Document:

EXHIBIT 10.22

 

AMENDED
AND RESTATED

 

SPECIALTY
PROGRAM BUSINESS AND INSURANCE RISK SHARING BUSINESS

 

QUOTA
SHARE REINSURANCE AGREEMENT

 

between

 

TOWER
INSURANCE COMPANY OF NEW YORK

TOWER NATIONAL INSURANCE COMPANY

(each a “Company”)

 

and

 

CASTLEPOINT
REINSURANCE COMPANY, LTD.

(“Reinsurer”)

 

Effective
April 1, 2006

 

ARTICLE I                                                           BUSINESS
COVERED

 

A.                                   This Agreement
applies to all in-force, new and renewal Policies, except as hereinafter
excluded, written and classified by the Company as Fire and Allied Perils, Commercial
Multiple Peril, Homeowners Multiple Peril and Liability, Workers’ Compensation,
Inland Marine and Automobile Liability and Physical Damage and Umbrella, with
an inception date effective during the term of this Agreement and which are
classified by the Company as Specialty Program Business and Insurance Risk
Sharing Business.

 

ARTICLE II                                                       DEFINITIONS

 

 “Business
Covered” shall mean the business described in Article I.

 

“Extra-Contractual Obligations” shall mean
those liabilities not covered under any other provision of this Agreement,
other than Loss Excess of Policy Limits, including but not limited to
compensatory, consequential, punitive, or exemplary damages together with any
legal costs and expenses incurred in connection therewith, paid as damages or
in settlement by the Company arising from an allegation or claim of its
insured, its insured’s assignee, or other third party, which alleges
negligence, gross negligence, or other tortious conduct on the part of the
Company in the handling, adjustment, rejection, defense or settlement of a
claim under a Policy.

 

 “Insurance
Risk Sharing Business” shall mean various risk sharing arrangements such as (i) pooling
or sharing of premiums and losses between the Company and other insurance
companies based upon their respective percentage allocations or (ii) appointing
other third party insurance companies as Program Underwriting Agents with such
third party insurance 

 

 

companies assuming through reinsurance a portion of the business they
produce as Program Underwriting Agents.

 

“Letter(s) of Credit” shall have the meaning
set forth in Article XVI.

 

“Loss” or “Losses” shall mean, with respect
to a Policy, the amount paid or payable by the Company to an insured with
regards a Loss Occurrence, including (i) any Ex Gratia Payments (i.e.,
a claim payment not necessarily required by a Policy as a commercial
accommodation by the Company to the insured or reinsured) and (ii) any
payments for Extra-Contractual Obligations or Losses in Excess of Policy
Limits.

 

“Loss Adjustment Expenses” as used in this
Agreement shall mean all loss adjustment expenses incurred by the Company in
settling claims including costs and expenses allocable to a specific claim that
are incurred by the Company in the investigation, appraisal, adjustment,
settlement, litigation, defense or appeal of a specific claim, including court
costs and costs of supersedes and appeal bonds and including (i) pre-judgment
interest, unless included as part of the award or judgment; (ii) post-judgment
interest and (iii) legal expenses and costs incurred in connection with
coverage questions and legal actions connected thereto, including pro rata
declaratory judgment expenses.

 

Loss Adjustment Expenses shall include in-house adjusters, defense
attorneys, and other claims and legal personnel of Tower Insurance Company of
New York/Tower Risk Management and other costs allocated to the defense and
adjustment of a specific claim.

 

“Loss in Excess of Policy Limits” means any
amount of loss, together with any legal costs and expenses incurred in
connection therewith, paid as damages or in settlement by the Company in excess
of its Policy Limits, but otherwise within the coverage terms of the Policy,
arising from an allegation or claim of its insured, its insured’s assignee, or
other third party, which alleges negligence, gross negligence, or other
tortious conduct on the part of the Company in the handling of a claim
under a Policy or bond, in rejecting a settlement within the Policy Limits, in
discharging a duty to defend or prepare the defense in the trial of an action
against its insured, or in discharging its duty to prepare or prosecute an
appeal consequent upon such an action. For the avoidance of doubt, the decision
by the Company to settle a claim for an amount within the coverage of the
Policy but not within the Policy limit when the Company has reasonable basis to
believe that it may have liability to its insured or assignee or other
third party on the claim will be deemed a Loss in Excess of Policy Limits.

 

“Losses Incurred” shall mean Losses ceded and
Loss Adjustment Expense ceded as of the effective date of calculation, plus the
ceded reserves for Losses and Loss Adjustment Expense outstanding as of the
same date (including losses incurred but not reported), it being understood and
agreed that all Losses and related Loss Adjustment Expense under Policies with
effective or renewal dates during an adjustment period shall be charged to the
adjustment period, regardless of the date said Losses actually occur.

 

“Loss Occurrence” shall mean the sum of all
individual losses directly occasioned by any one disaster, accident or loss or series of
disasters, accidents or losses arising out of one event

 

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which occurs within the area of one state of the United States or
province of Canada and states or provinces contiguous thereto and to one
another. However, the duration and extent of any one “Loss Occurrence” shall be
limited to all individual losses sustained by the Company occurring during any
period of 168 consecutive hours arising out of and directly occasioned by the
same event except that the term “Loss Occurrence” shall be further defined as
follows:

 

(i)                                     As regards
windstorm, hail, tornado, hurricane, cyclone, including ensuing collapse and
water damage, all individual losses sustained by the Company occurring during
any period of 72 consecutive hours arising out of and directly occasioned by
the same event. However, the event need not be limited to one state or province
or states or provinces contiguous thereto.

 

(ii)                                  As regards riot, riot
attending a strike, civil commotion, vandalism and malicious mischief, all
individual losses sustained by the Company occurring during any period of 72
consecutive hours within the area of one municipality or county and the
municipalities or counties contiguous thereto arising out of and directly
occasioned by the same event. The maximum duration of 72 consecutive hours may be
extended in respect of individual losses which occur beyond such 72 consecutive
hours during the continued occupation of an assured’s premises by strikers,
provided such occupation commenced during the aforesaid period.

 

(iii)                               As regards earthquake
(the epicenter of which need not necessarily be within the territorial confines
referred to in the opening paragraph of this definition) and fire following
directly occasioned by the earthquake, only those individual fire losses which
commence during the period of 168 consecutive hours may be included in the
Company’s “Loss Occurrence.”

 

(iv)                              As regards “Freeze,” only
individual losses directly occasioned by collapse, breakage of glass and water
damage (caused by bursting of frozen pipes and tanks) may be included in
the Company’s “Loss Occurrence.

 

Except for those “Loss Occurrences” referred to in (i) and (ii) above,
the Company may choose the date and time when any such period of
consecutive hours commences provided that it is not earlier than the date and
time of the occurrence of the first recorded individual loss sustained by the
Company arising out of that disaster, accident or loss and provided that only
one such period of 168 consecutive hours shall apply with respect to one event.

 

However, as respects those “Loss Occurrences” referred to in (i) and
(ii) above, if the disaster, accident or loss occasioned by the event is
of greater duration than 72 consecutive hours, then the Company may divide
that disaster, accident or loss into two or more “Loss Occurrences” provided no
two periods overlap and no individual loss is included in more than one such
period and provided that no period commences earlier than the date and time of
the occurrence of the first recorded individual loss sustained by the Company
arising out of that disaster, accident or loss.

 

No individual losses occasioned by an event that would be covered by 72
hours clauses may be included in any “Loss Occurrence” claimed under the
168 hours provision.

 

3

 

“Net Liability” shall mean the liability for
Losses and Loss Adjustment Expenses which the Company retains net for its own
account and unreinsured in any way, except for excess of loss reinsurance,
after recoveries from inuring reinsurance.

 

“Net Loss Ratio” shall mean, for any period
of time, the ratio of Losses Incurred during such period to net Premiums Earned
for such period.

 

“Net Written Premium” shall mean direct
premium written on the Policies covered by this Agreement plus additions, less
refunds and return premium for cancellations and reductions (but not dividends)
and less premium paid or payable for reinsurance that inures to the benefit of
this Agreement.

 

“Obligations” shall have the meaning set
forth in Article XVI.

 

“Policy” or “Policies” shall mean all
policies, binders, contracts, certificates, or agreements of insurance, whether
written or oral, covering Specialty Program Business and Insurance Risk Sharing
Business in-force, issued or renewed on or after the Effective Date by the
Company.

 

“Premiums Earned” shall mean, with regards to
any adjustment period, ceded net written premiums for Policies with effective
or renewal dates during the adjustment period, less the unearned portion
thereof as of the effective date of calculation, it being understood and agreed
that all premiums for Policies with effective or renewal dates during an
adjustment period shall be credited to that adjustment period.

 

“Program Business” shall mean narrowly
defined classes of business that are underwritten on an individual policy basis
by a Program Underwriting Agent on behalf of insurance companies.

 

“Specialty Program Business” shall mean (i) Program
Business other than Traditional Program Business and (ii) Traditional
Program Business that Company elects not to manage but that CastlePoint
Management Corp. elects to manages.

 

“Terrorism” shall mean an act, including but
not limited to the use of force or violence and/or the threat thereof, any
person or group(s) of persons, whether acting alone or on behalf of or in
connection with any organization(s) or government(s), committed for political,
religious, ideological or similar purposes including the intention to influence
any government and/or to put the public, or any section of the public, in
fear that has been determined by the appropriate federal authority to have been
an act of terrorism.

 

Terrorism will include loss, damage, cost of expense of whatsoever
nature directly or indirectly caused by, resulting from or in connection with
any action taken in controlling, preventing, supervising or in any way relating
to any act of terrorism.

 

“Traditional Program Business” shall mean
blocks of Program Business in excess of $5 million in annual gross written
premium Tower historically has underwritten, consisting of non-auto related
personal lines and the following commercial lines of business: retail stores
and

 

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wholesale trades, commercial and residential real estate, restaurants,
grocery stores, office and service industries, and artisan contractors.

 

“Trust Account” shall have the meaning
specified in Article XVI.

 

“Trust Agreement” shall have the meaning
specified in Article XVI.

 

“Trustee” shall have the meaning specified in
Article XVI.

 

In the event any portion of this definition section is found to be
invalid or unenforceable, the remainder will remain in full force and effect.

 

ARTICLE III                                                   COMMENCEMENT
AND TERMINATION

 

A.                                    This Agreement is
effective at 12:01 a.m., Eastern Standard Time, April 1, 2006 (the “Effective
Date”) and shall have a term of three (3) years. Either party may terminate
the Agreement as of the date twelve (12) months after the Effective Date and on
the twelve month anniversary thereafter thereafter by giving at least sixty
(60) days prior written notice to the other party by certified or registered
mail, or as otherwise provided below.

 

B.                                     The Reinsurer
shall have the right to terminate this Agreement as of the date twenty four
(24) months after the Effective Date and annually thereafter by giving sixty
(60) days prior written notice by certified or registered mail to the Company
if the sum of the Net Loss Ratio plus (weighted) ceding commission percentage
hereunder for the Business Covered hereunder since the Effective Date equals or
exceeds 99 % at the end of the calendar quarter immediately preceding the date
of such notice. If the parties cannot agree as to the calculation of the Net
Loss Ratio or ceding commission, within 30 days of receiving the appropriate
report, the calculation shall be arbitrated. The actuarial firm of Towers Perrin
shall furnish an arbiter for Company and Reinsurer will choose another
actuarial firm to furnish its arbiter. Those two arbiters will select a third
independent actuarial firm to furnish the third arbiter. However, it is agreed
that in the event of termination by Reinsurer pursuant to this provision, the
parties will act reasonably to negotiate a new reinsurance agreement on terms
similar to those then being offered by other reinsurers.

 

C.                                     In the event
either party terminates this Agreement in accordance with Paragraph A. or B.
above, the Reinsurer shall participate in all Policies ceded within the terms
of this Agreement written or renewed by the Company after receipt of notice of
termination but prior to termination, and shall remain liable for all cessions
in force at termination of this Agreement; however, the liability of the
Reinsurer shall cease with respect to Loss Occurrences subsequent to the first
anniversary, natural expiration or cancellation of each Policy ceded, but not
to extend beyond twelve (12) months after such termination. The Company and the
Reinsurer may agree to terminate this Agreement or some portion of the
Business Covered on a cut-off basis. Upon such termination, the Reinsurer shall
incur no liability for Loss Occurrences subsequent to the effective date of
termination and the Reinsurer shall return to the Company the Reinsurer’s
portion of the unearned premium reserve for all in force Policies less
previously paid Ceding Commission on such unearned premium reserve.

 

5

 

D.                                    Either the Company
or the Reinsurer may terminate this Agreement at any time by the giving of
thirty (30) days prior written notice to the other party upon the happening of
any one of the following circumstances:

 

(1)                                  A State Insurance
Department or other legal authority orders the other party to cease writing
business, or;

 

(2)                                  The other party has
become merged with, acquired or controlled by any company, corporation, or
individual(s) not controlling the party’s operations previously, or

 

(3)                                  The other party has
reinsured its entire liability under this Agreement without the terminating
party’s prior written consent, or

 

(4)                                  The Company ceases to
retain any of the risks of the Business Covered.

 

E.                                      The Company may terminate
this Agreement immediately upon the happening of any of the following
circumstances:

 

(1)                                  The Reinsurer has
become insolvent or has been placed into liquidation or receivership (whether
voluntary or involuntary), or there has been instituted against it proceedings
for the appointment of a receiver, liquidator, rehabilitator, conservator, or
trustee in bankruptcy, or other agent known by whatever name, to take
possession of its assets or control of its operations, or

 

(2)                                  The Reinsurer’s
statutory policyholders’ surplus has been reduced by either 50% of the amount
of surplus at the inception of this Agreement or 50% of the amount at the
latest anniversary, whichever is greater, or has lost any part of, or has
reduced its paid-up capital, or

 

F.                                      The Company may terminate
this Agreement upon thirty (30) days notice if the A.M. Best Rating of the
Reinsurer falls below “A-”

 

G.                                     Notwithstanding
the foregoing, this Agreement will terminate upon the effective date of a
Specialty Program Business Pooling Agreement between the Company and
CastlePoint Insurance Company or such other entity designated by the Reinsurer.

 

H.                                    In the event of any
such termination under D., E., or F., the liability of the Reinsurer shall be
terminated in accordance with the termination provisions set forth in Paragraph
C. above. However, in the case of a termination under D or E, if the
terminating party is the Company, the Company shall have the right, by the
giving of prior written notice, to terminate this Agreement on a cut-off basis
as provided in Paragraph C. above.

 

ARTICLE IV                                                  TERRITORIAL
SCOPE

 

The territorial limits of this Agreement
shall be identical with those of the Company’s Policies.

 

6

 

ARTICLE V                                                      EXCLUSIONS

 

This Agreement shall not apply to and
specifically excludes:

 

A.                                   Nuclear Incident, in
accordance with the following clauses attached hereto:

 

1.                                       Nuclear Incident
Exclusion Clause – Physical Damage –Reinsurance – U.S.A. – NMA 1119;

 

2.                                       Nuclear Incident
Exclusion Clause – Liability – Reinsurance – U.S.A. – NMA 1590;

 

B.                                     War Risks, in
accordance with BRMA Clause 56B;

 

C.                                     Insolvency, in
accordance with BRMA Clause 20A;

 

D.                                    Liability assumed
by the Company as a member of any pool, association or syndicate, in accordance
with BRMA Clause 40A;

 

E.                                      Earthquake when
written as such;

 

F.                                      Liability arising
out of ownership, maintenance or use of any aircraft or flight operations;

 

G.                                     Professional
Liability, when written as such, however not to exclude when written as part of
a package Policy or when written in conjunction with other Policies issued by
the Company;

 

H.                                    Insolvency and
Financial Guarantee;

 

I.                                         Any
acquisitions of companies or books of business outside of the normal course of
business (“agent rollovers”) without the prior written consent of the Reinsurer
hereon;

 

J.                                        Asbestos
liabilities of any nature;

 

K.                                    Pollution
liabilities of any nature;

 

L.                                      Assumed
reinsurance with the exception of inter-affiliate reinsurance.

 

ARTICLE VI                                                  REINSURANCE
COVERAGE

 

A.                                        Upon the
contribution of capital to the Reinsurer by its parent in the amount of at
least $156 million, the Company shall automatically and obligatorily cede to
the Reinsurer, and the Reinsurer shall be obligated to accept as assumed
reinsurance, an 85% quota share portion of the Net Liabilities with respect to
such Policies, subject to adjustment as set forth below. The Company may, in
its sole discretion, change the quota share participation of the Reinsurer from
time to time effective as of any 6 month anniversary date of the effective date
of this Agreement upon not less than ninety (90) days prior written notice to
the Reinsurer; provided, however that the quota share
participation of the Company shall at all times during the term of this
Agreement

 

7

 

be a minimum of 15% and a maximum of 25%, and provided further that the
quota share participation of the Company does not exceed $25 million during the
first 12 month period ended March 31, 2007, with such maximum amount
subject to a 25% growth factor per twelve (12) month period thereafter. If the
Company’s quota share participation maximum of $25 million (subject to the
growth factor) is attained in any twelve month period ended March 31, then
the quota share participation percentage, which shall apply to all premiums and
losses on a pro-rated basis for such period, shall be decreased for that 12
month period even if such participation is below 15%. Each such change shall
apply to Policies issued or renewed after the effective date of such change.

 

B.                                     The Reinsurer’s
liability as respect Losses shall be subject to the following limits:

 

	
  Property:

  	
  $1,000,000 Per Risk

  
	
   

  	
   

  
	
   

  	
  $10,000,000 Per Occurrence

  
	
   

  	
   

  
	
  Liability:

  	
  $1,000,000 Per Claim

  
	
   

  	
   

  
	
  Terrorism Sub-Limit:

  	
  $10,000,000 Per Occurrence property and
  liability combined

  

 

ARTICLE VII                                              REINSURANCE
PREMIUM

 

As premium for the reinsurance provided by this Agreement, the Company
shall cede to the Reinsurer an amount equal to the Reinsurer’s quota share
cession of the Net Written Premium of the Company for the Business Covered by
this Agreement. The Company’s ceded net unearned premium reserve for the
Business Covered for the 2005 and 2006 treaty years as of March 31, 2006
was $250,369.

 

ARTICLE VIII                                          CEDING
COMMISSION

 

The Reinsurer shall allow the Company a 30%
commission on all premiums ceded hereunder. The ceding commission may be
adjusted every six (6) months on each six (6) month anniversary of
the Effective Date based on the Net Loss Ratio of the Specialty Program
Business and Insurance Risk Sharing Business ceded hereunder from the Effective
Date. It shall increase by nine-tenths of a percentage point for every 1.0
percentage point decline in the Net Loss Ratio below 63% up to a maximum ceding
commission of 36%, as follows:

 

	
  Net Loss Ratio

  	
   

  	
  Ceding Commission

  	
   

  
	
  63.0% or
  higher

  	
   

  	
  30.0

  	
  %

  
	
  62

  	
   

  	
  30.9

  	
   

  
	
  61

  	
   

  	
  31.8

  	
   

  
	
  60

  	
   

  	
  32.7

  	
   

  
	
  59

  	
   

  	
  33.6

  	
   

  
	
  58

  	
   

  	
  34.5

  	
   

  
	
  57

  	
   

  	
  35.4

  	
   

  
	
  56.33 or
  lower

  	
   

  	
  36.0

  	
   

  

 

8

 

The Company shall allow the Reinsurer return
commission on return premiums at the same rate. It is expressly agreed that the
ceding commission allowed the Company includes provision for all dividends,
commissions, taxes, assessments, and all other expenses of whatever nature,
except loss adjustment expense. However, in the event that regulatory
authorities do not approve an intercompany transaction containing these ceding
commissions, the pariticipating companies shall use their best good faith
effort to structure the transaction for the Participating Companies in order
that the sum of the Net Loss Ratio plus ceding commission percentage equals 93%
for the Specialty Program Business and Insurance Risk Sharing Business.

 

ARTICLE IX                                                  REPORTS
AND REMITTANCES

 

A.                                   Within forty five
(45) days following the end of each calendar month during the term of this
Agreement, the Company shall provide the Reinsurer with a report summarizing
the following with regards to such month and on a cumulative basis:

 

1.                                       Net Written
Premium and ceded Net Written Premiums received by line of business;

2.                                       Net Premiums
Earned and ceded net Premiums Earned by line of business;

3.                                       Ceding
commission due on ceded Net Written Premium received;

4.                                       Net ceded Loss
and Loss Adjustment Expenses paid by line of business; and

5.                                       Salvage
recovered plus net salvage recovered by line of business.

 

In addition, the Company shall furnish the
Reinsurer such other information as may be required by the Reinsurer for
completion of its financial statements.

 

B.                                     Amounts due by
either party shall be (1) ceded Net Written Premiums received less (2) ceding
commission on ceded Net Written Premiums received less (3) ceded Loss and
Loss Adjustment Expenses paid plus (4) net salvage recovered, and shall be
remitted within 15 days of the report on a collected basis. Should payment due
from the Reinsurer exceed $100,000 as respects any one Loss Occurrence, the
Company may give the Reinsurer notice of payment made or its intention to
make payment on a certain date. If the Company has paid the loss, payment shall
be made by the Reinsurer immediately after receipt of notice from the Company. If
the Company intends to pay the loss by a certain date and has submitted a
satisfactory proof of loss or similar document, payment shall be due from the
Reinsurer 24 hours prior to that date, provided the Reinsurer has a period of
five working days after receipt of said notice to make the payment. Cash
amounts specifically remitted by the Reinsurer as set forth herein shall be
credited to the next monthly account.

 

9

 

ARTICLE X                                                      EXTRA-CONTRACTUAL
OBLIGATIONS/LOSS EXCESS OF POLICY LIMITS

 

A.                                   The Reinsurer shall
protect the Company for the Reinsurer’s quota share portion of
Extra-Contractual Obligations and Loss Excess of Policy Limits, subject to the
limitations set forth in Article VI.

 

B.                                     An
Extra-Contractual Obligation or a Loss Excess of Policy Limits shall be deemed
to have occurred on the same date as the loss covered under the Company’s
original Policy and shall be considered part of the original loss (subject
to other terms of this Agreement.)

 

C.                                     Neither an
Extra-Contractual Obligation nor a Loss Excess of Policy Limits shall include a
loss incurred by the Company as the result of any bad faith, fraudulent or
criminal act by the Company.

 

D.                                    Recoveries, whether
collectible or not, including any retentions and/or deductibles, from any other
form of insurance or reinsurance which protect the Company against any
loss or liability covered under this Article shall inure to the benefit of
the Reinsurer and shall be deducted from the total amount of any
Extra-Contractual Obligation and/or Loss Excess of Policy Limits in determining
the amount of Extra-Contractual Obligation and/or Loss Excess of Policy Limits
that shall be indemnified under this Article.

 

E.                                      The Company shall
be indemnified in accordance with this Article to the extent permitted by,
and not contrary to, New York and other applicable law.

 

ARTICLE XI                                                  ORIGINAL
CONDITIONS

 

The Reinsurer’s liability to the Company
shall attach simultaneously with that of the Company and the reinsurance of all
Business Covered hereunder shall be subject in all respects to the same risks,
terms, clauses, conditions, interpretations, alterations, modifications
cancellations and waivers as the respective insurances (or reinsurances) of the
Company’s Policies and the Reinsurer shall pay losses as may be paid
thereon, the true intent of this Agreement being that in each and every case to
which this Agreement applies, the Reinsurer shall follow the settlements and
fortunes of the Company, subject always to the limits, terms and conditions of
this Agreement.

 

ARTICLE XII                                              ERRORS
AND OMISSIONS

 

Inadvertent delays, errors or omissions made
by the Company in connection with this Agreement (including the reporting of
claims) shall not relieve the Reinsurer from any liability which would have
attached had such delay, error or omission not occurred, provided always that
such delay, error or omission shall be rectified as soon as possible after
discovery.

 

ARTICLE XIII                                          CURRENCY

 

Whenever the word “Dollars” or the “$” sign
appears in this Agreement, they shall be construed to mean United States
Dollars and all transactions under this Agreement shall be in United States
Dollars. Amounts paid or received by the Company in any other currency shall be

 

10

 

converted to United States Dollars at the rate of exchange at the date
such transaction is entered on the books of the Company.

 

ARTICLE XIV                                         FEDERAL
EXCISE TAX AND OTHER TAXES

 

A.                                   To the extent that
any portion of the reinsurance premium for this Agreement is subject to the
Federal Excise Tax (as imposed under Section 4371 of the Internal Revenue
Code) and the Reinsurer is not exempt therefrom, the Reinsurer shall allow for
the purpose of paying the Federal Excise Tax, a deduction by the Company of the
applicable percentage of the premium payable hereon. In the event of any return
of premium becoming due hereunder, the Reinsurer shall deduct the applicable
same percentage from the return premium payable hereon and the Company or its
agent shall take steps to recover the tax from the United States Government. In
the event of any uncertainty, upon the written request of the Company, the
Reinsurer will immediately file a certificate of a senior corporate officer of
the Reinsurer certifying to its entitlement to the exemption from the Federal
Excise Tax with respect to one or more transactions.

 

B.                                     In consideration
of the terms under which this Agreement is issued, the Company undertakes not
to claim any deduction of the premium hereon when making tax returns, other
than income or profits tax returns, to any State or Territory of the United
States of America or to the District of Columbia.

 

ARTICLE XV                                             ACCESS
TO RECORDS

 

The Company shall place at the disposal of
the Reinsurer at all reasonable times, and the Reinsurer shall have the right
to inspect (and make reasonable copies) through its designated representatives,
during the term of this Agreement and thereafter, all books, records and papers
of the Company directly related to any reinsurance hereunder, or the subject
matter hereof, provided that if the Reinsurer has ceased active market
operations, this right of access shall be subject to that Reinsurer being
current in all payments owed the Company.

 

ARTICLE XVI                                         RESERVES

 

A.                                   If any Reinsurer is
unauthorized or otherwise unqualified in any state or other United States
jurisdiction, and if, without such security, a financial penalty to the Company
would result on any statutory statement or report it is required to make or
file with insurance regulatory authorities or a court of law in the event of
insolvency, the Reinsurer will timely secure the Reinsurer’s share of
obligations under this Agreement in a manner, form, and amount acceptable to
the Company and to all applicable insurance regulatory authorities in
accordance with this Article.

 

B.                                     The Reinsurer
shall secure such Obligations by either:

 

1.                                       Clean,
irrevocable, and unconditional evergreen letter(s) of credit (“Letter(s) of
Credit”) meeting the requirements of New York Regulation 133; and/or

 

2.                                       A trust account
meeting the requirements of New York Regulation 114.

 

11

 

C.                                     The “Obligations”
referred to herein means the then current (as of the end of each calendar
quarter) sum of:

 

1.                                       The amount of
the ceded unearned premium reserve for which the Reinsurer is responsible to
the Company;

 

2.                                       The amount of
Losses and Loss Adjustment Expenses and other amounts paid by the Company for
which the Reinsurer is responsible to the Company but has not yet paid;

 

3.                                       The amount of
ceded reserves for Losses and Loss Adjustment Expenses (including, ceded
reserves for losses incurred but not reported) for which the Reinsurer is
responsible to the Company; and

 

4.                                       The amount of
return and refund premiums paid by the Company for which the Reinsurer is
responsible to the Company but has not yet paid.

 

D.                                    To the extent that
the Reinsurer elects to provide Letter(s) of Credit, the following shall apply.

 

1.                                       Each Letter of
Credit will be issued for a term of at least one year and will include an “evergreen
clause”, which automatically extends the term for at least one additional year
at each expiration date unless written notice of non-renewal is given to the
Company not less than 30 days prior to said expiration date.

 

2.                                       The Letter of
Credit must be issued or confirmed by a bank which is authorized to issue
letters of credit, which is either a member of the Federal Reserve System or is
a New York State chartered bank, and which in all other respects satisfies the
definition of a “Qualified Bank” under Section 79.1(e) of New York
Insurance Regulation 133. If the Letter of Credit is issued by a bank
authorized to issue letters of credit but which is not such a “Qualified Bank”,
then the Letter of Credit must be confirmed by such a bank and the Letter of
Credit must meet all of the conditions set forth in Section 79.4 of New
York Insurance Regulation 133.

 

3.                                       The Reinsurer
and the Company agree that the Company may draw upon the Letter(s) of
Credit at any time, notwithstanding any other provisions in the Agreement,
provided such assets are applied and utilized by the Company or any successor
of the Company by operation of law, including, without limitation, any
liquidator, rehabilitator, receiver or conservator of the Company, without
diminution because of the insolvency of the Company or the Reinsurer, only for
the following purposes:

 

(i)                                     to reimburse the
Company for the Reinsurer’s share of premiums returned to the owners of policies
reinsured under this Agreement on account of cancellations of such policies;

 

(ii)                                  to reimburse the
Company for the Reinsurer’s share of surrenders and benefits or losses paid by
the Company under the terms and provisions of the policies reinsured under this
Agreement;

 

12

 

(iii)                               to fund an account with
the Company in an amount at least equal to the deduction, for reinsurance
ceded, from the Company’s liabilities for policies ceded under this Agreement. Such
amount shall include, but not be limited to, amounts for policy reserves for
claims and losses incurred (including losses incurred but not reported), loss
adjustment expenses, and unearned premiums; and

 

(iv)                              to pay any other amounts
the Company claims are due under this Agreement.

 

4.                                       The Company
shall immediately return to the Reinsurer any amounts drawn down on the Letter
of Credit that are subsequently determined not to be due.

 

5.                                       The issuing bank
shall have no responsibility whatsoever in connection with the propriety of
withdrawals made by the Company of the disposition of funds withdrawn, except
to ensure that withdrawals are made only upon the order of properly authorized
representatives of the Company.

 

E.                                      To the extent
that the Reinsurer elects to establish a trust account, the following shall
apply.

 

1.                                       It is agreed
that the Reinsurer shall enter into a trust agreement (the “Trust Agreement”)
in a form acceptable to the Company and establish a trust account (the “Trust
Account”) for the sole benefit of the Company with a trustee (the “Trustee”),
which shall be at the time the Trust is established, and shall continue to be,
either a member of the Federal Reserve System or a New York state chartered
bank and which shall not be a parent, subsidiary or affiliate of the Reinsurer
or the Company.

 

2.                                       The Reinsurer
agrees to deposit and maintain in said Trust Account assets to be held in trust
by the Trustee for the benefit of the Company as security for the payment of
the Reinsurer’s Obligations to the Company under the Agreement. Such assets
shall be maintained in the Trust Account by the Reinsurer as long as the
Reinsurer continues to remain liable for such Obligations.

 

3.                                       The Reinsurer
agrees that the assets deposited into the Trust Account shall be valued
according to their current fair market value and shall consist only of currency
of the United States of America, certificates of deposit issued by a United
States bank and payable in United States legal tender, and investments of the
types specified in paragraphs (1), (2), (3), (8) and (10) of Section 1404(a) of
the New York Insurance Law, provided such investments are issued by an
institution that is not the parent, subsidiary or affiliate of either the
Grantor or the Beneficiary (“Authorized Investments”).

 

4.                                       The Reinsurer,
prior to depositing assets with the Trustee, shall execute all assignments and
endorsements in blank, and shall transfer legal title to the Trustee of all
shares, obligations or any other assets requiring assignments, in order that
the Company, or the Trustee upon direction of the Company, may whenever
necessary negotiate any such assets without consent or signature from the
Reinsurer or any other entity.

 

13

 

5.                                       All settlements
of account under the Trust Agreement between the Company and Reinsurer shall be
made in cash or its equivalent.

 

6.                                       The Reinsurer
and the Company agree that the assets in the Trust Account may be
withdrawn by the Company at any time, notwithstanding any other provisions in
the Agreement, provided such assets are applied and utilized by the Company or
any successor of the Company by operation of law, including, without
limitation, any liquidator, rehabilitator, receiver or conservator of the
Company, without diminution because of the insolvency of the Company or the
Reinsurer, only for the following purposes:

 

(i)                                     to reimburse the
Company for the Reinsurer’s share of any Losses and Loss Adjustment Expenses
paid by the Company but not received from the Reinsurer or for unearned
premiums due to the Company but not otherwise paid by the Reinsurer under the
Agreement; or

 

(ii)                                  to make payment to
the Reinsurer of any amounts held in the Trust Account that exceed 102% of the
Reinsurer’s Obligations (less the balance of credit available under any
Letter(s) of Credit) hereunder; or

 

(iii)                               where the Company has
received notification of termination of the Trust Account, and where the
Reinsurer’s entire Obligations under the Agreement remain unliquidated and
undischarged ten (10) days prior to such termination, to withdraw amounts
equal to such Obligations (less the balance of credit available under any
Letter(s) of Credit) and deposit such amounts in a separate account, in the
name of the Company, in any United States bank or trust company, apart from
its general assets, in trust for such uses and purposes specified in
sub-paragraphs (i) and (ii) above as may remain executory after
such withdrawal and for any period after such termination.

 

7.                                       The Reinsurer
shall have the right to seek the Company’s approval to withdraw all or any part of
the assets from the Trust Account and transfer such assets to the Reinsurer,
provided that the withdrawal conforms to the following requirements:

 

(i)                                     the Reinsurer
shall, at the time of withdrawal, replace the withdrawn assets with other
Authorized Investments having a market value equal to the market value of the
assets withdrawn,

 

(ii)                                  after such withdrawal
and transfer, the market value of the Trust Account is no less than 102% of the
Reinsurer’s Obligations (less the balance of credit available under any
Letter(s) of Credit).

 

8.                                       In the event
that the Reinsurer seeks the Company’s approval hereunder, the Company shall
not unreasonably or arbitrarily withhold its approval.

 

9.                                       In the event
that the Company withdraws assets from the Trust Account for the purposes set
forth in Paragraph (6)(i) above in excess of actual amounts required to
meet the Reinsurer’s Obligations to the Company (less the balance of credit
available under any Letter(s) of Credit), or in excess of amounts determined to
be due and under Paragraph (6)(iii) above, the Company will return such
excess to the Reinsurer.

 

14

 

10.                                 The Company will
prepare and forward at annual intervals or more frequently as determined by the
Company, but not more frequently than quarterly to the Reinsurer a statement
for the purposes of this Article, showing the Reinsurer’s share of Obligations
as set forth above. If the Reinsurer’s share thereof exceeds the then existing
balance of the security provided, the Reinsurer will, within fifteen (15) days
of receipt of the Company’s statement, but never later than December 31 of
any year, increase the amount of the letter of credit, or Trust Account to the
required amount of the Reinsurer’s share of Obligations set forth in the
Company’s statement, but never later than December 31 of any year. If the
then existing balance of the security provided exceeds an amount equal to 100%
of the Reinsurer’s share thereof, the Company will release the excess thereof
to the Reinsurer upon the Reinsurer’s written request.

 

F.                                      The Reinsurer
will take any other reasonable steps that may be required for the Company
to take full credit on its statutory financial statements for the reinsurance
provided by this Agreement.

 

ARTICLE XVII                                     SERVICE
OF SUIT

 

A.                                   This Article only
applies to a Reinsurer domiciled outside of the United States and/or
unauthorized in any state, territory or district of the United States having
jurisdiction over the Company. Furthermore, this Article will not be read
to conflict with or override the obligations of the parties to arbitrate their
disputes as provided for in the Article entitled Arbitration. This Article is
intended as an aid to compelling arbitration or enforcing such arbitration or
arbitral award, not as an alternative to the Arbitration Article for
resolving disputes arising out of this Agreement.

 

B.                                     In the event of
any dispute, the Reinsurer, at the request of the Company, shall submit to the
jurisdiction of a court of competent jurisdiction within the United States. Nothing
in this Article constitutes or should be understood to constitute a waiver
of any obligation to arbitrate disputes arising from this Agreement or the
Reinsurer’s rights to commence an action in any court of competent jurisdiction
in the United States, to remove an action to a United States District Court, or
to seek a transfer of a case to another court as permitted by the laws of the
United States or of any state in the United States.

 

C.                                     Service of process
in any such suit against the Reinsurer may be made upon Mendes and Mount,
750 Seventh Avenue, New York, New York 10019-6829 (“Firm”), or the party
identified on behalf of the Reinsurer on the Reinsurer’s signature page to
this Agreement, and in any suit instituted, the Reinsurer shall abide by the
final decision of such court or of any Appellate Court in the event of an
appeal.

 

D.                                    The Firm is
authorized and directed to accept service of process on behalf of the Reinsurer
in any such suit and/or upon the request of the Company to give a written
undertaking to the Company that they shall enter a general appearance upon the
Reinsurer’ behalf in the event such a suit shall be instituted.

 

E.                                      Further, as
required by and pursuant to any statute of any state, territory or district of
the United States which makes provision therefore, the Reinsurer hereby
designates the Superintendent, Commissioner or Director of Insurance or other
officer specified for that

 

15

 

purpose in the statute, or his successor or successors in office, as
their true and lawful attorney upon whom may be served any lawful process
in any action, suit or proceeding instituted by or on behalf of the Company or
any beneficiary hereunder arising out of this Agreement, and hereby designates
the above-named as the person to whom the said officer is authorized to mail
such process or a true copy thereof.

 

ARTICLE XVIII                                 ARBITRATION

 

A.                                   Any dispute or other
matter in question between the Company and the Reinsurer arising out of, or
relating to, the formation, interpretation, performance, or breach of this
Agreement, whether such dispute arises before or after termination of this
Agreement, shall be settled by arbitration. Arbitration shall be initiated by
the delivery of a written notice of demand for arbitration by one party to the
other within a reasonable time after the dispute has arisen.

 

B.                                     If more than one
reinsurer is involved in the same dispute, all such reinsurers shall constitute
and act as one party for the purposes of this Article, provided, however, that
nothing herein shall impair the rights of such reinsurers to assert several,
rather than joint, defenses or claims, nor be construed as changing the liability
of the Reinsurer under the terms of this Agreement from several to joint.

 

C.                                     Except as set
forth in Article III, each party shall appoint an individual as arbitrator
and the two so appointed shall then appoint a third arbitrator. If either party
refuses or neglects to appoint an arbitrator within 60 days, the other party may appoint
the second arbitrator. If the two arbitrators do not agree on a third
arbitrator within 60 days of the appointment of the second arbitrator, each of
the arbitrators shall nominate three individuals. If the two arbitrators are
unable to agree upon the third arbitrator within thirty (30) days of their
appointment, the third arbitrator shall be selected from a list of six
individuals (three named by each arbitrator) by a judge of the United States
District Court having jurisdiction over the geographical area in which the
arbitration is to take place, or if that court declines to act, the state court
having general jurisdiction in such area. The arbitrators shall be active or
retired officers of insurance or reinsurance companies or Lloyd’s of London
Underwriters; the arbitrators shall not have a personal or financial interest
in the result of the arbitration.

 

D.                                    The arbitration
hearings shall be held in New York, New York. Each party shall submit its case
to the arbitrators within 60 days of the selection of the third arbitrator or
within such longer period as may be agreed by the arbitrators. The
arbitrators shall not be obliged to follow judicial formalities or the rules of
evidence except to the extent required by governing law, that is, the state law
of the situs of the arbitration as herein agreed; they shall make their
decisions according to the practice of the reinsurance business. The decision
rendered by a majority of the arbitrators shall be final and binding on both
parties. Such decision shall be a condition precedent to any right of legal
action arising out of the arbitrated dispute which either party may have
against the other. Judgment upon the award rendered may be entered in any
court having jurisdiction thereof.

 

E.                                      Each party shall
pay the fee and expenses of its own arbitrator and one-half of the fee and
expenses of the third arbitrator. All other expenses of the arbitration shall
be equally divided between the parties.

 

16

 

F.                                      Except as
provided above, arbitration shall be based, insofar as applicable, upon the
procedures of the American Arbitration Association.

 

ARTICLE XIX                                         INSOLVENCY

 

A.                                   The reinsurance
shall be payable by the reinsurer on the basis of liability of the Company
under the Policies reinsured without diminution because of the insolvency of
the Company and the liability for such reinsurance is assumed by the Reinsurer
as of the same effective date. In the event of insolvency and the appointment
of a conservator, liquidator, or statutory successor of the Company, the
portion of any risk or obligation assumed by the Reinsurer shall be payable to
the conservator, liquidator, or statutory successor on the basis of claims
allowed against the insolvent Company by any court of competent jurisdiction or
by any conservator, liquidator, or statutory successor of the Company having
authority to allow such claims, without diminution because of that insolvency, or
because the conservator, liquidator, or statutory successor has failed to pay
all or a portion of any claims.

 

B.                                     Payments by the
Reinsurer as above set forth shall be made directly to the Company or to its
conservator, liquidator, or statutory successor, except where the Agreement of
insurance or reinsurance specifically provides another payee of such
reinsurance or except as provided by applicable law and regulation (such as subsection (a) of
section 4118 of the New York Insurance laws) in the event of the
insolvency of the Company.

 

C.                                     In the event of
the insolvency of the Company, the liquidator, receiver, conservator or
statutory successor of the Company shall give written notice to the Reinsurer
of the pendency of a claim against the insolvent Company on the Policy or
Policies reinsured within a reasonable time after such claim is filed in the
insolvency proceeding and during the pendency of such claim the Reinsurer may investigate
such claim and interpose, at its own expense, in the proceeding where such
claim is to be adjudicated any defense or defenses which it may deem
available to the Company or its liquidator, receiver, conservator or statutory
successor. The expense thus incurred by the Reinsurer shall be chargeable
subject to court approval against the insolvent Company as part of the
expense of liquidation to the extent of a proportionate share of the benefit
which may accrue to the Company solely as a result of the defense
undertaken by the Reinsurer.

 

D.                                    Where two or more
Reinsurers are involved in the same claim and a majority in interest elects to
interpose defense to such claim, the expense shall be apportioned in accordance
with the terms of this Agreement as though such expense had been incurred by
the Company.

 

ARTICLE XX                                             CLAIMS
COOPERATION 

 

When so requested in writing, the Company
shall afford the Reinsurer or its representatives an opportunity to be
associated with the Company, at the expense of the Reinsurer, in the defense of
any claim, suit or proceeding involving this reinsurance, and the Company and
the Reinsurer shall cooperate in every respect in the defense of such claim,
suit or proceeding, provided the Company shall have the right to make any
decision in the event of disagreement over any matter of defense or settlement.

 

17

 

ARTICLE XXI                                         CONFIDENTIALITY

 

A.                                   The information,
data, statements, representations and other materials provided by the Company
or the Reinsurer to the other arising from consideration and participation in
this Agreement whether contained in the reinsurance submission, this Agreement,
or in materials or discussions arising from or related to this Agreement, may contain
confidential or proprietary information as expressly indicated by the
disclosing party in writing from time to time to the other party of the
respective parties (“Confidential Information”). This Confidential Information
is intended for the sole use of the parties to this Agreement (and their
retrocessionaires, respective auditors and legal counsel) as may be
necessary in analyzing and/or accepting a participation in and/or executing
their respective responsibilities under or related to this Agreement. Disclosing
or using Confidential Information disclosed under this Agreement for any
purpose beyond (i) the scope of this Agreement, (ii) the reasonable
extent necessary to perform rights and responsibilities expressly provided
for under this Agreement, (iii) the reasonable extent necessary to
administer, report to and effect recoveries from retrocessional reinsurers, (iv) the
extent necessary to comply with legal or regulatory requirements or (v) persons
with a need to know the information and who are obligated to maintain the
confidentiality of the Confidential Information or who have agreed in writing
to maintain the confidentiality of the Confidential Information is expressly
forbidden without the prior written consent of the disclosing party. Copying,
duplicating, disclosing, or using Confidential Information for any purpose
beyond this expressed purpose is forbidden without the prior written consent of
the disclosing party.

 

B.                                     Should a party (“Receiving
Party”) receive a third party demand pursuant to subpoena, summons, or court or
governmental order, to disclose Confidential Information that has been provided
by another party to this Agreement (“Disclosing Party”), the Receiving Party
shall, to the extent permitted by law, make commercially reasonable efforts to
notify the Disclosing Party promptly upon receipt of the demand and prior to
disclosure of the Confidential Information and provide the Disclosing Party a
reasonable opportunity to object to the disclosure. If such notice is provided,
the Receiving Party may after the passage of five (5) business days
after providing notice, proceed to disclose the Confidential Information as
necessary to satisfy such a demand without violating this Agreement. If the
Disclosing Party timely objects to the release of the Confidential Information,
the Receiving Party will comply with the reasonable requests of the Disclosing
Party in connection with the Disclosing Party’s efforts to resist release of
the Confidential Information. The Disclosing Party shall bear the cost of
resisting the release of the Confidential Information.

 

ARTICLE XXII                                     OFFSET

 

The Company and the Reinsurer shall have the
right to offset any balance or amounts due from one party to the other under
the terms of this Agreement, as permitted by sections 1308 and 7427 of the New
York Insurance Law. The party asserting the right of offset may exercise
such right any time whether the balances due are on account of premiums or
losses or otherwise. However, in the event of the insolvency of any party
hereto, offset shall only be allowed in accordance with applicable law.

 

18

 

ARTICLE XXIII                                 RECOVERIES

 

A.                                   All recoveries,
including but not limited to salvage, subrogation, payments and reversals or
reductions of verdicts or judgments (net of the cost of obtaining such
recovery, payment or reversal or reduction of a verdict or judgment) whether
recovered, received or obtained prior or subsequent to a loss settlement under
this Agreement, including amounts recoverable under other reinsurance whether
collected or not, shall be applied as if recovered, received or obtained prior
to the aforesaid settlement and shall be deducted from the actual losses
sustained to arrive at the amount of the Net Liability. Nothing in this Article shall
be construed to mean amounts are not recoverable from the Reinsurer until the final
Net Liability to the Company has been ascertained. Amounts recovered from
salvage and/or subrogation will always be used to reimburse any excess
reinsurers (and the Company should it carry a portion of excess coverage net)
before being used in any way to reimburse the Company and the Reinsurer hereon,
who will share pro-rata in any remainder.

 

B.                                     The Reinsurer
shall be subrogated, as respects any Loss Occurrence for which the Reinsurer
shall actually pay or become liable, but only to the extent of the amount of
payment by or the amount of liability to the Reinsurer, to all the rights of
the Company against any person or other entity who may be legally
responsible for damages as a result of said Loss Occurrence. Should the Company
elect not to enforce such rights, the Reinsurer is hereby authorized and
empowered to bring any appropriate action in the name of the Company or its
policyholders, or otherwise to enforce such rights. The Reinsurer shall
promptly remit to the Company the amount of any judgment awarded in such an
action in excess of the amount of payment by, or the amount of liability to,
the Reinsurer hereunder.

 

C.                                     In the event that
this Agreement shall provide reinsurance for the Net Liability from a Loss
Occurrence or event incurred by two or more Companies, each Company
contributing to the Net Liability shall be entitled to its proportionate share
of the recovery in the proportion that its contribution to the total Net
Liability bears to the total Net Liability. Payment of any recovery amount to
one Company by the Reinsurer shall make that Company the agent for payment of
all other Companies contributing to the Net Liability.

 

ARTICLE XXIV                                MISCELLANEOUS

 

A.                                   This Agreement shall
be binding upon and inure to the benefit of the Company and Reinsurer and their
respective successors and assigns provided, however, that this Agreement may not
be assigned by either party without the prior written consent of the other
which consent may be withheld by either party in its sole unfettered
discretion. This provision shall not be construed to preclude the assignment by
the Company of reinsurance recoverables to another party for collection.

 

B.                                     This Agreement
shall constitute the entire agreement between the parties with respect to the
Business Covered hereunder. There are no understandings between the parties
other than as expressed in this Agreement or any amendment thereto. Any change
or modification of this Agreement shall be null and void unless made by
amendment to the Agreement and signed by the parties or otherwise clearly and
unequivocally amended by

 

19

 

exchange of letters or electronic mail. Nothing in this Article shall
act to preclude the introduction of submission-related documents in any dispute
between the parties.

 

C.                                     This Agreement
shall be governed by and construed according to the laws of the state of the
New York, exclusive of the rules with respect to conflicts of law.

 

D.                                    The headings
preceding the text of the Articles and paragraphs of this Agreement are
intended and inserted solely for the convenience of reference and shall not
affect the meaning, interpretation, construction or effect of this Agreement.

 

E.                                      This Agreement is
solely between the Company and the Reinsurer, and in no instance shall any
insured, claimant or other third party have any rights under this Agreement.

 

F.                                      If any provisions
of this Agreement should be invalid under applicable laws, the latter shall
control but only to the extent of the conflict without affecting the remaining
provisions of this Agreement.

 

G.                                     The failure of the
Company or Reinsurer to insist on strict compliance with this Agreement or to
exercise any right or remedy shall not constitute a waiver of any rights
contained in this Agreement nor estop the parties from thereafter demanding
full and complete compliance nor prevent the parties from exercising any
remedy.

 

H.                                    Each party shall be
excused for any reasonable failure or delay in performing any of its respective
obligations under this Agreement, if such failure or delay is caused by Force
Majeure. “Force Majeure” shall mean any act of God, strike, lockout, act of
public enemy, any accident, explosion, fire, storm, earthquake, flood, drought,
peril of sea, riot, embargo, war or foreign, federal, state or municipal order
or directive issued by a court or other authorized official, seizure,
requisition or allocation, any failure or delay of transportation, shortage of
or inability to obtain supplies, equipment, fuel or labor or any other
circumstance or event beyond the reasonable control of the party relying upon
such circumstance or event; provided, however, that no such Force Majeure
circumstance or event shall excuse any failure or delay beyond a period
exceeding ten (10) days from the date such performance would have been due
but for such circumstance or event.

 

I.                                         All Articles
of this Agreement shall survive the termination of this Agreement until all
obligations between the parties have been finally settled, provided however
that this Agreement shall not be construed to provide reinsurance for Business
Covered, other than as specifically described in the Articles of this Agreement
entitled Reinsurance Coverage nor to Loss occurring after the termination date
of this Agreement other than as expressed in the Article entitled
Commencement and Termination.

 

J.                                        This Agreement may be
executed by the parties hereto in any number of counterparts, and by each of
the parties hereto in separate counterparts, each of which counterparts, when
so executed and delivered, shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.

 

K.                                    Each party to this
agreement shall honor the terms set forth herein as if this Agreement were a
separate agreement between the reinsurer and each company. Balances

 

20

 

payable or recoverable by any reinsurer, or each named Company, shall
not serve to offset any balances, payable, or recoverable to, any company
hereunder.

 

Reports and remittances made to the Reinsurer
in accordance with the applicable articles hereof are to be in sufficient
detail to identify both the Reinsurer’s loss obligations due each reinsured
company and each reinsured company’s premium remittance under the report. In
the event of insolvency of any of the parties to this Agreement, offsets shall
only be allowed in accordance with section 7427 of the New York Insurance
Law.

 

L.             This
Agreement is entered into as of the date hereof by the parties hereto subject
in any case to the satisfaction of applicable insurance regulatory requirements
of New York and Massachusetts, including any conditions such regulators may impose
on the terms of this Agreement subsequent to the date hereof. Subject to the
foregoing, this Agreement shall be effective as of April 1, 2006.

 

[Signature Page Follows]

 

21

 

IN WITNESS WHEREOF,
the Company and the Reinsurer have caused this Amended and Restated Agreement
to be executed August 30, 2006.

 

	
   

  	
  TOWER INSURANCE COMPANY OF NEW YORK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Francis M. Colalucci

  	
   

  
	
   

  	
   

  	
  Name: Francis M. Colalucci

  
	
   

  	
   

  	
  Title: Senior Vice-President and Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TOWER NATIONAL INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Francis M. Colalucci

  	
   

  
	
   

  	
   

  	
  Name: Francis M. Colalucci

  
	
   

  	
   

  	
  Title: Senior Vice-President and Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CASTLEPOINT REINSURANCE COMPANY, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph Beitz

  	
   

  
	
   

  	
   

  	
  Name: Joseph Beitz

  
	
   

  	
   

  	
  Title: Acting President

  

 

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Exhibit 4.2  

        EXECUTION
VERSION 

 
 

$ 1,000,000,000
  
    Edison Mission Energy
  
    $500,000,000 7.50% Senior Notes due 2013
  $500,000,000 7.75% Senior Notes due 2016
  
    REGISTRATION RIGHTS AGREEMENT
   
    

        June 6, 2006 

J.P.
Morgan Securities Inc.

As representative of the Initial Purchasers

listed in Schedule A hereto

    270 Park Avenue

    New York, NY 10017 

Dear
Sirs: 

        Edison
Mission Energy, a Delaware corporation (the "Issuer"), proposes to issue and sell to the several initial purchasers named on  Schedule A hereto (the
"Initial Purchasers"), upon the terms set forth in a purchase agreement,
dated as of May 19, 2006 (the "Purchase Agreement"), $500,000,000 aggregate principal amount of its 7.50% Senior Notes due 2013 (the
"2013 Notes") and $500,000,000 aggregate
principal amount of its 7.75% Senior Notes due 2016 (the "2016 Notes" and, together with the 2013 Notes, the "Initial
Securities"). The Initial Securities will be issued pursuant to an Indenture, dated of even date herewith (the "Indenture"),
between the Issuer and Wells Fargo Bank, National Association (the "Trustee") and, in the case of the 2013 Notes, the First Supplemental Indenture,
dated of even date herewith, between the Issuer and the Trustee and, in the case of the 2016 Notes, the Second Supplemental Indenture, dated of even date herewith, between the Issuer and the Trustee.
As an inducement to the Initial Purchasers, the Issuer agrees with the Initial Purchasers, for the benefit of the holders of the Initial Securities (including, without limitation, the Initial
Purchasers), the Exchange Securities (as defined below) and the Private Exchange Securities (as defined below) (collectively, the "Holders"), as
follows: 

        1.     Registered Exchange Offer. The Issuer shall, at its own cost, prepare and, not later than 180 days after (or if the
180th day is not a business day, the first business day thereafter) the date of original issue of the Initial Securities (the "Issue Date") (such 180th
day or next succeeding business day being a "Filing Target Date"), file with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Exchange Offer Registration Statement") on an appropriate
form under the Securities Act of 1933, as amended (the "Securities Act"), with respect to a proposed offer (the "Registered
Exchange Offer") to the Holders of Transfer Restricted Securities (as defined in Section 6 hereof), who are not prohibited by any law or policy of the Commission from
participating in the Registered Exchange Offer, to issue and deliver to such Holders, in exchange for the Initial Securities, a like aggregate principal amount of debt securities of the Issuer issued
under the Indenture and identical in all material respects to the applicable series of Initial Securities held by such Holders (except for the transfer restrictions relating to the Initial Securities
and the provisions relating to the matters described in Section 6 hereof) that would be registered under the Securities Act (collectively, the "Exchange
Securities"). The Issuer shall use all commercially reasonable efforts to (i) cause such Exchange Offer Registration Statement to become effective under the Securities
Act within 240 days (or if the 240th day is not a business day, the first business day thereafter) after the Issue Date of the Initial Securities (such 240th day or next
succeeding business day being an 

1

 

"Effectiveness Target Date") and (ii) keep the Exchange Offer Registration Statement effective for not less than 20 business days (or longer, if
required by applicable law) after the date notice of the Registered Exchange Offer is mailed to the Holders (such period being called the "Exchange Offer Registration
Period"). 

        If
the Issuer effects the Registered Exchange Offer, the Issuer (i) will be entitled to close the Registered Exchange Offer 20 business days after the commencement thereof;  provided that the Issuer
has accepted all the Initial Securities theretofore validly tendered in accordance with the terms of the Registered Exchange
Offer and (ii) will use all commercially reasonable efforts to consummate the Registered Exchange Offer no later than 30 business days (or longer if required by applicable law) after the
Effectiveness Target Date (such business day being the "Consummation Deadline"). 

        Following
the declaration of the effectiveness of the Exchange Offer Registration Statement, the Issuer shall as promptly as practicable commence the Registered Exchange Offer, it being
the objective of such Registered Exchange Offer to enable each Holder of Transfer Restricted Securities electing to
exchange the Initial Securities for Exchange Securities (assuming that such Holder is not an affiliate of the Issuer within the meaning of the Securities Act, acquires the Exchange Securities in the
ordinary course of such Holder's business and has no understandings or arrangements with any person to participate in the distribution of the Exchange Securities and is not prohibited by any law or
policy of the Commission from participating in the Registered Exchange Offer) to trade such Exchange Securities from and after their receipt without any limitations or restrictions under the
Securities Act, and to the extent required in accordance with Section 3(f), without material restrictions under the securities laws of the several states of the United States. 

        The
Issuer acknowledges that, pursuant to current interpretations by the Commission's staff of Section 5 of the Securities Act, in the absence of an applicable exemption
therefrom, (i) each Holder which is a broker-dealer electing to exchange Initial Securities, acquired for its own account as a result of market making activities or other trading activities,
for Exchange Securities (an "Exchanging Dealer"), is required to deliver a prospectus containing substantially the information set forth in
(a) Annex A hereto on the cover, (b) Annex B hereto in the "Exchange Offer Procedures"
section and the "Purpose of the Exchange Offer" section, and (c) Annex C hereto in the "Plan of Distribution" section of such prospectus in
connection with a sale of any such Exchange Securities received by such Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) an Initial Purchaser that elects to sell Exchange
Securities acquired in exchange for Initial Securities constituting any portion of an unsold allotment is required to deliver a prospectus containing the information required by Items 507 or 508 of
Regulation S-K under the Securities Act, as applicable, in connection with such sale. 

        The
Issuer shall use its commercially reasonable best efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the prospectus contained therein, in
order to permit such prospectus to be lawfully delivered by all persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such persons must comply with
such requirements in order to resell the Exchange Securities; provided, however, that (i) in the case where such prospectus and any amendment or
supplement thereto must be delivered by an Exchanging Dealer or an Initial Purchaser, such period shall be the lesser of 180 days and the date on which all Exchanging Dealers and the Initial
Purchasers give written notice to the Issuer that they have sold all Exchange Securities held by them (unless such period is extended pursuant to Section 3(h) below) and (ii) the Issuer
shall make such prospectus and any amendment or supplement thereto available to any broker-dealer for use in connection with any resale of any Exchange Securities for a period of not less than
90 days after the consummation of the Registered Exchange Offer. 

        If,
upon consummation of the Registered Exchange Offer, any Initial Purchaser holds Initial Securities acquired by it as part of its initial distribution, the Issuer, simultaneously with
the delivery of the Exchange Securities pursuant to the Registered Exchange Offer, shall issue and deliver to such 

2

 

Initial
Purchaser upon the written request of such Initial Purchaser, in exchange (the "Private Exchange") for the Initial Securities held by such
Initial Purchaser, a like principal amount of debt securities of the Issuer issued under the Indenture and identical in all material respects (including the existence of restrictions on transfer under
the Securities Act and the securities laws of the several states of the United States, but excluding provisions relating to the matters described in Section 6 hereof) to the applicable series
of Initial Securities held by such Initial Purchaser (the "Private Exchange Securities"). The Private Exchange Securities will be issued as evidence of
the same continuing indebtedness of the Issuer and will not constitute the creation of new indebtedness. The Initial Securities, the Exchange Securities and the Private Exchange Securities are herein
collectively called the "Securities." 

        In
connection with the Registered Exchange Offer, the Issuer shall: 

        (a)   mail
to each Holder a copy of the prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal
("Letter of Transmittal") and related documents; 

        (b)   keep
the Registered Exchange Offer open for not less than 20 business days (or longer, if required by applicable law) after the date notice thereof is mailed to the
Holders; 

        (c)   utilize
the services of a depositary for the Registered Exchange Offer with an address in the Borough of Manhattan, The City of New York, which may be the Trustee or an
affiliate of the Trustee; 

        (d)   permit
Holders to withdraw tendered Initial Securities at any time prior to the close of business, New York time, on the last business day on which the Registered
Exchange Offer shall remain open; and 

        (e)   otherwise
comply in all material respects with all applicable laws. 

        As
soon as practicable after the close of the Registered Exchange Offer or the Private Exchange, as the case may be, the Issuer shall: 

        (x)   accept
for exchange all the Initial Securities validly tendered and not properly withdrawn pursuant to the Registered Exchange Offer and the Private Exchange in
accordance with the terms of the Exchange Offer Registration Statement and the Letter of Transmittal; 

        (y)   deliver
to the Trustee for cancellation all the Initial Securities so accepted for exchange; and 

        (z)   cause
the Trustee to authenticate and deliver promptly to each Holder of the Initial Securities, the applicable series of Exchange Securities or Private Exchange
Securities, as the case may be, equal in aggregate principal amount to the applicable series of Initial Securities of such Holder so accepted for exchange. 

        The
Indenture will provide that the Exchange Securities will not be subject to the transfer restrictions set forth in the Indenture and that all the Securities will vote and consent
together on all matters as one class and that none of the Securities will have the right to vote or consent as a class separate from one another on any matter. 

        Interest
on each Exchange Security and Private Exchange Security issued pursuant to the Registered Exchange Offer and in the Private Exchange will accrue from the last interest payment
date on which interest was paid on the Initial Securities surrendered in exchange therefor or, if no interest has been paid on the Initial Securities, from the date of original issue of the Initial
Securities. Each Exchange Security and Private Exchange Security will bear interest at the rate set forth thereon; provided, that interest with respect
to the period prior to the issuance thereof shall accrue at the rate or rates borne by Initial Securities from time to time during such period. 

3

 

        Each
Holder participating in the Registered Exchange Offer shall be required to represent to the Issuer that at the time of the consummation of the Registered Exchange Offer
(i) any Exchange Securities received by such Holder will be acquired in the ordinary course of business, (ii) such Holder will have no arrangements or understanding with any person to
participate in the distribution of the Securities or the Exchange Securities within the meaning of the Securities Act or resale of the Securities or Exchange Securities in violation of the Securities
Act, (iii) such Holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of the Issuer or if it is an affiliate, such Holder will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent applicable, (iv) if such Holder is not a broker-dealer, that it is not engaged in and has no understanding or arrangement
with any person to participate in, and does not intend to engage in, the distribution of the Exchange Securities and (v) if such Holder is a broker-dealer, that it will receive Exchange
Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities and that it will be required to acknowledge
that it will deliver a prospectus in connection with any resale of such Exchange Securities. 

        Notwithstanding
any other provisions hereof, the Issuer will use its best efforts to ensure that (i) any Exchange Offer Registration Statement and any amendment thereto and any
prospectus forming part thereof and any supplement thereto complies in all material respects with the Securities Act and the rules and regulations thereunder, (ii) any Exchange Offer
Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Exchange Offer Registration Statement, and any supplement to such prospectus, does not
include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. 

        2.     Shelf Registration. If, (i) the Issuer is not required to file the Exchange Offer Registration Statement,
(ii) because the Registered Exchange Offer is not permitted by applicable law or Commission policy, the Issuer is not permitted to effect a Registered Exchange Offer, as contemplated by
Section 1 hereof, (iii) any Holder of Transfer Restricted Securities notifies the Issuer prior to the 20th day following the consummation of the Registered Exchange Offer
that (1) such Holder is prohibited by applicable law or Commission policy from participating in the Registered Exchange Offer, (2) such Holder receives Exchange Securities in the
Registered Exchange Offer which may not be resold to the public without delivering a prospectus and the prospectus contained in the Exchange Offer Registration Statement is not appropriate or
available for such resales or (3) such Holder is a broker-dealer and owns Securities acquired directly from the Issuer or an affiliate of the Issuer, the Issuer shall take the following actions
(the date on which any of the conditions described in the foregoing clauses (i) through (iv) occur, including in the case of clause (iv) the receipt of the required notice, being
a "Trigger Date"): 

        (a)   The
Issuer shall, at its cost, use all commercially reasonable efforts to file with the Commission a registration statement (the "Shelf
Registration Statement" and, together with the Exchange Offer Registration Statement, a "Registration Statement") on an
appropriate form under the Securities Act relating to the offer and sale of the Transfer Restricted Securities by the Holders thereof from time to time in accordance with the methods of distribution
set forth in the Shelf Registration Statement and Rule 415 under the Securities Act (hereinafter, the "Shelf Registration");  provided, however, that
no Holder (other than an Initial Purchaser) shall be entitled to have the Securities held by it covered by such Shelf
Registration Statement unless such Holder agrees in writing to be bound by all the provisions of this Agreement applicable to such Holder. The Issuer will use all commercially reasonable efforts to
(i) file such Shelf Registration Statement with the Commission on or prior to 60 days after a Trigger Date (but in no event earlier than the Filing Target Date for the Exchange Offer
Registration Statement) (such day or next succeeding 

4

 

business
day being a "Filing Target Date") and (ii) cause the Shelf Registration Statement to be declared effective by the Commission on or prior
to 150 days after a Trigger Date (such 150th day or next succeeding business day being an "Effectiveness Target Date"). 

        (b)   The
Issuer shall use all commercially reasonable best efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus included
therein to be lawfully delivered by the Holders of the relevant Securities, for a period of two years (or for such longer period if extended pursuant to Section 3(h) below) from the date of its
effectiveness or such shorter period that will terminate when all the Securities covered by the Shelf Registration Statement (i) have been sold pursuant thereto or (ii) are no longer
restricted securities (as defined in Rule 144 under the Securities Act, or any successor rule thereof) (the "Shelf Registration Period");  provided, however, that during the time that any Shelf Registration Statement is required to be effective, the Issuer may suspend any Shelf Registration
Statement and the related prospectus (each such period, a "Suspension Period"), without being required to pay any Liquidated Damages pursuant to
Section 6 hereof, upon written notice to the Initial Purchasers, the Holders of Transfer Restricted Securities and each Participating Broker-Dealer (which notice shall be accompanied by an
instruction to suspend the use of any prospectus), if (1) an event or circumstance occurs and is continuing as a result of which the Shelf Registration Statement, the related prospectus or any
document incorporated therein by reference as then amended or supplemented or proposed to be filed would, in the good faith judgment of the Issuer, contain an untrue statement of material fact or omit
to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading and (2)(A) the Issuer determines in its good faith
judgment that the disclosure of such event at such time would have a material adverse effect on the business, operations or prospects of the Issuer and its subsidiaries, taken as a whole, or
(B) the disclosure otherwise relates to a material business transaction or development which has not been publicly disclosed; provided, that such
written notice will be sufficient only if it (i) refers to this paragraph, (ii) provides notice that a Suspension Period has occurred and (iii) instructs the recipient not to use
any prospectus until further notice; provided, further, that all such periods of suspension may not exceed 60 days during any 365 day
period. Upon receipt of such notice, the Holders shall not be authorized by the Issuer to resell and shall not resell Securities covered by the Shelf Registration Statement. The Issuer shall be deemed
not to have used its best efforts to keep the Shelf Registration Statement effective during the requisite period if it voluntarily takes any action (excluding any Suspension Period permitted in
accordance with this Section 2(b)) that would result in Holders of Securities covered thereby not being able to offer and sell such Securities during that period, unless such action is required
by applicable law. 

        (c)   Notwithstanding
any other provisions of this Agreement to the contrary, the Issuer shall use its best efforts to cause the Shelf Registration Statement and the related
prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement, amendment or supplement, (i) to comply in all material respects with the
applicable requirements of the Securities Act and the rules and regulations of the Commission and (ii) other than with respect to information included therein in reliance upon or in conformity
with written information furnished to the Issuer by or on behalf of any Holder specifically for use therein, not to contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. 

5

 

        3.     Registration Procedures. In connection with any Shelf Registration contemplated by Section 2 hereof and, to the
extent applicable, any Registered Exchange Offer contemplated by Section 1 hereof, the following provisions shall apply: 

        (a)   The
Issuer shall (i) furnish to each Initial Purchaser, prior to the filing thereof with the Commission, a copy of the Registration Statement and each amendment
thereof and each supplement, if any, to the prospectus included therein and, in the event that an Initial Purchaser (with respect to any portion of an unsold allotment from the original offering) is
participating in the Registered Exchange Offer or the Shelf Registration Statement, the Issuer shall use its reasonable best efforts to reflect in each such document, when so filed with the
Commission, such comments as such Initial Purchaser reasonably may propose within 5 business days of such furnishing; (ii) include substantially the information set forth in Annex A hereto on
the cover, in Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of Distribution" section of the prospectus
forming a part of the Exchange Offer Registration Statement and include substantially the information set forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the Registered
Exchange Offer; (iii) if requested by an Initial Purchaser within the time period referred to in (i) above, include the information required by Items 507 or 508 of
Regulation S-K under the Securities Act, as applicable, in the prospectus forming a part of the Exchange Offer Registration Statement; (iv) include within the prospectus
contained in the Exchange Offer Registration Statement a section entitled "Plan of Distribution," reasonably acceptable to the Initial Purchasers, which shall contain a summary statement of the
positions taken or policies made by the staff of the Commission with respect to the potential "underwriter" status of any broker-dealer that is the beneficial owner (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of Exchange Securities received by such
broker-dealer in the Registered Exchange Offer (a "Participating Broker-Dealer"), whether such positions or policies have been publicly disseminated by
the staff of the Commission or such positions or policies, in the reasonable judgment of the Initial Purchasers based upon advice of counsel (which may be in-house counsel), represent the
prevailing views of the staff of the Commission; and (v) in the case of a Shelf Registration Statement, include the names of the Holders, who propose to sell Securities pursuant to the Shelf
Registration Statement, as selling securityholders, provided, that such information is provided to the Issuer at least 4 business days prior to the
filing thereof. In connection with the preparation and filing of a Shelf Registration Statement, the Issuer may require each Holder to agree to (i) keep confidential any material
non-public information relating to the Issuer received by such Holders and not to publicly disclose such information and (ii) to abstain from trading any securities of the Issuer in
violation of applicable securities laws on the basis of any such material non-public information, in each case until such information has been made generally available to the public. 

        (b)   The
Issuer shall give written notice to the Initial Purchasers, the Holders who will have Transfer Restricted Securities registered pursuant to the Shelf Registration
Statement and who have complied with Section 3(l) of this Agreement and any Participating Broker-Dealer from whom the Issuer has received prior written notice that it will be a Participating
Broker-Dealer in the Registered Exchange Offer (which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the prospectus until the requisite
changes have been made): 

        (i)    when
the Registration Statement or any amendment thereto has been filed with the Commission and when the Registration Statement or any post-effective
amendment thereto has become effective; 

        (ii)   of
any request by the Commission for amendments or supplements to the Registration Statement or the prospectus included therein or for additional information; 

6

 

        (iii)  of
the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; 

        (iv)  of
the receipt by the Issuer or its legal counsel of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose; and 

        (v)   of
the happening of any event that requires the Issuer to make changes in the Registration Statement or the prospectus in order that the Registration Statement or the
prospectus do not contain an untrue statement of a material fact nor omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the
prospectus, in light of the circumstances under which they were made) not misleading. 

        (c)   The
Issuer shall make every reasonable effort to obtain the withdrawal at the earliest possible time, of any order suspending the effectiveness of the Registration
Statement. 

        (d)   The
Issuer shall, during the Shelf Registration Period, deliver to each Holder of Securities included within the coverage of the Shelf Registration, without charge, as
many copies of the prospectus (including each preliminary prospectus) included in the Shelf Registration Statement and any amendment or supplement thereto as such person may reasonably request. The
Issuer consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by each of the selling Holders of the Securities in connection with
the offering and sale of the Securities covered by the prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement. 

        (e)   The
Issuer shall deliver to each Initial Purchaser, any Exchanging Dealer, any Participating Broker-Dealer and such other persons required to deliver a prospectus
following the Registered Exchange Offer, without charge, as many copies of the final prospectus included in the Exchange Offer Registration Statement and any amendment or supplement thereto as such
persons may reasonably request. The Issuer consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by any Initial Purchaser, if
necessary, any Participating Broker-Dealer and such other persons required to deliver a prospectus following the Registered
Exchange Offer in connection with the offering and sale of the Exchange Securities covered by the prospectus, or any amendment or supplement thereto, included in such Exchange Offer Registration
Statement. 

        (f)    Prior
to any public offering of the Securities, pursuant to any Registration Statement, the Issuer shall use its reasonable best efforts to register or qualify, or shall
cooperate with the Holders of the Securities included therein and their respective counsel in connection with the registration or qualification of, the Securities for offer and sale under the
securities or "blue sky" laws of such states of the United States as any Holder of the Securities included therein reasonably requests in writing and do any and all other acts or things reasonably
necessary or advisable to enable the offer and sale in such jurisdictions of the Securities covered by such Registration Statement; provided, however,
that the Issuer shall not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified or qualify as a foreign company or (ii) take any
action which would subject it to general service of process or to taxation in any jurisdiction where it is not then so subject. 

        (g)   The
Issuer shall cooperate with the Holders of the Securities to facilitate the timely preparation and delivery of certificates representing the Securities to be sold
pursuant to any Registration Statement free of any restrictive legends (other than the ERISA Legend (as defined in the Indenture)) and in such denominations and registered in such names as the Holders
may request a reasonable period of time prior to sales of the Securities pursuant to such Registration Statement. 

7

 

        (h)   Upon
the occurrence of any event contemplated by paragraphs (ii) through (v) of Section 3(b) above during the period for which the Issuer is
required to maintain an effective Registration Statement, other than during a Suspension Period, the Issuer shall as promptly as practicable prepare and file a post-effective
amendment to the Registration Statement or a supplement to the related prospectus and any other required document so that, as thereafter delivered to Holders of the Securities or purchasers of
Securities, the prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. If the Issuer notifies the Initial Purchasers, the Holders of the Securities and any known Participating Broker-Dealer in
accordance with paragraphs (ii) through (v) of Section 3(b) above to suspend the use of the prospectus until the requisite changes to the prospectus have been made, then the
Initial Purchasers, the Holders of the Securities and any such Participating Broker-Dealers shall suspend use of such prospectus, and the period of effectiveness of the Shelf Registration Statement
provided for in Section 2(b) above and the Exchange Offer Registration Statement provided for in Section 1 above shall each be extended by the number of days from and including the date
of the giving of such notice to and including the date when the Initial Purchasers, the Holders of the Securities and any known Participating Broker-Dealer shall have received such amended or
supplemented prospectus pursuant to this Section 3(h). 

        (i)    Not
later than the effective date of the applicable Registration Statement, the Issuer will provide CUSIP numbers for the Initial Securities, the Exchange Securities or
the Private Exchange Securities, as the case may be, and, if required, provide the applicable trustee with printed certificates for the Initial Securities, the Exchange Securities or the Private
Exchange Securities, as the case may be in a form eligible for deposit with The Depository Trust Company. 

        (j)    The
Issuer will comply, in all material respects, with all rules and regulations of the Commission to the extent and so long as they are applicable to the Registered
Exchange Offer or the Shelf Registration and will make generally available to its security holders (or otherwise provide in accordance with Section 11(a) of the Securities Act) an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act, no later than 45 days after the end of a 12-month period (or 90 days, if such period is a
fiscal year) beginning with the first month of the Issuer's first fiscal quarter commencing after the effective date of the Registration Statement, which statement shall cover such
12-month period. 

        (k)   The
Issuer shall cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended, in a timely manner and containing such changes, if any, as shall
be necessary for such qualification. In the event that such qualification would require the appointment of a new trustee under the Indenture, the Issuer shall appoint a new trustee thereunder pursuant
to the applicable provisions of the Indenture. 

        (l)    The
Issuer may require each Holder of Securities to be sold pursuant to the Shelf Registration Statement to furnish to the Issuer such information regarding the Holder
and the distribution of the Securities as the Issuer may from time to time reasonably require for inclusion in the Shelf Registration Statement, and the Issuer may exclude from such registration the
Securities of any Holder that unreasonably fails to furnish such information within a reasonable time after receiving such request. No such Holder is entitled to a draft or copy of the prospectus
until such requested information is given to the Issuer unless such failure to furnish such information would not materially delay effectiveness of such Shelf Registration Statement. 

        (m)  The
Issuer shall enter into such customary agreements (including, if requested in the case of an underwritten offering (which shall only be undertaken at the option of
the Issuer), an underwriting agreement in customary form) and take all such other action, if any, as any Holder of 

8

 

the
Securities shall reasonably request in order to facilitate the disposition of the Securities pursuant to any Shelf Registration. 

        (n)   In
the case of any Shelf Registration, the Issuer shall (i) make reasonably available for inspection by the Holders of the Securities named in the Shelf
Registration Statement, any underwriter participating in any disposition pursuant to the Shelf Registration Statement and any attorney, accountant or other
agent retained by the Holders of the Securities named in the Shelf Registration Statement or any such underwriter all relevant financial and other records, pertinent corporate documents and properties
of the Issuer and (ii) cause the Issuer's officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by the Holders of the Securities named
in the Shelf Registration Statement or any such underwriter, attorney, accountant or agent retained by the Holders of the Securities named in the Shelf Registration Statement in connection with the
Shelf Registration Statement, in each case, as shall be reasonably necessary to enable such persons, to conduct a reasonable investigation within the meaning of Section 11 of the Securities
Act; provided, however, that the foregoing inspection and information gathering shall be coordinated on behalf of the Initial Purchasers by you and on
behalf of the other parties, by one counsel designated by and on behalf of such other parties as described in and subject to the provisions of Section 4 hereof and,  provided, further, that such
information shall be kept confidential by the Holder or by any such attorney, accountant or other agent unless required by
law or regulation to be disclosed. Each such person will be required to agree or acknowledge that information obtained by it as a result of such inspections shall be kept confidential and shall not be
used by it as the basis for any market transactions in the Securities of the Issuer unless and until such information is made generally available to the public through no fault or action of such
person. 

        (o)   In
the case of any Shelf Registration, the Issuer, if requested by the Holders of a majority in aggregate principal amount of the Transfer Restricted Securities at the
time outstanding, shall cause (i) its counsel to deliver an opinion and updates thereof relating to the Securities in customary form addressed to such Holders and the managing underwriters, if
any, thereof and dated, in the case of the initial opinion, the effective date of such Shelf Registration Statement (it being agreed that the matters to be covered by such opinion shall include such
matters as are customarily included in opinions requested in underwritten offerings of such type); (ii) its officers to execute and deliver all customary documents and certificates and updates
thereof reasonably requested by any underwriters of the applicable Securities; and (iii) its independent public accountants to provide to the selling Holders of the applicable Securities and
any underwriter therefor a comfort letter in customary form and covering matters of the type customarily covered in comfort letters in connection with primary underwritten offerings, subject to
receipt of appropriate documentation as contemplated, and only if permitted, by Statement of Auditing Standards No. 72, Letters for Underwriters and Certain Other
Requesting Parties, as amended by Statements on Auditing Standards No. 76 and No. 86. 

        (p)   In
the case of the Registered Exchange Offer, if requested by any Initial Purchaser or any known Participating Broker-Dealer, the Issuer shall cause (i) its
counsel to deliver to such Initial Purchaser or such Participating Broker-Dealer a signed opinion in the form set forth in Section 7(c) of the Purchase Agreement with such changes as are
customary in connection with the preparation of a Registration Statement and (ii) its independent public accountants to deliver to such Initial Purchaser or such Participating Broker-Dealer a
comfort letter, in customary form, meeting the requirements as to the substance thereof as set forth in Section 7(a) of the Purchase Agreement, with appropriate date changes. 

        (q)   If
a Registered Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Initial Securities by Holders to the Issuer (or to such other Person as
directed by the Issuer) in exchange for the Exchange Securities or the Private Exchange Securities, as the case 

9

 

may
be, the Issuer shall mark, or caused to be marked, on the Initial Securities so exchanged that such Initial Securities are being canceled in exchange for the Exchange Securities or the Private
Exchange Securities, as the case may be; in no event shall the Initial Securities be marked as paid or otherwise satisfied. 

        (r)   The
Issuer will use commercially reasonable best efforts to confirm that the ratings then applicable to the Initial Securities will apply to the Securities covered by a
Registration Statement. 

        (s)   In
the event that the Issuer opts for an underwritten offering and any broker-dealer registered under the Exchange Act shall underwrite any Securities or participate as
a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Conduct Rules (the "Rules") of the
National Association of Securities Dealers, Inc. ("NASD")) thereof, whether as a Holder of such Securities or as an underwriter, a placement or
sales agent or a broker or dealer in respect thereof, or otherwise, the Issuer will assist such broker-dealer in complying with the requirements of such Rules, including, without limitation, by
(i) if such Rules, including Rule 2720, shall so require, engaging a "qualified independent underwriter" (as defined in Rule 2720) to participate in the preparation of the
Registration Statement relating to such Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such Registration Statement is
an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Securities, (ii) indemnifying any such qualified independent underwriter to the extent of
the indemnification of underwriters provided in Section 5 hereof and (iii) providing such information to such broker-dealer as may be required in order for such broker-dealer to comply
with the requirements of the Rules. 

        (t)    The
Issuer shall use commercially reasonable best efforts to take all other steps necessary to effect the registration of the Securities covered by a Registration
Statement contemplated hereby. 

        (u)   In
the case of any Shelf Registration, the Issuer shall not prepare, make, use, authorize, approve or refer to any free writing prospectuses (as defined in
Rule 405 under the Securities Act) prepared by or on behalf of the Issuer or used or referred to by the Issuer in connection with the sale of the Securities (an "Issuer
Free Writing Prospectus") other than any communications pursuant to Rule 134 under the Securities Act or any document constituting an offer to sell or solicitation of an
offer to buy the Securities that falls within the exception from the definition of prospectuses in Section 2(a)(10)(a) of the Securities Act. 

        4.     Registration Expenses. (a) The Issuer shall bear all fees and expenses incurred in connection with the performance
of its obligations under Sections 1 through 3 hereof (including the reasonable fees and expenses, if any, of Latham & Watkins LLP, counsel for the Initial Purchasers, incurred in connection
with the Registered Exchange Offer), whether or not the Registered Exchange Offer or a Shelf Registration is filed or becomes effective, and, in the event of a Shelf Registration, shall bear or
reimburse the Holders of the Securities covered thereby for the reasonable fees and disbursements of not more than one firm of counsel designated by the Holders of a majority in principal amount of
the Initial Securities covered thereby to act as counsel for the Holders of the Initial Securities in connection therewith. 

        (b)   Each
Holder shall pay all underwriting discounts, commissions and transfer taxes, if any, relating to the sale or disposition of such Holder's Transfer Restricted
Securities pursuant to the Shelf Registration Statement. 

        5.     Indemnification. (a) The Issuer agrees to indemnify and hold harmless each Holder of the Securities, any
Participating Broker-Dealer and each person, if any, who controls such Holder or such Participating Broker-Dealer within the meaning of the Securities Act or the Exchange Act (each Holder, any
Participating Broker-Dealer and such controlling persons are referred to collectively as the 

10

 

"Indemnified Parties") from and against any losses, claims, damages or liabilities, joint or several, or any actions in respect thereof (including, but
not limited to, any losses, claims, damages, liabilities or actions relating to purchases and sales of the Securities) to which each Indemnified Party may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained
in a Registration Statement, prospectus contained therein or in any amendment or supplement thereto or in any preliminary or final prospectus relating to a Shelf Registration, Issuer Free Writing
Prospectus or any "issuer information" filed or required to be filed pursuant to Rule 433(d) under the Securities Act, or arise out of, or are based upon, the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make the statements therein, and in the case of any prospectus or Issuer Free Writing Prospectus, in light of the
circumstances under which they were made, not misleading, and shall reimburse, as incurred, the Indemnified Parties for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action in respect thereof; provided, however, that (i) the Issuer shall not
be liable in any such case to the extent that such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made
in a Registration Statement or prospectus contained therein or in any amendment or supplement thereto or in any preliminary or final prospectus relating to a Shelf Registration or Issuer Free Writing
Prospectus in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Issuer by or on behalf of such Holder specifically for inclusion therein and
(ii) the Issuer shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of or is based upon the use of a Registration Statement after
(x) a stop order has been issued by the Commission in respect of a Registration Statement or any proceedings for such purposes have been initiated or (y) a Registration Statement has
been suspended, so long as in the case of (x) and (y), the Holders shall have received prior written notice of such action from the Issuer; provided further,
however, that this indemnity agreement will be in addition to any liability which the Issuer may otherwise have to such Indemnified Party. The Issuer shall also indemnify
underwriters (if any), their officers and directors and each person who controls such underwriters within the meaning of the Securities Act or the Exchange Act to the same extent as provided above
with respect to the indemnification of the Holders of the Securities if requested by such Holders. 

        (b)   Each
Holder of the Securities, severally and not jointly, will indemnify and hold harmless the Issuer and each person, if any, who controls the Issuer within the meaning
of the Securities Act or the Exchange Act and each person who signs the Registration Statement from and against any losses, claims, damages or liabilities or any actions in respect thereof, to which
the Issuer or any such controlling person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement, prospectus contained therein or in any amendment or supplement thereto or in
any preliminary or final prospectus relating to a Shelf Registration or Issuer Free Writing Prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material
fact necessary to make the statements therein, and in the case of any prospectus, in light of the circumstances under which they were made, not misleading, but in each case only to the extent that the
untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Issuer by or on
behalf of such Holder specifically for inclusion therein; and, subject to the limitation set forth immediately preceding this clause, shall reimburse, as incurred, the Issuer for any legal or other
expenses reasonably incurred by the Issuer or any such controlling person in connection with investigating or defending any loss, claim, damage, liability or action in respect 

11

 

thereof.
This indemnity agreement will be in addition to any liability which such Holder may otherwise have to the Issuer or any of its controlling persons. 

        (c)   Promptly
after receipt by an indemnified party under this Section 5 of notice of the commencement of any action or proceeding (including a governmental
investigation), such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 5, notify the indemnifying party of the commencement
thereof; but the failure to notify the indemnifying party shall not relieve the indemnifying party from any liability that it may have under subsection (a) or (b) above except to the
extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the
failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under subsection (a) or (b) above. In case any
such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense
thereof the indemnifying party will not be liable to such indemnified party under this Section 5 for any legal or other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof. In no event shall an indemnifying party be liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified party, which consent shall not be unreasonably withheld, effect any settlement
of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such
settlement (i) includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action, and (ii) does not include a
statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party. No indemnifying party shall be liable for any settlement of any action or claim for monetary damages which an indemnified
party may effect without the written consent of the indemnifying party, which consent shall not be unreasonably withheld; provided, however, that an
indemnified party may settle any such action or claim without the consent of the indemnifying party if the indemnified party makes a written request that its legal fees and expenses be reimbursed and
such fees and expenses are not reimbursed by the indemnified party within 15 days thereafter. 

        (d)   If
the indemnification provided for in this Section 5 is unavailable or insufficient to hold harmless an indemnified party under subsections (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the
one hand and the indemnified party on the other from the exchange of the Securities, pursuant to the Registered Exchange Offer, or (ii) if the allocation provided by the foregoing
clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault
of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities
(or actions in respect thereof) as well as any other relevant equitable considerations. The relative fault of the parties shall be determined by reference to, among other 

12

 

things,
whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such indemnifying party on the
one hand or such indemnified party on the other, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid by
an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding any other provision of this
Section 5(d), the Holders of the Securities shall not be required to contribute any amount in excess of the amount by which the net proceeds received by such Holders from the sale of the
Securities pursuant to a Registration Statement exceeds the amount of damages which such Holders have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls such indemnified party within the meaning of the Securities Act or the
Exchange Act shall have the same rights to contribution as such indemnified party and each person, if any, who controls the Issuer within the meaning of the Securities Act or the Exchange Act shall
have the same rights to contribution as the Issuer. 

        (e)   The
agreements contained in this Section 5 shall survive the sale of the Securities pursuant to a Registration Statement and shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party. 

        6.     Liquidated Damages Under Certain Circumstances. (a) Liquidated Damages ("Liquidated
Damages") with respect to the Transfer Restricted Securities shall be assessed as follows if any of the following events occur (each such event in clauses (i) through
(iv) below being herein called a "Registration Default"): 

        (i)    Any
Registration Statement required by this Agreement is not filed with the Commission on or prior to the applicable Filing Target Date; 

        (ii)   Any
Registration Statement required by this Agreement is not declared effective by the Commission on or prior to the applicable Effectiveness Target Date; 

        (iii)  The
Registered Exchange Offer has not been consummated by the Consummation Deadline; or 

        (iv)  If
after either the Exchange Offer Registration Statement or the Shelf Registration Statement is declared effective (A) such Registration Statement thereafter
ceases to be effective; or (B) such Registration Statement or the related prospectus ceases to be usable (except as permitted in paragraph (b)) in connection with resales of Transfer
Restricted Securities during the periods specified herein, in either case during the period the applicable Registration Statement must remain effective under this Agreement, because either
(1) any event occurs as a result of which the related prospectus forming part of such Registration Statement would include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or (2) it shall be necessary to amend such Registration Statement or
supplement the related prospectus, to comply with the Securities Act or the Exchange Act or the respective rules thereunder. 

Liquidated
Damages shall accrue on the Transfer Restricted Securities over and above the interest set forth in the title of the Securities from and including the date on which any such Registration
Default 

13

 

shall
occur to but excluding the date on which all such Registration Defaults have been cured, at a rate of 0.25% per annum (the "Liquidated Damages
Rate") of the principal amount of Transfer Restricted Securities held by such Holder for the first 90 day period immediately following the occurrence of such
Registration Default. The Liquidated Damages Rate shall increase by an additional 0.25% per annum of the principal amount of Transfer Restricted Securities with respect to each subsequent
90 day period until all Registration Defaults have been cured, up to a maximum Liquidated Damages Rate of 1.0% per annum of the principal amount of Transfer Restricted Securities. 

        (b)   A
Registration Default referred to in Section 6(a)(iv)(B) hereof shall be deemed not to have occurred and be continuing in relation to a Shelf Registration
Statement or the related prospectus if (i) such Registration Default has occurred solely as a result of (x) the filing of a post-effective amendment to such Shelf
Registration Statement to incorporate annual audited financial information with respect to the Issuer where such post-effective amendment is not yet effective and needs to be declared
effective to permit Holders to use the related prospectus or (y) other material events, with respect to the Issuer that would need to be described in such Shelf Registration Statement or the
related prospectus and (ii) in the case of clause (y), the Issuer is proceeding promptly and in good faith to amend or supplement such Shelf Registration Statement and related prospectus
to describe such events; provided, however, that in any case if such Registration Default occurs for a continuous period in excess of 30 days,
Liquidated Damages shall be payable in accordance with the above paragraph from the day such Registration Default occurs until such Registration Default is cured. 

        (c)   Any
amounts of Liquidated Damages due pursuant to Section 6(a) above will be payable in cash on the regular interest payment dates with respect to the Transfer
Restricted Securities. The amount of Liquidated Damages will be determined by multiplying the applicable Liquidated Damages Rate by the principal amount of the Transfer Restricted Securities,
multiplied by a fraction, the numerator of which is the number of days such Liquidated Damages Rate was applicable during such period (determined on the basis of a 360-day year comprised
of twelve 30-day months), and the denominator of which is 360. The Issuer shall not be required to pay Liquidated Damages for more than one Registration Default at any given time.
Following the cure of all Registration Defaults, the accrual of Liquidated Damages will cease. 

        (d)   "Transfer Restricted Securities" means each Security until the earliest to occur of (i) the date on which such
Security has been exchanged by a person other than a broker-dealer for a freely transferable Exchange Security in the Registered Exchange Offer, (ii) following the exchange by a broker-dealer
in the Registered Exchange Offer of an Initial Security for an Exchange Security, the date on which such Exchange Security is sold to a purchaser who receives from such broker-dealer on or prior to
the date of such sale a copy of the prospectus contained in the Exchange Offer Registration Statement, (iii) the date on which such Initial Security has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration Statement or (iv) the date on which such Initial Security is distributed to the public pursuant to Rule 144 under
the Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act. 

        7.     Rules 144 and 144A. The Issuer shall use its commercially reasonable best efforts to file the reports required to
be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the Issuer is not required to file such reports, it will, upon the request of any Holder of Initial
Securities, make publicly available other information so long as necessary to permit sales of its securities pursuant to Rules 144 and 144A. The Issuer covenants that it will take such further
action as any Holder of Initial Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Initial Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rules 144 and 144A (including the requirements of Rule 144A(d)(4)). The Issuer will provide a copy of this Agreement to
prospective 

14

 

purchasers
of Initial Securities identified to the Issuer by the Initial Purchasers upon request. Upon the request of any Holder of Initial Securities, the Issuer shall deliver to such Holder a
written statement as to whether the Issuer has complied with such requirements. Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to require the Issuer to register any of
its securities pursuant to the Exchange Act. 

        8.     Underwritten Registrations (If Any). If any of the Transfer Restricted Securities covered by any Shelf Registration are to
be sold in an underwritten offering, which underwritten offering shall only be undertaken at the option of the Issuer, the investment banker or investment bankers and manager or managers that will
administer the offering ("Managing Underwriters") will be selected by the Holders of a majority in aggregate principal amount of such Transfer
Restricted Securities to be included in such offering with the consent of the Issuer, which consent shall not be unreasonably withheld. 

        No
person may participate in any underwritten registration hereunder, which underwritten registration shall only be undertaken at the option the Issuer, unless such person
(i) agrees to sell such person's Transfer Restricted Securities on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such
underwriting arrangements. 

        9.     Miscellaneous. 

        (a)   Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, except by the Issuer and the written consent of the Holders of a majority in principal amount of the Securities affected by such
amendment, modification, supplement, waiver or consents. 

        (b)   Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand
delivery, first-class mail, facsimile transmission, or air courier which guarantees overnight delivery: 

        (1)   if
to a Holder of the Securities, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture. 

        (2)   if
to the Initial Purchasers; 

J.P.
Morgan Securities Inc.

270 Park Avenue

New York, NY 10017

Fax No.: (212) 270-1063

Attention: Syndicated and Leveraged Finance Group 

        with
a copy to: 

Latham &
Watkins LLP

885 Third Avenue

Suite 1000

New York, New York 10022

Fax No.: (212) 751-4864

Attention: Jonathan R. Rod 

        (3)   if
to the Issuer, to: 

18101
Von Karman Avenue, Suite 1700

Irvine, California 92612

15

 

Fax
No.: (949) 752-5624

Attention: General Counsel 

        with
a copy to: 

Skadden,
Arps, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Fax No.: (212) 777-3252

Attention: Harold Moore 

        All
such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three business days after being deposited in the
mail, postage prepaid, if mailed; when receipt is acknowledged by recipient's facsimile machine operator, if sent by facsimile transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery. 

        (c)   No Inconsistent Agreements. The Issuer has not, as of the date hereof, entered into, nor shall it, on or after the date
hereof, enter into, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders herein or otherwise conflicts with the provisions hereof. 

        (d)   Successors and Assigns. This Agreement shall be binding upon each of the parties and their respective successors and
assigns. 

        (e)   Counterparts. This Agreement may be executed in any number of counterparts and by the 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. 

        (f)    Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect
the meaning hereof. 

        (g)   Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CHOICE OF
LAW RULES (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW). 

        (h)   Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or
impaired thereby. 

        (i)    Securities Held by the Issuer. Whenever the consent or approval of Holders of a specified percentage of principal amount
of Securities is required hereunder, Securities held by the Issuer or its affiliates (other than subsequent Holders of Securities if such subsequent Holders are deemed to be affiliates solely by
reason of their holdings of such Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. 

16

        If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Issuer a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the several Initial Purchasers and the Issuer in accordance with its terms. 

	 	 	Very truly yours,
	

 	
 	

EDISON MISSION ENERGY
	

 	
 	

By:	

/s/  STEVEN D. EISENBERG      

	 	 	 	Name:	Steven D. Eisenberg
	 	 	 	Title:	Vice President and Associate General Counsel

The
foregoing Registration

Rights Agreement is hereby confirmed

and accepted as of the date first

above written. 

J.P.
MORGAN SECURITIES INC. 

        For
itself and on behalf of the

several Purchasers listed

on Schedule A hereto. 

By:
J.P. MORGAN SECURITIES INC. 

	By.	 	/s/  ADAM G. BERNARD      
 Authorized Signatory	 	 

        SCHEDULE
A 

J.P.
Morgan Securities Inc.

Citigroup Global Markets Inc.

Credit Suisse Securities (USA) LLC

Merrill Lynch, Pierce, Fenner & Smith Incorporated

Goldman, Sachs & Co.

Deutsche Bank Securities Inc.

Lehman Brothers Inc.

UBS Securities LLC

Greenwich Capital Markets, Inc.

Wedbush Morgan Securities Inc. 

        ANNEX
A 

        Each
broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale
of such
Exchange Securities. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in
exchange for Initial Securities where such Initial Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Issuer has agreed that, for a
period of 180 days after the Expiration Date (as defined herein), it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of
Distribution." 

        ANNEX
B 

        Each
broker-dealer that receives Exchange Securities for its own account in exchange for Initial Securities, where such Initial Securities were acquired by such broker-dealer as a result
of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. See "Plan of Distribution." 

        ANNEX
C 

 
 

PLAN OF DISTRIBUTION    

        Each
broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale
of such Exchange Securities. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in
exchange for Initial Securities where such Initial Securities were acquired as a result of market-making activities or other trading activities. The Issuer has agreed that, for a period of
180 days after the Expiration Date, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until
                        ,
200[6][7], all dealers effecting transactions in the Exchange Securities may be required to deliver a prospectus. 

        The
Issuer will not receive any proceeds from any sale of Exchange Securities by broker-dealers. Exchange Securities received by broker-dealers for their own account pursuant to the
Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the
Exchange Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of
any such Exchange Securities. Any broker-dealer that resells Exchange Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates
in a distribution of such Exchange Securities may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of Exchange Securities and any commission
or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that, by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. 

        For
a period of 180 days after the Expiration Date the Issuer will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any
broker-dealer that requests such documents in the Letter of Transmittal. The Issuer has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the Holders
of the Securities) other than commissions or concessions of any brokers or dealers and will indemnify the Holders of the Securities (including any broker-dealers) against certain liabilities,
including liabilities under the Securities Act. 

        ANNEX
D 

o    CHECK
HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO. 

	Name:	 	 
	 	 	

	Address:	 	 
	 	 	

	

 	
 	

If
the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Securities. If the undersigned is a
broker-dealer that will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities Act. 

QuickLinks

$ 1,000,000,000 Edison Mission Energy $500,000,000 7.50% Senior Notes due 2013 $500,000,000 7.75% Senior Notes due 2016 REGISTRATION RIGHTS AGREEMENT

PLAN OF DISTRIBUTION

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