Document:

Exhibit 10.23

 

[CONFORMED COPY

(THROUGH SECOND AMENDMENT)]

 

 

$300,000,000

 

5-YEAR REVOLVING CREDIT FACILITY

 

CREDIT AGREEMENT

 

 

Among

 

ASSURED GUARANTY LTD.,

 

ASSURED GUARANTY CORP.,

 

ASSURED GUARANTY (UK) LTD.,

 

ASSURED GUARANTY RE LTD.,

 

ASSURED GUARANTY RE OVERSEAS LTD.

 

and

 

THE BANKS PARTY HERETO

 

and

 

ABN AMRO BANK N.V.,

As Administrative Agent

 

Dated as of November 6,
2006

 

 

ABN AMRO INCORPORATED AND BANK OF AMERICA
SECURITIES LLC,

as Lead Arrangers

 

and

 

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

As Syndication Agents,

 

 

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I CERTAIN DEFINITIONS

  	
  1

  
	
   

  	
   

  
	
  Section 1.01
  Certain Definitions

  	
  1

  
	
  Section 1.02
  Construction

  	
  21

  
	
  Section 1.03
  Accounting Principles; Computations

  	
  22

  
	
   

  	
   

  
	
  ARTICLE II REVOLVING CREDIT AND LETTER OF
  CREDIT FACILITY

  	
  23

  
	
   

  	
   

  
	
  Section 2.01
  Credit Commitments

  	
  23

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

  	
  23

  
	
  Section 2.03
  Facility Fee; Letter of Credit Fee

  	
  24

  
	
  Section 2.04
  Utilization Fee

  	
  24

  
	
  Section 2.05
  Revolving Credit Loan Requests

  	
  24

  
	
  Section 2.06
  Making Revolving Credit Loans

  	
  25

  
	
  Section 2.07
  Use of Proceeds

  	
  25

  
	
  Section 2.08
  Bid Loan Facility

  	
  25

  
	
  Section 2.09
  Restriction on Loans and Letters of Credit

  	
  28

  
	
  Section 2.10
  Letters of Credit

  	
  28

  
	
  Section 2.11
  Conditions to the Issuance of all Letters of Credit

  	
  30

  
	
  Section 2.12
  Letter of Credit Requests

  	
  32

  
	
  Section 2.13
  Agreement to Repay Letter of Credit Drawings

  	
  32

  
	
  Section 2.14
  Letter of Credit Expiration Extensions

  	
  33

  
	
  Section 2.15
  Changes to Stated Amount

  	
  33

  
	
  Section 2.16
  Incremental Commitments

  	
  33

  
	
   

  	
   

  
	
  ARTICLE III INTEREST RATES

  	
  35

  
	
   

  	
   

  
	
  Section 3.01
  Interest Rate Options

  	
  35

  
	
  Section 3.02
  Revolving Credit Loans Interest Periods

  	
  36

  
	
  Section 3.03
  Interest After Default

  	
  36

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

  	
  37

  
	
  Section 3.05
  Selection of Interest Rate Options

  	
  38

  
	
   

  	
   

  
	
  ARTICLE IV PAYMENTS

  	
  38

  
	
   

  	
   

  
	
  Section 4.01
  Payments

  	
  38

  
	
  Section 4.02
  Pro Rata Treatment of Banks

  	
  38

  
	
  Section 4.03
  Interest Payment Dates

  	
  39

  
	
  Section 4.04
  Voluntary Prepayments

  	
  39

  
	
  Section 4.05
  Reduction or Termination of Commitments

  	
  41

  
	
  Section 4.06
  Additional Compensation in Certain Circumstances

  	
  41

  
	
  Section 4.07
  Taxes

  	
  43

  
	
  Section 4.08 Judgment Currency

  	
  44

  

 

i

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  Section 4.09
  Notes, Maturity

  	
  44

  
	
  Section 4.10
  Mandatory Prepayments

  	
  44

  
	
   

  	
   

  
	
  ARTICLE V REPRESENTATIONS AND WARRANTIES

  	
  45

  
	
   

  	
   

  
	
  Section 5.01
  Representations and Warranties

  	
  46

  
	
  Section 5.02
  Continuation of Representations

  	
  51

  
	
   

  	
   

  
	
  ARTICLE VI CONDITIONS OF LENDING

  	
  51

  
	
   

  	
   

  
	
  Section 6.01
  Closing Date

  	
  51

  
	
  Section 6.02
  Each Credit Event

  	
  53

  
	
   

  	
   

  
	
  ARTICLE VII
  COVENANTS

  	
  53

  
	
   

  	
   

  
	
  Section 7.01
  Affirmative Covenants

  	
  53

  
	
  Section 7.02
  Negative Covenants

  	
  56

  
	
  Section 7.03
  Reporting Requirements

  	
  62

  
	
  Section 7.04
  Bermuda Law Event

  	
  64

  
	
   

  	
   

  
	
  ARTICLE VIII DEFAULT

  	
  64

  
	
   

  	
   

  
	
  Section 8.01
  Events of Default

  	
  64

  
	
  Section 8.02
  Consequences of Event of Default

  	
  67

  
	
  Section 8.03
  Right of Competitive Bid Loan Banks

  	
  69

  
	
   

  	
   

  
	
  ARTICLE IX THE AGENT

  	
  69

  
	
   

  	
   

  
	
  Section 9.01
  Appointment

  	
  69

  
	
  Section 9.02
  Delegation of Duties

  	
  70

  
	
  Section 9.03
  Nature of Duties; Independent Credit Investigation

  	
  70

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

  	
  70

  
	
  Section 9.05
  Reimbursement and Indemnification of Agent by the Borrowers

  	
  70

  
	
  Section 9.06
  Exculpatory Provisions; Limitation of Liability

  	
  71

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

  	
  72

  
	
  Section 9.08
  Reliance by Agent and Issuing Banks

  	
  72

  
	
  Section 9.09
  Notice of Default

  	
  72

  
	
  Section 9.10
  Notices

  	
  73

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

  	
  73

  
	
  Section 9.12
  Holders of Notes

  	
  73

  
	
  Section 9.13
  Equalization of Banks

  	
  73

  
	
  Section 9.14
  Successor Agent

  	
  74

  
	
  Section 9.15
  Agent’s Fee

  	
  74

  
	
  Section 9.16
  Availability of Funds

  	
  74

  
	
  Section 9.17
  Calculations

  	
  75

  
	
  Section 9.18 Beneficiaries

  	
  75

  

 

ii

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE X MISCELLANEOUS

  	
  75

  
	
   

  	
   

  
	
  Section 10.01
  Modifications, Amendments, or Waivers

  	
  75

  
	
  Section 10.02
  No Implied Waivers; Cumulative Remedies; Writing Required

  	
  76

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

  	
  76

  
	
  Section 10.04
  Holidays

  	
  77

  
	
  Section 10.05
  Funding by Branch, Subsidiary, or Affiliate

  	
  77

  
	
  Section 10.06
  Notices

  	
  78

  
	
  Section 10.07
  Severability

  	
  79

  
	
  Section 10.08
  Governing Law

  	
  79

  
	
  Section 10.09
  Prior Understanding

  	
  79

  
	
  Section 10.10
  Duration; Survival

  	
  79

  
	
  Section 10.11
  Successors and Assigns

  	
  79

  
	
  Section 10.12
  Confidentiality

  	
  81

  
	
  Section 10.13
  Counterparts

  	
  81

  
	
  Section 10.14
  Agent’s or Bank’s Consent

  	
  81

  
	
  Section 10.15
  Exceptions

  	
  82

  
	
  Section 10.16
  CONSENT TO FORUM; WAIVER OF JURY TRIAL

  	
  82

  
	
  Section 10.17
  Tax Withholding Clause

  	
  82

  
	
  Section 10.18
  Joinder of Guarantors

  	
  83

  
	
  Section 10.19
  Limited Recourse

  	
  83

  
	
  Section 10.20
  Change of Lending Office

  	
  84

  
	
  Section 10.21 USA Patriot Act

  	
  84

  

 

LIST OF SCHEDULES AND EXHIBITS

 

	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 1.01(A)

  	
  -

  	
  PRICING GRID

  
	
  SCHEDULE 1.01(B)

  	
  -

  	
  COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES

  
	
  SCHEDULE 1.01(M)

  	
  -

  	
  MATERIAL SUBSIDIARIES

  
	
  SCHEDULE 1.01(P)

  	
  -

  	
  EXISTING LIENS

  
	
  SCHEDULE 2.10(a)

  	
  -

  	
  EXISTING LETTERS OF CREDIT

  
	
  SCHEDULE 5.01(b)

  	
  -

  	
  SUBSIDIARIES

  
	
  SCHEDULE 5.01(h)

  	
  -

  	
  REINSURANCE COVERAGE

  
	
  SCHEDULE 7.02(a)

  	
  -

  	
  EXISTING INDEBTEDNESS

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 1.01(A)

  	
  -

  	
  ASSIGNMENT AND ASSUMPTION AGREEMENT

  
	
  EXHIBIT 1.01(B)

  	
  -

  	
  BID NOTE

  
	
  EXHIBIT 1.01(G)(1)

  	
  -

  	
  GUARANTOR JOINDER

  

 

iii

 

	
  EXHIBIT 1.01(G)(2)-1

  	
  -

  	
  GUARANTY AGREEMENT OF MATERIAL NON-AGC SUBSIDIARIES

  
	
  EXHIBIT 1.01(G)(2)-2

  	
  -

  	
  GUARANTY AGREEMENT OF ASSURED GUARANTY CORP.

  
	
  EXHIBIT 1.01(G)(2)-3

  	
  -

  	
  GUARANTY AGREEMENT OF ASSURED GUARANTY LTD.

  
	
  EXHIBIT 1.01(R)

  	
  -

  	
  REVOLVING CREDIT NOTE

  
	
  EXHIBIT 2.05

  	
  -

  	
  REVOLVING CREDIT LOAN REQUEST

  
	
  EXHIBIT 2.08(a)

  	
  -

  	
  BID LOAN REQUEST

  
	
  EXHIBIT 2.12

  	
  -

  	
  LETTER OF CREDIT REQUEST

  
	
  EXHIBIT 2.16

  	
  -

  	
  INCREMENTAL COMMITMENT AGREEMENT

  
	
  EXHIBIT 6.01(d)

  	
  -

  	
  OPINION(S) OF COUNSEL

  
	
  EXHIBIT 7.03(c)

  	
  -

  	
  QUARTERLY COMPLIANCE CERTIFICATE

  

 

iv

 

CREDIT
AGREEMENT

 

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

 

W I T N E S S E T H :

 

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

 

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

 

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

 

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

 

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

 

ARTICLE I

CERTAIN
DEFINITIONS

 

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

 

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

 

ACE shall mean ACE Limited, a Cayman Islands company.

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Alternate Currency shall mean each of Euros and Pounds Sterling.

 

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

 

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

 

Applicable Margin shall mean, as applicable:

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

Base Rate shall mean (i) the greatest of (a) the
interest rate per annum announced from time to time by the Agent at its
Principal Office as its then prime rate, which rate may not be the lowest rate
then being charged commercial borrowers by the Agent, (b) the Federal
Funds Effective Rate plus 0.5% per annum and (c) the sum of 1.00% plus the
one-month Eurodollar Rate for such day. 
For purposes of this definition, Eurodollar Rate shall be determined
using Eurodollar Rate as otherwise determined by the Agent in accordance with
the definition of Eurodollar Rate, except that (x) if a given day is a
Business Day, such determination shall be made on such day (rather than two
Business Days prior to the commencement of an Interest Period) and (y) if
a given day is not a Business Day, the Eurodollar Rate for such day shall be
the rate determined by the Agent pursuant to preceding clause (x) for the
most recent Business Day preceding such day.

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Borrowing Tranche shall mean specified portions of Loans outstanding as
follows:  (i) any Loans to which a
LIBOR Option or a Bid Loan Fixed Rate Option applies which become subject to
the same Interest Rate Option under the same Loan Request by a Borrower

 

4

 

and which have the same
Interest Period shall constitute one Borrowing Tranche, and (ii) all Loans
to which a Base Rate Option applies shall constitute one Borrowing Tranche.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Consolidated Debt shall mean, at any time, an amount equal to the sum
(without duplication) of the then outstanding Indebtedness of Holdings or the
Company, as the case may be, and of each Subsidiary of Holdings or the Company,
as the case may be, (excluding, however, (i) the amount of all
Insurance-Related Guaranties, (ii) the amount of any Soft Capital,

 

5

 

(iii) the obligations of
Holdings with respect to any preferred stock of Holdings, (iv) the
obligations of any of Holdings or its Subsidiaries under Guaranteed Investment
Contracts, (v) the amount of any preferred stock issued in connection with
the Contingent Capital Facility and (vi) the aggregate outstanding
Indebtedness evidenced by all outstanding Hybrid Securities to the extent (x) the
accreted value of such Indebtedness does not exceed the HS Exclusion Amount and
(y) S&P does not include such Indebtedness under such Hybrid
Securities as financial leverage), determined and consolidated in accordance
with GAAP (but without giving effect to any fair value adjustments of any
Indebtedness otherwise permitted or required under GAAP).

 

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

 

Consolidated Net Worth shall mean, at any time, the net worth of Holdings
and its Subsidiaries at such time, determined on a consolidated basis in
accordance with GAAP; provided that, the nominal value of any securities
issued in respect of any Hybrid Securities (without giving effect to any fair
value adjustments thereof permitted or required under GAAP) shall constitute
stockholders equity to the extent (x) the accreted value of such
securities does not exceed the HS Exclusion Amount and (y) S&P does
not include such securities as financial leverage.

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

ERISA Group shall mean, at any time, Holdings and all members of
a controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control and all other entities which, together with
Holdings, are treated as a single employer under Section 414 of the
Internal Revenue Code.

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

FSA shall mean Financial Security Assurance Inc., a
corporation organized under the laws of New York.

 

8

 

FSAH shall mean Financial Security Assurance Holdings
Ltd., a corporation organized under the laws of New York.

 

FSAH Acquisition shall mean the acquisition by Holdings of all or
substantially all of the outstanding capital stock of FSAH from Dexia Holdings, Inc.

 

FSAH Purchase Agreement shall mean the purchase agreement, dated as of November 14,
2008, among Assured Guaranty Ltd., Dexia Holdings, Inc. and Dexia Credit
Local S.A.

 

FSAH Hybrid Securities shall mean the 6.40% Junior Subordinated Debentures
with a scheduled maturity date of December 15, 2036 issued by FSAH on November 22,
2006, without giving effect to any amendment or modification thereof after the
Second Amendment Effective Date.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Incremental Loan Commitment Requirements shall mean, with respect to any
provision of an Incremental Commitment on a given Incremental Loan Commitment
Date (as defined in Section 2.16(b)), the satisfaction of each of the
following conditions on or prior to the effective date of the respective
Incremental Loan Commitment Agreement:  (i) no
Potential Default or Event of Default then exists or would result therefrom, (ii) all
of the representations and warranties contained herein and in the other Loan
Documents are true and correct in all material respects at such time (unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date), (iii) the delivery by each of the Borrowers to the Agent of
an officer’s certificate executed by an Authorized Officer of such Borrower and
certifying as to compliance with preceding 

 

10

 

clauses (i) and
(ii), (iv) the delivery by the Borrowers to the Agent of an opinion, in
form and substance reasonably satisfactory to the Agent, from counsel to the
Borrowers and dated such date, covering such of the matters set forth in the
opinions of counsel delivered to the Agent on the Closing Date pursuant to Section 6.01(d) as
may be reasonably requested by the Agent, and such other matters incident to
the transactions contemplated thereby as the Agent may reasonably request, (v) the
delivery by the Borrowers to the Agent of such other officers’ certificates and
evidence of good standing as the Agent shall reasonably request and (vi) the
completion by the Borrowers of such other actions as the Agent may reasonably
request in connection with such Incremental Commitment.

 

Indebtedness shall mean, as to any Person at any time, any and all
indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or
joint or several) of such Person for or in respect of:  (i) borrowed money, (ii) amounts
raised under or liabilities in respect of any note purchase or acceptance
credit facility, (iii) payment obligations (contingent or otherwise) under
any letter of credit, currency swap agreement, interest rate swap, cap, collar
or floor agreement or other interest rate management device, (iv) any
other transaction (including forward sale or purchase agreements, capitalized
leases and conditional sales agreements) having the commercial effect of a
borrowing of money entered into by such Person to finance its operations or
capital requirements (but not including trade payables and accrued expenses
incurred in the ordinary course of business which are not represented by a
promissory note or other evidence of indebtedness and which are not more than
ninety (90) days past due), (v) any Guaranteed Investment Contract, or (vi) any
Guaranty of Indebtedness.

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Material Subsidiary shall mean (i) any Subsidiary of Holdings which
has at any time, or which will have after giving effect to any contemplated
transaction, acquisition, loan or investment, a net worth equal to or greater
than an amount which is the greater of five percent (5%) of the consolidated
tangible net worth of Holdings and its Subsidiaries or $25,000,000, (ii) any
Subsidiary of Holdings as to which Holdings requests in writing that it be a
Material Subsidiary, and (iii) any Subsidiary or Subsidiaries of Holdings
which own(s) in the aggregate 30% or more of any Material Subsidiary; and
Material Subsidiaries shall mean all such Subsidiaries.  Notwithstanding the foregoing, each of the
Company, AGRI, AGRO and the 

 

13

 

UK Borrower shall be
deemed to be a Material Subsidiary for all purposes of this Agreement and the
other Loan Documents; provided, however, that neither the Company
nor the UK Borrower shall be required to be a Guarantor (except for the
requirement that the Company guaranty all obligations of the UK Borrower).  As of the date hereof, “Material Subsidiary”
shall include, without limitation, the Subsidiaries listed on Schedule
1.01(M).

 

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

 

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

 

Multiemployer Plan shall mean any employee benefit plan which is a “multiemployer
plan” within the meaning of Section 4001(a)(3) of ERISA and to which
Holdings or any member of the ERISA Group is then making or accruing an
obligation to make contributions or, within the preceding five Plan years, has
made or had an obligation to make such contributions.

 

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

 

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

 

Notes shall mean the Revolving Credit Notes and Bid Notes.

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

Permitted Investments shall mean:

 

(i)            direct
obligations of the United States of America or the United Kingdom or any agency
or instrumentality thereof or obligations backed by the full faith and credit
of the United States of America or the United Kingdom maturing in twelve (12)
months or less from the date of acquisition;

 

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

 

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

 

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

 

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

 

Permitted Liens shall mean:

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

(ix)           Purchase
Money Security Interests;

 

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

 

(xi)           Liens
securing Credit Derivative Guaranties;

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

(xiv)        Liens
securing any Soft Capital facility on the recoveries, future premiums and
related assets relating to the portfolio covered by such Soft Capital facility;
and

 

(xv)         Liens
securing the Strip Liquidity Coverage Facility on the recoveries with respect
to any strip policy claim in respect of which a loan has been made thereunder
and any related assets.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

17

 

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

 

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

 

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

 

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

 

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

 

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

 

Required Banks shall mean

 

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

 

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

 

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

 

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

 

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

 

18

 

and/or reduced pursuant
to Section 4.05, and Revolving Credit Commitments shall mean the aggregate
Revolving Credit Commitments of all of the Banks.

 

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

 

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

 

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

 

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

 

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

 

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

 

Second Amendment Effective Date shall mean the effective date of the
Second Amendment to this Agreement dated as of April 2, 2009.

 

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

 

19

 

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

 

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

 

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

 

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

 

Strip Coverage Liquidity
Facility shall mean the $1.0 billion liquidity facility to
be provided by Dexia S.A. and/or one or more affiliates thereof to FSA as
contemplated by Section 6.13(e) of the FSAH Purchase Agreement.

 

Subsidiary of any Person at any time shall mean (i) any
corporation, company or trust of which 50% or more (by number of shares or
number of votes) of the outstanding capital stock or shares of beneficial
interest normally entitled to vote for the election of one or more directors or
trustees (regardless of any contingency which does or may suspend or dilute the
voting rights) is at such time owned directly or indirectly by such Person or
one or more of such Person’s Subsidiaries, (ii) any partnership of which
such Person is a general partner or of which 50% or more of the partnership
interests is at the time directly or indirectly owned by such Person or one or
more of such Person’s Subsidiaries, (iii) any limited liability company of
which such Person is a member or of which 50% or more of the limited liability
company interests is at

 

20

 

the time directly or
indirectly owned by such Person or one or more of such Person’s Subsidiaries or
(iv) any corporation, trust, partnership, limited liability company or
other entity which is controlled or capable of being controlled by such Person
or one or more of such Person’s Subsidiaries. 
Notwithstanding the foregoing, the Company, AGRI, AGRO and the
UK Borrower shall be deemed to be a “Subsidiary” of Holdings and, with
respect to the UK Borrower, of the Company, for all purposes in this
Agreement and the other Loan Documents; provided, however, that
neither the Company nor the UK Borrower shall be required to be a Guarantor
(except for the requirement that the Company guaranty all obligations of the UK
Borrower).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

21

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 1.03  Accounting Principles; Computations.  (a)  Except as otherwise provided in
this Agreement (as, for example, where reference is made to statutory or
regulatory financial matters), all computations and determinations as to
accounting or financial matters and all financial statements to be delivered
pursuant to this Agreement shall be made and prepared in accordance with GAAP
(including principles of consolidation where appropriate), and all accounting
or financial terms shall have the meanings ascribed to such terms by GAAP as in
effect on the date hereof applied on a basis consistent with that used in
preparing the Historical Statements referred to in Section 5.01(h)(A) [Historical
Statements]; provided that all such computations and determinations
shall be made, and all such accounting and financial terms shall be
interpreted, without giving effect to the consolidation of any variable
interest entities that would otherwise be required to be consolidated with
Holdings and its Subsidiaries in accordance with Financial Accounting Standards
Board Interpretation No. 46R.  In
the event of any change after the date hereof in GAAP, and if such change would
result in the inability to determine compliance with the financial covenants
set forth in Section 7.02 based upon Holdings’ regularly prepared
financial statements by reason of the preceding sentence, then the parties hereto
agree

 

22

 

to endeavor, in good
faith, to agree upon an amendment to this Agreement that would adjust such
financial covenants in a manner that would not affect the substance thereof,
but would allow compliance therewith to be determined in accordance with
Holdings’ financial statements at that time.

 

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

 

ARTICLE
II

 

REVOLVING
CREDIT AND LETTER OF CREDIT FACILITY

 

Section 2.01  Credit Commitments.  Subject to the terms and conditions hereof
and relying upon the representations and warranties herein set forth, each Bank
severally agrees to make Revolving Credit Loans to any Borrower (on a several
basis) at any time or from time to time on or after the date hereof to the
Expiration Date, which Revolving Credit Loans (i) may be made and
maintained in such Approved Currency as is requested by the applicable Borrower;
(ii) shall not exceed in aggregate Principal Amount outstanding an amount
which, when added to the aggregate outstanding Principal Amount of all Bid
Loans and the Letter of Credit Outstandings at such time, is equal to the sum
of the Revolving Credit Commitments at such time; (iii) shall not, in the
case of Revolving Credit Loans incurred by Holdings, AGRI and AGRO, exceed in
aggregate Principal Amount outstanding an amount which, when added to the
outstanding Principal Amount of all Bid Loans incurred by all such Borrowers in
the aggregate and the Letter of Credit Outstandings in respect of Letters of
Credit issued for the account of all such Borrowers in the aggregate, is equal
to the Holdings Sub-Limit; and (iv) shall not, in the case of Revolving
Credit Loans incurred by the UK Borrower, exceed in aggregate Principal Amount
outstanding an amount which, when added to the outstanding Principal Amount of
all Bid Loans incurred by the UK Borrower and the Letter of Credit Outstandings
in respect of Letters of Credit issued for the account of the UK Borrower, is
equal to $20,000,000.  Within such limits
of time and amount and subject to the other provisions of this Agreement, the
Borrowers may borrow, repay, and reborrow Revolving Credit Loans pursuant to
this Section 2.01.

 

Section 2.02  Nature of Banks’ Obligations with Respect
to Revolving Credit Loans.  Each Bank
shall be obligated to participate in each request for Revolving Credit Loans
pursuant to Section 2.05 [Revolving Credit Loan Requests] in accordance
with its Ratable Share.  The aggregate
Principal Amount of each Bank’s Revolving Credit Loans outstanding hereunder to
the Borrowers at any time shall never exceed its Revolving Credit
Commitment.  The

 

23

 

obligations of each Bank
hereunder are several and not joint.  The
failure of any Bank to perform its obligations hereunder shall not affect the
Obligations of the Borrowers to any other party nor shall any other party be
liable for the failure of such Bank to perform its obligations hereunder.  The Banks shall have no obligation to make
Revolving Credit Loans hereunder on or after the Expiration Date.

 

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

 

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

 

(c)           Each
Borrower severally agrees to pay to each Issuing Bank, for its own account, a
fronting fee (the “Fronting Fee”) in respect of each Letter of Credit issued by
such Issuing Bank for the account of such Borrower in an amount and on dates as
shall have separately been agreed to by such Borrower and such Issuing Bank.

 

Section 2.04  [Intentionally Omitted].

 

Section 2.05  Revolving Credit Loan Requests.  Except as otherwise provided herein, a
Borrower may from time to time prior to the Expiration Date request the Banks
to make Revolving Credit Loans in Dollars, or renew or convert the Interest
Rate Option applicable to existing Revolving Credit Loans pursuant to Section 3.01(a) [Revolving
Credit Interest Rate Options], by delivering to the Agent, not later than 10:00 a.m.,
New York time, (i) three (3) Business Days prior to the proposed
Borrowing Date with respect to the making of Revolving Credit Loans to which
the LIBOR Option applies, or with respect to the conversion to or the renewal
of the LIBOR Option for any Loans, provided that at any time when an
Event of Default shall have occurred and be continuing, a LIBOR Option shall
not be available to a Borrower if the Required Banks have so notified the
Borrower; and (ii) one (1) Business Day prior to either the proposed
Borrowing Date with respect to the making of a Revolving Credit Loan to which
the Base Rate Option applies or the last day of the preceding Revolving Credit
Loan Interest Period with respect to the conversion to the Base Rate Option for
any Loan, of a duly completed

 

24

 

Revolving Credit Loan
Request therefor substantially in the form of Exhibit 2.05 or a
Revolving Credit Loan Request by telephone immediately confirmed in writing by
letter, facsimile, email, or telex in the form of such Exhibit.  In addition, a Borrower may from time to time
prior to the Expiration Date request to make Revolving Credit Loans in
Alternate Currencies by delivering to the Agent, not later than 1:00 P.M.,
New York time, at least four Business Days prior to the Borrowing Date a
duly completed Revolving Credit Loan Request substantially in the form of Exhibit 2.05
or a Revolving Credit Loan Request by telephone immediately confirmed in writing
by letter, facsimile, email or telex in the form of such Exhibit.  Each Revolving Credit Loan Request shall be
irrevocable and shall specify (i) the identity of the applicable Borrower;
(ii) the respective Approved Currency for such Loan; (iii) the proposed
Borrowing Date; (iv) the aggregate amount of the proposed Loans comprising
each Borrowing Tranche (stated in the applicable Approved Currency), which
shall be (A) for all Loans made to Holdings, the Company, AGRI and AGRO,
in integral multiples of $1,000,000 and not less than $10,000,000 for each
Borrowing Tranche to which the LIBOR Option applies and not less than the
lesser of $500,000 or the maximum amount available for Borrowing Tranches to
which the Base Rate Option applies and (B) for all Loans made to the UK
Borrower, in integral multiples of $1,000,000 for each Borrowing Tranche to
which the LIBOR Option applies and not less than $500,000 or the maximum amount
available for Borrowing Tranches to which the Base Rate Option applies; (v) whether
Revolving Credit LIBOR Option or Base Rate Option shall apply to the proposed
Loans comprising the applicable Borrowing Tranche; and (vi) in the case of
a Borrowing Tranche to which the Revolving Credit LIBOR Option applies, an
appropriate Revolving Credit Interest Period for the Loans comprising such
Borrowing Tranche.

 

Section 2.06  Making Revolving Credit Loans.  The Agent shall, promptly after receipt by it
of a Revolving Credit Loan Request pursuant to Section 2.05 [Revolving
Credit Loan Requests], notify the Banks of its receipt of such Loan Request
specifying:  (i) the applicable
Borrower making the Loan Request; (ii) the proposed Borrowing Date and the
time and method of disbursement of the Revolving Credit Loans requested
thereby; (iii) the amount and type of each such Revolving Credit Loan
(stated in the applicable Approved Currency) and the applicable Interest Period
(if any); and (iv) the apportionment among the Banks of such Revolving
Credit Loans as determined by the Agent in accordance with Section 2.02
[Nature of Banks’ Obligations].  Each
Bank shall remit the principal amount of each Revolving Credit Loan to the
Agent such that the Agent is able to, and the Agent shall, to the extent the
Banks have made funds available to it for such purpose and subject to Section 6.02
[Each Additional Loan], fund such Revolving Credit Loans to the applicable
Borrower in the applicable Approved Currency and immediately available funds at
the Principal Office prior to 2:00 p.m., New York time, on the
applicable Borrowing Date, provided that if any Bank fails to remit such
funds to the Agent in a timely manner, the Agent may elect in its sole
discretion to fund with its own funds the Revolving Credit Loans of such Bank
on such Borrowing Date, and such Bank shall be subject to the repayment
obligation in Section 9.16 [Availability of Funds].

 

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

 

Section 2.08  Bid Loan Facility.  (a)  Bid Loan Requests.  Except as otherwise provided herein, any
Borrower may from time to time prior to the Expiration Date request that

 

25

 

the Banks make Bid Loans
by delivery to the Agent not later than 10:00 A.M., New York time, of
a duly completed request therefor substantially in the form of Exhibit 2.08(a) hereto
or a request by telephone immediately confirmed in writing by letter,
facsimile, email, or telex (each, a “Bid Loan Request”) at least three (3) Business
Days prior to the proposed Bid Loan Borrowing Date if the applicable Borrower
is requesting Fixed Rate Bid Loans and four (4) Business Days prior to the
proposed Bid Loan Borrowing Date if the applicable Borrower is requesting Bid
Loans with the Bid Loan LIBOR Rate Option of one, two, three, or six months’
duration.  Each Bid Loan Request shall be
irrevocable and shall specify (i) the identity of the applicable Borrower;
(ii) the respective Approved Currency for such Loan; (iii) the
proposed Bid Loan Borrowing Date; (iv) whether the applicable Borrower is
electing the Bid Loan Fixed Rate Option or the Bid Loan LIBOR Option; (v) the
term of the proposed Bid Loan (the “Bid Loan Interest Period”), which may be no
less than seven (7) day(s) and no longer than one hundred eighty
(180) days if the applicable Borrower is requesting a Fixed Rate Bid Loan and
one, two, three, or six months if the applicable Borrower is requesting a LIBOR
Bid Loan; and (vi) the maximum principal amount (the “Requested Amount”)
of such Bid Loan, which (x) in the case of Bid Loans to Holdings, the
Company, AGRI and AGRO, shall be not less than $10,000,000 and shall be an
integral multiple of $1,000,000 and (y) in the case of Bid Loans to the
UK Borrower, shall be not less than $1,000,000 and shall be an integral
multiple of $1,000,000.  After giving
effect to such Bid Loan and any other Loan made on or before the Bid Loan
Borrowing Date, the sum of the aggregate Principal Amount of all Revolving
Credit Loans and Bid Loans outstanding plus the Letter of Credit Outstandings
shall not exceed the aggregate amount of the Revolving Credit Commitments of
the Banks.  In addition, after giving
effect to any such Bid Loan incurred by (i) Holdings, AGRI and AGRO and
any other Loan made on or before the Bid Loan Borrowing Date, the aggregate
outstanding Principal Amount of all Bid Loans and Revolving Credit Loans
incurred by all such Borrowers plus the Letter of Credit Outstandings in
respect of Letters of Credit issued for the account of all such Borrowers shall
not exceed the Holdings Sub-Limit; and (ii) the UK Borrower and any other
Loan made on or before the Bid Loan Borrowing Date, the aggregate outstanding
Principal Amount of all Bid Loans and Revolving Credit Loans incurred by the UK
Borrower plus the Letter of Credit Outstandings in respect of Letters of Credit
issued for the account of the UK Borrower shall not exceed $20,000,000.  Notwithstanding any provision hereof to the
contrary, no Bid Loan may be requested for a period that would end beyond the
Expiration Date.

 

(b)           Bidding.  The Agent shall promptly after receipt by it
of a Bid Loan Request pursuant to Section 2.08(a) notify the Banks of
its receipt of such Bid Loan Request specifying (i) the identity of the
applicable Borrower, (ii) the proposed Bid Loan Borrowing Date, (iii) whether
the proposed Bid Loan shall be a Fixed Rate Bid Loan or a LIBOR Bid Loan, (iv) the
Bid Loan Interest Period, (v) the principal amount of the proposed Bid
Loan and (vi) the Approved Currency for such Bid Loan.  Each Bank may submit a bid (a “Bid”) to the
Agent by telephone (immediately confirmed in writing by letter, facsimile,
email, or telex) not later than the following (each, as applicable, a “Bid
Deadline”):  10:00 A.M.
New York time two (2) Business Day before the proposed Bid Loan
Borrowing Date if the applicable Borrower is requesting a Fixed Rate Bid Loan
or 10:00 A.M. New York time three (3) Business Days before the
proposed Bid Loan Borrowing Date if the applicable Borrower is requesting a
LIBOR Bid Loan of one, two, three, or six months’ duration.  Each Bid shall specify:  (A) the principal amount of proposed Bid
Loans offered by such Bank (the “Offered Amount”) which (i) may be less
than, but shall not exceed, the Requested Amount, (ii) shall be at least
$1,000,000 and shall

 

26

 

be an integral multiple
of $1,000,000 and (iii) may exceed such Bank’s Revolving Credit
Commitment; and (B) the Fixed Rate which shall apply to such proposed Bid
Loan if the applicable Borrower has requested a Fixed Rate Bid Loan or the
LIBOR Bid Loan Spread which shall apply to such proposed Bid Loan if the
applicable Borrower has requested a LIBOR Bid Loan and which may be a positive
or negative number.  If any Bid omits
information required hereunder, the Agent may in its sole discretion attempt to
notify the Bank submitting such Bid.  If
the Agent so notifies a Bank, such Bank may resubmit its Bid, provided
that it does so prior to the applicable Bid Deadline.  The Agent shall promptly notify the
applicable Borrower of the Bids which it timely received from the Banks.  If the Agent in its capacity as a Bank shall,
in its sole discretion, make a Bid, it shall notify the Borrower of such Bid at
least one-half hour before the applicable Bid Deadline.

 

(c)           Accepting
Bids.  The applicable Borrower, at
its option, shall irrevocably accept or reject Bids by notifying the Agent of
such acceptance or rejection by telephone (immediately confirmed in writing by
letter, facsimile, email, or telex) not later than one hour after the
applicable Bid Deadline.  If the
applicable Borrower elects to accept any Bids, its acceptance must meet the following
conditions:  (1) the total amount
which (A) Holdings, the Company, AGRI and AGRO accepts from all Banks must
not be less than $10,000,000 and shall be in integral multiples of $1,000,000
and (B) the UK Borrower accepts from all Banks shall be in integral
multiples of $1,000,000, and may not exceed the Requested Amount; (2) the
applicable Borrower must accept Bids based solely on the amount of the Fixed
Rates or LIBOR Bid Loan Spreads, as the case may be, which each of the Banks
quoted in their Bids in ascending order of the amount of Fixed Rates or LIBOR
Bid Loan Spreads; (3) the applicable Borrower may not borrow Bid Loans
from any Bank on the Bid Loan Borrowing Date in an amount exceeding such Bank’s
Offered Amount; (4) if two or more Banks make Bids at the same Fixed Rate
(if the applicable Borrower Requested a Fixed Rate Bid Loan) or LIBOR Bid Loan
Spread (if the applicable Borrower Requested a LIBOR Bid Loan) and the
applicable Borrower desires to accept a portion but not all of the Bids at such
Fixed Rate or LIBOR Bid Loan Spread, as the case may be, the applicable
Borrower shall accept a portion of each Bid equal to the product of the Offered
Amount of such Bid times the fraction obtained by dividing the total amount of
Bids which the applicable Borrower desires to accept at such Fixed Rate or
LIBOR Bid Loan Spread, as the case may be, by the sum of the Offered Amounts of
the Bids at such Fixed Rate or LIBOR Bid Loan Spread, provided that the
applicable Borrower shall round the Bid Loans allocated to each such Bank
upward or downward as the applicable Borrower may select to integral multiples
of $1,000,000.  The Agent shall (i) promptly
notify a Bank that has made a Bid of the amount of its Bid that was accepted or
rejected by the applicable Borrower and (ii) as promptly as practical
notify all of the Banks of all Bids submitted and those which have been
accepted.

 

(d)           Funding
Bid Loans.  Each Bank whose Bid or
portion thereof is accepted shall remit the principal amount of its Bid Loan to
the Agent by 12:00 Noon on the Bid Loan Borrowing Date.  The Agent shall make such funds available to
the applicable Borrower on or before 1:00 P.M. on the Borrowing Date, provided
that the conditions precedent to the making of such Bid Loan set forth in Section 6.02
have been satisfied not later than 10:00 A.M. New York time on the
proposed Bid Loan Borrowing Date.  If
such conditions precedent have not been satisfied prior to such time, then (i) the
Agent shall not make such funds available to the applicable Borrower, (ii) the
Bid Loan Request shall be deemed to be canceled, (iii) the Agent shall
return the amount previously funded to the Agent by each applicable Bank no
later than the

 

27

 

next following Business
Day, and (iv) the applicable Borrower shall be obligated to each such Bank
for any loss, costs, and expenses applicable pursuant to Section 4.06(b) [Indemnity].  The applicable Borrower shall immediately
notify the Agent of any failure to satisfy the conditions precedent to the
making of Bid Loans under Section 6.02. 
The Agent may assume that the applicable Borrower has satisfied such
conditions precedent if the applicable Borrower (i) has delivered to the
Agent any documents required to be delivered under Section 6.02, (ii) the
applicable Borrower has not notified the Agent that any other conditions
precedent have not been satisfied, and (iii) the Agent has no actual
notice of such a failure.

 

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

 

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

 

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

 

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

 

(b)           Immediately
upon the issuance by any Issuing Bank of any Letter of Credit, such Issuing
Bank shall be deemed to have sold and transferred to each Bank other than such
Issuing Bank (each such Bank, in its capacity under this Section 2.10(b),
a “Participant”), and each such Participant shall be deemed irrevocably and
unconditionally to have purchased

 

28

 

and received from such
Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such Participant’s Ratable Share, in such
Letter of Credit, each drawing made thereunder and the obligations of each
Borrower under this Agreement with respect thereto, and any security therefor
or guaranty pertaining thereto.  Upon any
change in the Commitments or Ratable Shares of the Banks pursuant to this
Agreement, it is hereby agreed that, with respect to all outstanding Letters of
Credit and Unpaid Drawings, there shall be an automatic adjustment to the
participation amounts pursuant to this Section 2.10 to reflect the new
Ratable Shares of the assignor and assignee Bank or of all Banks with
Commitments, as the case may be.

 

(c)           In
the event that any Issuing Bank makes any payment under any Letter of Credit
and the respective Borrower shall not have reimbursed such amount in full to
such Issuing Bank pursuant to Section 2.13, such Issuing Bank shall
promptly notify the Administrative Agent, which shall promptly notify each
Participant, of such failure, and each Participant shall promptly and
unconditionally pay to such Issuing Bank the amount of such Participant’s
Ratable Share of such unreimbursed payment in the respective Approved Currency
and in immediately available funds.  If,
prior to 11:00 a.m., New York time, on any Business Day, the
Administrative Agent so notifies any Participant required to fund a payment
under a Letter of Credit, such Participant shall make available to such Issuing
Bank in the respective Approved Currency and in immediately available funds
such Participant’s Ratable Share of the amount of such payment on such Business
Day (or, if notice is given after 11:00 a.m., New York time, on any
Business Day, on the next Business Day). 
If and to the extent such Participant shall not have so made its Ratable
Share of the amount of such payment available to such Issuing Bank, such Participant
agrees to pay to such Issuing Bank, forthwith on demand such amount, together
with interest thereon, for each day from such date to but excluding the date
such amount is paid to such Issuing Bank at the overnight Base Rate.  The failure of any Participant to make
available to such Issuing Bank its Ratable Share of any payment under any
Letter of Credit shall not relieve any other Participant of its obligation
hereunder to make available to such Issuing Bank its Ratable Share of any
payment on the date required, as specified above, but no Participant shall be
responsible for the failure of any other Participant to make available to such
Issuing Bank such other Participant’s Ratable Share of any such payment.

 

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

 

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

 

29

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

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

 

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

 

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

 

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

 

(iv)          no
Letter of Credit shall be issued if after giving effect to any such Letter of
Credit issued for the account of (i) Holdings, AGRI and AGRO and any other
Loan made on or before the issuance of such Letter of Credit, the aggregate
Principal Amount of all Bid Loans and Revolving Credit Loans incurred by all
such Borrowers and the Letter of Credit Outstandings in respect of Letters of
Credit issued for the account of all such Borrowers would exceed the Holdings
Sub-Limit and (ii) the UK Borrower and any other Loan made on or before
the issuance of such Letter of Credit, the aggregate Principal Amount of all
Bid Loans and Revolving Credit Loans incurred by the UK Borrower and the
Letter of Credit Outstandings in respect of Letters of Credit issued for the
account of the UK Borrower would exceed $20,000,000;

 

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

 

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

 

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

 

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

 

31

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)           Each
Borrower’s obligation under this Section 2.13 to reimburse each Issuing
Bank with respect to Unpaid Drawings of such Borrower (including, in each case,
interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which such Borrower may have or have had against such Issuing Bank, or
any Issuing Bank, including, without limitation, any defense based upon the
failure of any drawing under a Letter of Credit to conform to the terms of the
Letter of Credit or any non-application or misapplication by the beneficiary of
the proceeds

 

32

 

of such drawing; provided,
however, that no Borrower shall be obligated to reimburse any Issuing
Bank for any wrongful payment made by such Issuing Bank under a Letter of
Credit as a result of acts or omissions constituting willful misconduct or
gross negligence on the part of such Issuing Bank (as determined by a court of
competent jurisdiction in a final and non-appealable decision).

 

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

 

Section 2.14  Letter of Credit Expiration Extensions.  Each Bank acknowledges that to the extent
provided under the terms of any Letter of Credit, the expiration date of such
Letter of Credit will be automatically extended for an additional year, without
written amendment, unless within a set period of time prior to the expiration
date of such Letter of Credit, notice is given by the respective Issuing Bank
in accordance with the terms of the respective Letter of Credit (a “Notice of
Non-Extension”) that the expiration date of such Letter of Credit will not be
extended beyond its current expiration date. 
The respective Issuing Bank will give Notices of Non-Extension as to any
or all outstanding Letters of Credit issued by it if requested to do so by the
Required Banks pursuant to Article VIII. 
In addition, the respective Issuing Bank will give Notices of Non-Extension
as to all outstanding Letters of Credit issued by it if the Expiration Date has
occurred.  The respective Issuing Bank
will send a copy of each Notice of Non-Extension to the respective Borrower
concurrently with delivery thereof to the respective beneficiary, unless
prohibited by law from doing so.

 

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

 

Section 2.16 
Incremental Commitments.  (a)  So
long as the Incremental Commitment Request Requirements are satisfied at the
time of the delivery of the request referred to below, Holdings shall have the
right, with the consent of, and in coordination with, the Agent, but without
requiring the consent of any of the Banks (save as provided in Section 2.16(b) below),
to request at any time and from time to time after the Closing Date and prior
to the Expiration Date, that one or more Banks (and/or one or more other banks
or financial institutions which are acceptable to each of the Agent and
Holdings (each an “Eligible Transferee”) and which will become Banks as
provided below) provide Incremental Commitments and, subject to the applicable
terms and conditions contained in this Agreement,

 

33

 

make Loans pursuant
thereto; it being understood and agreed, however, that (i) no Bank shall
be obligated to provide an Incremental Commitment as a result of any such
request by the Borrowers, and until such time, if any, as such Bank has agreed
in its sole discretion to provide an Incremental Commitment and executed and
delivered to the Agent an Incremental Commitment Agreement in respect thereof
as provided in Section 2.16(b), such Bank shall not be obligated to fund
any Loans in excess of its Commitment as in effect prior to giving effect to
such Incremental Commitment provided pursuant to Section 2.16(b) below,
(ii) any Bank (including any Eligible Transferee who will become a Bank)
may so provide an Incremental Commitment without the consent of any other Bank,
(iii) each provision of Incremental Commitments on a given date pursuant
to Section 2.16(b) below shall be in a minimum aggregate amount (for
all Banks (including any Eligible Transferee who will become a Bank)) of at
least $25,000,000 and in integral multiples of $5,000,000 in excess thereof, (iv) the
aggregate amount of all Incremental Commitments provided pursuant to Section 2.16(b) below,
shall not exceed $100,000,000 and (v) all Loans made and Letters of Credit
issued pursuant to Incremental Commitments (and all interest, fees and other
amounts payable thereon) shall be Obligations under this Agreement and the
other applicable Loan Documents.

 

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

 

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

 

34

 

ARTICLE
III

 

INTEREST RATES

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

35

 

outstanding or if the
Loans are due and payable, such additional interest or Facility Fee shall be
paid promptly after receipt of written request for payment from the Agent.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

36

 

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

 

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

 

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

 

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

 

(i)            the making, maintenance or funding
of any Loan to which a LIBOR Option applies has been made unlawful by
compliance by such Bank in good faith with any Law or any interpretation or
application thereof by any Official Body or with any request or directive of
any such Official Body (whether or not having the force of Law), or

 

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

 

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

 

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

 

(c)           Agent’s
and Bank’s Rights.  In the case of
any event specified in Section 3.04(a) above, the Agent shall
promptly so notify the Banks and the Borrowers thereof, and in the case of an
event specified in Section 3.04(b) above, such Bank shall promptly so
notify the Agent and endorse a certificate to such notice as to the specific
circumstances of such notice, and the Agent shall promptly send copies of such
notice and certificate to the other Banks and the Borrowers.  Upon such date as shall be specified in such
notice (which shall not be earlier than the date such notice is given), the
obligation of (A) the Banks, in the case of such notice given by the
Agent, or (B) such Bank, in the case of such notice given by such Bank, to
allow the Borrowers to select, convert to or renew a LIBOR Option shall be
suspended until the Agent shall have later notified the Borrowers, or such Bank
shall have later notified the Agent, of the Agent’s or such Bank’s, as the case
may be, determination that the circumstances giving rise to such previous
determination no longer exist.  If at any
time the Agent makes a determination under Section 3.04(a) and any
Borrower has previously notified the Agent of its selection of, conversion to
or renewal of a LIBOR Option and such Interest Rate Option has not yet gone
into effect, such notification shall be deemed to provide for the termination
of the applicable Borrower’s Bid Loan request (without penalty) for such Loans
if the applicable Borrower has requested Bid Loans under the Bid Loan LIBOR
Option and for the selection of, conversion to or renewal of the Base Rate
Option otherwise available with respect to such Loans if the applicable

 

37

 

Borrower has requested
the Revolving Credit Loan LIBOR Option. 
If any Bank notifies the Agent of a determination under Section 3.04(b),
the Borrowers shall, subject to the Borrowers’ indemnification Obligations
under Section 4.06(b) [Indemnity], as to any Loan of the Bank to
which a LIBOR Option applies, on the date specified in such notice either
convert such Loan to the Base Rate Option otherwise available with respect to
such Loan (in the case of Dollar-denominated Loans) or prepay such Loan in
accordance with Section 4.04 [Voluntary Prepayments].  Absent due notice from the Borrowers of
conversion or prepayment, such Loan shall automatically be converted to the
Base Rate Option otherwise available with respect to such Loan upon such
specified date in the case of Dollar-denominated Loans, or prepaid on such date
in the case of all other Loans.

 

Section 3.05  Selection of Interest Rate Options.  If any Borrower fails to select a new Interest
Period to apply to any Borrowing Tranche of Revolving Credit Loans under the
Revolving Credit Loan LIBOR Option at the expiration of an existing Interest
Period applicable to such Borrowing Tranche in accordance with the provisions
of Section 3.01(a) [Revolving Credit Interest Rate Options], the
applicable Borrower shall be deemed to have (i) in the case of
Dollar-denominated Loans, converted such Borrowing Tranche to the Base Rate
Option commencing upon the last day of the existing Interest Period and (ii) in
the case of Alternate Currency Loans, selected a one-month Interest Period
commencing upon the last day of the existing Interest Period.

 

ARTICLE
IV

 

PAYMENTS

 

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

 

Section 4.02  Pro Rata Treatment of Banks.  Each borrowing of Revolving Credit Loans
shall be allocated to each Bank according to its Ratable Share (irrespective of
the amount of Bid Loans outstanding), and each selection of, conversion to or
renewal of any Interest Rate

 

38

 

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

 

Section 4.03  Interest Payment Dates.  Interest on Revolving Credit Loans to which
the Base Rate Option applies shall be due and payable in arrears on the first
Business Day of each June, September, December, and March after the date
hereof and on the Expiration Date or upon acceleration of the Loan.  Interest on Revolving Credit Loans and Bid
Loans to which the LIBOR Option applies and Bid Loans to which the Bid Loan
Fixed Rate Option applies shall be due and payable on the last day of each
Interest Period for those Loans and, if such Interest Period is longer than
three (3) Months, also at the end of the third Month of such Interest
Period.  Interest on payments of
principal and other monetary Obligations shall be due on the date such payment
is due (whether on the stated maturity date, upon acceleration, or otherwise)
or if principal or such other Obligation is paid earlier than the date when
due, then on the date when paid.

 

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

 

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

 

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

 

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

 

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

 

39

 

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

 

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

 

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

 

The principal amount of the Revolving Credit Loans for
which a prepayment notice is given, together with such interest and fees as
have accrued on such principal amount, shall be due and payable on the date
specified in such prepayment notice as the date on which the proposed
prepayment is to be made; provided, however, that failure of any
Borrower to make payment in accordance with a prepayment notice given by it
shall not be an Event of Default in and of itself.  Except as provided in Section 3.04(c) [Agent’s
and Bank’s rights], if any Borrower prepays a Revolving Credit Loan, but fails
to specify the applicable Borrowing Tranche which the applicable Borrower is
prepaying, the prepayment shall be applied first to Revolving Credit Loans to
which the Base Rate Option applies, then to Loans to which the Revolving Credit
Loan LIBOR Option applies.  Any
prepayment hereunder and any failure of the applicable Borrower to make payment
in accordance with a prepayment notice provided by it shall be subject to the
applicable Borrower’s Obligation to indemnify the Banks under Section 4.06(b) [Indemnity].

 

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

 

(c)           Change
of Lending Office.  Each Bank agrees
that, upon the occurrence of any event giving rise to increased costs or other
special payments under Section 3.04(b)

 

40

 

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

 

Section 4.05  Reduction or Termination of Commitments.  The aggregate amount of the Commitments shall
be automatically reduced to zero on the Expiration Date.  The aggregate amount of Commitments shall be
automatically reduced to zero on the 90th day following the date hereof unless the
Closing Date has occurred by such time. 
In addition, the Borrower shall have the right to terminate or reduce
the then unused portion of Commitments at any time or from time to time; provided
that (a) each partial reduction shall be in an aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof; (b) at
no time shall the total amount of the Commitments be less than the sum of the
current Loans outstanding and the Letter of Credit Outstandings at such time
(except following the Expiration Date to the extent no Loans are outstanding and
all Letters of Credit are cash collateralized in accordance with Section 4.10);
and (c) any Borrower shall provide at least five (5) Business Days’
prior written notice of each such termination or reduction to the Agent
specifying the amount of the Commitments to be reduced or terminated.  Each such notice shall be irrevocable, and
Commitments once terminated or reduced may not be reinstated.  Any partial reduction of Commitments pursuant
to this Section 4.05 will apply ratably to all Banks based upon each such
Bank’s Commitment.

 

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

 

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

 

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

 

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

 

41

 

(B) otherwise applicable to the obligations of
any Bank or Issuing Bank under this Agreement,

 

and the result of
any of the foregoing is to increase the cost to, reduce the income receivable
by, or impose any expense (including loss of margin) upon any Bank or Issuing
Bank with respect to this Agreement, or the making, maintenance or funding of
any part of the Revolving Credit Loans or the Bid Loans, or the issuance of or
participation in any Letter of Credit (or, in the case of any capital adequacy
or similar requirement, to have the effect of reducing the rate of return on
any Bank’s capital or Issuing Bank, taking into consideration such Bank’s or
Issuing Bank’s customary policies with respect to capital adequacy) by an
amount which such Bank or Issuing Bank in its sole discretion deems to be
material, such Bank or Issuing Bank shall from time to time notify the
Borrowers and the Agent of the amount determined in good faith (using any
averaging and attribution methods employed in good faith) by such Bank or
Issuing Bank to be necessary to compensate such Bank or Issuing Bank for such
increase in cost, reduction of income, additional expense or reduced rate of
return.  Such notice shall set forth in
reasonable detail the basis for such determination.  Such amount shall be due and payable by the
applicable Borrower to such Bank or Issuing Bank ten (10) Business Days
after such notice is given.

 

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

 

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

 

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

 

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

 

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

 

42

 

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

 

Section 4.07  Taxes. 
(a)  No Deductions. 
All payments made by each Borrower hereunder and under each Note or for
Unpaid Drawings shall be made free and clear of and without deduction for any
present or future taxes, levies, imposts, deductions, charges, or withholdings,
and all liabilities with respect thereto, excluding taxes imposed on the net
income of any Bank or Issuing Bank and all income and franchise taxes applicable
to any Bank or Issuing Bank of the United States (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings, and liabilities being
hereinafter referred to as “Taxes”).  If
any Borrower shall be required by Law to deduct any Taxes from or in respect of
any sum payable hereunder or under any Note or for Unpaid Drawings, (i) the
sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 4.07(a)) each Bank or Issuing Bank receives an amount
equal to the sum it would have received had no such deductions been made, (ii) the
applicable Borrower shall make such deductions, and (iii) the applicable
Borrower shall timely pay the full amount deducted to the relevant tax
authority or other authority in accordance with applicable Law.

 

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

 

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

 

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

 

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

 

43

 

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

 

(b)           Indemnity
in Certain Events.  The obligation of
each Borrower in respect of any sum due from such Borrower to any Bank
hereunder shall, notwithstanding any judgment in an Other Currency, whether
pursuant to a judgment or otherwise, be discharged only to the extent that, on
the Business Day following receipt by any Bank of any sum adjudged to be so due
in such Other Currency, such Bank may in accordance with normal banking
procedures purchase the Original Currency with such Other Currency.  If the amount of the Original Currency so
purchased is less than the sum originally due to such Bank in the Original
Currency, each Borrower agrees, with respect to Loans incurred and requests
therefor made by such Borrower, as a separate obligation and notwithstanding
any such judgment or payment, to indemnify such Bank against such loss.

 

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

 

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

 

44

 

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

 

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

 

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

 

45

 

ARTICLE
V

 

REPRESENTATIONS AND WARRANTIES

 

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

 

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

 

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

 

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

 

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

 

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

 

46

 

whatsoever upon any
property (now or hereafter acquired) of such Borrower (other than Permitted
Liens).

 

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

 

(g)           Title
to Properties.  Such Borrower has
good and marketable title to or valid leasehold interests in all properties,
assets, and other rights which it purports to own or lease or which are reflected
as owned or leased on its books and records, free and clear of all Liens and
encumbrances except Permitted Liens.  All
leases of property are in full force and effect and are subject only to the
terms and conditions of the applicable leases.

 

(h)           Financial
Statements, Reinsurance Coverage.

 

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

 

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

 

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

 

47

 

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

 

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

 

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

 

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

 

(m)          No
Event of Default; Compliance With Instruments.  No event has occurred and is continuing and
no condition exists or will exist after giving effect to the

 

48

 

borrowings or other extensions
of credit to be made under or pursuant to the Loan Documents which constitutes
an Event of Default or Potential Default. 
Such Borrower is not in violation of (i) any term of its
certificate or articles of incorporation, bylaws, memorandum of association or
other organizational or constitutional documents or (ii) any material
agreement or instrument to which it is a party or by which it or any of its
properties may be subject or bound, in each such case where such violation
would constitute a Material Adverse Change.

 

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

 

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

 

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

 

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

 

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

 

(s)           Plans
and Benefit Arrangements.  To the
extent of any Benefit Arrangement, Plan or Multiemployer Plan in place during
the term of this Agreement, Holdings and each other member of the ERISA Group
are in compliance in all material respects with any applicable provisions of
ERISA with respect to all Benefit Arrangements, Plans, and Multiemployer
Plans.  There has been no Prohibited

 

49

 

Transaction with respect
to any Benefit Arrangement or any Plan or, to the best knowledge of the
Borrowers, with respect to any Multiemployer Plan or Multiple Employer Plan,
which could result in any material liability of Holdings or any other member of
the ERISA Group.  To the extent of any
Benefit Arrangement, Plan or Multiemployer Plan in place during the term of
this Agreement, Holdings and all other members of the ERISA Group have made
when due any and all payments required to be made under any agreement relating
to a Multiemployer Plan or a Multiple Employer Plan or any Law pertaining
thereto.  With respect to each Plan and
Multiemployer Plan, if any, Holdings and each other member of the ERISA Group (i) have
fulfilled in all material respects their obligations under the minimum funding
standards of ERISA, (ii) have not incurred any liability to the PBGC other
than PBGC premiums due but not delinquent under Section 4007 of ERISA, and
(iii) have not had asserted against them any penalty for failure to
fulfill the minimum funding requirements of ERISA.  All Plans, Benefit Arrangements and
Multiemployer Plans, if any, have been administered in accordance with their
terms and applicable Law.

 

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

 

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

 

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

 

50

 

Employer Plan is reasonably expected to be reorganized or terminated,
within the meaning of Title IV of ERISA.

 

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

 

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

 

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

 

ARTICLE
VI

CONDITIONS OF LENDING

 

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

 

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

 

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

 

51

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

52

 

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

 

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

 

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

 

Section 6.02  Each Credit Event.  At the time of each Credit Event, and after
giving effect to the proposed extensions of credit:  the Closing Date shall have occurred; the
representations and warranties of the Borrowers contained in ARTICLE V and in
the other Loan Documents and the representations and warranties of each
Material Non-AGC Subsidiary contained or incorporated in the Guarantor Joinder
given by such Material Non-AGC Subsidiary pursuant to Section 10.18 shall
be true on and as of the date of such additional Loan with the same effect as
though such representations and warranties had been made on and as of such date
(except representations and warranties which expressly relate solely to an
earlier date or time, which representations and warranties shall be true and
correct on and as of the specific dates or times referred to therein) and the
Borrowers shall have performed and complied with all covenants and conditions
hereof that are required to be performed or complied with as of the date of
such Credit Event and each Material Non-AGC Subsidiary shall have complied with
Section 10.18 and all other covenants and conditions that are required to
be performed or complied with as of the date of such Loan and which are set
forth in or incorporated into the Guarantor Joinder given by such Material
Non-AGC Subsidiary pursuant to Section 10.18; no Event of Default or
Potential Default shall have occurred and be continuing or shall exist; and the
applicable Borrower shall have delivered to the Agent a duly executed and
completed Loan Request.

 

ARTICLE
VII

COVENANTS

 

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

 

(a)           Preservation
of Existence, Etc.  Holdings shall,
and shall cause each of its Material Subsidiaries to, maintain its legal
existence as a corporation, limited partnership, or limited liability company
and its license or qualification and good standing in each

 

53

 

jurisdiction in which its
ownership or lease of property or the nature of its business makes such license
or qualification necessary, except as otherwise expressly permitted in Section 7.02(f) [Liquidations,
Mergers, Etc.].

 

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

 

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

 

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

 

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

 

(f)            Visitation
Rights.  Holdings shall, and shall
cause each of its Material Subsidiaries to, permit any of the officers or
authorized employees or representatives of the Agent or any Bank to visit and
inspect any of its properties and to examine and make excerpts from its books
and records and discuss its business affairs, finances and accounts with its
officers, all in such detail and at such times and as often as the Agent or any
such Bank may reasonably request and at the pro  rata expense of
the Banks (if requested by the Required Banks), the requesting Bank or, if the
request has not come from any Bank, the Agent, provided that the Agent
or such Bank shall provide the Company with

 

54

 

reasonable notice prior
to any visit or inspection, provided further no Bank shall be permitted
more than one visit per one year period and provided  further that
during the continuation of any Event of Default, (i) the limitation on
visits in the immediately preceding proviso shall not apply and (ii) all
such visits and inspections by Agent and or Bank shall be at the expense of the
Borrowers.  In the event any Bank desires
to conduct a visitation or inspection as contemplated hereby of Holdings or any
Subsidiary, such Bank shall make a reasonable effort to conduct such visitation
and inspection contemporaneously with any visitation or inspection to be performed
by the Agent.

 

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

 

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

 

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

 

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

 

(k)           Senior
Debt Status.  Holdings shall ensure
that the Obligations of Holdings and any Material Subsidiary under this
Agreement, a Guarantor Joinder, any Guaranty Agreement, and each of the other
Loan Documents to which it is a party shall at all times rank at least pari
passu in priority of payment with all other senior unsecured
Indebtedness of Holdings or such Material Subsidiary (except to the extent of
any Indebtedness which has a “preferred” status under any Law governing the
bankruptcy, liquidation, insolvency, rehabilitation, reorganization,
conservation, or like circumstance of Holdings or such Material Subsidiary) and
no such other senior unsecured

 

55

 

Indebtedness of Holdings
or such Material Subsidiary shall at any time be governed by or subject to
covenants, defaults, or other provisions that are more restrictive on Holdings
or such Material Subsidiary than those set forth herein; and provided
that if payment of any present or future Indebtedness of Holdings or any
Material Subsidiary, except Indebtedness of Holdings or any Material Subsidiary
to the extent secured by Permitted Liens, shall at any time hereafter become
secured by any Lien on any property, Holdings or such Material Subsidiary shall
secure payment of the Obligations with a Lien of like priority on the same or
substantially similar property of the same or greater value (but, in any event,
such Lien shall secure an amount of Obligations not to exceed the amount
secured by the Lien given to secure payment of such other Indebtedness).

 

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

 

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

 

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

 

(i)            Indebtedness
under the Loan Documents;

 

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

 

(iii)          Capitalized
leases;

 

(iv)          Indebtedness
secured by Purchase Money Security Interests;

 

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

 

(vi)          Any
Interest Rate Hedge;

 

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

 

(viii)        Other
Indebtedness of AGRI or FSA which is limited recourse to AGRI or FSA, as the
case may be, and in the nature (as to its purpose and limited recourse
structure) of that existing Indebtedness of AGRI in favor of Deutsche 

 

56

 

 

Bank shown on Exhibit 7.02(a) and
Indebtedness of FSA under the $350,000,000 soft capital facility provided
pursuant to the Third Amended and Restated Credit Agreement, dated as of April 30,
2005 (as amended) among FSA, FSA Insurance Company, various banks and
Bayerische Landesbank acting through its New York Branch individually and as
Agent (all such Indebtedness under this Section 7.02(a)(viii) being “Soft
Capital”);

 

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

 

(x)            [Intentionally
Omitted];

 

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

 

(xii)          Any
obligations pursuant to the Contingent Capital Facility; and

 

(xiii)         Indebtedness
of (A) FSAH existing at the time of consummation of the FSAH Acquisition
in an aggregate face amount of up to $430,000,000 and (B) of FSA under the
Strip Coverage Liquidity Facility.

 

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

 

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

 

57

 

Company or Assured
Guaranty Re Ltd. to its Subsidiaries, and (v) letters of credit, trust
accounts or similar collateral support procured by Subsidiaries of Holdings
which are required in the ordinary course of business either by statute or by
rating agencies in order to support the respective reinsurance or insurance
business of such Subsidiaries.

 

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

 

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

 

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

 

(iii)          Permitted
Investments and Permitted Acquisitions; and

 

(iv)          loans,
advances and investments in Holdings and any Subsidiary of Holdings; provided that the Company may not make any
loans, advances and investments in Holdings or any Subsidiary of Holdings which
is not a Subsidiary of the Company (other than any such Subsidiary of Holdings
which issues or proposes to issue Guaranteed Investment Contracts).

 

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

 

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

 

(1)           any
Material Subsidiary may consolidate, amalgamate or merge into Holdings or any
other Material Subsidiary provided that the Company may not merge,
amalgamate or consolidate with Holdings, and the Company may only

 

58

 

merge, amalgamate or
consolidate with another Material Subsidiary if the Company is the surviving
entity of such merger, amalgamation or consolidation; and

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

59

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)            Subsidiaries,
Partnerships and Joint Ventures. 
Holdings shall not, and shall not permit any of its Material
Subsidiaries to, own, acquire, or create directly or indirectly any Material
Non-AGC Subsidiary other than Material Non-AGC Subsidiaries each of which has
joined this Agreement as a Guarantor at any time after the Closing Date in
accordance with Section 10.18 [Joinder of Guarantors].  Each of Holdings and its Material
Subsidiaries shall not become or agree to become (1) a general or limited
partner in any general or limited partnership, except that Holdings or any of
its Material Subsidiaries may be general or limited partners in any other
Material Subsidiary, (2) a member or manager of, or hold a limited
liability company interest in, a limited liability company, except that
Holdings or any of its Material Subsidiaries may be members or managers of, or
hold limited liability company interests in, other Material Subsidiaries, or (3) a
joint venturer or hold a joint venture interest in any joint venture except
that Holdings or any of its Material Subsidiaries may be a party to a joint
venture (A) that

 

60

 

would not otherwise be a
Material Subsidiary were it a Subsidiary of Holdings, and (B) as to which
neither Holdings nor any Material Subsidiary is directly or indirectly jointly
or severally liable for any act or omission of the joint venture beyond the
amount of its investment therein.

 

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

 

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

 

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

 

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

 

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

 

(o)           Minimum
Net Worth.  Holdings shall not permit
at any time its Consolidated Net Worth to be less than seventy-five percent
(75%) of the Consolidated Net Worth of Holdings as of the most recent fiscal
quarter of Holdings prior to the Closing Date; provided that on and
after the date of consummation of the FSAH Acquisition, Holdings shall not
permit at any time its Consolidated Net Worth to be less

 

61

 

than seventy-five percent
(75%) of the Consolidated Net Worth of Holdings as of the last day of the most
recent fiscal quarter of Holdings ended prior to the date of consummation of
such acquisition determined on a pro forma basis as if the FSAH Acquisition had
been consummated on such date.

 

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

 

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

 

(b)           Annual
Financial Statements.  As soon as
available and in any event within ninety (90) days after the end of each fiscal
year of Holdings, the Form 10-K of Holdings as filed with the SEC and two
sets of financial statements of Holdings and the Company, each consisting of a
consolidated balance sheet as of the end of such fiscal year, and related
consolidated statements of income, stockholders’ equity, and cash flows for the
fiscal year then ended, all in reasonable detail with the set relating to
Holdings being prepared in accordance with GAAP, consistently applied, and the
set relating to the Company being prepared in accordance with statutory
accounting principles required by the State of Maryland, and, in each case,
certified by independent certified public accountants of nationally recognized
standing satisfactory to the Agent.  The
certificate or report of accountants shall be free of qualifications (other
than any consistency qualification that may result from a change in the method
used to prepare the financial statements as to which such accountants concur)
and shall not indicate the occurrence or existence of any event, condition, or
contingency which would materially impair the prospect of payment or performance
of any covenant, agreement, or duty of Holdings and/or any Material Subsidiary
under any of the Loan Documents.

 

(c)           Certificate
of the Company.  Concurrently with
the financial statements of Holdings and the Company furnished to the Agent and
to the Banks pursuant to Section 7.03(a) [Quarterly Financial
Statements] and Section 7.03(b) [Annual Financial Statements], a
certificate (each a “Compliance Certificate”) of each of Holdings and the 

 

62

 

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

 

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

 

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

 

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

 

(g)           Notice
of Change in Insurer Financial Strength Rating.  Within two (2) Business Days after
Standard & Poor’s or Moody’s announces a change in the

 

63

 

Company’s Insurer
Financial Strength Rating, notice of such change.  Holdings will deliver together with such
notice a copy of any written notification which the Company received from the
applicable rating agency regarding such change of its Insurer Financial
Strength Rating.

 

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

 

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

 

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

 

ARTICLE VIII

 

DEFAULT

 

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

 

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

 

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

 

(c)           Breach
of Negative Covenants or Visitation Rights. 
Holdings or any Material Subsidiary shall default in the observance or
performance of any covenant

 

64

 

contained in Section 7.02
[Negative Covenants] or Section 7.01(l) or shall default for a period
of ten (10) days or more in the observance or performance of any covenant
contained in Section 7.01(f);

 

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

 

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

 

(f)            Final
Judgments or Orders.  Any final
judgments or orders for the payment of money which results in an uninsured
liability to pay in excess of $20,000,000 in the aggregate shall be entered
against Holdings or any Material Subsidiary by a court having jurisdiction in
the premises, which judgment is not discharged, vacated, bonded, or stayed
pending appeal within a period of forty-five (45) days from the date of entry;

 

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

 

(h)           Losses;
Proceedings Against Assets.  Any of
Holdings’ or the Company’s assets having an aggregate value (reasonably
determined) in excess of five (5%) of the tangible net worth of Holdings and
its Subsidiaries or the Company and the Subsidiaries, as the case may be, or
any of its Material Subsidiaries’ assets having an aggregate value (reasonably
determined) in excess of a material amount of such Material Subsidiary’s
tangible net worth, are attached, seized, levied upon or subjected to a writ or
distress warrant; or such come within the possession of any receiver, trustee,
custodian or

 

65

 

assignee for the benefit
of creditors and the same is not cured within sixty (60) days thereafter;

 

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

 

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

 

(k)           Events
Relating to Plans and Benefit Arrangements. 
Any of the following occurs:  (i) any
Reportable Event, which the Agent determines in good faith constitutes grounds
for the termination of any Plan by the PBGC or the appointment of a trustee to
administer or liquidate any Plan, shall have occurred and be continuing; (ii) proceedings
shall have been instituted or other action taken to terminate any Plan, or a
termination notice shall have been filed with respect to any Plan; (iii) a
trustee shall be appointed to administer or liquidate any Plan; (iv) the
PBGC shall give notice of its intent to institute proceedings to terminate any
Plan or Plans or to appoint a trustee to administer or liquidate any Plan; and,
in the case of the occurrence of (i), (ii), (iii) or (iv) above, the
Agent determines in good faith that the amount of Holdings’ liability is likely
to exceed 10% of its Consolidated Net Worth; (v) Holdings or any member of
the ERISA Group shall fail to make any contributions when due to a Plan or a
Multiemployer Plan; (vi) Holdings or any other member of the ERISA Group
shall make any amendment to a Plan with respect to which security is required
under Section 307 of ERISA; (vii) Holdings or any other member of the
ERISA Group shall withdraw completely or partially from a Multiemployer Plan; (viii) Holdings
or any other member of the ERISA Group shall withdraw (or shall be deemed under
Section 4062(e) of ERISA to withdraw) from a Multiple Employer Plan;
or (ix) any applicable Law is adopted, changed or interpreted by any
Official Body with respect to or otherwise affecting one or more Plans,
Multiemployer Plans or Benefit Arrangements and, with respect to any of the
events specified in (v), (vi), (vii), (viii) or (ix), the Agent determines
in good faith that any such occurrence would be reasonably likely to materially
and adversely affect the total enterprise represented by Holdings and the other
members of the ERISA Group;

 

(l)            Change
of Control.  (i) Any person or
group of persons (within the meaning of Sections 13(d) or 14(a) of
the Securities Exchange Act of 1934, as amended), other than ACE or an
Affiliate of ACE, shall have acquired beneficial ownership of (within the
meaning of Rule 13d-3 promulgated by the SEC under said Act) 30% or more
of the voting capital stock of Holdings; or (ii) within a period of twelve
(12) consecutive calendar months, individuals who were directors of Holdings on
the first day of such period and individuals approved by the existing board of
directors of Holdings shall cease to constitute a majority of the board of
directors of Holdings; or (iii) the Company, AGRI or AGRO shall cease to
be a wholly-owned Subsidiary of Holdings; provided, however,

 

66

 

any issuance of preferred
stock in connection with the Contingent Capital Facility shall not be a
violation of this Section 8.01(l) and shall not be deemed an Event of
Default; or (iv) the UK Borrower shall cease to be a subsidiary of the
Company at any time when any Loans are outstanding to the UK Borrower or,
Letters of Credit have been issued for the account of the UK Borrower;

 

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

 

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

 

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

 

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

 

67

 

waived or (iv) require
the respective Borrowers to cash collateralize all Letters of Credit issued to
the account of such Borrower; and

 

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

 

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

 

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

 

(e)           Application
of Proceeds.  From and after the date
on which the Agent has taken any action pursuant to this Section 8.02 and
until all Obligations have been paid in full,

 

68

 

any and all proceeds
received by the Agent from the exercise of any remedy by the Agent, shall be
applied as follows:

 

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

 

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

 

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

 

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

 

Section 8.03  Right of Competitive Bid Loan Banks.  If any Event of Default shall occur and be
continuing, the Banks which have any Bid Loans then outstanding to the
Borrowers (the “Bid Loan Banks”) shall not be entitled to accelerate payment of
the Bid Loans or to exercise any right or remedy related to the collection of
the Bid Loans until the Commitments shall be terminated hereunder pursuant to Section 8.02.  Upon such a termination of the
Commitments:  (i) references to
Revolving Credit Loans in Section 8.02 shall be deemed to apply also to
the Bid Loans and the Bid Loan Banks shall be entitled to all enforcement rights
given to a holder of a Revolving Credit Loan in Section 8.02, and (ii) the
definition of Required Banks shall be changed as provided in Section 1.01
so that each Bank shall have voting rights hereunder in proportion to its share
of the total Loans outstanding.

 

ARTICLE IX

 

THE AGENT

 

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

 

69

 

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

 

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

 

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

 

Section 9.05  Reimbursement and Indemnification of Agent
by the Borrowers.  Each Borrower
(other than AGRI and AGRO) unconditionally, jointly and severally, agrees to

 

70

 

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

 

Section 9.06  Exculpatory Provisions; Limitation of
Liability.  Neither the Agent nor any
of its directors, officers, employees, agents, attorneys or Affiliates shall (a) be
liable to any Bank for any action taken or omitted to be taken by it or them
hereunder, or in connection herewith including pursuant to any Loan Document,
unless caused by its or their own gross negligence or willful misconduct, (b) be
responsible in any manner to any of the Banks for the effectiveness,
enforceability, genuineness, validity or the due execution of this Agreement or
any other Loan Documents or for any recital, representation, warranty,
document, certificate, report or statement herein or made or furnished under or
in connection with this Agreement or any other Loan Documents, or (c) be
under any obligation to any of the Banks to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions hereof
or thereof on the part of the Borrowers or any of their Subsidiaries, or the
financial condition of the Borrowers or any of their Subsidiaries, or the
existence or possible existence of any Event of Default or Potential Default.  No claim may be made by the Borrowers or any
of their Subsidiaries, any Bank, the Agent or any of their respective
Subsidiaries against the Agent, any Bank or any of their respective directors,
officers, employees, agents, attorneys or Affiliates, or any of them, for any
special, indirect or consequential damages or, to the fullest extent permitted
by Law, for any punitive damages in respect of any claim or cause of action
(whether based on contract, tort, statutory liability, or any other ground)
based on, arising out of or related to any Loan Document or the transactions
contemplated hereby or any act, omission or event occurring in connection
therewith, including the negotiation, documentation, administration or
collection of the Loans, and the Borrowers (for themselves and on behalf of
each of their Subsidiaries), the Agent and each Bank hereby waive, release and
agree never to sue upon any claim for any such

 

71

 

damages, whether such
claim now exists or hereafter arises and whether or not it is now known or
suspected to exist in their favor.  Each
Bank agrees that, except for notices, reports and other documents expressly
required to be furnished to the Banks by the Agent hereunder or given to the
Agent for the account of or with copies for the Banks, the Agent and each of
its directors, officers, employees, agents, attorneys or Affiliates shall not
have any duty or responsibility to provide any Bank with an credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Borrowers or any of their
Subsidiaries which may come into the possession of the Agent or any of its
directors, officers, employees, agents, attorneys or Affiliates.

 

Section 9.07  Reimbursement and Indemnification of Agent
and Issuing Banks by Banks.  Each
Bank agrees to reimburse and indemnify the Agent and the Issuing Banks (to the
extent not reimbursed by the Borrowers and without limiting the Obligation of the
Borrowers to do so) in proportion to its Ratable Share from and against all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements, including attorneys’ fees and
disbursements (including the allocated costs of staff counsel), and costs of
appraisers and environmental consultants, of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against the Agent or the
Issuing Banks, in its capacity as such, in any way relating to or arising out
of this Agreement or any other Loan Documents or any action taken or omitted by
the Agent or Issuing Banks hereunder or thereunder, provided that no
Bank shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
(a) if the same results from the Agent’s or such Issuing Bank’s gross
negligence or willful misconduct, or (b) if such Bank was not given notice
of the subject claim and the opportunity to participate in the defense thereof,
at its expense (except that such Bank shall remain liable to the extent such
failure to give notice does not result in a loss to the Bank), or (c) if
the same results from a compromise and settlement agreement entered into
without the consent of such Bank, which shall not be unreasonably
withheld.  In addition, each Bank agrees
promptly upon demand to reimburse the Agent (to the extent not reimbursed by
the Borrowers and without limiting the Obligation of the Borrowers to do so) in
proportion to its Ratable Share for all amounts due and payable by the
Borrowers to the Agent in connection with the Agent’s periodic audit of the
Company’s or any of its respective Material Subsidiaries’ books, records and
business properties.

 

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

 

Section 9.09  Notice of Default.  The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Potential Default or Event of
Default unless the Agent has received written notice from a Bank or a Borrower
referring to this Agreement,

 

72

 

describing such Potential
Default or Event of Default and stating that such notice is a “notice of
default.”

 

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

 

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

 

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

 

Section 9.13  Equalization of Banks.  The Banks and the holders of any
participations in any Commitments, Loans or Letters of Credit or other rights
or obligations of a Bank hereunder agree among themselves that,  with respect to all amounts received by any Bank or any
such holder for application on any Obligation hereunder or under any such participation,
whether received by voluntary payment, by realization upon security, by the
exercise of the right of set-off or banker’s lien, by counterclaim, or by any
other non-pro  rata source, equitable adjustment will be made in
the manner stated in the following sentence so that, in effect, all such excess
amounts will be shared ratably among the Banks and such holders in proportion
to their interests in payments on the Loans and the Letters of Credit, except
as otherwise provided in Section 3.04(c) [Agent’s and Bank’s Rights],
Section 4.04(b) [Replacement of a Bank] or Section 4.06
[Additional Compensation in Certain Circumstances].  The Banks or any such

 

73

 

holder receiving any such
amount shall purchase for cash from each of the other Banks an interest in such
Bank’s Loans in such amount as shall result in a ratable participation by the
Banks and each such holder in the aggregate unpaid amount of the Loans, provided
that if all or any portion of such excess amount is thereafter recovered from
the Bank or the holder making such purchase, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery, together with
interest or other amounts, if any, required by law (including court order) to
be paid by the Bank or the holder making such purchase.

 

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

 

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

 

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

 

74

 

three (3) days after
such interest shall begin to accrue and (ii) the applicable interest rate
in respect of such Loan after the end of such three-day period.

 

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

 

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

 

ARTICLE X

 

MISCELLANEOUS

 

Section 10.01  Modifications, Amendments, or Waivers.  With the written consent of the Required
Banks, the Agent, acting on behalf of all the Banks, and the Borrowers may from
time to time enter into written agreements amending or changing any provision
of this Agreement or any other Loan Document or the rights of the Banks or the
Borrowers hereunder or thereunder, or may grant written waivers or consents to
a departure from the due performance of the Obligations hereunder or
thereunder.  Any such agreement, waiver
or consent made with such written consent shall be effective to bind all the Banks
and the Borrowers; provided that, without the written consent of all the
Banks, no such agreement, waiver, or consent may be made which will:

 

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

 

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

 

75

 

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

 

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

 

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

 

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

 

Section 10.03  Reimbursement and Indemnification of Banks
by the Borrowers; Taxes.  Each
Borrower jointly and severally agrees unconditionally upon demand to pay or
reimburse to each Bank (other than the Agent, as to which the Borrowers’
Obligations are set forth in Section 9.05 [Reimbursement of Agent By
Borrower, Etc.]) and to save such Bank harmless against (i) liability for
the payment of all reasonable out-of-pocket costs, expenses and disbursements
(including fees and expenses of counsel for each Bank except with respect to (a) and
(b) below), incurred by such Bank (a) in connection with the review,
execution, delivery, administration, or interpretation of this Agreement, and
other instruments and documents to be delivered hereunder, (b) relating to
any amendments, waivers, or consents pursuant to the provisions hereof, (c) in
connection with the enforcement of this Agreement or any other Loan Document,
or collection of amounts due hereunder or thereunder or the proof and
allowability of any claim arising under this Agreement or any other Loan
Document, whether in bankruptcy or receivership proceedings or otherwise, and (d) in
any workout or restructuring or in connection with the protection,
preservation, exercise, or enforcement of any of the terms hereof or of any
rights hereunder or under any other Loan Document or in connection with any
foreclosure, collection, or bankruptcy proceedings, or (ii) all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, or disbursements of any kind or nature 

 

76

 

whatsoever which may be
imposed on, incurred by or asserted against such Bank (including such Bank’s
officers, directors and employees), in its capacity as such, in any way
relating to or arising out of this Agreement or any other Loan Documents, use
of proceeds of the Loans or the transactions contemplated by the Loan Documents
or any action taken or omitted by such Bank (including such Bank’s officers,
directors and employees) hereunder or thereunder, provided that the
Borrowers shall not be liable to a Bank (including such Bank’s officers,
directors and employees) for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, or
disbursements (A) if the same results from such Bank’s or its officer’s,
director’s or employee’s gross negligence or willful misconduct, or (B) if
the Borrowers were not given notice of the subject claim and the opportunity to
participate in the defense thereof, at their expense (except that the Borrowers
shall remain liable to the extent such failure to give notice does not result
in a loss to the Borrowers), or (C) if the same results from a compromise
or settlement agreement entered into without the consent of the Borrowers,
which shall not be unreasonably withheld. 
The Banks will attempt to minimize the fees and expenses of legal
counsel for the Banks which are subject to reimbursement by the Borrowers on a
joint and several basis hereunder by considering the usage of one law firm to
represent the Banks and the Agent if appropriate under the circumstances.  The Borrowers, jointly and severally, agree
unconditionally to pay all stamp, document, transfer, recording or filing taxes
or fees and similar impositions now or hereafter determined by the Agent or any
Bank to be payable in connection with this Agreement or any other Loan
Document, and the Borrowers, jointly and severally, agree unconditionally to
save the Agent and the Banks harmless from and against any and all present or
future claims, liabilities or losses with respect to or resulting from any
omission to pay or delay in paying any such taxes, fees or impositions.

 

Section 10.04  Holidays.  Whenever payment of a Loan to be made or
taken hereunder shall be due on a day which is not a Business Day such payment
shall be due on the next Business Day (except as provided in the definition of
Committed Loan Interest Period with respect to Interest Periods under the LIBOR
Option) and such extension of time shall be included in computing interest and
fees, except that the Loans shall be due on the Business Day preceding the
Expiration Date if the Expiration Date is not a Business Day.  Whenever any payment or action to be made or
taken hereunder (other than payment of the Loans) shall be stated to be due on
a day which is not a Business Day, such payment or action shall be made or
taken on the next following Business Day, and such extension of time shall not
be included in computing interest or fees, if any, in connection with such
payment or action.

 

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

 

77

 

regard to such Bank’s
actual methods of making, maintaining or funding the Loans or any sources of
funding actually used by or available to such Bank.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

78

 

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

 

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

 

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

 

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

 

Section 10.10  Duration; Survival.  All representations and warranties of the
Borrowers and the Material Subsidiaries contained herein or made in connection
herewith shall survive the making of Loans and the issuance of Letters of
Credit and shall not be waived by the execution and delivery of this Agreement,
any investigation by the Agent or the Banks, the making of Loans, the issuance
of Letters of Credit, or payment in full of the Loans.  All covenants and agreements of the Borrowers
contained in Section 7.01 [Affirmative Covenants], Section 7.02
[Negative Covenants] and Section 7.03 [Reporting Requirements], and all
comparable covenants and agreements contained in or incorporated into the
Guarantor Joinder given by each Material Non-AGC Subsidiary pursuant to Section 10.18,
shall continue in full force and effect from and after the date hereof so long
as the Borrowers may borrow hereunder and until termination of the Commitments,
expiration of all Letters of Credit and payment in full of the Loans.  All covenants and agreements of the Borrowers
contained herein relating to the payment of principal, interest, premiums,
additional compensation or expenses and indemnification, including those set
forth in ARTICLE IV [Payments] and Section 9.05 [Reimbursement of Agent by
Borrowers, Etc.], Section 9.07 [Reimbursement of Agent by Banks, Etc.] and
Section 10.03 [Reimbursement of Banks by Borrowers; Etc.], and all
comparable covenants and agreements contained in or incorporated into the
Guarantor Joinder given by each Material Non-AGC Subsidiary pursuant to Section 10.18,
shall survive payment in full of the Loans, expiration of all Letters of Credit
and termination of the Commitments.

 

Section 10.11  Successors and Assigns.  (a)  This Agreement shall be
binding upon and shall inure to the benefit of the Banks, the Agent, the
Borrowers and, when party to this Agreement, each of the Material Subsidiaries,
and their respective successors and assigns, except that no Borrowers or any
Material Subsidiary may assign or transfer any of its rights or Obligations or
any interest herein or in any other Loan Document, except as may be permitted
by the terms hereof or otherwise approved by each Bank.  Each Bank may, at its own cost, make

 

79

 

assignments of or sell
participations in all or any part of its Revolving Credit Commitments and the
Loans made by it to one or more banks or other entities, subject to the consent
of the Borrowers, the Agent and each Issuing Bank with respect to any assignee,
such consent not to be unreasonably withheld, provided that (1) no
consent of the Borrowers shall be required (A) if an Event of Default
exists and is continuing, or (B) in the case of an assignment by a Bank to
an Affiliate of such Bank, (2) any assignment by a Bank to a Person other
than an Affiliate of such Bank may not be made in amounts less than the lesser
of $5,000,000 or the amount of the assigning Bank’s Commitment, (3) a Bank
may assign an interest or sell a participation in less than 100% of its
Commitments, Revolving Credit Loans, or Bid Loans, provided that such
Bank sells an equal percentage interest or participation in each of its
Revolving Credit Commitment and Revolving Credit Loans, (4) a Bank may
assign a Bid Loan to another Person without assigning any portion of its
Commitment to such Person and (5) no consent of the Agent or any Issuing
Bank shall be required in the case of an assignment by a Bank to an Affiliate
of such Bank or to another Bank already party to this Agreement.  In the case of an assignment, upon receipt by
the Agent of the Assignment and Assumption Agreement, the assignee shall have,
to the extent of such assignment (unless otherwise provided therein), the same
rights, benefits and obligations as it would have if it had been a signatory
Bank hereunder, the Commitments shall be adjusted accordingly, and upon
surrender of any Revolving Credit Note subject to such assignment, the applicable
Borrower shall execute and deliver a new Revolving Credit Note to the assignee,
if such assignee requests such a Note in an amount equal to the amount of the
Revolving Credit Commitment assumed by it and a new Revolving Credit Note to
the assigning Bank, if the assigning Bank requests such a Note with respect to
the Commitment it has retained.  The
assigning Bank shall surrender its Bid Note and the respective Borrower shall
execute and deliver to the assignee (and to the assignor if the assignor is
assigning less than all of its Revolving Credit Commitments and Bid Loans) a
new Bid Note in the form of Exhibit 1.01(B) as
appropriate.  Any Bank which assigns any
or all of its Commitment or Loans to a Person other than an Affiliate of such
Bank shall pay to the Agent a service fee in the amount of $3,500 for each
assignment.  In the case of a
participation, the participant shall only have the rights specified in Section 8.02
[Set-off] (the participant’s rights against such Bank in respect of such
participation to be those set forth in the agreement executed by such Bank in
favor of the participant relating thereto and not to include any voting rights
except with respect to changes of the type referenced in Section 10.01(a) [Increase
of Commitment, Etc.], Section 10.01(b) [Extension of Payment, Etc.],
or Section 10.01(c) [Release of Collateral or Guarantor]), all of
such Bank’s obligations under this Agreement or any other Loan Document shall
remain unchanged, and all amounts payable by any Borrower or any Material
Subsidiary hereunder or thereunder shall be determined as if such Bank had not
sold such participation.

 

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

 

80

 

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

 

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

 

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

 

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

 

Section 10.14  Agent’s or Bank’s Consent.  Whenever the Agent’s or any Bank’s consent is
required to be obtained under this Agreement or any of the other Loan Documents
as a condition to any action, inaction, condition or event, the Agent and each
Bank shall be

 

81

 

authorized to give or
withhold such consent in its sole and absolute discretion and to condition its
consent upon the giving of additional collateral, the payment of money or any
other matter.

 

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

 

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

 

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

 

Section 10.17  Tax Withholding Clause.  Each Bank or assignee or participant of a
Bank that is not incorporated under the Laws of the United States of America or
a state thereof (and, upon the written request of the Agent, each other Bank or
assignee or participant of a Bank) agrees that it will deliver to each of the
Borrowers and the Agent two (2) duly completed appropriate valid
Withholding Certificates (as defined under § 1.1441-1(c)(16) of the Income Tax
Regulations (the “Regulations”)) certifying its status (i.e., U.S. or
foreign person) and, if appropriate, making a claim of reduced, or exemption
from, U.S. withholding tax on the basis of an income tax treaty or an exemption
provided by the Internal Revenue Code. 
The term “Withholding Certificate” means a Form W-9; a Form W-8BEN;
a Form W-8ECI; a Form W-8IMY and the related statements and
certifications as required under § 1.1441-1(e)(2) and/or (3) of the
Regulations; a statement described in § 1.871-14(c)(2)(v) of the
Regulations; or any other certificates under the Internal Revenue Code or
Regulations that certify or establish the status of a payee or beneficial owner
as a U.S. or foreign person.  Each Bank,
assignee or

 

82

 

participant required to
deliver to the Borrowers and the Agent a Withholding Certificate pursuant to
the preceding sentence shall deliver such valid Withholding Certificate as
follows:  (A) each Bank which is a
party hereto on the Closing Date shall deliver such valid Withholding
Certificate at least five (5) Business Days prior to the first date on
which any interest or fees are payable by the Borrowers hereunder for the
account of such Bank; (B) each assignee or participant shall deliver such
valid Withholding Certificate at least five (5) Business Days before the
effective date of such assignment or participation (unless the Agent in its
sole discretion shall permit such assignee or participant to deliver such valid
Withholding Certificate less than five (5) Business Days before such date
in which case it shall be due on the date specified by the Agent).  Each Bank, assignee or participant which so
delivers a valid Withholding Certificate further undertakes to deliver to each
of the Borrowers and the Agent two (2) additional copies of such
Withholding Certificate (or a successor form) on or before the date that such
Withholding Certificate expires or becomes obsolete or after the occurrence of
any event requiring a change in the most recent Withholding Certificate so
delivered by it, and such amendments thereto or extensions or renewals thereof
as may be reasonably requested by the Borrowers or the Agent.  Notwithstanding the submission of a
Withholding Certificate claiming a reduced rate of or exemption from U.S.
withholding tax, the Agent shall be entitled to withhold United States federal
income taxes at the full 30% withholding rate if in its reasonable judgment it
is required to do so under the due diligence requirements imposed upon a
withholding agent under § 1.1441-7(b) of the Regulations.  Further, the Agent is indemnified under §
1.1461-1(e) of the Regulations against any claims and demands of any Bank
or assignee or participant of a Bank for the amount of any tax it deducts and
withholds in accordance with regulations under § 1441 of the Internal Revenue
Code.

 

Section 10.18  Joinder of Guarantors.  Any Material Non-AGC Subsidiary of Holdings
which is required to be a Guarantor pursuant to Section 7.02(i) [Subsidiaries,
Partnerships and Joint Ventures] shall execute and deliver to the Agent (i) a
Guarantor Joinder in substantially the form attached hereto as Exhibit 1.01(G)(1) pursuant
to which it shall join as a Guarantor each of the documents to which the
Guarantors are parties; and (ii) documents in the forms described in Section 6.01
[Closing Date] modified as appropriate to relate to such Subsidiary.  Holdings shall deliver such Guarantor Joinder
and related documents to the Agent within five (5) Business Days after, as
the case may be, the date of the acquisition of such Subsidiary, the date upon
which a Subsidiary meets the criteria for a Material Non-AGC Subsidiary as set
forth in the definition thereof in Section 1.01, or the date the filing of
such Subsidiary’s certificate or articles of incorporation if the Subsidiary is
a corporation, the date of the filing of its certificate of limited partnership
if it is a limited partnership or the date of its organization if it is an
entity other than a limited partnership or corporation.

 

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

 

83

 

Credit issued for the
account of the UK Borrower in accordance with the terms of the Guaranty
Agreement entered into by the Company).

 

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

 

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

 

[SIGNATURE PAGES FOLLOW]

 

84

 

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

 

	
   

  	
  ASSURED
  GUARANTY LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert B. Mills

  
	
   

  	
   

  	
  Title:
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSURED
  GUARANTY CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert B. Mills

  
	
   

  	
   

  	
  Title:
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSURED
  GUARANTY (UK) LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert B. Mills

  
	
   

  	
   

  	
  Title:
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSURED
  GUARANTY RE LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David Penchoff

  
	
   

  	
   

  	
  Title:
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSURED
  GUARANTY RE OVERSEAS LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert B. Mills

  
	
   

  	
   

  	
  Title:

  	
  Deputy
  Chairman and

  
	
   

  	
   

  	
   

  	
  Chief
  Financial Officer

  

 

 

	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Neil R. Stein

  
	
   

  	
   

  	
  Title:
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael DeMarco

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Shelly K. Brown

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  BANK OF NEW YORK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard G. Shaw

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DEUTSCHE
  BANK AG NEW YORK BRANCH

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ruth Leung

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John S. McGill

  
	
   

  	
   

  	
  Title:
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joan Anderson

  
	
   

  	
   

  	
  Title: Director

  

 

 

	
   

  	
  MERRILL LYNCH BANK USA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Louis Alder

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lawrence Palumbo, Jr.

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KEYBANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary K. Young

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CITIBANK N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Fontana

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PNC BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward J. Chidiac

  
	
   

  	
   

  	
  Title: Managing DirectorExhibit 10.29

 

AMENDMENT TO THE FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD. 1989

SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN

 

(AS AMENDED AND RESTATED EFFECTIVE DECEMBER
17, 2004)

 

WHEREAS, Financial Security
Assurance Holdings Ltd. (the “Company”) maintains the Financial Security
Assurance Holdings Ltd. 1989 Supplemental Employee Retirement Plan, as amended
and restated effective December 17, 2004 (the “Plan”);

 

WHEREAS, Assured Guaranty Ltd.
(“AGL”) entered into a stock purchase agreement dated November 14, 2008 to
purchase the stock of Financial Security Assurance Holdings Ltd. (the “Company”)
from Dexia Credit Local S.A. and Dexia Holdings, Inc. (“Dexia”) (such
purchase referred to below as the “Transaction”);

 

WHEREAS, effective upon the
closing of the Transaction, the Company desires to amend the Plan to appoint
the Board of Directors of the Company to administer the Plan and to add AGL
common shares as an investment benchmark under the Plan for Sean McCarthy’s
account; and

 

WHEREAS, no Company stock or
AGL common shares will be held in such employer stock fund.

 

NOW, THEREFORE, the Plan is
hereby amended effective as of the closing of the Transaction as follows:

 

1.  By substituting the following
for Section 2.7 of the Plan:

 

“‘Committee’
shall mean the Board.”

 

2.  By adding the following at
the end of subsection 4.3(a) of the Plan:

 

“The Employer Stock Fund (as
defined in Exhibit A) is available as an investment benchmark subject to
the rules and regulations set forth in Exhibit A.”

 

3.  By
adding the following as a new Exhibit A to the Plan:

 

“Exhibit A

 

FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.

1989 SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN

 

Employer Stock Fund Rules and
Regulations

 

Effective upon the closing of
the Transaction (as defined below), an “Employer Stock Fund” shall be
established as an investment benchmark for the Account of Sean McCarthy (“McCarthy”).  Such Account will be credited with 130,000
AGL Units, with each such AGL Unit representing the right to receive one share
of common stock of Assured Guaranty Ltd. (“Shares”) upon a distribution from
the Plan pursuant to Section 4.4 of the Plan.  Upon the

 

 

occurrence of
such crediting of the 130,000 AGL Units, the 22,306 Company units credited to
his account (representing a deemed investment in a corresponding number of
shares of Company common stock) will be canceled.  Except as otherwise provided by the
Committee, no additional AGL Units may be credited to McCarthy’s account.  The term “Transaction” means the purchase of
the stock of Financial Security Assurance Holdings Ltd. (the “Company”) from
Dexia Credit Local S.A. and Dexia Holdings, Inc. pursuant to the stock
purchase agreement dated November 14, 2008.

 

A-1.  Eligibility.  McCarthy is the only Participant eligible to
invest all or a portion of his Account in the Employer Stock Fund.

 

A-2.  Allocations to and from Employer Stock
Fund.  McCarthy’s investment in the
130,000 AGL Units shall be irrevocable, and such portion of McCarthy’s Account
shall remain credited with such 130,000 AGL Units until such time as he is
entitled to a distribution pursuant to Section 4.4 of the Plan with the
number of Shares to be distributed to McCarthy equal to the number of AGL Units
held in McCarthy’s Account.

 

A-3.  Dividends.  To the extent that any record date for
dividends on Shares occurs during the period in which all or a portion of a
McCarthy’s Account is allocated to the Employer Stock Fund, McCarthy’s Account
will be credited with an amount equal to the dividends that would be payable
with respect to such AGL Units, determined as though each AGL Unit credited to
the Participant’s Account was a Share (the “Deemed Dividends”).  The Deemed Dividends shall be credited to an
investment benchmark that is a money market fund or other similar investment
benchmark selected by the Committee.”

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