecting rights in Cash Collateral pursuant to the
provisions of Section 2.14 of this Agreement and the Fee Letters.
     “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 Eurodollar Rate Loans,
pursuant to Section 2.02(a), which, if in writing, shall be substantially in the
form of Exhibit A.
     “London Banking Day” means any day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank eurodollar market.
     “Material Adverse Effect” means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the
rights and remedies of the Administrative Agent, the Fronting Bank or any Lender
under any of the Loan Documents or of the ability of the Borrower to perform its
obligations under any Loan Document to which it is a party; or (c) a material
adverse effect upon the legality, validity, binding effect or enforceability
against the Borrower of any Loan Document to which it is a party.
     “Material Subsidiary” means each of (a) CastlePoint Reinsurance Company
Ltd., (b) Tower Insurance Company of New York, (c) CastlePoint National
Insurance Company, (d) CastlePoint Insurance Company, (e) Hermitage Insurance
Company and (f) each other Insurance Subsidiary of the Borrower whose Statutory
Surplus as of the end of any fiscal quarter of the Borrower for which financial
statements are available, is greater than 10% of the consolidated Statutory
Surplus of all Insurance Subsidiaries of the Borrower taken together as of the
end of such fiscal quarter. For the avoidance of doubt, once a Subsidiary has
become a Material Subsidiary, it will remain a Material Subsidiary even if it
would cease to be a Material Subsidiary based on Statutory Surplus.
     “Maturity Date” means May 14, 2013; provided, however, that if such date is
not a Business Day, the Maturity Date shall be the next preceding Business Day.

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     “Michael H. Lee Family” means, collectively, Michael H. Lee; his spouse;
any natural person who is a lineal descendant of Michael H. Lee; the spouse,
children, or grandchildren of any such natural person; any trust of which any of
the foregoing is or are the sole beneficiary or beneficiaries; or the estate,
executor, administrator, or legal guardian of any of the foregoing.
     “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.
     “Multiemployer Plan” means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.
     “Multiple Employer Plan” means a Plan which has two or more contributing
sponsors (including the Borrower or any ERISA Affiliate) at least two of whom
are not under common control, as such a plan is described in Section 4064 of
ERISA.
     “Non-U.S. Lender” shall have the meaning set forth in Section 3.01(e).
     “Note” means a promissory note made by the 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, obligations,
covenants and duties of, the Borrower arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit, 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 the 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.
     “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 Taxes” means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies (other than Excluded
Taxes) arising from the execution, delivery or enforcement of this Agreement or
any other Loan Document.
     “Outstanding Amount” means (i) with respect to Loans on any date, 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

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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 the Borrower of Unreimbursed Amounts.
     “Participant” has the meaning specified in Section 10.06(d).
     “PBGC” means the Pension Benefit Guaranty Corporation.
     “Pension Act” means the Pension Protection Act of 2006.
     “Pension Funding Rules” means the rules of the Code and ERISA regarding
minimum required contributions (including any installment payment thereof) to
Pension Plans and set forth in, with respect to plan years ending prior to the
effective date of the Pension Act, Section 412 of the Code and Section 302 of
ERISA, each as in effect prior to the Pension Act and, thereafter, Section 412,
430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.
     “Pension Plan” means any employee pension benefit plan (including a
Multiple Employer Plan or a Multiemployer Plan) that is maintained or is
contributed to by the Borrower and any ERISA Affiliate and is either covered by
Title IV of ERISA or is subject to the minimum funding standards under
Section 412 of the Code.
     “Permitted Investment” means, at any time:
     (a) any evidence of Debt issued or guaranteed by the United States
Government or any agency thereof;
     (b) commercial paper, maturing not more than one year from the date of
issue, which is issued by
     (i) a corporation (except an Affiliate of the Borrower) rated at least A-1
by S&P, P-1 by Moody’s or D-2 by FitchIBCA, or
     (ii) any Lender (or its holding company);
     (c) investments in money market funds that invest solely in Permitted
Investments described in clauses (a) and (b); and
     (d) investments in short-term asset management accounts offered by any
Lender for the purpose of investing in loans to any corporation (other than an
Affiliate of the Borrower) organized under the Laws of any state of the United
States or of the District of Columbia and rated at least A-1 by S&P or P-1 by
Moody’s.
     “Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
     “Plan” means any employee benefit plan within the meaning of Section 3(3)
of ERISA (including a Pension Plan), maintained for employees of the Borrower or
any ERISA Affiliate or

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any such Plan to which the Borrower or any ERISA Affiliate is required to
contribute on behalf of any of its employees.
     “Platform” has the meaning specified in Section 6.02.
     “Projections” means the financial projections delivered to the Lenders on
or about April 14, 2010, consisting of consolidated balance sheets and
statements of income or operations and cash flows of the Borrower and its
Subsidiaries on a monthly basis for the 2011, 2012 and 2013 fiscal years.
     “Public Lender” has the meaning specified in Section 6.02.
     “Quarterly Statements” means the quarterly financial statements of an
Insurance Subsidiary as required to be filed with the Applicable Insurance
Regulatory Authority of such Insurance Subsidiary’s domicile, together with all
exhibits or schedules filed therewith, prepared in conformity with SAP.
     “Reciprocal Insurer” means Adirondack Insurance Exchange, New Jersey
Skylands Insurance Association and each other reciprocal insurance company which
would be a Subsidiary solely as a result of being managed by the Borrower or any
of its Subsidiaries.
     “Register” has the meaning specified in Section 10.06(c).
     “Related Parties” means, with respect to any Person, such Person’s
Affiliates and the partners, directors, officers, employees, agents, trustees
and attorneys of such Person and of such Person’s Affiliates.
     “Release” means any actual or threatened release, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, abandonment, disposing or allowing to escape or migrate into
or through the environment.
     “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 Bank 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 from Total Outstandings for purposes of making a determination of
Required Lenders.

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     “Responsible Officer” means the chief executive officer, president, chief
financial officer, treasurer or controller of the Borrower, solely for purposes
of the delivery of incumbency certificates pursuant to Section 4.01, the
secretary or any assistant secretary of the Borrower and, solely for purposes of
notices given pursuant to Article II, any other officer or employee of the
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 the Borrower shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of the Borrower and such Responsible Officer shall be conclusively presumed
to have acted on behalf of the Borrower.
     “Restricted Payment” means any dividend or other distribution (whether in
cash, securities or other property) with respect to any capital stock or other
Equity Interest of the Borrower or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such capital stock or other Equity Interest,
or on account of any return of capital to the Borrower’s stockholders, partners
or members (or the equivalent Person thereof).
     “Risk Based Capital Ratio” means the ratio of “Total Adjusted Capital” to
“Company Action Level Capital” calculated in accordance with SAP pursuant to the
requirements of the New York State Insurance Department.
     “SAP” means, with respect to any Insurance Subsidiary, the statutory
accounting practices prescribed or permitted by Applicable Insurance Regulatory
Authority in the jurisdiction in which such Person is domiciled for the
preparation of annual statements and other financial reports by insurance
companies of the same type as such Person in effect from time to time, applied
in a manner consistent with those used in preparing the Statutory Financial
Statements referred to in Section 5.05(c).
     “S&P” means Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc. and any successor thereto.
     “SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
     “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 F or in such
other form as may be agreed by the Borrower and the L/C Administrator.
     “Statutory Financial Statements” means, with respect to any Insurance
Subsidiary, the Annual Statements and, if applicable Quarterly Statements,
required to be filed by such Insurance Subsidiary.
     “Statutory Surplus” means, with respect to any Insurance Subsidiary at any
time, the statutory capital and surplus of such Insurance Subsidiary at such
time, as determined in accordance with SAP (“Liabilities, Surplus and Other
Funds” statement, page 3, line 35 of the Annual Statement or the Quarterly
Statutory Statement, as applicable).

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     “Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
the Borrower. Unless otherwise specified, “Subsidiary” shall mean a Subsidiary
of the Borrower; provided, however, that Reciprocal Insurers shall not be deemed
to be a Subsidiary of the Borrower.
     “Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.
     “Swap Termination Value” means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
     “Taxes” means all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), assessments, fees or
other charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.
     “Threshold Amount” means $15,000,000.
     “Total Outstandings” means the aggregate Outstanding Amount of all Loans
and all L/C Obligations.
     “Type” means with respect to a Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.

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     “UCP” means the rules of 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)(i).
     “Wholly-Owned Subsidiary” of a Person means (a) any Subsidiary all of the
outstanding Equity Interests of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (b) any partnership, limited liability company, association,
joint venture or similar business organization 100% of the ownership interests
(whether voting or non-voting) of which shall at the time be so owned or
controlled.
     1.02 Other Interpretive Provisions. With reference to this Agreement and
each other Loan Document, unless otherwise specified herein or in such other
Loan 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 Loan
Document), (ii) any reference herein to any Person shall be 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 Loan
Document, shall be construed to refer to such Loan Document in its entirety and
not to any particular provision thereof, (iv) all references in a Loan Document
to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan 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.”

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     (c) Section headings herein and in the other Loan Documents are included
for convenience of reference only and shall not affect the interpretation of
this Agreement or any other Loan Document.
     1.03 Accounting Terms. Generally. All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.
Notwithstanding the foregoing, for purposes of determining compliance with any
covenant (including the computation of any financial covenant) contained herein,
Indebtedness of the Borrower and its Subsidiaries shall be deemed to be carried
at 100% of the outstanding principal amount thereof, and the effects of FASB ASC
825 and FASB ASC 470-20 on financial liabilities shall be disregarded.
     (b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrower or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrower shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of the Required Lenders);
provided that, until so amended, (i) such ratio or requirement shall continue to
be computed in accordance with GAAP prior to such change therein and (ii) the
Borrower shall provide to the Administrative Agent and the Lenders financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in GAAP.
     1.04 Rounding. Any financial ratios required to be maintained by the
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 Times of Day. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).
     1.06 Letter of Credit Amounts. Unless otherwise specified herein, the
amount of a Letter of Credit at any time shall be deemed to be 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 more automatic increases in the
stated amount thereof, the amount of such Letter of Credit shall be deemed to be
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.

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ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS
     2.01 Loans. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make loans (each such loan, a “Loan”) to the Borrower
from time to time, on any Business Day during the Availability Period, in an
aggregate amount not to exceed at any time outstanding the amount of such
Lender’s Commitment; provided, however, that after giving effect to any
Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Loans of any
Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of
all L/C Obligations shall not exceed such Lender’s Commitment. Within the limits
of each Lender’s Commitment, and subject to the other terms and conditions
hereof, the Borrower may borrow under this Section 2.01, prepay under
Section 2.04, and reborrow under this Section 2.01. Loans may be Base Rate Loans
or Eurodollar Rate Loans, as further provided herein.
     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 Eurodollar Rate Loans shall be made upon the Borrower’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 Eurodollar Rate Loans or of any conversion
of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date of
any Borrowing of Base Rate Loans; provided, however, that if the Borrower wishes
to request Eurodollar Rate Loans having an Interest Period other than one, two
or three 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. four Business Days prior to the requested date of such
Borrowing, conversion or continuation, 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. 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 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 Borrower
pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the
Administrative Agent of a written Loan Notice, appropriately completed and
signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion
to or continuation of Eurodollar 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 Section 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 Borrower is requesting a Borrowing, a conversion of Loans from
one Type to the other, or a continuation of Eurodollar 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 Borrower fails to specify a
Type of Loan in a Loan Notice or if the Borrower 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. Any such 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 Eurodollar Rate Loans. If the Borrower
requests a Borrowing of, conversion to, or continuation

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of Eurodollar 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.
     (b) Following receipt of a Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Applicable Percentage of the
applicable Loans, and if no timely notice of a conversion or continuation is
provided by the Borrower, the Administrative Agent shall notify each Lender of
the details of any automatic conversion to Base Rate Loans described in the
preceding subsection. In the case of a Borrowing, each Lender shall make the
amount of its Loan available to the Administrative Agent in immediately
available funds at the Administrative Agent’s Office not later than 1:00 p.m. 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 Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the 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 Borrower; provided,
however, that if, on the date the Loan Notice with respect to such Borrowing is
given by the Borrower, there are L/C Borrowings 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 Borrower as provided
above.
     (c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Loan. During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurodollar Rate Loans without the
consent of the Required Lenders.
     (d) The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Interest Period for Eurodollar
Rate Loans upon determination of such interest rate. At any time that Base Rate
Loans are outstanding, the Administrative Agent shall notify the Borrower and
the Lenders of 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 three Interest Periods in effect with respect to Loans.
     2.03 Letters of Credit.
     (a) The Letter of Credit Commitment.
     (i) Subject to the terms and conditions set forth herein, (A) the Fronting
Bank agrees, in reliance upon the agreements of the Lenders set forth in this
Section 2.03, (1) from time to time on any Business Day during the Availability
Period, to issue Fronted Letters of Credit for the account of the Borrower or
its Subsidiaries, and to amend or extend Fronted Letters of Credit previously
issued by it, in accordance with subsection (b) below, and (2) to honor drawings
under the Fronted Letters of Credit; and the Lenders severally agree to
participate in Fronted Letters of Credit issued for the account of the

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Borrower or its Subsidiaries and any drawings thereunder and (B) each Lender
severally agrees, (1) from time to time on any Business Day during the
Availability Period, to issue, extend and renew in such Lender’s Applicable
Percentage, Several Letters of Credit at the request of and for the account of
the Borrower or its Subsidiaries, in accordance with subsection (b) below, and
(2) to honor its Applicable Percentage of drawings under the Several Letters of
Credit; provided that after giving effect to any L/C Credit Extension with
respect to any Letter of Credit, (x) the Total Outstandings shall not exceed the
Aggregate Commitments, (y) the aggregate Outstanding Amount of the Loans of any
Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of
all L/C Obligations shall not exceed such Lender’s Commitment, and (z) the
Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit
Sublimit. Each request by the Borrower for the issuance or amendment of a Letter
of Credit shall be deemed to be a representation by the Borrower that the L/C
Credit Extension so requested complies with the conditions set forth in the
proviso to the preceding sentence. Within the foregoing limits, and subject to
the terms and conditions hereof, the Borrower’s ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrower may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed. 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, 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 Lenders have approved such
expiry date.
     (ii) The Applicable Issuing Party 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 an L/C Issuer from
issuing the Letter of Credit, or any Law applicable to an L/C Issuer or any
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over an L/C Issuer shall prohibit, or
request that an L/C Issuer refrain from, the issuance of letters of credit
generally or the Letter of Credit in particular or shall impose upon an L/C
Issuer with respect to the Letter of Credit any restriction, reserve or capital
requirement (for which an L/C Issuer is not otherwise compensated hereunder) not
in effect on the Closing Date, or shall impose upon an L/C Issuer any
unreimbursed loss, cost or expense which was not applicable on the Closing Date
and which an L/C Issuer in good faith deems material to it;
     (B) the issuance of the Letter of Credit would violate one or more policies
of an L/C Issuer applicable to letters of credit generally;

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     (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) the Letter of Credit is to be denominated in a currency other than
Dollars;
     (E) any Lender is at that time a Defaulting Lender, unless, in the case of
a Fronted Letter of Credit, the Fronting Bank has entered into arrangements,
including the delivery of Cash Collateral, satisfactory to the Fronting Bank (in
its sole discretion) with the Borrower or such Lender to eliminate the Fronting
Bank’s actual or potential Fronting Exposure (after giving effect to
Section 2.15(a)(iv)) with respect to the Defaulting Lender arising from either
the Fronted Letter of Credit then proposed to be issued or that Fronted Letter
of Credit and all other L/C Obligations as to which the Fronting Bank has actual
or potential Fronting Exposure, as it may elect in its sole discretion; or
     (F) the Letter of Credit contains any provisions for automatic
reinstatement of the stated amount after any drawing thereunder.
     (iii) The Applicable Issuing Party shall not amend any Letter of Credit if
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. The Applicable
Issuing Party shall be under no obligation to amend any Letter of Credit if
(A) the Applicable Issuing Party would have no obligation 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.
     (iv) The 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 each Lender provided that, upon request of the Borrower, such Several
Letter of Credit or amendment will be executed by each Lender. The L/C
Administrator shall use the Applicable Percentage of each Lender as its
“Commitment Share” under each Several Letter of Credit. The L/C Administrator
shall not amend any Several Letter of Credit to change the “Commitment Share” of
an L/C Issuer or add or delete an L/C Issuer 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 2.13 or
any other addition or replacement of a Lender in accordance with the terms of
this Agreement. Each Lender hereby irrevocably constitutes and appoints the 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 the 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 the L/C

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Administrator to execute and deliver such Several Letter of Credit and any
amendment or other modification thereto on behalf of the Lenders.
     (v) 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 Bank and
the L/C Administrator with respect to such acts or omissions, and (B) as
additionally provided herein with respect to the Fronting Bank and the L/C
Administrator.
     (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 Borrower delivered to (x) the Fronting Bank, in the case
of Fronted Letters of Credit and (y) the 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 Borrower and, if such Letter of Credit
will be issued for the account of a Subsidiary, such Subsidiary. 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 Borrower or
a Subsidiary, (B) the proposed issuance date of the requested Letter of Credit
(which shall be a Business Day); (C) the amount thereof; (D) the expiry date
thereof (which shall be the earlier of the date which is twelve months from the
date of issuance or the Letter of Credit Expiration Date); (E) the name and
address of the beneficiary thereof; (F) the documents to be presented by such
beneficiary in case of any drawing thereunder; (G) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; (H) the purpose and nature of the requested Letter of Credit; (I) in
the case of Letters of Credit issued for the account of an Insurance Subsidiary,
whether such Letter of Credit is to be transferable in whole or in part;
(J) whether such Letter of Credit shall be an Auto-Extension Letter of Credit;
(K) whether such Letter of Credit is to be a Fronted Letter of Credit or a
Several Letter of Credit; (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

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other matters as the Applicable Issuing Party may require. Additionally, the
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 Borrower 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 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 Borrower (or the applicable Subsidiary) 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
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.
     (iii) If the 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 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 Required Lenders have elected not to permit such extension or
(2) from the Administrative Agent, any Lender or the Borrower that one or more
of the applicable

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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 Party will also deliver to the
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, the Applicable Issuing Party shall
notify the Borrower and the Administrative Agent thereof 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. (New York City time) on the Honor Date for a
Letter of Credit, the Borrower shall reimburse the Applicable Issuing Party
through the Administrative Agent in an amount equal to the amount of such
drawing. If the Borrower fails to so reimburse the Applicable Issuing Party by
such time, the Administrative Agent shall promptly notify each Lender of the
amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount
of such Lender’s Applicable Percentage thereof. In such event, the Borrower
shall be deemed to have requested a Borrowing of Base Rate Loans to be disbursed
on the Honor Date in an amount equal to the Unreimbursed Amount, without regard
to the minimum and multiples specified in Section 2.02 for the principal amount
of Base Rate Loans, but subject to the amount of the unutilized portion of the
Aggregate Commitments and the conditions set forth in Section 4.02 (other than
the delivery of a Loan Notice). 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. The proceeds of such Base Rate Loan shall be applied to payment of
the Unreimbursed Amount.
     (ii) Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make
funds available (and the Administrative Agent may apply Cash Collateral provided
for this purpose) 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 Amount not later than 1:00 p.m. on the Business Day specified
in such notice by the Administrative Agent, whereupon, subject to the provisions
of Section 2.03(c)(iii), each Lender that so makes funds available shall be
deemed to have made a Base Rate Loan to the Borrower in such amount. The
Administrative Agent shall remit the funds so received to the Applicable Issuing
Party. To the extent that the Administrative Agent has not received funds from a
Lender with respect to a Several Letter of Credit, the L/C Administrator shall
only forward the funds actually received to the beneficiary.
     (iii) With respect to any Unreimbursed Amount that is not fully refinanced
by a Borrowing of Base Rate Loans because the conditions set forth in
Section 4.02 cannot

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be satisfied or for any other reason, the Borrower shall be deemed to have
incurred an L/C Borrowing from (x) in the case of Fronted Letters of Credit, the
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 this Section 2.03 in the amount of the Unreimbursed Amount
that is not so refinanced, which L/C Borrowing shall be due and payable on
demand (together with interest) and shall bear interest at the Default Rate. In
such event, each Lender’s payment to the Administrative Agent for the account of
the Applicable Issuing Party pursuant to Section 2.03(c)(ii) shall be deemed
payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Lender in satisfaction of its funding or
participation obligation under this Section 2.03.
     (iv) Until each Lender funds its Loan or L/C Advance pursuant to this
Section 2.03(c) to reimburse the Fronting Bank for any amount drawn under any
Fronted Letter of Credit, interest in respect of such Lender’s Applicable
Percentage of such amount shall be solely for the account of the Fronting Bank.
     (v) Each Lender’s obligation to make Base Rate Loans or L/C Advances to
reimburse the Fronting Bank for amounts drawn under Fronted Letters of Credit or
to funds its obligations under any Several Letter 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
Applicable Issuing Party, the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Lender’s obligation to make Loans pursuant to this
Section 2.03(c) is subject to the conditions set forth in Section 4.02 (other
than delivery by the Borrower of a Loan Notice). No such making of an L/C
Advance shall relieve or otherwise impair the obligation of the Borrower to
reimburse the respective L/C Issuers for the amount of any payment made by any
of the L/C Issuers under any Letter of Credit, together with interest as
provided herein.
     (vi) If any Lender fails to make available to the Administrative Agent for
the account of the Fronting Bank 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), then, without limiting the other provisions of
this Agreement, the Fronting Bank 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 the Fronting Bank at a rate per
annum equal to the greater of the Federal Funds Rate and a rate determined by
the Fronting Bank in accordance with banking industry rules on interbank
compensation, plus any administrative, processing or similar fees customarily
charged by the Fronting Bank in connection with the foregoing. If such Lender
pays such amount with respect to a Fronted Letter of Credit (with interest and
fees as aforesaid) or pays its Applicable Percentage of any Unreimbursed Amount
with respect to a Several Letter of Credit, the amount so paid shall constitute
such Lender’s Base Rate Loan or L/C Advance in respect of the relevant L/C
Borrowing, as the case may be, with respect to

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such drawn Letter of Credit. A certificate of the Fronting Bank submitted to any
Lender (through the Administrative Agent) with respect to any amounts owing
under this clause (vi) 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 the Borrower or otherwise,
including proceeds of Cash Collateral applied thereto by the Administrative
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 Fronting Bank or the L/C Administrator in its discretion), each Lender shall
pay to the Administrative Agent for the account of the 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 the Borrower to reimburse the
applicable L/C Issuers for each drawing under each Letter of Credit and to repay
each 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 Loan Document;
     (ii) the existence of any claim, counterclaim, setoff, defense or other
right that the 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 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;

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     (iv) any payment by the Applicable Issuing Party 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 the
Applicable Issuing Party 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 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
     (v) 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 Borrower or any
Subsidiary.
     The 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 Borrower’s instructions or other irregularity, the
Borrower will immediately notify the Applicable Issuing Party. The Borrower
shall be conclusively deemed to have waived any such claim against the
Applicable Issuing Party and its correspondents unless such notice is given as
aforesaid.
     (f) Role of Applicable Issuing Party. Each Lender and the 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 the 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 Lenders, the
Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of an Applicable Issuing Party 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. The 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 the Borrower’s 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 Lenders, the Administrative Agent, any of
their respective Related Parties nor any correspondent, participant or assignee
of an Applicable Issuing Party shall be liable or responsible for any of the
matters described in clauses (i) through (v) of Section 2.03(e); provided,
however, that anything in such clauses to the contrary notwithstanding, the
Borrower may have a claim against the Applicable Issuing Party and/or the
Lenders, and the Applicable Issuing Party and/or the Lenders may be liable to
the Borrower, to the extent, but only to the extent, of any direct, as opposed
to consequential or exemplary, damages suffered by the Borrower which the
Borrower proves were caused by the Applicable Issuing Party’s and/or a Lender’s
willful misconduct or gross negligence or the Applicable Issuing Party’s and/or
a Lender’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

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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, regardless of any
notice or information to the contrary, and neither the Applicable Issuing Party
nor any Lender 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.
     (g) Applicability of ISP and UCP. Unless otherwise expressly agreed by the
Applicable Issuing Party and the Borrower when a Letter of Credit is issued, the
rules of the ISP shall apply unless, for regulatory purposes, the rules of the
UCP must apply.
     (h) Letter of Credit Fees. The Borrower shall pay to the Administrative
Agent for the account of each Lender in accordance with its Applicable
Percentage a Letter of Credit fee (the “Letter of Credit Fee”) for each Letter
of Credit equal to the Applicable Rate times 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 the 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 2.15(a)(iv),
with the balance of such fee, if any, payable to the 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 1.06. Letter of Credit Fees shall be (i) due and payable
on the first 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.
     (i) Fronting Fee and Documentary and Processing Charges Payable to
Applicable Issuing Party. The Borrower shall pay directly to the Fronting Bank
for its own account a fronting fee with respect to each Fronted Letter of
Credit, at the rate per annum specified in the Fee Letter, computed on the daily
amount available to be drawn under such Fronted Letter of Credit on a quarterly
basis in arrears Such fronting fee shall be due and payable on the tenth
Business Day after the end of each March, June, September and December in
respect of the most recently-ended quarterly period (or portion thereof, in the
case of the first payment), 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. 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 1.06. In addition, the Borrower
shall pay directly to the Applicable Issuing Party for its own account the
customary issuance, presentation, amendment and other processing fees, and other
standard costs and charges, of the Applicable

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Issuing Party relating to letters of credit as from time to time in effect. Such
customary fees and standard costs and charges are due and payable on demand and
are nonrefundable.
     (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.
     (k) Letters of Credit Issued for Subsidiaries. Notwithstanding that a
Letter of Credit issued or outstanding hereunder is in support of any
obligations of, or is for the account of, a Subsidiary, the Borrower shall be
obligated to reimburse the applicable L/C Issuer hereunder for any and all
drawings under such Letter of Credit. The Borrower hereby acknowledges that the
issuance of Letters of Credit for the account of Subsidiaries inures to the
benefit of the Borrower, and that the Borrower’s business derives substantial
benefits from the businesses of such Subsidiaries.
     2.04 Prepayments.
     (a) The Borrower 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 received by the
Administrative Agent not later than 11:00 a.m. (A) three Business Days prior to
any date of prepayment of Eurodollar Rate Loans and (B) on the date of
prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar Rate Loans
shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000
in excess thereof; and (iii) 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 Eurodollar Rate Loans are to be prepaid,
the Interest Period(s) of such Loans. The Administrative Agent will promptly
notify each Lender of its receipt of each such notice, and of the amount of such
Lender’s Applicable Percentage of such prepayment. If such notice is given by
the Borrower, the Borrower 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 Eurodollar Rate Loan shall be accompanied by all accrued
interest on the amount prepaid, together with any additional amounts required
pursuant to Section 3.05. Subject to Section 2.15, each such prepayment shall be
applied to the Loans of the Lenders in accordance with their respective
Applicable Percentages.
     (b) If for any reason the Total Outstandings at any time exceed the
Aggregate Commitments then in effect, the Borrower shall immediately prepay
Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal
to such excess; provided, however, that the Borrower shall not be required to
Cash Collateralize the L/C Obligations pursuant to this Section 2.04(b) unless
after the prepayment in full of the Loans the Total Outstandings exceed the
Aggregate Commitments then in effect.
     2.05 Termination or Reduction of Commitments. The Borrower may, upon notice
to the Administrative Agent, terminate the Aggregate Commitments, or from time
to time permanently reduce the Aggregate 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

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of $10,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the
Borrower shall not terminate or reduce the Aggregate Commitments if, after
giving effect thereto and to any concurrent prepayments hereunder, the Total
Outstandings would exceed the Aggregate Commitments, and (iv) if, after giving
effect to any reduction of the Aggregate Commitments, the Letter of Credit
Sublimit exceeds the amount of the Aggregate Commitments, such Sublimit shall be
automatically reduced by the amount of such excess. The Administrative Agent
will promptly notify the Lenders of any such notice of termination or reduction
of the Aggregate Commitments. Any reduction of the Aggregate 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
Aggregate Commitments shall be paid on the effective date of such termination.
     2.06 Repayment of Loans. The Borrower 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 Eurodollar
Rate Loan shall bear interest on the outstanding principal amount thereof for
each Interest Period at a rate per annum equal to the Eurodollar 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 the
Borrower under any Loan 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, the Borrower shall pay interest on the principal amount of all
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.
     (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.

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     2.08 Fees. In addition to certain fees described in subsections (h) and
(i) of Section 2.03:
     (a) Commitment Fee. The Borrower shall pay to the Administrative Agent for
the account of each Lender in accordance with its Applicable Percentage, a
commitment fee equal to the Applicable Rate times the actual daily amount by
which the Aggregate Commitments exceed the sum of (i) the Outstanding Amount of
Loans and (ii) the Outstanding Amount of L/C Obligations, subject to adjustment
as provided in Section 2.15. 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 last Business Day 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. (i) The Borrower 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.
     (ii) The Borrower shall pay to the Lenders such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified.
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
Eurodollar 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). 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.
     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 Borrower
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
Borrower hereunder to pay any amount owing with respect to the Obligations. In
the event of any conflict

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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
Borrower 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 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 Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff
except to the extent of any Taxes (other than Indemnified Taxes or Other Taxes)
required to be withheld or deducted under Section 3.01(a)(i). Except as
otherwise expressly provided herein, all payments by the Borrower hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the Administrative Agent’s Office in
Dollars and in immediately available funds not later than 2:00 p.m. on the date
specified herein. 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 after 2:00
p.m. shall 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 the 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 Eurodollar 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 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 Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the case of

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a payment to be made by such Lender, the greater of the Federal Funds Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation, 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 the Borrower, the
interest rate applicable to Base Rate Loans. If the 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 the
Borrower the amount of such interest paid by the 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 the Borrower shall be without prejudice to any
claim the Borrower may have against a Lender that shall have failed to make such
payment to the Administrative Agent.
     (ii) Payments by Borrower; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of
the Lenders or the Fronting Bank hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the Fronting Bank, as the case may be,
the amount due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders or the 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 the 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 greater of the Federal Funds Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation.
     A notice of the Administrative Agent to any Lender or the 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 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 Fronted 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 Fronted 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

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Loan, to fund a Several Letter of Credit, to purchase its participation in a
Fronted 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:
     (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 the 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 2.14, 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 L/C Obligations to any assignee or participant, other than
an assignment to the Borrower or any Affiliate thereof (as to which the
provisions of this Section shall apply).
     The 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 the
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.
     2.13 Increase in Commitments.
     (a) Request for Increase. Provided there exists no Default, upon notice to
the Administrative Agent (which shall promptly notify the Lenders), the Borrower
may from time to time, request an increase in the Aggregate Commitments by an
amount (for all such requests) not exceeding $50,000,000; provided that any such
request for an increase shall be in a minimum amount of $5,000,000. At the time
of sending such notice, the Borrower (in consultation with

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the Administrative Agent) shall specify the time period within which each Lender
is requested to respond (which shall in no event be less than ten Business Days
from the date of delivery of such notice to the Lenders).
     (b) Lender Elections to Increase. Each Lender shall notify the
Administrative Agent within such time period whether or not it agrees to
increase its Commitment and, if so, whether by an amount equal to, greater than,
or less than its Applicable Percentage of such requested increase. Any Lender
not responding within such time period shall be deemed to have declined to
increase its Commitment.
     (c) Notification by Administrative Agent; Additional Lenders. The
Administrative Agent shall notify the Borrower and each Lender of the Lenders’
responses to each request made hereunder. To achieve the full amount of a
requested increase and subject to the approval of the Administrative Agent, the
Fronting Bank (which approvals shall not be unreasonably withheld), the Borrower
may also invite additional Eligible Assignees to become Lenders pursuant to a
joinder agreement in form and substance satisfactory to the Administrative Agent
and its counsel.
     (d) Effective Date and Allocations. If the Aggregate Commitments are
increased in accordance with this Section, the Administrative Agent and the
Borrower shall determine the effective date (the “Increase Effective Date”) and
the final allocation of such increase. The Administrative Agent shall promptly
notify the Borrower and the Lenders of the final allocation of such increase and
the Increase Effective Date.
     (e) Conditions to Effectiveness of Increase. As a condition precedent to
such increase, the Borrower shall deliver to the Administrative Agent a
certificate of the Borrower dated as of the Increase Effective Date (in
sufficient copies for each Lender) signed by a Responsible Officer of the
Borrower (x) certifying and attaching the resolutions adopted by the Borrower
approving or consenting to such increase, and (y) certifying that, before and
after giving effect to such increase, (A) the representations and warranties
contained in Article V and the other Loan Documents are true and correct on and
as of the Increase Effective Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they were true and correct as of such earlier date, and except that for
purposes of this Section 2.13, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01, and (B) no Default exists. The Borrower shall prepay any Loans
outstanding on the Increase Effective Date (and pay any additional amounts
required pursuant to Section 3.05) to the extent necessary to keep the
outstanding Loans ratable with any revised Applicable Percentages arising from
any nonratable increase in the Commitments under this Section.
     (f) Conflicting Provisions. This Section shall supersede any provisions in
Section 2.12 or 10.01 to the contrary.

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     2.14 Cash Collateral.
     (a) Upon the request of the Administrative Agent or the Fronting Bank
(i) if the Fronting Bank has honored any full or partial drawing request under
any Fronted Letter of Credit and such drawing has resulted in an L/C Borrowing,
the Borrower shall immediately Cash Collateralize 103% of the Outstanding Amount
of such L/C Borrowing, (ii) if the Borrower requests a Letter of Credit with (or
an amendment to extend) an expiry date beyond the Maturity Date, the Borrower
shall immediately Cash Collateralize 103% of the Outstanding Amount of such
Letter of Credit or (iii) if, as of the Letter of Credit Expiration Date, any
L/C Obligation for any reason remains outstanding, the Borrower shall
immediately Cash Collateralize 103% of the then Outstanding Amount of all L/C
Obligations. At any time that there shall exist a Defaulting Lender, immediately
upon the request of the Administrative Agent or the Fronting Bank, the Borrower
shall deliver to the Administrative Agent Cash Collateral in an amount
sufficient to cover 103% of all Fronting Exposure (after giving effect to
Section 2.15(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 the 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 Permitted Investments and (y) in the case
of funds deposited by a Defaulting Lender, in blocked, non-interest bearing
deposit accounts at the Administrative Agent. The 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 Bank and the Lenders, and agrees to maintain, a first
priority security interest in all such cash, deposit accounts and all balances
therein, 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 2.14(c) and shall
execute such additional documents as the Administrative Agent may reasonably
request to ensure that the Administrative Agent 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 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 2.14 or Sections
2.03, 2.04, 2.15 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 the
Borrower shall not be released during the continuance of a Default or Event of
Default (and following application as provided in this Section 2.14 may be
otherwise applied in accordance with Section 8.03), and (y) the Person providing
Cash Collateral and the Fronting Bank may agree that Cash Collateral shall not
be released but instead held to support future anticipated Fronting Exposure or
other obligations.
     2.15 Defaulting Lenders. 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. A 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 to the Fronting Bank
hereunder; third, if so determined by the Administrative Agent or requested by
the 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;
fourth, as the Borrower may request (so long as no Default or Event of 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 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, the Fronting Bank as a result of any judgment of a
court of competent jurisdiction obtained by any Lender, the 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 or Event of
Default exists, to the payment of any amounts owing to the Borrower as a result
of any judgment of a court of competent jurisdiction obtained by the 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; 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

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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 amounts owed by a Defaulting Lender or to post
Cash Collateral pursuant to this Section 2.15(a)(ii) shall be deemed paid to and
redirected by that Defaulting Lender, and each Lender irrevocably consents
hereto.
     (iii) Certain Fees. That Defaulting Lender (x) shall not be entitled to
receive any commitment fee pursuant to Section 2.08(a) for any period during
which that Lender is a Defaulting Lender (and the Borrower shall not be required
to pay any such fee that otherwise would have been required to have been paid to
that Defaulting Lender) 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 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 or Event of Default
exists; and (ii) the aggregate obligation of each non-Defaulting Lender to
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 the Loans of that Lender.
     (b) Defaulting Lender Cure. If the Borrower, the Administrative Agent and
the Fronting Bank 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 2.15(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 the 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 the
Borrower hereunder or under any other Loan Document shall to the extent
permitted by applicable Laws be made free and clear of and without reduction or
withholding for any Taxes. If, however, applicable Laws require the Borrower or
the Administrative Agent to withhold or deduct any Tax, such Tax shall be
withheld or deducted in accordance with such Laws as determined by the Borrower
or the Administrative Agent, as the case may be, taking into account the
information and documentation to be delivered pursuant to subsection (e) below.
     (ii) If the 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 described hereunder
or pursuant to any other Loan Document, then (A) the Borrower or the
Administrative Agent, as the case may be, shall withhold or make such deductions
as are required, (B) the Borrower or the Administrative Agent, as the case may
be, 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 or Other
Taxes, the sum payable by the 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)
the Administrative Agent, Lender or Fronting Bank, as the case may be, receives
an amount equal to the sum it would have received had no such withholding or
deduction of Indemnified Taxes or Other Taxes been made.
     (b) Payment of Other Taxes by the Borrower. Without limiting the provisions
of subsection (a) above, the Borrower shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable Laws.
     (c) Tax Indemnifications. (i) Without limiting the provisions of subsection
(a) or (b) above, the Borrower shall, and does hereby, indemnify the
Administrative Agent, each Lender and the Fronting Bank, and shall make payment
in respect thereof within 10 days after demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
withheld or deducted by the Borrower or the Administrative Agent or paid by the
Administrative Agent, such Lender or the Fronting Bank, as the case may be, and
any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
The Borrower shall also, and does hereby, indemnify the Administrative Agent,
and shall make payment in respect thereof within 10 days after demand therefor,
for any amount which a Lender or the Fronting Bank for any reason fails to pay
indefeasibly to the Administrative Agent as required by clause (ii) of this
subsection. A certificate as to the amount of any such payment or liability
delivered to the Borrower by a Lender or the Fronting Bank (with a copy to the
Administrative Agent), or by the Administrative

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Agent on its own behalf or on behalf of a Lender or the Fronting Bank, shall be
conclusive absent manifest error.
     (ii) Without limiting the provisions of subsection (a) or (b) above, each
Lender and the Fronting Bank shall, and does hereby, indemnify the Borrower and
the Administrative Agent, and shall make payment in respect thereof within
10 days after demand therefor, against any and all Taxes and any and all related
losses, claims, liabilities, penalties, interest and expenses (including the
fees, charges and disbursements of any counsel for the Borrower or the
Administrative Agent) incurred by or asserted against the Borrower or the
Administrative Agent by any Governmental Authority as a result of the failure by
such Lender or the Fronting Bank, as the case may be, to deliver, or as a result
of the inaccuracy, inadequacy or deficiency of, any documentation required to be
delivered by such Lender or the Fronting Bank, as the case may be, to the
Borrower or the Administrative Agent pursuant to subsection (e). Each Lender and
the Fronting Bank hereby authorizes the Administrative Agent to set off and
apply any and all amounts at any time owing to such Lender or the Fronting Bank,
as the case may be, under this Agreement or any other Loan Document against any
amount due to the Administrative Agent under this clause (ii); provided that,
for the avoidance of doubt, the Borrower’s Obligations under this Agreement or
any other Loan Document shall not be increased as a result of such set off. The
agreements in this clause (ii) shall survive the resignation and/or replacement
of the Administrative Agent, any assignment of rights by, or the replacement of,
a Lender or the Fronting Bank, the termination of the Aggregate Commitments and
the repayment, satisfaction or discharge of all other Obligations.
     (d) Evidence of Payments. Upon request by the Borrower or the
Administrative Agent, as the case may be, after any payment of Taxes by the
Borrower or by the Administrative Agent to a Governmental Authority as provided
in this Section 3.01, the Borrower shall deliver to the Administrative Agent or
the Administrative Agent shall deliver to the Borrower, as the case may be, the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment or other evidence of such payment reasonably
satisfactory to the Borrower or the Administrative Agent, as the case may be.
     (e) Status of Lenders; Tax Documentation. (i) Each Lender and each Fronting
Bank that is a “United States person” within the meaning of Section 7701(a)(30)
of the Code shall on or prior to the date such Lender or Fronting Bank becomes a
party to this Agreement or any Loan Document deliver to the Borrower and the
Administrative Agent two completed and executed originals of IRS Form W-9 (or
any successor form) or such other documentation or information prescribed by
applicable Law or reasonably requested by the Borrower or the Administrative
Agent certifying that such Lender or Fronting Bank, as the case may be, is a
United States person and is entitled to an exemption from U.S. backup
withholding tax and information reporting with respect to all payments made
pursuant to this Agreement and the Loan Documents.
     (ii) Each Lender and each Fronting Bank that is not a “United States
person” within the meaning of Section 7701(a)(30) of the Code (a “Non-U.S.
Lender”) shall, on or prior to the date such Non-U.S. Lender becomes a party to
this Agreement or any Loan Document, deliver to the Borrower and the
Administrative Agent (A) two properly completed and duly executed originals of
IRS Form W-8BEN (claiming and certifying

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that such Lender or Fronting Bank is entitled to a complete exemption from the
withholding of United States federal income tax under an applicable tax treaty),
IRS Form W-8ECI (claiming and certifying that such Lender or Fronting Bank is
entitled to a complete exemption from United States withholding tax because the
income is effectively connected with a U.S. trade or business) or, in either
case, any successor form prescribed by the IRS, (B) in the case of a Non-U.S.
Lender claiming exemption from the withholding of United States federal income
tax under section 871(h) or 881(c) of the Code with respect to payments of
“portfolio interest,” a certificate representing that such Non-U.S. Lender is
not (1) a “bank” within the meaning of Section 881(c) of the Code or an
Affiliate of such a “bank,” (2) a ten-percent shareholder of the Borrower
(within the meaning of section 871(h)(3)(B) of the Code), or (3) a controlled
foreign corporation related to the Borrower (within the meaning of section
864(d)(4) of the Code), and a Form W-8BEN (or any successor form prescribed by
the IRS), or (C) any other form or document (including any supplementary
documentation) prescribed by applicable Law and reasonably requested by Borrower
that is required to establish that such Lender or Fronting Bank is entitled to a
complete exemption from United States federal withholding tax; provided,
however, that clause (C) of this paragraph shall apply to all Lenders and
Fronting Banks.
     (iii) Each Non-U.S. Lender shall provide, promptly upon the reasonable
demand of the Borrower or the Administrative Agent, any information, form or
document, accurately completed and in a manner reasonably satisfactory to the
requesting party, that may be required and reasonably requested in order to
allow the requesting party to make a payment under this Agreement or the Loan
Documents without any deduction or withholding for or on account of any Tax
otherwise required to be withheld or assessed under FATCA and shall (and shall
cause other persons acting on its behalf to) comply with any information
gathering and reporting requirements (including entering into any agreement with
the IRS), in each case, that are required to obtain a complete exemption from
any U.S. withholding taxes with respect to payments received by or on behalf of
such Non-U.S. Lender.
     (iv) Each Lender, the Fronting Bank and each Non-U.S. Lender agree that it
shall promptly deliver to the Borrower and Administrative Agent any new or
revised forms required under this Section 3.01(e) upon the obsolescence or
invalidity of any form previously delivered pursuant to this Section 3.01(e).
Each Lender, the Fronting Bank and each Non-U.S. Lender (and, in each case, any
assignee or Participant) shall (A) promptly notify the Borrower and the
Administrative Agent at any time it determines that it is no longer in a
position to claim a complete exemption from U.S. federal withholding taxes or is
no longer in a position to provide a form or certificate provided to the
Borrower or Administrative Agent pursuant to this Section 3.01(e) (including the
inability to provide any such forms or certificates in the future) and of any
change in circumstances which would modify or render invalid any claimed
complete exemption from any withholding taxes, and (B) take such steps as shall
not be materially disadvantageous to it, in the reasonable judgment of such
Lender, the Fronting Bank or Non-U.S. Lender, and as may be reasonably necessary
(including the re-designation of its Lending Office) to avoid any requirement of
applicable Laws of any jurisdiction that the

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Borrower or the Administrative Agent make any withholding or deduction for taxes
from amounts payable to such Lender, the Fronting Bank, or Non-U.S. Lender.
     (f) If the Borrower determines in its sole discretion that a reasonable
basis exists for contesting an Indemnified Tax or Other Tax, the Administrative
Agent and each Lender (including any Non-U.S. Lender and any relevant assignee
or Participant) shall reasonably cooperate with the Borrower in challenging such
Indemnified Tax or Other Tax.
     (g) 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 or the Fronting Bank, or have any obligation to pay
to any Lender or the/ Fronting Bank, any refund of Taxes withheld or deducted
from funds paid for the account of such Lender or the Fronting Bank, as the case
may be. If the Administrative Agent, any Lender or the Fronting Bank determines,
in its reasonable discretion, that it has received a refund of any Indemnified
Taxes or Other Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this
Section 3.01, it shall pay to the Borrower an amount equal to such refund (but
only to the extent of indemnity payments made, or additional amounts paid, by
the Borrower under this Section 3.01 with respect to the Indemnified Taxes or
Other Taxes giving rise to such refund), net of all out-of-pocket expenses
incurred by the Administrative Agent, such Lender or the Fronting Bank, as the
case may be, and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund), provided that the Borrower,
upon the request of the Administrative Agent, such Lender or the Fronting Bank,
agrees to repay the amount paid over to the Borrower (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent, such Lender or the Fronting Bank in the event the
Administrative Agent, such Lender or the Fronting Bank is required to repay such
refund to such Governmental Authority, provided, further, however, that the
Borrower shall not have any obligation to indemnify the Administrative Agent,
any Lender or the Fronting Bank, as the case may be, for any penalties, interest
or other charges to the extent that such interest, penalties or other charges
are attributable to the failure of the Administrative Agent, any Lender or the
Fronting Bank, as the case may be, to timely notify the Borrower of the
incurrence of any such Taxes. This subsection shall not be construed to require
the Administrative Agent, any Lender or the Fronting Bank to make available its
tax returns (or any other information relating to its Taxes that it deems
confidential) to the Borrower or any other Person.
     (h) For the avoidance of doubt, reference to Lender (and Non U.S. Lender)
include any successors thereto and any assignee of any interest or rights under
this Agreement or the Loan Documents.
     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 Loans
whose interest is determined by reference to the Eurodollar Rate, or to
determine or charge interest rates based upon the Eurodollar 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 in the London
interbank market, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, (i) any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Loans to

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Eurodollar Rate Loans shall be suspended, and (ii) if such notice asserts the
illegality of such Lender making or maintaining Base Rate Loans the interest
rate on which is determined by reference to the Eurodollar Rate component of the
Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if
necessary to avoid such illegality, be determined by the Administrative Agent
without reference to the Eurodollar Rate component of the Base Rate, in each
case until such Lender notifies the Administrative Agent and the Borrower that
the circumstances giving rise to such determination no longer exist. Upon
receipt of such notice, (x) the Borrower shall, upon demand from such Lender
(with a copy to the Administrative Agent), prepay or, if applicable, convert all
Eurodollar Rate Loans of such Lender to Base Rate Loans (the interest rate on
which Base Rate Loans of such Lender shall, if necessary to avoid such
illegality, be determined by the Administrative Agent without reference to the
Eurodollar Rate component of the Base Rate), either on the last day of the
Interest Period therefor, if such Lender may lawfully continue to maintain such
Eurodollar Rate Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such Eurodollar Rate Loans and (y) if such notice
asserts the illegality of such Lender determining or charging interest rates
based upon the Eurodollar Rate, the Administrative Agent shall during the period
of such suspension compute the Base Rate applicable to such Lender without
reference to the Eurodollar Rate component thereof until the Administrative is
advised in writing by such Lender that it is no longer illegal for such Lender
to determine or charge interest rates based upon the Eurodollar Rate. Upon any
such prepayment or conversion, the Borrower shall also pay accrued interest on
the amount so prepaid or converted.
     3.03 Inability to Determine Rates. If the Required Lenders determine that
for any reason in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the London interbank eurodollar market for the applicable
amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and
reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan or in
connection with an existing or proposed Base Rate Loan, or (c) the Eurodollar
Rate for any requested Interest Period with respect to a proposed Eurodollar
Rate Loan does not adequately and fairly reflect the cost to such Lenders of
funding such Loan, the Administrative Agent will promptly so notify the Borrower
and each Lender. Thereafter, (x) the obligation of the Lenders to make or
maintain Eurodollar Rate Loans shall be suspended, and (y) in the event of a
determination described in the preceding sentence with respect to the Eurodollar
Rate component of the Base Rate, the utilization of the Eurodollar Rate
component in determining the Base Rate shall be suspended, in each case until
the Administrative Agent (upon the instruction of the Required Lenders) revokes
such notice. Upon receipt of such notice, the Borrower may revoke any pending
request for a Borrowing of, conversion to or continuation of Eurodollar Rate
Loans or, failing that, will be deemed to have converted such request into a
request for a Borrowing of Base Rate Loans in the amount specified therein.
     3.04 Increased Costs; Reserves on Eurodollar 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

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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 the Fronting
Bank; or
     (ii) impose on any Lender or the Fronting Bank or the London interbank
market any other condition, cost or expense affecting this Agreement or
Eurodollar Rate Loans made by such Lender or any Letter of Credit or
participation therein other than with respect to Taxes, which shall be governed
by Section 3.01;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Loan the interest on which is determined by
reference to the Eurodollar Rate (or of maintaining its obligation to make any
such Loan), or to increase the cost to such Lender or the 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 the Fronting Bank
hereunder (whether of principal, interest or any other amount) then, upon
request of such Lender or the Fronting Bank, the Borrower will pay to such
Lender or the Fronting Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or the Fronting Bank, as the case may be,
for such additional costs incurred or reduction suffered.
     (b) Capital Requirements. If any Lender or the Fronting Bank determines
that any Change in Law affecting such Lender or the Fronting Bank or any Lending
Office of such Lender or such Lender’s or the Fronting Bank’s holding company,
if any, regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender’s or the Fronting Bank’s capital or on the
capital of such Lender’s or the 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 the Fronting Bank, to a level below that which such Lender
or the Fronting Bank or such Lender’s or the Fronting Bank’s holding company
could have achieved but for such Change in Law (taking into consideration such
Lender’s or the Fronting Bank’s policies and the policies of such Lender’s or
the Fronting Bank’s holding company with respect to capital adequacy), then from
time to time the Borrower will pay to such Lender or the Fronting Bank, as the
case may be, such additional amount or amounts as will compensate such Lender or
the Fronting Bank or such Lender’s or the Fronting Bank’s holding company for
any such reduction suffered.
     (c) Certificates for Reimbursement. A certificate of a Lender or the
Fronting Bank setting forth the amount or amounts necessary to compensate such
Lender or the 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 Borrower
shall be conclusive absent manifest error. The Borrower shall pay such Lender or
the 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 the
Fronting Bank to demand compensation pursuant to the foregoing provisions of
this Section shall not constitute a waiver of such Lender’s or the Fronting
Bank’s right to demand such compensation, provided that the Borrower shall not
be required to compensate a Lender or the Fronting Bank pursuant to the
foregoing provisions of this Section for any increased costs incurred or
reductions

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suffered more than nine months prior to the date that such Lender or the
Fronting Bank, as the case may be, notifies the Borrower of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s or the
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) Reserves on Eurodollar Rate Loans. The Borrower shall pay to each
Lender, 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 Eurodollar 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), which shall
be due and payable on each date on which interest is payable on such Loan,
provided the Borrower shall have received at least 10 days’ prior notice (with a
copy to the Administrative Agent) of such additional interest from such Lender.
If a Lender fails to give notice 10 days prior to the relevant Interest Payment
Date, such additional interest shall be due and payable 10 days from receipt of
such notice.
     3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the 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 Loan other
than a Base 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 Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower; or
     (c) any assignment of a Eurodollar Rate Loan on a day other than the last
day of the Interest Period therefor as a result of a request by the Borrower
pursuant to Section 10.13;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The 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 Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan was
in fact so funded.
     3.06 Mitigation Obligations; Replacement of Lenders.

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     (a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or the Borrower is required to pay any
additional amount to any Lender (including any assignee or for the benefit of a
Participant), the Administrative Agent, the Fronting Bank, or any Governmental
Authority for the account of any Lender, the Administrative Agent or the
Fronting Bank pursuant to Section 3.01, or if any Lender gives a notice pursuant
to Section 3.02, then such Lender, the Administrative Agent or the Fronting Bank
shall, as applicable, use reasonable efforts to designate a different Lending
Office for funding or booking its Loans hereunder (or, in the case of the
Administrative Agent, a different office for administration of this Agreement)
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, the Administrative
Agent or the 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, the
Administrative Agent or the Fronting Bank, as the case may be, to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender, the Administrative Agent or the Fronting Bank, as the case may be. The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any
Lender, the Administrative Agent or the 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 Borrower is required to pay any additional amount to any
Lender (including any assignee or for the benefit of a Participant) or any
Governmental Authority for the account of any Lender pursuant to Section 3.01,
the Borrower may replace such Lender in accordance with Section 10.13.
     3.07 Survival. All of the Borrower’s obligations under this Article III
shall survive termination of the Aggregate Commitments, repayment of all other
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 the Fronting
Bank and each Lender to make its initial Credit Extension 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 telecopies (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
Borrower, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance satisfactory to the Administrative Agent and each of the Lenders:
     (i) executed counterparts of this Agreement, sufficient in number for
distribution to the Administrative Agent, each Lender and the Borrower;

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     (ii) a Note executed by the Borrower in favor of each Lender requesting a
Note;
     (iii) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of the Borrower
as the Administrative Agent may require 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 Loan Documents;
     (iv) such documents and certifications as the Administrative Agent may
reasonably require to evidence that the Borrower is duly organized or formed,
and that the Borrower is validly existing, in good standing and qualified to
engage in business in each jurisdiction where its ownership, lease or operation
of properties or the conduct of its business requires such qualification, except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect;
     (v) favorable opinions of Dewey & LeBoeuf LLP, counsel to the Borrower, and
Elliott S. Orol, in-house counsel to the Borrower, addressed to the
Administrative Agent and each Lender, as to the matters set forth in Exhibit E
and such other matters concerning the Borrower and the Loan Documents as the
Required Lenders may reasonably request;
     (vi) a certificate of a Responsible Officer of the Borrower either
(A) attaching copies of all consents, licenses and approvals required in
connection with the execution, delivery and performance by the Borrower and the
validity against the Borrower of the Loan Documents to which it is a party, and
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;
     (vii) a certificate signed by a Responsible Officer of the Borrower
certifying (A) that the conditions specified in Sections 4.02(a) and (b) have
been satisfied, and (B) that there has been no event or circumstance since the
date of the Audited Financial Statements that has had or could be reasonably
expected to have, either individually or in the aggregate, a Material Adverse
Effect;
     (viii) a duly completed Compliance Certificate as of the last day of the
fiscal quarter of the Borrower ended on March 31, 2010, signed by a Responsible
Officer of the Borrower;
     (ix) the Audited Financial Statements (which shall be unqualified), the
Projections and the most recently filed Statutory Statements for each Material
Subsidiary;
     (x) each Material Subsidiary shall have an A- stable Financial Strength
Rating; and

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     (xi) such other assurances, certificates, documents, consents or opinions
as the Administrative Agent, the Fronting Bank or the Required Lenders
reasonably may require.
     (b) Any fees required to be paid on or before the Closing Date shall have
been paid.
     (c) Unless waived by the Administrative Agent, the Borrower shall have paid
all 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 Borrower and the
Administrative Agent).
     (d) The Closing Date shall have occurred on or before May 28, 2010.
     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 Eurodollar Rate
Loans) is subject to the following conditions precedent:
     (a) The representations and warranties of the Borrower contained in
Article V or any other Loan Document, or which are contained in any document
furnished at any time under or in connection herewith or therewith, shall be
true and correct 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 as of such earlier date, and
except that for purposes of this Section 4.02, the representations and
warranties contained in subsections (a), (b) and (c) of Section 5.05 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) After giving effect to such Credit Extension, the Borrower will be in
compliance with Sections 7.01(a) and (b) calculated as of the date of such
Credit Extension, rather than as of the end of the immediately preceding fiscal
quarter.
     (d) The Administrative Agent and, if applicable, the Applicable Issuing
Party shall have received a Request for Credit Extension in accordance with the
requirements hereof.

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     Each Request for Credit Extension (other than a Loan Notice requesting only
a conversion of Loans to the other Type or a continuation of Eurodollar Rate
Loans) submitted by the Borrower shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a), (b) and (c) have
been satisfied on and as of the date of the applicable Credit Extension.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
     The Borrower represents and warrants to the Administrative Agent and the
Lenders that:
     5.01 Existence, Qualification and Power. The Borrower and each Subsidiary
thereof (a) is duly organized or formed, validly existing and, as applicable, in
good standing under the Laws of the jurisdiction of its incorporation or
organization, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own or
lease its assets and carry on its business and (ii) in the case of the Borrower,
execute, deliver and perform its obligations under the Loan Documents, and
(c) is duly qualified and is licensed and, as applicable, in good standing under
the Laws of each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such qualification or
license; except in each case referred to in clause (b)(i) or (c), to the extent
that failure to do so could not reasonably be expected to have a Material
Adverse Effect.
     5.02 Authorization; No Contravention. The execution, delivery and
performance by the Borrower of each Loan Document have been duly authorized by
all necessary corporate or other organizational action, and do not and will not
(a) contravene the terms of any of its Organization Documents; (b) conflict with
or result in any breach or contravention of, or the creation of any Lien under,
or require any payment to be made under (i) any Contractual Obligation to which
the Borrower is a party or affecting the Borrower or the properties of the
Borrower or any of its Subsidiaries or (ii) any order, injunction, writ or
decree of any Governmental Authority or any arbitral award to which the Borrower
or its property is subject; or (c) violate any Law.
     5.03 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, the Borrower of this Agreement or any other Loan Document.
     5.04 Binding Effect. This Agreement has been, and each other Loan Document,
when delivered hereunder, will have been, duly executed and delivered by the
Borrower. This Agreement constitutes, and each other Loan Document when so
delivered will constitute, a legal, valid and binding obligation of the
Borrower, enforceable against the Borrower that is party thereto in accordance
with its terms.
     5.05 Financial Statements; No Material Adverse Effect.
     (a) The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of the Borrower and its Subsidiaries as of the

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date thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein; and (iii) show all material
indebtedness and other liabilities, direct or contingent, of the Borrower and
its Subsidiaries as of the date thereof, including liabilities for taxes,
material commitments and Indebtedness.
     (b) Since the date of the Audited Financial Statements, there has been no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a Material Adverse Effect.
     (c) The Statutory Financial Statements listed on Schedule 5.05 and
delivered to each Lender prior to the execution and delivery of this Agreement
are the most recently filed Statutory Financial Statements filed by each
Material Subsidiary, are complete and correct in all material respects and
present fairly in accordance with SAP the financial position of such Material
Subsidiary for the period then ended and were in material compliance with
applicable Law when filed.
     (d) The Projections were prepared in good faith on the basis of the
assumptions stated therein, which assumptions were fair in light of the
conditions existing at the time of delivery of such forecasts, and represented,
at the time of delivery, the Borrower’s best estimate of its future financial
condition and performance.
     5.06 Litigation. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of the Borrower, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against the Borrower or any of its Subsidiaries or against any
of their properties or revenues that (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated
hereby, or (b) except as specifically disclosed in Schedule 5.06, either
individually or in the aggregate, if determined adversely, could reasonably be
expected to have a Material Adverse Effect.
     5.07 No Default. Neither the Borrower nor any Subsidiary is in default
under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.
     5.08 Ownership of Property; Liens. Each of the Borrower and each Subsidiary
has good record and marketable title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary conduct of its
business, except for such defects in title as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The
property of the Borrower and its Subsidiaries is subject to no Liens, other than
Liens permitted by Section 7.01.
     5.09 Insurance. The properties of the Borrower and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Borrower, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies

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engaged in similar businesses and owning similar properties in localities where
the Borrower or the applicable Subsidiary operates.
     5.10 Taxes. The Borrower and its Subsidiaries have filed all Federal, state
and other material tax returns and reports required to be filed, and have paid
all material Federal, state and other material taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings diligently conducted and for
which adequate reserves have been provided in accordance with GAAP. There is no
proposed tax assessment against the Borrower or any Subsidiary that would, if
made, have a Material Adverse Effect. Neither the Borrower nor any Subsidiary
thereof is party to any tax sharing agreement other than as disclosed on
Schedule 5.10.
     5.11 ERISA Compliance.
     (a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state laws. Each Pension Plan
that is intended to be a qualified plan under Section 401(a) of the Code has
received a favorable determination letter from the Internal Revenue Service to
the effect that the form of such Plan is qualified under Section 401(a) of the
Code and the trust related thereto has been determined by the Internal Revenue
Service to be exempt from federal income tax under Section 501(a) of the Code,
or an application for such a letter is currently being processed by the Internal
Revenue Service. To the best knowledge of the Borrower, nothing has occurred
that would prevent or cause the loss of such tax-qualified status.
     (b) There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
     (c) (i) No ERISA Event has occurred, and neither the Borrower nor any ERISA
Affiliate is aware of any fact, event or circumstance that could reasonably be
expected to constitute or result in an ERISA Event with respect to any Pension
Plan; (ii) the Borrower and each ERISA Affiliate has met all applicable
requirements under the Pension Funding Rules in respect of each Pension Plan,
and no waiver of the minimum funding standards under the Pension Funding Rules
has been applied for or obtained; (iii) as of the most recent valuation date for
any Pension Plan, the funding target attainment percentage (as defined in
Section 430(d)(2) of the Code) is 60% or higher and neither the Borrower nor any
ERISA Affiliate knows of any facts or circumstances that could reasonably be
expected to cause the funding target attainment percentage for any such plan to
drop below 60% as of the most recent valuation date; (iv) neither the Borrower
nor any ERISA Affiliate has incurred any liability to the PBGC other than for
the payment of premiums, and there are no premium payments which have become due
that are unpaid; (v) neither the Borrower nor any ERISA Affiliate has engaged in
a transaction that could be subject to Section 4069 or Section 4212(c) of ERISA;
and (vi) no Pension Plan has been terminated by the plan administrator thereof
nor by the PBGC, and no event or circumstance has

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occurred or exists that could reasonably be expected to cause the PBGC to
institute proceedings under Title IV of ERISA to terminate any Pension Plan.
     (d) Neither the Borrower or any ERISA Affiliate maintains or contributes
to, or has any unsatisfied obligation to contribute to, or liability under, any
active or terminated Pension Plan other than Pension Plans not otherwise
prohibited by this Agreement.
     5.12 Subsidiaries; Equity Interests. As of the Closing Date, (a) the
Borrower has no Subsidiaries other than those specifically disclosed on
Schedule 5.12 and such schedule correctly indicates which Subsidiaries are
Insurance Subsidiaries and Material Subsidiaries, (b) all of the outstanding
Equity Interests in such Subsidiaries have been validly issued, are fully paid
and non-assessable and are owned by the Person and in the amounts specified on
Schedule 5.12 free and clear of all Liens and (c) the Borrower and its
Subsidiaries have no equity investments in any other corporation or entity which
represent 10% or more of the total equity interests of such corporation or
entity other than those specifically disclosed on Schedule 5.12.
     5.13 Margin Regulations; Investment Company Act.
     (a) The Borrower is not engaged and will not engage, principally or as one
of its important activities, in the business of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the FRB), or extending
credit for the purpose of purchasing or carrying margin stock.
     (b) The Borrower is not and is not required to be registered as an
“investment company” under the Investment Company Act of 1940.
     5.14 Disclosure. The Borrower has disclosed to the Administrative Agent and
the Lenders (i) all material agreements, instruments and corporate or other
restrictions to which it or any of its Subsidiaries is subject which, if the
Borrower or any of its Subsidiaries were to default thereunder, could reasonably
be expected to result in a Material Adverse Effect and (ii) all other matters
known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. No report, financial statement,
certificate or other information furnished (whether in writing or orally) by or
on behalf of the Borrower to the Administrative Agent or any Lender in
connection with the transactions contemplated hereby and the negotiation of this
Agreement or delivered hereunder or under any other Loan Document (in each case,
as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
     5.15 Compliance with Laws. The Borrower and each Subsidiary thereof is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by

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appropriate proceedings diligently conducted or (b) the failure to comply
therewith, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
     5.16 Taxpayer Identification Number. The Borrower’s true and correct U.S.
taxpayer identification number is set forth on Schedule 10.02.
     5.17 Solvency. On the Closing Date, (a) the fair value of the assets of the
Borrower, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair value of the
property of the Borrower will be greater than the amount that will be required
to pay the probable liability of their debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) the Borrower will be able to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debt and liabilities
become absolute and matured; and (d) the Borrower will not have unreasonably
small capital with which to conduct the business in which it is engaged as such
business is now conducted and is proposed to be conducted following the Closing
Date.
ARTICLE VI. AFFIRMATIVE COVENANTS
     So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Borrower shall, and shall (except in the
case of the covenants set forth in Sections 6.01, 6.02, and 6.03) cause each
Subsidiary to:
     6.01 Financial Statements. Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:
     (a) as soon as available, but in any event within 90 days after the end of
each fiscal year of the Borrower (commencing with the fiscal year ended
December 31, 2010), a consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such fiscal year, and the related consolidated
statements of income or operations, changes in shareholders’ equity, and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and prepared in
accordance with GAAP, audited and accompanied by a report and opinion of an
independent certified public accountant of nationally recognized standing
reasonably acceptable to the Required Lenders, which report and opinion shall be
prepared in accordance with generally accepted auditing standards and shall not
be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit;
     (b) as soon as available, but in any event within 45 days after the end of
each of the first three fiscal quarters of each fiscal year of the Borrower
(commencing with the fiscal quarter ended March 31, 2010), a consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal
quarter, the related consolidated statements of income or operations for such
fiscal quarter and for the portion of the Borrower’s fiscal year then ended, and
the related consolidated statements of changes in shareholders’ equity, and cash
flows for the portion of the Borrower’s fiscal year then ended, in each case
setting forth in comparative form, as applicable, the figures for the
corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail, certified by the
chief executive

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officer, chief financial officer, treasurer or controller of the Borrower as
fairly presenting the financial condition, results of operations, shareholders’
equity and cash flows of the Borrower and its Subsidiaries in accordance with
GAAP, subject only to normal year-end audit adjustments and the absence of
footnotes; and
     (c) Within five (5) days after the date filed with the Applicable Insurance
Regulatory Authority (but in any event within 125 days after the end of each
fiscal year of each Material Subsidiary), a copy of the Quarterly Statutory
Statement or Annual Statement, as applicable, of such Material Subsidiary for
such period, if any, required by such Applicable Insurance Regulatory Authority
to be filed, each of which Statutory Financial Statements delivered to be
prepared in accordance with SAP and accompanied by the certification of the
chief financial officer or chief executive officer of such Material Subsidiary
that such financial statement is complete and correct in all material respects
and presents fairly in accordance with SAP the financial position of such
Material Subsidiary for the period then ended.
As to any information contained in materials furnished pursuant to
Section 6.02(c), the Borrower shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in clauses (a) and (b) above at the times specified therein.
     6.02 Certificates; Other Information. Deliver to the Administrative Agent
and each Lender, in form and detail satisfactory to the Administrative Agent and
the Required Lenders:
     (a) concurrently with the delivery of the financial statements referred to
in Sections 6.01(a) and (b) (commencing with the delivery of the financial
statements for the fiscal quarter ended March 31, 2010) a duly completed
Compliance Certificate signed by the chief executive officer, chief financial
officer, treasurer or controller of the Borrower (which delivery may, unless the
Administrative Agent, or a Lender requests executed originals, be by electronic
communication including fax or email and shall be deemed to be an original
authentic counterpart thereof for all purposes);
     (b) promptly after any request by the Administrative Agent or any Lender,
copies of any detailed audit reports, management letters or recommendations
submitted to the board of directors (or the audit committee of the board of
directors) of the Borrower by independent accountants in connection with the
accounts or books of the Borrower or any Subsidiary, or any audit of any of
them;
     (c) promptly after the same are available, copies of each annual report,
proxy or financial statement or other report or communication sent to the
stockholders of the Borrower, and copies of all annual, regular, periodic and
special reports and registration statements which the Borrower may file or be
required to file with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934, and not otherwise required to be delivered to the
Administrative Agent pursuant hereto;
     (d) promptly, and in any event within five (5) Business Days after receipt
thereof by the Borrower or any Subsidiary thereof, copies of each notice or
other correspondence received from the SEC (or comparable agency in any
applicable non-U.S. jurisdiction) concerning any

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investigation or possible investigation or other inquiry by such agency
regarding financial or other operational results of the Borrower or any
Subsidiary thereof;
     (e) within five (5) Business Days of such notice, notice of proposed or
actual suspension, termination or revocation of any material License of any
Material Subsidiary by any Applicable Regulatory Insurance Authority or of
receipt of notice from any Applicable Regulatory Insurance Authority notifying
the Borrower or any Material Subsidiary of a hearing relating to such a
suspension, termination or revocation, including any request by an Applicable
Regulatory Insurance Authority which commits the Borrower or any Material
Subsidiary to take, or refrain from taking, any action or which otherwise
materially and adversely affects the authority of the Borrower or any Material
Subsidiary to conduct its business;
     (f) within five (5) Business Days of such notice, notice of any pending or
threatened investigation or regulatory proceeding (other than routine periodic
investigations or reviews) by any Applicable Regulatory Insurance Authority
concerning the business, practices or operations of the Borrower or any Material
Subsidiary;
     (g) promptly, notice of any actual or, to the best of the Borrower’s
knowledge, proposed material changes in the Insurance Code governing the
investment or dividend practices of any Material Subsidiary;
     (h) promptly, notice of any material change in the accounting or financial
reporting practices of the Borrower or any Material Subsidiary; and.
     (i) promptly, such additional information regarding the business, financial
or corporate affairs of the Borrower or any Subsidiary, or compliance with the
terms of the Loan Documents, as the Administrative Agent or any Lender may from
time to time reasonably request.
     Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(c) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet at the website address listed on Schedule 10.02; or
(ii) on which such documents are posted on the Borrower’s behalf on an Internet
or intranet website, if any, 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: (i) the Borrower shall deliver paper
copies of such documents to the Administrative Agent or any Lender upon its
request to the Borrower to deliver such paper copies until a written request to
cease delivering paper copies is given by the Administrative Agent or such
Lender and (ii) the Borrower shall notify the Administrative Agent and each
Lender (by telecopier or electronic mail) of the posting of any such documents
and provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents. 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 Borrower with any such request by a Lender for
delivery, and each Lender

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shall be solely responsible for requesting delivery to it or maintaining its
copies of such documents.
     The Borrower hereby acknowledges that (a) the Administrative Agent and/or
the Arranger will make available to the Lenders and the Fronting Bank materials
and/or information provided by or on behalf of the Borrower hereunder
(collectively, “Borrower Materials”) by posting the Borrower Materials on
IntraLinks 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 Borrower or its
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 Borrower hereby agrees 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,” the Borrower shall be deemed to have authorized the
Administrative Agent, the Arranger, the Fronting Bank and the Lenders to treat
such Borrower Materials as not containing any material non-public information
with respect to the Borrower 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.”
     6.03 Notices. Promptly notify the Administrative Agent and each Lender:
     (a) of the occurrence of any Default;
     (b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including (i) breach or non-performance of,
or any default under, a Contractual Obligation of the Borrower or any
Subsidiary; (ii) any dispute, litigation, investigation, proceeding or
suspension between the Borrower or any Subsidiary and any Governmental
Authority; or (iii) the commencement of, or any material development in, any
litigation or proceeding affecting the Borrower or any Subsidiary, including
pursuant to any Environmental Laws; and
     (c) of the occurrence of any ERISA Event.
     Each notice pursuant to this Section 6.03, shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein and stating what action the Borrower has taken
and proposes to take with respect thereto. Each notice pursuant to
Section 6.03(a) shall describe with particularity any and all provisions of this
Agreement and any other Loan Document that have been breached.
     6.04 Payment of Obligations. Pay and discharge as the same shall become due
and payable, all its obligations and liabilities, including (a) all material tax
liabilities, assessments

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and governmental charges or levies upon it or its properties or assets, unless
the same are being contested in good faith by appropriate proceedings diligently
conducted and adequate reserves in accordance with GAAP are being maintained by
the Borrower or such Subsidiary with respect to such liabilities; (b) all lawful
claims which, if unpaid, would by law become a Lien upon its property; and
(c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
     6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain in
full force and effect its legal existence and good standing under the Laws of
the jurisdiction of its organization except in a transaction permitted by
Section 7.03 or 7.04; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.
     6.06 Maintenance of Properties. (a) Maintain, preserve and protect all of
its material properties and equipment necessary in the operation of its business
in good working order and condition, ordinary wear and tear excepted; and
(b) make all necessary repairs thereto and renewals and replacements thereof
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
     6.07 Maintenance of Insurance. Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrower, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons.
     6.08 Compliance with Laws. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or
(b) the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
     6.09 Books and Records. (a) Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Borrower or such Subsidiary, as the case may be; and
(b) maintain such books of record and account in material conformity with all
applicable requirements of any Governmental Authority having regulatory
jurisdiction over the Borrower or such Subsidiary, as the case may be.
     6.10 Inspection Rights. Permit representatives and independent contractors
of the Administrative Agent and each Lender to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all
at the expense of the Borrower and at such reasonable times during normal

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business hours and as often as may be reasonably desired but no more than three
times a year unless an Event of Default exists, upon reasonable advance notice
to the Borrower; provided, however, that when an Event of Default exists the
Administrative Agent or any Lender (or any of their respective representatives
or independent contractors) may do any of the foregoing at the expense of the
Borrower at any time during normal business hours and without advance notice.
     6.11 Use of Proceeds. Use the proceeds of the Credit Extensions for general
corporate purposes (including acquisitions) not in contravention of any Law or
of any Loan Document.
ARTICLE VII. NEGATIVE COVENANTS
     So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Borrower, without the prior written consent
of the Required Lenders, shall not, nor shall it permit any Subsidiary to,
directly or indirectly:
     7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, other
than the following:
     (a) Liens pursuant to any Loan Document;
     (b) Liens existing on the date hereof and listed on Schedule 7.01 and any
renewals or extensions thereof, provided that (i) the property covered thereby
is not changed, (ii) the amount secured or benefited thereby is not increased
except as contemplated by Section 7.02(b), (iii) the direct or any contingent
obligor with respect thereto is not changed, and (iv) any renewal or extension
of the obligations secured or benefited thereby is permitted by Section 7.02(b);
     (c) Liens for taxes not yet due or which are being contested in good faith
and by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
     (d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or
other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person;
     (e) pledges or deposits in the ordinary course of business in connection
with workers’ compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;
     (f) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
     (g) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
and which do not in any case

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materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the applicable Person;
     (h) Liens securing judgments for the payment of money not constituting an
Event of Default under Section 8.01(h);
     (i) Liens securing Indebtedness permitted under Section 7.02(d); provided
that (i) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness and (ii) the Indebtedness secured thereby
does not exceed the cost or fair market value, whichever is lower, of the
property being acquired on the date of acquisition;
     (j) The filing of UCC financing statements as a precautionary measure in
connection with operating leases;
     (k) Liens on deposit and securities accounts that are imposed by law or
account opening documents;
     (l) Liens on invested assets pursuant to trust or other security
arrangements in connection with reinsurance policies or regulatory requirements
(for insurance licensing purposes); and
     (m) Liens not otherwise permitted under this Section 7.01 securing
Indebtedness provided that the amount of the Indebtedness secured thereby does
not exceed $25,000,000 at any time;
     provided, however, that no Lien shall be permitted to exist on the Equity
Interest in any Insurance Subsidiary.
     7.02 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness of the Borrower’s Subsidiaries, except:
     (a) Indebtedness under the Loan Documents;
     (b) Indebtedness outstanding on the date hereof and listed on
Schedule 7.02;
     (c) obligations (contingent or otherwise) existing or arising under any
Swap Contract, provided that (i) such obligations are (or were) entered into by
such Person in the ordinary course of business for the purpose of directly
mitigating risks associated with liabilities, commitments, investments, assets,
or property held or reasonably anticipated by such Person, or changes in the
value of securities issued by such Person, and not for purposes of speculation
or taking a “market view;” and (ii) such Swap Contract does not contain any
provision exonerating the non-defaulting party from its obligation to make
payments on outstanding transactions to the defaulting party;
     (d) Indebtedness in respect of capital leases and purchase money
obligations for fixed or capital assets within the limitations set forth in
Section 7.01(i); provided, however, that the aggregate amount of all such
Indebtedness at any one time outstanding shall not exceed $25,000,000;

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     (e) unsecured Indebtedness in an aggregate principal amount not to exceed
$25,000,000 at any time outstanding; and
     (f) Indebtedness owed by any Subsidiary to the Borrower or any of its
Subsidiaries.
     7.03 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or
into another Person, or make any Acquisition except that, so long as no Default
exists or would result therefrom:
     (a) any Subsidiary may merge with (i) the Borrower, provided that the
Borrower shall be the continuing or surviving Person, or (ii) any one or more
other Subsidiaries, provided that (A) when any Wholly-Owned Subsidiary is
merging with another Subsidiary, the Wholly-Owned Subsidiary shall be the
continuing or surviving Person and (B) if either of the Subsidiaries is directly
owned by the Borrower, the surviving entity must be directly owned by the
Borrower;
     (b) the Borrower or any Subsidiary may merge, consolidate or amalgamate
with another Person provided (i) if the Borrower is involved in the merger,
consolidation or amalgamation, the surviving company, must be organized in the
United States, (ii) if the merger, consolidation or amalgamation involves an
Insurance Subsidiary, restrictions on dividends in the jurisdiction of the
surviving company shall not be less favorable than such restrictions in the
jurisdiction of such Insurance Subsidiary, (iii) if any Wholly-Owned Subsidiary
is merging, consolidating or amalgamating with another Person, the surviving
company shall continue to be a Wholly-Owned Subsidiary after such merger,
consolidation or amalgamation; and (iv) the merger, consolidation or
amalgamation is not a hostile takeover;
     (c) any Subsidiary may Dispose of all or any or substantially all of its
assets (upon voluntary liquidation or otherwise) to one or more of the Borrower
or to other Subsidiaries; provided that if the transferor in such a transaction
is a Wholly-Owned Subsidiary, then the transferees must either be the Borrower
or one or more Wholly-Owned Subsidiaries; and
     (d) the Borrower or any Subsidiary may make Acquisitions.
     7.04 Dispositions. Make any Disposition or enter into any agreement to make
any Disposition, except:
     (a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;
     (b) Dispositions of assets invested in the ordinary course of business,
including, without limitation, securities, commodities, mutual funds and
Permitted Investments;
     (c) Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;
     (d) Dispositions of property by any Subsidiary to the Borrower or to a
Wholly-Owned Subsidiary;

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     (e) Dispositions permitted by Section 7.03; and
     (f) Dispositions by the Borrower and its Subsidiaries not otherwise
permitted under this Section 7.04; provided that (i) at the time of such
Disposition, no Default shall exist or would result from such Disposition and
(ii) the aggregate book value of all property Disposed of in reliance on this
clause (f) in any fiscal year shall not exceed 10% of Consolidated Net Worth.
     7.05 Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (including contingent or otherwise)
to do so (other than those permitted under Section 7.03(c) or Section 7.04(d))
except that so long as no Default shall have occurred and be continuing at the
time of any action described below or would result therefrom:
     (a) each Subsidiary (which for this purpose includes any trust or trusts
formed for the purposes of issuing trust preferred securities) may make
Restricted Payments to the Borrower and any other Person that owns an Equity
Interest in such Subsidiary, ratably according to their respective holdings of
the type of Equity Interest in respect of which such Restricted Payment is being
made;
     (b) the Borrower and each Subsidiary may declare and make dividend payments
or other distributions payable solely in the common stock or other common Equity
Interests of such Person;
     (c) the Borrower and each Subsidiary may purchase, redeem or otherwise
acquire Equity Interests issued by it with the proceeds received from the
substantially concurrent issue of new shares of its common stock or other common
Equity Interests;
     (d) the Borrower may declare or pay ordinary cash dividends to its
stockholders;
     (e) the Borrower may declare or make, directly or indirectly, extraordinary
dividends, stock repurchases and other extraordinary distributions (other than
ordinary dividends), provided that after giving effect to such extraordinary
dividend, stock repurchase or extraordinary distribution, the Debt to
Capitalization Ratio will be equal to or lower than 0.275:1.0; and
     (f) the Borrower and any Subsidiary may make any payment (even if such
payment is in the form of a Restricted Payment) to the Borrower or another
Subsidiary that is required to be made with respect to or in connection with the
terms of any Tax sharing, Tax allocation or other similar Tax arrangement or
agreement entered into among the Borrower and its Subsidiaries.
     7.06 Change in Nature of Business; Hedging. Engage in any material business
substantially different from those businesses conducted by the Borrower and its
Subsidiaries on the date hereof or any business substantially related or
incidental thereto or engage in speculative hedging.
     7.07 Transactions with Affiliates. Enter into any transaction of any kind
with any Affiliate of the Borrower, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
the Borrower or such Subsidiary as would be obtainable by the Borrower or such
Subsidiary at the time in a comparable arm’s length

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transaction with a Person other than an Affiliate, provided that the foregoing
restriction shall not apply to transactions between or among the Borrower and
any of its Wholly-Owned Subsidiaries or between and among any Wholly-Owned
Subsidiaries.
     7.08 Burdensome Agreements. Enter into any Contractual Obligation (other
than this Agreement or any other Loan Document) that (a) limits the ability
(i) of any Subsidiary to make Restricted Payments to the Borrower or to
otherwise transfer property to the Borrower or any other Subsidiary, (ii) of any
Subsidiary to Guarantee or grant Liens to secure Indebtedness of the Borrower or
(iii) of the Borrower to grant Liens to secure the Obligations; or (b) requires
the grant of a Lien to secure, or the Guarantee of, an obligation of such Person
if a Lien is granted to secure, or a Guarantee is made of, another obligation of
such Person; provided, however, that this Section shall not prohibit such
limitations existing under or by reason of (A) applicable Law, (B) this
Agreement or any other Loan Document, (C) customary provisions restricting
subletting or assignment in any lease governing any leasehold interest of the
Borrower or any of its Subsidiaries, (D) customary provisions restricting
assignment in any licensing agreement (in which the Borrower or any of its
Subsidiaries is the licensee) entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business, (E) restrictions and conditions
on the transfer of or granting of a Lien on any asset subject to a Lien
permitted by Section 7.01 solely to the extent any such negative pledge relates
to the property financed by or the subject of such Indebtedness,
(F) restrictions and conditions on the transfer of any asset pending the close
of the sale of such asset, (G) agreements entered into by an Insurance
Subsidiary with any Applicable Insurance Regulatory Authority, or (H) any Tax
sharing, Tax allocation, or other similar Tax arrangement or agreement entered
into among the Borrower and its Subsidiaries.
     7.09 Use of Proceeds. Use the proceeds of any Credit Extension, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry margin stock (within the meaning of Regulation U of the FRB)
or to extend credit to others for the purpose of purchasing or carrying margin
stock or to refund indebtedness originally incurred for such purpose.
     7.10 Financial Covenants.
     (a) Consolidated Net Worth. Permit Consolidated Net Worth as of the end of
any fiscal quarter to be less than the sum of (i) $787,900,000, (ii) an amount
equal to 50% of the Consolidated Net Income earned in each full fiscal quarter
ending after December 31, 2009 (with no deduction for a net loss in any such
fiscal quarter) and (iii) an amount equal to 50% of the aggregate increases in
Consolidated Net Worth of the Borrower and its Subsidiaries after the date
hereof by reason of the issuance and sale of Equity Interests of the Borrower or
any Subsidiary (other than issuances to the Borrower or a Wholly-Owned
Subsidiary), including upon any conversion of debt securities of the Borrower
into such Equity Interests.
     (b) Debt to Capitalization Ratio. Permit the Debt to Capitalization Ratio
as of the end of any fiscal quarter to be greater than 0.35:1.0.
     (c) Minimum Risk-Based Capital. Permit the Risk Based Capital Ratio of
Tower Insurance Company of New York as of any fiscal year end to be less than
175%.

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     (d) Minimum Statutory Surplus. Permit the Statutory Surplus of any Material
Subsidiary as of the end of any fiscal quarter to be less than the amount set
forth opposite such Material Subsidiary’s name on Schedule 7.10, as such
Schedule is amended pursuant to any Compliance Certificate in connection with
the addition of a new Material Subsidiary. If a Subsidiary becomes a Material
Subsidiary after the Closing Date, the minimum Statutory Surplus for such new
Material Subsidiary shall be an amount equal to 75% of such Subsidiary’s
Statutory Surplus as of the fiscal quarter end in which it became a Material
Subsidiary.
     7.11 Investments in Reciprocal Insurers. To (i) make any loans to or
purchase or redeem any Equity Interests in, (ii) incur contingent liabilities or
otherwise provide credit support (including granting a Lien on any of its
assets) for the Indebtedness of, or (iii) enter into any net worth maintenance
agreements with respect to, any Reciprocal Insurer except as required pursuant
to that certain Loan Agreement dated as of August 31, 2004 between Homeland
Insurance Company of New York, as lender, and Adirondack Insurance Exchange, as
borrower, as in effect on the date hereof, provided that the amount of any such
loans made after the date hereof shall not exceed $30,000,000.
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES
     8.01 Events of Default. Any of the following shall constitute an Event of
Default:
     (a) Non-Payment. The Borrower fails to pay (i) when and as required to be
paid herein, any amount of principal of any Loan or any L/C Obligation, or
(ii) within three days after the same becomes due, any interest on any Loan or
on any L/C Obligation, or any fee due hereunder, or (iii) within five days after
the same becomes due, any other amount payable hereunder or under any other Loan
Document; or
     (b) Specific Covenants. The Borrower fails to perform or observe any term,
covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05, or
Article VII; or
     (c) Other Defaults. The Borrower fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or
     (d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower or any Subsidiary herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith shall be incorrect or
misleading in any material respect when made or deemed made; or
     (e) Cross-Default. (i) The Borrower or any Material Subsidiary (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than the Threshold Amount, or (B) fails to observe
or perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or
relating thereto,

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or any other event occurs, the effect of which default or other event is to
cause, or to permit the holder or holders of such Indebtedness or the
beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf
of such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to be demanded or to become due
or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; or
(ii) there occurs under any Swap Contract an Early Termination Date (as defined
in such Swap Contract) resulting from (A) any event of default under such Swap
Contract as to which the Borrower or any Material Subsidiary is the Defaulting
Party (as defined in such Swap Contract) or (B) any Termination Event (as so
defined) under such Swap Contract as to which the Borrower or any Material
Subsidiary is an Affected Party (as so defined) and, in either event, the Swap
Termination Value owed by the Borrower or such Subsidiary as a result thereof is
greater than the Threshold Amount; or
     (f) Insolvency Proceedings, Etc. The Borrower or any of its Material
Subsidiaries institutes or consents to the institution of any proceeding under
any Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or
     (g) Inability to Pay Debts; Attachment. (i) The Borrower or any Material
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 30 days after its issue or levy; or
     (h) Judgments. There is entered against (i) the Borrower or any Material
Subsidiary one or more final judgments or orders for the payment of money in an
aggregate amount (as to all such judgments or orders) exceeding the Threshold
Amount (to the extent not covered by independent third-party insurance as to
which the insurer does not dispute coverage), or (ii) the Borrower or any
Material Subsidiary any one or more non-monetary final judgments that have, or
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and, in either case, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) there is a period
of 10 consecutive days during which a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, is not in effect; or
     (i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any

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installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of the
Threshold Amount; or
     (j) Invalidity of Loan Documents. Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder or thereunder or satisfaction in full of all the Obligations, ceases
to be in full force and effect; or the Borrower or any other Person contests in
any manner the validity or enforceability of any Loan Document; or the Borrower
denies that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan Document; or
     (k) Change of Control. There occurs any Change of Control; or
     (l) Change in Law. Any change is made in any Insurance Code which affects
the dividend practices of any Insurance Subsidiary and which is reasonably
likely to have a Material Adverse Effect on the ability of the Borrower to
perform its obligations under the Agreement and such circumstances shall
continue for 120 days; or
     (m) Insurance License. Any insurance license of the Borrower or any
Material Subsidiary is suspended, limited, terminated or not renewed which could
reasonably be expected to have a Material Adverse Effect.
     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:
     (a) declare the commitment of each Lender to make Loans and L/C Credit
Extensions and any obligation of the Fronting Bank 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, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan 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 the Borrower;
     (c) require that the Borrower Cash Collateralize the L/C Obligations (in an
amount equal to the then Outstanding Amount thereof); and
     (d) exercise on behalf of itself, the Lenders and the Fronting Bank all
rights and remedies available to it, the Lenders and the Fronting Bank under the
Loan Documents;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and L/C Extensions
and any obligation of the Fronting Bank to make L/C Credit Extensions shall
automatically terminate, the unpaid principal amount of all outstanding Loans
and all interest and other amounts as aforesaid shall automatically become due
and payable, and the obligation of the Borrower to Cash Collateralize the L/C
Obligations as aforesaid shall automatically become effective, in each case
without further act of the Administrative Agent or any Lender.

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     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 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 2.14 and 2.15, be applied by the Administrative Agent in the following
order:
     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;
     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 Bank (including fees,
charges and disbursements of counsel to the respective Lenders and the 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 Bank 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 Bank in proportion to the respective amounts described in this clause
Fourth held by them;
     Fifth, to the Administrative Agent for the account of the Fronting Bank and
the Lenders, to Cash Collateralize that portion of L/C Obligations comprised of
the aggregate undrawn amount of Letters of Credit to the extent not otherwise
Cash Collateralized by the Borrower pursuant to Sections 2.04 and 2.14; and
     Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Sections 2.03(c) and 2.14, 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 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 and the Fronting Bank
hereby irrevocably appoints Bank of America to act on its behalf as the
Administrative Agent hereunder and under the other Loan 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

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thereto. The provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders and the Fronting Bank, and the Borrower shall
not have rights as a third party beneficiary of any of such provisions.
     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, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the 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
Loan Documents. 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 Loan 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 Loan 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 Loan Document or applicable law; and
     (c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the 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 absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower, a
Lender or the Fronting Bank.
     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 Loan Document, (ii) the
contents of any certificate, report or other

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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 Loan 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 the Fronting Bank, the
Administrative Agent may presume that such compliance is satisfactory to such
Lender or the Fronting Bank unless the Administrative Agent shall have received
notice to the contrary from such Lender or the 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
Loan 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 Bank, the
L/C Administrator and the Borrower. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, subject to the approval
of the Borrower (unless an Event of Default has occurred and is continuing), 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 Administrator and the Fronting Bank, appoint a
successor Administrative Agent meeting the qualifications set forth above;
provided that if the Administrative Agent shall notify the 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

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be discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders or the Fronting Bank under any of
the Loan 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, the L/C Administrator and the 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 Loan Documents (if not already discharged therefrom as provided
above in this Section). The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
retiring Administrative Agent’s resignation hereunder and under the other Loan
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.
     (b) 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 Loan 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 the L/C Administrator to
effectively assume the obligations of the retiring Fronting Bank and the L/C
Administrator with respect to such Letters of Credit.
     9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender,
the L/C Administrator and the Fronting Bank acknowledges that it has,
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 has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender, the L/C Administrator and
the 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 Loan 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, Syndication Agents or Documentation Agents
listed on the cover

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page hereof shall have any powers, duties or responsibilities under this
Agreement or any of the other Loan Documents, except in its capacity, as
applicable, as the Administrative Agent, a Lender, the L/C Administrator or the
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 the 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 the 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, 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 Fronting
Bank, the L/C Administrator and the Administrative Agent (including any claim
for the reasonable compensation, expenses, disbursements and advances of the
Lenders, the Fronting Bank, the L/C Administrator and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders,
the Fronting Bank, the L/C Administrator and the Administrative Agent under
Sections 2.03(i) and (j), 2.08 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 the 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 Bank, 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 2.08 and 10.04.
     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 or
the Fronting Bank any plan of reorganization, arrangement, adjustment or
composition affecting the Obligations or the rights of any Lender or the
Fronting Bank to authorize the Administrative Agent to vote in respect of the
claim of any Lender or the Fronting Bank in any such proceeding.
ARTICLE X. MISCELLANEOUS
     10.01 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower therefrom, shall be effective unless in writing signed by the Required
Lenders and the Borrower 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:

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     (a) waive any condition set forth in Section 4.01(a) without the written
consent of each Lender;
     (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 Loan Document
for any payment of principal, interest, fees or other amounts due to the Lenders
(or any of them) hereunder or under any other Loan 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 Loan Document without the written consent of each Lender directly affected
thereby; provided, however, that only the consent of the Required Lenders shall
be necessary (i) to amend the definition of “Default Rate” or to waive any
obligation of the Borrower to pay interest or Letter of Credit Fees at the
Default Rate or any provision relating to Defaulting Lenders (including the
definition thereof); or (ii) to amend any financial covenant hereunder (or any
defined term used therein) even if the effect of such amendment would be to
reduce the rate of interest on any Loan or L/C Borrowing or to reduce any fee
payable hereunder;
     (e) change Section 8.03 in a manner that would alter the pro rata sharing
of payments required thereby without the written consent of each Lender; or
     (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;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Applicable Issuing Party in addition to the Lenders
required above, affect the rights or duties of the Applicable Issuing Party
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 Loan Document; (iii) either Fee Letter may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the parties thereto whose rights and privileges are affected thereby.
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 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.

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     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 telecopier
or, subject to subsection (b) below, electronic mail 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 Borrower, the Administrative Agent, the L/C Administrator or
the Fronting Bank, to the address, telecopier 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, telecopier 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 the
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 telecopier shall be deemed to
have been given when sent (except that, if not given during normal business
hours for the recipient, shall be deemed to have been given at the opening of
business on the next business day for the recipient). Notices 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 Administrator and the Fronting Bank hereunder may be delivered
or furnished by electronic communication (including e-mail 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 the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures
may be limited to particular notices or communications.
     Unless the 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 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

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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 the Borrower, any Lender, the 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 the 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 the Borrower, any Lender, the Fronting Bank or
any other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).
     (d) Change of Address, Etc. Each of the Borrower, the Administrative Agent,
the Fronting Bank and the L/C Administrator may change its address, telecopier
or telephone number for notices and other communications hereunder by notice to
the other parties hereto. Each other Lender may change its address, telecopier
or telephone number for notices and other communications hereunder by notice to
the Borrower, the Administrative Agent, the L/C Administrator and the Fronting
Bank. 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, telecopier 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 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 Borrower or its
securities for purposes of United States Federal or state securities laws.
     (e) Reliance by Administrative Agent, L/C Administrator, Fronting Bank and
Lenders. The Administrative Agent, the L/C Administrator, the Fronting Bank and
the Lenders shall be entitled to rely and act upon any notices (including
telephonic Loan Notices) purportedly given by or on behalf of the Borrower even
if (i) such notices were not made in a manner

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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. The Borrower shall indemnify
the Administrative Agent, the L/C Administrator, the Fronting Bank, 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 the 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, the L/C Administrator, the 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
Loan Document, the authority to enforce rights and remedies hereunder and under
the other Loan Documents against the Borrower 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
Administrator and the Fronting Bank; 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 Loan Documents, (b) either
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 Loan 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 the 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 Loan
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 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. The Borrower shall pay (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 Loan 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

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out-of-pocket expenses incurred by the Applicable Issuing Party in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all out-of-pocket expenses incurred
by the Administrative Agent, any Lender or the 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 Loan 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 Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender, the L/C
Administrator and the 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 fees, charges and disbursements
of any counsel for any Indemnitee, incurred by any Indemnitee or asserted
against any Indemnitee by any third party or by the Borrower arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan 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 Loan Documents, (ii) any Loan or Letter of Credit or the
use or proposed use of the proceeds therefrom (including any refusal by an
Applicable Issuing Party or L/C Issuer 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 Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the 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 Borrower, and
regardless of whether any Indemnitee is a party to such proceeding; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or (y) result from a claim brought by the Borrower against an
Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or
under any other Loan Document, if the Borrower has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction.
     (c) Reimbursement by Lenders. To the extent that the 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 Fronting Bank, the L/C Administrator 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 Fronting Bank, the L/C
Administrator 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

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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, the 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
Loan 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 Loan
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.
     (e) Payments. All amounts due under this Section shall be payable not later
than ten Business Days after demand therefor.
     (f) Survival. The agreements in this Section shall survive the resignation
of the Administrative Agent, the Fronting Bank, the L/C Administrator, 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
the Borrower is made to the Administrative Agent, an Applicable Issuing Party or
any Lender, or the Administrative Agent, an Applicable Issuing Party 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 Applicable Issuing
Party 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 and each Applicable Issuing Party 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 Federal Funds Rate
from time to time in effect. The obligations of the Lenders and each 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.

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     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 the Borrower may
not 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 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 Fronting Bank, the L/C Administrator and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
     (b) Assignments by Lenders. Any Lender may at any time assign to one or
more 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 Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund,
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 Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed); provided, however, that concurrent assignments to members of an
Assignee Group and concurrent assignments from members of an Assignee Group to a
single Eligible Assignee (or to an Eligible Assignee and members of its Assignee
Group) will be treated as a single assignment for purposes of determining
whether such minimum amount has been met.

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     (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;
     (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 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,
an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall
be deemed to have consented to any such assignment unless it shall object
thereto by written notice to the 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, an Affiliate of such Lender or an Approved Fund
with respect to such Lender; and
     (C) the consent of the Fronting Bank (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, the Fronting Agent 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.
     (v) No Assignment to Certain Persons. No such assignment shall be made
(A) to the Borrower or any of the 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), (C) to a natural person, or (D) to any Person who
has not on or prior to the date of such assignment complied with the
requirements of Section 3.01(e).
     (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

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the Borrower and the Administrative Agent, the applicable pro rata share of
Loans previously requested but not funded by the 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 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 Borrower (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. Notwithstanding any other provision to the
contrary, an assignee under this Section 10.6 shall not be entitled to receive
any payment under Section 3.01 that is greater in amount than the applicable
assignor would have been entitled to receive with respect to the Commitment or
Loans being assigned unless such assignment is made with the Borrower’s prior
written consent.
     (c) Register. The Administrative Agent, acting solely for this purpose as
an agent of the Borrower (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, and the Borrower, the Administrative Agent and the Lenders may 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 Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.

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     (d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person, a Defaulting Lender or the Borrower or any
of the 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 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 Borrower, the Administrative
Agent, the Lenders, the L/C Administrator and the Fronting Bank 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
Section 10.01 that affects such Participant. Subject to subsection (e) of this
Section, the 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. 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
such Participant agrees to be subject to Section 2.12 as though it were a
Lender.
     (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 Borrower’s prior written consent. A
Participant shall not be entitled to the benefits of Section 3.01 unless the
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the 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 a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
     (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 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 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 Borrower to
appoint any such successor shall affect the resignation of Bank of America as
Fronting Bank and L/C

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Administrator. If Bank of America resigns as Fronting Bank and L/C
Administrator, it shall retain all the rights, powers, privileges and duties of
the Fronting Bank 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 Administrator and the Fronting Bank
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), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (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 Loan Document or any action or proceeding
relating to this Agreement or any other Loan 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 2.13(c) or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the 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, the Fronting Bank, the L/C Administrator or
any of their respective Affiliates on a nonconfidential basis from a source
other than the Borrower. For purposes of this Section, “Information” means all
information received from the Borrower or any Subsidiary relating to the
Borrower or any Subsidiary or any of their respective businesses, other than any
such information that is available to the Administrative Agent, any Lender, the
L/C Administrator or the Fronting Bank on a nonconfidential basis prior to
disclosure by the Borrower or any Subsidiary, provided that, in the case of
information received from the 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.

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     Each of the Administrative Agent, the Lenders, the L/C Administrator and
the Fronting Bank acknowledges that (a) the Information may include material
non-public information concerning the 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, the Fronting Bank, the L/C Administrator 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, the Fronting Bank, and L/C
Administrator or any such Affiliate to or for the credit or the account of the
Borrower against any and all of the obligations of the Borrower now or hereafter
existing under this Agreement or any other Loan Document to such Lender, the L/C
Administrator or the Fronting Bank, irrespective of whether or not such Lender,
the L/C Administrator or the Fronting Bank shall have made any demand under this
Agreement or any other Loan Document and although such obligations of the
Borrower may be contingent or unmatured or are owed to a branch or office of
such Lender, the L/C Administrator or the 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 2.15 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) the 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, the Fronting Bank,
the L/C Administrator and their respective Affiliates under this Section are in
addition to other rights and remedies (including other rights of setoff) that
such Lender, the Fronting Bank, the L/C Administrator or their respective
Affiliates may have. Each Lender, the L/C Administrator and the Fronting Bank
agrees to notify the 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.
     10.09 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan 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 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.

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     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
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. 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 Loan 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 and each Lender, regardless of any investigation made by
the Administrative Agent 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 Loan
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 Loan 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 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
Administrator or the Fronting Bank, 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 the 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, then the 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 related Loan Documents to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment), provided that:

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     (a) the 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 Loan Documents (including any amounts under Section 3.05) from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (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; and
     (d) such assignment does not conflict with applicable Laws.
     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 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. THE BORROWER IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF
MANHATTAN AND OF THE UNITED STATES DISTRICT COURT FOR 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 LOAN 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 LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, ANY LENDER, THE L/C ADMINISTRATOR OR THE FRONTING BANK MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF
ANY JURISDICTION.
     (c) WAIVER OF VENUE. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY

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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 LOAN 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. 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 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 LOAN 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 LOAN 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 Loan
Document), the Borrower acknowledges and agrees that: (i) (A) the arranging and
other services regarding this Agreement provided by the Administrative Agent and
the Arrangers are arm’s-length commercial transactions between the Borrower and
its Affiliates, on the one hand, and the Administrative Agent and each Arranger
on the other hand, (B) the Borrower has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate, and (C) the
Borrower is capable of evaluating, and understands and accepts, the terms, risks
and conditions of the transactions contemplated hereby and by the other Loan
Documents; (ii) (A) the Administrative Agent and each Arranger each is and has
been acting solely as a principal and, except as expressly agreed in writing by
the relevant parties, has not been, is not, and will not be acting as an
advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any
other Person and (B) neither the Administrative Agent nor either Arranger has
any obligation to the Borrower or any of its Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Loan Documents; and (iii) the Administrative Agent 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 Borrower and
its Affiliates, and neither the Administrative Agent nor

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either Arranger has any obligation to disclose any of such interests to the
Borrower or any of its Affiliates. To the fullest extent permitted by law, the
Borrower hereby waives and releases any claims that it may have against the
Administrative Agent or either Arranger with respect to any breach or alleged
breach of agency or fiduciary duty in connection with any aspect of any
transaction contemplated hereby.
     10.17 Electronic Execution of Assignments and Certain Other Documents. The
words “execution,” “signed,” “signature,” and words of like import in any
Assignment and Assumption or in any amendment or other modification hereof
(including waivers and consents) shall be deemed to include electronic
signatures 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.
     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 the 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 the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the Act. The
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 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

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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.

            TOWER GROUP, INC.

      By:   /s/ William Hitselberger         Name:   William Hitselberger       
Title:   Senior Vice President and Chief Financial Officer   

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

      By:   /s/ Brady Fife         Name:   Brady Fife        Title:   Director 
 

S - 2

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            JPMORGAN CHASE BANK, N.A.

      By:   /s/ Thomas A. Kiepura         Name:   Thomas A. Kiepura       
Title:   Senior Vice President   

S - 3

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            KEYBANK NATIONAL ASSOCIATION

      By:   /s/ Mary K. Young         Name:   Mary K. Young        Title:   Sr.
Vice President   

S - 4

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            PNC BANK, NATIONAL ASSOCIATION

      By:   /s/ William R. McDonnell         Name:   William R. McDonnell       
Title:   Senior Vice President   

S - 5

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            WELLS FARGO BANK, N.A.

      By:   /s/ David J. Bendel         Name:   David J. Bendel        Title:  
Director   

S - 6

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            THE NORTHERN TRUST COMPANY

      By:   /s/ Chris McKean         Name:   Chris McKean        Title:   Vice
President     

S - 7