Document:

Prepared by R.R. Donnelley Financial -- CREDIT AGREEMENT

 Exhibit 10.2 
  
 CONFORMED COPY 
  
 
 
  
  
 CREDIT AGREEMENT 
  
 among 
  
 PARTNERRE LTD. 
  
 VARIOUS DESIGNATED SUBSIDIARY BORROWERS, 
  
 VARIOUS LENDING INSTITUTIONS,

  
 and 
  
 JPMORGAN CHASE BANK, 
 as ADMINISTRATIVE AGENT, 
  
 
 
 Dated as of June 19, 2002 
  
 
 
 $600,000,000 
  
 
 
 J.P. MORGAN SECURITIES INC., 
 as
LEAD ARRANGER AND BOOK MANAGER, 
  
 and 
  
 WACHOVIA BANK N.A., 
 as CO-ARRANGER and SYNDICATION AGENT 
  

and 
  
 BARCLAYS BANK PLC, 
 CREDIT SUISSE 
  
 and 
  
 HSBC BANK U.S.A., 
 as CO-DOCUMENTATION AGENTS 

  
 TABLE OF CONTENTS 
  
 
	  	  	  	  	 Page
 

	 SECTION 1.
 	  	 Amount and Terms of Credit.
 	  	 1
 
	  	  	  	  	  
	 1.01
 	  	 Commitment
 	  	 1
 
	 1.02
 	  	 Minimum Borrowing Amounts, etc.
 	  	 2
 
	 1.03
 	  	 Notice of Borrowing of Revolving Loans
 	  	 2
 
	 1.04
 	  	 Competitive Bid Borrowings
 	  	 3
 
	 1.05
 	  	 Disbursement of Funds
 	  	 5
 
	 1.06
 	  	 Notes
 	  	 5
 
	 1.07
 	  	 Conversions
 	  	 6
 
	 1.08
 	  	 Pro Rata Borrowings, etc.
 	  	 6
 
	 1.09
 	  	 Interest
 	  	 6
 
	 1.10
 	  	 Interest Periods
 	  	 7
 
	 1.11
 	  	 Increased Costs, Illegality, etc.
 	  	 8
 
	 1.12
 	  	 Compensation
 	  	 11
 
	 1.13
 	  	 Change of Lending Office
 	  	 12
 
	 1.14
 	  	 Replacement of Lenders
 	  	 12
 
	 1.15
 	  	 Designated Subsidiary Borrowers
 	  	 13
 
	 1.16
 	  	 Extension of Commitment Expiration Date
 	  	 13
 
	  	  	  	  	  
	 SECTION 2.
 	  	 Letters of Credit.
 	  	 14
 
	  	  	  	  	  
	 2.01
 	  	 Letters of Credit
 	  	 14
 
	 2.02
 	  	 Letter of Credit Requests
 	  	 16
 
	 2.03
 	  	 Agreement to Repay Letter of Credit Drawings
 	  	 17
 
	 2.04
 	  	 Increased Costs
 	  	 17
 
	 2.05
 	  	 Letter of Credit Expiration Extensions
 	  	 18
 
	 2.06
 	  	 Changes to Stated Amount
 	  	 18
 
	 2.07
 	  	 Representations and Warranties of Lenders
 	  	 18
 
	  	  	  	  	  
	 SECTION 3.
 	  	 Fees; Commitments.
 	  	 19
 
	  	  	  	  	  
	 3.01
 	  	 Fees
 	  	 19
 
	 3.02
 	  	 Voluntary Reduction of Commitments
 	  	 20
 
	 3.03
 	  	 Mandatory Reduction of Commitments
 	  	 20
 
	  	  	  	  	  
	 SECTION 4.
 	  	 Payments.
 	  	 20
 
	  	  	  	  	  
	 4.01
 	  	 Voluntary Prepayments
 	  	 20
 
	 4.02
 	  	 Mandatory Prepayments
 	  	 21
 
	 4.03
 	  	 Method and Place of Payment
 	  	 22
 
	 4.04
 	  	 Net Payments
 	  	 22
 

 
 

 (i) 

  
 
	 SECTION 5.
 	  	 Conditions Precedent.
 	  	 25
 
	  	  	  	  	  
	 5.01
 	  	 Conditions Precedent to Effective Date
 	  	 25
 
	 5.02
 	  	 Conditions Precedent to All Loans and Letters of Credit
 	  	 26
 
	  	  	  	  	  
	 SECTION 6.
 	  	 Representations, Warranties and Agreements
 	  	 27
 
	  	  	  	  	  
	 6.01
 	  	 Corporate Existence and Power
 	  	 27
 
	 6.02
 	  	 Corporate and Governmental Authorization; No Contravention
 	  	 27
 
	 6.03
 	  	 Enforceability
 	  	 27
 
	 6.04
 	  	 Financial Information
 	  	 28
 
	 6.05
 	  	 Litigation
 	  	 28
 
	 6.06
 	  	 Tax Returns and Payments
 	  	 28
 
	 6.07
 	  	 Indebtedness
 	  	 28
 
	 6.08
 	  	 Insurance Licenses
 	  	 29
 
	 6.09
 	  	 Intellectual Property
 	  	 29
 
	 6.10
 	  	 Not an Investment Company
 	  	 29
 
	 6.11
 	  	 Public Utility Holding Company Act
 	  	 29
 
	 6.12
 	  	 Ownership of Property; Liens
 	  	 29
 
	 6.13
 	  	 No Default
 	  	 29
 
	 6.14
 	  	 Full Disclosure
 	  	 29
 
	 6.15
 	  	 Compliance with Laws
 	  	 29
 
	 6.16
 	  	 Capital Stock
 	  	 29
 
	 6.17
 	  	 Compliance with ERISA
 	  	 30
 
	 6.18
 	  	 Margin Stock
 	  	 30
 
	 6.19
 	  	 Subsidiaries
 	  	 30
 
	 6.20
 	  	 Use of Proceeds
 	  	 30
 
	  	  	  	  	  
	 SECTION 7.
 	  	 Affirmative Covenants
 	  	 30
 
	  	  	  	  	  
	 7.01
 	  	 Information Covenants
 	  	 30
 
	 7.02
 	  	 Books, Records and Inspections
 	  	 32
 
	 7.03
 	  	 Maintenance of Existence
 	  	 32
 
	 7.04
 	  	 ERISA
 	  	 32
 
	 7.05
 	  	 Insurance
 	  	 33
 
	 7.06
 	  	 Maintenance of Property
 	  	 33
 
	 7.07
 	  	 Payment of Taxes
 	  	 33
 
	  	  	  	  	  
	 SECTION 8.
 	  	 Negative Covenants
 	  	 33
 
	  	  	  	  	  
	 8.01
 	  	 Liens
 	  	 34
 
	 8.02
 	  	 Dissolution
 	  	 35
 
	 8.03
 	  	 Consolidations, Mergers, Sales of Assets and Acquisitions
 	  	 35
 
	 8.04
 	  	 Use of Proceeds
 	  	 36
 
	 8.05
 	  	 Transactions with Affiliates
 	  	 36
 
	 8.06
 	  	 Indebtedness
 	  	 36
 
	 8.07
 	  	 Private Act
 	  	 36
 
	 8.08
 	  	 Restricted Payments
 	  	 36
 
	 8.09
 	  	 Business
 	  	 36
 

 
 

 (ii) 

  
 
	 8.10
 	  	 Leverage Ratio
 	  	 36
 
	 8.11
 	  	 Minimum Consolidated Tangible Net Worth
 	  	 37
 
	 8.12
 	  	 Claims Paying Ratings
 	  	 37
 
	  	  	  	  	  
	 SECTION 9.
 	  	 Defaults.
 	  	 37
 
	  	  	  	  	  
	 9.01
 	  	 Events of Default
 	  	 37
 
	 9.02
 	  	 Notice of Default
 	  	 39
 
	  	  	  	  	  
	 SECTION 10.
 	  	 Definitions
 	  	 39
 
	  	  	  	  	  
	 SECTION 11.
 	  	 The Administrative Agent.
 	  	 55
 
	  	  	  	  	  
	 11.01
 	  	 Appointment
 	  	 55
 
	 11.02
 	  	 Nature of Duties
 	  	 55
 
	 11.03
 	  	 Lack of Reliance on the Administrative Agent
 	  	 55
 
	 11.04
 	  	 Certain Rights of the Administrative Agent
 	  	 56
 
	 11.05
 	  	 Reliance
 	  	 56
 
	 11.06
 	  	 Indemnification
 	  	 56
 
	 11.07
 	  	 The Administrative Agent’s Individual Capacities
 	  	 56
 
	 11.08
 	  	 Holders
 	  	 56
 
	 11.09
 	  	 Resignation by the Administrative Agent
 	  	 57
 
	  	  	  	  	  
	 SECTION 12.
 	  	 Miscellaneous.
 	  	 57
 
	  	  	  	  	  
	 12.01
 	  	 Payment of Expenses, etc
 	  	 57
 
	 12.02
 	  	 Right of Setoff
 	  	 58
 
	 12.03
 	  	 Notices
 	  	 58
 
	 12.04
 	  	 Benefit of Agreement
 	  	 58
 
	 12.05
 	  	 No Waiver; Remedies Cumulative
 	  	 60
 
	 12.06
 	  	 Payments Pro Rata
 	  	 60
 
	 12.07
 	  	 Calculations; Computations
 	  	 61
 
	 12.08
 	  	 Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial
 	  	 61
 
	 12.09
 	  	 Counterparts
 	  	 62
 
	 12.10
 	  	 Headings Descriptive
 	  	 62
 
	 12.11
 	  	 Amendment or Waiver
 	  	 62
 
	 12.12
 	  	 Survival
 	  	 63
 
	 12.13
 	  	 Domicile of Loans
 	  	 63
 
	 12.14
 	  	 Confidentiality
 	  	 63
 
	 12.15
 	  	 Registry
 	  	 63
 
	 12.16
 	  	 Judgment Currency
 	  	 64
 
	 12.17
 	  	 Euro
 	  	 64
 
	 12.18
 	  	 Effective Overall Rate
 	  	 65
 
	  	  	  	  	  
	 SECTION 13.
 	  	 Company Guaranty.
 	  	 65
 
	  	  	  	  	  
	 13.01
 	  	 The Guaranty
 	  	 65
 
	 13.02
 	  	 Bankruptcy
 	  	 65
 
	 13.03
 	  	 Nature of Liability
 	  	 66
 

 
 

 (iii) 

  
 
	 13.04
 	  	 Independent Obligation
 	  	 66
 
	 13.05
 	  	 Authorization
 	  	 66
 
	 13.06
 	  	 Reliance
 	  	 67
 
	 13.07
 	  	 Subordination
 	  	 67
 
	 13.08
 	  	 Waiver
 	  	 68
 

 
  
 
	 ANNEX I
 ANNEX II
 ANNEX III
 ANNEX IV
 ANNEX V
  
 EXHIBIT A-1
 EXHIBIT A-2
 EXHIBIT B-1
 EXHIBIT B-2
 EXHIBIT C
 EXHIBIT D-1
 EXHIBIT D-2
 EXHIBIT D-3
 EXHIBIT D-4
 EXHIBIT E
 EXHIBIT F
 EXHIBIT G
 EXHIBIT H
 EXHIBIT I
 	 	 Commitments
 Lender Addresses
 Subsidiaries
 Debt
 Liens
  
 —     Form of Notice of Borrowing
 —     Form of Notice of Competitive Bid
Borrowing
 —     Form of Revolving/Term Note
 —     Form
of Competitive Bid Note
 —     Form of Section 4.04(b)(ii) Certificate
 —
    Form of Opinion of Christine Patton, Esq.
 —     Form of Opinion of Cathy A. Hauck, Esq.
 —     Form of Opinion of Davis Polk & Wardwell
 —     Form of Opinion of
Willkie, Farr & Gallagher
 —     Form of Officers’ Certificate
 —
    Form of Assignment Agreement
 —     Form of DSB Assumption Agreement
 —     Form of Opinion of Designated Subsidiary Borrowers’ Counsel
 —     Form of Letter of Credit
Request
 

 
 

 (iv) 

  
 CREDIT AGREEMENT, dated as of June 19, 2002, among PARTNERRE LTD., a company
organized under the laws of Bermuda (the “Company”) the Designated Subsidiary Borrowers (as hereinafter defined) from time to time party hereto, the lenders from time to time party hereto (each, a “Lender” and, collectively, the
“Lenders”) and JPMORGAN CHASE BANK, as Administrative Agent (in such capacity, the “Administrative Agent”). Unless otherwise defined herein, all capitalized terms used herein and defined in Section 10 are used herein as so
defined. 
  
 W I T N E S S E T H: 

 
 WHEREAS, subject to and upon the terms and conditions herein set forth, the Lenders are willing to make available to the
Borrowers the credit facilities provided for herein; 
  
 NOW, THEREFORE, IT IS AGREED: 
  
 
SECTION 1. Amount and Terms of Credit. 
  
 1.01
Commitment.    (a) Subject to and upon the terms and conditions herein set forth, each Lender severally agrees, at any time and from time to time on and after the Effective Date and prior to the Commitment Expiration Date,
to make a loan or loans (each, a “Revolving Loan” and, collectively, the “Revolving Loans”) to one or more of the Borrowers (on a several basis), which Revolving Loans (i) may be made and maintained in such Approved Currency as
is requested by the applicable Borrower; (ii) may be repaid and reborrowed in accordance with the provisions hereof; (iii) except as hereinafter provided, may, at the option of each Borrower, be incurred and maintained as, and/or converted into,
Base Rate Loans or Eurodollar Loans, provided that all Revolving Loans made as part of the same Borrowing shall, unless otherwise specified herein, consist of Revolving Loans of the same Type; and (iv) shall not exceed in aggregate Principal
Amount outstanding at any time either (x) $200,000,000 or (y) when added to the sum of the aggregate Principal Amount of all Competitive Bid Loans then outstanding and all Letter of Credit Outstandings at such time, the Total Commitment at such
time. 
  
 (b) Subject to and upon the terms and conditions set forth herein, each Borrower and each Lender which has
Revolving Loans outstanding at such time agree that at 9:00 A.M. (New York time) on the Commitment Expiration Date, the aggregate principal amount of Revolving Loans owing to such Lender and outstanding at such time shall (unless such Revolving
Loans have been declared (or have become) due and payable pursuant to this Agreement), without any notice or action by any party, automatically convert to and thereafter constitute Term Loans owing to such Lender hereunder. The Term Loans of each
Lender (i) shall be made and thereafter maintained in the same currencies in which the related Revolving Loans were denominated as of the Commitment Expiration Date; (ii) shall, at the option of the Borrower, be Base Rate Loans or Eurodollar Loans,
provided that (A) Base Rate Loans may only be denominated in Dollars and (B) all Term Loans comprising the same Borrowing shall, unless otherwise specifically provided herein, consist of Term Loans of the same Type; and (iii) shall not exceed
in initial Principal Amount for such Lender an amount which equals the total Principal Amount of Revolving Loans owed to such Lender and outstanding at 9:00 A.M. 
 

 - 1 - 

 (New York time) on the Commitment Expiration Date. Once repaid, Term Loans may not be reborrowed. 
  
 (c) Subject to and upon the terms and conditions herein set forth, each Lender severally agrees that one or more Borrowers may (on a
several basis) incur a loan or loans (each, a “Competitive Bid Loan” and, collectively, the “Competitive Bid Loans”) from one or more Bidder Lenders pursuant to a Competitive Bid Borrowing at any time and from time to time on and
after the Effective Date and prior to the date which is three Business Day preceding the date which is 10 days prior to the Commitment Expiration Date, provided that after giving effect to any Competitive Bid Borrowing and the use of the
proceeds thereof, the aggregate Principal Amount of Competitive Bid Loans outstanding shall not exceed either (x) when added to the aggregate Principal Amount of Revolving Loans then outstanding, $200,000,000 or (y) when added to the aggregate
Principal Amount of all Revolving Loans then outstanding and the Letter of Credit Outstandings at such time, the Total Commitment at such time. 
  
 1.02 Minimum Borrowing Amounts, etc.    The aggregate Principal Amount of each Borrowing shall not be less than the Minimum Borrowing Amount. More than one Borrowing may be
incurred on any day, provided that at no time shall there be outstanding more than 10 Borrowings of Eurodollar Loans. 
  
 1.03 Notice of Borrowing of Revolving Loans.    (a) Whenever a Borrower desires to incur Revolving Loans, it shall give the Administrative Agent at its Notice Office, (x) prior to 11:00 A.M. (New York time)
at least three Business Days’ prior written notice (or telephonic notice promptly confirmed in writing) of each Borrowing of Eurodollar Loans in Dollars, (y) prior to 11:00 A.M. (London time) at least four Business Days prior written notice (or
telephonic notice promptly confirmed in writing) of each Borrowing of Eurodollar Loans constituting Alternate Currency Loans and (z) written notice (or telephonic notice promptly confirmed in writing) prior to 10:00 A.M. (New York time) on the date
of Borrowing in the case of each Borrowing of Base Rate Loans. Each such notice (each, a “Notice of Borrowing”) shall be in the form of Exhibit A-1 and shall be irrevocable and shall specify (i) the identity of the applicable Borrower,
(ii) in the case of Alternate Currency Loans, the Approved Currency for such Loans (iii) the aggregate principal amount of the Revolving Loans to be made pursuant to such Borrowing, (iv) the date of Borrowing (which shall be a Business Day), (v)
whether the respective Borrowing shall consist of Base Rate Loans or Eurodollar Loans and (vi) if such Borrowing consists of Eurodollar Loans, the Interest Period to be initially applicable thereto. The Administrative Agent shall promptly give each
Lender written notice (or telephonic notice promptly confirmed in writing) of each proposed Borrowing, of the portion thereof to be funded by such Lender and of the other matters covered by the Notice of Borrowing. 
  
 (b) Without in any way limiting the obligation of each Borrower to confirm in writing any telephonic notice permitted to be given
hereunder, the Administrative Agent may prior to receipt of written confirmation act without liability upon the basis of such telephonic notice, believed by it in good faith to be from an Authorized Officer of such Borrower. In each such case, each
Borrower hereby waives the right to dispute the Administrative Agent’s record of the terms of such telephonic notice absent manifest error. 
 

 - 2 - 

 1.04 Competitive Bid Borrowings.    (a) Whenever a Borrower desires to incur a Competitive Bid
Borrowing, it shall deliver to the Administrative Agent, prior to 11:00 A.M. (New York time) (x) at least four Business Days prior to the date of such proposed Competitive Bid Borrowing, in the case of a Spread Borrowing, and (y) at least one
Business Day prior to the date of such proposed Competitive Bid Borrowing, in the case of an Absolute Rate Borrowing which is Dollar-denominated and at least three Business Days prior to the date of such proposed Competitive Bid Borrowing, in the
case of Absolute Rate Borrowing which is an Alternate Currency Loan, a written notice substantially in the form of Exhibit A-2 hereto (a “Notice of Competitive Bid Borrowing”), which notice shall specify in each case (i) the identity of
the applicable Borrower, (ii) the date (which shall be a Business Day) and the aggregate amount of the proposed Competitive Bid Borrowing, (iii) the maturity date for repayment of each and every Competitive Bid Loan to be made as part of such
Competitive Bid Borrowing (which maturity date may be (A) up to six months after the date of such Competitive Bid Borrowing in the case of a Spread Borrowing and (B) no fewer than seven days and no more than 180 days after the date of such
Competitive Bid Borrowing in the case of an Absolute Rate Borrowing, provided that in no event shall the maturity date of any Competitive Bid Borrowing be later than the tenth Business Day preceding the Commitment Expiration Date), (iv) the
interest payment date or dates relating thereto, (v) whether the proposed Competitive Bid Borrowing is to be an Absolute Rate Borrowing or a Spread Borrowing, (vi) in the case of an Alternate Currency Loan, the Alternate Currency for such
Competitive Bid Borrowing, and (vii) any other terms to be applicable to such Competitive Bid Borrowing. The Administrative Agent shall promptly notify each Bidder Lender by telephone or facsimile of each such request for a Competitive Bid Borrowing
received by it from a Borrower and of the contents of the related Notice of Competitive Bid Borrowing. 
  
 (b) Each
Bidder Lender shall, if, in its sole discretion, it elects to do so, irrevocably offer to make one or more Competitive Bid Loans to the applicable Borrower as part of such proposed Competitive Bid Borrowing at a rate or rates of interest specified
by such Bidder Lender in its sole discretion and determined by such Bidder Lender independently of each other Bidder Lender, by notifying the Administrative Agent (which shall give prompt notice thereof to such Borrower by facsimile), before 9:30
A.M. (New York time) on the date (the “Reply Date”) which is (x) in the case of an Absolute Rate Borrowing which is Dollar-denominated, the date of such proposed Competitive Bid Borrowing and in the case of an Absolute Rate Borrowing which
is an Alternate Currency Loan, two Business Days before the date of such Competitive Bid Borrowing or (y) in the case of a Spread Borrowing, three Business Days before the date of such proposed Competitive Bid Borrowing, of the minimum amount and
maximum amount of each Competitive Bid Loan which such Bidder Lender would be willing to make as part of such proposed Competitive Bid Borrowing (which amounts may, subject to the proviso contained in Section 1.01(c), exceed such Bidder
Lender’s Commitment), the rate or rates of interest therefor and such Bidder Lender’s lending office with respect to such Competitive Bid Loan; provided that if the Administrative Agent in its capacity as a Bidder Lender shall, in
its sole discretion, elect to make any such offer, it shall notify the respective Borrower of such offer before 9:15 A.M. (New York time) on the Reply Date. If any Bidder Lender shall elect not to make such an offer, such Bidder Lender shall so
notify the Administrative Agent, before 9:30 A.M. (New York time) on the Reply Date, and such Bidder Lender shall not be obligated to, and shall not, make any Competitive Bid Loan as part of such Competitive Bid Borrowing; provided that the failure

	

 

 - 3 - 

 by any Bidder Lender to give such notice shall not cause such Bidder Lender to be obligated to make any Competitive Bid Loan as part of such
proposed Competitive Bid Borrowing. 
  
 (c) The applicable Borrower shall, in turn, before 10:30 A.M. (New York time)
on the Reply Date, either: 
  
 (i) cancel such Competitive Bid Borrowing by giving the Administrative
Agent notice to such effect (it being understood and agreed that if such Borrower gives no such notice of cancellation and no notice of acceptance pursuant to clause (ii) below, then such Borrower shall be deemed to have canceled such Competitive
Bid Borrowing), or 
  
 (ii) accept one or more of the offers made by any Bidder Lender or Bidder
Lenders pursuant to clause (b) above by giving notice (in writing or by telephone confirmed in writing) to the Administrative Agent of the amount of each Competitive Bid Loan (which amount shall be equal to or greater than the minimum amount, and
equal to or less than the maximum amount, notified to the applicable Borrower by the Administrative Agent on behalf of such Bidder Lender for such Competitive Bid Borrowing pursuant to clause (b) above) to be made by each Bidder Lender as part of
such Competitive Bid Borrowing, and reject any remaining offers made by Bidder Lenders pursuant to clause (b) above by giving the Administrative Agent notice to that effect; provided that the acceptance of offers may only be made on the basis
of ascending Absolute Rates (in the case of an Absolute Rate Borrowing) or Spreads (in the case of a Spread Borrowing), in each case commencing with the lowest rate so offered; provided further, however, that if offers are made by two
or more Bidder Lenders at the same rate and acceptance of all such equal offers would result in a greater principal amount of Competitive Bid Loans being accepted than the aggregate principal amount requested by the applicable Borrower, if such
Borrower elects to accept any such offers such Borrower shall accept such offers pro rata from such Bidder Lenders (on the basis of the maximum amounts of such offers) unless any such Bidder Lender’s pro rata share
would be less than the minimum amount specified by such Bidder Lender in its offer, in which case such Borrower shall have the right to accept one or more such equal offers in their entirety and reject the other equal offer or offers or to allocate
acceptance among all such equal offers (but giving effect to the minimum and maximum amounts specified for each such offer pursuant to clause (b) above), as such Borrower may elect in its sole discretion. 
  
 (d) If any Competitive Bid Borrowing is cancelled or deemed cancelled pursuant to clause (c)(i) above, the Administrative Agent shall give
prompt notice thereof to the Bidder Lenders and such Competitive Bid Borrowing shall not be made. 
  
 (e) If the
applicable Borrower accepts one or more of the offers made by any Bidder Lender or Bidder Lenders pursuant to clause (c)(ii) above, the Administrative Agent shall in turn promptly notify (x) each Bidder Lender that has made an offer as described in
clause (b) above, of the date and aggregate amount of such Competitive Bid Borrowing and whether or not any offer or offers made by such Bidder Lender pursuant to clause (b) above have been accepted by the Borrower and (y) each Bidder Lender that is
to make a Competitive Bid Loan as part of 
 

 - 4 - 

 such Competitive Bid Borrowing, of the amount of each Competitive Bid Loan to be made by such Bidder Lender as part of such Competitive Bid
Borrowing. 
  
 1.05 Disbursement of Funds.     (a) No later than 12:00 Noon (New York
time) (or (i) 12:00 Noon (London time) in the case of a Borrowing of Eurodollars constituting Alternate Currency Loans, (ii) 1:00 P.M. (New York time) in the case of a Borrowing of Base Rate Loans for which the applicable Notice of Borrowing was
given on the date of borrowing and (iii) 3:00 P.M. (New York time) in the case of a Competitive Bid Borrowing) on the date specified in each Notice of Borrowing or Notice of Competitive Bid Borrowing, each Lender will make available its pro
rata share, if any, of such Borrowing requested to be made on such date. All such amounts shall be made available to the Administrative Agent in the relevant Approved Currency, as the case may be, and immediately available funds at the
Payment Office and the Administrative Agent promptly will make available to the applicable Borrower by depositing to the account designated by such Borrower, which account shall be at an institution in the same city as the respective Payment Office,
the aggregate of the amounts so made available in the type of funds received. Unless the Administrative Agent shall have been notified by any Lender participating in a Borrowing prior to the date of such Borrowing that such Lender does not intend to
make available to the Administrative Agent its portion of the Borrowing or Borrowings to be made on such date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date of Borrowing,
and the Administrative Agent, in reliance upon such assumption, may (in its sole discretion and without any obligation to do so) make available to the applicable Borrower a corresponding amount. If such corresponding amount is not in fact made
available to the Administrative Agent by such Lender and the Administrative Agent has made available same to the applicable Borrower, the Administrative Agent shall be entitled to recover such corresponding amount from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the applicable Borrower, and such Borrower shall pay such corresponding amount to the
Administrative Agent within three Business Days of receipt of such notice unless previously paid by such Lender. The Administrative Agent shall also be entitled to recover on demand from such Lender or such Borrower, as the case may be, interest on
such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to such Borrower to the date such corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (x) if paid by such Lender, the overnight Federal Funds Effective Rate or (y) if paid by such Borrower, the then applicable rate of interest, calculated in accordance with Section 1.09, for the respective Loans. 

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

	1.06
	 
	Notes 
 

  
 1.06 Notes.    (a) Each Borrower’s obligation to pay the principal of, and interest on, the Loans made to it by each Lender shall be evidenced (i) if Revolving Loans or Term Loans, by a promissory note
substantially in the form of Exhibit B-1 with blanks appropriately completed (each, a “Revolving/Term Note” and, collectively, the “Revolving/Term Notes”) and (ii) if Competitive Bid Loans, by a promissory note substantially in
the form of Exhibit B-2 with 
 

 - 5 - 

 blanks appropriately completed (each a “Competitive Bid Note” and, collectively, the “Competitive Bid Notes”). 

 
 (b) Each Lender will note on its internal records the amount of each Loan made by it and each payment in respect thereof and
will, prior to any transfer of any of its Notes, endorse on the reverse side thereof the outstanding Principal Amount of Loans evidenced thereby. Failure to make any such notation shall not affect a Borrower’s obligations in respect of such
Loans. 
  
 1.07 Conversions.    Each Borrower shall have the option to convert on any
Business Day all or a portion at least equal to the applicable Minimum Borrowing Amount of its Revolving Loans or Term Loans denominated in a single Approved Currency and constituting Base Rate Loans or Eurodollar Loans into a Borrowing or
Borrowings of Revolving Loans or Term Loans as the case may be, denominated in such Approved Currency and constituting Eurodollar Loans or Base Rate Loans, respectively, provided that (i) Eurodollar Loans denominated in a currency other than Dollars
may not be converted into Base Rate Loans, (ii) no partial conversion shall reduce the outstanding principal amount of the Eurodollar Loans made pursuant to a Borrowing to less than the Minimum Borrowing Amount applicable thereto, (iii) Base Rate
Loans may not be converted into Eurodollar Loans when a Default or Event of Default is then in existence if the Administrative Agent or the Required Lenders shall have determined in its or their sole discretion not to permit such conversion and (iv)
Borrowings of Eurodollar Loans resulting from this Section 1.07 shall be limited in number as provided in Section 1.02. Each such conversion shall be effected by the respective Borrower giving the Administrative Agent at the Notice Office, prior to
12:00 Noon (New York time), at least three Business Days’ (or one Business Day in the case of a conversion into Base Rate Loans) prior written notice (or telephonic notice promptly confirmed in writing) (each, a “Notice of
Conversion”) specifying the Revolving Loans or Term Loans to be so converted, the Type of Loans (as to interest option) to be converted into and, if to be converted into a Borrowing of Eurodollar Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall give each Lender prompt notice of any such proposed conversion affecting any of its Loans. 
  
 1.08 Pro Rata Borrowings, etc.    (a) All Revolving Loans incurred pursuant to a Borrowing shall be made by the Lenders pro rata on the basis of their
respective Commitments. It is understood that no Lender shall be responsible for any default by any other Lender in its obligation to make Revolving Loans hereunder, and that each Lender shall be obligated to make the Revolving Loans provided to be
made by it hereunder, regardless of the failure of any other Lender to fulfill its commitments hereunder and regardless of whether such Lender has made any Competitive Bid Loans hereunder. 
  
 (b) All Term Loans incurred pursuant to a Borrowing shall be made by the Lenders pro rata on the basis of their respective Commitments as in effect
immediately prior to the Commitment Expiration Date. 
  
 1.09 Interest.    (a) The unpaid
principal amount of each Base Rate Loan shall bear interest from the date of the Borrowing thereof until maturity (whether by acceleration or otherwise) or conversion at a rate per annum which shall at all times be equal to the sum of the Base Rate
plus the Applicable Margin each as in effect from time to time. 
 

 - 6 - 

 (b) The unpaid principal amount of each Eurodollar Loan shall bear interest from the date of the Borrowing thereof until
maturity (whether by acceleration or otherwise) or conversion at a rate per annum which shall at all times during each Interest Period applicable thereto be equal to the sum of LIBOR for such Interest Period plus the Applicable Margin. 

 
 (c) The unpaid principal amount of each Competitive Bid Loan shall bear interest from the date of the Borrowing thereof until
maturity (whether by acceleration or otherwise) at a rate or rates per annum specified by a Bidder Lender or Bidder Lenders, as the case may be, pursuant to Section 1.04(b) and accepted by the respective Borrower pursuant to Section 1.04(c).

  
 (d) All overdue principal and, to the extent permitted by law, overdue interest in respect of any Loans shall be
payable on demand and shall bear interest at the Base Rate in effect from time to time plus 2%, provided that principal in respect of Eurodollar Loans and Competitive Bid Loans shall bear interest from the date same becomes due (whether by
acceleration or otherwise) until the end of the Interest Period applicable thereto at a rate per annum equal to 2% plus the rate of interest applicable on the due date therefor. 
  
 (e) Interest shall accrue from and including the date of any Borrowing to but excluding the date of any repayment thereof, and shall be payable (i) in respect of each Base
Rate Loan, quarterly in arrears on the last Business Day of each calendar quarter, (ii) in respect of each Eurodollar Loan, on the last day of each Interest Period applicable thereto and, in the case of an Interest Period in excess of three months,
on each date occurring at three month intervals after the first day of such Interest Period, (iii) in respect of each Competitive Bid Loan, at such times as specified in the Notice of Competitive Bid Borrowing relating thereto, and (iv) in respect
of each Loan, on any prepayment or conversion (other than the prepayment or conversion of any Base Rate Loan) (on the amount prepaid or converted), at maturity (whether by acceleration or otherwise) and, after such maturity, on demand. 

 
 (f) All computations of interest hereunder shall be made in accordance with Section 12.07(b). 
  
 (g) The Administrative Agent, upon determining the interest rate for any Borrowing for any Interest Period, shall promptly notify the
applicable Borrower and the Lenders thereof. 
  
 1.10 Interest Periods.    (a) At the time
a Borrower gives a Notice of Borrowing or a Notice of Conversion in respect of the making of, or conversion into, a Borrowing of Eurodollar Loans (in the case of the initial Interest Period applicable thereto) or prior to 12:00 Noon (New York Time)
on the third Business Day prior to the expiration of an Interest Period applicable to a Borrowing of Eurodollar Loans, it shall have the right to elect by giving the Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of the Interest Period applicable to such Borrowing, which Interest Period shall, at the option of such Borrower, be a one, two, three or six month period or such other period available to all Lenders. Notwithstanding anything to the
contrary contained above: 
  
 (i) the initial Interest Period for any Borrowing shall commence on the
date of such Borrowing (including, where relevant, the date of any conversion from a 
 

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 Borrowing of Base Rate Loans) and each Interest Period occurring thereafter in respect of such Borrowing shall commence
on the day on which the next preceding Interest Period expires; 
  
 (ii) if any Interest Period
begins on (x) the last Business Day of a month, it shall end on the last Business Day of the month in which it is to end and (y) a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such
Interest Period shall end on the last Business Day of such calendar month; 
  
 (iii) if any Interest
Period would otherwise expire on a day which is not a Business Day, such Interest Period shall expire on the next succeeding Business Day, provided that if any Interest Period would otherwise expire on a day which is not a Business Day but is
a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day; 
  
 (iv) no Interest Period may be elected that would extend beyond the Final Maturity Date; 
  
 (v) at any time when a Default or an Event of Default is then in existence (x) in the case of Eurodollar Loans denominated in Dollars, no Interest Period
may be elected if the Administrative Agent or the Required Lenders shall have determined in its or their sole discretion not to permit such election and (y) in the case of Eurodollar Loans denominated in a currency other than Dollars, no Interest
Period longer than one month may be elected if the Administrative Agent or the Required Lenders shall have determined in its or their sole discretion not to permit such election; and 
  
 (vi) all Eurodollar Loans comprising a Borrowing shall at all times have the same Interest Period. 
  

(b) If upon the expiration of any Interest Period, the applicable Borrower has failed to (or may not) elect a new Interest Period to be applicable to the Loans subject
to the expiring Interest Period as provided above, such Borrower shall be deemed to have elected, in the case of Eurodollar Loans, to convert such Borrowing into a Borrowing of Base Rate Loans effective as of the expiration date of such current
Interest Period, provided that if such Eurodollar Loans are denominated in a currency other than Dollars, then such Eurodollar Loans shall not convert to Base Rate Loans but shall instead be pre-paid by the applicable Borrower on the last day of
such Interest Period. 
  
 1.11 Increased Costs, Illegality, etc.    (a) In the event that
(x) in the case of clause (i) or (iv) below, the Administrative Agent or (y) in the case of clause (ii) or (iii) below, any Lender shall have determined (which determination shall, absent manifest error, be final and conclusive and binding upon all
parties hereto): 
  
 (i) on any date for determining LIBOR for any Interest Period that, by reason of
any changes arising after the date of this Agreement affecting the relevant interbank market, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of LIBOR; 

 - 8 - 

 (ii) at any time, that such Lender shall actually incur increased costs or reductions in the amounts
received or receivable hereunder with respect to any Eurodollar Loans or Competitive Bid Loans (other than any increased cost or reduction in the amount received or receivable resulting from the imposition of or a change in the rate of taxes or
similar charges) because of any change since the Effective Date (or, in the case of any Competitive Bid Loan, since the making of such Competitive Bid Loan) in any applicable law, governmental rule, regulation, guideline or order (or in the
interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation, guideline or order) (such as, for example, but not limited to, a change in official reserve requirements, but, in all events,
excluding amounts payable pursuant to Section 1.11(c), 1.11(d) or 1.11(e)); 
  
 (iii) at any time,
that the making or continuance of any Eurodollar Loans or Competitive Bid Loans has become unlawful by compliance by such Lender in good faith with any law, governmental rule, regulation or guideline, or has become impracticable as a result of a
contingency occurring after the Effective Date which adversely affects the relevant interbank market; or 
  
 (iv) at any time that any Alternate Currency is not available in sufficient amounts, as determined in good faith by the Administrative Agent, to fund any Borrowing of Loans denominated in such Alternate Currency; 

 
 then, and in any such event, such Lender (or the Administrative Agent in the case of clause (i) or (iv) above) shall (x) on such date and (y) within
ten Business Days of the date on which such event no longer exists give notice (by telephone confirmed in writing) to the respective Borrower and, except in the case of clause (i) or (iv) above, to the Administrative Agent of such determination
(which notice the Administrative Agent shall promptly transmit to each of the other Lenders). Thereafter, and for so long as the applicable circumstance continues to exist, (w) in the case of clause (i) above, Eurodollar Loans (and Competitive Bid
Loans constituting a Spread Borrowing priced by reference to LIBOR) shall no longer be available until such time as the Administrative Agent notifies the respective Borrower and the Lenders that the circumstances giving rise to such notice by the
Administrative Agent no longer exist in accordance with clause (y) of the preceding sentence, and any Notice of Borrowing, Notice of Competitive Bid Borrowing or Notice of Conversion given by a Borrower with respect to such Loans which have not yet
been incurred shall be deemed rescinded by the relevant Borrower, (x) in the case of clause (ii) above, the applicable Borrower shall pay to such Lender, upon written demand therefor, such additional amounts (in the form of an increased rate of, or
a different method of calculating, interest or otherwise as such Lender in its sole discretion shall determine) as shall be required to compensate such Lender for such increased costs or reductions in amounts receivable hereunder (a written notice
as to the additional amounts owed to such Lender, showing the basis for the calculation thereof in reasonable detail, submitted to the applicable Borrower by such Lender shall, absent manifest error, be final and conclusive and binding upon all
parties hereto), (y) in the case of clause (iii) above, the applicable Borrower shall take one of the actions specified in Section 1.11(b) as promptly as possible and, in any event, within the time period required by law and (z) in the case of
clause (iv) above, Loans in the affected Alternate Currency shall no longer be available until such time as the Administrative Agent notifies the respective Borrower and the Lenders that the circumstances giving rise to such notice by the
Administrative 
 

 - 9 - 

 Agent no longer exist in accordance with clause (y) of the preceding sentence, and any Notice of Borrowing, Notice of Competitive Bid Borrowing
or Notice of Conversion given by a Borrower with respect to such Alternate Currency Loans which have not yet been incurred shall be deemed rescinded by such Borrower. 
  
 (b) At any time when any Eurodollar Loan or Competitive Bid Loan is affected by the circumstances described in Section 1.11(a)(ii) or (iii), the applicable Borrower may
(and in the case of a Eurodollar Loan or Competitive Bid Loan affected pursuant to Section 1.11(a)(iii), the applicable Borrower shall) either (i) if the affected Eurodollar Loan or Competitive Bid Loan is then being made pursuant to a Borrowing,
cancel said Borrowing by giving the Administrative Agent telephonic notice (confirmed promptly in writing) thereof on the same date that the respective Borrower was notified by a Lender pursuant to Section 1.11(a)(ii) or (iii), or (ii) if the
affected Eurodollar Loan or Competitive Bid Loan is then outstanding, upon at least three Business Days’ notice to the Administrative Agent, (A) in the case of a Eurodollar Loan denominated in Dollars, require the affected Lender to convert
each such Eurodollar Loan into a Base Rate Loan, and (B) in the case of a Eurodollar Loan denominated in an Alternate Currency and in the case of a Competitive Bid Loan, repay all such Eurodollar Loans or Competitive Bid Loans in full, provided that
if more than one Lender is affected at any time, then all affected Lenders must be treated the same pursuant to this Section 1.11(b). 
  
 (c) If any Lender shall have determined that after the Effective Date, the adoption or effectiveness of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by such Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Lender’s or such
corporation’s capital or assets as a consequence of its commitments or obligations hereunder to a level below that which such Lender or such other corporation could have achieved but for such adoption, effectiveness, change or compliance
(taking into consideration such Lender’s or such other corporation’s policies with respect to capital adequacy), then from time to time, within 10 days after written demand by such Lender (with a copy to the Administrative Agent), the
Borrowers jointly and severally agree to pay to such Lender such additional amount or amounts as will compensate such Lender or such other corporation for such reduction. In determining such additional amounts, each Lender will act reasonably and in
good faith and will use averaging and attribution methods that are commercially reasonable. Each Lender, upon so determining that any additional amounts will be payable pursuant to this Section 1.11(c), will give prompt written notice thereof to the
Borrowers, which notice shall set forth in reasonable detail the basis of the calculation of such additional amounts, although the failure to give any such notice shall not release or diminish each Borrower’s obligations to pay additional
amounts pursuant to this Section 1.11(c) upon the subsequent receipt of such notice. 
  
 (d) In the event that any
Lender shall in good faith determine (which determination shall, absent manifest error, be final and conclusive and binding on all parties hereto) at any time that such Lender is required to maintain reserves (including, without limitation, any
marginal, emergency, supplemental, special or other reserves required by applicable law) which have 

	

 

 - 10 - 

 been established by any Federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body with
jurisdiction over such Lender (including any branch, Affiliate or funding office thereof) in respect of any Loans or any category of liabilities which includes deposits by reference to which the interest rate on any Loan is determined or any
category of extensions of credit or other assets which includes loans by a non-United States office of any Lender to non-United States residents, then, unless such reserves are included in Section 1.11(a)(ii), 1.11(c) or 1.11(e), such Lender shall
promptly notify the Borrowers in writing specifying the additional amounts required to indemnify such Lender against the cost of maintaining such reserves (such written notice to provide in reasonable detail a computation of such additional amounts)
and each Borrower shall, and shall be obligated to, pay to such Lender such specified amounts as additional interest at the time that such Borrower is otherwise required to pay interest in respect of such Loan or, if later, on written demand
therefor by such Lender. 
  
 (e) In the event that any Lender shall in good faith determine (which determination
shall, absent manifest error, be final and conclusive and binding on all parties hereto) at any time that such Lender has incurred Additional Costs in respect of any Loans then, unless such Additional Costs are included in Section 1.11(a)(ii) or
1.11(c) or 1.11(d) such Lender shall promptly notify the Borrowers and the Administrative Agent in writing specifying the additional amounts required to indemnify such Lender against such Additional Costs (such written notice to provide in
reasonable detail a computation of such additional amounts) and each Borrower shall, and shall be obligated to, pay to such Lender such specified amounts as additional interest at the time that such Borrower is otherwise required to pay interest in
respect of such Loan or, if later, on written demand therefor by such Lender. 
  
 (f) The Borrowers shall not be
obligated to pay any additional amounts arising pursuant to Sections 1.11(a)(ii), 1.11(c), 1.11(d) or 1.11(e) that are attributable to the Excluded Period with respect to such additional amount; provided, that if an applicable law, rule, regulation,
guideline or request shall be adopted or made on any date and shall be applicable to the period prior to the date on which such law, rule, regulation, guideline or request is adopted or made (a “Retroactive Period”), the limitation on each
Borrower’s obligations to pay such additional amounts hereunder shall not apply to the additional amounts payable in respect of such period. 
  
 1.12 Compensation.    Each Borrower shall compensate each Lender, upon its written request (which request shall set forth the basis for requesting such compensation), for all
reasonable losses, expenses and liabilities (including, without limitation, any loss, expense or liability incurred by reason of the liquidation or reemployment of deposits or other funds required by such Lender to fund any Eurodollar Loans or
Competitive Bid Loans made, or to be made, by it to such Borrower but excluding in any event the loss of anticipated profits) which such Lender may actually sustain: (i) if for any reason (other than a default by such Lender or the Administrative
Agent) a Borrowing of Eurodollar Loans or Competitive Bid Loans does not occur on a date specified therefor in a Notice of Borrowing, a Notice of Competitive Bid Borrowing or a Notice of Conversion, given by such Borrower (whether or not withdrawn
by such Borrower or deemed withdrawn pursuant to Section 1.11(a)); (ii) if any prepayment, repayment or conversion of any such Eurodollar Loans or Competitive Bid Loans occurs on a date which is not the last day of an Interest Period applicable
thereto; (iii) if any prepayment of any such Eurodollar Loans or Competitive Bid Loans is not made on any date specified in a 
 

 - 11 - 

 notice of prepayment given by such Borrower; (iv) if such Lender is required pursuant to Section 1.14 to assign any such Eurodollar Loans or
Competitive Bid Loans as of a date which is not the last day of an Interest Period applicable thereto; or (v) as a consequence of (x) any other default by such Borrower to repay its Eurodollar Loans or Competitive Bid Loans when required by the
terms of this Agreement or (y) an election made pursuant to Section 1.11(b). 
  
 1.13 Change of Lending
Office.    Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 1.11(a)(ii), (iii) or (iv) 1.11(c), 1.11(d), 2.04 or 4.04 with respect to such Lender, it will, if requested by the
applicable Borrower, use commercially reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans or Commitments affected by such event, provided that such designation is made
on such terms that such Lender and its lending office suffer no economic, legal or regulatory disadvantage, with the object of avoiding or materially mitigating the consequence of the event giving rise to the operation of any such Section. Nothing
in this Section 1.13 shall affect or postpone any of the obligations of each Borrower or the right of any Lender provided in Section 1.11 or 4.04. 
  
 1.14 Replacement of Lenders.    (a) Upon the occurrence of any event giving rise to the operation of Section 1.11(a)(ii) or (iii), Section 1.11(c), Section 1.11(d), Section
2.04 or Section 4.04 with respect to any Lender which results in such Lender charging to each Borrower increased costs in excess of those being generally charged by the other Lenders, (b) if a Lender becomes a Defaulting Lender, (c) if a Lender
becomes a Non-Continuing Lender, and/or (d) in the case of a refusal by a Lender to consent to a proposed change, waiver, discharge or termination with respect to this Agreement which has been approved by the Required Lenders, the Company shall have
the right, if no Default or Event of Default then exists, to replace such Lender (the “Replaced Lender”), upon prior written notice to the Administrative Agent and such Replaced Lender, with one or more Person or Persons, none of whom
shall be a Defaulting Lender at the time of such replacement (collectively, the “Replacement Lender”) reasonably acceptable to the Administrative Agent, provided that (i) at the time of any replacement pursuant to this Section 1.14,
the Replacement Lender and the Replaced Lender shall enter into one or more Assignment Agreements pursuant to Section 12.04(b) (and with all fees payable pursuant to said Section 12.04(b) to be paid by the Replacement Lender) pursuant to which the
Replacement Lender shall acquire all of the Commitments and outstanding Loans of the Replaced Lender and, in connection therewith, shall pay to the Replaced Lender in respect thereof an amount equal to the sum of (A) an amount equal to the principal
amount of, and all accrued but unpaid interest on, all outstanding Loans of the Replaced Lender, (B) an amount equal to all Unpaid Drawings that have been funded by (and not reimbursed to) such Replaced Lender, together with all then unpaid interest
with respect thereto at such time and (C) an amount equal to all accrued, but theretofore unpaid, Fees owing to the Replaced Lender pursuant to Section 3.01; (ii) all obligations of the Borrowers under the Credit Documents owing to the Replaced
Lender (other than those specifically described in clause (i) above in respect of which the assignment purchase price has been, or is concurrently being, paid), including without limitation all amounts owing to the Replaced Lender under Section 1.12
as a result of the assignment of its Loans under clause (i) above, shall be paid in full to such Replaced Lender concurrently with such replacement; and (iii) no assignment pursuant to this Section 1.14 shall be effective until all of the then
outstanding Letters of Credit are returned by each respective beneficiary to the Issuing Agent for cancellation in exchange for new or amended Letters of 
 

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 Credit which give effect to such assignment (it being understood that to the extent the respective beneficiaries do not consent to such
assignment, such assignment cannot occur). Upon the execution of the respective Assignment Agreements, the payment of amounts referred to in clauses (i) and (ii) above and the return, cancellation and exchange of each then outstanding Letter of
Credit as provided above and, if so requested by the Replacement Lender, delivery to the Replacement Lender of the appropriate Note or Notes executed by the relevant Borrowers, the Replacement Lender shall become a Lender hereunder and the Replaced
Lender shall cease to constitute a Lender hereunder, except with respect to indemnification provisions applicable to the Replaced Lender under this Agreement, which shall survive as to such Replaced Lender. 
  
 1.15 Designated Subsidiary Borrowers.    The Company may from time to time designate one or more Persons as an
additional Designated Subsidiary Borrower, subject to the following terms and conditions: 
  
 (a)
each such Person shall be a 90%-Owned Subsidiary of the Company; 
  
 (b) each such Person shall be a
Material Subsidiary; 
  
 (c) each such Designated Subsidiary Borrower shall enter into an
appropriately completed DSB Assumption Agreement in the form of Exhibit G hereto on or prior to the date of designation hereof. 
  
 (d) on or prior to the date of designation, such 90%-Owned Subsidiary shall execute and deliver to each Lender a Revolving/Term Note and a Competitive Bid Note to evidence the Loans to be incurred by
such Person; 
  
 (e) on or prior to the date of designation, the Administrative Agent shall have
received from such Person a certificate, signed by an Authorized Officer of such Person in the form of Exhibit E with appropriate insertions or deletions, together with (x) copies of its certificate of incorporation, by laws or other organizational
documents and (y) the resolutions relating to the Credit Documents which shall be satisfactory to the Administrative Agent; and 
  
 (f) on or prior to the date of designation, the Administrative Agent shall have received an opinion, addressed to the Administrative Agent and each of the Lenders and dated the date of designation,
from counsel to such Person which opinion shall be substantially in the form of Exhibit H hereto. 
  
 1.16
Extension of Commitment Expiration Date.    (a) The Company may, by notice to the Administrative Agent (which shall promptly notify the Lenders) not more than 45 days and not less than 30 days prior to the Commitment
Expiration Date then in effect (the “Existing Commitment Expiration Date”), request that each Lender agree to an extension of the Commitment Expiration Date for an additional 364 days from the Existing Commitment Expiration Date. Such
request shall be accompanied by a certificate of an Authorized Officer of the Company stating that no Default or Event of Default has occurred and is continuing. 
  
 (b) Each Lender, acting in its sole and individual discretion, shall, by notice to the Administrative Agent given not more than 30 days prior to the Existing Commitment Expiration Date but in any event
no later than the date (the “Notice Date”) 20 days prior to the 
 

 - 13 - 

 Existing Commitment Expiration Date, elect to either extend the Commitment Expiration Date as provided in Section 1.16(a) or decline to agree to
such extension (any Lender declining to agree to any such extension, a “Non-Continuing Lender”). Any Lender that does not so advise the Administrative Agent on or before the Notice Date shall be deemed to be a Non-Continuing Lender. The
election of any Lender to agree to any such extension shall not obligate any other Lender to so agree. 
  
 (c) The
Administrative Agent shall notify the Company in writing of each Lender’s determination under this Section 1.16 no later than the date 15 days prior to the Existing Commitment Expiration Date (or, if such date is not a Business Day, on the next
preceding Business Day). 
  
 (d) The Company shall have the right on or before the Existing Commitment Expiration
Date to replace each Non-Continuing Lender with, and add as “Lenders” under this Agreement in place thereof, one or more Replacement Lenders in accordance with Section 1.14, provided that prior to replacing any Non-Continuing Lender
with any Replacement Lender, the Company shall have given each Lender which has agreed to extend its Commitment Expiration Date an opportunity to increase its Commitment by all or a portion of the Non-Continuing Lenders’ Commitments (any such
increases by such Lenders to be allocated as nearly as practicable on a pro rata basis among such Lenders based upon their Commitments as in effect immediately prior to the Existing Commitment Expiration Date). 
  
 (e) If (and only if) the total of the Commitments of the Lenders that have agreed so to extend the Commitment Expiration Date (including
the additional Commitment of any Lender) and the additional Commitments of the Replacement Lenders shall be 100% of the aggregate amount of the Commitments in effect immediately prior to the Existing Commitment Expiration Date, then, effective as of
the Existing Commitment Expiration Date, the Commitment Expiration Date shall be extended to the date falling 364 days after the Existing Commitment Expiration Date (except that, if such date is not a Business Day, such Commitment Termination Date
as so extended shall be the next preceding Business Day) and each Replacement Lender shall thereupon become a “Lender” for all purposes of this agreement. 
  
 (f) Notwithstanding the foregoing, each extension of the Commitment Expiration Date pursuant to this Section 1.16 shall be effective only if the Company shall have paid in
full all amounts owing to each Non-Continuing Lender hereunder and such Non-Continuing Lender shall have been released of its obligations in respect of Letters of Credit issued hereunder, in each case, on or before the Existing Commitment Expiration
Date. 
  
 
SECTION 2. Letters of Credit. 
  
 2.01 Letters of
Credit.    (a) Subject to and upon the terms and conditions set forth herein, each Borrower may request the Issuing Agent at any time and from time to time on or after the Effective Date and prior to the Commitment Expiration
Date to issue, for the account of such Borrower and in support of, on a standby basis, Letter of Credit Supportable Obligations of such Borrower to any other Person and subject to and upon the terms and conditions herein set forth the Issuing Agent
agrees to issue at any time and from time to time on or after the Effective Date and prior to the Commitment Expiration Date one or more irrevocable standby letters of 
 

 - 14 - 

 credit in such form as may be approved by the Issuing Agent (each such letter of credit, a “Letter of Credit” and, collectively, the
“Letters of Credit”). Notwithstanding the foregoing, the Issuing Agent shall be under no obligation to issue any Letter of Credit if at the time of such issuance: 
  
 (i) any order, judgment or decree of any Governmental Authority or arbitrator shall purport by its terms to enjoin or restrain the Issuing Agent from
issuing such Letter of Credit or any requirement of law applicable to such Issuing Agent or any Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Agent or
any Lender shall prohibit, or request that the Issuing Agent or any Lenders refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Agent or any Lender with respect to such
Letter of Credit any restriction or reserve or capital requirement (for which such Letter of Credit Issuer is not otherwise compensated) not in effect on the Effective Date, or any unreimbursed loss, cost or expense which was not applicable, in
effect or known to such Letter of Credit Issuer as of the Effective Date; 
  
 (ii) the conditions
precedent set forth in Section 5.02 are not satisfied at that time; or 
  
 (iii) the Issuing Agent
shall have received notice from any Borrower or the Required Lenders prior to the issuance of such Letter of Credit of the type described in clause (iv) of Section 2.01(b). 
  
 (b) Notwithstanding the foregoing, (i) no Letter of Credit shall be issued the Stated Amount of which, when added to (x) the Letter of Credit Outstandings (exclusive of
Unpaid Drawings which are repaid on the date of, and prior to the issuance of, the respective Letter of Credit) at such time, and (y) the aggregate Principal Amount of all Loans then outstanding, would exceed the Total Commitment at such time; (ii)
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 Issuing Agent notifies the beneficiary thereof, in accordance with the terms of such Letter of Credit, that such Letter of Credit will not be renewed; (iii) each Letter of Credit may be denominated in any Approved Currency as
determined by each such Borrower at the time of issuance; and (iv) the Issuing Agent will not issue any Letter of Credit after it has received written notice from any Borrower or the Required Lenders stating that a Default or an Event of Default
exists until such time as the Issuing Agent shall have received a written notice of (x) rescission of such notice from the party or parties originally delivering the same or (y) a waiver of such Default or Event of Default by the Required Lenders.

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

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 (d) Subject to and on the terms and conditions set forth herein, the Issuing Agent is hereby authorized by each Borrower
and the Lenders to arrange for the issuance of any Letter of Credit pursuant to Section 2.01(a) and the amendment of any Letter of Credit pursuant to Section 2.06 and/or 12.04(b) by: 
  
 (i) completing the commencement date and the expiry date of such Letter of Credit; 
  
 (ii) (in the case of an amendment increasing or reducing the amount thereof) amending such Letter of Credit in such manner as the Issuing Agent and the
respective beneficiary may agree; 
  
 (iii) completing such Letter of Credit with the participation
of each Lender as allocated pursuant to the terms hereof; and 
  
 (iv) executing such Letter of
Credit on behalf of each Lender and following such execution delivering such Letter of Credit to the beneficiary of such Letter of Credit. 
  
 (e) Each Letter of Credit shall be executed and delivered by the Issuing Agent in the name and on behalf of, and as attorney-in-fact for, each Lender party to such Letter of Credit, and the Issuing Agent shall act under each
Letter of Credit, and each Letter of Credit shall expressly provide that the Issuing Agent shall act, as the agent of each Lender to (a) receive drafts, other demands for payment and other documents presented by the beneficiary under such Letter of
Credit, (b) determine whether such drafts, demands and documents are in compliance with the terms and conditions of such Letter of Credit and (c) notify such Lender and such Borrower that a valid drawing has been made and the date that the related
Unpaid Drawing is to be made; provided that the Issuing Agent shall have no obligation or liability for any Unpaid Drawing under such Letter of Credit, and each Letter of Credit shall expressly so provide. Each Lender hereby irrevocably
appoints and designates the Issuing Agent as its attorney-in-fact, acting through any duly authorized officer of JPMorgan Chase Bank, to execute and deliver in the name and on behalf of such Lender each Letter of Credit to be issued by such Lender
hereunder. Promptly upon the request of the Issuing Agent, each Lender will furnish to the Issuing Agent such powers of attorney or other evidence as any beneficiary of any Letter of Credit may reasonably request in order to demonstrate that the
Issuing Agent has the power to act as attorney-in-fact for such Lender to execute and deliver such Letter of Credit. 
  
 2.02 Letter of Credit Requests.    (a) Whenever a Borrower desires that a Letter of Credit be issued, such Borrower shall give the Administrative Agent and the Issuing Agent written notice (including by way
of facsimile transmission, immediately confirmed in writing by submission of the original of such request by mail to the Issuing Agent) thereof prior to 12:00 Noon (New York time) at least five Business Days (or such shorter period as may be
acceptable to the Issuing Agent) prior to the proposed date of issuance (which shall be a Business Day), which written notice shall be in the form of Exhibit I (each, a “Letter of Credit Request”). Each Letter of Credit Request shall
include any other documents as the Issuing Agent customarily requires in connection therewith. 
  
 

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 (b) The making of each Letter of Credit Request shall be deemed to be a representation and warranty by the Borrower that
such Letter of Credit may be issued in accordance with, and it will not violate the requirements of, Section 2.01(a). 
  
 (c) Upon its issuance of or amendment to any Letter of Credit, the Issuing Agent shall promptly notify the respective Borrower and the Lenders of such issuance or amendment, which notice shall include a summary description of the
Letter of Credit actually issued and any amendments thereto. 
  
 2.03 Agreement to Repay Letter of Credit
Drawings.    (a) Each Borrower agrees to reimburse each Lender, by making payment to the Administrative Agent in immediately available funds at the Payment Office, for any payment or disbursement made by such Lender under any
Letter of Credit (each such amount so paid or disbursed until reimbursed, an “Unpaid Drawing”) no later than three Business Days following the date of such payment or disbursement, with interest on the amount so paid or disbursed by such
Lender, to the extent not reimbursed prior to 1:00 P.M. (New York time) on the date of such payment or disbursement, from and including the date paid or disbursed to but not including the date such Lender is reimbursed therefor at a rate per annum
which shall be the Base Rate plus the Applicable Margin for Base Rate Loans as in effect from time to time (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 Issuing Agent of such payment or disbursement). 
  
 (b) Each Borrower’s
obligation under this Section 2.03 to reimburse each Lender with respect to Unpaid Drawings (including, in each case, interest thereon) shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim
or defense to payment which such Borrower may have or have had against such Lender, or the Issuing Agent, including, without limitation, any defense based upon the failure of any drawing under a Letter of Credit to conform to the terms of the Letter
of Credit or any non-application or misapplication by the beneficiary of the proceeds of such drawing; provided, however, that no Borrower shall be obligated to reimburse any Lender for any wrongful payment made by such Lender under a
Letter of Credit as a result of acts or omissions constituting willful misconduct or gross negligence on the part of such Lender (as determined by a court of competent jurisdiction in a final and non-appealable decision). 
  
 2.04 Increased Costs.    If after the Effective Date, the adoption or effectiveness of any applicable law, rule
or regulation, order, guideline or request or any change therein after the Effective Date, or any change adopted or effective after the Effective Date in the interpretation or administration thereof by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof, or compliance by any Lender with any request or directive (whether or not having the force of law) by any such authority, central bank or comparable agency shall either (i)
impose, modify or make applicable any reserve, deposit, capital adequacy or similar requirement against letters of credit issued by or participated in by such Lender, or (ii) impose on such Lender any other conditions directly or indirectly
affecting this Agreement or any Letter of Credit; and the result of any of the foregoing is to increase the cost to such Lender of issuing, maintaining or participating in any Letter of Credit, or to reduce the amount of any sum received or
receivable by such Lender hereunder or reduce the rate of return on its capital with respect to Letters of Credit, then, upon written demand to the applicable 
 

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 Borrower by such Lender (with a copy to the Administrative Agent), pay to such Lender such additional amount or amounts as will compensate such
Lender for such increased cost or reduction. The preceding sentence shall not apply to increased costs with respect to taxes imposed on or measured by the net income or net profits of a Lender pursuant to the laws of the jurisdiction in which it is
organized or the jurisdiction in which the principal office or applicable lending office of such Lender is located or any subdivision thereof or therein or with respect to Taxes to the extent that a Lender received additional amounts (or otherwise
was indemnified) for such Taxes pursuant to Section 4.04 (or would have received additional amounts pursuant to Section 4.04(a) but for a failure to comply with Section 4.04(b) or Section 4.04(c)). A certificate submitted to the applicable Borrower
by such Lender (with a copy to the Administrative Agent), setting forth the basis for the determination of such additional amount or amounts necessary to compensate such Lender as aforesaid shall be final and conclusive and binding on the applicable
Borrower absent manifest error, although the failure to deliver any such certificate shall not release or diminish the Borrower’s obligations to pay additional amounts pursuant to this Section 2.04 upon subsequent receipt of such certificate.
The Borrowers shall not be obligated to pay any additional amounts arising pursuant to this Section 2.04 that are attributable to the Excluded Period with respect to such additional amount; provided, that if an applicable law, rule, regulation,
guideline or request shall be adopted or made on any date and shall be applicable to the period prior to the date on which such law, rule, regulation, guideline or request is adopted or made, the limitation on each Borrower’s obligations to pay
such additional amounts hereunder shall not apply to the additional amounts payable in respect of such period. 
  
 2.05 Letter of Credit Expiration Extensions.    Each Lender 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 at least 30 days prior to the expiration date of such Letter of Credit, notice is given by the Issuing Agent 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 Issuing Agent will give Notices of Non-Extension as to any or all outstanding Letters of
Credit if requested to do so by the Required Lenders pursuant to Section 9.01. The Issuing Agent will give Notices of Non-Extension as to all outstanding Letters of Credit if the Commitment Expiration Date has occurred. The Issuing Agent will send a
copy of each Notice of Non-Extension to the Company concurrently with delivery thereof to the respective beneficiary, unless prohibited by law from doing so. 
  
 2.06 Changes to Stated Amount.    At any time when any Letter of Credit is outstanding, at the request of the respective Borrower, the Issuing Agent will enter into an
amendment increasing or reducing the Stated Amount of such Letter of Credit, provided that (i) in no event shall the Stated Amount of such Letter of Credit be increased to an amount which, when added to the Letter of Credit Outstanding at
such time and the aggregate Principal Amount of all Loans then outstanding, would exceed the Total Commitment, (ii) the Stated Amount of a Letter of Credit may not be increased at any time if the conditions precedent set forth in Section 5.02 are
not satisfied at such time, and (iii) the Stated Amount of a Letter of Credit may not be increased at any time after the Commitment Expiration Date. 
  
 2.07 Representations and Warranties of Lenders.    Each Lender represents and warrants that each Letter of Credit constitutes a legal, valid and binding obligation of such

 

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 Lender enforceable in accordance with its terms, provided that the enforceability thereof is subject to general principles of equity and
to bankruptcy, insolvency and similar laws affecting the enforcement of creditors’ rights generally. 
  
 
SECTION 3.    Fees; Commitments. 
  
 3.01
Fees.    (a) The Company agrees to pay to the Administrative Agent a facility fee (the “Facility Fee”) for the account of the Lenders pro rata on the basis of their respective Commitments for the
period from and including the Effective Date to but not including the Commitment Expiration Date computed at a rate per annum equal to 0.07% of the Total Commitment, regardless of utilization, as in effect from time to time. Accrued Facility Fees
shall be due and payable quarterly in arrears on the last Business Day of each of calendar quarter, on the Commitment Expiration Date or upon such earlier date as the Total Commitment shall be terminated and, with respect to any Facility Fee owing
to any Lender whose Commitment is terminated pursuant to Section 1.14, on the date on which such Lender’s Commitment is terminated. 
  
 (b) The Company agrees to pay to the Administrative Agent a utilization fee (the “Utilization Fee”) for the account of the Lenders pro rata on the basis of, (i) prior to the Commitment Expiration
Date, their respective Commitments and (ii) on or after the Commitment Expiration Date, their respective Term Loans, for the period from and including the Effective Date to but not including the Final Maturity Date computed at a rate per annum equal
to 0.125% of the aggregate amount of Revolving Loans outstanding or Term Loans outstanding, as the case may be, at any time when the aggregate outstanding amount of Revolving Loans or Term Loans, as the case may be, is greater than $100,000,000.
Accrued Utilization Fees shall be due and payable quarterly in arrears on the last Business Day of each of calendar quarter and on the Final Maturity Date and, with respect to any Utilization Fee owing to any Lender whose Commitment is terminated
pursuant to Section 1.14, on the date on which such Lender’s Commitment is terminated. 
  
 (c) Each Borrower
shall pay to the Administrative Agent for pro rata distribution to each Lender (based on their respective Percentages), a fee in respect of each Letter of Credit issued for the account of such Borrower (the “Letter of Credit
Fee”) computed at a rate per annum equal to the Applicable L/C Margin then in effect on the daily Stated Amount of such Letter of Credit. Accrued Letter of Credit Fees shall be due and payable quarterly in arrears on each the last Business Day
of each calendar quarter and upon the first day on or after the termination of the Total Commitment upon which no Letters of Credit remain outstanding. 
  
 (d) Each Borrower shall pay directly to the Issuing Agent upon each issuance of and/or amendment of, a Letter of Credit issued for the account of such Borrower such amount as shall at the time of such
issuance or amendment be the administrative charge which the Issuing Agent is customarily charging for issuances of or amendments of letters of credit issued by it (it being understood and agreed that, for purposes of this Agreement, such charges
shall not increase more than once every six months). 
 

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 (e) The Borrowers jointly and severally agree to pay to the Administrative Agent, for the account of the Administrative
Agent, when and as due, such fees as have been, or are from time to time, separately agreed upon. 
  
 (f) All
computations of Fees shall be made in accordance with Section 12.07(b). 
  
 3.02 Voluntary Reduction of
Commitments.    Upon at least three Business Days’ prior written notice (or telephonic notice confirmed in writing) to the Administrative Agent at the Notice Office (which notice shall be deemed to be given on a certain
day only if given before 12:00 Noon (New York time) on such day and shall be promptly transmitted by the Administrative Agent to each of the Lenders), the Company shall have the right, without premium or penalty, to terminate or partially reduce the
Total Unutilized Commitment, provided that (x) any such termination shall apply to proportionately and permanently reduce the Commitment of each Lender and (y) any partial reduction pursuant to this Section 3.02 shall be in the amount of at
least $10,000,000. 
  
 3.03 Mandatory Reduction of Commitments.    (a) The Total
Commitment shall terminate in its entirety on June 30, 2002, unless the Effective Date has occurred on or before such date. 
  
 (b) The Total Commitment shall terminate in its entirety on the Commitment Expiration Date. 
  
 
SECTION 4. Payments. 
  
 4.01 Voluntary Prepayments.    Each
Borrower shall have the right to prepay Revolving Loans or Term Loans made to it in whole or in part, without premium or penalty, from time to time on the following terms and conditions: (i) such Borrower shall give the Administrative Agent at the
Payment Office written notice (or telephonic notice promptly confirmed in writing) of its intent to prepay the Loans, whether such Loans are Term Loans or Revolving Loans, the amount of such prepayment, the currency in which such Loans are
denominated and the specific Borrowing(s) pursuant to which such Loans were made, which notice shall be given by such Borrower (x) prior to 12:00 Noon (New York time) at least one Business Day prior to the date of such prepayment in the case of Base
Rate Loans and (y) at least three Business Days prior to the date of such prepayment in the case of Eurodollar Loans, and which notice shall promptly be transmitted by the Administrative Agent to each of the Lenders; (ii) each partial prepayment
shall be in an aggregate principal amount of at least $1,000,000, or the Dollar Equivalent thereof, provided that no partial prepayment of any Loans shall reduce the aggregate principal amount of the Loans outstanding to an amount less than the
Minimum Borrowing Amount applicable thereto; (iii) each prepayment in respect of any Loans made pursuant to a Borrowing shall be applied pro rata among such Revolving Loans; and (iv) prepayments of Eurodollar Loans made pursuant to
this Section 4.01 may only be made on the last day of an Interest Period applicable thereto unless concurrently with such prepayment any payments required to be made pursuant to Section 1.12 as a result of such prepayment are made. No Borrower shall
have the right under this Section 4.01 to prepay any principal amount of any Competitive Bid Loans. 
  
 

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 4.02 Mandatory Prepayments.    (a) If on any date prior to the Commitment Expiration Date
(including, without limitation, any date on which Dollar Equivalents are determined pursuant to Section 12.07(b)), the sum of the aggregate outstanding Principal Amount of Loans (all the foregoing, collectively, the “Aggregate Loan
Outstandings”) plus the Letter of Credit Outstandings exceeds 105% of the Total Commitment as then in effect, the Company shall cause one or more Borrowers to repay on such day the principal amount of the outstanding Revolving Loans in an
aggregate Principal Amount equal to the amount by which the Aggregate Loan Outstanding plus the Letter of Credit Outstandings exceed the Total Commitment as then in effect. If, after giving effect to the prepayment of all outstanding Revolving
Loans, as set forth above, the sum of the remaining Aggregate Loan Outstandings plus the Letter of Credit Outstandings exceed the Total Commitment, the Company shall cause one or more Borrowers to pay to the Administrative Agent at the Payment
Office on such date an amount of cash and/or Cash Equivalents equal to the amount of such excess (up to a maximum amount equal to the sum of the outstanding Competitive Bid Loans plus the Letter of Credit Outstandings at such time), such cash and/or
Cash Equivalents to be held as security for all obligations of the Borrowers to the Lenders hereunder in a cash collateral account to be established by the Administrative Agent on terms reasonably satisfactory to the Administrative Agent.

  
 (b) If on any date prior to the Commitment Expiration Date (including, without limitation, any date on which
Dollar Equivalents are determined pursuant to Section 12.07(b)), the Aggregate Loan Outstandings exceed $210,000,000, then the Company shall cause one or more Borrowers to repay Loans incurred by them in an aggregate amount equal to the amount by
which the Aggregate Loan Outstandings exceed $200,000,000. 
  
 (c) If on any date after the Commitment Expiration
Date (including, without limitation, any date on which Dollar Equivalents are determined pursuant to Section 12.07(b)), the Letter of Credit Outstandings exceed 105% of the L/C CED Amount, the Company shall cause one or more Borrowers to pay to the
Administrative Agent at the Payment Office on such date an amount of cash and/or Cash Equivalents equal to the amount by which the Letter of Credit Outstandings exceed the L/C CED Amount, such cash and/or Cash Equivalents to be held as security for
all obligations of the Borrowers to the Lenders hereunder in a cash collateral account to be established by the Administrative Agent on terms reasonably satisfactory to the Administrative Agent. 
  

(d) If on any date after the Commitment Expiration Date (including, without limitation, any date on which Dollar Equivalents are determined pursuant to Section
12.07(b)), the Aggregate Loan Outstandings exceed 105% of the Initial Term Loan Amount, then the Company shall cause one or more Borrowers to repay Term Loans incurred by them in an aggregate amount equal to the amount by which the Aggregate Loan
Outstandings exceed the Initial Term Loan Amount. 
  
 (e) On the maturity date specified pursuant to Section 1.04(a)
with respect to each Competitive Bid Loan, the applicable Borrower shall repay such Competitive Bid Loan to the applicable Bidder Lender or Bidder Lenders. Notwithstanding anything to the contrary contained herein, all Competitive Bid Loans shall be
repaid in full on the Commitment Expiration Date unless paid in full prior to such date. 
 

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 (f) Notwithstanding anything to the contrary contained elsewhere in this Agreement, all outstanding Term Loans shall be
repaid in full on the Final Maturity Date. 
  
 (g) With respect to each prepayment of Loans required by Section
4.02(a), (b), (c), (d) or (e), the applicable Borrower may designate the Types of Loans which are to be prepaid and the specific Borrowing(s) pursuant to which made, provided that (i) if any prepayment of Eurodollar Loans denominated of
Dollars made pursuant to a single Borrowing shall reduce the outstanding Loans made pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount for such Borrowing, then all Loans outstanding pursuant to such Borrowing shall be
immediately converted into Base Rate Loans and (ii) each prepayment of any Loans made pursuant to a Borrowing shall be applied pro rata among such Loans. In the absence of a designation by a Borrower as described in the preceding
sentence, the Administrative Agent shall, subject to the above, make such designation in its sole discretion with a view, but no obligation, to minimize breakage costs owing under Section 1.12. 
  

4.03 Method and Place of Payment.    Except as otherwise specifically provided herein, all payments under this Agreement shall be made to
the Administrative Agent for the ratable (based on its pro rata share) account of the Lenders entitled thereto, not later than 12:00 Noon (New York time) on the date when due and shall be made in immediately available funds at the
Payment Office in (x) Dollars, if such payment is made in respect of any obligation of the Borrowers under this Agreement except as otherwise provided in the immediately succeeding clause (y); and (y) the appropriate Alternate Currency, if such
payment is made in respect of principal of or interest on Alternate Currency Loans, it being understood that written notice by a Borrower to the Administrative Agent to make a payment from the funds in such Borrower’s account at the Payment
Office shall constitute the making of such payment to the extent of such funds held in such account. Any payments under this Agreement which are made later than 12:00 Noon (New York time) shall be deemed to have been made on the next succeeding
Business Day. Whenever any payment to be made hereunder shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest
shall be payable during such extension at the applicable rate in effect immediately prior to such extension. The Administrative Agent will promptly make available to each Lender its pro rata share (if any) of each payment so received by the
Administrative Agent in the funds and currency so received. 
  
 4.04 Net Payments.    (a)
All payments made by each Borrower hereunder or under any Note will be made without setoff, counterclaim or other defense. Except as provided in Section 4.04(b), all such payments will be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein with respect to such
payments (but excluding, except as provided in the second succeeding sentence, any tax imposed on or measured by the net income or net profits of a Lender pursuant to the laws of the jurisdiction in which it is organized or the jurisdiction in which
the principal office or applicable lending office of such Lender is located or any subdivision thereof or therein) and all interest, penalties or similar liabilities with respect to such non-excluded taxes, levies, imposts, duties, fees, assessments
or other charges (all such non-excluded taxes, levies, imposts, duties, fees, assessments or other charges being referred to collectively as “Taxes”). If any Taxes are so levied or imposed, the
 
 

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relevant Borrower agrees to pay the full amount of such Taxes, and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement or under any Note,
after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein or in such Note. If any amounts are payable in respect of Taxes pursuant to the preceding sentence, the relevant Borrower agrees to
reimburse each Lender lending to such Borrower, upon the written request of such Lender, for taxes imposed on or measured by the net income or net profits of such Lender pursuant to the laws of the jurisdiction in which such Lender is organized or
in which the principal office or applicable lending office of such Lender is located or under the laws of any political subdivision or taxing authority of any such jurisdiction in which such Lender is organized or in which the principal office or
applicable lending office of such Lender is located and for any withholding of taxes as such Lender shall determine are payable by, or withheld from, such Lender, in respect of such amounts so paid to or on behalf of such Lender pursuant to the
preceding sentence and in respect of any amounts paid to or on behalf of such Lender pursuant to this sentence. Each Borrower will furnish to the Administrative Agent within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts (or if it has been established to the satisfaction of the applicable taxing authority that it is impossible to furnish such receipts, such other evidence reasonably satisfactory to the Administrative
Agent) evidencing such payment by the Borrower. Each Borrower agrees to indemnify and hold harmless each Lender, and reimburse such Lender upon its written request, for the amount of any Taxes so levied or imposed and paid by such Lender.

  
 (b) Each Lender that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code)
for U.S. Federal income tax purposes agrees to deliver to each Borrower organized under the laws of the United States (“U.S. Borrower”) and the Administrative Agent on or prior to the Effective Date, or in the case of a Lender that is an
assignee or transferee of an interest under this Agreement pursuant to Section 1.14 or 12.04 (unless the respective Lender was already a Lender hereunder immediately prior to such assignment or transfer), on the date of such assignment or transfer
to such Lender, (i) two accurate and complete original signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under an income tax treaty) (or successor forms) certifying to such Lender’s
entitlement as of such date to a complete exemption from United States withholding tax with respect to payments to be made under this Agreement and under any Note, or (ii) if the Lender is not a “bank” within the meaning of Section
881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under an income tax treaty) pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit C (any such certificate, a “Section 4.04(b)(ii) Certificate”) and (y) two accurate and complete original signed copies of Internal Revenue Service Form W-8BEN (with respect to the portfolio interest exemption)(or successor form)
certifying to such Lender’s entitlement to a complete exemption from United States withholding tax with respect to payments of interest to be made under this Agreement and under any Note. In addition, each Lender agrees that from time to time
after the Effective Date, when a lapse in time or change in circumstances renders the previous certification obsolete or inaccurate in any material respect, it will deliver to the U.S. Borrower and the Administrative Agent two new accurate and
complete original signed copies of Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect to the benefits of any income tax treaty), or Form W-8BEN (with respect to the portfolio interest exemption) and a Section 4.04(b)(ii) Certificate, as
the case may be, and such other forms as may 
 

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 be required in order to confirm or establish the entitlement of such Lender to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and any Note, or it shall immediately notify the U.S. Borrower and the Administrative Agent of its inability to deliver any such Form or Certificate, in which case such Lender shall not
be required to deliver any such Form or Certificate pursuant to this Section 4.04(b). Notwithstanding anything to the contrary contained in Section 4.04(a), but subject to Section 12.04(b) and the immediately succeeding sentence, (x) each U.S.
Borrower shall be entitled, to the extent it is required to do so by law, to deduct or withhold income or similar taxes imposed by the United States (or any political subdivision or taxing authority thereof or therein) from interest, Fees or other
amounts payable hereunder for the account of any Lender which is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent that such Lender has not provided to the U.S.
Borrower U.S. Internal Revenue Service Forms that establish a complete exemption from such deduction or withholding and (y) the U.S. Borrower shall not be obligated pursuant to Section 4.04(a) hereof to gross-up payments to be made to a Lender in
respect of income or similar taxes imposed by the United States if (I) such Lender has not provided to the U.S. Borrower the Internal Revenue Service Forms required to be provided to the U.S. Borrower pursuant to this Section 4.04(b) or (II) in the
case of a payment, other than interest, to a Lender described in clause (ii) above, to the extent that such Forms do not establish a complete exemption from withholding of such taxes. Notwithstanding anything to the contrary contained in the
preceding sentence or elsewhere in this Section 4.04 and except as set forth in Section 12.04(b), each Borrower agrees to pay any additional amounts and to indemnify each Lender in the manner set forth in Section 4.04(a) (without regard to the
identity of the jurisdiction requiring the deduction or withholding) in respect of any Taxes deducted or withheld by it as described in the immediately preceding sentence as a result of any changes that are effective after the Effective Date in any
applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, relating to the deducting or withholding of such Taxes. 
  
 (c) Each Lender agrees to use reasonable efforts (consistent with legal and regulatory restrictions and subject to overall policy considerations of such Lender) to file any
certificate or document or to furnish to a Borrower that is not a U.S. Borrower any information as reasonably requested by such Borrower that may be necessary to establish any available exemption from, or reduction in the amount of, any Taxes;
provided, however, that nothing in this Section 4.04(c) shall require a Lender to disclose any confidential information (including, without limitation, its tax returns or its Tax calculations). A Borrower that is not a U.S. Borrower
shall not be obligated pursuant to Section 4.04(a) hereof to gross-up payments to be made to a Lender in respect of income or similar taxes imposed if such Lender has not used reasonable efforts to provide a certificate, document or information to
the extent required pursuant to this Section 4.04(c). 
  
 (d) If the Borrower pays any additional amount under this
Section 4.04 and such Lender determines in its sole discretion that it has actually received in connection therewith any refund of its Tax liabilities in or with respect to the taxable year in which the additional amount is paid (a “Tax
Refund”), such Lender shall pay to the Borrower an amount that the Lender shall, in its sole discretion, determine is equal to the net benefit, after tax, which was obtained by the Lender in such year as a consequence of such Tax Refund;
provided, however, that (i) any Lender may determine, in its sole discretion consistent with the policies of such Lender, whether 
 

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 to seek a Tax Refund; (ii) any Taxes that are imposed on a Lender as a result of a disallowance or reduction (including through the expiration
of any tax credit carryover or carryback of such Lender that otherwise would not have expired) of any Tax Refund with respect to which such Lender has made a payment to the Borrower pursuant to this Section 4.04(d) shall be treated as a Tax for
which the Borrower is obligated to indemnify such Lender pursuant to this Section 4.04 without any exclusions or defenses; (iii) nothing in this Section 4.04(d) shall require the Lender to disclose any confidential information to the Borrower
(including, without limitation, its tax returns); and (iv) no Lender shall be required to pay any amounts pursuant to this Section 4.04(d) at any time during which a Default or Event of Default exists. 
  

	
SECTION
	 
	5. Conditions Precedent. 
 

  
 5.01 Conditions Precedent to Effective Date.    This Agreement shall become effective on the date (the “Effective Date”) on which each of the following conditions
shall be satisfied: 
  
 (a) Execution of Agreement; Notes. (i) Each of the Company, the initial Designated
Subsidiary Borrowers, the Administrative Agent and each of the Lenders shall have signed a copy hereof (whether the same or different copies) and shall have delivered the same to the Administrative Agent at its Notice Office or, in the case of the
Lenders and the Agents, shall have given to the Administrative Agent telephonic (confirmed in writing), written or facsimile transmission notice (actually received) at such office that the same has been signed and mailed to it; and (ii) there shall
have been delivered to the Administrative Agent for the account of each Lender the appropriate Notes executed by each Borrower, as applicable, in each case in the amount, maturity and as otherwise provided herein. 
  
 (b) No Default; Representations and Warranties. The Administrative Agent shall have received a certificate, dated the Effective
Date, signed by an Authorized Officer of the Company certifying that (i) no Default or Event of Default exists and (ii) all representations and warranties made by each Borrower contained herein or in any other Credit Document are true and correct in
all material respects. 
  
 (c) Corporate Proceedings. (i)The Administrative Agent shall have received from
each Borrower a certificate, dated the Effective Date, signed by an Authorized Officer thereof in the form of Exhibit E with appropriate insertions and deletions, together with (x) copies of its certificate of incorporation, by-laws or other
organizational documents and (y) the resolutions relating to the Credit Documents which shall be satisfactory to the Administrative Agent. 
  
 (ii) The Administrative Agent shall have received all information and copies of all certificates, documents and papers, including good standing certificates and any other records of corporate proceedings and governmental
approvals, if any, which the Administrative Agent may have requested in connection therewith, such documents and papers, where appropriate, to be certified by proper corporate or governmental authorities. 
  
 

 - 25 - 

 (d) A.M. Best Rating. On the Effective Date, each Regulated Insurance Company which is a Material Subsidiary and
which has an A.M. Best financial strength rating shall have an A.M. Best financial strength rating of at least A-. 
  
 (e) Opinions of Counsel. The Administrative Agent shall have received legal opinions reasonably acceptable to the Administrative Agent and addressed to the Administrative Agent and each of the Lenders and dated the Effective
Date, from (a) Christine Patton, Esq., General Counsel of the Company, substantially in the form of Exhibit D-1, (b) Cathy A. Hauck, Esq., Executive Vice President, General Counsel and Corporate Secretary of Partner Reinsurance Company of the U.S.
substantially in the form of Exhibit D-2, (c) Davis Polk & Wardwell, substantially in the form of Exhibit D-3, and (d) Willkie, Farr & Gallagher, substantially in the form of Exhibit D-4. 
  

(f) Fees. The Borrowers shall have paid to the Administrative Agent and the Lenders all fees, expenses (including, without limitation, legal fees and expenses)
and other compensation contemplated by this Agreement and the other Credit Documents, agreed upon by such parties to be paid on or prior to such date. 
  
 The occurrence of the Effective Date shall constitute a representation and warranty by each Borrower to the Agents and each of the Lenders that (i) all the conditions specified in Section 5.01 exist as
of that time and (ii) the representation and warranty set forth in Section 6.04(b) is true and correct in all material respects as of such date. All the Notes, certificates, legal opinions and other documents and papers referred to in this Section
5.01, unless otherwise specified, shall be delivered to the Administrative Agent at the Administrative Agent’s Notice Office for the account of each of the Lenders and, except for the Notes, in sufficient counterparts for each of the Lenders
and shall be satisfactory in form and substance to the Lenders. The Administrative Agent shall give the Company and each Lender written notice that the Effective Date has occurred. 
  
 5.02 Conditions Precedent to All Loans and Letters of Credit.    The obligation of each Lender to make any Loan and the obligation of the Issuing
Agent to issue or increase the Stated Amount of any Letter of Credit is subject, at the time of each such Loan made or Letter of Credit issued or increased, to the satisfaction of the following conditions: 
  
 (a) Effective Date. The Effective Date shall have occurred. 
  
 (b) Notice of Borrowing. The Administrative Agent shall have received, as applicable, (i) a Notice of Borrowing meeting the requirements of Section 1.03(a) with
respect to each incurrence of Revolving Loans, (ii) a Notice of Competitive Bid Borrowing meeting the requirements of Section 1.04(a) with respect to each incurrence of Competitive Bid Loans or (iii) a Letter of Credit Request meeting the
Requirements of Section 2.02 with respect to each Letter of Credit to be issued. 
  
 (c) No Default;
Representations and Warranties. At the time of the incurrence of each Loan or issuance or increase in any Letter of Credit, and also after giving effect thereto, (i) there shall exist no Default or Event of Default and (ii) all representations
and warranties made by each Borrower contained herein or in any other Credit Documents (other than the representa- 
 

 - 26 - 

 tion and warranty made in Section 6.04(b)) shall be true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such Loan. 
  
 The acceptance of the benefits
of each Loan and Letter of Credit shall constitute a representation and warranty by the respective Borrower to the Agents and each of the Lenders that all of the applicable conditions specified in Section 5.02 exist as of that time. 

 
 
SECTION 6. Representations, Warranties and Agreements.    In order to induce the Lenders to enter into this Agreement and to make the Loans and issue Letters of Credit provided for herein, the
Company makes the following representations and warranties to, and agreements with, the Lenders, all of which shall survive the execution and delivery of this Agreement and the making of the Loans and the issuance of any Letter of Credit:

  
 6.01 Corporate Existence and Power.    (a) Each of the Company and its Subsidiaries is
a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, is duly qualified to transact business in every jurisdiction where, such qualification is necessary except where the failure
to be so qualified, would not reasonably, be expected to have a Material Adverse Effect, and (b) each of the Company and its Subsidiaries has all corporate powers and all governmental licenses, authorizations, consents and approvals required to
carry on its businesses as now conducted except where the failure to have such governmental licenses, authorizations, consents and approvals would not reasonably be expected to have a Material Adverse Effect. 
  
 6.02 Corporate and Governmental Authorization; No Contravention.    The execution, delivery and performance by
the Borrowers of this Agreement and the other Credit Documents, (i) are within each of the Borrower’s corporate powers, (ii) have been duly authorized by all necessary corporate action and if required, by all necessary shareholder action, (iii)
require no consent approval of (including any exchange control approval) or action by or in respect of, or registration or filing with, any Governmental Authority, agency or official, except such as have been obtained or made and are in full force
and effect, (iv) do not contravene, or constitute a default under, any provision of applicable law, regulation or order of any Governmental Authority, the charter, by-laws or other organizational documents of any of the Borrowers or of any judgment,
injunction, order or decree binding upon the Borrowers or any of their Subsidiaries, (v) do not result in the creation or imposition of any Lien on any asset of the Borrowers or any of their Subsidiaries and (vi) will not violate or result in a
default under any indenture, loan agreement or other material agreement or instrument binding upon the Borrowers or their assets, or give rise to a right thereunder to require any payment to be made by any such Person. 
  
 6.03 Enforceability.    Each Credit Document constitutes a legal, valid and binding agreement of each of the
Borrowers enforceable against each of the Borrowers in accordance with its terms, and the other Credit Documents, when executed and delivered in accordance with this Agreement, will constitute valid and binding obligations of each of the Borrowers
enforceable in accordance with their respective terms, provided that the enforceability hereof and thereof is subject in each case to general principles of equity and to bankruptcy, insolvency and similar laws affecting the enforcement of
creditors’ rights generally. 
  
 

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 6.04 Financial Information.    (a) The consolidated balance sheet of the Company and its
Consolidated Subsidiaries as of December 31, 2001 and the related consolidated statements of income, shareholders’ equity and cash flows for the Fiscal Year then ended, reported on by Deloitte & Touche copies of which have been delivered to
each of the Lenders, and the unaudited consolidated financial statements of the Company and its Consolidated Subsidiaries for the fiscal quarter ended March 31, 2002, copies of which have been delivered to each of the Lenders, fairly present, in
conformity with GAAP consistently applied, the consolidated financial position and results of operations and cash flows of the Company and its Consolidated Subsidiaries as of such dates and their consolidated results of operations and cash flows for
such periods stated, subject to normal year-end audit adjustments and the absence of footnotes in the case of such unaudited financial statements. 
  
 (b) Since December 31, 2001, there has been no event, act, condition or occurrence that has had or is reasonably likely to have a Material Adverse Effect. 
  
 6.05 Litigation.    There is no action, suit or proceeding pending or threatened against or affecting the
Company or any of its Subsidiaries before any court or arbitrator or any Governmental Authority, agency or official which is reasonably likely to have a Material Adverse Effect or which in any manner draws into question the validity or
enforceability of, or which is reasonably likely to impair the ability of the Borrowers to perform their obligations under, this Agreement or any of the other Credit Documents. 
  
 6.06 Tax Returns and Payments.    (a) Each of the Borrower and each of its Subsidiaries has filed all material federal income tax returns and all
other material tax returns, domestic and foreign, required to be filed by it and has paid all material taxes and assessments payable by it which have become due, except for those contested in good faith and adequately disclosed and fully provided
for on the financial statements of the Borrower and its Subsidiaries in accordance with GAAP principles. The Borrower and each of its Subsidiaries have at all times paid, or have provided adequate reserves (in the good faith judgment of the
management of the Borrower) for the payment of, all federal, state and foreign income taxes applicable for all prior fiscal years and for the current fiscal year to date. There is no material action, suit, proceeding, investigation, or claim now
pending or, to the knowledge of the Borrower or any of its Subsidiaries, threatened by any authority regarding any taxes relating to the Borrower or any of its Subsidiaries. Neither the Borrower nor any of its Subsidiaries has entered into an
agreement or waiver or been requested to enter into an agreement or waiver extending any statute of limitations relating to the payment or collection of taxes of the Borrower or any of its Subsidiaries, or is aware of any circumstances that would
cause the taxable years or other taxable periods of the Borrower or any of its Subsidiaries not to be subject to the normally applicable statute of limitations. 
  
 (b) To ensure the legality, validity, enforceability or admissibility in evidence of this Agreement or any Notes evidencing Loans made (or to be made), it is not necessary that any stamp or similar tax
be paid on or in respect of this Agreement or such Notes, or any other document other than such stamp or similar taxes that have already been paid. 
  
 6.07 Indebtedness.    The Company does not have any Debt on the Effective Date other than that which is listed on Annex IV. 
  
 

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 6.08 Insurance Licenses.    Each Regulated Insurance Company has obtained and maintains in
full force and effect all licenses and permits from all regulatory authorities necessary to operate in the jurisdictions in which such Regulated Insurance Company operates, in each case other than such licenses and permits the failure of which to
obtain or maintain, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. 
  
 6.09 Intellectual Property.    The Company and its Subsidiaries own, or are licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to their business, and
the use thereof by the Company and/or its Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse
Effect. 
  
 6.10 Not an Investment Company.    Neither the Company nor any of its
Subsidiaries is an “investment company” within the meaning of the Investment Company Act of 1940, as amended. 
  
 6.11 Public Utility Holding Company Act.    Neither the Company nor any of its Subsidiaries is a “holding company”, or a “subsidiary company” of a “holding company”, or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding company”, as such terms are defined in the Public Utility Holding Company Act of 1935, as amended. 
  
 6.12 Ownership of Property; Liens.    The Company and its Subsidiaries have good and valid title to, or a valid
leasehold interest in, all of their real and personal properties sufficient for the conduct of their respective businesses and none of such property is subject to any Lien except as permitted in Section 8.01. 
  
 6.13 No Default.    No Default or Event of Default has occurred and is continuing. 
  
 6.14 Full Disclosure.    All information heretofore furnished by the Borrowers to the Administrative Agent or
any Lender for purposes of or in connection with this Agreement or any transaction contemplated hereby is, and all such information hereafter furnished by the Borrowers to the Administrative Agent or any Lender will be, true, accurate and complete
in all material respects on the date as of which such information is stated or certified, provided that, with respect to projected financial information, the Borrowers represent only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time. 
  
 6.15 Compliance with Laws.    The
Company and each of its Subsidiaries is in compliance with all applicable laws, regulations, rules and orders of any Governmental Authority, except where any failure to comply with any such laws would not reasonably be expected to, alone or in the
aggregate, have a Material Adverse Effect. 
  
 6.16 Capital Stock.    All Capital Stock,
debentures, bonds, notes and all other securities of the Company and its Subsidiaries presently issued and outstanding have been validly and properly issued in accordance with all applicable laws, including, but not limited to, the “Blue
Sky” laws of all applicable states and the federal securities laws. The issued shares of 
 

 - 29 - 

 Capital Stock of each of the Company’s Wholly-Owned Subsidiaries are owned by the Company free and clear of any Lien or adverse claim.

  
 6.17 Compliance with ERISA.    (a) Each Borrower and its Subsidiaries and ERISA
Affiliates have fulfilled their respective obligations (if any) under the minimum funding standards of ERISA and the Code with respect to each Plan and are in compliance in all material respects with the applicable provisions of ERISA and the Code,
and have not incurred any liability to the PBGC or any Plan or Multiemployer Plan (other than to make contributions in the ordinary course of business). 
  
 (b) Each Foreign Pension Plan has been maintained in substantial compliance with its terms and with the requirements of any and all applicable laws, statutes, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory authorities. All contributions required to be made with respect to a Foreign Pension Plan have been timely made. Neither the Borrower nor any of its Subsidiaries has incurred
any obligation in connection with the termination of, or withdrawal from, any Foreign Pension Plan. The present value of the accrued benefit liabilities (whether or not vested) under each Foreign Pension Plan, determined as of the end of the
Borrower’s most recently ended fiscal year on the basis of actuarial assumptions, each of which is reasonable, did not exceed the current value of the assets of such Foreign Pension Plan allocable to such benefit liabilities. 

 
 6.18 Margin Stock.    No Borrower nor any of its Subsidiaries is engaged principally, or as one of
its important activities, in the business of purchasing or carrying any Margin Stock, and no part of the proceeds of any Loan hereunder will be used to purchase or carry any Margin Stock, or be used for any purpose which violates, or which is
inconsistent with the provisions of Regulation U or X. 
  
 6.19 Subsidiaries.    Set forth
in Annex III is a complete and correct list of all of the Subsidiaries of the Company as of the Effective Date, together with, for each such Subsidiary, (i) the jurisdiction of organization of such Subsidiary, (ii) each Person holding direct
ownership interests in such Subsidiary and (iii) the percentage of ownership of such Subsidiary represented by such ownership interests. Except as disclosed in Annex III, as of the Effective Date (y) each of the Company and its Subsidiaries owns,
free and clear of Liens, and has the unencumbered right to vote, all outstanding ownership interests in each Person shown to be held by it in Annex III and (z) all of the issued and outstanding Capital Stock of each such Person organized as a
corporation is validly issued, fully paid and nonassessable. 
  
 6.20 Use of
Proceeds.    All proceeds of the Loans shall be utilized for the general corporate purposes of the Company and its Subsidiaries. 
  
 
SECTION 7. Affirmative Covenants.    The Borrowers hereby covenant and agree that on and as of the Effective Date and thereafter until the Commitments have terminated, no Letters of Credit or Notes
are outstanding and the Loans and Unpaid Drawings, together with interest, Fees and all other obligations (other than any indemnities described in Section 12.12 which are not then owing) incurred hereunder, are paid in full: 
  
 7.01 Information Covenants.    The Company will furnish to each Lender: 
  
 

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 (a) as soon as available and in any event within 45 days after the end of each of the first three
quarterly fiscal periods in each Fiscal Year of the Company, a consolidated balance sheet of the Company and its Subsidiaries as at the end of such period and the related consolidated statements of income, changes in stockholders’ equity and
cash flows of the Company for such period and (in the case of the second and third quarterly periods) for the period from the beginning of the current Fiscal Year to the end of such quarterly period, setting forth in each case in comparative form
the consolidated figures for the corresponding periods of the previous Fiscal Year, all in reasonable detail and certified by an Authorized Officer of the Company as presenting fairly, in accordance with GAAP (except as specifically set forth
therein; provided any exceptions or qualifications thereto must be acceptable to the Required Lenders) on a basis consistent with such prior fiscal periods, the information contained therein, subject to changes resulting from normal year-end
audit adjustments; 
  
 (b) as soon as available and in any event within 90 days after the end of each
Fiscal Year of the Company, the consolidated balance sheet of the Company and its Subsidiaries as at the end of such year and the related consolidated statements of income, operations, changes in stockholders’ equity and cash flows of the
Company for such Fiscal Year, setting forth in comparative form the consolidated figures for the previous fiscal year, all in reasonable detail and accompanied by a report thereon of Deloitte & Touche or other independent public accountants of
recognized national standing selected by the Company, which report shall state that such consolidated financial statements present fairly the consolidated financial position of each of the Company and its Subsidiaries as at the dates indicated and
the consolidated results of its operations and cash flows for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except as otherwise specified in such report; provided any exceptions or
qualifications thereto must be acceptable to the Required Lenders) and that the audit by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards; 

 
 (c) within five Business Days after any senior officer of any Borrower becomes aware of the occurrence of any
Default and/or any event or condition constituting, or which in such Borrower’s reasonable judgment is reasonably likely to have a Material Adverse Effect, a certificate of an Authorized Officer of each of the Borrowers setting forth the
details thereof and the action which the Borrowers are taking or propose to take with respect thereto; 
  
 (d) promptly upon the mailing thereof to the security holders of the Borrowers generally, copies of all financial statements, reports and proxy statements so mailed; 
  
 (e) promptly upon the filing thereof, copies of all registration statements (other than the exhibits thereto and any registration statements on Form S-8 or
its equivalent) and annual, quarterly or monthly reports which the Company shall have filed with the Securities and Exchange Commission or any national securities exchange; 
  
 (f) promptly after any Borrower knows of the commencement thereof, notice, of any litigation, dispute or proceeding involving a claim against any of the
Borrowers 
 

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 and/or any Subsidiary which claim could reasonably be expected to have a Material Adverse Effect; 

 
 (g) at the request of any Lender, promptly after the filing thereof, a copy of the annual statements for each
calendar year and quarterly statements for each calendar quarter (if any) as filed with any Applicable Insurance Regulatory Authority of any jurisdiction in which any Regulated Insurance Company is qualified to do business; and 

 
 (h) from time to time such additional information regarding the financial position or business of the Borrowers
and their Subsidiaries as the Administrative Agent, at the request of any Lender, may reasonably request. 
  
 Reports
and financial statements required to be delivered by the Company pursuant to paragraphs (a), (b) and (e) of this Section 7.01 shall be deemed to have been delivered on the date on which the Company posts such reports, or reports containing such
financial statements, on its website on the Internet at www.partnerre.com or when such reports, or reports containing such financial statements are posted on the SEC’s website at www.sec.gov; provided that the Company shall deliver paper copies
of the reports and financial statements referred to in paragraphs (a), (b) and (e) of this Section 7.01 to the Administrative Agent or any Lender who requests it to deliver such paper copies until written notice to cease delivering paper copies is
given by the Administrative Agent or such Lender. 
  
 7.02 Books, Records and
Inspections.    The Borrowers will (i) keep, and will cause each Subsidiary to keep, proper books of record and account in which full, true and correct entries in conformity with GAAP or Statutory Accounting Principles, as
applicable, shall be made of all dealings and transactions in relation to its business and activities; and (ii) permit, and will cause each Subsidiary to permit, representatives of any Lender at such Lender’s expense prior to the occurrence and
during the continuance of an Event of Default and at the Borrowers’ expense after the occurrence of an Event of Default to visit and inspect any of their respective properties, to examine their respective books and records and to discuss their
respective affairs, finances and accounts with their respective officers, employees and independent public accountants. The Borrowers agree to cooperate and assist in such visits and inspections, in each case at such reasonable times and as often as
may reasonably be desired. 
  
 7.03 Maintenance of Existence.    Each of the Borrowers
shall maintain its existence, and will qualify and remain qualified as a foreign corporation in each jurisdiction in which failure to receive or retain such qualifications would have a Material Adverse Effect. 
  
 7.04 ERISA.    As soon as possible and, in any event, within (10) days after a Borrower, any of its
Subsidiaries or any of its ERISA Affiliates knows or has reason to know that any of the events or conditions specified below with respect to any Plan or Multiemployer Plan have occurred or exist, a statement signed by the chief financial officer of
such Borrower setting forth details respecting such event or condition and the action if any, that such Borrower, such Subsidiary or such ERISA Affiliate proposes to take with respect thereto (and a copy of any report or notice required to be filed
with or given to PBGC by such Borrower, such Subsidiary or such ERISA Affiliate with respect to such event or condition): 
 

 - 32 - 

  
 (i) any reportable event, as defined in subsections (c)(1), (2),
(5) and (6), and subsection (d)(2) of Section 4043 of ERISA and the regulations issued thereunder, with respect to a Plan; 
  
 (ii) the filing under Section 4041(c) of ERISA of a notice of intent to terminate any Plan under a distress termination or the distress termination of any Plan; 
  
 (iii) the institution by PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or
the receipt 
  
 by a Borrower, any of its Subsidiaries or any of its ERISA Affiliates of a notice
from a Multiemployer Plan that such action has been taken by PBGC with respect to such Multiemployer Plan; 
  
 (iv) the receipt by a Borrower, any of its Subsidiaries or any of its ERISA Affiliates of notice from a Multiemployer Plan that a Borrower, any of its Subsidiaries or any of its ERISA Affiliates has incurred withdrawal liability
under Section 4201 of ERISA in excess of $10,000,000 or that such Multiemployer Plan is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated under Section 4041A of ERISA whereby
a deficiency or additional assessment is levied or threatened to be levied against a Borrower, any of its Subsidiaries or any of its ERISA Affiliates; and 
  
 (v) the institution of a proceeding by a fiduciary of any Plan or Multiemployer Plan against a Borrower, any of its Subsidiaries or any of its ERISA
Affiliates to enforce Section 515 or 4219(c)(5) of ERISA, which proceeding is not dismissed within 30 days. 
  
 7.05
Insurance.    The Borrowers will maintain, and will cause each of their Subsidiaries to maintain (either in the name of the Borrowers or in such Subsidiary’s own name) with financially sound and reputable insurance
companies, insurance on all their property in at least such amounts and against at least such risks as are usually insured against in the same general area by companies of established repute engaged in the same or similar businesses. 

 
 7.06 Maintenance of Property.    The Borrowers shall, and will cause each of their Subsidiaries to,
maintain all of their properties and assets in good condition, repair and working order, ordinary wear and tear excepted. 
  
 7.07 Payment of Taxes.    Each Borrower will pay and discharge, and will cause each of its Subsidiaries to pay and discharge, all taxes, assessments and governmental charges or levies imposed upon it or
upon its income or profits, or upon any properties belonging to it, prior to the date on which penalties attach thereto, and all lawful claims for sums that have become due and payable which, if unpaid, might become a Lien not otherwise permitted
under Section 8.01; provided, that neither the Borrower nor any of its Subsidiaries shall be required to pay any such tax, assessment, charge, levy or claim which is being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP. 
  
 
SECTION 8. Negative Covenants.    The Borrowers hereby covenant and agree that on and as of the Effective Date and thereafter until the Commitments have terminated, no 
 

 - 33 - 

 Letters of Credit or Notes are outstanding and the Loans and Unpaid Drawings, together with interest, Fees and all other obligations (other than
any indemnities described in Section 12.12 which are not then owing) incurred hereunder, are paid in full: 
  
 8.01
Liens.    Neither the Company nor any of its Subsidiaries will permit, create, assume, incur or suffer to exist any Lien on any asset tangible or intangible now owned or hereafter acquired by it, except: 

 
 (i) Liens existing on the date hereof and listed on Annex V hereto; 
  
 (ii) Liens not securing Debt which are incurred in the ordinary course of business; 
  
 (iii) Liens securing repurchase agreements constituting a borrowing of funds by the Company or any Subsidiary of the
Company in the ordinary course of business for liquidity purposes and in no event for a period exceeding 90 days in each case; and 
  
 (iv) Liens existing on any asset of any Person at the time such Person becomes a Subsidiary and not created in contemplation of such event; 
  
 (v) Liens on any asset securing Debt incurred or assumed for the purpose of financing all or any part of the cost of acquiring such asset, provided that
such Lien attaches to such asset concurrently with or within 90 days after the acquisition thereof; 
  
 (vi) Liens on any asset of any Person existing at the time such Person is merged or consolidated with or into the Company or a Subsidiary and not created in contemplation of such event; 
  
 (vii) Liens existing on any asset prior to the acquisition thereof by the Company or a Subsidiary and not created in
contemplation of such acquisition; 
  
 (viii) Liens arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any of the foregoing clauses of this Section 8.01, provided that such Debt is not increased and is not secured by any additional assets; 
  
 (ix) Liens securing obligations owed by any Borrower to any other Borrower or owed by any Subsidiary of the Company (other
than a Borrower) to the Company or any other Subsidiary; 
  
 (x) Liens incurred in the ordinary
course of business in favor of financial intermediaries and clearing agents pending clearance of payments for investment or in the nature of set-off, banker’s lien or similar rights as to deposit accounts or other funds; 

 
 (xi) Liens consisting of deposits made by any Regulated Insurance Company with an Applicable Insurance
Regulatory Authority or other statutory Liens or Liens or claims imposed or required by applicable insurance laws or regulations against the assets of any Regulated Insurance Company, in each case in favor of policyholders of such 

 - 34 - 

  
 Regulated Insurance Company or an Applicable Insurance Regulatory Authority and
in the ordinary course of such Regulated Insurance Company’s business; 
  
 (xii) Judgment or
judicial attachment Liens, provided that no Event of Default arises under Section 9.01(k); 
  
 (xiii)
Liens, now or in the future, arising in the ordinary course of business of (and solely on assets of) New Solutions or any other Subsidiary securing the obligations of New Solutions or such other Subsidiary, as the case may be; provided that (A) New
Solutions or such other Subsidiary is not a Borrower or a Regulated Insurance Company and (B) New Solutions or such Subsidiary is primarily in the business of dealing in securities interest rate swaps and other derivative transactions; and

  
 (xiv) Liens not otherwise permitted by the foregoing clauses of this Section 8.01 securing Debt
in an aggregate principal amount not at any time exceeding 12% of Consolidated Tangible Net Worth. 
  
 8.02
Dissolution.    No Borrower shall suffer or permit dissolution or liquidation either in whole, except through corporate reorganization to the extent permitted by Section 8.03. 
  
 8.03 Consolidations, Mergers, Sales of Assets and Acquisitions.    (a) The Borrowers will not consolidate or
merge with or into any other Person, provided that (i) any Borrower may merge with another Person if (x) one of the Borrowers is the corporation surviving such merger or, if such Person is the survivor, such Person is a corporation or company
organized and existing under the laws of the United States of America, any state thereof or the District of Columbia, Bermuda or any country which is, on the date of such merger, a member of the Organization of Economic Cooperation and Development,
such Person will expressly and unconditionally assume the due and punctual payment of the principal of, any premium and interest on and other amounts of such Borrower hereunder, and the performance of such Borrower’s obligations hereunder and
such Person delivers an opinion from counsel in the jurisdiction of such person’s organization in form and substance satisfactory to the Administrative Agent covering matters in connection with such consolidation or merger, and (y) immediately
after giving effect to such merger, no Default or Event of Default shall have occurred and be continuing; and (ii) Subsidiaries of the Company may merge with one another (subject, in the case of mergers involving Designated Subsidiary Borrowers, to
compliance with the requirements of preceding clause (x)). 
  
 (b) No Borrower will, nor will it permit any of its
Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer or dispose of, voluntarily or involuntarily (any of the foregoing (subject to the exclusions hereinafter set forth) being referred to in this Section as a
“Disposition”), any of its properties or assets, tangible or intangible (including but not limited to any sale, assignment, discount or other disposition of accounts, contract rights, chattel paper or general intangibles with or without
recourse, but excluding (i) restricted payments permitted under Section 8.08 below, (ii) sales of portfolio securities in the ordinary course of business and (iii) cash payments to discharge obligations or for goods or services or to acquire
assets), provided that the Borrowers and their Subsidiaries may make Dispositions in any fiscal year so 
 

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	long
	 
	as the aggregate amount of such Dispositions made in such fiscal year does not exceed $200,000,000. 
 

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

  
 8.04 Use of Proceeds.    Each Borrower will use the proceeds of all Loans for its
general corporate purposes. No portion of the proceeds of the Loans will be used by the Borrowers or any Subsidiary (i) directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any Margin Stock,
or (ii) for any purpose in violation of any applicable law or regulation. 
  
 8.05 Transactions with
Affiliates.    Neither the Company nor any of its Subsidiaries shall enter into or be a party to, any transaction with any Affiliate of the Company or such Subsidiary (which Affiliate is not one of the Borrowers or a
Subsidiary), except transactions with Affiliates in good faith and on terms no less favorable to such Borrower or Subsidiary than those that could have been obtained in a comparable transaction on an arm’s length basis from an unrelated Person.

  
 8.06 Indebtedness.    No Borrower will at any time create, incur, assume or permit to
exist any Debt, or agree, become or remain liable (contingent or otherwise) to do any of the foregoing, except for Debt which is either pari passu with, or subordinated in right of payment to, the Obligations. 
  
 8.07 Private Act.    No Borrower will become subject to a Private Act. 
  
 8.08 Restricted Payments.    The Company will not declare or pay any dividends, purchase, redeem, retire,
defease or otherwise acquire for value any of its Equity Interests now or hereafter outstanding, return any capital to its stockholders, partners or members (or the equivalent Persons thereof) as such, make any distribution of assets, Equity
Interests, obligations or securities to its stockholders, partners or members (or the equivalent Persons thereof) as such, or permit any of its Subsidiaries to purchase, redeem, retire, defease or otherwise acquire for value any Equity Interests in
the Company, if in any case referred to above, a Default or Event of Default shall have occurred and be continuing at the time of such action or would result therefrom; provided that notwithstanding the foregoing, the Company may declare and pay
dividends payable solely in Equity Interests of the Company and may redeem, return or defease any of its Equity Interests by issuing new Equity Interests. 
  
 8.09 Business.    The Company will not, and will not permit any of its Subsidiaries to, engage (directly or indirectly) in any business other than substantially the same
lines of business in which they are engaged on the Effective Date and reasonable extensions thereof and other businesses that are complimentary or reasonably related thereto. 
  
 8.10 Leverage Ratio.    The Company will not permit the ratio of Consolidated Total Debt to Consolidated Total Capitalization at any time to
exceed 0.35:1.00. 
  
 

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 8.11 Minimum Consolidated Tangible Net Worth.    The Company will not permit Consolidated
Tangible Net Worth to be less than (i) during the period from and including the Effective Date to but not including the Financial Statement Delivery Date immediately following the Company’s fiscal year ending December 31, 2002, $1,250,000,000
and (ii) thereafter, an amount equal to the sum of (x) $1,250,000,000 plus (y) 50% of the Cumulative Consolidated Net Income (if positive) for the period from and including January 1, 2002 through the last day of the most recently ended
fiscal year for which the Financial Statement Delivery Date has occurred. 
  
 8.12 Claims Paying
Ratings.    Each Regulated Insurance Company which is a Material Subsidiary and which has a financial strength rating from A.M. Best Co. (or its successor) will maintain at all times a financial strength rating of at least
“A-” from A.M. Best & Co. (or its successor); provided that if the rating system of A.M. Best Co. (or its successors) shall change, or if it (or its successors) shall cease to be in the business of rating the financial strength of
insurance companies like the Regulated Insurance Companies, the Company and the Lenders shall negotiate in good faith to amend the references to specific A.M. Best Co. ratings in this Agreement to reflect such changed rating system or the
non-availability of ratings from such rating agency (it being understood that any such amendment to such specific ratings shall in no event be effective without the approval of the Required Lenders). 
  
 
SECTION 9. Defaults. 
  
 9.01 Events of Default.    Upon the
occurrence of any of the following specified events (each, an “Event of Default”): 
  
 (a)
any Borrower shall fail to pay when due any principal of any Loan, or shall fail to pay any interest on any Loan within three Business Days after such interest shall become due, or shall fail to pay any fee or other amount payable hereunder within
five Business Days after such fee or other amount becomes due; or 
  
 (b) any Borrower shall fail to
observe or perform any covenant contained in Sections 7.01(c), 7.02(ii), 7.03, 7.06 or Section 8; or 
  
 (c) any Borrower shall fail to observe or perform any covenant or agreement contained herein (other than those covered by clause (a) or (b) above) for 30 days after the earlier of (i) the first day on which any Borrower has knowledge
of such failure or (ii) written notice thereof has been given to the Company by the Administrative Agent at the request of any Lender; or 
  
 (d) any representation, warranty, certification or statement made or deemed made by any Borrower in Section 6 of this Agreement or in any certificate, financial statement or other document delivered
pursuant to this Agreement shall prove to have been incorrect or misleading in any material respect when made (or deemed made); or 
  
 (e) the Company or any Subsidiary shall default in any payment in respect of Debt outstanding in an aggregate principal amount equal to or in excess of $25,000,000 (other than the Obligations) (after
giving effect to any applicable grace period); or 
 

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 (f) any event or condition shall occur which results in the acceleration of the maturity of any Debt outstanding in an
aggregate amount equal to or in excess of $25,000,000 of the Company or any Subsidiary or the mandatory prepayment or purchase of such Debt by the Company (or its designee) or such Subsidiary (or its designee) prior to the scheduled maturity
thereof; or 
  
 (g) The Company or any Material Subsidiary shall commence a voluntary case or other proceeding
seeking liquidation, reorganization, rehabilitation, conservation, supervision or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, rehabilitator, conservator, custodian or other similar official of them or any substantial part of their property, or shall consent to any such relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against them, or shall make a general assignment for the benefit of creditors, or shall fail generally, or shall admit in writing their inability, to pay their debts as they become due, or shall
take any corporate action to authorize any of the foregoing, or shall become or be declared by a court of competent jurisdiction to be insolvent; or 
  
 (h) an involuntary case or other proceeding shall be commenced against the Company or any Material Subsidiary seeking liquidation, reorganization, rehabilitation, conservation, supervision or other
relief with respect to them or their debts under any bankruptcy, insolvency or other similar law or the Bermuda Companies Law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, rehabilitator, conservator,
custodian or other similar official of them or any substantial part of their property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 60 days; or an order for relief shall be entered against the
Company or any Material Subsidiary under the federal bankruptcy laws as now or hereafter in effect; 
  
 (i) an event
or condition specified in Section 7.04 shall occur or exist with respect to any Plan or Multiemployer Plan, a Borrower, any of its Subsidiaries or any of its ERISA Affiliates shall fail to pay when due any material amount which they shall have
become liable to pay to the PBGC or to a Plan or a Multiemployer Plan under Title IV of ERISA, or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Plan must be terminated, and as a result
of such event or condition, together with all such other events or conditions, a Borrower, any of its Subsidiaries or any of its ERISA Affiliates shall be reasonably likely in the opinion of the general counsel of such Borrower to incur a liability
to a Plan, a Multiemployer Plan or PBGC (or any combination of the foregoing); or 
  
 (j) the Company Guaranty shall
terminate or cease, in whole or part, to be a legally valid and binding obligation of the Company or any Person acting for or on behalf of the Company shall contest such validity or binding nature of such Company Guaranty, or any other Person shall
assert any of the foregoing; 
 

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 (k) one or more judgments or orders for the payment of money in an aggregate amount in excess of $50,000,000 shall be
rendered against the Company or any Subsidiary and such judgment or order shall continue unsatisfied and unstayed for a period of 30 days; or 
  
 (l) a Change of Control shall occur; 
  
 then, and in every such event, the Administrative
Agent shall (i) if requested by the Required Lenders, by notice to the Company to terminate the Commitments and they shall thereupon terminate, (ii) if requested by the Required Lenders, by notice to the Company to declare the principal of and any
accrued interest in respect of all Loans and all other Obligations owing hereunder and under the other Credit Documents to be, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby
waived by the Borrowers, (iii) if requested by the Required Lenders, terminate any Letter of Credit or give a Notice of Non-Extension in respect thereof if permitted in accordance with its terms, and (iv) if requested by the Required Lenders, direct
the applicable Borrower to pay (and the applicable Borrower hereby agrees upon receipt of such notice, or upon the occurrence of any Event of Default specified in Section 9.01(g) and 9.01(h), to pay) to the Administrative Agent at the Payment Office
an amount of cash to be held as security for respective Borrower’s reimbursement obligations in respect of all Letters of Credit then outstanding which were issued for the account of such Borrower, equal to the aggregate Stated Amount of all
such Letters of Credit at such time; provided that if any Event of Default specified in clause (g) or (h) above occurs with respect to the Company without any notice to the Company or any other act by the Administrative Agent or the Lenders,
the Total Commitment shall thereupon automatically terminate and the Notes (together with accrued interest thereon) and all other amounts payable hereunder and under the other Credit Documents shall automatically become immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers. Notwithstanding the foregoing, the Administrative Agent shall have available to it all other remedies at law or equity, and shall
exercise any one or all of them at the request of the Required Lenders. 
  
 9.02 Notice of
Default.    The Administrative Agent shall give notice to the Company of any Default under Section 9.01(c) promptly upon being requested to do so by any Lender and shall thereupon notify all the Lenders thereof. 

 
 
SECTION 10. Definitions.    As used herein, the following terms shall have the meanings herein specified unless the context otherwise requires. Defined terms in this Agreement shall include in the
singular number the plural and in the plural the singular: 
  
 “Absolute Rate” shall mean an interest rate
(rounded to the nearest .0001) expressed as a decimal. 
  
 “Absolute Rate Borrowing” shall mean a
Competitive Bid Borrowing with respect to which a Borrower has requested that the Bidder Lenders offer to make Competitive Bid Loans at Absolute Rates. 
  
 

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 “Additional Costs” shall mean, with respect to any Lender lending from an office in the United Kingdom or a
Participating Member State, the amount notified by such Lender to the Borrowers and the Administrative Agent as its reasonable determination of the proportion of the cost attributable to the Loans made by such Lender from that office of complying
with the fee and minimum reserve requirements of the Bank of England and the UK Financial Services Authority or the European Central Bank in respect of loans made from that office. 
  
 “Administrative Agent” shall have the meaning provided in the first paragraph of this Agreement. 
  
 “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling (including but not limited to all directors and officers
of such Person), controlled by, or under direct or indirect common control with such Person. A Person shall be deemed to control a corporation if such Person possesses, directly or indirectly, the power (i) to vote 10% or more of the securities
having ordinary voting power for the election of directors of such corporation or (ii) to direct or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise.

  
 “Aggregate Loan Outstandings” shall have the meaning provided in Section 4.02(a). 

 
 “Agreement” shall mean this Credit Agreement, as the same may be from time to time modified, amended and/or
supplemented. 
  
 “Alternate Currency” shall mean each Primary Alternate Currency and each Other Alternate
Currency. 
  
 “Alternate Currency Letter of Credit” shall mean any Letter of Credit to the extent
denominated in an Alternate Currency. 
  
 “Alternate Currency Loan” shall mean each Loan denominated in an
Alternate Currency. 
  
 “Applicable Insurance Regulatory Authority” shall mean, when used with respect to
any Regulated Insurance Company, (x) the insurance department or similar administrative authority or agency located in each state or other jurisdiction (foreign or domestic) in which such Regulated Insurance Company is domiciled, (y) the insurance
department, authority or agency in each state or other jurisdiction (foreign or domestic) in which such Regulated Insurance Company is licensed, to the extent it has regulatory jurisdiction over such Regulated Insurance Company, and (z) any Federal
or national insurance regulatory department, authority or agency that may be created and that has regulatory jurisdiction over such Regulated Insurance Company. 
  
 “Applicable L/C Margin” shall mean (a) prior to the Commitment Expiration Date, 0.33% and (b) thereafter, 0.40%. 
  
 “Applicable Margin” shall mean (i) in the case of Base Rate Loans, 0% per annum and (ii) in the case of Eurodollar Loans, (A) if prior to the
Commitment Expiration Date, 0.28% per annum and (B) thereafter, 0.60% per annum. 
  
 

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 “Approved Currency” shall mean each of Dollars, each Primary Alternate Currency and each Other Alternate
Currency. 
  
 “Assignment Agreement” shall mean the Assignment Agreement in the form of Exhibit F
(appropriately completed). 
  
 “Authorized Officer” shall mean any senior officer of a Borrower designated
as such in writing to the Administrative Agent by such Borrower. 
  
 “Base Rate” shall mean, at any time,
the higher of (i) the rate which is 1⁄2 of 1% in excess of the Federal Funds Effective Rate as published by the Federal Reserve Bank of New York and (ii) the Prime Commercial Lending Rate of JPMorgan Chase Bank as announced from time to time at
its head office. 
  
 “Base Rate Loan” shall mean each Revolving Loan or Term Loan that is not a Eurodollar
Loan. 
  
 “Bidder Lender” shall mean each Lender that has notified in writing (and has not withdrawn such
notice) the Administrative Agent that it desires to participate generally in the bidding arrangements relating to Competitive Bid Borrowings. 
  
 “Borrower” or “Borrowers” shall mean the Company and each Designated Subsidiary Borrower. For the purposes of Sections 5, 6, 7, 8 and 9 (including defined terms used therein) any
reference to “Borrower” shall also mean, and include, the Company in its capacity as guarantor under Section 13. 
  
 “Borrowing” shall mean (i) the incurrence by a single Borrower of Revolving Loans or Term Loans denominated in Dollars that are Base Rate Loans on a pro rata basis from all Lenders; (ii) the incurrence by a
single Borrower of Revolving Loans or Term Loans of a single Approved Currency that are Eurodollar Loans on a pro rata basis from all Lenders, on a given date (or resulting from conversions on a given date), having the same Interest
Period, provided that Base Rate Loans incurred pursuant to Section 1.11(b) shall be considered part of any related Borrowing of Eurodollar Loans; and (iii) a Competitive Bid Borrowing. 
  

“Business Day” shall mean (i) for all purposes other than as covered by clause (ii) below, any day excluding Saturday, Sunday and any day which shall be in
the City of New York a legal holiday or a day on which banking institutions are authorized by law or other governmental actions to close, (ii) with respect to all notices and determinations in connection with, and payments of principal and interest
on, Eurodollar Loans and Competitive Bid Loans made pursuant to a Spread Borrowing, any day which is a Business Day described in clause (i) and which is also a day for trading by and between banks in the London interbank Eurodollar market and, with
respect to any notices or determinations in respect of Euros, which is customarily a “Business Day” for such notices or determinations. 
  
 “Canadian Dollars” shall mean freely transferable lawful money of Canada. 
  
 “Canadian Dollar Equivalent” shall mean, at any time for the computation thereof, the amount of Canadian Dollars which could be purchased with the amount of Dollars 
 

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 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
three Business Days prior to the date of any determination thereof for purchase on such date. 
  
 “Capital
Stock” shall mean any capital stock of the Company or any Consolidated Subsidiary (to the extent issued to a Person other than the Borrowers), whether common or preferred. 
  
 “Cash Equivalents” shall mean, as to any Person, (i) securities issued or directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one year from the date of acquisition, (ii) time deposits and certificates of deposit of
any commercial bank having, or which is the principal banking subsidiary of a bank holding company organized under the laws of the United States, any State thereof, the District of Columbia or any foreign jurisdiction having, capital, surplus and
undivided profits aggregating in excess of $200,000,000, with maturities of not more than one year from the date of acquisition by such Person, (iii) repurchase obligations with a term of not more than 90 days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the qualifications specified in clause (ii) above, (iv) commercial paper rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody’s and in each case maturing not more than one year after the date of acquisition by such Person, (v) investments in money market funds substantially all of whose assets are comprised of securities of the types described in clauses (i)
through (iv) above. 
  
 “Change of Control” shall mean the occurrence of any of the following events or
conditions: (a) any Person or group of Persons (as used in Sections 13 and 14 of the Securities Exchange Act of 1934, and the rules and regulations thereunder) shall have become the beneficial owner (as defined in rules promulgated by the SEC) of
more than 40% of the voting securities of the Company; or (b) a majority of the members of the Company’s board of directors are persons who are then serving on the board of directors without having been elected by the board of directors or
having been nominated for election by its shareholders. 
  
 “Code” shall mean the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to the Code are to the Code, as in effect at the date of this Agreement and any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor. 
  
 “Commitment” shall mean, with respect to each
Lender, at any time, the amount set forth opposite such Lender’s name on Annex I, as the same may be reduced pursuant to Sections 3.02, 3.03 or 9.01. 
  
 “Commitment Expiration Date” shall mean the date occurring 364 days after the Effective Date, or such later date to which the Commitment Expiration Date shall have been extended pursuant to
Section 1.16. 
  
 “Company” shall have the meaning provided in the first paragraph of this Agreement.

  
 

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 “Company Guaranty” shall mean the guaranty of the Company provided in Section 13. 
  
 “Competitive Bid Borrowing” shall mean a Borrowing by a Borrower of Competitive Bid Loans pursuant to Section 1.04.

  
 “Competitive Bid Loan” shall have the meaning specified in Section 1.01(c). 
  
 “Competitive Bid Note” shall have the meaning provided in Section 1.06(a). 
  

“Consolidated Net Worth” shall mean, as of any date of determination, the Net Worth of the Company and its Subsidiaries on such date determined on a
consolidated basis, plus, to the extent not otherwise included in Net Worth, the then issued and outstanding amount of all Qualified Trust Preferred Securities and Qualified Mandatorily Convertible Preferred Securities. 
  
 “Consolidated Subsidiary” shall mean at any date any Subsidiary or other entity the accounts of which, in accordance with GAAP,
would be consolidated with those of the Company in its consolidated financial statements as of such date. 
  
 “Consolidated Tangible Net Worth” shall mean, as of the date of any determination, Consolidated Net Worth of the Company on such date less the amount of all intangible items included therein, including, without limitation,
goodwill, franchises, licenses, patents, trademarks, trade names, copyrights, service marks, brand names and write-ups of assets. 
  
 “Consolidated Total Capitalization” shall mean, as of any date of determination, the sum of (i) Consolidated Total Debt and (ii) Consolidated Net Worth. 
  
 “Consolidated Total Debt” shall mean, as of any date of determination, all Debt of the Company and its Subsidiaries on such date determined on a consolidated
basis. 
  
 “Credit Documents” shall mean this Agreement and any Notes. 
  
 “Cumulative Consolidated Net Income” shall mean, for any period, an amount equal to the net income of the Company and its
Subsidiaries (determined on a consolidated basis in accordance with GAAP) for such period. 
  
 “DSB Assumption
Agreement” shall mean an assumption agreement in the form of Exhibit G. 
  
 “Debentures” shall mean
subordinated debt securities issued by the Company or any Subsidiary to a Special Purpose Trust in exchange for proceeds of Qualified Preferred Securities and common securities of such Special Purpose Trust. 
  
 “Debt” of any Person shall mean at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii)
all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the

 

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 ordinary course of business, (iv) all obligations of such Person as lessee under capital leases, (v) all obligations of such Person to reimburse
any bank or other Person in respect of amounts payable under a banker’s acceptance, (vi) all Redeemable Preferred Stock of such Person (in the event such Person is a corporation), (vii) all obligations (absolute or contingent) of such Person to
reimburse any bank or other Person in respect of amounts paid under a letter of credit or similar instrument, (viii) all Debt of others secured by a Lien on any asset of such Person, whether or not such Debt is assumed by such Person, and (ix) all
Debt of others Guaranteed by such Person; provided, that (A) for the avoidance of doubt, insurance payment liabilities, as such, and liabilities arising in the ordinary course of such Person’s business as an insurance or reinsurance company
(including GICs) or a corporate member of The Council of Lloyd’s or as a provider of financial or investment services or contracts (in each case other than in connection with the provision of financing to such Person or any of such
Person’s Affiliate) shall not constitute Debt, and (B) solely for purposes of Section 8.10 and the definition of “Consolidated Total Debt,” “Debt” shall not include (I) any contingent obligations of any Person under or in
connection with acceptance, letter of credit or similar facilities so long as no drawings or payments have been made in respect thereof, (II) obligations of the Company or any Subsidiary under any Debentures or under any subordinated guaranty of any
Qualified Trust Preferred Securities or obligations of a Special Purpose Trust under any Qualified Trust Preferred Securities or (III) obligations of the Company in respect of any Redeemable Preferred Stock that is part of a unit which constitutes
Qualified Mandatorily Convertible Preferred Securities, but only up until such time as such Redeemable Preferred Securities are remarketed in connection with the settlement of the related contract for the purchase and sale of the Company’s
ordinary common shares. 
  
 “Default” shall mean any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default. 
  
 “Defaulting Lender” shall mean any Lender with
respect to which a Lender Default is in effect. 
  
 “Designated Subsidiary Borrower” shall mean Partner
Reinsurance Company Ltd., PartnerRe S.A., Partner Reinsurance Company of the U.S., PartnerRe Insurance Company of New York and each 90% Owned Subsidiary of the Company which is designated as a Designated Subsidiary Borrower in accordance with
Section 1.15. 
  
 “Dispositions” shall have the meaning provided for in Section 8.03(b). 

 
 “Dollar Equivalent” shall mean, at any time for the determination thereof in accordance with Section 12.07(b), 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. 
  
 “Dollar” and
the sign “$” shall each mean freely transferable lawful money of the United States. 
  
 “Effective
Date” shall have the meaning provided in Section 5.01. 
  
 

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 “Effective Overall Rate” shall mean the rate designated as such in the TEG Letter. 
  
 “EMU Legislation” shall mean the legislative measures of the European Council for the introduction of, changeover to or
operation of a single or unified European currency. 
  
 “Equity Interests” shall mean, with respect to any
Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or other acquisition from such Person of
such shares (or such other interests), and other ownership or profit interests in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any date of determination. 
  
 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA, as in effect as
of the Effective Date and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor. 
  
 “ERISA Affiliate” shall mean any corporation or trade or business which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as a Borrower or any of its Subsidiaries or
is under common control (within the meaning of Section 414(c) of the Code) with the Borrower or any of its Subsidiaries. 
  
 “Euro” shall mean the lawful currency of each of the Participating Member States. 
  
 “Euro Equivalent” shall mean, at any time for the determination thereof, the amount of Euros which could be purchased with the amount of Dollars involved in such computation at the spot exchange rate therefor as quoted by
JPMorgan Chase Bank 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. 
  
 “Eurodollar Loan” shall mean each Loan that at the election of each Borrower is bearing interest by reference to LIBOR. 
  
 “Event of Default” shall have the meaning specified in Section 9.01. 
  
 “Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as amended. 
  
 “Excluded Period” shall mean, with respect to any additional amount payable under Section 1.11(a)(ii), 1.11(c), 1.11(d), 1.11(e) or 2.04, the period ending 180 days prior to the applicable Lender’s delivery of
the written notice referenced in 1.11(a)(ii), 1.11(c), 1.11(d) or 2.04, as applicable, with respect to such additional amount. 
 

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 “Existing Commitment Expiration Date” shall have the meaning provided
in Section 1.16. 
  
 “Facility Fees” shall have the meaning specified in Section 3.01(a). 

 
 “Federal Funds Effective Rate” shall mean, for any period, a fluctuating interest rate equal for each day during such
period to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from
three Federal Funds brokers of recognized standing selected by the Administrative Agent. 
  
 “Fees” shall
mean all amounts payable pursuant to, or referred to in, Section 3.01. 
  
 “Final Maturity Date” shall mean
the date occurring one year following the Commitment Expiration Date. 
  
 “Financial Statement Delivery
Date” shall mean each date upon which the Company’s audited annual financial statements are delivered pursuant to Section 7.01(b). 
  
 “Fiscal Year” means any fiscal year of the Borrowers. 
  
 “Foreign Pension Plan” shall mean any plan, fund (including, without limitation, any superannuation fund) or other similar program established or maintained outside the United States of America by the Borrower or any of its
Subsidiaries primarily for the benefit of employees of the Borrower or such Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in
contemplation of retirement or payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code. 
  
 “GAAP” shall mean generally accepted accounting principles in the United States of America as in effect from time to time. 
  
 “Governmental Authority” means the government of the United States of America, or of any other nation, or any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing regulatory or administrative powers or functions of or pertaining to government including, without limitation, any Applicable
Insurance Regulatory Authority. 
  
 “Guarantee” by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to
secure, purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services,
to
 
 

 - 46 - 

 
provide collateral security, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for the purpose of assuring in any other manner the obligee of such
Debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part), provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course
of business. The term “Guarantee” used as a verb has a corresponding meaning. 
  
 “Guaranteed
Creditors” shall mean and include each of the Administrative Agent, the Lenders and the Issuing Agent. 
  
 “Guaranteed Obligations” shall mean the principal and interest on each Note issued by each Designated Subsidiary Borrower to each Lender, and Loans made to each Designated Subsidiary Borrower, under this Agreement and all
reimbursement obligations and Unpaid Drawings with respect to Letters of Credit issued for the account of each Designated Subsidiary Borrower, together with all the other obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities (including, without limitation, indemnities, fees and interest thereon) of each Designated Subsidiary Borrower to such Lender, the Administrative Agent and the Issuing Agent
now existing or hereafter incurred under, arising out of or in connection with this Agreement and each other Credit Document for which each Designated Subsidiary Borrower is a party and the due performance and compliance by any such Designated
Subsidiary Borrower with all the terms, conditions and agreements contained in this Agreement and each such other Credit Document. 
  
 “Initial Term Loan Amount” shall mean the initial principal amount of Term Loans incurred pursuant to Section 1.01(b). 
  
 “Insurance Business” shall mean one or more aspects of the business of selling, issuing or underwriting insurance or reinsurance. 
  
 “Interest Period” shall mean (a) with respect to any Eurodollar Loan, the interest period applicable thereto, as determined pursuant to Section 1.10 and (b) with
respect to any Competitive Bid Loan, the period beginning on the date of incurrence thereof and ending on the stated maturity date thereof. 
  
 “Interest Rate Basis” shall mean LIBOR and/or such other basis for determining an interest rate as the Borrowers and the Administrative Agent may agree upon from time to time. 

 
 “Issuing Agent” shall mean JPMorgan Chase Bank. 
  
 “Issuing Country” shall have the meaning specified in Section 12.17(a). 
  
 “Judgment Currency” shall have the meaning provided in Section 12.16(a). 
  
 “Judgment Currency Conversion Date” shall have the meaning provided in Section 12.16(a). 
  
 

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 “L/C CED Amount” shall mean the Letter of Credit Outstandings as of the Commitment Expiration Date.

  
 “Lender” or “Lenders” shall have the meaning provided in the first paragraph of this
Agreement. 
  
 “Lender Default” shall mean (i) the refusal (which has not been retracted) of a Lender to
make available its portion of any Borrowing or (ii) a Lender having notified the Administrative Agent and/or each Borrower that it does not intend to comply with its obligations under Section 1.01, in the case of either clause (i) or (ii) above as a
result of the appointment of a receiver or conservator with respect to such Lender at the direction or request of any regulatory agency or authority. 
  
 “Lender Register” shall have the meaning provided in Section 12.15. 
  
 “Letter of Credit” shall have the meaning provided in Section 2.01(a). 
  
 “Letter of
Credit Fee” shall have the meaning provided in Section 3.01(c). 
  
 “Letter of Credit Outstandings”
shall mean, at any time, the sum of, without duplication (i) the aggregate Stated Amount of all Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all Letters of Credit. 
  
 “Letter of Credit Request” shall have the meaning provided in Section 2.02(a). 
  
 “Letter of Credit Supportable Obligations” shall mean obligations of the Borrowers or any of their Subsidiaries which are
permitted to exist pursuant to the terms of this Agreement. 
  
 “LIBOR” shall mean, for each Interest
Period applicable to any Loan (or other period for determination), the British Bankers Association Interest Settlement Rate that appears on page 3750 (or other appropriate page if the relevant currency does not appear on such page) of the Dow Jones
Telerate Screen (or any successor page) for deposits in the relevant currency with maturities comparable to such Interest Period (or other period for determination) as of 11:00 A.M. (London time) on the date which is two Business Days prior to the
commencement of such Interest Period (or other period for determination ) or, if such a rate does not appear on the Dow Jones Telerate Screen (or any successor page), the offered quotations to first-class banks in the London interbank market by JP
Morgan Chase Bank for deposits in the relevant currency of amounts in same day funds comparable to the outstanding principal amount of such Loan with maturities comparable to such Interest Period (or other period for determination) determined as of
11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period (or other period for determination). 
  
 “Lien” shall mean, with respect to any asset, any mortgage, deed to secure debt, deed of trust, lien, pledge, charge, security interest, security title, preferential arrangement which has the
practical effect of constituting a security interest or encumbrance, servitude or encumbrance of any kind in respect of such asset to secure or assure payment of a Debt or a Guarantee, whether by consensual agreement or by operation of statute or
other law, or by any agreement,
 
 

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contingent or otherwise, to provide any of the foregoing. For the purposes of this Agreement, the Company or any Subsidiary shall be deemed to own subject to a Lien any asset which they have
acquired or hold subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset. 
  
 “Loan” or “Loans” shall mean (i) prior to the Commitment Expiration Date, each Revolving Loan and each Competitive Bid Loan and (ii) on or after the
Commitment Expiration Date, Term Loans. 
  
 “Margin Stock” shall have the meaning provided in Regulation U.

  
 “Material Adverse Effect” shall mean, (i) a material adverse effect on the business, operations,
property or financial condition of the Company and its Subsidiaries taken as a whole or (ii) a material adverse effect on (x) the rights and remedies of the Administrative Agent or the Lenders under the Credit Documents, (y) the ability of any
Borrower to perform its obligations under the Credit Documents to which it is a party, as applicable, or (z) the legality, validity or enforceability of any Credit Document. 
  
 “Material Subsidiary” shall mean any Subsidiary of the Company whose total assets or total revenues exceed 2.5% of the total assets or gross revenues,
respectively, of the Company and its Subsidiaries on a consolidated basis as of the most recent fiscal quarter end and for the most recent fiscal quarter period, respectively, determined in accordance with GAAP. 
  
 “Minimum Borrowing Amount” shall mean (i) for any Revolving Loans that are Dollar denominated, $2,500,000, (ii) for any
Revolving Loans that are Alternate Currency Loans, an amount in the respective Approved Currency having a Dollar Equivalent determined at the time a Notice of Borrowing is received or a prepayment made of $2,500,000 (iii) for any Competitive Bid
Loans that are Dollar denominated, $2,500,000 and (iv) for any Competitive Bid Loans that are Alternate Currency Loans, an amount in the respective Alternate Currency having a Dollar Equivalent (determined at the time a Notice of Competitive Bid
Borrowing is received) of $2,500,000. 
  
 “Multiemployer Plan” shall mean any multiemployer plan as defined
in Section 4001(a)(3) of ERISA, which is maintained or contributed to by (or to which there is an obligation to contribute of) a Borrower, any of its Subsidiaries or any of its ERISA Affiliates, and each such plan for the five year period
immediately following the latest date on which such Borrower, such Subsidiary or such ERISA Affiliate maintained, contributed to or had an obligation to contribute to such plan. 
  
 “Net Worth” shall mean, as to any Person, the sum of its capital stock, capital in excess of par or stated value of shares of its capital stock, retained earnings
and any other account which, in accordance with GAAP, constitutes stockholders equity, excluding any treasury stock. 
  
 “New Solutions” shall mean PartnerRe New Solutions Inc., a Delaware corporation and a Wholly-Owned Subsidiary of the Borrower. 
  
 

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 “90%-Owned Subsidiary” of any Person shall mean any other Person to the extent at least 90% of each class of
the capital stock or other ownership interests are owned directly or indirectly by such first Person. 
  
 “Non-Continuing Lender” shall have the meaning provided in Section 1.16. 
  
 “Non-Defaulting Lender” shall mean each Lender other than a Defaulting Lender. 
  
 “Note” shall mean each Revolving/Term Note and each Competitive Bid Note. 
  
 “Notice
Date” shall have the meaning provided in Section 1.16. 
  
 “Notice of Borrowing” shall have the
meaning provided in Section 1.03(a). 
  
 “Notice of Competitive Bid Borrowing” shall have the meaning
provided in Section 1.04(a). 
  
 “Notice of Conversion” shall have the meaning provided in Section 1.07.

  
 “Notice of Non-Extension” shall have the meaning specified in Section 2.05. 
  
 “Notice Office” shall mean (a) except as provided in clause (b) below, the office of the Administrative Agent at One Chase
Manhattan Plaza, New York, New York 10081, Attention: Ms. Laura Rebecca, Telephone: 212-552-7253, Facsimile: 212-552-7490 and (b) in the case of Notices of Borrowing in respect of Eurodollar Loans constituting Alternate Currency Loans, the office of
the Administrative Agent at 125 London Wall, London, U.K. EC2Y5; or in each case such other office as the Administrative Agent may designate to the Borrowers from time to time. 
  
 “Obligations” shall mean all amounts, direct or indirect, contingent or absolute, of every type or description, and at any time existing, owing to the
Administrative Agent or any Lender pursuant to the terms of this Agreement or any other Credit Document. 
  
 “Obligation Currency” shall have the meaning provided in Section 12.16(a). 
  
 “Other
Alternate Currency” shall mean any freely transferable currency other than any Primary Alternate Currency, to the extent such currency is approved by the Administrative Agent and each of the Lenders. 
  
 “Participating Member State” shall mean any member state of the European Communities that adopts or has adopted the Euro as its
lawful currency in accordance with the legislation of the European Union relating to European Monetary Union. 
  
 “Partner Reinsurance Company Ltd.” shall mean Partner Reinsurance Company Ltd., a company organized under the laws of Bermuda. 
  
 “PartnerRe Insurance Company of New York” shall mean PartnerRe Insurance Company of New York, a corporation organized under the laws of the State of New York. 
  
 

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 “PartnerRe S.A.” shall mean PartnerRe S.A., a company organized under the laws of France. 

 
 “Partner Reinsurance Company of the US” shall mean Partner Reinsurance Company of the U.S., a corporation organized
under the laws of the State of New York. 
  
 “Payment Office” shall mean the office of the
Administrative Agent at One Chase Manhattan Plaza, New York, New York 10081, Attention: Ms. Laura Rebecca, Telephone: 212-552-7253, Facsimile: 212-552-7490, or such other office or offices as the Administrative Agent may designate to the Borrowers
from time to time. 
  
 “PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to
Section 4002 of ERISA, or any successor thereto. 
  
 “Percentage” shall mean, at any time for each Lender,
the percentage obtained by dividing such Lender’s Commitment at such time by the Total Commitment then in effect, provided that if the Total Commitment has been terminated, the Percentage of each Lender shall be determined by dividing such
Lender’s Commitment as in effect immediately prior to such termination by the Total Commitment as in effect immediately prior to such termination (but also giving effect to any assignments made in accordance with Section 12.04(b) after the date
on which the Total Commitment has terminated). 
  
 “Person” shall mean any individual, partnership, limited
liability company, joint venture, firm, corporation, association, trust or other enterprise or business entity or any government or political subdivision or any agency, department or instrumentality thereof. 
  
 “Plan” shall mean any pension plan as defined in Section 3(2) of ERISA and subject to Title IV of ERISA, which is maintained or
contributed to by (or to which there is an obligation to contribute of) a Borrower, any of its Subsidiaries or any of its ERISA Affiliates, and each such plan for the five year period immediately following the latest date on which each such
Borrower, its Subsidiaries or ERISA Affiliates maintained, contributed to or had an obligation to contribute to such plan. 
  
 “Pounds Sterling” shall mean freely transferable lawful money of the United Kingdom. 
  
 “Pounds Sterling Equivalent” shall mean, at any time for the determination thereof, the amount of Pounds Sterling which could be purchased with the amount of Dollars involved in such computation at the spot exchange rate
therefor as quoted by JPMorgan Chase Bank 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. 
  
 “Primary Alternate Currency” shall mean each of Euros, Pounds Sterling, Swiss Francs and Canadian Dollars. 
  

“Prime Lending Rate” shall mean the rate which JPMorgan Chase Bank announces from time to time as its prime commercial lending rate, the Prime Lending Rate
to change when and as such prime lending rate changes. The Prime Lending Rate is a reference
 
 

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rate and does not necessarily represent the lowest or best rate actually charged to any customer. JPMorgan Chase Bank may make commercial loans or other loans at rates of interest at, above or
below the Prime Lending Rate. 
  
 “Principal Amount” shall mean (i) the outstanding principal amount of
each Loan denominated in Dollars, and/or (ii) the Dollar Equivalent of the outstanding principal amount of each Alternate Currency Loan, as the context may require. 
  
 “Private Act” shall mean separate legislation enacted in Bermuda with the intention that such legislation apply specifically to a Borrower, in whole or in part.

  
 “Qualified Mandatorily Convertible Preferred Securities” shall mean (without duplication) (a) the 8%
Premium Equity Participating Security Units issued by the Company; and (b) other units comprised of (i) preferred shares of the Company and (ii) a contract for the sale of ordinary common shares of the Company so long as the holder of such unit is
obligated to purchase such ordinary common shares with cash or the proceeds from remarketing such preferred shares. 
  
 “Qualified Trust Preferred Securities” shall mean (a) the 7.90% Preferred Securities issued by PartnerRe Capital Trust I and guaranteed by the Company; and (b) other preferred securities issued by a Special Purpose Trust
which shall provide, among other things, that dividends shall be payable only out of proceeds of interest payments on the Debentures, so long as such preferred securities do not constitute Redeemable Preferred Stock. 
  
 “Redeemable Preferred Stock” of any Person shall mean any preferred stock issued by such Person which (a) is either (i)
mandatorily redeemable (by sinking fund or similar payments or otherwise) prior to the fifth anniversary of the Final Maturity Date or (ii) redeemable at the option of the holder thereof or (b) contains any financial performance related covenants or
incurrence covenants which restrict the operations of the issuer thereof; provided that any preferred stock that such Person has the right or obligation to redeem at such time with Capital Stock that is not Redeemable Preferred Stock, shall not
constitute Redeemable Preferred Stock. 
  
 “Register” shall have the meaning provided in Section 12.15.

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

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

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 “Relevant Currency Equivalent” shall mean the Dollar Equivalent, the Canadian Dollar Equivalent, the Euro
Equivalent, the Pounds Sterling Equivalent or the Swiss Franc Equivalent. 
  
 “Replaced Lender” shall have
the meaning provided in Section 1.14. 
  
 “Replacement Lender” shall have the meaning provided in Section
1.14. 
  
 “Reply Date” shall have the meaning specified in Section 1.04(a). 
  
 “Required Lenders” shall mean at any time Non-Defaulting Lenders having at least a majority of the aggregate Commitments of all
Non-Defaulting Lenders; provided that if the Total Commitment has been terminated, then the Required Lenders shall mean Lenders whose outstanding Loans equal or exceed a majority of the aggregate outstanding Loans at such time. 

 
 “Retroactive Period” shall have the meaning provided in Section 1.11. 
  
 “Revolving Loan” shall have the meaning specified in Section 1.01(a). 
  
 “Revolving/Term Note” shall have the meaning provided in Section 1.06(a). 
  
 “Section 4.04 Certificate” shall have the meaning provided in Section 4.04(b)(ii). 
  
 “Special Purpose Trust” shall mean a special purpose business trust established by the Company or any Subsidiary of which the Company or any Subsidiary will hold all the common securities,
which will be the issuer of Qualified Trust Preferred Securities, and which will loan to the Company or any Subsidiary (such loan being evidenced by the Debentures) the net proceeds of the issuance and sale of the Qualified Trust Preferred
Securities and common securities of such Special Purpose Trust. 
  
 “Spread” shall mean a percentage per
annum in excess of, or less than, an Interest Rate Basis. 
  
 “Spread Borrowing” shall mean a Competitive
Bid Borrowing with respect to which a Borrower has requested the Bidder Lenders to make Competitive Bid Loans at a Spread over or under a specified Interest Rate Basis. 
  
 “Stated Amount” shall mean at, any time, (i) if the Letter of Credit is denominated in Dollars, the maximum amount available to be drawn thereunder (regardless of
whether any conditions for drawing could then be met) and (ii) if the Letter of Credit is an Alternative Currency Letter of Credit, the Dollar Equivalent of the maximum amount available to be drawn under the Letter of Credit (regardless of whether
any conditions for drawing could then be met). 
  
 “Subsidiary” of any Person shall mean and include (i)
any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes
of such corporation shall have or might have voting power by reason
 
 

 - 53 - 

 
of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries and (ii) any partnership, association, joint venture or other entity in which
such Person directly or indirectly through Subsidiaries, has more than a 50% equity interest at the time. Unless otherwise expressly provided, all references herein to “Subsidiary” shall mean a Subsidiary of the Company. 

 
 “Swiss Franc Equivalent” shall mean, at any time for the determination thereof, the amount of Swiss Francs which
could be purchased with the amount of Dollars involved in such computation at the spot exchange rate therefor as quoted by JPMorgan Chase Bank 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. 
  
 “Swiss Francs” shall mean freely transferable lawful money of
Switzerland. 
  
 “Tax Refund” shall have the meaning provided in Section 4.4(d). 
  
 “Taxes” shall have the meaning provided in Section 4.04(a). 
  
 “TEG Letter” shall mean the letter dated as of the date hereof addressed to PartnerRe S.A. from the Administrative Agent setting forth the effective overall
interest rate in respect of the Loans to be made available to PartnerRe S.A. and the basis therefor. 
  
 “Term
Loans” shall mean each Revolving Loan that is converted into a term loan on the Commitment Expiration Date pursuant to Section 1.01(b). 
  
 “Total Commitment” shall mean, at any time, the sum of the Commitments of each of the Lenders at such time. 
  
 “Total Unutilized Commitment” shall mean, at any time, the Total Commitment at such time minus the sum of the aggregate outstanding Principal Amount of Loans at
such time and the Letter of Credit Outstandings at such time. 
  
 “Type” shall mean any type of Loan
determined with respect to the interest option applicable thereto. 
  
 “Unpaid Drawings” shall have the
meaning provided in Section 2.03(a). 
  
 “U.S. Borrower” shall mean a Borrower organized under the laws of
the United States. 
  
 “Utilization Fee” shall have the meaning provided for in Section 3.01(b).

  
 “Wholly-Owned Subsidiary” of any Person shall mean any other Person to the extent all of the capital
stock or other ownership interests in such other Person, other than directors’ qualifying shares, is owned directly or indirectly by such first Person. 
  
 “Written” or “in writing” shall mean any form of written communication or a communication by means of facsimile transmission, telegraph or cable. 
 

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SECTION 11.    The Administrative Agent. 
  
 11.01
Appointment.    The Lenders hereby designate JPMorgan Chase Bank as Administrative Agent (such term as used in this Section 11 to include JPMorgan Chase Bank, acting as Issuing Agent under this Agreement and each Letter of
Credit), to act as specified herein and in the other Credit Documents. Each Lender hereby irrevocably authorizes, and each holder of any Note by the acceptance of such Note shall be deemed irrevocably to authorize, the Administrative Agent to take
such action on its behalf under the provisions of this Agreement, the other Credit Documents and any other instruments and agreements referred to herein or therein and to exercise such powers and to perform such duties hereunder and thereunder as
are specifically delegated to or required of the Administrative Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The Agents may perform any of their duties hereunder by or through their respective
officers, directors, agents, employees or affiliates. 
  
 11.02 Nature of Duties.    The
Administrative Agent shall not have any duties or responsibilities except those expressly set forth in this Agreement and the other Credit Documents. Neither the Administrative Agent nor any of its respective officers, directors, agents, employees
or affiliates shall be liable for any action taken or omitted by them hereunder or under any other Credit Document or in connection herewith or therewith, unless caused by their gross negligence or willful misconduct. The duties of the
Administrative Agent shall be mechanical and administrative in nature; the Administrative Agent shall not have by reason of this Agreement or any other Credit Document a fiduciary relationship in respect of any Lender or the holder of any Note; and
nothing in this Agreement or any other Credit Document, expressed or implied, is intended to or shall be so construed as to impose upon either Agent any obligations in respect of this Agreement or any other Credit Document except as expressly set
forth herein or therein with respect to the Administrative Agent. 
  
 11.03 Lack of Reliance on the Administrative
Agent.    Independently and without reliance upon the Administrative Agent, each Lender and the holder of each Note, to the extent it deems appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of the Borrowers and their Subsidiaries in connection with the making and the continuance of the Loans and the taking or not taking of any action in connection herewith and (ii) its own appraisal
of the creditworthiness of the Borrowers and their Subsidiaries and, except as expressly provided in this Agreement, the Administrative Agent shall not have any duty or responsibility, either initially or on a continuing basis, to provide any Lender
or the holder of any Note with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter. The Administrative Agent shall not be responsible to any
Lender or the holder of any Note for any recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness,
validity, enforceability, perfection, collectibility, priority or sufficiency of this Agreement or any other Credit Document or the financial condition of the Borrowers and their Subsidiaries be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this Agreement or any other Credit Document, or the financial condition of the Borrowers and their Subsidiaries or the existence or possible existence of any Default or Event
of Default. 
 

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 11.04 Certain Rights of the Administrative
Agent.    If any Administrative Agent shall request instructions from the Required Lenders with respect to any act or action (including failure to act) in connection with this Agreement or any other Credit Document, the
Administrative Agent shall be entitled to refrain from such act or taking such action unless and until the Administrative Agent shall have received instructions from the Required Lenders; and the Administrative Agent shall not incur liability to any
Person by reason of so refraining. Without limiting the foregoing, neither any Lender nor the holder of any Note shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining
from acting hereunder or under any other Credit Document in accordance with the instructions of the Required Lenders. 
  
 11.05 Reliance.    The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype, facsimile
or telecopier message, cablegram, radiogram, order or other document or telephone message signed, sent or made by any Person that such Agent believed to be the proper Person, and, with respect to all legal matters pertaining to this Agreement and
any other Credit Document and its duties hereunder and thereunder, upon advice of counsel selected by the Administrative Agent. 
  
 11.06 Indemnification.    To the extent the Administrative Agent is not reimbursed and indemnified by the Borrowers, the Lenders will reimburse and indemnify the Administrative Agent, in proportion to their
respective “percentages” as used in determining the Required Lenders, for and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, costs, expenses or disbursements of whatsoever kind or
nature which may be imposed on, asserted against or incurred by the Administrative Agent in performing its respective duties hereunder or under any other Credit Document, in any way relating to or arising out of this Agreement or any other Credit
Document provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of
the Administrative Agent. 
  
 11.07 The Administrative Agent’s Individual
Capacities.    With respect to its obligation to make Loans under this Agreement, the Administrative Agent shall have the rights and powers specified herein for a “Lender” and may exercise the same rights and powers
as though it were not performing the duties specified herein; and the term “Lenders,” “Required Lenders,” “holders of Notes” or any similar terms shall, unless the context clearly otherwise indicates, include the
Administrative Agent in its individual capacities. The Administrative Agent may accept deposits from, lend money to, and generally engage in any kind of banking, trust or other business with each Borrower or any Affiliate of each Borrower as if they
were not performing the duties specified herein, and may accept fees and other consideration from each Borrower for services in connection with this Agreement and otherwise without having to account for the same to the Lenders. 

 
 11.08 Holders.    The Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes hereof unless and until a written notice of the assignment, transfer or endorsement thereof, as the case may be, shall have been filed with the Administrative Agent. Any request, authority or consent of any Person who, at
the time of mak-
 
 

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ing such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding on any subsequent holder, transferee, assignee or indorsee, as the case may be, of
such Note or of any Note or Notes issued in exchange therefor. 
  
 11.09 Resignation by the Administrative
Agent.    (a) The Administrative Agent may resign from the performance of all its functions and duties hereunder and/or under the other Credit Documents at any time by giving 15 Business Days’ prior written notice to the
Borrowers and the Lenders. Such resignation shall take effect upon (i) the appointment of a successor Administrative Agent pursuant to clauses (b) and (c) below or as otherwise provided below and (ii) notice by the Administrative Agent to each
beneficiary of each then outstanding Letter of Credit of the change in Administrative Agent. Upon the effectiveness of such resignation, the resigning Administrative Agent shall return to the Company a pro-rated portion of any administrative fee
that has been paid in advance for the period following the effectiveness of its resignation. 
  
 (b) Upon any such
notice of resignation, the Required Lenders shall appoint a successor Administrative Agent hereunder who shall be a Lender, commercial bank or trust company reasonably acceptable to the Company. 
  

(c) If a successor Administrative Agent shall not have been so appointed within such 15 Business Day period, the Administrative Agent, with the consent of the Company
shall then appoint a successor Administrative Agent who shall serve as Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided above. 
  
 
SECTION 12. Miscellaneous. 
  
 12.01 Payment of Expenses,
etc.    The Borrowers jointly and severally agree to: (i) pay all reasonable out-of-pocket costs and expenses (1) of the Administrative Agent and the Issuing Agent in connection with the negotiation, syndication, preparation,
execution, delivery and administration of the Credit Documents, Letters of Credit or the documents and instruments referred to therein and any amendment, waiver or consent relating thereto (including, without limitation, the reasonable fees and
disbursements of White & Case LLP and of consultants and advisors to the Administrative Agent and its counsel) and (2) of the Administrative Agent, the Issuing Agent and each of the Lenders in connection with the enforcement of the Credit
Documents, Letters of Credit or the documents and instruments referred to therein (including, without limitation, the reasonable fees and disbursements of counsel for each of the Lenders); (ii) pay and hold the Administrative Agent, the Issuing
Agent and each Lender harmless from and against any and all present and future stamp, VAT and other similar taxes with respect to the foregoing matters and/or fees and save each of the Lenders harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent attributable to such Lender) to pay such taxes; and (iii) indemnify each Lender (including in its capacity as an Administrative Agent and Issuing Agent), its officers,
directors, employees, representatives and agents from and hold each of them harmless against any and all losses, liabilities, claims, damages or expenses incurred by any of them as a result of, or arising out of, or in any way related to, or by
reason of, an investigation (other than an investigation commenced by such Lender), litigation or other proceeding (whether or not the Administrative

 

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Agent or any Lender is a party thereto and whether or not any such investigation, litigation or other proceeding is between or among the Administrative Agent, any Lender, or any other third
Person) related to the entering into and/or performance of any Credit Document, Letters of Credit or the use of the proceeds of any Loans hereunder or the consummation of any transactions contemplated in any Credit Document, and in each case,
including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation, litigation or other proceeding (but excluding any such losses, liabilities, claims, damages or expenses to the extent
incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified). All expenses paid by the Borrowers pursuant to this Section 12.01 shall be paid in the currency in which such expenses were incurred by the
Administrative Agent, Issuing Agent or Lenders, as the case may be. 
  
 12.02 Right of
Setoff.    In addition to any rights or remedies (including other rights of set off) which any Lender may have, now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon
the occurrence and continuance of an Event of Default, each Lender is hereby authorized at any time or from time to time, without presentment, demand, protest or other notice of any kind to any Borrower or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and apply any and all deposits in whatever currency (general or special, time or demand, provisional or final) at any time held and any other indebtedness at any time held or owing by such
Lender (including, without limitation, by branches and agencies of such Lender wherever located, but excluding any assets in securities custody accounts) to or for the credit or the account of any Borrower against and on account of the Obligations
and liabilities of any such Borrower, now or hereafter existing, to such Lender or any other Lender under this Agreement or under any of the other Credit Documents, including, without limitation, all interests in Obligations of any such Borrower
purchased by such Lender or any other Lender pursuant to Section 12.06(b), and all other claims of any nature or description arising out of or connected with this Agreement or any other Credit Document, irrespective of whether or not such Lender
shall have made any demand hereunder and although said Obligations, liabilities or claims, or any of them, shall be contingent or unmatured. Each Lender is hereby designated the agent of all other Lenders for purposes of effecting set off pursuant
to this Section 12.02. 
  
 12.03 Notices.    Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in writing (including telecopier or facsimile) and mailed, telecopied, faxed or delivered, if to a Borrower, at the address specified opposite its signature below or in the
other relevant Credit Documents, as the case may be; if to any Lender or the Administrative Agent, at its address specified for such Lender or the Administrative Agent on Annex II hereto; or, at such other address as shall be designated by any party
in a written notice to the other parties hereto. All such notices and communications shall be mailed, telecopied or sent by overnight courier, and shall be effective when received. 
  
 12.04 Benefit of Agreement.    (a) This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto, provided that no Borrower may assign or transfer any of its rights or obligations hereunder without the prior written consent of the Lenders. Each Lender may, without the consent of the Borrowers, at any
time grant participations in any of its rights hereunder or under any of the Notes to any Person, provided that (x) in the case of any such participation, the
 
 

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participant shall not have any rights under this Agreement or any of the other Credit Documents (the participant’s rights against such Lender in respect of such participation to be those set
forth in the agreement executed by such Lender in favor of the participant relating thereto) and all amounts payable by the Borrowers hereunder shall be determined as if such Lender had not sold such participation, except that the participant shall
be entitled to the benefits of Sections 1.11 and 4.04 of this Agreement to the extent that such Lender would be entitled to such benefits if the participation had not been entered into or sold and (y) no Lender shall transfer, grant or assign any
participation under which the participant shall have rights to approve any amendment to or waiver of this Agreement or any other Credit Document except to the extent such amendment or waiver would extend the final scheduled maturity of any Loan or
Note in which such participant is participating, or reduce the rate or extend the time of payment of interest or Fees thereon (except in connection with a waiver of the applicability of any post-default increase in interest rates), or reduce the
principal amount thereof, or increase such participant’s participating interest in any Commitment over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the
Total Commitment, or a mandatory prepayment, shall not constitute a change in the terms of any Commitment). 
  
 (b)
Notwithstanding the foregoing, (x) any Lender may assign all or a portion of and its rights and obligations hereunder to another Lender (or an Affiliate of such assigning Lender), and (y) with the consent of the Administrative Agent and, so long as
no Default or Event of Default exists, the Company (which consent shall not be unreasonably withheld), any Lender may assign all or a portion of its rights and obligations hereunder to one or more Persons. No assignment pursuant to the immediately
preceding sentence by a Lender (or by Lenders which are Affiliates of each other) shall to the extent such assignment represents an assignment to an institution other than one or more Lenders hereunder (or to an Affiliate of an assigning Lender), be
in an aggregate amount less than $5,000,000 unless all of the rights and obligations of the assigning Lender (or group of Lenders which are Affiliates) is so assigned and no assignment shall be effective until all of the then outstanding Letters of
Credit are returned by each respective beneficiary to the Issuing Agent for cancellation in exchange for new or amended Letters of Credit which give effect to such assignment (it being understood and agreed that if the beneficiaries of all then
outstanding Letters of Credit do not consent to such amendment or exchange, such assignment cannot occur). If any Lender so sells or assigns all or a part of its rights hereunder or under the Notes, any reference in this Agreement or the Notes to
such assigning Lender shall thereafter refer to such Lender and to the respective assignee to the extent of their respective interests and the respective assignee shall have, to the extent of such assignment (unless otherwise provided therein), the
same rights and benefits as it would if it were such assigning Lender. Each assignment pursuant to this Section 12.04(b) shall be effected by the assigning Lender and the assignee Lender executing an Assignment Agreement (appropriately completed).
At the time of any such assignment, (i) either the assigning or the assignee Lender shall pay to the Administrative Agent a nonrefundable assignment fee of $3,500, (ii) Annex I shall be deemed to be amended to reflect the Commitment of the
respective assignee (which shall result in a direct reduction to the Commitment of the assigning Lender) and of the other Lenders, (iii) the Borrowers at such time will issue new Notes to the respective assignee and to the assigning Lender in
conformity with the requirements of Section 1.06 and (iv) all then outstanding Letters of Credit (if the beneficiaries thereof have agreed) shall be amended or returned to the Issuing Agent for cancellation and reissued to reflect such assignment.
To the extent any assignment pursuant to this Section 12.04(b) is to a Person which is not already a
 
 

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Lender hereunder and which is not a United States Person (as such term is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes, the respective assignee Lender shall provide
to the Company and the Administrative Agent the appropriate Internal Revenue Service Forms (and, if applicable, a Section 4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent that an assignment of all or any portion of a
Lender’s Commitments and related outstanding obligations pursuant to this Section 12.04(b) would, at the time of such assignment, result in increased costs under Section 1.11 or 4.04 from those being charged by the respective assigning bank
prior to such assignment, then the Borrowers shall not be obligated to pay such increased costs (although the Borrowers shall be obligated to pay any other increased costs of the type described above resulting from changes specified in said Section
1.11 or 4.04 occurring after the date of the respective assignment). Each Lender and each of the Borrowers agree to execute such documents (including without limitation amendments to this Agreement and the other Credit Documents) as shall be
necessary to effect the foregoing. Nothing in this clause (b) shall prevent or prohibit any Lender from pledging its Notes or Loans to a Federal Reserve Bank in support of borrowings made by such Lender from such Federal Reserve Bank. 

 
 (c) Notwithstanding any other provisions of this Section 12.04, no transfer or assignment of the interests or obligations of
any Lender hereunder or any grant of participation therein shall be permitted if such transfer, assignment or grant would require any Borrower to file a registration statement with the Securities and Exchange Commission or to qualify the Loans under
the “Blue Sky” laws of any State. 
  
 12.05 No Waiver; Remedies
Cumulative.    No failure or delay on the part of any Administrative Agent or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights
and remedies herein expressly provided are cumulative and not exclusive of any rights or remedies which any Agent or any Lender would otherwise have. 
  
 12.06 Payments Pro Rata.    (a) The Administrative Agent agrees that promptly after its receipt of each payment from or on behalf of each Borrower in respect of any
Obligations of such Borrower hereunder, it shall distribute such payment to the Lenders (other than any Lender that has expressly waived its right to receive its pro rata share thereof) pro rata based upon their respective shares, if
any, of the Obligations with respect to which such payment was received. 
  
 (b) Each of the Lenders agrees that, if
it should receive any amount hereunder (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or banker’s lien, by counterclaim or cross action, by the enforcement of any right under the Credit
Documents, or otherwise) which is applicable to the payment of the principal of, or interest on, the Loans or Fees, of a sum which with respect to the related sum or sums received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such Obligation then owed and due to all of the Lenders immediately prior to such receipt, then such Lender receiving such excess payment shall purchase for cash without recourse or
warranty from the other Lenders an interest in the Obligations of the respective Borrower to such Lenders in such amount as shall result in a
 
 

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proportional participation by all of the Lenders in such amount, provided that if all or any portion of such excess amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but without interest. 
  
 (c)
Notwithstanding anything to the contrary contained herein, the provisions of the preceding Sections 12.06(a) and (b) shall be subject to the express provisions of this Agreement which require, or permit, differing payments to be made to
Non-Defaulting Lenders as opposed to Defaulting Lenders. 
  
 12.07 Calculations;
Computations.    (a) The financial statements to be furnished to the Lenders pursuant hereto shall be made and prepared in conformity with GAAP, consistently applied throughout the periods involved (except as set forth in the
notes thereto or as otherwise disclosed in writing by the Borrowers to the Lenders and with respect to any interim financial statements, subject to changes resulting from audit and normal year-end audit adjustments), provided that (x) except
as otherwise specifically provided herein, all computations determining compliance with Sections 8.10 and 8.11, including definitions used therein, shall utilize accounting principles and policies in effect at the time of the preparation of, and in
conformity with those used to prepare, the December 31, 2001 financial statements delivered to the Lenders pursuant to Section 6.04(a) and (y) if at any time the computations determining compliance with Sections 8.10 and 8.11 utilize accounting
principles different from those utilized in the financial statements furnished to the Lenders, such financial statements shall be accompanied by reconciliation work-sheets. 
  
 (b) All computations of interest and Fees hereunder shall be made on the actual number of days elapsed over a year of 360 days (365-366 days for interest on Base Rate Loans
when the Base Rate is based on the Prime Lending Rate). 
  
 (c) For purposes of this Agreement, the Dollar Equivalent
of each Loan that is an Alternate Currency Loan and the Dollar Equivalent of the Stated Amount of each Letter of Credit that is an Alternate Currency Letter of Credit shall be calculated on the date when any such Loan is made, such Letter of Credit
is issued, on the first Business Day of each month and at such other times as designated by the Administrative Agent. Such Dollar Equivalent shall remain in effect until the same is recalculated by the Administrative Agent as provided above and
notice of such recalculation is received by the Borrowers, it being understood that until such notice of such recalculation is received, the Dollar Equivalent shall be that Dollar Equivalent as last reported to the Borrowers by the Administrative
Agent. The Administrative Agent shall promptly notify the Borrowers and the Lenders of each such determination of the Dollar Equivalent. 
  
 12.08 Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial.    (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding with respect to this Agreement or any other Credit Document may be brought in the courts of the State of New
York or of the United States for the Southern District of New York, and, by execution and delivery of this Agreement, each Borrower hereby irrevocably accepts for itself and in respect of its
 
 

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property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each Borrower further irrevocably consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to it, to the extent located outside New York City, or by hand, to the extent located within New York City, at its address for notices
pursuant to Section 12.03, such service to become effective 30 days after such mailing. Nothing herein shall affect the right of the Administrative Agent or any Lender to serve process in any manner permitted by law or to commence legal proceedings
or otherwise proceed against each Borrower in any other jurisdiction. 
  
 (b) Each Borrower hereby irrevocably and
unconditionally waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Agreement or any other Credit Document brought in the courts
referred to in clause (a) above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. 
  
 (c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 
  
 12.09 Counterparts.    This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with the Company and the Administrative Agent.

  
 12.10 Headings Descriptive.    The headings of the several sections and subsections of
this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. 
  
 12.11 Amendment or Waiver.    Neither this Agreement nor any other Credit Document nor any terms hereof or thereof may be changed, waived, discharged or terminated unless
such change, waiver, discharge or termination is in writing signed by the Borrowers and the Required Lenders, provided that no such change, waiver, discharge or termination shall, without the consent of each Lender (other than a Defaulting Lender)
directly affected thereby, (i) extend the Final Maturity Date or reduce the rate or extend the time of payment of interest (other than as a result of waiving the applicability of any post-default increase in interest rates) or Fees or other amounts
payable hereunder, or reduce the principal amount thereof, or increase the Commitment of any Lender over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default shall not constitute a change in the
terms of any Commitment of any Lender), (ii) amend, modify or waive any provision of this Section 12.11, (iii) reduce the percentage specified in Section 1.16(e), or reduce the percentage specified in, or (except to give effect to any additional
facilities hereunder) otherwise modify, the definition of Required Lenders, (iv) release the Company from its obligations under Company Guaranty or (v)
 
 

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consent to the assignment or transfer by each Borrower of any of its rights and obligations under this Agreement. 
  
 12.12 Survival.    All indemnities set forth herein including, without limitation, in Section 1.11, 1.12, 4.04, 12.01 or 12.16 shall survive the
execution and delivery of this Agreement and the making and repayment of the Loans. 
  
 12.13 Domicile of
Loans.    Each Lender may transfer and carry its Loans at, to or for the account of any branch office, Subsidiary or affiliate of such Lender, provided that the Borrowers shall not be responsible for costs arising under
Section 1.11 or 4.04 resulting from any such transfer (other than a transfer pursuant to Section 1.13 or 1.14) to the extent not otherwise applicable to such Lender prior to such transfer. 
  
 12.14 Confidentiality.    Subject to Section 12.04, the Lenders shall hold all non-public information obtained pursuant to the requirements of
this Agreement in accordance with its customary procedure for handling confidential information of this nature and in accordance with safe and sound banking practices and in any event may make disclosure to its Affiliates, employees, auditors,
advisors or counsel or as reasonably required by any bona fide transferee or participant in connection with the contemplated transfer of any Loans or participation therein (so long as such transferee or participant agrees to be bound
by the provisions of this Section 12.14) or as required or requested by any governmental agency or representative thereof or pursuant to legal process, provided that, unless specifically prohibited by applicable law or court order, each Lender shall
notify the Company of any request by any governmental agency or representative thereof (other than any such request in connection with an examination of the financial condition of such Lender by such governmental agency) for disclosure of any such
non-public information prior to disclosure of such information, and provided further that in no event shall any Lender be obligated or required to return any materials furnished by the Company or any of its Subsidiaries. 
  
 12.15 Registry.    Each Borrower hereby designates the Administrative Agent to serve as the Borrower’s
agent, solely for purposes of this Section 12.15, to maintain a register (the “Register”) on which it will record the Commitments from time to time of each of the Lenders, the Loans made by each of the Lenders and each repayment in respect
of the principal amount of the Loans of each Lender. Failure to make any such recordation, or any error in such recordation shall not affect the Borrower’s obligations in respect of such Loans. With respect to any Lender, the transfer of the
Commitments of such Lender and the rights to the principal of, and interest on, any Loan made pursuant to such Commitments shall not be effective until such transfer is recorded on the Register maintained by the Administrative Agent with respect to
ownership of such Commitments and Loans and prior to such recordation all amounts owing to the transferor with respect to such Commitments and Loans shall remain owing to the transferor. The registration of assignment or transfer of all or part of
any Commitments and Loans shall be recorded by the Administrative Agent on the Register only upon the acceptance by the Administrative Agent of a properly executed and delivered Assignment and Assumption Agreement pursuant to Section 12.04(b).
Coincident with the delivery of such an Assignment and Assumption Agreement to the Administrative Agent for acceptance and registration of assignment or transfer of all or part of a Loan, or as soon thereafter as practicable, the assigning or
transferor Lender shall surrender the Note evidencing such Loan, and thereupon one or more
 
 

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new Notes in the same aggregate principal amount shall be issued to the assigning or transferor Lender and/or the new Lender. The Borrower agrees to indemnify the Administrative Agent from and
against any and all losses, claims, damages and liabilities of whatsoever nature which may be imposed on, asserted against or incurred by the Administrative Agent in performing its duties under this Section 12.15. 
  
 12.16 Judgment Currency.    (a) The Borrowers’ obligations hereunder and under the other Credit Documents
to make payments in the applicable Approved Currency (pursuant to such Obligation, the “Obligation Currency”) shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any
currency other than the Obligation Currency, except to the extent that such tender or recovery results in the effective receipt by the Administrative Agent or the respective Lender of the full amount of the Obligation Currency expressed to be
payable to the Administrative Agent or such Lender under this Agreement or the other Credit Documents. If, for the purpose of obtaining or enforcing judgment against each Borrowers in any court or in any jurisdiction, it becomes necessary to convert
into or from any currency other than the Obligation Currency (such other currency being hereinafter referred to as the “Judgment Currency”) an amount due in the Obligation Currency, the conversion shall be made at the Relevant Currency
Equivalent, and, in the case of other currencies, the rate of exchange (as quoted by the Administrative Agent or if the Administrative Agent does not quote a rate of exchange on such currency, by a known dealer in such currency designated by the
Administrative Agent) determined, in each case, as of the Business Day immediately preceding the day on which the judgment is given (such Business Day being hereinafter referred to as the “Judgment Currency Conversion Date”). 

 
 (b) If there is a change in the rate of exchange prevailing between the Judgment Currency Conversion Date and the date of
actual payment of the amount due, the Borrowers covenant and agree to pay, or cause to be paid, such additional amounts, if any (but in any event not a lesser amount) as may be necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial award at the rate of
exchange prevailing on the Judgment Currency Conversion Date. 
  
 (c) For purposes of determining the Relevant
Currency Equivalent or any other rate of exchange for this Section, such amounts shall include any premium and costs payable in connection with the purchase of the Obligation Currency. 
  
 12.17 Euro.    (a) If at any time that an Alternate Currency Loan is outstanding, the relevant Alternate Currency is fully replaced as the lawful
currency of the country that issued such Alternate Currency (the “Issuing Country”) by the Euro so that all payments are to be made in the Issuing Country in Euros and not in the Alternate Currency previously the lawful currency of such
country, then such Alternate Currency Loan shall be automatically converted into a Loan denominated in Euros in a principal amount equal to the amount of Euros into which the principal amount of such Alternate Currency Loan would be converted
pursuant to the EMU Legislation and thereafter no further Loans will be available in such Alternate Currency, with the basis of accrual of interest, notices requirements and payment offices with respect to such con-
 
 

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verted Loans to be that consistent with the convention and practices in the London interbank market for Euro denominated Loans. 
  
 (b) The applicable Borrowers shall from time to time, at the request of any Lender, pay to such Lender the amount of any losses, damages, liabilities, claims, reduction in
yield, additional expense, increased cost, reduction in any amount payable, reduction in the effective return of its capital, the decrease or delay in the payment of interest or any other return forgone by such Lender or its affiliates as a result
of the tax or currency exchange resulting from the introduction, changeover to or operation of the Euro in any applicable nation or eurocurrency market. 
  
 12.18 Effective Overall Rate.    In accordance with Article L 313-1 of the Code de la Consommation of the French Republic (former law no 66-1010 of December 28, 1996)
and with Decree no 85-944 of September 4, 1985, an estimate of the Effective Overall Rate of each Loan to be made to PartnerRe S.A. is set forth in the TEG Letter, which is incorporated herein by reference and forms part of this Agreement.

  
 
SECTION 13. Company Guaranty. 
  
 13.01 The Guaranty.    In
order to induce the Lenders to enter into this Agreement and to extend credit hereunder and in recognition of the direct benefits to be received by the Company from the proceeds of the Loans and the issuance of the Letters of Credit, the Company
hereby agrees with the Lenders as follows: the Company hereby unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, the full and prompt payment when due, whether upon maturity, acceleration or otherwise, of any and
all of the Guaranteed Obligations of each Designated Subsidiary Borrower to the Guaranteed Creditors. If any or all of the Guaranteed Obligations of any Designated Subsidiary Borrower to the Guaranteed Creditors becomes due and payable hereunder,
the Company unconditionally promises to pay such indebtedness to the Guaranteed Creditors, or order, on demand, together with any and all expenses which may be incurred by the Guaranteed Creditors in collecting any of the Guaranteed Obligations.
This Guaranty is a guaranty of payment and not of collection. If a claim is ever made upon any Guaranteed Creditor for repayment or recovery of any amount or amounts received in payment or on account of any of the Guaranteed Obligations and any of
the aforesaid payees repays all or part of said amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over such payee or any of its property or (ii) any settlement or compromise of any such
claim effected by such payee with any such claimant, then and in such event the Company agrees that any such judgment, decree, order, settlement or compromise shall be binding upon the Company, notwithstanding any revocation of this Guaranty or any
other instrument evidencing any liability of each Designated Subsidiary Borrower, and the Company shall be and remain liable to the aforesaid payees hereunder for the amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee. 
  
 13.02 Bankruptcy.    Additionally, the
Company unconditionally and irrevocably guarantees the payment of any and all of the Guaranteed Obligations of each Designated Subsidiary Borrower hereunder to the Guaranteed Creditors whether or not due or payable by each Designated Subsidiary
Borrower upon the occurrence of any of the events specified in

 

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Section 9.01(g) and Section 9.01(h) with respect to such Designated Subsidiary Borrower, and unconditionally promises to pay such indebtedness to the Guaranteed Creditors, or order, on demand, in
lawful money of the United States. 
  
 13.03 Nature of Liability.    The liability of the
Company hereunder is exclusive and independent of any security for or other guaranty of the Guaranteed Obligations of each Designated Subsidiary Borrower whether executed by the Company, any other guarantor or by any other party, and the liability
of the Company hereunder is not affected or impaired by (a) any direction as to application of payment by each Designated Subsidiary Borrower or by any other party (other than a direction by the Guaranteed Creditor receiving such payment), or (b)
any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the Guaranteed Obligations of each Designated Subsidiary Borrower, or (c) any payment on or in reduction of any such other guaranty
or undertaking, or (d) any dissolution, termination or increase, decrease or change in personnel by each Designated Subsidiary Borrower, or (e) any payment made to the Guaranteed Creditors on the Guaranteed Obligations which any such Guaranteed
Creditor repays to each Designated Subsidiary Borrower pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and the Company waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding or (f) any action or inaction of the type described in Section 13.05. 
  
 13.04 Independent Obligation.    The obligations of the Company under this Section 13 are independent of the obligations of any other guarantor, any other party or each Designated Subsidiary Borrower, and a
separate action or actions may be brought and prosecuted against the Company whether or not action is brought against any other guarantor, any other party or each Designated Subsidiary Borrower and whether or not any other guarantor, any other party
or each Designated Subsidiary Borrower be joined in any such action or actions. The Company waives, to the full extent permitted by law, the benefit of any statute of limitations affecting its liability under this Section 13 or the enforcement
thereof. Any payment by a Designated Subsidiary Borrower or other circumstance which operates to toll any statute of limitations as to a Designated Subsidiary Borrower shall operate to toll the statute of limitations as to the Company. 

 
 13.05 Authorization.    The obligations of the Company under this Section 13 shall be unconditional
and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by any action taken by any Guaranteed Creditor to: 
  
 (a) change the manner, place or terms of payment of, and/or change or extend the time of payment of, renew, increase, accelerate or alter, any of the
Guaranteed Obligations (including any increase or decrease in the rate of interest thereon), any security therefor, or any liability incurred directly or indirectly in respect thereof, and the Guaranty herein made shall apply to the Guaranteed
Obligations as so changed, extended, renewed or altered; 
  
 (b) take and hold security for the
payment of the Guaranteed Obligations and sell, exchange, release, impair, surrender, realize upon or otherwise deal with in any
 
 

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manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any liabilities (including any of those
hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset thereagainst; 
  
 (c) exercise or refrain from exercising any rights against each Designated Subsidiary Borrower or others or otherwise act or refrain from acting; 
  
 (d) release or substitute any one or more endorsers, guarantors, each Designated Subsidiary Borrower or other obligors; 
  
 (e) settle or compromise any of the Guaranteed Obligations, any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of each Designated Subsidiary Borrower to its creditors other
than the Guaranteed Creditors; 
  
 (f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of each Designated Subsidiary Borrower to the Guaranteed Creditors 
  
 regardless of what liability or liabilities of each Designated Subsidiary Borrower remain unpaid; 
  
 (g) consent to or waive any breach of, or any act, omission or default under, this Agreement or any other Credit Document or any of the instruments or agreements referred to herein or therein, or otherwise amend, modify or supplement
this Agreement, any other Credit Document or any of such other instruments or agreements; and/or 
  
 (h) take any other action which would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge of the Company from its liabilities under this Guaranty. 
  
 13.06 Reliance.    It is not necessary for the Guaranteed Creditors to inquire into the capacity or powers of
each Designated Subsidiary Borrower or the officers, directors, partners or agents acting or purporting to act on their behalf, and any Guaranteed Obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed
hereunder. 
  
 13.07 Subordination.    Any indebtedness of each Designated Subsidiary
Borrower now or hereafter owing to the Company is hereby subordinated to the Guaranteed Obligations of each Designated Subsidiary Borrower owing to the Guaranteed Creditors; and if the Administrative Agent so requests at a time when an Event of
Default exists, no Designated Subsidiary Borrower shall make, or be permitted to make, any payment to the Company in respect of such indebtedness owed to the Company, but without affecting or impairing in any manner the liability of the Company
under the other provisions of this Guaranty. Prior to the transfer by the Company of any note or negotiable instrument evidencing any of the indebtedness of each Designated Subsidiary Borrower to the Company, the Company shall mark such note or
negotiable instrument with a legend that the same is subject to this subordination. Without limiting the generality of the foregoing, the Company hereby agrees with the Guaranteed 
 

 - 67 - 

 Creditors that it will not exercise any right of subrogation which it may at any time otherwise have as a result of this Guaranty (whether
contractual, under Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed Obligations have been irrevocably paid in full in cash. 
  
 13.08 Waiver.    (a) The Company waives any right (except as shall be required by applicable statute and cannot be waived) to require any Guaranteed Creditor to (i) proceed
against each Designated Subsidiary Borrower, any other guarantor or any other party, (ii) proceed against or exhaust any security held from each Designated Subsidiary Borrower, any other guarantor or any other party or (iii) pursue any other remedy
in any Guaranteed Creditor’s power whatsoever. The Company waives any defense based on or arising out of any defense of each Designated Subsidiary Borrower, any other guarantor or any other party, other than payment in full of the Guaranteed
Obligations, based on or arising out of the disability of each Designated Subsidiary Borrower, any other guarantor or any other party, or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from
any cause of the liability of each Designated Subsidiary Borrower other than payment in full of the Guaranteed Obligations. The Guaranteed Creditors may, at their election, foreclose on any security held by the Administrative Agent or any other
Guaranteed Creditor by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the Guaranteed
Creditors may have against the Designated Subsidiary Borrower or any other party, or any security, without affecting or impairing in any way the liability of the Company hereunder except to the extent the Guaranteed Obligations have been paid. The
Company waives any defense arising out of any such election by the Guaranteed Creditors, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of the Company against each
Designated Subsidiary Borrower or any other party or any security. 
  
 (b) The Company waives all presentments,
demands for performance, protests and notices, including, without limitation, notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of this Guaranty, and notices of the existence, creation or incurring of new or
additional Guaranteed Obligations. The Company assumes all responsibility for being and keeping itself informed of each Designated Subsidiary Borrower’s financial condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks which the Company assumes and incurs hereunder, and agrees that the Guaranteed Creditors shall have no duty to advise the Company of information known to them
regarding such circumstances or risks. 
  
 The Company warrants and agrees that each of the waivers set forth above is made with full
knowledge of its significance and consequences, and such waivers shall be effective to the maximum extent permitted by law. 
  
 * * * 
  
  
 

 - 68 - 

 IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and
delivered as of the date first above written. 
  
 
	 PartnerRe Ltd.
 Chesney House
 96 Pitts Bay Road
 Pembroke HM 08
 Bermuda
 Attention: Harold Hoeg
 	 	 PARTNERRE LTD.,
     as a Borrower
 
	 	 By
 	 	 /s/ Patrick A. Thiele
 

	 	  	 	 Name: Patrick A. Thiele
 Title:
President & Chief Executive Officer
 

 
  
 With a copy to: 
  
 
	 PartnerRe Ltd.
 Chesney House
 96 Pitts Bay Road
 Pembroke HM 08
 Bermuda
 Attention: Amanda Sodergren
 	 	  
	 	  	 	  
	 	  	 	  

 
  
  
 
	 Partner Reinsurance Company Ltd.
 Chesney House
 96 Pitts Bay Road
 Pembroke HM 08
 Bermuda

Attention: Harold Hoeg
  
 with a copy to:
  
 PartnerRe Ltd.
 Chesney House
 96 Pitts Bay Road
 Pembroke HM 08
 Bermuda
 Attention: Amanda Sodergren
 	 	 PARTNER REINSURANCE COMPANY LTD.,
     as a
Borrower
  
 
	 	 By
 	 	 /s/ Patrick A. Thiele
 

	 	  	 	 Name: Patrick A. Thiele
 Title:
President & Chief Executive Officer
 
	 	  	 	  
	 	  	 	  
	 	  	 	  
	 	  	 	  
	 	  	 	  
	 	  	 	  
	 	  	 	  
	 	  	 	  

 
  

  
 
	 PartnerRe S.A.
 153, rue de Courcelles
 75817 Paris, Cedex 17
 Tel: 33(0)1 44 01 17 17
 Fax: 33(0)1
44 01 17 80
 Attention: Antoine Pin
 	 	 PARTNERRE S.A.,
     as a Borrower
 
	 	 By
 	 	 /s/ Graham Dimmock 
 

	 	  	 	 Name: Graham Dimmock 
 Title:
Chief Executive Officer
 
	 	  	 	  

 
  
 
	 Partner Reinsurance Company of the U.S.
 1 Greenwich Plaza

Greenwich, CT 06830
 Tel: (203) 485-4200
 Fax:
(203) 485-4300
 Attention: John B. Wong
  
 with a copy
to
  
 Partner Reinsurance Company of the U.S.
 1 Greenwich
Plaza
 Greenwich, CT 06830
 Attention: Cathy A. Hauck
 	 	 PARTNER REINSURANCE COMPANY OF THE U.S.,
     as a
Borrower
 
	 	 By
 	 	 /s/ John N. Adimari 
 

	 	  	 	 Name: John N. Adimari
 Title:
Executive Vice President & Chief Financial Officer
 
	 	  	 	  
	 	 By
 	 	 /s/ Cathy A. Hauck
 

	 	  	 	 Name: Cathy A. Hauck
 Title:
Executive Vice President, General Counsel & Corporate Secretary
 
	 	  	 	  
	 	  	 	  

 
  
 
	 Partnerre Insurance Company of New York
 1 Greenwich Plaza

Greenwich, CT 06830
 Tel: (203) 485-4200
 Fax:
(203) 485-4300
 Attention: John B. Wong
  
 with a copy
to
  
 Partner Reinsurance Company of New York
 1 Greenwich
Plaza
 Greenwich, CT 06830
 Attention: Cathy A. Hauck
 	 	 PARTNER REINSURANCE COMPANY OF THE U.S.,
     as a
Borrower
 
	 	 By
 	 	 /s/ John N. Adimari 
 

	 	  	 	 Name: John N. Adimari
 Title:
Executive Vice President & Chief Financial Officer
 
	 	  	 	  
	 	 By
 	 	 /s/ Cathy A. Hauck
 

	 	  	 	 Name: Cathy A. Hauck
 Title:
Executive Vice President, General Counsel & Corporate Secretary
 
	 	  	 	  
	 	  	 	  
	 	  	 	  

 

 
	 JPMORGAN CHASE BANK,
     Individually, as Issuing Agent
and
     as Administrative Agent
 
	 
	 By
 	 	 /s/ Helen L. Newcomb
 

	  	 	 Name: Helen L. Newcomb
 Title:
Vice President
 

 

 
	 CREDIT SUISSE
 
	 
	 By
 	 	 /s/ Damien Hodel
 

	  	 	 Name: Damien Hodel
 Title: Vice
President
 
	 
	 By
 	 	 /s/ Ulrich Gasser
 

	  	 	 Name: Ulrich Gasser
 Title:
Vice President
 

 

 
	 COMMERZBANK AKTIENGESELLSCHAFT NEW YORK AND GRAND CAYMAN BRANCHES
 
	 
	 By
 	 	 /s/ Arndt E Bruns
 

	  	 	 Name: Arndt E. Bruns
 Title:
Assistant Vice President
 
	 
	 By
 	 	 /s/ Michael P. McCarthy
 

	  	 	 Name: Michael P. McCarthy
 Title: Vice President
 

 

 
	 BARCLAYS BANK PLC
 
	 
	 By
 	 	 /s/ Paul Johnson
 

	  	 	 Name: Paul Johnson
 Title:
Relationship Manager
 

 

 
	 THE BANK OF NOVA SCOTIA
 
	 
	 By
 	 	 /s/ D.N Gillespie
 

	  	 	 Name: D.N. Gillespie
 Title:
Managing Director
 

 

  
 
	 NATIONAL AUSTRALIA BANK LIMITED
 
	 
	 By
 	 	 /s/ Dennis Cogan
 

	  	 	 Name: Dennis Cogan
 Title:
Director
 

 

  
 
	 COMERICA BANK
 
	 
	 By
 	 	 /s/ Martin G. Ellis
 

	  	 	 Name: Martin G. Ellis
 Title:
Vice President
 

 

 
	 FLEET NATIONAL BANK
 
	 
	 By
 	 	 /s/ George Urban
 

	  	 	 Name: George Urban
 Title:
Portfolio Manager
 

 

  
 
	 STANDARD CHARTERED BANK
 
	 
	 By
 	 	 /s/ Robert Gilbert
 

	  	 	 Name: Robert Gilbert
 Title:
Senior Vice President
 
	 
	 By
 	 	 /s/ James F. Conti
 

	  	 	 Name: James F. Conti
 Title:
Vice President
 

 

  
 
	 CREDIT LYONNAIS NEW YORK BRANCH
 
	 
	 By
 	 	 /s/ Sebastion Rocco
 

	  	 	 Name: Sebastian Rocco
 Title:
Senior Vice President
 

 

  
 
	 HSBC BANK USA
 
	 
	 By
 	 	 /s/ Anthony C. Valencourt
 

	  	 	 Name: Anthony C. Valencourt
 Title: Head of Insurance, Corporate and Institutional Banking
 

 

  
 
	 STATE STREET BANK AND TRUST COMPANY
 
	 
	 By
 	 	 /s/ Edward M. Anderson
 

	  	 	 Name: Edward M. Anderson
 Title: Vice President
 

 

  
 
	 ABN AMRO BANK N.V.
 
	 
	 By
 	 	 /s/ Neil R. Stein
 

	  	 	 Name: Neil R. Stein
 Title:
Vice President
 
	 
	 By
 	 	 /s/ Nancy W. Lanzoni
 

	  	 	 Name: Nancy W. Lanzoni
 Title:
Group Vice President
 

 

  
 
	 MELLON BANK, N.A.
 
	 
	 By
 	 	 /s/ Maria E. Totin
 

	  	 	 Name: Maria E. Totin
 Title:
Vice President
 

 

  
 
	 WACHOVIA BANK N.A.,
     Individually and as Syndication
Agent
 
	 
	 By
 	 	 /s/ Thomas L/ Stichberry
 

	  	 	 Name: Thomas L. Stichberry
 Title: Managing Director
 

 

 
	 ING BANK N.V., LONDON BRANCH
 
	 
	 By
 	 	 /s/ Michael Sherman
 

	  	 	 Name: Michael Sharman
 Title:
Director
 
	 
	 By
 	 	 /s/ Paul Galpin
 

	  	 	 Name: Paul Galpin
 Title:
Managing Director
 

 

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

	  	 	 Name: Michael J. Gilligan
 Title: Director, Financial Institutions, USA G311
 
	 
	 By
 	 	 /s/ Matthew S.R. Tuck
 

	  	 	 Name: Matthew S.R. Tuck
 Title:
Vice President, Financial Institutions, USA T020
 

 

  
 
	 CANADIAN IMPERIAL BANK OF COMMERCE NEW YORK AGENCY
 
	 
	 By
 	 	 /s/ Nora Q. Catiis
 

	  	 	 Name: Nora Q. Catiis
 Title:
Authorized Signatory
 

 

 ANNEX I 
  
 COMMITMENTS 
  
 
	 Lender
 
	  	 Commitment
 

	 JPMorgan Chase Bank
 	  	 $
 	 44,000,000
 
	 Wachovia Bank N.A.
 	  	  
 	 42,000,000
 
	 Barclays Bank Plc
 	  	  
 	 42,000,000
 
	 Credit Suisse
 	  	  
 	 42,000,000
 
	 HSBC Bank USA
 	  	  
 	 42,000,000
 
	 ABN AMRO Bank N.V.
 	  	  
 	 34,000,000
 
	 Canadian Imperial Bank of Commerce New York Agency
 	  	  
 	 34,000,000
 
	 Credit Lyonnais New York Branch
 	  	  
 	 34,000,000
 
	 Commerzbank AG New York and Grand Cayman Branches
 	  	  
 	 34,000,000
 
	 The Bank of Nova Scotia
 	  	  
 	 34,000,000
 
	 ING Bank N.V., London Branch
 	  	  
 	 34,000,000
 
	 Lloyds TSB Bank Plc
 	  	  
 	 34,000,000
 
	 Comerica Bank
 	  	  
 	 25,000,000
 
	 Mellon Bank, N.A.
 	  	  
 	 25,000,000
 
	 Standard Chartered Bank
 	  	  
 	 25,000,000
 
	 Fleet National Bank
 	  	  
 	 25,000,000
 
	 National Australia Bank Ltd.
 	  	  
 	 25,000,000
 
	 State Street Bank and Trust Company
 	  	  
 	 25,000,000
 
	 Total:
 	  	  
 	 $600,000,000
 

 
  

 ANNEX II 
  
 LENDER ADDRESSES 
  
 
	 Barclays Bank Plc
 	 	 54 Lombard Street
 London, EC3V 9EX
 Attention: Paul Johnson
 Tel: 44-207-699-3121
 Fax: 44-207-699-2407

	  	 	  
	 HSBC Bank USA
 	 	 452 Fifth Avenue
 New York, New York 10018
 Attention: Nair Raghu
 Tel: 212-525-1039
 Fax:
212-525-8937
 
	  	 	  
	 Wachovia Bank N.A.
 	 	 301 South College Street, 5th Floor
 Charlotte, N.C. 28227
 Attention: Daniel Norton
 Tel: 704-374-4279
 Fax: 704-383-7611
 
	  	 	  
	 ABN AMRO Bank N.V.
 	 	 55 East 52nd
Street, 33rd Floor
 New York, NY
10055
 Attention: Neil Stein
 Tel: 212-409-1489
 Fax: 212-409-1718
 
	  	 	  
	 Canadian Imperial Bank of Commerce New York Agency
 	 	 425 Lexington Avenue, 8th Fl.
 New York, NY 10017
 Attention: Nora Q. Catiis
 Tel: 212-856-3587
 Fax: 212-856-3761
 
	  	 	  
	 Credit Suisse
 	 	 BACN 5
 Zurich, CH-8070
 Attention: Damian Hodel
 Tel: 411-333-2379
 

 
 

 (i) 

 
	 JPMorgan Chase Bank
 	 	 270 Park Avenue
 New York, NY 10017
 Attention: Helen Newcomb
 Tel: 212-270-3604
 Fax: 212-270-1063
 
	  	 	  
	 Comerica Bank
 	 	 One Detroit Center
 500 Woodward Ave., MC-3331
 Detroit, MI 48216
 Attention: Martin Ellis
 Tel:
313-222-9443
 Fax: 313-222-5466
 
	  	 	  
	 Commerzbank AG New York and
 Grand Cayman Branches
 	 	 2 World Financial Center
 New York, NY 10281-1050
 Attention: Arndt Bruns
 Tel: 212-266-7736
 Fax:
212-400-5773
 
	  	 	  
	 Credit Lyonnais New York Branch
 	 	 1301 Avenue of the Americas, 18th Floor
 New York, NY 10019
 Attention: Peter Rasmussen
 Tel: 212-261-7718
 Fax:
212-261-3438
 
	  	 	  
	 Fleet National Bank
 	 	 777 Main Street
 Hartford, CT 06115
 Attention: George Urban
 Tel: 860-952-7565
 Fax: 860-952-7604
 
	  	 	  
	 ING Bank N.V., London Branch
 	 	 60 London Wall, Insurance Banking Group
 London, EC2M 5TQ
 Attention: Mike Sharman
 Tel: 44-207-767-5904
 Fax:
44-207-767-7507
 
	  	 	  
	 Lloyds TSB Bank Plc
 	 	 1251 Avenue of the Americas, 39th Floor
 New York, NY 10020
 Attention: Pat Kilian
 Tel: 212-930-8914
 Fax: 212-930-5098
 

 
  
 

 (ii) 

 
	 Mellon Bank, N.A.
 	 	 One Mellon Center, Room 4401
 Pittsburgh, PA 15258-0001
 Attention: Maria Totin
 Tel: 412-236-1625
 Fax:
412-234-8087
 
	  	 	  
	 National Australia Bank Ltd.
 	 	 200 Park Avenue, 34th Floor
 New York, NY 10166
 Attention: Dennis Cogan
 Tel: 212-916-9574
 Fax: 212-983-7360
 
	  	 	  
	 The Bank of Nova Scotia
 	 	 1 Liberty Plaza, 26th Floor
 New York, NY 10006
 Attention: John Campbell
 Tel: 212-506-2257
 Fax: 212-506-6995
 
	  	 	  
	 Standard Chartered Bank
 	 	 1285 Avenue of the Americas
 New York, NY 10019
 Attention: Robert Gilbert
 Tel: 212-649-8223
 Fax:
212-649-7576
 
	  	 	  
	 State Street Bank and Trust Company
 	 	 Lafayette Corporate Center
 Boston, MA 02111
 Attention: Ed Anderson
 Tel: 617-662-3782
 Fax:
617-662-3778
 

 

  
 ANNEX III 
  
 SUBSIDIARIES 
  
 
	  	    	 % Beneficial
 Ownership by
 Immediate Parent
 
	  	 Jurisdiction
 of
 Incorporation
 

	 PartnerRe Ltd.
 	    	 —
 	  	 Bermuda
 
	 Partner Reinsurance Company Ltd.
 	    	 100
 	  	 Bermuda
 
	 PartnerRe Services Ltd.
 	    	 100
 	  	 Bermuda
 
	 PartnerRe UK Holdings Limited
 	    	 100
 	  	 United Kingdom
 
	 PartnerRe (Curacao) N.V
 	    	 100
 	  	 Netherlands Antilles
 
	 PartnerRe Holdings B.V
 	    	 100
 	  	 Netherlands
 
	 SAFR Holdings SA .
 	    	 100
 	  	 France
 
	 PartnerRe SA
 	    	 100
 	  	 France
 
	 PartnerRe U.S. Corporation
 	    	 100
 	  	 United States
 
	 Partner Reinsurance Company of the U.S
 	    	 100
 	  	 United States
 
	 PartnerRe Insurance Company of New York
 	    	 100
 	  	 United States
 
	 Transat Madison Corp
 	    	 100
 	  	 United States
 
	 PartnerRe Asset Management Corporation
 	    	 100
 	  	 United States
 
	 PartnerRe New Solutions Inc.
 	    	 100
 	  	 United States
 
	 PartnerRe Finance I Inc
 	    	 100
 	  	 United States
 
	 PartnerRe Capital Trust I
 	    	 100
 	  	 United States
 
	 PartnerRe Finance II Inc
 	    	 100
 	  	 United States
 
	 PartnerRe Capital Trust II
 	    	 100
 	  	 United States
 
	 PartnerRe Capital Trust III
 	    	 100
 	  	 United States
 
	 PartnerRe Group Services (HK) Limited
 	    	 100
 	  	 Hong Kong
 
	 Gesser SARL
 	    	 100
 	  	 France
 
	 SCI Francoreas
 	    	 100
 	  	 France
 
	 Coresa (1)
 	    	 100
 	  	 Luxembourg
 

 

 ANNEX IV 
  
 INDEBTEDNESS 
  
 (in US$ millions) 
  
 
	 Long term debt consisting of a fully collateralized fixed rate loan repayable in 2008.
 	  	 $
 	 220.0
 

 
  

 ANNEX V 
  
 LIENS 
  
 (in US$ millions) 
  
 
	 New York State Reg. 114 Trusts supporting reinsurance obligations to:
 	  	  	  
	 Unrelated third party U.S. ceding company clients
 	  	 $
 	 196.0
 
	 PartnerRe Ltd.’s wholly-owned U.S. reinsurance subsidiaries
 	  	  
 	 365.2
 
	 Invested assets pledged in favor of ceding company clients
 	  	  
 	 541.0
 
	 Statutory deposits held with U.S. state insurance regulators
 	  	  
 	 48.1
 
	 Collateral supporting long term debt (see Annex IV)
 	  	  
 	 258.6
 
	  	  	 
	 

	  	  	 $
 	 1,408.9
 
	  	  	 
	 

 
 

 - 95 -Prepared by R.R. Donnelley Financial -- Revolving Credit Agreement

 EXHIBIT 10.31 
  
 EXECUTION COPY 
  
  
 U.S. $300,000,000

  
  
 REVOLVING CREDIT AGREEMENT 
  
 Dated as of August 1, 2002 
  
  
 Among 
  
 AMBAC FINANCIAL GROUP, INC.

  
 and 
  
 AMBAC ASSURANCE CORPORATION, 
 as the Borrowers 
  

 
 and 
  
  
 CERTAIN COMMERCIAL LENDING INSTITUTIONS, 
 as Lenders 
  
 and 
  
 THE
BANK OF NEW YORK, 
 as the Syndication Agent 
  
 and 
  
 THE BANK OF NOVA SCOTIA, 
 as the Arranger and Administrative Agent 

 TABLE OF CONTENTS 
  
 
	  	  	  	  	 Page
 

	  
 ARTICLE I
 	  	  
	  	  	  
	 DEFINITIONS AND ACCOUNTING TERMS
 	  	  
	 
	 SECTION 1.01
 	  	 Certain Defined Terms
 	  	 1
 
	 
	 SECTION 1.02
 	  	 Computation of Time Periods
 	  	 11
 
	 
	 SECTION 1.03
 	  	 Accounting Terms
 	  	 11
 
	  	  	  
	 ARTICLE II
 	  	  
	  	  	  
	 AMOUNTS AND TERMS OF THE ADVANCES
 	  	  
	 
	 SECTION 2.01
 	  	 The Advances
 	  	 11
 
	 
	 SECTION 2.02
 	  	 Making the Advances
 	  	 12
 
	 
	 SECTION 2.03
 	  	 Fees
 	  	 13
 
	 
	 SECTION 2.04
 	  	 Termination or Reduction of the Commitments
 	  	 14
 
	 
	 SECTION 2.05
 	  	 Repayment
 	  	 14
 
	 
	 SECTION 2.06
 	  	 Interest
 	  	 14
 
	 
	 SECTION 2.07
 	  	 Interest Rate Determination
 	  	 15
 
	 
	 SECTION 2.08
 	  	 Optional Conversion of Advances
 	  	 15
 
	 
	 SECTION 2.09
 	  	 Optional Prepayments
 	  	 16
 
	 
	 SECTION 2.10
 	  	 Increased Costs
 	  	 16
 
	 
	 SECTION 2.11
 	  	 Illegality
 	  	 17
 
	 
	 SECTION 2.12
 	  	 Payments and Computations
 	  	 17
 
	 
	 SECTION 2.13
 	  	 Taxes
 	  	 18
 
	 
	 SECTION 2.14
 	  	 Sharing of Payments, Etc.
 	  	 21
 
	 
	 SECTION 2.15
 	  	 Use of Proceeds
 	  	 21
 
	 
	 SECTION 2.16
 	  	 Extension of Commitment Termination Date
 	  	 21
 
	 
	 SECTION 2.17
 	  	 Increase of Commitments
 	  	 22
 
	  	  	  
	 ARTICLE III
 	  	  
	  	  	  
	 CONDITIONS TO EFFECTIVENESS AND LENDING
 	  	  
	 
	 SECTION 3.01
 	  	 Conditions Precedent to Effectiveness of Section 2.01
 	  	 23
 
	 
	 SECTION 3.02
 	  	 Conditions Precedent to Each Borrowing
 	  	 25
 
	  	  	  
	 ARTICLE IV
 	  	  
	  	  	  
	 REPRESENTATIONS AND WARRANTIES
 	  	  
	 
	 SECTION 4.01
 	  	 Representations and Warranties of each Borrower
 	  	 25
 

 
  
 

 i 

 
	  	  	  	  	 Page
 

	  
 ARTICLE V
 	  	  
	  	  	  
	 COVENANTS OF THE BORROWERS
 	  	  
	 
	 SECTION 5.01
 	  	 Affirmative Covenants
 	  	 27
 
	 
	 SECTION 5.02
 	  	 Negative Covenants
 	  	 29
 
	 
	 SECTION 5.03
 	  	 Financial Covenants
 	  	 31
 
	  	  	  
	 ARTICLE VI
 	  	  
	  	  	  
	 EVENTS OF DEFAULT
 	  	  
	 
	 SECTION 6.01
 	  	 Events of Default
 	  	 31
 
	  	  	  
	 ARTICLE VII
 	  	  
	  	  	  
	 THE AGENTS
 	  	  
	 
	 SECTION 7.01
 	  	 Authorization and Action
 	  	 33
 
	 
	 SECTION 7.02
 	  	 Agents’ Reliance, Etc.
 	  	 33
 
	 
	 SECTION 7.03
 	  	 Agents and Affiliates
 	  	 34
 
	 
	 SECTION 7.04
 	  	 Lender Credit Decision
 	  	 34
 
	 
	 SECTION 7.05
 	  	 Indemnification
 	  	 34
 
	 
	 SECTION 7.06
 	  	 Successor
 	  	 35
 
	  	  	  
	 ARTICLE VIII
 	  	  
	  	  	  
	 MISCELLANEOUS
 	  	  
	 
	 SECTION 8.01
 	  	 Amendments, Etc.
 	  	 35
 
	 
	 SECTION 8.02
 	  	 Notices, Etc.
 	  	 36
 
	 
	 SECTION 8.03
 	  	 No Waiver; Remedies
 	  	 36
 
	 
	 SECTION 8.04
 	  	 Costs and Expenses
 	  	 36
 
	 
	 SECTION 8.05
 	  	 Right of Set-off
 	  	 37
 
	 
	 SECTION 8.06
 	  	 Binding Effect
 	  	 37
 
	 
	 SECTION 8.07
 	  	 Assignments and Participations
 	  	 37
 
	 
	 SECTION 8.08
 	  	 Confidentiality
 	  	 40
 
	 
	 SECTION 8.09
 	  	 Governing Law
 	  	 40
 
	 
	 SECTION 8.10
 	  	 Execution in Counterparts
 	  	 40
 
	 
	 SECTION 8.11
 	  	 Waiver of Jury Trial
 	  	 40
 
	 
	 SECTION 8.12
 	  	 Jurisdiction, Etc.
 	  	 40
 
	 
	 SECTION 8.13
 	  	 Nature of Obligations
 	  	 41
 

 
 

 ii 

  
 Exhibits 
  
 
	 
	 Exhibit A—Form of Promissory Note
 
	 
	 Exhibit B—Form of Notice of Borrowing
 
	 
	 Exhibit C—Form of Assignment and Acceptance
 
	 
	 Exhibit D—Form of Compliance Certificate
 
	 
	 Exhibit E—Form of Opinion of Anne G. Gill, First Vice President, Assistant General Counsel and
Secretary of Ambac Financial
 
	 
	 Exhibit F—Form of Opinion of Kevin J. Doyle, Managing Director and General Counsel of Ambac
Assurance
 
	 
	 Exhibit G—Form of Opinion of DeWitt, Ross & Stevens, S.C., Wisconsin Special Counsel to Ambac
Assurance
 
	 
	 Exhibit H—Form of Opinion of Shearman & Sterling, Special New York Counsel to the
Borrowers
 

 
  
  
 Schedules 
  
 Schedule I—List of Applicable Lending Offices 
  
 Schedule 4.01(h) – Contingent Liabilities 
  
 Schedule 5.02(a)—Ongoing Debt 
 

 iii 

  
 REVOLVING CREDIT AGREEMENT 
  
 Dated as of August 1, 2002 
  
 AMBAC FINANCIAL
GROUP, INC., a Delaware corporation (“Ambac Financial”), AMBAC ASSURANCE CORPORATION, a Wisconsin stock insurance corporation (“Ambac Assurance”; and, together with Ambac Financial, the
“Borrowers”), the banks, financial institutions and other institutional lenders as are or may become parties hereto (the “Lenders”), THE BANK OF NEW YORK (“BNY”), as syndication agent (the
“Syndication Agent”) and THE BANK OF NOVA SCOTIA (“BNS”), as administrative agent (the “Administrative Agent”) for the Lenders, agree as follows: 
  
 ARTICLE I 
  
 DEFINITIONS AND ACCOUNTING TERMS 
  
 SECTION 1.01    Certain Defined
Terms 
  
 As used in this Agreement, the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined): 
  
 “ABC
Securities” means securities issued by a Finance Trust representing an undivided beneficial interest in assets acquired by a Finance Trust from Ambac Assurance with the net proceeds of such issuance. 
  
 “Administrative Agent” has the meaning specified in the preamble. 
  
 “Administrative Agent’s Account” means the account of the Administrative Agent maintained by the
Administrative Agent at BNS, at One Liberty Plaza, New York, NY, ABA # 026-002-532, Attention: Loan Accounting—Marcial Samuels. 
  
 “Advance” means an advance by a Lender to either Borrower pursuant to Article II, and refers to a Base Rate Advance or a Eurodollar Rate Advance (each of which shall be a
“Type” of Advance). 
  
 “Affiliate” means, as to any Person, any
other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person or is a director or officer of such Person. For purposes of this definition, the term “control” (including the terms
“controlling”, “controlled by” and “under common control with”) of a Person means the possession, direct or indirect, of the power to vote 10% or more of the Voting Stock of such Person or to direct or cause the
direction of the management and policies of such Person, whether through the ownership of Voting Stock, by contract or otherwise. 
  
 “Agent” means, as the context may require, the Syndication Agent or the Administrative Agent and “Agents” means the Syndication Agent and the Administrative Agent.

  
 “Aleutian” means Aleutian Investments LLC, a
Delaware limited liability company. 
  
 “Ambac Assurance” has the meaning specified
in the preamble. 
  
 “Ambac Financial” has the meaning specified in the preamble.

  
 “Applicable Lending Office” means, with respect to each Lender, such
Lender’s Domestic Lending Office in the case of a Base Rate Advance and such Lender’s Eurodollar Lending Office in the case of a Eurodollar Rate Advance. 
  
 “Applicable Margin” means, as of any date, a percentage per annum determined by reference to the Financial Strength Rating in effect on
such date as set forth below under Column A if, on such date and after giving effect to any Borrowing and any repayment of Advances on such date, the aggregate principal amount of Advances made to the Borrowers and outstanding on such date is
$150,000,000 or less or under Column B if, on such date and after giving effect to any Borrowing and any repayment of Advances on such date, the aggregate principal amount of Advances made to the Borrower and outstanding on such date is greater than
$150,000,000: 
  
  
 
	 Financial
 Strength Rating
 S&P/Moody’s
 
	 	 Applicable Margin
 

	  	 	 A
 
	 	 B
 

	 Aaa/AAA or above
 	 	 .190%
 	 	 .240%
 
	 Aa1/AA+
 	 	 .310%
 	 	 .410%
 
	 Aa2/AA
 	 	 .380%
 	 	 .480%
 
	 Aa3/AA-
 	 	 .510%
 	 	 .610%
 
	 A+
 	 	 .910%
 	 	 1.010%  
 
	 A
 	 	 1.010%  
 	 	 1.110%  
 
	 A-  or lower
 	 	 1.110%  
 	 	   1.210%   
 
	  	 	 
	 	 

 
  
  
 “Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and an Eligible Assignee, and accepted by the Administrative Agent, in substantially the form of Exhibit C hereto. 

 
 “Base Rate” means a fluctuating interest rate per annum in effect from time to time, which
rate per annum shall at all times be equal to the higher of: 
  
 (a)    the base
rate of BNS, New York Agency, for U.S. dollars loans; and 
  
 (b)    the Federal
Funds Rate plus 0.5%. 
 

 2 

  
 “Base Rate Advance” means an Advance that bears
interest as provided in Section 2.06(a)(i). 
  
 “BNS” has the meaning specified in
the preamble. 
  
 “BNY” has the meaning specified in the preamble. 

 
 “Borrowing” means a borrowing consisting of Advances of the same Type made to a Borrower on
the same day by the Lenders. 
  
 “Business Day” means a day of the year on which
banks are not required or authorized by law to close in New York City and, if the applicable Business Day relates to any Eurodollar Rate Advances, on which dealings are carried on in the London interbank market. 
  
 “Code” means the Internal Revenue Code of 1986, as amended from time to time. 
  
 “Commitment” has the meaning specified in Section 2.01. 
  
 “Commitment Date” has the meaning specified in Section 2.17. 
  
 “Commitment Termination Date” means the earlier of (a) the date which is 364 days after the Effective
Date, as such date may be extended pursuant to Section 2.16, and (b) the date of termination in whole of the Commitments pursuant to Section 2.04 or 6.01. 
  
 “Compliance Certificate” means a certificate duly completed and executed by an Authorized Officer of Ambac Financial, substantially in the
form of Exhibit D hereto. 
  
 “Confidential Information” means written information
that either Borrower furnishes to either Agent or any Lender labeled or marked in a manner clearly deeming such information as confidential, but does not include any such information that is or becomes generally available to the public.

  
 “Consolidated” refers to the consolidation of accounts in accordance with GAAP.

  
 “Contingent Liability” means any agreement, undertaking or arrangement by which
any Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, adebtor, or otherwise to
assure a creditor against loss) the Indebtedness of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the shares of any other Person. The
amount of any Person’s obligation under any Contingent Liability at any time shall (subject to any limitation set forth therein) be deemed to be the outstanding amount at such time (or, except in the case of the Indebtedness or obligation
guaranteed thereby being unutilized credit lines for Derivative Transactions, if larger, the maximum amount) of the Indebtedness or obligation guaranteed thereby. 
  
 

 3 

  
 “Controlled Group” means all members of a
controlled group of corporations and all members of a controlled group of trades or businesses (whether or not incorporated) under common control which, together with either Borrower, are treated as a single employer under Section 414(b) or 414(c)
of the Internal Revenue Code or Section 4001 of ERISA. 
  
 “Convert”,
“Conversion” and “Converted” each refers to a conversion of Advances of one Type into Advances of the other Type pursuant to Section 2.07 or 2.08. 
  
 “Debt” of any Person means, without duplication, all Indebtedness of such Person of any type described in clause (a), (b) or (c) of the
definition of “Indebtedness” and all Contingent Liabilities of such Person in respect of any Indebtedness of any other Person of any such type. 
  
 “Declining Lender” has the meaning specified in Section 2.16. 
  
 “Default” means any Event of Default or any event that would constitute an Event of Default but for the requirement that notice be given or
time elapse or both. 
  
 “Derivative Transactions” means, with respect to any
Person, interest rate swap agreements, interest rate cap agreements, interest rate collar agreements, interest rate options, interest rate futures, foreign currency swap agreements, foreign currency cap agreements, foreign currency collar
agreements, foreign currency options, foreign currency futures and all other similar agreements or arrangements and all liabilities of such Person thereunder. 
  
 “Domestic Lending Office” means, with respect to any Lender, the office of such Lender specified as its “Domestic Lending Office”
opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender, or such other office of such Lender as such Lender may from time to time specify to the Borrowers and the Administrative Agent.

  
 “Effective Date” has the meaning specified in Section 3.01. 

 
 “Eligible Assignee” means (a) the Federal Reserve Bank of the United States; and (b) an
Eligible Transferee; provided, however, that neither Borrower nor an Affiliate of the Borrowers shall qualify as an Eligible Assignee. 
  
 “Eligible Transferee” means a commercial bank or other financial institution having the Required Lender Rating. 
  
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. 
  
 “Eurocurrency Liabilities” has the meaning assigned
to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time. 
 

 4 

  
 “Eurodollar Lending Office” means, with respect
to any Lender, the office of such Lender specified as its “Eurodollar Lending Office” opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender (or, if no such office is specified, its
Domestic Lending Office), or such other office of such Lender as such Lender may from time to time specify to the Borrowers and the Administrative Agent. 
  
 “Eurodollar Rate” means, for any Interest Period for each Eurodollar Rate Advance comprising part of the same Borrowing, an interest rate
per annum equal to the rate per annum at which deposits in U.S. dollars are offered by the principal office of BNS in London, England to prime banks in the London interbank market at 11:00 A.M. (London time) two Business Days before the first day of
such Interest Period in an amount substantially equal to BNS’s Eurodollar Rate Advance comprising part of such Borrowing to be outstanding during such Interest Period and for a period equal to such Interest Period. 
  
 “Eurodollar Rate Advance” means an Advance that bears interest as provided in Section 2.06(a)(ii).

  
 “Eurodollar Rate Reserve Percentage” means, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, the reserve percentage applicable two Business Days before the first day of such Interest Period under regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City
with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the interest rate on Eurodollar Rate Advances is determined)
having a term equal to such Interest Period. 
  
 “Events of Default” has the meaning
specified in Section 6.01. 
  
 “Extending Lender” has the meaning specified in
Section 2.16. 
  
 “Extension Request” has the meaning specified in Section 2.16.

  
 

 5 

  
 “Facility Fee Rate” means, as of any date, a
percentage per annum determined by reference to the Financial Strength Rating in effect on such date as set forth below: 
  
  
 
	 Financial
 Strength Rating
 S&P/Moody’s
 
	 	 Facility Fee Rate
 

	 Aaa/AAA or above
 	 	 .110%
 
	 Aa1/AA+
 	 	 .120%
 
	 Aa2/AA
 	 	 .130%
 
	 Aa3/AA-
 	 	 .140%
 
	 A+
 	 	 .190%
 
	 A
 	 	 .200%
 
	 A—  or lower
 	 	 .210%
 

 
  
  
 “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it. 
  
 “Finance Trust” means a trust formed for the purpose of issuing ABC Securities, using the proceeds of
such issuance to purchase assets from Ambac Assurance and entering into a Put Agreement with Ambac Assurance. 
  
 “Financial Strength Rating” means, as of any date, the rating that has been most recently announced by either S&P or Moody’s, as the case may be, for the financial strength of Ambac Assurance. For purposes
of the foregoing, (a) if the ratings established by S&P and Moody’s shall fall within different levels, the Applicable Margin and the Facility Fee Rate shall be based upon the lower rating; (b) if any rating established by S&P or
Moody’s shall be changed, such change shall be effective as of the date on which such change is first announced publicly by the rating agency making such change; and (c) if S&P or Moody’s shall change the basis on which ratings are
established, each reference to the Financial Strength Rating announced by S&P or Moody’s, as the case may be, shall refer to the then equivalent rating by S&P or Moody’s, as the case may be. 
  
 “GAAP” has the meaning specified in Section 1.03. 
  

“Increase Date” has the meaning specified in Section 2.17. 
  
 “Increase Request” has the meaning specified in Section 2.17. 
 

 6 

  
 “Increasing Lender” has the meaning specified in
Section 2.17. 
  
 “Increasing Extending Lender” has the meaning specified in Section
2.16 
  
 “Indebtedness” of any Person means, without duplication: (a) all
obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (b) all obligations, contingent or otherwise, relative to the face amount of all letters of credit,
whether or not drawn, and banker’s acceptances issued for the account of such Person; (c) all obligations of such Person as lessee under leases which have been or should be, in accordance with GAAP, recorded as capitalized lease liabilities;
(d) net obligations of such Person under all Derivative Transactions (other than Derivative Transactions that are designated by such Person as hedges in accordance with GAAP); (e) whether or not so included as liabilities in accordance with GAAP,
all obligations of such Person to pay the deferred purchase price of property or services (other than trade payables not overdue by more than 60 days incurred in the ordinary course of such Person’s business); (f) all obligations (excluding
prepaid interest thereon) of any other Person of any type described in any of clauses (a) through (e) of this definition which is secured by a Lien on property owned by such Person (including obligations arising under conditional sales or other
title retention agreements), even though such Person has not assumed or become liable for the payment of such obligations of such other Person; and (g) all Contingent Liabilities of such Person; provided, however, that the following shall not
constitute Indebtedness of either Borrower or any Subsidiary of either Borrower: (i) obligations under securities reverse repurchase agreements of either Borrower or any Subsidiary of either Borrower as the buyer of securities to deliver such
securities to the seller thereunder, (ii) obligations of an insurance company under insurance policies in the nature of financial guarantees and financial guarantees, in each case from time to time issued in the ordinary course of such insurance
company’s business, (iii) obligations of any Subsidiary of Ambac Financial in the business of issuing investment contracts, under Specified Investment Contracts issued by such Subsidiary, (iv) obligations of such Person under any Specified
Swaps and Specified Hedges, (v) obligations of Ambac Assurance to pay Put Premiums pursuant to any Put Agreement and (vi) obligations of either Borrower or any Subsidiary of either Borrower under or in respect of any preferred stock issued, or to be
issued, by such Borrower or Subsidiary. For all purposes of this Agreement, the Indebtedness of any Person shall include the Indebtedness of any partnership in which such Person is a general partner. 
  
 “Interest Period” means, for each Eurodollar Rate Advance, the period commencing on (and including) the
date of such Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance and ending on (but excluding) the final day of the period selected by either Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the final of the next preceding Interest Period and ending on the final day of the period selected by such Borrower pursuant to the provisions below. The duration of each such Interest Period shall be
one, two, three or six months, as such Borrower may, upon notice received by the Administrative Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the first day of such Interest Period, select; provided,
however, that: 
  
 

 7 

  
 (a) the Borrowers may not select any Interest Period with respect
to any Eurodollar Rate Advance that ends after the Maturity Date; 
  
 (b) whenever the final day of
any Interest Period would otherwise occur on a day other than a Business Day, the final day of such Interest Period shall be extended to occur on the next succeeding Business Day; provided, however, that, if such extension would cause
the final day of such Interest Period to occur in the next succeeding calendar month, the final day of such Interest Period shall occur on the next preceding Business Day; 
  
 (c) whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the
calendar month that succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the final Business Day of such succeeding calendar month; and 

 
 (d) neither Borrower shall be permitted to select Interest Periods to be in effect at any one time with respect
to Eurodollar Rate Advances made to such Borrower which have expiration dates occurring on more than five different dates. 
  
 “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder. 
  
 “Juneau” means Juneau Investments LLC, a Delaware limited liability company. 
  
 “Lenders” means the Lenders and each Person that shall become a party hereto pursuant to Section 2.16,
2.17 or 8.07. 
  
 “Leverage Ratio” means, at any time, the ratio of (a) the
aggregate amount of Debt of Ambac Financial and its Subsidiaries (other than Aleutian and Juneau),on a Consolidated basis, at such time to (b) the sum of (i) the stockholders’ equity of Ambac Financial and its Subsidiaries (other than Aleutian
and Juneau), on a Consolidated basis (excluding unrealized gains on investments and unrealized losses on investments), computed as of the end of the most recently completed fiscal quarter (or if such time is the final day of any fiscal quarter, as
of such day) and (ii) the aggregate amount of Debt of Ambac Financial and its Subsidiaries (other than Aleutian and Juneau), on a Consolidated basis, at such time. 
  
 “Lien” means any security interest, mortgage, pledge, hypothecation, assignment, encumbrance, lien (statutory or otherwise), charge against
or interest in property to secure payment or performance of an obligation, interest of any vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement or other priority or preferential arrangement of any
kind or nature whatsoever; provided, however, that “Lien” shall not include (a) any reserve established in respect of insurance 
  
 

 8 

 obligations on the books of either Borrower or any of its Subsidiaries provided that such reserve shall not create any
preferential claim or priority on any asset of such Person and (b) any reserve established in respect of Specified Swaps on the books of either Borrower or any of its Subsidiaries provided that such reserve shall not create any preferential claim or
priority on any asset of such Person. 
  
 “Loan Documents” means this Agreement and
the Notes. 
  
 “Material Adverse Change” means any material adverse change in the
business, financial condition or operations of Ambac Financial and its Subsidiaries, taken as a whole. 
  
 “Material Adverse Effect” means a material adverse effect (a) on the business, financial condition or operations of Ambac Financial and its Subsidiaries, taken as a whole, (b) on the rights and remedies of the
Administrative Agent or any Lender under any Loan Document or (c) on the ability of either Borrower to perform its obligations under any Loan Document. 
  
 “Material Subsidiary” means, at any date of determination, any Subsidiary of either Borrower that, together with its Subsidiaries, as of
the end of the most recent fiscal year, was the owner of (or, in the case of any Subsidiary that is acquired following such fiscal year end, would have been the owner of) at least 10% of the Consolidated assets of such Borrower and its Subsidiaries
at the end of such fiscal year, all as set forth on the most recently available Consolidated financial statements of such Borrower for such fiscal year. 
  
 “Maturity Date” means the second anniversary of the Commitment Termination Date. 
  
 “Moody’s” means Moody’s Investors Service, Inc. 
  
 “Note” means a promissory note of either Borrower payable to the order of any Lender, in substantially the form of Exhibit A hereto,
evidencing the aggregate indebtedness of such Borrower to such Lender resulting from the Advances made by such Lender to such Borrower. 
  
 “Notice of Borrowing” has the meaning specified in Section 2.02. 
  
 “Other Taxes” has the meaning specified in Section 2.13(b). 
  
 “Pension Plan” means a “pension plan”, as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer plan as defined in
section 4001(a) (3) of ERISA), and to which either Borrower or any corporation, trade or business that is, along with such Borrower, a member of a Controlled Group, may have liability, including any liability by reason of having been a substantial
employer within the meaning of section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under section 4069 of ERISA. 
  
 

 9 

  
 “Permitted Liens” means: (a) Liens for taxes,
assessments and governmental charges or levies; (b) Liens imposed by law, such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens arising in the ordinary course of business
securing obligations that are not overdue for a period of more than 60 days; (c) pledges or deposits to secure obligations under workers’ compensation laws or similar legislation or to secure public or statutory obligations; and (d)
encumbrances on title to real property that do not render title to the property encumbered thereby unmarketable or materially adversely affect the use of such property for its intended purposes. 
  

“Person” means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated
association, joint venture, limited liability company or other entity, or a government or any political subdivision or agency thereof. 
  
 “Put Agreement” means an agreement between Ambac Assurance and a Finance Trust pursuant to which Ambac Assurance has the right, at its option, to compel a Finance Trust to purchase
preferred stock issued, or to be issued, by Ambac Assurance. 
  
 “Put Premium” means
a premium payable by Ambac Assurance under a Put Agreement. 
  
 “Register” has the
meaning specified in Section 8.07(c). 
  
 “Replacement Lenders” has the meaning
specified in Section 2.16. 
  
 “Required Lenders” means at any time Lenders owed at
least a majority in interest of the then aggregate outstanding principal amount of the Advances owing to Lenders, or, if no such principal amount is then outstanding, Lenders having at least a majority in interest of the Commitments. 

 
 “Required Lender Rating” means an unsecured short-term senior debt rating of not less
than A-1 from Moody’s and P-1 from S&P. 
  
 “Responsible Officer” means,
with respect to a Borrower, the president, chief financial officer or treasurer of such Borrower. 
  
 “S&P” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. 
  
 “Specified Hedge” means any derivative transaction, securities repurchase agreement or other similar agreement or arrangement entered into by any Person that, in each case, is entered into as a hedge.

  
 “Specified Investment Contract” means any investment contract entered into by
Ambac Assurance or any Subsidiary of Ambac Financial in the ordinary course of Ambac Assurance’s or such Subsidiary’s respective businesses. 
 

 10 

  
 “Specified Swap” means any interest rate swap
agreement or other similar agreement or arrangement entered into by any Person, as to which interest rate risk is substantially hedged. 
  
 “Subsidiary” of any Person means any corporation, partnership, joint venture, limited liability company, trust or estate of which (or in which) more than 50% of (a) the issued and
outstanding capital stock having ordinary voting power to elect a majority of the Board of Directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency), (b) the interest in the capital or profits of such limited liability company, partnership or joint venture or (c) the beneficial interest in such trust or estate is at the time directly or indirectly
owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries. 
  
 “Syndication Agent” has the meaning specified in the preamble. 
  
 “Taxes” has the meaning specified in Section 2.13(a). 
  
 “Voting Stock” means capital stock issued by a corporation, or equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

  
 “Welfare Plan” means a “welfare plan”, as such term is defined in
section 3(1) of ERISA. 
  
 SECTION 1.02    Computation of Time Periods.  In this
Agreement in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but
excluding”. 
  
 SECTION 1.01    Accounting Terms.  All accounting terms not
specifically defined herein shall be construed in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements referred to in Section 4.01(e) (“GAAP”). 

 
 ARTICLE II 
  
 AMOUNTS AND TERMS OF THE ADVANCES 
  
 SECTION 2.01    The
Advances.  (a) Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make Advances to each Borrower from time to time on any Business Day during the period from the Effective Date until the Commitment
Termination Date in an aggregate amount, for both Borrowers, not to exceed at any time outstanding the amount set forth opposite such Lender’s name on the signature pages hereof or, if such Lender has entered into any Assignment and Acceptance,
set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 8.07(c), as such amount may be 
 

 11 

 reduced pursuant to Section 2.04 or increased pursuant to Section 2.16 or 2.17 (such Lender’s “Commitment”). Each Borrowing shall
be in an aggregate amount of $1,000,000 or an integral multiple of $1,000,000 in excess thereof and shall consist of Advances of the same Type made on the same day by the Lenders ratably according to their respective Commitments. Within the limits
of each Lender’s Commitment, each Borrower may borrow under this Section 2.01, prepay pursuant to Section 2.09 and reborrow under this Section 2.01. 
  
 (b) The Administrative Agent shall maintain a written record of each Advance made by a Lender to a Borrower, and of each repayment of principal of, and payment of interest on, such Advance made by such
Borrower for the amount of such Lender. Upon the prior written request of any Lender delivered by such Lender to the Administrative Agent and the Borrowers, each of the Borrowers shall execute and deliver to such Lender a Note to the order of such
Lender. 
  
 SECTION 2.02    Making the Advances.  (a) Each Borrowing shall be
made on notice, given not later than 12:00 Noon (New York City time) on the third Business Day next preceding the date of the proposed Borrowing in the case of a Borrowing consisting of Eurodollar Rate Advances, or 11:30 A.M. (New York City time) on
the Business Day of the proposed Borrowing in the case of a Borrowing consisting of Base Rate Advances, by either Borrower to the Administrative Agent, which shall give to each Lender prompt notice thereof by telecopier. Each such notice of a
Borrowing (a “Notice of Borrowing”) shall be by telephone, confirmed immediately in writing or by telecopier, in substantially the form of Exhibit B hereto, specifying therein the requested (i) date of such Borrowing, (ii) Type of
Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing and (iv) in the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for each such Advance. Each Lender shall, before 10:00 A.M. (New York
City time) on the date of such Borrowing in the case of a Borrowing consisting of Eurodollar Rate Advances, or 1:00 P.M. (New York City time) on the date of such Borrowing in the case of a Borrowing consisting of Base Rate Advances, make available
for the account of its Applicable Lending Office to the Administrative Agent at the Administrative Agent’s Account, in same day funds, such Lender’s ratable portion of such Borrowing. After the Administrative Agent’s receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will, not later than 11:00 A.M. (New York City time) on the date of such Borrowing in the case of a Borrowing consisting of Eurodollar Rate
Advances, or 2:00 P.M. (New York City time) on the date of such Borrowing in the case of a Borrowing consisting of Base Rate Advances, make such funds available to such Borrower at the Administrative Agent’s address referred to in Section 8.02.

  
 (b) Anything in subsection (a) above to the contrary notwithstanding, neither Borrower may select Eurodollar Rate
Advances for any Borrowing if the obligation of the Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to Section 2.07 or 2.11. 
  
 (c) In the case of any Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower that has requested such Advances shall indemnify each Lender
against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the date specified in such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III, including any loss
(excluding 
 

 12 

 loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Advance to be made by such Lender as part of such Borrowing when such Advance, as a result of such failure, is not made on such date. 
  
 (d) Unless the Administrative Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s
ratable portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with subsection (a) of this Section 2.02 and the
Administrative Agent may, in reliance upon such assumption, make available to the Borrower that has requested such Advance on such date a corresponding amount. If and to the extent that such Lender shall not have so made such ratable portion
available to the Administrative Agent, such Lender and such Borrower severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made
available to such Borrower until the date such amount is repaid to the Administrative Agent, at (i) in the case of such Borrower, the interest rate applicable at the time to Advances comprising such Borrowing and (ii) in the case of such Lender, the
Federal Funds Rate. If such Lender shall repay to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such Lender’s Advance as part of such Borrowing for purposes of this Agreement. 

 
 (e) The failure of any Lender to make the Advance to be made by it as part of any Borrowing shall not relieve any other Lender
of its obligation, if any, hereunder to make its Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Borrowing.

  
 SECTION 2.03    Fees.  (a) Facility Fee.  The Borrowers
jointly and severally agree to pay to the Administrative Agent for the account of each Lender a facility fee, for each day (i) from the Effective Date, if such Lender shall be a party hereto on the Effective Date, or from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender or from the date it became a Lender pursuant to Section 2.16 or 2.17, if such Lender shall become a party hereto after the Effective Date, until the Commitment
Termination Date, at the Facility Fee Rate for such date on the amount of such Lender’s Commitment for such date and (ii) from the Commitment Termination Date, if such Lender shall be a party hereto on the Commitment Termination Date, or from
the effective date specified in the Assignment and Acceptance pursuant to which it became a Lender, if such Lender shall become a party hereto after the Commitment Termination Date, until the Maturity Date, at the Facility Fee Rate for such date on
the aggregate outstanding principal amount of such Lender’s Advances for such date; in each case payable in arrears quarterly on the final day of each March, June, September and December, commencing September, 2002, and on the Commitment
Termination Date and the Maturity Date, as the case may be. 
  
 (b) Administrative Agent’s
Fees.  The Borrowers jointly and severally agree to pay to the Administrative Agent for its own account such fees as may from time to time be agreed between the Borrowers and the Administrative Agent. 
 

 13 

  
 SECTION 2.04    Termination or Reduction of the
Commitments.  The Borrowers shall have the right, upon at least three Business Days’ notice signed by both Borrowers to the Administrative Agent, to terminate in whole or reduce ratably in part the unused portions of the
respective Commitments of the Lenders, provided that each partial reduction shall be in the aggregate amount of $1,000,000 or an integral multiple of $1,000,000 in excess thereof. 
  
 SECTION 2.05    Repayment.  Each Borrower shall repay on the Maturity Date to the Administrative Agent for the ratable account of the
Lenders the aggregate principal amount of any Advances made to such Borrower and outstanding on the Commitment Termination Date. 
  
 SECTION 20.6    Interest.  (a) Scheduled Interest.  Each Borrower shall pay interest on the unpaid principal amount of each Advance made to such Borrower owing to each Lender from
the date of such Advance until such principal amount shall be paid in full, at the following rates per annum: 
  
 (i)    Base Rate Advances.  During such periods as such Advance is a Base Rate Advance, a rate per annum equal at all times to the Base Rate in effect from time to time, payable in arrears monthly
on the final day of each month during such periods and on the date such Base Rate Advance shall be Converted or paid in full. 
  
 (ii)  Eurodollar Rate Advances.  During such periods as such Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for such
Advance to the sum of (A) the Eurodollar Rate for such Interest Period for such Advance plus (B) the Applicable Margin in effect from time to time, payable in arrears on the final day of such Interest Period and, if such Interest Period has a
duration of more than three months, on each day that occurs during such Interest Period every three months from the first day of such Interest Period and on the date such Eurodollar Rate Advance shall be Converted or paid in full. 

 
 (b)    Default Interest.  Upon the occurrence and during the continuance of a Default
under Section 6.01(a) as a consequence of any failure by either Borrower to pay when due hereunder any amount of principal, interest, fee or other amount payable hereunder, such Borrower shall pay interest (before and after judgment) on such amount
of principal, interest, fee or other amount that is not paid when due, from the date such Default shall occur until such amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per
annum equal at all times to the sum of the Base Rate in effect from time to time plus 2% per annum. Any interest payable pursuant to this Section 2.06(b) on any amount of principal of an Advance shall be in lieu of interest which would otherwise be
payable on such amount of principal pursuant to Section 2.06(a). 
  
 (c)    Additional
Interest on Eurodollar Rate Advances.  Each Borrower shall pay to each Lender, so long as and to the extent such Lender shall be required under regulations of the Board of Governors of the Federal Reserve System to maintain reserves
with respect to liabilities or assets consisting of or including Eurocurrency Liabilities, additional interest on the unpaid principal amount of each Eurodollar Rate Advance of such Lender made to such Borrower, from the date of such Eurodollar Rate
Advance until such principal amount is paid in full, at an interest rate per annum equal at all times to the remainder obtained by subtracting (i) 
 

 14 

 the Eurodollar Rate for the then existing Interest Period for such Advance from (ii) the rate obtained by dividing such Eurodollar Rate by a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period, payable on each date on which interest is payable on such Advance. Each Lender shall, as promptly as practicable after an
authorized officer of such Lender having direct and ongoing involvement in the decisions made in respect of this Agreement obtains knowledge of such circumstances and the determination of such Lender to request additional interest from such Borrower
pursuant to this Section 2.06(c), provide notice to the Administrative Agent and such Borrower of the circumstances entitling such Lender to such additional interest, which notice shall (A) specify the amount of any such additional interest incurred
in connection with such Eurodollar Rate Advance made to such Borrower and/or to be incurred in connection with Eurodollar Rate Advances made by such Lender from time to time thereafter to such Borrower and (B) certify that such Lender’s claim
for payment of such additional interest is not inconsistent with its treatment of other borrowers that, as a credit matter, are substantially similar to such Borrower and that are subject to comparable provisions in the loan or other credit
documentation to which such borrowers are parties; provided, however, that no Lender shall be entitled to additional interest on any Eurodollar Rate Advance pursuant to this Section 2.06(c) for any Interest Period ending more than 120
days prior to the date that notice of such additional interest is first provided by such Lender to such Borrower. A notice delivered by any Lender to either Borrower pursuant to the terms of this Section 2.06(c) shall be conclusive and binding,
absent manifest error. A Lender that delivers a notice under this Section 2.06(c) shall promptly notify the Administrative Agent and such Borrower if the circumstances that gave rise to such notice no longer exist. 
  
 SECTION 2.07    Interest Rate Determination.  (a) The Administrative Agent shall give prompt notice
to each Borrower and the Lenders of the applicable interest rate determined by the Administrative Agent for purposes of Section 2.06(a)(i) or (ii) or 2.06(b). 
  
 (b) If either Borrower shall fail to select the duration of any Interest Period for any Eurodollar Rate Advances to be made to such Borrower in accordance
with the provisions contained in the definition of “Interest Period” in Section 1.01, the Administrative Agent will forthwith so notify such Borrower and the Lenders and such Advances will automatically, on the final day of the then
existing Interest Period therefor, Convert into Base Rate Advances. 
  
 (c) On the date on which the
aggregate unpaid principal amount of Eurodollar Rate Advances having the same Interest Period shall be reduced, by payment or prepayment or otherwise, to less than $5,000,000, such Advances shall automatically Convert into Base Rate Advances.

  
 (d) Upon the occurrence and during the continuance of any Event of Default, (i) each Eurodollar
Rate Advance will automatically, on the final day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended. 
  
 SECTION 2.08    Optional Conversion of Advances.  Each Borrower
may on any Business Day, upon notice given to the Administrative Agent not later than 12:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Conversion and subject to the provisions of Sections 2.07 and 2.11,
Convert all Advances of one Type made 
 

 15 

 to such Borrower comprising the same Borrowing into Advances of the other Type; provided, however, that (a) any Conversion of
Eurodollar Rate Advances into Base Rate Advances shall be made only on the final day of an Interest Period for such Eurodollar Rate Advances and (b) no Conversion of any Advances shall result in more separate Interest Periods with respect to
Eurodollar Rate Advances made to such Borrower than permitted under the definition of the term “Interest Period” in Section 1.01. Each such notice of a Conversion shall, within the restrictions specified above, specify (i) the date of such
Conversion, (ii) the Advances to be Converted, and (iii) if such Conversion is into Eurodollar Rate Advances, the duration of the initial Interest Period for each such Advance. 
  
 SECTION 2.09    Optional Prepayments.  Each Borrower may, upon at least three Business Days’ notice, or, in the case of Base Rate
Advances, upon same day’s prior notice, to the Administrative Agent stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given such Borrower shall, prepay the outstanding principal amount of the
Advances made to such Borrower comprising part of the same Borrowing in whole or ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid; provided, however, that (i) no such
prepayment of any Eurodollar Rate Advance may be made on any day other than the final day of the Interest Period for such Advance and (ii) all such partial prepayments shall be in an aggregate minimum amount of $500,000 (or, in the case of
Eurodollar Rate Advances, $1,000,000) and an integral multiple of $100,000. Each prepayment of any Advances made pursuant to this Section 2.09 shall be without premium or penalty. 
  
 SECTION 2.10    Increased Costs.  If, due to either (a) the introduction of or any change after the date hereof in or in the
interpretation of any law or regulation or (b) the compliance with any guideline or request promulgated after the date hereof from any central bank or other governmental authority (whether or not having the force of law), there shall be any increase
in (i) the cost to any Lender of agreeing to make or making, funding or maintaining Eurodollar Rate Advances (excluding for purposes of this Section 2.10 any such increased costs resulting from Taxes or Other Taxes or from changes in the basis or
rate of taxation of net income or gross income by the United States or by the foreign jurisdiction or state under the laws of which such Lender is subject to tax as a result of a present or former connection between such Lender and such foreign
jurisdiction or state) or (ii) the amount of capital required to be maintained by such Lender or any corporation controlling such Lender based on the existence of its Commitment hereunder, then the Borrowers jointly and severally agree from time to
time, within five Business Days after receipt by both Borrowers of a written demand by such Lender (with a copy of such demand to the Administrative Agent), to pay to the Administrative Agent for the account of such Lender additional amounts as
shall accrue from and after the date of demand by such Lender to compensate such Lender for such increased cost or such increase of capital; provided, however, that before making any such demand, each Lender agrees to use reasonable
efforts (consistent with its internal policy and legal and regulatory restrictions) to minimize such additional amounts and to designate a different Applicable Lending Office if the making of such a designation would avoid the need for, or reduce
the amount of, such increased cost or such increase of capital and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender; and provided, further, that the Borrowers shall be required jointly
and severally to pay to such Lender only such additional amounts as shall be required to compensate such Lender for such increased cost or such increase of capital as shall 
 

 16 

 accrue from and after the date of demand by such Lender. In determining such additional amounts, such Lender will act reasonably and in good
faith and will use averaging and attribution methods which are reasonable, provided that such Lender’s determination of compensation owing under this Section 2.10 shall be conclusive and binding, absent manifest error. Each Lender, upon
determining that any additional amounts will be payable pursuant to this Section 2.10, will give prompt written notice thereof to the Borrowers, which notice shall show the basis for the calculation of such additional amounts. Notwithstanding
anything herein to the contrary, either Borrower shall have the right to unilaterally terminate the Commitment of any Lender demanding additional amounts under this Section 2.10 sixty (60) days after providing to such Lender a notice of termination;
provided that such termination shall not result in a reduction in amounts required to be paid pursuant to this Section 2.10. Each of the Borrowers shall, concurrent with such termination, pay or prepay, as the case may be, to such Lender the
aggregate amount, if any at such time, of all Advances and other amounts payable by such Borrower to such Lender under this Agreement. Notwithstanding any provision of this Agreement to the contrary, Section 2.13 shall provide the exclusive remedy
to the Lenders in respect of Taxes and Other Taxes. 
  
 SECTION
2.11    Illegality.  Notwithstanding any other provision of this Agreement, if any Lender shall notify the Administrative Agent that the introduction of or any change after the date hereof in or in the
interpretation of any law or regulation makes it unlawful, or any central bank or other governmental authority asserts after the date hereof that it is unlawful, for any Lender or its Eurodollar Lending Office to perform its obligations hereunder to
make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances hereunder, (i) each Eurodollar Rate Advance will automatically, upon such demand, Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be suspended until the Administrative Agent shall notify the Borrower that has requested such Advance and the Lenders that the circumstances causing such suspension no longer exist;
provided, however, that before making any such demand, each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Eurodollar Lending Office if the
making of such a designation would allow such Lender or its Eurodollar Lending Office to continue to perform its obligations to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate Advances and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such Lender. 
  
 SECTION
2.12    Payments and Computations.  (a) Each Borrower shall make each payment to be made by it hereunder and under the Notes not later than 11:00 A.M. (New York City time) on the day when due in U.S. dollars to
the Administrative Agent at the Administrative Agent’s Account in same day funds and without set-off or counterclaim. The Administrative Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal or
interest ratably (other than amounts payable pursuant to Section 2.10, 2.13 or 8.04(c)) to the Lenders for the account of their respective Applicable Lending Offices, and like funds relating to the payment of any other amount payable to any Lender
to such Lender for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and recording of the information contained therein in the
Register pursuant to Section 8.07(d), from and after the effective date specified in such Assignment and Acceptance, the Administrative 
 

 17 

 Agent shall make all payments hereunder and under the Notes in respect of the interest assigned thereby to the Lender assignee thereunder, and
the parties to such Assignment and Acceptance shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves. 
  
 (b) All computations of interest based on the Base Rate and of facility fees shall be made by the Administrative Agent on the basis of a year of 365 or 366 days, as the
case may be, and all computations of interest based on the Eurodollar Rate or the Federal Funds Rate shall be made by the Administrative Agent on the basis of a year of 360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest or facility fees are payable. Each determination by the Administrative Agent of an interest rate hereunder shall be conclusive and binding, absent manifest error.

  
 (c) Whenever any payment hereunder or under the Notes shall be stated to be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or facility fee, as the case may be; provided, however, that, if
such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made in the next succeeding calendar month, such payment shall be made on the next preceding Business Day. 
  
 (d) Unless the Administrative Agent shall have received notice from either Borrower prior to the date on which any payment is due to the
Lenders hereunder that such Borrower will not make such payment in full, the Administrative Agent may assume that such Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon
such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent such Borrower shall not have so made such payment in full to the Administrative Agent, each Lender
shall repay to the Administrative Agent forthwith on demand such amount distributed to such Lender together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to
the Administrative Agent, at the Federal Funds Rate. 
  
 SECTION
2.13    Taxes.  (a) Any and all payments by each Borrower hereunder or under the Notes shall be made, in accordance with Section 2.12, free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings imposed by the United States or by any political subdivision thereof or therein with respect to such payments, and all penalties and interest with respect, thereto, excluding, in the
case of each Lender and the Administrative Agent, taxes imposed on or measured by its net income or net profit, and branch profit taxes, franchise taxes, taxes on doing business and taxes measured by or imposed upon its capital or net worth, in each
case imposed as a result of a present or former connection between the Administrative Agent or such Lender and the jurisdiction imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection
arising solely from the Administrative Agent or such Lender having executed, delivered or performed its obligations or received a payment under, or enforced this Agreement or the Notes) (all such non-excluded taxes, levies, imposts, deductions,
charges, 
 

 18 

 withholdings and liabilities in respect of payments hereunder or under the Notes being hereinafter referred to as “Taxes”). If
either Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable by such Borrower hereunder or under any Note to any Lender or the Administrative Agent, (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 2.13) such Lender or the Administrative Agent (as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) such Borrower shall make such deductions and (iii) such Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. 

 
 (b) In addition, the Borrowers jointly and severally agree to pay any present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies that arise from the execution, delivery or registration of this Agreement or the Notes (hereinafter referred to as “Other Taxes”); provided, however, that the
Borrowers shall have no obligation to pay Other Taxes that may arise as a result of a participation referred to in Section 2.14 or 8.07. 
  
 (c) Each of the Borrowers shall indemnify each Lender and the Administrative Agent for and hold it harmless against the full amount of Taxes with respect to payments by such Borrower hereunder or under the Notes imposed on
or paid by such Lender or the Administrative Agent (as the case may be) and any liability for penalties, interest and expenses arising therefrom or with respect thereto. The Borrowers shall jointly and severally indemnify each Lender and the
Administrative Agent for and hold it harmless against the full amount of Other Taxes imposed on or paid by such Lender or the Administrative Agent (as the case may be) and any liability for penalties, interest and expenses arising therefrom or with
respect thereto. Any indemnification under this Section 2.13(c) shall be made within 30 days from the date such Lender or the Administrative Agent (as the case may be) makes written demand therefor. 
  
 (d) Each Lender that is not a “United States person” within the meanings specified in Section 7701 of the Code, on or prior to
the date of its execution and delivery of this Agreement or on the date of the Assignment and Acceptance pursuant to which it becomes a Lender, as the case may be, and from time to time thereafter as requested in writing by either Borrower (but only
so long as such Lender remains lawfully able to do so), shall provide each of the Administrative Agent and such Borrower with (i) two accurate and complete original signed copies of Internal Revenue Service Form W-8BEN or W-8ECI, as appropriate, or
any successor or other form prescribed by the Internal Revenue Service, certifying to such Lender’s entitlement to a complete exemption from United States withholding tax with respect to payments to be made under this Agreement or the Notes on
account of such Lender being entitled to benefits under an income tax treaty or such payments being effectively connected with such Lender’s conduct of a United States trade or business or (ii) if the Lender is not a “bank” within the
meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service Form W-8BEN or W-8ECI pursuant to clause (i) above, (A) a certificate in form and substance satisfactory to the Administrative Agent and such Borrower
stating that such Lender is not a “person” described in Section 871(h)(3) or Section 881(c)(3) of the Code (a “Foreign Lender Certificate”) and (B) two accurate and complete original signed copies of Internal Revenue

 

 19 

 Service Form W-8BEN (or successor form) certifying to such Lender’s entitlement to a complete exemption from United States withholding tax
with respect to payments to be made under this Agreement and under any Note. In addition, each Lender agrees that from time to time, when a lapse in time or change in circumstances renders the previous certification obsolete or inaccurate in any
material respect, it will deliver to such Borrower and the Administrative Agent two new accurate and complete original signed copies of Internal Revenue Service Form W-8BEN or W-8ECI, or Form W-8BEN and a Foreign Lender Certificate, as the case may
be, and such other forms as may be required in order to confirm or establish the entitlement of such Lender to a continued exemption from United States withholding tax with respect to payments under this Agreement and any Note or it shall
immediately notify such Borrower and the Administrative Agent of its inability to deliver any such form or certificate, in which case such Lender shall not be required to deliver any such form or certificate pursuant to this Section 2.13(d) for so
long as such payments may be made free from United States withholding tax. Notwithstanding the foregoing, no Lender shall be required to deliver any such form or certificate described in the immediately preceding sentence if a change in treaty, law
or regulation has occurred prior to the date on which such delivery would otherwise be required that renders any such form or certificate inapplicable or would prevent the Lender from duly completing and delivering any such form or certificate with
respect to it and such Lender so advises such Borrower. 
  
 (e) For any period with respect to which a Lender has
failed to provide either Borrower with the appropriate form described in Section 2.13(d), such Lender shall not be entitled to indemnification under Section 2.13(a) or (c) with respect to Taxes or Other Taxes imposed by the United States by reason
of such failure. 
  
 (f) Any Lender claiming additional amounts payable pursuant to this Section 2.13 agrees to use
reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to minimize such additional amounts and to change the jurisdiction of its Applicable Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter accrue and would not, in the reasonable determination of such Lender, be otherwise disadvantageous to such Lender. 
  

(g) If a Lender changes its Applicable Lending Office (other than pursuant to subsection (f) above or Section 2.11 or 2.12 or otherwise at the request of either
Borrower) and the effect of such change, as of the date of such change, would be to cause either Borrower to become obligated to pay any additional amounts under subsection 2.14, such Borrower shall not be obligated to pay such additional amounts.

  
 (h) If either Borrower is required to pay any amounts pursuant to the provisions of this Section 2.13 to or for
the account of any Lender or the Administrative Agent, and if thereafter such Lender or the Administrative Agent, as the case may be, shall receive a refund of any Taxes or Other Taxes paid by or on behalf of such Lender or the Administrative Agent,
as the case may be, that such Lender or the Administrative Agent, as the case may be, reasonably determines to relate solely to the amounts so paid by such Borrower, such Lender or the Administrative Agent, as the case may be, shall to the extent
that it can do so without prejudice to the retention of the amount of such refund, pay to such Borrower within twenty days after the date on which such Lender or the Administrative Agent, as the case may be, actually receives such refund in an
amount which such Lender or the Administrative Agent, as the case 
 

 20 

 may be, determines to be the proportion of the refunded amount as will leave it, after such remittance, in no better or worse position than it
would have been if the Taxes or Other Taxes had not been imposed and the corresponding additional amounts or indemnification payment not been made. Nothing in this Section 2.13(h) shall be construed as requiring any Lender or the Administrative
Agent to conduct its business or to arrange or alter in any respect its tax or financial affairs so that it is entitled to receive such refund. Neither a Lender nor the Administrative Agent shall be obligated to disclose information regarding its
tax affairs or computations to either Borrower in connection with this clause (h). 
  
 SECTION
2.14    Sharing of Payments, Etc. If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Advances owing to it (other than
pursuant to Section 2.10, 2.13 or 8.04(c)) in excess of its ratable share of payments on account of the Advances obtained by all the Lenders, such Lender shall forthwith purchase from the other Lenders such participations in the Advances owing to
them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender,
such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender’s ratable share (according to the proportion
of (a) the amount of such Lender’s required repayment to (b) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The
Borrowers agree that any Lender so purchasing a participation from another Lender pursuant to this Section 2.14 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of either Borrower in the amount of such participation. 
  
 SECTION 2.15    Use of Proceeds.  Each Borrower shall use the proceeds of each Advance for general corporate or company purposes of such Borrower and its Subsidiaries. 
  
 SECTION 2.16    Extension of Commitment Termination Date.  (a) Within 30 days prior to the then
scheduled Commitment Termination Date (but no later than the twentieth day prior to the then scheduled Commitment Termination Date), the Borrowers may make a written request (an “Extension Request”) to the Administrative Agent who
shall forward a copy to each Lender that the Commitment Termination Date be extended to the date that occurs exactly 364 days after the then scheduled Commitment Termination Date. Such Extension Request shall include a certification by a senior
officer of each Borrower that no Default or Event of Default has occurred and is continuing and all representations and warranties contained herein are true and correct in all material aspects on and as of the date of the Extension Request (it being
understood and agreed that any representation or warranty which expressly refers by its terms to a specified date shall be required to be true and correct in all material respects only as of such date). Each Lender that agrees to such Extension
Request shall so notify the Administrative Agent and the Borrowers in writing on or prior to the date occurring 10 days after the Administrative Agent’s receipt of such Extension Request by indicating such agreement on counterparts of the
Extension Request and delivering such counterpart to the Administrative Agent and the Borrowers; provided that any failure to so notify the Administrative Agent and the Borrowers shall be deemed to be a disapproval by such Lender of the
Borrowers’ Extension 
 

 21 

  
 Request. The Commitment of any Lender which does not so agree shall terminate upon the Commitment
Termination Date then in effect. No Lender shall be obligated to grant any extension pursuant to this Section 2.16 and any such extension shall be in the sole discretion of each Lender. 
  
 (b)  If less than all of the Lender’s consent to an Extension Request (each Lender that has not so consented being a “Declining Lender”, and
each other Lender being an “Extending Lender”), the Borrowers shall have the right to require any Declining Lender to assign in full its rights and obligations under this Agreement (i) to any one or more Extending Lenders designated
by the Borrowers that have offered in their returned counterpart of the Extension Request to increase their respective Commitments in an aggregate amount at least equal to the amount of such Declining Lender’s Commitment (each such Extending
Lender being an “Increasing Extending Lender”) and (ii) to the extent of any shortfall in the aggregate amount of extended Commitments, to any one or more Eligible Transferees designated by the Borrowers that agree to assume all of
such rights and obligations (each such Eligible Transferees being a “Replacement Lender”), provided that (A) such Declining Lender shall have received payment of all amounts owing under its Note and this Agreement on the effective
date of such assignment, (B) such assignment shall otherwise have occurred in compliance with Section 8.07 and (C) the effective date of such assignment shall be the date specified by the Borrowers and agreed to by the Replacement Lender or
Increasing Extending Lender, as the case may be, which date shall be on or prior to the applicable Commitment Termination Date. 
  
 (c)  If (and only if) the sum of (i) the Commitments of the Extending Lenders and the Replacement Lenders plus (ii) the additional Commitments of the Increasing Extending Lenders shall be greater than 50% of the aggregate
amount of the Commitments in effect on the then scheduled Commitment Termination Date, then, effective as of the then scheduled Commitment Termination Date, the “Commitment Termination Date” shall be extended to the date occurring 364 days
after the Commitment Termination Date then in effect (except that, if such date is not a Business Day, such Commitment Termination Date as so extended shall be the next preceding Business Day) and each Replacement Lender shall thereupon become a
“Lender” for all purposes of this Agreement. 
  
 SECTION 2.17  Increase of
Commitments.  (a) The Borrowers may, at any time but in any event not more than one time during any period of six consecutive calendar months, make a written request (an “Increase Request”) to the Administrative Agent
(who shall forward a copy to each Lender) that the Commitments of the Lenders be increased by an aggregate amount, together with the aggregate amount by which the Commitments of the Lenders were previously increased pursuant to this Section 2.17,
not to exceed $100,000,000 in excess of the aggregate amount of the Commitments as of the date of this Agreement. Such Increase Request shall include a certification by a senior officer of each Borrower that no Default or Event of Default has
occurred and is continuing and all representations and warranties contained herein are true and correct in all material respects on and as of the date of the Increase Request (it being understood and agreed that any representation or warranty which
expressly refers by its terms to specified date shall be required to be true and correct in all material respects only as of such date). Any such increase in Commitments shall be effective as of a date (the “Increase Date”)
specified in the related Increase Notice that is (i) prior to the Commitment Termination Date and (ii) at least 10 days after the date of such Increase Notice. Each Increase Notice shall specify the 
 

 22 

 date by which Lenders who wish to increase their Commitment must consent to such increase (the “Commitment Date”), which date
shall be no later than five Business Days prior to the related Increase Date. Each Lender that is willing to increase its Commitment (each an “Increasing Lender”), shall notify the Administrative Agent on or prior to the Commitment
Date of the amount by which it is willing to increase its Commitment, which amount shall not exceed the respective amount specified in the relevant Increase Notice. No Lender shall be obligated to increase its Commitment pursuant to this Section
2.17 and any such increase shall be in the sole discretion of each Lender. If the Lenders notify the Administrative Agent that they are willing to increase the amount of their respective Commitments by an aggregate amount that exceeds the amount of
the requested increase, the requested increase shall be allocated among the Lenders willing to participate therein ratably in accordance with the amount by which they offered to increase their respective Commitments on the Commitment Date.

  
 (b) Promptly following each Commitment Date, the Administrative Agent shall notify the Borrowers as to the
amount, if any, by which the Lenders are willing to participate in the requested increase. If the aggregate amount by which the Lenders are willing to increase their Commitments on any such Commitment Date is less than the requested amount, then any
one or more Eligible Transferees designated by the Borrowers that agree to provide Commitments for the shortfall may become party to this Agreement by executing and delivering, together with the Borrowers, an accession agreement pursuant to which
such Eligible Transferee shall become a party to this Agreement and, to the extent provided therein, shall have the rights and obligations of a Lender hereunder. 
  
 (c) On each Increase Date, each Eligible Transferee that accepts an offer to participate in a requested Commitment increase in accordance with Section 2.17(b) shall become a Lender party to this
Agreement as of such Increase Date and the Commitment of each Increasing Lender shall be increased as of such Increase Date by the amount set forth in its notice delivered to the Administrative Agent in accordance with Section 2.17(a) (or by the
amount allocated to such Lender pursuant to the last sentence of Section 2.17(a)). 
  
 ARTICLE II 

 
 CONDITIONS TO EFFECTIVENESS AND LENDING 
  
 SECTION 3.01  Conditions Precedent to Effectiveness of Section 2.01.  Section 2.01 of this Agreement shall become effective on and as of the first date (the
“Effective Date”) on which the following conditions precedent have been satisfied: 
  
 (a) The
Administrative Agent shall have received counterparts of this Agreement executed by the parties hereto. 
  
 (b) There
shall have occurred no Material Adverse Change since December 31, 2001. 
  
 (c) On the Effective Date, the following
statements shall be true and the Administrative Agent shall have received, with a copy for each Lender, a certificate signed by a duly authorized officer of each Borrower, dated the Effective Date, stating that: 
 

 23 

 (i) the representations and warranties made by such Borrower and contained in Section 4.01 are true and
correct on and as of the Effective Date (it being understood and agreed that any representation or warranty which expressly refers by its terms to a specified date shall be required to be correct in all material respects only as of such date), and

  
 (ii) there exists no action, suit, investigation, litigation, proceeding or labor controversy
affecting such Borrower pending or, to such Borrower’s knowledge, threatened before any court, governmental agency or arbitrator that (A) could be reasonably likely to have a Material Adverse Effect or (B) purports to affect the legality,
validity or enforceability of this Agreement or any Note or the consummation of the transactions contemplated hereby. 
  
 (d) The Administrative Agent shall have received on or before the Effective Date the following, each dated such day, in form and substance satisfactory to the Administrative Agent and (except for the Notes) in sufficient copies for
each Lender: 
  
 (i) If requested by any Lender pursuant to Section 2.01(b), a Note for the account
of such Lender, duly executed by each Borrower, in the amount of such Lender’s Commitment as in effect on the Effective Date. 
  
 (ii) Certified copies of the certificate of incorporation and by-laws of each Borrower as in effect on the Effective Date. 
  
 (iii) Certified copies of the resolutions of the Board of Directors of each of the Borrowers approving this Agreement and the Notes, and of all documents
evidencing other necessary corporate action, third-party and governmental approvals and consents, if any, with respect to this Agreement and the Notes. 
  
 (iv) A certificate of the Secretary or an Assistant Secretary of each of the Borrowers certifying the names and true signatures of the officers of each of
the Borrowers, respectively, authorized to sign this Agreement and the Notes and the other documents to be delivered hereunder. 
  
 (v) The financial documents of each of the Borrowers referred to in Section 5.01(f) hereto. 
  
 (vi) Evidence of the termination of all the outstanding commitments and payment in full of any outstanding obligation of either Borrower under the Credit Agreement dated as of August 3, 1998, as
amended, among the Borrowers, the Lenders named therein, Citibank, N.A. as Documentation Agent, The Bank of New York and Caja Madrid, as Co-Agents, and BNS, as administrative agent. 
  
 (vii) An opinion of Anne G. Gill, First Vice President, Assistant General Counsel and Secretary of Ambac Financial, substantially in the form of Exhibit E
hereto. 
 

 24 

  
 (viii) An opinion of Kevin J. Doyle, Managing Director and
General Counsel of Ambac Assurance, substantially in the form of Exhibit F hereto. 
  
 (ix) An
opinion of DeWitt, Ross & Stevens, S.C., Wisconsin special counsel to Ambac Assurance, substantially in the form of Exhibit G hereto. 
  
 (x) An opinion of Shearman & Sterling, counsel for the Borrowers, substantially in the form of Exhibit H hereto. 
  
 (xi) An opinion of an external counsel for the Borrowers saying that neither Borrower is an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, in form and substance satisfactory to the Administrative Agent. 
  
 (e)
The Administrative Agent shall have received payment of all fees, costs and expenses due and payable by the Borrowers on the Effective Date pursuant to this Agreement. 
  
 SECTION 3.02  Conditions Precedent to Each Borrowing. The obligation of each Lender to make an Advance on the occasion of each Borrowing shall be subject
to the conditions precedent that the Effective Date shall have occurred and on the date of such Borrowing the following statements shall be true (and each of the giving of the applicable Notice of Borrowing and the acceptance by either Borrower of
the proceeds of such Borrowing shall constitute a representation and warranty by such Borrower that on the date of such Borrowing such statements are true): 
  
 (a) the representations and warranties contained in Section 4.01 (other than subparagraphs (f) and (g) and the final sentence of subparagraph (e) thereof) are true and correct on and as of the date of
such Borrowing, before and after giving effect to such Borrowing and to the application of the proceeds therefrom, as though made on and as of such date (it being understood and agreed that any representation or warranty which expressly refers by
its terms to a specified date shall be required to be true and correct in all material respects only as of such date), and 
  
 (b) no event has occurred and is continuing, or would result from such Borrowing or from the application of the proceeds therefrom, that constitutes a Default. 
  
 ARTICLE IV. 
  
 REPRESENTATIONS AND WARRANTIES

  
 Section 4.01  Representations and Warranties of each Borrower.  Each Borrower
represents and warrants as follows: 
  
 (a) Each Borrower and its Material Subsidiaries (i) is a limited liability
company, corporation or partnership, as the case may be, duly formed or organized and existing and in good standing under the laws of the jurisdiction of its formation or organization, as the case may be, (ii) is duly registered or qualified to do
business as a foreign limited liability 
 

 25 

 company, corporation or partnership, as the case may be, in each jurisdiction where the nature of its business requires such registration or
qualification and (iii) holds all requisite governmental licenses, permits and other approvals to own and hold under lease its property and to conduct its business substantially as conducted by it, except where the failure to be so qualified or hold
such licenses, permits and approvals, singly or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. 
  
 (b) The execution, delivery and performance by each Borrower of each Loan Document to which it is party are within such Borrower’s corporate powers, have been duly authorized by all necessary corporate action, and do
not (i) contravene such Borrower’s certificate of incorporation or by-laws; (ii) contravene any contractual restriction, law or governmental regulation or court decree or order binding on or affecting such Borrower; or (iii) result in, or
require the creation or imposition of, any Lien on any of such Borrower’s properties. 
  
 (c) No authorization
or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance by each Borrower of any Loan Document to which such Borrower is
a party. Neither Borrower is an “investment company” within the meaning of the Investment Company Act of 1940, as amended. 
  
 (d) Each Loan Document to which each Borrower is a party constitutes the legal, valid and binding obligation of such Borrower, enforceable against such Borrower in accordance with its terms. 
  
 (e) The consolidated balance sheets of Ambac Financial, Ambac Assurance and their Subsidiaries as at December 31, 2001, and the related
consolidated statements of operations and cash flows of Ambac Financial, Ambac Assurance and their Subsidiaries for the fiscal year ended on such date and the consolidated balance sheet of Ambac Financial, Ambac Assurance and their Subsidiaries as
at March 31, 2002, and the related consolidated statements of operations and cash flows of Ambac Financial, Ambac Assurance and their Subsidiaries for the three months then ended, heretofore furnished to the Administrative Agent, have been prepared
in accordance with GAAP consistently applied and fairly present, subject, in the case of such balance sheet as at March 31, 2002, and such statements of operations and cash flows for the three months then ended, to year-end audit adjustments, the
consolidated financial condition of Ambac Financial, Ambac Assurance and their Subsidiaries as at the respective dates thereof and the results of their operations for the respective periods then ended. Since December 31, 2001, there has been no
Material Adverse Change. 
  
 (f) There is no pending or, to the knowledge of each Borrower, threatened litigation,
action, proceedings or labor controversy affecting such Borrower or any Material Subsidiary or any of its respective properties, businesses, assets or revenues which may reasonably be expected to have a Material Adverse Effect or which purports to
affect the legality, validity or enforceability of any Loan Document. 
  
 (g) Each of the Borrowers and its Material
Subsidiaries has filed all tax returns and reports required by law to have been filed by it and has paid all taxes and governmental charges thereby shown to be owing, except any such taxes or charges which are 
 

 26 

 being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP (or statutory
accounting principles, as appropriate) shall have been set aside on its books and except where the failure to file said returns or reports or to pay such taxes or charges could not reasonably be expected to have a Material Adverse Effect.

  
 (h) During the twelve-consecutive-month period prior to the date of the execution and delivery of this Agreement
and prior to the date of any Borrowing hereunder, except as disclosed in Schedule 4.01(h), no steps have been taken to terminate any Pension Plan, and no contribution failure has occurred with respect to any Pension Plan sufficient to give rise to a
Lien under section 302(f) of ERISA. No condition exists or event or transaction has occurred with respect to any Pension Plan which might result in the incurrence by either Borrower or any member of the Controlled Group of any material liability,
fine or penalty other than a non-defaulted obligation to make a contribution under Section 302 of ERISA. Except as disclosed in Schedule 4.01(h), neither Borrower nor any member of the Controlled Group have any contingent liability with respect to
any post-retirement benefit under a Welfare Plan, other than liability for continuation coverage described in Part 6 of Title I of ERISA. 
  
 (i) After applying the proceeds of each Advance, not more than 25% of the value of the assets of either Borrower are margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System).

  
 (j) The Debt of the Borrowers under this Agreement and, to the extent applicable, the Notes issued by such
Borrower, will rank at least pari passu in priority of payment with all other unsecured and unsubordinated Debt of such Borrower. 
  
 ARTICLE V. 
  
 COVENANTS OF THE BORROWERS 
  

Section 5.01  Affirmative Covenants.  So long as any Advance shall remain unpaid or any Lender shall have any Commitment hereunder, each
Borrower will: 
  
 (a) Compliance with Statutes, Etc. Comply, and cause each of its Material Subsidiaries to
comply, in all material respects with all applicable laws, statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of
its property, except where noncompliance therewith could not reasonably be expected to have, in the aggregate, a Material Adverse Effect. 
  
 (b) Use of Proceeds. Each Borrower will apply the proceeds of Advances for working capital and general corporate purposes of such Borrower and its Subsidiaries. 
  

(c) Maintenance of Insurance. Maintain, and cause each of its Material Subsidiaries to maintain, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which such Borrower or such Material Subsidiary operates;
provided, however, that each Borrower and its Material Subsidiaries may self-insure to the same extent as other companies engaged in similar 
 

 27 

 businesses and owning similar properties in the same general areas in which such Borrower or such Material Subsidiary operates and to the extent
consistent with prudent business practice. 
  
 (d) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Material Subsidiaries to preserve and maintain, its legal existence (except as otherwise permitted by Section 5.02(b)) and its material rights, franchises and licenses; provided, however, that nothing in
this Section 5.01(d) shall prevent the withdrawal, lapse or termination by either Borrower or any of its Material Subsidiaries of any right, franchise or license where such withdrawal, lapse or termination could not reasonably be expected to have a
Material Adverse Effect. 
  
 (e) Keeping of Books; Visitation Rights. (i) Keep, and cause each of its Material
Subsidiaries to keep, books of record and account which accurately reflect all of its business affairs and transactions; and (ii) permit, and cause each of its Material Subsidiaries to permit, officers and designated representatives of the
Administrative Agent and any Lender to visit and inspect, under guidance of officers of either Borrower or such Material Subsidiary, any of the properties of such Borrower or such Material Subsidiary, and to examine the books of record and account
of such Borrower or such Material Subsidiary and discuss the affairs, finances and accounts of such Borrower or such Material Subsidiary with, and be advised as to the same by, its and their officers and its independent public accountants (and each
Borrower hereby authorizes such independent public accountant to discuss each Borrower’s financial matters with the Administrative Agent or its representatives), all at such reasonable times and intervals (and, prior to the occurrence of any
Default, with reasonable prior notice given to the applicable Borrower) and to such reasonable extent as any Lender may reasonably request. 
  
 (f) Reporting Requirements. Furnish to the Administrative Agent: 
  
 (i) Quarterly Financial Statements of Ambac Financial. As soon as they are available, but in any event within 60 days after the end of each of the first three quarterly accounting periods in each fiscal year of Ambac
Financial, the consolidated balance sheets of Ambac Financial and its consolidated Subsidiaries as at the end of such quarterly period and the related consolidated statements of operations and cash flows for such quarterly period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly period all of which shall be certified by the chief financial officer or treasurer of Ambac Financial, subject to year-end audit adjustments. 
  
 (ii) Annual Financial Statements of Ambac Financial. As soon as they are available, but in any event within 120
days after the end of each fiscal year of Ambac Financial, a copy of the annual report for such fiscal year for Ambac Financial and its consolidated Subsidiaries, including therein the consolidated balance sheets of Ambac Financial and its
consolidated Subsidiaries as at the end of such fiscal year and the related consolidated statements of operations, stockholders’ equity and of cash flow for such fiscal year, in each case, certified, in the case of the consolidated financial
statements, by independent certified public accountants of recognized national standing reasonably acceptable to the Administrative Agent. 
 

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 (iii) Quarterly Statutory Statements of Ambac Assurance. As soon as they are available, but in any
event within 60 days after the end of each of the first three quarterly accounting periods in each fiscal year of Ambac Assurance, the quarterly statement of Ambac Assurance for such quarter, as filed with the Office of Commissioner of Insurance of
the State of Wisconsin, certified as to fairness of presentation, generally accepted statutory accounting principles and consistency by the Responsible Officer of Ambac Assurance as at the end of such quarterly period and the related consolidated
statements of operations and cash flows for such quarterly period and for the elapsed portion of the fiscal year ended with the last day of such quarterly period all of which shall be certified by the chief financial officer or treasurer of Ambac
Assurance, subject to year-end audit adjustments. 
  
 (iv) Annual Statutory Statements of Ambac
Assurance. As soon as they are available, but in any event within 120 days after the end of each fiscal year of Ambac Assurance, a copy of the annual statement for such fiscal year for Ambac Assurance as filed with the Office of Commissioner of
Insurance of the State of Wisconsin, certified as to fairness of presentation, generally accepted statutory accounting principles and consistency by the Responsible Officer of Ambac Assurance, and 
  
 (v) Occurrence of Default. As soon as possible and in any event within ten days after a Responsible Officer of
either Borrower shall obtain actual knowledge of the occurrence of a Default continuing on the date of such statement, a statement of the chief financial officer of such Borrower setting forth details of such Default and the action that such
Borrower has taken and proposes to take with respect thereto. 
  
 (vi) Compliance Certificate.
Concurrently with the delivery of the financial information pursuant to clauses (i) and (ii) above, a Compliance Certificate, executed by a Responsible Officer of Ambac Financial, showing compliance with the financial covenants set forth in Section
5.03 and stating that no Default has occurred and is continuing (or, if a Default has occurred, specifying the details of such Default and the action that Ambac Financial has taken or proposes to take with respect thereto). 
  
 (vii) Notice of Litigation. As soon as possible and in any event within 5 Business Days after a Responsible Officer
of either Borrower obtains knowledge of the filing or commencement of any material litigation, action, proceeding or labor controversy with respect to such Borrower or any of its Material Subsidiaries, notice thereof and, to the extent the
Administrative Agent requests, copies of all documentation relating thereto. 
  
 (viii) ERISA.
Immediately upon becoming aware of (i) the institution of any steps by any Person to terminate any Pension Plan, (ii) the failure to make a required contribution to any Pension Plan if such failure is sufficient to give rise to a Lien under Section
302(f) of ERISA, (iii) the taking of any action with respect to a Pension Plan which could result in the requirement that either Borrower furnish a bond or other security to the Pension Benefit Guaranty Corporation (or any Person succeeding to any
or all of its functions under ERISA) or such Pension Plan, or (iv) the occurrence of any event with respect to any Pension Plan which could result in the incurrence by either 
 

 29 

 Borrower of any material liability, fine or penalty, notice thereof and copies of all documentation relating thereto. 
  
 (ix) Other Information. Such other financial and other information as any Lender through the Administrative Agent
may from time to time reasonably request. 
  
 Section 6.02  Negative Covenants.  So long
as any Advance shall remain unpaid or any Lender shall have any Commitment hereunder: 
  
 (a) Liens. Each
Borrower will not, and will not permit any of its Material Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, revenues or assets, whether now owned or hereafter acquired, to secure Debt of such Borrower or
such Material Subsidiary except: (i) Liens granted prior to the date hereof securing Debt existing as of the Effective Date which is identified in Schedule 5.02(a) (“Ongoing Debt”); (ii) any Lien on any asset granted to secure
payment of Debt incurred or assumed for the purpose of financing the acquisition of such asset, provided that such Lien attaches to such asset no later than the ninetieth day after such acquisition; (iii) any Lien existing on any asset prior
to the acquisition thereof by such Borrower or any Material Subsidiary thereof and not created in contemplation of such acquisition; (iv) any Lien arising out of the refinancing, extension, renewal or refunding of any Debt secured by any Lien
permitted in clause (i), (ii) or (iii), provided that such Debt is not increased and is not secured by any additional assets; (v) Permitted Liens; (vi) any Lien consisting of a pledge of Ambac Assurance of its subrogation rights to secure
Debt for borrowed money, in the aggregate amount outstanding not to exceed $50,000,000 at any time; and (vii) other Liens where the aggregate principal amount of Debt secured thereby at any time outstanding does not exceed $50,000,000 in the
aggregate. 
  
 (b) Mergers, Etc. Each Borrower will not, and will not permit any of its Material Subsidiaries
to, liquidate or dissolve, consolidate with, or merge into or with, any other Person, except: (i) any such Material Subsidiary (other than Ambac Assurance) may liquidate or dissolve voluntarily into, and may consolidate and merge with and into,
either Borrower or any other Material Subsidiary of either Borrower; and (ii) so long as no Default has occurred and is continuing or would occur after giving effect thereto, either Borrower may consolidate or merge with and into any other Person if
(A) such Borrower is the surviving entity and such Borrower and its Subsidiaries, as a whole, will continue to have the financial guaranty business as one of its principal businesses; or (B) all of the following are satisfied: (I) such Person and
its Subsidiaries, as a whole, shall have the financial guaranty business as one of its principal businesses, (II) such Person shall have assumed all the obligations of such Borrower pursuant to an instrument in form and substance reasonably
satisfactory to the Required Lenders and shall have delivered such opinions of counsel with respect thereto as the Administrative Agent may reasonably request, (III) both immediately prior to and after giving effect to such consolidation or merger,
the ratings on such Person’s senior unsecured debt and (if such Person is an insurer at such time) claims-paying ability shall be at least as high as the applicable Borrower immediately prior to such consolidation or merger, and (IV) such
Person meets each Lender’s internal policies with respect to extensions of credit of the type contemplated hereunder. 
 

 30 

 (c) Asset Dispositions.  Each Borrower will not, and will not permit any of its Material
Subsidiaries to, sell, transfer, lease, contribute or otherwise convey, or grant options, warrants or other rights with respect to, all or any substantial part of its assets (including accounts receivable and capital stock of any of its Material
Subsidiaries) to any Person (any of the foregoing, an “Asset Disposition”); provided, however, that each Borrower and its Material Subsidiaries may consummate (i) Asset Dispositions in the ordinary course of
their business and (ii) any Asset Disposition, to the extent that immediately after giving effect to such Asset Disposition, the aggregate fair market value (determined at the time of the applicable transactions) of all assets subject to Asset
Dispositions (other than those described in clause (i)) consummated by the Borrowers and their respective Subsidiaries in such Fiscal Year) and consummated in such Fiscal Year, would not exceed 25% of the stockholders’ equity of Ambac
Financial and its Subsidiaries, on a Consolidated basis (excluding unrealized gains on investments and unrealized losses on investments), at the end of the next preceding Fiscal Quarter. 
  
 SECTION 5.03  Financial Covenants.  So long as any Advance shall remain unpaid or any Lender shall have any Commitment hereunder, Ambac Financial
will: 
  
 (a) Leverage Ratio.  Maintain as of the end of each fiscal quarter a
Leverage Ratio of not more than 0.3 to 1.00. 
  
 (b) Net Worth.  Maintain at all
times an excess of Consolidated total assets over Consolidated total liabilities (in each case excluding the assets and liabilities of Aleutian and Juneau) of not less than $1,750,000,000. 
  
 ARTICLE VI. 
  
 EVENTS OF DEFAULT

  
 SECTION 6.01  Events of Default .  If any of the following events (“Events
of Default”) shall occur and be continuing: 
  
 (a) Either Borrower shall fail to pay any principal of any
Advance made to such Borrower when the same becomes due and payable; or either Borrower shall fail to pay any interest on any Advance made to such Borrower or make any other payment of fees or other amounts payable by such Borrower under this
Agreement or any Note within five Business Days after the same becomes due and payable by such Borrower; or 
  
 (b)
Any representation or warranty made by either Borrower herein shall prove to have been incorrect in any material respect when made; or 
  
 (c) Either Borrower shall fail to perform or observe any term, covenant or agreement contained in Section 5.01(f)(v), 5.02(b), 5.02(c) or 5.03 on its part to be performed or observed, or either Borrower shall fail to perform
or observe any other term, covenant or agreement contained in this Agreement on its part to be performed or observed if such failure shall remain unremedied for 30 days after written notice thereof shall have been given to such Borrower by the
Administrative Agent or any Lender; or 
 

 31 

 (d) Either Borrower or any of its Material Subsidiaries shall (i) fail to pay any principal of or premium or interest on
any Debt that is outstanding in a principal or notional amount of at least $30,000,000 in the aggregate (but excluding Debt outstanding hereunder) of such Borrower or such Material Subsidiary (as the case may be), when the same becomes due and
payable, and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; or (ii) any other event shall occur or condition shall exist under any agreement or instrument
relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such
Debt; or (iii) any such Debt shall be declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or an offer to prepay, redeem, purchase or
defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; or 
  
 (e) Either
Borrower or any of its Material Subsidiaries shall generally not pay its debts as such debts become due, or shall admit in writing its inability or unwillingness to pay its debts generally, or shall make a general assignment for the benefit of
creditors; or 
  
 (f) Any proceeding shall be instituted by or against either Borrower or any of its Material
Subsidiaries seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any Federal, State or foreign law relating to
bankruptcy, insolvency, receivership or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 60 days, or any of the actions sought in such proceeding (including,
without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or either Borrower or any of its Material
Subsidiaries shall take any corporate action to authorize any of the actions set forth above in subsection (e) or in this subsection (f); or 
  
 (g) Any judgment or order for the payment of money individually or in the aggregate in excess of $30,000,000 at any one time in effect, shall be rendered against either Borrower or any of its Material
Subsidiaries and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; provided, however, that the amount of any such judgment or order shall not be considered in determining whether a Default or an Event of Default exists under this Section
6.01(f) if and to the extent that (i) the amount of such judgment or order is covered by a valid and binding policy of insurance between the defendant and the insurer covering payment thereof and (ii) such insurer, which shall be rated at least
“A” by A.M. Best Company, has been notified of, and has not disputed the claim made for payment of, the amount of such judgment or order; or 
  
 (h) Any of the following events shall occur with respect to any Pension Plan: (i) the institution of any steps by either Borrower, any member of its Controlled Group or any 
 

 32 

 other Person to terminate a Pension Plan if, as a result of such termination, such Borrower or any such member could be required to make a
contribution to such Pension Plan, or could reasonably expect to incur a liability or obligation to such Pension Plan, in excess of $20,000,000; or (ii) a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a Lien
under Section 302(f) of ERISA. 
  
 then, and in any such event, the Administrative Agent (i) shall at the request, or may with the consent,
of the Required Lenders, by notice to the Borrowers, declare the obligation of each Lender to make Advances to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Required
Lenders, by notice to the Borrowers, declare the Notes, all interest thereon and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Notes, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by each Borrower; provided, however, that in the case of any Event of Default described in
subsection (f) above, (A) the obligation of each Lender to make Advances shall automatically be terminated and (B) the Notes, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by each Borrower. 
  
 ARTICLE VII

  
 THE AGENTS 
  
 SECTION 7.01  Authorization and Action.  Each Lender hereby appoints BNY as the Syndication Agent and BNS as the Administrative Agent under and for the purposes of each Loan
Document. Each Lender authorizes the Administrative Agent to take such action as Administrative Agent on its behalf and to exercise such powers and discretion under this Agreement as are delegated to the Administrative Agent by the terms hereof and
thereof, together with such powers and discretion as are reasonably incidental thereto. As to any matters not expressly provided for by this Agreement (including, without limitation, enforcement or collection of the Notes), the Administrative Agent
shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes; provided, however, that the Administrative Agent shall not be required to take any action that exposes the Administrative Agent to personal liability or that is
contrary to this Agreement or applicable law. The Administrative Agent agrees to give to each Lender prompt notice of each notice given to it by either Borrower pursuant to the terms of this Agreement. BNY as Syndication Agent and BNS, as Arranger,
shall not be required to take any action under this Agreement (it being understood that the foregoing shall not prevent the Syndication Agent or the Arranger from engaging in any activity referred to in Section 7.03). 
  
 SECTION 7.02  Agents’ Reliance, Etc.  No Agent or any of its directors, officers, agents or employees
shall not be liable to any Lender for any action taken or omitted to be taken by it or them under or in connection with this Agreement, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the
foregoing: (i) the 
 

 33 

 Administrative Agent may treat the payee of any Note as the holder thereof until the Administrative Agent receives and accepts an Assignment and
Acceptance entered into by the Lender that is the payee of such Note, as assignor, and an Eligible Assignee, as assignee, as provided in Section 8.07; (ii) any Agent may consult with legal counsel (including counsel for the Borrowers), independent
public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (iii) no Agent makes any warranty or
representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement; (iv) no Agent shall have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement on the part of the Borrowers or to inspect the property (including the books and records) of the Borrowers; (v) no Agent shall be responsible
to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of, this Agreement or any other instrument or document furnished pursuant hereto; and (vi) no Agent shall incur any liability under or in
respect of this Agreement by acting upon any notice, consent, certificate or other instrument or writing (which may be by telecopier) believed by it to be genuine and signed or sent by the proper party or parties. 
  
 SECTION 7.03  Agents and Affiliates.  With respect to its Commitment, the Advances made by it and the Note or
Notes issued to it, each Agent shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not an Agent; and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated, include each Agent in its individual capacity. Each Agent and its Affiliates may accept deposits from, lend money to, act as trustee under indentures of, accept investment banking engagements from and generally engage in any
kind of business with, the Borrowers, any of their Subsidiaries and any Person who may do business with or own securities of either Borrower or any such Subsidiaries, all as if such Agent was not an Agent and without any duty to account therefor to
the Lenders. 
  
 SECTION 8.04  Lender Credit Decision.  Each Lender acknowledges that it
has, independently and without reliance upon any Agent or any other Lender and based on the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon any Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action under this Agreement. 
  
 SECTION
8.05  Indemnification.  The Lenders agree to indemnify the Administrative Agent (to the extent not reimbursed by the Borrowers), ratably according to the respective principal amounts of the Notes then held by each of them
(or if no Notes are at the time outstanding) ratably according to the respective amounts of their Commitments), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against the Administrative Agent in any way arising out of this Agreement or any action taken or omitted by the Administrative Agent under this Agreement

 

 34 

  
 (collectively, the “Indemnified Costs”), provided that no Lender shall be liable
for any portion of the Indemnified Costs resulting from the Administrative Agent’s gross negligence or willful misconduct. Without limitation of the foregoing, each Lender agrees to reimburse the Administrative Agent promptly upon demand for
its ratable share of any out-of-pocket fees and expenses (including counsel fees and expenses) incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, to the extent that the Administrative Agent is not reimbursed for such fees and expenses by the
Borrowers. In the case of any investigation, litigation or proceeding giving rise to any Indemnified Costs, this Section 7.05 applies whether any such investigation, litigation or proceeding is brought by the Administrative Agent, any Lender or a
third party. 
  
 SECTION 7.06  Successor.  The Administrative Agent may resign at any time
by giving written notice thereof to the Lenders and the Borrowers and may be removed at any time with or without cause by the Required Lenders. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent’s giving of notice of resignation
or the Required Lenders’ removal of the retiring Administrative Agent, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be a commercial bank organized under the laws of
the United States of America or of any State thereof and having a combined capital and surplus of at least $500,000,000. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, discretion, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Administrative Agent’s resignation or removal hereunder as Administrative Agent, the provisions of this Article VII shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement. 
  
 ARTICLE VIII 
  
 MISCELLANEOUS 
  
 SECTION 8.01  Amendments, Etc.  No amendment or waiver of any provision of this Agreement or the Notes, nor consent to any departure by either Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or
consent shall, unless in writing and signed by all the Lenders, do any of the following: (a) waive any of the conditions specified in Section 3.01, (b) except as provided in Sections 2.16 and 2.17, increase or extend the Commitments of the Lenders
or subject the Lenders to any additional obligations, (c) reduce the principal of, or interest on, the Notes or other amounts payable hereunder, (d) except as a consequence of any extension of the Commitment Termination Date as provided in Section
2.16, postpone any date fixed for any payment of principal of, or interest 
 

 35 

 on, the Notes or any fees or other amounts payable hereunder, (e) change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Notes, or the number of Lenders, that shall be required for the Lenders or any of them to take any action hereunder, or (f) amend this Section 8.01 or the definition of “Required Lenders”; and providedfurther that no
amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above to take such action, affect the rights or duties of the Administrative Agent under this Agreement or any Note.

  
 SECTION 8.02  Notices, Etc.  All notices and other communications provided for
hereunder shall be in writing (including telecopier) and mailed, telecopied or delivered, if to either Borrower, at their address at One State Street Plaza, 19th floor, New York, New York, 10004, Attention: Robert W. Starr; if to any Lender, at its Domestic Lending Office specified opposite its name on Schedule I hereto or at its Domestic Lending
Office specified in the Assignment and Acceptance pursuant to which it became a Lender, as the case may be; and if to the Administrative Agent, at its address at One Liberty Plaza, New York, New York 10006, Attention: Dan Foote; or, as to the
Borrowers or the Administrative Agent, at such other address as shall be designated by such party in a written notice to the other parties and, as to each other party, at such other address as shall be designated by such party in a written notice to
the Borrowers and the Administrative Agent. All such notices and communications shall, when mailed or telecopied, be effective when deposited in the mails or telecopied, respectively, except that notices and communications to the Administrative
Agent pursuant to Article II, III or VII shall not be effective until received by the Administrative Agent. Delivery by telecopier of an executed counterpart of any amendment or waiver of any provision of this Agreement or the Notes or of any
Exhibit hereto to be executed and delivered hereunder shall be effective as delivery of a manually executed counterpart thereof. 
  
 SECTION 8.03  No Waiver; Remedies.  No failure on the part of any Lender or the Administrative Agent to exercise, and no delay in exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

  
 SECTION 8.04   Costs and Expenses.  (a) The Borrowers jointly and severally agree to
pay on demand all out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation, execution, delivery, administration, modification and amendment of this Agreement, the Notes and the other documents to be delivered
hereunder, including, the reasonable fees and expenses of counsel for the Administrative Agent with respect thereto and with respect to advising the Administrative Agent as to its rights and responsibilities under this Agreement. The Borrowers
further jointly and severally agree to pay on demand all out-of-pocket costs and expenses of the Administrative Agent and the Lenders, if any (limited, in the case of counsel, to the reasonable fees and expenses of one common counsel for the
Administrative Agent and the Lenders), in connection with the enforcement of this Agreement, the Notes and the other documents to be delivered hereunder. 
  
 (b) The Borrowers jointly and severally agree to indemnify and hold harmless the Agents and each Lender and each of their Affiliates and their officers, directors, employees, agents and advisors (each,
an “Indemnified Party”) from and against any and all claims, 
 

 36 

 damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of the Notes, this Agreement or the actual or proposed use of the proceeds of the Advances except with respect to any Indemnified Party to the extent such claim, damage,
loss, liability or expense results from such Indemnified Party’s gross negligence or willful misconduct as determined in a final non-appealable judgment by a court of competent jurisdiction. 
  

(c) If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by either Borrower to or for the account of a Lender other than on the last
day of the Interest Period for such Advance, as a result of a payment or Conversion pursuant to Section 2.07(c), 2.09 or 2.11, prepayment, acceleration of the maturity of the Notes pursuant to Section 6.01 or for any other reason, such Borrower
shall, upon written demand by such Lender (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender any amounts required to compensate such Lender for any additional losses, costs or
expenses that it may reasonably incur as a result of such payment or Conversion, including any loss (excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by
any Lender to fund or maintain such Advance. 
  
 (d) Without prejudice to the survival of any other agreement of each
Borrower hereunder, the agreements and obligations of each Borrower contained in Sections 2.10, 2.13 and 8.04 shall survive the payment in full of principal and interest payable hereunder and under the Notes. 
  
 SECTION 8.05  Right of Set-off.  Upon the occurrence and during the continuance of any Default under Section
6.01(f) or any Event of Default and the making of the request or the granting of the consent specified by Section 6.01 to authorize the Administrative Agent to declare the Notes due and payable pursuant to the provisions of Section 6.01, each Lender
is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time
owing by such Lender to or for the credit or the account of either Borrower against any and all of the obligations of such Borrower now or hereafter existing under this Agreement and the Note held by such Lender, whether or not such Lender shall
have made any demand under this Agreement or such Note. Each Lender agrees promptly to notify such Borrower after any such set-off and application, provided that the failure to give such notice shall not affect the validity of such set-off
and application. The rights of each Lender under this Section 8.05 are in addition to other rights and remedies (including other rights of setoff under applicable law or otherwise) which such Lender may have. 
  
 SECTION 8.06  Binding Effect.  This Agreement shall become effective when it shall have been executed by the
Borrowers and the Agents and when the Administrative Agent shall have been notified by each Lender that such Lender has executed it and thereafter shall be binding upon and inure to the benefit of the Borrowers, the Agents and each Lender and their
respective successors and assigns, except that the Borrowers shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lenders. 
 

 37 

  
 Section 8.07  Assignments and Participations. (a) Each Lender
may, if approved by the Borrowers and the Administrative Agent (which approvals may not be unreasonably withheld or delayed and which approvals of the Borrowers shall not be required if an Event of Default has occurred and is continuing), and, if
demanded by the Borrowers in the event that at any time any Lender shall cease to have the Required Lender Rating, upon at least 5 Business Days’ notice to such Lender and the Administrative Agent, will assign to one or more Persons all or a
portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment, the Advances owing to it and the Note or Notes held by it); provided, however,
that (i) each such assignment shall be of a constant, and not a varying, percentage of all rights and obligations under this Agreement, (ii) except in the case of an assignment to a Person that, immediately prior to such assignment, was a Lender or
an assignment of all of a Lender’s rights and obligations under this Agreement, the amount of the Commitment of the assigning Lender being assigned pursuant to each such assignment (determined as of the date of the Assignment and Acceptance
with respect to such assignment) shall in no event be less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof, (iii) each such assignment shall be to an Eligible Assignee and (iv) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with any Note subject to such assignment and a processing and recordation fee of $3,500. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, (A) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, have the rights and obligations of a Lender hereunder and (B) the Lender assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto). 
  
 (b)  By executing and delivering an
Assignment and Acceptance, the Lender assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender
makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of either
Borrower or the performance or observance by either Borrower of any of its obligations under this Agreement or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Administrative Agent, such assigning Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints 
 

 38 

 and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under this
Agreement as are delegated to the Administrative Agent by the terms hereof, together with such powers and discretion as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by it as a Lender. 
  
 (c)  The Administrative Agent shall maintain at its address referred to in Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses
of the Lenders and the Commitment of, and principal amount of the Advances owing to, each Lender from time to time (the “Register”). The entries in the Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrowers
or any Lender at any reasonable time and from time to time upon reasonable prior notice. 
  
 (d)  Upon its
receipt of an Assignment and Acceptance executed by an assigning Lender and an assignee representing that it is an Eligible Assignee, together with any Note or Notes subject to such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to each Borrower.
Within five Business Days after its receipt of such notice, each Borrower, at its own expense, shall execute and deliver to the Administrative Agent in exchange for the surrendered Note a new Note to the order of such Eligible Assignee in an amount
equal to the Commitment assumed by it pursuant to such Assignment and Acceptance and, if the assigning Lender has retained a Commitment hereunder, a new Note to the order of the assigning Lender in an amount equal to the Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Note or Notes, shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A hereto. 
  
 (e)  Each Lender may sell participations to one or more
banks or other entities (other than the Borrowers or any of their Affiliates) in or to all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment, the Advances owing to it
and the Note or Notes held by it); provided, however, that (i) such Lender’s obligations under this Agreement (including, without limitation, its Commitment to the Borrowers hereunder) shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender shall remain the holder of any such Note for all purposes of this Agreement, (iv) the Borrowers, the Administrative Agent and the
other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and (v) no participant under any such participation shall have any right to approve any
amendment or waiver of any provision of this Agreement or any Note, or any consent to any departure by either Borrower therefrom, except to the extent that such amendment, waiver or consent would reduce the principal of, or interest on, the Notes or
any fees or other amounts 
 

 39 

 payable hereunder, in each case to the extent subject to such participation, or postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation. 
  
 (f)  Any Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 8.07, disclose to the assignee or participant or proposed assignee or participant, any
information relating to either Borrower furnished to such Lender by or on behalf of such Borrower; provided that, prior to any such disclosure, the assignee or participant or proposed assignee or participant shall agree to preserve the
confidentiality of any Confidential Information relating to such Borrower received by it from such Lender. 
  
 (g)  Notwithstanding any other provision set forth in this Agreement, any Lender may at any time create a security interest in all or any portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System. 
  
 Section 8.08  Confidentiality.  Neither the Agents nor any Lender shall disclose any Confidential Information to any other Person without the
consent of the Borrowers, other than (a) to the Agents’ or such Lender’s Affiliates and their officers, directors, employees, agents and advisors and, as contemplated by Section 8.07(f), to actual or prospective assignees and participants,
and then only on a confidential basis, (b) as required by any law, rule or regulation or judicial process and (c) as requested or required by any state, federal or foreign authority or examiner regulating banks or banking. 
  
 Section 8.09  Governing Law.  This Agreement and the Notes shall be governed by, and construed in accordance
with, the laws of the State of New York. 
  
 Section 8.10  Execution in
Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Agreement. 
  
 Section 8.11  Waiver of Jury Trial.  Each of the Borrowers, the Agents and the Lenders hereby knowingly,
voluntarily and irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or the Notes or any course of conduct, course of
dealing or statements (whether oral or written) or actions of the Agents or any Lender in the negotiation, administration, performance or enforcement thereof. Each Borrower acknowledges and agrees that it has received full and sufficient
consideration for this provision and that this provision is a material inducement for the Agents and each Lender to enter into the Loan Documents. 
  
 Section 8.12  Jurisdiction, Etc.  Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of
any 
 

 40 

 New York State court or federal court of the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this Agreement or the Notes, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the extent permitted by law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or the Notes in the courts of any jurisdiction. 
  
 Section
8.13  Nature of Obligations.  The obligations of the Borrowers under the Loan Documents are several obligations, and are not joint and several obligations, of the respective Borrowers unless otherwise expressly provided
herein. 
 

 41 

  
 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first above written. 
  
 
	 AMBAC FINANCIAL GROUP, INC.
 
	 
	 By
 	 	 

	  	 	 Title:
 
	 
	 AMBAC ASSURANCE CORPORATION
 
	 
	 By
 	 	 

	  	 	 Title:
 
	 
	 THE BANK OF NOVA SCOTIA,
as Administrative Agent
 
	 
	 By
 	 	 

	  	 	 Title:
 
	 
	 THE BANK OF NEW YORK,
as Syndication Agent
 
	 
	 By
 	 	 

	  	 	 Title:
 

 
 

 42 

  
 
	  	 	 Lenders
 
	 Commitment
 	 	  
	 
	 $75,000,000
 	 	 THE BANK OF NOVA SCOTIA
 
	 
	  	 	 By                                     
                                        
                                     
 
	  	 	   Title:
 
	 
	  	 	 By                                     
                                        
                                     
 
	  	 	       Title:
 

 
  
 

 43 

  
 
	 Commitment
 	  	  
	 
	 $65,000,000
 	  	 THE BANK OF NEW YORK
 
	 
	  	  	 By                                     
                                        
                                      
 
 
	  	  	   Title:
 

 
 

 44 

  
 
	 Commitment
 	 	  
	 
	 $45,000,000
 	 	 WESTDEUTSCHE LANDESBANK
 GIROZENTRALE, NEW YORK BRANCH
 
	 
	  	 	 By                                     
                                        
                                     
 
	  	 	   Title:
 
	 
	  	 	 By                                     
                                        
                                     
 
	  	 	   Title:
 

 
 

 45 

  
 
	 Commitment
 	 	  
	 
	 $25,000,000
 	 	 BANK OF AMERICA, N.A.
 
	 
	  	 	 By                                     
                                        
                                     
 
	  	 	   Title:
 

 
 

 46 

 
	 Commitment
 	 	  
	 
	 $45,000,000
 	 	 CAJA MADRID
 
	 
	  	 	 By                                     
                                        
                                     
 
	  	 	   Title:
 
	 
	  	 	 By                                     
                                        
                                     
 
	  	 	       Title:
 

 
  
 

 47 

  
 
	 Commitment
 	 	  
	 
	 $45,000,000
 	 	 BARCLAYS BANK PLC
 
	 
	  	 	 By                                     
                                        
                                     
 
	  	 	   Title:
 

 
  
  
  
                                      
                                 
  

$300,000,000 Total of the Commitments 
 

 48 

  
 SCHEDULE I 
 AMBAC FINANCIAL GROUP, INC./ 
 AMBAC ASSURANCE CORPORATION 
 REVOLVING CREDIT AGREEMENT 
 APPLICABLE LENDING OFFICES 
  
 
	 Name of Lender
 
	 	 Domestic Lending Office
 
	 	 Eurodollar Lending Office
 

	 The Bank of Nova Scotia
 	 	 One Liberty Plaza, New York,
 NY 10006
 Att: Tony Creanza
 	 	 One Liberty Plaza, New York,
 NY 10006
 Att: Tony Creanza
 
	 

	 Barclays Bank PLC
 	 	 222 Broadway, New York, NY
 10038
 Att: Alison McGuigan
 	 	 222 Broadway, New York, NY
 10038
 Att: Alison McGuigan
 
	 

	 Westdeutsche Landesbank
 Girozentrale, New York
 Branch
 	 	 1211 Avenue of the Americas,
 New York, NY 10036
 Att: Lillian Lum, Executive
 Director
 	 	 1211 Avenue of the Americas,
 New York, NY 10036
 Att: Lillian Lum, Executive
 Director
 
	 

	 Bank of America, N.A.
 	 	 901 Main Street, 66th Floor,
 Dallas, TX 75202
 Att: Joan D’Amico, Managing
 Director
 	 	 901 Main Street, 66th Floor,
 Dallas, TX 75202
 Att: Joan D’Amico, Managing
 Director
 
	 

	 CAJA MADRID
 	 	 Paseo de La Castellana 189,
 Torre Caja Madrid, 4th Floor,
 Madrid, Spain 28046
 Att: Margarita Talavera
 	 	 Paseo de La Castellana 189,
 Torre Caja Madrid, 4th Floor,
 Madrid, Spain 28046
 Att: Margarita Talavera
 
	 

	 The Bank of New York
 	 	 One Wall Street – 17th Floor,
 New York, NY 10286
 Att: David Trick, Vice
 President
 	 	 One Wall Street – 17th Floor,
 New York, NY 10286
 Att: David Trick, Vice President
 

 
 

 49 

  
 SCHEDULE 4.01(H) 
 AMBAC FINANCIAL GROUP, INC./ 
 AMBAC ASSURANCE CORPORATION 
 REVOLVING CREDIT AGREEMENT 
 CONTINGENT LIABILITIES 
  

	·
	 
	Post-retirement health and life inshurance benefits provided under Ambac Financial Health and Welfare Plan. 
 

 

 50 

  
 SCHEDULE 5.02(A) 
 AMBAC FINANCIAL GROUP, INC./ 
 AMBAC ASSURANCE CORPORATION 
 REVOLVING CREDIT AGREEMENT 
 ONGOING SECURED DEBT 
  
 None. 
 

 51 

  
 EXHIBIT A—FORM OF 
 PROMISSORY NOTE 
  

	U.S.$                             
 	Dated:                                    
 , 2002 
 

 
 FOR VALUE RECEIVED, the undersigned, [AMBAC FINANCIAL GROUP, INC./AMBAC
ASSURANCE CORPORATION] (the “Borrower”), HEREBY PROMISES TO PAY on the Maturity Date (as defined in the Credit Agreement referred to below) to the order of
                                        
                 (the “Lender”) for the account of its Applicable Lending Office (as defined in the Credit Agreement referred to below) the aggregate
principal amount of the Advances made by the Lender to the Borrower pursuant to the Credit Agreement dated as of August 1, 2002, among the Borrower, the Lender and certain other lenders parties thereto, The Bank of New York, as Syndication Agent,
and The Bank of Nova Scotia, as Administrative Agent for the Lender and such other lenders (as amended or modified from time to time, the “Credit Agreement”; the terms defined therein being used herein as therein defined)
outstanding on the Commitment Termination Date. 
  
 The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount is paid in full, at such interest rates, and payable at such times, as are specified in the Credit Agreement. 
  
 Both principal and interest are payable in lawful money of the United States of America to The Bank of Nova Scotia, as Administrative Agent, at One Liberty Plaza, New York,
New York 10006, in same day funds. Each Advance owing to the Lender by the Borrower pursuant to the Credit Agreement, and all payments made on account of principal thereof, shall be recorded by the Lender and, prior to any transfer hereof, endorsed
on the grid attached hereto which is part of this Promissory Note. 
  
 This Promissory Note is one of the Notes
referred to in, and is entitled to the benefits of, the Credit Agreement. The Credit Agreement, among other things, (i) provides for the making of Advances by the Lender to the Borrower from time to time in an aggregate amount not to exceed at any
time outstanding the U.S. dollar amount first above mentioned, the indebtedness of the Borrower resulting from each such Advance being evidenced by this Promissory Note, and (ii) contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. 
  
 
	 [AMBAC FINANCIAL GROUP INC./
 AMBAC ASSURANCE CORPORATION]
 
	 
	 By
 	 	 

	  	 	 Title:
 

 
 

 A-1 

  
 ADVANCES AND PAYMENTS OF PRINCIPAL 
  

	 Date
 	 	 Amount of
 Advance
 	 	 Amount of
 Principal
 Paid
 or Prepaid

	  	 Unpaid
 Principal
 Balance
 	  	 Notation
 Made
By
 
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

	  	 	  	 	  	  	  	  	  
	
	
	
	
	
	
	
	
	

 
 

 A-2 

  
 EXHIBIT B—FORM OF 
 NOTICE OF BORROWING 
  
 The Bank of Nova Scotia, as Administrative Agent 
 for the Lenders parties 
 to the Credit Agreement 
 referred to below 
  
                                   
  
                                   

	 	 
 	[Date] 
 

Attention:
                                     
  
 Ladies and Gentlemen: 
  
 The
undersigned, [Ambac Financial Group, Inc./Ambac Assurance Corporation], refers to the Credit Agreement, dated as of August 1, 2002 (as amended or modified from time to time, the “Credit Agreement”, the terms defined therein being
used herein as therein defined), among the undersigned, [Ambac Financial Group, Inc./Ambac Assurance Corporation], certain Lenders parties thereto, The Bank of New York, as Syndication Agent, and The Bank of Nova Scotia, as Administrative Agent for
said Lenders, and hereby gives you notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that the undersigned hereby requests a Borrowing under the Credit Agreement, and in that connection sets forth below the information relating to
such Borrowing (the “Proposed Borrowing”) as required by Section 2.02(a) of the Credit Agreement: 
  

	 	(i)
	 
	The Business Day of the Proposed Borrowing is
                     , 200  . 
 

  

	 	(ii)
	 
	The Type of Advances comprising the Proposed Borrowing is [Base Rate Advances] [Eurodollar Rate Advances]. 
 

  

	 	(iii)
	 
	The aggregate amount of the Proposed Borrowing is
$                         . 
 

  

	 	[(iv)
	 
	The initial Interest Period for each Eurodollar Rate Advance made as part of the Proposed Borrowing is
                     month[s].] 
 

 

 B-1 

  
 The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the Proposed Borrowing: 
  
 (A)    the
representations and warranties contained in Section 4.01 (other than subparagraphs (f) and (g) and the final sentence of subparagraph (e) thereof) of the Credit Agreement are correct, before and after giving effect to the Proposed Borrowing and to
the application of the proceeds therefrom, as though made on and as of such date; and 
  
 (B)    no event has occurred and is continuing, or would result from such Proposed Borrowing or from the application of the proceeds therefrom, that constitutes a Default. 
  
  
 
	 Very truly yours,
  
 
	 [AMBAC FINANCIAL GROUP INC./
 AMBAC ASSURANCE CORPORATION]
 
	 
	 By
 	 	 

	  	 	 Title:
 

 
 

 B-2 

  
 EXHIBIT C—FORM OF 
 ASSIGNMENT AND ACCEPTANCE 
  
 Reference is made to the Credit Agreement dated as of August
1, 2002 (as amended or modified from time to time, the “Credit Agreement”) among Ambac Financial Group, Inc. and Ambac Assurance Corporation (the “Borrowers”), the Lenders (as defined in the Credit Agreement), The
Bank of New York, as Syndication Agent, and The Bank of Nova Scotia, as administrative agent for the Lenders (the “Administrative Agent”). Terms defined in the Credit Agreement are used herein with the same meaning. 

 
 The “Assignor” and the “Assignee” referred to on Schedule I hereto agree as follows: 

 
 1. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from
the Assignor, an interest in and to the Assignor’s rights and obligations under the Credit Agreement as of the date hereof equal to the percentage interest specified on Schedule 1 hereto of all outstanding rights and obligations under the
Credit Agreement. After giving effect to such sale and assignment, the Assignee’s Commitment and the amount of the Advances owing to the Assignee will be as set forth on Schedule 1 hereto. 
  

2. The Assignor (a) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (b) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or any other instrument or document furnished pursuant thereto; (c) makes no representation or warranty and assumes no responsibility with respect to the
financial condition of either Borrower or the performance or observance by either Borrower of any of its obligations under the Credit Agreement or any other instrument or document furnished pursuant thereto; and (d) attaches the Note held by the
Assignor and requests that the Administrative Agent exchange such Note for a new Note payable to the order of the Assignee in an amount equal to the Commitment assumed by the Assignee pursuant hereto or new Notes payable to the order of the Assignee
in an amount equal to the Commitment assumed by the Assignee pursuant hereto and the Assignor in an amount equal to the Commitment retained by the Assignor under the Credit Agreement, respectively, as specified on Schedule 1 hereto. 

 
 3. The Assignee (a) confirms that it has received a copy of the Credit Agreement, together with copies of the
financial statements referred to in Section 4.01 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (b) agrees that it will,
independently and without reliance upon the Administrative Agent, the Assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not
taking action under the Credit Agreement; (c) confirms that it is an Eligible Assignee; 
 

 C-1 

 (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such
powers and discretion under the Credit Agreement as are delegated to the Administrative Agent by the terms thereof, together with such powers and discretion as are reasonably incidental thereto; (e) agrees that it will perform in accordance with
their terms all of the obligations that by the terms of the Credit Agreement are required to be performed by it as a Lender; and (f) attaches any U.S. Internal Revenue Service forms required under Section 2.13 of the Credit Agreement. 

 
 4. Following the execution of this Assignment and Acceptance, it will be delivered to the Administrative Agent
for acceptance and recording by the Administrative Agent. The effective date for this Assignment and Acceptance (the “Effective Date”) shall be the date of acceptance hereof by the Administrative Agent, unless otherwise specified on
Schedule 1 hereto. 
  
 5. Upon such acceptance and recording by the Administrative Agent, as of the
Effective Date, (a) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and (b) the Assignor shall, to the extent provided in
this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement. 
  
 6. Upon such acceptance and recording by the Administrative Agent, from and after the Effective Date, the Administrative Agent shall make all payments under the Credit Agreement and the Notes in respect of the interest
assigned hereby (including, without limitation, all payments of principal, interest and facility fees with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Agreement and
the Notes for periods prior to the Effective Date directly between themselves. 
  
 7. This Assignment
and Acceptance shall be governed by, and construed in accordance with, the laws of the State of New York. 
  
 8. This Assignment and Acceptance may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall be effective as delivery of a manually executed counterpart of this Assignment and
Acceptance. 
  
 IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to this Assignment and
Acceptance to be executed by their officers thereunto duly authorized as of the date specified thereon. 
 

 C-2 

  
 Schedule 1 
 to 
 Assignment and Acceptance 
  
 
	 Percentage interest assigned:
 	  	  
 	                     %
 	  	  
	  	  	 
	 
	  	  
	 Assignee’s Commitment:
 	  	 $
 	  
 	  	  
	  	  	 
	 
	  	  
	 Aggregate outstanding principal amount of Advances assigned:
 	  	 $
 	  
 	  	  
	  	  	 
	 
	  	  
	 Principal amount of Note payable to Assignee:
 	  	 $
 	  
 	  	  
	  	  	 
	 
	  	  
	 Principal amount of Note payable to Assignor:
 	  	 $
 	  
 	  	  
	  	  	 
	 
	  	  
	 Effective Date*:
 	  	  
 	 ,
 	  	  
	  	  	 
	 
	  	 

 
  
 
	 [NAME OF ASSIGNOR], as Assignor
 	 	  
	 
	 By
 	 	  	 	  
	  	 	 

	 Title:
 	 	  
	 
	 Dated:
 	 	 ,
 	 	  
	  	 	 
	 	 

	 
	 [NAME OF ASSIGNEE], as Assignee
 	 	  
	 
	 By
 	 	  	 	  
	  	 	 

	 Title:
 	 	  
	 
	 Domestic Lending Office:
 	 	  
	  	 	 [Address]
 	 	  
	 
	 Eurodollar Lending Office:
 	 	  
	  	 	 [Address]
 	 	  

 
  
 

	*
	 
	This date should be no earlier than five Business Days after the delivery of this Assignment and Acceptance to the Agent. 
 

 C-3 

  
 Accepted [and Approved] this 
  
                          day
of                                       
          ,              
  
                                      
                               , as Administrative Agent 
  
 By
                                        
                 
 Title: 
  
 Approved this                           day 
 of                                     
            ,              
  
 
	 AMBAC FINANCIAL GROUP, INC.
 
	 
	 By
 	 	                                      
                                        
                  
 
	 Title:
 
	 
	  
 AMBAC ASSURANCE CORPORATION
 
	 
	 By
 	 	                                      
                                        
                  
 
	 Title:
 

 
  
 

 C-4 

  
 EXHIBIT D 
  
 FORM OF COMPLIANCE CERTIFICATE 
  
 AMBAC FINANCIAL GROUP, INC.
 
 AMBAC ASSURANCE CORPORATION 
  
 This certificate is delivered pursuant to clause (vi) of Section 5.01(f) of the Credit Agreement dated as of August 1, 2002 (together with all amendments and other modifications, if any,
from time to time made thereto, the “Credit Agreement”), among AMBAC FINANCIAL GROUP, INC (“Ambac Financial”), AMBAC ASSURANCE CORPORATION (“Ambac Assurance”; together with Ambac Financial, the
“Borrowers”), the various commercial lending institutions as are or may become parties (hereto collectively, the “Lenders”), THE BANK OF NEW YORK (“BNY”), as Syndication Agent and THE BANK OF NOVA
SCOTIA, (“BNS”), as Administrative Agent (BNS and BNY, in such capacity individually referred to as an “Agent” and collectively referred to as the “Agents”). Unless otherwise defined herein, terms
used herein and in the Attachment 1 hereto have the meanings provided therefor in the Credit Agreement. 
  
 This
Compliance Certificate relates to the         Fiscal Quarter, commencing on            
,                 and ending on
            ,                 (such latter date being the “Computation Date”).
Ambac Financial hereby further certifies, represents and warrants that as of the Computation Date: 
  
 (1) No Default has occurred and is continuing; 
  
 (2) The Leverage Ratio on the
Computation Date was         to 1.00, as computed on Attachment 1 hereto. The maximum Leverage Ratio permitted pursuant to Section 5.03(a) of the Credit Agreement on the Computation Date
is .30 to 1.00, and accordingly, Section 5.03(a) of the Credit Agreement has [not] been complied with; and 
  
 (3) The excess of Consolidated total assets over Consolidated total liabilities (in each case excluding the assets and liabilities of Aleutian and Juneau) is
$                . The minimum amount by which Consolidated total assets must exceed Consolidated total liabilities pursuant to Section 5.03(b) of the
Credit Agreement is $1,750,000,000, and accordingly, Section 5.03(b) of the Credit Agreement has [not] been complied with. 
  
 IN WITNESS WHEREOF, the undersigned has caused this Compliance Certificate to be delivered by its Responsible Officer this         day
of             ,                 . 
  
 
	 AMBAC FINANCIAL GROUP, INC
 
	 
	 By:
 	 	 

	  	 	 Title:
 

 
 

 D-1 

  
 Attachment 1 
 (to     /     /      
 Compliance Certificate) 

 
 LEVERAGE RATIO 
 As
of             ,             
 (the “Computation Date”) 
  
  
 
	 (A)
 	  	 Total Debt of Ambac Financial and its Subsidiaries (other than Aleutian and Juneau) on a Consolidated basis as of the Computation Date
 	  	  	  
	 
	  	  	 (1)      Borrowed money and all obligations evidenced by bonds, debentures, notes or other
similar instruments.
 	  	 $
 	 _________
 
	 
	  	  	 (2)      All obligations, contingent or otherwise, relative to the face amount of all
letters of credit, whether or not drawn, and banker’s acceptances issued for the account of Ambac Financial or its Subsidiaries (other than Aleutian and Juneau) on a consolidated basis.
 	  	 $
 	 _________
 
	 
	  	  	 (3)      All obligations as lessees under leases which have been or should be, in
accordance with GAAP, recorded as capitalized lease liabilities.
 	  	 $
 	 _________
 
	 
	  	  	 (4)      All Contingent Liabilities in respect of any of Items A(1), A(2)
and A(3).
 	  	 $
 	 _________
 
	 
	  	  	 (5)      The sum of Items A(1), A(2), A(3) and
A(4).
 	  	 $
 	 _________
 
	 
	 (B)
 	  	 Stockholders’ Equity: Stockholders’ equity of Ambac Financial and its Subsidiaries (other than Aleutian and Juneau), on a Consolidated basis
(excluding unrealized gains on investments and unrealized losses on investments).
 	  	 $
 	 _________
 
	 
	 (C)
 	  	 Leverage Ratio:
 	  	  	  
	 
	  	  	 The ratio of Item A(5) to the sum of Item A(5) and Item B
 	  	  
 	 _____ to 1.00
 

 
 

 D-2 

 EXHIBIT E 
  
 [Form of Opinion of Anne G. Gill, First Vice President, Secretary and 
 Assistant General Counsel to Ambac Financial Group, Inc.] 

 
             , 2002 
  
 The Bank of Nova Scotia 
 individually and as the

 Administrative Agent 
 (as defined below) 

One Liberty Plaza 

	New
	 
	York, New York 10006 
 

  
 Re:    Ambac Financial Group, Inc. 
 $300 Million Credit Agreement 
  
 Ladies and Gentlemen: 
  
 This opinion is delivered to you pursuant to Section 3.01(d)(vii) of the Credit Agreement dated as of August 1, 2002 (the “Credit Agreement”), among Ambac Financial Group, Inc., a Delaware corporation (“Ambac
Financial”), Ambac Assurance Corporation, a Wisconsin stock insurance corporation, each of you as Lenders, The Bank of New York, as Syndication Agent and The Bank of Nova Scotia, as Administrative Agent for the Lenders (the
“Administrative Agent”). Unless otherwise defined herein, terms defined in the Credit Agreement are used herein as therein defined. 
  
 I am First Vice President, Assistant General Counsel and Secretary of Ambac Financial and have acted as counsel to Ambac Financial in connection with the preparation, execution and delivery of the
Credit Agreement. In that connection, I have examined: 
  
 
	 1)
 	  	 the Credit Agreement;
 
	 
	 2)
 	  	 the Notes dated the date hereof, executed by Ambac Financial and payable to each of you as Lenders (the “Ambac Financial
Notes”);
 
	 
	 3)
 	  	 the Amended and Restated Certificate of Incorporation of Ambac Financial and all amendments thereto (the “Charter”); and
 
	 
	 4)
 	  	 the By-laws of Ambac Financial and all amendments thereto (the “By-laws”).
 

 
  
 I also have examined and am familiar with the originals, or copies
certified or otherwise identified to my satisfaction, of such documents and corporate records of Ambac Financial, certificates of public officials and officers of Ambac Financial and agreements, 
 

 E-1 

 instruments and other documents, as I have deemed necessary as a basis for the opinions expressed below. As to questions of fact material to
such opinions, I have, when relevant facts were not independently established by me, relied, to the extent I deemed appropriate, upon certificates of Ambac Financial or its officers, or of public officials. In addition, I have also assumed the
genuineness of all signatures, the authenticity of all documents submitted to me as originals and the conformity with originals of all documents submitted to me as copies thereof. I have also assumed the due execution and delivery, pursuant to due
authorization, of the Credit Agreement by each of the Lenders and the Administrative Agent. 
  
 I am qualified to
practice law in the State of New York. I do not purport to express any opinion herein as to the laws of any jurisdiction other than the laws of the State of New York, the General Corporation Law of the State of Delaware and the Federal laws of the
United States of America. 
  
 Based upon the foregoing and upon such investigation, as I have deemed necessary, I am
of the following opinion: 
  
 (1)    Ambac Financial is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware. Ambac Financial is duly 
  
 qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the nature of its business requires such qualification, except where the failure to be so qualified, singly or in the aggregate,
would not have a Material Adverse Effect. 
  
 (2)    The execution, delivery and
performance by Ambac Financial of the Credit Agreement and the Ambac Financial Notes are within Ambac Financial’s corporate powers, and have been duly authorized by all necessary corporate action on the part of Ambac Financial. 

 
 (3)    There is no pending or, to my knowledge, threatened action, suit, investigation,
litigation, proceeding or labor controversy affecting Ambac Financial before any court, governmental agency or arbitrator which (A) purports to affect the legality, validity or enforceability of the Credit Agreement or any of the Ambac Financial
Notes or the consummation of the transactions contemplated thereby or (B) which could be reasonably likely to have a Material Adverse Effect. 
  
 (4)    The execution, delivery and performance by Ambac Financial of the Credit Agreement and the Ambac Financial Notes do not (i) violate or contravene its Charter or By-laws, or
any contractual restriction or law applicable to Ambac Financial or any rule or regulation applicable to Ambac Financial or (ii) result in, or require the creation or imposition of, any Lien on any of Ambac Financial’s properties. 

 
 (5)    The execution, delivery and performance by Ambac Financial of the Credit Agreement
and the Ambac Financial Notes do not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under (i) any indenture, loan agreement, lease, guarantee, mortgage or other agreement or instrument, or (ii) any
order, writ, judgment, award, injunction or decree known to me to which Ambac 
 

 E-2 

 Financial is a party or by which it is bound or to which any of its properties or assets are subject, except for such conflicts, breaches or
defaults, which individually or in the aggregate, would not have any Material Adverse Effect and would not have a material adverse effect on the legality, validity, binding effect or enforceability of the Credit Agreement or the Ambac Financial
Notes. 
  
 (6) No authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the due execution, delivery and performance by Ambac Financial of the Credit Agreement or any Ambac Financial Note. 
  
 (7) The Credit Agreement and the Ambac Financial Notes have been duly executed and delivered on behalf of Ambac Financial. 
  
 A copy of this opinion letter may be delivered by each of you to any Eligible Assignee in connection with and at the time of any
assignment and delegation by either of you as a Lender to such Eligible Assignee of a portion of your Loans and Commitment in accordance with the provisions of the Credit Agreement, and such Eligible Assignee may rely on the opinions expressed above
with respect to the Credit Agreement as if this opinion letter were addressed and delivered to such Eligible Assignee on the date hereof. 
  
 This opinion letter speaks only as of the date hereof. I do not assume, and I expressly disclaim, any responsibility to advise any of you or any other Person who is permitted to rely on any opinion expressed herein as
specified in the next preceding paragraph of any or change of law or fact that may occur after the date of this opinion letter even though such change may affect the legal analysis, a legal conclusion or any other matter set forth in or relating to
this opinion letter. 
  
 This opinion is given pursuant to the Credit Agreement and in connection with the Loan
Documents and is not to be relied upon for any other purpose. 
  
 Very truly yours, 
  

 
 
	 
	 

	 Anne G. Gill
 

 
 

 E-3 

  
 EXHIBIT F 
  
 [Form of Opinion of Kevin J. Doyle, Managing Director and 
 General Counsel of Ambac Assurance Corporation]

  
 , 2002 
  
 The Bank of Nova Scotia 
 individually and as the 
 Administrative Agent 
 (as defined below) 
 One Liberty Plaza

	New
	 
	York, New York 10006 
 

  
 Re:    Ambac Assurance Corporation 
   $300 Million Credit Agreement 

 
 Ladies and Gentlemen: 
  
 This opinion is delivered to you pursuant to Section 3.01(d)(viii) of the Credit Agreement dated as of August 1, 2002 (the “Credit Agreement”), among Ambac Financial Group, Inc., a Delaware corporation, Ambac
Assurance Corporation, a Wisconsin stock insurance corporation (“Ambac Assurance”), each of you as Lenders, The Bank of New York, as Syndication Agent and The Bank of Nova Scotia, as Administrative Agent for the Lenders (the
“Administrative Agent”). Unless otherwise defined herein, terms defined in the Credit Agreement are used herein as therein defined. 
  
 I am a Managing Director and General Counsel of Ambac Assurance and have acted as counsel to Ambac Assurance in connection with the preparation, execution and delivery of the Credit Agreement. In that
connection, I have examined: 
  

	 	1.
	 
	the Credit Agreement; 
 

  

	 	2.
	 
	the Notes dated the date hereof, executed by Ambac Assurance and payable to each of you as Lenders (the “Ambac Assurance Notes”); 

  

	 	3.
	 
	the Restated Articles of Incorporation of Ambac Assurance and all amendments thereto (the “Charter”); and 
 

 

	 	4.
	 
	the restated by-laws of Ambac Assurance and all amendments thereto (the “By-laws”). 
 

  
 I have also examined and am familiar with originals or copies, certified or otherwise identified to my satisfaction, of such documents and corporate records of
Ambac Assurance, certificates of public officials and officers of Ambac Assurance and agreements, instruments and other documents, as I have deemed necessary as a basis for the opinions expressed below. As to 
 

 F-1 

 questions of fact material to such opinions, I have, when relevant facts were not independently established by me, relied, to the extent I
deemed appropriate, upon certificates of Ambac Assurance or its officers, or of public officials. In addition, I have also assumed the genuineness of all signatures, the authenticity of all documents submitted to me as originals and the conformity
with originals of all documents submitted to me as copies thereof. I have also assumed the due execution and delivery, pursuant to due authorization, of the Credit Agreement by each of the Lenders and the Administrative Agent. 

 
 I am qualified to practice law in the State of New York. I do not purport to express any opinion herein as to the laws of any
jurisdiction other than the laws of the State of New York and the Federal laws of the United States of America. 
  
 Based upon the foregoing and upon such investigation as I have deemed necessary, I am of the following opinion: 
  
 (1)    Ambac Assurance is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the nature of its business requires such
qualification, except where the failure to be so qualified, singly or in the aggregate, would not have a Material Adverse Effect. 
  
 (2)    There is no pending or, to my knowledge, threatened action, suit, investigation, litigation, proceeding or labor controversy affecting Ambac Assurance before any court,
governmental agency or arbitrator which (A) purports to affect the legality, validity or enforceability of the Credit Agreement or any of the Ambac Assurance Notes or the consummation of the transactions contemplated thereby or (B) which could be
reasonably likely to have a Material Adverse Effect. 
  
 (3)    All the
outstanding shares of capital stock of Ambac Assurance are fully paid and non-assessable and issued to, and held of record by, Ambac Financial. 
  
 (4)    The execution, delivery and performance by Ambac Assurance of the Credit Agreement and the Ambac Assurance Notes do not (i) violate or contravene its Charter or By-laws or
any contractual restriction or law applicable to Ambac Assurance or any rule or regulation applicable to Ambac Assurance or (ii) result in, or require the creation or imposition of, any Lien on any of Ambac Assurance’s properties. 

 
 (5)    The execution, delivery and performance by Ambac Assurance of the Credit Agreement
and the Ambac Assurance Notes do not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under (i) any indenture, loan agreement, lease, guarantee, mortgage or other agreement or instrument, or (ii) any
order, writ, judgment, award, injunction or decree known to me to which Ambac Assurance is a party or by which it is bound or to which any of its properties or assets are subject, except for such conflicts, breaches or defaults, which individually
or in the aggregate, would not have any Material Adverse Effect and would not have a material adverse effect on the legality, validity, binding effect or enforceability of the Credit Agreement or the Ambac Assurance Notes. 
 

 F-2 

  
 (6)    No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by Ambac Assurance of the Credit Agreement or any Ambac Assurance Note. 
  
 (7)    The Credit Agreement and the Ambac Assurance Notes have been duly executed and delivered on
behalf of Ambac Assurance. 
  
 A copy of this opinion letter may be delivered by each of you to any Eligible Assignee
in connection with and at the time of any assignment and delegation by either of you as a Lender to such Eligible Assignee of a portion of your Loans and Commitment in accordance with the provisions of the Credit Agreement and such Eligible Assignee
may rely on the opinions expressed above with respect to the Credit Agreement, as if this opinion letter were addressed and delivered to such Eligible Assignee on the date hereof. 
  
 This opinion letter speaks only as of the date hereof. I do not assume, and I expressly disclaim, any responsibility to advise any of you or any other person who is
permitted to rely on any opinion expressed herein as specified in the next preceding paragraph of any change of law or fact that may occur after the date of this opinion letter even though such change may affect the legal analysis, a legal
conclusion or any other matter set forth in or relating to this opinion letter. 
  
 This opinion is given pursuant to
the Credit Agreement and in connection with the Loan Documents and is not to be relied upon for any other purpose. 
  
 Very truly yours,

  
  
 Kevin J. Doyle 
 Managing Director and 
 General Counsel

 

 F-3 

  
 EXHIBIT G 
  
 [Form of Opinion of DeWitt Ross & Stevens] 
  
                     , 2002 
  
 The Bank of Nova Scotia 
 individually and as the 
 Administrative Agent 
 (as defined below)

 One Liberty Plaza 

	New
	 
	York, New York 10006 
 

  
 RE: Ambac Assurance Corporation 
  
 Ladies and Gentlemen:

  
 This opinion is delivered to you pursuant to Section 3.01(d)(ix) of the Credit Agreement dated as of August 1, 2002, (the
“Credit Agreement”) among Ambac Financial Group, Inc., a Delaware corporation (“Ambac Financial”), Ambac Assurance Corporation, a Wisconsin stock insurance corporation (“Ambac Assurance”; together
with Ambac Financial, the “Borrowers”), the various commercial lending institutions as are or may become parties thereto (collectively, the “Lenders”), The Bank of New York, as Syndication Agent and The Bank of Nova
Scotia, as Administrative Agent for the Lenders (the “Administrative Agent”). Unless otherwise defined herein, terms to which meanings are ascribed in the Credit Agreement are used herein with such meanings. 
  
 We have acted as special counsel for Ambac Assurance in connection with the preparation, execution and delivery of the Credit Agreement. 
  
 In that connection, we have examined: 
  

	 	1.
	 
	the Credit Agreement; 
 

  

	 	2.
	 
	the Notes dated the date hereof, executed by Ambac Assurance and payable to each of you as Lenders (the “Ambac Assurance Notes”); 

  

	 	3.
	 
	the Restated Articles of Incorporation of Ambac Assurance and all amendments thereto (the “Charter”); 
 

 

	 	4.
	 
	the Restated Bylaws of Ambac Assurance and all amendments thereto (the “Bylaws”); and 
 

  

	 	5.
	 
	the Certificate of Authority issued to Ambac Assurance by the Office of the Commissioner of Insurance for the State of Wisconsin. 

 

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 We have examined the originals, or copies certified to our satisfaction, of such other corporate records
of Ambac Assurance, certificates of public officials and of officers of Ambac Assurance and Ambac Financial and agreements, instruments and other documents, as we have deemed necessary as a basis for the opinions expressed below. As to questions of
fact material to such opinions, we have, when relevant facts were not independently established by us, relied, to the extent we deemed appropriate, upon certificates of Ambac Assurance and Ambac Financial or their respective officers, or of public
officials. We have assumed the due execution and delivery, pursuant to due authorization, of the Credit Agreement by the Lenders and the Administrative Agent. We have assumed the due execution and delivery of the Credit Agreement and the Ambac
Assurance Notes, the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to originals of all documents submitted to us as copies thereof. 
  
 QUALIFICATIONS AND ASSUMPTIONS 
  
 (1)    We are qualified to practice law in the State of Wisconsin and the opinions expressed herein relate solely to the laws of the State of Wisconsin and are limited to the
presently existing statutes of the State of Wisconsin and the published decisions of the State of Wisconsin and federal courts. 
  
 (2)    We assume that Ambac Financial is a Delaware corporation and wholly owns the outstanding capital stock of Ambac Assurance, which fact has been certified to us by Ambac Financial. 
  
 (3)    The insurance laws of the State of Wisconsin govern the activities of Ambac Assurance and the agreements,
transactions and other activities between Ambac Assurance and its affiliates, including Ambac Financial. The opinions set forth below are limited to the agreements and other documents specified herein and no opinion is rendered herein regarding any
agreements or transactions between Ambac Assurance and its affiliates, including Ambac Financial. 
  
 OPINION

  
 Based solely upon the foregoing and subject to the qualifications and assumptions stated above, in our opinion: 

 
 (1)    Ambac Assurance is a corporation duly organized, validly existing and in good
standing under the laws of the State of Wisconsin. Ambac Assurance is licensed as an insurance company by the Office of the Commissioner of Insurance of the State of Wisconsin. 
  
 (2)    The execution, delivery and performance by Ambac Assurance of the Credit Agreement and the Ambac Assurance Notes: (a) are within
Ambac Assurance’s corporate powers and have been duly authorized by all necessary corporate action on the part of Ambac Assurance; and (b) do not violate or contravene the Charter or Bylaws of Ambac Assurance or any laws or regulations of the
State of Wisconsin. 
 

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 (3)    No authorization, approval or other action by and no notice to or filing with
the Office of the Commissioner of Insurance of the State of Wisconsin or any other Wisconsin governmental authority or regulatory body is required for the due execution, delivery and performance by either Borrower of the Credit Agreement or any
Ambac Assurance Note. 
  
 (4)    a.    The New York governing
law clauses of the Credit Agreement and the Ambac Assurance Notes to which Ambac Assurance is a party are valid under the law of the State of Wisconsin. 
  
 b.    Under the law of the State of Wisconsin, the law of the State of New York will be applied to the Loan Documents to which Ambac
Assurance is a party, except to the extent that any term of such documents or any provision of the law of the State of New York applicable to such document violates an important public policy of the State of Wisconsin. We have no reason to believe
that any such term violates an important public policy of the State of Wisconsin. 
  
 (5)    Assuming that the Credit Agreement and the Ambac Assurance Notes are legal, valid, binding and enforceable under the law of the State of New York, the Credit Agreement and the Ambac Assurance Notes
constitute the legal, valid and binding obligations of Ambac Assurance, and are enforceable against Ambac Assurance in accordance with their respective terms. 
  
 The opinions set forth above are subject to the following qualifications: 
  
 a.    Our opinion in Paragraph 5 is subject to the effect of any applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar
law affecting creditors’ rights generally. 
  
 b.    Our opinion in
Paragraph 5 above is also subject to the effect of general principles of equity, including (without limitation) concepts of materiality, reasonableness, good faith and fair dealing (regardless of whether considered in proceeding in equity or at
law). 
  
 Kevin J. Doyle, Managing Director and General Counsel, Specialized Finance, of Ambac Assurance may rely on the opinions above for
the purpose of rendering his opinion letter pursuant to Section 3.01(d)(viii) of the Credit Agreement on the date hereof. In addition, a copy of this opinion letter may be delivered by each of you to any Eligible Assignee in connection with and at
the time of any assignment and delegation by either of you as a Lender to such Eligible Assignee of a portion of your Loans and Commitment in accordance with the provisions of the Credit Agreement, and such Eligible Assignee may rely on the opinions
expressed above with respect to the Credit Agreement as if this opinion letter were addressed and delivered to such Eligible Assignee on the date hereof. 
  
 This opinion letter speaks only as of the date hereof. We do not assume, and we expressly disclaim, any responsibility to advise any of you or any other person who is permitted to rely on any opinion expressed herein as
specified in the next preceding paragraph of any change of law or fact that may occur after the date of this opinion letter even though such change may affect the legal analysis, a legal conclusion or any other matter set forth in or relating to
this opinion letter. 
 

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 This opinion is given pursuant to the Credit Agreement and in connection with the Loan Documents and is
not to be relied upon for any other purpose. 
  
 Very truly yours, 
  
 DEWITT ROSS & STEVENS S.C. 
  
  
  
  
 Paul A. Croake 
 

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 EXHIBIT H 
 FORM OF OPINION OF 
 SHEARMAN & STERLING 
  
 [Effective Date] 
  
 To each of the Lenders listed
on 
 Schedule I hereto and 
 The Bank of Nova Scotia,

 as Administrative Agent 
  
 Ambac Financial Group, Inc. and Ambac Assurance Corporation 
  
 Ladies and
Gentlemen: 
  
 This opinion is furnished to you pursuant to Section 3.01(d)(x) of the Credit Agreement dated as of
August 1, 2002 (the “Credit Agreement”), among Ambac Financial Group, Inc. and Ambac Assurance Corporation (the “Borrowers”), the Lenders parties thereto, The Bank of New York, as Syndication Agent, and The Bank of
Nova Scotia, as Administrative Agent for said Lenders. Terms defined in the Credit Agreement are used herein as therein defined. 
  
 We have acted as special New York counsel for the Borrowers in connection with the preparation, execution and delivery of the Credit Agreement. 
  
 In that connection, we have examined: 
  
 (1)    The Credit Agreement. 
  
 (2)    The
documents furnished by each Borrower pursuant to Article III of the Credit Agreement, including the Notes furnished by each Borrower thereunder on the date hereof (for purposes of this opinion letter, the “Notes”). 

 
 We have also examined the originals, or copies certified to our satisfaction, of such certificates of officers of each Borrower and agreements,
instruments, other documents, as we have deemed necessary as a basis for the opinions expressed below. As to questions of fact material to such opinions, we have, when relevant facts were not independently established by us, relied upon certificates
of each Borrower 
  
 In our examination of the documents, certificates and instruments referred to above, we have
assumed the authenticity of all such documents, certificates and instruments submitted to us as originals, the genuineness of all signatures, the due authority of the parties executing such documents, certificates and instruments, and the conformity
to the originals of all such documents, certificates or instruments submitted to us as copies. We have also assumed, without independent investigation, that (a) each Borrower (i) is a corporation duly formed and validly existing under the laws of
the state of its formation and (ii) has full power and authority to enter into and perform its obligations under the Credit Agreement and the Notes, (b) the execution, delivery and performance by each Borrower of the Credit Agreement and the Notes

 

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 have been duly authorized by all necessary board, company, member, manager or officer action and do not
violate or contravene any law, rule or regulation applicable to either Borrower or any agreement, instrument or other document binding on or affecting either Borrower or any constituent document of either Borrower, (c) no authorization, approval or
other action by, and no notice to or filing with, any governmental authority or regulatory body or any other Person is required for the due execution, delivery or performance by either Borrower of the Credit Agreement or the Notes, or if any such
authorization, approval, action, notice or filing is required therefor, it has been duly obtained or made and is in full force and effect, (d) the Credit Agreement has been duly executed and delivered, with all necessary power and authority
(corporate and otherwise), by each of you, and (e) the Credit Agreement and the Notes have been duly executed and delivered on behalf of such Borrower. 
  
 Based upon the foregoing and upon such investigation as we have deemed necessary and subject to the qualifications set forth below, we are of the opinion that the Credit Agreement is, and if an Advance
were made, each of the Notes evidencing such Advance would be, the legal, valid and binding obligations of each Borrower, enforceable against each Borrower in accordance with their respective terms. 
  
 Our opinion above is subject to the following qualifications: 
  
 (a)    Our opinion is subject to the effect of any applicable bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or similar law affecting creditors’ rights generally. 
  
 (b)    Our opinion is also subject to the effect of general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing (regardless of whether
considered in a proceeding in equity or at law). 
  
 (c)    We express no opinion
(i) as to the enforceability of the indemnification provisions set forth in Section 8.04(b) of the Credit Agreement to the extent enforcement thereof is contrary to the public policy regarding exculpation of criminal violations, intentional harm and
acts of gross negligence or recklessness and (ii) as to the effect of the law of any jurisdiction other than the State of New York wherein any Lender may be located or wherein enforcement of the Credit Agreement or the Notes may be sought that
limits the rates of interest legally chargeable or collectible. 
  
 Our opinion is limited to the law of the State of
New York and the federal law of the United States, and we do not express any opinion herein concerning any other law. 
  
 A copy of this opinion letter may be delivered by each of you to any Eligible Assignee in connection with and at the time of any assignment and delegation by any of you as a Lender to such Eligible Assignee of a portion of your
Advances and Commitment in accordance with the provisions of the Credit Agreement, and such Eligible Assignee may rely on the opinion expressed above with respect to the Credit Agreement as if this opinion letter were addressed and delivered to such
Eligible Assignee on the date hereof. 
  
 This opinion letter speaks only as of the date hereof. We expressly
disclaim any responsibility to advise any of you or any other Person who is permitted to rely on the opinion 
 

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 expressed herein as specified in the next preceding paragraph of any development or circumstance of any
kind including any change of law or fact that may occur after the date of this opinion letter even though such development, circumstance or change may affect the legal analysis, a legal conclusion or any other matter set forth in or relating to this
opinion letter. Accordingly, any Lender relying on this opinion letter at any time should seek advice of its counsel as to the proper application of this opinion letter at such time. 
  
  
  
 Very truly yours, 
 

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