Document:

Exhibit
10.1

CONFORMED COPY

 

$300,000,000

5-YEAR REVOLVING
CREDIT FACILITY

CREDIT
AGREEMENT

Among

ASSURED GUARANTY
LTD.,

ASSURED GUARANTY
CORP.,

ASSURED GUARANTY
(UK) LTD.,

ASSURED GUARANTY
RE LTD.,

ASSURED GUARANTY
RE OVERSEAS LTD.

and

THE BANKS PARTY
HERETO

and

ABN AMRO BANK
N.V.,

As Administrative Agent

Dated as of November 6, 2006

 

ABN AMRO
INCORPORATED AND BANK OF AMERICA SECURITIES LLC,

as Lead Arrangers

and

BANK OF AMERICA, N.A. AND
KEY BANK, N.A.,

As Syndication Agents,

 

TABLE OF CONTENTS

	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I CERTAIN DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 1.01 Certain Definitions

  	
   

  	
  1

  
	
   

  	
  Section 1.02 Construction

  	
   

  	
  21

  
	
   

  	
  Section 1.03 Accounting Principles; Computations

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II REVOLVING CREDIT AND LETTER OF CREDIT
  FACILITY

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.01 Credit Commitments

  	
   

  	
  22

  
	
   

  	
  Section 2.02 Nature of Banks’ Obligations with
  Respect to Revolving Credit Loans

  	
   

  	
  23

  
	
   

  	
  Section 2.03 Facility Fee; Letter of Credit Fee

  	
   

  	
  23

  
	
   

  	
  Section 2.04 Utilization Fee

  	
   

  	
  24

  
	
   

  	
  Section 2.05 Revolving Credit Loan Requests

  	
   

  	
  24

  
	
   

  	
  Section 2.06 Making Revolving Credit Loans

  	
   

  	
  24

  
	
   

  	
  Section 2.07 Use of Proceeds

  	
   

  	
  25

  
	
   

  	
  Section 2.08 Bid Loan Facility

  	
   

  	
  25

  
	
   

  	
  Section 2.09 Restriction on Loans and Letters of
  Credit

  	
   

  	
  28

  
	
   

  	
  Section 2.10 Letters of Credit

  	
   

  	
  28

  
	
   

  	
  Section 2.11 Conditions to the Issuance of all
  Letters of Credit

  	
   

  	
  30

  
	
   

  	
  Section 2.12 Letter of Credit Requests

  	
   

  	
  31

  
	
   

  	
  Section 2.13 Agreement to Repay Letter of Credit
  Drawings

  	
   

  	
  32

  
	
   

  	
  Section 2.14 Letter of Credit Expiration Extensions

  	
   

  	
  32

  
	
   

  	
  Section 2.15 Changes to Stated Amount

  	
   

  	
  33

  
	
   

  	
  Section 2.16 Incremental Commitments

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III INTEREST RATES

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 3.01 Interest Rate Options

  	
   

  	
  34

  
	
   

  	
  Section 3.02 Revolving Credit Loans Interest Periods

  	
   

  	
  35

  
	
   

  	
  Section 3.03 Interest After Default

  	
   

  	
  36

  
	
   

  	
  Section 3.04 LIBOR Unascertainable; Illegality;
  Increased Costs; Deposits Not Available

  	
   

  	
  36

  
	
   

  	
  Section 3.05 Selection of Interest Rate Options

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV PAYMENTS

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.01 Payments

  	
   

  	
  38

  
	
   

  	
  Section 4.02 Pro Rata Treatment of Banks

  	
   

  	
  38

  
	
   

  	
  Section 4.03 Interest Payment Dates

  	
   

  	
  38

  
	
   

  	
  Section 4.04 Voluntary Prepayments

  	
   

  	
  39

  
	
   

  	
  Section 4.05 Reduction or Termination of Commitments

  	
   

  	
  40

  
	
   

  	
  Section 4.06 Additional Compensation in Certain
  Circumstances

  	
   

  	
  41

  
	
   

  	
  Section 4.07 Taxes

  	
   

  	
  42

  
	
   

  	
  Section 4.08 Judgment Currency

  	
   

  	
  43

  

 

 i
 

 

	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  

  	
  Section 4.09 Notes, Maturity

  	
   

  	
  44

  
	
   

  	
  Section 4.10 Mandatory Prepayments

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V REPRESENTATIONS AND WARRANTIES

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.01 Representations and Warranties

  	
   

  	
  45

  
	
   

  	
  Section 5.02 Continuation of Representations

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI CONDITIONS OF LENDING

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.01 Closing Date

  	
   

  	
  51

  
	
   

  	
  Section 6.02 Each Credit Event

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII COVENANTS

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.01 Affirmative Covenants

  	
   

  	
  53

  
	
   

  	
  Section 7.02 Negative Covenants

  	
   

  	
  56

  
	
   

  	
  Section 7.03 Reporting Requirements

  	
   

  	
  61

  
	
   

  	
  Section 7.04 Bermuda Law Event

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII DEFAULT

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.01 Events of Default

  	
   

  	
  64

  
	
   

  	
  Section 8.02 Consequences of Event of Default

  	
   

  	
  67

  
	
   

  	
  Section 8.03 Right of Competitive Bid Loan Banks

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX THE AGENT

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 9.01 Appointment

  	
   

  	
  69

  
	
   

  	
  Section 9.02 Delegation of Duties

  	
   

  	
  69

  
	
   

  	
  Section 9.03 Nature of Duties; Independent Credit
  Investigation

  	
   

  	
  69

  
	
   

  	
  Section 9.04 Actions in Discretion of Agent;
  Instructions From the Banks

  	
   

  	
  70

  
	
   

  	
  Section 9.05 Reimbursement and Indemnification of
  Agent by the Borrowers

  	
   

  	
  70

  
	
   

  	
  Section 9.06 Exculpatory Provisions; Limitation of
  Liability

  	
   

  	
  71

  
	
   

  	
  Section 9.07 Reimbursement and Indemnification of
  Agent and Issuing Banks by Banks

  	
   

  	
  71

  
	
   

  	
  Section 9.08 Reliance by Agent and Issuing Banks

  	
   

  	
  72

  
	
   

  	
  Section 9.09 Notice of Default

  	
   

  	
  72

  
	
   

  	
  Section 9.10 Notices

  	
   

  	
  72

  
	
   

  	
  Section 9.11 Banks in Their Individual Capacities;
  Agents in Its Individual Capacity

  	
   

  	
  72

  
	
   

  	
  Section 9.12 Holders of Notes

  	
   

  	
  73

  
	
   

  	
  Section 9.13 Equalization of Banks

  	
   

  	
  73

  
	
   

  	
  Section 9.14 Successor Agent

  	
   

  	
  73

  
	
   

  	
  Section 9.15 Agent’s Fee

  	
   

  	
  74

  
	
   

  	
  Section 9.16 Availability of Funds

  	
   

  	
  74

  
	
   

  	
  Section 9.17 Calculations

  	
   

  	
  74

  
	
   

  	
  Section 9.18 Beneficiaries

  	
   

  	
  74

  

 

 ii
 

 

	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE X MISCELLANEOUS

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 10.01 Modifications, Amendments, or Waivers

  	
   

  	
  74

  
	
   

  	
  Section 10.02 No Implied Waivers; Cumulative
  Remedies; Writing Required

  	
   

  	
  75

  
	
   

  	
  Section 10.03 Reimbursement and Indemnification of
  Banks by the Borrowers; Taxes

  	
   

  	
  76

  
	
   

  	
  Section 10.04 Holidays

  	
   

  	
  76

  
	
   

  	
  Section 10.05 Funding by Branch, Subsidiary, or
  Affiliate

  	
   

  	
  77

  
	
   

  	
  Section 10.06 Notices

  	
   

  	
  77

  
	
   

  	
  Section 10.07 Severability

  	
   

  	
  78

  
	
   

  	
  Section 10.08 Governing Law

  	
   

  	
  78

  
	
   

  	
  Section 10.09 Prior Understanding

  	
   

  	
  78

  
	
   

  	
  Section 10.10 Duration; Survival

  	
   

  	
  78

  
	
   

  	
  Section 10.11 Successors and Assigns

  	
   

  	
  79

  
	
   

  	
  Section 10.12 Confidentiality

  	
   

  	
  80

  
	
   

  	
  Section 10.13 Counterparts

  	
   

  	
  81

  
	
   

  	
  Section 10.14 Agent’s or Bank’s Consent

  	
   

  	
  81

  
	
   

  	
  Section 10.15 Exceptions

  	
   

  	
  81

  
	
   

  	
  Section 10.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL

  	
   

  	
  81

  
	
   

  	
  Section 10.17 Tax Withholding Clause

  	
   

  	
  82

  
	
   

  	
  Section 10.18 Joinder of Guarantors

  	
   

  	
  82

  
	
   

  	
  Section 10.19 Limited Recourse

  	
   

  	
  83

  
	
   

  	
  Section 10.20 Change of Lending Office

  	
   

  	
  83

  
	
   

  	
  Section 10.21 USA Patriot Act

  	
   

  	
  83

  

 

LIST OF SCHEDULES
AND EXHIBITS

SCHEDULES

	
  SCHEDULE 1.01(A)

  	
   

  	
  -

  	
   

  	
  PRICING GRID

  
	
  SCHEDULE 1.01(B)

  	
   

  	
  -

  	
   

  	
  COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES

  
	
  SCHEDULE 1.01(M)

  	
   

  	
  -

  	
   

  	
  MATERIAL SUBSIDIARIES

  
	
  SCHEDULE 1.01(P)

  	
   

  	
  -

  	
   

  	
  EXISTING LIENS

  
	
  SCHEDULE 2.10(a)

  	
   

  	
  -

  	
   

  	
  EXISTING LETTERS OF CREDIT

  
	
  SCHEDULE 5.01(b)

  	
   

  	
  -

  	
   

  	
  SUBSIDIARIES

  
	
  SCHEDULE 5.01(h)

  	
   

  	
  -

  	
   

  	
  REINSURANCE COVERAGE

  
	
  SCHEDULE 7.02(a)

  	
   

  	
  -

  	
   

  	
  EXISTING INDEBTEDNESS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT 1.01(A)

  	
   

  	
  -

  	
   

  	
  ASSIGNMENT AND ASSUMPTION AGREEMENT

  
	
  EXHIBIT 1.01(B)

  	
   

  	
  -

  	
   

  	
  BID NOTE

  
	
  EXHIBIT 1.01(G)(1)

  	
   

  	
  -

  	
   

  	
  GUARANTOR JOINDER

  

 

 iii
 

 

	
  EXHIBIT 1.01(G)(2)-1

  	
   

  	
  -

  	
   

  	
  GUARANTY AGREEMENT OF MATERIAL NON-AGC SUBSIDIARIES

  
	
  EXHIBIT 1.01(G)(2)-2

  	
   

  	
  -

  	
   

  	
  GUARANTY AGREEMENT OF ASSURED GUARANTY CORP.

  
	
  EXHIBIT 1.01(G)(2)-3

  	
   

  	
  -

  	
   

  	
  GUARANTY AGREEMENT OF ASSURED GUARANTY LTD.

  
	
  EXHIBIT 1.01(R)

  	
   

  	
  -

  	
   

  	
  REVOLVING CREDIT NOTE

  
	
  EXHIBIT 2.05

  	
   

  	
  -

  	
   

  	
  REVOLVING CREDIT LOAN REQUEST

  
	
  EXHIBIT 2.08(a)

  	
   

  	
  -

  	
   

  	
  BID LOAN REQUEST

  
	
  EXHIBIT 2.12

  	
   

  	
  -

  	
   

  	
  LETTER OF CREDIT REQUEST

  
	
  EXHIBIT 2.16

  	
   

  	
  -

  	
   

  	
  INCREMENTAL COMMITMENT AGREEMENT

  
	
  EXHIBIT 6.01(d)

  	
   

  	
  -

  	
   

  	
  OPINION(S) OF COUNSEL

  
	
  EXHIBIT 7.03(c)

  	
   

  	
  -

  	
   

  	
  QUARTERLY COMPLIANCE CERTIFICATE

  

 

 iv

CREDIT
AGREEMENT

THIS CREDIT AGREEMENT is
dated as of November 6, 2006, and is made by and among ASSURED GUARANTY LTD., a
company organized under the laws of Bermuda, ASSURED GUARANTY CORP., a Maryland
corporation, ASSURED GUARANTY (UK) LTD., a company organized under the laws of
England and Wales, ASSURED GUARANTY RE LTD., a company organized under the laws
of Bermuda, ASSURED GUARANTY RE OVERSEAS LTD., a company organized under the
laws of Bermuda, the BANKS (as hereinafter defined), and ABN AMRO BANK N.V., in
its capacity as administrative agent for the Banks under this Agreement and
sole bookrunner.

W
I  T  N  E  S  S  E  T  H
:

WHEREAS, the Borrowers have requested the Banks to
provide a five-year revolving credit facility, including the issuance of
letters of credit, to the Borrowers in an aggregate principal amount not to
exceed the Commitments of the Banks; and

WHEREAS, the Commitments may be increased from time
to time as provided herein;

WHEREAS, such revolving credit facility shall be
used for the general corporate purposes of the Borrowers; and

WHEREAS, the Banks are willing to provide such
credit upon the terms and conditions hereinafter set forth;

NOW, THEREFORE, the parties
hereto, in consideration of their mutual covenants and agreements hereinafter
set forth, hereby covenant and agree as follows:

ARTICLE I

CERTAIN
DEFINITIONS

Section 1.01  Certain
Definitions.  In addition to words
and terms defined elsewhere in this Agreement, the following words and terms
shall have the following meanings, respectively, unless the context hereof
clearly requires otherwise:

ABN AMRO Bank or ABN AMRO shall
mean ABN AMRO Bank N.V., its successors and assigns.

ACE shall mean ACE Limited, a
Cayman Islands company.

Affiliate as to any Person shall mean
any other Person (i) which directly or indirectly controls, is controlled
by, or is under common control with, such Person, (ii) which beneficially
owns or holds 5% or more of any class of the voting or other equity interests
of such

 1
 

Person, or (iii) 5% or
more of any class of voting interests or other equity interests of which is
beneficially owned or held, directly or indirectly, by such Person.  Control, as used in this definition, shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, including the power
to elect a majority of the directors or trustees of a corporation or trust, as
the case may be.

Agent shall mean ABN AMRO Bank
N.V., and its successors and permitted assigns, in their respective capacities
as administrative agent for the Banks under this Agreement.

Agent’s Fee shall have the meaning
assigned to that term in Section 9.15.

Agent’s Letter shall have the meaning
assigned to that term in Section 9.15.

Aggregate Outstandings shall have the
meaning assigned to that term in Section 4.10(a).

Agreement shall mean this Credit
Agreement, as the same may be supplemented or amended from time to time,
including all schedules and exhibits.

AGRI shall mean Assured Guaranty
Re Ltd., a Bermuda company.

AGRO shall mean Assured Guaranty
Re Overseas Ltd., a Bermuda company.

Alternate Currency shall mean
each of Euros and Pounds Sterling.

Alternate Currency Loan shall mean any
Loan denominated in an Alternate Currency.

Applicable Facility Fee Rate shall mean the
percentage rate per annum corresponding to the indicated level of the Holdings
Debt Rating in the pricing grid on Schedule 1.01(A) below the
heading “Facility Fee.”  The Applicable
Facility Fee Rate shall be computed in accordance with the parameters set forth
on Schedule 1.01(A).

Applicable Margin shall mean, as
applicable:

(A)          in
the case of Base Rate Loans, 0%, or

(B)           in
the case of LIBOR Loans, the percentage spread to be added to LIBOR under the
Revolving Credit LIBOR Option corresponding to the indicated level of Holdings
Debt Rating in the pricing grid on Schedule 1.01(A) below the
heading “Applicable Margin for LIBOR Loans.”

The Applicable Margin shall be computed in
accordance with the parameters set forth on Schedule 1.01(A).

 2
 

 

Applicable Usage Premium shall mean the
percentage rate per annum corresponding to the indicated level of Holdings Debt
Rating in the pricing grid on Schedule 1.01(A) below the heading “Usage
Premium.”  The Applicable Usage Premium
shall be computed in accordance with the parameters set forth on Schedule 1.01(A).

Approved Currency shall mean
each of Dollars and each Alternate Currency.

Assignment and Assumption Agreement shall mean an
Assignment and Assumption Agreement by and among a Purchasing Bank, a
Transferor Bank and the Agent, as Agent and on behalf of the remaining Banks,
substantially in the form of Exhibit 1.01(A).

Associated Cost Rate
shall mean, with respect to any Interest Period for Pounds Sterling
denominated Loans, the amount (expressed as a percentage rate per annum,
rounded up to the nearest four decimal places, as determined by the Agent on
the first day of such Interest Period) required to compensate the Banks lending
from facility offices in the United Kingdom for the portion of the cost of each
such Bank of complying with the cash ratio and special deposit requirements of
the Bank of England and/or capital adequacy requirements and banking
supervision or other fees imposed by the United Kingdom Financial Services
Authority, which, in the reasonable determination of such Bank, is attributable
to the Loans made by such Bank from its facility office in the United Kingdom
and outstanding during such Interest Period.

Authorized Officer shall mean
those individuals, designated by written notice to the Agent from each
Borrower, authorized to execute notices, reports and other documents required
hereunder on behalf of such Borrower. 
Each Borrower may amend such list of individuals from time to time by
giving written notice of such amendment to the Agent.

Banks shall mean the financial
institutions named on Schedule 1.01(B) and their respective
successors and assigns as permitted hereunder, each of which is referred to
herein as a “Bank”.

Base Rate shall mean the greater of
(i) the interest rate per annum announced from time to time by the Agent
at its Principal Office as its then prime rate, which rate may not be the
lowest rate then being charged commercial borrowers by the Agent, or
(ii) the Federal Funds Effective Rate plus 0.5% per annum.

Base Rate Loan shall mean each Loan
designated or deemed designated as such by any Borrower at the time of
incurrence thereof or conversion thereto.

Base Rate Option shall mean the
option of the Borrowers to have Revolving Credit Loans bear interest at the
rate and under the terms and conditions set forth in Section 3.01(a)(i).

Benefit Arrangement shall mean at
any time an “employee benefit plan,” within the meaning of Section 3(3) of
ERISA, which is neither a Plan nor a Multiemployer Plan and which is
maintained, sponsored or otherwise contributed to by any member of the ERISA
Group.

Bermuda Law Event shall have the
meaning assigned to that term in Section 7.04.

 3
 

 

Bid shall have the meaning assigned
to such term in Section 2.08(b).

Bid Deadline shall have the meaning
assigned to such term in Section 2.08(b).

Bid Loan Borrowing Date shall mean,
with respect to any Bid Loan, the date for the making thereof, which date shall
be a Business Day.

Bid Loan Fixed Rate Option shall mean the
option of each Borrower to request that the Banks submit Bids to make Bid Loans
bearing interest at a fixed rate per annum quoted by such Banks as a numerical
percentage (and not as a spread over another rate such as the LIBOR).

Bid Loan Interest Period shall have the
meaning assigned to such term in Section 2.08(a).

Bid Loan LIBOR Rate Option shall mean the
option of each Borrower to request that the Banks submit Bids to make Bid Loans
bearing interest at a rate per annum quoted by such Banks at the LIBOR in
effect two Business Days before the Borrowing Date of such Bid Loan plus a
LIBOR Bid Loan Spread.

Bid Loan Request shall have the
meaning assigned to such term in Section 2.08(a).

Bid Loans shall mean collectively all
of the Bid Loans and Bid Loan shall mean separately any Bid Loan, made by any
of the Banks to either Borrower pursuant to Section 2.08.

Bid Notes shall mean collectively all
of the Bid Notes and Bid Note shall mean separately any Bid Note, of each Borrower
in the form of Exhibit 1.01(B) evidencing the Bid Loans made to
such Borrower together with all amendments, extensions, renewals, replacements,
refinancings or refunds thereof in whole or in part.

Borrower shall mean the Company, the
UK Borrower and, at all times after the conditions precedent set forth in
Section 6.02(b) have been satisfied, Holdings, AGRI and AGRO.

Borrowing Date shall mean, with respect to
any Loan, the date for the making thereof or the renewal or conversion thereof
at or to the same or a different Interest Rate Option, which date shall be a
Business Day.

Borrowing Tranche shall mean
specified portions of Loans outstanding as follows:  (i) any Loans to which a LIBOR Option or
a Bid Loan Fixed Rate Option applies which become subject to the same Interest
Rate Option under the same Loan Request by a Borrower and which have the same
Interest Period shall constitute one Borrowing Tranche, and (ii) all Loans
to which a Base Rate Option applies shall constitute one Borrowing Tranche.

Business Day shall mean any day other
than a Saturday or Sunday or a legal holiday on which commercial banks are
authorized or required to be closed for business in New York,
New York and, if the applicable Business Day (i) relates to any Loan to
which the

 4
 

LIBOR Option applies, such
day must also be a day on which dealings are carried on in the London interbank
market and, with respect to any payments due by Holdings, AGRI or AGRO, such
day must also be a day which is not a national or public holiday in Bermuda,
and (ii) any Letter of Credit Outstandings due from the UK Borrower, such day
must also be a day other than a legal holiday on which commercial banks are
authorized or required to be closed for business in London, England.

Cash Collateral Account shall have the
meaning assigned to such term in Section 4.10.

Closing Date shall mean the date on
which the conditions precedent set forth in Section 6.01 have been satisfied.

Commitment shall mean as to any Bank
its Revolving Credit Commitment, and Commitments shall mean the
aggregate of the Revolving Credit Commitments of all of the Banks.

Company shall mean Assured Guaranty
Corp., a Maryland corporation.

Company Consolidated Assets shall mean, at
any time, the assets of the Company and its Subsidiaries at such time,
determined on a consolidated basis in accordance with GAAP; provided
that the foregoing shall be calculated without giving effect to Financial
Accounting Standards Board Statements No. 115 and 133.

Compliance Certificate shall have the
meaning assigned to such term in Section 7.03(c).

Consideration shall mean a greater than
de minimis monetary return for the sale or provision of a service or product or
for the undertaking of an obligation or liability, except that with respect to
a Permitted Acquisition, Consideration shall mean the aggregate of (i) the
cash paid by any of the Company or any Material Subsidiary, as buyer, directly
or indirectly, to the seller in connection with such Permitted Acquisition,
(ii) the Indebtedness incurred or assumed by the Company or any of the
Material Subsidiaries, as buyer, with respect to such Permitted Acquisition,
whether in favor of the seller or otherwise and whether fixed or contingent,
(iii) any Guaranty given or incurred by the Company or any Material Subsidiary
in connection therewith, and (iv) any other consideration given or
obligation incurred by the Company or any of the Material Subsidiaries in
connection with such Permitted Acquisition.

Consolidated Debt shall mean, at
any time, an amount equal to the sum (without duplication) of the then
outstanding Indebtedness of Holdings or the Company, as the case may be, and of
each Subsidiary of Holdings or the Company, as the case may be, (excluding,
however, (i) the amount of all Insurance-Related Guaranties, (ii) the
amount of any Soft Capital, (iii) the obligations of Holdings with respect
to any preferred stock of Holdings, (iv) the obligations of any of Holdings or
its Subsidiaries under Guaranteed Investment Contracts, (v) the amount of any
preferred stock issued in connection with the Contingent Capital Facility and
(vi) the aggregate outstanding Indebtedness evidenced by all outstanding
Hybrid Securities to the extent (x) the accreted value of such Indebtedness
does not exceed the HS Exclusion Amount

 5
 

and (y) S&P does not
include such Indebtedness under such Hybrid Securities as financial leverage),
determined and consolidated in accordance with GAAP.

Consolidated Net Income shall mean,
for any period, the net income for such period for Holdings and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP.

Consolidated Net Worth shall mean, at
any time, the net worth of Holdings and its Subsidiaries at such time,
determined on a consolidated basis in accordance with GAAP; provided
that, the nominal value of any securities issued in respect of any Hybrid
Securities shall constitute stockholders equity to the extent (x) the accreted
value of such securities does not exceed the HS Exclusion Amount and (y)
S&P does not include such securities as financial leverage.

Contingent Capital Facility shall mean,
collectively (i) the put agreement between the Company and Woodbourne Capital
Trust I, Woodbourne Capital Trust II, Woodbourne Capital Trust III and
Woodbourne Capital Trust IV pursuant to which the Company has the right to
cause each of such trusts to purchase up to $50 million of preferred stock of
the Company and (ii) similar put agreements between the Company or such other
Subsidiary and a trust, pursuant to which the Company or such Subsidiary has
the right to cause such trusts to purchase, in an aggregate amount for all such
trusts, up to $200 million of preferred stock of the Company or such
Subsidiary.

Credit Derivative Guaranties shall have the
meaning assigned to such term in Section 7.02(c).

Credit Event shall mean the incurrence
of each Loan and the issuance of each Letter of Credit.

Dollar, Dollars, U.S.
Dollars and the symbol $ shall mean lawful money of the United
States of America.

Dollar Equivalent shall mean, at
any time for the determination thereof, the amount of Dollars which could be
purchased with the amount of the relevant Alternate Currency involved in such
computation at the spot exchange rate therefor as quoted by the Administrative
Agent as of 11:00 A.M., London time, on the date two Business Days prior to the
date of any determination thereof for purchase on such date.

Eligible Transferee shall have the
meaning assigned to such term in Section 2.16(a).

ERISA shall mean the Employee
Retirement Income Security Act of 1974, as the same may be amended or
supplemented from time to time, and any successor statute of similar import,
and the rules and regulations thereunder, as from time to time in effect.

ERISA Group shall mean, at any time,
Holdings and all members of a controlled group of corporations and all trades
or businesses (whether or not incorporated) under common

 6
 

control and all other
entities which, together with Holdings, are treated as a single employer under
Section 414 of the Internal Revenue Code.

Euro shall mean the single
currency of participating member states of the European Union.

Eurodollar Rate shall mean,
with respect to the Loans comprising any Borrowing Tranche denominated in
Dollars to which the LIBOR Option applies for any Interest Period, an interest
rate per annum determined on the basis of the rate for deposits in Dollars for
a period comparable to such Interest Period commencing on the first day of such
Interest Period appearing on Page 3750 of the Telerate screen as of 11:00 A.M.,
London time, two Business Days prior to the beginning of such Interest
Period.  In the event that such rate does
not appear on Page 3750 of the Telerate screen (or otherwise on such screen),
the Eurodollar Rate shall be determined by reference to such other publicly
available service for displaying eurodollar rates as may be agreed upon by the
Agent and the Borrowers or, in the absence of such agreement, the Eurodollar
Rate shall be the rate of interest per annum determined by the Agent in
accordance with its usual procedures (which determination shall be conclusive
absent manifest error) equal to the rate per annum at which Dollar deposits
approximately equal in principal amount to such Borrowing Tranche for a period
and with a maturity comparable to such Interest Period are offered to the
principal London office of Agent in immediately available funds in the London
interbank market at approximately 11:00 A.M., London time, two Business Days
prior to the commencement of such Interest Period.  The Agent shall give prompt notice to the
Borrowers of the Eurodollar Rate as determined or adjusted in accordance
herewith, which determination shall be conclusive absent manifest error.

Eurodollar Reserve Percentage shall mean as
of any day and with respect to any Bank or the Agent, the maximum percentage in
effect on such day for such Bank or the Agent, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
reserve requirements as it affects such Bank or the Agent (including supplemental,
marginal and emergency reserve requirements) with respect to eurocurrency
funding (currently referred to as “Eurocurrency Liabilities”).

Euro-LIBOR shall mean, with respect to
the Loans comprising any Borrowing Tranche denominated in Euros to which the
LIBOR Option applies for any Interest Period, an interest rate per annum
determined on the basis of the rate for deposits in Euros for a period
comparable to such Interest Period commencing on the first day of such Interest
Period appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London
time, two Business Days prior to the beginning of such Interest Period.  In the event that such rate does not appear
on Page 3750 of the Telerate screen (or otherwise on such screen), Euro LIBOR
shall be determined by reference to such other publicly available service for
displaying Euro-denominated rates as may be agreed upon by the Agent and
the Borrowers or, in the absence of such agreement, the Euro LIBOR shall be the
rate of interest per annum determined by the Agent in accordance with its usual
procedures (which determination shall be conclusive absent manifest error)
equal to the rate per annum at which Euro deposits approximately equal in
principal amount to such Borrowing Tranche for a period and with a maturity
comparable to such Interest Period are offered to the principal London office
of Agent in immediately available funds in the London interbank market at
approximately 11:00 A.M., London time, two Business

 7
 

Days prior to the
commencement of such Interest Period. 
The Agent shall give prompt notice to the Borrowers of the Euro LIBOR as
determined or adjusted in accordance herewith, which determination shall be
conclusive absent manifest error.

Event of Default shall mean any
of the events described in Section 8.01 and referred to therein as an “Event of
Default.”

Existing Credit Agreement shall mean the
Credit Agreement, dated as of April 15, 2005, among Holdings, the Company, the
UK Borrower, AGRI, AGRO, the banks party thereto and ABN AMRO Bank N.V., as
administrative agent.

Existing Letters of Credit shall have the
meaning assigned to such term in Section 2.10(a).

Existing Reinsurance Coverage shall have the
meaning assigned to such term in Section 5.01(h)(C).

Expiration Date shall mean the
fifth anniversary of the Closing Date.

Facility Fee shall have the meaning
assigned to such term in Section 2.03(a).

Facility Usage shall mean at any time the
sum of the principal amount of the Revolving Credit Loans outstanding and the
Letter of Credit Outstandings and, solely for purposes of Section 2.04, the
principal amount of the Bid Loans outstanding.

Federal Funds Effective Rate for any day
shall mean the rate per annum (based on a year of 360 days and actual days
elapsed and rounded upward to the nearest 1/100 of 1%) announced by the Federal
Reserve Bank of New York (or any successor) on such day as being the
weighted average of the rates on overnight federal funds transactions arranged
by federal funds brokers on the previous trading day, as computed and announced
by such Federal Reserve Bank (or any successor) in substantially the same
manner as such Federal Reserve Bank computes and announces the weighted average
it refers to as the “Federal Funds Effective Rate” as of the date of this
Agreement; provided, if such Federal Reserve Bank (or its successor)
does not announce such rate on any day, the “Federal Funds Effective Rate” for
such day shall be the Federal Funds Effective Rate for the last day on which
such rate was announced.

Fixed Rate shall mean a fixed interest
rate quoted by a Bank in its Bid to apply to such Bank’s Bid Loan over the term
of such Bid Loan if such Bank’s Bid is accepted.

Fixed Rate Bid Loan shall mean a
Bid Loan that bears interest under the Bid Loan Fixed Rate Option.

Fronting Fee shall have the meaning
assigned to such term in Section 2.03(c).

GAAP shall mean generally
accepted accounting principles as in effect from time to time in the United
States, subject to the provisions of Section 1.03, applied on a consistent
basis both as to classification of items and amounts.

 8
 

 

Guaranteed Investment Contract shall mean,
with respect to any Person, a guaranteed investment contract, funding agreement
or similar agreement issued or entered into by such Person wherein such Person
guarantees a rate of return on invested capital over the term of such contract
or agreement.

Guarantor shall mean Holdings, the
Company and each Material Subsidiary which hereafter becomes a Guarantor after
the date hereof pursuant to Section 10.18.

Guarantor Joinder shall mean a
joinder by a Person as a Guarantor under this Agreement, the Guaranty Agreement
and the other Loan Documents in the form of Exhibit 1.01(G)(1).

Guaranty of any Person shall mean
any obligation of such Person guarantying or in effect guarantying any
liability or obligation of any other Person in any manner, whether directly or
indirectly, including any agreement to indemnify or hold harmless any other
Person (other than as an incidental part of another transaction), any
performance bond or other suretyship arrangement and any other form of
assurance against loss, except endorsement of negotiable or other instruments
for deposit or collection in the ordinary course of business.

Guaranty Agreement shall mean one
or more Guaranty Agreements in substantially the form of Exhibit 1.01(G)(2)-1,
Exhibit 1.01(G)(2)-2 or Exhibit 1.01(G)(2)-3, or otherwise
entered into pursuant to Section 7.01(l), and in each case executed and
delivered by a Guarantor to the Agent for the benefit of the Banks.

Historical Statements shall have the
meaning assigned to that term in Section 5.01(h)(A).

Holdings shall mean Assured Guaranty
Ltd., a company organized under the laws of Bermuda.

Holdings Debt Rating shall mean the
senior unsecured debt rating of Holdings as determined by either of Standard
& Poor’s or Moody’s.

Holdings Sub-Limit shall mean an
amount equal to $100,000,000; provided that at any time when all
Commitments hereunder have been terminated, the Holdings Sub-Limit shall mean
an amount equal to zero.

HS Exclusion Amount shall mean, on
the date of determination, an amount equal to 15% of Total Capitalization.

Hybrid Securities shall mean an
offering of junior subordinated debentures or other subordinated securities of
Holdings either directly or through a Subsidiary that is a special purpose
vehicle created in connection with such offering.

Incremental Bank shall have the
meaning assigned to that term in Section 2.16(b).

Incremental Commitment shall mean,
for any Bank, any commitment by such Bank pursuant to Section 2.16, as agreed
to by such Bank in the respective Incremental

 9
 

Commitment Agreement; it
being understood, however, that on each date upon which an Incremental
Commitment of any Bank becomes effective, such Incremental Commitment of such
Bank shall be added to (and thereafter become a part of) the Revolving Credit
Commitment of such Bank for all purposes of this Agreement as contemplated by
Section 2.16.

Incremental Commitment Agreement shall mean an
agreement in the form of Exhibit 2.16 executed in accordance with
Section 2.16.

Incremental Commitment Date shall have the
meaning provided in Section 2.16(b).

Incremental Commitment Request Requirements shall mean,
with respect to any request for an Incremental Commitment made pursuant to
Section 2.16, the satisfaction of each of the following conditions on the date
of such request:  (i) no Potential
Default or Event of Default then exists or would result therefrom and (ii) all
of the representations and warranties contained herein and in the other Loan
Documents are true and correct in all material respects at such time (unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date).

Incremental Loan Commitment Requirements shall mean,
with respect to any provision of an Incremental Commitment on a given
Incremental Loan Commitment Date (as defined in Section 2.16(b)), the
satisfaction of each of the following conditions on or prior to the effective
date of the respective Incremental Loan Commitment Agreement:  (i) no Potential Default or Event of Default
then exists or would result therefrom, (ii) all of the representations and
warranties contained herein and in the other Loan Documents are true and
correct in all material respects at such time (unless stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date), (iii)
the delivery by each of the Borrowers to the Agent of an officer’s certificate
executed by an Authorized Officer of such Borrower and certifying as to
compliance with preceding clauses (i) and (ii), (iv) the delivery by the
Borrowers to the Agent of an opinion, in form and substance reasonably
satisfactory to the Agent, from counsel to the Borrowers and dated such date,
covering such of the matters set forth in the opinions of counsel delivered to
the Agent on the Closing Date pursuant to Section 6.01(d) as may be reasonably
requested by the Agent, and such other matters incident to the transactions
contemplated thereby as the Agent may reasonably request, (v) the delivery by
the Borrowers to the Agent of such other officers’ certificates and evidence of
good standing as the Agent shall reasonably request and (vi) the completion by
the Borrowers of such other actions as the Agent may reasonably request in
connection with such Incremental Commitment.

Indebtedness shall mean, as to any
Person at any time, any and all indebtedness, obligations or liabilities
(whether matured or unmatured, liquidated or unliquidated, direct or indirect,
absolute or contingent, or joint or several) of such Person for or in respect
of:  (i) borrowed money, (ii) amounts
raised under or liabilities in respect of any note purchase or acceptance
credit facility, (iii) payment obligations (contingent or otherwise) under
any letter of credit, currency swap agreement, interest rate swap, cap, collar
or floor agreement or other interest rate management device, (iv) any
other transaction (including forward sale or purchase agreements, capitalized
leases and conditional sales agreements) having the commercial effect of

 10
 

a borrowing of money entered
into by such Person to finance its operations or capital requirements (but not
including trade payables and accrued expenses incurred in the ordinary course
of business which are not represented by a promissory note or other evidence of
indebtedness and which are not more than ninety (90) days past due), (v) any
Guaranteed Investment Contract, or (vi) any Guaranty of Indebtedness.

Insolvency Proceeding shall mean,
with respect to any Person, (a) a case, action or proceeding with respect
to such Person (i) before any court or any other Official Body under any
bankruptcy, insolvency, reorganization or other similar Law now or hereafter in
effect, or (ii) for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator, conservator (or similar official) of Holdings
or any Material Subsidiary, or otherwise relating to the liquidation,
dissolution, winding-up or relief of such Person, or (b) any general
assignment for the benefit of creditors, composition, marshaling of assets for
creditors, or other similar arrangement in respect of such Person’s creditors
generally or any substantial portion of its creditors, undertaken under any
Law.

Insurance-Related Guaranties shall have the
meaning assigned to that term in Section 7.02(c).

Insurer Financial Strength Rating shall mean the
insurer financial strength rating of
the Company as determined by either of Standard & Poor’s and Moody’s.

Interest Period shall mean
either a Revolving Credit Loan Interest Period or a Bid Loan Interest Period.

Interest Rate Hedge shall mean an
interest rate exchange, collar, cap, swap, adjustable strike cap, adjustable
strike corridor, or similar agreement entered into by Holdings or any Material
Subsidiary in order to provide protection to, or minimize the impact upon,
Holdings or any Material Subsidiary of increasing floating rates of interest
applicable to Indebtedness.

Interest Rate Option shall mean any
Revolving Credit LIBOR Option, Bid Loan LIBOR Option, Bid Loan Fixed Rate
Option, or Base Rate Option.

Internal Revenue Code shall mean the
Internal Revenue Code of 1986, as the same may be amended or supplemented from
time to time, and any successor statute of similar import, and the rules and
regulations thereunder, as from time to time in effect.

Issuing Bank shall mean (a) ABN AMRO
Bank N.V. and (b) PNC Bank, National Association.

Law shall mean any law
(including common law), constitution, statute, treaty, regulation, rule,
ordinance, opinion, release, ruling, order, injunction, writ, decree, bond,
judgment, authorization, or approval, lien or award of or settlement agreement
with any Official Body.

Letter of Credit shall have the
meaning assigned to such term in Section 2.10(a).

 11
 

 

Letter of Credit Fee shall have the
meaning assigned to such term in Section 2.03(b).

Letter of Credit Outstandings shall mean, at
any time, the sum of (i) the aggregate Stated Amount of all outstanding Letters
of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of
all Letters of Credit at such time.

Letter of Credit Request shall have the
meaning assigned to such term in Section 2.12(a).

LIBOR shall mean, with respect to
any Borrowing Tranche of Loans, the relevant interest rate, i.e.,
Eurodollar Rate, Euro LIBOR or Sterling LIBOR.

LIBOR Bid Loan shall mean any Bid Loan
that bears interest under the Bid Loan LIBOR Option.

LIBOR Bid Loan Spread shall mean the
spread quoted by a Bank in its Bid to apply to such Bank’s Bid Loan if such
Bank’s Bid is accepted.  The LIBOR Bid
Loan Spread shall be quoted as a percentage rate per annum and expressed in
multiples of 1/1000th of one percentage point to be either added to (if it is
positive) or subtracted from (if it is negative) the LIBOR in effect two (2)
Business Days before the Borrowing Date with respect to such Bid Loan.  Interest on LIBOR Bid Loans shall be computed
based on a year of 360 days for the actual days elapsed.

LIBOR Interest Period shall mean the
Interest Period applicable to a LIBOR Bid Loan or a Revolving Credit Loan that
is subject to the Revolving Credit LIBOR Option.

LIBOR Loan shall mean each Loan
designated or deemed designated as such by any Borrower at the time of
incurrence thereof or conversion thereto.

LIBOR Option shall mean either the
Revolving Credit LIBOR Option or the Bid Loan LIBOR-Rate Option.

Lien shall mean any mortgage,
deed of trust, pledge, lien, security interest, charge, or other encumbrance or
security arrangement of any nature whatsoever, whether voluntarily or
involuntarily given, including any conditional sale or title retention
arrangement, and any assignment, deposit arrangement, or lease intended as, or
having the effect of, security and any filed financing statement or other
notice of any of the foregoing (whether or not a lien or other encumbrance is
created or exists at the time of the filing).

Loan Documents shall mean this Agreement,
the Agent’s Letter, each Guaranty Agreement, and any other instruments,
certificates, or documents delivered or contemplated to be delivered hereunder
or thereunder or in connection herewith or therewith, as the same may be
supplemented or amended from time to time in accordance herewith or therewith,
and “Loan Document” shall mean any of the Loan Documents.

Loan Request shall mean either a Bid
Loan Request or a Revolving Credit Loan Request.

 12
 

 

Loans shall mean collectively all
Revolving Credit Loans and Bid Loans and Loan shall mean separately any
Revolving Credit Loan or Bid Loan.

Material Adverse Change shall mean any
set of circumstances or events which (a) has or could reasonably be
expected to have any material adverse effect whatsoever upon the validity or enforceability
of this Agreement or any other Loan Document, (b) is or could reasonably
be expected to be material and adverse to the business, properties, assets,
financial condition, results of operations or prospects of Holdings and its
Material Subsidiaries taken as a whole or the Company and its Material
Subsidiaries taken as a whole, (c) impairs materially or could reasonably
be expected to impair materially the ability of Holdings and the Material
Subsidiaries taken as a whole duly and punctually to pay or to perform their
respective obligations under the Loan Documents, or (d) impairs materially
or could reasonably be expected to impair materially the ability of the Agent
or any of the Banks, to the extent permitted, to enforce their legal remedies
pursuant to this Agreement or any other Loan Document.

Material Non-AGC Subsidiary shall mean any
Material Subsidiary of Holdings other than (a) Assured Guaranty US Holdings
Inc. and its Subsidiaries (including the Company and its Subsidiaries), (b) any
Material Subsidiary of Holdings which is regulated by a state insurance
regulatory authority in the U.S. and (c) Assured Guaranty Barbados Holdings
Ltd.

Material Subsidiary shall mean (i)
any Subsidiary of Holdings which has at any time, or which will have after
giving effect to any contemplated transaction, acquisition, loan or investment,
a net worth equal to or greater than an amount which is the greater of five
percent (5%) of the consolidated tangible net worth of Holdings and its
Subsidiaries or $25,000,000, (ii) any Subsidiary of Holdings as to which
Holdings requests in writing that it be a Material Subsidiary, and (iii) any
Subsidiary or Subsidiaries of Holdings which own(s) in the aggregate 30% or
more of any Material Subsidiary; and Material Subsidiaries shall mean all such
Subsidiaries.  Notwithstanding the
foregoing, each of the Company, AGRI, AGRO and the UK Borrower shall be
deemed to be a Material Subsidiary for all purposes of this Agreement and the
other Loan Documents; provided, however, that neither the Company
nor the UK Borrower shall be required to be a Guarantor (except for the
requirement that the Company guaranty all obligations of the UK Borrower).  As of the date hereof, “Material Subsidiary”
shall include, without limitation, the Subsidiaries listed on Schedule
1.01(M).

Month, with respect to an
Interest Period under the LIBOR Option, shall mean the interval between the
days in consecutive calendar months numerically corresponding to the first day
of such Interest Period.  If any LIBOR Interest
Period begins on a day of a calendar month for which there is no numerically
corresponding day in the month in which such Interest Period is to end, the
final month of such Interest Period shall be deemed to end on the last Business
Day of such final month.

Moody’s shall mean Moody’s
Investors Service, Inc. and its successors.

Multiemployer Plan shall mean any
employee benefit plan which is a “multiemployer plan” within the meaning of
Section 4001(a)(3) of ERISA and to which Holdings or any member of the
ERISA Group is then making or accruing an obligation to make

 13
 

contributions or, within the
preceding five Plan years, has made or had an obligation to make such
contributions.

Multiple Employer Plan shall mean a
Plan which has two or more contributing sponsors (including Holdings or any
member of the ERISA Group) at least two of whom are not under common control,
as such a plan is described in Sections 4063 and 4064 of ERISA.

Net Par shall mean the aggregate
maximum par amount of insurance and reinsurance coverage under all obligations
of insurance or reinsurance (or similar arrangements) provided by a Person less
the aggregate maximum par amount of reinsurance (or similar arrangements
including hedging arrangements) coverage in favor of such Person with respect
to its insurance or reinsurance obligations.

Notes shall mean the Revolving
Credit Notes and Bid Notes.

Notice of Non-Extension shall have the
meaning assigned to such term in Section 2.14.

Notices shall have the meaning
assigned to that term in Section 10.06.

Obligation shall mean any obligation
or liability of any Borrower, any Guarantor or any Material Subsidiary to the
Agent or any of the Banks, howsoever created, arising or evidenced, whether
direct or indirect, absolute or contingent, now or hereafter existing, or due
or to become due, under or in connection with this Agreement, any Notes,  the Agent’s Letter or any other Loan
Document.

Off-Balance Sheet Transactions shall have the
meaning assigned to that term in Section 7.03(e).

Offered Amount shall have the meaning
assigned to such term in Section 2.08(b).

Official Body shall mean any national,
federal, state, local, or other government or political subdivision or any
agency, authority, board, bureau, central bank, commission, department, or
instrumentality of either, or any court, tribunal, grand jury, or arbitrator,
in each case whether foreign or domestic.

Participant shall have the meaning
assigned to such term in Section 2.10(b).

PBGC shall mean the Pension
Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of
ERISA or any successor.

Permitted Acquisitions shall have the
meaning assigned to such term in Section 7.02(f).

Permitted Investments shall mean:

(i)            direct
obligations of the United States of America or the United Kingdom or any agency
or instrumentality thereof or obligations backed by the full faith and credit

 14
 

of the United States of
America or the United Kingdom maturing in twelve (12) months or less from the
date of acquisition;

(ii)           commercial
paper maturing in 180 days or less rated not lower than A-1, by Standard &
Poor’s or P-1 by Moody’s on the date of acquisition;

(iii)          demand
deposits, time deposits or certificates of deposit maturing within one year in
commercial banks whose obligations are rated A-1, A or the equivalent or better
by Standard & Poor’s on the date of acquisition;

(iv)          fixed
income securities with a weighted average credit quality of A by Standard &
Poor’s or A2 by Moody’s on the date of acquisition; and

(v)           investments
of the types specified in Sections 1402(b) and 1404(a)(1), (2), (3), (8), and
(10) of the New York Insurance Law.

Permitted
Liens shall mean:

(i)            Liens
for taxes, assessments, or similar charges, incurred in the ordinary course of
business and which are not yet due and payable;

(ii)           Liens
and pledges or deposits made in the ordinary course of business of Holdings or
any Material Subsidiary with respect to employee’s salaries and benefits, to
secure payment of workmen’s compensation, or to participate in any fund in connection
with workmen’s compensation, unemployment insurance, old-age pensions or other
social security programs with respect to such Person’s officers or employees;

(iii)          Liens
of mechanics, materialmen, warehousemen, carriers, or other like Liens, securing
obligations incurred in the ordinary course of business that are not yet due
and payable and Liens of landlords securing obligations to pay lease payments
that are not yet due and payable or in default;

(iv)          Good-faith
pledges or deposits made in the ordinary course of business of Holdings or any
Material Subsidiary to secure statutory or regulatory obligations of Holdings
or any Material Subsidiary;

(v)           Encumbrances
consisting of zoning restrictions, easements or other restrictions on the use
of real property, none of which materially impairs the use of such property or
the value thereof, and none of which is violated in any material respect by
existing or proposed structures or land use;

(vi)          Liens,
security interests and mortgages in favor of the Agent for the benefit of the
Banks securing the Obligations;

(vii)         Liens
on property leased by Holdings or any Material Subsidiary under capital and
operating leases;

 15
 

 

(viii)        Any
Lien described on Schedule 1.01(P), provided that the
principal amount secured thereby is not hereafter increased;

(ix)           Purchase
Money Security Interests;

(x)            Liens
on assets received by any Borrower from a third Person and held in trust by any
Borrower in respect of liabilities assumed by any Borrower in the course of the
reinsurance business of such Borrower;

(xi)           Liens
securing Credit Derivative Guaranties;

(xii)          To
the extent that they would constitute “Liens”, Insurance-Related Guaranties;
and

(xiii)         The
following, (A) if the validity or amount thereof is being contested in
good faith by appropriate and lawful proceedings diligently conducted so long
as levy and execution thereon have been stayed and continue to be stayed or
(B) if a final judgment is entered and such judgment is discharged within
thirty (30) days of entry, and they do not in the aggregate materially impair
the ability of any Borrower or any Material Subsidiary to perform its
Obligations hereunder or under the other Loan Documents:

(1)           Claims
or Liens for taxes, assessments or charges due and payable and subject to interest
or penalty, provided that the applicable Borrower or applicable Material
Subsidiary maintains such reserves or other appropriate provisions as shall be
required by GAAP and pays all such taxes, assessments or charges forthwith upon
the commencement of proceedings to foreclose any such Lien;

(2)           Claims,
Liens, or encumbrances upon, and defects of title to, real or personal
property, including any attachment of personal or real property or other legal
process prior to adjudication of a dispute on the merits;

(3)           Claims
or Liens of mechanics, materialmen, warehousemen, carriers, or other statutory
nonconsensual Liens; or

(4)           Liens
resulting from final judgments or orders described in Section 8.01(f).

Person shall mean any individual,
company, corporation, partnership, limited liability company, association,
joint-stock company, trust, unincorporated organization, joint venture,
government or political subdivision or agency thereof, or any other entity.

Plan shall mean at
any time an employee pension benefit plan (including a Multiple Employer Plan,
but not a Multiemployer Plan) which is covered by Title IV of ERISA or is
subject to the minimum funding standards under Section 412 of the Internal
Revenue Code and either (i) is maintained by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time
within the preceding five years been maintained by

 

 16

 

any entity which was at such
time a member of the ERISA Group for employees of any entity which was at such
time a member of the ERISA Group.

Potential Default shall mean any
event or condition which with notice, passage of time or a determination by the
Agent or the Required Banks, or any combination of the foregoing, would
constitute an Event of Default.

Pounds Sterling shall mean
freely transferable lawful money of the United Kingdom. 

Principal Amount shall mean (i)
the stated principal amount of each Loan denominated in Dollars, and/or (ii)
the Dollar Equivalent of the stated principal amount of each Alternate Currency
Loan, as the context may require.

Principal Office shall mean the
main banking office of the Agent in New York, New York.

Prohibited Transaction shall mean any
“prohibited transaction” as defined in Section 4975 of the Internal
Revenue Code or Section 406 of ERISA for which neither an individual nor a
class exemption has been issued by the United States Department of Labor.

Property shall mean all real
property, both owned and leased, of Holdings or any Material Subsidiary.

Purchase Money Security Interest shall mean
Liens upon tangible personal property securing loans to the Company or any
Material Subsidiary, or deferred payments by such Person, in either case for
the purchase of such tangible personal property.

Purchasing Bank shall mean a
Bank which becomes a party to this Agreement by executing an Assignment and
Assumption Agreement.

Ratable Share shall mean the proportion
that a Bank’s Commitment bears to the Commitments (or, if the Commitments have
terminated, the proportion that a Bank’s Commitment immediately prior to such
termination bears to the Commitments immediately prior to such termination).

Regulation U shall mean any of Regulations
T, U, or X as promulgated by the Board of Governors of the Federal Reserve
System, as amended from time to time.

Reportable Event shall mean a
reportable event described in Section 4043 of ERISA and regulations
thereunder with respect to a Plan or Multiemployer Plan.

Requested Amount shall have the
meaning assigned to such term in Section 2.08(a).

 17
 

 

Required
Banks shall mean 

(A)          if
there are no Loans, Required Banks shall mean Banks whose Commitments aggregate
greater than 50% of the Commitments of all of the Banks, or 

(B)           if there are Loans, Required Banks
shall mean:

(i)            prior
to a termination of the Commitments hereunder pursuant to Section 8.02(a) or
Section 8.02(b), any Bank or group of Banks if the sum of (x) the
Principal Amount of the Revolving Credit Loans of such Banks then outstanding
plus (y) such Banks’ participating interests in the Letter of Credit
Outstandings at such time aggregates greater than 50% of the sum of (x) the
total Principal Amount of all of the Revolving Credit Loans then outstanding
plus (y) all Letter of Credit Outstandings at such time; and

(ii)           after
a termination of the Commitments hereunder pursuant to Section 8.02(a) or
Section 8.02(b), any Bank or group of Banks if the sum of (x) the
Principal Amount of the Loans of such Banks then outstanding plus (y) such
Banks’ participating interests in the Letter of Credit Outstandings at such
time aggregates greater than 50% of the sum of (x) the total principal amount
of all of the Loans then outstanding plus (y) all Letter of Credit Outstandings
at such time.

Revolving Credit Commitment shall mean, as
to any Bank at any time, the amount initially set forth opposite its name on Schedule 1.01(B)
in the column labeled “Amount of Commitment for Revolving Credit Loans,” and
thereafter on Schedule I to the most recent Assignment and Assumption
Agreement, as the same may be increased pursuant to Section 2.16 and/or reduced
pursuant to Section 4.05, and Revolving Credit Commitments shall mean the
aggregate Revolving Credit Commitments of all of the Banks.

Revolving Credit LIBOR Option shall mean the
option of the Borrowers to have Revolving Credit Loans bear interest at the
rate and under the terms and conditions set forth in Section 3.01(a)(ii).

Revolving Credit Loan Interest Period shall mean the
period of time selected by a Borrower in connection with (and to apply to) any
election permitted hereunder by such Borrower to have Revolving Credit Loans
bear interest under the LIBOR Option. 
Subject to the last sentence of this definition, such period shall be
one, two, three or six Months or, subject to availability to each Bank, nine or
twelve Months.  Such Interest Period
shall commence on the effective date of borrowing of any Loan bearing interest
at a rate determined with reference to the LIBOR Option, which shall be (i) the
Borrowing Date if the respective Borrower is requesting new Loans, or (ii) the
date of renewal of or conversion to the LIBOR Option if the respective Borrower
is renewing or converting to the LIBOR Option applicable to outstanding
Loans.  Notwithstanding the second
sentence hereof:  (A) any Interest Period
which would otherwise end on a date which is not a Business Day shall be
extended to the next succeeding Business Day unless such Business Day falls in
the next calendar month, in which case such Interest Period shall end on the
directly preceding Business Day, and (B) such Borrower shall not

 18
 

select, convert to or renew
an Interest Period for any portion of the Loans that would end after the
Expiration Date.

Revolving Credit Loan Request shall mean a
request for a Revolving Credit Loan or a request to select, convert to or renew
a Base Rate Option or LIBOR Option with respect to an outstanding Revolving
Credit Loan in accordance with Section 2.05, Section 3.01 and Section 3.02.

Revolving Credit Loans shall mean
collectively all Revolving Credit Loans made by the Banks to the Borrowers and
Revolving Credit Loan shall mean separately any Revolving Credit Loan, made by
one of the Banks to a Borrower, pursuant to Section 2.01.  A Bid Loan is not a Revolving Credit Loan,
except that it will be treated as a Revolving Credit Loan following a
termination of the Commitments hereunder pursuant to Section 8.02(a) or Section
8.02(b) as provided in Section 8.03.

Revolving Credit Note shall mean any
Revolving Credit Note of a Borrower in the form of Exhibit 1.01(R)
issued by such Borrower to a Bank evidencing the Revolving Credit Loans of such
Bank to such Borrower, together with all amendments, extensions, renewals,
replacements, refinancings or refundings thereof in whole or in part.

SEC shall mean the Securities
and Exchange Commission or any governmental agencies substituted therefor.

Soft Capital shall have the meaning
assigned to that term in Section 7.02(a).

Standard & Poor’s shall mean
Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and its successors.

Stated Amount shall mean, at any time,
(i) the maximum amount available to be drawn under any Letter of Credit
denominated in Dollars (regardless of whether any conditions for drawing could
then be met) and (ii) the Dollar Equivalent of the maximum amount available to
be drawn under any Letter of Credit denominated in an Alternate Currency
(regardless of whether any conditions for drawing could then be met).

Statutory Capital shall mean the
aggregate of policyholders’ surplus of the Company and the contingency reserve
of the Company, each determined in a manner consistent with that used in
preparing the Historical Statements referred to in Section 5.01(h)(A)
[Historical Statements].

Sterling LIBOR shall mean, with respect to
the Loans comprising any Borrowing Tranche denominated in Pounds Sterling to
which the LIBOR Option applies for any Interest Period, (A) an interest rate
per annum determined on the basis of the rate for deposits in Pounds Sterling
for a period comparable to such Interest Period commencing on the first day of
such Interest Period appearing on Page 3750 of the Telerate screen as of 11:00
A.M., London time, two Business Days prior to the beginning of such Interest
Period plus (B) the Associated Cost Rate for such Loans for such Interest
Period.  In the event that such rate does
not appear on Page 3750 of the Telerate screen (or otherwise on such screen),
Sterling LIBOR shall be determined by reference to such other publicly
available service for displaying Pounds Sterling-denominated

 19
 

rates as may be agreed upon
by the Agent and the Borrowers or, in the absence of such agreement, Sterling
LIBOR shall be the rate of interest per annum determined by the Agent in
accordance with its usual procedures (which determination shall be conclusive
absent manifest error) equal to the rate per annum at which Pounds Sterling
deposits approximately equal in principal amount to such Borrowing Tranche for
a period and with a maturity comparable to such Interest Period are offered to
the principal London office of Agent in immediately available funds in the
London interbank market at approximately 11:00 A.M., London time, two Business
Days prior to the commencement of such Interest Period.  The Agent shall give prompt notice to the
Borrowers of the Sterling LIBOR as determined or adjusted in accordance
herewith, which determination shall be conclusive absent manifest error.

Subsidiary of any Person at any time
shall mean (i) any corporation, company or trust of which 50% or more (by
number of shares or number of votes) of the outstanding capital stock or shares
of beneficial interest normally entitled to vote for the election of one or
more directors or trustees (regardless of any contingency which does or may
suspend or dilute the voting rights) is at such time owned directly or
indirectly by such Person or one or more of such Person’s Subsidiaries,
(ii) any partnership of which such Person is a general partner or of which
50% or more of the partnership interests is at the time directly or indirectly
owned by such Person or one or more of such Person’s Subsidiaries,
(iii) any limited liability company of which such Person is a member or of
which 50% or more of the limited liability company interests is at the time
directly or indirectly owned by such Person or one or more of such Person’s
Subsidiaries or (iv) any corporation, trust, partnership, limited
liability company or other entity which is controlled or capable of being
controlled by such Person or one or more of such Person’s Subsidiaries.  Notwithstanding the foregoing, the Company,
AGRI, AGRO and the UK Borrower shall be deemed to be a “Subsidiary” of
Holdings and, with respect to the UK Borrower, of the Company, for all
purposes in this Agreement and the other Loan Documents; provided, however,
that neither the Company nor the UK Borrower shall be required to be a
Guarantor (except for the requirement that the Company guaranty all obligations
of the UK Borrower).

Test Period shall mean each period of
four consecutive fiscal quarters of Holdings (taken as one accounting period)
ending after the date hereof.

Total Capitalization shall mean, at
any time, an amount (without duplication) equal to (i) the then outstanding
Consolidated Debt of Holdings and its Subsidiaries, plus (ii) Consolidated Net
Worth of Holdings and its Subsidiaries.

Transferor Bank shall mean the
selling Bank pursuant to an Assignment and Assumption Agreement.

UK Borrower shall mean Assured Guaranty
(UK) Ltd., a company organized under the laws of England and Wales.

Unpaid Drawing has the meaning provided in
Section 2.13(a).

 20
 

 

US Holdco shall mean Assured Guaranty
US Holdings Inc., a Delaware corporation which is a direct wholly-owned
Subsidiary of Holdings and which owns, inter  alia, 100% of the
capital stock of the Company. 

Section 1.02  Construction.  Unless the context of this Agreement
otherwise clearly requires, the following rules of construction shall apply to
this Agreement and each of the other Loan Documents:

(a)           Number;
Inclusion.  References to the plural
include the singular, the plural, the part and the whole; “or” has the
inclusive meaning represented by the phrase “and/or,” and “including” is not a
term of limitation and has the meaning represented by the phrase “including
without limitation”;

(b)           Determination.  References to “determination” of or by the
Agent or the Banks shall be deemed to include good-faith estimates by the Agent
or the Banks (in the case of quantitative determinations) and good-faith
beliefs by the Agent or the Banks (in the case of qualitative determinations)
and such determination shall be conclusive absent manifest error;

(c)           Agent’s Discretion
and Consent.  Whenever
the Agent or the Banks are granted the right herein to act in its or their sole
discretion or to grant or withhold consent such right shall be exercised in
good faith;

(d)           Documents
Taken as a Whole.  The words “hereof,”
“herein,” “hereunder,” “hereto” and similar terms in this Agreement or any
other Loan Document refer to this Agreement or such other Loan Document as a
whole and not to any particular provision of this Agreement or such other Loan
Document;

(e)           Headings.  The section and other headings contained in
this Agreement or such other Loan Document and the Table of Contents (if any),
preceding this Agreement or such other Loan Document are for reference purposes
only and shall not control or affect the construction of this Agreement or such
other Loan Document or the interpretation thereof in any respect;

(f)            Implied
References to this Agreement. 
Article, section, subsection, clause, schedule and exhibit references
are to this Agreement or other Loan Document, as the case may be, unless
otherwise specified;

(g)           Persons.  Reference to any Person includes such Person’s
successors and assigns but, if applicable, only if such successors and assigns
are permitted by this Agreement or such other Loan Document, as the case may
be, and reference to a Person in a particular capacity excludes such Person in
any other capacity;

(h)           Modifications
to Documents.  Reference to any
agreement (including this Agreement and any other Loan Document together with
the schedules and exhibits hereto or thereto), document or instrument means
such agreement, document or instrument as amended, modified, replaced,
substituted for, superseded or restated;

 21
 

 

(i)            From,
To and Through.  Relative to the
determination of any period of time, “from” means “from and including,” “to”
means “to but excluding,” and “through” means “through and including”; and

(j)            Shall;
Will.  References to “shall” and “will”
are intended to have the same meaning.

Section 1.03  Accounting
Principles; Computations.  (a)  Except as otherwise provided in this
Agreement (as, for example, where reference is made to statutory or regulatory
financial matters), all computations and determinations as to accounting or
financial matters and all financial statements to be delivered pursuant to this
Agreement shall be made and prepared in accordance with GAAP (including
principles of consolidation where appropriate), and all accounting or financial
terms shall have the meanings ascribed to such terms by GAAP as in effect on
the date hereof applied on a basis consistent with that used in preparing the
Historical Statements referred to in Section 5.01(h)(A) [Historical
Statements].  In the event of any change
after the date hereof in GAAP, and if such change would result in the inability
to determine compliance with the financial covenants set forth in Section 7.02
based upon Holdings’ regularly prepared financial statements by reason of the
preceding sentence, then the parties hereto agree to endeavor, in good faith,
to agree upon an amendment to this Agreement that would adjust such financial
covenants in a manner that would not affect the substance thereof, but would
allow compliance therewith to be determined in accordance with Holdings’
financial statements at that time.

(b)           For purposes of this Agreement, the
Dollar Equivalent of each Loan that is an Alternate Currency Loan and the
Stated Amount of each Letter of Credit denominated in an Alternate Currency
shall be calculated on the date when any such Loan is made or Letter of Credit
is issued, on the second Business Day of each month, or such date as a Borrower
may request and at such other times as designated by the Agent at any time when
a Potential Default or an Event of Default exists.  Such Dollar Equivalent shall remain in effect
until the same is recalculated by the Agent as provided above and notice of
such recalculation is received by the Borrowers, it being understood that until
such notice is received, the Dollar Equivalent shall be that Dollar Equivalent
as last reported to the Borrowers by the Agent. 
The Agent shall promptly notify the Borrowers and the Banks of each such
determination of the Dollar Equivalent.

ARTICLE II

REVOLVING CREDIT
AND LETTER OF CREDIT FACILITY

Section 2.01  Credit
Commitments.  Subject to the terms
and conditions hereof and relying upon the representations and warranties
herein set forth, each Bank severally agrees to make Revolving Credit Loans to
any Borrower (on a several basis) at any time or from time to time on or after
the date hereof to the Expiration Date, which Revolving Credit Loans
(i) may be made and maintained in such Approved Currency as is requested
by the applicable Borrower; (ii) shall not exceed in aggregate Principal
Amount outstanding an amount which, when added to the aggregate outstanding
Principal Amount of all Bid Loans and the Letter of Credit Outstandings at such
time, is equal to the sum of the Revolving Credit Commitments at such

 22
 

time; (iii) shall not, in
the case of Revolving Credit Loans incurred by Holdings, AGRI and AGRO, exceed
in aggregate Principal Amount outstanding an amount which, when added to the
outstanding Principal Amount of all Bid Loans incurred by all such Borrowers in
the aggregate and the Letter of Credit Outstandings in respect of Letters of
Credit issued for the account of all such Borrowers in the aggregate, is equal
to the Holdings Sub-Limit; and (iv) shall not, in the case of Revolving
Credit Loans incurred by the UK Borrower, exceed in aggregate Principal Amount
outstanding an amount which, when added to the outstanding Principal Amount of
all Bid Loans incurred by the UK Borrower and the Letter of Credit Outstandings
in respect of Letters of Credit issued for the account of the UK Borrower, is
equal to $20,000,000.  Within such limits
of time and amount and subject to the other provisions of this Agreement, the
Borrowers may borrow, repay, and reborrow Revolving Credit Loans pursuant to
this Section 2.01.

Section 2.02  Nature
of Banks’ Obligations with Respect to Revolving Credit Loans.  Each Bank shall be obligated to participate
in each request for Revolving Credit Loans pursuant to Section 2.05 [Revolving
Credit Loan Requests] in accordance with its Ratable Share.  The aggregate Principal Amount of each Bank’s
Revolving Credit Loans outstanding hereunder to the Borrowers at any time shall
never exceed its Revolving Credit Commitment. 
The obligations of each Bank hereunder are several and not joint.  The failure of any Bank to perform its
obligations hereunder shall not affect the Obligations of the Borrowers to any
other party nor shall any other party be liable for the failure of such Bank to
perform its obligations hereunder.  The
Banks shall have no obligation to make Revolving Credit Loans hereunder on or
after the Expiration Date.

Section 2.03  Facility
Fee; Letter of Credit Fee.  (a)  Accruing from the date hereof until but not
including the Expiration Date, Holdings and the Company agree to pay, on a
joint and several basis, to the Agent for the account of each Bank, as
consideration for such Bank’s Revolving Credit Commitment hereunder, an amount
equal to such Bank’s Ratable Share of a non-refundable facility fee (the “Facility
Fee”) equal to the product of (A) the Applicable Facility Fee Rate (computed on
the basis of a year of 360  days
for the actual days elapsed) and (B) an amount equal to the average daily
amount of the total Revolving Credit Commitments, as the same may be
constituted from time to time, regardless of usage.  The Facility Fee shall be payable in arrears
on the first Business Day of each June, September, December, and March after
the date hereof and on the Expiration Date or upon acceleration of the Loans.

(b)           Each
Borrower severally agrees to pay to the Agent for pro rata distribution to each Bank (based on their respective
Ratable Share) a non-refundable letter of credit fee (the “Letter of Credit Fee”)
equal to the product of (i) a rate per annum equal to the Applicable Margin
with respect to Revolving Credit Loans outstanding as LIBOR Loans and
(ii) the average daily Stated Amount of all Letters of Credit issued for
the account of such Borrower.  Accrued
Letter of Credit Fees shall be due and payable in arrears on the first Business
Day of each June, September, December and March after the date hereof and upon
the first Business Day on or after the termination of the Commitments upon which
no Letters of Credit remain outstanding.

(c)           Each
Borrower severally agrees to pay to each Issuing Bank, for its own account, a
fronting fee (the “Fronting Fee”) in respect of each Letter of Credit issued by
such

 23
 

Issuing Bank for the account
of such Borrower in an amount and on dates as shall have separately been agreed
to by such Borrower and such Issuing Bank.

Section 2.04  Utilization
Fee.  On each day on which the
Facility Usage exceeds 50.0% of the amount of the Commitments, the Applicable
Margin for Revolving Credit Loans outstanding as LIBOR Loans shall be increased
for such day by the Applicable Usage Premium (for all purposes hereunder,
including without limitation for purposes of Sections 2.03(b) and 3.02).

Section 2.05  Revolving
Credit Loan Requests.  Except as
otherwise provided herein, a Borrower may from time to time prior to the
Expiration Date request the Banks to make Revolving Credit Loans in Dollars, or
renew or convert the Interest Rate Option applicable to existing Revolving
Credit Loans pursuant to Section 3.01(a) [Revolving Credit Interest Rate
Options], by delivering to the Agent, not later than 10:00 a.m., New York
time, (i) three (3) Business Days prior to the proposed Borrowing Date
with respect to the making of Revolving Credit Loans to which the LIBOR Option
applies, or with respect to the conversion to or the renewal of the LIBOR
Option for any Loans, provided that at any time when an Event of Default
shall have occurred and be continuing, a LIBOR Option shall not be available to
a Borrower if the Required Banks have so notified the Borrower; and
(ii) one (1) Business Day prior to either the proposed Borrowing Date with
respect to the making of a Revolving Credit Loan to which the Base Rate Option
applies or the last day of the preceding Revolving Credit Loan Interest Period
with respect to the conversion to the Base Rate Option for any Loan, of a duly
completed Revolving Credit Loan Request therefor substantially in the form of Exhibit 2.05
or a Revolving Credit Loan Request by telephone immediately confirmed in
writing by letter, facsimile, email, or telex in the form of such Exhibit.  In addition, a Borrower may from time to time
prior to the Expiration Date request to make Revolving Credit Loans in
Alternate Currencies by delivering to the Agent, not later than 1:00 P.M.,
New York time, at least four Business Days prior to the Borrowing Date a
duly completed Revolving Credit Loan Request substantially in the form of Exhibit
2.05 or a Revolving Credit Loan Request by telephone immediately confirmed
in writing by letter, facsimile, email or telex in the form of such
Exhibit.  Each Revolving Credit Loan
Request shall be irrevocable and shall specify (i) the identity of the
applicable Borrower; (ii) the respective Approved Currency for such Loan;
(iii) the proposed Borrowing Date; (iv) the aggregate amount of the
proposed Loans comprising each Borrowing Tranche (stated in the applicable
Approved Currency), which shall be (A) for all Loans made to Holdings, the
Company, AGRI and AGRO, in integral multiples of $1,000,000 and not less than
$10,000,000 for each Borrowing Tranche to which the LIBOR Option applies and
not less than the lesser of $500,000 or the maximum amount available for
Borrowing Tranches to which the Base Rate Option applies and (B) for all Loans
made to the UK Borrower, in integral multiples of $1,000,000 for each Borrowing
Tranche to which the LIBOR Option applies and not less than $500,000 or the
maximum amount available for Borrowing Tranches to which the Base Rate Option
applies; (v) whether Revolving Credit LIBOR Option or Base Rate Option
shall apply to the proposed Loans comprising the applicable Borrowing Tranche;
and (vi) in the case of a Borrowing Tranche to which the Revolving Credit
LIBOR Option applies, an appropriate Revolving Credit Interest Period for the
Loans comprising such Borrowing Tranche.

Section 2.06  Making
Revolving Credit Loans.  The Agent
shall, promptly after receipt by it of a Revolving Credit Loan Request pursuant
to Section 2.05 [Revolving Credit

 24
 

Loan Requests], notify the
Banks of its receipt of such Loan Request specifying:  (i) the applicable Borrower making the
Loan Request; (ii) the proposed Borrowing Date and the time and method of
disbursement of the Revolving Credit Loans requested thereby; (iii) the
amount and type of each such Revolving Credit Loan (stated in the applicable
Approved Currency) and the applicable Interest Period (if any); and
(iv) the apportionment among the Banks of such Revolving Credit Loans as
determined by the Agent in accordance with Section 2.02 [Nature of Banks’
Obligations].  Each Bank shall remit the
principal amount of each Revolving Credit Loan to the Agent such that the Agent
is able to, and the Agent shall, to the extent the Banks have made funds available
to it for such purpose and subject to Section 6.02 [Each Additional Loan], fund
such Revolving Credit Loans to the applicable Borrower in the applicable
Approved Currency and immediately available funds at the Principal Office prior
to 2:00 p.m., New York time, on the applicable Borrowing Date, provided
that if any Bank fails to remit such funds to the Agent in a timely manner, the
Agent may elect in its sole discretion to fund with its own funds the Revolving
Credit Loans of such Bank on such Borrowing Date, and such Bank shall be
subject to the repayment obligation in Section 9.16 [Availability of Funds].

Section 2.07  Use
of Proceeds.  The proceeds of the
Loans and Letters of Credit shall be used for the working capital and other
general corporate purposes of the Borrowers and in accordance with Section
7.01(j) [Use of Proceeds].

Section 2.08  Bid
Loan Facility.  (a)  Bid Loan Requests.  Except as otherwise provided herein, any
Borrower may from time to time prior to the Expiration Date request that the
Banks make Bid Loans by delivery to the Agent not later than 10:00 A.M.,
New York time, of a duly completed request therefor substantially in the
form of Exhibit 2.08(a) hereto or a request by telephone
immediately confirmed in writing by letter, facsimile, email, or telex (each, a
“Bid Loan Request”) at least three (3) Business Days prior to the proposed Bid
Loan Borrowing Date if the applicable Borrower is requesting Fixed Rate Bid
Loans and four (4) Business Days prior to the proposed Bid Loan Borrowing
Date if the applicable Borrower is requesting Bid Loans with the Bid Loan LIBOR
Rate Option of one, two, three, or six months’ duration.  Each Bid Loan Request shall be irrevocable
and shall specify (i) the identity of the applicable Borrower; (ii) the
respective Approved Currency for such Loan; (iii) the proposed Bid Loan
Borrowing Date; (iv) whether the applicable Borrower is electing the Bid Loan
Fixed Rate Option or the Bid Loan LIBOR Option; (v) the term of the proposed
Bid Loan (the “Bid Loan Interest Period”), which may be no less than seven (7)
day(s) and no longer than one hundred eighty (180) days if the applicable
Borrower is requesting a Fixed Rate Bid Loan and one, two, three, or six months
if the applicable Borrower is requesting a LIBOR Bid Loan; and (vi) the maximum
principal amount (the “Requested Amount”) of such Bid Loan, which (x) in the
case of Bid Loans to Holdings, the Company, AGRI and AGRO, shall be not less
than $10,000,000 and shall be an integral multiple of $1,000,000 and (y) in the
case of Bid Loans to the UK Borrower, shall be not less than $1,000,000
and shall be an integral multiple of $1,000,000.  After giving effect to such Bid Loan and any
other Loan made on or before the Bid Loan Borrowing Date, the sum of the
aggregate Principal Amount of all Revolving Credit Loans and Bid Loans
outstanding plus the Letter of Credit Outstandings shall not exceed the
aggregate amount of the Revolving Credit Commitments of the Banks.  In addition, after giving effect to any such
Bid Loan incurred by (i) Holdings, AGRI and AGRO and any other Loan made on or
before the Bid Loan Borrowing Date, the aggregate outstanding Principal Amount
of all Bid Loans and Revolving Credit Loans incurred by all such Borrowers plus
the Letter of Credit

 25
 

Outstandings in respect of
Letters of Credit issued for the account of all such Borrowers shall not exceed
the Holdings Sub-Limit; and (ii) the UK Borrower and any other Loan made on or
before the Bid Loan Borrowing Date, the aggregate outstanding Principal Amount
of all Bid Loans and Revolving Credit Loans incurred by the UK Borrower plus
the Letter of Credit Outstandings in respect of Letters of Credit issued for
the account of the UK Borrower shall not exceed $20,000,000.  Notwithstanding any provision hereof to the
contrary, no Bid Loan may be requested for a period that would end beyond the
Expiration Date.

(b)           Bidding.  The Agent shall promptly after receipt by it
of a Bid Loan Request pursuant to Section 2.08(a) notify the Banks of its
receipt of such Bid Loan Request specifying (i) the identity of the applicable
Borrower, (ii) the proposed Bid Loan Borrowing Date, (iii) whether the
proposed Bid Loan shall be a Fixed Rate Bid Loan or a LIBOR Bid Loan, (iv) the
Bid Loan Interest Period, (v) the principal amount of the proposed Bid Loan and
(vi) the Approved Currency for such Bid Loan.  Each Bank may submit a bid (a “Bid”) to the
Agent by telephone (immediately confirmed in writing by letter, facsimile,
email, or telex) not later than the following (each, as applicable, a “Bid
Deadline”):  10:00 A.M. New York
time two (2) Business Day before the proposed Bid Loan Borrowing Date if
the applicable Borrower is requesting a Fixed Rate Bid Loan or 10:00 A.M.
New York time three (3) Business Days before the proposed Bid Loan
Borrowing Date if the applicable Borrower is requesting a LIBOR Bid Loan of
one, two, three, or six months’ duration. 
Each Bid shall specify: 
(A) the principal amount of proposed Bid Loans offered by such Bank
(the “Offered Amount”) which (i) may be less than, but shall not exceed,
the Requested Amount, (ii) shall be at least $1,000,000 and shall be an
integral multiple of $1,000,000 and (iii) may exceed such Bank’s Revolving
Credit Commitment; and (B) the Fixed Rate which shall apply to such proposed
Bid Loan if the applicable Borrower has requested a Fixed Rate Bid Loan or the
LIBOR Bid Loan Spread which shall apply to such proposed Bid Loan if the
applicable Borrower has requested a LIBOR Bid Loan and which may be a positive
or negative number.  If any Bid omits
information required hereunder, the Agent may in its sole discretion attempt to
notify the Bank submitting such Bid.  If
the Agent so notifies a Bank, such Bank may resubmit its Bid, provided
that it does so prior to the applicable Bid Deadline.  The Agent shall promptly notify the
applicable Borrower of the Bids which it timely received from the Banks.  If the Agent in its capacity as a Bank shall,
in its sole discretion, make a Bid, it shall notify the Borrower of such Bid at
least one-half hour before the applicable Bid Deadline.

(c)           Accepting
Bids.  The applicable Borrower, at
its option, shall irrevocably accept or reject Bids by notifying the Agent of
such acceptance or rejection by telephone (immediately confirmed in writing by
letter, facsimile, email, or telex) not later than one hour after the
applicable Bid Deadline.  If the
applicable Borrower elects to accept any Bids, its acceptance must meet the
following conditions:  (1) the total
amount which (A) Holdings, the Company, AGRI and AGRO accepts from all Banks
must not be less than $10,000,000 and shall be in integral multiples of
$1,000,000 and (B) the UK Borrower accepts from all Banks shall be in integral
multiples of $1,000,000, and may not exceed the Requested Amount; (2) the
applicable Borrower must accept Bids based solely on the amount of the Fixed
Rates or LIBOR Bid Loan Spreads, as the case may be, which each of the Banks
quoted in their Bids in ascending order of the amount of Fixed Rates or LIBOR
Bid Loan Spreads; (3) the applicable Borrower may not borrow Bid Loans from any
Bank on the Bid Loan Borrowing Date in an amount exceeding such Bank’s Offered
Amount; (4) if two or more Banks make Bids at the same Fixed

 26
 

Rate (if the applicable
Borrower Requested a Fixed Rate Bid Loan) or LIBOR Bid Loan Spread (if the
applicable Borrower Requested a LIBOR Bid Loan) and the applicable Borrower
desires to accept a portion but not all of the Bids at such Fixed Rate or LIBOR
Bid Loan Spread, as the case may be, the applicable Borrower shall accept a
portion of each Bid equal to the product of the Offered Amount of such Bid
times the fraction obtained by dividing the total amount of Bids which the
applicable Borrower desires to accept at such Fixed Rate or LIBOR Bid Loan
Spread, as the case may be, by the sum of the Offered Amounts of the Bids at
such Fixed Rate or LIBOR Bid Loan Spread, provided that the applicable
Borrower shall round the Bid Loans allocated to each such Bank upward or
downward as the applicable Borrower may select to integral multiples of
$1,000,000.  The Agent shall (i) promptly
notify a Bank that has made a Bid of the amount of its Bid that was accepted or
rejected by the applicable Borrower and (ii) as promptly as practical
notify all of the Banks of all Bids submitted and those which have been
accepted.

(d)           Funding
Bid Loans.  Each Bank whose Bid or
portion thereof is accepted shall remit the principal amount of its Bid Loan to
the Agent by 12:00 Noon on the Bid Loan Borrowing Date.  The Agent shall make such funds available to
the applicable Borrower on or before 1:00 P.M. on the Borrowing Date, provided
that the conditions precedent to the making of such Bid Loan set forth in
Section 6.02 have been satisfied not later than 10:00 A.M. New York time
on the proposed Bid Loan Borrowing Date. 
If such conditions precedent have not been satisfied prior to such time,
then (i) the Agent shall not make such funds available to the applicable
Borrower, (ii) the Bid Loan Request shall be deemed to be canceled, (iii) the
Agent shall return the amount previously funded to the Agent by each applicable
Bank no later than the next following Business Day, and (iv) the applicable
Borrower shall be obligated to each such Bank for any loss, costs, and expenses
applicable pursuant to Section 4.06(b) [Indemnity].  The applicable Borrower shall immediately
notify the Agent of any failure to satisfy the conditions precedent to the
making of Bid Loans under Section 6.02. 
The Agent may assume that the applicable Borrower has satisfied such conditions
precedent if the applicable Borrower (i) has delivered to the Agent any
documents required to be delivered under Section 6.02, (ii) the applicable
Borrower has not notified the Agent that any other conditions precedent have
not been satisfied, and (iii) the Agent has no actual notice of such a
failure.

(e)           Several
Obligations.  The obligations of the
Banks to make Bid Loans after their Bids have been accepted are several.  No Bank shall be responsible for the failure
of any other Bank to make any Bid Loan which another Bank has agreed to make.

(f)            Bid
Notes.  The obligation of the
applicable Borrower to repay the aggregate unpaid principal amount of the Bid
Loans made to it by each Bank, together with interest thereon, shall be
evidenced by a Bid Note dated as of the Closing Date payable to the order of
such Bank in a face amount equal to the aggregate Revolving Credit Commitments
of all of the Banks.

 27
 

 

Section 2.09  Restriction
on Loans and Letters of Credit. 
Notwithstanding anything to the contrary in this Agreement, none of
AGRO, AGRI nor the UK Borrower will be permitted to borrow or incur any new
Loans hereunder or have any new Letters of Credit issued for its account at any
time after such Person ceases to be a wholly-owned Subsidiary of Holdings.

Section 2.10  Letters
of Credit.  (a)  Subject to and upon the terms and conditions
set forth herein, each Borrower may request that any Issuing Bank issue at any
time and from time to time on or after the Closing Date and prior to the
Expiration Date one or more letters of credit for the account of such Borrower
or any of its Subsidiaries to any other Person and in support of, on a standby
basis, obligations of such Borrower to any other Person and subject to and upon
the terms and conditions herein set forth each Issuing Bank agrees to issue at
any time and from time to time on or after the Closing Date and prior to the
Expiration Date one or more irrevocable standby letters of credit in such form
as may be approved by such Issuing Bank, which approval shall not be
unreasonably withheld (each such letter of credit, a “Letter of Credit” and,
collectively, the “Letters of Credit”). It is hereby acknowledged and agreed
that each of the letters of credit described in Schedule 2.10(a) (the “Existing
Letters of Credit”), which were issued by ABN Amro Bank N.V. under the Existing
Credit Agreement and remain outstanding on the Closing Date, shall constitute a
“Letter of Credit” for all purposes of this Agreement and shall be deemed
issued under this Agreement on the Closing Date.

(b)           Immediately
upon the issuance by any Issuing Bank of any Letter of Credit, such Issuing
Bank shall be deemed to have sold and transferred to each Bank other than such
Issuing Bank (each such Bank, in its capacity under this Section 2.10(b), a “Participant”),
and each such Participant shall be deemed irrevocably and unconditionally to
have purchased and received from such Issuing Bank, without recourse or
warranty, an undivided interest and participation, to the extent of such Participant’s
Ratable Share, in such Letter of Credit, each drawing made thereunder and the
obligations of each Borrower under this Agreement with respect thereto, and any
security therefor or guaranty pertaining thereto.  Upon any change in the Commitments or Ratable
Shares of the Banks pursuant to this Agreement, it is hereby agreed that, with
respect to all outstanding Letters of Credit and Unpaid Drawings, there shall
be an automatic adjustment to the participation amounts pursuant to this
Section 2.10 to reflect the new Ratable Shares of the assignor and assignee
Bank or of all Banks with Commitments, as the case may be.

(c)           In
the event that any Issuing Bank makes any payment under any Letter of Credit
and the respective Borrower shall not have reimbursed such amount in full to
such Issuing Bank pursuant to Section 2.13, such Issuing Bank shall promptly
notify the Administrative Agent, which shall promptly notify each Participant,
of such failure, and each Participant shall promptly and unconditionally pay to
such Issuing Bank the amount of such Participant’s Ratable Share of such
unreimbursed payment in the respective Approved Currency and in immediately
available funds.  If, prior to 11:00
a.m., New York time, on any Business Day, the Administrative Agent so notifies
any Participant required to fund a payment under a Letter of Credit, such
Participant shall make available to such Issuing Bank in the respective
Approved

 28
 

Currency and in immediately
available funds such Participant’s Ratable Share of the amount of such payment
on such Business Day (or, if notice is given after 11:00 a.m., New York time,
on any Business Day, on the next Business Day). 
If and to the extent such Participant shall not have so made its Ratable
Share of the amount of such payment available to such Issuing Bank, such
Participant agrees to pay to such Issuing Bank, forthwith on demand such
amount, together with interest thereon, for each day from such date to but
excluding the date such amount is paid to such Issuing Bank at the overnight
Base Rate.  The failure of any
Participant to make available to such Issuing Bank its Ratable Share of any
payment under any Letter of Credit shall not relieve any other Participant of
its obligation hereunder to make available to such Issuing Bank its Ratable
Share of any payment on the date required, as specified above, but no
Participant shall be responsible for the failure of any other Participant to
make available to such Issuing Bank such other Participant’s Ratable Share of
any such payment.

(d)           Whenever
any Issuing Bank receives any payment by any Borrower as to which it has also
received payments from the Participants pursuant to paragraph (c) above,
such Issuing Bank shall forward such payment to the Agent, which in turn shall
distribute to each Participant which has paid its Ratable Share thereof, in the
respective Approved Currency and in immediately available funds, an amount
equal to such Participant’s share (based upon the amount funded by such
Participant to the aggregate amount funded by all Participants and retained by
the Issuing Bank) of the principal amount of such payment and interest thereon
accruing after the purchase of the respective participations.

(e)           The
obligations of the Participants to make payments to each Issuing Bank with respect
to Letters of Credit issued by it shall be irrevocable and not subject to any
qualification or exception whatsoever and shall be made in accordance with the
terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:

(i)            any lack of validity or
enforceability of this Agreement or any of the other Loan Documents or any
amendment, supplement or modification to any of the foregoing;

(ii)           the existence of any claim, setoff,
defense or other right which the Participant or any of its Affiliates may have
at any time against a beneficiary named in a Letter of Credit, any transferee
of any Letter of Credit (or any Person for whom any such transferee may be
acting), the Agent, any Issuing Bank, any Participant, any Bank, or any other
Person, whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions (including any
underlying transaction between any Borrower or any of its Affiliates and the
beneficiary named in any such Letter of Credit);

(iii)          any draft, certificate or any other
document presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;

(iv)          the surrender or impairment of any
security for the performance or observance of any of the terms of any of the
Loan Documents; or

 29
 

 

(v)           the occurrence of any Event of
Default or Potential Default; or

(vi)          any matter or event set forth in
subsection 2.13(b).

(b)           Upon
the request of any Participant, each Issuing Bank shall furnish to such
Participant copies of any Letter of Credit issued by it and such other
documentation as may reasonably be requested by such Participant.

Section 2.11  Conditions
to the Issuance of all Letters of Credit. 
(a)  Notwithstanding anything to
the contrary set forth in this Article II, no Issuing Bank shall be under any
obligation to issue any Letter of Credit if at the time of such issuance:

(i)            any order, judgment or decree of any
Official Body or arbitrator shall purport by its terms to enjoin or restrain
such Issuing Bank from issuing such Letter of Credit or any requirement of law
applicable to such Issuing Bank or any Bank or any request or directive
(whether or not having the force of law) from any Official Body with
jurisdiction over such Issuing Bank or any Bank shall prohibit, or request that
such Issuing Bank or any Banks refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon such
Issuing Bank or any Bank with respect to such Letter of Credit any restriction
or reserve or capital requirement (for which such Issuing Bank is not otherwise
compensated) not in effect on the Closing Date, or any unreimbursed loss, cost
or expense which was not applicable, in effect or known to such Issuing Bank as
of the Closing Date;

(ii)           the conditions precedent set forth in
Section 6.02 are not satisfied at that time; or

(iii)          such Issuing Bank shall have received
notice from any Borrower or the Required Banks prior to the issuance of such
Letter of Credit of the type described in clause (vi) of Section 2.11(b).

(b)           Notwithstanding
anything to the contrary set forth in this Article II;

(i)            Letters of Credit may only be
denominated in Approved Currencies;

(ii)           no Letter of Credit shall be issued
if after giving effect thereto the Letter of Credit Outstandings, when added to
the aggregate outstanding Principal Amount of all Revolving Credit Loans and
Bid Loans at such time, would exceed the Revolving Credit Commitments at such
time;

(iii)          no Letter of Credit shall be issued at
any time if after giving effect thereto the Letter of Credit Outstandings in
respect of all Letters of Credit would exceed $100,000,000;

(iv)          no Letter of Credit shall be issued if
after giving effect to any such Letter of Credit issued for the account of (i)
Holdings, AGRI and AGRO and any other Loan made on or before the issuance of
such Letter of Credit, the aggregate Principal Amount of all Bid Loans and
Revolving Credit Loans incurred by all such Borrowers and the

 30
 

Letter of Credit Outstandings in respect of
Letters of Credit issued for the account of all such Borrowers would exceed the
Holdings Sub-Limit and (ii) the UK Borrower and any other Loan made on or
before the issuance of such Letter of Credit, the aggregate Principal Amount of
all Bid Loans and Revolving Credit Loans incurred by the UK Borrower and
the Letter of Credit Outstandings in respect of Letters of Credit issued for
the account of the UK Borrower would exceed $20,000,000;

(v)           each Letter of Credit shall have an
expiry date occurring not later than one year after such Letter of Credit’s
date of issuance, provided that each such Letter of Credit may by its
terms automatically renew annually for one additional year unless the
respective Issuing Bank notifies the beneficiary thereof, in accordance with
the terms of such Letter of Credit, that such Letter of Credit will not be
renewed; and

(vi)          no Issuing Bank will issue any Letter
of Credit after it has received written notice from any Borrower or the
Required Banks stating that an Event of Default or a Potential Default exists
until such time as the Issuing Bank shall have received a written notice of (x)
rescission of such notice from the party or parties originally delivering the
same or (y) a waiver of such Event of Default or Potential Default by the
Required Banks.

(c)           Subject to and on
the terms and conditions set forth herein, each Issuing Bank is hereby
authorized by each Borrower and the Banks to arrange for the issuance of any
Letter of Credit pursuant to Section 2.10 and the amendment of any Letter of
Credit pursuant to Section 2.15 and/or 10.01 by:

(i)            completing the commencement date and
the expiry date of such Letter of Credit; and

(ii)           (in the case of an amendment
increasing or reducing the amount thereof) amending such Letter of Credit in
such manner as such Issuing Bank and the respective beneficiary may agree.

Section 2.12  Letter
of Credit Requests.  (a) 
Whenever a Borrower desires that a Letter of Credit be issued for its
account, such Borrower shall give the Agent and the respective Issuing Bank
written notice (including by way of facsimile transmission, immediately
confirmed in writing by submission of the original of such request by mail to
the Issuing Bank) thereof prior to 12:00 Noon, New York time, at least three
Business Days prior to the proposed date of issuance (which shall be a Business
Day), which written notice shall be in the form of Exhibit 2.12 (each, a
“Letter of Credit Request”).  Each Letter
of Credit Request shall include any other documents as the respective Issuing
Bank customarily requires in connection therewith.

(b)           The
making of each Letter of Credit Request shall be deemed to be a representation
and warranty by the respective Borrower that such Letter of Credit may be
issued in accordance with, and it will not violate the requirements applicable
to such Borrower and/or such Letter of Credit of, Sections 2.10 and 2.11.

(c)           Upon
its issuance of, or amendment to, any Letter of Credit, the respective Issuing
Bank shall promptly notify the respective Borrower and each Bank of such
issuance or

 31
 

amendment, which notice
shall include a summary description of the Letter of Credit actually issued and
any amendments thereto.

(d)           The
Stated Amount of each Letter of Credit upon issuance shall be not less than
$1,000,000.

Section 2.13  Agreement
to Repay Letter of Credit Drawings. 
(a)  Each Borrower severally agrees to reimburse the
respective Issuing Bank directly for any payment or disbursement made by such
Issuing Bank under any Letter of Credit issued for the account of such Borrower
(each such amount so paid or disbursed until reimbursed, an “Unpaid Drawing”),
in each case, no later than one Business Day following the date of such payment
or disbursement, with interest on the amount so paid or disbursed by such
Issuing Bank, to the extent not reimbursed prior to 3:00 p.m., New York time,
on the date of such payment or disbursement, from and including the date paid
or disbursed to but not including the date such Issuing Bank is reimbursed
therefor at a rate per annum which shall be the Base Rate as in effect from
time to time plus the Applicable Margin for Base Rate Loans incurred by such
Borrower (plus an additional 2% per annum, payable on demand, if not reimbursed
by the third Business Day after the date on which the respective Borrower
receives notice from the respective Issuing Bank of such payment or
disbursement).

(b)           Each
Borrower’s obligation under this Section 2.13 to reimburse each Issuing Bank
with respect to Unpaid Drawings of such Borrower (including, in each case,
interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which such Borrower may have or have had against such Issuing Bank, or
any Issuing Bank, including, without limitation, any defense based upon the
failure of any drawing under a Letter of Credit to conform to the terms of the
Letter of Credit or any non-application or misapplication by the beneficiary of
the proceeds of such drawing; provided, however, that no Borrower
shall be obligated to reimburse any Issuing Bank for any wrongful payment made
by such Issuing Bank under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such Issuing
Bank (as determined by a court of competent jurisdiction in a final and
non-appealable decision).

(c)           In
determining whether to pay under any Letter of Credit, no Issuing Bank shall
have any obligation relative to the other Banks other than to confirm that any
documents required to be delivered under such Letter of Credit appear to have
been delivered and that they appear to substantially comply on their face with
the requirements of such Letter of Credit. 
Any action taken or omitted to be taken by any Issuing Bank under or in
connection with any Letter of Credit, if taken or omitted in the absence of
such Issuing Bank’s gross negligence or willful misconduct (as determined by a
court of competent jurisdiction in a final and non-appealable decision), shall
not create for such Issuing Bank any resulting liability to any Borrower or any
of its Affiliates or any Bank.

Section
2.14  Letter of Credit Expiration
Extensions.  Each Bank acknowledges
that to the extent provided under the terms of any Letter of Credit, the
expiration date of such Letter of Credit will be automatically extended for an
additional year, without written amendment, unless within a set period of time
prior to the expiration date of such Letter of

 

 32

 

Credit, notice is given by
the respective Issuing Bank in accordance with the terms of the respective
Letter of Credit (a “Notice of Non-Extension”) that the expiration date of such
Letter of Credit will not be extended beyond its current expiration date.  The respective Issuing Bank will give Notices
of Non-Extension as to any or all outstanding Letters of Credit issued by it if
requested to do so by the Required Banks pursuant to Article VIII.  In addition, the respective Issuing Bank will
give Notices of Non-Extension as to all outstanding Letters of Credit issued by
it if the Expiration Date has occurred. 
The respective Issuing Bank will send a copy of each Notice of
Non-Extension to the respective Borrower concurrently with delivery thereof to
the respective beneficiary, unless prohibited by law from doing so.

Section 2.15  Changes
to Stated Amount.  At any time when
any Letter of Credit is outstanding, at the request of the respective Borrower,
the Issuing Bank will enter into an amendment increasing or reducing the Stated
Amount of such Letter of Credit, provided that (i) the Stated
Amount of a Letter of Credit may not be increased at any time if the conditions
set forth in Sections 2.10 and 2.11 or the conditions precedent set forth in
Section 6.02 are not satisfied at such time, and (ii) the Stated Amount of a
Letter of Credit may not be increased at any time after the Expiration Date.

Section 2.16  Incremental
Commitments.  (a)  So long
as the Incremental Commitment Request Requirements are satisfied at the time of
the delivery of the request referred to below, Holdings shall have the right,
with the consent of, and in coordination with, the Agent, but without requiring
the consent of any of the Banks (save as provided in Section 2.16(b) below), to
request at any time and from time to time after the Closing Date and prior to
the Expiration Date, that one or more Banks (and/or one or more other banks or
financial institutions which are acceptable to each of the Agent and Holdings
(each an “Eligible Transferee”) and which will become Banks as provided below)
provide Incremental Commitments and, subject to the applicable terms and
conditions contained in this Agreement, make Loans pursuant thereto; it being
understood and agreed, however, that (i) no Bank shall be obligated to provide
an Incremental Commitment as a result of any such request by the Borrowers, and
until such time, if any, as such Bank has agreed in its sole discretion to
provide an Incremental Commitment and executed and delivered to the Agent an
Incremental Commitment Agreement in respect thereof as provided in Section
2.16(b), such Bank shall not be obligated to fund any Loans in excess of its
Commitment as in effect prior to giving effect to such Incremental Commitment
provided pursuant to Section 2.16(b) below, (ii) any Bank (including any
Eligible Transferee who will become a Bank) may so provide an Incremental
Commitment without the consent of any other Bank, (iii) each provision of
Incremental Commitments on a given date pursuant to Section 2.16(b) below shall
be in a minimum aggregate amount (for all Banks (including any Eligible
Transferee who will become a Bank)) of at least $25,000,000 and in integral
multiples of $5,000,000 in excess thereof, (iv) the aggregate amount of all
Incremental Commitments provided pursuant to Section 2.16(b) below, shall not
exceed $100,000,000 and (v) all Loans made and Letters of Credit issued
pursuant to Incremental Commitments (and all interest, fees and other amounts
payable thereon) shall be Obligations under this Agreement and the other
applicable Loan Documents.

(b)           At the time of the
provision of Incremental Commitments pursuant to this Section 2.16, the
Borrowers, the Agent and each such Bank or other Eligible Transferee which
agrees to provide an Incremental Commitment (each, an “Incremental Bank”) shall
execute and

 33
 

deliver to the
Administrative Agent an Incremental Commitment Agreement, with the
effectiveness of such Incremental Bank’s Incremental Commitment to occur on the
date (the “Incremental Loan Commitment Date”) set forth in such Incremental
Commitment Agreement, which date in any event shall be no earlier than the date
on which (w) all fees required to be paid in connection therewith at the time
of such effectiveness shall have been paid (including, without limitation, any
agreed upon up-front or arrangement fees owing to the Agent (or any affiliate
thereof)), (x) all Incremental Loan Commitment Requirements are satisfied, (y)
all other conditions set forth in this Section 2.16(b) shall have been
satisfied, and (z) all other conditions precedent that may be set forth in such
Incremental Commitment Agreement shall have been satisfied.  The Agent shall promptly notify each Bank as
to the effectiveness of each Incremental Commitment Agreement, and at such
time, (i) the Commitments under, and for all purposes of, this Agreement shall
be increased by the aggregate amount of such Incremental Commitments, (ii) Schedule
1.01(B) shall be deemed modified to reflect the revised Revolving Credit
Commitments of the affected Banks and (iii) to the extent requested by any
Incremental Bank, Notes will be issued, at the Borrowers’ expense, to such
Incremental Bank.

(c)           At the time of any
provision of Incremental Commitments pursuant to this Section 2.16, the Borrowers
shall, in coordination with the Agent, repay outstanding Loans of certain of
the Banks, and incur additional Loans from certain other Banks (including the
Incremental Banks), in each case to the extent necessary so that all of the
Banks participate in each outstanding Borrowing Tranche of Loans pro rata on the basis of their respective
Commitments (after giving effect to any increase in the Commitments pursuant to
this Section 2.16 above) and with the Borrowers being obligated to pay to
the respective Banks any costs of the type referred to in Section 3.04 herein
in connection with any such repayment and/or Loans.

ARTICLE III

INTEREST RATES

Section 3.01  Interest
Rate Options.  Each Borrower shall
pay interest in respect of the outstanding unpaid principal amount of the
Revolving Credit Loans as selected by it from the Base Rate Option or Revolving
Credit LIBOR Option set forth below applicable to the Revolving Credit Loans,
it being understood that, subject to the provisions of this Agreement, the Borrowers
may select different Interest Rate Options and different Interest Periods to
apply to different Borrowing Tranches of the Revolving Credit Loans, and may
convert to or renew one or more Interest Rate Options with respect to all or
any portion of the Revolving Credit Loans comprising any Borrowing Tranche, provided
that there shall not be at any one time outstanding more than eight (8)
Borrowing Tranches in the aggregate among all of the Revolving Credit
Loans.  If at any time the designated
rate applicable to any Revolving Credit Loan made by any Bank exceeds such Bank’s
highest lawful rate, the rate of interest on such Bank’s Revolving Credit Loan
shall be limited to such Bank’s highest lawful rate.

(a)           Revolving Credit Interest Rate Options.  Each Borrower shall have the right to select
from the following Interest Rate Options applicable to the Revolving Credit
Loans incurred by it:

 34
 

 

(i)            Revolving
Credit Base Rate Option:  A
fluctuating rate per annum (computed on the basis of a year of 365 or 366  days, as the case may be, for the actual
days elapsed) equal to the Base Rate plus the Applicable Margin, such interest
rate to change automatically from time to time effective as of the effective
date of each change in the Base Rate; or

(ii)           Revolving
Credit LIBOR Option:  A rate per
annum (computed on the basis of a year of 360 days for the actual days elapsed)
equal to the applicable LIBOR plus the Applicable Margin.

(b)           Rate
Quotations.  The Borrowers may call
the Agent on or before the date on which a Revolving Credit Loan Request is to
be delivered to receive an indication of the rates then in effect, but it is
acknowledged that such projection shall not be binding on the Agent or the
Banks nor affect the rate of interest which thereafter is actually in effect
when the election is otherwise made in accordance with the terms of this
Agreement.

(c)           Change
in Fees or Interest Rates.  If the
Applicable Margin or Applicable Facility Fee Rate is increased or reduced with
respect to any period for which any Borrower has already paid interest or the
Facility Fee, the Agent shall recalculate the additional interest or the
Facility Fee due from, or the amount of the refund of interest or the Facility
Fee due to, such Borrower and shall, within fifteen (15) Business Days after
the Agent received the information which gave rise to such increase or
decrease, give the applicable Borrower and the Banks notice of such
recalculation.

(i)            Any
additional interest or Facility Fee due from any Borrower shall be paid to the Agent
for the account of the Banks on the next date on which an interest or fee
payment is due; provided, however, that if there are no Loans
outstanding or if the Loans are due and payable, such additional interest or
Facility Fee shall be paid promptly after receipt of written request for
payment from the Agent.

(ii)           Any
interest or Facility Fee refund due to any Borrower shall be credited against
payments otherwise due from such Borrower on the next interest or fee payment
date or, if the Loans have been repaid and the Banks are no longer committed to
lend under this Agreement, the Banks shall pay the Agent for the account of
such Borrower such interest or Facility Fee refund not later than five Business
Days after written notice from the Agent to the Banks.

Section 3.02  Revolving
Credit Loans Interest Periods.  At
any time when any Borrower shall select, convert to, or renew a Revolving
Credit Loan LIBOR Option, the applicable Borrower shall notify the Agent
thereof at least three (3) Business Days prior to the effective date of such
LIBOR Option by delivering a Loan Request. 
The notice shall specify a  Revolving
Credit Loan Interest Period during which such Interest Rate Option shall
apply.  Notwithstanding the preceding
sentence, the following provisions shall apply to any selection of, renewal of,
or conversion to a Revolving Credit Loan LIBOR Option:

 35
 

 

(a)           Amount
of Borrowing Tranche.  Each Borrowing
Tranche of Revolving Credit Loans shall be in integral multiples of $1,000,000
and not less than $5,000,000 (or, in the case of Borrowing Tranches of
Revolving Credit Loans to the UK Borrower, not less than $1,000,000); and

(b)           Renewals.  In the case of the renewal of a Revolving
Credit Loan LIBOR Option at the end of an Interest Period, the first day of the
new Interest Period shall be the last day of the preceding Interest Period,
without duplication in payment of interest for such day.

Section 3.03  Interest
After Default.  To the extent
permitted by Law, upon the occurrence of an Event of Default and until such
time such Event of Default shall have been cured or waived:

(a)           Interest
Rate.  The rate of interest otherwise
applicable for each Loan pursuant to Section 3.01 [Interest Rate Options] shall
be increased by 2.0% per annum; and

(b)           Other
Obligations.  Each other Obligation
hereunder if not paid when due shall bear interest at a rate per annum equal to
the sum of the rate of interest applicable under the Base Rate Option plus an
additional 2.0% per annum from the time such Obligation becomes due and payable
and until it is paid in full.

(c)           Acknowledgment.  The Borrowers acknowledge that the increase
in rates referred to in this Section 3.03 reflects, among other things,
the fact that such Loans or other amounts have become a substantially greater
risk given their default status and that the Banks are entitled to additional
compensation for such risk; and all such interest referred to in this Section
3.03 shall be payable by the Borrowers upon demand by the Agent.

Section 3.04  LIBOR Unascertainable; Illegality;
Increased Costs; Deposits Not Available. 
(a)  Unascertainable.  If on any date on which LIBOR would otherwise
be determined with respect to Revolving Credit Loans or Bid Loans, the Agent
shall have determined that:

(i)               adequate and fair means do not exist for ascertaining
such LIBOR, or

(ii)              a contingency has occurred which materially and
adversely affects the respective London interbank market relating to LIBOR, the
Agent shall have the rights specified in Section 3.04(c).

(b)           Illegality;
Increased Costs; Deposits Not Available. 
If at any time any Bank shall have determined that:

(i)            the making, maintenance or funding of any Loan to which a
LIBOR Option applies has been made unlawful by compliance by such Bank in good
faith with any Law or any interpretation or application thereof by any

 36
 

Official
Body or with any request or directive of any such Official Body (whether or not
having the force of Law), or

(ii)           such LIBOR Option will not adequately and fairly reflect
the cost to such Bank of the establishment or maintenance of any such Loan, or

(iii)          after making all reasonable efforts, deposits of the
relevant amount in the relevant Approved Currency for the relevant Interest
Period for a Loan to which a LIBOR Option applies are not available to such
Bank with respect to such Loan in the respective London interbank market,

then the Agent shall have
the rights specified in Section 3.04(c).

(c)           Agent’s and Bank’s Rights.  In the case of any event specified in
Section 3.04(a) above, the Agent shall promptly so notify the Banks and
the Borrowers thereof, and in the case of an event specified in Section 3.04(b)
above, such Bank shall promptly so notify the Agent and endorse a certificate
to such notice as to the specific circumstances of such notice, and the Agent
shall promptly send copies of such notice and certificate to the other Banks
and the Borrowers.  Upon such date as
shall be specified in such notice (which shall not be earlier than the date
such notice is given), the obligation of (A) the Banks, in the case of
such notice given by the Agent, or (B) such Bank, in the case of such
notice given by such Bank, to allow the Borrowers to select, convert to or
renew a LIBOR Option shall be suspended until the Agent shall have later
notified the Borrowers, or such Bank shall have later notified the Agent, of
the Agent’s or such Bank’s, as the case may be, determination that the
circumstances giving rise to such previous determination no longer exist.  If at any time the Agent makes a
determination under Section 3.04(a) and any Borrower has previously notified
the Agent of its selection of, conversion to or renewal of a LIBOR Option and
such Interest Rate Option has not yet gone into effect, such notification shall
be deemed to provide for the termination of the applicable Borrower’s Bid Loan
request (without penalty) for such Loans if the applicable Borrower has
requested Bid Loans under the Bid Loan LIBOR Option and for the selection of,
conversion to or renewal of the Base Rate Option otherwise available with
respect to such Loans if the applicable Borrower has requested the Revolving
Credit Loan LIBOR Option.  If any Bank
notifies the Agent of a determination under Section 3.04(b), the Borrowers
shall, subject to the Borrowers’ indemnification Obligations under Section
4.06(b) [Indemnity], as to any Loan of the Bank to which a LIBOR Option
applies, on the date specified in such notice either convert such Loan to the
Base Rate Option otherwise available with respect to such Loan (in the case of
Dollar-denominated Loans) or prepay such Loan in accordance with Section
4.04 [Voluntary Prepayments].  Absent due
notice from the Borrowers of conversion or prepayment, such Loan shall
automatically be converted to the Base Rate Option otherwise available with
respect to such Loan upon such specified date in the case of Dollar-denominated
Loans, or prepaid on such date in the case of all other Loans.

Section 3.05  Selection of Interest Rate Options.  If any Borrower fails to select a new
Interest Period to apply to any Borrowing Tranche of Revolving Credit Loans
under the Revolving Credit Loan LIBOR Option at the expiration of an existing
Interest Period applicable to such Borrowing Tranche in accordance with the
provisions of Section 3.01(a) [Revolving Credit Interest Rate Options], the
applicable Borrower shall be deemed to have (i) in the case of

 37
 

Dollar-denominated
Loans, converted such Borrowing Tranche to the Base Rate Option commencing upon
the last day of the existing Interest Period and (ii) in the case of Alternate
Currency Loans, selected a one-month Interest Period commencing upon the last
day of the existing Interest Period.

ARTICLE IV

PAYMENTS

Section 4.01  Payments.  All payments and prepayments to be made in
respect of principal, interest, Facility Fees, Letter of Credit Fees, Fronting
Fees, Agent’s Fee, or other fees or amounts due from the Borrowers hereunder
shall be payable prior to 11:00 A.M., New York time, on the date when due
without presentment, demand, protest, or notice of any kind, all of which are
hereby expressly waived by the Borrowers, and without set-off, counterclaim, or
other deduction of any nature, and an action therefor shall immediately
accrue.  Such payments shall be made to
the Agent at the Principal Office for the ratable accounts of the Banks with
respect to the Revolving Credit Loans and Letters of Credit and for the account
of the lending Bank with respect to the Bid Loans, in the applicable Approved
Currency and in immediately available funds, and the Agent shall promptly distribute
such amounts to the Banks in immediately available funds, provided that
in the event payments are received by 11:00 A.M., New York time, by the
Agent with respect to the Loans and such payments are not distributed to the
Banks on the same day received by the Agent, the Agent shall pay the Banks the
Federal Funds Effective Rate with respect to the amount of such payments for
each day held by the Agent and not distributed to the Banks.  The Agent’s and each Bank’s statement of
account, ledger, or other relevant record shall, in the absence of manifest
error, be conclusive as the statement of the amount of principal of and
interest on the Loans and other amounts owing under this Agreement.

Section 4.02  Pro
Rata Treatment of Banks.  Each
borrowing of Revolving Credit Loans shall be allocated to each Bank according
to its Ratable Share (irrespective of the amount of Bid Loans outstanding), and
each selection of, conversion to or renewal of any Interest Rate Option
applicable to Revolving Credit Loans and each payment or prepayment by the
Borrowers with respect to principal or interest on the Revolving Credit Loans,
Facility Fees or Letter of Credit Fees or other fees (except for the Agent’s
Fee, the Bid Loan Processing Fee and the Fronting Fees) or amounts due from the
Borrowers hereunder to the Banks with respect to the Revolving Credit Loans
shall (except as provided in Section 3.04(c) [Agent’s and Bank’s Rights] in the
case of an event specified in Section 3.04 [Euro-Rate Unascertainable; Etc.],
Section 4.04 [Replacement of a Bank] or Section 4.06 [Additional Compensation
in Certain Circumstances]) be made in proportion to the applicable Revolving
Credit Loans outstanding from each Bank and, if no such Loans are then
outstanding, in proportion to the Ratable Share of each Bank.  Each borrowing of a Bid Loan shall be made
according to the provisions in Section 2.08 hereof and each payment or
prepayment by the Borrowers of principal, interest, fees, or other amounts from
the Borrowers with respect to Bid Loans shall be made to the Banks in
proportion to the amounts due to such Banks with respect to Bid Loans then
outstanding.

Section 4.03  Interest
Payment Dates.  Interest on Revolving
Credit Loans to which the Base Rate Option applies shall be due and payable in
arrears on the first Business Day

 38
 

of each June, September,
December, and March after the date hereof and on the Expiration Date or upon
acceleration of the Loan.  Interest on
Revolving Credit Loans and Bid Loans to which the LIBOR Option applies and Bid Loans
to which the Bid Loan Fixed Rate Option applies shall be due and payable on the
last day of each Interest Period for those Loans and, if such Interest Period
is longer than three (3) Months, also at the end of the third Month of such
Interest Period.  Interest on payments of
principal and other monetary Obligations shall be due on the date such payment
is due (whether on the stated maturity date, upon acceleration, or otherwise)
or if principal or such other Obligation is paid earlier than the date when
due, then on the date when paid.

Section 4.04  Voluntary
Prepayments.  (a)  Right to Prepay.  Each Borrower shall have the right at its
option from time to time to prepay the Revolving Credit Loans incurred by it in
whole or in part without premium or penalty (except as provided in Section
4.04(b) below or in Section 4.06 [Additional Compensation in Certain
Circumstances]):

(i)          at any time with respect to any Revolving Credit Loan to
which the Base Rate Option applies,

(ii)         on the last day of the applicable Interest Period with
respect to Revolving Credit Loans to which a LIBOR Option applies,

(iii)        on the date specified in a notice by any Bank pursuant to
Section 3.04 [LIBOR Unascertainable, Etc.] with respect to any Revolving Credit
Loan to which a LIBOR Option applies.

Whenever any Borrower desires to prepay any part of
the Revolving Credit Loans, it shall provide a prepayment notice to the Agent
by 12:00 Noon, New York time, at least one (1) Business Day prior to the
date of prepayment of Revolving Credit Loans to which a Base Rate Option
applies and at least three (3) Business Days prior to the date of prepayment of
Revolving Credit Loans to which a LIBOR Option applies setting forth the
following information:

(x)         the date, which shall be a Business Day, on which the
proposed prepayment is to be made;

(y)        a statement indicating the application of the prepayment
among the Borrowing Tranches of such Loans; and

(z)         the total principal amount of such prepayment, which shall
not be less than $1,000,000 or such lesser amount as may be outstanding under
the Borrowing Tranche to be prepaid.

The principal amount of the Revolving Credit Loans
for which a prepayment notice is given, together with such interest and fees as
have accrued on such principal amount, shall be due and payable on the date
specified in such prepayment notice as the date on which the proposed
prepayment is to be made; provided, however, that failure of any
Borrower to make payment in accordance with a prepayment notice given by it
shall not be an Event of Default in and of itself.  Except as provided in Section 3.04(c) [Agent’s
and Bank’s rights], if any Borrower

 39
 

prepays a Revolving Credit
Loan, but fails to specify the applicable Borrowing Tranche which the
applicable Borrower is prepaying, the prepayment shall be applied first to
Revolving Credit Loans to which the Base Rate Option applies, then to Loans to
which the Revolving Credit Loan LIBOR Option applies.  Any prepayment hereunder and any failure of
the applicable Borrower to make payment in accordance with a prepayment notice
provided by it shall be subject to the applicable Borrower’s Obligation to
indemnify the Banks under Section 4.06(b) [Indemnity].

(b)           Replacement
of a Bank.  In the event any Bank
(i) gives notice under Section 3.04 [LIBOR Unascertainable, Etc.] or
Section 4.06 [Additional Compensation in Certain Circumstances], (ii) does
not fund Revolving Credit Loans, Bid Loans or Unpaid Drawings because the
making of such Loans would contravene any Law applicable to such Bank, or
(iii) becomes subject to the control of an Official Body (other than
normal and customary supervision), then Holdings or the Company shall have the
right at its option, with the consent of the Agent and each Issuing Bank, which
shall not be unreasonably withheld, to prepay the Loans of such Bank in whole,
together with all interest accrued thereon, and terminate such Bank’s
Commitment at any time after (x) receipt of such Bank’s notice under
Section 3.04 [LIBOR Unascertainable, Etc.] or Section 4.06(a) [Increased Costs,
Etc.], (y) the date such Bank has failed to fund Revolving Credit Loans,
Bid Loans or Unpaid Drawings because the making of such Loans would contravene
Law applicable to such Bank, or (z) the date such Bank became subject to
the control of an Official Body, as applicable; provided that the
applicable Borrower shall also pay to such Bank at the time of such prepayment
any amounts required under Section 4.06 [Additional Compensation in
Certain Circumstances] and any accrued interest due on such amount and any
related fees; provided, however, that the Commitment and any Bid
Loan of such Bank shall be provided by one or more of the remaining Banks or a
replacement bank acceptable to the Agent and each Issuing Bank; provided,
further, the remaining Banks shall have no obligation hereunder to
increase their Commitments or provide the Bid Loan of such Bank.  Notwithstanding the foregoing, the Agent may
only be replaced subject to the requirements of Section 9.14 [Successor Agent].

(c)           Change of Lending Office.  Each Bank agrees that, upon the occurrence of
any event giving rise to increased costs or other special payments under
Section 3.04(b) [Illegality, Etc.] or Section 4.06(a) [Increased Costs, Etc.]
with respect to such Bank, it will, if requested by Holdings or the Company,
use reasonable efforts (subject to overall policy considerations of such Bank)
to designate another lending office for any Loans affected by such event, provided
that such designation is made on terms that such Bank and its lending office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of such
Section.  Nothing in this
Section 4.04(c) shall affect or postpone any of the Obligations or the
rights of the Agent or any Bank provided in this Agreement.

Section 4.05  Reduction
or Termination of Commitments.  The
aggregate amount of the Commitments shall be automatically reduced to zero on
the Expiration Date.  The aggregate
amount of Commitments shall be automatically reduced to zero on the 90th day following the date hereof unless the
Closing Date has occurred by such time. 
In addition, the Borrower shall have the right to terminate or reduce
the then unused portion of Commitments at any time or from time to time; provided
that (a) each partial reduction shall be in an aggregate amount of $10,000,000
or an integral multiple of $1,000,000 in excess thereof; (b) at no time

 40
 

shall the total amount of
the Commitments be less than the sum of the current Loans outstanding and the
Letter of Credit Outstandings at such time (except following the Expiration
Date to the extent no Loans are outstanding and all Letters of Credit are cash
collateralized in accordance with Section 4.10); and (c) any Borrower shall
provide at least five (5) Business Days’ prior written notice of each such
termination or reduction to the Agent specifying the amount of the Commitments
to be reduced or terminated.  Each such
notice shall be irrevocable, and Commitments once terminated or reduced may not
be reinstated.  Any partial reduction of
Commitments pursuant to this Section 4.05 will apply ratably to all Banks based
upon each such Bank’s Commitment.

Section 4.06  Additional
Compensation in Certain Circumstances. 
(a)  Increased Costs or Reduced
Return Resulting From Taxes, Reserves, Capital Adequacy Requirements, Expenses,
Etc.  If any Law, guideline or
interpretation or any change in any Law, guideline or interpretation or
application thereof by any Official Body charged with the interpretation or
administration thereof or compliance with any request or directive (whether or
not having the force of Law) of any central bank or other Official Body:

(i)            subjects
any Bank or Issuing Bank to any tax or changes the basis of taxation with
respect to this Agreement, the Revolving Credit Loans, the Bid Loans or Letters
of Credit or payments by any Borrower of principal, interest, Facility Fees,
Letter of Credit Fees, Unpaid Drawings or other amounts due from the Borrowers
hereunder (except for taxes on the overall net income of such Bank or Issuing
Bank),

(ii)           imposes,
modifies or deems applicable any reserve (including the Eurodollar Reserve
Percentage), special deposit or similar requirement against credits or
commitments to extend credit extended by, or assets (funded or contingent) of,
deposits with or for the account of, or other acquisitions of funds by, any
Bank or Issuing Bank, or

(iii)          imposes,
modifies or deems applicable any capital adequacy or similar requirement
(A) against assets (funded or contingent) of, or letters of credit, other
credits or commitments to extend credit extended by, any Bank or Issuing Bank,
or (B) otherwise applicable to the obligations of any Bank or Issuing Bank
under this Agreement,

and the result of any of the
foregoing is to increase the cost to, reduce the income receivable by, or
impose any expense (including loss of margin) upon any Bank or Issuing Bank
with respect to this Agreement, or the making, maintenance or funding of any
part of the Revolving Credit Loans or the Bid Loans, or the issuance of or
participation in any Letter of Credit (or, in the case of any capital adequacy
or similar requirement, to have the effect of reducing the rate of return on
any Bank’s capital or Issuing Bank, taking into consideration such Bank’s or
Issuing Bank’s customary policies with respect to capital adequacy) by an
amount which such Bank or Issuing Bank in its sole discretion deems to be
material, such Bank or Issuing Bank shall from time to time notify the Borrowers
and the Agent of the amount determined in good faith (using any averaging and
attribution methods employed in good faith) by such Bank or Issuing Bank to be
necessary to compensate such Bank or Issuing Bank for such increase in cost,
reduction of income, additional expense or reduced rate of return.  Such notice shall set forth in reasonable

 41
 

detail the basis for such
determination.  Such amount shall be due
and payable by the applicable Borrower to such Bank or Issuing Bank ten (10)
Business Days after such notice is given.

(b)           Indemnity.  In addition to the compensation required by
Section 4.06 (a) [Increased Costs, Etc.], each Borrower, with respect to Loans
incurred or requests therefor made by such Borrower, shall indemnify each Bank
against all liabilities, losses, or expenses (including loss of margin, any
loss or expense incurred in liquidating or employing deposits from third
parties and any loss or expense incurred in connection with funds acquired by a
Bank to fund or maintain Loans subject to a LIBOR Option or the Bid Loan Fixed
Rate Option) which such Bank sustains or incurs as a consequence of any

(i)            payment,
prepayment, conversion, or renewal of any Loan to which a LIBOR Option or the
Bid Loan Fixed Rate Option applies on a day other than the last day of the
corresponding Interest Period (whether or not such payment or prepayment is
mandatory, voluntary, or automatic and whether or not such payment or
prepayment is then due),

(ii)           attempt
by such Borrower to revoke (expressly, by later inconsistent notices or
otherwise) in whole or part any Loan Requests under Section 2.05 [Revolving
Credit Loan Requests], Section 2.08 [Bid Loan Facility] or Section 3.02
[Interest Periods] or notice relating to prepayments under Section 4.04
[Voluntary Prepayments],

(iii)          default
by such Borrower in the performance or observance of any covenant or condition
contained in this Agreement or any other Loan Document, including any failure
of such Borrower to pay when due (by acceleration or otherwise) any principal
of or interest on the Revolving Credit Loans or the Bid Loans, Facility Fee,
Letter of Credit Fee or any other amount due hereunder, or

(iv)          payment
or prepayment of any Bid Loan on a day other than the maturity date thereof
(whether or not such payment or prepayment is mandatory or voluntary).

If any Bank sustains or incurs any such loss or
expense, it shall from time to time notify the applicable Borrower of the
amount determined in good faith by such Bank (which determination may include
such assumptions, allocations of costs and expenses, and averaging or
attribution methods as such Bank shall deem reasonable) to be necessary to
indemnify such Bank for such loss or expense. 
Such notice shall set forth in reasonable detail the basis for such
determination.  Such amount shall be due
and payable by such Borrower to such Bank ten (10) Business Days after such
notice is given.

Section 4.07  Taxes.  (a)  No
Deductions.  All payments made by
each Borrower hereunder and under each Note or for Unpaid Drawings shall be
made free and clear of and without deduction for any present or future taxes,
levies, imposts, deductions, charges, or withholdings, and all liabilities with
respect thereto, excluding taxes imposed on the net income of any Bank or
Issuing Bank and all income and franchise taxes applicable to any Bank or
Issuing Bank of the United States (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings, and liabilities being hereinafter
referred to as “Taxes”).  If any Borrower
shall be required by Law to deduct any Taxes from or in respect of any sum
payable hereunder or

 42
 

under any Note or for Unpaid
Drawings, (i) the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 4.07(a)) each Bank or Issuing Bank
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the applicable Borrower shall make such
deductions, and (iii) the applicable Borrower shall timely pay the full
amount deducted to the relevant tax authority or other authority in accordance
with applicable Law.

(b)           Stamp
Taxes.  In addition, each Borrower
agrees to pay any present or future stamp or documentary taxes or any other
excise or property taxes, charges, or similar levies which arise from any
payment made by such Borrower hereunder or from the execution, delivery, or
registration of, or otherwise with respect to, this Agreement or any Note
executed and delivered by such Borrower (hereinafter referred to as “Other
Taxes”).

(c)           Indemnification
for Taxes Paid by a Bank.  Each
Borrower, with respect to Loans incurred or requests therefor made by such
Borrower, shall indemnify each Bank for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 4.07(c)) paid by any Bank
and any liability (including penalties, interest, and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted.  This
indemnification shall be made within 30 days from the date a Bank makes written
demand therefor.

(d)           Certificate.  Within 30 days after the date of any payment
of any Taxes by any Borrower, the applicable Borrower shall furnish to each
Bank, at its address referred to herein, the original or a certified copy of a
receipt evidencing payment thereof.

(e)           Survival.  Without prejudice to the survival of any
other agreement of the Borrowers hereunder, the agreements and obligations of
the Borrowers contained in this Section 4.07 shall survive the payment in
full of principal and interest hereunder and under any instrument delivered
hereunder.

Section 4.08  Judgment
Currency.  (a)  Currency Conversion Procedures for
Judgments.  If for the purposes of
obtaining judgment in any court it is necessary to convert a sum due hereunder
or under a Note in any currency (the “Original Currency”) into another currency
(the “Other Currency”), the parties hereby agree, to the fullest extent
permitted by Law, that the rate of exchange used shall be that at which in
accordance with normal banking procedures each Bank could purchase the Original
Currency with the Other Currency after any premium and costs of exchange on the
Business Day preceding that on which final judgment is given.

(b)           Indemnity
in Certain Events.  The obligation of
each Borrower in respect of any sum due from such Borrower to any Bank
hereunder shall, notwithstanding any judgment in an Other Currency, whether
pursuant to a judgment or otherwise, be discharged only to the extent that, on
the Business Day following receipt by any Bank of any sum adjudged to be so due
in such Other Currency, such Bank may in accordance with normal banking
procedures purchase the Original Currency with such Other Currency.  If the amount of the Original Currency so

 43
 

purchased is less than the
sum originally due to such Bank in the Original Currency, each Borrower agrees,
with respect to Loans incurred and requests therefor made by such Borrower, as
a separate obligation and notwithstanding any such judgment or payment, to
indemnify such Bank against such loss.

Section 4.09  Notes,
Maturity.  The Revolving Credit Loans
made by each Bank shall be evidenced by a Revolving Credit Note in the form of Exhibit 1.01(R).  Notwithstanding anything to the contrary
contained elsewhere in this Agreement, all outstanding Revolving Credit Loans
shall be repaid in full on the Expiration Date.

Section 4.10  Mandatory
Prepayments.  (a)  If on any date (including, without
limitation, (i) any date on which Dollar Equivalents are determined and (ii)
the Expiration Date) the sum of the aggregate outstanding Principal Amount of
Revolving Credit Loans and Bid Loans plus the Letter of Credit Outstandings
(all the foregoing, collectively, the “Aggregate Outstandings”) exceeds the
Commitments as then in effect, Holdings, the Company, AGRI, AGRO and/or the UK
Borrower (as they shall determine) shall repay no later than the next following
Business Day the principal amount of Revolving Credit Loans in an aggregate
Principal Amount equal to such excess. 
If, after giving effect to the prepayment of all outstanding Revolving
Credit Loans as set forth above, the remaining Aggregate Outstandings exceed
the Commitments, Holdings, the Company, AGRI, AGRO and/or the UK Borrower (as
they shall determine) shall repay on such date the principal of Bid Loans in an
aggregate amount equal to such excess. 
If, after giving effect to the prepayment of all outstanding Revolving
Credit loans and Bid Loans as set forth above, the remaining Aggregate
Outstandings exceed the Commitment, the Borrowers shall (i) establish an
account in the name and for the benefit of the Agent, as Agent for the Banks
(the “Cash Collateral Account”), (ii) enter into a control agreement over such
Cash Collateral Account satisfactory to the Agent, and (iii) fund the Cash
Collateral Account with cash to be held as security for the Borrowers’
reimbursement obligations in respect of Letters of Credit then outstanding,
equal to the Letter of Credit Outstandings in excess of the Commitment at such
time.  In addition, at all times on and
after the 90th day prior to the Expiration Date and
continuing until all Letters of Credit have been terminated and all Obligations
paid in full, the Borrowers will maintain in the Cash Collateral Account an
amount of cash equal to the Letter of Credit Outstandings at such time.

(b)           If
on any date (including, without limitation, any date on which Dollar
Equivalents are determined) the aggregate Principal Amount of Revolving Credit
Loans and Bid Loans incurred by the UK Borrower plus the Letter of Credit
Outstandings in respect of Letters of Credit issued for the account of the UK
Borrower exceeds $20,000,000, the UK Borrower shall repay no later than the
next following Business Day the principal amount of Revolving Credit Loans in
an aggregate Principal Amount equal to such excess.  If, after giving effect to the repayment of
all outstanding Revolving Credit Loans incurred by the UK Borrower as set forth
above, the sum of the outstanding Bid Loans incurred by the UK Borrower plus
the Letter of Credit Outstandings in respect of Letters of Credit issued for
the account of the UK Borrower exceeds $20,000,000, the UK Borrower shall repay
on such date the principal of Bid Loans in an aggregate amount equal to such
excess.  If, after giving effect to the
repayment of all Revolving Credit Loans and Bid Loans incurred by the UK
Borrower as set forth above, the Letter of Credit Outstandings in respect of
Letters of Credit issued for the account of the UK Borrower exceed $20,000,000,
the UK Borrower shall on such day (i) establish a Cash Collateral Account,

 44
 

(ii) enter into a
control agreement over such Cash Collateral Account satisfactory to the Agent
and (iii) fund such Cash Collateral Account with cash to be held as security
for the UK Borrower’s reimbursement obligations in respect of Letters of
Credit equal to such excess.

(c)           If
on any date (including, without limitation, any date on which Dollar
Equivalents are determined) the aggregate outstanding Principal Amount of
Revolving Credit Loans and Bid Loans incurred by any of Holdings, AGRI or AGRO
plus the Letter of Credit Outstandings in respect of Letters of Credit issued
for the account of all of such Borrowers exceeds the Holdings Sub-Limit,
Holdings, AGRI and/or AGRO shall repay no later than the next following
Business Day the principal amount of Revolving Credit Loans in an aggregate
Principal Amount equal to such excess. 
If, after giving effect to the repayment of all outstanding Revolving
Credit Loans incurred by Holdings, AGRI and AGRO plus the Letter of Credit
Outstandings in respect of Letter of Credit issued for the account of such
Borrowers, in the aggregate, exceeds the Holdings Sub-Limit, Holdings, AGRI
and/or AGRO shall repay on such date the principal of Bid Loans in an aggregate
amount equal to such excess.  If, after
giving effect to the repayment of all Revolving Credit Loans and Bid Loans
incurred by Holdings, AGRI and AGRO, in the aggregate, as set forth above, the
Letter of Credit Outstandings in respect of Letters of Credit issued for the
account of such Borrowers, in the aggregate, exceeds the Holdings Sub-Limit,
Holdings, AGRI and/or AGRO shall on such day (i) establish a Cash Collateral
Account, (ii) enter into a control agreement over such Cash Collateral Account
satisfactory to the Agent and (iii) fund such Cash Collateral Account with cash
to be held as security for such Borrowers’ reimbursement obligations in respect
of Letters of Credit equal to such excess.

(d)           If
on any date (including, without limitation, any date on which Dollar
Equivalents are determined) the Letter of Credit Outstandings exceed
$100,000,000, the Borrowers shall (i) establish a Cash Collateral Account, (ii)
enter into a control agreement over such Cash Collateral Account satisfactory
to the Agent and (iii) fund such Cash Collateral Account with cash to be held
as security for the Borrowers’ reimbursement obligations in respect of Letters
of Credit equal to such excess.

ARTICLE V

REPRESENTATIONS AND
WARRANTIES

Section 5.01  Representations
and Warranties.  Each Borrower
represents and warrants (in each case solely as to itself and its Subsidiaries)
to the Agent and each of the Banks as follows:

(a)           Organization
and Qualification.  Such Borrower is
a corporation duly incorporated, validly existing, and in good standing under
the laws of its jurisdiction of organization. 
Such Borrower has the lawful power to own or lease its properties and to
engage in the business it presently conducts. 
Such Borrower is duly licensed or qualified and in good standing in each
jurisdiction where the property owned or leased by it or the nature of the
business transacted by it or both makes such licensing or qualification
necessary.

 45
 

 

(b)           Capitalization
and Subsidiaries.  As of the Closing
Date, Holdings has no Subsidiaries other than those Subsidiaries listed on Schedule
5.01(b).  Assured Value Insurance
Company is an inactive corporation having no material liabilities or
Indebtedness.  All of the issued and
outstanding share capital of Holdings has been validly issued and is fully paid
and nonassessable.

(c)           Power
and Authority.  Such Borrower has
full power to enter into, execute, deliver, and carry out this Agreement and
the other Loan Documents to which it is a party, to incur the Indebtedness
contemplated by the Loan Documents, and to perform its Obligations under the
Loan Documents to which it is a party, and all such actions have been duly
authorized by all necessary proceedings on its part.

(d)           Validity
and Binding Effect.  This Agreement
has been duly and validly executed and delivered by such Borrower, and each
other Loan Document which such Borrower is required to execute and deliver as
of the date hereof has been duly executed and delivered by such Borrower.  Assuming the due execution and delivery by
Agent and the Banks of those Loan Documents to which they are a party, this
Agreement and each other Loan Document to which such Borrower is a party
constitute the legal, valid and binding obligations of such Borrower on and
after its date of delivery thereof, enforceable against such Borrower in
accordance with its terms, except to the extent that enforceability of any of such
Loan Document may be limited by bankruptcy, insolvency, reorganization,
moratorium, or other similar laws affecting the enforceability of creditors’
rights generally or limiting the right of specific performance.

(e)           No
Conflict.  Neither the execution and
delivery of this Agreement or the other Loan Documents by such Borrower nor the
consummation of the transactions herein or therein contemplated or compliance
with the terms and provisions hereof or thereof will conflict with, constitute
a default under or result in any breach of (i) the terms and conditions of
the certificate or articles of incorporation, bylaws, memorandum of association
or other organizational or constitutional documents of such Borrower, or
(ii) any Law or any material agreement or instrument or order, writ,
judgment, injunction, or decree to which such Borrower is a party or by which
it is bound or to which it is subject, or result in the creation or enforcement
of any Lien, charge or encumbrance whatsoever upon any property (now or hereafter
acquired) of such Borrower (other than Permitted Liens).

(f)            Litigation.  Except as disclosed under the Legal
Proceedings heading of the Annual Report on Form 10-K filed by Holdings with
the SEC on March 2, 2006, there are no actions, suits, proceedings, or
investigations pending or, to the knowledge of such Borrower, threatened
against such Borrower at law or in equity before any Official Body which
individually or in the aggregate may result in any Material Adverse Change.  Such Borrower is not in violation of any
order, writ, injunction, or any decree of any Official Body which may result in
any Material Adverse Change.

(g)           Title
to Properties.  Such Borrower has
good and marketable title to or valid leasehold interests in all properties,
assets, and other rights which it purports to own or lease or which are
reflected as owned or leased on its books and records, free and clear

 46
 

of all Liens and
encumbrances except Permitted Liens.  All
leases of property are in full force and effect and are subject only to the
terms and conditions of the applicable leases.

(h)           Financial Statements, Reinsurance Coverage.

(A)          Historical Statements.  The Company has delivered to the Agent copies
of its audited consolidated year-end financial statements for and as of the end
of the three (3) fiscal years ended December 31, 2003, 2004 and 2005 (the “Historical
Statements”).  The Historical Statements
were compiled from the books and records maintained by the Company’s
management, are correct and complete and fairly represent the consolidated
financial condition of the Company and its Subsidiaries as of their dates and
the results of operations for the fiscal periods then ended and have been
prepared in accordance with GAAP and statutory requirements consistently applied.

(B)           Accuracy of Financial Statements.  As of the Closing Date, neither the Company
nor any Subsidiary of the Company has any liabilities, contingent or otherwise,
or forward or long-term commitments or Off-Balance Sheet Transactions that are
not disclosed in the Historical Statements or in the notes thereto, and except
as disclosed therein there are no unrealized or anticipated losses from any
commitments of the Company or any Subsidiary of the Company which may cause a
Material Adverse Change.  Since December 31,
2005, no Material Adverse Change
has occurred.

(C)           Reinsurance Coverage.  The Company has delivered Schedule 5.01(h)
to the Agent setting forth the amount, terms, and provider(s) to the Company of
reinsurance and the extent of the Company’s insurance or reinsurance exposure
covered thereby; as of December 31, 2005, Schedule 5.01(h) is
correct and complete and fairly represents the reinsurance coverage pertaining
to the business of the Company and its Subsidiaries (“Existing Reinsurance
Coverage”).

(i)            Use
of Proceeds; Margin Stock.  Such
Borrower intends to use the proceeds of the Loans and Letters of Credit in
accordance with Section 2.07 and Section 7.01(j).  Such Borrower does not engage or intend to engage
principally, or as one of its important activities, in the business of
extending credit for the purpose, immediately, incidentally or ultimately, of
purchasing or carrying margin stock (such term used herein within the meaning
of Regulation U).  No part of the
proceeds of any Loan has been or will be used, immediately, incidentally or
ultimately, to purchase or carry any margin stock or to extend credit to others
for the purpose of purchasing or carrying any margin stock or to refund
Indebtedness originally incurred for such purpose, or for any purpose which
entails a violation of or which is inconsistent with the provisions of the
regulations of the Board of Governors of the Federal Reserve System.  Such Borrower does not hold or intend to hold
margin stock in such amounts that more than 25% of the reasonable value of its
assets are or will be represented by margin stock.

 47
 

 

(j)            Full
Disclosure.  Neither this Agreement
nor any other Loan Document, nor any certificate, statement, agreement, or
other document furnished to the Agent or any Bank by either of Holdings or the
Company in connection herewith or therewith, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein, in light of the circumstances under
which they were made, not misleading. 
There is no fact known to either of Holdings or the Company which
materially adversely affects the business, property, assets, financial
condition, results of operations, or prospects of Holdings and its Subsidiaries
taken as a whole or the Company and its Subsidiaries taken as a whole which has
not been set forth in this Agreement or in the certificates, statements,
agreements, or other documents furnished in writing to the Agent and the Banks
by either Holdings or the Company prior to or at the date hereof in connection
with the transactions contemplated hereby.

(k)           Taxes.  All federal, state, local, and other tax
returns required to have been filed with respect to such Borrower have been
filed, and payment or adequate provision has been made for the payment of all
taxes, fees, assessments, and other governmental charges which have or may
become due pursuant to said returns or to assessments received, except to the
extent that such taxes, fees, assessments, and other charges are being
contested in good faith by appropriate proceedings diligently conducted and for
which such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made.  There
are no agreements or waivers extending the statutory period of limitations
applicable to any federal income tax return of such Borrower for any period.

(l)            Consents
and Approvals.  No consent, approval,
exemption, order, or authorization of, or a registration or filing with, any
Official Body or any other Person is required by any Law or any agreement in
connection with the execution, delivery, or carrying out of this Agreement or
any of the other Loan Documents by such Borrower, except such as have been
obtained or made on or prior to the Closing Date.

(m)          No
Event of Default; Compliance With Instruments.  No event has occurred and is continuing and
no condition exists or will exist after giving effect to the borrowings or
other extensions of credit to be made under or pursuant to the Loan Documents
which constitutes an Event of Default or Potential Default.  Such Borrower is not in violation of
(i) any term of its certificate or articles of incorporation, bylaws,
memorandum of association or other organizational or constitutional documents or
(ii) any material agreement or instrument to which it is a party or by
which it or any of its properties may be subject or bound, in each such case
where such violation would constitute a Material Adverse Change.

(n)           Licenses, Etc.  Such Borrower owns or possesses all the
material licenses, registrations, franchises, permits, and rights necessary to
own and operate its properties and to carry on its business as presently
conducted by such Borrower, without conflict with the rights of others.

 

 48

 

(o)           Insurance.  No notice has been given or claim made and no
grounds exist to cancel or avoid any insurance policy or bond in favor of such
Borrower or any of its property, or to reduce the coverage provided thereby.  Such policies and bonds provide adequate
coverage from reputable and financially sound insurers in amounts sufficient to
insure the assets and risks of such Borrower in accordance with prudent
business practice in the industry of such Borrower.

(p)           Compliance
With Laws.  Such Borrower is in compliance
in all material respects with all applicable Laws in all jurisdictions in which
such Borrower is doing business, except where the failure to do so would not
constitute a Material Adverse Change.

(q)           Material
Contracts; Burdensome Restrictions.  All
material contracts relating to the business operations of such Borrower are
valid, binding, and enforceable upon such Borrower and, to the knowledge of
such Borrower, each of the other parties thereto in accordance with their
respective terms, and there is no default thereunder, to such Borrower’s
knowledge, with respect to parties other than such Borrower.  Such Borrower is not bound by any contractual
obligation, or subject to any restriction in any organizational document or any
requirement of Law, which in and of itself is material and adverse to such
Borrower.

(r)            Investment
Companies; Regulated Entities.  Such
Borrower is not an “investment company” registered or required to be registered
under the Investment Company Act of 1940 or under the “control” of an “investment
company” as such terms are defined in the Investment Company Act of 1940 and
shall not become such an “investment company” or under such “control.”  Such Borrower is not subject to any other
Federal or state statute or regulation limiting its ability to incur
Indebtedness for borrowed money.

(s)           Plans
and Benefit Arrangements.  To the
extent of any Benefit Arrangement, Plan or Multiemployer Plan in place during
the term of this Agreement, Holdings and each other member of the ERISA Group
are in compliance in all material respects with any applicable provisions of
ERISA with respect to all Benefit Arrangements, Plans, and Multiemployer
Plans.  There has been no Prohibited
Transaction with respect to any Benefit Arrangement or any Plan or, to the best
knowledge of the Borrowers, with respect to any Multiemployer Plan or Multiple
Employer Plan, which could result in any material liability of Holdings or any
other member of the ERISA Group.  To the
extent of any Benefit Arrangement, Plan or Multiemployer Plan in place during
the term of this Agreement, Holdings and all other members of the ERISA Group
have made when due any and all payments required to be made under any agreement
relating to a Multiemployer Plan or a Multiple Employer Plan or any Law
pertaining thereto.  With respect to each
Plan and Multiemployer Plan, if any, Holdings and each other member of the
ERISA Group (i) have fulfilled in all material respects their obligations
under the minimum funding standards of ERISA, (ii) have not incurred any
liability to the PBGC other than PBGC premiums due but not delinquent under
Section 4007 of ERISA, and (iii) have not had asserted against them any
penalty for failure to fulfill the minimum funding requirements of ERISA.  All Plans, Benefit

 49
 

Arrangements and
Multiemployer Plans, if any, have been administered in accordance with their
terms and applicable Law.

Holdings
and each other member of the ERISA Group are in compliance in all material
respects with any applicable provisions of ERISA with respect to all Benefit
Arrangements, Plans, and Multiemployer Plans, if any.  There has been no Prohibited Transaction with
respect to any Benefit Arrangement or any Plan or, to the best knowledge of
Holdings, with respect to any Multiemployer Plan or Multiple Employer Plan,
which could result in any material liability of Holdings or any other member of
the ERISA Group.  To the extent of any
Benefit Arrangement, Plan or Multiemployer Plan in place during the term of
this Agreement, Holdings and all other members of the ERISA Group have made
when due any and all payments required to be made under any agreement relating
to a Multiemployer Plan or a Multiple Employer Plan or any Law pertaining
thereto.  With respect to each Plan and
Multiemployer Plan, if any, Holdings and each other member of the ERISA Group
(i) have fulfilled in all material respects their obligations under the
minimum funding standards of ERISA, (ii) have not incurred any liability
to the PBGC other than PBGC premiums due but not delinquent under Section 4007
of ERISA, and (iii) have not had asserted against them any penalty for
failure to fulfill the minimum funding requirements of ERISA.  All Plans, Benefit Arrangements and
Multiemployer Plans have been administered in accordance with their terms and
applicable Law.

(A)             No event requiring notice to the PBGC under
Section 302(f)(4)(A) of ERISA has occurred or is reasonably expected to
occur with respect to any Plan, and no amendment with respect to which security
is required under Section 307 of ERISA has been made or is reasonably
expected to be made to any Plan.

(B)             Neither Holdings nor any other member of the ERISA Group
has incurred or reasonably expects to incur any material withdrawal liability
under ERISA to any Multiemployer Plan or Multiple Employer Plan.  Neither Holdings nor any other member of the
ERISA Group has been notified by any Multiemployer Plan or Multiple Employer
Plan that such Multiemployer Plan or Multiple Employer Plan has been terminated
within the meaning of Title IV of ERISA and, to the best knowledge of
Holdings, no Multiemployer Plan or Multiple Employer Plan is reasonably
expected to be reorganized or terminated, within the meaning of Title IV
of ERISA.

(t)            Senior
Debt Status.  The Obligations of such
Borrower under this Agreement and each of the other Loan Documents to which it
is a party do rank and will rank at least pari  passu in priority
of payment with all other Indebtedness of the such Borrower except (i)
Indebtedness of such Borrower to the extent secured by Permitted Liens, and
(ii) Indebtedness which constitutes a “preferred claim” under Section 9-227 of
the Maryland Insurance Law (or any analogous provision of United Kingdom or
Bermuda law) in the event of the liquidation, rehabilitation, reorganization,
or conservation of the such Borrower. 
There is no Lien upon or with respect to any of the properties or income
of such Borrower which secures indebtedness or other obligations of any Person
except for Permitted Liens.

 50
 

 

(u)           Holdings.  Holdings was created on August 21, 2003 for
the purpose of holding the capital stock of the Company and its other
subsidiaries (but it is recognized that Holdings has the corporate capacity to
carry on other business under the objects expressed in its Memorandum of Association).

Section 5.02  Continuation of Representations.  Each Borrower makes the representations and
warranties in this ARTICLE V on the date hereof and on the Closing Date and
each date thereafter on which a Loan is made to such Borrower or a Letter of
Credit is issued for the account of such Borrower as provided in and subject to
Section 6.01 and Section 6.02.

ARTICLE VI

CONDITIONS OF LENDING

The obligation of each Bank
to make Loans hereunder and the obligation of each Issuing Bank to issue
Letters of Credit hereunder is subject to the performance by the Borrowers of
their Obligations to be performed hereunder at or prior to the occurrence of
each such Credit Event, and to the satisfaction of the following further
conditions:

Section 6.01  Closing
Date.  The Closing Date shall occur
when the following conditions have been satisfied:

(a)           Representations
and Warranties True and Complete, No Defaults.  The representations and warranties of the
Borrowers contained in Article V shall be true, complete, and accurate on and
as of the Closing Date with the same effect as though such representations and
warranties had been made on and as of such date (except representations and
warranties which relate solely to an earlier date or time, which
representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein), and the Borrowers shall have
performed and complied with all covenants and conditions hereof and thereof, no
Event of Default or Potential Default shall have occurred and be continuing.

(b)           Secretary’s Certificate.  There shall be delivered to the Agent for the
benefit of each Bank certificates dated the Closing Date and signed by the
Secretary or an Assistant Secretary of Holdings, the Company, AGRI, AGRO and
the UK Borrower certifying as appropriate as to:

(i)            resolutions
approving all actions taken by Holdings, the Company, AGRI, AGRO and the UK
Borrower in connection with this Agreement and the other Loan Documents;

(ii)           the
names of the officer or officers authorized to sign this Agreement and the
other Loan Documents and the true signatures of such officer or officers and
specifying certain Authorized Officers of Holdings, the Company, AGRI, AGRO and
the UK Borrower for purposes of this Agreement and the true signatures of such
officers, on which the Agent and each Bank may conclusively rely; and

 51
 

 

(iii)          copies
of its organizational or constitutional documents, including its certificate or
articles of incorporation and bylaws as in effect on the Closing Date, certified
as true and correct, together with certificates from the appropriate state
officials as to the continued existence and good standing of Holdings, the
Company, AGRI, AGRO and the UK Borrower in each jurisdiction where organized to
the extent applicable.

(c)           Delivery
of Notes, Guaranty Agreements, and Loan Request.  The Notes, the Guaranty Agreement to be
entered into by Holdings, the Guaranty Agreement to be entered into by the
Company and the Guaranty Agreement to be entered into by the Material Non-AGC
Subsidiaries shall have been duly executed and delivered to the Agent for the
benefit of the Banks.

(d)           Opinion
of Counsel.  There shall be delivered
to the Agent for the benefit of each Bank party hereto on the Closing Date one
or more written opinions of counsel for Holdings, the Company, AGRI, AGRO and
the UK Borrower dated the Closing Date and in form and substance satisfactory
to the Agent and its counsel:

(i)            as
to the matters set forth in Exhibit 6.01(d); and

(ii)           as
to such other matters incident to the transactions contemplated herein as the
Agent may reasonably request.

(e)           Legal
Details.  All legal details and
proceedings in connection with the transactions contemplated by this Agreement
and the other Loan Documents shall be in form and substance satisfactory to the
Agent and counsel for the Agent, and the Agent shall have received all such
other counterpart originals or certified or other copies of such documents and
proceedings in connection with such transactions, in form and substance satisfactory
to the Agent and said counsel, as the Agent or said counsel may reasonably
request.

(f)            Payment
of Fees.  The Borrowers shall have
paid or caused to be paid to the Agent for itself and for the account of the
Banks to the extent not previously paid the Facility Fees, all other fees
accrued through the Closing Date and the costs and expenses for which the Agent
and the Banks are entitled to be reimbursed.

(g)           No
Material Adverse Change.  There has
not occurred a Material Adverse Change since the date of the Historical
Statements.

(h)           Existing
Agreement.  The commitments under the
Existing Credit Agreement shall have been terminated, all loans thereunder
shall have been repaid in full, together with all accrued and unpaid interest
thereon, all accrued and unpaid fees thereon shall have been paid in full, and
all other amounts then owing pursuant to the Existing Credit Agreement shall
have been repaid in full, and the Agent shall have received evidence in form,
scope and substance reasonably satisfactory to it that the matters set forth in
this Section 6.01(h) have been satisfied at such time.

Section 6.02  Each Credit Event.  At the time of each Credit Event, and after

 52
 

giving
effect to the proposed extensions of credit: 
the Closing Date shall have occurred; the representations and warranties
of the Borrowers contained in ARTICLE V and in the other Loan Documents and the
representations and warranties of each Material Non-AGC Subsidiary contained or
incorporated in the Guarantor Joinder given by such Material Non-AGC Subsidiary
pursuant to Section 10.18 shall be true on and as of the date of such
additional Loan with the same effect as though such representations and
warranties had been made on and as of such date (except representations and
warranties which expressly relate solely to an earlier date or time, which
representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein) and the Borrowers shall have
performed and complied with all covenants and conditions hereof that are
required to be performed or complied with as of the date of such Credit Event
and each Material Non-AGC Subsidiary shall have complied with Section 10.18 and
all other covenants and conditions that are required to be performed or
complied with as of the date of such Loan and which are set forth in or
incorporated into the Guarantor Joinder given by such Material Non-AGC
Subsidiary pursuant to Section 10.18; no Event of Default or Potential Default
shall have occurred and be continuing or shall exist; and the applicable
Borrower shall have delivered to the Agent a duly executed and completed Loan
Request.

ARTICLE VII

COVENANTS

Section 7.01  Affirmative
Covenants.  Subject to Section 7.04,
each Borrower covenants and agrees (in each case solely on behalf of itself and
its Subsidiaries) that, until payment in full of the Loans, and interest
thereon, satisfaction of all of the other Obligations under the Loan Documents,
expiration of all Letters of Credit and termination of the Commitments, each
Borrower shall comply at all times with the following affirmative covenants:

(a)           Preservation
of Existence, Etc.  Holdings shall,
and shall cause each of its Material Subsidiaries to, maintain its legal
existence as a corporation, limited partnership, or limited liability company
and its license or qualification and good standing in each jurisdiction in
which its ownership or lease of property or the nature of its business makes
such license or qualification necessary, except as otherwise expressly
permitted in Section 7.02(f) [Liquidations, Mergers, Etc.].

(b)           Payment
of Liabilities, Including Taxes, Etc. 
Holdings shall, and shall cause each of its Material Subsidiaries to,
duly pay and discharge all liabilities to which it is subject or which are
asserted against it, promptly as and when the same shall become due and
payable, including all taxes,  assessments,
and governmental charges upon it or any of its properties, assets, income or
profits, prior to the date on which penalties attach thereto, except to the
extent that such liabilities, including taxes, assessments or charges, are
being contested in good faith and by appropriate and lawful proceedings
diligently conducted and for which such reserve or other appropriate
provisions, if any, as shall be required by GAAP shall have been made, provided
that Holdings will pay, and cause its Material Subsidiaries to pay, all such
liabilities forthwith upon the commencement of proceedings to foreclose any
Lien which may have attached as security therefor.

 53
 

 

(c)           Maintenance
of Insurance.  Holdings shall, and
shall cause each of its Material Subsidiaries to, insure its properties and
assets against loss or damage by insurable hazards as such assets are commonly
insured (including, to the extent applicable to the respective industry of
Holdings or any Subsidiary thereof, fire, extended coverage, property damage,
workers’ compensation, public liability, and business interruption insurance)
and against other risks (including errors and omissions) in such amounts as
similar properties and assets are insured by prudent companies in similar
circumstances carrying on similar businesses, and with reputable and
financially sound insurers, including self-insurance to the extent customary.

(d)           Maintenance
of Properties and Leases.  Holdings
shall, and shall cause each of its Material Subsidiaries to, maintain in good
repair, working order, and condition (ordinary wear and tear excepted) in
accordance with the general practice of other businesses of similar character
and size, all of those properties useful or necessary to its business, and from
time to time Holdings will make or cause to be made all appropriate repairs,
renewals, or replacements thereof.

(e)           Maintenance
of Licenses, Etc.  Holdings shall,
and shall cause each of its Material Subsidiaries to, maintain in full force
and effect all licenses, franchises, permits, rights, and other authorizations
necessary for the ownership and operation of its properties and business if the
failure so to maintain the same would constitute a Material Adverse Change.

(f)            Visitation
Rights.  Holdings shall, and shall
cause each of its Material Subsidiaries to, permit any of the officers or
authorized employees or representatives of the Agent or any Bank to visit and
inspect any of its properties and to examine and make excerpts from its books
and records and discuss its business affairs, finances and accounts with its
officers, all in such detail and at such times and as often as the Agent or any
such Bank may reasonably request and at the pro  rata expense of
the Banks (if requested by the Required Banks), the requesting Bank or, if the
request has not come from any Bank, the Agent, provided that the Agent
or such Bank shall provide the Company with reasonable notice prior to any visit
or inspection, provided further no Bank shall be permitted more than one
visit per one year period and provided  further that during the
continuation of any Event of Default, (i) the limitation on visits in the
immediately preceding proviso shall not apply and (ii) all such visits and
inspections by Agent and or Bank shall be at the expense of the Borrowers.  In the event any Bank desires to conduct a
visitation or inspection as contemplated hereby of Holdings or any Subsidiary,
such Bank shall make a reasonable effort to conduct such visitation and
inspection contemporaneously with any visitation or inspection to be performed
by the Agent.

(g)           Keeping
of Records and Books of Account. 
Holdings shall, and shall cause each Subsidiary of Holdings to, maintain
and keep proper books of record and account which enable Holdings and its
Material Subsidiaries to issue financial statements in accordance with GAAP and
as otherwise required by applicable Laws of any Official Body having
jurisdiction over Holdings or any Subsidiary of Holdings, and in which full,
true and correct entries shall be made in all material respects of all its
dealings and business and financial affairs.

 54
 

 

(h)           Plans
and Benefit Arrangements.  Holdings
shall, and shall cause each other member of the ERISA Group to, comply with
ERISA, the Internal Revenue Code and other Laws applicable to any Plans and
Benefit Arrangements except where such failure, alone or in conjunction with
any other failure, would not result in a Material Adverse Change.  Without limiting the generality of the
foregoing, Holdings shall cause all of its Plans and all Plans maintained by
any member of the ERISA Group, if any, to be funded in accordance with the
minimum funding requirements of ERISA and, to the extent applicable shall make,
and cause each member of the ERISA Group to make, in a timely manner, all
contributions due to Plans, Benefit Arrangements and Multiemployer Plans.

(i)            Compliance
With Laws.  Holdings shall, and shall
cause each of its Material Subsidiaries to, comply with all applicable Laws in
all respects, provided that it shall not be deemed to be a violation of
this Section 7.01(i) if any failure to comply with any Law would not result in
fines, penalties, remediation costs, other similar liabilities or injunctive
relief which in the aggregate would constitute a Material Adverse Change.

(j)            Use
of Proceeds.  Each Borrower will use
the proceeds of the Loans and Letters of Credit only for the general corporate
purposes and working capital needs of the such Borrower.  No Borrower shall use the proceeds of the
Loans or Letters of Credit for any purposes which contravenes any applicable
Law or any provision hereof.

(k)           Senior
Debt Status.  Holdings shall ensure
that the Obligations of Holdings and any Material Subsidiary under this
Agreement, a Guarantor Joinder, any Guaranty Agreement, and each of the other
Loan Documents to which it is a party shall at all times rank at least pari
passu in priority of payment with all other senior unsecured
Indebtedness of Holdings or such Material Subsidiary (except to the extent of
any Indebtedness which has a “preferred” status under any Law governing the
bankruptcy, liquidation, insolvency, rehabilitation, reorganization,
conservation, or like circumstance of Holdings or such Material Subsidiary) and
no such other senior unsecured Indebtedness of Holdings or such Material
Subsidiary shall at any time be governed by or subject to covenants, defaults,
or other provisions that are more restrictive on Holdings or such Material Subsidiary
than those set forth herein; and provided that if payment of any present
or future Indebtedness of Holdings or any Material Subsidiary, except
Indebtedness of Holdings or any Material Subsidiary to the extent secured by
Permitted Liens, shall at any time hereafter become secured by any Lien on any
property, Holdings or such Material Subsidiary shall secure payment of the
Obligations with a Lien of like priority on the same or substantially similar
property of the same or greater value (but, in any event, such Lien shall
secure an amount of Obligations not to exceed the amount secured by the Lien
given to secure payment of such other Indebtedness).

(l)            Company
Consolidated Assets.  If at any time
the Company Consolidated Assets is less than $1,200,000,000, within 15 days
following such occurrence Holdings will enter into a Guaranty Agreement in form
and substance satisfactory to the Agent pursuant to which Holdings will
unconditionally and irrevocably guaranty all Obligations of the Company and the
UK Borrower.

 55
 

Section 7.02  Negative
Covenants.  Subject to Section 7.04,
each Borrower covenants and agrees (in each case on behalf of itself and its
Subsidiaries) that until payment in full of the Loans and interest thereon,
satisfaction of all of the other Obligations hereunder, expiration of all
Letters of Credit and termination of the Commitments, such Borrower shall
comply with the following negative covenants:

(a)           Indebtedness.  Holdings shall not, and shall not permit any
of its Material Subsidiaries to, at any time create, incur, assume, or suffer
to exist any Indebtedness, except:

(i)            Indebtedness
under the Loan Documents;

(ii)           Existing
Indebtedness as set forth on Schedule 7.02(a) (including any
extensions or renewals thereof, provided there is no increase in the
amount thereof or other significant change in the terms thereof unless
otherwise specified on Schedule 7.02(a);

(iii)          Capitalized
leases;

(iv)          Indebtedness
secured by Purchase Money Security Interests;

(v)           Indebtedness
of Holdings or any Material Subsidiary to the Company or any other Material
Subsidiary, or any of their respective Affiliates;

(vi)          Any
Interest Rate Hedge;

(vii)         Any
Guaranties permitted pursuant to Section 7.02(c); 

(viii)        Other
Indebtedness of the Company which is non-recourse to the Company and in the
nature (as to its purpose and non-recourse structure) of that existing
Indebtedness in favor of Deutsche Bank shown on Exhibit 7.02(a) (“Soft
Capital”); 

(ix)           Other
Indebtedness of Material Subsidiaries which are regulated insurance companies
consisting of letters of credit, trust accounts and similar collateral support
required in the ordinary course of business either by statute or by rating
agencies to support the insurance and/or reinsurance businesses of such
Material Subsidiaries;

(x)            All
obligations of any Affiliate of Holdings under Guaranteed Investment Contracts
issued by such Person in an aggregate amount of up to $1,000,000,000;

(xi)           Other
Indebtedness of Holdings, US Holdco, AGRI or AGRO from time to time, and Indebtedness
constituting Hybrid Securities from time to time, in each case so long as such
Indebtedness is permitted at such time by the other provisions of this
Agreement; and

 56
 

 

(xii)          Any
obligations pursuant to the Contingent Capital Facility.

(b)           Liens.  Holdings shall not, and shall not permit any
of its Material Subsidiaries to, at any time create, incur, assume, or suffer
to exist any Lien on any of its property or assets, tangible or intangible, now
owned or hereafter acquired, or agree or become liable to do so,  except Permitted Liens.

(c)           Guaranties.  Holdings shall not, and shall not permit any
of its Material Subsidiaries to, at any time, directly or indirectly, become or
be liable in respect of any Guaranty, or assume, guaranty, become surety for,
endorse or otherwise agree, become or remain directly or contingently liable
upon or with respect to any obligation or liability of any other Person, except
for Guaranties of that Indebtedness of Holdings and the Material Subsidiaries,
Guaranties of operating leases of Holdings and the Material Subsidiaries
permitted hereunder and (the following, collectively, “Insurance-Related
Guaranties”):  (i) reinsurance and
insurance agreements and policies and Guaranties which Holdings or any Material
Subsidiary is authorized or licensed to provide in the ordinary course of its
reinsurance or insurance business, (ii) Guaranties given by the Company to
support credit derivative transactions entered into by AG Financial Products
Inc., a Delaware corporation and Affiliate of the Company (“Credit Derivative
Guaranties”), (iii) Guaranties given by the Company to support the obligations
of any Subsidiary of Holdings pursuant to Guaranteed Investment Contracts
issued by such Subsidiary; (iv) keepwell and similar agreements between and
among various Subsidiaries of Holdings, the purpose and effect of which is to
transfer the financial strength ratings of either of the Company or Assured
Guaranty Re Ltd. to its Subsidiaries, and (v) letters of credit, trust accounts
or similar collateral support procured by Subsidiaries of Holdings which are
required in the ordinary course of business either by statute or by rating
agencies in order to support the respective reinsurance or insurance business
of such Subsidiaries.

(d)           Loans
and Investments.  Holdings shall not,
and shall not permit any of its Material Subsidiaries to, at any time make or
suffer to remain outstanding any loan or advance to, or purchase, acquire or
own any stock, bonds, notes or securities of, or any partnership interest
(whether general or limited) or limited liability company interest in, or any
other investment or interest in,  or
make any capital contribution to, any other Person, or agree, become, or remain
liable to do any of the foregoing, except:

(i)            trade
credit extended on usual and customary terms in the ordinary course of
business;

(ii)           advances
to employees to meet expenses incurred by such employees in the ordinary course
of business;

(iii)          Permitted
Investments and Permitted Acquisitions; and

(iv)          loans,
advances and investments in Holdings and any Subsidiary of Holdings; provided that the Company may not make any
loans, advances and investments in Holdings or any Subsidiary of Holdings which
is not a Subsidiary

 57
 

of the Company (other than
any such Subsidiary of Holdings which issues or proposes to issue Guaranteed
Investment Contracts).

(e)           Dividends
and Related Distributions.  Holdings
shall not, and shall not permit any of its Material Subsidiaries to, make or
pay, or agree to become or remain liable to make or pay, any dividend or other
distribution of any nature (whether in cash, property, securities or otherwise)
on account of or in respect of its shares of capital stock, partnership
interests, or limited liability company interests or on account of the purchase,
redemption, retirement, or acquisition of its shares of capital stock (or
warrants, options or rights therefor), partnership interests or limited
liability company interests, except (i) dividends or other distributions
payable to Holdings or any Material Subsidiary, (ii) so long as there shall
exist no Potential Default or Event of Default (both before and after giving
effect to the payment thereof), dividends payable by Holdings, and (iii) so
long as there shall exist no Potential Default or Event of Default (both before
and after giving effect to the payment thereof), the repurchase of shares of
Holdings. 

(f)            Liquidations,
Mergers, Consolidations, Acquisitions. 
Holdings shall not, and shall not permit any of its Material
Subsidiaries to, dissolve, liquidate, or wind-up its affairs, or become a party
to any amalgamation, merger or consolidation, or acquire by purchase, lease, or
otherwise all or substantially all of the assets or capital stock of or other
ownership interest in any other Person, provided that

(1)           any
Material Subsidiary may consolidate, amalgamate or merge into Holdings or any
other Material Subsidiary provided that the Company may not merge,
amalgamate or consolidate with Holdings, and the Company may only merge,
amalgamate or consolidate with another Material Subsidiary if the Company is
the surviving entity of such merger, amalgamation or consolidation; and

(2)           Holdings or any Material Subsidiary may acquire, whether
by purchase, by amalgamation or by merger, (A) all of the ownership
interests of another Person or (B) substantially all of the assets of
another Person or of a business or division of another Person (each a “Permitted
Acquisition”), provided that each of the following requirements is met:

(i)            if
Holdings or any Material Subsidiary is acquiring the ownership interests in
such Person and such Person meets the criteria for a Material Subsidiary set
forth in the definition of such term at Section 1.01, such Person shall execute
a Guarantor Joinder and join this Agreement as a Guarantor pursuant to Section
10.18 [Joinder of Guarantors] on or before the date of such Permitted
Acquisition;

(ii)           the
board of directors or other equivalent governing body of such Person shall have
approved such Permitted Acquisition and Holdings or the relevant Material
Subsidiary shall have delivered to the Banks written evidence of such approval
of the board of directors (or equivalent body) of such Person for such
Permitted Acquisition;

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(iii)          the
business acquired, or the business conducted by the Person whose ownership
interests are being acquired, as applicable, shall be substantially the same
as, or otherwise complementary or related to, one or more lines of business
conducted by Holdings or any Material Subsidiary, or otherwise incidental to
the business of a financial services company, and shall comply with Section
7.02(j) [Continuation of or Change in Business];

(iv)          no
Potential Default or Event of Default shall exist immediately prior to and
after giving effect to such Permitted Acquisition; and

(v)           upon
the reasonable request of Agent, Holdings or the relevant Material Subsidiary
shall deliver to the Agent at least five (5) Business Days before such
Permitted Acquisition such information about such Person or its assets as Agent
may reasonably require.

(g)           Dispositions
of Assets or Subsidiaries.  Holdings
shall not, and shall not permit any of its Material Subsidiaries to, sell,
convey, assign, lease, abandon, or otherwise transfer or dispose of,
voluntarily or involuntarily, any of its properties or assets, tangible or
intangible (including by sale, assignment, discount, or other disposition of
accounts, contract rights, chattel paper, equipment, or general intangibles
with or without recourse or of capital stock, shares of beneficial interest,
partnership interests or limited liability company interests of a Subsidiary of
Holdings), except:

(i)            transactions
involving the sale of inventory, if any, in the ordinary course of business;

(ii)           any
sale, transfer, or lease of assets, including any sale of investment assets, in
the ordinary course of business which are no longer necessary or required in
the conduct of Holdings’ or such Subsidiary’s business or which are incidental
to the management of Holdings’ or its Subsidiary’s investment portfolio in a
manner consistent with past practices;

(iii)          any
sale, transfer, lease or assignment of assets or novation of rights by any
wholly owned Subsidiary of Holdings to Holdings or any Material Subsidiary;

(iv)          any
sale, transfer or lease of assets in the ordinary course of business which are
replaced by reasonably equivalent substitute assets; or

(v)           any
sale, transfer or lease of assets, other than those specifically excepted
pursuant to clauses (i) through (iv) above, provided that (A) at
the time of any disposition, no Event of Default shall exist or shall result
from such disposition, and (B) the aggregate value of all assets so sold
by (x) Holdings shall not exceed in any fiscal year fifteen percent (15%) of
the consolidated tangible net worth of Holdings and its

 59
 

Subsidiaries or (y) any
Material Subsidiary in any fiscal year shall not exceed a material portion of
such Material Subsidiary’s tangible net worth.

(h)           Affiliate
Transactions.  Holdings shall not,
and shall not permit any of its Material Subsidiaries to, enter into or carry
out any transaction (including purchasing property or services from or selling
property or services to any Affiliate of Holdings or any Material Subsidiary or
other Person) unless such transaction is not otherwise prohibited by this
Agreement, is entered into upon fair and reasonable arm’s-length terms and
conditions which are fully disclosed to the Agent, and is in accordance with
all applicable Law and accounting standards.

(i)            Subsidiaries,
Partnerships and Joint Ventures. 
Holdings shall not, and shall not permit any of its Material
Subsidiaries to, own, acquire, or create directly or indirectly any Material
Non-AGC Subsidiary other than Material Non-AGC Subsidiaries each of which has
joined this Agreement as a Guarantor at any time after the Closing Date in
accordance with Section 10.18 [Joinder of Guarantors].  Each of Holdings and its Material
Subsidiaries shall not become or agree to become (1) a general or limited
partner in any general or limited partnership, except that Holdings or any of
its Material Subsidiaries may be general or limited partners in any other
Material Subsidiary, (2) a member or manager of, or hold a limited liability
company interest in, a limited liability company, except that Holdings or any of
its Material Subsidiaries may be members or managers of, or hold limited
liability company interests in, other Material Subsidiaries, or (3) a joint
venturer or hold a joint venture interest in any joint venture except that
Holdings or any of its Material Subsidiaries may be a party to a joint venture
(A) that would not otherwise be a Material Subsidiary were it a Subsidiary of
Holdings, and (B) as to which neither Holdings nor any Material Subsidiary
is directly or indirectly jointly or severally liable for any act or omission
of the joint venture beyond the amount of its investment therein.

(j)            Continuation
of or Change in Business.  Holdings
shall not, and shall not permit any of its Material Subsidiaries to, make a
material change in the nature of its business as substantially conducted and
operated by Holdings or such Subsidiary as of the Closing Date; provided,
however, that (A) it shall not be a material change hereunder for
Holdings or any of its Material Subsidiaries to alter the concentration percentages
of products offered or business conducted as of the Closing Date, nor to enter
into any business incidental to the offering of such products or the conduct of
such business and it shall not be a material change hereunder for a Material
Subsidiary to engage in any business incidental to the conduct of a financial
services company and (B) the parties hereto hereby acknowledge and agree that
the issuance of Guaranteed Investment Contracts is a business incidental to the
conduct of a financial services company.

(k)           Plans
and Benefit Arrangements.  Holdings
shall not, and shall not permit any of its Material Subsidiaries to, engage in
a Prohibited Transaction with any Plan, Benefit Arrangement, or Multiemployer
Plan which, alone or in conjunction with any other circumstance or set of
circumstances, would result in a material liability under ERISA or otherwise
violate ERISA in a material respect.

 60
 

 

(l)            Fiscal
Year.  Holdings shall not, and shall
not permit any Subsidiary of Holdings to, change its fiscal year from the
twelve-month period beginning January 1 and ending December 31 unless Holdings
has (i) provided thirty (30) days’ prior written notice to the Agent and the
Banks of the proposed change accompanied by an explanation in reasonable detail
of the effect thereof on Holdings and its Subsidiaries in general and on
Holdings’ or its Material Subsidiary’s financial reporting and covenant
compliance hereunder, and (ii) agreed to amend the covenants contained herein
(including the financial covenants set forth below) if reasonably requested by
the Agent and the Required Banks to maintain the continuity of the such
covenants.

(m)          Minimum
Statutory Capital.  The Company shall
not at any time permit the Statutory Capital of the Company to be less than
seventy-five percent (75%) of the Statutory Capital of the Company as of the
most recent fiscal quarter of the Company prior to the Closing Date.

(n)           Maximum
Debt to Total Capitalization Ratio (Holdings).  Holdings shall maintain at all times a ratio
of Consolidated Debt to Total Capitalization of not more than 0.30 to 1.0.

(o)           Minimum
Net Worth.  Holdings shall not permit
at any time its Consolidated Net Worth to be less than seventy-five percent
(75%) of the Consolidated Net Worth of Holdings as of the most recent fiscal
quarter of Holdings prior to the Closing Date.

Section 7.03  Reporting
Requirements.  Subject to Section
7.04, each Borrower covenants and agrees (in each case solely on behalf of
itself and its Subsidiaries) that until payment in full of the Loans and
interest thereon, satisfaction of all other Obligations hereunder and under the
other Loan Documents, expiration of all Letters of Credit and termination of
the Commitments, Holdings will furnish or cause to be furnished to the Agent
(which shall promptly furnish the same to each of the Banks):

(a)           Quarterly
Financial Statements.  As soon as
available and in any event within forty-five (45) calendar days after the end
of each of the first three fiscal quarters in each fiscal year, the Form 10-Q
of Holdings as filed with the SEC and two sets of financial statements of
Holdings and the Company, each consisting of a consolidated balance sheet as of
the end of such fiscal quarter and related consolidated statements of income,
stockholders’ equity, and cash flows for the fiscal quarter then ended and the
fiscal year through that date, all in reasonable detail and certified (subject
to normal year-end audit adjustments) by the Chief Executive Officer,
President, Chief Financial Officer, Treasurer, or Assistant Treasurer of
Holdings or the Company, as the case may be, as having been prepared as the set
of financial statements of Holdings in accordance with GAAP, consistently
applied, and as to the set of financial statements of the Company as having
been prepared in accordance with statutory accounting principles required by
the State of Maryland.

(b)           Annual
Financial Statements.  As soon as
available and in any event within ninety (90) days after the end of each fiscal
year of Holdings, the Form 10-K of

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Holdings as filed with the
SEC and two sets of financial statements of Holdings and the Company, each
consisting of a consolidated balance sheet as of the end of such fiscal year,
and related consolidated statements of income, stockholders’ equity, and cash
flows for the fiscal year then ended, all in reasonable detail with the set
relating to Holdings being prepared in accordance with GAAP, consistently
applied, and the set relating to the Company being prepared in accordance with
statutory accounting principles required by the State of Maryland, and, in each
case, certified by independent certified public accountants of nationally
recognized standing satisfactory to the Agent. 
The certificate or report of accountants shall be free of qualifications
(other than any consistency qualification that may result from a change in the
method used to prepare the financial statements as to which such accountants
concur) and shall not indicate the occurrence or existence of any event,
condition, or contingency which would materially impair the prospect of payment
or performance of any covenant, agreement, or duty of Holdings and/or any
Material Subsidiary under any of the Loan Documents.

(c)           Certificate
of the Company.  Concurrently with
the financial statements of Holdings and the Company furnished to the Agent and
to the Banks pursuant to Section 7.03(a) [Quarterly Financial Statements]
and Section 7.03(b) [Annual Financial Statements], a certificate (each a “Compliance
Certificate”) of each of Holdings and the Company signed by the Chief Executive
Officer, President, Chief Financial Officer, Treasurer, or Assistant Treasurer
of Holdings or the Company, in the form of Exhibit 7.03(c), to the
effect that, except as described pursuant to Section 7.03(d) [Notice of
Default], (i) the representations and warranties of the Borrowers
contained in ARTICLE V and in the other Loan Documents and the representations
and warranties of each Material Non-AGC Subsidiary, if any, contained or
incorporated in the Guarantor Joinder given by such Non-AGC Material Subsidiary
pursuant to Section 10.18 are true on and as of the date of such certificate
with the same effect as though such representations and warranties had been
made on and as of such date (except representations and warranties which expressly
relate solely to an earlier date or time) and each Borrower has performed and
complied with all covenants and conditions hereof and each Material Subsidiary,
if any, shall have complied with all covenants and conditions of or
incorporated into the Guarantor Joinder given by such Non-AGC Material
Subsidiary pursuant to Section 10.18, (ii) no Event of Default or
Potential Default exists and is continuing on the date of such certificate, and
(iii) containing calculations in sufficient detail to demonstrate
compliance as of the date of such financial statements with all applicable
financial covenants contained in Section 7.02 [Negative Covenants].

(d)           Notice
of Default.  Promptly after any
officer of a Borrower has learned of: 
(i) the occurrence of an Event of Default or Potential Default, a
certificate signed by the Chief Executive Officer, President, Chief Financial
Officer, Treasurer, or Assistant Treasurer of such Borrower setting forth the
details of such Event of Default or Potential Default and the action which such
Borrower proposes to take with respect thereto, or (ii) the creation or
acquisition of a Material Subsidiary (or the existence of a Material Non-AGC
Subsidiary other than AGRI or AGRO which has not executed and delivered a Guaranty
Agreement to Agent for the benefit of the Banks), a certificate signed by the
Chief Executive Officer, President, Chief Financial Officer, Treasurer, or
Assistant

 62
 

Treasurer of Holdings
setting forth the legal name, jurisdiction of organization, and such other
relevant information reasonably requested by Agent.

(e)           Off-Balance
Sheet Financing.  None of Holdings or
any of its Material Subsidiaries shall engage in any off-balance sheet
transaction (i.e., the liabilities in respect of which do not appear on
the liability side of the balance sheet) providing the functional equivalent of
material Indebtedness or otherwise providing for a material liability of
Holdings or any of its Material Subsidiaries (collectively, “Off-Balance Sheet
Transactions”), except the Contingent Capital Facility and such other
Off-Balance Sheet Transactions as are fully disclosed to the Banks and Agent
prior to their creation.

(f)            Notice
of Litigation.  Promptly after the
commencement thereof, notice of all actions, suits, proceedings or
investigations before or by any Official Body or any other Person against
Holdings or any Material Subsidiary of Holdings, which involve a claim or
series of claims in excess of $20,000,000 or which, if adversely determined,
would constitute a Material Adverse Change.

(g)           Notice
of Change in Insurer Financial Strength Rating.  Within two (2) Business Days after
Standard & Poor’s or Moody’s announces a change in the Company’s Insurer
Financial Strength Rating, notice of such change.  Holdings will deliver together with such
notice a copy of any written notification which the Company received from the
applicable rating agency regarding such change of its Insurer Financial
Strength Rating.

(h)           Sale
of Assets.  At least fifteen (15)
calendar days prior thereto, notice with respect to any proposed sale or
transfer of material assets pursuant to Section 7.02(g)(v).

(i)            Budgets, Other Reports and
Information.  Promptly upon their
becoming available to Holdings or the Company, such reports and information as
any of the Banks may from time to time reasonably request.  Each Borrower shall also notify the Banks and
Agent promptly of the enactment, enforcement, or adoption of any Law which may
result in a Material Adverse Change with respect to such Borrower.

Section 7.04  Bermuda
Law Event.  To the extent that the
making by Holdings, the Company or any Guarantor of any covenant set forth in
Sections 7.01, 7.02 or 7.03 or in any of the Loan Documents is for such Person
not permitted by, or is unlawful under or is in violation of, any Bermuda Law
pertaining to fetters on statutory powers, then such covenant shall be deemed
not made by nor applicable to such Person, but if such Person shall take or
fail to take any action which would have breached such covenant had the same been
applicable to such Person, the action or failure to take action shall
constitute a “Bermuda Law Event”.

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ARTICLE VIII

DEFAULT

Section 8.01  Events
of Default.  An Event of Default
shall mean the occurrence or existence of any one or more of the following
events or conditions (whatever the reason therefor and whether voluntary,
involuntary, or effected by operation of Law):

(a)           Payments
Under Loan Documents.  Any Borrower
shall fail to pay (i) any principal of any Loan (including scheduled
installments or mandatory prepayments, if any, or the payment due at maturity)
when such principal is due hereunder or any reimbursement obligation in respect
of any Letter of Credit when due hereunder or (ii) any interest on any
Loan or any other amount owing hereunder or under the other Loan Documents
within five (5) Business Days after such interest or other amount becomes due
in accordance with the terms hereof or thereof;

(b)           Breach
of Warranty.  Any representation or
warranty made at any time by any of Holdings and the Material Subsidiaries
herein or by any of Holdings and the Material Subsidiaries in any other Loan
Document, or in any certificate, other instrument, or statement furnished by
Holdings or a Material Subsidiary pursuant to the provisions hereof or thereof,
shall prove to have been false or misleading in any material respect as of the
time it was made or furnished;

(c)           Breach
of Negative Covenants or Visitation Rights. 
Holdings or any Material Subsidiary shall default in the observance or
performance of any covenant contained in Section 7.02 [Negative Covenants] or
Section 7.01(l) or shall default for a period of ten (10) days or more in the
observance or performance of any covenant contained in Section 7.01(f);

(d)           Breach
of Other Covenants.  Holdings or any
Material Subsidiary shall default in the observance or performance of any other
covenant, condition, or provision hereof or of any other Loan Document and such
default shall continue unremedied for a period of thirty (30) days (such grace
period to be applicable only in the event such default can be remedied by
corrective action);

(e)           Defaults
in Other Agreements or Indebtedness. 
A default or event of default shall occur at any time under the terms of
any other agreement involving borrowed money or the extension of credit or any
other Indebtedness under which Holdings or any Material Subsidiary of Holdings
may be obligated as a borrower or guarantor in excess of $20,000,000 in the
aggregate, and either (1) such breach, default or event of default consists of
the failure to pay (beyond any period of grace permitted with respect thereto,
whether waived or not) any Indebtedness when due (whether at stated maturity,
by acceleration or otherwise) or (2) such breach or default causes (or permits
the holder or holders of such Indebtedness to cause) the acceleration of any
Indebtedness (whether or not such right shall have been waived) or the
termination of any commitment to lend;

(f)            Final Judgments or Orders.  Any final judgments or orders for the payment
of money which results in an uninsured liability to pay in excess of
$20,000,000 in the aggregate shall be entered against Holdings or any Material
Subsidiary by a court

 

 64

 

having jurisdiction in the
premises, which judgment is not discharged, vacated, bonded, or stayed pending
appeal within a period of forty-five (45) days from the date of entry;

(g)           Loan
Document Unenforceable.  Any of the
Loan Documents shall cease to be legal, valid, and binding agreements
enforceable against the party executing the same or such party’s successors and
assigns (as permitted under the Loan Documents) in accordance with the
respective terms thereof or shall in any way be terminated (except in
accordance with its terms) or become or be declared stayed, ineffective, or
inoperative or shall cease to give or provide the respective Liens or security
interests intended to be created thereby; provided, however, if
any of the foregoing is a result of an involuntary proceeding of the type
described in Section 8.01(m), such proceeding has not been contested by the
affected party or has not been dismissed after the passage of more than sixty
(60) days;

(h)           Losses;
Proceedings Against Assets.  Any of
Holdings’ or the Company’s assets having an aggregate value (reasonably
determined) in excess of five (5%) of the tangible net worth of Holdings and
its Subsidiaries or the Company and the Subsidiaries, as the case may be, or
any of its Material Subsidiaries’ assets having an aggregate value (reasonably
determined) in excess of a material amount of such Material Subsidiary’s
tangible net worth, are attached, seized, levied upon or subjected to a writ or
distress warrant; or such come within the possession of any receiver, trustee,
custodian or assignee for the benefit of creditors and the same is not cured
within sixty (60) days thereafter;

(i)            Notice
of Lien or Assessment.  A notice of
Lien or assessment in excess of $20,000,000 which is not a Permitted Lien is
filed of record with respect to all or any part of the Holdings’ or any of its
Material Subsidiaries’ assets by the United States, or any department, agency,
or instrumentality thereof, or by any state, county, municipal, or other
governmental agency, including the PBGC, or any taxes or debts owing at any
time or times hereafter to any one of these becomes payable and the same is not
paid within thirty (30) days after the same becomes payable;

(j)            Insolvency.  Holdings or any Material Subsidiary of
Holdings ceases to be solvent or admits in writing its inability to pay its
debts as they mature;

(k)           Events
Relating to Plans and Benefit Arrangements. 
Any of the following occurs: 
(i) any Reportable Event, which the Agent determines in good faith
constitutes grounds for the termination of any Plan by the PBGC or the
appointment of a trustee to administer or liquidate any Plan, shall have
occurred and be continuing; (ii) proceedings shall have been instituted or
other action taken to terminate any Plan, or a termination notice shall have
been filed with respect to any Plan; (iii) a trustee shall be appointed to
administer or liquidate any Plan; (iv) the PBGC shall give notice of its
intent to institute proceedings to terminate any Plan or Plans or to appoint a
trustee to administer or liquidate any Plan; and, in the case of the occurrence
of (i), (ii), (iii) or (iv) above, the Agent determines in good faith that the
amount of Holdings’ liability is likely to exceed 10% of its Consolidated Net
Worth; (v) Holdings or any member of the ERISA Group shall fail to make
any contributions when due to a Plan or a Multiemployer Plan;

 65
 

(vi) Holdings or any
other member of the ERISA Group shall make any amendment to a Plan with respect
to which security is required under Section 307 of ERISA;
(vii) Holdings or any other member of the ERISA Group shall withdraw
completely or partially from a Multiemployer Plan; (viii) Holdings or any
other member of the ERISA Group shall withdraw (or shall be deemed under Section 4062(e)
of ERISA to withdraw) from a Multiple Employer Plan; or (ix) any
applicable Law is adopted, changed or interpreted by any Official Body with
respect to or otherwise affecting one or more Plans, Multiemployer Plans or
Benefit Arrangements and, with respect to any of the events specified in (v),
(vi), (vii), (viii) or (ix), the Agent determines in good faith that any such
occurrence would be reasonably likely to materially and adversely affect the
total enterprise represented by Holdings and the other members of the ERISA
Group;

(l)            Change
of Control.  (i) Any person or group
of persons (within the meaning of Sections 13(d) or 14(a) of the
Securities Exchange Act of 1934, as amended), other than ACE or an Affiliate of
ACE, shall have acquired beneficial ownership of (within the meaning of Rule
13d-3 promulgated by the SEC under said Act) 30% or more of the voting capital
stock of Holdings; or (ii) within a period of twelve (12) consecutive
calendar months, individuals who were directors of Holdings on the first day of
such period and individuals approved by the existing board of directors of
Holdings shall cease to constitute a majority of the board of directors of
Holdings; or (iii) the Company, AGRI or AGRO shall cease to be a wholly-owned
Subsidiary of Holdings; provided, however, any issuance of
preferred stock in connection with the Contingent Capital Facility shall not be
a violation of this Section 8.01(l) and shall not be deemed an Event of
Default; or (iv) the UK Borrower shall cease to be a subsidiary of the Company
at any time when any Loans are outstanding to the UK Borrower or, Letters of
Credit have been issued for the account of the UK Borrower;

(m)          Involuntary
Proceedings.  A proceeding shall have
been instituted in a court having jurisdiction in the premises seeking a decree
or order for relief in respect of Holdings or any Material Subsidiary of
Holdings in an involuntary case under any applicable bankruptcy, insolvency,
reorganization, or other similar law now or hereafter in effect, or for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator, or conservator (or similar official) of Holdings or any Material
Subsidiary of Holdings or for any substantial part of its property, or for the
winding-up or liquidation of its affairs, and such proceeding shall remain
undismissed or unstayed and in effect for a period of sixty (60) consecutive
days or such court shall enter a decree or order granting any of the relief
sought in such proceeding;

(n)           Voluntary
Proceedings.  Holdings or any
Material Subsidiary of Holdings shall commence a voluntary case under any
applicable bankruptcy, insolvency, reorganization, or other similar law now or
hereafter in effect, shall consent to the entry of an order for relief in an
involuntary case under any such law, or shall consent to the appointment or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator, or conservator (or other similar official) of itself or for any
substantial part of its property or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any action in furtherance of any of the foregoing; or

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(o)           Bermuda
Law Event.  A Bermuda Law Event shall
occur and be continuing, provided that any grace period provided under
the provisions of this Section 8 or otherwise under this Agreement or under the
other Loan Documents applicable to an equivalent breach of covenant under
Section 7 shall apply to this Section 8.01(o).

Section 8.02  Consequences
of Event of Default.  (a)  Events of Default Other Than Bankruptcy,
Insolvency or Reorganization Proceedings. 
If an Event of Default or Potential Default specified under Section
8.01(a) through Section 8.01(l) or Section 8.01(o) shall occur and be
continuing, the Banks, the Issuing Banks and the Agent shall be under no
further obligation to make Revolving Credit Loans or Bid Loans or issue Letters
of Credit, as the case may be, and if any such Event of Default shall occur and
be continuing, the Agent may, and upon the request of the Required Banks, shall
by written notice to the Borrowers, take any of the following actions:  (i) terminate the Commitments and
thereupon the Commitments shall be terminated and of no further force or
effect, (ii) terminate any Letter of Credit which may be terminated in
accordance with its terms, (iii) declare the unpaid principal amount of
the Revolving Credit Notes and Bid Notes then outstanding and all interest
accrued thereon, any unpaid fees, and all other Indebtedness of the Borrowers
to the Banks or the Issuing Banks hereunder and thereunder to be forthwith due
and payable, and the same shall thereupon become and be immediately due and
payable to the Agent for the benefit of each Bank without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived or (iv) require the respective Borrowers to cash collateralize all
Letters of Credit issued to the account of such Borrower; and

(b)           Bankruptcy, Insolvency or Reorganization
Proceedings.  If an Event of Default
specified under Section 8.01(m) [Involuntary Proceedings] or Section 8.01(n)
[Voluntary Proceedings] shall occur, the Commitments shall automatically
terminate and be of no further force and effect, the Banks and the Issuing
Banks shall be under no further obligations to make Revolving Credit Loans, Bid
Loans, or issue Letters of Credit hereunder and the unpaid principal amount of
the Loans then outstanding and all interest accrued thereon, any unpaid fees and
all other Indebtedness of the Borrowers to the Banks or the Issuing Bank
hereunder and thereunder shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived; and

(c)           Set-off.
 If an Event of Default shall occur and
be continuing, any Bank or any Issuing Bank to whom any Obligation is owed by
any Borrower or any Material Subsidiary hereunder or under any other Loan
Document or any participant of such Bank or Issuing Bank which has agreed in
writing to be bound by the provisions of Section 9.13 [Equalization of Banks]
and any branch, Subsidiary, or Affiliate of such Bank or participant anywhere
shall have the right, in addition to all other rights and remedies available to
it, without notice to any Borrower or any Material Subsidiary, to set-off
against and apply to the then unpaid balance of all the Loans and all other
Obligations hereunder or under any other Loan Document any debt owing to, and
any other funds held in any manner for the account of, such Borrower or such
Material Subsidiary by such Bank or participant or by such branch, Subsidiary
or Affiliate, including all funds in all deposit accounts (whether time or
demand, general or special, provisionally credited or finally credited, or
otherwise) now or hereafter maintained by such Borrower or such Material
Subsidiary for its own account (but not including funds of others held in
custodian or trust accounts maintained by any Borrower or any of its Material
Subsidiaries)

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with such Bank or
participant or such branch, Subsidiary, or Affiliate.  Such right shall exist whether or not any
Bank or the Agent shall have made any demand under this Agreement or any other
Loan Document, whether or not such debt owing to or funds held for the account
of such Borrower or such Material Subsidiary is or are matured or unmatured and
regardless of the existence or adequacy of any Guaranty or any other security,
right, or remedy available to any Bank or the Agent; and

(d)           Suits,
Actions, Proceedings.  If an Event of
Default shall occur and be continuing, and whether or not the Agent shall have
accelerated the maturity of Committed Loans pursuant to any of the foregoing
provisions of this Section 8.02, the Agent or any Bank or Issuing Bank, upon
the request or consent of the Required Banks, may proceed to protect and
enforce the Agent’s or any one or more Banks’ or Issuing Banks’ rights by suit
in equity, action at law and/or other appropriate proceeding, whether for the
specific performance of any covenant or agreement contained in this Agreement
or the other Loan Documents, including as permitted by applicable Law the
obtaining of the ex parte appointment of a receiver, and, if such amount shall
have become due, by declaration or otherwise, proceed to enforce the payment
thereof or any other legal or equitable right of the Agent, such Bank or such
Issuing Bank; and

(e)           Application
of Proceeds.  From and after the date
on which the Agent has taken any action pursuant to this Section 8.02 and until
all Obligations have been paid in full, any and all proceeds received by the
Agent from the exercise of any remedy by the Agent, shall be applied as
follows:

(A)       first, to reimburse the Agent, the Banks and the Issuing Banks
for out-of-pocket costs, expenses and disbursements, including
reasonable attorneys’ fees and legal expenses, incurred by the Agent, the Banks
or the Issuing Banks in connection with collection of any Obligations under any
of the Loan Documents;

(B)        second, to the repayment of all Indebtedness then due and
unpaid of any Borrower or any Material Subsidiary to the Banks or the Issuing
Banks incurred under this Agreement or any of the other Loan Documents, with
such repayments to be applied in the following order:  (i) interest, (ii) principal, (iii) fees and
(iv) expenses and other amounts owing to the Banks; and

(C)        the balance, if any, as required by Law; and

(f)            Other Rights and Remedies.  In addition to all of the rights and remedies
contained in this Agreement or in any of the other Loan Documents, the Agent
shall have all of the rights and remedies under applicable Law, all of which
rights and remedies shall be cumulative and non-exclusive, to the extent
permitted by Law.  The Agent may, and upon
the request of the Required Banks shall, exercise all post-default rights
granted to the Agent, the Banks and the Issuing Banks under the Loan Documents
or applicable Law.

Section 8.03  Right of Competitive Bid Loan Banks.  If any Event of Default shall occur and be
continuing, the Banks which have any Bid Loans then outstanding to the
Borrowers (the “Bid Loan Banks”) shall not be entitled to accelerate payment of
the Bid Loans or to exercise any right or remedy related to the collection of
the Bid Loans until the Commitments

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shall
be terminated hereunder pursuant to Section 8.02.  Upon such a termination of the
Commitments:  (i) references to
Revolving Credit Loans in Section 8.02 shall be deemed to apply also to the Bid
Loans and the Bid Loan Banks shall be entitled to all enforcement rights given
to a holder of a Revolving Credit Loan in Section 8.02, and (ii) the
definition of Required Banks shall be changed as provided in Section 1.01 so
that each Bank shall have voting rights hereunder in proportion to its share of
the total Loans outstanding.

ARTICLE IX

THE AGENT

Section 9.01  Appointment.  Each Bank hereby irrevocably designates,
appoints and authorizes ABN AMRO Bank N.V. to act as Agent for such Bank under
this Agreement and to execute and deliver or accept on behalf of each of the
Banks the other Loan Documents.  Each
Bank hereby irrevocably authorizes the Agent to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and any
other instruments and agreements referred to herein, and to exercise such
powers and to perform such duties hereunder as are specifically delegated to or
required of the Agent by the terms hereof, together with such powers as are
reasonably incidental thereto.  ABN AMRO
Bank N.V. agrees to act as the Agent on behalf of the Banks to the extent
provided in this Agreement.

Section 9.02  Delegation
of Duties.  The Agent may perform any
of its duties hereunder by or through agents or employees (provided such
delegation does not constitute a relinquishment of its duties as Agent) and,
subject to Section 9.05 [Reimbursement of Agent by Borrower, Etc.] and Section
9.06, shall be entitled to engage and pay for the advice or services of any
attorneys, accountants or other experts concerning all matters pertaining to
its duties hereunder and to rely upon any advice so obtained.

Section 9.03  Nature
of Duties; Independent Credit Investigation.  The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and no
implied covenants, functions, responsibilities, duties, obligations, or
liabilities shall be read into this Agreement or otherwise exist.  The duties of the Agent shall be mechanical
and administrative in nature; the Agent shall not have by reason of this
Agreement a fiduciary or trust relationship in respect of any Bank; and nothing
in this Agreement, expressed or implied, is intended to or shall be construed
as to impose upon the Agent any obligations in respect of this Agreement except
as expressly set forth herein.  Without
limiting the generality of the foregoing, the use of the term “agent” in this
Agreement with reference to the Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law.  Instead, such term is
used merely as a matter of market custom, and is intended to create or reflect
only an administrative relationship between independent contracting
parties.  Each Bank expressly
acknowledges (i) that the Agent has not made any representations or warranties
to it and that no act by the Agent hereafter taken, including any review of the
affairs of any of Holdings or any of its Subsidiaries, shall be deemed to
constitute any representation or warranty by the Agent to any Bank;
(ii) that it has made and will continue to make, without reliance upon the
Agent, its own independent investigation of the financial condition and affairs
and its own appraisal of the creditworthiness of each of Holdings and its

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Subsidiaries in connection
with this Agreement and the making and continuance of the Loans hereunder; and
(iii) except as expressly provided herein, that the Agent shall have no
duty or responsibility, either initially or on a continuing basis, to provide
any Bank with any credit or other information with respect thereto, whether
coming into its possession before the making of any Loan or at any time or
times thereafter.

Section 9.04  Actions
in Discretion of Agent; Instructions From the Banks.  The Agent agrees, upon the written request of
the Required Banks, to take or refrain from taking any action of the type
specified as being within the Agent’s rights, powers or discretion herein, provided
that the Agent shall not be required to take any action which exposes the Agent
to personal liability or which is contrary to this Agreement or any other Loan
Document or applicable Law.  In the
absence of a request by the Required Banks, the Agent shall have authority, in
its sole discretion, to take or not to take any such action, unless this
Agreement specifically requires the consent of the Required Banks or all of the
Banks.  Any action taken or failure to
act pursuant to such instructions or discretion shall be binding on the Banks,
subject to Section 9.06 [Exculpatory Provisions, Etc.].  Subject to the provisions of Section 9.06, no
Bank shall have any right of action whatsoever against the Agent as a result of
the Agent acting or refraining from acting hereunder in accordance with the
instructions of the Required Banks, or in the absence of such instructions, in
the absolute discretion of the Agent.

Section 9.05  Reimbursement
and Indemnification of Agent by the Borrowers.  Each Borrower (other than AGRI and AGRO)
unconditionally, jointly and severally, agrees to pay or reimburse the Agent
and hold the Agent harmless against (a) liability for the payment of all
reasonable out-of-pocket costs, expenses, and disbursements (including fees and
expenses of counsel) incurred by the Agent (i) in connection with the
development, negotiation, preparation, printing, execution, administration,
syndication, interpretation and performance of this Agreement and the other
Loan Documents, (ii) relating to any requested amendments, waivers or
consents pursuant to the provisions hereof, (iii) in connection with the
enforcement of this Agreement or any other Loan Document or collection of
amounts due hereunder or thereunder or the proof and allowability of any claim
arising under this Agreement or any other Loan Document, whether in bankruptcy
or receivership proceedings or otherwise, and (iv) in any workout or
restructuring or in connection with the protection, preservation, exercise or
enforcement of any of the terms hereof or of any rights hereunder or under any
other Loan Document or in connection with any foreclosure, collection or bankruptcy
proceedings, and (b) all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against the Agent, in its capacity as such, in any way relating to or arising
out of this Agreement or any other Loan Documents or any action taken or
omitted by the Agent hereunder or thereunder, provided that the Borrowers shall
not be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
if the same results from the Agent’s gross negligence or willful misconduct, or
if the Borrowers were not given notice of the subject claim and the opportunity
to participate in the defense thereof, at their expense (except that the
Borrowers shall remain liable to the extent such failure to give notice does
not result in a loss to the Borrowers), or if the same results from a
compromise or settlement agreement entered into without the consent of the
Borrowers, which shall not be unreasonably withheld.

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Section 9.06  Exculpatory
Provisions; Limitation of Liability. 
Neither the Agent nor any of its directors, officers, employees, agents,
attorneys or Affiliates shall (a) be liable to any Bank for any action
taken or omitted to be taken by it or them hereunder, or in connection herewith
including pursuant to any Loan Document, unless caused by its or their own
gross negligence or willful misconduct, (b) be responsible in any manner
to any of the Banks for the effectiveness, enforceability, genuineness,
validity or the due execution of this Agreement or any other Loan Documents or
for any recital, representation, warranty, document, certificate, report or
statement herein or made or furnished under or in connection with this
Agreement or any other Loan Documents, or (c) be under any obligation to
any of the Banks to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions hereof or thereof on the part of
the Borrowers or any of their Subsidiaries, or the financial condition of the
Borrowers or any of their Subsidiaries, or the existence or possible existence
of any Event of Default or Potential Default. 
No claim may be made by the Borrowers or any of their Subsidiaries, any
Bank, the Agent or any of their respective Subsidiaries against the Agent, any
Bank or any of their respective directors, officers, employees, agents,
attorneys or Affiliates, or any of them, for any special, indirect or
consequential damages or, to the fullest extent permitted by Law, for any
punitive damages in respect of any claim or cause of action (whether based on
contract, tort, statutory liability, or any other ground) based on, arising out
of or related to any Loan Document or the transactions contemplated hereby or
any act, omission or event occurring in connection therewith, including the
negotiation, documentation, administration or collection of the Loans, and the
Borrowers (for themselves and on behalf of each of their Subsidiaries), the
Agent and each Bank hereby waive, release and agree never to sue upon any claim
for any such damages, whether such claim now exists or hereafter arises and
whether or not it is now known or suspected to exist in their favor.  Each Bank agrees that, except for notices,
reports and other documents expressly required to be furnished to the Banks by
the Agent hereunder or given to the Agent for the account of or with copies for
the Banks, the Agent and each of its directors, officers, employees, agents,
attorneys or Affiliates shall not have any duty or responsibility to provide
any Bank with an credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Borrowers or any of their Subsidiaries which may come
into the possession of the Agent or any of its directors, officers, employees,
agents, attorneys or Affiliates.

Section 9.07  Reimbursement
and Indemnification of Agent and Issuing Banks by Banks.  Each Bank agrees to reimburse and indemnify
the Agent and the Issuing Banks (to the extent not reimbursed by the Borrowers
and without limiting the Obligation of the Borrowers to do so) in proportion to
its Ratable Share from and against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements, including attorneys’ fees and disbursements (including the
allocated costs of staff counsel), and costs of appraisers and environmental
consultants, of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against the Agent or the Issuing Banks, in its capacity as such,
in any way relating to or arising out of this Agreement or any other Loan
Documents or any action taken or omitted by the Agent or Issuing Banks
hereunder or thereunder, provided that no Bank shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (a) if the same results
from the Agent’s or such Issuing Bank’s gross negligence or willful misconduct,
or (b) if such Bank was not given notice of the subject claim and the
opportunity to participate in the defense thereof, at its expense (except that
such Bank shall remain liable to the extent such failure to give notice

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does not result in a loss to
the Bank), or (c) if the same results from a compromise and settlement
agreement entered into without the consent of such Bank, which shall not be
unreasonably withheld.  In addition, each
Bank agrees promptly upon demand to reimburse the Agent (to the extent not
reimbursed by the Borrowers and without limiting the Obligation of the
Borrowers to do so) in proportion to its Ratable Share for all amounts due and
payable by the Borrowers to the Agent in connection with the Agent’s periodic
audit of the Company’s or any of its respective Material Subsidiaries’ books,
records and business properties.

Section 9.08  Reliance
by Agent and Issuing Banks.  The
Agent and Issuing Banks shall be entitled to rely upon any writing, telegram,
telex or teletype message, resolution, notice, consent, certificate, letter,
cablegram, statement, order or other document or conversation by telephone or
otherwise believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon the advice and opinions
of counsel and other professional advisers selected by the Agent or the Issuing
Banks.  The Agent and Issuing Banks shall
be fully justified in failing or refusing to take any action hereunder unless
it shall first be indemnified to its satisfaction by the Banks against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.

Section 9.09  Notice
of Default.  The Agent shall not be
deemed to have knowledge or notice of the occurrence of any Potential Default
or Event of Default unless the Agent has received written notice from a Bank or
a Borrower referring to this Agreement, describing such Potential Default or
Event of Default and stating that such notice is a “notice of default.”

Section 9.10  Notices.  The Agent shall promptly send to each Bank a
copy of all notices received from any Borrower pursuant to the provisions of
this Agreement or the other Loan Documents promptly upon receipt thereof.  The Agent shall promptly notify the Borrowers
and the other Banks of each change in the Base Rate and the effective date
thereof.

Section 9.11  Banks
in Their Individual Capacities; Agents in Its Individual Capacity.  With respect to its Revolving Credit
Commitment, the Revolving Credit Loans and any Bid Loans made by it and any
other rights and powers given to it as a Bank hereunder or under any of the
other Loan Documents, the Agent shall have the same rights and powers hereunder
as any other Bank and may exercise the same as though it were not the Agent,
and the term “Bank” and “Banks” shall, unless the context otherwise indicates,
include the Agent in its individual capacity.  ABN AMRO Bank and its Affiliates and each of
the Banks and their respective Affiliates may, without liability to account,
except as prohibited herein, make loans to, issue letters of credit for the
account of, acquire equity interests in, accept deposits from, discount drafts
for, act as trustee under indentures of, and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with,
Holdings and its Subsidiaries and their Affiliates, in the case of the Agent,
as though it were not acting as Agent hereunder and in the case of each Bank,
as though such Bank were not a Bank hereunder, in each case without notice to
or consent of the other Banks.  The Banks
acknowledge that, pursuant to such activities, the Agent or its Affiliates may
(i) receive information regarding Holdings and any of its Subsidiaries or
Affiliates (including information that may be subject to confidentiality
obligations in favor of Holdings or any of its Subsidiaries or Affiliates) and
acknowledge that the Agent shall be under no obligation to provide such
information to them, and (ii) accept fees and

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other consideration from
Holdings and any of its Subsidiaries for services in connection with this
Agreement and otherwise without having to account for the same to the Banks.

Section 9.12  Holders
of Notes.  The Agent may deem and
treat any payee of any Note as the owner thereof for all purposes hereof unless
and until written notice of the assignment or transfer thereof shall have been
filed with the Agent.  Any request,
authority or consent of any Person who at the time of making such request or
giving such authority or consent is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee or assignee of such Note or of
any Note or Notes issued in exchange therefor.

Section 9.13  Equalization
of Banks.  The Banks and the holders
of any participations in any Commitments, Loans or Letters of Credit or other
rights or obligations of a Bank hereunder agree among themselves that,  with respect to all amounts received by
any Bank or any such holder for application on any Obligation hereunder or
under any such participation, whether received by voluntary payment, by
realization upon security, by the exercise of the right of set-off or banker’s
lien, by counterclaim, or by any other non-pro  rata source,
equitable adjustment will be made in the manner stated in the following
sentence so that, in effect, all such excess amounts will be shared ratably
among the Banks and such holders in proportion to their interests in payments
on the Loans and the Letters of Credit, except as otherwise provided in Section
3.04(c) [Agent’s and Bank’s Rights], Section 4.04(b) [Replacement of a Bank] or
Section 4.06 [Additional Compensation in Certain Circumstances].  The Banks or any such holder receiving any
such amount shall purchase for cash from each of the other Banks an interest in
such Bank’s Loans in such amount as shall result in a ratable participation by
the Banks and each such holder in the aggregate unpaid amount of the Loans, provided
that if all or any portion of such excess amount is thereafter recovered from
the Bank or the holder making such purchase, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery, together with
interest or other amounts, if any, required by law (including court order) to
be paid by the Bank or the holder making such purchase.

Section 9.14  Successor
Agent.  The Agent (i) may resign
as Agent or (ii) shall resign if such resignation is required by Section
4.04(b) [Replacement of a Bank], in either case of (i) or (ii) by giving not
less than thirty (30) days’ prior written notice to the Borrowers.  If the Agent shall resign under this
Agreement, then either (a) the Required Banks shall appoint from among the
Banks a successor agent for the Banks, subject to the consent of the Borrowers,
such consent not to be unreasonably withheld, or (b) if a successor agent
shall not be so appointed and approved within the thirty (30) day period
following the Agent’s notice to the Banks of its resignation, then the Agent
shall appoint, with the consent of the Borrowers, such consent not to be
unreasonably withheld, a successor agent who shall serve as Agent until such
time as the Required Banks appoint and the Borrowers consent to the appointment
of a successor agent.  Upon its
appointment pursuant to either clause (a) or (b) above, such successor agent
shall succeed to the rights, powers and duties of the Agent, and the term “Agent”
shall mean such successor agent,  effective
upon its appointment, and the former Agent’s rights, powers and duties as Agent
shall be terminated without any other or further act or deed on the part of
such former Agent or any of the parties to this Agreement.  After the resignation of any Agent hereunder,
the provisions of this ARTICLE IX shall inure to the benefit of such former
Agent and such former Agent shall not by reason of such resignation be deemed
to be released from liability for any actions taken or not taken by it while it
was an Agent under this Agreement.

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Section 9.15  Agent’s Fee.  The Borrowers shall pay to the Agent a
nonrefundable fee (the “Agent’s Fee”) for Agent’s services hereunder under the
terms of a letter (the “Agent’s Letter”) between the Borrowers and Agent, as
amended from time to time.

Section 9.16  Availability
of Funds.  The Agent may assume that
each Bank has made or will make the proceeds of a Loan available to the Agent
unless the Agent shall have been notified by such Bank on or before the later
of (1) the close of Business on the Business Day preceding the Borrowing
Date with respect to such Loan or (2) two hours before the time on which the
Agent actually funds the proceeds of such Loan to the respective Borrower
(whether using its own funds pursuant to this Section 9.16 or using proceeds
deposited with the Agent by the Banks and whether such funding occurs before or
after the time on which Banks are required to deposit the proceeds of such Loan
with the Agent).  The Agent may, in reliance
upon such assumption (but shall not be required to), make available to the
respective Borrower a corresponding amount. 
If such corresponding amount is not in fact made available to the Agent
by such Bank, the Agent shall be entitled to recover such amount on demand from
such Bank (or, if such Bank fails to pay such amount forthwith upon such demand
from the Borrowers) together with interest thereon, in respect of each day
during the period commencing on the date such amount was made available to the Borrowers
and ending on the date the Agent recovers such amount, at a rate per annum
equal to (i) the Federal Funds Effective Rate during the first three (3) days
after such interest shall begin to accrue and (ii) the applicable interest rate
in respect of such Loan after the end of such three-day period.

Section 9.17  Calculations.  In the absence of gross negligence or willful
misconduct, the Agent shall not be liable for any error in computing the amount
payable to any Bank whether in respect of the Loans, fees or any other amounts
due to the Banks under this Agreement. 
In the event an error in computing any amount payable to any Bank is
made, the Agent, the Borrowers and each affected Bank shall, forthwith upon
discovery of such error, make such adjustments as shall be required to correct
such error, and any compensation therefor will be calculated at the Federal
Funds Effective Rate.

Section 9.18  Beneficiaries.  Except as expressly provided herein, the
provisions of this ARTICLE IX are solely for the benefit of the Agent and the
Banks, and Holdings and its Subsidiaries shall not have any rights to rely on
or enforce any of the provisions hereof. 
In performing its functions and duties under this Agreement, the Agent
shall act solely as agent of the Banks and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for the Company or any of its Subsidiaries.

ARTICLE X

MISCELLANEOUS

Section 10.01 
Modifications, Amendments, or Waivers.  With the written consent of the Required
Banks, the Agent, acting on behalf of all the Banks, and the Borrowers may from
time to time enter into written agreements amending or changing any provision
of this Agreement or any other Loan Document or the rights of the Banks or the
Borrowers hereunder or thereunder, or may grant written waivers or consents to
a departure from the due performance of

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the Obligations hereunder or
thereunder.  Any such agreement, waiver
or consent made with such written consent shall be effective to bind all the
Banks and the Borrowers; provided that, without the written consent of
all the Banks, no such agreement, waiver, or consent may be made which will:

(a)           Increase
of Commitment; Extension of Expiration Date.  Increase the amount of the Revolving Credit
Commitment of any Bank hereunder or extend the Expiration Date;

(b)           Extension
of Payment; Reduction of Principal Interest or Fees; Modification of Terms of
Payment.  Whether or not any Loans
are outstanding, extend the time for payment of principal or interest of any
Loan (excluding the due date of any mandatory prepayment of a Loan or any
mandatory Commitment reduction in connection with such a mandatory prepayment
hereunder except for mandatory reductions of the Commitments on the Expiration
Date), the Facility Fee, the Letter of Credit Fee or any other fee payable to
any Bank, or reduce the principal amount of or the rate of interest borne by
any Loan or reduce the Facility Fee, the Letter of Credit Fee or any other fee
payable to any Bank, or otherwise affect the terms of payment of the principal
of or interest of any Loan, the Facility Fee or any other fee payable to any
Bank;

(c)           Release
of Collateral or Guarantor.  Release
any Guarantor from its Obligations under any Guaranty Agreement or any other
security for any of the Obligations except as otherwise may be permitted by the
terms hereof or of the instrument establishing the Lien; or

(d)           Miscellaneous.  Amend Section 4.02 [Pro Rata Treatment of
Banks], Section 9.06 [Exculpatory Provisions, Etc.] or Section 9.13
[Equalization of Banks] or this Section 10.01, alter any provision regarding
the pro  rata treatment of the Banks, change the definition of
Required Banks, or change any requirement providing for the Banks or the
Required Banks to authorize the taking of any action hereunder;

provided, further, that (i)
no agreement, waiver or consent which would modify the interests, rights or
obligations of the Agent in its capacity as Agent shall be effective without
the written consent of the Agent and (ii) no agreement, waiver or consent which
would modify the interests, rights or obligations of any Issuing Bank in its
capacity as an Issuing Bank shall be effective without the written consent of
such Issuing Bank.

Section 10.02 
No Implied Waivers; Cumulative Remedies; Writing Required.  No course of dealing and no delay or failure
of the Agent or any Bank in exercising any right, power, remedy or privilege
under this Agreement or any other Loan Document shall affect any other or
future exercise thereof or operate as a waiver thereof, nor shall any single or
partial exercise thereof or any abandonment or discontinuance of steps to
enforce such a right, power, remedy or privilege preclude any further exercise
thereof or of any other right, power, remedy or privilege.  The rights and remedies of the Agent and the
Banks under this Agreement and any other Loan Documents are cumulative and not
exclusive of any rights or remedies which they would otherwise have.  Any waiver, permit, consent or approval of
any kind or character on the part of any Bank of any breach or default under
this Agreement or any such waiver of any

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provision or condition of
this Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing.

Section 10.03 
Reimbursement and Indemnification of Banks by the Borrowers; Taxes.  Each Borrower jointly and severally agrees
unconditionally upon demand to pay or reimburse to each Bank (other than the
Agent, as to which the Borrowers’ Obligations are set forth in Section 9.05
[Reimbursement of Agent By Borrower, Etc.]) and to save such Bank harmless
against (i) liability for the payment of all reasonable out-of-pocket
costs, expenses and disbursements (including fees and expenses of counsel for
each Bank except with respect to (a) and (b) below), incurred by such Bank
(a) in connection with the review, execution, delivery, administration, or
interpretation of this Agreement, and other instruments and documents to be
delivered hereunder, (b) relating to any amendments, waivers, or consents
pursuant to the provisions hereof, (c) in connection with the enforcement
of this Agreement or any other Loan Document, or collection of amounts due
hereunder or thereunder or the proof and allowability of any claim arising
under this Agreement or any other Loan Document, whether in bankruptcy or
receivership proceedings or otherwise, and (d) in any workout or
restructuring or in connection with the protection, preservation, exercise, or
enforcement of any of the terms hereof or of any rights hereunder or under any
other Loan Document or in connection with any foreclosure, collection, or
bankruptcy proceedings, or (ii) all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against such Bank (including such Bank’s officers,
directors and employees), in its capacity as such, in any way relating to or
arising out of this Agreement or any other Loan Documents, use of proceeds of
the Loans or the transactions contemplated by the Loan Documents or any action
taken or omitted by such Bank (including such Bank’s officers, directors and
employees) hereunder or thereunder, provided that the Borrowers shall
not be liable to a Bank (including such Bank’s officers, directors and
employees) for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, or disbursements
(A) if the same results from such Bank’s or its officer’s, director’s or
employee’s gross negligence or willful misconduct, or (B) if the Borrowers
were not given notice of the subject claim and the opportunity to participate
in the defense thereof, at their expense (except that the Borrowers shall
remain liable to the extent such failure to give notice does not result in a
loss to the Borrowers), or (C) if the same results from a compromise or
settlement agreement entered into without the consent of the Borrowers, which
shall not be unreasonably withheld.  The
Banks will attempt to minimize the fees and expenses of legal counsel for the
Banks which are subject to reimbursement by the Borrowers on a joint and
several basis hereunder by considering the usage of one law firm to represent
the Banks and the Agent if appropriate under the circumstances.  The Borrowers, jointly and severally, agree
unconditionally to pay all stamp, document, transfer, recording or filing taxes
or fees and similar impositions now or hereafter determined by the Agent or any
Bank to be payable in connection with this Agreement or any other Loan
Document, and the Borrowers, jointly and severally, agree unconditionally to
save the Agent and the Banks harmless from and against any and all present or
future claims, liabilities or losses with respect to or resulting from any
omission to pay or delay in paying any such taxes, fees or impositions.

Section 10.04 
Holidays.  Whenever payment
of a Loan to be made or taken hereunder shall be due on a day which is not a
Business Day such payment shall be due on the next Business Day (except as
provided in the definition of Committed Loan Interest Period with

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respect to Interest Periods
under the LIBOR Option) and such extension of time shall be included in computing
interest and fees, except that the Loans shall be due on the Business Day
preceding the Expiration Date if the Expiration Date is not a Business
Day.  Whenever any payment or action to
be made or taken hereunder (other than payment of the Loans) shall be stated to
be due on a day which is not a Business Day, such payment or action shall be
made or taken on the next following Business Day, and such extension of time
shall not be included in computing interest or fees, if any, in connection with
such payment or action.

Section 10.05 
Funding by Branch, Subsidiary, or Affiliate.  (a)  Notional
Funding.  Each Bank shall have the
right from time to time, without notice to the Borrowers, to deem any branch,
Subsidiary, or Affiliate (which for the purposes of this Section 10.05 shall
mean any corporation or association which is directly or indirectly controlled
by or is under direct or indirect common control with any corporation or
association which directly or indirectly controls such Bank) of such Bank to
have made, maintained, or funded any Loan to which the LIBOR Option applies at
any time, provided that immediately following (on the assumption that a
payment was then due from the Borrowers to such other office), and as a result
of such change, the Borrowers will not be under any greater financial
obligation pursuant to Section 4.06 [Additional Compensation in Certain
Circumstances] than they would have been in the absence of such change.  Notional funding offices may be selected by
each Bank without regard to such Bank’s actual methods of making, maintaining
or funding the Loans or any sources of funding actually used by or available to
such Bank.

(b)           Actual Funding.  Each Bank shall have the right from time to
time to make or maintain any Loan by arranging for a branch, Subsidiary or
Affiliate of such Bank to make or maintain such Loan subject to the last
sentence of this Section 10.05(b).  If
any Bank causes a branch, Subsidiary or Affiliate to make or maintain any part
of the Loans hereunder, all terms and conditions of this Agreement shall,
except where the context clearly requires otherwise, be applicable to such part
of the Loans to the same extent as if such Loans were made or maintained by
such Bank, but in no event shall any Bank’s use of such a branch, Subsidiary or
Affiliate to make or maintain any part of the Loans hereunder cause such Bank
or such branch, Subsidiary or Affiliate to incur any cost or expenses payable
by any Borrower hereunder or require any Borrower to pay any other compensation
to any Bank (including any expenses incurred or payable pursuant to Section
4.06 [Additional Compensation in Certain Circumstances]) which would otherwise
not be incurred.

Section 10.06 
Notices.  Any notice,
request, demand, direction, or other communication (for purposes of this
Section 10.06 only, a “Notice”) to be given to or made upon any party hereto
under any provision of this Agreement shall be given or made by telephone or in
writing (which includes means of electronic transmission (i.e., “e-mail”)
or facsimile transmission in accordance with this Section 10.06.  Any such Notice must be delivered to the
applicable parties hereto at the addresses and numbers set forth under their
respective names on Schedule 1.01(B) hereof or in accordance with
any subsequent unrevoked Notice from any such party that is given in accordance
with this Section 10.06.  Any Notice
shall be effective:

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(A)          In
the case of hand-delivery, when delivered;

(B)           If
given by mail, four days after such Notice is deposited with the United States
Postal Service, with first-class postage prepaid, return receipt requested;

(C)           In
the case of a telephonic Notice, when a party is contacted by telephone, if
delivery of such telephonic Notice is confirmed no later than the next Business
Day by hand delivery, a facsimile or electronic transmission, a Website Posting
or overnight courier delivery of a confirmatory notice (received at or before
noon on such next Business Day);

(D)          In
the case of a facsimile transmission, when sent to the applicable party’s
facsimile machine’s telephone number if the party sending such Notice receives
confirmation of the delivery thereof from its own facsimile machine;

(E)           In
the case of electronic transmission, when actually received;

(F)           In
the case of a Website Posting, upon delivery of a Notice of such posting
(including the information necessary to access such web site) by another means
set forth in this Section 10.06; and

(G)           If
given by any other means (including by overnight courier), when actually received.

Any Bank giving a Notice to any Borrower or
any Material Subsidiary shall concurrently send a copy thereof to the Agent,
and the Agent shall promptly notify the other Banks of its receipt of such
Notice.

Section 10.07 
Severability.  The
provisions of this Agreement are intended to be severable.  If any provision of this Agreement shall be
held invalid or unenforceable in whole or in part in any jurisdiction, such
provision shall, as to such jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.

Section 10.08 
Governing Law.  This
Agreement and any other documents delivered herewith and the rights and
obligations of the parties hereto and thereto shall be for all purposes
governed by, and construed and enforced in accordance with the internal Laws of
the State of New York, without giving effect to its conflicts of law principles.

Section 10.09 
Prior Understanding.  This
Agreement and the other Loan Documents supersede all prior understandings and
agreements, whether written or oral, between the parties hereto and thereto
relating to the transactions provided for herein and therein, including any
prior confidentiality agreements and commitments.

Section 10.10 
Duration; Survival.  All
representations and warranties of the Borrowers and the Material Subsidiaries
contained herein or made in connection herewith shall survive the making of
Loans and the issuance of Letters of Credit and shall not be waived by the

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execution and delivery of
this Agreement, any investigation by the Agent or the Banks, the making of
Loans, the issuance of Letters of Credit, or payment in full of the Loans.  All covenants and agreements of the Borrowers
contained in Section 7.01 [Affirmative Covenants], Section 7.02 [Negative
Covenants] and Section 7.03 [Reporting Requirements], and all comparable
covenants and agreements contained in or incorporated into the Guarantor
Joinder given by each Material Non-AGC Subsidiary pursuant to Section 10.18,
shall continue in full force and effect from and after the date hereof so long
as the Borrowers may borrow hereunder and until termination of the Commitments,
expiration of all Letters of Credit and payment in full of the Loans.  All covenants and agreements of the Borrowers
contained herein relating to the payment of principal, interest, premiums,
additional compensation or expenses and indemnification, including those set
forth in ARTICLE IV [Payments] and Section 9.05 [Reimbursement of Agent by
Borrowers, Etc.], Section 9.07 [Reimbursement of Agent by Banks, Etc.] and
Section 10.03 [Reimbursement of Banks by Borrowers; Etc.], and all comparable
covenants and agreements contained in or incorporated into the Guarantor
Joinder given by each Material Non-AGC Subsidiary pursuant to Section 10.18,
shall survive payment in full of the Loans, expiration of all Letters of Credit
and termination of the Commitments.

Section 10.11 
Successors and Assigns. 
(a)  This Agreement shall be binding upon and shall inure to
the benefit of the Banks, the Agent, the Borrowers and, when party to this
Agreement, each of the Material Subsidiaries, and their respective successors
and assigns, except that no Borrowers or any Material Subsidiary may assign or
transfer any of its rights or Obligations or any interest herein or in any
other Loan Document, except as may be permitted by the terms hereof or
otherwise approved by each Bank.  Each
Bank may, at its own cost, make assignments of or sell participations in all or
any part of its Revolving Credit Commitments and the Loans made by it to one or
more banks or other entities, subject to the consent of the Borrowers, the
Agent and each Issuing Bank with respect to any assignee, such consent not to
be unreasonably withheld, provided that (1) no consent of the
Borrowers shall be required (A) if an Event of Default exists and is
continuing, or (B) in the case of an assignment by a Bank to an Affiliate of
such Bank, (2) any assignment by a Bank to a Person other than an
Affiliate of such Bank may not be made in amounts less than the lesser of
$5,000,000 or the amount of the assigning Bank’s Commitment, (3) a Bank may
assign an interest or sell a participation in less than 100% of its
Commitments, Revolving Credit Loans, or Bid Loans, provided that such
Bank sells an equal percentage interest or participation in each of its
Revolving Credit Commitment and Revolving Credit Loans, (4) a Bank may assign a
Bid Loan to another Person without assigning any portion of its Commitment to
such Person and (5) no consent of the Agent or any Issuing Bank shall be
required in the case of an assignment by a Bank to an Affiliate of such Bank or
to another Bank already party to this Agreement.  In the case of an assignment, upon receipt by
the Agent of the Assignment and Assumption Agreement, the assignee shall have,
to the extent of such assignment (unless otherwise provided therein), the same
rights, benefits and obligations as it would have if it had been a signatory
Bank hereunder, the Commitments shall be adjusted accordingly, and upon
surrender of any Revolving Credit Note subject to such assignment, the
applicable Borrower shall execute and deliver a new Revolving Credit Note to
the assignee, if such assignee requests such a Note in an amount equal to the
amount of the Revolving Credit Commitment assumed by it and a new Revolving
Credit Note to the assigning Bank, if the assigning Bank requests such a Note
with respect to the Commitment it has retained. 
The assigning Bank shall surrender its Bid Note and the respective
Borrower shall execute and deliver to the assignee (and to the assignor if the
assignor is assigning less than all of its

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Revolving Credit Commitments
and Bid Loans) a new Bid Note in the form of Exhibit 1.01(B) as
appropriate.  Any Bank which assigns any
or all of its Commitment or Loans to a Person other than an Affiliate of such
Bank shall pay to the Agent a service fee in the amount of $3,500 for each
assignment.  In the case of a
participation, the participant shall only have the rights specified in Section
8.02 [Set-off] (the participant’s rights against such Bank in respect of such
participation to be those set forth in the agreement executed by such Bank in
favor of the participant relating thereto and not to include any voting rights
except with respect to changes of the type referenced in Section 10.01(a)
[Increase of Commitment, Etc.], Section 10.01(b) [Extension of Payment, Etc.],
or Section 10.01(c) [Release of Collateral or Guarantor]), all of such Bank’s
obligations under this Agreement or any other Loan Document shall remain
unchanged, and all amounts payable by any Borrower or any Material Subsidiary
hereunder or thereunder shall be determined as if such Bank had not sold such
participation.

(b)           Any
assignee or participant which is not incorporated under the Laws of the United
States of America or a state thereof shall deliver to the Borrowers and the
Agent the form of certificate described in Section 10.17 [Tax Withholding
Clause] relating to federal income tax withholding.  Each Bank may furnish any publicly available
information concerning the Borrowers or its Subsidiaries and any other
information concerning the Borrowers or its Subsidiaries in the possession of
such Bank from time to time to assignees and participants (including
prospective assignees or participants), provided that such assignees and
participants agree to be bound by the provisions of Section 10.12
[Confidentiality].

(c)           Notwithstanding
any other provision in this Agreement, any Bank may at any time pledge or grant
a security interest in all or any portion of its rights under this Agreement,
its Note (if any) and the other Loan Documents to any Federal Reserve Bank
without notice to or consent of the Borrowers or the Agent.  No such pledge or grant of a security
interest shall release the transferor Bank of its obligations hereunder or
under any other Loan Document.

Section
10.12  Confidentiality.  (a)  General.  The Agent and the Banks each agree to keep
confidential all information obtained from the Borrowers or their Subsidiaries
which is nonpublic and confidential or proprietary in nature (including any
information the Borrowers specifically designate as confidential), except as
provided below, and to use such information only in connection with their
respective capacities under this Agreement and for the purposes contemplated
hereby.  The Agent and the Banks shall be
permitted to disclose such information (i) to outside legal counsel,
accountants and other professional advisors who need to know such information
in connection with the administration and enforcement of this Agreement,
subject to agreement of such Persons to maintain the confidentiality of such
information as provided herein, (ii) to assignees and participants as
contemplated by Section 10.11, and prospective assignees and participants, provided
that Agent or such Bank, as the case may be, exercises its best efforts to
obtain the agreement of such prospective assignees and participants to be bound
by the confidentiality provisions hereof, (iii) to the extent requested by
any bank regulatory authority, any self-regulatory body or, to the extent
permissible and practicable, with notice to the Borrowers, as otherwise
required by applicable Law or by any subpoena or similar legal process, or in
connection with any investigation or proceeding arising out of the transactions
contemplated by this Agreement, (iv) if it becomes publicly available
other than as a result of a breach of this Agreement or becomes available from
a source not known to be subject to confidentiality restrictions, or
(v) if the Borrowers shall have consented to such disclosure.

 

 80

(b)           Sharing Information With
Affiliates of the Banks.  The
Borrowers acknowledge that from time to time financial advisory, investment
banking, and other services may be offered or provided to the Borrowers or one
or more of their Affiliates (in connection with this Agreement or otherwise) by
any Bank or by one or more Subsidiaries or Affiliates of such Bank and the
Borrowers hereby authorize each Bank to share any information delivered to such
Bank by the Borrowers or any of their Subsidiaries pursuant to this Agreement,
or in connection with the decision of such Bank to enter into this Agreement,
to any such Subsidiary or Affiliate of such Bank, it being understood that any
such Subsidiary or Affiliate of any Bank receiving such information shall be
bound by the provisions of Section 10.12 as if it were a Bank hereunder.  Such authorization shall survive the
repayment of the Loans and other Obligations and the termination of the
Commitments.

Section 10.13 
Counterparts.  This
Agreement may be executed by different parties hereto on any number of separate
counterparts, each of which, when so executed and delivered, shall be an
original, and all such counterparts shall together constitute one and the same
instrument.

Section 10.14 
Agent’s or Bank’s Consent.  Whenever the Agent’s or any Bank’s consent is
required to be obtained under this Agreement or any of the other Loan Documents
as a condition to any action, inaction, condition or event, the Agent and each
Bank shall be authorized to give or withhold such consent in its sole and
absolute discretion and to condition its consent upon the giving of additional
collateral, the payment of money or any other matter.

Section 10.15 
Exceptions.  The
representations, warranties and covenants contained herein shall be independent
of each other, and no exception to any representation, warranty or covenant
shall be deemed to be an exception to any other representation, warranty or
covenant contained herein unless expressly provided, nor shall any such
exceptions be deemed to permit any action or omission that would be in
contravention of applicable Law.

Section 10.16 
CONSENT TO FORUM; WAIVER OF JURY
TRIAL.  EACH OF THE
BORROWERS HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF ANY
NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA
SITTING IN NEW YORK CITY, AND WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT.  THE COMPANY CONSENTS
THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED OR REGISTERED MAIL
DIRECTED TO THE COMPANY AT THE ADDRESS PROVIDED FOR IN SECTION 10.06 AND
SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT
THEREOF.  HOLDINGS AND THE UK BORROWER
CONSENTS THAT ALL SERVICE OF PROCESS MAY BE MADE BY CERTIFIED OR REGISTERED
MAIL DIRECTED TO THE COMPANY AT THE ADDRESS PROVIDED IN SECTION 10.06 (AND
HOLDINGS AND THE UK BORROWER HEREBY IRREVOCABLY APPOINTS THE COMPANY AS ITS
AGENT TO RECEIVE SUCH SERVICE OF PROCESS), AND SERVICE SO MADE SHALL BE
COMPLETED UPON ACTUAL RECEIPT THEREOF. 
EACH OF THE BORROWERS WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF
ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN AND AGREES NOT TO ASSERT
ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE.

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EACH BORROWER, THE AGENT,
AND EACH OF THE BANKS HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, SUIT,
PROCEEDING, OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY COLLATERAL TO THE FULL EXTENT
PERMITTED BY LAW.

Section
10.17  Tax Withholding Clause.  Each Bank or assignee or participant of a
Bank that is not incorporated under the Laws of the United States of America or
a state thereof (and, upon the written request of the Agent, each other Bank or
assignee or participant of a Bank) agrees that it will deliver to each of the
Borrowers and the Agent two (2) duly completed appropriate valid Withholding
Certificates (as defined under § 1.1441-1(c)(16) of the Income Tax Regulations
(the “Regulations”)) certifying its status (i.e., U.S. or foreign person) and,
if appropriate, making a claim of reduced, or exemption from, U.S. withholding
tax on the basis of an income tax treaty or an exemption provided by the
Internal Revenue Code.  The term “Withholding
Certificate” means a Form W-9; a Form W-8BEN; a Form W-8ECI; a Form W-8IMY
and the related statements and certifications as required under §
1.1441-1(e)(2) and/or (3) of the Regulations; a statement described in §
1.871-14(c)(2)(v) of the Regulations; or any other certificates under the
Internal Revenue Code or Regulations that certify or establish the status of a
payee or beneficial owner as a U.S. or foreign person.  Each Bank, assignee or participant required
to deliver to the Borrowers and the Agent a Withholding Certificate pursuant to
the preceding sentence shall deliver such valid Withholding Certificate as
follows:  (A) each Bank which is a
party hereto on the Closing Date shall deliver such valid Withholding
Certificate at least five (5) Business Days prior to the first date on which
any interest or fees are payable by the Borrowers hereunder for the account of
such Bank; (B) each assignee or participant shall deliver such valid
Withholding Certificate at least five (5) Business Days before the effective
date of such assignment or participation (unless the Agent in its sole discretion
shall permit such assignee or participant to deliver such valid Withholding
Certificate less than five (5) Business Days before such date in which case it
shall be due on the date specified by the Agent).  Each Bank, assignee or participant which so
delivers a valid Withholding Certificate further undertakes to deliver to each
of the Borrowers and the Agent two (2) additional copies of such Withholding
Certificate (or a successor form) on or before the date that such Withholding
Certificate expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent Withholding Certificate so delivered by
it, and such amendments thereto or extensions or renewals thereof as may be
reasonably requested by the Borrowers or the Agent.  Notwithstanding the submission of a
Withholding Certificate claiming a reduced rate of or exemption from U.S.
withholding tax, the Agent shall be entitled to withhold United States federal
income taxes at the full 30% withholding rate if in its reasonable judgment it
is required to do so under the due diligence requirements imposed upon a
withholding agent under § 1.1441-7(b) of the Regulations.  Further, the Agent is indemnified under §
1.1461-1(e) of the Regulations against any claims and demands of any Bank or
assignee or participant of a Bank for the amount of any tax it deducts and
withholds in accordance with regulations under § 1441 of the Internal Revenue
Code.

Section 10.18 
Joinder of Guarantors.  Any
Material Non-AGC Subsidiary of Holdings which is required to be a Guarantor
pursuant to Section 7.02(i) [Subsidiaries, Partnerships and Joint Ventures]
shall execute and deliver to the Agent (i) a Guarantor Joinder in
substantially the form attached hereto as Exhibit 1.01(G)(1)
pursuant to which it shall join as a 

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Guarantor each of the
documents to which the Guarantors are parties; and (ii) documents in the
forms described in Section 6.01 [Closing Date] modified as appropriate to
relate to such Subsidiary.  Holdings
shall deliver such Guarantor Joinder and related documents to the Agent within
five (5) Business Days after, as the case may be, the date of the acquisition
of such Subsidiary, the date upon which a Subsidiary meets the criteria for a
Material Non-AGC Subsidiary as set forth in the definition thereof in Section
1.01, or the date the filing of such Subsidiary’s certificate or articles of
incorporation if the Subsidiary is a corporation, the date of the filing of its
certificate of limited partnership if it is a limited partnership or the date
of its organization if it is an entity other than a limited partnership or
corporation.

Section 10.19 
Limited Recourse. 
Notwithstanding anything contained in this Agreement or any other Loan
Document, except as expressly provided herein and therein the obligations of
the Borrowers hereunder and thereunder are several and not joint, and in no
event shall the Banks or the Agent have legal recourse to (i) Holdings with
respect to Loans incurred by or Letters of Credit issued for the account of the
Company or the UK Borrower and (ii) the Company or the UK Borrower with respect
to Loans incurred by or Letters of Credit for the account of Holdings, AGRI or
AGRO (it being understood and agreed that the Banks and the Agent shall have
legal recourse to the Company with respect to Loans incurred by and Letters of
Credit issued for the account of the UK Borrower in accordance with the terms
of the Guaranty Agreement entered into by the Company).

Section 10.20 
Change of Lending Office. 
Each Bank may transfer and carry its Loans and/or Commitments at, to or
for the account of any branch office, subsidiary or affiliate of such Bank; provided
that no Borrower shall be responsible for costs arising under
Sections 3.04, 4.06 or 4.07 resulting from any such transfer to the extent
such costs would not otherwise be applicable to such Bank in the absence of
such transfer.

Section 10.21 
USA Patriot Act.  Each Bank
hereby notifies the Borrowers and Guarantors that pursuant to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October
26, 2001)) (the “Act”), it is required to obtain, verify and record information
that identifies the Borrowers and Guarantors, which information includes the
name and address of each Borrower and Guarantor and other information that will
allow such Bank to identify such Borrower and Guarantor in accordance with the
Act, and each Borrower and each Guarantor agrees to provide such information
from time to time to each Bank.

[SIGNATURE PAGES
FOLLOW]

 83
 

IN WITNESS WHEREOF, the parties hereto, by their
officers thereunto duly authorized, have executed this Agreement as of the day
and year first above written.

	
   

  	
  ASSURED GUARANTY LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Robert B. Mills

  
	
   

  	
   Title: Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ASSURED GUARANTY CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Robert B. Mills

  
	
   

  	
   Title: Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ASSURED GUARANTY (UK) LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Robert B. Mills

  
	
   

  	
   Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ASSURED GUARANTY RE LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ David Penchoff

  
	
   

  	
   Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ASSURED GUARANTY RE OVERSEAS LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Robert B. Mills

  
	
   

  	
   Title: Chief Financial Officer

  

 

 84
 

 

	
  

  	
  ABN AMRO BANK N.V., Individually and as Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Neil R. Stein

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael DeMarco

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 85
 

 

	
  

  	
  BANK OF AMERICA N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Shelly K. Brown

  
	
   

  	
   

  	
  Title: Senior Vice President

  

 

 86
 

 

	
  

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT DATED AS OF
  NOVEMBER 6, 2006, AMONG ASSURED GUARANTY LTD., ASSURED GUARANTY CORP.,
  ASSURED GUARANTY (UK) LTD., ASSURED GUARANTY RE LTD., ASSURED GUARANTY RE
  OVERSEAS LTD., THE BANKS PARTY HERETO FROM TIME TO TIME, ABN AMRO BANK N.V.,
  AS ADMINISTRATIVE AGENT

  
	
   

  	
   

  	
   

  
	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  	
   

  
	
   

  	
  The Bank of New York

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Richard
  G. Shaw

  	
   

  
	
   

  	
   

  	
  Title:  Vice
  President

  

 

 87
 

 

	
  

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT DATED AS OF
  NOVEMBER 6, 2006, AMONG ASSURED GUARANTY LTD., ASSURED GUARANTY CORP.,
  ASSURED GUARANTY (UK) LTD., ASSURED GUARANTY RE LTD., ASSURED GUARANTY RE
  OVERSEAS LTD., THE BANKS PARTY HERETO FROM TIME TO TIME, ABN AMRO BANK N.V.,
  AS ADMINISTRATIVE AGENT

  
	
   

  	
   

  	
   

  
	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  	
   

  
	
   

  	
  Deutsche Bank AG New York Branch

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Ruth
  Leung

  	
   

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ John S.
  McGill

  	
   

  
	
   

  	
   

  	
  Title: Director

  

 

 88
 

 

	
  

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT DATED AS OF
  NOVEMBER 6, 2006, AMONG ASSURED GUARANTY LTD., ASSURED GUARANTY CORP.,
  ASSURED GUARANTY (UK) LTD., ASSURED GUARANTY RE LTD., ASSURED GUARANTY RE
  OVERSEAS LTD., THE BANKS PARTY HERETO FROM TIME TO TIME, ABN AMRO BANK N.V.,
  AS ADMINISTRATIVE AGENT

  
	
   

  	
   

  	
   

  
	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  	
   

  
	
   

  	
  Wachovia Bank, National Association

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Joan
  Anderson

  	
   

  
	
   

  	
   

  	
  Title: 
  Director

  

 

 89
 

 

	
  

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT DATED AS OF
  NOVEMBER 6, 2006, AMONG ASSURED GUARANTY LTD., ASSURED GUARANTY CORP.,
  ASSURED GUARANTY (UK) LTD., ASSURED GUARANTY RE LTD., ASSURED GUARANTY RE
  OVERSEAS LTD., THE BANKS PARTY HERETO FROM TIME TO TIME, ABN AMRO BANK N.V.,
  AS ADMINISTRATIVE AGENT

  
	
   

  	
   

  	
   

  
	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  	
   

  
	
   

  	
  Merrill Lynch Bank USA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Louis Alder

  	
   

  
	
   

  	
   

  	
  Title: 
  Director

  

 

 90
 

 

	
  

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT DATED AS OF
  NOVEMBER 6, 2006, AMONG ASSURED GUARANTY LTD., ASSURED GUARANTY CORP.,
  ASSURED GUARANTY (UK) LTD., ASSURED GUARANTY RE LTD., ASSURED GUARANTY RE
  OVERSEAS LTD., THE BANKS PARTY HERETO FROM TIME TO TIME, ABN AMRO BANK N.V.,
  AS ADMINISTRATIVE AGENT

  
	
   

  	
   

  	
   

  
	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMorgan Chase Bank, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Lawrence
  Palumbo, Jr.

  	
   

  
	
   

  	
   

  	
  Title: Vice President

  

 

 91
 

 

	
  

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT DATED AS OF
  NOVEMBER 6, 2006, AMONG ASSURED GUARANTY LTD., ASSURED GUARANTY CORP.,
  ASSURED GUARANTY (UK) LTD., ASSURED GUARANTY RE LTD., ASSURED GUARANTY RE
  OVERSEAS LTD., THE BANKS PARTY HERETO FROM TIME TO TIME, ABN AMRO BANK N.V.,
  AS ADMINISTRATIVE AGENT

  
	
   

  	
   

  	
   

  
	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  	
   

  
	
   

  	
  KeyBank National Association

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary K. Young

  	
   

  
	
   

  	
   

  	
  Title: Senior Vice President 

  

 

 92
 

 

	
  

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT DATED AS OF
  NOVEMBER 6, 2006, AMONG ASSURED GUARANTY LTD., ASSURED GUARANTY CORP.,
  ASSURED GUARANTY (UK) LTD., ASSURED GUARANTY RE LTD., ASSURED GUARANTY RE
  OVERSEAS LTD., THE BANKS PARTY HERETO FROM TIME TO TIME, ABN AMRO BANK N.V.,
  AS ADMINISTRATIVE AGENT

  
	
   

  	
   

  	
   

  
	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  	
   

  
	
   

  	
  Citibank N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Thomas Fontana

  	
   

  
	
   

  	
   

  	
  Title: Managing Director

  

 

 93
 

 

	
  

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT DATED AS OF
  NOVEMBER 6, 2006, AMONG ASSURED GUARANTY LTD., ASSURED GUARANTY CORP.,
  ASSURED GUARANTY (UK) LTD., ASSURED GUARANTY RE LTD., ASSURED GUARANTY RE
  OVERSEAS LTD., THE BANKS PARTY HERETO FROM TIME TO TIME, ABN AMRO BANK N.V.,
  AS ADMINISTRATIVE AGENT

  
	
   

  	
   

  	
   

  
	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  	
   

  
	
   

  	
  PNC Bank, National Association

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Edward J.
  Chidiac

  	
   

  
	
   

  	
   

  	
  Title: Managing Director 

  

 

 94Exhibit 10.2

AMENDMENT
NO. 1

ASSURED
GUARANTY CORP.

ASSURED GUARANTY CORP. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

WHEREAS,
Assured Guaranty Corp., a corporation organized and existing under the laws of
Maryland, (the “Company”) and a wholly-owned subsidiary of Assured Guaranty
Ltd., maintains the Assured Guaranty Corp. Supplemental Executive Retirement
Plan (the “Plan”); and

WHEREAS,
it is now considered desirable to amend the Plan to clarify that a participant’s
election under the Plan shall continue in effect during future plan years
unless superseded by a new election.

NOW THEREFORE, IT IS
RESOLVED that by virtue and in exercise of the amending power reserved
to the Company under the Plan and delegated to the undersigned officer of the
Company, the Plan shall be, and hereby is, amended, effective as of January 1,
2006, by adding the following new sentence to the end of Section 3.2(a) as a
part thereof:

“A Deferral Election shall remain in
effect for subsequent calendar years until a new Deferral Election is submitted
to the Administrator prior to the beginning of such subsequent calendar year.”

IN WITNESS WHEREOF, Assured Guaranty Corp. has caused
this amendment to be signed by its duly authorized officer this 3 day of May,
2007.

	
   

  	
  Assured Guaranty Corp.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ James M. Michener

  	
   

  
	
   

  	
  Its: General Counsel & Secreatry

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