Exhibit 10.2


 


EXECUTION COPY


 




 





$350,000,000


 


 


THIRD AMENDED AND RESTATED

CREDIT AGREEMENT


 


 


among


 


 


FINANCIAL SECURITY ASSURANCE
INC.,


 


 


FSA INSURANCE COMPANY,


 


 


VARIOUS BANKS,


 


 


and


 


 


BAYERISCHE LANDESBANK,

Acting Through Its New York Branch

Individually and as Agent


 


 


Dated as of April 30,
2005


 




 





 





















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  I

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  DEFINITIONS
  AND PRINCIPLES OF CONSTRUCTION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
   

  	
  Defined Terms

  	
   

  
	
  Section 1.02.

  	
   

  	
  Principles of
  Construction

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


	
  AMOUNT AND TERMS
  OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
   

  	
  The Loans

  	
   

  
	
  Section 2.02.

  	
   

  	
  Amount of Each
  Borrowing

  	
   

  
	
  Section 2.03.

  	
   

  	
  Notice of Borrowing

  	
   

  
	
  Section
  2.04.

  	
   

  	
  Disbursement
  of Funds; Defaulting Bank’s Obligations

  	
   

  
	
  Section 2.05.

  	
   

  	
  Notes

  	
   

  
	
  Section 2.06.

  	
   

  	
  Interest

  	
   

  
	
  Section 2.07.

  	
   

  	
  Capital Adequacy

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  III

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  FEES;
  TERMINATION AND INCREASE OF COMMITMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
   

  	
  Fees

  	
   

  
	
  Section
  3.02.

  	
   

  	
  Voluntary
  Termination of Unutilized Commitments

  	
   

  
	
  Section
  3.03.

  	
   

  	
  Mandatory
  Termination of Commitments

  	
   

  
	
  Section 3.04.

  	
   

  	
  Expiry Date

  	
   

  
	
  Section
  3.05.

  	
   

  	
  Increase
  of Commitments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PREPAYMENTS;
  PAYMENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
   

  	
  Voluntary Prepayments

  	
   

  
	
  Section 4.02.

  	
   

  	
  Mandatory Prepayments

  	
   

  
	
  Section 4.03.

  	
   

  	
  Method and Place of Payment

  	
   

  
	
  Section 4.04.

  	
   

  	
  Net Payments

  	
   

  
	
  Section 4.05.

  	
   

  	
  Limitations on Sources of Payment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE
  V

  	
   

  
	
   

  	
   

  
	
  CONDITIONS
  PRECEDENT TO EFFECTIVENESS

  	
   

  
	
   

  	
   

  
	
  Section 5.01.

  	
   

  	
  Execution of Agreement; Notes

  	
   

  
	
  Section 5.02.

  	
   

  	
  No Default; Representations and
  Warranties

  	
   

  
	
  Section 5.03.

  	
   

  	
  Opinions of Counsel

  	
   

  
	
  Section 5.04.

  	
   

  	
  Corporate Documents; Proceedings

  	
   

  
	
  Section 5.05.

  	
   

  	
  Security Agreement

  	
   

  
	
  Section 5.06.

  	
   

  	
  Covered Portfolio, Etc

  	
   

  



 


i





















 


	
  Section 5.07.

  	
   

  	
  Adverse Change, Rating, etc

  	
   

  
	
  Section 5.08.

  	
   

  	
  Litigation

  	
   

  
	
  Section 5.09.

  	
   

  	
  Fees, Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  CONDITIONS
  PRECEDENT TO ALL CREDIT EVENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
   

  	
  Loss Threshold Incurrence Date

  	
   

  
	
  Section 6.02.

  	
   

  	
  Cumulative Losses

  	
   

  
	
  Section 6.03.

  	
   

  	
  Principal Amount

  	
   

  
	
  Section 6.04.

  	
   

  	
  Notice of Borrowing

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VII

  	
   

  
	
   

  	
   

  
	
  REPRESENTATIONS,
  WARRANTIES AND AGREEMENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
   

  	
  Corporate Status

  	
   

  
	
  Section 7.02.

  	
   

  	
  Corporate Power and Authority

  	
   

  
	
  Section 7.03.

  	
   

  	
  No Violation

  	
   

  
	
  Section 7.04.

  	
   

  	
  Governmental Approvals

  	
   

  
	
  Section 7.05.

  	
   

  	
  Financial Statements; Financial
  Condition; Undisclosed Liabilities; Etc

  	
   

  
	
  Section 7.06.

  	
   

  	
  Litigation

  	
   

  
	
  Section 7.07.

  	
   

  	
  True and Complete Disclosure

  	
   

  
	
  Section 7.08.

  	
   

  	
  Use of Proceeds; Margin Regulations

  	
   

  
	
  Section 7.09.

  	
   

  	
  Tax Returns and Payments

  	
   

  
	
  Section 7.10.

  	
   

  	
  Compliance with ERISA

  	
   

  
	
  Section 7.11.

  	
   

  	
  Capitalization

  	
   

  
	
  Section 7.12.

  	
   

  	
  Subsidiaries

  	
   

  
	
  Section 7.13.

  	
   

  	
  Compliance with Statutes, Etc

  	
   

  
	
  Section 7.14.

  	
   

  	
  Investment Company Act

  	
   

  
	
  Section 7.15.

  	
   

  	
  Public Utility Holding Company Act

  	
   

  
	
  Section 7.16.

  	
   

  	
  Compliance with Insurance Law

  	
   

  
	
  Section 7.17.

  	
   

  	
  Covered Portfolio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  AFFIRMATIVE
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
   

  	
  Information Covenants

  	
   

  
	
  Section 8.02.

  	
   

  	
  Books, Records and Inspections

  	
   

  
	
  Section 8.03.

  	
   

  	
  Maintenance of Property,
  Insurance

  	
   

  
	
  Section 8.04.

  	
   

  	
  Corporate Franchises

  	
   

  
	
  Section 8.05.

  	
   

  	
  Compliance with Statutes, Etc

  	
   

  
	
  Section 8.06.

  	
   

  	
  ERISA

  	
   

  
	
  Section 8.07.

  	
   

  	
  Performance of Obligations

  	
   

  
	
  Section 8.08.

  	
   

  	
  Use of Proceeds

  	
   

  
	
  Section 8.09.

  	
   

  	
  Conduct of Business

  	
   

  
	
  Section 8.10.

  	
   

  	
  Underwriting Criteria

  	
   

  



 


ii





















 


	
  Section 8.11.

  	
   

  	
  Collection of Pledged Recoveries and
  Pledged Premiums

  	
   

  
	
  Section 8.12.

  	
   

  	
  Pledged Reserve Release
  Notice

  	
   

  
	
  Section 8.13.

  	
   

  	
  Registry

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.01.

  	
   

  	
  Liens

  	
   

  
	
  Section 9.02.

  	
   

  	
  Consolidation, Merger, Sale of
  Assets, etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
   

  
	
   

  	
   

  
	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.01.

  	
   

  	
  Payments

  	
   

  
	
  Section
  10.02.

  	
   

  	
  Representations,
  etc

  	
   

  
	
  Section 10.03.

  	
   

  	
  Covenants

  	
   

  
	
  Section 10.04.

  	
   

  	
  Default Under Other Agreements

  	
   

  
	
  Section 10.05.

  	
   

  	
  Bankruptcy, Etc

  	
   

  
	
  Section 10.06.

  	
   

  	
  ERISA

  	
   

  
	
  Section 10.07.

  	
   

  	
  Security Agreement

  	
   

  
	
  Section 10.08.

  	
   

  	
  Judgments

  	
   

  
	
  Section 10.09.

  	
   

  	
  Change of Control

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  XI

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  THE
  AGENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
   

  	
  Appointment

  	
   

  
	
  Section 11.02.

  	
   

  	
  Nature of Duties

  	
   

  
	
  Section 11.03.

  	
   

  	
  Lack of Reliance on the Agent

  	
   

  
	
  Section
  11.04.

  	
   

  	
  Certain
  Rights of the Agent

  	
   

  
	
  Section 11.05.

  	
   

  	
  Reliance

  	
   

  
	
  Section 11.06.

  	
   

  	
  Indemnification

  	
   

  
	
  Section
  11.07.

  	
   

  	
  The
  Agent in Its Individual Capacity

  	
   

  
	
  Section
  11.08.

  	
   

  	
  Resignation
  by the Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section
  12.01.

  	
   

  	
  Payment
  of Expenses. Etc

  	
   

  
	
  Section 12.02.

  	
   

  	
  Right of Setoff

  	
   

  
	
  Section 12.03.

  	
   

  	
  Notices

  	
   

  
	
  Section
  12.04.

  	
   

  	
  Benefit of
  Agreement

  	
   

  
	
  Section
  12.05.

  	
   

  	
  No
  Waiver; Remedies Cumulative

  	
   

  
	
  Section
  12.06.

  	
   

  	
  Calculations;
  Computations

  	
   

  
	
  Section
  12.07.

  	
   

  	
  Governing
  Law; Submission to Jurisdiction; Venue

  	
   

  
	
  Section
  12.08.

  	
   

  	
  Obligation
  to Make Payments in Dollars

  	
   

  



 


iii





















 


	
  Section 12.09.

  	
   

  	
  Counterparts

  	
   

  
	
  Section 12.10.

  	
   

  	
  Effectiveness

  	
   

  
	
  Section
  12.11.

  	
   

  	
  Headings
  Descriptive

  	
   

  
	
  Section 12.12.

  	
   

  	
  Amendment or
  Waiver

  	
   

  
	
  Section 12.13.

  	
   

  	
  Survival

  	
   

  
	
  Section
  12.14.

  	
   

  	
  Exclusions
  from Covered Portfolio

  	
   

  
	
  Section 12.15.

  	
   

  	
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE I

  	
   

  	
  COMMITMENTS

  	
   

  
	
  SCHEDULE II

  	
   

  	
  UNDISCLOSED
  LIABILITIES

  	
   

  
	
  SCHEDULE
  III

  	
   

  	
  SUBSIDIARIES

  	
   

  
	
  SCHEDULE IV

  	
   

  	
  LIST OF
  REINSURANCE AGREEMENTS

  	
   

  
	
  EXHIBIT A

  	
   

  	
  NOTICE OF BORROWING

  	
   

  
	
  EXHIBIT B

  	
   

  	
  NOTE AND GRID

  	
   

  
	
  EXHIBIT C

  	
   

  	
  OPINIONS OF COUNSEL

  	
   

  
	
  EXHIBIT D

  	
   

  	
  OFFICER’S CERTIFICATE

  	
   

  
	
  EXHIBIT E

  	
   

  	
  FORM OF SECURITY
  AGREEMENT

  	
   

  
	
  EXHIBIT F

  	
   

  	
  FORM OF ASSIGNMENT
  AND ASSUMPTION AGREEMENT

  	
   

  
	
  EXHIBIT G

  	
   

  	
  FORM
  404(b)(iii) CERTIFICATE

  	
   

  
	
  EXHIBIT H

  	
   

  	
  NOTE REGISTER

  	
   

  



 


iv





















 


THIRD AMENDED AND RESTATED CREDIT
AGREEMENT


 


THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of April 30, 2005, among FINANCIAL SECURITY
ASSURANCE INC. (“FSA”) and FSA INSURANCE COMPANY
(“FSAIC”) (each a “Borrower” and collectively, the “Borrowers”), the BANKS party hereto from time to time and BAYERISCHE LANDESBANK (formerly known as Bayerische
Landesbank Girozentrale), acting through its New York Branch, acting in
its capacity as Agent pursuant to Article XI hereof.  Capitalized terms used herein and not
otherwise defined shall have the meaning assigned in Section 1.01.


 


W I T N E S S E T H :


 


WHEREAS, Bayerische Landesbank (formerly known as Bayerische Landesbank
Girozentrale), acting through its New York Branch, in its capacity as Bank
(“BLB”) and as Agent, FSA, Financial Security Assurance of Maryland Inc. and
Financial Security Assurance of Oklahoma, Inc. have previously entered into
that Credit Agreement dated as of April 30, 1996 (the “1996 Credit
Agreement”);


 


WHEREAS, BLB, the Agent, FSA, Financial Security Assurance of Maryland
Inc., Financial Security Assurance of Oklahoma, Inc., Landesbank Hessen-Thüringen
Girozentrale, acting through its New York Branch (“Helaba”) and
Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”,
New York Branch (“RaboBank”) have entered into that First Amended and
Restated Credit Agreement dated as of April 30, 1997 (the “First Amended
and Restated Credit Agreement”), thereby amending and restating the 1996 Credit
Agreement, and that First Amendment to First Amended and Restated Credit
Agreement dated as of April 30, 1998 (the “First Amendment” which together
with the First Amended and Restated Credit Agreement is herein referred to as
the “1997 Credit Agreement”);


 


WHEREAS, BLB, the Agent, FSA and FSAIC, Helaba, RaboBank, Westdeutsche
Landesbank Girozentrale (now known as WestLB AG), New York Branch (“WestLB”),
Deutsche Bank AG, New York Branch (“DB”), KBC Bank N.V. (“KBC”),
First Union National Bank of North Carolina (“First Union”) and Norddeutsche
Landesbank Girozentrale, New York Branch (“NordLB”) have entered into that
Second Amended and Restated Credit Agreement dated as of April 30, 1999
(the “Second Amended and Restated Credit Agreement”), thereby amending and
restating the 1997 Credit Agreement;


 


WHEREAS, FSA, FSAIC, the Agent, BLB, RaboBank, Helaba,
WestLB, DB, KBC, First Union and NordLB entered into the First Amendment to
Second Amended and Restated Credit Agreement dated as of April 30, 2000
(the “First Amendment”);


 


WHEREAS, FSA, FSAIC, the Agent, BLB, RaboBank, Helaba,
WestLB, DB, KBC, First Union, NordLB, Landesbank Baden-Württemberg, acting
through its New York Branch (“LBBW”) and The Bank of New York (“BNY”) entered
into the Second Amendment to Second Amended and Restated Credit Agreement dated
as of April 30, 2001 (the “Second Amendment”) to further amend the Second
Amended and Restated Credit Agreement in order to terminate the commitment of
First Union, to establish commitments by LBBW and BNY, to adjust the


 





















 


commitments of RaboBank
and DB and to adjust the Contingent Commitments of the Part C Banks;


 


WHEREAS, FSA, FSAIC, the Agent, BLB, RaboBank, Helaba,
WestLB, DB, KBC, NordLB, LBBW and BNY entered into the Third Amendment to
Second Amended and Restated Credit Agreement dated as of April 30, 2002
(the “Third Amendment”) to further amend the Second Amended and Restated Credit
Agreement in order to amend the definition of Loss Threshold Amount and extend
the Expiry Date;


 


WHEREAS, FSA, FSAIC, the Agent, BLB, RaboBank, Helaba,
WestLB, DB, KBC, NordLB, LBBW, BNY and The Bank of Nova Scotia, New York
Agency (“Scotia”) entered into the Fourth Amendment to Second Amended and
Restated Credit Agreement dated as of April 30, 2003 (the “Fourth
Amendment”) to further amend the Second Amended and Restated Credit Agreement
in order to amend the definition of Loss Threshold Amount, to establish the
commitment by Scotia, to adjust the commitments of BLB, Helaba, RaboBank,
Scotia, WestLB, NordLB and DB and extend the Expiry Date;


 


WHEREAS, FSA, FSAIC, the Agent, BLB, RaboBank, Helaba,
WestLB, DB, KBC, NordLB, LBBW, BNY, Scotia and KeyBank National Association (“KeyBank”)
entered into the Fifth Amendment to Second Amended and Restated Credit
Agreement dated as of April 30, 2004 (the “Fifth Amendment” together with
the Second Amended and Restated Credit Agreement, the First Amendment, the
Second Amendment, the Third Amendment and the Fourth Amendment are herein
collectively referred to as the “1999 Credit Agreement”) to further amend the
Second Amended and Restated Credit Agreement in order to terminate the
commitments of RaboBank and WestLB, to establish the commitment by KeyBank, to
adjust the commitments of BLB, Helaba, DB and LBBW, to adjust the Contingent
Commitments of the Part C Banks and extend the Expiry Date;


 


WHEREAS, the commitment of Scotia under the
1999 Credit Agreement is being terminated in connection with the execution
and delivery of this Agreement;


 


WHEREAS, the parties wish to amend and restate the
1999 Credit Agreement in its entirety pursuant to the terms hereof in order
to make such changes as provided herein; and


 


WHEREAS, subject to and upon the terms and conditions
herein set forth, the Banks are willing to make available to the Borrowers the
credit facility provided for herein.


 


NOW, THEREFORE, the parties hereby agree to amend and
restate the 1999 Credit Agreement in its entirety pursuant to the terms hereof
and otherwise agree as follows:


 


ARTICLE I



DEFINITIONS AND PRINCIPLES OF CONSTRUCTION


 


Section 1.01. 
Defined Terms. 
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):


 


2





















 


“Affiliate”
shall mean, with respect to any Person, any other Person (other than an
individual) directly or indirectly controlling, controlled by, or under direct
or indirect common control with, such Person; provided, however, that an
Affiliate of a Borrower shall include any Person that directly or indirectly
owns more than 5% of such Borrower and any officer or director of such Borrower
or any such Person.  A Person shall be
deemed to control another Person if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting securities,
by contract or otherwise.


 


“Agent” shall
mean Bayerische Landesbank (formerly known as Bayerische Landesbank
Girozentrale), a public law financial institution organized and existing under
the laws of Germany, acting through its New York Branch, in its capacity
as Agent for the Banks hereunder, and shall include any successor to the Agent
appointed pursuant to Section 11.08.


 


“Agreement”
shall mean this Third Amended and Restated Credit Agreement, as modified,
supplemented or amended from time to time as permitted under Section 12.12.


 


“Assignment and Assumption
Agreement” shall mean any Assignment and Assumption Agreement
substantially in the form of Exhibit F entered into pursuant to the terms
hereof.


 


“Authorized Officer”
shall mean, with respect to each Borrower, any president, chief operating
officer, general counsel, chief financial officer, chief accounting officer or
treasurer of each Borrower.


 


“Average Annual Debt
Service” shall mean, as of a specified date with respect to an
Insured Obligation, the applicable Retained Percentage times the sum of
(a) the aggregate outstanding principal amount of such Insured Obligation,
and (b) the aggregate amount of interest thereafter required to be paid on
such Insured Obligation (giving effect to all mandatory sinking fund payments
or other regularly scheduled required redemptions, prepayments or other
retirement of principal), divided by the number of whole and fractional years
(but in no case less than one year) from the date of determination to the latest
maturity date of such Insured Obligation, and with respect to the Covered
Portfolio as of such date as specified, shall mean the sum of the Average
Annual Debt Service as of such date of all Insured Obligations contained in the
Covered Portfolio.  In the event that an
Insured Obligation bears interest at a variable rate, the interest thereon for
purposes of the determination of Average Annual Debt Service shall be
calculated at the rate employed by the Borrowers to compute average annual debt
service with respect to such Insured Obligation in accordance with its
customary business practices.


 


“Bank” shall
mean each of the commercial banks listed on Part A of Schedule I
hereto on the Effective Date, as well as any institution which becomes a Bank
hereunder pursuant to Section 3.04, Section 3.05 or Section 12.04(b),
and “Banks” shall mean all such Banks
collectively.


 


“Bankruptcy Code”
shall have the meaning provided in Section 10.05.


 


“Base Rate”
shall mean for any day the higher of (a) the base commercial lending rate
most recently established by the Agent, or (b) 1/4% plus the Federal Funds
Rate.


 


3





















 


“Borrower” shall
have the meaning provided in the first paragraph of this Agreement.  Unless the context otherwise requires, all
references to (a) the “Borrower” shall mean each Borrower jointly and
severally and (b) the “Borrowers” shall mean all Borrowers collectively
and (c) ”entity comprising the Borrower” shall mean FSA and FSAIC.


 


“Borrower’s Rating”
shall mean, with respect to each Borrower, such Borrower’s insurer financial
strength rating in the case of S&P and insurance financial strength rating
in the case of Moody’s.


 


“Borrowing”
shall mean the borrowing of Loans on a given date.


 


“Business Day”
shall mean any day except Saturday, Sunday and any day which shall be in New York
City a legal holiday or a day on which banking institutions are authorized or
required by law or other government action to close.


 


“Change of Control”
shall mean and include the occurrence of any of the following events: any
Person, entity or “group” (within the meaning of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934) other than MediaOne Group, Inc., Fund
American Enterprises Holdings, Inc. (to be renamed “White Mountains Insurance
Group, Inc.”), The Tokio Marine and Fire Insurance Co., Ltd., XL Capital Ltd or
any affiliate thereof or any Person, entity or “group” which, immediately prior
to such event, was a Subsidiary of the Parent (a) shall have acquired
beneficial ownership of 20% or more of any outstanding class of capital stock
of the Parent or any Borrower having ordinary voting power in the election of
directors, provided that any Person, entity or group shall be permitted to
acquire up to 25% of the outstanding capital stock of any such class in a
transaction approved before the consummation of same by a majority of the
directors of the Parent or any Borrower or (b) shall have obtained the
power (whether or not exercised) to elect the majority of the Board of
Directors of the Parent or any Borrower.


 


“Code” shall
mean the Internal Revenue Code of 1986, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.  Section references to the Code are to the
Code, as in effect at the date of this Agreement and any subsequent provisions
of the Code, amendatory thereof, supplemental thereto or substituted therefor.


 


“Collateral”
shall mean all “Collateral” as defined in the
Security Agreement.


 


“Collateral Account”
shall have the meaning set forth in the Security Agreement.


 


“Collateral Agent”
shall have the meaning set forth in the Security Agreement.


 


“Commitment”
shall mean for each Bank the amount set forth opposite such Bank’s name in Part A
of Schedule I hereto directly below the column entitled “Commitment,” as
the same may be (a) reduced from time to time pursuant to Sections 3.02
and/or 3.03 and (b) adjusted from time to time as a result of assignments
to or from such Bank pursuant to Section 3.04, 3.05 or 12.04.


 


“Commitment Date”
shall have the meaning provided in Section 3.05(a).


 


“Commitment Fee”
shall have the meaning provided in Section 3.01(a).


 


4





















 


“Commitment Period”
initially shall mean the period commencing on the Effective Date and ending on
the Expiry Date and, from and after the date of any extension of the Expiry
Date pursuant to Section 3.04, shall mean the period commencing on April 30
which is seven years prior to the Expiry Date and ending on the Expiry Date.


 


“Contingent Commitment”
shall mean for each Part C Bank the amount set forth opposite such Part C
Bank’s name in Part C of Schedule I hereto directly below the column
entitled “Contingent Commitment”, as the same may
be (a) reduced from time to time pursuant to Section 3.02 and/or 3.03
and (b) adjusted from time to time as a result of assignments to or from
such Part C Bank pursuant to Section 3.04, 3.05 or 12.04.


 


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


 


“Covered Portfolio”
shall mean and include each Insured Obligation as of the Effective Date and
each Insured Obligation issued thereafter and prior to the Loss Threshold
Incurrence Date other than any Insured Obligation which is excluded from the
Covered Portfolio pursuant to Section 12.14.


 


“Credit Documents”
shall mean this Agreement, each Note and the Security Agreement.


 


“Credit Event”
shall mean the making of any Loan.


 


“Cumulative Losses”
for a specified period shall mean the aggregate Losses of the Borrowers
determined cumulatively during such period without regard to Pledged
Recoveries.


 


“Declining Bank”
shall have the meaning provided in Section 3.04(b).


 


“Default” shall
mean any event, act or condition which with notice or lapse of time, or both,
would constitute an Event of Default.


 


5





















 


“Defaulted Loan”
shall mean, with respect to any Bank at any time, the Loan or portion of any
Loan required to be made by such Bank to the Borrowers pursuant to Section 2.01,
at or prior to such time, that has not been made by such Bank as of such time.


 


“Defaulting Bank”
shall mean, at any time, any Bank that, at such time, owes a Defaulted Loan or
any amount described in Section 2.04(d).


 


“Department”
shall mean the Insurance Department of the States of New York and/or
Oklahoma, to the extent applicable in the context in which such term is used.


 


“Dollars” and
the sign “$” shall each mean freely transferable
lawful money of the United States.


 


“Effective Date”
shall have the meaning provided in Section 12.10.


 


“Eligible Transferee”
shall mean and include a commercial bank, financial institution or other “accredited
investor” (as defined in Regulation D of the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder) which, if
such entity is to become a Part C Bank, is assigned, or the parent of
which is assigned, an unsecured senior debt rating (or shadow rating as
reflected in a letter from the applicable rating agencies) by each of Moody’s
and S&P of Aaa and AAA, respectively, and which, in any case, shall be
mutually acceptable to (i) the Agent, (ii) if such Eligible
Transferee will be a Part B Bank, the Part C Banks, and,
(iii) so long as no Default or Event of Default has occurred and is continuing
hereunder, or if a Default or Event of Default is continuing and the Eligible
Transferee is not assigned an unsecured senior debt rating (or shadow rating as
reflected in a letter from the applicable rating agencies) by each of Moody’s
and S&P, of Aaa and AAA, respectively, the Borrowers.


 


“ERISA” shall
mean the Employee Retirement Income Security Act of 1974, as amended from
time to time, and the regulations promulgated and rulings issued
thereunder.  Section references to ERISA
are to ERISA, as in effect at the date of this Agreement, and to any subsequent
provisions of ERISA, amendatory thereof, supplemental thereto or substituted
therefor.


 


“ERISA Affiliate”
shall mean any person (as defined in Section 3(9) of ERISA) which together
with the Borrowers or any of their Subsidiaries would be deemed to be a “single
employer” within the meaning of Section 414(b), (c), (m) or (o) of the
Code.


 


“Event of Default”
shall have the meaning provided in Article X.


 


“Expiry Date”
shall have the meaning set forth in Section 3.04(a).


 


“Extending Bank”
shall have the meaning provided in Section 3.04(b).


 


“Extension Request”
shall have the meaning set forth in Section 3.04(a).


 


“Federal Funds Rate”
shall mean for any period, a fluctuating per annum interest rate (rounded
upwards, if necessary, to the nearest 1/100th of 1%) equal for each day during
such


 


6





















 


period to the weighted
average of the rates on overnight Federal Funds transactions with members of
the Federal Reserve System arranged by Federal Funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by the Agent from three Federal
Funds brokers of recognized standing selected by the Agent.


 


“Fees” shall
mean all amounts payable by the Borrowers to the Banks pursuant to or referred
to in Section 3.01.


 


“FSA” shall have
the meaning provided in the first paragraph of this Agreement.


 


“FSAIC” shall
have the meaning provided in the first paragraph of this Agreement.


 


“Holder of any Note”
shall mean any Federal Reserve Bank to which a Bank has pledged its Note to the
extent such Federal Reserve Bank has foreclosed upon such Note.


 


“Increase Date”
shall have the meaning provided in Section 3.05(a).


 


“Increase Request”
shall have the meaning provided in Section 3.05(a).


 


“Increasing Bank”
shall have the meaning provided in Section 3.05(a).


 


“Increasing Extending Bank”
shall have the meaning provided in Section 3.04(b).


 


“Indebtedness”
shall mean, as to any Person, without duplication, (a) all indebtedness
(including principal, interest, fees and charges) of such Person for borrowed
money or for the deferred purchase price of property or services, (b) the
face amount of all letters of credit issued for the account of such Person and
all drafts drawn thereunder, (c) current liabilities in respect of
unfunded vested benefits under plans covered by ERISA, (d) all liabilities
secured by any Lien on any property owned by such Persons, whether or not such
liabilities have been assumed by such Person, (e) the aggregate amount
required to be capitalized under leases under which such Person is the lessee
and (f) all Contingent Obligations of such Person, provided that, the term
“Indebtedness” shall not include (i) any indebtedness arising from
investment activities in the ordinary course of business that are not required
to be classified as indebtedness on such Person’s balance sheet in accordance
with generally accepted accounting principles, (ii) intercompany
indebtedness and (iii) indebtedness constituting the purchase price of
goods or equipment used in the ordinary course of business.


 


“Initial Borrowing Date”
shall mean the date on which the initial Borrowing occurs.


 


“Installment Premiums”
shall mean any and all premiums which are required to be paid or claimed to be
required to be paid to or for the account of any Borrowers in respect of
Insured Obligations in the Covered Portfolio on a periodic basis rather than by
payment in full on the date of the effectiveness of the relevant Insurance
Contract.


 


“Insurance Contracts”
shall have the meaning set forth in Section 7.16.


 


7





















 


“Insured Obligation”
shall mean any “municipal obligation bonds,” “special revenue bonds,” “industrial
development bonds” and “utility first mortgage obligations” which a Borrower is
permitted to insure under the provisions of Section 6904(b)(1)(A), (B),
(C) or (I) of the New York Insurance Law (without regard to clause (J)
thereof), as in effect on the date hereof, issued by the United States of
America, a state thereof or the District of Columbia, a municipality or
governmental unit or other political subdivision of the foregoing or any public
agency or instrumentality thereof, to the extent that the payment of principal
thereof, together with interest thereon, or other amounts due in respect
thereof, is insured, reinsured or otherwise guaranteed by any Borrower under an
Insurance Contract.


 


“Lending Office”
shall mean the office of the Agent located at 560 Lexington Avenue, New York,
New York 10022 or such other office, Subsidiary or Affiliate of the Agent
as the Agent may from time to time specify as such to the Borrowers.


 


“Lien” shall
mean any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), preference, priority or other security
agreement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement, any financing or similar
statement or notice filed under the UCC or any other similar recording or
notice statute, and any lease having substantially the same effect as any of
the foregoing).


 


“Loan” shall
have the meaning provided in Section 2.01.


 


“Loss” shall
mean at any time the aggregate sum of (a) the amount paid by any Borrower
at such time or required at such time to be paid by such Borrower on claims
under an Insurance Contract with respect to an Insured Obligation in the
Covered Portfolio by reason of the failure by the issuer thereof or other
obligor with respect thereto to pay insured amounts on such Insured Obligations
when due, plus (b) Permitted Reserves at such time minus (c) amounts
paid at such time or reasonably expected by the Borrowers at such time to be
paid to such Borrower under reinsurance agreements (whether facultative or treaty)
and similar arrangements with respect to the claims referred to in clause (a)
above provided by any Person other than a Wholly Owned Subsidiary of the
Parent; provided that, without limiting the generality of the foregoing, the
term “Loss” shall not include any damages or
penalties required at such time to be paid by such Borrower in respect of an
Insurance Contract by reason of the breach by such Borrower of its obligations
thereunder or the cancellation or termination thereof other than in accordance
with its terms.


 


“Loss Threshold Amount”
shall mean an amount equal to the greater of (a) $350 million and
(b) 5.00% of Average Annual Debt Service on the Covered Portfolio as of
such date.


 


“Loss Threshold Incurrence
Date” shall mean the date on which Cumulative Losses (net of
recoveries) during the relevant Commitment Period equal the Loss Threshold
Amount.


 


“Majority Banks”
shall mean at any time Banks owed at least 51% of the aggregate principal
amount of the Loans outstanding at such time or, if no Loans are outstanding at
such time, Banks holding at least 51% of the aggregate Commitments at such
time; provided, however, that if any Bank shall be a Defaulting Bank at such
time, there shall be excluded from


 


8





















 


the determination of
Majority Banks at such time (a) the aggregate principal amount of the
Loans owing to such Bank and outstanding at such time and (b) the
Commitment of such Bank at such time; and, provided further, that if at the
time Majority Banks is determined a Defaulting Bank exists and such Defaulting
Bank is a Part B Bank a portion of each Part C Bank’s (which is not
then a Defaulting Bank) Commitment shall be increased by an amount equal to the
lesser of (a) such Part C Bank’s Contingent Commitment and (b) the
portion of such Part C Bank’s Contingent Commitment equal to the aggregate
Commitments of all Defaulting Banks multiplied by a fraction the numerator of
which is equal to such Part C Bank’s Contingent Commitment and denominator
of which is the aggregate amount of the Contingent Commitments of all Part C
Banks.


 


“Margin Stock”
shall have the meaning provided in Regulation U of the Board of Governors
of the Federal Reserve System.


 


“Moody’s” shall
mean Moody’s Investors Service, Inc.


 


“Note” shall have
the meaning provided in Section 2.05.


 


“Notice of Borrowing”
shall have the meaning provided in Section 2.03.


 


“Notice Office”
shall mean the office of the Agent located at 560 Lexington Avenue, New York,
New York, 10022, Attention:  Mr.
Joseph C. Campagna, Telephone No. (212) 310-9943, Facsimile No. (212) 230-9114,
or such other office as the Agent may hereafter designate in writing as such to
the Borrowers.


 


“Obligations”
shall mean all amounts owing to the Agent, Collateral Agent or any Bank
pursuant to the terms of this Agreement or any other Credit Document.


 


“Parent” shall
mean Financial Security Assurance Holdings Ltd., a New York
corporation.


 


“Part B Bank”
shall mean each Bank listed on Part B of Schedule I hereto.


 


“Part C Bank”
shall mean each Bank listed on Part C of Schedule I hereto.


 


“Participant”
shall mean any bank(s) or other financial institution(s) which may purchase a
participation interest from the Bank in this Agreement and certain of the
Credit Documents pursuant to a participation agreement between the Bank and the
Participant(s).


 


“Payment Office”
shall mean the office of the Agent located at 560 Lexington Avenue, New York,
New York 10022 and any payment to the Payment Office shall be made
pursuant to the wire transfer instruction set forth in Section 4.03, or
such other office as the Agent may hereafter designate in writing as such to
the Borrowers.


 


“PBGC” shall
mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002
of ERISA or any successor thereto.


 


“Permitted Liens”
shall have the meaning set forth in Section 9.01.


 


9





















 


“Permitted Reserves”
shall mean at any time any and all reserves established or maintained by any
Borrowers at such time which are deemed necessary or prudent in the reasonable
judgment of the management of such Borrower by reason of the failure or
anticipated failure by the issuer of an Insured Obligation contained in the
Covered Portfolio or other obligor with respect thereto to pay such Insured
Obligation when due as reflected on such Borrower’s books and which are or will
be reported by such Borrower in its statutory financial statements.


 


“Person” shall
mean any individual, partnership, limited liability company, joint venture,
firm, corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.


 


“Plan” shall
mean any multi employer plan or single employer plan as defined in Section 4001
of ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of), or at any time during the five calendar years
preceding the date of this Agreement was maintained or contributed to by (or to
which there was an obligation to contribute of), any Borrower or by a
Subsidiary of any Borrower or an ERISA Affiliate.


 


“Pledged Premiums”
shall mean at any time on and after the Loss Threshold Incurrence Date
(a) any and all Installment Premiums which are paid or payable to any
Borrower at such time with respect to any and all defaulted Insured Obligations
in the Covered Portfolio minus (b) the aggregate amount of such
Installment Premiums referred to in clause (a) of this definition paid or
payable to any Person other than a Borrower (or any Wholly Owned subsidiary of
the Parent) at such time under reinsurance agreements (whether facultative or
treaty) and similar arrangements.


 


“Pledged Recoveries”
shall mean at any time on and after the Loss Threshold Incurrence Date any and
all moneys and other payments, property and other consideration and
compensation received or receivable by or for the account of a Borrower at such
time (excluding the aggregate amount of any and all moneys, payments, property,
consideration and compensation paid or payable to any Person other than a
Borrower or Wholly Owned Subsidiary of the Parent, under reinsurance agreements
(whether facultative or treaty) and similar arrangements) as repayment or
reimbursement of, or otherwise in respect of or arising out of, the payment of
a claim by such Borrower under an Insurance Contract covering any Insured
Obligation in the Covered Portfolio (without regard to whether such claim was
paid from the proceeds of a Loan), whether from the issuer thereof or any other
Person including without limitation under or pursuant to (a) such
Insurance Contract, any reimbursement agreement, guaranty, letter of credit,
mortgage, security agreement, pledge agreement or other contract, agreement or
arrangement, (b) any account or account receivable, (c) any
compromise, settlement or similar arrangement, (d) any voluntary payment
or gift, (e) any reinsurance of such Insured Obligation to the extent that
payment or expected payment under such reinsurance was not deducted in
determining the Loss attributed to a Borrower’s payment or required payment of
such claim, (f) any contractual, statutory, common law or other right of
subrogation, (g) any realization upon any mortgage, security interest or
other Lien, (h) any cause of action, whether sounding in tort, contract or
otherwise, and any judicial, arbitration or other proceeding by or before any
court, agency, tribunal, association or other governmental or private body, or
(i) any other legal or equitable right or claim, whether or not similar to
the foregoing), less the out of pocket costs and expenses, including without
limitation attorneys fees and court costs, reasonably incurred by a Borrower in
connection with


 


10





















 


the collection or other
realization of such moneys and other payments, property and other consideration
and compensation.


 


“Pledged Reserves Account”
shall mean an account established with the Agent in accordance with Section 2.01(b)
of the Security Agreement.


 


“Pledged Reserves Account
Funds” shall mean at any time the aggregate amount of proceeds of
Loans borrowed hereunder for the purpose of establishing or maintaining
Permitted Reserves, such proceeds to be deposited in the Pledged Reserves
Account in accordance with Section 2.01(b) of the Security Agreement.


 


“Pledged Reserve Release
Notice” shall have the meaning set forth in Section 8.12.


 


“Pledged Reserve Repayment
Date” shall mean the date on which a Borrower delivers the Pledged
Reserve Release Notice required by Section 8.12.


 


“Replacement Bank”
shall have the meaning provided in Section 3.04(b).


 


“Reportable Event”
shall mean an event described in Section 4043(b) of ERISA with respect to
a Plan as to which the 30 day notice requirement has not been waived by
the PBGC.


 


“Retained Percentage”
of an Insured Obligation shall mean 100% minus the aggregate percentage of the
risk under Insurance Contracts with respect thereto which has been ceded by a
Borrower to other Persons under reinsurance agreements (whether facultative or
treaty) and similar arrangements with Persons other than Wholly Owned
Subsidiaries of the Parent.


 


“SEC” shall have
the meaning provided in Section 8.01(f).


 


“Security Agreement”
shall have the meaning provided in Section 5.05.


 


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


 


“Subsidiary”
shall mean, as to any Person, (a) any corporation more than 50% of whose
stock of any class or classes having by the terms thereof ordinary voting power
to elect a majority of the directors of such corporation (irrespective of
whether or not at the time stock of any class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time owned by such Person and/or one or more
Subsidiaries of such Person and (b) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest and the ability to direct such
partnership, association, joint venture or other entity at the time.


 


“Taxes” shall
have the meaning provided in Section 4.04(a).


 


“UCC” shall mean
the Uniform Commercial Code as from time to time in effect in the relevant
jurisdiction.


 


11





















 


“Unfunded Current Liability”
of any Plan shall mean the amount, if any, by which the present value of the
accrued benefits under the Plan as of the close of its most recent plan year,
determined in accordance with Statement of Financial Accounting Standards No. 35,
based upon the actuarial assumptions used by the Plan’s actuary in the most
recent annual valuation of the Plan, exceeds the fair market value of the
assets allocable thereto, determined in accordance with Section 412 of the
Code.


 


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


 


“Unutilized Commitment”
shall mean, for any Bank, at any time, the Commitment of such Bank at such time
less (a) the aggregate principal amount of all Loans made by such Bank
pursuant to Section 2.01(a) prior to such time plus (b) Loans
previously made by such Bank pursuant to Section 2.01(a) to establish
Permitted Reserves to the extent (i) such Loans were previously repaid by
the Borrowers and (ii) the proceeds of such Loans were not used to pay
Losses.


 


“Unutilized Contingent
Commitment” shall mean, for any Part C Bank, at any time, the
Contingent Commitment of such Bank at such time less (a) the aggregate
principal amount of all Loans made by such Bank pursuant to Section 2.01(b)
prior to such time, plus (b) Loans previously made by such Part C
Bank pursuant to Section 2.01(b) to establish Permitted Reserves to the
extent (i) such Loans were previously repaid by the Borrowers and
(ii) the proceeds of such Loans were not used to pay losses.


 


“Wholly Owned Subsidiary”
shall mean, as to any Person, (a) any corporation 100% of whose capital
stock (except in the case of Financial Security Assurance International Ltd.,
which shall be a Wholly Owned Subsidiary of FSAIC or FSA so long as FSAIC or a
Wholly Owned Subsidiary of FSA owns 100% of its outstanding common shares) is
at the time owned by such Person and/or one or more Wholly Owned Subsidiaries
of such Person and (b) any partnership, association, joint venture or
other entity in which such Person and/or one or more Wholly Owned Subsidiaries
of such Person has a 100% equity interest and the ability to direct such
partnership, association, joint venture or other entity at such time.


 


Section 1.02.  Principles of Construction.  All references to sections, schedules and
exhibits are to sections, schedules and exhibits in or to this Agreement unless
otherwise specified.  The words “hereof,”
“herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.


 


ARTICLE II



AMOUNT AND TERMS OF CREDIT


 


Section 2.01. 
The Loans.


 


(a)           Subject to and upon the terms and
conditions set forth herein, including, without limitation, the provisions of Article VI,
each Bank severally agrees, at any time and from time to time prior to the
Expiry Date, to make loans (each a “Loan” and collectively, the “Loans”) to the
Borrowers, provided, however, that the principal amount


 


12





















 


of any Loan made by a
Bank at any time shall not exceed the lesser of (i) the Unutilized
Commitment of such Bank at such time and (ii) the total amount requested
by the Borrowers in connection with any Credit Event multiplied by a fraction
the numerator of which is equal to such Bank’s Commitment and the denominator
of which is equal to the aggregate amount of all Banks’ Commitments.


 


(b)           In the event that (i) the
Borrowers request a Borrowing under Section 2.01(a) and (ii) any Part B
Bank shall fail to make on the date specified in the Notice of Borrowing for
such requested Borrowing any Loan or any portion of a Loan required to be made
by such Bank under Section 2.01(a) hereof representing such Bank’s pro
rata portion (determined as described in Section 2.01(a)(i) and (ii)) of
the amount of such requested Borrowing, then each Part C Bank severally
agrees to make a Loan to the Borrowers on such date in an amount equal to the
lesser of (i) such Part C Bank’s Unutilized Contingent Commitment and
(ii)  the amount of such Part B Bank’s Defaulted Loan multiplied by a
fraction, the numerator of which is such Part C Bank’s Contingent
Commitment and the denominator of which is the sum of all Part C Banks’
Contingent Commitments.


 


(c)           Once repaid, Loans incurred hereunder
may not be reborrowed other than those Loans borrowed to establish or maintain
Permitted Reserves, which may be reborrowed once repaid to the extent that the
proceeds of such Loans in whole or in part were not used to pay Losses.


 


(d)           No Bank shall have any liability for
the failure of any other Bank to make Loans hereunder except as expressly
provided in Section 2.01(b).


 


Section 2.02.  Amount of Each Borrowing.  The aggregate principal amount of each
Borrowing hereunder shall not (a) be less than $2,000,000, and if greater,
shall be in an integral multiple of $1,000,000 and (b) exceed the lesser
of (i) Cumulative Losses in excess of the Loss Threshold Amount less the
aggregate principal amount of all Loans previously made and (ii) the
aggregate Unutilized Commitments of all Banks as in effect on the date such
Borrowing is made.


 


Section 2.03.  Notice of Borrowing.  Whenever the Borrowers desire to make a
Borrowing hereunder, they shall give the Agent at its Notice Office at least two
Business Days’ prior notice made hereunder, provided that any such notice shall
be deemed to have been given on a certain day only if received before 12:00 Noon
(New York time) on such day.  Each
such notice (each a “Notice of Borrowing”) shall be in the form of Exhibit A,
appropriately completed to specify the aggregate principal amount of the Loans
to be made pursuant to such Borrowing, and the date of such Borrowing (which
shall be a Business Day).


 


Section 2.04.  Disbursement of Funds; Defaulting Bank’s
Obligations.


 


(a)           No later than 11:00 a.m. (New York
time) on the later of the date specified in each Notice of Borrowing and the
date which is two Business Days after the Agent’s receipt of such Notice of
Borrowing, as described in Section 2.03, (i) each Bank will make
available at the Payment Office of the Agent its pro rata portion (in
accordance with the Commitment of such Bank and the aggregate Commitment of all
Banks as in


 


13





















 


effect on such date) of
the amount of each Borrowing requested to be made on such date, in Dollars and
in immediately available funds and (ii) the Agent will make available to
the Borrowers the aggregate of the amounts so made available by the Banks on
such day at its Payment Office.


 


(b)           In the event that any Part B
Bank shall fail to make available at the Payment Office of the Agent its pro
rata portion (in accordance with the Commitment of such Part B Bank and
the aggregate Commitments of all of the Banks as in effect on such date) of the
amount of the Borrowing requested to be made in any Notice of Borrowing, at or
prior to 11:00 a.m. (New York time) on the date specified in such
Notice of Borrowing, the Agent shall immediately (but in no event later than
11:15 a.m. (New York time) notify each Part C Bank that such Part B
Bank has so defaulted and no later than 1:00 p.m. (New York time) on
such date, (i) each Part C Bank will (subject to Section 2.01(b))
make available at the Payment Office of the Agent its pro rata portion (in
accordance with the Contingent Commitment of such Part C Bank and the
aggregate Contingent Commitments of all of the Part C Banks as in effect
on such date) of such Part B Bank’s Defaulted Loan, in Dollars and in
immediately available funds, and (ii) the Agent will make available to the
Borrowers the aggregate of the amounts so made available by the Part C
Banks on such day at its Payment Office. 
If the notice from the Agent to any Part C Bank described above in
this Section 2.04(b) occurs after 11:15 a.m. (New York time) such
Part C Bank shall use its best efforts to advance the amount required
pursuant this Section on the day such notice occurs and shall, in any event, so
advance such amount by 1:00 p.m. on the next succeeding Business Day.


 


(c)           The Agent shall have no obligation to
make available any amount under Section 2.04(a) or (b) on behalf of any
Bank, Part B Bank or Part C Bank (other than itself in such
capacity) until such time as any such Bank shall have made amounts
available for such purpose to the Agent.


 


(d)           In the event that any Part C
Bank has made available funds with respect to any Part B Bank’s Defaulted
Loan, such Part B Bank agrees to repay such Part C Bank forthwith
upon demand together with interest on the amount advanced for each day from the
date such amounts were advanced by the Part C Bank until the date such
amount is repaid to the Part C Bank, at the Federal Funds Rate for three (3)
Business Days and thereafter at the Base Rate plus 2%.  To the extent that the Part C Bank receives
payments of any Defaulted Loan from or on behalf of the Borrowers, or an
Eligible Transferee as contemplated in Section 3.03(c), the obligation of
the Defaulting Bank, to the extent of such payment, shall be satisfied, with
any deficiency to be paid by such Defaulting Bank as provided in this Section 2.04(d).  Upon payment by the Part B Bank, which
is the Defaulting Bank, to the Part C Bank of all amounts owed to the Part C
Bank with respect to a Defaulted Loan, such Part B Bank shall be the owner
of such Loan and shall be entitled to all rights and benefits hereunder with
respect thereto.


 


Section 2.05. 
Notes.  The
Borrowers shall be jointly and severally obligated to pay the principal of and
interest on the Loans.  The Borrowers’
obligation to pay the principal of, and interest on, the Loans made by each
Bank shall be evidenced by a promissory note duly executed and delivered by the
Borrowers substantially in the form of Exhibit B with blanks appropriately


 


14





















 


completed in conformity
herewith (each a “Note” and, collectively, the “Notes”).  Each Note shall (a) be payable to the
order of such Bank and be dated the Effective Date if such Bank shall be a
party hereto on the Effective Date or the effective date of the Assignment and
Assumption Agreement pursuant to which it becomes a party hereto if such Bank
shall become a party hereto after the Effective Date, (b) be in a stated
principal amount equal to such Bank’s Commitment (plus, if such Bank is a Part C
Bank, such Bank’s Contingent Commitment) and be payable in the principal amount
of the Loans evidenced thereby, (c) mature, with respect to each Loan
evidenced thereby, on the Expiry Date, (d) bear interest as provided in
the appropriate clause of Section 2.06 and (e) be entitled to the
benefits of this Agreement and be secured by the Security Agreement.  Each Bank will note on its internal records
the amount of each Loan made by it and each payment in respect thereof and will
prior to any transfer of its Note endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby.  Failure to make any such notation shall not
affect the Borrowers’ obligations in respect of such Loans.


 


Section 2.06. 
Interest.


 


(a)           The Borrowers agree, jointly and
severally, to pay to the Agent for the account of the Banks interest in respect
of the unpaid principal amount of each Loan from the date the proceeds thereof
are made available to the Borrowers until the maturity thereof (whether by acceleration
or otherwise) at a rate per annum which shall be equal to the Base Rate in
effect from time to time plus 1.50%.


 


(b)           The Borrowers, jointly and severally,
agree to pay to the Agent for the account of the Banks interest on any amount
owed by the Borrowers to the Banks under this Agreement or any of the Credit
Documents from and after the earlier of (i) the occurrence of an Event of
Default and (ii) the date such amount is due and payable but not paid
until payment thereof in full at a rate per annum equal to the Base Rate in
effect from time to time plus 3.50% (the “Default Rate”).


 


(c)           Accrued (and theretofore
unpaid) interest shall be payable (i) in respect of each Loan,
quarterly in arrears on the first Business Day of each January, April, July and
October, (ii) in respect of each Loan, on any prepayment (on the amount
prepaid), at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand and (iii) with respect to the interest accrued at the
Default Rate, upon demand.


 


Section 2.07. 
Capital Adequacy. 
In the event that after the date of the execution hereof (a) the
application, enactment or adoption of, or any change in, any law, rule,
regulation, treaty, guideline or directive, or the occurrence of the effective
date of any law, rule, regulation, treaty guideline or directive or any
provision thereof enacted or adopted on the date of the execution hereof but
which has not yet become effective, or the application, interpretation or
enforcement of any of the foregoing by any court, central bank, administrative
or governmental authority charged with the administration thereof (whether or
not having the force of law) (each a “Regulatory Change”) shall either
(i) impose, modify or deem applicable any reserve, deposit, insurance premium,
assessment, fee, capital requirement, tax (other than taxes imposed on the net
income of any of the Banks or any Participant), or similar requirement
applicable to the existence of the Commitments and/or Contingent Commitments or
(ii) impose any other condition in connection with the maintenance of the
Commitments and/or Contingent 


 


15





















 


Commitments, or
(b) any of the Banks or any Participant shall, in good faith,
(i) voluntarily impose, modify or deem applicable to itself, any reserve,
deposit, insurance premium, assessment, fee, capital requirement or similar
requirement applicable to the Commitments and/or Contingent Commitments or
(ii) voluntarily impose any other condition in connection with any of the
Commitments and/or Contingent Commitments, designed to comply with or prepare
for future compliance with any Regulatory Change, and the result of any of the
foregoing shall be to increase the cost to any of the Banks or any Participant
of extending, issuing or maintaining the Commitments and/or Contingent
Commitments or to reduce any amount (or the effective return on any amount) received
or receivable by any of the Banks or any Participant in connection with this
Agreement (which increase in cost or reduction in yield shall be the result of
any such Bank’s or any such Participant’s reasonable allocation, in a
nondiscriminatory manner among borrowers having obligations to such Bank or
such Participant similar to those of the Borrowers, of the aggregate of such
cost increases or yield reductions resulting from such event), then, upon
written demand by the such Bank, the Borrowers, jointly and severally, agree to
promptly pay to such Bank, from time to time as specified by such Bank,
additional amounts which shall be sufficient to compensate such Bank for all
such increased costs or reductions in yield accruing from and after the date of
such demand.  Such Bank shall submit to
the Borrowers, at or prior to the making of each such demand, a certificate
setting forth in reasonable detail such increased costs or yield reductions
incurred by such Bank or any Participant as a result of any of the foregoing,
which certificate shall be conclusive, absent manifest error, as to the amount
thereof.


 


ARTICLE III



FEES; TERMINATION AND INCREASE OF COMMITMENT


 


Section 3.01. 
Fees.


 


(a)           The Borrowers jointly and severally
agree to pay to the Agent for distribution to the Banks pro rata in accordance
with their respective Unutilized Commitments a commitment fee (such commitment
fee, together with the commitment fee payable pursuant to Section 3.01(b),
being the “Commitment Fee”) for the period from the Effective Date until the
Expiry Date (or such earlier date as the Commitments shall have been
terminated) computed at a rate equal to (i) 0.53% per annum on the
daily average aggregate Unutilized Commitments of the Banks for the period
ending on April 30, 2010 and (ii) 0.60% per annum on the daily
average Unutilized Commitments of the Banks thereafter; provided, however, that
(A) if the Borrower’s Rating for any Borrower assigned by either Moody’s
or S&P shall be less than Aaa or AAA, respectively, but greater than A1 and
A+, respectively, the Commitment Fee shall be computed at a rate equal to
(i) 0.555% per annum on the daily average aggregate Unutilized Commitments
of the Banks for the period ending on April 30, 2010 and (ii) 0.63%
per annum on the daily average Unutilized Commitments of the Banks thereafter,
and (B) if the Borrower’s Rating for any Borrower assigned by either Moody’s
or S&P shall be equal to or less than A1 or A+, respectively, the
Commitment Fee shall be computed at a rate equal to (i) 0.575% per annum
on the daily average aggregate Unutilized Commitments of the Banks for the
period ending on April 30, 2010 and (ii) 0.65% per annum on the daily
average Unutilized Commitments of the Banks


 


16





















 


thereafter.  In the case of a split rating, the lower of
the Moody’s rating or the S&P rating shall determine the Commitment
Fee.  Notwithstanding the foregoing, any
Commitment Fee accrued with respect to the Unutilized Commitment of a
Defaulting Bank during the period prior to the time such Bank became a
Defaulting Bank and unpaid at such time shall not be payable by the Borrowers
so long as such Bank shall be a Defaulting Bank except to the extent that such
Commitment Fee shall otherwise have been due and payable by the Borrowers prior
to such time.  No Commitment Fee shall
accrue on the Unutilized Commitment of a Defaulting Bank so long as such Bank
shall be a Defaulting Bank.


 


(b)           The Borrowers jointly and severally
agree to pay each Part C Bank a Commitment Fee for the period from the
Effective Date until the Expiry Date (or such earlier date as the Contingent
Commitment of such Part C Bank shall have been terminated) computed as
agreed in writing from time to time by the Borrowers and such Part C Bank.


 


(c)           Accrued Commitment Fees shall be due
and payable quarterly in arrears on the first Business Day of each May, August,
November and February of each year and on the Expiry Date or upon such earlier
date as the Commitments or the Contingents Commitments, as the case may be,
shall be terminated.


 


(d)           The Borrowers jointly and severally
agree to pay to the Agent such fees in connection with the Credit Documents as
may be agreed to in writing from time to time between the Borrowers and the
Agent.


 


Section 3.02.  Voluntary Termination of Unutilized
Commitments.  Upon
at least five Business Days prior notice to the Agent at its Notice Office, the
Borrowers shall have the right to terminate the Unutilized Commitments or
Unutilized Contingent Commitments or both in whole or in part, in minimum
amounts of $5,000,000 (or, if greater, in integral multiples of $1,000,000) for
the Unutilized Commitments and Unutilized Contingent Commitments, provided that
the Borrowers shall concurrently satisfy their obligations under Section 3.01.


 


Section 3.03.  Mandatory Termination of Commitments.


 


(a)           Except as otherwise provided in Section 2.01,
the Commitment of each Bank shall be mandatorily and permanently reduced on
each date a Loan is made by such Bank pursuant to Section 2.01(a) by the
amount of such Loan, without regard to prepayments or repayments.  Except as otherwise provided in Section 2.01,
the Contingent Commitment of each Part C Bank shall be mandatorily and
permanently reduced on each date a Loan is made by such Part C Bank
pursuant to Section 2.01(b) by the amount of such Loan, without regard to
prepayments or repayments.


 


(b)           Notwithstanding anything herein to
the contrary, the Borrowers shall have the right to unilaterally terminate the
Commitment and/or Contingent Commitment of any Bank, at any time after the
Effective Date, if such Bank shall be a party hereto on the Effective Date, or
at any time after the effective date of the Assignment and Assumption Agreement
pursuant to which it becomes a party hereto if such Bank shall become a party


 


17





















 


hereto after the
Effective Date pursuant to Section 3.04 or 12.04, or at any time after the
Increase Date on which it becomes a party hereto if such Bank shall become a
party hereto after the Effective Date pursuant to Section 3.05, the
unsecured senior debt rating (or shadow rating as reflected in a letter) of
such Bank or its parent shall be downgraded by Moody’s or S&P, such
termination to be effective two (2) Business Days after providing to such Bank
a notice of termination.  The Borrowers
shall, concurrent with such termination, satisfy their obligations owed to the
affected Bank under Section 3.01.


 


(c)           Notwithstanding anything herein to
the contrary, the Borrowers shall have the right to unilaterally terminate the
Commitment and/or Contingent Commitment of any Bank if such Bank becomes a Defaulting
Bank, such termination to be effective upon the payment to the Agent of the
amount described in the next succeeding sentence.  The Borrowers shall, concurrent with such
termination, pay to the Agent the amounts owed to the Defaulting Bank pursuant
to Section 3.01.  The Agent shall
distribute any amount so received from the Borrowers (i) first, to the Part C
Banks, as payment owed to the Part C Banks by the Defaulting Bank pursuant
to Section 2.04(d), and (ii) second, to the Defaulting Bank, any excess.  If an Eligible Transferee is to be admitted
to this Agreement in replacement of a Defaulting Bank which is a Part B
Bank and such Eligible Transferee agrees to not only assume the Defaulting Bank’s
Commitment and/or Contingent Commitment but also agrees to purchase all of the
Defaulting Bank’s Loans, such Eligible Transferee shall pay to the Part C
Banks which have funded all or part of the Loans which were to be made by such
Defaulting Bank an amount equal to the remaining unpaid amount of principal so
advanced by such Part C Banks plus any accrued and unpaid interest thereon
computed in accordance with Section 2.06 and the Borrowers shall pay to
the Agent the amount owed to the Defaulting Bank pursuant to Section 3.01.  After making such payment the Eligible
Transferee shall be the Bank owning such Loans. 
The amounts paid by such Eligible Transferee to the Part C Bank
shall be applied to reduce the obligations of the Defaulting Bank under Section 2.04(d),
amounts remaining unpaid under such Section shall continue to be owing by such
Defaulting Bank in accordance with such Section.


 


(d)           Upon termination of a Bank’s
Commitment and/or Contingent Commitment pursuant to Section 3.03(b) or
3.03(c) the Borrowers may request that the remaining Banks increase their
Commitments and/or Contingent Commitments as described in Section 3.05(a) or
designate one or more Eligible Transferees to assume the Commitment and/or
Contingent Commitment of the Bank being terminated.  In the event the Borrowers’ designate one or more
Eligible Transferees which agree to provide the Commitment and/or Contingent
Commitment of the terminated Bank such Eligible Transferee(s) may become party
to this Agreement by executing and delivering a counterpart of this Agreement.


 


(e)           In addition to any other mandatory
Commitment and Contingent Commitment reductions pursuant to this Section 3.03,
the Commitment of any Bank which does not agree to extend the Expiry Date
pursuant to Section 3.04, and the Contingent Commitment of such Bank if
such Bank is a Part C Bank, shall terminate in its entirety on such Expiry
Date in effect on the date such Bank does not agree to extend the Expiry Date.


 


 


18





















 


(f)                                    In
addition to any other mandatory Commitment and Contingent Commitment reductions
pursuant to this Section 3.03, the Commitment, and the Contingent
Commitment of such Bank if such Bank is a Part C Bank, of each Bank shall
terminate in its entirety on the Expiry Date.


 


Section 3.04.  Expiry Date.


 


(a)                                  The
Commitments and the Contingent Commitments shall expire on April 30, 2015
(the “Expiry Date”); provided, however, that before (but not earlier than
90 days nor later than 60 days before) each April 30, commencing
April 30, 2008, the Borrowers may make a written request (an “Extension
Request”) to the Agent, at its Notice Office, who shall forward a copy to each
of the Banks, that the Expiry Date be extended by one calendar year.  Such Extension Request shall include a
certification by an Authorized Officer of each Borrower that no Default or
Event of Default has occurred and is continuing and all representations and
warranties contained herein and the other Credit Documents are true and correct
in all material aspects on and as of the date of the Extension Request (it
being understood and agreed that any representation or warranty which expressly
refers by its terms to a specified date shall be required to be true only as of
such date).  If by the date occurring 30 days
next succeeding the Agent’s receipt of such Extension Request, any Bank agrees
thereto in writing by so indicating on counterparts of the Extension Request
and delivering such counterpart to the Borrowers, “Expiry Date” as to such Bank
shall mean the April 30, with such extension of the Expiry Date to be
effective from and after April 30 in respect of which the Extension
Request was made and such extension shall be for a period so as to maintain a
Commitment Period of seven years, provided that any failure to so notify the
Borrowers shall be deemed to be a disapproval by such Bank of the Borrowers’
Extension Request.  The Commitment of any
Bank which does not so agree, and, if such Bank is a Part C Bank, the
Contingent Commitment of such Bank, shall terminate upon the Expiry Date in
effect on the date such Bank does not so agree. 
No Bank shall be obligated to grant any extension pursuant to this
Section 3.04(a) and any such extension shall be in the sole
discretion of each Bank.  The Borrowers,
jointly and severally, agree to pay to each Bank which does not so agree all
amounts owing under its Note and this Agreement on the effective date of the
termination of such Bank’s Commitment, and, if applicable, Contingent
Commitment.


 


(b)                                 If
less than all of the Banks consent to an Extension Request (each Bank that has
not so consented being a “Declining Bank”, and each other Bank being an
“Extending Bank”), the Borrowers shall have the right to require any Declining
Bank to assign in full its rights and obligations under this Agreement
(i) to any one or more Extending Banks designated by the Borrowers that
have offered in their returned counterpart of the Extension Request to increase
their respective Commitments (and, if any such Extending Bank is a Part C
Bank, its Contingent Commitment) in an aggregate amount at least equal to the
amount of such Declining Bank’s Commitment (and, if such Declining Bank is a
Part C Bank, its Contingent Commitments), (such Bank being an “Increasing
Extending Bank”) or (ii) to any one or more Eligible Transferees
designated by the Borrowers that agree to assume all of such rights and
obligations (each such Eligible Transferee being a “Replacement Bank”),
provided that (A) such Declining Bank


 


19





















 


shall have
received payment of all amounts owing under its Note and to it under this
Agreement on the effective date of such assignment, (B) such assignment
shall otherwise have occurred in compliance with Section 12.04 including,
without limitation, clauses (iii) and (iv) of subsection (b) thereof
and (C) the effective date of such assignment shall be the date specified
by the Borrowers and agreed to by the Replacement Bank or Increasing Extending
Bank, as the case may be, which date shall be on or prior to the applicable
Expiry Date.  Each Bank that is
Defaulting Bank shall, so long as such Bank is Defaulting Bank, constitute a
Declining Bank.


 


Section 3.05.  Increase of Commitments.


 


(a)                                  The
Borrowers may, from time to time, request the Banks to increase their
Commitments and/or Contingent Commitments (i) at any time a Bank’s ratings
are reduced as described in Section 3.03(b), in order to replace the
Commitment and/or Contingent Commitment of the affected Bank, such increase not
to exceed the Commitment and/or Contingent Commitment of the affected Bank,
(ii) at any time there shall be a Defaulting Bank, in order to replace the
Commitment and/or Contingent Commitment of the Defaulting Bank, such increase
not to exceed the Commitment and/or Contingent Commitment of the Defaulting
Bank and (iii) at any time during the 90 day period preceding each
anniversary of the date of this Agreement. 
In order to request such an increase the Borrowers shall make a written
request (an “Increase Request”) to the Agent at its Notice Office (who shall forward
a copy to each of the Banks) that (i) the Commitments of the Banks be
increased by an aggregate amount specified and (ii) the Contingent
Commitments of the Part C Banks be increased by an aggregate amount
specified.  Such Increase Request shall
include a certification by a senior officer of each Borrower that no Default or
Event of Default has occurred and is continuing and all representations and
warranties contained herein and in the other Credit Documents are true and
correct in all material respects on and as of the date of the Increase Request
(it being understood and agreed that any representation or warranty which
expressly refers by its terms to a specified date shall be required to be true
only as of such date).  The Borrowers
shall indicate in the Increase Request the date on which they want the
requested increases to become effective which shall be (A) prior to the
Expiry Date and (B) at least 45 days after the Agent’s receipt of such
Increase Request.  Each Increase Notice
shall specify the date by which Banks who wish to increase their Commitment or
Contingent Commitments, as the case may be, must indicate their willingness to
increase their Commitment or Contingent Commitment, as the case may be, the
amount of such increase and the date on or after which such Bank will agree to
such Increase (the “Commitment Date”), which date shall be no sooner than
45 days after the Agent’s receipt of the Increase Request.  No Bank shall be obligated to increase its
Commitment and/or Contingent Commitment pursuant to this Section 3.05 and
any such increase shall be in the sole discretion of each Bank; provided that
any failure to notify the Agent or the Borrowers shall be deemed to be a
disapproval by such Bank of the Borrowers’ Increase Request.  If any Banks notify the Agent that they are
willing to increase the amount of their respective Commitments and/or
Contingent Commitment, as the case may be, the Agent shall allocate the
increases requested by the Borrowers among the Banks which have so notified the
Agent subject to the maximum increase agreed to by each Bank.  The


 


20





















 


date on which any
such increase in the Commitments or Contingent Commitments becomes effective
shall be the “Increase Date.”


 


(b)                                 Promptly
following each Commitment Date, the Agent shall notify the Borrowers as to the
amount, if any, by which the Banks are willing to participate in the requested
increase.  If the aggregate amount by
which the Banks are willing to increase their Commitment and/or Contingent
Commitment, as the case may be, on any such Commitment Date is less than the
requested amount, then any one or more Eligible Transferees designated by the
Borrowers that agree to provide Commitments and/or Contingent Commitments for the
shortfall may become party to this Agreement by executing and delivering a
counterpart of this Agreement.


 


(c)                                  On
each Increase Date, each Eligible Transferee that accepts an offer to
participate in a requested Commitment increase in accordance with Section 3.05(b) shall
become a Bank party to this Agreement as of such Increase Date and the
Commitment and/or Contingent Commitment of each Bank agreeing to participate in
such increase shall be increased as of such Increase Date by the amount set forth
in its notice delivered to the Agent in accordance with
Section 3.05(a) (or by the amount allocated to such Bank pursuant to
the last sentence of Section 3.05(a)).


 


(d)                                 Notwithstanding
the foregoing, any increase in the Commitment of a Part B Bank shall be
subject to the prior written approval of each Part C Bank.


 


ARTICLE IV


 


PREPAYMENTS; PAYMENTS


 


Section 4.01.  Voluntary Prepayments.  The Borrowers shall have the right to prepay
the Loans, without premium or penalty, in whole or in part from time to time,
provided that the Borrowers shall give the Agent at its Notice Office at least
three Business Days’ prior notice of its intent to prepay the Loans.


 


Section 4.02.  Mandatory Prepayments.  On each Pledged Reserve Repayment Date, an
amount equal to 100% of the Pledged Reserves Account Funds with respect to
which the Borrowers have delivered a Pledged Reserve Release Notice as required
by Section 8.12 shall be applied as a mandatory prepayment of principal of
outstanding Loans.


 


Section 4.03.  Method and Place of Payment.  All payments by the Borrowers to the Agent
for the account of the Banks or any of them hereunder shall be fully earned
when due and nonrefundable when paid and made in lawful currency of the United
States and in immediately available funds. 
Amounts payable to the Agent hereunder shall be transferred to the
Agent’s account at:  Wachovia Bank,
National Association, ABA #:  026-005-092,
Account:  Bayerische Landesbank,
New York Branch, Account #:  200-1935-3009-0,
Reference:  FSA Line of Credit, (or to
such other account of the Agent as the Agent may specify by written notice to
the Borrowers) not later than 12:00 noon, New York, New York
time, on the date payment is due.  Any
payment received by the Agent after 12:00 noon, New York,
New York time, shall be deemed to have been received by the Agent on the
next Business Day.  If any payment
hereunder


 


21





















 


is due
on a day that is not a Business Day, then such payment shall be due on the
immediately succeeding Business Day. 
Payments received hereunder by the Agent for the account of the Banks
shall, except as otherwise provided in this Section, be promptly distributed to
each Bank in the same proportion that each Bank’s Commitment bears to the
aggregate of all Banks’ Commitments. 
Fees payable to any Defaulting Bank described in the last sentence of
Section 3.01(a) which is a Part B Bank shall be applied to the
payment of the obligations owed by such Bank to the Part C Banks with any
excess to be paid to such Part B Bank. 
Payments of principal and interest made by the Borrowers on any Loan
which was made by or should have been made by a Part B Bank which is a
Defaulting Bank shall be applied to the repayment of the principal of and
interest (calculated as described in Section 2.06) on Loans advanced by
the Part C Banks by reason of such Defaulting Bank’s default until such
default is cured with any excess to be paid to such Part B Bank.  Amounts so distributed to the Part C
Banks shall be made in the same proportion that each Part C Bank’s
Contingent Commitment bears to the aggregate Contingent Commitments of all
Part C Banks to the extent such Bank has met its Obligations under
Section 2.01(b).  To the extent
amounts paid by the Part B Bank which is a Defaulting Bank (or which would
have been paid to such Bank if it were not Defaulting Bank) repays all amounts
owed to a Part C Bank with respect to Defaulted Loans related to such
Part B Bank, such Part B Bank shall be the owner of such Loan and
shall be entitled to all rights and benefits hereunder with respect thereto.


 


Section 4.04.  Net Payments.


 


(a)                                  All
payments made by the Borrowers hereunder or under any Note will be made without
setoff, counterclaim or other defense. 
Except as provided in Section 4.04(b) and
Section 12.04(b), all such payments will be made free and clear of, and
without deduction or withholding for, any present or future taxes, levies,
imposts, duties, fees, assessments or other charges of whatever nature now or
hereafter imposed by any jurisdiction or by any political subdivision or taxing
authority thereof or therein with respect to such payment (but excluding any
tax imposed on or measured by the net income or gross income or gross receipts
of any Bank (other than withholding taxes or taxes in lieu of withholding
taxes) pursuant to the laws of the jurisdiction (or any political subdivision
or taxing authority thereof or therein) in which the principal office or
lending office of such Bank is located or in which such Bank is organized or in
which such Bank is doing business through a branch or office from which such
jurisdiction treats a Loan as having been made) and all interest, penalties or
similar liabilities with respect thereto (collectively, “Taxes”).  If any Taxes are so levied or imposed, the
Borrowers, jointly and severally, agree to pay the full amount of such Taxes
and such additional amounts as may be necessary so that every payment of all
amounts due hereunder or under any Note, after withholding or deduction for or
on account of any Taxes, will not be less than the amount provided for herein
or in such Note.  The Borrowers, jointly
and severally, agree to reimburse each Bank, upon its written request, which
request shall show the basis for calculation of such reimbursement, for taxes
imposed on or measured by the net income of such Bank pursuant to the laws of
the jurisdiction (or any political subdivision or taxing authority thereof or
therein) in which its principal office or lending office is located or in which
such Bank is organized or in which such Bank is doing business through a branch
or office from which such jurisdiction treats a Loan as having been made as it
shall determine are payable by it in respect of amounts paid to or on behalf of


 


22





















 


such Bank pursuant
to the preceding sentence.  The
Borrowers, shall furnish to the applicable Bank within 45 days after the date
the payment of any Taxes is due pursuant to applicable law certified copies of
any tax receipts available to the Borrowers evidencing such payment by the
Borrowers.  The Borrowers, jointly and
severally, agree to indemnify and hold harmless each Bank, and reimburse each
Bank upon its written request, for the amount of any Taxes so levied or imposed
and paid by such Bank.


 


(b)                                 Each
Bank which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
agrees (i) in the case of any such Bank that is a “bank” within the
meaning of Section 881(c)(3)(A) of the Code and which constitutes a
Bank hereunder on the Effective Date, to provide to the Borrowers and the Agent
on or prior to the Effective Date two original signed copies of Service
Form 4224 or Form 1001 certifying to such Bank’s entitlement to an
exemption from United States withholding tax with respect to payments to be
made under this Agreement and under any Note, (ii) in the case of any such
Bank that is a “bank” within the meaning of Section 881(c)(3)(A) of
the Code, that, to the extent legally entitled to do so, (A) with respect
to a Bank that is an assignee or transferee of an interest under this Agreement
pursuant to Section 12.04(b) (unless the respective Bank was already
a Bank hereunder immediately prior to such assignment or transfer) or a
Replacement Bank under Section 3.04(b), upon the date of such assignment
or transfer to such Bank, and (B) with respect to any such Bank, from time
to time upon the reasonable written request of the Borrowers after the
Effective Date, such Bank will provide to the Borrowers two original signed
copies of Internal Revenue Service Form 4224 or Form 1001 (or any
successor forms) certifying to such Bank’s entitlement to an exemption from
United States withholding tax with respect to payments to be made under this
Agreement and under any Note, (iii) in the case of a Bank other than a
Bank described in clause (i) or (ii) above on or prior to the
Effective Date, to provide to the Borrowers (A) a certificate
substantially in the form of Exhibit G hereto (any such certificate, a
“Section 4.04(b)(iii) Certificate”) and (B) two accurate and
complete original signed copies of Internal Revenue Service Form W-8,
certifying to such Bank’s legal entitlement at the date of such certificate
(assuming compliance by the Borrowers with Section 8.13), to an exemption
from U.S. withholding tax under the provisions of Section 881(c) of
the Code with respect to payments to be made under this Agreement and
(iv) in the case of any such Bank (other than a Bank described in clause (i) or
(ii) above), (A) with respect to a Bank that is an assignee or
transferee of an interest under this Agreement pursuant to
Section 12.04(b) (unless the respective Bank was already a Bank
hereunder immediately prior to such assignment or transfer), upon the date of
such assignment or transfer to such Bank, and (B) with respect to any such
Bank, from time to time upon the reasonable written request of the Borrowers
after the Effective Date, to provide to the Borrowers such other forms as may
be required in order to establish the entitlement of such Bank to an exemption
from withholding with respect to payments under this Agreement and under any
Note.  Notwithstanding anything to the
contrary contained in Section 4.04(a), but subject to the immediately succeeding
sentence, the Borrowers shall be entitled, to the extent it is required to do
so by law, to deduct or withhold Taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder (without any obligation to indemnify or
pay the respective Bank additional amounts with respect thereto) for the
account of any


 


23





















 


Bank which is not
a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes and which has not provided
to the Borrowers such forms required to be provided to the Borrowers pursuant
to the first sentence of this Section 4.04(b).  Notwithstanding anything to the contrary
contained in the preceding sentence and except as set forth in
Section 12.04(b), the Borrowers, jointly and severally, agree to indemnify
each Bank in the manner set forth in Section 4.04(a) in respect of
any amounts deducted or withheld by it as described in the immediately
preceding sentence as a result of any changes after the Effective Date in any
applicable law, treaty, governmental rule, regulation, guideline or order, or
in the interpretation thereof, relating to the deducting or withholding of
Taxes.


 


(c)                                  If
the Borrowers pay an additional amount pursuant to Section 4.04 and a Bank
receives any refund of tax or credit against its tax liabilities as a result of
such payment by the Borrowers, such Bank shall pay to the Borrowers an amount
that such Bank determines, in its reasonable judgment, is equal to the net tax
benefit obtained by such Bank as a result of such payment by the
Borrowers.  Any such payment required
pursuant to the immediately preceding sentence shall be accompanied by a
schedule that sets forth the Bank’s basis for its calculation of such net
tax benefit.  Whether or not a Bank
claims any refund or credit shall be in the sole discretion of each Bank.  Nothing in this
Section 4.04(c) shall require a Bank to disclose or detail its
calculation of the amount of any tax benefit or any other amount to the
Borrowers or any other Person (including, without limitation, any tax
return) other than the provision of the schedule referred to above.


 


(d)                                 Payments
by the Borrowers under this Section 4.04 shall only be due to the extent
that payment is demanded by the Banks from other borrowers having similar
obligations.


 


Section 4.05.  Limitations on Sources of
Payment.  Notwithstanding any
other provision of this Agreement or of any other Credit Document, the
obligations of the Borrowers to make payments of principal and interest on the
Loans and the Notes are limited recourse obligations of the Borrowers payable
solely from the Pledged Recoveries, the Pledged Premiums, the Pledged Reserves
Account Funds and the other Collateral described in the Security Agreement, and
none of the Agent, the Collateral Agent, any Bank or any other Person shall be
entitled to procure any money judgment against or to levy or foreclose upon or
attach any other assets or properties of the Borrowers for payment of such
obligations; provided, however, that nothing herein contained shall limit,
restrict or impair the lien created by the Security Agreement or the right of
any Bank to exercise any of its rights herein or in any of the other Credit
Documents upon the occurrence of an Event of Default or otherwise, or to bring
suit and obtain a judgment against the Borrowers or any of them (recourse
thereon being limited only as to payment of principal and interest on the Loans
and the Notes as provided in this Section 4.05).


 


24





















 


ARTICLE V


 


CONDITIONS PRECEDENT TO
EFFECTIVENESS


 


This Agreement shall
become effective subject to the satisfaction (or waiver by the Banks) of the
following conditions:


 


Section 5.01.  Execution of Agreement; Notes.  The Borrowers and each Bank shall have signed
a copy hereof (whether the same or different copies) and shall have delivered
the same to the Agent at its Notice Office and there shall have been delivered
to each Bank a Note executed by the Borrowers in the amount, maturity and as
otherwise provided herein.


 


Section 5.02.  No Default; Representations and
Warranties.  There shall exist
no Default or Event of Default hereunder or under the 1997 Credit
Agreement or the 1999 Credit Agreement (as defined herein) and all
representations and warranties contained herein and in the other Credit
Documents shall be true and correct in all material respects with the same effect
as though such representations and warranties had been made on and as of the
Effective Date.


 


Section 5.03.  Opinions of Counsel.


 


(a)                                  The
Agent shall have received an opinion addressed to it and the Banks and dated
the Effective Date (i) from Bruce E. Stern, General Counsel of the
Borrowers, covering the matters set forth in Exhibit C and (ii) from
Kutak Rock LLP and in house German counsel to the Agent, and from counsel
(including, if applicable, foreign counsel) to each Bank each in form and substance
satisfactory to it.


 


(b)                                 Moody’s,
S&P and the Borrowers shall have received an opinion addressed to each of
them and dated the Effective Date from counsel to each Bank in form and
substance satisfactory to each of them.


 


Section 5.04.  Corporate Documents; Proceedings.


 


(a)                                  The
Agent shall have received a certificate, dated the Effective Date, signed by an
Authorized Officer of each Borrower, and attested to by the Secretary or any
Assistant Secretary of each Borrower, each in the form of Exhibit D with
appropriate insertions, together with copies of the articles of incorporation
and by laws of each Borrower and the resolutions of each Borrower referred to
in each such certificate.


 


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


 


(c)                                  Certificates
in respect of each Borrower in form and substance satisfactory to the Agent, to
the effect that each of them is in good standing in such jurisdiction.


 


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Section 5.05.  Security Agreement.  Each Borrower shall have duly authorized,
executed and delivered an Amended and Restated Pledge and Security Agreement in
the form of Exhibit E (as modified, supplemented or amended from time to
time, the “Security Agreement”) covering all of each Borrower’s present and future
Collateral, together with:


 


(a)                                  executed
copies of proper amendments to financing statements (Form UCC-3) to
be filed under the UCC of each jurisdiction as may be necessary or, in the
opinion of the Collateral Agent, desirable to perfect the security interests
purported to be created by the Security Agreement;


 


(b)                                 evidence
of the completion of all other recordings and filings of, or with respect to,
the Security Agreement as may be necessary or, in the opinion of the Collateral
Agent, desirable to perfect the security interests purported to be created by
the Security Agreement; and


 


(c)                                  evidence
that all other actions necessary or, in the opinion of the Collateral Agent,
desirable to perfect and protect the security interests purported to be created
by the Security Agreement have been taken.


 


Section 5.06.  Covered Portfolio, Etc.  The Agent shall have received a certificate,
dated the Effective Date, signed by an Authorized Officer of FSA, setting forth
in reasonable detail as of March 31, 2005, (a) each Insured
Obligation in the Covered Portfolio and each reinsurance agreement or similar
arrangement which covers any material amount of such Insured Obligations,
(b) each default by the issuer of any such Insured Obligation or other
obligor with respect thereto which has formed or could form the basis of a
claim under an Insurance Contract, (c) each default by any party to any
such reinsurance agreement or similar arrangement, (d) each claim paid by
a Borrower under any Insurance Contract with respect to such Insured
Obligations, (e) the Borrowers’ reasonable estimate as of March 31,
2005 of the Average Annual Debt Service on the Covered Portfolio, (f) the
Borrowers’ Cumulative Losses (stating separately any Permitted Reserves
included therein) for the period from January 1, 1996 through
March 31, 2005, and (g) the Borrowers’ reasonable estimate as of
March 31, 2005 of Installment Premiums payable with respect to the Covered
Portfolio.


 


Section 5.07.  Adverse Change, Rating, etc.


 


(a)                                  Nothing
shall have occurred (and no Bank shall have become aware of any facts or
conditions not previously known) which such Bank shall reasonably determine
has, or could reasonably be expected to have, a material adverse effect on the
rights or remedies of such Bank, or on the ability of a Borrower to perform its
obligations to such Bank or which has, or could reasonably be expected to have,
a materially adverse effect on the business, operations, property, assets,
liabilities or condition (financial or otherwise) of such Borrower.


 


(b)                                 All
necessary governmental (domestic and foreign) and third-party approvals in
connection with the transactions contemplated by the Credit Documents and
otherwise referred to herein or therein shall have been obtained and remain in
effect, and all applicable waiting periods shall have expired without any
action being taken by any


 


26





















 


competent
authority which restrains, prevents or imposes materially adverse conditions
upon the consummation of the transactions contemplated by the Credit Documents
and otherwise referred to herein or therein. 
Additionally, there shall not exist any judgment, order, injunction or
other restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon the making of the Loans.


 


(c)                                  On
the Effective Date, the Borrower’s Rating assigned to each Borrower by Moody’s
and S&P shall be Aaa and AAA, respectively.


 


Section 5.08.  Litigation.  No litigation by any entity (private or
governmental) shall be pending or threatened with respect to this Agreement or
any documentation executed in connection herewith or the transactions
contemplated hereby, or with respect to any material Indebtedness of any
Borrower or which any Bank shall determine could reasonably be expected to have
a materially adverse effect on the business, operations, property, assets,
liabilities or condition (financial or otherwise) of any Borrower.


 


Section 5.09.  Fees, Etc.  The Borrowers shall have paid to the Agent
and to the Banks all costs, fees (including those described in
Section 3.01) and expenses (including, without limitation, legal fees and
expenses) payable to the Agent and/or the Banks to the extent then due.


 


All of the certificates,
legal opinions and other documents and papers referred to in this
Article V, unless otherwise specified, shall have been delivered to the
Agent at its Notice Office.


 


ARTICLE VI


 


CONDITIONS PRECEDENT TO ALL CREDIT
EVENTS


 


The Obligation of the
Banks to make Loans is subject, at the time of each such Credit Event (except
as hereinafter indicated), to the satisfaction of the following conditions:


 


Section 6.01.  Loss Threshold Incurrence Date.  At or prior to the time of each such Credit
Event, the Loss Threshold Incurrence Date shall have occurred.


 


Section 6.02.  Cumulative Losses.  After giving effect to such Credit Event, the
aggregate principal amount of all Loans (other than those borrowed to establish
or maintain Permitted Reserves which have been repaid and which were not used
to pay Losses) made hereunder without regard to payments or prepayments shall
not exceed Cumulative Losses in excess of the Loss Threshold Amount.


 


Section 6.03.  Principal Amount.  The principal amount of the requested Loan
shall not exceed the sum of the Unutilized Commitments on the date the Loan is
to be advanced.


 


Section 6.04.  Notice of Borrowing.  Prior to the making of each Loan, the Bank
shall have received a Notice of Borrowing meeting the requirements of
Section 2.03.


 


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The acceptance of the
proceeds of each Credit Event shall constitute a representation and warranty by
the Borrowers to each Bank that the conditions set forth in this
Article have been satisfied on the date of such acceptance.


 


ARTICLE VII


 


REPRESENTATIONS, WARRANTIES AND
AGREEMENTS


 


In order to induce the
Banks to enter into this Agreement, the Borrowers make the following
representations, warranties and agreements as of the Effective Date, which
shall survive the execution and delivery of this Agreement and the Notes (it
being understood and agreed that any representation or warranty which expressly
refers by its terms to a specified date shall be required to be true and
correct in all material respect only as of such date):


 


Section 7.01.  Corporate Status.  Each Borrower and its Subsidiaries
(a) is a duly organized and validly existing corporation in good standing
under the laws of the jurisdiction of its incorporation, (b) has the power
and authority to own its property and assets and to transact the business in
which it is engaged and (c) is duly qualified as a foreign corporation and
in good standing in each jurisdiction where the ownership, leasing or operation
of property or the conduct of its business requires such qualification, except
where the failure to qualify or be in good standing would not have a material
adverse effect on the business, operations, property, assets, condition
(financial or otherwise) or prospects of the Borrowers and their Subsidiaries
taken as a whole.


 


Section 7.02.  Corporate Power and Authority.  Each Borrower has the corporate power to
execute, deliver and perform the terms and provisions of each of the Credit
Documents to which it is party and has taken all necessary corporate action to
authorize the execution, delivery and performance by it of each of such Credit
Documents.  Each Borrower has, or in the
case of the Credit Documents other than this Agreement, by the Effective Date
will have, duly executed and delivered each of the Credit Documents to which it
is party, and each of such Credit Documents constitutes or, in the case of each
such other Credit Document when executed and delivered, will constitute, its
legal, valid and binding obligation enforceable in accordance with its terms.


 


Section 7.03.  No Violation.  Neither the execution, delivery or
performance by the Borrowers of the Credit Documents to which any of them is a
party, nor compliance by it with the terms and provisions thereof, nor the use
of the proceeds of the Loans (a) will contravene any provision of any law,
statute, rule or regulation or any order, writ, injunction or decree of
any court or governmental instrumentality, (b) will conflict or be
inconsistent with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Security Agreement) upon any of the Borrowers or any of
their respective Subsidiaries pursuant to the terms of any indenture, mortgage,
deed of trust, credit agreement, loan agreement or any other agreement,
contract or instrument to which any Borrower or any such Subsidiary is a party
or by which any Borrower or any of their respective property or assets is bound
or to which any Borrower may be subject or (c) will violate any provision
of the


 


28





















 


Articles
of Incorporation or by laws of any of the Borrowers or any of their respective
Subsidiaries.


 


Section 7.04.  Governmental Approvals.  No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made prior to the Effective Date and except
for the filing of UCC Financing Statements and continuation of statements), or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with, (a) the
execution, delivery and performance of any Credit Document to which any
Borrower is a party or (b) the legality, validity, binding effect or
enforceability of any such Credit Document.


 


Section 7.05.  Financial Statements;
Financial Condition; Undisclosed Liabilities; Etc.


 


(a)                                  The
consolidated balance sheets of the Parent and its Subsidiaries at
December 31, 2004, the related consolidated statements of operations and
cash flows of the Parent and its Subsidiaries for the fiscal year ended on such
date and heretofore furnished to the Agent present fairly the consolidated
financial condition of the Parent and its Subsidiaries at such date and the
consolidated results of operations of the Parent and its Subsidiaries for the
periods ended on such date.  All such
financial statements have been prepared in accordance with generally accepted
accounting principles and practices consistently applied.  Since December 31, 2004, there has been
no material adverse change in the business, operations, property, assets or
condition (financial or otherwise) of the Parent or of the Borrowers and their
Subsidiaries taken as a whole.


 


(b)                                 The
financial statements of each Borrower as filed with the department of insurance
in their respective states of incorporation for the years ended
December 31, 2002, December 31, 2003 and December 31, 2004
heretofore furnished to the Agent present fairly for the period then ended, the
financial condition of each Borrower as of the respective dates of such
statements.  Such annual financial
statements were prepared in accordance with the statutory accounting principles
set forth in the applicable insurance law, all of the assets described therein
were the absolute property of the Borrower in question at the dates set forth
therein, free and clear of any liens or claims thereon, except as therein
stated, and each such annual statement is a full and true statement of all the
assets and liabilities and of the condition and affairs of each Borrower as of
December 31 of the year covered thereby and of its income and deductions
therefrom for the year ended on such date. 
Since December 31, 2004, there has been no material adverse change
in the business, operations, property, assets or condition (financial or
otherwise) of the Borrowers and their Subsidiaries taken as a whole.


 


(c)                                  Except
as fully reflected in the financial statements delivered pursuant to
Section 7.05(a), Section 7.05(b) or in Schedule II hereto,
there were as of the Effective Date no liabilities or obligations with respect
to each Borrower or any of their respective Subsidiaries of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether or
not due) which, either individually or in aggregate, would be material to any
such Borrower or to such Borrower and its Subsidiaries taken as a whole.


 


29





















 


Except as set
forth in Schedule II hereto, as of the Effective Date, none of the
Borrowers knows of any basis for the assertion against any Borrower or any of
their respective Subsidiaries of any liability or obligation of any nature
whatsoever that is not fully reflected in the financial statements delivered
pursuant to Section 7.05(a) and Section 7.05(b) which,
either individually or in the aggregate, could reasonably be expected to be
material to the Borrowers and their Subsidiaries taken as a whole.


 


Section 7.06.  Litigation.  There are no actions, suits or proceedings
pending or, to the best knowledge of the Borrowers, threatened (a) with
respect to any Credit Document or (b) that are reasonably likely to
materially and adversely affect the business, operations, property, assets or
condition (financial or otherwise) of the Borrowers and their Subsidiaries
taken as a whole.


 


Section 7.07.  True and Complete Disclosure.  All factual information (taken as a whole)
heretofore or contemporaneously furnished by or on behalf of the Borrowers, or
any of them, in writing to the Banks (including without limitation all
information contained in the Credit Documents) for purposes of or in connection
with this Agreement or any transaction contemplated herein is, and all other
such factual information (taken as a whole) hereafter furnished by or on behalf
of the Borrowers, or any of them, in writing to the Banks will be, true and accurate
in all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided.


 


Section 7.08.  Use of Proceeds; Margin
Regulations.  All proceeds of
each Loan shall be used by the Borrowers only to establish and/or maintain
Permitted Reserves in the Pledged Reserves Account and/or to pay or reimburse
itself for the payment of Losses in respect of the Covered Portfolio and no
part of the proceeds of any Loan will be used by any Borrower to purchase or
carry any Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock. Neither the making of any Loan nor the
use of the proceeds thereof will violate or be inconsistent with the provisions
of Regulations T, U or X of the Board of Governors of the Federal Reserve
System.


 


Section 7.09.  Tax Returns and Payments.  Each Borrower and their respective
Subsidiaries has filed all tax returns required to be filed by it and has paid
all income taxes payable by it which have become due pursuant to such tax
returns and all other taxes and assessments payable by it which have become
due, other than those not yet delinquent and except for those contested in good
faith and for which adequate reserves have been established. Each Borrower and
their respective Subsidiaries has paid, or has provided adequate reserves (in the
good faith judgment of the management of such Borrower) for the payment of, all
federal and state income taxes applicable for all prior fiscal years and for
the current fiscal year to the date hereof.


 


Section 7.10.  Compliance with ERISA.  Each Plan is in substantial compliance with
applicable provisions of ERISA and the Code; no Reportable Event has occurred
with respect to any Plan; no Plan has an Unfunded Current Liability, and no
Plan has an accumulated or waived funding deficiency or has applied for an
extension of any amortization period within the meaning of Section 412 of
the Code; neither the Borrowers nor any Subsidiary nor ERISA Affiliate has


 


30





















 


incurred
any material liability to or on account of a Plan pursuant to
Section 4062, 4063, 4064 or 4069 of ERISA which has not been satisfied in
full or expects to incur any liability under any of the foregoing sections with
respect to any such Plan; no condition exists which presents a material risk to
any Borrower or any of its Subsidiaries or any ERISA Affiliate of incurring a
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; neither the Borrowers nor any of their ERISA Affiliates are
or have ever been a party to, or ever been required to make contributions to,
or has terminated any multi employer plan (within the meaning of
Section 4001(a)(3) of ERISA); no Lien imposed under the Code or ERISA
on the assets of any Borrower or any of its Subsidiaries or any ERISA Affiliate
exists or is likely to arise on account of any Plan; and the Borrowers and
their respective Subsidiaries do not maintain or contribute to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) which
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any employee pension benefit plan (as
defined in Section 3(2) of ERISA) the obligations with respect to
which could reasonably be expected to have a material adverse effect on the
ability of any Borrower to perform its obligations under this Agreement.


 


Section 7.11.  Capitalization.  All outstanding shares of capital stock of
each Borrower have been duly and validly issued, are fully paid and non
assessable.  No Borrower has any
outstanding securities convertible into or exchangeable for its capital stock
or outstanding any rights to subscribe for or to purchase, or any options for
the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating
to, its capital stock.


 


Section 7.12.  Subsidiaries.  On the Effective Date, the corporations
listed on Schedule III are the only Subsidiaries of any of the
Borrowers.  Schedule III correctly
sets forth, as of the Effective Date, the percentage ownership (direct and
indirect) of each Borrower in each class of capital stock of each of its
Subsidiaries and also identifies the direct owner thereof.


 


Section 7.13.  Compliance with Statutes, Etc.  Each Borrower and their respective
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls), except such
noncompliance’s as would not reasonably be expected to have, in the aggregate,
a material adverse effect on the business, operations, property, assets or
condition (financial or otherwise) of the Borrowers and their Subsidiaries
taken as a whole.


 


Section 7.14.  Investment Company Act.  No Borrower and none of their respective
Subsidiaries is an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.


 


Section 7.15.  Public Utility Holding Company
Act.  No Borrower and none of
their respective Subsidiaries is a “holding company,” or a “subsidiary company”
of a “holding company,” or an “affiliate” of a “holding company” or of a
“subsidiary company” of a “holding company” within the meaning of the Public
Utility Holding Company Act of 1935, as amended.


 


31





















 


Section 7.16.  Compliance with Insurance Law.  FSA is duly licensed to transact business as
a financial guaranty insurance corporation by the New York Insurance
Department and FSAIC is duly licensed to transact business as a surety
insurance company by the State of Oklahoma and (a) each Borrower has all
other requisite federal, state and other governmental licenses, authorizations,
permits, consents and approvals to conduct its insurance and other business as
presently conducted and proposed to be conducted in each other jurisdiction in
which it writes or issues policies of insurance (including without limitation
any form of financial guaranty insurance, fidelity and surety insurance or
credit insurance), surety bonds, guaranties, contracts of reinsurance or other
undertakings similar to the foregoing (collectively, “Insurance Contracts”) or
in which it conducts business, except for failures, if any, to have such
licenses, authorizations, permits, consents and approvals which singly or in
the aggregate could not reasonably be expected to have a material adverse
effect on the business, assets, operations or financial condition of the
Borrowers and their Subsidiaries taken as a whole or the ability of any
Borrower to perform its obligations under this Agreement or any of the other
Credit Documents, (b) each Borrower has made all filings of each of its
forms of Insurance Contracts and of its rates and charges with all federal,
state and administrative or governmental bodies required for the use thereof
and has obtained all requisite approvals thereof, except for failures, if any,
to file or to obtain such approvals which singly or in the aggregate could not
reasonably be expected to have a material adverse effect on the business,
assets, operations or financial condition of each Borrower or the ability of
each Borrower to perform its obligations under this Agreement or any of the
other Credit Documents, (c) each Borrower has duly established and
maintains all reserves required under applicable federal, state and other laws,
rules and regulations, except for failures, if any, to maintain reserves
which could not reasonably be expected to have a material adverse effect on the
business, assets, operations or financial condition of each Borrower or the
ability of each Borrower to perform its obligations under this Agreement or any
of the other Credit Documents, (d) each Borrower has duly filed all annual
statements, financial statements and other information and reports required to
have been filed with federal, state and other administrative or governmental
body, except for failures, if any, to file which singly or in the aggregate
could not reasonably be expected to have a material adverse effect on the
business, assets, operations, property or condition (financial or otherwise) of
the Borrowers and their Subsidiaries taken as a whole or the ability of each
Borrower to perform its obligations under this Agreement or any of the Credit
Documents, and (e) each Borrower is in compliance (and has not received
any notice from the Department or similar administrative or governmental body
or an authorized representative thereof claiming that it is not in compliance)
with the New York Insurance Law or Oklahoma Insurance Law, as applicable,
and the regulations thereunder and with all other applicable federal, state and
other laws relating to its insurance and other business, except with respect to
failures, if any, to comply which singly or in the aggregate could not
reasonably be expected to have a material adverse effect on the business, assets,
operations, property or condition (financial or otherwise) of the Borrowers and
their Subsidiaries taken as a whole or the ability of each Borrower to perform
its obligations under this Agreement or any of the other Credit Documents.


 


Section 7.17.  Covered Portfolio.  Substantially all of the Insured Obligations
in the Covered Portfolio on the Effective Date were insured by the Borrowers
under Insurance Contracts in accordance with the Borrowers’ underwriting
criteria at the time in effect.  The
Borrowers have, in respect of the Covered Portfolio, no reason to believe that
their rights included among the Collateral are not valid and binding against
the obligors thereunder in


 


32





















 


accordance
with their respective terms, except insofar as enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and the availability of equitable
remedies, except for such Collateral which, in the aggregate, could not
reasonably be expected to have a material adverse effect on the right and
ability of the Collateral Agent, in accordance with the Security Agreement, to
realize upon the Collateral as a whole. 
Attached as Schedule IV hereto is a list of all reinsurance
agreements of the Borrowers with respect to the Covered Portfolio, all of which
are the legal, valid, binding and enforceable obligations of the parties
thereto in accordance with their terms, except insofar as enforceability may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting
the enforcement of creditors’ rights generally and the availability of
equitable remedies.


 


ARTICLE VIII


 


AFFIRMATIVE COVENANTS


 


Each Borrower covenants
and agrees that on and after the Effective Date and until the Commitments and
Contingent Commitments have terminated and the Loans and the Notes, together
with interest, Fees and all other obligations incurred hereunder and
thereunder, are paid in full:


 


Section 8.01.  Information Covenants.  FSA will furnish to the Agent and, upon the
request of any Bank addressed to the Chief Financial Officer of FSA, to such
Bank:


 


(a)                                  Quarterly Parent Financial Statements.  Within 60 days after the close of each
of the first three quarterly accounting periods in each fiscal year of the
Parent, the consolidated balance sheets of the Parent and its consolidated
Subsidiaries as at the end of such quarterly period and the related
consolidated statements of operations and cash flows for such quarterly period
and for the elapsed portion of the fiscal year ended with the last day of such
quarterly period, in each case setting forth comparative figures for the
related periods in the prior fiscal year, all of which shall be certified by
the chief financial officer of the Parent, subject to year end audit
adjustments to the extent required by Form 10-Q.


 


(b)                                 Annual Parent Financial Statements.  Within 120 days after the close of each
fiscal year of the Parent, the consolidated balance sheets of the Parent and
its consolidated Subsidiaries as at the end of such fiscal year and the related
consolidated statements of operations, stockholders’ equity and of cash flow
for such fiscal year, in each case setting forth comparative figures for the
preceding fiscal year and certified, in the case of the consolidated financial
statements, by independent certified public accountants of recognized national
standing or as reasonably acceptable to the Agent to the extent required by
Form 10-K.


 


(c)                                  Quarterly and Annual Borrower Financial Statements.  Promptly, and in any event within
10 Business Days after the filing thereof, a copy of the annual statement
for each calendar year and quarterly statements for each calendar quarter as
filed with the Department or other then comparable agency of other applicable
jurisdictions and the financial statements of FSA and, upon request of the
Agent, FSAIC for such calendar


 


33





















 


year or quarter
prepared in accordance with statutory accounting practices, accompanied by any
and all letters, reports and/or certifications prepared by public accountants
required to be filed with the Department or such other comparable agency,
certified by the chief financial officer of each such Borrower as presenting
fairly in accordance with statutory accounting principles applied (except as
specifically set forth therein) on a basis consistent with prior periods, the
information contained therein.


 


(d)                                 Officer’s Certificates.  At the time of the delivery of the financial
statements provided for in Section 8.01(a), (b) and (c), a
certificate of the Chief Financial Officer of FSA (i) listing the Insured
Obligations in the Covered Portfolio (and if the Loss Threshold Incurrence Date
has occurred identifying the Insurance Contracts with respect thereto) and
calculating in reasonable detail as of the date of such financial statements
(A) the Average Annual Debt Service on the Covered Portfolio, (B) if
such date is prior to the Loss Threshold Incurrence Date, the Borrowers’
Cumulative Losses (stating separately any Permitted Reserves included therein)
for the current Commitment Period, and (C) if such date is on or after the
occurrence of the Loss Threshold Incurrence Date, (1) the date of the
occurrence thereof, (2) evidence of the occurrence thereof, (3) the
amount of Permitted Reserves as of the date of such financial statements,
(4) the aggregate amount of Pledged Recoveries received by or for the
account of any Borrower during the current Commitment Period on or prior to the
date of such financial statements, (ii) to the effect that, to the best of
his knowledge, no Default or Event of Default has occurred and is continuing
or, if any Default or Event of Default has occurred and is continuing,
specifying the nature and extent thereof, (iii) listing any changes in the
underwriting criteria of the Borrowers approved by their underwriting
committees of the board of directors of Parent since the delivery of the last
certificate described in this paragraph, and (iv) listing the Losses
referred to in Section 8.01(e)(v).


 


(e)                                  Notice of Default or Litigation.  Promptly, and in any event within five
Business Days after an Authorized Officer obtains knowledge thereof, written
notice of (i) the occurrence of any event which constitutes a Default or
Event of Default, (ii) any litigation or governmental proceeding
(including, without limitation, any investigation by or before the Department)
pending (A) against any Borrower or any of its Subsidiaries which could
reasonably be expected to have a materially adverse effect upon the business,
operations, property, assets or condition (financial or otherwise) of such
Borrower or any of its Subsidiaries or (B) with respect to any Credit
Document, (iii) any other event which could reasonably be expected to have
a materially adverse effect upon the business, operations, property, assets or
condition (financial or otherwise) of any Borrower or any of its Subsidiaries,
(iv) upon request any rating report received by any Borrower published by
Moody’s, S&P or, if either Moody’s or S&P no longer rates the claims
paying ability of any Borrower any other nationally recognized rating agency
which, with the consent of such Borrower, rates the creditworthiness of
obligations insured by such Borrower, (v) on a quarterly basis so long as
Cumulative Losses during the Commitment Period is less than $25,000,000 each
Loss, including without limitation, identification of the Insured Obligation
with respect to which such Loss occurred, (vi) each default by the issuer
of any Insured Obligation in the Covered Portfolio or other obligor with
respect thereto which could form the basis of a claim exceeding $25,000,000
under an Insurance Contract and (vii) each default by any party to a
reinsurance


 


34





















 


agreement or
similar arrangement with any Borrower which covers any material amount of
Insured Obligations in the Covered Portfolio.


 


(f)                                    Other Reports and Filings.  Promptly, copies of all financial
information, proxy materials and other information and reports, if any,
(without exhibits) which the Parent and/or Borrower shall file with the United
States Securities and Exchange Commission or any governmental agencies
substituted therefor (the “SEC”).


 


(g)                                 Other Information.  From time to time, such other information or
documents (financial or otherwise) as any Bank may reasonably request.


 


Section 8.02.  Books, Records and Inspections.  Each Borrower will, and will cause each of
their respective Subsidiaries to, keep proper books of record and account in
which full, true and correct entries in conformity with generally accepted
and/or statutory accounting principles, as applicable, and all requirements of
law shall be made of all dealings and transactions in relation to its business
and activities.  Each Borrower will, and
will cause each of their respective Subsidiaries to, permit officers and
designated representatives of the Agent to visit and inspect, under guidance of
their respective officers, any of their respective properties, and to examine
their respective books of record and account and discuss their affairs,
finances and accounts, and be advised as to the same by, their officers, all at
such reasonable times and intervals and to such reasonable extent as any Bank
may request.


 


Section 8.03.  Maintenance of
Property, Insurance.  Each
Borrower will, and will cause each of their respective Subsidiaries to,
(a) keep all property useful and necessary in its business in good working
order and condition, (b) maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks as is consistent and in accordance with industry
practice and (c) furnish to the Agent, upon its reasonable request, full
information as to the insurance carried.


 


Section 8.04.  Corporate Franchises.  Each Borrower will, and will cause each of
their respective Subsidiaries to, do or cause to be done, all things necessary
to preserve and keep in full force and effect its existence and its material
rights, franchises, licenses and patents; provided, however, that nothing in
this Section 8.04 shall prevent the withdrawal, lapse or termination by
any of them of any right, franchise, license or patent or its qualification as
a foreign corporation in any jurisdiction or shall prevent any of them from
taking any other action where such withdrawal, lapse, termination or action
could not reasonably be expected to have a material adverse effect on the
business, operations, property, assets or condition (financial or otherwise) of
the Borrowers and their Subsidiaries taken as a whole.


 


Section 8.05.  Compliance with Statutes, Etc.  Each Borrower will, and will cause each of
their respective Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliance’s as could not reasonably be expected to
have, in the aggregate, a material adverse effect on the business, operations,
property, assets or condition (financial or otherwise) of the Borrowers and
their Subsidiaries taken as a whole.


 


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Section 8.06.  ERISA.  Promptly after an Authorized Officer of any
Borrower has received notice or otherwise has knowledge thereof, it will
deliver to the Agent written notice describing in reasonable detail the
occurrence of any of the following:  that
a Reportable Event has occurred; that an accumulated funding deficiency has
been incurred or an application may be or has been made to the Secretary of the
Treasury for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a Plan;
that a Plan has an Unfunded Current Liability giving rise to a Lien under
ERISA; or that the Borrowers, any of their Subsidiaries or ERISA Affiliates
will or may incur any liability (including any contingent or secondary
liability) to or on account of the termination of or withdrawal from a Plan
under Section 4062, 4063 or 4064 of ERISA. 
Upon written request of the Agent, the Borrowers will deliver to each of
the Banks a complete copy of the annual report (Form 5500) of each Plan
required to be filed with the Internal Revenue Service.


 


Section 8.07.  Performance of Obligations.  Each Borrower will, and will cause each of
their respective Subsidiaries to, perform all its obligations under the terms
of each mortgage, indenture, security agreement and other debt instrument by which
it is bound, except such non performances as could not reasonably be expected
to have in the aggregate a material adverse effect on the business, operations,
property, assets or condition (financial or otherwise) of the Borrowers and
their Subsidiaries taken as a whole.


 


Section 8.08.  Use of Proceeds.  The Borrowers will use the proceeds of the
Loans only to pay or reimburse itself for the payment of Losses (including
establishing and/or maintaining Permitted Reserves in the Pledged Reserves
Account) in respect of the Covered Portfolio.


 


Section 8.09.  Conduct of Business.  Each Borrower will and will cause each of
their respective Subsidiaries to continue to engage in business of the same
general type as conducted by it on the Effective Date.


 


Section 8.10.  Underwriting Criteria.  The Borrowers shall maintain their criteria
for underwriting Insurance Contracts as in effect on the Effective Date with
such changes therein as the Underwriting Committee of the Board of Directors of
the Parent shall from time to time approve. 
All Insured Obligations included within the Covered Portfolio shall
comply with such criteria as in effect at the time insured or committed to be
insured.


 


Section 8.11.  Collection of Pledged
Recoveries and Pledged Premiums. 
Each Borrower shall at all times use its commercially reasonable efforts
to collect and otherwise realize upon all Pledged Recoveries and Pledged
Premiums in compliance with applicable law and in a commercially reasonable
manner.


 


Section 8.12.  Pledged Reserve Release Notice. 
Each Borrower hereby acknowledges and agrees that if, at any time, it
shall cease to maintain all or any portion of Permitted Reserves in respect of
which Pledged Reserves Account Funds have been deposited in the Pledged
Reserves Account, such Borrower as promptly as possible (and in any event
within three Business Days) after it shall cease to maintain such Permitted
Reserves shall give written notice thereof (each such notice, a “Pledged
Reserve Release Notice”) to the Agent and the Collateral


 


36





















 


Agent
which notice shall provide the amount of such Pledged Reserves Account Funds
that have been released.


 


Section 8.13.  Registry.  Each Borrower hereby covenants that it shall
maintain a register substantially in the form of Exhibit H on which it
will record the Commitment and Contingent Commitment from time to time of each
of the Banks, the Loans made by each of the Banks and each repayment in respect
of the principal amount of the Loans of each Bank. Failure to make any such
recordation, or any error in such recordation, shall not affect the Borrowers’
obligations in respect of such Loans. 
Upon the request of a Borrower, the Agent hereby agrees to use its
reasonable efforts to provide to such Borrower such information not otherwise
available to such Borrower, as such Borrower shall reasonably request from time
to time in order to enable it to fulfill its obligations pursuant to this
Section 8.13 and such Borrower shall have no obligation to make any such
recordation until it receives such requested information from the Agent.  Without limiting the Borrowers’ obligations
hereunder, such Borrower shall indemnify any Bank described in
Section 4.04(b)(iii) for losses related to the withholding of taxes,
including any interest and penalties thereon arising as a result of such
Borrower’s failure to comply with this Section 8.13.


 


ARTICLE IX


 


NEGATIVE COVENANTS


 


Each Borrower covenants
and agrees that on and after the Effective Date and until the Commitments and
the Contingent Commitments have terminated and the Loans and the Notes,
together with interest, Fees and all other obligations incurred hereunder and
thereunder, are paid in full:


 


Section 9.01.  Liens.  Each Borrower will not, and will not permit
any of their respective Subsidiaries to, create, incur, assume or suffer to
exist any Lien upon or with respect to any Pledged Recoveries, Pledged
Premiums, Pledged Reserves Account Funds or other Collateral, provided that the
provisions of this Section 9.01 shall not prevent the creation,
incurrence, assumption or existence of the following (Liens described below are
herein referred to as “Permitted Liens”):


 


(a)                                  the
Lien in favor of the Banks under the Security Agreement or otherwise permitted
thereunder;


 


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


 


(c)                                  Liens
in respect of property or assets of any Borrower or any of their respective
Subsidiaries imposed by law, which were incurred in the ordinary course of
business and do not secure Indebtedness for borrowed money, such as carriers’,
warehousemen’s, materialmen’s and mechanics’ liens and other similar Liens
arising in the ordinary course of business, which relate to Indebtedness which
has not been paid


 


37





















 


when due and
payable in accordance with its terms and which are being contested in good
faith by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to any such
Lien;


 


(d)                                 Liens
securing liquidity support credit facilities entered into by FSA or any of its
Subsidiaries from time to time in order solely to provide liquidity support for
a specified transaction or transactions in which obligations are insured by FSA
under an Insurance Contract, provided that such Liens in respect of each such
transaction are limited to the interests of FSA in the collateral provided to
FSA in connection with such transaction;


 


(e)                                  Liens
in respect of statutory preference or priorities granted to certain claims
under applicable insurance law;


 


(f)                                    Liens
established in favor of the beneficiaries of reinsurance agreements other than
Wholly Owned Subsidiaries of the Parent to the extent such Liens are
established in the ordinary course of business or are otherwise within the
parameters of industry practice; and


 


(g)                                 Liens
represented by a financing statement to the extent such financing statement
does not represent notice of a valid security interest and the Borrowers use
their best efforts to file or cause to be filed a termination statement in
respect thereof.


 


Section 9.02.  Consolidation, Merger, Sale of
Assets, etc.  FSA and so long
as it is a Borrower, FSAIC, will not, and will not permit any of their
respective Subsidiaries to, wind up, liquidate or dissolve its affairs or enter
into any transaction of merger or consolidation, or convey, sell, lease or
otherwise dispose of (or agree to do any of the foregoing at any future time)
all or any substantial part of its property or assets (other than assets in its
investment portfolio), or purchase or otherwise acquire (in one or a series of
related transactions) all or substantially all of the property or assets (other
than assets in its investment portfolio) (other than purchases or other
acquisitions of inventory, materials and equipment in the ordinary course of
business) of any Person, or permit any of such Subsidiaries so to do any of the
foregoing, except that:


 


(a)                                  each
Borrower and its Subsidiaries may in the ordinary course of business sell or
lease assets including the sale of any Subsidiary the sale of which will not
have a material adverse effect on the business, operations, property, assets or
condition of the Borrowers and the Subsidiaries taken as a whole;


 


(b)                                 any
Subsidiary may wind up its affairs or liquidate or dissolve into, and may
consolidate or merge with or into, the related Borrower or any other Subsidiary
of such Borrower;


 


(c)                                  the
assets or stock of any Subsidiary of a Borrower may be purchased or otherwise acquired
by such Borrower or any other Subsidiary of such Borrower;


 


(d)                                 any
Borrower or any of their respective Subsidiaries may purchase or otherwise
acquire all or substantially all of the properties or assets of any Person or
acquire such Person by merger so long as (i) no Default or Event of
Default has occurred


 


38





















 


and is continuing
or would occur after giving effect thereto, (ii) the consolidated net
worth (determined in accordance with U.S. generally accepted accounting
principles) of the effected Borrower and its Subsidiaries taken as a whole
immediately after giving effect to such purchase, acquisition or merger is at
least equal to 95% of its consolidated net worth immediately prior to such
purchase, acquisition or merger and (iii) such purchase, acquisition or
merger shall not result in any downgrading of the Borrower’s Rating assigned to
such Borrower by Moody’s or S&P from that in effect immediately prior to
such purchase, acquisition or merger and (iv) FSA shall deliver to the
Agent a certificate of the Chief Financial Officer of FSA stating that such
purchase, merger or acquisition complied with the conditions contained in this
paragraph (d);


 


(e)                                  any
Borrower and any of its Subsidiaries may convey, sell or otherwise dispose of
any of their respective properties or assets so long as, immediately prior to
the time of such disposition, the value of such properties or assets being
disposed of does not exceed 10% of the aggregate value of the assets of the
Borrowers and their Subsidiaries taken as a whole as such assets are carried on
the consolidated balance sheet of the Borrowers and their Subsidiaries at such
time;


 


(f)                                    any
Borrower or any of its Subsidiaries may merge into another entity so long as (i) such
merger is solely for the purpose of changing domicile, (ii) the surviving
corporation assumes all obligations of such Borrower or Subsidiary under the
Credit Documents and (iii) no Default or Event of Default has occurred and
is continuing or would occur after giving effect thereto;


 


(g)                                 any
Subsidiary of a Borrower may take any action not otherwise permitted hereunder
so long as no Default or Event of Default has occurred and is continuing to the
extent such action is not in any manner adverse to the security interest
created pursuant to the Security Agreement or otherwise materially adverse to
the Borrowers and their Subsidiaries taken as a whole or the Banks; and


 


(h)                                 intercompany
transfers shall be permitted in accordance with applicable insurance law.


 


ARTICLE X


 


EVENTS OF DEFAULT


 


Upon the occurrence of
any of the following specified events (each an “Event of Default”):


 


Section 10.01.  Payments.  The Borrowers shall (a) default in the
payment when due of any principal of any Loan or any Note or (b) default,
and such default shall continue unremedied for two or more Business Days, in
the payment when due of any interest on any Loan or any Note or default, and
such default shall continue unremedied for three or more Business Days after
notice from the Agent, in the payment of any Fees or any other amounts owing
hereunder or under any Note; or


 


39





















 


Section 10.02.  Representations, etc.  Any representation,
warranty or statement made by or on behalf of the Borrowers or any of them
herein or in any other Credit Document or in any certificate delivered pursuant
hereto or thereto shall prove to be untrue in any material respect on the date
as of which made or deemed made; or


 


Section 10.03.  Covenants.  Any Borrower shall (a) default in the
due performance or observance by it of any term, covenant or agreement
contained in Section 8.08, 8.09, 8.10, 8.11, 8.12 or Article IX, or
(b) default in the due performance or observance by it of any term,
covenant or agreement (other than those referred to in Sections 10.01 and
10.02 and clause (a) of this Section 10.03) contained in this
Agreement and such default shall continue unremedied for a period of
30 days after written notice to any Borrower by the Agent or any Bank; or


 


Section 10.04.  Default Under Other Agreements.  Any Borrower or any of their respective
Subsidiaries shall (a) default in the payment of any indebtedness owed to
any Bank giving rise to an event of default under the documentation evidencing
such indebtedness, (b) default in any payment of any Indebtedness (other
than the Notes) for borrowed money in excess of $15,000,000 beyond the period
of grace, if any, provided in the instrument or agreement under which such
Indebtedness was created or (c) default in the observance or performance
of any agreement or condition relating to any such Indebtedness for borrowed
money beyond the grace period as provided therein (other than the Notes) or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of any
such default or other event or condition is to cause, or to permit the holder
or holders of such Indebtedness (or a trustee or agent on behalf of such holder
or holders) to cause any such Indebtedness to become due prior to its stated
maturity; or any Indebtedness for borrowed money of any Borrower or any of
their respective Subsidiaries shall be declared to be due and payable, or
required to be prepaid other than by a regularly scheduled required or optional
prepayment, prior to the stated maturity thereof; or


 


Section 10.05.  Bankruptcy, Etc.  Any Borrower or any of their respective
Subsidiaries shall commence a voluntary case concerning itself under
Title 11 of the United States Code entitled “Bankruptcy,” as now or
hereafter in effect, or any successor thereto (the “Bankruptcy Code”); or an
involuntary case is commenced against any Borrower or any of their respective
Subsidiaries, and the petition is not controverted within 10 days, or is
not dismissed within 60 days, after commencement of the case; or a custodian
(as defined in the Bankruptcy Code) is appointed for, or takes charge of, all
or substantially all of the property of any Borrower or any of their respective
Subsidiaries, or any Borrower or any of their respective Subsidiaries commences
any other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to any Borrower or any
of their respective Subsidiaries, or there is commenced against any Borrower or
any of their respective Subsidiaries any such proceeding which remains
undismissed or unstayed for a period of 60 days, any Borrower or any of
their respective Subsidiaries is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is
entered; or any Borrower or any of their respective Subsidiaries suffers any appointment
of any custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or any Borrower
or any of their respective Subsidiaries makes a general assignment for the
benefit


 


40





















 


of
creditors; or any corporate action is taken by any Borrower or any of their
respective Subsidiaries for the purpose of effecting any of the foregoing; or


 


Section 10.06.  ERISA.  Any Plan shall fail to maintain the minimum
funding standard required for any plan year or part thereof or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code; any Plan shall have an Unfunded Current
Liability; any Borrower or any of their respective Subsidiaries or ERISA
Affiliates has incurred or is likely to incur a liability to or on account of a
Plan under Section 4062, 4063, 4064 or 4069 of ERISA, or any Borrower or
any of their respective Subsidiaries has incurred or is likely to incur
liabilities pursuant to one or more employee welfare benefit plans (as defined
in Section 3(1) of ERISA) which provide benefits to retired employees
(other than as required by Section 601 of ERISA); there shall result from
any such event or events the imposition of a Lien upon the assets of any
Borrower or any of their respective Subsidiaries, the granting of a security
interest, or a liability or a material risk of incurring a liability, which
Lien, security interest or liability, in the opinion of the Banks, will have a
material adverse effect upon the business, operations, property, assets or
condition (financial or otherwise) of the Borrowers and their Subsidiaries
taken as a whole; or


 


Section 10.07.  Security Agreement.


 


(a)                                  The
Security Agreement or any provision thereof shall cease to be in full force and
effect, or shall cease in any material respect to give the Collateral Agent for
the benefit of the Banks, the Liens, rights, powers and privileges purported to
be created thereby; or


 


(b)                                 Any
Borrower shall otherwise default in any material respect in the due performance
or observance of any term, covenant or agreement on its part to be performed or
observed pursuant to the Security Agreement and such default in the event of a
default of payment obligations under Sections 2.02(a) and (b) of
the Pledge and Security Agreement shall continue unremedied for a period of
three Business Days after written notice thereof to any Borrower by the Agent
or any Bank, and in the event of any other default shall continue unremedied
for a period of 30 days after written notice thereof to any Borrower by
the Agent or any Bank; or


 


Section 10.08.  Judgments.  One or more judgments or decrees shall be
entered against the Borrowers or any of its Subsidiaries involving in the
aggregate for any Borrower and its Subsidiaries a liability (not paid or fully
covered by insurance) of $15,000,000 or more at any one time, and all such
judgments or decrees shall not have been vacated, discharged or stayed or bonded
pending appeal within 60 days after the entry thereof; or


 


Section 10.09.  Change of Control.  A Change of Control shall occur; then, and in
any such event, and at any time thereafter, if any Event of Default shall then
be continuing, the Agent may or shall upon direction from the Majority Banks,
by written notice to the Borrowers, take the following actions to the extent
permitted below (provided, that, if an Event of Default specified in
Section 10.05 shall occur with respect to any Borrower, the result which
would occur upon the giving of written notice to any Borrower as specified
below shall occur automatically without the giving of any such notice):  if any Event of Default has occurred and is


 


41





















 


continuing,
the Agent may, in addition to any and all other remedies available at law or in
equity, declare the principal of and any accrued interest in respect of all
Loans and the Notes and all obligations owing hereunder and thereunder to be,
whereupon the same shall become, forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrowers.  The Banks hereby further
waive any Event of Default as specified in this Section 10.09 by reason of
the acquisition of Financial Security Assurance Holdings Ltd. by Dexia S.A.


 


ARTICLE XI


 


THE AGENT


 


Section 11.01.  Appointment.  The Banks hereby designate Bayerische
Landesbank, acting through its New York Branch, as Agent (for purposes of
this Article XI, the term “Agent” shall also include Bayerische
Landesbank, acting through its New York Branch in its capacity as
Collateral Agent pursuant to the Security Documents) to act as specified herein
and in the other Credit Documents.  Each
Bank hereby irrevocably authorizes, and each holder of any Note by the
acceptance of such Note shall be deemed irrevocably to authorize, the Agent to
take such action on its behalf under the provisions of this Agreement, the
other Credit Documents and any other instruments and agreements referred to
herein or therein and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of the
Agent by the terms hereof and thereof and such other powers as are reasonably
incidental thereto.  The Agent may
perform any of its duties hereunder by or through its officers, directors,
agents or employees.


 


Section 11.02.  Nature of Duties.  The Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement and the
Security Agreement.  Neither the Agent
nor any of its officers, directors, agents or employees shall be liable for any
action taken or omitted by it or them hereunder or under any other Credit
Document or in connection herewith or therewith, unless caused by its or their
gross negligence or willful misconduct. 
The duties of the Agent shall be mechanical and administrative in
nature; the Agent shall not have by reason of this Agreement or any other
Credit Document a fiduciary relationship in respect of any Bank or the holder
of any Note; and nothing in this Agreement or any other Credit Document,
expressed or implied, is intended to or shall be so construed as to impose upon
the Agent any obligations in respect of this Agreement or any other Credit
Document except as expressly set forth herein or therein.


 


Section 11.03.  Lack of Reliance on the Agent.  Independently and without reliance upon the
Agent, each Bank and the holder of each Note, to the extent it deems
appropriate, has made and shall continue to make (a) its own independent
investigation of the financial condition and affairs of the Borrowers in
connection with the making and the continuance of the Loans and the taking or
not taking of any action in connection herewith and (b) its own appraisal
of the creditworthiness of the Borrowers and, except as expressly provided in
this Agreement, the Agent shall not have any duty or responsibility, either
initially or on a continuing basis, to provide any Bank with any credit or
other information with respect thereto, whether coming into its possession
before the making of the Loans or at any time or times thereafter.  The Agent shall not be responsible to any
Bank or the holder of any Note for any recitals, statements,


 


 


42





















 


 


information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectability, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of the Borrowers or be required to make any inquiry concerning either
the performance or observance of any of the terms, provisions or conditions of
this Agreement or any other Credit Document, or the financial condition of the
Borrowers or the existence or possible existence of any Default or Event of
Default.


 


Section 11.04.  Certain Rights of the Agent.
 If the Agent shall request instructions
from the Banks with respect to any act or action (including failure to act) in
connection with this Agreement or any other Credit Document, the Agent shall be
entitled to refrain from such act or taking such action unless and until the
Agent shall have received instructions from the Majority Banks; and the Agent
shall not incur liability to any Person by reason of so refraining.  Without limiting the foregoing, no Bank or
the holder of any Note shall have any right of action whatsoever against the
Agent as a result of the Agent acting or refraining from acting hereunder or
under any other Credit Document in accordance with the instructions of the
Majority Banks.


 


Section 11.05.  Reliance.  The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or facsimile message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that the Agent believed to be the proper Person, and,
with respect to all legal matters pertaining to this Agreement and any other
Credit Document and its duties hereunder and thereunder, upon advice of counsel
selected by the Agent.


 


Section 11.06.  Indemnification.  To the extent the Agent is not reimbursed and
indemnified by the Borrowers, each Bank will reimburse and indemnify the Agent
for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, costs, expenses or disbursements of
whatsoever kind or nature which may be imposed on, asserted against or incurred
by the Agent in performing its duties hereunder or under any other Credit
Document, in any way relating to or arising out of this Agreement or any other
Credit Document; provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Agent’s gross
negligence or willful misconduct.


 


Section 11.07.  The Agent in Its Individual Capacity.  With respect to its obligation to make Loans
under this Agreement, the Agent shall have the rights and powers specified
herein for a “Bank” and may exercise the same rights and powers as though it
was not performing the duties specified herein; and the term “Banks,” “holders
of Notes” or any similar terms shall, unless the context clearly otherwise
indicates, include the Agent in its individual capacity.  The Agent may accept deposits from, lend
money to, and generally engage in any kind of banking, trust or other business
with any Borrower or any Affiliate of any Borrower as if they were not
performing the duties specified herein, and may accept fees and other
consideration from any Borrower for services in connection with this Agreement
and otherwise without having to account for the same to the Banks.


 


43





















 


Section 11.08.  Resignation by the Agent.


 


(a)           The Agent may resign from the
performance of all its functions and duties hereunder and/or under the other
Credit Documents at any time by giving 15 Business Days’ prior written
notice to the Borrowers and the Banks. 
In the case of the resignation by the Agent, such resignation shall take
effect upon the appointment of a successor Agent pursuant to clause (b) or
(c) below or as otherwise provided below.


 


(b)           Upon any such notice of resignation
by the Agent, the Banks shall appoint a successor Agent hereunder or thereunder
who shall be a commercial bank or trust company reasonably acceptable to the
Borrowers (it being understood and agreed that any Bank is deemed to be
acceptable to the Borrowers).


 


(c)           If a successor Agent shall not have
been so appointed within such 15 Business Day period, the Agent, with the
consent of the Borrowers, shall then appoint a successor Agent who shall serve
as Agent hereunder or thereunder until such time, if any, as the Banks appoint
a successor Agent as provided above.


 


(d)           If no successor Agent has been
appointed pursuant to clause (b) or (c) above by the 20th Business
Day after the date such notice of resignation was given by the Agent, the Agent
may appoint any other Bank which agrees to such appointment to act as successor
Agent and if no Bank so agrees by the 30th Business Day after
the date such notice was given by the Agent, the Agent’s resignation shall
become effective on such 30th Business Day and the Banks shall
thereafter perform all the duties of the Agent hereunder and/or under any other
Credit Document until such time, if any, as the Banks appoint a successor Agent
as provided above.


 


ARTICLE XII


 


MISCELLANEOUS


 


Section 12.01.  Payment of Expenses. Etc.  The Borrowers,
jointly and severally, agree to:  (a) whether
or not the transactions herein contemplated are consummated, pay all reasonable
out of pocket costs and expenses (i) of the Agent (including, without
limitation, the reasonable fees and disbursements of Kutak Rock LLP,
counsel for the Agent) in connection with the preparation, execution and
delivery of this Agreement and the other Credit Documents and the documents and
instruments referred to herein and therein and any amendment, waiver or consent
relating hereto or thereto and (ii) of the Agent and the Banks in
connection with the enforcement of this Agreement and the other Credit
Documents and the documents and instruments referred to herein and therein
(including, without limitation, the reasonable fees and disbursements of
counsel for the Agent and the Banks); (b) pay and hold each Bank harmless
from and against any and all present and future stamp and other similar taxes
with respect to the foregoing matters and save such Bank harmless from and
against any and all liabilities with respect to or resulting from any delay or
omission (other than to the extent attributable to such Bank) to pay such
taxes; and (c) except as otherwise provided in Section 4.05,
indemnify each Bank, its officers, directors, employees, representatives and
agents from and hold each of them harmless against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, suits, and


 


44





















 


reasonable costs,
expenses and disbursements incurred by any of them as a result of, or arising
out of, or in any way related to, or by reason of, any investigation,
litigation or other proceeding (whether or not such Bank is a party thereto)
related to the entering into and/or performance of this Agreement or any other
Credit Document or the use of the proceeds of any Loans hereunder or the
consummation of any transactions contemplated herein or in any other Credit
Document, including, without limitation, the reasonable fees and disbursements
of counsel incurred in connection with any such investigation, litigation or
other proceeding (but excluding any such liabilities, obligations, losses,
etc., to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified).


 


Section 12.02.  Right of Setoff.  Except as otherwise provided in Section 4.05,
in addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights and to the extent
permitted by applicable law, upon the occurrence of an Event of Default, each
Bank is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to the Borrowers or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and apply any and all deposits (general or special), and any
other Indebtedness at any time held or owing by such Bank (including without
limitation by branches and agencies of such Bank wherever located) to or for
the credit or the account of any Borrower against and on account of the
Obligations and liabilities of the Borrowers to such Bank under this Agreement
or under any of the other Credit Documents, and all other claims of any nature
or description arising out of or connected with this Agreement or any other
Credit Document, irrespective of whether or not the Bank shall have made any
demand hereunder and although said Obligations, liabilities or claims, or any
of them, shall be contingent or unmatured, provided however that (a) except
to the extent provided in the next succeeding clause (b), no Bank is
authorized hereunder to take any of the foregoing actions, nor shall any Bank
exercise any other right of setoff or bankers’ lien or any other right now or
hereafter granted under applicable law with respect to the Pledged Reserves
Account or any portion of the Pledged Reserves Account Funds or any Collateral
contained in the Pledged Reserves Account (each of the Agent, the Collateral
Agent and each Bank hereby waiving, to the extent permitted by applicable law,
any such right) and (c) from and after receipt by the Agent or the
Collateral Agent of any Pledged Reserve Release Notice, the Agent, the
Collateral Agent or any Bank is authorized to and may exercise, to the extent
permitted by applicable law, any of such foregoing actions or such rights only
with respect to the amount of Pledged Reserves Account Funds described in such
Pledged Reserve Release Notice and the other Collateral contained in the
Pledged Reserves Account in an amount equal to the interest and other earnings
on such Pledged Reserves Account Funds.


 


Section 12.03.  Notices.  Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telegraphic, telex, facsimile or cable
communication) and mailed, telegraphed, telexed, faxed, cabled or
delivered:  if to any Borrower or Bank,
at its address listed opposite its name on the signature page hereto; and
if to the Agent at its Notice Office; or, as to any Bank or the Agent, at such
other address as shall be designated by such party in a written notice to the
other parties hereto and, as to each other party, at such other address as
shall be designated by such party in a written notice to the Borrowers and the
Agent.  All such notices and
communications shall not be effective until received by the Agent or the
Borrowers.


 


45





















 


Section 12.04.  Benefit of Agreement.


 


(a)           This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, that no Borrower may assign
or transfer any of its rights or obligations hereunder without the prior
written consent of the Banks and, provided further, that, any Bank may assign
its rights and obligations hereunder or under the other Credit Documents as
provided in this Section 12.04.  Any
Bank may participate portions of its obligations hereunder and of the
obligations of the Borrowers hereunder and under the Credit Documents to other
financial institutions.  Notwithstanding
such participation, such Bank shall not be relieved of its obligations
hereunder.


 


(b)           Any Bank (or any Bank together with
one or more other Banks) may assign all or a portion of its Commitment (or, if
such Bank is a Part C Bank, all or any part of its Contingent Commitment)
and related outstanding rights and Obligations hereunder to one or more
Eligible Transferees, each of which assignees shall become a party to this
Agreement as a Bank and, if applicable, a Part C Bank by execution of an
Assignment and Assumption Agreement and delivery of such Assignment and
Assumption Agreement to the Borrowers and the Agent, provided that (i) new
Notes will be issued to such new Bank in the stated amount of its assumed
Commitment (plus, if such Bank is to be a Part C Bank, such Bank’s
Contingent Commitment) and to the assigning Bank in the stated amount of the
Commitment (plus, if such Bank is to be a Part C Bank, such Bank’s
Contingent Commitment) if any, retained by it upon the request of such new Bank
or assigning Bank and the surrender of the Note previously issued to the
assigning Bank (or the execution and delivery to the Borrowers of an indemnity
satisfactory to the Borrowers), such new Notes to be in conformity with the
requirements of Section 2.05 to the extent needed to reflect the revised
Commitments and, if applicable, Contingent Commitments; (ii) such
assignment shall not result in a downgrading of the Borrower’s Rating assigned
to the Borrowers by Moody’s or S&P from that in effect immediately prior to
such assignment; (iii) the assigning Bank shall provide notice of any such
assignment to the Agent and the Borrowers and the Borrowers shall provide
notice of same to Moody’s and S&P; (iv) the new Bank shall deliver a
legal opinion addressed to each of the Borrowers, Moody’s and S&P dated the
effective date of the applicable assignment to the effect that this Agreement
constitutes its legal, valid and binding obligation enforceable in accordance
with its terms, except to the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws generally affecting creditor’s rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law) as
the same may be applied in the event of bankruptcy or similar proceedings with
respect to such new Bank and as otherwise required by Moody’s and S&P; and (v) the
Borrowers shall record the Commitment or Contingent Commitment, as applicable,
of the assignee in the register maintained pursuant to Section 8.13.  To the extent of any assignment pursuant to
this Section 12.04(b), the assigning Bank shall be relieved of its
obligations hereunder with respect to its assigned Commitment or Contingent
Commitment, as applicable.  At the time
of each assignment pursuant to this Section 12.04(b) to a Person
which is not already a Bank hereunder and which is not a United States person
(as such term is defined in Section 7701(a)(30) of the Code) for


 


46





















 


Federal income tax
purposes, the respective assignee Bank shall, to the extent legally entitled to
do so, provide to the Borrowers in the case of a Bank described in clause (ii) or
(iv) of Section 4.04(b), the forms described in such clause (ii) or
(iv), as the case may be.  To the extent
that an assignment of all or any portion of a Bank’s Commitment or Contingent
Commitment, as applicable, and related outstanding Obligations pursuant to this
Section 12.04(b) would at the time of such assignment, result in
increased costs under Sections 2.07 or 4.04 from those being charged by
the respective assigning Bank prior to such assignment, then the Borrowers
shall not be obligated to pay such increased costs (although the Borrowers
shall be obligated to pay any other increased costs of the type described above
resulting from changes in applicable law, or government rules, regulations,
orders or requests after the date of the respective assignment).


 


(c)           Upon the execution and delivery of an
Assignment and Assumption Agreement in accordance with, and subject to the
restrictions of subsection (b) above, the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder and
under the other Credit Documents have been assigned to it pursuant to such
Assignment and Assumption Agreement, have the rights and obligations of a “Bank”
hereunder and thereunder.


 


(d)           Any Bank claiming any amounts payable
pursuant to Section 4.04 shall use reasonable efforts (consistent with
legal and regulatory restrictions and subject to overall policy considerations
of such Bank) to designate another lending office for its Commitment (and, if
such Bank is a Part C Bank, Contingent Commitment) or Loans or take such
other action to minimize such amounts, as may be reasonably requested by the
Borrowers, provided that such designation is made or such other action is taken
on such terms that such Bank and its lending office suffer no economic, legal
or regulatory disadvantage.


 


(e)           Nothing in this Agreement shall
prevent or prohibit any Bank from pledging its Loans and Notes hereunder to a
Federal Reserve Bank in support of borrowings made by such Bank from such
Federal Reserve Bank.


 


(f)            Each Bank shall promptly notify the
Borrowers of any change in the location of its applicable lending office.  In the event any Bank changes its applicable
lending office, such change shall be treated as an assignment to a new Bank for
purposes of Section 4.04(b) and so much of Section 12.04(b) as
relates to Section 4.04.


 


Section 12.05.  No Waiver; Remedies Cumulative.  No failure or delay on the part of any
Bank or the holder of any Note in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
any Borrower and any Bank or the holder of any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder.  Except as
otherwise expressly provided herein or in any other Credit Document, the
rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which any Bank would otherwise have.  No
notice to or demand on the Borrowers in any case shall entitle any Borrower to
any


 


47





















 


other or further notice
or demand in similar or other circumstances or constitute a waiver of the
rights of any Bank or the holder of any Note to any other or further action in
any circumstances without notice or demand.


 


Section 12.06.  Calculations; Computations.


 


(a)           The financial statements to be
furnished to the Banks pursuant to Section 8.01(a) and (b) shall
be made and prepared in accordance with generally accepted accounting
principles in the United States and the financial statements to be furnished to
the Banks pursuant to Section 8.01(c) shall be made and prepared in
accordance with statutory accounting principles, in each case consistently
applied throughout the periods involved (except as set forth in the notes
thereto or as otherwise disclosed in writing by the Borrowers to the Banks).


 


(b)           All computations of interest and Fees
hereunder shall be made on the basis of a year of 360 days for the actual
number of days (including the first day but excluding the last day) occurring
in the period for which such interest or Fees are payable.


 


Section 12.07.  Governing Law; Submission to Jurisdiction;
Venue.


 


(a)           This Agreement and the other Credit
Documents and the rights and obligations of the parties hereunder and
thereunder shall be construed in accordance with and be governed by the law of
the State of New York.  Any legal
action or proceeding against any Borrower with respect to this Agreement or any
other Credit Document may be brought in the courts of the State of
New York or of the United States for the Southern District of
New York, and, by execution and delivery of this Agreement, any Borrower
hereby irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts.  The Borrowers irrevocably consent to the
service of process out of any of the aforementioned courts in any such action
or proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the Borrowers at their addresses set forth opposite its
signature below, such service to become effective 30 days after such
mailing.  Except as otherwise provided in
Section 4.05, nothing herein shall affect the right of the Agent or any
Bank under this Agreement to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against any Borrower in
any other jurisdiction.


 


(b)           Each Borrower hereby irrevocably
waives any objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in connection
with this Agreement or any other Credit Document brought in the courts referred
to in clause (a) above and hereby further irrevocably waives and
agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.


 


Section 12.08.  Obligation to Make Payments in Dollars.  Subject to the provisions of Section 4.05,
the obligation of the Borrowers to make payment in Dollars of the principal of
and interest on the Notes and any other amounts due hereunder or under any
other Credit Document


 


48





















 


to the Payment Office of
the Agent as provided in Section 4.03 shall not be discharged or satisfied
by any tender, or any recovery pursuant to any judgment, which is expressed in
or converted into any currency other than Dollars, except to the extent such
tender or recovery shall result in the actual receipt by the Agent at its Payment
Office of the full amount of Dollars expressed to be payable in respect of the
principal of and interest on the Notes and all other amounts due hereunder or
under any other Credit Document.  Subject
to the provisions of Section 4.05, the obligation of the Borrowers to make
payments in Dollars as aforesaid shall be enforceable as an alternative or
additional cause of action for the purpose of recovery in Dollars of the
amount, if any, by which such actual receipt shall fall short of the full
amount of Dollars expressed to be payable in respect of the principal of and
interest on the Notes and any other amounts due under any other Credit
Document, and shall not be affected by judgment being obtained for any other
sums due under this Agreement or under any other Credit Document.


 


Section 12.09.  Counterparts.  This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.  A set of counterparts
executed by all the parties hereto shall be lodged with the Borrowers and the
Agent.


 


Section 12.10.  Effectiveness.  This Agreement shall become effective on
the date (the “Effective Date”) on which the Borrowers and the Banks shall have
signed a copy hereof (whether the same or different copies) and shall have
delivered the same to the Agent at its Notice Office and the conditions set
forth in Article V shall have been satisfied or waived by the Banks, as
evidenced by a written notice by the Agent to the Borrowers confirming that the
Agreement has become effective and setting forth the Effective Date.


 


Section 12.11.  Headings Descriptive.  The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.


 


Section 12.12.  Amendment or Waiver.  Neither this Agreement nor any other Credit
Document nor any terms hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination is in writing
signed by the Majority Banks and the Agent; provided, however, that no such
change, waiver, discharge or termination shall, without the consent of each
Bank (other than any Bank that is at the time of the proposed extension,
release, amendment, reduction or consent a Defaulting Bank, provided, that in
the case of clauses (a) and (b) below for which the consent of
Defaulting Banks which shall have one or more Loans outstanding which are not
Defaulted Loans as well as all other Banks shall be required) (a) extend
the final maturity of any Loan or Note other than in accordance with Section 3.04
or 3.05 or reduce the rate or extend the time of payment of interest or Fees
thereon, or reduce the principal amount thereof, or increase the Commitment or
Contingent Commitment of any Bank over the amount thereof then in effect (it
being understood that a waiver of any Default or Event of Default shall not
constitute a change in the terms of any Commitment or Contingent Commitment of
any Bank), (b) release any material portion of the Collateral under any
Security Document except as shall be otherwise provided in any Credit Document,
(c) amend, modify or waive any provision of this Section 12.12, (d) reduce
the percentage specified in the definition of Majority Banks, (e) consent
to the assignment or transfer by the


 


49





















 


Borrowers of any of its
rights and obligations under any Credit Document or (f) amend the
definition of Loss Threshold Incurrence Date or the Loss Threshold Amount other
than to increase the dollar amount or the percentage specified therein.


 


Section 12.13.  Survival.  All indemnities set forth herein including,
without limitation, in Sections 2.07, 4.04 and 12.01 shall survive the
execution and delivery of this Agreement and the Notes and the making and
repayment of the Loans.


 


Section 12.14.  Exclusions from Covered Portfolio.  Insured Obligations described below in this Section shall
be excluded from the Covered Portfolio.


 


(a)           Any Insured Obligations which any
Bank (or any Participant to whom such Bank has transferred, granted or assigned
any participation in its rights and obligations hereunder and under the other
Credit Documents) is, or upon the occurrence of any contingency would be,
obligated to purchase under the terms of a line of credit, standby bond
purchase agreement, letter of credit, liquidity agreement or similar agreement
or arrangement and which is identified in a written notice specifying this Section 12.14(a) from
the Agent to the Borrowers prior to the Effective Date or promptly following
the date such Bank incurs such Obligation, such Insured Obligation shall,
effective upon delivery of such notice by the Agent to the Borrowers, be
excluded from the Covered Portfolio;


 


(b)           Insured Obligations excluded from the
Covered Portfolio by the Borrowers and identified in a written notice from the
Borrowers to the Agent specifying this Section 12.14; and


 


(c)           Insured Obligations issued after both
(i) the occurrence of the Loss Threshold Incurrence Date and (ii) receipt
by the Borrowers of written notice from the Agent identifying such Insured
Obligations.


 


Section 12.15.  Confidentiality.  The Agent and each Bank agrees to keep any
information delivered or made available by or on behalf of the Borrowers
pursuant to this Agreement confidential from anyone other than its employees,
directors, legal counsel, independent auditors, regulators and other advisors
with a need to know such information in connection with the Loans contemplated
hereby, provided that nothing
herein shall prevent the Agent or any Bank from disclosing such information (a) to
any other Bank or the Agent in connection with the Loans contemplated hereby; (b) in
response to a subpoena or other order of a court or administrative agency, provided that the Agent or Bank, as
applicable, shall promptly notify the Borrowers of such subpoena or other order
and shall at the Borrowers’ direction and expense contest such subpoena or
other order; (c) to the extent necessary in connection with the exercise
of any remedy hereunder; (d) if such information is or becomes generally
available to the public other than as a result of a disclosure by the Agent or
a Bank prohibited by this Agreement; or (e) if such information is or
becomes available to the Agent or Bank, as applicable, from a source other than
the Borrowers that is not bound by an obligation of confidentiality to the
Borrowers.


 


50





















 


IN WITNESS WHEREOF, the parties hereto hereby execute
this Agreement as of the date and year first above written.


 


	
   

  	
   

  	
  BORROWERS:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
  FINANCIAL SECURITY ASSURANCE
  INC.

  
	
   

  	
   

  	
   

  	
   

  
	
  350 Park Avenue

  	
   

  	
   

  
	
  New York, NY 10022

  	
  By

  	
  /s/ Dennis H. Kim

  
	
  Attention:

  	
  Chief Financial Officer

  	
  Name

  	
  Dennis H. Kim

  
	
   

  	
  with a copy to General
  Counsel

  	
  Title

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
  FSA INSURANCE COMPANY

  
	
   

  	
   

  	
   

  	
   

  
	
  350 Park Avenue

  	
   

  	
   

  
	
  New York, NY 10022

  	
  By

  	
  /s/ Dennis H. Kim

  
	
  Attention:

  	
  Chief Financial Officer

  	
  Name

  	
  Dennis H. Kim

  
	
   

  	
  with a copy to General
  Counsel

  	
  Title

  	
  Treasurer

  
					



 


[Signatures continued on
following page]


 


51





















 


[Signature page to Credit Agreement]


 


	
   

  	
   

  	
  AGENT:

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  BAYERISCHE LANDESBANK, Acting

  
	
   

  	
   

  	
  Through Its New York Branch

  
	
  Bayerische Landesbank

  	
   

  	
   

  
	
  New York Branch

  	
   

  	
   

  
	
  560 Lexington Avenue

  	
  By

  	
  /s/ Patricia M. Healy

  
	
  New York, NY 10022

  	
  Name

  	
  Patricia M. Healy

  
	
  Attention:

  	
  Mr. Joseph C. Campagna

  	
  Title

  	
  Vice President

  
	
   

  	
  First Vice President and

  	
   

  	
   

  
	
   

  	
  Manager Public Finance

  	
   

  	
   

  
	
  Telephone:

  	
  (212) 310-9943

  	
  By

  	
  /s/ Norman McClave

  
	
  Facsimile:

  	
  (212) 230-9114

  	
  Name

  	
  Norman McClave

  
	
   

  	
   

  	
  Title

  	
  First Vice President

  
					



 


[Signatures continued on
following page]


 


52





















 


[Signature page to Credit Agreement]


 


	
   

  	
   

  	
  BANKS:

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  BAYERISCHE LANDESBANK, Acting

  
	
   

  	
   

  	
  Through Its New York Branch

  
	
  Bayerische Landesbank

  	
   

  	
   

  
	
  New York Branch

  	
   

  	
   

  
	
  560 Lexington Avenue

  	
  By

  	
  /s/Patricia M. Healy

  
	
  New York, NY 10022

  	
  Name

  	
  Patricia M. Healy

  
	
  Attention:

  	
  Mr. Joseph C. Campagna

  	
  Title

  	
  Vice President

  
	
   

  	
  First Vice President and

  	
   

  	
   

  
	
   

  	
  Manager Public Finance

  	
   

  	
   

  
	
  Telephone:

  	
  (212) 310-9943

  	
  By

  	
  /s/ Norman McClave

  
	
  Facsimile:

  	
  (212) 230-9114

  	
  Name

  	
  Norman McClave

  
	
   

  	
   

  	
  Title

  	
  First Vice President

  
	
  Wire Transfer Instructions:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Wachovia Bank, National Association

  	
   

  	
   

  
	
  ABA#:  026-005-092

  	
   

  	
   

  
	
  Acct. Name:

  	
  Bayerische Landesbank,

  	
   

  	
   

  
	
   

  	
  New York Branch

  	
   

  	
   

  
	
  Account #:

  	
  200-1935-3009-0

  	
   

  	
   

  
	
  Reference:

  	
  FSA Line of Credit

  	
   

  	
   

  
					



 


[Signatures continued on following page]


 


53





















 


[Signature page to Credit Agreement]


 


	
  Address:

  	
  LANDESBANK HESSEN-THÜRINGEN

  
	
   

  	
   

  	
  GIROZENTRALE, Acting Through

  
	
  For Credit Issues:

  	
  Its New York Branch

  
	
   

  	
   

  	
   

  	
   

  
	
  Landesbank Hessen-Thüringen Girozentrale

  	
   

  	
   

  
	
  New York Branch

  	
  By

  	
  /s/ Patricia A. South

  
	
  420 Fifth Avenue

  	
  Name

  	
  Patricia A. South

  
	
  New York, NY 10018-2729

  	
  Title

  	
  Senior Vice President

  
	
  Attention:

  	
  Manager-Public Finance

  	
   

  	
  Financial Institutions & International

  
	
   

  	
  Department

  	
   

  	
  Public Finance

  
	
  Telephone:

  	
  (212) 703-5306

  	
   

  	
   

  
	
  Facsimile:

  	
  (212) 703-5256

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Irina Rakhlis

  
	
  For Administrative Issues:

  	
  Name

  	
  Irina Rakhlis

  
	
   

  	
   

  	
  Title

  	
  Credit Analyst

  
	
  Landesbank Hessen-Thüringen Girozentrale

  	
   

  	
   

  
	
  New York Branch

  	
   

  	
   

  
	
  420 Fifth Avenue

  	
   

  	
   

  
	
  New York, NY 10018-2729

  	
   

  	
   

  
	
  Attention:

  	
  Ms. Gudrun Dronca

  	
   

  	
   

  
	
   

  	
  Public Finance Department

  	
   

  	
   

  
	
  Telephone:

  	
  (212) 703-5244

  	
   

  	
   

  
	
  Facsimile:

  	
  (212) 703-5256

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Wire Transfer Instructions:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Citibank, New York

  	
   

  	
   

  
	
  ABA #:

  	
  021-000-089

  	
   

  	
   

  
	
  Account Name: HELABA, New York

  	
   

  	
   

  
	
  Account #:

  	
  36146001

  	
   

  	
   

  
	
  Reference:

  	
  FSA

  	
   

  	
   

  
	
  Attn.:

  	
  Ms. Gudrun Dronca

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
					



 


[Signatures continued on following page]


 


54





















 


[Signature page to
Credit Agreement]


 


	
  Address:

  	
   

  	
  DEUTSCHE BANK AG,
  New York Branch

  
	
   

  	
   

  	
   

  	
   

  
	
  Deutsche Bank Securities

  	
   

  	
   

  
	
  60 Wall Street

  	
  By

  	
  /s/ John McGill

  
	
  New York, NY 10005

  	
  Name

  	
  John McGill

  
	
  Attention:

  	
  Ms. Ruth Leung

  	
  Title

  	
  Director

  
	
   

  	
  Portfolio Manager - North

  	
   

  	
   

  
	
   

  	
  American Insurance Companies

  	
   

  	
   

  
	
  Telephone:

  	
  (212) 250-8650

  	
  By

  	
  /s/ Brett Hanmer

  
	
  Facsimile:

  	
  (212) 797-0270

  	
  Name

  	
  Brett Hanmer

  
	
   

  	
   

  	
  Title

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
  Wire Transfer Instructions:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  To:

  	
  Federal Reserve Bank of New York

  	
   

  	
   

  
	
  ABA:

  	
  021001033

  	
   

  	
   

  
	
  A/C:

  	
  Bankers Trust New York

  	
   

  	
   

  
	
  FFC:

  	
  Deutsche Bank NY Loan Operations

  	
   

  	
   

  
	
  A/C:

  	
  60200119

  	
   

  	
   

  
	
  Attn:

  	
  Victor Colon

  	
   

  	
   

  
	
  Ref:

  	
  FSA

  	
   

  	
   

  
						



 


[Signatures
continued on following page]


 


55





















 


[Signature page to
Credit Agreement]


 


 


	
  Address:

  	
  KBC BANK N.V.

  
	
   

  	
   

  	
   

  	
   

  
	
  KBC Bank N.V.

  	
   

  	
   

  
	
  New York Branch

  	
  By

  	
  /s/ Christine B. Park

  
	
  10th Floor

  	
  Name

  	
  Christine B. Park

  
	
  125 West 55th Street

  	
  Title

  	
  Associate

  
	
  New York, NY 10019

  	
   

  	
   

  
	
  Attention:

  	
  Ms. Christine Park

  	
   

  	
   

  
	
  Telephone:

  	
  (212) 541-0731

  	
  By

  	
  /s/ Robert Snauffer

  
	
  Facsimile:

  	
  (212) 541-0793

  	
  Name

  	
  Robert Snauffer

  
	
   

  	
   

  	
  Title

  	
  First Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
  Wire Transfer Instructions:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The Bank of New York

  	
   

  	
   

  
	
  ABA # 021-000-018

  	
   

  	
   

  
	
  Acct. Name: KBC Bank N.V., NY Branch

  	
   

  	
   

  
	
  Acct. #:

  	
  802-301-5618

  	
   

  	
   

  
	
  Ref:

  	
  FSA

  	
   

  	
   

  
	
  Attn.:

  	
  Loan Administration

  	
   

  	
   

  
						



 


[Signatures
continued on following page]


 


56





















 


[Signature page to
Credit Agreement]


 


 


	
  Address:

  	
  NORDDEUTSCHE LANDESBANK

  
	
   

  	
   

  	
  GIROZENTRALE, New York and/or Cayman

  
	
  Norddeutsche Landesbank Girozentrale

  	
  Islands Branch

  
	
  New York Branch

  	
   

  	
   

  
	
  37th Floor

  	
   

  	
   

  
	
  1114 Avenue of the Americas

  	
  By

  	
  /s/ Stephen K. Hunter

  
	
  New York, NY 10036

  	
  Name

  	
  Stephen K. Hunter

  
	
  Attention:

  	
  Ms. Stephanie Finnen

  	
  Title

  	
  Senior Vice President

  
	
  Telephone:

  	
  (212) 812-6806

  	
   

  	
   

  
	
  Facsimile:

  	
  (212) 812-6860

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Stephanie Finnen

  
	
   

  	
   

  	
  Name

  	
  Stephanie Finnen

  
	
  Wire Transfer Instructions:

  	
  Title

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
  Chase Manhattan Bank, New York

  	
   

  	
   

  
	
  ABA #: 021-000-021

  	
   

  	
   

  
	
  Acct. Name: Nord LB, NY Branch

  	
   

  	
   

  
	
  Acct. #: 001-135-2382

  	
   

  	
   

  
	
  Ref.: FSA

  	
   

  	
   

  
	
  Attn.: Mr. Matthew Hamel

  	
   

  	
   

  
	
  Telephone: (212) 812-6809

  	
   

  	
   

  
					



 


[Signatures
continued on following page]


 


57





















 


[Signature page to
Credit Agreement]


 


	
  Address:

  	
  LANDESBANK BADEN-WÜRTTEMBERG,

  Acting Through Its New York Branch

  
	
  Landesbank Baden-Württemberg

  	
   

  	
   

  
	
  New York Branch

  	
   

  	
   

  
	
  West Building, 31st Floor

  	
  By

  	
  /s/ Gary Valente

  
	
  280 Park Avenue

  	
  Name

  	
  Gary Valente

  
	
  New York, NY 10017

  	
  Title

  	
  Vice President

  
	
  Attention:

  	
  Mr. Gary Valente

  	
   

  	
   

  
	
  Telephone:

  	
  (212) 584-1786

  	
   

  	
   

  
	
  Facsimile:

  	
  (212) 584-1799

  	
  By

  	
  /s/ Ronald Bertolini

  
	
   

  	
   

  	
  Name

  	
  Ronald Bertolini

  
	
   

  	
   

  	
  Title

  	
  General Manager

  
	
  With a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Landesbank Baden-Württemberg

  	
   

  	
   

  
	
  New York Branch

  	
   

  	
   

  
	
  West Building, 31st Floor

  	
   

  	
   

  
	
  280 Park Avenue

  	
   

  	
   

  
	
  New York, NY 10017

  	
   

  	
   

  
	
  Attention:

  	
  Ms. Claudia Rothe

  	
   

  	
   

  
	
   

  	
  Ms. Bette Smolen

  	
   

  	
   

  
	
  Telephone:

  	
  (212) 584-1720

  	
   

  	
   

  
	
   

  	
  (212) 584-1721

  	
   

  	
   

  
	
  Facsimile:

  	
  (212) 584-1729

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Wire Transfer Instructions:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  JPMorgan Chase Bank, New York

  	
   

  	
   

  
	
  ABA#:

  	
  021-000-021

  	
   

  	
   

  
	
  In Favor

  	
   

  	
   

  	
   

  
	
     of:

  	
  Landesbank Baden-Württemberg,

  	
   

  	
   

  
	
   

  	
  New York Branch

  	
   

  	
   

  
	
  Acct#:

  	
  400-806-800

  	
   

  	
   

  
	
  Ref:

  	
  FSA Soft Cap Line of Credit

  	
   

  	
   

  
						



 


[Signatures
continued on following page]


 


58





















 


[Signature page to
Credit Agreement]


 


	
  Address:

  	
  THE BANK OF NEW YORK

  
	
   

  	
   

  
	
  The Bank of New York

  	
   

  
	
  Global Insurance Division

  	
  By 

  	
  /s/ Sree Ganesan

  	
   

  
	
  17th Floor

  	
  Name 

  	
  Sree Ganesan

  	
   

  
	
  One Wall Street

  	
  Title 

  	
  Vice President

  	
   

  
	
  New York, NY 10286

  	
   

  
	
  Telephone:

  	
  (212) 635-1064

  	
   

  
	
  Facsimile:

  	
  (212) 809-9520

  	
   

  
	
  Attention:

  	
  Mr. David Trick

  	
   

  
	
   

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
  With a copy to:

  	
   

  
	
   

  	
   

  
	
  The Bank of New York

  	
   

  
	
  Global Insurance Division

  	
   

  
	
  17th Floor

  	
   

  
	
  One Wall Street

  	
   

  
	
  New York, NY 10286

  	
   

  
	
  Telephone:

  	
  (212) 635-7752

  	
   

  
	
  Facsimile:

  	
  (212) 809-9520

  	
   

  
	
  Attention:

  	
  Ms. Annette Harewood

  	
   

  
	
   

  	
   

  
	
  Wire Transfer Instructions:

  	
   

  
	
   

  	
   

  
	
  Domestic & Eurodollar

  	
   

  
	
  The Bank of New York

  	
   

  
	
  101 Barclay Street

  	
   

  
	
  ABA#: 021000018

  	
   

  
	
  Loan Service Dept.

  	
   

  
	
  BBK#: GLA 111556

  	
   

  
	
  Ref: FSA Soft Cap Line of Credit

  	
   

  
								



 


[Signatures
continued on following page]


 


59





















 


[Signature page to
Credit Agreement]


 


This Agreement is executed by The Bank of Nova Scotia
to effectuate the amendment and restatement of the 1999 Credit Agreement
and upon execution and delivery of this Agreement the commitment of The Bank of
Nova Scotia shall be terminated.


 


 


	
  Address:

  	
  THE BANK OF NOVA SCOTIA, New York

  
	
   

  	
  Agency

  
	
  The Bank of Nova Scotia

  	
   

  
	
  One Liberty Plaza

  	
   

  	
   

  	
   

  
	
  New York, NY 10006

  	
  By

  	
  /s/ Todd Meller

  	
   

  
	
  Attn:

  	
  Mr. David Schwartzbard, Director

  	
  Name

  	
  Todd Meller

  	
   

  
	
  Telephone:

  	
  (212) 225-5221

  	
  Title 

  	
  Managing Director

  	
   

  
	
  Facsimile:

  	
  (212) 225-5090

  	
   

  
	
   

  	
   

  
	
  Wire Transfer Instructions:

  	
   

  
	
   

  	
   

  
	
  The Bank of Nova Scotia,

  	
   

  
	
  New York Agency

  	
   

  
	
  ABA: 026-002-532

  	
   

  
	
  Attn: Loan Accounting

  	
   

  
								



 


[Signatures
continued on following page]


 


60





















 


[Signature page to
Credit Agreement]


 


	
  Notice Address:

  	
  KEYBANK NATIONAL
  ASSOCIATION

  
	
   

  	
   

  	
   

  	
   

  
	
  Credit
  Contact:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  KeyBank National Association

  	
  By

  	
  /s/ Mary K. Young

  
	
  127 Public Square

  	
  Name

  	
  Mary K. Young

  
	
  Cleveland, OH 44114

  	
  Title

  	
  Vice President

  
	
  Attn:

  	
  Ms. Mary K.
  Young

  	
   

  	
   

  
	
   

  	
  Vice President
  and Portfolio Manager

  	
   

  	
   

  
	
  Telephone:

  	
  (216) 689-4443

  	
   

  	
   

  
	
  Facsimile:

  	
  (216) 689-4981

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Operations
  Contact:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  KeyBank National
  Association

  	
   

  	
   

  
	
  127 Public
  Square

  	
   

  	
   

  
	
  Cleveland, OH
  44114

  	
   

  	
   

  
	
  Attn:

  	
  Madhu Pandya

  	
   

  	
   

  
	
   

  	
  Deal Administrator

  	
   

  	
   

  
	
  Telephone:

  	
  (216) 689-5277

  	
   

  	
   

  
	
  Facsimile:

  	
  (216) 689-5962

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Back-up
  Contact:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  KeyBank National
  Association

  	
   

  	
   

  
	
  127 Public
  Square

  	
   

  	
   

  
	
  Cleveland, OH
  44114

  	
   

  	
   

  
	
  Attn:

  	
  Ms. Margie
  Vacca

  	
   

  	
   

  
	
   

  	
  Deal
  Administrator

  	
   

  	
   

  
	
  Telephone:

  	
  (216) 689-3580

  	
   

  	
   

  
	
  Facsimile:

  	
  (216) 689-5962

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Wire Transfer
  Instructions:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Bank Name: KeyBank National Association

  	
   

  	
   

  
	
  ABA#: 041 001 039

  	
   

  	
   

  
	
  City, State: Cleveland, OH

  	
   

  	
   

  
	
  Account #: 1140228209035

  	
   

  	
   

  
	
  Attn.: KCIBIQ/FINANCIAL SECURITY

  	
   

  	
   

  
	
     ASSURANCE

  	
   

  	
   

  
								



 


61





















 


SCHEDULE I


 


COMMITMENTS


 


PART A


 


	
  Name

  	
   

  	
  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Bayerische Landesbank,
  New York Branch

  	
   

  	
  $

  	
  115,000,000

  	
   

  
	
  Landesbank Hessen-Thüringen
  Girozentrale, New York Branch

  	
   

  	
  50,000,000

  	
   

  
	
  Deutsche Bank AG,
  New York Branch

  	
   

  	
  45,000,000

  	
   

  
	
  KBC Bank N.V.

  	
   

  	
  20,000,000

  	
   

  
	
  Landesbank Baden-Württemberg, New York Branch

  	
   

  	
  40,000,000

  	
   

  
	
  The Bank of New York

  	
   

  	
  20,000,000

  	
   

  
	
  Norddeutsche Landesbank
  Girozentrale, New York Branch

  	
   

  	
  35,000,000

  	
   

  
	
  KeyBank National Association

  	
   

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
  $

  	
  350,000,000

  	
   

  



 


 


PART B


 


Part B Banks


 


Landesbank Hessen-Thüringen Girozentrale, New York Branch


 


Deutsche Bank AG, New York Branch


 


KBC Bank N.V.


 


The Bank of New York


 


Norddeutsche Landesbank
Girozentrale, New York Branch


 


KeyBank National
Association


 


Landesbank
Baden-Württemberg, New York Branch


 





















 


PART C


 


Part C Banks and Contingent
Commitments


 


	
  Name

  	
   

  	
  Contingent Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bayerische Landesbank, New York Branch

  	
   

  	
  $

  	
  83,700,000

  	
   

  
	
  Total

  	
   

  	
  $

  	
  83,700,000

  	
   

  



 


I-2





















 


SCHEDULE II


 


UNDISCLOSED LIABILITIES


 


[None]


 





















 


SCHEDULE III


 


SUBSIDIARIES


 


	
  Name of
  Subsidiary

  	
   

  	
  Jurisdiction of

  Incorporation

  	
   

  	
  Owner(s) of Equity

  Interests Therein

  	
   

  	
  Percentage

  Ownership

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FSA
  Insurance Company

  	
   

  	
  Oklahoma

  	
   

  	
  FSA

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Financial
  Security Assurance International Ltd.

  	
   

  	
  Bermuda

  	
   

  	
  FSAIC

  	
   

  	
  100%

  (Common

  Shares Only)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Financial
  Security Assurance of Oklahoma, Inc.

  	
   

  	
  Oklahoma

  	
   

  	
  FSAIC

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Financial
  Security Assurance (U.K.) Limited

  	
   

  	
  England

  	
   

  	
  FSAIC

  	
   

  	
  100%

  



 





















 


SCHEDULE IV


 


LIST OF REINSURANCE AGREEMENTS


 










 


SCHEDULE
IV


 


REINSURANCE
AGREEMENTS


WITH
RESPECT TO THE COVERED PORTFOLIO


 


REINSURANCE
AGREEMENTS WITH RESPECT TO CESSIONS OF


THE
COVERED PORTFOLIO BY FINANCIAL SECURITY ASSURANCE INC. AND ITS SUBSIDIARIES(1)


 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENT (3)

  
	
  Quota Share
  Treaty

  	
   

  	
  Financial
  Security Assurance Inc. (“FSA”)

  	
   

  	
  Radian Asset
  Assurance Inc. (formerly known as Asset Guaranty Insurance Co.)

  	
   

  	
  10/1/88 -
  12/31/89

  	
   

  	
  Reinsurance
  Agreement

  
	
  Quota Share
  Treaty

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  Radian Asset
  Assurance Inc. (formerly Radian Reinsurance Inc., formerly known as Enhance
  Reinsurance Co., which was merged into this company in 2004)

  	
   

  	
  12/31/86 -
  12/31/87

  	
   

  	
  Reinsurance
  Agreement

  
	
  Quota Share
  Treaty

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  1/1/88 -
  12-31-89

  	
   

  	
  Reinsurance
  Agreement

  
	
  Quota Share
  Treaty

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  Assured Guaranty
  Corp. (formerly known as ACE Guaranty Inc, ACE Guaranty Re Inc. and Capital
  Reinsurance Co.) (assumed from United States Fidelity Guaranty Co.
  (“USF&G”))

  	
   

  	
  1/1/88 -
  12/31/89

  	
   

  	
  Reinsurance
  Agreement and assumption documents

  
	
  Quota Share
  Treaty No. QS-2 (1/1/90) (con’d)

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  1/1/90 -
  12/31/91

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Abeille
  Reassurances

  	
   

  	
  1/1/90 -
  12/31/95

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Assurred
  Guaranty Corp. (including assumption from USF&G)

  	
   

  	
  1/1/90 - Present

  	
   

  	
  Interests and
  Liabilities Contract and Treaty and assumption documents

  
	
   

  	
   

  	
   

  	
   

  	
  BluePoint Re Ltd.

  	
   

  	
  1/1/05 - Present

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  



 


 


3





















 


 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  Quota Share
  Treaty No. QS-2 (1/1/90)

  (con’d)

  	
   

  	
   

  	
   

  	
  Employers
  Reinsurance Co.

  	
   

  	
  1/1/97 -
  12/31/99

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Frankona
  Reinsurance Co.

  	
   

  	
  1/1/94 -
  12/31/96

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Pohjola
  Insurance Co., Ltd.

  	
   

  	
  1/1/90 -
  12/31/94

  	
   

  	
  Interests and Liabilities
  Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  1/1/90 - Present

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/99 - Present

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Royal
  Reinsurance Co., Ltd.

  	
   

  	
  1/1/90 -
  12/31/92

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Odyssey
  Reinsurance Co. (formerly known as Skandia America Reinsurance Corp.)

  	
   

  	
  1/1/90 -
  12/31/91

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Swiss
  Reinsurance Company

  	
   

  	
  1/1/04 - Present
 (2005 pending)

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  The Tokio Marine
  & Nichido Fire Insurance Co., Ltd. (formerly, The Tokio Marine & Fire
  Insurance Co., Ltd.)

  	
   

  	
  1/1/91 - Present

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Trade Indemnity
  plc

  	
   

  	
  1/1/90 -
  12/31/95

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Cie
  Transcontinentale de Reassurance

  	
   

  	
  1/1/90 -
  12/31/96

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  



 


4





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  Quota Share
  Treaty No. QS-2 (1/1/90) (cont’d

  	
   

  	
   

  	
   

  	
  Trygg-Hansa
  Insurance Co. Ltd.

  	
   

  	
  1/1/90 -
  12/31/93. FSA re-assumed the cessions as of 5/31/99.

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Winterthur Swiss
  Insurance Co.

  	
   

  	
  1/1/90 -
  12/31/94. FSA re-assumed the cessions as of 11/1/96.

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
  Quota Share
  Treaty No. QS-3 (MB 1/1/90)

  	
   

  	
  FSA and its
  subsidiaries (except Financial Security Assurance (U.K.) Ltd. and Financial
  Security Assurance International Ltd.)

  	
   

  	
  Assured Guaranty
  Corp. (including assumption from USF&G)

  	
   

  	
  11/1/90 -
  Present

  	
   

  	
  Interests and
  Liabilities Contracts and Treaty and assumption documents

  
	
   

  	
   

  	
   

  	
   

  	
  BluePoint Re Ltd.

  	
   

  	
  1/1/05 - Present

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  11/1/90 -
  Present

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/99 - Present

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Swiss Reinsurance
  Company

  	
   

  	
  1/1/04 - Present

  (2005 pending)

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  The Tokio Marine
  & Nichido Fire Insurance Co., Ltd.

  	
   

  	
  1/1/91 - Present

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
  1998 1st
  and 2nd Loss U.S. Mortgage-backed Treaty

  	
   

  	
  FSA and its
  subsidiaries (except Financial Security Assurance (U.K.) Ltd.)

  	
   

  	
  Radian Asset
  Assurance Inc. (formerly Asset Guaranty Insurance Co.)

  	
   

  	
  1/1/98 -
  12/31/98

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Assured Guaranty
  Corp. and Assured Guaranty Re Overseas Ltd. (formerly ACE Capital Re Overseas
  Ltd. and Capital Credit Reinsurance Co. Ltd.)

  	
   

  	
  1/1/98 -
  12/31/98

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  



 


5





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  1998 1st
  and 2nd Loss U.S. Mortgage-backed Treaty (con’d)

  	
   

  	
   

  	
   

  	
  XL Insurance Ltd.

  	
   

  	
  1/1/98 -
  12/31/98

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/99 -
  12/31/99

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  XL Insurance Ltd
  and XL Financial Assurance Ltd.

  	
   

  	
  1/1/99 -
  12/31/99

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  AXA Re Finance
  S.A.

  	
   

  	
  1/1/99 -
  12/31/99

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
  1999 1st,
  2nd and 3rd Loss U.S. Automobile Loan-backed Treaty

  	
   

  	
  FSA and its
  subsidiaries (except Financial Security Assurance (U.K.) Ltd.)

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/99 -
  12/31/99

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  AXA Re Finance,
  SUCURSAL NA MADEIRA S.A.

  	
   

  	
  1/1/99 -
  12/31/99

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/99 -
  12/31/99

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  1/1/99 -
  12/31/99

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/99 -
  12/31/99

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  XL Insurance Ltd
  and XL Financial Assurance Ltd.

  	
   

  	
  1/1/99 -
  12/31/99

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
  1999 1st,
  2nd and 3rd Loss U.S. Multifamily Housing Treaty

  	
   

  	
  FSA and its
  subsidiaries (except Financial Security Assurance (U.K.) Ltd.)

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/99 -
  12/31/99

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  1/1/99 - 12/31/99

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  



 


6





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  1999 1st,
  2nd and 3rd Loss U.S. Multifamily Housing Treaty

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/99 -
  12/31/99

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  XL Insurance Ltd.
  and XL Financial Assurance Ltd.

  	
   

  	
  1/1/99 -
  12/31/99

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
  1999 1st,
  2nd and 3rd Loss CBO/CLO Treaty

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/99 -
  12/31/99

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/99 -
  12/31/99

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/99 -
  12/31/99

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  XL Insurance Ltd.
  and XL Financial Assurance Ltd.

  	
   

  	
  1/1/99 -
  12/31/99

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
  AmeriCredit
  Spread Account Replacement Reinsurance Treaty

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  5/1/99 - 12/31/00

  	
   

  	
  Treaty Placement
  Memorandum

  
	
  AmeriCredit
  Spread Account Replacement Reinsurance Treaty

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  XL Insurance Ltd.

  	
   

  	
  5/1/99 - 12/31/00

  	
   

  	
  Treaty Placement
  Memorandum

  
	
  Emerging Market
  CBO/CLO Quota Share and Aggregate Excess of Loss Treaty

  	
   

  	
  FSA and its
  subsidiaries (except Financial Security Assurance (U.K.) Ltd.

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  11/30/99 -
  10/31/04

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1130/99 -
  12/31/04

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  11/30/99 -
  12/31/04

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  11/30/99 -
  12/31/04

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  XL Insurance Ltd.
  and XL Financial Assurance Ltd.

  	
   

  	
  11/30/99 -
  12/31/04

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  



 


7





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  2000 1st,
  2nd and 3rd Loss U.S. Mortgage-backed Treaty

  	
   

  	
  FSA and its
  subsidiaries (except Financial Security Assurance (U.K.) Ltd.)

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/00 -
  12/31/00

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  AXA Reassurance
  S.A. (1st & 2nd Layers only)

  	
   

  	
  1/1/00 -
  12/31/00

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Assured Guaranty
  Corp.A

  	
   

  	
  1/1/00 -
  12/31/00

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  1/1/00 -
  12/31/00

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/00 -
  12/31/00

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  XL Insurance Ltd.

  	
   

  	
  1/1/00 -
  12/31/00

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
  2000 1st,
  2nd, 3rd% & 4th Loss U.S. Automobile Loan-backed
  Treaty

  	
   

  	
  FSA and its
  subsidiaries (except Financial Security Assurance (U.K.) Ltd.)

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/00 -
  12/31/00

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  AXA Reassurance
  S.A. (1st & 2nd Layers only)

  	
   

  	
  1/1/00 -
  12/31/00

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/00 -
  12/31/00

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  1/1/00 -
  12/31/00

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/00 -
  12/31/00

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  XL Insurance Ltd.

  	
   

  	
  1/1/00 -
  12/31/00

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  



 


8





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  2000 1st,
  2nd and 3rd Loss U.S. Multifamily Housing Treaty

  	
   

  	
  FSA and its
  subsidiaries (except Financial Security Assurance (U.K.) Ltd.)

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/00 -
  12/31/00

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  1/1/00 -
  12/31/00

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/00 -
  12/31/00

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  XL Insurance Ltd.
  and XL Financial Assurance Ltd.

  	
   

  	
  1/1/00 -
  12/31/00

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
  2000 1st,
  2nd and 3rd Loss CBO/CLO Treaty

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/00 - present

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/00 - present

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/00 - present

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  XL Insurance Ltd.

  	
   

  	
  1/1/00 - present

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
  AmeriCredit
  Spread Account Replacement Reinsurance Treaty II

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  6/10/00 - 12/31/02

  	
   

  	
  Treaty Placement
  Memorandum

  
	
   

  	
   

  	
   

  	
   

  	
  XL Financial
  Assurance Ltd.

  	
   

  	
  6/10/00 - 12/31/02

  	
   

  	
  Treaty Placement
  Memorandum

  
	
   

  	
   

  	
   

  	
   

  	
  ACE American
  Insurance Co. (replaced by XL Financial Assurance Ltd.)

  	
   

  	
  8/10/00 - 12/31/02

  	
   

  	
  Treaty Placement
  Memorandum

  
	
   

  	
   

  	
   

  	
   

  	
  Gerling Global
  International Reinsurance Company, Ltd. (replaced by XL Financial Assurance
  Ltd.)

  	
   

  	
  8/10/00 - 12/31/02

  	
   

  	
  Treaty Placement
  Memorandum

  



 


9





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  Long Beach
  Spread Account Replacement Treaty

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  Gerling Global
  International Reinsurance Company, Ltd.

  	
   

  	
  11/20/00 - 12/30/01

  	
   

  	
  Treaty Placement
  Memorandum

  
	
  2001 1st,
  2nd and 3rd Loss U.S. Mortgage-backed Treaty

  	
   

  	
  FSA and its
  subsidiaries (except Financial Security Assurance (U.K.) Ltd.)

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  AXA Reassurance
  S.A. (1st & 2nd Layers only)

  	
   

  	
  1/1/01- 12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  The Tokio Marine
  & Nichido Fire Insurance Co., Ltd.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  XL Financial
  Assurance Ltd.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
  2001 1st,
  2nd, 3rd% & 4th Loss U.S. Automobile
  Loan-backed Treaty

  	
   

  	
  FSA and its
  subsidiaries (except Financial Security Assurance (U.K.) Ltd.)

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  AXA Reassurance
  S.A. (1st & 2nd Layers only)

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  The Tokio Marine
  & Nichido Fire Insurance Co., Ltd.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  



 


10





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  2001 1st,
  2nd, 3rd% & 4th Loss U.S. Automobile
  Loan-backed Treaty (con’t)

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  XL Financial
  Assurance Ltd.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
  2001 1st,
  2nd and 3rd Loss U.S. Multifamily Housing Treaty

  	
   

  	
  FSA and its
  subsidiaries (except Financial Security Assurance (U.K.) Ltd.)

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Radian
  Reinsurance Inc.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  The Tokio Marine
  & Nichido Fire Insurance Co., Ltd.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  XL Financial
  Assurance Ltd.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
  2001 1st,
  2nd and 3rd Loss CBO/CLO Treaty

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  The Tokio Marine
  & Fire Insurance Co., Ltd.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  XL Financial
  Assurance Ltd.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  



 


11





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  2001 1st,
  2nd , 3rd and  4th Loss
  International Project Treaty

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Swiss
  Reinsurance Co.

  	
   

  	
  1/1/03 -
  12/31/03

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  The Tokio Marine
  & Nichido Fire Insurance Co., Ltd.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  XL Financial
  Assurance Ltd.

  	
   

  	
  1/1/01 -
  12/31/01

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
  2002 1st,
  2nd and 3rd Loss U.S. Mortgage-backed Treaty

  	
   

  	
  FSA and its
  subsidiaries (except Financial Security Assurance (U.K.) Ltd.)

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  ACE American
  Insurance Co.

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  The Tokio Marine
  & Nichido Fire Insurance Co., Ltd.

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  XL Financial
  Assurance Ltd.

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  



 


12





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  2002 1st,
  2nd, 3rd% & 4th Loss U.S. Automobile
  Loan-backed Treaty

  	
   

  	
  FSA and its
  subsidiaries (except Financial Security Assurance (U.K.) Ltd.)

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/02 - 12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  ACE American
  Reinsurance Co.

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  The Tokio Marine
  & Nichido Fire Insurance Co., Ltd.

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  XL Financial
  Assurance Ltd

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
  2002 1st,
  2nd and 3rd Loss CBO/CLO Treaty

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  The Tokio Marine
  & Nichido Fire Insurance Co., Ltd.

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  XL Financial
  Assurance Ltd

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  



 


13





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  2002 1st,
  2nd , 3rd and 4th Loss International Project
  Treaty

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty(pending)

  
	
   

  	
   

  	
   

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  Swiss America
  Reinsurance Co.

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  The Tokio Marine
  & Nichido Fire Insurance Co., Ltd.

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  XL Financial
  Assurance Ltd

  	
   

  	
  1/1/02 -
  12/31/02

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
  AmeriCredit
  Spread Account Replacement Reinsurance Treaty III

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  10/10/02 - 12/31/03

  	
   

  	
  Treaty Placement
  Memorandum (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  XL Insurance Ltd

  	
   

  	
  10/10/02 - 12/31/03

  	
   

  	
  Treaty Placement
  Memorandum (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  Partner
  Reinsurance Co., Ltd.

  	
   

  	
  10/10/02 - 12/31/03

  	
   

  	
  Treaty Placement
  Memorandum (pending)

  
	
  2003 1st and
  2nd U.S. Asset-backed (mortgages and autos) Treaty (pending)

  	
   

  	
  FSA and its
  subsidiaries (except Financial Security Assurance (U.K.) Ltd.)

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/03 -
  12/31/03

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  The Tokio Marine
  & Nichido Fire Insurance Co., Ltd.

  	
   

  	
  1/1/03 -
  12/31/03

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  XL Financial
  Assurance Ltd

  	
   

  	
  1/1/03 -
  12/31/03

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  



 


14





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  2003 1st,
  2nd , 3rd and 4th Loss International Project
  Treaty

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/03 -
  12/31/03

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/03 -
  12/31/03

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  1/1/03 -
  12/31/03

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  1/1/03 -
  12/31/03

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Swiss America
  Reinsurance Co.

  	
   

  	
  1/1/03 -
  12/31/03

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  The Tokio Marine
  & Nichido Fire Insurance Co., Ltd.

  	
   

  	
  1/1/03 -
  12/31/03

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  XL Financial
  Assurance Ltd

  	
   

  	
  1/1/03 -
  12/31/03

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
  2003-04Surplus
  Share Treaty – Project Finance and Healthcare

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  Ambac Indemnity
  Corpl

  	
   

  	
  10/1/03 - 9/30/04

  	
   

  	
  Treaty

  
	
  2004 1st and
  2nd U.S. Asset-backed (mortgages and autos) Treaty

  	
   

  	
  FSA and its
  subsidiaries (except Financial Security Assurance (U.K.) Ltd.)

  	
   

  	
  The Tokio Marine
  & Fire Insurance Co., Ltd.

  	
   

  	
  1/1/04 -
  12/31/04

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  XL Financial
  Assurance Ltd

  	
   

  	
  1/1/04 -
  12/31/04

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
  2004 1st,
  2nd , 3rd and 4th Loss International Project
  Treaty

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/04 -
  12/31/04

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Assured Guaranty
  Re International Ltd..

  	
   

  	
  1/1/04 -
  12/31/04

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  



 


15





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  2004 1st,
  2nd , 3rd and 4th Loss International Project
  Treaty (con’t)

  	
   

  	
   

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  1/1/04 -
  12/31/04

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  Swiss
  Reinsurance Co.

  	
   

  	
  1/1/04 -
  12/31/04

  	
   

  	
  Interests and
  Liabilities Contract and Treaty

  
	
   

  	
   

  	
   

  	
   

  	
  The Tokio Marine
  & Nichido Fire Insurance Co., Ltd.

  	
   

  	
  1/1/03 -
  12/31/03

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  XL Financial
  Assurance Ltd

  	
   

  	
  1/1/03 -
  12/31/03

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
  2004-05Surplus
  Share Treaty – Project Finance and Healthcare

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  Ambac Indemnity
  Corpl

  	
   

  	
  10/1/04 - 9/30/05

  	
   

  	
  Treaty (pending)

  
	
  2005 1st,
  2nd , 3rd and 4th Loss International Project
  Treaty

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  Assured Guaranty
  Re International Ltd..

  	
   

  	
  1/1/05 -
  12/31/05

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  1/1/05 -
  12/31/05

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  Swiss
  Reinsurance Co.

  	
   

  	
  1/1/05 -
  12/31/05

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  The Tokio Marine
  & Nichido Fire Insurance Co., Ltd.

  	
   

  	
  1/1/05 -
  12/31/05

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
   

  	
   

  	
   

  	
   

  	
  XL Financial
  Assurance Ltd

  	
   

  	
  1/1/05 -
  12/31/05

  	
   

  	
  Interests and
  Liabilities Contract and Treaty (pending)

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA

  	
   

  	
  Aasured Guaranty
  Corp. (assumed from USF&G)

  	
   

  	
  4/5/88 - Present

  	
   

  	
  Facultative
  Reinsurance Agreement assumption doc.

  
	
  Master
  Reinsurance Placement Memorandum

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  The Tokio Marine
  & Fire Insurance Co., Ltd.

  	
   

  	
  1/1/91 - Present

  	
   

  	
  Master
  Reinsurance Placement Memorandum

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  1/1/92 - Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  



 


16





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Capital Mortgage
  Reinsurance Company (Bermuda)

  	
   

  	
  2/23/95 -
  Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  AMBAC Indemnity
  Corp.

  	
   

  	
  7/15/96 -
  Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  AXA Re Finance,
  SUCURSAL NA MADEIRA S.A.

  	
   

  	
  6/1/96 - Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  AXA Re Finance
  S.A.

  	
   

  	
  10/1/96 -
  Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Royal Insurance
  plc

  	
   

  	
  10/1/96 -
  Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Swiss
  Reinsurance Co.

  	
   

  	
  12/1/97 -
  Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  XL Insurance Ltd

  	
   

  	
  12/1/97 -
  Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  12/1/97 -
  Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  RAM Reinsurance
  Co. Ltd.

  	
   

  	
  5/1/98 - Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Assured Guaranty
  Re Overseas Ltd.

  	
   

  	
  1/1/98 - Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  The Tokio Marine
  & Nichido Fine Insurance Co., Ltd.

  	
   

  	
  4/29/00 -
  Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  



 


17





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Zurich
  Reinsurance Centre Inc.

  	
   

  	
  9/1/97 - Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  XL Financial
  Assurance Ltd

  	
   

  	
  11/3/98 -
  Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Munich
  Reinsurance Co.

  	
   

  	
  12/1/99 -
  Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement (pending)

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Partner
  Reinsurance Co., Ltd., Zurich Branch

  	
   

  	
  6/1/00 - Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement (pending)

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Gerling Global
  International Reinsurance Co., Ltd.

  	
   

  	
  8/1/00 - Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  ACE American
  Reinsurance Co.

  	
   

  	
  8/1/00 - Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  CDC IXIS
  Financial Guaranty North America Inc.

  	
   

  	
  10/1/02 -
  Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Inter-Ocean
  Reinsurance Company Ltd.

  	
   

  	
  8/1/01 - Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  PMI Mortgage
  Insurance Company Ltd.

  	
   

  	
  12/1/02 - Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Assured Guaranty
  Re International Ltd.

  	
   

  	
  5/1/03 - Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  18/1/05 - Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement (pending)

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  ACE Guaranty
  Inc.

  	
   

  	
  1/1/96 - 12/31/96

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  



 


18





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Radian Reinsurance
  Inc.

  	
   

  	
  1/1/96 - 12/31/96

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/97 - 12/31/97

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Radian
  Reinsurance Inc.

  	
   

  	
  1/1/97 - 12/31/97

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Employers
  Reinsurance Co.

  	
   

  	
  1/1/97 - 12/31/97

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/98 - 12/31/98

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Radian
  Reinsurance Inc.

  	
   

  	
  1/1/98 - 12/31/98

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Employers
  Reinsurance Co.

  	
   

  	
  1/1/98 - 12/31/98

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/99 - 12/31/99

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Radian
  Reinsurance Inc.

  	
   

  	
  1/1/99 - 12/31/99

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/99 - 12/31/99

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Employers
  Reinsurance Co.

  	
   

  	
  1/1/99 - 12/31/99

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  RAM Reinsurance
  Co. Ltd

  	
   

  	
  1/1/99 - 12/31/99

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  



 


19





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  XL Insurance Ltd
  and XL Financial Assurance Ltd.

  	
   

  	
  1/1/99 - 12/31/99

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  ACE Guaranty
  Inc.

  	
   

  	
  1/1/00 - 12/31/00

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Radian
  Reinsurance Inc.

  	
   

  	
  1/1/00 - 12/31/00

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/00 - 12/31/00

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  RAM Reinsurance
  Co. Ltd

  	
   

  	
  1/1/00 - 12/31/00

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  XL Insurance Ltd

  	
   

  	
  1/1/00 - 12/31/00

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/01 - 12/31/01

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/01 - 12/31/01

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  1/1/01-12/31/01

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  RAM Reinsurance
  Co. Ltd

  	
   

  	
  1/1/01 - 12/31/01

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  XL Financial
  Assurance Ltd

  	
   

  	
  1/1/01 - 12/31/01

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/02 - 12/31/02

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  



 


20





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/02 - 12/31/02

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Radian Asset Assurance
  Inc.

  	
   

  	
  1/1/02 - 12/31/02

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  RAM Reinsurance
  Co. Ltd

  	
   

  	
  1/1/02 - 12/31/02

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  XL Financial
  Assurance Ltd

  	
   

  	
  1/1/02 - 12/31/02

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/03 - 12/31/03

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Assured Guaranty
  Re Internatinoal Ltd.

  	
   

  	
  71/1/04 - 12/31/04

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  American
  Re-Insurance Co.

  	
   

  	
  1/1/03 - 12/31/03

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Radian
  Reinsurance Inc.

  	
   

  	
  1/1/03 - 12/31/03

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic Facultative
  Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  RAM Reinsurance
  Co. Ltd

  	
   

  	
  1/1/03 - 12/31/03

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  XL Financial
  Assurance Ltd

  	
   

  	
  1/1/03 - 12/31/03

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/04 - 12/31/04

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Assured Guaranty
  Re Internatinoal Ltd.

  	
   

  	
  11/1/04 - 12/31/04

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  



 


21





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Radian
  Reinsurance Inc.

  	
   

  	
  1/1/04 - 12/31/04

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  RAM Reinsurance
  Co. Ltd

  	
   

  	
  1/1/04 - 12/31/04

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Swiss
  Reinsurance Co.

  	
   

  	
  1/1/04 - 12/31/04

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  XL Financial
  Assurance Ltd

  	
   

  	
  1/1/04 - 12/31/04

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/05 - 12/31/05

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement (pending)

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Assured Guaranty
  Re Internatinoal Ltd.

  	
   

  	
  1/1/05 - 12/31/05

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement (pending)

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  BluePoint Re
  Ltd.

  	
   

  	
  1/1/05 - 12/31/05

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement (pending)

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Radian
  Reinsurance Inc.

  	
   

  	
  1/1/05 - 12/31/05

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement (pending)

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  RAM Reinsurance
  Co. Ltd

  	
   

  	
  1/1/05 - 12/31/05

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement (pending)

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  Swiss Reinsurance
  Co.

  	
   

  	
  1/1/05 - 12/31/05

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement (pending)

  
	
  Automatic
  Facultative Facility Reinsurance Agreement

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  XL Financial
  Assurance Ltd

  	
   

  	
  1/1/05 - 12/31/05

  	
   

  	
  Automatic
  Facultative Facility Reinsurance Agreement (pending)

  



 


22





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  Financial
  Guaranty Insurance Co.

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  6/30/89 -
  present

  	
   

  	
  Facultative
  Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  MBIA Insurance
  Corp.

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  3/30/88 -
  present

  	
   

  	
  Agreement
  Covering Facultative Reinsurance Memoranda on Financial Guaranty Business

  
	
  Treaty for
  Scheduled Policies

  	
   

  	
  AMBAC Indemnity
  Corp.

  	
   

  	
  FSA

  	
   

  	
  12/31/85

  	
   

  	
  Reinsurance
  Treaty

  
	
  Treaty for
  Scheduled Policies

  	
   

  	
  Financial
  Guaranty Insurance Co.

  	
   

  	
  FSA

  	
   

  	
  12/19/85

  	
   

  	
  Reinsurance
  Treaty

  
	
  Treaty

  	
   

  	
  Financial
  Guaranty Insurance Co.

  	
   

  	
  FSA

  	
   

  	
  1/1/86 -
  12/31/86

  	
   

  	
  Reinsurance
  Agreement

  
	
  2003-04Surplus
  Share Treaty – Project Finance and Healthcare

  	
   

  	
  Ambac Indemnity
  Corp. and its subsidiaries

  	
   

  	
  FSA

  	
   

  	
  10/1/03 - 9/30/04

  	
   

  	
  Treaty

  
	
  2004-05Surplus
  Share Treaty – Project Finance and Healthcare

  	
   

  	
  Ambac Indemnity
  Corp. and its subsidiaries

  	
   

  	
  FSA

  	
   

  	
  10/1/04 - 9/30/05

  	
   

  	
  Treaty (pending)

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  The Tokio Marine
  & Fire Insurance Co., Ltd.

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  4/19/99 -
  present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master Facultative
  Reinsurance Agreement

  	
   

  	
  XL Insurance Ltd

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  7/1/99 - present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  ACE Guaranty
  Inc.

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  1/1/88 - present

  	
   

  	
  Facultative
  Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  ACE Guaranty
  Inc. (assumed from USF&G)

  	
   

  	
  FSA

  	
   

  	
  1/1/88 - present

  	
   

  	
  Facultative
  Reinsurance Agreement and assumption documents

  
	
  Facultative
  Excess of Loss Reinsurance Agreement

  	
   

  	
  ACE Guaranty
  Inc.(assumed from USF&G)

  	
   

  	
  FSA

  	
   

  	
  6/1/90

  	
   

  	
  Facultative
  Reinsurance Agreement and assumption documents

  



 


23





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  Facultative
  Reinsurance Agreement

  	
   

  	
  USF&G

  	
   

  	
  FSA

  	
   

  	
  7/1/90

  	
   

  	
  Facultative
  Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  ACE Capital Re
  International Ltd.

  	
   

  	
  FSA

  	
   

  	
  8/1/01 - Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  RAM Reinsurance
  Company Ltd.

  	
   

  	
  FSA

  	
   

  	
  8/1/01 - Present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  
	
  Quota Share
  Retrocession Agreement

  	
   

  	
  American
  Re-Insurance Company

  	
   

  	
  FSA

  	
   

  	
  8/2/01 - Present

  	
   

  	
  Quota Share
  Retrocession Agreement

  
	
  Retrocession
  Assignment Agreement

  	
   

  	
  Inter-Ocean
  Reinsurance Company Ltd.

  	
   

  	
  FSA and its
  subsidiaries and affiliates

  	
   

  	
  8/1/01 - Present

  	
   

  	
  Retrocession
  Assignment Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  Capital Markets
  Assurance Corp.

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  12/1/94 -
  present

  	
   

  	
  Facultative
  Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  Connie Lee
  Insurance Co.

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  6/1/90 - present

  	
   

  	
  Facultative
  Excess-of-Loss Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  Connie Lee
  Insurance Co.

  	
   

  	
  FSA and its subsidiaries

  	
   

  	
  1/1/89 - present

  	
   

  	
  Facultative
  Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  Radian
  Reinsurance Inc.

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  2/23/88 -
  present

  	
   

  	
  Facultative
  Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  Financial
  Guaranty Insurance Co.

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  1/1/85 - present

  	
   

  	
  Municipal Bond
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  MBIA Insurance
  Corp.

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  12/31/88 -
  present

  	
   

  	
  Agreement
  covering Facultative Reinsurance Memoranda on Financial Guaranty Business

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  Radian
  Reinsurance Inc.

  	
   

  	
  FSA and its
  subsidiaries

  	
   

  	
  1/1/95 - present

  	
   

  	
  Facultative
  Excess-of-Loss Reinsurance Agreement

  



 


24





















 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  REINSURER

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  Hannover
  Ruckvensicherungs A.G.

  	
   

  	
  FSA

  	
   

  	
  1/1/95 - present

  	
   

  	
  Facultative
  Excess-of-Loss Reinsurance Agreement

  
	
  Facultative
  Reinsurance Agreement for a Policy

  	
   

  	
  General
  Insurance Co. of America

  	
   

  	
  FSA

  	
   

  	
  10/1/91

  	
   

  	
  Agreement

  



 


REINSURANCE AGREEMENTS WITH
RESPECT TO ASSUMPTIONS OF


THE COVERED PORTFOLIO BY CAPITAL
GUARANTY INSURANCE COMPANY(1)


 


	
  TYPE OF AGREEMENT

  	
   

  	
  CEDING COMPANY

  	
   

  	
  EFFECTIVE DATE (2)

  	
   

  	
  DOCUMENTS (3)

  
	
  Portfolio
  Reinsurance Agreement for Scheduled Policies

  	
   

  	
  USF&G

  	
   

  	
  12/1/86

  	
   

  	
  Financial
  Guaranty Portfolio Reinsurance Agreement and Assumption Agreement

  
	
  Facultative
  Reinsurance Agreement for Qualifying Risks

  	
   

  	
  USF&G

  	
   

  	
  12/1/89

  	
   

  	
  Reinsurance
  Agreement and Service and Underwriting Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  1/1/89

  	
   

  	
  Facultative
  Reinsurance Agreement

  
	
  Facultative
  Reinsurance Agreement for Qualifying Risks

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  12/30/88 -
  12/30/89

  	
   

  	
  Excess-of -Loss
  Reinsurance Agreement

  
	
  Facultative
  Reinsurance Agreement for Scheduled Risks

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  12/31/88

  	
   

  	
  Excess-of-Loss
  In-Force Reinsurance Agreement

  
	
  Facultative
  Reinsurance Agreement for Qualifying Risks

  	
   

  	
  Assured Guaranty
  Corp.

  	
   

  	
  12/31/89 -
  12/31/91

  	
   

  	
  Excess-of-Loss
  Reinsurance Agreement

  
	
  Facultative
  Reinsurance Agreement for a Policy

  	
   

  	
  USF&G

  	
   

  	
  7/1/90

  	
   

  	
  Facultative
  Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  Financial
  Guaranty Insurance Co.

  	
   

  	
  1/1/85 - present

  	
   

  	
  Municipal Bond
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  Radian Asset
  Assurance Inc.

  	
   

  	
  12/31/90 -
  present

  	
   

  	
  Facultative
  Excess-of-Loss Agreement

  



 


25





















 


	
  Facultative Reinsurance
  Agreement for Scheduled Policies

  	
   

  	
  AMBAC Indemnity
  Corp.

  	
   

  	
  9/29/87 -
  present

  	
   

  	
  Municipal Bond
  Facultative Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  MBIA Insurance
  Corp. of Illinois

  	
   

  	
  1/1/85 - present

  	
   

  	
  Agreement

  
	
  Master Facultative
  Reinsurance Agreement

  	
   

  	
  Asset Guaranty
  Insurance Co.

  	
   

  	
  9/30/94 -
  present

  	
   

  	
  Facultative
  Excess-of-Loss Reinsurance Agreement

  
	
  Master
  Facultative Reinsurance Agreement

  	
   

  	
  Ambac Assurance
  Corp.

  	
   

  	
  5/1/00 - present

  	
   

  	
  Master
  Facultative Reinsurance Agreement

  



 










NOTES


 


(1)                                  The
reinsurance agreements generally cover Financial Security Assurance Inc. (“FSA”)
and its subsidiaries.  The first two
schedules include all such reinsurance agreements.  The last two schedules list the agreements
entered into by Capital Guaranty Insurance Company (“Capital Guaranty”) prior
to the merger of its parent with a subsidiary of the parent of FSA.   Capital Guaranty changed its name to
Financial Security Assurance of Maryland Inc. and later was sold to a third
party.  The direct business written by
Capital Guaranty was transferred to FSA and the reinsurance agreements covering
such business were assigned to FSA.


 


(2)                                  The
effective date is the effective date of the reinsurance agreement.  If two dates are given, the second is the
termination, with business ceded under the agreement being continued to be
covered by the agreement on a run-off basis, unless otherwise noted.  “Present” indicates a continuous contract
that is in effect as of the date of this schedule.


 


(3)                                  This
column lists the general reinsurance document. 
Not included in this list are reinsurance memoranda formalizing
particular facultative cessions either pursuant to the terms and conditions of
certain of these agreements or on a stand-alone basis.


 


26





















 


EXHIBIT A


 


NOTICE OF BORROWING


 


[DATE]


 


Bayerische Landesbank, as
Agent

New York Branch

560 Lexington Avenue

New York, NY  10022

Attention:  Mr. Joseph C. Campagna


 


Ladies and Gentlemen:


 


The undersigned, Financial Security Assurance Inc., as
representative of itself and the other entity named as Borrower in the Third
Amended and Restated Credit Agreement, dated as of April 30, 2005 (as
amended, modified and supplemented from time to time, the “Credit Agreement,”
the terms defined therein being used herein as therein defined), among the
Borrowers, the Banks from time to time party thereto, and you individually and
as Agent for such Banks, hereby gives you notice, irrevocably, pursuant to
Section 2.03 of the Credit Agreement, that the Borrowers hereby request a
Borrowing under the Credit Agreement, and in that connection set forth below
the information relating to such Borrowing (the “Proposed Borrowings”) as
required by Section 2.03 of the Credit Agreement:


 


(a)           The Business Day of the Proposed
Borrowing is
                        ,
            .(1)


 


(b)           The aggregate principal amount of the
Proposed Borrowing is $                .


 


[(c)          Schedule 1 hereto contains a
description of the Loss which the proceeds of the Loan will be applied to pay,
including (i) identification of the Insured Obligation which has given
rise to such Loss, (ii) the amount of such Loss, (iii) the amount of
the Permitted Reserves, if any, being established with respect to such Loss and
(iv) the amount of Pledged Premiums, if any, hereafter payable to any
Borrower in respect of such Insured Obligation.](2)


 


[(c))         Schedule 1
hereto contains a description of the Permitted Reserve which the proceeds of
the Loan will be applied to establish, including (i) an identification of
the Insured Obligation which is in default or is anticipated to be in default,
(ii) the amount of such default, and (iii) the amount of Pledged
Premiums, if any, hereafter payable to any Borrower in respect of such Insured
Obligation.](3)


 










(1)  Shall be a Business Day at least two Business Days after
the date hereof.


(2)  Include one version of
subparagraph (c).


(3)  Include one version of subparagraph (c).


 





















 


(d)           The Borrowers hereby represent and
warrant the following:


 


(i)            the Loss Threshold Incurrence Date
has occurred;


 


(ii)           after advancing the funds requested
hereunder, the aggregate principal amount of all Loans made under the Credit
Agreement, without regard to payments or prepayments (other than prepayments of
Loans in respect of Reserves not applied to pay Losses), do not exceed
Cumulative Losses minus the Loss Threshold Amount; and


 


(iii)          the principal amount of the Loan
hereby requested does not exceed the sum of the Unutilized Commitments.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  FINANCIAL SECURITY
  ASSURANCE INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  
						



 


A-2





















 


EXHIBIT B


 


NOTE


 


	
  [AMOUNT]

  	
   

  	
  New York, New York

  
	
   

  	
   

  	
  April 30, 2005

  



 


 


FOR VALUE RECEIVED, FINANCIAL
SECURITY ASSURANCE INC. and FSA INSURANCE COMPANY
(the “Borrowers”) hereby jointly and severally promise to pay to the order of [BANK], (the Bank”), in lawful money of the United States of
America in immediately available funds, at the office of Bayerische Landesbank,
acting through its New York Branch, as Agent, located at 560 Lexington Avenue,
New York, New York 10022, on the Expiry Date (as defined in the
Agreement referred to below) the principal sum of [AMOUNT] constituting the
Bank’s Commitment under the Agreement (defined below) [plus [AMOUNT] constituting
the Bank’s Contingent Commitment under the Agreement] or, if less, the then
unpaid principal amount of all Loans (as defined in the Agreement) made by the
Bank pursuant to the Agreement.


 


The Borrowers, jointly and severally, promise also to
pay interest on the unpaid principal amount hereof in like money at said office
at the rates and at the times provided in Section 2.06 of the Agreement.


 


This Note is one of the Notes referred to in the Third
Amended And Restated Credit Agreement, dated as of April 30, 2005, among
the Borrowers and the Banks from time to time party thereto (including the
Bank), and Bayerische Landesbank, acting through its New York Branch, as
Agent (as amended, modified and supplemented from time to time, the “Agreement”),
and is entitled to the benefits thereof. 
This Note is secured by the Security Agreement (as defined in the
Agreement).  As provided in the
Agreement, this Note is subject to voluntary prepayment and mandatory repayment
prior to the Expiry Date, in whole or in part.


 


In case an Event of Default (as defined in the
Agreement) shall occur and be continuing, the principal of and accrued interest
on this Note may be declared to be due and payable in the manner and with the
effect provided in the Agreement.


 


Except as otherwise provided in the Agreement, the
Borrowers hereby waive presentment, demand, protest or notice of any kind in
connection with this Note.


 


The Bank is authorized to record the date and amount
of each Loan and each payment, prepayment and conversion with respect thereto
on the grid attached hereto or on a continuation thereof which shall be
attached hereto and made a part hereof, and any such notation shall constitute
prima facie evidence of the accuracy of the information so recorded; provided
that the failure to make any such notations shall not affect the validity of
the Borrowers’ obligations hereunder.


 


THE PAYMENT OBLIGATIONS OF THE BORROWERS UNDER
THIS NOTE ARE LIMITED AS PROVIDED IN SECTION 4.05 OF THE AGREEMENT.


 





















 


THIS NOTE IS TRANSFERABLE ONLY IN ACCORDANCE WITH
THE PROVISIONS OF THE AGREEMENT.


 


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


 


THIS NOTE HAS BEEN DULY EXECUTED UNDER SEAL BY THE
DULY AUTHORIZED REPRESENTATIVES OF THE BORROWERS AS OF THE DATE FIRST WRITTEN
ABOVE.


 


 


	
   

  	
  FINANCIAL SECURITY
  ASSURANCE INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FSA INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  
						



 


B-2





















 


GRID


 


	
  Date

  	
   

  	
  Amount of

  Loan

  	
   

  	
  Unpaid

  Principal

  Paid or

  Prepaid

  	
   

  	
  Principal

  Amount

  of Note

  	
   

  	
  Notation

  Made by

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


B-3





















 


EXHIBIT C


 


FORM OF OPINION OF COUNSEL TO
BORROWERS


 





















 


EXHIBIT D


 


OFFICER’S CERTIFICATE


 





















 


EXHIBIT E


 


FORM OF SECURITY AGREEMENT


 





















 


EXHIBIT F


 


ASSIGNMENT AND ASSUMPTION
AGREEMENT


 


Date
                               


 


Reference is made to the Third Amended and Restated
Credit Agreement described in Item 2 of Annex I hereto (as such
Credit Agreement may hereafter be amended, supplemented or otherwise modified
from time to time, the “Credit Agreement”). 
Unless defined in Annex I hereto, terms defined in the Credit
Agreement are used herein as therein defined. 
                                    
(the “Assignor”) and
                              
(the “Assignee”) hereby agree as follows:


 


1.             The
Assignor hereby sells and assigns to the Assignee without recourse and without
representation or warranty (other than as expressly provided herein), and the
Assignee hereby purchases and assumes from the Assignor, that interest in and
to all of the Assignor’s rights and obligations under the Credit Agreement as
of the date hereof which represents the percentage interest specified in
Item 4 of Annex I hereto (the “Assigned Share”) of all of the
outstanding rights and obligations under the Credit Agreement relating to the
facilities listed in Item 4 of Annex I hereto, including, without
limitation, (a) in the case of any assignment of all or any portion of the
Commitment (if not theretofore terminated) (and Contingent Commitment, if any),
all rights and obligations with respect to the Assigned Share of such
Commitment (and Contingent Commitment, if any) and (b) in the case of any
assignment of outstanding Loans, all rights and obligations with respect to the
Assigned Share of such outstanding Loans. 
After giving effect to such sale and assignment, the Assignee’s
Commitment and the amount of the outstanding Loans owing to the Assignee will
be as set forth in Item 4 of Annex I hereto.


 


2.             The
Assignor (a) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim; (b) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit
Agreement or the other Credit Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or
the other Credit Documents or any other instrument or document furnished
pursuant thereto; and (c) makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrowers or any
of the Borrowers’ Subsidiaries or the performance or observance by the
Borrowers or the Borrowers’ Subsidiaries of any of their obligations under the
Credit Agreement or the other Credit Documents to which they are a party or any
other instrument or document furnished pursuant thereto.


 


3.             The
Assignee (a) confirms that it has received a copy of the Credit Agreement
and the other Credit Documents, together with copies of the financial
statements referred to therein and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Assumption Agreement; (b) agrees that it will,
independently and without reliance upon the Assignor or any other Bank and
based on such 


 





















 


documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit Agreement;
(c) confirms that it is an eligible transferee under Section 12.04(b)
of the Credit Agreement; (d) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Bank; and (e) has
delivered the opinion required by Section 12.04(b) of the Credit Agreement[;
and (f) to the extent legally entitled to do so, attaches the forms
described in the penultimate sentence of Section 12.04(b) of the Credit
Agreement(1)].


 


4.             Following
the execution of this Assignment and Assumption Agreement by the Assignor and
the Assignee, an executed original hereof (together with all
attachments) will be delivered to the Agent and the Borrowers.  The effective date of this Assignment and
Assumption Agreement shall be the date set forth in Annex I hereto (the “Settlement
Date”).


 


5.             Upon
the delivery of a fully executed original hereof to the Assignor and the
Borrowers, as of the Settlement Date, (a) the Assignee shall be a party to
the Credit Agreement and, to the extent provided in this Assignment and
Assumption Agreement, have the rights and obligations of a Bank thereunder and
under the other Credit Documents and (b) the Assignor shall, to the extent
provided in this Assignment and Assumption Agreement, relinquish its rights and
be released from its obligations under the Credit Agreement and the other
Credit Documents.


 


6.             It
is agreed that the Assignee shall be entitled to (a) all interest on the
Assigned Share of the Loans at the rates specified in Item 6 of
Annex I and (b) all Commitment Fees (if applicable) on the Assigned
Share of the Commitment at the rate specified in Item 7 of Annex I
hereto; such interest and, if applicable, Commitment Fees at the rate specified
in Item 7 of Annex I hereto, to be payable by the Borrowers directly
to the Assignee.  It is further agreed
that all payments of principal made on the Assigned Share of the Loans which
occur on and after the Settlement Date will be payable directly by the
Borrowers to the Assignee.  Upon the
Settlement Date, the Assignee shall pay to the Assignor an amount specified by
the Assignor in writing which represents the Assigned Share of the principal
amount of the respective Loans made by the Assignor pursuant to the Credit
Agreement which are outstanding on the Settlement Date, net of any closing
costs, and which are being assigned hereunder. 
The Assignor and the Assignee shall make all appropriate adjustments in
payments under the Credit Agreement for periods prior to the Settlement Date
directly between themselves on the Settlement Date.


 


7.             THIS
ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.


 










(1)  Include if the Assignee is organized
under the laws of a jurisdiction outside of the United States.


 


F-2





















 


IN WITNESS WHEREOF, the parties hereto have caused
their duly authorized officers to execute and deliver this Assignment and
Assumption Agreement, as of the date first above written, such execution also
being made on Annex I hereto.


 


	
  Accepted this
             day of

                                      ,
          

  	
  [NAME OF ASSIGNOR], as
  Assignor

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  
	
   

  	
   

  
	
  Consented to as of the
  date hereof:

  	
   

  
	
   

  	
   

  
	
  FINANCIAL SECURITY
  ASSURANCE INC.

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  FSA INSURANCE COMPANY

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  	
   

  
										



 


F-3





















 


ANNEX I


 


1.                                       Borrowers:             Financial Security Assurance Inc.
and FSA Insurance Company


 


2.                                       Name
and Date of Credit Agreement:


 


Third Amended and Restated Credit Agreement, dated as
of April 30, 2005 (the “Credit Agreement”), among the Borrowers, the Banks
from time to time party thereto and Bayerische Landesbank, acting through its
New York Branch, individually and as Agent, as amended, modified and
supplemented to the date hereof.


 


3.                                       Date
of Assignment Agreement:


 


4.                                       Amounts
(as of date of item #3 above):


 


	
   

  	
   

  	
   

  	
   

  	
  Contingent

  Commitment

  	
   

  	
  Commitment

  	
   

  	
  Outstanding

  Principal of

  Loan

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  a.

  	
   

  	
  Aggregate Amount for
  all Banks

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  b.

  	
   

  	
  Assigned Share(1)

  	
   

  	
   

  	
  %

  	
   

  	
  %

  	
   

  	
  %

  
	
  c.

  	
   

  	
  Amount of Assigned
  Share

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  



 


5.                                       Settlement
Date:


 


6.                                       Rate
of Interest to the Assignee:


 


As set forth in Section 2.06 of the Credit
Agreement (unless otherwise agreed to by the Assignor and the Assignee)(2)


 


7.                                       Commitment
Fees:


 


As set forth in Section 3.01(a) of the
Credit Agreement (unless otherwise agreed to by the Assignor and the Assignee)(3)


 










(1)  Percentage taken to 12 decimal places.


(2)  Borrowers and the Agent shall direct
the entire amount of the interest to the Assignee at the rate set forth in
Section 2.06 of the Credit Agreement, with the Assignor and Assignee
effecting the agreed upon sharing of the interest through payments by the
Assignee to the Assignor.


(3)  Borrower and the Agent shall direct the
entire amount of the Commitment Fees to the Assignee at the rate set forth in
Section 3.01(a) of the Credit Agreement, with the Assignor and the
Assignee effecting the agreed upon sharing of Commitment Fees through payment
by the Assignee to the Assignor.


 





















 


8.                                       Notice:


 


	
   

  	
  Assignor:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  
	
   

  	
  Telephone:

  
	
   

  	
  Facsimile:

  
	
   

  	
  Reference:

  
	
   

  
	
   

  	
  Assignee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  
	
   

  	
  Telephone:

  
	
   

  	
  Facsimile:

  
	
   

  	
  Reference:

  
	
   

  
	
  Payment
  Instructions:

  
	
   

  
	
   

  	
  Assignor:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  
	
   

  	
  Reference:

  
	
   

  
	
   

  	
  Assignee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  
	
   

  	
  Reference:

  



 


[Signatures continued on
next page]


 


I-2





















 


[Signature page to
Annex I of Assignment and Assumption Agreement]


 


Accepted and Agreed:


 


 


	
  [NAME OF ASSIGNEE]

  
	
   

  
	
   

  
	
  By

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  
	
   

  
	
   

  
	
  [NAME OF ASSIGNOR]

  
	
   

  
	
   

  
	
  By

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  
					



 


I-3





















 


EXHIBIT G


 


FORM 404(b)(iii) CERTIFICATE


 





















 


EXHIBIT H


 


NOTE REGISTER


 


 


Bank:


 


Commitment:


 


 


	
  Date

  	
   

  	
  Amount of

  Loan

  	
   

  	
  Amount of

  Repayment