Document:

Prepared and filed by St Ives Burrups

Exhibit
      10.1

 CONFORMED
      EXECUTION COPY

CREDIT AGREEMENT

among

ENDURANCE
SPECIALTY HOLDINGS LTD.,

 VARIOUS
DESIGNATED SUBSIDIARY BORROWERS,

VARIOUS
LENDING INSTITUTIONS,

and

JPMORGAN
    CHASE BANK,

as
    ADMINISTRATIVE AGENT

Dated
    as of August 6, 2004

$850,000,000

J.P.
    MORGAN SECURITIES INC., 

and 

WACHOVIA CAPITAL MARKETS, LLC 

as JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS,

and

WACHOVIA BANK, NATIONAL ASSOCIATION, 

as SYNDICATION AGENT

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CREDIT AGREEMENT,
    dated as of August 6, 2004, among ENDURANCE SPECIALTY HOLDINGS LTD., a company
    organized under the laws of Bermuda (the “Parent Borrower”), the
    Designated Subsidiary Borrowers (as hereinafter defined) from time to time
    party hereto, the lending institutions listed from time to time on Annex
    I hereto (each a “Lender” and, collectively, the “Lenders”),
    and JPMORGAN CHASE BANK, as Administrative Agent (the “Administrative
    Agent”). Unless otherwise defined herein, all capitalized terms used
    herein and defined in Section 10 are used herein as so defined.

W I T N E S S E T H:

WHEREAS, subject
    to and upon the terms and conditions herein set forth, the Lenders are willing
    to make available to the Borrowers the credit facilities provided for herein;

NOW, THEREFORE, it is agreed:

   SECTION
    1.    Amount and Terms of Credit. 

  1.01   Revolving
           Loans.   (a)   Subject
            to and upon the terms and conditions set forth herein (including,
           on and after
    the initial Additional Tranche 1 Commitment Date, Section 1.15), each Tranche
            1 Lender severally agrees, at any time and from time to time after
           the Effective
    Date and prior to the Commitment Expiration Date, to make a loan or loans
            (each, a “Tranche 1 Revolving Loan” and, collectively,
            the “Tranche
    1 Revolving Loans”) to one or more of the Borrowers (on a several basis),
     which Tranche 1 Revolving Loans (i) shall be denominated in Dollars, (ii)

    shall, at the option of the respective Borrower, be incurred and maintained
     as and/or converted into Base Rate Loans or Eurodollar Loans, provided
    that, except as otherwise specifically provided in Section 1.10(b), all Tranche
     1 Revolving Loans comprising the same Borrowing shall at all times be of
    the
    same Type, (iii) may be repaid and reborrowed at any time in accordance with
     the provisions hereof, (iv) shall not exceed for any Tranche 1 Lender at
    any
    time outstanding that aggregate principal amount which, when added to such
     Tranche 1 Lender’s Tranche 1 Percentage of the aggregate amount of
     all  Tranche 1 Letter of Credit Outstandings (if any) (exclusive of Tranche
     1 Unpaid
    Drawings which are repaid with the proceeds of, and simultaneously with the
      incurrence of, the respective incurrence of Tranche 1 Revolving Loans)
     at
    such time, equals the Tranche 1 Commitment of such Tranche 1 Lender at such
      time, (v) shall not exceed for any Borrower at any time outstanding that
     aggregate
    amount which, when added to all Tranche 1 Letter of Credit Outstandings (if
      any) (exclusive of Tranche 1 Unpaid Drawings which are repaid with the
     proceeds
    of, and simultaneously with the incurrence of, Tranche 1 Revolving Loans)
      attributable to such Borrower at such time, equals such Borrower’s
      Borrowing  Base at such time, and (vi) shall not exceed at any time outstanding
      that
    aggregate principal amount which, when added to all Tranche 1 Letter of Credit
       Outstandings at such time, equals the Total Tranche 1 Commitment at such
      time.
    

(b)   Subject
      to and upon the terms and conditions set forth herein, each Tranche 2 Lender
      severally agrees, at any time and from time to time after the
      Effective Date and prior to the Commitment Expiration Date, to make a loan
      or loans (each, a “Tranche 2 Revolving Loan” and, collectively,
      the “Tranche 2 Revolving Loans”)
      to one or more of the Borrowers (on a several basis), which Tranche 2 Revolving
      Loans (i) shall be denominated in Dollars, (ii) shall, at the option of
      the respective Borrower, be incurred and maintained as and/or converted
  into Base Rate
  Loans or Eurodollar Loans, provided that, except as otherwise specifically
  provided in Section 1.10(b), all Tranche 2 Revolving Loans comprising the same
  Borrowing shall at all times be of the same Type, (iii) may be repaid and reborrowed
  at any time in accordance with the provisions hereof, (iv) shall not exceed
  for any Tranche 2 Lender at any time outstanding that aggregate principal amount
  which, when added to such Tranche 2 Lender’s Tranche 2 Percentage of the
  aggregate amount of all Tranche 2 Letter of Credit Outstandings (if any) (exclusive
  of Tranche 2 Unpaid Drawings which are repaid with the proceeds of, and simultaneously
  with the incurrence of, the respective incurrence of Tranche 2 Revolving Loans)
  at such time, equals the Tranche 2 Commitment of such Tranche 2 Lender at such
  time and (v) shall not exceed at any time outstanding that aggregate principal
  amount which, when added to all Tranche 2 Letter of Credit Outstandings at
  such time, equals the Total Tranche 2
Commitment as such time.

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(c)   Subject
    to and upon the terms and conditions set forth herein, each Tranche 3 Lender
    severally agrees, at any time and from time to time after the Effective Date
    and prior to the Commitment Expiration Date, to make a loan or loans (each,
    a “Tranche 3 Revolving Loan” and, collectively, the “Tranche
    3 Revolving Loans”) to one or more of the Borrowers (on a several basis),
    which Tranche 3 Revolving Loans (i) shall be denominated in Dollars, (ii)
    shall, at the option of the respective Borrower, be incurred and maintained
    as and/or converted into Base Rate Loans or Eurodollar Loans, provided that,
    except as otherwise specifically provided in Section 1.10(b), all Tranche
    3 Revolving Loans comprising the same Borrowing shall at all times be of
    the same Type, (iii) may be repaid and reborrowed at any time in accordance
    with the provisions hereof, (iv) shall not exceed for any Tranche 3 Lender
    at any time outstanding that aggregate principal amount which equals the
    Tranche 3 Commitment of such Tranche 3 Lender at such time and (v) shall
    not exceed at any time outstanding that aggregate principal amount which
    equals the Total Tranche 3 Commitment as such time.

(d)   Notwithstanding
    anything to the contrary contained in this Section 1.01 or elsewhere in this
    Agreement, each incurrence of Tranche 2 Revolving Loans or Tranche 3 Revolving
    Loans shall consist of a Borrowing of Tranche 2 Revolving Loans and a Borrowing
    of Tranche 3 Revolving Loans, with such Borrowings to be made pro rata on
    the basis of the Tranche 2 Revolving Percentage and the Tranche 3 Revolving
    Percentage, in each case in effect at the time of such Borrowings.

  1.02   Minimum
    Amount of Each Borrowing; Maximum Number of Borrowings.   The
    aggregate principal amount of each Borrowing hereunder shall not be less than
    $5,000,000. More than one Borrowing may be incurred on any day; provided
    that at no time shall there be outstanding more than ten Borrowings of Eurodollar
    Loans in the aggregate for all Tranches. 

  1.03   Notice
           of Borrowing.    (a)   Whenever
           a Borrower  desires to incur Revolving Loans, it shall give the Administrative
           Agent at
    its Notice Office, (x) prior to 11:00 A.M. (New York time), at least three
            Business Days’ prior written notice (or telephonic notice promptly
            confirmed  in writing) of each Borrowing of Eurodollar Loans or (y)
            prior to 10:00 A.M.
    (New York time) on the day of each Borrowing of Base Rate Loans, prior written
             notice (or telephonic notice promptly confirmed in writing). Each
            such notice
    (a “Notice of Borrowing”), except as otherwise expressly provided
     in Section 1.10, shall be irrevocable, and, in the case of a written notice

    and a confirmation of telephonic notice, shall be in the form of Exhibit
    A hereto, appropriately completed to specify (i) the aggregate principal
    amount of the Revolving Loans to be made pursuant to such Borrowing, (ii)
    the date of such Borrowing (which shall be a Business Day), (iii) whether
    the respective Borrowing shall consist of Tranche 1 Revolving Loans, Tranche
    2 Revolving Loans or Tranche 3 Revolving Loans, and (iv) whether the respective
    Borrowings shall consist of Base Rate Loans or Eurodollar Loans and, if Eurodollar
    Loans, the Interest Period to be initially applicable thereto. The Administrative
    Agent shall promptly give each Lender written notice (or telephonic notice
    promptly confirmed in writing) of each proposed Borrowing, of such Lender’s
    proportionate share thereof and of the other matters covered by the Notice
    of Borrowing.

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(b)   Without
    in any way limiting the obligation of each Borrower to confirm in writing
    any notice it may give hereunder by telephone, the Administrative Agent may
    act prior to receipt of written confirmation without liability upon the basis
    of such telephonic notice, believed by the Administrative Agent in good faith
    to be from an Authorized Officer of such Borrower. In each such case, the
    Administrative Agent’s record of the terms of any such telephonic notice
    shall be conclusive absent manifest error.

  1.04   
    Disbursement of Funds.   (a)   Subject
    to the terms and conditions herein set forth, no later than 11:00 A.M. (New
    York time) on the date of each incurrence of Revolving Loans, each Lender
    with a Commitment of the respective Tranche will make available to the Administrative
    Agent its pro rata share of each Borrowing requested to be made
    on such date in the manner provided below. 

(b)   Each
    Lender with a Commitment of the respective Tranche shall make available all
    amounts it is to fund under any Borrowing in Dollars and immediately available
    funds to the Administrative Agent at the Payment Office and the Administrative
    Agent will make available to the respective Borrower as promptly as practicable
    by depositing to its account at the Payment Office the aggregate of the amounts
    so made available in the type of funds received. Unless the Administrative
    Agent shall have been notified by any Lender prior to the date of any such
    Borrowing that such Lender does not intend to make available to the Administrative
    Agent its portion of the Borrowing or Borrowings to be made on such date,
    the Administrative Agent may assume that such Lender has made such amount
    available to the Administrative Agent on the date of such Borrowing, and
    the Administrative Agent, in reliance upon such assumption, may (in its sole
    discretion and without any obligation to do so) make available to the respective
    Borrower a corresponding amount. If such corresponding amount is not in fact
    made available to the Administrative Agent by such Lender and the Administrative
    Agent has made available same to the respective Borrower, the Administrative
    Agent shall be entitled to recover such corresponding amount from such Lender.
    If such Lender does not pay such corresponding amount forthwith upon the
    Administrative Agent’s demand therefor, the Administrative Agent shall
    promptly notify the respective Borrower, and such Borrower shall pay such
    corresponding amount to the Administrative Agent within two Business Days.
    The Administrative Agent shall also be entitled to recover from the Lender
    or the applicable Borrower, as the case may be, interest on such corresponding
    amount in respect of each day from the date such corresponding amount was
    made available by the Administrative Agent to such Borrower to the date such
    corresponding amount is recovered by the Administrative Agent, at a rate
    per annum equal to (x) if paid by such Lender, the overnight Federal Funds
  Effective Rate or (y) if paid by such Borrower,
    the then applicable rate of interest, calculated in accordance with Section
  1.08(a) or (b), as the case may be, for the respective Revolving Loans.

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(c)   Nothing
    in this Section 1.04 shall be deemed to relieve any Lender from its obligation
    to fulfill its commitments hereunder or to prejudice any rights which any
    Borrower may have against any Lender as a result of any default by such Lender
    hereunder.

  1.05   
    Notes.   (a)   Each Borrower’s obligation
    to pay the principal of, and interest on, all of the Revolving Loans made
    to it by each Lender shall be evidenced in the Register maintained by the
    Administrative Agent pursuant to Section 12.16 and shall, if requested by
    such Lender, also be evidenced by (i) in the case of Tranche 1 Revolving Loans,
    a promissory note substantially in the form of Exhibit B-1 with blanks appropriately
    completed in conformity herewith (each, a “Tranche 1 Note” and collectively,
    the “Tranche 1 Notes”), (ii) in the case of Tranche 2 Revolving
    Loans, a promissory note substantially in the form of Exhibit B-2 with blanks
    appropriately completed in conformity herewith (each, a “Tranche 2 Note”
    and collectively, the “Tranche 2 Notes”) and (iii) in the case of
    Tranche 3 Revolving Loans, a promissory note substantially in the form of
    Exhibit B-3 with blanks appropriately completed in conformity herewith (each,
    a “Tranche 3 Note” and collectively, the “Tranche 3 Notes”).
    

(b)   The
    Tranche 1 Note issued to each Tranche 1 Lender that has requested same shall
    (i) be executed by the respective Borrower, (ii) be payable to the order
    of such Tranche 1 Lender and be dated the Effective Date (or if issued after
    the Effective Date, be dated the date of the issuance thereof), (iii) be
    in a stated principal amount equal to the Tranche 1 Commitment of such Tranche
    1 Lender and be payable in a principal amount equal to the amount of the
    Tranche 1 Revolving Loans made by such Tranche 1 Lender and which are outstanding
    from time to time, (iv) mature on the Commitment Expiration Date, (v) bear
    interest as provided in the appropriate clause of Section 1.08 in respect
    of the Base Rate Loans and Eurodollar Loans, as the case may be, evidenced
    thereby, (vi) be subject to voluntary prepayment as provided in Section 4.01
    and mandatory repayment as provided in Section 4.02 and (vii) be entitled
    to the benefits of this Agreement and the other Credit Documents. Upon receipt
    of an affidavit of an officer of a Tranche 1 Lender (together with a customary
    indemnity from such Tranche 1 Lender in form and substance satisfactory to
    the respective Borrower) that a Tranche 1 Note has been lost, stolen, destroyed
    or mutilated, such Borrower will issue a replacement Tranche 1 Note in the
  same principal amount thereof and otherwise of like tender.

  (c)   The
    Tranche 2 Note issued to each Tranche 2 Lender that has requested same shall
    (i) be executed by the respective Borrower, (ii) be payable to the order of
    such Tranche 2 Lender and be dated the Effective Date (or if issued after
    the Effective Date, be dated the date of the issuance thereof), (iii) be in
    a stated principal amount equal to the Tranche 2 Commitment of such Tranche
    2 Lender and be payable in a principal amount equal to the amount of the Tranche
    2 Revolving Loans made by such Tranche 2 Lender and which are outstanding
    from time to time, (iv) mature on the Commitment Expiration Date, (v) bear
    interest as provided in the appropriate clause of Section 1.08 in respect
    of the Base Rate Loans and Eurodollar Loans, as the case may be, evidenced
    thereby, (vi) be subject to voluntary prepayment as provided in Section 4.01
    and mandatory repayment as provided in Section 4.02 and (vii) be entitled
    to the benefits of this Agreement and the other Credit Documents (other than
    the Security Documents). Upon receipt of an affidavit of an officer of a Tranche
    2 Lender (together with a customary indemnity from such Tranche 2 Lender in
    form and substance satisfactory to the respective Borrower) that a Tranche
    2 Note has been lost, stolen, destroyed or mutilated, such Borrower will issue
    a replacement Tranche 2 Note in the same principal amount thereof and otherwise
    of like tender. 

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  (d)   The
    Tranche 3 Note issued to each Tranche 3 Lender that has requested same shall
    (i) be executed by the respective Borrower, (ii) be payable to the order of
    such Tranche 3 Lender and be dated the Effective Date (or if issued after
    the Effective Date, be dated the date of the issuance thereof), (iii) be in
    a stated principal amount equal to the Tranche 3 Commitment of such Tranche
    3 Lender and be payable in a principal amount equal to the amount of the Tranche
    3 Revolving Loans made by such Tranche 3 Lender and which are outstanding
    from time to time, (iv) mature on the Commitment Expiration Date, (v) bear
    interest as provided in the appropriate clause of Section 1.08 in respect
    of the Base Rate Loans and Eurodollar Loans, as the case may be, evidenced
    thereby, (vi) be subject to voluntary prepayment as provided in Section 4.01
    and mandatory repayment as provided in Section 4.02 and (vii) be entitled
    to the benefits of this Agreement and the other Credit Documents (other than
    the Security Documents). Upon receipt of an affidavit of an officer of a Tranche
    3 Lender (together with a customary indemnity from such Tranche 3 Lender in
    form and substance satisfactory to the respective Borrower) that a Tranche
    3 Note has been lost, stolen, destroyed or mutilated, such Borrower will issue
    a replacement Tranche 3 Note in the same principal amount thereof and otherwise
    of like tender.

  (e)   Each
    Lender will record on its internal records the amount of each Revolving Loan
    made by it and each payment in respect thereof and will prior to any transfer
    of its Note endorse on the reverse side thereof the outstanding principal
    amount of Revolving Loans evidenced thereby. Failure to make any such notation
    or any error in any such notation shall not affect the respective Borrower’s
    obligations in respect of such Revolving Loans.

   (f)   Notwithstanding
    anything to the contrary contained above in this Section 1.05 or elsewhere
    in this Agreement, Notes shall only be delivered to Lenders which at any time
    specifically request the delivery of such Notes. No failure of any Lender
    to request or obtain a Note evidencing its Revolving Loans to the respective
    Borrower shall affect or in any manner impair the obligations of such Borrower
    to pay the Revolving Loans (and all related Obligations) incurred by such
    Borrower which would otherwise be evidenced thereby in accordance with the
    requirements of this Agreement. Any Lender which does not have a Note evidencing
    its outstanding Revolving Loans shall in no event be required to make the
    notations otherwise described in preceding clause (e). At any time when any
    Lender requests the delivery of a Note to evidence any of its Revolving Loans,
    each Borrower shall promptly execute and deliver to the respective Lender
    the requested Note in the appropriate amount or amounts to evidence such Revolving
    Loans.

  1.06   Conversions.
    Each Borrower shall have the option to convert on any Business Day all or
    a portion at least equal to $1,000,000 of the outstanding principal amount
    of its Revolving Loans of one Type and Tranche into a Borrowing or Borrowings
    of the same Tranche but other Type of Revolving Loans; provided that
    (i) no partial conversion of a Borrowing of Eurodollar Loans shall reduce
    the outstanding principal amount of the Eurodollar Loans pursuant to such
    Borrowing to less than $1,000,000, (ii) Base Rate Loans may not be converted
    into Eurodollar Loans if any Default or Event of Default is in existence on
    the date of the conversion if the Administrative Agent or the Required Lenders
    have previously advised the

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 Borrowers
  that conversions will not be permitted while such Default or Event of Default,
  as the case may be, remains in existence, (iii) Borrowings of Eurodollar Loans
  resulting from this Section 1.06 shall be limited in number as provided in Section
  1.02, (iv) Eurodollar Loans may only be converted into Base Rate Loans on the
  last day of the Interest Period applicable thereto, and (v) each such conversion
  shall be made pro
  rata among the Revolving Loans of each Lender of the Type and Tranche
  being converted. Each such conversion shall be effected by the respective Borrower
  by giving the Administrative Agent at its Notice Office, prior to 11:00 A.M.
  (New York time), at least three Business Days’ (or one Business Day’s
  in the case of a conversion into Base Rate Loans) prior written notice (or telephonic
  notice promptly confirmed in writing) (each a “Notice of Conversion”)
  specifying the Revolving Loans to be so converted, the Type and Tranche of Revolving
  Loans to be converted into and, if to be converted into a Borrowing of Eurodollar
  Loans, the Interest Period to be initially applicable thereto. The Administrative
  Agent shall give each Lender prompt notice of any such proposed conversion affecting
  any of its Revolving Loans. 

  1.07   Pro
    Rata Borrowings.
    All Borrowings of Revolving Loans under this Agreement shall be incurred by
    the respective Borrower from the Lenders pro rata on the basis
    of their Tranche 1 Commitments, Tranche 2 Commitments or Tranche 3 Commitments,
    as the case may be. It is understood that no Lender shall be responsible for
    any default by any other Lender in its obligation to make Revolving Loans
    hereunder and that each Lender shall be obligated to make the Revolving Loans
    provided to be made by it hereunder, regardless of the failure of any other
    Lender to fulfill its commitments hereunder. 

  1.08   
    Interest   
    (a)   The unpaid principal amount of each Base Rate Loan shall
    bear interest from the date of the Borrowing thereof until the earlier of
    (i) the maturity (whether by acceleration or otherwise) of such Base Rate
    Loan and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan pursuant
    to Section 1.06, at a rate per annum which shall at all times
    be the Applicable Margin then in effect for Base Rate Loans plus the Base
    Rate in effect from time to time. 

  (b)   The
    unpaid principal amount of each Eurodollar Loan shall bear interest from the
    date of the Borrowing thereof until the earlier of (i) the maturity (whether
    by acceleration or otherwise) of such Eurodollar Loan or (ii) the conversion
    of such Eurodollar Loan to a Base Rate Loan pursuant to Sections 1.06, 1.09
    or 1.10(b), as applicable, at a rate per
    annum which shall at all times be the Applicable Margin then in effect
    for Eurodollar Loans plus the relevant Eurodollar Rate for the Interest Period
    applicable to such Eurodollar Loan. 

  (c)   Overdue
    principal and, to the extent permitted by law, overdue interest in respect
    of each Revolving Loan and any other overdue amount payable hereunder shall
    be payable on demand and shall bear interest at a rate per
    annum equal to the Applicable Margin then in effect for Base Rate Loans
    of the respective Tranche plus the Base Rate in effect from time to time plus
    2%, provided that overdue principal in respect of Eurodollar Loans
    shall bear interest until the end of the Interest Period applicable to such
    Eurodollar Loans at a rate per annum equal to 2% in excess of the rate
    otherwise applicable to such Eurodollar Loans. 

  (d)   Interest
    shall accrue from and including the date of any Borrowing to but excluding
    the date of any repayment thereof and shall be payable (i) in respect of each
    Base Rate Loan, quarterly in arrears on the last Business Day of each calendar
    quarter, (ii) in respect of each Eurodollar Loan, on the last day of each
    Interest Period applicable thereto and, in the case of an Interest Period
    of six months, on the date occurring three months after the first day of such
    Interest Period and (iii) in respect of each Revolving Loan, on any conversion
    or prepayment (on the amount so converted or prepaid), at maturity (whether
    by acceleration or otherwise) and, after such maturity, on demand. 

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  (e)   All
    computations of interest on Revolving Loans hereunder shall be made in accordance
    with Section 12.07(b).

  (f)   The
    Administrative Agent, upon determining the interest rate for any Borrowing
    of Eurodollar Loans for any Interest Period, shall promptly notify the respective
    Borrower and the Lenders thereof.

  1.09   Interest
    Periods.
    At the time a Borrower gives a Notice of Borrowing or Notice of Conversion
    in respect of the making of, or conversion into, a Borrowing of Eurodollar
    Loans (in the case of the initial Interest Period applicable thereto) or prior
    to 11:00 A.M. (New York time) on the third Business Day prior to the expiration
    of an Interest Period applicable to a Borrowing of Eurodollar Loans, it shall
    have the right to elect by giving the Administrative Agent written notice
    (or telephonic notice promptly confirmed in writing) of the Interest Period
    to be applicable to such Borrowing, which Interest Period shall, at the option
    of the respective Borrower, be a one, two, three or six month period. Notwithstanding
    anything to the contrary contained above: 

  (i)   the
    initial Interest Period for any Borrowing of Eurodollar Loans shall commence
    on the date of such Borrowing (including the date of any conversion from a
    Borrowing of Base Rate Loans) and each Interest Period occurring thereafter
    in respect of such Borrowing shall commence on the day on which the next preceding
    Interest Period expires;

  (ii)   if
    any Interest Period begins on a day for which there is no numerically corresponding
    day in the calendar month at the end of such Interest Period, such Interest
    Period shall end on the last Business Day of such calendar month;

   (iii)   if
    any Interest Period would otherwise expire on a day which is not a Business
    Day, such Interest Period shall expire on the next succeeding Business Day,
    provided
    that if any Interest Period would otherwise expire on a day which is not a
    Business Day but is a day of the month after which no further Business Day
    occurs in such month, such Interest Period shall expire on the next preceding
    Business Day; 

   (iv)   no
    Interest Period may be elected if it would extend beyond the Commitment Expiration
    Date; and

   (v)   no
    Interest Period may be selected at any time when a Default or Event of Default
    is then in existence if the Administrative Agent or the Required Lenders have
    previously advised the Borrowers that the selection of Interest Periods will
    not be permitted while such Default or Event of Default, as the case may be,
    remains in existence.

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 If upon the
  expiration of any Interest Period, the respective Borrower has failed, or is
  not permitted, to elect a new Interest Period to be applicable to the respective
  Borrowing of Eurodollar Loans as provided above, such Borrower shall be deemed
  to have elected to convert such Borrowing into a Borrowing of Base Rate Loans
  effective as of the expiration date of such current Interest Period.

  1.10   Increased
    Costs, Illegality, etc.
    (a) In the event that (x) in the case of clause (i) below, the Administrative
    Agent, or (y) in the case of clauses (ii) and (iii) below, any Lender, shall
    have determined in good faith (which determination shall, absent manifest
    error, be final and conclusive and binding upon all parties hereto): 

   (i)   on
    any date for determining the Eurodollar Rate for any Interest Period, that,
    by reason of any changes arising after the Effective Date affecting the interbank
    Eurodollar market, adequate and fair means do not exist for ascertaining the
    applicable interest rate on the basis provided for in the definition of Eurodollar
    Rate; or

   (ii)   at
    any time, that such Lender shall incur increased costs or reductions in the
    amounts received or receivable hereunder with respect to any Eurodollar Loans
    (other than any increased cost or reduction in the amount received or receivable
    resulting from a change in the rate of taxes or similar charges) because of
    (x) any change since the Effective Date in any applicable law, governmental
    rule, regulation, guideline, order or request (whether or not having the force
    of law), or in the interpretation or administration thereof and including
    the introduction of any new law or governmental rule, regulation, guideline,
    order or request (such as, for example, but not limited to, (A) a change in
    the basis of taxation of payment to any Lender of the principal of, or interest
    on, the Revolving Loans or any other amounts payable hereunder (except for
    changes in the rate of tax on, or determined by reference to, the net income
    or net profits of such Lender pursuant to the laws of the jurisdiction in
    which it is organized or in which its principal office or applicable lending
    office is located or any subdivision thereof or therein), but without duplication
    of any amounts owed to such Lender under Section 4.04(a), or (B) a change
    in official reserve requirements, but, in all events, excluding reserves required
    under Regulation D to the extent included in the computation of the Eurodollar
    Rate) and/or (y) other circumstances affecting the interbank Eurodollar market
    or the position of such Lender in such market; or

  (iii)   at
    any time, that the making or continuance of any Eurodollar Loan has become
    unlawful by compliance by such Lender in good faith with any change since
    the Effective Date in any law, governmental rule, regulation, guideline or
    order, or the interpretation or application thereof, or would conflict with
    any thereof not having the force of law but with which such Lender customarily
    complies, or has become impracticable as a result of a contingency occurring
    after the Effective Date which materially adversely affects the interbank
    Eurodollar market;

 then, and
  in any such event, such Lender (or the Administrative Agent in the case of clause
  (i) above) shall (x) on such date and (y) within 10 Business Days of the date
  on which such event no longer exists give notice (by telephone confirmed in
  writing) to the Parent Borrower and to the Administrative Agent of such determination
  and the reason therefor (which notice the Administrative Agent

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 shall promptly
  transmit to each of the other Lenders). Thereafter (x) in the case of clause
  (i) above, Eurodollar Loans shall no longer be available until such time as
  the Administrative Agent notifies the Parent Borrower and the Lenders that the
  circumstances giving rise to such notice by the Administrative Agent no longer
  exist, and any Notice of Borrowing or Notice of Conversion given by a Borrower
  with respect to Eurodollar Loans which have not yet been incurred shall be deemed
  rescinded by such Borrower or, in the case of a Notice of Borrowing, shall,
  at the option of such Borrower, be deemed converted into a Notice of Borrowing
  for Base Rate Loans to be made on the date of Borrowing contained in such Notice
  of Borrowing, (y) in the case of clause (ii) above, the Parent Borrower agrees
  to pay to such Lender, within 10 Business Days following receipt of written
  demand therefor, such additional amounts (in the form of an increased rate of,
  or a different method of calculating, interest or otherwise as such Lender shall
  determine in good faith) as shall be required to compensate such Lender for
  such increased costs or reductions in amounts receivable hereunder (a written
  notice as to the additional amounts owed to such Lender, showing the basis for
  the calculation thereof, which basis shall be reasonable and consistently applied,
  submitted to the Parent Borrower by such Lender shall, absent manifest error,
  be final and conclusive and binding upon all parties hereto) and (z) in the
  case of clause (iii) above, the respective Borrower or Borrowers shall take
  one of the actions specified in Section 1.10(b) as promptly as possible and,
  in any event, within the time period required by law.

   (b)   At
    any time that any Eurodollar Loan is affected by the circumstances described
    in Section 1.10(a)(ii) or (iii), the respective Borrower may (and, in the
    case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii), the respective
    Borrower shall) either (i) if the affected Eurodollar Loan is then being made
    pursuant to a Borrowing, by giving the Administrative Agent telephonic notice
    (confirmed promptly in writing) thereof on the same date that the applicable
    Borrower was notified by a Lender (or on the next Business Day if the applicable
    Borrower received such notice after 3:00 p.m. (New York time)) pursuant to
    Section 1.10(a)(ii) or (iii), cancel said Borrowing, convert the related Notice
    of Borrowing into one requesting a Borrowing of Base Rate Loans or require
    the affected Lender to make its requested Revolving Loan as a Base Rate Loan,
    or (ii) if the affected Eurodollar Loan is then outstanding, upon at least
    one Business Day’s notice to the Administrative Agent, require the affected
    Lender to convert each such affected Eurodollar Loan into a Base Rate Loan,
    provided
    that if more than one Lender is affected at any time, then all affected Lenders
    must be treated the same pursuant to this Section 1.10(b). 

  (c)   If
    any Lender shall have determined in good faith that after the Effective Date
    the adoption or effectiveness of any applicable law, rule or regulation regarding
    capital adequacy, or any change therein, or any change in the interpretation
    or administration thereof by any Governmental Authority, central bank or comparable
    agency charged by law with the interpretation or administration thereof, or
    compliance by such Lender or its parent corporation with any request or directive
    regarding capital adequacy (whether or not having the force of law) of any
    such authority, central bank or comparable agency, in each case made subsequent
    to the Effective Date, has or would have the effect of reducing the rate of
    return on such Lender’s or its parent corporation’s capital or assets
    as a consequence of such Lender’s commitments or obligations hereunder
    to a level below that which such Lender or its parent corporation could have
    achieved but for such adoption, effectiveness, change or compliance (taking
    into consideration such Lender’s or its parent corporation’s policies
    with respect to capital adequacy), then from time to time, upon demand by
    such Lender (with a copy to the Administrative Agent), the Parent Borrower
    agrees to pay such Lender such additional amount or amounts as will compensate
    such Lender or its parent corporation for such reduction. Each Lender, upon
    determining in good faith that any additional amounts will be payable pursuant
    to this Section 1.10(c), will give prompt written notice thereof to the Parent
    Borrower, which notice shall set forth the basis of the calculation of such
    additional amounts, which basis must be reasonable and consistently applied,
    although the failure to give any such notice shall not release or diminish
    the Parent Borrower’s obligations to pay additional amounts pursuant
    to this Section 1.10(c) upon the subsequent receipt of such notice. 

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  1.11
    Compensation.   The
    Parent Borrower agrees to compensate each Lender, upon its written request
    (which request shall set forth the basis for requesting such compensation),
    for all reasonable losses, expenses and liabilities (including, without limitation,
    any loss, expense or liability incurred by reason of the liquidation or reemployment
    of deposits or other funds required by such Lender to fund its Eurodollar
    Loans but excluding any loss of anticipated profit with respect to such Revolving
    Loans) which such Lender may sustain: (i) if for any reason (other than a
    default by such Lender or the Administrative Agent) a Borrowing of Eurodollar
    Loans does not occur on a date specified therefor in a Notice of Borrowing
    or Notice of Conversion (whether or not withdrawn by the respective Borrower
    or deemed withdrawn pursuant to Section 1.10(a)); (ii) if any repayment, prepayment,
    assignment or conversion of any of its Eurodollar Loans occurs on a date which
    is not the last day of an Interest Period applicable thereto; (iii) if any
    prepayment of any of its Eurodollar Loans is not made on any date specified
    in a notice of prepayment given by the respective Borrower; or (iv) as a consequence
    of (x) any other failure by the respective Borrower to repay its Revolving
    Loans when required by the terms of this Agreement or (y) an election made
    pursuant to Section 1.10(b).

  1.12
    Change
    of Lending Office.   Each
    Lender agrees that, upon the occurrence of any event giving rise to the operation
    of Section 1.10(a)(ii) or (iii) or Section 4.04 with respect to such Lender,
    or if any Lender that is currently an NAIC approved lender ceases to be an
    NAIC approved lender, it will, if requested by the respective Borrower, use
    reasonable efforts (subject to overall policy considerations of such Lender)
    to designate another lending office for any Revolving Loans or Letters of
    Credit affected by such event; provided that such designation is made
    on such terms that, in the opinion of such Lender, such Lender 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 any
    such Section. Nothing in this Section 1.12 shall affect or postpone any of
    the obligations of the Borrowers or the right of any Lender provided in Section
    1.10 or Section 4.04.

  1.13
    Replacement
    of Lenders.   (a)
    Upon the occurrence of any event giving rise to the operation of Section 1.10(a)(ii)
    or (iii) or Section 4.04 with respect to any Lender which results in such
    Lender charging to one or more Borrowers increased costs in excess of those
    being generally charged by the other Lenders, (b) if a Lender becomes a Defaulting
    Lender, (c) in the case of a refusal by a Lender to consent to a proposed
    change, waiver, discharge or termination with respect to this Agreement which
    has been approved by the Required Lenders and/or (d) if any Lender that is
    currently an NAIC approved lender ceases to be an NAIC approved lender, the
    Parent Borrower shall have the right, if no Default or Event of Default then
    exists and in accordance with the requirements of Section 12.04(b), to replace
    such

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Lender (the “Replaced
  Lender”), upon prior written notice to the Administrative Agent and such
  Replaced Lender, with one or more NAIC approved banks or other financial institutions
  (unless otherwise agreed by the Parent Borrower and the Administrative Agent)
  (none of whom shall constitute a Defaulting Lender at the time of such replacement)
  reasonably acceptable to the Administrative Agent (collectively, the “Replacement
  Lender”) or, in the case of a replacement as provided in the immediately
  preceding clause (c) of this Section 1.13 where the consent of the respective
  Lender is required with respect to less than all Tranches of its Revolving Loans,
  Letters of Credit or Commitments, at the option of the Parent Borrower, to replace
  only the Commitments, outstanding Letters of Credit and/or outstanding Revolving
  Loans of such Lender in respect of each Tranche where the consent of such Lender
  would otherwise be individually required, with identical Commitments, Letters
  of Credit and/or Revolving Loans of the respective Tranche provided by the Replacement
  Lender, provided
  that (i) at the time of any replacement pursuant to this Section 1.13, the Replacement
  Lender and the Replaced Lender shall enter into one or more Assignment Agreements
  pursuant to Section 12.04(b) (and with all fees payable pursuant to said Section
  12.04(b) to be paid by the Replacement Lender) pursuant to which the Replacement
  Lender shall acquire all of the Commitments and outstanding Revolving Loans
  (or, in the case of the replacement of less than all the Tranches of Commitments,
  outstanding Letters of Credit and outstanding Revolving Loans of the respective
  Replaced Lender, all of the Commitments and all then outstanding Letters of
  Credit and Revolving Loans relating to the Tranche or Tranches with respect
  to which such Lender is being replaced) of the Replaced Lender and, in connection
  therewith, shall pay to the Replaced Lender in respect thereof an amount equal
  to the sum of (A) an amount equal to the principal amount of, and all accrued
  but unpaid interest on, all outstanding Revolving Loans of the Replaced Lender
  under each Tranche with respect to which such Replaced Lender is being replaced,
  (B) an amount equal to all Unpaid Drawings that have been funded by (and not
  reimbursed to) such Replaced Lender, together with all then unpaid interest
  with respect thereto at such time and (C) an amount equal to all accrued, but
  theretofore unpaid, Fees owing to the Replaced Lender (but only with respect
  to the relevant Tranche or Tranches, in the case of the replacement of less
  than all Tranches of Revolving Loans, Letters of Credit and/or Commitments then
  held by the respective Replaced Lender pursuant to Section 3.01; (ii) all obligations
  of the Borrowers under the Credit Documents owing to the Replaced Lender (other
  than those specifically described in clause (i) above in respect of which the
  assignment purchase price has been, or is concurrently being, paid), including,
  without limitation, all amounts owing to the Replaced Lender under Section 1.11
  as a result of the assignment of its Revolving Loans under clause (i) above,
  shall be paid in full to such Replaced Lender concurrently with such replacement;
  and (iii) no assignment pursuant to this Section 1.13 shall be effective until
  all of the then outstanding Letters of Credit are returned by each respective
  beneficiary to the Issuing Agent and either cancelled and/or exchanged for new
  or amended Letters of Credit which give effect to such assignment (it being
  understood that to the extent the respective beneficiaries do not consent to
  such assignment, such assignment cannot occur). Upon the execution of the respective
  Assignment Agreements, the payment of amounts referred to in clauses (i) and
  (ii) above and the return and cancellation and/or exchange of each then outstanding
  Letter of Credit as provided above, if so requested by the Replacement Lender,
  delivery to the Replacement Lender of the appropriate Note or Notes executed
  by each Borrower, the Replacement Lender shall become a Lender hereunder and
  the Replaced Lender shall cease to constitute a Lender hereunder, except with
  respect to indemnification
  provisions applicable to the Replaced Lender under this Agreement, which shall
  survive as to such Replaced Lender.

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  1.14   Designated
    Subsidiary Borrowers.   The
    Parent Borrower may from time to time after the Effective Date designate one
    or more Persons as an additional Designated Subsidiary Borrower, subject to
    the following terms and conditions:

(a)   each such Person shall be a Wholly-Owned Subsidiary of the Parent Borrower;

(b)   each
  such Person shall be a Material Subsidiary;

(c)   on
    or prior to the date of designation, each such Person shall enter into an
  appropriately completed DSB Assumption Agreement;

(d)   on
    or prior to the date of designation, the Administrative Agent shall have
    received from such Person a certificate, signed by an Authorized Officer
    of such Person in the form of Exhibit F with appropriate insertions or deletions,
    together with (x) copies of its certificate of incorporation, by-laws or
    other equivalent organizational documents and (y) resolutions relating to
  the Credit Documents which shall be satisfactory to the Administrative Agent;

  
(e)   on
    or prior to the date of designation, the Administrative Agent shall have
    received an opinion, addressed to the Administrative Agent and each of the
    Lenders and dated the date of designation, from counsel to such Person, which
    opinion shall (w) in the case of an additional Designated Subsidiary Borrower
    located in the United States, be substantially in the form of Exhibit I-l
    and otherwise satisfactory to the Administrative Agent, (x) in the case of
    an additional Designated Subsidiary Borrower located in Bermuda, be substantially
    in the form of Exhibit I-2 and otherwise satisfactory to the Administrative
    Agent, (y) in the case of an additional Designated Subsidiary Borrower
	located in England, be substantially in the form of Exhibit I-3 and otherwise
    satisfactory to the Administrative Agent and (z) in the case of an additional
    Designated Subsidiary Borrower
    located in a jurisdiction other than the United States, Bermuda or England,
    be in form and substance satisfactory to the Administrative Agent; and

  

  
(f)   on
    or prior to the date of designation, the Administrative Agent shall have
    received such other documentation and/or certificates (including, without
    limitation, certificates of existence and/or good standing certificates in
    the case of additional Designated Subsidiary Borrowers organized under the
    laws of the United States or any State thereof, or any other jurisdiction
    where the concept of “good standing” is applicable) as the Administrative
    Agent may reasonably request.

  1.15   Additional
    Tranche 1 Commitments.   (a)  The Parent Borrower
    shall have the right at any time and from time to time after the Effective
    Date and prior to the Commitment Expiration Date to request (so long as no
    Default or Event of Default is then in existence or would result therefrom)
    on one or more occasions that one or more Tranche 1 Lenders (and/or one or
    more other Persons which will become Tranche 1 Lenders as provided pursuant
    to clause (vi)below)
    provide Additional Tranche 1 Commitments and, subject to the applicable terms
    and conditions contained in this Agreement and the relevant Additional Tranche
    1 Commitment Agreement, make Tranche 1 Revolving Loans and issue Tranche
    1 Letters of Credit; it being

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  understood
  and agreed, however, that (i) no Tranche 1 Lender shall be obligated to provide
  an Additional Tranche 1 Commitment as a result of any request by the Parent
  Borrower, (ii) until such time, if any, as (x) such Tranche 1 Lender has agreed
  in its sole discretion to provide an Additional Tranche 1 Commitment and executed
  and delivered to the Administrative Agent an Additional Tranche 1 Commitment
  Agreement in respect thereof as provided in Section 1.15(b) and (y) such other
  conditions set forth in Section 1.15(b) shall have been satisfied, such Tranche
  1 Lender shall not be obligated to fund any Tranche 1 Revolving Loans, or issue
  any Tranche 1 Letters of Credit, in excess of the amounts provided for in Section
  1.01(a) or 2A.01, as the case may be, before giving effect to such Additional
  Tranche 1 Commitments provided pursuant to this Section 1.15, (iii) any Tranche
  1 Lender (and/or one or more other Persons which will become Tranche 1 Lenders
  as provided pursuant to clause (vi) below) may so provide an Additional Tranche
  1 Commitment without the consent of any other Tranche 1 Lender (it being understood
  and agreed that the consent of the Administrative Agent and the Issuing Agent
  (such consent (in either case) not to be unreasonably withheld or delayed)
  shall be required if any such Additional Tranche 1 Commitments are to be provided
  by a Person which is not already a Tranche 1 Lender), (iv) (x) each provision
  of Additional Tranche 1 Commitments on a given date pursuant to this Section
  1.15 shall be in a minimum aggregate amount (for all Tranche 1 Lenders (including,
  in the circumstances contemplated by clause (vi) below, banks or other financial
  institutions who will become Tranche 1 Lenders)) of at least $1,000,000 and
  (y) the aggregate amount of Additional Tranche 1 Commitments provided pursuant
  to this Section 1.15 shall not exceed $50,000,000, (v) the up-front fees payable
  to any Person providing an Additional Tranche 1 Commitment in accordance with
  this Section 1.15 shall be as set forth in the relevant Additional Tranche
  1 Commitment Agreement, (vi) if, on or after the tenth Business Day following
  the request by the Parent Borrower of the then existing Tranche 1 Lenders (other
  than Defaulting Lenders) to provide Additional Tranche 1 Commitments pursuant
  to this Section 1.15 on the terms to be applicable thereto, the Parent Borrower
  has not received Additional Tranche 1 Commitments in an aggregate amount equal
  to that amount of the Additional Tranche
1 Commitments
which the Parent Borrower desires to obtain pursuant to such request (as set
forth in the notice provided by the Parent Borrower to the Administrative Agent
as provided above), then the Parent Borrower may request Additional Tranche 1
Commitments from other Lenders and/or other NAIC approved banks or financial
institutions (unless otherwise agreed by the Parent Borrower and the Administrative
Agent) in aggregate amount equal to such deficiency on terms which are no more
favorable to such other bank or financial institution in any respect than the
terms offered to the existing Tranche 1 Lenders, and (vii) all actions taken
by the Parent Borrower pursuant to this Section 1.15 shall be done in coordination
with the Administrative Agent.

(b)    At
    the time of any provision of Additional Tranche 1 Commitments pursuant to
    this Section 1.15, (i) the Parent Borrower, each Designated Subsidiary Borrower,
    the Administrative Agent and each such Tranche 1 Lender or other bank or
    financial institution which agrees to provide an Additional Tranche 1 Commitment
    (each, an “Additional Tranche 1 Lender”) shall execute and deliver
    to the Administrative Agent an Additional Tranche 1 Commitment Agreement
    substantially in the form of Exhibit J-1, subject to such modifications in
    form and substance reasonably satisfactory to the Administrative Agent as
    may be necessary or appropriate (with the effectiveness of such Additional
    Tranche 1 Lender’s Additional Tranche 1 Commitment to occur upon delivery
    of such Additional Tranche 1 Commitment Agreement to the Administrative Agent,
    the payment of any fees required in connection therewith and the

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  satisfaction of the other conditions in this Section 1.15 to the reasonable satisfaction of the Administrative Agent), (ii) the Parent Borrower shall, in coordination with the Administrative Agent, repay all outstanding Tranche 1 Revolving Loans of the Lenders, and incur additional Tranche 1 Revolving Loans from other Tranche 1 Lenders in each case so that the Tranche 1 Lenders participate in each Borrowing pro rata on the basis of their respective Tranche 1 Commitments (after giving effect to any increase in the Total Tranche 1 Commitment pursuant to this Section 1.15) and with the Parent Borrower being obligated to pay the respective Tranche 1 Lenders the costs of the type referred to in Section 1.11 in connection with any such repayment and/or Borrowing, (iii) all of the outstanding Tranche
 1 Letters of Credit shall have been returned by each respective beneficiary to the Issuing Agent and shall either have been cancelled and/or exchanged for new or amended Tranche 1 Letters of Credit which give effect to such Additional Tranche 1 Commitment, (iv) if such Additional Tranche 1 Lender is not a United States person (as such term is defined in Section 7701(a)(3) of the Code) for U.S. Federal income tax purposes and such Additional Tranche 1 Lender is issuing Letters of Credit for the account of a U.S. Borrower or U.S. Borrowers, such Additional Tranche 1 Lender shall provide to such U.S. Borrower or U.S. Borrowers the appropriate Internal Revenue Service forms (and, if applicable a Section 4.04(b)(ii) Certificate) described in Section 4.04(b), (v) the Parent Borrower and each Designated Subsidiary Borrower shall deliver to the Administrative Agent resolutions authorizing the incurrence of the Obligations to be incurred pursuant to each Additional Tranche
1 Commitment,
together with evidence of good standing of the Parent Borrower and each Designated
Subsidiary Borrower (if requested) and (vi) the Parent Borrower shall deliver
to the Administrative Agent an opinion, in form and substance reasonably satisfactory
to the Administrative Agent, from counsel to the Parent Borrower reasonably satisfactory
to the Administrative Agent and dated such date, covering such matters similar
to those set forth in the opinions of counsel delivered to the Lenders on the
Effective Date pursuant to Section 5.01(b) and such other matters as the Administrative
Agent may reasonably request. The Administrative Agent shall promptly notify
each Tranche 1 Lender as to the occurrence of each Additional Tranche 1 Commitment
Date, and (w) on each such date, the Total Tranche 1 Commitment under, and for
all purposes of, this Agreement shall be increased by the aggregate amount of
such Additional Tranche 1 Commitments, (x) on each such date Annex I shall be
deemed modified to reflect the revised Tranche 1 Commitments of the affected
Tranche 1 Lenders and (y) upon surrender of any old Tranche 1 Notes by the respective
Additional Tranche 1 Lender (or, if lost, a standard lost note indemnity in form
and substance reasonably satisfactory to the Parent Borrower), to the extent
requested by any Additional Tranche 1 Lender, a new Tranche 1 Note will be issued,
at the Parent
Borrower’s expense, to such Additional Tranche 1 Lender, to be in conformity
with the requirements of Section 1.05 (with appropriate modifications) to the
extent needed to reflect the revised Tranche 1 Commitment of such Tranche 1 Lender.

  1.16   Additional
    Tranche 2 Commitments.   (a)
    The Parent Borrower shall have the right at any time and from time to time
    after the Effective Date and prior to the Commitment Expiration Date to request
    (so long as no Default or Event of Default is then in existence or would result
    therefrom) on one or more occasions that one or more Tranche 2 Lenders (and/or
    one or more other Persons which will become Tranche 2 Lenders as provided
    pursuant to clause (vi) below) provide Additional Tranche 2 Commitments and,
    subject to the applicable terms and conditions contained in this Agreement
    and the relevant Additional Tranche 2 Commitment Agreement, make Tranche 2
    Revolving Loans and issue Tranche 2 Letters of Credit; it being understood
    and agreed, however, that (i) no Tranche 2 Lender shall be obligated to provide
    an

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Additional Tranche 2 Commitment
as a result of any request by the Parent Borrower, (ii) until such time, if any,
as (x) such Tranche 2 Lender has agreed in its sole discretion to provide an
Additional Tranche 2 Commitment and executed and delivered to the Administrative
Agent an Additional Tranche 2 Commitment Agreement in respect thereof as provided
in Section 1.16(b) and (y) such other conditions set forth in Section 1.16(b)
shall have been satisfied, such Tranche 2 Lender shall not be obligated to fund
any Tranche 2 Revolving Loans, or issue any Tranche 2 Letters of Credit, in excess
of the amounts provided for in Section 1.01(b) or 2B.01, as the case may be,
before giving effect to such Additional Tranche 2 Commitments provided pursuant
to this Section 1.16, (iii) any Tranche 2 Lender (and/or one or more other Persons
which will become Tranche 2 Lenders as provided pursuant to clause (vi) below)
may so provide an Additional Tranche 2 Commitment without the consent of any
other Tranche 2 Lender (it being understood and agreed that the consent of the
Administrative Agent and the Issuing Agent (such consent (in either case) not
to be unreasonably withheld or delayed) shall be required if any such Additional
Tranche 2 Commitments are to be provided by a Person which is not already a Tranche
2 Lender), (iv) (x) each provision of Additional Tranche 2 Commitments on a given
date pursuant to this Section 1.16 shall be in a minimum aggregate amount (for
all Tranche 2 Lenders (including, in the circumstances contemplated by clause
(vi) below, banks or other financial institutions who will become Tranche 2 Lenders))
of at least $1,000,000 and (y) the aggregate amount of Additional Tranche 2 Commitments
provided pursuant to this Section 1.16 shall not exceed $50,000,000, (v) the
up-front fees payable to any Person providing an Additional Tranche 2 Commitment
in accordance with this Section 1.16 shall be as set forth in the relevant Additional
Tranche 2 Commitment Agreement, (vi) if, on or after the tenth Business Day following
the request by the Parent Borrower of the then existing Tranche 2 Lenders (other
than Defaulting Lenders) to provide Additional Tranche 2 Commitments pursuant
to this Section 1.16 on the terms to be applicable thereto, the Parent Borrower
has not received Additional Tranche 2 Commitments in an aggregate amount equal
to that amount of the Additional Tranche
2 Commitments which the Parent Borrower desires to obtain pursuant to such request (as set forth in the notice provided by the Parent Borrower to the Administrative Agent as provided above), then the Parent Borrower may request Additional Tranche 2 Commitments from other Lenders and/or other NAIC approved banks or financial institutions (unless otherwise agreed by the Parent Borrower and the Administrative Agent) in aggregate amount equal to such deficiency on terms which are no more favorable to such other bank or financial institution in any respect than the terms offered to the existing Tranche 2 Lenders, and (vii) all actions taken by the Parent Borrower pursuant to this Section 1.16 shall be done in coordination with the Administrative Agent. 

(b)   At
the time of any provision of Additional Tranche 2 Commitments pursuant to this
Section 1.16, (i) the Parent Borrower, each Designated Subsidiary Borrower, the
Administrative Agent and each such Tranche 2 Lender or other bank or financial
institution which agrees to provide an Additional Tranche 2 Commitment (each,
an “Additional Tranche 2 Lender”) shall execute and deliver to the
Administrative Agent an Additional Tranche 2 Commitment Agreement substantially
in the form of Exhibit J-2, subject to such modifications in form and substance
reasonably satisfactory to the Administrative Agent as may be necessary or appropriate
(with the effectiveness of such Additional Tranche 2 Lender’s Additional
Tranche 2 Commitment to occur upon delivery of such Additional Tranche 2 Commitment
Agreement to the Administrative Agent, the payment of any fees required in connection
therewith and the satisfaction of the other conditions in this Section 1.16 to
the reasonable satisfaction of the

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Administrative Agent), (ii) the Parent Borrower shall, in coordination with the
Administrative Agent, repay all outstanding Tranche 2 Revolving Loans of the
Lenders, and incur additional Tranche 2 Revolving Loans from other Tranche 2
Lenders in each case so that the Tranche 2 Lenders participate in each Borrowing pro rata on
the basis of their respective Tranche 2 Commitments (after giving effect to any
increase in the Total Tranche 2 Commitment pursuant to this Section 1.16) and
with the Parent Borrower being obligated to pay the respective Tranche 2 Lenders
the costs of the type referred to in Section 1.11 in connection with any such
repayment and/or Borrowing, (iii) all of the outstanding Tranche 2 Letters of
Credit shall have been returned by each respective beneficiary to the Issuing
Agent and shall either have been cancelled and/or exchanged for new or amended
Tranche 2 Letters of Credit which give effect to such Additional Tranche 2 Commitment,
(iv) if such Additional Tranche 2 Lender is not a United States person (as such
term is defined in Section 7701(a)(3) of the Code) for U.S. Federal income tax
purposes and such Additional Tranche 2 Lender is issuing Letters of Credit for
the account of a U.S. Borrower or U.S. Borrowers, such Additional Tranche 2 Lender
shall provide to such U.S. Borrower or U.S. Borrowers the appropriate Internal
Revenue Service forms (and, if applicable a Section 4.04(b)(ii) Certificate)
described in Section 4.04(b), (v) the Parent Borrower and each Designated Subsidiary
Borrower shall deliver to the Administrative Agent resolutions authorizing the
incurrence of the Obligations to be incurred pursuant to each Additional Tranche
2 Commitment, together with evidence of good standing of the Parent Borrower
and each such Designated Subsidiary Borrower (if requested) in the case of Designated
Subsidiary Borrowers organized under the laws of the United States or any State
thereof, or any other jurisdiction where the concept of “good standing” is
applicable, and (vi) the Parent Borrower shall deliver to the Administrative
Agent an opinion, in form and substance reasonably satisfactory to the Administrative
Agent, from counsel to the Parent Borrower reasonably satisfactory to the Administrative
Agent and dated such date, covering such matters similar to those set forth in
the opinions of counsel delivered to the Lenders on the Effective Date pursuant
to Section 5.01(b) and such other matters as the Administrative Agent may reasonably
request. The Administrative Agent shall promptly notify each Tranche 2 Lender
as to the occurrence of each Additional Tranche 2 Commitment Date, and (w) on
each such date, the Total Tranche 2 Commitment under, and for all purposes of,
this Agreement shall be increased by the aggregate amount of such Additional
Tranche 2 Commitments, (x) on each such date Annex I shall be deemed modified
to reflect the revised Tranche 2 Commitments of the affected Tranche 2 Lenders
and (y) upon surrender of any old Tranche 2 Notes by the respective Additional
Tranche 2 Lender (or, if lost, a standard lost note indemnity in form and substance
reasonably satisfactory to the Parent Borrower), to the extent requested by any
Additional Tranche 2 Lender, a new Tranche 2 Note will be issued, at the Parent
Borrower’s expense, to such Additional Tranche 2 Lender, to be in conformity
with the requirements of Section 1.05 (with appropriate modifications) to the
extent needed to reflect
the revised Tranche 2 Commitment of such Tranche 2 Lender.

   1.17   Additional
    Tranche 3 Commitments.   (a)   The
    Parent Borrower shall have the right at any time and from time to time after
    the Effective Date and prior to the Commitment Expiration Date to request
    (so long as no Default or Event of Default is then in existence or would result
    therefrom) on one or more occasions that one or more Tranche 3 Lenders (and/or
    one or more other Persons which will become Tranche 3 Lenders as provided
    pursuant to clause (vi) below) provide Additional Tranche 3 Commitments and,
    subject to the applicable terms and conditions contained in this Agreement
    and the relevant Additional Tranche 3 Commitment Agreement, make Tranche 3
    Revolving Loans; it being understood and agreed, however, that (i) 

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no Tranche 3 Lender shall be obligated to provide an Additional Tranche 3 Commitment
as a result of any request by the Parent Borrower, (ii) until such time, if any,
as (x) such Tranche 3 Lender has agreed in its sole discretion to provide an
Additional Tranche 3 Commitment and executed and delivered to the Administrative
Agent an Additional Tranche 3 Commitment Agreement in respect thereof as provided
in Section 1.17(b) and (y) such other conditions set forth in Section 1.17(b)
shall have been satisfied, such Tranche 3 Lender shall not be obligated to fund
any Tranche 3 Revolving Loans, in excess of the amounts provided for in Section
1.01(c), before giving effect to such Additional Tranche 3 Commitments provided
pursuant to this Section 1.17, (iii) any Tranche 3 Lender (and/or one or more
other Persons which will become Tranche 3 Lenders as provided pursuant to clause
(vi) below) may so provide an Additional Tranche 3 Commitment without the consent
of any other Tranche 3 Lender (it being understood and agreed that the consent
of the Administrative Agent (such consent not to be unreasonably withheld or
delayed) shall be required if any such Additional Tranche 3 Commitments are to
be provided by a Person which is not already a Tranche 3 Lender), (iv) (x) each
provision of Additional Tranche 3 Commitments on a given date pursuant to this
Section 1.17 shall be in a minimum aggregate amount (for all Tranche 3 Lenders
(including, in the circumstances contemplated by clause (vi) below, banks or
other financial institutions who will become Tranche 3 Lenders)) of at least
$1,000,000 and (y) the aggregate amount of Additional Tranche 3 Commitments provided
pursuant to this Section 1.17 shall not exceed $10,000,000, (v) the up-front
fees payable to any Person providing an Additional Tranche 3 Commitment in accordance
with this Section 1.17 shall be as set forth in the relevant Additional Tranche
3 Commitment Agreement, (vi) if, on or after the tenth Business Day following
the request by the Parent
Borrower of the then existing Tranche 3 Lenders (other than Defaulting Lenders)
to provide Additional Tranche 3 Commitments pursuant to this Section 1.17 on
the terms to be applicable thereto, the Parent Borrower has not received Additional
Tranche 3 Commitments in an aggregate amount equal to that amount of the Additional
Tranche 3 Commitments which the Parent Borrower desires to obtain pursuant to
such request (as set forth in the notice provided by the Parent Borrower to the
Administrative Agent as provided above), then the Parent Borrower may request
Additional Tranche 3 Commitments from other Lenders and/or other NAIC approved
banks or financial institutions (unless otherwise agreed by the Parent Borrower
and the Administrative Agent) in aggregate amount equal to such deficiency on
terms which are no more favorable to such other bank or financial institution
in any respect than the terms offered to the existing Tranche 3 Lenders, and
(vii) all actions taken by the Parent Borrower pursuant to this Section 1.17
shall be done in coordination with the Administrative Agent.

 (b)   At
    the time of any provision of Additional Tranche 3 Commitments pursuant to
    this Section 1.17, (i) the Parent Borrower, each Designated Subsidiary Borrower,
    the Administrative Agent and each such Tranche 3 Lender or other bank or
    financial institution which agrees to provide an Additional Tranche 3 Commitment
    (each, an “Additional Tranche 3 Lender”) shall execute and deliver
    to the Administrative Agent an Additional Tranche 3 Commitment Agreement
    substantially in the form of Exhibit J-3, subject to such modifications in
    form and substance reasonably satisfactory to the Administrative Agent as
    may be necessary or appropriate (with the effectiveness of such Additional
    Tranche 3 Lender’s Additional Tranche 3 Commitment to occur upon delivery
    of such Additional Tranche 3 Commitment Agreement to the Administrative Agent,
    the payment of any fees required in connection therewith and the satisfaction
    of the other conditions in this Section 1.17 to the reasonable satisfaction
    of the Administrative Agent), (ii) the Parent Borrower shall, in coordination
    with the Administrative

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Agent, repay all outstanding Tranche 3 Revolving Loans of the Lenders, and incur
additional Tranche 3 Revolving Loans from other Tranche 3 Lenders in each case
so that the Tranche 3 Lenders participate in each Borrowing pro rata on
the basis of their respective Tranche 3 Commitments (after giving effect to any
increase in the Total Tranche 3 Commitment pursuant to this Section 1.17) and
with the Parent Borrower being obligated to pay the respective Tranche 3 Lenders
the costs of the type referred to in Section 1.11 in connection with any such
repayment and/or Borrowing, (iii) the Parent Borrower and each Designated Subsidiary
Borrower shall deliver to the Administrative Agent resolutions authorizing the
incurrence of the Obligations to be incurred pursuant to each Additional Tranche
3 Commitment, together with evidence of good standing of the Parent Borrower
and each such Designated Subsidiary Borrower (if requested) in the case of Designated
Subsidiary Borrowers organized under the laws of the United States or any State
thereof, or any other jurisdiction where the concept of “good standing” is
applicable, and (iv) the Parent Borrower shall deliver to the Administrative
Agent an opinion, in form and substance reasonably satisfactory to the Administrative
Agent, from counsel to the Parent Borrower reasonably satisfactory to the Administrative
Agent and dated such date, covering such matters similar to those set forth in
the opinions of counsel delivered to the Lenders on the Effective Date pursuant
to Section 5.01(b) and such other matters as the Administrative Agent may reasonably
request. The Administrative Agent shall promptly notify each Tranche 3 Lender
as to the occurrence of each Additional Tranche 3 Commitment Date, and (w) on
each such date, the Total Tranche 3 Commitment under, and for all purposes of,
this Agreement shall be increased by the aggregate amount of such Additional
Tranche 3 Commitments, (x) on each such date Annex I shall be deemed modified
to reflect the revised Tranche 3 Commitments of the affected Tranche 3 Lenders
and (y) upon surrender of any old Tranche 3 Notes by the respective Additional
Tranche 3 Lender (or, if lost, a standard lost note indemnity in form and substance
reasonably satisfactory to the Parent Borrower), to the extent requested by any
Additional Tranche 3 Lender, a new Tranche 3 Note will be issued, at the Parent
Borrower’s expense, to such Additional Tranche 3 Lender, to be in conformity
with the requirements of Section 1.05 (with appropriate modifications) to the
extent needed to reflect
the revised Tranche 3 Commitment of such Tranche 3 Lender.

   SECTION
    2A.   Tranche 1 Letters of Credit. 

   2A.01     Tranche
    1 Letters of Credit.   (a)   Subject to
    and upon the terms and conditions set forth herein, each Designated Subsidiary
    Borrower may request the Issuing Agent, at any time and from time to time
    after the Effective Date and prior to the date which is 30 days prior to the
    Commitment Expiration Date, to issue on behalf of the Tranche 1 Lenders, for
    the account of such Designated Subsidiary Borrower and in support of, on a
    standby basis, Letter of Credit Supportable Obligations and, subject to and
    upon the terms and conditions set forth herein, the Issuing Agent agrees to
    issue on behalf of the Tranche 1 Lenders at any time and from time to time
    after the Effective Date and prior to the date which is 30 days prior to the
    Commitment Expiration Date, one or more irrevocable standby letters of credit
    in such form as may be approved by the Issuing Agent (each such letter of
    credit, a “Tranche 1 Letter of Credit” and, collectively, the “Tranche
    1 Letters of Credit”). Notwithstanding the foregoing, the Issuing Agent
    shall be under no obligation to issue any Tranche 1 Letter of Credit if at
    the time of such issuance: 

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     (i)   any
        order, judgment or decree of any Governmental Authority or arbitrator
        shall purport by its terms to enjoin or restrain the Issuing Agent from
        issuing such Tranche 1 Letter of Credit or any requirement of law applicable
        to such Issuing Agent or any Lender or any request or directive (whether
        or not having the force of law) from any Governmental Authority with
        jurisdiction over the Issuing Agent or any Tranche 1 Lender shall prohibit,
        or request that the Issuing Agent or any Tranche 1 Lender refrain from,
        the issuance of letters of credit generally or such Tranche 1 Letter
        of Credit in particular or shall impose upon the Issuing Agent or any
        Lender with respect to such Tranche 1 Letter of Credit any restriction
        or reserve or capital requirement (for which the Issuing Agent or any
        Tranche 1 Lender is not otherwise compensated) not in effect on the Effective
        Date, or any unreimbursed loss, cost or expense which was not applicable,
        in effect or known to the Issuing Agent or any Tranche 1 Lender as of
        the Effective Date;

  

  
     (ii)   the
        conditions precedent set forth in Section 5.02 are not satisfied at that
        time; or

  

  
     (iii)    the
        Issuing Agent shall have received notice from any Borrower or the Required
        Lenders prior to the issuance of such Tranche 1 Letter of Credit of the
        type described in clause (vi) of Section 2A.01(b).

  

 (b) Notwithstanding
    anything to the contrary contained in this Section 2A.01 or elsewhere in
    this Agreement (i) no Tranche 1 Letter of Credit shall be issued the Stated
    Amount of which, when added to (x) the Tranche 1 Letter of Credit Outstandings
    (exclusive of Tranche 1 Unpaid Drawings which are repaid on the date of,
    and prior to the issuance of, the respective Tranche 1 Letter of Credit)
    at such time and (y) the aggregate principal amount of all Tranche 1 Revolving
    Loans then outstanding, would exceed an amount equal to the Total Tranche
    1 Commitment at such time; (ii) no Tranche 1 Letter of Credit shall be issued
    for the account of any Intermediate Holding Company the Stated Amount of
    which, when added to (x) the Tranche 1 Letter of Credit Outstandings in respect
    of outstanding Tranche 1 Letters of Credit issued for the account of all
    Intermediate Holding Companies (exclusive of Tranche 1 Unpaid Drawings in
    respect of Tranche 1 Letters of Credit issued for the account of Intermediate
    Holding Companies which are repaid on the date of, and prior to the issuance
    of, the respective Tranche 1 Letter of Credit) at such time and (y) the Tranche
    2 Letter of Credit Outstandings (exclusive of Tranche 2 Unpaid Drawings in
    respect of Tranche 2 Letters of Credit issued for the account of Intermediate
    Holding Companies which are repaid on the date of and prior to the issuance
    of the respective Tranche 2 Letter of Credit) in respect of outstanding Tranche
    2 Letters of Credit issued for the account of all Intermediate Holding Companies,
    exceeds $50,000,000; (iii) no Tranche 1 Letter of Credit for the account
    of any Borrower shall be issued the Stated Amount of which, when added to
    (x) the Tranche 1 Letter of Credit Outstandings applicable to such Borrower
    (exclusive of Tranche 1 Unpaid Drawings which are repaid on the date of,
    and prior to the issuance of, the respective Tranche 1 Letter of Credit)
    at such time and (y) the aggregate principal amount of all Tranche 1 Revolving
    Loans incurred by such Borrower and then outstanding, would exceed an amount
    equal to such Borrower’s Borrowing Base at such time; (iv) each Tranche 1 Letter of Credit shall have an expiry date occurring not later than one year after such Tranche 1 Letter of Credit’s
    date of issuance; provided that each such Tranche 1 Letter of Credit may by its terms automatically renew annually for one additional year unless the Issuing Agent notifies the beneficiary thereof, in accordance with the terms of such Tranche 1 Letter of Credit, that such Tranche
    1 Letter of Credit will not be renewed; (v) each Tranche 1 Letter of Credit
    shall be denominated in Dollars; and (vi) the Issuing Agent will not issue
    any Tranche 1 Letter of Credit after it has received written notice from
    any Borrower or the Required Lenders stating that a Default or an Event of
    Default exists until such time as the Issuing Agent 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 Default or Event of
    Default by the Required Lenders (or, to the extent provided by Section 12.11,
    each of the Lenders). 

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(c)   Each
    Tranche 1 Letter of Credit will be issued by the Issuing Agent on behalf
    of the Tranche 1 Lenders and each Tranche 1 Lender will participate in each
    Tranche 1 Letter of Credit pro rata in
    accordance with its Tranche 1 Percentage. The obligations of each Tranche
    1 Lender under and in respect of each Tranche 1 Letter of Credit are several,
    and the failure by any Tranche 1 Lender to perform its obligations hereunder
    or under any Tranche 1 Letter of Credit shall not affect the obligations
    of the respective Borrower toward any other party hereto nor shall any other
    such party be liable for the failure by such Tranche 1 Lender to perform
    its obligations hereunder or under any Tranche 1 Letter of Credit. 

 
 (d)   Subject
    to and on the terms and conditions set forth herein, the Issuing Agent is
    hereby authorized by each Designated Subsidiary Borrower and the Tranche
    1 Lenders to arrange for the issuance of any Tranche 1 Letter of Credit pursuant
    to Section 2A.01(a) and the amendment of any Letter of Credit pursuant to
    Section 1.13, Section 1.15, Section 2A.06 and/or Section 12.04(b) by:

 (i)   completing
    the commencement date and the expiry date of such Tranche 1 Letter of Credit;

 (ii)   in
    the case of an amendment increasing or reducing the amount thereof, amending
    such Tranche 1 Letter of Credit in such manner as the Issuing Agent and the
    respective beneficiary may agree;

 (iii)   completing
    such Tranche 1 Letter of Credit with the participation of each Tranche 1
    Lender as allocated pursuant to the terms hereof; and

 (iv)   executing
    such Tranche 1 Letter of Credit on behalf of each Tranche 1 Lender and following
    such execution delivering such Tranche 1 Letter of Credit to the beneficiary
    of such Tranche 1 Letter of Credit.

 (e)   Each
    Tranche 1 Letter of Credit shall be executed and delivered by the Issuing
    Agent in the name and on behalf of, and as attorney-in-fact for, each Tranche
    1 Lender party to such Tranche 1 Letter of Credit, and the Issuing Agent
    shall act under each Tranche 1 Letter of Credit, and each Tranche 1 Letter
    of Credit shall expressly provide that the Issuing Agent shall act, as the
    agent of each Tranche 1 Lender to (a) receive drafts, other demands for payment
    and other documents presented by the beneficiary under such Tranche 1 Letter
    of Credit, (b) determine whether such drafts, demands and documents are in
    compliance with the terms and conditions of such Tranche 1 Letter of Credit
    and (c) notify such Tranche 1 Lender and such Designated Subsidiary Borrower
    that a valid drawing has been made and the date that the related Tranche
    1 Unpaid Drawing is to be made; provided that
    the Issuing Agent shall have no obligation
    or liability for any Tranche 1 Unpaid Drawing under such Tranche 1 Letter
    of Credit, and each Tranche 1 Letter of Credit shall expressly so provide.
    Each Tranche 1 Lender hereby irrevocably appoints and designates the Issuing
    Agent as its attorney-in-fact, acting through any duly authorized officer
    of the Issuing Agent, to execute and deliver in the name and on behalf of
    such Tranche 1 Lender each Tranche 1 Letter of Credit to be issued by such
    Tranche 1 Lender hereunder. Promptly upon the request of the Issuing Agent,
    each Tranche 1 Lender will furnish to the Issuing Agent such powers of attorney
    or other evidence as any beneficiary of any Tranche 1 Letter of Credit may
    reasonably request in order to demonstrate that the Issuing Agent has the
    power to act as attorney-in-fact for such Tranche 1 Lender to execute and
    deliver such Tranche 1 Letter of Credit. 

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   2A.02   Tranche
    1 Letter of Credit Requests.   (a)   Whenever
    a Designated Subsidiary Borrower desires that a Tranche 1 Letter of Credit
    be issued, such Designated Subsidiary Borrower shall give the Administrative
    Agent and the Issuing Agent 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 Agent) thereof prior to 11:00 A.M.
    (New York time) at least five Business Days (or such shorter period as may
    be acceptable to the Issuing Agent) prior to the proposed date of issuance
    (which shall be a Business Day), which written notice shall be in the form
    of Exhibit C-1 (each, a “Tranche 1 Letter of Credit Request”). Each
    Tranche 1 Letter of Credit Request shall include any other documents as the
    Issuing Agent customarily requires in connection therewith. 

 (b)   The
    making of each Tranche 1 Letter of Credit Request shall be deemed to be a
    representation and warranty by the applicable Designated Subsidiary Borrower
    that such Tranche 1 Letter of Credit may be issued in accordance with, and
    it will not violate the requirements of, Section 2A.01(a) or (b).

 (c)   Upon
    its issuance of, or amendment to, any Tranche 1 Letter of Credit, the Issuing
    Agent shall promptly notify the respective Designated Subsidiary Borrower
    and the Tranche 1 Lenders of such issuance or amendment, which notice shall
    include a summary description of the Tranche 1 Letter of Credit actually
    issued and any amendments thereto.

   2A.03   Agreement
    to Repay Tranche 1 Letter of Credit Drawings.   (a)   Each
    Designated Subsidiary Borrower agrees to reimburse each Tranche 1 Lender,
    by making payment to the Administrative Agent in immediately available funds
    at the Payment Office, for any payment or disbursement made by such Tranche
    1 Lender under any Tranche 1 Letter of Credit which has been issued for such
    Designated Subsidiary Borrower’s account (each such amount so paid or
    disbursed until reimbursed, a “Tranche 1 Unpaid Drawing”) 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 Lender, to the extent
    not reimbursed prior to 1:00 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 Tranche 1 Lender is reimbursed therefor at a rate
    per annum which shall be the Base Rate plus the Applicable Margin for Revolving
    Loans maintained as Base Rate Loans as in effect from time to time (or, if
    the Total Tranche 1 Commitment has been terminated and all Tranche 1 Revolving
    Loans have been repaid, the Applicable Margin that would have been in effect
    for Tranche 1 Revolving Loans maintained as Base Rate Loans) (plus an
    additional 2% per annum, payable on demand, if not reimbursed by the third
    Business Day after the date of such payment or disbursement). 

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 (b)   Each
    Designated Subsidiary Borrower’s obligation under this Section 2A.03
    to reimburse each Tranche 1 Lender with respect to Tranche 1 Unpaid Drawings
    (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 Designated Subsidiary Borrower may have
    or have had against such Tranche 1 Lender, or the Issuing Agent, including,
    without limitation, any defense based upon the failure of any drawing under
    a Tranche 1 Letter of Credit to conform to the terms of the Tranche 1 Letter
    of Credit or any non-application or misapplication by the beneficiary of
    the proceeds of such drawing; provided, however, that no Designated
    Subsidiary Borrower shall be obligated to reimburse any Tranche 1 Lender
    for any wrongful payment made by such Tranche 1 Lender under a Tranche 1
    Letter of Credit as a result of acts or omissions constituting willful misconduct
    or gross negligence on the part of such Tranche 1 Lender (as determined by
    a court of competent jurisdiction in a final and non-appealable decision).

   2A.04   Increased
    Costs.   If after the Effective Date, the adoption or effectiveness
    of any applicable law, rule or regulation, order, guideline or request or
    any change therein after the Effective Date, or any change adopted or effective
    after the Effective Date in the interpretation or administration thereof by
    any Governmental Authority, central bank or comparable agency charged with
    the interpretation or administration thereof, or compliance by any Tranche
    1 Lender with any request or directive (whether or not having the force of
    law) by any such authority, central bank or comparable agency shall either
    (i) impose, modify or make applicable any reserve, deposit, capital adequacy
    or similar requirement against letters of credit issued by or participated
    in by such Tranche 1 Lender, or (ii) impose on such Tranche 1 Lender any other
    conditions directly or indirectly affecting this Agreement or any Tranche
    1 Letter of Credit; and the result of any of the foregoing is to increase
    the cost to such Tranche 1 Lender of issuing, maintaining or participating
    in any Tranche 1 Letter of Credit, or to reduce the amount of any sum received
    or receivable by such Tranche 1 Lender hereunder or reduce the rate of return
    on its capital with respect to Tranche 1 Letters of Credit, then, upon written
    demand to the respective Designated Subsidiary Borrower by such Tranche 1
    Lender (with a copy to the Administrative Agent), such Designated Subsidiary
    Borrower agrees to pay to such Tranche 1 Lender such additional amount or
    amounts as will compensate such Tranche 1 Lender for such increased cost or
    reduction. A certificate submitted to the respective Designated Subsidiary
    Borrower by such Tranche 1 Lender (with a copy to the Administrative Agent),
    setting forth the basis for the determination of such additional amount or
    amounts necessary to compensate such Tranche 1 Lender as aforesaid shall be
    final and conclusive and binding on such Designated Subsidiary Borrower absent
    manifest error, although the failure to deliver any such certificate shall
    not release or diminish any Designated Subsidiary Borrower’s obligations
    to pay additional amounts pursuant to this Section 2A.04 upon subsequent receipt
    of such certificate. 

   2A.05   Tranche
    1 Letter of Credit Expiration Extensions.   Each Tranche
    1 Lender acknowledges that to the extent provided under the terms of any Tranche
    1 Letter of Credit, the expiration date of such Tranche 1 Letter of Credit
    will be automatically extended for an additional year, without written amendment,
    unless at least 30 days prior to the expiration date of such Tranche 1 Letter
    of Credit, notice is given by the Issuing Agent to the beneficiary of such
    Tranche 1 Letter of Credit in accordance with the terms of the respective
    Tranche 1 Letter of Credit (a “Notice of Non-Extension”) that the
    expiration date of such Tranche 1 Letter of Credit will not be extended beyond
    its current expiration date. The Issuing Agent will give Notices of Non-Extension
    as to any or all outstanding Tranche 1 Letters of Credit if requested to
    do so by the Required Lenders pursuant to Section 9. The Issuing Agent will
    give Notices of Non-Extension as to all outstanding Tranche 1 Letters of
    Credit if the Commitment Expiration Date has occurred. The Issuing Agent
    will send a copy of each Notice of Non-Extension to the respective Designated
    Subsidiary Borrower concurrently with delivery thereof to the respective
    beneficiary, unless prohibited by law from doing so. 

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   2A.06   Changes
    to Stated Amount.   At any time when any Tranche 1 Letter
    of Credit is outstanding, at the request of the respective Designated Subsidiary
    Borrower, the Issuing Agent will enter into an amendment increasing or reducing
    the Stated Amount of such Tranche 1 Letter of Credit, provided that
    (i) in no event shall the Stated Amount of any Tranche 1 Letter of Credit
    be increased to an amount which, when added to (x) the Tranche 1 Letter of
    Credit Outstandings (exclusive of Tranche 1 Unpaid Drawings which are repaid
    on the date of and prior to the issuance of the respective Tranche 1 Letter
    of Credit) at such time and (y) the aggregate principal amount of all Tranche
    1 Revolving Loans then outstanding, would exceed an amount equal to the Total
    Tranche 1 Commitment at such time, (ii) in no event shall the Stated Amount
    of any Tranche 1 Letter of Credit issued for the account of any Designated
    Subsidiary Borrower be increased to an amount which, when added to (x) the
    Tranche 1 Letter of Credit Outstandings (exclusive of Tranche 1 Unpaid Drawings
    which are repaid on the date of and prior to the issuance of the respective
    Tranche 1 Letter of Credit) applicable to such Borrower at such time and (y)
    the aggregate principal amount of all Tranche 1 Revolving Loans incurred by
    such Borrower and then outstanding, would exceed an amount equal to such Borrower’s
    Borrowing Base at such time, (iii) the Stated Amount of a Tranche 1 Letter
    of Credit may not be increased at any time if the conditions precedent set
    forth in Section 5.02 are not satisfied at such time, and (iv) the Stated
    Amount of a Tranche 1 Letter of Credit may not be increased at any time after
    the date which is 30 days prior to the Commitment Expiration Date. 

   2A.07   Representations
    and Warranties of Tranche 1 Lenders.   Each Tranche 1 Lender
    represents and warrants that each Tranche 1 Letter of Credit constitutes a
    legal, valid and binding obligation of such Tranche 1 Lender enforceable in
    accordance with its terms. 

   2A.08   Existing
    Tranche 1 Letters of Credit.   (a)   Each
    letter of credit issued under the Existing Credit Agreement and outstanding
    immediately prior to the Effective Date and which is intended to be a Tranche
    1 Letter of Credit hereunder is listed in Part A of Annex VIII (each such
    letter of credit, an “Existing Tranche 1 Letter of Credit”). Each
    Existing Tranche 1
    Letter of Credit shall be deemed to be a Tranche 1 Letter of Credit hereunder.
    As soon as possible following the Effective Date, each Existing Tranche 1
    Letter of Credit shall be amended to replace each Original Lender on such
    Existing Tranche 1 Letter of Credit with each Tranche 1 Lender party to this
    Agreement on the Effective Date in accordance with each such Tranche 1 Lender’s
    Tranche 1 Percentage. Until an Existing Tranche 1 Letter of Credit has been
    amended in accordance with this Section 2A.08, each Original Lender shall
    be deemed to have sold and transferred to each Tranche 1 Lender, and each
    such Tranche 1 Lender (each, a “Tranche 1 Participant”) shall be
    deemed irrevocably and unconditionally to have purchased and received from
    such Original Lender, without recourse or warranty, an undivided interest
    and participation,

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 to the extent
    of such Tranche 1 Participant’s Tranche 1 Percentage in such Existing
    Tranche 1 Letter of Credit, each substitute Existing Tranche 1 Letter of
    Credit, each drawing made thereunder, the obligations of any Borrower under
    this Agreement with respect thereto and any security therefore or guaranty
    pertaining thereto. Upon any change in the Tranche 1 Commitments of the Tranche
    1 Lenders pursuant to Section 1.13 or 12.04(b), it is hereby agreed that,
    with respect to all outstanding Existing Tranche 1 Letters of Credit and
    Unpaid Drawings with respect thereto, there shall be an automatic adjustment
    to the participations pursuant to this Section 2A.08 to reflect the new Tranche
    1 Percentages of the assigning and assignee Tranche 1 Lender.

 (b)   In
    determining whether to pay under any Existing Tranche 1 Letter of Credit,
    no Original Lender shall have any obligation relative to the Tranche 1 Participants
    other than to determine that any documents required to be delivered under
    such Existing Tranche 1 Letter of Credit have been delivered and that they
    appear to substantially comply on their face with the requirements of such
    Existing Tranche 1 Letter of Credit, which obligation, it is understood,
    is being performed by the Issuing Agent, and upon whom each Original Lender
    shall be entitled to rely. Any action taken or omitted to be taken by any
    Original Lender under or in connection with any Existing Tranche 1 Letter
    of Credit issued by it shall not create for such Original Lender any resulting
    liability to any Borrower, any Tranche 1 Lender or any other Person unless
    such action is taken or omitted to be taken with gross negligence or willful
    misconduct (as determined by a court of competent jurisdiction in a final
    and non-appealable decision).

   (c)   In
    the event that any Original Lender makes any payment under any Existing Tranche
    1 Letter of Credit issued by it and the respective Borrower shall not have
    reimbursed such amount in full to each Original Lender pursuant to Section
    2A.03(a), such Original Lender shall promptly notify the Administrative Agent,
    and the Administrative Agent shall promptly notify each Tranche 1 Participant
    of such failure, and each such Tranche 1 Participant shall promptly and unconditionally
    pay to the Administrative Agent for the account of such Original Lender, the
    amount of such Tranche 1 Participant’s Tranche 1 Percentage of such payment
    in Dollars and in same day funds. If the Administrative Agent so notifies
    any Tranche 1 Participant required to fund a payment under an Existing Tranche
    1 Letter of Credit prior to 11:00 A.M. (New York time) on any Business Day,
    such Tranche 1 Participant shall make available to the Administrative Agent
    at the Payment Office for the account of the respective Original Lender such
    Tranche 1 Participant’s Percentage of the amount of such payment on such
    Business Day in same day funds (and, to the extent such notice is given after
    11:00 A.M. (New York time) on any Business Day, such Tranche 1 Participant
    shall make such payment on the immediately following Business Day). If and
    to the extent such Tranche 1 Participant shall not have so made its Tranche
    1 Percentage of the amount of such payment available to the Administrative
    Agent for the account of the respective Original Lender, such Tranche 1 Participant
    agrees to pay to the Administrative Agent for the account of such Original
    Lender, forthwith on demand such amount, together with interest thereon, for
    each day from such date until the date such amount is paid to the Administrative
    Agent for the account of such Original Lender at the overnight Federal Funds
    Rate for the first three days and at the interest rate applicable to Tranche
    1 Revolving Loans that are maintained as Base Rate Loans for each day thereafter.
    The failure of any Tranche 1 Participant to make available to the Administrative
    Agent for the account of the respective Original Lender its Tranche 1 Percentage
    of any payment under any Existing Tranche 1 Letter of Credit issued by it
    shall not relieve any other Tranche 1 Participant of its obligation hereunder
    to make available to the Administrative Agent for the account of such Original
    Lender its Tranche 1 Percentage of any payment under any such Tranche 1 Letter
    of Credit on the date required, as specified above, but no Tranche 1 Participant
    shall be responsible for the failure of any other Tranche 1 Participant to
    make available to the Administrative Agent for the account of such Original
    Lender such other Tranche 1 Participant’s Tranche 1 Percentage of any
    such payment. 

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 (d)    Whenever
    any Original Lender receives a payment of a reimbursement obligation as to
    which the Administrative Agent has received for the account of such Original
    Lender any payments from the Tranche 1 Participants pursuant to Section 2A.08(c),
    such Original Lender shall pay to the Administrative Agent and the Administrative
    Agent shall promptly pay to each Tranche 1 Participant which has paid its
    Tranche 1 Percentage thereof, in Dollars and in same day funds, an amount
    equal to such Tranche 1 Participant’s Tranche 1 Percentage of the principal
    amount thereof and interest thereon accruing after the purchase of the respective
  participations.

 (e)    The
    obligations of the Tranche 1 Participants to make payments to the Administrative
    Agent for the account of the respective Original Lender with respect to Existing
    Tranche 1 Letters of Credit issued by it shall be irrevocable and not subject
    to counterclaim, set-off or other defense or any other 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
  Credit Documents;

 (ii)    the
    existence of any claim, set-off, defense or other right which the Parent
    Borrower or any of its Subsidiaries may have at any time against a beneficiary
    named in an Existing Tranche 1 Letter of Credit, any transferee of any Existing
    Tranche 1 Letter of Credit (or any Person for whom any such transferee may
    be acting), the Administrative Agent, any Original Lender, or other Person,
    whether in connection with this Agreement, any Existing Tranche 1 Letter
    of Credit, the transactions contemplated herein or any unrelated transactions
    (including any underlying transaction between the Parent Borrower or any
    of its Subsidiaries and the beneficiary named in any such Existing Tranche
  1 Letter of Credit);

 (iii)    any
    draft, certificate or other document presented under the Existing Tranche
    1 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 Credit Documents; or

  

 (v)    the occurrence
  of any Default or Event of Default.

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  SECTION 2B.   
    Tranche 2 Letters
    of Credit.

  2B.01   
      Tranche 2 Letters of Credit.    (a) Subject to and upon the terms and
      conditions set forth herein, each Designated Subsidiary Borrower may request
      the Issuing Agent, at any time and from time to time after the Effective
      Date
    and prior to the date which is 30 days prior to the Commitment Expiration
      Date, to issue on behalf of the Tranche 2 Lenders, for the account of such
      Designated Subsidiary Borrower and in support of, on a standby basis, Letter
      of Credit Supportable Obligations and, subject to and upon the terms and
      conditions
    set forth herein, the Issuing Agent agrees to issue on behalf of the Tranche
      2 Lenders at any time and from time to time after the Effective Date and
      prior
    to the date which is 30 days prior to the Commitment Expiration Date, one
      or more irrevocable standby letters of credit in such form as may be approved
      by the Issuing Agent (each such letter of credit, a “Tranche 2 Letter
    of Credit” and, collectively, the “Tranche 2 Letters of Credit”).
    Notwithstanding the foregoing, the Issuing Agent shall be under no obligation
    to issue any Tranche 2 Letter of Credit if at the time of such issuance:

 (i)   
  any order,
  judgment or decree of any Governmental Authority or arbitrator shall purport
  by its terms to enjoin or restrain the Issuing Agent from issuing such Tranche
  2 Letter of Credit or any requirement of law applicable to such Issuing Agent
  or any Tranche 2 Lender or any request or directive (whether or not having the
  force of law) from any Governmental Authority with jurisdiction over the Issuing
  Agent or any Tranche 2 Lender shall prohibit, or request that the Issuing Agent
  or any Tranche 2 Lender refrain from, the issuance of letters of credit generally
  or such Tranche 2 Letter of Credit in particular or shall impose upon the Issuing
  Agent or any Tranche 2 Lender with respect to such Tranche 2 Letter of Credit
  any restriction or reserve or capital requirement (for which the Issuing Agent
  or any Tranche 2 Lender is not otherwise compensated) not in effect on the Effective
  Date, or any unreimbursed loss, cost or expense which was not applicable, in
  effect or known to the Issuing Agent or any Tranche 2 Lender as of the Effective
  Date;

 
 (ii)   
  the conditions
  precedent set forth in Section 5.02 are not satisfied at that time; or

 

 (iii)   
  the Issuing
  Agent shall have received notice from any Borrower or the Required Lenders prior
  to the issuance of such Tranche 2 Letter of Credit of the type described in
  clause (v) of Section 2B.01(b).

 (b)    Notwithstanding
    anything to the contrary contained in this Section 2B.01 or elsewhere in
    this Agreement, (i) no Tranche 2 Letter of Credit shall be issued the Stated
    Amount of which, when added to (x) the Tranche 2 Letter of Credit Outstandings
    (exclusive of Tranche 2 Unpaid Drawings which are repaid on the date of,
    and prior to the issuance of, the respective Tranche 2 Letter of Credit)
    at such time and (y) the aggregate principal amount of all Tranche 2 Revolving
    Loans then outstanding, would exceed, an amount equal to the Total Tranche
    2 Commitment at such time; (ii) no Tranche 2 Letter of Credit shall be issued
    for the account of any Intermediate Holding Company the Stated Amount of
    which, when added to (x) the Tranche 2 Letter of Credit Outstandings (exclusive
    of Tranche 2 Unpaid Drawings in respect of Tranche 2 Letters of Credit issued
  for the account of Intermediate Holding Companies which

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 are repaid
  on the date of and prior to the issuance of the respective Tranche 2 Letter
  of Credit) in respect of outstanding Tranche 2 Letters of Credit issued for
  the account of all Intermediate Holding Companies (exclusive of Tranche 2 Unpaid
  Drawings in respect of Tranche 2 Letters of Credit issued for the account of
  Intermediate Holding Companies which are repaid on the date of, and prior to
  the issuance of, the respective Tranche 2 Letter of Credit) at such time and
  (y) the Tranche 1 Letter of Credit Outstandings in respect of outstanding Tranche
  1 Letters of Credit issued for the account of all Intermediate Holding Companies,
  exceeds $50,000,000; (iii) each Tranche 2 Letter of Credit shall have an expiry
  date occurring not later than one year after such Tranche 2 Letter of Credit’s
  date of issuance; provided
  that each such Tranche 2 Letter of Credit may by its terms automatically renew
  annually for one additional year unless the Issuing Agent notifies the beneficiary
  thereof, in accordance with the terms of such Tranche 2 Letter of Credit, that
  such Tranche 2 Letter of Credit will not be renewed; (iv) each Tranche 2 Letter
  of Credit shall be denominated in Dollars; and (v) the Issuing Agent will not
  issue any Tranche 2 Letter of Credit after it has received written notice from
  any Borrower or the Required Lenders stating that a Default or an Event of Default
  exists until such time as the Issuing Agent 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 Default or Event of Default by the Required
  Lenders (or, to the extent provided by Section 12.11, each of the Lenders).
  

 (c)    Each
      Tranche 2 Letter of Credit will be issued by the Issuing Agent on behalf
      of the Tranche 2 Lenders and each Tranche 2 Lender will participate in
      each Tranche 2 Letter of Credit pro rata in accordance with
      its Tranche 2 Percentage. The obligations of each Tranche 2 Lender under
      and in respect of each Tranche 2 Letter of Credit are several, and the
      failure by any Tranche 2 Lender to perform its obligations hereunder or
      under any Tranche 2 Letter of Credit shall not affect the obligations of
      the respective Borrower toward any other party hereto nor shall any other
      such party be liable for the failure by such Tranche 2 Lender to perform
      its obligations hereunder or under any Tranche 2 Letter of Credit.

 (d)    Subject
    to and on the terms and conditions set forth herein, the Issuing Agent is
    hereby authorized by each Designated Subsidiary Borrower and the Tranche
    2 Lenders to arrange for the issuance of any Tranche 2 Letter of Credit pursuant
    to Section 2B.01(a) and the amendment of any Tranche 2 Letter of Credit pursuant
  to Section 1.13, Section 2B.06 and/or Section 12.04(b) by:

 (i)    completing
  the commencement date and the expiry date of such Tranche 2 Letter of Credit;

 (ii)    in
    the case of an amendment increasing or reducing the amount thereof, amending
    such Tranche 2 Letter of Credit in such manner as the Issuing Agent and the
  respective beneficiary may agree;

 (iii)    completing
    such Tranche 2 Letter of Credit with the participation of each Tranche 2
  Lender as allocated pursuant to the terms hereof; and

 (iv)   
  executing
  such Tranche 2 Letter of Credit on behalf of each Tranche 2 Lender and following
  such execution delivering such Tranche 2 Letter of Credit to the beneficiary
  of such Tranche 2 Letter of Credit.

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 (e)    Each
    Tranche 2 Letter of Credit shall be executed and delivered by the Issuing
    Agent in the name and on behalf of, and as attorney-in-fact for, each Tranche
    2 Lender party to such Tranche 2 Letter of Credit, and the Issuing Agent
    shall act under each Tranche 2 Letter of Credit, and each Tranche 2 Letter
    of Credit shall expressly provide that the Issuing Agent shall act, as the
    agent of each Tranche 2 Lender to (a) receive drafts, other demands for payment
    and other documents presented by the beneficiary under such Tranche 2 Letter
    of Credit, (b) determine whether such drafts, demands and documents are in
    compliance with the terms and conditions of such Tranche 2 Letter of Credit
    and (c) notify such Tranche 2 Lender and such Designated Subsidiary Borrower
    that a valid drawing has been made and the date that the related Tranche
    2 Unpaid Drawing is to be made; provided that the Issuing Agent shall
    have no obligation or liability for any Tranche 2 Unpaid Drawing under such
    Tranche 2 Letter of Credit, and each Tranche 2 Letter of Credit shall expressly
    so provide. Each Tranche 2 Lender hereby irrevocably appoints and designates
    the Issuing Agent as its attorney-in-fact, acting through any duly authorized
    officer of the Issuing Agent, to execute and deliver in the name and on behalf
    of such Tranche 2 Lender each Tranche 2 Letter of Credit to be issued by
    such Tranche 2 Lender hereunder. Promptly upon the request of the Issuing
    Agent, each Tranche 2 Lender will furnish to the Issuing Agent such powers
    of attorney or other evidence as any beneficiary of any Tranche 2 Letter
    of Credit may reasonably request in order to demonstrate that the Issuing
    Agent has the power to act as attorney-in-fact for such Tranche 2Lender to
  execute and deliver such Tranche 2 Letter of Credit.

  2B.02   
    Tranche 2 Letter of Credit Requests     (a) Whenever a Designated Subsidiary
     Borrower desires that a Tranche 2 Letter of Credit be issued, such Designated

    Subsidiary Borrower shall give the Administrative Agent and the Issuing Agent
     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
     Agent) thereof prior to 11:00 A.M. (New York time) at least five Business

    Days (or such shorter period as may be acceptable to the Issuing Agent) prior
     to the proposed date of issuance (which shall be a Business Day), which
    written
    notice shall be in the form of Exhibit C-2 (each, a “Tranche 2 Letter
     of Credit Request”). Each Tranche 2 Letter of Credit Request shall
     include  any other documents as the Issuing Agent customarily requires in
     connection
    therewith.

 (b)    The
    making of each Tranche 2 Letter of Credit Request shall be deemed to be a
    representation and warranty by the applicable Designated Subsidiary Borrower
    that such Tranche 2 Letter of Credit may be issued in accordance with, and
    it will not violate the requirements of, Section 2B.01(a) or (b).

 (c)    Upon
    its issuance of, or amendment to, any Tranche 2 Letter of Credit, the Issuing
    Agent shall promptly notify the respective Designated Subsidiary Borrower
    and the Tranche 2 Lenders of such issuance or amendment, which notice shall
    include a summary description of the Tranche 2 Letter of Credit actually
  issued and any amendments thereto.

  2B.03   
    Agreement to Repay Tranche 2 Letter of Credit Drawings.    (a) Each Designated
     Subsidiary Borrower agrees to reimburse each Tranche 2 Lender, by making
    payment
    to the Administrative Agent in immediately available funds at the Payment
     Office, for any payment or disbursement made by such Tranche 2 Lender under

    any Tranche 2 Letter of Credit which has been issued for such Designated
    Subsidiary  Borrower’s account (each such

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 amount so
  paid or disbursed until reimbursed, a “Tranche 2 Unpaid Drawing”)
  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 Tranche 2 Lender, to
  the extent not reimbursed prior to 1:00 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 Tranche 2 Lender is reimbursed therefor at
  a rate per annum which shall be the Base Rate plus the Applicable Margin for
  Tranche 1 Revolving Loans maintained as Base Rate Loans as in effect from time
  to time (or, if the Total Tranche 1 Commitment has been terminated and all Tranche
  1 Revolving Loans have been repaid, the Applicable Margin that would have been
  in effect for Tranche 1 Revolving Loans maintained as Base Rate Loans) (plus
  an additional 2% per annum, payable on demand, if not reimbursed by the third
  Business Day after the date of such payment or disbursement).

 (b)    Each
    Designated Subsidiary Borrower’s obligation under this Section 2B.03
    to reimburse each Tranche 2 Lender with respect to Tranche 2 Unpaid Drawings
    (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 Designated Subsidiary Borrower may have
    or have had against such Tranche 2 Lender, or the Issuing Agent, including,
    without limitation, any defense based upon the failure of any drawing under
    a Tranche 2 Letter of Credit to conform to the terms of the Tranche 2 Letter
    of Credit or any non-application or misapplication by the beneficiary of
    the proceeds of such drawing; provided, however, that no Designated
    Subsidiary Borrower shall be obligated to reimburse any Tranche 2 Lender
    for any wrongful payment made by such Tranche 2 Lender under a Tranche 2
    Letter of Credit as a result of acts or omissions constituting willful misconduct
    or gross negligence on the part of such Tranche 2 Lender (as determined by
  a court of competent jurisdiction in a final and non-appealable decision).

  2B.04   
    Increased Costs.    If after the Effective Date,
    the adoption or effectiveness of any applicable law, rule or regulation, order,
    guideline or request or any change therein after the Effective Date, or any
    change adopted or effective after the Effective Date in the interpretation
    or administration thereof by any Governmental Authority, central bank or comparable
    agency charged with the interpretation or administration thereof, or compliance
    by any Tranche 2 Lender with any request or directive (whether or not having
    the force of law) by any such authority, central bank or comparable agency
    shall either (i) impose, modify or make applicable any reserve, deposit, capital
    adequacy or similar requirement against letters of credit issued by or participated
    in by such Tranche 2 Lender, or (ii) impose on such Tranche 2 Lender any other
    conditions directly or indirectly affecting this Agreement or any Tranche
    2 Letter of Credit; and the result of any of the foregoing is to increase
    the cost to such Tranche 2 Lender of issuing, maintaining or participating
    in any Tranche 2 Letter of Credit, or to reduce the amount of any sum received
    or receivable by such Tranche 2 Lender hereunder or reduce the rate of return
    on its capital with respect to Tranche 2 Letters of Credit, then, upon written
    demand to the respective Designated Subsidiary Borrower by such Tranche 2
    Lender (with a copy to the Administrative Agent), such Designated Subsidiary
    Borrower agrees to pay to such Tranche 2 Lender such additional amount or
    amounts as will compensate such Tranche 2 Lender for such increased cost or
    reduction. A certificate submitted to the respective Designated Subsidiary
    Borrower by such Tranche 2 Lender (with a copy to the Administrative Agent),
    setting forth the basis for the determination of such additional amount or
    amounts necessary to compensate such Tranche 2 Lender as aforesaid shall be
    final and conclusive and binding on such Designated Subsidiary Borrower absent
    manifest error, although the failure to deliver any such certificate shall
    not release or diminish any Designated Subsidiary Borrower’s obligations
    to pay additional amounts pursuant to this Section 2B.04 upon subsequent receipt
    of such certificate.  

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   2B.05   Tranche
        2 Letter of Credit Expiration Extensions.   Each Tranche
        2 Lender acknowledges that to the extent provided under the terms of
        any Tranche 2 Letter of Credit, the expiration date of such Tranche 2
        Letter of Credit will be automatically extended for an additional year,
        without written amendment, unless at least 30 days prior to the expiration
        date of such Tranche 2 Letter of Credit, a Notice of Non-Extension is
        given by the Issuing Agent to the beneficiary of such Tranche 2 Letter
        of Credit in accordance with the terms of the respective Tranche 2 Letter
        of Credit that the expiration date of such Tranche 2 Letter of Credit
        will not be extended beyond its current expiration date. The Issuing
        Agent will give Notices of Non-Extension as to any or all outstanding
        Tranche 2 Letters of Credit if requested to do so by the Required Lenders
        pursuant to Section 9. The Issuing Agent will give Notices of Non-Extension
        as to all outstanding Tranche 2 Letters of Credit if the Commitment Expiration
        Date has occurred. The Issuing Agent will send a copy of each Notice
        of Non-Extension to the respective Designated Subsidiary Borrower concurrently
        with delivery thereof to the respective beneficiary, unless prohibited
    by law from doing so.

   2B.06   Changes
        to Stated Amount.   At any time when any Tranche 2
        Letter of Credit is outstanding, at the request of the respective Designated
        Subsidiary Borrower, the Issuing Agent will enter into an amendment increasing
        or reducing the Stated Amount of such Tranche 2 Letter of Credit, provided that
        (i) in no event shall the Stated Amount of any Tranche 2 Letter of Credit
        be increased to an amount which, when added to (x) the Tranche 2 Letter
        of Credit Outstandings (exclusive of Tranche 2 Unpaid Drawings which
        are repaid on the date of and prior to the issuance of the respective
        Tranche 2 Letter of Credit) at such time and (y) the aggregate principal
        amount of all Tranche 2 Revolving Loans then outstanding, would exceed
        an amount equal to the Total Tranche 2 Commitment at such time, (ii)
        the Stated Amount of a Tranche 2 Letter of Credit may not be increased
        at any time if the conditions precedent set forth in Section 5.02 are
        not satisfied at such time, and (iii) the Stated Amount of a Tranche
        2 Letter of Credit may not be increased at any time after the date which
        is 30 days prior to the Commitment Expiration Date.

   2B.07   Representations
        and Warranties of Tranche 2 Lenders.   Each Tranche
        2 Lender represents and warrants that each Tranche 2 Letter of Credit
        constitutes a legal, valid and binding obligation of such Tranche 2 Lender
    enforceable in accordance with its terms.

   2B.08   Existing
        Tranche 2 Letters of Credit.   (a)   Each
        letter of credit issued under the Existing Credit Agreement and outstanding
        immediately prior to the Effective Date and which is intended to be a
        Tranche 2 Letter of Credit hereunder is listed in Part B of Annex VIII
        (each such letter of credit, an “Existing Tranche 2 Letter of Credit”).
        Each Existing Tranche 2 Letter of Credit shall be deemed to be a Tranche
        2 Letter of Credit hereunder. As soon as possible following the Effective
        Date, each Existing Tranche 2 Letter of Credit shall be amended to replace
        each Original Lender on such Existing Tranche 2 Letter of Credit with
        each Tranche 2 Lender party to this Agreement on the Effective Date in
        accordance with such Tranche 2 Lender’s Tranche 2 Percentage. Until
        an Existing Tranche 2 Letter of Credit has been amended in accordance
        with this Section 2B.08, each Original Lender shall be deemed to have
    sold and

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transferred to each Tranche
2 Lender, and each such Tranche 2 Lender (each, a “Tranche 2 Participant”)
shall be deemed irrevocably and unconditionally to have purchased and received
from such Original Lender, without recourse or warranty, an undivided interest
and participation, to the extent of such Tranche 2 Participant’s Tranche
2 Percentage in such Existing Tranche 2 Letter of Credit, each substitute Existing
Tranche 2 Letter of Credit, each drawing made thereunder, the obligations of
any Borrower under this Agreement with respect thereto and any security therefore
or guaranty pertaining thereto. Upon any change in the Tranche 2 Commitments
of the Tranche 2 Lenders pursuant to Section 1.13 or 12.04(b), it is hereby agreed
that, with respect to all outstanding Existing Tranche 2 Letters of Credit and
Unpaid Drawings with respect thereto, there shall be an automatic adjustment
to the participations pursuant to this Section 2B.08 to reflect the new Tranche
2 Percentages of the assigning and assignee Tranche 2 Lender.

(b)   In determining whether to pay under any Existing Tranche
2 Letter of Credit, no Original Lender shall have any obligation relative to
the Tranche 2 Participants other than to determine that any documents required
to be delivered under such Existing Tranche 2 Letter of Credit have been delivered
and that they appear to substantially comply on their face with the requirements
of such Existing Tranche 2 Letter of Credit, which obligation, it is understood,
is being performed by the Issuing Agent, and upon whom each Original Lender shall
be entitled to rely. Any action taken or omitted to be taken by any Original
Lender under or in connection with any Existing Tranche 2 Letter of Credit issued
by it shall not create for such Original Lender any resulting liability to any
Borrower, any Tranche 2 Lender or any other Person unless such action is taken
or omitted to be taken with gross negligence or willful misconduct (as determined
by a court
of competent jurisdiction in a final and non-appealable decision).

(c)   In the event that any Original Lender makes any payment under any Existing Tranche 2 Letter of Credit issued by it and the respective Borrower shall not have reimbursed such amount in full to each Original Lender pursuant to Section 2B.03(a), such Original Lender shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify each Tranche 2 Participant of such failure, and each such Tranche 2 Participant shall promptly and unconditionally pay to the Administrative Agent for the account of such Original Lender, the amount of such Tranche 2 Participant’s Tranche 2 Percentage of such payment in Dollars and in same day funds.  If the Administrative Agent so notifies any Tranche 2 Participant required to fund a payment under an Existing Tranche 2 Letter of Credit prior to 11:00 A.M. (New York time) on any Business Day, such Tranche 2 Participant shall make available to the Administrative
 Agent at the Payment Office for the account of the respective Original Lender such Tranche 2 Participant’s
    Percentage of the amount of such payment on such Business Day in same day
    funds (and, to the extent such notice is given after 11:00 A.M. (New York
    time) on any Business Day, such Tranche 2 Participant shall make such payment
    on the immediately following Business Day). If and to the extent such Tranche
    2 Participant shall not have so made its Tranche 2 Percentage of the amount
    of such payment available to the Administrative Agent for the account of
    the respective Original Lender, such Tranche 2 Participant agrees to pay
    to the Administrative Agent for the account of such Original Lender, forthwith
    on demand such amount, together with interest thereon, for each day from
    such date until the date such amount is paid to the Administrative Agent
    for the account of such Original Lender at the overnight Federal Funds Rate
    for the first three days and at the interest

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rate applicable to Tranche 2 Revolving Loans that are maintained as Base Rate
Loans for each day thereafter. The failure of any Tranche 2 Participant to make
available to the Administrative Agent for the account of the respective Original
Lender its Tranche 2 Percentage of any payment under any Existing Tranche 2 Letter
of Credit issued by it shall not relieve any other Tranche 2 Participant of its
obligation hereunder to make available to the Administrative Agent for the account
of such Original Lender its Tranche 2 Percentage of any payment under any such
Tranche 2 Letter of Credit on the date required, as specified above, but no Tranche
2 Participant shall be responsible for the failure of any other Tranche 2 Participant
to make available to the Administrative Agent for the account of such Original
Lender such other
Tranche 2 Participant’s Tranche 2 Percentage of any such payment.

(d)   Whenever any Original Lender receives a payment of a reimbursement
obligation as to which the Administrative Agent has received for the account
of such Original Lender any payments from the Tranche 2 Participants pursuant
to Section 2B.08(c), such Original Lender shall pay to the Administrative Agent
and the Administrative Agent shall promptly pay to each Tranche 2 Participant
which has paid its Tranche 2 Percentage thereof, in Dollars and in same day funds,
an amount equal to such Tranche 2 Participant’s Tranche 2 Percentage of
the principal amount thereof and interest thereon accruing after the purchase
of the respective participations.

(e)   The obligations of the Tranche 2 Participants to make payments
to the Administrative Agent for the account of the respective Original Lender
with respect to Existing Tranche 2 Letters of Credit issued by it shall be irrevocable
and not subject to counterclaim, set-off or other defense or any other 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 Credit
Documents;

(ii)   the existence of any claim, set-off, defense or other right
which the Parent Borrower or any of its Subsidiaries may have at any time against
a beneficiary named in an Existing Tranche 2 Letter of Credit, any transferee
of any Existing Tranche 2 Letter of Credit (or any Person for whom any such transferee
may be acting), the Administrative Agent, any Original Lender, or other Person,
whether in connection with this Agreement, any Existing Tranche 2 Letter of Credit,
the transactions contemplated herein or any unrelated transactions (including
any underlying transaction between the Parent Borrower or any of its Subsidiaries
and the beneficiary named
in any such Existing Tranche 2 Letter of Credit);

(iii)   any
    draft, certificate or other document presented under the Existing Tranche
    2 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;

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

(v)   the
occurrence of any Default or Event of Default.

   SECTION
    3.   Fees; Commitments.

   3.01   Fees.   (a)   The
      Parent Borrower agrees to pay the Administrative Agent a facility fee (the “Tranche
      1 Facility Fee”) for the account of the Tranche 1 Lenders pro rata on
      the basis of (i) prior to the earlier of the date the Total Tranche 1 Commitment
      terminates and the Commitment Expiration Date, their respective Tranche
      1 Commitments and (ii) on or after the earlier of the date the Total Tranche
      1 Commitment terminates and the Commitment Expiration Date, their respective
      Tranche 1 Percentages of Tranche 1 Letter of Credit Outstandings at such
      time, in each case for the period from and including the Effective Date
      to but not including the Final Maturity Date, computed at a per annum rate
      equal to the Applicable Margin for Facility Fees of (x) in the case of
      clause (i) of this Section 3.01(a), the Total Tranche 1 Commitment (as
      in effect from time to time) (regardless of utilization) and (y) in the
      case of clause (ii) of this Section 3.01(a), the Tranche 1 Letter of Credit
      Outstandings at such time. Accrued Tranche 1 Facility Fees shall be due
      and payable quarterly in arrears on the last Business Day of each calendar
      quarter and on the Final Maturity Date and, with respect to any Tranche
      1 Facility Fee owing to any Tranche 1 Lender who is replaced pursuant to
      Section 1.13, on the date on which such Tranche 1 Lender is replaced.

(b)   The Parent Borrower agrees to pay the Administrative Agent
a facility fee (the “Tranche 2 Facility Fee”) for the account of the
Tranche 2 Lenders pro rata on the basis of (i) prior to the earlier
of the date the Total Tranche 2 Commitment terminates and the Commitment Expiration
Date, their respective Tranche 2 Commitments and (ii) on or after the earlier
of the date the Total Tranche 2 Commitment terminates and the Commitment Expiration
Date, their respective Tranche 2 Percentage of Tranche 2 Letter of Credit Outstandings
at such time, in each case for the period from and including the Effective Date
to but not including the Final Maturity Date, computed at a per annum rate
equal to the Applicable Margin for Facility Fees of (x) in the case of clause
(i) of this Section 3.01(b), the Total Tranche 2 Commitment (as in effect from
time to time) (regardless of utilization) and (y) in the case of clause (ii)
of this Section 3.01(b), the Tranche 2 Letter of Credit Outstandings at such
time. Accrued Tranche 2 Facility Fees shall be due and payable quarterly in arrears
on the last Business Day of each calendar quarter and on the Final Maturity Date
and, with respect to any Tranche 2 Facility Fee owing to any Tranche 2 Lender
who is replaced pursuant to Section 1.13, on the date on which such Tranche 2
Lender is replaced.

(c)   The Parent Borrower agrees to pay the Administrative Agent a facility fee (the “Tranche 3 Facility Fee”)
    for the account of the Tranche 3 Lenders pro rata on the basis of their respective Tranche 3 Commitments for the period from and including the Effective Date to but not including the earlier of the date the Total Tranche 3 Commitment terminates and the Commitment Expiration Date, computed at a per annum rate equal to the Applicable Margin for Facility Fees of the Total Tranche 3 Commitment (as in effect from time to time) (regardless of utilization). Accrued Tranche 3 Facility Fees shall be due and payable quarterly in arrears on the last Business Day of each calendar quarter and on the earlier of the date the Total Tranche 3 Commitment
    terminates and the Commitment Expiration Date and, with respect to any Tranche
    3 Facility Fee owing to any Tranche 3 Lender who is replaced pursuant to
    Section 1.13, on the date on which such Tranche 3 Lender is replaced. 

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(d)   The Parent Borrower agrees to pay to the Administrative
Agent a utilization fee (the “Tranche 1 Utilization Fee”) for the account
of the Tranche 1 Lenders pro rata on the basis of their respective
Tranche 1 Revolving Loans then outstanding for the period from and including
the Effective Date to but not including the earlier of the date the Total Tranche
1 Commitment terminates and the Commitment Expiration Date, computed at a rate
per annum equal to the Applicable Margin for Utilization Fees of the aggregate
outstanding amount of Tranche 1 Revolving Loans at any time when the aggregate
outstanding amount of Revolving Loans incurred by all Borrowers is greater than
50% of the Total Commitment (as in effect from time to time). Accrued Tranche
1 Utilization Fees shall be due and payable quarterly in arrears on the last
Business Day of each calendar quarter and on the earlier of the date the Total
Tranche 1 Commitment terminates and the Commitment Expiration Date and, with
respect to any Tranche 1 Utilization Fee owing to any Tranche 1 Lender who is
replaced pursuant to Section 1.13, on the date on which such Tranche 1 Lender
is replaced.

(e)   The Parent Borrower agrees to pay to the Administrative
Agent a utilization fee (the “Tranche 2 Utilization Fee”) for the account
of the Tranche 2 Lenders pro rata on the basis of their respective
Tranche 2 Revolving Loans then outstanding for the period from and including
the Effective Date to but not including the earlier of the date the Total Tranche
2 Commitment terminates and the Commitment Expiration Date, computed at a rate
per annum equal to the Applicable Margin for Utilization Fees of the aggregate
outstanding amount of Tranche 2 Revolving Loans at any time when the aggregate
outstanding amount of Revolving Loans incurred by all Borrowers is greater than
50% of the Total Commitment (as in effect from time to time). Accrued Tranche
2 Utilization Fees shall be due and payable quarterly in arrears on the last
Business Day of each calendar quarter and on the earlier of the date the Total
Tranche 2 Commitment terminates and the Commitment Expiration Date and, with
respect to any Tranche 2 Utilization Fee owing to any Tranche 2 Lender who is
replaced pursuant to Section 1.13, on the date on which such Tranche 2 Lender
is replaced.

(f)   The Parent Borrower agrees to pay to the Administrative
Agent a utilization fee (the “Tranche 3 Utilization Fee”) for the account
of the Tranche 3 Lenders pro rata on the basis of their respective
Tranche 3 Revolving Loans then outstanding for the period from and including
the Effective Date to but not including the earlier of the date the Total Tranche
3 Commitment terminates and the Commitment Expiration Date, computed at a rate
per annum equal to the Applicable Margin for Utilization Fees of the aggregate
outstanding amount of Tranche 3 Revolving Loans at any time when the aggregate
outstanding amount of Revolving Loans incurred by all Borrowers is greater than
50% of the Total Commitment (as in effect from time to time). Accrued Tranche
3 Utilization Fees shall be due and payable quarterly in arrears on the last
Business Day of each calendar quarter and on the earlier of the date the Total
Tranche 3 Commitment terminates and the Commitment Expiration Date and, with
respect to any Tranche 3 Utilization Fee owing to any Tranche 3 Lender who is
replaced pursuant to Section 1.13, on the date on which such Tranche 3 Lender
is replaced.

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(g)   The Parent Borrower agrees to pay to the Administrative Agent for pro rata distribution
to each Tranche 1 Lender (based on their respective Tranche 1 Percentages), a
fee in respect of each Tranche 1 Letter of Credit (the “Tranche 1 Letter of Credit Fee”)
computed at a rate per annum equal to the Applicable Margin then in effect for Tranche 1 Revolving Loans maintained as Eurodollar Loans (or, if the Total Tranche 1 Commitment has been terminated and all Tranche 1 Revolving Loans have been repaid, the Applicable Margin that would have been in effect for Tranche 1 Revolving Loans maintained as Eurodollar Loans), on the daily Stated Amount of such Tranche 1 Letter of Credit. Accrued Tranche 1 Letter of Credit Fees shall be due and payable quarterly in arrears on the last Business Day of each calendar quarter and upon the first day on or after the termination of the Total Tranche 1 Commitment upon which no Tranche 1 Letters of Credit remain outstanding. 

 (h)   The
    Parent Borrower agrees to pay to the Administrative Agent for pro rata distribution
    to each Tranche 2 Lender (based on their respective Tranche 2 Percentages),
    a fee in respect of each Tranche 2 Letter of Credit (the “Tranche 2
    Letter of Credit Fee”) computed at a rate per annum equal
    to the Applicable Margin then in effect for Tranche 2 Revolving Loans maintained
    as Eurodollar Loans (or, if the Total Tranche 2 Commitment has been terminated
    and all Tranche 2 Revolving Loans have been repaid, the Applicable Margin
    that would have been in effect for Tranche 2 Revolving Loans maintained as
    Eurodollar Loans), on the daily Stated Amount of such Tranche 2 Letter of
    Credit. Accrued Tranche 2 Letter of Credit Fees shall be due and payable
    quarterly in arrears on the last Business Day of each calendar quarter and
    upon the first day on or after the termination of the Total Tranche 2 Commitment
    upon which no Tranche 2 Letters of Credit remain outstanding.

 (i)   The
    Parent Borrower agrees to pay directly to the Issuing Agent upon each issuance
    of and/or amendment of, a Letter of Credit such amount as shall at the time
    of such issuance or amendment be the administrative charge which the Issuing
    Agent is customarily charging for issuances of, or amendments of, letters
    of credit issued by it.

 (j)   The
    Parent Borrower agrees to pay to the Administrative Agent, for the account
    of the Administrative Agent, when and as due, such fees as have been, or
    are from time to time, separately agreed upon.

 (k)   All
    computations of Fees shall be made in accordance with Section 12.07(b).

   3.02   
    Voluntary
    Reduction of Commitments.
       (a)   Upon at least three Business Days’
    prior written notice (or telephonic notice promptly confirmed in writing)
    given by the Parent Borrower to the Administrative Agent at its Notice Office
    (which notice shall be deemed to be given on a certain day only if given before
    11:00 A.M. (New York time) on such day and the Administrative Agent shall
    promptly transmit such notice to each of the Tranche 1 Lenders), the Parent
    Borrower shall have the right, without premium or penalty, to terminate or
    partially reduce the Total Unutilized Tranche 1 Commitment, provided
    that (x) any such reduction shall apply to permanently reduce the Total Unutilized
    Tranche 1 Commitment and to proportionately reduce the Tranche 1 Commitment
    of each Tranche 1 Lender, and (y) any partial reduction pursuant to this Section
    3.02(a) shall be in integral multiples of at least $5,000,000. 

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(b)    Upon
at least three Business Days’ prior written notice (or telephonic notice
promptly confirmed in writing) given by the Parent Borrower to the Administrative
Agent at its Notice Office (which notice shall be deemed to be given on a certain
day only if given before 11:00 A.M. (New York time) on such day and the Administrative
Agent shall promptly transmit such notice to each of the Tranche 2 Lenders),
the Parent Borrower shall have the right, without premium or penalty, to terminate
or partially reduce the Total Unutilized Tranche 2 Commitment, provided that (x) any such reduction shall apply to permanently reduce the Total Unutilized Tranche 2 Commitment and to proportionately reduce the Tranche 2 Commitment of each Tranche 2 Lender, and (y) any partial reduction pursuant to this Section 3.02(b) shall be in integral multiples of at least $5,000,000. 

 (c)    Upon
    at least three Business Days’ prior written notice (or telephonic notice
    promptly confirmed in writing) given by the Parent Borrower to the Administrative
    Agent at its Notice Office (which notice shall be deemed to be given on a
    certain day only if given before 11:00 A.M. (New York time) on such day and
    the Administrative Agent shall promptly transmit such notice to each of the
    Tranche 3 Lenders), the Parent Borrower shall have the right, without premium
    or penalty, to terminate or partially reduce the Total Unutilized Tranche
    3 Commitment, provided that (x) any such reduction shall apply to permanently reduce the Total Unutilized Tranche 3 Commitment and to proportionately reduce the Tranche 3 Commitment of each Tranche 3 Lender, and (y) any partial reduction pursuant to this Section 3.02(c) shall be in integral multiples of at least $5,000,000. 

 (d)   Notwithstanding
    anything to the contrary contained in this Section 3.02 or elsewhere in this
    Agreement, any reductions to the Total Unutilized Tranche 1 Commitment, the
    Total Unutilized Tranche 2 Commitment or the Total Unutilized Tranche 3 Commitment,
    made pursuant to Sections 3.02(a), (b) or (c), respectively, shall be applied pro rata to
    the Total Tranche 1 Commitment, the Total Tranche 2 Commitment and the Total
    Tranche 3 Commitment based on the Tranche 1 Reduction Percentage, the Tranche
    2 Reduction Percentage and the Tranche 3 Reduction Percentage, in each case
    as in effect at the time of any such reduction.

   3.03   
    Mandatory
    Reduction of Commitments.   (a)  
    The Total Commitment (and the Commitment of each Lender) shall be terminated
    at 5:00 p.m. (New York time) on the Expiration Date unless the Effective Date
    has occurred on or before such date. 

 (b)   Unless
    previously terminated pursuant to Section 3.02 or Section 3.03(a) above,
    the Total Commitment shall terminate at 9:00 A.M. on the Commitment Expiration
    Date.

   SECTION
    4.   Payments.

   4.01   
    Voluntary
    Prepayments.   Each
    Borrower shall have the right to prepay Revolving Loans incurred by it, without
    premium or penalty (except for amounts payable to Section 1.11), in whole
    or in part, from time to time on the following terms and conditions: (i) such
    Borrower shall give the Administrative Agent at the Payment Office written
    notice (or telephonic notice promptly confirmed in writing) of its intent
    to prepay the Revolving Loans, specifying whether such Revolving Loans are
    Tranche 1 Revolving Loans, Tranche 2 Revolving Loans or Tranche 3 Revolving
    Loans, the amount of such prepayment and (in the case of Eurodollar Loans)
    the specific Borrowing(s) pursuant to which such Revolving Loans were 

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  made, which notice shall be received by the Administrative Agent (x) in the case of Base Rate Loans, no later than 11:00 A.M. (New York time) one Business Day prior to the date of such prepayment, or (y) in the case of Eurodollar Loans, at least three Business Days prior to the date of such prepayment and which notice shall promptly be transmitted by the Administrative Agent to each of the Lenders; (ii) each partial prepayment shall be in an aggregate principal amount of at least $1,000,000, provided that no partial prepayment of any Revolving Loans shall reduce the aggregate principal amount of the Revolving Loans outstanding under a single Tranche to an amount less than $1,000,000; (iii) each prepayment in respect of any Revolving Loans made pursuant to a Borrowing shall be applied pro ra
ta among such Revolving Loans; (iv) prepayments of Eurodollar Loans made pursuant to this Section 4.01 may only be made on the last day of an Interest Period applicable thereto unless concurrently with such prepayment any payments required to be made pursuant to Section 1.11 as a result of such prepayment are made; and (v) each prepayment of Tranche 2 Revolving Loans or Tranche 3 Revolving Loans pursuant to this Section 4.01 shall consist of a pro rata prepayment of Tranche 2 Revolving Loans and Tranche 3 Revolving Loans on the basis of the Tranche 2 Revolving Percentage and the Tranche 3 Revolving Percentage, in each case at the time of any such prepayment. 

   4.02   
    Mandatory
    Repayments.   (a)   If
    on any date prior to the Commitment Expiration Date, the sum of the aggregate
    outstanding principal amount of Tranche 1 Revolving Loans plus the
    Tranche 1 Letter of Credit Outstandings exceeds the Total Tranche 1 Commitment
    as then in effect, the Parent Borrower shall repay, or cause one or more of
    the Borrowers to whom Tranche 1 Revolving Loans were made and/or for whose
    account Tranche 1 Letters of Credit were issued to repay, on such day the
    outstanding Tranche 1 Revolving Loans in an aggregate principal amount equal
    to the amount by which the aggregate outstanding principal amount of Tranche
    1 Revolving Loans plus the Tranche 1 Letter of Credit Outstandings
    exceeds the Total Tranche 1 Commitment as then in effect. If, after giving
    effect to the prepayment of all outstanding Tranche 1 Revolving Loans, as
    set forth above, the Tranche 1 Letter of Credit Outstandings exceeds the Total
    Tranche 1 Commitment, the Parent Borrower shall pay, or cause one or more
    Borrowers for whose account Tranche 1 Letters of Credit were issued to pay,
    to the Administrative Agent at the Payment Office on such date an amount of
    cash and/or Cash Equivalents equal to the amount of such excess, such cash
    and/or Cash Equivalents to be held as security for all obligations of the
    respective Borrower to the Tranche 1 Lenders hereunder in the Collateral Account
    applicable to such Borrower. 

 (b)    If on any date prior to the Commitment Expiration Date, the sum of the aggregate outstanding principal amount of Tranche 2 Revolving Loans plus the Tranche 2 Letter of Credit Outstandings exceeds the Total Tranche 2 Commitment as then in effect, the Parent Borrower shall repay, or cause one or more Borrowers to whom Tranche 2 Revolving Loans were made and/or for whose account Tranche 2 Letters of Credit were issued to repay, on such day the outstanding Tranche 2 Revolving Loans in an aggregate principal amount equal to the amount by which the aggregate outstanding principal amount of Tranche 2 Revolving Loans plus the Tranche 2 Letter of
Credit Outstandings exceeds the Total Tranche 2 Commitment as then in effect. If, after giving effect to the prepayment of all outstanding Tranche 2 Revolving Loans, as set forth above, the Tranche 2 Letter of Credit Outstandings exceeds the Total Tranche 2 Commitment, the Parent Borrower shall pay, or cause one or more Borrowers for whose account Tranche 2 Letters of Credit were issued to pay, to the Administrative Agent at the Payment Office on such date an amount of cash and/or Cash Equivalents equal to the amount of such
      excess,
      such cash and/or Cash Equivalents to be held as security for all obligations
      of the respective Borrowers to the Tranche 2 Lenders hereunder in a cash
      collateral account to be established by the Administrative Agent on terms
      reasonably satisfactory to the Administrative Agent.   

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 (c)    If on any date the aggregate outstanding principal amount of Tranche 3 Revolving Loans exceeds the Total Tranche 3 Commitment as then in effect, the Parent Borrower shall repay, or cause one or more Borrowers to whom Tranche 3 Revolving Loans were made to repay, on such day the outstanding Tranche 3 Revolving Loans in an aggregate principal amount equal to the amount by which the aggregate outstanding principal amount of Tranche 3 Revolving Loans exceeds the Total Tranche 3 Commitment as then in effect.

 (d)    If on any date, after giving effect to any prepayment of outstanding Revolving Loans pursuant to paragraph (a) above, the sum of the aggregate outstanding principal amount of Tranche 1 Revolving Loans incurred by any Borrower plus the
      Tranche 1 Letter of Credit Outstandings attributable to such Borrower exceeds
      the Borrowing Base of such Borrower at such time, such Borrower shall within
      one Business Day of such date repay the outstanding Tranche 1 Revolving
      Loans incurred by it in an aggregate principal amount equal to such excess.
      If, after giving effect to the prepayment of all outstanding Tranche 1
      Revolving Loans incurred by such Borrower, as set forth above, the Tranche
      1 Letter of Credit Outstandings applicable to such Borrower exceed such
      Borrower’s Borrowing Base, such Borrower shall pay or deliver to the
      Collateral Agent within one Business Day of such date an amount of cash
      and/or Eligible Securities (valued for this purpose based on the respective
      Advance Rate applicable thereto) in an aggregate amount equal to the amount
      of such excess, with any such cash or Eligible Securities to be held as
      additional security for all obligations of the respective Borrower hereunder
      in the Collateral Account applicable to such Borrower. 

 (e)    Notwithstanding anything to the contrary contained elsewhere in this Agreement, all outstanding Revolving Loans shall be repaid in full on the Commitment Expiration Date.

 (f)    With respect to each prepayment of Revolving Loans required by Sections 4.02(a), (b) and (c), the respective Borrower may designate the Types of Revolving Loans of the respective Tranche which are to be prepaid and the specific Borrowing or Borrowings of the respective Tranche pursuant to which such Revolving Loans were made, provided that (i) if any prepayment of Eurodollar Loans made pursuant to a single Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to such Borrowing to an amount less than $1,000,000 for such Borrowing, then all Eurodollar Loans outstanding pursuant to such Borrowing shall be immediately converted into
a Borrowing of Base Rate Loans and (ii) each prepayment of Revolving Loans made pursuant to the same Borrowing shall be applied pro rata among the Lenders which made such Revolving Loans. In the absence of a designation by the respective Borrower as described in the preceding sentence, the Administrative Agent shall, subject to the above, make such designation in its sole discretion. 

 (g)    Notwithstanding the foregoing provisions of this Section 4.02, if at any time the mandatory repayment of Revolving Loans pursuant to Section 4.02(a), (b), (c) or (d) would result in any Borrower incurring breakage costs under Section 1.11 as a result of Eurodollar Loans being repaid other than on the last day of an Interest Period applicable thereto

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  (any such Eurodollar
  Loans, “Affected Loans”), such Borrower may elect, by written notice
  to the Administrative Agent, to have the provisions of the following sentence
  be applicable so long as no Event of Default then exists. At the time any Affected
  Loans are otherwise required to be prepaid, such Borrower may elect to deposit
  100% (or such lesser percentage elected by such Borrower as not being repaid)
  of the principal amounts that otherwise would have been paid in respect of
  the Affected Loans with the Administrative Agent to be held as security for
  the obligations of such Borrower hereunder pursuant to a cash collateral agreement
  to be entered into in form and substance satisfactory to the Administrative
  Agent and shall provide for investments of such deposits as directed by such
  Borrower and satisfactory to the Administrative Agent, with such cash collateral
  to be released from such cash collateral account (and applied to repay the
  principal amount of such Eurodollar Loans) upon each occurrence thereafter
  of the last day of an Interest Period applicable to such Eurodollar Loans (or
  such earlier date or dates as shall be requested by such Borrower), with the
  amount to be so released and applied on the last day of each Interest Period
  to be the amount of such Eurodollar Loans to which such Interest Period applies
  (or, if less, the amount remaining in such cash collateral account); provided that
  (i) interest in respect of such Affected Loans shall continue to accrue thereon
  at the rate provided hereunder until such Affected Loans have been repaid in
  full and (ii) at any time while an Event of Default has occurred and is continuing,
  the Required Lenders may direct the Administrative Agent (in which case the
  Administrative Agent shall, and is hereby authorized by the Borrowers to, follow
  said directions) to apply any or all proceeds then on deposit in such collateral
  account to the payment of such Affected Loans. All risk of loss in respect
  of investments made as contemplated in this Section 4.02(g) shall be on the
  respective Borrower. Under no circumstances shall the Administrative Agent
  be liable or accountable to any Borrower or any other Person for any decrease
  in the value of the cash collateral account or for any loss resulting from
  the sale of any investment so made. Any funds remaining in the cash collateral
  account following the repayment of all Affected Loans shall be returned to
  the applicable Borrower. Fees and expenses related to the establishment of
  the cash collateral account shall be borne by the applicable Borrower and shall
  not exceed the Administrative Agent’s customary fees and expenses for
  the establishment of cash collateral accounts generally. 

   4.03   
    Method
    and Place of Payment.   
    Except as otherwise specifically provided herein, all payments under this
    Agreement and the Notes shall be made to the Administrative Agent for the
    ratable account of the Lenders entitled thereto, not later than 11:00 A.M.
    (New York time) on the date when due and shall be made in immediately available
    funds and in lawful money of the United States of America at the Payment Office,
    it being understood that written, telex or facsimile notice by a Borrower
    to the Administrative Agent to make a payment from the funds in such Borrower’s
    account at the Payment Office shall constitute the making of such payment
    to the extent of such funds held in such account. Any payments under this
    Agreement which are made later than 11:00 A.M. (New York time) shall be deemed
    to have been made on the next succeeding Business Day. Whenever any payment
    to be made hereunder shall be stated to be due on a day which is not a Business
    Day, the due date thereof shall be extended to the next succeeding Business
    Day and, with respect to payments of principal, interest shall be payable
    during such extension at the applicable rate in effect immediately prior to
    such extension. 

   4.04   
    Net
    Payments.   (a)   All
    payments made by any Borrower hereunder or under any Note will be made without
    setoff, counterclaim or other defense. Except as provided in Section 4.04(b),
    all such payments will be made free and clear of, and without deduction or
    

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 withholding
  for, any present or future taxes, levies, imposts, duties, fees, assessments
  or other charges of whatever nature now or hereafter imposed by any jurisdiction
  or by any political subdivision or taxing authority thereof or therein with
  respect to such payments (but excluding, except as provided in the second succeeding
  sentence, any tax imposed on or measured by the net income or net profits of
  a Lender pursuant to the laws of the jurisdiction in which it is organized or
  the jurisdiction in which the principal office or applicable lending office
  of such Lender is located or any subdivision thereof or therein) and all interest,
  penalties or similar liabilities with respect to such non-excluded taxes, levies,
  imposts, duties, fees, assessments or other charges (all such non-excluded taxes,
  levies, imposts, duties, fees, assessments or other charges being referred to
  collectively, as “Taxes”). If any Taxes are so levied or imposed,
  the Parent Borrower agrees to pay the full amount of such Taxes, and such additional
  amounts as may be necessary so that every payment of all amounts due under this
  Agreement or under any Note, after withholding or deduction for or on account
  of any Taxes, will not be less than the amount provided for herein or in such
  Note. If any amounts are payable in respect of Taxes pursuant to the preceding
  sentence, the Parent Borrower agrees to reimburse each Lender, upon the written
  request of such Lender, for taxes imposed on or measured by the net income or
  net profits of such Lender, and franchise taxes imposed in lieu of taxes imposed
  on or measured by net income or net profits of a Lender, pursuant to the laws
  of the jurisdiction in which such Lender is organized or in which the principal
  office or applicable lending office of such Lender is located or under the laws
  of any political subdivision or taxing authority of any such jurisdiction in
  which such Lender is organized or in which the principal office or applicable
  lending office of such Lender is located and for any withholding of taxes as
  such Lender shall determine are payable by, or withheld from, such Lender, in
  respect of such amounts so paid to or on behalf of such Lender pursuant to the
  preceding sentence and in respect of any amounts paid to or on behalf of such
  Lender pursuant to this sentence. The Parent Borrower will furnish to the Administrative
  Agent within 45 days after the date the payment of any Taxes is due pursuant
  to applicable law certified copies of tax receipts evidencing such payment by
  the Parent Borrower. The Parent Borrower agrees to indemnify and hold harmless
  each Lender, and reimburse such Lender upon its written request, for the amount
  of any Taxes so levied or imposed and paid by such Lender.

   (b)   Each
    Lender that is not a United States person (as such term is defined in Section
    7701(a)(30) of the Code) for U.S. Federal income tax purposes agrees to deliver
    to each Designated Subsidiary Borrower organized under the laws of the United
    States (each, a “U.S. Borrower”) and the Administrative Agent on
    or prior to the date that such U.S. Borrower becomes a Designated Subsidiary
    Borrower pursuant to Section 1.14, or in the case of a Lender that is an assignee
    or transferee of an interest under this Agreement pursuant to Section 1.13
    or Section 12.04 (unless the respective Lender was already a Lender hereunder
    immediately prior to such assignment or transfer), on the date of such assignment
    or transfer to such Lender, or in the case of an Additional Tranche 1 Lender
    (unless the respective Additional Tranche 1 Lender was already a Tranche 1
    Lender hereunder immediately prior to such assignment of transfer), on the
    respective Additional Tranche 1 Commitment Date, (i) two accurate and complete
    original signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN
    (with respect to a complete exemption under an income tax treaty) (or successor
    forms) certifying to such Lender’s entitlement as of such date to a complete
    exemption from United States withholding tax with respect to payments to be
    made under this Agreement and under any Note, or (ii) if the Lender is not
    a “bank” within the meaning of Section 881(c)(3)(A) of the Code
    and cannot deliver either

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Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under an income tax treaty) pursuant to clause (i) above, (x) a certificate substantially in the form of Exhibit D (any such certificate, a “Section 4.04(b)(ii) Certificate”) and (y) two accurate and complete original signed copies of Internal Revenue Service Form W-8BEN (with respect to the portfolio interest exemption) (or successor form) certifying to such Lender’s entitlement as of such date to a complete exemption from United States withholding tax with respect to payments of interest to be made under this Agreement and under any Note.  In addition, each Lender that is lending to and/or issuing Letters of Credit for the account of a U.S. Borrower agrees that from time to time after the Effective Date, when a lapse in time or change in circumstances renders the previous certification obsolete or inaccurate in any material respect, such Le
nder will deliver to each U.S. Borrower and the Administrative Agent two new accurate and complete original signed copies of Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect to the benefits of any income tax treaty), or Form W-8BEN (with respect to the portfolio interest exemption) and a Section 4.04(b)(ii) Certificate, as the case may be, and such other forms as may be required in order to confirm or establish the entitlement of such Lender to a continued exemption from or reduction in United States withholding tax with respect to payments under this Agreement and any Note, or it shall immediately notify each U.S. Borrower and the Administrative Agent of its inability to deliver any such Form or Certificate, in which case such Lender shall not be required to deliver any such Form or Certificate pursuant to this Section 4.04(b).  Notwithstanding anything to the contrary contained in Section 4.04(a), but subject to Section 12.04(b) and the immediately succeeding sentence, (x) each U.S. Borrower

 shall be entitled, to the extent it is required to do so by law, to deduct or withhold income or similar taxes imposed by the United States (or any political subdivision or taxing authority thereof or therein) from interest, Fees or other amounts payable hereunder for the account of any Lender which is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent that such Lender has not provided to such U.S. Borrower, the U.S. Internal Revenue Service Forms that establish a complete exemption from such deduction or withholding and (y) no U.S. Borrower shall be obligated pursuant to Section 4.04(a) hereof to gross-up payments to be made to a Lender in respect of income or similar taxes imposed by the United States (I) if such Lender has not provided to such U.S. Borrower, the Internal Revenue Service Forms required to be provided to U.S. Borrower pursuant to this Section 4.04(b) or (II) in the case of a payment by the U.S. Borrower

s, other than interest, to a Lender described in clause (ii) above, to the extent that such Forms do not establish a complete exemption from withholding of such taxes. Notwithstanding anything to the contrary contained in the preceding sentence or elsewhere in this Section 4.04 and except as set forth in Section 12.04(b), the Parent Borrower agrees to pay any additional amounts and to indemnify each Lender in the manner set forth in Section 4.04(a) (without regard to the identity of the jurisdiction requiring the deduction or withholding) in respect of any amounts deducted or withheld by it as described in the immediately preceding sentence as a result of any changes that are effective after the Effective Date in any applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, relating to the deducting or withholding of such income or similar taxes.

(c)   Each Lender agrees to use reasonable efforts (consistent with legal and regulatory restrictions and subject to overall policy considerations of such Lender) to file any certificate or document or to furnish to any Borrower that is not a U.S. Borrower any information as reasonably requested by such Borrower that may be necessary to establish any available exemption
    from, or reduction in the amount of, any Taxes; provided, however, that
    nothing in this Section 4.04(c) shall require a Lender to disclose any confidential
  information (including, without limitation, its tax returns or its Tax calculations).

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   SECTION
    5. Conditions Precedent.

  5.01   Conditions
    Precedent to the Effective Date. This Agreement shall become effective
    on the date (the “Effective Date”) on which each of the following
    conditions shall have been satisfied, or waived by the Required Lenders:

(a)   
  Execution of Agreement; Notes. On the Effective Date, (i) the Parent
  Borrower, each Initial Designated Subsidiary Borrower, the Administrative Agent
  and each Lender shall have signed a copy hereof (whether the same or different
  copies) and shall have delivered (or transmitted by telecopy) the same to the
  Administrative Agent at its Notice Office; and (ii) there shall have been delivered
  to the Administrative Agent for the account of each Lender that has requested
  the same the appropriate Note or Notes, executed by each Borrower, in each case,
  in the amount, maturity and as otherwise provided herein.

 (b)   Opinion
  of Counsel. On the Effective Date, the Administrative Agent shall have received
  (i) an opinion, in form and substance reasonably satisfactory to the Administrative
  Agent, addressed to the Administrative Agent and each of the Lenders and dated
  the Effective Date, from Skadden, Arps, Slate, Meagher & Flom LLP, special
  United States counsel to the Borrowers, which opinion shall cover the matters
  contained in Exhibit E-1, (ii) an opinion, in form and substance reasonably
  satisfactory to the Administrative Agent, addressed to the Administrative Agent
  and each of the Lenders and dated the Effective Date, from Appleby Spurling
  Hunter, special Bermuda counsel to the Borrowers, which opinion shall cover
  the matters contained in Exhibit E-2 and (iii) an opinion, in form and substance
  reasonably satisfactory to the Administrative Agent, addressed to the Administrative
  Agent and each of the Lenders and dated the Effective Date, from Ashurst, special
  England and Wales counsel to the Borrowers, which opinion shall cover the matters
  contained in Exhibit E-3.

(c)   Officer’s
  Certificate; Corporate Proceedings. (i) On the Effective Date, the Administrative
  Agent shall have received, from the Parent Borrower and each Initial Designated
  Subsidiary Borrower, a certificate, dated the Effective Date, signed by the
  President, Secretary or any Vice President of such Borrower, and attested to
  by another Authorized Officer of such Borrower, in the form of Exhibit F hereto
  with appropriate insertions and deletions, together with (x) copies of its certificate
  of incorporation, by-laws or other organizational documents and (y) the resolutions
  relating to the Credit Documents which shall be satisfactory to the Administrative
  Agent.

 (ii)   On or
  prior to the Effective Date, all corporate and legal proceedings and all instruments
  and agreements in connection with the transactions contemplated by this Agreement
  and the other Credit Documents shall be reasonably satisfactory in form and
  substance to the Administrative Agent, and the Administrative Agent shall have
  received all information and copies of all certificates, documents and papers,
  including certificates of existence or good standing certificates, as applicable,
  and any other records of corporate proceedings and governmental approvals, if
  any, which the Administrative Agent reasonably may have requested in connection
  therewith, such documents and papers where appropriate to be certified by proper
  corporate or governmental authorities.

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(d)   Adverse
  Change, etc.
  Since December 31, 2003, nothing shall have occurred or become known to the
  Administrative Agent or the Required Lenders which has had, or would reasonably
  be expected to have, either individually or in the aggregate, a Material Adverse
  Effect. 

 (e)   Litigation.
  On the Effective Date, no actions, suits or proceedings by any entity (private
  or governmental) shall be pending against the Parent Borrower or any of its
  Subsidiaries (i) with respect to this Agreement, any other Credit Document or
  any of the transactions contemplated hereby or thereby or (ii) which has had,
  or would reasonably be expected to have, either individually or in the aggregate,
  a Material Adverse Effect. 

(f)   Approvals,
  etc. On the
  Effective Date, all necessary governmental and third-party approvals, permits
  and licenses in connection with this Agreement and the other transactions contemplated
  by the Credit Documents and otherwise referred to herein or therein, shall have
  been obtained and remain in full force and effect. 

(g)   Indebtedness,
  etc. On the
  Effective Date, the Parent Borrower and its Subsidiaries shall have no outstanding
  preferred stock or Indebtedness after giving effect to this Agreement and the
  incurrence of any Revolving Loans except (w) the Obligations, (x) Indebtedness
  set forth on Annex V, (y) Indebtedness under any securities issued pursuant
  to the Shelf Registration and (z) Indebtedness (on an individual basis) which
  has an outstanding principal balance of less than $5,000,000. 

 (h)   No
  Default; Representations and Warranties.
  On the Effective Date, there shall exist no Default or Event of Default, and
  all representations and warranties made by each Borrower contained herein or
  in any other Credit Document shall be true and correct in all material respects
  (it being understood and agreed that any representation or warranty which by
  its terms is made as of a specified date shall be required to be true and correct
  in all material respects only as of such specified date). 

(i)   A.M.
  Best Rating.
  On the Effective Date, each Regulated Insurance Company shall have an A.M. Best
  financial strength rating of at least “B++”. 

(j)   Fees.
  On the Effective Date, the Borrowers shall have paid the Administrative Agent
  and the Lenders all fees, expenses (including, without limitation, legal fees
  and expenses) and other compensation contemplated by this Agreement and the
  other Credit Documents, agreed upon by such parties to be paid on or prior to
  the Effective Date. 

(k)   Three-Year
  Term Loan Agreement.
  On or prior to the Effective Date, the principal amount of all loans incurred
  under the Three-Year Term Loan Agreement, together with all accrued interest,
  fees and other amounts owing thereunder, shall have been paid in full. 

(l)   Security
  Documents.
  On or prior to the Effective Date, the Administrative Agent shall have received
  counterparts of the Security Agreement executed by each Borrower, together with:
  

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 (i)   all documents and instruments, including Uniform Commercial Code financing statements
  where applicable, required by law in each applicable jurisdiction or reasonably
  requested by the Administrative Agent to be filed, registered or recorded to
  create or perfect the Liens intended to be created under the Security Agreement;

(ii)   results
    of a recent search of the Uniform Commercial Code (or equivalent) filings
    made with respect to each Borrower in the jurisdictions contemplated in clause
    (i) above (including, without limitation, Washington D.C. and Bermuda) and
    in such other jurisdictions in which Collateral is located on the Effective
    Date which may be reasonably requested by the Administrative Agent, and copies
    of the financing statements (or similar documents) disclosed by such search
    and evidence reasonably satisfactory to the Administrative Agent that the
    Liens indicated by such financing statements (or similar documents) are permitted
  by the Security Agreement or have been released; and

(iii)   for
    each Collateral Account, a control agreement with The Bank of New York in
    the form specified in the Security Agreement (appropriately completed), with
    such changes thereto as may be reasonably acceptable to the Administrative
    Agent and each such control agreement shall be in full force and effect;

and the Security
  Agreement shall be in full force and effect.

(m)   Existing
  Credit Agreement.   On the Effective Date, all commitments under the Existing Credit Agreement shall
  have been terminated, all loans outstanding thereunder shall have been repaid
  in full, all letters of credit outstanding thereunder shall have been designated
  as either Existing Tranche 1 Letters of Credit under this Agreement pursuant
  to Section 2A.08 or Existing Tranche 2 Letters of Credit under this Agreement
  pursuant to Section 2B.08, and all other amounts under the Existing Credit Agreement
  (other than indemnities not then due and payable) shall have been paid in full.
  

 (n)   Leverage
  Ratio.   On
  the Effective Date, the Administrative Agent shall have received a certificate,
  executed by the chief financial officer of the Parent Borrower, setting forth
  the Leverage Ratio as of the Effective Date (after giving effect to the incurrence
  of Revolving Loans and issuance of Letters of Credit on such day), which certificate
  shall contain the calculations required to establish such Leverage Ratio and
  be in form and substance satisfactory to the Administrative Agent. 

 (o)   Existing
  Lender Agreement.   On the Effective Date, each Original Lender that will not be a Lender under
  this Agreement shall have executed and delivered to the Administrative agent
  an Existing Lender Agreement. 

   5.02   Conditions
           Precedent to All Revolving Loans and Letters of Credit.   The
           obligation of each Lender to make each Revolving Loan and the obligation
            of the Issuing Agent to issue or amend any Letter of Credit is subject,
           at
    the time of the making of each such Revolving
    Loan or Letter of Credit issued or amended, to the satisfaction of the following
    conditions:

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(a)   Effective Date.   The Effective Date shall have occurred. 

(b)   No Default; Representations and Warranties.   (i)   There shall exist no Default or Event of Default and (ii) all representations and warranties contained herein or in the other Credit Documents shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on the date of the making of such Revolving Loan or such issuance or amendment of a Letter of Credit, as the case may be (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).

(c)   Notice of Borrowing.   The Administrative Agent shall have received (i) a Notice of Borrowing meeting the requirements of Section 1.03(a) with respect to each incurrence of Revolving Loans and (ii) a Letter of Credit Request meeting the requirements of Section 2A.02 or 2B.02, as the case may be, with respect to each Letter of Credit to be issued.

The occurrence
    of the Effective Date shall constitute a representation and warranty by each
    Borrower to the Administrative Agent and each of the Lenders that all the
    conditions specified in Section 5.01 exist as of that time. Thereafter, the
    acceptance of the benefits of each Revolving Loan and Letter of Credit shall
    constitute a representation and warranty by the respective Borrower to the
    Administrative Agent and each of the Lenders that the conditions specified
    in Section 5.02 exist as of that time. All of the Notes, certificates, legal
    opinion and other documents and papers referred to in this Section 5, unless
    otherwise specified, shall be delivered to the Administrative Agent at its
    Notice Office for the account of each of the Lenders and, except for the
    Notes, in sufficient counterparts or copies for each of the Lenders and shall
    be in form and substance reasonably satisfactory to the Administrative Agent.
    The Administrative Agent shall give the Parent Borrower and each Lender written
  notice that the Effective Date has occurred.

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  SECTION
    6.   Representations,
    Warranties and Agreements.   In order to induce the Lenders to enter into this Agreement and to make the
    Revolving Loans and issue or amend the Letters of Credit provided for herein,
    each Borrower (solely as to itself and its Subsidiaries, provided that the
    representations and warranties in Sections 6.09 and 6.10 shall be deemed to
    be made only by the Parent Borrower) hereby makes the following representations
    and warranties to, and agreements with, the Lenders, all of which shall survive
    the execution and delivery of this Agreement and the making of the Revolving
    Loans and the issuance of any Letters of Credit (with the making of each Revolving
    Loan and the issuance or amendment of each Letter of Credit being deemed to
    constitute a representation and warranty that the matters specified in this
    Section 6 are true and correct in all material respects on and as of the date
    of the making of such Revolving Loan or issuance or amendment of such Letter
    of Credit, as the case may be, unless such representation and warranty expressly
    indicates that it is being made as of any specific date in which case such
    representation and warranty shall be true and correct in all material respects
    only as of such specified date): 

   6.01   Corporate
    Status.   Each of the Parent Borrower and each of its Subsidiaries (i) is a duly organized
    and validly existing corporation or business trust or other entity and in
    the case of the Borrowers organized under the laws of the United States or
    any State thereof, or any other jurisdiction where the concept of “good
    standing” is applicable, is in good standing under the laws of the jurisdiction
    of its organization and has the corporate or other organizational power and
    authority to own its property and assets and to transact the business in which
    it is engaged and presently proposes to engage, and (ii) has been duly qualified
    and is authorized to do business and is in good standing in all jurisdictions
    where it is required to be so qualified, except, in the case of this clause
    (ii), where the failure to be so qualified, authorized or in good standing
    would not reasonably be expected to have, either individually or in the aggregate,
    a Material Adverse Effect. 

  6.02   Corporate
    Power and Authority.   Each Borrower has the corporate power and authority to execute, deliver and
    carry out the terms and provisions of the Credit Documents to which it is
    a party and has taken all necessary corporate action to authorize the execution,
    delivery and performance of the Credit Documents to which it is a party. Each
    Borrower has duly executed and delivered each Credit Document to which it
    is a party and each such Credit Document constitutes the legal, valid and
    binding obligation of such Borrower enforceable against such Borrower in accordance
    with its terms, except to the extent that enforceability thereof may be limited
    by applicable bankruptcy, insolvency, moratorium or similar laws affecting
    creditors’ rights generally and general principles of equity regardless
    of whether enforcement is sought in a proceeding in equity or at law. 

   6.03   No
    Contravention of Laws, Agreements or Organizational Documents.   Neither the execution, delivery and performance by any Borrower of this Agreement
    or the other Credit Documents to which it is a party nor compliance with the
    terms and provisions thereof, nor the consummation of the transactions contemplated
    therein, (i) will contravene any applicable provision of any law, statute,
    rule, regulation, order, writ, injunction or decree of any court or governmental
    instrumentality, (ii) will conflict or be inconsistent with or result in any
    breach of any of the terms, covenants, conditions or provisions of, or constitute
    a default under, or result in the creation or imposition of (or the obligation
    to create or impose) any Lien (except Liens created pursuant to the Security
    Documents or pursuant to Section 4.02(g)) upon any of the
    property
    or assets of the Parent Borrower or any of its Subsidiaries pursuant to the
    terms of, any indenture, mortgage, deed of trust, loan agreement, credit
    agreement or any other material instrument to which the Parent Borrower or
    any of its Subsidiaries is a party or by which it or any of its property
    or assets are bound or to which it may be subject or (iii) will violate any
    provision of the certificate of incorporation, by-laws or other organizational
    documents of the Parent Borrower or any of its Subsidiaries.   

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   6.04   Litigation
    and Contingent Liabilities.   There are no actions, suits or proceedings pending or threatened in writing
    involving the Parent Borrower or any of its Subsidiaries (including, without
    limitation, with respect to this Agreement or any other Credit Document) that
    have had, or would reasonably be expected to have, either individually or
    in the aggregate, a Material Adverse Effect. 

   6.05   Use
    of Proceeds; Margin Regulations.   (a)   All proceeds of the Revolving Loans shall be utilized (i) for the general
    corporate and working capital purposes of the Parent Borrower and its Subsidiaries
    and (ii) by the Parent Borrower to purchase its outstanding ordinary shares
    and warrants to purchase any of the foregoing; provided that the aggregate
    amount of proceeds of the Revolving Loans used for such purchases shall not
    exceed $500,000,000. 

(b)   Neither the making of any Revolving Loan hereunder or other Indebtedness or financing of any Borrower, nor the use of the proceeds thereof, will violate or be inconsistent with the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System and no part of the proceeds of any Revolving Loan or other Indebtedness or financing of any Borrower will be used to purchase or carry any Margin Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock.

   6.06   Approvals.   Any order, consent, approval, license, authorization, or validation of, or
    filing, recording or registration with, or exemption by, any foreign or domestic
    governmental or public body or authority, or any subdivision thereof, which
    is required to authorize or is required in connection with (i) the execution,
    delivery and performance of any Credit Document or (ii) the legality, validity,
    binding effect or enforceability of any Credit Document, has been obtained.
    

   6.07   Investment
    Company Act.   Neither the Parent Borrower nor any of its Subsidiaries is an “investment
    company” or a company “controlled” by an “investment company,”
    within the meaning of the Investment Company Act of 1940, as amended. 

   6.08   Public
    Utility Holding Company Act.   Neither the Parent Borrower nor any of its Subsidiaries is a “holding
    company,” or a “subsidiary company” of a “holding company,”
    or an “affiliate” of a “holding company” or of a “subsidiary
    company” of a “holding company,” within the meaning of the
    Public Utility Holding Company Act of 1935, as amended. 

   6.09   True
    and Complete Disclosure; Projections and Assumptions.   All factual information (taken as a whole) heretofore or contemporaneously
    furnished by the Parent Borrower or any of its Subsidiaries to the Administrative
    Agent or any Lender in writing (including, without limitation, all information
    contained in the Credit Documents) for purposes 

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of or in connection
with this Agreement or any transaction contemplated herein is, and all other
factual information (taken as a whole with all other such information theretofore
or contemporaneously furnished) hereafter furnished by any such Persons in writing
to the Administrative Agent will be, true and accurate in all material respects
on the date as of which such information is dated and not incomplete by omitting
to state any material fact necessary to make such information (taken as a whole
with all other such information theretofore or contemporaneously furnished) not
misleading at such time in light of the circumstances under which such information
was provided. The projections contained in such materials are based on good faith
estimates and assumptions believed by the Parent Borrower to be reasonable and
attainable at the time made, it being recognized by the Lenders that such projections
as to future events are not to be viewed as facts and that actual results during
the period or periods covered by any such projections may differ from the projected
results.

   6.10   Financial
    Condition; Financial Statements.   (a)   The consolidated balance sheet of the Parent Borrower for the fiscal year
    ended December 31, 2003, and the related consolidated statements of income,
    shareholders’ equity and cash flows, reported on by Ernst & Young
    LLP, copies of which have been delivered to each of the Lenders, and the unaudited
    consolidated balance sheet of the Parent Borrower for its fiscal quarter ended
    March 31, 2004, and the related consolidated statements of income, shareholders’
    equity and cash flows, copies of which have been delivered to each of the
    Lenders, fairly present in all material respects, in each case, in conformity
    with GAAP or SAP, as applicable, consistently applied, the consolidated financial
    position and results of operations and cash flows of the Parent Borrower as
    of such dates and their consolidated results of operations and cash flows
    for such periods stated. 

(b)   Since December 31, 2003, nothing has occurred which has had, or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

   6.11   Tax
    Returns and Payments.   The Parent Borrower and its Subsidiaries (i) have timely filed with the appropriate
    taxing authority (taking into account any applicable extension within which
    to file) all material income and other material tax returns, domestic and
    foreign, required to be filed by the Parent Borrower and its Subsidiaries,
    and (ii) have paid all material taxes payable by them which have become due
    and assessments which have become due, except for those contested in good
    faith and adequately disclosed and for which adequate reserves have been established
    in accordance with GAAP and there is no action, suit, proceeding, investigation,
    audit or claim now pending or, to the best knowledge of the Parent Borrower
    or any of its Subsidiaries, proposed or threatened by any authority regarding
    material taxes relating to the Parent Borrower or any of its Subsidiaries.
    Neither the Parent Borrower nor any of its Subsidiaries has entered into an
    agreement or waiver or been requested to enter into an agreement or waiver
    extending any statute of limitations relating to the payment or collection
    of material taxes of the Parent Borrower or any of its Subsidiaries. No tax
    Liens have been filed and no claims are pending or, to the best knowledge
    of the Parent Borrower or any of its Subsidiaries, proposed or threatened
    with respect to any material taxes, fees or other charges for any taxable
    period.

   6.12   Compliance
    with ERISA.   (a)   The Parent Borrower and its Subsidiaries and ERISA Affiliates have fulfilled
    their respective obligations under the minimum funding
    standards
    of ERISA and the Code with respect to each Plan and are in compliance with
    the applicable provisions of ERISA and the Code, and have not incurred any
    liability to the PBGC or any Plan or Multiemployer Plan (other than to make
    contributions in the ordinary course of business), except to the extent that
    any of the foregoing have not had, or would not reasonably be expected to
    have, either individually or in the aggregate, a Material Adverse Effect.  

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(b)   Each
    Foreign Pension Plan has been maintained in compliance with its terms and
    with the requirements of any and all applicable laws, statutes, rules, regulations
    and orders and has been maintained, where required, in good standing with
    applicable regulatory authorities, except where the failure to do any of
    the foregoing has not had, or would not reasonably be expected to have, either
    individually or in the aggregate, a Material Adverse Effect. All contributions
    required to be made with respect to a Foreign Pension Plan have been timely
    made, except where the failure to do any of the foregoing has not had, or
    would not reasonably be expected to have, either individually or in the aggregate,
    a Material Adverse Effect. Neither the Parent Borrower nor any of its Subsidiaries
    has incurred any obligation in connection with the termination of, or withdrawal
    from, any Foreign Pension Plan, except for any obligations which have not
    had, or would not reasonably be expected to have, either individually or
    in the aggregate, a Material Adverse Effect. The present value of the accrued
    benefit liabilities (whether or not vested) under each Foreign Pension Plan,
    determined as of the end of the Parent Borrower’s most recently ended fiscal year on the basis of actuarial assumptions, each of which is reasonable, did not exceed the current value of the assets of such Foreign Pension Plan allocable to such benefit liabilities (any such excess a “value shortfall”),
    except for any such value shortfalls which have not had, or would not reasonably
    be expected to have, either individually or in the aggregate, a Material
    Adverse Effect.

   6.13   Subsidiaries.   (a)   Set forth in Annex III is a complete and correct list of all of the Subsidiaries
    of the Parent Borrower as of the Effective Date, together with, for each such
    Subsidiary, (i) the jurisdiction of organization of such Subsidiary, (ii)
    each Person holding direct ownership interests in such Subsidiary and (iii)
    the percentage of ownership of such Subsidiary represented by such ownership
    interests. Except as disclosed in Annex III, each of the Parent Borrower and
    its Subsidiaries owns, free and clear of Liens, and has the unencumbered right
    to vote, all outstanding ownership interests in each Person shown to be held
    by it in Annex III. 

(b)   There are no restrictions on the Parent Borrower or any of its Subsidiaries which prohibit or otherwise restrict the transfer of cash or other assets from any Subsidiary of the Parent Borrower to the Parent Borrower, other than (i) prohibitions or restrictions existing under or by reason of this Agreement or the other Credit Documents, (ii) prohibitions or restrictions existing under or by reason of Legal Requirements, and (iii) other prohibitions or restrictions which, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

   6.14   Capitalization.   As of the Effective Date, the authorized capital stock of the Parent Borrower
    consists of (i) 120,000,000 shares, $1.00 par value per share, of which 61,989,152
    ordinary shares are issued and outstanding. As of the Effective Date, all
    such outstanding shares of the Parent Borrower have been duly and validly
    issued and are fully paid and nonassessable. As of the Effective Date, neither
    the Parent Borrower nor any of its Subsidiaries has outstanding any securities
    convertible into or exchangeable for its capital stock or
    outstanding any rights to subscribe for or to purchase, or any options for
    the purchase of, or any agreements providing for the issuance (contingent
    or otherwise) of, or any calls, commitments or claims of any character relating
    to, its capital stock except for options, warrants, grants, restricted share
    units and unpaid premium on shares issued by EWHL and EWIL outstanding in
    the aggregate amounts set forth on Annex IV. 

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   6.15   
    Indebtedness.   The
    Parent Borrower and its Subsidiaries do not have any Indebtedness on the Effective
    Date other than (i) the Obligations, (ii) the Indebtedness listed on Annex
    V, (iii) Indebtedness (on an individual basis) which has an outstanding principal
    balance of less than $5,000,000 and (iv) any Indebtedness incurred pursuant
    to debt securities issued pursuant to the Shelf Registration. 

   6.16   
    Compliance
    with Statutes, etc.   
    The Parent Borrower and each of its Subsidiaries is in compliance with all
    applicable statutes, regulations, rules and orders of, and all applicable
    restrictions imposed by, and has filed or otherwise provided all material
    reports, data, registrations, filings, applications and other information
    required to be filed with or otherwise provided to, all governmental bodies,
    domestic or foreign, in respect of the conduct of its business and the ownership
    of its property (including compliance with all applicable environmental laws),
    except where the failure to comply or file would not reasonably be expected
    to have, either individually or in the aggregate, a Material Adverse Effect.
    All required regulatory approvals are in full force and effect on the date
    hereof, except where the failure of such approvals to be in full force and
    effect would not reasonably be expected to have, either individually or in
    the aggregate, a Material Adverse Effect. 

   6.17   
    Insurance
    Licenses.   There
    is (i) no Insurance License that is the subject of a proceeding for suspension,
    revocation or limitation or any similar proceedings, (ii) no sustainable basis
    for such a suspension, revocation or limitation, and (iii) no such suspension,
    revocation or limitation threatened by any Applicable Insurance Regulatory
    Authority, that, in each instance under (i), (ii) and (iii) above, has had,
    or would reasonably be expected to have, either individually or in the aggregate,
    a Material Adverse Effect. No Regulated Insurance Company transacts any insurance
    business, directly or indirectly, in any jurisdiction where such business
    requires any Insurance License of an Applicable Insurance Regulatory Authority
    or such jurisdiction not validly maintained by such Regulated Insurance Company,
    except to the extent that the failure to so maintain has not had, or would
    not reasonably be expected to have, either individually or in the aggregate,
    a Material Adverse Effect. 

   6.18   
    Security
    Documents.   The
    Security Documents create, as security for the Tranche 1 Obligations of the
    Parent Borrower and each Designated Subsidiary Borrower, valid and enforceable
    security interests in and Liens on all of the Collateral, superior to and
    prior to the rights of all third persons and subject to no other Liens (other
    than Liens permitted pursuant to Section 8.03(a), (k) or (l)). No filings
    or recordings are required in order to ensure the enforceability, perfection
    or priority of the security interests created under the Security Documents,
    except for filings or recordings which shall have been previously made.

   SECTION
    7.   Affirmative Covenants.   Each Borrower
    hereby covenants and agrees (solely as to itself and its Subsidiaries) that
    on and as of the Effective Date and thereafter, for so long as this Agreement
    is in effect and until the Commitments have terminated, no Letters of
    Credit or Notes are outstanding and the Revolving Loans and Unpaid Drawings,
    together with interest, Fees and all other Obligations (other than indemnities
    described in Section 12.12 which are not then owing) incurred hereunder,
    are paid in full: 

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   7.01   
    Information
    Covenants.   The
    Parent Borrower will furnish to each Lender: 

 (a)    Annual Financial Statements.
         As soon as available and in any event within 90 days after the close of
      each fiscal year of the Parent Borrower, the consolidated balance sheet
      of the Parent Borrower and its Subsidiaries as at the end of such fiscal
      year and the related consolidated statements of income, operations, changes
      in stockholders' equity and cash flows of the Parent Borrower and its Subsidiaries
      for such fiscal year, setting forth in comparative form the consolidated
      figures for the previous fiscal year, all in reasonable detail and accompanied
      by a report thereon of Ernst & Young LLP or other independent public
      accountants of recognized national standing selected by the Parent Borrower,
      which report shall state that such consolidated financial statements present
      fairly the consolidated financial position of each of the Parent Borrower
      and its Subsidiaries as at the dates indicated and the consolidated results
      of its operations and cash flows for the periods indicated in conformity
      with GAAP applied on a basis consistent with prior years (except as otherwise
      specified in such report; provided any exceptions or qualifications thereto
      must be acceptable to the Required Lenders) and that the audit by such
      accountants in connection with such consolidated financial statements has
      been made in accordance with generally accepted auditing standards. 

 (b)    Quarterly Financial Statements.
         As soon as available and in any event within 60 days after the close of
      each of the first three quarterly accounting periods in each fiscal year
      of the Parent Borrower, consolidated balance sheets of each of the Parent
      Borrower and its Subsidiaries as at the end of such period and the related
      consolidated statements of income, changes in stockholders’ equity
      and cash flows of the Parent Borrower and its Subsidiaries for such period
      and (in the case of the second and third quarterly periods) for the period
      from the beginning of the current fiscal year to the end of such quarterly
      period, setting forth in each case in comparative form the consolidated
      figures for the corresponding periods of the previous fiscal year, all
      in reasonable detail and certified by the Chief Financial Officer of the
      Parent Borrower as presenting fairly, in accordance with GAAP (except as
      specifically set forth therein; provided any exceptions or qualifications
      thereto must be acceptable to the Required Lenders) on a basis consistent
      with such prior fiscal periods, the information contained therein, subject
      to changes resulting from normal year-end audit adjustments; 

 (c)    Officer’s
        Certificates.   At
        the time of the delivery of the financial statements provided for in
        Sections 7.01(a) and 7.01(b), a certificate of the chief financial officer
        of the Parent Borrower to the effect that no Default or Event of Default
        exists or, if any Default or Event of Default does exist, specifying
        the nature and extent thereof, which certificate shall set forth (i)
        the calculations required to establish whether the Parent Borrower and
        its Subsidiaries were in compliance with the provisions of Sections 8.09,
        8.10 and 8.11, inclusive, as at the end of such fiscal year or quarter,
        as the case may be, and (ii) if delivered with the financial statements
        required by Section 7.01(a), the Consolidated Tangible Net Worth on such
        Financial Statement Delivery Date. 

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 (d)    Notice
        of Default or Litigation.   (x)   Within
        five Business Days after any Borrower becomes aware of the occurrence
        of any Default, Event of Default and/or any event or condition constituting,
        or which would reasonably be expected to have a Material Adverse Effect,
        a certificate of an Authorized Officer of each Borrower setting forth
        the details thereof and the actions which the Borrowers are taking or
        proposes to take with respect thereto and (y) promptly after any Borrower
        knows of the commencement thereof, notice, of any litigation, dispute
        or proceeding involving a claim against the Parent Borrower and/or any
        Subsidiary which claim would reasonably be expected to have a Material
        Adverse Effect. 

 (e)    Other
        Statements and Reports.   Promptly
        upon the mailing thereof to the security holders of the Parent Borrower
        generally, copies of all financial statements, reports and proxy statements
        so mailed. 

 (f)    SEC Filings.   Promptly upon the filing thereof, copies of all registration statements (other than the exhibits thereto and any registration statements on Form S-8 or its equivalent) and annual, quarterly or monthly reports which the Parent Borrower shall have filed with the SEC or any national securities exchange; provided that
      any such registration statements and annual, quarterly or monthly reports
      shall be deemed delivered to the extent same are publicly available via
      the SEC’s “EDGAR” filing system and written notification
      thereof has been delivered to the Administrative Agent. 

 (g)    Insurance Reports and Filings.   (i)   Promptly after the filing thereof, a copy of each Statutory Statement filed by each Regulated Insurance Company. 

 (ii)   Promptly
    following the delivery or receipt, as the case may be, by any Regulated Insurance
    Company or any of their respective Subsidiaries, copies of (a) each material
    examination and/or audit report or other submitted to any Regulated Insurance
    Company by any Applicable Insurance Regulatory Authority, (b) all material
    information which the Lenders may from time to time request with respect
    to the nature or status of any material deficiencies or violations reflected
    in any examination report or other similar report, and (c) each material
    registration, filing, submission, report, order, direction, instruction,
    approval, authorization, license or other notice which any Borrower or any
    Regulated Insurance Company may at any time make with, or receive from, any
  Applicable Insurance Regulatory Authority.

 (iii)   Upon
    the written request of the Administrative Agent, a report by an independent
    actuarial consulting firm of recognized national standing reviewing the adequacy
    of loss and loss adjustment expense reserves as at the end of the last fiscal
    year of each Regulated Insurance Company, determined in accordance with SAP,
    and stating an estimated amount of minimum reserves, it being agreed that
    in each case (x) such independent firm will be provided access to or copies
    of all relevant valuations relating to the insurance business of each such
    Regulated Insurance Company in the possession of or available to the Parent
    Borrower or its Subsidiaries, (y) the Administrative Agent and any Lender
    who may review a report pursuant to this Section 7.01(g)(iii) shall have
    executed a confidentiality agreement with such independent actuarial consulting
    firm and (z) any reasonable costs or expenses associated with furnishing
    such reports (to the extent such reports do not otherwise already exist)
    shall be borne by the Lender or Lenders upon whose behalf the Administrative
  Agent shall make a request therefor.

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 (iv)   Promptly
    following notification thereof from a Governmental Authority, notification
    of the suspension, limitation, termination or non-renewal of, or the taking
  of any other action in respect of, any material Insurance License.

 (h)    Borrowing Base Certificate.    No later than the tenth Business Day of each month, a Borrowing Base Certificate from each Borrower of a Tranche 1 Revolving Loan or on whose account a Tranche 1 Letter of Credit has been issued as of the last day of the immediately preceding month, executed by an Authorized Officer of such Borrower. 

 (i)    Other Information.   With reasonable promptness, such other information or existing documents (financial or otherwise) as the Administrative Agent or any Lender may reasonably request from time to time. 

   7.02   
    Books,
    Records and Inspections.   
    The Borrowers will (i) keep, and will cause each of their respective Subsidiaries
    to keep, proper books of record and account in which full, true and correct
    entries in conformity with GAAP or SAP, as applicable, shall be made of all
    dealings and transactions in relation to its business and activities; and
    (ii) subject to Section 12.14, permit, and will cause each of their respective
    Subsidiaries to permit, representatives of any Lender at such Lender’s
    expense prior to the occurrence and during the continuance of an Event of
    Default and at the Borrowers’ expense after the occurrence of an Event
    of Default to visit and inspect any of their respective properties, to examine
    their respective books and records and to discuss their respective affairs,
    finances and accounts with their respective officers, employees and independent
    public accountants. The Borrowers agree to cooperate and assist in such visits
    and inspections, in each case at such reasonable times and as often as may
    reasonably be desired. 

   7.03   
    Insurance.
       Each Borrower will maintain, and will cause each of its
    Subsidiaries to maintain (either in the name of such Borrower or in such Subsidiary’s
    own name) with financially sound and reputable insurance companies, insurance
    on all their property in at least such amounts and against at least such risks
    as are usually insured against in the same general area by companies of established
    repute engaged in the same or similar businesses. 

   7.04   
    Payment
    of Taxes.   
    Each Borrower will pay and discharge, and will cause each of its Subsidiaries
    to pay and discharge, all taxes, assessments and governmental charges or levies
    imposed upon it or upon its income or profits, or upon any properties belonging
    to it, in each case, on a timely basis prior to the date on which penalties
    attach thereto, and all lawful claims which, if unpaid, might become a Lien
    or charge upon any properties of such Borrower or any of its Subsidiaries;
    provided that, neither any Borrower nor any Subsidiary of any Borrower
    shall be required to pay any such tax, assessment, charge, levy or claim which
    is being contested in good faith and by proper proceedings if it has maintained
    adequate reserves with respect thereto in accordance with GAAP. 

   7.05   
    Maintenance
    of Existence.   Each
    Borrower shall maintain, and shall cause each of its Material Subsidiaries
    to maintain, its existence and carry on its business in substantially the
    same manner and in substantially the same fields as such business is now carried
    on and maintained. Each Borrower will qualify and remain qualified, and cause
    each of its Subsidiaries to qualify and remain qualified, as a foreign corporation
    in each jurisdiction,

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 except these
    jurisdictions in which the failure to receive or retain such qualifications
    would reasonably be expected to have, either individually or in the aggregate,
    a Material Adverse Effect. Notwithstanding anything to the contrary contained
    in this Section 7.05, the Borrowers and their respective Subsidiaries may
    purchase and sell assets to the extent permitted under Section 8.02.

   7.06   
    Compliance
    with Statutes, etc.   The
    Borrowers will, and will cause each Subsidiary to, comply with all applicable
    statutes, regulations and orders of, and all applicable restrictions imposed
    by, all governmental bodies, domestic or foreign, in respect of the conduct
    of its business and the ownership of its property (including applicable statutes,
    regulations, orders and restrictions relating to environmental standards and
    controls) other than those the non-compliance with which would not reasonably
    be expected to have, either individually or in the aggregate, a Material Adverse
    Effect. 

   7.07   
    ERISA.   Promptly
    after the Parent Borrower, any of its Subsidiaries or any of its ERISA Affiliates
    knows or has reason to know that any of the events or conditions specified
    below with respect to any Plan or Multiemployer Plan or Foreign Pension Plan
    have occurred or exist, a certificate of the Chief Financial Officer of the
    Parent Borrower setting forth details respecting such event or condition and
    the action if any, that the Parent Borrower, such Subsidiary or such ERISA
    Affiliate proposes to take with respect thereto (and a copy of any report
    or notice required to be filed with or given to PBGC or an applicable foreign
    governmental agency by the Parent Borrower, such Subsidiary or such ERISA
    Affiliate with respect to such event or condition): 

 (i)   any
    reportable event, as defined in subsections (c)(1), (2), (5) and (6), and
    subsection (d)(2) of Section 4043 of ERISA and the regulations issued thereunder,
    with respect to a Plan;

 (ii)   the
    filing under Section 4041(c) of ERISA of a notice of intent to terminate
    any Plan under a distress termination or the distress termination of any
    Plan;

 (iii)   the
    institution by PBGC of proceedings under Section 4042 of ERISA for the termination
    of, or the appointment of a trustee to administer, any Plan, or the receipt
    by the Parent Borrower, any of its Subsidiaries or any of its ERISA Affiliates
    of a notice from a Multiemployer Plan that such action has been taken by
    PBGC with respect to such Multiemployer Plan;

 (iv)   the
    receipt by the Parent Borrower, any of its Subsidiaries or any of its ERISA
    Affiliates of notice from a Multiemployer Plan that the Parent Borrower,
    any of its Subsidiaries or any of its ERISA Affiliates has incurred withdrawal
    liability under Section 4201 of ERISA in excess of $5,000,000 or that such
    Multiemployer Plan is in reorganization or insolvency pursuant to Section
    4241 or 4245 of ERISA or that it intends to terminate or has terminated under
    Section 4041A of ERISA whereby a deficiency or additional assessment is levied
    or threatened to be levied against a Borrower, any of its Subsidiaries or
    any of its ERISA Affiliates;

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(v)   the
    institution of a proceeding by a fiduciary of any Plan or Multiemployer Plan
    against the Parent Borrower, any of its Subsidiaries or any of its ERISA
    Affiliates to enforce Section 515 or 4219(c)(5) of ERISA, which proceeding
is not dismissed within 30 days; and

(vi)   that
  any material contribution required to be made with respect to a Foreign Pension
  Plan has not been timely made, or that the Parent Borrower or any Subsidiary
  of the Parent Borrower may incur any material liability pursuant to any Foreign
  Pension Plan.

  

  7.08   Maintenance
    of Property.   Each
    Borrower shall, and will cause each of its Subsidiaries to, maintain all of
    their properties and assets in good condition, repair and working order, ordinary
    wear and tear excepted, except where failure to maintain the same would not
    reasonably be expected to have, either individually or in the aggregate, a
    Material Adverse Effect. 

  7.09   Maintenance
    of Licenses and Permits.
    Each Borrower will, and will cause each of its Subsidiaries to, maintain all
    permits, licenses and consents as may be required for the conduct of its business
    by any state, federal or local government agency or instrumentality, except
    where failure to maintain the same would not reasonably be expected to have,
    either individually or in the aggregate, a Material Adverse Effect. 

  7.10   Claims
    Paying Ratings.   Each
    Borrower which is a Regulated Insurance Company or has a Subsidiary which
    is a Regulated Insurance Company shall cause such Regulated Insurance Company
    which has a claims paying rating from A.M. Best Co. (or its successor) to
    maintain at all times a claims-paying rating of at least “B++” from
    A.M. Best & Co. (or its successor). 

  7.11   End
    of Fiscal Years; Fiscal Quarters.   The
    Parent Borrower will cause (i) each of its, and each of its Subsidiaries’,
    fiscal years to end on December 31 of each year and (ii) each of its, and
    each of its Subsidiaries’, fiscal quarters to end on dates which are
    consistent with a fiscal year-end as described above. 

  7.12   Borrowing
    Base Requirement.   Subject
    to Section 4.02(d), each Borrower shall at all times cause its respective
    Borrowing Base to equal or exceed the sum of the aggregate principal amount
    of Tranche 1 Revolving Loans incurred by such Borrower plus the Tranche
    1 Letter of Credit Outstandings attributable to such Borrower at such time.
    

  7.13   Further
    Assurances.   Each
    Borrower shall promptly and duly execute and deliver to the Administrative
    Agent and/or the Collateral Agent such documents and assurances and take such
    further action as the Administrative Agent may from time to time reasonably
    request in order to carry out more effectively the intent and purpose of the
    Security Documents and to establish, protect and perfect the rights and remedies
    created or intended to be created in favor of the Collateral Agent, the Administrative
    Agent or the Lenders pursuant to the Security Documents. 

  SECTION
    8.   Negative
    Covenants.   Each
    Borrower hereby covenants and agrees (solely as to itself and its Subsidiaries)
    that on and as of the Effective Date and thereafter, for so
    long as this
    Agreement is in effect and until the Commitments have terminated, no Letters
    of Credit or Notes are outstanding and the Revolving Loans and Unpaid Drawings
    together with interest, Fees and all other Obligations (other than indemnities
    described in Section 12.12 which are not then owing) incurred hereunder,
    are paid in full:   

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  8.01   Changes
    in Business.   The
    Parent Borrower will not, and will not permit any of its Subsidiaries to,
    engage (directly or indirectly) in any business other than substantially the
    same lines of business in which they are engaged on the Effective Date and
    reasonable extensions thereof and other businesses that are complimentary
    or reasonably related thereto. 

  8.02   Consolidations,
    Amalgamations, Mergers, Sales of Assets and Acquisitions.   (a)   The
    Parent Borrower will not, and will not permit any of its Subsidiaries to,
    consolidate, amalgamate or merge with or into any other Person, provided
    that (i) any Borrower may merge or amalgamate with another Person if (x) such
    Borrower is the corporation surviving such merger or amalgamation (it being
    understood and agreed that in the case of a merger or amalgamation between
    a Designated Subsidiary Borrower and the Parent Borrower the survivor corporation
    of such merger or amalgamation shall be the Parent Borrower) and (y) immediately
    after giving effect to such merger or amalgamation, no Default or Event of
    Default shall have occurred and be continuing, and (ii) Subsidiaries of the
    Parent Borrower may merge with one another (subject, in the case of mergers
    involving Designated Subsidiary Borrowers, to compliance with the preceding
    clause (i)).

(b)   No Borrower will, nor will it permit any of its Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer or dispose of, voluntarily or involuntarily (any of the foregoing being referred to in this Section 8.02(b) as a “Disposition” and any series of related Dispositions constituting but a single Disposition), any of its properties or assets, tangible or intangible (including but not limited to sale, assignment, discount or other disposition of accounts, contract rights, chattel paper or general intangibles with or without recourse), except (i) to the extent that the fair market value of the assets affected by any Disposition or Dispositions (as determined in good faith by the Board of Directors of the Parent Borrower), when added to the fair market value of the assets affected by any such other Disposition or Dispositions previously consummated during the same fiscal year of the Parent Borrowe
r (as determined in good faith by the Board of Directors of the Parent Borrower), does not constitute more than 20% of the consolidated assets of the Parent Borrower and its Subsidiaries as of the last day of the most recently ended fiscal year of the Parent Borrower and (ii) any Subsidiary of the Parent Borrower may make a Disposition of any of its properties or assets to the Parent Borrower, ESI or any Wholly-Owned Subsidiary of the Parent Borrower.

(c)   No Borrower will, nor will it permit any of its Subsidiaries to, acquire all or substantially all of the capital stock or assets of another Person unless at such time and immediately after giving effect thereto no Default or Event of Default exists or would result therefrom.

  8.03   Liens.   Neither
    the Parent Borrower nor any of its Subsidiaries will permit, create, assume,
    incur or suffer to exist any Lien on any asset tangible or intangible now
    owned or hereafter acquired by it, except: 

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(a)   Liens
    created pursuant
to the Credit Documents;

(b)   Liens
    existing on
the Effective Date and listed on Annex VII;

(c)   Liens
not securing Indebtedness which are incurred in the ordinary course of business;

(d)   Liens
    securing repurchase agreements constituting a borrowing of funds by the Parent
    Borrower or any Subsidiary of the Parent Borrower in the ordinary course
    of business for liquidity purposes and in no event for a period exceeding
90 days in each case;

(e)   Liens
    arising pursuant to purchase money mortgages, capital leases or security
    interests securing Indebtedness representing the purchase price (or financing
    of the purchase price within 90 days after the respective purchase) of assets
acquired after the Effective Date;

(f)   Liens
    on any asset of any Person existing at the time such Person is merged, amalgamated
    or consolidated with or into the Parent Borrower or any of its Subsidiaries
and not created in contemplation of such event; 

(g)   Liens
    arising out of the refinancing, extension, renewal or refunding of any Indebtedness
    secured by any Lien permitted by any of the clauses of this Section 8.03, provided that
such Indebtedness is not increased and is not secured by any additional assets;

(h)   Liens
      securing obligations owed by the Parent Borrower to any of its Subsidiaries
      or owed by any Subsidiary of the Parent Borrower to the Parent Borrower
      or any Subsidiary of the Parent Borrower, in each case solely to the extent
      that such Liens are required by an Applicable Insurance Regulatory Authority
for such Person to maintain such obligations;

(i)   Liens
      on investments and cash balances of any Regulated Insurance Company securing
      obligations of such Regulated Insurance Company in respect of trust arrangements
      formed in the ordinary course of business for the benefit of cedents to
      secure reinsurance recoverables owed to them by such Regulated Insurance
Company; 

(j)   Liens
    arising in connection with securities lending arrangements entered into by
    the Parent Borrower or any of its Subsidiaries with financial institutions
in the ordinary course of business;

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

(l)   bankers’ Liens,
      rights of setoff and other similar Liens existing solely with respect to
      cash and Cash Equivalents on deposit in one or more accounts maintained
by the
Parent Borrower or any of its Subsidiaries, in each case, granted in the ordinary
course of business in favor of the bank or banks with which such accounts are
maintained, securing amounts owing to such bank with respect to cash management
and operating account arrangements; provided, however, that with respect to the
Collateral Accounts, any such Liens shall only be permitted to the extent the
Custodian has agreed to subordinate such Liens as provided in the Account Control
Agreement; and 

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(m)   Liens
    not otherwise permitted by the foregoing clauses of this Section 8.03 securing
    Indebtedness in an aggregate principal amount not at any time exceeding 10%
of Consolidated Tangible Net Worth.

  8.04  
    Indebtedness.   (a)   The
    Parent Borrower will not, create, incur, assume or permit to exist any Indebtedness,
    or agree, become or remain liable (contingent or otherwise) to do any of the
    foregoing, except for the Obligations and other Indebtedness which is either
    pari passu in right of payment with, or subordinated in right of payment
    to, the Obligations. 

(b)   The
    Parent Borrower will not permit any of its Subsidiaries to create, incur,
    assume or permit to exist any Indebtedness, or agree, become or remain liable
    (contingent or otherwise) to do any of the foregoing, except for (i) the
    Obligations, (ii) Indebtedness of Subsidiaries of the Parent Borrower owing
    to the Parent Borrower and (iii) Indebtedness of Subsidiaries incurred under
    securities lending arrangements entered into in the ordinary course of business.

  8.05   Issuance
    of Stock.   The
    Parent Borrower will not, and will not permit any of its Subsidiaries to,
    directly or indirectly issue, sell, assign, pledge, charge or otherwise encumber
    or dispose of any shares of its preferred or preference equity securities
    or options to acquire preferred or preference equity securities, except the
    issuance of preferred or preference equity securities, so long as (x) no part
    of such preferred or preference equity securities is mandatorily redeemable
    (whether on a scheduled basis or as a result of the occurrence of any event
    or circumstance) prior to the first anniversary of the Commitment Expiration
    Date and (y) such preferred or preference equity securities do not contain
    any financial performance related covenants or incurrence covenants which
    restrict the operations of the issuer thereof. 

  8.06   Dissolution.   No
    Borrower shall suffer or permit dissolution or liquidation either in whole
    or in part, except through corporate reorganization to the extent permitted
    by Section 8.02. 

  8.07   Restricted
    Payments.   The
    Parent Borrower will not declare or pay any dividends, purchase, redeem, retire,
    defease or otherwise acquire for value any of its Equity Interests now or
    hereafter outstanding, return any capital to its stockholders, partners or
    members (or the equivalent Persons thereof) as such, make any distribution
    of assets, Equity Interests, obligations or securities to its stockholders,
    partners or members (or the equivalent Persons thereof) as such, or permit
    any of its Subsidiaries to purchase, redeem, retire, defease or otherwise
    acquire for value any Equity Interests in the Parent Borrower, if, in any
    case referred to above, a Default or Event of Default shall have occurred
    and be continuing at the time of such action or would result therefrom. 

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  8.08   Transactions
    with Affiliates.   Neither
    the Parent Borrower nor any of its Subsidiaries shall enter into or be a party
    to, a transaction with any Affiliate of the Parent Borrower or such Subsidiary
    (which Affiliate is not the Parent Borrower or a Subsidiary), except transactions
    with Affiliates in good faith in the ordinary course of business consistent
    with past practice and on terms no less favorable to the Parent Borrower or
    such Subsidiary than those that could have been obtained in a comparable transaction
    on an arm’s length basis from an unrelated Person. 

  8.09   Maximum
    Leverage Ratio.   The
    Parent Borrower will not permit the Leverage Ratio at any time to be greater
    than 0.35:1.00. 

  8.10   Minimum
    Consolidated Tangible Net Worth.   The
    Parent Borrower will not permit Consolidated Tangible Net Worth to be less
    than $1,250,000,000 at any time. 

  8.11   Unencumbered
    Liquid Assets.   The
    Parent Borrower will not at any time permit the sum of (i) cash held by the
    Parent Borrower and/or any of its Subsidiaries plus (ii) Cash Equivalents
    held by the Parent Borrower and/or any of its Subsidiaries plus (iii)
    Investment Grade Securities held by the Parent Borrower and/or any of its
    Subsidiaries to be reduced to an aggregate amount of less than the greater
    of (A) $400,000,000 and (B) the sum of, without duplication, (x) the stated
    amount of all outstanding letters of credit issued for the account of the
    Parent Borrower and/or any of its Subsidiaries plus (y) the aggregate
    outstanding principal amount of all Indebtedness for borrowed money of the
    Parent Borrower and its Subsidiaries that is either subject to a Lien and/or
    not subordinated in right of payment to the Obligations. 

   8.12   Private
    Act.   No Borrower will become subject to a Private Act.
    

  SECTION
    9.   Events
    of Default.   Upon
    the occurrence of any of the following specified events (each, an “Event
    of Default”): 

  9.01   Payments.   Any
    Borrower shall (i) default in the payment when due of any principal of any
    Revolving Loan or any Note, (ii) default, and such default shall continue
    for three or more Business Days, in the payment when due of any interest on
    any Revolving Loan or any Note or any Fees or (iii) default in the prompt
    payment following notice or demand in respect of any other amounts owing hereunder
    or under any other Credit Document; or 

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

  9.03   Covenants.   Any
    Borrower shall (a) default in the due performance or observance by it of any
    term, covenant or agreement contained in Section 7.01(d)(x), Section 7.02(ii),
    Section 7.05 (with respect to the first sentence of Section 7.05 only), Section
    7.10 or Section 8, or (b) default in the due performance or observance by
    it of any term, covenant or agreement (other than those referred to in Section
    9.01 or clause (a) of this Section 9.03) contained in this Agreement and such
    default shall continue unremedied for a period of at least 45 days; or 

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  9.04   Default
    Under Other Agreements.   (a)   The
    Parent Borrower or any of its Subsidiaries shall (i) default in any payment
    with respect to Indebtedness (other than the Obligations) in excess of $30,000,000
    individually or in the aggregate, for the Parent Borrower and its Subsidiaries,
    beyond the period of grace, if any, provided in the instrument or agreement
    under which such Indebtedness was created or (ii) default in the observance
    or performance of any agreement or condition relating to any such Indebtedness
    or contained in any instrument or agreement evidencing, securing or relating
    thereto, or any other event shall occur or condition exist, the effect of
    which default or other event or condition is to cause, or to permit the holder
    or holders of such Indebtedness (or a trustee or agent on behalf of such holder
    or holders) to cause (determined without regard to whether any notice of acceleration,
    or any lapse of time prior to the effectiveness of any notice of acceleration,
    is required), any such Indebtedness to become due prior to its stated maturity;
    or (b) Indebtedness of the Parent Borrower or its Subsidiaries in excess of
    $30,000,000 shall be declared to be due and payable other than in accordance
    with the terms of such Indebtedness or required to be prepaid, other than
    by a regularly scheduled required prepayment or as a mandatory prepayment
    (unless such required prepayment or mandatory prepayment results from a default
    thereunder or an event of the type that constitutes an Event of Default),
    prior to the stated maturity thereof; or 

  9.05  
    Bankruptcy,
    etc.   The
    Parent Borrower or any of its Subsidiaries shall commence a voluntary case
    concerning itself under Title 11 of the United States Code entitled “Bankruptcy,”
    as now or hereafter in effect, or any successor thereto (the “Bankruptcy
    Code”); or an involuntary case is commenced against the Parent Borrower
    or any of its Subsidiaries and the petition is not controverted within 10
    days, or is not dismissed within 60 days, after commencement of the case;
    or a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
    charge of, all or substantially all of the property of the Parent Borrower
    or any of its Subsidiaries; or the Parent Borrower or any of its Subsidiaries
    commences (including by way of applying for or consenting to the appointment
    of, or the taking of possession by, a rehabilitator, receiver, custodian,
    trustee, conservator or liquidator (collectively, a “conservator”)
    of itself or all or any substantial portion of its property) any other proceeding
    under any reorganization, arrangement, adjustment of debt, relief of debtors,
    dissolution, insolvency, liquidation, rehabilitation, supervision, conservatorship
    or similar law of any jurisdiction or the Bermuda Companies Law whether now
    or hereafter in effect relating to the Parent Borrower or any of its Subsidiaries;
    or any such proceeding is commenced against (a) any Regulated Insurance Company
    which is engaged in the business of underwriting insurance and/or reinsurance
    in the United States, or (b) the Parent Borrower or any of its Subsidiaries
    (other than (x) any Regulated Insurance Company described in the immediately
    preceding clause (a)) to the extent such proceeding is consented to by such
    Person, and in the case of either clause (a) or (b) remains undismissed for
    a period of 60 days; or the Parent Borrower or any of its Subsidiaries is
    adjudicated insolvent or bankrupt; or any order of relief or other order approving
    any such case or proceeding is entered; or (a) any Regulated Insurance Company
    which is engaged in the business of underwriting insurance and/or reinsurance
    in the United States suffers any appointment of any conservator or the like
    for it or any substantial part of its property, or (b) the Parent Borrower
    or any of its Subsidiaries (other than any Regulated Insurance Company described
    in the immediately preceding clause (a)) suffers any appointment of any conservator
    or the like for it or any substantial part of its property which continues
    undischarged or unstayed for a period of 60 days; or the Parent Borrower or
    any of its Subsidiaries makes a general assignment
    for the benefit of creditors; or any corporate action is taken by the Parent
    Borrower or any of its Subsidiaries for the purpose of effecting any of the
    foregoing; or 

 

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  9.06   
    ERISA.   (a)   An
    event or condition specified in Section 7.07 shall occur or exist with respect
    to any Plan or Multiemployer Plan or Foreign Pension Plan, (b) a Borrower,
    any of its Subsidiaries or any of its ERISA Affiliates shall fail to pay when
    due any material amount which they shall have become liable to pay to the
    PBGC or to a Plan or a Multiemployer Plan under Title IV of ERISA, or (c)
    a condition shall exist by reason of which the PBGC would be entitled to obtain
    a decree adjudicating that any Plan must be terminated, and, in any of the
    foregoing cases, as a result of such event or condition, together with all
    such other events or conditions, the Parent Borrower, any of its Subsidiaries
    or any of its ERISA Affiliates shall be reasonably likely in the opinion of
    the general counsel of such Borrower to (i) in the case of the foregoing clauses
    (a) and (b) of this Section 9.06, incur a liability to a Plan, a Multiemployer
    Plan, a Foreign Pension Plan or PBGC (or any combination of the foregoing)
    or (ii) in the case of the foregoing clause (c) of this Section 9.06, incur
    a liability to a Plan, Multiemployer Plan, a Foreign Pension Plan or PBGC
    (or any combination of the foregoing) in excess of $30,000,000; or 

  9.07   Judgments.   One
    or more judgments or decrees shall be entered against the Parent Borrower
    or any of its Subsidiaries involving a liability, net of undisputed reinsurance,
    of $30,000,000 or more in the case of any one such judgment or decree or in
    the aggregate for all such judgments and decrees for the Parent Borrower and
    its Subsidiaries and any such judgments or decrees shall not have been vacated,
    discharged, satisfied, stayed or bonded pending appeal within 60 days from
    the entry thereof; or 

  9.08   
    Insurance
    Licenses.   Any
    one or more Insurance Licenses of the Parent Borrower or any of its Subsidiaries
    shall be suspended, limited or terminated or shall not be renewed, or any
    other action shall be taken by any Governmental Authority, and such suspension,
    limitation, termination, nonrenewal or other action would reasonably be expected
    to have, either individually or in the aggregate, a Material Adverse Effect;
    or 

  9.09   Parent
    Borrower Guaranty.   The
    Parent Borrower Guaranty shall terminate or cease, in whole or part, to be
    a legally valid and binding obligation of the Parent Borrower, or the Parent
    Borrower, or any Person acting for or on behalf of the Parent Borrower, shall
    contest such validity or binding nature of the Parent Borrower Guaranty, or
    any other Person shall assert any of the foregoing; or 

  9.10   Security
    Documents.   Any
    Security Document shall cease to be in full force and effect, or shall cease
    to give the Collateral Agent the Liens, rights, powers and privileges purported
    to be created thereby (including, without limitation, a first priority security
    interest in, and Lien on, all of the Collateral subject thereto, in favor
    of the Collateral Agent, superior to and prior to the rights of all third
    Persons and subject to no other Liens); or any Borrower party to any Security
    Documents or any other pledgor thereunder shall default in the due performance
    or observance of any term, covenant or agreement on its part to be performed
    or observed pursuant to any Security Document; or

   9.11   
    Ownership.   A
    Change of Control shall occur;

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then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written request
of the Required Lenders, by written notice to the Parent Borrower, take any or
all of the following actions, without prejudice to the rights of the Administrative
Agent or any Lender to enforce its claims against any Borrower, except as otherwise
specifically provided for in this Agreement (provided that if an Event
of Default specified in Section 9.05 shall occur with respect to any Borrower,
the result which would occur upon the giving of written notice by the Administrative
Agent as specified in clauses (i) and (ii) below shall occur automatically without
the giving of any such notice): (i) declare the Total Commitment terminated,
whereupon the Commitment of each Lender shall forthwith terminate immediately
and any Facility Fees and Utilization Fees shall forthwith become due and payable
without any other notice of any kind, (ii) declare the principal of, and any
accrued interest in respect of, all Revolving Loans and all Obligations owing
hereunder and under the other Credit Documents to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Borrower, (iii) terminate
any Letter of Credit or give a Notice of NonExtension in respect thereof if permitted
in accordance with its terms, (iv) direct the applicable Borrower to pay (and
the applicable Borrower hereby agrees upon receipt of such notice, or upon the
occurrence of any Event of Default specified in Section 9.05, to pay) to the
Administrative Agent at the Payment Office an amount of cash to be held as security
for the respective Borrower’s reimbursement obligations in respect of all
Letters of Credit then outstanding which were issued for the account of such
Borrower, equal to the aggregate Stated Amount of all such Letters of Credit
at such time, and/or (v) direct the Collateral Agent to enforce any or all of
the Liens and security interests created pursuant to the Security Documents and/or
exercise any of the rights and remedies provided therein. Notwithstanding the
foregoing, the Administrative Agent shall have available to it all other remedies
at law or equity, and shall exercise any one or all of them at the request of
the Required Lenders.

  SECTION
    10.   Definitions.   As
    used herein, the following terms shall have the meanings herein specified
    unless the context otherwise requires. Defined terms in this Agreement shall
    include in the singular number the plural and in the plural the singular:
    

“Account Control Agreement” means
    an account control agreement, dated as of the date of this Agreement, among
    JPMorgan Chase Bank, as custodian, the Grantors (as defined in the Security
    Agreement) from time to time party thereto and the Collateral Agent, as amended,
    modified and supplemented and as in effect from time to time.

“Additional Tranche 1 Commitment” shall
    mean, for each Additional Tranche 1 Lender, any commitment provided by such
    Additional Tranche 1 Lender pursuant to Section 1.15, in such amount as agreed
    to by such Additional Tranche 1 Lender in the respective Additional Tranche
    1 Commitment Agreement; provided that on the Additional Tranche 1 Commitment Date upon which an Additional Tranche 1 Commitment of any Additional Tranche 1 Lender becomes effective, such Additional Tranche 1 Commitment of such Additional Tranche 1 Lender shall (x) in the case of an existing Tranche 1 Lender be added to (and thereafter become a part of) the existing Tranche 1 Commitment of such existing Tranche 1 Lender for all purposes of this Agreement as contemplated by Section 1.15 and (y) in the case of a new Tranche 1 Lender, be converted to a Tranche 1 Commitment and become a Tranche 1 Commitment for all purposes of this Agreement as contemplated by Section 1.15. 

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“Additional Tranche 2 Commitment” shall
    mean, for each Additional Tranche 2 Lender, any commitment provided by such
    Additional Tranche 2 Lender pursuant to Section 1.16, in such amount as agreed
    to by such Additional Tranche 2 Lender in the respective Additional Tranche
    2 Commitment Agreement; provided that on the Additional Tranche 2 Commitment Date upon which an Additional Tranche 2 Commitment of any Additional Tranche 2 Lender becomes effective, such Additional Tranche 2 Commitment of such Additional Tranche 2 Lender shall (x) in the case of an existing Tranche 2 Lender be added to (and thereafter become a part of) the existing Tranche 2 Commitment of such existing Tranche 2 Lender for all purposes of this Agreement as contemplated by Section 1.16 and (y) in the case of a new Tranche 2 Lender, be converted to a Tranche 2 Commitment and become a Tranche 2 Commitment for all purposes of this Agreement as contemplated by Section 1.16. 

“Additional Tranche 3 Commitment” shall
    mean, for each Additional Tranche 3 Lender, any commitment provided by such
    Additional Tranche 3 Lender pursuant to Section 1.17, in such amount as agreed
    to by such Additional Tranche 3 Lender in the respective Additional Tranche
    3 Commitment Agreement; provided that on the Additional Tranche 3 Commitment Date upon which an Additional Tranche 3 Commitment of any Additional Tranche 3 Lender becomes effective, such Additional Tranche 3 Commitment of such Additional Tranche 3 Lender shall (x) in the case of an existing Tranche 3 Lender be added to (and thereafter become a part of) the existing Tranche 3 Commitment of such existing Tranche 3 Lender for all purposes of this Agreement as contemplated by Section 1.17 and (y) in the case of a new Tranche 3 Lender, be converted to a Tranche 3 Commitment and become a Tranche 3 Commitment for all purposes of this Agreement as contemplated by Section 1.17. 

“Additional Tranche 1 Commitment Agreement” shall
    mean an Additional Tranche 1 Commitment Agreement substantially in the form
    of Exhibit J-1 (appropriately completed).

“Additional Tranche 2 Commitment Agreement” shall
    mean an Additional Tranche 2 Commitment Agreement substantially in the form
    of Exhibit J-2 (appropriately completed).

“Additional Tranche 3 Commitment Agreement” shall
    mean an Additional Tranche 3 Commitment Agreement substantially in the form
    of Exhibit J-3 (appropriately completed).

“Additional Tranche 1 Commitment Date” shall
    mean each date upon which an Additional Tranche 1 Commitment under an Additional
    Tranche 1 Commitment Agreement becomes effective as provided in Section 1.15.

“Additional Tranche 2 Commitment Date” shall
    mean each date upon which an Additional Tranche 2 Commitment under an Additional
    Tranche 1 Commitment Agreement becomes effective as provided in Section 1.16.

“Additional Tranche 3 Commitment Date” shall
    mean each date upon which an Additional Tranche 3 Commitment under an Additional
    Tranche 3 Commitment Agreement becomes effective as provided in Section 1.17.

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“Additional Tranche 1 Lender” shall
    have the meaning provided in Section 1.15(b).

“Additional Tranche 2 Lender” shall
    have the meaning provided in Section 1.16(b).

“Additional Tranche 3 Lender” shall
    have the meaning provided in Section 1.17(b).

“Administrative Agent” shall
    have the meaning provided in the first paragraph of this Agreement and shall
    include any successor to the Administrative Agent appointed pursuant to Section
    11.09.

“Advance Rate” shall mean, for any category of Cash or obligation or investment specified below in the column entitled “Cash and Eligible Securities” (other
    than cash, the “Eligible
    Securities”), the percentage set forth opposite such category of cash or Eligible Securities below in the column entitled “Advance Rate” and,
    in each case, subject to the original term to maturity criteria set forth
    therein: 

	Cash
    and Eligible Securities: 	 	 Advance
    Rate: 
	 Cash: 

      

    U.S.
    Dollars.     	 	100%
	 Time
    Deposits, CDs and Money Market Deposits: 

    

    Time
    deposits, certificates of deposit and money market deposits of any commercial
    bank incorporated in the United States with a rating of at least (i) AA-
    from S&P and (ii) Aa3 from Moody’s and maturing within two years
    from the date of acquisition.     	 	90% 
	 U.S.
            Government Securities:  

      

      Securities
      issued or directly and fully guaranteed or insured by the United States
      or any agency or instrumentality thereof (provided that the full faith
    and credit of the United States is pledged in support thereof).  	 	 With
          maturities from the date of acquisition of (x) two years or less, 95%,
          (y) more than two years and less than 10 years, 90% and (z) more than
    10 years, 85%.  

	 Agency
    Securities:  

    

    (i) Single-class
    mortgage participation certificates in book-entry form backed by single-family
    residential mortgage loans, the full and timely payment of interest at the
    applicable certificate rate and the ultimate collection of principal of which
    are guaranteed by the Federal Home Loan Mortgage Corporation (excluding REMIC
    or other multi-class pass-through certificates, collateralized mortgage obligations,
    pass-through certificates backed by adjustable rate mortgages, securities
    paying interest or principal only and similar derivative securities); (ii)
    single-class mortgage pass-through certificates in book-entry form backed
    by single-family residential mortgage loans, the full and timely payment
    of interest at the applicable certificate rate and ultimate collection of
    principal of which are guaranteed by the Federal National Mortgage Association
    (excluding REMIC or other multi-class pass-through certificates, pass-through
    certificates backed by adjustable rate mortgages, collateralized mortgage
    obligations, securities paying interest or principal only and similar derivative
    securities); 	 	

          

With maturities from the date of acquisition of (x) two years or less, 95%, (y)
more than two years and less than 10 years, 90% and (z) more than 10 years, 85%. 

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	and
            (iii) single-class fully modified pass-through certificates in book-entry
            form backed by single-family residential mortgage loans, the full and
            timely payment of principal and interest of which is guaranteed by the
            Government National Mortgage Association (excluding REMIC or other multi-class
            pass-through certificates, collateralized mortgage obligations, pass-through
            certificates backed by adjustable rate mortgages, securities paying interest
    or principal only and similar derivatives securities).
	 	 
	Investment
    Grade Municipal Bonds Level I:

    

    Municipal
      bonds rated at least (i) AAA from S&P and (ii) Aaa from Moody’s
    and maturing within five years from the date of acquisition. 	 	90%
	Investment
      Grade Municipal Bonds Level II:

      

    Municipal
        bonds rated at least (i) BBB from S&P and (ii) Baa2 from Moody’s
        and maturing within five years from the date of acquisition, but no higher
    than (x) AA+ from S&P and (y) Aa1 from Moody’s.	 	85%
	Investment
      Grade Nonconvertible Corporate Bonds Level I:

      

      Nonconvertible
        corporate bonds that are publicly traded on a nationally recognized exchange,
        eligible to be settled by the Depository Trust Company (“DTC”)
    and rated at least (i) AA- from S&P and (ii) Aa3 from Moody’s. 	 	With maturities
          from the date of acquisition of (x) two years or less, 90% and (y) more
    than two years and less than 10 years, 85%.

	Investment
      Grade Nonconvertible Corporate Bonds Level II:

      

    Nonconvertible
        corporate bonds that are publicly traded on a nationally recognized exchange,
        eligible to be settled by DTC and rated at least (i) BBB from S&P and
        (ii) Baa2 from Moody’s, but no higher than (x) A+ from S&P and (y)
    A1 from Moody’s.  	 	80%
	Commercial
      Paper:

      

    Commercial
        paper issued by any entity organized in the United States rated at least
        (i) A-1 or the equivalent thereof by S&P and (ii) P-1 or the equivalent
        thereof by Moody’s and maturing not more than one year after the
    date of acquisition.	 	90%
	Asset-Backed
      Securities:

      

    Asset-backed
        securities rated at least (i) AAA by S&P and (ii) Aaa by Moody’s, provided that
        (x) such securities are backed by credit card receivables or automobile loans
        and have a remaining maturity of 10 years or less and (y) asset-backed securities
        will not constitute Eligible Securities if they are certificated securities
        that cannot be paid or delivered by book entry (and all asset-backed securities
        issued by an issuer incorporated in the United States of America must be
    capable of settlement through DTC). 	 	80%
	All other
    securities	 	 0%

  Notwithstanding the foregoing, (A) Eligible Securities shall be limited to securities primarily cleared and settled within the United States, (B) the value of Eligible Securities at any time shall be determined based on the Borrowing Base Report (as defined in the Security Agreement) then most recently prepared by the Collateral Agent, (C) if at any time the securities of any single corporate or municipal issuer (or any Affiliate thereof) represent more than 10% of the aggregate
      value of all Cash and Eligible Securities of all Borrowing Bases, the value
      in excess of 10% shall be excluded from said Borrowing Bases (with such
      exclusion being allocated on the basis of the respective securities of
      such single corporate or municipal issuer (or Affiliate thereof) held in
      the respective Borrowing Bases) and (D) if at any time asset-backed securities
      of any single issuer represent more than $10,000,000 of the aggregate value
      of all Cash and Eligible Securities of all Borrowing Bases, the value in
      excess of $10,000,000 shall be excluded from said Borrowing Bases (with
      such exclusion being allocated on the basis of the respective asset-backed
  securities held in the respective Borrowing Bases).

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“Affected Loan” shall
have the meaning provided in Section 4.02(g).

  “Affiliate” shall
    mean, with respect to any Person, any other Person directly or indirectly
    controlling, controlled by, or under direct or indirect common control with,
  such Person, provided, that a Person shall not be deemed to be an Affiliate solely as a result of a title or position held by such Person.  A Person shall be deemed to control a corporation if such Person possesses, directly or indirectly, the power (i) to vote 10% or more of the actual voting power for the election of directors of such corporation or (ii) to direct or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise. 

“Agents” shall
mean, collectively, the Administrative Agent and the Collateral Agent. 

  “Agreement” shall
          mean this Credit Agreement, as the same may be from time to time modified,
  amended and/or supplemented.

“Applicable Insurance Regulatory Authority” shall
      mean, when used with respect to any Regulated Insurance Company, the insurance
      department or similar administrative authority or agency located in (x)
    each state in which such Regulated Insurance Company is domiciled or (y)
    to the
      extent asserting regulatory jurisdiction over such Regulated Insurance
    Company, the insurance department, authority or agency in each state in which
    such
      Regulated Insurance Company is licensed, and shall include any Federal
    insurance regulatory department, authority or agency that may be created
    and that asserts
regulatory jurisdiction over such Regulated Insurance Company. 

  “Applicable Margin” shall
  mean, for any day:

(a)   with respect to interest on any Tranche 1 Revolving Loan, Tranche 1 Facility Fee, Tranche 1 Utilization Fee or Tranche 1 Letter of Credit Fee, for any Margin Adjustment Period, from and after any Start Date to and including the corresponding End Date, the respective percentage per annum set forth below opposite the respective Level (i.e.,
      Level 1, Level 2 or Level 3, as the case may be) indicated to have been
    achieved on the applicable Test Date for such Start Date (as shown in the
    respective
officer’s certificate delivered pursuant to Section 7.01(c)): 

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      Leverage

    Ratio	Level
          1:

          

          less
          than or

      equal to

    0.20:1.00	Level
          2:

          

          greater
          than

      0.20:1.00 and less

      than or equal to

      0.25:1.00	Level
          3:

          

          greater
          than

      0.25:1.00
	Applicable
    Margin

    for Eurodollar Loans	0.20%	0.25%	0.30%
	Applicable
    Margin

    for Base Rate Loans	0.00%	0.00%	0.00%
	Applicable
    Margin

    or Facility Fee	0.10%	0.10%	0.10%
	Applicable
    Margin

    for Utilization Fee	0.125%	0.125%	0.125%

  (b)   with
      respect to interest on any Tranche 2 Revolving Loan or Tranche 3 Revolving
      Loan, Tranche 2 Facility Fee or Tranche 3 Facility Fee, Tranche 2 Utilization
      Fee or Tranche 3 Utilization Fee or Tranche 2 Letter of Credit Fee, for
    any Margin Adjustment Period, from and after any Start Date to and including
      the corresponding End Date, the respective percentage per annum set forth
      below opposite the respective Level (i.e., Level 1, Level 2 or Level 3,
    as
      the case may be) indicated to have been achieved on the applicable Test
    Date for such Start Date (as shown in the respective officer’s certificate
  delivered pursuant to Section 7.01(c)):

	

         

      Leverage

    Ratio	Level
    1:

    

    less than or

    equal to

    0.20:1.00	Level
    2:

    

    greater than

    0.20:1.00 and less

    than or equal to

    0.25:1.00	Level
    3:

    

    greater than

    0.25:1.00
	Applicable
    Margin

    for Eurodollar Loans	0.40%	0.50%	0.70%
	Applicable
    Margin

    for Base Rate Loans	0.00%	0.00%	0.00%
	Applicable
    Margin

    for Facility Fee	0.10%	0.125%	0.175%
	Applicable
    Margin

    for Utilization Fee	0.125%	0.125%	0.25%

  Notwithstanding
      the foregoing, (i) if the Parent Borrower fails to deliver the financial
      statements required to be delivered pursuant to Section 7.01(a) or (b)
    (accompanied by the officer’s certificate required to be delivered pursuant to Section 7.01(c) showing the applicable Leverage Ratio on the relevant Test Date) on or prior to the respective date required by such Sections, then Level 3 pricing shall apply until such time, if any, as the financial statements required as set forth above and the accompanying officer’s certificate have been delivered showing the pricing for the respective Margin Adjustment Period is at a level below Level 3 (it being understood that, in the case of any late delivery of the financial statements and officer’s certificate as so required, any reduction in the Applicable Margin shall apply only from and after the date of the delivery of the complying financial statements and officer’s
      certificate); (ii) except when clause (iii) below is applicable Level 1
    pricing shall apply for the period from
    the Effective Date to the date of the delivery of the Parent Borrower’s
    consolidated financial statements (and related officer’s certificate)
    in respect of its fiscal year ending June 30, 2004; and (iii) Level 3 pricing
    shall apply at all times when any Event of Default is in existence.

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“Assignment Agreement” shall
mean an assignment agreement in the form of Exhibit G (appropriately completed).

  “Authorized Officer” shall
    mean any senior officer of a Borrower designated as such in writing by such
  Borrower to, and found acceptable by, the Administrative Agent.

“Bankruptcy Code” shall
have the meaning provided in Section 9.05. 

  “Base Rate” at
      any time shall mean the higher of (x) the rate which is 1/2 of 1% in excess
      of the Federal Funds Effective Rate and (y) the Prime Lending Rate as in
effect from time to time.

“Base Rate Loans” shall
      mean each Revolving Loan bearing interest at the rates provided in Section
1.08(a). 

  “Bermuda Companies Law” shall
  mean the Companies Act 1981 of Bermuda and other relevant Bermuda law.

“Borrower” or “Borrowers” shall mean the Parent Borrower, the Initial Designated Subsidiary Borrowers and each Person which is designated as a Designated Subsidiary Borrower after the Effective Date in accordance with Section 1.14. For the purposes of Sections 5, 6, 7, 8 and 9 (including the defined terms used therein) any reference to “Borrower” or “Borrowers” shall
      also mean, and include, the Parent Borrower in its capacity as guarantor
under Section 13.

  “Borrowing” shall
      mean the incurrence of one Type of Revolving Loan of a single Tranche hereunder
      by the Parent Borrower from all of the Lenders of the respective Tranche
  on a pro rata basis on a given date (or resulting from a conversion or conversions on such date), having in the case of Eurodollar Loans the same Interest Period, provided that Base Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of any related Borrowing of Eurodollar Loans. 

“Borrowing Base” shall
      mean, at any time, and in respect of each Borrower, the aggregate amount
      of Cash and Eligible Securities held in the Collateral Accounts applicable
      to such Borrower under the Security Agreement at such time multiplied in
each case by the respective Advance Rates for Cash and such Eligible Securities; provided that (a) all Cash and Eligible Securities in respect of any Borrowing Base shall only be included in such Borrowing Base to the extent same are subject to a first priority perfected security interest in favor of the Collateral Agent pursuant to the Security Documents and (b) Eligible Securities which are subject to a securities lending arrangement shall not be included in a Borrowing Base. 

  “Borrowing Base Certificate” shall
    mean a Borrowing Base Certificate substantially in the form of Exhibit K
  hereto.

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“Business Day” shall
      mean (i) for all purposes other than as covered by clause (ii) below, any
      day, excluding Saturday, Sunday and any day which shall be in the City
    of New York a legal holiday or a day on which banking institutions are authorized
      by law or other governmental actions to close, and (ii) with respect to
    all
      notices and determinations in connection with, and payments of principal
      and interest on, Eurodollar Loans, any day which is a Business Day described
      in clause (i) and which is also a day for trading by and between banks
in U.S. dollar deposits in the interbank Eurodollar market. 

  “Cash Equivalents” shall
      mean, as to any Person, (i) securities issued or directly and fully guaranteed
      or insured by the United States or any agency or instrumentality thereof (provided that
      the full faith and credit of the United States is pledged in support thereof)
      having maturities of not more than one year from the date of acquisition,
      (ii) time deposits and certificates of deposit of any commercial bank having,
      or which is the principal banking subsidiary of a bank holding company
      organized under the laws of the United States, any State thereof, the District
      of Columbia
      or any foreign jurisdiction having capital, surplus and undivided profits
      aggregating in excess of $200,000,000, with maturities of not more than
      one year from the date of acquisition by such Person, (iii) repurchase
      obligations
      with a term of not more than 90 days for underlying securities of the types
      described in clause (i) above entered into with any bank meeting the qualifications
      specified in clause (ii) above, (iv) commercial paper issued by any Person
      incorporated in the United States rated at least A-1 or the equivalent
      thereof by S&P or at least P1 or the equivalent thereof by Moody’s
      and in each case maturing not more than one year after the date of acquisition
      by
      such Person, (v) investments in money market funds substantially all of
      whose assets are comprised of securities of the types described in clauses
      (i)
  through (iv) above. 

“Change of Control” shall mean the occurrence of any of the following events or conditions: (a) any Person or group of Persons (as used in Sections 13 and 14 of the Securities Exchange Act of 1934, and the rules and regulations thereunder), other than one or more Initial Lead Investors and their respective affiliates, shall have become the beneficial owner (as defined in rules promulgated by the SEC) of more than 35% of the voting securities of the Parent Borrower; or (b) a majority of the members of the Parent Borrower’s
    board of directors are persons who are then serving on the board of directors
    without having been elected by the board of directors or having been nominated
for election by its shareholders. 

  “Claims” shall
  have the meaning provided in Section 12.01.

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

  “Collateral” shall
  have the meaning provided in the Security Agreement.

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

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

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 “Commitment” shall
    mean, collectively, the Tranche 1 Commitments, the Tranche 2 Commitments
    and the Tranche 3 Commitments.

“Commitment Expiration Date” shall
mean August 6, 2007.

 “Consolidated
    Indebtedness” shall mean, as of any date of determination, (i) all Indebtedness
    for borrowed money of the Parent Borrower and its Subsidiaries at such time
    determined on a consolidated basis in accordance with GAAP plus (ii)
    any Indebtedness for borrowed money of any other Person as to which the Parent
    Borrower and/or any of its Subsidiaries has created a guarantee or other
    Contingent Obligation (but only to the extent of such guarantee or other
    Contingent Obligation). For the avoidance of doubt, “Consolidated Indebtedness” shall
    not include any contingent obligations of any Person under or in connection
    with letters of credit or similar facilities so long as no drawings or payments
    have been made in respect thereof.

 “Consolidated
    Net Worth” shall mean, as of any date of determination, the Net Worth
    of the Parent Borrower and its Subsidiaries determined on a consolidated
    basis in accordance with GAAP after appropriate deduction for any minority
    interests in Subsidiaries.

 “Consolidated
    Tangible Net Worth” shall mean, as of the date of any determination,
    Consolidated Net Worth of the Parent Borrower and its Subsidiaries on such
    date less the amount of all intangible items included therein, including,
    without limitation, goodwill, franchises, licenses, patents, trademarks,
    trade names, copyrights, service marks, brand names and write-ups of assets.

 “Consolidated
    Total Capital” shall mean, as of any date of determination, the sum
    of (i) Consolidated Indebtedness and (ii) Consolidated Net Worth at such
    time.

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

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 “Credit
    Documents” shall mean this Agreement, the Notes, each Assignment Agreement,
    each DSB Assumption Agreement, each Security Document and all other documents,
    instruments and agreements entered into in connection herewith or therewith.

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

 “Defaulting
    Lender” shall mean any Lender with respect to which a Lender Default
    is in effect.

 “Designated
    Subsidiary Borrower” shall mean (a) ESI, (b) EUHC, (c) EWHL, (d) EWIL
    and (e) each Person which is designated as an additional Designated Subsidiary
    Borrower after the Effective Date in accordance with Section 1.14.

“Dispositions” shall
have the meaning provided in Section 8.02(b).

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

 “DSB
    Assumption Agreement” shall mean an assumption agreement in the form
    of Exhibit H.

“Effective Date” shall
have the meaning provided in Section 5.01.

 “Eligible
    Securities” shall have the meaning provided in the definition of the
    term Advance Rates.

 “End
    Date” shall mean, with respect to any Margin Adjustment Period, the
    last day of such Margin Adjustment Period.

 “Equity
    Interests” shall mean, with respect to any Person, shares of capital
    stock of (or other ownership or profit interests in) such Person, warrants,
    options or other rights for the purchase or other acquisition from such Person
    of shares of capital stock of (or other ownership or profit interests in)
    such Person, securities convertible into or exchangeable for shares of capital
    stock of (or other ownership or profit interests in) such Person or warrants,
    rights or options for the purchase or other acquisition from such Person
    of such shares (or such other interests), and other ownership or profit interests
    in such Person (including, without limitation, partnership, member or trust
    interests therein), whether voting or nonvoting, and whether or not such
    shares, warrants, options, rights or other interests are authorized or otherwise
    existing on any date of determination.

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

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 “ERISA
    Affiliate” shall mean any corporation or trade or business which is
    a member of the same controlled group of corporations (within the meaning
    of Section 414(b) of the Code) as the Parent Borrower or any of its Subsidiaries
    or is under common control (within the meaning of Section 414(c) of the Code)
    with the Parent Borrower or any of its Subsidiaries.

 “ESI” shall
    mean Endurance Specialty Insurance Ltd., a company organized under the laws
    of Bermuda.

 “EUHC” shall
    mean Endurance U.S. Holdings Corp., a corporation organized under the laws
    of Delaware.

 “Eurodollar
    Loans” shall mean each Revolving Loan bearing interest at the rates
    provided in Section 1.08(b).

 “Eurodollar
    Rate” shall mean, with respect to each Interest Period for a Eurodollar
    Loan, (i) the rate per annum that appears on page 3750 of the Dow Jones Telerate
    Screen (or any successor page) for Dollar deposits with maturities comparable
    to such Interest Period as of 11:00 A.M. (London time) on the date which
    is two Business Days prior to the commencement of such Interest Period or,
    if such a rate does not appear on page 3750 of the Dow Jones Telerate Screen
    (or any successor page), the offered quotations to first-class banks in the
    London interbank market by JPMorgan Chase Bank for Dollar deposits of amounts
    in same day funds comparable to the outstanding principal amount of such
    Dollar denominated Revolving Loan with maturities comparable to such Interest
    Period determined as of 11:00 A.M. (London time) on the date which is two
    Business Days prior to the commencement of such Interest Period divided (and
    rounded upward to the next whole multiple of 1/16 of 1%) by (ii) a percentage
    equal to 100% minus the then stated maximum rate of all reserve requirements
    (including, without limitation, any marginal, emergency, supplemental, special
    or other reserves) applicable to any member bank of the Federal Reserve System
    in respect of Eurocurrency liabilities as defined in Regulation D (or any
    successor category of liabilities under Regulation D).

“Event of Default” shall
have the meaning provided in Section 9.

 “EWHL” shall
    mean Endurance Worldwide Holdings Limited, a company organized under the
    laws of England.

 “EWIL” shall
    mean Endurance Worldwide Insurance Limited, a company organized under the
    laws of England.

 “Existing
    Credit Agreement” shall mean the Amended and Restated Credit Agreement
    dated as of August 13, 2002, and amended and restated as of August 8, 2003,
    among Endurance Specialty Holdings Ltd., various designated subsidiary borrowers,
    various lending institutions and JPMorgan Chase Bank, as administrative agent.

 “Existing
    Lender Agreement” shall mean an Existing Lender Agreement substantially
    in the form of Exhibit M (appropriately completed).

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 “Existing
    Letters of Credit” shall mean, collectively, Existing Tranche 1 Letters
    of Credit and Existing Tranche 2 Letters of Credit.

 “Existing
    Tranche 1 Letter of Credit” shall have the meaning provided in Section
    2A.08(a).

 “Existing
    Tranche 2 Letter of Credit” shall have the meaning provided in Section
    2B.08(a).

“Expiration Date” shall
mean August 6, 2004.

 “Facility
    Fees” shall mean, collectively, the Tranche 1 Facility Fee, the Tranche
    2 Facility Fee and the Tranche 3 Facility Fee.

 “Federal
    Funds Effective Rate” shall mean for any period, a fluctuating interest
    rate equal for each day during such period to the weighted average of the
    rates on overnight Federal Funds transactions with members of the Federal
    Reserve System arranged by Federal Funds brokers, as published for such day
    (or, if such day is not a Business Day, for the next preceding Business Day)
    by the Federal Reserve Bank of New York, or, if such rate is not so published
    for any day which is a Business Day, the average of the quotations for such
    day on such transactions received by the Administrative Agent from three
    Federal Funds brokers of recognized standing selected in good faith by the
    Administrative Agent.

“Fees” shall mean all amounts payable pursuant to, or referred to in,
Section 3.01.

 “Final
    Maturity Date” shall mean the date when the Commitment Expiration Date
    has occurred, all Letters of Credit have expired or terminated and all amounts
    owing hereunder have been paid in full.

 “Financial
    Statement Delivery Date” shall mean each date upon which the respective
    officer’s certificate is delivered pursuant to Section 7.01(c) (together
    with the related financial statements pursuant to Section 7.01(a)).

 “Foreign
    Pension Plan” shall mean any plan, fund (including, without limitation,
    any superannuation fund) or other similar program established or maintained
    outside the United States of America by the Parent Borrower or any one or
    more of its Subsidiaries primarily for the benefit of employees of the Parent
    Borrower or such Subsidiaries residing outside the United States of America,
    which plan, fund or other similar program provides, or results in, retirement
    income, a deferral of income in contemplation of retirement or payments to
    be made upon termination of employment, and which plan is not subject to
    ERISA or the Code.

 “GAAP” shall
    mean generally accepted accounting principles in the United States of America;
    it being understood and agreed that determinations in accordance with GAAP
    for purposes of Section 8, including defined terms as used therein, are subject
    (to the extent provided therein) to Section 12.07(a).

 “Governmental Authority” shall
      mean any nation or government, any state or other political subdivision
      thereof and any entity exercising executive, legislative, judicial, regulatory
      or administrative functions of or pertaining to government, including any
      Applicable Insurance Regulatory Authority. 

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 “Guaranteed
    Creditors” shall mean and include each of the Administrative Agent,
    the Lenders and the Issuing Agent.

 “Indebtedness” of
    any Person shall mean, without duplication, (i) all indebtedness of such
    Person for borrowed money, (ii) the deferred purchase price of assets or
    services which in accordance with GAAP would be shown on the liability side
    of the balance sheet of such Person, (iii) the face amount of all letters
    of credit issued for the account of such Person and, without duplication,
    all drafts drawn thereunder, (iv) all indebtedness of a type referred to
    in clauses (i) through (iii) or (v) through (vii) of this definition of a
    second Person secured by any Lien on any property owned by such first Person,
    whether or not such Indebtedness has been assumed, (v) all capitalized lease
    obligations of such Person, (vi) all obligations of such Person under Interest
    Rate Protection Agreements and (vii) all Contingent Obligations of such Person
    with respect to any of the foregoing; provided that, Indebtedness
    shall not include (x) trade payables (including payables under insurance
    contracts and reinsurance payables) and accrued expenses, in each case arising
    in the ordinary course of business and (y) obligations with respect to Policies.

 “Initial
    Designated Subsidiary Borrowers” shall mean those Designated Subsidiary
    Borrowers set forth in clauses (a) through (e), inclusive, of the definition
    thereof.

 “Insurance
    Business” shall mean one or more aspects of the business of selling,
    issuing or underwriting insurance or reinsurance.

 “Insurance
    Contract” shall mean any insurance contract or policy issued by a Regulated
    Insurance Company but shall not include any Reinsurance Agreement or Retrocession
    Agreement.

 “Insurance
    Licenses” shall mean, with respect to each Regulated Insurance Company,
    licenses (including, without limitation, licenses or certificates of authority
    from Applicable Insurance Regulatory Authorities), permits or authorizations
    to transact insurance and reinsurance business held by such Regulated Insurance
    Company.

 “Interest
    Period” shall mean, with respect to any Eurodollar Loan, the interest
    period applicable thereto, as determined pursuant to Section 1.09.

 “Interest
    Rate Protection Agreement” shall mean any interest rate swap agreement,
    interest rate cap agreement, interest rate collar agreement, interest rate
    hedging agreement or other similar agreement or arrangement.

 “Intermediate
    Holding Companies” shall mean, collectively, (x) EUHC and (y) any other
    Subsidiary of the Parent Borrower that is designated as an additional Designated
    Subsidiary Borrower after the Effective Date and is a “holding company” (i.e.
    such Designated Subsidiary Borrower does not own any material assets other
    than the equity interests of its direct Subsidiaries).

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“Investment
    Grade Securities” shall mean and include (i) U.S. Government Obligations
    (other than Cash Equivalents), (ii) debt securities or debt instruments with
    a rating of BBB- or higher by S&P, Baa3 or higher by Moody’s, Class
    (2) or higher by NAIC or the equivalent of such rating by S&P, Moody’s
    or NAIC, or if none of S&P, Moody’s and NAIC shall then exist, the
    equivalent of such rating by any other nationally recognized securities rating
    agency, but excluding any debt securities or instruments constituting loans
    or advances among the Parent Borrower and its Wholly-Owned Subsidiaries,
    and (iii) any fund investing exclusively in investments of the type described
    in clauses (i) and (ii) which funds may also hold immaterial amounts of cash
    pending investment and/or distribution.

“Issuing Agent” shall
mean JPMorgan Chase Bank.

“Legal
    Requirements” shall mean all applicable laws, rules and regulations
    made by any governmental body or regulatory authority (including, without
    limitation, any Applicable Insurance Regulatory Authority) having jurisdiction
    over the Parent Borrower or a Subsidiary of the Parent Borrower.

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

“Lender
    Default” shall mean (i) the refusal (which has not been retracted) of
    a Lender to make available its portion of any Borrowing or (ii) a Lender
    having notified the Administrative Agent and/or the applicable Borrower that
    it does not intend to comply with its obligations under Sections 1.01, 2A
    or 2B, in the case of either clause (i) or (ii) above as a result of the
    appointment of a receiver or conservator with respect to such Lender at the
    direction or request of any regulatory agency or authority.

“Letter
    of Credit Outstandings” shall mean, collectively, the Tranche 1 Letter
    of Credit Outstandings and the Tranche 2 Letter of Credit Outstandings.

“Letter
    of Credit Supportable Obligations” shall mean obligations of the Parent
    Borrower or any of its Subsidiaries to any other Person which are permitted
    to exist pursuant to the terms of this Agreement.

“Letters
    of Credit” shall mean, collectively, the Tranche 1 Letters of Credit
    and the Tranche 2 Letters of Credit.

“Leverage
    Ratio” shall mean the ratio of (i) Consolidated Indebtedness to (ii)
    Consolidated Total Capital.

“Lien” shall
    mean any mortgage, pledge, security interest, encumbrance, lien or charge
    of any kind (including any agreement to give any of the foregoing, any conditional
    sale or other title retention agreement or any lease in the nature thereof),
    or any understanding or agreement to repurchase any property or assets sold
    by the Parent Borrower or any of its Subsidiaries (including sales of accounts
    receivable or notes with recourse to the Parent Borrower or any of its Subsidiaries),
    or the assignment of any right to receive income, or the filing of any financing
    statement under the UCC or any other similar notice under any similar recording
    or notice statute relating to any property.

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“Majority
    Tranche 1 Lenders” shall mean, at any time, Tranche 1 Lenders whose
    Tranche 1 Commitments (or, after the Tranche 1 Commitments have terminated,
    the sum of such Tranche 1 Lenders’ (x) then outstanding Tranche 1 Revolving
    Loans plus (y) Tranche 1 Percentages of the Tranche 1 Letter of Credit
    Outstandings at such time) represent an amount greater than 50% of the Total
    Tranche 1 Commitment (or after the termination thereof, the sum of (x) the
    then total outstanding Tranche 1 Revolving Loans plus (y) the Tranche
    1 Letter of Credit Outstandings at such time).

“Margin
    Adjustment Period” shall mean each period which shall commence on the
    date upon which the respective officer’s certificate is delivered pursuant
    to Section 7.01(c) (together with the related financial statements pursuant
    to Section 7.01(a) or (b), as the case may be) and which shall end on the
    date of actual delivery of the next officer’s certificate pursuant to
    Section 7.01(c) (and related financial statements) or the latest date on
    which such next officer’s certificate (and related financial statements)
    is required to be so delivered; it being understood that the first Margin
    Adjustment Period shall commence with the delivery of the Parent Borrower’s
    financial statements (and related officer’s certificate) in respect
    of its fiscal quarter ending June 30, 2004.

“Margin Stock” shall
have the meaning provided in Regulation U.

“Material
    Adverse Effect” shall mean, (i) a material adverse effect on the business,
    operations, property or financial condition of the Parent Borrower and its
    Subsidiaries taken as a whole or (ii) a material adverse effect on (x) the
    rights and remedies of the Administrative Agent or the Lenders under the
    Credit Documents, (y) the ability of any Borrower to perform its obligations
    under the Credit Documents to which it is a party or (z) the legality, validity
    or enforceability of any Credit Document.

“Material
    Subsidiary” shall mean any Subsidiary of the Parent Borrower whose total
    assets or total revenues exceed 10% of the total assets or gross revenues,
    respectively, of the Parent Borrower and its Subsidiaries on a consolidated
    basis as of the most recent fiscal quarter end and for the most recent fiscal
    quarter period, respectively, determined in accordance with GAAP.

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

“Multiemployer
    Plan” shall mean any multiemployer plan as defined in Section 4001(a)(3)
    of ERISA, which is maintained or contributed to by (or to which there is
    an obligation to contribute of) the Parent Borrower, any of its Subsidiaries
    or any of its ERISA Affiliates, and each such plan for the five year period
    immediately following the latest date on which the Parent Borrower, such
    Subsidiary or such ERISA Affiliate maintained, contributed to or had an obligation
    to contribute to such plan.

“NAIC” shall
mean the National Association of Insurance Commissioners.

“Net Worth” shall
      mean, as to any Person, the sum of its capital stock (including, without
      limitation, its preferred stock), capital in excess of par or stated value
      of shares of its capital stock (including, without limitation, its preferred
      stock), retained earnings and any other
    account which, in
    accordance with GAAP, constitutes stockholders equity, but excluding (i)
    any treasury stock and (ii) the effects of Financial Accounting Statement
  No. 115. 

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“Note” shall
    mean, collectively, each Tranche 1 Note, each Tranche 2 Note and each Tranche
    3 Note.

“Notice of Borrowing” shall have the meaning provided in Section 1.03.

“Notice
  of Conversion” shall have the meaning provided in Section 1.06.

“Notice
    of Non-Extension” shall have the meaning provided in Section 2A.05.

“Notice
    Office” shall mean the office of the Administrative Agent at One Chase
    Manhattan Plaza, New York, New York 10081, Attention: Laura Rebecca, Telephone:
    (212) 552-7253, Facsimile: (212) 552-7490, or such other office as the Administrative
    Agent may designate to the Parent Borrower and the Lenders from time to time.

“Obligations” shall
    mean all amounts, direct or indirect, contingent or absolute, of every type
    or description, and at any time existing, owing to the Administrative Agent,
    the Issuing Agent or any Lender pursuant to the terms of this Agreement or
    any other Credit Document.

“Original
    Lenders” shall mean each Person which was a “Tranche 1 Lender” under,
    and as defined in, the Existing Credit Agreement.

“Parent
    Borrower” shall have the meaning provided in the first paragraph of
    this Agreement. For the purposes of Sections 5, 6, 7, 8 and 9 (including
    the defined terms used therein) any reference to “Parent Borrower” shall
    also mean, and include, the Parent Borrower in its capacity as a guarantor
    under Section 13.

“Parent
    Borrower Guaranteed Obligations” shall mean the principal of and interest
    on all Revolving Loans incurred by any Designated Subsidiary Borrower and
    all reimbursement obligations and Unpaid Drawings with respect to Letters
    of Credit issued for the account of any Designated Subsidiary Borrower, together
    with all the other obligations (including obligations which, but for the
    automatic stay under Section 362(a) of the Bankruptcy Code, would become
    due) and liabilities (including, without limitation, indemnities, fees and
    interest thereon) of any Designated Subsidiary Borrower to any Lender, the
    Administrative Agent and the Issuing Agent now existing or hereafter incurred
    under, arising out of or in connection with, this Agreement and each other
    Credit Document pursuant to which any Designated Subsidiary Borrower is a
    party and the due performance and compliance by any such Designated Subsidiary
    Borrower with all the terms, conditions and agreements contained in this
    Agreement and each such other Credit Document.

“Parent
    Borrower Guaranty” shall mean the guaranty of the Parent Borrower provided
    in Section 13.

“Patriot Act” shall
have the meaning set forth in Section 12.17.

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“Payment
    Office” shall mean the office of the Administrative Agent at
    1111 Fannin, Houston, Texas 77002, Attention: Andrew Perkins, Telephone:
    (713) 750-3510, Facsimile: (713) 750-2223, or such other office as the Administrative
    Agent may designate to the Parent Borrower and the Lenders from time to time.

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

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

“Plan” shall
    mean any pension plan as defined in Section 3(2) of ERISA and subject to
    Title IV of ERISA, which is maintained or contributed to by (or to which
    there is an obligation to contribute of) the Parent Borrower or any of its
    Subsidiaries or any of its ERISA Affiliates, and each such plan for the five
    year period immediately following the latest date on which the Parent Borrower,
    any of its Subsidiaries or any of its ERISA Affiliates maintained, contributed
    to or had an obligation to contribute to such plan.

“Policies” shall
    mean all insurance policies, annuity contracts, guaranteed interest contracts
    and funding agreements (including riders to any such policies or contracts,
    certificates issued with respect to group life insurance or annuity contracts
    and any contracts issued in connection with retirement plans or arrangements)
    and assumption certificates issued or to be issued (or filed pending current
    review by applicable Governmental Authorities) by any Regulated Insurance
    Company and any coinsurance agreements entered into or to be entered into
    by any Regulated Insurance Company.

“Prime
    Lending Rate” shall mean the rate which JPMorgan Chase Bank announces
    from time to time as its prime commercial lending rate, the Prime Lending
    Rate to change when and as such prime commercial lending rate changes. The
    Prime Lending Rate is a reference rate and does not necessarily represent
    the lowest or best rate actually charged to any customer. JPMorgan Chase
    Bank may make commercial loans or other loans at rates of interest at, above
    or below the Prime Lending Rate.

“Private
    Act” shall mean separate legislation enacted in Bermuda with the intention
    that such legislation apply specifically to any Borrower, in whole or in
    part.

“Register” shall
have the meaning provided in Section 12.16.

“Regulated
    Insurance Company” shall mean any Subsidiary of the Parent Borrower,
    whether now owned or hereafter acquired, that is authorized or admitted to
    carry on or transact Insurance Business in any jurisdiction and is regulated
    by any Applicable Insurance Regulatory Authority.

“Regulation
    D” shall mean Regulation D of the Board of Governors of the Federal
    Reserve System as from time to time in effect and any successor to all or
    a portion thereof establishing reserve requirements.

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“Regulation
    U” shall mean Regulation U of the Board of Governors of the Federal
    Reserve System as from time to time in effect and any successor to all or
    a portion thereof establishing margin requirements.

“Reinsurance
    Agreement” shall mean any agreement, contract, treaty, certificate or
    other arrangement whereby any Regulated Insurance Company agrees to transfer,
    cede or retrocede to another insurer or reinsurer all or part of the liability
    assumed or assets held by such Regulated Insurance Company under a policy
    or policies of insurance issued by such Regulated Insurance Company or under
    a reinsurance agreement assumed by such Regulated Insurance Company.

“REMIC” shall mean Real Estate Mortgage Investment Conduit.

 “Replaced
  Lender” shall have the meaning provided in Section 1.13.

 “Replacement
    Lender” shall have the meaning provided in Section 1.13.

“Required
    Lenders” shall mean, at any time, Lenders whose Commitments (or, after
    the Commitments have terminated, the sum of such Lenders’ (x) then outstanding
    Revolving Loans plus (y) Tranche 1 Percentages of the Tranche 1 Letter
    of Credit Outstandings at such time plus (z) Tranche 2 Percentages
    of the Tranche 2 Letter of Credit Outstandings at such time) represent an
    amount greater than 50% of the Total Commitment (or after the termination
    thereof, the sum of (x) the then total outstanding Revolving Loans plus (y)
    the Tranche 1 Letter of Credit Outstandings at such time plus (z)
    the Tranche 2 Letter of Credit Outstandings at such time).

“Retrocession
    Agreement” shall mean any agreement, contract, treaty or other arrangement
    whereby one or more insurers or reinsurers, as retrocessionaires, assume
    liabilities of reinsurers under a Reinsurance Agreement or other retrocessionaires
    under another Retrocession Agreement.

“Revolving
    Loans” shall mean, collectively, each Tranche 1 Revolving Loan, each
    Tranche 2 Revolving Loan and each Tranche 3 Revolving Loan.

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

“S&P
    Equivalent Rating” shall mean, with respect to any Investment Grade
    Security, the rating given such security by S&P or the S&P equivalent
    rating of the rating given such security by Moody’s or NAIC, it being
    understood that if any such security is rated by more than one of S&P,
    Moody’s and NAIC and any of such ratings (or the S&P equivalent
    of such ratings) differ, then the S&P Equivalent Rating for such security
    shall be the lower or lowest, as the case may be, of such ratings (or the
    S&P equivalent of such ratings).

“SAP” shall
    mean, with respect to any Regulated Insurance Company, the accounting procedures
    and practices prescribed or permitted by the Applicable Insurance Regulatory
    Authority of the state in which such Regulated Insurance Company is domiciled;
    it being understood and agreed that determinations in accordance with SAP
    for purposes of Section 8, including defined terms as used therein, are subject
    (to the extent provided therein) to Section 12.07(a).

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“SEC” shall
    mean the Securities and Exchange Commission or any successor thereto.

“SEC
    Regulation D” shall mean Regulation D as promulgated under the Securities
    Act of 1933, as amended, as the same may be in effect from time to time.

“Section
    4.04(b)(ii) Certificate” shall have the meaning provided in Section
    4.04(b)(ii).

“Security
    Agreement” means the security agreement substantially in the form of
    Exhibit L hereto, as the same may be amended, modified or supplemented from
    time to time in accordance with the provisions thereof.

“Security
    Documents” shall mean (i) the Security Agreement, (ii) the Account Control
    Agreement, (iii) each other security agreement executed and delivered pursuant
    to Section 7.13 of this Agreement and (iv) each other document, agreement,
    certificate and/or financing statement, executed, delivered, made or filed
    pursuant to the terms of the documents specified in foregoing clauses (i),
    (ii) and (iii).

“Shelf
    Registration” shall mean the registration statement filed by the Parent
    Borrower with the SEC on Form S-3 on June 15, 2004, as amended or supplemented.

“Start
    Date” shall mean, with respect to any Margin Adjustment Period, the
    first day of such Margin Adjustment Period.

“Stated
    Amount” of each Letter of Credit shall mean, at any time, the maximum
    amount available to be drawn thereunder (regardless of whether any conditions
    for drawing could be met).

“Statutory
    Statements” shall mean, with respect to any Regulated Insurance Company
    for any fiscal year, the annual or quarterly financial statements of such
    Regulated Insurance Company as required to be filed with the Insurance Regulatory
    Authority of its jurisdiction of domicile and in accordance with the laws
    of such jurisdiction, together with all exhibits, schedules, certificates
    and actuarial opinions required to be filed or delivered therewith.

“Subsidiary” of
    any Person shall mean and include (i) any corporation more than 50% of whose
    stock of any class or classes having by the terms thereof ordinary voting
    power to elect a majority of the directors of such corporation (irrespective
    of whether or not at the time stock of any class or classes of such corporation
    shall have or might have voting power by reason of the happening of any contingency)
    is at the time owned by such Person directly or indirectly through Subsidiaries
    and (ii) any partnership, association, joint venture or other entity in which
    such Person directly or indirectly through Subsidiaries has more than a 50%
    voting interest at the time for the board of directors or equivalent body.
    Unless otherwise expressly provided, all references to “Subsidiary” shall
    mean a Subsidiary of the Parent Borrower.

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

“Test
    Date” shall mean, with respect to any Start Date, the last day of the
    most recent fiscal quarter of the Parent Borrower ended immediately prior
    to such Start Date.

“Three-Year
    Term Loan Agreement” shall mean the Term Loan Agreement, dated as of
    August 13, 2002, among the Parent Borrower, the lenders party thereto and
    JPMorgan Chase Bank, as administrative agent, providing for up to $192,000,000
    of term loans to the Parent Borrower, as amended, modified or supplemented
    from time to time in accordance with the terms thereof.

 “Total
    Commitment” shall mean the sum of (i) the Total Tranche 1 Commitment plus (ii)
    the Total Tranche 2 Commitment plus (iii) the Total Tranche 3 Commitment.

“Total
    Tranche 1 Commitment” shall mean the sum of the Tranche 1 Commitments
    of each Tranche 1 Lender.

“Total
    Tranche 2 Commitment” shall mean the sum of the Tranche 2 Commitments
    of each Tranche 2 Lender.

“Total
    Tranche 3 Commitment” shall mean the sum of the Tranche 3 Commitments
    of each Tranche 3 Lender.

“Total
    Unutilized Tranche 1 Commitment” shall mean, at any time, an amount
    equal to the remainder of (x) the Total Tranche 1 Commitment then in effect
    less (y) the sum of the aggregate principal amount of Tranche 1 Revolving
    Loans then outstanding and the Tranche 1 Letter of Credit Outstandings at
    such time.

“Total
    Unutilized Tranche 2 Commitment” shall mean, at any time, an amount
    equal to the remainder of (x) the Total Tranche 2 Commitment then in effect less (y)
    the sum of the aggregate principal amount of Tranche 2 Revolving Loans then
    outstanding and the Tranche 2 Letter of Credit Outstandings at such time.

“Total
    Unutilized Tranche 3 Commitment” shall mean, at any time, an amount
    equal to the remainder of (x) the Total Tranche 3 Commitment then in effect
    less (y) the aggregate principal amount of Tranche 3 Revolving Loans then
    outstanding.

“Tranche” shall
    mean, at any time, the respective facility and commitments utilized in making
    Revolving Loans and/or issuing Letters of Credit hereunder, with there being
    three separate Tranches hereunder, i.e., Tranche 1 Commitments, Tranche
    2 Commitments and Tranche 3 Commitments.

“Tranche
    1 Commitment” shall mean, with respect to each Tranche 1 Lender, the
    amount set forth opposite such Tranche 1 Lender’s name on Annex I under
    the heading “Tranche 1 Commitment”, as the same may be (x) reduced
    or terminated pursuant to Sections 3.02, 3.03 and/or 9, (y) increased from
    time to time pursuant to Section 1.15 or (z) adjusted from time to time as
    a result of assignment to or from such Lender pursuant to Section 12.04(b).

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  “Tranche 1 Facility Fee” shall
  have the meaning provided in Section 3.01(a).

“Tranche
    1 Lenders” shall mean each Lender with a Tranche 1 Commitment, outstanding
    Revolving Loans and/or Tranche 1 Letter of Credit Outstandings.

“Tranche 1 Letter of Credit” shall have the meaning provided in Section
2A.01(a).

“Tranche
    1 Letter of Credit Fee” shall have the meaning provided in Section 3.01(g).

“Tranche
    1 Letter of Credit Outstandings” shall mean, at any time, the sum of,
    without duplication (i) the aggregate Stated Amount of all Tranche 1 Letters
    of Credit plus (ii) the aggregate amount of all Tranche 1 Unpaid Drawings
    in respect of all Tranche 1 Letters of Credit.

“Tranche
    1 Letter of Credit Request” shall have the meaning provided in Section
    2A.02(a).

“Tranche 1 Note” shall
have the meaning provided in Section 1.05(a).

“Tranche
    1 Obligations” shall mean all Obligations owing to any Tranche 1 Lender
    or the Issuing Lender in respect of Tranche 1 Revolving Loans and Tranche
    1 Letters of Credit.

“Tranche 1 Participant” shall have the meaning provided in Section
2A.08(a).

“Tranche
    1 Percentage” shall mean, at any time for each Tranche 1 Lender, the
    percentage obtained by dividing such Tranche 1 Lender’s Tranche 1 Commitment
    at such time by the Total Tranche 1 Commitment then in effect, provided that,
    if the Total Tranche 1 Commitment has been terminated, the Tranche 1 Percentage
    of each Tranche 1 Lender shall be determined by dividing such Tranche 1 Lender’s
    Tranche 1 Commitment as in effect immediately prior to such termination by
    the Total Tranche 1 Commitment as in effect immediately prior to such termination
    (but also giving effect to any assignments made in accordance with Section
  12.04(b) after the date on which the Total Tranche 1 Commitment has terminated).

“Tranche
    1 Reduction Percentage” shall mean, at any time, a percentage the numerator
    of which is the Total Tranche 1 Commitment and the denominator of which is
    the Total Commitment.

“Tranche 1 Revolving Loans” shall have the meaning provided in Section
1.01(a).

“Tranche
    1 Unpaid Drawings” shall have the meaning provided in Section 2A.03(a).

“Tranche 1 Utilization Fee” shall have the meaning provided in Section
3.01(d).

“Tranche
    2 Commitment” shall mean, with respect to each Tranche 2 Lender, the
    amount set forth opposite such Tranche 2 Lender’s name on Annex I under
    the heading “Tranche
2 Commitment”,
  as the same may be (x) reduced or terminated pursuant to Sections 3.02, 3.03
  and/or 9, (y) increased from time to time pursuant to Section 1.16 or (z) adjusted
  from time to time as a result of assignment to or from such Tranche 2 Lender
  pursuant to Section 12.04(b).

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“Tranche 2 Facility Fee” shall have the meaning provided in Section
3.01(b).

“Tranche
    2 Lenders” shall mean each Lender with a Tranche 2 Commitment or with
    outstanding Tranche 2 Revolving Loans and/or Tranche 2 Letter of Credit Outstandings.

“Tranche 2 Letter of Credit” shall have the meaning provided in Section
2B.01(a).

“Tranche
    2 Letter of Credit Fee” shall have the meaning provided in Section 3.01(h).

“Tranche
    2 Letter of Credit Outstandings” shall mean, at any time, the sum of,
    without duplication, (i) the aggregate Stated Amount of all Tranche 2 Letters
    of Credit plus (ii) the aggregate amount of all Tranche 2 Unpaid Drawings
    in respect of all Tranche 2 Letters of Credit.

“Tranche
    2 Letter of Credit Request” shall have the meaning provided in Section
    2B.02(a).

“Tranche 2 Note” shall
have the meaning provided in Section 1.05(a).

“Tranche
    2 Percentage” shall mean, at any time for each Tranche 2 Lender, the
    percentage obtained by dividing such Tranche 2 Lender’s Tranche 2 Commitment
    at such time by the Total Tranche 2 Commitment then in effect, provided that,
    if the Total Tranche 2 Commitment has been terminated, the Tranche 2 Percentage
    of each Tranche 2 Lender shall be determined by dividing such Tranche 2 Lender’s
    Tranche 2 Commitment as in effect immediately prior to such termination by
    the Total Tranche 2 Commitment as in effect immediately prior to such termination
    (but also giving effect to any assignments made in accordance with Section
  12.04(b) after the date on which the Total Tranche 2 Commitment has terminated).

“Tranche
    2 Reduction Percentage” shall mean, at any time, a percentage the numerator
    of which is the Total Tranche 2 Commitment and the denominator of which is
    the Total Commitment.

“Tranche 2 Revolving Loans” shall have the meaning provided in Section
1.01(b).

“Tranche
    2 Revolving Percentage” shall mean, at any time, a percentage the numerator
    of which is the Total Tranche 2 Commitment and the denominator of which is
    the sum of the Total Tranche 2 Commitment and the Total Tranche 3 Commitment.

“Tranche
    2 Unpaid Drawings” shall have the meaning provided in Section 2B.03(a).

“Tranche 2 Utilization Fee” shall have the meaning provided in Section
3.01(e).

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“Tranche
    3 Commitment” shall mean, with respect to each Tranche 3 Lender, the
    amount set forth opposite such Tranche 3 Lender’s name on Annex I hereto
    under the heading “Tranche 3 Commitment”, as the same may be (x)
    reduced or terminated pursuant to Sections 3.02, 3.03 and/or 9, or (y) adjusted
    from time to time as a result of assignment to or from such Tranche 3 Lender
  pursuant to Section 12.04(b).

“Tranche 3 Facility Fee” shall have the meaning provided in Section
3.01(c).

“Tranche
    3 Lenders” shall mean each Lender with a Tranche 3 Commitment and/or
    outstanding Tranche 3 Revolving Loans.

“Tranche 3 Note” shall
have the meaning provided in Section 1.05(a).

“Tranche
    3 Percentage” shall mean, at any time for each Tranche 3 Lender, the
    percentage obtained by dividing such Tranche 3 Lender’s Tranche 3 Commitment
    at such time by the Total Tranche 3 Commitment then in effect, provided that,
    if the Total Tranche 3 Commitment has been terminated, the Tranche 3 Percentage
    of each Tranche 3 Lender shall be determined by dividing such Tranche 3 Lender’s
    Tranche 3 Commitment as in effect immediately prior to such termination by
    the Total Tranche 3 Commitment as in effect immediately prior to such termination
    (but also giving effect to any assignments made in accordance with Section
  12.04(b) after the date on which the Total Tranche 3 Commitment has terminated).

“Tranche
    3 Reduction Percentage” shall mean, at any time, a percentage the numerator
    of which is the Total Tranche 3 Commitment and the denominator of which is
    the Total Commitment.

“Tranche 3 Revolving Loans” shall have the meaning provided in Section
1.01(c).

“Tranche
    3 Revolving Percentage” shall mean, at any time, a percentage the numerator
    of which is the Total Tranche 3 Commitment and the denominator of which is
    the sum of the Total Tranche 2 Commitment and the Total Tranche 3 Commitment.

“Tranche 3 Utilization Fee” shall have the meaning provided in Section
3.01(f).

 “Type” shall
    mean any type of Revolving Loan determined with respect to the interest option
    applicable thereto, i.e., a Base Rate Loan or a Eurodollar Loan.

“UCC” shall
mean the Uniform Commercial Code.

“Unpaid
    Drawings” shall mean, collectively, the Tranche 1 Unpaid Drawings and
    the Tranche 2 Unpaid Drawings.

“U.S. Borrower” shall
have the meaning provided in Section 4.04(b).

 

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 “U.S.
    Government Obligations” shall mean and include (A) securities that are
    (x) direct obligations of the United States of America for the timely payment
    of which its full faith and credit is pledged or (y) obligations of a Person
    controlled or supervised by and acting as an agency or instrumentality of
    the United States of America the timely payment of which is unconditionally
  guaranteed as a full faith and credit obligation by the United States of America,
  which, in either case, are not callable or redeemable at the option of the issuer
  thereof, and shall also include a depository receipt issued by a bank (as defined
  in Section 3(a)(2) of the Securities Act of 1933, as amended), as custodian
  with respect to any such U.S. Government Obligation or a specific payment of
  principal of or interest on any such U.S. Government Obligation held by such
  custodian for the account of the holder of such depository receipt; provided
  that (except as required by law) such custodian is not authorized to make any
  deduction from the amount payable to the holder of such depository receipt from
  any amount received by the custodian in respect of the U.S. Government Obligation
  or the specific payment of principal of or interest on the U.S. Government Obligation
  evidenced by such depository receipt and (B) to the extent in each case having
  an S&P Equivalent Rating of AAA, obligations issued or guaranteed by the
  Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association,
  the Government National Mortgage Association, the Student Loan Marketing Association
  and the Federal Home Loan Bank. 

“Utilization
  Fees” shall mean, collectively, the Tranche 1 Utilization Fees, the Tranche
  2 Utilization Fees and the Tranche 3 Utilization Fees.

“Wholly-Owned
  Subsidiary” of any Person shall mean any Subsidiary of such Person to the
  extent all of the capital stock or other ownership interests in such Subsidiary,
  other than directors’ or nominees’ qualifying shares, is owned directly
  or indirectly by such Person.

“Written”
  or “in writing” shall mean any form of written communication or a
  communication by means of telex, facsimile device, telegraph or cable.

   SECTION
    11.   The
    Agents.

  11.01   Appointment.   Each
    Lender hereby irrevocably designates and appoints JPMorgan Chase Bank as Administrative
    Agent (such term as used in this Section 11 to include JPMorgan Chase Bank,
    acting as Issuing Agent under this Agreement and each Letter of Credit) to
    act as specified herein and in the other Credit Documents, and each such Lender
    hereby irrevocably authorizes JPMorgan Chase Bank, as the Administrative Agent
    for such Lender, to take such action on its behalf under the provisions of
    this Agreement and the other Credit Documents and to exercise such powers
    and perform such duties as are expressly delegated to the Administrative Agent
    by the terms of this Agreement and the other Credit Documents, together with
    such other powers as are reasonably incidental thereto. Each Lender hereby
    further irrevocably designates and appoints The Bank of New York as Collateral
    Agent, to act as specified herein and in the other Credit Documents, and each
    such Lender hereby irrevocably authorizes The Bank of New York, as the Collateral
    Agent for such Lender, to take such action on its behalf under the provisions
    of this Agreement and the other Credit Documents and to exercise such powers
    and perform such duties as are expressly delegated to the Collateral Agent
    by the terms of this Agreement and the other Credit Documents, together with
    such other powers as are reasonably incidental thereto. Each Agent agrees
    to act as such upon the express conditions contained in this Section 11. Notwithstanding
    any provision to the contrary elsewhere in this Agreement, neither Agent shall
    have any duties or responsibilities, except those expressly set forth herein
    or in the other Credit Documents, nor any fiduciary relationship with any
    Lender, and no implied covenants, functions, responsibilities, duties, obligations
    or liabilities shall be read
    into this Agreement or otherwise exist against such Agent. The provisions
    of this Section 11 are solely for the benefit of the Agents and the Lenders,
    and no Borrower shall have any rights as a third party beneficiary of any
    of the provisions hereof. In performing its functions and duties under this
    Agreement, each Agent shall act solely as agent of the Lenders and does not
    assume and shall not be deemed to have assumed any obligation or relationship
    of agency or trust with or for any Borrower.  

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  11.02   Delegation
    of Duties.   Each
    Agent may execute any of its duties under this Agreement or any other Credit
    Document by or through agents or attorneys-in-fact and shall be entitled to
    advice of counsel concerning all matters pertaining to such duties. Neither
    Agent shall be responsible for the negligence or misconduct of any agents
    or attorneys-in-fact selected by it with reasonable care except to the extent
    otherwise required by Section 11.03. 

  11.03   Exculpatory
    Provisions.   Neither
    Agent nor any of their officers, directors, employees, agents, attorneys-in-fact
    or affiliates shall be (i) liable for any action lawfully taken or omitted
    to be taken by it or such Person under or in connection with this Agreement
    (except for its or such Person’s own gross negligence or willful misconduct
    (as determined by a court of competent jurisdiction in a final and non-appealable
    decision)) or (ii) responsible in any manner to any of the Lenders for any
    recitals, statements, representations or warranties made by the Parent Borrower
    or any of its Subsidiaries or any of their respective officers contained in
    this Agreement, any other Credit Document or in any certificate, report, statement
    or other document referred to or provided for in, or received by the Administrative
    Agent under or in connection with, this Agreement or any other Credit Document
    or for any failure of the Parent Borrower or any of its Subsidiaries or any
    of their respective officers to perform its obligations hereunder or thereunder.
    Neither Agent shall be under any obligation to any Lender to ascertain or
    to inquire as to the observance or performance of any of the agreements contained
    in, or conditions of, this Agreement, or to inspect the properties, books
    or records of the Parent Borrower or any of its Subsidiaries. Neither Agent
    shall be responsible to any Lender for the effectiveness, genuineness, validity,
    enforceability, collectibility or sufficiency of this Agreement or any Credit
    Document or for any representations, warranties, recitals or statements made
    herein or therein or made in any written or oral statement or in any financial
    or other statements, instruments, reports, certificates or any other documents
    in connection herewith or therewith furnished or made by such Agent to the
    Lenders or by or on behalf of any Borrower to such Agent or any Lender or
    be required to ascertain or inquire as to the performance or observance of
    any of the terms, conditions, provisions, covenants or agreements contained
    herein or therein or as to the use of the proceeds of the Revolving Loans
    or of the existence or possible existence of any Default or Event of Default.
    

  11.04   Reliance
    by Agents.   Each
    Agent shall be entitled to rely, and shall be fully protected in relying,
    upon any note, writing, resolution, notice, consent, certificate, affidavit,
    letter, cablegram, telegram, facsimile transmission, telex or teletype message,
    statement, order or other document or conversation believed by it to be genuine
    and correct and to have been signed, sent or made by the proper Person or
    Persons and upon advice and statements of legal counsel (including, without
    limitation, counsel to the Borrowers), independent accountants and other experts
    selected by such Agent. Each Agent shall be fully justified in failing or
    refusing to take any action under this Agreement or any other Credit Document
    unless it shall first receive such advice or concurrence of the Required Lenders
    as it deems
    appropriate or it shall first be indemnified to its satisfaction by the Lenders
    against any and all liability and expense which may be incurred by it by
    reason of taking or continuing to take any such action. Each Agent shall
    in all cases be fully protected in acting, or in refraining from acting,
    under this Agreement and the other Credit Documents in accordance with a
    request of the Required Lenders, and such request and any action taken or
    failure to act pursuant thereto shall be binding upon all the Lenders.

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  11.05   Notice
    of Default.   Neither
    Agent shall be deemed to have knowledge or notice of the occurrence of any
    Default or Event of Default hereunder unless such Agent has received notice
    from a Lender or a Borrower referring to this Agreement, describing such Default
    or Event of Default and stating that such notice is a “notice of default”.
    In the event that the Administrative Agent receives such a notice, the Administrative
    Agent shall give prompt notice thereof to the Lenders. In the event the Collateral
    Agent receives such a notice, the Collateral Agent shall give prompt notice
    thereof to the Administrative Agent. The Administrative Agent shall take such
    action with respect to such Default or Event of Default as shall be reasonably
    directed by the Required Lenders, provided that unless and until the
    Administrative Agent shall have received such directions, the Administrative
    Agent may (but shall not be obligated to) take such action, or refrain from
    taking such action, with respect to such Default or Event of Default as it
    shall deem advisable in the best interests of the Lenders. 

  11.06   Non-Reliance.   Each
    Lender expressly acknowledges that neither Agent nor any of their officers,
    directors, employees, agents, attorneys-in-fact or affiliates have made any
    representations or warranties to it and that no act by either Agent hereinafter
    taken, including any review of the affairs of the Parent Borrower or any of
    its Subsidiaries, shall be deemed to constitute any representation or warranty
    by such Agent to any Lender. Each Lender represents to each Agent that it
    has, independently and without reliance upon either Agent or any other Lender,
    and based on such documents and information as it has deemed appropriate,
    made its own appraisal of and investigation into the business, assets, operations,
    property, financial and other conditions, prospects and creditworthiness of
    the Parent Borrower and its Subsidiaries and made its own decision to make
    its Revolving Loans hereunder and enter into this Agreement. Each Lender also
    represents that it will, independently and without reliance upon either Agent
    or any other Lender, and based on such documents and information as it shall
    deem appropriate at the time, continue to make its own credit analysis, appraisals
    and decisions in taking or not taking action under this Agreement, and to
    make such investigation as it deems necessary to inform itself as to the business,
    assets, operations, property, financial and other conditions, prospects and
    creditworthiness of the Parent Borrower and its Subsidiaries. Neither Agent
    shall have any duty or responsibility to provide any Lender with any credit
    or other information concerning the business, operations, assets, property,
    financial and other conditions, prospects or creditworthiness of the Parent
    Borrower or any Subsidiary which may come into the possession of such Agent
    or any of its officers, directors, employees, agents, attorneys-in-fact or
    affiliates. 

  11.07   Indemnification.   Each
    Lender agrees to indemnify each Agent and The Bank of New York as Custodian,
    in each case in its capacity as such, ratably according to its respective
    “percentages” as used in determining the Required Lenders at such
    time from and against any and all liabilities, obligations, losses, damages,
    penalties, actions, judgments, suits, costs, reasonable expenses or disbursements
    of any kind whatsoever which may at any time (including, without limitation,
    at any time following the payment of the Obligations) be imposed

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 on, incurred
  by or asserted against such Agent or the Custodian, as the case may be, in its
  capacity as such in any way relating to or arising out of this Agreement or
  any other Credit Document, or any documents contemplated by or referred to herein
  or the transactions contemplated hereby or any action taken or omitted to be
  taken by such Agent or the Custodian, as the case may be, under or in connection
  with any of the foregoing, but only to the extent that any of the foregoing
  is not paid by the Parent Borrower or any of its Subsidiaries, provided
  that no Lender shall be liable to such Agent or the Custodian, as the case may
  be, for the payment of any portion of such liabilities, obligations, losses,
  damages, penalties, actions, judgments, suits, costs, expenses or disbursements
  resulting solely from the gross negligence or willful misconduct of such Agent
  or the Custodian, as the case may be (as determined by a court of competent
  jurisdiction in a final and non-appealable decision). If any indemnity furnished
  to either Agent or the Custodian, as the case may be, for any purpose shall,
  in the opinion of such Agent or the Custodian, as the case may be, be insufficient
  or become impaired, such Agent or the Custodian, as the case may be, may call
  for additional indemnity and cease, or not commence, to do the acts indemnified
  against until such additional indemnity is furnished. The agreements in this
  Section 11.07 shall survive the payment of all Obligations. 

  11.08   The
    Agents in Their Individual Capacities.   Each
    Agent and its affiliates may make loans to, accept deposits from and generally
    engage in any kind of business with the Parent Borrower and its Subsidiaries
    as though not acting as Administrative Agent hereunder. With respect to the
    Revolving Loans made by it and all Obligations owing to it, such Agent shall
    have the same rights and powers under this Agreement as any Lender and may
    exercise the same as though it were not such Agent, and the terms “Lender”
    and “Lenders” shall include such Agent in its individual capacity.
    

  11.09   Successor
    Agents.   (a)   Either
    the Administrative Agent or the Collateral Agent (or both) may resign from
    the performance of all its respective functions and duties hereunder and/or
    under the other Credit Documents at any time, in each case by giving 20 Business
    Days’ prior written notice to the Lenders and the Borrowers. 

  (b)   Upon
    such resignation of the Administrative Agent, the Required Lenders shall,
    with the consent of the Parent Borrower (such consent not to be unreasonably
    withheld), appoint from among the Lenders a successor Administrative Agent
    for the Lenders, whereupon such successor agent shall succeed to the rights,
    powers and duties of the Administrative Agent, and the term “Administrative
    Agent” shall include such successor agent effective upon its appointment,
    and the resigning Administrative Agent’s rights, powers and duties as
    the Administrative Agent shall be terminated, without any other or further
    act or deed on the part of such former Administrative Agent or any of the
    parties to this Agreement. After the retiring Administrative Agent’s
    resignation hereunder as the Administrative Agent, the provisions of this
    Section 11 shall inure to its benefit as to any actions taken or omitted to
    be taken by it while it was Administrative Agent under this Agreement.

  (c)   Upon
    such resignation of the Collateral Agent, the Required Lenders shall, with
    the consent of the Parent Borrower (such consent not to be unreasonably withheld),
    appoint from among the Lenders a successor Collateral Agent for the Lenders,
    whereupon such successor agent shall succeed to the rights, powers and duties
    of the Collateral Agent, and the term “Collateral Agent” shall include
    such successor agent effective upon its appointment, and the resigning Collateral
    Agent’s rights, powers and duties as the Collateral Agent shall be terminated,
    without any other or further act or deed on the part of such former Collateral
    Agent or any of the parties to this Agreement. After the retiring Collateral
    Agent’s resignation hereunder as the Collateral Agent, the provisions
    of this Section 11 shall inure to its benefit as to any actions taken or omitted
    to be taken by it while it was Collateral Agent under this Agreement. 

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   SECTION
    12.   Miscellaneous.

  12.01   Payment
    of Expenses, etc.   The
    Parent Borrower hereby agrees to: (i) whether or not the transactions herein
    contemplated are consummated, pay all reasonable out-of-pocket costs and expenses
    of the Administrative Agent in connection with the negotiation, preparation,
    syndication, execution, delivery and administration of the Credit Documents
    and the documents and instruments referred to therein (including, without
    limitation, the reasonable fees and disbursements of White & Case LLP
    and of consultants and advisors to the Administrative Agent and its counsel);
    (ii) whether or not the transactions herein contemplated are consummated,
    pay all reasonable out-of-pocket costs and expenses of the Administrative
    Agent in connection with any amendment, waiver or consent relating to this
    Agreement or any other Credit Document; (iii) whether or not the transactions
    herein contemplated are consummated, pay all reasonable out-of-pocket costs
    and expenses of the Administrative Agent and each of the Lenders in connection
    with the enforcement of the Credit Documents and the documents and instruments
    referred to therein (including, without limitation, the reasonable fees and
    disbursements of counsel and consultants for the Administrative Agent and
    for each of the Lenders); (iv) pay and hold each of the Lenders harmless from
    and against any and all present and future stamp and other similar taxes with
    respect to the foregoing matters and save each of the Lenders harmless from
    and against any and all liabilities with respect to or resulting from any
    delay or omission to pay such taxes; and (v) indemnify the Administrative
    Agent and each Lender, and their respective officers, directors, employees,
    representatives and agents (each, an “indemnified person”) from
    and hold each of them harmless against any and all losses, liabilities, claims,
    damages or expenses (collectively, “Claims”) incurred by any of
    them as a result of, or arising out of, or in any way related to, or by reason
    of, any investigation, litigation or other proceeding (whether or not the
    Administrative Agent or any Lender is a party thereto) related to the entering
    into and/or performance of any Credit Document or the use of the proceeds
    of any Revolving Loans hereunder or the consummation of any other transactions
    contemplated in any Credit Document, including, without limitation, the reasonable
    fees and disbursements of counsel incurred in connection with any such investigation,
    litigation or other proceeding (but excluding any such losses, liabilities,
    claims, damages or expenses to the extent incurred by reason of the gross
    negligence or willful misconduct of the Person to be indemnified (as determined
    by a court of competent jurisdiction in a final and non-appealable decision)).
    

  12.02   Right
    of Setoff.   In
    addition to any rights now or hereafter granted under applicable law or otherwise,
    and not by way of limitation of any such rights, upon the occurrence and continuance
    of an Event of Default, each Lender is hereby authorized at any time or from
    time to time, without presentment, demand, protest or other notice of any
    kind to any Borrower or to any other Person, any such notice being hereby
    expressly waived, to set off and to appropriate and apply any and all deposits
    (general or special) and any other Indebtedness at any time held or owing
    by such Lender (including, without limitation, by branches and agencies of

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 such Lender
  wherever located) to or for the credit or the account of any Borrower against
  and on account of the Obligations and liabilities of any such Borrower to such
  Lender or any other Lender under this Agreement or under any of the other Credit
  Documents, including, without limitation, all interests in Obligations of any
  such Borrower purchased by such Lender or any other Lender pursuant to Section
  12.06(b), and all other claims of any nature or description arising out of or
  connected with this Agreement or any other Credit Document, irrespective of
  whether or not such Lender shall have made any demand hereunder and although
  said Obligations, liabilities or claims, or any of them, shall be contingent
  or unmatured. Each Lender is hereby designated the agent of all other Lenders
  for purposes of effecting set off pursuant to this Section 12.02 and each Borrower
  hereby grants to each Lender for such Lender’s own benefit and as agent
  for all other Lenders a continuing security interest in any and all deposits,
  accounts or moneys of the Borrowers maintained from time to time with such Lender.

  12.03   Notices.   Except as otherwise expressly provided herein, all notices and other communications
    provided for hereunder shall be in writing (including telegraphic, telex,
    facsimile or cable communication) and mailed, telegraphed, telexed, telecopied,
    cabled or delivered, if to a Borrower, at the address specified opposite its
    signature below; if to any Lender, at its address specified for such Lender
    on Annex II hereto; or, at such other address as shall be designated by any
    party in a written notice to the other parties hereto. All such notices and
    communications shall be mailed, telegraphed, telexed, telecopied, cabled or
    sent by overnight courier and shall be effective when received. 

  12.04   Benefit
    of Agreement   (a)   This
    Agreement shall be binding upon and inure to the benefit of and be enforceable
    by the respective successors and assigns of the parties hereto; provided,
    however, no Borrower may assign or transfer any of its rights or obligations
    hereunder without the prior written consent of the Lenders. Each Lender may
    at any time grant participations in any of its rights hereunder or under any
    of its Notes to any bank or other financial institution; provided that
    in the case of any such participation, the participant shall not have any
    rights under this Agreement or any of the other Credit Documents, including
    rights of consent, approval or waiver (the participant’s rights against
    such Lender in respect of such participation to be those set forth in the
    agreement executed by such Lender in favor of the participant relating thereto)
    and all amounts payable by the Borrowers hereunder shall be determined as
    if such Lender had not sold such participation, except that the participant
    shall be entitled to receive the additional amounts under Sections 1.10, 1.11,
    2.04 and 4.04 of this Agreement to, and only to, the extent that such Lender
    would be entitled to such benefits if the participation had not been entered
    into or sold; and provided, further, that no Lender shall transfer,
    grant or assign any participation under which the participant shall have rights
    to approve any amendment to or waiver of this Agreement or any other Credit
    Document except to the extent such amendment or waiver would (i) extend the
    final scheduled maturity of any Revolving Loan or Note in which such participant
    is participating or reduce the rate or extend the time of payment of interest
    thereon or Fees, or reduce the principal amount thereof, or increase such
    participant’s participating interest in any Commitment or Revolving Loan
    over the amount thereof then in effect (it being understood that a waiver
    of any Default or Event of Default or of a mandatory reduction in the Total
    Commitment shall not constitute a change in the terms of any Commitment and
    that an increase in any Commitment shall be permitted without the consent
    of any participant if such participant’s participation is not increased
    as a result thereof) or (ii) consent to the assignment or transfer by any
    Borrower of any of its rights and obligations under this Agreement or any
    other Credit Document except in accordance with the terms hereof and thereof.

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  (b)   Notwithstanding
    the foregoing, any Lender may assign all or a portion of its rights and obligations
    hereunder to a NAIC approved bank or other financial institution (unless otherwise
    agreed by the Parent Borrower and the Administrative Agent) with the prior
    written consent of each of (i) the Administrative Agent, (ii) in the case
    of an assignment of Tranche 1 Commitments or Tranche 2 Commitments (and/or
    the related obligations under such respective Tranche), the Issuing Agent
    and (iii) so long as no Default or Event of Default has occurred and is continuing,
    the Parent Borrower (such consent, in each case, not to be unreasonably withheld
    or delayed). No assignment of less than all of a Lender’s rights and
    obligations hereunder pursuant to the immediately preceding sentence shall,
    to the extent such transaction represents an assignment to an institution
    other than one or more Lenders hereunder, be in an aggregate amount less than
    the minimum of $5,000,000 unless otherwise agreed to by the Administrative
    Agent and the Parent Borrower in writing and no assignment shall be effective
    until all the then outstanding Tranche 1 Letters of Credit or Tranche 2 Letters
    of Credit, as the case may be, are returned by each respective beneficiary
    to the Issuing Agent either for cancellation and/or to be exchanged for new
    or amended Letters of Credit which give effect to such assignment. If any
    Lender so sells or assigns all or a part of its rights hereunder or under
    the Notes, any reference in this Agreement or the Notes to such assigning
    Lender shall thereafter refer to such Lender and to the respective assignee
    to the extent of their respective interests and the respective assignee shall
    have, to the extent of such assignment (unless otherwise provided therein),
    the same rights and benefits as it would if it were such assigning Lender.
    Each assignment pursuant to this Section 12.04(b) shall be effected by the
    assigning Lender and the assignee Lender executing an Assignment Agreement
    (appropriately completed). At the time of any such assignment, (i) Annex I
    shall be deemed to be amended to reflect the Commitments, if any, and outstanding
    Revolving Loans, if any, of the respective assignee (which shall result in
    a direct reduction to the Commitments, if any, and outstanding Revolving Loans,
    if any, of the assigning Lender) and of the other Lenders, (ii) if any such
    assignment occurs after the Effective Date, at the request of the assignor
    or the assignee, the Parent Borrower will issue new Notes to the respective
    assignee and to the assigning Lender in conformity with the requirements of
    Section 1.05, (iii) all then outstanding Tranche 1 Letters of Credit or Tranche
    2 Letters of Credit, as the case may be, shall be returned by each respective
    beneficiary to the Issuing Agent either for cancellation and/or to be exchanged
    for new or amended Letters of Credit to reflect such assignment (it being
    understood that to the extent the respective beneficiaries do not consent
    to such assignment, such assignment cannot occur) and (iv) the Administrative
    Agent shall receive from the assigning Lender and/or the assignee Lender or
    financial institution at the time of each assignment the payment of a nonrefundable
    assignment fee of $3,500, provided
    that such transfer or assignment will not be effective until recorded by the
    Administrative Agent on the Register pursuant to Section 12.16 hereof. At
    the time of each assignment pursuant to this Section 12.04(b) to a Person
    which (x) is not already a Lender hereunder and (y) is not a United States
    person (as such term is defined in Section 7701(a)(30) of the Code) for Federal
    income tax purposes, the respective assignee Lender shall provide to the Borrowers
    and the Administrative Agent the appropriate Internal Revenue Service forms
    (and, if applicable a Section 4.04(b)(ii) Certificate) described in Section
    4.04(b). Each Lender and each Borrower agrees to execute such documents (including,
    without limitation, amendments to this Agreement and the other Credit Documents)
    as shall be necessary to effect the foregoing. Promptly following any assignment
pursuant
    to this Section 12.04(b), the assigning Lender shall promptly notify the
    Borrowers and the Administrative Agent thereof. Nothing in this Section 12.04
    shall prevent or prohibit any Lender from pledging its Revolving Loans or
    Notes hereunder to a Federal Reserve Bank in support of borrowings made by
  such Lender from such Federal Reserve Bank. 

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  (c)   Notwithstanding
    any other provisions of this Section 12.04, no transfer or assignment of the
    interests or obligations of any Lender hereunder or any grant of participations
    therein shall be permitted if such transfer, assignment or grant would require
    any Borrower to file a registration statement with the SEC or to qualify the
    Revolving Loans under the “Blue Sky” laws of any State of the United
    States.

  (d)   Each
    Lender initially party to this Agreement hereby represents, and each Person
    that becomes a Lender pursuant to an assignment permitted by clause (b) above
    will upon its becoming party to this Agreement represent, that it is a commercial
    lender, other financial institution or other “accredited investor”
    (as defined in SEC Regulation D) which makes loans in the ordinary course
    of its business or is acquiring the Revolving Loans without a view to distribution
    of the Revolving Loans within the meaning of the federal securities laws,
    and that it will make or acquire Revolving Loans for its own account in the
    ordinary course of such business, provided
    that, subject to the preceding clauses (a) through (c), the disposition of
    any promissory notes or other evidences of or interests in Indebtedness held
    by such Lender shall at all times be within its exclusive control. 

  12.05   No
    Waiver; Remedies Cumulative.   No failure or delay on the part of the Administrative Agent or any Lender
    in exercising any right, power or privilege hereunder or under any other Credit
    Document and no course of dealing between any Borrower and the Administrative
    Agent or any Lender shall operate as a waiver thereof; nor shall any single
    or partial exercise of any right, power or privilege hereunder or under any
    other Credit Document preclude any other or further exercise thereof or the
    exercise of any other right, power or privilege hereunder or thereunder. The
    rights and remedies herein expressly provided are cumulative and not exclusive
    of any rights or remedies which the Administrative Agent or any Lender would
    otherwise have. No notice to or demand on any Borrower in any case shall entitle
    such Borrower to any other or further notice or demand in similar or other
    circumstances or constitute a waiver of the rights of the Administrative Agent
    or the Lenders to any other or further action in any circumstances without
    notice or demand. 

  12.06   Payments
    Pro Rata.   (a)   The Administrative Agent agrees that promptly after its
    receipt of each payment from or on behalf of each Borrower in respect of any
    Obligations of such Borrower, it shall distribute such payment to the Lenders
    (other than any Lender that has consented in writing to waive its pro
    rata share of such payment) pro rata based upon their
    respective shares, if any, of the Obligations with respect to which such payment
    was received. 

  (b)   Each
    of the Lenders agrees that, if it should receive any amount hereunder (whether
    by voluntary payment, by realization upon security, by the exercise of the
    right of setoff or banker’s lien, by counterclaim or cross action, by
    the enforcement of any right under the Credit Documents, or otherwise) which
    is applicable to the payment of the principal of, or interest on, the Revolving
    Loans, Unpaid Drawings or Fees, of a sum which with respect to the related
    sum or sums received by other Lenders is in a greater proportion than the
    total of such Obligation then owed and due to such Lender bears to the total
    of such Obligation then owed and due to all of the Lenders immediately prior
    to such receipt, then such Lender receiving such excess payment shall purchase
    for cash without recourse or warranty from the other Lenders an interest
    in the Obligations of the respective Borrower to such Lenders in such amount
    as shall result in a proportional participation by all of the Lenders in
    such amount, provided that
    if all or any portion of such excess amount is thereafter recovered from
    such Lender, such purchase shall be rescinded and the purchase price restored
    to the extent of such recovery, but without interest.

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  12.07   Calculations;
    Computations.   (a)   The
    financial statements to be furnished to the Lenders pursuant hereto shall
    be made and prepared in accordance with GAAP or SAP, as the case may be, consistently
    applied throughout the periods involved (except as set forth in the notes
    thereto or as otherwise disclosed in writing by the Borrowers to the Lenders).
    In addition, except as otherwise specifically provided herein, all computations
    determining compliance with Section 8, including definitions used therein,
    shall utilize accounting principles and policies in effect from time to time;
    provided that (i) if any such accounting principle or policy (whether
    GAAP or SAP or both) shall change after the Effective Date, the Borrowers
    shall give reasonable notice thereof to the Administrative Agent and each
    of the Lenders and if within 30 days following such notice any Borrower, the
    Administrative Agent or the Required Lenders shall elect by giving written
    notice of such election to the other parties hereto, such computations shall
    not give effect to such change unless and until this Agreement shall be amended
    pursuant to Section 12.11 to give effect to such change, and (ii) if at any
    time the computations determining compliance with Section 8 utilize accounting
    principles different from those utilized in the financial statements then
    being furnished to the Lenders pursuant to Section 7.01, such financial statements
    shall be accompanied by reconciliation work-sheets. 

  (b)   All
    computations of interest on Revolving Loans and Fees hereunder shall be made
    on the actual number of days elapsed over (i) a year of 365/366 days for interest
    on Revolving Loans maintained as Base Rate Loans when the Base Rate is based
    on the Prime Lending Rate and (ii) a year of 360 days in all cases other than
    that set forth in the preceding clause (i).

   12.08   GOVERNING
    LAW; SUBMISSION TO JURISDICTION; VENUE.   (a)   THIS
    AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF
    THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH
    AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING
    WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT
    IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
    DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
    BORROWER AND EACH LENDER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
    OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
    COURTS. EACH BORROWER AND EACH LENDER HEREBY FURTHER IRREVOCABLY WAIVES ANY
    CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER SUCH BORROWER OR SUCH LENDER,
    AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING

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 WITH
      RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF
      THE AFORESAID COURTS, THAT ANY SUCH COURT LACKS JURISDICTION OVER SUCH
      BORROWER OR SUCH LENDER. EACH BORROWER AND EACH LENDER FURTHER IRREVOCABLY
      CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS
      IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED
      OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH BORROWER OR SUCH LENDER, AS
      THE CASE MAY BE, AT ITS ADDRESS FOR NOTICES PURSUANT TO SECTION 12.03,
      SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH BORROWER
      AND EACH LENDER, AS THE CASE MAY BE, HEREBY IRREVOCABLY WAIVES ANY OBJECTION
      TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT
      TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING HEREUNDER OR UNDER ANY OTHER
      CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE.
      NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY
      LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
      LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST EACH BORROWER IN ANY OTHER
  JURISDICTION.

  (b)   EACH
        BORROWER AND EACH LENDER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
        IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID
        ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
        OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE
        (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
        OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT
    IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. 

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

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

  12.11   Amendment
    or Waiver.   Neither this Agreement nor any other Credit Document (other than the Security
    Documents) nor any terms hereof or thereof may be changed, waived, discharged
    or terminated unless such change, waiver, discharge or termination is in writing
    signed by each Borrower and the Required Lenders, provided that no
    such change, waiver, discharge or termination shall, without the consent of
    each Lender (other than a Defaulting Lender) directly affected thereby, (i)
    extend the scheduled final maturity of any Revolving Loan or Note, or extend
    the required payment date of a reimbursement obligation in 

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 respect of
  any Letter of Credit, or extend the Commitment Expiration Date, or extend the
  stated expiration date of any Letter of Credit beyond the date occurring one
  year after the Commitment Expiration Date, or reduce the rate or extend the
  time of payment of interest on any Revolving Loan or Note (except in connection
  with the waiver of applicability of any post-default increase in interest rates),
  or reduce the principal amount of any Revolving Loan or Note, or reduce the
  amount or extend the time of payment of any Fee (it being understood that any
  amendment or modification to the financial definitions in this Agreement or
  to Section 12.07(a) shall not constitute a reduction in the rate of interest
  or reduction in the amount of Fees for purposes of this clause (i)), (ii) except
  as set forth in Section 1.15 or Section 1.16, increase the Commitment of any
  Lender over the amount thereof then in effect (it being understood that a waiver
  of any Default or Event of Default or of a mandatory reduction in the Total
  Commitment shall not constitute a change in the terms of any Commitment of any
  Lender), (iii) amend, modify or waive any provision of this Section 12.11 (except
  for technical amendments with respect to additional extensions of credit pursuant
  to this Agreement which afford the protections to such additional extensions
  of credit of the type provided to the Revolving Loans and the Commitments on
  the Effective Date), (iv) reduce any percentage specified in, or otherwise modify,
  the definition of Required Lenders (it being understood that (A) the Additional
  Tranche 1 Commitments
  (and the additional Tranche 1 Revolving Loans incurred in connection therewith),
  (B) the Additional Tranche 2 Commitments (and the additional Tranche 2 Revolving
  Loans incurred in connection therewith) and (C) with the consent of the Required
  Lenders, other additional extensions of credit pursuant to this Agreement, in
  each case, may be included in the determination of the Required Lenders on substantially
  the same basis as the extensions of Revolving Loans and Commitments are included
  on the Effective Date), (v) release the Parent Borrower from its obligations
  under the Parent Borrower Guaranty, or (vi) consent to the assignment or transfer
  by any Borrower of any of its rights and obligations under this Agreement; provided
  further, that (A) no such change, waiver, discharge or termination shall
  (i) release all or substantially all of the Collateral (except as expressly
  provided in the Credit Documents) from the Liens under all of the Security Documents
  without the consent of each Tranche 1 Lender, (ii) modify the definitions in
  Section 10 of “Advance Rates”, “Borrowing Base” or “Eligible
  Securities” without the consent of the Majority Tranche 1 Lenders or (iii)
  reduce any percentage specified in, or otherwise modify, the definition of Majority
  Tranche 1 Lenders (it being understood that the Additional Tranche 1 Commitments
  (and the additional Tranche 1 Revolving Loans incurred in connection therewith)
  and, with the consent of the Majority Tranche 1 Lenders, other additional extensions
  of credit pursuant to this Agreement, in each case, may be included in the determination
  of the Majority Tranche 1 Lenders on substantially the same basis as the extensions
  of Tranche 1 Revolving Loans and Tranche 1 Commitments are included on the Effective
  Date) and (B) no Security Document may be changed, waived, discharged or terminated
  unless each such change, waiver, discharge or termination is in writing signed
  by each Borrower and the Majority Tranche 1 Lenders. No provision of Section
  11 or any other provision relating to the rights and/or obligations of the Administrative
  Agent may be amended without the consent of the Administrative Agent. No provision
  of Section 2 or any other provision relating to the rights and/or obligations
  of the Issuing Agent may be amended without the consent of the Issuing Agent.
  

   12.12   
    Survival.   All indemnities set forth herein including, without limitation, in Section
    1.10, 1.11, 2.04, 4.04, 11.07 or 12.01 shall survive the execution and delivery
    of this Agreement
    and the making of the Revolving Loans, the repayment of the Obligations and
    the termination of the Total Commitment.

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   12.13   
    Domicile
    of Revolving Loans.   Each Lender may transfer and carry its Revolving Loans at, to or for the account
    of any branch, office, Subsidiary or affiliate of such Lender. Notwithstanding
    anything to the contrary contained herein, to the extent that a transfer of
    Revolving Loans pursuant to this Section 12.13 would, at the time of such
    transfer, result in increased costs under Section 1.10, 1.11, 2.04 or 4.04
    from those being charged by the respective Lender prior to such transfer,
    then the Parent Borrower shall not be obligated to pay such increased costs
    (although the Parent Borrower shall be obligated to pay any other increased
    costs of the type described above resulting from changes after the date of
    the respective transfer). 

   12.14   
    Confidentiality.   (a)   Each Lender shall (i) hold all non-public information (including, without
    limitation, all financial projections and analyses) furnished by any Borrower
    in connection with such Lender’s evaluation of whether to become a Lender
    hereunder or obtained by such Lender pursuant to the requirements of this
    Agreement (“Confidential Information”) confidential, (ii) use Confidential
    Information only for purposes related to this Agreement and its position as
    a Lender hereunder and (iii) not disclose such Confidential Information other
    than as provided herein; provided that any Lender and/or its affiliates
    may disclose any such Confidential Information (A) as has become generally
    available to the public other than as a result of disclosure in violation
    of this Section 12.14, (B) as has become available to such Lender or any such
    affiliate on a non-confidential basis from a source other than the Borrowers
    and their respective affiliates, provided that the source is not known
    by such Lender to be prohibited from transmitting such information to such
    Lender by a contractual, legal or fiduciary obligation, (C) as may be required
    or appropriate in any report, statement or testimony submitted to any municipal,
    state or Federal regulatory body having or claiming to have jurisdiction over
    such Lender and/or its affiliates, (D) as may be required or appropriate in
    respect to any summons or subpoena or in connection with any litigation or
    other judicial process (it being understood that, to the extent reasonably
    practicable under the circumstances, each Borrower shall be given prior notice
    and an opportunity to contest any proposed disclosure pursuant to this clause
    (D)), (E) in order to comply with any law, order, regulation or ruling applicable
    to such Lender and/or its affiliates, and (F) to any permitted prospective
    or actual syndicate member or participant in any Revolving Loans, provided
    that such prospective or actual syndicate member or participant agrees with
    the respective assigning Lender to be bound by the provisions of this Section
    12.14. The provisions of this Section 12.14 shall survive any termination
    of this Agreement. 

 (b)    Notwithstanding
    anything herein to the contrary, any Lender (and any employee, representative
    or other agent of such Lender) may disclose to any and all persons, without
    limitation of any kind, such Lender’s U.S. federal income tax treatment
    and the U.S. federal income tax structure of the transactions contemplated
    hereby relating to such Lender and all materials of any kind (including opinions
    or other tax analyses) that are provided to it relating to such tax treatment
    and tax structure. However, no disclosure of any information relating to
    such tax treatment or tax structure may be made to the extent nondisclosure
    is reasonably necessary in order to comply with applicable securities laws.

   12.15   
    WAIVER
    OF JURY TRIAL.   EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT
    TO A TRIAL BY JURY IN ANY
    ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT,
    THE CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 
    

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 12.16   
  Register.   Each Borrower hereby designates the Administrative Agent to serve as its agent,
  solely for purposes of this Section 12.16, to maintain a register (the “Register”)
  on which it will record the Commitments from time to time of each of the Lenders,
  the Revolving Loans made by each of the Lenders and each repayment in respect
  of the principal amount of the Revolving Loans of each Lender. Failure to make
  any such recordation, or any error in such recordation shall not affect the
  obligations any Borrower in respect of such Revolving Loans. With respect to
  any Lender, the transfer of the Commitments of such Lender and the rights to
  the principal of, and interest on, any Revolving Loan made pursuant to such
  Commitments shall not be effective until such transfer is recorded on the Register
  maintained by the Administrative Agent with respect to ownership of such Commitments
  and Revolving Loans and prior to such recordation all amounts owing to the transferor
  with respect to such Commitments and Revolving Loans shall remain owing to the
  transferor. The registration of assignment or transfer of all or part of any
  Commitments and any Revolving Loans shall be recorded by the Administrative
  Agent on the Register only upon the acceptance by the Administrative Agent of
  a properly executed and delivered Assignment Agreement pursuant to Section 12.04(b).
  Coincident with the delivery of such an Assignment Agreement to the Administrative
  Agent for acceptance and registration of assignment or transfer of all or part
  of a Revolving Loan, or as soon thereafter as practicable, the assigning or
  transferor Lender shall surrender the Note evidencing such Revolving Loan, and
  thereupon one or more new Notes in the same aggregate principal amount shall
  be issued to the assigning or transferor Lender and/or the new Lender. Each
  Borrower agrees to indemnify the Administrative Agent from and against any and
  all losses, claims, damages and liabilities of whatsoever nature which may be
  imposed on, asserted against or incurred by the Administrative Agent in performing
  its duties under this Section 12.16 (but excluding any such losses, liabilities,
  claims, damages or expenses to the extent incurred by reason of the gross negligence
  or willful misconduct of the Administrative Agent (as determined by a court
  of competent jurisdiction in a final and non-appealable decision)). 

 12.17   
  USA
  Patriot Act.   Each Lender hereby notifies each Borrower that, pursuant to the requirements
  of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October
  26, 2001)) (the “Patriot Act”), it is required to obtain, verify and
  record information that identifies each Borrower, which information includes
  the name and address of each Borrower and other information that will allow
  such Lender to identify each Borrower in accordance with the Patriot Act.

   SECTION
    13.    Parent
    Borrower Guaranty.

 13.01   
  The
  Guaranty.   In order to induce the Lenders to enter into this Agreement and to extend credit
  hereunder and in recognition of the direct benefits to be received by the Parent
  Borrower from the proceeds of the Revolving Loans and the issuance of the Letters
  of Credit, the Parent Borrower hereby agrees with the Lenders as follows: the
  Parent Borrower hereby unconditionally and irrevocably guarantees, as primary
  obligor and not merely as surety, the full and prompt payment when due, whether
  upon maturity, acceleration or otherwise, of any 

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 and all of
  the Parent Borrower Guaranteed Obligations of each Designated Subsidiary Borrower
  to the Guaranteed Creditors. If any or all of the Parent Borrower Guaranteed
  Obligations of any Designated Subsidiary Borrower to the Guaranteed Creditors
  becomes due and payable hereunder, the Parent Borrower unconditionally promises
  to pay such indebtedness to the Guaranteed Creditors, or order, on demand, together
  with any and all expenses which may be incurred by the Guaranteed Creditors
  in collecting any of the Parent Borrower Guaranteed Obligations. This Parent
  Borrower Guaranty is a guaranty of payment and not of collection. If a claim
  is ever made upon any Guaranteed Creditor for repayment or recovery of any amount
  or amounts received in payment or on account of any of the Parent Borrower Guaranteed
  Obligations and any of the aforesaid payees repays all or part of said amount
  by reason of (i) any judgment, decree or order of any court or administrative
  body having jurisdiction over such payee or any of its property or (ii) any
  settlement or compromise of any such claim effected by such payee with any such
  claimant, then and in such event the Parent Borrower agrees that any such judgment,
  decree, order, settlement or compromise shall be binding upon the Parent Borrower,
  notwithstanding any revocation of this Parent Borrower Guaranty or any other
  instrument evidencing any liability of any Designated Subsidiary Borrower, and
  the Parent Borrower shall be and remain liable to the aforesaid payees hereunder
  for the amount so repaid or recovered to the same extent as if such amount had
  never originally been received by any such payee.

 13.02   
  Bankruptcy.   Additionally, the Parent Borrower unconditionally and irrevocably guarantees
  the payment of any and all of the Parent Borrower Guaranteed Obligations of
  each Designated Subsidiary Borrower hereunder to the Guaranteed Creditors whether
  or not due or payable by any Designated Subsidiary Borrower upon the occurrence
  of any of the events specified in Section 9.05 with respect to such Designated
  Subsidiary Borrower, and unconditionally promises to pay such indebtedness to
  the Guaranteed Creditors, or order, on demand, in lawful money of the United
  States. 

 13.03   
  Nature
  of Liability.   The liability of the Parent Borrower hereunder is exclusive and independent
  of any security for or other guaranty of the Parent Borrower Guaranteed Obligations
  of any Designated Subsidiary Borrower whether executed by the Parent Borrower,
  any other guarantor or by any other party, and the liability of the Parent Borrower
  hereunder is not affected or impaired by (a) any direction as to application
  of payment by each Designated Subsidiary Borrower or by any other party (other
  than a direction by the Guaranteed Creditor receiving such payment), or (b)
  any other continuing or other guaranty, undertaking or maximum liability of
  a guarantor or of any other party as to the Parent Borrower Guaranteed Obligations
  of each Designated Subsidiary Borrower, or (c) any payment on or in reduction
  of any such other guaranty or undertaking, or (d) any dissolution, termination
  or increase, decrease or change in personnel by any Designated Subsidiary Borrower,
  or (e) any payment made to the Guaranteed Creditors on the Parent Borrower Guaranteed
  Obligations which any such Guaranteed Creditor repays to any Designated Subsidiary
  Borrower pursuant to court order in any bankruptcy, reorganization, arrangement,
  moratorium or other debtor relief proceeding, and the Parent Borrower waives
  any right to the deferral or modification of its obligations hereunder by reason
  of any such proceeding or (f) any action or inaction of the type described in
  Section 13.05. 

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 13.04   
  Independent
  Obligation.   The obligations of the Parent Borrower under this Section 13 are independent
  of the obligations of any other guarantor, any other party or any Designated
  Subsidiary Borrower, and a separate action or actions may be brought and prosecuted
  against the Parent Borrower whether or not action is brought against any other
  guarantor, any other party or any Designated Subsidiary Borrower and whether
  or not any other guarantor, any other party or any Designated Subsidiary Borrower
  be joined in any such action or actions. The Parent Borrower waives, to the
  full extent permitted by law, the benefit of any statute of limitations affecting
  its liability under this Section 13 or the enforcement thereof. Any payment
  by any Designated Subsidiary Borrower or other circumstance which operates to
  toll any statute of limitations as to any Designated Subsidiary Borrower shall
  operate to toll the statute of limitations as to the Parent Borrower. 

 13.05   
  Authorization.   The obligations of the Parent Borrower under this Section 13 shall be unconditional
  and absolute and, without limiting the generality of the foregoing, shall not
  be released, discharged or otherwise affected by any action taken by any Guaranteed
  Creditor to: 

 
 (a)    change
    the manner, place or terms of payment of, and/or change or extend the time
    of payment of, renew, increase, accelerate or alter, any of the Parent Borrower
    Guaranteed Obligations (including any increase or decrease in the rate of
    interest thereon), any security therefor, or any liability incurred directly
    or indirectly in respect thereof, and the Parent Borrower Guaranty herein
    made shall apply to the Parent Borrower Guaranteed Obligations as so changed,
   extended, renewed or altered;

 

  
 (b)    take
    and hold security for the payment of the Parent Borrower Guaranteed Obligations
    and sell, exchange, release, impair, surrender, realize upon or otherwise
    deal with in any manner and in any order any property by whomsoever at any
    time pledged or mortgaged to secure, or howsoever securing, the Parent Borrower
    Guaranteed Obligations or any liabilities (including any of those hereunder)
    incurred directly or indirectly in respect thereof or hereof, and/or any
    offset there against;

  

 (c)    exercise
    or refrain from exercising any rights against any Designated Subsidiary Borrower
  or others or otherwise act or refrain from acting;

 (d)    release
    or substitute any one or more endorsers, guarantors, any Designated Subsidiary
  Borrower or other obligors;

 (e)    settle
    or compromise any of the Parent Borrower Guaranteed Obligations, any security
    therefor or any liability (including any of those hereunder) incurred directly
    or indirectly in respect thereof or hereof, and may subordinate the payment
    of all or any part thereof to the payment of any liability (whether due or
    not) of any Designated Subsidiary Borrower to its creditors other than the
  Guaranteed Creditors;

 (f)    apply
    any sums by whomsoever paid or howsoever realized to any liability or liabilities
    of any Designated Subsidiary Borrower to the Guaranteed Creditors regardless
    of what liability or liabilities of any Designated Subsidiary Borrower remain
  unpaid;

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 (g)   consent
to or waive any breach of, or any act, omission or default under, this Agreement
or any other Credit Document or any of the instruments or agreements referred
to herein or therein, or otherwise amend, modify or supplement this Agreement,
any other Credit Document or any of such other instruments or agreements; and/or

 (h)   take
any other action which would, under otherwise applicable principles of common
law, give rise to a legal or equitable discharge of the Parent Borrower from
its liabilities under this Parent Borrower Guaranty.

13.06    Reliance.   It is not necessary for the Guaranteed Creditors to inquire into the capacity or powers of any Designated Subsidiary Borrower or the officers, directors, partners or agents acting or purporting to act on their behalf, and any Parent Borrower Guaranteed Obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder. 

13.07    Subordination.   Any indebtedness of any Designated Subsidiary Borrower now or hereafter owing to the Parent Borrower is hereby subordinated to the Parent Borrower Guaranteed Obligations of any Designated Subsidiary Borrower owing to the Guaranteed Creditors; and if the Administrative Agent so requests at a time when an Event of Default exists, no Designated Subsidiary Borrower shall make, or be permitted to make, any payment to the Parent Borrower in respect of such indebtedness owed to the Parent Borrower, but without affecting or impairing in any manner the liability of the Parent Borrower under the other provisions of this Parent Borrower Guaranty. Prior to the transfer by t
he Parent Borrower of any note or negotiable instrument evidencing any of the indebtedness of any Designated Subsidiary Borrower to the Parent Borrower, the Parent Borrower shall mark such note or negotiable instrument with a legend that the same is subject to this subordination.  Without limiting the generality of the foregoing, the Parent Borrower hereby agrees with the Guaranteed Creditors that it will not exercise any right of subrogation which it may at any time otherwise have as a result of this Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or otherwise) until all Parent Borrower Guaranteed Obligations have been irrevocably paid in full in cash. 

13.08    Waiver.   
      (a)   The Parent Borrower waives any right (except as shall be required by
      applicable statute and cannot be waived) to require any Guaranteed Creditor
      to (i) proceed against each Designated Subsidiary Borrower, any other guarantor
      or any other party, (ii) proceed against or exhaust any security held from
      any Designated Subsidiary Borrower, any other guarantor or any other party
      or (iii) pursue any other remedy in any Guaranteed Creditor’s power
      whatsoever. The Parent Borrower waives any defense based on or arising
      out of any defense of any Designated Subsidiary Borrower, any other guarantor
      or any other party, other than payment in full of the Parent Borrower Guaranteed
      Obligations, based on or arising out of the disability of each Designated
      Subsidiary Borrower, any other guarantor or any other party, or the unenforceability
      of the Parent Borrower Guaranteed Obligations or any part thereof from
      any cause, or the cessation from any cause of the liability of any Designated
      Subsidiary Borrower other than payment in full of the Parent Borrower Guaranteed
      Obligations. The Guaranteed Creditors may, at their election, foreclose
      on any security held by the Administrative Agent or any other Guaranteed
      Creditor by one or more judicial or nonjudicial sales, whether or not every
      aspect of any such sale is commercially reasonable (to the extent such
      sale is permitted by applicable law),
or exercise any other right or remedy the Guaranteed Creditors may have against
any Designated Subsidiary Borrower or any other party, or any security, without
affecting or impairing in any way the liability of the Parent Borrower hereunder
except to the extent the Parent Borrower Guaranteed Obligations have been paid.
The Parent Borrower waives any defense arising out of any such election by the
Guaranteed Creditors, even though such election operates to impair or extinguish
any right of reimbursement or subrogation or other right or remedy of the Parent
Borrower against any Designated Subsidiary Borrower or any other party or any
security. 

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 (b)    The
Parent Borrower waives all presentments, demands for performance, protests and
notices, including, without limitation, notices of nonperformance, notices of
protest, notices of dishonor, notices of acceptance of this Parent Borrower Guaranty,
and notices of the existence, creation or incurring of new or additional Parent
Borrower Guaranteed Obligations. The Parent Borrower assumes all responsibility
for being and keeping itself informed of each Designated Subsidiary Borrower’s
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Parent Borrower Guaranteed Obligations and the nature,
scope and extent of the risks which the Parent Borrower assumes and incurs hereunder,
and agrees that the Guaranteed Creditors shall have no duty to advise the Parent
Borrower of information known to them regarding such circumstances or risks.

 (c)   The
Parent Borrower warrants and agrees that each of the waivers set forth above
in this Section 13 is made with full knowledge of its significance and consequences,
and such waivers shall be effective to the maximum extent permitted by law.

*       *       *

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 IN WITNESS
    WHEREOF, each of the parties hereto has caused a counterpart of this Agreement
  to be duly executed and delivered as of the date first above written.

	Address:	 	 	 	 	 
	Wellesley
    House

    90 Pitts Bay Road

    Pembroke HM 08

    Bermuda	 	ENDURANCE
         SPECIALTY HOLDINGS LTD.

            	 
	 	 	 	 	 	 
	 	 	By:	/s/
    John Del Col
	Attention:   James
    Kroner    	 	 	
	 
	Telephone:   +1
    (441) 278-0430 	 	Name: 	John
    Del Col
	Facsimile:      +1
    (441) 278-0401	 	Title: 	General
    Counsel Secretary
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	Wellesley House

    90 Pitts Bay Road

    Pembroke HM 08

    Bermuda	 	ENDURANCE
         SPECIALTY INSURANCE LTD.

             	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	By:	/s/
    John Del Col
	Attention:   James
    Kroner 	 	 	
	 
	Telephone:   +1
      (441) 278-0430
   	 	Name:	John
    Del Col
	Facsimile:      +1
    (441) 278-0401	 	 Title:	General
    Counsel Secretary 
	 	 	 	 	 	 
	 	 	 	 	 	 
	1209 Orange Street	 	ENDURANCE
    U.S. HOLDINGS CORP.	 
	Wilmington, Delaware 19801	 	 	 	 	 
	 	 	 	 	 	 
	 	 	By:	/s/
    Steven Carlsen
	Attention:   Emily
    Canelo, Esq	 	 	
	 
	Telephone:   +1
    (914) 468-8000	 	Name:	Steven
    Carlsen
	Facsimile:      +1
    (914) 997-0331	 	Title:	 President 
	 	 	 	 	 	 
	 	 	 	 	 	 
	7th Floor,
    2 Minster Court

   London, EC3R 7BB

   United Kingdom	 	ENDURANCE
    WORLDWIDE HOLDINGS LIMITED	 
	 	 	 	 	 	 
	 	 	By:	/s/
    Mark Boucher 
	Attention:   Simon
    Minshall	 	 	
	 
	Telephone:   +44
    (0)20 7337 2830	 	Name:	Mark
    Boucher
	Facsimile:      +44
    (0)20 7337 2900	 	Title:	Chief
    Executive Officer 
	 	 	 	 
	 	 	 	 

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	7th Floor,
      2 Minster Court

London, EC3R 7BB

United Kingdom 	 	ENDURANCE
    WORLDWIDE INSURANCE LIMITED 	 
	 	 	 	 	 	 
	 	 	By:	/s/
    Mark Boucher
	Attention:   Simon
    Minshall	 	 	
	 
	Telephone:   +44
    (0)20 7337 2830	 	Name: 	Mark
    Boucher
	Facsimile:      +44
    (0)20 7337 2900	 	Title:	Chief
    Executive Officer

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	 	 	JPMORGAN CHASE BANK,

         as Administrative Agent and Issuing Agent     
	 
	 	 	 	 	 	 
	 	 	By:	/s/
    Helen L. Newcomb
	 	 	 	
	 
	 	 	Name:	Helen
    L. Newcomb
	 	 	Title: 	Vice
    President

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	 	WACHOVIA
        BANK, NATIONAL ASSOCIATION 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	/s/
        William R. Goley
	 	 	

    	 
	 	Name:	William
        R. Goley	 
	 	Title:	Director	 

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	 	BANK
        OF AMERICA, N.A.
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	By:	/s/
        Debra Basier 
	 	 	

    	 
	 	Name:	Debra
        Basier 	 
	 	Title:	Principal	 

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	 	BARCLAYS
        BANK PLC
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	By:	/s/
        Richard Askey
	 	 	

    	 
	 	Name:	Richard
        Askey	 
	 	Title:	Relationship
        Director	 

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	 	THE
        BANK OF NEW YORK 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	By:	/s/
        Scott Schaffer
	 	 	

    	 
	 	Name:	Scott
        Schaffer	 
	 	Title:	Vice
        President	 

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	 	CALYON
        NEW YORK BRANCH
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	By:	/s/
        Sebastian Rocco
	 	 	

    	 
	 	Name:	Sebastian
        Rocco	 
	 	Title:	Managing
        Director	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/
        Kenneth Ricciardi
	 	 	
	 
	 	Name:	Kenneth
        Ricciardi	 
	 	Title:	Director	 

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	 	 ING BANK
      N.V., LONDON BRANCH 
	 	 
	 	By: 	/s/
          Mike Sharman
    
	 	 	

	 	 Name:
        Mike Sharman

      Title: Managing Director 
	 	 
	 	By:	/s/
          Paul Galpin
    
	 	 	

	 	 Name:
        Paul Galpin

      Title: Director  

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	 	COMERICA
      BANK  
	 	 
	 	By:	/s/
    Martin G. Ellis
	 	 	

	 	 Name: Martin G. Ellis

      Title: First Vice President 

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	 	 DEUTSCHE
      BANK AG NEW YORK

           BRANCH
       
	 	 
	 	By:	/s/
    Ruth Leung
	 	 	

	 	 

      Name: Ruth Leung

      Title: Director  
	 	 
	 	By: 	/s/
    Nicolas Rueda
	 	 	

	 	 Name:
        Nicolas Rueda

      Title: Vice President  

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	 	HSBC BANK
      USA, NATIONAL ASSOCIATION
	 	 
	 	By:   	/s/
          David W. Nelson
    
	 	 	

	 	 Name:
        David W. Nelson

      Title: Managing Director  

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	 	LLOYDS
      TSB BANK PLC 
	 	 
	 	By: 	/s/
    Michael J. Gilligan
	 	 	

	 	Name: Michael J. Gilligan Title: Director,

      Financial Institutions, USA 6311
	 	 
	 	By:	/s/
    James M. Rudd
	 	 	

	 	 Name:
        James M. Rudd

      Title: Vice President, Financial Institutions,

      USA R091  

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	 	THE
    BANK OF NOVA SCOTIA
	 	 
	 	 
	 	By: 	/s/ T.S.
    Meller
	 	 	

	 	Name:
    T.S Meller
	 	Title:
    Managing Director 

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	 	THE
    ROYAL BANK OF SCOTLAND PLC 
	 	 
	 	 
	 	By:	/s/ Richard
    Kerton
	 	 	

	 	Name:
    Richard Kerton
	 	Title:
    Relationship Director 

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	 	COMMERZBANK
    AG, NEW YORK AND GRAND
    CAYMAN BRANCHES
	 	 
	 	 
	 	By:	/s/ Joseph
    J. Hayes
	 	 	

	 	Name:
    Joseph J. Hayes
	 	Title:
    Vice President
	 	 
	 	By: 	/s/ Maureen
    Carson
	 	 	

	 	Name:
    Maureen Carson
	 	Title:
    Assistant Treasurer

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	 	THE
    BANK OF N.T. BUTTERFIELD & SON LIMITED
	 	 
	 	 
	 	By:	 /s/
    Jonathan Raynor
	 	 	

	 	Name:
    Jonathan Raynor
	 	Title:
    Vice President 
	 	 
	 	By:	 /s/
    Michael McWatt
	 	 	

	 	Name:
    Michael McWatt
	 	Title:
    Senior Vice President

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	 	CREDIT
    SUISSE FIRST BOSTON, ACTING THROUGH ITS CAYMAN ISLANDS BRANCH 
	 	 
	 	 
	 	By:
    /s/ Karl Studer
	 	 	

	 	Name:
    Karl Studer
	 	Title:
    Director 
	 	 
	 	By:
    /s/ David Dodd
	 	 	

	 	Name:
    David Dodd
	 	Title:
    Associate

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	 	 GOLDMAN
      SACHS CREDIT PARTNERS L.P.
	 	 
	 	 
	 	By:
      /s/ William W. Archer
	 	 	

	 	Name:
      William W. Archer

      Title: Managing Director 

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	 	 MERRILL
      LYNCH BANK USA 
	 	 
	 	 
	 	By:
      /s/ Marjolien Slappendel
	 	 	

	 	Name:
      Marjolien Slappendel

      Title: Vice President 

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 ANNEX
  I

 LIST
  OF LENDERS AND COMMITMENTS

 

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 ANNEX
  II

 LENDER
  ADDRESSES

  

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 ANNEX
  III

 SUBSIDIARIES

  

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 ANNEX
  IV

 CAPITALIZATION

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 ANNEX
  V

 INDEBTEDNESS

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 ANNEX
  VI

 [INTENTIONALLY
  DELETED]

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 ANNEX
  VII

 LIENS

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 ANNEX
  VIII

 EXISTING
  LETTERS OF CREDIT

 PART
  A. EXISTING TRANCHE 1 LETTERS OF CREDIT 

 PART
  B. EXISTING TRANCHE 2 LETTERS OF CREDIT 

TABLE OF CONTENTS

	 	 	 	Page
	 	 	 	 
	SECTION
      1. Amount and Terms of Credit.	1
	 	 	 	 
	 	1.01	Revolving
      Loans	1
	 	1.02	Minimum
      Amount of Each Borrowing; Maximum Number of Borrowings	2
	 	1.03	Notice
      of Borrowing	2
	 	1.04	Disbursement
      of Funds	3
	 	1.05	Notes	4
	 	1.06	Conversions	5
	 	1.07	Pro
      Rata Borrowings	6
	 	1.08	Interest	6
	 	1.09	Interest
      Periods	7
	 	1.10	Increased
      Costs, Illegality, etc.	8
	 	1.11	Compensation	10
	 	1.12	Change
      of Lending Office	10
	 	1.13	Replacement
      of Lenders	10
	 	1.14	Designated
      Subsidiary Borrowers	12
	 	1.15	Additional
      Tranche 1 Commitments	12
	 	1.16	Additional
      Tranche 2 Commitments	14
	 	1.17	Additional
      Tranche 3 Commitments	16
	 	 	 	 
	SECTION
      2A.Tranche 1 Letters of Credit.	18
	 	 	 	 
	 	2A.01	Tranche
      1 Letters of Credit	18
	 	2A.02	Tranche
      1 Letter of Credit Requests	21
	 	2A.03	Agreement
      to Repay Tranche 1 Letter of Credit Drawings	21
	 	2A.04	Increased
      Costs	22
	 	2A.05	Tranche
      1 Letter of Credit Expiration Extensions	22
	 	2A.06	Changes
      to Stated Amount	23
	 	2A.07	Representations
      and Warranties of Tranche 1 Lenders	23
	 	2A.08	Existing
      Tranche 1 Letters of Credit	23
	 	 	 	 
	SECTION
      2B.Tranche 2 Letters of Credit.	26
	 	 	 	 
	 	2B.01	Tranche
      2 Letters of Credit	26
	 	2B.02	Tranche
      2 Letter of Credit Requests	28
	 	2B.03	Agreement
      to Repay Tranche 2 Letter of Credit Drawings	28
	 	2B.04	Increased
      Costs	29
	 	2B.05	Tranche
      2 Letter of Credit Expiration Extensions	30
	 	2B.06	Changes
      to Stated Amount	30
	 	2B.07	Representations
      and Warranties of Tranche 2 Lenders	30
	 	2B.08	Existing
      Tranche 2 Letters of Credit	30
	 	 	 	 
	SECTION
      3. Fees; Commitments	33
	 	 	 	 
	 	3.01	Fees	33
	 	3.02	Voluntary
      Reduction of Commitments	35
	 	3.03	Mandatory
      Reduction of Commitments	36
	 	 	 	 
	SECTION
      4. Payments.	36

i

	 	 	 	Page
	 	 	 	 
	 	4.01	Voluntary
      Prepayments	36
	 	4.02	Mandatory
      Repayments	37
	 	4.03	Method
      and Place of Payment	39
	 	4.04	Net
      Payments	39
	 	 	 	 
	SECTION
      5. Conditions Precedent.	42
	 	 	 	 
	 	5.01	Conditions
      Precedent to the Effective Date	42
	 	5.02	Conditions
      Precedent to All Revolving Loans and Letters of Credit	44
	 	 	 	 
	SECTION
      6. Representations, Warranties and Agreements	46
	 	 	 	 
	 	6.01	Corporate
      Status	46
	 	6.02	Corporate
      Power and Authority	46
	 	6.03	No
      Contravention of Laws, Agreements or Organizational Documents	46
	 	6.04	Litigation
      and Contingent Liabilities	47
	 	6.05	Use
      of Proceeds; Margin Regulations	47
	 	6.06	Approvals	47
	 	6.07	Investment
      Company Act	47
	 	6.08	Public
      Utility Holding Company Act	47
	 	6.09	True
      and Complete Disclosure; Projections and Assumptions	47
	 	6.10	Financial
      Condition; Financial Statements	48
	 	6.11	Tax
      Returns and Payments	48
	 	6.12	Compliance
      with ERISA	48
	 	6.13	Subsidiaries	49
	 	6.14	Capitalization	49
	 	6.15	Indebtedness	50
	 	6.16	Compliance
      with Statutes, etc	50
	 	6.17	Insurance
      Licenses	50
	 	6.18	Security
      Documents	50
	 	 	 	 
	SECTION
      7. Affirmative Covenants	50
	 	 	 	 
	 	7.01	Information
      Covenants	51
	 	7.02	Books,
      Records and Inspections	53
	 	7.03	Insurance	53
	 	7.04	Payment
      of Taxes	53
	 	7.05	Maintenance
      of Existence	53
	 	7.06	Compliance
      with Statutes, etc	54
	 	7.07	ERISA	54
	 	7.08	Maintenance
      of Property	55
	 	7.09	Maintenance
      of Licenses and Permits	55
	 	7.10	Claims
      Paying Ratings	55
	 	7.11	End
      of Fiscal Years; Fiscal Quarters	55
	 	7.12	Borrowing
      Base Requirement	55
	 	7.13	Further
      Assurances	55
	 	 	 	 
	SECTION
      8. Negative Covenants	55
	 	 	 	 
	 	8.01	Changes
      in Business	56
	 	 8.02	Consolidations,
      Amalgamations, Mergers, Sales of Assets and Acquisitions	56
	 	8.03	Liens	56
	 	8.04	Indebtedness	58

ii

	 	 	 	Page
	 	 	 	 
	 	8.05	Issuance of Stock	58
	 	8.06	Dissolution	58
	 	8.07	Restricted Payments	58
	 	8.08	Transactions with Affiliates	59
	 	8.09	Maximum Leverage Ratio	59
	 	8.10	Minimum Consolidated Tangible Net Worth	59
	 	8.11	Unencumbered Liquid Assets	59
	 	8.12	Private Act	59
	 	 	 	 
	SECTION 9. Events of Default	59
	 	 	 	 
	 	9.01	Payments	59
	 	9.02	Representations, etc	59
	 	9.03	Covenants	59
	 	9.04	Default Under Other Agreements	60
	 	9.05	Bankruptcy, etc	60
	 	9.06	ERISA	61
	 	9.07	Judgments	61
	 	9.08	Insurance Licenses	61
	 	9.09	Parent Borrower Guaranty	61
	 	9.10	Security Documents	61
	 	9.11	Ownership	61
	 	 	 	 
	SECTION
      10. Definitions	62
	 	 	 	 
	SECTION 11. The Agents.	85
	 	 	 	 
	 	11.01	Appointment	85
	 	11.02	Delegation of Duties	86
	 	11.03	Exculpatory Provisions	86
	 	11.04	Reliance by Agents	86
	 	11.05	Notice of Default	87
	 	11.06	Non-Reliance	87
	 	11.07	Indemnification	87
	 	11.08	The Agents in Their Individual Capacities	88
	 	11.09	Successor Agents	88
	 	 	 	 
	SECTION 12. Miscellaneous	89
	 	 	 	 
	 	12.01	Payment of Expenses, etc	89
	 	12.02	Right of Setoff	89
	 	12.03	Notices	90
	 	12.04	Benefit of Agreement	90
	 	12.05	No Waiver; Remedies Cumulative	92
	 	12.06	Payments Pro Rata	92
	 	12.07	Calculations; Computations	93
	 	12.08	GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE	93
	 	12.09	Counterparts	94
	 	12.10	Headings Descriptive	94
	 	12.11	Amendment or Waiver	94
	 	12.12	Survival	95
	 	12.13	Domicile of Revolving Loans	96
	 	12.14	Confidentiality	96
	 	12.15	WAIVER OF JURY TRIAL	96

iii

	 	 	 	Page
	 	 	 	 
	 	12.16	Register	97
	 	12.17	USA
      Patriot Act	97
	 	 	 	 
	SECTION
      13. Parent Borrower Guaranty.	97
	 	 	 	 
	 	13.01	The
      Guaranty	97
	 	13.02	Bankruptcy	98
	 	13.03	Nature
      of Liability	98
	 	13.04	Independent
      Obligation	99
	 	13.05	Authorization	99
	 	13.06	Reliance	100
	 	13.07	Subordination	100
	 	13.08	Waiver	100
	 	 	 	 
	ANNEX
      I	List
      of Lenders and Commitments	 
	ANNEX
      II	Lender
      Addresses	 
	ANNEX
      III	Subsidiaries	 
	ANNEX
      IV	Capitalization	 
	ANNEX
      V	Indebtedness	 
	ANNEX
      VI	[Intentionally
      Deleted]	 
	ANNEX
      VII	Liens	 
	ANNEX
      VIII	Existing
      Letters of Credit	 
	 	 	 	 
	EXHIBIT
      A	Form
      of Notice of Borrowing	 
	EXHIBIT
      B-1	Form
      of Tranche 1 Note	 
	EXHIBIT
      B-2	Form
      of Tranche 2 Note	 
	EXHIBIT
      B-3	Form
      of Tranche 3 Note	 
	EXHIBIT
      C-1	Form
      of Tranche 1 Letter of Credit Request	 
	EXHIBIT
      C-2	Form
      of Tranche 2 Letter of Credit Request	 
	EXHIBIT
      D	Form
      of Section 4.04(b)(ii) Certificate	 
	EXHIBIT
      E-1	Form
      of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP	 
	EXHIBIT
      E-2	Form
      of Opinion of Appleby Spurling Hunter	 
	EXHIBIT
      E-3	Form
      of Opinion of Ashurst	 
	EXHIBIT
      F	Form
      of Officer’s Certificate	 
	EXHIBIT
      G	Form
      of Assignment Agreement	 
	EXHIBIT
      H	Form
      of DSB Assumption Agreement	 
	EXHIBIT
      I-1	Form
      of Opinion of Counsel to an Additional Designated Subsidiary	 
	 	 	Borrower
      Located in the United States	 
	EXHIBIT
      I-2	Form
      of Opinion of Counsel to an Additional Designated Subsidiary	 
	 	 	Borrower
      Located in Bermuda	 
	EXHIBIT
      I-3	Form
      of Opinion of Counsel to an Additional Designated Subsidiary
	  Borrower Located in England	 
	EXHIBIT
      J-1	Form
      of Additional Tranche 1 Commitment Agreement	 
	EXHIBIT
      J-2	Form
      of Additional Tranche 2 Commitment Agreement	 
	EXHIBIT
      J-3	Form
      of Additional Tranche 3 Commitment Agreement	 
	EXHIBIT
      K	Form
      of Borrowing Base Certificate	 
	EXHIBIT
      L	Form
      of Pledge and Security Agreement	 
	EXHIBIT
      M	Form
      of Existing Lender Agreement	 
	EXHIBIT
      N	Form
      of Account Control Agreement	 

ivPrepared and filed by St Ives Burrups

 Exhibit 10.2

CONFORMED
EXECUTION COPY

	
	
	

 

PLEDGE
    AND SECURITY AGREEMENT

Dated as of August 6, 2004

by and among

ENDURANCE SPECIALTY HOLDINGS LTD.,

VARIOUS DESIGNATED SUBSIDIARY BORROWERS,

THE BANK OF NEW YORK,

as Collateral Agent

THE BANK OF NEW YORK,

as Custodian

and

JPMorgan Chase Bank,

as Administrative Agent

 

	
	
	

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PLEDGE AND SECURITY AGREEMENT (as amended, modified and supplemented and as in effect from time to time, this “Agreement”),
      dated as of August 6, 2004, by and among the undersigned subsidiary Borrowers
      (each, a “Grantor” and, together with any other entity
      that becomes a Grantor hereunder pursuant to Section 10.12 hereof, the “Grantors”)
      The Bank of New York, as Collateral Agent (together with any successor
      Collateral Agent, the “Collateral Agent”), for the benefit of the Secured Creditors
	  (as defined below), The Bank of New York, as Custodian (in such capacity, and together
	  with any successor Custodian, the “Custodian”), and JPMorgan Chase Bank, as Administrative Agent (together with any successor Administrative Agent, the “Administrative Agent”).
      Certain capitalized terms as used herein are defined in Section 1 hereof.
      Except as otherwise defined herein, all capitalized terms used herein and
      defined in the Credit Agreement (as defined below) shall be used herein
      as therein defined. 

W I T N E S S E T H : 

WHEREAS, Endurance Specialty Holdings Ltd. (the “Parent
        Borrower”),
        various Designated Subsidiary Borrowers, the lenders from time to time
        party thereto (the “Lenders”), the Administrative Agent and Wachovia Bank, National Association, as Syndication Agent, have entered into a Credit Agreement, dated as of August 6, 2004 (as amended, modified, supplemented or amended and restated from time to time, the “Credit Agreement”),
        providing for the making of Loans to the Borrowers and the issuance of,
        and participation in, Letters of Credit for the account of the Designated
        Subsidiary Borrowers, all as contemplated therein (the Lenders, the Issuing
        Agent, the Administrative Agent, the Collateral Agent, the Custodian
        and each other agent under the Credit Agreement are herein called the “Secured
        Creditors”); 

WHEREAS, it is a condition precedent to the making of Loans to the Borrowers and the issuance of, and participation in, Letters of Credit for the account of the Designated Subsidiary Borrowers under the Credit Agreement that each Grantor shall have executed and delivered to the Collateral Agent this Agreement; and

WHEREAS, each Grantor will obtain benefits from the incurrence of Loans and/or the issuance of, and participation in, Letters of Credit for their respective accounts under the Credit Agreement and, accordingly, desires to execute this Agreement in order to satisfy the condition described in the preceding paragraph and to induce the Lenders to make Loans to the Borrowers and issue, and/or participate in, Letters of Credit for the account of the Designated Subsidiary Borrowers;

NOW, THEREFORE, in consideration of the benefits accruing to each Grantor, the receipt and sufficiency of which are hereby acknowledged, each Grantor hereby makes the following representations and warranties (solely as to itself and its Subsidiaries) to the Collateral Agent for the benefit of the Secured Creditors and hereby covenants and agrees (solely as to itself and its Subsidiaries) with the Collateral Agent for the benefit of the Secured Creditors as follows:

   Section
        1.   Definitions.   Terms
        defined in the Credit Agreement are used herein as defined therein. In
        addition, as used in this Agreement, the following terms have the following meanings
        (such meanings to be equally applicable to both the singular and plural
        forms of the terms defined): 

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“Account Control Agreement” means
    the account control agreement, dated as of the date of this Agreement, among
    the Custodian, the Grantors from time to time party thereto and the Collateral
    Agent, as amended, modified and supplemented and as in effect from time to
    time.

“Administrative Agent” has
    the meaning provided in the first paragraph of this Agreement, and shall
    include any successor thereto.

“Administrative Agent’s Notice” has the meaning provided
in Section 6.01(a).

“Adverse
        Claim” has
        the meaning assigned to such term in Section 8-102(a)(i) of the UCC. 

“Agency Securities” shall
    mean (i) single-class mortgage participation certificates in book-entry form
    backed by single-family residential mortgage loans, the full and timely payment
    of interest at the applicable certificate rate and the ultimate collection
    of principal of which are guaranteed by the Federal Home Loan Mortgage Corporation
    (excluding REMIC or other multi-class pass-through certificates, collateralized
    mortgage obligations, pass-through certificates backed by adjustable rate
    mortgages, securities paying interest or principal only and similar derivative
    securities); (ii) single-class mortgage pass-through certificates in book-entry
    form backed by single-family residential mortgage loans, the full and timely
    payment of interest at the applicable certificate rate and ultimate collection
    of principal of which are guaranteed by the Federal National Mortgage Association
    (excluding REMIC or other multi-class pass-through certificates, pass-through
    certificates backed by adjustable rate mortgages, collateralized mortgage
    obligations, securities paying interest or principal only and similar derivative
    securities); and (iii) single-class fully modified pass-through certificates
    in book-entry form backed by single-family residential mortgage loans, the
    full and timely payment of principal and interest of which is guaranteed
    by the Government National Mortgage Association (excluding REMIC or other
    multi-class pass-through certificates, collateralized mortgage obligations,
    pass-through certificates backed by adjustable rate mortgages, securities
    paying interest or principal only and similar derivatives securities).

“Agreement” means
      this Pledge and Security Agreement, as amended, modified and supplemented
      and as in effect from time to time. 

“Borrowing Base Report” has the meaning provided in Section
6.01(b).

“Cash” means
immediately available funds in Dollars.

“Clearing
        Corporation” has
        the meaning assigned to such term in Section 8-102(a)(5) of the UCC and
        includes, among other things, DTC. 

  “Close of Business”
    on any given date, means the time of closing of the Federal funds wire in
    New York City on such date, or, with respect to any particular reference herein
    to such term, such earlier time on such date as may be agreed to by the Grantors,
    the Collateral Agent and the Custodian.

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“Collateral” has
the meaning provided in Section 4.01.

“Collateral Accounts” has
    the meaning provided in Section 4.02(a) and shall include any successor accounts.

“Collateral Agent” has
    the meaning provided in the first paragraph of this Agreement, and shall
    include any successor thereto.

“Collateral
        Deposit Accounts” has
        the meaning provided in Section 4.02(a) and shall include any successor
        accounts.

“Collateral Release Request” means
    a duly completed request from any Grantor to the Collateral Agent substantially
    in the form of Exhibit A.

“Collateral Securities Accounts” has
    the meaning provided in Section 4.02(a) and shall include any successor accounts.

“Collateral
        Transfer” means
        a transfer, deposit or delivery of any Property to be included as Collateral
        by or on behalf of any Grantor to the Collateral Agent or the Custodian
        in accordance with Section 4.03. 

“Credit Agreement” has the meaning provided in the recitals
of this Agreement.

“Credit Event” means
    the making of any Tranche 1 Revolving Loan or the issuance of any Tranche
    1 Letter of Credit.

“Credit Transaction” means,
    collectively, all Collateral Transfers, all releases of Collateral pursuant
    to Section 4.04 and the occurrence of any Credit Event.

“Custodian” has
      the meaning provided in the first paragraph of this Agreement and shall
      include any successor thereto. 

“Deposit Account” has
    the meaning assigned to such term in Section 9-102(a)(29) of the UCC.

“Deposit Account Bank” shall mean a “bank” (as
    defined in Section 9-102(a)(8) of the UCC) which maintains a Deposit Account.

“Derivative
        Security” means
        any security evidencing the right to receive payments of principal only
        or interest only with respect to an underlying Instrument or Security
        or otherwise evidencing a right to receive anything but proportionate
        payments of the principal of and interest on any underlying Instrument
        or Security, and any forward or futures contract, put, call, collar,
        option or swap agreement in respect of any Security. 

“DTC” means The Depository Trust Company, its successors and
assigns.

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“Financial
        Asset” has
        the meaning assigned to such term in Section 8-102(a)(9) of the UCC. 

“Governmental
        Authority” means
        any nation or government, any state or other political subdivision thereof,
        any entity exercising executive, legislative, judicial, regulatory or
        administrative functions of or pertaining to government. 

“Governmental Securities” means
    direct obligations of the United States of America, or direct obligations
    of any agency or instrumentality thereof the obligations of which are expressly
    backed by the full faith and credit of the United States of America, or obligations
    fully and expressly guaranteed as to principal and interest by the United
    States of America or any such agency or instrumentality thereof, other than
    any Structured Finance Securities or Derivative Securities.

“Grantor” has
      the meaning provided in the first paragraph of this Agreement and shall
      include any successor thereto. 

“Indemnitee” has the meaning provided in Section 10.04(b) of
this Agreement.

“Instrument” has
    the meaning assigned to such term in Section 9-102(a)(47) of the UCC.

“Investment Property” has
    the meaning assigned to such term in Section 9-102(a)(49) of the UCC.

“Lenders” has
the meaning provided in the recitals of this Agreement. 

“Location” of any Grantor, means such Grantor’s “location” as
    determined pursuant to Section 9-307 of the UCC.

“Market Value” of
    each Security at a particular time, means the fair market value determined
    for such Security at the close of business on the last preceding Business
    Day. For purposes of this definition, unpaid dividends and other unpaid distributions
    on or in respect of Securities and accrued but unpaid interest on Governmental
    Securities and Agency Securities will be excluded from the determination
    of Market Value. For purpose of the determination of any Market Value, the
    Custodian or the Collateral Agent shall be entitled to rely on any independent
    pricing service deemed reliable by it, and in the event no such pricing service
    exists, the Market Value shall be provided by the Administrative Agent].

“NYSE” means
the New York Stock Exchange. 

“Parent Borrower” has the meaning provided in the recitals of
this Agreement.

“Primary Obligations” has
    the meaning provided in Section 8.04(b) of this Agreement.

“Pro Rata Share” has the meaning provided in Section 8.04(b)
of this Agreement.

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“Proceeds” means all “proceeds” as
    such term is defined in Section 9-102(a)(64) of the UCC and, in any event,
    shall include, without limitation, all interest on or other income from the
    Cash from time to time on deposit in any Collateral Account, and all collections
    and distributions (including, without limitation, interest and dividends)
    with respect to any Security held in any Collateral Account.

“Property” means
    any right or interest in or to property of any kind whatsoever, whether real,
    personal or mixed and whether tangible or intangible.

“Registered
      Organization” has the meaning provided in the Uniform Commercial
      Code as in effect in the State of New York.

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

“Secondary Obligations” has
    the meaning provided in Section 8.04(b) of this Agreement.

“Secured Creditors” has
    the meaning provided in the recitals of this Agreement and shall include
    any successor thereto.

“Secured
      Obligations” means, as to any Grantor (solely as to itself), all
      of the following:

(i)   the
    full and prompt payment when due (whether at stated maturity, by acceleration
    or otherwise)
    of all obligations, liabilities and indebtedness (including, without limitation,
    principal, premium, interest (including, without limitation, all interest
    that accrues after the commencement of any case, proceeding or other action
    relating to the bankruptcy, insolvency, reorganization or similar proceeding
    of such Grantor at the rate provided for in the respective documentation,
    whether or not a claim for post-petition interest is allowed in any such
    proceeding), reimbursement obligations under Letters of Credit, fees, costs
    and indemnities) of such Grantor to the Secured Creditors, whether now existing
    or hereafter incurred under, arising out of, or in connection with, the Credit
    Agreement and the other Credit Documents to which such Grantor is a party
    and the due performance and compliance by such Grantor with all of the terms,
    conditions and agreements contained in the Credit Agreement and in such other
    Credit Documents;

(ii)   any and all sums
    advanced by the Collateral Agent and/or the Custodian in order to preserve
    the Collateral or preserve the Collateral Agent’s security interest
    in the Collateral;

(iii)  in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities of such Grantor referred to in clause (i) above, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or
    realizing on the Collateral, or of any exercise by the Collateral Agent of
    its rights hereunder, together with reasonable attorneys’ fees and court
    costs;

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(iv)  all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement by such Grantor under Section 10.04(b) of this Agreement; and

(v) all amounts owing by such Grantor to the Administrative Agent in connection with Tranche 1 Revolving Loans or Tranche 1 Letters of Credit pursuant to any of the Credit Documents in its capacity as such;

Notwithstanding anything to the contrary contained in this definition, it is
understood and agreed that
the “Secured Obligations” of each Grantor shall (x) include obligations
solely to the extent the Secured Obligations of such Grantor consist of or are
incurred in connection with Tranche 1 Revolving Loans or Tranche 1 Letters of
Credit to such Grantor, (y) include extensions of credit to the respective Grantor
of the types described above in connection with the Tranche 1 Revolving Loans
and the Tranche 1 Letters of Credit, whether outstanding on the date of this
Agreement or extended from time to time after the date of this Agreement and
(z) in the case of the Parent Borrower, shall not include any obligations arising
under the Parent Borrower Guaranty.

“Security” and “Securities” have
    the meaning provided in Section 8-102(a)(15) of the UCC and shall in any
    event also include for all purposes under this Agreement any certificates
    of deposit and money market deposits of any commercial bank.

“Securities Account” has
    the meaning assigned to such term in Section 8-501(a) of the UCC.

“Securities
      Intermediary” has the meaning assigned to such term in Section
      8-102(a)(14) of the UCC.

“Security Entitlement” has
    the meaning assigned to such term in Section 8-102(a)(17) of the UCC.

“Structured Finance Securities” means
    (a) securities representing participations in, or the payment of which is
    secured by, a pool of loans the repayment of which is secured by a mortgage,
    deed of trust, other mortgage securities or other fee or leasehold interest
    upon real estate or other assets, (b) securities representing participations
    in, or the payment of which is secured by, a pool of receivables (of any
    nature) or (c) any similar types of securities, other than, in each case,
    Derivative Securities.

“Termination Date” has
the meaning provided in Section 10.08.

“Transmitting Utility” has
    the meaning given such term in Section 9-102(a)(80) of the UCC.

“UCC” means
    the Uniform Commercial Code, as amended, and as in effect from time to time
    in the State of New York, except that references to sections of the UCC refer
    to the section numbers of such sections as of the date of this Agreement.

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Section 2.   Appointment of Custodian. 

Section 2.01   Appointment.   Each
    Grantor and the Collateral Agent hereby appoint the Custodian as custodian,
    bailee, Deposit Account Bank and Securities Intermediary of all Eligible
    Securities and Cash at any time delivered to, or deposited with, the Custodian
    in connection with any and all Credit Transactions and as their agent to
    effect such Credit Transactions. The Custodian hereby accepts the foregoing
    appointment as custodian, bailee, Deposit Account Bank, Securities Intermediary
    and agent. 

Section 3.   Representations and Covenants
of each Grantor.

Section 3.01   Representations
      by each Grantor.   Each
      Grantor (solely as to itself and its Subsidiaries) represents, warrants
      and covenants (and each Grantor shall be deemed to repeat each such representation
      and warranty on each date on which a Primary Obligation is outstanding)
      that: 

(a)   it
    is the legal, beneficial and record owner of, and has good and marketable
    title to, all of its Collateral consisting of one or more Collateral Accounts
    and all Financial Assets, cash, instruments and Securities credited thereto
    and Security Entitlements and credit balances carried therein and that it
    has sufficient interest in all of its Collateral in which a security interest
    is purported to be created hereunder for such security interest to attach
    (subject, in each case, to no pledge, lien, mortgage, hypothecation, security
    interest, charge, option, Adverse Claim or other encumbrance whatsoever,
    other than Liens which are permitted under Section 8.03(a), (k) or (l) of
    the Credit Agreement and which are not prior to the Liens created by this
    Agreement);

(b)   it
    has full power, authority and legal right to pledge and charge all the Collateral
    pledged by it pursuant to this Agreement;

(c)   this
    Agreement has been duly authorized, executed and delivered by such Grantor
    and constitutes a legal, valid and binding obligation of such Grantor enforceable
    against such Grantor in accordance with its terms, except to the extent that
    the enforceability thereof may be limited by applicable bankruptcy, insolvency,
    reorganization, moratorium or other similar laws affecting creditors’ rights
    generally and by general equitable principles (regardless of whether enforcement
    is sought in equity or at law);

(d)   except
    to the extent already obtained or made, no consent of any other party (including,
    without limitation, any stockholder, partner, member or creditor of such
    Grantor or any of its Subsidiaries) and no consent, license, permit, approval
    or authorization of, exemption by, notice or report to, or registration,
    filing or declaration with, any governmental authority is required to be
    obtained by such Grantor in connection with (a) the execution, delivery or
    performance of this Agreement by such Grantor, (b) the validity or enforceability
    of this Agreement against such Grantor, (c) the perfection or enforceability
    of the Collateral Agent’s security interest in such Grantor’s Collateral
    or (d) except for compliance with or as may be required by applicable securities
    laws, the exercise by the Collateral Agent of any of its rights or remedies
    provided herein;

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(e)   neither
    the execution, delivery or performance by such Grantor of this Agreement
    or the other Credit Documents to which it is a party nor compliance with
    the terms and provisions thereof nor the consummation of the transactions
    contemplated therein: (i) will contravene any applicable provision of any
    law, statute, rule, regulation, order, writ, injunction or decree of any
    court or governmental instrumentality; (ii) will conflict or be inconsistent
    with or result in any breach of any of the terms, covenants, conditions or
    provisions of, or constitute a default under, or result in the creation or
    imposition of (or the obligation to create or impose) any Lien (except pursuant
    to the Security Documents or pursuant to Section 4.02(g) of the Credit Agreement)
    upon any of the property or assets of such Grantor or any of its Subsidiaries
    pursuant to the terms of, any indenture, mortgage, deed of trust, loan agreement,
    credit agreement, securities loan agreement, repurchase agreement or any
    other material agreement or instrument to which such Grantor or any of its
    Subsidiaries is a party or by which it or any of its property or assets are
    bound or to which it may be subject; or (iii) will violate any provision
    of the certificate of incorporation, by-laws or other organizational documents
    of such Grantor or any of its Subsidiaries;

(f)   to
    the best of such Grantor’s knowledge, all of such Grantor’s Collateral
    consisting of Securities has been duly and validly issued, is fully paid
    and non-assessable and is subject to no options to purchase or similar rights;

(g)   “control” (as defined in Section 8-106 of the UCC) has been obtained by the Collateral Agent over all of such Grantor’s
    Collateral consisting of Securities, Security Entitlements and Securities
    Accounts;

(h)   “control” (as defined in Section 9-104 of the UCC) has been obtained by the Collateral Agent over all of such Grantor’s
    Collateral consisting of Deposit Accounts;

(i)   each
    Grantor covenants and agrees (solely as to itself) that it will defend the
    Collateral Agent’s and its right, title and security interest in and to such Grantor’s
    Collateral and the proceeds thereof against the claims and demands of all
    persons whomsoever; and each Grantor covenants and agrees (solely as to itself)
    that it will have like title to and right to pledge any other property at
    any time hereafter pledged to the Collateral Agent by such Grantor as Collateral
    hereunder and will likewise defend the right thereto and security interest
    therein of the Collateral Agent and the other Secured Creditors;

(j)   this
    Agreement, together with the Account Control Agreement and the transfer,
    deposit or delivery of any Collateral by or on behalf of such Grantor to
    the Collateral Agent or its agent (including the Custodian), or to any Collateral
    Account, will constitute, in favor of the Collateral Agent, a valid first
    lien on and first priority perfected security interest in all of the Collateral,
    subject to no other Lien other than Liens which are permitted under Section
    8.03(a), (k) or (l) of the Credit Agreement and which are not prior to the
    Liens created by this Agreement; and

 

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(k)   The
  exact legal name of each Grantor, the type of organization of such Grantor,
  whether or not such Grantor is a Registered Organization, the jurisdiction
  of organization
  of such Grantor, such Grantor’s Location, the organizational identification
  number (if any) of such Grantor and whether or not such Grantor is a Transmitting
  Utility are listed on Annex A hereto for such Grantor. Such Grantor shall not
  change its legal name, its type of organization, its status as a Registered
  Organization (in the case of a Registered Organization), its status as a Transmitting
  Utility or as a Person which is not a Transmitting Utility, as the case may
  be, its jurisdiction of organization, its Location or its organizational identification
  number (if any) from that set forth on Annex A hereto, except that any such
  changes shall be permitted (so long as same do not involve (x) a Registered
  Organization ceasing to constitute same or (y) such Grantor changing its jurisdiction
  of organization or Location from the United States or a State thereof to a
  jurisdiction of organization or Location, as the case may be, outside the United
  States or a State thereof) if (i) it shall have given to the Collateral Agent
  not less than 15 days’ prior
  written notice of each change to the information listed on Annex A (as adjusted
  for any subsequent changes thereto previously made in accordance with this
  sentence), together with a supplement to Annex A which shall correct all information
  contained therein for such Grantor, and (ii) in connection with the respective
  such change or changes, it shall have taken all action reasonably requested
  by the Collateral Agent to maintain the security interests of the Collateral
  Agent in the Collateral intended to be granted hereby at all times fully perfected
  and in full force and effect. In addition, to the extent that such Grantor
  does not have an organizational identification number on the date hereof and
  later obtains one, such Grantor shall promptly thereafter notify the Collateral
  Agent of such organizational identification number and shall take all actions
  reasonably satisfactory to the Administrative Agent to the extent necessary
  to maintain the first priority security interest of the Collateral Agent in
  the Collateral intended to be granted hereby fully perfected and in full force
  and effect.

Section 4.   Collateral; Establishment of
Collateral Accounts.

Section 4.01   Pledge,
      Grant of Security Interest.   As security for the prompt and complete payment and performance when due
      of all of its Secured Obligations, each Grantor does hereby severally (and
      not jointly) assign and transfer unto the Collateral Agent, and does hereby
      severally (and not jointly) pledge, charge and grant to the Collateral
      Agent, for the benefit of the Secured Creditors, a continuing security
      interest in all of the right, title and interest of such Grantor in, to
      and under all of the following property (and all rights therein) of such
      Grantor, or in which or to which such Grantor has any rights, in each case
      whether now existing or hereafter from time to time acquired (all of which
      is hereinafter collectively referred to as the “Collateral”): 

(a)   each
    Collateral Account (as defined in Section 4.02) of, or in the name of, such
    Grantor;

(b)   all
    Cash, Securities, Security Entitlements, Investment Property, Financial Assets,
    credit balances and other assets and Property and all Instruments, in each
    case from time to time deposited or held in or transferred or credited to
    or carried in any Collateral Account of such Grantor from time to time;

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(c)   
  all Securities,
  moneys or Property representing a dividend on any of the assets of such Grantor
  described in clause (b) of this Section 4.01, or representing a distribution
  or return of capital upon or in respect of any of such assets, or resulting
  from a split-up, revision, reclassification or other like change of any of such
  assets of such Grantor or otherwise received in exchange therefor, and any subscription
  warrants, rights or options issued to the holders of, or otherwise in respect
  of, any of such assets of such Grantor;

(d)   
  all Proceeds
  of any and all of the foregoing (including, without limitation, all causes of
  action, claims and warranties now or hereafter held by such Grantor in respect
  of any of the items listed above), all interest on or other income from the
  Cash and other Property from time to time held in any Collateral Account of
  such Grantor, and all collections and distributions with respect to any of the
  assets of such Grantor described in clauses (a) through (c) of this Section
  4.01; and

(e)   
  to the
  extent related to any property described in the preceding clauses of this Section
  4.01, all books, correspondence, credit files, records and other papers. 

Section
  4.02    Establishment of Collateral Accounts.   (a)   On or prior to the Effective
  Date and upon any Person becoming a Grantor hereunder, each such Grantor shall
  have established with the Custodian, and at all times thereafter until the Secured
  Obligations of such Grantor shall have been irrevocably and indefeasibly paid
  in full and this Agreement is terminated in accordance with its terms, such
  Grantor shall maintain with the Custodian: 

  (i)   
    each
    Deposit Account listed in Part A of Schedule I hereto (each of which shall
    be maintained by the Custodian in the name of such Grantor) (each, a “Collateral Deposit Account”);
    

  (ii)   
    each
    Securities Account listed in Part B of Schedule I hereto (each of which shall
    be maintained by the Custodian in the name of such Grantor) (each a “Collateral
    Securities Account”
    and, together with each Collateral Deposit Account, the “Collateral
    Accounts”). 

(b)   
  The Custodian
  shall credit any Cash or Securities deposited, delivered or transferred by or
  on behalf of the respective Grantor to the Custodian in connection with any
  Credit Transaction in accordance with Section 4.03 to (x) in the case of Cash,
  such Grantor’s Collateral Deposit Account and (y) in the case of Securities,
  such Grantor’s Collateral Securities Account.

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  Section
    4.03    Procedures
    for Depositing Cash and Crediting Securities to Collateral
    Accounts. 

(a)   
  In
  General.   Each
  Grantor may, prior to 1:00 p.m. New York City time, on any Business Day, transfer,
  deliver or deposit or cause to be transferred, delivered or deposited, as the
  case may be, (i) Cash to such Grantor’s Deposit Account or (ii) Securities
  to such Grantor’s Securities Account.

(b)   
  Collateral
  Transfer.   (i)   Concurrently with, or prior to, any Collateral Transfer to the Custodian
  for inclusion in the respective Grantor’s Borrowing Base, the respective
  Grantor shall (x) deliver customary forms provided by the Custodian (completed
  to the satisfaction of the Custodian) in respect of such transfer, delivery
  or deposit (each, a “Collateral Transfer”) and (y) notify the Collateral
  Agent and the Administrative Agent of such Collateral Transfer in writing, which
  notice shall be substantially in the form of Exhibit B and shall set forth (i)
  the date of such Collateral Transfer, (ii) in reasonable detail, a description
  of the Securities (and the respective fair market value thereof as of the date
  of such Collateral Transfer), (iii) the Borrowing Base of such Grantor both
  before and after giving effect to such Collateral Transfer and (iv) an officer’s
  certificate certified by an Authorized Officer that the Cash and/or Securities
  subject to such Collateral Transfer constitutes Collateral of such Grantor under
  this Agreement and is subject to security interests granted herein. Each Collateral
  Transfer shall be made in accordance with customary procedures of the Custodian,
  which procedures shall be deemed to be incorporated by reference in this Agreement
  as if set forth in full herein. 

(c)   
  Upon
  the occurrence of each Credit Transaction, the Parent Borrower and the respective
  Grantor shall be deemed to represent and warrant to the Collateral Agent with
  respect to each item of Property subject to such Collateral Transfer or otherwise
  constituting Collateral of such Grantor that:

(i)   
  if such
  Property is a Security, it is an Eligible Security;

(ii)   
  such
  Grantor has noted on its books and records that such Property is pledged to
  the Collateral Agent under this Agreement;

(iii)   
  the Borrowing
  Base of such Grantor is equal to or exceeds 100% of the amount of the Secured
  Obligations of such Grantor on and as of the date of such Collateral Transfer;
  and

(iv)   
  with
  respect to each such Property (and all other Property theretofore transferred
  to the Collateral Agent and included in the Collateral hereunder), this Agreement,
  the Account Control Agreement and the delivery of such Property to the respective
  Collateral Account creates a valid first Lien on and first priority perfected
  security interest in such Property in favor of the Collateral Agent, subject
  to no other Liens other than Liens which are permitted under Section 8.03(a),
  (k) or (l) of the Credit Agreement and which are not prior to the Liens created
  by this Agreement, and enforceable as such against all other creditors of such
  Grantor.

  (d)   
    Form
    of Transfer.
    The Grantor shall transfer each item of Collateral to the Custodian in a form
    and manner sufficient to create a perfected first priority security interest therein
    in favor of the Collateral Agent under the UCC, and otherwise in a form and
    manner reasonably acceptable to the Collateral Agent and the Custodian. 
  

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(e)   
  Rights
  of the Collateral Agent.   Notwithstanding anything to the contrary in this Agreement, the Collateral Agent
  and/or the Custodian shall have the right to reject or return any Security transferred
  to any Collateral Account to the extent that it has determined, with the advice
  of its counsel (which may be in-house counsel), that acceptance of such Security
  as Collateral or otherwise, would violate or conflict with any law, treaty,
  rule or regulation or determination of any Governmental Authority or other requirements
  of law binding upon the Collateral Agent or the Custodian.

(f)   
  Further
  Assurances.   In connection with any Collateral Transfer under this Section 4.03 or otherwise
  in respect hereof, each Grantor shall take such action, at its own expense,
  as the Collateral Agent may reasonably request (including, without limitation,
  to the extent that the Collateral Agent may reasonably request, delivering undated
  bond powers or other instruments of transfer or entering into one or more control
  agreements on terms reasonably satisfactory to the Collateral Agent) for the
  purpose of ensuring that the Collateral Agent will have a perfected first priority
  security interest with respect to each item of Collateral so transferred. In
  addition, each Grantor will furnish to the Administrative Agent and the Collateral
  Agent from time to time statements and schedules identifying and describing
  the Collateral (including, without limitation, each Borrowing Base Certificate
  delivered pursuant to Section 7.01(h) of the Credit Agreement) with respect
  to such Grantor and such other reports in connection with such Collateral as
  the Collateral Agent may reasonably request, all in reasonable detail. 

  Section
    4.04    Procedures
    for Requesting Releases of Collateral from Collateral Accounts.

(a)   
  In
  General.   Each
  Grantor may, prior to 1:00 p.m. New York City time, on any Business Day, deliver
  to the Collateral Agent and the Custodian a request for release of Collateral
  from one or more of its Collateral Accounts in accordance with the procedures
  set forth in Section 4.04(b).

(b)   
  Collateral
  Release Request.   Prior to each release by the Collateral Agent and the Custodian of Collateral
  to the respective Grantor, such Grantor shall deliver to the Collateral Agent
  and the Custodian a Collateral Release Request substantially in the form of
  Exhibit A (appropriately completed) with respect thereto. Each Collateral Release
  Request shall be delivered in writing together with such customary documents
  as may be required by the Custodian and/or the Collateral Agent in accordance
  with their customary procedures which shall be reasonably acceptable to such
  Grantor, which procedures shall be deemed to be incorporated by reference in
  this Agreement as if set forth in full herein.

(c)   
  Notwithstanding
  anything to the contrary contained in this Agreement or any other Credit Document,
  no Collateral shall be released by the Custodian or the Collateral Agent on
  behalf of any Grantor pursuant to any Collateral Release Request (i) if, immediately
  before or after giving effect thereto, the Borrowing Base of such Grantor would
  be less than 100% of the amount of the Secured Obligations of such Grantor on
  and as of the date of such

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Collateral
  Release Request or (ii) if a Default or an Event of Default has occurred and
  is continuing, unless, in each case, in the reasonable determination of the
  Collateral Agent, such release is (x) of Securities against simultaneous deposit
  of Cash by such Grantor to such Grantor’s Deposit Account in an amount
  equal to the aggregate Market Value of the released Securities or (y) made simultaneously
  with the transfer or delivery by such Grantor to the Custodian of Securities
  (to be credited to such Grantor’s Securities Account) having an aggregate
  Market Value at least equal to the aggregate Market Value of the released Securities;
  provided
  that, in each case under clauses (i) and (ii) of this paragraph, the Administrative
  Agent has provided notice to the Custodian and the Collateral Agent of such
  deficiency or such Default or Event of Default in accordance with Section 10.02.
  

(d)   
  Neither
  the Collateral Agent nor the Custodian shall have any liability whatsoever to
  any other Secured Creditor as the result of any release of Collateral by it
  in accordance with (or which the Collateral Agent reasonably believes to be
  in accordance with) this Section 4.04.

Section 5.   
  Effecting
  Credit Events.
  

Section
  5.01    Effecting the Making of a Loan or the Issuance of a Letter of Credit.   Notwithstanding anything to the contrary, no Lender nor the Issuing Agent shall
  be required to make any Tranche 1 Revolving Loan or issue any Tranche 1 Letter
  of Credit to a Borrower whose Borrowing Base immediately upon giving effect
  to such Credit Event would be less than 100% of the Secured Obligations of such
  Grantor as confirmed by the Custodian and the Collateral Agent to the Administrative
  Agent immediately prior to such Credit Event. In confirming whether such Borrowing
  Base is less than 100% of the Secured Obligations of such Grantor, the Custodian
  and the Collateral Agent shall be entitled to rely on any information provided
  by the Administrative Agent concerning the amount of Secured Obligations then
  outstanding. 

Section 6.   
  Notices
  and Reports.
  

Section 6.01   
  Notices
  and Reports; Recordkeeping.

  (a)   
    Notices
    from Administrative Agent.   On each Business Day, the Administrative Agent may, but shall have no obligation
    to, deliver to the Collateral Agent a notice (the “Administrative
    Agent’s Notice”) of the aggregate amount of the outstanding
    Secured Obligations of each Grantor. The Collateral Agent may conclusively
    rely without further investigation on each Administrative Agent’s Notice
    for purposes of determining whether the aggregate amount of the Secured Obligations
    of each Grantor exceeds the Borrowing Base of such Grantor and for preparing
    the Borrowing Base Report in respect of such Grantor. The Administrative Agent’s
    Notice shall have no purpose other than to enable the Collateral Agent to
    make such determination and to prepare such Borrowing Base Reports, shall
    not be conclusive evidence of the amount of any Grantor’s Secured Obligations
    and may not evidence any claim or assertion by any Grantor of the amount of
    its Secured Obligations. Any failure by the Administrative Agent to deliver
    an Administrative Agent’s Notice shall not constitute a breach or default
    by the Administrative Agent, and the Collateral Agent may rely on the last
    Administrative Agent’s Notice delivered to the Collateral Agent. The
    Administrative Agent shall
    have no liability whatsoever to the Collateral Agent, any Grantor or any
    other Person relating to the information in any Administrative Agent’s
    Notice or to any delivery or failure to deliver any Administrative Agent’s
    Notice. 

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  (b)   
    Borrowing
    Base Report.   By 3:00 p.m. (New York time) on each Business Day, the Collateral Agent shall
    deliver to the Administrative Agent a report (a “Borrowing Base Report”)
    containing (i) the Market Value of all Collateral, (ii) the product of the
    Market Value of each item of Collateral and the applicable Advance Rate, and
    the amount by which the Borrowing Base of each Grantor exceeds or is less
    than the Secured Obligations of such Grantor, determined on the basis of the
    most recent Administrative Agent’s Notice delivered to the Collateral
    Agent in respect of such Grantor. If the Collateral Agent receives an Administrative
    Agent’s Notice by 1:00 p.m. (New York time) on any Business Day, then
    the Collateral Agent shall prepare its Borrowing Base Report for that Business
    Day using the information contained in such Administrative Agent’s Notice.
    If the Collateral Agent does not receive an Administrative Agent’s Notice
    by 1:00 p.m. (New York time) on any Business Day, then the Collateral Agent
    shall prepare its Borrowing Base Report for that Business Day using the information
    contained in the last Administrative Agent’s Notice that was received
    by the Collateral Agent. 

(c)   
  Recordkeeping.   The Collateral Agent and the Custodian shall maintain books and records necessary
  to enable them to determine at any time all Collateral Transfers and all releases
  of Collateral which have occurred on or prior to such time. Each Grantor agrees
  that such books and records of the Custodian and the Collateral Agent shall
  be conclusive as to the matters contained therein absent manifest error. 

Section 6.02   
  Rights
  of Collateral Agent with Respect to Calculations.
  

(a)   
  Notices,
  Reports, Requests, etc.   In
  making the calculations in connection with any notice, request or report or
  otherwise, (i) the Collateral Agent shall be entitled (but not obligated) to
  rely on the Custodian, (ii) the Administrative Agent shall be entitled to rely
  on the Custodian and/or the Collateral Agent, and (iii) the Collateral Agent
  and the Custodian shall be entitled to rely on any independent pricing service
  in the determination of the Market Value with respect to the Eligible Securities
  described therein. 

(b)   
  Agency
  Securities.   In producing the Borrowing Base Report, the Collateral Agent (and the Custodian
  in furnishing any Market Values therefor) shall not be required to consider
  or recognize any reduction in the principal amount of any Agency Securities
  held as Collateral until after the Collateral Agent has received written notice
  (including electronic communications) of such reduction by or behalf of the
  issuer of such Agency Securities.

(c)   
  Dispute.   The Collateral Agent and/or the Administrative Agent upon a reasonable basis
  may disagree with and dispute any request for a Collateral Transfer, any Collateral
  Release Request, Borrowing Base Report, or other notice or information at any
  time. 

(d)   
  Limitation
  on Liability.   In no event shall the Collateral Agent, the Custodian or the Administrative
  Agent be liable to any Grantor or any other Person for the accuracy
  of its determination of the aggregate amount of the Grantor’s Secured
  Obligations, the Grantor’s Borrowing Base or the Market Value of any item
  of Collateral, for any determination regarding the eligibility of any Securities
  for inclusion in the Borrowing Base or for any other determination or calculation
  except in the case of its gross negligence or willful misconduct (as determined
  in a court of competent jurisdiction in a final and non-appealable decision).   

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  Section 7.   Additional
    Covenants of the Grantors.   In furtherance of the grant of the pledge and
    security interest pursuant to Section 4.01 hereof, each Grantor (solely as
    to itself) hereby agrees with the Collateral Agent as follows:

  Section 7.01   Delivery
    and Other Perfection.   Each Grantor shall:

(a)   take such action as the Administrative Agent or the Collateral Agent shall deem
  necessary or appropriate to duly record the Lien created hereunder in the Collateral
  with respect to such Grantor;

(b)   give, authorize, execute, deliver, file and/or record any financing statement,
  notice, instrument, document, agreement or other papers that may be necessary
  or desirable (in the reasonable judgment of the Administrative Agent or the
  Collateral Agent) to create, preserve, perfect or validate the pledge and security
  interest granted pursuant hereto or to enable the Collateral Agent to exercise
  and enforce its rights hereunder with respect to such pledge and security interest,
  including, without limitation, (i) causing any or all of the Collateral with
  respect to such Grantor to be transferred of record into the name of the Collateral
  Agent or the Custodian or the Collateral Agent’s nominee (and the Collateral
  Agent agrees that if any such Collateral is transferred into its name or the
  name of its nominee, the Collateral Agent will thereafter promptly give to such
  Grantor copies of any notices and communications received by it with respect
  to such Collateral), (ii) in the case of any Securities to be included in the
  Collateral that are held on the books of any Clearing Corporation, causing such
  Securities to be credited to an account of a Securities Intermediary designated
  by the Collateral Agent maintained with such Clearing Corporation, and (iii)
  entering into one or more control agreements;

(c)   if (i) such Grantor is not entitled to receive from the Collateral Agent distributions
  with respect to any Collateral pursuant to Section 7.04(a), (ii) any distribution
  in respect of any of such Collateral shall be evidenced by, or any of such Collateral
  shall otherwise be converted to, any Instrument and (iii) such Instrument is
  transferred to such Grantor or otherwise at its direction (other than to the
  Collateral Agent) in a physical form, such Grantor shall immediately transfer,
  or cause to be transferred, such Instrument to the Custodian for credit to such
  Grantor’s Collateral Account, and the Custodian shall credit such Instrument
  to such Grantor’s Collateral Account, duly endorsed in a manner reasonably
  satisfactory to the Collateral Agent and the Custodian, to be held as Collateral
  with respect to such Grantor pursuant to this Agreement, and such Grantor shall
  transfer any cash distributions or interest received by such Grantor immediately
  to the Custodian for credit to such Grantor’s Collateral Account, and the
  Custodian shall promptly credit such Instrument to such Grantor’s Collateral
  Account; and

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(d)   keep full and accurate books and records relating to the Collateral with respect
  to such Grantor, and stamp or otherwise mark such books and records in such
  manner as the Collateral Agent may reasonably require in order to reflect the
  security interests granted by this Agreement.

  Section 7.02   Other
    Financing Statements and Liens.   No Grantor shall file or permit to be
    on file, or authorize or permit to be filed or to be on file, in any jurisdiction,
    any financing statement or like instrument with respect to the Collateral
    in which the Collateral Agent is not named as the sole secured party or be
    a party to any control agreement related to the Collateral except in favor
    of the Collateral Agent, and shall not otherwise create or permit to exist
    any Lien or any other interest of any kind upon or with respect to any of
    such Collateral, except Liens which are permitted under Section 8.03(a), (k)
    or (l) of the Credit Agreement and which are not prior to the Liens created
    by this Agreement.

  Section 7.03   Maintenance
    of Borrowing Base Percentage.   Subject to Section 4.02 of the Credit Agreement,
    each Grantor will take all such actions as shall be necessary to cause the
    Borrowing Base of such Grantor at all times to be at least 100% of the Secured
    Obligations of such Grantor.

  Section 7.04   Voting
    Rights; Dividends; etc.   (a)   So long as no Default or Event of Default
    shall have occurred and be continuing, each Grantor shall be entitled (i)
    to exercise or refrain from exercising any or all voting and other consensual
    rights in respect of such respective Grantor’s Collateral or any part
    thereof for all purposes not inconsistent with the provisions of this Agreement
    and (ii) to receive from the Custodian any cash dividend, interest or other
    cash distribution with respect to the respective Grantor’s Collateral
    actually received by the Custodian (except for any distribution specified
    by the issuer in a writing delivered or otherwise notified to the Collateral
    Agent as a special, extraordinary or liquidating dividend), net of withholding
    for any tax, assessment, charge or levy. In order to release such dividend,
    interest or distribution, the respective Grantor may execute an appropriate
    Collateral Release Request in respect thereof, subject to its Borrowing Base
    being equal to at least 100% of such Grantor’s Secured Obligations upon
    the release thereof.

(b)   The Collateral Agent shall notify each Grantor of such rights or discretionary
  actions or of the date or dates by when such rights must be exercised or such
  action must be taken provided that the Custodian has received, from the issuer
  or the relevant depository (with respect to Securities issued in the United
  States) or from the relevant subcustodian, depository or a nationally or internationally
  recognized bond or corporate action service to which the Custodian subscribes,
  timely notice of such rights or discretionary corporate action and of the date
  or dates such rights must be exercised or such action must be taken. Absent
  actual receipt of such notice, the Collateral Agent and the Custodian shall
  have no liability for failing to so notify a Grantor.

(c)   Whenever Securities (including, but not limited to, warrants, options, tenders,
  options to tender or non-mandatory puts or calls) confer optional rights on
  a Grantor or provide for discretionary action or alternative courses of action
  by such Grantor, such Grantor shall be responsible for making any decisions
  relating thereto and for directing the Collateral Agent. In order for the Collateral
  Agent to act, it must receive the Grantor’s written instructions at its
  offices, addressed as the Collateral Agent may from time to time request, not
  later than noon (New York time) at least two Business Days prior to the last
  scheduled date to act with respect to such Securities (or such earlier date
  or time as the Collateral Agent may notify the Grantor). Absent the Collateral
  Agent’s timely receipt of such written instructions, the Collateral Agent
  shall not be liable for failure to take any action relating to or to exercise
  any rights conferred by such Securities.   

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  (d)   Except
    as provided in Section 7.04(e), all voting rights with respect to Securities,
    however registered, shall be exercised by the Grantor or its designee. For
    Securities issued in the United States, the Collateral Agent’s only duty
    shall be to mail to the respective Grantor any documents (including proxy
    statements, annual reports and signed proxies) received by the Collateral
    Agent relating to the exercise of such voting rights. With respect to Securities
    issued outside of the United States, the Collateral Agent’s only duty
    shall be to provide the respective Grantor with access to a provider of global
    proxy services at such Grantor’s request. Such Grantor shall be responsible
    for all costs associated with its use of such services.

(e)   Upon the occurrence of a Default or Event of Default, (i) each Grantor shall
  hold any dividends, interest or other distributions which it receives with respect
  to its respective Collateral in trust for the Collateral Agent, separate from
  all other moneys of such Grantor, and forthwith transfer such dividends, interest
  or other distributions to the Custodian for crediting to the relevant Collateral
  Accounts, (ii) the Collateral Agent shall be entitled to register all or any
  item of such Collateral in its own name or in the name of its nominee or designee
  and (iii) the Collateral Agent shall be entitled to exercise all voting rights,
  and to give any and all consents in connection with, any and all Securities,
  and each Grantor hereby grants the Collateral Agent an irrevocable proxy and
  irrevocably appoints the Collateral Agent its attorney-in-fact coupled with
  an interest to vote or otherwise act in furtherance of the purposes hereof.
  Upon request from any Grantor, the Collateral Agent shall forthwith make and
  deliver to such Grantor such powers of attorney, consents or waivers as such
  Grantor shall reasonably request in order to permit such Grantor to exercise
  its rights under this Section 7.04. Upon request, each Grantor shall forthwith
  make and deliver to the Collateral Agent such powers of attorney, consents and
  waivers (in addition to the power of attorney and consent set forth in this
  Section 7.04(c)) as the Collateral Agent shall reasonably request in order to
  permit the Collateral Agent to exercise its rights under this Section 7.04 and
  this Agreement. Notwithstanding the foregoing, no Grantor may take any action
  under this Section 7.04 with respect to any Collateral that, in the Administrative
  Agent’s reasonable judgment, (i) would in any way adversely affect the
  Lien created under this Agreement with respect to an item of Collateral or impair
  the interest or rights of the Collateral Agent therein, except as permitted
  by Section 4.04, or (ii) would otherwise be inconsistent with the provisions
  of this Agreement or result in a violation hereof. No Grantor shall give any
  consent or waiver, authorize any assumption, make any modification and supplement,
  or take other action with respect to any Collateral in any manner inconsistent
  with the manner in which such Grantor acts with respect to investments of the
  same type held by such Grantor for its own account.

  (f)   With
    respect to the duties of the Collateral Agent, the provisions of paragraphs
    (b), (c) and (d) of this Section that are applicable to each Grantor shall
    apply to the Collateral Agent in any exercise of its rights under paragraph
    (e) of this Section.

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  Section 7.05   No
    Removals, etc.   Without at least 30 days’ prior written notice to
    the Collateral Agent, no Grantor shall maintain any of its books and records
    with respect to any Collateral at any office or maintain its principal place
    of business at any place other than at the notice address indicated to the
    Administrative Agent pursuant to the Credit Agreement.

  Section 7.06   U.S.
    Securities.   The Securities delivered, contained and maintained in the
    Securities Accounts shall be Securities that are primarily cleared and settled
    within the United States.

  Section
    8.   Remedies; Distribution of Collateral.

  Section 8.01   Remedies.   Each Grantor agrees that, if any Event of Default shall have occurred and
    be continuing, then and in every such case, the Collateral Agent, in addition
    to any rights now or hereafter existing under applicable law and under the
    other provisions of this Agreement, shall have all rights as a secured creditor
    under the UCC, and such additional rights and remedies to which a secured
    creditor is entitled under the laws in effect in all relevant jurisdictions
    and when directed by the Administrative Agent may:

(a)   personally, or by agents or attorneys, immediately take possession of the Collateral
  or any part thereof, from such Grantor or any other Person who then has possession
  of any part thereof (including, without limitation, the Custodian) with or without
  notice or process of law, and for that purpose may enter upon such Grantor’s
  premises where any of the Collateral is located and remove the same and use
  in connection with such removal any and all services, supplies, aids and other
  facilities of such Grantor;

(b)   instruct the obligor or obligors on any agreement, instrument or other obligation
  constituting the Collateral to make any payment required by the terms of such
  agreement, instrument or other obligation directly to the Collateral Agent and
  may exercise any and all remedies of such Grantor in respect of such Collateral;

(c)   instruct the Custodian to transfer all Collateral of such Grantor held by the
  Custodian to the Collateral Agent for the benefit of the Secured Creditors;

(d)   sell, assign or otherwise liquidate any or all of such Grantor’s Collateral
  or any part thereof in accordance with Section 8.02, or direct such Grantor
  or the Custodian to sell, assign or otherwise liquidate any or all of such Grantor’s
  Collateral or any part thereof, and, in each case, take possession of the proceeds
  of any such sale or liquidation;

(e)   take
  possession of the Collateral or any part thereof, by directing such Grantor
  and/or the Custodian in writing to deliver the same to the Collateral Agent
  at any reasonable place or places designated by the Collateral Agent (including,
  without limitation, to an account or accounts in the name of the Collateral
  Agent designated by the Collateral Agent), in which event such Grantor and/or
  the Custodian shall at such Grantor’s expense:

  (x)   forthwith
    cause the same to be moved, held, transferred, credited or deposited to the
    place or places (or account or accounts) so designated by the Collateral Agent
    and there delivered to the Collateral Agent; and

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(y)   store and keep any Collateral so delivered to the Collateral Agent at such place
  or places pending further action by the Collateral Agent as provided in Section
  8.02;

(f)   apply any monies constituting Collateral or proceeds thereof in accordance with
  the provisions of Section 8.04;

(g)   set-off any and all Collateral of such Grantor against any and all Secured Obligations
  of such Grantor, and to withdraw any and all Cash or other Collateral from any
  and all such Grantor’s Collateral Accounts and to apply such Cash and other
  Collateral to the payment of any and all Secured Obligations of the respective
  Grantor;

(h)   vote all or any part of such Grantor’s Collateral (whether or not transferred
  into the name of the Collateral Agent) and give all consents, waivers and ratifications
  in respect of such Grantor’s Collateral and otherwise act with respect
  thereto as though it were the outright owner thereof (each Grantor hereby irrevocably
  constituting and appointing the Collateral Agent the proxy and attorney-in-fact
  of such Grantor, with full power of substitution to do so), in each case subject
  to the terms and conditions of Section 7.04(f);

  (i)   receive
    all amounts payable in respect of the Collateral otherwise payable to the
    respective Grantor under Section 7.04;

  (j)   take
    any other action as specified in clauses (1) through (5), inclusive, of Section
    9-607(a) of the UCC; and

  (k)   take
    the actions referred to in Sections 8.04(h) and 8.05;

it is understood
  and agreed that each Grantor’s obligation so to deliver the Collateral
  is of the essence of this Agreement and that, accordingly, upon application
  to a court of equity having jurisdiction, the Collateral Agent shall be entitled
  to a decree requiring specific performance by such Grantor of said obligation.
  By accepting the benefits of this Agreement and each other Security Document,
  the Secured Creditors expressly acknowledge and agree that this Agreement and
  each other Security Document may be enforced only by the action of the Collateral
  Agent acting upon the instructions of the Majority Tranche 1 Lenders and that
  no other Secured Creditor shall have any right individually to seek to enforce
  or to enforce this Agreement or to realize upon the security to be granted hereby,
  it being understood and agreed that such rights and remedies may be exercised
  by the Collateral Agent for the benefit of the Secured Creditors upon the terms
  of this Agreement and the other Security Documents.

  Section 8.02   Disposition
    of the Collateral.   If any Event of Default shall have occurred and be
    continuing, then any Collateral may be sold, assigned or otherwise disposed
    of under one or more contracts or as an entirety, and without the necessity
    of gathering at the place of sale the property to be sold, and in general
    in such manner, at such time or times, at such place or places and on such
    terms as the Administrative Agent or the Collateral Agent may, in

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compliance
  with any mandatory requirements of applicable law, determine to be commercially
  reasonable (including, without limitation, on the NYSE or any other established
  market). Any such sale, lease or other disposition may be effected by means
  of a public disposition or private disposition, effected in accordance with
  the applicable requirements (in each case if and to the extent applicable) of
  Sections 9-610 through 9-613 of the UCC and/or such other mandatory requirements
  of applicable law as may apply to the respective disposition. The Collateral
  Agent may, without notice or publication, adjourn any public or private disposition
  or cause the same to be adjourned from time to time by announcement at the time
  and place fixed for the disposition, and such disposition may be made at any
  time or place to which the disposition may be so adjourned. To the extent permitted
  by any such requirement of law, the Collateral Agent may bid for and become
  the purchaser (and may pay all or any portion of the purchase price by crediting
  Secured Obligations of the respective Grantor against the purchase price) of
  such Grantor’s Collateral or any item thereof, offered for disposition
  in accordance with this Section 8.02 without accountability to the relevant
  Grantor. If, under applicable law, the Collateral Agent shall be permitted to
  make disposition of such Grantor’s Collateral within a period of time which
  does not permit the giving of notice to the relevant Grantor as hereinabove
  specified, the Collateral Agent need give such Grantor only such notice of disposition
  as shall be required by such applicable law. Each Grantor agrees to do or cause
  to be done all such other acts and things as may be reasonably necessary to
  make such disposition or dispositions of all or any portion of such Grantor’s
  Collateral valid and binding and in compliance with any and all applicable laws
  (including, without limitation, any state or federal securities laws), regulations,
  orders, writs, injunctions, decrees or awards of any and all courts, arbitrators
  or governmental instrumentalities, domestic or foreign, having jurisdiction
  over any such sale or sales, all at such Grantor’s expense.

  Section
    8.03   Waiver of Claims.   Except as otherwise provided in this Agreement,
    EACH GRANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE
    AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT’S TAKING
    POSSESSION OR THE COLLATERAL AGENT’S DISPOSITION OF ANY OF THE COLLATERAL,
    INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY
    PREJUDGMENT REMEDY OR REMEDIES, and each Grantor hereby further waives, to
    the extent permitted by law:

  (a)   all
    damages occasioned by such taking of possession or any such disposition except
    any damages which are the direct result of the Collateral Agent’s gross
    negligence or willful misconduct (as determined by a court of competent jurisdiction
    in a final and non-appealable decision);

  (b)   all
    other requirements as to the time, place and terms of sale or other requirements
    with respect to the enforcement of the Collateral Agent’s rights hereunder;
    and

  (c)   all
    rights of redemption, appraisement, valuation, stay, extension or moratorium
    now or hereafter in force under any applicable law in order to prevent or
    delay the enforcement of this Agreement or the absolute sale of the Collateral
    or any portion thereof, and each Grantor, for itself and all who may claim
    under it, insofar as it or they now or hereafter lawfully may, hereby waives
    the benefit of all such laws.

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Any sale of,
  or the grant of options to purchase, or any other realization upon, any Collateral
  shall operate to divest all right, title, interest, claim and demand, either
  at law or in equity, of the relevant Grantor therein and thereto, and shall
  be a perpetual bar both at law and in equity against such Grantor and against
  any and all Persons claiming or attempting to claim the Collateral so sold,
  optioned or realized upon, or any part thereof, from, through and under such
  Grantor.

  Section 8.04
       Application of Proceeds.   (a)   All moneys collected
    by the Collateral Agent upon any sale or other disposition of any Grantor’s
    Collateral, together with all other moneys received by the Collateral Agent
    hereunder, shall be applied as follows:

  (i)   first,
    to the payment of all amounts owing the Collateral Agent or the Custodian
    by such Grantor of the type described in clauses (ii), (iii) and (iv) of the
    definition of “Secured Obligations”; 

  (ii)   second,
    to the extent proceeds remain after the application pursuant to the preceding
    clause (i), to the payment of all amounts owing to the Administrative Agent
    by such Grantor of the type described in clause (v) of the definition of “Secured
    Obligations”; 

  (iii)   third,
    to the extent proceeds remain after the application pursuant to the preceding
    clauses (i) and (ii), an amount equal to the outstanding Primary Obligations
    of the respective Grantor shall be paid to the Secured Creditors as provided
    in Section 8.04(e), with each Secured Creditor receiving an amount equal to
    its outstanding Primary Obligations owed by the respective Grantor or, if
    the proceeds are insufficient to pay in full all such Primary Obligations,
    its Pro Rata Share of the amount remaining to be distributed; 
  

  (iv)   fourth,
    to the extent proceeds remain after the application pursuant to the preceding
    clauses (i) through (iii), inclusive, an amount equal to the outstanding Secondary
    Obligations of the respective Grantor shall be paid to the Secured Creditors
    as provided in Section 8.04(e), with each Secured Creditor receiving an amount
    equal to its outstanding Secondary Obligations owed by the respective Grantor
    or, if the proceeds are insufficient to pay in full all such Secondary Obligations,
    its Pro Rata Share of the amount remaining to be distributed; and
  

  (v)   fifth,
    to the extent proceeds remain after the application pursuant to the preceding
    clauses (i) through (iv), inclusive, and following the termination of this
    Agreement pursuant to Section 10.08, to the respective Grantor or to whomever
    may be lawfully entitled to receive such surplus.

  (b)   For
    purposes of this Agreement, (x) “Pro Rata Share” shall mean,
    when calculating a Secured Creditor’s portion of any distribution or
    amount with respect to any Grantor, that amount (expressed as a percentage)
    equal to a fraction the numerator of which is the then unpaid amount of such
    Secured Creditor’s Primary Obligations or Secondary Obligations, as the
    case may be, of such Grantor and the denominator of which is the then outstanding
    amount of all Primary Obligations or Secondary Obligations, as the case may
    be, of such
    Grantor (y) “Primary
    Obligations” shall
    mean all principal of, premium, fees and interest on, all Tranche 1 Revolving
    Loans, all Tranche 1 Unpaid Drawings, the Stated Amount of all outstanding
    Tranche 1 Letters of Credit and all fees and (z) “Secondary Obligations” shall
    mean all Secured Obligations other than Primary Obligations.   

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  (c)   When
    payments to Secured Creditors are based upon their respective Pro Rata Shares,
    the amounts received by such Secured Creditors hereunder shall be applied
    (for purposes of making determinations under this Section 8.04 only) (i) first,
    to their Primary Obligations and (ii) second, to their Secondary Obligations,
    in each case of the respective Grantor. If any payment to any Secured Creditor
    of its Pro Rata Share of any distribution would result in overpayment to such
    Secured Creditor, such excess amount shall instead be distributed in respect
    of the unpaid Primary Obligations or Secondary Obligations, as the case may
    be, of the other Secured Creditors, with each Secured Creditor whose Primary
    Obligations or Secondary Obligations, as the case may be, have not been paid
    in full to receive an amount equal to such excess amount multiplied by a fraction
    the numerator of which is the unpaid Primary Obligations or Secondary Obligations,
    as the case may be, of such Secured Creditor and the denominator of which
    is the unpaid Primary Obligations or Secondary Obligations, as the case may
    be, of all Secured Creditors entitled to such distribution.

  (d)   Each
    of the Secured Creditors, by their acceptance of the benefits hereof and of
    the other Security Documents, agrees and acknowledges that if any Secured
    Creditor receives a distribution on account of undrawn amounts with respect
    to Letters of Credit issued under the Credit Agreement (which shall only occur
    after all outstanding Loans under the Credit Agreement and Unpaid Drawings
    have been paid in full), such amounts shall be paid to the Administrative
    Agent under the Credit Agreement and held by it, for the equal and ratable
    benefit of the Secured Creditors, as cash security for the repayment of Secured
    Obligations owing to the Secured Creditors as such. If any amounts are held
    as cash security pursuant to the immediately preceding sentence, then upon
    the termination of all outstanding Letters of Credit under the Credit Agreement,
    and after the application of all such cash security to the repayment of all
    Secured Obligations owing to the Secured Creditors after giving effect to
    the termination of all such Letters of Credit, if there remains any excess
    cash, such excess cash shall be returned by the Administrative Agent to the
    Collateral Agent for distribution in accordance with Section 8.04(a). 
  

  (e)   All
    payments required to be made hereunder shall be made to the Administrative
    Agent for the account of the Secured Creditors.

  (f)   For
    purposes of applying payments received in accordance with this Section 8.04,
    the Collateral Agent shall be entitled to rely upon the Administrative Agent
    for a determination (which the Administrative Agent agrees to provide upon
    request of the Collateral Agent) of the outstanding Primary Obligations and
    Secondary Obligations of each Grantor owed to the Secured Creditors. Unless
    it has received written notice from a Secured Creditor to the contrary, the
    Administrative Agent, in furnishing information pursuant to the preceding
    sentence, and the Collateral Agent, in acting hereunder, shall be entitled
    to assume that no Secondary Obligations are outstanding.

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  (g)   It
    is understood that the Grantors shall remain severally (and not jointly) liable
    to the extent of any deficiency between the amount of the proceeds of the
    Collateral of such Grantor and the aggregate amount of such Grantor’s
    Secured Obligations.

  (h)   If
    at any time when the Administrative Agent or the Collateral Agent shall determine
    that the Collateral Agent will exercise its right to sell all or any part
    of the Collateral consisting of Securities pursuant to Section 8.02, either
    (i) such Collateral or the part thereof to be sold shall not, for any reason
    whatsoever, be effectively registered under any applicable securities laws,
    or (ii) such Collateral is effectively registered under applicable securities
    laws, the Collateral Agent may, in its sole and absolute discretion or in
    the sole and absolute discretion of the Administrative Agent, sell such Collateral
    or part thereof by private sale in such manner and under such circumstances
    as the Collateral Agent may deem necessary or advisable in order that such
    sale may legally be effected without registration. Without limiting the generality
    of the foregoing, in any such event the Collateral Agent, in its sole and
    absolute discretion or in the sole and absolute discretion of the Administrative
    Agent: (i) may proceed to make such private sale notwithstanding that a registration
    statement for the purpose of registering such Collateral or part thereof shall
    have been filed under any applicable securities law; (ii) may approach and
    negotiate with a single possible purchaser to effect such sale; and (iii)
    may restrict such sale to a purchaser who will represent and agree that such
    purchaser is purchasing for its own account, for investment, and not with
    a view to the distribution or sale of such Collateral or part thereof. In
    the event of any such sale, neither the Administrative Agent nor the Collateral
    Agent shall incur any responsibility or liability for selling all or any part
    of the Collateral at a price which the Administrative Agent or the Collateral
    Agent, in its sole and absolute discretion, may in good faith deem reasonable
    under the circumstances, notwithstanding the possibility that a substantially
    higher price might be realized if the sale were deferred until the registration
    as aforesaid.

  Section
    8.05   Remedies Cumulative.   Each and every right, power and
    remedy hereby specifically given to the Administrative Agent or the Collateral
    Agent shall be in addition to every other right, power and remedy specifically
    given to the Administrative Agent or the Collateral Agent under this Agreement,
    the other Security Documents or now or hereafter existing at law, in equity
    or by statute and each and every right, power and remedy whether specifically
    herein given or otherwise existing may be exercised from time to time or simultaneously
    and as often and in such order as may be deemed expedient by the Administrative
    Agent or the Collateral Agent. All such rights, powers and remedies shall
    be cumulative and the exercise or the beginning of the exercise of one shall
    not be deemed a waiver of the right to exercise any other or others. No delay
    or omission of the Administrative Agent or the Collateral Agent in the exercise
    of any such right, power or remedy and no renewal or extension of any of the
    Secured Obligations shall impair any such right, power or remedy or shall
    be construed to be a waiver of any Default or Event of Default or an acquiescence
    thereof. No notice to or demand on any Grantor in any case shall entitle it
    to any other or further notice or demand in similar or other circumstances
    or constitute a waiver of any of the rights of the Administrative Agent or
    the Collateral Agent to any other or further action in any circumstances without
    notice or demand. In the event that the Collateral Agent shall bring any suit
    to enforce any of its rights hereunder and shall be entitled to judgment,
    then in such suit the Collateral Agent may recover reasonable expenses, including
    reasonable attorneys’ fees, and the amounts thereof shall be included
    in such judgment.

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  Section 8.06   Discontinuance of Proceedings.   In case the Collateral Agent shall
    have instituted any proceeding to enforce any right, power or remedy under
    this Agreement by foreclosure, sale, entry or otherwise, and such proceeding
    shall have been discontinued or abandoned for any reason or shall have been
    determined adversely to the Collateral Agent, then and in every such case
    the relevant Grantor, the Collateral Agent and each holder of any of the Secured
    Obligations shall be restored to their former positions and rights hereunder
    with respect to the Collateral subject to the security interest created under
    this Agreement, and all rights, remedies and powers of the Collateral Agent
    shall continue as if no such proceeding had been instituted.

  Section
    8.07   Rights of Collateral Agent.   In making the determinations
    and allocations required by this Section 8, the Collateral Agent may rely
    upon its records and information supplied by any Grantor, the Administrative
    Agent, the Custodian and any other Person, and the Collateral Agent shall
    have no liability to any Grantor for actions taken in reliance on such information,
    except in the case of its gross negligence or willful misconduct (as determined
    by a court of competent jurisdiction in a final non-appealable decision) in
    applying or utilizing such information.

  Section 8.08   Effect of Bankruptcy; Obligations Absolute.   (a)   If,
    through the operation of any bankruptcy, reorganization, insolvency or other
    laws or otherwise, the Collateral Agent’s Lien hereunder is avoided,
    disallowed or otherwise not enforced with respect to some, but not all, of
    the Secured Obligations then outstanding, the Collateral Agent shall make
    the calculations required by Section 8 without giving effect to such Secured
    Obligations and shall apply the proceeds of the Collateral in the proportions
    and subject to the priorities specified herein.

  (b)   The
    obligations of each Grantor hereunder shall remain in full force and effect
    without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency,
    reorganization, arrangement, readjustment, composition, liquidation or the
    like of such Grantor or any other Grantor; (b) any exercise or non-exercise,
    or any waiver of, any right, remedy, power or privilege under or in respect
    of this Agreement or any other Security Document; or (c) any amendment to
    or modification of any Credit Document or any security for any of the Secured
    Obligations; whether or not such Grantor shall have notice or knowledge of
    any of the foregoing.

  
  Section
    9.   The
    Collateral Agent; The Custodian.
  

  Section
    9.01   Limitation of Duties.   (a)   Neither the Collateral
    Agent nor the Custodian (which term as used in this sentence shall include
    reference to their Affiliates and their own and their Affiliates’ officers,
    directors, employees and agents) shall (i) have any duties or responsibilities
    except those expressly set forth in this Agreement (and in the Account Control
    Agreement, in the case of the Custodian) and shall not by reason of this Agreement
    be a trustee for, or a fiduciary with respect to, any Grantor or any other
    Person; (ii) be responsible to any Grantor for any recitals, statements, representations
    or warranties contained in any notice or report, or in any other certificate
    or other document referred to or provided for in, or received by it under,
    the Credit Agreement, this Agreement or any other Credit Document, or for
    the value, validity, effectiveness, genuineness, enforceability or sufficiency
    of the Credit Agreement, this

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Agreement or any other Credit Document or for any failure by any Person to perform any of its obligations hereunder or thereunder, except for its own gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision); (iii) be required to initiate or conduct any litigation or collection proceedings hereunder; (iv) take any action pursuant to Sections 4.03(f), 7.01(a) or (b), or 8.02 except as instructed by the Administrative Agent; and (v) be responsible for any action taken or omitted to be taken by it under the Credit Agreement, this Agreement or any other Credit Document or under any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith, except for its own gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).

  (b)   In
    no event shall the Collateral Agent, the Custodian or the Administrative Agent
    be liable for indirect, special or consequential damages of any kind whatsoever
    (including lost profits and lost business opportunity) even if it is advised
    of the possibility of such damages and regardless of the form of action in
    which any such damages may be claimed.

  (c)   In
    no event shall the Collateral Agent, the Custodian or the Administrative Agent
    be responsible for, or have any liability with respect to, any losses due
    to forces beyond its reasonable control, including without limitation, strikes,
    work stoppages, acts of war or terrorism, insurrection, revolution, nuclear
    or natural catastrophes or act of God, and interruptions, loss or malfunction
    of utilities, communications or computer (software or hardware) services.

  (d)   Neither
    the Custodian nor the Collateral Agent shall have any liability for the acts
    or omissions of any Securities Intermediary (including DTC or any Federal
    Reserve Bank) or Deposit Account Bank in which any Collateral is held, except
    for its negligence in retaining or maintaining any such Securities Intermediary
    (other than DTC or any Federal Reserve Bank) or Deposit Account Bank. 
  

  (e)   Neither
    the Custodian nor the Collateral Agent shall have any liability with respect
    to information received from third parties, including pricing information
    services.

  Section
      9.02   Reliance by Collateral Agent and the Custodian.   The
      Collateral Agent and the Custodian shall be entitled to rely upon any certification,
      notice or other communication (including, without limitation, any thereof
      by telephone, facsimile, telegram or cable) believed by it to be genuine
      and correct and to have been signed or sent by or on behalf of the proper
      Person or Persons, and upon advice and statements of legal counsel, independent
      accountants and other experts selected by the Collateral Agent. If in one
      or more instances the Collateral Agent or the Custodian takes any action
      or assumes any responsibility not specifically delegated to it pursuant
      to this Agreement, neither the taking of such action nor the assumption
      of such responsibility shall be deemed to be an express or implied undertaking
      on the part of the Collateral Agent or the Custodian that it will take
      the same or similar action or assume the same or similar responsibility
    in any other instance.

  Section
      9.03   Appointment of Agents.   (a)   The
      Collateral Agent may perform its duties and exercise its rights and powers
      under this Agreement by or through such agents and custodians (including,
    without limitation, the Custodian) as it shall appoint. Each Grantor hereby
      agrees that the Custodian shall be the Securities Intermediary and Deposit
      Account Bank of such Grantor with respect to the Collateral Accounts. As
      a condition to appointing any agent or custodian, the Collateral Agent,
      at the expense of the Parent Borrower, may obtain an opinion of counsel,
      in form and substance reasonably satisfactory to the Collateral Agent,
      as to the continued perfection of the security interests in the Collateral
    in favor of the Collateral Agent.

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  (b)   In
    the event that the Collateral Agent appoints an agent pursuant to this Section
    9.03, each and every remedy, power, right, claim, demand, cause of action,
    estate, title, interest and Lien expressed or intended by this Agreement to
    be exercised by or vested in or conveyed to the Collateral Agent with respect
    thereto shall be exercisable by and vest in such agent but only in order to
    exercise such powers, rights and remedies, and every covenant and obligation
    necessary to the exercise thereof by such agent shall run to and be enforceable
    by either of them. In particular, and without limiting the generality of the
    foregoing, upon the determination by the Collateral Agent that any such agent
    or custodian may be required or appropriate, the Collateral Agent may appoint
    such agents or custodians to hold, maintain, invest, reinvest, collect upon
    or liquidate any Collateral and to make such payments or disbursements, including
    payments and disbursements to any Grantor as the Collateral Agent shall direct
    consistent with this Agreement. The Collateral Agent shall have the right
    to terminate the appointment of any agent or custodian hereunder without the
    consent of any Grantor or any other Person.

  (c)   The
    Collateral Agent may perform its duties and exercise its rights and powers
    under this Agreement by or through the Custodian pursuant to and in accordance
    with the terms hereof.

  Section
    10.   Miscellaneous.
  

  Section
      10.01   No Waiver.   No failure on
      the part of the Collateral Agent to exercise and no delay in exercising,
      and no course of dealing with respect to, any right, power or privilege
      under this Agreement shall operate as a waiver thereof, nor shall any single
      or partial exercise of any right, power or privilege under this Agreement
      preclude any other or further exercise thereof or the exercise of any other
      right, power or privilege. The remedies provided herein are cumulative
    and not exclusive of any remedies provided by law.

   Section.
      10.02 Notices. All notices, requests and other communications provided
      for herein (including, without limitation, any modifications of, or waivers,
      requests or consents under, this Agreement) shall be given or made in writing
      (including, without limitation, by facsimile) delivered to the intended recipient
      as set forth below: 

  (a) in the case of any Grantor,
  at the address for notices
  specified such Person in of the Credit Agreement;

  (b) as to the Custodian, at the following address:

  The Bank
      of New York 

      One Wall Street, 14th Floor 

      New York, New York 10286 

      Attention: Michael Jaime

Telephone: (212) 635-4614 

Facsimile: (212) 635-8844/8845;

  
  (c) as to the Collateral Agent, at the following address for any Administrative
        Agent’s Notice, Collateral Transfer Request or Collateral Release
    Request:

    The Bank of New York 

  Corporate Trust 

  Dealing & Trading Unit 

  101 Barclay Street,
  8th Floor E

  New York, New York 10286 

  Attention: Darrel Thompson

  Telephone: (212) 815-2886 

  Facsimile: (212) 815-2850

  or at
    the following address for all other notices:

     The Bank of New York

   Corporate Trust 

   Dealing & Trading Unit

   101 Barclay Street, 8E

   New York, New York 10286 

   Attention: Fernando Acebedo 

   Telephone: (212) 815-2915 

   Facsimile: (212) 815-2830; or

  (d) as to the Administrative Agent,
  at the following address:

  
    JPMorgan Chase Bank

    1111 Fannin, 10th Floor 

    Houston, Texas 77002

    Attention: Andrew Perkins 

    Telephone: (713) 750-3510

    Facsimile: (713) 750-2223
  

 Except
    as otherwise provided in this Agreement, all such communications shall be
    deemed to have been duly given when transmitted by telex or telecopier or
    personally delivered
    or, in the case of a mailed notice, upon receipt, in each case given or addressed
    as aforesaid. Notwithstanding the foregoing, any Administrative Agent’s
    Notice or Borrowing Base Report may be sent by electronic mail, shall be
    effective when received and shall be confirmed by telephone at the respective
    	telephone number above; provided that failure to confirm such notice
    	shall  not affect the effectiveness of such notice. Such electronic mail
    	shall
be directed to the following address: (a) if to the Administrative Agent,
andrew.c.perkins@chase.com or (b) if to the Collateral Agent, dathompson@bankofny.com.
    	Any party may change its mailing address, telephone number, facsimile
    	number or electronic mail address by notifying the other parties hereto
    	in accordance
with the provisions set forth above.

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  Section
      10.03   Fees and Expenses of Custodian.   The
      Parent Borrower agrees to pay any and all fees, expenses, charges and costs
      of the Custodian upon demand, and in no event or circumstance will the
      Collateral Agent, the Administrative Agent or any Lender have any liability
    therefor.

  Section
      10.04   Expenses etc. of Collateral Agent, Custodian
      and Administrative Agent; Indemnity.   (a)   The
      Parent Borrower agrees to pay or reimburse each of the Collateral Agent,
      the Custodian and the Administrative Agent for (i) all reasonable out-of-pocket
      costs and expenses of the the Collateral Agent, the Custodian or the Administrative
      Agent (including, without limitation, the reasonable fees and expenses
      of legal counsel) in connection with (x) any enforcement or collection
      proceedings, including, without limitation, all manner of participation
      in or other involvement with (a) bankruptcy, insolvency, receivership,
      foreclosure, winding up or liquidation proceedings, (b) judicial or regulatory
      proceedings and (c) workout, restructuring or other negotiations or proceedings
      (whether or not the workout, restructuring or transaction contemplated
      thereby is consummated) and (y) the enforcement of this Section 10.04;
      and (ii) all transfer, stamp, documentary or other similar taxes, assessments
      or charges levied by any governmental or revenue authority in respect of
      this Agreement or any other document referred to herein and all costs,
      expenses, taxes, assessments and other charges incurred in connection with
      any filing, registration, recording or perfection of any security interest
    contemplated hereby.

  (b)   The
    Parent Borrower agrees to indemnify, reimburse and hold the Collateral Agent,
    the Custodian, the Administrative Agent, each other Secured Creditor and their
    respective successors, assigns, employees, affiliates and agents (hereinafter
    referred to individually as “Indemnitee,”
    and collectively as “Indemnitees”) harmless from any and
    all liabilities, obligations, damages, injuries, penalties, claims, demands,
    actions, suits, judgments and any and all costs, expenses or disbursements
    (including reasonable attorneys’ fees and expenses) (for the purposes
    of this Section 10.04(b), the foregoing are collectively called “expenses”)
    of whatsoever kind and nature imposed on, asserted against or incurred by
    any of the Indemnitees in any way relating to or arising out of this Agreement,
    any other Security Document or any other document executed in connection herewith
    or therewith or in any other way connected with the administration of the
    transactions contemplated hereby or thereby or the enforcement of any of the
    terms of, or the preservation of any rights under any thereof, or in any way
    relating to or arising out of the ownership, purchase, delivery, control,
    acceptance, lease, financing, possession, sale, return or other disposition,
    or use of the Collateral, the violation of the laws of any country, state
    or other governmental body or unit, any tort, or contract claim; provided
    that no Indemnitee shall be indemnified pursuant to this Section 10.04(b)
    for losses, damages or liabilities to the extent caused by the gross negligence
    or willful misconduct of such Indemnitee (as determined by a court of competent
    jurisdiction in a final and non-appealable decision). The Parent Borrower
    agrees that upon written notice by any Indemnitee of the assertion
    of such a liability, obligation, damage, injury, penalty, claim, demand,
    action, suit or judgment, the Parent Borrower shall assume full responsibility
    for the defense thereof. Each Indemnitee agrees to use its best efforts to
    promptly notify the Parent Borrower of any such assertion of which such Indemnitee
    has knowledge.   

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  (c)   Without
    limiting the application of Section 10.04(a) hereof, the Parent Borrower agrees
    to pay or reimburse the Collateral Agent and the Administrative Agent for
    any and all reasonable fees, costs and expenses of whatever kind or nature
    incurred in connection with the creation, preservation or protection of the
    Collateral Agent’s Liens on, and security interest in, the Collateral,
    including, without limitation, all fees and taxes in connection with the recording
    or filing of instruments and documents in public offices, payment or discharge
    of any taxes or Liens upon or in respect of the Collateral, premiums for insurance
    with respect to the Collateral and all other fees, costs and expenses in connection
    with protecting, maintaining or preserving the Collateral and the Collateral
    Agent’s interest therein, whether through judicial proceedings or otherwise,
    or in defending or prosecuting any actions, suits or proceedings arising out
    of or relating to the Collateral.

  (d)   Without
    limiting the application of Section 10.04(a) or (b) hereof, the Parent Borrower
    agrees to pay, indemnify and hold each Indemnitee harmless from and against
    any loss, costs, damages and expenses which such Indemnitee may suffer, expend
    or incur in consequence of or growing out of any misrepresentation by any
    Grantor in this Agreement, any other Credit Document or in any writing contemplated
    by or made or delivered pursuant to or in connection with this Agreement or
    any other Credit Document.

  (e)   If
    and to the extent that the obligations of the Parent Borrower under this Section
    10.04 are unenforceable for any reason, the Parent Borrower hereby agrees
    to make the maximum contribution to the payment and satisfaction of such obligations
    which is permissible under applicable law.

  Section
      10.05   Indemnity Obligations Secured by Collateral;
      Survival.   Any amounts paid by any Indemnitee as to
      which such Indemnitee has the right to reimbursement shall constitute Secured
      Obligations secured by the Collateral. The indemnity obligations of the
      Parent Borrower contained in Section 10.04(b) shall continue in full force
      and effect notwithstanding the full payment of all of the other Secured
      Obligations and notwithstanding the full payment of all the notes issued,
      and Loans made, under the Credit Agreement, the termination of all Letters
      of Credit issued under the Credit Agreement and the payment of all other
      Secured Obligations and notwithstanding the discharge thereof and the occurrence
    of the Termination Date.

  Section
      10.06   Waiver; Amendment.   Except
      as otherwise expressly provided in this Agreement, none of the terms and
      conditions of this Agreement may be changed, waived, modified or varied
      in any manner whatsoever unless in writing duly signed by each Grantor
      directly affected thereby (it being understood that the addition or release
      of any Grantor hereunder shall not constitute a change, waiver, discharge
      or termination affecting any Grantor other than the Grantor so added or
      released) and by the Collateral Agent (with the written consent of the
      Majority Tranche 1 Lenders or, to the extent provided in the Credit Agreement,
    each of the Lenders).

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  Section 10.07   Successors
    and Assigns.   This
    Agreement shall be binding upon and inure to the benefit of the parties hereto
    and their respective successors and permitted assigns; provided that
    no Grantor nor the Custodian may assign any of its respective rights or obligations
    hereunder without the prior consent of the Collateral Agent.
  

  Section
      10.08   Termination.   After the Termination
      Date, this Agreement shall terminate (provided that all indemnities set
      forth herein including, without limitation, those in Section 10.04(b) hereof,
      shall survive such termination) and the Collateral Agent, at the request
      and expense of the Grantor, will promptly execute and deliver to such Grantor
      and/or authorize the filing of a proper instrument or instruments (including
      a release of all Liens granted hereunder and Uniform Commercial Code termination
      statements on form UCC-3) acknowledging the satisfaction and termination
      of this Agreement as to such Grantor, and will duly assign, transfer and
      deliver to such Grantor (without recourse and without any representation
      or warranty) such of the Collateral of such Grantor as may be in the possession
      of the Collateral Agent or Custodian and as has not theretofore been sold
      or otherwise applied or released pursuant to this Agreement. As used in
      this Agreement, “Termination Date” shall mean the date
      upon which the Total Tranche 1 Commitment under the Credit Agreement has
      been terminated and, no Tranche 1 Note under the Credit Agreement is outstanding
      and all Tranche 1 Revolving Loans thereunder have been repaid in full,
      all Tranche 1 Letters of Credit issued under the Credit Agreement have
      been terminated and all Secured Obligations then due and payable have been
      paid in full. Upon termination of this Agreement pursuant to this Section
      10.08, the Collateral Agent will, at each Grantor’s expense and upon
      its request, return to the respective Grantor such of the Collateral as
      shall not have been sold, previously released or otherwise applied pursuant
      to the terms of this Agreement or any other Credit Document and execute
      and deliver to the respective Grantor such documents as such Grantor shall
    reasonably request to evidence such termination.

  Section
      10.09   Powers Coupled with an Interest.   Except
      to the extent otherwise expressly provided herein, all authorizations and
      agencies herein contained with respect to the Collateral are irrevocable
    and powers coupled with an interest.

  Section
      10.10   Captions.   The table of contents
      and captions and section headings appearing herein are included solely
      for convenience of reference and are not intended to affect the interpretation
    of any provision of this Agreement.

  Section
      10.11   Counterparts.   This Agreement
      may be executed in any number of counterparts, all of which taken together
      shall constitute one and the same instrument and any of the parties hereto
      may execute this Agreement by signing any such counterpart. 
  

  Section
      10.12   Additional Grantors.   It
      is understood and agreed that any Person that desires to become a Grantor
      hereunder, or is required to execute a counterpart of this Agreement after
      the date hereof pursuant to the requirements of the Credit Agreement or
      any other Credit Document, shall become a Grantor hereunder by (x) executing
      a counterpart hereof and delivering same to the Collateral Agent, or by
      executing an assumption agreement in form and substance reasonably satisfactory
      to the Collateral Agent, (y) delivering supplements to Annex A as are necessary
      to cause such Annex to be complete and accurate with respect to such additional
    Grantor on such date and (z) taking all actions as specified in this Agreement
(including, without limitation, the establishment of the appropriate Collateral
Accounts with the Custodian in accordance with Section 4.02) as would have been
taken by such Grantor had it been an original party to this Agreement, in each
case with all documents required above to be delivered to the Collateral Agent
and with all documents and actions required above to be taken to the reasonable
satisfaction of the Collateral Agent.   

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  Section
    10.13   Governing
    Law; Jurisdiction; Consent to Service of Process.   (a)   This Agreement shall be construed in accordance with and governed by the law
    of the State of New York. 

(b)   Each
    party hereto hereby irrevocably and unconditionally submits, for itself and
    its property, to the non-exclusive jurisdiction of the Supreme Court of the
    State of New York sitting in New York County and of the United States District
    Court of the Southern District of New York, and any appellate court from
    any thereof, in any action or proceeding arising out of or relating to this
    Agreement, or for recognition or enforcement of any judgment, and each of
    the parties hereto hereby irrevocably and unconditionally agrees that all
    claims in respect of any such action or proceeding may be heard and determined
    in such New York State court or, to the extent permitted by law, in such
    Federal court. Each of the parties hereto agrees that a final judgment in
    any such action or proceeding shall be conclusive and may be enforced in
    other jurisdictions by suit on the judgment or in any other manner provided
    by law. Nothing in this Agreement shall affect any right that the Collateral
    Agent or any Secured Creditor may otherwise have to bring any action or proceeding
    relating to this Agreement against any Grantor or its properties in the courts
    of any jurisdiction.

(c)   Each
    party hereto hereby irrevocably and unconditionally waives, to the fullest
    extent it may legally and effectively do so, any objection which it may now
    or hereafter have to the laying of venue of any suit, action or proceeding
    arising out of or relating to this Agreement in any court referred to in
    paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
    waives, to the fullest extent permitted by law, the defense of an inconvenient
    forum to the maintenance of such action or proceeding in any such court.

(d)   Each
    party to this Agreement irrevocably consents to service of process in the
    manner provided for notices in Section 11.01 of the Credit Agreement. Nothing
    in this Agreement will affect the right of any party to this Agreement to
    serve process in any other manner permitted by law.

(e)   Each
    Grantor hereby irrevocably designates, appoints and empowers C T Corporation,
    with offices on the date hereof at 111 Eighth Avenue, 13th Floor, New York, New York 10011, as its designee, appointee and agent to receive, accept and acknowledge for and on its behalf, and in respect of its property, service of any and all legal process, summons, notices and documents which may be served in any such action or proceeding. If for any reason such designee, appointee and agent shall cease to be available to act as such, each Grantor agrees to designate a new designee, appointee and agent in New York City on the terms and for the purposes of this provision reasonably satisfactory to the Collateral Agent under this Agreement. 

Section 10.14   WAIVER
      OF JURY TRIAL.   EACH
      PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
      LAW, ANY RIGHT IT
      MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
      ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
      HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
      HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
      PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
      NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
      (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED
      TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
      AND CERTIFICATIONS IN THIS SECTION. 

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Section 10.15   Integration.   This
    Agreement embodies the entire agreement and understanding among the parties
    hereto with respect to the subject matter hereof and supersedes all prior
    agreements and understandings between any Grantor and the Collateral Agent
    with respect to the subject matter thereof. 

Section 10.16   Financial
      Assets.   Each
      Grantor, the Custodian and the Collateral Agent hereby agree that the Custodian
      will treat any and all Securities and any and all other Property and assets
      (other than Cash) credited from time to time to each Grantor’s Securities
      Account as Financial Assets.

*****

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written.

	 	ENDURANCE
        SPECIALTY HOLDINGS LTD.,

as a Grantor  
	 	 	 
	 	 	 
	 	 	 
	 	By:	/s/ John
    Del Col
	 	 	

	 	 	Name:
    John Del Col
	 	 	Title:
    General Counsel and Secretary 
	 	 	 
	 	 	 
	 	 	 
	 	ENDURANCE
        SPECIALTY
INSURANCE

LTD., as a Grantor  
	 	 	 
	 	 	 
	 	 	 
	 	By:	/s/ John
    Del Col
	 	 	

	 	 	Name:
    John Del Col
	 	 	Title:
    General Counsel and Secretary
	 	 	 
	 	 	 
	 	 	 
	 	 ENDURANCE
        U.S. HOLDINGS
CORP., as a Grantor  
	 	 	 
	 	 	 
	 	By:	/s/ Steve
    Carlsen
	 	 	

	 	 	Name:
    Steve Carlsen
	 	 	Title:
    President 
	 	 	 
	 	 	 
	 	 	 
	 	 ENDURANCE
        WORLDWIDE HOLDINGS LIMITED,
as a Grantor  
	 	 	 
	 	 	 
	 	By:	/s/ Mark
    Boucher
	 	 	

	 	 	Name:
    Mark Boucher
	 	 	Title:
        Chief Executive
Office  

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	 	 ENDURANCE
        WORLDWIDE INSURANCE

LIMITED,
as a Grantor  
	 	 	 
	 	 	 
	 	 	 
	 	By:	/s/ Mark
      Boucher    
	 	 	

	 	 	 Name:
    Mark Boucher
	 	 	Title:
    Chief Executive Office
	 	 	 
	 	 	 
	 	 	 
	 	 THE
        BANK OF NEW YORK,
as Collateral Agent 
	 	 	 
	 	 	 
	 	By:	/s/ Andres
    E. Serrano
	 	 	

    
	 	 	Name:
        Andres E.
Serrano
	 	 	Title:
    Vice President
	 	 	 
	 	 	 
	 	 	 
	 	 THE
    BANK OF NEW YORK, as Custodian 
	 	 	 
	 	 	 
	 	By:	/s/ Michael
    Jesse
	 	 	

    
	 	 	Name:
    Michael Jesse
	 	 	Title:
    Vice President  
	 	 	 
	 	 	 
	 	 	 
	 	 	 JPMORGAN
        CHASE BANK, as
Administrative Agent  
	 	 	 
	 	 	 
	 	By: 	/s/ Helen L. Newcomb
	 	  	

	 	 	Name: Helen L. Newcomb
	 	 	Title: Vice President

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ANNEX A

SCHEDULE OF LEGAL NAMES,
TYPE OF ORGANIZATION

(AND WHETHER A REGISTERED ORGANIZATION AND/OR

A TRANSMITTING
UTILITY), JURISDICTION OF ORGANIZATION,

LOCATION
AND ORGANIZATIONAL IDENTIFICATION NUMBERS

	  	 	 	 	 	 	  	 	 	 	Grantor’s	 	 
	 	 	Type of	 	 	 	 	 	Grantor’s	 	Organization	 	 
	 	 	Organization
    (or,	 	 	 	 	 	Location (for	 	Identification	 	 
	Exact
    Legal 	 	if the
    Grantor is	 	Registered	 	 	 	purposes of NY	 	Number (or, if it	 	Transmitting
	Name of
    Each	 	 an
    Individual, so	 	Organization?	 	Jurisdiction of	 	UCC	 	has none, so	 	Utility?
	Grantor	 	 indicate)	 	(Yes/No)	 	Organization	  	§ 9-307)	 	indicate)	 	(Yes/No)
	
	 	
	 	
	 	
	 	
	 	
	 	

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EXHIBIT A

FORM OF COLLATERAL RELEASE REQUEST

[Date]

This is a
    Collateral Release Request to which reference is made in Section 4.04 of
    the Pledge and Security Agreement, dated as of August 6, 2004 (as the same
    may be amended, supplemented or otherwise modified from time to time, the “Security
    Agreement”), made by the Grantors from time to time party thereto
    in favor of The Bank of New York, as Collateral Agent (together with any
    successor Collateral Agent, the “Collateral Agent”), for
    the benefit of the Secured Creditors (as defined below), The Bank of New
    York, as Custodian (in such capacity, the “Custodian”),
    and JPMorgan Chase Bank, as Administrative Agent. Unless otherwise
defined,
capitalized terms used herein shall have the meanings ascribed thereto in the
Security Agreement and if not defined therein, in the Credit Agreement.

The undersigned,
    as a Grantor under the Security Agreement (the “Grantor”)
    hereby requests that the Collateral Agent, on _____ __, 200_, release from
    the Lien of the Security Agreement the Cash and/or Securities described in
    Schedule I attached hereto.

The Grantor
    hereby represents and warrants that (a) (i) no Default or Event of Default
    has occurred and is continuing or would result after giving effect to the
    release requested hereby, (ii) the Borrowing Base with respect to the Grantor
    is equal to at least 100% of the Grantor’s Secured Obligations or (b)
    if an Event of Default has occurred and is continuing, such release is of
    Securities against (x) simultaneous payment of Cash by the Grantor to the
    Collateral Agent for deposit in the Grantor’s Deposit Account in an
    amount equal to the aggregate Market Value of the released Securities or
    (y) simultaneous transfer by the Grantor to the Collateral Agent of Securities
    having an aggregate Market Value in an amount at least equal to the aggregate
    Market Value of the released Securities.

The Grantor
    hereby certifies that, with respect to each item of Collateral listed on
    said Schedule I, as to each of the matters set forth in Sections 3.01 and
    4.04 of the Security Agreement, the Grantor’s representations and warranties,
    and all information provided by the Grantor, are true and correct as of the
    date hereof.

Schedule
    I attached hereto shall be deemed to be incorporated herein and in the Security
    Agreement as if set forth in full herein and therein.

	 	[GRANTOR]
	 	 
	 	 
	 	By
	 	 	

	 	Name:
	 	Title:

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EXHIBIT B

FORM OF COLLATERAL TRANSFER REQUEST

[Date]

This is a
    notice of Collateral Transfer to which reference is made in Section 4.03
    of the Pledge and Security Agreement, dated as of August 6, 2004 (as the
    same may be amended, supplemented or otherwise modified from time to time,
    the “Security Agreement”), made by the Grantors from time
    to time party thereto in favor of The Bank of New York, as Collateral Agent
    (together with any successor Collateral Agent, the “Collateral Agent”),
    for the benefit of the Secured Creditors (as defined below), The Bank of
    New York, as Custodian (in such capacity, the “Custodian”),
    and JPMorgan Chase Bank, as Administrative Agent. Unless otherwise defined,
    capitalized terms used herein shall have the meanings ascribed thereto in
    the Security Agreement and if not defined therein, in the Credit Agreement.

The undersigned,
    as a Grantor under the Security Agreement (the “Grantor”)
    hereby notifies the Collateral Agent and the Administrative Agent that the
    Cash and/or Securities described in Schedule I attached hereto shall, on
    or prior to 1:00 P.M. (New York time) on _____ __, 200_, be delivered, transferred
    or deposited with the Custodian for inclusion in the Grantor’s Borrowing
    Base.

The Grantor
    hereby certifies that, with respect to each item of Collateral listed on
    said Schedule, as to each of the matters set forth in Sections 3.01 and 4.03
    of the Security Agreement, the Grantor’s representations and warranties,
    and all information provided by the Grantor, are true and correct as of the
    date hereof.

Schedule
    I attached hereto shall be deemed to be incorporated herein and in the Security
    Agreement as if set forth in full herein and therein.

	 	[GRANTOR]
	 	 
	 	By
	 	 	

	 	 	Name:
	 	 	Title:

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SCHEDULE I

LIST OF COLLATERAL
ACCOUNTS

	PART A.	COLLATERAL DEPOSIT ACCOUNTS	 
	 	 	 
	Account Name	Account Number

	
	

	 	 	 
	PART B.	COLLATERAL SECURITIES ACCOUNTS	 
	 	 	 
	Account Name	Account Number

	
	

Table
      of Contents

			 	Page
			 	 
	Section
    1.	Definitions	2
			 	 
	Section
    2.	Appointment of Custodian.	8
			 	 
	Section
    2.01
	Appointment	8
			 	 
	Section
    3.	Representations and Covenants of each Grantor	8
			 	 
	Section
    3.01
	Representations by each Grantor	8
			 	 
	Section
    4.	Collateral; Establishment of Collateral Accounts	10
			 	 
	Section
    4.01
	Pledge, Grant of Security Interest	10
	Section
    4.02
	Establishment of Collateral Accounts	11
	Section
    4.03
	Procedures
      for Depositing Cash and Crediting Securities to Collateral
    Accounts	12
	Section
    4.04
	Procedures
    for Requesting Releases of Collateral from Collateral Accounts	13
			 	 
	Section
    5.	Effecting Credit Events	14
			 	 
	Section
    5.01
	 Effecting
    the Making of a Loan or the Issuance of a Letter of Credit	14
			 	 
	Section
    6.	Notices and Reports	14
			 	 
	Section
    6.01
	Notices and Reports; Recordkeeping	14
	Section
    6.02
	Rights of Collateral Agent with Respect to Calculations	15
			 	 
	Section
    7.	Additional Covenants of the Grantors	16
			 	 
	Section
    7.01
	Delivery and Other Perfection	16
	Section
    7.02
	Other Financing Statements and Liens	17
	Section
    7.03
	Maintenance of Borrowing Base Percentage	17
	Section
    7.04
	Voting Rights; Dividends; etc	17
	Section
    7.05
	No Removals, etc.	19
	Section
    7.06
	U.S. Securities	19
			 	 
	Section
    8	Remedies; Distribution of Collateral	19
			 	 
	Section
    8.01
	Remedies	19
	Section
    8.02
	Disposition of the Collateral	20
	Section
    8.03
	Waiver of Claims	21
	Section
    8.04
	Application of Proceeds	22

ii

  Table
        of Contents

(continued)

			 	Page
			 	 
	Section
    8.05
	Remedies Cumulative	24
	Section
    8.06
	Discontinuance of Proceedings	25
	Section
    8.07
	Rights of Collateral Agent	25
	Section
    8.08
	Effect of Bankruptcy; Obligations Absolute	25
			 	 
	Section
    9.	The Collateral Agent; The Custodian	25
			 	 
	Section
    9.01
	Limitation of Duties	25
	Section
    9.02
	Reliance by Collateral Agent and the Custodian	26
	Section
    9.03
	Appointment of Agents	26
			 	 
	Section
    10.	Miscellaneous	27
			 	 
	Section
    10.01
	No Waiver	27
	Section
    10.02
	Notices	27
	Section
    10.03
	Fees and Expenses of Custodian	28
	Section
    10.04
	Expenses
      etc. of Collateral Agent, Custodian and Administrative Agent;
    Indemnity	28
	Section
    10.05
	Indemnity Obligations Secured by Collateral; Survival	29
	Section
    10.06
	Waiver; Amendment	29
	Section
    10.07
	Successors and Assigns	30
	Section
    10.08
	Termination	30
	Section
    10.09
	Powers Coupled with an Interest	30
	Section
    10.10
	Captions	30
	Section
    10.11
	Counterparts	30
	Section
    10.12
	Additional Grantors	30
	Section
    10.13
	Governing Law; Jurisdiction; Consent to Service of Process	31
	Section
    10.14
	WAIVER OF JURY TRIAL	31
	Section
    10.15
	Integration	32
	Section
    10.16
	Financial Assets	32
			 	 
			 	 
	ANNEX
    A	Schedule of Legal Names, Type of Organization (and Whether a	 
			Registered
    Organization and/or a Transmitting Utility), Jurisdiction of 	 
	 	 	Organization,
    Location and Organizational Identification Numbers	 
			 	 
	EXHIBIT
    A	Form of Collateral Release Request	 
	EXHIBIT
    B	Form of Collateral Transfer Request	 
			 	 
	SCHEDULE
    I	List of Collateral Accounts	 

iii

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