Document:

Unassociated Document

     

    Exhibit
10.1

    

    Published
CUSIP Number: 816303AC5

    Revolving
Credit CUSIP Number: 816303AD3

     

    
      

      

    

    CREDIT
AGREEMENT

     

    among

    

    SELECTIVE
INSURANCE GROUP, INC.,

    as
Borrower,

    

    THE
LENDERS NAMED HEREIN

    

    and

    

    WACHOVIA
BANK, NATIONAL ASSOCIATION,

    as
Administrative Agent

    

    $30,000,000
Revolving Credit Facility

    

    WACHOVIA
CAPITAL MARKETS, LLC

    Sole Lead
Arranger and Sole Book Runner

    

    Dated as
of August 25, 2009

    

    
      

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      TABLE
OF CONTENTS

      

      
        
          
            
              	 
      	 
      	
                      Page

                    
	 
      	 
      	 
      
	 
      	
                      ARTICLE
      I

                    	 
      
	 
      	 
      	 
      
	 
      	
                      DEFINITIONS

                    	 
      
	 
      	 
      	 
      
	
                      1.1

                    	
                      Defined
      Terms

                    	
                      2

                    
	
                      1.2

                    	
                      Accounting
      Terms

                    	
                      19

                    
	
                      1.3

                    	
                      Other
      Terms; Construction

                    	
                      19

                    
	 
      	 
      	 
      
	 
      	
                      ARTICLE
      II

                    	 
      
	 
      	 
      	 
      
	 
      	
                      AMOUNT
      AND TERMS OF THE LOANS

                    	 
      
	 
      	 
      	 
      
	
                      2.1

                    	
                      Commitment

                    	
                      19

                    
	
                      2.2

                    	
                      Borrowings.

                    	
                      20

                    
	
                      2.3

                    	
                      Disbursements;
      Funding Reliance; Domicile of Loans.

                    	
                      21

                    
	
                      2.4

                    	
                      Evidence
      of Debt; Notes.

                    	
                      22

                    
	
                      2.5

                    	
                      Termination
      of Commitment

                    	
                      22

                    
	
                      2.6

                    	
                      Mandatory
      Payments and Prepayments.

                    	
                      23

                    
	
                      2.7

                    	
                      Voluntary
      Prepayments

                    	
                      23

                    
	
                      2.8

                    	
                      Interest.

                    	
                      24

                    
	
                      2.9

                    	
                      Fees

                    	
                      25

                    
	
                      2.10

                    	
                      Interest
      Periods

                    	
                      26

                    
	
                      2.11

                    	
                      Conversions
      and Continuations.

                    	
                      27

                    
	
                      2.12

                    	
                      Method
      of Payments; Computations.

                    	
                      28

                    
	
                      2.13

                    	
                      Recovery
      of Payments

                    	
                      29

                    
	
                      2.14

                    	
                      Use
      of Proceeds

                    	
                      30

                    
	
                      2.15

                    	
                      Pro
      Rata Treatment.

                    	
                      30

                    
	
                      2.16

                    	
                      Increased
      Costs; Change in Circumstances; Illegality; etc.

                    	
                      31

                    
	
                      2.17

                    	
                      Taxes.

                    	
                      32

                    
	
                      2.18

                    	
                      Compensation

                    	
                      35

                    
	
                      2.19

                    	
                      Replacement
      of Lenders; Mitigation of Costs.

                    	
                      36

                    
	
                      2.20

                    	
                      Increase
      in Commitments

                    	
                      37

                    
	 
      	 
      	 
      
	 
      	
                      ARTICLE
      III

                    	 
      
	 
      	 
      	 
      
	 
      	
                      CONDITIONS
      TO EFFECTIVENESS; CONDITIONS OF BORROWING

                    	 
      
	 
      	 
      	 
      
	
                      3.1

                    	
                      Conditions
      to Effectiveness

                    	
                      38

                    
	
                      3.2

                    	
                      Conditions
      of All Borrowings

                    	
                      41

                    

            

          

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        
          
            	 
      	
                    ARTICLE
      IV

                  	 
      
	 
      	 
      	 
      
	 
      	
                    REPRESENTATIONS
      AND WARRANTIES

                  	 
      
	 
      	 
      	 
      
	
                    4.1

                  	
                    Corporate
      Organization and Power

                  	
                    42

                  
	
                    4.2

                  	
                    Authorization;
      Enforceability

                  	
                    42

                  
	
                    4.3

                  	
                    No
      Violation

                  	
                    43

                  
	
                    4.4

                  	
                    Governmental
      and Third-Party Authorization; Permits.

                  	
                    43

                  
	
                    4.5

                  	
                    Litigation

                  	
                    43

                  
	
                    4.6

                  	
                    Taxes

                  	
                    43

                  
	
                    4.7

                  	
                    Subsidiaries

                  	
                    44

                  
	
                    4.8

                  	
                    Full
      Disclosure

                  	
                    44

                  
	
                    4.9

                  	
                    Margin
      Regulations

                  	
                    44

                  
	
                    4.10

                  	
                    No
      Material Adverse Change

                  	
                    44

                  
	
                    4.11

                  	
                    Financial
      Matters

                  	
                    44

                  
	
                    4.12

                  	
                    Ownership
      of Properties

                  	
                    46

                  
	
                    4.13

                  	
                    ERISA.

                  	
                    46

                  
	
                    4.14

                  	
                    Environmental
      Matters.

                  	
                    46

                  
	
                    4.15

                  	
                    Compliance
      With Laws

                  	
                    47

                  
	
                    4.16

                  	
                    Regulated
      Industries

                  	
                    47

                  
	
                    4.17

                  	
                    Insurance

                  	
                    47

                  
	
                    4.18

                  	
                    Material
      Contracts

                  	
                    48

                  
	
                    4.19

                  	
                    Reinsurance
      Agreements.

                  	
                    48

                  
	
                    4.20

                  	
                    OFAC;
      Anti-Terrorism Laws.

                  	
                    48

                  
	 
      	 
      	 
      
	 
      	
                    ARTICLE
      V

                  	 
      
	 
      	 
      	 
      
	 
      	
                    AFFIRMATIVE
      COVENANTS

                  	 
      
	 
      	 
      	 
      
	
                    5.1

                  	
                    Financial
      Statements

                  	
                    49

                  
	
                    5.2

                  	
                    Statutory
      Financial Statements

                  	
                    50

                  
	
                    5.3

                  	
                    Other
      Business and Financial Information

                  	
                    50

                  
	
                    5.4

                  	
                    Existence;
      Franchises; Maintenance of Properties

                  	
                    52

                  
	
                    5.5

                  	
                    Compliance
      with Laws

                  	
                    53

                  
	
                    5.6

                  	
                    Payment
      of Obligations

                  	
                    53

                  
	
                    5.7

                  	
                    Insurance

                  	
                    53

                  
	
                    5.8

                  	
                    Maintenance
      of Books and Records; Inspection

                  	
                    53

                  
	
                    5.9

                  	
                    Permitted
      Acquisitions

                  	
                    54

                  
	
                    5.10

                  	
                    Internal
      Control Event

                  	
                    54

                  
	
                    5.11

                  	
                    Further
      Assurances

                  	
                    54

                  
	
                    5.12

                  	
                    OFAC,
      PATRIOT Act Compliance

                  	
                    54

                  
	 
      	 
      	 
      
	 
      	
                    ARTICLE
      VI

                  	 
      
	 
      	 
      	 
      
	 
      	
                    FINANCIAL
      COVENANTS

                  	 
      
	 
      	 
      	 
      
	
                    6.1

                  	
                    Minimum
      Consolidated Net Worth

                  	
                    54

                  
	
                    6.2

                  	
                    Maximum
      Consolidated Debt to Total Capitalization

                  	
                    55

                  
	
                    6.3

                  	
                    Minimum
      Combined Statutory Surplus

                  	
                    55

                  

          

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        
          
            	 
      	
                    ARTICLE
      VII

                  	 
      
	 
      	 
      	 
      
	 
      	
                    NEGATIVE
      COVENANTS

                  	 
      
	 
      	 
      	 
      
	
                    7.1

                  	
                    Merger;
      Consolidation; Dissolution

                  	
                    55

                  
	
                    7.2

                  	
                    Indebtedness

                  	
                    55

                  
	
                    7.3

                  	
                    Liens

                  	
                    57

                  
	
                    7.4

                  	
                    Disposition
      of Assets

                  	
                    58

                  
	
                    7.5

                  	
                    Investments
      and Acquisitions

                  	
                    58

                  
	
                    7.6

                  	
                    Restricted
      Payments

                  	
                    59

                  
	
                    7.7

                  	
                    Transactions
      with Affiliates

                  	
                    60

                  
	
                    7.8

                  	
                    Lines
      of Business

                  	
                    60

                  
	
                    7.9

                  	
                    Certain
      Amendments

                  	
                    60

                  
	
                    7.10

                  	
                    Limitation
      on Certain Restrictions

                  	
                    60

                  
	
                    7.11

                  	
                    Fiscal
      Year

                  	
                    60

                  
	
                    7.12

                  	
                    Accounting
      Changes

                  	
                    61

                  
	
                    7.13

                  	
                    Ratings

                  	
                    61

                  
	 
      	 
      	 
      
	 
      	
                    ARTICLE
      VIII

                  	 
      
	 
      	 
      	 
      
	 
      	
                    EVENTS
      OF DEFAULT

                  	 
      
	 
      	 
      	 
      
	
                    8.1

                  	
                    Events
      of Default

                  	
                    61

                  
	
                    8.2

                  	
                    Remedies:
      Termination of Commitment, Acceleration, etc

                  	
                    63

                  
	
                    8.3

                  	
                    Remedies:
      Set-Off

                  	
                    64

                  
	 
      	 
      	 
      
	 
      	
                    ARTICLE
      IX

                  	 
      
	 
      	 
      	 
      
	 
      	
                    THE
      ADMINISTRATIVE AGENT

                  	 
      
	 
      	 
      	 
      
	
                    9.1

                  	
                    Appointment
      and Authority

                  	
                    64

                  
	
                    9.2

                  	
                    Rights
      as a Lender

                  	
                    64

                  
	
                    9.3

                  	
                    Exculpatory
      Provisions

                  	
                    65

                  
	
                    9.4

                  	
                    Reliance
      by Administrative Agent

                  	
                    66

                  
	
                    9.5

                  	
                    Delegation
      of Duties

                  	
                    66

                  
	
                    9.6

                  	
                    Resignation
      of Administrative Agent

                  	
                    66

                  
	
                    9.7

                  	
                    Non-Reliance
      on Administrative Agent and Other Lenders

                  	
                    67

                  
	
                    9.8

                  	
                    No
      Other Duties, Etc

                  	
                    67

                  
	 
      	 
      	 
      
	 
      	
                    ARTICLE
      X

                  	 
      
	 
      	 
      	 
      
	 
      	
                    MISCELLANEOUS

                  	 
      
	 
      	 
      	 
      
	
                    10.1

                  	
                    Expenses;
      Indemnity; Damage Waiver.

                  	
                    67

                  
	
                    10.2

                  	
                    Governing
      Law; Submission to Jurisdiction; Waiver of Venue; Service of
      Process.

                  	
                    69

                  

          

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        
          
            	
                    10.3

                  	
                    Waiver
      of Jury Trial

                  	
                    70

                  
	
                    10.4

                  	
                    Notices;
      Effectiveness; Electronic Communication.

                  	
                    70

                  
	
                    10.5

                  	
                    Amendments,
      Waivers, etc

                  	
                    71

                  
	
                    10.6

                  	
                    Successors
      and Assigns.

                  	
                    72

                  
	
                    10.7

                  	
                    No
      Waiver

                  	
                    75

                  
	
                    10.8

                  	
                    Survival

                  	
                    75

                  
	
                    10.9

                  	
                    Severability

                  	
                    75

                  
	
                    10.10

                  	
                    Construction

                  	
                    75

                  
	
                    10.11

                  	
                    Confidentiality

                  	
                    76

                  
	
                    10.12

                  	
                    Counterparts;
      Integration; Effectiveness

                  	
                    76

                  
	
                    10.13

                  	
                    No
      Fiduciary Relationship Established By Credit Documents

                  	
                    77

                  
	
                    10.14

                  	
                    Disclosure
      of Information

                  	
                    77

                  
	
                    10.15

                  	
                    USA
      Patriot Act Notice

                  	
                    77

                  

          

        

      

       

      
        
          
            	 
      	
                    EXHIBITS

                  	 
      
	 
      	 
      	 
      
	
                    Exhibit A

                  	
                    Form
      of Note

                  	 
      
	
                    Exhibit B-1

                  	
                    Form
      of Notice of Borrowing

                  	 
      
	
                    Exhibit B-2

                  	
                    Form
      of Notice of Conversion/Continuation

                  	 
      
	
                    Exhibit C

                  	
                    Form
      of Compliance Certificate

                  	 
      
	
                    Exhibit D

                  	
                    Form
      of Assignment and Assumption

                  	 
      
	
                    Exhibit E

                  	
                    Form
      of Lender Joinder Agreement

                  	 
      
	 
      	 
      	 
      
	 
      	
                    SCHEDULES

                  	 
      
	 
      	 
      	 
      
	
                    Schedule 1.1(a)

                  	
                    Commitments
      and Notice Addresses

                  	 
      
	
                    Schedule 4.6

                  	
                    Taxes

                  	 
      
	
                    Schedule 4.7

                  	
                    Subsidiaries

                  	 
      
	
                    Schedule 4.14(a)

                  	
                    Environmental
      Matters

                  	 
      
	
                    Schedule 4.14(b)

                  	
                    Underground
      Storage Tanks

                  	 
      
	
                    Schedule 4.18

                  	
                    Material
      Contracts

                  	 
      
	
                    Schedule 7.2

                  	
                    Indebtedness

                  	 
      
	
                    Schedule 7.3

                  	
                    Liens

                  	 
      
	
                    Schedule 7.7

                  	
                    Transactions
      with Affiliates

                  	 
      

          

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      CREDIT
AGREEMENT

       

      THIS CREDIT AGREEMENT, dated
as of the 25th day of August, 2009 (this “Agreement”), is made
between SELECTIVE INSURANCE
GROUP, INC., a New Jersey corporation with its principal offices in
Branchville, New Jersey (the “Borrower”), the
Lenders (as hereinafter defined), and WACHOVIA BANK, NATIONAL
ASSOCIATION, as Administrative Agent for the Lenders (the “Administrative
Agent”).

       

      RECITALS

       

      A.           The
Borrower has requested that the Lenders make available to the Borrower a
revolving credit facility in the aggregate principal amount of
$30,000,000.  The Borrower will use the proceeds of this facility for
working capital and general corporate purposes of the Borrower and its
subsidiaries.

       

      B.           The
Lenders are willing to make available to the Borrower the credit facility
described herein subject to and on the terms and conditions set forth in this
Agreement.

       

      AGREEMENT

       

      NOW, THEREFORE, in
consideration of the mutual provisions, covenants and agreements herein
contained, the parties hereto hereby agree as follows:

       

      ARTICLE
I

       

      DEFINITIONS

       

      1.1           Defined
Terms.  For
purposes of this Agreement, in addition to the terms defined elsewhere herein,
the following terms shall have the meanings set forth below (such meanings to be
equally applicable to the singular and plural forms thereof):

       

      “Account Designation
Letter” shall mean a letter from the Borrower to the Administrative
Agent, duly completed and signed by an Authorized Officer and in form and
substance reasonably satisfactory to the Administrative Agent, listing any one
or more accounts to which the Borrower may from time to time request the
Administrative Agent to forward the proceeds
of any Loans made hereunder.

       

      “Acquisition” shall
mean any transaction or series of related transactions, consummated on or after
the date hereof, by which the Borrower directly, or indirectly
through one or more Subsidiaries, (i) acquires any going business, or all
or substantially all of the assets, of any Person (other than a Subsidiary),
whether through purchase of assets, merger or otherwise, or (ii) acquires
securities or other ownership interests of any Person (other than a Subsidiary)
having at least a majority of combined voting power of the then outstanding
securities or other ownership interests of such Person.

       

      “Additional Lender”
has the meaning given to such term in Section 2.20(a).

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      “Adjusted Base Rate”
means, at any time with respect to any Base Rate Loan, a rate per annum equal to
the Base Rate as in effect at such time plus the Applicable
Percentage for Base Rate Loans as in effect at such time.

       

      “Adjusted LIBOR Rate”
shall mean, at any time with respect to any LIBOR Loan, a rate per annum equal
to the LIBOR Rate as in effect at such time plus the Applicable
Percentage for LIBOR Loans as in effect at such time.

       

      “Administrative Agent”
has the meaning given to such term in the introductory paragraph
hereof.

       

      “Administrative
Questionnaire”  means an Administrative Questionnaire in the
form provided by the Administrative Agent.

       

      “Affiliate” shall
mean, as to any Person, each other Person that directly, or indirectly through
one or more intermediaries, owns or controls, is controlled by or under common
control with, such Person or is a director or officer of such
Person.  For purposes of this definition, with respect to any Person
“control” shall mean (i) the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise, or
(ii) the beneficial ownership of securities or other ownership interests of
such Person having 10% or more of the combined voting power of the then
outstanding securities or other ownership interests of such Person ordinarily
(and apart from rights accruing under special circumstances) having the right to
vote in the election of directors or other governing body of such
Person.

       

      “Agreement” shall mean
this Credit Agreement, as amended, modified or supplemented from time to
time.

       

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

      

      “Applicable
Percentage” means, for any day, with respect to (i) the Commitment Fee,
(ii) the applicable margin to be added to the LIBOR Rate for purposes of
determining the Adjusted LIBOR Rate, and (iii) the applicable margin to be added
to the Base Rate for purposes of determining the Adjusted Base Rate, the
applicable rate per annum set forth below under the caption “Commitment Fee”,
“Applicable LIBOR Margin” and “Applicable Base Rate Margin”, respectively, in
each case as determined based on the actual rating of the Borrower’s senior
unsecured, non-credit enhanced long-term debt by Moody’s and Standard &
Poor’s in effect on the date of determination (the “Debt
Rating”):

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        
          
            
              
                	
                        Level

                      	 	
                        Debt Rating

                      	 	
                        Commitment Fee

                      	 	 	
                        Applicable LIBOR

                        Margin

                      	 	 	
                        Applicable Base

                        Rate Margin

                      	 
	
                        I

                      	 	
                        ≥
      A-/A3

                      	 	 	0.50	%	 	 	2.50	%	 	 	1.50	%
	
                        II

                      	 	
                        ≥
BBB+/Baa1

                      	 	 	0.60	%	 	 	3.00	%	 	 	2.00	%
	
                        III

                      	 	
                        ≥ BBB/Baa2

                      	 	 	0.70	%	 	 	3.50	%	 	 	2.50	%
	
                        IV

                      	 	
                        ≥
BBB-/Baa3

                      	 	 	0.80	%	 	 	4.00	%	 	 	3.00	%
	
                        V

                      	 	
                        ≤
      BB+/Ba1

                      	 	 	0.90	%	 	 	4.50	%	 	 	3.50	%

              

            

          

        

      

      

      (a)           If
there is a split in the Debt Ratings established by Moody’s and Standard &
Poor’s of one Level, then the Applicable Margin shall be based upon the higher
of such Debt Ratings (with Level I being the highest and Level V being the
lowest).  If there is a split in the Debt Ratings established by
Moody’s and Standard & Poor’s of more than one Level, then the Applicable
Margin shall be based upon the Debt Rating that is one Level lower than the
higher Debt Rating.

       

      (b)           If
neither Moody’s nor Standard & Poor’s publishes a Debt Rating, or during the
existence of a Default or an Event of Default, the Applicable Margin shall be
Level V.

       

      (c)           If
only one of Moody’s or Standard & Poor’s shall have a Debt Rating in effect,
the Applicable Margin shall be determined by reference to the available Debt
Rating.

       

      (d)           If
Moody’s or Standard & Poor’s shall change the basis on which Debt Ratings
are established, each reference to the Debt Rating announced by Moody’s or
Standard & Poor’s, as the case may be, shall refer to the then equivalent
Debt Rating announced by Moody’s or Standard & Poor’s, as the case may
be.

       

      (e)           It
is acknowledged that as of the Closing Date, Level II applies.  If any
Debt Rating shall be established or changed, it shall be effective on the date
first announced publicly by the agency establishing such Debt Rating or making
such change.

       

      “Approved Fund” means
any Fund that is administered or managed by (i) a Lender, (ii) an
Affiliate of a Lender, or (iii) a Person (or an Affiliate of a Person) that
administers or manages a Lender.

       

      “Arranger” means
Wachovia Capital Markets, LLC and its successors.

       

      “Assignment and
Assumption” means an Assignment and Assumption entered into by a Lender
and an assignee (with the consent of any party whose consent is required by
Section 10.6(b)),
and accepted by the Administrative Agent, in substantially the form of Exhibit D or any other
form approved by the Administrative Agent.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      “Authorized Officer”
shall mean, with respect to any action specified herein, any officer of the
Borrower, as the case may be, duly authorized by resolution of the board of
directors of the Borrower to take such action on its behalf, and whose signature
and incumbency shall have been certified to the Administrative Agent by the corporate
secretary or assistant corporate secretary of the Borrower.

       

      “Bankruptcy Code”
shall mean 11 U.S.C. §§ 101 et seq., as amended from
time to time, and any successor statute.

       

      “Base Rate” shall mean
the higher of (i) the per annum interest rate publicly announced from time to
time by the Administrative Agent at its headquarters, to be its prime commercial
lending rate (which may not necessarily be its best lending rate), as adjusted
to conform to changes as of the opening of business on the date of any such
change in such prime rate, (ii) the Federal Funds Rate plus 0.50% per annum,
as adjusted to conform to changes as of the opening of business on the date of
any such change in the Federal Funds Rate, and (iii) the LIBOR Rate with an
Interest Period duration of one month plus 1.50%, as
adjusted to conform to changes as of the opening of business on the date of any
such change in such LIBOR Rate.

       

      “Base Rate Loan” shall
mean, at any time, any Loan that bears interest at such time at the Adjusted
Base Rate.

       

      “Borrower” has the
meaning given to such term in the introductory paragraph hereof.

       

      “Borrower Margin
Stock” shall mean shares of capital stock of the Borrower that are held
by the Borrower or any of its Subsidiaries and that constitute Margin
Stock.

       

      “Borrowing” shall mean
the incurrence by the Borrower (including as a result of conversions and
continuations of outstanding Loans pursuant to Section 2.11) on a single
date of a Loan of a single Type and, in the case of LIBOR Loans, as to which a
single Interest Period is in effect.

       

      “Borrowing Date” has
the meaning given to such term in Section 2.2(b).

       

      “Business Day” shall
mean (i) any day other than a Saturday or Sunday, a legal holiday or a day
on which commercial banks in Charlotte, North Carolina are required by law to be
closed and (ii) in respect of any determination relevant to a LIBOR Loan,
any such day that is also a day on which tradings are conducted in the London
interbank Eurodollar market.

       

      “Capital Stock” shall
mean (i) with respect to any Person that is a corporation, any and all
shares, interests or equivalents in capital stock (whether voting or nonvoting,
and whether common or preferred) of such corporation, and (ii) with respect
to any Person that is not a corporation, any and all partnership, membership,
limited liability company or other equity interests of such Person; and in each
case, any and all warrants, rights or options to purchase any of the
foregoing.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      “Cash Equivalents”
shall mean (i) securities issued or unconditionally guaranteed by the
United States of America or any agency or instrumentality thereof, backed by the
full faith and credit of the United States of America and maturing within ninety
(90) days from the date of acquisition, (ii) commercial paper issued by any
Person organized under the laws of the United States of America, maturing within
ninety (90) days from the date of acquisition and having a rating of at least
A-1 or the equivalent thereof by Standard & Poor’s or at least P-1 or the
equivalent thereof by Moody’s, (iii) time deposits and certificates of
deposit maturing within ninety (90) days from the date of issuance and issued by
a bank or trust company organized under the laws of the United States of America
or any state thereof that has combined capital and surplus of at least
$500,000,000 and that has (or is a subsidiary of a bank holding company that
has) a long-term unsecured debt rating of at least A or the equivalent thereof
by Standard & Poor’s or at least A2 or the equivalent thereof by Moody’s,
(iv) repurchase obligations with a term not exceeding seven (7) days with
respect to underlying securities of the types described in clause (i) above
entered into with any bank or trust company meeting the qualifications specified
in clause (iii) above, and (v) money market funds at least 95% of the
assets of which are continuously invested in securities of the type described in
clause (i) above.

       

      “Change in Law” means
the occurrence, after the date of this Agreement, of any of the following:
(i) the adoption or taking effect of any law, rule, regulation or treaty,
(ii) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (iii) the making or issuance of any request, guideline or
directive (whether or not having the force of law) by any Governmental
Authority.

       

      “Closing Date” shall
mean the date upon which each of the conditions set forth in Sections 3.1 and 3.2 shall have been satisfied
or waived in accordance with the terms of this Agreement.

       

      “Combined Statutory
Surplus” shall mean, as of any date of determination, the aggregate
(without duplication) of all Statutory Surplus of the Insurance Subsidiaries as
of such date.

       

      “Commitment” means,
with respect to any Lender at any time, the commitment of such Lender to make
Loans in an aggregate principal amount at any time outstanding up to the amount
set forth opposite such Lender’s name on Schedule 1.1(a) under the
caption “Commitment” or, if such Lender has entered into one or more Assignment
and Assumptions, the amount set forth for such Lender at such time in the
Register maintained by the Administrative Agent pursuant to Section 10.6(c) as such
Lender’s “Commitment,” in either case, as such amount may be reduced at or prior
to such time pursuant to the terms hereof.

       

      “Commitment Fee” has
the meaning given to such term in Section 2.9(b).

       

      “Commitment Increase”
has the meaning given to such term in Section 2.20(a).

       

      “Commitment Increase
Date” has the meaning given to such term in Section 2.20(c).

       

      “Compliance
Certificate” shall mean a fully completed and duly executed certificate
in substantially the form of Exhibit C, together with
a Covenant Compliance Worksheet.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      “Consolidated
Indebtedness” shall mean, as of the last day of any fiscal quarter, the
aggregate (without duplication) of all Indebtedness (whether or not reflected on
the Borrower’s or any Subsidiary’s balance sheet) of the Borrower and its Subsidiaries as
of such date, determined on a consolidated basis in accordance with GAAP, provided, however, that, for
purposes of calculating the financial covenants set forth in Article VI, Consolidated
Indebtedness shall exclude (i) reimbursement obligations in respect of any
letters of credit issued for the benefit of any Insurance Subsidiary or the
Borrower in the
ordinary course of its business, but only in each case to the extent such
letters of credit (A) are not drawn upon and (B) are collateralized by
cash or Cash Equivalents, (ii) surplus notes or intercompany loans issued for
the benefit of any Insurance Subsidiary or the Borrower in the ordinary course
of its business, and (iii) the obligations of the Borrower or any of its
Subsidiaries under any Hybrid Equity Securities to the extent that the
total book value of such Hybrid Equity Securities does not exceed 15% of
Consolidated Total Capital.  Notwithstanding the foregoing, FLHB
Indebtedness shall be included in Consolidated Indebtedness.

       

      “Consolidated Net
Income” shall mean, for any period, net income (or loss) for the Borrower
and its Subsidiaries for such period and as reflected on the consolidated
financial statements of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.

       

      “Consolidated Net
Worth” shall mean, as of any date of determination, the consolidated
shareholders’ equity of the Borrower and its Subsidiaries determined in
accordance with GAAP and as reflected on the consolidated financial statements
of the Borrower and its Subsidiaries, excluding any Disqualified Capital Stock
(except to the extent deducted in determining such consolidated shareholders’
equity).

       

      “Consolidated Total
Capital” shall mean, as of any date of determination, the sum of (i)
Consolidated Net Worth as of such date, (ii) Consolidated Indebtedness (but
excluding any Hybrid Equity Securities) as of such date and (iii) the
obligations of the Borrower and its Subsidiaries under any Hybrid Equity
Securities as of such date.

       

      “Contingent
Obligation” shall mean, with respect to any Person, any direct or
indirect liability of such Person with respect to any Indebtedness, liability or
other obligation (the “primary obligation”) of another Person (the “primary
obligor”), whether or not contingent, (i) to purchase, repurchase or
otherwise acquire such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or provide funds (A) for
the payment or discharge of any such primary obligation or (B) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet item, level of income or
financial condition of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor in respect thereof
to make payment of such primary obligation or (iv) otherwise to assure or
hold harmless the owner of any such primary obligation against loss or failure
or inability to perform in respect thereof; provided, however, that, with
respect to the Borrower and its Subsidiaries,
the term Contingent Obligation shall not include (i) endorsements for collection
or deposit in the ordinary course of business and (ii) undrawn capital
commitments with respect to the Borrower’s or any of its Subsidiary’s limited
partnership interest in funds organized primarily for the purpose of making
equity or debt investments in one or more portfolio companies.

       

      “Covenant Compliance
Worksheet” shall mean a fully completed worksheet substantially in the
form of Attachment A to
Exhibit C.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      “Credit Documents”
shall mean this Agreement, the Notes, the Fee Letter, any Hedge Agreement to
which the Borrower and any Lender are
parties, and all other agreements, instruments, documents and certificates now
or hereafter executed and delivered to the Administrative Agent or any Lender by
or on behalf of the Borrower or any of its Subsidiaries with respect to this
Agreement and the transactions contemplated hereby, in each case as amended,
modified, supplemented or restated from time to time.

       

      “Debt Rating” shall
have the meaning given to such term in the defined term “Applicable
Percentage.”

       

      “Default” shall mean
any event or condition that, with the passage of time or giving of notice, or
both, would constitute an Event of Default.

       

      “Defaulting Lender”
means any Lender that (i) has refused to fund, or otherwise defaulted in
the funding of, its ratable share of any Borrowing requested and permitted to be
made hereunder, and such refusal has not been withdrawn within three (3)
Business Days, (ii) has failed to pay to the Administrative Agent or any
Lender when due an amount owed by such Lender pursuant to the terms of this
Agreement, unless such amount is subject to a good faith dispute, and such
default has not been cured within three (3) Business Days or (iii) has been
deemed insolvent or has become subject to a bankruptcy or insolvency proceeding
or to a receiver, trustee or similar official.

       

      “Disqualified Capital
Stock” means, with respect to any Person, any Capital Stock of such
Person that, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any event
or otherwise, (i) matures or is mandatorily redeemable or subject to any
mandatory repurchase requirement, pursuant to a sinking fund obligation or
otherwise, (ii) is redeemable or subject to any mandatory repurchase
requirement at the sole option of the holder thereof, or (iii) is
convertible into or exchangeable for (whether at the option of the issuer or the
holder thereof) (A) debt securities or (B) any Capital Stock referred
to in (i) or (ii) above, in each case under (i), (ii) or (iii) above at any time
on or prior to the Maturity Date; provided, however, that only
the portion of Capital Stock that so matures or is mandatorily redeemable, is so
redeemable at the option of the holder thereof, or is so convertible or
exchangeable on or prior to such date shall be deemed to be Disqualified Capital
Stock.

       

      “Dollars” or “$” shall
mean dollars of the United States of America.

       

      “Eligible Assignee”
means (i) a Lender, (ii) an Affiliate of a Lender that is primarily
engaged in the business of commercial banking, (iii) an Approved Fund, and
(iv) any other Person (other than a natural person) approved by
(y) the Administrative Agent and (z) unless a Default or Event of
Default has occurred and is continuing, the Borrower (each such approval not to
be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include the
Borrower or any of its Affiliates or Subsidiaries.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      “Environmental Claims”
shall mean any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, accusations, allegations, notices of
noncompliance or violation, investigations (other than internal reports prepared
by any Person in the ordinary course of its business and not in response to any
third party action or request of any kind) or proceedings relating in any way to
any actual or alleged violation of or liability under any Environmental Law or
relating to any permit issued, or any approval given, under any such
Environmental Law (collectively, “Claims”), including,
without limitation, (i) any and all Claims by Governmental Authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law and (ii) any and all Claims by
any third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Substances or arising
from alleged injury or threat of injury to human health or the
environment.

       

      “Environmental Laws”
shall mean any and all federal, state and local laws, statutes, ordinances,
rules, regulations, permits, licenses, approvals, rules of common law and orders
of courts or Governmental Authorities, relating to the protection of human
health or occupational safety or the environment, now or hereafter in effect and
in each case as amended from time to time, including, without limitation,
requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Substances.

       

      “ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as amended from time to time,
and any successor statute, and all rules and regulations from time to time
promulgated thereunder.

       

      “ERISA Affiliate”
shall mean any Person (including any trade or business, whether or not
incorporated) that is deemed to be under “common control” with, or a member of
the same “controlled group” as the Borrower or any of its
Subsidiaries, within the meaning of Sections 414(b), (c), (m) or (o) of the
Internal Revenue Code or Section 4001 of ERISA.

       

      “ERISA Event” shall
mean any of the following with respect to a Plan or Multiemployer Plan, as
applicable: (i) a Reportable Event with respect to a Plan or a
Multiemployer Plan, (ii) a complete or partial withdrawal by the
Borrower or any
ERISA Affiliate from a Multiemployer Plan that results in liability to the
Borrower or any ERISA Affiliate under Section 4201 or 4204 of ERISA, or the
receipt by the Borrower or any ERISA Affiliate
of notice from a Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA, (iii) the distribution by the
Borrower or any ERISA Affiliate under Section 4041 of ERISA of a notice of
intent to terminate any Plan or the taking of any action to terminate any Plan,
(iv) the commencement of proceedings by the PBGC under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan, or the receipt by the Borrower or any ERISA Affiliate of a notice from any
Multiemployer Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan, (v) the institution of a proceeding by any
fiduciary of any Multiemployer Plan against the Borrower or any ERISA Affiliate
to enforce Section 515 of ERISA, which is not dismissed within thirty (30) days,
(vi) the imposition upon the Borrower or any ERISA Affiliate of any
liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, or the imposition or threatened
imposition of any Lien upon any assets of the Borrower or any ERISA Affiliate as
a result of any alleged failure to comply with the Internal Revenue Code or
ERISA in respect of any Plan, (vii) the engaging in or otherwise becoming
liable for a nonexempt Prohibited Transaction by the Borrower or any ERISA
Affiliate, (viii) a violation of the applicable requirements of Section 404
or 405 of ERISA or the exclusive benefit rule under Section 401(a) of the
Internal Revenue Code by any fiduciary of any Plan for which the Borrower or any
of its ERISA Affiliates may be directly or indirectly liable or (ix) the
adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) and
Section 436(c) of the Internal Revenue Code, would result in the loss of
tax-exempt status of the trust of which such Plan is a part if the Borrower or
an ERISA Affiliate fails to timely provide contributions to such Plan in
accordance with the provisions of Section 436(c) of the Internal Revenue
Code.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      “Event of Default”
shall have the meaning given to such term in Section 8.1.

       

      “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended from time to time, and any
successor statute, and all rules and regulations from time to time promulgated
thereunder.

       

      “Excluded Taxes”
means, with respect to the Administrative Agent, any Lender or any other
recipient of any payment to be made by or on account of any obligation of the
Borrower hereunder, (i) taxes imposed on or measured by its overall net
income or net profits (however denominated), and franchise taxes imposed on it
(in lieu of net income or net profits taxes), by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or in which it is
otherwise doing business (other than a jurisdiction in which such Administrative
Agent or Lender would not have been treated as doing business but for its
execution and delivery of any Credit Document or its exercise of its rights or
performance of its obligations thereunder) or, in the case of any Lender, in
which its applicable Lending Office is located, (ii) any branch profits
taxes imposed by the United States or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (iii) other than an
assignee pursuant to a request by the Borrower under Section 2.19(a), any
withholding tax or backup withholding tax that is imposed on amounts payable to
such Lender at the time such Lender becomes a party hereto (or designates a new
Lending Office) or is attributable to such Lender’s failure or inability (other
than as a result of a Change in Law) to comply with Sections 2.17(f) or 2.17(g), except to the extent
that such Lender (or its assignor, if any) was entitled, at the time of
designation of a new Lending Office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to Section 2.17(a).

       

      “Existing Senior Credit
Facility” shall have the meaning given to such term in Section 3.1(g).

       

      “Federal Funds Rate”
shall mean, for any period, a fluctuating per annum interest rate (rounded
upwards, if necessary, to the nearest 1/100 of one percentage point) equal for
each day during such period to the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Administrative Agent from three federal funds brokers of recognized standing
selected by the Administrative Agent.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      “Federal Reserve
Board” shall mean the Board of Governors of the Federal Reserve System
and any successor thereto.

       

      “Fee Letter” shall
mean the letter from the Administrative Agent and the Arranger to the Borrower,
dated July 9, 2009, relating to certain fees payable by the Borrower in respect
of the transactions contemplated by this Agreement, as amended, modified or
supplemented from time to time.

       

      “FHLB Indebtedness”
has the meaning given to such term in Section 7.2(ix).

       

      “FHLB Subsidiary” has
the meaning given to such term in Section 7.2(ix).

       

      “Financial Officer”
shall mean, with respect to the Borrower, the chief financial officer, vice
president - finance, principal accounting officer or treasurer of the
Borrower.

       

      “Financial Strength
Rating” means the rating that has been most recently announced by A.M.
Best & Company as the “financial strength rating” for any Insurance
Subsidiary of the Borrower.

       

      “Foreign Lender”
means, with respect to the Borrower, any Lender that is organized, or lending
through a branch that is organized, under the laws of a jurisdiction other than
that in which the Borrower is resident for tax purposes.  For purposes
of this definition, the United States, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction.

       

      “Fund” means any
Person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.

       

      “GAAP” shall mean
generally accepted accounting principles, as set forth in the statements,
opinions and pronouncements of the Accounting Principles Board, the American
Institute of Certified Public Accountants and the Financial Accounting Standards
Board, consistently applied and maintained, as in effect from time to time
(subject to the provisions of Section 1.2).

       

      “Governmental
Authority” shall mean any nation or government, any state or other
political subdivision thereof and any central bank thereof, any municipal,
local, city or county government, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.

       

      “Hazardous Substances”
shall mean any substances or materials (i) that are defined as hazardous
wastes, hazardous substances, pollutants, contaminants or toxic substances under
any Environmental Law, (ii) that are defined by any Environmental Law as
toxic, explosive, corrosive, ignitable, infectious, radioactive, mutagenic or
otherwise hazardous, (iii) the presence of which require investigation or
response under any Environmental Law, (iv) that constitute a nuisance,
trespass or health or safety hazard to Persons or neighboring properties,
(v) that consist of underground or above ground storage tanks, whether
empty, filled or partially filled with any substance, or (vi) that contain,
without limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam
insulation, petroleum hydrocarbons, petroleum derived substances or wastes,
crude oil, nuclear fuel, natural gas or synthetic gas.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      “Hedge Agreement”
shall mean any interest or foreign currency rate swap, cap, collar, option,
hedge, forward rate or other similar agreement or arrangement designed to
protect against fluctuations in interest rates or currency exchange
rates.

       

      “Historical Statutory
Statements” shall have the meaning given to such term in Section 4.11(c).

       

      “Hybrid Equity
Securities” shall mean any hybrid preferred securities consisting of
trust preferred securities, deferrable interest subordinated debt securities,
mandatory convertible debt or other hybrid securities that are shown on the
consolidated financial statements of the Borrower as liabilities and that (i) by
its terms (or by the terms of any security into which it is convertible for or
which it is exchangeable) or upon the happening of any event or otherwise, does
not mature or is not mandatorily redeemable or is not subject to any mandatory
repurchase requirement, at any time on or prior to the date which is one year
after the Maturity Date and (ii) in the event either Standard & Poor’s or
Moody’s or both evaluates any such securities, such securities are treated as
equity by Standard & Poor’s, Moody’s, or both, as the case may be; provided, however, that if
Standard & Poor’s and Moody’s equity treatment of such securities are
different, then such securities shall be deemed to be Hybrid Equity Securities
only to the extent and in an amount equal to the product of (y) the total book
value of such securities and (z) the lesser of (A) the equity treatment (in
terms of percentage) granted to such securities by Standard & Poor’s and (B)
the equity treatment (in terms of percentage) granted to such securities by
Moody’s.

       

      “Increasing Lender”
has the meaning given to such term in Section 2.20(a).

       

      “Indebtedness” shall
mean, with respect to any Person (without duplication), (i) all
indebtedness and obligations of such Person for borrowed money or in respect of
loans or advances of any kind, (ii) all obligations of such Person
evidenced by notes, bonds, debentures or similar instruments, (iii) all
reimbursement obligations of such Person with respect to surety bonds, letters
of credit and bankers’ acceptances (in each case, whether or not drawn or
matured and in the stated amount thereof), (iv) all obligations of such
Person to pay the deferred purchase price of property or services, (v) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person,
(vi) all obligations of such Person as lessee under leases that are or are
required to be, in accordance with GAAP, recorded as capital leases, to the
extent such obligations are required to be so recorded, (vii) all
Disqualified Capital Stock issued by such Person, with the amount of
Indebtedness represented by such Disqualified Capital Stock being equal to the
greater of its voluntary or involuntary liquidation preference and its maximum
fixed repurchase price, but excluding accrued dividends, if any (for purposes
hereof, the “maximum fixed repurchase price” of any Disqualified Capital Stock
that does not have a fixed repurchase price shall be calculated in accordance
with the terms of such Disqualified Capital Stock as if such Disqualified
Capital Stock were purchased on any date on which Indebtedness shall be required
to be determined pursuant to this Agreement, and if such price is based upon, or
measured by, the fair market value of such Disqualified Capital Stock, such fair
market value shall be determined reasonably and in good faith by the board of
directors or other governing body of the issuer of such Disqualified Capital
Stock), (viii) the net termination obligations of such Person under any
Hedge Agreements, calculated as of any date as if such agreement or arrangement
were terminated as of such date, (ix) all Contingent Obligations of such
Person and (x) all indebtedness referred to in clauses (i) through
(ix) above secured by any Lien on any property or asset owned or held by such
Person regardless of whether the indebtedness secured thereby shall have been
assumed by such Person or is nonrecourse to the credit of such
Person.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      “Indemnified Taxes”
means Taxes other than Excluded Taxes.

       

      “Indemnitee” has the
meaning given to such term in Section 10.1(b).

       

      “Insurance Regulatory
Authority” shall mean, with respect to any Insurance Subsidiary, the
insurance department or similar Governmental Authority charged with regulating
insurance companies or insurance holding companies, in its jurisdiction of
domicile and, to the extent that it has regulatory authority over such Insurance
Subsidiary, in each other jurisdiction in which such Insurance Subsidiary
conducts business or is licensed to conduct business.

       

      “Insurance Subsidiary”
shall mean any direct or indirect Subsidiary of the Borrower the ability of which to
pay dividends is regulated by an Insurance Regulatory Authority or that is
otherwise required to be regulated thereby in accordance with the applicable
Requirements of Law of its jurisdiction of domicile, and shall mean and include,
without limitation, Selective Insurance Company of America, Selective Way
Insurance Company, Selective Auto Insurance Company of New Jersey, Selective
Insurance Company of South Carolina, Selective Insurance Company of the
Southeast, Selective Insurance Company of New York and Selective Insurance
Company of New England.

       

      “Interest Period”
shall have the meaning given to such term in Section 2.10.

       

      “Internal Control
Event” means a “material weakness” (as defined in Statement on Auditing
Standards No. 60) in, or fraud that involves management or other employees who
have a significant role in, the Borrower’s internal controls over financial
reporting, in each case as described in Section 404 of the Sarbanes-Oxley Act of
2002 and all rules and regulations promulgated thereunder and the accounting and
auditing principles, rules, standards and practices promulgated or approved with
respect thereto.

       

      “Internal Revenue
Code” shall mean the Internal Revenue Code of 1986, as amended from time
to time, and any successor statute, and all rules and regulations from time to
time promulgated thereunder.

       

      “Investment Policy”
shall mean the Investment Policy of the Insurance Subsidiaries as of the date
hereof, together with such changes therein or additions thereto as are made by
the Insurance Subsidiaries in good faith.

       

      “Lender” means each
Person signatory hereto as a “Lender” and each other Person that becomes a
“Lender” hereunder pursuant to Section 10.6, and their
respective successors and assigns.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      “Lender Joinder
Agreement” means a joinder agreement in the form of Exhibit E.

       

      “Lending Office” shall
mean, with respect to any Lender, the office of such Lender designated as such
in such Lender’s Administrative Questionnaire or in connection with an
Assignment and Assumption, or such other office as may be otherwise designated
in writing from time to time by such Lender to the Borrower and the
Administrative Agent.  A Lender may designate separate Lending Offices
as provided in the foregoing sentence for the purposes of making or maintaining
different Types of Loans, and, with respect to LIBOR Loans, such office may be a
domestic or foreign branch or Affiliate of such Lender.

       

      “LIBOR Loan” shall
mean, at any time, any Loan that bears interest at such time at the Adjusted
LIBOR Rate.

       

      “LIBOR Rate” shall
mean, with respect to each LIBOR Loan comprising part of the same Borrowing for
any Interest Period, an interest rate per annum obtained by dividing
(i) (y) the rate of interest appearing on Reuters Screen LIBOR01 Page
(or any successor page) or (z) if no such rate is available, the rate of
interest determined by the Administrative Agent to be the rate or the
arithmetic mean of rates (rounded upward, if necessary, to the nearest 1/16 of
one percentage point) at which Dollar deposits in immediately available funds
are offered to first-tier banks in the London interbank Eurodollar market, in
each case under (y) and (z) above at approximately 11:00 a.m., London time two
(2) Business Days prior to the first day of such Interest Period for a period
substantially equal to such Interest Period and in an amount substantially equal
to the amount of the LIBOR Loan comprising part of such Borrowing, by
(ii) the amount equal to 1.00 minus the Reserve
Requirement (expressed as a decimal) for such Interest Period.

       

      “Licenses” shall mean
any and all licenses (including provisional licenses), certificates of need,
accreditations, permits, franchises, rights to conduct business, approvals (by a
Governmental Authority or otherwise), consents, qualifications, operating
authority and any other authorizations.

       

      “Lien” shall mean any
mortgage, pledge, hypothecation, assignment, security interest, lien (statutory
or otherwise), preference, priority, charge or other encumbrance of any nature,
whether voluntary or involuntary, including, without limitation, the interest of
any vendor or lessor under any conditional sale agreement, title retention
agreement, capital lease or any other lease or arrangement having substantially
the same effect as any of the foregoing.

       

      “Loans” shall have the
meaning given to such term in Section 2.1.

       

      “Margin Stock” shall
have the meaning given to such term in Regulation U.

       

      “Material Adverse
Change” shall mean a material adverse change in the financial condition,
operations, business, properties or assets of, as the case may be, the
Borrower and its
Subsidiaries, taken as a whole.

       

      “Material Adverse
Effect” shall mean a material adverse effect upon (i) the financial
condition, operations, business, properties or assets of the Borrower and its
Subsidiaries, taken as a whole, (ii) the ability of the Borrower or any
Subsidiary to perform its obligations in any material respect under this
Agreement or any of the other Credit Documents to which it is a party or
(iii) the legality, validity or enforceability of this Agreement or any of
the other Credit Documents or the rights and remedies of the Administrative
Agent and the Lenders hereunder and thereunder.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      “Material Contract”
shall have the meaning given to such term in Section 4.18.

       

      “Material Insurance
Subsidiary” shall mean (i) any Insurance Subsidiary rated as of the
Closing Date and (ii) any other Insurance Subsidiary that comprises more than
ten percent (10%) of Combined Statutory Surplus.

       

      “Maturity Date” shall
mean August 11, 2011.

       

      “Moody’s” shall mean
Moody’s Investors Service Inc.

       

      “Multiemployer Plan”
shall mean any “multiemployer plan” within the meaning of Section 4001(a)(3) of
ERISA to which the Borrower or any ERISA Affiliate makes, is making or is
obligated to make contributions or has made or been obligated to make
contributions.

       

      “NAIC” shall mean the
National Association of Insurance Commissioners and any successor
thereto.

       

      “Notes” shall mean,
with respect to any Lender requesting the same, the promissory note of the
Borrower in favor of such Lender evidencing the Loans made by such Lender
pursuant to Section 2.1,
in substantially the form of Exhibit A, together with
any amendments, modifications and supplements thereto, substitutions therefor
and restatements thereof.

       

      “Notice of Borrowing”
shall have the meaning given to such term in Section 2.2(b).

       

      “Notice of
Conversion/Continuation” shall have the meaning given to such term in
Section 2.11(b).

       

      “Obligations” shall
mean all principal of and interest (including, to the greatest extent permitted
by law, post-petition interest) on the Loans, and all fees, reasonable expenses,
indemnities and other obligations owing, due or payable at any time by the
Borrower to the Administrative Agent, any Lender or any other Person entitled
thereto, under this Agreement or any of the other Credit Documents.

       

      “OFAC” means the U.S.
Department of the Treasury’s Office of Foreign Assets Control, and any successor
thereto.

       

      “Other Taxes” means
all present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies arising from any payment made hereunder or
under any other Credit Document or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Credit
Document.

       

      “Payment Office” means
the office of the Administrative Agent designated on Schedule 1.1(a) under the
heading “Instructions for wire transfers to the Administrative Agent,” or such
other office as the Administrative Agent may designate to the Lenders and the
Borrower for such purpose from time to time.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      “PBGC” shall mean the
Pension Benefit Guaranty Corporation and any successor thereto.

       

      “Permitted
Acquisition” shall mean (i) any Acquisition with respect to which all of
the following conditions are satisfied:  (A) each business acquired
shall be within the permitted lines of business described in Section 7.8, (B) in the case
of an Acquisition involving the acquisition of control of Capital Stock of any
Person, immediately after giving effect to such Acquisition such Person (or the
surviving Person, if the acquisition is effected through a merger or
consolidation) shall be the Borrower or a Subsidiary, and (C) all of the
conditions and requirements of Section 5.9 applicable to such
Acquisition are satisfied; or (ii) any other Acquisition to which the Required
Lenders (or the Administrative Agent on their behalf) shall have given their
prior written consent (which consent may be in their sole discretion but may not
be unreasonably withheld or delayed and may be given subject to such additional
terms and conditions as the Required Lenders shall establish) and with respect
to which all of the conditions and requirements set forth in this definition and
in Section 5.9, and in
or pursuant to any such consent, have been satisfied or waived in writing by the
Required Lenders.

       

      “Permitted Liens”
shall have the meaning given to such term in Section 7.3.

       

      “Person” shall mean
any corporation, association, joint venture, partnership, limited liability
company, organization, business, individual, trust, government or agency or
political subdivision thereof or any other legal entity.

       

      “Plan” shall mean any
“employee pension benefit plan” within the meaning of Section 3(2) of ERISA that
is subject to the provisions of Title IV of ERISA (other than a Multiemployer
Plan) and to which the Borrower or any ERISA Affiliate has any
liability.

       

      “Prohibited
Transaction” shall mean any transaction described in (i) Section 406
of ERISA that is not exempt by reason of Section 408 of ERISA or by reason of a
Department of Labor prohibited transaction individual or class exemption or
(ii) Section 4975(c) of the Internal Revenue Code that is not exempt by
reason of Section 4975(c)(2) or 4975(d) of the Internal Revenue
Code.

       

      “Quarterly Statement”
shall mean, with respect to any Insurance Subsidiary for any fiscal quarter, the
quarterly financial statements of such Insurance Subsidiary as required to be
filed with the Insurance Regulatory Authority of its jurisdiction of domicile,
together with all exhibits, schedules, certificates and actuarial opinions
required to be filed or delivered therewith.

       

      “Ratable Share” of any
amount means, at any time for each Lender, a percentage obtained by dividing
such Lender’s Commitment at such time by the aggregate Commitments then in
effect, provided that, if the
Termination Date has occurred, the Ratable Share of each Lender shall be
determined by dividing such Lender’s outstanding Loans by the aggregate of all
outstanding Loans as of any date of determination.

       

      “Register” has the
meaning given to such term in Section 10.6(c).

       

      
        
          
          

        

        
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      “Regulations D, T, U and
X” shall mean Regulations D, T, U and X, respectively, of the Federal
Reserve Board, and any successor regulations.

       

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

       

      “Related Parties”
means, with respect to any Person, such Person’s Affiliates and the partners,
directors, officers, employees, agents and advisors of such Person and of such
Person’s Affiliates.

       

      “Reportable Event”
shall mean (i) any “reportable event” within the meaning of Section 4043(c)
of ERISA with respect to a Plan for which the 30-day notice under Section
4043(a) of ERISA has not been waived by the PBGC (including any failure to meet
the minimum funding standard of, or timely make any required installment under,
Section 412 of the Internal Revenue Code or Section 302 of ERISA), (ii) any
such “reportable event” subject to advance notice to the PBGC under Section
4043(b)(3) of ERISA, (iii) any application for a funding waiver pursuant to
Section 412 of the Internal Revenue Code, and (iv) a cessation of
operations described in Section 4062(e) of ERISA.

       

      “Required Lenders”
shall mean, (i) prior to the Termination Date, Lenders having Commitments
representing more than 50% of the aggregate Commitments at such time, or (ii) on
and after the Termination Date, the Lenders holding outstanding Loans
representing more than 50% of the aggregate, at such time, of all outstanding
Loans.

       

      “Requirements of Law”
shall mean, with respect to any Person, (i) the charter, articles or certificate
of organization or incorporation and bylaws or other organizational documents of
such Person, and (ii) (a) any statute, law, treaty, rule or regulation in each
case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject or otherwise pertaining to
any or all of the transactions contemplated by this Agreement and the other
Credit Documents, and (b) any order, decree, writ, injunction or determination
of any arbitrator or court or other Governmental Authority which, by its terms,
is expressly applicable to or binding upon such Person or any of its property,
or otherwise pertaining to any or all of the transactions contemplated by this
Agreement and the other Credit Documents.

       

      “Reserve Requirement”
shall mean, with respect to any Interest Period, the reserve percentage
(expressed as a decimal) in effect from time to time during such Interest
Period, as provided by the Federal Reserve Board, applied for determining the
maximum reserve requirements (including, without limitation, basic,
supplemental, marginal and emergency reserves) applicable to Wachovia under
Regulation D with respect to “Eurocurrency liabilities” within the meaning of
Regulation D, or under any similar or successor regulation with respect to
Eurocurrency liabilities or Eurocurrency funding.

       

      “Responsible Officer”
shall mean, with respect to the Borrower, the president, the chief executive
officer, the chief financial officer, any executive officer, or any other
Financial Officer of the Borrower, and any other officer or similar official
thereof responsible for the administration of the obligations of the Borrower in
respect of this Agreement.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      “Sanctioned Country”
means a country subject to a sanctions program identified on the list maintained
by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/-sanctions/index.html,
or as otherwise published from time to time.

       

      “Sanctioned Person”
means (i) a Person named on the list of Specially Designated Nationals or
Blocked Persons maintained by OFAC available at http://www.treas.gov/-offices/enforcement/ofac/sdn/index.html,
or as otherwise published from time to time, or (ii) (A) an agency of
the government of a Sanctioned Country, (B) an organization controlled by a
Sanctioned Country, or (C) a Person resident in a Sanctioned Country, to
the extent subject to a sanctions program administered by OFAC.

       

      “SEC” means the United
States Securities and Exchange Commission.

       

      “Significant
Subsidiary” shall mean each of (i) the Insurance Subsidiaries and (ii)
any other Subsidiary within the meaning in Regulation S-X promulgated by the SEC
with a net worth of $30,000,000 or greater.

       

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

       

      “Statutory Accounting
Practices” or “SAP” shall mean, with
respect to any Insurance Subsidiary, the statutory accounting practices
prescribed or permitted by the relevant Insurance Regulatory Authority of its
state of domicile, consistently applied and maintained and in conformity with
those used in the preparation of the most recent statutory financial statements
described in Section
4.11(c) (except where changes are required by the relevant Insurance
Regulatory Authority) and the Annual Statement.

       

      “Statutory Surplus”
means, with respect to any Insurance Subsidiary at any time, the total amount
shown as “surplus as regards policyholders” on line 35, page 3, column 1 of the
Annual Statement of such Insurance Subsidiary or, for any date other than a date
as of which an Annual Statement of such Insurance Subsidiary is prepared, the
amount of “surplus as regards policyholders” determined in a manner consistent
with the preparation of its Annual Statement

       

      “Subsidiary” shall
mean, with respect to any Person, any corporation or other Person of which more
than fifty percent (50%) of the outstanding Capital Stock having ordinary voting
power to elect a majority of the board of directors, board of managers or other
governing body of such Person, is at the time, directly or indirectly, owned by
such Person and one or more of its other Subsidiaries or a combination thereof
(irrespective of whether, at the time, securities of any other class or classes
of any such corporation or other Person shall or might have voting power by
reason of the happening of any contingency).  When used without
reference to a parent entity, the term “Subsidiary” shall be deemed to refer to
a Subsidiary of the Borrower.

       

      “Taxes” means all
present or future taxes, levies, imposts, duties, deductions, withholdings,
assessments, fees or other charges imposed by any Governmental Authority,
including any interest, additions to tax or penalties applicable
thereto.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      “Termination Date”
shall mean the Maturity Date or such earlier date of termination of the
Commitment pursuant to Section 2.5 or Section 8.2.

       

      “Type” shall have the
meaning given to such term in Section 2.2(a)

       

      “Unfunded Pension
Liability” shall mean, with respect to any Plan or Multiemployer Plan,
the excess of its benefit liabilities under Section 4001(a)(16) of ERISA over
the current value of its assets, determined in accordance with the applicable
assumptions used for funding under Section 412 of the Code for the applicable
plan year.

       

      “Unutilized
Commitment” shall mean, at any time for each Lender, such Lender’s
Commitment less the sum of the outstanding principal amount of Loans made by
such Lender.

       

      “Wachovia” shall mean,
Wachovia Bank, National Association, and its successors and
assigns.

       

      “Wholly Owned” shall
mean, with respect to any Subsidiary of any Person, that 100% of the outstanding
Capital Stock of such Subsidiary is owned, directly or indirectly, by such
Person.

       

      1.2           Accounting
Terms.  Except
as specifically provided otherwise in this Agreement, all accounting terms used
herein that are not specifically defined shall have the meanings customarily
given them pursuant to, and all financial computations shall be made in
accordance with, GAAP (or, to the extent that such terms apply solely to any
Insurance Subsidiary or if otherwise expressly required, SAP) as in effect as of
the date of this Agreement applied on a basis consistent with the application
used in preparing the most recent financial statements of the Borrower and any
such Insurance Subsidiary.  Notwithstanding the foregoing, in the
event that any changes in GAAP or SAP after the date hereof are required to be
applied to the transactions described herein and would affect the computation of
the financial covenants contained in Article VI, such changes
shall be followed in the computation of such financial covenants only from and
after the date this Agreement shall have been amended to take into account any
such changes, provided the parties
agree to negotiate in good faith to so amend this Agreement as soon as
practicable after such a change.

       

      1.3           Other Terms;
Construction.  Unless
otherwise specified or unless the context otherwise requires, all references
herein to sections, annexes, schedules and exhibits are references to sections,
annexes, schedules and exhibits in and to this Agreement, and all terms defined
in this Agreement shall have the defined meanings when used in any other Credit
Document or any certificate or other document made or delivered pursuant
hereto.

       

      ARTICLE
II

       

      AMOUNT
AND TERMS OF THE LOANS

       

      2.1           Commitment.  Each
Lender severally agrees, subject to and on the terms and conditions of this
Agreement, to make loans (each, a “Loan,” and
collectively, the “Loans”) to the
Borrower, from time to time on any Business Day during the period from and
including the Closing Date to but not including the Termination Date, in an
aggregate principal amount at any time outstanding not greater than its
Commitment at such time, provided that no
Borrowing of Loans shall be made if, immediately after giving effect thereto,
(i) the aggregate principal amount of all Loans made by any individual Lender
that are outstanding at such time would exceed such Lender’s Commitment at such
time, or (ii) the aggregate principal amount of all Loans made by all of the
Lenders that are outstanding at such time would exceed the Lenders’ aggregate
Commitment at such time.  Subject to and on the terms and conditions
of this Agreement, the Borrower may borrow, repay and reborrow
Loans.

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

    

    
      2.2           Borrowings.

       

      (a)           The
Loans shall, at the option of the Borrower and subject to the terms and
conditions of this Agreement, be either (i) Base Rate Loans or (ii) LIBOR Loans
(each, a “Type”
of Loan), provided that (i) all Loans comprising the same Borrowing shall,
unless otherwise specifically provided herein, be of the same Type, and
(ii) no Borrowing of LIBOR Loans may be made at any time prior to the third
(3rd)
Business Day after the Closing Date.

       

      (b)           In
order to make a Borrowing (other than Borrowings involving continuations or
conversions of outstanding Loans, which shall be made pursuant to Section 2.11), unless
such notice requirement is shortened by the Administrative Agent, the Borrower
will give the Administrative Agent written notice not later
than 12:00 p.m., Charlotte time, three (3) Business Days prior to each Borrowing
to be comprised of LIBOR Loans and not later than 12:00 p.m., Charlotte time, on
the same Business Day as each Borrowing to be comprised of Base Rate Loans;
provided, however, that the
request for the Borrowing of the Loan to be made on the Closing Date may, at the
discretion of the Administrative Agent, be given later than the times specified
hereinabove.  Each such notice (each, a “Notice of Borrowing”)
shall be irrevocable, shall be given in the form of Exhibit B-1 and shall
specify (1) the aggregate principal amount and initial Type of the Loans to
be made pursuant to such Borrowing, (2) in the case of a Borrowing of LIBOR
Loans, the initial Interest Period to be applicable thereto, and (3) the
requested date of such Borrowing (the “Borrowing Date”),
which shall be a Business Day.  Notwithstanding anything to the
contrary contained herein:

       

      (i)           the
aggregate principal amount of each Borrowing comprised of Base Rate Loans shall
not be less than $1,000,000 or, if greater, an integral multiple of $500,000 in
excess thereof, and the aggregate principal amount of each Borrowing comprised
of LIBOR Loans shall not be less than $1,000,000 or, if greater, an integral
multiple of $500,000 in excess thereof (or, in each case if less than the
minimum amount, in the amount of the aggregate Unutilized
Commitments);

       

      (ii)          if
the Borrower shall have failed to designate the Type of Loans comprising a
Borrowing, then the Borrower shall be deemed to have requested a Borrowing
comprised of Base Rate Loans; and

       

      (iii)         if
the Borrower shall have failed to select the duration of the Interest Period to
be applicable to any Borrowing of LIBOR Loans, then the Borrower shall be deemed
to have selected an Interest Period with a duration of one
month;

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

       

      (c)           Not
later than 2:00 p.m., Charlotte time, on the requested Borrowing Date, each
applicable Lender will make available to the Administrative Agent at the Payment
Office an amount, in Dollars and in immediately available funds, equal to the
amount of the Loan or Loans to be made by such Lender.  To the extent
such Lenders have made such amounts available to the Administrative Agent as
provided hereinabove, the Administrative Agent will make the aggregate of such
amounts available to the Borrower in accordance with Section 2.3(a) and in
like funds as received by the Administrative Agent.

       

      2.3           Disbursements; Funding
Reliance; Domicile of Loans.

       

      (a)           The
Borrower hereby authorizes the Administrative Agent to disburse the proceeds of
each Borrowing in accordance with the terms of any written instructions from any
Authorized Officer of the Borrower, provided that the
Administrative Agent shall not be obligated under any circumstances to forward
amounts to any account not listed in an Account Designation
Letter.  The Borrower may at any time deliver to the Administrative
Agent an Account Designation Letter listing any additional accounts or deleting
any accounts listed in a previous Account Designation Letter.

       

      (b)           Unless
the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with Section
2.2(c) and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount.  In such event, if a Lender has not
in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of a payment to be made by
such Lender, the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation and (ii) in the case of a payment to be made by the Borrower,
the Adjusted Base Rate.  If the Borrower and such Lender shall pay
such interest to the Administrative Agent for the same or an overlapping period,
the Administrative Agent shall promptly remit to the Borrower the amount of such
interest paid by the Borrower for such period.  If such Lender pays
its share of the applicable Borrowing to the Administrative Agent, then the
amount so paid shall constitute such Lender’s Loan included in such
Borrowing.  Any payment by the Borrower shall be without prejudice to
any claim the Borrower may have against a Lender that shall have failed to make
such payment to the Administrative Agent.

       

      (c)           The
obligations of the Lenders hereunder to make Loans and to make payments pursuant
to Section 10.1(c)
are several and not joint.  The failure of any Lender to make any Loan
or to make any such payment on any date shall not relieve any other Lender of
its corresponding obligation, if any, hereunder to do so on such date, but no
Lender shall be responsible for the failure of any other Lender to so make its
Loan, purchase its participation or to make any such payment required
hereunder.

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

       

      (d)           Each
Lender may, at its option, make and maintain any Loan at, to or for the account
of any of its Lending Offices, provided that any
exercise of such option shall not affect the obligation of the Borrower to repay
such Loan to or for the account of such Lender in accordance with the terms of
this Agreement.

       

      2.4           Evidence of Debt;
Notes.

       

      (a)           Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to the applicable Lending
Office of such Lender resulting from each Loan made by such Lending Office of
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lending Office of such Lender from time to time under
this Agreement.

       

      (b)           The
Administrative Agent shall maintain the Register pursuant to Section 10.6(c), and a
subaccount for each Lender, in which Register and subaccounts (taken together)
shall be recorded (i) the amount of each such Loan, the Type of each such
Loan and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder in respect of each such Loan and
(iii) the amount of any sum received by the Administrative Agent hereunder
from the Borrower in respect of each such Loan and each Lender’s share
thereof.

       

      (c)           The
entries made in the accounts, Register and subaccounts maintained pursuant to
Section 2.4(b) (and, if
consistent with the entries of the Administrative Agent, Section 2.4(a)) shall, to the
extent permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain such account, such
Register or such subaccount, as applicable, or any error therein, shall not in
any manner affect the obligation of the Borrower to repay (with applicable
interest) the Loans made to the Borrower by such Lender in accordance with the
terms of this Agreement.

       

      (d)           The
Loans made by each Lender shall, if requested by the applicable Lender (which
request shall be made to the Administrative Agent), be evidenced by a Note
appropriately completed in the form of Exhibit A, executed by the
Borrower and payable to the order of such Lender.  Each Note shall be
entitled to all of the benefits of this Agreement and the other Credit Documents
and shall be subject to the provisions hereof and thereof.

       

      2.5           Termination of
Commitment.

       

      (a)           The
Commitment shall be automatically and permanently terminated on the Termination
Date, unless terminated earlier pursuant to any other provision of this Section 2.5 or Section 8.2.

       

      (b)           At
any time and from time to time after the date hereof, upon not less than five
(5) Business Days’ prior written notice to the Administrative Agent, the
Borrower may terminate in whole or reduce in part the aggregate Unutilized
Commitments and the Commitment Fee will be reduced accordingly, provided that any
such partial reduction shall be in an aggregate amount of not less than
$1,000,000 or, if greater, an integral multiple of $1,000,000 in excess
thereof.  The amount of any termination or reduction made under this
Section 2.5(b) may not
thereafter be reinstated.

      
        
           

        

        
          22

          
            

          

        

        
           

        

      

       

      (c)           Each
reduction of the Commitments pursuant to this Section 2.5 shall be applied
ratably among the Lenders according to their respective
Commitments.

       

      (d)           All
fees accrued in respect of the Unutilized Commitments until the effective date
of any termination thereof shall be paid on the effective date of such
termination.

       

      2.6           Mandatory Payments and
Prepayments.

       

      (a)           Except
to the extent due or paid sooner pursuant to the provisions of this Agreement,
the aggregate outstanding principal of the Loans shall be due and payable in
full on the Maturity Date.

       

      (b)           In
the event that, at any time, the aggregate principal amount of Loans outstanding
at such time shall exceed the aggregate Commitments at such time (after giving
effect to any concurrent termination or reduction thereof), the Borrower will
immediately prepay, after having knowledge thereof, the outstanding principal
amount of the Loans in the amount of such excess.

       

      (c)           Each
payment or prepayment of a LIBOR Loan made pursuant to the provisions of this
Section on a day other than the last day of the Interest Period applicable
thereto shall be made together with all amounts required under Section 2.18 to be paid
as a consequence thereof.

       

      2.7           Voluntary
Prepayments.

       

      (a)           At
any time and from time to time, the Borrower shall have the right to prepay the
Loans, in whole or in part, without premium or penalty (except as provided in
clause (iii) below), upon written notice given to the Administrative Agent not later than 12:00
p.m., Charlotte time, three (3) Business Days prior to each intended prepayment
of LIBOR Loans and one (1) Business Day prior to each intended prepayment of
Base Rate Loans, unless such notice requirement is shortened by the
Administrative Agent, provided that
(i) each partial prepayment shall be in an aggregate principal amount of
not less than $500,000 or, if greater, an integral multiple of $100,000 in
excess thereof in the case of LIBOR Loans and an aggregate principal amount of
not less than $500,000 or, if greater, an integral multiple of $100,000 in
excess thereof in the case of Base Rate Loans, (ii) no partial prepayment
of a LIBOR Loan made pursuant to any single Borrowing shall reduce the
outstanding principal amount of the remaining LIBOR Loan under such Borrowing to
less than $500,000 or to any greater amount not an integral multiple of $100,000
in excess thereof, and (iii) unless made together with all amounts required
under Section 2.18
to be paid as a consequence of such prepayment, a prepayment of a LIBOR Loan may
be made only on the last day of the Interest Period applicable
thereto.  Each such notice shall specify the proposed date of such
prepayment and the aggregate principal amount and Type of the Loans to be
prepaid (and, in the case of LIBOR Loans, the Interest Period of the Borrowing
pursuant to which made), and shall be irrevocable and shall bind the Borrower to
make such prepayment on the terms specified therein.  Loans prepaid
pursuant to this Section
2.7(a) may be reborrowed, subject to the terms and conditions of this
Agreement.  In the event the Administrative Agent receives a notice of
prepayment under this Section, the Administrative Agent will give prompt notice
thereof to the Lenders; provided that if such
notice has also been furnished to the Lenders, the Administrative Agent shall
have no obligation to notify the Lenders with respect thereto.

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

       

      (b)           Each
prepayment of the Loans made pursuant to Section 2.7(a) shall be
applied ratably among the Lenders holding the Loans being prepaid, in proportion
to the principal amount held by each.

       

      2.8           Interest.

       

      (a)           The
Borrower will pay interest in respect of the unpaid principal amount of each
Loan, from the date of Borrowing thereof until such principal amount shall be
paid in full, (i) at the Adjusted Base Rate, as in effect from time to time
during such periods as such Loan is a Base Rate Loan, and (ii) at the Adjusted
LIBOR Rate, as in effect from time to time during such periods as such Loan is a
LIBOR Loan.

       

      (b)           Upon
the occurrence and during the continuance of an Event of Default as the result
of failure by the Borrower to pay any principal of or interest on any Loan, any
fees or other amount hereunder when due (whether at maturity, pursuant to
acceleration or otherwise), and upon the occurrence and during the continuance
of any other Event of Default, all outstanding principal amounts of the Loans
and, to the greatest extent permitted by law, all interest accrued on the Loans
and all other accrued and outstanding fees and other amounts hereunder, shall,
at the option of the Required Lenders, bear interest at a rate per annum equal
to the interest rate applicable from time to time thereafter to such Loans
(whether the Adjusted Base Rate or the Adjusted LIBOR Rate) plus 2% (or, in the
case of interest, fees and other amounts for which no rate is provided
hereunder, at the Adjusted Base Rate applicable to Loans plus 2%), and, in
each case, such default interest shall be payable on demand.  To the
greatest extent permitted by law, interest shall continue to accrue after the
filing by or against the Borrower of any petition seeking any relief in
bankruptcy or under any law pertaining to insolvency or debtor
relief.

       

      (c)           Accrued
(and theretofore unpaid) interest shall be payable as follows:

       

      (i)           in
respect of each Base Rate Loan (including any Base Rate Loan or portion thereof
paid or prepaid pursuant to the provisions of Section 2.6, except as
provided herein), in arrears on the last Business Day of each calendar quarter,
beginning with the first such day to occur after the Closing Date; provided, that in the
event the Loans are repaid or prepaid in full and the aggregate Commitments have
been terminated, then accrued interest in respect of all Base Rate Loans shall
be payable together with such repayment or prepayment on the date
thereof;

       

      (ii)          in
respect of each LIBOR Loan (including any LIBOR Loan or portion thereof paid or
prepaid pursuant to the provisions of Section 2.6, except as
provided herein), in arrears (y) on the last Business Day of the Interest Period
applicable thereto (subject to the provisions of clause (iv) in Section 2.10) and
(z) in addition, in the case of a LIBOR Loan with an Interest Period having
a duration of six months, on each date on which interest would have been payable
under clause (y) above had successive Interest Periods of three months’
duration been applicable to such LIBOR Loan; provided, that in the
event all of the LIBOR Loan made pursuant to a single Borrowing is repaid or
prepaid in full, then accrued interest in respect of such LIBOR Loan shall be
payable together with such repayment or prepayment on the date thereof;
and

      
        
           

        

        
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      (iii)         in
respect of any Loan, at the Maturity Date (whether pursuant to acceleration or
otherwise) and, after the Maturity Date, on demand.

       

      (d)           Nothing
contained in this Agreement or in any other Credit Document shall be deemed to
establish or require the payment of interest to any Lender at a rate in excess
of the maximum rate permitted by applicable law.  If the rate of
interest payable for the account of any Lender on any interest payment date
would exceed the maximum rate permitted by applicable law to be charged by such
Lender, the rate of interest payable for its account on such interest payment
date shall be automatically reduced to such maximum permissible
rate.  In the event of any such reduction affecting any Lender, if
from time to time thereafter the rate of interest payable for the account of
such Lender on any interest payment date would be less than the maximum rate
permitted by applicable law to be charged by such Lender, then the rate of
interest payable for its account on such subsequent interest payment date shall
be automatically increased to a rate (not to exceed the maximum permissible
rate) such that the amount of the rate increase is equivalent to the amount of
the prior rate decrease, provided that (i) at
no time shall the aggregate amount by which interest paid for the account of any
Lender has been increased pursuant to this sentence exceed the aggregate amount
by which interest paid for its account has theretofore been reduced pursuant to
the previous sentence, and (ii) nothing herein shall be deemed to deprive the
Borrower of the benefit of a reduction in the Applicable
Percentage.

       

      (e)           The
Administrative Agent shall promptly notify the Borrower and the Lenders upon
determining the interest rate for each Borrowing of LIBOR Loans after its
receipt of the relevant Notice of Borrowing or Notice of
Conversion/Continuation, and upon each change in the Adjusted Base Rate; provided, however, that the
failure of the Administrative Agent to provide the Borrower or the Lenders with
any such notice shall neither affect any obligations of the Borrower or the
Lenders hereunder nor result in any liability on the part of the Administrative
Agent to the Borrower or any Lender.  Each such determination
(including each determination of the Reserve Requirement) shall, absent manifest
error, be conclusive and binding on all parties hereto.

       

      2.9           Fees.  The
Borrower agrees to pay:

       

      (a)           To
the Arranger and Wachovia, for their own respective accounts, on the Closing
Date, the fees required under the Fee Letter to be paid to them on the Closing
Date, in the amounts due and payable on the Closing Date as required by the
terms thereof;

       

      (b)           To
the Administrative Agent, for the account of each Lender, a commitment fee (a
“Commitment
Fee”), which shall accrue at a per annum rate equal to the Applicable
Percentage in effect for such fee from time to time during each calendar quarter
(or portion thereof) on such Lender’s Ratable Share of the average daily
aggregate Unutilized Commitments during the period from and including the date
hereof to, but excluding, the Termination Date.  Accrued Commitment
Fees shall be payable in arrears (i) on the last Business Day of each calendar
quarter, beginning with the first such day to occur after the Closing Date and
(ii) on the Termination Date.  All Commitment Fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day);
and

      
        
           

        

        
          25

          
            

          

        

        
           

        

      

       

      (c)           To
the Administrative Agent, for its own account, the annual administrative fee
described in the Fee Letter, on the terms, in the amount and at the times set
forth therein.

       

      2.10         Interest
Periods.  Concurrently
with the giving of a Notice of Borrowing or Notice of Conversion/Continuation in
respect of any Borrowing comprised of Base Rate Loans to be converted into, or
LIBOR Loans to be continued as, LIBOR Loans, the Borrower shall have the right
to elect, pursuant to such notice, the interest period (each, an “Interest Period”) to
be applicable to such LIBOR Loans, which Interest Period shall, at the option of
the Borrower be, in the case of a LIBOR Loan, a one, two or three or six-month
period; provided, however,
that:

       

      (i)           all
LIBOR Loans comprising a single Borrowing shall at all times have the same
Interest Period;

       

      (ii)          the
initial Interest Period for any LIBOR Loan shall commence on the date of the
Borrowing of such LIBOR Loan (including the date of any continuation of, or
conversion into, such LIBOR Loan), and each successive Interest Period
applicable to such LIBOR Loan shall commence on the day on which the next
preceding Interest Period applicable thereto expires;

       

      (iii)         LIBOR
Loans may not be outstanding under more than six (6) separate Interest Periods
at any one time (for which purpose Interest Periods shall be deemed to be
separate even if they are coterminous);

       

      (iv)         if
any Interest Period otherwise would expire on a day that is not a Business Day,
such Interest Period shall expire on the next succeeding Business Day unless
such next succeeding Business Day falls in another calendar month, in which case
such Interest Period shall expire on the next preceding Business
Day;

       

      (v)          the
Borrower may not select any Interest Period that begins prior to the Closing
Date or that expires after the Maturity Date;

       

      (vi)         if
any Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month during which such Interest Period would
otherwise expire, such Interest Period shall expire on the last Business Day of
such calendar month; and

       

      (vii)        if,
upon the expiration of any Interest Period applicable to a Borrowing of LIBOR
Loans, the Borrower shall have failed to elect a new Interest Period to be
applicable to such LIBOR Loans, then the Borrower shall be deemed to have
elected to convert such LIBOR Loans into Base Rate Loans as of the expiration of
the then current Interest Period applicable thereto.

      
        
           

        

        
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      2.11         Conversions and
Continuations.

       

      (a)           The
Borrower shall have the right, on any Business Day occurring on or after the
Closing Date, to elect (i) to convert all or a portion of the outstanding
principal amount of any Base Rate Loans  into LIBOR Loans, or to
convert any LIBOR Loans the Interest Periods for which end on the same day into
Base Rate Loans, or (ii) to continue all or a portion of the outstanding
principal amount of any LIBOR Loans the Interest Periods for which end on the
same day for an additional Interest Period, provided that
(x) any such conversion of LIBOR Loans into Base Rate Loans shall involve
an aggregate principal amount of not less than $500,000 or, if greater, an
integral multiple of $100,000 in excess thereof; any such conversion of Base
Rate Loans  into,
or continuation of, LIBOR Loans shall involve an aggregate principal amount of
not less than $500,000 or, if greater, an integral multiple of $100,000 in
excess thereof; and no partial conversion of LIBOR Loans made pursuant to a
single Borrowing shall reduce the outstanding principal amount of such LIBOR
Loans to less than $500,000 or to any greater amount not an integral multiple of
$100,000 in excess thereof, (y) except as otherwise provided in Section 2.16(e), LIBOR Loans
may be converted into Base Rate Loans only on the last day of the Interest
Period applicable thereto (and, in any event, if a LIBOR Loan is converted into
a Base Rate Loan on any day other than the last day of the Interest Period
applicable thereto, the Borrower will pay, upon such conversion, all amounts
required under Section 2.18 to be paid
as a consequence thereof), and (z) no conversion of Base Rate Loans  into LIBOR Loans or
continuation of LIBOR Loans shall be permitted during the continuance of a
Default or Event of Default.

       

      (b)           The
Borrower shall make each such election by giving the Administrative Agent written notice not later
than 12:00 p.m., Charlotte time, three (3) Business Days prior to the intended
effective date of any conversion of Base Rate Loans into, or continuation of,
LIBOR Loans and one (1) Business Day prior to the intended effective date of any
conversion of LIBOR Loans into Base Rate Loans, unless such notice requirement
is shortened by the Administrative Agent.  Each such notice (each, a
“Notice of
Conversion/Continuation”) shall be irrevocable, shall be given in the
form of Exhibit B-2
and shall specify (x) the date of such conversion or continuation (which
shall be a Business Day), (y) in the case of a conversion into, or a
continuation of, LIBOR Loans, the Interest Period to be applicable thereto, and
(z) the aggregate amount and Type of the Loans being converted or
continued.  In the event that the Borrower shall fail to deliver a
Notice of Conversion/Continuation as provided herein with respect to any
outstanding LIBOR Loans, such LIBOR Loans shall automatically be converted to
Base Rate Loans upon the expiration of the then current Interest Period
applicable thereto (unless repaid pursuant to the terms hereof).  In
the event the Borrower shall have failed to select in a Notice of
Conversion/Continuation the duration of the Interest Period to be applicable to
any conversion into, or continuation of, LIBOR Loans, then the Borrower shall be
deemed to have selected an Interest Period with a duration of one
month.

       

      2.12         Method of Payments;
Computations.

       

      (a)           All
payments by the Borrower hereunder shall be made without setoff, counterclaim or
other defense, in Dollars and in immediately available funds to the
Administrative Agent, for the account of the Lenders entitled to such payment
(except as otherwise expressly provided herein as to payments required to be
made directly to the Lenders) at the Payment Office prior to 12:00 noon,
Charlotte time, on the date payment is due.  Any payment made as
required hereinabove, but after 12:00 noon, Charlotte time, shall be deemed to
have been made on the next succeeding Business Day.  If any payment
falls due on a day that is not a Business Day, then such due date shall be
extended to the next succeeding Business Day (except that in the case of LIBOR
Loans to which the provisions of Section 2.10(iv) are
applicable, such due date shall be the next preceding Business Day), and such
extension of time shall then be included in the computation of payment of
interest, fees or other applicable amounts.

      
        
           

        

        
          27

          
            

          

        

        
           

        

      

      (b)           The
Administrative Agent will distribute to the Lenders like amounts relating to
payments made to the Administrative Agent for the account of the Lenders as
follows: (i) if the payment is received by 12:00 noon, Charlotte time, in
immediately available funds, the Administrative Agent will make available to
each relevant Lender on the same date, by wire transfer of immediately available
funds, such Lender’s Ratable Share of such payment, and (ii) if such
payment is received after 12:00 noon, Charlotte time, or in other than
immediately available funds, the Administrative Agent will make available to
each such Lender its Ratable Share of such payment by wire transfer of
immediately available funds on the next succeeding Business Day (or in the case
of uncollected funds, as soon as practicable after collected).  If the
Administrative Agent shall not have made a required distribution to the
appropriate Lenders as required hereinabove after receiving a payment for the
account of such Lenders, the Administrative Agent will pay to each such Lender,
on demand, its Ratable Share of such payment with interest thereon at the
Federal Funds Rate for each day from the date such amount was required to be
disbursed by the Administrative Agent until the date repaid to such
Lender.

       

      (c)           Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Administrative Agent for the account
of the Lenders hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders the amount due.  In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender, with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.

       

      (d)           All
computations of interest and fees hereunder (including computations of the
Reserve Requirement) shall be made on the basis of a year consisting of
(i) in the case of interest on Base Rate Loans, 365/366 days, as the case
may be, or (ii) in all other instances, 360 days; and in each case under
(i) and (ii) above, with regard to the actual number of days (including the
first day, but excluding the last day) elapsed.

       

      (e)           Notwithstanding
any other provision of this Agreement or any other Credit Document to the
contrary, all amounts collected or received by the Administrative Agent or any
Lender after acceleration of the Loans pursuant to Section 8.2 shall be applied
by the Administrative Agent as follows:

       

      
        
           

        

        
          28

          
            

          

        

        
           

        

      

       

      (i)           first, to the payment
of all reasonable out-of-pocket costs and expenses (including, without
limitation, reasonable attorneys’ and consultants’ fees irrespective of whether
such fees are allowed as a claim after the occurrence of a Bankruptcy Event) of
the Administrative Agent in connection with enforcing the rights of the Lenders
under the Credit Documents;

       

      (ii)          second, to the
payment of any fees owed to the Administrative Agent hereunder or under any
other Credit Document;

       

      (iii)         third, to the payment
of all reasonable and documented out-of-pocket costs and expenses (including,
without limitation, reasonable attorneys’ and consultants’ fees irrespective of
whether such fees are allowed as a claim after the occurrence of a Bankruptcy
Event) of each of the Lenders in connection with enforcing its rights under the
Credit Documents or otherwise with respect to the Obligations owing to such
Lender;

       

      (iv)         fourth, to the
payment of all of the Obligations consisting of accrued fees and interest
(including, without limitation, fees incurred and interest accruing at the then
applicable rate after the occurrence of a Bankruptcy Event irrespective of
whether a claim for such fees incurred and interest accruing is allowed in such
proceeding);

       

      (v)          fifth, to the payment
of the outstanding principal amount of the Obligations;

       

      (vi)         sixth, to the payment
of all other Obligations and other obligations that shall have become due and
payable under the Credit Documents or otherwise and not repaid; and

       

      (vii)        seventh, to the
payment of the surplus (if any) to whomever may be lawfully entitled to receive
such surplus.

       

      In
carrying out the foregoing, (y) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category, and (z) all amounts shall be apportioned ratably among
the Lenders in proportion to the amounts of such principal, interest, fees or
other Obligations owed to them respectively pursuant to clauses (iii)
through (vii) above.

       

      2.13         Recovery of
Payments.

       

      (a)           The
Borrower agrees that to the extent the Borrower makes a payment or payments to
or for the account of the Administrative Agent or any Lender, which payment or
payments or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party under any bankruptcy, insolvency or similar state or
federal law, common law or equitable cause, then, to the extent of such payment
or repayment, the Obligation intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been
received.

       

      
        
           

        

        
          29

          
            

          

        

        
           

        

      

      (b)           If
any amounts distributed by the Administrative Agent to any Lender are
subsequently returned or repaid by the Administrative Agent to the Borrower, its
representative or successor in interest, or any other Person, whether by court
order, by settlement approved by such Lender, or pursuant to applicable
Requirements of Law, such Lender will, promptly upon receipt of notice thereof
from the Administrative Agent, pay the Administrative Agent such
amount.  If any such amounts are recovered by the Administrative Agent
from the Borrower, its representative or successor in interest or such other
Person, the Administrative Agent will redistribute such amounts to the Lenders
on the same basis as such amounts were originally distributed.

       

      2.14         Use of
Proceeds.  The
proceeds of the Loans shall be used (i) to repay all obligations under the
Existing Senior Credit Facility in full, if any, (ii) to pay or reimburse
permitted fees and expenses in connection with the preparation, negotiation,
execution and delivery of this Agreement and the other Credit Documents, and
(iii) to provide for working capital and general corporate purposes and in
accordance with the terms and provisions of this Agreement.

       

      2.15         Pro Rata
Treatment.

       

      (a)           All
fundings, continuations and conversions of Loans shall be made by the Lenders
pro rata on the basis of their Ratable Share (in the case of the initial making
of the Loans) or on the basis of their respective outstanding Loans (in the case
of continuations and conversions of the Loans), as the case may be from time to
time.  All payments on account of principal of or interest on any
Loans, fees or any other Obligations owing to or for the account of any one or
more Lenders shall be apportioned ratably among such Lenders in proportion to
the amounts of such principal, interest, fees or other Obligations owed to them
respectively.

       

      (b)           If
any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or other Obligations hereunder resulting in such Lender’s receiving
payment of a proportion of the aggregate amount of its Loans and accrued
interest thereon or other such Obligations greater than its pro rata share
thereof as provided herein, then the Lender receiving such greater proportion
shall (a) notify the Administrative Agent of such fact, and
(b) purchase (for cash at face value) participations in the Loans and such
other Obligations of the other Lenders, or make such other adjustments as shall
be equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and other amounts owing them, provided that
(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest, and (ii) the provisions of this Section 2.15(b) shall not
be construed to apply to (x) any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or (y) any
payment obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans to any assignee or participant, other than to
the Borrower or any Subsidiary thereof (as to which the provisions of this Section 2.15(b) shall
apply).  The Borrower consents to the foregoing and agrees, to the
extent it may effectively do so under applicable law, that any Lender acquiring
a participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.  If under any applicable bankruptcy, insolvency or
similar law, any Lender receives a secured claim in lieu of a setoff to which
this Section 2.15(b) applies,
such Lender shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the Lenders
entitled under this Section 2.15(b) to share
in the benefits of any recovery on such secured claim.

      
        
           

        

        
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      2.16         Increased Costs; Change in
Circumstances; Illegality; etc.

       

      (a)           If
any Change in Law shall:

       

      (i)           impose,
modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for
the account of, or credit extended or participated in by, any Lender (except the
Reserve Requirement reflected in the LIBOR Rate);

       

      (ii)          subject
any Lender to any tax of any kind whatsoever with respect to this Agreement or
any LIBOR Loan made by it, or change the basis of taxation of payments to such
Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered
by Section 2.17 and
the imposition of, or any change in the rate of, any Excluded Tax payable by
such Lender); or

       

      (iii)         impose
on any Lender or the London interbank market any other condition, cost or
expense affecting this Agreement or LIBOR Loans made by such Lender or
participation therein;

       

      and the
result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any LIBOR Loan (or of maintaining its obligation to make
any such Loan), or to reduce the amount of any sum received or receivable by
such Lender hereunder (whether of principal, interest or any other amount) in an
amount deemed by such Lender as material, then, upon request of such Lender, the
Borrower will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction
suffered.

       

      (b)           If
any Lender determines that any Change in Law affecting such Lender or any
Lending Office of such Lender or such Lender’s holding company, if any,
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender’s capital or on the capital of such Lender’s holding
company, if any, as a consequence of this Agreement, the Commitments of such
Lender or the Loans made by such Lender, to a level below that which such Lender
or such Lender’s holding company could have achieved but for such Change in Law
(taking into consideration such Lender’s policies and the policies of such
Lender’s holding company with respect to capital adequacy) by an amount deemed
by such Lender to be material, then from time to time the Borrower will pay to
such Lender such additional amount or amounts as will compensate such Lender or
such Lender’s holding company for any such reduction suffered.

       

      (c)           A
certificate of a Lender setting forth such Lender’s good faith determination in
reasonable detail of the amount or amounts necessary to compensate such Lender
or its holding company, as the case may be, as specified in Section 2.16(a) or Section 2.16(b) and
delivered to the Borrower shall be conclusive absent manifest
error.  The Borrower shall pay such Lender the amount shown as due on
any such certificate within fifteen (15) days after receipt
thereof.

       

      
        
           

        

        
          31

          
            

          

        

        
           

        

      

       

      (d)           Failure
or delay on the part of any Lender to demand compensation pursuant to the
foregoing provisions of this Section 2.16 shall not
constitute a waiver of such Lender’s right to demand such compensation, provided that the
Borrower shall not be required to compensate a Lender pursuant to the foregoing
provisions of this Section 2.16
for any increased costs incurred or reductions suffered more than six
months prior to the date that such Lender notifies the Borrower of the Change in
Law giving rise to such increased costs or reductions and of such Lender’s
intention to claim compensation therefor (except that, if the Change in Law
giving rise to such increased costs or reductions is retroactive, then the
six-month period referred to above shall be extended to include the period of
retroactive effect thereof).

       

      (e)           Notwithstanding
any other provision in this Agreement, if, at any time after the date hereof and
from time to time, any Lender shall have determined in good faith that the
introduction of or any change in any applicable law, rule or regulation or in
the interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof, or compliance with
any guideline or request from any such Governmental Authority (whether or not
having the force of law), has or would have the effect of making it unlawful for
such Lender to make or to continue to make or maintain LIBOR Loans, such Lender
will forthwith so notify the Administrative Agent and the Borrower in
writing.  Upon such notice, (i) each of such Lender’s then
outstanding LIBOR Loans shall automatically, on the expiration date of the
respective Interest Period applicable thereto (or, to the extent any such LIBOR
Loan may not lawfully be maintained as a LIBOR Loan until such expiration date,
upon such notice) and to the extent not sooner prepaid, be converted into a Base
Rate Loan, (ii) the obligation of such Lender to make, to convert Base Rate
Loans into, or to continue, LIBOR Loans shall be suspended (including pursuant
to any Borrowing for which the Administrative Agent has received a Notice of
Borrowing but for which the Borrowing Date has not arrived), and (iii) any
Notice of Borrowing or Notice of Conversion/Continuation given at any time
thereafter with respect to LIBOR Loans shall, as to such Lender, be deemed to be
a request for a Base Rate Loan, in each case until such Lender shall have
determined that the circumstances giving rise to such suspension no longer exist
and shall have so notified the Administrative Agent, and the Administrative
Agent shall have so notified the Borrower.

       

      2.17         Taxes.

       

      (a)           Any
and all payments by or on account of any obligation of the Borrower hereunder or
under any other Credit Document shall be made free and clear of and without
reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if the
Borrower shall be required by applicable law to deduct any Indemnified Taxes
(including any Other Taxes) from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent or any Lender, as the case may be, receives an amount
equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower
shall timely pay the full amount deducted to the relevant Governmental Authority
in accordance with applicable law.

       

      (b)           Without
limiting the provisions of Section 2.17(a), the
Borrower shall timely pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.

      
        
           

        

        
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      (c)           The
Borrower shall indemnify the Administrative Agent and each Lender, within ten
(10) days after demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) paid by the
Administrative Agent or such Lender, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  A
certificate setting forth such Lender’s good faith determination as to the
amount of such payment or liability and reasonable detail regarding such amount
delivered to the Borrower by a Lender (with a copy to the Administrative Agent),
or by the Administrative Agent on its own behalf or on behalf of a Lender, shall
be conclusive absent manifest error.

       

      (d)           The
Administrative Agent and each Lender shall take all reasonable actions
(consistent with its internal policy and legal and regulatory restrictions)
requested by Borrower to assist Borrower, at the sole expense of Borrower, to
recover from the relevant Governmental Authority any Indemnified Taxes or Other
Taxes in respect of which amounts were paid by Borrower pursuant to Sections 2.17(a), 2.17(b) or 2.17(c); provided, however, the
Administrative Agent or any such Lender will not be required to take any action
that would be materially disadvantageous to the Administrative Agent or such
Lender, respectively.  Notwithstanding the foregoing, this Section 2.17(d) shall not be
construed to require the Administrative Agent or any Lender to make available
its tax returns (or any other information relating to its taxes not expressly
required to be provided hereunder that it reasonably deems confidential) to the
Borrower or any other Person.

       

      (e)           As
soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

       

      (f)           Any
Foreign Lender that is entitled to an exemption from or reduction of withholding
tax under the law of the jurisdiction in which the Borrower is resident for tax
purposes, or any treaty to which such jurisdiction is a party, with respect to
payments hereunder or under any other Credit Document shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by the Borrower or the
Administrative Agent, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate of withholding.  In addition, any
Lender, if requested by the Borrower or the Administrative Agent, shall deliver
such other documentation prescribed by applicable law or reasonably requested by
the Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements.

       

      Without
limiting the generality of the foregoing, any Foreign Lender shall deliver to
the Borrower and the Administrative Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
request of the Borrower or the Administrative Agent, but only if such Foreign
Lender is legally entitled to do so), whichever of the following is
applicable:

      
        
           

        

        
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      (i)           duly
completed and executed copies of Internal Revenue Service Form W-8BEN (or any
successor or other applicable form prescribed by the Internal Revenue Service)
claiming eligibility for benefits of an income tax treaty to which the United
States is a party,

       

      (ii)          duly
completed and executed copies of Internal Revenue Service Form W-8ECI (or any
successor or other applicable form prescribed by the Internal Revenue
Service),

       

      (iii)         
in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate to
the effect that such Foreign Lender is not (A) a “bank” within the meaning
of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the
Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a
“controlled foreign corporation” described in Section 881(c)(3)(C) of the Code
and (y) duly completed and executed copies of Internal Revenue Service Form
W-8BEN (or any successor or other applicable form prescribed by the Internal
Revenue Service), or

       

      (iv)         any
other form prescribed by applicable law as a basis for claiming exemption from
or a reduction in United States Federal withholding tax duly completed together
with such supplementary documentation as may be prescribed by applicable law to
permit the Borrower to determine the withholding or deduction required to be
made.

       

      (g)           In
addition, each Foreign Lender agrees that from time to time after the Closing
Date (or in the case of a Foreign Lender that is an Eligible Assignee, after the
date of assignment to such Foreign Lender), when a lapse of time (or change in
circumstances) renders the prior forms hereunder obsolete or inaccurate in any
material respect, such Foreign Lender shall, to the extent permitted under
applicable law, deliver to Borrower and the Administrative Agent new, accurate
and complete, originally executed copies of an Internal Revenue Service Form
W-8BEN or W-8ECI (or any successor or other applicable forms prescribed by the
Internal Revenue Service) or any other form prescribed by applicable law, and if
applicable, a new withholding certificate, to confirm or establish the
entitlement of such Foreign Lender or the Administrative Agent to an exemption
from, or reduction in, United States withholding tax on payments to be made
hereunder on any Loan.

       

      (h)           For
any period of time during which a Foreign Lender has failed to provide the
Borrower with an appropriate form pursuant to Section 2.17(f) or 2.17(g) (unless such failure
is due to a change in treaty, law or regulation, or any change in the
interpretation or administration thereof by any Governmental Authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Foreign Lender shall not be entitled to indemnification under
Section 2.17(c) with
respect to Taxes imposed by the United States; provided, that,
should a Foreign Lender which is otherwise exempt from or subject to a reduced
rate of withholding tax become subject to Taxes because of its failure to
deliver a form required under Section 2.17(f) or 2.17(g), the Borrower shall
take such steps as such Foreign Lender shall reasonably request to assist such
Foreign Lender to recover such Taxes.

      
        
           

        

        
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      (i)           
Each Lender and Administrative Agent that is a United States Person (as defined
in Section 7701(a)(30) of the Internal Revenue Code) (other than Persons that
are corporations or otherwise exempt from United States backup withholding Tax)
shall deliver at the time(s) and in the manner prescribed by applicable law or
as reasonably requested by the Borrower or the Administrative Agent, to the
Borrower and Administrative Agent (as applicable), a properly completed and duly
executed United States Internal Revenue Service Form W-9 (or any successor or
other applicable form prescribed by the Internal Revenue Service) certifying
that such Person is exempt from United States backup withholding Tax on payments
made hereunder.

       

      (j)          
 If the Administrative Agent or any Lender receives a refund of any Taxes
or Other Taxes as to which it has been indemnified by or on behalf of the
Borrower or with respect to which the Borrower has paid, or caused to be paid,
additional amounts pursuant to this Section 2.17, it shall
promptly pay to the Borrower an amount equal to such refund (but only to the
extent of indemnity payments made, or additional amounts paid, by or on behalf
of the Borrower under this Section 2.17 with respect to the Taxes
or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
the Administrative Agent or such Lender, as the case may be, and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund), provided that the
Borrower, upon the request of the Administrative Agent or such Lender, agrees to
repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or
such Lender is required to repay such refund to such Governmental
Authority.  This Section 2.17(j) shall not
be construed to require the Administrative Agent or any Lender to make available
its tax returns (or any other information relating to its taxes not expressly
required to be provided hereunder that it reasonably deems confidential) to the
Borrower or any other Person.

       

      2.18         Compensation.  The
Borrower will compensate each Lender upon written demand for all losses,
reasonable expenses and liabilities (including, without limitation, any loss,
reasonable expense or liability incurred by reason of the liquidation or
reemployment of deposits or other funds required by such Lender to fund or
maintain LIBOR Loans) that such Lender may incur or sustain (i) if for any
reason the Borrower does not consummate (other than due to a default by such
Lender) a Borrowing or continuation of, or conversion into, a LIBOR Loan on a
date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation, (ii) if any repayment, prepayment or conversion of
any LIBOR Loan occurs on a date other than the last day of an Interest Period
applicable thereto (including as a consequence of any assignment made pursuant
to Section 2.19(a)(1)
or 2.19(a)(2) or
any acceleration of the maturity of the Loans pursuant to Section 8.2), (iii) if
any prepayment of any LIBOR Loan is not made on any date specified in a notice
of prepayment given by the Borrower or (iv) as a consequence of any other
failure by the Borrower to make any payments with respect to any LIBOR Loan when
due hereunder.  Calculation of all amounts payable to a Lender under
this Section 2.18
shall be made as though such Lender had actually funded its relevant LIBOR Loan
through the purchase of a Eurodollar deposit bearing interest at the LIBOR Rate
in an amount equal to the amount of such LIBOR Loan, having a maturity
comparable to the relevant Interest Period; provided, however, that each
Lender may fund its LIBOR Loans in any manner it sees fit and the foregoing
assumption shall be utilized only for the calculation of amounts payable under
this Section 2.18.  A
certificate made in good faith (which shall be in reasonable detail) showing the
bases for the determinations set forth in this Section 2.18 by any
Lender as to any additional amounts payable pursuant to this Section 2.18 shall be
submitted by such Lender to the Borrower either directly or through the
Administrative Agent.  Determinations set forth in any such
certificate made in good faith for purposes of this Section 2.18 of any such
losses, reasonable expenses or liabilities shall be conclusive absent manifest
error.

       

      
        
          
          

        

        
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      2.19         Replacement of Lenders;
Mitigation of Costs.

       

      (a)           The
Borrower may, at any time at its sole expense and effort, require any Lender
(1) that has requested compensation from the Borrower under Sections 2.16(a) or 2.16(b) or payments from the
Borrower under Section 2.17,
(2) the obligation of which to make or maintain LIBOR Loans has been
suspended under Section 2.16(e) or
(3) that is a Defaulting Lender, in any case upon notice to such Lender and
the Administrative Agent, to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents
required by, Section 10.6), all of its
interests, rights and obligations under this Agreement and the related Credit
Documents to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided
that:

       

      (i)           the
Borrower shall have paid to the Administrative Agent the assignment fee
specified in Section 10.6(b)(iii);

       

      (ii)         
such Lender shall have received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder and under the other Credit Documents (including
any amounts under Section
2.18) from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other
amounts);

       

      (iii)         in
the case of any such assignment resulting from a request for compensation under
Sections 2.16(a) or
2.16(b) or payments
required to be made pursuant to Section 2.17, such assignment
will result in a reduction in such compensation or payments thereafter;
and

       

      (iv)         such
assignment does not conflict with applicable Requirements of Law.

       

      A Lender
shall not be required to make any such assignment or delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to
apply.

       

      (b)           If
any Lender requests compensation under Sections 2.16(a) or 2.16(b), or the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, or if any
Lender gives a notice pursuant to Section 2.16(e), then
such Lender shall use reasonable efforts to designate a different Lending Office
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Sections 2.16(a), 2.16(b) or 2.17, as the case may be, in
the future, or eliminate the need for the notice pursuant to Section 2.16(e), as
applicable, and (ii) in each case, would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender.  The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.

      
        
           

        

        
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      2.20         Increase in
Commitments.

       

      (a)           No
more than two times after the Closing Date but prior to the Termination Date,
the Borrower shall have the right, at any time and from time to time, by written
notice to and in consultation with the Administrative Agent, to request an
increase in the aggregate Commitments (each such requested increase, a “Commitment
Increase”), by having one or more existing Lenders increase their
respective Commitments then in effect (each, an “Increasing Lender”),
by adding as a Lender with a new Commitment hereunder one or more Persons that
are not already Lenders (each, an “Additional Lender”),
or a combination thereof; provided that
(i) any such request for a Commitment Increase shall be in a minimum amount
of $10,000,000 or an integral multiple of $5,000,000 in excess thereof,
(ii) immediately after giving effect to any Commitment Increase,
(y) the aggregate Commitments shall not exceed $50,000,000 and (z) the
aggregate of all Commitment Increases effected after the Closing Date shall not
exceed $20,000,000, and (iii) no existing Lender shall be obligated to
increase its Commitment as a result of any request for a Commitment Increase by
the Borrower unless it agrees in its sole discretion to do so.

       

      (b)           Each
Additional Lender must qualify as an Eligible Assignee (the approval of which by
the Administrative Agent shall not be unreasonably withheld or delayed) and the
Borrower and each Additional Lender shall execute a Lender Joinder Agreement
together with all such other documentation as the Administrative Agent and the
Borrower may reasonably require, all in form and substance reasonably
satisfactory to the Administrative Agent and the Borrower, to evidence the
Commitment of such Additional Lender and its status as a Lender
hereunder.

       

      (c)           If
the aggregate Commitments are increased in accordance with this Section, the
Administrative Agent and the Borrower shall determine the effective date (the
“Commitment Increase
Date,” which shall be a Business Day not less than thirty (30) days prior
to the Termination Date) and the final allocation of such
increase.  The Administrative Agent shall promptly notify the Borrower
and the Lenders of the final allocation of such increase and the Commitment
Increase Date.  The Administrative Agent is hereby authorized, on
behalf of the Lenders, to enter into any amendments to this Agreement and the
other Credit Documents as the Administrative Agent shall reasonably deem
appropriate to effect such Commitment Increase.

       

      (d)           Notwithstanding
anything set forth in this Section 2.20 to the contrary,
no increase in the aggregate Commitments pursuant to this Section 2.20 shall be effective
unless:

       

      (i)           The
Administrative Agent shall have received the following, each dated the
Commitment Increase Date and in form and substance reasonably satisfactory to
the Administrative Agent:

       

      
        
           

        

        
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      (A)           as
to each Increasing Lender, evidence of its agreement to provide a portion of the
Commitment Increase, and as to each Additional Lender, a duly executed Lender
Joinder Agreement together with all other documentation required by the
Administrative Agent and the Borrower pursuant to Section 2.20(b);

       

      (B)           an
instrument, duly executed by the Borrower, acknowledging and reaffirming its
obligations under this Agreement and the other Credit Documents to which it is a
party;

       

      (C)           a
certificate of the secretary or an assistant secretary of the Borrower,
certifying to and attaching the resolutions adopted by the board of directors
(or similar governing body) of the Borrower approving or consenting to such
Commitment Increase;

       

      (D)           a
certificate of an Authorized Officer of the Borrower, certifying that
(y) as of the Commitment Increase Date, all representations and warranties
of the Borrower contained in this Agreement and the other Credit Documents are
true and correct in all material respects, both immediately before and after
giving effect to the Commitment Increase and any Loans issued in connection
therewith (except to the extent any such representation or warranty is expressly
stated to have been made as of a specific date, in which case such
representation or warranty is true and correct in all material respects, in each
case as of such date), and (z) no Default or Event of Default has occurred
and is continuing, both immediately before and after giving effect to such
Commitment Increase (including any Loans issued in connection therewith and the
application of the proceeds thereof); and

       

      (ii)           The
conditions precedent set forth in Section 3.2 shall have been
satisfied; provided, however, that the
Borrower shall not be required to deliver a Notice of Borrowing unless Borrower
is requesting a Borrowing of Loans in connection with such Commitment
Increase.

       

      Immediately
after the effectiveness of the Commitment Increase, Schedule 1.1(a) shall
automatically be amended to reflect the Commitments of all Lenders after giving
effect to the Commitment Increase.

       

      ARTICLE
III

       

      CONDITIONS
TO EFFECTIVENESS; CONDITIONS OF BORROWING

       

      3.1           Conditions to
Effectiveness.  This
Agreement shall become effective on the date on which each of the following
conditions shall have been satisfied or waived by all of the
Lenders:

      
        
           

        

        
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      (a)           The
Administrative Agent shall have received the following, each dated as of the
Closing Date (unless otherwise specified) and in such number of copies as the
Administrative Agent shall have requested:

       

      (i)           to
the extent requested by any Lender in accordance with Section 2.4(d), a Note for
such Lender, in each case duly completed in accordance with the provisions of
Section 2.4 and
executed by the Borrower; and

       

      (ii)           the
favorable opinions of (A) internal counsel to the Borrower and (B) Bingham
McCutchen LLP, independent outside counsel to the Borrower, each addressed to
the Administrative Agent and the Lenders and in form and substance reasonably
satisfactory to the Administrative Agent.

       

      (b)           The
Administrative Agent shall have received a certificate, signed by the president,
the chief executive officer or the chief financial officer of the Borrower, in
form and substance satisfactory to the Administrative Agent, certifying that
(i) all representations and warranties of the Borrower, contained in this
Agreement and the other Credit Documents are true and correct as of the Closing
Date, both immediately before and after giving effect to the consummation of the
transactions contemplated hereby, (except to the extent any such representation
or warranty is expressly stated to have been made as of a specific date, in
which case such representation or warranty shall be true and correct in all
material respects as of such date); (ii) no Default or Event of Default has
occurred and is continuing, both immediately before and after giving effect to
the consummation of the transactions contemplated hereby, (iii) both
immediately before and after giving effect to the consummation of the
transactions contemplated hereby, no Material Adverse Change has occurred with
respect to the Borrower and its Subsidiaries, taken as a whole, since December
31, 2008, and there exists no event, condition or state of facts that is
reasonably likely to result in a Material Adverse Change with respect to the
Borrower and its Subsidiaries, taken as a whole, and (iv) all conditions to
effectiveness and the extension of credit hereunder set forth in this Section 3.1 have been
satisfied or waived as required hereunder.

       

      (c)           The
Administrative Agent shall have received a
certificate of the corporate secretary or assistant corporate secretary of the
Borrower, in form and substance satisfactory to the Administrative Agent,
certifying (i) that attached thereto is a true and complete copy of the
articles or certificate of incorporation and all amendments thereto of the
Borrower, certified as of a recent date by the Secretary of State (or comparable
Governmental Authority) of its jurisdiction of organization, and that the same
has not been amended since the date of such certification, (ii) that
attached thereto is a true and complete copy of the bylaws of the Borrower, as
then in effect and as in effect at all times from the date on which the
resolutions referred to in clause (iii) below were adopted to and
including the date of such certificate, and (iii) that attached thereto is
a true and complete copy of resolutions adopted by the board of directors of the
Borrower authorizing the execution, delivery and performance of this Agreement
and the other Credit Documents to which it is a party, and as to the incumbency
and genuineness of the signature of each officer of the Borrower executing this
Agreement or any of such other Credit Documents, and attaching all such copies
of the documents described above.

      
        
           

        

        
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      (d)           The
Administrative Agent shall have received a
certificate as of a recent date of the good standing of the Borrower under the
laws of its jurisdiction of organization, from the Secretary of State (or
comparable Governmental Authority) of such jurisdiction.

       

      (e)           The
Administrative Agent shall have received a
certificate of compliance as of a recent date of each Insurance Subsidiary
issued by the Insurance Regulatory Authority of its jurisdiction of legal
domicile.

       

      (f)           All
legal matters, documentation, and corporate or other proceedings incident to the
transactions contemplated hereby shall be satisfactory in form and substance to
the Administrative Agent; all licenses approvals, permits and consents of any
Governmental Authorities or other Persons required in connection with the
execution and delivery of this Agreement and the other Credit Documents and the
consummation of the transactions contemplated hereby and thereby shall have been
obtained, without the imposition of conditions that are not reasonably
acceptable to the Administrative Agent, and all related filings, if any, shall
have been made, and all such approvals, permits, consents and filings shall be
in full force and effect and the Administrative Agent shall have received such
copies thereof as it shall have reasonably requested; all applicable waiting
periods shall have expired without any adverse action being taken by any
Governmental Authority having jurisdiction; and no action, proceeding,
investigation, regulation or legislation shall have been instituted, threatened
or proposed before, and no order, injunction or decree shall have been entered
by, any court or other Governmental Authority with respect to the Borrower, in
each case to enjoin, restrain or prohibit, to obtain substantial damages in
respect of, or that is otherwise related to or arises out of, this Agreement,
any of the other Credit Documents or the consummation of the transactions
contemplated hereby or thereby, or that, in the opinion of the Administrative
Agent, could reasonably be expected to have a Material Adverse
Effect.

       

      (g)           (i)
All principal, interest and other amounts outstanding, if any, under the
Borrower’s existing revolving credit facility, dated as of August 11, 2006, by
and between the Borrower, the lenders party thereto, and Wachovia Bank, National
Association, as administrative agent for the lenders (as amended prior to the
date hereof, the “Existing Senior Credit
Facility”) shall be repaid and satisfied in full and all guarantees by
the Borrower or any of its Subsidiaries relating thereto extinguished, and
(ii) all commitments to extend credit under the agreements and instruments
relating to the Existing Senior Credit Facility shall be terminated; and the
Administrative Agent shall have received evidence of the foregoing satisfactory
to it, including an escrow agreement or payoff letter executed by the lenders or
the agent under the Existing Senior Credit Facility.

       

      (h)           Since
December 31, 2008, both immediately before and after giving effect to the
consummation of the transactions contemplated by this Agreement, there shall not
have occurred any Material Adverse Change with respect to the Borrower or any
event, condition or state of facts that is reasonably likely to result in a
Material Adverse Change with respect to the Borrower.

      
        
           

        

        
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      (i)           The
Borrower shall have paid (i) to Wachovia and the Arranger, the fees
required under the Fee Letter to be paid on the Closing Date, in the amounts due
and payable on the Closing Date as required by the terms thereof, (ii) to
the Administrative Agent, the initial payment of the annual administrative fee
described in the Fee Letter, and (iii) all other fees and reasonable
expenses of the Administrative Agent and the Lenders required hereunder or under
any other Credit Document to be paid on or prior to the Closing Date (including
reasonable fees and expenses of counsel) in connection with this Agreement, the
other Credit Documents and the transactions contemplated thereby.

       

      (j)           The
Administrative Agent shall have received the
financial statements as described in Sections 4.11(a) and 4.11(c), all of which shall be
in form and substance reasonably satisfactory to the Administrative
Agent.

       

      (k)           The
Administrative Agent shall have received a
Covenant Compliance Worksheet, duly completed and certified by the chief
financial officer of the Borrower and in form and substance reasonably
satisfactory to the Administrative Agent, demonstrating compliance with the
financial covenants set forth in Sections 6.1 through 6.3.

       

      (l)           The
Administrative Agent shall be reasonably
satisfied with the actuarial review and valuation statement of, and opinion as
to the adequacy of, the loss and loss adjustment expense reserve positions as of
December 31, 2008 of each Insurance Subsidiary, with respect to its insurance
business then in force, prepared and given by an independent actuarial firm
reasonably acceptable to the Administrative Agent; and such review, valuation
and opinion shall not differ in any material and negative respect from any such
materials previously delivered to the Administrative Agent.

       

      (m)          The
Administrative Agent shall have received
satisfactory confirmation from A.M. Best & Company that the current rating
of each Insurance Subsidiary that is rated as of the Closing Date is “A-” or
better.

       

      (n)           The
Administrative Agent shall have received an
Account Designation Letter, together with written instructions from an
Authorized Officer, including wire transfer information, directing the payment
of the proceeds of any Loan to be made hereunder.

       

      (o)           The
Administrative Agent shall have received such
other documents, certificates, opinions and instruments in connection with the
transactions contemplated hereby as it shall have reasonably
requested.

       

      3.2           Conditions of All
Borrowings.  The
obligation of each Lender to make any Loans hereunder, including the initial
Borrowing, is subject to the satisfaction of the following conditions precedent
on the relevant Borrowing Date:

       

      (a)           The
Administrative Agent shall have received a
Notice of Borrowing in accordance with Section 2.2(b);

       

      (b)           Each
of the representations and warranties contained in Article IV and in the other
Credit Documents shall be true and correct on and as of such Borrowing Date
(including the Closing Date, if the initial Borrowing is made on the Closing
Date) with the same effect as if made on and as of such date, both immediately
before and after giving effect to the Loans to be made on such Borrowing Date
(except to the extent any such representation or warranty is expressly stated to
have been made as of a specific date, in which case such representation or
warranty shall be true and correct in all material respects as of such date);
and

      
        
           

        

        
          41

          
            

          

        

        
           

        

      

       

      (c)           No
Default or Event of Default shall have occurred and be continuing on such
Borrowing Date, both immediately before and after giving effect to the Loans to
be made on such Borrowing Date.

       

      Each
giving of a Notice of Borrowing and the consummation of each Borrowing shall be
deemed to constitute a representation by the Borrower that the statements
contained in Sections
3.2(b) and 3.2(c) are true, both as of
the date of such notice or request and as of the relevant Borrowing
Date.

       

      ARTICLE
IV

       

      REPRESENTATIONS
AND WARRANTIES

       

      To induce
the Administrative Agent and the Lenders to enter into this Agreement and to
induce the Lenders to extend the credit contemplated hereby, the Borrower
represents and warrants to the Administrative Agent and the Lenders as
follows:

       

      4.1           Corporate Organization and
Power.  The
Borrower and each of its Significant Subsidiaries (i) is a corporation or
other entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, (ii) has the requisite power
and authority to execute, deliver and perform the Credit Documents to which it
is or will be a party, to own and hold its property and to engage in its
business as presently conducted, and (iii) is duly qualified to transact
business as a non-domestic entity and is in good standing in each jurisdiction
where the nature of its business or the ownership of its properties requires it
to be so qualified, except where the failure to be so qualified would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect.

       

      4.2           Authorization;
Enforceability.  The
Borrower has taken, or on the Closing Date will have taken, all necessary
corporate action to execute, deliver and perform each of the Credit Documents to
which it is or will be a party, and has, or on the Closing Date (or any later
date of execution and delivery) will have, validly executed and delivered each
of the Credit Documents to which it is or will be a party.  This
Agreement constitutes, and each of the other Credit Documents upon execution and
delivery will constitute, the legal, valid and binding obligation of the
Borrower, enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors’ rights generally, by
general equitable principles or by principles of good faith and fair
dealing.

       

      
        
           

        

        
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    4.3           No Violation.  The execution, delivery and
performance by the Borrower of this Agreement and each of the other Credit
Documents to which it is or will be a party, and compliance by it with the terms
hereof and thereof, do not and will not (i) violate any provision of its
articles or certificate of incorporation or bylaws or contravene any other
material Requirements of Law applicable to it, (ii) conflict with, result
in a breach of or constitute (with notice, lapse of time or both) a default
under any Material Contract to which it is a party, by which it or any of its
properties is bound or to which it is subject, (iii) result in a
revocation, suspension, termination, impairment, probation, limitation,
non-renewal, forfeiture, declaration of ineligibility, loss of status of, or
loss of any other rights with respect to, any Licenses applicable to the
business, operations or properties of the Borrower and its respective
Subsidiaries except where the revocation, suspension, termination, impairment,
probation, limitation, non-renewal, forfeiture, declaration of ineligibility,
loss of status of, or loss of any other rights with respect to, any License
would not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect, or (iv) result in or require the creation or
imposition of any Lien upon any of its properties or assets.

     

    4.4           Governmental and Third-Party
Authorization; Permits.

     

    (a)           No
consent, approval, authorization or other action by, notice to, or registration
or filing with, any Governmental Authority or other Person is or will be
required as a condition to or otherwise in connection with the due execution,
delivery and performance by the Borrower of this Agreement or any of the other
Credit Documents to which it is or will be a party or the legality, validity or
enforceability hereof or thereof, other than (i) consents, authorizations
and filings that have been (or on or prior to the Closing Date will have been)
made or obtained and that are (or on the Closing Date will be) in full force and
effect, and (ii) consents and filings the failure to obtain or make which
would not, individually or in the aggregate, have a Material Adverse
Effect.

     

    (b)           The
Borrower and each of its Significant Subsidiaries has, and is in good standing
with respect to, all governmental approvals, Licenses, permits and
authorizations necessary to conduct its business as presently conducted and to
own or lease and operate its properties, except for those the failure to obtain
which would not be reasonably likely, individually or in the aggregate, to have
a Material Adverse Effect.

     

    4.5           Litigation.  In
the ordinary course of conducting business, the Borrower and its Subsidiaries
are named as defendants in various actions, investigations, suits or legal
proceedings.  Although the ultimate outcome of such actions,
investigations, suits or legal proceedings is not presently determinable, the
Borrower reasonably believes that the total aggregate amount that it will
ultimately have to pay, if all such actions, investigations, suits or legal
proceedings were adversely determined, will not have a Material Adverse
Effect.

     

    4.6           Taxes.  The Borrower and each of its
Subsidiaries has timely filed all federal, state and local tax returns and
reports required to be filed by it and has paid all taxes, assessments, fees and
other charges levied upon it or upon its properties that are shown thereon as
due and payable, other than those that are being contested in good faith and by
proper proceedings and for which adequate reserves have been established in
accordance with GAAP.  Such returns accurately reflect in all material
respects all liability for taxes of the Borrower and each of its Subsidiaries
for the periods covered thereby.  Except as set forth in Schedule 4.6, there are no
ongoing audits or examinations or, to the knowledge of the Borrower, other
investigations by any Governmental Authority of a material tax liability of the
Borrower or any of its Subsidiaries.  There are no unresolved claims
by any Governmental Authority concerning the tax liability of the Borrower or
any of its Subsidiaries for any period for which tax returns have been or were
required to have been filed, other than claims for which adequate reserves have
been established in accordance with GAAP. As of the Closing Date, neither the
Borrower nor any of its Subsidiaries has waived or extended or has been
requested to waive or extend the statute of limitations relating to the payment
of any taxes.

    
      
         

      

      
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    4.7           Subsidiaries.  Schedule 4.7 sets forth a
list, as of the Closing Date, of all of the Subsidiaries of the Borrower and, as
to each such Subsidiary, the percentage ownership (direct and indirect) of the
Borrower and each direct owner thereof.  Except for the ownership
interests expressly indicated on Schedule 4.7, there are
no ownership interests, warrants, rights, options or other equity securities, or
other Capital Stock of any Subsidiary of the Borrower outstanding or reserved
for any purpose.  All outstanding ownership interests of each
Subsidiary of the Borrower are duly and validly issued, fully paid and
nonassessable.

     

    4.8           Full Disclosure.  All factual information heretofore
or contemporaneously furnished to the Administrative Agent, the Arranger or any
Lender in writing by or on behalf of the Borrower or any of its Subsidiaries for
purposes of or in connection with this Agreement and the transactions
contemplated hereby is, and all other such factual information hereafter
furnished to the Administrative Agent, the Arranger or any Lender in writing by
or on behalf of the Borrower or any of its Subsidiaries will be, true and
accurate in all material respects on the date as of which such information is
dated or certified (or, if such information has been amended or supplemented, on
the date as of which any such amendment or supplement is dated or certified) and
not made incomplete by omitting to state a material fact necessary to make the
statements contained therein, in light of the circumstances under which such
information was provided, not misleading.

     

    4.9           Margin
Regulations. Neither the Borrower
nor any of its Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying Margin Stock.  No proceeds of the Loans will be used,
directly or indirectly, to purchase or carry any Margin Stock, to extend credit
for such purpose or for any other purpose in a manner that would violate or be
inconsistent with Regulations T, U or X or any provision of the Exchange
Act.

     

    4.10         No Material Adverse
Change.  There has been no
Material Adverse Change since December 31, 2008, and there exists no event,
condition or state of facts that is reasonably likely to result in a Material
Adverse Change.

     

    4.11         Financial
Matters.

     

    (a)           The
Borrower has prepared, and has heretofore furnished to the Administrative Agent
copies of (i) the audited consolidated balance sheets of the Borrower and
its Subsidiaries as of December 31, 2008, 2007, and 2006, and the related
statements of income, cash flows and stockholders’ equity for the fiscal years
then ended, together with the opinion of KPMG LLP thereon, and
(ii) the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as of March 31, 2009, and the related statements of income, cash
flows and stockholders’ equity for the three-month period then
ended.  Such financial statements have been prepared in accordance
with GAAP (subject, with respect to the unaudited financial statements, to the
absence of notes required by GAAP and to normal year-end adjustments) and
present fairly in all material respects the financial condition of the Borrower
and its Subsidiaries on a consolidated basis as of the respective dates thereof
and the consolidated results of operations of the Borrower and its Subsidiaries
for the respective periods then ended.  Except as fully reflected in
(x) the most recent financial statements referred to above and the notes
thereto, (y) the financial statements previously delivered pursuant to
Section 5.1, or
(z) any Form 8-K filed by the Borrower with the SEC and previously
delivered by the Borrower to the Administrative Agent, there were, as of the
date of the most recent financial statements described in the immediately
foregoing clause (x) or (y) or, if later, the date of the most recently
delivered Form 8-K, no material liabilities or obligations with respect to the
Borrower or any of its Subsidiaries of any nature whatsoever (whether absolute,
contingent or otherwise and whether or not due) that, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect, and since the
date thereof neither the Borrower nor any Subsidiary has incurred any
liabilities or obligations that, individually or in the aggregate, is reasonably
likely to have a Material Adverse Effect.

    
      
         

      

      
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    (b)           The
Borrower, after giving effect to the consummation of the transactions
contemplated hereby, (i) has capital sufficient to carry on its businesses
as conducted and as proposed to be conducted, (ii) has assets with a fair
saleable value, determined on a going concern basis, (y) not less than the
amount required to pay the probable liability on its existing debts as they
become absolute and matured and (z) greater than the total amount of its
liabilities (including identified contingent liabilities, valued at the amount
that can reasonably be expected to become absolute and matured), and
(iii) does not intend to, and does not believe that it will, incur debts or
liabilities beyond its ability to pay such debts and liabilities as they
mature.

     

    (c)           The
Borrower has heretofore furnished to the Administrative Agent copies of (i) the
Annual Statements of each of its Insurance Subsidiaries as of December 31,
2008, 2007 and 2006, and for the fiscal years then ended, as applicable, and
(ii) the Quarterly Statements of each of its Insurance Subsidiaries as of
the end of the first fiscal quarter of 2009, and for the end of the fiscal
quarter then ended, each as filed with the relevant Insurance Regulatory
Authority (collectively, the “Historical Statutory
Statements”).  The Historical Statutory Statements (including,
without limitation, the provisions made therein for investments and the
valuation thereof, reserves, policy and contract claims and statutory
liabilities) have been prepared in accordance with SAP where required (except as
may be reflected in the notes thereto and subject, with respect to the Quarterly
Statements, to the absence of notes required by SAP and to normal year-end
adjustments), were in compliance with applicable Requirements of Law when filed
and present fairly in all material respects the financial condition of the
respective Insurance Subsidiaries covered thereby as of the respective dates
thereof and the results of operations, changes in capital and surplus and cash
flow of the respective Insurance Subsidiaries covered thereby for the respective
periods then ended.  Except for liabilities and obligations disclosed
or provided for in the Historical Statutory Statements (including, without
limitation, reserves, policy and contract claims and statutory liabilities), no
Insurance Subsidiary had, as of the date of its respective Historical Statutory
Statements, any material liabilities or obligations of any nature whatsoever
(whether absolute, contingent or otherwise and whether or not due) that, in
accordance with SAP, would have been required to have been disclosed or provided
for in such Historical Statutory Statements.  All books of account of
each Insurance Subsidiary fairly disclose all of its material transactions,
properties, assets, investments, liabilities and obligations, are in its
possession and are true, correct and complete in all material
respects.

    
      
         

      

      
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    4.12         Ownership of
Properties.  The Borrower
and each of its Subsidiaries (i) has good and marketable title to all real
property owned by it, (ii) holds interests as lessee under valid leases in
full force and effect with respect to all material leased real and personal
property used in connection with its business, (iii) possesses or has
rights to use licenses, patents, copyrights, trademarks, service marks, trade
names and other assets sufficient to enable it to continue to conduct its
business substantially as heretofore conducted and without any material conflict
with the rights of others, and (iv) has good title to all of its other
properties and assets, in each case under (i), (ii), (iii) and (iv) above free
and clear of all Liens other than Permitted Liens.

     

    4.13         ERISA.

     

    (a)           Except
as would not result in a material liability to the Borrower, each of the
Borrower and its ERISA Affiliates is in compliance in all material respects with
the applicable provisions of ERISA with respect to each Plan, and each Plan is
and has been administered in compliance in all material respects with all
applicable Requirements of Law, including, without limitation, the applicable
provisions of ERISA and the Internal Revenue Code.  No ERISA Event
giving rise to any material liabilities to the Borrower or any of its ERISA
Affiliates (i) has occurred and is continuing, or (ii) to the
knowledge of the Borrower, is reasonably expected to occur with respect to any
Plan.  Except as would not reasonably be expected to result in a
Material Adverse Effect, no Plan has any material Unfunded Pension Liability as
of the most recent annual valuation date applicable thereto, and neither the
Borrower nor any ERISA Affiliate has engaged in a transaction that is subject to
Section 4069 or 4212(c) of ERISA.

     

    (b)           Neither
the Borrower nor any ERISA Affiliate has had a complete or partial withdrawal
from any Multiemployer Plan with respect to which any material liability remains
unpaid, and neither the Borrower nor any ERISA Affiliate would become subject to
any material liability under ERISA if the Borrower or any ERISA Affiliate were
to withdraw completely from all Multiemployer Plans as of the most recent
valuation date.  No Multiemployer Plan is in “reorganization” or is
“insolvent” within the meaning of such terms under ERISA Sections 4241 and 4245,
respectively.

     

    4.14         Environmental
Matters.

     

    (a)           Except
as set forth on Schedule
4.14(a), no Hazardous Substances are or have been generated, used,
located, released, treated, disposed of or stored by the Borrower or any of its
Subsidiaries or, to the knowledge of the Borrower, by any other Person
(including any predecessor in interest) or otherwise, in, on or under any
portion of any real property, leased or owned, of the Borrower or any of its
Subsidiaries, except in material compliance with all applicable Environmental
Laws, and no portion of any such real property or, to the knowledge of the
Borrower, any other real property at any time leased, owned or operated by the
Borrower or any of its Subsidiaries has been contaminated by any Hazardous
Substance; and no portion of any real property, leased or owned, of the Borrower
or any of its Subsidiaries has been or is presently the subject of an
environmental audit, assessment or remedial action.

    
      
         

      

      
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    (b)           No
portion of any real property, leased or owned, of the Borrower or any of its
Subsidiaries has been used by the Borrower or any of its Subsidiaries or, to the
knowledge of the Borrower, by any other Person, as or for a mine, a landfill, a
dump or other disposal facility, a gasoline service station, or (other than for
petroleum substances stored in the ordinary course of business) a petroleum
products storage facility; no portion of such real property or any other real
property at any time leased, owned or operated by the Borrower or any of its
Subsidiaries has, pursuant to any Environmental Law, been placed on the
“National Priorities List” or “CERCLIS List” (or any similar federal, state or
local list) of sites subject to possible environmental problems; and, except as
set forth on Schedule
4.14(b), there are not and, to the knowledge of the Borrower has never
been, any underground storage tanks situated on any real property, leased or
owned, of the Borrower or any of its Subsidiaries.

     

    (c)           All
activities and operations of the Borrower and its Subsidiaries are in compliance
with the requirements of all applicable Environmental Laws, except to the extent
the failure so to comply, individually or in the aggregate, would not be
reasonably likely to have a Material Adverse Effect.  The Borrower and
each of its Subsidiaries has obtained all licenses and permits under
Environmental Laws necessary to its respective operations; all such licenses and
permits are being maintained in good standing; and the Borrower and each of its
Subsidiaries is in compliance with all terms and conditions of such licenses and
permits, except for such licenses and permits the failure to obtain, maintain or
comply with which would not be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect.  Neither the Borrower
nor any of its Subsidiaries is involved in any suit, action or proceeding, or
has received any notice, complaint or other request for information from any
Governmental Authority or other Person, with respect to any actual or alleged
Environmental Claims that, if adversely determined, would be reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect; and, to the
knowledge of the Borrower, there are no threatened actions, suits, proceedings
or investigations with respect to any such Environmental Claims, nor any basis
therefor.

     

    4.15         Compliance With
Laws.  The Borrower and
its Subsidiaries has timely filed all material reports, documents and other
materials required to be filed by it under all applicable Requirements of Law
with any Governmental Authority and Insurance Regulatory Authority, as the case
may be, has retained all material records and documents required to be retained
by it under all applicable Requirements of Law, and is otherwise in compliance
with all applicable Requirements of Law in respect of the conduct of its
business and the ownership and operation of its properties, except for such
Requirements of Law the failure to comply with which, individually or in the
aggregate, is not reasonably likely to have a Material Adverse
Effect.

     

    4.16         Regulated
Industries. Neither the Borrower nor
any of its Subsidiaries is (i) an “investment company,” a company
“controlled” by an “investment company,” or an “investment advisor,” within the
meaning of the Investment Company Act of 1940, as amended, or (ii) a
“holding company,” a “subsidiary company” of a “holding company,” or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding
company,” within the meaning of the Public Utility Holding Company Act of 1935,
as amended.

     

    4.17         Insurance.  The assets, properties and business
of the Borrower and its Subsidiaries are insured against such hazards and
liabilities, under such coverages and in such amounts, as are customarily
maintained by prudent companies similarly situated and under policies issued by
insurers of recognized responsibility.

    
      
         

      

      
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    4.18         Material
Contracts.  Schedule 4.18 lists, as
of the Closing Date, each “material contract” (within the meaning of Item
601(b)(10) of Regulation S-K under the Exchange Act) to which the Borrower or
any of its Subsidiaries is a party, by which any of them or their respective
properties is bound or to which any of them is subject (collectively, “Material Contracts”),
and also indicates the parties and date thereof.  As of the Closing
Date, (i) assuming the due authorization, execution and delivery by the
other parties thereto, each Material Contract is in full force and effect and is
enforceable by the Borrower or the applicable Subsidiary in accordance with its
terms against the other parties thereto except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally, by general equitable principles or by
principles of good faith and fair dealing, and (ii) neither the Borrower
nor any of its Subsidiaries (nor, to the knowledge of the Borrower, any other
party thereto) is in material breach of or default under any Material Contract
in any material respect or has given notice of termination or cancellation of
any Material Contract.

     

    4.19         Reinsurance
Agreements.  Each Reinsurance Agreement is in full force and
effect; none of the Insurance Subsidiaries and no other party thereto, is in
breach of or default under any such contract, other than breaches and defaults
that involve immaterial amounts or are being contested in good faith and by
proper proceedings; and the Borrower has no reason to believe that the financial
condition of any other party to any such contract is impaired such that a
default thereunder by such party could reasonably be
anticipated.  Each Reinsurance Agreement is qualified under all
applicable Requirements of Law to receive the statutory credit assigned to such
Reinsurance Agreement in the relevant Annual Statement or Quarterly Statement at
the time prepared, except where the failure to receive such statutory credit is
not reasonably likely to have a Material Adverse Effect.  There are no
assumption reinsurance contracts or arrangements entered into by any Insurance
Subsidiary in which an Insurance Subsidiary has ceded risk to any other Person
which are material, individually or in the aggregate, to the Borrower or its
Subsidiaries, taken as a whole.

     

    4.20         OFAC; Anti-Terrorism
Laws. Neither
the Borrower nor any of its Subsidiaries (i) is a Sanctioned Person,
(ii) has more than 15% of its assets in Sanctioned Countries, or
(iii) derives more than 15% of its operating income from investments in, or
transactions with, Sanctioned Persons or Sanctioned Countries.  No
part of the proceeds of any Loan hereunder will knowingly be used directly or
indirectly to fund any operations in, finance any investments or activities in
or make any payments to, a Sanctioned Person or a Sanctioned
Country.

     

    (b)           Neither
the making of the Loans hereunder nor the use of the proceeds thereof will
violate the PATRIOT Act, the Trading with the Enemy Act, as amended, or any of
the foreign assets control regulations of the United States Treasury Department
(31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto.  Each of the Borrower and its
Subsidiaries is in
compliance in all material respects with the PATRIOT Act.

    
      
         

      

      
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    ARTICLE
V

     

    AFFIRMATIVE
COVENANTS

     

    The
Borrower covenants and agrees that, until the termination of the Commitments and
the payment in full of all principal and interest with respect to the Loans
together with all other fees, reasonable expenses and other amounts then due and
owing hereunder:

     

    5.1           Financial
Statements.  The
Borrower will deliver to the Administrative Agent and the Administrative Agent
shall promptly deliver to each Lender:

     

    (a)           As
soon as available and in any event within the earlier of ten (10) days after
filing with the Securities Exchange Commission and fifty-five (55) days after
the end of each of the first three fiscal quarters of each fiscal year,
beginning with the first fiscal quarter ending after the date hereof, unaudited
consolidated balance sheets of the Borrower and its Subsidiaries as of the end
of such fiscal quarter and unaudited consolidated statements of income,
cash flows and stockholders’ equity for the Borrower and its Subsidiaries for
the fiscal quarter then ended and for that portion of the fiscal year then
ended, in each case setting forth comparative consolidated figures as of the end
of and for the corresponding period in the preceding fiscal year, all in
reasonable detail and prepared in accordance with GAAP (subject to the absence
of notes required by GAAP and subject to normal year-end adjustments) applied on
a basis consistent with that of the preceding quarter or containing disclosure
of the effect on the financial condition or results of operations of any change
in the application of accounting principles and practices during such quarter;
and

     

    (b)           As
soon as available and in any event within the earlier of ten (10) days after
filing with the Securities Exchange Commission and one hundred (100) days after
the end of each fiscal year, beginning with the fiscal year ending December 31,
2009, an audited consolidated balance sheet of the Borrower and its Subsidiaries
as of the end of such fiscal year and audited consolidated statements of income,
cash flows and stockholders’ equity for the Borrower and its Subsidiaries for
the fiscal year then ended, including the notes thereto, in each case setting
forth comparative figures as of the end of and for the preceding fiscal year,
all in reasonable detail and certified by the independent certified public
accounting firm regularly retained by the Borrower or another independent
certified public accounting firm of recognized national standing reasonably
acceptable to the Administrative Agent, together with (y) a report thereon
by such accountants that is not qualified as to going concern or scope of audit
and to the effect that such financial statements present fairly the consolidated
financial condition and results of operations of the Borrower and its
Subsidiaries as of the dates and for the periods indicated in accordance with
GAAP applied on a basis consistent with that of the preceding year or containing
disclosure of the effect on the financial condition or results of operations of
any change in the application of accounting principles and practices during such
year, and (z) a report by such accountants to the effect that, based on and
in connection with their examination of the financial statements of the Borrower
and its Subsidiaries, they obtained no knowledge of the occurrence or existence
of any Default or Event of Default relating to accounting or financial reporting
matters, or a statement specifying the nature and period of existence of any
such Default or Event of Default disclosed by their audit; provided, however, that such
accountants shall not be liable by reason of the failure to obtain knowledge of
any Default or Event of Default that would not be disclosed or revealed in the
course of their audit examination.

    
      
         

      

      
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    5.2           Statutory Financial
Statements.  The Borrower
will deliver to the Administrative Agent and the Administrative Agent shall
promptly deliver to each Lender:

     

    (a)           As
soon as available and in any event within sixty (60) days after the end of each
of the first three fiscal quarters of each fiscal year, beginning with the first
fiscal quarter ending after the date hereof, a Quarterly Statement of each
Insurance Subsidiary as of the end of such fiscal quarter and for that portion
of the fiscal year then ended, in the form filed with the relevant Insurance
Regulatory Authority, prepared in accordance with SAP;

     

    (b)           As
soon as available and in any event within one hundred five (105) days after the
end of each fiscal year, beginning with the fiscal year ended December 31, 2009,
an Annual Statement of each Insurance Subsidiary as of the end of such fiscal
year and for the fiscal year then ended, in the form filed with the relevant
Insurance Regulatory Authority, prepared in accordance with SAP;
and

     

    (c)           As
soon as available and in any event within one hundred thirty-five (135) days
after the end of each fiscal year, beginning with the fiscal year ended December
31, 2009, the combined Annual Statement of the Insurance Subsidiaries as of the
end of such fiscal year and for the fiscal year then ended, in the form filed
with the relevant Insurance Regulatory Authority, prepared in accordance with
SAP.

     

    5.3           Other Business and Financial
Information.  The
Borrower  will deliver, or cause to be delivered, to the
Administrative Agent and the Administrative Agent shall promptly deliver to each
Lender:

     

    (a)           Concurrently
with each delivery of the financial statements described in Sections 5.1 and 5.2, a Compliance Certificate
in substantially the form of Exhibit C with respect to the
period covered by the financial statements then being delivered, executed by a
Financial Officer of the Borrower, together with a Covenant Compliance Worksheet
reflecting the computation of the financial covenants set forth in Sections 6.1 through 6.3 as of the last day of the
period covered by such financial statements;

     

    (b)           Promptly
upon filing with the relevant Insurance Regulatory Authority and in any event
within one hundred five (105) days after the end of each fiscal year, beginning
with the fiscal year ended December 31, 2009, a copy of each Insurance
Subsidiary’s “Statement of Actuarial Opinion” (or equivalent information should
the relevant Insurance Regulatory Authority not require such a statement) as to
the adequacy of such Insurance Subsidiary’s loss reserves for such fiscal year,
together with a copy of its management discussion and analysis in connection
therewith, each in the format prescribed by the applicable insurance laws of
such Insurance Subsidiary’s jurisdiction of domicile;

     

    (c)           Promptly
upon the sending, filing or receipt thereof, copies of (i) all financial
statements, reports, notices and proxy statements that the Borrower or any of
its Subsidiaries shall send or make available generally to its shareholders,
(ii) all regular, periodic and special reports, registration statements and
prospectuses (other than on Form S-8) that the Borrower or any of its
Subsidiaries shall render to or file with the SEC, the National Association of
Securities Dealers, Inc. or any national securities exchange, and (iii) all
press releases and other statements made available generally by the Borrower or
any of its Subsidiaries to the public concerning material developments in the
business of the Borrower or any of their respective
Subsidiaries;

    
      
         

      

      
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    (d)           Promptly
upon (and in any event within five (5) Business Days after) any Responsible
Officer of the Borrower obtaining knowledge thereof, written notice of any of
the following:

     

    (i)           the
occurrence of any Default or Event of Default, together with a written statement
of a Responsible Officer of the Borrower specifying the nature of such Default
or Event of Default, the period of existence thereof and the action that the
Borrower has taken and proposes to take with respect thereto;

     

    (ii)           the
institution or threatened institution of any action, suit, investigation or
proceeding against or affecting the Borrower or any of its Subsidiaries,
including any such investigation or proceeding by any Governmental Authority
(other than routine periodic inquiries, investigations or reviews), that would,
if adversely determined, be reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect, and any material development in any
litigation or other proceeding previously reported pursuant to Section 4.5 or this Section
5.3(d)(ii);

     

    (iii)           the
receipt by the Borrower or any of its Subsidiaries from any Governmental
Authority or Insurance Regulatory Authority of (y) any written notice
asserting any failure by the Borrower or any of its Subsidiaries to be in
compliance with applicable Requirements of Law which is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect or that
threatens the taking of any action against the Borrower or any of its
Subsidiaries or sets forth circumstances that, if taken or adversely determined,
would be reasonably likely to have a Material Adverse Effect, or (z) any
notice of any actual or threatened suspension, limitation or revocation of,
failure to renew, or imposition of any restraining order, escrow or impoundment
of funds in connection with, any license, permit, accreditation or authorization
of the Borrower or any of its Subsidiaries, where such action would be
reasonably likely to have a Material Adverse Effect;

     

    (iv)           the
occurrence of any ERISA Event, together with (x) a written statement of a
Responsible Officer of the Borrower, specifying the details of such ERISA Event
and the action that the Borrower has taken and proposes to take with respect
thereto, (y) a copy of any notice with respect to such ERISA Event that is
required to be filed by the Borrower or any ERISA Affiliate, as applicable, with
the PBGC and (z) a copy of any notice delivered by the PBGC to the Borrower
or its ERISA Affiliate, as the case may be, with respect to such ERISA
Event;

     

    (v)           the
occurrence of any material default under, or any proposed or threatened
termination or cancellation of, any Material Contract or other material contract
or agreement to which the Borrower or any of its Subsidiaries is a party, where
such default or the termination or cancellation thereof is reasonably likely to
have a Material Adverse Effect;

    
      
         

      

      
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    (vi)         the
occurrence of any of the following: (x) the assertion of any Environmental
Claim against or affecting the Borrower or any of its Subsidiaries or any of
their respective real property, leased or owned; (y) the receipt by the
Borrower or any of its Subsidiaries of notice of any alleged violation of or
noncompliance with any Environmental Laws; or (z) the taking of any
remedial action by the Borrower, any of its Subsidiaries or any other Person in
response to the actual or alleged generation, storage, release, disposal or
discharge of any Hazardous Substances on, to, upon or from any real property
leased or owned by the Borrower or any of its Subsidiaries; but in each case
under clauses (x), (y) and (z) above, only to the extent the same would be
reasonably likely to have a Material Adverse Effect;

     

    (vii)        the
occurrence of any actual changes in any insurance statute or regulation
governing the investment or dividend practices of any Insurance Subsidiary that
would be reasonably likely to have a Material Adverse Effect; and

     

    (viii)       any
other matter or event that has, or would be reasonably likely to have, a
Material Adverse Effect, together with a written statement of a Responsible
Officer of the Borrower setting forth the nature and period of existence thereof
and the action that the Borrower has taken and proposes to take with respect
thereto;

     

    (e)           Promptly,
notice of (i) the occurrence of any material amendment or modification (other
than expiration) to any Reinsurance Agreement (whether entered into before or
after the Closing Date), including any such agreements that are in a runoff mode
on the Closing Date, which amendment or modification would be reasonably likely
to have a Material Adverse Effect, or (ii) the receipt by the Borrower or any of
its Subsidiaries of any written notice of any denial of coverage or claim,
litigation or arbitration with respect to any Reinsurance Agreement to which it
is a ceding party which would be reasonably likely to have a Material Adverse
Effect;

     

    (f)           As
promptly as reasonably possible, such other information about the business,
condition (financial or otherwise), operations or properties of the Borrower or
any of its Subsidiaries as the Administrative Agent, at the request of any
Lender, may from
time to time reasonably request.

     

    5.4           Existence; Franchises;
Maintenance of Properties.  The
Borrower will, and will cause each of its Subsidiaries to, (i) maintain and
preserve in full force and effect their respective organizational or corporate
existence, except as expressly permitted otherwise by Section 7.1,
(ii) obtain, maintain and preserve in full force and effect all other
rights, Licenses, franchises, permits, certifications, approvals, authorizations
required by Governmental Authorities or the Insurance Regulatory Authority, as
the case may be, and necessary to the ownership, occupation or use of their
respective properties or the conduct of their respective business, except to the
extent the failure to do so would not be reasonably likely to have a Material
Adverse Effect, and (iii) keep all material properties in good working
order and condition (normal wear and tear excepted) and from time to time make
all necessary repairs to and renewals and replacements of such properties,
except to the extent that any of such properties are obsolete or are being
replaced or where the failure to so comply with this clause (iii) is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect.

    
      
         

      

      
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    5.5           Compliance with
Laws.  The Borrower will,
and will cause each of its Subsidiaries to, comply in all respects with all
Requirements of Law applicable in respect of the conduct of their respective
business and the ownership and operation of their respective properties, except
to the extent the failure so to comply would not be reasonably likely to have a
Material Adverse Effect.

     

    5.6           Payment of
Obligations.  The Borrower
will, and will cause each of its Subsidiaries to, (i) pay all liabilities
and obligations as and when due (subject to any applicable subordination
provisions), except to the extent failure to do so would not be reasonably
likely to have a Material Adverse Effect, and (ii) pay and discharge all
taxes, assessments and governmental charges or levies imposed upon them, upon
their respective income or profits or upon any of their respective properties,
prior to the date on which penalties would attach thereto, and all lawful claims
that, if unpaid, might become a Lien upon any of the properties of the Borrower;
provided, however, that neither the Borrower nor
any of its Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim that is being contested in good faith and by proper
proceedings and as to which the Borrower or such Subsidiary is maintaining
adequate reserves with respect thereto in accordance with GAAP or SAP, as the
case may be.

     

    5.7           Insurance.  The Borrower will, and will cause
each of its Subsidiaries to, maintain with financially sound and reputable
insurance companies insurance with respect to its assets, properties and
business, against such hazards and liabilities, of such types and in such
amounts, as is customarily maintained by companies in the same or similar
businesses similarly situated.

     

    5.8           Maintenance of Books and
Records; Inspection.  The Borrower will, and will cause each of
its Subsidiaries to, (i) maintain adequate books, accounts and records, in
which full, true and correct entries shall be made of all financial transactions
in relation to their respective business and properties, and prepare all
financial statements required under this Agreement, in each case in accordance
with GAAP or SAP, as the case may be, and in compliance with the requirements of
any Governmental Authority having jurisdiction over them, and (ii) subject
to Section 10.11, permit
employees or agents of the Administrative Agent or any Lender, at their expense,
to inspect their respective properties and examine or audit their respective
books and records and make copies and abstracts of them, and to discuss their
respective affairs, finances and accounts with their respective officers and
employees and the independent public accountants of the Borrower and its
Subsidiaries (and by this provision the Borrower authorizes such accountants to
discuss the finances and affairs of the Borrower and its Subsidiaries), all at
such times and from time to time, upon at least five (5) Business Days’ advance
notice to the Borrower and during regular business hours; provided that (i) if an Event of
Default has occurred and is continuing, advance notice to the Borrower is only
required to be given by 12:00 p.m., Charlotte time, the day preceding such
intended inspection, (ii) the Lenders shall coordinate the exercise of their
visitation and inspection rights under this Section 5.8 through the Administrative
Agent, and (iii) unless (x) an Event of Default has occurred and is continuing,
or (y) the Administrative Agent reasonably believes an event has occurred that
has a Material Adverse Effect, the Lenders shall limit the exercise of
visitation and inspection rights to one time per calendar year.

    
      
         

      

      
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    5.9           Permitted
Acquisitions.  Subject
to the requirements contained in the definition of Permitted Acquisition, and
subject to the other terms and conditions of this Agreement, the Borrower may
from time to time on or after the Closing Date effect Permitted Acquisitions,
provided that,
with respect to each Permitted Acquisition no Default or Event of Default shall
have occurred and be continuing at the time of the consummation of such
Permitted Acquisition or would exist immediately after giving effect
thereto.

     

    5.10         Internal Control
Event. Promptly upon any Responsible Officer of the Borrower obtaining
knowledge of the occurrence of any Internal Control Event, the Borrower shall
provide to the Administrative Agent written notice of the occurrence of such
Internal Control Event, together with a written statement of a Responsible
Officer of the Borrower specifying the nature of such Internal Control Event,
and the action that the Borrower has taken and proposes to take with respect
thereto, and the Borrower shall diligently take any and all such actions to cure
such Internal Control Event in a timely manner.  The Administrative
Agent shall promptly notify each Lender after receiving any such notice from the
Borrower.

     

    5.11         Further
Assurances. The Borrower will, and
will cause each of its Subsidiaries to, make, execute, endorse, acknowledge and
deliver any amendments, modifications or supplements hereto and restatements
hereof and any other agreements, instruments or documents and to effect, confirm
or further assure or protect and preserve the interests, rights and remedies of
the Administrative Agent and the Lenders under this Agreement and the other
Credit Documents.

     

    5.12         OFAC, PATRIOT Act
Compliance.  The Borrower will, and will cause each of its
Subsidiaries to, (i) refrain from knowingly doing business in a Sanctioned
Country or with a Sanctioned Person in violation of the economic sanctions of
the United States administered by OFAC, and (ii) provide, to the extent
commercially reasonable, such information and take such actions as are
reasonably requested by the Administrative Agent or any Lender in order to
assist the Administrative Agent and the Lenders in maintaining compliance with
the PATRIOT Act.

     

    ARTICLE
VI

     

    FINANCIAL
COVENANTS

     

    The
Borrower covenants and agrees that, until the termination of the Commitments and
the payment in full of all principal and interest with respect to the Loans
together with all other fees, reasonable expenses and other amounts then due and
owing hereunder:

     

    6.1           Minimum Consolidated Net
Worth.  Consolidated Net
Worth shall be at all times an amount not less than the sum of (i) $750,000,000, plus (ii) 50% of Consolidated Net
Income for each fiscal quarter (beginning with the fiscal quarter ending June
30, 2009) for which Consolidated Net Income (measured at the end of each such
fiscal quarter) is a positive amount plus (iii) 50% of the aggregate
increases in shareholders’ equity of the Borrower by reason of the issuance or
sale of Capital Stock of the Borrower or any Subsidiary or other capital
contributions realized or received after March 31, 2009.

    
      
         

      

      
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    6.2           Maximum Consolidated Debt to
Total Capitalization.  The
ratio of Consolidated Indebtedness to Consolidated Total Capital shall not be
greater than 0.30 to 1.0 at any time.

     

    6.3           Minimum Combined Statutory
Surplus. Combined
Statutory Surplus shall be at all times an amount not less than (i) $700,000,000
for the period from the Closing Date through December 31, 2009, (ii)
$725,000,000 for the period from January 1, 2010 through March 31, 2010, and
(iii) $750,000,000 for the period from April 1, 2010 through the Maturity
Date.

     

    ARTICLE
VII

     

    NEGATIVE
COVENANTS

     

    The
Borrower covenants and agrees that, until the termination of the Commitments and
the payment in full of all principal and interest with respect to the Loans
together with all other fees, expenses and other amounts then due and owing
hereunder:

     

    7.1           Merger; Consolidation;
Dissolution.  The
Borrower will not, and will not permit or cause any of its Significant
Subsidiaries to, without the written consent of the Required Lenders, liquidate,
wind up or dissolve, or enter into any consolidation, merger or other
combination; provided, however,
that:

     

    (i)           the
Borrower may merge or consolidate with another Person so long as (x) the
Borrower is the surviving entity, (y) unless such other Person is a Wholly
Owned Subsidiary immediately prior to giving effect thereto, the applicable
conditions and requirements of Section 5.9 shall be satisfied, and
(z) immediately after giving effect thereto, no Default or Event of Default
would exist;

     

    (ii)           any
Subsidiary may merge or consolidate with another Person so long as (x) the
surviving entity is the Borrower or a Subsidiary, (y) unless such other
Person is a Wholly Owned Subsidiary immediately prior to giving effect thereto,
the applicable conditions and requirements of Section 5.9 shall be
satisfied, and (z) immediately after giving effect thereto, no Default or
Event of Default would exist; and

     

    (iii)         any
Subsidiary may liquidate, wind-up or dissolve so long as all of the assets of
such Subsidiary are transferred to the Borrower or a Subsidiary.

     

    7.2           Indebtedness.  The
Borrower will not, and will not permit or cause any of its Subsidiaries to,
without the written consent of the Required Lenders, create, incur, assume or
suffer to exist any Indebtedness other than:

     

    (i)           Indebtedness
incurred under this Agreement and the Notes;

     

    (ii)           Indebtedness
incurred in connection with Hybrid Equity Securities;

     

    (iii)         accrued
expenses (including salaries, accrued vacation and other compensation), current
trade or other accounts payable and other current liabilities arising in the
ordinary course of business and not incurred through the borrowing of money,
provided that the same shall be paid when due except to the extent being
contested in good faith and by appropriate proceedings;

    
      
         

      

      
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    (iv)         loans
and advances (A) by the Borrower or any Subsidiary to any other Subsidiary or
(B) by any Subsidiary to the Borrower in an aggregate amount not to exceed ten
percent (10%) of such Subsidiary’s admitted assets for the immediately preceding
calendar year (as reflected on the Annual Statement of such
Subsidiary);

     

    (v)          purchase
money Indebtedness of the Borrower and its Subsidiaries incurred solely to
finance the payment of all or part of the purchase price of any equipment, real
property or other fixed assets acquired in the ordinary course of business,
including Indebtedness in respect of capital lease obligations, and any
renewals, refinancings or replacements thereof (subject to the limitations on
the principal amount thereof set forth in this clause (v)), which
Indebtedness shall not exceed $10,000,000 in aggregate principal amount
outstanding at any time;

     

    (vi)         Indebtedness
in connection with Permitted Liens;

     

    (vii)         Indebtedness
existing on the Closing Date and described in Schedule 7.2 and extensions,
renewals and replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof or result in an earlier final maturity
date;

     

    (viii)       Indebtedness
of the Borrower or any Subsidiary in connection with securities lending
arrangements with financial institutions in the ordinary course of
business;

     

    (ix)          Indebtedness
of each Insurance Subsidiary that is a member of a Federal Home Loan Bank (each,
a “FHLB
Subsidiary”) incurred in connection with loans from the Federal Home Loan
Bank of which such FHLB Subsidiary is a member (the “FHLB Indebtedness”),
in each case pursuant to the terms of such membership; provided that the
aggregate amount of FHLB Indebtedness incurred by each FHLB Subsidiary shall not
at any time exceed ten percent (10%) of such FHLB Subsidiary’s admitted assets
for the immediately preceding calendar year (as reflected on the Annual
Statement of such FHLB Subsidiary);

     

    (x)           Indebtedness
of the Borrower and Wantage Avenue Holding Company, Inc. (“WAHC”), in an
aggregate amount not to exceed $40,000,000, incurred in connection with the
Borrower’s acquisition of WAHC from Selective Insurance Company of America;
and

     

    (xi)          other
Indebtedness incurred by the Borrower, provided that
(A) immediately after giving effect to the incurrence thereof, the Borrower
shall be in compliance with the financial covenant contained in Section 6.2 and (B) at the
time of incurrence thereof, no Default or Event of Default shall have occurred
and be continuing.

    
      
         

      

      
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    7.3           Liens.  The Borrower will not, and will not
permit or cause any of its Subsidiaries to, without the written consent of the
Required Lenders, directly or indirectly, make, create, incur, assume or suffer
to exist, any Lien upon or with respect to any part of its property or assets,
whether now owned or hereafter acquired, or file or authorize the filing of, or
permit to remain in effect if known to Borrower, any financing statement or
other similar notice of any Lien with respect to any such property, asset,
income or profits under the Uniform Commercial Code of any state or under any
similar recording or notice statute, other than the following (collectively,
“Permitted Liens”):

     

    (i)           Liens
in existence on the Closing Date and set forth on Schedule 7.3;

     

    (ii)           Liens
imposed by law, such as Liens of carriers, warehousemen, mechanics, materialmen
and landlords, and other similar Liens incurred in the ordinary course of
business for sums not constituting borrowed money that are not overdue for a
period of more than thirty (30) days or that are being contested in good faith
by appropriate proceedings and for which adequate reserves have been established
in accordance with GAAP (if so required);

     

    (iii)         Liens
(other than any Lien imposed by ERISA, the creation or incurrence of which would
result in an Event of Default under Section 8.1(i)) incurred
in the ordinary course of business in connection with workers’ compensation,
unemployment insurance or other forms of governmental insurance or benefits, or
to secure the performance of letters of credit, bids, tenders, statutory
obligations, surety and appeal bonds, leases, government contracts and other
similar obligations (other than obligations for borrowed money) entered into in
the ordinary course of business;

     

    (iv)         Liens
for taxes, assessments or other governmental charges or statutory obligations
that are not delinquent or remain payable without any penalty or that are being
contested in good faith by appropriate proceedings and for which adequate
reserves have been established in accordance with GAAP (if so
required);

     

    (v)          Liens
securing the purchase money Indebtedness permitted under Section 7.2(v), provided that any
such Lien (y) shall not exceed the greater of (A) the fair market
value of such property or (B) the cost thereof to the Borrower or such
Subsidiary and (z) shall not encumber any other property of the Borrower or
any of its Subsidiaries;

     

    (vi)         any
attachment or judgment Lien not constituting an Event of Default under Section 8.1(h) that is
being contested in good faith by appropriate proceedings and for which adequate
reserves have been established in accordance with GAAP (if so
required);

     

    (vii)        Liens
arising from the filing, for notice purposes only, of financing statements in
respect of true leases;

     

    (viii)       Liens
on Borrower Margin Stock, to the extent the fair market value thereof exceeds
25% of the fair market value of the assets of the Borrower and its Subsidiaries
(including Borrower Margin Stock);

     

    (ix)          Liens
in favor of the Federal Home Loan Banks securing the FHLB Indebtedness permitted
under Section 7.2(ix);

    
      
         

      

      
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    (x)           Lien
on the Borrower’s corporate headquarters located at 40 Wantage Avenue,
Branchville, New Jersey 07890 in favor of Selective Insurance
Company of America securing the Indebtedness permitted under Section 7.2(x);
and

     

    (xi)          with
respect to any real property occupied by the Borrower or any of its
Subsidiaries, all easements, rights of way, licenses and similar encumbrances on
title that do not materially impair the use of such property for its intended
purposes.

     

    7.4           Disposition of
Assets.  The Borrower will
not, and will not permit or cause any of its Subsidiaries to, without the
written consent of the Required Lenders, sell, assign, lease, convey, transfer
or otherwise dispose of (whether in one or a series of transactions) all or any
portion of its assets, business or properties (including, without limitation,
any Capital Stock of any Subsidiary) or enter into any arrangement with any
Person providing for the lease by the Borrower or any Subsidiary as lessee of
any asset that has been sold or transferred by the Borrower or such Subsidiary
to such Person, except for:

     

    (i)           sales
of inventory and
licenses or leases of intellectual property and other assets, in each case in
the ordinary course of business;

     

    (ii)           the
sale or exchange of used or obsolete equipment to the extent (y) the
proceeds of such sale are applied towards, or such equipment is exchanged for,
replacement equipment or (z) such equipment is no longer necessary for the
operations of the Borrower or its applicable Subsidiary in the ordinary course
of business;

     

    (iii)         the
sale by the Borrower and its Subsidiaries of (x) the capital stock or all
or any portion of the assets, business or properties of a Subsidiary that is not
a Significant Subsidiary; and (y) any asset or group of assets of any
Significant Subsidiary constituting less than (A) in any single transaction
or series of related transactions, fifteen percent (15%) of Consolidated Net
Worth as of the last day of the fiscal quarter ending on or immediately prior to
the date of such sale, and (B) during the term of this Agreement, in the
aggregate with all such other sales pursuant to this Section 7.4(iii), thirty
percent (30%) of Consolidated Net Worth as of the end of the immediately
preceding fiscal quarter ending on or immediately prior to the date of such
sale; provided
in the case of any sale pursuant to this Section 7.4(iii) that
immediately after giving effect thereto, no Default or Event of Default would
exist; and

     

    (iv)         the
sale, lease or other disposition of assets by a Subsidiary of the Borrower to
the Borrower or to any of its Subsidiaries if, immediately after giving effect
thereto, no Default or Event of Default would exist.

     

    7.5           Investments and
Acquisitions.  The Borrower will not, and will not permit or cause
any of its Subsidiaries to, directly or indirectly, without the written consent
of the Required Lenders, purchase, own, invest in or otherwise acquire any
Capital Stock, evidence of indebtedness or other obligation or security or any
interest whatsoever in any other Person, or make or permit to exist any loans,
advances or extensions of credit to, or any investment in cash or by delivery of
property in, any other Person, or purchase or otherwise acquire (whether in one
or a series of related transactions) any portion of the assets, business or
properties of another Person (including pursuant to an Acquisition), or create
or acquire any Subsidiary, or become a partner or joint venturer in any
partnership or joint venture (collectively, “Investments”), other
than:

    
      
         

      

      
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    (i)           Investments
by the Borrower and its Subsidiaries to the extent permitted under applicable
Requirements of Law and in compliance at all times with the: (x) the
requirements of the Lloyd’s insurance market, if applicable, (y) all applicable
insurance laws and regulations of any other relevant jurisdictions relating to
investments by an Insurance Subsidiary and (z) the limitations set forth in
the Investment Policy;

     

    (ii)          any
Investment by the Borrower, provided (y) that
during the term of this Agreement, any such Investment pursuant to this Section 7.5(ii) does not
exceed in the aggregate with all other Investments pursuant to this Section 7.5(ii) twenty-five
percent (25%) of Consolidated Net Worth as of the end of the immediately
preceding fiscal quarter ending on or immediately prior to the date of any such
Investment, and (z) that immediately after giving effect thereto, no Default or
Event of Default would exist; and

     

    (iii)         Permitted
Acquisitions.

     

    7.6           Restricted
Payments.  The Borrower
will not, and will not permit or cause any of its Subsidiaries to, directly or
indirectly, declare or make any dividend payment, or make any other distribution
of cash, property or assets, in respect of any of its Capital Stock or any
warrants, rights or options to acquire its Capital Stock, or purchase, redeem,
retire or otherwise acquire for value any shares of its Capital Stock or any
warrants, rights or options to acquire its Capital Stock, or set aside funds for
any of the foregoing, except that:

     

    (i)           the
Borrower may declare and make dividend payments or other distributions payable
solely in its common stock;

     

    (ii)          the
Borrower may declare and pay cash dividends and distributions so long as
immediately before the payment thereof, and after giving effect to the payment
thereto, no Default or Event of Default has occurred and is
continuing;

     

    (iii)         the
Borrower may repurchase or otherwise redeem for value any shares of its Capital
Stock; provided
that, after giving effect to any such repurchase, (A) no Default or Event of
Default shall occur or be continuing and (B) the aggregate amount for all such
repurchases shall not exceed an amount equal to: (x) 50% of Consolidated Net
Income for each fiscal quarter (beginning with the fiscal quarter ending June
30, 2009) for which Consolidated Net Income (measured at the end of each such
fiscal quarter) is a positive amount, plus (y) 50% of the
aggregate increases in shareholders’ equity of the Borrower by reason of the
issuance or sale of Capital Stock of the Borrower or any Subsidiary or other
capital contributions realized or received after March 31, 2009, minus (z) 100% of
Consolidated Net Income for each fiscal quarter (beginning with the fiscal
quarter ending June 30, 2009) for which Consolidated Net Income (measured at the
end of each such fiscal quarter) is a negative amount;

    
      
         

      

      
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    (iv)         the
Borrower and its Subsidiaries may declare and pay dividends in respect of any
Hybrid Equity Securities if, at the time of and after giving effect to any such
payment, no Default or Event of Default has occurred and is continuing;
and

     

    (v)          any
Subsidiary of the Borrower may declare and make dividend payments or other
distributions to the Borrower or another Subsidiary of the Borrower; provided that no
dividend payment or other distribution may be made to any Subsidiary of the
Borrower to the extent such Subsidiary has any restriction or encumbrance on its
ability to make any dividend payment or other distribution to the
Borrower.

     

    7.7           Transactions with
Affiliates.  The Borrower will not, and will not permit or cause
any of its Subsidiaries to, enter into any transaction (including, without
limitation, any purchase, sale, lease or exchange of property or the rendering
of any service) with any officer, director, stockholder or other Affiliate of
the Borrower or any Subsidiary, except if (i) the terms of the transaction are
fair and reasonable, (ii) charges or fees for services performed are reasonable,
and (iii) expenses incurred and payment received are allocated in conformity
with customary insurance accounting practices consistently; provided, however, that nothing contained in
this Section shall prohibit transactions described on Schedule 7.7 or otherwise
expressly permitted under this Agreement.

     

    7.8           Lines of
Business.  The
Borrower will not, and will not permit or cause any of its Subsidiaries to,
without the written consent of the Required Lenders (which consent will not be
unreasonably withheld or delayed), engage to any material extent in any business
other than substantially the same lines of business engaged in by it on the date
hereof and businesses and activities reasonably related thereto.

     

    7.9           Certain
Amendments.  The Borrower
will not, and will not permit or cause any of its Subsidiaries to, amend,
modify or change any provision of its articles or certificate of organization or
operating agreement, or the terms of any class or series of its Capital Stock,
other than in a manner that is not reasonably likely to adversely affect the
Lenders in any material respect, provided, however, that the Borrower may amend
its Restated Certificate of Incorporation, as amended, and By-Laws to effect the
declassification of its Board of Directors, in response to the approval of a
stockholder proposal presented to the Borrower’s stockholders’ in conjunction
with its annual stockholder meeting held on April 29, 2009.

     

    7.10         Limitation on Certain
Restrictions.  The Borrower will not, and will not permit or
cause any of its Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any restriction or encumbrance on
the ability of any Subsidiary of the Borrower to make any dividend payments or
other distributions in respect of its Capital Stock, to repay Indebtedness owed
to the Borrower or any other Subsidiary, to make loans or advances to the
Borrower or any other Subsidiary, or to transfer any of its assets or properties
to the Borrower or any other Subsidiary, in each case other than such
restrictions or encumbrances existing under or by reason of the Credit Documents
or applicable Requirements of Law.

     

    7.11         Fiscal Year The Borrower will not, and will not permit or
cause any of its Subsidiaries to, change the ending date of its fiscal year to a
date other than December 31.

    
      
         

      

      
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    7.12         Accounting
Changes.  The Borrower will not, and will not permit or cause
any of its Subsidiaries to, make or permit any material change in its accounting
policies or reporting practices, except as may be required or permitted by GAAP
or SAP, as the case may be.

     

    7.13         Ratings.  The Borrower (i) will cause each
Material Insurance Subsidiary to maintain a Financial Strength Rating at all
times and (ii) will not permit or cause the Financial Strength Rating of any
Material Insurance Subsidiary to be lower than “A-” at any time.

     

    ARTICLE
VIII

     

    EVENTS
OF DEFAULT

     

    8.1           Events of
Default.  The occurrence
of any one or more of the following events shall constitute an “Event of Default”:

     

    (a)           The
Borrower shall fail to pay (i) any principal of any Loan when due, or (ii) any
interest, any fee or any other Obligation on any Loan within five (5) Business
Days after any such amount becomes due in accordance with the terms
hereof;

     

    (b)           The
Borrower shall fail to observe, perform or comply with any condition, covenant
or agreement contained in any of Sections 2.14, 5.2, 5.3(d)(i)-(ii) or 5.4(i) or in Article VI or Article VII;

     

    (c)           The
Borrower or any of its Subsidiaries shall fail to observe, perform or comply
with any condition, covenant or agreement contained in this Agreement or any of
the other Credit Documents other than those enumerated in Sections 8.1(a) and 8.1(b), and such failure
(i) is deemed by the terms of the relevant Credit Document to constitute an
Event of Default or (ii) shall continue unremedied for any grace period
specifically applicable thereto or, if no such grace period is applicable, for a
period of thirty (30) days after the earlier of (y) the date on which a
Responsible Officer of the Borrower acquires knowledge thereof and (z) the
date on which written notice thereof is delivered by the Administrative
Agent or any Lender
to the Borrower;

     

    (d)           Any
representation or warranty made or deemed made by or on behalf of the Borrower
or any of its Subsidiaries in this Agreement, any of the other Credit Documents
or in any certificate, instrument, report or other document furnished in
connection herewith or therewith or in connection with the transactions
contemplated hereby or thereby shall prove to have been false or misleading in
any material respect as of the time made, deemed made or furnished;

     

    (e)           The
Borrower or any of its Subsidiaries shall (i) fail to pay when due (whether
by scheduled maturity, acceleration or otherwise and after giving effect to any
applicable grace period) any principal of or interest on any Indebtedness (other
than the Indebtedness incurred pursuant to this Agreement) having an aggregate
principal amount of at least $10,000,000, or (ii) fail to observe, perform
or comply with any condition, covenant or agreement contained in any agreement
or instrument evidencing or relating to any such Indebtedness, or any other
event shall occur or condition exist in respect thereof, and the effect of such
failure, event or condition is to cause, or permit the holder or holders of such
Indebtedness (or a trustee or agent on its or their behalf) to cause (with the
giving of notice, lapse of time, or both), the Indebtedness referred to in
clause (i) to become due, or to be prepaid, redeemed, purchased or defeased,
prior to its stated maturity;

    
      
         

      

      
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    (f)           The
Borrower or any of its Subsidiaries shall (i) file a voluntary petition or
commence a voluntary case seeking liquidation, winding-up, reorganization,
dissolution, arrangement, readjustment of debts or any other relief under the
Bankruptcy Code, the insurance laws applicable to any Insurance Subsidiary, or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to
controvert in a timely and appropriate manner, any petition or case of the type
described in Section
8.1(g), (iii) apply for or consent to the appointment of or taking
possession by a custodian, trustee, receiver or similar official for or of
itself or all or a substantial part of its properties or assets, (iv) fail
generally, or admit in writing its inability, to pay its debts generally as they
become due, (v) make a general assignment for the benefit of creditors or
(vi) take any corporate action to authorize or approve any of the
foregoing;

     

    (g)           Any
involuntary petition or case shall be filed or commenced against the Borrower or
any of its Subsidiaries seeking liquidation, winding-up, reorganization,
dissolution, arrangement, readjustment of debts, the appointment of a custodian,
trustee, receiver or similar official for it or all or a substantial part of its
properties or any other relief under the Bankruptcy Code, the insurance laws
applicable to any Insurance Subsidiary, or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, and such
petition or case shall continue undismissed and unstayed for a period of sixty
(60) days; or an order, judgment or decree approving or ordering any of the
foregoing shall be entered in any such proceeding;

     

    (h)           Any
one or more money judgments, writs or warrants of attachment, executions or
similar processes involving an aggregate amount (exclusive of amounts fully
bonded or covered by insurance as to which the surety or insurer, as the case
may be, has acknowledged its liability in writing) in excess of $20,000,000
shall be entered or filed against the Borrower or any of its Subsidiaries or any
of their respective properties and the same shall not be dismissed, stayed or
discharged for a period of thirty (30) days or in any event later than five days
prior to the date of any proposed sale thereunder;

     

    (i)           Any
ERISA Event or any other event or condition shall occur or exist with respect to
any Plan or Multiemployer Plan and, as a result thereof, together with all other
ERISA Events and other events or conditions then existing, the Borrower and the
respective ERISA Affiliates have incurred or would be reasonably likely to incur
liability to any one or more Plans or Multiemployer Plans or to the PBGC (or to
any combination thereof) that has or would be reasonably likely to have a
Material Adverse Effect;

     

    (j)           Any
one or more Licenses, permits, accreditations or authorizations of the Borrower
or any of its Subsidiaries shall be suspended, limited or terminated or shall
not be renewed, or any other action shall be taken, by any Governmental
Authority in response to any alleged failure by the Borrower or any of its
Subsidiaries to be in compliance with applicable Requirements of Law, and such
action, individually or in the aggregate, has or would be reasonably likely to
have a Material Adverse Effect;

    
      
         

      

      
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    (k)           Except
as disclosed in Schedule
4.14(a), any one or more Environmental Claims shall have been asserted
against the Borrower or any of its Subsidiaries (or a reasonable basis shall
exist therefor); the Borrower has incurred or would be reasonably likely to
incur liability as a result thereof; and such liability, individually or in the
aggregate, has or would be reasonably likely to have a Material Adverse Effect;
or

     

    (l)           Any
of the following shall occur: (i) any Person or group of Persons acting in
concert as a partnership or other group, shall, as a result of a tender or
exchange offer, open market purchases, privately negotiated purchases or
otherwise, have become, after the date hereof, the “beneficial owner” (within
the meaning of such term under Rule 13d-3 under the Exchange Act) of securities
of the Borrower representing 20% or more of the combined voting power of the
then outstanding securities of the Borrower ordinarily (and apart from rights
accruing under special circumstances) having the right to vote in the election
of directors; (ii) the Board of Directors of the Borrower shall cease to
consist of a majority of the individuals who constituted the Board of Directors
as of the date hereof or who shall have become a member thereof subsequent to
the date hereof after having been nominated, or otherwise approved in writing,
by at least a majority of individuals who constituted the Board of Directors of
the Borrower as of the date hereof (or their replacements approved as herein
required); or (iii) Borrower shall cease to own, directly or indirectly, 100% of
the issued and outstanding Capital Stock of any of its Significant
Subsidiaries free
and clear of all Liens.

     

    8.2           Remedies: Termination of
Commitment, Acceleration, etc.  Upon and at any time after the
occurrence and during the continuance of any Event of Default, the
Administrative Agent shall at the direction, or may with the consent, of the
Required Lenders, take any or all of the following actions at the same or
different times:

     

    (a)           Declare
the Commitment to be terminated, whereupon the same shall terminate (provided that, upon
the occurrence of an Event of Default pursuant to Section 8.1(f) or Section 8.1(g), the
Commitment shall automatically be terminated);

     

    (b)           Declare
all or any part of the outstanding principal amount of the Loans to be
immediately due and payable, whereupon the principal amount so declared to be
immediately due and payable, together with all interest accrued thereon and all
other amounts payable under this Agreement, the Notes and the other Credit
Documents, shall become immediately due and payable without presentment, demand,
protest, notice of intent to accelerate or other notice or legal process of any
kind, all of which are hereby knowingly and expressly waived by the Borrower;
provided that,
upon the occurrence of an Event of Default pursuant to Section 8.1(f) or Section 8.1(g), all of
the outstanding principal amount of the Loans and all other amounts described in
this Section 8.2(b)
shall automatically become immediately due and payable without presentment,
demand, protest, notice of intent to accelerate or other notice or legal process
of any kind, all of which are hereby knowingly and expressly waived by the
Borrower); and

     

    (c)           Exercise
all rights and remedies available to it under this Agreement, the other Credit
Documents and applicable law.

    
      
         

      

      
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    8.3           Remedies:
Set-Off.  In addition to all other rights and remedies
available under the Credit Documents or applicable law or otherwise, upon and at
any time after the occurrence and during the continuance of any Event of
Default, each Lender and each of their respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
applicable law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or any such Affiliate to or for the credit or the
account of the Borrower against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement or any other Credit Document to
such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement or any other Credit Document and although such
obligations of the Borrower may be contingent or unmatured or are owed to a
branch or office of such Lender or any Affiliate thereof different from the
branch or office holding such deposit or obligated on such
indebtedness.  The rights of each Lender and their respective
Affiliates under this Section
8.3 are in addition to other rights and remedies (including other rights
of setoff) that such Lender or their respective Affiliates may
have.  Notwithstanding the foregoing, this right of setoff shall not
apply to any deposits held by a Borrower or a Subsidiary as to which deposits
the Borrower or such Subsidiary is acting in a fiduciary or custodial capacity
on behalf of others.  Each Lender agrees to notify the Borrower and
the Administrative Agent promptly after any such setoff and application; provided that the failure to give such
notice shall not affect the validity of such setoff and
application.  Notwithstanding the foregoing, neither the
Administrative Agent nor any Lender may setoff or apply any deposits, against
any obligation of the Borrower now or hereafter existing under this Agreement or
any other Credit Document to such Lender by the Borrower or any Subsidiary, that
are held by the Borrower or any Subsidiary in a short-term money market fund of
such Administrative Agent or Lender or any of their Affiliates, successors or
assigns.

     

    ARTICLE
IX

     

    THE
ADMINISTRATIVE AGENT

     

    9.1           Appointment and
Authority.  Each of the Lenders hereby irrevocably appoints
Wachovia to act on its behalf as the Administrative Agent hereunder and under
the other Credit Documents and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto.  The provisions of
this Article are solely for the benefit of the Administrative Agent and the
Lenders, and neither the Borrower nor any of its Subsidiaries shall have rights
as a third party beneficiary of any of such provisions.

     

    9.2          
Rights as a
Lender.  The Person
serving as the Administrative Agent hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender and may exercise the same
as though it were not the Administrative Agent and the term “Lender” or
“Lenders” shall, unless otherwise expressly indicated or unless the context
otherwise requires, include the Person serving as the Administrative Agent
hereunder in its individual capacity.  Such Person and its Affiliates
may accept deposits from, lend money to, act as the financial advisor or in any
other advisory capacity for and generally engage in any kind of business with
the Borrower or any Subsidiary or other Affiliate thereof as if such Person were
not the Administrative Agent hereunder and without any duty to account therefor
to the Lenders.

    
      
         

      

      
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    9.3           Exculpatory
Provisions.  The
Administrative Agent shall not have any duties or obligations except those
expressly set forth herein and in the other Credit Documents.  Without
limiting the generality of the foregoing, the Administrative Agent:

     

    (a)           shall
not be subject to any fiduciary or other implied duties, regardless of whether a
Default or Event of Default has occurred and is continuing;

     

    (b)           shall
not have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Credit Documents that the Administrative Agent is required to
exercise as directed in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be expressly provided for herein or in the
other Credit Documents), provided that the
Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Credit Document or applicable law;
and

     

    (c)           shall
not, except as expressly set forth herein and in the other Credit Documents,
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Borrower or any Affiliate thereof that is
communicated to or obtained by the Person serving as the Administrative Agent or
any of its Affiliates in any capacity.

     

    The
Administrative Agent shall not be liable for any action taken or not taken by it
in good faith (i) with the consent or at the request of the Required
Lenders (or such other number or percentage of the Lenders as shall be
necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Sections 10.5 and 8.2) or (ii) in the
absence of its own gross negligence or willful misconduct.  The
Administrative Agent shall be deemed not to have knowledge of any Default or
Event of Default unless and until notice describing such Default or Event of
Default is given to the Administrative Agent by the Borrower or a
Lender.

     

    The
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Credit Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default or Event of Default,
(iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Credit Document or any other agreement, instrument or
document or (v) the satisfaction of any condition set forth in Article III or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.

    
      
         

      

      
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    9.4           Reliance by Administrative
Agent.  The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying in good faith upon, any notice, request, certificate,
consent, statement, instrument, document or other writing (including any
electronic message, internet or intranet website posting or other distribution)
believed by it to be genuine and to have been signed, sent or otherwise
authenticated by the proper Person.  The Administrative Agent also may
rely in good faith upon any statement made to it orally or by telephone and
believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon.  In determining compliance with any
condition hereunder to the making of any Loan that by its terms must be
fulfilled to the satisfaction of a Lender, the Administrative Agent may presume
that such condition is satisfactory to such Lender unless the Administrative
Agent shall have received notice to the contrary from such Lender prior to the
making of such Loan.  The Administrative Agent may consult with legal
counsel (who may be counsel for the Borrower), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.

     

    9.5           Delegation of
Duties.  The
Administrative Agent may perform any and all of its duties and exercise its
rights and powers hereunder or under any other Credit Document by or through any
one or more sub-agents appointed by the Administrative Agent; provided that such
sub-agents are approved in advance by the Borrower (such approval not to be
unreasonably withheld or delayed).  The Administrative Agent and any
such sub-agent may perform any and all of its duties and exercise its rights and
powers by or through their respective Related Parties.  The
exculpatory provisions of this Article shall apply to any such sub-agent and to
the Related Parties of the Administrative Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as
Administrative Agent.

     

    9.6           Resignation of
Administrative Agent.  The
Administrative Agent may at any time give notice of its resignation to the
Lenders and the Borrower.  Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, with the consent of the
Borrower (not to be unreasonably withheld or delayed, provided that no such
consent shall be required at any time when a Default or Event of Default exists)
to appoint a successor Administrative Agent, which shall be a commercial bank
that (i) is organized under the laws of the United States of America or any
state thereof, (ii) has combined capital and surplus of $500,000,000 and (ii) is
“well capitalized” under the applicable bank regulatory standard.  If
no such successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within thirty (30) days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent meeting the qualifications set forth above and approved in
advance by the Borrower (such approval not to be unreasonably withheld or
delayed); provided that if the
Administrative Agent shall notify the Borrower and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Credit Documents (except that in the
case of any collateral security held by the Administrative Agent on behalf of
the Lenders under any of the Credit Documents, the retiring Administrative Agent
shall continue to hold such collateral security until such time as a successor
Administrative Agent is appointed) and (2) all payments, communications and
determinations provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender directly, until such time as the
Required Lenders appoint a successor Administrative Agent as provided for above
in this Section 9.6.  Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring (or retired) Administrative Agent, and the
retiring Administrative Agent shall be discharged from all of its duties and
obligations hereunder or under the other Credit Documents (if not already
discharged therefrom as provided above in this Section 9.6).  The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor.  After the retiring Administrative Agent’s
resignation hereunder and under the other Credit Documents, the provisions of
this Article and Section 10.1 shall continue in effect
for the benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.

    
      
         

      

      
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    9.7           Non-Reliance on
Administrative Agent and Other Lenders.  Each
Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.  Each
Lender also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Credit Document or any related
agreement or any document furnished hereunder or thereunder.

     

    9.8           No Other Duties,
Etc.  Anything
herein to the contrary notwithstanding, the Arranger listed on the cover page
hereof shall not have any powers, duties or responsibilities under this
Agreement or any of the other Credit Documents, except in its capacity, as
applicable, as the Administrative Agent or a Lender hereunder.

     

    ARTICLE
X

     

    MISCELLANEOUS

     

    10.1         Expenses; Indemnity; Damage
Waiver.

     

    (a)           The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by
the Administrative Agent and its Affiliates (including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent), in
connection with the syndication of the credit facilities provided for herein,
the preparation, negotiation, execution, delivery and administration of this
Agreement and the other Credit Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), and (ii) all
reasonable out-of-pocket expenses incurred by the Administrative Agent or any
Lender (including the reasonable fees, charges and disbursements of any counsel
for the Administrative Agent or any Lender), in connection with the enforcement
or protection of its rights in connection with this Agreement and the other
Credit Documents, including its rights under this Section 10.1.

    
      
         

      

      
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    (b)           The
Borrower shall indemnify the Administrative Agent (and any sub-agent thereof),
each Lender, and each Related Party of any of the foregoing persons (each such
person being called an “Indemnitee”) against,
and hold each Indemnitee harmless from, any and all losses, claims, penalties,
damages, liabilities and related expenses (including the reasonable fees,
charges and disbursements of any counsel for any Indemnitee), incurred by any
Indemnitee or asserted against any Indemnitee by any third party or by the
Borrower or any of its Subsidiaries arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Credit
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby, (ii) any actual or alleged presence or release of Hazardous
Substances on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Claim related in any way to the Borrower
or any of its Subsidiaries, or (iii) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by the Borrower or any of its Subsidiaries, and regardless of whether
any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses (x) are determined
by a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or
(y) result from a claim brought by the Borrower or any of its Subsidiaries
against an Indemnitee for breach in bad faith of such Indemnitee’s obligations
hereunder or under any other Credit Document, if the Borrower or any of its
Subsidiaries has obtained a final and nonappealable judgment in its favor on
such claim as determined by a court of competent jurisdiction.

     

    (c)           To
the extent that the Borrower for any reason fails to indefeasibly pay any amount
required under Section 10.1(a) or Section 10.1(b) to be
paid by it to the Administrative Agent (or any sub-agent thereof) or any Related
Party of the Administrative Agent, each Lender severally agrees to pay to the
Administrative Agent (or any such sub-agent) or such Related Party, as the case
may be, such Lender’s proportion (based on the percentages as used in
determining the Required Lenders as of the time that the applicable unreimbursed
expense or indemnity payment is sought) of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) in its capacity as such, or against
any Related Party of any of the foregoing acting for the Administrative Agent
(or any such sub-agent) in connection with such capacity.  The
obligations of the Lenders under this Section 10.1(c) are
subject to the provisions of Section 2.3(c).

     

    (d)           To
the fullest extent permitted by applicable law, the Borrower shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Credit Document or any agreement or instrument contemplated
hereby or the transactions contemplated hereby or thereby.  No
Indemnitee referred to in Section 10.1(b) shall be
liable for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Credit Documents or the transactions contemplated hereby
or thereby unless the unintended recipient received such information through the
gross negligence or willful misconduct of such Indemnitee.

    
      
         

      

      
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    (e)           All
amounts due under this Section shall be payable by the Borrower upon demand
therefor.

     

    10.2         Governing Law; Submission to
Jurisdiction;
Waiver of Venue; Service of Process.

     

    (a)           This
Agreement and the other Credit Documents shall (except as may be expressly
otherwise provided in any Credit Document) be governed by, and construed in
accordance with, the law of the State of New York (including Sections 5-1401 and
5-1402 of the New York General Obligations Law, but excluding all other choice
of law and conflicts of law rules).

     

    (b)           The
Borrower irrevocably and unconditionally submits, for itself and its property,
to the nonexclusive jurisdiction of the courts of the State of New York sitting
in New York City and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any other Credit
Document, or for recognition or enforcement of any judgment, and each of the
parties hereto irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in such state court
or, to the fullest extent permitted by applicable law, in such federal
court.  Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law.  Nothing in this Agreement or in any other Credit Document shall
affect any right that the Administrative Agent or any Lender may otherwise have
to bring any action or proceeding relating to this Agreement or any other Credit
Document against the Borrower or its properties in the courts of any
jurisdiction.

     

    (c)           The
Borrower irrevocably and unconditionally waives, to the fullest extent permitted
by applicable law, any objection that it may now or hereafter have to the laying
of venue of any action or proceeding arising out of or relating to this
Agreement or any other Credit Document in any court referred to in Section 10.2(b).  Each
of the parties hereto hereby irrevocably waives, to the fullest extent permitted
by applicable law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.

     

    (d)           Each
party hereto irrevocably consents to service of process in the manner provided
for notices in Section 10.4.  Nothing
in this Agreement will affect the right of any party hereto to serve process in
any other manner permitted by applicable law.

     

    (e)           The
Borrower hereby irrevocably designates, appoints and empowers Corporation
Service Company (the "Service of Process
Agent"), with offices on the date hereof at 80 State Street, Albany, New
York 12207-2543, as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf, and in respect of its property, service of
any and all legal process, summons, notices and documents which may be served in
any such action or proceeding.  If for any reason such designee,
appointee and agent shall cease to be available to act as such, the Borrower
agrees to designate a new designee, appointee and agent in New York on the terms
and for the purposes of this provision reasonably satisfactory to the
Administrative Agent under this Agreement.

    
      
         

      

      
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    10.3         Waiver of Jury
Trial.  EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     

    10.4         Notices; Effectiveness; Electronic
Communication.

     

    (a)           Except
in the cases of notices and other communications expressly permitted to be given
by telephone (and except as provided in Section 10.4(b)), all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopier as follows:

     

    (i)           if
to the Borrower or the Administrative Agent, to it at the address (or telecopier
number) specified for such person on Schedule 1.1(a);
and

     

    (ii)         
if to any Lender, to it at its address (or telecopier number) set forth in its
Administrative Questionnaire.

     

    Notices
sent by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when received; notices sent by
telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient).  Notices delivered through electronic communications to
the extent provided in Section 10.4(b) shall be
effective as provided in Section 10.4(b).

     

    (b)           Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communication (including e-mail and internet or intranet websites)
pursuant to procedures approved by the Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender pursuant to Article II.  The
Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communication
pursuant to procedures approved by it, provided that
approval of such procedures may be limited to particular notices or
communications.  Unless the Administrative Agent otherwise prescribes,
(i) notices and other communications sent to an e-mail address shall be
deemed received upon the sender’s receipt of an acknowledgement from the
intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement), provided that if such
notice or other communication is not sent during the normal business hours of
the recipient, such notice or communication shall be deemed to have been sent at
the opening of business on the next business day for the recipient, and
(ii) notices or other communications posted to an internet or intranet
website shall be deemed received upon the deemed receipt by the intended
recipient at its e-mail address as described in the foregoing clause (i) of
notification that such notice or communication is available and identifying the
website address therefor.

    
      
         

      

      
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    (c)           Any
party hereto may change its address or telecopier number for notices and other
communications hereunder by notice to the other parties hereto (except that each
Lender need not give notice of any such change to the other Lenders in their
capacities as such).

     

    10.5        
Amendments, Waivers,
etc.  No
amendment, modification, waiver or discharge or termination of, or consent to
any departure by the Borrower from, any provision of this Agreement or any other
Credit Document shall be effective unless in a writing signed by the Borrower
and the Required Lenders (or by the Administrative Agent at the direction or
with the consent of the Required Lenders), and then the same shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no such
amendment, modification, waiver, discharge, termination or consent
shall:

     

    (a)           unless
agreed to by each Lender directly affected thereby, (i) reduce or forgive
the principal amount of any Loan, reduce the rate of or forgive any interest
thereon (provided that only
the consent of the Required Lenders shall be required to waive the applicability
of any post-default increase in interest rates), or reduce or forgive any fees
hereunder (other than fees payable to the Administrative Agent or the Arranger
for its own account), (ii) extend the scheduled date for the payment of any
principal of or interest on any Loan, the Termination Date or extend the time of
payment of any fees hereunder (other than fees payable to the Administrative
Agent or the Arranger), or (iii) increase any Commitment of any such Lender
over the amount thereof in effect or extend the maturity thereof (it being
understood that a waiver of any Default or Event of Default, if agreed to by the
Required Lenders, or all Lenders (as may be required hereunder with respect to
such waiver), shall not constitute such an increase);

     

    (b)           unless
agreed to by all of the Lenders, (i) reduce the percentage of the aggregate
Commitments or of the aggregate unpaid principal amount of the Loans, or the
number or percentage of Lenders, that shall be required for the Lenders or any
of them to take or approve, or direct the Administrative Agent to take, any
action hereunder or under any other Credit Document (including as set forth in
the definition of “Required Lenders”),
(ii) change any other provision of this Agreement or any of the other
Credit Documents requiring, by its terms, the consent or approval of all the
Lenders for such amendment, modification, waiver, discharge, termination or
consent, or (iii) change or waive any provision of Section 2.15, any other
provision of this Agreement or any other Credit Document requiring pro rata
treatment of any Lenders, or this Section 10.5;
and

    
      
         

      

      
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    (c)           unless
agreed to by the Administrative Agent in addition to the Lenders required as
provided hereinabove to take such action, affect the respective rights or
obligations of the Administrative Agent, as applicable, hereunder or under any
of the other Credit Documents; and

     

    provided further that the Fee
Letter may only be amended or modified, and any rights thereunder waived, in a
writing signed by the parties thereto.

     

    Notwithstanding
the fact that the consent of all Lenders is required in certain circumstances as
set forth above, each Lender is entitled to vote as such Lender sees fit on any
bankruptcy reorganization plan that affects the Obligations, and each Lender
acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code
supersede the unanimous consent provisions set forth herein.

     

    10.6         Successors and
Assigns.

     

    (a)           The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that the Borrower may not assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of the Administrative
Agent and each Lender and no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an Eligible Assignee in
accordance with the provisions of Section 10.6(b), (ii) by way of
participation in accordance with the provisions of Section 10.6(d) or
(iii) by way of pledge or assignment of a security interest subject to the
restrictions of Section 10.6(e) (and any
other attempted assignment or transfer by any party hereto shall be null and
void).  Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in Section 10.6(d) and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

     

    (b)           Any
Lender may at any time assign to one or more Eligible Assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to
it); provided
that any such assignment shall be subject to the following
conditions:

     

    (i)           (A) in
the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to the assigning Lender or
in the case of an assignment to a Lender, an Affiliate of a Lender or an
Approved Fund, no minimum amount need be assigned, and (B) in any case not
described in clause (A) above, the principal outstanding balance of the
Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date) shall not be less than $1,000,000, in any
case, treating assignments to two or more Approved Funds under common management
as one assignment for purposes of the minimum amounts, unless each of the
Administrative Agent and, so long as no Default or Event of Default has occurred
and is continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed);

    
      
         

      

      
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    (ii)          each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender’s rights and obligations under this Agreement with respect
to the Commitment and/or Loans assigned;

     

    (iii)         the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Assumption, together with a processing and recordation fee of
$3,500 for each assignment if the assignee is not a Lender, and the assignee, if
it is not a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire;

     

    (iv)        
no such assignment shall be made to the Borrower or any Affiliate or Subsidiary
thereof; and

     

    (v)         
no such assignment shall be made to a natural person.

     

    Subject
to acceptance and recording thereof by the Administrative Agent pursuant to
Section 10.6(c),
from and after the effective date specified in each Assignment and Assumption,
the assignee thereunder shall be a party to this Agreement and, to the extent of
the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of Sections 2.16(a), 2.16(b), 2.17, and 10.1 with respect to facts and
circumstances occurring prior to the effective date of such
assignment.  Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.6(b) shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section 10.6(d).

     

    (c)           The
Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at its address for notices referred to in Schedule 1.1(a) a copy of
each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of
each Lender pursuant to the terms hereof from time to time (the “Register”).  The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be available for inspection by the
Borrower, at any reasonable time and from time to time upon reasonable prior
notice.

     

    
      
         

      

      
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    (d)           Any
Lender may at any time, without the consent of, or notice to, the Borrower or
the Administrative Agent, sell participations to any Person (other than a
natural person or the Borrower or any Affiliate or Subsidiary thereof) (each, a
“Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that
(i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent and the Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement and the other Credit Documents.  Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other modification
described in Section 10.5(a) and
clauses (i) and (ii) of Section
10.5(b) that affects such Participant.  Subject to Section 10.6(e), the
Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.16(a), 2.16(b) and 2.17 to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant to Section 10.6(b).  To
the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 8.3 as though it
were a Lender; provided such
Participant agrees to be subject to Section 2.15(b) as though it
were a Lender.

     

    (e)           A
Participant shall not be entitled to receive any greater payment under Section 2.16(a), Section 2.16(b) or Section 2.17 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent.  A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.17 unless the
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section 2.17(f) as though it
were a Lender.

     

    (f)           Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement (including under its Notes, if any)
to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such
pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

     

    (g)           The
words “execution,” “signed,” “signature,” and words of like import in any
Assignment and Assumption shall be deemed to include electronic signatures or
the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or the
use of a paper-based recordkeeping system, as the case may be, to the extent and
as provided for in any applicable law, including the Federal Electronic
Signatures in Global and National Commerce Act or any state laws based on the
Uniform Electronic Transactions Act.

     

    (h)           Any
Lender or Participant may, in connection with any assignment, participation,
pledge or proposed assignment, participation or pledge pursuant to this Section 10.6, disclose to
the Eligible Assignee, Participant or pledgee or proposed Eligible Assignee,
Participant or pledgee any information relating to the Borrower and its
Subsidiaries furnished to it by or on behalf of any other party hereto, provided that such
Eligible Assignee, Participant or pledgee or proposed Eligible Assignee,
Participant or pledgee agrees in writing to keep such information confidential
to the same extent required of the Lenders under Section 10.11.

    
      
         

      

      
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    10.7         No Waiver.  The
rights and remedies of the Administrative Agent and the Lenders expressly set
forth in this Agreement and the other Credit Documents are cumulative and in
addition to, and not exclusive of, all other rights and remedies available at
law, in equity or otherwise.  No failure or delay on the part of the
Administrative Agent or any Lender in exercising any right, power or privilege
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude other or further exercise thereof or
the exercise of any other right, power or privilege or be construed to be a
waiver of any Default or Event of Default.  No course of dealing
between the Borrower, the Administrative Agent or the Lenders or their agents or
employees shall be effective to amend, modify or discharge any provision of this
Agreement or any other Credit Document or to constitute a waiver of any Default
or Event of Default.  No notice to or demand upon the Borrower in any
case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the right of the
Administrative Agent or any Lender to exercise any right or remedy or take any
other or further action in any circumstances without notice or
demand.

     

    10.8         Survival.  All
representations, warranties, covenants and agreements made by or on behalf of
the Borrower in this Agreement and in the other Credit Documents shall be
considered to have been relied upon by the other parties hereto and survive the
execution and delivery hereof or thereof and repayment of all Loans and shall continue in
full force and effect as long as any Obligation hereunder shall remain unpaid or
unsatisfied.  In addition, notwithstanding anything herein or under
applicable law to the contrary, the provisions of this Agreement and the other
Credit Documents relating to indemnification or payment of costs and expenses,
including, without limitation, the provisions of Sections 2.16(a), 2.16(b), 2.17, and 10.1 and Article IX, shall survive the
payment in full of all Loans, the termination of the Commitments, and any
termination of this Agreement or any of the other Credit Documents or any
provision hereof or thereof.

     

    10.9         Severability.  To
the extent any provision of this Agreement is prohibited by or invalid under the
applicable law of any jurisdiction, such provision shall be ineffective only to
the extent of such prohibition or invalidity and only in such jurisdiction,
without prohibiting or invalidating such provision in any other jurisdiction or
the remaining provisions of this Agreement in any jurisdiction.

    10.10       Construction.  The
headings of the various articles, sections and subsections of this Agreement and
the table of contents have been inserted for convenience only and shall not in
any way affect the meaning or construction of any of the provisions
hereof.  Except as otherwise expressly provided herein and in the
other Credit Documents, in the event of any inconsistency or conflict between
any provision of this Agreement and any provision of any of the other Credit
Documents, the provision of this Agreement shall control.

     

    
      
        
        

      

      
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    10.11       Confidentiality.  Each
of the Administrative Agent and the Lenders agree to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates’
respective partners, directors, officers, employees, agents, advisors and other
representatives (it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent
requested by any regulatory authority purporting to have jurisdiction over it
(including any self-regulatory authority, such as the National Association of
Insurance Commissioners), (c) to the extent required by applicable
Requirements of Law or by any subpoena or similar legal process, (d) to any
other party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Credit Document or any action or proceeding
relating to this Agreement or any other Credit Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement in writing
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, or
(ii) any actual or prospective counterparty (or its advisors) to any swap
or derivative transaction relating to the Borrower and its Obligations,
(g) with the consent of the Borrower or (h) to the extent such
Information (x) becomes publicly available other than as a result of a
breach of this Section or (y) becomes available to the Administrative
Agent, any Lender, or any of their respective Affiliates on a non-confidential
basis from a source other than the Borrower or any of its Subsidiaries or
Affiliates.  Notwithstanding the foregoing, each of the Administrative
Agent and the Lenders agree that they will not trade the securities of the
Borrower based upon non-public Information that is received by
them.  If the Administrative Agent or a Lender is requested or
required to disclose any Information under Section 10.11(b) or Section 10.11(c), the
Administrative Agent or Lender, as applicable, will notify Borrower promptly in
writing of the terms and circumstances surrounding the request so that Borrower
may seek a protective order or other appropriate remedy.  The
Administrative Agent or Lender, as applicable, agrees not to oppose any action
by Borrower to obtain a protective order or other appropriate remedy and shall
cooperate fully with Borrower.  In the event no such protective order
or other remedy is obtained, the Administrative Agent or Lender, as applicable,
will furnish only the portion legally required.

     

    For
purposes of this Section, “Information” means
all information received from the Borrower or any of its Subsidiaries relating
to the Borrower or any of its Subsidiaries or any of their respective
businesses, other than any such information that is available to the
Administrative Agent or any Lender on a non-confidential basis prior to
disclosure by the Borrower or any of its Subsidiaries.  Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

     

    10.12       Counterparts; Integration;
Effectiveness.  This
Agreement may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.  This
Agreement and the other Credit Documents constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof (except for the Fee Letter).  Except as provided in
Section 3.1, this
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto and receipt by the Administrative Agent and the
Borrower of written notification (including e-mail) of such execution and
authorization of delivery thereof.  Delivery of an executed
counterpart of a signature page of this Agreement by facsimile shall be
effective as delivery of a manually executed counterpart of this
Agreement.

    
      
         

      

      
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    10.13       No Fiduciary Relationship
Established By Credit Documents.  The
Borrower hereby acknowledges that neither the Administrative Agent nor any
Lender has any fiduciary relationship with or fiduciary duty to the Borrower or
any of its Subsidiaries arising out of or in connection with this Agreement or
any of the other Credit Documents, and the relationship between Administrative
Agent and Lenders, on one hand, and the Borrower and its Subsidiaries, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor.

     

    10.14       Disclosure of
Information.  The
Borrower agrees and consents to the Administrative Agent’s and the Arranger’s
disclosure of information relating to this transaction to Gold Sheets and other
similar bank trade publications.  Such information will consist of
deal terms and other information customarily found in such
publications.

     

    10.15       USA Patriot Act
Notice.  Each
Lender that is subject to the PATRIOT Act and the Administrative Agent (for
itself and not on behalf of any Lender) hereby notifies the Borrower that
pursuant to the requirements of the PATRIOT Act, it is required to obtain,
verify and record information that identifies the Borrower or any of its
Subsidiaries, which information includes the name and address of the Borrower
and its Subsidiaries and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify the Borrower and its
Subsidiaries in accordance with the PATRIOT Act.

    

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
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    IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by their duly
authorized officers as of the date first above written.

    

    
      
        	
                SELECTIVE
      INSURANCE GROUP, INC.

              
	 
      	 
      
	
                By:

              	
                /s/ Dale A. Thatcher

              
	
                Name: 

              	
                Dale
      A. Thatcher

              
	
                Title:

              	
                Executive
      Vice President, Chief Financial

                Officer
      and Treasurer

              

      

    

    

    (Signatures
continue on following page)

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        	
                WACHOVIA
      BANK, NATIONAL

                ASSOCIATION, as
      Administrative Agent and as a

                Lender

              
	 
      	 
      
	
                By:

              	
                /s/ Kimberly Shaffer

              
	
                Name: 

              	
                Kimberly
      Shaffer

              
	
                Title:

              	
                Managing
      Director

              

      

    

    

    (Signatures
continue on following page)

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        	
                BRANCH
      BANKING AND TRUST

                COMPANY, as a
      Lender

              
	 
      	 
      
	
                By:

              	
                /s/ Richard L. Keever

              
	
                Name: 

              	
                Richard
      L. Keever

              
	
                Title:

              	
                Senior
      Vice President

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    Borrower’s
Taxpayer Identification No. _____________

    

    NOTE

    

    
      
        	
                $_______________

              	
                ____________,
      2009

              
	 
      	
                Charlotte,
      North Carolina

              

      

    

    

    FOR VALUE RECEIVED, SELECTIVE
INSURANCE GROUP, INC., a New Jersey corporation (the “Borrower”), hereby
promises to pay to the order of

     

    ______________________________
(the “Lender”),
at the offices of Wachovia Bank, National Association (the “Administrative
Agent”) located at One Wachovia Center, 301 South College Street,
Charlotte, North Carolina (or at such other place or places as the
Administrative Agent may designate), at the times and in the manner provided in
the Credit Agreement, dated as of August 25, 2009 (as amended, modified,
restated or supplemented from time to time, the “Credit Agreement”),
among the Borrower, the Lenders from time to time parties thereto, Wachovia
Bank, National Association, as Administrative Agent, and the Syndication Agent
and Documentation Agent named therein, the principal sum of

     

    __________________________
DOLLARS ($___________), or such lesser amount as may constitute the
unpaid principal amount of the Loans made by the Lender, under the terms and
conditions of this promissory note (this “Note”) and the Credit
Agreement.  The defined terms in the Credit Agreement are used herein
with the same meaning.  The Borrower also promises to pay interest on
the aggregate unpaid principal amount of this Note at the rates applicable
thereto from time to time as provided in the Credit Agreement.

     

    This Note
is one of a series of Notes referred to in the Credit Agreement and is issued to
evidence the Loans made by the Lender pursuant to the Credit
Agreement.  All of the terms, conditions and covenants of the Credit
Agreement are expressly made a part of this Note by reference in the same manner
and with the same effect as if set forth herein at length, and any holder of
this Note is entitled to the benefits of and remedies provided in the Credit
Agreement and the other Credit Documents.  Reference is made to the
Credit Agreement for provisions relating to the interest rate, maturity,
payment, prepayment and acceleration of this Note.

     

    In the
event of an acceleration of the maturity of this Note, this Note shall become
immediately due and payable, without presentation, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.

     

    In the
event this Note is not paid when due at any stated or accelerated maturity, the
Borrower agrees to pay, in addition to the principal and interest, all costs of
collection, including reasonable attorneys’ fees.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    This Note
shall be governed by and construed in accordance with the internal laws and
judicial decisions of the State of New York (including Sections 5-1401 and
5-1402 of the New York General Obligations Law, but excluding all other choice
of law and conflicts of law rules).  The Borrower hereby submits to
the nonexclusive jurisdiction of the courts of the State of New York sitting in
New York City and of the United States District Court of the Southern District
of New York, and any appellate court from any thereof, although the Lender shall
not be limited to bringing an action in such courts.

     

    IN WITNESS WHEREOF, the
Borrower has caused this Note to be executed by its duly authorized corporate
officer as of the day and year first above written.

    

    
      
        
          
            
              
                
                  	
                          SELECTIVE
      INSURANCE GROUP, INC.

                        
	 
      	 
      
	
                          By:

                        	
                           

                        
	
                          Name:

                        	
                           

                        
	
                          Title:

                        	
                           

                        

                

              

            

          

        

      

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
      EXHIBIT
B-1

       

      NOTICE
OF BORROWING

      

      ___________,
2009

       

      Wachovia
Bank, National Association,

      as
Administrative Agent

      1525 W.
W.T. Harris Blvd.

      Building
3A2, Mailcode NC 0680

      Charlotte,
North Carolina  28262

      Attention:
Syndication Agency Services

      

      Ladies
and Gentlemen:

      

      The
undersigned, SELECTIVE
INSURANCE GROUP, INC. (the “Borrower”), refers to
the Credit Agreement, dated as of August 25, 2009, among the Borrower, certain
Lenders from time to time parties thereto, and you, as Administrative Agent for
the Lenders (as amended, modified, restated or supplemented from time to time,
the “Credit
Agreement,” the terms defined therein being used herein as therein
defined), and, pursuant to Section 2.2(b) of the
Credit Agreement, hereby gives you, as Administrative Agent, irrevocable notice
that the Borrower requests a Borrowing of Loans under the Credit Agreement, and
to that end sets forth below the information relating to such Borrowing (the
“Proposed
Borrowing”) as required by Section 2.2(b) of the
Credit Agreement:

       

      (i)          The
aggregate principal amount of the Proposed Borrowing is
$_______________.1

       

      (ii)         The
Loans comprising the Proposed Borrowing shall be initially made as [Base Rate
Loans] [LIBOR Loans].2

       

      (iii)        [The
initial Interest Period for the LIBOR Loans comprising the Proposed Borrowing
shall be [one/two/three/six months].]3

       

      (iv)        The
Proposed Borrowing is requested to be made on __________________ (the “Borrowing
Date”).4

      

        

      
        1  Amount
of Proposed Borrowing must comply with Section 2.2(b) of the Credit
Agreement.

      

        
        2  Select
the applicable Type of Loans.

      

        
        3  Include
this clause in the case of a Proposed Borrowing comprised of LIBOR Loans, and
select the applicable Interest Period.

      

      

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      The
Borrower hereby certifies that the following statements are true and correct on
and as of the date hereof and will be true on and as of the Borrowing
Date:

       

      A.           Each
of the representations and warranties contained in Article IV of the Credit
Agreement and in the other Credit Documents is and will be true and correct on
and as of each such date, with the same effect as if made on and as of each such
date, both immediately before and after giving effect to the Proposed Borrowing
(except to the extent any such representation or warranty is expressly stated to
have been made as of a specific date, in which case such representation or
warranty shall be true and correct in all material respects as of such
date);

       

      B.           No
Default or Event of Default has occurred and is continuing or would result from
the Proposed Borrowing to be made on the Borrowing Date; and

       

      C.           After
giving effect to the Proposed Borrowing, the aggregate principal amount of all
Loans outstanding will not exceed the Lenders’ aggregate
Commitments.

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        Very
      truly yours,

                                      
	 
      
	
                                        SELECTIVE
      INSURANCE GROUP, INC.

                                      
	 
	
                                        By:

                                      	
                                         

                                      
	
                                        Name:

                                      	
                                         

                                      
	
                                        Title:

                                      	
                                         

                                      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
         

        
          

        

      

      4  Shall
be a Business Day which may be the same Business Day if this Notice of Borrowing
is received prior to 12:00 p.m. (in the case of Base Rate Loans) or at least
three Business Days after the date hereof (in the case of LIBOR
Loans).

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    EXHIBIT
B-2

     

    NOTICE
OF CONVERSION/CONTINUATION

    

    ___________,
2009

     

    Wachovia
Bank, National Association,

    as
Administrative Agent

    1525 W.
W.T. Harris Blvd.

    Building
3A2, Mailcode NC 0680

    Charlotte,
North Carolina  28262

    Attention:
Syndication Agency Services

    

    Ladies
and Gentlemen:

    

    The
undersigned, SELECTIVE
INSURANCE GROUP, INC. (the “Borrower”), refers to
the Credit Agreement, dated as of August 25, 2009, among the Borrower, certain
Lenders from time to time parties thereto, and you, as Administrative Agent for
the Lenders (as amended, modified, restated or supplemented from time to time,
the “Credit
Agreement,” the terms defined therein being used herein as therein
defined), and, pursuant to Section 2.11(b) of the
Credit Agreement, hereby gives you, as Administrative Agent, irrevocable notice
that the Borrower requests a [conversion] [continuation]1 of Loans under the Credit
Agreement, and to that end sets forth below the information relating to such
[conversion] [continuation] (the “Proposed [Conversion]
[Continuation]”) as required by Section 2.11(b) of the
Credit Agreement:

     

    (i)        The
Proposed [Conversion] [Continuation] is requested to be made on
_______________.2

     

    (ii)       The
Proposed [Conversion] [Continuation] involves $____________3 in aggregate principal
amount of Loans made pursuant to a Borrowing on ________________,4 which Loans are presently
maintained as [Base Rate] [LIBOR] Loans and are proposed hereby to be [converted
into Base Rate Loans] [converted into LIBOR Loans] [continued as LIBOR
Loans].5

    

      

    
      1  Insert
“conversion” or “continuation” throughout the notice, as
applicable.

    

      
      2  Shall
be a Business Day at least one Business Day after the date hereof (in the case
of any conversion of LIBOR Loans into Base Rate Loans) or at least three
Business Days after the date hereof (in the case of any conversion of Base Rate
Loans into, or continuation of, LIBOR Loans), and additionally, in the case of
any conversion of LIBOR Loans into Base Rate Loans, or continuation of LIBOR
Loans, shall be the last day of the Interest Period applicable to such LIBOR
Loans.

    

      
      3  Amount
of Proposed Conversion or Continuation must comply with Section 2.11(a) of the
Credit Agreement.

    

      
      4  Insert
the applicable Borrowing Date for the Loans being converted or
continued.

       

      
        5  Complete
with the applicable bracketed
language.

      

    

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    (iii)      [The
initial Interest Period for the Loans being [converted into] [continued as]
LIBOR Loans pursuant to the Proposed [Conversion] [Continuation] shall be
[one/two/three/six months].]6

     

    The
Borrower hereby certifies that the following statement is true both on and as of
the date hereof and on and as of the effective date of the Proposed [Conversion]
[Continuation]: no Default or Event of Default has or will have occurred and is
continuing or would result from the Proposed [Conversion]
[Continuation].

    

    
      
        
          
            
              
                	
                        Very
      truly yours,

                      
	 
      
	
                        SELECTIVE
      INSURANCE GROUP, INC.

                      
	 
      
	
                        By:

                      	
                          

                      
	
                        Name:

                      	
                          

                      
	
                        Title:

                      	
                          

                      

              

            

          

        

      

    

    

      

    

    6  Include
this clause in the case of a Proposed Conversion or Continuation involving a
conversion of Base Rate Loans into, or continuation of, LIBOR Loans, and select
the applicable Interest Period.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    EXHIBIT
C

    

    COMPLIANCE
CERTIFICATE

     

    THIS CERTIFICATE is delivered
pursuant to the Credit Agreement, dated as of August 25, 2009 (the “Credit Agreement”),
among Selective Insurance Group, Inc., a New Jersey corporation (the “Borrower”), the
Lenders from time to time parties thereto, and Wachovia Bank, National
Association, as Administrative Agent for the Lenders.  Capitalized
terms used herein without definition shall have the meanings given to such terms
in the Credit Agreement.

     

    The
undersigned hereby certifies that:

     

    1.      He
is a duly elected Financial Officer of the Borrower1.

     

    2.      Enclosed
with this Certificate are copies of the financial statements of the Borrower and
its Subsidiaries as of _____________, and for the [________-month period] [year]
then ended, required to be delivered under Section [5.1(a)][5.1(b)] of the Credit
Agreement.  Such financial statements have been prepared in accordance
with GAAP [(subject to the absence of notes required by GAAP and subject to
normal year-end adjustments)]2  and fairly
present the financial condition of the Borrower and its Subsidiaries on a
consolidated basis as of the date indicated and the results of operation of the
Borrower and its Subsidiaries on a consolidated basis for the period covered
thereby.

     

    3.      The
undersigned has reviewed the terms of the Credit Agreement and has made, or
caused to be made under the supervision of the undersigned, a review in
reasonable detail of the transactions and condition of the Borrower and its
Subsidiaries during the accounting period covered by such financial
statements.

     

    4.      The
examination described in paragraph 3 above did not disclose, and the undersigned
has no knowledge of the existence of, any Default or Event of Default during or
at the end of the accounting period covered by such financial statements or as
of the date of this Certificate. [, except as set forth below.

     

    Describe
here or in a separate attachment any exceptions to paragraph 4 above by listing,
in reasonable detail, the nature of the Default or Event of Default, the period
during which it existed and the action that the Borrower has taken or proposes
to take with respect thereto.]

     

    5.      Attached
to this Certificate as Attachment A is a covenant compliance worksheet
reflecting the computation of the financial covenants set forth in
Article VI of the Credit Agreement as of the last day of and for the period
covered by the financial statements enclosed herewith.

    

      

    
      1 The
certificate should be given by an officer of the entity (Borrower) consistent
with the level of consolidation reflected in the financial statements delivered
at closing. 

    

    
      2 Insert
in the case of quarterly financial statements.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
undersigned has executed and delivered this Certificate as of the _______ day of
_____________, ____.

    

    
      
        	
                SELECTIVE
      INSURANCE GROUP, INC.

              
	 
      
	
                By:

              	
                  

              
	
                Name:

              	
                  

              
	
                Title:

              	
                  

              

      

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    ATTACHMENT
A

    

    COVENANT
COMPLIANCE WORKSHEET

    

    A.           Minimum
Consolidated Net Worth

    (Section
6.1 of the Credit Agreement)

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                	
                                                        (1)

                                                      	
                                                        Base
      for calculating Consolidated Net Worth:

                                                      	 
      	 	$	750,000,000	 
	 	 	 	 	 	 	 	 
	
                                                        (2)

                                                      	
                                                        (a)

                                                      	
                                                        Consolidated
      Net Income for each fiscal quarter (if positive) beginning with the fiscal
      quarter ending June 30, 2009:

                                                      	
                                                        $____________

                                                      	 	 	 	 
	 	 	 	 	 	 	 
	 
      	
                                                        (b)

                                                      	
                                                        Net
      income adjustment:

                                                        Multiply
      Line 2(a) by 50%

                                                      	 
      	 	
                                                        $____________

                                                      	 
	 	 	 	 	 	 	 	 
	
                                                        (3)

                                                      	
                                                        (a)

                                                      	
                                                        Aggregate
      increases in shareholders’ equity of the Borrower by reason of the
      issuance or sale of Capital Stock of the Borrower or any Subsidiary or
      other capital contributions realized or received after March 31,
      2009.

                                                      	
                                                        $____________

                                                      	 	 	 	 
	 	 	 	 	 	 	 
	 
      	
                                                        (b)

                                                      	
                                                        Equity
      securities adjustment:

                                                        Multiply
      Line 3(a) by 50%

                                                      	 
      	 	
                                                        $____________

                                                      	 
	 	 	 	 	 	 
	
                                                        (4)

                                                      	
                                                        Required
      Minimum Consolidated Net Worth:

                                                        Add
      Lines 1, 2(b) and 3(b)

                                                      	 
      	 	
                                                        $____________

                                                      	 
	 	 	 	 	 	 
	
                                                        (5)

                                                      	
                                                        Consolidated
      shareholders’ equity of the Borrower and its Subsidiaries as of such date,
      determined in accordance with GAAP, excluding any Disqualified Capital
      Stock (except to the extent deducted in determining such consolidated
      shareholders’ equity)

                                                      	 
      	 	
                                                        $____________

                                                      	 

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    B.           Maximum
Consolidated Debt to Total Capitalization

    (Section
6.2 of the Credit Agreement)

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        (1)

                                      	
                                        Indebtedness
      as of the date of determination, determined on a consolidated basis in
      accordance with GAAP:

                                      	 	 
      	 
	 	 	 	 	 	 
	 
      	
                                        (a)

                                      	
                                        All
      indebtedness and obligations for borrowed money or in respect of loans or
      advances of any kind

                                      	 	
                                        $____________

                                      	 
	 	 	 	 	 	 
	 
      	
                                        (b)

                                      	
                                        All
      obligations evidenced by notes, bonds, debentures or similar
      instruments

                                      	 	
                                        $____________

                                      	 
	 	 	 	 	 	 
	 
      	
                                        (c)

                                      	
                                        All
      reimbursement obligations with respect to surety bonds, letters of credit
      and bankers’ acceptances (in each case, whether or not drawn or matured
      and in the stated amount thereof)

                                      	 	
                                        $____________

                                      	 
	 	 	 	 	 	 
	 
      	
                                        (d)

                                      	
                                        All
      obligations to pay the deferred purchase price of property or
      services

                                      	 	
                                        $____________

                                      	 
	 	 	 	 	 	 
	 
      	
                                        (e)

                                      	
                                        All
      indebtedness created or arising under any conditional sale or other title
      retention agreement with respect to property acquired

                                      	 	
                                        $____________

                                      	 
	 	 	 	 	 	 
	 
      	
                                        (f)

                                      	
                                        All
      obligations as lessee under leases that are or are required to be, in
      accordance with GAAP, recorded as capital leases, to the extent such
      obligations are required to be so recorded

                                      	 	
                                        $____________

                                      	 
	 	 	 	 	 	 
	 
      	
                                        (g)

                                      	
                                        All
      Disqualified Capital Stock issued, with the amount of Indebtedness
      represented by such Disqualified Capital Stock being equal to the greater
      of its voluntary or involuntary liquidation preference and its maximum
      fixed repurchase price, but excluding accrued dividends, if any (for
      purposes hereof, the “maximum fixed repurchase price” of any Disqualified
      Capital Stock that does not have a fixed repurchase price shall be
      calculated in accordance with the terms of such Disqualified Capital Stock
      as if such Disqualified Capital Stock were purchased on any date on which
      Indebtedness shall be required to be determined pursuant to this
      Agreement, and if such price is based upon, or measured by, the fair
      market value of such Disqualified Capital Stock, such fair market value
      shall be determined reasonably and in good faith by the board of directors
      or other governing body of the issuer of such Disqualified Capital
      Stock)

                                      	 	
                                        $____________

                                      	 

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              	 
      	
                                                      (h)

                                                    	
                                                      The
      net termination obligations under any Hedge Agreements, calculated as of
      any date as if such agreement or arrangement were terminated as of such
      date

                                                    	 	
                                                       

                                                      $____________

                                                    	 
      
	 	 	 	 	 	 
	 
      	
                                                      (i)

                                                    	
                                                      All
      Contingent Obligations

                                                    	 	
                                                      $____________

                                                    	 
      
	 	 	 	 	 	 
	 
      	
                                                      (j)

                                                    	
                                                      All
      indebtedness referred to in clauses (a) through (i) above secured by
      any Lien on any property or asset owned or held regardless of whether the
      indebtedness secured thereby shall have been assumed by the Borrower or is
      nonrecourse to the credit of the Borrower

                                                    	 	
                                                      $____________

                                                    	 
      
	 	 	 	 	 	 
	 
      	
                                                      (k)

                                                    	
                                                      Total
      Indebtedness as of the date of determination:

                                                      Add
      Lines 1(a) through 1(j)

                                                    	 	 
      	
                                                      $____________

                                                    
	 	 	 	 	 
	
                                                      (2)

                                                    	
                                                      Exclusions
      from Consolidated Indebtedness:

                                                    	 	 
      	 
      
	 	 	 	 	 	 
	 
      	
                                                      (a)

                                                    	
                                                      Reimbursement
      obligations in respect of any letters of credit issued for the benefit of
      any Insurance Subsidiary or the Borrower in the ordinary course of its
      business, but only in each case to the extent such letters of credit (A)
      are not drawn upon and (B) are collateralized by cash or Cash
      Equivalents

                                                    	 	
                                                      $____________

                                                    	 
      
	 	 	 	 	 	 
	 
      	
                                                      (b)

                                                    	
                                                      Surplus
      notes or intercompany loans issued for the benefit of any Insurance
      Subsidiary or the Borrower in the ordinary course of its business; provided that, notwithstanding the
      foregoing, FLHB Indebtedness shall be included in Consolidated
      Indebtedness

                                                    	 	
                                                      $____________

                                                    	 
      
	 	 	 	 	 	 
	 
      	
                                                      (c)

                                                    	
                                                      Obligations
      of the Borrower or any of its Subsidiaries under any Hybrid Equity
      Securities to
      the extent that the total book value of such Hybrid Equity Securities does
      not exceed 15% of Consolidated Total Capital

                                                    	 	
                                                      $____________

                                                    	 
      
	 	 	 	 	 	 
	 
      	
                                                      (d)

                                                    	
                                                      Aggregate
      Exclusions:

                                                      Add
      Lines 2(a) through 2(c)

                                                    	 	 
      	
                                                      ($___________)

                                                    
	 	 	 	 	 
	
                                                      (3)

                                                    	
                                                      Consolidated
      Indebtedness as of the date of determination:

                                                      Subtract
      Line 3(d) from Line 1(k)

                                                    	 	 
      	
                                                      $____________

                                                    
	 	 	 	 	 
	
                                                      (4)

                                                    	
                                                      Consolidated
      Total Capital as of the date of determination:

                                                    	 	 
      	 
      
	 	 	 	 	 	 
	 
      	
                                                      (a)

                                                    	
                                                      Consolidated
      Net Worth

                                                    	 	
                                                      $____________

                                                    	 
      
	 	 	 	 	 	 
	 
      	
                                                      (b)

                                                    	
                                                      Consolidated
      Indebtedness (but excluding any Hybrid Equity Securities)

                                                    	 	
                                                       

                                                      $____________

                                                    	 
      

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    	 
      	
                            (c)

                          	
                            Obligations
      of the Borrower and its Subsidiaries under any Hybrid Equity
      Securities

                          	 	
                             

                            $____________

                          	 
      
	 	 	 	 	 	 
	 
      	
                            (d)

                          	
                            Consolidated
      Total Capital

                            Add
      Lines 4(a) through 4(c)

                          	 	 
      	
                            $____________

                          
	 	 	 	 	 
	
                            (5)

                          	
                            Consolidated
      Indebtedness to Consolidated Total Capital:

                            Divide
      Line 3 by Line 4(d)3

                          	 	 
      	
                              ____________

                          

                  

                

              

            

          

        

      

    

    

      

    
      3 Under
Section 6.2 of the Credit Agreement, the ratio of Consolidated Indebtedness to
Consolidated Total Capital shall not be greater than 0.30 to 1.0 at any
time.

    

    
      
         

      

      
        iv

        
          

        

      

      
         

      

    

    C.           Minimum
Combined Statutory Surplus

    (Section
6.3 of the Credit Agreement)

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            (1)

                                          	
                                            Statutory
      Surplus of each Insurance Subsidiary (i.e., total amount
      shown as “surplus as regards policyholders” on line 35, page 3, column 1
      of the Annual Statement of each such Insurance Subsidiary)

                                          	 	 
      	 
      
	 	 	 	 	 
	 
      	
                                            (a)    Selective
      Insurance Company of America

                                          	 	
                                            $____________

                                          	 
      
	 	 	 	 	 
	 
      	
                                            (b)    Selective
      Way Insurance Company

                                          	 	
                                            $____________

                                          	 
      
	 	 	 	 	 
	 
      	
                                            (c)    Selective
      Auto Insurance Company of New Jersey

                                          	 	
                                            $____________

                                          	 
      
	 	 	 	 	 
	 
      	
                                            (d)    Selective
      Insurance Company of South Carolina

                                          	 	
                                            $____________

                                          	 
      
	 	 	 	 	 
	 
      	
                                            (e)    Selective
      Insurance Company of the Southeast

                                          	 	
                                            $____________

                                          	 
      
	 	 	 	 	 
	 
      	
                                            (f)    
      Selective Insurance Company of New York

                                          	 	
                                            $____________

                                          	 
      
	 	 	 	 	 
	 
      	
                                            (g)    Selective
      Insurance Company of New England

                                          	 	
                                            $____________

                                          	 
      
	 	 	 	 	 
	 
      	
                                            (h)    Eliminations

                                          	 	
                                            ($___________)

                                          	 
      
	 	 	 	 	 
	
                                            (2)

                                          	
                                            Combined
      Statutory Surplus:

                                            Add
      Lines 1(a) through 1(h)4

                                          	 	 
      	
                                              $___________

                                          

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    Eliminations
(detail):

    

      

    
      4 Under
Section 6.3 of the Credit Agreement, the Combined Statutory Surplus shall be at
all times an amount not less than (i) $700,000,000 for the period from the
Closing Date through December 31, 2009, (ii) $725,000,000 for the period from
January 1, 2010 through March 31, 2010, and (iii) $750,000,000 for the period
from April 1, 2010 through the Maturity Date.

    

    
      
         

      

      
        v

        
          

        

      

      
         

      

    

    EXHIBIT
D

    

    FORM
OF ASSIGNMENT AND ASSUMPTION

     

    THIS ASSIGNMENT AND ASSUMPTION
(this “Assignment and
Assumption”) is dated as of the Effective Date set forth below and is
entered into by and between [Insert name of Assignor] (the
“Assignor”) and
[Insert name of
Assignee] (the “Assignee”).  Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit Agreement identified below, receipt of a copy of which is hereby
acknowledged by the Assignee.  The Standard Terms and Conditions set
forth in Annex 1 attached
hereto (the “Standard
Terms and Conditions”) are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth
herein in full.

     

    For an
agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the
Assignor, subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights
and obligations in its capacity as a Lender under the Credit Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below (including any guarantees included in such
facilities) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights
and obligations sold and assigned pursuant to clauses (i) and (ii) above
being referred to herein collectively as the “Assigned
Interest”).  Such sale and assignment is without recourse to
the Assignor and, except as expressly provided in this Assignment and
Assumption, without representation or warranty by the Assignor.

     

    1.           Assignor:                         ______________________________

    

    2.           Assignee:                        
______________________________

     
      [and is an Affiliate/Approved Fund of [identify Lender]1]

    

    3.           Borrower:                        Selective
Insurance Group, Inc.

    

    4.           Administrative
Agent:   Wachovia Bank, National Association, as the
Administrative Agent under the Credit Agreement.

    

      

    
      1  Select
as applicable.

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    5.           Credit
Agreement:  Credit Agreement, dated as of August 25, 2009 (as
amended, modified, restated or supplemented from time to time, the “Credit Agreement”),
among the Borrower, certain lenders from time to time parties thereto (the
“Lenders”), and
Wachovia Bank, National Association, as Administrative Agent for the
Lenders.

    

    
      6.           Assigned
Interest:

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	
                                                Aggregate Amount of

                                                Commitment / 

                                                Loans3

                                              	 	
                                                Amount of

                                                Commitment/ 

                                                Loan Assigned2

                                              	 	 	
                                                Percentage Assigned

                                                of
      Commitment /

                                                Loan3

                                              	 	 	
                                                 

                                                CUSIP

                                                Number4

                                              
	
                                                $

                                              	 	
                                                $

                                              	 	 	 	 	%	 	 
      
	
                                                $

                                              	 	
                                                $

                                              	 	 	 	 	%	 	 
      
	
                                                $

                                              	 	
                                                $ 

                                              	 	 	 	 	%	 	 
      

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

                 

              

            

          

        

      

    

    [7.           Trade
Date:                     ______________]5

    

    8.           Effective
Date:                 ______________
[TO BE INSERTED BY THE ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE
DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

    

      

    
      2  Amount
to be adjusted by the counterparties to take into account any payments or
prepayments made between the Trade Date and the Effective Date. 

    

    
      3  Set
forth, to at least 9 decimals, as a percentage of the Commitment / Loans of all
Lenders thereunder. 

    

    
      4  Insert
if applicable. 

    

    
      5  To
be completed if the Assignor and the Assignee intend that the minimum assignment
amount is to be determined as of the Trade Date.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    The terms
set forth in this Assignment and Assumption are hereby agreed to:

     

    
      
        
          
            
              
                
                  
                    	
                            ASSIGNOR:

                          
	 
      
	
                            [NAME
      OF ASSIGNOR]

                          
	 
      	 
      
	
                            By:

                          	
                               

                          
	
                            Name:

                          	
                               

                          
	
                            Title:

                          	
                               

                          
	 
      	 
      
	
                            ASSIGNEE:

                          
	 
      	 
      
	
                            [NAME
      OF ASSIGNEE]

                          
	 
      
	
                            By:

                          	
                               

                          
	
                            Name:

                          	
                               

                          
	
                            Title:

                          	
                               

                          

                  

                

              

            

          

        

      

    

     

    [Consented
to and]6
Accepted:

    

    WACHOVIA BANK, NATIONAL
ASSOCIATION,

    as
Administrative Agent

    

    
      
        	
                By:

              	
                   

              
	
                Name:

              	
                   

              
	
                Title:

              	
                   

              

      

    

    

    [Consented
to:]7

    

    SELECTIVE
INSURANCE GROUP, INC.

    as
Borrower

    

    
      
        	
                By:

              	
                   

              
	
                Name:

              	
                   

              
	
                Title:

              	
                   

              

      

    

    

      

    
      6  To
be added only if the consent of the Administrative Agent is required by the
terms of the Credit Agreement. 

    

    
      7  To
be added only if the consent of the Borrower is required by the terms of the
Credit Agreement.

       

      
        Signature
Page to Assignment and Assumption

      

      
        
          
             

          

          
            
            

            
              

            

          

          
             

          

        

      

      

    

    ANNEX 1
to Assignment and Assumption

    

    Credit
Agreement, dated as of August 25, 2009, among Selective Insurance Group, Inc.,
as

    Borrower,
certain Lenders from time to time parties thereto, and Wachovia Bank,
National

    Association,
as Administrative Agent to the Lenders

    

    STANDARD
TERMS AND CONDITIONS FOR

    ASSIGNMENT
AND ASSUMPTION

    

    1.           Representations and
Warranties.

    

    1.1         Assignor.  The
Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to
(i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Credit Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Credit Document or (iv) the performance
or observance by the Borrower, any of its Subsidiaries or Affiliates or any
other Person of any of their respective obligations under any Credit
Document.

    

    1.2.         Assignee.  The
Assignee (a) represents and warrants that (i) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment and Assumption and to consummate the transactions contemplated hereby
and to become a Lender under the Credit Agreement, (ii) it meets all
requirements of an Eligible Assignee under the Credit Agreement (subject to
receipt of such consents as may be required under the Credit Agreement),
(iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder,
(iv) it has received a copy of the Credit Agreement, together with copies
of the most recent financial statements delivered pursuant to Section 5.1
thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without
reliance on the Administrative Agent or any other Lender, and (v)  attached
to the Assignment and Assumption is any documentation required to be delivered
by it pursuant to the terms of the Credit Agreement, including without
limitation the documentation described in Section 2.17 of the Credit Agreement,
duly completed and executed by the Assignee; and (b) agrees that
(i) it will, independently and without reliance on the Administrative
Agent, the Assignor or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Documents, and
(ii) it will perform in accordance with their terms all of the obligations
that by the terms of the Credit Documents are required to be performed by it as
a Lender.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    2.           Payments.  From
and after the Effective Date, the Administrative Agent shall make all payments
in respect of the Assigned Interest (including payments of principal, interest,
fees and other amounts) to the Assignor for amounts that have accrued to but
excluding the Effective Date and to the Assignee for amounts that have accrued
from and after the Effective Date.

    

    3.           General
Provisions.  This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns.  This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument.  Delivery of an executed counterpart of a signature page
of this Assignment and Assumption by telecopy shall be effective as delivery of
a manually executed counterpart of this Assignment and
Assumption.  This Assignment and Assumption shall be governed by, and
construed in accordance with, the laws of the State of New York (including
Sections 5-1401 and 5-1402 of the New York General Obligations Law, but
excluding all other choice of law and conflicts of law
rules).

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    EXHIBIT
E

     

    FORM
OF LENDER JOINDER AGREEMENT

     

    THIS LENDER JOINDER AGREEMENT
(this “Lender Joinder
Agreement”) is made this ____ day of ___________, 20__, by
__________________, a _________________ (the “New
Lender”).  Reference is made to the Credit Agreement, dated as
of August 25, 2009, among Selective Insurance Group, Inc., a corporation
organized under the laws of New Jersey (the “Borrower”), the
Lenders named therein and Wachovia Bank, National Association (“Wachovia”), as
administrative agent for the Lenders (in such capacity, the “Administrative
Agent”) (as amended, modified, restated or supplemented from time to
time, the “Credit
Agreement”).  Terms defined in the Credit Agreement are, unless
otherwise defined herein or the context otherwise requires, used herein as
defined therein.

     

    The New Lender hereby agrees as
follows:

     

    1.           Lender Joinder
Agreement.  Subject to the terms and conditions hereof and of
the Credit Agreement, the New Lender hereby agrees to become a Lender under the
Credit Agreement with a Commitment of _______________ Dollars
($__________).  After giving effect to this Lender Joinder Agreement
and the adjustments required under Section 2.20(d) of the Credit Agreement, the
New Lender’s Commitment and the Loans assigned to the New Lender will be as set
forth in Item 4 of Annex I attached
hereto.  The New Lender agrees that all references in the Credit
Documents to “Lender” or “Lenders” include the New Lender.

    

    2.           New Lender
Representations.  The New Lender (i) confirms that it has
received a copy of the Credit Agreement, together with copies of the financial
statements of the Borrower delivered to the Administrative Agent pursuant to the
Credit Agreement and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Lender Joinder Agreement, (ii) agrees that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement, (iii) appoints and authorizes the Administrative
Agent to take such action as Administrative Agent on its behalf under the Credit
Documents, and to exercise such powers and to perform such duties, as are
specifically delegated to or required of the Administrative Agent by the terms
thereof, together with such other powers as are reasonably incidental thereto,
(iv) agrees that it will perform in accordance with their terms all of the
obligations that by the terms of the Credit Agreement are required to be
performed by it as a Lender, (v) specifies as its address for payments and
notices the office set forth beneath its name on its signature page hereto and
(vi) agrees to furnish no later than the Effective Date (as defined below) any
documentation required to be delivered by it pursuant to the terms of the Credit
Agreement, including without limitation the documentation described in Section
2.17 of the Credit Agreement, duly completed and executed by the New
Lender.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    3.           Effective
Date.  Following the execution of this Lender Joinder Agreement
by the New Lender, an executed original hereof, together with all attachments
hereto, shall be delivered to the Administrative Agent.  The effective
date of this Lender Joinder Agreement (the “Effective Date”)
shall be the date of execution hereof by the Borrower, the Administrative Agent
and the New Lender.  As of the Effective Date, the Lender shall be a
party to the Credit Agreement and, to the extent provided in this Lender Joinder
Agreement, shall have the rights and obligations of a Lender thereunder and
under the other Credit Documents.

    

    4.           Governing
Law.  This Lender Joinder Agreement shall be governed by, and
construed in accordance with, the law of the State of New York (including
Sections 5-1401 and 5-1402 of the New York General Obligations Law, but
excluding all other choice of law and conflicts of law rules).

    

    5.           Entire
Agreement.  This Lender Joinder Agreement, together with the
Credit Agreement and the other Credit Documents, embodies the entire agreement
and understanding between the parties hereto and supersedes all prior agreements
and understandings of the parties, verbal or written, relating to the subject
matter hereof.  Except as expressly modified herein, the Credit
Documents, as amended, are and remain in full force and effect.

    

    6.           Successors and
Assigns.  This Lender Joinder Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their successors and
assigns.

    

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

     

    [signatures
on following page]

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
parties have caused this Lender Joinder Agreement to be executed by their duly
authorized officers as of the date first above written.

    

    
      
        
          
            
              	
                      [Insert
      Name of New Lender]

                    
	 
      	 
      
	
                      By:

                    	
                       

                    
	
                      Name:

                    	
                       

                    
	
                      Title:

                    	
                       

                    

            

          

        

      

    

     

    Accepted
this ___ day of

    _____________,
20___:

    

    WACHOVIA BANK, NATIONAL
ASSOCIATION, as Administrative Agent

     

    
      
        
          
            
              	
                      By:

                    	
                       

                    
	
                      Name:

                    	
                       

                    
	
                      Title:

                    	
                       

                    

            

          

        

      

    

     

    Consented
and agreed to:

    

    
      SELECTIVE
INSURANCE GROUP, INC.

    

     

    
      
        
          
            
              	
                      By:

                    	
                       

                    
	
                      Name:

                    	
                       

                    
	
                      Title:

                    	
                       

                    

            

          

        

      

    

     

    
      
        
          Signature
Page to Joinder Agreement

        

         

      

      
         

        
          

        

      

      
         

      

    

     

    ANNEX I

    

    1.           
Borrower:  Selective
Insurance Group, Inc.

    

    2.           
Name and Date of
Credit Agreement:

    

    Credit
Agreement, dated as of August 25, 2009, among Selective Insurance Group, Inc.,
certain Lenders from time to time parties thereto, and Wachovia Bank, National
Association, as Administrative Agent.

     

    3.           
Date of Lender Joinder Agreement:  ___________, 20___

    

    
      	
              4.

            	
              Amounts
      (as of date of adjustment pursuant to Section 2.20(d) of the Credit
      Agreement):

            

    

    

    
      
        
          
            
              
                	
                        Aggregate Amount of

                        Commitment /

                        Loans for all Lenders

                        under Agreement

                      	 	
                        Amount of Commitment /

                        Loans Assigned

                      	 	 	
                        Percentage Assigned of

                        Commitment /

                        Loans1

                      	 
	
                        $

                      	 	$	 	 	 	 	 
      	%

              

            

          

        

         

        5.           
Addresses for Payments and Notices:

      

    

    

    New
Lender:                     
For
Funding/Notices:

    __________________________

    __________________________

    __________________________

    __________________________

    __________________________

    Telecopy: (___) ________

    Reference

    __________________________  
      
        	
                1 

              	
                 Set
      forth, to at least 9 decimals, as a percentage of the Loans of all Lenders
      made thereunder.

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    For
Payments:

    __________________________

    __________________________

    __________________________

    __________________________

    __________________________

    Telecopy: (___) ________

    Reference:

     

    6.           Effective
Date:  _______________, ______ (in accordance with Section
3).SUBSCRIPTION
AGREEMENT

    

    Nevada
Gold Holdings, Inc.

    1265 Mesa
Drive

    Fernley,
Nevada 89408

    

    This
Subscription Agreement (this “Agreement”)
has been executed by the subscriber set forth in the signature page attached
hereto (the “Subscriber”)
in connection with the private placement offering (the “Offering”)
of a minimum of 4,000,000 and a maximum of 8,000,000 units of securities (the
“PPO
Units”) issued by Nevada Gold Holdings, Inc., a Nevada Corporation (the
“Company”),
at a purchase price of $0.25 per PPO Unit.  Each PPO Unit consists of
(i) one share of the Company’s common stock, par value $0.001 per share (“Common
Stock”), and (ii) a warrant, substantially in the form of Exhibit A attached
hereto  (the “Warrants”),
representing the right to purchase one share of Common Stock, exercisable for a
period of five years at an exercise price of $0.50 per whole share; and in the
event the Offering is oversubscribed, the Company may, in its discretion, sell
up to 1,000,000 additional Units at the same purchase price per
Unit.

     

    The PPO
Units being subscribed for pursuant to this Agreement have not been registered
under the Securities Act of 1933, as amended (the “Securities
Act”).  The Offering is being made on a “best efforts” basis to
“accredited investors,” as defined in Regulation D under the Securities Act, and
non-”U.S. persons,” as defined in Regulation S under the Securities
Act.  The Company reserves the right, in its sole discretion and for
any reason, to reject any Subscriber’s subscription in whole or in part, or to
allot less than the number of PPO Units subscribed for.

     

    The
closing of the Offering (the “Closing;”
and the date on which such Closing occurs hereinafter referred to as the “Closing
Date”) shall be at the offices of Gottbetter & Partners, LLP, as
counsel to the Company, at 488 Madison Avenue, New York, New York 10022 (or such
other place as is mutually agreed to by the Company).  The Company may
conduct multiple closings for the sale of the PPO Units until the termination of
the Offering.  The Offering shall continue until July 15, 2009, which
date may be extended until August 15, 2009 by the Company.

     

    1.           Subscription.  The
undersigned Subscriber hereby subscribes to purchase the number of PPO Units set
forth on the signature page attached hereto, at an aggregate price as set forth
on such signature page (the “Purchase
Price”), subject to the terms and conditions of this Agreement and on the
basis of the representations, warranties, covenants and agreements contained
herein.

     

    2.           Subscription
Procedure.  To complete a subscription for the PPO Units, the
Subscriber must fully comply with the subscription procedure provided in this
Section on or before the Closing Date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    a.           Transaction
Documents.  On or before the Closing Date, the Subscriber shall
review, complete and execute the Signature Page to this Agreement and the
Investor Certification, attached hereto as Appendix A
(collectively, the “Transaction
Documents”), and deliver the Transaction Documents to the Escrow
Agent.  Executed documents may be delivered to the Escrow Agent by
facsimile or electronic mail (e-mail), if the Subscriber delivers the original
copies of the documents to the Escrow Agent as soon as practicable
thereafter.

     

    b.           Purchase
Price.  Simultaneously with the delivery of the Transaction
Documents to the Escrow Agent as provided herein, and in any event on or prior
to the Closing Date, the Subscriber shall deliver to the Escrow Agent the full
Purchase Price by check or by wire transfer of immediately available
funds.

     

    c.           Company
Discretion.  The Subscriber understands and agrees that the
Company in its sole discretion reserves the right to accept or reject this or
any other subscription for PPO Units, in whole or in part, notwithstanding prior
receipt by the Subscriber of notice of acceptance of this
subscription.  The Company shall have no obligation hereunder until
the Company shall execute and deliver to the Subscriber an executed copy of this
Agreement.  If this subscription is rejected in whole, or the offering
of PPO Units is terminated, all funds received from the Subscriber will be
returned without interest or offset, and this Agreement shall thereafter be of
no further force or effect.  If this subscription is rejected in part,
the funds for the rejected portion of this subscription will be returned without
interest or offset, and this Agreement will continue in full force and effect to
the extent this subscription was accepted.

     

    3.           Representations and Warranties of the
Company.  The Company hereby represents and warrants to the
Subscriber the following:

     

    a.           Organization and
Qualification.  The Company is a corporation duly organized and
validly existing under the laws of the State of Nevada.  The Company
has all requisite power and authority to carry on its business as currently
conducted.  The Company is duly qualified to transact business in each
jurisdiction in which the failure to be so qualified would not reasonably be
expected to have a material adverse effect on the Company’s business,
properties, financial condition (a “Material
Adverse Effect”).

     

    b.           Authorization.  As
of the Closing, all action on the part of the Company, its board of directors,
officers and existing stockholders necessary for the authorization, execution
and delivery of this Agreement, the Warrant and the performance of all
obligations of the Company hereunder and thereunder shall have been taken, and
this Agreementt and the Warrant, assuming due execution by the parties hereto
and thereto, will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their respective terms, subject to: (i)
judicial principles limiting the availability of specific performance,
injunctive relief, and other equitable remedies and (ii) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
generally relating to or affecting creditors’ rights.

    

    c.           Valid Issuance of the Common
Stock and the Warrant.  The shares of Common Stock and the
Warrant, when issued, sold and delivered in accordance with the terms of this
Agreement for the consideration expressed herein, and the shares of Common Stock
underlying the Warrant, when issued and delivered in accordance with the terms
of the Warrant, shall be duly and validly issued and will be free of
restrictions on transfer directly or indirectly created by the Company other
than restrictions on transfer under this Agreement and the terms of the Warrant
and under applicable federal and state securities laws.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    d.           Governmental
Consents.  No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of the Company is
required in connection with the offer, sale or issuance of the PPO Units, except
for the following: (i) the filing of such notices as may be required under the
Securities Act and (ii) the compliance with any applicable state securities
laws, which compliance will have occurred within the appropriate time periods
therefor.

    

    e.           Litigation.  There
are no actions, suits, proceedings or investigations pending or, to the best of
the Company’s knowledge, threatened before any court, administrative agency or
other governmental body against the Company which question the validity of this
Agreement or the Warrant, or the right of the Company to enter into any of them,
or to consummate the transactions contemplated hereby or thereby, or which would
reasonably be expected to have a Material Adverse Effect.  The Company
is not a party or subject to, and none of its assets is bound by, the provisions
of any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality which would reasonably be expected to have a Material
Adverse Effect.

    

    f.           Compliance with Other
Instruments.  The Company is not in violation or default of any
provision of its Articles of Incorporation, each as in effect immediately prior
to the Closing, except for such failures as would not reasonably be expected to
have a Material Adverse Effect. The Company is not in violation or default of
any provision of any material instrument, mortgage, deed of trust, loan,
contract, commitment, judgment, decree, order or obligation to which it is a
party or by which it or any of its properties or assets are bound which would
reasonably be expected to have a Material Adverse Effect.  To the best
of its knowledge, the Company is not in violation or default of any provision of
any federal, state or local statute, rule or governmental regulation which would
reasonably be expected to have a Material Adverse Effect.  The
execution, delivery and performance of and compliance with this Agreement and
the issuance and sale of the PPO Units, will not result in any such violation,
be in conflict with or constitute, with or without the passage of time or giving
of notice, a default under any such provision, require any consent or waiver
under any such provision (other than any consents or waivers that have been
obtained), or result in the creation of any mortgage, pledge, lien, encumbrance
or charge upon any of the properties or assets of the Company pursuant to any
such provision.

    

    g.           Certain Registration
Matters.  Assuming the accuracy of the Subscriber’s
representations and warranties set forth in this Agreement and the Transaction
Documents, and the representations and warranties made by all other purchasers
of PPO Units in the Offering, no registration under the Securities Act is
required for the offer and sale of the PPO Units by the Company to the
Subscriber hereunder.

    

    h.           No General
Solicitation.  Neither the Company nor any person acting on
behalf of the Company has offered or sold any of the PPO Units by any form of
general solicitation or general advertising (within the meaning of Regulation
D).

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    4.           Representations and Warranties of the
Subscriber.  The Subscriber represents and warrants to the
Company the following:

     

    a.           The
Subscriber, its advisers, if any, and designated representatives, if any, have
the knowledge and experience in financial and business matters necessary to
evaluate the merits and risks of its prospective investment in the Company, and
have carefully reviewed and understand the risks of, and other considerations
relating to, the purchase of PPO Units and the tax consequences of the
investment, and have the ability to bear the economic risks of the
investment.

     

    b.           The
Subscriber is acquiring the PPO Units for investment for its own account and not
with the view to, or for resale in connection with, any distribution
thereof.  The Subscriber understands and acknowledges that the PPO
Units, the shares of Common Stock, the Warrants and the shares of Common Stock
issuable upon exercise of the Warrants (the “Warrant Shares”) have not been
registered under the Securities Act or any state securities laws, by reason of a
specific exemption from the registration provisions of the Securities Act and
applicable state securities laws, which depends upon, among other things, the
bona fide nature of the investment intent as expressed herein.  The
Subscriber further represents that it does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participation to any third person with respect to any of the PPO Units, the
shares of Common Stock, the Warrant or the Warrant Shares.  The
Subscriber understands and acknowledges that the offering of the PPO Units
pursuant to this Agreement will not be registered under the Securities Act nor
under the state securities laws on the ground that the sale provided for in this
Agreement and the issuance of securities hereunder is exempt from the
registration requirements of the Securities Act and any applicable state
securities laws.

     

    c.           The
Subscriber understands that no public market now exists, and there never will be
a public market for, the PPO Units, that an active public market for the
Company’s Common Stock does not now exist and that there may never be an active
public market for the shares of Common Stock sold in the Offering.

     

    d.           The
Subscriber, its advisers, if any, and designated representatives, if any, have
received and reviewed information about the Company and have had an opportunity
to discuss the Company’s business, management and financial affairs with its
management.  The Subscriber understands that such discussions, as well
as any written information provided by the Company, were intended to describe
the aspects of the Company’s business and prospects which the Company believes
to be material, but were not necessarily a thorough or exhaustive description,
and except as expressly set forth in this Agreement, the Company makes no
representation or warranty with respect to the completeness of such information
and makes no representation or warranty of any kind with respect to any
information provided by any entity other than the Company.  Some of
such information includes projections as to the future performance of the
Company, which projections may not be realized, are based on assumptions which
may not be correct and are subject to numerous factors beyond the Company’s
control.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    e.           As
of the Closing, all action on the part of Subscriber, and its officers,
directors and partners, if applicable, necessary for the authorization,
execution and delivery of this Agreement and the performance of all obligations
of the Subscriber hereunder shall have been taken, and this Agreement, assuming
due execution by the parties hereto, constitutes a valid and legally binding
obligation of the Subscriber, enforceable in accordance with its terms, subject
to: (i) judicial principles limiting the availability of specific performance,
injunctive relief, and other equitable remedies and (ii) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
generally relating to or affecting creditors’ rights.

     

    f.           The
Subscriber either (i) is an “accredited investor” as defined in Rule 501 of
Regulation D as promulgated by the Securities and Exchange Commission under the
Securities Act or (ii) is not a “U.S. Person” as defined in Regulation S as
promulgated by the Securities and Exchange Commission under the Securities Act,
and, in each case, shall submit to the Company such further assurances of such
status as may be reasonably requested by the Company.

     

    g.           The
Subscriber, if a non-U.S. Person, agrees that it is acquiring the Shares in an
offshore transaction pursuant to Regulation S and hereby represents to the
Company as follows:

     

    (i)           Subscriber
is outside the United States when receiving and executing this Subscription
Agreement; and

     

    (ii)           Subscriber
has not acquired the Shares as a result of, and will not itself engage in, any
“directed selling efforts” (as defined in Regulation S) in the United States in
respect of the Shares which would include any activities undertaken for the
purpose of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for the resale of the Shares;
provided, however, that the Subscriber may sell or otherwise dispose of the
Shares pursuant to registration of the Shares under the Securities Act and any
applicable state and provincial securities laws or under an exemption from such
registration requirements and as otherwise provided herein.

     

    (iii)           The
Subscriber understands and agrees that offers and sales of any of the Shares
prior to the expiration of a period of one year after the date of transfer of
the Shares under this Subscription Agreement (the “Distribution Compliance
Period”), shall only be made in compliance with the safe harbor provisions set
forth in Regulation S, pursuant to the registration provisions of the Securities
Act or an exemption therefrom, and that all offers and sales after the
Distribution Compliance Period shall be made only in compliance with the
registration provisions of the Securities Act or an exemption therefrom, and in
each case only in accordance with all applicable securities laws.

     

    (iv)           The
Subscriber understands and agrees not to engage in any hedging transactions
involving the Shares prior to the end of the Distribution Compliance Period
unless such transactions are in compliance with the Securities Act.

     

    (v)           The
Subscriber hereby represents that it has satisfied itself as to the full
observance of the laws of its jurisdiction in connection with any invitation to
subscribe for the Shares or any use of this Subscription Agreement, including:
(a) the legal requirements within its jurisdiction for the purchase of the
Shares; (b) any foreign exchange restrictions applicable to such purchase; (c)
any governmental or other consents that may need to be obtained; and (d) the
income tax and other tax consequences, if any, that may be relevant to the
purchase, holding, redemption, sale or transfer of the Shares. Such Subscriber’s
subscription and payment for, and its continued beneficial ownership of the
Shares, will not violate any applicable securities or other laws of the
Subscriber’s jurisdiction.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    h.           The
Subscriber or its duly authorized representative realizes that because of the
inherently speculative nature of investments of the kind contemplated by the
Company, the Company’s investment results may be expected to fluctuate from
month to month and from period to period and will, generally, involve a high
degree of financial and market risk that can result in substantial or, at times,
even total losses.

     

    i.           The
Subscriber has adequate means of providing for its current and anticipated
financial needs and contingencies, is able to bear the economic risk for an
indefinite period of time and has no need for liquidity of the investment in the
PPO Units and could afford complete loss of such investment.

     

    j.           The
Subscriber is not subscribing for PPO Units as a result of or subsequent to any
advertisement, article, notice or other communication, published in any
newspaper, magazine or similar media or broadcast over television, radio, or the
internet, or presented at any seminar or meeting, or any solicitation of a
subscription by a person not previously known to the Subscriber in connection
with investments in securities generally.

     

    k.           All
of the information that the Subscriber has heretofore furnished or which is set
forth herein is correct and complete as of the date of this Agreement, and, if
there should be any material change in such information prior to the admission
of the undersigned to the Company, the Subscriber will immediately furnish
revised or corrected information to the Company.

     

    5.           Transfer
Restrictions.  The Subscriber acknowledges and agrees as
follows:

     

    a.           The
PPO Units, the shares of Common Stock and the Warrant have not been registered
for sale under the Securities Act, in reliance on the private offering exemption
in Section 4(2) thereof; the Company does not intend to register the PPO Units,
the shares of Common Stock and the Warrant under the Securities Act at any time
in the future; and the undersigned will not immediately be entitled to the
benefits of Rule 144 with respect to the PPO Units, the shares of Common Stock
and the Warrant.

     

    b.           The
Subscriber understands that the certificates representing the Shares and the
Warrants, until such time as the Shares or Warrant Shares (as the case may
be)  have been registered under the Securities Act, shall bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such certificates or other
instruments):

    

    For U.S.
Persons:

    

    THE
SECURITIES REPRESENTED HEREBY [(AND THE SECURITIES ISSUABLE UPON THE EXERCISE
HEREOF)] HAVE BEEN ISSUED PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”).  THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES,
AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS THE SECURITIES ARE REGISTERED
UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT IS AVAILABLE.  IN ADDITION, HEDGING TRANSACTIONS
INVOLVING SUCH SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    
      For
Non-U.S. Persons:

    

     

    THESE
SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S.
PERSONS (AS DEFINED IN REGULATION S) PURSUANT TO REGULATION S UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). ACCORDINGLY, NONE OF
THE SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE BEEN REGISTERED UNDER THE
1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY
BE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S.
PERSONS EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE
SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933
ACT.

     

    Furthermore,
the warrants issued to investors purchasing units in this offering in an
offshore transaction outside the united states in reliance on regulation s will
bear an additional restrictive legend to the following effect:

     

    THIS
WARRANT MAY NOT BE EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF A U.S.
PERSON OR A PERSON IN THE UNITED STATES UNLESS THE WARRANT AND THE UNDERLYING
SECURITIES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT AND THE APPLICABLE
SECURITIES LEGISLATION OF ANY SUCH STATE OR AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS IS AVAILABLE.

     

    The
legend(s) set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Shares upon which it is
stamped, if (a) such Shares are being sold pursuant to a registration
statement under the Securities Act, or (b) such holder delivers to the
Company an opinion of counsel, in a reasonably acceptable form, to the Company
that a disposition of the Shares is being made pursuant to an exemption from
such registration.

     

    c.           No
governmental agency has passed upon the PPO Units, the shares of Common Stock
and the Warrant or made any finding or determination as to the wisdom of any
investments therein.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    d.           There
are substantial restrictions on the transferability of the shares of Common
Stock, and if the Company decides to issue certificates representing the shares
of Common Stock, restrictive legends will be placed on any such
certificates.

    

    6.           Indemnification.  The
Subscriber agrees to indemnify and hold harmless the Company,  any placement agent,
dealer or finder in the Offering, and their respective officers, directors,
employees, agents, advisors, control persons and affiliates from and against all
losses, liabilities, claims, damages, costs, fees and expenses whatsoever
(including, but not limited to, any and all expenses incurred in investigating,
preparing or defending against any litigation commenced or threatened) based
upon or arising out of any actual or alleged false acknowledgment,
representation or warranty, or misrepresentation or omission to state a material
fact, or breach by the Subscriber of any covenant or agreement made by the
Subscriber herein or in any other document delivered in connection with this
Agreement.

     

    7.           Irrevocability; Binding
Effect.  The Subscriber hereby acknowledges and agrees that the
subscription hereunder is irrevocable by the Subscriber, except as required by
applicable law, and that this Agreement shall survive the death or disability of
the Subscriber and shall be binding upon and inure to the benefit of the parties
and their heirs, executors, administrators, successors, legal representatives
and permitted assigns.  If the Subscriber is more than one person, the
obligations of the Subscriber hereunder shall be joint and several and the
agreements, representations, warranties and acknowledgments herein shall be
deemed to be made by and be binding upon each such person and such person’s
heirs, executors, administrators, successors, legal representatives and
permitted assigns.

    

    8.           Modification.  This
Agreement shall not be modified or waived except by an instrument in writing
signed by the party against whom any such modification or waiver is
sought.

     

    9.           Notices.  All
notices or other communications which are required or permitted under this
Agreement shall be in writing and sufficient if transmitted by hand delivery, by
facsimile transmission, by registered or certified mail, postage pre-paid, by
electronic mail, or by nationally recognized overnight carrier, to the persons
at the addresses set forth below (or at such other address as may be provided
hereunder), and shall be deemed to have been delivered (i) if transmitted by
hand delivery, as of the date delivered, (ii) if transmitted by facsimile or
electronic mail, as of the date so transmitted with an automated confirmation of
delivery, (iii) if transmitted by nationally recognized overnight carrier, as of
the Business Day following the date of delivery to the carrier, and (iv) if
transmitted by registered or certified mail, postage pre-paid, on the third
Business Day following posting with the U.S. Postal Service: (a) if to the
Company, at the address set forth above, or (b) if to the Subscriber, at the
address set forth on the signature page hereof (or, in either case, to such
other address as the party shall have furnished in writing in accordance with
the provisions of this Section).

    

    10.           Assignability.  This
Agreement and the rights, interests and obligations hereunder are not
transferable or assignable by the Subscriber and the transfer or assignment of
the PPO Units, the shares of Common Stock, the Warrant or the shares of Common
Stock underlying the Warrants shall be made only in accordance with all
applicable laws.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    11.           Applicable
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without reference to the
principles thereof relating to the conflict of laws.

     

    12.           Arbitration.  The
parties agree to submit all controversies to arbitration in accordance with the
provisions set forth below and understand that:

    

    (a)           Arbitration
is final and binding on the parties.

    

    (b)           The
parties are waiving their right to seek remedies in court, including the right
to a jury trial.

    

    (c)           Pre-arbitration
discovery is generally more limited and different from court
proceedings.

    

    (d)           The
arbitrator’s award is not required to include factual findings or legal
reasoning and any party’s right to appeal or to seek modification of rulings by
arbitrators is strictly limited.

    

    (e)           The
panel of arbitrators will typically include a minority of arbitrators who were
or are affiliated with the securities industry.

    

    (f)           All
controversies which may arise between the parties concerning this Agreement
shall be determined by arbitration pursuant to the rules then pertaining to the
Financial Industry Regulatory Authority in New York City, New
York.  Judgment on any award of any such arbitration may be entered in
the Supreme Court of the State of New York or in any other court having
jurisdiction of the person or persons against whom such award is
rendered.  Any notice of such arbitration or for the confirmation of
any award in any arbitration shall be sufficient if given in accordance with the
provisions of this Agreement.  The parties agree that the
determination of the arbitrators shall be binding and conclusive upon
them.

    

    13.           Blue Sky
Qualification.  The purchase of PPO Units under this Agreement
is expressly conditioned upon the exemption from qualification of the offer and
sale of the PPO Units from applicable federal and state securities
laws.  The Company shall not be required to qualify this transaction
under the securities laws of any jurisdiction and, should qualification be
necessary, the Company shall be released from any and all obligations to
maintain its offer, and may rescind any sale contracted, in the
jurisdiction.

    

    14.           Use of
Pronouns.  All pronouns and any variations thereof used herein
shall be deemed to refer to the masculine, feminine, neuter, singular or plural
as the identity of the person or persons referred to may require.

    

    15.           Confidentiality.  The
Subscriber acknowledges and agrees that any information or data the Subscriber
has acquired from or about the Company, not otherwise properly in the public
domain, including, without limitation, the business summary of the Company, was
received in confidence.  The Subscriber agrees not to divulge,
communicate or disclose, except as may be required by law or for the performance
of this Agreement, or use to the detriment of the Company or for the benefit of
any other person, or misuse in any way, any confidential information of the
Company, including any scientific, technical, trade or business secrets of the
Company and any scientific, technical, trade or business materials that are
treated by the Company as confidential or proprietary, including, but not
limited to, ideas, discoveries, inventions, developments and improvements
belonging to the Company and confidential information obtained by or given to
the Company about or belonging to third parties.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    16.           Miscellaneous.

    

    (a)           This
Agreement constitutes the entire agreement between the Subscriber and the
Company with respect to the subject matter hereof and supersede all prior oral
or written agreements and understandings, if any, relating to the subject matter
hereof.  The terms and provisions of this Agreement may be waived, or
consent for the departure therefrom granted, only by a written document executed
by the party entitled to the benefits of such terms or provisions.

    

    (b)           The
representations and warranties of the Company and the Subscriber made in this
Agreement shall survive the execution and delivery hereof and delivery of the
Common Stock and the Warrants contained in the PPO Units.

    

    (c)           Each
of the parties hereto shall pay its own fees and expenses (including the fees of
any attorneys, accountants, appraisers or others engaged by such party) in
connection with this Agreement and the transactions contemplated hereby, whether
or not the transactions contemplated hereby are consummated.

    

    (d)           This
Agreement may be executed in one or more original or facsimile counterparts,
each of which shall be deemed an original, but all of which shall together
constitute one and the same instrument.

    

    (e)           Each
provision of this Agreement shall be considered separable and, if for any reason
any provision or provisions hereof are determined to be invalid or contrary to
applicable law, such invalidity or illegality shall not impair the operation of
or affect the remaining portions of this Agreement.

    

    (f)           Paragraph
titles are for descriptive purposes only and shall not control or alter the
meaning of this Agreement as set forth in the text.

    

    (g)           The
Subscriber understands and acknowledges that there may be multiple Closings for
the Offering.

    

    (h)           The
Subscriber hereby agrees to furnish the Company such other information as the
Company may request prior to the Closing with respect to its subscription
hereunder.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    17.           Public
Disclosure.  Neither the Subscriber nor any officer, manager,
director, member, partner, stockholder, employee, affiliate, affiliated person
or entity of the Subscriber shall make or issue any press releases or otherwise
make any public statements or make any disclosures to any third person or entity
with respect to the transactions contemplated herein and will not make or issue
any press releases or otherwise make any public statements of any nature
whatsoever with respect to the Company without the Company’s express prior
approval.  The Company has the right to withhold such approval in its
sole discretion.

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    How
to subscribe for PPO Units in the private offering of

    Nevada
Gold Holdings, Inc.:

    

    
      	
              1.

            	
              Date and Fill in the
      number of PPO Units being purchased and Complete and Sign the
      Signature Page.

            

    

    

    
      	
              2.

            	
              Initial the Investor
      Certification page.

            

    

    

    
      	
              3.

            	
              Fax or email all forms and
      then send all signed original documents
to:

            

    

    

    Gottbetter
& Partners, LLP

    488
Madison Avenue, 12th Floor

    New York,
NY  10022

    Facsimile
Number:  (212) 400-6901

    Telephone
Number:  (212) 400-6900

    Attn:  Rachel
L. DeGenaro

    E-mail
Address:  rlg@gottbetter.com

    

    
      	
              4.

            	
              If
      you are paying the Purchase Price by check, a check for the
      exact dollar amount of the Purchase Price for the number of PPO Units you are
      purchasing should be made payable to the order of “CSC Trust Company of Delaware,
      Escrow Agent for NEVADA GOLD HOLDINGS, INC.” and should sent to CSC Trust
      Company of Delaware, 2711 Centerville Road, One Little Falls Center,
      Wilmington, DA 19808.

            

    

    

    
      	
              5.

            	
              If
      you are paying the Purchase Price by wire transfer, you should send
      a wire transfer for the exact dollar amount of the Purchase Price for the
      number of PPO Units you are purchasing according to the following
      instructions:

            

    

    

    
      
        
          
            
              
                
                  	
                          Bank:

                        	 	
                          PNC
      Bank.

                        
	
                          ABA
      Routing #:

                        	 	
                          031
      100 089

                        
	
                          Account
      Name

                        	 	
                          CSC
      Trust Company of Delaware

                        
	
                          Account
      #:

                        	 	
                          5605012373

                        
	
                          Reference:

                        	 	
                          “Nevada
      Gold Holdings Escrow 79-1289

                          –
      [insert Subscriber’s
name]”

                        

                

              

            

          

        

      

    

     

    Thank you
for your interest,

    

    Nevada
Gold Holdings, Inc.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    NEVADA
GOLD HOLDINGS, INC.

    SIGNATURE
PAGE TO

    SUBSCRIPTION
AGREEMENT

    

    IN
WITNESS WHEREOF, the Subscriber hereby executes this Subscription
Agreement.

     

    Dated:                                                      ,
2009

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              	
                                                                      SUBSCRIBER
      (individual)

                                                                    	 	
                                                                      SUBSCRIBER
      (entity)

                                                                    
	 
      	 	 
      
	 
      	 	 
      
	
                                                                      Signature

                                                                    	 	
                                                                      Name
      of Entity

                                                                    
	 
      	 	 
      
	 
      	 	 
      
	
                                                                      Print
      Name

                                                                    	 	
                                                                      Signature

                                                                    
	 
      	 	 
      
	 
      	 	

                                                                      Print Name:

                                                                    	
                                                                       

                                                                    
	
                                                                      Signature
      (if Joint Tenants or Tenants in Common)

                                                                    	 	 
      
	 
      	 	

                                                                      Title:

                                                                    	
                                                                       

                                                                    
	 
      	 	 
      
	
                                                                      Address
      of Principal Residence:

                                                                    	 	
                                                                      Address
      of Executive Offices:

                                                                    
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	
                                                                      Social
      Security Number(s):

                                                                    	 	
                                                                      IRS
      Tax Identification Number:

                                                                    
	 
      	 	 
      
	 
      	 	 
      
	
                                                                      Telephone
      Number:

                                                                    	 	
                                                                      Telephone
      Number:

                                                                    
	 
      	 	 
      
	 
      	 	 
      
	
                                                                      Facsimile
      Number:

                                                                    	 	
                                                                      Facsimile
      Number:

                                                                    
	 
      	 	 
      
	 
      	 	 
      
	
                                                                      E-mail
      Address:

                                                                    	 	
                                                                      E-mail
      Address:

                                                                    
	 
      	 	 
      

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	 
      	 	
                                    X

                                  	
                                    $0.25

                                  	 	
                                    =

                                  	 	

                                    $

                                  	
                                     

                                  
	
                                    Number
      of PPO Units

                                  	 	
                                     

                                  	
                                    

                                      Price
      per PPO Unit

                                    

                                  	 	 
      	 	Purchase
      Price

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    NEVADA
GOLD HOLDINGS, INC.

     

    IN
WITNESS WHEREOF, the Company has duly executed this Subscription
Agreement.

     

    
      
        
          
            
              
                
                  
                    	
                            NEVADA
      GOLD HOLDINGS, INC.

                          
	 
      	 
      	 
      
	
                            By:

                          	 
      	 
      
	 
      	
                            Name:

                          	
                            David
      Mathewson

                          
	 
      	
                            Title:

                          	
                            Chief
      Executive Officer, President

                          
	 
      	 
      	
                            and
      Chairman of the
Board

                          

                  

                

              

            

          

        

      

    

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      Appendix
A

    

     

    NEVADA
GOLD HOLDINGS, INC.

    INVESTOR
CERTIFICATION

    

    For
Individual Accredited Investors Only

    (all
Individual Accredited Investors must INITIAL where
appropriate):

    

    
      
        	
                Initial
      _______

              	 	
                I
      have a net worth (including home, furnishings and automobiles) in excess
      of $1,000,000 either individually or through aggregating my individual
      holdings and those in which I have a joint, community property or other
      similar shared ownership interest with my spouse.

              
	
                Initial
      _______

              	 	
                I
      have had an annual gross income for the past two years of at least
      $200,000 (or $300,000 jointly with my spouse) and expect my income (or
      joint income, as appropriate) to reach the same level in the current
      year.

              

      

    

    

    
      For Non-Individual Accredited
Investors

    

    
      (all Non-Individual Accredited
Investors must INITIAL where
appropriate):

    

    

    
      
        	
                Initial
      _______

              	 	
                The
      investor certifies that it is a partnership, corporation, limited
      liability company or business trust that is 100% owned by persons who meet
      at least one of the criteria for Individual Investors set forth
      above.

              
	
                Initial
      _______

              	 	
                The
      investor certifies that it is a partnership, corporation, limited
      liability company or business trust that has total assets of at least $5
      million and was not formed for the purpose of investing in the
      Company.

              
	
                Initial
      _______

              	 	
                The
      investor certifies that it is an employee benefit plan whose investment
      decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is
      a bank, savings and loan association, insurance company or registered
      investment adviser.

              
	
                Initial
      _______

              	 	
                The
      investor certifies that it is an employee benefit plan whose total assets
      exceed $5,000,000 as of the date of this Agreement.

              
	
                Initial
      _______

              	 	
                The
      undersigned certifies that it is a self-directed employee benefit plan
      whose investment decisions are made solely by persons who meet either of
      the criteria for Individual Investors.

              
	
                Initial
      _______

              	 	
                The
      investor certifies that it is a U.S. bank, U.S. savings and loan
      association or other similar U.S. institution acting in its individual or
      fiduciary capacity.

              
	
                Initial
      _______

              	 	
                The
      undersigned certifies that it is a broker-dealer registered pursuant to
      §15 of the Securities Exchange Act of 1934.

              
	
                Initial
      _______

              	 	
                The
      investor certifies that it is an organization described in §501(c)(3) of
      the Internal Revenue Code with total assets exceeding $5,000,000 and not
      formed for the specific purpose of investing in the
    Company.

              
	
                Initial
      _______

              	 	
                The
      investor certifies that it is a trust with total assets of at least
      $5,000,000, not formed for the specific purpose of investing in the
      Company, and whose purchase is directed by a person with such knowledge
      and experience in financial and business matters that he is capable of
      evaluating the merits and risks of the prospective
    investment.

              
	
                Initial
      _______

              	 	
                The
      investor certifies that it is a plan established and maintained by a state
      or its political subdivisions, or any agency or instrumentality thereof,
      for the benefit of its employees, and which has total assets in excess of
      $5,000,000.

              
	
                Initial
      _______

              	 	
                The
      investor certifies that it is an insurance company as defined in §2(13) of
      the Securities Act, or a registered investment
  company.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

    

    
      NEVADA GOLD HOLDINGS,
INC.

    

    
      INVESTOR
CERTIFICATION (continued)

    

    

    
      For
Non-U.S. Person Investors

    

    (all Investors who are not a U.S.
Person must INITIAL this section):

    

    
      
        	
                Initial
      _______

              	 	
                The
      Investor is not a “U.S. Person” as defined in Regulation S; and
      specifically the Purchaser is not:

              
	 
      	 	 
      
	
                A.

              	 	
                a
      natural person resident in the United States of America, including its
      territories and possessions (“United States”);

              
	
                B.

              	 	
                a
      partnership or corporation organized or incorporated under the laws of the
      United States;

              
	
                C.

              	 	
                an
      estate of which any executor or administrator is a U.S.
      Person;

              
	
                D.

              	 	
                a
      trust of which any trustee is a U.S. Person;

              
	
                E.

              	 	
                an
      agency or branch of a foreign entity located in the United
      States;

              
	
                F.

              	 	
                a
      non-discretionary account or similar account (other than an estate or
      trust) held by a dealer or other fiduciary for the benefit or account of a
      U.S. Person;

              
	
                G.

              	 	
                a
      discretionary account or similar account (other than an estate or trust)
      held by a dealer or other fiduciary organized, incorporated, or (if an
      individual) resident in the United States; or

              
	
                H.

              	 	
                a
      partnership or corporation: (i) organized or incorporated under the laws
      of any foreign jurisdiction; and (ii) formed by a U.S. Person principally
      for the purpose of investing in securities not registered under the
      Securities Act, unless it is organized or incorporated, and owned, by
      accredited investors (as defined in Rule 501(a) under the Act) who are not
      natural persons, estates or
trusts.

              

      

    

    

    
      
        	
                And,
      in addition:

              
	 
      	 	 
      
	
                I.

              	 	
                the
      Purchaser was not offered the Units in the United
  States;

              
	
                J.

              	 	
                at
      the time the buy-order for the Units was originated, the Purchaser was
      outside the United States; and

              
	
                K.

              	 	
                the
      Purchaser is purchasing the Units for its own account and not on behalf of
      any U.S. Person (as defined in Regulation S) and a sale of the Units has
      not been pre-arranged with a purchaser in the United
    States.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}]]