Clarendon Holdings, Inc.
   Clarendon Holdings, Inc.
   National Australia Bank Limited
   National Australia Bank Limited
  US$106,500,000 Term Facility Agreement




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Contents
 1 Definitions and Interpretation
    
    
    12 The Facility
    
    
    203 Purpose
    
    
    214 Conditions of Loans
    
    
    225 Loans
    
    
    226 Repayment
    
    
    237 Illegality, Voluntary Prepayment and Cancellation
    
    
    238 Mandatory Prepayment
    
    
    249 Restrictions
    
    
    2810 Interest
    
    
    2911 Interest Periods
    
    
    3012 Changes To The Calculation Of Interest
    
    
    3013 Fees
    
    
    3114 Tax Gross Up And Indemnities
    
    
    3215 Increased Costs
    
    
    3516 Indemnities
    
    
    3617 Mitigation By The Lenders
    
    
    3718 Costs And Expenses
    
    
    3819 Representations
    
    
    3920 Information Undertakings
    
    
    4921 Financial Covenants
    
    
    5622 General Undertakings
    
    
    5823 Events Of Default
    
    
    6824 Changes To The Lenders
    
    
    7325 Changes to the Obligors
    
    
    7826 Role Of The Agent, The Arranger, The Security Agent And Others
    
    
    7927 Conduct Of Business By The Finance Parties
    
    
    8628 Sharing Among The Finance Parties
    
    
    8729 Payment Mechanics
    
    
    8830 Set-Off
    
    
    9131 Notices
    
    
    9132 Calculations And Certificates
    
    
    9433 Partial Invalidity
    
    
    9434 Remedies And Waivers
    
    
    9535 Amendments And Waivers
    
    
    9536 Counterparts
    
    
    96




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37 Governing Law
    
    
    9638 Enforcement
    
    
    96Schedule 1 The Original Parties
    
    
    98Schedule 2 Conditions Precedent
    
    
    99Schedule 3 Requests
    
    
    107Schedule 4 Mandatory Cost Formula
    
    
    109Schedule 5 Form of Transfer Certificate
    
    
    112Schedule 6 Form of Assignment Agreement
    
    
    116Schedule 7 Form of Accession Letter
    
    
    118Schedule 8 Form of Compliance Certificate
    
    
    119Schedule 9 LMA Form of Confidentiality Undertaking
    
    
    121Schedule 10 Timetables
    
    
    125Schedule 11 Group Structure
    
    
    126Schedule 12 Security Agent
    
    
    127




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Term Facility Agreement
 Dated 4 March 2011
 Between:
 (1)
    
    Clarendon Holdings, Inc., a company incorporated under the laws of the State of Delaware,
United States of America whose registered office is at c/o The Corporation Trust Company,
Corporate Trust Center, 1209 Orange Street, Wilmington, DE 19801 with company number 4911106
(the Borrower);(2)
    
    The members of the Grouplisted in Part 1 of Schedule 1 (The Original Parties) as Original
Obligors (the Original Obligors);(3)
    
    National Australia Bank Limitedas mandated lead arranger (the Arranger);(4)
    
    The Financial Institutionslisted in Part 2 and Part 3 of Schedule 1 (The Original Parties)
as lenders (the Original Lenders);(5)
    
    National Australia Bank Limitedas agent of the other Finance Parties (the Agent); and(6)
    
    National Australia Bank Limitedas Security Agent for the Secured Parties.
 It is agreed:
 1
    
    Definitions and Interpretation1.1
    
    In this Agreement:Acceptable Bankmeans a bank or financial institution which has a rating for its
long-term unsecured and non-credit-enhanced debt obligations of A+ or higher by Standard
& Poors Rating Services or Fitch Ratings Ltd or A1 or higher by Moodys Investor
Services Limited or a comparable rating from an internationally recognised credit rating
agency or any other bank or financial institution approved by the Agent.Accession Lettermeans a document substantially in the form set out in Schedule 7 (Form
of Accession Letter).Accounting Principlesmeans:
 (a)
    
    in the case of the Annual Financial Statements and Quarterly Financial
Statements for a Regulated Insurance Entity, SAP;(b)
    
    in the case of the Annual Financial Statements for a non Regulated
Insurance Entity, GAAP; and(c)
    
    in the case of Quarterly Financial Statements of the Borrower, GAAP.
 Acquisitionmeans the acquisition by the Borrower of the Target Shares on the terms of
the Acquisition Documents.Acquisition Agreementmeans the stock purchase agreement (including all documents and
agreements attached to the Acquisition Agreement or otherwise referred to therein, copies
of which have been provided to the Agent) relating to the sale and purchase of the Target
Shares dated 21 December 2010 entered into and made between, among others, the Borrower
and the Vendor as amended from time to time by amendments reasonably acceptable to the
Agent.
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Acquisition Costs
 Acquisition Documents Acquisition Document
 Additional Cost Rate Mandatory Cost Formula
 Additional Obligor Changes to the Obligors
 Additional Security Agent Security Agent
 Affiliate
 Agents Spot Rate of Exchange
 Assignment Agreement Form of Assignment Agreement
 Auditors
 Authorisation
 Authority
 Availability Period
 Available Commitment
 (a)
    
    the amount of its participation in any outstanding Loans; and(b)
    
    in relation to any proposed Loan, the amount of its participation in any
Loans that are due to be made on or before the proposed Utilisation Date.
 Available Facility
 Base Currency
 Base Currency Equivalent
 Break Costs
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(a)
    
    the interest, excluding the Margin, which a Lender should have received
for the period from the date of receipt of all or any part of its participation in a
Loan or Unpaid Sum to the last day of the current Interest Period in respect of that
Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the
last day of that Interest Period;
  (b)
    
    the amount which that Lender would be able to obtain by placing an amount
equal to the principal amount or Unpaid Sum received by it on deposit with a leading
bank in the London interbank market for a period starting on the Business Day
following receipt or recovery and ending on the last day of the current Interest
Period.
 Business Day
 Cash Equivalent Investments
 (a)
    
    certificates of deposit maturing within one year after the relevant date
of calculation and issued by an Acceptable Bank;(b)
    
    any investment in marketable debt obligations issued or guaranteed by the
government of the United States of America, the United Kingdom, any member state of
the European Economic Area or any Participating Member State or by an
instrumentality or agency of any of them having an equivalent credit rating,
maturing within one year after the relevant date of calculation and not convertible
or exchangeable to any other security;(c)
    
    commercial paper not convertible or exchangeable to any other security:
 (i)
    
    for which a recognised trading market exists;(ii)
    
    issued by an issuer incorporated in the United
States of America, the United Kingdom, any member state of the European
Economic Area or any Participating Member State;(iii)
    
    which matures within one year after the relevant
date of calculation; and(iv)
    
    which has a credit rating of either A-1 or higher
by Standard & Poors Rating Services or F1 or higher by Fitch Ratings
Ltd or P-1 or higher by Moodys Investor Services Limited, or, if no
rating is available in respect of the commercial paper, the issuer of
which has, in respect of its long-term unsecured and non-credit enhanced
debt obligations, an equivalent rating;
 (d)
    
    Sterling bills of exchange eligible for rediscount at the Bank of England
and accepted by an Acceptable Bank (or their dematerialised equivalent);(e)
    
    any investment accessible within 30 days in money market funds which have
a credit rating of either A-1 or higher by Standard & Poors Rating Services or F1
or higher by Fitch Rating Ltd or P-1 or higher by Moodys Investor Services Limited
and which invest substantially all their assets in securities of the types described
in sub-paragraphs (a) to (d) above; or(f)
    
    any other debt security approved by the Majority Lenders,
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in each case, to which any member of the Group is alone (or together with other members
of the Group) beneficially entitled at that time and which is not issued or guaranteed by
any member of the Group or subject to any Security (other than Security arising under the
Transaction Security Documents).
 Change of Control
 (a)
    
    the Shareholder ceases to have the power (whether by way of ownership of
shares, proxy, contract, agency or otherwise) to:
 (i)
    
    cast, or control the casting of, 100% of the
maximum number of votes that might be cast at a general meeting of the
Borrower;(ii)
    
    appoint or remove all of the directors or other
equivalent officers of the Borrower; or(iii)
    
    give directions with respect to the operating
and financial policies of the Borrower with which the directors or other
equivalent officers of the Borrower are obliged to comply;
 (b)
    
    the cessation of full beneficial ownership by the Shareholder of all of
the issued share capital of the Borrower;(c)
    
    Enstar ceases to have Control of the Borrower;(d)
    
    the cessation of full beneficial ownership by Enstar of all of the issued
share capital of the Borrower;(e)
    
    the cessation of full beneficial ownership by the Borrower of all of the
issued share capital of the Target or a member of the Target Group;(f)
    
    any entity, person (within the meaning of Section 14(d) of the Securities
Exchange Act of 1934, as amended (Exchange Act)) or group of persons (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) that before such event
was beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of less than
20 per cent. of a member of the Groups Voting Stock shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the SEC under the Exchange Act),
directly or indirectly, of Voting Stock of that member of the Group (or other
securities convertible into such Voting Stock) representing 20 per cent. or more of
the combined voting power of all Voting Stock of the applicable member of the Group.
 Charged Property
 Chief Financial Officer
 Closing Date
 Code
 Commitment
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(a)
    
    in relation to an Original Lender, the amount in the Base Currency set
opposite its name under the heading Commitment in Part 2 or Part 3 of Schedule 1
(The Original Parties) and the amount of any other Commitment transferred to it
under this Agreement; and(b)
    
    in relation to any other Lender, the amount in the Base Currency of any
Commitment transferred to it under this Agreement,
  Completion
 Compliance Certificate Form of Compliance Certificate
 Confidentiality Undertaking LMA Form of Confidentiality
Undertaking
 Consolidated Net Surplus Financial
definitions
 Constitutional Documents
 Control
 (a)
    
    the power (whether by way of ownership of shares, proxy, contract, agency
or otherwise) to:
 (i)
    
    cast, or control the casting of, more than 50% of
the maximum number of votes that might be cast at a general meeting of
the Borrower;(ii)
    
    appoint or remove all, or the majority, of the
directors or other equivalent officers of the Borrower; or(iii)
    
    give directions with respect to the operating
and financial policies of the Borrower with which the directors or other
equivalent officers of the Borrower are obliged to comply; or
 (b)
    
    the holding beneficially of more than 50% of the issued share capital of
the Borrower (excluding any part of that issued share capital that carries no right
to participate beyond a specified amount in a distribution of either profits or
capital).
 Default Events of Default
 Delegate
 Disclosure Letters
 Disruption Event
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(a)
    
    a material disruption to those payment or communications systems or to
those financial markets which are, in each case, required to operate in order for
payments to be made in connection with the Facility (or otherwise in order for the
transactions contemplated by the Finance Documents to be carried out) which
disruption is not caused by, and is beyond the control of, any of the Parties; or(b)
    
    the occurrence of any other event which results in a disruption (of a
technical or systems-related nature) to the treasury or payments operations of a
Party preventing that, or any other Party:
 (i)
    
    from performing its payment obligations under the
Finance Documents; or(ii)
    
    from communicating with other Parties in
accordance with the terms of the Finance Documents,
  Employee Plan employer
 Enstar
 ERISA
 ERISA Affiliate
 ERISA Event
 (a)
    
    any reportable event, as defined in Section 4043 of ERISA, with respect
to an Employee Plan, as to which PBGC has not by regulation waived the requirement
of Section 4043(a) of ERISA that it be notified of such event;(b)
    
    (i) the filing of a notice of intent to terminate any Employee Plan, if
such termination would require material additional contributions in order to be
considered a standard termination within the meaning of Section 4041(b) of ERISA,
(ii) the filing under Section 4041(c) of ERISA of a notice of intent to terminate
any Employee Plan as a distress termination, or (iii) the termination of any
Employee Plan under Section 4041(c) of ERISA as a distress termination;(c)
    
    the institution of proceedings under Section 4042 of ERISA by the PBGC
for the termination of, or the appointment of a trustee to administer, any Employee
Plan;
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(d)
    
    the failure to make a required contribution to any Employee Plan that
would result in the imposition of an encumbrance under Section 430(k) of the Code or
Section 303(k) of ERISA or the filing of any request for a minimum funding waiver
under Section 412(c) of the Code with respect to any Employee Plan or Multiemployer
Plan;(e)
    
    an engagement in a non-exempt prohibited transaction within the meaning
of Section 4975(c) of the Code or Section 406 of ERISA;(f)
    
    the complete or partial withdrawal of any member of the Group or any
ERISA Affiliate from a Multiemployer Plan; and(g)
    
    an Obligor or an ERISA Affiliate incurring any liability under Title IV
of ERISA with respect to any Employee Plan (other than premiums due and not
delinquent under Section 4007 of ERISA).
 Event of Default Events
of Default
 Facility The Facility
 Facility Office
 (a)
    
    in respect of a Lender, the office or offices notified by that Lender to
the Agent in writing on or before the date it becomes a Lender (or, following that
date, by not less than five Business Days written notice) as the office or offices
through which it will perform its obligations under this Agreement; or(b)
    
    in respect of any other Finance Party, the office in the jurisdiction in
which it is resident for tax purposes.
 Fee Letter
 (a)
    
    any letter or letters dated on or about the date of this Agreement
between National Australia Bank Limited in its capacity as Arranger and the Borrower
(or the Agent and the Borrower or the Security Agent and the Borrower) setting out
any of the fees referred to in Clause 13 (Fees); and(b)
    
    any agreement setting out fees payable to a Finance Party under any
Finance Document.
 Finance Document Finance Document
 Finance Party
 Financial Indebtedness
 (a)
    
    moneys borrowed and debit balances at banks or other financial
institutions;(b)
    
    any amount raised by acceptance under any acceptance credit facility or
dematerialised equivalent;(c)
    
    any amount raised pursuant to any note purchase facility or the issue of
bonds, notes, debentures, loan stock or any similar instrument;
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(d)
    
    the amount of any liability in respect of any lease or hire purchase
contract which would, in accordance with the Accounting Principles, be treated as a
finance or capital lease;(e)
    
    receivables sold or discounted (other than any receivables to the extent
they are sold on a non-recourse basis);(f)
    
    any Treasury Transaction (and, when calculating the value of that
Treasury Transaction, only the marked to market value as at the relevant date on
which Financial Indebtedness is calculated (or, if any actual amount is due as a
result of the termination or close-out of that Treasury Transaction, that amount)
shall be taken into account);(g)
    
    any counter-indemnity obligation in respect of a guarantee, bond, standby
or documentary letter of credit or any other instrument issued by a bank or
financial institution;(h)
    
    any amount of any liability under an advance or deferred purchase
agreement if (1) one of the primary reasons behind entering into the agreement is to
raise finance or (2) the agreement is in respect of the supply of assets or services
and payment is due more than 90 days after the date of supply. For the avoidance of
doubt, this shall not include amounts payable pursuant to section 2.2 of the
Acquisition Agreement;(i)
    
    any amount raised under any other transaction (including any forward sale
or purchase, sale and sale back or sale and leaseback agreement) having the
commercial effect of a borrowing; and(j)
    
    the amount of any liability in respect of any guarantee for any of the
items referred to in paragraphs (a) to (i) above.
 Financial Quarter Financial
definitions
 Financial Year Financial definitions
 First Utilisation Date
 Forecast Cash Flows
 FSA
 GAAP
 Governmental Authority
 Group
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Group Structure Chart Group Structure
 Holding Account
 Holding Company
 Information Memorandum
 Information Package
 Insolvency Representative
 Insurance Code
 Insurance Regulator
 Intellectual Property
 (a)
    
    any patents, trade marks, service marks, designs, business names,
copyrights, design rights, moral rights, inventions, confidential information,
knowhow and other intellectual property rights and interests, whether registered or
unregistered; and(b)
    
    the benefit of all applications and rights to use such assets of each
member of the Group.
 Interest Period Interest Periods Default Interest
 IRS
 Joint Venture
 Legal Opinion Initial
conditions precedent Changes to the Obligors
 Legal Reservations
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(a)
    
    the principle that equitable remedies may be granted or refused at the
discretion of a court and the limitation of enforcement by laws relating to
insolvency, reorganisation and other laws generally affecting the rights of
creditors;(b)
    
    the time barring of claims under the Limitation Acts, the possibility
that an undertaking to assume liability for or indemnify a person against
non-payment of UK stamp duty may be void and defences of set-off or counterclaim;(c)
    
    similar principles, rights and defences under the laws of any Relevant
Jurisdiction; and(d)
    
    any other matters which are set out as qualifications or reservations as
to matters of law of general application in the Legal Opinions.
 Lender
 (a)
    
    any Original Lender; and(b)
    
    any bank, financial institution, trust, fund or other entity which has
become a Party in accordance with Clause 24 (Changes to the Lenders),
  LIBOR
 (a)
    
    the applicable Screen Rate; or(b)
    
    (if no Screen Rate is available for the currency or Interest Period of
that Loan) the arithmetic mean of the rates (rounded upwards to four decimal places)
as supplied to the Agent at its request quoted by the Reference Banks to leading
banks in the London interbank market,
  LMA
 Loan
 Majority Lenders 2 3 2 3
 Mandatory Cost Mandatory Cost Formula
 Mandatory Prepayment Account
 Margin
 Margin Stock margin stock margin security
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Material Adverse Effect
 (a)
    
    the business, operations, property, condition (financial or otherwise) or
prospects of the Group taken as a whole; or(b)
    
    the ability of an Obligor to perform its payment obligations under the
Finance Documents and/or its obligations under Clause 21.2 (Financial condition); or(c)
    
    the validity or enforceability of, or the effectiveness or ranking of any
Security granted or purporting to be granted pursuant to any of, the Finance
Documents or the rights or remedies of any Finance Party under any of the Finance
Documents.
 Month
 (a)
    
    (subject to paragraph (c) below) if the numerically corresponding day is
not a Business Day, that period shall end on the next Business Day in that calendar
month in which that period is to end if there is one, or if there is not, on the
immediately preceding Business Day;(b)
    
    if there is no numerically corresponding day in the calendar month in
which that period is to end, that period shall end on the last Business Day in that
calendar month; and(c)
    
    if an Interest Period begins on the last Business Day of a calendar
month, that Interest Period shall end on the last Business Day in the calendar month
in which that Interest Period is to end.
 Monthly
 Multiemployer Plan multiemployer plan
 Obligor
 Obligors Agent Obligors Agent
 Original Financial Statements
 (a)
    
    in relation to the Borrower, its opening balance sheet; and(b)
    
    in relation to any member of the group other than the Borrower, its
unaudited statutory annual statement and, if available on the date the Original
Financial Statements are provided, its audited statutory financial statement, in
each case for its Financial Year ended 31 December 2010.
 NAIC
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Participating Member State
 Party
 PBGC
 Permitted Disposal Intra-Group transactions
 (a)
    
    of cash made by any member of the Group in the ordinary course of trading
of the disposing entity;(b)
    
    of Cash Equivalent Investments for cash or in exchange for other Cash
Equivalent Investments; and(c)
    
    arising as a result of any Permitted Security.
 Permitted Distribution
 (a)
    
    a Target Distribution;(b)
    
    the payment of a dividend, the making of a loan or the movement of cash
by way of a share buyback by the Borrower, in each case, declared as a result of the
receipt of a Target Distribution into the Holding Account provided the following
conditions are satisfied:
 (i)
    
    the Borrowers obligations under Clause 8.2
(Disposal, Insurance, Acquisition Proceeds and Target Distributions)
have been complied with in full;(ii)
    
    no Default is continuing at the time such
dividend is to be paid or would occur if such dividend is paid;(iii)
    
    at the time the relevant dividend is to be paid
no circumstances exist such that (in the opinion of the Agent) on the
publication of any accounts by reference to which Net Surplus Cover in
Clause 21.2 (Financial condition) is calculated, there would be a breach
of that financial covenant on its next following test date if the
dividend was paid;(iv)
    
    the Borrower has given the Agent not less than 5
Business Days written notice of the Borrowers intention to pay the
proposed dividend and has at the same time delivered to the Agent a
certificate signed by a director of the Borrower certifying that (1) he
is not aware of any Default which is continuing or of any Default which
is likely to occur on or prior to the anticipated date of payment and
(2) containing calculations to show that the Net Surplus Cover financial
covenant in Clause 21.2 (Financial condition) will be complied with
following the payment of the proposed dividend on the next following
test date; and(v)
    
    the Agent shall not have (1) objected to the
payment of such dividend before the expiry of the 5 Business Day notice
period referred to in paragraph (iv) above because any of the conditions
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for payment under this paragraph (b) has not been met or (2) requested
reasonable further information to establish whether the conditions
established by this definition are met. If the Agent objects, it shall
state which conditions of this paragraph (b) it does not consider to
have been satisfied, in which case the Borrower shall not pay the
proposed dividend unless (in the case of a breach of the Net Surplus
Cover financial covenant) it obtains a certificate from the Auditors
confirming to the Agent that in their opinion the financial conditions
necessary to allow the payment of the relevant dividend have been
satisfied, or in the case of any other Default the Agent becomes
satisfied that the conditions for payment under this paragraph (b) have
been met; and
 (c)
    
    the payment of a dividend to the Target or its wholly-owned Subsidiaries,
  Permitted Financial Indebtedness
 (a)
    
    a Permitted Loan;(b)
    
    a Permitted Guarantee;(c)
    
    any Finance Document; or(d)
    
    any letters of credit secured on the assets of the Target Group that
match liabilities held on the balance sheet of the Target Group in favour of the
cedant (who is also the beneficiary of such letter of credit).
 Permitted Guarantee
 (a)
    
    any guarantee of Permitted Financial Indebtedness which is referred to in
the definition of, or otherwise constitutes, Permitted Financial Indebtedness
provided that Clause 22.27 (Intra-Group transactions) is complied with; or(b)
    
    any guarantee given in respect of the netting or set-off arrangements
permitted pursuant to paragraph (a) of the definition of Permitted Security,
  Permitted Loan
 (a)
    
    Financial Indebtedness which is referred to in the definition of, or
otherwise constitutes, Permitted Financial Indebtedness provided Clause 22.27
(Intra-Group transactions) is complied with; or(b)
    
    any loan permitted by Clause 22.27 (Intra-Group transactions); or(c)
    
    any loan invested pursuant to Clause 21.4 (Equity cure- Regulatory Cover)
or Clause 21.5 (Equity cure- Net Surplus Cover).
 Permitted Payment
 (a)
    
    in 2011, US$20,441,000;
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(b)
    
    in 2012, US$12,559,000;(c)
    
    in 2013, US$10,106,000;(d)
    
    in 2014, US$8,880,000;(e)
    
    in 2015, US$7,820,000,
  Permitted Security
 (a)
    
    any netting or set-off arrangement entered into by any member of the
Group in the ordinary course of its banking arrangements for the purpose of netting
debit and credit balances of members of the Group but only so long as (1) such
arrangement does not permit credit balances of Obligors to be netted or set-off
against debit balances of members of the Group which are not Obligors and (2) such
arrangement does not give rise to other Security over the assets of Obligors in
support of liabilities of members of the Group which are not Obligors;(b)
    
    any Quasi Security arising as a result of a disposal which is a Permitted
Disposal;(c)
    
    any Transaction Security;(d)
    
    any lien arising by operation of law and in the ordinary course of
trading and not as a result of any default or omission by any member of the Group;(e)
    
    any Security or Quasi-Security over or affecting any asset acquired by a
member of the Group after the date of this Agreement if:
 (i)
    
    the Security or Quasi-Security was not created in
contemplation of the acquisition of that asset by a member of the Group;(ii)
    
    the principal amount secured has not been
increased in contemplation of or since the acquisition of that asset by
a member of the Group; and(iii)
    
    the Security or Quasi-Security is removed or
discharged within 3 months of the date of acquisition of such asset;
 (f)
    
    any Security or Quasi-Security over or affecting any asset of any company
which becomes a member of the Group after the date of this Agreement, where the
Security or Quasi-Security is created prior to the date on which that company
becomes a member of the Group if:
 (i)
    
    the Security or Quasi-Security was not created in
contemplation of the acquisition of that company;(ii)
    
    the principal amount secured has not increased in
contemplation of or since the acquisition of that company; and(iii)
    
    the Security or QuasiSecurity is removed or
discharged within 3 months of that company being a member of the Group;
and
 (g)
    
    any Security or Quasi-Security arising under any retention of title, hire
purchase or conditional sale arrangement or arrangements having similar effect in
respect of goods supplied to a member of the Group in the ordinary
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course of trading and on the suppliers standard or usual terms and not arising as
a result of any default or omission by any member of the Group.
 Permitted Share Issue
 (a)
    
    by a member of the Group (other than the Borrower) which is a Subsidiary
to its immediate Holding Company to the extent permitted by Clause 22.27
(Intra-Group Transactions) and where (if the existing shares of the Subsidiary are
the subject of the Transaction Security) the newly-issued shares also become subject
to the Transaction Security on the same terms provided that no such issue of shares
will be permitted at any time after the occurrence of a Default which is continuing;
or(b)
    
    by the Borrower to the Shareholder where the proceeds of such share issue
are applied to remedy a breach of the Regulatory Cover or the Net Surplus Cover
financial covenant in Clause 21.2 (Financial condition) pursuant to Clause 21.4
(Equity cure- Regulatory Cover) or Clause 21.5 (Equity cure- Net Surplus Cover).
 Permitted Transaction
 (a)
    
    any disposal required, Financial Indebtedness incurred, guarantee,
indemnity or Security or Quasi-Security given, or other transaction arising, under
the Finance Documents; or(b)
    
    transactions (other than (i) any sale, lease, licence, transfer or other
disposal; and (ii) the granting or creation of Security, the incurring or permitting
to subsist of Financial Indebtedness or the disposal of the shares of any member of
the Group), conducted in the ordinary course of trading on arms length terms,
  Quarter Date Financial definitions
 Quarterly Financial Statement Information Undertakings
 Quasi-Security Negative pledge
 Quotation Day
 Rating Agency
 Receiver
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Reference Banks
 Regulated Insurance Entity
 (a)
    
    operates in the insurance industry; and(b)
    
    is regulated by the relevant supervisory or regulatory body in the
insurance market(s) in which it operates.
 Regulations T, U and X
 Regulatory Cover Financial definitions
 Related Fund first fund
 Relevant Jurisdiction
 (a)
    
    its jurisdiction of incorporation;(b)
    
    any jurisdiction where any asset subject to or intended to be subject to
the Transaction Security to be created by it is situated;(c)
    
    any jurisdiction where it conducts its business; and(d)
    
    the jurisdiction whose laws govern the perfection of any of the
Transaction Security Documents entered into by it.
 Relevant Period Financial
definitions
 Repeating Representations Status Governing law and enforcement No default No misleading information Original
Financial Statements Ranking Legal and beneficial
ownership Pensions
 Report
 SAP
 Screen Rate
 SEC
 16




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##### 



Secured Parties
 Security
 Security Agent
 Selection Notice Requests Interest periods
 Shareholder
 Specified Time Timetables
 Sterling £
 Subordination Deed
 Subsidiary
 (a)
    
    has direct or indirect Control; or(b)
    
    owns directly or indirectly more than fifty per cent. (50%) of the share
capital or similar right of ownership; or(c)
    
    is entitled to receive more than fifty per cent. (50%) of the dividends
or distributions,
  Syndication Date
 Target
 Target Distribution
 (a)
    
    the payment of a dividend, the making of a loan or the movement of cash
by way of a share buyback by a member of the Target Group to the Target; and/or(b)
    
    the payment (or subsequent payment) of a dividend, the making of a loan
or the movement of cash by way of a share buyback by the Target to the Borrower,
  Target Group
 17




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##### 



Target Shares
 Tax
 Termination Date
 Total Commitments
 Transaction Documents
 Transaction Security
 Transaction Security Documents Conditions Precedent Conditions Precedent
 Transfer Certificate Form of Transfer Certificate
 Transfer Date
 (a)
    
    the proposed Transfer Date specified in the relevant Assignment Agreement
or Transfer Certificate; and(b)
    
    the date on which the Agent executes the relevant Assignment Agreement or
Transfer Certificate.
 Treasury Transactions
 UK
 Unfunded Pension Liability
 Unpaid Sum
 US and United States
 US Dollars US$
 US Tax
 18




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##### 



Utilisation Date
 Utilisation Request Requests
 VAT
 Vendor
 Voting Stock
 1.2
    
    Construction1.2.1
    
    Unless a contrary indication appears, a reference in this Agreement to:
 (a)
    
    the Agent, any Arranger, any Finance Party, any Lender, any Obligor, any
Party, any Secured Party, the Security Agentor any other person shall be construed
so as to include its successors in title, permitted assigns and permitted
transferees and, in the case of the Security Agent, any person for the time being
appointed as Security Agent or Security Agents in accordance with this Agreement;(b)
    
    a document in agreed formis a document which is previously agreed in
writing by or on behalf of the Borrower and the Agent or, if not so agreed, is in
the form specified by the Agent;(c)
    
    assetsincludes present and future properties, revenues and rights of
every description;(d)
    
    a Finance Documentor a Transaction Documentor any other agreement or
instrument is a reference to that Finance Document or Transaction Document or other
agreement or instrument as amended, novated, supplemented, extended or restated (in
any case, however fundamentally);(e)
    
    guaranteemeans any guarantee, letter of credit, bond, indemnity or
similar assurance against loss, or any obligation, direct or indirect, actual or
contingent, to purchase or assume any indebtedness of any person or to make an
investment in or loan to any person or to purchase assets of any person where, in
each case, such obligation is assumed in order to maintain or assist the ability of
such person to meet its indebtedness;(f)
    
    wholly owned subsidiarymeans a company or corporation that has no
members except for:
 (i)
    
    another company or corporation and that other
companys or corporations wholly-owned subsidiaries; or(ii)
    
    persons acting on behalf of that other company or
corporation and that other companys or corporations wholly-owned
subsidiaries.
 19




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##### 



(g)
    
    includingand in particularshall not be construed restrictively but
shall mean including without prejudice to the generality of the foregoingand in
particular, but without limitation;(h)
    
    indebtednessincludes any obligation (whether incurred as principal or as
surety) for the payment or repayment of money, whether present or future, actual or
contingent;(i)
    
    a personincludes any individual, firm, company, corporation, government,
state or agency of a state or any association, joint venture, trust or partnership
(whether or not having separate legal personality) of two or more of the foregoing;(j)
    
    a regulationincludes any regulation, rule, official directive, request,
or guideline (whether or not having the force of law) of any governmental,
intergovernmental or supranational body, agency, department or regulatory,
self-regulatory or other authority or organisation;(k)
    
    a provision of law is a reference to that provision as amended or
re-enacted and any subordinate legislation made under it; and(l)
    
    a time of day is a reference to London time.
 1.3
    
    Section, Clause and Schedule headings are for ease of reference only.1.4
    
    Unless a contrary indication appears, a term used in any other Finance Document or in any
notice given under or in connection with any Finance Document has the same meaning in that
Finance Document or notice as in this Agreement.1.5
    
    A Default (other than an Event of Default) is continuingif it has not been remedied or
waived and an Event of Default is continuingif it has not been waived.1.6
    
    Any consent, waiver or approval required from a Finance Party under a Finance Document must
be in writing and will be of no effect if not in writing.1.7
    
    Reference to a monetary sum specified in Sterling in Clause 19 (Representations), Clause 20
(Information Undertakings), Clause 21 (Financial Covenants), Clause 22 (General Undertakings)
and/or Clause 23 (Events of Default) shall be deemed to include reference to the Base Currency
Equivalent of such sum.1.8
    
    Third Party Rights1.8.1
    
    Unless expressly provided to the contrary in a Finance Document a person who is not a Party
has no right under the Contracts (Rights of Third Parties) Act 1999 (Third Parties Act) to
enforce or enjoy the benefit of any term of this Agreement.1.8.2
    
    Notwithstanding any term of any Finance Document, the consent of any person who is not a
Party is not required to rescind or vary this Agreement at any time.2
    
    The Facility2.1
    
    The FacilityThe Lenders make available to the Borrower a term loan facility in an aggregate amount
equal to the Total Commitments.2.2
    
    Finance Parties rights and obligations2.2.1
    
    The obligations of each Finance Party under the Finance Documents are several. Failure by a
Finance Party to perform its obligations under the Finance Documents
 20




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##### 



does not affect the obligations of any other Party under the Finance Documents. No
Finance Party is responsible for the obligations of any other Finance Party under the
Finance Documents.
 2.2.2
    
    The rights of each Finance Party under or in connection with the Finance Documents are
separate and independent rights and any debt arising under the Finance Documents to a Finance
Party from an Obligor shall be a separate and independent debt.2.2.3
    
    A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce
its rights under the Finance Documents.2.3
    
    Obligors Agent2.3.1
    
    Each Obligor (other than the Borrower) by its execution of this Agreement or an Accession
Letter irrevocably appoints the Borrower to act on its behalf as its agent in relation to the
Finance Documents and irrevocably authorises:
 (a)
    
    the Borrower on its behalf to supply all information concerning itself
contemplated by the Finance Documents to the Finance Parties and to give all notices
and instructions, to execute on its behalf any Accession Letter, to make such
agreements and to effect the relevant amendments, supplements and variations capable
of being given, made or effected by any Obligor notwithstanding that they may affect
the Obligor, without further reference to or the consent of that Obligor; and(b)
    
    each Finance Party to give any notice, demand or other communication to
that Obligor pursuant to the Finance Documents to the Borrower,
  2.3.2
    
    Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement,
variation, notice or other communication given or made by the Obligors Agent or given to the
Obligors Agent under any Finance Document on behalf of another Obligor or in connection with
any Finance Document (whether or not known to any other Obligor and whether occurring before
or after such other Obligor became an Obligor under any Finance Document) shall be binding for
all purposes on that Obligor as if that Obligor had expressly made, given or concurred with
it. In the event of any conflict between any notices or other communications of the Obligors
Agent and any other Obligor, those of the Obligors Agent shall prevail.3
    
    Purpose3.1
    
    PurposeThe Borrower shall apply all amounts borrowed by it under the Facility towards:3.1.1
    
    paying to the Vendor an amount from the Facility not exceeding US$106,500,000 to purchase
the Target Shares under the Acquisition Agreement provided that such amount equates to no more
than 50% of the purchase price of the Target Shares (excluding fees and other expenses) as at
the First Utilisation Date; and3.1.2
    
    paying the arrangement fee payable pursuant to Clause 13.2 (Arrangement fee).
 21




---



##### 



3.2
    
    MonitoringNo Finance Party is bound to monitor or verify the application of any amount borrowed
pursuant to this Agreement.4
    
    Conditions of Loans4.1
    
    Initial conditions precedentThe Lenders will only be obliged to comply with Clause 5.4 (Lenders participation) in
relation to any Loan if, on or before the Utilisation Date for that Loan, the Agent has
received all of the documents and other evidence listed in Part 1 of Schedule 2
(Conditions Precedent) in form and substance satisfactory to the Agent. The Agent shall
notify the Obligors Agent and the Lenders in writing promptly upon being so satisfied.4.2
    
    Further conditions precedentSubject to Clause 4.1 (Initial conditions precedent), the Lenders will only be obliged to
comply with Clause 5.4 (Lenders participation) if on the date of the Utilisation Request
and on the proposed Utilisation Date:
 (a)
    
    in relation to any Loan on the First Utilisation Date, all the
representations and warranties in Clause 19 (Representations) (other than Clause
19.12 (No misleading information) which are made on the date of this Agreement only)
or, in relation to any other Loan, the Repeating Representations to be made by each
Obligor are true; and(b)
    
    none of the events described in Clause 12.2 (Market disruption) has
occurred which has resulted in any Lender being unable to fund its participation in
the proposed Loan.
 4.3
    
    Maximum number of Loans4.3.1
    
    The Borrower may not deliver a Utilisation Request if as a result of the proposed Loan more
than two Loans would be outstanding.4.3.2
    
    The Borrower may not request that a Loan be divided.5
    
    Loans5.1
    
    Delivery of a Utilisation RequestThe Borrower may utilise the Facility by delivery to the Agent of a duly completed
Utilisation Request not later than the Specified Time.5.2
    
    Completion of a Utilisation Request for Loans5.2.1
    
    Each Utilisation Request for a Loan is irrevocable and will not be regarded as having been
duly completed unless:
 (a)
    
    the proposed Utilisation Date is a Business Day within the Availability
Period;(b)
    
    the currency and amount of the Loan comply with Clause 5.3 (Currency);
and(c)
    
    the proposed Interest Period complies with Clause 11 (Interest Periods).
 5.2.2
    
    Only one Loan may be requested in each Utilisation Request.
 22




---



##### 



5.3
    
    CurrencyThe currency specified in a Utilisation Request must be US Dollars.5.4
    
    Lenders participation5.4.1
    
    If the conditions set out in this Agreement have been met, each Lender shall make its
participation in each Loan available by the Utilisation Date through its Facility Office.5.4.2
    
    The amount of each Lenders participation in each Loan will be equal to the proportion borne
by its Available Commitment to the Available Facility immediately prior to making the Loan.5.5
    
    Cancellation of CommitmentThe Total Commitments which, at that time, are unutilised shall be immediately cancelled
at the end of the Availability Period.6
    
    RepaymentThe Borrower shall repay the Loan in full on the Termination Date.7
    
    Illegality, Voluntary Prepayment and Cancellation7.1
    
    IllegalityIf it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its
obligations as contemplated by this Agreement or to fund, issue or maintain its
participation in any Loan:
 (a)
    
    that Lender, shall promptly notify the Agent upon becoming aware of that
event;(b)
    
    upon the Agent notifying the Obligors Agent, the Commitment of that
Lender will be immediately cancelled; and(c)
    
    the Borrower shall repay that Lenders participation in the Loans made to
the Borrower on the last day of the Interest Period for each Loan occurring after
the Agent has notified the Obligors Agent or, if earlier, the date specified by the
Lender in the notice delivered to the Agent (being no earlier than the last day of
any applicable grace period permitted by law).
 7.2
    
    Voluntary cancellationSubject to Clause 7.3 (Voluntary prepayment of Loans) the Borrower may, if it gives the
Agent not less than seven Business Days (or such shorter period as the Majority Lenders
may agree) prior notice, cancel the whole or any part (being a minimum amount of
US$5,000,000) of the Available Facility.7.3
    
    Voluntary prepayment of Loans7.3.1
    
    The Borrower may, if it gives the Agent not less than seven Business Days (or such shorter
period as the Majority Lenders may agree) prior notice, prepay the whole or any part of a Loan
as specified in the relevant notice (but, if in part, being an amount that reduces the amount
of the Loan by a minimum amount of US$5,000,000 or its equivalent).7.3.2
    
    A Loan may only be prepaid after the last day of the Availability Period (or, if earlier,
the day on which the applicable Available Facility is zero).
 23




---



##### 



7.4
    
    Right of cancellation and repayment in relation to a single Lender7.4.1
    
    If:
 (a)
    
    any sum payable to any Lender by an Obligor is required to be increased
under Clause 14.2 (Tax gross-up); or(b)
    
    any Lender claims indemnification from the Obligors Agent or an Obligor
under Clause 14.3 (Tax indemnity) or Clause 15.1 (Increased costs),
 the Obligors Agent may, whilst the circumstance giving rise to the requirement or
indemnification continues, give the Agent notice of cancellation of the Commitment of
that Lender and its intention to procure the repayment of that Lenders participation in
the Loans.7.4.2
    
    On receipt of a notice referred to in Clause 7.4.1 above in relation to a Lender, the
Commitment of that Lender shall immediately be reduced to zero.7.4.3
    
    On the last day of each Interest Period which ends after the Obligors Agent has given
notice under Clause 7.4.1 above in relation to a Lender (or, if earlier, the date specified by
the Obligors Agent in that notice), the Borrower shall repay that Lenders participation in
that Loan together with all interest and other amounts accrued under the Finance Documents.8
    
    Mandatory Prepayment8.1
    
    Exit8.1.1
    
    For the purpose of this Clause 8.1:Flotation: means
 (a)
    
    a successful application being made for the admission of any part of the
share capital of any member of the Group (or Holding Company of any member of the
Group other than Enstar) to the Official List of the UK Listing Authority or any
equivalent in another country and the admission of any part of the share capital of
any member of the Group (or Holding Company of any member of the Group other than
Enstar or any of its Holding Companies) to trading on the London Stock Exchange plc
or any equivalent in another country; or(b)
    
    the grant of permission to deal in any part of the issued share capital
of any member of the Group (or Holding Company of any member of the Group other than
Enstar or any of its Holding Companies) on the Alternative Investment Market or the
European Acquisition of Securities Dealers Automated Quotation System or on any
recognised investment exchange (as that term is used in the Financial Services and
Markets Act 2000) or in or on any exchange or market replacing the same or any other
exchange or market in any country.
 8.1.2
    
    Upon the occurrence of:
 (a)
    
    any Flotation;(b)
    
    a Change of Control; or(c)
    
    the total of all outstanding Loans falling below US$5,000,000 after the
First Utilisation Date,
 24




---



##### 



the Facility will be cancelled and all outstanding Loans, together with accrued interest,
and all other amounts accrued under the Finance Documents, shall become immediately due
and payable.8.2
    
    Disposal, Insurance, Acquisition Proceeds and Target Distributions8.2.1
    
    For the purposes of Clauses 8.3 (Application of mandatory prepayments) and Clause 8.4
(Mandatory Prepayment Accounts and Holding Accounts):Acquisition Proceeds: means the proceeds of a claim against, or recovery or refund from
(Recovery Claim) the Vendor or any of its Affiliates (or any employee, officer or
adviser) in relation to the Acquisition Documents or against the provider of any Report
(in its capacity as a provider of that Report) except for Excluded Acquisition Proceeds,
and after deducting:
 (a)
    
    any reasonable expenses which are incurred by any member of the Group to
persons who are not members of the Group; and(b)
    
    any Tax incurred and required to be paid by a member of the Group (as
reasonably determined by the relevant member of the Group on the basis of existing
rates and taking into account any available credit, deduction or allowance),
  Disposal
 Disposal Proceeds
 (a)
    
    any reasonable expenses which are incurred by any member of the Group
with respect to that Disposal to persons who are not members of the Group; and(b)
    
    any Tax incurred and required to be paid by the seller in connection with
that Disposal (as reasonably determined by the seller, on the basis of existing
rates and taking account of any available credit, deduction or allowance).
 Excluded Acquisition Proceeds
 (a)
    
    in payment of amounts payable to the Vendor pursuant to the Acquisition
Agreement by way of adjustment to the purchase price in respect of the Acquisition
(except to the extent relating to a working capital adjustment);(b)
    
    to satisfy (or reimburse a member of the Group which has discharged) any
liability, charge or claim upon a member of the Group by a person which is not a
member of the Group; or(c)
    
    in the replacement, reinstatement and/or repair of assets of members of
the Group which have been lost, destroyed or damaged,
  25




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##### 



Excluded Disposal Proceeds Intra-Group transactions Permitted Disposal
 Excluded Insurance Proceeds
 (a)
    
    to meet a third party claim; or(b)
    
    in amelioration of the loss in respect of which the relevant insurance
claim was made,
  Insurance Proceeds
 8.2.2
    
    The Borrower shall prepay Loans in the following amounts at the times and in the order of
application contemplated by Clause 8.3 (Application of mandatory prepayments):
 (a)
    
    the amount of Acquisition Proceeds;(b)
    
    the amount of Disposal Proceeds;(c)
    
    the amount of Insurance Proceeds; and(d)
    
    the amount of all Target Distributions in the amount equal to the
percentage of Target Distribution as set out in the second column below when the Net
Surplus Cover ratio in Clause 21.2 (Financial Condition) is as specified in the
first column below (as demonstrated in writing by the Borrower to the satisfaction
of the Agent).
 Percentage of Target Distributionproceeds to be applied in prepaymentNet Surplus Cover ratio
    
    of the FacilityLess than or equal to 2.50:1
    
    
    100
    %Greater than 2.50:1 but less than or
equal to 3.00:1
    
    
    75
    %Greater than 3.00:1
    
    
    50
    %
 8.3
    
    Application of mandatory prepayments8.3.1
    
    A prepayment made under Clause 8.2 (Disposal, Insurance, Acquisition Proceeds and Target
Distributions) shall:
 (a)
    
    be applied in prepayment of Loans as contemplated in Clauses 8.3.1(b) to
8.3.3 inclusive below; and
 26




---



##### 



(b)
    
    unless the Obligors Agent makes an election under Clause 8.3.2 below, be
applied in prepayment of the Loans within 5 Business Days of receipt of such
proceeds or Target Distribution.
 8.3.2
    
    Subject to Clause 8.3.3 below, the Obligors Agent may elect that any prepayment under
Clause 8.2 (Disposal, Insurance, Acquisition Proceeds and Target Distributions) be applied in
prepayment of a Loan on the last day of the Interest Period relating to that Loan. If the
Obligors Agent makes that election then a proportion of the Loan equal to the amount of the
relevant prepayment will be due and payable on the last day of its Interest Period.8.3.3
    
    If the Obligors Agent has made an election under Clause 8.3.2 above but a Default has
occurred and is continuing, that election shall no longer apply and a proportion of the Loan
in respect of which the election was made equal to the amount of the relevant prepayment shall
be immediately due and payable (unless the Majority Lenders otherwise agree in writing).8.3.4
    
    If the Borrower is not required to apply 100% of a Target Distribution in prepayment of the
Facility under Clause 8.2.2 above then it may still apply up to 100% of such Target
Distribution in prepayment of the Facility, and shall not be liable to pay a prepayment fee
under Clause 9.3 (Prepayment Fee) in respect of such prepayment.8.4
    
    Mandatory Prepayment Accounts and Holding Accounts8.4.1
    
    The Obligors Agent shall ensure that:
 (a)
    
    Disposal Proceeds, Insurance Proceeds, Acquisition Proceeds and any
Target Distribution in respect of which the Obligors Agent has made an election
under Clause 8.3 (Application of mandatory prepayments) are paid into a Mandatory
Prepayment Account as soon as reasonably practicable after receipt by a member of
the Group; and(b)
    
    Excluded Disposal Proceeds to be applied in replacement of assets,
Excluded Insurance Proceeds and Excluded Acquisition Proceeds are paid into a
Holding Account as soon as reasonably practicable after receipt by a member of the
Group.
 8.4.2
    
    The Borrower irrevocably authorises the Agent to apply:
 (a)
    
    amounts credited to the Mandatory Prepayment Account; and(b)
    
    amounts credited to the Holding Account which have not been duly applied
as contemplated within 180 days of receipt of the relevant proceeds (or such longer
time period as the Majority Lenders may agree),
 Application of mandatory prepayments
 27




---



##### 



8.4.3
    
    A Lender, Security Agent or Agent with which a Mandatory Prepayment Account or Holding
Account is held acknowledges and agrees that (1) interest shall accrue at normal commercial
rates offered by such Lender, Security Agent or Agent in Europe on amounts credited to those
accounts and that the account holder shall be entitled to receive such interest (which shall
be paid in accordance with the mandate relating to such account) unless a Default is
continuing, and (2) each such account is subject to the Transaction Security.8.4.4
    
    If the Borrower is not required to apply 100% of a Target Distribution in prepayment of the
Facility under Clause 8.2.2 (Disposal, Insurance, Acquisition Proceeds and Target
Distributions) and does not apply the money towards prepayment in accordance with Clause 8.3.4
(Application of mandatory prepayments) then the Borrower may withdraw such money from the
Holding Account unless a Default has occurred and apply such monies at its discretion.8.5
    
    Excluded proceedsWhere Excluded Acquisition Proceeds, Excluded Disposal Proceeds and Excluded Insurance
Proceeds include amounts which are intended to be used for a specific purpose within a
specified period (as set out in the relevant definition of Excluded Acquisition Proceeds,
Excluded Disposal Proceeds or Excluded Insurance Proceeds), the Obligors Agent shall
ensure that those amounts are used for that purpose and shall promptly deliver a
certificate to the Agent at the time of such application and at the end of such period
confirming the amount (if any) which has been so applied within the requisite time
periods provided for in the relevant definition.9
    
    Restrictions9.1
    
    Notices of Cancellation or PrepaymentAny notice of cancellation, prepayment, authorisation or other election given by any
Party under Clause 7 (Illegality, Voluntary Prepayment and Cancellation), Clause 8.3
(Application of mandatory prepayments) or Clause 8.4 (Mandatory Prepayment Accounts and
Holding Accounts) (subject to the terms of those Clauses) shall be irrevocable and,
unless a contrary indication appears in this Agreement, any such notice shall specify the
date or dates upon which the relevant cancellation or prepayment is to be made and the
amount of that cancellation or prepayment.9.2
    
    Interest and other amountsAny prepayment under this Agreement shall be made together with accrued interest on the
amount prepaid and, subject to any prepayment fee payable under Clause 9.3 (Prepayment
Fee) and any Break Costs, without premium or penalty.9.3
    
    Prepayment FeeIn the event that all of the Loans are prepaid as a result of a refinancing with a third
party funder or sale of the Target on or before the first anniversary of the First
Utilisation Date (other than under Clause 7.1 (Illegality), Clause 7.4 (Right of
repayment and cancellation in relation to a single Lender), Clause 8.2 (Disposal,
Insurance, Acquisition Proceeds and Target Distributions) or Clause 23 (Events of
Default)), the Borrower shall pay to the Agent for the account of the Lenders a fee
computed at the rate of one per cent. (1%) of the amount prepaid. Any such fee will be
paid on the same date as the prepayment which causes the fee to be payable.
 28




---



##### 



9.4
    
    No Reborrowing of FacilityThe Borrower may not reborrow any part of the Facility which is repaid or prepaid.9.5
    
    Prepayment in accordance with AgreementNo Borrower shall repay or prepay all or any part of the Loans or cancel all or any part
of the Commitments except at the times and in the manner expressly provided for in this
Agreement.9.6
    
    No reinstatement of CommitmentsNo amount of the Total Commitments cancelled under this Agreement may be subsequently
reinstated.9.7
    
    Agents receipt of NoticesIf the Agent receives a notice under Clause 7 (Illegality, Voluntary Prepayment and
Cancellation) or an election under Clause 8.3 (Application of mandatory prepayments), it
shall promptly forward a copy of that notice or election to either the Obligors Agent or
the affected Lender, as appropriate.10
    
    Interest10.1
    
    Calculation of InterestThe rate of interest on each Loan for each Interest Period is the percentage rate per
annum which is the aggregate of the applicable:
 (a)
    
    Margin;(b)
    
    LIBOR; and(c)
    
    Mandatory Cost, if any,
 (together the Interest).10.2
    
    Payment of InterestThe Borrower shall pay accrued interest on each Loan on the last day of each Interest
Period (and, if the Interest Period is longer than six Months, on the dates falling at
six Monthly intervals after the first day of the Interest Period).10.3
    
    Default interest10.3.1
    
    If an Obligor fails to pay any amount payable by it under a Finance Document on its due
date, interest shall accrue on the Unpaid Sum from the due date up to the date of actual
payment (both before and after judgment) at a rate which, subject to Clause 10.3.2 below, is 1
per cent higher than the rate which would have been payable if the Unpaid Sum had, during the
period of non-payment, constituted a Loan in the currency of the Unpaid Sum for successive
Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest
accruing under this Clause 10.3 shall be immediately payable by the Obligor on demand by the
Agent.10.3.2
    
    If any overdue amount consists of all or part of a Loan which became due on a day which was
not the last day of an Interest Period relating to that Loan:
 (a)
    
    the first Interest Period for that overdue amount shall have a duration
equal to the unexpired portion of the current Interest Period relating to that Loan;
and
 29




---



##### 



(b)
    
    the rate of interest applying to the overdue amount during that first
Interest Period shall be 1 per cent higher than the rate which would have applied if
the overdue amount had not become due.
 10.3.3
    
    Default interest (if unpaid) arising on an overdue amount will be compounded with the
overdue amount at the end of each Interest Period applicable to that overdue amount but will
remain immediately due and payable.10.4
    
    Notification of rates of interestThe Agent shall promptly notify the Lenders and the Borrower of the determination of a
rate of interest under this Agreement.11
    
    Interest Periods11.1
    
    Selection of Interest Periods and Terms11.1.1
    
    The Borrower may select an Interest Period for a Loan in the Utilisation Request for that
Loan or (if the Loan has already been borrowed) in a Selection Notice.11.1.2
    
    Each Selection Notice for a Loan is irrevocable and must be delivered to the Agent by the
Borrower not later than the Specified Time.11.1.3
    
    If the Borrower fails to deliver a Selection Notice to the Agent in accordance with Clause
11.1.2 above, the relevant Interest Period will be three Months.11.1.4
    
    Subject to this Clause 11, the Borrower may select an Interest Period of two, three or six
Months or any other period agreed between the Borrower and the Agent (acting on the
instructions of all the Lenders).11.1.5
    
    An Interest Period for a Loan shall not extend beyond the Termination Date.11.1.6
    
    Each Interest Period for a Loan shall start on the Utilisation Date or (if already made) on
the last day of its preceding Interest Period.11.2
    
    Non-Business DaysIf an Interest Period would otherwise end on a day which is not a Business Day, that
Interest Period will instead end on the next Business Day in that calendar month (if
there is one) or the preceding Business Day (if there is not).12
    
    Changes To The Calculation Of Interest12.1
    
    Absence of quotationsSubject to Clause 12.2 (Market disruption), if LIBOR is to be determined by reference to
the Reference Banks but a Reference Bank does not supply a quotation by the Specified
Time on the Quotation Day, the applicable LIBOR shall be determined on the basis of the
quotations of the remaining Reference Banks.12.2
    
    Market disruption12.2.1
    
    If a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the
rate of interest on each Lenders share of that Loan for the Interest Period shall be the
percentage rate per annum which is the sum of:
 (a)
    
    the applicable Margin;(b)
    
    the rate notified to the Agent by that Lender as soon as practicable and
in any event before interest is due to be paid in respect of that Interest Period,
 30




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to be that which expresses as a percentage rate per annum the cost to that Lender
of funding its participation in that Loan from whatever source it may reasonably
select; and
 (c)
    
    the Mandatory Cost, if any, applicable to that Lenders participation in
the Loan.
 12.2.2
    
    In this Agreement Market Disruption Eventmeans:
 (a)
    
    at or about noon on the Quotation Day for the relevant Interest Period
the Screen Rate is not available and none or only one of the Reference Banks
supplies a rate to the Agent to determine LIBOR for the relevant currency and
Interest Period; or(b)
    
    before close of business in London on the Quotation Day for the relevant
Interest Period, the Agent receives notifications from a Lender or Lenders (whose
participations in a Loan exceed 30 per cent of that Loan) that the cost to it of
obtaining matching deposits in the London Interbank market would be in excess of
LIBOR.
 12.3
    
    Alternative basis of interest or funding12.3.1
    
    If a Market Disruption Event occurs and the Agent or the Borrower so requires, the Agent and
the Obligors Agent shall enter into negotiations (for a period of not more than 30 days) with
a view to agreeing a substitute basis for determining the rate of interest.12.3.2
    
    Any alternative basis agreed pursuant to Clause 12.3.1 above shall, with the prior consent
of all the Lenders and the Obligors Agent, be binding on all Parties.12.4
    
    Break Costs12.4.1
    
    The Borrower shall, within three Business Days of demand by a Finance Party, pay to that
Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being
paid by the Borrower on a day other than the last day of an Interest Period for that Loan or
Unpaid Sum.12.4.2
    
    Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a
certificate confirming the amount of its Break Costs for any Interest Period in which they
accrue.13
    
    Fees13.1
    
    Commitment fee13.1.1
    
    The Borrower shall pay to the Agent (for the account of each Lender) a fee in the Base
Currency computed at the rate of one per cent. (1.00%) per annum on the daily undrawn and
uncancelled amount of the Facility during the Availability Period.13.1.2
    
    The accrued commitment fee is payable on the last day of each successive period of three
Months which ends during the Availability Period, on the last day of the Availability Period
and on the cancelled amount of the relevant Lenders Commitment at the time the cancellation
is effective.13.2
    
    Arrangement feeThe Borrower shall pay to National Australia Bank Limited in its capacity as an Arranger
an arrangement fee in the amount, manner and at the times agreed in a Fee Letter.
 31




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13.3
    
    Agency feeThe Borrower shall pay to the Agent (for its own account) an agency fee in the amount,
manner and at the times agreed in a Fee Letter.14
    
    Tax Gross Up And Indemnities14.1
    
    Definitions14.1.1
    
    In this Agreement:
 (a)
    
    Excluded Taxes: means, with respect to any Finance Party or other
recipient of a payment to be made by an Obligor, (a) any withholding tax imposed
pursuant to U.S. Internal Revenue Code Sections 1471-74, and (b) in the case of a
non-US Lender, any withholding tax that is imposed on amounts payable to such non-US
Lender at the time such non-US Lender becomes a party hereto (or designates a new
Facility Office), except to the extent that such non-US Lender (or its assignor, if
any) was entitled, at the time of designation of a new Facility Office (or
assignment), to receive additional amounts from an Obligor with respect to such
withholding tax pursuant to Clause 14.2 (Tax gross-up). In this regard, it is the
agreement and understanding of the parties hereto that, under current law, the
Borrower is not required to make any deduction for or on account of Tax from any
payment it may make under any Finance Document to or for the benefit of any Original
Lender, provided that such Original Lender provides a properly completed Internal
Revenue Service Form W-8BEN with respect to its qualification for the benefit of the
Australia-US tax treaty as a financial institution and, at such time as Internal
Revenue Code Sections 1471-74 become effective and would otherwise impose a
withholding tax notwithstanding the Australia-US tax treaty, complies with
applicable requirements, if any, for avoiding the imposition of withholding tax
thereunder.(b)
    
    Protected Party: means a Finance Party which is or will be subject to any
liability or required to make any payment for or on account of Tax in relation to a
sum received or receivable (or any sum deemed for the purposes of Tax to be received
or receivable) under a Finance Document.(c)
    
    Tax Credit: means a credit against, relief or remission for, refund or
repayment of, any Tax.(d)
    
    Tax Deduction: means a deduction or withholding for or on account of Tax
from a payment under a Finance Document.(e)
    
    Tax Payment: means either the increase in a payment made by an Obligor to
a Finance Party under Clause 14.2 (Tax gross-up) or a payment under Clause 14.3 (Tax
indemnity).
 14.1.2
    
    Unless a contrary indication appears, in this Clause 14 a reference to determinesor
determinedmeans a determination made in the absolute discretion of the person making the
determination.14.2
    
    Tax gross-up14.2.1
    
    Each Obligor shall make all payments to be made by it under the Finance Documents without
any Tax Deduction, other than a Tax Deduction for Excluded Taxes, unless a Tax Deduction is
required by law.
 32




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14.2.2
    
    The Borrower shall promptly upon becoming aware that an Obligor must make a Tax Deduction,
other than a Tax Deduction for Excluded Taxes, (or that there is any change in the rate or the
basis of a Tax Deduction that it must make) notify the Agent accordingly. Similarly, a Lender
shall notify the Agent on becoming so aware in respect of a payment payable to that Lender.
If the Agent receives such notification from a Lender it shall notify the Borrower and that
Obligor.14.2.3
    
    If a Tax Deduction other than a Tax Deduction for Excluded Taxes is required by law to be
made by an Obligor from any payment due from it under the Finance Documents, the amount of the
payment due from that Obligor shall be increased to an amount which (after making any Tax
Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction
had been required.14.2.4
    
    If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax
Deduction and any payment required in connection with that Tax Deduction within the time
allowed and in the minimum amount required by law.14.2.5
    
    Within 30 days of making either a Tax Deduction or any payment required in connection with
that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the
Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party
that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the
relevant taxing authority.14.3
    
    Tax indemnity14.3.1
    
    The Borrower shall (within three Business Days of demand by the Agent) pay to a Protected
Party an amount equal to the loss, liability or cost which that Protected Party determines
will be or has been (directly or indirectly) suffered for or on account of Tax by that
Protected Party in respect of a Finance Document.14.3.2
    
    Clause 14.3.1 above shall not apply:
 (a)
    
    with respect to any Finance Party or any other recipient of a payment to
be made by or on account of any obligation of an Obligor hereunder, to:
 (i)
    
    taxes imposed on or measured by its overall net
income (however denominated), and franchise taxes imposed on it, by the
jurisdiction (or any political subdivision thereof) under the laws of
which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable lending
office is located; or(ii)
    
    any branch profits taxes imposed by the United
States or any similar tax imposed by any other jurisdiction in which
that Finance Partys Facility Office is located; or
 (b)
    
    to the extent a loss, liability or cost:
 (i)
    
    is compensated for by an increased payment under
Clause 14.2 (Tax gross-up); or(ii)
    
    A Protected Party making, or intending to make a
claim under Clause 14.3.1 above, shall promptly notify the Agent of the
event which will give, or has given, rise to the claim, following which
the Agent shall notify the Borrower.
 33




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(iii)
    
    A Protected Party shall, on receiving a payment
from an Obligor under Clauses 14.3.1 to 14.3.2, notify the Agent.
 14.4
    
    Tax Credit14.4.1
    
    If an Obligor makes a Tax Payment and the relevant Finance Party determines that:
 (a)
    
    a Tax Credit is attributable either to an increased payment of which that
Tax Payment forms part or to that Tax Payment; and(b)
    
    that Finance Party has obtained, utilised and retained that Tax Credit,
the Finance Party shall pay an amount to the Obligor which that Finance Party
determines will leave it (after that payment) in the same after-Tax position as it
would have been in had the Tax Payment not been required to be made by the Obligor.
 14.5
    
    Stamp taxesThe Borrower shall pay and, within three Business Days of demand, indemnify each Secured
Party and the Arranger against any cost, loss or liability such Secured Party or such
Arranger incurs in relation to all stamp duty, registration, excise and other similar
Taxes payable in respect of any Finance Document.14.6
    
    Value added tax14.6.1
    
    All consideration expressed to be payable under a Finance Document by any Party to a Finance
Party shall be deemed to be exclusive of any VAT. Subject to Clause 14.6.2 below, if VAT is
chargeable on any supply made by any Finance Party to any Party in connection with a Finance
Document, that Party shall pay to the Finance Party (in addition to and at the same time as
paying the consideration) an amount equal to the amount of the VAT (and such Finance party
shall promptly provide an appropriate VAT invoice to such Party).14.6.2
    
    If VAT is chargeable on any supply made by any Finance Party (Supplier) to any other Finance
Party (Recipient) in connection with a Finance Document, and any Party is required by the
terms of any Finance Document to pay an amount equal to the consideration for such supply to
the Supplier, such Party shall also pay to the Supplier (in addition to and at the same time
as paying such amount) an amount equal to the amount of such VAT.14.6.3
    
    Where a Finance Document requires any Party to reimburse a Finance Party for any costs or
expenses, that Party shall also at the same time pay and indemnify the Finance Party against
all VAT incurred by the Finance Party in respect of the costs or expenses to the extent that
the Finance Party reasonably determines that it is not entitled to credit or repayment from
the relevant tax authority in respect of the VAT.14.7
    
    Survival of ObligationsWithout prejudice to the survival of any other section of this Agreement, the agreements
and obligations of each Obligor and each Finance Party contained in this Clause 14 shall
survive the payment in full by the Obligors of all principal and interest here this
Agreement until six (6) months after the expiry of the applicable statute of limitation
with respect to the relevant Taxes and obligations related to them.
 34




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14.8
    
    Tax ShelterNotwithstanding anything to the contrary, it is hereby agreed that from the commencement
of discussions with respect to transactions contemplated by this Agreement
(Transactions), any party to this Agreement (and any employee, representative or other
agent of any party to this Agreement) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the Transactions and all
materials of any kind (including opinions or other tax analyses) that are provided to it
relating to such tax treatment and tax structure.15
    
    Increased Costs15.1
    
    Increased costs15.1.1
    
    Subject to Clause 15.3 (Exceptions) the Borrower shall, within three Business Days of a
demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs
incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of
or any change in (or in the interpretation, administration or application of) any law or
regulation or (ii) compliance with any law or regulation made after the date of this
Agreement.15.1.2
    
    In this Agreement Increased Costs: means
 (a)
    
    a reduction in the rate of return from the Facility or on a Finance
Partys (or its Affiliates) overall capital;(b)
    
    an additional or increased cost; or(c)
    
    a reduction of any amount due and payable under any Finance Document,
 which is incurred or suffered by a Finance Party or any of its Affiliates to the extent
that it is attributable to that Finance Party having entered into its Commitment or
funding or performing its obligations under any Finance Document.15.2
    
    Increased cost claims15.2.1
    
    A Finance Party intending to make a claim pursuant to Clause 15.1 (Increased costs) shall
notify the Agent of the event giving rise to the claim, following which the Agent shall
promptly notify the Borrower.15.2.2
    
    Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a
certificate confirming the amount of its Increased Costs.15.3
    
    Exceptions15.3.1
    
    Clause 15.1 (Increased costs) does not apply to the extent any Increased Cost is:
 (a)
    
    attributable to a Tax Deduction required by law to be made by an Obligor;(b)
    
    compensated for by Clause 14.3 (Tax indemnity) (or would have been
compensated for under Clause 14.3 (Tax indemnity) but was not so compensated solely
because any of the exclusions in Clause 14.3 (Tax indemnity) applied);(c)
    
    compensated for by the payment of the Mandatory Cost; or(d)
    
    attributable to the wilful breach by the relevant Finance Party or its
Affiliates of any law or regulation.
 35




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15.3.2
    
    In this Clause 15 reference to a Tax Deductionhas the same meaning given to the term in
Clause 14.1 (Definitions).16
    
    Indemnities16.1
    
    Currency indemnity16.1.1
    
    If any sum due from an Obligor under the Finance Documents (Sum), or any order, judgment or
award given or made in relation to a Sum, has to be converted from the currency (First
Currency) in which that Sum is payable into another currency (Second Currency) for the purpose
of:
 (a)
    
    making or filing a claim or proof against that Obligor; or(b)
    
    obtaining or enforcing an order, judgment or award in relation to any
litigation or arbitration proceedings,(c)
    
    that Obligor shall as an independent obligation, within three Business
Days of demand, indemnify the Arranger and each other Secured Party to whom that Sum
is due against any cost, loss or liability arising out of or as a result of the
conversion including any discrepancy between (1) the rate of exchange used to
convert that Sum from the First Currency into the Second Currency and (2) the rate
or rates of exchange available to that person at the time of its receipt of that
Sum.
 16.1.2
    
    Each Obligor waives any right it may have in any jurisdiction to pay any amount under the
Finance Documents in a currency or currency unit other than that in which it is expressed to
be payable.16.2
    
    Other indemnities16.2.1
    
    The Borrower shall (or shall procure that an Obligor will), within three Business Days of
demand, indemnify the Arranger and each other Secured Party against any cost, loss or
liability incurred by it as a result of:
 (a)
    
    the occurrence or continuance of any Default;(b)
    
    a failure by an Obligor to pay any amount due under a Finance Document on
its due date, including without limitation, any cost, loss or liability arising as a
result of Clause 28 (Sharing among the Finance Parties);(c)
    
    funding, or making arrangements to fund, its participation in a Loan
requested by the Borrower in a Utilisation Request but not made by reason of the
operation of any one or more of the provisions of this Agreement (other than by
reason of default or negligence by that Finance Party alone); or(d)
    
    a Loan (or part of a Loan) not being prepaid in accordance with a notice
of prepayment given by the Borrower.
 16.2.2
    
    The Borrower shall promptly indemnify each Finance Party, each Affiliate of a Finance Party
and each officer or employee of a Finance Party or its Affiliate, against any cost, loss or
liability incurred by that Finance Party or its Affiliate (or officer or employee of that
Finance Party or Affiliate) in connection with or arising out of the Acquisition (whether or
not completed) or the funding of the Acquisition (including but not limited to those incurred
in connection with any litigation, arbitration or administrative proceedings or regulatory
enquiry concerning the Acquisition), unless such loss or liability is caused by the gross
negligence or wilful misconduct of that Finance Party or its Affiliate (or employee or officer
of that Finance Party or Affiliate). Any Affiliate or any officer or employee of a Finance
 36




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Party or its Affiliate may rely on Clauses
16.2.1(c) to 16.2.1(d) subject to Clause 1.8
(Third party rights) and the provisions of the
Third Parties Act.16.3
    
    Indemnity to the AgentThe Borrower shall promptly indemnify the Agent against any cost, loss or liability
incurred by the Agent (acting reasonably) as a result of:
 (a)
    
    investigating any event which it reasonably believes is a Default; or(b)
    
    acting or relying on any notice, request or instruction which it
reasonably believes to be genuine, correct and appropriately authorised.
 16.4
    
    Indemnity to the Security Agent16.4.1
    
    Each Obligor shall promptly indemnify the Security Agent and every Receiver and Delegate
against any cost, loss or liability incurred by any of them as a result of:
 (a)
    
    the taking, holding, protection or enforcement of the Transaction
Security;(b)
    
    the exercise of any of the rights, powers, discretions and remedies
vested in the Security Agent and each Receiver and Delegate by the Finance Documents
or by law; and(c)
    
    any default by any Obligor in the performance of any of the obligations
expressed to be assumed by it in the Finance Documents.
 16.4.2
    
    The Security Agent may, in priority to any payment to the Secured Parties, indemnify itself
out of the Charged Property in respect of, and pay and retain, all sums necessary to give
effect to the indemnity in Clause 16.4.1 and shall have a lien on the Transaction Security and
the proceeds of the enforcement of the Transaction Security for all moneys payable to it.17
    
    Mitigation By The Lenders17.1
    
    Mitigation17.1.1
    
    Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to
mitigate any circumstances which arise and which would result in any amount becoming payable
under or pursuant to, or cancelled pursuant to, any of Clause 7.1 (Illegality), Clause 14 (Tax
gross-up and indemnities) or Clause 15.1 (Increased costs) or paragraph 3 of Schedule 4
(Mandatory cost formula) including (but not limited to) transferring its rights and
obligations under the Finance Documents to another Affiliate or Facility Office.17.1.2
    
    Clause 17.1 above does not in any way limit the obligations of any Obligor under the Finance
Documents.17.2
    
    Limitation of liability17.2.1
    
    The Borrower shall indemnify each Finance Party for all costs and expenses reasonably
incurred by that Finance Party as a result of steps taken by it under Clause 17.1
(Mitigation).17.2.2
    
    A Finance Party is not obliged to take any steps under Clause 17.1 (Mitigation) if, in the
opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.
 37




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18
    
    Costs And Expenses18.1
    
    Transaction expensesThe Borrower shall promptly on demand pay the Agent, the Arranger and the Security Agent
the amount of all costs and expenses (including legal fees and due diligence costs)
reasonably incurred by any of them (and, in the case of the Security Agent, by any
Receiver or Delegate) in connection with the negotiation, preparation, printing,
execution, completion, syndication and perfection of:
 (a)
    
    this Agreement and any other documents referred to in this Agreement and
the Transaction Security; and(b)
    
    any other Finance Documents executed after the date of this Agreement.
 18.2
    
    Amendment costsIf (a) an Obligor requests an amendment, waiver or consent or (b) an amendment is
required pursuant to Clause 29.12 (Change of currency), the Borrower shall, within three
Business Days of demand, reimburse each of the Agent and the Security Agent for the
amount of all costs and expenses (including legal fees) reasonably incurred by the Agent
and the Security Agent (and, in the case of the Security Agent, by any Receiver or
Delegate) in responding to, evaluating, negotiating or complying with that request or
requirement.18.3
    
    Security Agents ongoing costs18.3.1
    
    In the event of (1) a Default; (2) the Security Agent considering it necessary or expedient
or (3) the Security Agent being requested by an Obligor or the Majority Lenders to undertake
duties which the Security Agent and the Borrower agree to be of an exceptional nature and/or
outside the scope of the normal duties of the Security Agent under the Finance Documents, the
Borrower shall pay to the Security Agent any additional remuneration that may be agreed
between them.18.3.2
    
    If the Security Agent and the Borrower fail to agree upon the nature of the duties or upon
any additional remuneration, that dispute shall be determined by an investment bank (acting as
an expert and not as an arbitrator) selected by the Security Agent and approved by the
Borrower or, failing approval, nominated (on the application of the Security Agent) by the
President for the time being of the Law Society of England and Wales (the costs of the
nomination and of the investment bank being payable by the Borrower) and the determination of
any investment bank shall be final and binding upon the parties to this Agreement.18.4
    
    Enforcement and preservation costsThe Borrower shall, within three Business Days of demand, pay to the Arranger and each
other Secured Party on a full indemnity basis the amount of all costs and expenses
(including legal, valuation, accountancy and consulting fees and commission and out of
pocket expenses) and any VAT thereon incurred by it in connection with the enforcement of
or the preservation of or the release of any rights under any Finance Document or any of
the documents referred to in such documents in any jurisdiction and any proceedings
instituted by or against the Security Agent as a consequence of taking or holding the
Transaction Security or enforcing these rights.
 38




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19
    
    Representations19.1
    
    General19.1.1
    
    Each Obligor makes the representations and warranties set out in this Clause 19 to each
Finance Party in accordance with Clause 19.37 (Times when representations made).19.1.2
    
    In relation to the representations and warranties made on the date of this Agreement and any
other date on or before the Closing Date, it is assumed that Completion has occurred and the
Borrower has the full knowledge of the senior management of the Target.19.2
    
    Status19.2.1
    
    It and each of its Subsidiaries is a corporation, duly incorporated, validly existing and
(to the extent applicable) in good standing under the law of its jurisdiction of
incorporation.19.2.2
    
    It and each of its Subsidiaries has the power to own its assets and carry on its business as
it is being conducted.19.3
    
    Binding obligationsSubject to the Legal Reservations:
 (a)
    
    the obligations expressed to be assumed by it in each Transaction
Document to which it is a party are legal, valid, binding and enforceable
obligations; and(b)
    
    (without limiting the generality of paragraph (a) above), each
Transaction Security Document to which it is a party creates the security interests
which that Transaction Security Document purports to create and those security
interests are valid and effective.
 19.4
    
    Non-conflict with other obligationsThe entry into and performance by it of, and the transactions contemplated by, the
Transaction Documents and the granting of the Transaction Security do not and will not
conflict with:
 (a)
    
    any law or regulation applicable to it;(b)
    
    the constitutional documents of any member of the Group; or(c)
    
    any agreement or instrument binding upon it or any member of the Group or
any member of the Groups assets or constitute a default or termination event
(however described) under any such agreement or instrument or would result in any
liability on the part of a Finance Party to any third party or require the creation
of any security interest over any asset in favour of a third party.
 19.5
    
    Power and authority19.5.1
    
    It has the power to enter into, perform and deliver, and has taken all necessary action to
authorise its entry into, performance and delivery of, the Transaction Documents to which it
is or will be a party and the transactions contemplated by those Transaction Documents.19.5.2
    
    No limit on its powers will be exceeded as a result of the borrowing, grant of security or
giving of guarantees or indemnities contemplated by the Transaction Documents to which it is a
party.
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19.6
    
    Validity and admissibility in evidence19.6.1
    
    All Authorisations required:
 (a)
    
    to enable it lawfully to enter into, exercise its rights and comply with
its obligations in the Transaction Documents to which it is a party; and(b)
    
    to make the Transaction Documents to which it is a party admissible in
evidence in its Relevant Jurisdictions,
 have been obtained or effected and are in full force and effect except any Authorisation
referred to in Clause 19.9 (No filing or stamp taxes), which Authorisations will be
promptly obtained or effected as soon as practicable after the date of this Agreement.19.6.2
    
    All Authorisations necessary for the conduct of the business, trade and ordinary activities
of members of the Group have been obtained or effected and are in full force and effect and
are not likely to be revoked or materially adversely amended and no notice of an intention to
terminate any such Authorisation has been received by any member of the Group.19.7
    
    Governing law and enforcement19.7.1
    
    The law expressed to be the governing law in each Finance Document will be recognised and
enforced in the Relevant Jurisdictions of each Obligor executing that Finance Document.19.7.2
    
    Any judgment obtained in relation to a Finance Document in the jurisdiction of the governing
law of that Finance Document will be recognised and enforced in its Relevant Jurisdictions.19.8
    
    InsolvencyNo:
 (a)
    
    corporate action, legal proceeding or other procedure or step described
in Clause 23.7.1 (Insolvency proceedings); or(b)
    
    creditors process described in Clause 23.8 (Creditors process),
 has been taken or, to the knowledge of the Borrower, threatened in relation to a member
of the Group; and none of the circumstances described in Clause 23.6 (Insolvency) applies
to any member of the Group.19.9
    
    No filing or stamp taxesUnder the laws of its Relevant Jurisdiction it is not necessary that any Finance Document
be filed, recorded or enrolled with any court or other authority in that jurisdiction or
that any stamp, registration, notarial or similar Taxes or fees be paid on or in relation
to the Finance Documents or the transactions contemplated by the Finance Documents except
any filing, recording or enrolling or any tax or fee payable in relation to any
Transaction Security Documents which are referred to in any Legal Opinion and which will
be made or paid promptly after the date of the relevant Finance Document.
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19.10
    
    [INTENTIONALLY LEFT BLANK]19.11
    
    No default19.11.1
    
    No Event of Default and, on the date of this Agreement and the First Utilisation Date, no
Default is continuing or is reasonably likely to result from the making of any Loan or the
entry into, the performance of, or any transaction contemplated by, any Transaction Document.19.11.2
    
    No other event or circumstance is outstanding which constitutes (or, with the expiry of a
grace period, the giving of notice, the making of any determination or any combination of any
of the foregoing would constitute) a default or termination event (however described) under
any other agreement or instrument which is binding on it or any of its Subsidiaries or to
which its (or any of its Subsidiaries) assets are subject which has or is reasonably likely
to have a Material Adverse Effect.19.12
    
    No misleading information19.12.1
    
    Any factual information contained in the Information Memorandum or the Information Package
was true and accurate in all material respects as at the date of the relevant report or
document containing the information or (as the case may be) as at the date the information is
expressed to be given.19.12.2
    
    The Forecast Cash Flows has been prepared in accordance with the Accounting Principles as
applied to the Original Financial Statements and on the basis of recent historical
information, is fair and based on reasonable assumptions and has been approved by the board of
directors of the Borrower.19.12.3
    
    Any financial projection or forecast contained in the Information Memorandum or the
Information Package has been prepared on the basis of recent historical information and on the
basis of reasonable assumptions and was fair (as at the date of the relevant report or
document containing the projection or forecast) and arrived at after careful consideration.19.12.4
    
    The expressions of opinion or intention provided by or on behalf of an Obligor for the
purposes of the Information Memorandum or the Information Package were made after careful
consideration and (as at the date of the relevant report or document containing the expression
of opinion or intention) were fair and based on reasonable grounds.19.12.5
    
    Except as disclosed in the Acquisition Agreement or the Disclosure Letters, no event or
circumstance has occurred or arisen and no information has been omitted from the Information
Memorandum or the Information Package and no information has been given or withheld that
results in the information, opinions, intentions, forecasts or projections contained in the
Information Memorandum or the Information Package being untrue or misleading in any material
respect.19.12.6
    
    All material information provided to a Finance Party by or on behalf of Enstar or the
Borrower in connection with the Acquisition and/or the Target Group on or before the date of
this Agreement and not superseded before that date (whether or not contained in the
Information Package) is accurate and not misleading in any material respect and all
projections provided to any Finance Party on or before the date of this Agreement have been
prepared in good faith on the basis of assumptions which were reasonable at the time at which
they were prepared and supplied.19.12.7
    
    All other written information provided by any Obligor or any member of the Group (including
its advisers) to a Finance Party or the provider of any Report was true,
 41




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##### 



complete and accurate in all material respects as at the date it was provided and is not
misleading in any respect.
 19.12.8
    
    As at the date of this Agreement, there has been no reported insurance claim since the date
of the most recent valuation of insurance liabilities report that would or, if adversely
determined, is reasonably likely to, have a Material Adverse Effect.19.12.9
    
    As at the date of this Agreement, there are no negative marked-to-market outstandings under
any existing Treasury Transactions entered into by or on behalf of any member of the Group
that would have a Material Adverse Effect.19.13
    
    Original Financial Statements19.13.1
    
    Its Original Financial Statements were prepared in accordance with the Accounting
Principles consistently applied unless expressly disclosed to the Agent in writing to the
contrary.19.13.2
    
    Subject to the Acquisition Agreement and the Disclosure Letters, its Original Financial
Statements prior to them having been audited fairly represent its financial condition and
results of operations (consolidated in the case of Target) for the relevant period unless
expressly disclosed to the Agent in writing to the contrary prior to the date of this
Agreement.19.13.3
    
    Subject to the Acquisition Agreement and the Disclosure Letters, there has been no material
adverse change in its assets, business or financial condition (or the assets, business or
consolidated financial condition of the Group, in the case of the Borrower) since the date of
the Original Financial Statements.19.13.4
    
    The Original Financial Statements of the Target and the Borrower do not consolidate the
results, assets or liabilities of any person or business which does not form part of the
Target Group.19.13.5
    
    Its most recent financial statements delivered pursuant to Clause 20.2 (Financial
statements):
 (a)
    
    have been prepared in accordance with the Accounting Principles as
applied to the Original Financial Statements except as otherwise permitted in Clause
20.4 (Requirements as to Financial Statements); and(b)
    
    give a true and fair view of (if audited) or fairly present (if
unaudited) its consolidated financial condition as at the end of, and consolidated
results of operations for, the period to which they relate.
 19.13.6
    
    The budgets and forecasts supplied under this Agreement were arrived at after careful
consideration and have been prepared in good faith on the basis of recent historical
information and on the basis of assumptions which were reasonable as at the date they were
prepared.19.13.7
    
    Since the date of the most recent financial statements delivered pursuant to Clause 20.2
(Financial statements) there has been no material adverse change in the business, assets or
financial condition of the Group.19.14
    
    No proceedings pending or threatenedNo litigation, arbitration or administrative proceedings or investigations of, or before,
any court, arbitral body or agency which, if adversely determined, are reasonably likely
to have a Material Adverse Effect, have (to the best of its knowledge and belief (having
made due and careful enquiry)) been started or threatened against it or any of its
Subsidiaries.
 42




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##### 



19.15
    
    No breach of laws19.15.1
    
    It has not (and none of its Subsidiaries has) has breached any law or regulation which
breach has or is reasonably likely to have a Material Adverse Effect.19.15.2
    
    No labour disputes are current or, to the best of its knowledge and belief (having made due
and careful enquiry), threatened against any member of the Group which have or are reasonably
likely to have a Material Adverse Effect.19.16
    
    Taxation19.16.1
    
    It is not (and none of its Subsidiaries is) materially overdue in the filing of any Tax
returns and it is not (and none of its Subsidiaries is) overdue in the payment of any amount
in respect of Tax of $200,000 (or its equivalent in any other currency) or more.19.16.2
    
    No claims or investigations are being or are reasonably likely to be made or conducted
against it (or any of its Subsidiaries) with respect to Taxes such that a liability of, or
claim against, any member of the Group of $200,000 (or its equivalent in any other currency)
or more is reasonably likely to arise.19.16.3
    
    It is resident for Tax purposes only in the jurisdiction of its incorporation.19.17
    
    Security and Financial Indebtedness19.17.1
    
    No Security or Quasi-Security exists over all or any of the present or future assets of any
member of the Group other than as permitted by this Agreement.19.17.2
    
    No member of the Group has any Financial Indebtedness outstanding other than as permitted
by this Agreement.19.18
    
    RankingThe Transaction Security ranks or will rank prior to all other Security other than
Permitted Security.19.19
    
    Good title to assetsIt and each of its Subsidiaries has a good, valid and marketable title to, or valid
leases or licences of, and all appropriate Authorisations to use, the assets necessary to
carry on its business as presently conducted.19.20
    
    Legal and beneficial ownership19.20.1
    
    It and each of its Subsidiaries is the sole legal and beneficial owner of the respective
assets over which it purports to grant Security to the Security Agent.19.20.2
    
    On and from the Closing Date, all the Target Shares are legally and beneficially owned by
the Borrower free from any claims, third party rights or competing interests.19.21
    
    OwnershipEach of the Obligors and their Subsidiaries is a direct or indirect wholly-owned
subsidiary of Enstar.19.22
    
    SharesThe shares of any member of the Group which are subject to the Transaction Security are
fully paid and not subject to any option to purchase or similar rights.
 43




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##### 



The constitutional documents of companies whose shares are subject to the Transaction
Security do not and could not restrict or inhibit any transfer of those shares on
creation or enforcement of the Transaction Security. There are no agreements in force
which provide for the issue or allotment of, or grant any person the right to call for
the issue or allotment of, any share or loan capital of any member of the Group or member
of the Target Group (including any option or right of pre-emption or conversion). There
is no Security or other restrictions in existence that may attach to any dividends or
other distributions that may be made in respect of any shares of any member of the Group
except, in connection with a Regulated Insurance Entity, restrictions arising under
N.J.S.A §§ 17:27A-4(c) and 17:27A-9.1 and Fla. Stat. §§ 628.371 and 628.391 or similar
provisions under the Insurance Code.19.23
    
    Intellectual PropertyIt and each of its Subsidiaries:
 (a)
    
    is the sole legal and beneficial owner of or has licensed to it on normal
commercial terms all the Intellectual Property which is material in the context of
its business and which is required by it in order to carry on its business as it is
being conducted;(b)
    
    does not (nor does any of its Subsidiaries), in carrying on its
businesses, infringe any Intellectual Property of any third party in any respect
which has or is reasonably likely to have a Material Adverse Effect; and(c)
    
    has taken all formal or procedural actions (including payment of fees)
required to maintain any material Intellectual Property owned by it to the extent
that failure to do so has or is reasonably likely to have a Material Adverse Effect.
 19.24
    
    Group Structure Chart19.24.1
    
    The Group Structure Chart is true, complete and accurate in all material respects and shows
the following information:
 (a)
    
    each member of the Group, including current name and (if applicable)
company registration number, its jurisdiction of incorporation and/or establishment,
a list of shareholders and indicating whether a company is not a company with
limited liability;(b)
    
    all minority interests in any member of the Group and any person in which
any member of the Group holds shares in its issued share capital or equivalent
ownership interest of such person; and(c)
    
    all intra-Group loans of £1,000 or more.
 19.24.2
    
    All necessary intra-Group loans, transfers, share exchanges and other steps resulting in
the final Group structure are set out in the Group Structure Chart and have been or will be
taken in compliance with all relevant laws and regulations and all requirements of relevant
regulatory authorities.19.25
    
    Financial Year endThe end of the Financial Year for each member of the Group is 31 December.19.26
    
    ObligorsEach member of the Group is or will be an Obligor on the First Utilisation Date.
 44




---



##### 



19.27
    
    Acquisition Documents, Disclosures and other Documents19.27.1
    
    The Acquisition Documents contain all the terms of the Acquisition.19.27.2
    
    There is no disclosure made in the Disclosure Letters or any other disclosure to the
Acquisition Documents which has or may have a material adverse effect on any of the
information, opinions, intentions, forecasts and projections contained or referred to in the
Information Package.19.27.3
    
    To the best of its knowledge no representation or warranty (as qualified by the Disclosure
Letters) given by any party to the Acquisition Documents is untrue or misleading in any
material respect.19.27.4
    
    As at the date of delivery, the documents delivered to the Agent under any Finance Document
by or on behalf of any Obligor (including pursuant to Clause 4.1 (Initial conditions
precedent)) are genuine (or, in the case of copy documents, are true, complete and accurate
copies of originals which are genuine), are up-to-date and in full force and effect (or if a
copy, the original is up-to-date and in full force and effect) and have not been amended.19.28
    
    InsuranceThere has been no non-disclosure, misrepresentation or breach of any term of any material
insurance policy (excluding those policies or contracts of insurance or reinsurance
written or assumed in the ordinary course of business by any of the Subsidiaries of the
Borrower) which would entitle any insurer to repudiate, rescind or cancel it or to treat
it as avoided in whole or in part or otherwise decline any valid claim under it by or on
behalf of any member of the Group.19.29
    
    Immunity19.29.1
    
    The execution by it of each Finance Document constitutes, and the exercise by it of its
rights and performance of its obligations under each Finance Document will constitute private
and commercial acts performed for private and commercial purposes.19.29.2
    
    It will not be entitled to claim immunity from suit, execution, attachment or other legal
process in any proceedings taken in its Relevant Jurisdictions in relation to any Finance
Document.19.30
    
    No adverse consequences19.30.1
    
    It is not necessary under the laws of its Relevant Jurisdictions:
 (a)
    
    in order to enable any Finance Party to enforce its rights under any
Finance Document; or(b)
    
    subject to the Legal Reservations, by reason of the execution of any
Finance Document or the performance by it of its obligations under any Finance
Document,
 that any Finance Party should be licensed, qualified or otherwise entitled to carry on
business in any of its Relevant Jurisdictions.19.30.2
    
    No Finance Party is or will be deemed to be resident, domiciled or carrying on business in
its Relevant Jurisdictions by reason only of the execution, performance and/or enforcement of
any Finance Document, provided that certain enforcement actions may require a Finance Party to
qualify in applicable Relevant Jurisdictions.
 45




---



##### 



19.31
    
    Holding CompanyExcept as may arise under the Transaction Documents and for Acquisition Costs and except
as set forth on the opening balance sheet of the Borrower, before the date of this
Agreement the Borrower has not traded or incurred any liabilities or commitments (actual
or contingent, present or future).19.32
    
    Pensions19.32.1
    
    Each Employee Plan is in compliance in form and operation with ERISA and the Code and all
other applicable laws and regulations save where any failure to comply would not reasonably be
expected to have a Material Adverse Effect.19.32.2
    
    Each Employee Plan which is intended to be qualified under Section 401(a) of the Code has
been determined by the IRS to be so qualified or is in the process of being submitted to the
IRS for approval or will be so submitted during the applicable remedial amendment period, and,
nothing has occurred since the date of such determination that would adversely affect such
determination (or, in the case of an Employee Plan with no determination, nothing has occurred
that would materially adversely affect such qualification).19.32.3
    
    There exists no Unfunded Pension Liability with respect to any Employee Plan, except as
would not have a Material Adverse Effect.19.32.4
    
    Neither any member of the Group nor any ERISA Affiliate is making or accruing an obligation
to make contributions or has within any of the five calendar years immediately preceding the
date of this Agreement made or accrued an obligation to make contributions to any
Multiemployer Plan.19.32.5
    
    There are no actions, suits or claims pending against or involving an Employee Plan (other
than routine claims for benefits) or, to the knowledge of the Borrower, any member of the
Group or any ERISA Affiliate, threatened, which would reasonably be expected to be asserted
successfully against any Employee Plan and, if so asserted successfully, would reasonably be
expected either singly or in the aggregate to have a Material Adverse Effect.19.32.6
    
    Each member of the Group and any ERISA Affiliate has made all contributions to or under
each such Employee Plan required by law within the applicable time limits prescribed thereby,
the terms of such Employee Plan, or any contract or agreement requiring contributions to an
Employee Plan save where any failure to comply would not reasonably be expected to have a
Material Adverse Effect.19.32.7
    
    Neither any member of the Group nor any ERISA Affiliate has ceased operations at a facility
so as to become subject to the provisions of Section 4062(e) of ERISA, withdrawn as a
substantial employer so as to become subject to the provisions of Section 4063 of ERISA, or
ceased making contributions to any Employee Plan subject to Section 4064(a) of ERISA to which
it made contributions.19.32.8
    
    Neither any member of the Group nor any ERISA Affiliate has incurred or reasonably expects
to incur any liability to PBGC save for any liability for premiums due in the ordinary course
or other liability which would not reasonably be expected to have a Material Adverse Effect.19.32.9
    
    No ERISA Event has occurred or is reasonably expected to occur. None of the assets of the
Group or any ERISA Affiliates is subject to a lien under ERISA or Section 330 of the Code.
 46




---



##### 



19.33
    
    Net SurplusOn the First Utilisation Date, the Consolidated Net Surplus is, or will be, not less than
US$213,000,000.19.34
    
    Federal Reserve Obligations19.34.1
    
    No member of the Group is engaged nor will it engage principally, or as one of its
important activities, in the business of owning or extending credit for the purpose of buying
or carrying any Margin Stock.19.34.2
    
    None of the proceeds of the Loans or other extensions of credit under this Agreement will
be used, directly or indirectly, for the purpose of buying or carrying any Margin Stock, for
the purpose of reducing or retiring any Indebtedness that was originally incurred to buy or
carry any Margin Stock or for any other purpose which might cause all or any Loans or other
extensions of credit under this Agreement to be considered a purpose credit within the meaning
of Regulation U or Regulation X.19.34.3
    
    No member of the Group nor any agent acting on its behalf has taken or will take any action
which might cause the Finance Documents to violate any regulation of the Board of Governors of
the Federal Reserve System of the United States.19.35
    
    Investment CompaniesNo member of the Group is an investment company or an affiliated person of an investment
company as such terms are defined in the Investment Company Act of 1940 of the United
States (1940 Act) or otherwise subject to regulation under the 1940 Act or subject to
regulation under the Public Utility Holding Company Act 2005, the Federal Power Act of
1935 of the United States or the 1940 Act or any United States federal or state statute
or regulation restricting or limiting its ability to incur indebtedness excluding
insurance regulations.19.36
    
    Anti-Terrorism Laws19.36.1
    
    No member of the Group or, to the knowledge of any of the Obligors, any of their
Affiliates, is in violation of any laws relating to terrorism or money laundering
(Anti-Terrorism Laws), including Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001 (Executive Order), and the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.19.36.2
    
    No member of the Group or, to the knowledge of any of the Obligors, any of their
Affiliates, or their respective brokers or other agents acting or benefiting in any capacity
in connection with the Facility, is any of the following:
 (a)
    
    a person or entity that is listed in the annex to, or is otherwise
subject to the provisions of, the Executive Order;(b)
    
    a person or entity owned or controlled by, or acting for or on behalf of,
any person or entity that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order;(c)
    
    a person or entity with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism law;(d)
    
    a person or entity that commits, threatens or conspires to commit or
supports terrorism as defined in the Executive Order; or
 47




---



##### 



(e)
    
    a person or entity that is named as a specially designated national and
blocked person on the most current list published by the US Treasury Department
Office of Foreign Asset Control at its official website or any replacement website
or other replacement official publication of such list.
 19.36.3
    
    No member of the Group or, to the knowledge of any Obligor, any of its brokers or other
agents acting in any capacity in connection with the Facility (i) conducts any business or
engages in making or receiving any contribution of funds, goods or services to or for the
benefit of any person described in paragraph (b) above, (ii) deals in, or otherwise engages in
any transaction relating to, any property or interests in property blocked pursuant to the
Executive Order, or (iii) engages in or conspires to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law.19.37
    
    Times when representations made19.37.1
    
    All the representations and warranties in this Clause 19 are made by each Original Obligor
on the date of this Agreement except for the representations and warranties set out in (a)
Clause 19.12 (No misleading information) which are deemed to be made by each Obligor (i) with
respect to the Information Memorandum on the date the Information Memorandum is approved by
the Borrower and (ii) with respect to the Information Package, on the date of this Agreement,
on the First Utilisation Date and on any later date on which the Information Package (or part
of it) is released to an Arranger for distribution in connection with syndication and (b)
Clause 19.21 (Ownership) to the extent that it relates to ownership of any member of the
Target Group.19.37.2
    
    All the representations and warranties in this Clause 19 are deemed to be made by each
Obligor on the First Utilisation Date other than Clauses 19.12.8 to 19.12.9 (No misleading
information).19.37.3
    
    The representations and warranties in Clauses 19.12.1 to 19.12.7 (No misleading
information) are also deemed to be made by each Obligor on the Syndication Date.19.37.4
    
    The Repeating Representations are deemed to be made by each Obligor on the date of each
Utilisation Request, on each Utilisation Date and on the first day of each Interest Period
(except that those contained in Clauses 19.13.1 to 19.13.4 (Original Financial Statements)
will cease to be so made once subsequent financial statements have been delivered under this
Agreement).19.37.5
    
    All the representations and warranties in this Clause 19 except Clause 19.12 (No misleading
information), Clause 19.24 (Group Structure Chart), Clause 19.27 (Acquisition Documents,
Disclosures and other Documents) and Clause 19.31 (Holding Company) are deemed to be made by
each Additional Obligor on the day on which it becomes (or it is proposed that it becomes) an
Additional Obligor.19.37.6
    
    Each representation or warranty deemed to be made after the date of this Agreement shall be
deemed to be made by reference to the facts and circumstances existing at the date the
representation or warranty is deemed to be made.19.37.7
    
    Notwithstanding anything to the contrary contained in this Agreement and any Finance
Document, including without limitation Sections 19.4(a) (Non-conflict with other obligations),
19.5.1 (Power and Authority), 19.6.1(a) (Validity and admissibility in evidence), 19.9 (No
filing or stamp taxes), 19.30.1 (No adverse consequences) and 22.1 (Authorisations), with
respect to the performance by any
 48




---



##### 



20
    
    Information Undertakings20.1
    
    GeneralThe undertakings in this Clause 20 remain in force from the date of this Agreement for so
long as any amount is outstanding under the Finance Documents or any Commitment is in
force.In this Clause 20:
 (a)
    
    Annual Financial Statements: means the financial statements for a
Financial Year delivered pursuant to Clause 20.2 (Financial statements).(b)
    
    Quarterly Financial Statements: means the financial statements for a
Financial Quarter delivered pursuant to Clause 20.2 (Financial statements).
 20.2
    
    Financial statements20.2.1
    
    The Borrower shall deliver to the Agent in sufficient copies for all the Lenders:
 (a)
 (i)
    
    as soon as they are available, but in any event
within 150 days after the end of each of its Financial Years:(A)
    
    the audited consolidated financial statements of
the Borrower for that Financial Year: and(B)
    
    the audited statutory financial statement of each
Regulated Insurance Entity for that Financial Year; and(ii)
    
    as soon as they are available, but in any event
within 60 days after the end of the Financial Year, the unaudited
statutory annual financial statement of each Regulated Insurance Entity
for that Financial Year;
 (b)
    
    as soon as they are available, but in any event within 45 days after the
end of each Financial Quarter of each of its Financial Years (excluding the quarter
ended December 31, which shall be governed by Section 20.2.1(a) above), the
unaudited consolidated Quarterly Financial Statement of the Borrower and the
unaudited statutory Quarterly Financial Statement of each Regulated Insurance Entity
for that Financial Quarter, to include:
 (i)
    
    (in the case of the Borrower only) details of all
Disposal Proceeds as defined in Clause 8.2 (Disposal, Insurance,
Acquisition Proceeds and Target Distributions);(ii)
    
    (in the case of the Borrower only) details of all
surpluses in any fund or funds of each member of the Group which is an
insurance company;(iii)
    
    (in the case of the Borrower only) a summary of
cash realisations of each of the Target Group;(iv)
    
    (in the case of the Borrower only) details of the
proceeds of the cash realisations of each of the Target Group;
 49




---



##### 



(v)
    
    a discussion of major incurred claims movements
with appropriate narrative;
 (c)
    
    as soon as it is available but in any event within 30 days after the
start of each of its Financial Years, an updated forecast of cashflows for the Group
for that Financial Year in the same form as the Forecast Cash Flows;(d)
    
    as soon as they are available, but in any event within 45 days after the
end of each Financial Quarter of each of its Financial Years:
 (i)
    
    a written breakdown of all reinsurance and
retrocession balances of the Group at the end of that Financial Quarter
including details of the counterparty from whom such balances are owed,
an ageing of such balances, and details of any movements in any
receivables and recoveries made during such period; and(ii)
    
    details of any bad debt or other provisions held
by the Group at the end of that Financial Quarter including details of
changes made in relation to such bad debts or other provisions together
with the reasons for such provisions being made.
 (e)
    
    As soon as it is available but in any event within 30 days after the
start of each of its Financial Years an actuarial review (including a study of
actual reserves) conducted by a duly qualified actuarial company in respect of the
Target Group.
 20.3
    
    Provision and contents of Compliance Certificate20.3.1
    
    The Borrower shall supply a Compliance Certificate to the Agent with each set of its audited
consolidated Annual Financial Statements and each set of its consolidated Quarterly Financial
Statements.20.3.2
    
    The Compliance Certificate shall, amongst other things, set out (in reasonable detail)
computations as to compliance with Clause 21 (Financial Covenants) including confirmation that
the Borrower is in compliance with Clause 21.2.1(c) (Requisite Rating).20.3.3
    
    Each Compliance Certificate shall be signed by two directors one of whom must be the Chief
Financial Officer of the Group and, if required to be delivered with the consolidated Annual
Financial Statements of the Borrower, shall be reported on by the Borrowers Auditors in the
form agreed by the Borrower and the Majority Lenders.20.4
    
    Requirements as to financial statements20.4.1
    
    The Borrower shall procure that each set of Annual Financial Statements and Quarterly
Financial Statements includes a balance sheet, profit and loss account and cashflow statement
as required by SAP in the case of each Regulated Insurance Entity and GAAP in the case of the
Borrower. In addition the Borrower shall procure that:
 (a)
    
    each set of Annual Financial Statements shall be audited by the Auditors;(b)
    
    each set of Quarterly Financial Statements of the Borrower includes:
 (i)
    
    a cashflow forecast in respect of the Group
relating to the twelve month period commencing at the end of the
relevant Financial Quarter; and
 50




---



##### 



(ii)
    
    a statement by the directors of the Borrower
commenting on the performance of the Group for the quarter to which the
financial statements relate and the Financial Year to date and any
material developments or material proposals affecting the Group or its
business.
 20.4.2
    
    Each set of financial statements delivered pursuant to Clause 20.2 (Financial Statements):
 (a)
    
    shall be certified by the Chief Financial Officer of the Borrower as
giving a true and fair view of (in the case of Annual Financial Statements for any
Financial Year), or fairly representing (in other cases), the financial condition
and operations of the relevant person or persons covered by those financial
statements as at the date as at which those financial statements were drawn up and,
in the case of the Annual Financial Statements, shall be accompanied by any letter
addressed to the management of the relevant company by the Auditors and accompanying
those Annual Financial Statements;(b)
    
    in the case of consolidated financial statements of the Borrower, shall
be accompanied by a statement by the Chief Financial Officer of the Borrower
comparing actual performance for the period to which the financial statements relate
to the actual performance for the corresponding period in the preceding Financial
Year of the Group; and(c)
    
    shall be prepared using the Accounting Principles, accounting practices
and financial reference periods consistent with those applied in the preparation of
the Original Financial Statements of the Obligor or other member of the Group
concerned, unless, in relation to any set of financial statements, the Borrower
notifies the Agent that there has been a change in the Accounting Principles or the
accounting practices and its Auditors (or, if appropriate, the Auditors of the
Obligor) deliver to the Agent:
 (i)
    
    a description of any change necessary for those
financial statements to reflect the Accounting Principles or accounting
practices upon which the Original Financial Statements of the Obligor or
other member of the Group concerned were prepared; and(ii)
    
    sufficient information, in form and substance as
may be reasonably required by the Agent, to enable the Lenders to
determine whether Clause 21 (Financial Covenants) has been complied with
and to make an accurate comparison between the financial position
indicated in those financial statements and the Original Financial
Statements of the Obligor or other member of the Group concerned.
 (d)
    
    Any reference in this Agreement to any financial statements shall be
construed as a reference to those financial statements as adjusted to reflect the
basis upon which the Original Financial Statements were prepared.
 20.4.3
    
    If the Agent receives a report from the Borrowers Auditors pursuant to Clause 20.4.2(c)
above, the Majority Lenders (in consultation with the Borrower and the Auditors) may require
such changes to the covenants set out in Clause 21 (Financial Covenants) as are necessary
solely to reflect the changes notified to them.
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20.4.4
    
    If the Agent wishes to discuss the financial position of any member of the Group with the
Auditors, the Agent may notify the Borrower, stating the questions or issues which the Agent
wishes to discuss with the Auditors. In this event, the Borrower must ensure that the
Auditors are authorised (at the expense of the Borrower):
 (a)
    
    to discuss the financial position of each member of the Group with the
Agent on request from the Agent;(b)
    
    to verify any financial information required by the Finance Documents to
be provided to the Agent;(c)
    
    to disclose to the Agent for the Finance Parties any information which
the Agent may reasonably request; and(d)
    
    to verify any figures required to calculate the financial covenants in
Clause 21 (Financial covenants) or the Margin.
 20.5
    
    PresentationsOnce in every Financial Year, or more frequently if requested to do so by the Agent if a
Lender reasonably suspects a Default is continuing or may have occurred or may occur, at
least two directors of the Borrower (one of whom shall be the Chief Financial Officer of
the Borrower) must give a presentation to the Finance Parties in London about the
on-going business and financial performance of the Group.20.6
    
    Year-end20.6.1
    
    The Borrower shall procure that the end of each Financial Year of each member of the Group
falls on 31 December.20.6.2
    
    The Borrower shall procure that each quarterly accounting period and each Financial Quarter
of each member of the Group ends on a Quarter Date.20.7
    
    Information: miscellaneousThe Borrower shall supply to the Agent (in sufficient copies for all the Lenders, if the
Agent so requests):
 (a)
    
    within 30 days after submission to the relevant governmental on
regulatory authority, all returns required to be prepared by any member of the Group
in accordance with any applicable law, rule, regulation or direction of the Bermuda
Monetary Authority, the SEC or any other Governmental Authority;(b)
    
    at the same time as they are dispatched, copies of all documents
dispatched by the Borrower to its shareholders generally (or any class of them) or
dispatched by the Borrower or any Obligors to its creditors generally (or any class
of them) (excluding documents provided to persons insured under policies or
contracts of insurance or reinsurance written or assumed in the ordinary course of
business by any of the Regulated Insurance Entities);(c)
    
    promptly upon becoming aware of them, the details of any litigation,
arbitration or administrative proceedings which are current, threatened or pending
against any member of the Group (excluding those relating to policies or contracts
of insurance or reinsurance written or assumed in the ordinary course of business by
any of the Regulated Insurance Entities), and which, if adversely determined would
involve a liability, or a potential or alleged liability, exceeding £100,000 (or its
equivalent in other currencies);
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(d)
    
    promptly upon becoming aware of the relevant claim, the details of any
claim which is current, threatened or pending against the Vendor or any other person
in respect of the Acquisition Documents and details of any disposal or insurance
claim which will require a prepayment under Clause 8.2 (Disposal, Insurance,
Acquisition Proceeds and Target Distributions);(e)
    
    promptly, such information as the Security Agent may reasonably require
about the Charged Property and compliance of the Obligors with the terms of any
Transaction Security Documents; and(f)
    
    promptly on request, such further information regarding the financial
condition, assets and operations of the Group and/or any member of the Group
(including any requested amplification or explanation of any item in the financial
statements, budgets or other material provided by any Obligor under this Agreement
and an up to date copy of its shareholders register (or equivalent in its
jurisdiction of incorporation)) as any Finance Party through the Agent may
reasonably request.
 20.8
    
    Notification of default20.8.1
    
    Each Obligor shall notify the Agent of any Default (and the steps, if any, being taken to
remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a
notification has already been provided by another Obligor).20.8.2
    
    Promptly upon a request by the Agent, the Borrower shall supply to the Agent a certificate
signed by two of its directors or senior officers on its behalf certifying that no Default is
continuing (or if a Default is continuing, specifying the Default and the steps, if any, being
taken to remedy it).20.9
    
    Know your customer checks20.9.1
    
    If:
 (a)
    
    the introduction of or any change in (or in the interpretation,
administration or application of) any law or regulation made after the date of this
Agreement;(b)
    
    any change in the status of an Obligor or the composition of the
shareholders of an Obligor after the date of this Agreement; or(c)
    
    a proposed assignment or transfer by a Lender of any of its rights and/or
obligations under this Agreement to a party that is not a Lender prior to such
assignment or transfer,(d)
    
    obliges the Agent or any Lender (or, in the case of Clause 20.9.1(c)
above, any prospective new Lender) to comply with know your customer or similar
identification procedures in circumstances where the necessary information is not
already available to it, each Obligor shall (and the Borrower shall ensure that each
Obligor shall) promptly upon the request of the Agent or any Lender supply, or
procure the supply of, such documentation and other evidence as is reasonably
requested by the Agent (for itself or on behalf of any Lender) or any Lender (for
itself or, in the case of the event described in Clause 20.9.1(c) above, on behalf
of any prospective new Lender) in order for the Agent, such Lender or, in the case
of the event described in Clause 20.9.1(c) above, any prospective new Lender to
carry out and be satisfied with the results of all necessary know your customer or
other checks in relation to any relevant person pursuant to the transactions
contemplated in the Finance Documents.
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20.9.2
    
    Each Lender shall promptly upon the request of the Agent supply, or procure the supply
of, such documentation and other evidence as is reasonably requested by the Agent (for itself)
in order for the Agent to carry out and be satisfied with the results of all necessary know
your customer or other checks on Lenders or prospective new Lenders pursuant to the
transactions contemplated in the Finance Documents.20.9.3
    
    The Borrower shall, by not less than 10 Business Days prior written notice to the Agent,
notify the Agent (which shall promptly notify the Lenders) of its intention to request that
one of its Subsidiaries becomes an Additional Obligor pursuant to Clause 25 (Changes to the
Obligors).20.9.4
    
    Following the giving of any notice pursuant to Clause 20.9.3 above, if the accession of such
Additional Obligor obliges the Agent or any Lender to comply with know your customer or
similar identification procedures in circumstances where the necessary information is not
already available to it, the Borrower shall promptly upon the request of the Agent or any
Lender supply, or procure the supply of, such documentation and other evidence as is
reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for
itself or on behalf of any prospective new Lender) in order for the Agent, or such Lender or
any prospective new Lender to carry out and be satisfied it has complied with all necessary
know your customer or other checks in relation to any relevant person pursuant to the
accession of such Subsidiary to this Agreement as an Additional Obligor.20.10
    
    ERISA-Related InformationThe Borrower shall supply to the Agent (in sufficient copies for all the Lenders, if the
Agent so requests):
 (a)
    
    promptly and in any event within fifteen days after any member of the
Group or any ERISA Affiliate files a Schedule B (or such other schedule as contains
actuarial information) to IRS Form 5500 in respect of an Employee Plan with Unfunded
Pension Liabilities, a copy of such IRS Form 5500 (including the Schedule B);(b)
    
    promptly and in any event within thirty days after any member of the
Group or any ERISA Affiliate knows or has reason to know that any ERISA Event has
occurred, the written statement of the Chief Financial Officer of such member of the
Group or ERISA Affiliate, as applicable, describing such ERISA Event and the action,
if any, which it proposes to take with respect to such ERISA Event and a copy of any
notice filed with the PBGC or the IRS pertaining to such ERISA Event; providing
that, in the case of ERISA Events under paragraph (d) of its definition, the 30
(thirty) day period set forth above shall be a 10 (ten) day period, and, in the case
of ERISA Events under paragraph (b) of its definition, in no event shall notice be
given later than the occurrence of the ERISA Event; and(c)
    
    promptly, and in any event within thirty days, after becoming aware that
there has been (A) a material increase in Unfunded Pension Liabilities; (B) the
existence of potential withdrawal liability under Section 4201 of ERISA, if the
Borrower and its ERISA Affiliates were to completely or partially withdraw from all
Multiemployer Plans; (C) the adoption of, or the commencement of contributions to,
any Employee Plan subject to Section 412 of the Code by any member of the Group or
any ERISA Affiliate; or (D) the adoption of any amendment to an Employee Plan
subject to Section 412 of the Code which results in a material increase in
contribution obligations of any Obligor, the
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detailed written description of such Employee Plan from the Chief Financial Officer
of each affected member of the Group or ERISA Affiliate, as applicable.
 20.11
    
    Tax DocumentationAny non-US Lender that is entitled to an exemption from or reduction of withholding tax
under United States law, or any treaty to which the United States is a party, with
respect to payments hereunder or under any other Finance Document shall deliver to the
Borrower (with a copy to the Agent), at the time or times reasonably requested by the
Borrower or the Agent, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at a
reduced rate of withholding. In addition, any Lender, if requested by the Borrower or
the Agent, shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Agent as will enable the Borrower or the
Agent to determine whether or not such Lender is subject to backup withholding or
information reporting requirements.Without limiting the generality of the foregoing, any non-US Lender shall use its
reasonable endeavours to deliver to the Borrower and the Agent (in such number of copies
as shall be reasonably requested by the recipient) the following:
 (a)
    
    on or prior to the date on which such non-US Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the reasonable request
of the Borrower or the Agent, but only if such non-US Lender is legally entitled to
do so), whichever of the following is applicable:
 (i)
    
    duly completed copies of Internal Revenue Service
Form W-8BEN claiming eligibility for benefits of an income tax treaty to
which the United States of America is a party;(ii)
    
    duly completed copies of Internal Revenue Service
Form W-8ECI;(iii)
    
    in the case of a non-U.S. Lender claiming the
benefits of the exemption for portfolio interest under section 881(c) of
the Code, (x) a certificate to the effect that such non-US Lender is not
(A) a bank within the meaning of section 881(c)(3)(A) of the Code, (B)
a 10 percent shareholder of the Borrower within the meaning of section
881(c)(3)(B) of the Code, or (C) a controlled foreign corporation
described in section 881(c)(3)(C) of the Code and (y) duly completed
copies of Internal Revenue Service Form W-8BEN; or(iv)
    
    any other form prescribed by applicable law as a
basis for claiming exemption from or a reduction in United States
Federal withholding tax duly completed together with such supplementary
documentation as may be prescribed by applicable law to permit the
Borrower to determine the withholding or deduction required to be made;
and
 (b)
    
    for payments made after 31 December 2012, by the later of (a) the date on
which a non-U.S. Lender becomes a Lender hereunder or (b) 30 days prior to the date
on which a payment after December 31, 2012 to such non-U.S. Lender is due, evidence
of such non-US Lenders agreement with the Secretary of the Treasury pursuant to
Section 1471(b) of the Internal
 55




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Revenue Code, or, in the case of a non-US Lender that is a non-financial foreign
entity under Section 1472 of the Internal Revenue Code, (a) a certification that
such non-US Lender does not have any substantial United States owners or (b) the
name, address and TIN of each substantial United States owner of the non-US Lender.
For purposes of the preceding sentence, substantial United States owners shall
have the meaning set forth in Section 1473(2) of the Internal Revenue Code.
 21
    
    Financial Covenants21.1
    
    Financial definitionsIn this Clause 21:
 (a)
    
    Actual Statutory Surplusmeans, at any time, the surplus figure on Line
35 of Page 3 of the most recent financial statements of the relevant member of the
Group delivered pursuant to Clause 20.2 (Financial statements) and determined in
accordance with SAP. References to amounts on particular lines and pages of the
financial statements are based on the format promulgated by the Authority for the
Original Financial Statements. If such format is changed in future years so that
different information is contained in such items or they no longer exist, it is
understood that the reference is to information consistent with that reported in the
referenced item in the Original Financial Statements of that entity.(b)
    
    Consolidated Net Surplusmeans, at any time, the aggregate Actual
Statutory Surplus of the relevant member of the Group based on the most recent
Annual Financial Statements delivered pursuant to Clause 20.2 (Financial
statements).(c)
    
    Facility Debt: means on the last day of the Relevant Period, the
aggregate of the Groups consolidated Financial Indebtedness in respect of the
Facility.(d)
    
    Financial Quarter: means the period commencing on the day after one
Quarter Date and ending on the next Quarter Date.(e)
    
    Financial Year: means each period of twelve months ending on 31 December.(f)
    
    Net Surplus Cover: means the ratio of Consolidated Net Surplus to
Facility Debt.(g)
    
    Quarter Date: means each of 31 March, 30 June, 30 September and 31
December.(h)
    
    Regulatory Cover: means, with respect to any Regulated Insurance Entity,
the ratio of Actual Statutory Surplus to the Authorised Control Level Risk Based
Capital (as defined by the NAIC) of such Regulated Insurance Entity.(i)
    
    Relevant Period: means each period of twelve months (or, if shorter, the
period from the date of this Agreement) ending on each Quarter Date.
 21.2
    
    Financial condition21.2.1
    
    The Borrower shall ensure that:
 (a)
    
    Regulatory Cover:Regulatory Cover of the Target and each Regulated
Insurance Entity shall at all times exceed 1.1:1;
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(b)
    
    Minimum Net Surplus Cover:Net Surplus Cover shall not at any time be
less than 2:1; and(c)
    
    Requisite Rating:
 (i)
    
    the short term rating and/or long term rating of
fixed income investments held by the Target Group:
 (a)
    
    shall have a rating of
not less than BBB- from the Rating Agency and no more than
20% of the total value of such investments shall have a
rating of BBB or below from the Rating Agency;(b)
    
    shall at all times have
a minimum weighted average rating of at least AA from the
Rating Agency;
 (ii)
    
    the maximum duration in the cash and fixed income
portfolios held by the Target Group shall be no greater than five years;
and(iii)
    
    no more than 12.5% of the total value of
investments of the Target Group shall be held in investments that are
not cash or fixed income investments.
 21.3
    
    Financial testing21.3.1
    
    The financial covenants set out in Clauses 21.2.1(a) (Regulatory cover) and 21.2.1(b)
(Minimum Net Surplus Cover) shall be calculated in accordance with the Accounting Principles
and tested first by reference to the Quarterly Financial Statements and where available, by
reference to the Annual Financial Statements (each delivered in accordance with Clause 20.2
(Financial Statements) and each Compliance Certificate delivered pursuant to Clause 20.3
(Provision and contents of Compliance Certificate)).21.3.2
    
    No item shall be deducted or credited more than once in any calculation.21.3.3
    
    Where an amount in any financial statement or Compliance Certificate is not denominated in
US Dollars, it shall be converted into US Dollars at the rate specified in the financial
statements so long as such rate has been set in accordance with the Accounting Principles.21.3.4
    
    The financial covenants in Clauses 21.2.1(a) (Regulatory Cover) and 21.2.1(b) (Minimum Net
Surplus Cover) of Clause 21.2 (Financial condition) shall apply on a continuing basis but
shall be tested on each Quarter Date commencing with the 30 June 2011 Quarter Date.21.4
    
    Equity cure- Regulatory Cover21.4.1
    
    No Event of Default under Clause 23.2 (Financial Covenants and other obligations) in
relation to Clauses 21.2.1(a) (Regulatory Cover) will occur if:
 (a)
    
    the proceeds of an additional contributed surplus or any Permitted Share
Issue permitted by paragraph (b) of the definition of that term (which are
designated in writing by the Borrower to the Agent as being provided for the purpose
of this Clause 21.4 (Equity cure- Regulatory Cover)) and/or any debt (subordinated
on terms approved by the Agent acting reasonably) (in each case the New Regulatory
Investment) is invested in the relevant Regulated Insurance Entity within 5 Business
Days of the date on which the Borrower becomes aware of a breach of Clause 21.2.1(a)
(Regulatory Cover).
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(b)
    
    promptly following receipt by the relevant Regulated Insurance Entity of
the proceeds of such New Regulatory Investment (and in any event prior to the expiry
of such 5 Business Day period), a certificate signed by the finance director of the
Borrower is delivered to the Agent confirming that on recalculating the Regulatory
Cover financial covenant set out in Clause 21.2.1(a) (Regulatory Cover) would be
complied with and attaching reasonable details of such calculations.
 21.5
    
    Equity cure- Net Surplus CoverNo Event of Default under Clause 23.2 (Financial Covenants and other obligations) in
relation to Clauses 21.2.1(b) (Minimum Net Surplus Cover) will occur if:
 (a)
    
    the proceeds of an additional contributed surplus or any Permitted Share
Issue permitted by paragraph (b) of the definition of that term (which are
designated in writing by the Borrower to the Agent as being provided for the purpose
of this Clause 21.5) and/or any debt (subordinated on terms approved by the Agent
acting reasonably) (in each case the New Investment) is invested in the Borrower
within 5 Business Days of the date on which the Borrower becomes aware of a breach
of Clause 21.2.1(b) (Minimum Net Surplus Cover).(b)
    
    promptly following receipt by the Borrower of the proceeds of such New
Investment (and in any event prior to the expiry of such 5 Business Day period), a
certificate signed by the finance director of the Borrower is delivered to the Agent
confirming that on recalculating the financial covenant set out in Clause 21.2.1(b)
(Minimum Net Surplus Cover) for the period (and for these purposes the amount of the
New Investment shall be included in calculating Consolidated Net Surplus) in respect
of which the breach arose, and on the basis that the New Investment is deemed to
have been made immediately prior to the relevant Quarter Date, such financial
covenant would be complied with (and such certificate shall attach reasonable
details of such calculations).
 No more than two New Investments may be made until the Termination Date and no two New
Investments may be made in consecutive Financial Quarters.22
    
    General UndertakingsThe undertakings in this Clause 22 remain in force from the date of this Agreement
for so long as any amount is outstanding under the Finance Documents or any Commitment is
in force.22.1
    
    AuthorisationsEach Obligor shall (and the Borrower shall ensure that each member of the Group will)
promptly:
 (a)
    
    obtain, comply with and do all that is necessary to maintain in full
force and effect; and(b)
    
    supply certified copies to the Agent of,
 any Authorisation required under any law or regulation of a Relevant Jurisdiction to
enable it to: (i) perform its obligations under the Finance Documents and the Acquisition
Documents; (ii) ensure the legality, validity, enforceability or admissibility in
evidence of any Finance Document or Acquisition Document; and (iii) carry on its business
(including, without limitation, to transact insurance and
 58




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reinsurance business) where failure to do so has or is reasonably likely to have a
Material Adverse Effect.22.2
    
    Compliance with lawsEach Obligor shall (and the Borrower shall ensure that each member of the Group will)
comply in all respects with all federal and local laws, rules and regulations (including,
without limitation, the establishment of all insurance reserves required to be
established under SAP and applicable laws restricting the investments of each member of
the Group) to which it may be subject, if failure so to comply has or is reasonably
likely to have a Material Adverse Effect.22.3
    
    Taxation22.3.1
    
    Each Obligor shall (and the Borrower shall ensure that each member of the Group will) pay
and discharge all Taxes imposed upon it or its assets within the time period allowed without
incurring penalties unless and only to the extent that:
 (a)
    
    such payment is being contested in good faith;(b)
    
    adequate reserves are being maintained for those Taxes and the costs
required to contest them have been disclosed in its latest financial statements
delivered to the Agent under Clause 20.2.1(a) (Financial statements); and(c)
    
    such payment can be lawfully withheld and failure to pay those Taxes does
not have or is not reasonably likely to have a Material Adverse Effect.
 22.3.2
    
    No member of the Group may change its residence for Tax purposes in a way that would
adversely affect the Tax treatment of such members payments to any Finance Party under this
Agreement.22.4
    
    MergerOther than in the case of a Permitted Transaction which is referred to in paragraph (a)
of the definition of that term, no Obligor shall (and the Borrower shall ensure that no
other member of the Group will) enter into (or agree to enter into) any amalgamation,
demerger, merger, consolidation or corporate reconstruction other than any solvent
liquidation or reorganisation.22.5
    
    Change of businessThe Borrower shall procure that no substantial change is made to the general nature of
the business of the Borrower or the Group taken as a whole from that carried on by the
Target Group at the date of this Agreement.22.6
    
    AcquisitionsOther than in the case of a Permitted Transaction, which is referred to in paragraph (a)
or (c) of the definition of that term, or the Acquisition no Obligor shall (and the
Borrower shall ensure that no other member of the Group will):
 (a)
    
    acquire a company or any shares or securities or a business or
undertaking (or, in each case, any interest in any of them); or(b)
    
    incorporate a company.
 22.7
    
    Joint venturesNo Obligor shall (and the Borrower shall ensure that no member of the Group will):
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(a)
    
    enter into, invest in or acquire (or agree to acquire) any shares,
stocks, securities or other interest in any Joint Venture; or(b)
    
    transfer any assets or lend to or guarantee or give an indemnity for or
give Security for the obligations of a Joint Venture or maintain the solvency of or
provide working capital to any Joint Venture (or agree to do any of the foregoing).
 22.8
    
    Holding CompaniesThe Borrower shall not trade, carry on any business, own any assets or incur any
liabilities except for:
 (a)
    
    the provision of administrative services (excluding treasury services) to
other members of the Group of a type customarily provided by a holding company to
its Subsidiaries;(b)
    
    ownership of shares in its Subsidiaries, intra-Group debit balances,
intra-Group credit balances and other credit balances in bank accounts, cash and
Cash Equivalent Investments but only if those shares, credit balances, cash and Cash
Equivalent Investments are subject to the Transaction Security; or(c)
    
    any liabilities under the Transaction Documents to which it is a party
and professional fees and administration costs in the ordinary course of business as
a holding company,
 and this Clause 22.8 shall prevail if but for this Clause a transaction would otherwise
be a Permitted Disposal, Permitted Financial Indebtedness, a Permitted Guarantee, a
Permitted Loan, Permitted Security or a Permitted Transaction or be permitted by Clause
22.27 (Intra-Group Transactions).22.9
    
    Preservation of assetsEach Obligor shall (and the Borrower shall ensure that each member of the Group will)
maintain in good working order and condition (ordinary wear and tear excepted) all of its
assets necessary or desirable in the conduct of its business if failure to do so has or
is reasonably likely to have a Material Adverse Effect.22.10
    
    Pari passu rankingEach Obligor shall ensure that at all times any unsecured and unsubordinated claims of a
Finance Party against it under the Finance Documents rank at least pari passu with the
claims of all its other unsecured and unsubordinated creditors except those creditors
whose claims are mandatorily preferred by laws of general application to companies.22.11
    
    Acquisition Documents22.11.1
    
    The Borrower shall promptly pay all amounts payable to the Vendor under the Acquisition
Documents as and when they become due (except to the extent that any such amounts are being
contested in good faith by a member of the Group and where adequate reserves are set aside for
any such payment).22.11.2
    
    The Borrower shall (and will procure that each relevant member of the Group will), take all
reasonable and practical steps to preserve and enforce its rights (or the rights of any other
member of the Group) and pursue any claims and remedies arising under any Acquisition
Documents.
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22.11.3
    
    No Obligor shall (and the Borrower shall procure that no relevant member of the Group will)
amend, vary, novate, supplement, supercede, waive or terminate any term of an Acquisition
Document without the prior written consent of the Agent (such consent not to be unreasonably
withheld or delayed)22.12
    
    Negative pledge22.12.1
    
    Except as permitted under Clause 22.12.2 below:
 (a)
    
    No Obligor shall (and the Borrower shall ensure that no other member of
the Group will) create or permit to subsist any Security over any of its assets.(b)
    
    No Obligor shall (and the Borrower shall ensure that no other member of
the Group will) sell, transfer or otherwise dispose of any of its receivables.(c)
    
    No Obligor shall (and the Borrower shall ensure that no other member of
the Group will):
 (i)
    
    sell, transfer or otherwise dispose of any of its
assets on terms whereby they are or may be leased to or re-acquired by
any other member of the Group;(ii)
    
    enter into any arrangement under which money or
the benefit of a bank or other account may be applied, set-off or made
subject to a combination of accounts; or(iii)
    
    enter into any other preferential arrangement
having a similar effect,
 in circumstances where the arrangement or transaction is entered into primarily as
a method of raising Financial Indebtedness or of financing the acquisition of an
asset. A transaction referred to in this paragraph (c) is termed Quasi-Security.
 22.12.2
    
    Clause 22.12.1 above does not apply to any Security or (as the case may be) Quasi-Security,
which is:
 (i)
    
    Permitted Security; or(ii)
    
    given under the Finance Documents
 22.13
    
    Disposals22.13.1
    
    Except as permitted under Clause 22.13.2 below, no Obligor shall (and the Borrower shall
ensure that no member of the Group will) enter into a single transaction or a series of
transactions (whether related or not) and whether voluntary or involuntary to sell, lease,
transfer, licence or otherwise dispose of any asset.22.13.2
    
    Clause 22.13.1 above does not apply to any sale, lease, transfer or other disposal which
is:
 (a)
    
    a Permitted Disposal; or(b)
    
    a Permitted Transaction which is referred to in paragraph (a) of the
definition of that term.
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22.14
    
    Arms length basis22.14.1
    
    Except as permitted by Clause 22.14.2 below, no Obligor shall (and the Borrower shall
ensure no member of the Group will) enter into any transaction with any person except on bona
fide arms length terms.22.14.2
    
    The following transactions shall not be a breach of Clause 22.14.1:
 (a)
    
    intra-Group transactions permitted under Clause 22.27 (Intra-Group
transactions);(b)
    
    fees, costs and expenses payable under the Transaction Documents in the
amounts set out in the Transaction Documents delivered to the Agent under Clause 4.1
(Initial conditions precedent) or agreed by the Agent; and(c)
    
    the provision of administrative services by an Affiliate of the Borrower
to any Obligor (at the date of this Agreement the Borrower contemplates the
Affiliate will be Enstar (US), Inc.) provided that any payments under such
transactions shall remain subject to the restrictions in Clause 22.17.1 (Dividends
and share redemption).
 22.15
    
    Loans or credit22.15.1
    
    Except as permitted under Clause 22.15.2 below, no Obligor shall (and the Borrower shall
ensure that no member of the Group will) be a creditor in respect of any Financial
Indebtedness.22.15.2
    
    Clause 22.15.1 above does not apply to:
 (a)
    
    a Permitted Loan (which is consistent with Clause 22.8 (Holding
Companies)); or(b)
    
    a Permitted Transaction which is referred to in paragraph (a) of the
definition of that term; or(c)
    
    a Permitted Distribution.
 22.16
    
    No Guarantees or indemnities22.16.1
    
    Except as permitted under Clause 22.16.2 below, no Obligor shall (and the Borrower shall
ensure that no member of the Group will) incur or allow to remain outstanding any guarantee,
bond or indemnity in respect of any obligation of any person.22.16.2
    
    Clause 22.16.1 above does not apply to a guarantee, bond or indemnity which is:
 (a)
    
    a Permitted Guarantee (which is consistent with Clause 22.8 (Holding
Companies);(b)
    
    a Permitted Transaction which is referred to in paragraph (a) of the
definition of that term; or(c)
    
    a policy or contract of insurance or reinsurance written or assumed in
the ordinary course of business by any of the Regulated Insurance Entities.
 22.17
    
    Dividends and share redemption22.17.1
    
    Except as permitted under 22.18.2 below, the Borrower shall not (and will ensure that no
other member of the Group will):
 62




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(a)
    
    declare, make or pay any dividend, charge, fee or other distribution (or
interest on any unpaid dividend, charge, fee or other distribution) (whether in cash
or in kind) on or in respect of its share capital (or any class of its share
capital) or any additional paid in capital;(b)
    
    repay or distribute any dividend or share premium reserve;(c)
    
    pay or allow any member of the Group to pay any management, advisory or
other fee to or to the order of any of the shareholders of the Borrower; or(d)
    
    redeem, repurchase, defease, retire, reduce, cancel or repay any of its
share capital or resolve to do so.
 22.17.2
    
    Clause 22.17.1 above does not apply to:
 (a)
    
    a Permitted Distribution;(b)
    
    a Permitted Payment; or(c)
    
    a Permitted Transaction which is referred to in paragraph (a) of the
definition of that term.
 22.18
    
    Financial Indebtedness22.18.1
    
    Except as permitted under Clause 22.18.2 below, no Obligor shall (and the Borrower shall
ensure that no member of the Group will) incur or allow to remain outstanding any Financial
Indebtedness.22.18.2
    
    Clause 22.18.1 above does not apply to Financial Indebtedness which is:
 (a)
    
    Permitted Financial Indebtedness; or(b)
    
    contemplated by paragraph (a) of the definition of Permitted Transaction.
 22.19
    
    Share capitalNo Obligor shall (and the Borrower shall ensure no member of the Group will) issue any
shares except pursuant to a Permitted Share Issue.22.20
    
    Compliance with ERISANo Obligor shall:
 (a)
    
    allow, or permit any of its ERISA Affiliates to allow, (i) any Employee
Plan with respect to which any member of the Group or any of its ERISA Affiliates
may have any liability to terminate, (ii) any member of the Group or ERISA
Affiliates to withdraw from any Employee Plan or Multiemployer Plan, (iii) any ERISA
Event to occur with respect to any Employee Plan, or (iv) any failure to meet the
minimum funding standard (within the meaning of Section 302 of ERISA and Section 412
of the Code), whether or not waived, with respect to any of its Employee Plans; to
the extent that any of the events described in (i), (ii), (iii) or (iv), singly or
in the aggregate, would be reasonably likely to have a Material Adverse Effect;(b)
    
    allow, or permit any of its ERISA Affiliates to allow an Unfunded Pension
Liability to the extent that such Unfunded Pension Liability would be reasonably
expected to result in material liability; or(c)
    
    fail, or permit any of its ERISA Affiliates to fail, to comply in any
material respect with ERISA or the related provisions of the Code, if any such non-
 63




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compliance, singly or in the aggregate, would be reasonably likely to have a
Material Adverse Effect.
 22.21
    
    AccessEach Obligor shall, and the Borrower shall ensure that each member of the Group will (not
more than once in every Financial Year unless the Agent reasonably suspects a Default is
continuing or may occur), permit the Agent and/or the Security Agent and/or accountants
or other professional advisers and contractors of the Agent or Security Agent free access
at all reasonable times and on reasonable notice at the risk and cost of the Obligor to
(a) the premises, assets, books, accounts and records of each member of the Group and (b)
meet and discuss matters with Richard Harris and David Rocke.22.22
    
    Intellectual Property22.22.1
    
    Each Obligor shall and the Borrower shall procure that each member of the Group will:
 (a)
    
    preserve and maintain the subsistence and validity of the Intellectual
Property necessary for its business;(b)
    
    use reasonable endeavours (including the institution of legal
proceedings) to prevent any infringement in any material respect of the Intellectual
Property;(c)
    
    promptly notify the Agent if it becomes aware of any infringement or
challenge to the validity, enforceability or ownership of any Intellectual Property
and supply the Security Agent with all information relating to it which is
reasonably requested by the Agent;(d)
    
    make registrations and pay all registration fees and taxes necessary to
maintain the Intellectual Property in full force and effect and record its interest
in that Intellectual Property;(e)
    
    not use or permit the Intellectual Property to be used in a way or take
any step or omit to take any step in respect of that Intellectual Property which may
materially and adversely affect the existence or value of that Intellectual Property
or imperil the right of any member of the Group to use such property; and(f)
    
    not discontinue the use of the Specified Intellectual Property (as
defined in any Transaction Security Document),
 where failure to do so in the case of Clause 22.22.1(a) and 22.22.1(b) above, or, in the
case of Clauses 22.22.1(d) and 22.22.1(e) above, such use, permission to use, omission or
discontinuation is reasonably likely to have a Material Adverse Effect  wording to be
discussed.22.22.2
    
    Failure to comply with any part of Clause 22.22.1 above shall not be a breach of Clause
22.22.1 to the extent that any dealing with Intellectual Property which would otherwise be a
breach of Clause 22.22.1 is contemplated by paragraph (a) of the definition of Permitted
Transaction.22.23
    
    AmendmentsNo Obligor shall (and the Borrower shall ensure that no other Obligor or member of the
Group will) amend, vary, novate, supplement, supersede, waive or terminate any term of a
Transaction Document or any other document delivered to the Agent pursuant to Clause 4.1
(Initial conditions precedent) or Clause 25 (Changes to the
 64




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Obligors) or enter into any agreement with any shareholders of the Borrower except in
writing:
 (a)
    
    in accordance with the provisions of Clause 35 (Amendments and Waivers)
or the Subordination Deed; or(b)
    
    prior to the First Utilisation Date, with the prior written consent of
the Original Lenders; or(c)
    
    after the First Utilisation Date, in a way which:
 (i)
    
    could not reasonably be expected to materially
and adversely affect the interests of the Lenders or the ranking and/or
subordination arrangements provided for in the Subordination Deed; and(ii)
    
    would not change the date, amount or method of
payment of the dividends on the Borrowers shares.
 The Borrower shall promptly supply to the Agent a copy of any document relating to any of
the matters referred to in paragraphs (a) to (c) above.22.24
    
    Financial assistanceEach Obligor shall (and the Borrower shall procure each member of the Group will) comply
in all respects with any legislation governing the granting of financial assistance in
its jurisdiction of incorporation including in relation to the execution of the
Transaction Security Documents and payment of amounts due under this Agreement.22.25
    
    Treasury TransactionsNo Obligor shall (and the Borrower shall procure that no members of the Group will) enter
into any Treasury Transaction.22.26
    
    Further assurance22.26.1
    
    Each Obligor shall (and the Borrower shall procure that each member of the Group will)
promptly do all such acts or execute all such documents (including assignments, transfers,
mortgages, charges, notices and instructions) as the Security Agent may reasonably specify and
in such form as the Security Agent may reasonably require (in favour of the Security Agent or
its nominee(s)) in order to:
 (a)
    
    perfect or protect the Security created or intended to be created under
or evidenced by the Transaction Security Documents (which may include the execution
of a mortgage, charge, assignment or other Security over all or any of the assets
which are, or are intended to be, the subject of the Transaction Security) or for
the exercise of any rights, powers and remedies of the Security Agent or the Finance
Parties provided by or pursuant to the Finance Documents or by law;(b)
    
    confer on the Security Agent or confer on the Finance Parties, Security
over any property and assets of that Obligor located in any jurisdiction which is
(to the extent permitted by local law) equivalent or similar to the Security
intended to be conferred by or pursuant to the Transaction Security Documents;
and/or(c)
    
    facilitate the realisation of the assets which are, or are intended to
be, the subject of the Transaction Security.
 65




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22.26.2
    
    Each Obligor shall (and the Borrower shall procure that each member of the Group shall)
take all such action as is available to it (including making all filings and registrations) as
may be necessary for the purpose of the creation, perfection, protection or maintenance of any
Security conferred or intended to be conferred on the Security Agent or the Finance Parties by
or pursuant to the Finance Documents.22.27
    
    Intra-Group transactions22.27.1
    
    Without the prior consent of the Agent, no member of the Group may enter into any
transaction (whether by way of disposal, investment, loan, borrowing, guarantee or otherwise)
with, or in respect of the obligations of, any other member of the Group save and except where
such transaction is a Permitted Transaction and is not unlawful under any law or regulation in
any relevant jurisdiction including under any applicable financial assistance legislation.22.27.2
    
    Without the prior consent of the Agent, no member of the Group may enter into any
transaction (whether by way of disposal, investment, loan, borrowing, guarantee or otherwise)
with, or in respect of the obligations of, Enstar or any of its Subsidiaries (excluding other
members of the Group) where the value of such transaction exceeds US$100,000 save and except
where such transaction is conducted in the ordinary course of trading on arms length terms or
is a Permitted Transaction.22.27.3
    
    If the relevant intra-Group transaction contemplated by Clause 22.27.1 above:
 (a)
    
    is a disposal of assets from one Obligor to another and if Transaction
Security had been granted by the Obligor disposing of such asset then the asset must
be either transferred subject to such Security or the acquiring Obligor must grant
equivalent Security over that asset in favour of the Security Agent; or(b)
    
    results in Financial Indebtedness being owed by an Obligor to another
Obligor then the creditor of such Financial Indebtedness shall grant Security over
its rights in respect of such Financial Indebtedness in favour of the Lenders on
terms acceptable to the Agent (acting on the instructions of the Majority Lenders).
 22.28
    
    Cash Management22.28.1
    
    Subject to Clause 22.28.2 below, no Obligor shall and each Obligor will procure that none
of its Subsidiaries will, at any time hold cash or Cash Equivalent Investments greater than
required for its projected cashflow requirements (the amount being the Cash Balance) and such
Cash Balance shall only be lent by such member of the Group by way of a Permitted
Distribution.22.28.2
    
    No Obligor shall be obliged at any time to procure that a Subsidiary transfer any Cash
Balance under Clause 22.28.1 above:
 (a)
    
    at a time when to do so would cause the Obligor or the Subsidiary
(despite that person using all reasonable effects to avoid the relevant Tax
liability) to incur a materially greater Tax liability in respect of the Cash
Balance than it would otherwise incur if the transfer were made at a later date;(b)
    
    if (despite using all reasonable efforts to avoid the breach or the
result) to do so would breach any applicable law, regulatory requirement or result
in personal liability for the Obligor or the Subsidiary or any such persons
directors or management; or
 66




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##### 



(c)
    
    which would leave an amount which is less than US$50,000 in that
Subsidiary.
 22.29
    
    Obligors22.29.1
    
    The Borrower shall ensure that at all times after the date falling 10 days after the First
Utilisation Date, each member of the Group is an Obligor.22.29.2
    
    The Borrower need only perform its obligations under Clause 22.29.1 above if it is not
unlawful for the relevant person to become an Obligor and that person becoming an Obligor
would not result in personal liability for that persons directors or other management. Each
Obligor must use, and must procure that the relevant person uses, all reasonable endeavours
lawfully available to avoid any such unlawfulness or personal liability. This includes
agreeing to a limit on the amount guaranteed. The Agent may (but shall not be obliged to)
agree to such a limit if, in its opinion, to do so would avoid the relevant unlawfulness or
personal liability.22.30
    
    SyndicationThe Borrower shall provide reasonable assistance to the Arranger in the preparation of
the Information Memorandum and the primary syndication of the Facility (including,
without limitation, by making senior management available for the purpose of making
presentations to, or meeting, potential lending institutions) and will comply with all
reasonable requests for information from potential syndicate members prior to completion
of syndication.22.31
    
    Federal Reserve RegulationsThe Borrower will use the Facility without violating Regulations T, U and X.22.32
    
    Compliance with US RegulationsNo Obligor shall (and the Borrower shall ensure that no other member of the Group will)
become an investment company, or an affiliated personof, or promoteror principal
underwriterfor, an investment company, as such terms are defined in the 1940 Act.
Neither the making of any Loan, or the application of the proceeds or repayment of any
Loan by any member of the Group nor the consummation of the other transactions
contemplated by this agreement will violate any provision of such act or any rule,
regulation or order of the SEC under the 1940 Act.22.33
    
    Anti-Terrorism LawNo member of the Group shall (i) conduct any business or engage in making or receiving
any contribution of funds, goods or services to or for the benefit of any person
described in Clause 19.36 (Anti-Terrorism Laws) above, (ii) deal in, or otherwise engage
in any transaction relating to, any property or interests in property blocked pursuant to
the Executive Order or any other Anti-Terrorism Law, or (iii) engage in or conspire to
engage in any transaction that evades or avoids, or has the purposes of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
Law (and the Borrower shall deliver to the Lenders any certificating or other evidence
requested from time to time by any Lender or the Agent in its reasonable discretion,
confirming such member of the Groups compliance with this Clause 22.33.22.34
    
    Embargoed PersonAt all times through the term of the Facility, (a) none of the funds or assets of the
Obligors that are used to repay the Facility shall constitute property of, or shall be
 67




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##### 



beneficially owned directly or, to the knowledge of any Obligor, indirectly by, any
person subject to sanctions or trade restrictions under United States law (Embargoed
Personor Embargoed Persons) that is identified on (1) the List of Specially Designated
Nationals and Blocked Personsmaintained by the Office of Foreign Assets Control (OFAC)
of the US Department of the Treasury, and/or to the knowledge of any Obligor, as at the
date of this Agreement, based upon reasonable inquiry by such Obligor, on any other
similar list maintained by OFAC pursuant to any authorising statute including, but not
limited to, the International Emergency Economic Powers Act, 50 U.S.C. §§1701 et seq.,
The Trading with the Enemy Act, 50 USC App. 1 et seq., and any Executive Order or
regulation promulgated thereunder, with the result that the investment in the Obligors
(whether directly or indirectly), is prohibited by law, or the Facility made by the
Lenders would be in violation of law, or (2) the Executive Order, any related enabling
legislation or any other similar Executive Orders, and (b) no Embargoed Person shall have
any direct interests, and to the knowledge of any Obligor, as at the date of this
Agreement, based upon reasonable inquiry by any Obligor, indirect interest of any nature
whatsoever in the Obligors, with the result that the investment in the Obligors (whether
directly or indirectly), is prohibited by law or the Facility are in violation of law.22.35
    
    Anti-Money LaunderingAt all times throughout the term of the Facility, to the best knowledge of the Borrower
(based upon reasonable inquiry by the Borrower), none of the funds of the Borrower that
are used to repay the Facility shall be derived from any unlawful activity.22.36
    
    Conditions SubsequentThe Borrower shall within 10 days of the First Utilisation Date, deliver to the Agent, in
form and substance satisfactory to it, each document listed in Schedule 2 Part 1B
(Conditions Subsequent).22.37
    
    Disclaimer of AffiliationIf requested by the Agent the Borrower will use its reasonable endeavours to obtain, or
to assist the Agent or the Security Agent in obtaining, a Disclaimer of Affiliation (or
equivalent documentation) from the relevant Insurance Regulator of each Regulated
Insurance Entity in connection with this Agreement and the Transaction Security
Documents, in form and substance reasonably satisfactory to the Agent and Security Agent.23
    
    Events Of DefaultEach of the events or circumstances set out in this Clause 23 is an (Event of
Default).23.1
    
    Non-paymentAn Obligor does not pay on the due date any amount payable pursuant to a Finance Document
in the manner in which it is expressed to be payable unless:
 (a)
    
    its failure to pay is caused by:
 (i)
    
    administrative or technical error by a bank in
the transmission of funds; or(ii)
    
    a Disruption Event; and
 68




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(b)
    
    payment is made within 5 Business Days of its due date.
 23.2
    
    Financial covenants and other obligations23.2.1
    
    Any requirement of Clause 21 (Financial Covenants) is not satisfied.23.2.2
    
    An Obligor does not comply with the provisions of Clauses 20 (Information Undertakings),
Clause 22.4 (Merger) to 22.8 (Holding Companies) (inclusive), Clauses 22.12 (Negative pledge)
to 22.20 (Compliance with ERISA) (inclusive) or Clause 22.23 (Amendments).23.2.3
    
    An Obligor does not comply with any provision of any Transaction Security Document.23.3
    
    Other obligations23.3.1
    
    An Obligor does not comply with any provision of the Finance Documents (other than those
referred to in Clause 23.1 (Non-payment) and Clause 23.2 (Financial covenants and other
obligations)).23.3.2
    
    No Event of Default under Clause 23.3.1 above will occur if the failure to comply is capable
of remedy and is remedied within 10 Business Days after the earlier of the Agent giving notice
to the Borrower or relevant Obligor or the Borrower or an Obligor becoming aware of the
failure to comply.23.4
    
    Misrepresentation23.4.1
    
    Any representation, warranty or statement made or deemed to be made by an Obligor in the
Finance Documents or any other document delivered by or on behalf of any Obligor under or in
connection with any Finance Document is or proves to have been incorrect or misleading when
made or deemed to be made.23.4.2
    
    No Event of Default under Clause 23.4.1 above will occur if the failure to comply is capable
of remedy and is remedied within 10 Business Days after the earlier of the Agent giving notice
to the Obligors Agent or relevant Obligor or the Obligors Agent or an Obligor becoming aware
of the failure to comply.23.5
    
    Cross default23.5.1
    
    Any Financial Indebtedness of any member of the Group is not paid when due nor within any
originally applicable grace period.23.5.2
    
    Any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes
due and payable prior to its specified maturity as a result of an event of default (however
described).23.5.3
    
    Any commitment for any Financial Indebtedness of any member of the Group is cancelled or
suspended by a creditor of any member of the Group as a result of an event of default (however
described).23.5.4
    
    Any creditor of any member of the Group becomes entitled to declare any Financial
Indebtedness of any member of the Group due and payable prior to its specified maturity as a
result of an event of default (however described).23.5.5
    
    No Event of Default will occur under Clauses 23.5.1 to 23.5.4 if the aggregate amount of
Financial Indebtedness or commitment for Financial Indebtedness falling within Clauses 23.5.1
to 23.5.4 above is less than £250,000 (or its Base Currency Equivalent).
 69




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23.6
    
    Insolvency23.6.1
    
    Any member of the Group is unable or admits inability to pay its debts as they fall due or
is deemed to or declared to be unable to pay its debts under applicable law, suspends or
threatens to suspend making payments on any of its debts or, by reason of actual or
anticipated financial difficulties, commences negotiations with one or more of its creditors
with a view to rescheduling any of its indebtedness.23.6.2
    
    The value of the assets of any member of the Group is less than its liabilities (taking into
account contingent and prospective liabilities).23.6.3
    
    A moratorium is declared in respect of any indebtedness of any member of the Group. If a
moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by
that moratorium.23.6.4
    
    Any member of the Group shall in any US jurisdiction:
 (a)
    
    apply for, or consent to, the appointment of, or the taking of possession
by, a receiver, custodian, trustee, examiner or liquidator of itself or of any of
its property;(b)
    
    make a general assignment for the benefit of its creditors;(c)
    
    commence a voluntary case under Title II of the United States of America
Code entitled Bankruptcy (or any successor thereof), as amended;(d)
    
    file a petition with respect to itself seeking to take advantage of any
other law relating to bankruptcy, insolvency, reorganisation, liquidation,
dissolution, arrangement or winding up, or composition or readjustment of debts; or(e)
    
    take any corporate action for the purpose of effecting any of the
foregoing with respect to itself.
 23.7
    
    Insolvency proceedings23.7.1
    
    Any corporate action, legal proceedings or other procedure or step is taken in relation to:
 (a)
    
    the suspension of payments, a moratorium of any indebtedness, winding-up,
dissolution, administration, liquidation, arrangement or reorganisation (by way of
voluntary arrangement, scheme of arrangement or otherwise) of any member of the
Group or the composition or readjustment of its debts;(b)
    
    a composition, compromise, assignment or arrangement with any creditor of
any member of the Group;(c)
    
    the appointment of a liquidator, receiver, administrative receiver,
administrator, compulsory manager, custodian, trustee, examiner, rehabilitator,
conservator, supervisor or other similar officer in respect of any member of the
Group or any of its assets;(d)
    
    enforcement of any Security over any assets of any member of the Group;
or(e)
    
    any analogous procedure or step to those listed in paragraphs (a) to (d)
above is taken in any jurisdiction or an order for relief against any member of the
Group shall be entered in an involuntary case under Title II of the United States of
America Code entitled Bankruptcy (or any successor thereto) as amended.
 70




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##### 



23.7.2
    
    Clause 23.7.1 above shall not apply to any winding-up petition which is frivolous or
vexatious and is discharged, stayed or dismissed within 14 days of commencement, or, if
earlier, the date on which it is advertised.23.8
    
    Creditors processAny expropriation, attachment, sequestration, distress or execution or any analogous
process in any jurisdiction affects any asset or assets of an Obligor or a member of the
Group having an aggregate value of £500,000 or more and is not discharged within 7 days.23.9
    
    Unlawfulness and invalidity23.9.1
    
    It is or becomes unlawful for an Obligor, or any other member of the Group that is party to
the Subordination Deed, to perform any of its obligations under the Finance Documents or any
Transaction Security created or expressed to be created or evidenced by the Transaction
Security Documents ceases to be effective or any subordination created under the Subordination
Deed is or becomes unlawful.23.9.2
    
    Any obligation or obligations of any Obligor under any Finance Document or any member of the
Group under the Subordination Deed are not (subject to the Legal Reservations) or cease to be
legal, valid, binding or enforceable and the cessation individually or cumulatively materially
and adversely affects the interests of the Lenders under the Finance Documents.23.9.3
    
    Any Finance Document ceases to be in full force and effect or any Transaction Security or
any subordination created under the Subordination Deed ceases to be legal, valid, binding,
enforceable or effective or is alleged by a party to it (other than a Finance Party) to be
ineffective.23.10
    
    Subordination Deed23.10.1
    
    Any party to the Subordination Deed (other, in each case, than a Finance Party) fails to
comply with the provisions of, or does not perform its obligations under, the Subordination
Deed or a representation or warranty given by that party in the Subordination Deed is
incorrect in any material respect.23.10.2
    
    No Event of Default under Clause 23.10.1 above will occur if the non-compliance or
circumstances giving rise to the misrepresentation are capable of remedy, and it is remedied
within 10 Business Days of the earlier of the Agent giving notice to that party or that party
becoming aware of the non-compliance or misrepresentation.23.11
    
    Cessation of businessAny Obligor or any member of the Group suspends or ceases to carry on (or threatens to
suspend or cease to carry on) all or a material part of its business except as a result
of a disposal which is a Permitted Disposal or a Permitted Transaction which is
contemplated in paragraph (a) of the definition of that term.23.12
    
    Change of ownershipAn Obligor (other than the Borrower) ceases to be a wholly-owned Subsidiary of the
Borrower.
 71




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##### 



23.13
    
    Amending Constitutional DocumentsThe Borrower amends, varies, supplements, supersedes, waives or terminates any provision
of its Constitutional Documents which could adversely affect the interests of the Finance
Parties without the prior written consent of the Majority Lenders.23.14
    
    Audit qualificationThe Auditors of the Group qualify the audited annual consolidated financial statements of
the Borrower.23.15
    
    ExpropriationThe authority or ability of any Obligor or any member of the Group to conduct its
business is limited or wholly or substantially curtailed by any seizure, expropriation,
nationalisation, intervention, restriction or other action by or on behalf of any
governmental, regulatory or other authority or other person in relation to any Obligor or
any member of the Group or any of its assets.23.16
    
    Repudiation and rescission of agreements23.16.1
    
    An Obligor (or any other relevant party other than a Finance Party) or the Shareholder
rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or
any of the Transaction Security or evidences an intention to rescind or repudiate a Finance
Document or any Transaction Security.23.16.2
    
    Any party to the Acquisition Documents or the Subordination Deed rescinds or purports to
rescind or repudiates or purports to repudiate any of those agreements or instruments in whole
or in part where to do so has or is, in the reasonable opinion of the Majority Lenders, likely
to have a material adverse effect on the interests of the Lenders under the Finance Documents.23.17
    
    LitigationAny litigation, arbitration, administrative, governmental, regulatory or other
investigations, proceedings or disputes are commenced or threatened in relation to the
Transaction Documents or the transactions contemplated in the Transaction Documents or
against any Obligor or any member of the Group or its assets and which if successful
would be reasonably likely to have a Material Adverse Effect.23.18
    
    Regulatory SanctionsAny fine, levy or sanctions are imposed upon any member of the Target Group by any
Governmental Authority which the Majority Lenders reasonably believe has or is reasonably
likely to have a Material Adverse Effect.23.19
    
    Material adverse changeAny event or circumstance occurs which the Majority Lenders reasonably believe has or is
reasonably likely to have a Material Adverse Effect.23.20
    
    Employee PlansAny ERISA Event shall have occurred, or Clause 22.20 (Compliance with ERISA) shall be
breached, and the liability of a member of the Group or its ERISA Affiliates, either
individually or in the aggregate, related to such ERISA Event or breaches, individually
or when aggregated with all other ERISA Events, and all such breaches would have or would
be reasonably expected to have a Material Adverse Effect.
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23.21
    
    AccelerationOn and at any time after the occurrence of an Event of Default which is continuing the
Agent may, and shall if so directed by the Majority Lenders, by notice to the Borrower:
 (a)
    
    cancel the Total Commitments at which time they shall immediately be
cancelled;(b)
    
    declare that all or part of the Loans, together with accrued interest,
and all other amounts accrued or outstanding under the Finance Documents be
immediately due and payable, at which time they shall become immediately due and
payable;(c)
    
    declare that all or part of the Loans be payable on demand, at which time
they shall immediately become payable on demand by the Agent on the instructions of
the Majority Lenders;(d)
    
    exercise or direct the Security Agent to exercise any or all of its
rights, remedies, powers or discretions under the Finance Documents.
 23.22
    
    Effect of InsolvencyAt any time after the occurrence of an Event of Default under Clause 23.6 (Insolvency) or
Clause 23.7 (Insolvency Proceedings) in respect of any Obligor the Loans made to such
Obligor shall be immediately due and payable without notice from the Agent (together with
accrued interest and commission and any other sums then owed by such Obligor under this
Agreement).24
    
    Changes To The Lenders24.1
    
    Assignments and transfers by the LendersSubject to this Clause 24, a Lender (Existing Lender) may:
 (a)
    
    assign any of its rights; or(b)
    
    transfer by novation any of its rights and obligations, under any Finance
Document to another bank or financial institution or to a trust, fund or other
entity which is regularly engaged in or established for the purpose of making,
purchasing or investing in loans, securities or other financial assets (New Lender).
 24.2
    
    Conditions of assignment or transfer24.2.1
    
    The consent of the Borrower is required for an assignment or transfer by an Existing Lender,
unless the assignment or transfer is:
 (a)
    
    to another Lender or an Affiliate of a Lender;(b)
    
    if the Existing Lender is a fund, to a fund which is a Related Fund of
the Existing Lender; or(c)
    
    made at a time when an Event of Default is continuing.
 24.2.2
    
    The consent of the Borrower to an assignment or transfer by an Existing Lender must not be
unreasonably withheld or delayed. The Borrower will be deemed to have given its consent five
Business Days after the Existing Lender has requested it unless consent is expressly refused
by the Borrower within that time.
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24.2.3
    
    The consent of the Borrower to an assignment or transfer by an Existing Lender must not be
withheld solely because the assignment or transfer may result in an increase to the Mandatory
Cost.24.2.4
    
    An assignment will only be effective on:
 (a)
    
    receipt by the Agent (whether in the Assignment Agreement or otherwise)
of written confirmation from the New Lender (in form and substance satisfactory to
the Agent) that the New Lender will assume the same obligations to the other Finance
Parties and the other Secured Parties as it would have been under if it was an
Original Lender; and(b)
    
    the performance by the Agent of all necessary know your customer or
other similar checks under all applicable laws and regulations in relation to such
assignment to a New Lender, the completion of which the Agent shall promptly notify
to the Existing Lender and the New Lender.
 24.2.5
    
    A transfer will only be effective if the procedure set out in Clause 24.6 (Procedure for
transfer) is complied with.24.2.6
    
    If:
 (a)
    
    a Lender assigns or transfers any of its rights or obligations under the
Finance Documents or changes its Facility Office; and(b)
    
    as a result of circumstances existing at the date the assignment,
transfer or change occurs, an Obligor would be obliged to make a payment to the New
Lender or Lender acting through its new Facility Office under Clause 14 (Tax
gross-up and indemnities) or Clause 15.1 (Increased costs),
 then (unless the assignment, transfer or charge has been made in mitigation in accordance
with Clause 17 (Mitigation by the Lenders)) the New Lender or Lender acting through its
new Facility Office is only entitled to receive payment under those Clauses to the same
extent as the Existing Lender or Lender acting through its previous Facility Office would
have been if the assignment, transfer or change had not occurred.24.3
    
    Assignment to Federal Reserve BankIn addition to any other assignments or participation rights provided in this Clause 24,
each Lender may assign and pledge all or any portion of its Loans and the other
obligations owed to such Lender, without notice to or consent of any Party, to any
Federal Reserve Bank pursuant to Regulation A of the Board of Governors of the Federal
Reserve Bank and any operating circular issued by such Federal Reserve Bank; provided,
however, that, (i) no Lender shall be relieved of any of its obligations under this
Agreement as a result of any such assignment and pledge and (ii) in no event shall such
Federal Reserve Bank be considered to be a Lenderor be entitled to require the assigning
Lender to take or omit to take any action under this Agreement.24.4
    
    Assignment or transfer feeUnless the Agent otherwise agrees and excluding an assignment or transfer:
 (a)
    
    to an Affiliate of a Lender;(b)
    
    to a Related Fund; or(c)
    
    made in connection with primary syndication of the Facility,
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the New Lender shall, on the date upon which an assignment or transfer takes effect, pay
to the Agent (for its own account) a fee of £1,000.24.5
    
    Limitation of responsibility of Existing Lenders24.5.1
    
    Unless expressly agreed to the contrary, an Existing Lender makes no representation or
warranty and assumes no responsibility to a New Lender for:
 (a)
    
    the legality, validity, effectiveness, adequacy or enforceability of the
Transaction Documents, the Transaction Security or any other documents;(b)
    
    the financial condition of any Obligor;(c)
    
    the performance and observance by any Obligor or any other member of the
Group of its obligations under the Transaction Documents or any other documents; or(d)
    
    the accuracy of any statements (whether written or oral) made in or in
connection with any Transaction Document or any other document,
 and any representations or warranties implied by law are excluded.24.5.2
    
    Each New Lender confirms to the Existing Lender, the other Finance Parties and the Secured
Parties that it:
 (a)
    
    has made (and shall continue to make) its own independent investigation
and assessment of the financial condition and affairs of each Obligor and its
related entities in connection with its participation in this Agreement and has not
relied exclusively on any information provided to it by the Existing Lender or any
other Finance Party in connection with any Transaction Document or the Transaction
Security; and(b)
    
    will continue to make its own independent appraisal of the
creditworthiness of each Obligor and its related entities whilst any amount is or
may be outstanding under the Finance Documents or any Commitment is in force.
 24.5.3
    
    Nothing in any Finance Document obliges an Existing Lender to:
 (a)
    
    accept a re-transfer or reassignment from a New Lender of any of the
rights and obligations assigned or transferred under this Clause 24; or(b)
    
    support any losses directly or indirectly incurred by the New Lender by
reason of the non-performance by any Obligor of its obligations under the
Transaction Documents or otherwise.
 24.6
    
    Procedure for transfer24.6.1
    
    Subject to the conditions set out in Clause 24.2 (Conditions of assignment or transfer) a
transfer is effected in accordance with Clause 24.6.3 below when the Agent executes an
otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the
New Lender. The Agent shall, subject to Clause 24.6.2 below, as soon as reasonably
practicable after receipt by it of a duly completed Transfer Certificate appearing on its face
to comply with the terms of this Agreement and delivered in accordance with the terms of this
Agreement, execute that Transfer Certificate.24.6.2
    
    The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the
Existing Lender and the New Lender upon its completion of all know your
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customer or other checks relating to any
person that it is required to carry out in
relation to the transfer to such New Lender.
24.6.3 On the Transfer Date:
 (a)
    
    to the extent that in the Transfer Certificate the Existing Lender seeks
to transfer by novation its rights, benefits and obligations under the Finance
Documents and in respect of the Transaction Security each of the Obligors and the
Existing Lender shall be released from further obligations towards one another under
the Finance Documents and in respect of the Transaction Security and their
respective rights against one another under the Finance Documents and in respect of
the Transaction Security shall be cancelled (being the Discharged Rights and
Obligations);(b)
    
    each of the Obligors and the New Lender shall assume obligations towards
one another and/or acquire rights and benefits against one another which differ from
the Discharged Rights and Obligations only insofar as that Obligor or other member
of the Group and the New Lender have assumed and/or acquired the same in place of
that Obligor and the Existing Lender;(c)
    
    the Agent, the Arranger, the Security Agent, the New Lender and the other
Lenders shall acquire the same rights and assume the same obligations between
themselves and in respect of the Transaction Security as they would have acquired
and assumed had the New Lender been an Original Lender with the rights, and/or
obligations acquired or assumed by it as a result of the transfer and to that extent
the Agent, the Arranger, the Security Agent and the Existing Lender shall each be
released from further obligations to each other under the Finance Documents; and(d)
    
    the New Lender shall become a Party as a Lender.
 24.7
    
    Procedure for assignment24.7.1
    
    Subject to the conditions set out in Clause 24.2 (Conditions of assignment or transfer) an
assignment may be effected in accordance with Clause 24.7.3 below when the Agent executes an
otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the
New Lender. The Agent shall, subject to Clause 24.7.2 below, as soon as reasonably
practicable after receipt by it of a duly completed Assignment Agreement appearing on its face
to comply with the terms of this Agreement and delivered in accordance with the terms of this
Agreement, execute that Assignment Agreement.24.7.2
    
    The Agent shall only be obliged to execute an Assignment Agreement delivered to it by the
Existing Lender and the New Lender upon its completion of all know your customer or other
checks relating to any person that it is required to carry out in relation to the assignment
to such New Lender.24.7.3
    
    On the Transfer Date:
 (a)
    
    the Existing Lender will assign absolutely to the New Lender its rights
under the Finance Documents and in respect of the Transaction Security expressed to
be the subject of the assignment in the Assignment Agreement;(b)
    
    the Existing Lender will be released from the obligations (Relevant
Obligations) expressed to be the subject of the release in the Assignment Agreement
(and any corresponding obligations by which it is bound in respect of the
Transaction Security); and
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(c)
    
    the New Lender shall become a Party as a Lender and will be bound by
obligations equivalent to the Relevant Obligations.
 24.7.4
    
    Lenders may utilise procedures other than those set out in this Clause 24 to assign their
rights under the Finance Documents provided that they comply with the conditions set out in
Clause 24.2 (Conditions of assignment or transfer).24.8
    
    Copy of Transfer Certificate or Assignment Agreement to BorrowerThe Agent shall, as soon as reasonably practicable after it has executed a Transfer
Certificate or an Assignment Agreement, send to the Borrower a copy of that Transfer
Certificate or Assignment Agreement.24.9
    
    Disclosure of information24.9.1
    
    Any Lender may disclose to any of its Affiliates and any other person:
 (a)
    
    to (or through) whom that Lender assigns or transfers (or may potentially
assign or transfer) all or any of its rights and obligations under the Finance
Documents;(b)
    
    with (or through) whom that Lender enters into (or may potentially enter
into) any sub-participation in relation to, or any other transaction under which
payments are to be made by reference to, the Finance Documents or any Obligor; or(c)
    
    for whose benefit that Lender charges, assigns or otherwise creates
Security (or may do so) pursuant to Clause 24.10 (Security interests over Lenders
rights); or(d)
    
    to whom, and to the extent that, information is required to be disclosed
by any applicable law or regulation; and
 24.9.2
    
    Any Finance Party may disclose to a rating agency or its professional advisers, or (with the
consent of the Borrower) any other person, any information about any Obligor, the Group and
the Finance Documents as that Lender or other Finance Party shall consider appropriate if in
relation to paragraphs (a)(i) and (ii) above, the person to whom the information is to be
given has entered into a Confidentiality Undertaking (unless such information was publicly
available at the time disclosed).24.9.3
    
    Any Confidentiality Undertaking signed by a Finance Party pursuant to this Clause 24.9 shall
supersede any prior confidentiality undertaking signed by such Finance Party for the benefit
of any member of the Group.24.9.4
    
    Notwithstanding any of the provisions of this Agreement, the Obligors and the Finance
Parties hereby agree that each Party and each employee, representative or other agent of each
Party may disclose to any and all persons, without limitation of any kind, the tax structure
and tax treatment(in each case within the meaning of the US Treasury Regulation Section
2.6011-4) of the Facility and any materials of any kind (including opinions or other tax
analyses) that are provided to any of the foregoing relating to such tax structure and tax
treatment.24.10
    
    Security Interests over Lenders rights24.10.1
    
    In addition to the other rights provided to Lenders under this Clause 24, each Lender may
without consulting with or obtaining consent from any Obligor, at any time charge, assign or
otherwise create Security in or over (whether by way of collateral or otherwise) all or any of
its rights under any Finance Document to secure obligations of that Lender including, without
limitation:
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(a)
    
    any charge, assignment or other Security to secure obligations to a
federal reserve or central bank; and(b)
    
    in the case of any Lender which is a fund, any charge, assignment or
other Security granted to any holders (or trustee or representatives of holders) of
obligations owed, or securities issued, by that Lender as security for those
obligations or securities,
 24.10.2
    
    except that no such charge, assignment or Security shall:
 (a)
    
    release a Lender from any of its obligations under the Finance Documents
or substitute the beneficiary of the relevant charge, assignment or Security for the
Lender as a party to any of the Finance Documents; or(b)
    
    require any payments to be made by an Obligor or grant to any person any
more extensive rights than those required to be made or granted to the relevant
Lender under the Finance Documents.
 25
    
    Changes to the Obligors25.1
    
    Assignment and transfers by ObligorsNo Obligor or any other member of the Group may assign any of its rights or transfer any
of its rights or obligations under the Finance Documents.25.2
    
    Additional Obligors25.2.1
    
    Subject to compliance with the provisions of Clause 20.9 (Know your customer checks), the
Borrower may request that any of its wholly owned Subsidiaries become an Obligor.25.2.2
    
    The Borrower shall procure that any entity that becomes a member of the Group shall, as soon
as possible after becoming a member of the Group, become an Additional Obligor and shall
accede to the Subordination Deed.25.2.3
    
    A member of the Group shall become an Additional Obligor if:
 (a)
    
    the Borrower and the proposed Obligor deliver to the Agent a duly
completed and executed Accession Letter; and(b)
    
    the Agent has received all of the documents and other evidence listed in
Part 2 (Conditions precedent) in relation to that Additional Obligor, each in form
and substance satisfactory to the Agent.
 25.2.4
    
    The Agent shall notify the Borrower and the Lenders promptly upon being satisfied that it
has received (in form and substance satisfactory to it) all the documents and other evidence
listed in Part 2 (Conditions precedent).25.2.5
    
    If any legal prohibition would prevent or limit a Subsidiarys ability to become an
Additional Obligor and/or to enter into Transaction Security, the Obligors shall use their
reasonable endeavours lawfully to overcome the prohibition.25.3
    
    Repetition of RepresentationsDelivery of an Accession Letter constitutes confirmation by the relevant Subsidiary that
the representations and warranties referred to in Clause 19.37 (Times when
representations made) are true and correct in relation to it as at the date of delivery
as if made by reference to the facts and circumstances then existing.
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25.4
    
    Resignation and release of security on disposal25.4.1
    
    In this clause, Third Party Disposalmeans the disposal of an Obligor to a person which is
not a member of the Group where that disposal is permitted under Clause 22.13 (Disposals) or
made with the approval of the Majority Lenders (and the Borrower has confirmed this is the
case).25.4.2
    
    If the Borrower or an Obligor is or is proposed to be the subject of a Third Party Disposal
then:
 (a)
    
    where the Borrower or that Obligor created Transaction Security over any
of its assets or business in favour of the Security Agent, or Transaction Security
in favour of the Security Agent was created over the shares (or equivalent) of the
Borrower or that Obligor, the Security Agent may, at the cost and request of the
Borrower, release those assets, business or shares (or equivalent) and issue
certificates of non-crystallisation;(b)
    
    the resignation of the Borrower or that Obligor and related release of
Transaction Security referred to in Clause 25.4.2(a) above shall not become
effective until all Disposal Proceeds resulting from that Third Party Disposal have
been irrevocably paid to the Agent in accordance with Clause 8 (Mandatory
Prepayment); and(c)
    
    if the disposal of the Borrower or that Obligor is not made, the release
of Transaction Security referred to in Clause 25.4.2(a) above shall have no effect
and the obligations of the Borrower or Obligor and the Transaction Security created
or intended to be created by or over the Borrower or that Obligor shall continue in
full force and effect.
 26
    
    Role Of The Agent, The Arranger, The Security Agent And Others26.1
    
    Appointment of the Agent26.1.1
    
    The Arranger and each of the Lenders appoints the Agent to act as its agent under and in
connection with the Finance Documents.26.1.2
    
    The Arranger and each of the Lenders authorises the Agent to exercise the rights, powers,
authorities and discretions specifically given to the Agent under or in connection with the
Finance Documents together with any other incidental rights, powers, authorities and
discretions.26.2
    
    Duties of the Agent26.2.1
    
    The Agent shall promptly forward to a Party the original or a copy of any document which is
delivered to the Agent for that Party by any other Party excluding, for the avoidance of
doubt, any Fee Letter.26.2.2
    
    Except where a Finance Document specifically provides otherwise, the Agent is not obliged to
review or check the adequacy, accuracy or completeness of any document it forwards to another
Party.26.2.3
    
    If the Agent receives notice from a Party referring to this Agreement, describing a Default
and stating that the circumstance described is a Default, it shall promptly notify the other
Finance Parties. The Agent is not obliged to monitor or enquire whether a Default has
occurred.26.2.4
    
    If the Agent is aware of the non-payment of any principal, interest, commitment fee or other
fee payable to a Finance Party (other than the Agent, the Arranger or the
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Security Agent) under this Agreement it shall promptly notify the other Finance Parties.26.2.5
    
    The Agents duties under the Finance Documents are solely mechanical and administrative in
nature.26.3
    
    Role of the ArrangerExcept as specifically provided in the Finance Documents, the Arranger has no obligations
of any kind to any other Party under or in connection with any Finance Document.26.4
    
    No fiduciary duties26.4.1
    
    Nothing in this Agreement constitutes the Agent and/or the Arranger as a trustee or
fiduciary of any other person.26.4.2
    
    None of the Agent, the Security Agent or the Arranger shall be bound to account to any
Lender for any sum or the profit element of any sum received by it for its own account.26.5
    
    Business with the GroupThe Agent, the Security Agent and the Arranger may accept deposits from, lend money to
and generally engage in any kind of banking or other business with any Obligor or any
member of the Group.26.6
    
    Rights and discretions26.6.1
    
    The Agent may rely on:
 (a)
    
    any representation, notice or document believed by it to be genuine,
correct and appropriately authorised; and(b)
    
    any statement made by a director, authorised signatory or employee of any
person regarding any matters which may reasonably be assumed to be within his
knowledge or within his power to verify.
 26.6.2
    
    The Agent may assume (unless it has received notice to the contrary in its capacity as agent
for the Lenders) that:
 (a)
    
    no Default has occurred (unless it has actual knowledge of a Default
arising under Clause 23.1 (Non-payment));(b)
    
    any right, power, authority or discretion vested in any Party or the
Majority Lenders has not been exercised; and(c)
    
    any notice or request made by the Borrower (other than a Utilisation
Request or Selection Notice) is made on behalf of and with the consent and knowledge
of all the Obligors.
 26.6.3
    
    The Agent may engage, pay for and rely on the advice or services of any lawyers,
accountants, actuaries or other experts.26.6.4
    
    The Agent may act in relation to the Finance Documents through its personnel and agents.26.6.5
    
    The Agent may disclose to any other Party any information it reasonably believes it has
received as agent under the Finance Documents.
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26.6.6
    
    The Agent may execute on behalf of the Finance Parties any document expressed by any Finance
Document to be executed by the Agent on their behalf.26.6.7
    
    Notwithstanding any other provision of any Finance Document to the contrary, none of the
Agent or the Arranger is obliged to do or omit to do anything if it would or might in its
reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary
duty or duty of confidentiality.26.7
    
    Majority Lenders instructions26.7.1
    
    Unless a contrary indication appears in a Finance Document, the Agent shall (i) exercise any
right, power, authority or discretion vested in it as Agent in accordance with any
instructions given to it by the Majority Lenders (or, if so instructed by the Majority
Lenders, refrain from exercising any right, power, authority or discretion vested in it as
Agent) and (ii) not be liable for any act (or omission) if it acts (or refrains from taking
any action) in accordance with an instruction of the Majority Lenders.26.7.2
    
    Unless a contrary indication appears in a Finance Document, any instructions given by the
Majority Lenders will be binding on all the Finance Parties other than the Security Agent.26.7.3
    
    Any Lender may by notice to the Agent divide its Loans or Commitments into separate amounts
to reflect sub-participation or similar transactions and may require the Agent to count such
separate amounts individually in calculating the composition of the Majority Lenders.26.7.4
    
    The Agent may refrain from acting in accordance with the instructions of the Majority
Lenders (or, if appropriate, the Lenders) until it has received such security as it may
require for any cost, loss or liability (together with any associated VAT) which it may incur
in complying with the instructions.26.7.5
    
    In the absence of instructions from the Majority Lenders, (or, if appropriate, the Lenders),
the Agent may act (or refrain from taking action) as it considers to be in the best interest
of the Lenders.26.7.6
    
    The Agent is not authorised to act on behalf of a Lender (without first obtaining that
Lenders consent) in any legal or arbitration proceedings relating to any Finance Document.
This Clause 26.7 shall not apply to any legal or arbitration proceeding relating to the
perfection, preservation or protection of rights under the Transaction Security Documents or
enforcement of the Transaction Security or Transaction Security Documents.26.8
    
    Responsibility for documentationNeither the Agent nor the Arranger:
 (a)
    
    is responsible for the adequacy, accuracy and/or completeness of any
information (whether oral or written) supplied by the Agent, an Arranger, an Obligor
or any other person given in or in connection with any Finance Document, the
Information Memorandum or the Report or the transactions contemplated in the Finance
Documents; or(b)
    
    is responsible for the legality, validity, effectiveness, adequacy or
enforceability of any Finance Document or the Transaction Security or any other
agreement, arrangement or document entered into, made or executed in anticipation of
or in connection with any Finance Document or the Transaction Security.
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26.9
    
    Exclusion of liability26.9.1
    
    Without limiting Clause 26.9.2 below and without prejudice to the provisions of Clause 29.13
(Disruption to the Payment Systems etc.), the Agent will not be liable for any action taken by
it under or in connection with any Finance Document or the Transaction Security, unless
directly caused by its gross negligence or wilful misconduct.26.9.2
    
    No Party (other than the Agent) may take any proceedings against any officer, employee or
agent of the Agent in respect of any claim it might have against the Agent, or in respect of
any act or omission of any kind by that officer, employee or agent in relation to any Finance
Document or any Transaction Document and any officer, employee or agent of the Agent, may rely
on this Clause 26.9 subject to Clause 1.8 (Third party rights) and the provisions of the Third
Parties Act.26.9.3
    
    The Agent will not be liable for any delay (or any related consequences) in crediting an
account with an amount required under the Finance Documents to be paid by the Agent if the
Agent has taken all necessary steps as soon as reasonably practicable to comply with the
regulations or operating procedures of any recognised clearing or settlement system used by
the Agent for that purpose.26.9.4
    
    Nothing in this Agreement shall oblige the Agent or the Arranger to carry out any know your
customer or other checks in relation to any person on behalf of any Lender and each Lender
confirms to the Agent and the Arranger that it is solely responsible for any such checks it is
required to carry out and that it may not rely on any statement in relation to such checks
made by the Agent or the Arranger.26.10
    
    Lenders indemnity to the AgentEach Lender shall (in proportion to its share of the Total Commitments or, if the Total
Commitments are then zero, to its share of the Total Commitments immediately prior to
their reduction to zero) indemnify the Agent, within three Business Days of demand,
against any cost, loss or liability (including for negligence or any other category of
liability whatsoever) incurred by the Agent (otherwise than by reason of the Agents
gross negligence or wilful misconduct) (or in the case of any costs, loss or liability
pursuant to Clause 29.13 (Disruption to Payment Systems etc.) notwithstanding the Agents
negligence, gross negligence or any other category of liability whatsoever but not
including any claim based on the fraud of the Agent) in acting as Agent under the Finance
Documents (unless the Agent has been reimbursed by an Obligor pursuant to a Finance
Document).26.11
    
    Resignation of the Agent26.11.1
    
    The Agent may resign and appoint one of its Affiliates acting through an office in the
United Kingdom as successor by giving notice to the Lenders and the Borrower.26.11.2
    
    Alternatively the Agent may resign by giving notice to the Lenders and the Borrower, in
which case the Majority Lenders (after consultation with the Borrower) may appoint a successor
Agent.26.11.3
    
    If the Majority Lenders have not appointed a successor Agent in accordance with Clause
26.11.2 above within 30 days after notice of resignation was given, the Agent (after
consultation with the Borrower) may appoint a successor Agent (acting through an office in the
United Kingdom).26.11.4
    
    The retiring Agent shall, at its own cost, make available to the successor Agent such
documents and records and provide such assistance as the successor Agent
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may reasonably request for the purposes of performing its functions as Agent under the
Finance Documents.26.11.5
    
    The Agents resignation notice shall only take effect upon the appointment of a successor.26.11.6
    
    Upon the appointment of a successor, the retiring Agent shall be discharged from any
further obligation in respect of the Finance Documents but shall remain entitled to the
benefit of this Clause 26. Its successor and each of the other Parties shall have the same
rights and obligations amongst themselves as they would have had if such successor had been an
original Party.26.11.7
    
    After consultation with the Borrower, the Majority Lenders may, by notice to the Agent,
require it to resign in accordance with Clause 26.11.2 above. In this event, the Agent shall
resign in accordance with Clause 26.11.2 above.26.12
    
    Confidentiality26.12.1
    
    In acting as agent for the Finance Parties, the Agent shall be regarded as acting through
its agency division which shall be treated as a separate entity from any other of its
divisions or departments.26.12.2
    
    If information is received by another division or department of the Agent, it may be
treated as confidential to that division or department and the Agent shall not be deemed to
have notice of it.26.12.3
    
    Notwithstanding any other provision of any Finance Document to the contrary, neither the
Agent nor the Arranger are obliged to disclose to any other person (i) any confidential
information, or (ii) any other information if the disclosure would or might in its reasonable
opinion constitute a breach of any law or a breach of a fiduciary duty.26.13
    
    Relationship with the Lenders26.13.1
    
    The Agent may treat each Lender as a Lender, entitled to payments under this Agreement and
acting through its Facility Office unless it has received not less than five Business Days
prior notice from that Lender to the contrary in accordance with the terms of this Agreement.26.13.2
    
    Each Lender shall supply the Agent with any information required by the Agent in order to
calculate the Mandatory Cost in accordance with Schedule 4 (Mandatory Cost Formula).26.13.3
    
    Each Lender shall supply the Agent with any information that the Security Agent may
reasonably specify (through the Agent) as being necessary or desirable to enable the Security
Agent to perform its functions as Security Agent. Each Lender shall deal with the Security
Agent exclusively through the Agent and shall not deal directly with the Security Agent.26.14
    
    Credit appraisal by the LendersWithout affecting the responsibility of any Obligor for information supplied by it or on
its behalf in connection with any Finance Document, each Lender confirms to the Agent and
the Arranger that it has been, and will continue to be, solely responsible for making its
own independent appraisal and investigation of all risks arising under or in connection
with any Finance Document including but not limited to:
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(a)
    
    the financial condition, status and nature of each Obligor and each
member of the Group;(b)
    
    the legality, validity, effectiveness, adequacy or enforceability of any
Finance Document and the Transaction Security and any other agreement, arrangement
or document entered into, made or executed in anticipation of, under or in
connection with any Finance Document or the Transaction Security;(c)
    
    whether that Secured Party has recourse, and the nature and extent of
that recourse, against any Party or any of its respective assets under or in
connection with any Finance Document, the Transaction Security, the transactions
contemplated by the Finance Documents or any other agreement, arrangement or
document entered into, made or executed in anticipation of, under or in connection
with any Finance Document;(d)
    
    the adequacy, accuracy and/or completeness of the Information Memorandum,
the Report or any other information provided by the Agent, any Party or by any other
person under or in connection with any Finance Document, the transactions
contemplated by the Finance Documents or any other agreement, arrangement or
document entered into, made or executed in anticipation of, under or in connection
with any Finance Document; and(e)
    
    the right or title of any person in or to, or the value or sufficiency of
any part of the Charged Property, the priority of any of the Transaction Security or
the existence of any Security affecting the Charged Property.
 26.15
    
    Reference Banks26.15.1
    
    If a Lender is a Reference Bank (or an Affiliate of a Reference Bank) but later ceases to
be a Lender, the Agent shall (in consultation with the Borrower) appoint another Lender or
another Affiliate of a Lender to replace that Reference Bank.26.15.2
    
    If a Reference Bank which was not a Lender subsequently becomes a Lender, the Agent may (in
consultation with the Borrower) appoint that Lender to replace any Reference Bank which is not
then either a Lender or an Affiliate of a Lender.26.16
    
    Deduction from amounts payable by the AgentIf any Party owes an amount to the Agent under the Finance Documents the Agent may, after
giving notice to that Party, deduct an amount not exceeding that amount from any payment
to that Party which the Agent would otherwise be obliged to make under the Finance
Documents and apply the amount deducted in or towards satisfaction of the amount owed.
For the purposes of the Finance Documents that Party shall be regarded as having received
any amount so deducted.26.17
    
    Reliance and engagement lettersEach Finance Party and Secured Party confirms that each Arranger and the Agent has
authority to accept on its behalf (and ratifies the acceptance on its behalf of any
letters or reports already accepted by an Arranger or Agent) the terms of any reliance
letter or engagement letters relating to the Report or letters provided by accountants or
actuaries in connection with the Finance Documents or the transactions contemplated in
the Finance Documents (including any net asset letter in connection with the financial
assistance procedures) and to bind it in respect of those reports or letters and to sign
such letters on its behalf and further confirms that it accepts the terms and
qualifications set out in such letters.
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26.18
    
    Appointment of Security Agent26.18.1
    
    Each other Finance Party irrevocably appoints the Security Agent as its agent and trustee
on the terms set out in Schedule 12 (Security Agent).26.18.2
    
    Each Obligor and each other Finance Party agrees to the terms set out in Schedule 12
(Security Agent). In the event of any conflict between the terms of Schedule 12 (Security
Agent) and any other Finance Document, the terms of Schedule 12 (Security Agent) shall
prevail.26.19
    
    Release of Security26.19.1
    
    The Security Agent may at its sole discretion and without reference to any other Finance
Party take such action as it deems necessary or advisable to release any assets from the
Security constituted by the Transaction Security Documents to the extent that their disposal
or release is:
 (a)
    
    permitted or required by the terms of this Agreement including pursuant
to any instructions given to it in accordance with Clause 26.20 (Instructions); or(b)
    
    permitted or required by the original form of any other Finance Document
and will not result or could not reasonably be expected to result in any breach of
the terms of this Agreement.
 26.19.2
    
    If:
 (a)
    
    all of the shares in the capital of any member of the Group are to be
disposed of, which would result in any Obligor ceasing to be a member of the Group;
or(b)
    
    any asset which is the subject of a Transaction Security Document is to
be disposed of to a person outside (and which will remain outside) the Group,
 and in any such case:
 (i)
    
    the Majority Lenders agree to such disposal; or(ii)
    
    the Security Agent has received instructions from
the relevant Finance Parties that comply with Clause 26.20
(Instructions) instructing it to release the relevant Security and/or
Guarantees over such asset; or(iii)
    
    the disposal is permitted by the terms of the
relevant Finance Document and will not result or could not reasonably be
expected to result in any breach of any of the terms of this Agreement;
or(iv)
    
    the disposal is being made at the request of the
Security Agent in circumstances where any Security created by the
Transaction Security Documents has become enforceable; or(v)
    
    the disposal is being effected by enforcement of
a Transaction Security Document,
 then, in the case of a disposal contemplated by paragraph (a) above, the Security
provided by that Obligor over its assets under the Transaction Security Documents and any
related guarantees given by, or in respect of, such Obligor will be released and in the
case of a disposal contemplated by paragraph (b) above those assets will be released from
such Security, in each case at the expense of the relevant Obligor.
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26.19.3
    
    The Security Agent is authorised by each other Finance Party to execute (on behalf of
itself and each such Finance Party) all releases of any Security or any guarantee resulting
from any disposal contemplated in Clauses 26.19.1 and 26.19.2 above, without the need for any
further referral to, or authority from, any other Party, including any formal release of any
asset which the Security Agent in its absolute discretion considers necessary or desirable in
connection with that disposal.26.20
    
    Instructions:26.20.1
    
    The Security Agent shall act in accordance with:
 (a)
    
    the terms of this Agreement; or(b)
    
    joint instructions received from, or on behalf of, the Majority Lenders.
 26.20.2
    
    Any release of any Security constituted by the Transaction Security Documents or any
release of any claim arising by virtue of any guarantee given under the Finance Documents,
shall (other than as provided in Clause 26.19 (Release of Security)) require the prior written
consent of, or on behalf of, the Majority Lenders).26.20.3
    
    The Security Agent will not be liable to any other Finance Party for any act (or omission)
if it acts (or refrains from taking any action) in accordance with the terms of this Agreement
even if such action would otherwise cause a breach of any Finance Document. If there is any
conflict between the provisions of this Agreement and any other Finance Document with regard
to instructions or other matters affecting the Security Agent, this Agreement will prevail.26.20.4
    
    Any instructions given to the Security Agent in accordance with the terms of this Agreement
will be binding on all other Finance Parties who shall not be entitled to object to anything
done or omitted to be done as a result of such instructions.26.20.5
    
    In the absence of instructions, the Security Agent may act (or refrain from taking action)
in such manner as it considers to be in the best interests of the Finance Parties but is not
authorised to act on behalf of another Finance Party (without first obtaining their consent)
in any legal or arbitration proceedings relating to any Finance Document.26.20.6
    
    The Security Agent may refrain from acting in accordance with any instructions until it has
received such Security as it may require for any cost, loss or liability (together with any
associated Tax) which it may incur in complying with the instructions.27
    
    Conduct Of Business By The Finance PartiesNo provision of any Finance Document will:
 (a)
    
    interfere with the right of any Finance Party to arrange its affairs (tax
or otherwise) in whatever manner it thinks fit;(b)
    
    oblige any Finance Party to investigate or claim any credit, relief,
remission or repayment available to it or the extent, order and manner of any claim;
or(c)
    
    oblige any Finance Party to disclose any information relating to its
affairs (tax or otherwise) or any computations in respect of Tax.
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28
    
    Sharing Among The Finance Parties28.1
    
    Payments to Finance PartiesIf a Finance Party (Recovering Finance Party) receives or recovers any amount from an
Obligor other than in accordance with Clause 29 (Payment mechanics) and applies that
amount to a payment due under the Finance Documents then:
 (a)
    
    the Recovering Finance Party shall, within three Business Days, notify
details of the receipt or recovery, to the Agent;(b)
    
    the Agent shall determine whether the receipt or recovery is in excess of
the amount the Recovering Finance Party would have been paid had the receipt or
recovery been received or made by the Agent and distributed in accordance with
Clause 29 (Payment mechanics), without taking account of any Tax which would be
imposed on the Agent in relation to the receipt, recovery or distribution; and(c)
    
    the Recovering Finance Party shall, within three Business Days of demand
by the Agent, pay to the Agent an amount (Sharing Payment) equal to such receipt or
recovery less any amount which the Agent determines may be retained by the
Recovering Finance Party as its share of any payment to be made, in accordance with
Clause 29.8 (Partial payments).
 28.2
    
    Redistribution of paymentsThe Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor
and distribute it between the Finance Parties (other than the Recovering Finance Party)
in accordance with Clause 29.8 (Partial payments).28.3
    
    Recovering Finance Partys rights28.3.1
    
    On a distribution by the Agent under Clause 28.2 (Redistribution of payments), the
Recovering Finance Party will be subrogated to the rights of the Finance Parties which have
shared in the redistribution.28.3.2
    
    If and to the extent that the Recovering Finance Party is not able to rely on its rights
under Clause 28.3.1 above, the relevant Obligor shall be liable to the Recovering Finance
Party for a debt equal to the Sharing Payment which is immediately due and payable.28.4
    
    Reversal of redistributionIf any part of the Sharing Payment received or recovered by a Recovering Finance Party
becomes repayable and is repaid by that Recovering Finance Party, then:
 (a)
    
    each Finance Party which has received a share of the relevant Sharing
Payment pursuant to Clause 28.2 (Redistribution of payments) shall, upon request of
the Agent, pay to the Agent for account of that Recovering Finance Party an amount
equal to the appropriate part of its share of the Sharing Payment (together with an
amount as is necessary to reimburse that Recovering Finance Party for its proportion
of any interest on the Sharing Payment which that Recovering Finance Party is
required to pay); and(b)
    
    that Recovering Finance Partys rights of subrogation in respect of any
reimbursement shall be cancelled and the relevant Obligor will be liable to the
reimbursing Finance Party for the amount so reimbursed.
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28.5
    
    Exceptions28.5.1
    
    This Clause 28 shall not apply to the extent that the Recovering Finance Party would not,
after making any payment pursuant to this Clause 28, have a valid and enforceable claim
against the relevant Obligor except where that would be inconsistent with the terms of the
Subordination Deed.28.5.2
    
    A Recovering Finance Party is not obliged to share with any other Finance Party any amount
which the Recovering Finance Party has received or recovered as a result of taking legal or
arbitration proceedings, if:
 (a)
    
    it notified the other Finance Party of the legal or arbitration
proceedings; and(b)
    
    the other Finance Party had an opportunity to participate in those legal
or arbitration proceedings but did not do so as soon as reasonably practicable
having received notice and did not take separate legal or arbitration proceedings.
 29
    
    Payment Mechanics29.1
    
    Payments to the Agent29.1.1
    
    On each date on which an Obligor or a Lender is required to make a payment under a Finance
Document, that Obligor or Lender shall (and the Borrower shall ensure that such Obligor will)
make the same available to the Agent (unless a contrary indication appears in a Finance
Document) for value on the due date at the time and in such funds specified by the Agent as
being customary at the time for settlement of transactions in the relevant currency in the
place of payment.29.1.2
    
    Payment shall be made to such account with such bank as the Agent specifies.29.2
    
    Distributions by the AgentEach payment received by the Agent under the Finance Documents for another Party shall,
subject to Clause 29.3 (Distributions to an Obligor) and Clause 29.4 (Clawback) be made
available by the Agent as soon as practicable after receipt to the Party entitled to
receive payment in accordance with this Agreement (in the case of a Lender, for the
account of its Facility Office), to such account as that Party may notify to the Agent by
not less than five Business Days notice.29.3
    
    Distributions to an ObligorThe Agent may (with the consent of the Obligor or in accordance with Clause 30 (Set-off))
apply any amount received by it for that Obligor in or towards payment (on the date and
in the currency and funds of receipt) of any amount due from that Obligor under the
Finance Documents or in or towards purchase of any amount of any currency to be so
applied.29.4
    
    Clawback29.4.1
    
    Where a sum is to be paid to the Agent under the Finance Documents for another Party, the
Agent is not obliged to pay that sum to that other Party (or to enter into or perform any
related exchange contract) until it has been able to establish to its satisfaction that it has
actually received that sum.29.4.2
    
    If the Agent pays an amount to another Party and it proves to be the case that the Agent had
not actually received that amount, then the Party to whom that amount (or the proceeds of any
related exchange contract) was paid by the Agent shall on demand refund the same to the Agent
together with interest on that amount from
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the date of payment to the date of receipt by
the Agent, calculated by the Agent to reflect
its cost of funds.29.5
    
    Proceeds of enforcementSubject to the payment of any claim ranking in priority as a matter of law, the proceeds
of enforcement of the Security constituted by the Transaction Security Documents shall be
paid to the Security Agent and those proceeds (together with all other amounts paid to
the Security Agent in accordance with the terms of this Agreement or any other Finance
Document) shall be applied in the following order:
 (a)
    
    First, in satisfaction of all costs, charges, expenses (including legal
expenses) and liabilities properly incurred by the Security Agent or any Insolvency
Representative appointed under the Transaction Security Documents or their attorneys
or agents and of the remuneration of such Insolvency Representative (and all
interest on such sums as provided in the Finance Documents);(b)
    
    Second, in payment of all reasonable costs and expenses (including legal
expenses) properly incurred by or on behalf of any other Finance Party in connection
with such enforcement;(c)
    
    Third, in payment to the Agent for application in or towards the
discharge of the Loans on a pro rata basis; and(d)
    
    Fourth, any surplus to such persons who may be entitled to them.
 29.6
    
    WaterfallNo such proceeds or amounts shall be applied in payment of any amounts specified in any
of the paragraphs in Clause 29.5 (Proceeds of Enforcement) until all amounts specified in
any earlier paragraph have been paid in full.29.7
    
    Good dischargeAn acknowledgement of receipt signed by the relevant person to whom payments are to be
made under Clause 29.5 (Proceeds of Enforcement) shall be a good discharge of the
Security Agent.29.8
    
    Partial payments29.8.1
    
    If the Agent receives a payment for application against amounts due in respect of any
Finance Documents that is insufficient to discharge all the amounts then due and payable by an
Obligor under those Finance Documents, the Agent shall apply that payment towards the
obligations of that Obligor under those Finance Documents in the following order:
 (a)
    
    first, in or towards payment pro rata of any unpaid fees, costs and
expenses of the Agent under the Finance Documents;(b)
    
    secondly, in or towards payment of any accrued interest, fee or
commission due but unpaid under this Agreement;(c)
    
    thirdly, in or towards payment of any principal amount due but unpaid
under this Agreement; and(d)
    
    fourthly, in or towards payment pro rata of any other sum due but unpaid
under the Finance Documents.
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29.8.2
    
    The Agent shall, if so directed by the Majority Lenders, vary the order set out in
paragraphs (a) to (d) above.29.8.3
    
    Clauses 29.8.1 and 29.8.2 above will override any appropriation made by an Obligor.29.9
    
    No set-off by ObligorsAll payments to be made by an Obligor under the Finance Documents shall be calculated and
be made without (and free and clear of any deduction for) set-off or counterclaim.29.10
    
    Business Days29.10.1
    
    Any payment which is due to be made on a day that is not a Business Day shall be made on
the next Business Day in the same calendar month (if there is one) or the preceding Business
Day (if there is not).29.10.2
    
    During any extension of the due date for payment of any principal or Unpaid Sum under this
Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the
original due date.29.11
    
    Currency of account29.11.1
    
    Subject to Clauses 29.11.2 to 29.11.5 below, the Base Currency is the currency of account
and payment for any sum due from an Obligor under any Finance Document.29.11.2
    
    A repayment of a Loan or Unpaid Sum or a part of a Loan or Unpaid Sum shall be made in the
currency in which that Loan or Unpaid Sum is denominated on its due date.29.11.3
    
    Each payment of interest shall be made in the currency in which the sum in respect of which
the interest is payable was denominated when that interest accrued.29.11.4
    
    Each payment in respect of costs, expenses or Taxes shall be made in the currency in which
the costs, expenses or Taxes are incurred.29.11.5
    
    Any amount expressed to be payable in a currency other than the Base Currency shall be paid
in that other currency.29.12
    
    Change of currency29.12.1
    
    Unless otherwise prohibited by law, if more than one currency or currency unit are at the
same time recognised by the central bank of any country as the lawful currency of that
country, then:
 (a)
    
    any reference in the Finance Documents to, and any obligations arising
under the Finance Documents in, the currency of that country shall be translated
into, or paid in, the currency or currency unit of that country designated by the
Agent (after consultation with the Borrower); and(b)
    
    any translation from one currency or currency unit to another shall be at
the official rate of exchange recognised by the central bank for the conversion of
that currency or currency unit into the other, rounded up or down by the Agent
(acting reasonably).
 29.12.2
    
    If a change in any currency of a country occurs, this Agreement will, to the extent the
Agent (acting reasonably and after consultation with the Borrower) specifies to be necessary,
be amended to comply with any generally accepted conventions and
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market practice in the London interbank market and
otherwise to reflect the change in currency.29.13
    
    Disruption to Payment Systems etc.If either the Agent determines (in its discretion) that a Disruption Event has occurred
or the Agent is notified by the Borrower that a Disruption Event has occurred:
 (a)
    
    the Agent may, and shall if requested to do so by the Borrower, consult
with the Borrower with a view to agreeing with the Borrower such changes to the
operation or administration of the Facility as the Agent may deem necessary in the
circumstances;(b)
    
    the Agent shall not be obliged to consult with the Borrower in relation
to any changes mentioned in paragraph (a) if, in its opinion, it is not practicable
to do so in the circumstances and, in any event, shall have no obligation to agree
to such changes;(c)
    
    the Agent may consult with the Finance Parties in relation to any changes
mentioned in paragraph (a) but shall not be obliged to do so if, in its opinion, it
is not practicable to do so in the circumstances;(d)
    
    any such changes agreed upon by the Agent and the Borrower shall (whether
or not it is finally determined that a Disruption Event has occurred) be binding
upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of
the Finance Documents notwithstanding the provisions of Clause 35 (Amendments and
Waivers);(e)
    
    the Agent shall not be liable for any damages, costs or losses whatsoever
(including, without limitation for negligence, gross negligence or any other
category of liability whatsoever but not including any claim based on the fraud of
the Agent) arising as a result of its taking, or failing to take, any actions
pursuant to or in connection with this Clause 29.13; and(f)
    
    the Agent shall notify the Finance Parties of all changes agreed pursuant
to paragraph (d) above.
 30
    
    Set-OffA Finance Party may set off any matured obligation due from an Obligor under the
Finance Documents (to the extent beneficially owned by that Finance Party) against any
matured obligation owed by that Finance Party to that Obligor, regardless of the place of
payment, booking branch or currency of either obligation. If the obligations are in
different currencies, the Finance Party may convert either obligation at a market rate of
exchange in its usual course of business for the purpose of the set-off. No security
interest is created by this Clause 30.31
    
    Notices31.1
    
    Communications in writingAny communication to be made under or in connection with the Finance Documents shall be
made in writing and, unless otherwise stated, may be made by fax or letter.
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31.2
    
    Addresses31.2.1
    
    The address and fax number (and the department or officer, if any, for whose attention the
communication is to be made) of each Party for any communication or document to be made or
delivered under or in connection with the Finance Documents is:
 (a)
    
    in the case of the Borrower, that identified with its name below;(b)
    
    in the case of each Lender or any other Obligor, that notified in writing
to the Agent on or prior to the date on which it becomes a Party; and(c)
    
    in the case of the Agent or the Security Agent, that identified with its
name below,or any substitute address, fax number or department or officer as the Party may notify to
the Agent (or the Agent may notify to the other Parties, if a change is made by the
Agent) by not less than five Business Days notice.
 31.3
    
    Delivery31.3.1
    
    Any communication or document made or delivered by one person to another under or in
connection with the Finance Documents will only be effective:
 (a)
    
    if by way of fax, when received in legible form; or(b)
    
    if by way of letter, when it has been left at the relevant address or
five Business Days after being deposited in the post postage prepaid in an envelope
addressed to it at that address,and, if a particular department or officer is specified as part of its address details
provided under Clause 31.2 (Addresses), if addressed to that department or officer.
 31.3.2
    
    Any communication or document to be made or delivered to the Agent or the Security Agent
will be effective only when actually received by the Agent or Security Agent and then only if
it is expressly marked for the attention of the department or officer identified with the
Agents or Security Agents signature below (or any substitute department or officer as the
Agent or Security Agent shall specify for this purpose).31.3.3
    
    All notices from or to an Obligor shall be sent through the Agent.31.3.4
    
    Any communication or document made or delivered to the Borrower in accordance with this
Clause 31 will be deemed to have been made or delivered to each of the Obligors or any other
member of the Group party to a Finance Document.31.4
    
    Notification of address and fax numberPromptly upon receipt of notification of an address and fax number or change of address
or fax number pursuant to Clause 31.2 (Addresses) or changing its own address or fax
number, the Agent shall notify the other Parties.31.5
    
    Electronic communication31.5.1
    
    Any communication to be made between the Agent or the Security Agent and another Finance
Party under or in connection with the Finance Documents may be made by electronic mail or
other electronic means, if the Agent, the Security Agent and the relevant Finance Party:
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(a)
    
    agree that, unless and until notified to the contrary, this is to be an
accepted form of communication;(b)
    
    notify each other in writing of their electronic mail address and/or any
other information required to enable the sending and receipt of information by that
means; and(c)
    
    notify each other of any change to their address or any other such
information supplied by them.
 31.5.2
    
    Any electronic communication made between the Agent or the Security Agent and a Finance
Party will be effective only when actually received in readable form and in the case of any
electronic communication made by a Finance Party to the Agent or the Security Agent only if it
is addressed in such a manner as the Agent or Security Agent shall specify for this purpose.31.6
    
    Use of websites31.6.1
    
    The Borrower may satisfy its obligation under this Agreement to deliver any information in
relation to those Lenders (Website Lenders) who accept this method of communication by posting
this information onto an electronic website designated by the Borrower and the Agent
(Designated Website) if:
 (a)
    
    the Agent expressly agrees (after consultation with each of the Lenders)
that it will accept communication of the information by this method;(b)
    
    both the Borrower and the Agent are aware of the address of and any
relevant password specifications for the Designated Website; and(c)
    
    the information is in a printable format or otherwise capable of being
downloaded by the relevant Website Lender and is in a format previously agreed
between the Borrower and the Agent.
 If any Lender (Paper Form Lender) does not agree to the delivery of information
electronically then the Agent shall notify the Borrower accordingly and the Borrower
shall at its own cost supply the information to the Agent (in sufficient copies for each
Paper Form Lender) in paper form. In any event the Borrower shall at its own cost supply
the Agent with at least one copy in paper form of any information required to be provided
by it.31.6.2
    
    The Agent shall supply each Website Lender with the address of and any relevant password
specifications for the Designated Website following designation of that website by the
Borrower and the Agent.31.6.3
    
    The Borrower shall promptly upon becoming aware of its occurrence notify the Agent if:
 (a)
    
    the Designated Website cannot be accessed due to technical failure;(b)
    
    the password specifications for the Designated Website change;(c)
    
    any new information which is required to be provided under this Agreement
is posted onto the Designated Website;(d)
    
    any existing information which has been provided under this Agreement and
posted onto the Designated Website is amended; or
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(e)
    
    the Borrower becomes aware that the Designated Website or any information
posted onto the Designated Website is or has been infected by any electronic virus
or similar software.
 If the Borrower notifies the Agent under paragraphs (a) to (e) above, all information to
be provided by the Borrower under this Agreement after the date of that notice shall be
supplied in paper form unless and until the Agent and each Website Lender is satisfied
that the circumstances giving rise to the notification are no longer continuing.31.6.4
    
    Any Website Lender may request, through the Agent, one paper copy of any information
required to be provided under this Agreement which is posted onto the Designated Website. The
Borrower shall at its own cost comply with any such request within ten Business Days.31.7
    
    English language31.7.1
    
    Any notice given under or in connection with any Finance Document must be in English.31.7.2
    
    All other documents provided under or in connection with any Finance Document must be:
 (a)
    
    in English; or(b)
    
    if not in English, and if so required by the Agent, accompanied by a
certified English translation and, in this case, the English translation will
prevail unless the document is a constitutional, statutory or other official
document.
 32
    
    Calculations And Certificates32.1
    
    AccountsIn any litigation or arbitration proceedings arising out of or in connection with a
Finance Document, the entries made in the accounts maintained by a Finance Party are
prima facie evidence of the matters to which they relate.32.2
    
    Certificates and determinationsAny certification or determination by a Finance Party of a rate or amount under any
Finance Document is, in the absence of manifest error, conclusive evidence of the matters
to which it relates.32.3
    
    Day count conventionAny interest, commission or fee accruing under a Finance Document will accrue from day to
day and is calculated on the basis of the actual number of days elapsed and a year of 360
days or, in any case where the practice in the London interbank market differs, in
accordance with that market practice.33
    
    Partial InvalidityIf, at any time, any provision of the Finance Documents is or becomes illegal,
invalid or unenforceable in any respect under any law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions nor the legality,
validity or enforceability of such provision under the law of any other jurisdiction will
in any way be affected or impaired.
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34
    
    Remedies And WaiversNo failure to exercise, nor any delay in exercising, on the part of any Finance
Party or Secured Party, any right or remedy under the Finance Documents shall operate as
a waiver, nor shall any single or partial exercise of any right or remedy prevent any
further or other exercise or the exercise of any other right or remedy. The rights and
remedies provided in this Agreement are cumulative and not exclusive of any rights or
remedies provided by law.35
    
    Amendments And Waivers35.1
    
    Required consents35.1.1
    
    Subject to Clause 35.2 (Exceptions) any term of the Finance Documents may be amended or
waived only with the consent of the Majority Lenders and the Obligors Agent and any such
amendment or waiver will be binding on all Parties.35.1.2
    
    The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by
this Clause 35.35.1.3
    
    Each Obligor agrees to any such amendment or waiver permitted by this Clause 35 which is
agreed to by the Obligors Agent.35.2
    
    Exceptions35.2.1
    
    An amendment or waiver that has the effect of changing or which relates to:
 (a)
    
    the definition of Majority Lendersin Clause 1 (Definitions);(b)
    
    an extension to the date of payment of any amount under the Finance
Documents;(c)
    
    a reduction in the Margin or a reduction in the amount of any payment of
principal, interest, fees or commission payable;(d)
    
    a change in currency of payment of any amount under the Finance
Documents;(e)
    
    an increase in or an extension of any Commitment or the Total
Commitments;(f)
    
    a change to the Borrower or Obligors other than in accordance with Clause
25 (Changes to the Obligors);(g)
    
    any provision which expressly requires the consent of all the Lenders;(h)
    
    Clause 2.2 (Finance Parties rights and obligations), Clause 8 (Mandatory
prepayment), Clause 24 (Changes to the Lenders) or this Clause 35;(i)
    
    the nature or scope of the Charged Property or the manner in which the
proceeds of enforcement of the Transaction Security are distributed (except to the
extent that it relates to a sale or disposal of an asset which is the subject of the
Transaction Security where such sale or disposal is expressly permitted under this
Agreement or any other Finance Document);(j)
    
    the release of any Transaction Security unless permitted under this
Agreement or any other Finance Document or relating to a sale or disposal of an
asset which is the subject of the Transaction Security where such sale or disposal
is expressly permitted under this Agreement or any other Finance Document;
 95




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(k)
    
    any amendment to Clause 29.5 (Proceeds of Enforcement) or to the order of
priority or subordination under the Subordination Deed; or(l)
    
    any extension of an Availability Period,
 shall not be made without the prior consent of all the Lenders,35.2.2
    
    An amendment or waiver which relates to the rights or obligations of the Agent, the Arranger
or the Security Agent may not be effected without the consent of the Agent, the Arranger or
the Security Agent.36
    
    CounterpartsEach Finance Document may be executed in any number of counterparts, and this has
the same effect as if the signatures on the counterparts were on a single copy of the
Finance Document.37
    
    Governing LawThis Agreement is governed by English law.38
    
    Enforcement38.1
    
    Jurisdiction of English courts38.1.1
    
    The courts of England shall have exclusive jurisdiction to settle any dispute arising out of
or in connection with the Finance Documents expressed to be governed by English law (including
a dispute regarding the existence, validity or termination of any Finance Document) (Dispute),
only where such Dispute is the subject of proceedings commenced by the Obligor.38.1.2
    
    Where a Dispute is the subject of proceedings commenced by one or more Finance Parties, the
Finance Parties are entitled to bring such proceedings in any court or courts of competent
jurisdiction (including but not limited to the courts of England). If any Obligor raises a
counter-claim in the context of proceedings commenced by one or more Finance Parties, that
Obligor shall bring such counter-claim before the court seized of the Finance Partys claim
and no other court.38.1.3
    
    The commencement of legal proceedings in one or more jurisdictions shall not, to the extent
allowed by law, preclude the Finance Parties from commencing legal actions or proceedings in
any other jurisdiction, whether concurrently or not.38.1.4
    
    To the extent allowed by law, each Obligor irrevocably waives any objection it may now or
hereafter have on any grounds whatsoever to the laying of venue of any legal proceeding, and
any claim it may now or hereafter have that any such legal proceeding has been brought in an
inappropriate or inconvenient forum.38.2
    
    Service of processWithout prejudice to any other mode of service allowed under any relevant law, each
Obligor (other than an Obligor incorporated in England and Wales):
 (a)
    
    irrevocably appoints Enstar (EU) Limited. (Attention: Derek Reid, Avaya
House, 2 Cathedral Hill, Guildford, Surrey GU2 7YL) as its agent for service of
process in relation to any proceedings before the English courts in connection with
any Finance Document; and(b)
    
    agrees that failure by an agent for service of process to notify the
relevant Obligor of the process will not invalidate the proceedings concerned; and
 96




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(c)
    
    if any person appointed as an agent for service of process is unable for
any reason to act as agent for service of process, the Borrower (on behalf of all
the Obligors) must immediately (and in any event within five days of such event
taking place) appoint another agent on terms acceptable to the Agent. Failing this,
the Agent may appoint another agent for this purpose.(d)
    
    The Borrower confirms that Enstar (EU) Limited has expressly agreed and
consented to the provisions of Clause 37 (Governing law) and of this Clause 38.
 38.3
    
    Waiver of ImmunityEach Obligor (to the fullest extent permitted by law) irrevocably and unconditionally:
 (a)
    
    agrees not to claim any immunity from proceedings brought against it by
any Finance Party in relation to any Finance Document, and to ensure that no such
claim is made on its behalf;(b)
    
    waives all rights of immunity in respect of it or its assets; and(c)
    
    consents generally in respect of such proceedings to the giving of relief
or the issue of any process in connection with such proceedings.
 38.4
    
    Waiver of Jury TrialEach of the Obligors irrevocably waives all rights to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of
or in relation to this Agreement or any of the Finance Documents or the actions of any
Finance Party in the negotiation, administration, performance or enforcement thereof.
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Schedule 1 The Original Parties
 Part 1
 The Original Obligors
 Name of Original Borrower
    
    Jurisdiction of Incorporation, Registration NumberClarendon Holdings, Inc.
    
    State of Delaware, 4911106
 Name of Original Obligor
    
    Jurisdiction of Incorporation, Registration NumberClarendon Holdings, Inc.
    
    State of Delaware, 4911106
 Part 2
 The Original Lenders  other than UK non-bank Lenders
 CommitmentName of Original Lender
    
    US$National Australia Bank Limited
    
    
    106,500,000
 Part 3
 The Original Lenders  UK non-bank Lenders
 CommitmentName of Original Lender
    
    US$None
 98




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Schedule 2 Conditions Precedent
 Part 1A
 Conditions precedent to First Utilisation Date
 1
    
    Obligors
 1.1
    
    A copy of the Constitutional Documents of the Shareholder and the Borrower with such
amendments as the Security Agent may reasonably request.1.2
    
    A copy of a good standing certificate (including verification of tax status) with
respect to the Shareholder and each member of the Group, issued as of a recent date by the
Secretary of State or other appropriate official of each member of the Groups
jurisdiction of incorporation or organisation.1.3
    
    A copy of a resolution of the board of directors of the Shareholder and the Borrower:
 (a)
    
    approving the terms of, and the transactions contemplated by, the
Transaction Documents to which it is a party and resolving that it execute, deliver
and perform the Transaction Documents to which it is a party;(b)
    
    authorising a specified person or persons to execute the Finance
Documents to which it is a party on its behalf; and(c)
    
    authorising a specified person or persons, on its behalf, to sign and/or
despatch all documents and notices (including, if relevant, any Utilisation Request
and Selection Notice) to be signed and/or despatched by it under or in connection
with the Finance Documents to which it is a party.
 1.4
    
    A specimen of the signature of each person authorised by the resolution referred to
in paragraph 1.3 above in relation to the Finance Documents and related documents.1.5
    
    A certificate of the Borrower (signed by a director) confirming that borrowing or
guaranteeing or securing, as appropriate, the Total Commitments would not cause any
borrowing, guarantee, security or similar limit binding on any member of the Group to be
exceeded.1.6
    
    A certificate of an authorised signatory of the Shareholder and the Borrower
certifying that each copy document relating to it specified in this Part 1A of Schedule 2
is correct, complete and in full force and effect and has not been amended or superseded
as at a date no earlier than the date of this Agreement or, to the extent such document
has previously been delivered to the Agent that such document has not been amended or
superseded since the date of such delivery.
 2
    
    Finance Documents
 2.1
    
    The Subordination Deed executed and delivered by the parties thereto.2.2
    
    The Fee Letters executed by the Borrower.2.3
    
    The following Transaction Security Documents executed and delivered by the parties
thereto.
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Transaction Security
    
    Governing law ofName of Obligor
    
    Document
    
    documentEnstar Investments
Inc.
    
    Stock Pledge
Agreement pledging
all capital stock in
Clarendon Holdings,
Inc.
    
    New York law or such
other law as may be
agreed between the
Borrower and the
AgentClarendon Holdings,
Inc.
    
    Security Agreement
over all of its
assets present and
future
Stock Pledge
Agreement pledging
all capital stock in
stock holding in
Clarendon National
Insurance Company
    
    New York law or such
other law as may be
agreed between the
Borrower and the
Agent
 2.4
    
    Any document or information required to be delivered to the Agent or the Security Agent on or
prior to the First Utilisation Date in order to perfect and protect the first priority liens
and security interests created under the Transaction Security Documents.
 3
    
    Acquisition3.1
    
    A Certificate of the Borrower (signed by a director) certifying that:
 (a)
    
    each of the matters specified in Article 2 (or the appropriate provision
setting out conditions) of the Acquisition Agreement has been satisfied or will be
satisfied on the First Utilisation Date or, with the consent of the Agent, waived
and the Acquisition Agreement has become wholly unconditional in all respects(b)
    
    no Acquisition Document has been amended, varied, novated, supplemented,
superseded, waived or terminated except with the consent of the Agent;(c)
    
    the Borrower is not aware of any breach of any warranty or any claim
under the Acquisition Agreement save to the extent disclosed against in the
Disclosure Letters;(d)
    
    all necessary or desirable Authorisations from any Governmental Authority
or other regulatory body in relation to the Acquisition and in connection with the
entry into and performance of the transactions contemplated by any Transaction
Document (or for the validity or enforceability of any of those documents) have been
obtained and are in full force and effect together with certified copies of those
obtained; and(e)
    
    the total amount of Loans equates to an amount equal to not more than 50%
of the purchase price of the Target Shares (excluding fees and other expenses).
 3.2
    
    A copy of each of the Acquisition Documents and the other Transaction Documents (other than
the Finance Documents) executed by the parties to those documents
 100




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4
    
    Legal OpinionsThe following legal opinions, each addressed to the Agent, the Security Agent and
the Original Lenders, to be in agreed form:
 (a)
    
    A legal opinion of Clyde & Co LLP, legal advisers to the Agent and the
Arranger, as to English law.(b)
    
    A legal opinion of Drinker Biddle & Reath LLP as to the laws of each
jurisdiction of incorporation of the Borrower and the Shareholder and the governing
law of the Transaction Security Documents.
 5
    
    Other Documents And Evidence
 5.1
    
    Evidence that Enstar (EU) Limited has accepted its appointment as process agent for
the Borrower as referred to in Clause 38.2 (Service of process) and for the Shareholder
under the Subordination Deed, and confirmed it agrees and consents to the provisions of
Clause 37 (Governing law) and of Clause 38 (Enforcement).5.2
    
    The Group Structure Chart which shows the Group.5.3
    
    A copy, certified by an authorised signatory of the Borrower to be a true copy, of
the Original Financial Statements of the Target and each other member of the Target Group
and an opening balance sheet for the Borrower.5.4
    
    A copy of any other Authorisation or other document, opinion or assurance which the
Agent notifies the Borrower is necessary or desirable in connection with the entry into
and performance of the transactions contemplated by any Finance Document or for the
validity and enforceability of any Finance Document.5.5
    
    Any information and evidence in respect of any Obligor or the Shareholder required by
any Finance Party to enable it to be satisfied with the results of all know your
customer or other checks which it is required to carry out in relation to such person.5.6
    
    Evidence that the arrangement fee has or will on the First Utilisation Date be paid
in full.5.7
    
    A copy of the Forecast Cash Flows.5.8
    
    A copy of the Report.5.9
    
    A certificate of the Chief Financial Officer of the Borrower stating that it is
Solvent after giving effect to the Loans, the application of the proceeds of the Loans in
accordance with Clause 3 (Purpose) and the payment of all estimated legal, accounting and
other fees related to this Agreement and the consummation of the other transactions
contemplated by this Agreement. For purposes of this certificate, Solventmeans with
respect to the Borrower on any date of determination that (a) the fair value of the
property of such person is greater than the total amount of liabilities (including
contingent and unliquidated liabilities) of such person; (b) the present fair saleable
value of the assets of such person is not less than the amount which will be required to
pay the probable liability of such person on its debts as they become absolute and mature;
(c) such person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such persons ability to pay as such debts and liabilities mature; and
(d) such person is not engaged in a business or
 101




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##### 



transaction, and is not about to engage in a business or transaction, for which such
persons property would constitute unreasonably small capital. In computing the
amount of contingent or unliquidated liabilities at any time, such liabilities will
be computed at the amount which, in light of all the facts and circumstances existing
at such time, represents the amount that can reasonably be expected to become an
actual and matured liability.5.10
    
    A certificate of an authorised signatory of the Borrower certifying that no member of
the Target Group has any outstanding loans as at the First Utilisation Date.5.11
    
    The loan and grant of security interest as set forth in the Transaction Security
Documents have been submitted to and approved by (to the extent approval is required) the
relevant Insurance Regulator of each Regulated Insurance Entity, in form and substance
reasonably satisfactory to the Agent and Security Agent.5.12
    
    A certificate of the Borrower (signed by a director) confirming that on the First
Utilisation Date it is in compliance with each of the financial covenants set out in
Clause 21.2.1 (Financial condition).
 102




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Part 1B
 Conditions subsequent required to be delivered by the Target
 1
    
    An Accession Letter executed by each member of the Target Group and the Borrower.2
    
    A copy of the constitutional documents of each member of the Target Group, with such
amendments as the Agent may reasonably require.3
    
    A copy of a good standing certificate (including verification of tax status) with respect to
each member of the Target Group, issued as of a recent date by the Secretary of State or other
appropriate official of that member of the Target Groups jurisdiction of incorporation or
organisation4
    
    A copy of a resolution of the board of directors of each member of the Target Group:
 4.1
    
    approving the terms of, and the transactions contemplated by, the Accession Letter
and the Finance Documents and resolving that it execute, deliver and perform the Accession
Letter and any other Finance Document to which it is party;4.2
    
    authorising a specified person or persons to execute the Accession Letter and other
Finance Documents on its behalf;4.3
    
    authorising a specified person or persons, on its behalf, to sign and/or despatch all
other documents and notices to be signed and/or despatched by it under or in connection
with the Finance Documents to which it is a party; and4.4
    
    authorising the Borrower to act as its agent in connection with the Finance
Documents.
 5
    
    A specimen of the signature of each person authorised by the resolution referred to in
paragraph 3 above.6
    
    A certificate of an authorised signatory of each member of the Target Group certifying that
each copy document listed in this Part 1B of Schedule 2 is correct, complete and in full force
and effect and has not been amended or superseded as at a date no earlier than the date of the
Accession Letter.7
    
    The following legal opinions, each addressed to the Agent, the Security Agent and the
Lenders:
 7.1
    
    A legal opinion of Clyde & Co LLP as advisers to the Agent in England, as to English
law in the form distributed to the Lenders prior to signing the Accession Letter.7.2
    
    A legal opinion of Drinker Biddle & Reath LLP as to the law of the jurisidiction of
incorporation of each member of the Target Group and in the form distributed to the
Lenders prior to signing the Accession Letter.
 8
    
    Evidence that Enstar (EU) Limited as any process agent referred to in Clause 38.2 (Service of
process) has accepted its appointment and confirmed it agrees and consents to the provisions
of Clause 37 (Governing law) and of Clause 38 (Enforcement).9
    
    Evidence that all necessary or desirable Authorisations from any Governmental Authority or
other regulatory body in connection with the entry into and
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performance of the transactions contemplated by the Accession Letter, any Finance
Document or Transaction Document to which any member of the Target Group is party or for
the validity or enforceability of any of those documents have been obtained and are in
full force and effect, together with certified copies of those obtained.10
    
    A certificate of the Borrower confirming that no Default is continuing or would occur as a
result of the any member of the Target Group executing the Accession Letter or the Finance
Documents or the Transaction Documents to which it is party.11
    
    A certificate of the Chief Financial Officer of each member of the Target Group stating that
the respective company is Solvent after entering into the Accession Letter and the payment of
all related estimated legal, accounting and other fees. For purposes of this certificate,
Solvent means with respect to that member of the Target Group on any date of determination
that (a) the fair value of the property of such person is greater than the total amount of
liabilities (including contingent and unliquidated liabilities) of such person; (b) the
present fair saleable value of the assets of such person is not less than the amount which
will be required to pay the probable liability of such person on its debts as they become
absolute and mature; (c) such person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such persons ability to pay as such debts and liabilities
mature; and (d) such person is not engaged in a business or transaction, and is not about to
engage in a business or transaction, for which such persons property would constitute
unreasonably small capital. In computing the amount of contingent or unliquidated liabilities
at any time, such liabilities will be computed at the amount which, in light of all the facts
and circumstances existing at such time, represents the amount that can reasonably be expected
to become an actual and matured liability.
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Part 2
 Conditions precedent required to be delivered by an Additional Obligor
 12
    
    An Accession Letter (if relevant) executed by the Additional Obligor and the Borrower.13
    
    A copy of the constitutional documents of the Additional Obligor, with such amendments as the
Agent may reasonably require.14
    
    A copy of a good standing certificate (including verification of tax status) with respect to
the Additional Obligor, issued as of a recent date by the Secretary of State or other
appropriate official of the Additional Obligors jurisdiction of incorporation or organisation15
    
    A copy of a resolution of the board of directors of the Additional Obligor:
 15.1
    
    approving the terms of, and the transactions contemplated by, the Accession Letter
and the Finance Documents and resolving that it execute, deliver and perform the Accession
Letter and any other Finance Document to which it is party;15.2
    
    authorising a specified person or persons to execute the Accession Letter and other
Finance Documents on its behalf;15.3
    
    authorising a specified person or persons, on its behalf, to sign and/or despatch all
other documents and notices to be signed and/or despatched by it under or in connection
with the Finance Documents to which it is a party; and15.4
    
    authorising the Borrower to act as its agent in connection with the Finance
Documents.
 16
    
    A specimen of the signature of each person authorised by the resolution referred to in
paragraph 3 above.17
    
    A certificate of an authorised signatory of the Additional Obligor certifying that each copy
document listed in this Part 2 of Schedule 2 is correct, complete and in full force and effect
and has not been amended or superseded as at a date no earlier than the date of the Accession
Letter.18
    
    If available, the latest audited financial statements of the Additional Obligor.19
    
    The following legal opinions, each addressed to the Agent, the Security Agent and the
Lenders:
 19.1
    
    A legal opinion of Clyde & Co LLP as advisers to the Agent in England, as to English
law in the form distributed to the Lenders prior to signing the Accession Letter.19.2
    
    If the Additional Obligor is incorporated in or has its centre of main interestor
establishmentin a jurisdiction other than England and Wales or is executing a Finance
Document which is governed by a law other than English law, a legal opinion of the legal
advisers to the Agent in the jurisdiction of its incorporation, centre of main interestor
establishment(as applicable) or, as the case may be, the jurisdiction of the governing
law of that Finance Document (Applicable Jurisdiction) as to the law of the Applicable
Jurisdiction and in the form distributed to the Lenders prior to signing the Accession
Letter.
 105




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20
    
    If the proposed Additional Obligor is incorporated in a jurisdiction other than England and
Wales, evidence that Enstar (EU) Limited as any process agent referred to in Clause 38.2
(Service of process) has accepted its appointment and confirmed it agrees and consents to the
provisions of Clause 37 (Governing law) and of Clause 38 (Enforcement).21
    
    Evidence that all necessary or desirable Authorisations from any Governmental Authority or
other regulatory body in connection with the entry into and performance of the transactions
contemplated by the Accession Letter, any Finance Document or Transaction Document to which
the Additional Obligor is party or for the validity or enforceability of any of those
documents have been obtained and are in full force and effect, together with certified copies
of those obtained.22
    
    A certificate of the Borrower confirming that no Default is continuing or would occur as a
result of the Additional Obligor executing the Accession Letter or the Finance Documents or
the Transaction Documents to which it is party.23
    
    A certificate of the Chief Financial Officer of the Additional Obligor stating that the
respective company is Solvent after entering into the Accession Letter and the payment of all
related estimated legal, accounting and other fees. For purposes of this certificate, Solvent
means with respect to the Additional Obligor on any date of determination that (a) the fair
value of the property of such person is greater than the total amount of liabilities
(including contingent and unliquidated liabilities) of such person; (b) the present fair
saleable value of the assets of such person is not less than the amount which will be required
to pay the probable liability of such person on its debts as they become absolute and mature;
(c) such person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such persons ability to pay as such debts and liabilities mature; and (d)
such person is not engaged in a business or transaction, and is not about to engage in a
business or transaction, for which such persons property would constitute unreasonably small
capital. In computing the amount of contingent or unliquidated liabilities at any time, such
liabilities will be computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to become an
actual and matured liability.
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Schedule 3 Requests
 Part 1 Utilisation Request
 Loans
 From:
    
    Clarendon Holdings, Inc.
 To:
    
    National Australia Bank Limited (as Agent)
   Clarendon Holdings, Inc.  Facility Agreement dated [ ] (Facility Agreement)
 1
    
    We refer to the Facility Agreement. This is a Utilisation Request. Terms defined in the
Facility Agreement have the same meaning in this Utilisation Request unless given a different
meaning in this Utilisation Request.2
    
    We wish to borrow a Loan on the following terms:2.1
    
    Proposed Utilisation Date: [ ] (or, if that is not a Business
Day, the next Business Day)2.2
    
    Amount: US$[ ] or, if less, the Available
Facility, to be credited to [account].2.3
    
    Interest Period: [ ].3
    
    We confirm that each condition specified in Clause 4.2 (Further conditions precedent) is
satisfied on the date of this Utilisation Request.4
    
    Please arrange for the Arrangers arrangement fee totalling US$[ ] to be deducted from the
net proceeds and the balance, being:US$[ ], to be credited to:
[account].5
    
    This Utilisation Request is irrevocable.
 Yours faithfullyauthorised signatory forClarendon Holdings, Inc.
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##### 



Part 2 Selection Notice
 From:
    
    Clarendon Holdings, Inc.
 To:
    
    National Australia Bank Limited (as Agent)
   Clarendon Holdings, Inc.  Facility Agreement dated [ ] (Facility Agreement)
 6
    
    We refer to the Facility Agreement. This is a Selection Notice. Terms defined in the
Facility Agreement have the same meaning in this Selection Notice unless given a different
meaning in this Selection Notice.7
    
    We refer to the Loan with an Interest Period ending on [ ].8
    
    We request that the next Interest Period for the above Loan[s] is [ ]].9
    
    This Selection Notice is irrevocable.
 Yours faithfully,authorised signatory forClarendon Holdings, Inc.
 108




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##### 



Schedule 4 Mandatory Cost Formula
 1
    
    The Mandatory Cost is an addition to the interest rate to compensate the Lenders for the
cost of compliance with:
 1.1
    
    the requirements of the Bank of England and/or the Financial Services Authority (or,
in either case, any other authority which replaces all or any of its functions); or1.2
    
    the requirements of the European Central Bank.
 2
    
    On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall
calculate, as a percentage rate, a rate (Additional Cost Rate) for each Lender in accordance
with the paragraphs set out below. The Mandatory Cost will be calculated by the Agent as a
weighted average of the Lenders Additional Cost Rates (weighted in proportion to the
percentage participation of each Lender in the relevant Loans) and will be expressed as a
percentage rate per annum.3
    
    The Additional Cost Rate for any Lender lending from a Facility Office in a Participating
Member State will be the percentage notified by that Lender to the Agent. This percentage
will be certified by that Lender in its notice to the Agent to be its reasonable determination
of the cost (expressed as a percentage of that Lenders participation in all Loans made from
that Facility Office) of complying with the minimum reserve requirements of the European
Central Bank in respect of loans made from that Facility Office.4
    
    The Additional Cost Rate for any Lender lending from a Facility Office in the United Kingdom
will be calculated by the Agent as follows:4.1
    
    in relation to a US Dollar Loan:AB+C(B-D)+Ex0.01
               100-(A+C)per cent per annum4.2
    
    in relation to a Loan in any currency other than sterling:Ex0.01
300 per cent per annumwhere:
 (A)
    
    is the percentage of Eligible Liabilities (assuming these to be in excess
of any stated minimum) which that Lender is from time to time required to maintain
as an interest free cash ratio deposit with the Bank of England to comply with cash
ratio requirements.(B)
    
    is the percentage rate of interest (excluding the Margin and the
Mandatory Cost and, if the Loan is an Unpaid Sum, the additional rate of interest
specified in paragraph (a) of Clause 10.3 (Default interest)) payable for the
relevant Interest Period on the Loan.(C)
    
    is the percentage (if any) of Eligible Liabilities which that Lender is
required from time to time to maintain as interest bearing Special Deposits with the
Bank of England.
 109




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##### 



(D)
    
    is the percentage rate per annum payable by the Bank of England to the
Agent on interest bearing Special Deposits.(E)
    
    is designed to compensate Lenders for amounts payable under the Fees
Rules and is calculated by the Agent as being the average of the most recent rates
of charge supplied by the Reference Banks to the Agent pursuant to paragraph 7 below
and expressed in pounds per £1,000,000.
 5
    
    For the purposes of this Schedule:5.1
    
    Eligible Liabilities: and Special Depositshave the meanings given to them from time to time
under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of
England;5.2
    
    Fees Rules: means the rules on periodic fees contained in the FSA Supervision Manual or such
other law or regulation as may be in force from time to time in respect of the payment of fees
for the acceptance of deposits;5.3
    
    Fee Tariffs: means the fee tariffs specified in the Fees Rules under the activity group A.1
Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees
Rules but taking into account any applicable discount rate); and5.4
    
    Tariff Base: has the meaning given to it in, and will be calculated in accordance with, the
Fees Rules.6
    
    In application of the above formulae, A, B, C and D will be included in the formulae as
percentages (i.e. 5 per cent. will be included in the formula as 5 and not as 0.05). A
negative result obtained by subtracting D from B shall be taken as zero. The resulting
figures shall be rounded to four decimal places.7
    
    If requested by the Agent, each Reference Bank shall, as soon as practicable after
publication by the Financial Services Authority, supply to the Agent, the rate of charge
payable by that Reference Bank to the Financial Services Authority pursuant to the Fees Rules
in respect of the relevant financial year of the Financial Services Authority (calculated for
this purpose by that Reference Bank as being the average of the Fee Tariffs applicable to that
Reference Bank for that financial year) and expressed in pounds per £1,000,000 of the Tariff
Base of that Reference Bank.8
    
    Each Lender shall supply any information required by the Agent for the purpose of calculating
its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the
following information on or prior to the date on which it becomes a Lender:8.1
    
    the jurisdiction of its Facility Office; and8.2
    
    any other information that the Agent may reasonably require for such purpose.Each Lender shall promptly notify the Agent of any change to the information provided by
it pursuant to this paragraph.9
    
    The percentages of each Lender for the purpose of A and C above and the rates of charge of
each Reference Bank for the purpose of E above shall be determined by the Agent based upon the
information supplied to it pursuant to paragraphs 7 and 8 above and on the assumption that,
unless a Lender notifies the Agent to the contrary, each Lenders obligations in relation to
cash ratio deposits and Special Deposits are the same as those of a typical bank from its
jurisdiction of incorporation with a Facility Office in the same jurisdiction as its Facility
Office.
 110




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##### 



10
    
    The Agent shall have no liability to any person if such determination results in an
Additional Cost Rate which over or under compensates any Lender and shall be entitled to
assume that the information provided by any Lender or Reference Bank pursuant to paragraphs 3,
7 and 8 above is true and correct in all respects.11
    
    The Agent shall distribute the additional amounts received as a result of the Mandatory Cost
to the Lenders on the basis of the Additional Cost Rate for each Lender based on the
information provided by each Lender and each Reference Bank pursuant to paragraphs 3, 7 and 8
above.12
    
    Any determination by the Agent pursuant to this Schedule in relation to a formula, the
Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the
absence of manifest error, be conclusive and binding on all Parties.13
    
    The Agent may from time to time, after consultation with the Borrower and the Lenders,
determine and notify to all Parties any amendments which are required to be made to this
Schedule in order to comply with any change in law, regulation or any requirements from time
to time imposed by the Bank of England, the Financial Services Authority or the European
Central Bank (or, in any case, any other authority which replaces all or any of its functions)
and any such determination shall, in the absence of manifest error, be conclusive and binding
on all Parties.
 111




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##### 



Schedule 5 Form of Transfer Certificate
 To:
    
    National Australia Bank Limited as AgentFrom:
    
    [The Existing Lender] (Existing Lender) and [The New Lender] (New Lender)
  Clarendon Holdings, Inc.   Facility Agreement dated [       ] (Facility Agreement)
 1
    
    We refer to the Facility Agreement. This is a Transfer Certificate. Terms defined in the
Facility Agreement have the same meaning in this Transfer Certificate unless given a different
meaning in this Transfer Certificate.2
    
    We refer to Clause 24.6 (Procedure for transfer):2.1
    
    The Existing Lender and the New Lender agree to the Existing Lender transferring to the New
Lender by novation all or part of the Existing Lenders Commitment, rights and obligations
referred to in the Schedule in accordance with Clause 24.6 (Procedure for transfer) [OR] [ ***
Each Existing Lender listed in Part 1 of the Schedule transfers by novation to each New Lender
listed in Part 2 of the Schedule that portion of the outstanding Loans and Commitments in
accordance with Clause 24.6 (Procedure for transfer), such that:
 (a)
    
    each New Lender will become a Lender under the Agreement with the
respective Commitment and portion of outstanding Loans set out opposite its name in
Part 3 of the Schedule; and(b)
    
    each Existing Lenders Commitment and portion of outstanding Loans will
be reduced to the amounts set out opposite its name in Part 3 of the Schedule. *** ]
 2.2
    
    The proposed Transfer Date is [ *** ].2.3
    
    The Facility Office and address, fax number and attention details for notices of the New
Lender for the purposes of Clause 31.2 (Addresses) are set out in the Schedule.3
    
    [ *** The/Each *** ] New Lender expressly acknowledges the limitations on the Existing
Lender[s][s] obligations set out in paragraph (c) of Clause 24.5 (Limitation of
responsibility of Existing Lenders).4
    
    This Transfer Certificate may be executed in any number of counterparts and this has the same
effect as if the signatures on the counterparts were on a single copy of this Transfer
Certificate.5
    
    For the purpose of Clause 31.6 (Use of websites) the New Lender is a [ *** Website Lender ***
] [ *** Paper Form Lender *** ]. *** ] OR [ *** each New Lender specifies in Part 4 of the
Schedule opposite its name whether it is a Website Lender or a Paper Form Lender. *** ]6
    
    This Transfer Certificate is governed by English law.7
    
    The parties to this Transfer Certificate intend it to take effect as a deed and this Transfer
Certificate shall be treated as having been duly executed and delivered as a deed only upon
being dated.
 112




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##### 



IN WITNESS WHEREOF
 113




---



##### 



The Schedule
 Commitment/rights and obligations to be transferred
 [insert relevant details]
  [Existing Lender]
    
    [New Lender]By:
    
    By:
 
                Lender
    
    Commitment
    
    Loans[*list here existing and new lenders*] [ *** ] [ ***] [ *** ] [ *** ]
    
    [**]
    
    [**]
 114




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##### 



Part 4
 New Lenders Administrative Details
 Address forFacility office
    
    service of
    
    
    
    Website orAddress/Fax
    
    notices (if
    
    Account for
    
    Paper FormNew Lender
    
    no.Attention of
    
    different)
    
    Payment
    
    Lender[ *** ]
    
    [ *** ]
    
    [ *** ]
    
    [ *** ]
    
    [ *** ]
        The Transfer Certificate is
    
    )accepted by the Agent and the
    
    )Transfer Date is confirmed by the
    
    )Agent as [ *** ]
    
    )
     115




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##### 



Schedule 6 Form of Assignment Agreement
 To:
    
    National Australia Bank Limited as AgentFrom:
    
    [the Existing Lender] (Existing Lender) and [the New Lender] (New Lender)Dated:
    
    [***]
 Clarendon Holdings, Inc.  Facility Agreement dated [       ] (Facility Agreement)
 1
    
    We refer to the Facility Agreement. This is an Assignment Agreement.2
    
    (a)     We refer to Clause 24.7 (Procedure for assignment).
 (a)
    
    The Existing Lender assigns absolutely to the New Lender all the rights
of the Existing Lender under the Facility Agreement, the other Finance Documents and
in respect of the Transaction Security which correspond to that portion of the
Existing Lenders Commitments and participations in Loans under the Facility
Agreement as specified in the Schedule;(b)
    
    The Existing Lender is released from all the obligations of the Existing
Lender which correspond to that portion of the Existing Lenders Commitments and
participations in Loans under the Facility Agreement specified in the Schedule.(c)
    
    The New Lender becomes a Party as a Lender and is bound by obligations
equivalent to those from which the Existing Lender is released under paragraph (c)
above.
 3
    
    The proposed Transfer Date is [***].4
    
    On the Transfer Date the New Lender becomes:
 (a)
    
    Party to the Finance Documents as a Lender; and(b)
    
    Party to [*** other relevant agreements in other relevant capacity such
as Subordination Deed ***].
 5
    
    The New Lender expressly acknowledges the limitations on the Existing Lenders obligations
set out in paragraph (c) of Clause 24.5 (Limitation of responsibility of Existing Lenders).6
    
    The Facility Office and address, fax number and attention details for notices of the New
Lender for the purposes of Clause 31.2 (Addresses) are set out in the Schedule to this
Assignment Agreement.7
    
    This Assignment Agreement may be executed in any number of counterparts and this has the same
effect as if the signatures on the counterparts were on a single copy of this Assignment
Agreement.8
    
    For the purpose of Clause 31.6 (Use of Websites) the New Lender is a [*** Website Lender ***]
[*** Paper Form Lender ***]9
    
    This Assignment Agreement is governed by English law.10
    
    This Assignment Agreement has been [*** executed and delivered as a deed ***] [*** entered
into ***] on the date stated at the beginning of this Assignment Agreement.
 116




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##### 



THE SCHEDULE
 Commitment/rights and obligations to be transferred by
assignment, release and accession
   [*** Existing Lender ***]
    
    [*** New Lender ***]By:
    
    By:
     117




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##### 



Schedule 7 Form of Accession Letter
 To:
    
    National Australia Bank Limited as AgentFrom:
    
    [Subsidiary] and Clarendon Holdings, Inc.
   Clarendon Holdings, Inc.  Facility Agreement dated [       ] (Facility Agreement)
 1
    
    We refer to the Facility Agreement. This is an Accession Letter. Terms defined in the
Facility Agreement have the same meaning in this Accession Letter unless given a different
meaning in this Accession Letter.2
    
    [Subsidiary] agrees to become an Additional Obligor and to be bound by the terms of the
Facility Agreement, the Subordination Deed and the other Finance Documents as an Additional
Obligor pursuant to Clause 25.2 (Additional Obligor) of the Facility Agreement and as an
[Obligor] pursuant to Clause [ ] of the Subordination Deed. [Subsidiary] is a company duly
incorporated under the laws of [name of relevant jurisdiction] and is a limited liability
company and registered number [ ].3
    
    [Subsidiarys] administrative details are as follows:Address:Fax No.:Attention:4
    
    This Accession Letter is governed by English Law
  For and on behalf of
    
    For and on behalf ofClarendon Holdings, Inc.
    
    [Subsidiary]
 118




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##### 



Schedule 8 Form of Compliance Certificate
 To:
    
    National Australia Bank Limited as AgentFrom:
    
    Clarendon Holdings, Inc.
   Clarendon Holdings, Inc.  Facility Agreement dated [       ] (Facility Agreement)
 1
    
    We refer to the Facility Agreement. This is a Compliance Certificate. Terms defined in the
Facility Agreement have the same meaning when used in this Compliance Certificate unless given
a different meaning in this Compliance Certificate.2
    
    We confirm that as at [*** insert the relevant testing date/ the Testing Date ***]:2.1
    
    Regulatory Cover (which must exceed 1.1:1):the Actual Statutory Surplus of each Regulated
Insurance Entity was [***] and the Authorised Control Level Risk Based Capital (as defined by
the NAIC) of each such Regulated Insurance Entities was [***], therefore Regulatory Cover was
[***] and that the requirements of Clause 21.2.1(a) (Regulatory cover) have been met.2.2
    
    Net Surplus Cover (which must be a minimum of 2:1): Consolidated Net Surplus was [***] and
Facility Debt was [***], therefore Net Surplus Cover was [***] and that the requirements of
Clause 21.2.1(b) (Minimum Net Surplus Cover) have been met.2.3
    
    Requisite Rating:
 (i)
    
    the short term rating and/or long term rating of
fixed income investments held by the Target Group:
 (a)
    
    for not more than 20%
of the total value of such investments have a rating of BBB
or below from the Rating Agency, and none have a rating of
less than BBB- from the Rating Agency;(b)
    
    have a minimum weighted
average rating of at least AA from the Rating Agency;
 (ii)
    
    the maximum duration in the cash and fixed income
portfolios held by the Target Group does not exceed five years; and(iii)
    
    no more than 12.5% of the total value of
investments of the Target Group are held in investments that are not
cash or fixed income investments,
 in each case as demonstrated below. [attach details of calculations] and therefore the
requirements of Clause 21.2.1(c) (Requisite Rating) have been met.3.
    
    We confirm that no Default is continuing. 1
 
 1
    
    If this statement cannot be made, the
certificate should identify any Default that is continuing and the steps, if
any, being taken to remedy it. 119




---



##### 



[insert applicable certification language]for and on behalf of[name of Auditors of Clarendon Holdings, Inc.]
 120




---



##### 



Schedule 9 LMA Form of Confidentiality Undertaking
 LMA CONFIDENTIALITY LETTER
 FOR PRIMARY SYNDICATION
 [Letterhead of Arranger]
 To:
    
    [insert name of Potential Lender]Re:
    
    the FacilityBorrower:Amount:Agent:
   1
    
    Confidentiality UndertakingYou undertake:1.1
    
    to keep the Confidential Information confidential and not to disclose it to anyone except as
provided for by paragraph 2 below and to ensure that the Confidential Information is protected
with security measures and a degree of care that would apply to your own confidential
information;1.2
    
    to keep confidential and not disclose to anyone the fact that the Confidential Information
has been made available or that discussions or negotiations are taking place or have taken
place between us in connection with the Facility;1.3
    
    to use the Confidential Information only for the Permitted Purpose;1.4
    
    (to use all reasonable endeavours to ensure that any person to whom you pass any Confidential
Information (unless disclosed under paragraph 2(b) below) acknowledges and complies with the
provisions of this letter as if that person were also a party to it; and1.5
    
    not to make enquiries of any Obligor or member of the Group or any of their officers,
directors, employees or professional advisers relating directly or indirectly to the Facility.2
    
    Permitted DisclosureWe agree that you may disclose confidential information:2.1
    
    to members of the Participant Group and their officers, directors, employees and professional
advisers to the extent necessary for the Permitted Purpose and to any auditors of members of
the Participant Group;2.2
    
    where requested or required by any court of competent jurisdiction or any competent judicial,
governmental, supervisory or regulatory body, (ii) where required by the rules of any stock
exchange on which the shares or other securities of any member of the Participant Group are
listed or (iii) where required by the laws
 121




---



##### 



or regulations of any country with jurisdiction over the affairs of any member of
the Participant Group; orwith the prior written consent of us and the Borrower.3
    
    Notification Of Required Or Unauthorised DisclosureYou agree (to the extent permitted by law) to inform us of the full circumstances of
any disclosure under paragraph 2(b) or upon becoming aware that confidential information
has been disclosed in breach of this letter.4
    
    Return Of CopiesIf we so request in writing, you shall return all confidential information supplied
to you by us and destroy or permanently erase all copies of confidential information made
by you and use all reasonable endeavours to ensure that anyone to whom you have supplied
any confidential information destroys or permanently erases such confidential information
and any copies made by them, in each case save to the extent that you or the recipients
are required to retain any such confidential information by any applicable law, rule or
regulation or by any competent judicial, governmental, supervisory or regulatory body or
in accordance with internal policy, or where the confidential information has been
disclosed under paragraph 2(b) above.5
    
    Continuing ObligationsThe obligations in this letter are continuing and, in particular, shall survive the
termination of any discussions or negotiations between you and us. Notwithstanding the
previous sentence, the obligations in this letter shall cease (a) if you become a party
to or otherwise acquire (by assignment or sub participation) an interest, direct or
indirect in the facility or (b) twelve months after you have returned all confidential
information supplied to you by us and destroyed or permanently erased all copies of
confidential information made by you (other than any such confidential information or
copies which have been disclosed under paragraph 2 above (other than sub-paragraph 2(a))
or which, pursuant to paragraph 4 above, are not required to be returned or destroyed).6
    
    No Representation; Consequences Of Breach, EtcYou acknowledge and agree that:6.1
    
    neither we nor any of our officers, employees or advisers (each a Relevant Person) (i) make
any representation or warranty, express or implied, as to, or assume any responsibility for,
the accuracy, reliability or completeness of any of the Confidential Information or any other
information supplied by us or any member of the Group or the assumptions on which it is based
or (ii) shall be under any obligation to update or correct any inaccuracy in the Confidential
Information or any other information supplied by us or any Obligor or any member of the Group
or be otherwise liable to you or any other person in respect to the Confidential Information
or any such information; and6.2
    
    we or the Obligors or any members of the Group may be irreparably harmed by the breach of the
terms of this letter and damages may not be an adequate remedy; each Relevant Person or
Obligor or any member of the Group may be granted an injunction or specific performance for
any threatened or actual breach of the provisions of this letter by you.
 122




---



##### 



7
    
    No Waiver; Amendments, EtcThis letter sets out the full extent of your obligations of confidentiality owed to
us in relation to the information the subject of this letter. No failure or delay in
exercising any right, power or privilege under this letter will operate as a waiver
thereof nor will any single or partial exercise of any right, power or privilege preclude
any further exercise thereof or the exercise of any other right, power or privileges
under this letter. The terms of this letter and your obligations under this letter may
only be amended or modified by written agreement between us.8
    
    Inside InformationYou acknowledge that some or all of the confidential information is or may be
price-sensitive information and that the use of such information may be regulated or
prohibited by applicable legislation relating to insider dealing and you undertake not to
use any confidential information for any unlawful purpose.9
    
    Nature Of UndertakingsThe undertakings given by you under this letter are given to us and (without
implying any fiduciary obligations on our part) are also given for the benefit of the
borrower, each other Obligor and each other member of the Group.10
    
    Third Party Rights10.1
    
    Subject to paragraph 6 and paragraph 9 the terms of this letter may be enforced and
relied upon only by you and us and the operation of the Contracts (Rights of Third Parties)
Act 1999 is excluded.10.2
    
    Notwithstanding any provisions of this letter, the parties to this letter do not require the
consent of any Relevant Person or any Obligor or any member of the Group to rescind or vary
this letter at any time.11
    
    Governing Law And JurisdictionThis letter (including the agreement constituted by your acknowledgement of its
terms) shall be governed by and construed in accordance with the laws of England and the
parties submit to the non-exclusive jurisdiction of the English courts.12
    
    Tax Shelter LanguageNotwithstanding anything in this letter to the contrary, the information subject to
this letter shall not include, and each party may disclose without limitation of any
kind, any information with respect to the U.S. Federal income tax treatment and US
Federal income tax structure (in each case, within the meaning of US Treasury Regulation
Section 1.6011-4) of the transactions contemplated in this letter or in any of the other
Finance Documents and all materials of any kind (including opinions or other tax
analyses) that are provided to the Agent or such Lender relating to such tax treatment
and tax structure (it being understood that this authorisation is retroactively effective
to the commencement of the first discussions between or among any of the parties
regarding the transactions contemplated by this letter or by any of the other Finance
Documents); provided that with respect to any document or similar item that in either
case contains information concerning the US Federal income tax treatment or US Federal
income tax structure of the transactions as well as other information, this sentence
shall only apply to such portions of the document or similar item that relate to the US
Federal income tax treatment or US Federal income tax structure of the transactions
contemplated in this Undertaking or in any of the other Finance Documents.
 123




---



##### 



13
    
    DefinitionsIn this letter (including the acknowledgement set out below):Confidential Informationmeans any information relating to the Borrower, the Group, and
the Facility and includes information given orally and any document, electronic file or
any other way of representing or recording information which contains or is derived or
copied from such information but excludes information that (a) is or becomes public
knowledge other than as a direct or indirect result of any breach of this letter or (b)
is known by you before the date the information is disclosed to you by us or any of our
affiliates or advisers or is lawfully obtained by you after that date, other than from a
source which is connected with the Group and which, in either case, as far as you are
aware, has not been obtained in violation of, and is not otherwise subject to, any
obligation of confidentiality.Groupmeans the Borrower and each of its holding companies and subsidiaries and each
subsidiary of each of its holding companies (as each such term is defined in the
Companies Act 1985).Obligormeans [ *** ].Participant Groupmeans you, each of your holding companies and subsidiaries and each
subsidiary of each of your holding companies (as each such term is defined in the
Companies Act 1985).Permitted Purposemeans considering and evaluating whether to enter into the Facility.
   For and on behalf ofNational Australia Bank Limited (as Arranger)
    For and on behalf of[Potential Lender]
 124




---



##### 



Schedule 10 Timetables
 Loans
 Loans in US DollarsDelivery of a duly completed
Utilisation Request (Clause
5.1 (Delivery of a
Utilisation Request)) or a
Selection Notice (Clause
11.1 (Selection of Interest
Periods and Terms))
    
    3 Business Days prior to the date of the Loan 

9.30 a.m.Agent notifies the Lenders
of the Loan in accordance
with Clauses 5.4 (Lenders
participation)
    
    3 Business Days prior to the date of the Loan 

3.00 p.m.LIBOR is fixed
    
    Quotation Day as of 11.00 a.m.
 125




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##### 



Schedule 11 Group Structure
 
 126




---



##### 



Schedule 12 Security Agent
 1
    
    Appointment1.1
    
    Each other Finance Party appoints the Security Agent to act as its agent and trustee under
and in connection with the Finance Documents.1.2
    
    Each other Finance Party:1.2.1
    
    authorises the Security Agent to exercise the rights, powers, authorities and discretions
specifically given to the Security Agent under or in connection with the Finance Documents
together with any other incidental rights, powers, authorities and discretions;1.2.2
    
    confirms its approval of each Transaction Security Document; and1.2.3
    
    authorises and directs the Security Agent (by itself or by any Delegate) to execute and
enforce the Transaction Security Documents as trustee, agent or in any other role (and whether
or not expressly in that Finance Partys name) on its behalf, subject always to the terms of
the Finance Documents.2
    
    Duties2.1
    
    Except where a Finance Document specifically provides otherwise, the Security Agent is not
obliged to review or check the adequacy, accuracy or completeness of any document it forwards
to another Party.2.2
    
    The Security Agent has only those duties which are expressly specified in the Finance
Documents.2.3
    
    The Security Agents duties under the Finance Documents are solely mechanical and
administrative in nature.2.4
    
    Any requirement that the Security Agent is to act reasonably is to be construed as an
obligation on the Finance Parties which are approached by it for instructions in accordance
with this Agreement in relation to the relevant matter and not as an individual obligation on
the Security Agent in that capacity.3
    
    Relationship3.1
    
    The relationship between the Security Agent and each other Finance Party is that of
principal and agent save only that the benefits of the Transaction Security Documents are held
by the Security Agent as trustee for them (to the extent that any amount is or is capable of
being secured thereby).3.2
    
    In relation to any jurisdiction the courts of which would not recognise or give effect to the
trusts expressed to be created by any Finance Document, the relationship of each other Finance
Party to the Security Agent shall be construed solely as one of principal and agent but, to
the fullest extent permissible under the laws of such jurisdiction, all the other provisions
of the Finance Document shall have full force and effect between the Parties.3.3
    
    The Security Agent shall not be liable to any Party for any breach by any other Party of any
Finance Document.3.4
    
    The Security Agent shall not be bound to account to any Party or any other person for any sum
or the profit element of any sum received by it for its own account.
 127




---



##### 



4
    
    No Fiduciary Duties4.1
    
    Nothing in the Finance Documents makes the Security Agent a fiduciary for any other Party
or any other person.5
    
    Business with the Group5.1
    
    The Security Agent may accept deposits from, lend money to and generally engage in any
kind of banking or other business with any member of the Group.5.2
    
    If it is also a Lender, the Security Agent has the same rights and powers under the Finance
Documents as any other Lender and may exercise those rights and powers as though it were not
the Security Agent.6
    
    Rights and Discretions6.1
    
    The Security Agent may rely on:6.1.1
    
    any representation, notice or document believed by it to be genuine, correct and
appropriately authorised; and6.1.2
    
    any statement made by a director, authorised signatory or employee of any person regarding
any matters which may reasonably be assumed to be within his knowledge or within his power to
verify.6.2
    
    The Security Agent may assume (unless it has received notice to the contrary in its capacity
as agent for the other Finance Parties) that:6.2.1
    
    no Event of Default has occurred (unless it has actual knowledge of an Event of Default
arising under Clause 23.1 (Non-payment) of this Agreement);6.2.2
    
    any right, power, authority or discretion vested in the Majority Lenders or any other person
has not been exercised; and6.2.3
    
    any notice or request made by the Borrower is made on behalf of and with the consent and
knowledge of all the Obligors.6.3
    
    The Security Agent may engage, pay for and rely on the advice or services of any lawyers,
accountants, surveyors or other experts.6.4
    
    The Security Agent may act in relation to the Finance Documents through its personnel and
Delegates.6.5
    
    The Security Agent may disclose to any other Party any information it reasonably believes it
has received as agent under the Finance Documents.6.6
    
    Notwithstanding any other provision of any Finance Document to the contrary, the Security
Agent is not obliged to do or omit to do anything if it would or might in its reasonable
opinion constitute a breach of any law or a breach of a fiduciary duty or duty of
confidentiality.7
    
    ResponsibilityThe Security Agent is not responsible for:7.1
    
    the adequacy, accuracy and/or completeness of any information (whether oral or written)
supplied by any person given in or in connection with any Finance Document or the transactions
contemplated in the Finance Documents.
 128




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##### 



7.2
    
    the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or
any other agreement, arrangement or document entered into, made or executed in anticipation of
or in connection with any Finance Document or the Transaction Security; or7.3
    
    for any failure in perfecting or protecting the Security created by any Transaction Security
Document including any failure to:7.3.1
    
    take any necessary registration or recordings or filings of or otherwise protect the
relevant Security under any laws in any jurisdiction;7.3.2
    
    give notice to any person of the execution of any Transaction Security Document; or7.3.3
    
    to obtain any authorisation for the creation of any Security, unless directly caused by its
gross negligence or wilful misconduct.8
    
    Exclusion of Liability8.1
    
    Without limiting paragraph 8.2 below, the Security Agent will not be liable for any action
taken by it under or in connection with any Finance Document, unless directly caused by its
gross negligence or wilful misconduct.8.2
    
    No Party (other than the Security Agent) may take any proceedings against any officer,
employee or Delegate of the Security Agent in respect of any claim it might have against the
Security Agent or in respect of any act or omission of any kind by that officer, employee or
Delegate in relation to any Finance Document and any officer, employee or Delegate of the
Security Agent may rely on this provision.8.3
    
    The Security Agent will not be liable for any delay (or any related consequences) in
crediting an account with an amount required under the Finance Documents to be paid by the
Security Agent if the Security Agent has taken all necessary steps as soon as reasonably
practicable to comply with the regulations or operating procedures of any recognised clearing
or settlement system used by the Security Agent for that purpose.8.4
    
    The Parties agree that the Security Agent shall not be subject to the duty of care imposed on
trustees by the Trustee Act 2000.8.5
    
    Nothing in this Agreement shall oblige the Security Agent to carry out any know your
customer or other checks in relation to any person on behalf of any other Finance Party and
every other Finance Party confirms to the Security Agent that it is solely responsible for any
such checks it is required to carry out and that it may not rely on any statement in relation
to such checks made by the Security Agent.9
    
    Indemnity9.1
    
    Each other Finance Party shall indemnify the Security Agent, within three Business Days of
demand, against any cost, loss or liability incurred by the Security Agent (otherwise than by
reason of the Security Agents gross negligence or wilful misconduct) in acting as Security
Agent under the Finance Documents (unless the Security Agent has been reimbursed by an Obligor
pursuant to a Finance Document).9.2
    
    The liability shall be divided between such Finance Parties pro rata to their respective
aggregate Commitments from time to time or if all Commitments have been reduced to zero, their
respective aggregate Commitments immediately prior to that reduction.
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9.3
    
    The Security Agent may, in priority to any payment to the Finance Parties, indemnify itself
out of the Obligors assets charged by the Transaction Security Documents in respect of, and
pay and retain, all sums necessary to give effect to this indemnity and to all other
indemnities given to it in the other Finance Documents in its capacity as Security Agent. The
Security Agent shall have a lien on the Transaction Security Documents and the proceeds of
enforcement of the Transaction Security Documents for all such sums.10
    
    Resignation and Additional Security Agents10.1
    
    The Security Agent may resign and appoint one of its Affiliates acting through an office
in the United Kingdom as successor by giving notice to the other Finance Parties and the
Borrower.10.2
    
    Alternatively the Security Agent may resign by giving notice to the other Finance Parties and
the Borrower, in which case the Majority Lenders (after consultation with the Borrower) may
appoint a successor Security Agent.10.3
    
    If the Majority Lenders have not appointed a successor Security Agent in accordance with
paragraph 10.2 above within 30 days after notice of resignation was given, the Security Agent
(after consultation with the Borrower) may appoint a successor Security Agent (acting through
an office in the United Kingdom).10.4
    
    The retiring Security Agent shall, at its own cost, make available to the successor Security
Agent such documents and records and provide such assistance as the successor Security Agent
may reasonably request for the purposes of performing its functions as Security Agent under
the Finance Documents.10.5
    
    The Security Agents resignation notice shall only take effect upon the appointment of a
successor.10.6
    
    Upon the appointment of a successor, the retiring Security Agent shall be discharged from any
further obligation in respect of the Finance Documents but shall remain entitled to the
benefit of this Schedule. Its successor and each of the other Parties shall have the same
rights and obligations amongst themselves as they would have had if such successor had been an
original Party.10.7
    
    After consultation with the Borrower, the Majority Lenders may, by notice to the Security
Agent, require it to resign in accordance with paragraph 10.2 above. In this event, the
Security Agent shall resign in accordance with paragraph 10.2 above.10.8
    
    The Security Agent may at any time appoint (and subsequently remove) any person to act as a
separate security agent or trustee or as a co-agent or co-trustee jointly with it (any such
person, an Additional Security Agent):10.8.1
    
    if it is necessary in performing its duties and if the Security Agent considers that
appointment to be in the interest of the Finance Parties; or10.8.2
    
    for the purposes of complying with or conforming to any legal requirements restrictions or
conditions which the Security Agent deems to be relevant; or10.8.3
    
    for the purposes of obtaining or enforcing any judgement or decree in any jurisdiction, and
the Security Agent will give notice to the other Parties of any such appointment.10.9
    
    Any Additional Security Agent appointed in accordance with paragraph 10.8 above shall
(subject to the terms of this Agreement) have the rights, powers and
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discretions (not exceeding those conferred on the Security Agent by this Agreement) and
the duties and obligations as are conferred or imposed on the Additional Security Agent
by the instrument of its appointment.10.10
    
    The remuneration that the Security Agent may pay to any Additional Security Agent and any
reasonable costs and expenses (properly incurred) incurred by any Additional Security Agent in
performing its functions pursuant to its appointment will, for the purposes of this Agreement,
be treated as costs and expenses incurred by the Security Agent.11
    
    Confidentiality11.1
    
    In acting as agent for the Finance Parties, the Security Agent shall be regarded as
acting through its agency division which shall be treated as a separate entity from any other
of its divisions or departments.11.2
    
    If information is received by another division or department of the Security Agent, it may be
treated as confidential to that division or department and the Security Agent shall not be
deemed to have notice of it.11.3
    
    Notwithstanding any other provision of any Finance Document to the contrary, the Security
Agent shall not be obliged to disclose to any other person (i) any confidential information or
(ii) any other information if the disclosure would or might in its reasonable opinion
constitute a breach of a fiduciary duty.12
    
    Relationship with the Lenders12.1
    
    The Security Agent may treat each Lender as a Lender, entitled to payments under this
Agreement and acting through its Facility Office unless it has received not less than five
Business Days prior notice from that Party or the Agent to the contrary.13
    
    Credit Appraisal13.1
    
    Without affecting the responsibility of any Obligor for information supplied by it or on
its behalf in connection with any Finance Document, each other Finance Party confirms to the
Security Agent that it has been, and will continue to be, solely responsible for making its
own independent appraisal and investigation of all risks arising under or in connection with
any Finance Document including but not limited to:13.1.1
    
    the financial condition, status and nature of each member of the Group;13.1.2
    
    the legality, validity, effectiveness, adequacy or enforceability of any Finance Document
and the Transaction Security and any other agreement, arrangement or document entered into,
made or executed in anticipation of, under or in connection with any Finance Document or the
Transaction Security;13.1.3
    
    whether that Finance Party has recourse, and the nature and extent of that recourse, against
any Party or any of its respective assets under or in connection with any Finance Document,
the Transaction Security, the transactions contemplated by the Finance Documents or any other
agreement, arrangement or document entered into, made or executed in anticipation of, under or
in connection with any Finance Document;13.1.4
    
    the adequacy, accuracy and/or completeness of any information provided by the Security
Agent, any other Party or by any other person under or in connection with any Finance
Document, the transactions contemplated by the Finance Documents
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or any other agreement, arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Finance Document; and13.1.5
    
    the right or title of any person in or to, or the value or sufficiency of any part of the
Charged Property, the priority of any of the Transaction Security or the existence of any
Security affecting the Charged Property.14
    
    Deduction from Amounts Payable by the Security AgentIf any Party owes an amount to the Security Agent under the Finance Documents the
Security Agent may, after giving notice to that Party, deduct an amount not exceeding
that amount from any payment to that Party which the Security Agent would otherwise be
obliged to make under the Finance Documents and apply the amount deducted in or towards
satisfaction of the amount owed. For the purposes of the Finance Documents that Party
shall be regarded as having received any amount so deducted.15
    
    TitleThe Security Agent may accept without enquiry the title (if any) which an Obligor
may have to any asset over which Security is intended to be created by any Transaction
Security Document.16
    
    HoldingThe Security Agent is not obliged to hold any share certificates or title deed, any
Transaction Security Document or other document in connection with any asset over which
Security is intended to be created by any Transaction Security Documents in its own
possession. The Security Agent may permit the relevant Obligor or any professional
adviser of the Security Agent to retain all such title deeds and other documents in its
possession.17
    
    InvestmentsExcept as otherwise provided in any Transaction Security Document, all moneys which
are received by the Security Agent under that Transaction Security Document may be
invested in the name of or under the control of the Security Agent in any investments
which may be selected by the Security Agent. Additionally, those moneys may be placed on
deposit in the name of or under the control of the Security Agent at such bank or
institution (including itself) and upon such terms as it may think fit.18
    
    EnforcementThe Security Agent shall to the extent practicable use all reasonable endeavours to
enforce the Security constituted by the Transaction Security Documents if it receives
instructions to do so from the relevant Finance Parties that comply with Clause 26.20
(Instructions).19
    
    Recoveries to be held on Trust19.1
    
    The Security Agent shall hold the Recoveries on trust for the Finance Parties.19.2
    
    The Recoveries shall be distributed between the Finance Parties in accordance with Clause
29.5 (Proceeds of enforcement). Once so applied, the Security Agent shall be under no
obligation to monitor how the relevant person receiving any such amount has applied such
amounts.
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19.3
    
    Only amounts actually received by the Security Agent shall be capable of being applied by the
Security Agent in accordance with this paragraph 19.19.4
    
    If the Security Agent receives any distribution under this Agreement or any other document
otherwise than in cash from any person, the Security Agent may realise such distribution as it
sees fit and then shall apply the proceeds of such realisation in accordance with the
provisions of this Agreement.19.5
    
    If the Security Agent receives any amount under this Agreement or under any other Finance
Document in a currency other than the currency of the relevant Debt the Security Agent may
convert such amount into the currency of the relevant Debt at the Security Agents spot rate
of exchange for the purchase of the relevant currency with the currency of the amount received
in the London foreign exchange market.20
    
    Payment of TaxesThe Security Agent shall be entitled to make such deductions and withholdings (on
account of Taxes or otherwise) from payments to any other Finance Party as it is required
by any applicable law to make and to pay out of amounts due to any other Finance Party
all Taxes assessed against it in respect of any property charged or assigned pursuant to
the Transaction Security Documents or by virtue of its role as agent or trustee under the
Finance Documents.21
    
    Conflict with Transaction Security DocumentsIf there is any conflict between the provisions of this Schedule and any Transaction
Security Documents with regard to instructions to or other matters affecting the Security
Agent, this Schedule will prevail.22
    
    Discharge DateForthwith upon the date on which all present and future sums, obligations or
liabilities from time to time due, owing or incurred (actually or contingently) by any
Obligor to a Finance Party under or in connection with the Finance Documents shall have
been irrevocably discharged in full and all Commitments have been cancelled, the trusts
set out in Clause 26.18 (Appointment of Security Agent) and in this Schedule 12 shall be
wound up and all the rights, duties and obligations of the Security Agent to the other
Finance Parties (but not liabilities already incurred for negligence or breach of duty)
shall cease.
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Execution pages
 The Borrower
 Executedas a Deedby
    
    
    )Clarendon Holdings, Inc.
    
    
    )acting by:
    
    
    )
    
    
    /s/ Karl J. Wall

DirectorKarl J. Walls/s/ Donna L. Stolz

DirectorDonna L. Stolz
 The Original Obligor
 Executedas a Deedby
    
    
    )Clarendon Holdings, Inc.
    
    
    )acting by:
    
    
    )
    
    
    /s/ Karl J. Wall

DirectorKarl J. Wall/s/ Donna L. Stolz

DirectorDonna L. Stolz
 134




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The Original Lender
 Executedas a Deedby
    
    
    )National Australia Bank Limited
    
    
    )ABN 12004044937
    
    
    )acting by:
    
    
    
    
    
    /s/ Russell Evans

DirectorRussell Evans/s/ Iris R. Edwards

DirectorIris R. Edwards
 The Arranger
 Executedas a Deedby
    
    
    )National Australia Bank Limited
    
    
    )ABN 12004044937
    
    
    )acting by:
    
    
    
    
    
    /s/ Russell Evans

DirectorRussell Evans/s/ Iris R. Edwards

DirectorIris R. Edwards
 135




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The Agent
 Executedas a Deedby
    
    
    )National Australia Bank Limited
    
    
    )ABN 12004044937
    
    
    )acting by:
    
    
    
    
    
    /s/ Russell Evans

DirectorRussell Evans/s/ Iris R. Edwards

DirectorIris R. Edwards
 The Security Agent
 Executedas a Deedby
    
    
    )National Australia Bank Limited
    
    
    )ABN 12004044937
    
    
    )acting by:
    
    
    
    
    
    /s/ Russell Evans

DirectorRussell Evans/s/ Iris R. Edwards

DirectorIris R. Edwards
 136