Exhibit 10.47



 





EXHIBIT 10.47




 

 






Published CUSIP Number: 89580CAA2




CREDIT AGREEMENT




Dated as of June 28, 2007




among




TRIAD GUARANTY INC.,

as the Borrower,




BANK OF AMERICA, N.A.,

as Administrative Agent and Swing Line Lender




and




The Other Lenders Party Hereto




BRANCH BANKING & TRUST COMPANY,

as

Syndication Agent




BANC OF AMERICA SECURITIES LLC,

as

Sole Lead Arranger and Sole Book Manager




 

 






 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 	 	 
	Section	 	 	 	Page
	ARTICLE I.	 	DEFINITIONS AND ACCOUNTING TERMS	 	 	1	 
	 

	 	 	1.01	 	 	Defined Terms
	 	 	1	 
	 

	 	 	1.02	 	 	Other Interpretive Provisions
	 	 	15	 
	 

	 	 	1.03	 	 	Accounting Terms
	 	 	15	 
	 

	 	 	1.04	 	 	Rounding
	 	 	16	 
	 

	 	 	1.05	 	 	Times of Day
	 	 	16	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE II.	 	THE COMMITMENTS AND CREDIT EXTENSIONS	 	 	16	 
	 

	 	 	2.01	 	 	Committed Loans
	 	 	16	 
	 

	 	 	2.02	 	 	Borrowings, Conversions and Continuations of Committed Loans
	 	 	16	 
	 

	 	 	2.03	 	 	Swing Line Loans
	 	 	17	 
	 

	 	 	2.04	 	 	Prepayments
	 	 	20	 
	 

	 	 	2.05	 	 	Termination or Reduction of Commitments
	 	 	20	 
	 

	 	 	2.06	 	 	Repayment of Loans
	 	 	21	 
	 

	 	 	2.07	 	 	Interest
	 	 	21	 
	 

	 	 	2.08	 	 	Fees
	 	 	21	 
	 

	 	 	2.09	 	 	Computation of Interest and Fees
	 	 	22	 
	 

	 	 	2.10	 	 	Evidence of Debt
	 	 	23	 
	 

	 	 	2.11	 	 	Payments Generally; Administrative Agent’s Clawback
	 	 	23	 
	 

	 	 	2.12	 	 	Sharing of Payments by Lenders
	 	 	24	 
	 

	 	 	2.13	 	 	Increase in Commitments
	 	 	25	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE III.	 	TAXES, YIELD PROTECTION AND ILLEGALITY	 	 	26	 
	 

	 	 	3.01	 	 	Taxes
	 	 	26	 
	 

	 	 	3.02	 	 	Illegality
	 	 	27	 
	 

	 	 	3.03	 	 	Inability to Determine Rates
	 	 	28	 
	 

	 	 	3.04	 	 	Increased Costs; Reserves on Eurodollar Rate Loans
	 	 	28	 
	 

	 	 	3.05	 	 	Compensation for Losses
	 	 	29	 
	 

	 	 	3.06	 	 	Mitigation Obligations; Replacement of Lenders
	 	 	30	 
	 

	 	 	3.07	 	 	Survival
	 	 	30	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE IV.	 	CONDITIONS PRECEDENT TO CREDIT EXTENSIONS	 	 	30	 
	 

	 	 	4.01	 	 	Conditions of Initial Credit Extension
	 	 	30	 
	 

	 	 	4.02	 	 	Conditions to all Credit Extensions
	 	 	32	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE V.	 	REPRESENTATIONS AND WARRANTIES	 	 	32	 
	 

	 	 	5.01	 	 	Existence, Qualification and Power
	 	 	32	 
	 

	 	 	5.02	 	 	Authorization; No Contravention
	 	 	33	 
	 

	 	 	5.03	 	 	Governmental Authorization; Other Consents
	 	 	33	 
	 

	 	 	5.04	 	 	Binding Effect
	 	 	33	 
	 

	 	 	5.05	 	 	Financial Statements; No Material Adverse Effect
	 	 	33	 
	 

	 	 	5.06	 	 	Litigation
	 	 	34	 
	 

	 	 	5.07	 	 	No Default
	 	 	34	 
	 

	 	 	5.08	 	 	Ownership of Property; Liens
	 	 	34	 
	 

	 	 	5.09	 	 	Environmental Compliance
	 	 	34	 
	 

	 	 	5.10	 	 	Insurance
	 	 	34	 
	 

	 	 	5.11	 	 	Taxes
	 	 	34	 
	 

	 	 	5.12	 	 	ERISA Compliance
	 	 	35	 






i









 





	 	 	 	 	 	 	 	 	 	 	 
	Section	 	 	 	Page
	 

	 	 	5.13	 	 	Subsidiaries
	 	 	35	 
	 

	 	 	5.14	 	 	Margin Regulations; Investment Company Act
	 	 	35	 
	 

	 	 	5.15	 	 	Disclosure
	 	 	35	 
	 

	 	 	5.16	 	 	Compliance with Laws
	 	 	36	 
	 

	 	 	5.17	 	 	Taxpayer Identification Number
	 	 	36	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE VI.	 	AFFIRMATIVE COVENANTS	 	 	36	 
	 

	 	 	6.01	 	 	Financial Statements
	 	 	36	 
	 

	 	 	6.02	 	 	Certificates; Other Information
	 	 	37	 
	 

	 	 	6.03	 	 	Notices
	 	 	39	 
	 

	 	 	6.04	 	 	Payment of Obligations
	 	 	39	 
	 

	 	 	6.05	 	 	Preservation of Existence, Etc
	 	 	39	 
	 

	 	 	6.06	 	 	Maintenance of Properties
	 	 	40	 
	 

	 	 	6.07	 	 	Maintenance of Insurance
	 	 	40	 
	 

	 	 	6.08	 	 	Compliance with Laws
	 	 	40	 
	 

	 	 	6.09	 	 	Books and Records
	 	 	40	 
	 

	 	 	6.10	 	 	Inspection Rights
	 	 	40	 
	 

	 	 	6.11	 	 	Use of Proceeds
	 	 	40	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE VII.	 	NEGATIVE COVENANTS	 	 	40	 
	 

	 	 	7.01	 	 	Liens
	 	 	41	 
	 

	 	 	7.02	 	 	Investments
	 	 	41	 
	 

	 	 	7.03	 	 	Indebtedness
	 	 	42	 
	 

	 	 	7.04	 	 	Fundamental Changes
	 	 	43	 
	 

	 	 	7.05	 	 	Dispositions
	 	 	43	 
	 

	 	 	7.06	 	 	Restricted Payments
	 	 	43	 
	 

	 	 	7.07	 	 	Change in Nature of Business
	 	 	44	 
	 

	 	 	7.08	 	 	Transactions with Affiliates
	 	 	44	 
	 

	 	 	7.09	 	 	Burdensome Agreements
	 	 	44	 
	 

	 	 	7.10	 	 	Use of Proceeds
	 	 	44	 
	 

	 	 	7.11	 	 	Financial Covenants
	 	 	44	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE VIII.	 	EVENTS OF DEFAULT AND REMEDIES	 	 	44	 
	 

	 	 	8.01	 	 	Events of Default
	 	 	44	 
	 

	 	 	8.02	 	 	Remedies Upon Event of Default
	 	 	46	 
	 

	 	 	8.03	 	 	Application of Funds
	 	 	47	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE IX.	 	ADMINISTRATIVE AGENT	 	 	47	 
	 

	 	 	9.01	 	 	Appointment and Authority
	 	 	47	 
	 

	 	 	9.02	 	 	Rights as a Lender
	 	 	47	 
	 

	 	 	9.03	 	 	Exculpatory Provisions
	 	 	47	 
	 

	 	 	9.04	 	 	Reliance by Administrative Agent
	 	 	48	 
	 

	 	 	9.05	 	 	Delegation of Duties
	 	 	49	 
	 

	 	 	9.06	 	 	Resignation of Administrative Agent
	 	 	49	 
	 

	 	 	9.07	 	 	Non-Reliance on Administrative Agent and Other Lenders
	 	 	49	 
	 

	 	 	9.08	 	 	No Other Duties, Etc
	 	 	50	 
	 

	 	 	9.09	 	 	Administrative Agent May File Proofs of Claim
	 	 	50	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE X.	 	MISCELLANEOUS	 	 	50	 
	 

	 	 	10.01	 	 	Amendments, Etc
	 	 	50	 
	 

	 	 	10.02	 	 	Notices; Effectiveness; Electronic Communication
	 	 	51	 
	 

	 	 	10.03	 	 	No Waiver; Cumulative Remedies
	 	 	53	 
	 

	 	 	10.04	 	 	Expenses; Indemnity; Damage Waiver
	 	 	53	 






ii









 





	 	 	 	 	 	 	 	 	 	 	 
	Section	 	 	 	Page
	 

	 	 	10.05	 	 	Payments Set Aside
	 	 	54	 
	 

	 	 	10.06	 	 	Successors and Assigns
	 	 	55	 
	 

	 	 	10.07	 	 	Treatment of Certain Information; Confidentiality
	 	 	58	 
	 

	 	 	10.08	 	 	Right of Setoff
	 	 	59	 
	 

	 	 	10.09	 	 	Interest Rate Limitation
	 	 	59	 
	 

	 	 	10.10	 	 	Counterparts; Integration; Effectiveness
	 	 	59	 
	 

	 	 	10.11	 	 	Survival of Representations and Warranties
	 	 	59	 
	 

	 	 	10.12	 	 	Severability
	 	 	60	 
	 

	 	 	10.13	 	 	Replacement of Lenders
	 	 	60	 
	 

	 	 	10.14	 	 	Governing Law; Jurisdiction; Etc
	 	 	60	 
	 

	 	 	10.15	 	 	Waiver of Jury Trial
	 	 	61	 
	 

	 	 	10.16	 	 	No Advisory or Fiduciary Responsibility
	 	 	61	 
	 

	 	 	10.17	 	 	USA PATRIOT Act Notice
	 	 	62	 
	 	 	SIGNATURES
	 	 	S-1	 







iii









 






	 	 	 	 	 	 	 
	SCHEDULES	 	 
	 
	 	 	 	 	 	 
	 

	 	 	2.01	 	 	Commitments and Applicable Percentages
	 

	 	 	5.06	 	 	Litigation
	 

	 	 	5.13	 	 	Subsidiaries
	 

	 	 	7.01	 	 	Existing Liens
	 

	 	 	7.03	 	 	Existing Indebtedness
	 

	 	 	10.02	 	 	Administrative Agent’s Office; Certain Addresses for Notices
	 
	 	 	 	 	 	 
	EXHIBITS	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Form of
	 
	 	 	 	 	 	 
	 

	 	 	A	 	 	Committed Loan Notice
	 

	 	 	B	 	 	Swing Line Loan Notice
	 

	 	 	C	 	 	Note
	 

	 	 	D	 	 	Compliance Certificate
	 

	 	 	E	 	 	Assignment and Assumption
	 

	 	 	F	 	 	Opinion Matters






iv









 






CREDIT AGREEMENT




     This CREDIT AGREEMENT (“Agreement”) is entered into as of June 28, 2007, among TRIAD
GUARANTY 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 and Swing Line Lender.



     The Borrower has requested that the Lenders provide a revolving 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:



     “Adjusted Consolidated Net Worth” means Consolidated Net Worth, as adjusted to exclude
accumulated other comprehensive income net of deferred taxes (whether such accumulated other
comprehensive income net of deferred taxes shall be a negative or positive amount) and, solely for
purposes of Section 7.11(a), minority interests.



     “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 a form
supplied 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.



     “Annual Statement” means the annual statutory financial statement of any Insurance
Subsidiary as required to be filed with its Supervisory Authority, together with all exhibits and
schedules filed therewith, prepared in accordance with SAP.



     “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. If the commitment of each Lender to make Loans 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



1









 







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.



     “Applicable Rate” means, from time to time, the following percentages per annum, based
upon the Financial Strength Rating as set forth below:



	 	 	 	 	 	 	 	 	 
	Applicable Rate
	 	 	 	 	 	 	Applicable	 	 
	 	 	Financial	 	 	 	Margin for	 	 
	 	 	Strength Ratings	 	 	 	LIBOR	 	 
	Pricing Level	 	S&P/Moody’s	 	Facility Fee	 	Loans	 	Utilization Fee
	1
	 	3  AA+ / Aa1
	 	.05%
	 	.15%
	 	.05%
	2
	 	AA / Aa2
	 	.06%
	 	.19%
	 	.05%
	3
	 	AA-/Aa3
	 	.08%
	 	.27%
	 	.05%
	4
	 	< AA- / Aa3
	 	.10%
	 	.30%
	 	.10%







     “Financial Strength Rating” means, as of any date of determination, the rating
as determined by either S&P or Moody’s (collectively, the “Financial Strength
Ratings”) of TGIC’s financial strength or claims paying ability, as applicable;
provided that (a) if the respective Financial Strength Ratings issued by the
foregoing rating agencies differ by one level, then the Pricing Level for the higher of such
Financial Strength Ratings shall apply (with the Financial Strength Rating for Pricing Level
1 being the highest and the Financial Strength Rating for Pricing Level 4 being the lowest);
(b) if there is a split in Financial Strength Ratings of more than one level, then the
Pricing Level that is one level lower than the Pricing Level of the higher Financial
Strength Rating shall apply; (c) if TGIC has only one Financial Strength Rating, the Pricing
Level that is one level lower than that of such Financial Strength Rating (or Pricing Level
4 if there is no lower Pricing Level) shall apply; and (d) if TGIC does not have any
Financial Strength Rating, Pricing Level 4 shall apply.


Initially, the Applicable Rate shall be determined based upon the Financial Strength Rating
specified in the certificate delivered pursuant to Section 4.01(a)(vii). Thereafter, each
change in the Applicable Rate shall be effective on the effective date of a publicly announced
change in a Financial Strength Rating.




     “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.



     “Arranger” means Banc of America Securities LLC, in its capacity as sole lead arranger
and sole book manager.



     “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
E or any other form approved by the Administrative Agent.



     “Attributable Indebtedness” means, on any date, (a) in respect of any capital lease of
any Person, the capitalized amount thereof that would appear on a balance sheet of such Person
prepared as of such



2









 







date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the
capitalized amount of the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were
accounted for as a capital lease.



     “Audited Financial Statements” means the audited consolidated balance sheet of the
Borrower and its Subsidiaries for the fiscal year ended December 31, 2006, prepared in accordance
with GAAP, 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 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
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (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.” 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 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 Committed Loan” means a Committed Loan that is a Base Rate Loan.



     “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 Materials” has the meaning specified in Section 6.02.



     “Borrowing” means a Committed Borrowing or a Swing Line Borrowing, as the context may
require.



     “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 and, if such day relates to any Eurodollar Rate
Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in
the London interbank eurodollar market.



     “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 persons acting as a group, as that term is defined in Rule 13d-3



3









 







under the Securities Exchange Act of 1934 (other than Collateral Holdings, Ltd., an
Alabama limited partnership, and any of its Affiliates) shall become the beneficial owner of
securities of the Company representing more than thirty percent (30%) of the combined voting
power of the Company’s then outstanding securities; or




     (b) individuals who constitute the board of directors of the Company as of the date
hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the date hereof whose
election or nomination for election was approved by a vote of at least three-quarters of the
directors comprising the Incumbent Board (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for director,
without objection to such nomination) shall be, for purposes of this clause (b) considered
as though such person were a member of the Incumbent Board; or




     (c) any consolidation or merger to which the Company is a party, if following such
consolidation or merger, stockholders of the Company immediately prior to such consolidation
or merger shall not beneficially own securities representing more than seventy percent (70%)
of the combined voting power of the outstanding voting securities of the surviving or
continuing corporation; or




     (d) any sale, lease, exchange or other transfer (in one transaction or in a series of
related transactions) of all, or substantially all, of the assets of the Company, other than
to an entity (or entities) of which the Company or the stockholders of the Company
immediately prior to such transaction beneficially own securities representing more than
seventy percent (70%) of the combined voting power of the outstanding voting securities.



     “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 Committed Loans to
the Borrower pursuant to Section 2.01, and (b) purchase participations in Swing Line Loans,
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.



     “Committed Borrowing” means a borrowing consisting of simultaneous Committed 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.



     “Committed Loan” has the meaning specified in Section 2.01.



     “Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a conversion
of Committed 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.



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



4









 





     “Consolidated Net Income” means, for any period, the consolidated net income of the
Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP (but excluding the effect of any extraordinary or other non-recurring gain or loss
outside the ordinary course of business).



     “Consolidated Net Worth” means, at any date, the consolidated net worth of the
Borrower and its Subsidiaries, as calculated 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 a Borrowing.



     “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 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.



     “Defaulting Lender” means any Lender that (a) has failed to fund any portion of the
Committed Loans or participations in Swing Line Loans required to be funded by it hereunder within
one Business Day of the date required to be funded by it hereunder unless such failure has been
cured, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any
other amount required to be paid by it hereunder within one Business Day of the date when due,
unless the subject of a good faith dispute or unless such failure has been cured, or (c) has been
deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.



     “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.



     “Eligible Assignee” means any Person that meets the requirements to be an assignee
under Section 10.06(b)(iii), (v) and (vi) (subject to such consents, if
any, as may be required under Section 10.06(b)(iii)).



5









 





     “Environmental Laws” means any and all Federal, state, local, and foreign statutes,
laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including those
related to hazardous substances or wastes, air emissions and discharges to 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 or threatened release of any Hazardous Materials into the environment or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.



     “Equity Interests” means, with respect to any Person, 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, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person
or warrants, rights or options for the purchase or 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, and whether or not
such shares, warrants, options, rights or other interests are outstanding on any date of
determination.



     “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) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2)
of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e)
of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing
of a notice of intent to terminate, the treatment of a Plan amendment as a termination under
Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA,
other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.



     “Eurodollar Rate” means, for any Interest Period with respect to a Eurodollar Rate
Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”),
as published by Reuters (or other commercially available source providing quotations of BBA LIBOR
as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for
delivery on the first day of such Interest Period) with a term equivalent to such Interest Period.
If such rate is not available at such time for any reason, then the “Eurodollar Rate” for such
Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate
at which deposits in Dollars for delivery on the first



6









 







day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate
Loan being made, continued or converted by Bank of America and with a term equivalent to such
Interest Period would be offered by Bank of America’s London Branch to major banks in the London
interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period.



     “Eurodollar Rate Loan” means a Committed Loan that bears interest at a rate based on
the Eurodollar Rate.



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



     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, or any
other recipient of any payment to be made by or on account of any obligation of the Borrower
hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and
franchise taxes imposed on it (in lieu of net income taxes), 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 in which the Borrower is located and (c) in the case of a Foreign Lender (other than
an assignee pursuant to a request by the Borrower under Section 10.13), any withholding tax
that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party hereto (or designates a new Lending Office) or is attributable to such Foreign Lender’s
failure or inability (other than as a result of a Change in Law) to comply with Section
3.01(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled,
at the time of designation of a new Lending Office (or assignment), to receive additional amounts
from the Borrower with respect to such withholding tax pursuant to Section 3.01(a).



     “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 Letter” means the letter agreement dated May 25, 2007, among the Borrower, the
Administrative Agent and the Arranger.



     “Financial Strength Rating” has the meaning specified in the definition of “Applicable
Rate.”



     “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction
other than that in which the Borrower is resident for tax purposes. For purposes of this
definition, the United States, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.



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



     “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.



7









 





     “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 Supervisory Authority and any supra-national bodies such as the European
Union or the European Central Bank).



     “Guarantee” means, as to any Person, any (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, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.



     “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;



8









 






     (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 90 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 and Synthetic Lease Obligations;




     (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 or Synthetic Lease Obligation as of any date shall be deemed
to be the amount of Attributable Indebtedness 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 Subsidiary” means any Subsidiary of the Borrower that is authorized or
admitted by a Supervisory Authority to carry on or transact one or more aspects of the business of
selling, issuing or underwriting insurance or reinsurance.



     “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 (including a Swing Line 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, three or six months thereafter, as selected by the Borrower in its
Committed Loan Notice; provided that:



9









 






     (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.



     “Investment” means, as to any Person, any direct or indirect acquisition or investment
by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other
securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or
assumption of debt of, or purchase or other acquisition of any other debt or equity participation
or interest in, another Person, including any partnership or joint venture interest in such other
Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other
Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit. For purposes of covenant compliance,
the amount of any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.



     “IRS” means the United States Internal Revenue Service.



     “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 and, as the
context requires, includes the Swing Line Lender.



     “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.



     “Loan” means an extension of credit by a Lender to the Borrower under Article
II in the form of a Committed Loan or a Swing Line Loan.



     “Loan Documents” means this Agreement, each Note and the Fee Letter.



     “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 or the Borrower and its
Subsidiaries taken as a whole; (b) a material impairment of the ability of the Borrower to perform
its obligations under any Loan Document; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against the Borrower of any Loan Document.



     “Material Insurance Subsidiary” means an Insurance Subsidiary that is a Material Subsidiary.



10









 





     “Material Subsidiary” means, at any date, (a) TGIC and (b) any other Subsidiary that,
together with its Subsidiaries, is the owner of at least 10% of the consolidated total assets of
the Borrower and its Subsidiaries.



     “Maturity Date” means June 28, 2010; provided, however, that if such
date is not a Business Day, the Maturity Date shall be the next preceding Business Day.



     “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.



     “Net Risk in Force” means, at any date for TGIC, the dollar amount equal to, in the
case of primary insurance issued by TGIC, the product of the current principal balance of each
mortgage loan insured by TGIC multiplied by such loan’s coverage percentage or, in the case of pool
insurance, the remaining aggregate loss limit, in each case net of third-party reinsurance, in each
case as determined at such date.



     “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 C.



     “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,
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 arising from any payment made hereunder or
under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any other Loan Document.



     “Outstanding Amount” means with respect to Committed Loans and Swing Line Loans on any
date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and
prepayments or repayments of Committed Loans and Swing Line Loans, as the case may be, occurring on
such date.



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



11









 





     “PBGC” means the Pension Benefit Guaranty Corporation.



     “Pension Plan” means any “employee pension benefit plan” (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and
is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any
ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple
employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time
during the immediately preceding five plan years.



     “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” (as such term is defined in Section 3(3) of
ERISA) established by the Borrower or, with respect to any such plan that is subject to Section 412
of the Code or Title IV of ERISA, any ERISA Affiliate.



     “Platform” has the meaning specified in Section 6.02.



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



     “Quarterly Statement” means the quarterly statutory financial statement of any
Insurance Subsidiary as required to be filed with its Supervisory Authority, together with all
exhibits and schedules filed therewith, prepared in accordance with SAP.



     “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 and advisors of such Person and of such Person’s
Affiliates.



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



     “Request for Credit Extension” means (a) with respect to a Borrowing, conversion or
continuation of Committed Loans, a Committed Loan Notice, and (b) with respect to a Swing Line
Loan, a Swing Line Loan Notice.



     “Required Lenders” means, as of any date of determination, at least two Lenders having
more than 50% of the Aggregate Commitments or, if the commitment of each Lender to make Loans have
been terminated pursuant to Section 8.02, at least two 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 Swing Line Loans being deemed “held” by such Lender for
purposes of this definition); provided that the Commitment of, and the portion of the Total
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making
a determination of Required Lenders.



     “Responsible Officer” means the chief executive officer, president, chief financial
officer, treasurer, assistant treasurer or controller of the Borrower. 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.



12









 





     “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 to Capital Ratio” means, at any date for TGIC, the ratio of (i) Net Risk in
Force to (ii) Statutory Capital, in each case at such date.



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



     “SAP” shall mean statutory accounting principles prescribed or permitted by the
applicable Supervisory Authority.



     “SEC” means the Securities and Exchange Commission, or any Governmental Authority
succeeding to any of its principal functions.



     “Statutory Capital” means, at any date for TGIC, the sum of its Statutory Surplus and
its contingency reserve, in each case at such date.



     “Statutory Surplus” means, with respect to TGIC as of the date of an Annual Statement,
the amount corresponding to the amount shown on page 3, line 35, column 1 of its 2006 Annual
Statement or an amount determined in a consistent manner in accordance with SAP for any date other
than the one as of which an Annual Statement is prepared. Notwithstanding the foregoing, if the
format of the Annual Statement of TGIC is changed in future years so that different information is
contained in such line or such line no longer exists, it is understood that the foregoing shall
refer to information consistent with that reported in the referenced line in the 2006 Annual
Statement of TGIC.



     “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. A Subsidiary may be referred to as an Insurance Subsidiary and/or
a Material Subsidiary.



     “Supervisory Authority” means, with respect to the Borrower or any Subsidiary, the
department of insurance of the state or other jurisdiction of domicile of the Borrower or such
Subsidiary, as the case may be.



     “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



13









 




(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).



     “Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section
2.03.



     “Swing Line Lender” means Bank of America in its capacity as provider of Swing Line
Loans, or any successor swing line lender hereunder.



     “Swing Line Loan” has the meaning specified in Section 2.03(a).



     “Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.03(b), which, if in writing, shall be substantially in the form of Exhibit
B.



     “Swing Line Sublimit” means an amount equal to the lesser of (a) $8,000,000 (or, if
greater, ten percent (10%) of the Aggregate Commitments in effect from time to time) and (b) the
Aggregate Commitments. The Swing Line Sublimit is part of, and not in addition to, the Aggregate
Commitments.



     “Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or
possession of property creating obligations that do not appear on the balance sheet of such Person
but which, upon the insolvency or bankruptcy of such Person, would be characterized as the
indebtedness of such Person (without regard to accounting treatment).



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



     “TGIC” means Triad Guaranty Insurance Corporation, a wholly-owned Material Insurance
Subsidiary domiciled in the State of Illinois.



     “Threshold Amount” means, as of the date of any determination thereof, 3% of Adjusted
Consolidated Net Worth as of the end of the fiscal quarter ended most recently prior to such date.



     “Total Outstandings” means the aggregate Outstanding Amount of all Loans.



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



14









 





     “Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets,
determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section
412 of the Code for the applicable plan year.



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



   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 “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.”




     (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. (a) 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.



     (b) Changes in GAAP or SAP. If at any time any change in GAAP or SAP 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



15









 







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 or SAP (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 or SAP 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 or SAP.



   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).



ARTICLE II.



THE COMMITMENTS AND CREDIT EXTENSIONS




   2.01 Committed Loans. Subject to the terms and conditions set forth herein, each Lender
severally agrees to make loans (each such loan, a “Committed 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 Committed Borrowing, (i) the Total Outstandings
shall not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount of the
Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding
Amount of all Swing Line Loans 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. Committed Loans may be Base Rate Loans or Eurodollar Rate Loans, as further
provided herein.



   2.02 Borrowings, Conversions and Continuations of Committed Loans.



     (a) Each Committed Borrowing, each conversion of Committed 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 Committed Loans, and (ii) on the requested date of
any Borrowing of Base Rate Committed Loans 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 Committed 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 Committed Loans
shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each
Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is
requesting a Committed Borrowing, a conversion of Committed 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
Committed Loans to be borrowed, converted or continued, (iv) the Type of



16









 




Committed Loans to be borrowed or to which existing Committed 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 Committed Loan in a Committed Loan Notice or if the Borrower fails to give a
timely notice requesting a conversion or continuation, then the applicable Committed 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 of Eurodollar Rate Loans in any such Committed 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 Committed Loan Notice, the Administrative Agent shall promptly
notify each Lender of the amount of its Applicable Percentage of the applicable Committed 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 Committed Borrowing, each
Lender shall make the amount of its Committed 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 Committed 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.



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



   2.03 Swing Line Loans.



     (a) The Swing Line. Subject to the terms and conditions set forth herein, the Swing
Line Lender agrees, in reliance upon the agreements of the other Lenders set forth in this
Section 2.03, to make loans (each such loan, a “Swing Line 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 the Swing Line Sublimit, notwithstanding the fact that
such Swing Line Loans, when aggregated with the Applicable Percentage of the Outstanding Amount of
Committed Loans of the Lender acting as Swing Line Lender, may exceed the amount of such Lender’s
Commitment; provided, however, that after giving effect to any Swing Line Loan, (i)
the Total Outstandings shall not exceed the Aggregate Commitments, and (ii) the aggregate
Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such



17









 







Lender’s Commitment, and provided, further, that the Borrower shall not use
the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the
foregoing limits, and subject to the other terms and conditions hereof, the Borrower may borrow
under this Section 2.03, prepay under Section 2.04, and reborrow under this
Section 2.03. Each Swing Line Loan shall be a Base Rate Loan. Immediately upon the making
of a Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an
amount equal to the product of such Lender’s Applicable Percentage times the amount of such
Swing Line Loan.



     (b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the Borrower’s
irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by
telephone. Each such notice must be received by the Swing Line Lender and the Administrative Agent
not later than 1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be
borrowed, which shall be a minimum of $250,000, and (ii) the requested borrowing date, which shall
be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing
Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of the Borrower. Promptly after receipt by the Swing
Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent has also received
such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent
(by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received
notice (by telephone or in writing) from the Administrative Agent (including at the request of any
Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing
Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the first
proviso to the first sentence of Section 2.03(a), or (B) that one or more of the applicable
conditions specified in Article IV is not then satisfied, then, subject to the terms and
conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing date
specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the
Borrower.



     (c) Refinancing of Swing Line Loans.




     (i) The Swing Line Lender at any time in its sole and absolute discretion may request,
on behalf of the Borrower (which hereby irrevocably authorizes the Swing Line Lender to so
request on its behalf), that each Lender make a Base Rate Committed Loan in an amount equal
to such Lender’s Applicable Percentage of the amount of Swing Line Loans then outstanding.
Such request shall be made in writing (which written request shall be deemed to be a
Committed Loan Notice for purposes hereof) and in accordance with the requirements of
Section 2.02, without regard to the minimum and multiples specified therein for the
principal amount of Base Rate Loans, but subject to the unutilized portion of the Aggregate
Commitments and the conditions set forth in Section 4.02. The Swing Line Lender
shall furnish the Borrower with a copy of the applicable Committed Loan Notice promptly
after delivering such notice to the Administrative Agent. Each Lender shall make an amount
equal to its Applicable Percentage of the amount specified in such Committed Loan Notice
available to the Administrative Agent in immediately available funds for the account of the
Swing Line Lender at the Administrative Agent’s Office not later than 1:00 p.m. on the day
specified in such Committed Loan Notice, whereupon, subject to Section 2.03(c)(ii),
each Lender that so makes funds available shall be deemed to have made a Base Rate Committed
Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so
received to the Swing Line Lender.




     (ii) If for any reason any Swing Line Loan cannot be refinanced by such a Committed
Borrowing in accordance with Section 2.03(c)(i), the request for Base Rate



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Committed Loans submitted by the Swing Line Lender as set forth herein shall be deemed
to be a request by the Swing Line Lender that each of the Lenders fund its risk
participation in the relevant Swing Line Loan and each Lender’s payment to the
Administrative Agent for the account of the Swing Line Lender pursuant to Section
2.03(c)(i) shall be deemed payment in respect of such participation.




     (iii) If any Lender fails to make available to the Administrative Agent for the account
of the Swing Line Lender 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)(i), the Swing Line Lender 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 Swing Line Lender at a rate per annum equal to the greater of
the Federal Funds Rate and a rate determined by the Swing Line Lender in accordance with
banking industry rules on interbank compensation, plus any administrative, processing or
similar fees customarily charged by the Swing Line Lender in connection with the foregoing.
If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid
shall constitute such Lender’s Committed Loan included in the relevant Committed Borrowing
or funded participation in the relevant Swing Line Loan, as the case may be. A certificate
of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with
respect to any amounts owing under this clause (iii) shall be conclusive absent manifest
error.




     (iv) Each Lender’s obligation to make Committed Loans or to purchase and fund risk
participations in Swing Line Loans pursuant to 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 Swing Line Lender, 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 Committed Loans pursuant to this Section 2.03(c) is
subject to the conditions set forth in Section 4.02. No such funding of risk
participations shall relieve or otherwise impair the obligation of the Borrower to repay
Swing Line Loans, together with interest as provided herein.



     (d) Repayment of Participations.




     (i) At any time after any Lender has purchased and funded a risk participation in a
Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line
Loan, the Swing Line Lender will distribute to such Lender its Applicable Percentage thereof
in the same funds as those received by the Swing Line Lender.




     (ii) If any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line Lender under
any of the circumstances described in Section 10.05 (including pursuant to any
settlement entered into by the Swing Line Lender in its discretion), each Lender shall pay
to the Swing Line Lender 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, at a rate per annum equal to the Federal Funds Rate. The Administrative Agent
will make such demand upon the request of the Swing Line Lender. The obligations of the
Lenders under this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.



19









 





     (e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing the Borrower for interest on the Swing Line Loans. Until each Lender
funds its Base Rate Committed Loan or risk participation pursuant to this Section 2.03 to
refinance such Lender’s Applicable Percentage of any Swing Line Loan, interest in respect of such
Applicable Percentage shall be solely for the account of the Swing Line Lender.



     (f) Payments Directly to Swing Line Lender. The Borrower shall make all payments of
principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.



   2.04 Prepayments.



     (a) The Borrower may, upon notice to the Administrative Agent, at any time or from time to
time voluntarily prepay Committed 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 Committed 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 Committed 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 Committed 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. Each such prepayment shall be applied to the Committed Loans of the Lenders
in accordance with their respective Applicable Percentages.



     (b) The Borrower may, upon notice to the Swing Line Lender (with a copy to the Administrative
Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part
without premium or penalty; provided that (i) such notice must be received by the Swing
Line Lender and the Administrative Agent not later than 1:00 p.m. on the date of the prepayment,
and (ii) any such prepayment shall be in a minimum principal amount of $100,000. Each such notice
shall specify the date and amount 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.



     (c) If for any reason the Total Outstandings at any time exceed the Aggregate Commitments then
in effect, the Borrower shall immediately prepay Loans in an aggregate amount equal to such excess.



   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 of $5,000,000 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 Swing Line Sublimit exceeds the amount of
the Aggregate Commitments, such Sublimit shall be automatically reduced by the amount of such
excess. The Administrative Agent will



20









 







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.



     (a) The Borrower shall repay to the Lenders on the Maturity Date the aggregate principal
amount of Committed Loans outstanding on such date.



     (b) The Borrower shall repay each Swing Line Loan on the earlier to occur of (i) the date ten
Business Days after such Loan is made and (ii) the Maturity 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; (ii)
each Base Rate Committed 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; and (iii) each Swing Line
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.



     (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.



   2.08 Fees. (a) Facility Fee. The Borrower shall pay to the Administrative Agent for
the account of each Lender in accordance with its Applicable Percentage, a facility fee equal to
the Applicable Rate times the actual daily amount of the Aggregate Commitments (or, if the
Aggregate Commitments have terminated, on the Outstanding Amount of all Committed Loans and Swing
Line



21









 







Loans), regardless of usage. The facility fee shall accrue at all times during the
Availability Period (and thereafter so long as any Committed Loans or Swing Line Loans remain
outstanding), including at any time during which one or more of the conditions in Section
4.02 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 (and, if applicable, thereafter on
demand). The facility 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) Utilization Fee. The Borrower shall pay to the Administrative Agent for the
account of each Lender in accordance with its Applicable Percentage, a utilization fee equal to the
Applicable Rate times the Total Outstandings for each day that the Total Outstandings
exceed 50% of the actual daily amount of the Aggregate Commitments then in effect (or, if
terminated, in effect immediately prior to such termination). The utilization fee 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 (and, if applicable, thereafter on demand). The utilization fee shall be
calculated quarterly in arrears. The utilization fee shall accrue at all times that the
utilization condition set forth in the first sentence of this Section 2.08(b) is satisfied,
including at any time during which one or more of the conditions in Section 4.02 is not
met.



     (c) Other Fees. (i) The Borrower shall pay to the Arranger and the Administrative
Agent for their own respective accounts fees in the amounts and at the times specified in the Fee
Letter. 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 when
the Base Rate is determined by Bank of America’s “prime 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 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



22









 







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 Swing Line Loans. 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 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
Committed Borrowing of Eurodollar Rate Loans (or, in the case of any Committed Borrowing of Base
Rate Loans, prior to 12:00 noon on the date of such Committed Borrowing) that such Lender will not
make available to the Administrative Agent such Lender’s share of such Committed 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 Committed 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
Committed 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 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 Committed Borrowing to the Administrative Agent, then the amount so paid shall
constitute such Lender’s Committed Loan included in such Committed Borrowing. Any



23









 







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 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 the amount due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith
on demand the amount so distributed to such Lender, 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
Committed Loans, to fund participations in Swing Line Loans and to make payments pursuant to
Section 10.04(c) are several and not joint. The failure of any Lender to make any
Committed Loan, to fund any such participation 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 Committed Loan, to purchase its participation or to 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 Committed Loans made by it, or the participations in Swing Line Loans held by it resulting in
such Lender’s receiving payment of a proportion of the aggregate amount of such Committed Loans or
participations 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
Committed Loans and subparticipations in Swing Line Loans 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 Committed Loans 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



24









 







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 the Borrower pursuant to and in accordance with the express terms of this Agreement
or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Committed Loans or subparticipations in Swing Line Loans to any
assignee or participant, other than to the Borrower or any Subsidiary 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
$20,000,000; 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 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 and the Swing Line Lender (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.



     (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 (i) certifying and attaching the resolutions adopted by the
Borrower approving or consenting to such increase, and (ii) 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 are true and correct as of such earlier date, and except that for purposes



25









 







of this Section 2.13, the representations and warranties contained in subsections (a),
(b), (c) and (d) of Section 5.05 shall be deemed to refer to the most recent statements
furnished pursuant to clauses (a), (b), (c) and (d), respectively, of Section 6.01, and (B)
no Default exists. The Borrower shall prepay any Committed 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 Committed 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.



ARTICLE III.



TAXES, YIELD PROTECTION AND ILLEGALITY




   3.01 Taxes.



     (a) Payments Free of Taxes. Any and all payments by or on account of any obligation
of the Borrower hereunder or under any other Loan Document shall be made free and clear of and
without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if
the Borrower shall be required by applicable law to deduct any Indemnified Taxes (including any
Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agent or Lender, as the case may be, receives an amount
equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall timely pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.



     (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 law.



     (c) Indemnification by the Borrower. The Borrower shall indemnify the Administrative
Agent and each Lender, 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) paid by the Administrative Agent or such
Lender, 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. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender,
shall be conclusive absent manifest error.



     (d) Evidence of Payments. As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.



     (e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident
for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or



26









 







times prescribed by applicable law or reasonably requested by the Borrower or the
Administrative Agent, such properly completed and executed documentation prescribed by applicable
law as will permit such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if requested by the Borrower or the Administrative Agent,
shall deliver such other documentation prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to
determine whether or not such Lender is subject to backup withholding or information reporting
requirements.



     Without limiting the generality of the foregoing, in the event that the Borrower is resident
for tax purposes in the United States, any Foreign Lender shall deliver to the Borrower and the
Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior
to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to
time thereafter upon the request of the Borrower or the Administrative Agent, but only if such
Foreign Lender is legally entitled to do so), whichever of the following is applicable:




     (i) duly completed copies of Internal Revenue Service Form W-8BEN claiming eligibility
for benefits of an income tax treaty to which the United States is a party,




     (ii) duly completed copies of Internal Revenue Service Form W-8ECI,




     (iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the effect that
such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the
Code, (B) a “10 percent shareholder” of the Borrower within the meaning of section
881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section
881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue Service Form
W-8BEN, or




     (iv) any other form prescribed by applicable law as a basis for claiming exemption from
or a reduction in United States Federal withholding tax duly completed together with such
supplementary documentation as may be prescribed by applicable law to permit the Borrower to
determine the withholding or deduction required to be made.



     (f) Treatment of Certain Refunds. If the Administrative Agent or any Lender
determines, in its sole discretion, that it has received a refund of any 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, 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 with respect to the Taxes or Other Taxes giving rise to such refund),
net of all out-of-pocket expenses of the Administrative Agent or such Lender, 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 or such Lender, agrees to repay the amount paid over to the Borrower to the Administrative
Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This subsection shall not be construed to require the
Administrative Agent or any Lender 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.



   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 Eurodollar Rate Loans, 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



27









 







notice thereof by such Lender to the Borrower through the Administrative Agent, any obligation
of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Committed Loans to
Eurodollar Rate Loans shall be suspended 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, 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, 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. 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 (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, the obligation of the Lenders to make or maintain
Eurodollar Rate Loans shall be suspended 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 Committed
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 or for the account
of, or credit extended or participated in by, any Lender (except any reserve requirement
contemplated by Section 3.04(e));




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




     (iii) impose on any Lender or the London interbank market any other condition, cost or
expense affecting this Agreement or Eurodollar Rate Loans made by such Lender;


and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Rate Loan (or of maintaining its obligation to make any such Loan), or
to increase the cost to such Lender, or to reduce the amount of any sum received or receivable by
such Lender (whether of principal, interest or any other amount) then, upon request of such Lender,
the Borrower will pay to such Lender such additional amount or amounts as will compensate such
Lender for such additional costs incurred or reduction suffered.




28









 








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



     (c) Certificates for Reimbursement. A certificate of a Lender setting forth the
amount or amounts necessary to compensate such Lender 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 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 to demand
compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of
such Lender’s right to demand such compensation, provided that the Borrower shall not be
required to compensate a Lender pursuant to the foregoing provisions of this Section for any
increased costs incurred or reductions suffered more than one hundred eighty (180) days prior to
the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of such Lender’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 one
hundred eighty (180) day 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) arising other than by reason of
Section 3.02;



     (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



29









 





     (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.



     (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
or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if
any Lender gives a notice pursuant to Section 3.02, then such Lender shall use reasonable
efforts to designate a different Lending Office for funding or booking its Loans hereunder or to
assign its rights and obligations hereunder to another of its offices, branches or affiliates, if,
in the judgment of such Lender, 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 to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender 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 or any
Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any
Lender gives a notice pursuant to Section 3.02, 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 and repayment of all other Obligations hereunder.



ARTICLE IV.



CONDITIONS PRECEDENT TO CREDIT EXTENSIONS




   4.01 Conditions of Initial Credit Extension. The obligation of 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:



30









 






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




     (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) a favorable opinion of Lord, Bissell & Brook LLP, counsel to the Borrower,
addressed to the Administrative Agent and each Lender, as to the matters set forth in
Exhibit F and such other matters concerning the Borrower and the Loan Documents as
the Administrative Agent 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,
(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; and (C) the current Financial Strength Ratings;




     (viii) such other assurances, certificates, documents, consents or opinions as the
Administrative Agent, the Swing Line Lender 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 June 30, 2007.



31









 





     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 Committed Loan Notice requesting only a conversion of Committed
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 in all material respects on and as of
the date of such Credit Extension (provided that any representation and warranty that is
qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and
correct in all respects), except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and correct in all material
respects as of such earlier date (provided that any representation and warranty that is
qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and
correct in all respects), and except that for purposes of this Section 4.02, 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.



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



     (c) The Administrative Agent and, if applicable, the Swing Line Lender shall have received a
Request for Credit Extension in accordance with the requirements hereof.



     Each Request for Credit Extension (other than a Committed Loan Notice requesting only a
conversion of Committed 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) and (b) 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 Material Subsidiary (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) execute, deliver and perform its obligations under
the Loan Documents to which it is a party, 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.



32









 





   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 the Borrower’s 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 or any Material Subsidiary is a party or (ii) any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which the Borrower or any Material Subsidiary 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 in accordance with its terms,
subject to bankruptcy, insolvency and similar laws affecting the enforceability of creditors’
rights generally and to general principles of equity.



   5.05 Financial Statements; No Material Adverse Effect.



     (a) The Audited Financial Statements heretofore delivered to the Lenders (i) were prepared in
accordance with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; and (ii) fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries as of the 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.



     (b) The unaudited consolidated balance sheet of the Borrower and its Subsidiaries dated March
31, 2007, and the related consolidated statements of income or operations, shareholders’ equity and
cash flows for the fiscal quarter ended on that date heretofore delivered to the Lenders (i) were
prepared in accordance with GAAP consistently applied throughout the period covered thereby, except
as otherwise expressly noted therein, and (ii) fairly present in all material respects the
financial condition of the Borrower and its Subsidiaries as of the date thereof and their results
of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments.



     (c) The Annual Statement of each Material Insurance Subsidiary for the fiscal year ended
December 31, 2006 heretofore delivered to the Lenders (i) was prepared in accordance with SAP
consistently applied throughout the period covered thereby, except as otherwise expressly noted
therein; and (ii) fairly presents in all material respects the statutory financial condition of
such Material Insurance Subsidiary as of the date thereof and its results of operations for the
period covered thereby in accordance with SAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein. Each such Annual Statement complied in all
material respects with applicable Law when filed, and no deficiency has been asserted in writing
with respect to any such Annual Statement by the applicable Supervisory Authority.



     (d) The Quarterly Statement of each Material Insurance Subsidiary for the fiscal quarter ended
March 31, 2007 heretofore delivered to the Lenders (i) was prepared in accordance with SAP



33









 







consistently applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (ii) fairly presents in all material respects the statutory financial condition
of such Material Insurance Subsidiary as of the date thereof and its results of operations for the
period covered thereby in accordance with SAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein. Each such Quarterly Statement complied in
all material respects with applicable Law when filed, and no deficiency has been asserted in
writing with respect to such Annual Statement by the applicable Supervisory Authority.



     (e) 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.



   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 Material 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 Material 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 its Material Subsidiaries 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 Material Subsidiaries is subject to no Liens,
other than Liens permitted by Section 7.01.



   5.09 Environmental Compliance. The Borrower and its Material Subsidiaries conduct in the
ordinary course of business a review of the effect of existing Environmental Laws and claims
alleging potential liability or responsibility for violation of any Environmental Law on their
respective businesses, operations and properties, and as a result thereof the Borrower has
reasonably concluded that such Environmental Laws and claims could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.



   5.10 Insurance. The properties of the Borrower and its Material Subsidiaries are insured with
financially sound and reputable insurance companies not Affiliates of the Borrower, in such amounts
(after giving effect to any self-insurance compatible with the following standards), with such
deductibles and covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where the Borrower or the applicable
Material Subsidiary operates, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect.



   5.11 Taxes. The Borrower and its Material Subsidiaries have filed all Federal, state and
other material tax returns and reports required to be filed, and have paid all 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



34









 







accordance with GAAP. There is no proposed tax assessment against the Borrower or any
Subsidiary that would, if made, have a Material Adverse Effect.



   5.12 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 Plan that is intended to qualify under
Section 401(a) of the Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with respect thereto and, to
the knowledge of the Borrower, nothing has occurred which would prevent, or cause the loss of, such
qualification, except where such loss could not reasonably be expected to result in a Material
Adverse Effect. The Borrower and each ERISA Affiliate have made all required contributions to each
Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of
any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.



     (b) There are no pending or, to the 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 or is reasonably expected to occur; (ii) no Pension Plan
has any Unfunded Pension Liability; (iii) neither the Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
(and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan;
and (v) neither the Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.



     5.13 Subsidiaries. As of the date of this Agreement, the Borrower has no Subsidiaries other
than those specifically disclosed on Schedule 5.13, and all of the outstanding Equity
Interests in such Subsidiaries have been validly issued, are fully paid and nonassessable and are
owned directly or indirectly by the Borrower, free and clear of all Liens.



   5.14 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) None of the Borrower or any Subsidiary is or is required to be registered as an
“investment company” under the Investment Company Act of 1940.



   5.15 Disclosure. On or before the date of this Agreement. the Borrower has disclosed to the
Administrative Agent and the Lenders all agreements, instruments and corporate or other
restrictions to which it or any of its Subsidiaries is subject as of the date of this Agreement and
all other matters known to it as of the date of this Agreement, 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



35









 







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.



   5.16 Compliance with Laws. The Borrower and its Subsidiaries are 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 appropriate
proceedings diligently conducted or (b) the failure to comply therewith, either individually or in
the aggregate, could not reasonably be expected to have a Material Adverse Effect.



   5.17 Taxpayer Identification Number. The Borrower’s true and correct U.S. taxpayer
identification number is set forth on Schedule 10.02.



ARTICLE VI.



AFFIRMATIVE COVENANTS




     So long as any Lender shall have any Commitment hereunder, or any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, 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
Material 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 or required to be filed with the SEC, 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, 2007), a consolidated and consolidating balance sheet of the Borrower and its Subsidiaries as
at the end of such fiscal year, and the related consolidated and consolidating statements of income
or operations, 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, such consolidated statements to be 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, and
such consolidating statements to be certified by the chief executive officer, chief financial
officer, treasurer or controller of the Borrower to the effect that such statements are fairly
stated in all material respects when considered in relation to the consolidated financial
statements of the Borrower and its Subsidiaries;



     (b) as soon as available or required to be filed with the SEC, 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 June 30, 2007), a consolidated and consolidating balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the related
consolidated and consolidating statements of income or operations, shareholders’ equity and cash
flows for such fiscal quarter and for the portion of the Borrower’s fiscal year then ended, setting
forth in each case in comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the



36









 







corresponding portion of the previous fiscal year, all in reasonable detail, such consolidated
financial statements to be certified by the chief executive 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;



     (c) as soon as available, but in any event within 180 days after the end of each fiscal year
of each Material Insurance Subsidiary, a copy of the Annual Statement of such Material Insurance
Subsidiary for such fiscal year prepared in accordance with SAP and as filed with its Supervisory
Authority, audited and accompanied by a report of an independent certified public accountant of
nationally recognized standing reasonably acceptable to the Administrative Agent, which report
shall be prepared in accordance with statutory 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; and



     (d) as soon as available, but in any event within 80 days after the end of each of the first
three fiscal quarters of each fiscal year of each Material Insurance Subsidiary, a copy of the
Quarterly Statement of such Material Insurance Subsidiary for such fiscal quarter, prepared in
accordance with SAP and as filed with its Supervisory Authority, certified by a Responsible Officer
of such Material Insurance Subsidiary as fairly presenting in all material respects the financial
condition and results of operations of such Material Insurance Subsidiary in accordance with SAP,
subject only to normal year-end audit adjustments and the absence of footnotes.



As to any information contained in materials furnished pursuant to Section 6.02(d), 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 Section
6.01(a), a certificate of its independent certified public accountants certifying such
financial statements and stating that in making the examination necessary therefor no knowledge was
obtained of any Default under the financial covenants set forth herein or, if any such Default
shall exist, stating the nature and status of such event;



     (b) 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 June 30, 2007), a duly completed Compliance Certificate signed by the chief
executive officer, chief financial officer, treasurer or controller of the Borrower;



     (c) promptly after any request by the Administrative Agent or any Lender, copies of any
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;



     (d) 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;



37









 





     (e) promptly, and in any event within five 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 investigation or possible
investigation or other inquiry by such agency regarding financial or other operational results of
the Borrower or any Subsidiary;



     (f) to the extent permitted by Law, not later than 30 days after received, a copy of any
material financial examination report or material market conduct examination report by any
Supervisory Authority with respect to any Material Insurance Subsidiary;



     (g) within five Business Days after received, notice of the actual suspension, termination or
revocation of any material license or permit of the Borrower or any Material Insurance Subsidiary
and notice of a hearing relating to such a suspension, termination or revocation, including any
request by a Supervisory Authority to take, or refrain from taking, any action which could
reasonably be expected to have a Material Adverse Effect;



     (h) to the extent permitted by Law, within five Business Days after received, notice of any
material pending or threatened investigation or regulatory proceeding (other than routine periodic
investigations or reviews) of the Borrower or any Material Insurance Subsidiary by any Supervisory
Authority; 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 or Section 6.02
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 that
requests 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. Notwithstanding anything contained herein, in every
instance the Borrower shall be required to provide paper copies of the Compliance Certificates
required by Section 6.02(b) to the Administrative Agent. Except for such Compliance
Certificates, the Administrative Agent shall have no obligation to request the delivery or to
maintain 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 for delivery, and each Lender 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 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



38









 







Borrower hereby agrees that so long as the Borrower is the issuer of any outstanding debt or
equity securities that are registered or issued pursuant to a private offering or is actively
contemplating issuing any such securities (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, 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 Investor;” 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 Investor.” Notwithstanding the foregoing, the Borrower shall be under no obligation to
mark any Borrower Materials “PUBLIC.”



   6.03 Notices. Promptly notify the Administrative Agent and each Lender:



     (a) of the occurrence of any Default;



     (b) of any matter (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 applicable
Environmental Laws) that has resulted or could reasonably be expected to result in a Material
Adverse Effect;



     (c) of the occurrence of any ERISA Event;



     (d) of any material change in accounting policies or financial reporting practices by the
Borrower or any Material Subsidiary; and



     (e) of any announcement by Moody’s or S&P of any change or possible change in a Financial
Strength Rating.



     Each notice pursuant to this Section 6.03 (other than Section 6.03(e)) 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 tax liabilities, assessments 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 Material Subsidiary; (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 7.04 or 7.05; (b) take all reasonable
action to maintain all rights,



39









 







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; except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect, 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, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.



   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. Maintain proper books of record and account, in which full, true and
correct entries in conformity with GAAP and SAP, as applicable, 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.



   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 such reasonable times during normal business hours and as often as may be
reasonably desired, 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 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, or any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, the Borrower shall not, nor shall it permit any
Material Subsidiary to, directly or indirectly:



40









 





   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
7.03(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 7.03(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
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 7.03(e); 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; and



     (j) other Liens provided that the obligations or Indebtedness secured by such Liens does not
exceed 10% of the consolidated total assets of the Borrower and its Subsidiaries at any time.



   7.02 Investments. Make any Investments, except:



     (a) Investments held by the Borrower or such Subsidiary in the form of cash equivalents or
investment grade debt;



41









 





     (b) advances to officers, directors and employees of the Borrower and Subsidiaries in the
ordinary course of business for travel, entertainment, relocation and analogous ordinary business
purposes;



     (c) Investments of the Borrower in any Subsidiary and Investments of any Subsidiary in the
Borrower or in another Subsidiary;



     (d) Investments consisting of extensions of credit in the nature of accounts receivable or
notes receivable arising from the grant of trade credit in the ordinary course of business, and
Investments received in satisfaction or partial satisfaction thereof from financially troubled
account debtors to the extent reasonably necessary in order to prevent or limit loss;



     (e) Guarantees permitted by Section 7.03; and



     (f) other Investments so long as at the time thereof and after giving effect thereto, no
Default exists.



   7.03 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:



     (a) Indebtedness under the Loan Documents;



     (b) Indebtedness outstanding on the date hereof and listed on Schedule 7.03 and any
refinancings, refundings, renewals or extensions thereof; provided that the amount of such
Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension
except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and
expenses reasonably incurred, in connection with such refinancing and by an amount equal to any
existing commitments unutilized thereunder;



     (c) Guarantees of the Borrower or any Subsidiary in respect of Indebtedness otherwise
permitted hereunder of the Borrower or any Subsidiary;



     (d) obligations (contingent or otherwise) of the Borrower or any Subsidiary 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;



     (e) Indebtedness in respect of capital leases, Synthetic Lease Obligations 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 $10,000,000; and



     (f) other unsecured Indebtedness; provided that after giving effect to the incurrence
thereof and the repayment of any funded Indebtedness with the proceeds thereof, the ratio of (i)
the consolidated funded Indebtedness of the Borrower and its Subsidiaries to (ii) the sum of the
consolidated funded Indebtedness of the Borrower and its Subsidiaries plus Adjusted Consolidated
Net Worth does not exceed 0.35 to 1.00.



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   7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into another
Person, or Dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any
Person, 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 when any wholly-owned Subsidiary is merging with another Subsidiary, the wholly-owned
Subsidiary shall be the continuing or surviving Person; and



     (b) any Subsidiary may Dispose of all or substantially all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or to another Subsidiary; provided that if the
transferor in such a transaction is a Subsidiary, then the transferee must either be the Borrower
or a Subsidiary.



   7.05 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 inventory in the ordinary course of business;



     (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;



     (e) Dispositions permitted by Section 7.04; and



     (f) other Dispositions during any fiscal year for an aggregate consideration that does not
exceed 10% of the consolidated total assets of the Borrower and its Subsidiaries as of the end of
the immediately preceding fiscal year.



   7.06 Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, or
incur any obligation (contingent or otherwise) to do so, except that:



     (a) each Subsidiary 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; and



     (d) so long as no Default shall have occurred and be continuing at the time or would result
therefrom, the Borrower may declare or make other Restricted Payments.



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   7.07 Change in Nature of Business. Engage in any material line of business substantially
different from those lines of business conducted by the Borrower and its Subsidiaries on the date
hereof or any business substantially related or incidental thereto.



   7.08 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 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.



   7.09 Burdensome Agreements. Enter into any Contractual Obligation (other than this Agreement
or any other Loan Document and other than with a Supervisory Authority) that (a) limits the ability
(i) of any Subsidiary to make Restricted Payments to the Borrower or other Subsidiary or to
otherwise transfer property to the Borrower or other Subsidiary, (ii) of any Subsidiary to
Guarantee the Indebtedness of the Borrower or (iii) of the Borrower or any Subsidiary to create,
incur, assume or suffer to exist Liens on property of such Person; provided,
however, that this clause (iii) shall not prohibit any negative pledge incurred or provided
in favor of any holder of Indebtedness permitted under Section 7.03(e) solely to the extent
any such negative pledge relates to the property financed by or the subject of such Indebtedness;
or (b) requires the grant of a Lien to secure an obligation of such Person if a Lien is granted to
secure another obligation of such Person.



   7.10 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.



   7.11 Financial Covenants.



     (a) Adjusted Consolidated Net Worth. Permit Adjusted Consolidated Net Worth at any time to be
less than the sum of (i) $403,896,500, and (ii) an amount equal to 50% of the positive Consolidated
Net Income earned in each full fiscal quarter ending after the Closing Date (with no deduction for
a net loss in any such fiscal quarter).



     (b) Risk-to-Capital Ratio. Permit at any time the Risk to Capital Ratio of TGIC to be greater
than 22.0 to 1.0.



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 (ii) within three days after the same becomes due,
any interest on any Loan, 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 6.03(a), 6.05(a), 6.10 or
6.11 or Section 7.01 through 7.07, 7.10 or 7.11; or



44









 





     (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 after notice thereof from the
Administrative Agent; or



     (d) Representations and Warranties. Any representation, warranty, certification or
statement of fact made or deemed made by or on behalf of the Borrower 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 (or in any respect, if such representation, warranty,
certification or statement of fact is qualified by “materiality”, “Material Adverse Effect” or
similar language) 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, 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
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 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 Material Subsidiary 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



45









 





     (h) Judgments. There is entered against the Borrower or any Material Subsidiary (i)
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) 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 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) Loss of Licenses. Any Material Insurance Subsidiary loses any material license or
permit to engage in the insurance business that could reasonably be expected to have a Material
Adverse Effect; or



     (l) Change of Control. There occurs any Change of Control.



   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 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; and



     (c) exercise on behalf of itself and the Lenders all rights and remedies available to it and
the Lenders 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 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 without further act of the Administrative Agent or any Lender.




46









 








   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), any amounts received on
account of the Obligations shall 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,
expenses and other amounts (other than principal and interest) payable to the Lenders (including
fees, charges and disbursements of counsel to the respective Lenders 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
interest on the Loans and other Obligations, ratably among the Lenders 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, ratably among the Lenders in proportion to the respective amounts described in this
clause Fourth held by them; 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.



ARTICLE IX. ADMINISTRATIVE AGENT




   9.01 Appointment and Authority.



     Each of the Lenders 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 thereto. The provisions of this Article are solely for the benefit of the
Administrative Agent and the Lenders, 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:



47









 






     (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 or a Lender.



     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 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, that by its terms must be fulfilled to the satisfaction of a Lender, the
Administrative Agent may presume that such condition is satisfactory to such Lender unless the
Administrative Agent shall have received notice to the contrary from such Lender prior to the
making of such Loan. 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.



48









 





   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 and the Borrower. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of
any such bank with an office in the United States. If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation, then the retiring Administrative
Agent may on behalf of the Lenders, 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 be discharged from its duties and obligations hereunder and under the
other Loan Documents 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 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.



     Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also
constitute its resignation as Swing Line Lender. 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 Swing Line Lender and (b) the retiring
Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder
or under the other Loan Documents.



   9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender 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 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.



49









 





   9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the
Bookrunners, Arrangers or [other titles as necessary] listed on the cover 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 or a Lender 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 Borrower or its
Subsidiaries, the Administrative Agent (irrespective of whether the principal of any Loan 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 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 and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders and the Administrative
Agent and their respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Sections 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 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, 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 any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Lender to authorize the
Administrative Agent to vote in respect of the claim of any Lender 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:



     (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;



50









 





     (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 (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 at the Default Rate 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 to reduce any fee payable hereunder;



     (e) change Section 2.12 or 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 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;
(ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender
in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender
under this Agreement; and (iii) the Fee Letter may be amended, or rights or privileges thereunder
waived, in a writing executed only by the parties thereto. Notwithstanding anything to the
contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not be increased or
extended without the consent of such Lender.




   10.02 Notices; Effectiveness; Electronic Communication.



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


Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall
be deemed to have been given when received; notices sent by telecopier shall be deemed to have been
given when sent (except that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next business day for the recipient).
Notices delivered


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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
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 pursuant to Article II if such
Lender 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 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 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 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 and the
Swing Line Lender 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 and the Swing Line Lender. 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



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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 and Lenders. The Administrative Agent and the
Lenders shall be entitled to rely and act upon any notices (including telephonic Committed Loan
Notices and Swing Line Loan Notices) purportedly given by or on behalf of the Borrower even if (i)
such notices were not made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by
the recipient, varied from any confirmation thereof. The Borrower shall indemnify the
Administrative Agent, 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. No failure by any Lender 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.



   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), and (ii) all out-of-pocket expenses incurred
by the Administrative Agent or any Lender (including the reasonable fees, charges and disbursements
of any counsel for the Administrative Agent or any Lender, 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 hereunder,
including all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.



     (b) Indemnification by the Borrower. The Borrower shall indemnify the Administrative
Agent (and any sub-agent thereof), each Lender 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 the use or proposed use



53









 







of the proceeds therefrom, (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 thereto, IN ALL CASES, WHETHER
OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE
NEGLIGENCE OF THE INDEMNITEE; provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or related expenses (x)
are determined by a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a
claim brought by the 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), each Lender severally agrees to pay to the
Administrative Agent (or any such sub-agent), such Lender’s Applicable Percentage (determined as of
the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount, provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent), or against any Related Party of any of the foregoing
acting for the Administrative Agent (or any such sub-agent) 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 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 and the Swing Line Lender, 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 or any Lender, or the Administrative Agent 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 or such Lender in
its discretion) to be repaid to a



54









 







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 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 under clause (b) of the preceding
sentence shall survive the payment in full of the Obligations and the termination of this
Agreement.



   10.06 Successors and Assigns.



     (a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that 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 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),
participations in Swing Line Loans) 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



55









 







treated as a single assignment for purposes of determining whether such minimum
amount has been met.




     (ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and obligations
under this Agreement with respect to the Loans or the Commitment assigned, except that this
clause (ii) shall not apply to the Swing Line Lender’s rights and obligations in respect of
Swing Line Loans;




     (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
or delayed) 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;




     (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 Swing Line Lender (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment.




     (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 Borrower. No such assignment shall be made to the
Borrower or any of the Borrower’s Affiliates or Subsidiaries.




     (vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.


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.




56









 








     (c) Register. The Administrative Agent, acting solely for this purpose as an agent of
the Borrower, 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 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. 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.



     (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 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 Swing Line Loans) 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 and the Lenders 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 that would be a Foreign Lender if it were a Lender 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) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption 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



57









 







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.



     (h) Resignation as Swing Line Lender 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 Swing Line Lender. In the event of any such resignation as Swing Line
Lender, the Borrower shall be entitled to appoint from among the Lenders a successor Swing Line
Lender hereunder; provided, however, that no failure by the Borrower to appoint any
such successor shall affect the resignation of Bank of America as Swing Line Lender, as the case
may be. If Bank of America resigns as Swing Line Lender, it shall retain all the rights of the
Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and
outstanding as of the effective date of such resignation, including the right to require the
Lenders to make Base Rate Committed Loans or fund risk participations in outstanding Swing Line
Loans pursuant to Section 2.03(c). Upon the appointment of a successor Swing Line Lender,
such successor shall succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring Swing Line Lender.



   10.07 Treatment of Certain Information; Confidentiality. Each of the Administrative Agent and
the Lenders 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, 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 Supervisory Authority or other 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 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 or any
Lender 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.



     Each of the Administrative Agent and the Lenders 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



58









 







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 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 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,
irrespective of whether or not such Lender 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 different from the branch or office holding such
deposit or obligated on such indebtedness. The rights of each Lender and their respective
Affiliates under this Section are in addition to other rights and remedies (including other rights
of setoff) that such Lender or their respective Affiliates may have. Each Lender 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.



   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 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.



59









 





   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.



   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:



     (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 the outstanding principal of
its Loans, 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 NEW YORK CITY, NEW YORK AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN
DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER 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,



60









 







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 OR ANY LENDER 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 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, and
acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and other services
regarding this Agreement provided by the Administrative Agent and the Arranger, are arm’s-length
commercial transactions between the Borrower and its Affiliates, on the one hand, and the
Administrative Agent and the 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 the 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 the Arranger has any obligation to the



61









 







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 Arranger 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 the Arranger has any obligation to disclose
any of such interests to the Borrower or 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 and the 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 USA PATRIOT Act Notice. 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.



[Remainder of Page Intentionally Left Blank]




62









 





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



	 	 	 	 	 
	 	TRIAD GUARANTY INC., as the Borrower

 	 
	 	/s/ Kenneth W. Jones
 	 
	 	Kenneth W. Jones 	 
	 	Senior Vice President and Chief Financial Officer 	 
	 



Signature Page to Triad Guaranty Credit Agreement




 









 









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



	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as

Administrative Agent

 	 
	 	/s/ Aamir Saleem
 	 
	 	Aamir Saleem 	 
	 	Vice President 	 
	 



Signature Page to Triad Guaranty Credit Agreement




 









 









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



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

and Swing Line Lender

 	 
	 	/s/ Shelly K. Harper
 	 
	 	Shelly K. Harper 	 
	 	Senior Vice President 	 
	 



Signature Page to Triad Guaranty Credit Agreement




 









 









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



	 	 	 	 	 
	 	LASALLE BANK, NATIONAL ASSOCIATION,

as a Lender

 	 
	 	/s/ Andrew Haak
 	 
	 	Andrew Haak 	 
	 	Senior Vice President 	 
	 



Signature Page to Triad Guaranty Credit Agreement




 









 









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



	 	 	 	 	 
	 	BRANCH BANKING & TRUST COMPANY,

as a Lender

 	 
	 	/s/ Michael P. Gwyn
 	 
	 	Michael P. Gwyn 	 
	 	Senior Vice President 	 
	 



Signature Page to Triad Guaranty Credit Agreement




 









 








SCHEDULE 2.01




COMMITMENTS

AND APPLICABLE PERCENTAGES




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Applicable
	Lender	 	Commitment	 	Percentage
	Bank of America, N.A.
	 	$	30,000,000	 	 	 	37.500000000	%
	LaSalle Bank, National Association
	 	$	25,000,000	 	 	 	31.250000000	%
	Branch Banking & Trust Company
	 	$	25,000,000	 	 	 	31.250000000	%
	Total
	 	$	80,000,000	 	 	 	100.000000000	%






 









 






SCHEDULE 5.06




LITIGATION




1. Broessel v. TGIC — Purported class action alleging violation of the Fair Credit Reporting Act
due to failure to provide adverse action letters when borrowers received less than the best
available mortgage insurance rates.



2. Bankers Life Insurance Company v. TGIC, et. al. — Suit by investor in MBS trust purporting to
assert claims for negligent misrepresentation, fraud, breach of fiduciary duty, breach of intended
third party beneficiary contract, and civil conspiracy, in connection with a pool of consumer
mortgage loans covered by a Triad insurance policy. Plaintiff’s counsel filed the identical
complaint in the United States District Courts for the Northern District of Illinois (Sterling
Federal) and the Middle District of Florida (Bankers Life Ins.).



3. Sterling Federal Bank Company v. TGIC, et. al. — Suit by investor in MBS trust purporting to
assert claims for negligent misrepresentation, fraud, breach of fiduciary duty, breach of intended
third party beneficiary contract, and civil conspiracy, in connection with a pool of consumer
mortgage loans covered by a Triad insurance policy. Plaintiff’s counsel filed the identical
complaint in the United States District Courts for the Northern District of Illinois (Sterling
Federal) and the Middle District of Florida (Bankers Life Ins.).



The disclosures set forth on this Schedule 5.06 do not constitute a representation, warranty or
admission by the Borrower that it believes that the matters disclosed, if adversely determined,
could reasonably be expected to have a Material Adverse Effect.



1









 





SCHEDULE 5.13




SUBSIDIARIES




	 	 	 	 	 	 	 
	 	 	 	 	% Equity Interest Owned
	 	 	 	 	Directly or Indirectly by the
	Name of Subsidiary	 	Jurisdiction of Organization	 	Borrower
	Triad Guaranty Insurance Corporation
	 	Illinois	 	 	100	%
	Triad Guaranty Assurance Corporation
	 	Illinois	 	 	100	%
	Triad Re Insurance Corporation
	 	Vermont	 	 	100	%
	Triad Guaranty Insurance
Corporation Canada
	 	Canada	 	 	100	%






1









 






SCHEDULE 7.01




EXISTING LIENS




None




1









 





SCHEDULE 7.03




EXISTING INDEBTEDNESS





	1.	 	Notes due January 15, 2028, having a carrying value of $34,510,000 at December 31, 2006.




1









 











SCHEDULE 10.02




ADMINISTRATIVE AGENT’S OFFICE;

CERTAIN ADDRESSES FOR NOTICES




TRIAD GUARANTY INC.:

101 South Stratford Road

Winston-Salem, North Carolina 27104

Attention: Kenneth W. Jones

Telephone: (336) 723-1282

Telecopier: (336) 723-2824

Electronic Mail: kjones@tgic.com

Website Address: www.triadguaranty.com

U.S. Taxpayer Identification Number: 56-1838519




with copy to:



TRIAD GUARANTY INC.:

101 South Stratford Road

Winston-Salem, North Carolina 27104

Attention: Earl F. Wall, General Counsel

Telephone: (336) 723-1282

Telecopier: (336) 331-1519

Electronic Mail: ewall@tgic.com




ADMINISTRATIVE AGENT:




Administrative Agent’s Office

(for payments and Requests for Credit Extensions):

Bank of America, N.A.

Agency Management

2001 Clayton Road, 2nd Floor

Mail Code: CA4-702-02-25

Concord, CA 94520

Attention: Jennifer Baines

Telephone: (925) 675-8409

Telecopier: (888) 969-2294

Electronic Mail: Jennifer.baines@bankofamerica.com

Account No.: 3750836479

Ref: Triad Guaranty

ABA# 026009593




Other Notices as Administrative Agent:

Bank of America, N.A.

Street Address: 1455 Market Street, 5th Floor

Mail Code: CA5-701-05-19

City, State ZIP Code: San Francisco, CA 94103

Attention: Aamir Saleem

Telephone: (415) 436-2769

Telecopier: (415) 503-5089

Electronic Mail: aamir.saleem@bankofamerica.com




1









 





SWING LINE LENDER:




Bank of America, N.A.

2001 Clayton Road, 2nd Floor

Mail Code: CA4-702-02-25

Concord, CA 94520

Attention: Jennifer Baines

Telephone: (925) 675-8409

Telecopier: (888) 969-2294

Electronic Mail: Jennifer.baines@bankofamerica.com

Account No.: 3750836479

Ref: Triad Guaranty

ABA# 026009593




2









 





EXHIBIT A




FORM OF COMMITTED LOAN NOTICE




Date:                     ,           




To: Bank of America, N.A., as Administrative Agent




Ladies and Gentlemen:




     Reference is made to that certain Credit Agreement, dated as of June 28, 2007 (as amended,
restated, extended, supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined), among Triad
Guaranty Inc., a Delaware corporation (the “Borrower”), the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent and Swing Line Lender.



     The undersigned hereby requests (select one):



     o A Borrowing of Committed Loans            o A conversion or continuation of Loans




	 	1.	 	On                                          (a Business Day).
	 
	 	2.	 	In the amount of $                    .
	 
	 	3.	 	Comprised of  





[Type of Committed Loan requested]





	 	4.	 	For Eurodollar Rate Loans: with an Interest Period of       months.





     The Committed Borrowing, if any, requested herein complies with the provisos to the first
sentence of Section 2.01 of the Agreement.



	 	 	 	 	 	 	 
	 	 	TRIAD GUARANTY INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 




Exhibit A


- 1 -









 






EXHIBIT B




FORM OF SWING LINE LOAN NOTICE




Date:                     ,      




	 	 	 
	To:

	 	Bank of America, N.A., as Swing Line Lender
	 

	 	Bank of America, N.A., as Administrative Agent






Ladies and Gentlemen:




     Reference is made to that certain Credit Agreement, dated as of June 28, 2007 (as amended,
restated, extended, supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined), among Triad
Guaranty Inc., a Delaware corporation (the “Borrower”), the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent and Swing Line Lender.



     The undersigned hereby requests a Swing Line Loan:




	 	1.	 	On                                          (a Business Day).
	 
	 	2.	 	In the amount of $                    .





     The Swing Line Borrowing requested herein complies with the requirements of the provisos to
the first sentence of Section 2.03(a) of the Agreement.



	 	 	 	 	 	 	 
	 	 	TRIAD GUARANTY INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 




Exhibit B



- 1 -









 






EXHIBIT C




FORM OF NOTE




                    




     FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay to
                     or registered assigns (the “Lender”), in accordance with the
provisions of the Agreement (as hereinafter defined), the principal amount of each Loan from time
to time made by the Lender to the Borrower under that certain Credit Agreement, dated as of June
28, 2007 (as amended, restated, extended, supplemented or otherwise modified in writing from time
to time, the “Agreement;” the terms defined therein being used herein as therein defined),
among the Borrower, the Lenders from time to time party thereto, and Bank of America, N.A., as
Administrative Agent and Swing Line Lender.



     The Borrower promises to pay interest on the unpaid principal amount of each Loan from the
date of such Loan until such principal amount is paid in full, at such interest rates and at such
times as provided in the Agreement. Except as otherwise provided in Section 2.03(f) of the
Agreement with respect to Swing Line Loans, all payments of principal and interest shall be made to
the Administrative Agent for the account of the Lender in Dollars in immediately available funds at
the Administrative Agent’s Office. If any amount is not paid in full when due hereunder, such
unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date
of actual payment (and before as well as after judgment) computed at the per annum rate set forth
in the Agreement.



     This Note is one of the Notes referred to in the Agreement, is entitled to the benefits
thereof and may be prepaid in whole or in part subject to the terms and conditions provided
therein. Upon the occurrence and continuation of one or more of the Events of Default specified in
the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable all as provided in the Agreement. Loans made by the Lender shall
be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary
course of business. The Lender may also attach schedules to this Note and endorse thereon the date,
amount and maturity of its Loans and payments with respect thereto.



     The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment,
protest and demand and notice of protest, demand, dishonor and non-payment of this Note.


Exhibit C



- 1 -









 





     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.



	 	 	 	 	 	 	 
	 	 	TRIAD GUARANTY INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 





Exhibit C



- 2 -









 





LOANS AND PAYMENTS WITH RESPECT THERETO




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Amount of	 	Outstanding	 	 
	 	 	 	 	 	 	End of	 	Principal or	 	Principal	 	 
	 	 	Type of Loan	 	Amount of	 	Interest	 	Interest Paid	 	Balance This	 	Notation
	Date	 	Made	 	Loan Made	 	Period	 	This Date	 	Date	 	Made By
	 
	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    
	 	                    





Exhibit C



- 3 -









 





EXHIBIT D




FORM OF COMPLIANCE CERTIFICATE




Financial Statement Date:                ,




To: Bank of America, N.A., as Administrative Agent




Ladies and Gentlemen:




     Reference is made to that certain Credit Agreement, dated as of June 28, 2007 (as amended,
restated, extended, supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined), among Triad
Guaranty Inc., a Delaware corporation (the “Borrower”), the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent and Swing Line Lender.



     The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the                                         
of the Borrower, and that, as such, he/she is authorized to execute and deliver this Certificate to
the Administrative Agent on the behalf of the Borrower, and that:



[Use following paragraph 1 for fiscal year-end financial statements]




     1. The Borrower has delivered the year-end audited financial statements required by
Section 6.01(a) of the Agreement for the fiscal year of the Borrower ended as of the above
date, together with the report and opinion of an independent certified public accountant required
by such section.



[Use following paragraph 1 for fiscal quarter-end financial statements]




     1. The Borrower has delivered the unaudited financial statements required by Section
6.01(b) of the Agreement for the fiscal quarter of the Borrower ended as of the above date.
Such financial statements fairly present the financial condition, results of operations and cash
flows of the Borrower and its Subsidiaries in accordance with GAAP as at such date and for such
period, subject only to normal year-end audit adjustments and the absence of footnotes.



     2. The undersigned has reviewed and is familiar with the terms of the Agreement and has made,
or has caused to be made under his/her supervision, a review of the transactions and condition
(financial or otherwise) of the Borrower during the accounting period covered by such financial
statements.



     3. A review of the activities of the Borrower during such fiscal period has been made under
the supervision of the undersigned with a view to determining whether during such fiscal period the
Borrower performed and observed all its Obligations under the Loan Documents, and



[select one:]




     [to the knowledge of the undersigned, no Default has occurred and is continuing as of the date
of this Certificate.]



—or—




     [to the knowledge of the undersigned, the following is a list of each Default that has
occurred and is continuing as of the date of this Certificate, and its nature and status:]



Exhibit D




 -1 -









 





     4. The representations and warranties of the Borrower contained in Article V of the
Agreement, and any representations and warranties of the Borrower that are contained in any
document furnished at any time under or in connection with the Loan Documents, are true and correct
in all material respects on and as of the date hereof (provided that any representation and
warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language are
true and correct in all respects), except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct in all material
respects as of such earlier date (provided that any representation and warranty that is
qualified as to “materiality”, “Material Adverse Effect” or similar language are true and correct
in all respects), and except that for purposes of this Compliance Certificate, the representations
and warranties contained in subsections (a), (b), (c) and (d) of Section 5.05 of the
Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a),
(b), (c) and (d), respectively, of Section 6.01 of the Agreement, including the statements
in connection with which this Compliance Certificate is delivered.



     5. The financial covenant analyses and information set forth on Schedule 1 attached
hereto are true and accurate on and as of the date of this Certificate.



     IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of                     ,                     .



	 	 	 	 	 	 	 
	 	 	TRIAD GUARANTY INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 





Exhibit D




 -2 -









 





For the Quarter/Year ended                     (“Statement Date”)




SCHEDULE 1



to the Compliance Certificate



($ in 000’s)




I. Section 7.11(a) — Adjusted Consolidated Net Worth.




II. Section 7.11 (b) — Risk to Capital Ratio.




Exhibit D




 -3 -









 





EXHIBIT E




ASSIGNMENT AND ASSUMPTION




     This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the
Effective Date set forth below and is entered into by and between [the][each] Assignor identified
in item 1 below ([the][each, an] “Assignor”) and [the][each] Assignee identified in item 2
below ([the][each, an] “Assignee”). [It is understood and agreed that the rights and
obligations of [the Assignors][the Assignees] hereunder are several and not joint.] Capitalized
terms used but not defined herein shall have the meanings given to them in the Credit Agreement
identified below (the “Credit Agreement”), receipt of a copy of which is hereby
acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached
hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment
and Assumption as if set forth herein in full.



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



	 	 	 	 	 
	1.

	 	Assignor[s]:
	 	                                        
	 
	 	 	 	 
	 

	 	 	 	                                        
	 
	 	 	 	 
	2.

	 	Assignee[s]:
	 	                                        
	 
	 	 	 	 
	 

	 	 	 	                                        
	 
	 	 	 	 
	 	 	[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]
	 
	 	 	 	 
	3.

	 	Borrower(s):
	 	                                        







	4.	 	Administrative Agent: Bank of America, N.A., as the administrative agent under the
Credit Agreement
	 
	5.	 	Credit Agreement: [Credit Agreement, dated as of June 28, 2007 among Triad Guaranty
Inc., the Lenders from time to time party thereto, and Bank of America, N.A., as
Administrative Agent and Swing Line Lender





Exhibit E




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	6.	 	Assigned Interest[s]:





	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Aggregate	 	 	 	 	 	 
	 	 	 	 	 	 	Amount of	 	 	 	Percentage	 	 
	 	 	 	 	Facility	 	Commitment	 	Amount of	 	Assigned of	 	CUSIP
	Assignor[s]	 	Assignee[s]	 	Assigned	 	for all Lenders	 	Commitment	 	Commitment	 	Number
	 
	 	 
	 	                    
	 	$                    
	 	$                    
	 	                    %
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	                    
	 	$                    
	 	$                    
	 	                    %	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	                    
	 	$                    
	 	$                    
	 	                    %	 	 







	[7.	 	Trade Date:                     ]




Effective Date:                     , 20___[TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE
THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]




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



	 	 	 	 	 
	 	ASSIGNOR

[NAME OF ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 
	 	ASSIGNEE

[NAME OF ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 



	 	 	 	 	 
	Consented to and Accepted:	 	 
	 
	 	 	 	 
	BANK OF AMERICA, N.A., as	 	 
	   Administrative Agent
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	Consented to:	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 






Exhibit E




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ANNEX 1 TO ASSIGNMENT AND ASSUMPTION




STANDARD TERMS AND CONDITIONS FOR




ASSIGNMENT AND ASSUMPTION




          1. Representations and Warranties.




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




          1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all the requirements to be an assignee under Section
10.06(b)(iii), (v) and (vi) of the Credit Agreement (subject to such consents,
if any, as may be required under Section 10.06(b)(iii) of the Credit Agreement), (iii) from
and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a
Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire
assets of the type represented by [the][such] Assigned Interest and either it, or the Person
exercising discretion in making its decision to acquire [the][such] Assigned Interest, is
experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement,
and has received or has been accorded the opportunity to receive copies of the most recent
financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such other
documents and information as it deems appropriate to make its own credit analysis and decision to
enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it
has, independently and without reliance upon the Administrative Agent or any other Lender and based
on such documents and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned
Interest, and (vii) if it is a Foreign Lender, attached hereto is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by
[the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance upon the
Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with
their terms all of the obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.




          2. Payments. From and after the Effective Date, the Administrative Agent shall make
all payments in respect of [the][each] Assigned Interest (including payments of principal,
interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to
but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued
from and after the Effective Date.




          3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment




Exhibit E




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and Assumption may be executed in any number of counterparts, which together shall constitute
one instrument. Delivery of an executed counterpart of a signature page of this Assignment and
Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this
Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in
accordance with, the law of the State of New York [confirm that choice of law provision parallels
the Credit Agreement].




Exhibit E




- 4 -









 





EXHIBIT F




OPINION MATTERS




     The matters contained in the following Sections of the Credit Agreement should be covered by
the legal opinion in a manner and to an extent satisfactory to Borrower’s and Administrative
Agent’s counsel:




	 	•	 	Section 5.01(a), (b) and (c)
	 
	 	•	 	Section 5.02
	 
	 	•	 	Section 5.03
	 
	 	•	 	Section 5.04
	 
	 	•	 	Section 5.14(b)





Exhibit F





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