Document:

Exhibit 10.42

Exhibit 10.42

AMENDMENT TO SENIOR SUBORDINATED NOTE

THIS AMENDMENT (the “Amendment”), dated as of this 28th day of September, 2009 by
and between CAPTERRA FINANCIAL GROUP, INC., formerly know as ACROSS AMERICA REAL ESTATE CORP., a
Colorado corporation, having an office at 1440 Blake Street, Denver, Colorado 80202 (“Maker”) and
BOCO INVESTMENTS, LLC, a Colorado limited liability company, having an office at 103 West Mountain
Ave., Fort Collins, Colorado 80524 (“Holder”).

WITNESSETH:

WHEREAS, Maker has executed and delivered to Holder a Senior Subordinated Note and a Senior
Subordinated Revolving Note dated September 28, 2006(the “Notes”) to evidence Maker’s indebtedness
to Holder in the principal amount of Seven Million Dollars ($7,000,000.00); and

WHEREAS, Maker and Holder amended such Senior Subordinated Note and Senior Subordinated
Revolving Note (“Amendment No. 1”) on May 7, 2007 to further subordinate the Note to a credit
facility to be extended to Maker by United Western Bank and otherwise modify certain terms and
provisions of the Note; and

WHEREAS, Maker and Holder amended such Senior Subordinated Note and Senior Subordinated
Revolving Note (“Amendment No. 2”) on August 10, 2007 to waive a negative covenant which listed an
“Event of Default” under the Note as a net loss under GAAP of greater than $1,000,000 in any
calendar quarter; and

WHEREAS, Maker and Holder amended such Senior Subordinated Note and Senior Subordinated
Revolving Note (“Amendment No. 3”) on June 4, 2008 to include in the definition of “Senior Debt “
the indebtedness to Holder under that certain Senior Subordinated Note with Holder dated June 4,
2008; and

WHEREAS, Maker and Holder wish to further amend, clarify and define certain terms and
provisions of the Note;

NOW, THEREFORE, in consideration of the premises set forth herein above, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending
to be legally bound, the parties hereto do hereby mutually and expressly understand and agree as
follows:

1. Maturity Date. Notwithstanding any other provision in the Note, the maturity date
of this Note shall be September 28, 2012.

 

 

 

2. Representations and Warranties. Maker hereby represents and warrants, and Holder
hereby acknowledges and agrees, that (a) no default has occurred under the Note, (b) except as
provided herein, the Note has not been modified or amended, and (c) the execution and delivery of
this Agreement has been duly authorized by all necessary action of the parties hereto.

3. Interest Payments. Maker and Holder hereby agree that, beginning with the interest
payment due September 30, 2009, accrued interest will be paid in the common stock of Maker on a
quarterly basis through December 31, 2010. The common stock will be priced at the average closing
price of the Maker’s common stock during that quarter.

4. Ratification. Except as modified by this Amendment, all of the terms of the Note
are ratified and reaffirmed and remain in full force and effect.

5. Binding Provisions. The terms and conditions of this Amendment shall be binding
upon and shall inure to the benefit of the parties hereto, their successors and assigns.

6. Governing Law. The terms and conditions of this Amendment shall be
governed by the applicable laws of the State of Colorado.

IN WITNESS WHEREOF the parties hereto have each caused this Amendment to be executed by their
respective duly authorized representatives, as of the day and year first above written.

	 	 	 	 	 
	 	MAKER:

CAPTERRA FINANCIAL GROUP, INC., formerly know as ACROSS AMERICA REAL ESTATE CORP., a Colorado corporation

 	 
	 	By:  	/s/
 James W. Creamer III	 
	 	 	James W. Creamer III, President 	 
	 	 	 	 
	 
	 	HOLDER:

BOCO INVESTMENTS, LLC, a Colorado limited liability company

 	 
	 	By:  	/s/
 Joseph C. Zimlich	 
	 	 	Name:  	Joseph C. Zimlich	 
	 	 	Title:  	President of Managing Memberexv10w1

Exhibit 10.1

MULTICURRENCY LETTER OF CREDIT FACILITY AGREEMENT

US$200,000,000

FACILITY AGREEMENT

Dated 6 October 2009

for

ASPEN INSURANCE LIMITED

as Borrower A

ASPEN INSURANCE UK LIMITED

as Borrower B

and

BARCLAYS BANK PLC

as Issuing Bank

 

 

CONTENTS

	 	 	 	 	 	 	 
	Clause	 	 	 	Page	 
	1.
	 	Definitions And Interpretation	 	 	3	 
	2.
	 	The Facility	 	 	24	 
	3.
	 	Purpose	 	 	24	 
	4.
	 	Conditions Of Utilisation	 	 	25	 
	5.
	 	Utilisation	 	 	26	 
	6.
	 	Letters Of Credit	 	 	29	 
	7.
	 	Default Interest	 	 	31	 
	8.
	 	Changes To The Calculation Of Interest	 	 	32	 
	9.
	 	Fees	 	 	33	 
	10.
	 	Tax Gross Up And Indemnities	 	 	33	 
	11.
	 	Increased Costs	 	 	35	 
	12.
	 	Other Indemnities	 	 	36	 
	13.
	 	Mitigation By The Issuing Bank	 	 	37	 
	14.
	 	Costs And Expenses	 	 	37	 
	15.
	 	Representations And Warranties	 	 	38	 
	16.
	 	Affirmative Covenants	 	 	43	 
	17.
	 	Negative Covenants	 	 	48	 
	18.
	 	Events Of Default	 	 	54	 
	19.
	 	Collateral	 	 	57	 
	20.
	 	Changes To The Issuing Bank	 	 	59	 
	21.
	 	Changes To The Borrower	 	 	59	 
	22.
	 	Conduct Of Business By The Issuing Bank	 	 	60	 
	23.
	 	Payment Mechanics	 	 	60	 
	24.
	 	Set-Off	 	 	62	 
	25.
	 	Notices	 	 	62	 
	26.
	 	Calculations And Certificates	 	 	63	 
	27.
	 	Partial Invalidity	 	 	64	 
	28.
	 	Remedies And Waivers	 	 	64	 
	29.
	 	Amendments And Waivers	 	 	64	 
	30.
	 	Confidentiality	 	 	64	 
	31.
	 	Counterparts	 	 	66	 
	32.
	 	Governing Law	 	 	66	 

 

 

	 	 	 	 	 	 	 
	Clause	 	 	 	Page	 
	33.
	 	Jurisdiction	 	 	66	 
	34.
	 	Service Of Process	 	 	67	 

	 	 	 	 	 
	SCHEDULE 1

	 	Part 1 Conditions Precedent
	 	68
	 
	 	 	 	 
	Part 2

	 	 Conditions Precedent To Acceding Borrower
	 	70
	 
	 	 	 	 
	SCHEDULE 2

	 	Utilisation Request
	 	72
	 
	 	 	 	 
	SCHEDULE 3

	 	Mandatory Cost Formulae
	 	74
	 
	 	 	 	 
	SCHEDULE 4

	 	Form Of Collateral Compliance Certificate	 	 
	 
	 	 	 	 
	SCHEDULE 5

	 	Form Of Outstanding LC Certificate	 	 
	 
	 	 	 	 
	SCHEDULE 6

	 	Financial Indebtedness	 	 
	 
	 	 	 	 
	SCHEDULE 7

	 	Compliance Certificate	 	 
	 
	 	 	 	 
	SCHEDULE 8

	 	Existing Security At The Date Of This Agreement	 	 
	 
	 	 	 	 
	SCHEDULE 9

	 	Consents, Authorisations, Filings And Notices	 	 
	 
	 	 	 	 
	SCHEDULE 10

	 	Subsidiaries	 	 

 

 

THIS AGREEMENT is dated 6 October 2009 and made between:

	(1)	 	ASPEN INSURANCE LIMITED a Bermuda exempted company with company registered number 32866 and
registered address Maxwell Roberts Building, 1 Church Street, Hamilton, HM11, Bermuda
(“Borrower A”);
	 
	(2)	 	ASPEN INSURANCE UK LIMITED a company incorporated in England and Wales with company
registered number 01184193 and registered address being 30 Fenchurch Street, London EC3M 3BD
(“Borrower B”); and
	 
	(3)	 	BARCLAYS BANK PLC as issuing bank (the “Issuing Bank”).

IT IS AGREED as follows:

SECTION 1

INTERPRETATION

	1.	 	DEFINITIONS AND INTERPRETATION
	 
	1.1	 	Definitions
	 
	 	 	In this Agreement:
	 
	 	 	“Acceding Borrower” means:

	 	(a)	 	a member of the Group which comes within the definition of Third Party
Borrower; and
	 
	 	(b)	 	which has satisfied the provisions of Schedule 1 Part 2 (Conditions Precedent
to Acceding Borrower); and
	 
	 	(c)	 	which has been approved by the Issuing Bank.

“Acceding Borrower Collateral Control Agreement” means any agreement between the Custodian,
an Acceding Borrower and the Issuing Bank relating to an Acceding Borrower Custodian
Account.

“Acceding Borrower Collateral Security Agreement” means any agreement under which the
Security is created (or expressed to be created) by an Acceding Borrower over an Acceding
Borrower Custodian Account and an Acceding Borrower Custody Agreement.

“Acceding Borrower Custodian Account” means any account held in the name of an Acceding
Borrower with the Custodian under an Acceding Borrower Custody Agreement.

“Acceding Borrower Custody Agreement” means any agreement between an Acceding Borrower and
the Custodian under which the Custodian agrees to hold certain assets as custodian on behalf
of an Acceding Borrower and to establish an Acceding Borrower Custodian Account.

- 3 -

 

“Affiliate” means, in relation to any person, a Subsidiary of that person or a Holding
Company of that person or any other Subsidiary of that Holding Company.

“AM Best” means the A.M. Best credit rating organisation and its successors.

“Approved Optional Currency” means any of the following:

(a) Pounds Sterling, the lawful currency of the United Kingdom; and

(b) Euro, the lawful currency of the Participating Member States.

“Authorisation” means an authorisation, consent, approval, resolution, licence, exemption,
filing, notarisation or registration.

“Authorised Signatory” means, with respect to a Borrower, any individual (a) who has been
authorised to sign Finance Documents, and certificates, instruments and documents related
thereto, on behalf of that Borrower and (b) who is named on, and whose specimen signature
appears on, a bank mandate issued by that Borrower to the Issuing Bank.

“Availability Period” means the period from and including the date of this Agreement to the
Final Maturity Date.

“Available Commitment” means the Commitment minus:

	 	(a)	 	the Base Currency Amount of any outstanding Letters of Credit (including,
for the avoidance of doubt, the Existing LoCs); and
	 
	 	(b)	 	in relation to any proposed Utilisation, the Base Currency Amount of any
Letters of Credit that are scheduled to be issued on or before the proposed
Utilisation Date,

other than any Letters of Credit that are due to expire or be cancelled on or before the
proposed Utilisation Date.

“Base Currency” means US Dollars (US$), the lawful currency of the United States of America.

“Base Currency Amount” means, in relation to a Letter of Credit denominated in US$, the
amount specified in the Utilisation Request delivered by a Borrower for that Letter of
Credit and, in relation to a Letter of Credit denominated in any Optional Currency, the
amount specified in the Utilisation Request delivered by that Borrower for that Letter of
Credit converted into US$ at a rate of exchange as set out in the most recent Outstanding LC
Certificate delivered (or to be delivered before the relevant Utilisation Date) in
accordance with Clause 19 (Collateral).

“Bermuda Companies Law” means The Companies Act of 1981 of Bermuda and the regulations
promulgated thereunder.

“Bermuda Insurance Law” means The Insurance Act of 1978 of Bermuda and the regulations
promulgated thereunder.

- 4 -

 

“Board” means the Board of Governors of the Federal Reserve System of the United States (or
any successor).

“Borrower A Collateral Control Agreement” means the agreement dated on or about the date of
this Agreement between the Custodian, Borrower A and the Issuing Bank relating to the
Borrower A Custodian Account.

“Borrower A Collateral Security Agreement” means the agreement dated on or about the date of
this Agreement under which the Security is created (or expressed to be created) by Borrower
A over the Borrower A Custodian Account and the Borrower A Custody Agreement.

“Borrower A Custodian Account” means the account with account number 471453 held in the name
of Borrower A with the Custodian under the Borrower A Custody Agreement.

“Borrower A Custody Agreement” means the agreement between Borrower A and the Custodian
dated 6 March 2003 under which the custodian agrees to hold certain assets as Custodian on
behalf of Borrower A and to establish the Borrower A Custodian Account.

“Borrower B Collateral Control Agreement” means the agreement dated on or about the
date of this Agreement between the Custodian, Borrower B and the Issuing Bank relating to
the Borrower B Custodian Account.

“Borrower B Collateral Security Agreement” means the agreement dated on or about the date of
this Agreement under which the Security is created (or expressed to be created) by Borrower
B over the Borrower B Custodian Account and the Borrower B Custody Agreement.

“Borrower B Custodian Account” means the account with account number 471452 held in the name
of Borrower B with the Custodian under the Borrower B Custody Agreement.

“Borrower B Custody Agreement” means the agreement between Borrower B and the Custodian
dated 27 February 2003 under which the Custodian agrees to hold certain assets as custodian
on behalf of Borrower B and to establish the Borrower B Custodian Account.

“Borrowers” means the Original Borrowers and any Acceding Borrower and “Borrower” shall be
construed accordingly.

“Break Costs” means the amount (if any) by which:

	 	(a)	 	the interest which the Issuing Bank would have received for the period from
the date of receipt of all or any part of an Unpaid Sum to the last day of the
current Interest Period in respect of that Unpaid Sum, had the Unpaid Sum received
been paid on the last day of that Interest Period (assuming that interest on the
Unpaid Sum was equal to the aggregate of the applicable

- 5 -

 

	 	 	 	LIBOR (or, if applicable, the
rate selected by the Issuing Bank pursuant to Clause 8.2(a)(ii) (Market
Disruption)));

     exceeds:

	 	(b)	 	the amount which the Issuing Bank would be able to obtain by placing an
amount equal to the 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” means a day (other than a Saturday or Sunday) on which banks are open for
general business in London and New York.

“Capital Lease Obligations” means in relation to any Person, the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying the right to
use) real or personal property, or a combination thereof, which obligations are required to
be classified and accounted for as capital leases on a balance sheet of such Person under US
GAAP and, for the purposes of this Agreement, the amount of such obligations at any time
shall be the capitalised amount thereof at such time determined in accordance with US GAAP.

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

“Cash Equivalents” means:

	 	(a)	 	marketable direct obligations issued by, or unconditionally guaranteed by, the
United States Government or issued by any agency thereof and backed by the full faith
and credit of the United States, in each case maturing within one year from the date of
acquisition;
	 
	 	(b)	 	certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of acquisition
issued by the Issuing Bank or by any commercial bank organised under the laws of the
United States or any state thereof having combined capital and surplus of not less than
US$500,000,000;
	 
	 	(c)	 	commercial paper of an issuer rated at least ‘A-1’ by S&P or ‘P-1’ by Moody’s,
or carrying an equivalent rating by a nationally recognised rating agency, if both of
the two named rating agencies cease publishing ratings of commercial paper issuers
generally, and maturing within six months from the date of acquisition;
	 
	 	(d)	 	repurchase obligations of the Issuing Bank or of any commercial bank satisfying
the requirements of sub-clause (b) of this definition, having a term of not more than
30 days, with respect to securities issued or fully guaranteed or insured by the United
States government;

- 6 -

 

	 	(e)	 	securities with maturities of one year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least ‘A’ by S&P or ‘A’ by Moody’s;
	 
	 	(f)	 	securities with maturities of six months or less from the date of acquisition
backed by standby letters of credit issued by the Issuing Bank or any commercial bank
satisfying the requirements of sub-clause (b) of this definition;
	 
	 	(g)	 	money market mutual or similar funds that invest exclusively in assets
satisfying the requirements of sub-clauses (a) through (f) of this definition; or
	 
	 	(h)	 	money market funds that:

	 	(i)	 	comply with the criteria set forth in SEC Rule 2a-7 under the
Investment Company Act of 1940;
	 
	 	(ii)	 	are rated ‘AAA’ by S&P and ‘Aaa’ by Moody’s; and
	 
	 	(iii)	 	have portfolio assets of at least US$5,000,000,000.

     “Change of Control” means any of the following:

	 	(a)	 	any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934 (the “Exchange Act”)), other than the
Parent or any Subsidiary, shall become, or obtain rights (whether by means of warrants,
options or otherwise (other than any such warrants, options or other rights which are
not exercisable prior to the Final Maturity Date)) to become, the “beneficial owner”
(as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or
indirectly, of shares of Capital Stock representing more than 50% of the total voting
power of any Borrower; or
	 
	 	(b)	 	the occupation of a majority of the seats (other than vacant seats) of the
board of directors of the Parent by Persons who are not:

	 	(i)	 	the directors of the Parent on the date of this Agreement;
	 
	 	(ii)	 	nominated by the board of directors of the Parent, or
	 
	 	(iii)	 	appointed by a majority of the directors described in (i) and
(ii) that are members of the board of directors at the time of such appointment.

“Charged Assets” means the Collateral Assets and any other assets subject (or expressed to
be subject) to Security under the Security Documents.

“Code” means the Internal Revenue Code of 1986.

“Collateral” means the Collateral Assets which are subject to perfected Security in favour
of the Issuing Bank under the Security Documents.

- 7 -

 

“Collateral Assets” means any Eligible Collateral held in the Borrower A Custodian Account,
the Borrower B Custodian Account or any Acceding Borrower Borrower Custodian Account.

“Collateral Compliance Certificate” means a certificate substantially in the form set out in
Schedule 4 (Form of Collateral Compliance Certificate).

“Collateral Control Agreements” means each of the Borrower A Collateral Control Agreement,
the Borrower B Collateral Control Agreement and any Acceding Borrower Collateral
Control Agreement.

“Collateral Margin” means (subject to Clause 19 (Collateral)):

	 	(a)	 	in the case of Eligible Collateral A only:

	 	(i)	 	where such Eligible Collateral A has a maturity of 2 years or
less, 95 per cent. (except where such Eligible Collateral falls within paragraph
(e) of the definition of “Eligible Collateral A”);
	 
	 	(ii)	 	where such Eligible Collateral A (x) has a maturity of greater
than 2 years but less than or equal to 10 years or (y) falls within paragraph
(e) of the definition of “Eligible Collateral A”, 90 per cent.; and
	 
	 	(iii)	 	where such Eligible Collateral A has a maturity of greater than
10 years, 85 per cent.;

	 	(b)	 	subject to paragraph (c) below, in the case of Eligible Collateral B only:

	 	(i)	 	where such Eligible Collateral B has a maturity of 2 years or
less, 90 per cent.;
	 
	 	(ii)	 	where such Eligible Collateral B has a maturity of greater than 2
years but less than or equal to 10 years, 85 per cent.; and
	 
	 	(iii)	 	where such Eligible Collateral B has a maturity of greater than
10 years, 80 per cent.; and

	 	(c)	 	in the case of Eligible Collateral B only, with effect from the date on which
the US Federal National Mortgage Association and/or the US Federal Home Loan Mortgage
Corporation, as the case may be, is no longer subject to Conservatorship:

	 	(i)	 	where such Eligible Collateral B has a maturity of 2 years or
less, 82.5 per cent.;
	 
	 	(ii)	 	where such Eligible Collateral B has a maturity of greater than 2
years but less than or equal to 10 years, 77.5 per cent.; and
	 
	 	(iii)	 	where such Eligible Collateral B has a maturity of greater than
10 years, 72.5 per cent.

- 8 -

 

“Collateralisation Ratio” means, in relation to each Borrower, at any time, the ratio
(expressed as a percentage) of: (i) the Collateral Value attributable to that Borrower; to
(ii) the aggregate amount of all Letters of Credit outstanding to that Borrower (denominated
in US$ and determined by reference to the most recent calculations delivered in accordance
with Clause 19 (Collateral)).

“Collateral Security Agreements” mean each of the Borrower A Collateral Security Agreement,
Borrower B Collateral Security Agreement and any Acceding Borrower Collateral Security
Agreement.

“Collateral Value” means, in relation to each Borrower, at any time, the aggregate of:

	 	(a)	 	the Market Value of each type of Eligible Collateral deposited by that Borrower
(denominated in US$ and determined by reference to the most recent calculations
delivered in accordance with Clause 19 (Collateral)); multiplied by
	 
	 	(b)	 	the Collateral Margin applicable to that Eligible Collateral.

“Commitment” means US$200,000,000 to the extent not cancelled or reduced under this
Agreement.

“Commonly Controlled Entity” means an entity, whether or not incorporated, that is under
common control with the Parent or any Subsidiary within the meaning of Section 4001 of ERISA
or is part of a group that includes the Parent or any Subsidiary and that is treated as a
single employer under Section 414 of the Code.

“Compliance Certificate” means a certificate substantially in the form set out in Schedule 7
(Form of Compliance Certificate).

“Confidential Information” means all information relating to the Borrowers or their
Subsidiaries, the Finance Documents or the Facility of which the Issuing Bank becomes aware
in its capacity as Issuing Bank from any Borrower, any of its Subsidiaries or any of their
respective advisers in whatever form, 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 information other than as a direct or indirect result of
any breach by the Issuing Bank of Clause 30 (Confidentiality); or
	 
	 	(b)	 	is identified in writing at the time of delivery as non-confidential by a
Borrower or any Subsidiary thereof or any of their respective advisers; or
	 
	 	(c)	 	is known by the Issuing Bank before the date the information is disclosed to it
or is lawfully obtained by the Issuing Bank from a source which is, as far as the
Issuing Bank is aware, unconnected with the Group and which, in either case, as far as
the Issuing Bank is aware, has not been obtained in breach of, and is not otherwise
subject to, any obligation of confidentiality.

“Confidentiality Undertaking” means a confidentiality agreement substantially in the form of
the LMA Master Confidentiality Undertaking for Use With

- 9 -

 

Administration/Settlement Service
Providers or such other form of confidentiality undertaking agreed between Borrower A and
the Issuing Bank.

“Conservatorship” means the appointment of a conservator pursuant to the Federal Housing
Finance Regulatory Reform Act of 2008 and the Federal Housing Enterprises Finance Safety and
Soundness Act of 1992.

“Contractual Obligation” means in relation to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to which such
Person is a party or by which it or any of its property is bound.

“Custodian” means The Bank of New York Mellon.

“Custodian Accounts” means each of the Borrower A Custodian Account, the Borrower B
Custodian Account and any Acceding Borrower Custodian Account.

“Custody Agreements” means each of the Borrower A Custodian Agreement, the Borrower B
Custodian Agreement and any Acceding Borrower Custodian Agreement.

“Default” means any of the events specified in Clause 18 (Events of Default), whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

“Disposition” means with respect to any property, any sale, lease, sale and leaseback,
assignment, conveyance, transfer or other disposition thereof. The terms “Dispose” and
“Disposed of” shall have correlative meanings.

“Disruption Event” means either or both of:

	 	(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,

and which (in either such case) is not caused by, and is beyond the control of, the party
whose operations are disrupted.

“Eligible Collateral” means Eligible Collateral A and Eligible Collateral B.

“Eligible Collateral A” means:

	 	(a)	 	debt securities issued by, or the payment of which is unconditionally backed by
the full faith and credit of, the United States of America;

- 10 -

 

	 	(b)	 	debt securities issued by, or the payment of which is unconditionally backed by
the full faith and credit of, the governments of any of the following countries: the
United Kingdom, France, Germany and Japan, provided that such country is a full member
of the Organisation for Economic Co-operation and Development;
	 
	 	(c)	 	debt securities issued by the US Government National Mortgage Association;
	 
	 	(d)	 	debt securities unconditionally guaranteed by the US Federal Deposit Insurance
Corporation; and
	 
	 	(e)	 	investments in the Permitted Fund not at any one time exceeding US$35,000,000,

and which in each case are deposited with or held by the Custodian and subject to perfected
first priority Security in favour of the Issuing Bank under the Security Documents.

“Eligible Collateral B” means:

	 	(a)	 	debt securities issued by the US Federal National Mortgage Association;
	 
	 	(b)	 	debt securities issued by the US Federal Home Loan Mortgage Corporation;
	 
	 	(c)	 	debt securities issued by any US Federal Home Loan Bank; and
	 
	 	(d)	 	debt securities issued by any US Federal Farm Credit Bank,

and which in each case are deposited with the Custodian and subject to perfected first
priority Security in favour of the Issuing Bank under the Security Documents.

“Enforcement Event” has the meaning given to it in the Collateral Security Agreements.

“Environment” means humans, animals, plants and all other living organisms including
ecological systems of which they form a part and the following media:

	 	(a)	 	air (including air within natural or man-made structures, whether above or
below ground);
	 
	 	(b)	 	water (including territorial, coastal and inland waters, water under or within
land and water in drains and sewers); and
	 
	 	(c)	 	land (including land under water).

“Environmental Law” means any applicable law or regulation which relates to:

	 	(a)	 	the pollution or protection of the Environment;
	 
	 	(b)	 	the conditions of the workplace; or
	 
	 	(c)	 	the generation, handling, storage, use, release or spillage of any substance
which, alone or in combination with any other, is capable of causing harm to the
Environment including any waste.

“Environmental Permits” means any permit and other Authorisation and the filing of any
notification, report or assessment required under any Environmental Law for the

- 11 -

 

operation of the business of a Borrower conducted on or from the properties owned or used by that
Borrower.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“Event of Default” means any of the events specified in Clause 18 (Events of Default),
provided that any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

“Existing Facility Agreement” means the 5-year Credit Agreement dated 2 August, 2005 between
inter alia, the Parent as the Company, The Bank of New York as the Collateral Agent, Bank of
America N.A. and Calyon, New York Branch as Co-Syndication Agents, Credit Suisse, Cayman
Islands Branch and Deutsche Bank AG, New York Branch as Co-Documentation Agents and Barclays
Bank PLC as Administrative Agent.

“Existing LoC” has the meaning given to it in Clause 3.2 (Existing LoCs).

“Expiry Date” means the last day of the Term for a Letter of Credit.

“Facility” means the letter of credit facility made available under this Agreement as
described in Clause 2 (The Facility).

“Facility Office” means the office or offices of the Issuing Bank through which it will
perform its obligations under this Agreement.

“Final Maturity Date” means 31 December 2011.

“Finance Document” means this Agreement, the Security Documents, the Process Agent Letter
and any other document designated as such by the Issuing Bank and Borrower A.

“Financial Indebtedness” of any Person at any date, without duplication, means:

	 	(a)	 	all indebtedness of such Person for borrowed money;
	 
	 	(b)	 	all obligations of such Person for the deferred purchase price of property
or services (other than current trade payables incurred in the ordinary course of
such Person’s business);
	 
	 	(c)	 	all obligations of such Person evidenced by notes, bonds, debentures, loan
agreements or other similar debt instruments;
	 
	 	(d)	 	all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property);
	 
	 	(e)	 	all Capital Lease Obligations of such Person;

- 12 -

 

	 	(f)	 	all obligations of such Person, contingent or otherwise, as an account
party or applicant under or in respect of acceptances, letters of credit, surety
bonds or similar arrangements;
	 
	 	(g)	 	the liquidation value of all mandatorily redeemable preferred Capital Stock
of such Person;

	 	(h)	 	net obligations of such Person under any Swap Contract;
	 
	 	(i)	 	any other instruments or obligations of such Person to the extent that such
instruments or obligations are then classified as indebtedness by S&P;
	 
	 	(j)	 	all Guarantee Obligations of such Person in respect of obligations of the
kind referred to in clauses (a) through (i) above;
	 
	 	(k)	 	all obligations of the kind referred to in clauses (a) through (j) above
secured by any Security on property (including accounts and contract rights) owned by
such Person, whether or not such Person has assumed or become liable for the payment
of such obligation; and
	 
	 	(l)	 	all indebtedness of the kind referred to in clauses (a) through (k) above
of any partnership in which such Person is a general partner to the extent that
applicable law requires that such Person is liable for such indebtedness unless the
terms of such indebtedness expressly provide that such Person is not so liable.

The amount of any net obligation under any Swap contract on any date shall be deemed to be
the Swap Termination Value as of such date. For the avoidance of doubt, Indebtedness
shall not include the obligations of any Insurance Subsidiary under any Primary Policy,
Reinsurance Agreement, Retrocession Agreement or Other Insurance Product which is entered
into in the ordinary course of business.

“Financial Quarter” means the period commencing on the day after one Quarter Date and ending
on the next Quarter Date.

“Governmental Authority” means any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central
bank or other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative functions of or pertaining to government, any securities exchange and any
self-regulatory organisation (including the National Association of Insurance Commissioners,
the U.K. Financial Services Authority and the Bermuda Monetary Authority).

“Group” means the Parent, the Borrowers and their Subsidiaries for the time being.

“Guarantee Obligations” means in relation to any Person (the “guarantor”), means any
obligation, including a reimbursement, counterindemnity or similar obligation, of the
guarantor that guarantees or in effect guarantees, or which is given to induce the creation
of a separate obligation by another Person (including any bank under any Letter of Credit)
that guarantees or in effect guarantees, any Financial Indebtedness of any other

- 13 -

 

third Person (the “primary obligor”) in any manner, whether directly or indirectly,
including any obligation of the guarantor, whether or not contingent,

	 	(a)	 	to purchase any such Financial Indebtedness or any property constituting
direct or indirect security therefore;
	 
	 	(b)	 	to advance or supply funds:

	 	(i)	 	for the purchase or payment of any such Financial
Indebtedness; or
	 
	 	(ii)	 	to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor so as to enable the primary obligor to pay Financial Indebtedness or
other obligation;

	 	(c)	 	to purchase property, securities or services primarily for the purpose of
assuring the owner of any such Financial Indebtedness of the ability of the primary
obligor to make payment of such Indebtedness; or
	 
	 	(d)	 	otherwise to assure or hold harmless the owner of any such Financial
Indebtedness against loss in respect thereof; provided, however, that
the term Guarantee Obligation shall not include:

	 	(i)	 	endorsements of instruments for deposit or collection in the
ordinary course of business; or
	 
	 	(ii)	 	obligations of any Insurance Subsidiary under any Primary
Policy, Reinsurance Agreement, Retrocession Agreement or Other Insurance
Product which is entered into in the ordinary course of business.

The amount of any Guarantee Obligation of any guarantor shall be deemed to be the lower of:

	 	(a)	 	an amount equal to the stated or determinable amount of the Financial
Indebtedness in respect of which such Guarantee Obligation is made as such amount may
be reduced from time to time; and
	 
	 	(b)	 	the maximum amount for which such guarantor may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, as such amount may be
reduced from time to time unless such Financial Indebtedness and the maximum amount
for which such guarantor may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guarantor’s maximum reasonably
anticipated liability in respect thereof as determined by Borrower A in good faith.

“Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon
gas, infectious or medical wastes.

- 14 -

 

“Holding Company” means, in relation to a company or corporation, any other company or
corporation in respect of which it is a Subsidiary.

“Hybrid Capital” means at any time, all subordinated securities, instruments or other
obligations issued by any Borrower to the extent that such securities, instruments or other
obligations (i) are then accorded equity treatment by S&P and (ii) mature no earlier than
the date which is six months after the Final Maturity Date.

“Insolvency” means with respect to any Multiemployer Plan, the condition that such Plan is
insolvent within the meaning of Section 4245 of ERISA.

“Insolvent” pertaining to a condition of Insolvency.

“Insurance Subsidiary” means a Subsidiary of the Parent engaged in the insurance and/or
reinsurance underwriting business.

“Interest Period” means each period determined in accordance with Clause 7.1 (Default
interest) and paragraph (a) of Clause 6.2 (Claims under a Letter of Credit).

“ITA” means the Income Tax Act 2007.

“KPMG” means any member firm of KPMG International, a Swiss cooperative.

“Letter of Credit” means a letter of credit, substantially in the form customarily used by
the Issuing Bank for the type of letter of credit requested or in any other form requested
by a Borrower and agreed by the Issuing Bank (acting in good faith).

“LIBOR” means:

	 	(a)	 	the applicable Screen Rate; or
	 
	 	(b)	 	(if no Screen Rate is available for the relevant currency or Interest
Period) the arithmetic mean of the rates (rounded upwards to four decimal places) as
supplied to the Issuing Bank at its request quoted by the Reference Banks to leading
banks in the London interbank market,

as of 11.00 am (London Time) on the Quotation Day for the offering of deposits in the
relevant currency and for a period comparable to the relevant Interest Period.

“LMA” means the Loan Market Association.

“Mandatory Cost” means the percentage rate per annum calculated by the Issuing Bank in
accordance with Schedule 3 (Mandatory Cost formulae).

“Market Value” means the market value of the relevant Eligible Collateral determined by the
Custodian in accordance with the following principles:

	 	(a)	 	securities listed or traded on any generally recognised securities exchange
shall be valued at the closing sale price. If no sale has been reported for a given
day or if the exchange was not open on a given day, the last published sale price or
the last recorded bid price, whichever is the most recent, shall be used, unless in
the opinion of the Custodian such price does not fairly indicate

- 15 -

 

	 	 	 	the actual market
value, in which case the Custodian may rely on the valuation obtained from a
reputable broker or investment banker as of the valuation date. Securities traded
only in the over-the-counter market shall be valued at the closing representative bid
price for such securities as reported by the NASDAQ reporting system for securities
covered by that system and for other over-the-counter securities at the last current
bid price for such securities in accordance with quotations obtained from a reputable
broker or investment banker as of the valuation date. Notwithstanding the foregoing, the Custodian may
use any other method of valuation which is or becomes generally accepted practice
for valuation of assets in the corporate custody industry;

	 	(b)	 	for the purposes of paragraph (a) above, the Custodian may rely on reports
printed in any newspaper of general circulation published in New York or in any other
newspaper the Custodian deems appropriate, or in any financial periodical or
industry-recognised quotation service, or in the records of any securities exchange,
as sufficient evidence of sale, bid and asked prices, and over-the-counter
quotations;
	 
	 	(c)	 	other securities or assets which cannot be valued under paragraphs (a) to
(b) above shall be valued on the basis of data available from the best available
sources, including employees of the Custodian, brokers or dealers who deal in or are
familiar with the type of investment involved or other qualified appraisers, or by
reference to the market value of similar investments for which a market value is
readily ascertainable;
	 
	 	(d)	 	notwithstanding anything to the contrary in this Agreement, the Custodian
shall have no duty to confirm or validate any information or valuation supplied to
the Custodian from any third party sources described in paragraphs (b) and (c) above,
nor shall the Custodian be responsible for any act or omission of any such source
selected by the Custodian acting in good faith and without gross negligence; and
	 
	 	(e)	 	notwithstanding paragraphs (a) to (d) above, where the Issuing Bank
believes (acting reasonably) that the Custodian’s valuation is not an accurate
reflection of the market of the relevant Eligible Collateral, the Issuing Bank shall
be entitled to obtain (at the cost of the relevant Borrower) a further independent
valuation of the Eligible Collateral.

The Market Value of the Eligible Collateral shall be certified by the Custodian in each
Collateral Compliance Certificate which is required to be delivered in accordance with
Clause 19 (Collateral). The Custodian shall certify the Market Value of each type of
Eligible Collateral in the currency in which it is denominated and shall also certify the
Market Value of each type of Eligible Collateral in US$ converted (where such Eligible
Collateral is not denominated in US$) at the Custodian’s spot rate of exchange for the
purchase of the relevant currency with US$ in the London foreign exchange market at or about
11:00am (London time) (as set out in the relevant Collateral Compliance Certificate) on the
date which is 2 Business Days before the relevant Test Date.

“Material Adverse Effect” means a material adverse effect on:-

- 16 -

 

	 	(a)	 	the business, operations, property or condition (financial or otherwise) of
the Group; or
	 
	 	(b)	 	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 the Issuing Bank under any of the Finance Documents.

“Material Subsidiary” means at any time:

	 	(a)	 	any Subsidiary: (x) the total consolidated assets or total consolidated
revenues of which exceed 10% of the total consolidated assets or total consolidated
revenues, respectively, of the Parent and its Subsidiaries on a consolidated basis at
the end of or for, respectively, the then most recently completed fiscal quarter of
the Parent for which financial statements shall have been delivered to the Issuing
Bank as described in Clause 15.2 (Financial Conditions) or pursuant to Clause 16.1
(Financial Statements); and/or (y) the net assets of which exceed US$100,000,000 at
the end of the then most recently completed fiscal quarter of the Parent for which
financial statements shall have been delivered to the Issuing Bank as described in
Clause 15.2 (Financial Conditions) or pursuant to Clause 16.1 (Financial Statements)
(accounting terms used in this definition have the meanings given to them under US
GAAP);
	 
	 	(b)	 	Aspen Specialty Insurance Company; and
	 
	 	(c)	 	Aspen U.S. Holdings, Inc.

“Month” means a period starting on one day in a calendar month and ending on the numerically
corresponding day in the next calendar month, except that:

	 	(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.

The above rules will only apply to the last Month of any period.

“Monthly Portfolio Valuations” means the portfolio valuation to be delivered to the Issuing
Bank in accordance with Clause 16.2(d) by the Custodian in a form approved by the Issuing
Bank.

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

- 17 -

 

“Multiemployer Plan” means a Plan that is a multiemployer plan as defined in Section
4001(a)(3) of ERISA.

“Obligations” means the unpaid principal of and interest on (including interest accruing
after the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganisation or like proceeding, relating to any of the Borrowers, whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding) the reimbursement
obligations hereunder and all other obligations and liabilities of any of the Borrowers to
the Issuing Bank, whether direct or indirect, absolute or contingent, due or to become due,
or now existing or hereafter incurred, which may arise under, out of, or in connection with,
this Agreement, any other Finance Document, the Letters of Credit or any other document
made, delivered or given in connection herewith or therewith, whether on account of
principal, interest, fees, reimbursement obligations, indemnities, costs, expenses or
otherwise (including all reasonable fees, charges and disbursements of counsel to the
Issuing Bank that are required to be paid by the Borrowers pursuant hereto).

“Optional Currency” means a currency (other than the Base Currency) which complies with the
conditions set out in Clause 4.2 (Conditions relating to Optional Currencies).

“Original Borrowers” means Borrower A and Borrower B.

“Original Financial Statements” means the audited consolidated financial statements of the
Parent for the financial year ended 31 December 2008.

“Other Insurance Product” means any specialty insurance or reinsurance product such as
contingency reinsurance and structured risks.

“Outstanding LC Certificate” means a certificate substantially in the form set out in
Schedule 5 (Form of Outstanding LC Certificate) which sets out:

	 	(a)	 	the aggregate amount of all Letters of Credit then outstanding to each Borrower
in the currency in which those Letters of Credit are denominated; and
	 
	 	(b)	 	the aggregate amount of the Letters of Credit then outstanding to each Borrower
converted into US$ (where such Letters of Credit are not denominated in US$) at the
Issuing Bank’s spot rate of exchange for the purchase of the relevant currency with US$
on the London foreign exchange market at or about 11:00am (London time) (as set out in
the relevant Outstanding LC Certificate) on the date of the relevant Outstanding LC
Certificate.

“Parent” means Aspen Insurance Holdings Limited (a Bermuda exempted limited liability
company with registered number 32164 and registered address Maxwell Roberts Building, 1
Church Street, Hamilton, HM 11 Bermuda).

“Participating Member State” means any member state of the European Communities that adopts
or has adopted the euro as its lawful currency in accordance with legislation of the
European Community relating to Economic and Monetary Union.

“Party” means a party to this Agreement.

- 18 -

 

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of
Title IV of ERISA (or any successor).

“Permitted Fund” means:

	 	(a)	 	the Dreyfus Treasury Prime Cash Management Fund as more fully described in the
prospectus dated June 1 2009 delivered to the Issuing Bank on or before the date of
this Agreement, so long as such fund (i) invests solely in securities issued or
guaranteed as to principal and interest by the U.S government and (ii) continues to be
rated AAA by S&P and Aaa by Moody’s; and
	 
	 	(b)	 	any other money market fund that (i) qualifies as an investment company under
the Investment Company Act of 1940, (ii) meets the requirements of sub-clauses (i) and
(ii) of paragraph (a) above and (iii) has been approved by the Issuing Bank (acting in
good faith),

provided that at any given time there shall only be one Permitted Fund.

“Person” means an individual, partnership, corporation, limited liability company, business
trust, joint stock company, trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.

“Plan” means at a particular time, any employee benefit plan that is covered by ERISA and in
respect of which a Borrower, a Subsidiary or a Commonly Controlled Entity is (or, if such
plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an
“employer” as defined in Section 3(5) of ERISA responsible for contributing to or under or
having any liability in respect of an employee benefit plan or Multiemployer Plan.

“Primary Policy” means any insurance policy issued by an Insurance Subsidiary.

“Private Act” means separate legislation enacted in Bermuda with the intention that such
legislation applies specifically to a Borrower or a Subsidiary in whole or in part.

“Process Agent Letter” means:

	 	(a)	 	the letter dated on or around the date of this Agreement between Borrower A and
Borrower B, appointing Borrower B as its agent for service of process pursuant to this
Agreement and pursuant to the Security Documents; and
	 
	 	(b)	 	any letter between any Acceding Borrower (other than an Acceding Borrower
incorporated in England and Wales) and Borrower B, appointing Borrower B as its agent
for service of process pursuant to this Agreement and pursuant to the Security
Documents.

“Quarter Date” means 31 March, 30 June, 30 September and 31 December in each calendar year.

“Quotation Day” means, in relation to any period for which an interest rate is to be
determined, the day determined by the Issuing Bank in accordance with market practice in the
Relevant Interbank Market (and if quotations would normally be given by leading

- 19 -

 

banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those
days).

“Reference Banks” means the principal London offices of Barclays Bank PLC, HSBC Bank plc and
Lloyds TSB Bank plc or such other banks as may be appointed by the Issuing Bank in
consultation with Borrower A.

“Regulation U” means Regulation U of the Board as in effect from time to time.

“Reinsurance Agreement” means any agreement, contract, treaty, certificate or other
arrangement whereby any Insurance Subsidiary agrees to assume from or reinsure an insurer or
reinsurer for all or part of the liability of such insurer or reinsurer under a policy or
policies of insurance issued by such insurer or reinsurer.

“Relevant Interbank Market” means, in relation to euro, the European interbank market and,
in relation to any other currency, the London interbank market.

“Reorganisation” means with respect to any Multiemployer Plan, the condition that such plan
is in reorganisation within the meaning of Section 4241 of ERISA.

“Repeating Representations” means each of the representations set out in Clause 15
(Representations and warranties) save for Clause 15.2 (Financial Conditions) and Clause
15.18 (No breach of laws).

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than
those events as to which the thirty day notice period is waived under
subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043.

“Representative” means any delegate, agent, manager, administrator, nominee, attorney,
trustee or custodian.

“Requirements of Law” means as to any Person, the Memorandum of Association or the
Certificate of Incorporation and Bye-laws or other organisational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is subject.

“Responsible Officer” means, with respect to a Borrower, the chief executive officer,
president, chief financial officer, finance director or treasurer of such Borrower or of the
Group (so long as, in the case of an individual signing any document in such individual’s
capacity with the Group, such individual is an Authorised Signatory of such Borrower), but
in any event, with respect to financial matters, the chief financial officer, finance
director or Treasurer of such Borrower or (subject to the parenthetical clause above) of the
Group.

“Retrocession Agreement” means any agreement, treaty, certificate or other arrangement
whereby any Insurance Subsidiary cedes to another insurer all or part of such Insurance
Subsidiary’s liability under a policy or policies of insurance reinsured by such Insurance
Subsidiary.

- 20 -

 

“S&P” means Standard & Poor’s Ratings Services and its successors.

“Screen Rate” means the British Bankers Association Interest Settlement Rate for the
relevant currency and period displayed on the appropriate page of the Reuters screen. If
the agreed page is replaced or service ceases to be available, the Issuing Bank may specify
another page or service displaying the appropriate rate after consultation with Borrower A.

“SEC” means the Securities and Exchange Commission, any successor thereto and any analogous
Governmental Authority.

“Security” means a mortgage, charge, pledge, lien or other security interest securing any
obligation of any person or any other agreement or arrangement having a similar effect.

“Security Documents” means the Collateral Security Agreements, the Collateral Control
Agreements, the Custody Agreements and any other document that may at any time be given as
security for any liabilities in connection with any Finance Document.

“Single Employer Plan” means any Plan that is covered by Title IV of ERISA, but that is not
a Multiemployer Plan.

“Subsidiary” means, as to any Person, a corporation, partnership, limited liability company
or other entity of which shares of stock or other ownership interests having ordinary voting
power (other than stock or such other ownership interests having such power only by reason
of the happening of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time owned, directly or
indirectly, by such Person.

“Swap Contracts” means:

	 	(a)	 	any and all rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price or
bond index swaps or options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap transactions,
cross-currency rate swap transactions, currency options, spot contracts, or any other
similar transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is governed by
or subject to any master agreement; and
	 
	 	(b)	 	any and all transactions of any kind, and the related confirmations, which are
subject to the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement, or any other master agreement (any
such master agreement, together with any related schedules, a “Master Agreement”),
including any such obligations or liabilities under any Master Agreement.

- 21 -

 

“Swap Termination Value” means in respect of any one or more Swap Contracts, after taking
into account the effect of any legally enforceable netting agreement relating to such Swap
Contracts:

	 	(a)	 	for any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination value(s); and
	 
	 	(b)	 	for any date prior to the date referenced in clause (a),

the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as
determined based upon one or more mid-market or other readily available quotations provided
by any recognized dealer in such Swap Contracts (which may include the Issuing Bank or any
Affiliate of the Issuing Bank).

“Tax” means any tax, levy, impost, duty or other charge or withholding of a similar nature
(including any penalty or interest payable in connection with any failure to pay or any
delay in paying any of the same).

“Term” means each period under this Agreement for which the Issuing Bank is under a
liability under a Letter of Credit.

“Test Date” means each of:

	 	(a)	 	the last Business Day in each calendar month falling after the date of this
Agreement;
	 
	 	(b)	 	the date which is 2 Business Days after the date of each Utilisation Request;
and
	 
	 	(c)	 	any other date specified by the Issuing Bank to Borrower A on not less than 5
Business Days’ notice.

“Third Party Borrower” means a borrower that is 100% owned by the Parent and:

	 	(a)	 	is a Material Subsidiary; or
	 
	 	(b)	 	has an AM Best Financial Strength rating at all times of no less than B + +.

“Third Party Borrowing” means a Utilisation made in accordance with the provisions of Clause
3.1 (Purpose) and Clause 4.1(b)(ii).

“Unpaid Sum” means any sum due and payable but unpaid by a Borrower under the Finance
Documents.

“US GAAP” means generally accepted accounting principles in the United States of America.

“Utilisation” means a utilisation of the Facility by way of a Letter of Credit.

“Utilisation Date” means the date of a Utilisation, being the date on which a Letter of
Credit is to be issued.

- 22 -

 

“Utilisation Request” means a notice substantially in the form set out in Schedule 2
(Utilisation Request).

“VAT” means value added tax as provided for in the Value Added Tax Act 1994 and any other
tax of a similar nature.

	1.2	 	Construction

	 	(a)	 	Unless a contrary indication appears, any reference in this Agreement to:

	 	(i)	 	the “Issuing Bank”, the “Parent”, a “Borrower”, an “Acceding
Borrower” or any “Party” shall be construed so as to include its successors in
title, permitted assigns and permitted transferees;
	 
	 	(ii)	 	“assets” includes present and future properties, revenues and
rights of every description;
	 
	 	(iii)	 	a “Finance Document” or any other agreement or instrument is a
reference to that Finance Document or other agreement or instrument as amended,
novated, supplemented, extended or restated;
	 
	 	(iv)	 	“indebtedness” includes any obligation (whether incurred as
principal or as surety) for the payment or repayment of money, whether present
or future, actual or contingent;
	 
	 	(v)	 	a “person” includes any individual, firm, company, corporation,
government, state or agency of a state or any association, trust, joint venture,
consortium or partnership (whether or not having separate legal personality);
	 
	 	(vi)	 	a “regulation” includes 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 of
any regulatory, self-regulatory or other authority or organisation;
	 
	 	(vii)	 	a provision of law is a reference to that provision as amended
or re-enacted; and
	 
	 	(viii)	 	a time of day is a reference to London time.

	 	(b)	 	Section, Clause and Schedule headings are for ease of reference only.
	 
	 	(c)	 	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.
	 
	 	(d)	 	A Default or an Event of Default is “continuing” if it has not been remedied or
waived.

	1.3	 	Third Party Rights
	 
	 	 	A person who is not a Party has no right under the Contracts (Rights of Third Parties) Act
1999 to enforce or to enjoy the benefit of any term of this Agreement.

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	2.	 	THE FACILITY

	2.1	 	The Facility
	 
	 	 	Subject to the terms of this Agreement, the Issuing Bank makes available to the Borrowers a
multicurrency revolving letter of credit facility in an aggregate amount equal to the
Commitment.

	3.	 	PURPOSE

	3.1	 	Purpose
	 
	 	 	All Letters of Credit issued for the account of a Borrower under the Facility shall be used
for that Borrower’s reinsurance purposes including those Letters of Credit issued by the
Issuing Bank at the date of this Agreement pursuant to the provisions of the Existing
Facility Agreement.

	3.2	 	Existing LoCs

	 	(a)	 	Borrower A may, on or before the date falling 10 Business Days after the date
of this Agreement, request in writing to the Issuing Bank that certain letters of
credit issued under the Existing Facility Agreement (the “Existing LoCs”) be
transferred from the Existing Facility Agreement and deemed to be issued under this
Agreement. Such request shall set out the principal amount, currency of denomination
and beneficiary of each Existing LoC which is proposed to be so transferred and deemed
issued under this Agreement.
	 
	 	(b)	 	If Borrower A makes any such request:

	 	(i)	 	the Issuing Bank shall deliver to the Borrowers and the Custodian
an Outstanding LC Certificate in respect of the Existing LoCs on or before
1.00pm (London time) 1 Business Day after the date of such request; and
	 
	 	(ii)	 	the Borrowers shall procure the delivery to the Issuing Bank of a
Collateral Compliance Certificate in respect of the Existing LoCs on or before
1.00pm (London time) 2 Business Days after the date of such request.

	 	(c)	 	Provided that:

	 	(i)	 	Borrower A has confirmed in writing to Barclays Bank PLC as
Administrative Agent under the Existing Facility Agreement those Existing LoCs
which are to be transferred and deemed issued under this Agreement;
	 
	 	(ii)	 	the Collateral Compliance Certificate delivered pursuant to
paragraph b(ii) above confirms that the Borrowers are in compliance with their
obligations under Clause 19.1 and 19.2 in respect of the Existing LoCs; and
	 
	 	(iii)	 	all other conditions to the issuance of Letters of Credit set
forth in Clause 4 (Conditions of Utilisation), excluding Clause 4.3 (Maximum
number of Letters of Credit), have been satisfied or waived by the Issuing 

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	 	 	 	Bank (assuming, solely for such purpose, that the Existing LoCs were being issued
hereunder on the applicable date),

with effect from 9.00am (London time) on the date which the last of the conditions
set out in paragraphs (i) to (iii) is satisfied:

	 	(x)	 	the Available Commitment shall be reduced by an amount equal to the aggregate
stated amount of the Existing LoCs (as in effect from time to time); and
	 
	 	(y)	 	for all purposes the Existing LoCs shall be deemed to be issued under and in
accordance with the terms of this Agreement.

	3.3	 	Letters of Credit on behalf of Third Party Borrowers
	 
	 	 	Each Borrower may also request the issuance of Letters of Credit on behalf of a Third Party
Borrower for that Third Party Borrower’s reinsurance purposes.

	3.4	 	Monitoring
	 
	 	 	The Issuing Bank is not bound to monitor or verify the application of any amount borrowed
pursuant to this Agreement.

	4.	 	CONDITIONS OF UTILISATION

	4.1	 	Conditions precedent

	 	(a)	 	A Borrower may not deliver the first Utilisation Request unless the Issuing
Bank has received all of the documents and other evidence listed in Schedule 1 Part 1
(Conditions precedent) in form and substance satisfactory to it. The Issuing Bank
shall notify Borrower A promptly upon being so satisfied.
	 
	 	(b)	 	Without limiting paragraph (a) above (and subject to Clause 5.5 (Increase and
decrease), the Issuing Bank will only be obliged to comply with Clause 5.4 (Issue of
Letters of Credit) if:

	 	(i)	 	the Borrowers are all, and will after making the relevant
Utilisation(s) remain, in compliance with their obligations under Clause 19
(Collateral) and the Issuing Bank shall have received a Collateral Compliance
Certificate on the date which is 2 Business Days after the date of each
Utilisation Request confirming such compliance;
	 
	 	(ii)	 	if the relevant Borrower is issuing that Utilisation Request for
a Third Party Borrowing, the Issuing Bank shall have received, prior to or
concurrently with that Utilisation Request, board resolutions (and, if
reasonably deemed necessary by the Issuing Bank, shareholder resolutions) of the
proposed Third Party Borrower approving such borrowing and the Third Party
Borrower shall have confirmed compliance with all relevant corporate benefit
issues as applicable from time to time to the satisfaction of the Issuing Bank
(acting reasonably);
	 
	 	(iii)	 	no Default is continuing or would result from the proposed
Utilisation; and

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	 	(iv)	 	the Repeating Representations to be made by each Borrower are
true in all material respects.

	4.2	 	Conditions relating to Optional Currencies

	 	(a)	 	A currency will constitute an Optional Currency in relation to a Letter of
Credit if:

	 	(i)	 	it is readily available in the amount required and freely
convertible into the Base Currency in the Relevant Interbank Market on the
Utilisation Date for that Letter of Credit; and
	 
	 	(ii)	 	it is an Approved Optional Currency or it has been approved by
the Issuing Bank on or prior to receipt by the Issuing Bank of the relevant
Utilisation Request for that Letter of Credit.

	 	(b)	 	If the Issuing Bank has received a written request from Borrower A for a
currency to be approved under paragraph (a)(ii) above, the Issuing Bank will promptly
confirm to Borrower A:

	 	(i)	 	whether or not approval has been granted; and
	 
	 	(ii)	 	if approval has been granted, the minimum amount for any
subsequent Utilisation in that currency.

	4.3	 	Maximum number of Letters of Credit
	 
	 	 	The Borrowers may not deliver more than 30 Utilisation Requests in aggregate on any Business
Day.

	5.	 	UTILISATION

	5.1	 	Delivery of a Utilisation Request
	 
	 	 	A Borrower may request a Letter of Credit by delivery to the Issuing Bank of a duly
completed Utilisation Request not later than 10.00 am (London time) 3 Business Days prior to
the proposed Utilisation Date.

	5.2	 	Completion of a Utilisation Request

	 	(a)	 	Each Utilisation Request will not be regarded as having been duly completed
unless:

	 	(i)	 	the proposed Utilisation Date is a Business Day within the
Availability Period;
	 
	 	(ii)	 	the currency and amount of the Utilisation comply with Clause 5.3
(Currency and amount);
	 
	 	(iii)	 	it specifies the relevant Borrower;
	 
	 	(iv)	 	the Letter of Credit has an initial Term (subject to Clause 5.6
(Renewal of a Letter of Credit)) of no greater than twelve months from the
Utilisation Date; and
	 
	 	(v)	 	the delivery instructions for the Letter of Credit are specified.

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	 	(b)	 	Only one Letter of Credit may be requested in each Utilisation Request.

5.3 Currency and amount

	 	(a)	 	The currency specified in a Utilisation Request must be the Base Currency or an
Optional Currency.
	 
	 	(b)	 	The amount of the proposed Letter of Credit must be an amount such that its
Base Currency Amount is less than or equal to the Available Commitment.

	5.4	 	Issue of Letters of Credit

	 	(a)	 	If the conditions set out in this Agreement have been met, the Issuing Bank
shall issue the Letter of Credit on or before the Utilisation Date.
	 
	 	(b)	 	The Issuing Bank will only comply with paragraph (a) above if on the date of
the Utilisation Request and on the proposed Utilisation Date the Repeating
Representations made by each Borrower are true in all material respects and there is
otherwise no breach by a Borrower of the terms of any Finance Document.

	5.5	 	Increases and decreases

	 	(a)	 	A Borrower may request either an increase or a decrease in the principal amount
of any Letter of Credit issued for the account of such Borrower by delivering to the
Issuing Bank a Utilisation Request in accordance with and subject to the terms of
Agreement.
	 
	 	(b)	 	With respect to a Utilisation Request delivered in accordance with this Clause
5.5 for a reduction in the principal amount of a Letter of Credit, the provisions of
Clause 4.1(b)(i) above requiring that the Issuing Bank shall have received a Collateral
Compliance Certificate shall not be applicable.
	 
	 	(c)	 	Any Utilisation Request delivered to the Issuing Bank in accordance with this
Clause 5.5 shall be delivered no later than 10.00 am (London time) 3 Business Days
prior to the proposed amendment date to the Letter of Credit to which the Utilisation
Request relates.
	 
	 	(d)	 	Any such increase or decrease shall only take effect following receipt by the
Issuing Bank of written confirmation from the beneficiary under the relevant Letter of
Credit of such amendment.

	5.6	 	Renewal of a Letter of Credit

	 	(a)	 	Subject to clause (b) below, each Letter of Credit issued shall automatically
be renewed on each Expiry Date for a period of 364 days from the relevant Expiry Date
subject always to no Letter of Credit extending beyond the Final Maturity Date.
	 
	 	(b)	 	A Letter of Credit shall not be automatically renewed if:

	 	(i)	 	a Default exists and the Issuing Bank has notified the relevant
Borrower in writing at least 60 days prior to the Expiry Date that the Letter of
Credit will not be renewed; or

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	 	(ii)	 	the relevant Borrower has notified the Issuing Bank in writing at
least 40 days prior to the Expiry Date that it does not wish the Letter of
Credit to be renewed,

and, in each case, the Issuing Bank has sent a notice to the beneficiaries of such
Letter of Credit at least 30 days prior to the Expiry Date of such Letter of Credit
confirming that the same shall not be automatically renewed upon the Expiry Date.
In the event that the Issuing Bank has agreed to issue a Letter of Credit with a
notice period to the beneficiaries of 60 days, the time period set out in b(ii)
above shall be increased to 70 days prior to the Expiry Date of the relevant Letter
of Credit.

	 	(c)	 	The terms of each renewed Letter of Credit shall be the same as those of the
relevant Letter of Credit immediately prior to its renewal, except that its Term shall
start on the date which was the Expiry Date of such Letter of Credit immediately prior
to its renewal, and shall end on the new Expiry Date, being the earlier of:

	 	(i)	 	12 months thereafter (subject to any further renewal in
accordance with Clause 5.6(a)above); and
	 
	 	(ii)	 	the Final Maturity Date.

	5.7	 	Cancellation of Commitment

	 	(a)	 	The Commitment shall be immediately cancelled at the end of the Availability
Period.
	 
	 	(b)	 	Borrower A (on behalf of all the Borrowers) may if it gives the Issuing Bank
not less than 5 Business Days’ prior written notice, cancel the whole or part (in
minimum amounts of US$500,000) of the Available Commitment. Any such notice of
cancellation 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 is to be made and the amount of that cancellation.
	 
	 	(c)	 	No amount of the Commitment cancelled under this Agreement may be subsequently
reinstated.
	 
	 	(d)	 	No Party may cancel all or any part of the Commitment except at the times and
in the manner expressly provided for in this Agreement.

	5.8	 	Illegality

	 	(a)	 	If it becomes unlawful in any applicable jurisdiction for the Issuing Bank to
issue or maintain any Letter of Credit:

	 	(i)	 	the Issuing Bank shall promptly notify Borrower A (on behalf of
all the Borrowers) upon becoming aware of that event; and
	 
	 	(ii)	 	upon the Issuing Bank notifying Borrower A (on behalf of all the
Borrowers), the Issuing Bank shall have no obligation to issue or maintain any
Letter of Credit in such jurisdiction.

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	6.	 	LETTERS OF CREDIT

	6.1	 	Fees payable in respect of Letters of Credit

	 	(a)	 	The relevant Borrower (or Borrower A on its behalf) shall pay to the Issuing
Bank a letter of credit fee in the Base Currency on each Letter of Credit computed at
the greater of:

	 	(i)	 	US$30.00; and
	 
	 	(ii)	 	0.45 per cent. per annum on the outstanding amount of each Letter
of Credit requested by it for the period from the issue of that Letter of Credit
until its Expiry Date.

	 	(b)	 	The letter of credit fees on the Letters of Credit shall be computed on the
last day of each Financial Quarter (and if applicable on such other dates as the
Issuing Bank may elect after the Commitment has been cancelled), in each case for the
period then ending. The Issuing Bank shall give Borrower A (on behalf of all the
Borrowers) notice of letter of credit fees due pursuant to this Clause 6.1 (Fees
payable in respect of Letters of Credit) (in a consolidated invoice) as soon as
reasonably practicable after each date of computation, and the Borrowers shall pay such
fees within five Business Days after receipt of such notice. Amounts payable in
accordance with this Clause 6 (Letters of Credit) shall remain payable notwithstanding
any failure by the Issuing Bank to issue a notice under this Clause 6.1(b).
	 
	 	(c)	 	The relevant Borrower (or Borrower A on its behalf) shall pay an additional fee
in respect of any Letter of Credit issued with a beneficiary which is established in
the United States of America (a “US Letter of Credit”), calculated as follows:

	 	(i)	 	US$120 on the date of issue of a US Letter of Credit;
	 
	 	(ii)	 	US$95 on the date of any amendment, waiver or variation
(howsoever described) to a US Letter of Credit;
	 
	 	(iii)	 	US$60 on the date of any extension of a US Letter of Credit
under Clause 5.5 (Renewal of a Letter of Credit); and
	 
	 	(iv)	 	US$100 within two Business Days following any claim which is made
under a US Letter of Credit under Clause 6.2 (Claims under a Letter of Credit).

	 	(d)	 	Fees payable in accordance with this Clause 6.1 (Fees payable in respect of
Letters of Credit) in respect of any Letter of Credit issued shall be payable in the
Base Currency.

	6.2	 	Claims under a Letter of Credit

	 	(a)	 	Each Borrower irrevocably and unconditionally authorises the Issuing Bank to
pay any claim made or purported to be made under a Letter of Credit requested by it and
which appears on its face to be in order (a “Claim”).

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	 	(b)	 	The relevant Borrower shall within two Business Days of demand pay to the
Issuing Bank an amount equal to the amount of any Claim in the currency of the Claim.
	 
	 	(c)	 	Each Borrower acknowledges that the Issuing Bank:

	 	(i)	 	is not obliged to carry out any investigation or seek any
confirmation from any other person before paying a claim; and
	 
	 	(ii)	 	deals in documents only and will not be concerned with the
legality of a claim or any underlying transaction or any available set-off,
counterclaim or other defence of any person.

	 	(d)	 	The obligations of each Borrower under this Clause will not be affected by:

	 	(i)	 	the sufficiency, accuracy or genuineness of any claim or any
other document; or
	 
	 	(ii)	 	any incapacity of, or limitation on the powers of, any person
signing a claim or other document.

	 	(e)	 	Interest shall accrue on the amount of any Claim from the date of the Issuing
Bank’s payment of the Claim until the date the Issuing Bank receives repayment from the
relevant Borrower in respect of that Claim, at a rate which is the aggregate of:

	 	(i)	 	2.75 per cent.;
	 
	 	(ii)	 	the applicable LIBOR; and
	 
	 	(iii)	 	the applicable Mandatory Cost, if any,

for such interest period selected by the Issuing Bank.

	 	(f)	 	Any interest accruing under this Clause 6 shall be payable by the relevant
Borrower within two Business Days of demand in writing by the Issuing Bank.
	 
	 	(g)	 	Any interest accruing under this Clause 6 (if unpaid) will be compounded at the
end of its interest period (but no more frequently then monthly) but will remain due
and payable within two Business Days of demand.

	6.3	 	Indemnities
	 
	 	 	Each Borrower shall within ten Business Days of demand indemnify the Issuing Bank against
any cost, loss or liability incurred by the Issuing Bank (otherwise than by reason of the
Issuing Bank’s gross negligence or wilful misconduct) in acting as the Issuing Bank under
any Letter of Credit requested by (or on behalf of) that Borrower. The Issuing Bank shall
provide a certificate or invoice(s) to the relevant Borrower setting forth in reasonable
detail the basis for and the amount of any such cost, loss or liability.

	6.4	 	Role of the Issuing Bank

	 	(a)	 	Nothing in this Agreement constitutes the Issuing Bank as a trustee or
fiduciary of any other person.

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	 	(b)	 	The Issuing Bank may accept deposits from, lend money to and generally engage
in any kind of banking or other business with any member of the Group.
	 
	 	(c)	 	The Issuing Bank may rely on:

	 	(i)	 	any representation, notice or document provided to it in relation
to the Facility believed by it to be genuine, correct and appropriately
authorised; and
	 
	 	(ii)	 	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.

	 	(d)	 	The Issuing Bank may engage, pay for and rely on the advice or services of any
lawyers, accountants, surveyors or other experts.
	 
	 	(e)	 	The Issuing Bank may act in relation to the Finance Documents through its
personnel and agents.
	 
	 	(f)	 	The Issuing Bank is not responsible for:

	 	(i)	 	the adequacy, accuracy and/or completeness of any information
(whether oral or written) provided by any Party (excluding itself), or 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; or
	 
	 	(ii)	 	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, under or in connection with any
Finance Document.

	6.5	 	Exclusion of liability

	 	(a)	 	Without limiting paragraph (b) below, the Issuing Bank 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.
	 
	 	(b)	 	No Party (other than the Issuing Bank) may take any proceedings against any
officer, employee or agent of the Issuing Bank in respect of any claim it might have
against the Issuing Bank or in respect of any act or omission of any kind by that
officer, employee or agent in relation to any Finance Document.

	7.	 	DEFAULT INTEREST

	7.1	 	Default interest

	 	(a)	 	If a Borrower fails to pay any amount payable by it under a Finance Document on
its due date, interest shall accrue on such Unpaid Sum from the due date up to the date
of actual payment (both before and after judgment) at a rate which is the aggregate
of:-

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	 	(i)	 	4 per cent.;
	 
	 	(ii)	 	the applicable LIBOR; and
	 
	 	(iii)	 	the applicable Mandatory Cost, if any.

for such interest period selected by the Issuing Bank (acting reasonably).

	 	(b)	 	Any interest accruing under this Clause 7 (Default interest) shall be payable
by the relevant Borrower within two Business Days of demand in writing by the Issuing
Bank.
	 
	 	(c)	 	Default interest (if unpaid) arising on an Unpaid Sum will be compounded with
the Unpaid Sum to the extent such Unpaid Sum remains unpaid at the end of its interest
period but will remain due and payable within two Business Days of demand in writing by
the Issuing Bank.

	8.	 	CHANGES TO THE CALCULATION OF INTEREST

	8.1	 	Absence of quotations
	 
	 	 	Subject to Clause 8.2 (Market disruption), if LIBOR is to be determined by reference to the
Reference Banks but a Reference Bank does not supply a quotation by 11 am (London time) on
the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations
of the remaining Reference Banks.

	8.2	 	Market disruption

	 	(a)	 	If a Market Disruption Event occurs then the rate of interest for the Interest
Period shall be the percentage rate per annum which is the sum of:

	 	(i)	 	2 per cent (or, if the circumstances described in Clause 7.1
(Default interest) have occurred, 4 per cent);
	 
	 	(ii)	 	the rate the Issuing Bank may reasonably select; and
	 
	 	(iii)	 	the Mandatory Cost, if any.

	 	(b)	 	In this Agreement “Market Disruption Event” means 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 Issuing Bank to
determine LIBOR for the relevant currency and Interest Period.

	8.3	 	Alternative basis of interest or funding

	 	(a)	 	If a Market Disruption Event occurs and the Issuing Bank or Borrower A so
requires, the Issuing Bank and Borrower A shall enter into negotiations (for a period
of not more than thirty days) with a view to agreeing a substitute basis for
determining the rate of interest.
	 
	 	(b)	 	Any alternative basis agreed pursuant to paragraph (a) above shall, with the
prior consent of Borrower A, be binding on all Parties.

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	8.4	 	Break Costs
	 
	 	 	Each Borrower shall, within three Business Days of demand by the Issuing Bank, pay to the
Issuing Bank its Break Costs attributable to all or any part of any interest payable by that
Borrower pursuant to Clause 6.2(e), Clause 7.1 (Default interest) or Clause 8.2 (Market
disruption) being paid by that Borrower on a day other than the last day of an Interest
Period for that interest.

	9.	 	FEES

	9.1	 	Commitment fee

	 	(a)	 	The Borrowers shall pay to the Issuing Bank a fee in the Base Currency computed
at the rate of 0.225 per cent. per annum on the Available Commitment for the
Availability Period.
	 
	 	(b)	 	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, if cancelled in full, on the cancelled amount at the time the
cancellation is effective.

	9.2	 	Arrangement fee
	 
	 	 	The Borrowers shall pay to the Issuing Bank an arrangement fee in an amount equal to 0.15
per cent of the Commitment (being US$300,000) payable on the date of this Agreement.

	10.	 	TAX GROSS UP AND INDEMNITIES

	10.1	 	Definitions

	 	(a)	 	In this Agreement:

“Tax Credit” means a credit against, relief or remission for, or repayment of any
Tax.

“Tax Deduction” means a deduction or withholding for or on account of Tax from a
payment under a Finance Document.

“Tax Payment” means either the increase in a payment made by a Borrower to the
Issuing Bank under Clause 10.2 (Tax gross-up) or a payment under Clause 10.3 (Tax
indemnity).

	 	(b)	 	Unless a contrary indication appears, in this Clause 10 (Tax gross up and
indemnities) a reference to “determines” or “determined” means a determination made in
the absolute discretion of the person making the determination.

	10.2	 	Tax gross-up

	 	(a)	 	Each Borrower shall make all payments to be made by it without any Tax
Deduction, unless a Tax Deduction is required by law.
	 
	 	(b)	 	Borrower A shall promptly upon becoming aware that it or any other Borrower
must make a Tax Deduction (or that there is any change in the rate or the basis of a
Tax Deduction) notify the Issuing Bank accordingly.

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	 	(c)	 	If a Tax Deduction is required by law to be made by a Borrower, the amount of
the payment due from that Borrower 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.
	 
	 	(d)	 	If a Borrower is required to make a Tax Deduction, that Borrower 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.
	 
	 	(e)	 	Within thirty days of making either a Tax Deduction or any payment required in
connection with that Tax Deduction, the Borrower making that Tax Deduction shall
deliver to the Issuing Bank a statement under section 975 of the ITA or other evidence
reasonably satisfactory to the Issuing Bank that the Tax Deduction has been made or (as
applicable) any appropriate payment paid to the relevant taxing authority.

	10.3	 	Tax indemnity

	 	(a)	 	The Borrowers shall (within ten Business Days of demand by the Issuing Bank)
pay to the Issuing Bank an amount equal to the loss, liability or cost which the
Issuing Bank determines will be or has been (directly or indirectly) suffered for or on
account of Tax by the Issuing Bank in respect of a Finance Document.
	 
	 	(b)	 	Paragraph (a) above shall not apply:

	 	(i)	 	with respect to any Tax assessed on the Issuing Bank:

	 	(A)	 	under the law of the jurisdiction in which the
Issuing Bank is incorporated or, if different, the jurisdiction (or
jurisdictions) in which the Issuing Bank is treated as resident for tax
purposes; or
	 
	 	(B)	 	under the law of the jurisdiction in which the
Facility Office is located in respect of amounts received or receivable
in that jurisdiction,

if that Tax is imposed on or calculated by reference to the net income
received or receivable (but not any sum deemed to be received or receivable)
by the Issuing Bank; or

	 	(ii)	 	to the extent a loss, liability or cost is compensated for by an
increased payment under Clause 10.2 (Tax gross-up).

	10.4	 	Tax Credit
	 
	 	 	If a Borrower makes a Tax Payment and the Issuing Bank 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)	 	the Issuing Bank has obtained, utilised and retained that Tax Credit,

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the Issuing Bank shall pay an amount to that Borrower which the Issuing Bank 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 that Borrower.

	10.5	 	Stamp taxes
	 
	 	 	The Borrowers shall pay and, within three Business Days of demand, indemnify the Issuing
Bank against any out of pocket cost, loss or liability the Issuing Bank incurs in relation
to all stamp duty, registration and other similar Taxes payable in respect of any Finance
Document.

	10.6	 	VAT

	 	(a)	 	All amounts set out or expressed in a Finance Document to be payable by any
Party to the Issuing Bank which (in whole or in part) constitute the consideration for
a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which
is chargeable on such supply or supplies, and accordingly, subject to paragraph (b)
below, if VAT is or becomes chargeable on any supply made by the Issuing Bank to any
Party under a Finance Document, that Party shall pay to the Issuing Bank (in addition
to and at the same time as paying any other consideration for such supply) an amount
equal to the amount of such VAT (and the Issuing Bank shall promptly provide an
appropriate VAT invoice to such Party).
	 
	 	(b)	 	Where the Issuing Bank requires a Borrower to reimburse or indemnify it for any
cost or expense, that Borrower shall reimburse or indemnify (as the case may be) the
Issuing Bank for the full amount of such cost or expense, including such part thereof
as represents VAT, save to the extent that the Issuing Bank reasonably determines that
it is entitled to credit or repayment in respect of such VAT from the relevant tax
authority.

	11.	 	INCREASED COSTS

	11.1	 	Increased costs

	 	(a)	 	Subject to Clause 11.3 (Exceptions) the Borrowers shall, within three Business
Days of a demand by the Issuing Bank, pay for the account of the Issuing Bank the
amount of any Increased Costs incurred by the Issuing Bank 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 enacted or issued after the
date of this Agreement.

	 	(b)	 	In this Agreement “Increased Costs” means:

	 	(i)	 	a reduction in the rate of return from the Facility or on the
Issuing Bank’s (or its Affiliate’s) overall capital;
	 
	 	(ii)	 	an additional or increased cost; or

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	 	(iii)	 	a reduction of any amount due and payable under any Finance
Document,

which is incurred or suffered by the Issuing Bank or any of its Affiliates to the
extent that it is attributable to the Issuing Bank having entered into this Agreement
or funding or performing its obligations under any Finance Document.

	11.2	 	Increased cost claims
	 
	 	 	If the Issuing Bank intends to make a claim pursuant to Clause 11.1 (Increased costs) it
shall notify Borrower A of the event giving rise to the claim and provide a certificate
confirming the amount of its Increased Costs to Borrower A.

	11.3	 	Exceptions

	 	(a)	 	Clause 11.1 (Increased costs) does not apply to the extent any Increased Cost
is:

	 	(i)	 	attributable to a Tax Deduction required by law to be made by a
Borrower;
	 
	 	(ii)	 	compensated for by Clause 10.3 (Tax indemnity);
	 
	 	(iii)	 	compensated for by the payment of the Mandatory Cost; or
	 
	 	(iv)	 	attributable to the wilful breach by the Issuing Bank or its
Affiliates of any law or regulation.

	 	(b)	 	In this Clause 11.3 (Exceptions), a reference to a “Tax Deduction” has the same
meaning given to the term in Clause 10.1 (Definitions).

	12.	 	OTHER INDEMNITIES
	 
	12.1	 	Currency indemnity

	 	(a)	 	If any sum due from a Borrower under the Finance Documents (a “Sum”), or any
order, judgment or award given or made in relation to a Sum, has to be converted from
the currency (the “First Currency”) in which that Sum is payable into another currency
(the “Second Currency”) for the purpose of:

	 	(i)	 	making or filing a claim or proof against that Borrower;
	 
	 	(ii)	 	obtaining or enforcing an order, judgment or award in relation to
any litigation or arbitration proceedings,

then that Borrower shall as an independent obligation, within three Business Days of
demand, indemnify the Issuing Bank to which that Sum is due against any cost, loss or
liability arising out of or as a result of the conversion including any discrepancy
between (A) the rate of exchange used to convert that Sum from the First Currency
into the Second Currency and (B) the rate or rates of exchange available to the
Issuing Bank at the time of its receipt of that Sum.

	 	(b)	 	Each Borrower 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.

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	12.2	 	Other indemnities
	 
	 	 	Each Borrower shall within three Business Days of demand, indemnify the Issuing Bank against
any cost, loss or liability incurred by the Issuing Bank as a result of:

	 	(a)	 	a failure by such Borrower to pay any amount due under a Finance Document on
its due date or to otherwise comply with its obligations under the Finance Documents;
	 
	 	(b)	 	the occurrence of any Event of Default;
	 
	 	(c)	 	issuing, or making arrangements to issue, a Letter of Credit;
	 
	 	(d)	 	taking, holding, protecting or enforcing any Security created pursuant to any
Finance Document; or
	 
	 	(e)	 	exercising any of the rights, powers, discretions or remedies vested in it
under any Finance Document or by law.

	13.	 	MITIGATION BY THE ISSUING BANK
	 
	13.1	 	Mitigation

	 	(a)	 	The Issuing Bank shall, in consultation with Borrower A, take all reasonable
steps to mitigate any circumstances which arise and which would result in the Facility
ceasing to be available or any amount becoming payable under or pursuant to, or
cancelled pursuant to, any of Clause 5.8 (Illegality), Clause 10 (Tax gross-up and
indemnities), Clause 11 (Increased costs) or paragraph 3 of Schedule 3 (Mandatory Cost
Formulae) including (but not limited to) transferring its rights and obligations under
the Finance Documents to another Affiliate or Facility Office.
	 
	 	(b)	 	Paragraph (a) above does not in any way limit the obligations of a Borrower
under the Finance Documents.

	13.2	 	Limitation of liability

	 	(a)	 	The Borrowers shall promptly indemnify the Issuing Bank for all costs and
expenses reasonably incurred by the Issuing Bank as a result of steps taken by it under
Clause 13.1 (Mitigation).
	 
	 	(b)	 	The Issuing Bank is not obliged to take any steps under Clause 13.1
(Mitigation) if, in the opinion of the Issuing Bank (acting reasonably), to do so might
be prejudicial to it.

	14.	 	COSTS AND EXPENSES
	 
	14.1	 	Transaction expenses
	 
	 	 	The Borrowers shall promptly on demand pay the Issuing Bank the amount of all costs and
expenses and any applicable tax (including legal fees) reasonably incurred (subject to any
agreed caps) by the Issuing Bank in connection with the negotiation, preparation and
execution of:

	 	(a)	 	this Agreement and any other documents referred to in this Agreement; and

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	 	(b)	 	any other Finance Documents executed after the date of this Agreement.

The Issuing Bank shall provide a reasonably detailed invoice to Borrower A confirming the
amount of any such costs and expenses.

	14.2	 	Amendment costs
	 
	 	 	If (a) a Borrower requests an amendment, waiver or consent or (b) an amendment is required
pursuant to Clause 23.6 (Change of currency), the Borrowers shall, within three Business
Days of demand, reimburse the Issuing Bank for the amount of all costs and expenses
(including legal fees) reasonably incurred by the Issuing Bank in responding to, evaluating,
negotiating or complying with that request or requirement. The Issuing Bank shall provide a
reasonably detailed invoice to Borrower A confirming the amount of any such costs and
expenses.

	14.3	 	Enforcement costs
	 
	 	 	The Borrowers shall, within three Business Days of demand, pay to the Issuing Bank the
amount of all costs and expenses (including legal fees) reasonably incurred by the Issuing
Bank in connection with the administration or enforcement of, or the preservation of any
rights under, any Finance Document. The Issuing Bank shall provide a reasonably detailed
invoice to Borrower A confirming the amount of any such costs and expenses.

	15.	 	REPRESENTATIONS AND WARRANTIES
	 
	 	 	To induce the Issuing Bank

	 	(a)	 	to enter into this Agreement;
	 
	 	(b)	 	to make available the Commitment; and
	 
	 	(c)	 	to issue the Letters of Credit,

the Borrowers hereby represent and warrant to the Issuing Bank that:

	15.2	 	Financial Conditions
	 
	 	 	The audited consolidated balance sheet of the Parent and its Subsidiaries as at 31 December
2008 and the related consolidated statement of comprehensive income and of cash flows for
the fiscal year ended on such date, reported on by and accompanied by an unqualified report
from KPMG, present fairly the consolidated financial condition of the Parent and its
Subsidiaries as at such date, and the consolidated results of its operations and its
consolidated cash flows for the fiscal year then ended. The unaudited consolidated balance
sheet of the Parent and its Subsidiaries as at 30 June 2009, and the related unaudited
consolidated statements of comprehensive income and cash flows for the six-month period
ended on such date, present fairly the consolidated financial condition of the Parent and
its Subsidiaries as at such date, and the consolidated results of its operations and its
consolidated cash flows for the six-month period then ended (subject to normal year-end
audit adjustments). All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with US GAAP applied consistently throughout
the periods involved (except as approved by the aforementioned firm of accountants and
disclosed therein). As of the date of this

- 38 -

 

Agreement, no member of the Group has any material Guarantee Obligations, contingent
liabilities and liabilities for taxes, or any long-term leases or unusual forward or
long-term commitments, including any Swap Contracts, that are not reflected in the most
recent financial statements referred to in this paragraph. During the period from 31
December 2008 to and including the date of this Agreement there has been no Disposition by
any member of the Group of any material part of its business or property.

	15.3	No Change

Since 31 December 2008 there has been no development or event that has had or could
reasonably be expected to have a Material Adverse Effect.

	15.4	 	Existence; Compliance with Law

Each member of the Group:

	 	(a)	 	is duly organised, validly existing and in good standing under the laws of the
jurisdiction of its organisation;
	 
	 	(b)	 	has the power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the business in
which it is currently engaged;
	 
	 	(c)	 	is duly qualified as a foreign corporation or other organisation and in good
standing under the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification except where the
failure to so qualify would not have a Material Adverse Effect; and
	 
	 	(d)	 	is in compliance with all Requirements of Law (including but not limited to the
Bermuda Companies Law and Bermuda Insurance Law as applicable to Borrower A and each
Subsidiary organised under the laws of Bermuda) except to the extent that the failure
to comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect. Neither Borrower A nor any Subsidiary is subject to any
Private Act.

	15.5	 	Power; Authorisation; Enforceable Obligations

	 	(a)	 	Each Borrower has or will have the power and authority, and the legal right, to
make, deliver and perform its obligations under the Finance Documents to which it is a
party and to obtain Letters of Credit hereunder, and each Borrower has or will have
taken all necessary organisational action to authorise the execution, delivery and
performance of the Finance Documents to which it is a party and to authorise the
issuance of Letters of Credit on its behalf on the terms and conditions of this
Agreement. No consent or authorisation of, filing with, notice to or other act by or
in respect of, any Governmental Authority or any other Person is required in connection
with the Letters of Credit hereunder or with the execution, delivery, performance,
validity or enforceability of this Agreement or any of the other Finance Documents,
except consents, authorisations, filings and notices described in Schedule 9 (Consents,
Authorisations, Filings and Notices), which consents, authorisations, filings and
notices have been obtained or made and are in full force and effect. Each Finance
Document has been duly executed and delivered on

- 39 -

 

behalf of each Borrower which is a party thereto.
This Agreement constitutes, and each other Finance Document upon execution will constitute, a legal, valid and binding obligation of each Borrower which is a party thereto, enforceable against each Borrower in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganisation, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity
or at law).

	 	(b)	 	Under the laws of its jurisdiction of incorporation in force at the date
hereof, neither Borrower will be required to make any deduction or withholding from any
payment it may make hereunder.
	 
	 	(c)	 	Under the laws of its jurisdiction of incorporation, the claims of the Issuing
Bank against each Borrower under this Agreement and the Letters of Credit will rank at
least pari passu with the claims of all its other unsecured creditors, except creditors
whose claims are preferred solely by any bankruptcy, insolvency or other similar law of
general application governing the enforcement of creditors’ rights.
	 
	 	(d)	 	In any proceedings taken in its jurisdiction of incorporation in relation to
this Agreement, the choice of the laws of England and Wales as the governing law of
this Agreement, and any judgment obtained in England and Wales, will be recognised and
enforced (other than, in the case of Borrower A, a judgment for a sum payable in
respect of taxes or other charges of a like nature, or in respect of multiple damages
as defined in The Protection of Trading Interests Act 1981 of Bermuda), provided that,
in the case of Borrower A, the procedures set forth in the Judgments (Reciprocal
Enforcement) Act 1958 are complied with.
	 
	 	(e)	 	Under the laws of its jurisdiction of incorporation it is not necessary that
any stamp, registration or similar tax be paid on or in relation with this Agreement,
the Letters of Credit or any other Finance Document.

	15.6	 	No Legal Bar

The execution, delivery and performance of this Agreement and the other Finance Documents,
the borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or any Contractual Obligation of any member of the Group and will not
result in, or require, the creation or imposition of any Security on any of their respective
properties or revenues pursuant to any Requirement of Law or any such Contractual Obligation
(other than the Security created by the Security Documents and except, in the case of
Contractual Obligations, to the extent that the failure of any of the statements in this
Clause 15.6 (No legal bar) to be accurate could not reasonably be expected to have a
Material Adverse Effect).
	 
	15.7	 	Litigation

No litigation, investigation or proceeding of or before any arbitrator or Governmental
Authority is pending, or, to the knowledge of any Borrower, threatened, by or against any
member of the Group or against any of their respective properties or revenues:

- 40 -

 

	 	(a)	 	with respect to any of the Finance Documents or any of the transactions
contemplated hereby or thereby, or
	 
	 	(b)	 	that could reasonably be expected to have a Material Adverse Effect.

	15.8	 	No Default
	 
	 	 	No member of the Group is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material Adverse
Effect. No Default or Event of Default has occurred and is continuing.
	 
	15.9	 	Ownership of Property; Liens
	 
	 	 	Each Borrower and each Material Subsidiary has good title to, or a valid leasehold interest
in all its real and personal property material to its business except for minor defects in
title that could not reasonably be expected to have a Material Adverse Effect, and none of
such property is subject to any Security not permitted by Clause 17.5 (Security).
	 
	15.10	 	Taxes
	 
	 	 	Each member of the Group has filed or caused to be filed all Federal, state and other
material tax returns that are required to be filed and has paid all taxes shown to be due
and payable on said returns (other than any amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which reserves in
conformity with US GAAP have been provided on the books of the relevant member of the Group
except to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect); no material tax Security has been filed, and, to the knowledge of
any Borrower, no claim is being asserted, with respect to any such tax, fee or other charge.
	 
	15.11	 	Federal Regulations
	 
	 	 	No part of the proceeds of any Letter of Credit, and no other extensions of credit
hereunder, will be used by the Borrowers or any of their Affiliates for “buying” or
“carrying” any “margin stock” within the respective meanings of each of the quoted terms
under Regulation U as now and from time to time hereafter in effect. If requested by the
Issuing Bank, Borrower A will furnish to the Issuing Bank a statement to the foregoing
effect in conformity with the requirements of FR Form U-1 referred to in Regulation U.
	 
	15.12	 	ERISA
	 
	 	 	Neither a Reportable Event nor an “accumulated funding deficiency” (within the meaning of
Section 412 of the Code or Section 302 of ERISA) has occurred during the five-year period
prior to the date on which this representation is made or deemed made with respect to any
Plan, and each Plan has complied in all material respects with the applicable provisions of
ERISA and the Code. No termination of a Single Employer Plan has occurred, and no Security
in favour of the PBGC or a Plan has arisen, during such five-year period. The present value
of all accrued benefits under each Single Employer Plan (based on those assumptions used to
fund such Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of such Plan
allocable to such accrued benefits by a material amount. None of the Borrowers nor any
Commonly Controlled

- 41 -

 

	 	 	Entity has had a complete or partial withdrawal from any Multiemployer
Plan that has resulted or could reasonably be expected to result in a material liability
under ERISA, and none of the Borrowers nor any Commonly Controlled Entity would become
subject to any material liability under ERISA if such Borrower or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as of the
valuation date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganisation or Insolvent.

	 
	15.13	 	Investment Company Act
	 
	 	 	No Borrower is an “investment company”, or a company “controlled” by an “investment
company”, within the meaning of the Investment Company Act of 1940.
	 
	15.14	 	Subsidiaries
	 
	 	 	The table set out in Schedule 10 (Subsidiaries) details the name and jurisdiction of
incorporation of each Subsidiary and, as to each such Subsidiary, the
percentage of each class of Capital Stock owned by any Borrower as at the date of this
Agreement.
	 
	15.15	 	Use of Letters of Credit
	 
	 	 	The Letters of Credit will be used solely for the purposes described in Clause 3.1
(Purpose).
	 
	15.16	 	Environmental Matters
	 
	 	 	Except as, in the aggregate, could not reasonably be expected to have a Material Adverse
Effect:

	 	(a)	 	no member of the Group has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required under
any Environmental Law;
	 
	 	(b)	 	no member of the Group has become subject to liability under any Environmental
Law;
	 
	 	(c)	 	no member of the Group has received notice of any claim with respect to any
liability under any Environmental Law;
	 
	 	(d)	 	the facilities and properties owned, leased or operated by any Group Member do
not contain any Hazardous Materials in amounts or concentrations or under circumstances
that could reasonably be expected to give rise to liability under any Environmental
Law; and
	 
	 	(e)	 	Hazardous Materials have not been transported or disposed by any member of the
Group in a manner or to a location that could reasonably be expected to give rise to
liability under any Environmental Law.

	15.17	 	Accuracy of Information, etc

	 	(a)	 	To the best of Borrower A’s knowledge, the Information provided by each
Borrower to the Issuing Lender pursuant hereto or in connection herewith (the
“Information”), taken as a whole, is correct in all material respects as of the date
thereof and does not, as of the date thereof, contain any untrue statement of a
material fact or omit any material fact necessary to make the statements therein

- 42 -

 

(taken as a whole) not misleading as of such date in light of the circumstances under which
they made; provided, however, that this representation does not extend to:

	 	(i)	 	any projections and other forward looking statements
(“Projections”); and
	 
	 	(ii)	 	information which is referenced to a specific source or derived
from public or other sources.

	 	(b)	 	Any Projections provided by any Borrower to the Issuing Bank pursuant hereto or
in connection herewith have been prepared in good faith based upon assumptions
reasonably believed by the Borrower’s to be reasonable at the time of preparation and
the Issuing Bank understands that the Projections are subject to significant
uncertainties and contingencies many of which are beyond the control of the Borrowers
and there can be no assurances that such Projections will be realised.
	 
	 	(c)	 	No written statement or information delivered by any Borrower to the Issuing
Bank contained in this Agreement or any other Finance Document, taken as a whole,
contains any untrue statement of a material fact or omits any material fact necessary
to make the statements therein (taken as a whole) not misleading as of the date of such
statement or information in light of the circumstances under which they were provided.

	15.18	 	No breach of laws
	 
	 	 	No member of the Group has breached any law or regulation which breach has or is reasonably
likely to have a Material Adverse Effect.

	15.19	 	Pari passu ranking
	 
	 	 	The Borrowers payment obligations under the Finance Documents rank at least pari passu with
the claims of all its other unsecured and unsubordinated creditors, except for obligations
mandatorily preferred by law applying to companies generally.
	 
	16.	 	AFFIRMATIVE COVENANTS
	 
	 	 	The Borrowers hereby agree that, so long as the Commitment remains in effect, any Letter of
Credit remains outstanding or any amount is owing to the Issuing Bank hereunder, the
Borrowers shall and shall cause each of their Subsidiaries to:
	 
	16.1	 	Financial Statements
	 
	 	 	Furnish to the Issuing Bank:

	 	(a)	 	as soon as available, but in any event within 120 days after the end of each
fiscal year of the Parent, a copy of the audited consolidated balance sheet of the
Parent and its consolidated Subsidiaries as at the end of such year and the related
audited consolidated statements of comprehensive income and of cash flows for such
year, setting forth in each case in comparative form the figures for the previous year
certified by KPMG or other independent certified public accountants of nationally
recognised standing;

- 43 -

 

	 	(b)	 	as soon as available, but in any event within 120 days after the end of each
fiscal year of each relevant Borrower, a copy of its audited statutory financial
statements as at the end of such year and the related audited statutory financial
statements of comprehensive income and of cash flows for such year, setting forth in
each case in comparative form the figures for the previous year certified by KPMG or
other independent certified public accountants of nationally recognised standing; and
	 
	 	(c)	 	as soon as available, but in any event not later than 50 days after the end of
each of the first three quarterly periods of each fiscal year of the Parent, the
unaudited consolidated balance sheet of the Parent and its consolidated Subsidiaries as
at the end of such quarter and the related unaudited consolidated statements of
comprehensive income and of cash flows for such quarter and the portion of the fiscal
year through the end of such quarter, setting forth in each case in comparative form
the figures for the previous year, certified by a Responsible Officer of the Parent as
being fairly stated in all material respects (subject to normal year-end audit
adjustments and the absence of footnotes).

All such financial statements shall be complete and correct in all material respects and
shall be prepared in reasonable detail and in accordance with US GAAP. Documents required
to be delivered pursuant to Clause 16.1(a), 16.1(b) or 16.2(c) (to the extent any such
documents are included in materials otherwise filed with the SEC) may be delivered
electronically and, if so delivered, shall be deemed to have been delivered on the date:

	 	(a)	 	on which the Parent and/or the applicable Borrower (as the case may be) posts
such documents, or provides a link thereto, on the Parent’s and/or applicable Borrower
(as the case may be) website on the Internet; or
	 
	 	(b)	 	on which such documents are posted on the Parent’s and/or applicable Borrower’s
(as the case may be) behalf on an Internet or intranet website, if any, to which the
Issuing Bank has access (including http://sec.gov) (and, if requested by the Issuing
Bank, the Borrowers shall arrange for the Parent to deliver paper copies of such
documents, excluding any filing on Form 13G or any similar ownership filing that does
not result in a Change of Control, to the Issuing Bank until a written request to cease delivering paper copies is given
by the Issuing Bank).

Notwithstanding anything contained herein, in every instance the Parent and/or the Borrowers
(as the case may be) shall be required to provide paper copies of the Compliance
Certificates required by Clause 16.2(a) to the Issuing Bank.

	16.2	 	Certificates; Other Information
	 
	 	 	Furnish to the Issuing Bank:

	 	(a)	 	concurrently with the delivery of any financial statements pursuant to Clause
16.1 (Financial statements), a certificate of a Responsible Officer of each Borrower
stating that, to the best of such Responsible Officer’s knowledge, the applicable
Borrower during such period has observed or performed all of its covenants and other
agreements, and satisfied every condition contained in this Agreement and the other
Finance Documents to which it is a party to be observed, performed or satisfied by it,
and that such Responsible Officer has obtained no knowledge of

- 44 -

 

any Default or Event of Default except as specified in such certificate and a Compliance Certificate containing
all information and calculations necessary for determining compliance by that Borrower
with the provisions of Clause 17.8 (Rating) of this Agreement as of the last day of the
fiscal quarter or fiscal year of that Borrower, as the case may be;

	 	(b)	 	within 50 days after the end of each fiscal quarter of the Parent, a narrative
discussion and analysis of the consolidated financial condition and results of
operations of the Parent and its Subsidiaries for such fiscal quarter and for the
period from the beginning of the then current fiscal year to the end of such fiscal
quarter, as compared to the portion of the projections covering such periods and to the
comparable periods of the previous year (it being understood that the delivery of the
management’s discussion and analysis of the Form 10-Q containing the financial
statements delivered financial statements delivered pursuant to Clause 16.1 (Financial
statements) shall satisfy the requirement of this Clause 16.2(b));
	 
	 	(c)	 	within five days after the same are sent, copies of all financial statements
and reports that the Parent and each Borrower sends to the holders of any class of its
debt securities or public equity securities and, within five days after the same are
filed, copies of all financial statements and reports that the Parent and each Borrower
files with the SEC (excluding any such financial statement or report referred to in
Clause 16.1 (Financial statements));
	 
	 	(d)	 	within 14 Business Days of the Month end of each Borrower (or within 5 Business
Days at any other time as requested by the Issuing Bank), a copy of the Monthly
Portfolio Valuations; and
	 
	 	(e)	 	promptly, such additional financial and other information regarding the
business, operations and financial conditions of the Parent and each Borrower or any of
their Subsidiaries as the Issuing Bank may from time to time reasonably request.

	16.3	 	“Know your customer” checks

	 	(a)	 	If:

	 	(i)	 	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;
	 
	 	(ii)	 	any change in the status of a Borrower after the date of this
Agreement; or
	 
	 	(iii)	 	a proposed assignment or transfer by the Issuing Bank of any
of its rights and obligations under this Agreement to a party that is not a
Party to this Agreement prior to such assignment or transfer,

obliges the Issuing Bank (or, in the case of paragraph (iii) above, any prospective
new Party) to comply with “know your customer” or similar identification procedures
in circumstances where the necessary information is not already available to it,
each Borrower shall promptly upon the request of the Issuing Bank supply, or
procure the supply of, such documentation and other evidence as is reasonably
requested by the Issuing Bank (for itself or, in the

- 45 -

 

case of the event described in paragraph (iii) above, on behalf of any prospective new Party) in order for the
Issuing Bank or, in the case of the event described in paragraph (iii) above, any
prospective new Party to carry out and be satisfied it has complied with all
necessary “know your customer” or other similar checks under all applicable laws
and regulations pursuant to the transactions contemplated in the Finance Documents.

	16.4	 	Payment of Obligations
	 
	 	 	Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent,
as the case may be, all its material obligations of whatever nature, except where the amount
or validity thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with US GAAP with respect thereto have been provided on the books
of the relevant member of the Group or where the failure to pay, discharge or satisfy would
not reasonably be expected to have a Material Adverse Effect.

	16.5	 	Maintenance of Existence; Compliance

	 	(a)	 	Preserve, renew and keep in full force and effect the organisational existence
of the Borrowers, each Material Subsidiary and each Insurance Subsidiary; and
	 
	 	(b)	 	Take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business, including, without
limitation, all required insurance licenses of each Material Subsidiary, except, in
each case, as otherwise permitted by Clause 17.2 (Disposition of Property) and except,
in the case of each of sub-clauses (a) above and this sub-clause (b), to the extent
that failure to do so could not reasonably be expected to have a Material Adverse
Effect; and
	 
	 	(c)	 	Comply with all Requirements of Law except to the extent that failure to comply
therewith would not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.

	16.6	 	Maintenance of Property; Insurance

	 	(a)	 	Keep all property useful and necessary in the business of the Borrowers, each
Material Subsidiary and each Insurance Subsidiary in good working order and condition,
ordinary wear and tear excepted; and
	 
	 	(b)	 	Maintain with financially sound and reputable insurance companies insurance on
all the property of each Borrower, each Material Subsidiary and each Insurance
Subsidiary in at least such amounts and against at least such risks as are usually
insured against in the same general area by companies engaged in the same or a similar
business.

	16.7	 	Inspection of Property; Books and Records; Discussions

	 	(a)	 	Keep such books of records and account as are necessary to permit each Borrower
and its Subsidiaries to prepare financial statements that are in conformity with US
GAAP and that are in compliance with all Requirements of Law relating to the
maintenance of financial records (except, in the case of such Requirements of

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Law, to the extent that the failure to
comply therewith could not reasonably be expected to have a Material Adverse Effect);
and

	 	(b)	 	Permit representatives of the Issuing Bank to visit and inspect any of its
properties and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the members of the Group
with officers and employees of the members of the Group and with their independent
certified public accountants.

	16.8 	 	Notices
	 
	 	 	Promptly give notice to the Issuing Bank of:

	 	(a)	 	the occurrence of any Default or Event of Default;
	 
	 	(b)	 	any fall below AM Best Financial Strength rating B++ by a Borrower;
	 
	 	(c)	 	any default or event of default under any Contractual Obligation of any member
of the Group or litigation, investigation or proceeding that may exist at any time with
respect to any member of the Group and/or any member of the Group and any Governmental
Authority, that in either case, if not cured or if adversely determined, as the case
may be, could reasonably be expected to have a Material Adverse Effect;
	 
	 	(d)	 	any other development or event that has had or could reasonably be expected to
have a Material Adverse Effect.

Each notice pursuant to this Clause 16.8 (Notices) shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein and stating
what action the relevant member of the Group proposes to take with respect thereto.

	16.9	 	Environmental Laws
	 
	 	 	Except as would not reasonably be expected to result, individually or in the aggregate, in a
Material Adverse Effect, comply with all applicable Environmental Laws.
	 
	16.10	 	Hybrid Capital
	 
	 	 	Promptly give notice to the Issuing Bank to the extent any instrument issued by any Borrower
that was previously classified in whole or in part as Hybrid Capital ceases to be classified
(in whole or in such part) as “hybrid equity” by S&P.
	 
	16.11	 	Validity and admissibility in evidence
	 
	 	 	Maintain all Authorisations required:

	 	(a)	 	to enable it lawfully to enter into, exercise its rights and comply with its
obligations in the Finance Documents to which it is a party;
	 
	 	(b)	 	to make the Finance Documents to which it is a party admissible in evidence in
its jurisdiction of incorporation;

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	 	(c)	 	to enable it to create the Security to be created by it pursuant to any
Security Document and to ensure that such Security has the priority and ranking it is
expressed to have; and

such Authorisations shall at all times be obtained, effected and in full force and effect.

	17.	 	NEGATIVE COVENANTS
	 
	 	 	Each Borrower hereby agrees that, so long as the Commitment remains in effect, any Letter of
Credit remains outstanding or any amount is owing to the Issuing Bank hereunder, such
Borrower shall not, and shall not permit any of its Subsidiaries to, directly or indirectly:

	17.1	 	Indebtedness

	 	(a)	 	Create, incur, assume or permit to exist any Financial Indebtedness, or agree,
become or remain liable (contingent or otherwise) to do any of the foregoing, except
for:

	 	(i)	 	Financial Indebtedness of any Borrower pursuant to any Finance
Document;
	 
	 	(ii)	 	Financial Indebtedness of any member of the Group to any other
member of the Group incurred in the ordinary course of business;
	 
	 	(iii)	 	Guarantee Obligations incurred in the ordinary course of
business by any member of the Group of obligations of any other member of the
Group;
	 
	 	(iv)	 	Financial Indebtedness outstanding on the date hereof and listed
in Schedule 6 (Financial Indebtedness) and any refinancings, refundings,
renewals or extensions thereof (without increasing, or shortening the maturity
of, the principal amount thereof, except by an amount equal to any existing
commitments unutilised thereunder);
	 
	 	(v)	 	Financial Indebtedness (including, without limitation, Capital
Lease Obligations) incurred in the ordinary course of business and secured by
Security permitted by Clause 17.5(h) in an aggregate principal amount not to
exceed $25,000,000 at any one time outstanding;
	 
	 	(vi)	 	obligations (contingent or otherwise) existing or arising under
any Swap Contract, provided that such obligations are (or were) entered into by
such Subsidiary in the ordinary course of business for the purpose of directly
mitigating risks associated with liabilities, commitments, investments, assets
or property held or reasonably anticipated by such Subsidiary, or changes in the
value of securities issued by such Subsidiary, and not for purposes of
speculation or taking a “market view”;
	 
	 	(vii)	 	Financial Indebtedness for letters of credit which have been
issued on behalf of any Insurance Subsidiary to or for the benefit of
reinsurance cedents or insurance clients in the ordinary course of business;

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	 	(viii)	 	Financial Indebtedness of any Subsidiary incurred under securities lending
arrangements entered into in the ordinary course of business; and
	 
	 	(ix)	 	so long as no Default or Event of Default shall have occurred and
be continuing or would result there from, additional Financial Indebtedness
incurred in the ordinary course of business not otherwise permitted under this
Clause 17.1(a) in an aggregate principal amount (for all Borrowers and their
Subsidiaries) not to exceed US$5,000,000 at any one time outstanding.

	17.2	 	Disposition of Property
	 
	 	 	Dispose of any of its property, whether now owned or hereafter acquired, or issue or sell
any shares of its Capital Stock to any Person, except:

	 	(a)	 	transactions in the ordinary course of business involving current assets or
other assets classified in the applicable Person’s balance sheet as available for sale
or trading (as defined in FAS 115), including the disposition in the ordinary course of
business of any assets in its investment portfolio;
	 
	 	(b)	 	the Disposition of obsolete, worn out or surplus property in the ordinary
course of business;
	 
	 	(c)	 	the sale of inventory in the ordinary course of business;
	 
	 	(d)	 	the license (as licensor) of intellectual property so long as such license does
not materially interfere with the business of any Borrower or any of its Subsidiaries;
	 
	 	(e)	 	the release, surrender or waiver of contract, tort or other claims of any kind
as a result of the settlement of any litigation or threatened litigation;
	 
	 	(f)	 	the granting or existence of Security (and foreclosure thereon) not prohibited
by this Agreement;
	 
	 	(g)	 	the lease or sublease of real property so long as such lease or sublease does
not materially interfere with the business of any Borrower or any of its Subsidiaries;
	 
	 	(h)	 	dividends not prohibited by Clause 17.3 (Restricted payments);
	 
	 	(i)	 	any ceding of insurance or reinsurance in the ordinary course of business;
	 
	 	(j)	 	Dispositions permitted by Clause 17.9(d)(i);
	 
	 	(k)	 	the sale or issuance of Capital Stock to the Parent or any Borrower; and
	 
	 	(l)	 	Dispositions of other property during any fiscal year so long as the aggregate
fair market value of all property disposed of by Parent and its Subsidiaries in such
fiscal year (and not permitted by sub-clauses (a) to (k) above) does not exceed 10% of
the consolidated assets of the Parent and its Subsidiaries as of the last day of the
prior fiscal year of the Parent.

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	17.3	 	Restricted Payments
	 
	 	 	Declare or pay any dividend (other than dividends payable solely in common stock of the
Person making such dividend) on, or make any payment on account of, or set apart assets for
a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, any Capital Stock of any Borrower or any of its Subsidiaries, whether
now or hereafter outstanding, or make any other distribution in respect thereof, either
directly or indirectly, whether in cash or property or in obligations of any Borrower or any
of its Subsidiaries, (collectively, “Restricted Payments”), except that any Borrower or any
Subsidiary may make Restricted Payments to any member of the Group.
	 
	17.4	 	Investments
	 
	 	 	Make any advance, loan, extension of credit (by way of guarantee or otherwise) or capital
contribution to, or purchase any Capital Stock, bonds, notes, debentures or other debt
securities of, or any assets constituting a business unit of, or make any other investment
in, any Person (all of the foregoing, “Investments”), except:

	 	(a)	 	extensions of trade credit in the ordinary course of business;
	 
	 	(b)	 	investments in Cash Equivalents;
	 
	 	(c)	 	investments in securities lending arrangements entered into in the ordinary
course of business;
	 
	 	(d)	 	Guarantee Obligations permitted by Clause 17.1 (Indebtedness);
	 
	 	(e)	 	loans and advances to employees of any member of the Group in the ordinary
course of business (including for travel, entertainment and relocation expenses) in an
aggregate amount for all members of the Group not to exceed US$250,000 at any one time
outstanding;
	 
	 	(f)	 	inter-company Investments by any member of the Group in any other member of the
Group;
	 
	 	(g)	 	acquisitions of all or substantially all of the Capital Stock or assets of
another Person so long as at such time and immediately after giving effect thereto no
Default or Event of Default exists or would result there from;
	 
	 	(h)	 	

	 	(i)	 	Investments by Insurance Subsidiaries in the ordinary course of
business and
	 
	 	(ii)	 	Investments by any Borrower or any of its Subsidiaries that is
not an Insurance Subsidiary in Investments that, if made by an Insurance
Subsidiary, would be permitted by the immediately preceding sub-clause (i); and

	 	(i)	 	in addition to Investments otherwise expressly permitted by this Clause,
Investments by the Borrowers and their Subsidiaries in an aggregate amount (valued at
cost) not to exceed US$25,000,000 during the term of this Agreement.

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	17.5	 	Security
	 
	 	 	Create, incur, assume or suffer to exist any Security upon any of its property, whether now
owned or hereafter acquired, except:

	 	(a)	 	Security for taxes not yet due or that are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect thereto are
maintained on the books of the applicable person in conformity with US GAAP;
	 
	 	(b)	 	carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like
Security arising in the ordinary course of business that are not overdue for a period
of more than 30 days or that are being contested in good faith by appropriate
proceedings;
	 
	 	(c)	 	pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security legislation;
	 
	 	(d)	 	deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary course of
business;
	 
	 	(e)	 	Security on assets of any Insurance Subsidiary pledged as collateral for
Financial Indebtedness of such Insurance Subsidiary incurred under Clause 17.1(a)(vii);
	 
	 	(f)	 	Security on assets of any Insurance Subsidiary created to secure obligations of
such Insurance Subsidiary under insurance and reinsurance policies;
	 
	 	(g)	 	easements, rights-of-way, restrictions and other similar encumbrances incurred
in the ordinary course of business that, in the aggregate, are not substantial in
amount and that do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the business of
any Borrower or any of its Subsidiaries;
	 
	 	(h)	 	Security securing Financial Indebtedness of a Borrower or any of its
Subsidiaries incurred pursuant to Clause 17.1(a)(v) to finance the acquisition,
construction or improvement of fixed or capital assets, provided that:

	 	(i)	 	such Security shall be created substantially simultaneously with
the acquisition, construction or improvement of such fixed or capital assets,
	 
	 	(ii)	 	such Security does not at any time encumber any property other
than the property financed by such Financial Indebtedness, and
	 
	 	(iii)	 	the aggregate amount of Financial Indebtedness secured thereby
is not increased;

	 	(i)	 	Security created pursuant to the Finance Documents;
	 
	 	(j)	 	any interest or title of a lessor under any lease entered into by a Borrower or
any of its Subsidiaries in the ordinary course of its business and covering only the
assets so leased;

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	 	(k)	 	Security (including Security in favour of the Custodian with respect to the
Collateral Accounts) on cash and securities of any member of the Group incurred as part
of the management of its investment portfolio in accordance with customary portfolio
management practice and not in violation of its investment policy as in effect on the
date of this Agreement; provided, however, that, with respect to the Collateral
Accounts, such Security shall be permitted only to the extent expressly provided in the
Borrower A Collateral Control Agreement, the Borrower B Collateral Control Agreement or
an Acceding Borrower Collateral Control Agreement (as the case may be);
	 
	 	(l)	 	Security existing on the date hereof and listed on Schedule 8 (Existing
Security at the date of this Agreement);
	 
	 	(m)	 	Security arising in the ordinary course of business on operating accounts
maintained by any member of the Group in the ordinary course of business securing
obligations (other than Financial Indebtedness) arising in the ordinary course of
business in favour of the banks in which such operating accounts are maintained;
	 
	 	(n)	 	attachments, judgments and similar Security for sums not exceeding
US$20,000,000 in the aggregate (excluding any portion thereof covered by insurance as
to which the relevant insurance company has acknowledged coverage);
	 
	 	(o)	 	attachments, judgments and similar Security for sums of US$20,000,000 or more
(excluding any portion thereof which is covered by insurance as to which the relevant
insurance company has acknowledged coverage), provided that the
execution or other enforcement of such Security is stayed and fully bonded pending
appeal;
	 
	 	(p)	 	any Security existing on property acquired in connection with an Investment
made in connection with Clause 17.4 (Investments), provided that such Security shall
extend solely to the item or items of property so acquired and, if required by the
terms of the instrument originally creating such Security, other property which is an
improvement to or is acquired for specific use in connection with such acquired
property;
	 
	 	(q)	 	restrictions and similar encumbrances created pursuant to Requirements of Law
upon the sale or transferability of the Capital Stock of any Insurance Subsidiary and
the exercise of any right to control any such Insurance Subsidiary;
	 
	 	(r)	 	Security securing Swap Contracts of any Borrower or any of its Subsidiaries;
and
	 
	 	(s)	 	any extension, renewal or replacement of any Security permitted by the
preceding sub-clauses of this Clause 17.5 (Security), provided that no additional
property (other than a substitution of like property) shall be encumbered thereby and
no additional Financial Indebtedness shall be secured thereby unless such additional
Financial Indebtedness on such property would have been permitted in connection with
the original creation, incurrence or assumption of such Security.

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	17.6	 	Clauses Restricting Subsidiary Distributions
	 
	 	 	Enter into or suffer to exist or become effective any consensual encumbrance or restriction
on the ability of any Borrower or any of their Subsidiaries to:

	 	(a)	 	make Restricted Payments in respect of any Capital Stock of any Borrower held
by, or pay any Financial Indebtedness owed to, any member of the Group;
	 
	 	(b)	 	make loans or advances to, or other Investments in, any member of the Group; or
	 
	 	(c)	 	transfer any of its assets to any member of the Group,

        except for such encumbrances or restrictions existing under or by reason of:

	 	(a)	 	any restrictions existing under the Finance Documents; and
	 
	 	(b)	 	any restrictions with respect to a Subsidiary of a Borrower imposed pursuant to
an agreement that has been entered into in connection with the Disposition of all or
substantially all of the Capital Stock or assets of such Subsidiary of a Borrower.

	17.7	 	Business

	 	 	 	Enter into any business, either directly or through any Subsidiary, except for insurance,
reinsurance or insurance-related businesses.

	17.8	 	Rating
	 
	 	 	Permit at any time the rating of any Relevant Subsidiary to fall below AM Best Financial
Strength Rating B++. For purposes herein, a “Relevant Subsidiary” is any Insurance
Subsidiary that had total consolidated assets or total consolidated revenues exceeding 10%
of the total consolidated assets or total consolidated revenues, respectively, of the
Parent and its Subsidiaries on a consolidated basis at the end of or for, respectively, the
then most recently completed Financial Quarter for which financial statements shall have
been delivered to the Issuing Bank as required herein.
	 
	17.9	 	Consolidations, Amalgamations, Mergers and Liquidations
	 
	 	 	Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of
its property or business, except for:

	 	(a)	 	the merger or consolidation of any Subsidiary of a Borrower with or into a
Borrower (provided that a Borrower shall be the continuing or surviving corporation);
	 
	 	(b)	 	the merger or consolidation by any Borrower with or into any other Borrower;
	 
	 	(c)	 	the merger or consolidation of any Subsidiary of a Borrower (such Subsidiary
not being a Borrower) with or into any other Subsidiary of another Borrower (such other
Subsidiary not being a Borrower) or with or into any other Borrower (provided that the
Borrower is the surviving corporation);
	 
	 	(d)	 	the Disposition by any Subsidiary of a Borrower of any or all of its assets:

	 	(i)	 	to any Borrower (upon voluntary liquidation or otherwise); or

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	 	(ii)	 	pursuant to a Disposition permitted by Clause 17.2 (Disposition
of property); and

	 	(e)	 	the merger or consolidation by any Person (other than as set forth above) with
or into any Borrower (provided that such Borrower is the continuing or surviving
corporation) so long as at the time of such merger or consolidation and immediately
after giving effect thereto no Default or Event of Default exists or would result there
from.

	18. 	EVENTS OF DEFAULT
	 
	 	If any of the following events shall occur and be continuing:
	 
	18.1	any Borrower shall fail to pay any reimbursement obligation with respect to a Letter of
Credit when due in accordance with the terms hereof; or any Borrower shall fail to pay any
interest on any such reimbursement obligations or any other amount payable hereunder or under
any other Finance Document, within five Business Days after any such interest or other amount
becomes due in accordance with the terms hereof or thereof; or
	 
	18.2	any representation or warranty made or deemed made by any Borrower herein or in any other
Finance Document or that is contained in any certificate, document or financial or other
statement furnished by it at any time under or in connection with this Agreement or any such
other Finance Document shall prove to have been inaccurate in any material respect on or as of
the date made or deemed made; or
	 
	18.3	any Borrower shall default in the observance or performance of any agreement contained in
Clause 16.5(a) (with respect to the Borrowers only), Clause 16.8(a), Clause 17 (Negative
covenants) or Clause 19 (Collateral) (subject to the two Business Days’ grace period set out
in Clause 19.6) of this Agreement; or
	 
	18.4	any Borrower shall default in the observance or performance of any other agreement contained
in this Agreement or any other Finance Document (other than as provided in Clause 18.1 through
Clause 18.3), and such default shall continue unremedied for a period of 30 days after notice
to Borrower A from the Issuing Bank; or
	 
	18.5	any member of the Group shall:

	 	(a)	 	default in making any payment of any principal of any Financial Indebtedness
(including any Guarantee Obligation) on the scheduled or original due date with respect
thereto; or
	 
	 	(b)	 	default in making any payment of any interest on any such Financial
Indebtedness beyond the period of grace, if any, provided in the instrument or
agreement under which such Financial Indebtedness was created; or
	 
	 	(c)	 	default in the observance or performance of any other agreement or condition
relating to any such Financial Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to

- 54 -

 

	 	 	 	cause, or to
permit the holder or beneficiary of such Financial Indebtedness (or a trustee or agent
on behalf of such holder or beneficiary) to cause, with the giving of notice if
required, such Financial Indebtedness to become due prior to its stated maturity or (in
the case of any such Financial Indebtedness constituting a Guarantee Obligation) to
become payable;

	 	 	 	provided, that a default, event or condition described in this Clause 18.5(a), (b) or (c)
shall not at any time constitute an Event of Default unless, at such time, one or more
defaults, events or conditions of the type described in this clause 18.5(a), (b) and (c)
shall have occurred and be continuing with respect to Financial Indebtedness the outstanding
principal amount of which exceeds in the aggregate US$20,000,000; or

18.6

	 	(a)	 	any Borrower or any Material Subsidiary shall commence any case, proceeding or
other action

	 	(i)	 	under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganisation or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganisation,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or
	 
	 	(ii)	 	seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial part
of its assets, or any Borrower or any Material Subsidiary shall make a general
assignment for the benefit of its creditors; or

	 	(b)	 	there shall be commenced against any Borrower or any Material Subsidiary any
case, proceeding or other action of a nature referred to in Clause 18.6(a) that:

	 	(i)	 	results in the entry of an order for relief or any such
adjudication or appointment; or
	 
	 	(ii)	 	remains undismissed, undischarged or unbonded for a period of 60
days; or

	 	(c)	 	there shall be commenced against any Borrower or any Material Subsidiary any
case, proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of its
assets that results in the entry of an order for any such relief that shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or
	 
	 	(d)	 	any Borrower or any Material Subsidiary shall take any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in Clauses 18.6(a), 18.6(b) or 18.6(c); or
	 
	 	(e)	 	any Borrower or any Material Subsidiary shall generally not, or shall be unable
to, or shall admit in writing its inability to, pay its debts as they become due; or

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	18.7	 	one or more judgments or decrees shall be entered against any member of the Group involving
in the aggregate a liability (not paid or fully covered by insurance as to which the relevant
insurance company has acknowledged coverage) of US$20,000,000 or more, and all such judgments
or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 60
days from the entry thereof; or
	 
	18.8	 	any Security Document shall cease, for any reason, to be in full force and effect or any
Borrower shall so assert; or
	 
	18.9	 	a Change of Control shall occur; or

18.10

	 	(a)	 	any Person shall engage in any “prohibited transaction” (as defined in Section
406 of ERISA or Section 4975 of the Code) involving any Plan,
	 
	 	(b)	 	any “accumulated funding deficiency” (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Security in
favour of the PBGC or a Plan shall arise on the assets of any member of the Group or
any Commonly Controlled Entity,
	 
	 	(c)	 	a Reportable Event shall occur with respect to, or proceedings shall commence
to have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the Issuing
Bank, likely to result in the termination of such Plan for purposes of Title IV of
ERISA,
	 
	 	(d)	 	any Single Employer Plan shall terminate for purposes of Title IV of ERISA,
	 
	 	(e)	 	any member of the Group or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Issuing Bank is likely to, incur any liability in connection
with a withdrawal from, or the Insolvency or Reorganisation of, a Multiemployer Plan,
or
	 
	 	(f)	 	any other event or condition shall occur or exist with respect to a Plan;

	 	 	 	and in each case in Clause 18.10(a) through to Clause 18.10(f), such event or condition,
together with all other such events or conditions, if any, could, in the sole judgment of
the Issuing Bank, reasonably be expected to have a Material Adverse Effect; or

	18.11	 	any Borrower or any Material Subsidiary suspends or ceases to carry on all or a material
part of its business; or
	 
	18.12	 	a Borrower repudiates a Finance Document or takes any corporate action to repudiate a
Finance Document;

then, and in any such event,

	 	(a)	 	if such event is an Event of Default specified in Clause 18.6(a) or Clause
18.6(b) with respect to any Borrower, automatically the Commitments shall immediately

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	 	 	 	terminate and all amounts owing under this Agreement and the other Finance Documents
shall immediately become due and payable, and

	 	(b)	 	if such event is any other Event of Default, any or all of the following
actions may be taken:

	 	(i)	 	the Issuing Bank may, by notice to Borrower A declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate;
	 
	 	(ii)	 	the Issuing Bank may, by notice to Borrower A, declare all
amounts owing under this Agreement and the other Finance Documents to be due and
payable forthwith, whereupon the same shall immediately become due and payable;
and
	 
	 	(iii)	 	the Issuing Bank may exercise, in respect of the Collateral, the
rights and remedies under the Finance Documents.

	 	 	 	With respect to each Letter of Credit with respect to which presentment for honour
shall not have occurred at the time of an acceleration pursuant to this paragraph,
the Borrowers shall at such time deposit in a cash collateral account opened by the
Issuing Bank an amount in the currency in which such Letter of Credit is denominated
equal to the aggregate then undrawn and unexpired amount of such Letter of Credit.
Amounts held in such cash collateral account shall be applied by the Issuing Bank to
the payment of drafts drawn under such Letter of Credit, and the unused portion
thereof after all such Letters of Credit shall have expired or been fully drawn upon,
if any, shall be applied to repay other obligations of the Borrowers hereunder and
under the other Finance Documents. After all such Letters of Credit shall have
expired or been fully drawn upon, all Obligations shall have been satisfied in full,
the balance, if any, in such cash collateral account shall be returned to the
Borrowers (or such other Person as may be lawfully entitled thereto). Except as
expressly provided above in this Clause, presentment, demand, protest and all other
notices of any kind are hereby expressly waived by the Borrowers.

19. COLLATERAL

	19.1	 	Subject to Clause 19.7 below, each Borrower shall ensure that at all times:

	 	(a)	 	its Collateralisation Ratio is at least equal to 100 per cent.; and
	 
	 	(b)	 	the Eligible Collateral deposited by that Borrower is comprised of at least 25
per cent. Eligible Collateral A.

	19.2	 	To the extent that any Letter of Credit drawn by a Borrower is not fully collateralised by
Eligible Collateral in the same currency as that Letter of Credit (the amount of such a Letter
of Credit not covered by Eligible Collateral in the same currency as that Letter Credit being
the “Shortfall”), that Borrower may make up any Shortfall by delivering Eligible Collateral
denominated in the Base Currency or an Optional Currency. However, in this case, the
percentages set out in the definition of “Collateral Margin” shall in each case be reduced by

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	 	 	10 per cent. for the purposes of calculating the Collateralisation Ratio in respect of that
Shortfall.

	19.3	 	For the purposes of testing whether each Borrower is in compliance with its obligations under
Clause 19.1 above (and subject to Clause 19.4 below):

	 	(a)	 	the Issuing Bank shall deliver to the Borrowers and the Custodian an
Outstanding LC Certificate on or before 1:00pm (London time) 1 Business Day before each
Test Date;
	 
	 	(b)	 	the Borrowers shall procure the delivery to the Issuing Bank of a Collateral
Compliance Certificate on or before 1:00pm (London time) on each Test Date.

	 	 	 	A Collateral Compliance Certificate to be delivered on any Test Date falling within
paragraph (b) of the definition of “Test Date” need only be certified by the Custodian and
not by the Borrowers, and the Borrowers shall accept such certification as being true,
accurate and binding upon them.

	19.4	 	The Issuing Bank shall also deliver to the Borrowers and the Custodian an Outstanding LC
Certificate within 3 Business Days after:

	 	(a)	 	expiry of any Letter of Credit in accordance with its terms where such Letter
of Credit has not been renewed in accordance with Clause 5.5 (Renewal of a Letter of
Credit);
	 
	 	(b)	 	any termination of, or any reduction in the amount of, any Letter of Credit,

	 	 	 	to reflect such expiry, termination or reduction, provided that:

	 	(i)	 	in the case of expiry of any Letter of Credit, the beneficiary of
such Letter of Credit has returned the original of such Letter of Credit to the
Issuing Bank (or waived any right to draw, and indemnified the Issuing Bank for
any drawing (to the Issuing Bank’s satisfaction acting in good faith) under such
Letter of Credit);
	 
	 	(ii)	 	in the case of early termination of any Letter of Credit, the
beneficiary of such Letter of Credit has returned the original of such Letter of
Credit to the Issuing Bank (or waived any right to draw, and indemnified the
Issuing Bank for any drawing (to the Issuing Bank’s satisfaction acting in good
faith) under such Letter of Credit); and
	 
	 	(iii)	 	in the case of reduction of any Letter of Credit, the
beneficiary of such Letter of Credit has agreed to make such amendments to such
Letter of Credit as are required by the Issuing Bank to reflect that reduction.

	19.5	 	Each Borrower’s obligations under Clause 19.1 above shall not be affected by any failure by
the Issuing Bank to deliver an Outstanding LC Certificate in accordance with Clause 19.3 or
Clause 19.4 above. In the event that the Issuing Bank fails to deliver an Outstanding LC
Certificate in accordance with Clause 19.3 or Clause 19.4 above, the Borrowers shall procure
that the Custodian will perform the calculations set out in the relevant Collateral Compliance
Certificate in accordance with the most recent Outstanding LC Certificate delivered by the
Issuing Bank.

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	19.6	 	If on any Test Date (other than where such Test Date is a date falling within paragraph (b)
of the definition of “Test Date”) a Borrower is not in compliance with its obligations under
Clause 19.1 above, that Borrower undertakes to deliver such further Eligible Collateral within
two (2) Business Days of such Test Date as is necessary to ensure that, immediately following
the delivery of that further Eligible Collateral, it is in compliance with its obligations
under Clause 19.1 above. The relevant Borrower shall procure the delivery of an updated
Collateral Compliance Certificate evidencing that it is in compliance with its obligations
under Clause 19.1 above to the Issuing Bank on or before the expiry of that two (2) Business
Day period.
	 
	19.7	 	Each Borrower shall be entitled to withdraw Eligible Collateral from the Custodian Account in
accordance with the terms of the Security Documents.
	 
	20.	 	CHANGES TO THE ISSUING BANK
	 
	20.1	 	Assignments and transfers by the Issuing Bank

	 	(a)	 	Subject to paragraph b below, the Issuing Bank may:

	 	(i)	 	assign any of its rights; or
	 
	 	(ii)	 	transfer by novation any of its rights and obligations under this
Agreement,

	 	 	 	to a financial institution that is included on the “Bank List” maintained by the
National Association of Insurance Commissioners (“NAIC”) (pursuant to the Purpose and
Procedures Manual of the NAIC Securities Valuation Office (or any replacement thereof
or any similar list, or set of eligibility standards, maintained by the NAIC for
purposes of determining whether banks are qualified to issue or confirm letters of
credit for reinsurance purposes)).
	 
	 	(b)	 	The prior written consent of Borrower A (which shall not be unreasonably
withheld or delayed) shall be required for any such assignment or transfer unless (x)
such assignment or transfer is to an Affiliate of the Issuing Bank or (y) an Event of
Default exists. Borrower A will be deemed to have given its consent five Business Days
after the Issuing Bank has requested it unless consent is expressly refused by Borrower
A within that time.
	 
	 	(c)	 	The consent of Borrower A to an assignment or transfer must not be withheld
solely because the assignment or transfer may result in an increase to the Mandatory
Cost.
	 
	 	(d)	 	Any such agreement or transfer shall be effected by such process and
documentation as is agreed between the Issuing Bank and the proposed transferee.

	21.	 	CHANGES TO THE BORROWER
	 
	21.1	 	Assignments and transfer by a Borrower
	 
	 	 	A Borrower may not assign any of its rights or transfer any of its rights or obligations
under the Finance Documents.

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	22.	 	CONDUCT OF BUSINESS BY THE ISSUING BANK
	 
	 	 	No provision of this Agreement will:

	 	(a)	 	interfere with the right of the Issuing Bank to arrange its affairs (tax or
otherwise) in whatever manner it thinks fit;
	 
	 	(b)	 	oblige the Issuing Bank 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 the Issuing Bank to disclose any information relating to its affairs
(tax or otherwise) or any computations in respect of Tax.

	23.	 	PAYMENT MECHANICS
	 
	23.1	 	Payments to the Issuing Bank

	 	(a)	 	On each date on which a Borrower is required to make a payment under a Finance
Document that Borrower shall make the same available to the Issuing Bank (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 Issuing Bank as being customary at the time for
settlement of transactions in the relevant currency in the place of payment.
	 
	 	(b)	 	Payment shall be made to such account in the principal financial centre of the
country of that currency (or, in relation to euro, in a principal financial centre in a
Participating Member State or London) with such bank as the Issuing Bank specifies.

	23.2	 	Partial payments

	 	(a)	 	If the Issuing Bank receives a payment that is insufficient to discharge all
the amounts then due and payable by a Borrower under the Finance Documents, the Issuing
Bank shall apply that payment towards the obligations of that Borrower under the
Finance Documents in the following order:

	 	(i)	 	first, in or towards payment pro rata of any unpaid fees, costs
and expenses of the Issuing Bank under the Finance Documents;
	 
	 	(ii)	 	secondly, in or towards payment pro rata of any accrued interest,
fee or commission due but unpaid under this Agreement;
	 
	 	(iii)	 	thirdly, in or towards payment pro-rata of any reimbursement
obligation in respect of any drawings under Letters of Credit that are due but
unpaid under this Agreement; and
	 
	 	(iv)	 	fourthly, in or towards payment pro rata of any other sum due but
unpaid under the Finance Documents.

	 	(b)	 	The Issuing Bank may vary the order set out in paragraphs (a)(ii) to (iv)
above.
	 
	 	(c)	 	Notwithstanding paragraphs (a) and (b) above, the Issuing Bank shall vary the
order set out in paragraphs (a)(ii) to (iv) above if necessary to ensure that the
Borrowers do not lose the benefit of any grace period set out in Clause 18.1.

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	23.3	 	No set-off by a Borrower
	 
	 	 	All payments to be made by a Borrower under the Finance Documents shall be calculated and be
made without (and free and clear of any deduction for) set-off or counterclaim.
	 
	23.4	 	Business Days

	 	(a)	 	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).
	 
	 	(b)	 	During any extension of the due date for payment of any Unpaid Sum under this
Agreement interest is payable on the Unpaid Sum at the rate payable on the original due
date.

	23.5	 	Currency of account

	 	(a)	 	Subject to paragraphs (b) to (e) below, the Base Currency is the currency of
account and payment for any sum due from a Borrower under any Finance Document.
	 
	 	(b)	 	A repayment of an Unpaid Sum or a part of an Unpaid Sum shall be made in the
currency in which the Unpaid Sum is denominated on its due date.
	 
	 	(c)	 	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.
	 
	 	(d)	 	Each payment in respect of costs, expenses or Taxes shall be made in the
currency in which the costs, expenses or Taxes are incurred.
	 
	 	(e)	 	Any amount expressed to be payable in a currency other than the Base Currency
shall be paid in that other currency.

	23.6	 	Change of currency

	 	(a)	 	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:

	 	(i)	 	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 Issuing Bank (after consultation with Borrower A); and
	 
	 	(ii)	 	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 Issuing Bank (acting reasonably).

	 	(b)	 	If a change in any currency of a country occurs, this Agreement will, to the
extent the Issuing Bank (acting reasonably and after consultation with Borrower A)
specifies to be necessary, be amended to comply with any generally accepted

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	 	 	 	conventions and market practice in the Relevant Interbank Market and otherwise to
reflect the change in currency.

	23.7	 	Disruption to Payment Systems etc.
	 
	 	 	If the Issuing Bank determines (in its discretion) that a Disruption Event has occurred or
the Issuing Bank is notified by a Borrower that a Disruption Event has occurred:

	 	(a)	 	the Issuing Bank may, and shall if requested to do so by a Borrower, consult
with the Borrowers with a view to agreeing with the Borrowers such changes to the
operation or administration of the Facility as the Issuing Bank may deem necessary in
the circumstances;
	 
	 	(b)	 	the Issuing Bank shall not be obliged to consult with the Borrowers 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)	 	any such changes agreed upon by the Issuing Bank and the Borrowers 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 29 (Amendments
and Waivers); and
	 
	 	(d)	 	the Issuing Bank shall not be liable for any damages, costs or losses
whatsoever (including, without limitation, for negligence, but excluding gross
negligence, wilful misconduct or any claim based on the fraud of the Issuing Bank)
arising as a result of its taking, or failing to take, any actions pursuant to or in
connection with this Clause 23.7.

	24.	 	SET-OFF
	 
	 	 	The Issuing Bank may set off any matured obligation due from a Borrower under the Finance
Documents against any matured obligation owed by the Issuing Bank to that Borrower,
regardless of the place of payment, booking branch or currency of either obligation. If the
obligations are in different currencies, the Issuing Bank may convert either obligation at a
market rate of exchange in its usual course of business for the purpose of the set-off.
	 
	25.	 	NOTICES
	 
	25.1	 	Communications in writing
	 
	 	 	Any 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.
	 
	25.2	 	Addresses
	 
	 	 	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 a Borrower, that identified with its name below; and

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	 	(b)	 	in the case of the Issuing Bank, that identified with its name below,

	 	 	or any substitute address or fax number or department or officer as the Party may notify to
the other Party by not less than five Business Days’ notice.

	25.3	 	Delivery

	 	(a)	 	Any communication or document made or delivered by one person to another under
or in connection with the Finance Documents will only be effective:

	 	(i)	 	if by way of fax, when received in legible form; or
	 
	 	(ii)	 	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 25.2 (Addresses), if addressed to that department or
officer.

	 	(b)	 	Any communication or document to be made or delivered to the Issuing Bank will
be effective only when actually received by the Issuing Bank and then only if it is
expressly marked for the attention of the department or officer identified with the
Issuing Bank’s signature below (or any substitute department or officer as the Issuing
Bank shall specify for this purpose).

	25.4	 	Notification of address and fax number
	 
	 	 	Promptly upon changing its address or fax number, the Issuing Bank shall notify the other
Parties.
	 
	25.5	 	English language

	 	(a)	 	Any notice given under or in connection with any Finance Document must be in
English.
	 
	 	(b)	 	All other documents provided under or in connection with any Finance Document
must be:

	 	(i)	 	in English; or
	 
	 	(ii)	 	if not in English, and if so required by the Issuing Bank,
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.

	26.	 	CALCULATIONS AND CERTIFICATES
	 
	26.1	 	Accounts
	 
	 	 	In any litigation or arbitration proceedings arising out of or in connection with a Finance
Document, the entries made in the accounts maintained by the Issuing Bank are prima facie
evidence of the matters to which they relate.

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	26.2	 	Certificates and Determinations
	 
	 	 	Any certification or determination by the Issuing Bank 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.
	 
	26.3	 	Day count convention
	 
	 	 	Any 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 Relevant Interbank Market differs, in
accordance with that market practice.
	 
	27.	 	PARTIAL INVALIDITY
	 
	 	 	If, 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.
	 
	28.	 	REMEDIES AND WAIVERS
	 
	 	 	No failure to exercise, nor any delay in exercising, on the part of the Issuing Bank, 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.
	 
	29.	 	AMENDMENTS AND WAIVERS
	 
	 	 	Any term of the Finance Documents may be amended or waived only with the consent of the
Issuing Bank and Borrower A and any such amendment or waiver will be binding on the Parties.
	 
	30.	 	CONFIDENTIALITY
	 
	30.1	 	Confidential Information
	 
	 	 	The Issuing Bank agrees to keep all Confidential Information confidential and not to
disclose it to anyone, save to the extent permitted by Clause 30.2 (Disclosure of
Confidential Information) and to ensure that all Confidential Information is protected with
security measures and a degree of care that would apply to its own confidential information.
	 
	30.2	 	Disclosure of Confidential Information
	 
	 	 	The Issuing Bank may disclose:

	 	(a)	 	to any of its Affiliates and any of its or their officers, directors,
employees, professional advisers, auditors, partners and Representatives such
Confidential Information as the Issuing Bank shall consider appropriate if any person
to whom the Confidential Information is to be given pursuant to this paragraph (a) is
informed in writing of its confidential nature and that some or all of such

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	 	 	 	Confidential Information may be price-sensitive information except that there shall
be no such requirement to so inform if the recipient is subject to professional
obligations to maintain the confidentiality of the information or is otherwise bound
by requirements of confidentiality in relation to the Confidential Information;
	 
	 	(b)	 	to any person:

	 	(i)	 	to (or through) whom it assigns or transfers (or may potentially
assign or transfer) all or any of its rights and/or obligations under one or
more Finance Documents and to any of that person’s Affiliates, Representatives
and professional advisers;
	 
	 	(ii)	 	with (or through) whom it enters into (or may potentially enter
into), whether directly or indirectly, any sub-participation in relation to, or
any other transaction under which payments are to be made or may be made by
reference to, one or more Finance Documents and/or a Borrower and to any of any
Borrower’s Affiliates, Representatives and professional advisers;
	 
	 	(iii)	 	who invests in or otherwise finances (or may potentially invest
in or otherwise finance), directly or indirectly, any transaction referred to in
paragraph (b)(i) or (b)(ii) above;
	 
	 	(iv)	 	to whom information is required or requested to be disclosed by
any court of competent jurisdiction or any governmental, banking, taxation or
other regulatory authority or similar body, the rules of any relevant stock
exchange or pursuant to any applicable law or regulation, and the Issuing Bank
shall, to the extent practicable, use reasonable endeavours to notify Borrower A
of the details of any such disclosure, provided that it is permitted to do so by
the relevant court, authority, body, rules, applicable law or regulation;
	 
	 	(v)	 	to whom information is required to be disclosed in connection
with, and for the purposes of, any litigation, arbitration, administrative or
other investigations, proceedings or disputes, (and the Issuing Bank shall use
reasonable endeavours to notify Borrower A of the details of any such disclosure
to the extent it is permitted to do so);
	 
	 	(vi)	 	who is a Party; or
	 
	 	(vii)	 	with the consent of Borrower A;

	 	 	 	in each case, such Confidential Information as the Issuing Bank shall consider
appropriate if:

	 	(A)	 	in relation to paragraphs (b)(i) and (b)(ii) above, the
person to whom the Confidential Information is to be given has entered into a
Confidentiality Undertaking except that there shall be no requirement for a
Confidentiality Undertaking if the recipient is a professional

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	 	 	 	adviser and is subject to professional obligations to maintain the
confidentiality of the Confidential Information;
	 
	 	(B)	 	in relation to paragraph (b)(iii) above, the person to whom
the Confidential Information is to be given has entered into a Confidentiality
Undertaking or is otherwise bound by requirements of confidentiality in
relation to the Confidential Information they receive and is informed that
some or all of such Confidential Information may be price-sensitive
information;
	 
	 	(C)	 	in relation to paragraphs (b)(iv), and (b)(v) above, the
person to whom the Confidential Information is to be given is informed of its
confidential nature and that some or all of such Confidential Information may
be price-sensitive information except that there shall be no requirement to so
inform if, in the opinion of the Issuing Bank, it is not practicable so to do
in the circumstances.

	30.3	 	Entire agreement
	 
	 	 	This Clause 30 (Confidentiality) constitutes the entire agreement between the Parties in
relation to the obligations of the Issuing Bank under the Finance Documents regarding
Confidential Information and supersedes any previous agreement, whether express or implied,
regarding Confidential Information.
	 
	31.	 	COUNTERPARTS
	 
	 	 	Each 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.
	 
	32.	 	GOVERNING LAW
	 
	 	 	This Agreement and any non-contractual obligations arising out of or in connection with it
are governed by English law.
	 
	33.	 	JURISDICTION

	 	(a)	 	The courts of England have exclusive jurisdiction to settle any dispute arising
out of or in connection with this Agreement (including a dispute relating to the
existence, validity or termination of this Agreement or any non-contractual obligation
arising out of or in connection with this Agreement) (a “Dispute”).
	 
	 	(b)	 	The Parties agree that the courts of England are the most appropriate and
convenient courts to settle Disputes and accordingly no Party will argue to the
contrary.
	 
	 	(c)	 	This Clause 33 is for the benefit of the Issuing Bank only. As a result, the
Issuing Bank shall not be prevented from taking proceedings relating to a Dispute in
any other courts with jurisdiction. To the extent allowed by law, the Issuing Bank may
take concurrent proceedings in any number of jurisdictions

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	34.	 	SERVICE OF PROCESS
	 
	 	 	Without prejudice to any other mode of service allowed under any relevant law, Borrower A:

	 	(a)	 	irrevocably appoints Borrower B as its agent for service of process in relation
to any proceedings before the English courts in connection with this Agreement; and
	 
	 	(b)	 	agrees that failure by a process agent to notify Borrower A of the process will
not invalidate the proceedings concerned.

This Agreement has been entered into on the date stated at the beginning of this Agreement.

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SCHEDULE 1

Part 1

Conditions Precedent

	1.	 	The Original Borrowers

	 	(a)	 	A copy of each Original Borrower’s constitutional documents.
	 
	 	(b)	 	A copy of a resolution of the board of directors of each Original Borrower:

	 	(i)	 	approving the terms of, and the transactions contemplated by,
the Finance Documents to which it is a party and resolving that it execute the
Finance Documents to which it is a party;
	 
	 	(ii)	 	authorising a specified person or persons to execute the
Finance Documents to which it is a party on its behalf; and
	 
	 	(iii)	 	authorising a specified person or persons, on its behalf, to
sign and/or despatch all documents and notices (including, if relevant, any
Utilisation Request) to be signed and/or despatched by it under or in
connection with the Finance Documents to which it is a party.

	 	(c)	 	A specimen of the signature of each person that signs a Finance Document on
behalf of an Original Borrower or that such Original Borrower intends to have sign
documents or notices under the Finance Documents.
	 
	 	(d)	 	A certificate of each Original Borrower (signed by a director or a
Responsible Officer) confirming utilising the Commitments in accordance with this
Agreement would not cause any borrowing, guaranteeing or other limit binding on such
Original Borrower to be exceeded.
	 
	 	(e)	 	A certificate of an authorised signatory of each Original Borrower
certifying that each copy document relating to it specified in this Schedule 1 Part 1
(Conditions precedent) is correct, complete and in full force and effect as at the
date of this Agreement.

	2.	 	Security

	 	(a)	 	The Collateral Security Agreements duly executed by the parties thereto and
all such documents necessary to create a perfected security interest in respect of
the Collateral.
	 
	 	(b)	 	The Collateral Control Agreements duly executed by the parties thereto.
	 
	 	(c)	 	A copy of the Custody Agreements duly executed by the parties thereto.

	3.	 	Finance Documents

	 	 	This Agreement executed by the members of the Group party to this Agreement.

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	4.	 	Legal opinions

	 	(a)	 	A legal opinion of Pinsent Masons LLP, legal advisers to the Issuing Bank
in England, substantially in the form distributed to the Issuing Bank prior to
signing this Agreement.
	 
	 	(b)	 	Legal opinions of the legal adviser to the Original Borrowers in New York,
substantially in the form distributed to the Issuing Bank prior to signing this
Agreement.
	 
	 	(c)	 	A legal opinion of Appleby, legal advisers to the Issuing Bank in Bermuda,
substantially in the form distributed the Issuing Bank prior to signing this
Agreement.

	5.	 	Other documents and evidence

	 	(a)	 	A copy of any other Authorisation or other document, opinion or assurance
which the Issuing Bank considers to be 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.
	 
	 	(b)	 	The Original Financial Statements and the latest audited statutory
financial statements of the Borrowers.
	 
	 	(c)	 	Evidence that the fees, costs and expenses then due from Borrower A (or a
Borrower as the case may be) pursuant to Clause 9 (Fees) and Clause 14 (Costs and
expenses) have been paid or will be paid by the first Utilisation Date.
	 
	 	(d)	 	Completion by the Issuing Bank of all necessary “know your customer” or
other similar checks.
	 
	 	(e)	 	A certified copy of a Foreign Exchange Letter issued by the Bermuda
Monetary Authority, Hamilton, Bermuda in relation to Borrower A; and
	 
	 	(f)	 	A certified copy of a Tax Assurance issued by the Registrar of Companies
for the Minister of Finance in relation to Borrower A.

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Part 2

Conditions Precedent to acceding borrower

	1.	 	The Acceding Borrower

	 	(a)	 	A copy of the Acceding Borrower’s constitutional documents.
	 
	 	(b)	 	A copy of a resolution of the board of directors of the Acceding Borrower:

	 	(i)	 	approving the terms of, and the transactions contemplated by,
the Finance Documents to which it is a party and resolving that it execute the
Finance Documents to which it is a party;
	 
	 	(ii)	 	authorising a specified person or persons to execute the
Finance Documents to which it is a party on its behalf; and
	 
	 	(iii)	 	authorising a specified person or persons, on its behalf, to
sign and/or despatch all documents and notices (including, if relevant, any
Utilisation Request) to be signed and/or despatched by it under or in
connection with the Finance Documents to which it is a party.

	 	(c)	 	A specimen of the signature of each person authorised by the resolution
referred to in paragraph (b) above.
	 
	 	(d)	 	A certificate of the Acceding Borrower (signed by a director) confirming
utilising the Commitments in accordance with this Agreement would not cause any
borrowing, guaranteeing or other limit binding on the Acceding Borrower (as the case
may be) to be exceeded.
	 
	 	(e)	 	A certificate of an authorised signatory of the Acceding Borrower’s
certifying that each copy document relating to it specified in this Schedule 1 Part 2
(Conditions Precedent to acceding borrower) is correct, complete and in full force
and effect as at a date no earlier than the date of this Agreement.

	2.	 	Security

	 	(a)	 	An Acceding Borrower Collateral Security Agreement duly executed by the
parties to it and all such documents necessary to create a preferential right in
respect of the Collateral.
	 
	 	(b)	 	An Acceding Borrower Collateral Control Agreement duly executed by the
parties to it.
	 
	 	(c)	 	A copy of an Acceding Borrower Custody Agreement duly executed by the
parties to it.

	3.	 	Finance Documents

	 	(a)	 	Accession deed by the Acceding Borrower to this Agreement executed by
Borrower A and the Acceding Borrower.

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	 	(b)	 	An original of the Process Agent Letter and evidence that the process agent
has accepted its appointment in accordance with the terms of the Process Agent
Letter.

	4.	 	Legal opinions

	 	(a)	 	A legal opinion of Pinsent Masons LLP, legal advisers to the Issuing Bank
in England in a form and content satisfactory to the Issuing Bank.
	 
	 	(b)	 	A legal opinion of the legal advisers to the Acceding Borrower in New York
in a form and content satisfactory to the Issuing Bank.
	 
	 	(c)	 	A legal opinion of the legal advisers to the Issuing Bank in such
jurisdiction as the Acceding Borrower is incorporated in, substantially in a form and
content satisfactory to the Issuing Bank.

	5.	 	Other documents and evidence

	 	(a)	 	A copy of any other Authorisation or other document, opinion or assurance
which the Issuing Bank considers to be 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.
	 
	 	(b)	 	The latest audited statutory financial statements of the Acceding Borrower.
	 
	 	(c)	 	Completion by the Issuing Bank of all necessary “know your customer” or
other similar checks.
	 
	 	(d)	 	If applicable to the Acceding Borrower, a certified copy of a Foreign
Exchange Letter issued by the Bermuda Monetary Authority, Hamilton, Bermuda in
relation to the Acceding Borrower or equivalent Authorisation in any other relevant
jurisdiction; and
	 
	 	(e)	 	If applicable a certified copy of a Tax Assurance issued by the Registrar
of Companies for the Minister of Finance in relation to the Acceding Borrower or
equivalent Authorisation in any other relevant jurisdiction.

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SCHEDULE 2

Utilisation Request

	 	 	 
	From:

	 	[Borrower A/Borrower B/Acceding Borrower]1
	 
	 	 
	To:

	 	Barclays Bank plc (the “Issuing Bank”)
	 
	 	 
	 

	 	The Bank of New York Mellon
	 
	 	 
	Dated:

	 	[•] 200[•]

Dear Sirs

[Borrower
A] – [specify] Facility Agreement dated [ • ] 200[ • ] (the “Agreement”)

	1.	 	We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement
have the same meaning in this Utilisation Request unless given a different meaning in this
Utilisation Request.
	 
	2.	 	We wish to arrange for a Letter of Credit to be [issued by the Issuing
Bank][[increased][decreased]2 on the following terms:

	 	 	 	 
	 	Borrower3

	 	[Borrower A] [Borrower B] [Acceding Borrower]
	 	 
	 	 
	 	[Proposed
Utilisation Date][Proposed amendment
date]4:

	 	[•] (or, if that is not a Business Day, the
next Business Day)]
	 	 
	 	 
	 	[Currency and
Amount][Increased
amount][Decreased
amount]5:

	 	[• or, if less, the Available Commitment][•]
	 	 
	 	 
	 	Beneficiary:

	 	[•]
	 	 
	 	 
	 	Term of Letter of Credit:

	 	[•] months
	 	 
	 	 
	 	Expiry Date

	 	[•]

	3.	 	We confirm that each condition specified in Clause 5.2 (Completion of a Utilisation Request)
and paragraph (b) of Clause 5.4 (Issue of Letters of Credit) is satisfied on the date of this
Utilisation Request.
	 
	4.	 	We further confirm that each Borrower is and will remain in compliance with Clause 4.1(b)
after making [this Utilisation][the above amendment]6. [We request that the

 

			
	1	 	Utilisation Request to be issued by Borrower A,
Borrower B or an Acceding Borrower (or by Borrower A on behalf of Borrower B or
an Acceding Borrower).
	 
	2	 	Select appropriate option depending on whether the
Utilisation Request relates to the issue of a Letter or Credit or an amendment
(increase or decrease) to an existing Letter of Credit.
	 
	3	 	Identify who the Borrower is.
	 
	4	 	See 2 above.
	 
	5	 	See 2 above.

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	 	 	Issuing Bank deliver to the Custodian and us an Outstanding LC Certificate reflecting this proposed
Utilisation. We shall procure delivery by the Custodian of a Collateral Compliance Certificate in
accordance with Clause 4.1(b) and Clause 19 (Collateral) of the Agreement.]7
	 
	5.	 	[ We further confirm that [                 ] is a Third Party Borrower.

	6.	 	Delivered together with this Utilisation Request is a copy of [                 ]’s board
resolutions confirming compliance with all relevant corporate benefit issues and a copy of [                
]’s shareholders resolution confirming the same.]8
	 
	7.	 	Delivery instructions: [specify delivery instructions]

Yours faithfully

 

Authorised Signatory for

and on behalf of

[BORROWER A [ON BEHALF OF BORROWER B/ACCEDING

BORROWER]/BORROWER B/ACCEDING BORROWER]9

 

			
	6	 	Select as appropriate depending on whether the
Utilisation Request is for a new Letter of Credit or an increase in principal
amount of an existing Letter of Credit.
	 
	7	 	Not applicable when the Utilisation Request relates to
decrease in principal amount of an existing Letter of Credit.
	 
	8	 	Paragraph 5 and 6 are applicable for Third Party
Borrowing only.
	 
	9	 	See note 1 above.

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SCHEDULE 3

Mandatory Cost formulae

	1.	 	The Mandatory Cost is an addition to the interest rate to compensate the Issuing Bank for the
cost of compliance with (a) 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) or (b) the requirements of the European Central Bank.
	 
	2.	 	The Mandatory Costs will be calculated by the Issuing Bank and expressed as a percentage per
annum.
	 
	3.	 	The Mandatory Cost where the Issuing Bank is lending from a Facility Office in a
Participating Member State will be the percentage notified by the Issuing Bank to Borrower A.
This percentage will be certified by the Issuing Bank in its notice to Borrower A to be its
reasonable determination of the cost (expressed as a percentage of all Letters of Credit made
by the Issuing Bank 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 Mandatory Cost will be calculated by the Issuing Bank as follows:

	 	(a)	 	in relation to a Sterling Letter of Credit:

	 	 	 
	AB
+ C(B –  D) + E × 0.01

	 	  per cent. per annum
	100 – (A + C)
	 

	 	(b)	 	in relation to a Letter of Credit in any currency other than Sterling:

	 	 	 
	E
× 0.01

	 	  per cent. per annum.
	300
	 

Where:

	 	A	 	is the percentage of Eligible Liabilities (assuming these to be in excess of
any stated minimum) which the Issuing Bank 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 any margin and the Mandatory
Cost and, if in respect of an Unpaid Sum, the additional rate of interest specified in
paragraph (a) of Clause 7.1 (Default interest)) payable for the relevant Interest
Period on the Letter of Credit.
	 
	 	C	 	is the percentage (if any) of Eligible Liabilities which that Issuing Bank is
required from time to time to maintain as interest bearing Special Deposits with the
Bank of England.
	 
	 	D	 	is the percentage rate per annum payable by the Bank of England to the
Issuing Bank on interest bearing Special Deposits.

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	 	E	 	is designed to compensate Issuing Bank for amounts payable under the Fees
Rules and is calculated by the Issuing Bank as being the average of the most recent
rates of charge supplied by the Issuing Bank to the Financial Services Authority
pursuant to the Fees Rules in respect of the relevant financial year of the Financial
Services Authority (calculated by the Issuing Bank for this purpose as being the
average of the Fee Tariffs applicable to the Issuing Bank for that fiscal year) and
expressed in pounds per £1,000,000 of the Tariff Base of the Issuing Bank.

	5.	 	For the purposes of this Schedule:

	 	(a)	 	“Eligible Liabilities” and “Special Deposits” have 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;
	 
	 	(b)	 	“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;
	 
	 	(c)	 	“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); and
	 
	 	(d)	 	“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.	 	Any determination by the Issuing Bank pursuant to this Schedule in relation to a formula, the
Mandatory Cost or any amount payable to the Issuing Bank shall, in the absence of manifest
error, be conclusive and binding on the Parties.
	 
	8.	 	The Issuing Bank may from time to time, after consultation with Borrower A, determine and
notify to Borrower A 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 the
Parties.

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SIGNATURES

	 	 	 
	THE BORROWERS
	 
	 	 
	ASPEN INSURANCE LIMITED
	 
	 	 
	By:

	 	/s/ David Skinner
	 
	 	 
	Address:

	 	Maxwell Roberts Building
	 

	 	1 Church Street
	 

	 	Hamilton
	 

	 	HM11 Bermuda
	 
	 	 
	Fax:

	 	+1 441 295 1829
	 
	 	 
	Attn: Company Secretary
	 
	 	 
	ASPEN INSURANCE UK LIMITED
	 
	 	 
	By:

	 	/s/ Stephen Rose
	 
	 	 
	Address:

	 	30 Fenchurch Street
	 

	 	London EC3M 3BD
	 

	 	United Kingdom
	 
	 	 
	Fax:

	 	+44 (0)20 7184 8500
	 
	 	 
	Attn: Company Secretary
	 
	 	 
	THE ISSUING BANK
	 
	 	 
	BARCLAYS BANK PLC
	 
	 	 
	By:
	 	/s/ Stuart Ratcliffe
	 
	 	 
	Address:

	 	Barclays Commercial Bank
	 

	 	Level 11
	 

	 	1 Churchill Place
	 

	 	London
	 

	 	E14 5HP
	 
	 	 
	Fax:

	 	+44 (0)207 116 7645
	Attn:

	 	Stuart Ratcliffe (Director – Insurance)

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