EX-10.02



 





EXHIBIT 10.02




LETTER OF CREDIT

REIMBURSEMENT AND PLEDGE AGREEMENT




Dated as of June 8, 2007




among




MONTPELIER REINSURANCE LTD.,




THE LENDERS PARTY HERETO




HSBC BANK USA, NATIONAL ASSOCIATION,

as Syndication Agent




and




BANK OF AMERICA, N.A.,

as Administrative Agent for itself and the

other lending institutions party hereto




 






Banc of America Securities LLC

and

HSBC Securities (USA) Inc.

as Joint Lead Arrangers and Book Managers









 









 











CONTENTS




	 	 	 	 	 	 	 	 	 
	Clause	 	 	Subject Matter	 	Page	 
	1.	 	 	DEFINITIONS AND RULES OF INTERPRETATION
	 	 	1	 
	 	1.1	 	 	Definitions
	 	 	1	 
	 	1.2	 	 	Rules of Interpretation
	 	 	15	 
	 	1.3	 	 	Exchange Rates
	 	 	16	 
	 	1.4	 	 	Times of Day
	 	 	16	 
	 	 	 	 	 
	 	 	 	 
	2.	 	 	COMMITMENTS, LETTERS OF CREDIT
	 	 	16	 
	 	2.1	 	 	Commitments of Lenders
	 	 	16	 
	 	2.2	 	 	Procedures for Issuance and Amendment of Letters of Credit
	 	 	18	 
	 	2.3	 	 	Reliance by Fronting Bank and LC Administrator
	 	 	24	 
	 	2.4	 	 	Fees; Interest
	 	 	25	 
	 	 	 	 	 
	 	 	 	 
	3.	 	 	CERTAIN GENERAL PROVISIONS
	 	 	26	 
	 	3.1	 	 	Payments
	 	 	26	 
	 	3.2	 	 	Taxes, etc
	 	 	29	 
	 	3.3	 	 	Additional Costs, etc
	 	 	29	 
	 	3.4	 	 	Capital Adequacy
	 	 	30	 
	 	3.5	 	 	Certificate
	 	 	31	 
	 	3.6	 	 	Change of Location of Lending Office; Replacement of Lender
	 	 	31	 
	 	 	 	 	 
	 	 	 	 
	4.	 	 	COLLATERAL SECURITY
	 	 	32	 
	 	4.1	 	 	Security of the Borrower
	 	 	32	 
	 	4.2	 	 	Security Interest
	 	 	32	 
	 	4.3	 	 	Additional Obligations
	 	 	33	 
	 	4.4	 	 	Certain Rights and Duties of Administrative Agent and Lenders
	 	 	33	 
	 	4.5	 	 	Power of Attorney, Etc
	 	 	33	 
	 	4.6	 	 	Release of Collateral
	 	 	34	 
	 	 	 	 	 
	 	 	 	 
	5.	 	 	REPRESENTATIONS AND WARRANTIES
	 	 	34	 
	 	5.1	 	 	Corporate Authority
	 	 	35	 
	 	5.2	 	 	Governmental Approvals
	 	 	35	 
	 	5.3	 	 	Financial Statements
	 	 	35	 
	 	5.4	 	 	No Material Adverse Changes, etc
	 	 	36	 






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CONTENTS





	 	 	 	 	 	 	 	 	 
	Clause	 	 	Subject Matter	 	Page	 
	 	5.5	 	 	Franchises, Patents, Copyrights, etc
	 	 	36	 
	 	5.6	 	 	Litigation
	 	 	36	 
	 	5.7	 	 	No Materially Adverse Contracts, etc
	 	 	36	 
	 	5.8	 	 	Compliance with Other Instruments, Laws, etc
	 	 	36	 
	 	5.9	 	 	Tax Status
	 	 	37	 
	 	5.10	 	 	No Event of Default
	 	 	37	 
	 	5.11	 	 	Investment Company Acts
	 	 	37	 
	 	5.12	 	 	Absence of Financing Statements, etc
	 	 	37	 
	 	5.13	 	 	Perfection of Security Interest
	 	 	37	 
	 	5.14	 	 	Use of Proceeds
	 	 	37	 
	 	5.15	 	 	Subsidiaries, etc
	 	 	38	 
	 	5.16	 	 	Disclosure
	 	 	38	 
	 	5.17	 	 	Foreign Assets Control Regulations, Etc
	 	 	38	 
	 	5.18	 	 	Identification Number
	 	 	38	 
	 	 	 	 	 
	 	 	 	 
	6.	 	 	AFFIRMATIVE COVENANTS
	 	 	38	 
	 	6.1	 	 	Punctual Payment
	 	 	39	 
	 	6.2	 	 	Maintenance of Office
	 	 	39	 
	 	6.3	 	 	Records and Accounts
	 	 	39	 
	 	6.4	 	 	Financial Statements, Certificates and Information
	 	 	39	 
	 	6.5	 	 	Notices
	 	 	42	 
	 	6.6	 	 	Legal Existence; Maintenance of Properties
	 	 	42	 
	 	6.7	 	 	Taxes
	 	 	43	 
	 	6.8	 	 	Collateral Coverage
	 	 	43	 
	 	6.9	 	 	Inspection of Properties and Books, etc
	 	 	43	 
	 	6.10	 	 	Compliance with Laws, Contracts, Licenses, and Permits
	 	 	44	 
	 	6.11	 	 	Use of Proceeds
	 	 	44	 
	 	6.12	 	 	Further Assurances
	 	 	44	 
	 	 	 	 	 
	 	 	 	 
	7.	 	 	CERTAIN NEGATIVE COVENANTS
	 	 	44	 
	 	7.1	 	 	Business Activities
	 	 	44	 
	 	7.2	 	 	Fiscal Year
	 	 	44	 






ii









 





CONTENTS





	 	 	 	 	 	 	 	 	 
	Clause	 	 	Subject Matter	 	Page	 
	 	7.3	 	 	Transactions with Affiliates
	 	 	44	 
	 	7.4	 	 	Disposition of Assets
	 	 	45	 
	 	7.5	 	 	Mergers, Consolidations and Sales
	 	 	45	 
	 	7.6	 	 	Liens
	 	 	45	 
	 	7.7	 	 	Investments in Blue Ocean Entities
	 	 	45	 
	 	 	 	 	 
	 	 	 	 
	8.	 	 	FINANCIAL COVENANTS
	 	 	45	 
	 	8.1	 	 	Leverage Ratio
	 	 	45	 
	 	8.2	 	 	A.M. Best Rating
	 	 	46	 
	 	 	 	 	 
	 	 	 	 
	9.	 	 	CONDITIONS TO CLOSING DATE
	 	 	46	 
	 	9.1	 	 	Reimbursement and Pledge Agreement
	 	 	46	 
	 	9.2	 	 	Control Agreement
	 	 	46	 
	 	9.3	 	 	Certified Copies of Governing Documents
	 	 	46	 
	 	9.4	 	 	Corporate or Other Action
	 	 	46	 
	 	9.5	 	 	Incumbency Certificate
	 	 	46	 
	 	9.6	 	 	Pledged Collateral Certificate
	 	 	46	 
	 	9.7	 	 	Opinion of Counsel
	 	 	46	 
	 	9.8	 	 	Payment of Fees and Expenses
	 	 	47	 
	 	9.9	 	 	No Material Adverse Change
	 	 	47	 
	 	9.10	 	 	Representations True; No Event of Default
	 	 	47	 
	 	9.11	 	 	Process Agent Letter
	 	 	47	 
	 	 	 	 	 
	 	 	 	 
	10.	 	 	CONDITION TO ALL CREDIT EXTENSIONS
	 	 	47	 
	 	10.1	 	 	Representations True; No Event of Default
	 	 	47	 
	 	10.2	 	 	No Legal Impediment
	 	 	47	 
	 	10.3	 	 	Documents
	 	 	47	 
	 	10.4	 	 	Pledged Collateral Certificate
	 	 	48	 
	 	10.5	 	 	Collateral Coverage Amount
	 	 	48	 
	 	 	 	 	 
	 	 	 	 
	11.	 	 	EVENTS OF DEFAULT; ACCELERATION; ETC
	 	 	48	 
	 	11.1	 	 	Events of Default and Acceleration
	 	 	48	 
	 	 	 	 	 
	 	 	 	 
	12.	 	 	THE ADMINISTRATIVE AGENT
	 	 	52	 






iii









 





CONTENTS





	 	 	 	 	 	 	 	 	 
	Clause	 	 	Subject Matter	 	Page	 
	 	12.1	 	 	Authorization
	 	 	52	 
	 	12.2	 	 	Employees and Administrative Agents
	 	 	53	 
	 	12.3	 	 	No Liability
	 	 	53	 
	 	12.4	 	 	No Representations
	 	 	53	 
	 	12.5	 	 	Payments
	 	 	54	 
	 	12.6	 	 	Holders of Participations
	 	 	55	 
	 	12.7	 	 	Indemnity
	 	 	55	 
	 	12.8	 	 	Administrative Agent as Lender
	 	 	55	 
	 	12.9	 	 	Resignation
	 	 	55	 
	 	12.10	 	 	Administrative Agent May File Proofs of Claim
	 	 	56	 
	 	12.11	 	 	Notification of Defaults and Events of Default
	 	 	57	 
	 	12.12	 	 	Duties in the Case of Enforcement
	 	 	57	 
	 	 	 	 	 
	 	 	 	 
	13.	 	 	SUCCESSORS AND ASSIGNS
	 	 	57	 
	 	13.1	 	 	General Conditions
	 	 	57	 
	 	13.2	 	 	Assignments
	 	 	58	 
	 	13.3	 	 	Register
	 	 	59	 
	 	13.4	 	 	Participations
	 	 	59	 
	 	13.5	 	 	Payments to Participants
	 	 	59	 
	 	13.6	 	 	Miscellaneous Assignment Provisions
	 	 	59	 
	 	13.7	 	 	Assignee or Participant Affiliated with the Borrower
	 	 	60	 
	 	 	 	 	 
	 	 	 	 
	14.	 	 	PROVISIONS OF GENERAL APPLICATIONS
	 	 	60	 
	 	14.1	 	 	Authorization to File Financing Statements
	 	 	60	 
	 	14.2	 	 	Setoff
	 	 	60	 
	 	14.3	 	 	Expenses
	 	 	61	 
	 	14.4	 	 	Indemnification
	 	 	61	 
	 	14.5	 	 	Payments by Borrower with respect to Indemnified Persons
	 	 	62	 
	 	14.6	 	 	Survival of Covenants, Etc
	 	 	63	 
	 	14.7	 	 	Notices and Other Communications; Facsimile Copies
	 	 	63	 
	 	14.8	 	 	Miscellaneous
	 	 	65	 
	 	14.9	 	 	Successors and Assigns
	 	 	65	 






iv









 





CONTENTS





	 	 	 	 	 	 	 	 	 
	Clause	 	 	Subject Matter	 	Page	 
	 	14.10	 	 	Choice of Law/Binding Effect
	 	 	65	 
	 	14.11	 	 	WAIVER OF JURY TRIAL
	 	 	65	 
	 	14.12	 	 	Delivery of Additional Documents
	 	 	66	 
	 	14.13	 	 	Confidentiality
	 	 	66	 
	 	14.14	 	 	Consents, Amendments, Waivers, Etc
	 	 	66	 
	 	14.15	 	 	Agent for Service
	 	 	68	 
	 	14.16	 	 	Conversion
	 	 	68	 
	 	14.17	 	 	Counterparts
	 	 	69	 
	 	14.18	 	 	Interest Rate Limitation
	 	 	69	 
	 	14.19	 	 	Integration
	 	 	69	 
	 	14.20	 	 	Severability
	 	 	70	 
	 	14.21	 	 	Tax Forms
	 	 	70	 
	 	14.22	 	 	No Advisory or Fiduciary Responsibility
	 	 	71	 
	 	14.23	 	 	USA PATRIOT Act Notice
	 	 	71	 







v









 








	 	 	 
	Exhibits

	 
	 	 
	Exhibit A

	 	Form of Assignment and Assumption
	Exhibit B

	 	Form of Control Agreement
	Exhibit C

	 	Form of Compliance Certificate
	Exhibit D

	 	Form of Pledged Collateral Certificate
	Exhibit E

	 	Form of Several Letter of Credit
	 
	 	 
	Schedules

	 
	 	 
	Schedule 1.1

	 	Commitments
	Schedule 1.2

	 	Collateral Coverage Amount Calculation
	Schedule 2.1.1

	 	Existing Letters of Credit
	Schedule 5.6

	 	Litigation
	Schedule 5.15

	 	Subsidiaries
	Schedule 14.7

	 	Address for Notices






 









 






LETTER OF CREDIT

REIMBURSEMENT AND PLEDGE AGREEMENT




     This LETTER OF CREDIT REIMBURSEMENT AND PLEDGE AGREEMENT is made as of June 8, 2007, by and
among Montpelier Reinsurance Ltd. (the “Borrower”), a limited liability company duly
incorporated as an exempted company under the laws of Bermuda, having its registered office at
Montpelier House, 94 Pitts Bay Road, Hamilton, Bermuda HM HX, the lending institutions party hereto
(the “Lenders”), Bank of America, N.A., a national banking association, as fronting bank,
letter of credit administrator and as administrative agent for itself and such other lending
institutions (the “Administrative Agent”).



     The Borrower has requested the Lenders to provide a letter of credit facility and the Lenders
are willing to do so on the terms and conditions set forth herein.



     In consideration of the mutual agreements set forth herein, the parties hereto agree as
follows:



1. DEFINITIONS AND RULES OF INTERPRETATION.




     1.1 Definitions.



     The following terms shall have the meanings set forth in this §1 or elsewhere in the
provisions of this Reimbursement and Pledge Agreement referred to below:



     ABS. Any fixed-income instrument that entitles the holder of, or beneficial owner
under, the instrument to the whole or any part of the rights or entitlements of a holder of a
receivable or other asset and any other rights or entitlements in respect of a pool of receivables
or other assets or any money payable by obligors under those receivables or other assets (whether
or not the money is payable to the holder of, or beneficial owner under, the instrument on the same
terms and conditions as under the receivables or other assets) in relation to receivables or other
assets; provided however, such receivables or assets shall be limited to automobile loans, credit
card receivables and home equity loans and such other ABS assets as may be acceptable to the
Administrative Agent.



     Adjusted Fair Market Value. With respect to any Eligible Collateral, an amount equal
to the product of the Fair Market Value of such Eligible Collateral and the applicable percentage
with respect to such Eligible Collateral as set forth on Schedule 1.2.



     Administrative Agent. Bank of America, acting as agent for the Lenders, and each
other Person appointed as the successor Administrative Agent in accordance with §12.9.



     Administrative Agent’s Office. The Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 14.7, or such other address as the
Administrative Agent may from time to time notify the Borrower and the Lenders.



     Administrative Agent’s Special Counsel. Mayer, Brown, Rowe & Maw LLP or such other
counsel as may be approved by the Administrative Agent.



 









 





     Administrative Questionnaire. An Administrative Questionnaire in a form supplied by
the Administrative Agent.



     Affiliate. Any Person that would be considered to be an affiliate of any other Person
under Rule 144(a) of the Rules and Regulations promulgated under the Securities Act of 1933, as
amended, if such Person were issuing securities or any Person which, directly or
indirectly, controls, is controlled by or is under common control with such Person. “Control” of a
Person means the power, directly or indirectly, (a) to vote ten percent (10%) or more of the
Capital Stock (on a fully diluted basis) of such Person having ordinary voting power for the
election of directors, managing members or general partners (as applicable); or (b) to direct or
cause the direction of the management and policies of such Person (whether by contract or
otherwise).



     Agent for Service. See §14.15.



     Alternative Currency. Canadian Dollars and Pounds Sterling.



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



     A.M. Best Rating. The financial strength rating issued with respect to the Borrower
by A.M. Best Company.



     Applicable Issuing Party. In the case of Fronted Letters of Credit, the Fronting Bank
and in the case of Several Letters of Credit, the LC Administrator.



     Applicable Issuing Party’s Office. With respect to an Applicable Issuing Party, the
address and, as appropriate, account set forth for such Applicable Issuing Party on Schedule
14.7, or such other address as such Applicable Issuing Party may from time to time notify the
Borrower and the Lenders.



     Approved Fund. Any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.



     Arrangers. Banc of America Securities LLC and HSBC Securities (USA) Inc.



     Assignment and Assumption. An assignment and assumption entered into by a Lender and
an Eligible Assignee (with the consent of any party whose consent is required by §13.2), and
accepted by the Administrative Agent, in substantially the form of Exhibit A or any other form
approved by the Administrative Agent.



     Balance Sheet Date. December 31, 2006.



     Bank of America. Bank of America, N.A. and its successors.



2









 





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



     Borrower. As defined in the preamble hereto.



     Borrower Reinsurance Agreement. Any arrangement whereby the Borrower or any other
Insurance Subsidiary, as reinsurer, agrees to indemnify any other insurance or reinsurance company
against all or a portion of the insurance or reinsurance risks underwritten by such insurance or
reinsurance company under any insurance or reinsurance policy.



     Business Day. Any day other than a Saturday, Sunday or other day on which commercial
banks are authorized or permitted to close under the laws of, or are in fact closed in, Bermuda or
the state where the Administrative Agent’s Office with respect to Obligations denominated in
Dollars is located.



     Canadian Dollars or C$. The lawful currency of Canada.



     Capital Lease Obligation. As to any Person, the obligations of such Person to pay
rent or other amounts under any lease which is required to be classified and accounted for as a
capital lease on a balance sheet of such Person in accordance with GAAP. For purposes of this
Reimbursement and Pledge Agreement, the amount of such Capital Lease Obligation shall be the
capitalized amount thereof determined in accordance with GAAP.



     Capital Stock. Any and all shares, interests, share capital, participations or other
equivalents (however designated) of capital stock of a corporation or company, any and all
equivalent ownership interests in a Person (other than a corporation) and any and all warrants,
rights or options to purchase any of the foregoing.



     Cash. Dollars held by the Borrower in the Collateral Account.



     Cash Equivalents. At any time:



     (a) commercial paper, maturing not more than one year from the date of issue, which is issued
by




     (i) a corporation (except an Affiliate of the Borrower) rated at least A-1 by S&P or
P-1 by Moody’s or the equivalent rating from another nationally recognized agency, or




     (ii) any Lender (or its holding company); and



3









 





          (b) any money market fund, maturing not more than two years after the date of issue, which is
issued by either





     (i) a financial institution which is rated at least AA- by S&P or Aa3 by Moody’s, or




     (ii) any Lender.



     Change in Control. Any of (a) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or substantially all, of the assets of the
Borrower occurs; (b) any “person” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”) other than the Parent is or becomes, directly
or indirectly, the “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of
securities of the Borrower that represent 51% or more of the combined voting power of the
Borrower’s then outstanding securities; (c) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors of the Borrower (together
with any new or replacement directors whose election by the Board of Directors or whose nomination
by the stockholders of the Borrower was approved by a vote of a majority of the Directors of the
Borrower then still in office who are either directors or replacement directors at the beginning of
such period or whose election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Borrower’s Board of Directors then in office; or (d) the
Parent ceases to (x) be the single largest shareholder of the Borrower or (y) be directly or
indirectly, the “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of securities
of the Borrower that represent 10% or more of the combined voting power of the Borrower’s then
outstanding securities.



     Closing Date. The first date on which the conditions set forth in §10 have been
satisfied.



     Code. The Internal Revenue Code of 1986, as amended from time to time, and
regulations promulgated thereunder.



     Collateral Account. The Borrower’s custodial securities account no. 251512 maintained
at the Custodian and any replacement, additional or successor account maintained with a Custodian
and subject to the terms of a Control Agreement.



     Collateral Coverage Amount. On any date, an amount equal to the sum of the Adjusted
Fair Market Value of all Eligible Collateral.



     Combined or combined. With reference to the accounts of the Parent and its
Subsidiaries, combined in accordance with GAAP.



     Commitment. The amount set forth on Schedule 1.1 hereto or in the Assignment
and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as the amount
of such Lender’s commitment to participate in the issuance, extension and renewal of Letters of
Credit for the account of the Borrower, as the same may be reduced from time to time; or if such
commitment is terminated pursuant to the provisions hereof, zero.



     Commitment Fee. See §2.4.1.



4









 





     Commitment Percentage. With respect to each Lender, the percentage (carried out to
the ninth decimal place) of the Total Commitment represented by such Lender’s Commitment.



     Commitment Termination Date. The earliest of (a) June 8, 2012 and (b) the occurrence
of the Commitment Termination Event; provided, however, that, if such date is not a Business Day,
the Commitment Termination Date shall be the next preceding Business Day.



     Commitment Termination Event. The earliest to occur of (a) the date of termination of
the Total Commitment pursuant to §2.1.3 and (b) the date of termination of the Commitment of each
Lender pursuant to §11.1.



     Compliance Certificate. See §6.4(d).



     Consolidated Debt. The consolidated Debt (excluding Hedging Obligations) of the
Parent and its Subsidiaries.



     Consolidated Net Worth. The Net Worth of the Parent and its Subsidiaries on a
consolidated basis.



     Contingent Liability. Any agreement, undertaking or arrangement by which any Person
(outside the ordinary course of business) guarantees, endorses, acts as surety for or otherwise
becomes or is contingently liable for (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment by, to supply funds to, or otherwise to invest in, a debtor, or otherwise
to assure a creditor against loss) the Debt, obligation or other liability of any other Person
(other than by endorsements of instruments in the course of collection), or for the payment of
dividends or other distribution upon the shares of any other Person or undertakes or agrees
(contingently or otherwise) to purchase, repurchase, or otherwise acquire or become responsible for
any Debt, obligation or liability or any security therefor, or to provide funds for the payment or
discharge thereof (whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or to maintain solvency, assets, level of income, or other financial condition of any
other Person, or to make payment or transfer property to any other Person other than for fair value
received; provided, however, that obligations of each of the Borrower and the Insurance
Subsidiaries under Primary Policies or Borrower Reinsurance Agreements which are entered into in
the ordinary course of business (including security posted by the Borrower and each of the
Insurance Subsidiaries in the ordinary course of its business to secure obligations thereunder)
shall not be deemed to be Contingent Liabilities of such Insurance Subsidiary or the Borrower for
the purposes of this Reimbursement and Pledge Agreement. The amount of any Person’s obligation
under any Contingent Liability shall (subject to any limitation set forth therein) be deemed to be
the lesser of (i) the outstanding principal amount (or maximum permitted principal amount, if
larger) of the Debt, obligation or other liability guaranteed or supported thereby or (ii) the
maximum stated amount so guaranteed or supported.



     Control Agreement. That certain Control Agreement, dated as of June 8, 2007 among the
Administrative Agent, the Borrower and the Custodian in the form attached hereto as Exhibit B or
such other control agreement in form and substance reasonably satisfactory to the Administrative
Agent as the Administrative Agent, the Borrower and a Custodian may enter into from time to time.



5









 





     Consolidated or consolidated. With reference to the accounts of the Parent and its
Subsidiaries, consolidated in accordance with GAAP.



     Corporate Securities. Publicly traded debt securities (other than preferred stock)
issued by a corporation organized in the United States.



     Credit Extension. The issuance, extension, amendment or renewal of a Letter of
Credit.



     Cure Contribution. Capital contributions or other equity infusions to the Parent made
on or before the 30th day after the date the Parent has failed to comply with the
covenant set forth in §8.1, which cures such default.



     Custodial Lien and Set-off Rights. See §5.13.



     Custodian. The Bank of New York and any other or successor custodian approved by the
Administrative Agent.



     Debt. With respect to any Person, at any date, without duplication, (a) all
obligations of such Person for borrowed money or in respect of loans or advances; (b) all
obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (c)
all obligations in respect of letters of credit which have been drawn but not reimbursed by the
Person for whose account such letter of credit was issued within the later of (x) three (3)
Business Days and (y) the applicable cure period and bankers’ acceptances issued for the account of
such Person; (d) all Capital Lease Obligations of such Person; (e) all Hedging Obligations of such
Person; (f) to the extent required to be included as liabilities in accordance with GAAP, all
obligations of such Person to pay the deferred purchase price of property or services; (g) Debt of
such Person secured by a Lien on property owned or being purchased by such Person (including Debt
arising under conditional sales or other title retention agreements) whether or not such Debt is
limited in recourse; (h) any Debt of another Person secured by a Lien on any assets of such first
Person, whether or not such Debt is assumed by such first Person (it being understood that if such
Person has not assumed or otherwise become personally liable for any such Debt, the amount of the
Debt of such Person in connection therewith shall be limited to the lesser of the face amount of
such Debt and the fair market value of all property of such Person securing such Debt); (i) any
Debt of a partnership in which such Person is a general partner unless such debt is nonrecourse to
such Person; and (j) all Contingent Liabilities of such Person in connection with the foregoing;
provided that, notwithstanding anything to contrary contained herein, Debt shall not include (x)
unsecured current liabilities incurred in the ordinary course of business and paid within ninety
(90) days after the due date (unless contested diligently in good faith by appropriate proceedings
and, if requested by the Administrative Agent, reserved against in conformity with GAAP) other than
liabilities that are for money borrowed or are evidenced by bonds, debentures, notes or other
similar instruments or (y) any obligations of such Person under any Borrower Reinsurance Agreement
or any Primary Policy.



     Default. Any event which would, with the giving of notice or the lapse of time,
constitute an Event of Default.



     Default Rate. (a) When used with respect to Obligations other than Letter of Credit
Fees, an interest rate equal to (i) the Base Rate plus (ii) 2% per annum; and (b) when used with
respect



6









 







to Letter of Credit Fees, a rate equal to the applicable Letter of Credit Fee plus 2% per
annum, in all cases to the fullest extent permitted by applicable laws.



     Delinquent Lender. See §12.5.3.



     Dollars or $. Dollars in lawful currency of the United States of America.



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



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



     Eligible Collateral. ABSs, Cash, Cash Equivalents, Corporate Securities, Federal
Agency Debt, Government Debt, MBS Investments and Municipal Securities which (a) are denominated in
Dollars, (b) except in the case of Cash and Cash Equivalents, have the required rating and/or
maximum tenor as set forth on Schedule 1.2, (c) are capable of being marked to market on a
daily basis and (d) are held in the Collateral Account.



     Event of Default. See §11.1.



     Existing Letters of Credit. See §2.1.1.



     Fair Market Value. (a) With respect to any Government Debt, Federal Agency Debt, or
other publicly-traded security (other than those set forth in clause (b)) the closing price for
such security on Bloomberg, Inc. or, if Bloomberg, Inc. is not available, another quotation service
reasonably acceptable to the Administrative Agent, (b) with respect to Cash and Cash Equivalents,
the amounts thereof, and (c) with respect to any Eligible Collateral (other than those set forth in
clauses (a), and (b)), the price for such Eligible Collateral on the date of calculation obtained
from a generally recognized source approved by the Administrative Agent or the most recent bid
quotation from such approved source (or, if no generally recognized source exists as to such
Eligible Collateral, any other source specified by the Borrower to which the Administrative Agent
does not reasonably object).



     Federal Agency. Any of the following agencies of the federal government of the United
States: (a) Government National Mortgage Association; (b) the Export-Import Bank of the United
States; (c) the Farmers Home Administration, an agency of the United States Department of
Agriculture; (d) the United States General Services Administration; (e) the United States
Maritime Administration; (f) the United States Small Business Administration; (g) the



7









 







Commodity Credit Corporation; (h) the Rural Electrification Administration; (i) the Rural
Telephone Bank; (j) Washington Metropolitan Area Transit Authority; (k) the Federal Home Loan
Mortgage Corporation; (l) the Federal National Mortgage Association; (m) the Federal Housing
Finance Board; (n) the Federal Home Loan Bank; and (o) such other federal agencies as are
reasonably acceptable to the Administrative Agent.



     Federal Agency Debt. Evidence of Freely Transferable Debt issued by a Federal Agency.



     Federal Funds Rate. For any day, the rate per annum equal to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative Agent.



     Fee Letter. The fee letter dated as of May 10, 2007 among the Borrower, the
Administrative Agent and Banc of America Securities LLC.



     Fees. The Letter of Credit Fee and the Commitment Fee.



     Financial Affiliate. A Subsidiary of the bank holding company controlling any Lender,
which Subsidiary is engaging in any of the activities permitted by §4(e) of the Bank Holding
Company Act of 1956 (12 U.S.C. §1843).



     Freely Transferable. Securities which are freely transferable and traded in
established and recognized markets and as to which there are readily available price quotations.



     Fronted Letters of Credit. Any Letter of Credit which is issued by the Fronting Bank
pursuant to § 2.1.1.



     Fronting Bank. Bank of America in its capacity as an issuer of (a) Fronted Letters of
Credit and (b) Several Letters of Credit on behalf of each Participating Bank.



     Fund. Any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business.



     GAAP or generally accepted accounting principles. (a) When used in §6, whether
directly or indirectly through reference to a capitalized term used therein, means (i) principles
that are consistent with the principles promulgated or adopted by the Financial Accounting
Standards Board and its predecessors, in effect for the fiscal year ended on the Balance Sheet
Date, and (ii) to the extent consistent with such principles, the accounting practice of the Parent
reflected in its financial statements for the year ended on the Balance Sheet Date, and (b) when
used in general, other than as provided above, means principles that are (i) consistent with the



8









 







principles promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, as in effect from time to time, and (ii) consistently applied with past financial
statements of the Parent adopting the same principles, provided that in each case referred to in
this definition of “GAAP” a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified opinion (other than
a qualification regarding changes in GAAP) as to financial statements in which such principles have
been properly applied.



     Governing Documents. With respect to any Person, its certificate or articles of
incorporation, memorandum of association, certificate of formation, or, as the case may be,
certificate of limited partnership, its by-laws, operating agreement or, as the case may be,
partnership agreement or other constitutive documents and all shareholder agreements, voting trusts
and similar arrangements applicable to any of its Capital Stock.



     Governmental Authority. Any foreign, federal, state, regional, local, municipal or
other government, or any department, commission, board, bureau, agency, public authority or
instrumentality thereof or any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government or any court or arbitrator.



     Government Debt. Freely Transferable Debt issued by the U.S. Treasury Department or
backed by the full faith and credit of the United States.



     Hedging Obligations. With respect to any Person, the liability of such Person under
any futures contract or options contract, interest rate swap agreements and interest rate collar
agreements and all other agreements or arrangements (other than Retrocession Agreements), designed
to protect such Person against fluctuations in interest rates or currency exchange rates. Debt
under a Hedging Obligation shall be the amount of such Person’s net obligation, if any, under each
hedging agreement (determined on the mark-to-market value for such agreement based upon a readily
available quotation provided by a recognized dealer in such type of hedging agreement).



     Hybrid Securities. Any securities directly or indirectly issued by the Parent or any
trust or other entity formed by the Parent that are treated as hybrid capital by S&P including,
without limitation, the $100,000,000 trust preferred securities issued on January 6, 2006.



     Indemnified Persons. See §14.5(a)



     Indemnitee. See §14.4



     Individual Outstandings. As to any Lender, such Lender’s Commitment Percentage of the
Total Outstandings as of such date.



     Ineligible Securities. Securities which may not be underwritten or dealt in by member
banks of the Federal Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C. §24,
Seventh), as amended.



9









 





     Insurance Subsidiary. The Borrower and any other Subsidiary of the Parent created
after the Closing Date which is licensed by any Governmental Authority to engage in the insurance
business.



     Issuer. With respect to any Letter of Credit, the Person or Persons who have issued
such Letter of Credit. In the case of Fronted Letters, the Fronting Bank shall be the Issuer. In
the case of Several Letters of Credit, each Lender who is shown on such Several Letter of Credit as
having a “Commitment Share” shall be an Issuer.



     LC Administrator. Bank of America’s Letter of Credit Operations located at One Fleet
Way, Scranton, PA 18507, together with any replacement LC Administrator arising under Section 12.9.



     Lender Affiliate. With respect to any Lender, (a) an Affiliate of such Lender or (b)
any Approved Fund.



     Lenders. The lending institutions executing this Reimbursement and Pledge Agreement
as a Lender and any other Person who becomes an assignee of any rights and obligations of a Lender
pursuant to §13.



     Letters of Credit. See §2.1.1.



     Letter of Credit Application. An application and agreement for the issuance and
amendment of a Letter of Credit in the form from time to time in use by the Applicable Issuing
Party.



     Letter of Credit Fee. See §2.4.2.



     Letter of Credit Participation. See §2.2.3.



     Leverage Ratio. The ratio, expressed as a percentage, of (a) Consolidated Debt to (b)
Consolidated Net Worth plus Consolidated Debt.



     Lien. When used with respect to any Person, any interest in any real or personal
property, asset or other right held, owned or being purchased or acquired by such Person for its
own use, consumption or enjoyment which secures payment or performance of any obligation and shall
include any mortgage, lien, pledge, encumbrance, charge, retained title of a conditional vendor or
lessor, or other security agreement, mortgage, deed of trust, chattel mortgage, assignment, pledge,
retention of title, financing or similar statement or notice, or other encumbrance arising as a
matter of law, judicial process or otherwise.



     Lloyd’s. Lloyd’s of London or members of its syndicate.



     Loan Documents. This Reimbursement and Pledge Agreement, the Letter of Credit
Applications, the Letters of Credit, the Fee Letter and each Control Agreement.



10









 





     Material Adverse Effect. With respect to any event or occurrence of whatever nature
(including any adverse determination in any litigation, arbitration or governmental investigation
or proceeding) which results in:



     (a) a material adverse effect on the business, properties, condition (financial or otherwise),
assets, operations or income of (i) the Borrower individually, (ii) the Borrower and its
Subsidiaries, taken as a whole or (iii) the Parent and its Subsidiaries, taken as a whole;



     (b) a material adverse effect on the ability of the Borrower to perform any of its Obligations
under any of the Loan Documents to which it is a party; or



     (c) any impairment of the validity, binding effect or enforceability of this Reimbursement and
Pledge Agreement or any of the other Loan Documents (other than a Letter of Credit), any impairment
of the rights, remedies or benefits available to the Administrative Agent or any Lender under any
Loan Document or any impairment of the attachment, perfection or priority of any lien of the
Administrative Agent under this Reimbursement and Pledge Agreement other than (i) liens arising by
operation of law, so long as the aggregate obligations secured thereby do not exceed $1,000,000 and
(ii) the Custodial Lien and Set-Off Rights.



In determining whether any individual event has a Material Adverse Effect, notwithstanding that
such event does not of itself have such effect, a Material Adverse Effect shall be deemed to have
occurred if the cumulative effect of such event and all other then existing events results in a
Material Adverse Effect.



     Material Party. Each of (a) the Borrower, (b) any Insurance Subsidiary of the
Borrower, and (c) any Subsidiary of the Borrower which is not an Insurance Subsidiary whose (i)
total assets are 15% or more of the total assets of the Borrower and its consolidated Subsidiaries
(including such Subsidiary) in each case as set forth on the most recent fiscal year end balance
sheet of such Subsidiary and the Borrower and its consolidated Subsidiaries, respectively, and
computed in accordance with GAAP, and (ii) total revenues are 15% or more of the total revenues of
the Borrower and its consolidated Subsidiaries (including such Subsidiary), in each case as set
forth on the most recent fiscal year-end income statements of such Subsidiary and the Borrower and
its consolidated Subsidiaries, respectively, and computed in accordance with GAAP.



     Maximum Drawing Amount. The maximum aggregate amount that the beneficiaries may at
any time draw under outstanding Letters of Credit, as such aggregate amount may be reduced from
time to time pursuant to the terms of the Letters of Credit.



     MBS (Agency Pass-Throughs). Any instrument, issued by the Federal National Mortgage
Association, the Government National Mortgage Association or the Federal Home Loan Mortgage
Corporation, that entitles the holder of, or beneficial owner under, the instrument to the whole or
any part of the rights or entitlements of a mortgagee and any other rights or entitlements in
respect of a pool of mortgages or any money payable by mortgagors under those mortgages in relation
to real estate mortgages, and the money payable to the holder of, or beneficiary owner under, the
instrument is based on actual or scheduled payments on the underlying mortgages.



11









 





     MBS (Agency CMOs). Collateralized mortgage obligations or real estate mortgage
investment conduit pass through securities, in any case issued by the Federal National Mortgage
Association, the Government National Mortgage Association or the Federal Home Loan Mortgage
Corporation.



     MBS Investments. MBS (Agency CMOs) which constitute TACs, PACs and Sequentials and
shall not include Support Tranches and MBS (Agency Pass-Throughs). The maximum weighted average
life of any single MBS Investment shall not exceed 10 years.



     Municipal Securities. Publicly traded debt securities issued by any state or
municipality located in the United States.



     NAIC Approved Bank. Any bank listed on the most current list of banks approved by the
Securities Valuation Office of the National Association of Insurance Commissioners and acting
through the branch so listed.



     Net Worth. With respect to any Person, the consolidated net worth of such Person
calculated in accordance with GAAP.



     Notice of Exclusive Control. A written notice, in the form attached to the Control
Agreement as Exhibit B, given by the Administrative Agent to the Custodian upon an Event of Default
that the Administrative Agent is exercising sole and exclusive control of the Collateral Account
and the Pledged Collateral credited thereto.



     Obligations. All indebtedness, obligations and liabilities of the Borrower to any of
the Lenders, the LC Administrator, the Fronting Bank and the Administrative Agent, individually or
collectively, existing on the date of this Reimbursement and Pledge Agreement or arising
thereafter, direct or indirect, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising or incurred under this Reimbursement and Pledge
Agreement or any of the other Loan Documents or in respect of any Reimbursement Obligations
incurred under any Letter of Credit or other instrument at any time evidencing any thereof and
arising by contract, operation of law or otherwise.



     Participant. See §13.4.



     Participating Bank. From time to time with respect to Several Letters of Credit, each
Lender for whose Commitment Percentage the Fronting Bank has agreed to be liable.



     Parent. Montpelier Re Holdings Ltd., a Bermuda holding company.



     Person. Any individual, corporation, limited liability company partnership, limited
liability partnership, firm, trust, joint venture, joint stock company, other unincorporated
association, or other legal entity, and any Governmental Authority, each whether acting in an
individual, fiduciary or other capacity.



     Platform is defined in §6.4.



     Pledged Collateral. See §4.1.



12









 





     Pledged Collateral Certificate. See §6.4(e).



     Pounds Sterling or £. The lawful currency of the United Kingdom of Great
Britain and Northern Ireland.



     Primary Policies. Any insurance policies issued by the Borrower or any other
Insurance Subsidiary.



     Register. See §13.3.



     Release Amount. See §4.7.



     Reimbursement and Pledge Agreement. This Letter of Credit Reimbursement and Pledge
Agreement.



     Reimbursement Obligation. The Borrower’s obligation to reimburse the Applicable
Issuing Party and the Lenders on account of any drawing under any Letter of Credit as provided in
§2.2.



     Related Parties. With respect to any specified Person, such Person’s Affiliates and
the respective directors, officers, employees, agents and advisors of such Person and such Person’s
Affiliates.



     Required Lenders. As of any date, the Lenders whose aggregate Commitments constitutes
at least fifty-one percent (51%) of the Total Commitment or, if the Commitments have been
terminated, the Lenders whose Individual Outstandings constitute at least fifty-one percent (51%)
of the Total Outstandings, provided that the Commitment of, and the Individual Outstandings held or
deemed held by, any Delinquent Lender shall be excluded for purposes of making a determination of
Required Lenders.



     Responsible Officer. The president, chief executive officer, chief financial officer,
chief operating officer, treasurer, controller or any vice-president of the Borrower.



     Retrocession Agreements. Any agreement, treaty, certificate or other arrangement
whereby the Borrower or any other Insurance Subsidiary cedes to another insurer all or part of the
Borrower’s or such Insurance Subsidiary’s liability under a policy or policies of insurance
reinsured by the Borrower or such Insurance Subsidiary.



     Revaluation Date. With respect to any Letter of Credit, each of the following: (i)
each date of issuance or extension or renewal of a Letter of Credit denominated in an Alternative
Currency, (ii) each date of an amendment of any such Letter of Credit having the effect of
increasing the amount thereof (solely with respect to the increased amount), (iii) each date of any
payment by the Fronting Bank under any Letter of Credit denominated in an Alternative Currency,
(iv) in the case of the Existing Letters of Credit, the Closing Date, (v) the first Business Day of
each month and (vi) such additional dates as the Administrative Agent or the Fronting Bank shall
determine or the Required Lenders shall require.



     S&P. Standard & Poor’s Ratings Group.



13









 





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



     Several Letters of Credit. Letters of Credit issued severally by the Lenders
substantially in the form of Exhibit E with such changes therein as the LC Administrator
determines is not adverse to the interests of the Lenders.



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



     Subsidiary. Any corporation, association, trust, or other business entity of which
the designated parent shall at any time own directly or indirectly through a Subsidiary or
Subsidiaries at least a majority (by number of votes) of the outstanding Voting Stock; provided,
however, that Blue Ocean Re Holdings Ltd. will not be considered a Subsidiary.



     Total Commitment. The sum of the Commitments of the Lenders, as in effect from time
to time.



     Total Outstandings. The sum of the Dollar Equivalent of the Maximum Drawing Amount
plus the Dollar Equivalent of the total Unpaid Reimbursement Obligation with respect to Letters of
Credit on such date after giving effect to any Credit Extensions pursuant to §2.1.1 and repayment
of Reimbursement Obligations with respect to Letters of Credit on such date.



     Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which the Borrower
does not reimburse the Applicable Issuing Party and/or the Lenders, as applicable on the date
specified in, and in accordance with, §2.2; provided however that solely for purposes of
calculating the Total Outstandings and any component thereof, Reimbursement Obligations which have
been paid by application of proceeds of Pledged Collateral by the Administrative Agent shall not
constitute Unpaid Reimbursement Obligations.



     Voting Stock. Stock or similar interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders, to vote for the
election of a majority of the directors (or persons performing similar functions) of the
corporation, association, trust or



14









 







other business entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.



     1.2 Rules of Interpretation.



          (a) A reference to any document or agreement shall include such document or agreement as
amended, modified or supplemented from time to time in accordance with its terms or the terms of
this Reimbursement and Pledge Agreement.




          (b) The singular includes the plural and the plural includes the singular.




          (c) A reference to any law includes any amendment or modification to such law.




          (d) A reference to any Person includes its permitted successors and permitted assigns.




          (e) Accounting terms not otherwise defined herein have the meanings assigned to them by GAAP
applied on a consistent basis by the accounting entity to which they refer.




          (f) The words “include”, “includes” and “including” are not limiting.




          (g) All terms not specifically defined herein or by GAAP, which terms are defined in the
Uniform Commercial Code as in effect in the State of New York, have the meanings assigned to them
therein, with the term “instrument” being that defined under Article 9 of the Uniform
Commercial Code.




          (h) Reference to a particular “§” refers to that section of this Reimbursement and Pledge
Agreement unless otherwise indicated.




          (i) The words “herein”, “hereof”, “hereunder” and words of like import shall refer to this
Reimbursement and Pledge Agreement as a whole and not to any particular section or subdivision of
this Reimbursement and Pledge Agreement.




          (j) Unless otherwise expressly indicated, in the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and including,” the words
“to” and “until” each mean “to but excluding,” and the word “through” means “to and including.”




          (k) This Reimbursement and Pledge Agreement may use several different limitations, tests or
measurements to regulate the same or similar matters. All such limitations, tests and measurements
are, however, cumulative and are to be performed in accordance with the terms thereof.




          (l) This Reimbursement and Pledge Agreement is the result of negotiation among, and has been
reviewed by counsel to, among others, the Administrative Agent and the Borrower and is the product
of discussions and negotiations among all parties. Accordingly, this




15









 







Reimbursement and Pledge Agreement is not intended to be construed against the Administrative
Agent, the Borrower, the Fronting Bank, the LC Administrator or any of the Lenders merely on
account of the Administrative Agent’s, the Borrower’s, the Fronting Bank’s, the LC Administrator’s
or any Lender’s involvement in the preparation of such documents.




     1.3 Exchange Rates. The Administrative Agent or the Fronting Bank, as applicable,
shall determine the Spot Rates as of each Revaluation Date to be used for calculating Dollar
Equivalent amounts of Credit Extensions and Total Outstandings denominated in Alternative
Currencies. Such Spot Rates shall become effective as of such Revaluation Date and shall be the
Spot Rates employed in converting any amounts between the applicable currencies until the next
Revaluation Date to occur. Except for purposes of financial statements delivered by the Borrower
hereunder or calculating financial covenants hereunder or except as otherwise provided herein, the
applicable amount of any currency (other than Dollars) for purposes of the Loan Documents shall be
such Dollar Equivalent amount as so determined by the Administrative Agent or the Fronting Bank, as
applicable.



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



2. COMMITMENTS, LETTERS OF CREDIT.



     2.1 Commitments of Lenders.



          2.1.1 Commitment. On and subject to the terms and conditions of this Reimbursement
and Pledge Agreement, (a) the Fronting Bank agrees to issue, extend and renew for the account of
the Borrower one or more standby letters of credit (a “Letter of Credit”) from time to time before
the Commitment Termination Date, (b) each Lender hereby agrees to issue severally, and for itself
alone, Several Letters of Credit at the request of and for the account of the Borrower from time to
time before the Commitment Termination Date in such Lender’s Commitment Percentage of such
aggregate stated amounts of Several Letters of Credit, (c) each Lender hereby agrees to purchase
Letter of Credit Participations in the obligations of the Fronting Bank under Letters of Credit
that are Fronted Letters of Credit as more fully set forth in §2.2, and (d) with respect to Several
Letters of Credit, the Fronting Bank hereby agrees that it shall be severally (and not jointly)
liable for an amount equal to its Commitment Percentage plus each Participating Bank’s Commitment
Percentage and each Participating Bank hereby agrees to purchase Letter of Credit Participations in
the obligations of the Fronting Bank under any such Several Letter of Credit in an amount equal to
such Participating Bank’s Commitment Percentage; provided however, that after giving effect to any
Credit Extension pursuant to this §2.1.1, (x) the sum of the Total Outstandings shall not exceed
the Total Commitment, and (y) the Total Outstandings shall not exceed the Collateral Coverage
Amount. The Borrower, the Fronting Bank and the Lenders agree that on and after the Closing Date,
the Letters of Credit listed on Schedule 2.1.1 (the “Existing Letters of Credit”) shall be
Letters of Credit hereunder and shall cease to be outstanding under that certain Amended and
Restated Letter of Credit Reimbursement and Pledge Agreement dated as of June 9, 2006 among the
Borrower, the Administrative Agent and various financial institutions.




          2.1.2 Increase in Commitments.




16









 








          (a) Upon notice to the Administrative Agent (which shall promptly notify the Lenders), the
Borrower may from time to time, request an increase in the Total Commitment by an amount (for all
such requests) not exceeding $250,000,000; provided that (i) any such request for an increase shall
be in a minimum amount of $50,000,000, and (ii) the Borrower may make a maximum of three such
requests. At the time of sending such notice, the Borrower (in consultation with the
Administrative Agent) shall specify the time period within which each Lender is requested to
respond (which shall in no event be less than ten Business Days from the date of delivery of such
notice to the Lenders).




          (b) Each Lender shall notify the Administrative Agent within such time period whether or not
it agrees to increase its Commitment and, if so, whether by an amount equal to, greater than, or
less than its Commitment Percentage of such requested increase. Any Lender not responding within
such time period shall be deemed to have declined to increase its Commitment.




          (c) The Administrative Agent shall notify the Borrower and each Lender of the Lenders’
responses to each request made hereunder. To achieve the full amount of a requested increase and
subject to the approval of the Administrative Agent and the Fronting Bank (which approvals shall
not be unreasonably withheld), the Borrower may also invite additional Eligible Assignees to become
Lenders pursuant to a joinder agreement in form and substance satisfactory to the Administrative
Agent and its counsel.




          (d) Any increase in the Total Commitment shall be subject to the following conditions
precedent: (i) as of the proposed effective date of the increase in the Total Commitment and after
giving effect to such increase, all representations and warranties shall be true and correct in all
material respects as though made on such date (unless such representation and warranty is made as
of a specific date, in which case, such representation and warranty shall be true and correct as of
such date) and no event shall have occurred and then be continuing which constitutes a Default or
Event of Default; (ii) the Borrower, the Administrative Agent and each Eligible Assignee which
shall have agreed to provide a “Commitment” in support of such increase in the Total Commitment,
shall have executed and delivered a joinder agreement in a form reasonably acceptable to the
Administrative Agent; (iii) to the extent reasonably required by the Administrative Agent, counsel
for the Borrower shall have provided to the Administrative Agent a supplemental opinion in form and
substance reasonably satisfactory to the Administrative Agent; (iv) the Lenders and any Eligible
Assignee(s) shall otherwise have executed and delivered such other instruments and documents as the
Administrative Agent shall have reasonably requested in connection with such increase; (v) the
Borrower shall have executed and delivered all corporate authority documents that the
Administrative Agent shall have reasonably requested in connection with such increase; and (vi) if
applicable, the LC Administrator shall have delivered to the respective beneficiaries of
outstanding Several Letters of Credit amendments (or, in the case of any Several Letter of Credit
issued individually by the Lenders, a replacement Several Letter of Credit in exchange for and the
return or cancellation of the original Several Letter of Credit) which reflect any changes in the
Lenders and/or the Commitment Percentages resulting from such increase. Upon satisfaction of the
conditions precedent to any increase in the Total Commitment, the Administrative Agent shall
promptly advise the Borrower and each Lender of the effective date of such increase. In addition,
on the effective date, the Administrative Agent shall replace the existing Schedule 1.1
attached hereto




17









 







with a revised Schedule 1.1 reflecting such new Total Commitment and each Lender’s
Commitment. Nothing contained herein shall constitute, or otherwise be deemed to be, a commitment
on the part of any Lender to increase its Commitment hereunder. It is understood that any increase
in the amount of the Commitments pursuant to this §2.1.2 shall not constitute an amendment of this
Reimbursement and Pledge Agreement.




          2.1.3 Voluntary Commitment Reductions. The Borrower shall have the right at any time
and from time to time upon three (3) Business Days prior written notice to the Administrative Agent
to reduce by a minimum amount of $10,000,000 and in multiples of $1,000,000 in excess thereof, or
to terminate entirely, the Total Commitment whereupon the Commitments of the Lenders shall be
reduced pro rata in accordance with their respective Commitment Percentages of the amount specified
in such notice or, terminated as the case may be provided that the Total Commitment may not be
reduced to an amount below the Total Outstanding. Promptly after receiving any notice of the
Borrower delivered pursuant to this §2.1.3, the Administrative Agent will notify the Lenders of the
substance thereof. No reduction or termination of the Commitments may be reinstated.




     2.2 Procedures for Issuance and Amendment of Letters of Credit.



          2.2.1 Issuance Procedures.




          (a) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of
the Borrower delivered to (x) the Fronting Bank, in the case of Fronted Letters of Credit and (y)
the LC Administrator, in the case of Several Letters of Credit (with a copy in each case to the
Administrative Agent) by hard copy or electronically in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit
Application must be received by the Applicable Issuing Party and the Administrative Agent (i) not
later than 11:00 a.m. at least two Business Days prior to the proposed issuance date or date of
amendment, as the case may be, of any Fronted Letter of Credit denominated in Dollars, (ii) not
later than 11:00 a.m. at least three Business Days prior to the proposed issuance date or date of
amendment, as the case may be, of any Several Letter of Credit denominated in Dollars, and (iii)
not later than 11:00 a.m. at least four Business Days prior to the proposed issuance date or date
of amendment, as the case may be, of any Letter of Credit denominated in an Alternative Currency;
or in each case such earlier date and time as the Administrative Agent and the Applicable Issuing
Party may agree in a particular instance in their sole discretion. In the case of a request for an
initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and
detail satisfactory to the Applicable Issuing Party: (A) the proposed issuance date of the
requested Letter of Credit (which shall be a Business Day); (B) the amount and currency thereof;
(C) the expiry date thereof; (D) the name and address of the beneficiary thereof (which shall not
be Lloyd’s); (E) the documents to be presented by such beneficiary in case of any drawing
thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any
drawing thereunder; (G) whether such Letter of Credit is to be issued as a Fronted Letter of Credit
or a Several Letter of Credit (it being agreed that (x) all Letters of Credit denominated in an
Alternative Currency will be Fronted Letters of Credit and (y) in the event a Lender advises the
Administrative Agent and the LC Administrator that such Lender is unable (due to regulatory
restrictions or other legal impediments) to issue a Several Letter of Credit because of its
relationship to the beneficiary, such Lender shall be a Participating




18









 







Bank in such Several Letter of Credit); and (H) such other matters as the Applicable Issuing
Party may require. In the case of a request for an amendment of any outstanding Letter of Credit,
such Letter of Credit Application shall specify in form and detail satisfactory to the Applicable
Issuing Party (w) the Letter of Credit to be amended; (x) the proposed date of amendment thereof
(which shall be a Business Day); (y) the nature of the proposed amendment; and (z) such other
matters as the Applicable Issuing Party may require. Additionally, the Borrower shall furnish to
the Applicable Issuing Party and the Administrative Agent such other documents and information
pertaining to such requested Letter of Credit issuance or amendment as the Applicable Issuing Party
or the Administrative Agent may require.




          (b) Promptly after receipt of any Letter of Credit Application, the Applicable Issuing Party
will confirm with the Administrative Agent (by telephone or in writing) that the Administrative
Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, the
Applicable Issuing Party will provide the Administrative Agent with a copy thereof. Unless the
Applicable Issuing Party has received written notice from any Lender, the Fronting Bank, the
Administrative Agent or the Borrower, at least one Business Day prior to the requested date of
issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions
contained in §10 shall not then be satisfied, then, subject to the terms and conditions hereof, the
Applicable Issuing Party, shall, on the requested date, issue a Letter of Credit for the account of
the Borrower or enter into the applicable amendment, as the case may be, in each case in accordance
with its usual and customary business practices.




          (c) The LC Administrator is hereby authorized to execute and deliver each Several Letter of
Credit and each amendment to a Several Letter of Credit on behalf of each Lender, provided that,
upon request of the Borrower, such Several Letter of Credit or amendment will be executed by each
Lender. The LC Administrator shall use the Commitment Percentage of each Lender as its “Commitment
Share” under each Several Letter of Credit provided that the Fronting Bank shall be severally (and
not jointly) liable for an amount equal to its Commitment Percentage plus the Commitment Percentage
of each Participating Bank. The LC Administrator shall not amend any Several Letter of Credit to
change the “Commitment Shares” of an Issuer or add or delete an Issuer liable thereunder unless
such amendment is done in connection with an assignment, a change in the Lenders and/or the
Commitment Percentages as a result of any increase in the Total Commitment pursuant to §2.1.2 or
any other addition or replacement of a Lender in accordance with the terms of this Reimbursement
and Pledge Agreement. The status of a Lender as a Participating Bank at any time shall be
determined solely by the Fronting Bank and such Lender. In the event a Lender becomes a
Participating Bank or ceases to be a Participating Bank, the LC Administrator is authorized to
amend each Several Letter of Credit to reflect such change in status. Fees owed by the Borrower
with respect to any Participating Bank to the Fronting Bank pursuant to the Fee Letter shall accrue
only during such period as such Lender is a Participating Bank with respect to any such Several
Letter of Credit. Each Lender hereby irrevocably constitutes and appoints the LC Administrator its
true and lawful attorney-in-fact for and on behalf of such Lender with full power of substitution
and revocation in its own name or in the name of the LC Administrator to issue, execute and
deliver, as the case may be, each Several Letter of Credit and each amendment to a Several Letter
of Credit and to carry out the purposes of this Reimbursement and Pledge Agreement with respect to
Several Letters of Credit.




19









 








          (d) If the Borrower so requests in any applicable Letter of Credit Application, the Applicable
Issuing Party may, in its sole and absolute discretion, agree to issue a Letter of Credit that has
automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that
any such Auto-Extension Letter of Credit must permit the Applicable Issuing Party, to prevent any
such extension at least once in each twelve-month period (commencing with the date of issuance of
such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the
“Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time
such Letter of Credit is issued. Unless otherwise directed by the Applicable Issuing Party, the
Borrower shall not be required to make a specific request to the Applicable Issuing Party for any
such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be
deemed to have authorized (but may not require) the Applicable Issuing Party to permit the
extension of such Letter of Credit at any time to an expiry date not later than one year after the
Commitment Termination Date; provided, however, that the Applicable Issuing Party
shall not permit any such extension if (A) the Applicable Issuing Party has determined that it
would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in
its revised form (as extended) under the terms hereof (by reason of the provisions of §2.2.2 or
otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before
the day that is five Business Days before the Non-Extension Notice Date from the Administrative
Agent, the Fronting Bank, any Lender or the Borrower that one or more of the applicable conditions
specified in §10 is not then satisfied, and in each such case directing the Applicable Issuing
Party not to permit such extension.




          (e) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit
to an advising bank with respect thereto or to the beneficiary thereof, the Applicable Issuing
Party will also deliver to the Borrower and the Administrative Agent a true and complete copy of
such Letter of Credit or amendment




          2.2.2 Terms of Letters of Credit.




          (a) Each Letter of Credit issued, extended or renewed hereunder shall, among other things, (i)
provide for the payment of sight drafts for honor thereunder when presented in accordance with the
terms thereof and when accompanied by the documents described therein, and (ii) be issued in
Dollars or Canadian Dollars and have an expiry date no later than the date which is one (1) year
from the date of issuance of such Letter of Credit. Each Letter of Credit so issued, extended or
renewed shall be subject to the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500 or any successor version thereto
adopted by the Applicable Issuing Party in the ordinary course of its business as a letter of
credit issuer and in effect at the time of issuance of such Letter of Credit (the “Uniform
Customs”) or the International Standby Practices (ISP98), International Chamber of Commerce
Publication No. 590, or any successor code of standby letter of credit practices among banks
adopted by the Applicable Issuing Party in the ordinary course of its business as standby letter of
credit issuers and in effect at the time of issuance of such Letter of Credit, in each case to the
extent not inconsistent with New York law. Letters of Credit may be issued at any time prior to
the Commitment Termination Date. In the event of any conflict between the terms of any Letter of
Credit Application and this Reimbursement and Pledge Agreement, the terms of this Reimbursement and
Pledge Agreement shall govern. Letters of Credit denominated in Alternative Currencies, shall be
issued in a minimum Alternative




20









 







Currency Equivalent of $100,000 and all Letters of Credit denominated in Dollars shall be
issued in a minimum face amount of $1,000.




          (b) An Issuer shall not be under any obligation to issue any Letter of Credit and no Lender
shall have any obligation to participate in any Letter of Credit if:





     (i) any order, judgment or decree of any Governmental Authority or arbitrator shall by
its terms purport to enjoin or restrain an Issuer from issuing such Letter of Credit, or any
law applicable to such Issuer or any request or directive (whether or not having the force
of law) from any Governmental Authority with jurisdiction over such Issuer shall prohibit,
or request that such Issuer refrain from, the issuance of letters of credit generally or
such Letter of Credit in particular or shall impose upon such Issuer with respect to such
Letter of Credit any restriction, reserve or capital requirement (for which such Issuer is
not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon
such Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing
Date and which such Issuer in good faith deems material to it;




     (ii) the issuance of such Letter of Credit would violate any laws or one or more
policies of such Issuer applicable to letters of credit generally;




     (iii) a default of any Lender’s obligations to fund under §2.2.6 exists or any Lender
is at such time a Delinquent Lender hereunder, unless the Fronting Bank has entered into
satisfactory arrangements with the Borrower or such Lender to eliminate the Fronting Bank’s
risk with respect to such Lender.



          (c) An Issuer shall be under no obligation to amend any Letter of Credit if (i) such Issuer
would have no obligation at such time to issue such Letter of Credit in its amended form under the
terms hereof, or (ii) the beneficiary of such Letter of Credit does not accept the proposed
amendment to such Letter of Credit. Notwithstanding anything to the contrary contained herein, in
no event will the Fronting Bank be obligated to amend any Letter of Credit issued for the benefit
of Lloyd’s (other than an amendment to decrease the Maximum Drawing Amount thereunder) or extend
the expiry date thereof.




          2.2.3 Reimbursement Obligations of Lenders.




          (a) Each Lender severally agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition precedent whatsoever, to the
extent of such Lender’s Commitment Percentage to reimburse the Fronting Bank on demand for the
amount of each draft paid by the Fronting Bank under each Fronted Letter of Credit, required to be
funded by it, to the extent that such amount is not reimbursed by the Borrower pursuant to §2.2.5
(such agreement for a Lender being called herein the “Letter of Credit Participation” of such
Lender).




          (b) Each Lender severally agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition precedent whatsoever, to the
extent of such Lender’s Commitment Percentage, as the case may be, to fund each Several Letter of
Credit (or, in the case of a Participating Lender, its Letter of Credit




21









 







Participation owed to the Fronting Bank) on demand for the amount of each draft received by
the LC Administrator, to the extent that such amount is not reimbursed by the Borrower pursuant to
§2.2.5.




          2.2.4 Participations of Lenders. Each such payment made by a Lender shall be treated
as the purchase by such Lender of a participating interest in the Borrower’s Reimbursement
Obligation under §2.2.5 in an amount equal to such payment. Each Lender shall share in accordance
with its participating interest in any interest which accrues pursuant to §2.2.6.




          2.2.5 Reimbursement Obligation of the Borrower. In order to induce each of the
Fronting Bank and the LC Administrator (on behalf of the Lenders) to issue, extend and renew each
Letter of Credit and the Lenders to participate therein, the Borrower hereby agrees:




          (a) to reimburse or pay to the Applicable Issuing Party for the account of the Applicable
Issuing Party or (as the case may be) the applicable Lenders, with respect to each Letter of Credit
issued, extended or renewed by the Applicable Issuing Party hereunder, on each date that any draft
presented under such Letter of Credit is honored by the Applicable Issuing Party, the Dollar
Equivalent as of the date and for the amount paid by such Person under or with respect to such
Letter of Credit, provided, that, the failure of the Borrower to immediately
reimburse such Person for amounts due pursuant to this §2.2.5(a) shall be an Event of Default and
upon the occurrence of such Event of Default, the Administrative Agent may issue a Notice of
Exclusive Control and apply all or any portion of the Pledged Collateral towards the payment
obligations described herein, and




          (b) that the Administrative Agent may, upon the acceleration of the Obligations in accordance
with §11, exercise all rights and remedies in respect of the Pledged Collateral and any proceeds
thereof, to collect an amount equal to the Dollar Equivalent of the then outstanding Obligations.




          Each payment contemplated by §2.2.5(a) shall be made to the Applicable Issuing Party at such
Applicable Issuing Party’s Office in immediately available funds. Interest on any and all amounts
remaining unpaid by the Borrower under this §2.2.5 at any time from the date such amounts become
due and payable (whether as stated in this §2.2.5, by acceleration or otherwise) until payment in
full (whether before or after judgment) shall be payable to the Administrative Agent on demand at
the rate specified in §2.2.6. Any Pledged Collateral or proceeds thereof collected by the
Administrative Agent may be, at the Administrative Agent’s sole discretion, converted into the
applicable Alternative Currency, with any such conversion costs being considered a collection
expense and added to the Obligations. All payments of Fees, interest and Reimbursement Obligations
to the Lenders shall be made in Dollars even if the underlying Letter of Credit is denominated in
an Alternative Currency.




          2.2.6 Letter of Credit Payments.




          (a) If any draft shall be presented or other demand for payment shall be made under any Letter
of Credit, the Applicable Issuing Party, shall notify the Borrower of the date and amount of the
draft presented or demand for payment and of the date and time when it




22









 







expects to pay such draft or honor such demand for payment. If the Borrower fails to
reimburse such Person as provided in §2.2.5 or if the Administrative Agent is unable to effect such
reimbursement through the application of the Pledged Collateral, on the date that such draft is
paid or other payment is made by the Applicable Issuing Party, the Applicable Issuing Party may at
any time thereafter notify the Lenders as the case may be of the amount of any such Unpaid
Reimbursement Obligation plus any administrative, processing or similar fees customarily charged by
the Applicable Issuing Party in connection with the foregoing. No later than 3:00 p.m. on the
Business Day next following the receipt of such notice, each Lender shall make available to the
Applicable Issuing Party, in Dollars, at the Administrative Agent’s Office, in immediately
available funds, such Lender’s Commitment Percentage of such Unpaid Reimbursement Obligation plus
any administrative, processing or similar fees customarily charged by the Applicable Issuing Party
in connection with the foregoing. The responsibility of each Applicable Issuing Party to the
Borrower and the Lenders shall be only to determine that the documents (including each draft)
delivered under each Letter of Credit in connection with such presentment shall be in conformity in
all material respects with such Letter of Credit.




          (b) Each Lender’s obligation to (x) reimburse the Fronting Bank, in the case of Fronted
Letters of Credit or (y) provide the LC Administrator with funds in an amount equal to its several
obligation, in the case of Several Letters of Credit, for amounts drawn under Letters of Credit as
contemplated by this §2.2.6, shall be absolute and unconditional and shall not be affected by any
circumstance, including (i) any set-off, counterclaim, recoupment, defense or other right which
such Lender may have against the Fronting Bank, the LC Administrator, the Borrower, the Parent or
any other Person for any reason whatsoever; (ii) the occurrence or continuance of a Default, or
(iii) any other occurrence, event or condition, whether or not similar to any of the foregoing. No
such payment by a Lender shall relieve or otherwise impair the obligation of the Borrower to
reimburse the Applicable Issuing Party for the amount of any payment made by such Person under any
Letter of Credit, together with interest as provided herein.




          (c) If any Lender fails to make available to the Administrative Agent for the account of the
Applicable Issuing Party any amount required to be paid by such Lender pursuant to the foregoing
provisions of this §2.2.6 by the time specified, the Applicable Issuing Party shall be entitled to
recover from such Lender (acting through the Administrative Agent), on demand, such amount with
interest thereon for the period from the date such payment is required to the date on which such
payment is immediately available to such Person at a rate per annum equal to the applicable Federal
Funds Rate from time to time in effect plus any administrative, processing or similar fees
customarily charged by the Applicable Issuing Party in connection with the foregoing. A
certificate of the Applicable Issuing Party submitted to any Lender (through the Administrative
Agent) with respect to any amounts owing under this clause (c) shall be conclusive absent manifest
error.




          (d) Repayment of Participations.





     (i) At any time after the Fronting Bank or the LC Administrator has made a payment
under any Letter of Credit and has received from any Lender such Lender’s payment in
accordance with §2.2.6(a), if the Administrative Agent receives for the account of the
Applicable Issuing Party any payment in respect of the related Unpaid



23









 







Reimbursement Obligation or interest thereon (whether directly from the Borrower or
otherwise, including proceeds of Pledged Collateral applied thereto by the Administrative
Agent), the Administrative Agent will distribute to such Lender its applicable percentage
thereof (appropriately adjusted, in the case of interest payments, to reflect the period of
time such Lender’s payment was outstanding) in Dollars and in the same funds as those
received by the Administrative Agent.




     (ii) If any payment received by the Administrative Agent for the account of the
Fronting Bank or the LC Administrator is required to be returned under any of the
circumstances described in §3.1.3 or otherwise (including pursuant to any settlement entered
into by the Applicable Issuing Party in its discretion), each Lender shall pay to the
Administrative Agent for the account of the Applicable Issuing Party its applicable
percentage thereof on demand of the Administrative Agent, plus interest thereon from the
date of such demand to the date such amount is returned by such Lender, at a rate per annum
equal to the applicable Federal Funds Rate from time to time in effect.



          2.2.7 Obligations Absolute. (a) The Borrower’s obligations under this §2.2 shall be
absolute and unconditional under any and all circumstances and irrespective of the occurrence of
any Default or Event of Default or any condition precedent whatsoever or any set-off, counterclaim
or defense to payment which the Borrower may have or have had against the Fronting Bank, the LC
Administrator, the Administrative Agent, any Lender or any beneficiary of a Letter of Credit. The
Borrower further agrees with the Fronting Bank, the LC Administrator and the Lenders that the
Fronting Bank, the LC Administrator and the other Lenders shall not be responsible for, and the
Borrower’s Reimbursement Obligations under §2.2.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even if such documents should
in fact prove to be in any or all respects invalid, fraudulent or forged, or any dispute between or
among the Borrower, the beneficiary of any Letter of Credit or any financing institution or other
party to which any Letter of Credit may be transferred or any claims or defenses whatsoever of the
Borrower against the beneficiary of any Letter of Credit or any such transferee. The Fronting
Bank, the LC Administrator and the Lenders shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit. The Borrower agrees that any action taken or
omitted by the Fronting Bank, the LC Administrator or any Lender under or in connection with each
Letter of Credit and the related drafts and documents, if done in good faith and in the absence of
gross negligence and willful misconduct, shall be binding upon the Borrower and shall not result in
any liability on the part of the Fronting Bank, the LC Administrator or any Lender to the Borrower.




     2.3 Reliance by Fronting Bank and LC Administrator. To the extent not inconsistent
with §2.2.6, each of the Fronting Bank and the LC Administrator shall be entitled to rely, and
shall be fully protected in relying upon, any Letter of Credit, draft, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and statements of legal
counsel, independent accountants and other experts selected by such Person. Each of the Fronting
Bank and the LC Administrator shall be fully justified in failing or refusing to take any action
under this Reimbursement and Pledge Agreement unless it shall first have received such



24









 







advice or concurrence of the Required Lenders as it reasonably deems appropriate or it shall
first be indemnified to its reasonable satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to take any such action.
Each of the Fronting Bank and the LC Administrator shall in all cases be fully protected in acting,
or in refraining from acting, under this Reimbursement and Pledge Agreement in accordance with a
request of the Required Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon the Lenders and all future holders of a Letter of Credit
Participation.



     2.4 Fees; Interest.



          2.4.1 Commitment Fees. The Borrower agrees to pay to the Administrative Agent for the
accounts of the Lenders in accordance with their respective Commitment Percentages a commitment fee
(the “Commitment Fee”) equal to (a) 0.08% per annum times the actual daily amount by which
the Commitment exceeds the Total Outstandings. The Commitment Fee shall accrue at all times from
the Closing Date to the Commitment Termination Date, including at any time during which one or more
of the conditions in §10 is not met, and shall be due and payable quarterly in arrears on the last
business day of each March, June, September and December, commencing with the first such date to
occur after the Closing Date, with a final payment on the Commitment Termination Date.




          2.4.2 Letter of Credit Fee. The Borrower agrees to pay to the Administrative Agent
for the accounts of the Lenders in accordance with their respective Commitment Percentages a Letter
of Credit Fee (the “Letter of Credit Fee”) calculated based on the face amount of each
outstanding Letter of Credit at a rate equal to Letters of Credit, twenty-two and one-half one
hundredths of one percent (.225%) per annum, times the Dollar Equivalent of the actual daily
maximum amount available to be drawn under such Letter of Credit. The Letter of Credit Fee shall
be (i) computed on a quarterly basis in arrears and (ii) due and payable on the last business day
of each March, June, September and December, commencing with the first such date to occur after the
Closing Date, on the applicable Commitment Termination Date and thereafter on demand. The Borrower
shall also pay to each LC Administrator, for its own account, the LC Administrator’s customary or
scheduled costs of issuance and usual and customary costs of, amendment, negotiation or document
examination with respect to the Letters of Credit and such other amount as may be set forth in the
Fee Letter.




          2.4.3 Fees Payable Pursuant to the Fee Letter. The Borrower agrees to pay to the
Administrative Agent, the Fronting Bank and Banc of America Securities LLC the fees set forth in
the Fee Letter.




          2.4.4 Fees Under Existing Agreement. All commitment fees with respect to Tranche A
and letter of credit fees with respect to all Tranche A Letters of Credit outstanding under Tranche
A of the Amended and Restated Credit Agreement dated as of June 9, 2006, accrued through the
Amendment Effective Date shall be paid in full on the Closing Date.




          2.4.5 Interest.




25









 








          (a) (i) If any Reimbursement Obligation is not paid when due, such amount shall thereafter
bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable laws.





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




     (ii) Upon the request of the Required Lenders, while any Event of Default exists, (A)
the Borrower shall pay interest on the principal amount of all Unpaid Reimbursement
Obligations hereunder at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable laws and (B) the Letter of Credit
Fees shall accrue at the Default Rate.




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



          (b) Interest on Reimbursement Obligations shall be payable upon the date of repayment and upon
demand.




          (c) Interest hereunder shall be due and payable before and after judgment and before and after
the commencement of any proceeding referred to in §11.1(n) or (p).




          2.4.6 Computation of Interest and Fees. All computations of interest when the Base
Rate is determined by the Administrative Agent’s “prime rate” shall be made on the basis of a year
of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of Fees
and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year).
Interest shall accrue on each Unpaid Reimbursement Obligation for the day on which the Unpaid
Reimbursement Obligation arises, and shall not accrue on an Unpaid Reimbursement Obligation, or any
portion thereof, for the day on which the Unpaid Reimbursement Obligation or such portion is paid,
provided that any Unpaid Reimbursement Obligation that is repaid on the same day on which it arises
shall bear interest for one day.




3. CERTAIN GENERAL PROVISIONS.




     3.1 Payments.



          3.1.1 Payments Generally.




          (a) All payments to be made by the Borrower under any Loan Document shall be made without
condition or deduction for any counterclaim, defense, recoupment or set-off. Except as otherwise
expressly provided herein, all payments by the Borrower hereunder shall be made to the
Administrative Agent, for the account of the respective Lenders to which such




26









 







payment is owed, at the Administrative Agent’s Office in Dollars and in Same Day Funds not
later than 2:00 p.m. on the date specified herein.




          (b) If any payment to be made by the Borrower shall come due on a day other than a Business
Day, payment shall be made on the next following Business Day, and such extension of time shall be
reflected in computing interest or fees, as the case may be.




          (c) Unless the Borrower or any Lender has notified the Administrative Agent, prior to the date
any payment is required to be made by it to the Administrative Agent hereunder, that the Borrower
or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume
that the Borrower or such Lender, as the case may be, has timely made such payment and may (but
shall not be so required to), in reliance thereon, make available a corresponding amount to the
Person entitled thereto. If and to the extent that such payment was not in fact made to the
Administrative Agent in Same Day Funds, then:





     (i) if the Borrower failed to make such payment, each Lender shall forthwith on demand
repay to the Administrative Agent the portion of such assumed payment that was made
available to such Lender in Same Day Funds, together with interest thereon in respect of
each day from and including the date such amount was made available by the Administrative
Agent to such Lender to the date such amount is repaid to the Administrative Agent in Same
Day Funds at the applicable Federal Funds Rate from time to time in effect; and




     (ii) if any Lender failed to make such payment, such Lender shall forthwith on demand
pay to the Administrative Agent the amount thereof in Same Day Funds, together with interest
thereon for the period from the date such amount was made available by the Administrative
Agent to the Borrower to the date such amount is recovered by the Administrative Agent (the
“Compensation Period”) at a rate per annum equal to the applicable Federal Funds
Rate from time to time in effect. If such Lender does not pay such amount forthwith upon
the Administrative Agent’s demand therefor, the Administrative Agent may make a demand
therefor upon the Borrower, and the Borrower shall pay such amount to the Administrative
Agent, together with interest thereon for the Compensation Period at a rate per annum equal
to the rate of interest applicable to the applicable Credit Extension. Nothing herein shall
be deemed to relieve any Lender from its obligation to fulfill its Commitment or to
prejudice any rights which the Administrative Agent or the Borrower may have against any
Lender as a result of any default by such Lender hereunder.



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



          (d) The obligations of the Lenders hereunder to fund Several Letters of Credit and Letter of
Credit Participations are several and not joint. The failure of any Lender to fund any such
Several Letter of Credit or Letter of Credit Participation on any date required hereunder shall not
relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall
be responsible for the failure of any other Lender to so fund a Several Letter of Credit or
purchase its Letter of Credit Participation.




27









 








          (e) Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Several
Letter of Credit or Letter of Credit Participation in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain the funds in any
particular place or manner.




          3.1.2 Sharing of Payments. If, other than as expressly provided elsewhere herein, any
Lender shall obtain on account of the Several Letters of Credit or the Letter of Credit
Participation held by it, any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its ratable share (or other share contemplated
hereunder) thereof, such Lender shall immediately (a) notify the Administrative Agent of such fact,
and (b) purchase from the other Lenders such participations in Letters of Credit Issued by them,
and/or such subparticipations in the Letter of Credit Participations held by them, as the case may
be, as shall be necessary to cause such purchasing Lender to share the excess payment in respect of
such Several Letters of Credit or such Letter of Credit Participations, as the case may be, pro
rata with each of them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Lender under any of the circumstances described in §3.1.3
(including pursuant to any settlement entered into by the purchasing Lender in its discretion),
such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing
Lender the purchase price paid therefor, together with an amount equal to such paying Lender’s
ratable share (according to the proportion of (i) the amount of such paying Lender’s required
repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of the total amount so recovered,
without further interest thereon. The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off, but subject to §14.2) with respect to such
participation as fully as if such Lender were the direct creditor of the Borrower in the amount of
such participation. The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this Section and will
in each case notify the Lenders following any such purchases or repayments. Each Lender that
purchases a participation pursuant to this Section shall from and after such purchase have the
right to give all notices, requests, demands, directions and other communications under this
Reimbursement and Pledge Agreement with respect to the portion of the Obligations purchased to the
same extent as though the purchasing Lender were the original owner of the Obligations purchased.




          3.1.3 Payments Set Aside. To the extent that any payment by or on behalf of the
Borrower (including payments from the Pledged Collateral) is made to the Administrative Agent, the
Fronting Bank, the LC Administrator or any Lender, or the Administrative Agent, the Fronting Bank,
the LC Administrator or any Lender exercises its right of set-off, and such payment or the proceeds
of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement entered into by the
Administrative Agent, the Fronting Bank, the LC Administrator or such Lender in its discretion) to
be repaid to a trustee, receiver or any other party, in connection with any proceeding under any
insolvency, bankruptcy or receivership proceeding or otherwise, then (a) to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been made or such set-off had not
occurred, and (b) each Lender severally agrees to pay to the Administrative




28









 







Agent, the Fronting Bank or the LC Administrator, as the case may be, upon demand its
applicable share of any amount so recovered from or repaid by the Administrative Agent, the
Fronting Bank or the LC Administrator, as the case may be, plus interest thereon from the date of
such demand to the date such payment is made at a rate per annum equal to the applicable Federal
Funds Rate from time to time in effect, in the applicable currency of such recovery or payment.




     3.2 Taxes, etc. All payments by the Borrower hereunder and under any of the other
Loan Documents shall be made free and clear of and without deduction for any taxes, levies,
imposts, duties, charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless the Borrower is compelled by law to
make such deduction or withholding. If any such obligation is imposed upon the Borrower with
respect to any amount payable by it hereunder or under any of the other Loan Documents, the
Borrower will pay to the Administrative Agent, for the account of the Lenders or the Administrative
Agent, as the case may be, on the date on which such amount is due and payable hereunder or under
such other Loan Document, such additional amount in Dollars as shall be necessary to enable the
Lenders or the Administrative Agent to receive the same net amount which the Lenders or the
Administrative Agent would have received on such due date had no such obligation been imposed upon
the Borrower. The Borrower will deliver promptly to the Administrative Agent certificates or other
valid vouchers for all taxes or other charges deducted from or paid with respect to payments made
by the Borrower hereunder or under such other Loan Document.



     3.3 Additional Costs, etc. If any introduction of, or change in or in the
interpretation of any applicable law (which expression, as used herein, includes statutes, rules
and regulations thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any time or from time
to time hereafter made upon or otherwise issued to any Lender, the Fronting Bank, the LC
Administrator or the Administrative Agent by any central bank or other fiscal, monetary or other
authority (whether or not having the force of law)), shall:



          (a) subject any Lender, the Fronting Bank, the LC Administrator or the Administrative Agent to
any tax, levy, impost, duty, charge, fee, deduction or withholding of any nature with respect to
this Reimbursement and Pledge Agreement, the other Loan Documents, or such Lender’s Commitment
(other than taxes based upon or measured by the income or profits of such Lender, the Fronting
Bank, the LC Administrator or the Administrative Agent and taxes covered by § 3.2), or




          (b) materially change the basis of taxation (except for changes in taxes on income or profits)
of payments to any Lender, the Fronting Bank, the LC Administrator or the Administrative Agent of
the fees or interest in respect of the Letters of Credit or any other amounts payable to any
Lender, the Fronting Bank, the LC Administrator or the Administrative Agent under this
Reimbursement and Pledge Agreement or any of the other Loan Documents, or




29









 








          (c) impose or increase or render applicable (other than to the extent specifically provided
for elsewhere in this Reimbursement and Pledge Agreement) any special deposit, reserve, assessment,
liquidity, capital adequacy or other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans by, or letters of credit
issued by, or commitments of an office of any Lender, the Fronting Bank, the LC Administrator or
the Administrative Agent, or




          (d) impose on any Lender, the Fronting Bank, the LC Administrator or the Administrative Agent
any other conditions or requirements with respect to this Reimbursement and Pledge Agreement, the
other Loan Documents, any Letters of Credit, such Lender’s Commitment, or any loans, letters of
credit or commitments of which such Lender’s Commitment forms a part, and the result of any of the
foregoing is





     (i) to increase the cost to any Lender of making, funding, issuing, renewing, extending
or maintaining such Lender’s Commitment or any Letter of Credit, or




     (ii) to reduce the amount of interest, Reimbursement Obligation or other amount payable
to such Lender, the Fronting Bank, the LC Administrator or the Administrative Agent
hereunder on account of such Lender’s Commitment or any Letter of Credit, or




     (iii) to require such Lender, the Fronting Bank, the LC Administrator or the
Administrative Agent to make any payment or to forego any interest or principal or
Reimbursement Obligation or other sum payable hereunder, the amount of which payment or
foregone interest or Reimbursement Obligation or other sum is calculated by reference to the
gross amount of any sum receivable or deemed received by such Lender, the Fronting Bank, the
LC Administrator or the Administrative Agent from the Borrower hereunder,


then, and in each such case, the Borrower will, upon demand made by such Lender, the Fronting Bank,
the LC Administrator or the Administrative Agent (as the case may be) at any time and from time to
time and as often as the occasion therefor may arise, pay to such Lender, the LC Administrator or
the Administrative Agent such additional amounts as will be sufficient to compensate such Lender,
the Fronting Bank, the LC Administrator or the Administrative Agent for such additional cost,
reduction, payment or foregone interest or Reimbursement Obligation or other sum, provided,
that the Borrower shall not be obligated to pay any additional amounts which were incurred
by any of the Lenders, the Fronting Bank, the LC Administrator or the Administrative Agent more
than forty-five (45) days prior to the date on which such Lender, the Fronting Bank, the LC
Administrator or the Administrative Agent, as the case may be, had knowledge of such additional
amounts. The Lender, the Fronting Bank, the LC Administrator or the Administrative Agent shall
present a certificate setting forth a reasonable calculation of the amount of such increased costs
as per §3.5 hereof.




     3.4 Capital Adequacy. If after the date hereof any Lender, the Fronting Bank, the LC
Administrator or the Administrative Agent determines that (a) the adoption of or change in any law,
governmental rule, regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for bank holding companies or any change in the



30









 







interpretation or application thereof by a Governmental Authority with appropriate
jurisdiction, or (b) compliance by such Lender, the Fronting Bank, the LC Administrator or the
Administrative Agent or any corporation controlling such Lender, the Fronting Bank, the LC
Administrator or the Administrative Agent with any law, governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law) of any such entity regarding
capital adequacy, has the effect of reducing the return on such Lender’s, the Fronting Bank’s, the
LC Administrator’s or the Administrative Agent’s commitment with respect to any Reimbursement
Obligations to a level below that which such Lender, the Fronting Bank, the or the Administrative
Agent could have achieved but for such adoption, change or compliance (taking into consideration
such Lender’s, the Fronting Bank’s, the LC Administrator’s or the Administrative Agent’s then
existing policies with respect to capital adequacy and assuming full utilization of such entity’s
capital) by any amount deemed by such Lender, the Fronting Bank, the LC Administrator or the
Administrative Agent (as the case may be) to be material, then such Lender, LC Administrator or the
Administrative Agent may notify the Borrower of such fact. The Borrower agrees to pay such Lender,
the Fronting Bank, the LC Administrator or the Administrative Agent (as the case may be) for the
amount of such reduction in the return on capital as and when such reduction is determined upon
presentation by such Lender, the Fronting Bank, the LC Administrator or the Administrative Agent
(as the case may be) of a certificate in accordance with §3.5 hereof; provided,
that the Borrower shall not be obligated to pay any additional amounts which were incurred
by any of the Lenders, the Fronting Bank, the LC Administrator or the Administrative Agent more
than forty-five (45) days prior to the date on which such Lender, the Fronting Bank, the LC
Administrator or the Administrative Agent, as the case may be, had knowledge of such additional
amounts. Each Lender shall allocate such cost increases among its customers in good faith and on
an equitable basis. 



     3.5 Certificate. A certificate setting forth any additional amounts payable pursuant
to §§3.3 and 3.4 and a brief explanation of such amounts which are due, submitted by any Lender,
the Fronting Bank, the LC Administrator or the Administrative Agent to the Borrower, shall be
conclusive, absent manifest error, that such amounts are due and owing.



     3.6 Change of Location of Lending Office; Replacement of Lender. If the Borrower
shall, as a result of the requirements of §§3.3 or 3.4, be required to pay any Lender the
additional costs referred to in such Sections and the Borrower, in its reasonable discretion, shall
deem such additional amounts to be material, the Borrower shall have the right to (a) request in
writing to such Lender which has certified additional costs to the Borrower, with copy to the
Administrative Agent, that such Lender change the location of its lending office in order to
mitigate such additional costs and (b) if (i) such Lender does not change the location of its
lending office within sixty (60) days of receipt of such request, or (ii) the Borrower determines,
in its reasonable discretion, after such change in the location of such lending office that any
remaining additional costs are still material, substitute another Lender who is an Eligible
Assignee for such Lender which has certified the additional costs to the Borrower. Any such
substitution shall take place in accordance with §13.2 and shall otherwise be on terms and
conditions reasonably satisfactory to the Administrative Agent, and until such time as such
substitution shall be consummated, the Borrower shall continue to pay such additional costs. Upon
any such substitution, the Borrower shall pay or cause to be paid to the Lender that is being
replaced all amounts properly demanded and unreimbursed and such Lender will be released from
liability hereunder.



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4. COLLATERAL SECURITY.




     4.1 Security of the Borrower. The Obligations shall be secured by a perfected first
priority security interest (subject only to (i) liens arising by operation of law, so long as the
aggregate obligations secured thereby do not exceed $1,000,000 and (ii) the Custodial Lien and
Set-Off Rights) in the following: (a) the Collateral Account and all property held therein or any
replacement or successor account and/or any and all substitutions, additions and accessions
thereto, which shall include, but not be limited to, cash, investment property, securities,
security entitlements, securities accounts and any and all financial assets credited to and held in
the Collateral Account or any replacement or successor account, as such property may be released or
substituted pursuant to the terms hereof; and (b) to the extent not already included in clause (a)
above, dividends, distributions, income, interest and all proceeds of the foregoing, including,
without limitation, the roll-over or reinvested proceeds of the foregoing, whether now existing or
hereafter arising (collectively, the “Pledged Collateral”). Any delivery or transfer of
any of the Pledged Collateral to the Custodian and credited to the Collateral Account shall be
deemed a delivery or transfer to the Administrative Agent.



     4.2 Security Interest. For and in consideration of the sum of ten Dollars ($10.00)
and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and for and in consideration of the Issuers’ agreement to issue the Letters of Credit
and the Lenders’ agreement to purchase Letter of Credit Participations therein, the Borrower hereby
pledges, hypothecates, and impresses the Pledged Collateral with a lien in favor of the
Administrative Agent, on behalf of the Fronting Bank, the LC Administrator and the Lenders, and
grants to the Administrative Agent a security interest in the Pledged Collateral, in each case to
secure the punctual payment and performance of all the Obligations. The Borrower covenants and
agrees that (i) with respect to the Pledged Collateral consisting of the Collateral Account, the
property held therein and any and all proceeds thereof, the Administrative Agent has control and,
from and after the issuance of a Notice of Exclusive Control, which notice shall not be given
unless an Event of Default has occurred and is continuing hereunder, the Administrative Agent shall
have sole and exclusive control over such Pledged Collateral and that it shall take all such steps
as may be necessary to cause the Administrative Agent to have sole and exclusive control over such
Pledged Collateral; (ii) it shall not sell, transfer, assign, or otherwise dispose of any of the
Pledged Collateral without the prior written consent of the Administrative Agent except in
connection with substitutions, roll-overs or reinvestments of Pledged Collateral permitted pursuant
to §4.7(b) and provided that, after giving effect to such substitutions, the Borrower is in
compliance with the covenant contained in §6.8; (iii) it shall do or cause to be done all things
necessary to preserve and keep in full force and effect the perfected first priority security
interest in the Pledged Collateral granted to the Administrative Agent hereunder (subject to laws
affecting creditor’s rights, generally); (iv) it shall not create or permit the existence of liens
or security interests in the Pledged Collateral in favor of third parties other than (A) liens
arising by operation of law, so long as the aggregate obligations secured thereby do not exceed
$1,000,000 and (B) the Custodial Lien and Set-Off Rights; (v) it shall not take any action or omit
to take any action that would result in the termination of the Control Agreement without the prior
consent of the Administrative Agent and it shall otherwise comply in all respects with the
provisions of the Control Agreement; and (vi) with respect to the Collateral Account, it shall not
give instructions or entitlement orders to the Custodian that would require the Custodian to
advance any margin or other credit to or for the benefit of the Borrower.



32









 





     4.3 Additional Obligations. The Borrower agrees that: (1) any distribution in kind
received by the Borrower from any party for or on account of the Pledged Collateral, including
distributions of stock as a dividend or split of any of the Pledged Collateral, shall be promptly
delivered to the Administrative Agent, for the account of the Lenders, in the form received with
any required endorsement; (2) additional collateral in form and kind satisfactory to the
Administrative Agent will be deposited by the Borrower with the Administrative Agent, for the
account of the Lenders, in accordance with §6.8; and (3) any note or other instrument executed and
delivered to the Borrower by any party to evidence any obligation of such party with respect to the
Pledged Collateral shall be promptly delivered with any required endorsement to the Administrative
Agent. All such items shall be held by the Administrative Agent in accordance with the terms of
this Reimbursement and Pledge Agreement.



     4.4 Certain Rights and Duties of Administrative Agent and Lenders. The Borrower
acknowledges that the Administrative Agent and the Lenders have no duty of any type with respect to
the Pledged Collateral except for the use of due care in safekeeping any of the Pledged Collateral
actually in the physical custody of the Administrative Agent or the Lenders; prior to the
occurrence of any Event of Default the Administrative Agent’s and the Lenders’ rights with respect
to the Pledged Collateral shall be limited to the Administrative Agent’s and the Lenders’ rights as
secured party and pledgee and the right to perfect their security interest, preserve, enforce and
protect the lien granted hereunder and their interest in the Pledged Collateral. Prior to the
occurrence and continuance of any Event of Default, the Borrower shall be entitled to vote any
Pledged Collateral constituting securities or capital stock and to give consents, waivers and
ratifications in respect thereof; provided, however, that no vote shall be cast or consent, waiver
or ratification given by the Borrower if the effect thereof would impair any of the Pledged
Collateral or be inconsistent with or result in any violation of any of the provisions of this
Reimbursement and Pledge Agreement. All such rights of the Borrower to vote and give consents,
waivers and ratifications with respect to the Pledged Collateral shall cease upon the occurrence
and continuance of an Event of Default.



     4.5 Power of Attorney, Etc. The Borrower hereby irrevocably constitutes and appoints
the Administrative Agent the true and lawful attorney-in-fact for and on behalf of the Borrower
with full power of substitution and revocation in its own name or in the name of the Borrower to
make, execute, deliver and record, as the case may be, any and all financing statements,
continuation statements, notices of exclusive control, assignments, proofs of claim, powers of
attorney, leases, discharges or other instruments or agreements which the Administrative Agent in
its sole discretion may deem necessary or advisable to perfect, preserve, or protect (and, after
the occurrence and during the continuance of an Event of Default, to enforce) the lien granted
hereunder and the Administrative Agent’s, the Fronting Bank’s, the LC Administrator’s and the
Lenders’ interest in the Pledged Collateral and to carry out the purposes of this Reimbursement and
Pledge Agreement, including but without limiting the generality of the foregoing, any and all
proofs of claim in bankruptcy or other insolvency proceedings of the Borrower, with the right, upon
the occurrence and during the continuance of an Event of Default, to collect and apply to the
Obligations all distributions and dividends made on account of the Pledged Collateral. The rights
and powers conferred on the Administrative Agent by the Borrower are expressly declared to be
coupled with an interest and shall be irrevocable until all the Obligations are paid and performed
in full. A carbon, photographic, or other reproduction of



33









 







a security agreement (including this Reimbursement and Pledge Agreement) or a financing
statement is sufficient as a financing statement to the extent permitted by applicable law.



     4.6 Release of Collateral. The Administrative Agent shall grant a release of its lien
on the Pledged Collateral:



          (a) In the event that the Collateral Coverage Amount exceeds the Total Outstandings (such
excess being referred to herein as the “Release Amount”) then, so long as no Event of
Default has occurred and is continuing, the Administrative Agent shall, at the request and expense
of the Borrower, release such portions of the Pledged Collateral designated by the Borrower with a
fair market value equal to the Release Amount (or such smaller amount as may be requested by the
Borrower); provided, that in no event shall the Administrative Agent be required to
release any Pledged Collateral after the occurrence and during the continuance of an Event of
Default or in an aggregate amount that is less than five hundred thousand dollars ($500,000). In
connection with any such partial release of the Pledged Collateral, the Administrative Agent shall
give such consents as may be necessary to permit the Custodian to allow the Borrower to withdraw
the Release Amount from the Collateral Account. The Borrower agrees to reimburse the
Administrative Agent on demand for any and all out-of-pocket costs and expenses incurred by the
Administrative Agent in connection with any such partial release of the Pledged Collateral,
including, without limitation, reasonable attorney’s fees.




          (b) So long as the Collateral Coverage Amount exceeds the Total Outstandings, and so long as
no Event of Default has occurred and is continuing, the Borrower may make substitutions of equal or
greater value for the Pledged Collateral; provided that such Pledged Collateral shall at all times
consist of Eligible Collateral and in connection therewith the Administrative Agent shall, at the
expense of the Borrower, release the Pledged Collateral for which the Borrower is making a
substitution. In the event that any amounts are paid or due to be paid in respect of the Pledged
Collateral (whether at scheduled maturity or otherwise), the Borrower may give instructions to
roll-over or reinvest such amounts in Eligible Collateral, all of which shall remain Pledged
Collateral hereunder.




          (c) In the event that (i) any and all Letters of Credit are fully drawn or expire or are
returned to the Administrative Agent for cancellation, (ii) all Reimbursement Obligations with
respect to any drawings of Letters of Credit have been fully satisfied pursuant to the provisions
of this Reimbursement and Pledge Agreement and the other Loan Documents, (iii) no other
Obligations, whether contingent or otherwise, are then outstanding and (iv) the Total Commitments
have been terminated, the Administrative Agent agrees that it shall, after request by the Borrower
and at the Borrower’s sole cost and expense, release the Pledged Collateral from the security
interest and lien created by this Reimbursement and Pledge Agreement and shall execute, or cause to
be executed, such instruments of release and discharge as may be reasonably requested by the
Borrower.




5. REPRESENTATIONS AND WARRANTIES.




     The Borrower represents and warrants to the Lenders, the Fronting Bank, the LC Administrator
and the Administrative Agent as follows:



34









 





     5.1 Corporate Authority.



          5.1.1 Incorporation; Good Standing. The Borrower (a) is a company duly organized,
validly existing and in good standing under the laws of Bermuda, (b) has all requisite corporate
(or the equivalent company) power to own its property and conduct its business as now conducted and
as presently contemplated, and (c) is in good standing as a foreign corporation (or similar
business entity) and is duly authorized to do business in each jurisdiction where such
qualification is necessary except where a failure to be so qualified would not have a Material
Adverse Effect.




          5.1.2 Authorization. The execution, delivery and performance of this Reimbursement
and Pledge Agreement and the other Loan Documents to which the Borrower is, or is to become, a
party and the transactions contemplated hereby and thereby (a) are within the corporate (or the
equivalent company) authority of the Borrower, (b) have been duly authorized by all necessary
corporate (or the equivalent company) proceedings, (c) do not and will not conflict with or result
in any breach or contravention of any provision of law, statute, rule or regulation to which the
Borrower is subject or any judgment, order, writ, injunction, license or permit applicable to the
Borrower and (d) do not conflict with any provision of the Governing Documents of, or any agreement
or other instrument binding upon, the Borrower.




          5.1.3 Enforceability. The execution and delivery of this Reimbursement and Pledge
Agreement and the other Loan Documents to which the Borrower is or is to become a party will result
in valid and legally binding obligations of the Borrower enforceable against it in accordance with
the respective terms and provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally
the enforcement of creditors’ rights or by the application of equitable principles relating to
enforceability (regardless of whether considered in a proceeding in equity or at law) including,
without limitation, (i) the possible unavailability of specific performance injunctive relief or
any equitable remedy and (ii) concepts of materiality, reasonableness, good faith and fair
dealings; provided that the Borrower assumes for the purposes of this §5.1.3 that this
Reimbursement and Pledge Agreement and the other Loan Documents have been validly executed and
delivered by each of the parties thereto other than the Borrower.




     5.2 Governmental Approvals. The execution, delivery and performance by the Borrower
of this Reimbursement and Pledge Agreement and the other Loan Documents to which the Borrower is or
is to become a party and the transactions contemplated hereby and thereby do not require the
approval or consent of, or filing with, any governmental agency or authority other than those
already obtained.



     5.3 Financial Statements.



          5.3.1 Fiscal Year. The Parent and each of its Subsidiaries has a fiscal (or
financial) year which is the twelve months ending on December 31 of each calendar year.




          5.3.2 Financial Statements. There has been furnished to each of the Lenders (i) (x) a
consolidated balance sheet of the Parent and its Subsidiaries as at the Balance Sheet Date, and a
consolidated statement of income of the Parent and its Subsidiaries for the fiscal year then




35









 







ended, and (y) a consolidated balance sheet of Mont Re and its Subsidiaries as at the Balance
Sheet Date and a consolidated statement of income of Mont Re and its Subsidiaries for the fiscal
year then ended and (ii) (x) a consolidated balance sheet and consolidated statement of income of
the Parent and its Subsidiaries as at March 31, 2007 and (y) a consolidated balance sheet and
consolidated statement of income of Mont Re and its Subsidiaries as at March 31, 2007. Such
balance sheet and statement of income have been prepared in accordance with GAAP (subject, in the
case of the March 31, 2007 statements, to the absence of footnotes and year-end adjustments) and
fairly present the financial condition of the Parent and its Subsidiaries or Mont Re and its
Subsidiaries, as the case may be, as at the close of business on the date thereof and the results
of operations for the period then ended. There are no Contingent Liabilities of the Parent or any
of its Subsidiaries as of such date involving material amounts, known to the officers of the
Parent, which were not disclosed in such balance sheet and the notes related thereto. In the event
that GAAP requires that the financial statements be presented on a combined basis, each Borrower
shall have furnished a combined balance sheet and a combined statement of income for such Borrower
and its Subsidiaries.




     5.4 No Material Adverse Changes, etc. Since the Balance Sheet Date there has been no
event or occurrence which has had a Material Adverse Effect.



     5.5 Franchises, Patents, Copyrights, etc. The Borrower possesses all franchises,
patents, copyrights, trademarks, trade names, licenses and permits, and rights in respect of the
foregoing, adequate for the conduct of its business substantially as now conducted without known
conflict with any rights of others.



     5.6 Litigation. Except as set forth in Schedule 5.6 hereto, there are no
actions, suits, proceedings or investigations of any kind pending or threatened against the
Borrower or any of its Subsidiaries before any Governmental Authority, (a) that, if adversely
determined, might, either in any case or in the aggregate, (i) have a Material Adverse Effect or
(ii) materially impair the right of the Borrower and its Subsidiaries to carry on business
substantially as now conducted by them, or result in any substantial liability not adequately
covered by insurance, or for which adequate reserves are not maintained on the consolidated balance
sheet of the Parent and its Subsidiaries or, in the event that GAAP requires the financial
statements to be presented on a combined basis, the combined balance sheet or (b) which question
the validity of this Reimbursement and Pledge Agreement.



     5.7 No Materially Adverse Contracts, etc. Neither the Borrower nor any of its
Subsidiaries is subject to any Governing Document or other legal restriction, or any judgment,
decree, order, law, statute, rule or regulation that has or, to the knowledge of the Responsible
Officers, is expected in the future to have a Material Adverse Effect. Neither the Borrower nor
any of its Subsidiaries is a party to any contract or agreement that has or is expected, in the
judgment of the Responsible Officers, to have any Material Adverse Effect.



     5.8 Compliance with Other Instruments, Laws, etc. Neither the Borrower nor any of its
Subsidiaries is in violation of any provision of its Governing Documents, or any agreement or
instrument to which it may be subject or by which it or any of its properties may be bound or any
decree, order, judgment, statute, license, rule or regulation, in any of the foregoing cases in a




36









 




manner that could result in the imposition of substantial penalties or have a
Material Adverse Effect.




     5.9 Tax Status. The Borrower and its Subsidiaries (a) have made or filed all federal,
state and foreign income and all other tax returns, reports and declarations required by any
jurisdiction to which any of them is subject, except those which the failure to file would not have
a Material Adverse Effect, (b) have paid all taxes and other governmental assessments and charges
shown or determined to be due on such returns, reports and declarations, except those being
contested in good faith and by appropriate proceedings or those which the failure to pay would not
have a Material Adverse Effect and (c) have set aside on their books provisions reasonably adequate
for the payment of all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and none of the Responsible Officers of the Borrower know of
any basis for any such claim.



     5.10 No Event of Default. No Default or Event of Default has occurred and is
continuing.



     5.11 Investment Company Acts. Neither the Borrower nor any of its Subsidiaries is an
“investment company”, or an “affiliated company” or a “principal underwriter” of an “investment
company”, as such terms are defined in the Investment Company Act of 1940, as amended. The
Borrower is not engaged in the “investment business” as defined in The Investment Business Act 2003
of Bermuda.



     5.12 Absence of Financing Statements, etc. There is no financing statement, security
agreement, chattel mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect or give notice of
any present or possible future lien on any of the Pledged Collateral other than those in favor of
the Administrative Agent.



     5.13 Perfection of Security Interest. All filings, assignments, pledges and deposits
of documents or instruments have been made and all other actions have been taken that are necessary
or advisable, under applicable law, to establish and perfect the Administrative Agent’s security
interest in the Pledged Collateral. The Administrative Agent and the Lenders acknowledge and agree
that the Pledged Collateral is subject to liens and set-off rights in favor of the Custodian
pursuant to Article V, Section 10 of the Control Agreement (the “Custodial Lien and Set-off
Rights”). The Pledged Collateral and the Administrative Agent’s rights with respect to the
Pledged Collateral are not subject to any set-off, claims, withholdings or other defenses other
than the Custodial Lien and Set-off Rights. The Borrower is the owner of the Pledged Collateral
free from any lien, encumbrance or security interest, other than (i) liens arising by operation of
law, so long as the aggregate obligations secured thereby do not exceed $1,000,000, (ii) the
Custodial Lien and Set-Off Rights and (iii) those granted hereby.



     5.14 Use of Proceeds.



          5.14.1 General. The Borrower will obtain Letters of Credit to be issued in the
ordinary course of the Borrower’s business.




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          5.14.2 Regulations U and X. No portion of any Letter of Credit is to be obtained
shall be used, for the purpose of purchasing or carrying any “margin security” or
“margin stock” as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.




          5.14.3 Ineligible Securities. No portion of any Letter of Credit is to be obtained
shall be used, for the purpose of knowingly purchasing, or providing credit support for the
purchase of, during the underwriting or placement period or within thirty (30) days thereafter, any
Ineligible Securities underwritten or privately placed by a Financial Affiliate.




     5.15 Subsidiaries, etc. As of the Closing Date, (a) the Parent has no Subsidiaries
other than those specifically disclosed on Schedule 5.15 and such Schedule correctly
indicates which Subsidiaries are Insurance Subsidiaries, and Material Parties, (b) all of the
outstanding Equity Interests in such Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Person and in the amounts specified on Schedule 5.15
free and clear of all Liens and (c) the Parent and its Subsidiaries have no equity investments in
any other corporation or entity other than those specifically disclosed on Schedule 5.15.



     5.16 Disclosure. None of this Reimbursement and Pledge Agreement or any of the other
Loan Documents to which the Borrower is a party contains any untrue statement of a material fact or
omits to state a material fact known to the Borrower necessary in order to make the statements
herein or therein, taken as a whole not misleading as of the date hereof or thereof. There is no
fact known to the Borrower or any of its Subsidiaries as of the date hereof which has a Material
Adverse Effect, or which is reasonably likely in the future to have a Material Adverse Effect,
exclusive of effects resulting from changes in general economic conditions, legal standards or
regulatory conditions.



     5.17 Foreign Assets Control Regulations, Etc. None of the requesting or issuance,
extension or renewal of any Letters of Credit or the use of the proceeds of any thereof will
violate the Trading With the Enemy Act (50 U.S.C. § 1 et seq., as amended) (the “Trading With the
Enemy Act”) or any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) (the “Foreign Assets Control Regulations”)
or any enabling legislation or executive order relating thereto (which for the avoidance of doubt
shall include, but shall not be limited to (a) Executive Order 13224 of September 21, 2001 Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism (66 Fed. Reg. 49079 (2001)) (the “Executive Order”) and (b) the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001 (Public Law 107-56)). Furthermore, neither the Borrower nor any of its Subsidiaries
(x) is or will become a “blocked person” as described in the Executive Order, the Trading With the
Enemy Act or the Foreign Assets Control Regulations or (y) engages or will engage in any dealings
or transactions, or be otherwise associated, with any such “blocked person”.



     5.18 Identification Number. The true and correct organizational identification number
of the Borrower is 31261.



6. AFFIRMATIVE COVENANTS.



38









 





     The Borrower covenants and agrees that, until both the Commitment Termination Date has
occurred and all Obligations have been paid in full:



     6.1 Punctual Payment. The Borrower will duly and punctually pay or cause to be paid
the Reimbursement Obligations, Fees and all other amounts provided for in this Reimbursement and
Pledge Agreement and the other Loan Documents to which the Borrower or any of its Subsidiaries are
a party, all in accordance with the terms of this Reimbursement and Pledge Agreement and such other
Loan Documents.



     6.2 Maintenance of Office. The Borrower will maintain its registered office at
Montpelier House, 94 Pitts Bay Road, Hamilton, Bermuda HM HX, or at such other place as the
Borrower shall designate upon written notice to the Administrative Agent, where notices,
presentations and demands to or upon the Borrower in respect of the Loan Documents to which the
Borrower are a party may be given or made.



     6.3 Records and Accounts. The Borrower will (a) keep, and cause each of its
Subsidiaries to keep, true and accurate records and books of account in which full, true and
correct entries will be made in accordance with GAAP, (b) maintain adequate accounts and reserves
for all taxes (including income taxes), depreciation, depletion, obsolescence and amortization of
its properties and the properties of its Subsidiaries, contingencies, and other reserves, and (c)
at all times engage PricewaterhouseCoopers or other independent certified public accountants
satisfactory to the Administrative Agent as the independent certified public accountants of the
Parent and its Subsidiaries and will not permit more than thirty (30) days to elapse between the
cessation of such firm’s (or any successor firm’s) engagement as the independent certified public
accountants of the Parent and its Subsidiaries and the appointment in such capacity of a successor
firm as shall be satisfactory to the Administrative Agent.



     6.4 Financial Statements, Certificates and Information. The Borrower will deliver to
each of the Lenders:



          (a) as soon as practicable, but in any event not later than ninety (90) days after the end of
each fiscal year of the Parent, (i) the consolidated balance sheet of the Parent and its
Subsidiaries and the consolidating balance sheet of the Parent and its Subsidiaries, each as at the
end of such year, and the related consolidated statement of income and consolidated statement of
cash flow and consolidating statement of income for such year, each setting forth in comparative
form the figures for the previous fiscal year and all such consolidated and consolidating
statements to be in reasonable detail, prepared in accordance with GAAP, and, in the case of the
consolidated balance sheet and related consolidated statement of income and consolidated statement
of cash flow, certified, without qualification and without an expression of uncertainty as to the
ability of the Parent, the Borrower or any of their Subsidiaries to continue as going concerns, by
PricewaterhouseCoopers or any other independent certified public accountant engaged pursuant to
§6.3(c) and (ii); the consolidated balance sheet of the Borrower and its Subsidiaries and the
consolidating balance sheet of the Borrower and its Subsidiaries, each as at the end of such year,
and the related consolidated statement of income and consolidated statement of cash flow and
consolidating statement of income and consolidating statement of cash flow for such year, each
setting forth in comparative form the figures for the previous fiscal year and all such
consolidated and consolidating statements to be in reasonable detail, prepared

39









 








in accordance with GAAP, and, in the case of the consolidated balance sheet and related
consolidated statement of income and consolidated statement of cash flow, certified, without
qualification;




          (b) as soon as practicable, but in any event not later than forty-five (45) days after the end
of each of the fiscal quarters of the Parent, (i) copies of the unaudited consolidated balance
sheet of the Parent and its Subsidiaries and the unaudited consolidating balance sheet of the
Parent and its Subsidiaries, each as at the end of such quarter, and the related consolidated
statement of income and consolidated statement of cash flow and consolidating statement of income
for the portion of the Parent’s fiscal year then elapsed, all in reasonable detail and prepared in
accordance with GAAP, together with a certification by the principal financial or accounting
officer of the Parent that the information contained in such financial statements fairly presents
the financial position of the Parent and its Subsidiaries on the date thereof (subject to year-end
adjustments); and (ii) copies of the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries and the unaudited consolidating balance sheet of the Borrower and its Subsidiaries,
each as at the end of such quarter, and the related consolidated statement of income and
consolidated statement of cash flow and consolidating statement of income and consolidating
statement of cash flow for the portion of the Borrower’s fiscal year then elapsed, all in
reasonable detail and prepared in accordance with GAAP, together with a certification by the
principal financial or accounting officer of the Borrower that the information contained in such
financial statements fairly presents the financial position of the Borrower and its Subsidiaries on
the date thereof (subject to year-end adjustments);




          (c) Within thirty (30) days of receipt of any audit committee report prepared by the
Borrower’s or the Parent’s accountants, if there are any reportable events resulting in any
discussion in the sections of such report entitled “Errors or Irregularities”, “Illegal Acts” and
“Misstatements Due to Fraud”, the Borrower will provide copies of such sections to the
Administrative Agent for distribution to the Lenders;




          (d) simultaneously with the delivery of the financial statements referred to in subsections
(a) and (b) above, a statement certified by the principal financial or accounting officer of the
Parent in substantially the form of Exhibit C hereto (a “Compliance Certificate”)
and setting forth in reasonable detail computations evidencing compliance with the covenants
contained in §8 and (if applicable) reconciliations to reflect changes in GAAP since the Balance
Sheet Date;




          (e) no later than the tenth (10th) Business Day of each month, or, following the
occurrence and during the continuance of an Event of Default, at such other times as the
Administrative Agent may request, a certificate (the “Pledged Collateral Certificate”)
substantially in the form of Exhibit D attached hereto, signed by an officer of the
Borrower, certifying compliance with the collateral coverage requirement set forth in §6.8 and
demonstrating, in detail satisfactory to the Administrative Agent, the Fair Market Value of the
Eligible Collateral as of the last Business Day of the immediately preceding month;




          (f) five days after the date filed with the relevant Governmental Authority for each of its
Fiscal Years, but in any event within 125 days after the end of each Fiscal Year of the Borrower
and each other Insurance Subsidiary, a copy of the annual financial statements required

40









 








to be filed with the Minister of Finance of Bermuda or such other appropriate Governmental
Authority of the jurisdiction of domicile of any Insurance Subsidiary;




          (g) contemporaneously with the filing or mailing thereof, copies of all material of a
financial nature filed with the Securities and Exchange Commission or sent to the stockholders of
the Parent or the Borrower;




          (h) from time to time such other financial data and information as the Administrative Agent or
any Lender may reasonably request;




     In the event that GAAP requires the financial statements required under clauses (a) and (b)
above to be presented on a combined basis, the Borrower shall deliver such combined and combining
statements in lieu of the required consolidated and consolidating financial statements.



     Documents required to be delivered pursuant to §6.4(a) or (b) or
§6.4(g) (to the extent any such documents are included in materials otherwise filed with
the Securities and Exchange Commission) may be delivered electronically and if so delivered, shall
be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or
provides a link thereto on the Borrower’s website on the Internet at the website address listed on
Schedule 14.7; or (ii) on which such documents are posted on the Borrower’s behalf on an
Internet or intranet website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the Administrative Agent);
provided that: (x) the Borrower shall deliver paper copies of such documents to the
Administrative Agent or any Lender that requests the Borrower to deliver such paper copies until a
written request to cease delivering paper copies is given by the Administrative Agent or such
Lender and (y) the Borrower shall notify the Administrative Agent and each Lender (by telecopier or
electronic mail) of the posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding
anything contained herein, in every instance the Borrower shall be required to provide paper copies
of the Compliance Certificates required by §6.4(d) to the Administrative Agent. Except for
such Compliance Certificates, the Administrative Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any event shall have no
responsibility to monitor compliance by the Borrower with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such
documents.



     The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arranger will
make available to the Lenders and the Fronting Bank materials and/or information provided by or on
behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the
Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and
(b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive
material non-public information with respect to the Borrower or its securities) (each, a
“Public Lender”). The Borrower hereby agrees that (w) all Borrower Materials that are to
be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a
minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x)
by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the
Administrative Agent, the Arranger, the Fronting Bank, the LC



41









 




Administrator and the Lenders to treat such Borrower Materials as not containing any material
non-public information with respect to the Parent, the Borrower or its securities for purposes of
United States Federal and state securities laws (provided, however, that to the
extent such Borrower Materials constitute Information, they shall be treated as set forth in
§14.13); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a
portion of the Platform designated “Public Investor;” and (z) the Administrative Agent and the
Arranger shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being
suitable only for posting on a portion of the Platform not designated “Public Investor.”




     6.5 Notices.



          6.5.1 Defaults. As soon as practicable after Responsible Officer of the Borrower
knows of the existence of any Default or Event of Default, the Borrower will notify the
Administrative Agent, in writing, of the occurrence of such Default or Event of Default, together
with a reasonably detailed description thereof, and the actions the Borrower proposes to take with
respect thereto.




          6.5.2 Notification of Claim against Pledged Collateral. The Borrower will,
immediately upon becoming aware thereof, notify the Administrative Agent, in writing, of any
set-off, claims, withholdings or other defenses to which any of the Pledged Collateral, or the
Administrative Agent’s rights with respect to the Pledged Collateral, are subject other than with
respect to the Custodial Lien and Set-off Rights, provided, that the Borrower will
notify the Administrative Agent hereunder of any set-off exercised by the Custodian pursuant to the
Custodial Lien and Set-off Rights.




          6.5.3 Notice of Litigation and Judgments. The Borrower will, and will cause each of
its Subsidiaries to, give notice to the Administrative Agent and each of the Lenders in writing
within thirty (30) days of becoming aware of any litigation or proceedings threatened in writing or
any pending litigation and proceedings affecting the Borrower or any of its Subsidiaries or to
which the Borrower or any of its Subsidiaries is or becomes a party involving an uninsured claim
against the Borrower or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect on the Borrower or any of its Subsidiaries and stating the nature and
status of such litigation or proceedings. The Borrower will give notice to the Administrative
Agent, in writing, in form and detail satisfactory to the Administrative Agent, within ten (10)
days of any final judgment not covered by insurance, against the Borrower or any of its
Subsidiaries in an amount in excess of $5,000,000.




     6.6 Legal Existence; Maintenance of Properties. The Borrower will do or cause to be
done all things necessary to preserve and keep in full force and effect its legal existence, rights
and franchises and those of its Subsidiaries. It (i) will cause all of its properties and those of
its Subsidiaries used or useful in the conduct of its business or the business of its Subsidiaries
to be maintained and kept in good condition, repair and working order and supplied with all
necessary equipment, (ii) will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Borrower may be necessary so
that the business carried on in connection therewith may be properly and advantageously conducted
at all times, and (iii) will continue to engage primarily in the businesses now conducted by them
and in related businesses; provided that nothing in this §6.6 shall prevent the Borrower from



42









 




discontinuing the operation of any Subsidiary or the operation
and maintenance of any of its properties or any of those of its Subsidiaries if such discontinuance
is, in the judgment of the Borrower, desirable in the conduct of its or their business and that do
not in the aggregate have a Material Adverse Effect.




     6.7 Taxes. The Borrower will, and will cause each of its Subsidiaries to, duly pay
and discharge, or cause to be paid and discharged, before the same shall become overdue, all taxes,
assessments and other governmental charges imposed upon it and its real estate, sales and
activities, or any part thereof, or upon the income or profits therefrom, other than where failure
to pay such taxes would not result in a Material Adverse Effect; provided, that any
such tax, assessment, charge, levy or claim need not be paid if the validity or amount thereof
shall currently be contested in good faith by appropriate proceedings and if the Parent or such
Subsidiary shall have set aside on its books adequate reserves with respect thereto; and
provided, further that the Borrower and each Subsidiary will pay all such taxes,
assessments, charges, levies or claims forthwith upon the commencement of proceedings to foreclose
any lien that may have attached to the Pledged Collateral as security therefor.



     6.8 Collateral Coverage. The Borrower hereby covenants and agrees that the Collateral
Coverage Amount must at all times be equal to or greater than the Total Outstandings. If at any
time the Collateral Coverage Amount is less than the Total Outstandings, then the Borrower shall
promptly provide to the Administrative Agent and pledge hereunder such additional Eligible
Collateral as may be necessary to satisfy the foregoing Collateral Coverage Amount. Failure to do
so within two (2) Business Days shall constitute an immediate and automatic Event of Default under
the terms and conditions of this Reimbursement and Pledge Agreement. Notwithstanding the monthly
reporting obligations set forth in §6.4(e), the covenant contained herein shall be tested at all
times.



     6.9 Inspection of Properties and Books, etc.



          6.9.1 General. The Borrower shall permit the Administrative Agent, upon reasonable
prior notice and at reasonable times to visit and inspect any of the properties of the Borrower or
any of its Subsidiaries, to examine the books of account of the Borrower and its Subsidiaries (and
to make copies thereof and extracts therefrom), and to discuss the affairs, finances and accounts
of the Borrower and its Subsidiaries with, and to be advised as to the same by, its and their
officers. Following the occurrence and during the continuance of an Event of Default, any of the
Lenders and any of the Administrative Agent’s or any of the Lenders’ employees, agents, consultants
or attorneys, may accompany the Administrative Agent on such visits, inspections or discussions.




          6.9.2 Communications with Accountants. The Borrower authorizes the Administrative
Agent to communicate directly with the Borrower’s independent certified public accountants and
authorizes such accountants to disclose to the Administrative Agent and the Lenders any and all
financial statements and other supporting financial documents and schedules with respect to the
business, financial condition and other affairs of the Borrower or any of its Subsidiaries.
Following the occurrence and during the continuance of an Event of Default, any of the Lenders and
any of the Administrative Agent’s or any of the Lenders’ employees, agents, consultants or
attorneys, may participate in such communications. At the request of the

43









 








Administrative Agent, the Borrower shall deliver a letter addressed to such accountants
instructing them to comply with the provisions of this §6.9.2.




     6.10 Compliance with Laws, Contracts, Licenses, and Permits. The Borrower will, and
will cause each of its Subsidiaries to, comply with (a) the applicable laws and regulations
wherever its business is conducted, including all environmental laws, except where failure to do so
would not have a Material Adverse Effect, (b) the provisions of its Governing Documents, (c) all
agreements and instruments by which it or any of its properties may be bound, except where failure
to do so would not have a Material Adverse Effect, and (d) all applicable decrees, orders, and
judgments, except where failure to do so would not have a Material Adverse Effect. If any
authorization, consent, approval, permit or license from any officer, agency or instrumentality of
any competent government shall become necessary or required in order that the Borrower fulfill any
of its obligations hereunder or any of the other Loan Documents to which the Borrower is a party,
the Borrower will immediately take or cause to be taken all reasonable steps within the power of
the Borrower to obtain such authorization, consent, approval, permit or license and furnish the
Administrative Agent and the Lenders with evidence thereof.



     6.11 Use of Proceeds. The Borrower will obtain Letters of Credit solely for the
purposes set forth in §5.14.1.



     6.12 Further Assurances. The Borrower will, and will cause each of its Subsidiaries
to, cooperate with the Lenders and the Administrative Agent and execute such further instruments
and documents as the Lenders or the Administrative Agent shall reasonably request to carry out to
their satisfaction the transactions contemplated by this Reimbursement and Pledge Agreement and the
other Loan Documents.



7. CERTAIN NEGATIVE COVENANTS.




     The Borrower covenants and agrees that, until the Commitment Termination Date has occurred and
all Obligations have been paid in full:



     7.1 Business Activities. The Borrower will not engage directly or indirectly (whether
through Subsidiaries or otherwise), as its primary business, in any type of business other than the
businesses conducted by it on the Closing Date and in related businesses.



     7.2 Fiscal Year. The Borrower will not, and will not permit any of its Subsidiaries
to, change the date of the end of its fiscal or financial year from that set forth in §5.3.1.



     7.3 Transactions with Affiliates. The Borrower will not, and will not permit any of
its Subsidiaries to, engage in any transaction with any Affiliate (other than for services as
employees, officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such Affiliate or, to the
knowledge of the Borrower, any corporation, partnership, trust or other entity in which any such
Affiliate has a substantial interest or is an officer, director, trustee or partner, on terms more
favorable to such Person than would have been obtainable on an arm’s-length basis in the ordinary
course of business provided that transactions between the Parent and any wholly-owned Subsidiary of the



44









 




Parent or between any wholly-owned Subsidiaries of the Parent shall be excluded from the
restrictions set forth in this §7.3.




     7.4 Disposition of Assets. The Borrower will not, and will not permit any of its
Insurance Subsidiaries to, sell, transfer, convey or lease all or substantially all of its assets
or sell or assign with or without recourse any receivables, other than any sale, transfer,
conveyance or lease in the ordinary course of business, except for (x) any sale, transfer, lease or
disposition of an asset by a Subsidiary of the Borrower to a Subsidiary of the Borrower and (y) any
such sale, transfer, conveyance, lease or assignment by any wholly owned Subsidiary of the Parent
(other than the Borrower) to the Borrower or any other wholly owned Subsidiary of the Parent,
provided in each case no Default or Event of Default has occurred and is continuing or would result
therefrom.



     7.5 Mergers, Consolidations and Sales. The Borrower will not, and will not permit any
other Material Party to, merge or consolidate except for (i) any wholly-owned Subsidiary of the
Borrower may merge with any other wholly-owned Subsidiary of the Borrower and (ii) the Borrower may
merge with any other wholly-owned Subsidiary of the Parent provided the Borrower is the surviving
corporation, provided in each case no Default or Event of Default has occurred and is continuing or
would result therefrom.



     7.6 Liens. The Borrower will not, and will not permit any of its Subsidiaries to,
create, assume, incur, guarantee or otherwise to permit any Debt secured by any Lien upon any
shares of Capital Stock of any Material Party (whether such shares of Capital Stock are now owned
or hereafter acquired) without effectively providing concurrently that the Obligations (and, if the
Borrower so elect, any other Debt of the Borrower that is not subordinate to the Obligations and
with respect to which the governing instruments require, or pursuant to which the Borrower is
otherwise obligated, to provide such security) shall be secured on an equal and ratable basis with
such Debt for at least the time period such other Debt is so secured.



     7.7 Investments in Blue Ocean Entities. The Borrower will not, and will not permit
any of its Subsidiaries to, (i) incur Contingent Liabilities or otherwise provide credit support
(including granting a Lien on any of its assets) for the Debt of Blue Ocean Re Holdings Ltd. or any
of its Subsidiaries at any time or (ii) during the existence or continuation of any Default or
Event of Default make any loans to purchase or redeem any Capital Stock of or otherwise make any
investment in Blue Ocean Re Holdings Ltd. or any of its Subsidiaries.



8. FINANCIAL COVENANTS.




     The Borrower covenants and agrees that, until the occurrence of the Commitment Termination
Date and until all Obligations are paid in full, it shall:



     8.1 Leverage Ratio. The Parent will not permit the Leverage Ratio to be more than
thirty percent (30%). For purposes of determining the Leverage Ratio, (i) Hybrid Securities will
be accorded the same capital treatment as given to such Hybrid Securities by S&P; provided that no
Subsidiary of the Parent (other than a trust or other entity formed for the purpose of issuing the
Hybrid Securities) shall have any direct or indirect liability in respect of the Hybrid
Securities; and provided further that the maximum amount of Hybrid Securities eligible for



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equity treatment in determining the Leverage Ratio (regardless of the treatment by S&P) can not
exceed 15% of total capital and (ii) Blue Ocean Re Holdings Ltd. shall not be treated as a
Subsidiary but shall be accounted for as an equity investment.




     8.2 A.M. Best Rating. The Borrower will not permit its A.M. Best Rating to fall below
the rating of “B++” or to be withdrawn.



9. CONDITIONS TO CLOSING DATE.




     This Reimbursement and Pledge Agreement shall be and become effective on the date that the
following conditions precedent have been satisfied:



     9.1 Reimbursement and Pledge Agreement. The Reimbursement and Pledge Agreement shall
have been duly executed and delivered by the respective parties thereto, shall be in full force and
effect and shall be in form and substance satisfactory to the Administrative Agent and the
Administrative Agent shall have received a fully executed copy of each such document.



     9.2 Control Agreement. The Control Agreement shall have been duly executed and
delivered by the respective parties thereto, shall be in full force and effect and shall be in form
and substance satisfactory to the Administrative Agent and the Administrative Agent shall have
received a fully executed copy of each such document.



     9.3 Certified Copies of Governing Documents. The Administrative Agent shall have
received from the Borrower a copy, certified by a duly authorized officer of the Borrower to be
true and complete on the Closing Date, of each of its Governing Documents as in effect on such date
of certification.



     9.4 Corporate or Other Action. All corporate (or other) action necessary for the
valid execution, delivery and performance by the Borrower of this Reimbursement and Pledge
Agreement and the other Loan Documents to which it is or is to become a party shall have been duly
and effectively taken, and evidence thereof satisfactory to the Administrative Agent shall have
been provided to the Administrative Agent.



     9.5 Incumbency Certificate. The Administrative Agent shall have received from the
Borrower an incumbency certificate, dated as of the Closing Date, signed by a duly authorized
officer of the Borrower and giving the name and bearing a specimen signature of each individual who
shall be authorized: (a) to sign, in the name and on behalf of the Borrower, each of the Loan
Documents to which the Borrower is or is to become a party; (b) to apply for Letters of Credit; and
(c) to give notices and to take other action on its behalf under the Loan Documents.



     9.6 Pledged Collateral Certificate. The Administrative Agent shall have received from
the Borrower a Pledged Collateral Certificate dated as of the Closing Date.



     9.7 Opinion of Counsel. Each of the Lenders and the Administrative Agent shall have
received a favorable legal opinion addressed to the Lenders and the Administrative
Agent, dated as of the Closing Date, in form and substance satisfactory to the Administrative
Agent, from New York and Bermuda counsel to the Borrower.



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     9.8 Payment of Fees and Expenses. The Borrower shall have paid to the Lenders, the
Administrative Agent, or the Arranger as appropriate, all amounts due and owing pursuant to §2.4.3,
all fees required to be paid pursuant to the Fee Letter and any and all other fees and expenses
incurred by the Administrative Agent in connection with this Reimbursement and Pledge Agreement and
the other Loan Documents, including, without limitation, legal fees and expenses.



     9.9 No Material Adverse Change. There shall not have occurred a material adverse
change since December 31, 2006 in the business, properties, condition (financial or otherwise),
assets, operations, income or prospects of the Parent and its Subsidiaries taken as a whole, the
Borrower individually or the Borrower and its Subsidiaries taken as a whole or in the facts and
information regarding such entities as represented to date.



     9.10 Representations True; No Event of Default. The representations and warranties
set forth in §5 shall be true and correct as of the Closing Date and no Default or Event of Default
shall have occurred and be continuing. The Administrative Agent shall have received a certificate
of the Borrower signed by a Responsible Officer of the Borrower to that effect.



     9.11 Process Agent Letter. A letter from the Process Agent agreeing to the terms of
§14.15.



10. CONDITION TO ALL CREDIT EXTENSIONS.




     The obligation of each Lender and of the Fronting Bank to make a Credit Extension, in each
case whether on or after the Closing Date, shall also be subject to the satisfaction of the
following conditions precedent:



     10.1 Representations True; No Event of Default. Each of the representations and
warranties of the Borrower contained in this Reimbursement and Pledge Agreement (other than §5.4),
the other Loan Documents to which the Borrower is a party or in any document or instrument
delivered by the Borrower pursuant to or in connection with this Reimbursement and Pledge Agreement
shall be true as of the date as of which they were made and shall also be true at and as of the
time of the issuance, extension or renewal of such Letter of Credit, with the same effect as if
made at and as of that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Reimbursement and Pledge Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the aggregate do not
have a Material Adverse Effect, and to the extent that such representations and warranties relate
expressly to an earlier date) and no Default or Event of Default shall have occurred and be
continuing.



     10.2 No Legal Impediment. No change shall have occurred in any applicable law or
regulations thereunder or interpretations thereof that in the reasonable opinion of the Applicable
Issuing Party would make it illegal for the applicable Issuers to issue, extend or renew such
Letter of Credit.



     10.3 Documents. The Administrative Agent shall have received all information and such
documents as the Administrative Agent may reasonably request in connection with such Credit
Extension.



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     10.4 Pledged Collateral Certificate. The Administrative Agent shall have received the
most recent Pledged Collateral Certificate required to be delivered to the Administrative Agent in
accordance with §6.4(e) and, if requested by the Administrative Agent, a Pledged Collateral
Certificate dated within three (3) days of the issuance, extension or renewal of such Letter of
Credit.



     10.5 Collateral Coverage Amount. The Total Outstandings shall not exceed the
Collateral Coverage Amount.



11. EVENTS OF DEFAULT; ACCELERATION; ETC.




     11.1 Events of Default and Acceleration. Upon the occurrence and continuance of any
of the following events of default (each an “Event of Default”):



          (a) default in the payment of any of the Obligations consisting of Reimbursement Obligations;




          (b) default in the payment of any Obligations (other than those specified in clause (a) above)
under any of the Loan Documents, including, without limitation, default in the payment of Fees and
interest, which shall continue for more than three (3) Business Days;




          (c) any representation, warranty, certification or statement of fact made or deemed made by or
on behalf of the Borrower herein, in any Loan Document or in any document delivered in connection
herewith or therewith shall be incorrect or misleading in any material respect when made or deemed
made;




          (d) default in the performance of any of the agreements or covenants of the Borrower set forth
in §§6.5, 6.6, 6.8, 6.11, 7.1, 7.4, 7.5 or §8.2 after the date upon which any applicable grace or
cure periods that are expressly herein provided shall have elapsed;




          (e) default in the performance of any of the agreements or covenants of the Borrower set forth
in §6.4(e) and continuance of such default for a period of 10 days after the date upon which any
applicable grace or cure periods that are expressly herein provided shall have elapsed;




          (f) default in the performance of any of the agreements or covenants of the Borrower set forth
in §8.1 and continuance of such default for a period of 30 days unless a Cure Contribution is made
during such 30 days;




          (g) default in the performance of any of the agreements or covenants of the Borrower under
this Reimbursement and Pledge Agreement or any other Loan Document (other than those specified in
§§11.1(a), (b), (c), (d) or (e) or above) and continuance of such default for a period of 30 days
after the date upon which (x) any Responsible Officer had actual knowledge
of such default or (y) any applicable grace or cure periods that are expressly herein provided
shall have elapsed;




          (h) the Control Agreement is terminated by any party thereto and the Borrower, the
Administrative Agent and another securities intermediary satisfactory to the

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Administrative Agent
have not, as of the date that is three (3) Business Days prior to the effective date of such
termination, entered into a control agreement in form and substance reasonably satisfactory to the
Administrative Agent, such that the Administrative Agent’s first priority lien and security
interest in the Pledged Collateral is preserved unimpaired;




          (i) the Administrative Agent’s security interest in the Pledged Collateral shall cease to be a
first priority perfected security interest, otherwise than in accordance with the terms hereof or
in connection with (i) liens arising by operation of law, so long as the aggregate obligations
secured thereby do not exceed $1,000,000 or (ii) in connection with the Custodial Lien and Set-Off
Rights; or any action at law, suit or in equity or other legal proceeding to cancel, revoke or
rescind this Reimbursement and Pledge Agreement or any other Loan Document shall be commenced by or
on behalf of the Borrower or any of its shareholders, or any court or any other governmental or
regulatory authority or agency of competent jurisdiction shall make a determination that, or issue
a judgment, order, decree or ruling to the effect that, this Reimbursement and Pledge Agreement or
any one or more of the other Loan Documents is illegal, invalid or unenforceable in accordance with
the terms thereof;




          (j) the Borrower shall be enjoined, restrained or in any way prevented by the order of any
court or any administrative or regulatory agency from conducting any material part of its business
and such order shall continue in effect for more than thirty (30) days;




          (k) a Material Party admits in writing that it is generally unable to pay debts as they mature
or become due;




          (l) a Material Party makes a general assignment for the benefit of creditors;




          (m) any of the Pledged Collateral is subject to any lien or encumbrance or any claim or
demand, other than (i) liens arising by operation of law, so long as the aggregate obligations
secured thereby do not exceed $1,000,000 and (ii) the Custodial Lien and Set-Off Rights, that if
unpaid might by law or upon bankruptcy, insolvency or otherwise, be given any priority whatsoever
over the Borrower’s general creditors with respect to the Pledged Collateral or is transferred for
the purposes of the payment of indebtedness not arising hereunder or is taken by attachment,
execution or any other form of legal process;




          (n) the commencement of a proceeding by or against a Material Party under the federal
Bankruptcy Code or the equivalent under Bermuda law, or any other federal, state or Bermuda laws
seeking to adjudicate a Material Party as bankrupt or insolvent, or seeking the liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief or composition of a
Material Party or its debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator, debtor in possession, examiner or other
similar official for a Material Party, the Pledged Collateral or any substantial part of a
Material Party’s property, with or without consent of such Material Party, for any purpose
whatsoever and, in the case of any such proceeding instituted against a Material Party (but not
instituted by it), either such proceeding shall remain unstayed and undismissed for a period of
sixty (60) days; or any of the following actions sought in such proceeding shall occur: the entry

49









 








of an order for relief against, or the appointment of a receiver, trustee, custodian or other
similar official for, a Material Party, the Pledged Collateral or for any substantial part of its
property;




          (o) the assertion of any levy, seizure or attachment on the Pledged Collateral, other than
with respect to the Custodial Lien and Set-Off Rights, or the taking of any action by a regulatory
authority to obtain control (which shall not have been vacated, discharged or stayed or bonded
pending appeal within sixty (60) days from the entry thereof) of any part of the Pledged
Collateral, other than with respect to the Custodial Lien and Set-Off Rights;




          (p) the taking of any action by a regulatory authority to obtain control of the Borrower or a
substantial part of its assets (which shall not have been vacated, discharged or stayed or bonded
pending appeal within sixty (60) days from the entry thereof);




          (q) a Change in Control shall occur; or




          (r) there shall occur any (i) default in the payment when due (subject to any applicable grace
period), whether by acceleration or otherwise, of any other Debt of a Material Party if the
aggregate amount of Debt of the Borrower and/or any other Material Party which is accelerated or
due and payable, or which (subject to any applicable grace period) may be accelerated or otherwise
become due and payable, by reason of such default or defaults is $25,000,000 or more, (ii) default
in the performance or observance of any obligation or condition with respect to any such other Debt
of, or guaranteed by, a Material Party if the effect of such default or defaults is to accelerate
the maturity (subject to any applicable grace period) of any such Debt of $25,000,000 or more in
the aggregate or to permit the holder or holders of such indebtedness of $25,000,000 or more in the
aggregate, or any trustee or agent for such holders, to cause such Debt to become due and payable
prior to its expressed maturity, (iii) a final judgment or judgments which exceed an aggregate of
$25,000,000 (excluding any portion thereof which is covered by insurance so long as the insurer is
reasonably likely to be able to pay and is not denying coverage in writing) shall be rendered
against a Material Party and shall not have been discharged or vacated or had execution thereof
stayed pending appeal within 60 days after entry or filing of such judgment(s);




     If any Event of Default shall have occurred and be continuing, the Administrative Agent may
and, upon the request of the Required Lenders, shall, by notice to the Borrower, terminate the
unused portion of the credit hereunder, and upon such notice being given such unused portion of the
credit hereunder shall terminate immediately and the Lenders and the Fronting Bank shall be
relieved of all further obligations to issue, extend or renew Letters of Credit. No termination of
the credit hereunder shall relieve the Borrower or any of its Subsidiaries of any of the
Obligations and upon such termination of the credit hereunder, all Obligations and all interest
accrued and unpaid thereon shall become immediately due and payable, without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived by the Borrower.
Notwithstanding anything to the contrary contained herein, no notice given or declaration by the
Administrative Agent pursuant to this §11 shall affect (i) the obligation of the
Lenders, the Fronting Bank or the LC Administrator to make any payment under any Letter of
Credit in accordance with the terms of such Letter of Credit or (ii) the obligations of each Lender
in respect of each Letter of Credit.



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     If any Event of Default shall occur and be continuing, the Administrative Agent may or at the
request of the Required Lenders, shall, with or without prior notice to the Borrower, and without
demand for additional collateral, (a) transfer, or cause the Custodian to transfer any or all of
the Pledged Collateral and/or the Collateral Account into the name of the Administrative Agent or
its nominee (including, without limitation, having the Pledged Collateral debited from the
Collateral Account and credited to an account designated by the Administrative Agent) and vote any
Pledged Collateral constituting securities or closely held Capital Stock; (b) require the Borrower
to provide additional Eligible Collateral if the Collateral Coverage Amount is not equal to or
greater than the Total Outstandings at any time, (c) sell at public or private sale any or all of
the Pledged Collateral; (d) apply to, or set off against, the Obligations of the Borrower all or
any portion of the Pledged Collateral, securities or other property of the Borrower in the
possession of the Administrative Agent; (e) convert any of the Pledged Collateral or any proceeds
thereof into the applicable Alternative Currency, with any such conversion costs being considered a
collection expense and added to the Obligations; and (f) at its discretion in its own name or in
the name of the Borrower take any action for the collection of the Pledged Collateral, including
the filing of a proof of claim in insolvency proceedings, and may receive the proceeds thereof and
execute releases therefor. The Borrower agrees that the Administrative Agent has no obligation to
sell or otherwise liquidate the Pledged Collateral in any particular order or to apply the proceeds
thereof to any particular portion of the Obligations. The Borrower further agrees that after the
occurrence and during the continuance of an Event of Default, to the extent that any voting rights
exist, the Administrative Agent shall have no obligation to vote any Pledged Collateral
constituting securities or closely held Capital Stock but shall have the right to do so in its sole
discretion.



     In connection with any secured party’s sale, the Administrative Agent is authorized, if it
deems it advisable to do so, in order to comply with any applicable securities laws, to restrict
the prospective bidders or purchasers to persons who will represent and agree that they are
purchasing the Pledged Collateral for their own account for investment, and not with a view to the
distribution or re-sale thereof. Sales made subject to such restriction shall be deemed to have
been made in a commercially reasonable manner.



     If any Event of Default shall occur and be continuing, the Pledged Collateral and any amounts
received on account of the Obligations (including proceeds of Pledged Collateral) shall be applied
by the Administrative Agent in the following order:




     First, to the Administrative Agent for the account of the Fronting Bank and the
Lenders, Eligible Collateral having a Collateral Coverage Amount equal to the sum of (x)
Dollar Equivalent of the Maximum Drawing Amount;




     Second, to payment of that portion of the Obligations constituting fees,
indemnities, expenses (including expenses incurred in the sale or collection of the Pledged
Collateral) and other amounts (including fees, charges and disbursements of
counsel to the Administrative Agent and amounts payable under Article 3)
payable to the Administrative Agent in its capacity as such;




     Third, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than Reimbursement Obligations, interest and Letter of
Credit



51









 







Fees) payable to the Lenders and the Fronting Bank (including fees, charges and
disbursements of counsel to the respective Lenders and the Fronting Bank and amounts payable
under Article 3), ratably among them in proportion to the respective amounts
described in this clause Third payable to them;




     Fourth, to payment of that portion of the Obligations constituting accrued and
unpaid Letter of Credit Fees and interest on Unpaid Reimbursement Obligations and other
Obligations, ratably among the Lenders and the Fronting Bank in proportion to the respective
amounts described in this clause Fourth payable to them;




     Fifth, to payment of that portion of the Obligations constituting Unpaid
Reimbursement Obligations, ratably among the Lenders and the Fronting Bank in proportion to
the respective amounts described in this clause Fifth held by them; and




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



     Amounts held pursuant to clause First above shall be applied to satisfy drawings under
such Letters of Credit as they occur. If any amount remains after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to the other
Obligations, if any, in the order set forth above.



12. THE ADMINISTRATIVE AGENT.




     12.1 Authorization.



          (a) The Administrative Agent is authorized to take such action on behalf of each of the
Lenders and to exercise all such powers as are hereunder and under any of the other Loan Documents
and any related documents delegated to the Administrative Agent, together with such powers as are
reasonably incident thereto, including the authority, without the necessity of any notice to or
further consent of the Lenders, from time to time to take any action with respect to any Pledged
Collateral which may be necessary to perfect, maintain perfected or insure the priority of the
security interest in and liens upon the Pledged Collateral, provided, that no
duties or responsibilities not expressly assumed herein or therein shall be implied to have been
assumed by the Administrative Agent.




          (b) The LC Administrator shall act on behalf of the Lenders with respect to any Several
Letters of Credit issued by the Lenders and the documents associated therewith and shall have all
of the benefit and immunities provided to the Administrative Agent in this Article 12 with respect
to any acts taken or omissions suffered by the LC Administrator in connection with Several Letters
of Credit issued or proposed to be issued by the Lenders and the application and agreements for
letters of credit pertaining to the Several Letters of Credit as fully as if the
term “Administrative Agent”, as used in this Article 12, included the LC Administrator with
respect to such acts or omissions




          (c) The relationship between the Administrative Agent and each of the Lenders is that of an
independent contractor. The use of the term “Administrative Agent” is for

52









 








convenience only and is used to describe, as a form of convention, the independent contractual relationship between
the Administrative Agent and each of the Lenders. Nothing contained in this Reimbursement and
Pledge Agreement nor the other Loan Documents shall be construed to create an agency, trust or
other fiduciary relationship between the Administrative Agent and any of the Lenders.




          (d) As an independent contractor empowered by the Lenders to exercise certain rights and
perform certain duties and responsibilities hereunder and under the other Loan Documents, the
Administrative Agent is nevertheless a “representative” of the Lenders, as that term is
defined in Article 1 of the Uniform Commercial Code, for purposes of actions for the benefit of the
Lenders and the Administrative Agent with respect to all collateral security and guaranties
contemplated by the Loan Documents. Such actions include the designation of the Administrative
Agent as “secured party”, “mortgagee” or the like on all financing statements and
other documents and instruments, whether recorded or otherwise, relating to the attachment,
perfection, priority or enforcement of any security interests, mortgages or deeds of trust in
collateral security intended to secure the payment or performance of any of the Obligations, all
for the benefit of the Lenders and the Administrative Agent.




          (e) Anything herein to the contrary notwithstanding, none of the Book Managers, Arrangers or
Syndication Agent listed on the cover page hereof shall have any powers, duties or responsibilities
under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as
the Administrative Agent, a Lender, Fronting Bank or the L/C Administrator hereunder.




     12.2 Employees and Administrative Agents. The Administrative Agent may exercise its
powers and execute its duties by or through employees or agents and shall be entitled to take, and
to rely on, advice of counsel concerning all matters pertaining to its rights and duties under this
Reimbursement and Pledge Agreement and the other Loan Documents. The Administrative Agent may
utilize the services of such Persons as the Administrative Agent in its sole discretion may
reasonably determine.



     12.3 No Liability. Neither the Administrative Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their duties nor any agent
or employee thereof, shall be liable for any waiver, consent or approval given or any action taken,
or omitted to be taken, in good faith by it or them hereunder or under any of the other Loan
Documents, or in connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Administrative Agent or such other
Person, as the case may be, shall be liable for losses due to its willful misconduct or gross
negligence.



     12.4 No Representations.



          12.4.1 General. The Administrative Agent shall not be responsible for the execution
or validity or enforceability of this Reimbursement and Pledge Agreement, the Letters of Credit,
any of the other Loan Documents or any instrument at any time constituting, or intended to
constitute, collateral security for the Obligations, or for the value of any such collateral
security or for the validity, enforceability or collectibility of any such amounts owing

53









 








with respect to any of the Obligations, or for any recitals or statements, warranties or representations
made herein or in any of the other Loan Documents or in any certificate or instrument hereafter
furnished to it by or on behalf of the Borrower or any of its Subsidiaries, or be bound to
ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants
or agreements herein or in any instrument at any time constituting, or intended to constitute,
collateral security for the Obligations or to inspect any of the properties, books or records of
the Borrower or any of its Subsidiaries. The Administrative Agent shall not be bound to ascertain
whether any notice, consent, waiver or request delivered to it by the Borrower or any Lender shall
have been duly authorized or is true, accurate and complete. The Administrative Agent has not made
nor does it now make any representations or warranties, express or implied, nor does it assume any
liability to the Lenders, with respect to the credit worthiness or financial conditions of the
Borrower or any of its Subsidiaries. Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based upon such information
and documents as it has deemed appropriate, made its own credit analysis and decision to enter into
this Reimbursement and Pledge Agreement.




          12.4.2 Closing Documentation, etc. For purposes of determining compliance with the
conditions set forth in §9, each Lender that has executed this Reimbursement and Pledge Agreement
shall be deemed to have consented to, approved or accepted, or to be satisfied with, each document
and matter either sent, or made available, by the Administrative Agent or the Arranger to such
Lender for consent, approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to such Lender, unless an officer of the
Administrative Agent or the Arranger acting upon the Borrower’s account shall have received notice
from such Lender not less than two (2) days prior to the Closing Date specifying such Lender’s
objection thereto and such objection shall not have been withdrawn by notice to the Administrative
Agent or the Arranger to such effect on or prior to the Closing Date.




     12.5 Payments.



          12.5.1 Payments to Administrative Agent. A payment by the Borrower to the
Administrative Agent hereunder or any of the other Loan Documents for the account of any Lender
shall constitute a payment to such Lender. The Administrative Agent agrees promptly to distribute
to each Lender such Lender’s pro rata share of payments received by the
Administrative Agent for the account of the Lenders except as otherwise expressly provided herein
or in any of the other Loan Documents.




          12.5.2 Distribution by Administrative Agent. If in the opinion of the Administrative
Agent the distribution of any amount received by it in such capacity hereunder or under any of the
other Loan Documents might involve it in liability, it may refrain from making distribution until
its right to make distribution shall have been adjudicated by a court of competent jurisdiction.
If a court of competent jurisdiction shall adjudge that any amount
received and distributed by the Administrative Agent is to be repaid, each Person to whom any
such distribution shall have been made shall either repay to the Administrative Agent its
proportionate share of the amount so adjudged to be repaid or shall pay over the same in such
manner and to such Persons as shall be determined by such court.




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          12.5.3 Delinquent Lenders. Notwithstanding anything to the contrary contained in this
Reimbursement and Pledge Agreement or any of the other Loan Documents, any Lender that (a) fails
(i) to fund a drawing under a Several Letter of Credit or purchase any Letter of Credit
Participation that it is required to fund or purchase, as the case may be, within one Business Day,
(ii) to comply with the provisions of §14.1 with respect to making dispositions and arrangements
with the other Lenders, where such Lender’s share of any payment received, whether by set-off or
otherwise, is in excess of its pro rata share of such payments due and payable to
all of the Lenders, in each case as, when and to the full extent required by the provisions of this
Credit Agreement unless such failure has been cured or is the subject of a good faith dispute or
(b) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding, shall
be deemed delinquent (a “Delinquent Lender”) and shall be deemed a Delinquent Lender until
such time as such delinquency is satisfied.




     12.6 Holders of Participations. The Administrative Agent may deem and treat the
purchaser of any Letter of Credit Participation as the absolute owner or purchaser thereof for all
purposes hereof until it shall have been furnished in writing with a different name by such
purchaser or by a subsequent holder, assignee or transferee.



     12.7 Indemnity. The Lenders ratably agree hereby to indemnify and hold harmless the
Administrative Agent and its Affiliates from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including any expenses for
which the Administrative Agent or such Affiliate has not been reimbursed by the Borrower as
required by §14.3), and liabilities of every nature and character arising out of or related to this
Reimbursement and Pledge Agreement or any of the other Loan Documents (including without
limitation, the Administrative Agent’s indemnity obligations under the Control Agreement), or the
transactions contemplated or evidenced hereby or thereby, or the Administrative Agent’s actions
taken hereunder or thereunder, except to the extent that any of the same shall be directly caused
by the Administrative Agent’s willful misconduct or gross negligence.



     12.8 Administrative Agent as Lender. In its individual capacity, Bank of America
shall have the same obligations and the same rights, powers and privileges in respect to its
Commitment and as the purchaser of any Letter of Credit Participations, as it would have were it
not also the Administrative Agent.



     12.9 Resignation. The Administrative Agent may resign at any time by giving sixty
(60) days prior written notice thereof to the Lenders and the Borrower; provided that any such
resignation by Bank of America shall also constitute its resignation as Fronting Bank and as LC
Administrator (except as to Letters of Credit issued by it and then outstanding). Upon any such
resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent.
Unless a Default or Event of Default shall have occurred and be continuing, such successor
Administrative Agent shall be reasonably acceptable to the Borrower. If no successor
Administrative Agent shall have been so appointed by the Required Lenders and shall have
accepted such appointment within thirty (30) days after the retiring Administrative Agent’s giving
of notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders,
appoint a successor Administrative Agent, which shall be a financial institution (a) having a
senior unsecured debt rating of not less than “A+” or its equivalent by S&P and (b) so long as no
Default or Event of Default has occurred, approved by the Borrower in their



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reasonable discretion. If no successor shall have been so appointed and accepted within sixty (60) days after the retiring
Administrative Agent’s giving of notice of resignation, then the retiring Administrative Agent’s
resignation shall nonetheless become effective and (1) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and (2) the Required Lenders shall perform the
duties of the Administrative Agent (and all payments and communications provided to be made by, to
or through the Administrative Agent shall instead be made by or to each Lender directly) until such
time as the Required Lenders appoint a successor Administrative Agent as provided for above in this
paragraph; provided, however, that the Administrative Agent shall retain all its rights, duties,
and obligations with respect to the Collateral under the Loan Documents until a successor
Administrative Agent has accepted its appointment and all steps necessary to substitute the
successor Administrative Agent as the “secured party” with respect to the Collateral have been
taken. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and obligations hereunder.
After any retiring Administrative Agent’s resignation, the provisions of this Reimbursement and
Pledge Agreement and the other Loan Documents shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as Administrative Agent.




     12.10 Administrative Agent May File Proofs of Claim.



          (a) In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial, administrative or like
proceeding or any assignment for the benefit of creditors relative to the Borrower or any of its
Subsidiaries, the Administrative Agent (irrespective of whether the principal of any Reimbursement
Obligation or Unpaid Reimbursement Obligation shall then be due and payable as herein expressed or
by declaration or otherwise and irrespective of whether the Administrative Agent shall have made
any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding,
under any such assignment or otherwise:





     (i) to file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Obligations that are owing and unpaid and to file such other
documents as may be necessary or advisable in order to have the claims of the Lenders, the
Fronting Bank, the LC Administrator and the Administrative Agent (including any claim for
the reasonable compensation, expenses, disbursements and advances of the Lenders, the
Fronting Bank, the LC Administrator and the Administrative Agent and their respective agents
and counsel and all other amounts due the Lenders, the Fronting Bank, the LC Administrator
and the Administrative Agent under this Reimbursement and Pledge Agreement) allowed in such
proceeding or under any such assignment; and




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



          (b) Any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar
official in any such proceeding or under any such assignment is hereby authorized by

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each Lender, the Fronting Bank and the LC Administrator to make such payments to the Administrative Agent and,
in the event that the Administrative Agent shall consent to the making of such payments directly to
the Lenders, the Fronting Bank and/or the LC Administrator, nevertheless to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and
advances of the Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under this Reimbursement and Pledge Agreement.




          (c) Nothing contained herein shall authorize the Administrative Agent to consent to or accept
or adopt on behalf of any Lender, the Fronting Bank or the LC Administrator any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations owed to such
Lender, the Fronting Bank or the LC Administrator or the rights of any Lender, the Fronting Bank or
the LC Administrator or to authorize the Administrative Agent to vote in respect of the claim of
any Lender, the Fronting Bank or the LC Administrator in any such proceeding or under any such
assignment.




     12.11 Notification of Defaults and Events of Default. Each Lender hereby agrees that,
upon learning of the existence of a Default or an Event of Default, it shall promptly notify the
Administrative Agent thereof. The Administrative Agent hereby agrees that upon receipt of any
notice under this §12.11 it shall promptly notify the other Lenders of the existence of such
Default or Event of Default.



     12.12 Duties in the Case of Enforcement. In case one of more Events of Default have
occurred and shall be continuing, and whether or not acceleration of the Obligations shall have
occurred, the Administrative Agent shall, if (a) so requested by the Required Lenders and (b) the
Lenders have provided to the Administrative Agent such additional indemnities and assurances
against expenses and liabilities as the Administrative Agent may reasonably request, proceed to
enforce the provisions of this Reimbursement and Pledge Agreement and the other Loan Documents
authorizing the sale or other disposition of all or any part of the Pledged Collateral and exercise
all or any such other legal and equitable and other rights or remedies as it may have in respect of
such Pledged Collateral. The Required Lenders may direct the Administrative Agent in writing as to
the method and the extent of any such sale or other disposition, the Lenders hereby agreeing to
indemnify and hold the Administrative Agent, harmless from all liabilities incurred in respect of
all actions taken or omitted in accordance with such directions, provided that the Administrative
Agent need not comply with any such direction to the extent that the Administrative Agent
reasonably believes the Administrative Agent’s compliance with such direction to be unlawful or
commercially unreasonable in any applicable jurisdiction.



13. SUCCESSORS AND ASSIGNS.




     13.1 General Conditions. The provisions of this Reimbursement and Pledge Agreement
shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written consent of each
Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder
except (a) to an Eligible Assignee in accordance with the provisions of §13.2, or (b) by way of
participation in accordance with the provisions of §13.4 or (c) by way of pledge or



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assignment of a security interest subject to the restrictions of §13.6 (and any other attempted assignment or
transfer by any party hereto shall be null and void). Nothing in this Reimbursement and Pledge
Agreement, expressed or implied, shall be construed to confer upon any Person (other than the
parties hereto, their respective successors and assigns permitted hereby, Participants to the
extent provided in §13.4 and, to the extent expressly contemplated hereby, the Related Parties of
each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Reimbursement and Pledge Agreement or any of the other Loan Documents.




     13.2 Assignments. Any Lender may at any time assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Reimbursement and Pledge Agreement
(including all or a portion of its Commitments); provided, that (a) except in the
cases of an assignment of the entire remaining amount of the assigning Lender’s Commitments or, of
an assignment to a Lender or a Lender Affiliate, the aggregate amount of the Commitments being
assigned shall not be less than $5,000,000 unless each of the Administrative Agent and, so long as
no Default or Event of Default has occurred and is continuing, the Borrower, otherwise consent
(each such consent not to be unreasonably withheld or delayed); (b) each partial assignment shall
be made as an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Reimbursement and Pledge Agreement with respect to the Commitment assigned,
it being understood that non-pro rata assignments of or among the Commitments and the Reimbursement
Obligations are not permitted; (c) any assignment of a Commitment must be approved by the
Administrative Agent, the Fronting Bank and so long as no Default or Event of Default has occurred
and is continuing, the Borrower, (such approval of the Borrower not to be unreasonably withheld),
unless the Person that is the proposed assignee is itself a Lender with a Commitment or an
Affiliate of a Lender with a Commitment; (d) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with a processing and
recordation fee of $3,500 (provided, that such processing and recordation fee may
be waived by the Administrative Agent, in its sole discretion) and the Eligible Assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire;
and (e) if applicable, the LC Administrator shall have delivered to the respective beneficiaries of
outstanding Several Letters of Credit amendments (or, in the case of any Several Letter of Credit
issued individually by the Lenders, a replacement Several Letter of Credit in exchange for and the
return or cancellation of the original Several Letter of Credit) which reflect any changes in the
Lenders and/or the Commitment Percentages resulting from such assignment. Subject to acceptance
and recording thereof by the Administrative Agent pursuant to §13.3, from and after the effective
date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party
to this Reimbursement and Pledge Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under this Reimbursement and
Pledge Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its obligations
under this Reimbursement and Pledge Agreement (and, in the case of an Assignment and Assumption
covering all of the assigning Lender’s rights and obligations under this Reimbursement and Pledge
Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the
benefits of §§14.3 and 14.4 with respect to facts and circumstances occurring prior to the
effective date of such assignment. Any assignment or transfer by a Lender of rights or obligations
under this Reimbursement and Pledge Agreement that does not comply



58









 




with this paragraph shall be
treated for purposes of this Reimbursement and Pledge Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with §13.4.




     13.3 Register. The Administrative Agent, acting solely for this purpose as an agent
of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this Reimbursement and
Pledge Agreement, notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.



     13.4 Participations. Any Lender may at any time, without the consent of, or notice
to, the Borrower or the Administrative Agent, sell participations to any Person (other than a
natural person) (each, a “Participant”) in all or a portion of such Lender’s rights and/or
obligations under this Reimbursement and Pledge Agreement (including all or a portion of its
Commitment); provided, that (a) such Lender’s obligations under this Reimbursement
and Pledge Agreement shall remain unchanged, (b) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (c) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this Reimbursement and Pledge
Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Reimbursement and Pledge
Agreement and to approve any amendment, modification or waiver of any provision of this
Reimbursement and Pledge Agreement; provided, that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver that would extend the term or increase the amount of the Commitment of such
Lender as it relates to such Participant, reduce the amount of any Letter of Credit Fee to which
such Participant is entitled or extend any regularly scheduled payment date for principal or
interest. Subject to §13.5, the Borrower agrees that each Participant shall be entitled to the
benefits of §§3.3 and 3.4 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to §13.2. To the extent permitted by law, each Participant also shall be
entitled to the benefits of §14.2 as though it were a Lender, provided such Participant agrees to
be subject to §14.2 as though it were a Lender.



     13.5 Payments to Participants. A Participant shall not be entitled to receive any
greater payment under §§3.3 and 3.4 than the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant.



     13.6 Miscellaneous Assignment Provisions. A Lender may at any time grant a security
interest in all or any portion of its rights under this Reimbursement and Pledge Agreement to
secure obligations of such Lender, in connection with any pledge or assignment to secure
obligations to any of the twelve Federal Reserve Administrative Agents organized under §4 of the
Federal Reserve Act, 12 U.S.C. §341; provided that no such grant shall release such Lender



59









 




from any of its obligations hereunder, provide any voting rights hereunder to the secured party thereof,
substitute any such secured party for such Lender as a party hereto or affect any rights or
obligations of the Borrower or the Administrative Agent hereunder.




     13.7 Assignee or Participant Affiliated with the Borrower. If any assignee Lender is
an Affiliate of the Borrower, then any such assignee Lender shall have no right to vote as a Lender
hereunder or under any of the other Loan Documents for purposes of granting consents or waivers or
for purposes of agreeing to amendments or other modifications to any of the Loan Documents or for
purposes of making requests to the Administrative Agent pursuant to §11, and the determination of
the Required Lenders shall for all purposes of this Reimbursement and Pledge Agreement and the
other Loan Documents be made without regard to such assignee Lender’s interest in any of the
Reimbursement Obligations. If any Lender sells a participating interest in any of the
Reimbursement Obligations to a Participant, and such Participant is the Borrower or an Affiliate of
the Borrower, then such transferor Lender shall promptly notify the Administrative Agent of the
sale of such participation. A transferor Lender shall have no right to vote as a Lender hereunder
or under any of the other Loan Documents for purposes of granting consents or waivers or for
purposes of agreeing to amendments or modifications to any of the Loan Documents or for purposes of
making requests to the Administrative Agent pursuant to §11 to the extent that such participation
is beneficially owned by the Borrower or any Affiliate of the Borrower, and the determination of
the Required Lenders shall for all purposes of this Reimbursement and Pledge Agreement and the
other Loan Documents be made without regard to the interest of such transferor Lender in the
Reimbursement Obligations to the extent of such participation.



14. PROVISIONS OF GENERAL APPLICATIONS.




     14.1 Authorization to File Financing Statements. The Administrative Agent is hereby
authorized to file (a) in any Uniform Commercial Code filing office a financing statement naming
the Borrower as the debtor and indicating the collateral as the Pledged Collateral, including, the
Collateral Account and all property held therein and any and all proceeds of any thereof, whether
now or hereafter existing or arising and (b) any registration of the Lien in Bermuda the
Administrative Agent deems appropriate.



     14.2 Setoff. The Borrower hereby grants to the Administrative Agent and each of the
Lenders a continuing lien, security interest and right of set-off as security for all liabilities
and obligations to the Administrative Agent and each Lender, whether now existing or hereafter
arising, upon and against all deposits, credits, collateral and property, now or hereafter in the
possession, custody, safekeeping or control of the Administrative Agent or such Lender or any
Lender Affiliate and their successors and assigns or in transit to any of them. Regardless of
the adequacy of any collateral, if any of the Obligations are due and payable and have not been
paid or any Event of Default shall have occurred, any deposits or other sums credited by or due
from any of the Lenders to the Borrower and any securities or other property of the Borrower in the
possession of such Lender may be applied to or set off by such Lender against the payment of
Obligations of the Borrower and any and all other liabilities, direct, or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, of the Borrower to such
Lender. ANY AND ALL RIGHTS TO REQUIRE ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT
TO ANY OTHER COLLATERAL WHICH



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SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH
RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED.




     14.3 Expenses. The Borrower agrees to pay (a) the reasonable costs of producing and
reproducing this Reimbursement and Pledge Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (b) the reasonable fees, expenses and disbursements of
the Administrative Agent’s Special Counsel or any local counsel to the Administrative Agent
incurred in connection with the preparation, syndication, administration or interpretation of the
Loan Documents and other instruments mentioned herein, each closing hereunder, any amendments,
modifications, approvals, consents or waivers hereto or hereunder, or the cancellation of any Loan
Document upon payment in full of all of the Obligations or pursuant to any terms of such Loan
Document for providing for such cancellation, (c) the fees, expenses and disbursements of the
Administrative Agent and the Arrangers incurred by the Administrative Agent or the Arrangers in
connection with the preparation, syndication, administration or interpretation of the Loan
Documents and other instruments mentioned herein, (d) all reasonable out-of-pocket expenses
(including without limitation reasonable attorneys’ fees and costs, which attorneys may be
employees of any Lender or the Administrative Agent, and reasonable consulting, accounting,
appraisal, investment banking and similar professional fees and charges so long as the engagement
of such professionals is reasonable) incurred by any Lender or the Administrative Agent in
connection with (i) the enforcement of or preservation of rights under any of the Loan Documents
against the Borrower or any of its Subsidiaries or the administration thereof after the occurrence
of a Default or Event of Default and (ii) any litigation or proceeding arising hereunder or related
hereto or in any way related to any Lender’s or the Administrative Agent’s relationship hereunder
with the Borrower or any of its Subsidiaries and (e) all reasonable fees, expenses and
disbursements of any Lender or the Administrative Agent incurred in connection with UCC searches or
UCC filings. The covenants contained in this §14.3 shall survive payment or satisfaction in full
of all other obligations.



     14.4 Indemnification. The Borrower jointly and severally agrees to indemnify and hold
harmless the Administrative Agent, the Fronting Bank, the LC Administrator, the Lenders and their
respective Affiliates, directors, officers, employees, agents and advisors (collectively, the
“Indemnitees”) from and against any and all claims, actions and suits whether groundless or
otherwise, and from and against any and all liabilities, losses, damages and expenses of every
nature and character arising out of this Reimbursement and Pledge Agreement or any of the other
Loan Documents or the transactions contemplated hereby including, without limitation, (a) any
actual or proposed use by the Borrower or any of its Subsidiaries of the Letters
of Credit, (b) any payments to the Custodian or in connection with the Pledged Collateral or
(c) the Borrower entering into or performing this Reimbursement and Pledge Agreement or any of the
other Loan Documents, in each case including, without limitation, the reasonable fees and
disbursements of counsel and allocated costs of internal counsel incurred in connection with any
such investigation, litigation or other proceeding; provided however that the Borrower shall have
no obligation to indemnify any Indemnitee for any liability, losses, damages or expenses resulting
solely from the gross negligence or willful misconduct of such Indemnitee. No Indemnitee shall be
liable for any damages arising from the use by others of any information or other materials
obtained through IntraLinks or other similar information transmission systems in connection



61









 




with this Reimbursement and Pledge Agreement, nor shall any Indemnitee have any liability for any
indirect or consequential damages relating to this Reimbursement and Pledge Agreement or any other
Loan Document or arising out of its activities in connection herewith or therewith (whether before
or after the Closing Date). Subject to §14.5 below, in litigation, or the preparation therefor,
the Indemnitees shall be entitled to select their own counsel and, in addition to the foregoing
indemnity, the Borrower agrees to pay promptly the reasonable fees and expenses of such counsel.
If, and to the extent that the obligations of the Borrower under this §14.4 are unenforceable for
any reason, the Borrower hereby agrees to make the maximum contribution to the payment in
satisfaction of such obligations which is permissible under applicable law. The covenants
contained in this §14.4 shall survive payment or satisfaction in full of all other Obligations.




     14.5 Payments by Borrower with respect to Indemnified Persons.



          (a) Any Person entitled to reimbursement for expenses pursuant to §14.3 or indemnification
pursuant to §14.4 (an “Indemnified Person”) shall promptly notify the Borrower in writing as to any
action, claim, suit, proceeding or investigation for which indemnity may be sought. After such
notice to the Borrower, so long as the position of the Borrower is not adverse to that of the
Indemnified Person, the Borrower shall be entitled to participate in, and to the extent that it
shall elect by written notice delivered to such Indemnified Person promptly after receiving the
aforesaid notice of such Indemnified Person, to assume the defense thereof with counsel reasonably
satisfactory to such Indemnified Person to represent such Indemnified Person in such action, claim,
suit, proceeding or investigation and shall pay as incurred the reasonable fees and expenses of
such counsel related to such action, claim, suit, proceeding or investigation.




          (b) In any action, claim, suit, proceeding or investigation, any Indemnified Person shall have
the right to retain its own separate counsel at such Indemnified Person’s own expense and not
subject to reimbursement by the Borrower; provided, however, that the Borrower shall pay as
incurred the reasonable fees and expenses of such counsel incurred in connection with
investigating, preparing, defending, paying, settling or compromising any action, claim, suit,
proceeding or investigation if (i) the parties to such action, claim, suit, proceeding or
investigation include both the Indemnified Person and the Borrower and there may be legal defenses
available to such Indemnified Person which are different from or additional to those available to
the Borrower; (ii) the use of counsel chosen by the Borrower to represent both the Borrower and
such Indemnified Person would present such counsel with an actual or potential conflict of
interest; (iii) the Borrower shall not have employed satisfactory counsel to represent the
Indemnified Person within a reasonable time after notice of the institution of such action, claim,
suit, proceeding or investigation; (iv) the Borrower have not provided the
Indemnified Person with adequate assurance of its acceptance of its liability for the
underlying claim pursuant to §14.4 and of its financial capacity to pay the full amount of such
underlying claim or (v) the Borrower shall authorize the Indemnified Person to employ separate
counsel (in addition to any local counsel) at the expense of the Borrower. The Borrower shall not,
in connection with any action, claim, suit, proceeding or investigation, be liable for the fees and
expenses of more than one separate firm of legal counsel for all Indemnified Parties, except to the
extent the use of one counsel to represent all Indemnified Persons would present such counsel with
an actual or potential conflict of interest, and in the event that separate counsel is to

62









 








be retained to represent one or more Indemnified Parties, such separate counsel shall be chosen by
Administrative Agent.




          (c) Each Indemnified Person agrees that, unless the Borrower is unable to comply with the
provisions set forth in §14.5(a) above, without the Borrower’s prior written consent (not to be
unreasonably withheld), it will not settle, compromise or consent to the entry of any judgment in
or otherwise seek to terminate any claim, action, suit, proceeding or investigation in respect of
which indemnification could be sought hereunder unless such settlement, compromise, consent or
termination includes an unconditional release of the Borrower and the Indemnified Person from all
liabilities arising out of such claim, action, suit, proceeding or investigation.




     14.6 Survival of Covenants, Etc. All covenants, agreements, representations and
warranties made herein, in any of the other Loan Documents to which the Borrower is a party or in
any documents or other papers delivered by or on behalf of the Borrower or any of its Subsidiaries
pursuant hereto shall be deemed to have been relied upon by the Lenders and the Administrative
Agent, notwithstanding any investigation heretofore or hereafter made by any of them, and shall
survive the issuance, extension or renewal of any Letters of Credit as herein contemplated, and
shall continue in full force and effect so long as any Letter of Credit or any amount due under
this Reimbursement and Pledge Agreement or any of the other Loan Documents remains outstanding or
the Administrative Agent has any obligation to issue, extend or renew any Letter of Credit, and for
such further time as may be otherwise expressly specified in this Reimbursement and Pledge
Agreement. All statements contained in any Letter of Credit Application, Compliance Certificate or
Pledged Collateral Certificate delivered to any Lender or the Administrative Agent at any time by
or on behalf of the Borrower shall constitute representations and warranties by the Borrower
hereunder.



     14.7 Notices and Other Communications; Facsimile Copies.



          (a) General. Unless otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing (including by facsimile transmission).
All such written notices shall be mailed certified or registered mail, faxed or delivered to the
applicable address, facsimile number or (subject to subsection (c) below) electronic mail address,
and all notices and other communications expressly permitted hereunder to be given by telephone
shall be made to the applicable telephone number, as follows:





     (i) if to the Borrower, the Administrative Agent, the Fronting Bank or the LC
Administrator, to the address, facsimile number, electronic mail address or telephone number
specified for such Person on Schedule 14.7 or to such other address, facsimile
number, electronic mail address or telephone number as shall be designated by such
party in a notice to the other parties; and




     (ii) if to any other Lender, to the address, facsimile number, electronic mail address
or telephone number specified in its Administrative Questionnaire or to such other address,
facsimile number, electronic mail address or telephone number as shall be designated by such
party in a notice to the Borrower, the Administrative Agent, the Fronting Bank and the LC
Administrator.



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




          (b) Electronic Communications. Notices and other communications to the Lenders
hereunder may be delivered or furnished by electronic communication (including e-mail and Internet
or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that
the foregoing shall not apply to notices to any Lender pursuant to §2 if such Lender has notified
the Administrative Agent that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be limited to particular
notices or communications.




          (c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS
MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Administrative Agent or any of its Related Parties (collectively, the “Agent
Parties”) have any liability to the Borrower, any Lender, the LC Administrator or any other
Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract
or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of Borrower
Materials through the Internet, except to the extent that such losses, claims, damages, liabilities
or expenses resulted solely from the gross negligence or willful misconduct of such Agent Party;
provided, however, that in no event shall any Agent Party have any liability to the
Borrower, any Lender, the LC Administrator or any other Person for indirect, special, incidental,
consequently or punitive damages (as opposed to direct or actual damages).




          (d) Effectiveness of Facsimile Documents and Signatures. Loan Documents may be
transmitted and/or signed by facsimile. The effectiveness of any such documents and
signatures shall, subject to applicable law, have the same force and effect as manually-signed
originals and shall be binding on the Borrower, the Administrative Agent, the Fronting Bank, the LC
Administrator and the Lenders. The Administrative Agent may also require that any such documents
and signatures be confirmed by a manually-signed original thereof; provided, however, that the
failure to request or deliver the same shall not limit the effectiveness of any facsimile document
or signature.




          (e) Reliance by Administrative Agent and Lenders. The Administrative Agent, the
Fronting Bank, the LC Administrator and the Lenders shall be entitled to rely and act

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upon any notices purportedly given by or on behalf of the Borrower even if (i) such notices were not made in
a manner specified herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Borrower shall indemnify the Administrative Agent, the Fronting Bank,
the LC Administrator and each Lender from all losses, costs, expenses and liabilities resulting
from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower.
All telephonic notices to and other communications with the Administrative Agent may be recorded by
the Administrative Agent, and each of the parties hereto hereby consents to such recording.




     14.8 Miscellaneous. This Reimbursement and Pledge Agreement and the Pledged
Collateral shall not be in any way affected by the extension of time or renewal of any of the
Obligations, the modification in any manner or the taking or release in whole or in part of any
security therefor or the obligations of the Borrower or any endorsers, sureties, guarantors or
other parties or the granting of any other indulgences to the Borrower. No termination of this
Reimbursement and Pledge Agreement shall be effective until the Obligations of the Borrower secured
by this Reimbursement and Pledge Agreement have been satisfied in full.



     14.9 Successors and Assigns. This Reimbursement and Pledge Agreement shall inure to
the benefit of the Administrative Agent, the Fronting Bank, the LC Administrator and the Lenders
and its and their successors and assigns and shall bind the Borrower and the successors,
representatives, legal representatives and/or heirs and assigns of the Borrower.



     14.10 Choice of Law/Binding Effect. This Reimbursement and Pledge Agreement and the
rights and obligations of the parties hereunder shall be construed and interpreted in accordance
with the laws of the State of New York, excluding the laws applicable to conflicts or choice of law
(other than Section 5-1401 of the New York General Obligations Law). Regardless of any provision
in any other agreement, for purposes of Article 9 of the uniform commercial code as in effect in
the State of New York, New York shall be deemed to be the Administrative Agent’s, the Fronting
Bank’s, the LC Administrator’s and the Lenders’ jurisdiction.



     14.11 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES ITS RIGHT TO A
JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS
REIMBURSEMENT AND PLEDGE AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY,
INCLUDING ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF ANY OF THE PARTIES
HERETO RELATING TO ENFORCEMENT OF THE LOAN DOCUMENTS AND AGREES THAT IT WILL NOT SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED. Except as prohibited by law, each of the Borrower, the Fronting Bank, the LC
Administrator, the Lenders and the Administrative Agent hereby waives any right it may have to
claim or recover in any litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages



65









 




or any damages other than, or in addition to, actual damages.
The Borrower (a) certifies that no representative, agent or attorney of any Lender, the Fronting
Bank, the LC Administrator or the Administrative Agent has represented, expressly or otherwise,
that such Lender, the Fronting Bank, the LC Administrator or the Administrative Agent would not, in
the event of litigation, seek to enforce the foregoing waivers and (b) acknowledges that the
Administrative Agent, the Fronting Bank, the LC Administrator and the Lenders have been induced to
enter into this Reimbursement and Pledge Agreement, the other Loan Documents to which it is a party
by, among other things, the waivers and certifications contained herein.




     14.12 Delivery of Additional Documents. The Borrower agrees to execute and deliver to
the Administrative Agent and/or third parties designated by the Administrative Agent such
additional documents, notices, requests and other instruments as the Administrative Agent deems
reasonably necessary or advisable to protect the Administrative Agent’s rights under this
Reimbursement and Pledge Agreement.



     14.13 Confidentiality. Each Lender agrees to maintain and to cause its Affiliates to
maintain the confidentiality of all information provided to it by the Borrower or any Subsidiary of
the Borrower, or by the Administrative Agent on behalf of the Borrower or any Subsidiary of the
Borrower under this Reimbursement and Pledge Agreement or any other Loan Document, and neither it
nor any of its Affiliates shall use any such information other than in connection with or in
enforcement of this Reimbursement and Pledge Agreement and the other Loan Documents or in
connection with other business now or hereafter existing or contemplated directly with the Borrower
or any Subsidiary; except to the extent such information (i) was or becomes generally available to
the public other than as a result of disclosure by the Lender or its Affiliates or in violation of
any applicable confidentiality agreement known to the Lender, or (ii) was or becomes available on a
non-confidential basis from a source other than the Borrower, provided that such source is not
bound by a confidentiality agreement with the Borrower and/or with any restrictions on its use
known to the Lender; provided, however, that any Lender may disclose such information (A) at the
request or pursuant to any requirement of any governmental authority or self regulatory body to
which the Lender is subject or in connection with an examination of such Lender by any such
authority; provided that the Lender makes reasonable efforts to request confidential treatment of
such information to the extent permitted by law; (B) pursuant to subpoena or other court process;
(C) as may be required (in such Lender’s reasonable judgment) in accordance with the provisions of
any applicable requirement of law; (D) to the extent reasonably required in connection with any
litigation or proceeding to which the Administrative Agent, any Lender or their respective
Affiliates may be party; (E) to the extent reasonably required in connection with the exercise of
any remedy hereunder or under any other Loan Document; (F) to such Lender’s independent auditors
and other professional advisors who
agree to the confidentiality provisions hereof; and (G) to any Participant or Eligible
Assignee, actual or potential, provided that such Person agrees in writing to keep such information
confidential to the same extent required of the Lenders hereunder.



     14.14 Consents, Amendments, Waivers, Etc. Any consent or approval required or
permitted by this Reimbursement and Pledge Agreement to be given by the Lenders may be given, and
any term of this Reimbursement and Pledge Agreement, the other Loan Documents or any other
instrument related hereto or mentioned herein may be amended, and the performance or observance by
the Borrower or any of its Subsidiaries of any terms of this Reimbursement and



66









 




Pledge Agreement, the other Loan Documents or such other instrument or the continuance of any Default or Event of
Default may be waived (either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Borrower and the written consent of
the Required Lenders. Notwithstanding the foregoing, no amendment, modification or waiver shall:




          (a) without the written consent of the Borrower and each Lender directly affected thereby:





     (i) reduce or forgive the principal amount of any Reimbursement Obligations, or reduce
the Letter of Credit Fee, the Commitment Fee or interest on amounts due hereunder or under
the other Loan Documents (other than interest accruing pursuant to §2.4.4 following the
effective date of any waiver by the Required Lenders of the Default or Event of Default
relating thereto);




     (ii) increase the amount of such Lender’s Commitment or extend the expiration date of
such Lender’s Commitment;




     (iii) postpone or extend either Commitment Termination Date or any other regularly
scheduled dates for payments of Reimbursement Obligations or any Fees or other amounts
payable to such Lender (it being understood that (A) a waiver of the application of the
Default Rate and (B) any vote to rescind any exercise of remedies made pursuant to §11 of
amounts owing with respect to the Obligations shall require only the approval of the
Required Lenders); and




     (iv) other than pursuant to a transaction permitted by the terms of this Reimbursement
and Pledge Agreement, release all or substantially all of the Pledged Collateral (excluding,
if the Borrower or any Subsidiary of the Borrower becomes a debtor under the federal
Bankruptcy Code, the release of “cash collateral”, as defined in Section 363(a) of the
federal Bankruptcy Code pursuant to a cash collateral stipulation with the debtor approved
by the Required Lenders) or amend the multipliers set forth in Schedule 1.2;



          (b) without the written consent of all of the Lenders, amend or waive this §14.14 or the
definition of Required Lenders;




          (c) without the written consent of the Administrative Agent, amend or waive §12, the amount or
time of payment of any fees or expenses payable to the Administrative Agent or any other provision
applicable to the Administrative Agent;




          (d) Without the written consent of the Fronting Bank and the LC Administrator, the rights or
duties of the Fronting Bank and the LC Administrator under this Reimbursement and Pledge Agreement
or any Letter of Credit Application relating to any Letter of Credit issued or to be issued by it.



No waiver shall extend to or affect any obligation not expressly waived or impair any right
consequent thereon. No course of dealing or delay or omission on the part of the Administrative
Agent or any Lender in exercising any right shall operate as a waiver thereof or otherwise be

67









 








prejudicial thereto. No notice to or demand upon the Borrower shall entitle the Borrower to other
or further notice or demand in similar or other circumstances. The Fee Letter may be amended, or
rights or privileges thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Delinquent Lender shall have any right to
approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of
such Lender may not be increased or extended without the consent of such Lender.




     14.15 Agent for Service. The Borrower has irrevocably designated, appointed, and
empowered CT Corporation System, with an office on the date hereof at 111 Eighth Avenue, New York,
New York 10011 as its designee, appointee and agent to receive and accept for and on its behalf,
service of any and all legal process, summons, notices and documents which may be served in any
action, suit or proceedings brought against the Borrower in any United States or State of New York
court. If for any reason such designee, appointee and agent hereunder shall cease to be available
to act as such, the Borrower agrees to designate a new designee, appointee and agent in the Borough
of Manhattan, The City of New York on the terms and for the purposes of this §14.15 satisfactory to
the Administrative Agent. The Borrower further hereby irrevocably consents and agrees to the
service of any and all legal process, summons, notices and documents in any action, suit or
proceeding against the Borrower by serving a copy thereof upon the relevant agent for service of
process referred to in this §14.15 (whether or not the appointment of such agent shall for any
reason prove to be ineffective or such agent shall accept or acknowledge such service) or by
mailing copies thereof by registered or certified air mail, postage prepaid, to the Borrower at its
address specified in §14.7 hereof. The Borrower agrees that the failure of any such designee,
appointee and agent to give any notice of such service to it shall not impair or affect in any way
the validity of such service or any judgment rendered in any action or proceeding based thereon.
Nothing herein shall in any way be deemed to limit the ability of the Lenders or the Administrative
Agent to serve any such legal process, summons, notices and documents in any other manner permitted
by applicable law or to obtain jurisdiction over the Borrower or bring actions, suits or
proceedings against the Borrower in such other jurisdictions, and in such manner, as may be
permitted by applicable law. Each of the Borrower, the Administrative Agent and the Lenders
irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection which
they may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or
proceedings arising out of or in connection with this Reimbursement and Pledge Agreement or any
other Loan Document brought in the United States Federal courts located in the Borough of
Manhattan, The City of New York or the courts of the State of New York and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any such court that any
such action, suit or proceeding brought in any such court has been brought in an inconvenient
forum. The Borrower, the Administrative Agent and the Lenders each waive personal service of any
summons, complaint or other process and
irrevocably consent to the service of process by registered mail, postage prepaid, or by any
other means permitted by New York or federal law.



     14.16 Conversion. If, for the purpose of obtaining judgment in any court or obtaining
an order enforcing a judgment, it becomes necessary to convert any amount due under this
Reimbursement and Pledge Agreement in Dollars into any other currency (hereinafter in this §14.16
called the “second currency”), then the conversion shall be made at the rate of exchange used by
the Administrative Agent prevailing on the Business Day preceding the day on which



68









 




the judgment is
given or (as the case may be) the order is made. In the event that there is a difference between
the rate of exchange on the basis of which the amount of such judgment or order is determined and
the rate of exchange prevailing on the date of payment, then the rate of exchange prevailing on the
date of payment shall govern the amount owing hereafter, and the Borrower agrees to pay such amount
as may be necessary to ensure that the amount paid on such date in the second currency is the
amount in such second currency which, when converted at the rate of exchange for buying Dollars
with the second currency prevailing on the date of payment, is the amount which was due under this
Reimbursement and Pledge Agreement in Dollars before such judgment was obtained or made. Any
amount due from the Borrower to the Administrative Agent and/or the Lenders under the second
sentence of this §14.16 will be due as a separate debt of the Borrower to the Administrative Agent
and/or the Lenders, shall constitute an Obligation hereunder and shall not be affected by judgment
or order being obtained for any other sum due under or in respect of this Reimbursement and Pledge
Agreement. The covenants contained in this §14.16 shall survive the payment in full of all of the
other Obligations of the Borrower under this Reimbursement and Pledge Agreement.




     14.17 Counterparts. This Reimbursement and Pledge Agreement and any amendment hereof
may be executed in several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together shall constitute one
instrument. Delivery by facsimile by any of the parties hereto of an executed counterpart hereof
or of any amendment or waiver hereto shall be as effective as an original executed counterpart
hereof or of such amendment or waiver and shall be considered a representation that an original
executed counterpart hereof or such amendment or waiver, as the case may be, will be delivered.



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



     14.19 Integration. This Agreement, together with the other Loan Documents, comprises
the complete and integrated agreement of the parties on the subject matter hereof and thereof and
supersedes all prior agreements, written or oral, on such subject matter. In the event of any
conflict between the provisions of this Reimbursement and Pledge Agreement and those of any other
Loan Document, the provisions of this Reimbursement and Pledge Agreement shall control; provided
that the inclusion of supplemental rights or remedies in favor of the Administrative Agent or the
Lenders in any other Loan Document shall not be deemed a conflict with this Reimbursement and
Pledge Agreement.



69









 





     14.20 Severability. If any provision of this Reimbursement and Pledge Agreement or
the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Reimbursement and Pledge Agreement
and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall
endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to that of the
illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.



     14.21 Tax Forms.



          (a) Each Lender that is not a “United States person” within the meaning of Section 7701(a)(30)
of the Code (a “Foreign Lender”) shall deliver to the Administrative Agent, prior to receipt of any
payment subject to withholding under the Code (or upon accepting an assignment of an interest
herein), two duly signed completed copies of either IRS Form W-8BEN or any successor thereto
(relating to such Foreign Lender and entitling it to an exemption from, or reduction of,
withholding tax on all payments to be made to such Foreign Lender by the Borrower pursuant to this
Reimbursement and Pledge Agreement) or IRS Form W-8ECI or any successor thereto (relating to all
payments to be made to such Foreign Lender by the Borrower pursuant to this Reimbursement and
Pledge Agreement) or such other evidence satisfactory to the Company and the Administrative Agent
that such Foreign Lender is entitled to an exemption from, or reduction of, U.S. withholding tax,
including any exemption pursuant to Section 881(c) of the Code. Thereafter and from time to time,
each such Foreign Lender shall (A) promptly submit to the Administrative Agent such additional duly
completed and signed copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be available under then
current United States laws and regulations to avoid, or such evidence as is satisfactory to the
Borrower and the Administrative Agent of any available exemption from or reduction of, United
States withholding taxes in respect of all payments to be made to such Foreign Lender by the
Borrower pursuant to this Reimbursement and Pledge Agreement, (B) promptly notify the
Administrative Agent of any change in circumstances which would modify or render invalid any
claimed exemption or reduction, and (C) take such steps as shall not be materially disadvantageous
to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its lending office) to avoid any requirement of applicable laws that the Borrower
make any deduction or withholding for taxes from amounts payable to such Foreign Lender.




          (b) Each Foreign Lender, to the extent it does not act or ceases to act for its own account
with respect to any portion of any sums paid or payable to such Lender under any of the Loan
Documents (for example, in the case of a typical participation by such Lender), shall deliver to
the Administrative Agent on the date when such Foreign Lender ceases to act for its own account
with respect to any portion of any such sums paid or payable, and at such other times as may be
necessary in the determination of the Administrative Agent (in the reasonable exercise of its
discretion), (A) two duly signed completed copies of the forms or statements required to be
provided by such Lender as set forth above, to establish the portion of any such sums paid or
payable with respect to which such Lender acts for its own account that is not subject to United
States withholding tax, and (B) two duly signed completed copies of IRS Form W-8IMY (or any
successor thereto), together with any information such Lender chooses to

70









 








transmit with such form,
and any other certificate or statement of exemption required under the Code, to establish that such
Lender is not acting for its own account with respect to a portion of any such sums payable to such
Lender.




     14.22 No Advisory or Fiduciary Responsibility. In connection with all aspects of each
transaction contemplated hereby, the Borrower acknowledges and agrees that: (i) the credit
facilities provided for hereunder and any related arranging or other services in connection
therewith (including in connection with any amendment, waiver or other modification hereof or of
any other Loan Document) are an arm’s-length commercial transaction between the Borrower and its
Affiliates, on the one hand, and the Administrative Agent and the Arrangers, on the other hand, and
the Borrower is capable of evaluating and understanding and understands and accepts the terms,
risks and conditions of the transactions contemplated hereby and by the other Loan Documents
(including any amendment, waiver or other modification hereof or thereof); (ii) in connection with
the process leading to such transaction, the Administrative Agent and each of the Arrangers each is
and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for
the Borrower or any of its Affiliates, stockholders, creditors or employees or any other Person;
(iii) neither the Administrative Agent nor either Arranger has assumed or will assume an advisory,
agency or fiduciary responsibility in favor of the Borrower with respect to any of the transactions
contemplated hereby or the process leading thereto, including with respect to any amendment, waiver
or other modification hereof or of any other Loan Document (irrespective of whether the
Administrative Agent or such Arranger has advised or is currently advising any of the Borrower or
its Affiliates on other matters) and neither the Administrative Agent nor any Arranger has any
obligation to the Borrower or its Affiliates with respect to the transactions contemplated hereby
except those obligations expressly set forth herein and in the other Loan Documents; (iv) the
Administrative Agent, the Arrangers and their respective Affiliates may be engaged in a broad range
of transactions that involve interests that differ from those of the Borrower and its Affiliates,
and neither the Administrative Agent nor either Arranger has any obligation to disclose any of such
interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Administrative
Agent and the Arrangers have not provided and will not provide any legal, accounting, regulatory or
tax advice with respect to any of the transactions contemplated hereby (including any amendment,
waiver or other modification hereof or of any other Loan Document) and the Borrower has consulted
its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate.
The Borrower hereby waives and releases, to the fullest extent permitted by law, any claims that it
may have against the Administrative Agent and the Arrangers with respect to any breach or alleged
breach of agency or fiduciary duty.



     14.23 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as hereinafter
defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies
the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and
record information that identifies the Borrower, which information includes the name and address of
the Borrower and other information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Act.



71









 





     IN WITNESS WHEREOF, the undersigned have duly executed this Letter of Credit Reimbursement and
Pledge Agreement as of the date first set forth above.



	 	 	 	 	 
	 	MONTPELIER REINSURANCE LTD.

 	 
	 	By:  	 /s/ William Pollett	 
	 	Name:  	 William
Pollett	 
	 	Title:  	 Treasurer	 



      



					
	 
	 	 
	 	5 Year Credit Agreement






S-1









 






	 	 	 	 	 



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

 	 
	 	By:  	/s/ Debra
Basler                              	 
	 	Name:  	Debra
Basler                                  	 
	 	Title:  	Senior
Vice
President                     	 


      



					
	 
	 	 
	 	5 Year Credit Agreement







S-2









 






	 	 	 	 	 



	 	 	 	 	 
	 	HSBC BANK (USA), NATIONAL
 ASSOCIATION, as Lender and
Syndication Agent

 	 
	 	By:  	/s/  Daniel S.
Serrao	 
	 	Name:  	Daniel S.
Serrao	 
	 	Title:    	Senior
Vice President	 


       



					
	 
	 	 
	 	5 Year Credit Agreement






S-3









 






	 	 	 	 	 



	 	 	 	 	 
	 	CREDIT SUISSE, Cayman Islands Branch

 	 
	 	By:  	/s/  Jay
Chall	 
	 	Name:  	Jay
Chall	 
	 	Title:    	Director	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	/s/  Alain
Schmid	 
	 	Name:  	Alain
Schmid	 
	 	Title:    	Assistant
Vice President	 



      



					
	 
	 	 
	 	5 Year Credit Agreement






S-4









 






	 	 	 	 	 



	 	 	 	 	 
	 	THE BANK OF NEW YORK

 	 
	 	By:  	/s/  Michael
Pensari	 
	 	Name:  	Michael
Pensari	 
	 	Title:    	Vice
President	 


       



					
	 
	 	 
	 	5 Year Credit Agreement






S-5









 






	 	 	 	 	 



	 	 	 	 	 
	 	DEUTSCHE BANK AG NEW YORK BRANCH

 	 
	 	By:  	/s/  John S.
McGill	 
	 	Name:  	John S.
McGill	 
	 	Title:    	Director	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	/s/  Michael
Campites	 
	 	Name:  	Michael
Campites	 
	 	Title:    	Vice
President	 


       



					
	 
	 	 
	 	5 Year Credit Agreement






S-6









 






	 	 	 	 	 



	 	 	 	 	 
	 	ING BANK N.V., LONDON BRANCH

 	 
	 	By:  	/s/  N.J. Marchant	 
	 	Name:  	N.J.
Marchant	 
	 	Title:    	Director	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	/s/  M.E.R.
Sharman	 
	 	Name:  	M.E.R. Sharman	 
	 	Title:    	Managing
Director	 


       



					
	 
	 	 
	 	5 Year Credit Agreement






S-7









 






	 	 	 	 	 



	 	 	 	 	 
	 	LEHMAN BROTHERS BANK, FSB

 	 
	 	By:  	/s/ Janine
M.
Shugan                     	 
	 	Name:  	Janine
M. Shugan                     	 
	 	Title:  	Authorized
Signatory                     	 
	 



       



					
	 
	 	 
	 	5 Year Credit Agreement






S-8









 





EXHIBIT A




ASSIGNMENT AND ASSUMPTION




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



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



	 	 	 	 	 	 	 
	1.

	 	Assignor:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	2.

	 	Assignee:
	 	 	 	[and is an Affiliate/Approved Fund of [identify Lender]]
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	3.

	 	Borrower(s):	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	4.	 	Administrative Agent: Bank of America, N.A., as the administrative agent under the
Credit Agreement
	 
	 	 	 	 	 	 
	5.	 	Credit Agreement: Letter of Credit Reimbursement and Pledge Agreement, dated as of
June 8, 2007, among Montpelier Reinsurance Ltd., the Lenders from time to time party thereto,
and Bank of America, N.A., as Administrative Agent.






A-1









 






6. Assigned Interest:




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Aggregate	 	 	 	 	 	 	 	 	 	 
	 	 	Amount of	 	 	Amount of	 	 	Percentage	 	 	 	 
	 	 	Commitment	 	 	Commitment	 	 	Assigned of	 	 	CUSIP	 
	Facility Assigned	 	for all Lenders*	 	 	Assigned*	 	 	Commitment1	 	 	Number	 
	Commitment
	 	$	 	 	 	$	 	 	 	 	 	%	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 





[7. Trade Date:                                         ]2



Effective Date:                                         , 20___[TO BE
INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE
THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]3



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




	 	 	 	 	 
	 	ASSIGNOR

[NAME OF ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Title: 	 



	 	 	 	 	 
	 	ASSIGNEE

[NAME OF ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 



[Consented to and]4 Accepted:




BANK OF AMERICA, N.A., as
  Administrative
Agent and Fronting Bank




By:                                                                                 

     Title:




MONTPELIER REINSURANCE LTD.




By:                                                                                

      Title:



[Consented to:]5






 




			
	1	 	Set forth, to at least 9 decimals, as a
percentage of the Commitment/Loans of all Lenders thereunder.
	 
	2	 	To be completed if the Assignor and the
Assignee intend that the minimum assignment amount is to be determined as of
the Trade Date.
	 
	3	 	The Effective Date will be subject to the
provisions of Section 13.2 of the Credit Agreement.
	 
	4	 	To be added only if the consent of the
Administrative Agent and the Fronting Bank is required by the terms of the
Credit Agreement.
	 
	5	 	To be added only if the consent of The
Borrower is required by the terms of the Credit Agreement.




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ANNEX 1 TO ASSIGNMENT AND ASSUMPTION




[                                        ]6




STANDARD TERMS AND CONDITIONS FOR




ASSIGNMENT AND ASSUMPTION





     1. Representations and Warranties.



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



     1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit Agreement), (iii) it is an
NAIC Approved Bank with a rating of “A3” or better from Moody’s and/or “A” or better from Standing
& Poor’s and/or “A-“ or better from Fitch, (iv) from and after the Effective Date, it shall be
bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the
Assigned Interest, shall have the obligations of a Lender thereunder, (v) it is sophisticated with
respect to decisions to acquire assets of the type represented by such Assigned Interest and it is
experienced in acquiring assets of such type, (vi) it has received a copy of the Credit Agreement
and has received or has been accorded the opportunity to receive, copies of the most recent
financial statements delivered pursuant to Section 6.4 thereof, and such other documents and
information as it deems appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made
such analysis and decision independently and without reliance on the Administrative Agent or any
other Lender, and based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Assignment and Assumption and to purchase the
Assigned Interest, and (vii) if it is a Non-U.S. Lender, attached hereto is any documentation
required to be





 




			
	6	 	Describe Credit Agreement at option of
Administrative Agent.














 









delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, the Assignor or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Credit Documents are required to be
performed by it as a Lender.




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



     3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Assumption may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.














 





EXHIBIT B




CONTROL AGREEMENT




     This Control Agreement is dated as of June 8, 2007, among Montpelier Reinsurance Ltd. (the
“Customer”), Bank of America, N.A., as Administrative Agent (the “Agent”) for itself and the other
lending institutions party to the Letter of Credit Reimbursement and Pledge Agreement dated as of
June 8, 2007 (as amended, supplemented and restated from time to time, the “Letter of Credit
Agreement”), and The Bank of New York (the “Custodian”).



WITNESSETH:




     WHEREAS, pursuant to a Global Custody Agreement between Custodian and the Customer (the
“Custodian Agreement”), Custodian acts as custodian for the Customer’s assets;



     WHEREAS, the Agent, various lending institutions and the Customer have entered into the Letter
of Credit Agreement;



     WHEREAS, pursuant to the terms of the Letter of Credit Agreement, the Customer will from time
to time pledge certain assets specified by the Customer and identified to Custodian as Collateral
(as defined below) to secure the Customer’s obligations under the Letter of Credit Agreement; and



     WHEREAS, the Agent, the Customer and Custodian are entering into this Agreement to continue to
provide for the control of the Collateral and the Collateral Account (as defined below);



     NOW THEREFORE, in consideration of the mutual promises set forth hereafter, the parties hereto
agree as follows:



ARTICLE I

DEFINITIONS




     Whenever used in this Agreement, the following words shall have the meanings set forth below:



     1. “Authorized Person” shall be any person, whether or not an officer or employee of the Agent
or the Customer, duly authorized by the Agent or the Customer, respectively, to give Written
Instructions on behalf of the Agent or the Customer, respectively, such persons to be designated in
a Certificate of Authorized Persons, in the form attached hereto as Exhibit A, which contains a
specimen signature of such person.



     2. “Collateral” shall have the meaning set forth in Article II, paragraph l.



     3. “Collateral Account” shall have the meaning set forth in Article II, paragraph 1.



     4. “Depository” shall mean the Treasury/Reserve Automated Debt Entry System maintained at The
Federal Reserve Bank of New York for receiving and delivering securities,



B-1









 







The Depository Trust Company and any other clearing corporation within the meaning of Section
8-102 of the UCC or otherwise authorized to act as a securities depository or clearing agency, and
their respective successors and nominees.



     5. “Federal Agencies” shall mean any of the following agencies of the federal government of
the United States: (a) Government National Mortgage Association; (b) the Export-Import Bank of the
United States; (c) the Farmers Home Administration, an agency of the United States Department of
Agriculture; (d) the United States General Services Administration; (e) the United States Maritime
Administration; (f) the United States Small Business Administration; (g) the Commodity Credit
Corporation; (h) the Rural Electrification Administration; (i) the Rural Telephone Bank; (j)
Washington Metropolitan Area Transit Authority; (k) Federal Home Loan Mortgage Corporation; (1)
Federal National Mortgage Association; (m) Federal Housing Finance Board; (n) Federal Home Loan
Bank; and (o) such other federal agencies as are reasonably acceptable to the Agent.



     6. “Identified Securities” shall have the meaning set forth in Article V, paragraph 3.



     7. “Notice of Exclusive Control” shall mean a written notice, in the form attached hereto as
Exhibit B, given by the Agent to the Custodian that the Agent is exercising sole and exclusive
control of the Collateral Account and the Collateral credited thereto.



     8. “UCC” shall mean the Uniform Commercial Code as in effect in the State of New York.



     9. “Written Instructions” shall mean written communications delivered to the Custodian via
S.W.I.F.T., tested telex, letter, facsimile transmission, or other method or system specified by
the Custodian as available for use in connection with this Agreement.



     The terms “entitlement holder”, “entitlement order”, “financial asset”, “investment property”,
“proceeds”, “security”, “security entitlement” and “securities intermediary” shall have the
meanings set forth in Articles 8 and 9 of the UCC.



ARTICLE II

COLLATERAL ACCOUNT




     1. Collateral Account. The Customer, from time to time, shall provide Written
Instructions to Custodian to segregate certain cash, U.S. Government securities, securities issued
by Federal Agencies or other securities acceptable to the Agent and the proceeds of any of the
foregoing (the “Collateral”) for the benefit of the Agent. Such Collateral (including cash
Collateral) shall be identified and segregated in a separate account on Custodian’s books and
records under the name “Montpelier FBO Bank of America Securities A/C,” account number 251512 (the
“Collateral Account”). Custodian shall have no responsibility for determining the adequacy of any
Collateral required hereunder or under the Letter of Credit Agreement, nor will it assume
responsibility for any calculations related to any Collateral requirements under the Letter of
Credit Agreement.



B-2









 





     2. Status of the Custodian. Custodian agrees that it is acting as a securities
intermediary, as defined in Section 8-102 of the UCC, with respect to the Collateral in the
Collateral Account, except Identified Securities. The parties hereto agree that (i) the Collateral
Account constitutes a “securities account” within the meaning of Article 8 of the UCC, and (ii) all
Collateral, including cash, now or hereafter held, credited or carried by, in or to the credit of
Collateral Account shall be treated as “financial assets” within the meaning of Article 8 of the
UCC.



ARTICLE III

ACCOUNT CONTROL




     1. Security Interest. This Agreement is intended by the Agent and the Customer to
grant “control” of the Collateral Account and the Collateral to the Agent for purposes of
perfection of the Agent’s security interest in such Collateral pursuant to Article 8 and Article 9
of the UCC, and Custodian hereby acknowledges that it has been advised of the Customer’s grant to
the Agent of a security interest in the Collateral Account and the Collateral. Notwithstanding the
foregoing, Custodian makes no representation or warranty with respect to the creation or
enforceability of any security interest in the Collateral Account. The Agent and the Customer each
agree to provide Custodian with a Certificate of Authorized Persons in the form of Exhibit
A attached hereto (as may be amended from time to time).



     2. Control of the Collateral Account.



     (a) The Custodian shall comply with the entitlement orders originated by the Agent with
respect to the Collateral Account and the Collateral therein without further consent of the
Customer or any other person or entity. In addition, unless and until Custodian receives a Notice
of Exclusive Control or if all previous Notices of Exclusive Control have been revoked or rescinded
in writing by the Agent, Custodian shall comply with entitlement orders from the Customer and take
actions with respect to the Collateral Account and the Collateral therein upon the instructions of
the Customer; provided, however, that Custodian shall not comply with entitlement
orders or instructions from the Customer directing Custodian to make free deliveries to the
Customer or withdrawals from the Collateral Account or deliver any financial assets to the Customer
without the prior written consent of the Agent. Custodian shall have no responsibility or
liability to the Agent or the Customer for actions taken in accordance with the instructions set
forth in this paragraph, except for Custodian’s bad faith, negligence or willful misconduct in
carrying out (or failing to carry out) such instructions. Notwithstanding the foregoing, the Agent
shall not withhold any instructions requested by the Customer pursuant to and in accordance with
Section 4.7 of the Letter of Credit Agreement.



     (b) Upon receipt by Custodian of a Notice of Exclusive Control, Custodian shall thereafter
follow only the instructions of the Agent with respect to the Collateral Account and shall comply
with any entitlement order received from the Agent, without further consent of the Customer or any
other person, and Custodian will not comply with entitlement orders or instructions concerning the
Collateral originated by the Customer.



     (c) The Agent represents and warrants to, and agrees with, the Customer that the Agent will
only issue to Custodian a Notice of Exclusive Control if an “Event of Default” has



B-3









 







occurred under and as defined in the Letter of Credit Agreement which entitles Agent to
exercise its rights as a secured party with respect to the Collateral in the Collateral Account.



     3. Distributions. Custodian shall, without further action by the Customer or the
Agent, credit to the Collateral Account all interest, dividends, proceeds, and other income
(whether in cash or in kind) received or collected by Custodian with respect to the Collateral.
Interest, dividends, proceeds, and other income shall be considered Collateral.



ARTICLE IV

COLLATERAL SERVICES




     1. Use of Depositories. The Agent and the Customer hereby authorize the Custodian to
utilize Depositories to the extent possible in connection with its performance hereunder.
Collateral held by the Custodian in a Depository will be held subject to the rules, terms and
conditions of such Depository. Where Collateral is held in a Depository, the Custodian shall
identify on its records as belonging to the Customer and pledged to the Agent a quantity of
securities as part of a fungible bulk of securities held in the Custodian’s account at such
Depository. Securities deposited in a Depository will be represented in accounts which include
only assets held by the Custodian for its customers.



     2. Release of Collateral. Under certain limited circumstances specified in the Letter
of Credit Agreement and otherwise if there are no outstanding Obligations (as such term is defined
in the Letter of Credit Agreement) and the Agent’s commitment to advance credit to the Customer has
been terminated, the Customer may request the Agent to instruct Custodian to release all Collateral
held in the Collateral Account. Custodian will effect such release as soon as reasonably
practicable after receiving instructions from the Agent and the Customer.



     3. Release of Security Interest. The Agent agrees to notify Custodian promptly in
writing when all Obligations of the Customer to the Agent have been fully paid and satisfied (and
any commitment of the Agent and the Lenders (as defined in the Letter of Credit Agreement) to
advance further amounts or credit under the Letter of Credit Agreement or any of the other Loan
Documents (as defined in the Letter of Credit Agreement) has been terminated) or the Agent
otherwise no longer claims any interest in the Collateral in the Collateral Account, whichever is
sooner; at which time Custodian shall release such Collateral to the Customer and execute such
documents and instruments of release as reasonably requested by the Agent and the Customer and
thereafter shall have no further liabilities or responsibilities hereunder and Custodian’s
obligations under this Agreement shall terminate.



     4. Statements. The Custodian shall furnish the Customer and the Agent with advices of
transactions affecting the Collateral Account and monthly statements for the Collateral Account.
Each of the Customer and the Agent may elect to receive advices and statements electronically
through the Internet to an email address specified by it for such purpose. By electing to use the
Internet for this purpose, each of the Customer and the Agent acknowledges that such transmissions
are not encrypted and therefore are insecure. Each of the Customer and the Agent further
acknowledges that there are other risks inherent in communicating through the Internet such as the
possibility of virus contamination and disruptions in service, and agrees that the Custodian shall
not be responsible for any loss, damage or expense suffered or incurred by



B-4









 







the Customer, the Agent, or any person claiming by or through the Customer or the Agent as a
result of the use of such methods.



     5. Notice of Adverse Claims. Upon receipt of notice of any lien, encumbrance or
adverse claim against any Collateral Account or any portion of the Collateral carried therein, the
Custodian shall use reasonable efforts to notify the Agent and the Customer as promptly as
practicable under the circumstances.



ARTICLE V

GENERAL TERMS AND CONDITIONS




     1. Standard of Care: Indemnification. (a) Except as otherwise expressly provided
herein, the Custodian shall not be liable for any costs, expenses, damages, liabilities or claims,
including reasonable attorneys’ fees (“Losses”) incurred by or asserted against the Customer or the
Agent, except those Losses arising out of the negligence or willful misconduct of the Custodian.
The Custodian shall have no liability whatsoever for the action or inaction of any Depository. In
no event shall the Custodian be liable for special, indirect or consequential damages, or lost
profits or loss of business, arising in connection with this Agreement.



     (b) (i) Prior to the issuance of a Notice of Exclusive Control, the Agent and the Customer
shall indemnify and hold Custodian harmless with regard to any Losses imposed on or incurred by
Custodian arising out of any action or omission of Custodian in accordance with any notice,
instruction, or entitlement order given by the Agent or the Customer under this Agreement, except
to the extent such Losses have arisen from the negligence or willful misconduct of the Custodian,
provided that the Agent’s liability under this clause (i) shall be limited to those amounts for
which Custodian has not been reimbursed by the Customer within 30 days after Custodian’s having
made written demand on the Customer therefor.




     (ii) After a Notice of Exclusive Control has been issued, the Agent shall indemnify and
hold Custodian harmless with regard to any Losses imposed on or incurred by Custodian
arising out of any action or omission of Custodian in accordance with any notice,
instruction, or entitlement order given by the Agent under this Agreement, except to the
extent such Losses have arisen from the negligence or willful misconduct of the Custodian.



     2. No Obligation Regarding Quality of Collateral. Without limiting the generality of
the foregoing, the Custodian shall be under no obligation to inquire into, and shall not be liable
for, any Losses incurred by the Customer, the Agent or any other person as a result of the receipt
or acceptance of fraudulent, forged or invalid Collateral, or Collateral which otherwise is not
freely transferable or deliverable without encumbrance in any relevant market.



     3. Identified Securities. The parties hereto acknowledge that no security entitlement
under the UCC shall exist with respect to any financial asset held in the Collateral Account which
is registered in the name of the Customer, payable to the order of the Customer, or specially
indorsed to the Customer or any third party (each such asset an “Identified Security”), except to
the extent such Identified Security has been specially indorsed by the Customer to Custodian or in
blank. The Customer covenants and agrees that it shall not instruct the



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Custodian to credit Collateral (except cash) to the Collateral Account unless such Collateral
is registered in the name of the Custodian, indorsed to the Custodian or in blank or credited to
another securities account maintained in the name of the Custodian and that in no case will any
Collateral or underlying financial asset credited to the Collateral Account be registered in the
name of the Customer, payable to the order of the Customer or specially indorsed to the Customer,
except to the extent such Collateral has been further indorsed to the Custodian or in blank. The
parties acknowledge and agree that if any Identified Securities are received by the Custodian and
credited to the Collateral Account from time to time, such Identified Securities shall (so long as
so credited to the Collateral Account and so long as this Agreement remains in effect) be held by
Custodian for the benefit of the Agent, not in its capacity as a securities intermediary, but in
its capacity as a collateral agent under and subject to the terms of this Agreement.



     4. Foreign Securities. The Agent hereby acknowledges that any Collateral in the
Collateral Account issued outside the United States which may be held by Custodian, a sub-custodian
within Custodian’s network of sub-custodians or a Depository or book-entry system for the central
handling of securities and other financial assets in which Custodian or a sub-custodian are
participants may not permit the Customer to have a security entitlement with respect to such
Collateral (and such property shall be deemed for purposes of this Agreement not to be a financial
asset held within the Collateral Account). The parties hereby further acknowledge that Custodian
gives no assurance that a security entitlement is created under the UCC with respect to the
Customer’s assets held in Euroclear or Clearstream or their successors.



     5. No Duty of Oversight. The Custodian is not at any time under any duty to supervise
the investment of, or to advise or make any recommendation for the purchase, sale, retention or
disposition of any Collateral.



     6. Advice of Counsel. The Custodian may, with respect to questions of law, obtain the
advice of counsel selected by Custodian with due care and shall be fully protected with respect to
anything done or omitted by it in good faith in conformity with such advice.



     7. No Collection Obligations. The Custodian shall be under no obligation to take
action to collect any amount payable on Collateral in default, or if payment is refused after due
demand and presentment.



     8. Fees and Expenses. The Customer agrees to pay to the Custodian the fees as may be
agreed upon from time to time. The Customer shall reimburse the Custodian for all customary and
reasonable costs associated with transfers of Collateral to the Custodian and records kept in
connection with this Agreement. The Customer shall also reimburse the Custodian for reasonable
out-of-pocket expenses which are a normal incident of the services provided hereunder.



     9. Custodian Representations and Agreements. Custodian agrees and confirms, as of the
date hereof, and at all times until the termination of this Agreement, that it has not entered
into, and until the termination of this Agreement will not enter into, any agreement (other than
this Agreement and the Custodian Agreement) with any other person or entity relating to the



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Collateral or the Collateral Account under which it agrees to comply with entitlement orders
of such other person or entity.



     10. Advances by the Custodian. It is hereby expressly acknowledged and agreed by the
parties that the Custodian shall not be obligated to advance any margin or other credit to the
Customer and the Customer agrees that it shall not instruct the Custodian to advance any margin or
credit to, for, or on its behalf; provided, however, that Custodian may advance
payment to the Collateral Account for any purpose (including, but not limited to, failed securities
settlements, foreign exchange contracts, assumed settlements or short-term account overdrafts).
Custodian agrees that it shall have no lien, encumbrance, claim or right of set-off against the
Collateral Account or the Collateral carried therein and hereby waives its right (by contract or
statute) to any such lien, encumbrance, claim or right of set-off except, that in connection with
any charges/debits to the Collateral Account for short-term account overdrafts resulting from
failed settlement of entitlement orders initiated by the Customer or the Agent, Custodian shall
have a lien, encumbrance, claim and right of set-off against the Collateral Account and the
Collateral carried therein to the extent of the amount of such short-term account overdrafts and
such lien, encumbrance, claim and right of set-off shall be senior to and have priority over any
right or claim of the Agent therein until such time as the Customer has reimbursed Custodian for
such amounts or such overdrafts.



     11. Effectiveness of Instructions; Reliance; Risk Acknowledgements; Additional Terms.
(a) Subject to the terms below, the Custodian shall be entitled to rely upon any Written
Instructions delivered to the Custodian in accordance with this Agreement and reasonably believed
by the Custodian to be duly authorized and delivered.



     (b) If the Custodian receives Written Instructions which appear on their face to have been
transmitted via (i) computer facsimile, email, the Internet or other insecure electronic method, or
(ii) secure electronic transmission containing applicable authorization codes, passwords and/or
authentication keys, the Agent and the Customer each understands and agrees that the Custodian
cannot determine the identity of the actual sender of such Written Instructions and that the
Custodian shall conclusively presume that such Written Instructions have been sent by an Authorized
Person. The Agent and the Customer shall be responsible for ensuring that only its Authorized
Persons transmit such Written Instructions to the Custodian and that all of its Authorized Persons
treat applicable user and authorization codes, passwords and/or authentication keys with extreme
care.



     (c) The Agent and the Customer each acknowledges and agrees that it is fully informed of the
protections and risks associated with the various methods of transmitting Written Instructions to
the Custodian and that there may be more secure methods of transmitting Written Instructions than
the method(s) selected by it. The Agent and the Customer each agrees that the security procedures
(if any) to be followed in connection with its transmission of Written Instructions provide to it a
commercially reasonable degree of protection in light of its particular needs and circumstances.



     (d) If the Agent or the Customer elects to transmit Written Instructions through an on-line
communication system offered by the Custodian, its use thereof shall be subject to the Terms and
Conditions attached hereto as Exhibit C. If the Agent or the Customer elects (with



B-7









 







the Custodian’s prior consent) to transmit Written Instructions through an on-line
communications service owned or operated by a third party, it agrees that the Custodian shall not
be responsible or liable for the reliability or availability of any such service.



     12. Inspection. Upon reasonable request and provided the Custodian shall suffer no
significant disruption of its normal activities, the Agent or the Customer shall have access to the
Custodian’s books and records relating to the Collateral Account during the Custodian’s normal
business hours. Upon reasonable request, copies of any such books and records shall be provided to
the Agent or the Customer at its expense.



     13. Account Disclosure. The Custodian is authorized to supply any information
regarding the Account which is required by any law or governmental regulation now or hereafter in
effect.



     14. Force Majeure. The Custodian shall not be responsible or liable for any failure
or delay in the performance of its obligations under this Agreement arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control, including without
limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances;
sabotage; epidemics; riots; interruptions, loss or malfunctions of utilities, computer (hardware or
software) or communications service; accidents; labor disputes; acts of civil or military
authority; governmental actions; inability to obtain labor, material, equipment or transportation.



     15. No Implied Duties. The Custodian shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are specifically set forth in this Agreement
and the Custodian Agreement, and no covenant or obligation shall be implied against the Custodian
in connection with this Agreement except to the extent set forth in this Agreement and the
Custodian Agreement. The Custodian shall not be liable or responsible for anything done or omitted
to be done by it in good faith and in the absence of negligence and willful misconduct and may rely
and shall be protected in acting upon any notice, instruction entitlement order or other
communication which it reasonably believes to be genuine and authorized.



ARTICLE VI

MISCELLANEOUS




     1. Termination. This Agreement shall continue in effect until the Agent has notified
Custodian in writing that this Agreement is to be terminated. Upon receipt of such notice, the
Agent shall have no further right to originate entitlement orders concerning the Collateral Account
and the Customer shall be entitled to originate entitlement orders concerning the Collateral for
any purpose and without limitation except as may be provided in the Custodian Agreement. This
Agreement may also be terminated by Custodian, the Agent or the Customer, and shall terminate in
the event of the termination of the Custodian Agreement, following thirty (30) days’ prior written
notice to the other parties hereto. Upon termination of this Agreement by any party, all
Collateral in the Collateral Account that has not been released by the Agent shall be transferred,
within 30 days of such termination, to a successor custodian designated in writing by the Customer
and acceptable to the Agent. In the event no successor is agreed upon, Custodian shall be entitled
to petition a court of competent jurisdiction to appoint a successor



B-8









 




custodian and shall be indemnified by the Customer for any costs and expenses (including,
without limitation, attorneys’ fees) relating thereto.




     2. Certificates of Authorized Persons. The Agent and the Customer agree to furnish to
the Custodian a new Certificate of Authorized Persons in the event of any change in the then
present Authorized Persons. Until such new Certificate is received, the Custodian shall be fully
protected in acting upon Written Instructions of such present Authorized Persons.



     3. Notices. (a) Any notice or other communication given hereunder shall be delivered
by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy.
Such notice or communication shall be deemed to have been received: (i) if sent by telecopy, upon
receipt of confirmation of error-free transmission; (ii) in the case of notice given by hand, on
the day of actual delivery; (iii) if sent by overnight courier service, on the next Business Day
and (iv) if sent via certified or registered mail, on the third Business Day following the day on
which it was dispatched postage prepaid; provided that a notice given in accordance with the above
but received on a day which is not a Business Day or after normal business hours in the place of
receipt shall be deemed to have been received on the next Business Day.



     (b) Any notice or other instrument in writing, authorized or required by this Agreement to be
given to the Custodian, shall be sufficiently given if addressed to the Custodian and received by
it at its offices at One Wall Street, New York, New York 10286, Attention: Mayra Sacco, Group RM
Custody, Telephone: (212) 635-4604, Telecopy: (212) 635-7420, or at such other place as the
Custodian may from time to time designate in writing



     (c) Any notice or other instrument in writing, authorized or required by this Agreement to be
given to the Agent shall be sufficiently given if addressed to the Agent and received by it at its
offices at 2001 Clayton Road, CA4-702-02-25, Concord, California, 94520-2405, Attention: Shashanna
Kratz, Telephone: (925-675-8439), Telecopy: (888-861-2999) or at such other place as the Agent may
from time to time designate in writing.



     (d) Any notice or other instrument in writing, authorized or required by this Agreement to be
given to the Customer shall be sufficiently given if addressed to the Customer and received by it
at its offices at Montpelier House, 94 Pitts Bay Road, PO Box HM 2079, Pembroke HM HX Bermuda,
Attention: Thomas Busher, COO, Telephone: 441-296-5550, Telecopy: 441-296-5551 or at such other
place as the Customer may from time to time designate in writing.



     4. Cumulative Rights; No Waiver. Each and every right granted to any party hereunder
or under any other document delivered hereunder or in connection herewith, or allowed it by law or
equity, shall be cumulative and may be exercised from time to time. No failure on the part of such
party to exercise, and no delay in exercising, any right will operate as a waiver thereof, nor will
any single or partial exercise by such party of any right preclude any other future exercise
thereof or the exercise of any other right.



     5. Severability; Amendments; Assignment. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions shall not in any way be affected thereby.



B-9









 




This Agreement may not be amended or modified in any manner except by a written agreement
executed by each of the parties hereto. This Agreement shall extend to and shall be binding upon
the parties hereto, and their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by any party without the written consent of the other parties.




     6. Governing Law; Jurisdiction; Waiver of Immunity; Jury Trial Waiver. This Agreement
and the Collateral Account shall be governed by and construed in accordance with the substantive
laws of the State of New York, without regard to conflicts of laws principles thereof. The State
of New York shall be deemed to be the jurisdiction of the Custodian as securities intermediary.
The Custodian shall notify the Agent of its intention to amend the governing law provisions of the
Custodian Agreement. The Agent, the Customer and the Custodian hereby consent to the jurisdiction
of a state or federal court situated in New York City, New York in connection with any dispute
arising hereunder. To the extent that in any jurisdiction the Agent or the Customer may now or
hereafter be entitled to claim, for itself or its assets, immunity from suit, execution, attachment
(before or after judgment) or other legal process, the Agent and the Customer each irrevocably
agrees not to claim, and hereby waives, such immunity to the extent permitted by law. The Agent,
the Customer and the Custodian each hereby irrevocably waives any and all rights to trial by jury
in any legal proceeding arising out of or relating to this Agreement.



     7. No Third Party Beneficiaries. In performing hereunder, the Custodian is acting
solely on behalf of the Agent and the Customer and no contractual or service relationship shall be
deemed to be established hereby between the Custodian and any other person.



     8. Headings. Section headings are included in this Agreement for convenience only and
shall have no substantive effect on its interpretation.



     9. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts shall, together, constitute only
one instrument.



     10. Conflicts. In the event of a conflict between this Agreement and any other
agreement between the Customer and the Custodian, including, without limitation, the Custodian
Agreement, the terms of this Agreement shall prevail. The Existing Control Agreement shall be
superceded in its entirety by this Agreement and the Existing Agent shall have no further authority
under the Existing Control Agreement to originate entitlement orders, issue a Notice of Exclusive
Control or direct or instruct the Custodian with regard to the Collateral Account or any of the
Collateral.



[The remainder of this page is intentionally left blank]




B-10









 








     IN WITNESS WHEREOF, the Customer, the Custodian and the Agent have caused this Agreement to be
executed by their respective officers, thereunto duly authorized, as of the day and year first
above written.



	 	 	 	 	 	 	 
	 	 	MONTPELIER REINSURANCE LTD.	 	 
	 
	 	 	 	 	 	 
	 
	 	By:	 	/s/ William Pollett
 
	 	 
	 

	 	Name:	 	William Pollett	 	 
	 

	 	Title:	 	Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Debra Basler

 

	 	 
	 

	 	Name:	 	Debra Basler	 	 
	 

	 	Title:	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Peter D. Holland

 

	 	 
	 

	 	Name:	 	Peter D. Holland	 	 
	 

	 	Title:	 	Vice President	 	 






B-11









 





EXHIBIT A




CERTIFICATE OF AUTHORIZED PERSONS

(Customer — Oral and Written Instructions)




     The undersigned
hereby certifies that he/she is the duly elected and acting
Secretary of Montpelier Reinsurance Ltd. (the “Customer”), and further certifies that
the following officers or employees of the Customer have been duly authorized in conformity with
the Customer’s Articles of Incorporation and By-Laws to deliver oral and Written Instructions to
The Bank of New York (“BNY”) pursuant to the Control Agreement among the Customer, Bank of America,
N.A., as Agent and BNY, dated as of June 8, 2007 and that the signatures appearing opposite their
names are true and correct:



	 	 	 	 	 
	 
	Name: Anthony
Taylor

	 	Title: President and CEO
	 	Signature: /s/ Anthony
Taylor
	 
	 	 	 	 
	 
	Name: Christopher
L. Harris

	 	Title: Chief Underwriting and
Risk Officer
	 	Signature: /s/ Christopher
Harris
	 
	 	 	 	 
	 
	Name: William
Pollett

	 	Title: Treasurer
	 	Signature: /s/ William
Pollett
	 
	 	 	 	 
	 
	Name: Christopher
Jackson

	 	Title: Assistant Treasurer
	 	Signature: /s/ Christopher
Jackson
	 
	 	 	 	 
	 
	Name

	 	Title
	 	Signature
	 
	 	 	 	 
	 
	Name

	 	Title
	 	Signature
	 
	 	 	 	 
	 
	Name

	 	Title
	 	Signature
	 
	 	 	 	 
	 
	Name

	 	Title
	 	Signature
	 
	 	 	 	 
	 
	Name

	 	Title
	 	Signature






     This certificate supersedes any certificate of authorized individuals you may currently have
on file.



	 	 	 	 	 
	     [corporate seal]

	 	 /s/ Jonathan B. Kim
 

Title: Jonathan B. Kim,
Secretary
	 	 
	 

	 	Date: June 8, 2007	 	 






B-12









 





EXHIBIT A




CERTIFICATE OF AUTHORIZED PERSONS

(Agent — Oral and Written Instructions)




     The undersigned hereby certifies that she is
a Assistant Vice President of Bank of America, N.A. (the
“Agent”), and further certifies that
the following officers or employees of the Agent have been duly authorized in conformity with
the Agent’s Organizational Documents to deliver oral and Written Instructions to
The Bank of New York (“BNY”) pursuant to the Control
Agreement among Montpelier Reinsurance Ltd., as Customer, Agent and
BNY, dated as of June 8, 2007 and that the signatures appearing opposite their
names are true and correct:



	 	 	 	 	 
	 
	Name: Debra
Basler

	 	Title: Senior Vice President
	 	Signature: /s/ Debra Basler
	 
	 	 	 	 
	 
	Name: Tiffany
Burgess

	 	Title: Assistant Vice President
	 	Signature: /s/ Tiffany
Burgess
	 
	 	 	 	 
	 
	Name: Matthew
Peck

	 	Title: Analyst
	 	Signature: /s/ Matthew
Peck
	 
	 	 	 	 
	 
	Name 

	 	Title 
	 	Signature 
	 
	 	 	 	 
	 
	Name

	 	Title
	 	Signature
	 
	 	 	 	 
	 
	Name

	 	Title
	 	Signature
	 
	 	 	 	 
	 
	Name

	 	Title
	 	Signature
	 
	 	 	 	 
	 
	Name

	 	Title
	 	Signature
	 
	 	 	 	 
	 
	Name

	 	Title
	 	Signature






     This certificate supersedes any certificate of authorized individuals you may currently have
on file.



	 	 	 	 	 
	 
	 	 /s/ Bettye Hill
 

Bettye Hill


Title: Assistant Vice President
	 	 
	 

	 	Date: June 8, 2007	 	 






B-13









 





EXHIBIT B




To Control Agreement Among 

Bank of America, n.a., as Agent,

Montpelier Reinsurance Ltd. and the Bank of New York




[Letterhead of Bank of America, N.A.]




[Date]




The Bank of New York

One Wall Street

New York, New York 10286




Attention:




NOTICE OF EXCLUSIVE CONTROL



We hereby instruct you pursuant to the terms of that certain Control Agreement, dated as of June 8,
2007 (as from time to time amended and supplemented, the “Control Agreement”), among the
undersigned, Montpelier Reinsurance Ltd. and you, as Custodian, that you (i) shall not follow any
entitlement orders of the Customer with respect to the Collateral Account or the Collateral from
time to time credited thereto held by you for the Customer, and (ii) unless and until otherwise
expressly instructed by the undersigned, shall exclusively follow the entitlement orders of the
undersigned with respect to such Collateral Account and Collateral. Terms used but not defined
herein shall have the meanings assigned to such terms in the Control Agreement.




Very truly yours,




BANK OF AMERICA, N.A., as Agent




By:                                         

           Authorized Signatory




cc:




B-14









 





EXHIBIT C




THE BANK OF NEW YORK

ON-LINE COMMUNICATIONS SYSTEM (THE “SYSTEM”)




TERMS AND CONDITIONS




     1. License; Use. (a) This Exhibit C shall govern Customer’s use of the System and any
computer software provided by BNY to Customer in connection herewith (collectively, the
“Software”). In the event of any conflict between the terms of this Exhibit C and the main body of
this Agreement with respect to Customer’s use of the System, the terms of this Exhibit C shall
control.



     (b) Upon delivery to Customer of Software and/or System access codes, Custodian grants to
Customer a personal, nontransferable and nonexclusive license to use the Software and the System
solely for the purpose of transmitting Written Instructions, receiving reports, making inquiries or
otherwise communicating with Custodian in connection with the Account(s). Customer shall use the
Software and the System solely for its own internal and proper business purposes and not in the
operation of a service bureau. Except as set forth herein, no license or right of any kind is
granted to Customer with respect to the Software or the System. Customer acknowledges that
Custodian and its suppliers retain and have title and exclusive proprietary rights to the Software
and the System, including any trade secrets or other ideas, concepts, know-how, methodologies, or
information incorporated therein and the exclusive rights to any copyrights, trademarks and patents
(including registrations and applications for registration of either), or other statutory or legal
protections available in respect thereof. Customer further acknowledges that all or a part of the
Software or the System may be copyrighted or trademarked (or a registration or claim made therefor)
by Custodian or its suppliers. Customer shall not take any action with respect to the Software or
the System inconsistent with the foregoing acknowledgments, nor shall Customer attempt to
decompile, reverse engineer or modify the Software. Customer may not copy, sell, lease or provide,
directly or indirectly, any of the Software or any portion thereof to any other person or entity
without Custodian’s prior written consent. Customer may not remove any statutory copyright notice
or other notice included in the Software or on any media containing the Software. Customer shall
reproduce any such notice on any reproduction of the Software and shall add any statutory copyright
notice or other notice to the Software or media upon Custodian’s request.



     (c) If Customer subscribes to any database service provided by Custodian in connection with
its use of the System, delivery of such database to Customer shall constitute the granting by
Custodian to Customer of a non-exclusive, non-transferable license to use such database for so long
as this Exhibit C is in effect. It is understood and agreed that any database supplied by
Custodian is derived from sources which Custodian believes to be reliable but Custodian does not,
and cannot for the fees charged, guarantee or warrant that the data is correct, complete or
current. All such databases are provided as an accommodation by Custodian to its customers and are
compiled without any independent investigation by Custodian. However, Custodian will endeavor to
update and revise each database on a periodic basis as Custodian, in its discretion, deems
necessary and appropriate. Customer also agrees that Customer will



B-15









 







promptly install all updates and revisions to each database which Custodian provides and that
Custodian cannot bear any responsibility whatsoever for Customer’s failure to do so. CUSTODIAN IS
NOT RESPONSIBLE FOR ANY RESULTS OBTAINED BY CUSTOMER FROM USE OF DATABASE SERVICES PROVIDED BY
CUSTODIAN.



     2. Equipment. Customer shall obtain and maintain at its own cost and expense all
equipment and services, including but not limited to communications services, necessary for it to
utilize the Software and obtain access to the System, and Custodian shall not be responsible for
the reliability or availability of any such equipment or services.



     3. Proprietary Information. The Software, any data base and any proprietary data,
processes, information and documentation made available to Customer (other than which are or become
part of the public domain or are legally required to be made available to the public)
(collectively, the “Information”), are the exclusive and confidential property of Custodian or its
suppliers. However, for the avoidance of doubt, reports generated by Customer containing
information relating to the Account(s) are not deemed to be within the meaning of the term
“Information”. Customer shall keep the Information confidential by using the same care and
discretion that Customer uses with respect to its own confidential property and trade secrets, but
not less than reasonable care. Upon termination of the Agreement or the licenses granted herein
for any reason, Customer shall return to Custodian any and all copies of the Information which are
in its possession or under its control. The provisions of this Section 3 shall not affect the
copyright status of any of the Information which may be copyrighted and shall apply to all
information whether or not copyrighted.



     4. Modifications. Custodian reserves the right to modify the Software from time to
time and Customer shall install new releases of the Software as Custodian may direct. Customer
agrees not to modify or attempt to modify the Software without Custodian’s prior written consent.
Customer acknowledges that any modifications to the Software, whether by Customer or Custodian and
whether with or without Custodian’s consent, shall become the property of Custodian.



     5. NO REPRESENTATIONS OR WARRANTIES. CUSTODIAN AND ITS MANUFACTURERS AND SUPPLIERS
MAKE NO WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE SOFTWARE, THE SYSTEM, ANY SERVICES OR ANY
DATABASE, EXPRESS OR IMPLIED, IN FACT OR IN LAW, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. CUSTOMER ACKNOWLEDGES THAT THE SOFTWARE, THE
SYSTEM, ANY SERVICES AND ANY DATABASE ARE PROVIDED “AS IS.” TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ANY DAMAGES, WHETHER
DIRECT, INDIRECT SPECIAL, OR CONSEQUENTIAL, WHICH CUSTOMER MAY INCUR IN CONNECTION WITH THE
SOFTWARE, SERVICES OR ANY DATABASE, EVEN IF CUSTODIAN OR SUCH SUPPLIER HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ACTS OF
GOD, MACHINE OR COMPUTER BREAKDOWN OR MALFUNCTION, INTERRUPTION OR MALFUNCTION OF COMMUNICATION



B-16









 







FACILITIES, LABOR DIFFICULTIES OR ANY OTHER SIMILAR OR DISSIMILAR CAUSE BEYOND THEIR
REASONABLE CONTROL.



     6. Security; Reliance; Unauthorized Use. Custodian will establish security procedures
to be followed in connection with the System. Customer understands and agrees that the security
procedures are intended to determine whether instructions received by Custodian through the System
are authorized but are not (unless otherwise specified in writing) intended to detect any errors
contained in such instructions. Customer will cause all persons utilizing the Software and the
System to treat all applicable user and authorization codes, passwords and authentication keys with
the highest degree of care and confidentiality. Custodian is hereby irrevocably authorized to
comply with and rely upon on Written Instructions, whether or not authorized, received by it
through the System in accordance with the security procedures. Customer acknowledges that it is
its sole responsibility to assure that only Authorized Persons use the System and that to the
fullest extent permitted by applicable law Custodian shall not be responsible nor liable for any
unauthorized use thereof or for any losses sustained by Customer arising from or in connection with
the use of the System or Custodian’s reliance upon and compliance with Written Instructions
received through the System.



     7. Stern Acknowledgments. Custodian shall acknowledge through the System its receipt
of each transmission communicated through the System, and in the absence of such acknowledgment
Custodian shall not be liable for any failure to act in accordance with such transmission and
Customer may not claim that such transmission was received by Custodian.



     8. EXPORT RESTRICTIONS. EXPORT OF THE SOFTWARE IS PROHIBITED BY UNITED STATES LAW.
CUSTOMER MAY NOT UNDER ANY CIRCUMSTANCES RESELL, DIVERT, TRANSFER, TRANSSHIP OR OTHERWISE DISPOSE
OF THE SOFTWARE (IN ANY FORM) IN OR TO ANY OTHER COUNTRY. IF CUSTODIAN DELIVERED THE SOFTWARE TO
CUSTOMER OUTSIDE OF THE UNITED STATES, THE SOFTWARE WAS EXPORTED FROM THE UNITED STATES IN
ACCORDANCE WITH THE EXPORT ADMINISTRATION REGULATIONS. DIVERSION CONTRARY TO U.S. LAW IS
PROHIBITED. Customer hereby authorizes Custodian to report its name and address to government
agencies to which Custodian is required to provide such information by law.



     9. Encryption. Customer acknowledges and agrees that encryption may not be available
for every communication through the System, or for all data. Customer agrees that Custodian may
deactivate any encryption features at any time, without notice or liability to Customer, for the
purpose of maintaining, repairing or troubleshooting the System or the Software.



     10. On-Line Inquiry and Modification of Records. In connection with Customer’s use of
the System, Custodian may, at Customer’s request, permit Customer to enter data directly into a
Custodian database for the purpose of modifying certain information maintained by Custodian’s
systems, including, but not limited to, change of address information. To the extent that Customer
is granted such access, Customer agrees to indemnify and hold Custodian harmless from all loss,
liability, cost, damage and expense (including attorney’s fees and expenses) to which Custodian may
be subjected or which may be incurred in connection with
any claim which may arise out of or as a result of changes to Custodian database records
initiated by Customer.




B-17










 








EXHIBIT C




FORM OF COMPLIANCE CERTIFICATE




                    , ___, 200_




Bank of America, N.A.

[insert Agency address]




     Re: Montpelier Reinsurance Ltd. and Montpelier Re Holdings Ltd.



     Reference is made to (i) the Amended and Restated Letter of Credit Reimbursement and Pledge
Agreement, dated as of June 9, 2006 (as amended to date, the “June 2006 Reimbursement and Pledge
Agreement”), by and among Montpelier Reinsurance Ltd., a company organized under the laws of
Bermuda (“Mont Re”), the lenders party thereto and Bank of America, N.A. as administrative agent
for the lenders (the “Administrative Agent”), (ii) the Second Amended and Restated Letter of Credit
Reimbursement and Pledge Agreement dated as of August 4, 2005 (as amended to date, the “August 2005
Reimbursement and Pledge Agreement”) by and among Mont Re, Montpelier Re Holdings Ltd. (“Parent”),
the lenders party thereto and the Administrative Agent, and (iii) the Letter of Credit
Reimbursement and Pledge Agreement, dated as of June 8, 2007 (as amended to date, the “June 2008
Reimbursement and Pledge Agreement” and, together with the June 2006 Reimbursement and Pledge
Agreement and the August 2005 Reimbursement and Pledge Agreement, the “Reimbursement and Pledge
Agreements”). Capitalized terms used herein without definition shall have the respective meanings
assigned to such terms in the Reimbursement and Pledge Agreements.



     This Compliance Certificate is being furnished to the Administrative Agent pursuant to Section
6.4(d) of each of the Reimbursement and Pledge Agreements. The undersigned officer of Parent and
the undersigned officer of Mont Re each hereby certifies to you as follows: the information
furnished in the calculations attached hereto was true and correct as of the last day of the fiscal
period ended                      and the undersigned officer of Parent and Mont Re each hereby certifies to
you that as of the date of this certificate, there exists no Event of Default under any of the Loan
Documents (as defined in each of the Reimbursement and Pledge Agreements).



     IN WITNESS WHEREOF, each undersigned officer has executed this Compliance Certificate as of
the date first written above.



C-1









 





	 	 	 	 	 	 	 
	 	 	MONTPELIER RE HOLDINGS LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	MONTPELIER REINSURANCE LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 





C-2









 





Compliance Certificate Worksheet




for




MONTPELIER RE HOLDINGS LTD.




                     __, 200_




	 	 	 	 	 	 	 
	1.
	 	Section 8.1 – Leveraged Ratio	 	 	 	 
	 
	 	 	 	 	 	 
	A.
	 	Consolidated Debt of the Parent and its Subsidiaries	 	$	 	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	B.
	 	Hedging Obligations	 	$	 	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	C.
	 	Consolidated Debt (Item A minus Item B)	 	$	 	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	D.
	 	Consolidated Net Worth	 	$	 	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	E.
	 	Item C plus Item D	 	$	 	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	F.
	 	Ratio of Item C to Item E	 	 	 	%
	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Item 1 is not permitted to exceed 30%.	 	 	 	 
	 
	 	 	 	 	 	 
	2.
	 	Section 8.2 – A.M. Best Rating	 	 	 	 
	 
	 	 	 	 	 	 
	A.M. Best Rating of The Borrower
	 	 	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	A.M. Best Rating is not permitted to fall below the rating of “B++”.	 	 	 	 
	 
	 	 	 	 	 	 
	3.
	 	Schedule 5.15 to the Reimbursement and Pledge Agreements is hereby replaced with Schedule 5.15 attached hereto.	 	 	 	 






C-3









 





SCHEDULE 5.15




SUBSIDIARIES AND

OTHER EQUITY INVESTMENTS




[TO BE UPDATED]




	 	 	 	 	 	 	 	 	 
	Name of	 	 	 	Insurance	 	Material	 	 
	Subsidiary	 	Jurisdiction	 	Subsidiary	 	Party	 	Ownership
	Montpelier Reinsurance Ltd.

	 	Bermuda
	 	Yes
	 	Yes
	 	100% owned by Montpelier Re Holdings Ltd.
	 
	 	 	 	 	 	 	 	 
	Montpelier Marketing Services (UK) Limited

	 	United Kingdom
	 	No
	 	No
	 	100% owned by Montpelier Reinsurance Ltd.
	 
	 	 	 	 	 	 	 	 
	Montpelier Agency Ltd.

	 	Bermuda
	 	No
	 	No
	 	100% owned by Montpelier Reinsurance Ltd.
	 
	 	 	 	 	 	 	 	 
	Montpelier Capital Advisors Ltd.

	 	Bermuda
	 	No
	 	No
	 	100% owned by Montpelier Re Holdings Ltd.
	 
	 	 	 	 	 	 	 	 
	Montpelier Re U.S. Holdings Ltd.

	 	Delaware
	 	No
	 	No
	 	100% owned by Montpelier Re Holdings Ltd.
	 
	 	 	 	 	 	 	 	 
	Montpelier Technical Resources Ltd.

	 	Delaware
	 	No
	 	No
	 	100% owned by Montpelier Re U.S. Holdings Ltd.
	 
	 	 	 	 	 	 	 	 
	Montpelier Underwriting Inc.

	 	Delaware
	 	No
	 	No
	 	100% owned by Montpelier Re U.S. Holdings Ltd.






	 	 	 	 	 	 	 
	Name of Investment Entity	 	Jurisdiction	 	Ownership
	Blue Ocean Holdings Re Ltd.

	 	Bermuda
	 	43%	 	 
	 
	 	 	 	 	 	 
	MRH Capital Trust I

	 	Delaware
	 	100% of common securities owned by Montpelier Re Holdings Ltd.

	 
	 	 	 	 	 	 
	MRH Capital Trust II

	 	Delaware
	 	100% of common securities owned by Montpelier Re Holdings Ltd.








C-4









 










EXHIBIT D

FORM OF PLEDGED COLLATERAL CERTIFICATE




                    , ___, 200_




Bank of America, N.A.

[insert Agency address]




Re: Montpelier Reinsurance Ltd.




     Reference is made to the Letter of Credit Reimbursement and Pledge Agreement, dated as of June
8, 2007 (the “Reimbursement and Pledge Agreement”), by and among Montpelier Reinsurance
Ltd., a company organized under the laws of Bermuda (the “Borrower”), the lenders party
thereto (the “Lenders”) and Bank of America, N.A., as administrative agent for the Lenders
(the “Administrative Agent”). Capitalized terms used herein without definition shall have
the respective meanings assigned to such terms in the Reimbursement and Pledge Agreement.



     This Pledged Collateral Certificate is being furnished to the Administrative Agent pursuant to
Section 6.4(e) of the Reimbursement and Pledge Agreement. The undersigned officer of the Borrower
hereby certifies to you as follows: (a) the information furnished in the calculations attached
hereto was true and correct as of the last Business Day of the month ended immediately preceding
the date of this certificate and (b) as of the date of this certificate, there exists no Event of
Default under any of the Loan Documents.



     IN WITNESS WHEREOF, the undersigned officer has executed this Pledged Collateral Certificate
as of the date first written above.



	 	 	 	 	 	 	 
	 	 	MONTPELIER REINSURANCE LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 





D-1









 





Pledged Collateral Certificate Worksheet




for




MONTPELIER REINSURANCE LTD.




                     ___, 200_






D-2









 










EXHIBIT E




FORM OF SEVERAL LETTER OF CREDIT




Date:                                        




[IRREVOCABLE DOCUMENTARY CREDIT NO.                                        ]




[Beneficiary]

[Address]




Ladies and Gentlemen:




     We, the issuing banks listed below (hereinafter referred to individually as a “Letter of
Credit Bank,” and collectively, the “Letter of Credit Banks”), hereby establish in your
favor for the account of Montpelier Reinsurance Ltd. this clean Irrevocable Letter of Credit No.
                    in the amount up to but not exceeding the Letter of Credit Commitment (as defined
below).



     This Letter of Credit is not subject to any condition or qualifications not set forth herein.



     The maximum liability of each Letter of Credit Bank with respect to any demand for payment
made hereunder shall be its Commitment Share of the amount of such demand for payment, as follows:



	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	MAXIMUM SHARE OF	 
	 	 	COMMITMENT	 	 	LETTER OF CREDIT	 
	LETTER OF CREDIT BANK	 	SHARE	 	 	COMMITMENT	 
	[Lender]
	 	 	 	%	 	 	U.S.$	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	[Lender]
	 	 	 	%	 	 	U.S.$	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	[Lender]
	 	 	 	%	 	 	U.S.$	 
	 
	 	 	 	 	 	 	 
	 
	 	 
	TOTAL
	 	 	100	%	 	 	U.S.$	 






     The obligations of the Letter of Credit Banks hereunder are several and not joint, and no
Letter of Credit Bank shall be responsible or otherwise liable for the failure of any other Letter
of Credit Bank to perform its obligations hereunder, nor shall the failure of any Letter of Credit
Bank to perform its obligations under this Letter of Credit relieve any other Letter of Credit Bank
of its obligations hereunder.



E-1









 





     Each drawing honored by the Letter of Credit Banks shall reduce the Letter of Credit Amount
pro tanto.



     Subject to the further provisions of this Letter of Credit, demands for payment may be made by
you on or prior to the Expiration Date (as defined below) from time to time hereunder by
presentation to Bank of America, N.A., as agent (in such capacity, the “Letter of Credit
Agent”) of a draft signed by a person purporting to be your authorized officer. Such draft may
be in the form of a writing or in the form of a telex or other writing transmitted by any
telecommunication facility (in which case a signed copy shall thereafter be promptly sent to the
Letter of Credit Agent). Such draft shall be dated the date of presentation and shall be presented
at the Letter of Credit Agent’s office located at One Fleet Way, Scranton, PA 18507, or via
facsimile in accordance herewith.



     We the Letter of Credit Banks listed herein hereby agree that all demands for payment
hereunder made in compliance with the terms of this Letter of Credit will be duly honored by us
upon delivery of the draft as specified above and if presented at the Letter of Credit Agent’s
aforesaid office on or before the Expiration Date hereof. Demand for payment may be made by you
under this Letter of Credit at any time during the Letter of Credit Agent’s business hours at its
aforesaid address at One Fleet Way, Scranton, PA 18507, or via facsimile in accordance herewith on
a Business Day (as hereinafter defined). Each drawing under this Letter of Credit shall be
remitted to you in accordance with your instructions. The obligation of the Letter of Credit Banks
to honor demands for payment is not contingent upon reimbursement with respect thereto.



     As used in this Letter of Credit:



     (a) “Business Day” means any day other than a Saturday, a Sunday and any day on which
banking institutions in Chicago, Illinois are authorized by law to close.



     (b) “Letter of Credit Commitment” means $                    .



     Only you may make a drawing under this Letter of Credit. Upon payment to you of its
Commitment Share of the Letter of Credit Commitment specified in a demand presented hereunder, a
Letter of Credit Bank shall be fully discharged of its obligation under this Letter of Credit to
the extent of its Commitment Share of such demand and such Letter of Credit Bank shall not
thereafter be obligated to make any further payments under this Letter of Credit in respect of such
demand.



     The term “you” as used herein includes any successor to you by operation of law. If a court
of law appoints a successor in interest to you, then the term “you” includes, and, if the Letter of
Credit Agent has written notice thereof, is limited to, the court-appointed domiciliary receiver
(including conservator, rehabilitator or liquidator).



     This Letter of Credit shall expire on the earlier of (i) 5:00 p.m. (Chicago time) on
                    , 200___(or if such day shall not be a Business Day, the preceding Business Day)[;



E-2









 




provided, however, that such date (or any extended date) shall be extended for one year unless at
least 30 days prior to such date (or such extended date) the Letter of Credit Agent has given you
prior written notice of such expiration at your address above or at such address as you may have
provided us with prior notice thereof] (such date, as so extended, shall be called the
“Expiration Date”). No drawing may be made by you after the Expiration Date. Provided
that we are not in default with respect to our obligations under this Letter of Credit, you shall
surrender this Letter of Credit to the Letter of Credit Agent promptly following our request
therefor on or after the Expiration Date.




     This Letter of Credit is not assignable or transferable. This Letter of Credit is subject to
and governed by the law(s) of the State of New York, and the International Standby Practices 98
(ISP98) (International Chamber of Commerce Publication No. 590), except that, if the Letter of
Credit Agent is closed for reasons described in Article 3.14, thereof, the Letter of Credit Agent
hereby agrees to effect payment, if this Letter of Credit is drawn against otherwise in compliance
with the terms and conditions hereof, within thirty (30) days after the resumption of business. In
the event of any conflict, the laws of the State of New York will control.



     All drafts presented to us in connection with any demand for payment hereunder, as well as all
notices and other communications to us in respect of this Letter of Credit, shall be in writing and
addressed and presented to the Letter of Credit Agent at One Fleet Way, Scranton, PA 18507, or via
facsimile in accordance herewith (570) 330- 4187, Attention: Letter of Credit Department, and
shall make specific reference to the Letter of Credit Agent’s Letter of Credit number for this
Letter of Credit. Such documents, notices and other communications shall be personally delivered
to the Letter of Credit Agent, or may be sent to us by facsimile transmission, promptly confirmed
by delivery of the written document, notice or other communication, as the case may be, at (570)
330- 4187.



     This Letter of Credit may be amended to delete a Letter of Credit Bank or add a Letter of
Credit Bank, or change Commitment Shares, provided that such amendment does not decrease the Letter
of Credit Commitment, and need only be signed by the Letter of Credit Agent so long as any Letter
of Credit Bank added shall be approved by the Securities Valuation Office of the National
Association of Insurance Commissioners and shall have a rating of “A3” or better from Moody’s
and/or “A” or better from Standard and Poor’s, and/or “A-” or better from Fitch.



E-3









 






     If you require any assistance or have any questions regarding this transaction, please call
(570) 330-4214.



	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	BANK OF AMERICA, NATIONAL
	 	 	ASSOCIATION, Letter of Credit Agent
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 






E-4









 





SCHEDULE 1.1




COMMITMENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Commitment	 
	Lender	 	Commitment	 	 	Percentage	 
	Bank of America, N.A.
	 	$	39,166,666.67	 	 	 	15.666666668	%
	HSBC Bank (USA), National Association
	 	$	39,166,666.67	 	 	 	15.666666664	%
	ING Bank N.V., London Branch
	 	$	37,500,000.00	 	 	 	15.000000000	%
	Credit Suisse, Cayman Islands Branch
	 	$	35,000,000.00	 	 	 	14.000000000	%
	The Bank of New York
	 	$	35,000,000.00	 	 	 	14.000000000	%
	Lehman Brothers Bank, FSB
	 	$	35,000,000.00	 	 	 	14.000000000	%
	Deutsche Bank AG, New York Branch
	 	$	29,166,666.67	 	 	 	11.666666668	%
	 
	 	 	 	 	 	 
	TOTAL
	 	$	250,000,000	 	 	 	100	%
	 
	 	 	 	 	 	 






Sch. 1.1









 








SCHEDULE 1.2




COLLATERAL COVERAGE AMOUNT CALCULATION




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Applicable
	 	 	 	 	 	 	Percentage of
	 	 	 	 	 	 	Fair Market Value if
	 	 	Applicable Percentage of Fair	 	A.M. Best Rating of B++
	 	 	Market Value if A.M. Best	 	or Below or A.M. Best
	Eligible Collateral	 	Rating of A- or Above	 	Rating is Withdrawn
	Cash
	 	 	100	%	 	 	90	%
	 
	 	 	 	 	 	 	 	 
	Cash Equivalents
	 	 	90	%	 	 	80	%
	 
	 	 	 	 	 	 	 	 
	Government Debt with maturities of less than two years
	 	 	95	%	 	 	85	%
	 
	 	 	 	 	 	 	 	 
	Government Debt with maturities of two years or more but not more than 10 years
	 	 	90	%	 	 	80	%
	 
	 	 	 	 	 	 	 	 
	Government Debt with maturities of more than 10 years
	 	 	85	%	 	 	75	%
	 
	 	 	 	 	 	 	 	 
	Federal Agency Debt with maturities of less than two years
	 	 	95	%	 	 	85	%
	 
	 	 	 	 	 	 	 	 
	Federal Agency Debt with maturities of two years or more but not more than 10 years
	 	 	90	%	 	 	80	%
	 
	 	 	 	 	 	 	 	 
	Federal Agency Debt with maturities of more than ten years
	 	 	85	%	 	 	75	%
	 
	 	 	 	 	 	 	 	 
	Corporate Securities rated at least AA- by S&P or Aa3 by Moody’s with maturities of less than two years
	 	 	90	%	 	 	80	%
	 
	 	 	 	 	 	 	 	 
	Corporate Securities rated at least AA- by S&P or Aa3 by Moody’s with maturities between two and ten years
	 	 	85	%	 	 	75	%






Sch. 1.2









 






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Applicable
	 	 	 	 	 	 	Percentage of
	 	 	 	 	 	 	Fair Market Value if
	 	 	Applicable Percentage of Fair	 	A.M. Best Rating of B++
	 	 	Market Value if A.M. Best	 	or Below or A.M. Best
	Eligible Collateral	 	Rating of A- or Above	 	Rating is Withdrawn
	Corporate Securities rated less than AA- but at least BBB by S&P or rated less than Aa3 but at least Baa2 by Moody’s with maturities of ten years or less
	 	 	80	%	 	 	70	%
	 
	 	 	 	 	 	 	 	 
	Municipal Securities rated AAA by S&P or Aaa by Moody’s
	 	 	90	%	 	 	80	%
	 
	 	 	 	 	 	 	 	 
	Municipal Securities rated less than AAA but at least BBB by S&P or rated less than Aaa but at least Baa2 by Moody’s
	 	 	85	%	 	 	75	%
	 
	 	 	 	 	 	 	 	 
	ABSs rated AAA by S&P or Aaa by Moody’s with maturities of 10 years or less
	 	 	80	%	 	 	70	%
	 
	 	 	 	 	 	 	 	 
	MBS Investments rated AAA by S&P or Aaa by Moody’s with maturities of 10 years or less
	 	 	80	%	 	 	70	%







Sch. 1.2









 








SCHEDULE 2.1.1




EXISTING LETTERS OF CREDIT




Sch. 2.1.1









 





SCHEDULE 5.6




LITIGATION




None




Sch. 5.6









 





SCHEDULE 5.15




SUBSIDIARIES AND

OTHER EQUITY INVESTMENTS




SUBSIDIARIES AND

OTHER EQUITY INVESTMENTS




	 	 	 	 	 	 	 	 	 
	Name of	 	 	 	Insurance	 	Material	 	 
	Subsidiary	 	Jurisdiction	 	Subsidiary	 	Party	 	Ownership
	Montpelier Reinsurance Ltd.

	 	Bermuda
	 	Yes
	 	Yes
	 	100% owned by Montpelier Re Holdings Ltd.
	 
	 	 	 	 	 	 	 	 
	Montpelier Marketing Services (UK) Limited

	 	United Kingdom
	 	No
	 	No
	 	100% owned by Montpelier Reinsurance Ltd.
	 
	 	 	 	 	 	 	 	 
	Montpelier Agency Ltd.

	 	Bermuda
	 	No
	 	No
	 	100% owned by Montpelier Reinsurance Ltd.
	 
	 	 	 	 	 	 	 	 
	Montpelier Capital Advisors Ltd.

	 	Bermuda
	 	No
	 	No
	 	100% owned by Montpelier Re Holdings Ltd.
	 
	 	 	 	 	 	 	 	 
	Montpelier Re U.S. Holdings Ltd.

	 	Delaware
	 	No
	 	No
	 	100% owned by Montpelier Re Holdings Ltd.
	 
	 	 	 	 	 	 	 	 
	Montpelier Technical Resources Ltd.

	 	Delaware
	 	No
	 	No
	 	100% owned by Montpelier Re U.S. Holdings Ltd.
	 
	 	 	 	 	 	 	 	 
	Montpelier Underwriting Inc.

	 	Delaware
	 	No
	 	No
	 	100% owned by Montpelier Re U.S. Holdings Ltd.






Sch. 5.15









 





	 	 	 	 	 	 	 
	Name of Investment Entity	 	Jurisdiction	 	Ownership
	Blue Ocean Holdings Re Ltd.

	 	Bermuda
	 	 	43	%
	 
	 	 	 	 	 	 
	MRH Capital Trust I

	 	Delaware
	 	100% of common securities owned by Montpelier Re Holdings Ltd.

	 
	 	 	 	 	 	 
	MRH Capital Trust II

	 	Delaware
	 	100% of common securities owned by Montpelier Re Holdings Ltd.








Sch. 5.15









 








SCHEDULE 14.7




ADMINISTRATIVE AGENT’S OFFICE;



CERTAIN ADDRESSES FOR NOTICES




	 	 	 	 	 
	THE BORROWER:	 	 
	 
	 	 	 	 
	MONTPELIER REINSURANCE LTD.	 	 
	Montpelier House	 	 
	94 Pitts Bay Road	 	 
	Hamilton, Bermuda HM HX	 	 
	Attention:

	 	William Pollett	 	 
	Telephone:

	 	(441) 297-9576	 	 
	Facsimile:

	 	(441) 296-5551	 	 
	E-Mail:

	 	Bill.Pollett@montpelierre.bm
	 	 
	 
	 	 	 	 
	with a	 	 
	copy to:

	 	Jonathan Kim	 	 
	 

	 	General Counsel	 	 
	Telephone:

	 	(441) 297-9595	 	 
	Facsimile:

	 	(441) 296-5551	 	 
	E-Mail:

	 	jonathan.kim@montpelierre.bm	 	 
	 
	 	 	 	 
	www.montpelierre.bm	 	 
	 
	 	 	 	 
	ADMINISTRATIVE AGENT:	 	 
	 
	 	 	 	 
	Administrative Agent’s Office	 	 
	 
	 	 	 	 
	(for payments and Requests for Credit Extensions):	 	 
	 
	 	 	 	 
	Bank of America N.A.	 	 
	Credit Services West	 	 
	Building B	 	 
	2001 Clayton Road	 	 
	Mail Code: CA4-702-02-25	 	 
	Concord, CA 94520-2405	 	 
	Attention:

	 	Shashanna Kratz	 	 
	Telephone:

	 	(925) 675-8439	 	 
	Facsimile:

	 	(888) 861-2999	 	 
	E-Mail:

	 	shashanna.a.kratz@bankofamerica.com	 	 






Sch. 14.7-1









 





	 	 	 	 	 
	For US Dollars:	 	 
	 
	 	 	 	 
	Bank of America, N.A.	 	 
	New York, New York	 	 
	ABA# 026 009 593	 	 
	 
	 	 	 	 
	Credit A/C#: 375 083 6479	 	 
	 
	 	 	 	 
	Attn:

	 	Credit Services West #5596
	 	 
	 
	 	 	 	 
	Ref:

	 	Montpelier Reinsurance Ltd.	 	 
	 
	 	 	 	 
	(for other notices to the Administrative Agent):	 	 
	 
	 	 	 	 
	Bank of America, N.A.	 	 
	335 Madison Avenue, 4th Floor	 	 
	New York, NY 10017	 	 
	Mail Code: NY1-503-04-03	 	 
	Attention:

	 	Don B. Pinzon	 	 
	Telephone

	 	212.503.8326	 	 
	Facsimile:

	 	212.901.7843	 	 
	E-Mail:

	 	don.b.pinzon@bankofamerica.com	 	 
	 
	 	 	 	 
	FRONTING BANK AND LC ADMINISTRATOR:	 	 
	 
	 	 	 	 
	(Bank of America)	 	 
	 
	 	 	 	 
	(for payments and Requests for Letters of Credit)	 	 
	 
	 	 	 	 
	Bank of America N.A.	 	 
	Trade Services	 	 
	1 Fleet Way	 	 
	Mail Code: PA6-580-02-30	 	 
	Scranton, PA 18507	 	 
	Attention:

	 	Garrett J. Nash	 	 
	Telephone:

	 	(570) 330-4213	 	 
	Facsimile:

	 	(570) 330-4350	 	 
	E-Mail:

	 	garrett.j.nash@bankofamerica.com	 	 






Sch. 14.7-2









 





	 	 	 
	Payments:
	 
	 	 
	Bank of America, N.A.
	New York, New York
	ABA #026 009 593
	 
	 	 
	Credit A/C# 04535-883980
	 
	 	 
	Acct. Name: Standby Unit – Scranton Office
	 
	 	 
	Ref:   Montpelier Reinsurance ltd.
	 
	 	 
	LENDERS:
	 
	 	 
	BANK OF AMERICA, N.A.
	231 S. LaSalle Street, 10th Floor
	Chicago, Illinois 60604
	Attention:

	 	Debra Basler
	Telephone:

	 	(312) 828-3734
	Facsimile:

	 	(312) 828-3600
	E-Mail:

	 	debra.basler@bankofamerica.com
	 
	 	 
	HSBC BANK USA, NATIONAL ASSOCIATION
	452 Fifth Avenue
	New York, New York 10018
	Attention:

	 	Anthony C. Valencourt, Managing Director
	Telephone:

	 	(212) 525-2579
	Facsimile:

	 	(212) 525-2573
	E-Mail:

	 	anthony.c.valencourt@us.hsbc.com
	 
	 	 
	CREDIT SUISSE, CAYMAN ISLAND BRANCH
	Eleven Madison Avenue
	New York, New York 10010
	Attention:

	 	Jay Chall
	Telephone:

	 	(212) 325-9010
	Facsimile:

	 	(212) 743-1843
	E-Mail:

	 	jay.chall@credit-suiss.com
	 
	 	 
	ING BANK N.V., LONDON BRANCH
	60 London Wall
	London, England
	EC2M 5TQ
	 	 
	Attention:

	 	Nick Marchant, Director
	Telephone:

	 	207 767 5902
	Facsimile:

	 	207 767 7507
	E-Mail:

	 	nick.marchant@uk.ing.com






Sch. 14.7-3









 





	 	 	 
	THE BANK OF NEW YORK
	Insurance Division
	One Wall Street, 17th Floor
	New York, New York 12086
	Attention:

	 	Sreecaran Ganesan
	Telephone:

	 	(212) 635-4566
	Facsimile:

	 	(212) 809-9520
	E-Mail:

	 	sganesan@bankofny.com
	 
	 	 
	DEUTSCHE BANK AG, NEW YORK BRANCH
	c/o Deutsche Bank Securities Inc.
	60 Wall Street
	New York, NY 10005
	Attention:

	 	Michael Campites
	Telephone:

	 	(212) 250-8429
	Facsimile:

	 	(212) 797-0270
	E-Mail:

	 	michael.campites@db.com
	 
	 	 
	LEHMAN BROTHERS BANK, FSB
	High Grade Loan Portfolio Group
	745 7th Avenue, 5th Floor
	New York, NY 10019
	Attention:

	 	Janine Shugan
	Telephone:

	 	(212) 526-8625
	Facsimile:

	 	(917) 522-0139
	E-Mail:

	 	jshugan@lehman.com






Sch. 14.7-4